An interesting comment from Jim Reid of Deutsche Bank in the wake of swooning stock markets and riots in London:
Although not linked to the sell-off we can’t help thinking that we live in socially volatile times generally due to economic hardship. This is something that may eventually have ramifications for Europe’s future in the years ahead. If the person on the street and voters get fed up of the Euro straight [sic] jacket then days like yesterday in financial markets could look mild.
Yup. There’s no doubt that the strength in financial markets over the last 30 years—the long bull market in stocks that ran from 1982–2000, and the bull run in bonds that continues through today—is a reflection of political quiescence, the nearly unchallenged victory of bourgeois power and ideology. If that changes because people have finally had enough, then there will be rioting on trading desks to match that in the streets.
What Reid says may—may—be more applicable to Europe. The U.S. population seems more passive, and our police, more violently repressive (a tradition that goes back to the labor violence of the late 19th century, when cops and Pinkertons killed strikers with far more abandon than their European counterparts). S&P’s opinion aside, that could give fresh meaning to the notion of U.S. Treasury securities as “safe havens” in time of crisis.