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Welcome to the year of the castrated bull

Before the clock strikes midnight, let me take a moment to contemplate how we are now exactly one month into the year of the castrated bull - and how there's rarely been a year more aptly named than this.

If you're not following my logic, I'm talking about how we entered the Chinese Year of the Ox on 26 January, and, as an ox is simply a castrated bull, and a bull in financial jargon is used to describe  (often overtly) optimistic investors who play hard and take big risks, what better metaphore to describe the year so far.  


This is of course a post I should have written a month ago, and by now I'd thought this metaphore would be all over the place - but my quick google search indicates it isn't so. The closest thing I can find is this piece in The Economist on how China's economy economy is like a castrated bull.

A herd of castrated bulls

Now, I should have had a look at what Lexis Nexis might throw up, but as it's not at my disposal... Why only China? How about Iceland, dubbed the Nordic hedge fund masquerading as a country? How about the countries in Eastern Europe and elswhere tethering on the brink of catastrophe induced by the collapse of their credit bubbles?

How about households all over the Western world staggering under the burden of the credit crunch and debts turned bad? How about companies, not at least in the media industry, who until recently went on massive spending sprees and invested recklessly in expansions and extravagant, some would say meglomaniac, business ideas? How about all those bullish investors, small and big, who banked on the good times continuing forver?

Like a house of cards
From my own beat, Baugur is a name that easily springs to mind. Not to mention the Baugur-funded Nyhedsavisen, or as I wrote last August:

"The very idea of starting a newspaper, a freesheet nonetheless, in a time when experts are overbidding each other to predict the death of newspapers and the demise of advertisement-funded business models - such as Dagsbrun did, backed by Baugur... in 2006 - reeks of hubris. From the beginning and to this very day, when Nyhedsavisen is the most read newspaper in the country, Danish media has been waiting for the construction to fall apart like a house of cards. Enter American venture capitalist Tim Draper and his self-composed tune, The Riskmaster, with this enticing refrain: "He is the Riskmaster, Lives fast drives faster, Skates on the edge of disaster, He is the Riskmaster".

Well, as regular readers know: despite his bullish outlook, in the end Nyhedsavisen was apparently too risky a project even for Draper, the partnership that was to save the freesheet never happened, and the newspaper went bankrupt just a month after that post was written.

In fact, the story of Baugur and its many spin-offs reads like a classic tale of hubris and nemesis. Now, for some reason I associate the concept of nemesis, or divine retribution, with unjust punishment meted out by capricious gods to stop humans or other creatures, like Promotheus, for striving to be more (educated, enlightened etc) - for things that I've always considered man's greates virtues - but then, I have a feeling my grip on Greek mythology is not what it used to be.

However, the bigger theme that runs through everything I've described so far is one that rhymes all too well with the concept of hubris and nemesis: there is, with so many of the businesses and fancy schemes collapsing around us, a strong sense of a staggering fall, a very humiliating defeat - grand plans gone ever so wrong, revealed to be a house of cards or worse.

It's the abject and bitter humiliation that goes with realising you've been living a lie: you've completely overestimated your ability to handle the debts you've amassed; your bank sold you a ponzi scheme and you failed, against your better judgement, to read the small print; you discover your partner is a jerk and it turns out everybody else knew it, you'd just failed to see the writing on the wall.


The opposite of the bull in financial jargon is the pessimistic bear - analysts will tell you financial markets are cyclical and move in and out of bull and bear phases - but, metaphorically speaking, I think the sentiment of humiliating punishement, summed up in the symbol of the castrated bull, describes 2009 better: castrated the bull is chastised, domesticated, tamed - and perhaps displayed for public amusement as in the picture here - but there's no turning a bull into a bear.


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