In his morning note, UBS floor guy Art Cashin takes the pulse of the moment, with protests growing, and Obama talking about taxing millionaires more, he senses a serious escalation in class warfare.
Lessons Unlearned In The Arab Spring – In the spring of 2011, the town squares of the Middle East came alive with millions of young people armed, not with the traditional Molotov cocktail, but with Twitter and Facebook and such.
Against a backdrop of broad unemployment, food shortages, rising fuel prices and government indifference, they had simply had enough. Like a group of 20-something Howard Beales of the 21st Century, they wanted to tell the world they were “mad as hell and were not gonna take it anymore.” But, it being the 21st Century, they didn’t do it by shouting out an open window. They snapped on a hand-held device and instantly told hundreds and thousands of friends.
The results were electrifying in both the communicative and sociological senses. The leadership of the countries involved were stunned. Western observers were stunned. Most of the demonstrators were also stunned by the instantaneous and massive results of their efforts.
The Western world went from stunned and frozen to stunned but struggling to react. There was an urge to quickly “get in front of the movements.” Allies were jettisoned quickly in an effort to openly embrace the new, the “good.”
Then second thoughts began to sink in. Fear of unexpected consequences began to grow quickly. Was this like overthrowing the Shah a dozen times? The answer to that question is still playing out and remains almost as unclear today as it was when the town squares were full.
Traders had an eerie reminder of the Arab Spring yesterday in the President’s news conference. He was specifically asked about the recent protests on Wall Street. He surprised us by not re-generalising the question. To re-phrase it in terms of people generally having a sense that things were not fair. Rather, he seemed to say that this particular demonstration was understandable. As we learned, or thought we did in the Arab Spring, endorsing vague movements on the fly can bring unexpected consequences. We hope the President knows more about this movement than we do.
Two years ago, as the “us and them” rhetoric began, we cautioned that this could spill into the streets. Verbum Sat Sapienti.