Depending on who you consult, 2009 is the year of Brown or Earth Cow, and it can be either a very good year or turn out just the opposite. It seems Japanese punters are very superstitious about the cow, brown or otherwise.
Far from a bull run, they are expecting the cow to stumble this year. A cow or ox year, has in the past been disastrous for Japanese stocks. At the back of the global recession, you don’t need rocket science to know that Japanese stocks won’t do well this year. Neither would our Bursa Malaysia.
The cow is the worst among all the animal zodiac years, it seems. I hope my younger brother won’t get angry with me for saying this because he is a real cow or ox rather born in 1949.
In 1973, a cow year, the Nikkei plummeted 17.3 percent for the year by a global oil crisis that hit Japan. The next round of the 12-year cycle, in 1985, though stocks gained 13.6 percent for the year, it was their poorest performance in the last half of the 1980s. In 1997, Yamaichi Securities, one of Japan’s venerable “Big Four” securities firms, collapsed as the Asian financial crisis deepened. The Nikkei tumbled 21.2 percent.
Superstitions aside, there’s some economic sense to these zodiac cycles as business cylces also oscillates in cycles, usually seven good years will be followed by another seven bad ones before another upswing cycle.
Interestingly, the Jews trace these seven-year economic cycles all the way back to ancient Egypt. Their prophet Moses recorded it in their narrative called “Bereshith” which is part of a larger corpus of their Holy Scriptures called the Torah or what the Muslims know as Taurat in their Qur’an. The Christians retained this in their Old Testament portion of their Bible as the book of Genesis.
As the story goes, old Pharoah had a dream one night that troubled him because all his magicians and geomancers or feng-shui-loh had no clue as to what it meant. Someone’s head would have to roll unless a solution was found quick. Fortunately, they managed to locate just the right guy who could come up with the dream works, Joseph or Yusuf as the Arabs called him. Now, Joseph has been thrown into prison on a false charge of trying to seduce the wife of his boss, who was a high palace official. So Jospeh was freshened up and brought to Pharaoh:
So Pharaoh told Joseph his dream. “In my dream,” he said, “I was standing on the bank of the Nile River, and I saw seven fat, healthy cows come up out of the river and begin grazing in the marsh grass. But then I saw seven sick-looking cows, scrawny and thin, come up after them. I’ve never seen such sorry-looking animals in all the land of Egypt. These thin, scrawny cows ate the seven fat cows. But afterward you wouldn’t have known it, for they were still as thin and scrawny as before! Then I woke up.
“Then I fell asleep again, and I had another dream. This time I saw seven heads of grain, full and beautiful, growing on a single stalk. Then seven more heads of grain appeared, but these were blighted, shriveled, and withered by the east wind. And the shriveled heads swallowed the seven healthy heads. I told these dreams to the magicians, but no one could tell me what they mean.”
Joseph responded, “Both of Pharaoh’s dreams mean the same thing. God is telling Pharaoh in advance what he is about to do. The seven healthy cows and the seven healthy heads of grain both represent seven years of prosperity. The seven thin, scrawny cows that came up later and the seven thin heads of grain, withered by the east wind, represent seven years of famine.
“This will happen just as I have described it, for God has revealed to Pharaoh in advance what he is about to do. The next seven years will be a period of great prosperity throughout the land of Egypt. But afterward there will be seven years of famine so great that all the prosperity will be forgotten in Egypt. Famine will destroy the land. (The Holy Bible, Genesis chapter 41 verses 17-30).
Joseph then advised Pharaoh to set up a national economic recovery council to contain the impending financial contangion that was expected in seven years’ time. Far from resorting to Keynesian economics and short term pump priming prescriptions like what the International Monetary Fund is wont to do, Joseph asked Pharaoh to put aside one fifth of Egypt’s annual crop production as savings.
In terms of modern fiscal policy, this amounts to a 20 percent national savings rate. Compounded over seven years, this will work out to a national surplus so big that it will not only finance the downturn over the next seven years but will also leave plenty in Pharaoh’s coffers for Egypt to continue to be the economic super power of the then known world.
Needless to say, Joseph got himself a new job with all the perks like club membership to the Pyramids and BMW chariots thrown in. In fact, his position was only next to Pharaoh’s in all Egypt. The old man even gave his daugther’s hand to Joseph. Well that’s some fringe benefits indeed.
So it’s going to be a mad cow of a year for all of us. If you think this is a bull of a story, get ready for next year. Enters the Year of the Tiger. Grrrrrr!!!