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The Credit StrategistThis essay is excerpted from a recent version of The Credit Strategist (formerly the HCM Market Letter). To obtain the complete issue, you must subscribe directly to this publication; Please go here. The Credit Strategist is on Twitter - @credstrategist

“One must have a mind of winter/To regard the frost and the boughs/Of the pine-trees crusted with snow;//And have been cold a long time/To behold the junipers shagged with ice,/The spruces rough in the distant glitter//Of the January sun; and not to think/Of any misery in the sound of the wind,/In the sound of a few leaves,//Which is the sound of the land/Full of the same wind/That is blowing in the same bare place//For the listener, who listens in the snow,/And nothing himself, beholds/Nothing that is not there and the nothing that is.”

Wallace Stevens, “The Snow Man” (1921)1

Wallace Stevens (1879-1955) is remembered as an important American modernist poet, but he spent his days (when he was not scribbling poems in his notebooks) drafting legal contracts as an insurance company attorney. In “The Snow Man,” he dramatizes human consciousness confronting the external world in language that is deceptively simple. There is nothing simple, however, about Stevens’ portrayal of human consciousness.2 His description of the world as “Nothing that is not there and the nothing that is” serves as a vivid emblem, not only of what men see when they look outside themselves, but of what they see when they look at the modern global financial system. This system is one in which value is wholly dependent on policy that is obviously unsustainable and financial instruments are little more than electronic bytes. Moreover, the survival of the system is wholly reliant on these bytes freely circulating around the world. The fragility of the external world and the complexity of human consciousness are overwhelming characteristics of the systems on which human life depends.

Virtually every conversation with a conscientious investor today includes an acknowledgement that central banks’ massive stimulus efforts will end in tears. Unfortunately, nobody can specify when the tears will start flowing. In his new book, Antifragile, Nassim Nicholas Taleb argues that “it is much easier to understand if something is harmed by volatility – hence fragile – than try to forecast harmful events, such as these oversized Black Swans.”3

1. Wallace Stevens, The Palm at the End of the Mind: Selected Poems and a Play (New York: Vintage Books, 1972), p. 54. Double hash marks (//) denote stanza breaks and single hash marks (/) denote line breaks.

2. The poem moves from seeing (“regard the frost,” “behold the junipers”) to thought (“not to think/Of any misery”) to hearing (“the sound of the wind,” “the sound of a few leaves”) and then to a conflation of seeing and hearing (“the listener, who listens in the snow,/And nothing himself, beholds/Nothing that is not there…”). Using all of the tools of consciousness, man is “nothing himself” left beholding “Nothing that is not there and the nothing that is.” I have read this haunting poem hundreds of times since I first discovered it as a student at Brown in the late 1970s. Like other great works of art, its meaning grows with each successive encounter.

3. Nassim Nicholas Taleb, Antifragile: Things That Gain from Disorder (New York: Random House, 2012), pp. 12-13. I would urge everyone to read this important book, which is filled with valuable insights on virtually every page.