You’re Gonna Need a Bigger Boat
Size matters. Just ask Roy Scheider. As incredulous as it may seem, I only recently sat myself down to watch that American scare-you-out-of-the-water staple Jaws for the first time. As a baby born in 1970, the movie at its debut in 1975 was hugely inappropriate for my always precocious, but nevertheless only five-year old self. And by the time this Texas girl and those Yankee cousins of mine were pondering breaking the movie rules during those long-ago summers in Madison, Connecticut, it was not Jaws but rather Brat Pack movies that tempted us. We started down our road of movie rebellion with St. Elmo’s Fire, then caught up with a poor Molly Ringwald in Pretty in Pink and then really stretched our boundaries with Less than Zero – you get the picture.
And so finally during this long, hot summer of 2015, a seemingly appropriate time with our country gripped from coast to coast with real-life shark hysteria, I watched Jaws for the first time and heard Roy Scheider as Chief Martin Brody utter those words, “You’re gonna need a bigger boat.”
Prophetically, the reality might just be that the collective “we,” and quite possibly sooner than we think, really will need a bigger boat. That is, as it pertains to the global debt markets, which have swollen past the $200 trillion mark this year rendering the great white featured in Jaws, which can be equated with past debt markets, as defenseless and small as a teensy, striped Nemo by comparison.
The question for the ages will be whether size really does matter when it comes to the debt markets. It’s been more than three years since Bridgewater Associates’ Ray Dalio excited the investing world with the notion that the levered excesses that culminated in the financial crisis could be unwound in a “beautiful” way.
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