Fortune favors the prepared mind. –Louis Pasteur
By Lambert Strether of Corrente
I was going to take some pictures at a Winter Solstice bonfire last night and post them here — because there is a finance angle, I promise — but the organizers cancelled it because of the ice storm. So, herewith a picture of an alternative source of light and heat: My wood stove:
Nice to know I’ll still have heat if the power lines go down, from the weight of accreted ice, I hasten to add, not the collapse of Western civilization up here at the end of the supply chain.
Catching myself: “Down,” “weight,” “collapse,” “end” — it’s almost like I’m letting the cold and the dark get to me; only natural, since after all the Winter Solstice is the shortest day of the year. But look on the bright side: The days are only going to get longer from here on out, all the way out past the day planting season begins, so far into the future we might as well not even worry about the days getting shorter again, ever.
My favorite Christmas Carol is It Came Upon a Midnight Clear for the following lines:
From angels bending near the earth,
To touch their harps of gold
I love the image of the sky tearing open, and great shining beings leaning down through the rent; it’s more about the light than the music, with me. I’d include a YouTube, but the rendition I have in mind is my mother’s, as we would sing round the Steinway on Christmas Eve, and Bing Crosby (and Sinatra (and Ella Fitzgerald)) just don’t compare; they don’t soar, as angels should do. Gone the Steinway, gone my mother, gone the family, of course; ice and sleet ticking at my lit window….
Still, Naked Capitalism being a finance blog, we should remember the effects that the loss and regaining of light can have on us. From the Atlanta Fed [PDF]:
Winter Blues: A SAD Stock Market Cycle
Abstract: This paper investigates the role of seasonal affective disorder (SAD) in the seasonal time-variation of stockmarket returns. SAD is an extensively documented medical condition whereby the shortness of the days in fall and winter leads to depression for many people. Experimental research in psychology and economics indicates that depression, in turn, causes heightened risk aversion. Building on these links between the length of day, depression,and risk aversion, we provide international evidence that stock market returns vary seasonally with the length of the day, a result we call the SAD effect. Using data from numerous stock exchanges and controlling for well-known market seasonals as well as other environmental factors, stock returns are shown to be significantly related to the amount of daylight through the fall and winter. Patterns at different latitudes and in both hemispheres provide compelling evidence of a link between seasonal depression and seasonal variation in stock returns: Higher latitude markets show more pronounced SAD effects and results in the Southern Hemisphere are six months out of phase,as are the seasons. Overall, the economic magnitude of the SAD effect is large.
Remarkable that the Atlanta Fed wrote that; I thought only New Englanders like me got SAD. Let me close with a story about that may be useful to some of you. Back when I lived in Boston, I was taking the Red Line home over the Charles around 5:00 PM, in the dark, feeling tired, and cranky, and not exactly like there was an elephant’s foot on my heart, but burdened, and wondering why, why, and idly perusing a random article — no eye contact! — in Scientific American that’s so old I can’t find it online and which had a checklist for SAD symptoms, one of which was a craving for starch. And the light bulb went on: I’d just eaten a whole bag of Pepperidge Farm cookies. And I was suffering from all the other items on the checklist too! The kicker? I already knew I was prone to SAD, had known it for years. But it took a chance reading on the train to connect my own knowledge to my own experience. SAD, and its evil, monstrous cousin, depression, are indeed insidious and subtle adversaries. So take care of yourself, get plenty of light, and remember that the days are getting longer!
Oh yeah, I forgot about the whole birthday thing. But I think the pagans got this one right. Also too, full spectrum lamps, and so what about the placebo effect?