When Narratives Collapse


Every now and again, we reach a moment in time when the scales fall from our eyes, and reality is revealed to us. We are now at one of those moments when the stories we tell ourselves have fallen apart. The dominant narratives are failing.

Not their irresistible appeal to our deep lizard brains, but rather, their ability to lead us by telling a compelling story.

Longtime readers know this is a favorite issue of mine.1 The written word, barely a few millennia old, mattered very little for most of human history. But for the past century, the vast majority of people were illiterate; even today, a shocking percentage are innumerate. And so we developed story-telling to share information amongst ourselves, to pass down through the generations: When certain animals were around for the hunt; what poisonous snakes to avoid and mushrooms not to eat; when to plant crops, the changing of seasons, how to avoid dangerous weather, and more.

Good narratives kept you alive, and good stories were easy to remember and share. During most of human history, the stories we told ourselves were less important than the survival information they contained. Today, it is the narratives that compel people to action, rather than the importance of which deadly toxin they should avoid.

I started creating a list of the narratives which have fallen apart this year; I had to confine myself to 10 from 2022, otherwise, the list would have become too long and unwieldy to manage.

I don’t believe I need to expound on each of these 10 bullet points. I am confident that you, dear reader, understand what the prior dominant narrative was for each, why those fables failed, and the subsequent chaos that those failures created.

2022 Narrative #Fails

The Billionaire Genius

SBF, FTX & Alameda Research

Tech Dominance & the New Economy

The Fed Put

60/40 is dead

DeFi Will Replace Regulations

Russian Military Might

A Red Wave is Coming

The Inevitable Triumph of Trump/MAGA

How About Those Mets?

Following each of these failures will be a new dominant narrative, many of which will subsequently be revealed as failing, too.

Multiple lists of 10 could be easily created. As to my 10, you can quibble around the edges for any of them. Each of these was a dominant market/media/populace belief for a substantial measure of time before the story was revealed as flawed.

Time and again, reality intrudes to collapse these narratives. As the Truth is revealed, there are only so many falsehoods we can cling to rather than embrace reality as it is. We must revel in these moments when they occur, for they are infrequent and all too brief; soon after, they will be lost to our memories, which tend to fail us soon after. Once the crisis passes, we return to our previously false source of comfort.

Perhaps some of these might rise again; many of their adherents have the red-hot belief of zealotry, whether it’s politics or assets or sports. Remember, the word “Fan” is an abbreviated version of the word “Fanatic.”

Reality – aka The Truth – frequently puts us back on our heels. This is especially true when reality conflicts with our cozy narratives. The comforting lies we tell ourselves can only last so long in the face of overwhelming evidence to the contrary.

The P&L does not lie…



See also:
The Glamour Of Sam Bankman-Fried Joshua (Reformed Broker, November 16, 2022)

Why the Investing Pros Were Such Suckers for FTX (WSJ, November 18, 2022)



Six Degrees of Separation (November 14, 2022)

Unconventional Wisdom (November 9, 2022)

Misunderstanding Narratives: The Hero’s Journey (September 22, 2021)

Once Again, The Narrative Fails (March 19, 2014)

The Narrative Fails (July 19, 2013)

The Dangers of Non-Modeled Narrative Story Tellers (December 3, 2012)






1. “Narrative” as an evolutionary development is one of my personal narratives.


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