Liminal spaces are understood as physical locations that are transitional in nature, somewhere between origin and destination. Their aesthetics is associated with feelings of eeriness, apprehension, and nostalgia. Now, what would be its equivalent in financial markets?
Investment Office, January 2023
Picture: Zurich airport during the government lockdown, April 2020
Liminal spaces are understood as physical locations that are transitional in nature, somewhere between origin and destination. Their aesthetics is associated with feelings of eeriness, apprehension, and nostalgia.
As examples, corridors, hallways, waiting rooms, thare are empty of life, in contradiction to their normal states where they are filled with people. As such, the experience of liminal places is not only strange and mysterious, but also sinister and uncanny.
The endless corridors of the Overlook hotel in Stanley Kubrick’s movie The Shining is one well-known visual example of such liminal places.
One can also think of critical time periods in history, such as the French soldiers on the Maginot Line, at the beginning of World War II, when months passed after France had declared war against Germany (on September 3rd 1939), and nothing happened for eight months. This intervale was known as The Phoney War (Drôle de guerre; Sitzkrieg), where the Western front remained quiet, with little actual warfare, and ended with the German invasion of France and the Low Countries on May 10th 1940.
The equivalent in financial markets could be a state of apparent equilibrium following a major rally, or a sharp correction, such as the S&P 500 in 2022, after markets have stabilized, but where investors aren’t sure whether it is a pause before a next leg downwards, an upward rally, or the start of a range bound market, oscillating without consistent direction.
This is what happened to the Japanese market after the burst of its bubble in 1990, where the Nikkei index then went on to spend two decades in a sideway pattern, before finally beginning what looked like a sustained recovery in 2012, although 35 years later it is still valued some 30% below its 1989 peak.
This is indeed a very long empty space for any investor to survive the journey!