Markets have always possessed a peculiar talent for flattery, though the form of that flattery evolves with each cycle and the present era has refined it into something unusually elegant. We are encouraged to believe not merely that we are correct but that we are early, patient and principled all at once, which is an astonishingly generous self-assessment for any system built on leverage, expectation and borrowed confidence.
There are two distinct mechanisms by which this illusion is sustained. One is old enough to have been properly named, examined and absorbed into the intellectual furniture of market thought. The other is newer, faster and more psychological and is still widely mistaken for sophistication rather than recognised for what it is, which is a failure of temporal discipline masquerading as foresight.
Galbraith gave us the first in the form of the bezzle, a term he introduced most clearly in The Great Crash of 1929, where he described it as the interval during which perceived wealth exceeds real wealth without producing discomfort because nothing has yet forced recognition of loss (https://creditwritedowns.com/2009/01/quote-of-the-day-john-kenneth-galbraith-the-bezzle.html).
The bezzle is not simply about prices being excessive, which is a phrase that explains very little, but about a collective misapprehension of wealth that persists precisely because it feels stable, respectable and deserved. During such periods balance sheets appear sound, refinancing proceeds without friction, narratives align neatly and dissent is treated less as analysis than as a lack of imagination. A concise modern definition captures this well by describing the bezzle as perceived wealth that exists only because fraud mispricing or misunderstanding has not yet been revealed (https://en.wikipedia.org/wiki/The_bezzle).
Wealth during a bezzle feels real because it behaves as though it were and behaviour is far more persuasive than arithmetic. People act richer, institutions lend more freely and risks appear smaller simply because they have not yet been realised. The danger is not optimism itself but the absence of resistance, which delays the point at which illusion and reality are required to reconcile. As several modern commentators have noted, the bezzle expands most easily in environments where rising asset prices are treated as confirmation rather than signal (https://blogs.cfainstitute.org/investor/2019/09/12/the-bezzle-and-the-central-banks/).
Temporal dissonance operates differently and far more intimately. It is not a distortion of value but a distortion of time. It emerges when markets price outcomes that may indeed occur eventually as though they are imminent, while investors justify their exposure using the language of long-term inevitability despite holding instruments, structures and liquidity promises that are inherently short-term.
You hear temporal dissonance most clearly in how positions are defended. This is a ten-year story, we are told, by people who will not tolerate a two-quarter disappointment. Near-term earnings are dismissed as irrelevant by funds that publish daily performance. Volatility is celebrated as the price of conviction right up until it demands behaviour inconsistent with self-image and stated horizon.
When the bezzle and temporal dissonance overlap markets become particularly fragile because strong narratives are capable of sustaining perceived wealth far longer than fundamentals alone would permit, while temporal dissonance keeps investors exposed well beyond the point at which prudence would normally intervene. Narrative strength matters not because it alters cash flows but because it alters tolerance for discomfort and it is discomfort rather than valuation that ultimately forces exits. This interaction has been observed repeatedly in modern asset cycles where belief systems outlast balance-sheet reality (https://carnegieendowment.org/china-financial-markets/2021/08/why-the-bezzle-matters-to-the-economy).
Artificial intelligence equities sit squarely within this overlap. There is plainly a genuine technological shift underway and denying that is merely performative scepticism, but the speed with which distant, uncertain and highly competitive future revenues have been capitalised into present valuations speaks less to sober analysis than to narrative momentum. The bezzle reveals itself in assumptions about margins, scale and market dominance that leave little room for competition or commoditisation. Temporal dissonance appears in the insistence that these are long-term holdings even as price action, sentiment and positioning remain acutely sensitive to quarterly guidance and incremental news.
Crypto assets represent a purer bezzle and a more chaotic expression of temporal dissonance. Here perceived wealth often lacks any anchor in cash flow and is sustained instead by reflexivity, scarcity narratives and a permanently deferred promise of future utility. The language is resolutely long-term while the behaviour is unmistakably speculative. When the narrative weakens perceived wealth contracts sharply, only to be reconstructed later under a revised ideological wrapper and pricing once again advances ahead of adoption. Commentators have repeatedly warned that such cycles are textbook bezzle dynamics rather than novel financial evolution (https://www.steadyhand.com/national_post/2019/12/02/beware_the_bezzle/)
Private technology markets conceal bezzles more effectively because they suppress price discovery. Infrequent marks, internal models and funding rounds that validate prior assumptions allow perceived wealth to persist without meaningful challenge. Temporal dissonance emerges when so-called patient capital depends on continuous refinancing and when disruption narratives collide with the very real liquidity constraints embedded in fund structures. The story remains intact but increasingly defensive rather than expansive.
Uranium equities provide a particularly instructive case because they sit uncomfortably between genuine structural change and aggressively front-loaded pricing. There is a credible long-term case for nuclear energy, driven by baseload requirements, decarbonisation constraints and geopolitical reshoring of fuel cycles, but the bezzle risk emerges where scarcity narratives extrapolate constrained supply into permanent pricing power without sufficient regard for demand elasticity, reactor build timelines, financing bottlenecks and political reversibility. Temporal dissonance is evident in the way decade-long nuclear investment cycles are traded through highly volatile equities expected to deliver near-term returns while being justified as strategic holdings. The result is a market that speaks fluently about the inevitability of nuclear’s resurgence yet reacts sharply to short-term inventory data, policy headlines or fund flows, revealing a mismatch between the time horizon required for the thesis to mature and the patience actually available to its holders.
Green transition assets introduce a further complication because the narrative carries moral reinforcement. Subsidies, mandates and policy commitments extend the life of perceived value even when underlying economics disappoint. Temporal dissonance is acute because urgency is priced aggressively while infrastructure, commodity supply chains and consumer behaviour evolve slowly, unevenly and at times reluctantly. The transition may well occur but the timetable embedded in prices reflects politics rather than economics.
Even sovereign debt in the developed world exhibits a subtler version of these dynamics. Here the bezzle lies in the assumption that safety itself is immutable and that duration can remain benign despite fiscal dominance, demographic pressure and political constraint. Temporal dissonance appears in the belief that sustainability concerns belong to the distant future even as refinancing cycles shorten and tolerance for adjustment weakens.
The persistent error is to treat long-term correctness as a substitute for short-term resilience. The future does not arrive on schedule and cash flows do not materialise on narrative demand. Perceived wealth has a habit of evaporating precisely when it is most widely agreed upon, most confidently defended and least questioned.
This is not cynicism. It is simply memory.
Markets change their language, their technology and their aesthetics but they remain remarkably consistent in their ability to confuse value with timing and conviction with durability. The bezzle flatters us by telling us we are richer than we are. Temporal dissonance flatters us by telling us we are more patient than our behaviour suggests.
Both are abundant today and neither should be mistaken for wisdom.
