Thursday, July 29, 2021

A Life On Our Plenet - Watch It, Now!

 I have been watching Sir David Attenborough’s nature documentaries since at least 1979. His mastery of the subject in unparalleled and his eloquence unrivaled. He was never an extremist green ninja, instead he was a celebrant of our Earth’s spectacular biodiversity.  

So, when he comes up with A Life On Our Planet and very soberly says we are very close to disaster, a man-made cataclysmic extinction event, we must listen and act, now! 

Honestly, I’ve never seen a scarier presentation, precisely because it is so sober and thoughtful, avoiding all unnecessary hyperbole. The facts are scary enough. What is best, he proposes common sense solutions.

Watch it.

Tuesday, July 27, 2021

Recession Is Good

 In the 1987 movie “Wall Street”  Gordon Gecko (played by Michael Douglas) utters the line “greed is good”. It was a time of supreme greediness, indeed: buyouts, LBOs, junk bonds, Drexel, Milken… and it was all followed by the Crash of October 1987. It was the largest one day drop in stock prices, bigger even than 1929 and, despite what you may read, it was NOT technical in nature but very much the result of extreme overvaluation driven by… yup, you guessed it, greed. Just like today, may I say.. But today’s post is not about that. Instead, I’m borrowing Gecko’s infamous line not for its message but in order to paraphrase it. So, Recession Is Good. 


Yesterday I had a discussion with my niece who is a brilliant university student in Geography. We quickly came to the subject of climate change and she astonished me by saying that every time she has to look at data for her research she starts crying! She is horrified by the destruction of our Earth by humanity and the immense danger to our biosphere. 

How bad is it? It’s  really, really bad. 

From melting ice caps to methane emissions the destruction of our ecosystem is fast and accelerating. As a chemical engineer I used the example of a reaction which proceeds hundreds of times faster when a catalyst is added. 

Her summation was simpler: We are approaching the Tipping Point.

We then discussed ways to solve the problem. She suggested involving industry, ie make the necessary changes attractive, or at least palatable, to big economic players. My suggestion was that you cannot cure gangrene with aspirin, and proposed a complete upheaval of our global economic Permagrowth model. 

My solution: We need Permarecession.

Is it realistic? Definitely not, right now. We cannot turn centuries of ingrained economic dogma on its head, not without some astonishing event(s) which will stun people and force them into the necessary changes in their daily habits. Sadly, it may be too late by then… 

Anyway here are the 5 necessary R’s to get us started. Obviously, they are anathema to 99% of industry and 100% of mainstream politicians…in order of importance and effect:





Recycle (this is a sop, thus acceptable. Notice, it’s  last)

A last thought: Man’s hubris against Nature is currently at an all time high. Instead of seeing COVID as Nature’s warning we are already declaring us winners, what with vaccines and trillion$$.  We may indeed win this battle, but the war is raging and we are losing - badly.

Tuesday, July 20, 2021

It Ain’t Over Until It’s Over

Markets are getting a chilly feeling down their spine these days.  Over-confident of humanity’s victory over the viral world, they are ridiculously over-extended to a degree never seen in history, when adjusted for risk. For share valuations to make any sense at all everything must go 100% right, and right away: COVID, inflation, geopolitical tensions, all must end, now!!

Professional money managers are always cautious under normal circumstances, carefully assessing the risk-reward balance. But they are not the ones driving the market now: it’s the very young, very clueless speculators who know nothing but momentum. And when upward momentum shifts, as it always does, what will happen? 

Pros will certainly not try to catch a falling knife, so no buying from there. Will the young and the clueless jump in? Some will see a drop as a buying opportunity and jump in - this is exactly what has been happening in the last 3-6 months, with varying degrees of success:  Equities were ok, but cryptos not.

I see cryptos as the leading indicator of market mania, the canary in the mine. And the canary is very much in trouble, if not quite dead - yet.

Wednesday, July 14, 2021

And The Oscar Goes To…

 I’m willing to bet that when the dust settles the Oscar for worst performance in history as Fed Chairman will go to Mr. Jerome Powell.  One picture (snicker) tells the whole story…

 Consumer core inflation has just reached 4.5% year over year - the highest level in 30 years - while Fed Funds are stuck at 0.05% AND the Fed continues to pump some $120 billion in freshly printed dollars every month.

But, hey, it will all go away soon. Won’t it?

Monday, July 12, 2021

China Loosens, Why?

 In a surprise move, China reversed its recent monetary policy-tightening and is now geared towards loosening.  What do they know?  Apparently, a lot.  Their economic recovery is not as steep as they liked, yes, but my guess is that they see the Delta variant as a real game changer for the global economy.

The UK is in the midst of a sharp upturn in cases and so are various other European countries. Should Delta make its way to China (it will, its only a matter of time) things could turn really challenging.  And when it really hits the under-vaccinated and way overconfident US… well…. It could be ugly.

In other news, I’m on vacation mode so expect fewer and shorter posts. Later….

Thursday, July 1, 2021

A Must Read By Roubini

 By far the most cogent and well reasoned analysis of the current quandary, plus a scary prediction for stagflation leading to global depression. I hasten to add that Nouriel Roubini was 100% accurate about the Debt/Asset Bubble crash of 2006-08 (I was in good company 😜).