The Coronavirus Stock Market

I believe this photo best summarizes where we are with the Coronavirus stock market.

As they say:

Don’t count your chicken before they hatch.

This market has gotten way ahead of itself and the pending economic realities of the Coronavirus and the consequences of the trillions of response fund debt. 

Remember:

– The virus does not yet have a vaccine, and it is mutating and may become even more virulent!

– The deaths continue to soar in the U.S. with now over 75,000 dead in just two months.

– The deaths involve much pain and suffering both for the victim and his/her grieving loved ones. 

– The unemployment is at all time highs since the Great Depression. 

– Companies are starting to move from temporary layoffs to permanent firings and contraction, and many eventually to bankruptcy. 

– Profitability and gross domestic product are way down and may be even worse in the next quarter.

– Price Earning ratios are around their 10-year highs even looking out toward a possible 2021 recovery. 

– Restarting the economy does not mean a return to what was as the extreme trauma from the pandemic, shutdown, and social distancing rebalance us to a “new normal.”

– A second and third wave of Coronavirus may be as bad or even worse than the first. 

– The two biggest global economies of the U.S. and China are facing a deteriorating and toxic relationship.

– The lingering $3,000,000,000,000 that we just added to our National Debt is going to increasingly strangle our future economic outlook. 

– The election is in November and brings increasing instability and likely volatility. 

In summary, the term used by former Fed Chairman, Alan Greenspan of “irrational exuberance” seems like a gross understatement when it comes to our current stock market.  

Get ready to see the froth come painfully off this drunken market–these eggs are about ready to crack.  😉

(Credit Photo: Andy Blumenthal)

Predicted It Right In 2017

This was such a funny photo I found of me from 2017.

Holding a book called The End of The F*cking World.

Little did we know back then Coronavirus was coming our way.

One thing that is amazing to me is the incredible lack of responsibility when it comes to our fiscal (tax rates and spending) and monetary policy (interest rates and money supply). 

For example, we’ve spent almost $3,000,000,000,000 (i.e. trillion) on Coronavirus Relief/Recovery. 

And there is another package in the works to borrow and spend more money. 

This on top of our already tens of trillions of dollars of national debt we already accumulated. 

The crazy thing is that this is going on globally with Europe and Japan and others borrowing and spending without any sanity as well. 

Now here is the BIG QUESTION for you all:

If everyone is borrowing and spending, who are they borrowing from???

Yep, this is called funny money! 

Because it’s not possible for everyone to be borrowing and carrying a bottom line net debt at the same time.  

The money has to come from somewhere doesn’t it?

The Federal Reserve is “injecting” trillions into the economy and their balance sheet of “loans” to us is going up towards $11 trillion dollars now.  

These injections are short term medicine that may kill the patient down the road by overdose!

Have you ever heard of a Chair of the Federal Reserve that “urges policy makers to spend more“?

Simple economics tells us that this will yield at some point an unbelievable inflation.

We are injecting or “printing” more and more money (or electronic bytes of it), and that causes the money to devalue because there is so much of it (supply side economics) with nothing but hot air backing it up (we haven’t been on the gold standard since 1971).

There is a DAY OF RECKONING coming when:

– People’s savings and wallets will devalue and money will be worth close to squat after RUNWAY INFLATION.  

– Also, what do you think will happen to the stock market and jobs too when people have only loads of valueless funny money and can’t buy anymore like they used too–can anyone say MARKET CRASH and UNEMPLOYMENT!

Folks, you heard it here first, the end of the f*cking world is coming–it’s called CONSEQUENCES, plain and simple. 😉

(Credit Photo: Dannielle Blumenthal)

Facebook Is Dead!

So folks, here is my absolutely contrarian prediction. 

Facebook Is Dead!

Who in their right mind would say something like that?

Facebook has 2 billions users! 

Well I am one of those users.

But even though I use it. 

I recognize that it is essentially useless and a waste of time. 

Yes, there are cute videos and messages and photos on there. 

But basically if you’re honest, it’s mostly a lot of garbage and time sink!

Twitter has a newsfeed purpose. 

Instagram has a photo sharing purpose. 

LinkedIn has a professional networking purpose. 

But Facebook is a glorious made-up fad!

I believe that people are getting tired of the:

– Meaningless, mind-numbing posts of what they had for breakfast today (and every other fart, literally). 

– Phony self-branding veneer as if everything is always perfect in their lives (look I’m on another vacation skydiving!)

– Virtual relationships rather than genuine friendships and real connections (I’m fiends with over 3,000 people!)

– The millions of empty slogans, political statements, and impersonal wishes to everyone for every occasion (have a really happy birthday!)

Frankly, I think that people are reaching the point of realization where they want more from the time they spend online.

– More depth of feelings

– More substance of thought

– More reality than superficiality. 

Yes, we all need some downtime too to mellow and just laugh a little, but I am fairly certain that the time people are putting into Facebook is not really meeting their true social networking needs. 

In the end, we will find out that Facebook is the epitome of the greatest fool theory–where everyone dumps their shit from the day, hoping that there is some greater fool who will superficially lopping it all up. 😉

(Source Graphic: Andy Blumenthal)

Parole By Analytics

Interesting article in the Wall Street Journal about parole boards using software to predict repeat offenders before letting someone go free.

What used to be a decision based on good behavior during time served, showing remorse to the parole board, and intuition is being augmented with “automated assessments” that include inmate interviews, age of first arrest, type of crime, and so forth.

At least 15 states have adopted “modern risk assessment methods” to determine the potential for recidivism.

Individuals are marked as higher risk if they are:

– Young–age 18-23 (and impulsive)
– Offense was drug-related
– Suspended or expelled from school
– Quit a job prior to having another one
– Single or separated
– Diagnosed with a mental disorder
– Believes that it’s not possible to overcome their past.

Surprisingly, violent criminals (rapists and murders) are actually considered lower risk those guilty of nonviolent property crimes–the thinking being the someone convicted of robbery is more likely to repeat the criminal behavior because the crime is one that “reflects planning and intent.”

Honestly, I think it is more than ridiculous that we should rank violent criminals less risky than thieves and release them because they had what is considered an “emotional outburst.”

Would you rather have some thieves back on the street or murders and rapists–rhetorical question!

But it just shows that even the best of systems that are supposed to help make better decisions–can instead be misused or abused.

This happens when there is either bad data (such as from data-entry mistakes, deceptive responses, and missing relevant information) or from poorly designed decision rules/algorithms are applied.

The Compas system is one of the main correctional software suites being used, and the company Northpointe (a unit of Volaris) themselves advise that officials should “override the system’s decisions at rates of 8% to 15%.”

While even a 1/7 error rate may be an improvement over intuition, we need to still do better, especially if that 1 person commits a violent hideous crime that hurts someone else in society, and this could’ve been prevented.

It’s certainly not easy to expect a parole board to make a decision of whether to let someone out/free in 20 minutes, but think about the impact to someone hurt or killed or to their family, if the wrong decision is made.

This is a critical governance process that needs:

– Sufficient time to make important decisions
– More investment in tools to aid the decision process
– Refinement of the rules that support release or imprisonment
– Collection of a broad base of interviews, history, and relevant data points tied to repeat behavior
– Validation of information to limit deception or error.

Aside from predicting whether someone is likely to be repeat offenders, parole boards also need to consider whether the person has been both punished in accordance with the severity of the crime and rehabilitated to lead a productive life going forward.

We need to decide people’s fates fairly for them, justly for the victims, and safely for society–systems can help, but it’s not enough to just “have faith in the computer.” 😉

(Source Photo: Andy Blumenthal)

Chicken Big And The Asteroids

The story of Chicken Little running around yelling that “The sky is falling” has become the epitome of those who “cry wolf” about the world ending–falsely worrying about and predicting catastrophic events.

However, the reverse can be true as well–where people say, “The sky is not falling,” when it really is. This is a “Chicken Big” event–where people are afraid “big time” of admitting the truth and so they hide themselves and others from it. Sort of like saying “What I don’t know can’t hurt me!”

Yesterday was just such as Chicken Big–hide your head in the sand–moment.

Asteroid DA14 passed just 17,000 miles from the Earth–less than the distance from New York to Sydney! It was 140 foot long and 143,000 tons, and possessed the destructive power 700 times that of the atomic bomb dropped on Hiroshima. According to the Wall Street Journal (13 Feb. 2013) it was able to devastate a region the size of the San Francisco Bay area.

While, thank G-d, this dangerous asteroid missed us, just a few hours earlier, a meteor about 55 feet long and 10,000 tons exploded over the Ural Mountains in Russia, with the destructive power of 33 Hiroshima-size atomic bombs injuring 1,000 people and damaging 4,000 buildings.

Of course, it is a frightening reminder of what could’ve happened had asteroid DA14 hit as well.

The Guardian reported that according to The European Space Agency “No link between the events is thought possible,” and the Wall Street Journal (15 Feb. 2013) declared that it “was just a coincidence”.

Interestingly, the Journal itself states that a meteor event such as that which exploded over Russia yesterday happens “every 100 years,” and even more, the chances of the asteroid that passed very close overhead actually hitting Earth occurs “once every 200 to 1,000 years,” with the next close pass over earth not expected again until 2046. Thus, these types of events don’t happen exactly every day, do they?

So what are the chances of these 2 events (one exploding overhead and the other a near miss) occurring simultaneously yesterday–just hours apart!

People need to know–deserve to know the truth about the dangers we face–not to cry wolf–but rather to help us as a society and civilization recognize the genuine dangers we face, so we can adequately take precautions and prepare ourselves.

Interestingly enough, the WSJ states, “We have the technology to deflect these asteroids” with spacecraft to impact into them and “gravity tractors” to change their trajectory–the one thing we need is “years of advance warning.”

Let’s acknowledge the meteor explosion yesterday in Russia and be grateful that it wasn’t over a heavily populated major urban area, where the effect could’ve been much worse, and of course the same with the near flyby of the asteroid–and resolve to invest in the monitoring, tracking, and defensive technologies to keep us safe from a future catastrophe where the sky really is falling.

Calling the two cosmic events yesterday a “coincidence” is a Chicken Big event–buck, buck, buck. 😉

(Source Photo: here with attribution to Sascha Grant)

Existential Threats–Real or Imagined

Should we worry about something that hasn’t happened to us yet?

Wired Magazine (Sept. 2012) has an interesting article called Apocalypse Not.

Its thesis is that “people freak out over end-of-the world scenarios” and they should know better because despite all the fear and predictions of catastrophe, nothing ever really happens.

It categorizes the doomsday cataclysms into 4 types:

1) Chemicals–these come form things like pesticides (like DDT), smoking, and CFCs, and result in air pollution, acid rain, ozone depletion, and climate change.

2) Disease–recent fears of pandemics were associated with bird flu, swine flu, SARS, AIDS, ebola, and mad cow disease.

3) People–we can cause our own hell through population explosion and famine and although it didn’t mention this, I would assume the brutality and wars that can wipe entire races out.

4) Resources–Peak oil theory, metals and minerals, and other resource constraints have been causes of consternation leading us to look for alternative energy sources and even recently consider mining minerals on asteroids.

The article goes so far as to poke fun at those who are concerned about these things even stating that “The one thing we’ll never run out of is imbeciles.”

Wired does acknowledge that while “over the past half-century, none of our threatened eco-pocalypses have played out as predicted. Some came partly true; some were averted by action; [and still] some were wholly chimerical.”

What the author, Matt Ridley, has missed here in his logic are a few main things:

– Smaller things add to big things–While each individual issue may not have reached the catastrophic tipping point been yet, these issues can certainly progress and even more so, in the aggregate, pose dangerous situations that we may be unable to contain. So you can choose to live with blinders on for today, but the consequences of our choices are inescapable and may only be around the next bend.

–Recognizing the future–just because things like death and final judgement haven’t happened to us yet, doesn’t mean that they aren’t in store for us in the future. This sort of reminds me of this Jewish joke that no one leaves this world alive.

– Destructive powers are multiplying–many destructive forces were traditionally local events, but are now becoming existential threats to whole civilizations. For example, how many people globally can we kill with weaponized pathogens and how many times over now are we able to destroy the world with our thermonuclear stockpile.

– Learn from the past–Apocalypses and terrible events have already befallen humankind, whether the bubonic plague in the middle ages, the destruction of the ice age, the flood in biblical times, and even more recently the Holocaust and the World Wars in the 20th century.

Unfortunately, there is no shortage of bad things that can happen to people–individuals or many people–and if we are not conscious of the things we are doing, their potential impacts, and generally act smart and ethical, then bad things can and will most-definitely happen.

Wired ends by saying that things like policy, technology, and innovation can solve the day. However, while these can surely help and we must always try our best to have a positive impact, some things are also out of our control–they are in G-d hands.

Finally, while not every event is an existential threat, some surely can be–and whether it’s the impact of an asteroid, the death toll from the next horrible plague, natural disaster, cyberwar, or weapon of mass destruction, or even possibly when aliens finally come knocking at your door, it would be awfully stupid to think that bad things can’t happen.

(Source Photo: here with attribution to tanakawho)

>World 2020

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Forbes Magazine (7 September 2010) has an interesting look ahead at the world over the next ten years.

There were some notable predictions that stood out in terms of the good, the bad, and the ugly:

• 2011: The Terrafugia flying car goes on sales for $200,000. (GOOD—roads are congested)
• 2012: Oil prices skyrocket following Israeli raid on Iranian nukes. (GOOD—nuclear non-proliferation/ BAD—oil prices) Facebook IPOs at $40 billion. (GOOD—social media still sizzling)
• 2014:Marines deploy tens of thousands of HULC3 exoskeletons—robotic suits—to soldiers in Afghanistan. Lockheed Martin suits increases strength and endurance. (GOOD—“the edge” goes to our warfighters)
• 2016: First Internet balloting for U.S. President with 7% of votes cast online. (GOOD—the old ballot machines are so like “yesterday”)
• 2018: Trans Euro-Asia Express—world’s fastest train arrives in Paris from Bejing, break 300 MPH record. (Good—alternative to airlines)
• 2019: U.S. Life expectancy declines for first time in a century; doctors blame 55% obesity rate. (UGLY—“meaning really bad”—national health is in serious jeopardy)
• 2020: WalMart sales pass $1 trillion…now employs 5 million worldwide. (GOOD—low prices/BAD—low paying jobs) First privately owned spacecraft lands 6 men and 2 women on moon. (GOOD—Thanks Virgin Galactic; Star Trek is a closer reality: “To boldly go…”)

Here are ten more predictions I’d like to see (from Forbes or others) in terms of what happens to:

1. World peace (e.g. Middle-east)
2. Cure for cancer (and other horrible illnesses)
3. Economy
4. Federal deficit
5. Freedom and human rights
6. Environment (including global warming)
7. Osama bin Laden (and his terrorist henchmen)
8. Everything new technology (insatiable appetite for this one!)
9. Best careers (so I can advise the youngsters)
10. Stock market (hey, wouldn’t it be great to know) 🙂