Posts Tagged ‘nature’

Natural Selection, Finance and Extinction

Charles makes an interesting analogy between the banking system and a parasite whose aggressive feeding on its host will eventually lead to its extinction.  - Ilene 

Natural Selection, Finance and Extinction  

Courtesy of Charles Hugh Smith Of Two Minds 

Iguana, the great herbivorous sea lizard of the Galapagos Islands. Charles Darwin's study of the fauna of the islands contributed to his theory of evolution. Wood engraving c1890.

The current U.S. financial sector has been selected to reap enormous profits off a very narrow ecology of speculation, credit, risk and leverage. That parasitic specialization makes it highly vulnerable to extinction.

One of my projects is to integrate the insights offered by the processes of natural selection into the Survival+ critique and recommendations.

This line of inquiry has led me to ask: is the current financial system as robust and resilient as its many backers claim, or beneath the hype and propaganda, is it actually acutely vulnerable to collapse?

From the point of view of selection, we would start by considering the ecology the system has evolved in, and ask how specialized the system has become--in other words, how dependent is the financial system on narrow and potentially vulnerable sources of energy?

In nature, species which go extinct often do so when they have become increasingly specialized to exploit a narrow source of sustenance. Such species evolve that specialization in order to exploit the windfall offered by a food supply that has fewer (or even no) competitors.

This lack of competition offers the species rich rewards for specializing (long beaks maximized to fit certain flowers, etc.) even as they increase the species’ vulnerability to a breakdown or collapse in the limited source of food they have been selected to exploit.

The narrower the base of food and the greater the specialization, the more vulnerable the species will be to reductions in that food source. Thus a plant disease which wipes out the specific flowers will drive the bird with a highly specialized beak to extinction unless it can adapt quickly enough to another food source, or leave that ecology for one with a new source of similar flowers.

The U.S. financial system has already exploited the standard ecologies of capital and lending. How profitable is originating and holding plain-vanilla mortgages? Not very profitable at all, compared to the vast profits generated by securitizing mortgages and writing derivatives against those bundled and tranched loans.

The U.S. financial system in effect stumbled into a new ecology of profitable windfalls that no one else had ever seen or exploited:…
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Historical PE Ratios: Marking the Tops of Economic Expansions

Historical PE Ratios: Marking the Tops of Economic Expansions (and Warning of Coming Economic Contractions)

Courtesy of Michael Clark 

Robert Schiller recently posted a chart showing the history of American interest rates in the 20th Century and the history of PE ratios in American stocks.

Note the similarity between the historical PE ratios (blue line) and our contention that financial cycles run in 36-year periods, top to top.  We don’t agree exactly with the dates of economic tops in this chart — but we’renearly in agreement.

We have American economic cycles in the Twentieth Century exhibiting tops in the following years:

TOPS

1893
1929
1965
2001

BOTTOMS

1911
1947
1983
2019

Interest rates should be lowered as we proceed toward economic bottoms and should be raised as we proceed toward economic tops.  Had we begun raising interest rates slowly as we approached 2001 then we would have avoided all this mess of this decade — and the coming decade.

We need to realize that Nature has patterns and cycles — and we need to put our human ego aside (the human desire to control nature) and work WITH these cycles, instead of against them.  

We CANNOT have perpetual economic expansion in a system that has dual movements of expansion AND contraction.  Inflation needs to be followed (each time) by deflation.  Our view that inflation is GOOD and deflation is BAD may be true for the rich in the nation but it is not true for the society as a whole. 


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Zero Hedge

Audi Will Be All Electric By 2026

Courtesy of ZeroHedge View original post here.

The death march for internal combustion engine vehicles continues...

Audi has been the latest automaker to express its intent to completely end building combustion engine vehicles, stating this week that they would stop building gas and diesel vehicles by 2026. There will also be no more hybrid vehicles from that point forward, the automaker said. 

Audi board chairman Markus Duesmann offered the deadline to company executives and labor representatives this week, according to The Drive. T...



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Phil's Favorites

A Reluctant Optimist

 

A Reluctant Optimist

Courtesy of Scott Galloway, No Mercy/No Malice@profgalloway

Optimists are overrated. With Big Tech, Covid-19, or Putin, would we have been better off listening to the optimists or the pessimists? People think it takes optimism to be an entrepreneur. Not so — in my case, it just required the self-awareness to know I didn’t have the skills to succeed in a big company. Optimism is required to be an early stage investor, however. I typically invest in later stage growth firms, as my reaction to every startup idea is “there’s NFW that will work.”

I believe pessimists make better operators. I, no joke, sit awake at night and imagine everything that ca...



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Biotech/COVID-19

Counterfeiting - the underworld threat to beating COVID-19

 

Counterfeiting – the underworld threat to beating COVID-19

Counterfeit vaccines, testing kits, and vaccine passports are undermining the global fight against COVID-19. AnaLysiSStudiO/Shutterstock

Courtesy of Mark Stevenson, Lancaster University

While the word “counterfeit” may conjure up images of fake cash and knock-off handbags, the pharmaceutical industry – and with it, the fight against COVID-19 – has been significantly affected by illicit goods.

In a major operation, Interpol recently ...



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Chart School

RTT Plus Bulletin

Courtesy of Read the Ticker

RTT Plus private blog answer these questions over the last two weeks.

Ending: 2021-06-19

- Metal stocks very bullish after gold smash
- FED taper talk vs Basel 3
- Dollar devaluatioin before end of 2021
- COVID, Vaccine insight (off topic)
- The next play for the deep sate (off topic)
- The debt loaded USA can not break these economic stats


RTT Plus membership required to review.

RTT Plus members can include chart building services if you wish. If you you do not want chart building services select 'RTT Plus' only during the membership sign up process.

Sign up now!






...

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Politics

The Ukraine Fallacies (with Victor Rud)

 

The Ukraine Fallacies (with Victor Rud)

Americans are confused about the history of Ukraine. That's just how Russia wants it.

Courtesy of Greg Olear, at PREVAIL

Greg is the author of Dirty Rubles: An Introduction to Trump/Russia 

...

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Promotions

Live Webinar with Phil on Option Strategies

 

June is TD Bank's Option Education Month, and today (Thursday, June 10) at 1 pm EST, Phil will speak with host Bryan Rogers about selling options and various option strategies that we use here at Phil's Stock World. Don't miss this event!

Click here to register for TD's live webinar with Phil.

 

...

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Digital Currencies

Crypto: Congress Dawdles as $1.7 Trillion Con-Game Goes Unregulated, Threatening Reputation of U.S. Markets

Courtesy of Pam Martens

If you want to get your hair cut outside of your home in the United States, the job has to be done by a licensed worker at a regulated business. The same thing applies to plumbers, electricians, home inspectors, real estate and insurance agents. They all require a license and are subject to regulatory scrutiny.

Likewise, commodities like corn, sugar, wheat, lumber and oil are all traded on regulated exchanges which are overseen by a federal regulator.

But, for reasons that have yet to be explained to the American people, when it comes to the $1.7 trillion cryptocurrency market – which is effectively a con-g...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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