Forecasters and Frauds

I used to be a big reader of Martin Armstrong, the guy who predicted the last 4 big financial panics.  I was a big believer until he called for a September crash in 2016 and nothing happened.  That event was supposed to be a sovereign debt crisis.  There was enough past success with his forecasts to believe he knew something others didn’t.  But once he gave a single false prediction it was enough to dispel the illusion.  Reading Nassim Taleb was a big help too, he would just call forecasters frauds.

After all, if you aren’t independently wealthy from using your predictive skills, then you’re probably a fraud.  The confusing part was that Armstrong was a huge hedge-fund manager of incredible success, until he was thrown in jail and had much of his assets confiscated on dubious charges (holding someone in contempt of court for 7 years without trial).  So it is easy to see how I fell for him, but like I said after Sept 2016 I was done, and read him for entertainment more than anything.

In that time he has been right about a surprising number of general trends, and events I was never aware of.  He expected Brexit, he believed 2 years ago that Catalan would vote to leave Spain, and warned of rising seperatist movements all around the world.  Some of the things I hear from Silicone valley seem to point that direct too.  Peter Thiel saying that globalism is old fashioned, and that the future is in local areas.

As social media divides us more and causes us to believe more strongly in our opinions it seems logical that we would want to move to communities of the like-minded.  Technology is making such movement possible.  With decentralized power (solar), decentralized banking (cryptocoins), decentralized information/education (internet) we have the tools we need to move anywhere and do anything.

So keep an eye on separatist movements, even the ones in the US.  I feel like the US is ripe for a big catastrophe to hasten some of this change.  It’s still too early but State debt could be a domino that wakes people up to the crippling national debt we have.  It might be Puerto Rico too, as we watch first hand what happens to a society drenched in debt then take a look in the mirror.  It is bound to scare some.  States with fiscal surpluses will not be pleased to see states with terrible budgeting get a federal bailout.  Are states too big to fail?  Probably.

While I don’t subscribe to Armstrong’s predictions to the day, I do think he has a gift in that he sometimes spots things approaching that others fail to.



The Elites don’t Seem to have Elite Intelligence…

…they just think they do, and that is what makes them dangerous.

Bannon recently said in a 60 Minutes interview how after the Billy Bush tapes Trump asked all his staff what they thought he chances of winning were.  The political elite, GOP leader Priebus said Trump has two choices, drop out now or suffer the biggest election loss in history.  Bannon said he had 100% chance to win.  The media elite thought it was over, the political elite thought it was over, and every academic elite has a binder full of bar graphs, pollsters and interviews to justify their thinking it was over.  The elite were wrong.

So now I’m watching this documentary about the 2007 crash and have determined we should still be angry about this bullshit cronyism and socialism for the elites.  One interview in this documentary said the banks came to the president and said, we need 1 trillion dollars today, or there will be an economic explosion in the US in a day,  in less than a month the whole world and social unrest will soon follow.  Personally I don’t see why social unrest would follow the banks going belly up.  Depositors are insured by the government, citizens would get their money.  Their pensions would get blown up, the investment banks would get blown up, and the economy would come to a crawl under the economic fear (that happened anyway…so lot of good that did).

On the other hand, maybe economic explosion is good, maybe we benefit greatly from destruction because it makes us stronger and lays bare our weaknesses so that we can improve on them.  Maybe the elites that give the President advice on important issues have no fucking clue, just like the rest of us.  Maybe the elites are operating under the principles of self interest, just like the rest of us.  Maybe they should be subject to the risks they took, just like the rest of us.

The most disappointing thing to me from the 2007 fiasco is the political movements that emerged from them had so much promise.  I supported “occupy wallstreet” in the sense that they were upset about giving money to the banks, I supported the “tea party” for wanting less government spending.  The two groups were never able to find common ground and I’d like to think that in another reality we did, and we became a more united nation.

Now we sit here fighting intensely with each other while the elites continue to pilfer the American people.  It’s is simply not sustainable.  Taking advice from elites who have no skin in the game is a recipe for long term ruin.

The Left Has the Impression that you can Pacify anyone/anything

It hit me when Jennifer Lawrence was saying that we are facing hurricanes because we didn’t listen to mother nature.  As if mother nature is something you can pacify into being harmless by excreting a little less CO2.

Apply the same logic to radical Islam.  The left is under the impression that you can unradicalize people by being nice to them, letting them in your country and giving them money.  Meanwhile hidden camera footage shows an Islamic school in the UK where the instructor teaches about throwing gays off the highest place (in their book), stoning adulterers (in their book) and killing apostates (in their book).  You can’t pacify such a violent ideology by rolling over and showing it your stomach.

But I take it back.  They don’t believe you can pacify a Trump supporter or a conservative.


We are Creatures of Burden

———–Hardship Rant—————–

I started connecting some dots between several topics recently that connect things like hurricanes, opiod epidemic, and philosophy.  I am of the opinion that our society has gone soft.  We have lost what it truly means to endure hardship, and it is not exclusive to the US, the world has gone soft.  Human are not well adapted for soft lifestyles, look at the death rates from obesity, diabetes, cancer or the people that drown in addiction to drugs, fantasy (games/porn/TV), or “news”.

Men need to carry a burden in life.  It makes us stronger, it forces us to improve, and without it we die.  Why else are so many men spending money to spend time in places like a gym, where they burden themselves physically to strengthen themselves physically.  Carrying burdens are the entire point of our existence, so it should come as no surprise when someone wins the lottery and their burdens are lifted that their life goes to shit in no time flat.  The rock stars and celebrities, that rapidly go from a nobody to a millionaire often to turn drugs, or have mental breakdowns.  However the stars that maintain a burden on themselves and take responsibility for their own success, (launching a new clothing line, or staying as CEO of their company) always seem to turn out well.

Which is why our society worries me a bit.  People seem to no longer want to accept responsibility, or take on a burdens, or endure pain that is necessary for living.  On NPR there was a story about how dentists are the number one prescriber of pain medications, junkies know it and abuse the system to get the opiods they crave.  It’s a problem, but the real problem is the society that builds “pain management clinics” and tells people they should never feel pain, or never feel sad (depression), or never feel hyperactive (ADHD).  It’s as if we are trying to smooth out all the little ripples that make life unique and replace it with uniform sameness.  Back to the pain killer, we have dentists supplying prescriptions for 20 days of opiods for sore teeth, and we have junkies that never get their teeth fixed so they can keep coming back for opiods.

Our incentive structures are completely wrong, and this has been a fundamental problem in our society and it is already bringing about harm, and I’m certain will bring more.

Which brings me to hurricanes.  People are under a mistaken impression that the government is responsible for bailing you out if you live in a flood plane.  That FEMA is required to come rescue your dumb ass that didn’t evacuate.  That your pets deserve a seat on an airplane or evacuation bus.  The reality is the world, the government and society owe you nothing, and you believe otherwise at your own peril.

The more hardships the government absorb and protect you from the worse off you will be.  By protecting you from your mistakes, the government prevents you from learning from your mistakes.  It creates a level of dependence between you and government.  This weakens not just the individual, but government too as it is incrementally responsible for more and more which costs more and more.

We all grow from setbacks, criticism, hardships, disaster and tragic losses.  We should remember that and face those negative situations with a smile knowing it will lead to something better.   A rule from Anti-fragile is that the more you attack something the stronger it becomes.  So endure the attacks life throws at you, and you will grow stronger.

————Anti Fragile Rant————

Donald Trump’s rise in politics comes to mind.  So does Milo who has been fired probably 4-5 times due to things said and at Berkeley they rioted and started fires when he came to speak, but now has a NYT best seller and “fuck you money”.  Let’s apply the logic of anti-fragility to “white nationalism”.

Something that would have been a joke 3 years ago, got you laughed at, ignored and ridiculed more than anything.  Now a days you will get fired, assaulted, vandalized, boycotted for even arguing that these people have a right to speak.  I worry the critics of, let’s say “white nationalism”, have started such a powerful attack on the people who hold these ideas that they ideas will only get stronger.  The followers will only get more dedicated, and with CNN advertising for the KKK for the past 2 years, these terrible ideas will only increase in their followers.

It does not help that the left insists that we identify everyone by their race, their gender, etc. and throw people into boxes blindly stereotyping every individual in the society.  There is a college club for black students, asian students, hispanic students, but the idea of a club for white students is too much?  What do these leftists imagine white people take away from such a situation?  “That everyone is categorized by race, so I should categorize myself too.”  Then the left has created that which they hoped to eliminate.  The extreme right is a by product of the extreme left and their diversity politics that can’t see past issues like race to issues like the economy that effect us all

It’s a tragic situation.  The problem is the coalition of the left is completely unsustainable, as a group of different groups, they will eat themselves should they power increase.  We see it already where the left eats their own.  They aren’t a long term threat.  However if a white nationalism movement ever were to come about it would be very stable and they would have all the guns, which is not a fun thought to consider.

Black Swans and Currencies

In “The Black Swan” by Nassim Nicolas Taleb he talks of Black Swans, a term that encompasses things which are unseen, unpredictable, and have huge impacts.  The book covers a wide array of fallacies we humans get tricked into by our brain that simply can’t handle complex systems and it is forced to simplify.

The name Black Swan originates from a old belief (before Western discovery and habitation of Australia) that all swans are white.  You can say this as much as you would like, reinforce your observation with thousands of observations of only white swans and firmly believe it is a sound conclusion.  The problem is all it takes is a single observation to prove it wrong.  It turns out there are black swans and they live in Australia.  Absence of evidence is not evidence of absence.

Taleb later describes Black Swan events as ones that have a disproportionate impact.  You can make 1000 iterations of a phone each one more meaningless than the next, but slap a touch screen on it with an intuitive interface and you’ve created something entirely different.  Something that changes society and has an infinitely bigger impact than the previous 1000 iterations of phones.  Unfortunately, it is a folly to trying predicting black swans.  There is a reason their impact is so significant and that is partly because nobody sees them coming.

What filter can you apply to look forward in time?  There isn’t one, but you can test things for fragility to see if they are durable or not, to see if they will persist in the future.

A topic of “Anti-fragile”, does the object in question gain from volatility and stress or does it suffer harm from it?  A porcelain cup for example, we place it on the desk and apply enough small stresses to it then it will eventually break, it has no ability to recover and it is incapable of sealing up it’s cracks stronger than they were before.  Compare this to the human body, have a male pick up 40kg of weigh one week, then 45kg the next week and continue this until he is picking up 120kg.  In this case applying stress makes the man stronger, his bone density increases, his muscle mass increases, his hormones increase and he feels better as a result.  If somethings gains from volatility then it is likely to improve and survive.  If it suffers harm from volatility then it is certain to collapse on longer enough timescales.

Saudi Arabia relies heavily on the export of oil products to finance it’s government, I believe 85%+ of their exports are this category.  Currently the Kingdom is on hard times due to the decreased demand in oil and a fall in the price to a third of what it once was.  As automobiles get more efficient and drilling technologies unlock ever more quantities of oil, what happens to Saudi Arabia if the demand for oil drops 5%?  Civil unrest?  Defaults?  War? The Kingdom of Saudi Arabia is very fragile.

Next lets look at the education system in the US.  Massive student loans backed by government taxpayers that yield degrees that are questionable in their value.  What makes this system fragile?  Primo, the lenders are not exposed to the risk of defaults, the taxpayer is.  Remember the last time bankers were not exposed to their own risk, 2007-08?  Whenever downside risk is shifted to a 3rd party it is dangerous and unethical. Imagine the default rate spikes up, bailouts here we come.

Worse, imagine the value of a US education spikes down which it is currently doing.   This is much more dangerous because as you have fewer people paying into the system universities are forced to downsize.  You can see at University of Missouri after a series of Black Lives Matter protests, how buildings get shuttered, staff gets laid off and enrollment shrinks.  What follows that?  Likely further drops in enrollment, a feedback loop that results in the collapse of a school.  As universities become more and more politicized by banning speakers, racially segregating the campus, and hosting riots they run an increasing risk of destroying their university.  Administration can stop this and they likely will in most cases but the damage will be done and enrollment will fall.

Another place I see fragility is with currency.  We’ve used many forms of currency and trading before.  We’ve used it as a store of value, as a way to settle debts, pay for brides, compensation for injury, and to buy and sell things.  We’ve used shells, beads, ignots of metal, sacks of grain, vials of olive oil, coins, gold, gold backed paper, real estate backed paper, and most recently as of 50 years ago, simply paper.  We don’t buy groceries with shells anymore so that fact right there should give you a hint that maybe paper currency won’t last forever either.  So why is paper currency fragile?

Most obviously it is made from fragile materials, it can’t be duplicated, backed up or preserved.  It’s also fragile because it is centralized, only one group of people can create more of it.  That same group of people benefit from printing currency so we have conflict of interest too.  Other problems we have is our current form of currency is not convenient, banks are open when people work, they close when people finish work.  Wires and transfers can take up to 5 business days, and it costs time and money to process those transfers.  The supply of money can vary and can be inflated or deflated at will, that might sound like a good thing because you can achieve price stability, but nature doesn’t care much for stability.  Money can be tracked by banks and thus by government.  Traveling with large sums of money leaves you vulnerable to robbery, confiscation, and subject to customs and import limits.

Now we have hundreds possible thousands of forms of alternative online currencies popping up online.  Each one with different features, specialties and abilities.  Some promise anonymity, others a fixed amount of coins, some can be “mined” like gold, but all seem to share that they are easily and freely transferable.  I think these could have the potential to bring about a new shift in currency.  Let me repeat, these could BRING ABOUT a shift in currency.  I don’t think these are the new currency, but I think they will open new features that people never had access to with the money.  Free instant transfers, banking without the hassle of a bank, anonymity are all features absent from our money currently.  Like most things in life you don’t know what you’re missing until you have it.  The current iterations of online currency are not user friendly and will fail for that reason as well.

So why aren’t these new inventions of internet money the way of the future.  Because of the rules of a Black Swan, you don’t see them coming.  If you see it coming it is not a Black Swan.  Online currencies have a market cap 112 billion, thousands of companies are jumping into this space and so are regular people.  These are not the characteristics of a Black Swan, but of a bubble that is about to inflate.

My prediction going forward, online currencies get huge this year. If they survive until the end of the year their growth will force governments to intervene, demand tax information, hunt down revenue (that supports terrorist or other lame excuses).  We’ll see a small collapse in online currencies, and a lot of people will lose a lot of money.  But this is going to be akin to bit torrent where there is so many currencies that governments can’t possibly nail them all down and they’ll be forced to legitimize some, either directly or though lax enforcement.

It is possible that private industry could be the ones to legitimize the online currencies, but certainly not in the US where industry fears government so much.  The first places to legitimize will be somewhere in Asia almost certainly and they are likely to profit handsomely from doing so.




Over the past week my wife and I have been picking out blackberries from a patch of briers along our neighbors fence line.  We got a bunch and made two black berry cobblers to give to our neighbors and then froze a bunch to use in cereal and yogurt.  We used all those frozen ones and more fresh ones recently to make blackberry jam.

Blackberry jam is not hard to make, however it does require a big time commitment but it is worth it.  Gathering the berries alone takes a while and it will leave you with scraps from briers up and down your arms.  Over the past week we gathered around 24 cups of berries, which may seem like a lot, but after you smash them and remove seeds 18 cups of berries becomes about 8 cups of blackberry juice.  That 8 cups when combined with sugar and pectin yielded us about 6 jars of jam, and it is lovely.  We all agree the blackberry jam is our favorite by a long shot.  We’ve tried strawberry jam, carrot jam, and blackberry jam.

When picking the berries it is important to avoid ones that aren’t completely black, shiny, and swollen.  If you pick those they will be too sour to eat raw, but it’s nothing a bowl full of sugary cereal or cane sugar can’t fix.  The ones that are fully black, shiny, and swollen are absolutely delectable.  They are also difficult to find because once the berries reach this point they will fall off the plant with the slightest touch and the berries will remain lost under the briers forever.

Foraging for food is a topic that interests me, I think it’s a valuable skill that we (humanity) don’t want to lose.  If you ever want to get an idea of the disconnect from nature and food that is coming to the rest of the world look toward the US.  People are disconnected from their food and have no idea where it comes from.  It seems like it’s the result of a developed society that over time we neglect our bare necessities and forget how to satisfy them.  There is a lot of grandmother knowledge that risks being victims to modernity, the internet and the unlimited access of information (much of it dubious, unlike your grandmother’s 70 year old habits).

The Trifecta

Read one hour daily.

Write one hour daily.

Train one hour daily.

I’ve begun reading again, and it’s something I really enjoy.  Being able to self-learn and teach yourself seems to be the most valuable skill set one can possess.  I’ve read many of Nassim Taleb’s books on randomness, probability, and fragility and they’ve really opened my eyes to how the world works.  Even though I learn a great deal from these books it is incredibility difficult to add these tools, and ways of thinking into my daily life.  While the techniques might be difficult to apply the books have sparked an interest in classical knowledge.

Epigrams, axioms, aphorisms are able to convey valuable knowledge in a compact and brief format especially have piqued my interest as of late.  I keep a copy of Taleb’s Procrustean Bed in my bathroom and make a habit of reading a few everyday, often something will stick with me and I’ll mull it over for a few weeks.  Each one bringing a new realization with it.

The English have Mediterranean weather at random times; but they go to Spain because their free hours are deterministic & rigid

Don’t sound like great system, does it?

There are several aphorisms that hint at the dangers of efficiency as a primary objective.  The quest for more efficiency saps the fun out of hobbies and activities.  In business it often sacrifices redundancy and stability causing things to blow up.  (Remember that next time you are delayed at the airport for hours over a computer glitch) .

Another aphorism I’d like to apply to my life is that, if no heuristic, or a rule of thumb, exist on a topic, then don’t do it.  Basically, follow rules of thumb, grandmother’s advice, knowledge from the classics and other forms of knowledge that have already been tested by time to ensure that they do not cause harm.

I found the Trifecta listed at the beginning of this blog on Twitter, and I thought, “there we go, that is an easy heuristic I can apply.”  I’ve done physical training, but stopped and plan to start up again soon.  I’ve written blog posts, but also stopped with little intention of starting again, and I currently spend free time reading books/web.  Why not try all three at once?

So here I am, attempting to write my first hour and satisfy the requirements of my recently adopted Trifecta.  I’m not certain it will yield any benefits, but the harm in trying is insignificant.  I plan to keep writing and focus on topics that interest me.

Humans are Irrational

All of them including me.  Listening to a Scott Adams interview was a little uncomfortable but I keep saving links, and trying to make appeals to reason and fight the ideological fight with rationality.  But it’s pointless.  Humans aren’t rational.  The more evidence you show someone they are wrong the more they dig in behind their opinion.  It’s amazing how completely irrational we all are.  Including myself.  Like Adams says, if you think you are the only rational one and you are in a world filled with irrational people you’ll go crazy.

It’s an overwhelming.  I think I’m going to stop digging up reasons Hillary is a liar, or corrupt, or disabled.  It’s pointless.  Everyone has a little movie in their head on how they see the world, and trying to change their perspective with rational thought is just hitting your head against the wall.  My whole life I’ve spent trying to be rational and make appeals to reason, completely ignoring the emotional appeals which are actually much stronger and less well know/utilized.

I just now came to this after finishing a Adam’s interview and closing out of ~50 tabs of Chrome with either, blatant confirmed lies from the media, confirmed and suspected wrong doing of Clinton and her foundation, etc.  There is no use, after I read these articles I can still evaluate them, and take something away for myself, but I think it silly to archive them and attempt to make rational arguments with them. I feel better already.

Adams also talks about using systems and not goals.  I think he put into words what my Mom already does in practice.  It’s an excellent attitude, and I’m going to give it a try.  It’s basically brain washing and tricking yourself.

Started reading the Thomas Jefferson biography, what a character he is.  Despite owning over 600 slaves at one time, he did believe in emancipation of the slaves, and tried to get it in the declaration and other laws.  He foresaw it was an practice that would have to end eventually, however one thing he didn’t foresee was that white and black could live together after all.  His vision of emancipation put Slaves back on boats to Africa.  It’s an interesting concept to envision.