Juggling Dynamite

Revelation this week that Robin Williams was suffering from early onset Parkinson’s disease and that this may have played a role in his decision to take his own life. For me this adds to an ongoing preoccupation with the complexity of suicide and euthanasia in all of its impacts and interpretations from tragic despair and cry for help to, in some cases, a considered choice for self-determination.

At the same time, this biographical documentary on Stephen Hawking’s remarkable life offers a look at one man’s fight to exist and continue working in the face of unimaginable physical adversity.

Hawking is the extraordinary story of the planet’s most famous living scientist, told for the first time in his own words and by those closest to him. Made with unique access to Hawking’s private life, this is an intimate and moving journey into Stephen’s world, both past and present. An inspirational portrait of an iconic figure, Hawking relates his incredible personal journey from boyhood under-achiever, to PhD genius, to being diagnosed with Motor Neuron Disease and given just two years to live. Despite the constant threat of death, Hawking manages to make many remarkable scientific discoveries and rises to fame and super-stardom. Hawking – a remarkable man, and a remarkable movie. Here is a direct video link.

Even without all the debt hangover and excess capacity left from the credit bubble, the global economy was already slowing on demographics. Just another reason why bulls are over-estimating growth trends over the next few years.

‘Super-aged’ societies are coming and they are going to drag down economic growth.

According to research done by analysts at credit ratings agency Moody’s we need to start worrying about aging populations.

They have calculated there is going to be a dramatic increase in the number of “super-aged” countries – that is where more than one in five of the population is 65 or older.

Currently there are just three – Germany, Italy and Japan.

But by 2030 there will 34 such countries, with fewer workers to support the cost of retirees and less investment because saving rates will decline.

Between 2015 and 2030 growth in the number of people of working age is set to be only a little over half the growth seen during the previous 15 years.”   Here is a direct link to a video report.

Good historical perspective today from Eric Parnell as he dispels the notion that the bear market of 2009 was an unusual, once in a lifetime occurrence, not likely to be repeated.  Au contraire, in fact the loss cycle of 2007-2009 was actually modest in the context of previous secular bear declines.

See: A crisis less extraordinary and the following great charts, plotting the 2008 decline and duration against other secular bear declines in 2000, the 1970’s, 30’s and 20’s:

“…the only thing that has been truly extraordinary this time around has been the policy response. And this fact alone may be setting investors up for a far more challenging bear market experience the next time around.

…investors should not be lulled into complacency with the thought that the financial crisis was a once in a lifetime event that is not doomed to repeat anytime soon. For in reality, the bear market associated with the financial crisis was not only comparable at worst from a returns perspective, but it lasted only a fraction of the time that other major bear market investors had to endure.

What raises the stakes even further in the current environment is that nearly all of the policy bullets to protect against a weakening economy and sharply correcting stock markets have already been deployed even before the next bear gets started. For unlike in March 2009 when the Fed and other global central banks had the luxury of cranking up the printing presses to flood the financial system with liquidity, such is not at all likely to be the outcome the next time around, as the market may be left to sort things out on its own. This, of course, would not necessarily be a bad thing, as this is how the market cleansing process can finally play itself out in bringing us to the dawn of the next great secular bull market. But investors that are fully allocated in advance of any such day of reckoning stand the risk of sustaining meaningful losses that may not be so easily recovered the next time around.”

Indeed I would argue that the unusually quick rebound in asset prices since 2009 has been counter-productive in several key ways. First, because it has served to quickly re-establish present conditions among the top three most over-valued and dangerous environments for capital since 1929 and 2000. Second, because it has bred extreme moral hazard and over-confidence among participants, reminiscent of the ‘near-miss’ psychological phenomenon described by Malcolm Gladwell where those who were nearly wiped out in the financial crisis, but then revived on central bank bailouts, have now become less fearless and more brazen in their risk-taking. Stay-tuned, this story is not yet finished…