Juggling Dynamite

The 2008 crisis was not solved, our savings and economy are still at elevated and unnecessary risk thanks to reckless and fraudulent activities in the financial system that have been enabled by our governments and paid for by taxpayers and savers everywhere. The next wave of the crisis will afford yet another chance to demand the changes needed like separating deposit-taking banks from investment sales activities, ending the sale of investor order flow to predatory high-frequency traders, and banning stock buybacks as the market manipulation that it is.   Yes we can, because not doing so is self-destructive and we cannot afford to go on like this.

Listen to this former Wall Street banker explain how the big banks can crash our economy again if we don’t break them up. pic.twitter.com/ZHXsKmg6Ut

— Bernie Sanders (@SenSanders) October 9, 2018

World markets are bright red today across the board:  commodities, emerging markets, developed markets, dividend-paying companies, REITs, tech stocks, corporate bonds, cryptocurrencies, pot stocks, most currencies relative to the US dollar, you name it–it’s pretty much all getting shellacked.

The rare exceptions are US Treasuries, Canadian government bonds and the US dollar (as mentioned) which are receiving global inflows and up or little changed on the day.

Note to portfolio owners: days like this offer yet another opportunity to review our holdings.  Check how many securities, funds, and ETFs in your portfolios are selling off altogether today.  That will tell you how drown-proofed your holdings are to the coming bear market. The things that are red today will get a lot redder as this cycle completes.

What’s more, real estate values, business, and employment incomes also tend to be positively correlated with risk markets in debt-exaggerated business and market cycles like the present one.

It is not wise to have our savings plunging along with our real estate and incomes all at once.  Rainy days are coming because they are due.  It’s not too late to move more of your savings into safer more liquid deposits.   It is not about panicking.  It’s about being proactive so that we can take advantage of the next clearance sale in asset markets when capital risk will finally be low and dividend yields high once more.  That is coming.

The latest report from the Intergovernmental Panel on Climate Change emphasizes the need for people to change their lifestyle and consumption patterns in three key areas: eating fewer animal products, transportation, and heating/cooling of our buildings.

If individuals aren’t actively making the changes needed today, we are actively making the problems worse; these are the facts thinking people must internalize. See What the new report on climate change expects from you.  Here is the report’s bottom line on food:

“Eating less meat is one of a number of mitigation strategies suggested by the IPCC to overhaul agricultural and land-use practices, including the protection of forests. The livestock sector is estimated to account for 14.5% of greenhouse gas emissions globally, more than direct emissions from the transport sector.”

The good news is that we know what to do to and can do it so long as we act now as explained by new Nobel Prize winner Paul Romer in his CBC radio interview this week:

Just hours before William Nordhaus and Paul Romer won a Nobel Prize on Monday for their work on the economics of climate change, the UN issued a dire warning about global warming.

…But Romer — whose work focuses on adapting economic theory to take better account of environmental issues and technological progress — says this crisis can easily be averted through economic policy.

The economist from New York University’s Stern School of Business spoke with As It Happens host Carol Off.

Here is a direct audio link  to part of their conversation.