"I've not seen in my
lifetime any politician who is a heroic figure. The manipulation that all
politicians use on one level or another is so transparent."
—Dean Koontz (American,
1945—)
Word for the day
Skerrick (n)
A small piece or quantity; a
bit, e.g., Not even a skerrick of cake was left.
Malice towards none
Yesterday
I Saw a socialist MP from Uttar Pradesh, who apparently comes from a extremely
poor socio-economic background.
He
needed one person to hold his mobile phone and another one to carry his
briefcase.
I
hope someday SC will intervene to end these feudal luxuries of our elected
politicians and public servants.
First random thought this morning
In past couple of decades, I have heard umpteen number of people
clamoring for conferring of Bharat Ratna and other honors to the legendary
hockey player Major Dhyan Chand. Unfortunately, I have not seen the legend
playing on the field. I am not sure how many of those who clamor for the
maestro actually have seen him playing.
But I have seen Mohd. Shahid playing, and trust me he was no less
a master of the game. He has inspired a whole generation of hockey players. He
is struggling for his life in a Gurgaon hospital. And I have not heard anyone
praying for him.
Birdwatch - 2
Continuing from yesterday (see here) let me try
to answer the two questions that are agitating many minds.
It is critical to note that I do not claim to be any expert in
financial markets, economics or politics. I try to see things from a student's
glasses. However, being a student who does not like to cram the text books or
the notes given by his teachers, my answers are deeply influenced by my
observations and intuitions. Needless to say that I do not normally score good
marks. Regardless, I am usually happy with the results.
Now coming to the issues under consideration.
As I stated yesterday, since most of the events being feared today
are either political or have material involvement of the political
establishments across the world. Any collapse in the financial markets due to
these reasons will therefore reflect strongly on the efficacy of political
establishments of the present day. This is therefore a less likely event in the
near term (2-3years at least).
From my experience I am convinced that the politicians are the
most ingenious people around. They can think of solutions, and have the courage
to implement these, an economist or an analyst would not even dare imagine.
Helicopter money in global parlance and MNREGA in the local parlance are just a
couple of examples.
Thus, for market to collapse either of the two conditions need to
be met:
(a) The political backstop
to the markets, in the form of unlimited liquidity, is removed, thus creating a
condition of freeze (ala 2008-09) that would cause uncontrollable perspiration
at temples of traders; or
(b) The present political
establishment completely loses its credibility with people and replaced by an
alternative regime, which would essentially be an authoritative (read communist
or fascist) regime which could unstintingly write off public debt and
redistribute wealth of the rich. (also read here)
The following are some illustrative events that may cause material
volatility in the financial market and qualifying as black swan.
·
Global investors’ patience with US politicians
runs it complete course. USD declines without a proper succession plan in
place. With no fiat alternative in place, the world is forced to adopt gold
standard after a chaotic year in the global financial system and market place.
·
In their act of extreme desperation terrorists
launch a massive attack on cyberspace materially impacting the global
communication systems.
·
The imbalances in the internal economy of the US
grow beyond control leading to eruption of a civil war leading to renewed
aggression for secession by resource rich states.
·
Post couple of more large exits (France and
Italy), Germany attempts to take control of indebted smaller European nations
to safeguard his financial interest and in the process create a strategic
alliance (as opposed to mere financial) of European nations. This leads to
emergence of multiple poles in a largely unipolar world. Rise in Sino-Japan
rivalry may provide further impetus to polarization. This could eventually lead
to end of the era of peace that has existed post WWII. Given the demographic
changes since WWII, EU and Japan could be major losers in the process. China
emerges as a strong pole in the global strategic balance.
·
The recovery in commodity prices, which is
mostly a correction in prolonged bear market, collapses precipitously, pulling
the world into a recession – the deepest and worst ever.
Now coming to brass-tacks - what should I'll be doing today
morning with my investments.
Well, I am fully invested and have no intention to sell for now. I
am fully prepared to see 10-15% fall in my portfolio without panicking.
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