Wednesday, February 28, 2018

Musical Interlude: Deuter, “Loving Touch”

Deuter, “Loving Touch”

"A Look to the Heavens"

“Sculpted by stellar winds and radiation, a magnificent interstellar dust cloud by chance has assumed this recognizable shape. Fittingly named the Horsehead Nebula, it is some 1,500 light-years distant, embedded in the vast Orion cloud complex. 
 Click image for larger size.
About five light-years "tall", the dark cloud is cataloged as Barnard 33 and is visible only because its obscuring dust is silhouetted against the glowing red emission nebula IC 434. Stars are forming within the dark cloud. Contrasting blue reflection nebula NGC 2023, surrounding a hot, young star, is at the lower left. The gorgeous color image combines both narrowband and broadband images recorded using three different telescopes.”

Chet Raymo, “The Spare And The True”

“The Spare And The True”
by Chet Raymo

“Twice during the past few years, someone has alerted me to quotes from my Globe columns in the American Heritage Dictionary (4th ed.), illustrating the use of words. For spacefaring, the dictionary cites my reference to "spacefaring nations." For exotic, 2. Intriguingly unusual or different; excitingly strange, the dictionary cites my observation "If something can be explained simply, in a familiar way, then it is best to avoid more exotic explanations."

Now that pleases me. I contributed Ockham's Razor to the American Heritage Dictionary! One of the most useful and fruitful philosophical principles ever devised. You have seen it floating through all these years of posts like a guiding spirit. Always on the lookout for the simplest, most natural explanation. Parsimony. Economy. 

William of Ockham was a 14th-century English Franciscan friar and philosopher, from the tiny village of Ockham in Surrey (the village still lies just beyond the sprawl of metropolitan London, probably not all that different today than it was in William's time). He was educated at London and Oxford, and preached and taught across Europe. He was not the first to enunciate the principle of parsimony, but he wielded the razor to great advantage, shaving away superfluous accretions from the philosophy and theology of his time, an exercise that ultimately earned him excommunication from the Church he served- a Church that then and now seems to delight in conceptual excrescences.

Someone once quoted Shakespeare to the philosopher W. V. O. Quine: "There are more things in heaven and earth than are dreamt of in your philosophy." The remark was meant as a put-down of sorts: "Yeah, Mr. Quine, so what do you know?" To which Quine is said to have responded: "Possibly, but my concern is that there not be more things in my philosophy than are in heaven and earth."

“How Does It All End?”

“How Does It All End?”
by Bill Bonner

"Life can only be understood backwards; but it must be lived forwards."
 - Soren Kierkegaard

“‘How does this all end?’ It’s a regular subject for guesswork here at the Diary. Of course, to see what’s coming, you have to look back on what’s come before.

Fantastic vision: In 1900, a survey was done. ‘What do you see coming?’ asked the pollsters. All of those people questioned forecast better times ahead. Machines were just making their debut, but already people saw their potential.

You can see some of that optimism on display today in the Paris Metro. In the Montparnasse station is an illustration from the late 1800s of what the artist imagined for the next century. It is a fantastic vision- of flying vehicles…elevated sidewalks…incredible mechanical devices, all elaborated from the Machine Age technology as it was understood at the time. There is no sign of hydraulics, jet engines, or electrical devices, for example, just gears and pulleys…and flying machines that flapped their wings like a bird.

But when asked what lay ahead, the most remarkable opinion, at least from our point of view, was that the government would decline in size and power. Almost everyone thought so. We wouldn’t need so much government, they said. People will all be rich. Wealthy people may engage in fraud and finagling. But they don’t wait in dark alleys to bop people over the head and steal their wallets. They don’t need government pensions or government health care either. Nor do they attack their neighbors.

The great illusion: In 1909, British politician Norman Angell published a bestselling book, "The Great Illusion," in which he explained why. Wealth is no longer based on land, Angell argued. Instead, it depended on factories, finance, and delicate relationships between suppliers, manufacturers, and consumers. And as this capitalism made people better off, he said, they wouldn’t want to do anything to interfere with it. It would only make them poorer.

One of his most important readers was Viscount Esher of Britain’s Committee of Imperial Defence. Set up in 1904, its task was to research and coordinate military strategy for the empire. Esher told listeners that ‘new economic factors clearly prove the inanity of aggressive wars.’ One of the most important components of the wealth of the late 19th century was international commerce. Capitalism flourishes in times of peace, sound money, respect for property rights and free trade. It was clear that everyone benefitted. Who would want to upset that apple cart?

‘War must soon be a thing of the past,’ Escher concluded. He was wrong. In August 1914, the cart fell over anyway. The Great War began five years after Angell’s book hit the bestseller lists. On the first day of the Battle of the Somme- 100 years ago- there were more than 70,000 casualties.

By the time Americans arrived in 1917, the average soldier at the front lines had a life expectancy of only 21 days. And by the time of Armistice Day- on the 11th day of the 11th month at 11:00am of 1918- the war had killed 17 million people, wounded another 20 million and knocked off the major ruling families of continental Europe- the Hohenzollerns, the Hapsburgs, and the Romanoffs (the Bourbons and Bonapartes were already gone from France).

The age of ‘isms’: After the Great War came a 30-year spell of trouble. In keeping with the metaphor of the Machine Age, the disintegration of pre-war institutions broke the tie rods that connected civilized economies to their governments. Reparations imposed on the Weimar Republic after the war sparked hyperinflation in Germany. The US, meanwhile, enjoyed a ‘Roaring 20s’, as Europeans paid their debts- in gold- to US lenders.

But that joyride came to an end in 1929. Then the feds flooded the carburetor, in their disastrously maladroit efforts to get the motor started again- including the Smoot-Hawley Act, which restricted cross-border trade. The ‘isms’- fascism, communism, syndicalism, socialism, anarchism- issued forth, like carbon monoxide. They offered solutions!

Finally, the brittle rubber of communism (aided by modern democratic capitalism) met the mean streets of fascism in another six-year bout of government-led violence: the Second World War. By the end of this period, the West decided enough was enough. Europe settled down with bourgeois governments of various social-democrat forms. The US went back to business, with order books filled and its factories still intact.

The end of history? The ‘isms’ held firm in the Soviet Union and moved to the Orient- with further wear and tear on the machinery of warfare in Korea…and later Vietnam. Finally, in 1979, Chinese leader Deng Xiaoping announced that, although the ruling Communist Party would stay in control, the country would abandon its Marxist-Leninist-Maoist creed. China joined the world economy with its own version of state-guided capitalism. Then, 10 years later, the Soviet Union gave up even more completely…rejecting both the Communist Party and communism itself.

This was the event hailed in a silly essay by American political scientist Francis Fukuyama, ‘The End of History?’ Finally, the long battle was won. It was, wrote Fukuyama, the ‘endpoint of mankind’s ideological evolution and the universalization of western liberal democracy as the final form of human government.’"

Graphic: Salvador Dali, “The Persistence of Memory”

"The Only Absolute..."

"Never perceive anything as being inevitable or predestined. 
The only absolute is uncertainty."
- Lionel Suggs
"Humans may crave absolute certainty; they may aspire to it; they may pretend, as partisans of certain religions do, to have attained it. But the history of science- by far the most successful claim to knowledge accessible to humans- teaches that the most we can hope for is successive improvement in our understanding, learning from our mistakes, an asymptotic approach to the Universe, but with the proviso that absolute certainty will always elude us."
- Carl Sagan

X22 Report, “It Begins, The Economic Transition Is Now Being Pushed”

X22 Report, “It Begins, The Economic Transition Is Now Being Pushed”

The Daily "Near You?"

Port Moody, British Columbia, Canada. Thanks for stopping by!

"The Life You Have Left..."

 “The life you have left is a gift. Cherish it.  
Enjoy it now, to the fullest. Do what matters, now.”     
~ Leo Babauta

"The Status Quo: Life as We Know It"

"The Status Quo: Life as We Know It"
by Madisyn Taylor, The DailyOM

"Our lives can sometimes become status quo and that is ok as long as we aren't keeping it that way on purpose. When our lives are going well, and sometimes even when they aren’t, we may find ourselves feeling very attached to the status quo of our existence- life as we know it. It is a very human tendency to resist change as though it were possible to simply decide not to do it, or have it in our lives. But change will come and the status quo will go, sooner or later, with our consent or without it. We may find at the end of the day that we feel considerably more empowered when we find the courage to ally ourselves with the universal force of change, rather than working against it.

Of course, the answer is not to go about changing things at random, without regard to whether they are working or not. There is a time and place for stability and the preservation of what has been gained over time. In fact, the ability to stabilize and preserve what is serving us is part of what helps us to survive and thrive. The problem comes when we become more attached to preserving the status quo than to honoring the universal givens of growth and change. For example, if we allow a situation we are in to remain stagnant simply because we are comfortable, it may be time for us to summon up the courage to challenge the status quo.

This may be painful at times, or surprisingly liberating, and it will most likely be a little of both. Underneath the discomfort, we will probably find excitement and energy as we take the risk of unblocking the natural flow of energy in our lives. It is like dismantling a dam inside ourselves, because most of the work involves clearing our own inner obstacles so that the river of our life can flow unobstructed. Once we remove the obstacles, we can simply go with the flow, trusting the changes that follow."

Mary Oliver, "What I Have Learned So Far"

"What I Have Learned So Far"

"Meditation is old and honorable, so why should I
not sit, every morning of my life, on the hillside,
looking into the shining world? Because, properly
attended to, delight, as well as havoc, is suggestion.
Can one be passionate about the just, the
ideal, the sublime, and the holy, and yet commit
to no labor in its cause? I don't think so.

All summations have a beginning, all effect has a
story, all kindness begins with the sown seed.
Thought buds toward radiance. The gospel of
light is the crossroads of- indolence, or action.

Be ignited, or be gone."

~ Mary Oliver

Musical Interlude: 2002, “Wait For Me”

2002, “Wait For Me”

"How It Really Is"

"Anything Can Be..."

"The Reality Of Life..."

"Despite my firm convictions, I have been always a man who tries to face facts, and to accept the reality of life as new experience and new knowledge unfolds it. I have always kept an open mind, which is necessary to the flexibility that must go hand in hand with every form of intelligent search for truth."
- Malcolm X

"Cognitive Dissonance And the Human Mind"

 
"Cognitive Dissonance And the Human Mind"
by Dan Eden

"When “Robbie” the robot was told to shoot a weapon at a man in the movie Forbidden Planet, his electronic brain sparked and short-circuited. His creator had programmed him to never harm a human and so the conflicting ideas paralyzed him. Human beings often are presented with opposing thoughts also, but our brains have developed a way of resolving these conflicts through a process call cognitive dissonance. We are taught, like “Robbie,” that killing is prohibited — but what about war? And many anti-abortionists support the death penalty… conflicting behavior is all around us. So how exactly does that work?

Simply put, congitive dissonance theory states that when you have two opposing ideas (or ideologies) at the same time, you will act upon the one that causes the less distortion to your ego. According to Wikipedia: "Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously. The “ideas” or “cognitions” in question may include attitudes and beliefs, and also the awareness of one’s behavior. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by changing their attitudes, beliefs, and behaviors, or by justifying or rationalizing their attitudes, beliefs, and behaviors. Cognitive dissonance theory is one of the most influential and extensively studied theories in social psychology.

Dissonance normally occurs when a person perceives a logical inconsistency among his or her cognitions. This happens when one idea implies the opposite of another. For example, a belief in animal rights could be interpreted as inconsistent with eating meat or wearing fur. Noticing the contradiction would lead to dissonance, which could be experienced as anxiety, guilt, shame, anger, embarrassment, stress, and other negative emotional states. When people’s ideas are consistent with each other, they are in a state of harmony or consonance. If cognitions are unrelated, they are categorized as irrelevant to each other and do not lead to dissonance.

Let me give you some examples. There are lots of schemes and con-artists trying to get your money these days. Almost every day I receive dozens of e-mails from people like Abada Muzoola from Nigeria, who just happened to get my e-mail address and wants me to help him transfer 70-million dollars to my bank in return for a 10 percent commission. Wow, I could use 7-million dollars! All he needs is my bank account number and pin-code. He is even willing to transfer the total amount to my account because he trusts me so much. I continue to receive variations of this scheme every day. Why? Because they work. Somewhere in the world is a victim who will have cognitive dissonance.

On a more sophisticated scale, Bernie Madoff bilked hundreds of wealthy people out of an estimated 50-billion dollars by manipulating the same mental process (and would have continued doing so had he not bragged to his sons, who turned him in). So how is it that people are able to convince others to give them access to their funds or to willingly give them their cash? First, one more example: You’re walking down a busy street deep in your own private thoughts. All of a sudden a smiling woman jumps out of somewhere, stands in front of you, and puts a flower in your hand. “Hello dear… isn’t it a wonderful day today? I want you to have this flower!,” she says.Now you have a beautiful flower in your hand. It’s a nice gift and she seems friendly. She begins to walk with you, telling you that you have nice, kind eyes. She says she noticed right away that you were special and so wanted to meet you. You forget your previous thoughts about work, bills or your own life. Suddenly you feel good… appreciated… uplifted. Then, in the same friendly voice and bright smile, she says, “I know you are a good person and you can help me by giving me a something for the beautiful flower — right?”

What happens inside your head at that moment is cognitive dissonance. The dissonance or dis-harmony comes from two conflicting ideas or decision paths. One path tells you that you should just say “No thanks!” and keep on walking; maybe return the flower and feel insulted even if it means she will become disappointed with you. The other path tells you that she has made you feel good and has earned your friendship and a couple of bucks. She has been friendly and you don’t want to ruin the brief relationship you have formed. Heck, you should probably even give her back the flower so she can use it on the next victim. Which decision will cause the least damage to your ego?

In cognitive dissonance theory the outcome of these opposing thought paths will be the one that requires the least emotional stress. Most victims will pay up rather than feel they are being cruel or disrespectful to someone who has made them feel so good. In the case of the Nigerian philanthropist, Abada Muzoola, it is often less stressful to believe that you are the lucky “chosen” beneficiary than to believe you are one of the thousands of e-mails he has sent this offer to. Later, after their bank account has been cleaned out, most people realize that they should have known better and are puzzled by their own vulnerability. Many feel so embarassed that they don’t report the crime to the authorities.

Psychologists refer to this vulnerability as the “willful suspension of disbelief,” where one can easily see the potential manipulations and evil motives of ther perpetrator, but, because they have already made some prior committment to go along with this, it is easier to continue than to back out. The investors of Mr. Madoff knew that a 10% to 12% annual return on an investment, especially in the current bear market, was impossible. Something dishonest or illegal had to be going on. But because they had been made to work so hard to let him take their money — often begging him to please allow them to invest millions of dollars — they had made the psychological investment that “locks in” the cognitive dissonance. After that, it was more stressful to admit that this was a ponzy scheme than to just avoid worrying about it.

In Festinger and Carlsmith’s classic 1959 experiment, students were asked to perform boring and tedious tasks (e.g. turning pegs a quarter turn, over and over again). The tasks were designed to generate a strong, negative attitude. After an hour of working on the tasks, participants were asked to persuade another subject (who was actually a confederate) that the dull, boring tasks the subject had just completed were actually interesting and engaging. Some participants were paid $20 for the favor, another group was paid $1, and a control group was not asked to perform the favor. When asked to rate the boring tasks at the conclusion of the study, those in the $1 group rated them more positively than those in the $20 and control groups. This was explained by Festinger and Carlsmith as evidence for cognitive dissonance. The researchers theorized that people experienced dissonance between the conflicting cognitions, “I told someone that the task was interesting”, and “I actually found it boring.” When paid only $1, students were forced to internalize the attitude they were induced to express, because they had no other justification. Those in the $20 condition, however, had an obvious external justification for their behavior, and thus experienced less dissonance.

Are you beginning to understand how this works now? Cognitive dissonance has been used to control larger groups and populations also. In World War II there was a famous campaign where citizens were asked to donate all their old pots and pans, supposedly to be melted down to make tanks, munitions and war planes. The collection was highly effective and the psychological “investment” initiated solidarity and nationalism for the war effort. Of course, all those pots and pans ended up buried in landfills.

Here’s a modern day example: When the US invaded Afghanistan, ex-President Bush came on the television asking families to donate whatever they could to help the school children in Afghanistan who needed paper and pencils. Thousands of school kids collected coins in classrooms across the nation and sent the donations to the White House. The funds ended up being put in to some vague account that never did what it was donated to do. But the “investment” was enough to gain support for a far-away war in an obscure land for vague reasons. Sometimes, as with the tragic collapse of the World Trade towers on 9-11, the “investment” is made for us. In this way an entire nation can be made to feel that they have already sacrificed something and that they should choose the path of war over peace forgetting about the Iraqi civilian casualties — or even that Iraq was not responsible. I once belonged to an Episcopal church in New Mexico that collected oil for M-16s to send to the troops in Iraq! They also invested the church funds with Raytheon and Haliburton.

Cognitive Dissonance in Advertising and Marketing: In advertising there is a theory that a consumer may use a particular product because he or she believes the advertising for that product, which claims that the product is the most effective of its kind in the job that it does. Then the consumer may see a competitor’s advertisement that seems to prove conclusively that this competitive product is better. This creates dissonance. The consumer must now relieve the uncomfortable feeling that the dissonance brings about and will often do so by switching products. The theory acts as a double-edged sword, though, because while advertisers want to create dissonance for nonusers of their product, they do not want to create it for those who do use their product. This is why advertisers use their logos on things like NASCAR and sports arenas. They want you to become loyal to their brand. This will create distrust when you see the same product — even an apparently better product — with a different and unfamiliar brand.

Cognitive dissonance most often occurs after the purchase of an expensive item such as an automobile. A consumer who is experiencing cognitive dissonance after his or her purchase may attempt to return the product or may seek positive information about it to justify the choice. If the buyer is unable to justify the purchase, he or she will also be less likely to purchase that brand again. Advertisers of high-priced durable goods say that half of their advertising is done to reassure consumers that in purchasing their product the right choice was made.

Some good uses of cognitive dissonance: Congitive therapists use this technique to change bad behavior and decisions. The technique is called a “yes set.” Getting a patient to agree to treatment for addiction or to initiate some beneficial behavior is difficult. There is often a fundamental “batting of heads” between the patient and people trying to help. The breakthrough is achieved when the therapist purposely initiates a series of statements to which the patient can agree. After repeatedly agreeing with the therapist on a multitude of minor decisions, the patient begins to feel good and the therapist allows the patient to “invest” in this positive relationship. Then, with skill, the therapist introduces the crucial decision. “So don’t you think it’s really time for you go to rehab?” Faced with the option of agreeing or offending the therapist, the patient often continues the “yes” response. The example above is highly effective because the patient not only agrees to change the bad behavior but is immediately rewarded by the continuation of their positive self-esteem and good feeling.

Cognitive dissonance requires some skill to work
: The concept doesn’t always work. Especially if it’s poorly executed. I was once shopping for a car and, after selecting a possible make and model, found myself sitting in the little room with the salesman, haggling about the price. At one point he asked me for my driver’s license or credit card and told me it was a “gesture” so that I would trust him. At the time, I just said “No way,” and split. For many customers, this simple act would be enough to form a psychological “investment” with the dealer, who could then use this to manipulate and close the sale. It might be more difficult for the customer to demand his license or credit card and storm out of the office than to sit there and be intimidated until they signed the sales contract.

Eliminating Cognitive Dissonance: There are several key ways in which people attempt to overcome, or do away with, cognitive dissonance. One is by ignoring or eliminating the dissonant cognitions. By pretending that ice cream is not bad for me, I can have my cake and eat it too, so to speak. Ignoring the dissonant cognition allows us to do things we might otherwise view as wrong or inappropriate. Another way to overcome cognitive dissonance is to alter the importance (or lack thereof) of certain cognitions. By either deciding that ice cream is extremely good (I can’t do without it) or that losing weight isn’t that important (I look good anyway), the problem of dissonance can be lessened. If one of the dissonant cognitions outweighs the other in importance, the mind has less difficulty dealing with the dissonance — and the result means that I can eat my ice cream and not feel bad about it.

Yet another way that people react to cognitive dissonance is by adding or creating new cognitions. By creating or emphasizing new cognitions, I can overwhelm the fact that I know ice cream is bad for my weight loss. For instance, I can emphasize new cognitions such as “I exercise three times a week” or “I need calcium and dairy products” or “I had a small dinner,” etc. These new cognitions allow for the lessening of dissonance, as I now have multiple cognitions that say ice cream is okay, and only one, which says I shouldn’t eat it.

Finally, perhaps the most important way people deal with cognitive dissonance is to prevent it in the first place. If someone is presented with information that is dissonant from what they already know, the easiest way to deal with this new information is to ignore it, refuse to accept it, or simply avoid that type of information in general. Thus, a new study that says ice cream is more fattening than originally thought would be easily dealt with by ignoring it. Further, future problems can be prevented by simply avoiding that type of information — simply refusing to read studies on ice cream, health magazines, etc.

Cognitive dissonance is all around us. We live in a world full of contradictions. Children are killed in Gaza in the name of peace. Feminists wear makeup, short skirts and high heels. Conservationists like Al Gore fly around in private, fuel guzzling jets. Anti-gay Christians tap their feet in public bathroom stalls… these opposing ideologies are all resolved somehow, somewhere, deep in our human psyche with cognitive dissonance."

"Why?"

"Is there an answer to the question of why bad things happen to good people? The response would be… to forgive the world for not being perfect, to forgive God for not making a better world, to reach out to the people around us, and to go on living despite it all, no longer asking why something happened, but asking how we will respond, what we intend to do now that it has happened."
- Harold S. Kushner

"The Cab Driver Didn’t Have Shoes”

"The Cab Driver Didn’t Have Shoes”
by Bill Bonner

"Another good day for Wall Street yesterday. The Dow rose more than 300 points. And sources tell Bloomberg that the Fed is ready to accept higher levels of inflation - say, 2.5% - before it calls for battle stations. In our opinion, it will have no choice; it will have to accept far higher inflation before this is over.

Unexpected delay: But in the meantime, investors believe that all is well…and that buying the dips still pays. They have had a frisson; they know stocks can fall. But they think the game remains unchanged. The fix is in; the Fed has their backs. Little do they know the Fed is aiming for their backs…but with a knife in its hand.

We were on our way to São Paulo yesterday when we ran into trouble. Brazil requires a visa for US travellers, and our visa had unexpectedly expired. So we took advantage of the enforced delay to check out Miami. We’ve been through Miami International Airport many times; we know the airport well, but not the city. So we went out to the famous Wynwood Walls to have a look.

The yellow cab looked like any other in the long line. But when the driver got out to open the trunk, we saw he had no shoes on. In the front seat was a blanket and a roll of toilet paper, thrown over a pile of clothes. It didn’t smell good. The driver twitched and jerked. After we had gone a couple of blocks, he put down the window and spat out of it. (He must have missed the equivalent of the two-year training that Black Cab drivers get in London.) But we got to our destination.

Miami has become a centre for contemporary art. Not only are there huge murals on the exterior walls, there are also many galleries with the latest oeuvres available for display or sale.
We don’t know anything about contemporary art, and we’re not really interested in learning more, but the quality of the workmanship is unmistakable.
They are not just clever, ironic, or in-your-face, many are very expertly rendered and impressive, even to people who know nothing about the genre. Worth a visit.

A word of advice to Dear Readers: don’t stay at the Biltmore. The lobby and the food were okay, but the room was surprisingly shabby; not worth the money.

Update on the Doom Index: Now, back to the subject at hand. After the 10% correction in the stock market, is it all smooth sailing now for investors? We turned to our research department for an update on our Doom Index. You’ll recall that your editor gave up trying to call the top…after he called it about 50 times to no apparent effect. The market kept rising as if it didn’t care what he said. His intuition was plainly not up to the challenge.

So he asked his researchers for a more rigorous approach. And to that end, Joe Withrow devised a way for us to tell, not necessarily when the market would crash, but when it OUGHT to crash. We got our first Extreme Warning signal on 18 January, based on the data from the fourth quarter of 2017. Stocks peaked out eight days later and bottomed on February 8, for a 10% drop. Not bad for a first time at bat. Naturally, we asked Joe to step up to the plate again this week. What’s the Doom Index telling us now? we wanted to know.

Joe: ‘No material change yet - we are still sitting at our “Extreme Warning” level. The ISM Manufacturing Index has fallen 10% so far in 2018, indicating a sharp slowdown. And about 60% of all bond ratings changes so far in 2018 have been “downgrades.” But junk bonds have caught a bid and rebounded from their sell-off at the start of February.

The February correction spooked individual investors quite a bit - AAII bullish investor sentiment fell from 60% to 37% immediately following the correction. Bullish sentiment has since ticked back up to 45% over the past two weeks. We won’t get updated credit growth data until the end of the quarter. Credit growth has contracted in three of the last four quarters - that hasn’t happened since the end of 2008/the beginning of 2009. It’s going to get interesting…’

Getting wobbly: Yep. More excitement to come. Why? The economy and its asset prices depend on leverage. Debt has increased three to six times faster than GDP for the last 38 years. Without this debt increase, stocks and bonds wouldn’t be nearly so expensive…and many of the malls, autos, and houses you see today wouldn’t exist. But the tower of debt on which the whole economy and capital structures rest is getting wobbly.

The Wall Street Journal reports, for example, that margin debt was what made the mini-crash so dramatic. And it’s what will make the next move a hoot, too: ‘Investors have borrowed a record $642.8 billion against their portfolios, according to the Financial Industry Regulatory Authority, as they try to pocket bigger gains by ramping up their exposure to stocks.’

Yep. Margin debt. Corporate debt. Household debt. And government debt. All at record levels. And all in need of new blood, more debt, just to stay in the same place. But the new blood is coagulating. The Fed has put on a tourniquet (Dear Readers are asked to forgive the metaphors… It’s very early here in São Paulo.) The Fed is tightening. It’s promised to remove liquidity at a rate of $600 billion annually by the end of the year.

No, we don’t think the Fed will follow through. Come the next crisis, the Fed will be giving infusions with a firehose. The Fed is famous for causing financial bubbles…and then inadvertently blowing them up.”

Tuesday, February 27, 2018

Musical Interlude: Chuck Wild, Liquid Mind, “Dream Ten”

Chuck Wild, Liquid Mind, “Dream Ten” 
- http://www.youtube.com/watch?v=LQ7eSn_9uT0&feature=related

"A Look to the Heavens"

“Point your telescope toward the high flying constellation Pegasus and you can find this expanse of Milky Way stars and distant galaxies. Centered on NGC 7814, the pretty field of view would almost be covered by a full moon. NGC 7814 is sometimes called the Little Sombrero for its resemblance to the brighter more famous M104, the Sombrero Galaxy.  
 Click image for larger size.
Both Sombrero and Little Sombrero are spiral galaxies seen edge-on, and both have extensive central bulges cut by a thinner disk with dust lanes in silhouette. In fact, NGC 7814 is some 40 million light-years away and an estimated 60,000 light-years across. That actually makes the Little Sombrero about the same physical size as its better known namesake, appearing to be smaller and fainter only because it is farther away. A very faint dwarf galaxy, potentially a satellite of NGC 7814, is revealed in the deep exposure just below the Little Sombrero.”

The Poet: James Broughton, "Having Come This Far"

"Having Come This Far"

"I've been through what my through was to be,
I did what I could and couldn't.
I was never sure how I would get there.
I nourished an ardor for thresholds,
for stepping stones and for ladders,
I discovered detour and ditch.
I swam in the high tides of greed,
I built sandcastles to house my dreams.
I survived the sunburns of love.

No longer do I hunt for targets.
I've climbed all the summits I need to,
and I've eaten my share of lotus.
Now I give praise and thanks
for what could not be avoided,
and for every foolhardy choice.
I cherish my wounds and their cures,
and the sweet enervations of bliss.
My book is an open life.

I wave goodbye to the absolutes,
and send my regards to infinity.
I'd rather be blithe than correct.
Until something transcendent turns up,
I splash in my poetry puddle,
and try to keep God amused."

- James Broughton

"Centering Ourselves: Gathering Our Straying Thoughts"

"Centering Ourselves: 
Gathering Our Straying Thoughts"
by Madisyn Taylor, The DailyOM

"All too often our lives can be spread too thin and it becomes important to gather our thoughts and center ourselves to become whole again. When our thoughts are scattered in several directions at once and we are no longer conscious of what we are doing or why, it is time to center ourselves. When we center ourselves, we begin by acknowledging that we have become spread too thin and we are no longer unified inside. Our thoughts might be out of sync with our feelings, and our actions may be out of sync with both. The main signs that we need to center ourselves are scattered thoughts and a feeling of disconnection or numbness, as if we are no longer able to take anything in. In addition, we may feel unfocused and not present in our bodies. Centering ourselves is a way of coming to terms with all the different energies within us and drawing them back into ourselves.

Centering yourself means that you are working from or being aware of the core of your being in the solar plexus area of your body. At first it may not make sense, but as you progress you will understand what this feels like. We naturally know how to center ourselves when we take a deep breath, for example, before making a big announcement or doing something big. Another way to center ourselves is to sit down and engage in breath meditation. We can start by simply getting into a comfortable upright position and noticing as our breath enters and leaves our bodies. Our breath flows into our center and out from our center, and this process can serve as a template for all of our interactions in the world. In conversations, we can take what our friends are saying into the center of our beings and respond from the center. Our whole lives mirror this ebb and flow of energy that begins and ends at the center of ourselves. If we follow this ebb and flow, we are in harmony with the universe, and when we find we are out of harmony, we can always come back into balance by sitting down and observing our breath.

When we sit down to center ourselves we can imagine that we are gathering our straying thoughts and energies back into ourselves, the way a mother duck gathers her babies around her. We can also visualize ourselves casting a net and pulling all the disparate parts of ourselves back to the center of our being, creating a sense of fluid integration. From this place of centeredness, we can begin again, directing ourselves outward in a more intentional way."
Related:
Michael Sealey, 
"Guided Meditation for Detachment From Over-Thinking (Anxiety/OCD/Depression)"

"The Monstrous Thing..."

"The monstrous thing is not that men have created roses out of this dung heap, but that, for some reason or other, they should want roses. For some reason or other man looks for the miracle, and to accomplish it he will wade through blood. He will debauch himself with ideas, he will reduce himself to a shadow if for only one second of his life he can close his eyes to the hideousness of reality. Everything is endured- disgrace, humiliation, poverty, war, crime, ennui- in the belief that overnight something will occur, a miracle, which will render life tolerable. And all the while a meter is running inside and there is no hand that can reach in there and shut it off."
- Henry Miller, “Tropic of Cancer”

X22 Report, “Yes, The Purge Is Real”

X22 Report, “Yes, The Purge Is Real”
Related followup report:
X22 Report, 
“Central Bankers Admit Cryptocurrencies Are A Threat To Their Existence”

The Daily "Near You?"

Brick, New Jersey, USA. Thanks for stopping by!

“What is Courage?”

“What is Courage?”
by Dr. Joe Alton

"In the Parkland high school shooting in South Florida, just a few miles from my home, we saw the extremes of human fortitude in the persons of Coach Aaron Feis and Deputy Scot Peterson. Peterson, a trained security professional, stayed outside while a shooting was in progress in the area he was hired to defend. Feis, a man not charged with the safety of others, protected them with his body at the expense of his own life.

I have thought about the idea of courage often; my writings on disaster preparedness presuppose that a certain amount is necessary to be resilient in the face of adversity. Yet, can a person really know what they will do when faced with a decision that can cost them their life?

Some just naturally run towards the sound of gunfire, while others naturally run in the other direction. The Department of Homeland Security recommends going the other way in their “Run, Hide, Fight” triad for active shooter events. There are those, however, who will run towards danger. Many of these individuals are or were in the military, law enforcement, and fire/emergency services.

Examples might be hitting the beach on D-day, running into the World Trade Center on 9/11, or perhaps the nurse who ran into the building to help victims of the Oklahoma City bombing. In many of these instances, they knew they were in danger, but went above and beyond.

Courage takes other forms as well. If you were, for example, the first African-American student in an all-white school district during the civil rights era or the first woman cadet in a military academy, you’ll never have to prove your bravery and determination to me in any other way.

You might think courage is an inborn virtue, constant over a lifetime. I’m not sure about that. I, personally, was a fearful little boy, then became a (stupidly) fearless teenager. I eventually morphed into an average adult. Now, in my golden years, I may have more of a tendency to head towards the sound of gunfire; after all, what have I got to lose at this point? Sit me in front of a doctor telling me that I have cancer, however, and that might be a very different story.

Then there’s the fortitude it takes to re-invent yourself. I don’t consider myself to be particularly courageous. After I retired from the active practice of medicine, I was tempted to take up golf. It was something I had tried years before but was, frankly, terrible at. Instead, I decided, in the wake of Hurricane Katrina, to write a blog about preparedness. That led to writing books, podcasts, a YouTube channel, and an entirely different career all about teaching others to survive natural or man-made disasters.

It’s hard to teach courage, but you can foster motivation in people. If people are taught the importance of something, they might be more apt to defend it. Loving something deeply also gives you the motivation to be brave in its defense. I can’t think of something more important than the lives of our young people. Coach Feis realized this, and acted accordingly.

Is courage contagious? Fear certainly is. If 50 people around you drop to the floor at the sound of gunfire, you might do the same. If those same people run towards the sound of gunfire, you might, too, although it puts you at risk. You might consider this foolhardiness rather than courage (Homeland Security does), but, where a gunman is concerned, you’re more likely to stop the killing by doing something other than laying on the floor in plain sight.

Speaking of fear, courage is not the absence of it, but. rather, the overcoming of it. There is physical courage and there is moral courage. Our founding fathers were men of wealth and privilege, and it would have been very easy to support remaining a colony of England. But they realized the importance of freedom, and put their fates and fortunes on the line to bring forth a new nation.

Activism is a form of courage, but courage is not just the act of speaking up; sometimes, shutting up and listening to opposing viewpoints takes fortitude as well. If more people would sit down and listen to each other, we might come more easily to agreement on a lot of today’s controversies. This takes more courage than keeping a closed mind.

If we are to be resilient in the face of adversity, it is courage, above all other virtues, that will make it possible. If we are to survive as a society, it will be because of the fortitude and strength of our citizens to pick up the flag, so to speak, and move forward. That goes for active shooter incidents and it goes for every obstacle you face in life."

"The US Government Lost $1.2 Trillion In 2017"

"The US Government Lost $1.2 Trillion In 2017"
by Simon Black

"Earlier this month, the United States government released its annual financial report for the year 2017. This is something the government does every year, similar to how large companies like Apple, or Warren Buffett’s Berkshire Hathaway, publish their own annual reports. Unlike Berkshire and Apple, though, whose financial reports typically show strong, positive results, the US government’s financial statements are a complete horror show.

Right at the beginning of the report, the government explains that it’s “net loss” for the year was an unbelievable $1.2 TRILLION.

Read that number again.

$1.2 trillion. That’s simply staggering.

It’s larger than the size of the entire Australian economy… and constitutes a loss of more than $2.2 million per minute. This is not a conspiracy theory or irrational fantasy. This is the Treasury Secretary of the United States of America publicly announcing that the federal government lost $1.2 trillion on page ‘i’ of its annual financial report.

What’s even more alarming is that 2017 was a great year. There was no war. No recession. No epic financial crisis. In his introductory letter, in fact, the Treasury Secretary proudly stated that “[t]he country enjoyed a pick-up in [economic] growth in 2017. Unemployment is at its lowest level since February 2001, consumer and business confidence are at two-decade highs, and inflation is low and stable.”

In short, everything was awesome in 2017. Even the government’s overall revenue was a record high $3.3 trillion for the year.

Yet despite all that good news… despite all those positive developments and record revenue… they STILL managed to lose $1.2 trillion.

If the government loses $1.2 trillion in a GOOD year, how much do you think they’ll lose in a BAD year? How much will they lose when they actually do have a recession to fight? Or another war. Or a major banking crisis? More importantly, how long can something so unsustainable possibly last?

But the fun doesn’t stop here. Further in the report, the government reviews its own assets and liabilities… effectively calculating its “net worth”. It’s just like how an individual might calculate his/her own net worth– you add up the value of your assets, like your home, car, and bank account balances. Then subtract liabilities like mortgage and credit card debt. The end result is your net worth. And hopefully it’s positive.

The government’s is hopelessly negative: MINUS $20.4 trillion. (See page 55 of the report.) And that’s worse than its result from the previous year’s MINUS $19.3 trillion– meaning that the government’s net worth decreased by about 6% year over year.

To be clear, a net worth of negative $20.4 trillion means that the government added up the values of ALL of its assets. Every tank. Every aircraft carrier. Every acre of land. Every penny in the bank. And then subtracted its enormous liabilities, like the national debt. The difference is negative $20.4 trillion, i.e. the government has far MORE liabilities than it has assets. If the government were a business, it would have gone bankrupt long, long ago.

On top of that, though, the government separately calculated its long-term liabilities from Social Security and Medicare. As we frequently discuss, both Social Security and Medicare are running out of money. And according to the government’s own calculations (on page 58), the “total present value of future expenditures in excess of future revenue” for Social Security and Medicare is MINUS $49 TRILLION. Essentially this means that the two largest and most important pension and healthcare programs in the United States are insolvent by nearly $50 trillion.

Altogether, the government is in the red by almost $70 trillion. It’s remarkable that this is not front page news. There has not been a single utterance from mainstream media about the pitiful, dangerously unsustainable finances of the federal government.

I’m certainly not suggesting that the sky is falling, or that there’s some imminent disaster that will strike tomorrow morning. But any rational person needs only look to the pages of history to find dozens of examples of once dominant powers who were crippled by their excessive debts. It may take several years to feel the full impact. But it would be utterly foolish to believe that this time is different.”