Oct 272017
 
 October 27, 2017  Posted by at 1:09 pm Finance Tagged with: , , , , , , ,
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Salvador Dalí White calm 1936

 

It’s been a while since we last heard from longtime friend of the Automatic Earth Dr. Nelson Lebo III, New Englander living in Wanganui, New Zealand. Nelson has written a fine collection of articles on this site through the years.

Of course I thought, when I first saw this piece in my mailbox, that he would have written about New Zealand’s new prime minister, Labour’s 37-year-young Jacinda Ardern, whose first action in her new job will be to prevent foreigners from buying existing homes in her country. It’ll be interesting to see how she intends to do so while remaining inside the Trans Pacific Partnership -TPP- agreement.

Radio New Zealand has a portrait in which she says ‘I Want The Government … To Bring Kindness Back’. And obviously my first thought was: wait till you meet Donald Trump. But it would be misleading to put the lack of kindness in politics on his shoulders. There’s too much blood on too many hands.

But Nelson didn’t address her this time. I hope he will soon. Instead, and I should have known, he writes about Koyaanisqatsi, life out of balance. When I wrote The Koyaanisqatsi Economy a month ago, he said he had been thinking of the same theme.

Nelson named his article “Pura Vida trumps Koyaanisqatsi”, but I thought his emphasis on volatility is too important to not be the headline. Especially given that volatility in financial markets is at a -near- record low, while it appears blatantly obvious that this not reflect the ‘real world’ at all.

Nelson’s summary of the real world: “..hurricanes, mass shootings, hurricanes, opioid epidemics, hurricanes, people sleeping in cars, hurricanes, rising suicide rates, hurricanes, and children dying from cold damp homes..”

If that doesn’t spell volatility, what does? Forget about financial markets reflecting anything real anymore. Thanks to central banks, markets are fiddling while Rome burns.

Heeeeeere’s … Nelson:

 

 

Dr. Nelson Lebo III: Volatility is the new normal – that’s the message I gave a local Rotary Club when I spoke to members four or five years ago. I had been told beforehand the group was “worldly” and specifically instructed in the invitation to challenge them with my presentation. As a weekly columnist in the city’s paper – the Wanganui Chronicle – I was widely known for my positions on wealth inequality, climate change, and debt, as well as a wide range of practical approaches to address these issues.

Around that time it was clear that a post-GFC new normal was functioning worldwide and many writers were using the term. By then The Spirit Level (Pickett & Wilkinson, 2009) had been widely read and widely praised for its documentation of the relationship between wealth and income inequality and social problems. Additionally, peer reviewed research based on decades worth of data had shown there was a quantitatively measurable increase in extreme weather events: more big storms and more big droughts.

I thought my audience would be well on board.

Judging from the response that day, however, the brief I had been given was misguided and most club members were neither expecting nor wanting a presentation that challenged the dominant paradigm of infinite growth without consequences no matter how factual. As a mid-week midday meeting with New Zealand ‘fush ‘n chups’ on the menu the message that the-world-as-you-know-it-has-changed-forever was a bit heavy for people on their lunch break.

The response that day was, of course, perfectly ‘normal’. Almost no adult human seeks out new and different worldviews. On the contrary, we are far more inclined to cling to outdated ones, à la “Make America Great Again” than to acknowledge changing realities.

Social media allows us to reverberate in echo chambers of our own beliefs where we know we’re right because the echo told us so. Social science researchers have told us this for decades. The Internet just makes it worse and more obvious.

I’ve been writing about Trump, doubling-down and the post-truth world for two years now, and if anything I am more certain of the point I’ve been trying to make: most people are irrational. Seems there’s now a Nobel Laureate who has been arguing the same for decades. Behavioral economist Richard Thaler was recently awarded a Nobel for his study of the psychology of economics, which seeks to understand how we are irrational and the impact on traditional economic theories that have failed time and again (think 2008 Global Financial Crisis) because they don’t sufficiently incorporate human factors. (Remember Greenspan’s admission?)

In no way do I intend to single out the Wanganui Rotarians, but rather use this example as illustrative for what my community, nation, and the entire world face: volatility made worse by inertia. In other words, the longer we choose to ignore inconvenient truths the greater will be their negative impacts.

This situation usually manifests in the form of tipping points . Malcolm Gladwell defined a tipping point in his debut book of the same name as “the moment of critical mass, the threshold, the boiling point.” Everything looks fine with the economy and the climate…until it’s not. And by ‘not fine’ we are talking really NOT FINE à la Greece, Puerto Rico, Houston, etc.

Tipping points is volatility on steroids. Brace yourselves.

Well-informed leaders from President Obama to Pope Francis agree the greatest threats facing humanity are climate change and wealth inequality. I’ve written extensively about both for many years yet neither appears to get much traction locally or globally. Our ‘leaders’ ignore these issues at all of our peril because the result of each is increasing volatility in many forms: social, economic, financial, political, and an increasing incidence of extreme weather events.

Volatility is not good for social order, and where I live is a perfect example of the canary in the coalmine: a coastal, river city with high levels of inequality. It’s a tipping point waiting to happen.

Some readers may remember the 1982 film by Godfrey Reggio called Koyaanisqatsi, named using a Hopi term meaning “chaotic life” or “life out of balance.” The film is unnerving, as is much of what comes via news media these days: hurricanes, mass shootings, hurricanes, opioid epidemics, hurricanes, people sleeping in cars, hurricanes, rising suicide rates, hurricanes, and children dying from cold damp homes. And then there’s Myanmar: When Buddhists become the aggressors, you know the world is well and truly out of balance.

Okay, so the world is out of balance. What can be done about it?

Our solution to imbalance, as any regular reader of our blog knows, is called “Eco-Thrifty.” This approach to design and to life is about living better on less. Seems we have good company along these lines in the form of Costa Rica, the small Central American nation that regularly tops the Happy Planet Index published by the New Economics Foundation.

Despite per capita income one quarter that of New Zealand (ranked 38th of 140) and one fifth that of the US (108th of 140) Costa Rica matches many Scandinavian countries in terms of equality, wellbeing, life expectancy and ecological impact.

As Jason Hickel of the Guardian recently put it, “Costa Rica proves that rich countries could theoretically ease their consumption by half or more while maintaining or even increasing their human development indicators.”

“The opposite of growth isn’t austerity, or depression, or voluntary poverty. It is sharing what we already have, so we won’t need to plunder the earth for more.”

Sharing is at the heart of the permaculture ethics, where it is joined by caring for the environment and caring for people. Although we practice permaculture on our farm and in our community, we’re not dogmatic about it. What drives the eco-thrifty bus is resilience accompanied by regeneration.

Resilience, in this context, is the ability to withstand a pulse. It does not happen by accident. It can be designed, built and managed. Resilience only matters 0.0001% of the time, but when it matters it really matters. Resilient homes stand up to earthquakes and hurricanes. Resilient farms stand up to major rain events and extended droughts. Resilient communities withstand economic downturns and ‘natural disasters’.

Regeneration, in this context, is about getting better, stronger, more resilient over time. Regenerative farms grow food while building soil fertility, reducing erosion, storing carbon, managing storm water, and increasing biological diversity. Regenerative communities reduce crime, domestic violence, drug abuse, and suicide rates while keeping wealth and resources circulating locally. They improve quality of life while shrinking energy use, pollution and wealth inequality.

From these perspectives Costa Rica is a good, albeit imperfect, case study. It is, however, about the best example we can find and has the data to show long-term consistently high quality of life.

Pura Vida trumps Koyaanisqatsi.

 

 

Home Forums Volatility on Steroids

This topic contains 6 replies, has 7 voices, and was last updated by  John Day 2 weeks, 5 days ago.

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  • #36715

    Salvador Dalí White calm 1936   It’s been a while since we last heard from longtime friend of the Automatic Earth Dr. Nelson Lebo III, New Englan
    [See the full post at: Volatility on Steroids]

    #36717

    SteveB
    Participant

    “could theoretically”=haven’t yet while it would have been easier financially. It’ll only get harder–i.e., virtually impossible in the face of exchange belief.

    #36718

    Dr. D
    Participant

    That’s interesting. Volatility is, by markets, the lowest ever on record. Volatility for people is also low: it’s a steady, inexorable, unchanging collapse downward. No change here. Volatility elsewhere, Catalonia seceding today? Nothing in my experience could be more predictable. That’s hardly volatility when water is wet, yet I agree the world is unstable.

    It’s unbalanced, but winter is unbalanced until spring, and summer is unbalanced until fall. Then the longer cycles turn, right on schedule, 8 year, 72 year, 200 year, as expected.

    Are people really irrational? We have a name for perfectly rational people: psychopaths. They behave with perfect logic. Is someone in the way of your promotion? Ruin their reputation and get them fired. Want to sleep with someone? Lie to them. Are there too many people on earth? Kill a couple billion with well-planned, perfectly rational policies. Are profits low? Start a war. Obviously.

    It’s the “irrational” part that makes humans “human.” The part where we keep old people alive after they’re productive, keeps infants and young disabled alive and their lives better when it costs society and ourselves personally. It’s part of adding that intangible, undefinable “humanity” that drives the panoply of psychopaths at the top crazy. It’s why they hate our guts, mock us, and try to kill us every day: we’re stinking up their perfect world, the perfect vision of the Junkers, the Barosos, and Merkels, the Lenins, Che’s, and Pol Pots. They see our irrationality as “weakness”, when in fact it’s part of an innate human culture, innate human strength they can never understand, and causes them to lose to those idiotic, deplorable, mud-stained commoners time and time again.

    As they’ve probably lost again this time. No, you might want to examine this “irrationality” and what it means before you purge it from humanity. You might find it’s a highly evolved system that loses battles, but wins all wars.

    #36719

    Jef Jelten
    Participant

    Typical analysis that berates mankind for its bad behavior but can’t possibly look at what it is about industrial society that elicits such behavior. “Oh why won’t anyone listen to me when I point out their bad behavior?” BooHooo!!!!

    “…most people are irrational.” NO! most people behave irrationally and they do so because they have little to no access to the critical, accurate information they would need to act rationally, combined with the fact that they must focus ALL of their efforts to make money or else they and their loved ones suffer and die.

    Absolutely every suggestion or solution that those in the know present threatens ones potential to make money. Even those pointing out the predicaments, making the suggestions and proposing solutions are only doing so if and when they can still make money doing so. This is why eventually everyone gives up on the “DOOM” and goes back to focusing on making money.

    I know because I have been there, done that, and watched dozens of others do this. I saw it in the 60s, 70s with the conservation movement, ecology movement, Peace & Love movement.

    Until we address the issue of NO MONEY – YOU DIE! we will never be able to change human behavior for the better no matter how much or how well articulately you all point out the bad.

    Cheers!

    #36721

    Diogenes Shrugged
    Participant

    Differences in people’s thinking result directly from differences in the sources we choose to inform our mental databases. In other words, the credibility / lack of credibility of your sources determines what you think and who you are.

    Quoting from the essay, “Well-informed leaders from President Obama to Pope Francis agree the greatest threats facing humanity are climate change and wealth inequality.”

    The author has identified Obama and Francis as credible sources. By doing so, he undermines his own credibility. Everything said by Obama and Francis is agenda driven. These men never state the truth unless it happens to fit their agendas. That’s the nature of power. If you want truth, carefully sort through the alternative media on the Internet. Carefully sort through the videos on YouTube posted by ordinary people. I say “carefully” because a lot of ordinary people have adopted their favorite leaders’ agendas for themselves!

    The sources I consider credible tell me we’re headed into a long cold spell. Also, that extreme wealth inequality is an ever-present feature of mankind, not an anomaly. It’s the game, it’s always been the game, and it’s certainly no game changer. If you’re serious about identifying the causes of the problems our species is faced with, look at those who run the show. Nothing but a pack of thieving, lying power junkies who’d like nothing better than to convince you that a relatively inert 0.04% of the atmosphere is about to burn us all alive. And they’d also like nothing better than to convince you that poor people are a greater threat to your property and health than they are.

    Only a relative handful of people have figured out that the U.S. officially fell to a foreign power on 9/11. And even fewer people have figured out that the new government that arose from those ashes is attacking us now. Got that? We are ruled by a clandestine operation called the Deep State, and their war against the U.S. population is presently occurring on our own soil. This is why people calling themselves “Truthers” keep yelling at you to “wake up!”

    Again, the mainstream media sometimes tell the truth, but only when it fits their agenda:

    Quoting again from the essay, “In other words, the longer we choose to ignore inconvenient truths the greater will be their negative impacts.” The author certainly got that one right.

    #36722

    Nassim
    Participant

    Obama and Francis are the biggest liars I know of.

    #36771

    John Day
    Participant

    The main point of this article is that little bit near the end. The rest is a plea for the reader to consider it, a broad plea. We, here know Obama as a skillfully-lying puppet. Kiwis probably still like his style.
    Yes, we are manipulated by a power that distorts the “reality” we see, to lead us astray, like a manipulated GPS navigator telling the driver to turn left, turn right and go straight.
    “Eco-Thrifty”: We can all move safely in this direction. It’s a process, not a purchase.
    “Tipping points”: I think we all get that. Change in the dominant paradigm comes quickly (finally), then the degraded paradigm fails to work at all, then…
    Artificial suppression of any form of “volatility”, as we now see with financial “markets”, is a late play in the life of a financial system. How might a financial system safely allow more volatility, when the market has been lulled into perfect complacency by the elimination of all volatility, by massive VIX suppression?
    Yeah, panic > crash > reset, etc. I think our shadowy rulers/owners have long been preparing for that, but are becoming aware of other preparations, which threaten their prior preparations in this global conflict.

    “Sharing is at the heart of the permaculture ethics, where it is joined by caring for the environment and caring for people. Although we practice permaculture on our farm and in our community, we’re not dogmatic about it. What drives the eco-thrifty bus is resilience accompanied by regeneration.

    Resilience, in this context, is the ability to withstand a pulse. It does not happen by accident. It can be designed, built and managed. Resilience only matters 0.0001% of the time, but when it matters it really matters. Resilient homes stand up to earthquakes and hurricanes. Resilient farms stand up to major rain events and extended droughts. Resilient communities withstand economic downturns and ‘natural disasters’.

    Regeneration, in this context, is about getting better, stronger, more resilient over time. Regenerative farms grow food while building soil fertility, reducing erosion, storing carbon, managing storm water, and increasing biological diversity. Regenerative communities reduce crime, domestic violence, drug abuse, and suicide rates while keeping wealth and resources circulating locally. They improve quality of life while shrinking energy use, pollution and wealth inequality.”

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