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The Black Swan Just Had a Hundred Babies
The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying that presumed black swans did not exist – a saying that became reinterpreted to teach a different lesson after the first European encounter with them. The theory was developed by Nassim Nicholas Taleb starting in 2001 to explain:
- The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
- The non-computability of the probability of consequential rare events using scientific methods (owing to the very nature of small probabilities).
- The psychological biases that blind people, both individually and collectively, to uncertainty and a rare event’s massive role in historical affairs.
Taleb’s “black swan theory” refers only to unexpected events of large magnitude and consequence and their dominant role in history. [Source: Wikipedia]
Several red flags that an impending recession, following the inflation we are currently in, may be far more extreme than has been predicted, and quite possibly be something we haven’t seen in our lifetime. I’m not shouting conspiracy. I like to have a heads up so I can prepare within my abilities, and so offer the following observations that I’ve encountered:
– Our local (Florida) news station just aired a segment where a dozen new schools are in the pipeline and underway. The mass migration to Florida has overwhelmed the educational system, and the newest schools are already at 130% capacity. The segment was on construction. All the contractors say they have never encountered supply chain issues, and worker shortages, and accelerating costs all at once at this level — ever. Costs for ALL materials have doubled in one year — everything from lumber, electrical components, cement blocks, sheet rock, wiring, AC, and heating elements — basic construction materials and the backlog could be a year or so out.
– In the Florida Panhandle, a major lumber company just announced a 30-hour work week, from 60-70 hours per week. I’m not sure if the housing market is slowing, but the building industry is not.
– Anyone familiar with the World Economic Forum’s new “Build Back Better” criteria is now presenting something called ESG. This is the social credit score rating that has slipped into the newest standards for doing business in this “new world order.” It affects everyone including you, me, small and large businesses, and unless you can check off all the right social and environmental boxes, you may not get that bank loan for a mortgage or to keep your company afloat.
Environmental, social, and corporate governance (ESG) is an approach to evaluating the extent to which a corporation works on behalf of social goals that go beyond the role of a corporation to maximize profits on behalf of the corporation’s shareholders. Typically, the social goals advocated within an ESG perspective include working to achieve a certain set of environmental goals, as well as a set of goals having to do with supporting certain social movements, and a third set of goals having to do with whether the corporation is governed in a way that is consistent with the goals of the diversity, equity, and inclusion movement.A variety of governmental organizations and financial institutions have devised ways to measure the extent to which a specific corporation is aligned with ESG goals. The most prominent global movement in this regards is the adoption of the Sustainable Development Goals (SDGs) by United Nations in 2015. The term ESG was popularly used first in a 2004 report titled “Who Cares Wins”, which was a joint initiative of financial institutions at the invitation of UN. The report has been endorsed by 20 prominent institutions. [Source: Wikipedia]
Just last month, a major US company that supplies many products that we are all familiar with, wrote the following regarding the tampon shortage:
In its third-quarter fiscal year analysis for 2022, Procter & Gamble, maker of Tampax, noted it was having difficulty sourcing certain raw materials and experiencing rising shipping costs. In its “forward-looking statements” under “risks and uncertainties,” P&G included:
“(3) the ability to manage disruptions in credit markets or to our banking partners or changes to our credit rating;
(4) the ability to maintain key manufacturing and supply arrangements (including execution of supply chain optimizations and sole supplier and sole manufacturing plant arrangements) and to manage disruption of business due to various factors, including ones outside of our control, such as natural disasters, acts of war (including the Russia-Ukraine War) or terrorism or disease outbreaks;
(5) the ability to successfully manage cost fluctuations and pressures, including prices of commodities and raw materials, and costs of labor, transportation, energy, pension and healthcare …”
Edgewell Personal Care, maker of Playtex and o.b.™ tampons, has blamed its declining stocks on “extensive workforce shortages” caused by Omicron surges in late 2021 and early 2022. A question that remains unaddressed is whether farmers will actually be able to grow more, even if they want to, due to skyrocketing diesel and fertilizer costs, and uncooperative weather. Cotton-producing states such as Texas and Oklahoma are currently experiencing severe drought that has prevented planting of cotton this year.
Baby formula shortages, costs of food and fuel, no new gas, oil or diesel contracts, airlines in trouble, not only add up to a recession, but possibly another Great Depression. It’s not COVID, or the Russia-Ukraine conflict, or other manageable issues that seems to be fueling this looming Black Swan Of Unimaginable Proportions Event.
It seems to be the unfolding of The Great Reset’s goals — eliminating meat and replacing it as a source of nutrition with lab-based plant products, decimating the oil, gas, and diesel industries (whereby all supplies are delivered and most of the world population travels and heats their homes), placing unreasonable restrictions on the human population, whether by mandatory vaccines, ESG standards, accelerating costs of homes/rent while raising interest rates, and fueling political and social unrest by dividing people into groups through social media.
How many clerks do you see at Walmart or Lowes at the checkout aisles? Everything has become self-checkout, and while you are on camera, a voice thanks you for using the automated system. You will own nothing, including having a job, and be happy. The tech industry (where the WEF claims all those checkout clerks will be retrained for new jobs in the new world order) are having large layoffs. That doesn’t make sense?
https://www.youtube.com/watch?v=wSMQgELP53M
So how will people buy food, pay for healthcare, or heat their homes this winter in this Great Reset? Governments across the world seem to be on auto-pilot, like they are taking their cues to do nothing from bigger entities that no one voted for.
We’ve had wars, shortages, labor disputes, and other challenges before, but not all at once without any solid leadership to make sensible preparations, like opening pipelines, creating jobs, assisting farmers and ranchers to provide food, etc. What are you seeing in your area / job ? What are you doing to prepare?
Published in General
The Financial Crisis was a Black Swan event. Real Estate … especially US real estate and securities backed by that real estate were viewed as the ultimate safe investment. The securities were collateralised. The FNMA and FHLMC flavors were assumed to have the implicit backing of the US government. Even the dodgy private stuff played on that implicit guarantee … lots of the prospectuses touted the fact that the underlying mortgages met the standards of FNMA or FHLMC. Everybody knew that even in tough times people made their mortgage payments. And real estate never goes down in price … they’re not making any more . What could be safer … right?
For those who doubt the forces behind The Great Reset, Klaus Schwab’s two main partners who announced “The Great Reset” in July of 2020 along with Biden’s “Build Back Better” slogan are George Soros and Bill Gates. Schwab’s WEF Davos Conference every year is attended by every Woke Corporatist on the Planet. The last conference had 400 private jets come to Davos. Their reach in the Corporatist World is huge.
Talk about a Black Swan, Bill Gates and his Deep State Friends had a huge role in the development of the COVID virus with EcoHealth Alliance, the NIH and the Chinese Military in coordination with their “Bat Lady”. The precursor to COVID was developed in 2018 by the Bat Lady and the Fauci funded EcoHealth Alliance at Wuhan ( which the NIH has admitted). The First COVID attack was at the Military Olympics in Wuhan in the fall of 2019 where foreign military participants were purposely infected. There were multiple purposes for COVID ; just to name a couple- lay low the existing economic and political structures of the West to make them easier to take over and develop lockdowns and vaccines to make the populace more compliant to government authority.
That is not to say they are in control. Many of the Great Reset aligned leaders here and in Europe are behind the Ukraine War which has been an absolute disaster for them. I think they viewed Russia as a threat tp their rule because of it’s large commodity resources , and that is why Biden et al pushed the Ukraine War – to put Russia down – but it has failed. Miserably.
Worse yet, the consequences of the Ukraine War and our stupid sanctions has spawned the new Alternate G8 Economic and Political alliance ( China, Russia, Indoenesia, Mexico, Brazil, Iran, India , and Turkey)with potential of Saudi Arabia joining. They allegedly for some sources, which may be dubious, have a combined GDP 24% greater than the G7. All of them are strongly against the WEF ” Green” agenda which is the organizing purpose and raison d ‘etre of “The Great Reset”. Klaus, Soros and Gates apparently have split with Chairman Xi over the last couple years as push has come to shove as to which is really going to rule. This new G8 has a strong following around the world from countries who are fed up with the Great Reset “Green” agenda, but this new alliance is also a great threat to America and America’s role as the sole Superpower.
Another consequence of this war has been to throw Japan and Europe into devastating recessions with us not too far behind, along with creating a terrible new distribution system of energy and food that will cause much death and destruction.
Decline is never irreversible. It is a choice.
His opinion is that the demographics aren’t there to sustain our standard of living and that things will collapse before any rebuilding.
Human capital is important and the main source of wealth in the world. That’s the thing that all of the Malthusians have wrong. The more people there are, the more good ideas there are. And the West has certainly been committing suicide as fast as it can. But that still does not limit us.
The demographics and basically all debt to GDP ratios are way worse, but I’m not saying I have a big opinion about this. I listen to podcasts all of the time about this type of thing and it those are the big differences. The other thing is, the idiotic financial-ized economy.
It’s also easier to pay for robots when the cost of capital is forced so low below inflation. Higher interest rates actually favor human capital.
This is correct. I would just add that the idiots that don’t want people to procreate more W-2 slaves don’t have the slightest idea of how population growth pays for all of the excess debt that was created by bad public policy.
This is a real genius system we have come up with. lol
Gosh! And they rejected a Chick Fil A?
It depends on who’s in charge to some extent. Things were improving when Trump was in office – we had a good economy, people were getting back to work, the borders were being managed, companies were investing, we were energy independent and had enough to export, and world leaders knew he had their backs, even if he asked them to pay “their fair share”. He even warned Merkel not to go with the Russian gas and she ignored it. He did not take his cues from a written cue card, Klaus Schwab or mainstream media…….
Enter Biden – disastrous exit from Afghanistan, borders out of control, inflation, layoffs, shutting down pipelines, supply chain disaster with cargo ships lines up unable to dock and offload, mandatory vaccines resulting in millions of job losses, including military, I could go on – but some things are avoidable.
Agree – there is a conscious shift of power and control on the global stage currently underway. Even the Pope hinted as such:
“The world is at war,” Francis said. “For me, today, World War III has been declared. This is something that should give us pause for thought. What is happening to humanity that we have had three world wars in a century?”
Pope Francis added: “I am simply against reducing complexity to the distinction between good guys and bad guys without reasoning about roots and interests, which are complex.”
He continued: “The danger is that we… do not see the whole drama unfolding behind this war…”
I repeat the key point that Francis was at pains to make: “The danger is that we… do not see the whole drama that is unfolding behind this war.” MAY 2022 IN MEETING WITH THE JESUITS
Attractiveness of mechanization is strongly influenced by the ratio of cost of capital to cost of labor. If you are paying people $20/hour and can issue medium-term debt at 3.5%, then your prospective labor-saving equipment looks a lot more attractive than if you are getting people for $4/hour but have to pay 8% for equivalent debt.
There was an analysis of the relative adoption of the Spinning Jenny in England versus in France and India based on this ratio.
Followed by whining about socialism and populism.
Not only were they collateralized…they were aggregated into securities which included large numbers of mortgages from different areas of the country. There were mathematical models developed which supposedly demonstrated a low risk of default of such securities, and they were purchased by large and supposedly-sophisticated investors….Deutsche Bank bought a whole lot of them, IIRC.
The credit agencies were lying for money, too. Total racket and then society paid.
Fannie Mae and Freddie Mac meeting social goals in an asset bubble. Levered up like 50 times or something. One of the guys I follow said that Franklin Rains should be in jail. I don’t think he had any experience, either. Same with Jamie Gorelick. They all walked away with millions.
Fanny Mae was started in the depression because they had trouble getting capital spread around the country so people could buy homes. I think they also wanted to promote home ownership to head off communism, which was a real issue. Then the need for all of that went away and of course we didn’t get rid of it. They started Freddie Mac so it would have a competitor. lol
That may not be perfect, so double check it if you’re going to quote me.
I would add that the China block and the Davos block are both terrible. But China’s ambitions, though over time may be more achievable, they aren’t calling for the total restructuring of the human condition.
Comrades! Listen to the last 22 minutes about how The Committee! is going to handle its third mandate, The Biggest Asset Bubble In Human History! Forward Comrades!
https://www.theinvestorspodcast.com/episodes/what-is-money-w-lyn-alden/
Hmm. The Davos crowd, being transnational, post-state, post-ethnicity, want to bring forth a new model for human happiness, because they are ether-huffing technocrats who regard history with contempt. The Chinese model wants an ethno-nationlist definition of society that empowers the elites to achieve total compliance with the dictates of the state. Tribalism is a default of the human condition, and maaaaybe it’s one of those things that needs a little restructuring now and then to keep humans from massacring each other in large quantities.
The secrets to national survival in a complicated, threatening age–which is to say, anytime:
Be as shrewd, realistic, and deeply cynical as this man–
Be as cold-bloodedly ruthless in statecraft as this man–
And be as conniving, opportunistic, and when necessary, deceitful as this man–
[edited] Both China and Davos want to monitor and control people 24 hours a day. On the one hand China wants China to take over the world, and Davos wants world-spanning corporations who are already entrenched all over the world to take over the world.
And I also don’t get your dismissal of the Davos crowd as ether-huffing. Are you saying they are crazy and ineffectual, or just crazy but effectual?
What I’m talking about is that some people say that China is the enemy and other people say that the Davos/ WEF/ global corporatists are the enemy. I’m saying they are both enemies, but that China will eat us last whereas Davos will eat us first.
I’m not sure I can go down the 24 hour control path but this comment made me think of the Ray Dalio’s Changing World Order. Video summary here:
Ray puts forth the case that there are natural cycles of empires who gain prominence and then decline due to a common set of financial issues (paying off debts incurred during the rise by printing more money).
The folks who are attempting to maintain the U.S. supremacy (dollar based economy) are printing money causing inflation to address the debt that has occurred (Davos/WEF). Then there is the rise of the Chinese who are beginning to exert their influence across the globe. So there are two enemies, external to the system and within the system. Both have to happen for a shift in the world order.
Are you talking about that mysterious word called derivatives? https://www.investopedia.com/terms/d/derivative.asp
The very thing that caused the tech markets to tank back in the early 2000’s? Or did it lead to the 2008 crash?
But the decline is not just a cyclical decline of the US or the West. It’s a global decline. The only cyclical global civilizational declines I know of are caused by solar minimums, not by human psychological characteristics. I don’t think this decline is cyclical.
We have totally overdone this crap. Financial-ized economy. Then you get assets going up faster than GDP and all kinds of social problems.
If I can find it later, I think I’ve got a tweet of how Greenspan actually thought this was going to make the world a better place. Ayn Rand guy that wrote papers about how good gold was for the economy. That guy and LBJ are Ground Zero for all of it.
You have an interesting link here – in that the Davos crowd, i.e. the WEF modeled its goals on the Chinese system – ESG, total 24/7 surveillance both socially and electronically, and then doles out “points” if you are good (so you can travel, buy food etc.)
https://www.foxbusiness.com/economy/esg-scores-similar-china-social-credit-system-designed-to-transform-society-think-tank-director-says
It’s never too soon to go re-watch (or re-read) The Big Short. Either will keep your blood pressure up but the movie is entertaining too.
Margin Call is similar.