Wake Up People; Crisis Ahoy


From this Week’s Dow Theory Letters

One thing I like to write about to counter my very bearish views about the macroeconomy and financial markets (in the next few years at least), is the fact that there are signs that the consciousness of humanity is starting to rise, as evidenced by the plethora of books on introspection, mindfulness, metaphysics and spirituality; and backed up by new developments in the sciences (like neuroscience). To me, this means that humanity’s greatest weapon – his or her MIND (and arguably a connection to God) – can be unleashed. To me, this is even more exciting than the great developments we have seen in recent years in robotics, 3D printing, biotech etc. Imagine if we create more Einstein’s and brilliant visionaries and scientists. The advances in technology and society will be phenomenal.

But I sometimes wonder whether it’s just a figment of my imagination when I constantly see people bumping into each other whilst they walk along the street reading or typing on their “dumb” phones. People are spending more time than ever in the virtual realm and in thought. People are obsessed with making a lot of noise on social media, but do they really consciously think about what they are writing. I discovered this article that suggests that the human attention span is now shorter than a goldfish at 8 seconds!


I also recently saw an amazing photo of a Chinese man in a local newspaper who was texting whilst on his motorbike, crashed and then proceeded to continue to text after he was thrown from his bike! See the photo above. You cannot make this stuff up!

So was my theory wrong? Change happens at the margin. So whilst the bulk of humanity might be walking around in a trance, I do think that small numbers are waking up and realizing that critical thinking requires space and a certain amount of silence. It cannot be done when you are continuously hooked on your computer, phone and texting everybody. They often say it’s darkest before the dawn. I think in some ways the internet age and especially the smartphone was the darkest point and we are now ready to head out of this. The next crisis might catalyze this further. But I am only basing this on anecdotal evidence, the plethora of introspective books that one can see in bookstores nowadays, and the fact that many companies across the world have given employees the opportunity to pursue things like yoga and meditation. A week or so ago I had lunch with Chade Meng who is the “Jolly Good Fellow at Google,” and author of Search Inside Yourself. He leads an emotional intelligence and meditation course at the firm which has turned out to be very popular.

Our technologies have moved on from the Industrial Revolution but the way we live and organize companies and societies has not. We need a consciousness shift. Anyway, one can only hope …

Financial Markets

The big picture globally is that the world’s financial system is very unstable now. Its an avalanche waiting to happen : the snow pack is unstable but we just don’t know which snow drop will trigger the whole thing. Valuations are expensive in major indices like the US (even Robert Schiller has got off the fence this week and admitted that markets ARE indeed expensive, and that they have only been as expensive in 1929, 2000 and 2007. And the money that Central banks has pumped in to the system has ended up in all sorts of poor investments. Fundamentally the world is awash with debt – this is the bottom line – and at some point it will all either reverse in a deathly cycle of leveraging and/or out-of-control inflation.  There are countless other triggers in addition to Greece, which could topple the system, including worsening macro economic data and other financial market events…..


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