Abridged Thoughts On Shallow Thinking

Keith, here: https://chiefio.wordpress.com/2024/05/07/w-o-o-d-6-may-2024-macron-sends-fflegion-in-russia-nuke-drills-usa-flushes-cash-down-the-drain/#comment-170696

Raised the point of divergence between most of us (and especially the technical of us) and our “leader class” who are increasingly out of touch with reality (technical, economic, physical, etc.) so make ever crappier decisions.

A little further down, Another Ian points out the Idiots In Charge are pushing for ever more centralized control in greater depth, while regular folks push for more distributed and local systems.

While pondering “Why?” (“Why? Don’t ask why. Down that path lies insanity and ruin. -E.M.S.”) I think I’ve got a clue on at least part of it.

The “Upper Crust” and especially the managerial and legal/political/lawyer class, do not put in the thousands of hours of work it takes to learn the realities of the physical world. They avoid hard sciences (like physics, chemistry, math, biology; and especially the rigors of engineering that requires integration of them all).

I personally remember watching the large cohort of my peers entering college as they self sorted into “Science” and “Humanities” – with the future managers, lawyers, and similar avoiding science and engineering classes. Opting for thumbnail explanations and heuristics to understand the world around them. (I’ve “consulted” with a lawyer on a case where they needed an explanation for an electrical fire, and I had to give him just enough insight to get the actual cause across to judge and jury without actually understanding what was really happening… He won the case but doubt he really understood why multiphase power had 2 “legs” and why having them out of Balance could overheat a transformer…)

I think this is the root of the basic problem with “leadership” today. Both Government / Political decision making and business managerial decision making.

As the total body of actual knowledge has grown exponentially, the need for ever more brief “thumbnails” and ever less accurate “narratives” grows exponentially as well; so as to keep the total mass of such “shortcuts” small enough to continue to fit in the abbreviated space in the managerial minds and political brains “in charge”.

The assumption is that as complexity increases the total information space where decisions must be made and the important information to cover such decisions, also increases proportionately; but the human brain does not. So ever more “compression” is needed to make it fit. At some point, the total compression (or simplification of the “story”) eventually causes it to be too far removed from reality to be correct.

I’d suggest that the next phase has 2 more damaging steps. First, the managerial / political class becomes ever more comfortable with just “making up a narrative / story” and using it (since that ends up being what they do all day long). This causes the question of accuracy to be dropped. They stop caring if their “story” is true, just if it works. “A lie is as good as a truth as long as people believe it” becomes the norm. “Narrative Construction” exceeds the quest for truth and validity. Then, decisions based ever more on “What I Want” rather than “What is Right” come to dominate since there is ever less (or even NO) perceptible “valid” choice. Just competing narratives that are not anchored in reality.

This pushes the “In Charge Class” into making ever more decisions based on “Fantasy Narratives That I Like” or “What makes my life easier or more wealthy”. We end up with ever increasing hubris / arrogance in our “leaders” even while they make ever worse choices and decisions based on ever less valid “stories” about the world, ever further from reality. It takes a few years to actually understand why Global Warming is a flawed fantasy, but only a couple of minutes (and far less brain time / space and information) to hear the narrative “CO2 causes heat trapping and then global warming will destroy the climate”.

Once that process is common enough, evil folks lusting after power will encourage it and use it to get the decisions they want from “Government” and “Executives”. Pfizer will push mRNA Tech that is defective as a “safe and effective vaccine that must be mandated” to politicians who can’t understand the tech but love the “saving the world” narrative of their part. At that point, we’ve reached Idiocracy.

Folks who don’t really understand what they are doing, or how it will impact the world, making decisions based on “narratives” created by the immoral for their personal gain. And none of them knowing that it is a bad thing for the rest of us. Or even caring to spend the time to find out what effect it has on anyone. But they can do it very fast and without needing to think too hard… or knowing anything much about anything technical or hard…

I think there’s a 2nd level, but that will be for another day. Institutional Decisions based on thumbnails and momentum. Like the EPA being told to “clean up air” but not knowing just what that means, so we now end up with a $Billions Administration that doesn’t want to lose their job or admit they don’t know much, deciding that normal air components (CO2, water vapor) are “pollution” that must be abated, so making up rules that can not possibly be met… Or the mandate to make cars run only on electricity in a time period that is impossible since we do not have the needed materials (copper, cobalt, lithium, etc.) AND can not possibly get them that fast. The “Narrative” said we have to do it In 7 years, and we are used to just making rules, so make it happen in 7 years and “don’t bother me with facts, math, or that painful thinking stuff”.

Or something like that… That’s my narrative and I’m sticking too it! ;-)

Posted in Economics - Trading - and Money, Global Warming General, Political Current Events, World Economics | 11 Comments

Some Thoughts On Currencies

Intro

I’ve diversified my holdings into mostly stocks & metals (gold & silver ETFs). I’ve dumped any $US Bonds and while I’d initially moved some into a couple of Foreign Exchange Funds, I moved it on fairly quickly to other things. Though it was a short term, I’d expected to see some movement, but it was mostly flat, and some were a tiny bit down. Well, I’d figured that by now some decent trends might have shown up, and maybe it was time to revisit the FX (Foreign Exchange) choices and what might make sense as an alternative to the $US.

FX Foreign Exchange

Things are significantly different from what I’d experienced a decade or two back trading FX ETF (Exchange Traded Fund) instruments. What has changed?

First off, several “old friends” are now gone. FXM was Mexican Pesos. Now it is some other stock. The Swedish Krona fund is gone. Several minor currency funds are no more. What survived? Mostly a limited number of major currencies. FXE -Euro. FXB – British Pound. FXF – Swiss Franc. FXA – Australian Dollar. FXY – Japanese Yen. FXC – Canadian Dollar. The Yen is dropping a lot relative to the rest, so something not going well in Japan. The other big change is that a LOAD of BitCoin and other “digital currency” funds now exist.

My first thought on the Bitcoin ETFs was “why”? Just to avoid dealing with a Bitcoin exchange? To put ANOTHER intermediary between you and the digital quatloos? FWIW, as the epitome of “no intrinsic value” mixed with “backed by nobody’s full faith and credit”, I do not see Bitcoin as any kind of “investment”. It MAY be useful as a trade vehicle, but there are a lot of trade vehicles like that with no intrinsic value (like, all the ones based on portfolios of options & futures…) But, OK, you can make a lot of money with short term trades so I can see when Bitcoin became trendy that the trader guys would want to trade it.

That said, look at this list of “Currency” ETFs and ask yourself if Bitcoin & related have become a fad:

https://etfdb.com/etfdb-category/currency/

Symbol  ETF Name

IBIT	IShares Bitcoin Trust Registered	
GBTC	Grayscale Bitcoin Trust	
FBTC	Fidelity Wise Origin Bitcoin Fun
ARKB	ARK 21Shares Bitcoin ETF	
BITB	Bitwise Bitcoin ETF Trust	
BITO	ProShares Bitcoin Strategy ETF
HODL	VanEck Bitcoin Trust	
BRRR	Valkyrie Bitcoin Fund	
BTCO	Invesco Galaxy Bitcoin ETF		
UUP	Invesco DB US Dollar Index Bullish Fund	
EZBC	Franklin Bitcoin ETF	
FXY	Invesco Currencyshares Japanese Yen Trust	
USDU	WisdomTree Bloomberg U.S. Dollar Bullish Fund	
FXE	Invesco CurrencyShares Euro Trust	
FXF	Invesco CurrencyShares Swiss Franc Trust
EETH	ProShares Ether Strategy ETF	
BTCW	WisdomTree Bitcoin Fund	
BITI	ProShares Short Bitcoin Strategy ETF	
FXA	Invesco CurrencyShares Australian Dollar Trust	
BTF	Valkyrie Bitcoin and Ether Strategy ETF	
UDN	Invesco DB US Dollar Index Bearish Fund	
FXC	Invesco CurrencyShares Canadian Dollar Trust	
FXB	Invesco CurrencyShares British Pound Sterling Trust	
ARKA	ARK 21Shares Active Bitcoin Futures Strategy 
AETH	Bitwise Ethereum Strategy ETF
DEFI	Hashdex Bitcoin ETF		
BTOP	Bitwise Bitcoin and Ether Equal Weight Strategy ETF
BETH	ProShares Bitcoin & Ether Market Cap Weight Strategy ETF
CEW	WisdomTree Emerging Currency Strategy Fund	
SETH	ProShares Short Ether Strategy ETF		
BETE	ProShares Bitcoin & Ether Equal Weight Strategy ETF
BITC	Bitwise Bitcoin Strategy Optimum Roll ETF

So it goes…

Do realize that ETFs are a product and that they can some and go as fast as some Broker finds a trend to ride or finds one has lost profitability for them as seller of the ETF. So short term trade vehicles, not long term investments.

FX vs oil

I’ll just mention one other thing in passing: Drawing a chart of several of the national currencies vs the $US trend vs Oil ETF: I think I noticed the impact of trading oil in $US vs North American seasonality. The $US and USO (oil) would both have demand (so price) rise when northern hemisphere countries were swapping their local currencies for $US to buy oil. Winter (heating) and some “summer vacation time” in Europe (cars, busses, planes, ships). It wasn’t a huge trend, and it looked like it had about a 1 month lag vs Oil prices, so some care in timing needed. But over the last year, it was visible. (Oil itself had more seasonal movement than the currencies, so I’d trade USO for that trend trade rather than currencies).

Would I trade that? Likely not. Better trades elsewhere, IMHO. But maybe useful for some futures spreads & hedges. Also the move of BRICS+ into non-$US (and especially Saudi Arabia taking Yuan and others in trade for oil) might well completely disrupt this one year observed trend “going forward”.

US Oil vs Currencies Baskets - 1 year daily Jun2024

US Oil vs Currencies Baskets – 1 year daily Jun2024

So, looking at this, the top line is US Oil (oil is very volatile in price). The main ticker is FXE the Euro and near / at the bottom (with SMA (Simple moving Average) lines and other indicators (PSAR). The blue line just above the bottom clutter is the Swiss Franc – FXF. Notice that it peaks at Christmas just after oil bottoms the start of the month. Similarly about the end of September oil prices peak and the Franc bottoms a week or so later in the start of October.

So is this just marking the end of Summer Vacation Season AND the seasonal buy of heating oil toward the end of Summer (before the winter cold sets in)? Then a second ramp up and drop as the winter doldrums end and Spring Driving Season begins? Maybe a big of late topping up of heating oil if one guessed too low on first filling? Then perhaps the May / June drop relates to fields having been plowed and planted, but no harvest demand yet, along with folks preparing for the end of School and the holding off for an August Vacation? It would likely help to look at other years to confirm the trends in this year. Note that there are other currencies in the pile at the bottom with similar “wobbles”, but not as extreme. Not on this chart, USDU or $US Up fund moves somewhat with USO (though more weakly) and counter to the other currencies.

Enough to be useful in trading? Maybe, but would require some work…

Semiconductors & Broad Index funds

SemiConductors vs Broad Indexs Jun2024

SemiConductors vs Broad Indexs Jun2024

Semiconductors are way outpacing everything else. A huge chunk of that being the A.I / NVIDIA fad. NASDAQ (QQQ) is being pulled up by them and riding above the other large indexes. Small Cap Companies (RUT Russel 2000) are doing the worst (orange line on the bottom) with Large Caps (DIA Dow Industrials) barely doing better. (So restaurants AND big banks both with issues…). The S&P 500 Largest US Companies doing better than Very Large or very small, but not as good as Tech that is mostly being hauled up by Semiconductors.

A LOT of money seems to be pumping up Taiwan Semi Manufacturing (TSM) at about the same rate as the SMH index (which makes me wonder why… not afraid of a China war taking them out?). While NVDA NVIDIA is on a rocket ride well above the SMH. So doing a LOT of the lifting… THE big question being who will make an effective competitor chip.

Sector Stock Movements 1 week 10June2024

Sector Stock Movements 1 week 10June2024

On this FinFiz chart, the size of the square is market cap size, the color is movement (green up / red down) in price.

We can quickly see who’s moving the markets. AVGO is Broadcom,, a semiconductor maker and network company. With TSM, NVDA, Arm Holdings (ARM), Micron (MU) all making major moves and a big part of the market. Microsoft did OK as did ASML in Europe (a maker of chip making gear). Not in Semis, we have Amazon (crushing all other sellers of stuff) and META (Google). Then some scattered drug companies. Most of the rest is either very small, red, or both…

So I guess the question is “Ride this bubble, or time when to get off before it pops?”.

There’s a whole lot riding on Tech, Semiconductors, and a couple of Internet Companies. Not so much expecting to make money in “brick and mortar” stores, cars, manufacture of goods, agriculture, mining, etc. IMHO, not a good thing.

For now, I’m going to continue mostly using SPY as my major investment / trade vehicle, but will likely add an entry buy of QQQ and consider trading one lot of NVDA. Maybe easing into it with SMH first ;-)

So there you have it. My view today.

Posted in Economics - Trading - and Money, Energy, World Economics | 3 Comments

Well That’s Not Good. – Unrealized Losses Exceeding Reserves – Mortgages & CRE

Banks in total have $1.40 of “reserves” for every $1 of delinquent CRE Commercial Real Estate Loans. Essentially they have only 40 ¢ of reserves for all the rest of their loans. That’s close to a liquidity issue.

Lack of liquidity means not a lot off new loans, so not a lot off new profits. New loans dropping.

Add to that the fact that “consumers” are already up to their eyeballs in debt and can’t carry any more… season with the Fed having lousy sales of U.S. Treasuries (due to massive $Trillions of debt AND huge deficits… so some Fed Bond Auctions have gone “very poorly”…)

Businesses are abandoning office buildings, and some (like BurgerFi) are going out of business due to lack of profits from Blue State Stupid minimum wage laws… So commercial RE is under a LOT of pressure.

All of this is pushing up interest rates, making the problems of lenders and borrowers even worse.

So, as of now, “reserves” at JPMorgan Chase, BofAA, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley are are at 90 ¢ for ever dollar of commercial realestate debt on which a borrower is at least 30 days late.

Basically, they do not have enough reserves to cover their “in trouble” or “late” borrowers… for CRE. See minute 7;30+ of the video below.

That’s a problem.

So, do you expect business to improve in this massive Federal Debt Bubble? Do you expect profits to businesses to improve with California (and other “blue” States?) making massive Minimum Wage Hikes? ($20 for “fast food” workers, and then they had to do $25 for “health workers” since flipping burgers is easier / more pleasant that changing bed pans and festering wound dressings…)

Or do you think that driving the economy into a giant ditch via Central Authority, and massive fuel cost hikes, is going to cause ever more business failures and ever more loan defaults? Eh?

Season with many commercial real estate folks (especially those in “retail stores”) abandoning places like San Francisco, New York City, and other Blue “mostly peaceful protest” and “Steal Under $1000 For Free!” cities…

Looks to me like “Bidenomics” is finally coming home to roost. Just in time for “The 5th Of November”… (“Remember, remember, this 5th of November, the lawfare and treason and plots”… E.M.S.)

So, FWIW, I’m on a “buy a chunk of gold & silver every month” plan. Dollar cost averaging into it. I hope to reach (maybe) 10% of net worth in a year (yeah, going very slow and fairly small, really). And yes, I’d likely be better off going at 2 to 3 times that rate. But I’m not interested in lighting up bonfires of alert lights… Besides, I’m also looking to buy (clear, not a loan) some added land, and other “stuff” too… so the “metals” are a minor part of the portfolio plan. Also, keep in mind, the last time “Progressive” leftists ran America into a ditch and FDR confiscated all the gold in the country… It could happen again. In that case, lead and brass might be harder to confiscate ;-)

Posted in Security & Privacy, Tech Bits | 26 Comments

Avoid Ecosia Search Engine

Just Another AwShit Warning:

DO NOT USE THE ECOSIA Search Engine. It is malware / adware.

I had installed it in a Chromebook Chrome browser, and it seemed OK. Then, as is often my habit, decided to change to a different search engine after some weeks.

It will NOT change back.

Now the reason I’d decided to change was that it was nagging me to turn off my ad blocker (as it wants to show me ads to ‘plant trees’).

So, I can change my default browser search setting, but when I submit a search in the address bar, it still goes off to Ecosia.

I removed the extension entirely. It still goes of to Ecosia.

I reset settings entirely, and now Google shows as the search engine. But entering a search term still goes off to Ecosia.

I logged out, and even rebooted, between several trials. It still goes of to Ecosia….

Unfortunately, most searches on “how to remove Ecosia” are full of helpful ways to remove it from Windoze and even some from the Mac. From a Chromebook not so much…

SO, I’m likely going to be forced into a full “factory reset and reinstall” of what I want on this particular Chromebook unless I find some “new trick”.

Oh Well. That’s sort of the use case I have for these things. Disposable systems.

For now, I think I’ll just swap to a different system.

Posted in Security & Privacy, Tech Bits | 9 Comments