Riot Gear Time?

Hard to trade off this fundamental logic, but it is 100% true:

“In my opinion it is not a matter of if the Euro will ultimately fail or require some form or restructuring (such as defections), but when. This bailout may have bought the EMU some time, but it has not resolved the structural problems which will continue within the EMU. My greatest fear (for markets in the near-term) is that the ‘speculators’ now know the system is broken (while the politicians do not) and they will continue to weigh on the market until it breaks. Many say that these ‘speculators’ are having an adverse impact on the markets. I fully disagree. When a young male lion attacks and kills his weaker competitors, the integrity of the food chain is kept intact and ultimately strengthened when the weaker animal is killed (or prevented from mating). Ultimately, the species is strengthened and its odds of survival substantially increased over the long-term. While this causes some near-term pain it is ultimately a benefit to the species as a whole. The Euro is broken. Single currency systems do not work and they must be killed. In the long-term, it is in the best interest of all involved. If the politicians in Europe are wise they will begin working on real structural reforms now that they have bought themselves some time. Unfortunately, I don’t think they recognize that this is a currency crisis and that’s why the risks in the market remain abnormally elevated.”

I am going to buy riot gear.

6 thoughts on “Riot Gear Time?

  1. There were a number of intelligent choices made in 1999, when some countries were contrarian (like the UK and the swiss, and norwegians), that understood in advance that monetary union without political union was not the right course. A one size fits all can never fit, in a free market. Each country has its own unique systems, some are better at managing their country than others.
    At some point in time in the near future, I believe extreme stress will show up in the eurozone countires, and members will have to exit, (like england had to exit the erm in 1992, when they tried to go against the market trend and lost against Soros).
    Also who actually believes Greece will make good their loans? This 750bn, just delays the inevitable , it does not go to the root of the problem.

  2. “When a young male lion attacks and kills his weaker competitors, the integrity of the food chain is kept intact and ultimately strengthened when the weaker animal is killed (or prevented from mating). Ultimately, the species is strengthened and its odds of survival substantially increased over the long-term. While this causes some near-term pain it is ultimately a benefit to the species as a whole.”

    100% true?

    Only to lions or is it to human species also?

  3. I personally dont like the idea of near-term pain and long-term pain. I think it is our own warped way of interpreting the animal world.

    Like, now, the oil spill has destroyed so much of eco-system in the deep seas. All that we are worried is that it should not attack the coastal habitat where we are growing fish and shrimp for us to eat.

    When we think of second order, third order effects, our actions will usually be slowed down. While I fully understand that this is all price for progress, and I dont have answers to the questions, just some sadness and feeling of helplessness.

  4. Weakness is not rewarded in the markets or within capitalism. There are untold wise reasons for that.

    No one wants to see oil spills, but your direction there seems part of some other argument.

  5. You nailed it there, Mike. My view of weakness getting protected is just sentimental and not really beneficial to the protected or to the bigger system. I am probably mixing up stuff.

    Capitalism and competition, brings out the best in people in terms of capability, personal responsibility and allows organization

    At School and Home we nurture and protect the weak until they grow up. At the markets and world at large, probably best way to protect the weak is to challenge it
    (to become strong). I see what you are saying.

    I think at the core is the question – is the universe a friendly place or a hostile place (Einstein’s question). I think Bill Williams (Trading Chaos) had a sentence completion exercise
    ‘The Market is a ———-‘ to be filled with name of an animal. I think how I fill it up will determine if I face it the right way and flow with it or try to fight with it and lose the game.

  6. In the US animal kingdom the young lion can’t cut it so the government steals meat from the big lions and gives it to the weak ones. The weak lions then mate and produce more weak lions. Pretty soon all of the meat is being eaten by weak lions and the strong ones move to a different jungle.

    Long-term, strong lions from a far away jungle that allows nature to take its course come to the US jungle, eat the weak lions and take ALL the meat.

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