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Surprise, Surprise, Surprise: Prediction Doesn’t Work

Excerpt:

“This has basically never happened before in my whole life. I can remember 1½ percent rates. It certainly surprised all the economists. It surprised the people who created the life insurance industry in Japan, who basically all went broke because they guaranteed to pay a 3% interest rate. I think everybody’s been surprised by it, including all the people who are in the economics profession who kind of pretend they knew it all along. But I think practically everybody was flabbergasted. I was flabbergasted when they went low; when they went negative in Europe – I’m really flabbergasted. How many in this room would have predicted negative interest rates in Europe? Raise your hands. [No hands go up]. That’s exactly the way I feel. How can I be an expert in something I never even thought about that seems so unlikely. It’s new territory…

“I think something so strange and so important is likely to have consequences. I think it’s highly likely that the people who confidently think they know the consequences – none of whom predicted this – now they know what’s going to happen next? Again, the witch doctors. You ask me what’s going to happen? Hell, I don’t know what’s going to happen. I regard it all as very weird. If interest rates go to zero and all the governments in the world print money like crazy and prices go down – of course I’m confused. Anybody who is intelligent who is not confused doesn’t understand the situation very well. If you find it puzzling, your brain is working correctly.”

Shout out to Charles Munger, age 91, vice chairman of Berkshire Hathaway.


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Ep. 464: The Next Brexit with Michael Covel on Trend Following Radio

The Next Brexit with Michael Covel on Trend Following Radio
The Next Brexit with Michael Covel on Trend Following Radio

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Please enjoy my monologue The Next Brexit with Michael Covel on Trend Following Radio. This episode may also include great outside guests from my archive.

In this episode of Trend Following Radio:

  • Boom and busts
  • Brexit
  • Certainty in markets

“Certainty in markets, that is the delusion. That is the media cacophony.” – Michael Covel

Mentions & Resources:

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HSBC to Charge for Holding Deposits: NIRP Arrives Full Blown

The system plans to drip you dry if “income” is your goal:

HSBC has become one of the biggest global banks to say it will begin charging clients on deposits in a basket of European currencies.

The decision underlies the extraordinary measures banks are taking to prevent their profit margins being crushed in the record low-interest rate environment.

HSBC has written to other banks to warn it will start charging them for deposits in euros, Swiss francs, Danish krone and Swedish krona — all currencies of countries that have negative interest rates — at its UK, German and Hong Kong operations from this summer.

It is the first UK bank to announce such charges following similar announcements from Swiss, German and Nordic institutions.

“HSBC charges banks for deposits they hold with us in currencies where negative interest rates apply,” the UK-based lender said in a statement on Tuesday. “Banks affected have been notified and we continue to monitor the situation.”

Still trust the authorities?


How can you move forward immediately to Trend Following profits? My books and my Flagship Course and Systems are trusted options by clients in 70+ countries.

Also jump in:

Trend Following Podcast Guests
Frequently Asked Questions
Performance
Research
Markets to Trade
Crisis Times
Trading Technology
About Us

Trend Following is for beginners, students and pros in all countries. This is not day trading 5-minute bars, prediction or analyzing fundamentals–it’s Trend Following.