I have been thinking a lot over the last few weeks, more than usual if that is possible ?. I have probably never been more confused which is why I have avoided writing my weekly as I try and wrestle with my thoughts.
I am providing early warning, if you are not into philosophical discourse hit the delete button now.
Throughout human history, fear has been the universal response to death. Epicurus who taught a very anti Platonic approach to life felt that most of human suffering came from an irrational fear of death. He was an empiricist and believed that when you died that was the end. Both the body and soul were done when death came knocking. For this reason he believed we were put on this earth to enjoy all its pleasures. He was a hedonist who set in motion a powerful school of thought called epicureanism.
At the start of 2020 the world was introduced to a virus that has spread into a global pandemic which has caused society to suffer an existential crisis. We were locked up with no idea how deadly Covid-19 will be. It felt like this might be the end of humanity and we were all faced with confronting that fear that we all have of death.
Things started to get better as the peak of the first wave subsided and we came out of lockdown and life moved to its new normal. Then we started getting more and more news that a vaccine was coming and we learned better ways to manage patients suffering adverse conditions.
Originality is the one thing unoriginal minds cannot feel the use of (John Stuart Mills in 1859).
We now have 2 vaccines that are about to be released using a novel messenger RNA technique which has never been done before. Traditional vaccines typically inject you with milder forms of the actual virus triggering an immune response. The new mRNA is a much more targeted approach instead of having the viral protein injected , a person receives genetic material – mRNA – that encodes the viral protein. This gives the immune system a preview of what the virus looks like without causing disease, and in so doing the body then prepares its defenses, in order to attack the virus.
Get ready folks for Dow 30,000. We are living through an epicurean – YOLO (you only live once) epoch.
There is nothing that seems capable of dampening the animal spirits we find ourselves influenced by. We have unemployment levels last seen during the great depression. We see a world indebted at levels never seen under the central banking era of the last 100yrs. We see a world of almost zero interest rates with no inflation (perhaps some deflation). We see the bankrupt Greeks bond markets trading at levels lower than the USA. We see the USA as divided as its ever been with a President unwilling to accept the will of the people (I know that its under legal dispute but do me a favor there are ways to behave). We see a China that is increasingly flexing its muscles to those that speak against it and we are seeing the Corona virus spreading out of control in the northern hemisphere, a vaccine being the only hope for the USA stopping an even bigger and unnecessary death disaster.
I believe that the only way I can explain the way the markets are behaving like they are is that having been confronted by the ultimate fear of fears – death. We have come to believe that life is all about living to the full and that you only live once (yolo). This behaviour of careless abandon feels as if society has been vaccinated against common sense and the belief in something greater than just the here and now.
For those paying attention it may not all be so rosy as the central bankers and government politicians would have us believe. If you look at the S&P500 adjusted for Bitcoin (blue line) then you see a completely different picture to the one we see at its most basic level.
At the end of the day this is just how I see things so remember don’t shoot the messenger.