Oh the Places You’ll Go!

Dr. Seuss is having a moment,i something to do with fashion (I don’t really follow the news, if you couldn’t tell, but sometimes I catch a vague whiff of things), which is really just an excuse to quote the legend again, specifically from one of my childhood faves – Oh the Places You’ll Go! – which is more than tangentially relevant to one what we’ll be talking about today in the context of a mid-mortem analysis of my COVID-era predictions for the world, which are now almost exactly a year old, and specifically to see if my estimations of the then-future-now-present have fared better than some of my more narrow-minded shots in the dark from the recent past. So first, to quote the relevant bits of Seussianism:ii

And when you’re in a Slump,
you’re not in for much fun.
Un-slumping yourself
is not easily done.

You will come to a place where the streets are not marked.
Some windows are lighted. But mostly they’re darked.
A place you could sprain both your elbow and chin!
Do you dare to stay out? Do you dare to go in?
How much can you lose? How much can you win?

And IF you go in, should you turn left or right…
or right-and-three-quarters? Or, maybe, not quite?
Or go around back and sneak in from behind?
Simple it’s not, I’m afraid you will find,
for a mind-maker-upper to make up his mind.

You can get so confused
that you’ll start in a race
down long wiggled roads at a break-necking pace
and grind on for miles across weirdish wild space,
headed, I fear, toward a most useless place.
The Waiting Place…

…for people just waiting
Waiting for a train to go
or a bus to come, or a plane to go
or the mail to come, or the rain to go
or the phone to ring, or the snow to snow
or waiting around for a Yes or No
or waiting for their hair to grow.
Everyone is just waiting.

Waiting for a fish to bite
or waiting for wind to fly a kite
or waiting around for Friday ngiht
or waiting, perhaps, for their Uncle Jake
or a pot or boil, or a Better Break
or a string of pearls, or a pair of pants
or a wig with curls, or Another Chance.
Everyone is just waiting.

NO!
That’s not for you!

Somehow you’ll escape
all that waiting and staying.
You’ll find the bright places
where the Boom Bands are playing.

With banner flip-flapping,
once more you’ll ride high!
Ready for anything under the sky.
Ready because you’re that kind of guy!

Indeed! A year ago, however, that’s exactly what we were doing, playing “the waiting game,” and it almost killed us, or at least it almost killed yours truly.iii Although the pandemic game isn’t quite over, I figure that we’re in the 8th inning of the nine-inning game now, so what do you say we tally what we can of the score so far from a year ago? Starting with What else is there to talk about right now? We’re just playing the waiting game. from March 18, 2020:

  • When will Alberta/Canada “flatten the curve” ? Hard to say, but a military shutdown of the country can’t more than two weeks away now. A provincial State of Emergency was finally announced yesterday. Most businesses are closing their doors. Employees who can work remotely started to do so late last week. Gatherings are now restricted to 50 ppl, and should hopefully be down to 5 by the end of the week. There are 97 confirmed cases in the province with only 20 confirmed in Edmonton. There are 598 confirmed in Canada with 8 deaths. The military shutdown never came but we’re even now still “restricted” to gathering of 5 people and citizens of fiat are disturbingly good at policing themselves. The government’s worst offense to-date was delaying vaccine rollout and the frankly bizarre “Hotel Trudeau” for returning international travellers.
  • Canada more broadly and Edmonton in particular will fare better than Italy and its cities. The advantages of our young population within sprawling suburban cities with “inefficient” density are made manifest in a pandemic like this where physical space is man’s best protection against nature. Frank Lloyd Wright knew what the fuck he was talking about when he proposed a full acre/man. Correct.
  • The US is a fucking powder keg. They aren’t even testing properly. From Coronavirus alone, we could see a million deaths in that country this year. The benchmark for a “bad” outcome is the 1918 Spanish Flu, which saw about 500`000 deaths, albeit with a smaller population and poorer medicines. There are 530k reported deaths resulting directly from COVID in the US in the last year. Add up the deaths of despair and my prediction was eerily accurate.
  • Most people are utterly lousy at exponential maffs. Admittedly, anything that quadruples/quintuples weekly is outside of the realm of almost every lived experience. Still true. See the mouth-breathers out in force against the “environmental impact of NFTs” and “only criminal money launderers use NBA Top Shot“. Same as with Bitcoin back in the day.
  • NN Taleb called it first back on Jan 26th. I believed him then, and the implications took me for a spin for almost a week, not least of all because my degrees and work experience in Immunology, Infection, and Public Health were compounded by my sixth sense for non-linearities, but I allowed my own “lived reality” to bring me back down. I don’t regret having been balanced-out at the time. Stocking emergency supplies even three weeks ago seems bloody prescient compared to the average response, which is just getting going now. And now I’m chill as a fucking cucumber, playing the waiting game. I wasn’t always so chill throughout the last year. There were at least three periods each lasting 3-4 weeks where I was in the fucking doldrums. Art helped. Family too.
  • That being said, my rage-o-meter and public pronouncements haven’t been this vocal since 2013/2014. Yup, still going strong on that one.
  • I’m telling everyone who will listen to get the fuck out of equities. This was only temporarily correct assuming that the withdrawn dollars were going to go back into equities at some point in the future. The NASDAQ ripped, what, +43% last year? Had the dollars been withdrawn into bitcoin, of course it was the correct call, as ever.
  • I’m telling everyone who will listen to self-isolate and socially distance. Given that we didn’t even have fucking masks a year ago, nevermind vaccines, an abundance of caution was well warranted. No regrets there.
  • Chamath Palihapitiya was and is also on the fucking money, as usual. His March 14th podcast is a must-listen for those interested in the higher-order and longer-term consequences of the pandemic, starting at minute 53. I’ve cooled a bit on Chamath of late. He got a bit too popular. When my 60-year-old aunt is telling me how much she loves him, I’m forced to check my priors. He’s still a bright cookie, but I wouldn’t follow him into a SPAC (ie. war). 
  • I thought that Bitcoin was a “safe haven” asset until last Friday, March 13th, after its “value” price was halved in a week. Over the weekend, I reset my possibility parameters to include a bottoming out in the hundreds of US Dollars. Is any safe haven asset really “safe” when there’s a MASSIVE deleveraging like this going on ? We’ll soon see. I was too pessimistic. For shame. For most of the preceding two years, I’d nearly forgotten about bitcoin, but this event slapped me in the face and woke me the fuck up. 
  • That being said, the only way that governments are going to get out of this mess is to print TENS AND HUNDREDS OF TRILLIONS of useless paper. This is the systemic shock that will prove Bitcoin’s long-term value as an inflation hedgeThe war we’d been preparing for is here at last, just as MP left the chat. Go figure. “Timing isn’t everything… it’s the only thing.”
  • This is our generation’s WW1 moment. The world will not be the same after this little episode. Correct and correct.
  • I’m making sure to stay as connected as possible with neighbours. We’ll need each other’s support in the months and years to come and we genuinely have an incredible community that I want to bounce back as quickly as absolutely possible. This strategy hasn’t hurt in the slightest, although I’ll never forgive some of our neighbours for excluding our boys from playing with their kids in last summer’s “bubble rules.” 
  • My new favourite caveat is “all things considered.” Still works a charm.
  • I’m talking to family by phone and FaceTime more than ever before. It’s kinda nice. It got old fast.
  • There’s no doubt that China will be the primary beneficiary of this virus. They’ve handled it the best, showing the strength of their top-down, data-heavy model. They’ll set the precedent for how nation states operate in the 21st century. This pandemic is only adding jet fuel to China’s establishment as the new top dog. This has been largely true, but the US will also roar back. There are firmly two top-dogs (and more to come) in this multi-polar world.
  • That being said, on the other side of this, most countries will improve, or at least aim to improve, their self-reliance long-term. They won’t forget the time that China has them by the balls as they rebuilt their economies from the ashes with China’s assistance. Globalism will take a big hit from this. Localism will grow more powerful. This is absolutely correct and absolutely coming. See how Miami and Austin have benefitted from New York and San Fran’s self-immolation. There is of course more to unfold over the next 20-30 years but it’s on a roll now. Talent is mobile and cities have to compete to win.
  • It will take 3-5 years to rebuild the economy to where it was at the end of 2019.
  • The rebuilt economy will not be the same economy, it will be much more digital. Zoom and Slack will prove to be immensely valuable pillars of most business operations, particularly for all the various types of consultants who otherwise spend way too much money on slick, more-signal-than-substance real estate. This has also proven correct. 
  • Commercial real estate will take decades to recover from this blow. Commercial real estate is capital-F-fucked right now. Single-family residential is hot as the sun though.
  • I’m still not sure how the energy economy will look going forward, or how long it will take to recover. The oil&gas economy is trudging along, the thankless backbone of civilisation. A barrel of oil is no longer negative $40 (super contango as in May 2020) and is now closer to positive $60, which means that Putin and MBS aren’t pulling all of their future profits into the present just yet. The battery space is exploding in popularity, so a shift is definitely underway.
  • Our live-out nanny opted to remain so and stay with her husband instead of us for the next 2-3 months. Can’t blame her. We laid her off today but will top-up her EI benefits so that she experiences no loss in income. She’s been with us for over four years and she’s been nothing short of incredible in that time. Truly, she’s a part of our family. But with neither The Girl nor I with much work to do over the next few months, we’ll have plenty of fun looking after the kiddos ourselves! We lasted about a month without Charlyn. The kids were fun, but without our family support, classes, schools, and routines, they broke us.
  • I’m feeling confident that I have sufficient resources to weather this storm, support those around me, and hopefully even pick up some deals, so will it all just feel like an extended holiday ? How long until I’m so bored, frustrated, cooped-up, or justifiably anxious that I want to crawl out of my skin and die ? Does that need to happen at all ? Or will I be one of the psychological/thought leaders throughout this thing and onto the other side ? It was barely a month until I was cooped-up as fuck and ready to hurt some politicians. Thought leader? Me thinks I pump my own tires too much sometimes.
  • I have enough books in my library to last a lifetime, but will I finally crack some of the dustier spines, or will the lures of the web prove insurmountable ? Lots of books were cracked actually.
  • My order of panic was, thus far: parents –> family –> community –> personal business –> personal finances –> global finances –> global industries. I’m pretty happy with that outcome even though it was in no way planned. I think I’ve got my priorities mostly straight! Even thought it wasn’t “cheap” to have personal finances comes so low down on the list. I definitely took a whack, but at least I’m not alone, and misery sure does love company! My order of panic was what it was, there is neither good nor bad but thinking makes it so, but thankfully I’ve spent a lot of the last year getting friends and family to “buy the dip” before this next BTC bull run. *Gives self pat on back*

Now to review my Waiting game thoughts for April 4th, 2020.:

  • This is the start of another Great Depression. Here comes 30% unemployment on top of the 40% we already had. So call it 70% total, round figures. The economy will not be back to “full steam” anytime soon. I’m not sure that the next Great Depression is here just yet. We’ll need inflation to run away a bit more first. It’s just warming up. The Canadian economy is actually getting ready to fly into 2021/2022 with these elevated oil prices, construction booming, our tech sector showing considerable promise.
  • There’s no choice between “the economy” and “human health.” It’s a false dichotomy. We still don’t understand this disease very well and it’s right to be naturally cautious. This was still the correct view a year ago. By November last year, however, the half-baked lockdowns were doing far more harm than good. 
  • The net effect of the false dichotomy is that we’re priviledging human health and in doing so, giving our societal organism a much-overdue systemic shock. Every organism needs shocks to grow and shocks to survive. Every immune system – biological or societal – needs challenges. The “civilised world” is finally getting the first proper shock in a lifetime, which is a wake-up call to the narrow-mindedness of “efficiency” and “globalisation.” While the fiatista powers-that-be are doing everything they can to paper over the destruction they wrought, the shift towards localism is palpable, even if it will probably take our lifetimes to unfold fully.
  • It’s useless to compare statistics from country-to-country, or even over time. No one is measuring the same way, nor keeping methodologies consistent as the pandemic progresses. Still true. Still doesn’t prevent anyone from “trying” because that’s what matters somehow?
  • Those who grow up in this era will care about more serious issues, less about bathroom signage and plastic straws. The virtue signalling at the local level is definitely more mask-related these days, though there are pockets of elites who have it much, much worse. What will “serious issues” be in the decade ahead? I’m coming around to the idea that climate and relatedly supply chains won’t be ignorable anymore.
  • “Resiliency” is finally maturing from hackneyed buzzword to first principle. Stockpiles as well as domestic/regional/local supply chains will be built from the ashes of this crisis. Ayup. 
  • “Self-sufficiency,” “independence,” “autarky” as well. Mhm.
  • Manufacturing of everything from washing machines to pharmaceuticals to semiconductors must be returned to each geography pretending to call itself “a nation.” This is the golden opportunity. Semiconductors manufacturing will definitely come back to the US this decade. In what form and at what level remains to be seen. Critical pharmaceuticals are quite likely to return as well. And dishwashers? There’s still some made in the US and A but it seems unlikely that it’ll all be repatriated.
  • Localism is the cure for the inevitable economic deflation to come.
  • Minimum wage is going back to $5/hr. Maybe lower. It still should even if it’s unlikely too. Thankfully, there’s the prison complex keeping wages nice and competitive.
  • Inefficiency” will increasingly be seen as a virtue, not a vice. At this point I’m included to think that personal health tracking and optimization will be the biggest part of this. Sleeping 8 hours a night is only “inefficient” if your labour value is being measured in terms of inputs instead of outputs, which is an industrial age artefact well and truly on the way out the door. Outputs are everything today.
  • Patience too. Sure why not.
  • Bureaucracy is being used to solve the problems of bureaucracy, eg. American hospitals can’t buy masks and ventilators because their procurement staff are litigiously-minded, surprisingly poor, and basically evil… so now 3M masks can’t be exported to Canada ? Let’s see if there isn’t retaliation. Remember the mask shortage? It eerily foreshadowed the vaccine shortage, which should ironically give us confidence that it will be raining vaccines very shortly and we’ll be in the clear this summer.
  • The US is still a bit of a powder keg as far as the virus is concerned, just as they were two weeks ago when they only had 150 (first-order) deaths from COVID-19. Today they have 7`404 8`276. And don’t forget the second- and third-order consequences of increased suicides, domestic violence, and bloodshed over scarce resources (ie. toilet paper). There’s been half-a-million-plus direct COVID deaths to-date so I’d say that my spidey sense (ie. built-in non-linear extrapolator) was reasonably well tuned a year ago this time. 
  • The stock of “public health” will rise dramatically. This one is more mixed. At first we were told that “masks don’t work” not because masks didn’t work but because it made more sense to the ivory tower bureaucracy to lie about the shortages. Still, stockpiles will now increase, future vaccine approvals will be fast-tracked, challenge trials are now politically acceptable, and the biotech beast is being unleashed into the innovation-starved economy.
  • The stock of “climate change” will decrease dramatically as 2050 targets are met this yearglobal politics becomes more acrimonious, and “anti-carbon” dollars are spent elsewhere. This was a bit more of a miss mostly because the reindustrialisation gambit is being reframed as “climate-related” under Biden. Had the COVID vaccines been announced a week before the November 2020 US Presidential election instead of a week after, and Trump had still been in office, then the same reindustrialisation gambit would’ve been framed as “MAGA” but the difference is one entirely of style, not substance.
  • Emissions targets won’t be able to force the electrification of the auto industry anymore. Tesla will likely still grow and thrive but the Lotus Evija will be canned, as will many others. Evija is apparently still coming, if in reduced numbers. The fact that stonks only go up because the S&P is an extension of the US public pension system hasn’t hurt the 0.01% in the slightest. Quite the opposite in fact.
  • Speaking of hypercars, like skyscrapers, their insanity seems to peak with economic cycles. The McLaren F1 was released into the headwind of the Mexican/Asian financial downturn of 1994 and it never sold all the planned production units. Today, the Aston Martin Valkyrie and Mercedes-AMG One will be released into this crisis as pinnacles of engineering in our time. Most of the other hypercars slated for release in the next two years will be pulled from market before the full production run is completed, or possibly before production even starts. There were definitely some production cuts but no outright cancellations of planned models AFAIK.
  • Borders will grow taller, tariffs will increase. This is definitely true.
  • Two currency systems (domestic/foreign à la CNY/CNH) will be attractive models for countries other than China in the decades to come. Remains to be seen whether this is even necessary in a CBDC world where you effectively have a totalitarian currency that’s mapped to each individual.
  • Privacy will decrease, surveillance will increase. 100%.
  • Each country’s federal government will spend +/- and entire year’s GDP over the next 12-18 months to provide economic support and create a financial “bottom.” Too true.
  • Federal governments will double the size of their influence on GDP over this time, inevitably leading to more bureaucratisation, more corruption, and a strengthened black market. Almost certainly true as well, but what else would you expect from the increasingly weak federalis? Localism cometh.
  • Best case scenario for Alberta in the next decade is for Canada to cease imports of Saudi/American oil and turn Alberta into the primary oil/gas supplier for the country. I give this scenario a 40% probability by 2030. Still not impossible.
  • Canada’s natural wealth, abundance of space, and relatively high level of immigrants will serve it well under the new economic paradigm. Looks to be holding up so far.
  • The Chinese economic engine has no counterparty to its trade and so will take much longer to rev back up than previously anticipated. How many other economies will find out the same harrowing truth before long? Who even knows how revvy it is today? Who trusts anyone’s published numbers? I’ve seen stats pointing to a piping hot Chinese economy right now and others saying that it’s a house of cards. Who even knows.
  • The small positive impact on pension funds from the reduced numbers of retirees (killed by COVID-19) will be dramatically outweighed by the negative impact on pension funds by reduced market returns and reduced employment incomes. Dead wrong. Stonks only go up! Jeez Pete, don’t you know anything?!
  • Playing economic kingmaker is a road to ruin. Why should Ontario force the closure of non-public construction sites ? Why close any sites at all ? The amount of confusion being created is leading to severe dislocations in the “essential” parts of the economy, to say nothing of the “non-essential” parts already shuttered. In my humble opinion, all construction should continue, to the extent that supplies and manufactured goods to build them are available. All construction across Canada started back up shortly thereafter and has remained open throughout the pandemic year. Because seriously.
  • On a personal note, I’m no longer missing my previously scheduled trips this spring, four weeks later and that wound has fully healed, but I’m super duper looking forward to the snow melting so that I can get back out to the track. I’m hoping to spend a looooot of time there this summer. I really did spend a lot of time at the track last summer. I was there at least 20 times, mostly karting but in the sports cars too. It was an absolute blast and there will be much more to come this summer too, at least until we get our jabs, then it’s back to the skies baby!!!
  • For someone who worked 80% from home before this whole episode, the path to a new normal has been relatively short and sweet. I got real tired of working 100% from home after about a month, so I returned to my previous schedule of going to my downtown office in the afternoons and all was right with the world again!
  • We’re all reassessing our priorities right now and it turns out that I’m far less in love with horology than I am with cars. Even though I’ve been spending more time/resources on watches lately, upon further reflection, I obtain far more utility from dollars allocated automotively. So it’s on now! Last year really was bananas fun with my four-wheeled toys! I’ve hardly thought about watches at all this last year, but I did spend a lot of time thinking about and investing in fine art, NFTs included. I expect that 2021 will be similar in this regard.
  • It’s little Ari’s 2nd birthday today. Happy Birthday, My Little Lefty! Just a few weeks until he’s three-years-old now, oh the places he’ll go!iv

    ___ ___ ___

    1. Not that kind of “moment” you degenerate fucking gambler. Try thinking of something other than Top Shot for once in your goddam life. Some people… 
    2. Just in case the censors get any bright ideas about cancelling Oh the Places You’ll Go!, it’s archived here
    3. To quote Dean Kissick at length regarding our brave new world:

      The ball falls in Times Square. The clock ticks over. It’s a bright new year. Your ex-quant friend drives three of you down to a millionaire’s TriBeCa coke loft in his vintage red Alfa Romeo. You’re racing down Broadway with the top down and all the lights turn green for you, they glow for you. The loft’s full of artists and artworks. The evening’s hosted by your friend who used to be a designer at Celine and now couriers drugs. Plates of lines are going around. You’re handed some ecstasy, you’re talking to a Marxist on the floor, you’re introduced to a former America’s Next Top Model contestant, you’re accelerating. It’s 2021. Cryptocurrency’s exploding. DeFi (decentralised finance) in particular. Robinhood traders on r/WallStreetBets nearly take down a hedge fund. It’s Valentine’s Day and you’re alone. The European Central Bank tweets, “Roses are red, Violets are blue, We’ll keep financing conditions favourable, ’Til the crisis is through.” Cryptocurrency’s exploding again. NFTs (non-fungible tokens) in particular. The Nyan Cat meme goes for $590,000. The “ape in a fedora” CryptoPunk goes for $1.54 million. An animated gif of Trump’s bloated, naked corpse by someone called “Beeple” goes for $6.6 million, setting a new record for any Millennial artist, dead or alive. Christie’s launches a two-week sale of one of his works. It closes tomorrow and has already broken the record again. Current bid: $9,750,000. [It sold for $69.3mn] The US senate passes a $1.9 trillion relief bill. You’re in Starbucks following the floor stickers that tell you where to stand, looking at the price of each cookie, mind RACING, worrying, thinking, Hyperinflation! Michael Burry is right!

      Five stylishly dressed teenage boys stroll down Prince Street extolling the US dollar’s hold over the Swiss economy. A whole other economy based on trolling, memes and network effects is appearing. Now everyone’s a day trader, everyone’s a drug dealer, everyone’s an art director for a weed delivery service, everyone might be the next top model, everywhere’s a secret coke loft, now everything can be traded or shared online; money printer, bad figurative painter, subreddit, museum gift shop, NFT minter go brrrr; it’s the first day of spring; it’s Beeplemania; images and capital have become the same thing; welcome to the total financialisation of reality! [...]

      So much of today’s culture is a poor-quality remake of something better and more compelling. KAWS bootlegs pop-cultural staples like Mickey Mouse, the Simpsons, Peanuts, and SpongeBob in his own depressive comic style, while Beeple takes Mickey, again, Pokémon and Shrek, plus politicians like Joe Biden, Hillary Clinton and Kim Jong-un, and composites them into dystopian CGI montages. There are two paths for the golden-age American cartoon star: to be withdrawn, like the lascivious skunk Pepé le Pew, or, worse, to be reimagined as bad art, as childish and nostalgic art for those that don’t like ideas, or beauty.

      Lately artworks have begun to look more like memes, while memes have begun to look more like artworks. The memes look nicer, and offer more hope. [...]

      This is an age of great speed and competition. We’re all looking for more popularity, new ways to find an edge; and yet, all this competition only seems to lead to blandness and mediocrity, rather than breakthroughs. Nor does it lead to collapse; even accelerationism doesn’t work. We want too much content, too fast, and it just leads to this endless algorithmic churning, this paint-by-numbers effect. You see it in art. In Netflix documentaries. Spotify playlists. Op-ed pages. The news. The latest manufactured outrage. Well-reviewed first-person novels about nothing. All so dreadfully banal and repetitive. This is what results when everything is forged in economies of dollars, of ether, of attention. Most culture now has the feeling of having been made by algorithm; and the reason for this, is that humans have begun to act like algorithms. [...]

      Poor images like Beeple’s, or the $1.54 million ape in a fedora, or most everything in the stream, are lessons in why we can’t stay locked down forever. Can’t just stare into our screens until death. Because if we do, we’re abandoning Earth, the possibility of transcendent beauty, and with it the sanctity of human life, which is given meaning by powerful art, among other things. We’re eating our own souls. Poor images like these are images of hell.

      What non-fungible (which is to say, unique) tokens show us, is the absolute fungibility of culture today: its hazy, interchangeable meaninglessness. How it all belongs on a blockchain. How it all belongs on an infinite self-generating playlist ouroboros. It all belongs on a streaming service that slowly steals the hours and the heartbeats from inside you. When you look at the Discover Page Hotties, you look back into your own soul through a clouded mirror. “Online,” a mysterious anonymous cipher writes to you, “so much is dependent on an algorithmic matrix of mined data that the user’s identity is distilled so accurately that you can’t breach the identity that’s fed back to you via the screen. So no chance encounters, just a recurrent overlap of what you already are.”

      You may recall Dean from last year’s Artsy fartsy moments at the estuary between past and future. 

 

Ari almost 3

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