A river flowing with pasts, presents and futures:  At the CODA’s conclusion in “Improbable Possibilities”, I found myself in such a blended river.   Many of my stories in “Improbable Possibilities” revolved around my time spent in the investment business.   I’m going to create a couple of blogs and write about what I have learned when the financially unthinkable (impossible?) became possible.  When I started in the investment business, rates hovered around 18%.  Unthinkable?  Impossible?  Time goes by.  Anything can happen.

Financially improbable possibilities can actualize.

I was so struck by our current financial insanities, I had to write about one of them.

Bubbles.  Benign?  Financial bubbles have proven to be lethal.

People are talking a lot about an impending financial bubble.  I think one is staring everyone right in the face, and no one wants to deal with it.  If I had to predict something in the financial markets–I would be inclined to think we are looking at another bubble again, as opposed to a recession (I think they have given up on recession).

Although you can ”ride the bubble” for a while, you will want to be in cash (or gold) when it bursts.  And it will burst quickly, and you and I won’t know that it has until after it’s happened.  I don’t think even the best money managers will, because they are so focused on riding the bubble.  Only the oligarchs and global Fed equivalents will see it coming.

This makes me think of the captain on the Titanic.  Or that Singapore ship that just crashed into the bridge in Baltimore.  The captain saw it coming, but he couldn’t turn it around.  At least he issued a Mayday.

If they lower the rates, it will speed up this process, because people will be inspired to layer on more and more debt with cheap money.   And “made up” currencies are just another form of debt.  When you look down deep, they aren’t collateralized by anything.  Yet it seems that the algorithms used to trade then are “collateralized” by the greedy consumption of our energy.

This is from the Bloomberg Letter today, presented back-to-back.  Maybe Bloomberg “gets” it:

Blackstone’s Steve Schwarzman said the private credit industry will expand further even as critics warn of a bubble. “Our default rate on these types of loans is three-tenths of 1%,” he said. The firm’s also planning more retail-investment products in Japan.

Ray Dalio warned that China must fix its debt problems or face “a lost decade.” The Bridgewater founder recommends the country engineer a deleveraging and an easing of monetary policy at the same time.

Sigh.  Something’s gotta give.  Anything can happen, and sometimes it happens very quickly.  Especially in these days of algorized; approaching faster-than-the-speed-of-light; nearly infinitely complex; financial transactions.

Be conscious.

Observe possibilities.

Entangle possibilities.

Create possibilities.

Throw some sort of spaghetti against the walls of your financial life and see if it sticks.