In using the word 'Capitalism' we are surely using Marxist terminology. A better term would be 'liberal free-market economy', but of course legal rules, frameworks and guidelines are needed to protect the rest of us from the predations (intentional or otherwise) of the 'entrepreneurs, contra-preneurs and con-trepreneurs'. The 'non-trepreneurs' want basic freedoms, some way to earn a living, and to be left alone, basically. Sadly though, there in depressingly little scope to be just left alone these days. We live in ostensibly high-trust societies, but that trust is easily manipulated. In reality, as John Perkins has set out in 'Confessions of an Economic Hitman', and Peter Breggin in 'Covid-19 and the Global Predators: We are the Prey' we in the West are living under a system of Global Transnational Corporatism. Politicians, top executives and security services all seem to have blended into an actively sociopathic, rapacious 'blob'. Voting has little effect on policies (the 'uniparty' effect); elections are egregiously manipulated; utilities are corrupted and hollowed out. We all stagger from one crisis to another, with the hideous prospect of Agenda 2030 and its panoticonic control looming just over the horizon. No wonder I find sixties music so comforting. We were much more carefree I those days. Anyway Tim, some random thoughts in response to your interesting article.
"All is not well in the garden" is an understated way to describe a market environment where the S&P trades at stretched multiples while credit markets start showing early stress signals and the dollar weakens simultaneously. Tim's instinct to step back from conventional asset allocation wisdom in periods like this is worth taking seriously. The traditional 60/40 framework assumes a reliable negative correlation between equities and bonds that has broken down materially in inflationary regimes. What we have now is a situation where both equity and bond risk premia are compressed, which historically is when preserving optionality, holding real assets, and keeping dry powder matter more than maximizing exposure. The garden metaphor is apt: things look fine on the surface, but the soil conditions have changed and most investors haven't adjusted their planting strategy.
I remember watching "Being There" when I was a senior in college and being haunted, even then, by the potential for just such an outcome.
I have maintained since the GFC that most people were comfortable with the pre-GFC economy where they could work and be taxed, but still had an opportunity to live their lives, potentially get ahead a little and live in a home with their families and take a vacation every year.
then, the GFC came and afterwards, the only people who prospered were those attached to Washington DC, and other capitals, while the rest struggled for the next 8 years. the contract was broken and that brought us both Trump and Brexit. that process is still playing out (the 4th turning does such a good job of describing it) and I fear will continue to do so for a few more years. Here's hoping that the next set of institutions are fit for the future purposes, as the current ones are clearly not.
In using the word 'Capitalism' we are surely using Marxist terminology. A better term would be 'liberal free-market economy', but of course legal rules, frameworks and guidelines are needed to protect the rest of us from the predations (intentional or otherwise) of the 'entrepreneurs, contra-preneurs and con-trepreneurs'. The 'non-trepreneurs' want basic freedoms, some way to earn a living, and to be left alone, basically. Sadly though, there in depressingly little scope to be just left alone these days. We live in ostensibly high-trust societies, but that trust is easily manipulated. In reality, as John Perkins has set out in 'Confessions of an Economic Hitman', and Peter Breggin in 'Covid-19 and the Global Predators: We are the Prey' we in the West are living under a system of Global Transnational Corporatism. Politicians, top executives and security services all seem to have blended into an actively sociopathic, rapacious 'blob'. Voting has little effect on policies (the 'uniparty' effect); elections are egregiously manipulated; utilities are corrupted and hollowed out. We all stagger from one crisis to another, with the hideous prospect of Agenda 2030 and its panoticonic control looming just over the horizon. No wonder I find sixties music so comforting. We were much more carefree I those days. Anyway Tim, some random thoughts in response to your interesting article.
Some great quotes in there, Tim!
"All is not well in the garden" is an understated way to describe a market environment where the S&P trades at stretched multiples while credit markets start showing early stress signals and the dollar weakens simultaneously. Tim's instinct to step back from conventional asset allocation wisdom in periods like this is worth taking seriously. The traditional 60/40 framework assumes a reliable negative correlation between equities and bonds that has broken down materially in inflationary regimes. What we have now is a situation where both equity and bond risk premia are compressed, which historically is when preserving optionality, holding real assets, and keeping dry powder matter more than maximizing exposure. The garden metaphor is apt: things look fine on the surface, but the soil conditions have changed and most investors haven't adjusted their planting strategy.
Classic Tim Price. Priceless!
Tim,
This is a quiet Masterpiece!!
Thanks!!!
I'll need to watch that film :)
I remember watching "Being There" when I was a senior in college and being haunted, even then, by the potential for just such an outcome.
I have maintained since the GFC that most people were comfortable with the pre-GFC economy where they could work and be taxed, but still had an opportunity to live their lives, potentially get ahead a little and live in a home with their families and take a vacation every year.
then, the GFC came and afterwards, the only people who prospered were those attached to Washington DC, and other capitals, while the rest struggled for the next 8 years. the contract was broken and that brought us both Trump and Brexit. that process is still playing out (the 4th turning does such a good job of describing it) and I fear will continue to do so for a few more years. Here's hoping that the next set of institutions are fit for the future purposes, as the current ones are clearly not.