Monthly Archives: August 2017

Something’s gotta give

“State meddling has successfully stabilized China’s US$7 trillion stock market by curbing volatility and steering valuations to rational levels.”

China Securities Regulatory Commission. (via zero hedge)

 

Everything is under control. We are entitled to timeless prosperity. Perpetual money printing. Never-ending bullish markets. Infinite credit … Perhaps!

Regardless, when I read the previously quoted official statement, I corroborate not only how dumb the regulators are at times, but more worryingly, how deeply complacent. Not only The Donald brags about his stock market success. Yellen assures us that a new financial crisis is nearly impossible in our lifetimes. Draghi continues to be infinitely pleased with himself and exudes confidence when he talks. They pat each other on the back. Our Gods are feeling good about themselves. Interesting.

Even the people at the Chinese POMO desks are claiming victory. This last statement caught me off guard. You have to be particularly stupid to boast about your proficiency at market manipulation. And these are the great Central Bankers and regulators that will supposedly save the world? One thing I am sure of is that humanity will need a merciful God when this breaks!

In financial markets, as in life, everything only lasts so long. Eternity is, as Kafka said, a long time (surtout vers la fin) and is only applicable to heavenly concepts, Muslim faith or the Buddhist nirvana. To be honest, I even doubt that. According to ordinary mortals like Minsky (and uncommon sense), financial stability breeds instability. Whatever the sell-side or the bulls say, stability and growth cannot be forever extrapolated into the future. At some point, reality rears its ugly head. I’m going to elaborate on the most relevant issue of them all. What catalyst will put an end to this egregious bubble?

Answering that question implies a lengthy reply. First of all, I think we have to exclude some relevant potential factors -borrowing a clinical approach to diagnosing the precise pathology of an ailing patient. You engage in successive diagnostic tests to help discard possibilities -until you focus on the right disease or infection. Hey, I feel like Dr. House!

For starters, I think the traditional catalyst is out. It has always been inflationary pressures that urged rates up, slowed activity, lifted default rates and finally induced a recession when the long end of the curve collapsed and inverted. A bearish steepening and spread increase, followed by a bullish flattening. Things change: we have to rule out inflation as the catalyst for anything nowadays. If a near doubling of petrol prices in a context of synchronized global GDP growth was unable to generate inflation and AHE growth this year, what’s going to get the job done?

Inflation and maybe hyperinflation might very well be the outcome after CBs throw the kitchen sink at the next recession -or financial market collapse. But it will not be the catalyst for anything. A chronically shabby aggregate demand will preclude an unfortunate inflationary behavior acting as the detonator for the next crisis. Inflationary threats will move rates and currency crosses, and maybe alter the social landscape -but are unlikely to bust this bubble.

As usual, some caveats apply. We can’t write-off inflation entirely. I am just excluding the kind of inflation that would pressure CBs to raise rates significantly.

Underground inflation, the one that kills families without showing up too badly in macro data, is alive and well. Think tuition, health care and the other concepts featured in the chart. Similar trends apply outside the US. And it bears remembering that even mild inflation is not without consequences, particularly in a context of stagnant wages. It relentlessly tears up the social fabric of our peaceful coexistence.

Stagnant wages I said. I am understating the problem. Wages are a disaster. Employable workers (reasonably skilled labor excluding drug addicts) are in short supply -and have been for some time. Amazingly though,  it hasn’t moved wage costs upwards. The labor market is increasingly oligopolistic (employers have the upper hand), and secularly weak aggregate demand doesn’t give companies much leeway on the matter.

A second pathology to be ruled out is the traditional, rate hike induced, market bust. CB’s see an overheating and hike rates, even before inflationary pressures (unlikely but possible). The Fed is at it right now, and some pundits worry about the timing. It is not the best of times to lift rates, but I think interest rates will not kill the beast either. No matter how clear they voice their intent to raise rates, remember that any increases have been tagged as “data (market) dependent.”

The market knows that full well -and that is the reason for always confronting Fed dot plots. Market dependency means that they will reverse course if markets tank. That behavior not only backs equity prices but is also vigilant of the steepness and levels of the interest rate curve. It is unlikely that they would tighten enough to generate a sustainable market tantrum. Even if there is a policy error (something likely at some stage), they will bail themselves out lowering rates fast and activating POMO desks.

Third, monetary aggregates are not likely to precipitate a downfall. We all know the Fed is going to take some chips off the table (reduce its balance sheet). Regrettably, they also say that it is all subject to the state of the economy, meaning in reality, that it all depends on how much the market can handle. It makes sense to think that QT will deflate asset prices because QE inflated them. That was indeed my initial line of thinking. But politburos at CBs are not dumb. They will fine tune the withdrawal of liquidity and stop it whenever needed. And they will manipulate prices if they think they must, to prevent any negative wealth effects. I doubt QT will have a long life.

Even if aggregate credit growth stalls on its own, they still control the money supply. We play by their rules, and they manage liquidity (very unfair, I know). Even if they surprisingly opted for fair play from now on, we have to presume they are not stupid enough to prick the bubble because of their own doing.

 

If we leave inflation, a disruptive rate rise, or quantitative tightening out, we are left with only three areas of risk:

 

1.- Debt related risks. China and Europe are the likely candidates for the role played by subprime mortgages in 2007. Student, auto loans or state o municipal bankruptcies are not systemic enough to tilt the apple cart. Ponzi debt can be found everywhere, but China and the European periphery are the weakest real credit scores (forget market manipulated pricing and implied risk measures). High yield and credit-spreads also merit a careful follow-up. It is always the weakest link in the chain that breaks first.

Italy is the obvious candidate but, not to forget, credit spreads are priced for a lot more than perfection. The chart below has gone viral. See the Real Vision version using a “Credit Strategist” chart. 

2.- Geopolitical and social risks. We are all increasingly angry with each other, and social and political tensions keep mounting. War of some kind is no longer a questionable call. Civil unrest and systematic terrorism are already integrated into our life style. Trump and Brexit are sideshows. The tensions between nationalists and globalists are widespread and in reality nothing but the intellectual friction area between the haves and the have-nots. The real underlying battle is wealth distribution.

The particular black swan event to come is unidentifiable in advance but is fast decoloring from black to gray. We don’t know what, where, or when, yet we cannot feign surprise when the next major incident takes place. The substrate of social tensions is volcanic. It’s hard to price tail risks, but it is imperative to do so as they inch towards the center of the distribution -and are becoming relevant enough in number and substance. Zero is the market pricing right now -and it is not difficult to certify that it is wrong. Dangerously wrong.

3. A recession is a given sooner or later. Even without social tensions and within stable markets, it is essential to remember that the business cycle has not been repealed forever. Growth will become elusive at some point. Under the weight of an aging cycle, or the accumulated debt pile sapping growth, and or because of ridiculous productivity figures due to malinvestment and insufficient educational levels (in a context of low population growth). Who knows. But before eternity takes over what’s left of us, even our post-GFC lackluster growth is going to stop.

There’s a fair chance it could come very soon. China should not engage in a new macro boost similar to the 2016 credit surge, once the Communist party meeting this fall is over. But it is a wild card to consider given past decisions. The US is cooling even if I have to admit to some contradictory figures. Some macro aggregates are suggesting a recession might be immediate. A Trumpian reaction of some kind has to be factored in, and it’s not an easy one to anticipate because it won’t be very rational.

Anyway, Real Value-added data doesn’t look good. It measures the economy from the supply side and is a rarely used approach. Nonetheless, it seems a reasonable indicator of an impending recession. Carmaggedon is also there to help (with a significant contribution of autos to US GDP helping make it a relevant happening). Savings have plunged, and consumer credit growth is firmly on the rise again. Do we never learn?

But it could very well be that the recession has to wait till 2018 or even later. Anyway, when it happens, it’s 100% curtains for the bubble. And it is the most likely bubble killer. Just to avoid repeating the same things ad nauseam, I will give you Paul Brodsky’s narrative on why a recession ends it all (emphasis mine).

“Consider that wealth is no longer created from production, but rather from financial pricing models and credit creation, credit that must increase at a parabolic pace and can never be extinguished without substantial output contraction and rising unemployment. (…)

Central bank purchases and government investment have been fabricating output growth and asset gains. Central banks now hold about $19 trillion in assets on their balance sheets, up from almost zero in 2008, and are now 20 percent owners of global assets. (…)

Stocks, bonds and real estate collateralize each other while output growth makes it possible to service debt. (…)

The problem is that there are too few dollars for each claim on dollars (credit). The credit that collateralizes equity cannot be repaid and, if output declines, cannot be serviced without more credit. Equity and credit prices will fall (deflate) in tandem as debt service and repayment declines, unless more dollars are created and floated to asset holders. (…)

The current imbalance separating credit (claims on money) from money itself suggests a doubling, tripling or even quadrupling of the money supply in float (yes, 100, 200 or 300 percent monetary inflation directed towards financial markets). This implies nominal asset prices could rise, but not nearly as much as the purchasing power value of the currency they are denominated in would fall.

We doubt all the new money could be distributed to the investor class and then reinvested back into financial markets, and so we think it is highly likely that nominal equity and debt prices will fall markedly in the future, though we cannot know from what level.

In the meantime …

Last February I wrote that the USD was key .. and got it all wrong. I said:

Unfortunately, notwithstanding the difficulty of getting the dollar right, at this stage, it is a must. It is “the dollar” (and not “the Donald”) that will be the main driver of global financial market developments for the next couple of months -and even well after we transition into a new global economic regime.

I nailed the causality, but despite being aware of the key role of the USD, I got the USD prognosis wrong. The USD depreciated strongly in all pairs (particularly in the EURUSD cross), and consequently, it all went risk-on: equities, currencies, credit spreads, rates, etc. To a stratospheric degree. I have to try again. I was right in linking dollar strength with risk-off, but I made a big mistake because it failed to materialize. Will the dollar recover some strength in the near term?

As I said in February, it is challenging to get the USD right. Technicals suggest that the USD’s demise has been greatly exaggerated. No other than Kit Juckes (Societé Generale), a famous euro bull that proposes a three-year target of 1,30 for the eurusd cross, admits to overdone moves. Capital flows (eurusd vs. capital flows), interest rate differentials (eurusd vs. real yields) and peripheral spreads (eurusd versus bund/bono spread) are the three technical criteria he follows most. Here are his three charts on the issue. They speak for themselves.

 

I entirely agree with his take on the short term/technical situation. His reading on the eurusd rate has been excellent. Long term he is a dollar bear against the euro. Again, all things equal I reluctantly tend to agree. My fundamental discrepancy is that all things will not continue to be equal because the European recovery has been based exclusively on QE and a cheap euro. The periphery is heavily indebted and reliant on capital from abroad. If QE goes, and the euro recovers fair value, the periphery will take it on the chin. That is my reasoning for remaining a long term euro bear. Euro appreciation is unsustainable because it undermines the very reasons that support it.

But please take all of this with a grain of salt. Trump wants a weaker dollar, and bubble preservation requires an easy dollar. Politics will play a relevant role, and it’s hard to anticipate which way things will roll. I’d rather bet the ranch on a Chinese bust next winter, or the fact that the periphery will not survive in a strong euro, post-European-QE world. That, I am 100% sure of. The periphery is an unfixable mess if the ECB does not subsidize the south with new credit, low rates, and a weak euro.

Bond trading is not easier. Not foreseeing a spurt in growth and much less so, stable and healthy growth with associated inflation, it is clear that I am not a bond bear. I do think bonds are also in a bubble. Maybe a more pronounced bubble than equities. But the risk of a flight to safety stampede, and my conviction of meager growth at best (a recession cannot be that far out), effectively impede long bond shorts. Bubbly prices also make me uneasy going long duration. I am caught between a rock and a hard place. Just can’t touch bonds with a reasonable degree of conviction.

If you take a look at the next chart, it shows that low rates can be with us for a long time. Zero credit risk rates (if that concept continues to exist in the future once a couple of sovereigns go under) will remain low for at least the next decade. That is of course unless CBs do something foolish (incrementally stupid) and start a hyperinflationary period as a reaction to the next recession or market fall out.

Equities are the perennial TINA choice I have wrongly eschewed for years now. I am running out of patience (and money) but will still wait for a repricing. It’s tough because now I find myself siding with the billionaire bears club way below the minimum wealth level to join it. Not the best place to be because they have deep pockets and can afford to be wrong (I can’t). But that’s how it turned out -and I’m not going to change my point of view because I ain’t rich enough.

Stan Druckenmiller (May 4th at the Ira Sohn Conference): “Get out of the stock market.”

George Soros (June 9th, as reported in the Wall Street Journal): “The billionaire hedge fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter.”

Carl Icahn (June 9th, on CNBC): “I don’t think you can have (near) zero interest rates for much longer without having these bubbles explode on you” while also saying it’s difficult to assess when exactly that might occur.

Jeff Gundlach (last Friday, in an interview with Reuters): “Sell everything. Nothing here looks good.”

Bill Gross (in his monthly investment letter, released last week): “I don’t like bonds. I don’t like most stocks. I don’t like private equity.”

Nick Colas. Convergex (via ZeroHedge August 2017).

La morte a Venezia.

“A crash occurs because the market has entered an unstable phase, and any small disturbance or process may have triggered the instability. Think of a ruler held up vertically on your finger: This very unstable position will lead eventually to its collapse, as a result of a small (or an absence of adequate) motion of your hand or due to any tiny whiff of air. The collapse is fundamentally due to the unstable position; the instantaneous cause of the collapse is secondary.”

Didier Sornette. Expert at mathematical modeling of periodically collapsing bubbles. (Hat tip: Hussman, Mauldin)

 

“Framed as a financial decision problem, one faces a choice between two scenarios:

1) A small probability of losing all of your money all at once at an undisclosed time in the future.

2) A high probability of gradually losing small amounts over an indefinitely long period of time, keeping in mind that persistent small losses over an indefinite time period could lead to large cumulative losses.”

Aleksandar Kocic. Deutsche Bank derivatives strategist.

I loved “Death in Venice.” Visconti had always appealed to me, but this motion picture was a masterpiece. Characterized by most critics like a movie on homosexuality, to my mind, it is rather a film on the inevitability of physical decay and death. It could very well be an epilog to Hamlet, where both ideas regularly recur in most of the imagery. Whatever we do, decay and death are, like in the delightful pop song, right “there” waiting for you.

More importantly, Death in Venice is a rumination on the weaknesses of mankind -and how vice at times, or just benign neglect towards our conduct, gradually take over many of us (if not all) as we age. And a stunning portrait of the decline and subsequent fall of the then bourgeoisie. Their contribution to society was already waning. For some proof just take a look at the ladies loitering along the Venice Lido with their parasols.

All establishments see an end to their period of dominance. Nobility passed the baton to the bourgeoisie who in turn ceded their power to modern politicians. They finally gave in to the economic establishment represented by banks and multinationals. In the last twist of events, post the GFC, our central bankers are the new deities in town, promoted and conditioned to serve that very establishment. They are living their last days in paradise. History always rhymes.

Life is a business that inevitably ends up filing for bankruptcy. The film overtly transmits that it is the very nature of life that leads to death. But the reality of an end to everything, including long economic cycles, or social models, is sometimes adequately turbocharged by extraordinary events. It is the onset of a cholera epidemic that enhances the perception of decay and death in the film -much like CB largesse and Keynesian ideological support has added grandeur to the debt overhang caused by the profligacy of consumers, sovereigns, and corporates.

Moral standards are always relaxed in periods of social or economic decline. I have absolutely nothing against Gustav von Aschenbach’s (the main character) sexual orientation. But, gay or hetero, it is certainly inappropriate to lavishly consent in sexual desire for a naive young male or female. Your first feeling is that of repudiation. But then, the musical score, identified as the result of his work as a composer (in the original novel the main character is a writer), re-conciliates us with Von Aschenbach. If Mahler’s Adagietto is the result of his work, then maybe we can consent to some moral depravation. Aschenbach is a great artist!

Furthermore, what I like most about the film (music and photography are not to be quickly forgotten either) is the convoluted acceptance of his moral sloppiness and, together with it, the acceptance of his last days as a human being. He has surrendered in life. Some of us wish to die with our boots clean, but not few give up the fight well before that. We should all fight the desire to let go. We should all die with our boots clean. But that is an impossible feat for human kind as a whole. It takes too much courage for the ordinary mortal.

Von Aschenbach has given up fighting and lives his last days -perfectly dressed according to his social status- compelling himself to live his somewhat superficial life style to succeed with Tadzio. He extends and pretends until the very end, attempting in vain a near impossible feat (a relationship with Tadzio). CBs are trying to go further into debt to dilute our global debt pile. Their chances of success are strikingly similar if you read Paul Singer. Do you believe in miracles?

In an unforgettable scene, Aschenbach’s hairdresser applies a generous coat of mascara, and some lipstick, to try to rejuvenate him -and succeeds for a time (same as money printing can make things look better for a while). A perfect description of letting oneself go while appearing not to.

If you have ten minutes to spend, do enjoy this long trailer of the film as a divertissement, while listening to the beautiful melody of Aschenbach’s (in reality Mahler’s fifth symphony) Adagietto.

The developed world is acting very much like Von Aschenbach. We know we are an old society on the verge of substantial change. We are aware that some of our problems are insoluble in the short run. We know inequality is metastatic cancer, and we know that increased debt adds to already morbid obesity. We know we are in the midst of a financial cholera epidemic, but we are tired and feel that we need or even deserve some solace. Kicking the can forward helps. But we need more than that.

Any consolation. Drugs, sex, and rock and roll … or money printing and orgiastic spending like there is no tomorrow -all represented jointly in the film by the fantasies with Tadzio. We know a relationship with Tadzio (or more Keynesian spending) is not the answer to boredom, depression, and senectitude. Who cares; we are tired of the GFC and need an easy way out.

We might not crave for sex with a youngster (hopefully), but we let ourselves go regarding money printing, debt, market manipulation, and bubble blowing. Very much like Venetians were aware of Cholera in 1911, we know this CB Keynesian/Phillips Curve model is going to kill us -but we know we are going to die anyway. So why fight?

The outcome is, don’t we all know, not flirting with Tadzio, but financial genocide once the scam is over. That does not deter us from engaging in wishful thinking while living the Venetian “dolce vita.” If we are going to die, let it be fully indebted and invested. People are not that stupid; they are aware of the inevitability of a bust but, very much like a terminal cancer patient, don’t want to talk about it.

We just want to live whatever might be left. Most are aware by now of the fraudulent nature of current financial markets and the subsequent stratospheric pricing. Nevertheless, that doesn’t impede complacency or neglect to adapt to prominent risks. Recent market moves can be easily dubbed as vicious and nonsensical.

European Bank prices are a case in point -if you look at their efficiency ratios, real NPLs, capital structure (most holders of tier 1 or tier 2 securities are blissfully unaware of the risks involved) or balance sheet sovereign risks. Other absurdities abound. Like Covenant light being the new standard for bonds!

But, of late we got a fresh momentum move to ponder. Let’s comment on the EURUSD rate -it shows the most intense rally in decades. I understand that the dollar was too strong, still, a twelve per cent repricing in six months is far too rich. Ultimately the catalyst was Draghi publicly suggesting that the ECB would tolerate EUR appreciation (the famous eyebrow lifting statement in his press conference). Now, please consider the following facts:

  • We have similar GDP growth in both areas (for the first time in nearly a decade, the Eurozone can match US growth). Not for long. The growth prognosis is being altered as I write by the appreciation of the trade weighted euro. Currency crosses are the dominant factor for growth in a secularly mediocre aggregate demand scenario. We are transferring growth from Europe to the US just as we did the other way around with the EURUSD move from 1,14 to 1,04.
  • A 200+ bps differential in two-year rates and 175 bps in the ten-year. The 5-year rate for Bunds is still negative! Core inflation is similar. Unless the USD depreciates 2% yearly, it pays to hold dollars instead of euros. And you have no peripheral risk (I doubt you can count California’s secessionist ideals as a risk).
  • Europe is printing euros to the tune of 60 billion per month, building the largest CB balance sheet in the world. In the meantime and the US monetary base has been stable for three years now and the FOMC is trying to shrink it. There is an international USD shortage. Euros abound. Supply and demand analysis suggests USD strength save for a significant repositioning (like now).
  • Europe sports the highest entitlement contingencies in the world (with a share of 24% of global GDP, Europe pays out nearly 60% of total global entitlements). No wonder we have an immigration problem!. Even with equivalent debt to GDP ratios, Europe is a lot worse off (entitlement contingencies are staggering), and immigration is a serious, pervasive problem for our intensely “welfared” Europe.
  • And yes, we have a great balance-of-payments, if entire attributable to our northern neighbors -while the south rejects or at least indefinitely postpones economic reform enjoying the ECB monetary largesse and fiscal profligacy in the meantime. Internal and external commercial disequilibrium are chronic, and no improvement is to be expected with actual policies. Bickering between the north and the south will continue for years to come.

Keeping things simple, and with the benefit of hindsight, it is all clear to me. The Donald wanted a stronger euro and a stronger yuan; he twisted enough arms around the world to get both. That’s all folks, think about the efficacy of some Trumpian intimidating handshakes and forget the narratives meant to explain the move. He won the battle, but bullying other countries ain’t going to make America great again. Sadly, that’s what he is best at -and likes to do most. He sees it as bargaining. With a Sicilian flavor, it must be. The fact is that a simple and subtle sales tax would have protected America efficiently against unfair trade practices. No need to make “friends” in Europe or China.

Thank God I saw that train coming, held no unnecessary dollars, and hedged my bond dollar exposure to a degree. I wish I had hedged entirely, but the extent of the landslide (sorry, price slide!) has managed to surprise me again. Momentous moves are becoming not only unpredictable but ubiquitous. This move needs to consolidate but it might continue up to the 1,21 level or more. Yet it is sowing the seeds of its own destruction. If growth stalls in the periphery and that is only a matter of time, we will get a severe down move in the EURUSD again!

Why fight? Why not buy the euro and play the CBs hand and the market momentum! Forget the looming sovereign bankruptcies in the south. Yes, I’d love to consider that thinking inappropriate. But I can’t. It makes some sense to me. Maybe more sense than my investment principles. What’s the use of financial virtue when financial vice gives you the best deals? Sex and hopium come cheap and require minimal effort! Let’s indulge. What if we try the next 500 shades of Grey?

Kocic’s options.-

When you consider that investors need the return, that they have seen dissidents like me chopped into pieces, that CB are thoroughly in control, and that there is no other option left (TINA), you have to understand that, like Von Aschenbach, they reluctantly let themselves go. Kocic’s first option is the choice for most: assuming a low probability of being wiped out -but dancing while the music is still playing. They have been right up to know. Why not for the next year or two? Just load up on a couple of ETFs and hope for the best. Don’t forget your mascara and lipstick before you go, you want to look good at all times -and enjoy sex with Tadzio while it lasts!

I don’t know of anybody who has fully embraced the second option quoted above. Losing money slowly is very painful. It comes close to a Chinese torture. And you never know how long this orgy is going to last. It is discouraging, to say the least. We could have ten years to go!

Most investors try positioning their portfolios along the blurred line between the two options. It makes sense for its practicality but adds little conceptual value. Eclectic solutions sometimes add a new flaw to the ideological extremes they are trying to bridge.

I have tried a third alternative strategy, and it worked nicely since the GFC. Until it didn’t. I tried to game the CBs and did well for a decade -with only 2013 in the red. That is until I unknowingly stepped into a widow maker trade: shorting euro zone banks. I got massacred.

I know that European banks are still a recommendation by some analysts. I just think they do not know what they are talking about. It is not about their P&L account but their balance sheet and their shareholder structure. I don’t care if they make more money for a year or two! But nobody wants to look that deep. This year’s business is a lot better, the curve is steepening a bit, and Europe is out of the woods for good, or so they say. Wishful thinking is prevalent nowadays. God save the Queen!

So I lost big. In fact, it had to happen sometime. You cannot anxiously trade for your return every single year -without participating in the risk party with a stable beta exposure to risk- and expect not to be caught on the wrong foot at some point. Your problem is that wanting to avoid playing the CB game, either you trade markets for a living or you remain out -with a sluggish portfolio and close to inexistent yield. There are no good options left for dissidents!

The trillion dollar question is how long this goes on for. Bubbles always end with a bust -but this time might be different. This bubble has the market vigilantes none of the previous ones had. CBs existed in 2008 and 2000 but were hardly aware of the market risks involved. Market intervention by CBs was rare. Manipulation non-existent.

This time is different. The market scam is very well protected by a praetorian guard of POMO desks at major CBs. I do not see how they are going to lose control unless a recession puts them belly-up. And they can work to prevent excessive economic weakness printing some more, or even stimulating credit growth as needed. Playing against the CBs increasingly looks like a lose-lose proposition in the short run.

Hussman brilliantly summarizes it in the chart above. We are in a log-periodic Bubble with a finite-time singularity ahead. I just can’t see why the singularity is going to take place August 2017 -or any other date for that matter. We are left in the dark and have to patiently wait.

However fed up with this situation, I find myself unable to suggest a viable solution. Most likely it follows that physical decay is becoming a personal reality as well. You can see I don’t try to hide I am feeling “down” right now. But at least I don’t use lipstick or yearn for sex with Tadzio as an escape from my dreary financial day to day existence.

Okay, enough negativism for today. To end on a higher note, let me get my initial philosophical thread back. Believe it or not, this was initially meant to be a frivolous post to be read at the beach. I hope you enjoy it.