Thoughts from the Frontline

Leaders take a lot of criticism. In fact, that’s part of the job. Presidents, governors, CEOs, football coaches, other top decision makers and even your humble analyst all have to answer for what happens on their watch—even when it’s not their fault. Then-general Dwight Eisenhower prepared a letter for release in case the 1944 Normandy landing failed, placing all blame on himself. Which, I suspect, he knew would happen anyway.

If, like me, you’re old enough to remember the 1990s internet bubble, today’s AI excitement might be giving you flashbacks. The parallels are unmistakable.

You may have noticed the stock market rising lately. Much of the gain isn’t so much “the market” as a handful of mega-cap stocks. Nonetheless, the bulls are clearly in charge. The question is how long they will stay there. History suggests longer than many market bears think.

“There is a difference between you and me. We both looked into the abyss, but when it looked back at us, you blinked.”

Today, we have a different kind of letter. I’ve been in California for some rather innovative and hopefully life/health span-extending medical treatment. I’m fine, but it has been a bit tiring. So this week, I’m handing the keyboard to you, my intrepid and smart readers.

Recently I saw a T-shirt for sale that said, “Science Doesn’t Care What You Think.” I used a similar metaphor recently, observing how many experiments show that jumping off a cliff will send you rapidly downward. If you want to test that theory, please add me to your will first.

If you’re a parent or grandparent, you may know of the “Choose Your Own Adventure” storybook series. Written in second person, they make “you” the hero. The reader makes choices as the story unfolds, leading to one of several possible endings.

One of the more fascinating and mysterious parts of watching the Federal Reserve is the ongoing dialogue between Fed leaders and Wall Street. We imagine private meetings held in great secrecy. Those may in fact occur, but I’m not sure they are even necessary. The parties exchange their requests publicly. All those speeches, interviews, and papers are available to everyone, but have a specific audience in mind.

Modern economies, even small ones, are unfathomably complex. The number of variables is far more than any human can comprehend or any model can track. It’s really no wonder so many forecasts are wrong.

In thinking about the 2020s, I often find myself looking back to the 1920s. That decade began with a deep recession/depression and ended with a stock market crash. While we now see the 1920s as a kind of “in between” period, people at the time didn’t know another depression and war were coming. They looked forward to good things and often embraced risk—hence the “Roaring Twenties” label.

“Two is better than one” is a nice saying, but it really depends on what you’re describing. Two hurricanes or earthquakes aren’t better than one. Just one disaster at a time will suffice, thank you very much.

Having now spent almost six months describing the historical cycles and massive debt that surround us, I find myself looking for an “easy” exit. Maybe one exists, but I haven’t found it yet. I think we’re stuck. The building will have to collapse around us before we can leave.