Monday, October 10, 2016

The Tipping Point

We've been writing a longtime about this Ivy League pedigree dominance--Congress, Wall Street, Academia. It's probably at least 200 years old. We think Shiller, as the response below points out, has this exactly backwards. This has been too long in the wind. We see more whistling by the elites past the midnight cemetery than anytime in our life.

We don't know know Schiller's whole background but we're willing to bet it's the longest yard from the mean streets of America where we grew up, a place where some would pluck your eye out and eat it for a grape if you stared at them wrong. That's why we find all the name calling and the premeditated epithets healthy. This is one of Gladwell's tipping points and it's probably not going to go down pretty. They usually don't. But that's okay too. We've been here before.

https://upload.wikimedia.org/wikipedia/commons/1/13/Robert_Shiller_-_World_Economic_Forum_Annual_Meeting_2012.jpg

"The Coming Anti-National Revolution" by Robert J. Shiller:
For the past several centuries, the world has experienced a sequence of intellectual revolutions against oppression of one sort or another. These revolutions operate in the minds of humans and are spread – eventually to most of the world – not by war (which tends to involve multiple causes), but by language and communications technology. Ultimately, the ideas they advance – unlike the causes of war – become noncontroversial.
I think the next such revolution, likely sometime in the twenty-first century, will challenge the economic implications of the nation-state. It will focus on the injustice that follows from the fact that, entirely by chance, some are born in poor countries and others in rich countries. As more people work for multinational firms and meet and get to know more people from other countries, our sense of justice is being affected.
Indeed a likely big wave in the comin' decades.  Any further thoughts?

Rocky Humbert writes: 

Shiller may have gotten this 100% backwards. If my perception of the global and popular mood is correct, then the pendulum may be about to start moving in the opposite direction. The Brexit/Trump meme is the instant when the acceleration of the globalist/intellectual elite/HYP is changing sign. (Stefan can elaborate–but I am unaware of any of these so-called revolutions being wholesale wealth transfers…without bullets flying.)
As a footnote, I am surprised that anyone claims to be surprised by the most recent lewd Trump video–it is entirely consistent with the persona that he projects. In my 30 years on Wall Street, I've heard and seen much much worse. Similarly, the Wiki document dump on Hillary's speeches confirmed the perceptions that her detractors have.
Lastly, someone posted an article about the wisdom of crowds and confidence. And that confident observers (as a group) make the best predictions. I have gone on record and remain confident that Trump will be the next president. I do not share Mark Cuban's belief that this will result in a stock market "crash" — but on the edges, none of this is particularly bullish. The most interesting question for me is whether when Trump wins and if the markets get turbulent, will the Fed blink in December? Given the number of HYP's there, and their collective beliefs…
Back to Shiller. The UN will be the first globalist institution to suffer Trumpture. (Trumpture is the rupture of a bubble by Trump. If the NY Post and Drudge pick this up, I will be most pleased.)
HYP=harvard/yale/princeton. For full disclosure, I'm a Yalie.

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