21 random learnings for a very random 2021

1
there’s mounting evidence that insects can experience a remarkable range of feelings. They can be literally buzzing with delight at pleasant surprises, or sink into depression when bad things happen that are out of their control. They can be optimistic, cynical, or frightened, and respond to pain just like any mammal would
[source]

2
The right brain is in charge of present-moment awareness, and this is the part of the brain that meditation takes to the gym. Essentially, the longer we meditate, the more we’re able to balance the right and left hemispheres of the brain. The result of this is more attention, awareness, and computing power for the task at hand.
[source]

3
When the new individual was of the same gender […], the subjects sniffed their own shaking hand twice as much as before. In contrast, after handshakes across different genders, subjects more than doubled the amount of sniffing they did of their own nonshaking hand
[source]

4
The life of every individual, viewed as a whole and in general, and when only its most significant features are emphasized, is really a tragedy; but gone through in detail it has the character of a comedy. – Arthur Schopenhauer

5
We settled things with our only two neighbors – Canada and Mexico – well before our first centennial and immediately got down to the more serious business of arguing amongst ourselves. More Americans died in the Civil War than in all our military conflicts with all our adversaries throughout all our history, combined
[source]

6
When you ask a stranger a personal question, you make that person happy. Your question relieves the stress of awkward silence and gets the conversation moving. Best of all, it signals that you have interest in the stranger, which most people interpret as friendliness and social confidence…
[source]

7
That is [the critic’s] real evil. Not that we believe them, but that we believe the Resistance in our own minds, for which critics serve as unconscious spokespersons. The professional learns to recognize envy-driven criticism and to take it for what it is: the supreme compliment. The critic hates most that which he would have done himself if he had had the guts.
The War of Art, Steven Pressfield

8
In lake of some reptiles, when they overpopulate it and there is a surplus of refuse, there is trigger in nature: a monster is born to them. A lizard many times the size of a normal one is born, who deals out destruction and culls the lake.
[source]

9
Ask a wage slave what he’d like to accomplish (when he retires early or wins the lottery).
Chances are the response will be something like “I’d start every day at the gym and work out for two hours until I was as buff as Brad Pitt. Then I’d practice the piano for three hours. I’d become fluent in Mandarin so that I could be prepared to understand the largest transformation of our time. I’d really learn how to handle a polo pony. I’d learn to fly a helicopter. I’d finish the screenplay that I’ve been writing and direct a production of it in HDTV.”
[source]

10
Our conventional sense of self is an illusion; positive emotions, such as compassion and patience, are teachable skills; and the way we think directly influences our experience of the world.
[source]

11
The trials of twenty-two former Auschwitz officers had revealed a common personality type: ordinary, conservative, sexually inhibited, and preoccupied with bourgeois morality. “I do think that in a society that was more free about sexuality, Auschwitz could not have happened”
[source]

12
Once you take this far enough, you enter a cycle of accelerated returns in which the practice becomes easier and more interesting, leading to the ability to practice for longer hours, which increases your skill level, which in turn makes practice even more interesting. Reaching this cycle is the goal you must set for yourself
-Mastery by Robert Greene

13
We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient. – Jeff Bezos

14
Bitcoin, the asset, is likely crossing into the early majority while Bitcoin, the network, is on the cusp of moving from innovators to early adopters. So, overlapping the two, Bitcoin, overall, is still early in its adoption curve, likely somewhere in the early adopter phase
[source]

15
Both versions of tea come from China. How they spread around the world offers a clear picture of how globalization worked before “globalization” was a term anybody used. The words that sound like “cha” spread across land, along the Silk Road. The “tea”-like phrasings spread over water, by Dutch traders bringing the novel leaves back to Europe.
[source]

16
Pixar storytelling guide
Trying for theme is important, but you won’t see what the story is actually about til you’re at the end of it. Now rewrite.
Simplify. Focus. Combine characters. Hop over detours. You’ll feel like you’re losing valuable stuff but it sets you free.
Why must you tell THIS story? What’s the belief burning within you that your story feeds off of? That’s the heart of it.
No work is ever wasted. If it’s not working, let go and move on – it’ll come back around to be useful later.
[source]

17
If we’re all the average of the five people we spend the most time with, then the only way to remain a true believer in a seemingly impossible goal is to spend all of your time with other true believers
[source]

18
But what the world has shown in the last year is the opposite […] We’re willing to permanently give up our livelihoods, friends, and freedom, slowly and passively falling into the “new normal”, without really much of a second thought.
[source]

19
Rather, he finds it was the 13th-Century response of Benedictine monks to the devotion: Never become idle. Sure enough, the clock proved the perfect machine to keep us busy. And if not achievement enough, Benedictines had a correspondingly swell idea that would come to dominate our planet–connecting a daily schedule of activity to the clock.
[source]

20
History weighs heavily on Mr Xi, who keeps mentioning the Soviet collapse. He is waging a campaign against what he calls “historical nihilism”—that is, any grumbling about communism’s past. One Soviet leader, Nikita Khrushchev, is held up as the archetypal nihilist for denouncing Stalin’s brutality in 1956. That event haunts Mr Xi. Party literature says it led to the Soviet Union’s demise. Much of Mr Xi’s energy is focused on making sure the party learns the Soviet lesson. Mao must remain a saint.
[source]

21
By one estimate, in a given ant colony, three percent of the ants are workaholics and never stop, about a third seem to do absolutely no work at all, and the rest work some and slack some
[source]

Notes and quotes from Joyce Carol Oates’ Masterclass on “Art of the Short Story”

Hello world!

I recently finished Joyce Carol Oates’ Masterclass on short story writing. It is a short course and there’s a cool workshop segment at the end where she critiques the short stories of two students.

Here’s a collection of my notes from the lessons, much of it paraphrased

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NOTES

It’s about translating instinct into craft
So that instinct… if you feel like you’re a writer, you probably are

Everyone has a fantastic story to tell – and it’s often a mystery story

Writer as photographer, you have a magic camera, and with lens you can see the subject, and the camera is your writing

Characters generate the plot

Why is this character there? If you can’t explain them, then you should get rid of them

If it’s just a few characters, then it’s a short story. But if it’s a theme / larger world / political or sociological, then a novel is better

Short story is meant to be read in one sitting

“Burn through the first draft”

Orwell believed prose should be like a window, very clean
Faulkner, Hemingway were more interested in the language of a story, the “how” of the telling

“Your worst enemy will have the most beloved face” – whether a child, a dog or cat – someone you can’t say no to (the constant distractions)

She started writing around 14, and working with others at 19

Doesn’t recommend writing a novel if you’re a beginner – it’s important to learn how to finish your work
If you write a novel and take 20 years, your whole life will have a cloud over it
Need the psychological uplift from finishing something

If you get rejected, it means that if it was published it may not have been that good – sometimes you’re very lucky if your first novel is rejected (like James Joyce)

recommends writers keep journals because it’s intimate and private, keep in contact with innermost self
she’s kept journal since 18, she adds dialogue, impressions of places and things that happened

try different ways of writing:
-start writing when you only have 40 minutes
-write when you feel very tired
-next morning look at it, might be really worthwhile

she takes tons of notes, for a novel it can be 200 pages (!)
transcribes notes to laptop, adds them into scenes
has checklists of things, if things aren’t used, she can use them for future stories

critics told her she should leave the “social unrest” / “big novels” to Norman Mailer
she was never interested in what’s expected of women writers, the “domestic novel”
she wrote a lot about domestic abuse, wife battering

her father was almost killed because he wanted to try to help a neighbor suffering domestic violence

Oscar Wilde’s Dorian Gray is a novel about taboo, couldn’t express his homosexuality, uses the novel

most powerful writing comes from repressed, each taboo subject has a natural audience who have no outlet
memoirs on such subjects are astonished at the number of readers, eg, about alcoholism, obesity, bulimia
William Styron on depression – had no idea it would be that successful, he just felt a total failure
“secret audiences”

**only rule: “Don’t be boring”

bestsellers move fast, short and declarative sentences

writers want to write their family story, their ancestors, their generation

she memorized alice in wonderland as a kid, deeply imprinted
she thinks about it every day of her life
it’s playful, funny, subversive – inspires her writing

interview your own mother, she was astounded when she did this
found out she was given away at 9 months old to an aunt and uncle

wishes she’d also interviewed her grandmother before she passed

try not to exploit other people, never hurt other people (doesn’t think what philip roth did, writing about women he knew, was the right way)

“an unsolved mystery is a thorn in the heart”

take the earliest memory you have, try to evoke it and write it powerfully

Robert Frost: poetry is melting ice on a hot stove

beginning writers should write mini narratives, a paragraph, the shorter the better

really good acting is also an arc of emotion

theater is monologue, eg, Hamlet

good to be young and write an old person’s perspective, or vice versa, or men writing from woman’s PoV, it gives you more objectivity, and is a growing experience

Where are you going, where have you been? is one of her most popular stories, gets questions daily about it
a cautionary tale
based on true story, man who pretended to be a teenager, one by one he was murdering girls he met at the mall
some teens knew, but they didn’t tell anyone, they protected HIM. why?

take your old writing, take 3rd person and make it 1st person, or make past tense into present tense / historic present – this can completely revitalize prose

read from stratosphere to draw upon your mentors / influences

what you read and what intensity will determine how you write

for example, take a summer to read James Joyce – as the weeks go by, your vocab will improve, your language will elevate, etc

Hemingway’s novels are good, but short stories are where he was a master

readers only care about the characters — even though the writer spends so much time on the formal qualities

Hemingway says literature is an iceberg, all his short stories – what’s under the water is implied
Characters don’t have back story, move very quickly – feeling of modernism

for new writers often the story might be too subtle
workshops are helpful in this way, participants are like editors

writers are cooks – keep unused material in fridge, put it later in the casserole

better to have deadline, and readers, talk and revise
more “aerated” instead of isolated

really likes having a window to look out, a garden, natural world outside the window
“i don’t know what i’m gonna see out the window, and that’s part of writing”

hates only having a wall to stare at

think excitedly about what you’ll be working on – something surprising, novel, shocking will happen before noon – and no one will know about it but you

if you write one brilliant short story a year, that’s great!
if you write one novel at all, that’s great too

Tyler Cowen: Default state through history is confusion about what is money

Tyler Cowen was recently interviewed by Lex Fridman and the conversation was great since Tyler’s usually asking the questions. This time we got to hear all his answers in their full glory and they were glorious. All notes below are paraphrased:

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What matters more than the type of capitalism is how good is your legal system / rule of law

He expects a global catastrophe in the next 700-800 years, something the scale of a nuclear war, simply a function of probabilities (there will be more Hitlers)

Default state thru history is confusion about what is money / moneyness

Fiat currency already works really well

Bitcoin could be worth $1M as long as people agree. But it’s unlikely to be money. More a collectible / gold. Ethereum has a better but still low chance

WSB (and retail yolo in investing) is a new brand of esports

Diversity talk has become a new mechanism for enforcing conformity

“Printed money was the painkiller. Unfortunately, we are now addicted to the pain medicine.”

Maybe once a month, I read something that I feel is a sneak peek into the future.

Greg Foss’s pdf on CDS and bitcoin is such a thing.

If you are interested at all in: macro, stocks, crypto, bitcoin, sovereign individual, investing…then this paper is well worth your time. Some of the terminology and concepts are complex, but he does as good a job as anybody of explaining them in clear and simple terms.

Below are a few highlights to give you a taste (all copied verbatim):

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My experience with insolvent money centre banks in 1988 would be re-experienced in 2008/2009 when Libor rates and other counterparty risk measures shot through the roof PRIOR to equity markets smelling the rat.

Asymmetric trades define careers, and ABCP was the best asymmetric trade versus risk, I had seen up until that point in my career. But Bitcoin is a better trade than ABCP, in my opinion. Bitcoin is the best asymmetric trade I have ever seen.

The global response to the Covid pandemic has ensured that our kids’ futures are doomed to eternal Fiat currency debasing. Again, simple math.

Fiats are worthless, yet they have “subjective value” today. However, they are programmed to debase. Bond investors are really just a “derivative” to this reality. Choose your SoV wisely. Think physics and math and code.

Secondly, if the common equity pays a dividend, this dividend is NOT a FIXED income instrument. The dividend is NOT contractual,

The shape of the yield curve is a subject of great economic analysis, and in an era when rates were not manipulated by Central Bank interference, the yield curve was useful in predicting recessions, inflation, and growth cycles.

Almost all government debt, from the same borrower ranks parri passu, that is to say, there is no priority of claim within the debt structure of governments because there is no subordination and no equity.

Interest rate risk and inflation risk are synonymous. Both have been declining for my entire trading career. That is because over the last forty years, the general level of interest rates (YTMs) have declined globally, from a level in the early 1980s of 16% in the USA, to today’s rates of close to zero, or even negative in some countries.

When G-20 government balance sheets were in decent shape, and operating budgets were balanced, and accumulated deficits were reasonable, the implied risk of default by a government was almost zero. That is for two reasons. Firstly, their ability to tax to raise funds to pay their debts. Secondly, and more importantly, their ability to print Fiat money.

…the turmoil in the (Great Financial Crisis) essentially transferred excess leverage in the financial system to the balance sheets of Governments. The can was kicked to the Govies. Printed money was the painkiller. Unfortunately, we are now addicted to the pain medicine.

In many cases, if you were to line up the operating cash flows of the government and its leverage statistics compared to a BB corporate, the corporate would look better.

Contagion in the bond market is much more pronounced than in equities. For example, if provincial spreads are widening on Ontario bonds, most other Canadian provinces are widening in lockstep, and there is a trickle- down effect thru bank spreads, car paper spreads, high grade corporate spreads and even to junk spreads.

It was rumoured that one of the main reasons the Fed stepped into the credit markets to be able to buy HY debt in 2020, was due to the impending downgrades of four very large IG borrowers who are on the cusp of crossing over (to the dark side?). General Motors, Ford, AT&T and GE have cumulative debt that is larger than the entire HY market.

When Central Banks decide to intervene in the equity markets to stabilize prices and reduce vol, it is not because they care about equity holders, it is because they need to stop the negative feedback loop and its ultimate impact on widening spreads and the seizing of credit markets. Remember, Credit is a dog. Its tail is the equity markets.

“Communism only works until you run out of other people’s money” – Margaret Thatcher

Credit concerns will overwhelm inflationary concerns, particularly if the deflationary impact of technological advances continues. However, technology does NOT solve credit risk in sovereigns/Fiats.

“Fulcrum Index”, an index that calculates the cumulative value of CDS Insurance on a basket of G-20 Sovereign nations multiplied by their respective funded and unfunded obligations. This dynamic calculation could form the basis of a current valuation for bitcoin (the anti-Fiat).

I believe Bitcoin is the best asymmetric trade I have seen in my 32yrs of trading, and why I believe EVERY fixed- income investor needs exposure to Bitcoin in order to reduce portfolio risk.

Liquidity is best defined as the ability to sell in a bear market.

According to the Institute for International Finance, in 2017, Total global debt / global GDP was 3.3X. Global GDP (then US$67Trillion) has grown a little in the last three years, but Global debt has grown much faster. I now estimate that the debt/GDP ratio is over 4X. At this ratio, a dangerous mathematical certainty emerges. If we assume the average coupon on the debt is 3% (likely low), then the global economy needs to grow at a rate of 12% just to keep the tax base in line with the organically growing (the coupon obligation) debt balance. This does not include the increased deficits that are contemplated for battling the recessionary impacts of the covid crisis.

The Federal government has over US$25Trillion in outstanding debt. According to Jeffry Gundlach, it also has US$157T of unfunded liabilities in Medicare and Medicaid obligations.

Others will argue that bitcoin is too volatile. I quote Bill Miller, “Volatility is the price of return”. No Vol, no return. And finally, given its asymmetric return distribution I believe “It is more risky to have zero exposure to bitcoin than it is to have a 5% portfolio weight. If you are not long bitcoin, you are irresponsibly short”.

The tipping point (or Fulcrum point) for that event is when bitcoin is adopted as a global unit of account for the trade of energy products. When oil, natural gas and electricity are priced in bitcoin, bitcoin will supplant the USD as world reserve

Secondly, sovereign credits do default even though they can print money. Remember the LDC crisis in 1988. Or Venezuela in 2020 where Fiat is shovelled to the curb as garbage.