Albert Einstein on learning and knowledge

The more I learn, the more I realize how much I don't know.

~ Albert Einstein

Katniss Everdeen on fragility

It must be a fragile system if it can be brought down by just a few berries.

~ Katniss Everdeen, Hunger Games (written by Suzanne Collins)

George Orwell on the importance of history

Who controls the past controls the future. Who controls the present controls the past.

~ George Orwell, 1984

George Orwell on the corruption of language

But if thought corrupts language, language can also corrupt thought.

~ George Orwell, 1984

George Orwell on doublethink

Doublethink means the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them.

~ George Orwell, 1984

George Orwell on dedication to truth

Being in a minority, even in a minority of one, did not make you mad. There was truth and there was untruth, and if you clung to the truth even against the whole world, you were not mad.

~ George Orwell, 1984

Daniel Kahneman on hindsight bias

The core of hindsight bias is that we believe we understand the past, which implies the future should also be knowable; but in fact we understand the past less than we believe we do – compelling narratives foster an illusion of inevitability; but no such story can include the myriad of events that would have caused a different outcome.

~ Daniel Kahneman, Thinking Fast and Slow

Kevin Duffy on the worst Christmas eve stock market day in history

Visions of Sugar Plums

‘Twas the night before Christmas, when all through The Street 

Not a broker was stirring, not even a tweet; 

The stockings were hung by the chimney with care, 

In hopes that St. Nicholas soon would be there; 

Investors were nestled all snug in their beds,

While visions of sugar highs danced in their heads;

From a ten-year bull market, whose gifts did accrue,

A correction had come, from out of the blue;

Their 401(k)s had taken a hit,

Yet Cramer refrained from pitching a fit;

Trade wars and shutdowns and too much QT,

The weight of it all was no cup of tea;

From Bernanke and Yellen, they were all spoiled,

Now thanks to Jay Powell, their diapers were soiled;

The Fed was their friend, to stocks it did boost,

Had 8 years of ZIRP come home to roost?

I tossed and I turned, and went into a sweat,

Ghosts of bubbles past, I could not forget;

“Stocks for the long run” and “just buy the dip,”

Should I double down now, or abandon ship?

We just need the big guy, all trim in his beard,

Six trillion in stock wealth has just disappeared!

When out on the lawn there arose such a clatter, 

I sprang from the bed to see what was the matter.

When, what to my wondering eyes should appear,

But a miniature sleigh, and eight tiny reindeer, 

With a little old driver, so lively and quick, 

I knew in a moment it must be St. Nick. 

More rapid than algos his tickers they came, 

And he whistled, and shouted, and called them by name;

“Now, Facebook! now, Netflix! now, Salesforce and Apple! 

On, Tencent! on, Tesla! on, BABA and Google! 

To the up of the trend! to the top of the chart! 

Now dash away! dash away! Make me look smart!” 

As I drew in my head, and was turning around, 

Down the chimney St. Nicholas came with a bound. 

He was dressed all in fur, from his head to his foot, 

And his clothes were all tarnished with ashes and soot; 

A bundle of toys he had flung on his back,

And he looked like a peddler just opening his pack.

 

He spoke not a word, but went straight to his work, 

And filled all the stockings; then turned with a smirk;

He wolfed down my cookies and crumpled my note,

He grabbed some spare change and tossed in his coat.

He cleaned out the fridge and clawed at a wreath,

In the light of the moon, I could see his sharp teeth;

As he gave me a wink, to my great surprise,

It wasn’t St. Nick, but a bear in disguise.

Bank of Canada governor: "Our fundamentals are quite solid"

The Canadian economy begins the new year in solid shape. Our fundamentals are quite solid.

~ Stephen Poloz, Bank of Canada governor, interview with CTV news, December 20, 2018

Jim Grant is asked about Fed chairman Jerome Powell's press conference and stock market's negative reaction

Grant: I don't think it's a matter of communications policy.  I think it's a matter of substance.  To me, the clear and present risk is the consequences - unintended though they may be - of ten years of suppressed and distorted interest rates with the attendant distortions in both the so-called real economy and especially in the financial economy where leverage has been piled upon leverage.

CNBC: So this is inevitable, this kind of negative reaction.

Grant: Certainly after ten years of the lowest interest rates, literally in the 3,000 years of recorded history.

CNBC: We get that you didn't agree with the policy before, but right now are they making a mistake?

Grant: It's not a question of agreeing with it.  The consequences of ten years of distorted interest rates are things that we can't always see, but which are nonetheless there.  For example, the distortions of the leveraged loan market with fine print that's supposed to protect investors has been eviscerated or written down.  Green investments proliferate because there are no interest rates.  Interest rates are meant to measure risk, discount future cash flows and set investment hurdle rates.  When those things are absent or distorted, decisions in real time - real things - are not as they might be.  And exactly what is wrong is revealed in time.  Now, the stock market is a forward looking indicator.  The economy is not a forward looking indicator, right?

~ Jim Grant, interview on CNBC, December 19, 2018

Charles Mackay on learning from the mistakes of the past

Let us not, in the pride of our superior knowledge, turn with contempt from the follies of our predecessors. The study of the errors into which great minds have fallen in the pursuit of truth can never be uninstructive.

~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

Vaclav Havel on hope

I am not an optimist, because I am not sure that everything ends well. Nor am I a pessimist, because I am not sure that everything ends badly. I just carry hope in my heart. Hope is the feeling that life and work have a meaning. You either have it or you don't, regardless of the state of the world that surrounds you. Life without hope is an empty, boring, and useless life. I cannot imagine that I could strive for something if I did not carry hope in me. I am thankful to God for this gift. It is as big as life itself.

~ Vaclav Havel