The difference between a depression and a recession;
Depressions happen in real markets with honest currencies. Prices deflate relative to the currency which causes a downward spiral of unemployment and asset devaluation. The currency remains stable, so the depreciation of other assets is more obvious.
Recessions are depressions in floating fiat systems. The currency is immediately devalued so the depreciation of assets is muted, money is printed up and floods the economy, interest rates are suppressed and government spending increases, masking the drop in GDP.
What you get in the first case are hard booms and busts. When the busts are over the bad debt is cleared and the economy can grow. In the second case, you get a muted, soft landing, and plenty to dull the pain.
The price to pay is an ever-increasing national debt that eventually implodes the entire system and threatens civilization itself.
From a blog comment. Rings true.
The Federal deficit (what we put on the credit card) was $1.1 Trillion (HERE)
The INTEREST payment on the debt we already have ($21 trillion) was $316 billion.
We collected, in the form of taxes and fees, $3.7 trillion. So about 10% of what we collect goes to debt service.
C.S Lewis Explains the Best Way to Handle Change
It is this change that English author C.S. Lewis so beautifully explains in his short story, The Great Divorce.
In the story, the hero explores heaven, purgatory, and hell, and meets a few of their respective occupants. During these wanderings, the hero encounters a downright pitiable man who is plagued by a gross lizard that clings onto his shoulder and whispers in his ear. The afflicted man is tired, sad, and frustrated. The lizard is sucking all the life out of him, and he wants it off so badly he’d be willing to undergo nearly anything if only he could knock the thing about a hundred miles away. He must get it off — or die in the attempt.
As the afflicted man thus stands and thinks about his misfortune, a brilliant angel appears and offers to save him. The angel offers to kill that lizard, and thereby free the poor man from his long-endured misery. Of course, the lizard immediately starts feverishly whispering all kinds of fears and doubts into the afflicted man’s ear. Frightened, the man makes the angel promise that, should he take the lizard off, the procedure would not kill him. The angel promises, and so moves to pry off the lizard. The man immediately recoils in terrible pain, shouting that this was far more difficult than he had ever expected, and that perhaps it would be better to pry off the lizard another day. Eventually, the angel persuades him, and the lizard is yanked off the sobbing man with such terrible force that he almost dies. Almost – for he revives a few moments later as a larger, more complete, and much more excellent version of himself.
This, implies Lewis, is the inevitable process of overcoming your fear of change.
It is not the change itself that you fear – it is the transition from Point A to Point B. That transition often appears so fearsome and daunting that the shift (however small) begins to seem deeply humiliating, senselessly painful, and nearly impossible. You become discouraged and afraid. In the meantime, you allow yourself to be lulled into complacency by the gentle whisperings of your own self-doubt. These whisperings are the lizard on your shoulder and should be firmly ignored.
No matter how hard your change is, remember that the reality of your fear is not coming from the change itself, but from the transition and how you approach it.
Will you approach your transitions with patience and courage, or will you allow yourself to be bogged down into inaction by your insecurities and fears?
More on The Great Divorce – HERE
I hope you’ve stumbled upon the podcast series – Slow Burn. It’s a series put out from Slate that digs deeply into historic events in a 7 0r 8 part long-form interview. The production and research value is impeccable. The first series was on Nixon and Watergate and the latest series is on Bill Clinton and Monica Lewinsky.
The series brings you back to the time of Bill Clinton and paints the picture of how lust overtook his life and almost toppled the Presidency. Clearly, Clinton had ambition and a hunt for power but it was his inability to control the lust that haunted him from an early age. His charisma and pure ability to sway a room and a country propelled him to the highest position on earth, the US Presidency. His lust almost took him down.
I remember the news articles and some of the details while they were happening but this in-depth, play by play showed me just how out of control Clinton really was. Should we care is the bigger question. Kennedy was a known philanderer and he didn’t have the same scrutiny. His short 3-year term was focused on his policies and not his personal lives. Clinton hit the history books when the media was evolving into a 24 hour a day news cycle. The 1990’s were the beginning of the internet and America’s hunger for all types of stories. Clinton was caught by the times he lived.
The leap from the independent investigation into Whitewater by Ken Starr to the Monica Lewinsky scandal and the blue dress and the definition of is ..is, has parallels with the Mueller investigation of Trump today. The irony that a young and hungry attorney, Brett Kavanaugh served on the Starr investigative team is not lost on his Supreme Court confirmation hearings of today.
Give Slow Burn a shot, you won’t be sorry.
Find the series HERE or on you podcast feed of choice.
Farming is in my blood. I grew up in a farming community in Wisconsin just outside of Minneapolis. My grandparents ran a beef farm and butcher shop about 3 miles outside of town. Back in the days before the mega grocery store, it was customary to travel to your local butcher shop to stock up on meats and cheeses for the family. That small farm supported 8 kids and over 50 grandkids got the chance to learn what rural America was all about. I’ve dug into this topic before – HERE.
Our small town, New Richmond, had 3000 people and when I was growing up, one stop light. We always lived in town but afternoons and summers were filled with working and exploring on the farm. Even when we moved to Arizona, my sister and I would fly to Wisconsin and live the farmer’s life each summer until my sophomore year of high school. I can’t think of a better way to grow up and that work ethic and willing to chart my own course was instilled in me by my grandparents and uncles on that beef farm.
I’m being pulled back to that life now more than ever. As I get older and reflect on what makes a happy life, I harken back to the long hours and hard work on the farm. In my theory of the 12 negative trends challenging America, chapter/argument #5 deals with the flight to the cities. As America moved into cities an important community fabric was unwoven. We lost the culture of knowing and helping our neighbors. We went further and further away from the family farm down the road that grew our sweet corn or provided our hamburger. My thesis on this argument is that we are social beings by our nature and the move to cities made walling off into our apartments or suburbs easier than ever. As we walled off we disconnected and turned to our government for food, shelter and medical support. We moved away from our neighbors and became dependent on a nameless faceless government. Our war on poverty that was started by LBJ and where we spent $1 trillion dollars has left us 50 years later at the same spot in the number of poor in our society.
I am working to recreate that lifestyle in my hectic world. If it’s only on weekends that I can pretend to have the farmers life of my yesterday I’ll be a happy man.
To give you a sense of the lifestyle and what is lost I recommend the following documentaries found on Netflix or Amazon Prime;
The First Season – Follows a family that just started a dairy farm in upstate NY.
Farmland – shows the transfer of a generational farm told through 4 young adults taking over.
Hannah Ranch – covers the encroachment on ranching in Colorado
Milk Men -The Life And Times of Dairy Farmers
Troublesome Creek – Follows a family struggle and liquidation
Take some time to immerse yourself in these powerful stories. Think about what our society is like with and without these lifestyle businesses. Is bigger better? Is it the government’s job to protect this way of life? These are big questions that I wrestle with and I hope you do as well.
The First Season – Promo
Hannay Ranch Promo
Farmland – Full Documentary
Milk Men – Promo
Troublesome Creek – Promo
What farming was to me:
An American Cardinal rises through the ranks of the clergy, admits to visiting seminaries for homosexual sex, gets removed from all powers by Pope Benedict, ends up in good favor under Pope Francis and gets his power restored. An American Bishop Vigano writes a manifesto that names high ranking bishops involved in the conspiracy publicly exposes all the mess to the world. The sins of LUST, PRIDE and WRATH on full display in the global Catholic faith.
So to give you some context, Cardinal McCarrick of Washington (Cardinal is like a 4 or 5 Star General, the Pope is like the President and Bishops are like Colonels in the military if this helps you better understand Catholic hierarchy), was known to have visited seminaries (priest schools) and engaging in homosexual sexual relationships. McCarrick is the Catholic face in America to the media and to Presidents.
It was known within the ranks of the American and Vatican clergy.
In 2009 or 2010, according to Archbishop Vigano;
But finally, I learned with certainty, …… Pope Benedict (the Pope before the current Pope) had imposed on Cardinal McCarrick sanctions similar to those now imposedon him by Pope Francis: the Cardinal was to leave the seminary where he was living, he was forbidden to celebrate [Mass] in public, to participate in public meetings, to give lectures, to travel,with the obligation of dedicating himself to a life of prayer and penance. (That saction is a big deal for a sitting Cardinal)....
In turn, I repeated them to Cardinal McCarrick at my first meeting with him at the Nunciature. TheCardinal, muttering in a barely comprehensible way, admitted that he had perhaps made the mistake ofsleeping in the same bed with some seminarians at his beach house, but he said this as if it had noimportance. (Wow)The faithful insistently wonder how it was possible for him to be appointed to Washington, and asCardinal, and they have every right to know who knew, and who covered up his grave misdeeds. It istherefore my duty to reveal what I know about this, beginning with the Roman Curia…Immediately after, the Pope asked me in a deceitful way:“What is Cardinal McCarrick like?” I answered him with complete frankness and, if you want, with great naiveté:“Holy Father, I don’t know if you know Cardinal McCarrick, but if you ask the Congregation for Bishops there is a dossier this thickabout him. He corrupted generations of seminarians and priests and Pope Benedict ordered him to withdraw to a life of prayer and penance.”The Pope did not make the slightest comment about those very grave words of mine and did not show any expression of surprise on his face, as if he had already known the matter for some time, and he immediately changed the subject. But then, what was the Pope’s purpose in asking me that question:“What is Cardinal McCarrick like?” He clearly wanted to find out if I was an ally of McCarrick or not.
So lots of commentators — left, center, and right — have chimed in to say that the real cause of the McCarrick disaster is, take your pick, the ignoring of “Humanae vitae,” priestly celibacy, rampant homosexuality in the Church, the mistreatment of homosexuals, the sexual revolution, etc. Mind you, I’m not saying for a moment that these aren’t important considerations and that some of the suggestions might not have real merit. But I am saying that launching into a consideration of these matters that we have been debating for decades and that will certainly not admit of an easy adjudication amounts right now to a distraction.
From: Bishop Robert Barron is an auxiliary bishop of the Archdiocese of Los Angeles
Everlasting life is offered to us sacramentally at every Mass. That is what we believe; that is why we remain in the Church; and that is why we must all bend every effort, from our distinct states of life in the Mystical Body of Christ, to reform what must be reformed so that others may know and love the Lord Jesus and experience the life-giving fruits of friendship with him. The Church’s current crisis is a crisis of fidelity and a crisis of holiness, a crisis of infidelity and a crisis of sin. It is also a crisis of evangelization, for shepherds without credibility impede the proclamation of the Gospel—which, as the other headlines of the day suggest, the world badly needs….
Third, Archbishop Viganò is a loyal churchman of a certain generation and formation, bred to a genuine piety about the papacy. His training in the papal diplomatic service would instinctively lead him to make the defense of the pope his first, second, third, and hundredth priority. If he believes that what he has now said is true, and that the Church needs to learn that truth in order to cleanse itself of what is impeding its evangelical mission, then he is overriding his ingrained instincts for the gravest of reasons.
Let’s be clear: This is an accusation that a pope was personally involved in a sex abuse cover-up, from a former Vatican official who was in a position to know. If anyone thinks media outlets around the world aren’t going to pursue that story with maximum aggressiveness – knowing that bringing down a pope would be infinitely bigger than what the Boston Globe did in 2003 by bringing down Cardinal Bernard Law, winning a Pulitzer Prize and inspiring a Hollywood movie in the process – they’re delusional.
Bishop Vigano has gone into hiding. Power, intrigue, politics, and danger, right out of a novel.
Healthcare – Hospitals are Learning What Doctors, HMO’s and Insurance Companies Already Figured Out. You Lose!
I spent 7 years in the medical industry and according to the Malcolm Gladwell, 10,000 Hour Theory, that makes me someone who can weigh in on the complexity and politics of the healthcare industry. As an entrepreneur, I entered the industry looking for edges, opportunities, and ways to make money in one of America’s largest industries, healthcare.
I did a turn around on a high complexity lab, I built a multispecialty practice from 4 to 14 providers, I started a medical weight loss business and a service company (Rainmaker Medical) that had employees in Phoenix and Tucson and serviced a dozen medical practices. I lobbied and passed bills, I served on hospital merger committees, did a podcast on healthcare policy and started and lead research associations. I was IN the business of medicine. After all my time and experimenting, I learned two important skills;
- How to function in a highly competitive and complex market. American medicine isn’t about Doctors and Patients. It’s about codes and contracts. As a C level business leader in that industry, my business skills were put to the test. I learned a lot about a super complex industry.
- When to hand up the saddle and move on. I could see the end of my run in medicine coming when regulatory blocks kept coming as fast as I could come up with a new idea.
When I was in the industry from 2008 t0 2017 the big player that controlled everything was the hospitals. The power structure had shifted in America from the Doctors to the Executives and the HMO’s in the 1990’s (remember $5 co-pays?), then over to the evil insurance companies who got their lunch handed to them with the passage of Obamacare. After 2010, the hospitals held all the cards and now it looks like they will be the next losers in politics of healthcare. Notice, in this long list of power brokers, the consumer is nowhere in site.
The solution? Stay healthy. As long as the power structure exists between the government and the industry the service will suck. Not until the power is between patient and doctor returns will anyone like what’s happening to them when they need help.
In a phone interview with Bloomberg, Malhotra warned about the next wave of hospital closings that could be triggered in the next 6 to 18 months.
They “are getting eaten alive from these market trends,” Perlman cautioned.
“Future M&A options could be too late – buyers may hesitate as debt-laden operators like Community Health Systems Inc. and Tenet Healthcare Corp. focus on selling underperforming sites to reduce leverage,” Morgan Stanley’s Zachary Sopcak said.
Some facilities are restructuring as outpatient emergency clinics with free-standing emergency departments. “Microhospitals,” or facilities with ten beds or less, seems to be gaining a foothold across the country. They have been springing up as of late in multiple states, including Texas, Colorado, Nevada, and Arizona. Dignity Health, a health system with facilities in Nevada, Arizona, and California, is also considering the possibility of testing the model in California, Kaiser Health News reports.
As for the incoming wave of hospital closures that Morgan Stanley expects to hit in the near term, well, it is more bad news for rural America that seems to have been left out of the “greatest economy ever.”
I saw this one coming when Elon Musk tried to grab the world’s attention during the cave rescue in Thailand. I remember watching the twitter war with one of the rescue teams and thinking, ‘why doesn’t this guy just focus on delivering his cars?’. Forbes nails the core of the Musk and Tesla issue. As I thought of the unravel of Musk I contrast him with Richard Branson or Bill Gates. Both men that have danced close to the sun. Branson using earned publicity and Gates because he’s held the title of Worlds Richest Man for 20 years. Both appear to me to have spent a lot of time focusing on their egos, gaining wisdom and not buying into their press clippings.
America loves a hero story and we love to tear them down. Musk looks like he’s in tear down mode right now but he’ll overcome. I’m actually rooting for him and I’m hoping he’ll learn a valuable lesson about ego and vulnerability. As a CEO and Entrepreneur, I’ve learned that I’m no more than one ego step away from a similar mistake. I’ve fallen and I keep getting up and always keeping the lessons of the fall, front and center.
What Visionaries, Entrepreneurs, CEOs And All The Rest Of Us Need To Learn From Elon Musk
There are two big lessons from the vulnerabilities Elon Musk revealed in today’s remarkable New York Times interview:
- We all need to grow up (and I’m not talking about Musk here).
- Everyone, including visionaries, heroes, entrepreneurs and CEOs, needs to be aware of his vulnerabilities (which everyone has) and, with that knowledge, take specific, relevant, concrete actions that protect both himself and his business.
Musk was extraordinarily emotional and vulnerable in the Times’ interview. He described the past year as emotionally excruciating. He talked about an almost inconceivably grueling schedule of overworking and under-sleeping. His judgment and self-control have been questioned after he insulted analysts for their “boring and bone-headed questions” and especially after he posted an enormously consequential tweet on August 7 that rocked the market—referring to the possibility that he would take Tesla private. I agree with the Times’ assessment that he showed an “extraordinary level of self-reflection and vulnerability” in the interview.
We all need to grow up
There’s another reason too. Musk is larger than life. He believes in the miraculous and sometimes delivers it. In a recent insightful and compassionate opinion piece, Kara Swisher wrote that “Silicon Valley needs its complicated gods.” That role, she says, was filled by Steve Jobs for a long time and, with his death, Elon Musk was cast into that void. Swisher writes that all legendary makers of important things share a proclivity for “creative destruction.”
It’s not just Silicon Valley that needs gods and heroes. We all do. And we all engage in creative destruction, punishing them for being merely human, for being arrogant, or confused, or disappointing us, or failing or not being sufficiently god-like.
This response to heroic figures reflects a universal process that occurs in human psychological development. As children, we start out seeing our parents as omnipotent and omniscient. We need that illusion in order to feel safe in the world because, since we are still kids, we’re not yet able to feel secure in our ability to shape events. Gradually, we’re disillusioned, as we painfully become aware of their flaws and inadequacies. Any parent of an adolescent has been the brunt of the anger that this disillusionment evokes. Teenagers replace their now de-idealized parents with other heroes—rock stars, sports stars, remote figures whose human flaws can be overlooked.
Maturity requires building the capacity to recover from that angry disillusionment and regain the capacity to admire people but accept that even the most remarkable and competent are also human.
Another universal psychological phenomenon becomes relevant here. As humans, we all have the capacity to regress—that is, to slide back, temporarily, to earlier stages of psychological development and functioning. And regression is most likely to occur under times of stress or fatigue. I’d argue that there’s a group psychology phenomenon going on. We live in a time of intensified stress and terrible uncertainty. We often have a diminished sense of our ability to shape events. So, we are more in need of heroes and saviors, as we were as children, and we’re also more likely to attack them when they disappoint, as we did as adolescents.
Musk is the omnipotent-seeming hero. I live in Chicago. He came here two months ago and promised to build a super high-speed tunnel to get us all to the airport! It was thrilling. No more slogging through crushes of traffic on I-90! No more planning an extra hour in case things really just stop moving! Musk magic will zip us painlessly and reliably at 100 miles per hour under the city to catch our flights!
Let’s all grow up and try to accept that our heroes are human. Maybe that tunnel will never be built, but I sure love the idea that visionary provided.
Even heroes and CEOs need to attend to their human needs
Reading the Musk interview didn’t make me want to put on my psychiatrist hat. As Swisher wrote, “Mr. Musk’s mind and ideas are big ones.” And he’s not crazy, but he sure seems human. The interview, however, did make me want to put on my mom and doctor hats, and insist on these cautions for even the greatest leader and visionary:
- You can’t function without sleep.
- You can’t function without breaks.
- Trust a couple of people. You have to find someone you can trust to step in for you and do your job well enough, so you can sleep and take breaks and see your kids and take vacations. You also need to have a trusted advisor to talk to when you’re uncertain or overwhelmed. And you need someone you trust who can tell you to stop when you should stop. That’s at least three people to trust.
- There will be times you can’t function at your best—these come for everyone. Learn to recognize them and find the discipline to not make critical decisions or take consequential actions until you’re back to your usual excellent baseline of functioning.
- Have a primary care doctor and see her at least once a year. And listen to her advice.
- Protect yourself from an overload of information, especially meaningless negative and cruel comments about you from strangers.
- Don’t forget to eat and hydrate.
Prudy Gourguechon is a psychiatrist and psychoanalyst who advises leaders in business and finance on the underlying psychology of critical decisions. For more visit www.invantageadvising.com.