The Brains Trust - 2021, page-1713

Markets and sand castles
Wasn't going to post this but after reading @paddington bear week opener it seems appropriate. I love the linking of world markets to a sand castle; just aligns with my "world view" I suppose.

See link below to web site & the pdf .... but for those who cannot be bothered with links here are a couple of take outs that grabbed my attention:

Aftter the pile evolves into a critical state, many grains rest just on the verge of tumbling, and these grains link up into “fingers of instability” of all possible lengths. While many are short, others slice through the pile from one end to the other. So, the chain reaction triggered by a single grain might lead to an avalanche of any size whatsoever, depending on whether that grain fell on a short, intermediate, or long finger of instability.

The problem with long-term macroeconomic stability is that it tends to produce unstable financial arrangements.

Sandpiles 2021; But the fingers of instability, the total credit system, are seemingly growing with more red sand dots every month. All are inextricably linked.

Efforts by regulators and central bankers to prevent small losses actually create the large fingers of instability that bring down whole systems and spark global recessions. And, increasingly, the unfunded liability of government promises will be the most massively unstable finger.

Sand castles and markets

TFTF_Aug_14_2021.pdf