Syzygeist, the name for this blog, is a made-up word to suggest sudden convergences that you should think about and perhaps act upon. (Look up syzygy for the root idea and think also zeitgeist).
Now after a hiatus from this space to undertake two personal projects - racing my 47-foot ketch Feo from Newport, Rhode Island to Bermuda with my three children, and buying-to-renovate a wreck of a cabin in the woods near NYC - I return to contemplate the world of troubled Europe, politically and economically stalled US and numerous other uncertainties that could change the game for businesses and individuals in short order, and to which various corporate clients (and others) wish to apply their attention.
What to do? If it is a time for "flight to safety," where is safety? (Presumably a house in the woods is one answer, or part of one, but only in extremis.)
Yesterday a client with deep experience in global finance dismissed US Treasuries as any longer a safe haven, calling them instead a crowded trade that is bound to reverse, and reverse violently when the time comes. Interest rates will not stay low forever. What then?
This market is about convergences - of conditions, beliefs, behaviors - and also about instability, or the tendency of things not to stay the same, perhaps radically. Racing to Bermuda provided real examples, with the lead boat smashing the record by 15 hours over the 635-mile course to finish in just 39 hours. Why? A rare and persistently powerful northeasterly gave the swiftest boats perfect conditions for record sailing and we found ourselves for 24 hours in the fastest conditions of our lives to date.
Once in Bermuda, the fleet found a tropical depression forming in the Gulf of Mexico. Those of us needing to return with our boats to US shores had to ponder whether this depression would defy history and come across Florida into the Atlantic, or do what all the prevailing weather models suggested it would do, which was to move north into Texas to be dissipated there.
As it happened, "Debbie" came across Florida - given only a 10 percent chance or less - and did little damage. More to the point it reflected unsettled conditions in weather these days - a jet stream that is behaving uncharacteristically, an Atlantic high pressure system that has not taken its usual position - resulting in more surprise storms than usual, more violence in local weather.
Call it unsettled.
I draw the parallel here between weather and political-economic conditions affecting business and our daily lives. Unsettled is the key word.
We have not previously been in a world where major structural elements have converged as they are now - a troubled and fiscally/politically challenged Europe with rising unemployment; China as the engine of emerging markets facing a possible hard landing; the UK and US both slowing down with apparently limited growth prospects; and, in the case of the US, a political stalement as structural fiscal problems worsen. Will the choice of the next US president be as important as whether the collective political or domestic will addresses the real problems? And will it? Consider the number of other countries where political transitions are imminent, and problems rising.
The implication of unsettled conditions in sailing is often to stay in port or get to a safe anchorage. In our case we believed the weather models and we departed, reasonably certain that Debbie would not catch up to us. And she did not.
Instead, on the second day out, a spontaneous (unforeseen by the "experts") Force 8 gale - winds of 35-42 and waves above 20 feet - set upon us for 20 hours. It had not been part of anyone's model-prediction. Fortunately, our steel ketch is designed for the roughest seas and the crew was able. But the lesson was clear, even if the implications were not entirely so.
When things are unsettled you must be prepared not only for what the models say might happen, but also for what they do not say at all. Unprecedented also implies unforeseeable. Powerful forces converging in new and unexpected ways can create extreme conditions - and you had best be ready for them.
Syzygeist: Unsettled World Hints at Extremes to Come This is cool!
Posted by: Klara | September 28, 2013 at 11:18 PM