Jan

12

Just did some searches and found 6 apocalypse theories for Dec. 21, 2012.

Though they can be judged by many as BS theories, they are not trivial ones, and should have many believers.

A search on Amazon for 2012 yields these popular books.

There are also some analysis from the scientific side regarding likely potential disasters that could happen at any time, including the strengthening solar storms, the earth's weakening magnetic field, the super volcanoes both under the sea and on land, etc. All this strengthens people's belief about the incoming apocalypse.Depressed feelings from world economies will also exacerbate for the belief. Further on that, people's herding instinct will tremendously increase the number of believers.

What is more important is how people think others believe in it, and more, how people think others think others believe in it, and so on. My feeling is that these derivative expectations will be very strong. The two sides (believers and non-believers) will become polarized as we move on in the year, with the believers dominating as we come closer to the date.

Is it reasonable to expect the following for this year and beyond from all this?

1) Ordinary investment assets will have high volatility (due to large fights between believers and non-believers), resulting in a depressing trend (possibly a panicking one) for later part of the year (believers win). This should apply to real-estate, arts, antiques, many commodities, and the overall stock markets.

2) Some consumption will see large increases in both price and volume, including entertainment, pleasure, food-drinks, tourism, transportation, luxurism, exoticism, etc.

3) Related equities and commodities will increase in value, but market will still remain downward biased. Most commodities will face backwardation.

4) Interest rates will likely go up, and banks may face liquidity problems.

5) If the world doesn't end as anticipated, world economy will likely have a big recovery in 2013 as a result of all the 2012 activities.

6) Prices will shoot to new highs starting at the end of 2012 for many assets.

Anyhow, with this stone cast, I beg for the real jade.


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1 Comment so far

  1. Don Chu on January 12, 2012 8:48 pm

    Nice.

    Tossing out a brick to get a jade gem (拋磚引玉／抛砖引玉, Pāo zhuān yǐn yù)

    -Bait someone by making him believe he gains something or just make him react to it (”toss out a brick”) and obtain something valuable from him in return (”get a jade gem”).

    This proverb is based on a story involving two famous poets of the Tang Dynasty. There was a great poet named Zhao Gu (趙嘏) and another lesser poet by the name of Chang Jian (常建). While Chang Jian was travelling in Suzhou, he heard news that Zhao Gu would be visiting a temple in the area. Chang Jian wished to learn from the master poet, so he devised a plan and went to the temple in advance, then wrote a poem on the temple walls with only two of the four lines completed, hoping Zhao Gu would see it and finish the poem. Zhao Gu acted as Chang Jian foresaw, and from this story came the proverb.

    http://en.wikipedia.org/wiki/Thirty-Six_Stratagems

    Apologies, have no precious jade or gem to offer. But note that your second point:

    2) Some consumption will see large increases in both price and volume, including entertainment, pleasure, food-drinks, tourism, transportation, luxurism, exoticism, etc.,

    is already happening in quite a few places around the world, especially in some parts of Asia as recipients of ‘hot money’ inflows or at least, as perceived relative safe havens. And in a perverse sort of way, I actually will welcome your expectation of:

    a depressing trend … This should apply to real-estate, arts, antiques, many commodities, and the overall stock markets.,

    especially here in my little city (Spore). Hopefully, a puncturing of the ballooned-up wealth effect here can rein in the luxury consumption which is currently very blatantly on display here. Too many Porsches, Maseratis and even ‘boy-racer’ GTRs roaring around the neighbourhood at unearthly hours. Just last night, a long line of candy-coloured Gallardos were blocking the entire front street. I shudder to think if this “consumption will continue to see large increase in volume.”

    [One may interpret the ‘recursive’ words above as a little tongue-in-cheek illustration of the non-linearity of the utility function in action.
    :)
    ]

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