If . . . Then . . . The Two Words That Allow You To See The Future

“And so, Arthur, we learned that gambling is bad and yet in a certain sense, isn’t life itself a gamble?  You can never be sure of anything.  Like who would have thought that dolphins could go bad and that fish were magnetic?  Not me, no sir, not me.” – The Tick (Animated)

coyote

But you were expecting the Spanish Inquisition?

Nassim Nicholas Taleb is most famous for his 2007 book The Black Swan:  The Impact of the Highly Improbable.  It’s a great book – I wish as many people read the book as bought it.  Then they might have at least understood why home prices plummeted faster than California’s self-respect in 2008-09.  Heck, if people would just retain a little bit of this book after they read it, they’d be better off than most MBAs.  The title of the book comes from Taleb describing Europeans touching down in Australia, and seeing something that they never thought possible:  a black swan.  All European swans are white.  Therefore?  All swans are white.

Until you see a black one.

Taleb defined his “Black Swan” events as having some important characteristics:

  • Black Swans are extremely rare. Standard techniques (like normal probability distributions) will never predict them.
  • Black Swans have huge consequences.
  • Everybody looks at the Black Swan event (after having gone through it) and concluded it was obviously going to happen.

I’ll throw out one other idea to mix with Taleb’s Black Swan concept – this one was from James P. Hogan’s wonderful 1982 book (that Hogan says helped topple the Soviet Union, and he might be right – LINK) Voyage from Yesteryear.  In this book, Hogan has a character talk about the difference between a phase change and a chemical reaction.  When you freeze water or melt ice, it’s just undergoing a phase change.  Warm the ice up, and you get water.  Make the water cold enough, and it’ll change back.

Phase changes are simple and reversible.  It’s only a matter of energy.  But burn a piece of paper, and like the girl you had a crush on your freshman year in high school?  It’s never coming back.  Burning the paper is a one way trip.  It’s a chemical reaction that you can’t reverse.  Or a restraining order in the case of the girl.  It turns out they don’t like you standing outside of their house holding a boom box over your head in real life.

CUSACK

In real life, John Cusack blocked me on Twitter®.  I probably deserved it.  I just wanted my two dollars.

Changing the guard from Republican to Democrat and back to Republican is a phase change.  Same stuff, different day.  But the American Revolution?  That was a chemical reaction – after the war we could never go back to being British subjects – the ideas of independence, freedom, and self-governance were too firmly rooted.  9/11 was another phase change.  Despite W’s desire that we “go on as normal” we never have been normal again and conventional ideas of privacy, freedom, independence, and self-governance are dead.

Oops.

All Black Swans are chemical reactions – they are irreversible, even though people expect a return to the “way things were” it never happens – you can’t unburn the paper.  The change is a one-way event.  In one (for me) particularly striking story in The Black Swan, Taleb wrote that his relatives from Lebanon were still waiting for things to return to normal, even though it had been thirty years since the war had ripped Lebanon apart.  No, they weren’t crack dealers, and they weren’t alone.  Even as late as 2012, 76,000 people were displaced within Lebanon, waiting for things to get back to normal.

Wuhan Flu, COVID-19, is a Black Swan.  It’s not quick and immediate like Pearl Harbor or 9/11 or the Great PEZ® famine of 1986.   This Black Swan is unfolding in slow motion across the economy and the world.  When this is studied in classes in fifty years, the students will think it happened all at once, rather than unfolding, day-by-day over the course of a year.  In a week, we’ve gone from business as usual to shutting down restaurants.  It’s the new normal.  And yes, I said a year.  We’ll be lucky if it doesn’t last a decade.

waterloo

A woman born at the beginning of the French Revolution would have already had kids by the time Napoleon was booted off stage permanently after Waterloo.  But history teaches it like it happened during the two minute warning at a football game.

As I’ve written about before, the economy is facing a crisis that’s at least twice as big as the 2008 Great Recession.  The stage was set beforehand for a phase change – from functioning economy to recession and then back again.  Trump had really juiced the economy in an unusual way:  clearing out regulations.  Sure, he pumped money back via tax cuts, but those tax cuts were targeted toward non-millionaire types and businesses.  This was, perhaps, the most wholesome way to grow the economy – by people making money rather than by government choosing who got to win.  Bernie, I’m talking about you.

In due time, we would have had a recession anyway.  Probably a big one, since the economic expansion has been going so long.  But just like Wuhan isn’t really the flu, this economic upset really isn’t a recession – it’s far worse.  Dow® 8,000 or less isn’t out of the question on the downside.  Really.

It’s that bad.

The government is going to take unusual actions.  I mean, more unusual than usual.  Today, it was floated to just start writing checks to most people.  “Millionaires” were excluded.  Free health care will come on the table soon enough.  We haven’t even scratched the surface of what’s going to happen.  And we will never go back to the way things were.  This isn’t a phase change.  Like a board game that you let a toddler open, things just won’t go back in the box the same way, ever, and all of the pieces are covered in cookie/saliva mix.

TODDLER

Honestly, I don’t miss toddlers, what with them trying to poison you or cut your brake lines or eating all the Cheeze-Its®.

Once upon a time, I got paid to think about disasters as a short time gig at a company I was working for.  It was a lot of fun.  I researched probabilities of things like civil wars and floods and tornadoes and visits from my ex-wife demonic manifestations.  My life for those months included a LOT of surfing of doomer porn sites and thinking about how the world could go to hell.  So, I guess that makes me sort-of a retired professional doomer.

And my thinking pattern developed a rhythm . . . If (generic disaster) happened, Then (outcome).

It was thinking about the outcome that was the most fun.  If a tornado hit the headquarters, Then what?  Well, based upon the statistics that I could find, it was an average wait of 500 years for a tornado to hit any given spot in the geographic region of the HQ.  Even for someone as old as Ruth Buzzi Ginsburg, that’s not very often.  I tracked down and tried to figure out how much money the company would lose if it got hit by a tornado, volcano, hurricane and earthquake all on the same day – a Torcano Hurriquake™.  After researching with every department, it was concluded that we might not be able to collect on a few hundred thousand dollars’ worth of payments that people owed us.  As this company was a multi-billion dollar company where the executives had BMWs® that were designed to stop an RPG strike, that was less than the company spent on Featureless Grey Wallpaper® in a year.

BONUS

Hey, everybody who thinks exactly alike gets a bonus, right?

They didn’t think it was funny when I told them that a Civil War was 10 times as likely as a natural disaster shutting down operations.  When I showed them the math, they couldn’t argue, but they weren’t happy.  They didn’t like it even more when I pointed out that they could afford to spend about $100 a year in disaster prep – most of their systems already had offsite backups.  And no one was even slightly interested in shooting RPGs at the executives.

What the executives were interested in was things that they were used to, floods.  Torcanos. Hurriquakes.  Civil War?  I’m not sure I even brought up a pandemic, but they would probably have looked at me like I had six eyes.  “Just not credible.”

No Black Swan event is credible when you try to describe it to someone who is stuck in thinking normally.  Just like Taleb’s relatives looking for stability in Lebanon or me wondering when TSA will stop fondling my man parts, it’s not going to happen.  But describe trying to get on a flight in 2020 to an American in 1995?  They’d think it was a silly science fiction story.  If only we could convince the TSA to fondle Lebonese?

Which brings us back to COVID-19.  How do you discuss it with someone who is stuck thinking normally?  It’s difficult.  Their minds aren’t even playing in the zip code as people who prepare.  But even to them, it is undeniable that things have changed.  They just don’t realize it’s like herpes:  forever.

When I went to school, school lunches were something to be avoided.  The Lunch Ladies did their best with the USDA Approved sources of, I guess I’ll call it protein.  Now, school food is deemed to be a requirement even when school is out of service.  And they say that there isn’t a hell.

Yes, it was just Spring Break, and the school kitchens were closed.  And they close during summer, last I checked – every summer.  But now?  School food is a must.  Here in Modern Mayberry, they’re offering the school lunches for free to anyone who comes to pick them up.  I think it’s because at least someone in Washington pulled their head away from the bacon-wrapped-shrimp trough long enough to realize that we’re in trouble.  One of the brighter ones probably had the following thought:

If (Lunches are Free) Then (How Long Until They Become Free Community Lunches)?

If (Free Community Lunches Exist) Then (How Many People Remember Typhoid Mary Was A Lunch Lady Cook who spent 30 years in prison isolation because she wouldn’t stop killing people by infecting them with typhus cooking?).

Oops.

typhoid

If you cook them too long, they get all crunchy.

Schools are being closed.  This, in my opinion is good.  But If (Schools Close) Then (Are Daycares Any Safer?)  Your takeaway should be this question:  how long until daycares are closed?  If they can close the NBA, Then they can close daycares.  But I repeat myself.

What can you do?  The best time to prepare was last month.  The next best time to prepare is now.  I can’t tell you if you have enough cans of corn in your pantry.  And, no, that’s not a creepy metaphor referring to some orifice you may or may not have.  I mean actual corn.  Or tuna.  Still not a metaphor.  Or mayonnaise.  Whatever you normally eat, you have some extra, right?

As of now, the supermarkets are functioning.

If (Supermarkets Close) Then (what)?  The average supermarket used to have inventory for three days.  The average house, food enough for three days.   Add that up, and American is pretty close to being hungry.  What happens Then?  Martial law?  Food distributions?

If (Your Job Ceases to Exist) Then (what)?

That’s the key to preparing yourself, not only physically like those people building blanket forts with a semi-load of toilet paper in their basement as structural wall material, but also mentally.  To understand what’s going on, to be one step ahead, you have to imagine what could happen.  You have to let your mind make it real and run it to a logical conclusion.

Then you have to see if it makes sense.

TOM

Okay, not everything bad can happen.  I mean, cats with thumbs?  Silly.

When an idea makes sense, follow it through.  If so, Then what’s the consequence?  Don’t limit your thinking.  It’s a fun game.  Sure, sometimes it ends up in global thermonuclear war, but so did The Terminator™, and look how much fun that was.  But when you really think about it, you’ll look to see what happened in the past.  While the future won’t look exactly like the past, it will rhyme.  The cause and effect of many things doesn’t change.

If we’re quarantining, Then we won’t drive as much.  If we don’t drive as much, Then we won’t use as much of that sweet, sweet gasoline.  If we don’t use as much of that sweet, sweet, gasoline, Then the price of oil, refineries, and oil producing companies will drop and some will go out of business and lots of people will lose their jobs.  That’s exactly what happened last week, and will happen in the next month.

If.

Then.

COVID-19 wasn’t in my projections – I was expecting cake.  It wasn’t in the mindset of the people of the world.  Then it was.  So what happens next?  What chains will snap, further unraveling our civilization?  What changes will be permanent?

  • If you want to keep your doctors alive, Then how will you protect them from COVID-19?
  • If you want to save the people with the most future, Then how many over 40 will get one of the 60,000 ventilators? Besides me, I mean.
  • If your customers are being impacted, Then will they fail?
  • If your customers fail, Then who will pay you?
  • If government wants to control people and how they move, Then they’ll start using the tracking information from cell phones.
  • If the government tracks cell phones, Then why would they ever stop? About the time they stop touching your no-no areas so you can go to Cleveland?
  • If the clerk at Wal-Mart® tells you that “they” have been telling her to have a minimum of two weeks of food, Then will you listen?
  • If you hear from another Wal-Mart© employee that they are setting up special hours for employees to shop after the store is closed, Then will you pay attention?
  • If the government starts paying people just to breath, Then will they ever stop?
  • If I tell you that hope is not a plan, Then will you . . . plan?

We are in a Black Swan event, probably the biggest of your life, and 9/11 was no slouch.  Neither I, nor anyone else can tell you exactly what the future will bring.  But as I mentioned in my last post, the universe is a harsh grader.  The final exam is pass/fail.  And passing means you live.

Until the next exam.

If.

Then.

Author: John

Nobel-Prize Winning, MacArthur Genius Grant Near Recipient writing to you regularly about Fitness, Wealth, and Wisdom - How to be happy and how to be healthy. Oh, and rich.

46 thoughts on “If . . . Then . . . The Two Words That Allow You To See The Future”

  1. As plagues go, this one is remarkably… lame. 17% of those massively exposed contract it. (And that was in the ideal environment of a cruise ship packed with mostly older people.) Of the 17% who contracted the disease, half experienced no symptoms. Of the 17%, only 1.2% died – and they were old people with preexisting conditions. So, a plague that causes a few old people to pass on a little more quickly than they maybe would have.

    No wonder the politicians are screaming and running about with their hair on fire. They care nothing about the nation being invaded by terns of millions of self propelled, self propagating invaders, but let a few of their generation get sick and die, and suddenly the sky is falling and something must be done!

    1. I am pretty certain they know this isn’t as big a deal as they are making it but it does provide a handy pretext to do the things they wanted to do anyway.

    2. We can get numbers on known infections, known fatalities, and known recoveries.

      https://www.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6

      The news media, limited as they are to repeating the same terse bits, over and over to fill the 24-hour news day, never report on the number of recoveries (unless they do an anecdote on “here’s someone to tell us how they recovered”). It appears to take a long time (weeks) to move from the “infected” to “recovered” category. Yesterday, when the US had 6362 known infections and 108 deaths, one might think “108 family tragedies, but no big deal; just 1.7%”. But how many recoveries? 17. Seventeen. So, we could say that “of the cases which have resolved in either death or recovery, 86% resolved in death.

      I hope that death comes quickly, and recovery slowly, so those 6362 cases will eventually resolve in recovery, but that’s not what the numbers are saying right now. Given a wide range of uncertainty, I’m going along with “erring on the side of caution”. Shut it all down.

    3. And, some of the recent data is even more encouraging? I’m becoming slightly optimistic? We’ll see.

  2. Thank you! You and Aesop are keeping me sane.

    Do you have any website or book recommendations on the topic of statistics and probability?

    I muddled through a basic stats class in my Ph.D. program years ago but never really understood it.

    1. If you want to do it on the cheap, check out what options your public library has for online learning. Usually referred to in their websites as databases or online resources. If / when / they reopen / are still open w/72-hr book quarantined the For Dummies series on statistics will be useful.

      And if course, there’s Khan Academy.

    2. Amy, overgrownhobbit had a great recommendation. You can get through Taleb math-free, and some of his verbal examples are stunningly good. Drop me an email if you need more.

  3. Nothing they will do is going to stem the tide but also none of it will be “temporary”. We are almost two decades removed from 9/11 and we still are treated like criminals/little girls at a Joe Biden photo op just to board a plane, even though we know that only a tiny number of people from a specific ethnic group are likely hijackers.

    The same will be true with the “free money”. There is already a bidding war going on, Joe Kennedy Jr. proposed on Twitter $4000 per adult American plus another grand for dependent kids. That means my family, with my wife and I, five adult kids and three minor kids, would score a $31,000 lump sum just for being alive and in America. Since the pandemic might stretch on for a year, they will keep making those payments with make-believe money and when it finally is over, they will make it permanent because people are stupid and will adjust to the new normal of monthly checks. It is a backdoor UBI.

    Meanwhile police in Philadelphia are apparently not going to actually arrest you unless you are caught in the act of murdering or raping someone. Add in the urban yutes without schools to go to and warmer temperatures and you have the recipe for cities not getting fuel replenishment or stores restocked. No one wants to be the new Reginald Denny.

    We are just seeing the beginning of the government clamping down and the economic ripples starting. People still have food and medicine and toilet paper and diapers and money to get them through the week but by this weekend people will start to run out and not be able to get more.

    Spicy times, they might just be here.

  4. IF someone gets hungry, THEN he may come to my door to take food by force.

    IF I call the police, THEN they may not come in time to rescue us.

    IF someone breaks into my house, THEN I may have to shoot them; not because their life is worth less than a loaf of bread, but because they may intend to kill me first, so they can take everything without resistance.

    IF I travel by car, THEN I may see a roadblock ahead. Highway robbery is a possibility. (Robbers have no way of knowing that I’m not worth their attention.)

    IF I see a roadblock, THEN I will reverse course immediately, without pausing for conversation. I’d rather take my chances being chased like a rabbit, than trapped like a muskrat.

    IF I get hungry, THEN I will remind myself that Mohandas Gandhi could pray and fast for weeks at a time. It will not be pleasant, but it’s not worth fighting about (for the first week, at least).

    IF commercial supplies are uncertain, THEN I’ll plant more vegetables in my garden.

    2. There’s a lot to process. I like your If/Thens. And if you have them figured out in advance? Even better.

  5. I’ve watched reactions to the disaster of a major hurricane. There are many that run to the nearest safety, which is usually a relative a few hundred miles away. In general, these people turn out to be those willing to allow others to do the dirty work, and move back, when everything is basically as it was before. From my perspective, they’re a minority of the population in my neck of the woods.

    Those with a dog in the hunt, such as property with a home, either stay to handle damage immediately, or are quick to return to start the process of rebuilding. Many of these can’t leave in the first place, since they have a job in the petrochemical industry. They have a rough time with the 12 hour days at work, and the 6 hour nights working on repairs.

    This emergency has no place to run…yet. As those infected decreases, some areas will be find many wanting to go there for relative safety. The citizens might not be so welcoming, but if my hunch is right, the charitable ways of people will appear. Unfortunately, many will attempt to take advantage, and might find the same reaction found by looters. Shot on sight isn’t uncommon after a hurricane, and the statistics of these events are usually buried.

    1. It’s best to stay close to home. Bug out . . . to where? It had better be someplace they know you, or you have kin . . . .

  6. I am getting whiplash. Doom ,or nothing-burger?

    And I am getting suspicious this whole damned thing is an psychological and economic operation being run on us. Maybe not from the start, but this is definitely being levered hard. We are being played.

    No doubt people are dying from the virus, we know because we are LOOKING FOR IT. But given that nearly all the dead are elderly, and compromised, if this disease had not been publicized so much,especially out of China, would we even notice, or just assign it to a bad flu season?

    Look where the western numbers are- a cruise ship filled with the old, a nursing home filled with the old and very compromised, and Northern Italy where reports are all the dead are over 80 and compromised. The impression is this is just “forward demand” on all those who would die anyway in the next year. Iran? They all seem to be old too.

    Initially, the Wuhan Show was terrifying- the bio hazard suits, the giant defoggers in the streets, the guys with wands disinfecting, like something out of a film. Gee, this must be REALLY SERIOUS! I was sold, signed right up to buy it. Not at all sure now.

    One thing about Wuhan- nobody really knows what the hell is going on there- there could be 100,000 people dead in their apartments, which was my original take- but they could also be filled with pissed off hungry people with head colds. Are they running an operation on us? If they wanted to attack our economy, would they do anything different? We know they are running a lot of our media- so that support was a given, and the media scum will do anything to whip up fear.

    I am convinced that these shutdowns will not stop the Virus of Dubious Lethality and most likely just extend it’s duration in the population, and that the economic effects resulting from our over reaction will absolutely dwarf any medical issues from it.

    1. The problem with exponential growth is that, when time-scaled to include 1% to 100% of current cases, the graph always seems to be exploding, whether it goes from one case to 100, or 1000 cases to 100,000. It’s always about seven doubling times, so the last 1/7th of the chart has fully half of the increase. The next doubling will take us “off the charts!”

      But still, that’s why we can’t wait for COVID-19 to show itself as a statistically-significant increase in the overall death rate. By the time it does that (assuming that it will), the next two or three doublings will be baked into the cake, 1918-style. In rough numbers, if it takes a week or two from exposure to illness, and another week or two from illness to death, and if the cases count doubles in a week (which appears to be the case), there could be a factor of 4-16x in the pipeline when you notice the excess deaths, not counting the additional exposures that occur after the situation is identified and the public health system is reacting.

      Extending the duration is a good thing, in that it allows scarce hospital resources to be built up, and used over a longer period of time, instead of simply applying triage at the door: 1> you’re too young, go home and get better on your own. 2> you’re sick but rich and likely to be able to pay the bills, come in for treatment. 3> you’re too old and too sick, go home and die.

      I wonder how far down the chain of Presidential succession order we’d need to go to find someone, anyone, under 70 years old? Or under 60 years old? Assistant Deputy Undersecretary for Agriculture?

    2. Raven – great observation. Regardless of the actual lethality of the virus, we still have to live with the (potentially over) reaction.

    3. I think the way the Chinese reacted is pretty telling. They were literally welding apartments shut. Check out Jennifer Zeng on twitter. She has posted that 21 million cell phone numbers weren’t paid for from Jan-Feb. Of those its thought that 500k to a million were deaths. The accounts were a type that migrants and students would have.

      1. I had just heard that not ten minutes before you posted. And the 20,000 new cases today?

        Not yet at the Cliff.

  7. In one sense, I’m somewhat insulated from immediate financial distress. Sure, my retirement savings have gone into the crapper, but I’m still getting checks from 2 different state teacher pensions, and Social Security.

    For now.

    A lot depends on how quickly the restrictions ease up/stop. If it’s just 2-3 weeks, well, maybe we can recover. If it’s longer – oh, crap!

    1. I’m anticipating that many of the less provident – the Grasshoppers, vs the frugal and prepared Ants – will die off. Not necessarily of the virus, but of panic, starvation, and violence.

      That MAY free up housing stock and other resources for those that survive.

      Crossing my fingers for now.

      2. Wow, two different teachers pensions lavishly over funded by taxpayers I’m thinking. You must be one of those slave holding Ant’s we hear about, taxpayers being the grasshopper slaves of course. Extorted by the local school board to keep the checks coming while common core is shoved down our throats by the teachers unions funding the pols funding the pensions.

    2. Nice! Yup, the length will determine how much further we drop. But some things will linger, like low oil prices. This will reverberate in the economy for at least the next year.

  8. China just upped the ante by paneling a discussion regarding using EMP against the US Navy.

    1. That is scary, but it would cripple the Navy, without killing the sailors. Hmmm. Wonder how our shielding is.

  9. Occurs to me that what may kill many who are prepared is the onslaught of close relatives who are not. Would you turn away your sister or brother because they are out of food and basic necessities while you have plenty? Will you still have plenty when your two months of supplies for one are being eaten by ten?

  12. John – – Another home run with this article.

    Your readers who are preppers will have heard the prepper mantra: “Our nation is only nine meals from Armageddon.” or something very close to this. you covered this when you said: ” The average house, food enough for three days. Add that up, and American is pretty close to being hungry. What happens Then? ”

    We preppers know that hungry people will act irrationally and violently out of desperation. Even religious scruples get abandoned when parents seek food for their children. However there is still some moral stricture among these adults who act badly toward others on behalf of their children. They are not evil, per se, even if they rob and steal. Few would want to kill you over a few cans of food…..

    But there are those who will !!

    Who ??? Teenagers !! Feral or not, teenagers have little to no moral controls, almost no self-control, no impulse control.

    Those raised by single Moms have even less than your average neighborhood teenager because nearly all have no parental role models worth a damn and have been raised without parental controls (and yes, I do know that there are those ones in then thousand who do; I am not referring to that miniscule minority ).

    Beware of teenagers in groups. They collectively have half the IQ that any one individually may possess and will not hesitate to kill you to steal a can of soup….or an empty dispenser of Pez®.

    My solution: stop cutting your lawn, trash your front yard, make it look like you don’t have anything. Make a sign that reads “Caution ! We have the virus ! ” Put a skull and crossbones on it for those who refuse to read…..

    And whatever you do, don’t tell anyone, not even your extended family, that you have anything stored or put back.

    Spicy times are just around the corner. Welcome to The Fourth Turning !!

    2. Hurrah! But don’t let Pugsley see this – he’ll use it as an excuse.

      Thankfully, we’ve developed a rather non-flashy habit of living well below our means. When the bad guys see the same cars they’ve seen in our front yard since a Bush was President?

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