SOME POSITIVE UPDATES
By Karl Arnold Belser
7 January 2015



My intention for this year is to talk about  my knowledge of the world that seems to be clear as well as new information I discover.

A.  SECULAR STAGNATION IS APPARENTLY OCCURRING

I have written several posts on secular stagnation including my recent post
The Minsky Moment and Secular Stagnation in which Paul Krugman suggests that secular stagnation is occurring.

Now Robert Shiller has a new chapter in the third edition of his book
Irrational Exuberance with the title new normal boom. Shiller says boom instead of bubble because he thinks that a transition between economic growth and economic stagnation is occurring. 

Shiller and Bill Gross (the founder of Pimco) point out that this boom has resulted in the possibly one-time decline in bond yields that has occurred over the last decade. 
Interest rates have to be below the rate of GDP growth if the debt of the United States can be paid off.

I discuss the implication of this change in my post PE Ratio and Mean Reversion.  My conclusion then and now is that a low interest rate is consistent with a higher than normal PE ratio on shares. Hence, I am now less inclined to sell my shares that have appreciated because of the new normal boom.

B.  NEW TREATMENTS FOR SUPER BUGS ARE BEING DEVELOPED.

I point out in my post Super bugs as a Black Swan that antibiotic resistant diseases are a threat to the human race.

An article in the Telegraph titled First new antibiotic in 30 years discovered in major breakthrough shows that there is a solution to this problem. The new antibiotic attacks the cell wall and hence it will be difficult for microbes to adapt to avoid the treatment. The black swan here is human ingenuity.

C>  THE ISLAMIC THREAT HAS REACHED ITS TIPPING POINT

The world has finally realized how sick the attacks
on the press are by Islamic terrorists as the result of the deaths of staff of a French satire magazine Charlie Hebdo that criticized the profit Mohamed.

The article in the Onion titled It Sadly Unclear Whether This Article Will Put Lives At Risk describes the situation and the cartoons in BussFeed titled 25 Heartbreaking Cartoons From Artists Responding to the Charlie Hebdo Shooting sums up the opinion of the press.

Maybe the onslaught of articles like these will overload and possibly desensitize the Islamic fundamentalists by showing them how futile the effort to suppress the press really is. I see this as a positive step in mitigating the conflict between Islamic and Western Civilizations.

COMMENT 01/14/2014: The tipping point may not be as positive as I assert because of over-reaction. Consider the article  from Reuters called. Charlie Hidbo Fallout: Specter of Fascist past haunts European nationalism.  
   
Last updated January 14, 2015
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