Economic “Trees” (Data) And The Forest Du Jour: Stagflation
The Pando appears to be 107 acres of forest, but scientists have concluded that the nearly 47,000 genetically identical quaking aspen trees share a common root system. It is a single organism. It is estimated to be around 80,000 years old and weighs something of the magnitude of 13 million pounds. It may be dying.
Many market participants also struggle to distinguish the forest from the trees. It is not a personal failing; it is systemic. The immediacy of the market for many participants demands full attention. Correlations are unstable, and although most of our analytic tools require normal distribution, the returns in the market are anything but. The old model of the market as a place where profit-seeking economic agents clash has to be re-imagined. Many participants are not trying to maximize profits but to lock in certainty. Some hedgers pay to fix prices, and others are willing to assume the risk with compensation.
While…
