Ad Hoc Commentary – darkness prevails over Europe, Middle East and North Africa


Today, we will have the total solar eclipse that we had talked about in the past:
“…Mar 20, 2015 Solar Eclipse on Rosh Chodashim (Biblical New Year)
Apr 4, 2015 Blood Moon on Pesach (Jewish Passover)…”

The fact that the solar eclipse coincides with the Spring Equinox suggests that darkness will prevail on a day that is supposed to have equal amount of night and day. Adding to the darkness is the Supermoon that will not be seen:
“…As a result, only the last three Supermoons of this year will be visible — because the moon is new rather than full on March 20, it won’t be seen. But it will be gliding past us closer than ever, and its shadow will be visible as it blocks out the sun on Friday morning…”

This solar eclipse is also occurring in the middle of the seventh and last Pluto-Uranus square of Mar 11-28, 2015. Those who believe in astrology thinks Pluto-Uranus squares are for upheavals:
“…Uranus square Pluto is the most significant and most challenging planetary influence in a generation… There are seven exact Uranus Pluto squares between June 2012 and 2015. So, we are living through a major generational upheaval…”

We should not read too much into the celestial events. However, given that the region that will see the solar eclipse happens to be the region with the highest youth unemployment, it is likely that many of these young and idle minds will be fertile ground for extremism. It is probable that the nascent religious war that we are seeing in recent years will turn into a full blown religious war. Perhaps the darkness that will prevail today in the sky is a warning for all of is to be more concerned about the youth unemployment problems in Europe, Middle East and North Africa.

Adding fuel to the nascent religious war is the recent Israeli election results:
“…That appears to be a government more rightwing and religious than its previous incarnation, reflecting Netanyahu’s own sharp tack rightwards in the last days of the election campaign, as he declared his opposition to a two-state peace solution and vowed to push ahead with settlement building…”

Our 2014 Year of Resentment is quickly turning to a 2015 Year of Religious Wars:
“…If the stock market continues to rally after a summer correction, then 2014 will be the year of resentment. Chances are the unemployed, especially the young unemployed, will be resentful of the booming stock market. Nobody likes to be “left behind”…”

Someone somewhere needs to fix the question of jobs. Unfortunately, traditional solutions centered around training is not going to work this time because machines are commoditizing white collar work as we speak:
“…Given we are in the second machine age, many will fall into poverty as the S&P500 makes new highs after the correction. The horrors of underemployment and unemployment is very real today. And as we mentioned before, the commoditization of white collar jobs due to much smarter computers is going to affect both the educated and the school dropout….”

Even ‘radical’ solutions like minimum wages will not work. Instead minimum wages and other social welfare will only accelerate the decision by CFOs to replace humans with machines. The only solution that will work is a middle ground between unfettered capitalism and communism. There are two parts to every human job, the subjective part and the objective part. The subjective part is simply the recognition that the person doing the work is a human. The objective part is the output of the job, be it mere services or high tech goods.

Communism is an extremist position of rewarding only the subjective part regardless of the objective part. On the other hand, capitalism is an extremist position of rewarding only the objective part with no regard to the subjective part. Yes, from a human job perspective, both communism and unfettered capitalism are extremist positions. To reiterate, to solve the jobs problem, we need a middle ground between communism and capitalism.

This middle ground is probably going to be found through recognizing that unemployment has negative consequences on social cohesion. Since social cohesion are common goods, we should look towards other common goods like the environment when developing solutions for the scourge of unemployment. The current unemployment problem is not a problem that individual countries can solve on their own because a true solution can only be found by moderating capitalism. Any country that try to do it on its own will likely see their industries migrating to neighboring countries. We remember that companies did move factories to countries that have lower environmental costs in the past. It is not surprising that they will do the same in response to any new social cohesion costs.

Good luck in the markets.