The Real Global Macro | Frankly #28

Global Macro Overview

This section provides an overview of the concept of global macro and highlights some recent news in finance, economics, and climate.

Wall Street and Global Macro

• Working on Wall Street required being present for the morning macro call where experts would broadcast to the Solomon Brothers Network around the world.

• Global macro involves reading summaries of news that happened in currency markets, interest rates, stock market or economic data that happened in Europe or the United States or China.

• There is a lot of news in finance such as Federal Reserve's pivot from tightening cycle to easing cycle due to a weaker economy. OPEC cut production by a million barrels which boosted oil prices. Malaysia is de-dollarizing with China which could have massive implications for our economy.

Climate and Environmental News

• Ocean temperatures are at their highest ever measured at 21°C following a La Niña period. We're about to head into an El Niño period which means they will warm further.

• PVC risk warnings have been issued after a train derailment in Palestine Ohio where one train car was filled with vinyl chloride. Plastic supply chains globally are being analyzed.

• Reduced sulfur content in marine vessels has caused much warmer temperatures around northern latitudes because the dimming effect has been reduced. South Africa is having over 200 days of blackouts this year due to electricity coal mismanagement.

Political News

• The ongoing nuclear risk either through tactical strike or strategic release leading to potential six-mass extinction with billion plus people dying all kinds of negative impacts to supply chains I mean food supply chains in the ocean phytoplankton everything else.

• The larger political backdrop is it looks like we will have two octogenarians running again Trump versus Biden to be president of this country.

Three Main Pillars

In this section, the speaker discusses three main pillars that are important to prioritize.

Energy and Resources

• Energy is the currency of life and underpins human systems.

• There's a metabolism of how energy gets used that links to dollars, trade, and economic growth.

Human Behavior

• As individuals and as aggregations of individuals, we can predict how humans respond in certain situations.

Ecology and Environment

• The Earth is the only known planet in the universe to host complex life.

• The fragility of Earth's systems is increasingly getting known by people.

• There are millions of species at danger of extinction. Humans can relate to them and study them.

Coping with Complexity, Toxicity, Anxiety, Worry, Tragedy

In this section, the speaker talks about how humans didn't evolve to handle this amount of complexity and toxicity. He also shares some coping mechanisms he uses.

Neuroscience of Dread

• People carry anxiety and worry about the future.

• The neuroscience of dread shows that people would be willing to take a higher amount of pain just to get it over with if they know they have to have a root canal in two weeks.

Ancestral Times vs Modern Times

• Humans didn't evolve to handle this much complexity and toxicity.

• In ancestral times, humans were happy-go-lucky but responded well when there was a threat. Nowadays, there's a steady ongoing diet of existential systemic stuff.

Coping Mechanisms

• The speaker copes by hanging out with his dogs, spending time in nature, learning how to meditate, and being surrounded by friends.

• It's impossible to move away from these topics when it's your day job.

• There are people who are experts on different topics such as climate, oceans, finance, geopolitics, US politics, community, and species extinctions.

• A lot of people in the world are rewarded for playing the game that results in more digits in the bank account. Society doesn't champion people working on broader concepts like oceans or other species.

Conclusion

In this section, the speaker concludes by hoping that everyone has coping mechanisms and suggests creating a community where people can work together on these issues.

Future Outlook

• The speaker expects things to get crazier and there will be so much news and chaos.

• Try not to get super pulled into each different item. Take a look back at how these things fit together and play a role in your life and in your small area on this planet Earth.

Coping Mechanisms Continued

• The speaker hopes everyone has coping mechanisms.

• One thing he'd like to do is create a coping mechanism of building community where people can fight each other and get solace and camaraderie to work together on these issues.