FORWARD BASE B

"Pay my troops no mind; they're just on a fact-finding mission."

“The End Game” – Reading Between The Lines

This is a presentation written by Raoul Pal, a Goldman Sachs alum and former co-manager of a large hedge fund called “GLG Global Macro Fund” in London. I like looking at former hedge fund guys because the signal to noise is better than usual because of the performance based work they do.

Looking at the graph on US employment on page 7, not surprising. The fundamental nature of automation has not been addressed on a wide scale. You can run older business models that make use of more people, however they will generally be out-competed by more efficient automated ones unless subsidized. Again, no one has created an effective social and political model to integrate new technology with our way of life. Most of the developments tend to be at odds with the established order, only much smaller groups can take serious advantage of them.

EU industrial output on page 9 isn’t as shocking as you may think due to their policies of energy austerity programs, extending to the most productive countries in the EU. People are losing confidence in the Eurozone, the slow motion bank run in the EU is no joke. Governments in some countries have already assumed indirect control over their banks.

Also, his analysis lacks the context of the Chinese and Russian economies, and the cooling demand for commodities.

He takes the timeline late 2012-2013 as a “Reset” period. I think his timeline is off by about 4-6 years, but it’s an interesting presentation all the same.

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