Archive for the ‘financial commentaries’ Category

Stress: a powerful source of motivation

June 1, 2014

Stress: a powerful source of motivation


Stress: What is it?

How is stress useful?

What causes stress?

How can stress be relieved and managed?

Stress: what is it?

Stress is a label for a broad category of physical responses. A few types of stress response can be normal temporary increases in stress, occasional episodes of hysterical over-reactions, chronic elevations, as well as the other extreme, like when an organism is unusually unresponsive because of using prescription drugs to impair the body’s normal response of stress. If you are open to relating to stress as an important and even beneficial process, this material is for you.

Let’s begin now to calmly explore stress. Have you ever seen someone and thought “that person looks very stressed! Usually they are much more relaxed than they look now. I wonder… what is going on?”

We can think of stress as a measurable physical pattern. That pattern involves chemicals that we can call “stress hormones.” Further, specific patterns of physical tension (in muscles) are involved in stress and relaxation (stress relief).

knot of stress

Imagine a cat experiencing stress. The distressed cat may want to make itself look bigger by extending it’s hairs, arching it’s back, and even raising it’s tail. The cat intentionally displays the signals of a threat.

It is through electrical changes in skin produce that we produce results like “hair raising” when scared or  goosebumps due to cold. Electricity from within the body or outside of the body can produce the raising of hair.

If you have ever heard of a “lie detector test,” those tests actually measure specific physical changes, like changes in the electrical properties of skin and other tissue. Different stress tests can precisely measure changes in skin voltage, sweating, chest breathing, abdominal breathing, heart rate, and blood pressure.


The tests measure the stress response of the person who is being questioned while connected to the measurement device called a polygraph machine. With some questions, stress levels may be notably higher (or lower).


For instance, in the test result displayed below, the test subject was asked “did you ever lie about someone to get even?” At the time of that question, the red line jumps way up, indicating a sudden change in blood pressure.

polygraph test shows stress response to question

In the image below, the circles on the chart indicate where the polygraph specialist detected a tightening of a certain muscle. The contraction of muscles can block the flow of breathing, thus blocking or slowing down the display of distress.


In fact, polygraphs and other devices can measure physical tension of someone whether or not they are being asked questions. Even someone who is sleeping will have changes in physical tension, such as while having a nightmare.

Other situations in which it is typical to carefully monitor stress levels are during surgery or in other extreme medical emergencies. Of course, stress levels can also be monitored while someone is watching different kinds of presentations, like a new horror movie, a classic comedy, or an instructional program on landscape painting.

So, what is stress? Stress is a label for a broad category of physical responses. By the word “response,” we mean a way of responding to a particular perception which is identified as important. Next, let’s explore how stress can be useful in recognizing what is important to us.

How is stress useful?

Which is more important: to identify potential risks or potential opportunities? Imagine driving a car on a crowded highway. Maybe you know that you are close to the entrance of the business that is your chosen destination. However, suddenly you see a flash of brake lights, then the sound of a siren. Which is more important: potential risks or potential opportunities?

(to be continued…)

An empire of fear

May 29, 2014

Before I showed up, there were already expectations.​.. from parents, grandparents, doctors, and nations.

A nation wants soldiers and hard-working taxpayers. The doctors want a tough case with expensive layers.
The family wants a bunch of things that may sometimes conflict. With all these expectations, some are certain not to fit.
So, I’ve failed to meet some of those conflicting expectations.
If an ideal is widespread, then more exceptions are certain.
I’ve been examined and measured and labeled and dismissed.
Also, whether or not anyone loved me, I’ve lived.
I know they all had motives and agendas and desires. Of course they would. Should I complain that flames are made of fire?
Some models of perfection do not perfectly fit me. I could rebel and say “that model’s not for me.”
Or I could relax… just give up my heroic rebellions. All of that was still trying to fit some model of perfection.
I’m unique… and I respect some traditions more than others. The wise are alert to expectations… to reduce suffering.
An empire of fear is here in our midst, but a culture of guilt cannot bear the truth.
A religion of shame must name an enemy. So, a war of terror could be the perfect distraction.

A nation wants soldiers and hard-working taxpayers… plus, maybe some priests to tell the people their prayers.

“If you kill for our cause, then you will go to heaven. If you fail to do your duty, hell is your punishment.”

Confusion is good for organizing herds efficiently. To manage human resources, stress is the key.
Chronic distress without panic is best. Paranoia is great; worship the fear of fear itself.
An empire of fear is here in our midst, but a culture of guilt cannot bear the truth.
A religion of shame must name an enemy. So, a war of terror could be the perfect distraction.






guaranteed results? ;)

July 21, 2009


Have you heard that annuity companies promise- even guarantee- that they will give you reliable, solid returns no matter what happens to the value of your investment? Say you invest $100,000 with an annuity company, and then the underlying investment value soon doubles. The annuity company may guarantee that your returns will remain at that doubled level for the rest of your life- even if the value of the underlying investment collapses!

How can they make such a promise? That part is very easy! The more interesting question is how can they keep such a promise….


Madoff's office

Madoff’s office (Photo credit: eflon)

In the last few years, more people (and annuity companies) are questioning whether or not they can keep more of those promises at all. Some annuity companies have significantly scaled back the promises they offer in new annuity contracts- after witnessing the challenges posed by their existing contracts during the investment market developments of 2007 and 2008.





More companies like AIG may eventually collapse under the weight of any promises that prove implausible- breaking not only those promises, but breaking every other promise the company has made. By making speculative promises (annuity guarantees) that they may have little capacity to fulfill, some insurance companies may be making a desperate “all or nothing” gamble to attract new investors to finance their previously overly-optimistic promises. Does that sound familiar?

So, would you lend a lot of money (say, $100,000) to someone without asking them a few questions about their finances? When someone purchases an annuity contract, that is basically like any other loan except that the promise to re-pay is far more complicated than in most loans. How much do annuity investors know about the companies to whom they are lending? How well do they understand the contracts they are purchasing? How well do the commission-hungry insurance salespeople even understand those contracts? (I presume that most insurance salespeople have not read the details of the contracts they sell and would not comprehend the complexity of the contracts anyway even if they did read them.)

Many insurance companies have been shrinking in the last few years. Like any real estate investor who “maxes out” their credit cards after over-extending themselves by buying an overpriced home that they could not really even afford if it was not overpriced, some struggling insurance companies may have been more aggressive than ever in finding clever ways to attract new business (access new loans from investors). Companies offered historic commissions to their salespeople for the products that were most favorable to the company. Naturally, when a company realizes that they may go out of business without some aggressive innovations, they may be suddenly motivated to offer more complex and more optimistic promises- just like a politician who is losing support fast as election day approaches.

However, when a distressed borrower maxes out their credit cards to avoid defaulting on a mortgage, that actually does not make them a better risk for any new debt- but worse. Similarly, as annuity companies made more and more extreme offers to attract new business, then the more debt the companies compound with new extreme promises, the less valuable is any individual promise of that company. Distressed companies tend to attempt the same things that many distressed borrowers attempt- close the eyes tightly and speed up… or, in other words, borrow more aggressively and hope that external circumstances miraculously rescue investors from the recent natural results of their prior investments.

But can an insurance company really fail- like seriously? Well, how about the recent failure of giant US insurance company AIG, a global leader in the insurance industry?

Seat of the Supreme Soviet of the USSR, the Gr...

Seat of the Supreme Soviet of the USSR, the Grand Kremlin Palace in the Moscow Kremlin, February 1982 (Photo credit: Wikipedia)

Note that when financial contracts are guaranteed by a government program- such as during the US savings and loan crisis in the 1980s- even the government guarantee program can also fail, as it did in the 1980s. Governments who over-extend promises not only cannot keep them, but may even collapse under the weight of unfulfilled hopes. Consider how quickly the public credibility of U.S. President George W. Bush went from a widespread sense of confidence and even heroism… to such historic humiliation that Bush was nearly invisible during the 2008 Presidential campaign.

When I first recognized in 2002 the probable future of the US and global economy, I specifically predicted that President Bush would be made a “scapegoat” for the sudden appearance of issues that were decades (or more) in the making. We might as well allege that he is to blame even for the S&L Crisis of the 1980s or the Great Depressions of the 1930s or 1720s. Such castings of blame would be no more useful than blaming an isolated real estate speculator, or an isolated realtor, or an isolated financial business.

People who invested in ways that got them the exact results they got can toss around blame for all the reasons they can invent that their own investment choices are not the singular issue of relevance. People who invest total faith in the words of desperate politicians get the exact results of that choice of investment. Similarly, people who lend money to unfit borrowers get different results than people who invest in certain other methods.

Specifically, people who lend money to annuity companies based on ridiculous promises of solid returns “no matter what happens to the value of your investment” may wish to review the meaning of the words “the value of your investment.” Maybe the insurance companies should not have done what they may have done… and this or that investor should not have done whatever she may have done… and this or that politician should not have done whatever he may have claimed to have done. So what?

If you or people you care about have invested in over-extended promises of annuity contracts or any other feature of the great Ponzi economy of speculative financial bubbles, will blame alter your future or your past? However we learn is however we learn. If you are committed to being confident in the future results of the investments you make, you may engage in a conversation that fulfills that commitment with whomever you deem fit to participate with you in that conversation.

Everyone else may argue over who is most to blame for the next sudden disappearing of real estate equity, disappearing job markets, disappearing insurance companies, and disappearing government budgets and programs. How ironic is it that those who actively participated in those developments may be the most motivated to name scapegoats, to dodge responsibility for the exact results produced by their own participation?

I have entered contractual promises that I kept. I have entered contractual promises that I broke. I have entered contracts that other people did not keep, but I chose to enter them, didn’t I? Live and learn!



We do not have to sail in the direction of the wind, but if we ever sail off course, is it easier to change the direction of the wind or the direction of the sail?

Responding with a curious courage… to recent financial developments

April 5, 2009

Responding with a curious courage… to recent financial developments

Quickly, let’s be clear what it does and does not mean to respond with a curious courage. I wonder if you can recall a time when you were not just already curious, but when your curiosity then led you to perceive a risk or danger that you only could have directly recognized through your own exploring, and then, after this discovery that you just made, you courageously redirected your behavior away from the perceived risk and toward a valuable opportunity that, again, you only discovered through the practice of curiosity. Let’s call that time now.

In contrast, what a curious courage does not mean is this: to identify how reality should have been, whether or not it was, then, when some pattern of reality did not fit with how it allegedly should have been, then to identify that pattern of reality as having been a problem, and then choose not to take any new initiative toward personal responsibility for one’s own future, but instead focus anger on whoever was convenient to blame for that problematic reality, and finally, identify whoever first provided you someone to blame for that problematic reality as the one to blindly rely on to almost fix that problematic reality next, since reality may persistently thwart reactive efforts to fix it by first blaming someone else for why it was not how it should have been (according to whoever denied that reality should be however reality actually already is).

Now, with a curious courage, we could be asking how did this particular apparent reality develop- yet with a specific concern for one’s own prior practices and the resulting effects produced from one’s own prior practices. That personal identification of one’s own prior practices as the primary issue related to the results produced by those practices is what may take courage.

So, let’s imagine that someone went to a casino and did very well for quite a while. They soon developed confidence and came back to the casino again and again. They made consistent unearned gains by using a certain method that worked for them over and over.

However, yesterday, they used that same old method but got a different result, that one which they do not value. Then, they kept trying that same method again and continued to get the result that they do not value. Soon, they lost quite a bit of their prior unearned gains- or even all of those gains as well as all of their original investment or even more.

Maybe they were afraid to even think about or look at their recent results. They may have been focusing on how much they used to have as if that was somehow more relevant than what they have left.

What would it mean to respond to this situation with a curious courage? Would it be courageous to look for someone else to blame for the recent results? Maybe you blamed the casino itself, or the government regulators, or a certain current or former employee of the casino, or perhaps your neighbor or even your neighbor’s dog.

Now, I might suggest that the particular investing method that you used is what produced the unfavorable result. Of course, it could be possible that the casino or government regulators did change some relevant rule, yet even if that were true, identifying such a change would not make your old method back into one that produces favorable results. If some rule had been changed and that is the single reason why your old method was no longer valuable, then knowing what rule has been changed might provide some insight into what other method might be valuable now, but you may not be interested in that yet.

After all, if the reason the rule was changed is because of your neighbor’s dog, then you could continue to use the method that stopped working but just get really angry at the dog. Or, while you continue to use the method that stopped working, maybe you could kill the dog, and then maybe someone would change the rule back so that your old method that stopped working might work again one day eventually, and you could just keep using it for as long as it takes, even though until that might happen you may be producing results with that method that you definitely may not value, because one day it could work again- you know, hypothetically.

That all could be true. One other thing though that someone with a curious courage might wonder is this: what about discontinuing the use of whatever prior method already stopped working to produced unearned capital gains? Sure, maybe the dog can be killed and the rule can be changed back to how it was and so one day possibly in the not-too-distant future the old method that stopped working may work again, but how about now? Sure, maybe someone can identify the neighbor that might have been in some way responsible for preventing you from continuing to multiply the unearned capital gains that you used to compound, and then maybe someone can get that neighbor to remedy the situation by paying to bail out the casinos that have suffered incredibly all because of that one dog. However, what about reconsidering the investing method which however long ago stopped working to produce the results you value?

Even if you advocate for a possible return back towards the prior situation, another possibility is that you explore modifying your investing method, at least until all dogs are killed so that you can know that no other dogs will ever prevent you from multiplying unearned capital gains with the single method that is most familiar to you, which is probably borrowing money to invest in real estate, but it could also be dumping money into various stocks and hoping that those stocks go up in value at least enough to balance any inflation and taxes.

I know a lot of people who I warned many years ago about the specific market developments that have since rendered their previously valuable methods worthless, resulting in losses of some or all of their unearned gains in real estate equity (or in US tech stocks or UK financial stocks and so on). Some of them even owe more on their mortgage than the collateral property is worth.

I also know a lot of people who have watched me make consistently accurately predictions of a variety of ups and downs in a variety of markets. Some of them may never give up the methods that they previously used to produce consistent unearned gains for them but that recently stopped working. Some of them may not ever explore a principle that works in all market conditions: partnering with the reality of market conditions and even partnering with someone who knows how to find opportunity in all market conditions now.

That might require a curious courage. Not everyone has that. For those of us who do have it, the fact that not everyone else has it is related to what distinguishes our results from their results, which includes the curiosity to be honest about the reality of market conditions, rather than defining some patterns of reality as “problems” to be automatically reacted to with personal blaming and blind devotion in the latest emergency rescue fix proposed, whether that is a political “solution” or some other silver bullet, like, whenever one has been confused, just investing in silver (or real estate etc) as the one magic solution to the persisting problem of reality not being the same as someone told you it should be.

Consider that reality is only a problem for those who insist on investing in opposition to it. For those with a curious courage, reality is an opportunity to partner. Now, with me and the investing methods that fit with partnering with the reality of market conditions, certain people get consistently favorable results in all market conditions. Not everyone will contact someone committed to partnering with reality to let me know that they are interested in consistently favorable results, but what about you?


“Life is not what it’s supposed to be. Its what it is. The way you cope with it is what makes the difference.” Virginia Satir (1916-1988)

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