The Coming Dumpster Fire

?February 20, 2022

We own a small city house in one of the edgier parts of Athens, Greece.?The region of Exarchia abuts the University in the heart of the section of the city that sports every type of bar, eatery, theater, outdoor cinema, vinyl shop and bookbinder.?The location is ground zero for all things arts and culture, the intersection of nightlife, graffiti, refugee traffic, and mayhem. It's the melting pot for the cool part of downtown Athens, a place that finds tourists, mouths agape, taking photographs of wall paintings and oddities that most cities would whitewash over. ?

Exarchia also offers source material for headlines to the foreign press. Breaking news, photos and images of rioters running amok in Athens, firebombing police for a cause anarchists resurrect decades after events have occurred.? Locals and students relish reliving anniversaries of the military junta from the late 1960s and 70s, and assassinations of famous and infamous figures and rebels, who made their mark expressing freedom.

Locals and shop owners check their calendars of important days in the life of Exarchia, much like mothers mark the birth dates of their children.?For example, if you park your car in the streets, it's a good idea to ask local policeman if the evening will bring any strange activity, and whether you need to move your car into covered parking for the night.? Is tonight the night? Can we expect a date with the anarchists?

I’ve lived through quite a few close calls on these streets, marking rites of passage for university students, green (red) behind the ears, most too young to have witnessed a serious political event, or even know the history of the figures for whom they march in the streets.

The mayhem can be apocalyptic, resembling Beirut, not Europe, complete with tear gas and rubber bullets from police, broken glass from rocks and broken marble, and burning garbage cans set alight in the middle of the streets.? Interesting, the entire neighborhood can close up within minutes, wait for the firebombing to end, and then open back up for business as if nothing has happened. All within an hour.

A word about tear gas. I had forgotten a law from my physics class at university: tear gas rises.?Our apartment is on the top floor of a complex, and I once considered the six floors from street level a blessing, assuming I could stay clear of the activity below.?One evening, with police and marchers yelling, molotov cocktails in hand,?I popped my head out onto my veranda to witness the carnage below and was met by a wave of gas. You make this mistake once, and you learn. Accordingly, my next purchase was an old Russian gas mask from a vintage store to hang behind the bedroom door in case of celebrations below. Beware of Greek Police bearing gifts.?

These days, the biggest tell of an impending appearance by rioters is the city garbage collectors gathering up metal containers on streets, many hours in advance, whisking them into large trucks to remove anything combustible. ??When festivities begin, parked cars disburse, store owners roll down their heavy metal grates to ensure they are protected against broken glass.?

Yet, as we’ve observed before, no looting occurs on even the most destructive of evenings.?Rioters make political statements, but they know it’s verboten to steal from local shop owners trying to make an honest living.?Looting mitigates the message. ?Rioters in Exarchia see it as a cheap substitute for principles, suggesting a level of depravity that works against nobler ideals.?

I use the image of a burning garbage can to segue into a point of economics.?In financial parlance, we are approaching the moment of truth when the mother of all dumpster fires is not only possible, but likely upon us.??It’s as if we can see the police getting ready for a wild evening of tear gas and rubber bullets, if not metaphorically, then actually.?

The economy is sending out signals, suggesting our world is becoming ever more fragile. Between rising interest rates, skyrocketing inflation, a slowdown in hiring, millions of unfilled positions in the work force, and a stock market that is over-leveraged and top-heavy to such an extent, we face almost no historic precedent from which to make comparisons.?

We are on the bridge over troubled waters, and the bridge is crumbling beneath our feet. The epilogue is almost certain to mark agony for investors and workers alike; those on pensions need to pay special attention for their future survival.? And the ultimate victim could be the US Dollar. We've arrived at a new world of higher energy costs and serious concerns about food security.?Food, energy and stable currencies are the bare minimums that keep humanity moving forward and working together for the common good.?Take away these essentials, and all bets are off. Add to this, the inevitable decline of (at least in the US) the housing market.

We expect a retracement in US equities to exceed 25% from these levels.??The downtrend may take some time, but it's already begun. The fallout in High Tech will resemble the period of the late 1990s, when Y2K was all the rage. Few sectors of the economy will be spared.??????

All of this negative news should not surprise us. In our brief encounter with COVID, we have witnessed how quickly civilizations unravel, how long-held principles can erode, and how fragile and incapable governmental structures can become when led by incompetents. We haven’t even started to uncover the corruption in our midst, and there is no accountability.?We pay with our economies and markets, but it all begins when we sacrifice our freedoms.?

Musician Frank Zappa said it well:

"The illusion of freedom will continue as long as it's profitable to continue the illusion."