The market complex II

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Today we are going deep; suit up.

Jungian view of the psyche

I have written before about a book I started writing (only wrote 2 chapters) 10 years ago called The Market Complex. If you have spent more than two decades trying to fathom the markets and their seemingly autonomous path to price discovery, you will forgive me (maybe even thank me) for sharing what I think is an explanation.

I am going to keep this brief and hopefully show you that there is an explanation. Interpreting it is a whole other story.

"The collective unconscious is a reality in itself, and its contents are no less real than the things we see with our eyes. It produces its effects just as the physical world does, and in the same way it can be investigated by the methods of natural science."
— C.G. Jung, “The Structure and Dynamics of the Psyche”

And:

"The unconscious has a thousand ways of snaring us and getting us into situations which we would not consciously have imagined."
— C.G. Jung, “Civilization in Transition”

I started with an image of the Jungian topography of the psyche. I love models, and if you study Jung as well as many of the mystical (kabbalistic) philosophies, they are model-driven. The point I want to impress is that most of us focus on the conscious part. That is what the efficient market hypothesis in finance and the reasonable man in economics focus on. However, there is a whole other world, a bigger world where the real thinking is happening, and that is unconscious; we are not even aware of it. Keynes was onto something when he coined the term “animal spirits.”

I will go one step deeper, as I am scared some of you will get “the bends” or think I am around the bend.

“The collective unconscious … appears to consist of mythological motifs or primordial images, for which reason the myths of all nations are its real exponents. In fact, the whole of mythology could be taken as a sort of projection of the collective unconscious... the archetypes … can only become conscious secondarily and give definite form to certain psychic contents.”
Here, Jung hints at the autonomous creativity of the unconscious — it generates myths and shapes consciousness.

The Archetypes and the Collective Unconscious (CW 9, Part I, para. 66)

I have studied Jung’s entire Collected Works, so to me it is self-evident: when markets around the world stubbornly levitate against the threat of World War 3, a global recession, a mountain of debt, when oil climbs then drops unexpectedly when it looks like the Middle East is about to become enflamed in a larger conflict, we are witnessing the collective unconscious at play—a symbolic drama seeking expression through prices and headlines alike. Look around: world leaders like Trump, Putin, Xi, Netanyahu, Khamenei, and Kim Jong Un do not merely act as individuals; they are living out timeless archetypes—the warrior, the trickster, the tyrant—amplified by technology into a global spectacle. If you want to understand what moves markets, stop staring only at charts and earnings reports: peer into the deep ocean of the psyche, where the real script is being written.

S2N observations

1.2 million firms have been asked this question over the last 2 years. This foretells the productivity blitz unfolding that the market (collective unconscious) is under the spell of. There is no doubt this is going to revolutionise productivity.

As someone trying to withstand the mythical powers of extrapolation, I worry about the impact on jobs. In the end, I bet that the productivity gains usher in a world of massive price deflation, but that is way down the line; we still need to get through stagflation.

I am asking myself seriously, Michael, are you high? Today my writing feels so dramatic and extra—LOL. [In case you were wondering, I don’t do drugs, and it only takes me one whisky to be frisky].

1.2 million firms in the US were asked the question.

Average True Range measures the range of movement in a day from the high to the low. As you can see, there was a very large price reversal in oil futures yesterday. Prices have continued to drop after the futures close for yesterday. Oil is currently trading at $66.

I read that the Solana community is preparing for an ETF launch. I am not sure if it is just that I have moved the focus of my interest and what I am reading, but I no longer seem to read about the innovation breakthroughs in blockchain technology and the progress in the smart contract space.

I used to spend an inordinate amount of time researching different blockchains as they worked on improvements to their transaction throughput, TPS (transactions per second). There were whole new languages developing for smart contracts. I almost never come across these subjects anymore. Is it just me?

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Tesla had a big day yesterday. I guess all the robo-taxi hype is catchy.

Cocoa futures are up more than 8% on the day, and as you can see with all the marks on the chart, this is not such a rare occurrence.

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