The World of Maximally Possible Stupid, or, How Not to Get WOMPed

Hi! How’s everyone? Welcome back old friends, welcome new ones, and here’s little Snowy giving you a tiny puppy hug.

Today we’re going to discuss…

I’m getting older. And as you do, you understand yourself a little better. Now I understand myself as Big Ideas guy. That’s sort of my job. I didi it for some of the world’s biggest corporations, for economics, for the way we think about society, and now, these days, people ask me for another one.

How do I make sense of all this? What’s happening to the world?

I’ve been thinking about it a lot. At the cafe, on walks, in conversations with Snowy. And here’s the answer I (we) arrived at.

Here’s a little concept I want to introduce you to. Sit with it. Really take it in. It is going to protect you, guide you, shield you, and orient you.

I call it: welcome to the World of Maximally Possible Stupid, or, WOMPS.

And the goal, right now, and for a long time to come, is this: not to get WOMPed.

Now, anyone can invent a clever acronym (though even I’m proud of this one.) So let me explain to you what it means, step by step. And as you read this, just remember that, because it matters, a lot more than you might think right now, so much so that I'll bold it: the goal is not to get WOMPed.

The World of Maximally Possible Stupid Economies, or, It's Going to Be a Lot Worse Than a "Trumpcession"

Over the last few weeks, many of you have come to me, with questions about money. Your savings, 401Ks, stock portfolios, etc. Because, of course, it's been mayhem out there.

And I said to you: tell me what your guys are doing, your wealth managers, and so on, in detail, so we can fix it.

Now. Over the last couple of weeks, I’ve been studying what they’re doing. Both by looking at what they're doing to your portfolios, and by researching what Wall St guys themselves are saying and thinking.

I have some bad news, and I have some really bad news. Go ahead and chuckle.

I am seriously troubled at what I've found. They are doing it badly wrong. They are not moving your money nearly fast enough, if they’re moving it at all. Out of the way of this trainwreck that’s going to be called not just the “Trumpcession,” but something more like “the decade the American economy changed permanently.”

No, that doesn’t mean bank runs tomorrow, but it does mean: what happens if this, aka the losses, the hurting, goes on for another four or five or eight or ten years? A lot of people are going to lose everything.

Now. Wall St isn’t getting this. The memo’s being shoved in its face, and yet, it’s money managers are saying things that are genuinely shocking to an economist like me. They seem to think, and sure, I’m generalizing, but to make a point, that “this is going to pass,” and “you should hang in there over the long term.”

There is no possible worse advice than this.

None. 

See how much money you’ve already lost? How much people have lost in general? 

Now imagine that you “hold on” for another five years, which is what they think you should do.

How much more are you going to lose? Wrong question. The right one is: how much are going to have left?

If you held a basket of just the stock market in general, you’d have lost 10-15% already. Most people will have suffered a 5% hit. We’re not even two months into the Presidency yet. Do you see my point? 

If you “hold on” for five years, LOL, you might as well just burn your savings right now. Because it’d be faster and you’d suffer way less anxiety.

This is the worst possible advice of all. And yet they’re giving it to you, and worse, doing it to you. So for those of you I’ve advised to stay on top of all this, let me redouble my warnings. These guys are probably going to lose you a ton of all that you’ve worked so hard for. Don’t be complacent, don’t be frightened, be real. This is your life. Be the Adult in the Room. Take charge of this.

Remember how we discuss that? This is the time to enact it.

Wall St is offering you the Maximally Possible Stupid Economy. If you take it, you are going to get burned, badly. 

Now, it’s offering you that because it doesn’t understand what else to do. My conclusion, which should sort of chill you, is this. Wall St, meaning most of your stockbrokers, is giving you most of you terrible advice, because it doesn’t know what to do. It’s paralyzed and baffled and confused. That is because it’s never encountered the situation which is causing all this, and we'll get to that shortly.

It’s not that it’s made of necessarily evil or terrible people. It’s not doing what it should, which is understand this is an emergency, and move your money, because it can’t see straight right now. And so, bewildered, it’s reverting to what it knows, which is….just hold on, everyone.

But when the Ship is Sinking, that’s when you don’t want to hold on for dear life. This is what getting financially and economically WOMPed is.

Take a moment to really understand this, because it is happening to many people right now. Don’t let it happen to you. You will never be able to undo it. 

Getting WOMPed is for life.

I really need to emphasize this which is why I began with it. (Please find someone genuinely knowledgeable to talk to, or book a session with me if you need advice, do a follow-up if you need to, and yes you can email me if it's an emergency.)

The World of Maximally Possible Stupid Politics, or, Where America's Heading

An American President who seems to be delighted about crashing the economy. The American economy, but hardly just that. The Canadian economy. The Mexican economy. Which is the entire North American economy. Then the European economy. And then the world.

Let me spell out for you just how that happens, which is something everyone should know. What do sky-high tariffs do? And remember, even 5% is pretty high, but 25% is astronomical.

They raise prices. And as prices go up, what happens? People can’t pay their bills, because they have to eat food and drink water. So bills go unpaid. First credit cards, then cars, then mortgages. What happens when people can’t pay their mortgages? Then we have a banking crisis. Because of course then banks have bad debts, which sink them. And as banks go into crisis, stock markets begin to crash. And as that happens, poof go everyone’s life savings.

This is not a joke. This isn’t even a warning. This is just what actually happens in periods like this. They’re chain reactions. Dominos. Set the whole thing off, and the next consequence follows, and then the next one, like clockwork. Can’t be undone. At a certain threshold, this all becomes inevitable. 

Are we there yet? Doesn’t matter.

The point is that now we’re taking the risk. Or rather, it’s being imposed on us. (On you. And there’s Wall St, baffled, losing you money every day, and telling you to hold on for dear life, while the ship is sinking.) By fanatics, crackpots, and lunatics, who think all the above is a good thing.

That risk in normal times is something close to zero. Sure, we have periods of crisis and crashes. But they happen because of mistakes. Not deliberately. Not willfully. And certainly not because a President wanted them to. See the difference?

So this is about risk. We talked recently about the difference between macro and micro risk, and here’s a different, much more visceral way to understand it. Wall St doesn’t know how to, isn’t built for, macro risk. It doesn’t know what the hell to do when an American President’s entire policy platform’s point is to crash the economy.

What do you do, in that case, anyways? Just sort of shrug and head for the hills?

No.

You understand where you are.

You’re in the wilderness of the World of Maximally Stupid Politics.

This is what getting politically WOMPed is. 

Let me make that a lot clearer. If a President’s willing to crash and burn the economy, do you really think such a figure cares about…say…getting re-elected? Isn’t that sort of a dead giveaway that they don’t?

Because if they did, certainly, they’d think to themselves, hey, burning down everybody’s life savings probably isn’t the best re-election platform.

So here we have something genuinely troubling emerging. “Is there going to be another election?” Everyone’s asking, and not just in America. We don’t know, in the way we don’t know about true uncertainty, but what we can say is: if someone doesn’t care about crashing and burning everything, they certainly aren’t acting like there’s ever going to be another election.

And if you know that, then you have some information that’s pretty vital, I’d say. About the choices you have to make. Now uncertainty—which is unknowable—has turned into risk, which is knowable.

If someone’s delighted about crashing and burning the economy, then it’s safe to say they probably don’t care about getting re-elected, and that sort of says the risk of there not being another election (or a sham one, etc) is pretty high, and rising. 

Above 50%, for sure, because such a figure has decided that they don’t need to care about the consequences of their actions politically, at least in a democratic sense. And getting higher every day, because every day, of course, the costs of destabilizing the economy and causing the kind of crash I described above grow, fast and hard.

So you have to understand that level of inforrmation, which is “information” in the social scientific sense, not the “news” sense, as in, stuff that changes your decision-making windows and possibilities. The chances are that you will not have a democracy, and that’s not my opinion, that’s just information, being revealed by the actors in game themselves.

And if you know that, then you have to make some basic life choices. Are you OK with living in that kind of way? I’m not judging. A lot of people are. A lot of people have to. A lot of people will say it’s not worth it, I can protect what I have, and so forth. All perfectly fine. 99.99999% of human beings who ever lived didn’t live in a democracy, and they still loved and laughed and celebrated and so forth.

It’s just that your quality of life in not-a-democracy is lower, and tends to decline dramatically as a society goes from democracy to autocracy. Nobody would say Russia, for example, has a very high quality of life, or of course North Korea, or pick your poison.

So you should understand that while nobody is judging your choice, it comes with consequences. Your quality of life will remain bounded, as we say in economics, meaning that it will have a ceiling, which only oligarchs, really, can cross. And the floor is always falling out from underneath you. Think of what happens when they strip away Medicare, Medicaid, and Social Security from Americans. Millions are going to suffer in immense and terrible ways.

This is what getting politically WOMPed is.

I’m not saying, everybody, quick, move to Paris! And 1890s Paris, so we can all hang out with the impressionists, on the Left Bank! I’m saying that if you understand that Americans are going to get politically WOMPed, then you should at least take some measures to protect yourself, which can mean many things, from saving to investing to making sure you have what safety nets you can gather around you in ways that aren’t about large-scale social institutions functioning in any competent or even existent way.

That brings me to…

The World of Maximally Possible Global Stupid, or, How to Think About Your Life and the Future

Everyone wants to know: what’s Trump after?

What does he want?

Why is he doing this?

I think that by now, the answer should be pretty clear, if you’ve gotten what I’ve been explaining so far.

Trump’s goal is now pretty clear. To WOMP everyone and everything. 

What does he want to do to Canada? To WOMP it. Europe? WOMP it. What does he want to do to America? WOMP it forever.

In this sort of illogic, the idea goes like this. If I can WOMP something, meaning, crush it with the Power of Maximal Stupidity into a complete state of paralytic dysfunction, then I can control it. And if I can control it, then I can own it. And if I can own it, I can extract maximum profit from it. Hence, “annexing” Canada, taking over Greenland, making Europe “pay,” and all the rest of it.

Now you should be able to understand what is happening to the world. It is getting WOMPed. Because all Trump knows is WOMPing. 

And what he wants to do is reorder the world based on WOMPing. Those who can WOMP, like his buddies, become the oligarchs and fellow heads of state, inflicting maximum pain by way of the Power of Maximal Stupidity, and using it to bludgeon and silence any criticism, dissent, or even cries of suffering. That way, they can sort of strut over the ashes and tell each other how awesomely powerful they are, and how they remade the world.

They want to remake the world by WOMPing so that the world is only for WOMPing. So that all there is to do is play these stupid, idiotic, childish, infantile-narcissistic games. Trade wars. Name calling. Arms races. Cutting and gutting. Defenestrating and detonating. Hey, who needs a Department of Education! So too the Dark Ages fell. If all you know is WOMPing, maybe you never even understand that the world was different once upon a time.

The Point is Not to Get WOMPed. The Point is Not to Get WOMPed.

The point now is not to get WOMPed. Of every decision you make.

Let me make that very, very concrete for you.

—Right now, at this very moment, Wall St is WOMPing lots of people, including some of you. Change that. Don’t let yourself get economically and financially WOMPed. Reach out to me if you need advice, do not let this happen to you.

—Right now, at this very moment, Trump is WOMPing America, and many Americans, which startles the rest of the world, are happy about it. They seem pretty content with losing their democracy, money, life savings, careers, futures. You had better be wiser than that, which doesn’t mean moving, necessarily, but it does mean understanding how bad it will really be, and what you will need to protect to survive in a society that’s WOMPed politically.

—Right now, at this very moment, the entire point of America under Trump is to WOMP the world, which is going to cost Americans in another way, which we’ll discuss more of soon, respect, credibility, legitimacy, which are what prosperity’s really based on. But the point, to be concrete, is not to let your society get WOMPed, like America has, and wants to do to everyone now, from Canada to Europe and beyond.

That’s already a lot.

Sit with it, chew it over. I’m not saying the world can’t get any stupider, by the way. Not at all. “Maximally possible stupid” means that we haven’t got there yet, and maybe we’re not even close. It means that we’re now taking that sort of macro risk, plunging into levels of stupidity previously unseen in human history.

I’m not kidding about that, though I know it sounds like an overstatement. But is it? This is what happened in the 1890s, and hey presto, World War I arrived, right on cue. This is what happened in the 1930s. 

What do you call making the same mistake three times?

Don’t get WOMPed, my friends.  I care about you, and I worry about you. Reach out if you need more advice. I’m always here for you (And like I said, If it's money and finances and Wall St stuff you're concerned about, like so many people right now, book a session or follow-up stat, I'm not kidding around with my conclusion on that, don't get burned.)

Lots of love,

Umair (and Snowy!)

❤️ Don't forget...

📣 Share The Issue on your Twitter, Facebook, or LinkedIn.

💵 If you like our newsletter, drop some love in our tip jar.

📫 Forward this to a friend and tell them all all about it.

👂 Anything else? Send us feedback or say hello!