In this series, we will seek to discuss Reality as the trajectory of three parallel lines that eventually intersect: Market dynamics, geopolitics, and Karl Barth’s writings on creation. In his recent book The Rigor of Angels: Borges, Heisenberg, Kant, and the Ultimate Nature of Reality, William Eddington takes us through the lives of three thinkers who have shaped our lives through science (Heisenberg’s quantum realm and his principle of uncertainty), philosophy (Immanuel Kant’s limits that undergird our understanding of reality), and literature (Jose Luis Borges’s incontrovertible truth that love is necessarily imbued with loss and sacrifice in the reality of life).
When reality hits, we always ponder if an element of reversibility is attached to our experience. Even after 35 years, the Japanese stock market (Nikkei Index) reached again an all-time high! In his book, Eddington discusses how we end up having a fundamentally incomplete and sometimes incoherent picture of the world.
Russia’s nuclear doctrine has changed (as clearly stated by Putin’s speech less than two weeks ago), despite the strong warnings that William Burns (the CIA’s Director) delivered to Sergei Naryshkin (head of Russia’s SVR) in their Istanbul meeting in October 2022. At the same time, China is projected to double its nuclear capabilities by 2030. Almost 60 years after the Cuban Missile Crisis, the world came close to another nuclear crisis in the summer and fall of 2022.
These geopolitical developments coincide with a bifurcated market and earnings reality as discussed below. The undivided reality is that intercepts revealed frequent conversations within Russia’s military regarding the use of nuclear weapons, which is a calculated move when they consider the fact that more than 300,000 Russian soldiers have died or been injured in the last two years during the Ukrainian invasion.
Detonating a tactical nuclear weapon cannot be easily traced (given that moving it requires conventional logistics such as loading them on an artillery shell), in contrast to tracing the moves of strategic nuclear weapons. But would Russia need to rely on its own nuclear arsenal, or could it just rely on the inflection/detonation point of one of its useful idiots to do it? Since the days of Kim Il Sung (and his successors son and grandson Kim Jong Il and Kim Jong Un) the state of North Korea has been built on a propaganda of lies (as evidenced by Katie Stallard in her book Dancing on Bones). The recent nuclear threats and renewal of partnership between Putin and Kim Jong Un could potentially be not just about rearming the depleted arsenal of Russia’s conventional weapons.
But let’s go back to the bifurcated market and earnings reality: As shown below, just four stocks (Nvidia, Meta, Microsoft, and Amazon) have added $1.5 trillion to the Nasdaq 100 Index in 2024, while the remaining 96 stocks have barely added $75 billion. Where is the geopolitical restraint in that runup and where is the constraint that multiples should exhibit in the face of an evolving reality that could be marked by irreversibility?
Moreover, and as shown below, there is a disconnect and a paradox (see relevant discussion about the paradox below) between the sales and earnings growth of the Magnificent 7 and the sales and earnings growth of the rest of the S&P 500. Such disconnect – despite efforts to justify it – could well undermine the whole market in the way that the detonation of a tactical nuclear weapon (let alone a strategic one) can unravel the future of an entire region, let alone civilization in the case of detonating a strategic nuclear weapon.
Is it inconceivable that Putin would threaten regional annihilation unless the West ceases its support of Ukraine? And how would NATO react under those threats if Putin’s nuclear Nietzschean will-to-power emboldens him to make moves in Moldova and/or a Baltic country? In Dostoevsky’s Brothers Karamazov, Ivan goes mad after pushing his mind to outer limits for which we are not hardwired for understanding – as Immanuel Kant taught us – unless we reach out to Karl Barth’s transcendent vantage point of view, or what Spinoza calls sub specie aeternitatis, and what Hannah Arendt calls “the Archimedean point.”
When the US administration directed a small group, a.k.a. “Tiger Team”, to come up with a nuclear playbook of contingency plans, reality hit: In the age of counterterrorism, geoeconomic rivalry, AI, geopolitical tensions, and cyberwarfare, we are facing an old threat that can unravel our everyday experience and send us back to the dark ages.
The dogma of deterrence (a.k.a. calibrated balance of terror) where adversaries refrain from using nuclear weapons due to the realism of an imminent and overwhelming counterattack is dead. In the previous reality, the axiom was that nuclear weapons were needed to prevent a war. Now, that axiom is dead, and there are no prospects – under the current circumstances – of reviving any nuclear talks/negotiations. We highly recommend the recently published article in the New York Times about the rising risks of nuclear conflict, especially the section that elaborates on the consequences of a nuclear detonation.
Could the rising price of gold be reflective of an unfolding reality within the universe of asset classes that sends a message about misalignments from currency to valuations, and from climate misunderstandings (and the consequential effects on prices, quality of life, and food availability) to geopolitical tensions?
In the emerging dark geopolitical reality, the paradox of failing to incorporate geopolitical restraint into market valuations (especially for particular stocks) may be indicative of a blinded granularity which does not permit us to see the building blocks of change on a small scale (the closer you zoom into the earnings, the more you lose the foresight of a declining sales momentum due to competition/geopolitical tensions, to paraphrase Heisenberg’s uncertainty about location and momentum of a particle).
The infused bias in valuations is consistent with a view that there is no coherent reality independent of our observations, and that, in turn, reminds us that at the chessboard we have players who are not angels but humans who want to be rulers independent of a creation and also the One responsible for it, as Karl Barth would have reminded us. Moreover, in our hubris it seems that the terminus ad quem point (the terminal destination if you prefer) is always about us rather than the creation itself, and our relationship to an irreversible cause of it and of our existence. It may be necessary then to agree with Heisenberg that “it will never be possible by pure reason to arrive at some absolute truth”, unless, as Barth would have explained, we start comprehending reality as an extension of a timeless creation that has a terminus ad quem outside ourselves.
The Irreversibility of the Unknown Reality: The Markets, Karl Barth, and Nuclear Statecraft, Part I
Author : John E. Charalambakis
Date : March 12, 2024
In this series, we will seek to discuss Reality as the trajectory of three parallel lines that eventually intersect: Market dynamics, geopolitics, and Karl Barth’s writings on creation. In his recent book The Rigor of Angels: Borges, Heisenberg, Kant, and the Ultimate Nature of Reality, William Eddington takes us through the lives of three thinkers who have shaped our lives through science (Heisenberg’s quantum realm and his principle of uncertainty), philosophy (Immanuel Kant’s limits that undergird our understanding of reality), and literature (Jose Luis Borges’s incontrovertible truth that love is necessarily imbued with loss and sacrifice in the reality of life).
When reality hits, we always ponder if an element of reversibility is attached to our experience. Even after 35 years, the Japanese stock market (Nikkei Index) reached again an all-time high! In his book, Eddington discusses how we end up having a fundamentally incomplete and sometimes incoherent picture of the world.
Russia’s nuclear doctrine has changed (as clearly stated by Putin’s speech less than two weeks ago), despite the strong warnings that William Burns (the CIA’s Director) delivered to Sergei Naryshkin (head of Russia’s SVR) in their Istanbul meeting in October 2022. At the same time, China is projected to double its nuclear capabilities by 2030. Almost 60 years after the Cuban Missile Crisis, the world came close to another nuclear crisis in the summer and fall of 2022.
These geopolitical developments coincide with a bifurcated market and earnings reality as discussed below. The undivided reality is that intercepts revealed frequent conversations within Russia’s military regarding the use of nuclear weapons, which is a calculated move when they consider the fact that more than 300,000 Russian soldiers have died or been injured in the last two years during the Ukrainian invasion.
Detonating a tactical nuclear weapon cannot be easily traced (given that moving it requires conventional logistics such as loading them on an artillery shell), in contrast to tracing the moves of strategic nuclear weapons. But would Russia need to rely on its own nuclear arsenal, or could it just rely on the inflection/detonation point of one of its useful idiots to do it? Since the days of Kim Il Sung (and his successors son and grandson Kim Jong Il and Kim Jong Un) the state of North Korea has been built on a propaganda of lies (as evidenced by Katie Stallard in her book Dancing on Bones). The recent nuclear threats and renewal of partnership between Putin and Kim Jong Un could potentially be not just about rearming the depleted arsenal of Russia’s conventional weapons.
But let’s go back to the bifurcated market and earnings reality: As shown below, just four stocks (Nvidia, Meta, Microsoft, and Amazon) have added $1.5 trillion to the Nasdaq 100 Index in 2024, while the remaining 96 stocks have barely added $75 billion. Where is the geopolitical restraint in that runup and where is the constraint that multiples should exhibit in the face of an evolving reality that could be marked by irreversibility?
Moreover, and as shown below, there is a disconnect and a paradox (see relevant discussion about the paradox below) between the sales and earnings growth of the Magnificent 7 and the sales and earnings growth of the rest of the S&P 500. Such disconnect – despite efforts to justify it – could well undermine the whole market in the way that the detonation of a tactical nuclear weapon (let alone a strategic one) can unravel the future of an entire region, let alone civilization in the case of detonating a strategic nuclear weapon.
Is it inconceivable that Putin would threaten regional annihilation unless the West ceases its support of Ukraine? And how would NATO react under those threats if Putin’s nuclear Nietzschean will-to-power emboldens him to make moves in Moldova and/or a Baltic country? In Dostoevsky’s Brothers Karamazov, Ivan goes mad after pushing his mind to outer limits for which we are not hardwired for understanding – as Immanuel Kant taught us – unless we reach out to Karl Barth’s transcendent vantage point of view, or what Spinoza calls sub specie aeternitatis, and what Hannah Arendt calls “the Archimedean point.”
When the US administration directed a small group, a.k.a. “Tiger Team”, to come up with a nuclear playbook of contingency plans, reality hit: In the age of counterterrorism, geoeconomic rivalry, AI, geopolitical tensions, and cyberwarfare, we are facing an old threat that can unravel our everyday experience and send us back to the dark ages.
The dogma of deterrence (a.k.a. calibrated balance of terror) where adversaries refrain from using nuclear weapons due to the realism of an imminent and overwhelming counterattack is dead. In the previous reality, the axiom was that nuclear weapons were needed to prevent a war. Now, that axiom is dead, and there are no prospects – under the current circumstances – of reviving any nuclear talks/negotiations. We highly recommend the recently published article in the New York Times about the rising risks of nuclear conflict, especially the section that elaborates on the consequences of a nuclear detonation.
Could the rising price of gold be reflective of an unfolding reality within the universe of asset classes that sends a message about misalignments from currency to valuations, and from climate misunderstandings (and the consequential effects on prices, quality of life, and food availability) to geopolitical tensions?
In the emerging dark geopolitical reality, the paradox of failing to incorporate geopolitical restraint into market valuations (especially for particular stocks) may be indicative of a blinded granularity which does not permit us to see the building blocks of change on a small scale (the closer you zoom into the earnings, the more you lose the foresight of a declining sales momentum due to competition/geopolitical tensions, to paraphrase Heisenberg’s uncertainty about location and momentum of a particle).
The infused bias in valuations is consistent with a view that there is no coherent reality independent of our observations, and that, in turn, reminds us that at the chessboard we have players who are not angels but humans who want to be rulers independent of a creation and also the One responsible for it, as Karl Barth would have reminded us. Moreover, in our hubris it seems that the terminus ad quem point (the terminal destination if you prefer) is always about us rather than the creation itself, and our relationship to an irreversible cause of it and of our existence. It may be necessary then to agree with Heisenberg that “it will never be possible by pure reason to arrive at some absolute truth”, unless, as Barth would have explained, we start comprehending reality as an extension of a timeless creation that has a terminus ad quem outside ourselves.