Jordan the Trickster

When I think back to the surprise move by Thomas Jordan the Governor of the Swiss National Bank on the 15th January, where he unpegged the 3yr old peg of the Swiss Franc and the Euro, I am reminded of the mythological symbol of the “Trickster”.

trickster-21  or a more contemporary example joker

Before I describe the Trickster in more detail, let us first look at the reason for drawing this comparison. Over the last decade or so Central Bankers have become masters at telegraphing their next move. The idea being that markets today are so finely tuned with 24hr connectivity 6 days a week that unexpected moves often result in large shocks to capital markets. In order to avoid these “shocks” policy makers hold multiple press conferences where they drop subtle hints as to what is likely to be the policy in the future.

Swiss National Bank Chairman Thomas Jordan had assured us just the week before that the Swiss would continue to “hold the peg” whereby the SNB kept the value of the Swiss franc from rising higher than €1.22. “The cap is absolutely central,” he said. And SNB Vice Chairman Jean-Pierre Danthine said publicly only last Monday that the peg would remain a cornerstone of Swiss banking policy. Do you see how these G-d like characters were able to take the faith bestowed upon them and trick the world in order to achieve their objective.

Just so you know that the move was not impulsive but rather carefully thought out, this is what Jordan says. “It was not a panic reaction, it was a well-considered decision….. You can only end a policy like this surprisingly. It is not something you can debate for weeks … We wanted to win back some flexibility. In these few words one can start to see the trickster at work.

Ok it is time to learn a little bit more about the mythology of the trickster as studied in folklore, religion and importantly from our perspective psychology. Lets look at how Wikipedia describes it, “a trickster is a god, goddess, spirit, man, woman, or anthropomorphic animal who exhibits a great degree of intellect or secret knowledge and uses it to play tricks or otherwise disobey normal rules and conventional behaviour”. This definition will not explain enough if you have not spent time delving into mythology, therefore to see what I am seeing with the trickster connection to the Swiss Central Banker, I need to share some of C.G. Jungs insights.

Jung writes about our subject in “On the Psychology of the TricksterFigure,” in Collective Works 9i, par. 472 from which I hope to tease out some interesting ideas to bring this analogy home.

There is something of the trickster in the character of the shaman and medicine-man, for he, too, often plays malicious jokes on people, only to fall victim in his turn to the vengeance of those whom he has injured…………His “approximation to the saviour” is an obvious consequence of this, in confirmation of the mythological truth that the wounded wounder is the agent of healing, and that the sufferer takes away suffering.

We see that the trickster figure is often seen to have great healing powers. If you give this just a moment of thought, and think about how we confer so much healing powers on the Central Banker almost like the old Alchemist who were able to turn lead into gold. However just like the trickster in mythology is seen as part deity we through our collective unconscious see the Central Banker with Omnipotent powers. Like the medicine man, Central Bankers are often forced to dispense unpleasant medicine, such as raising interest rates when it seems like the party is getting too wild. However, sometimes the medicine can be too severe and it can cause the patient (economy) to become sick and recessionary or deflationary.

Now if the myth were nothing but an historical remnant, one would have to ask why it has not long since vanished into the great rubbish-heap of the past, and why it continues to make its influence felt on the highest levels of civilization, even where, on account of his stupidity and grotesque scurrility, the trickster no longer plays the role of a “delight-maker.” In many cultures his figure seems like an old river-bed in which the water still flows. One can see this best of all from the fact that the trickster motif does not crop up only in its mythical form but appears just as naively and authentically in the unsuspecting modern man—whenever, in fact, he feels himself at the mercy of annoying “accidents” which thwart his will and his actions with apparently malicious intent. He then speaks of “hoodoos” and “jinxes” or of the “mischievousness of the object.” Here the trickster is represented by counter-tendencies in the unconscious, and in certain cases by a sort of second personality, of a puerile and inferior character….I have, I think, found a suitable designation for this character-component when I called it the shadow. On the civilized level, it is regarded as a personal “gaffe,” “slip,” “faux pas,” etc., which are then chalked up as defects of the conscious personality. We are no longer aware that in carnival customs and the like there are remnants of a collective shadow figure which prove that the personal shadow is in part descended from a numinous collective figure. This collective figure gradually breaks up under the impact of civilization, leaving traces in folklore which are difficult to recognize. But the main part of him gets personalized and is made an object of personal responsibility…………

Anyone who belongs to a sphere of culture that seeks the perfect state somewhere in the past must feel very queerly indeed when confronted by the figure of the trickster. He is a forerunner of the saviour, and, like him, God, man, and animal at once. He is both subhuman and superhuman, a bestial and divine being, whose chief and most alarming characteristic is his unconsciousness. Because of it he is deserted by his (evidently human) companions, which seems to indicate that he has fallen below their level of consciousness. He is so unconscious of himself that his body is not a unity, and his two hands fight each other.

I realize now as I suspected before starting this letter, I will need to deal with this subject and similar ones in more detail in the book I am currently writing, “The Market Complex“, as it is very difficult to condense these ancient concepts without working through examples through different civilizations to bring them to life. For those of you not versed in reading Jung in the original you might find it extremely confusing to say the least to comprehend these quotes. What I love about Jung’s writings is his intrepid way of confronting the metaphysical while remaining grounded as a positivist, always treating his work as a scientist despite the spiritual content.

As we have seen in countless articles in the media since the SNB unpegged; businesses and investors who have lost a fortune are blaming this on “the impossible”, as if they were chosen by the G-d’s to be victim to this inhumane behaviour. These people are behaving as Jung is suggesting in an unconscious manner. The fact that these “victims” cannot see that they have built a structure without a foundation is lost on their consciousness. It is so hard to comprehend that it is us, our current cultural environment that has created the tricksters we so despise. But the positive that can be taken from experiencing the trickery is that it is usually the precursor to the Saviour Archetype.

I would suggest that we as a society have projected a Saviour Archetype onto the worlds Central Bankers but what we are encountering is the Saviours Shadow in the form of the Trickster.

Swiss Timing

This is my 100th blog post in the short 3 months of going live, and is providing me with a vital outlet for my inner thought processes. I woke up late this Friday morning, as it seems my week has consisted of one late night after another. After turning on my phone, the beeping text alerts beat me to my trusted Bloomberg app to see what happened in the markets over night.

Friday I work from Bondi so before I discuss what I think about the Swiss “shock” take a look at my office for today.

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For those who haven’t heard the Swiss “suddenly” removed the peg to the Euro they implemented in 2011 to halt its then increase in value. The reason then was as a safe haven during the global financial crisis people were pouring their money into this tiny country and in so doing killing the countries large export economy. Isn’t life amazing, here is that Kabbalistic Jungian idea of unity of opposites: Good = Bad.

With the recent drop of the EUR to the USD and the likely further demise of the EURO the Swiss bankers decided to not continue buying the EUR to maintain the peg and sit with an enormous pile of EURO “assets” on their balance sheet.

Take a look at how the market reacted. The Swiss currency rose almost 30% at its highest during the day to then correct roughly half that.

20150115_EUEOD2_0

It dropped 3,500 pips at its worst.

The Swiss stock market also went into freefall dropping 15% before recovering to lose about 8% the worst since 1989.

20150115_EUEOD3_0

The question I want to deal with on this my 100th post is whether any of this could be anticipated? I believe YES and NO. So much for getting off the fence.

The reason I say YES, is because in terms of the theme I am developing for my book The Market Complex there was a clear interference by the Swiss Central Bank with the ebb and flow of the natural way of things which most people left unconscious and soon began to treat as natural.

The psychological rule says that when an inner situation is not made conscious, it happens outside, as fate. That is to say, when the individual remains undivided and does not become conscious of his inner opposite, the world must perforce act out the conflict and be torn into opposing halves. Collected Works, A Symbol of the Self.

So yes when a complex is identified it is known that it will produce unpredictable eruptions (read: sudden market dislocations like today). However the answer to whether we could anticipate when this shock would take place the answer is NO. When the energy around a complex amplifies we do know that things are about to become increasingly unpredictable. The news out of Europe and the threat to the Euro’s long term existence is being well played out in the media and political circles. I think it is fair to say that an eruption in this market complex was well overdue and the best thing one could have done in anticipation was buy volatility protection or stand aside from this market.

In conclusion this picture sums it up, you cannot have good without bad, up without down.

swiss

Sefirot

I feel hopelessly inadequate to talk about this subject, but I am going to have a go. I am back in work mode proper tomorrow so will continue on my analysis of the global markets and how we go about trading them, for now let’s learn a little more about the name of this site and its meaning to me. For those not into the spiritual esoteric I suggest you give this a miss.

For those who follow the Jewish religion we are given intricate detail how to follow the religion and when to do things; however we are also taught in a more cryptic abstract way, why we do certain things. In the ancient mystical writings of the Kabbalah we are taught in allegorical form how G-d created this world, and how it exists as part of four worlds (emanation, creation, formation, action). Because G-d is infinite and we are finite beings our ability to understand his “ways” is limited and therefore we are forced to make do with allegorical examples to try and comprehend what is meant. Here is a simplistic explanation of the Kabbalistic model of creation and its significance for Sefirot Capital. I need to stress once again this is so simplistic an explanation that it verges on the blasphemous, but I persist simply because even understanding a tiny bit is worth it.

G-d had the ratzon (will) to create a world where people would create tikkun (rectification) i.e. make good triumph over evil through their own free will. With G-d’s endless light Ein Sof  nothing finite can exist within a world of the infinite, so G-d needed his presence to tzimtzum (withdraw) to create space for the finite. Within this reshimu (void) G-d passed a kav (ray) of his Endless Light to form a spiritual world Adam Kadmon (Primordial Man) by way of 10 illuminations or powers called Sefirot. The world of Primordial Man was still too lofty for us to deal with so G-d needed further tzimtzum  (concealment / withdrawl) and the 10 sefirot of Primordial Man became separated further into stand alone vessels and from these sefirot  (vessels) all of reality exists.

d-133

In the list below you can see the English definition of each Sefira.

Keter—Crown

Binah—Understanding

Hokhmah—Wisdom

Gevurah—Judgment

Chesed—Loving Kindness

Tiferet—Splendor

Hod—Majesty

Netzah—Eternity

Yesod—Foundation

Malkhut—Kingship

With that background when a reality exists that is compassionate the world is operating under the dominance of the sefira of Chesed. When we encounter harsh situations we are encountering the dominance of the sefira of Gevurah, the model gets even further complicated with each sefira containing the 10 sefirot and so on. For me Jung’s idea of the Archetypes shares many similarities to the Sefirot and it is the main reason why I chose this name for this site.

The world of the markets is a reality and this reality is governed by the Sefirot / Archetypes, it is up to us at Sefirot Capital to try and understand and identify under which Sefira / Archetype the markets are being influenced and to design our portfolio and our behaviour accordingly. I have no idea what that means in practice, what I do know is that the more whole we become and meet our real Self, the more enlightened we will become with what to do with our trading persona.

There is nothing scientific about what I am saying, I am merely hypothesizing that the markets are an extension of our every day reality, and within this world there is a metaphysical medium of intuitive energy that provides those with the sensitivity to tune into this flow of libido the opportunity to profit from this wisdom.

Archetype meets an Australian Cricketer – Phillip Hughes

“Love is a force of destiny whose power reaches from heaven to hell. We must, I think, understand love in this way if we are to do any sort of justice to the problems it involves. They are of immense scope and complexity, not confined to any particular province but covering every aspect of human life.” C.G. Jung, CW 10 para. 198

“Psychologically … the archetype as an image of instinct is a spiritual goal toward which the whole nature of man strives; it is the sea to which all rivers wend their way, the prize which the hero wrests from the fight with the dragon.” C.G. Jung, CW 8

This week Australia came together like no other time I have seen in the 7 years I have lived here; united in the love for a young cricketer Phillip Hughes who died after being hit in the neck by a “bouncer”. Not only has Australia been in mourning but we have witnessed a collective outpouring of love and compassion across the globe. I ask why has this singularly tragic event touched so many and resulted in grown men verbalizing the vulnerable words, “I love you”, as a farewell.  

In the late 17th century an English philosopher John Locke put forward a theory about the human mind. He postulated that, at birth, the mind was a blank slate or tabula rasa and that through each experiential sensation the mind developed. This theory was to find some lasting application amongst later economists and philosophers, Hume and Kant but flew in the face of my boy Plato.   

Plato’s theory of forms or ideas asserts, and I quote from Wikipedia, “that non-material abstract forms, and not the material world of change known to us through sensation, possess the highest and most fundamental kind of reality.” 

In the 20th century C.G. Jung was to build further on Plato’s theory of form in his discovery of the collective unconscious as represented by the archetypal image. In the case of the death of Phillip Hughes this past week, the ancient archetypal form of love has connected with the collective psychic energy of millions of people at home and around the world. One cannot explain this phenomenan in conscious rational terms, this is a far greater force tapping into the collective unconscious sea of thousands of years of civilization.

The reason I bring this up in a letter to traders, is that this seamingly irrational, overpowering force is often expressed in the market place when we experience the archetypal force-field of greed and envy. It is amazing how the great ideas of our intellectual hero’s formulated 100’s and sometimes 1000’s of years ago still play a direct meaningful role in our lives. As King Solomon said, “there is nothing new under the sun.” For those of you interested in this line of thinking, I have started writing a book called, The Market Complex, which is a Jungian approach to analyzing the markets where I go into much greater detail as to how this all works on a practical level and how it can be applied by the market practitioner.