We think we have an ego, a self, a personality in short, an identity. Then we think that states and peoples have specific characters, destinies and historical missions. Of an intermediate entity such as a condominium, on the contrary, we do not imagine any personality, destiny or mission. A building does not go into analysis to understand who it is and a condominium meeting is not the Spirit that becomes State, but a messy sequence of quarrels, outbursts, recriminations, insults, postponements of decisions or negotiations that have individual condominiums as protagonists. The administrator tries to direct and organize the discussion as best he can, but he doesn't decide. What counts are the moods of individuals and their ability to negotiate with each other. Marvin Minsky, one of the fathers of cognitive science, does not use the image of the condominium assembly to describe our mind, but it comes close enough.
Our brain, he says, is the result of successive stratifications that have followed one another in the course of evolution. There are a great many regions, some with primary functions such as processing sensory data and others carrying forward the instances of basic instincts. Then, since we have to be among others, there are regions that deal with relationships with others, with the rules of coexistence, with morals, with philosophy and so on in abstraction. All these regions, says Minsky, are continuously negotiating with each other, turning on and off every fraction of a second like in a meeting interrupting each other. Every now and then an instinct raises its voice and every now and then a moral principle or a calculation of convenience prevails. There is, mind you, no regulator or decision maker of last resort. There is no I. We invent the ego because we don't like to think of it as a jumble of impulses and we prefer to believe ourselves to be an orderly and harmonious whole. However, the condominium is not a subject, it is only the result of the discussions and quarrels between the rag. Instinct on the ground floor, Dr. Coerenza on the third floor and prof. Penthouse duty.
In recent times, in the meetings of the condominium, there has been a growing tension on the use of the liquidity of the current account held in the name of the building. It is a treasure formed several years ago, when the funds set aside to redo the roof were no longer spent because it was discovered that the old roof was holding up very well. The administrator, in 2009, invested half of the account in shares. Since then, satisfied, the condominiums have never discussed the issue much, dedicating at most a few moments in the various at the end of the meeting. There have always been some who said to raise the stock a bit and others who would rather take a little profit, but the majority were fine with leaving it at that. The infiltration of water in the pits and the boys on the fifth floor who always leave the door open, even at night, have caused much more discussion.
A couple of meetings ago, however, Ms. Fear on the ground floor filed a motion calling for the sale of all shares. Look look, the surveyor immediately replied. Greedy for the neighboring apartment, I have one in my pocket in which I propose to double them and go one hundred percent, he preceded me by a whisker. A very lively discussion arose which involved all the condominiums and which now continues every day in front of the reception and in the lift. The beauty is that the two, the Fear and the Greedy, are related. They apparently have a great-grandfather in common, Mr. Survival, who lived two civics further on. The two branches of the family followed different paths. The Pauras think that often, in order to survive, it is better to give up hunting an animal and keep hungry rather than risk being devoured by the animal itself.
The Avidos, on the other hand, believe that to survive it is better to eat all the animals around even if you are not hungry, because it is always possible that in a while there won't be any more for who knows how long. The minutes show that Ms. Paura regularly points out the seven consecutive years of increases, the stock markets tripled, the American Qe that no longer exists, the interest rate pendulum that will begin to change direction in June, the ratio between stock market capitalization and GDP at historic highs. She says the cashier at the corner grocery store confided in her that she wants to quit and go work at WalMart, which just raised its minimum wage to $9 an hour. The people at WalMart have always been tight-knit, attentive to the penny, but now they are afraid of losing staff and adapt, giving up a share of the margin. It's true, notes the Attento condominium, who works as an insurer. It's the same in my industry.
Aetna has increased everyone's salaries, they are fed up with keeping up with the turnover. Other than unemployment. Small things, replies Avido. Are we crazy to sell now, just when the good news is about to arrive? Not only is America really accelerating, but Europe, gentlemen, the Europe of the living dead is being born again. The Greek affair also demonstrates the strength of the glue that holds the Eurozone together. Besides, we're already accelerating and we still haven't seen a penny of the trillion euros of Qe about to rain down on our heads. In a few weeks, the German XNUMX-year bonds will have a negative yield and is Fear making us talk about rate hikes? Yellen? But look at her, she says she will raise them in June because she doesn't want the stock market to explode upwards, but as she says it she bends over backwards to add that she will do it very slowly, that she will be patient, that she doesn't want to disturb the politicians, the managers or even gentlemen traders. Come on, let's reason, the Fed will only raise rates if everything continues to go well. We practically have to wish for it, the rise. It will be a certificate of perfect health. What if you are not fully invested when you are in perfect health when should you be?
Dr. Coerenza, who has seen a lot at her age, says this kind of debate, radical and impassioned, is typical of the mature stage of a hike, but not necessarily the terminal stage. It is the phase, the current one, in which sellers become boring frustrated floggers and buyers become boring and noisy enthusiasts who (only they) have understood the wonderful new times. As for Europe, the Coerenza condom maintains that there will be an acceleration, but it won't be a big deal. Structural reformers like Germany are already in full employment and can't go much faster. Those who have not done them, or have done them little or pretend, will be able to have a small recovery in consumption and a little more exports thanks to the exchange rate, but will not have a serious recovery in investments until, in fact, the reforms there really won't be. Lawyer Pratico on the fifth floor, who often travels to America for work, says he was struck not so much by the recent statements of the cautious Professor Shiller (it's time to get ready to sell, he said), as by the perplexity of a rock-solid optimist and longtime veteran like Ed Yardeni.
Also on the rise, he adds, are the sales of shares by insiders, the executives of listed companies who, at least in theory, should know the companies they lead better than the analysts who study them from the outside. On the other hand, he concludes, Buffett has begun to study Europe, and in particular Germany, because he still has lower multiples than America and because the weak euro is a good opportunity for those who think in dollars. The administrator leaves the condominiums to debate for a long time. Finally, when he starts to see them tired and ready to negotiate, he proposes a compromise motion. The equity component, we read, is maintained at current levels, high for an account held in the name of a condominium, but not too aggressive. US equities will be gradually reduced and the proceeds will be converted into euros, not because it is thought that the euro will appreciate but because European stock markets have more upside potential than the likely further weakening of the euro, which is rather limited. In July, before the holidays, a reduction in the overall equity weighting will be evaluated.
The Greek question, which will in any case reopen in the next few months, will be followed in September by the Spanish question, potentially far more serious. At that point we will keep Europe only if the acceleration of growth has really manifested itself in the meantime. For the time being, the mere inflow of American capital into our stock exchanges is sufficient to give them strong underlying support. On the other hand, no investment is envisaged in the energy sector and heating oil for next winter will also be purchased at the last moment, counting on a further drop in prices between now and the summer. The question of the gratings on the windows, necessary given the increase in thefts, was postponed due to lack of time.
