How to Better Anticipate the Next Wave of Chaotic Events
Assumptions and clues:
1. The steel industry - and the global economy - is in an era of never-ending and unexpected chaos. One must count on a continuing array of unexpected events. No event is more threatening today than a continuing Russian/Ukrainian crisis.
2. Yet, after-the fact - i.e., looking back - there's usually almost irrefutable logic to explain why the unexpected event occurred. We can describe the forces at work and the macro and steel industry events that shaped and drove it.
3. How might we anticipate better the new forces at work and possible chaotic events in advance? Perhaps, if we identify who's creating the inscrutable new sounds and rhythms on the global acoustic guitar? No, the player is not Jimmy Hendrix; it's the invisible hand!
4. When considering the invisible hand - i.e., price allocates resource - the observer must take into account:
- The study of the human equation in the marketplace - which is Peter Marcus' favorite definition of economics. How will people react to new marketplace conditions? As we learned over the years, it's not uncommon to have a buyers' or a sellers' panic. The marketplace makes the shift from "hot" to "chill," or vice versa, almost overnight. Alan Greenspan in the latest issue of Foreign Affairs claimed that he did not anticipate the 2008 U.S. financial crisis because he did not sufficiently appreciate how human emotions and mob sentiment can change the marketplace condition so rapidly. What a lame excuse! This is not WSD's problem. We are always investigating the power of psychological warfare in the steel marketplace.
- The impact on supply and demand, near- and longer-term, as prices change.
- New events and conditions unfold rapidly, and frequently, because the Information Revolution - which stimulates the ongoing Technological Revolution - moves at warp speed. New conditions and changes in steel and other industry structure that, in the past took five to 10 years to work out, now occur in just several years.
The early identification of unfolding new events and relationships is the "galvanized steel lunch pail" for the astute and pro-active decision maker. The capturing of winning opportunities is no accident.
For additional information of WSD's services, please contact us at:
wsd@worldsteeldynamics.com
Or visit our website at:
www.worldsteeldynamics.com