“On an early Tuesday morning in May 2014, a small army of law enforcement officers, government representatives, and animal welfare experts assembled at JNK’s Call of the Wild Sanctuary in rural Sinclairville, New York. After months of careful planning and logistic maneuvering, they had one goal in mind: get the animals out,” writes Katharine Sucher.
She continues, “As rescuers marched in, three tigers named Zeus, Kimba, and Keisha lay listless in cages held together by rotting screws and crumbling pieces of plywood. Zeus was ragged, his coat hanging loosely over a skeletal body. Kimba’s claws grew out from her paws in every direction—the result of a botched declawing. A deceased domestic cat, thrown to the tigers for food but left untouched, festered in a haze of flies. Surrounded by piles of weeks-old excrement, another tiger was already dead.”
“It was one of the biggest seizures of wild animals in New York’s history.”
Big Cat Rescue saved 3 starving tigers from a New York “sanctuary” after they lost their USDA license and the animals were confiscated by the Sheriff’s Department… There are an estimated 10,000 - 20,000 privately owned big cats in the USA, cubs bred to be used as photo props and then sold as “pets” confined to tiny backyard cages, killed for their body parts and exotic meat trade or bounced around between different facilities.
Scientists from the Florida campus of The Scripps Research Institute
(TSRI) have found how a widely known but little-studied enzyme protects
brain cells in models of Parkinson’s disease.
These findings could provide valuable insight into the development of
drug candidates that could protect brain cells in Parkinson’s and other
The study, published recently online ahead of print by the journal Molecular and Cellular Biology, focuses on the enzyme known as serum glucocorticoid kinase 1 (SGK1).
“The overexpression of SGK1 provides neuron protection in both cell
culture and in animal models,” said Philip LoGrasso, a TSRI professor
who led the study. “It decreases reactive oxygen species generation and
alleviates mitochondrial dysfunction.”
Using a neurotoxin animal model of neurodegeneration, the study
showed that SGK1 protects brain cells by blocking several pathways
involved in neurodegeneration, deactivating other molecules known as
JNK, GSK3β and MKK4.
Increasing SGK1 offers a potential therapeutic strategy because, as
the study makes clear, there isn’t enough naturally occurring SGK1 to do
“Even though the levels of naturally occurring SGK1 increases in the
cell under stress, it was not enough to promote cell survival in our
neurodegeneration model,” said Sarah Iqbal, the first author of the
study and a member of the LoGrasso lab. “On the other hand, cell
survival mechanisms tend to dominate when more SGK1 is added to the
The LoGrasso lab plans to continue to explore SGK1 as a therapeutic possibility for Parkinson’s disease.
Remembering The Impetus Of “Irrational Exuberance” As We Approach Its 20th Anniversary
We are approaching the 20th anniversary of Alan Greenspan’s famous “irrational exuberance” speech. Many remember those two words but few remember their context:
Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past.
But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability.
Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.
In December of 1996, Greenspan was clearly beginning to worry about the economic fallout of a bursting asset bubble. Back then he had a front row seat and, in fact, a strong hand in creating the dotcom bubble, whether he admits it or not. He was so worried about the consequences of “irrational exuberance” that he declared these concerns “must be an integral part of the development of monetary policy.” And this was before he had even witnessed any of the actual economic consequences we have now lived with for two decades. Clearly, his worries were well founded but he wasn’t quite worried enough.
The financial well-being of entire generations has been permanently damaged. Think of the Baby Boomers whose retirement dreams turned to nightmares through two stock market crashes in less than a decade. Think of the Generation Xers whose dreams were shattered by the housing bubble and the mortgage crisis. As a group these latter folks, even though they are now entering their peak earnings years, are flat broke almost a decade after it all began. And the major media outlets wonder openly why the average American has next to nothing in savings. He was explicitly encouraged by the single most powerful institution on the planet to put his savings into great peril, time and again.
Now I should be clear that over the decade following this famous speech, while he remained Fed Chairman, he did nothing to incorporate these prescient concerns into Fed policy. Just the opposite. After the dotcom bubble burst he engineered the housing bubble to try to ameliorate the damage done by the first. It’s one thing to worry about the risks of financial bubbles you have a hand in creating; it’s something else to actually do something about them. So while we can admire his foresight we should not honor it by overlooking his cowardice in failing to do anything about it.
Since then, and with the benefit of witnessing the actual fallout of these epic busts, many at the Fed (and even more outside of it) have openly discussed this dilemma of directly addressing asset bubbles. Eric Rosengren, head of the Fed Bank of Boston, became the latest to openly echo Greenspan’s concerns regarding “irrational exuberance” in the financial markets. Robert Shiller won a Nobel Prize for work in this very area. Still, nothing has been done to actually address these massive economic risks. After 20 years and two bursting bubbles whose effects are still plaguing the economy it’s still nothing more than sporadic public hand wringing by the people with the power to do something about it.
In recent years the Fed has only doubled down on these policies by directly pursuing a “wealth effect.” Rather than give a boost to the broad economy, however, these central bankers have only accomplished an even greater and more pervasive financial asset perversion. Stocks, bonds and real estate have all become as overvalued as we have ever seen any one of them individually in this country. The end result of all of this money printing and interest rate manipulation is the worst economic expansion since the Great Depression and the greatest wealth inequality since that period, as well.
Someday, possibly soon, the public will finally decide it’s had enough of the escalating boom bust cycles the Fed has exacerbated, if not directly engineered, over the past couple of decades. Falling confidence in these technocrats and the resulting rising populism will serve as a clarion call for a new brand of Fed Chairman with the courage to finally address the glaring danger asset bubbles pose to financial stability and the long-term economic health of our nation. She will be the 21st century’s version of Paul Volcker. Rather than breaking the back of inflation in the traditional sense, she will break the cycle of unwarranted asset inflation at the direction of the Fed and all of its deleterious consequences. At least I hope it’s not irrational to believe so.
Meet KEISHA! … She’s been understandably grumpy since her arrival at Big Cat Rescue, after being starved and neglected at her previous home and then enduring a long drive from NY to FL, it’s going to take her a little longer to adjust…
But we’re confident after a few weeks at the sanctuary, eating a grrreat diet, followed up with vet care and lots of love from the volunteers she’ll be “chuffing” hello to us in no time
Never Say ‘Never’ When It Comes To The Financial Markets
“We’ve never had a decline in house prices on a nationwide basis.” -Ben Bernanke, July 2005
Just because something has never happened in the past doesn’t mean it can’t happen in the future. Believing this to be true is just another form of recency bias or extrapolation which, as I have written, is the single greatest mistake investors make. Furthermore, the sort of confidence that underlies the willingness to use the word “never” can be a wonderful sentiment signal on its own.
“In the investment world when you hear ‘never,’ as in rates are ‘never’ going up, it’s probably about to happen.” –Jeff Gundlach
This certainly proved true after Ben Bernanke famously used the word back in the summer of 2005. Real estate prices were just beginning to embark on their very first year-over-year decline on a nationwide basis just as he was denying the very possibility. The fact that Dr. Bernanke was so comfortable extrapolating the historical record indefinitely into the future and to disregard all of the evidence of a bubble should in itself have served as a clear warning.
More recently we have seen this sort of confidence appear in the bond market. Over the summer I wrote a pair of posts tracking what I thought was an ongoing “blowoff” in bonds (here and here). Since then I’ve collected a number of headlines that reflect exactly the sort of confidence that inspires the word “never” (or, in some cases, “forever”).
Normal Interest Rates May Never Return –Business Insider, May 11
Why We’ll Never See ‘Normal Interest Rates Again –Investing.com, July 11
Why Ultra-Low Interest Rates Are Here To Stay –WSJ, July 13
Markets Now Expect Inflation To Remain Low…Forever –WSJ, August 25
What If Rates Never Rise? -Financial Times, September 30
Certainly, Jeff Gundlach, widely considered the “Bond King,” seems to think this sort of sentiment is likely to mark a long-term top in the market. And he’s not alone. Ray Dalio, another major player in the world of bonds, recently warned about the awful risk/reward setup they currently offer calling them a “very bad deal.”
“It would only take a 100 bp rise in Treasury yields to trigger the worst price decline in bonds since the 1981 crash.” –Ray Dalio
For those unaware of how this bond market math works, the WSJ recently created a helpful calculator here:
Another thing investors may want to consider is the fact that equity prices over the past several years have become very sensitive to interest rates, as well. If interest rates were to rise again, in defiance of all of the “never” calls we have seen recently, it would likely mean equity valuations would fall at the same time. Ray Dalio again explains:
If interest rates rise just a little bit more than is discounted in the curve it will have a big negative effect on bonds and all asset prices, as they are all very sensitive to the discount rate used to calculate the present value of their future cash flows. That is because with interest rates having declined, the effective durations of all assets have lengthened, so they are more price-sensitive.
Here, too, we have seen investor confidence soar. The explosion in the popularity of passive investing in recent years has been enabled by growing faith in a single idea (emphasis theirs, not mine): “The S&P 500 has NEVER suffered a loss in a 20-year period.” Clearly, investors are once again extrapolating history out indefinitely into the future in assuming they “can’t lose” so long as they have a long enough time horizon.
However, as Keynes famously noted, “in the long run we are all dead.” I think Japanese equity investors would likely endorse this idea. It’s been nearly 30 years since their major stock market index peaked. And before you say that can “never” happen here you might want to consider the implications of that sort of confidence.
Say hello to ZEUS! This handsome old man is settling in remarkably well to his new home at Big Cat Rescue, “chuffing” away to our volunteers, taking a dip in his pool and laying around soaking up the Florida sun!