(2018-02-05) Hunt Too Clever By Half

Ben Hunt: Too Clever By Half. The smartest animals on my farm aren’t really on my farm at all. They’re the coyotes who live in the woods.

We have a really big invisible fence for the dogs

it’s a smart dog like Maggie the German Shepherd or a … shall we say … “special” dog like Sam the Sheltie, after a few weeks (Maggie) or a few hours (Sam) they will forget where the fence exists if they stop wearing the collar.

Not so the coyotes

they intentionally leave their scat on their side of the invisible fence

The coyotes are scheming; my dogs have no idea what scheming is.

I feel bad for the real-life coyotes in exactly the same way that 7-year-old me felt bad for Wile E. Coyote and 30-year-old me felt bad for The Brain (not a coyote, of course, but still). They put SO MUCH EFFORT into their plans and machinations for taking over the world, and it all comes to naught

The truth is that domestication makes any animal dumb

Unfortunately, coyotes are too smart for their own good.

They are, to use a post-modern, TV reality show lingo, not good in the meta-game. And the meta-game has turned against the coyotes with a vengeance.

in our pre-farm life, where we had a yard like any other yard and were part of a neighborhood like any other neighborhood, we still had run-ins with coyotes

What’s the meta-game? It’s the game of games. It’s the larger social game

the coyotes came wandering around our yard. We had (very) small kids at the time. So my wife dutifully brought out the coffee can she had prepared, and rushed out into the yard to confront the coyotes

It wasn’t scared

Almost derisively, the lead coyote sloooowly turned around and sauntered back towards the woods, leading the others away.

A strategy of Skirmish and scheming feints and counter-feints is something that coyotes are really good at. They will “win” every time they play this individual mini-game with domesticated dogs and domesticated humans shaking coffee cans half-filled with coins. But it is a suicidal strategy for the meta-game. As in literally suicidal. As in you will be killed by the animal control officer who HATES the idea of taking you out but is REQUIRED to do it because there’s an angry posse of families who just moved into town from the city

The smartest play for coyotes in the meta-game is never to Skirmish with humans.

But no, coyotes are too clever by half

It’s their nature to play the scheming mini-game. They can’t help themselves. And that’s why the coyotes always lose. It’s always the meta-game that gets you.

there’s one other (supposedly) clever, non-domesticated animal I need to introduce into this story. That’s the raccoon.

Raccoons are simply criminals. And they’re not that smart. I’d put our barn cat up against a raccoon any day on any sort of cognitive test.

When they push their scheming and stealing too far, coyotes and raccoons ALWAYS end up getting killed by the farmer — regretfully in the case of coyotes, remorselessly in the case of raccoons

Every truly disruptive discovery or innovation in history is the work of coyotes.

We all know the type. Many of the readers of this note ARE the type.

Financial innovation is no exception. And this is Reason #1 why financial innovation ALWAYS ends in tears

Financial innovation, more than any other sort of innovation, attracts the raccoons — con men and hucksters at best, outright thieves at worst.

Financial innovation is always and in all ways one of two things — a new way of securitizing something or a new way of leveraging something.

The biggest market disasters happen when both leverage and securitization get mixed up with the same clever scheme

as when new ways of leveraging and securitizing U.S. residential mortgages were developed in 2001

made billions of dollars in profits for Wall Street through hundreds of clever coyote schemes. More than a few raccoons got involved along the way. And then it broke the world in 2008. (Credit Crisis 2008)

Turns out that Bitcoin a AAA-rated tranche of Alt-A mortgages wasn’t the store of value that coyote-math “proved” it was

Many of the coyotes involved with this classic example of financial innovation gone awry are (professionally) dead

Surprisingly few of the raccoons involved are (professionally) dead.

And that brings me to what is personally the most frustrating aspect of all this. The inevitable result of financial innovation gone awry, which it ALWAYS does, is that it ALWAYS ends up empowering the State. And not just empowering the State, but empowering the State in a specific way, where it becomes harder and harder to be a non-domesticated, clever coyote, even as the non-clever, criminal raccoons flourish.

The State — particularly the Nudging State — cares very much about co-opting an Idea That Changes Things, whether it changes things in a modest way or massively. It cares very much about coyote population control.

What’s the alternative to playing Skirmish in the meta-game?

It’s this: to be an arborist.

It’s this: to be as wise as serpents and as harmless as doves

Coyotes can change the world. Coyotes WILL change the world. But not if they misplay the meta-game. Not if they hang out with raccoons.