Australia is a fascinating place not least for some of its quaint (read staggeringly unrealistic) attitudes to things. I live in an area where English cottage gardens are often the preferred mode of vegetative display. And each year these gardens that are wonderfully manicured during spring are burnt to a crisp during our ferocious summers. Which is why my front yard is couple of one tonne rocks and manicured stones. This cycle of planting followed by immolation repeats itself year after year with the lessons of our climate going unheeded. My neighbours have a delusion and it is a delusion that is also shared my many conservative politicians in this country. They believe that Australia is a small island anchored somewhere off the coat of Cornwell. It must come as a huge shock to them when they look at a map and see that Australia is a bloody great big chunk of land sitting at the bottom of South East Asia.
However, our maps also share a slightly lesser version of this same delusion. When you look at a map of Australia you notice that the green strip along the coast seems to stretch for in some cases a thousand kilometres inland. Clearly the people who draw these maps have never taken a trip 100 kilometres inland in Victoria and noticed that it seems to be awfully dry and brown for most of the time. Go more than 100 kilometres and you start to wonder how anyone could farm bits of the country. Granted there are green valleys here and there but a few hours in the car gets you to the aptly named Little Desert and the name does give it away. Fly from Brisbane to Perth and you will see nothing but red dirt for hours on end. Somehow the notion of all the green bits seems a bit false.
The notion that struck me was that drought seems to be the default setting in Australia so I thought I would see if this notion held up and I came up with he following list of droughts of the past 100+ years
2018 – TBA
In fact if you look at the interactive rainfall map on the ABC website you will see that since 1900 there has not been a period where parts of the country have not received significant less rain than expected. So, drought does seem to be the default state but intriguingly this notion does not sink into people’s heads and it is here that I take a pot shot at farmers who seem blissfully unaware of this issue until it roars up and bites them on the arse. And they just like the people in my street with their English cottage gardens seem surprised. However, unlike the people in my street they put their hand out for relief and no doubt we will be treated to yet another FarmAid concert where country and western singers I have never heard of will sing songs lamenting the loss of Myrtle the pig who was the love of their life who left them for someone else with a nicer a tractor and four of their own teeth. I cannot stand the socialise the losses and privatise the gains mentality that seems to permeate all levels of Australian business. if you cant make it work piss off and let someone else have a go and that includes everything from massive mining projects to farmers and everyone in between.
So, what’s the point of this missive other than taking a swipe at Australian businesses that are sub optimal and want the government to bail them out whilst they send their kids to private boarding schools. The point is that delusion or an inability to accept reality is a key factor in people’s success or lack thereof. Traders are no different. For example, LB and I have seen a rash of people who have after attending a one-day seminar on cryptocurrencies decided to leave their job the following Monday because they have been told that they can make 100k per year with a 10k bank. This decision which is monumental was never subjected to any critical analysis. It was just accepted as a given. To give you an indication of the delusional behaviour by traders check out this loan statement from a trader who took out a 127K loan to trade crypto and is currently down 85%.
Rational thinking is extraordinarily difficult when emotions and a perception of missing out intermix with one another. Combine that with just being plain stupid and you have a recipe for disaster.