Paris – The big news over the weekend was that the Paris meeting of climate foxes produced an agreement… They will spend $16.5 trillion of other people’s money to raise more chickens.

“Forget ‘Big Oil,’” proclaimed a Bloomberg headline, “Get Ready for ‘Big Solar.’”

We don’t have any knowledge or prejudice on the subject. But it sounds like the fix is in.

Like the War on Drugs, the War on Poverty, and the War on Terror, we predict that the War on Carbon Emissions will prove successful – but only for the warriors.

Near Certain

But how do we know? How do we know anything?

The future, as we remind ourselves almost daily, is a movie that hasn’t been released yet.

Most people strongly believe – they are “near certain” – that the sky will light up tomorrowmorning just like it does every day. No one knows for sure. But it is probably a mistake to bet against it.

Likewise, if you are working in one of Baltimore’s poor neighborhoods, and you leave your tools in an open van, don’t expect them to be there when you come back. Just sayin’…

Markets follow patterns. They go up. They go down. Economies, too, have their good hair days and their bad hair days.

There are cycles in all aspects of human life. We are born. But we die, too. Our cities, countries, and empires flourish… and then stagnate and decay. We breathe in… and out. We are happy… then we get the blues.

Long observed and carefully described are the cycles in the credit market. Interest rates – which track the ups and downs – do not go only in one direction. Sometimes, they back up. They change their minds and turn around.

One Direction

You can see why this has to be so…

Imagine if interest rates only went in one direction. Investors would know the future. They would anticipate the direction of the market (correctly) and buy investments to take advantage of it.