Death, Pessimism & Frontier Markets

Contemplating death is the New Year’s resolution to end all resolutions. Why? Because it sharpens our focus, allows us to clarify what truly matters—and to craft our goals and priorities around that—anchors us in the present moment, and deepens our appreciation for all that life has to offer, right here and now.

Remembering that we are going to die goes hand-in-hand with another key realization: we have no way of knowing how much time we have left. We might die in three years, or 38 years, or a few months from now. So, what should we do with the time we have—with our one wild and precious life?

Humans have long known of the power of this practice. We’ve been contemplating death for over 100,000 years, from the earliest archeological burial artifacts to Buddhist maraṇasati, from Stoic philosophy to ancient Egyptian funerary texts.

It’s only in the modern Western world that we began to see this practice as depressing or morbid. We lost our relationship with death, and somewhere along the way, we stopped living fully too.

Here are 11 science-backed benefits of taking the time to think about death:

Cut through your own bullshit – helps you overcome excuses and stop wasting time on what’s not serving you
Clarify your values – less bullshit = more clarity
Motivation to act – gives you permission to stop living on autopilot or within societal expectations and start living in alignment with what actually feels true
Find a deeper purpose – research shows that being reminded of our mortality triggers a psychological drive to seek or restore meaning in life.
Be more present – when you fully accept that everything, and I mean everything, will ultimately be taken from you, the present moment suddenly becomes sacred
Gratitude – like anything else rare and precious, when we remember that life is fleeting, we value it more
Stronger relationships – when you remember that one day, everyone you love will die, and so will you, your relationships change
Empathy and compassion – death is the great equalizer
Unlocks creativity – gives rise to an intense drive to make your own little dent on the universe, to leave something behind to say that you were here.
Keep your ego in check – it’s a reminder that you’re not the center of the universe, the desire to impress starts to dwindle, liberating you from feeling like you need to be the smartest, best, most admired person in the room – instead, you start to show up as a real person: flawed, fleeting, and free
Take more risks – the only thing scarier than dying is never having really lived, so you’re more likely to pursue the life you’ve been dreaming of.

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Interest rates have begun to come down. Inflation has mostly subsided, and the real economy is still doing decently well. So why are American consumers more pessimistic than they were during the depths of the Great Recession or the inflation of the late 1970s?

It’s possible to spin all sorts of ad hoc hypotheses about why consumer sentiment has diverged from its traditional determinants. Perhaps Americans are upset about social issues and politics, and expressing this as dissatisfaction about the economy. Perhaps they’re mad that Trump seems to be trying to hurt the economy. Perhaps they’re scared that AI will take their jobs. And so on.

Here’s another hypothesis: Maybe Americans are down in the dumps because their perception of the “good life” is being warped by TikTok and Instagram.

I’ve been reading for many years about how social media would make Americans unhappier by prompting them to engage in more frequent social comparisons. In the 2010s, as happiness plummeted among young people, the standard story was that Facebook and Instagram were shoving our friends’ happiest moments in our faces — their smiling babies, their beautiful weddings, their exciting vacations — and instilling a sense of envy and inadequacy.

However, note that during the 2010s, consumer confidence was high. Even if people were comparing their babies and vacations and boyfriends, this was not yet causing them to seethe with dissatisfaction over their material lifestyles. But social media today is very different than social media in the 2010s. It’s a lot more like television — young people nowadays spend very little time viewing content posted by their friends. Instead, they’re watching an algorithmic feed of strangers.

There were rich people like that in 1920, or 1960, or 1990. But you almost never saw them. Maybe you could read about them in People magazine or watch a TV show about them. But most people simply didn’t have contact with the super-rich. Now, thanks to social media, they do.

But even more subtle might be the influencers who are merely upper class rather than spectacularly rich. These people aren’t living the lifestyle of a ultra-rich influencer, yet most of what you’re seeing in these photos and videos is economically out of reach for the average American.

These are not obviously rich people — they’re more like the 5% or the 1% than the 0.01%. Their lifestyles are out of reach for most, but not obviously out of reach. Looking at any of their videos, you might unconsciously wonder “Why don’t I live like that?”.

Americans were always shown examples of aspirational lifestyles on TV shows. Yet on some level, Americans might have realized that that was fiction; when you see a lifestyle influencer on TikTok or Instagram, you feel like you’re seeing simple, bare-bones reality.

The rise of social media influencers has scrambled our social reference points. Humans have always compared ourselves to others, but before social media, we compared ourselves to the people around us — our coworkers, friends, family, and neighbors.

Those classic reference points tended to be people who were roughly similar to us in income — maybe a little higher, maybe a little lower, but usually not hugely different.

But perhaps even more importantly — we were able to explain the differences we saw. In 1995, if you knew a rich guy who owned a car dealership, you knew how he made his money. If you envied his big house and his nice car, you could tell yourself that he had those things because of hard work, natural ability, willingness to accept risk, and maybe luck. The “luck” part would rankle, but it was only one factor among many. And you knew that if you, too, opened a successful car dealership, you could have all of those same things.

But now consider looking at an upper-class social media influencer. It’s not immediately obvious what they do for work, or how they could afford all those nice things.

Not only can you not explain the wealth you’re seeing on social media, but you probably don’t even think about explaining it. It’s just floating there, delocalized, in front of you — something that other people have that you don’t. Perhaps you make it your reference point by default, unconsciously and automatically.

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Frontier markets represent the world’s least developed investable economies,
offering exposure to countries with young populations and high economic growth
potential, yet smaller, less liquid markets. Over time, the composition of the MSCI
Frontier Markets Index has shifted meaningfully, with Gulf countries like Kuwait and
Qatar having “graduated” to emerging status and Asian and European nations now
taking greater prominence. Frontier markets remain dominated by financial services,
with larger weights to real estate, energy, and materials, reflecting other structural
differences compared with emerging and developed markets.

The MSCI Frontier Markets index is one of the most widely used indices related to
frontier markets. It contains approximately 238 stocks spread across 28 countries.1
The top three countries in the benchmark were Vietnam, Morocco, and Romania,
which collectively accounted for just over 50% of the index.

To better understand how growth expectations within frontier markets compare
with growth across the world, it is helpful to compare their GDP growth rate
expectations to developed and emerging markets.

Despite their strong expected GDP growth rates, frontier markets have not translated
that economic momentum into equivalent corporate earnings performance. Earnings
per share growth has stagnated even as valuations have remained low relative to
developed and emerging markets. This combination presents both opportunities
and risks. Value-oriented investors may find attractive entry points, but persistent
structural inefficiencies and volatility underscore the need for careful analysis.

Frontier markets have historically traded at lower valuations compared to developed
markets and similar-to-lower valuations than emerging markets.

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We compiled a new database of 266,000 monthly prices of foreign-currency government bonds traded in London and New York between 1815 and 2016, covering up to 91 countries.

Our main insight is that, as in equity markets, the returns on external sovereign bonds have been sufficiently high to compensate for risk. Real ex-post returns average more than 6 percent annually across two centuries, including default episodes, major wars, and global crises.

This represents an excess return of 3-4 percent above US or UK government bonds, which is comparable to stocks and outperforms corporate bonds. Central to this finding are the high average coupons offered on external sovereign bonds.

1815 – 2016:

1995 – 2016:

Dropped Calls, Polymarket & Passwords

That Dropped Call With Customer Service? It Was on Purpose. Endless wait times and excessive procedural fuss—it’s all part of a tactic called “sludge.”

In the 2008 best seller Nudge, the legal scholar Cass R. Sunstein and the economist Richard H. Thaler marshaled behavioral-science research to show how small tweaks could help us make better choices. An updated version of the book includes a section on what they called “sludge”—tortuous administrative demands, endless wait times, and excessive procedural fuss that impede us in our lives.

Sludge is often intentional,” said a professional that works in the customer service call center industry. “Of course. The goal is to put as much friction between you and whatever the expensive thing is. So the frontline person is given as limited information and authority as possible. And it’s punitive if they connect you to someone who could actually help.”

Helpfulness aside, I mentioned that I frequently felt like I was talking with someone alarmingly indifferent to my plight.

“That’s called good training,” Tenumah said. “What you’re hearing is a human successfully smoothed into a corporate algorithm, conditioned to prioritize policy over people. If you leave humans in their natural state, they start to care about people and listen to nuance, and are less likely to follow the policy.”

For some people, that humanity gets trained out of them. For others, the threat of punishment suppresses it. To keep bosses happy, Tenumah explained, agents develop tricks. If your average handle time is creeping up, hanging up on someone can bring it back down. If you’ve escalated too many times that day, you might “accidentally” transfer a caller back into the queue. Choices higher up the chain also add helpful friction, Tenumah said: Not hiring enough agents leads to longer wait times, which in turn weeds out a percentage of callers. Choosing cheaper telecom carriers leads to poor connection with offshore contact centers; many of the calls disconnect on their own.

“No one says, ‘Let’s do bad service,’” Tenumah told me. “Instead they talk about things like credit percentages”—the number of refunds, rebates, or payouts extended to customers. “My boss would say, ‘We spent a million dollars in credits last month. That needs to come down to 750.’ That number becomes an edict, makes its way down to the agents answering the phones. You just start thinking about what levers you have.”

“Does anyone tell them to pull those levers?” I asked.

“The brilliance of the system is that they don’t have to say it out loud,” Tenumah said. “It’s built into the incentive structure.”

That structure, he said, can be traced to a shift in how companies operate. There was a time when the happiness of existing customers was a sacred metric. CEOs saw the long arc of loyalty as essential to a company’s success. That arc has snapped. Everyone still claims to value customer service, but as the average CEO tenure has shortened, executives have become more focused on delivering quick returns to shareholders and investors. This means prioritizing growth over the satisfaction of customers already on board.

Customers are part of the problem too, Tenumah added. “We’ve gotten collectively worse at punishing companies we do business with,” he said. He pointed to a deeply unpopular airline whose most dissatisfied customers return only slightly less often than their most satisfied customers. “We as customers have gotten lazy. I joke that all the people who hate shopping at Walmart are usually complaining from inside Walmart.”

In other words, he said, companies feel emboldened to treat us however they want. “It’s like an abusive relationship. All it takes is a 20 percent–off coupon and you’ll come back.” Supervisors don’t tell customer service workers to deceive or thwart customers. But having them get frustrated and give up is the best way to meet numbers.

Sometimes they intentionally drop a call or feign technical trouble: “‘I’m sorry, the call … I can’t … I’m having a hard time hearing y—.’ It’s sad. Sometimes they drag out the call enough that customers get agitated, or say things that get them agitated, and they hang up.”

Even if an agent wanted to treat callers more humanely, much of the friction was structural, a longtime contact-center worker named Amayea Maat told me. For one, the different corners of a business were seldom connected, which forced callers to re-explain their problem over and over: more incentive to give up.

“And often they make the IVR”—interactive voice response, the automated phone systems we curse at—“really difficult to get through, so you get frustrated and go online.” Employees described working with one government agency that programmed its IVR to simply hang up on people who’d been on hold for a certain amount of time.

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On June 12th, an anonymous trader opened a new account on Polymarket, an anonymous internet betting site that uses cryptocurrency to obscure the source of money. The new trader was interested in betting on one topic: whether the Israeli military would strike Iran within the next 24 hours, by Friday, June 13th.

As the 13th approached, most people thought it was unlikely, but this new account seemed convinced that airstrikes were imminent. The trades started during a one-hour period around 12pm; $1,728 of bets in the first one, then another $311, $280, $560. Then, between 10pm and midnight, with time running out, they accelerated their betting, showing their confidence by ramping up the bets, putting about $20,000 in total at risk.

Three and a half hours later, Israel struck Iran in a surprise attack—and the Polymarket trader cashed out. They had made a total of $134,000 in profits. After taking their winnings, they closed the account, never trading again. This was probably a case of geopolitical insider trading. Someone who knew that the strike was imminent decided to use that knowledge to make a lot of money anonymously through online betting markets.

This is pretty dystopian: individuals, state actors, even terrorist groups can decide to bet on their own behavior, even their own uses of violence. There’s nothing stopping someone who’s a high-profile political actor—or the people around them—from betting on an outcome, then making comments or posting something on, say, Truth Social or X, that inevitably affects public perceptions about a likely course of action. They can drive the price up or down at will, knowing full well that they can ultimately decide whether the value of a “share” goes to $0.00 or to $1.00. And then, they can anonymously cash out, with nobody the wiser. It’s the Wild West of insider trading.

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Nearly half of U.S. grandchildren (47%) live within 10 miles of a grandparent. Of those, significant numbers live even closer: 21% live between 1 and 5 miles, and 13% live within a walkable distance of 1 mile.

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The blue horizontal bars in the picture below are parallel to each other:

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Ranked: The World’s Most Common Passwords. The data comes from NordPass, which analyzed the most frequently used passwords based on a 2.5 terabyte database of credentials exposed by data breaches. All of the passwords below would take a hacker less than 1 second to crack.

According to NordPass, your password should be at least 20 characters long and include uppercase and lowercase letters, numbers, and special symbols. They suggest that you never reuse passwords. If one account were to be compromised, other accounts that share the same password could also be at risk.

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American household leverage is the lowest in 50 years. The leverage ratio is liabilities (mortgage, auto, credit, student loans) divided by the price of assets they own (stocks, bonds, real estate,).

Stock price gains help the top 10% wealthiest families disproportionately, but the biggest improvement in the leverage ratio above for most American families comes from home prices: