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When the trends reverse themselves

A few years ago, Nassim Nicholas Taleb wrote a book called The Black Swan that created something of a sensation and established him as the go-to guy for risk management.

The book wasn't long, somewhat repetitive, but it did make important points about human bias and imperfect information.  Basically, we don't fully understand risk and so we don't properly prepare for it.  The 'black swan' of the title was the discovery in Australia of actual black swans - something that exists nowhere else in the world.  In fact, when they were found, it was shocking because of course swans are white.

A "black swan event" is therefore a rare event with significant consequences that no one even thought about, let alone prepared for.  The fact that it is rare doesn't mean impossible, which was his point.  Taleb has gone on to talk about fragility and the ineptitude of the current ruling classes.  His politics are all over the place, but he's brought up important points.

One of them is that trends only last until they change, and it's not always obvious when that will be.  Trend lines themselves are backwards-looking and therefore prone to misleading people if a big change is about to hit.  He gives the classic example of a sudden change in the trend by charting the weight gain (and health) of a Thanksgiving turkey, which shows steady improvement right up until it becomes dinner.

The key point is that the turkey doesn't know when that will happen or even if it will happen.  The turkey just goes on eating and getting bigger. 

So it is with other trends.  For years it was assumed that globalism meant that manufacturing jobs have to go overseas and will never come back.  Then it became clear that this trend wasn't an impersonal force of nature but the result of deliberate policy choices.  Change those choices, and the trend reverses itself.

The Catholic Church has watched with alarm as the number of active priests dwindled over the years.  One argument was that the requirements were too strict for the modern age and the doctrine to antiquated.  Married priests and maybe female clergy were the only options open.

Pope Benedict XVI disagreed and instead focused on stronger doctrine and also raising the standards for clergy, including increased accountability to prevent future abuses.

The result is that more people are choosing the vocations.  Note that I said "people" because women are also choosing to join the holy orders in numbers not seen in my lifetime.  Even before my conversion I recall the closure of various abbeys due to lack of members and yet now new ones are opening up.

Interestingly, the new members wear the traditional habit, a departure from plain-clothes nuns of the 80s and 90s.

Overall, the trend is still downward because it will take years to make up for the 'lost generation' of priests, but it is now moving in the right direction.

My point is that its easy to get locked into a fatalistic approach on so many things and simply assume an outcome is assured based on trend.  A better approach is to look at why things are trending that way and whether it can continue.  I notice housing prices are now even hotter than they were in 2008.  People looking for houses tell me that listings sell the day they go up and people have to bid over the asking price.

That's another trend that can't last forever.

 

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