5. Mega Cap ETF No Weakness Yet…..Trading 20% Above 200-Week Moving Average
6. 2023 Worst Year in a Decade for VC-Backed Acquisitions.
Pitchbook Blog VCs and market participants have been predicting an uptick in M&A activity for at least six quarters, but their forecasting powers keep failing them.
2023 turned out to be the worst year in a decade for acquisitions of VC-backed companies, according to the Q4 2023 PitchBook-NVCA Venture Monitor. Companies purchased nearly 700 startups at a combined value of $26.7 billion, about a quarter of the value sold during the 2021 peak.
8. 2024 -Americans Will Spend $32B Less than 2023….$79B Less than 2022 on Gas.
From Stephen Kroculick Jefferies According to GasBuddy projections — which were very accurate for 2023 — US gas prices will average $3.38 a gallon in 2024. This would be a significant improvement from 2023’s average of $3.51 a gallon, and an even bigger drop from 2022’s average of $3.95. Gauging the impact of this, GasBuddy expects Americans will spend about $32 billion less on fuel than in 2023 and $79 billion less than in 2022. “Next year should represent a continued march towards what most Americans would consider normal prices at the pump,” GasBuddy’s head of petroleum analysis told CNN in a phone interview
5. Mega Cap ETF No Weakness Yet…..Trading 20% Above 200-Week Moving Average
6. 2023 Worst Year in a Decade for VC-Backed Acquisitions.
Pitchbook Blog VCs and market participants have been predicting an uptick in M&A activity for at least six quarters, but their forecasting powers keep failing them.
2023 turned out to be the worst year in a decade for acquisitions of VC-backed companies, according to the Q4 2023 PitchBook-NVCA Venture Monitor. Companies purchased nearly 700 startups at a combined value of $26.7 billion, about a quarter of the value sold during the 2021 peak.
8. 2024 -Americans Will Spend $32B Less than 2023….$79B Less than 2022 on Gas.
From Stephen Kroculick Jefferies According to GasBuddy projections — which were very accurate for 2023 — US gas prices will average $3.38 a gallon in 2024. This would be a significant improvement from 2023’s average of $3.51 a gallon, and an even bigger drop from 2022’s average of $3.95. Gauging the impact of this, GasBuddy expects Americans will spend about $32 billion less on fuel than in 2023 and $79 billion less than in 2022. “Next year should represent a continued march towards what most Americans would consider normal prices at the pump,” GasBuddy’s head of petroleum analysis told CNN in a phone interview
4. China Weighs Stock Market Rescue Package Backed by $278 Billion
BABA Holding 2022 Lows
5. Everybody is Working and Gasoline Dropped from $5 to $3
6. Demographics is Destiny…Japan 8 Million Abandoned Homes
Business Insider-Why Japan has more than 8 million cheap abandoned houses that people are renovating into dream homes
More than 8.5 million abandoned homes in rural Japan are creating a “ghost town” problem.
A push into the city and population decline are two reasons these homes sit empty.
Locals see them as a burden, while foreigners view them as an opportunity to own property cheaply.
Japan has millions of abandoned rural houses for sale.
The glut delights foreigners who’ve been able tobuy one for as little as $23,000. But underlying the surplus are meaningful shifts in Japan’s culture. Demographic and economic patterns — including a shrinking population and migration from the countryside to cities — are combining to create a “ghost town” problem in Japan.
There aremore than 8.5 million akiya, or abandoned homes, in rural Japan, according to the country’s 2018 Housing and Land Survey, its most recent on record. By some counts, there are many more. The Nomura Research Institute, or NRI, pegsthe number closer to 11 million. The institute predicts akiya could exceed 30% of homes in Japan by 2033.
For foreigners looking for a change of scenery, akiya are an opportunity to be a homeowner abroad on the cheap. Some foreigners have even turned to akiya to enrich themselves by launchingshort-term-rental businesses.
“The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of miseries.” –Winston Churchill
Socialism is a terrific idea in theory. Who would not want everyone in society to have a house with a white fence, the job of their dreams, 2.5 kids and a dog? But plain vanilla socialism has failed every single time it has been implemented, and it turned each of those countries into a totalitarian state: Cuba, the Soviet Union, Yugoslavia, Venezuela — the list goes on.
In a socialist state, success is pushed down, and failure is elevated — this is how equality of outcome is created. In the Soviet Union’s version of plain vanilla socialism, we were taught to hate the wealthy and empathize with the poor. This empathy was easy for us because everyone (with the exception of the tiny ruling-class bureaucrats) was poor.
Capitalism does not offer the sexy, utopian promise of socialism, but it works in practice. Capitalism has lifted billions out of poverty; but it is now under threat, ironically, from those who have benefited the most from it — academics. Universities have been among the biggest beneficiaries of the wealth created by capitalism.
As I am writing this, I am reminded of Margaret Thatcher’s “Socialism is a great idea until you run out of other people’s money.”
Universities used to be spartan gyms for our minds, places where opposing ideas collided and gave birth to new ones and where our thinking got challenged through healthy debate. This growth came with healthy pain, the type that accompanies and stimulates intellectual growth.
Today, many universities have been turned into day spas, where for $300,000 a student’s mind will be pampered and coddled. Now they are “safe places” from opposing ideas, which are considered as microaggressions. This is where free speech goes to die, unless it calls for the genocidal extermination of Jews; then you can speak your mind.
College administrations are afraid to upset their spa customers (sorry, I meant students). They are not focused on challenging their thinking (the point of education) and producing the brightest but are instead fixated on making students feel better about themselves and giving them their money’s worth.
I was not surprised to learn that socialism is slowly poisoning our universities, but I was surprised by its new avenue — the socialization of grades. Professors at a local law school are required to grade to a B+. When professors submit their grades, if the average is below a B+, the system will reject it. The university is afraid of making students feel bad about a low, albeit deserved, grade and wants every student to have a high grade-point average upon graduation.
However, what is inflation for one group is deflation for another. This practice punishes hardworking students, as their work may result in a lower grade than they deserve, compared to classmates who are preoccupied with attending “TikTok University” during lectures.
Universities are on a quixotic mission to right a wrong — they are fighting against grade inequality. This is what socializing (equalizing) outcomes looks like. In fact, this seemingly innocent practice of equally high grades has the familiar ring of a Karl Marx slogan that I heard endlessly in the Soviet Union: “From each according to his abilities, to each according to his needs.” Law students need a B+, so they get a B+.
With each graduating class, our capitalistic (equal-opportunity) society is being slowly diluted by equal-outcome dogma (socialism).
Grade inflation is happening in virtually every college across the country, but colleges should not receive all the blame for this, as unfortunately it starts in high schools, which are suffering through super grade inflation — grades have gone up while reading and math skills have fallen (with minorities experiencing the largest grade inflation).
Bad (deserved) grades are a necessary part of education. How else would you know that you had not learned something as well as you thought you did? I failed English as a freshman in college. I had been in the US for two years. My English was objectively horrible. I’m glad I didn’t receive special (woke) treatment for being “fresh off the boat.” I studied a lot harder, retook the class and passed it my senior year. If I had not, my English would not have improved and I would not have written several books or received national awards for writing.
The beauty of the Declaration of Independence is that you are guaranteed the “pursuit of happiness” — you are given an equal chance to pursue it. You are not guaranteed the outcome, just the opportunity. There is enormous value, and yes even happiness and meaning in the pursuit of happiness. This pursuit will often take you down a harder road, but it will result in the best version of you and bring a sense of pride and accomplishment.
1. Tesla -15% Year to Date
2. 2023 Extreme Daily S&P Moves Fall in Normal Range
VIX at $12 but 2023 normal range -Nasdaq Dorsey Wright
4. China Weighs Stock Market Rescue Package Backed by $278 Billion
BABA Holding 2022 Lows
5. Everybody is Working and Gasoline Dropped from $5 to $3
6. Demographics is Destiny…Japan 8 Million Abandoned Homes
Business Insider-Why Japan has more than 8 million cheap abandoned houses that people are renovating into dream homes
More than 8.5 million abandoned homes in rural Japan are creating a “ghost town” problem.
A push into the city and population decline are two reasons these homes sit empty.
Locals see them as a burden, while foreigners view them as an opportunity to own property cheaply.
Japan has millions of abandoned rural houses for sale.
The glut delights foreigners who’ve been able tobuy one for as little as $23,000. But underlying the surplus are meaningful shifts in Japan’s culture. Demographic and economic patterns — including a shrinking population and migration from the countryside to cities — are combining to create a “ghost town” problem in Japan.
There aremore than 8.5 million akiya, or abandoned homes, in rural Japan, according to the country’s 2018 Housing and Land Survey, its most recent on record. By some counts, there are many more. The Nomura Research Institute, or NRI, pegsthe number closer to 11 million. The institute predicts akiya could exceed 30% of homes in Japan by 2033.
For foreigners looking for a change of scenery, akiya are an opportunity to be a homeowner abroad on the cheap. Some foreigners have even turned to akiya to enrich themselves by launchingshort-term-rental businesses.
“The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of miseries.” –Winston Churchill
Socialism is a terrific idea in theory. Who would not want everyone in society to have a house with a white fence, the job of their dreams, 2.5 kids and a dog? But plain vanilla socialism has failed every single time it has been implemented, and it turned each of those countries into a totalitarian state: Cuba, the Soviet Union, Yugoslavia, Venezuela — the list goes on.
In a socialist state, success is pushed down, and failure is elevated — this is how equality of outcome is created. In the Soviet Union’s version of plain vanilla socialism, we were taught to hate the wealthy and empathize with the poor. This empathy was easy for us because everyone (with the exception of the tiny ruling-class bureaucrats) was poor.
Capitalism does not offer the sexy, utopian promise of socialism, but it works in practice. Capitalism has lifted billions out of poverty; but it is now under threat, ironically, from those who have benefited the most from it — academics. Universities have been among the biggest beneficiaries of the wealth created by capitalism.
As I am writing this, I am reminded of Margaret Thatcher’s “Socialism is a great idea until you run out of other people’s money.”
Universities used to be spartan gyms for our minds, places where opposing ideas collided and gave birth to new ones and where our thinking got challenged through healthy debate. This growth came with healthy pain, the type that accompanies and stimulates intellectual growth.
Today, many universities have been turned into day spas, where for $300,000 a student’s mind will be pampered and coddled. Now they are “safe places” from opposing ideas, which are considered as microaggressions. This is where free speech goes to die, unless it calls for the genocidal extermination of Jews; then you can speak your mind.
College administrations are afraid to upset their spa customers (sorry, I meant students). They are not focused on challenging their thinking (the point of education) and producing the brightest but are instead fixated on making students feel better about themselves and giving them their money’s worth.
I was not surprised to learn that socialism is slowly poisoning our universities, but I was surprised by its new avenue — the socialization of grades. Professors at a local law school are required to grade to a B+. When professors submit their grades, if the average is below a B+, the system will reject it. The university is afraid of making students feel bad about a low, albeit deserved, grade and wants every student to have a high grade-point average upon graduation.
However, what is inflation for one group is deflation for another. This practice punishes hardworking students, as their work may result in a lower grade than they deserve, compared to classmates who are preoccupied with attending “TikTok University” during lectures.
Universities are on a quixotic mission to right a wrong — they are fighting against grade inequality. This is what socializing (equalizing) outcomes looks like. In fact, this seemingly innocent practice of equally high grades has the familiar ring of a Karl Marx slogan that I heard endlessly in the Soviet Union: “From each according to his abilities, to each according to his needs.” Law students need a B+, so they get a B+.
With each graduating class, our capitalistic (equal-opportunity) society is being slowly diluted by equal-outcome dogma (socialism).
Grade inflation is happening in virtually every college across the country, but colleges should not receive all the blame for this, as unfortunately it starts in high schools, which are suffering through super grade inflation — grades have gone up while reading and math skills have fallen (with minorities experiencing the largest grade inflation).
Bad (deserved) grades are a necessary part of education. How else would you know that you had not learned something as well as you thought you did? I failed English as a freshman in college. I had been in the US for two years. My English was objectively horrible. I’m glad I didn’t receive special (woke) treatment for being “fresh off the boat.” I studied a lot harder, retook the class and passed it my senior year. If I had not, my English would not have improved and I would not have written several books or received national awards for writing.
The beauty of the Declaration of Independence is that you are guaranteed the “pursuit of happiness” — you are given an equal chance to pursue it. You are not guaranteed the outcome, just the opportunity. There is enormous value, and yes even happiness and meaning in the pursuit of happiness. This pursuit will often take you down a harder road, but it will result in the best version of you and bring a sense of pride and accomplishment.
3. Chinese Large Cap Looks Like It Will Break Below Covid Lows.
4. China Weighs Stock Market Rescue Package Backed by $278 Billion
China considers offshore money for stabilization fund: sources
Some policy measures could come as soon as this week
By Bloomberg News
Chinese authorities are considering a package of measures to stabilize the slumping stock market, according to people familiar with the matter, after earlier attempts to restore investor confidence fell short and prompted Premier Li Qiang to call for “forceful” steps.
Policymakers are seeking to mobilize about 2 trillion yuan ($278 billion), mainly from the offshore accounts of Chinese state-owned enterprises, as part of a stabilization fund to buy shares onshore through the Hong Kong exchange link, said the people, asking not to be identified discussing a private matter. They have also earmarked at least 300 billion yuan of local funds to invest in onshore shares through China Securities Finance Corp. or Central Huijin Investment Ltd., the people said.
10. Russia’s elite paratroopers and marines are refusing orders to launch ‘human wave attacks,’ Ukraine official says-Business Insider.
Marines march past an honor-guard soldier during a Naval parade rehearsal in St. Petersburg, Russia, in 2022. Nathan Rennolds
Elite Russian troops are refusing to launch “human-wave attacks,” a Ukrainian official said.
Nataliya Humenyuk said marines and paratroopers are concerned over huge losses in the assaults.
She said former prisoners and poorly trained reservists typically carry out costly frontal assaults.
Russian marines and paratroopers are refusing to launch certain types of assaults due to concerns over the huge losses other troops are suffering, a Ukrainian official said, the Kyiv Post reported.
Nataliya Humenyuk, a press secretary for the Armed Forces of Ukraine’s Joint Command South, said that the soldiers considered “themselves ‘elite troops'” and did not “want to go into frontal assaults” that former felons and reservists typically carry out, the outlet reported.
Throughout the Russian invasion, Russia has become increasingly reliant on high-risk frontal assaults involving waves of attacks that probe Ukrainian positions and seize small portions of territory at the cost of substantial casualties.
Humenyuk cited Russian attacks on Krynky in the Kherson Oblast in southern Ukraine, saying that Russian troops assaulting Ukrainian marine positions there were being hit with losses of more than 50%.
“At present in our sector the number of units of the type ‘Shtorm-Z’ [low-grade Russian units made of up older reservists and former felons, often committed to carry out human wave attacks] is falling and we are seeing more naval infantry and paratroopers,” Humenyuk said.
“But they consider themselves ‘elite troops,’ and they don’t want to go into frontal assaults like that,” she added.
One of Russia’s newly formed paratrooper units, the 104th Guards Airborne Division, appeared to be hit particularly hard in its combat debut in the Kherson region late last year, the UK Ministry of Defence said in an update on the conflict in December.
1. S&P New Highs….7th Longest Run Ever Between New Highs.
2. Earnings Recessions Set to End.
Nasdaq Dorsey Wright Earnings estimates see dip in Q4 2023 before positive growth throughout 2024 The last time we showed you the chart below, Q4 earnings growth was expected to be positive.
Now, though, it’s currently on track for earnings to dip almost 2% YoY (orange bar).
3. What Outperforms in the Years Following Rate Hikes?
Blackrock Despite their “risk asset” label, all stocks are not created equal. With inflation and economic uncertainty still high, we retain our focus on quality and lower-beta equities. Both have outperformed higher-risk counterparts in the years following the end of rate hikes, as shown below. While higher valuations, inflation and rates may mute overall stock market returns relative to the prior decade, we see attractive stock selection opportunities in 2024 amid a Fed pause and outlook for broadening market breadth.
4. China and Hong Kong Stocks Have Erased $6 Trillion Since 2021 Peak.
by Michael Batnick There was more speculation leading up to the launch of the Bitcoin ETF than anything that I’ve ever seen. People were debating how much money these ETFs would take in and what impact the inflows would have on the underlying price.
The nine new spot Bitcoin ETFs that came to market have collectively taken in just under $4 billion. (H/t Eric Balchunas on all this data)
IBIT (iShares) and FBTC (Fidelity) took 4 and 5 days respectively to get to $1 billion in assets. The only other ETFs to get there faster were BITO, the BTC futures ETF, which took 2 days, and GLD, which took 3 days.
The volume that these things are doing is arguably more impressive than the assets. Balchunas notes that:“For context, as a group the Nine’s $1.2b in daily volume puts them in Top 1% of all ETFs (w/ $GBTC as well). But even if you single them out, $FBTC & $IBIT each in Top 2%. Keep in mind the avg age of ETFs in Top 2% is prob like 14yrs old. So pretty wild to get there in a week.”
So the launch of these ETFs was a resounding success. Hard stop. The price of the underlying is more of a mixed bag. The ETFs are down ~10% since they started trading. But Bitcoin itself is up almost 40% over the last three months as anticipation of the launch grew stronger. It shouldn’t be terribly surprising that it didn’t go up in a straight line after the announcement of something that had been well-telegraphed. The market, every market, is pretty good about pricing stuff in. This is not to say I called this, I didn’t, but I’m not surprised either. https://theirrelevantinvestor.com/2024/01/21/how-big-can-bitcoin-get/
6. Number of Ships Thru Suez Canal Cut in Half.
Torsten Slok Apollo Normally, 200 ships travel through the Suez Canal from South to North over a week, but that number has recently declined to 100, see the first chart.For the Panama Canal, Northbound traffic has also declined 50%, from 90 ships per week to 45, see the second chart. The third chart shows that the price of transporting a container from Shanghai to Rotterdam has tripled. The bottom line is that higher transportation costs are putting upward pressure on goods inflation.
9. Empty Nesters Own Twice As Many Large Homes As Millennials With Kids-Redfin
What is Truflation Truflation aggregates, calculates and publishes the first daily, unbiased, real-market inflation and economic data.
We also make our data available on-chain via the Chainlink infrastructure making them directly compatible with various DeFi products and Web3 applications.
Our mission is to offer the most objective, decentralized, and current economic and financial information alternative in the form of on-chain price indexes to enable a new generation of blockchain products. https://whitepaper.truflation.com/background/what-is-truflation
@Charlie Bilello Truflation, which attempts to calculate a real-time inflation rate in the US, is suggesting actual inflation is over a percentage point lower at 1.85%. A year ago this inflation gauge was above 6%.
10. Americans are Actually Pretty Happy with Their Finances.
1. A Record 91% of Fund Managers Expect Interest Rates to Go Lower
Marketwatch-As of this month, a record 91% of fund managers surveyed expect short-term interest rates will drop over the next 12 months, up from 87% in Dec. 2023. Those figures mark the highest levels of bullish sentiment on interest rates since BofA’s surveys first started two decades ago in 2001. By Louis Goss
2. U.S. Treasury Issuance is Set to Double in 2024 to $2 Trillion
Dave Lutz at Jones Trading Coming flood of US Treasury issuance unsettles some investors after blazing rally – While expectations for Fed easing may be driving bond prices now, some believe U.S. Treasury issuance, expected to nearly double to $2 trillion in 2024, could be a counterweight. Yields – which move inversely to bond prices – would have to rise from current levels to entice demand for the flood of new debt, they say. Such concerns helped drive Treasury prices to 16-year lows when they intensified in October. In a survey of investors by BofA Global Research, 23% said a bet on lower Treasury prices was their “highest conviction” trade for 2024, while 21% said the same for bets on higher Treasury prices.
3. 10-Year Treasury Yield Moved Back Above 4%
4. Earnings Reports Everyone Talking AI
From Jim Reid at Deutsche Bank
5. More Presidential Elections Seasonality Data.
Nasdaq Dorsey Wright
Based on average returns, the fourth year of a president’s term has historically been the second lowest for SPX and RUT. The best time for these domestic benchmarks has been the third year (which rang true in 2023).
During the fourth year, SPX and RUT have typically softened around the 60-trading day window (late March/early April) before reaccelerating into year-end around the 220th trading day (early November).
6. Since March 2022, U.S. developers have signed 57 supply agreements representing about 73 million metric tons of LNG annually
WSJ Russia’s invasion of Ukraine kicked U.S. exports into overdrive. Since March 2022, U.S. developers have signed 57 supply agreements representing about 73 million metric tons of LNG annually, according to S&P Global Commodity Insights—more than four times the number of contracts they signed between 2020 and 2021.
7. Uranium Spiking
8. Grayscale Bitcoin Trust (BTC) (GBTC) Sees Outflows of $579m
Emily Graffeo-(Bloomberg) — Investors have pulled over a half of a billion dollars from the Grayscale Bitcoin Trust during its first days of trading as an ETF.
The fund, which won US Securities and Exchange Commission approval to convert to an ETF from a trust last week, has seen outflows totaling about $579 million, according to data compiled by Bloomberg. It’s a stark difference from the other nine spot Bitcoin ETFs, which have pulled in a total of nearly $1.4 billion.
“Thanks to the ETF conversion this is the first time we’ve had clear sight into flows of GBTC,” said James Seyffart, an ETF analyst at Bloomberg Intelligence, who noted that investors may be profit-taking.
The flow data is a more complete look at how the ETF fared in the wake of SEC approval. While over $2.3 billion of GBTC shares changed hands its first day, the outflows now indicate that a portion of that volume was due to selling. “Grayscale has dominated the market for regulated Bitcoin investing for over a decade. Now that other issuers have come to market, we are naturally seeing some rotation into these new products,” said Zach Pandl, Grayscale’s managing director of research. “Total net inflows into Bitcoin investment products are what matters for prices, not substitution from one product to another.”
The outflows from Grayscale’s ETF aren’t entirely unexpected. Bloomberg Intelligence forecasted that the fund will drain over $1 billion over the coming weeks.
“Lots of this capital will find its way back into other Bitcoin exposures,” Seyffart said.
Some investors are fleeing to cheaper spot Bitcoin ETFs. With an expense ratio of 1.5%, GBTC is the most expensive US ETF that invests directly in Bitcoin. The second-most expensive fund, the VanEck Bitcoin Trust, charges 0.25%.
Empty-nest baby boomers own 28% of the nation’s large homes, while millennials with kids own just 14%.
Empty nesters take up a lot of large homes because affordability was better when they were young, and there’s no financial incentive to sell now: Most boomers own their homes free and clear, and most who have a mortgage have a low rate.
The landscape has transformed over the last decade: 10 years ago, young families were just as likely as empty nesters to own large homes.
Empty nesters take up at least 20% of large homes everywhere in the U.S.
Millennials with kids take up less than 18% of large homes no matter where they live. They own the biggest share in the Midwest and the smallest share in coastal California.
Our brain uses automatic thinking to streamline responses to stimuli.
Sometimes automatic thinking can be maladaptive, requiring an override.
We can correct for cognitive biases by working with our mental camera.
The predictive text function on my iPhone lately has been making an error. It reads the word “so” and assumes that I want to write “Sophie.” I’ve corrected it many times, but it sees “so” and stubbornly assumes that I am writing to or about my friend Sophie.
Our brain offers its own “predictive text” function when it makes assumptions based on our past experiences. Sometimes, this works very well. When we encounter a hot stove burner, for example, we don’t have to write a pros and cons list about whether we should place our hand there. Our brain quickly computes that a hot stove burner is dangerous and should not be touched. Thank you, automatic thinking!
However, just as with our iPhones, there are times when our brain’s attempts to shortcut do not serve us well. This post explores how certain types of automatic thinking can increase distress surrounding chronic illness.
Attentional Bias
When we exhibit attentional bias, we pay selective attention to specific information, failing to place that information in a broader context (Savioni & Triberti, 2020). Many people living with chronic illness experience a hyper-vigilance around symptoms. We are very attuned to our bodies, noticing every ache and pain. This makes sense, as our brain believes — and rightly so — that we need this information to keep ourselves safe. Attentional bias comes into play when our brain is so focused on identifying symptoms that it ignores or barely registers health.
article continues after advertisement
Take a moment to focus on a part of your body that is uncomfortable. What’s it like to zoom the camera of your mind’s eye on only that sensation? If your right hip hurts, for example, focus only on the pain you are experiencing in that area. Now zoom the camera out to include your whole body. Does your knee hurt? Your foot? What about the other side of your body? You’re still acknowledging that your right hip has pain, but your brain is now placing the pain in the larger context of your whole body. Pain is part of your experience when you zoom the camera out, not the whole of your experience. When you correct for attentional bias, you receive a different picture of what is happening.
Interpretation Bias
Interpretation bias involves what we do with the information our brain has noticed (Savioni & Triberti, 2020). In chronic illness, there can be a tendency to interpret signals from the body as illness-related. There also can be a tendency to catastrophize.
As with attentional bias, this makes perfect sense. The brain knows that chronic illness symptoms often mean danger. Unfortunately, for many of us who live with chronic illness, the warning it provides sounds less like, “Just flagging these sensations for you. Do you think they are illness-related?” and more like, “RED ALERT! RED ALERT! THINGS ARE BAD AND THEY’RE ONLY GOING TO GET WORSE!”
Just as we did in addressing attentional bias, let’s pull the camera back. Observe the panic from a place outside of your big feelings. Speak gently to the panicked part of yourself, saying, “Boy, you’re really afraid. And it’s understandable. But you don’t have enough information to justify this high level of panic. Can you take a few breaths so we can evaluate what’s happening from a calmer place?” Treat yourself with respect and compassion. Once you’re able to calm yourself down, evaluate the symptoms you’re experiencing with a clearer head. Congratulations — you’re learning how to correct for interpretation bias.
Recall Bias
Recall bias involves focusing on particularly painful moments in our past experiences (Savioni & Triberti, 2020). We may remember vividly the harrowing moments in our illness journey, without also remembering the times when our health was relatively stable. Especially when we experience a bodily sensation that causes concern, our minds immediately may flash to images of our darkest times.
By now, you know the drill: We’re going to do some camera work with our mind’s eye. Instead of staying with the image of your scariest moment, we’re going to play the film forward. Let’s imagine that experiencing symptoms causes you to remember yourself lying in a hospital bed. Time didn’t stop when you experienced that moment, so you are going to call to mind images of you rehabilitating and coming home from the hospital. Unfreeze the camera and look at the entire memory rather than only its worst parts.
Why Correcting Automatic Thoughts Matters
Correcting automatic thoughts about illness grounds us in a more balanced reality. Keeping our stress levels in check is mentally and physically healthy, benefitting our quality of life. Putting in the work to identify and correct automatic thoughts helps us to rewire our brains, updating problematic thought patterns to more adaptive ones.
