Nearly a century after physiologist Ivan Pavlov published “Conditioned Reflexes” in 1927, his findings describe today’s capital markets better than classical economics.
asserted
findings → publish → economics
Supply and demand curves assume rational actors.
asserted
curves → assume → actors
They fail to capture the investor’s twitching Pavlovian instinct.
asserted
They → fail → instinct
For fifteen years, record-low interest rates rang like Pavlov’s bell.
asserted
rates → ring → bell
When the market stumbled, central bank liquidity flooded in.
asserted
liquidity → stumble → ?
Investors salivated on cue, riding a historic housing boom, chasing cannabis spiffs, crypto hype, and demanding three-year startup flips.
asserted
Investors → salivate → flips
Short-termism, fuelled by a visceral fear of missing out, hardened into biological reflex.
asserted
termism → fuel → reflex
Mercifully, our political leaders now preach long-termism.
asserted
leaders → preach → termism
Why political leaders are finally preaching long-termism
asserted
leaders → preach → termism
At the recent Canada Investment Summit, Prime Minister Mark Carney and former Conservative PM Stephen Harper united behind a multidecade sovereign industrial strategy.
asserted
Carney → unite → strategy
Carney championed direct capital allocation into national resilience, echoed by the Business Development Bank of Canada’s multibillion-dollar commitment to deep-tech and defence.
asserted
Carney → champion → tech
In Washington, the U.S. Securities and Exchange Commission is eyeing optional semi-annual reporting.
asserted
Commission → eye → reporting
Law firm Skadden Arps views the proposal, if adopted, as the biggest overhaul to market cadence since 1970, designed to quash the quarterly treadmill.
asserted
Arps → view → treadmill
And yet, the investor’s Pavlovian response toward fast money endures.
asserted
response → endure → money
Amid the 2009 financial fallout, I asked New York University professor Nassim Nicholas Taleb if collective rationality rises after investors get fooled by speculative crashes.
asserted
investors → ask → crashes
“No,” he said.
asserted
he → say → ?
A form of “dysrationalia” settles in, referencing the concept coined by U of T psychologist Keith Stanovich.
asserted
form → settle → Stanovich
Why investors keep chasing the quick flip
Investors, under this reasoning, remain bewitched by their memory of a quick flip, duped into thinking they can outsmart the house.
asserted
they → keep → house
Ontario has styled itself into an online gaming capital through its open commercial iGaming framework, while gamified trading platforms promote zero-day options and U.S. apps like Robinhood offer Canadians 24/7 crypto trading — turning both financial and sports markets into round-the-clock wagering.
asserted
apps → style → wagering
We’re starting to see the human cost of this racket: Mental Health Research Canada (MHRC) data shows a spike in gambling addictions among adult men under 30, with more than one in three aged 19 to 29 now at high risk for gambling harm — more than double the national average (disclosure: I serve on the MHRC board).
asserted
I → start → board
Bitcoin trades continuously, a volatile playground dominated by whales where new retail participants act as exit liquidity.
asserted
participants → trade → liquidity
Instead of building for longevity, North American financial engineering invents delivery mechanisms for a dopamine fix.
asserted
engineering → build → fix
On the horizon is a push by regulators in both Canada and the U.S. to “democratize” access to early-stage startup equity and private placements for pensioners and retail investors.
asserted
push → democratize → pensioners
Coupled with gamified trading apps, regulators are opening high-risk private markets to ordinary investors precisely as the smart money retreats.
asserted
money → couple → investors
As Noah Solomon, chief investment officer at Outcome Metric Asset Management, points out, “this isn’t altruism — it’s merely a case where private asset managers are looking to retail investors to fill the void out of necessity.”
asserted
managers → point → necessity
For years, family offices and high-net-worth clients plowed into private illiquidity, he says.
asserted
he → plow → illiquidity
Today, after more than a decade of cheap credit, private asset managers are finding themselves unable to sell holdings at prices that would meet their return targets.
asserted
that → find → targets
To clear the pipes, the industry is beckoning retail investors to the table.
asserted
industry → clear → table
Solomon compares today’s market to a brontosaurus that has been bitten but its tiny brain has not yet really registered what has happened: the interest-rate pain has begun to affect limited pockets of assets, but not all.
asserted
pain → compare → assets
How today’s AI boom echoes the dot-com crash
asserted
boom → echo → crash
As was the case with the dot-com bubble of the late 1990s, optimism can quickly turn to pessimism, resulting in a material correction in values.
asserted
optimism → turn → values
This persistent drift toward short-termism drains Canada’s real economy.
asserted
drift → drain → economy
Jeffrey Crelinsten, president of The Impact Group and a lead researcher on a major study published by the Council of Canadian Innovators, warns that relentless short-term pressure forces premature exits.
asserted
pressure → publish → exits
“When growing companies are acquired by foreign buyers, operations may remain in Canada, but leadership and strategic decision-making inevitably shift abroad,” Crelinsten tells me.
uncertain
Crelinsten → grow → me
“The core issue isn’t simply whether branch-plant jobs stay in Canada — it’s where the decisions about future investment, commercialization, and long-term growth are actually made.
asserted
decisions → stay → investment
When domestic enterprise exists merely to be pumped up and flipped, Canada surrenders its corporate headquarters, its intellectual property, and its future.
asserted
Canada → exist → headquarters
True national prosperity requires, in my view, an “exit at death” mindset — building for fifty-year horizons, executing succession planning, anchoring domestic supply chains, funding the next era of enterprise, and minting stable tax revenues that sustain public infrastructure.
asserted
that → require → infrastructure
Shortly before his death in 1936, Pavlov offered a warning to researchers that applies with equal force to financial markets.
asserted
that → offer → markets
He urged them to reject shortcut thinking and embrace “gradualness, gradualness and gradualness,” adding: “Never attempt to screen an insufficiency of knowledge even by the most audacious surmise and hypothesis.
asserted
He → urge → surmise
Howsoever this soap-bubble will rejoice your eyes by its play it inevitably will burst and you will have nothing except shame.
asserted
you → rejoice → shame
…and 6 more, not listed.
The Aporia
