Monday, September 18, 2017
New Deal Demoncrat - 2016's new high in real median household income.
Yeah, that's fine and all.
This chart, combined with the fact that marginal propensity to consume goes down as income increases, means that household consumption still has a way to go.
Household savings, though, is hunky dory cos the rich are richer.
Thus, NDD, I'm more of a New Deal Keynesian Leftist than thou.
All I have to say about that clown is, if you're seriously making predictions (and not just trying to fill space) by asserting there's a magical fucking 30-month cycle in the market, based on two fucking data points and utterly zero underlying mechanism, then you're pants-on-head fucking stupid and your readers have every right to waste money on your bullshit idiot newsletter.
at 9:46 AM
Calculated Risk - this week's schedule. Oh crap. Janet's going to be talking on Wednesday. So the market (especially gold miners) might go haywire that afternoon.
BTW, I'd like it if the market stopped going stupid batshit haywire on days of Fed announcements: that would mean that market participants consider it enough of a non-event that they no longer feel it necessary to clear the order book beforehand or to put contextual bots in control of trades.
And that would mean they're starting to get a fucking clue.
New Deal Demoncrat - weekly indicators. Summary:
Corporate bonds, Treasury yields, and mortgage rates have all improved enough to remain neutral, as does growth in real estate loans. The yield curve, money supply, and purchase mortgages also remain positive, as are the two more leading Chicago Fed Financial Conditions Indexes. Refinance mortgage applications are the sole negative.
Short leading indicators, including stock prices, industrial metals, the regional Fed new orders indexes, spreads, financial conditions, staffing, the US$, oil and gas prices and usage are all positive. Jobless claims nominally are neutral, but adjusted for the impact of Harvey remain very positive.
Among the coincident indicators, positives included consumer spending as measured by Johnson Redbook, steel, the TED spread, tax withholding, the Baltic Dry Index and Harpex. LIBOR remains negative. Rail was positive except for carloads ex-coal.
Despite the hurricane impacts, the economy appears in very good shape over the near term, and retains a positive tone, if more mutedly so, in the longer term.
Just a few weeks ago, though, NDD was less happy about the data. Could it be that his opinion has been changed by Trump twice dumping his own party to work with the Democrats?
Friday, September 15, 2017
So yay, I'm now a TA. So I'll probably be doing an extra year of school to get more GIS and economic geography under my belt.
Here's some news:
BBC - Trump fairly close to DACA deal with... wait, what? The traitor! So as it turns out, an advantage of having an ignorant buffoon as president is that he doesn't really care about any of his promises, or the left-right divide, or anything. Trump may be a malignant narcissist, but at least he's shaping up to be a bipartisan malignant narcissist - which is more than you'd have gotten from some other clown like Jeb Bush.
Caixin Global - Chinese central bank breaks silence on cryptocurrency ban. Well, there goes a big chunk of bitcoin demand, eh? I wonder if this is enough to push crypto into a bubble pop....
New Statesman - development of the welfare state was aided by... wait, what? Seems right. Any theory that suggests the British welfare state was the flowering of a new inclusive liberal democracy must explain how this happened when 90% of British citizens were considered too subhuman to be given the vote. Otherwise it's just mythology. And really, the drive to redistribution had to be advocated by bourgeois intellectual paternalism, in cahoots with Bismarckian authoritarian technocracy, because there was no other hegemony at the time.
Klendathu Capitalist - wharrgarbl. Another blog along the lines of Polemic's Pains, illustrating that you don't have to pay $300/year for Tanashian's wharrgarbl. There's better wharrgarbl out there than him, and it didn't bottom-tick the June 2013 sell-snit.
Proving that they didn't need Gillian and her pile of synthesizers in the band at all, except that she was the only one who knew anything about playing music.
Wednesday, September 13, 2017
I see the neo-Nazis from Russia have quit clicking to my blog. Probably because of all the anti-Russian news I post here.
New Deal Demoncrat - actually, it was a bad JOLTS report. NDD has officially diverged from Bill McBride and everyone else, and is becoming a dooooomster.
Polemic's Pains - ramblings of a mad man. He thinks EM is about to head south? But EM is mostly China, and Billy Bishop says that you have to be an idiot to think Chinese data will look bad during the present party stuff. If EM turns it has to be after Xmas. And then this bit on Bitcoin:
Crypto currencies Initial Coin Offerings have broken the records set in CDOsquared property heaven of 2006/7 by amortising the future value of fresh air - this example of a guaranteed honestly useless coin is Useless Etherium, which would be priceless if it didn’t have a price, but it raised $90,000. So if you can now issue crypto currency backed by nothing and folks will buy it, just imagine how much you could get by backing it with something, anything .. even Italian bad debt -Yup, being able to sell cryptocurrency in IPOs like this really is the sign of a fucking insane bubble. I should print $300T in Monopoly Money with unique serial numbers, call them a "portable cryptocurrency", and sell them to the wackaloon crowd. I'd make a killing.
Bloomberg - which came first, the opioids or the despair? Good point - you have to study the opioid crisis like a disease to see if there's an epidemiological reason. And people don't die of overdoses because they're trying to kill themselves, good point.
Reuters - Congress calls on Trump to denounce hate groups. The traitors!
at 5:23 PM
BBC - Ted Cruz now likes porn, I saw it on Twitter.
Personally, I don't think Cruz has enough brain cells to masturbate successfully, he'd probably break the thing. But still:
A US Republican senator who once defended a ban on masturbation appears to have 'liked' a pornographic video on social media.This can be explained by him also not having enough brain cells to operate a Twitter account successfully.
The Twitter account of Ted Cruz, the former lawyer who ran for US president in 2016, 'liked' the two-minute video by @SexuallPosts on Monday.
at 3:25 AM
Tuesday, September 12, 2017
Larry Summers - why "downsizing government" is bullshit. This is what idiots refuse to know:
First, the population is aging and the Federal government disproportionately takes responsibility for the aged.
The share of the adult population over 65 will have risen from 12.5 percent in 1990 to 19 percent in 2030. Of course, one might argue that as life expectancy increases, the definition of old age should change. Figure 1 show that there will be dramatic increases in the share of the population who are within 15 years of their life expectancy relative to those who are more than 15 years from their life expectancy, so allowing for an evolving retirement age does not change the fundamental picture.
Second, inequality has increased substantially, as depicted in Figure 2. If one of the functions of the federal government is ameliorate inequality, it will experience pressure to expand to even partially offset rising inequality. This effect is potentially large. The share of pretax income going to the top 1 percent has risen by 10 percent of total income. Undoing even a quarter of this would cost about 2 percent of GDP.
Third, the relative price of what the government buys has soared. In fact, according to the CPI the relative price of a TV and a day in a hospital has changed by a factor of 100 since the 1980s. As Figure 3 illustrates, this is a quite general phenomenon with health and education costs rising faster than GDP. Rising relative prices for what government buys necessitates larger government.
Fourth, presumably our defense spending needs to be calibrated to some extent to the defense spending of our potential adversaries. Figure 4 suggests trends in our relative spending that are unlikely to be sustainable.
It is of course possible to argue that government spending has long been excessive and so rising demands on government can be met by curbing past excess. My point is not to argue about the proper size of government, only to note that if one accepts the judgements made in recent decades, the logic points to larger government in the future.
Well, R lab isn't going to be hard. I mean, I haven't coded in a while, but these kids really didn't seem to have any idea whatsoever, so I look good in comparison.
Still will have to go in on Fridays to do labs, though. But that seems like a fun thing to do.
Anyway, here's more news:
Calculated Risk - job openings increased slightly in July. Very strong report, he says.
NY Times - yuan rebounds as confidence returns. So I guess we can dump the US and buy China, now?
IPE Zone - Premier League post-Brexit. If only the idiots who voted Leave had known at the time that it would mean they're going to lose all their good footballers! Oh yes, if only they had two brain cells to rub together!
Yahoo News - FBI investigates Sputnik. Gee, really?:
The FBI recently questioned a former White House correspondent for Sputnik, the Russian-government-funded news agency, as part of an investigation into whether it is acting as an undeclared propaganda arm of the Kremlin in violation of the Foreign Agents Registration Act (FARA).Gee, Sputnik as a propaganda arm of a fascist totalitarian state? You think?
As part of the probe, Yahoo News has learned, the bureau has obtained a thumb drive containing thousands of internal Sputnik emails and documents — material that could potentially help prosecutors build a case that the news agency played a role in the Russian government “influence campaign” that was waged during last year’s presidential election and, in the view of U.S. intelligence officials, is still ongoing.
The emails were turned over by Andrew Feinberg, the news agency’s former White House correspondent, who had downloaded the material onto his laptop before he was fired in May. He confirmed to Yahoo News that he was questioned for more than two hours on Sept. 1 by an FBI agent and a Justice Department national security lawyer at the bureau’s Washington field office.
Feinberg said the interview was focused on Sputnik’s “internal structure, editorial processes and funding.”
“They wanted to know where did my orders come from and if I ever got any direction from Moscow,” Feinberg told Yahoo News.
The probe into Sputnik also comes shortly after the Russian news agency announced a significant expansion in the U.S. capital: It took over a popular Washington FM radio station dedicated to playing bluegrass music and replaced it with an all-talk format with hosts who regularly criticize U.S. policies — as well as one co-host who is a former Breitbart News reporter and Trump supporter. “I’m sure you heard a lot about us,” Gavasheli was quoted as saying by the Washington Post. “Now you can actually listen to us.”And people just let this happen because what's one more propaganda actor in a country whose right-wing media was taken over by the Mont Pellerin Society and the John Birch Society decades ago?
Tim Taylor - guess who's the #2 food exporter in the world? Nope, not the US. Definitely not China. India or Brazil? Make me laugh! Nope, not even Canada, even though we single-handedly fed the Soviets for decades.
The answer will surprise you! That means you're supposed to click through!
at 4:32 AM
Monday, September 11, 2017
I haven't heard back about my TA-ship just yet, but I'm already behind my readings by 5 chapters and it's only been a week and two classes don't even have textbooks.
So you're going to be hearing less from me til reading week.
New Deal Demoncrat - are consumer indicators rolling over? Well, if so, then $200B in extra spending to fix the hurricane damage should help.
New Deal Demoncrat - weekly indicators. And again, the hurricanes are going to mess up the data for a while, so may as well double-long the S&P and go on vacation for a couple weeks.
Noah Smith - an American Whitopia would be a dystopia. Or, more simply, the kind of people who espouse American white supremacy are not the kind of people that I, a purebred Aryan, would ever want to hold up as exemplars of my race.
Friday, September 8, 2017
I have Fridays off school, for now, but will probably have to start going in to do labs. Among other things I'm learning ArcGIS, GIS-T, Stata and R, and for some reason I can't code like I could when I was a kid. Or maybe they just don't have a clue how to teach you to do that.
Anyway, here's some Friday news:
Tim Taylor - the limited exposure of the US economy to trade. As in, it's only 13% of GDP, quit whining you stupid Americans.
Klendathu Capitalist - the USD bull market. I don't get how it can be an end to a USD secular bull. But still, if we're past cycle middle, it is true that commodities should go on a secular bull in USD terms.
BBC - Facebook uncovers Russian disinfo campaign, hits "like". Yup, the Russians were stupid enough to actually pay for their disinfo advertising.
HAHAHA NICE WHITE HOUSE YOU HAVE THERE REPUBS!!!!
Reuters - Trump collaborates with Democrats on debt ceiling and immigration. OMG LULZ:
President Donald Trump on Thursday embraced a suggestion from the Senate’s top Democrat to end congressional battles over the U.S. debt ceiling, a day after he stunned fellow Republicans by striking a major budget deal with the opposition party.AHAHAHAHHAAAA!
So Trump is going to make a deal with the Democrats to pass a bill eliminating the debt ceiling!
I guess the Republicans should expect this, since they can't even agree to use their house & senate majorities to actually eliminate the ACA that they voted to repeal like 50 fucking times when Obama was in power.
A country version of "Blues from a Gun" FFS:
Wednesday, September 6, 2017
Billy Bishop says the US can easily pressure China to back then up on North Korea, simply by threatening to give nukes to South Korea and Japan. That's the one thing that will make China budge.
With that in mind:
NY Times - North Korea's nuclear arsenal threatens China's path to power. Decades of Chinese geopolitical strategy gets flushed down the poop chute if China pisses off the US.
Reuters - allowing nuclear weapons in Japan could defuse North Korean threat. The money shot:
“Just by raising this issue of nuclear principles, Japan will push the United States and China to act, and it is something that Beijing is not going to like,” said Takashi Kawakami, a security expert at Japan’s Takushoku University.And the dominoes fall like a house of cards. Checkmate.
“It’s the medicine that China needs to make it act against North Korea.”
Qz - Robert Shiller says bitcoin is a bubble. Well, we knew that. What happens when everyone is buying a currency, and nobody is selling it, while its amount is restricted? The currency goes up in relative price to the goods it was supposed to be buying, but isn't. Problem is, eventually buying and selling equalize. Then, if things go badly, selling increases and buying stops. Wonder what happens then?
Thing is, in monetary economics, "currency" is nothing special. It's really just a storable commodity, except it's never consumed.
And, even more fun:
FT Alphaville, and not even Izzy Kamizzy this time - Bitcoin is a super circle jerk by 40-something sociopathic autistic virgins. And they really mean it:
Women made up only 8 per cent of California’s population in 1850, after the gold rush brought a flood of men seeking fortune.I dunno, if something is being bought 97% by men, then ipso facto it's not a currency, is it? It's probably something you ejaculate into, instead, right?
The gender imbalance in today’s ICO mania is reportedly worse. While there’s no reliable census for crypto users, one recent estimate says women are just 3 per cent of the Bitcoin community, even though there’s no shortage of women who live in California. Crypto-bachelors appear to be aware of this gender imbalance, but they don’t sound all that unhappy about it.
And next Alexandra really beats the bitcoin community like a mixed-race stepchild, then stomps a fuckhole in their ass and fucks it dry with this passage:
Of course, it only caught our eye because some techbros seem like they’d rather pay for a fake female team member than hire a real one. And while they often carry on about digital frontiers, it’s highly unlikely they actually want to be in the American West, with its vigilante mobs, willful women and rivals with guns.Oh man. Alexandra just did this to bitcoin:
No, some of them want to be in Westworld, the fictional Wild West theme park where ticketholders can do whatever they want to realistic humanoid robots, which inevitably leads to all the horrors you’d imagine that scenario would entail when broadcast by HBO. The urge to objectify and dehumanise other people — often women — is both thoroughly human and scary as hell. And a strip club called Legends Room basically asks crypto-bachelors to indulge that impulse to its extreme:
“Someone can go into the Legends Room and pay the young ladies by waving their phone over the QR code on her shoulder. It’s the gamification of the club environment,” Peter Klamka told the Daily Beast.
Gamification? A game where they… they… wave a phone over a glorified barcode, to buy attention from a living, breathing human woman? They wave their phones? Over a barcode? On a person?
Forget old-fashioned stuff like “making eye contact” and “rote niceties”, that’s all history now that we’ve got the blockchain!
"Bah gaw Jim! He's broken in half!"
Here's some economics news with which to enlighten your sorry ass:
Calculated Risk - ISM non-manufacturing increased in August. Ignore the manufacturing index: this is the one you should pay attention to, because it's a large part of the US economy.
FT Alphaville - Brainard's framing challenge. Tim Duy notes that it'll be harder for her to get her point across to the board now that the US isn't threatening a slowdown this year.I personally think the Fed is the one place where you can sometimes find economists who aren't wedded to idiotic dogma. Definitely she can convince Kashkari.
The Krugginator - the very bad economics of killing DACA. But forget about the economics, just look at it more simply:
throwing out 800,000 young people who are Americans in every way that matters, who have done nothing wrong, basically for racial reasons.No, I'm sure there's going to be at least a dozen white Aryans who also get kicked out for having been brought to the US illegally in childhood.
Tuesday, September 5, 2017
So I'm back at university for possibly my final year, or maybe not.
I'm even trying for a TA position, which is funny if you've ever read this blog. But don't worry, I really honestly can do customer-facing with a smile on my face... when there's money involved.
Here's some news:
Jared Bernstein - yeah, as if Trump is really going to accomplish anything. Moderate Republicans will find enough Democrats to go along with a debt ceiling hike, but all other partisan right-wing policy is going to be dead on arrival. Factor that into your stock market strategy.
New Deal Demoncrat - motor vehicle sales vs real retail sales. I actually think there may be a distortion due to cash-for-clunkers. Then again, maybe the US economy really is about to roll over for no reason at all?
Lael Brainard - understanding the disconnect between inflation and unemployment. Well, at least they're understanding there is a disconnect. Now all they have to do is grow a pair of fucking balls and place the blame where it's deserved: on policy. After all, you wouldn't expect real price inflation in a slavery economy, or a serfdom economy, right?
IPE Zone - more on Texas and deporting Mexicans before rebuilding Houston. Face it, the US needs undocumented immigrants. The alternative is - shock! horror! - offering naturalized citizens a higher wage. I mean seriously:
There are plenty in and around Houston who might consider taking on the work, which can pay $20 an hour or more, if ID requirements were relaxed, construction industry officials say.Are you fucking kidding me? You're bragging about paying $20/hr for construction work? That needs to be at least $30, probably more. But I guess it would pay very little if the people were competing with undocumented Mexicans.
BBC - Azerbaijan laundered billions thru the UK. Kinda funny that you'd choose the UK to launder money through, no? I mean, it's as if they're a corrupt third world hellhole or something....
Zerohedge - the trouble with global asset bubbles is eventually they pop.
Wait, are they talking about Bitcoin?
IPE Zone - but who will rebuild Houston? Turns out that undocumented Mexicans are the lifeblood of the US economy, but we already knew this:
Back in 2007, the Washington Post reported on a Tulane and University of California, Berkeley, study that found some 100,000 Hispanic workers thronged into the Gulf Coast region in the wake of Katrina, many of them undocumented. Houston will need a similar migration for it to recover. In 2017, from where will those workers come?
Actually, the whole deportation narrative of the US right wing is a scam, and everyone knows it, because it's the supporters of the right wing who rely the most on undocumented workers from Latin America.
But since it's a scam to gain votes from racism, it's a particularly odious and informative one.
Friday, September 1, 2017
Calculated Risk - August employment report is not doomy. But of course a certain Russian-funded neo-Nazi propaganda site frequented by the dumber end of the market had to call it a harbinger of doom.
Yet I look at Bill's charts and see that there's really nothing outside of trend.
BTW, it's funny that, despite being a supposed Libertarian website, that certain Russian-funded disinfo fake news site has to run articles backing up Trump and criticizing "violent left-wing anti-Fascist protesters". I guess that means that Libertarians are in favour of Fascism, or they whole-heartedly support Trump, or they're such pussies that they could never imagine what it's like to actually fight for your beliefs.
Thursday, August 31, 2017
CNBC - Hooray! Quarterly GDP up 3%! And just like that people are okay with buying stocks again.
Reuters - Hooray! Trump can't shut down the government anymore because Texas! And just like that people are okay with buying stocks again.
Tuesday, August 29, 2017
New Deal Demoncrat - weekly indicators. Nothing worth worrying about.
Tim Duy the Economics Guy - market fear is a nothingburger. Quit pissing your panties, SPY is down 2% from an all time high.
Tim Taylor - will the China shock operate in reverse? The suggestion is that demographics will, among other things, drive interest rates back up now that China is oldening. Personally, I have never met a senior citizen who hit age 65 with x savings and didn't continue accumulating savings in retirement. I would like to see the empirics before I believe this story that we're moving into a worldwide dissaving regime.
Oh, and also: Goodhart and Pradhan are assuming that the Chinese government won't modify policy to keep rates from rising, if they don't want rates rising. This is boneheaded: China knows its policy power trumps all bullshit economic theory.
IPE Zone - Canada's plan to keep NAFTA alive. If one side has put a full-court press in play at multiple levels to lobby for maintenance of NAFTA, and the other side is a bunch of idiot Republicunts run by a retard with a 6-year-old's mentality, then what do you really think the result will be? Oh, and:
Remember, the US president does not have sole discretion whether to withdraw from a trade deal like NAFTA. Instead, congress does.So you can tune out all those idiots in the press with their 2 year college degrees in broadcasting, because not a fucking one of them seems to know how legislation works in the US.
FT Alphaville - Russian Burger King invents "Whoppercoin". This is silly, and Kadim Shubber does his best Izzy Kamizzy:
Big news out of Russia today. Burger King has launched a new loyalty points program called “WhopperCoin”.
If you buy enough Whopper sandwiches from the fast-food chain and accumulate 1,700 loyalty points, you get a free one.
It’s big, big news. The kind of big news that gets covered by the BBC, the Verge, CNBC and Fortune.
Why is it big news?
Well, because Burger King Russia is calling it a “cryptocurrency”…
‘Now Whopper is not only burger that people in 90 different countries love – it’s an investment tool as well. According to the forecasts, cryptocurrency will increase exponentially in value. Eating Whoppers now is a strategy for financial prosperity tomorrow,’ comments Ivan Shestov, Head of External Communications at Burger King Russia.
Just to be clear, that’s someone calling a fast-food chain’s loyalty points program, which has a fixed conversion rate to B.U.R.G.E.R.S., an “investment tool” that is forecast to “increase exponentially in value”.
You know it's a stupid idea when you can channel Zoidberg:
"A-ha! Once again, the conservative sandwich-heavy portfolio pays off for the hungry investor!"
Friday, August 25, 2017
Weather.com - OMG megahurricane to destroy Texas. A 12 foot storm surge, 2 feet of rain, and 100mph winds will hit Texas soon.
I assume Trump's response is going to be as pathetic as Bush Jr.'s was to the disaster in New Orleans.
This'll turn Texas against the worthless Republicans. Kinda like Bush's Katrina.
Thursday, August 24, 2017
CNBC - at Jackson Hole, the death of a model.
The Phillips Curve is the central theory for the Fed's dual mandate of limiting inflation and maximizing employment, so it's really going to suck when they realize that inflation and unemployment are not necessarily correlated at all.
What's less likely is that academic economists ever fucking realize that wage growth is dependent on political economy, not some stupid fantastical perfect competition model for labour.
Cos once you realize that labour is paid below its perfect competition equilibrium wage, that firms buy labour in an oligopsonistic market, then really the only sensible thing to do is throw out orthodox general equilibrium altogether, ask "what is the actual econometric data telling us", and then look for entirely fucking sensible political economy explanations that have been around since, oh, Das Fucking Kapital.
Since the start of the 2nd week of August, $VIX has refused to break back below its 20-day Bollinger mean.
That seems to be a fair bit bearish, and definitely contradicts an "all clear" message for the time being.
Also, though they're still well contangoed, VIX monthly futures have been rising for weeks. This makes me think people are buying downside puts to cover all coming months, not just an expected breakdown this week or next week or the coming manufactured September US debt crisis or something stupid coming out of Trump's mouth anytime soon - it's a broader level of concern. Not the kind of concern that makes everyone puke and go to cash, but the kind of concern that makes people cut longs, buy downside puts, and build cash in order to "buy the dip", maybe.
But the VIX futures seem to say the "dip" might be longer in the making than a day.
Though all this, the R2K and $TRAN charts still look bad, which makes the 2% pullback from alltime highs in SPY and QQQ look much worse than their charts would look in isolation. As it is, the negativity in R2K and $TRAN makes SPY and QQQ's hugging of the SMA(50) below their Bollinger means suggest a further breakdown, not an ongoing consolidation.
People were euphoric since Trump won his mandate. Now they're figuring out the euphoria was misplaced. Yes, the fundamental market valuation really depends on the US economy, and Trump can't do much to fuck that up; but the psychological market valuation depends on Republicans learning that they're fucking stupid idiots with no grasp of economics or policy whatsoever.
Expect that to take a while cos Republicans are fucking morons.
Anyway, in honour of this blog's six thousandth post, here's a video of a kitty cat sleeping in a tiny human bed:
Wednesday, August 23, 2017
USA Today - Valerie Plame wants to buy Twitter, ban Trump.
I mean, while she's at it she could also ban the 100,000 Russian troll accounts.
Then again, maybe Twitter should fucking well do this themselves.
der Spiegel - the mysteries of the Russian mindset. Ever wonder why, over and over again, Russia keeps devolving into an illiberal fascist plutocracy with utterly no citizen input? Or why Yabloko disappeared as a political party? This article explains the Russian mind:
Several months ago, I had a dispute about this with respected filmmaker and theater director Andrei Konchalovsky. He is turning 80 this year, has made some of Russia's best films and has lived in Hollywood for a long time. Despite our disagreements, we were very close to one another in our views of many things. Konchalovsky says Russians have retained the soul of a peasant over the centuries, arguing that Russians never became citizens in the true sense of the word and always positioned themselves in opposition to the state, because the government is always trying to take something away from them. At the same time, he argues, Russians are so enormously patient that they can more easily accept injustices. He also argues that Russian thinking is Manichean -- that Russians only know black and white.
NY Times - Mitch McConnell realizes Trump is an idiot.
Of course, the Republican party is to blame.
1. The Republican party has spent 40 years pandering to the lowest common denominator, fanning the flames of division and feeding crass populism.
2. Um... no, #1 is really all you need to know.
New Deal Demoncrat - weekly indicators. Though it's not where the economy is now that's important. It's what dismal hole Trump is leading the economy into that matters.
Monday, August 21, 2017
Daily Express, the Daily Mail's Daily Mail - solar eclipse: panic in Salem.
Uh... just in case you're worried, the last time there was a total solar eclipse was March 9, 2016. It was visible across Sumatra, Borneo and Sulawesi.
And no, the end of the world didn't happen in Sumatra, Borneo and Sulawesi.
Then there was one on March 20, 2015, visible from the Faroe Islands and just off the coast of Iceland.
Iceland, a supervolcano, did not blow up destroying the world on March 20, 2015. If it did I'm sure we would have heard about it. The Faroe Islands, meanwhile, didn't suffer a zombie attack.
Previous to that, Nov 3 2013 saw a total eclipse pass across Africa. Nothing happened, though in the Gulf of Guinea the island of Fernando Poo continued to make people giggle.
And so on, about every year or so on average, the world failed to end with a total solar eclipse.
Just not in Jesusland USA, for several decades, til now.
But "a Wyoming Woman" says it will! OMG!
K2 Radio - Wyoming woman says Yellowstone will erupt during the eclipse!!!!!! Quote:
Darrah Perez of Riverton is a believer in signs and portents, and has, she said, had a revelation. The total eclipse of the sun, which will pass over the United States on August 21st, will trigger the eruption of the Yellowstone Caldera, sometimes known as the supervolcano.
The caldera measures 35/45 miles and is full of pressurized, molten lava. The Yellowstone Supervolcano is the volcanic field which produced the latest three supereruptions from the Yellowstone hotspot; it also produced one additional smaller eruption, thereby creating West Thumb Lake 174,000 years ago. The three super eruptions occurred 2.1 million, 1.3 million, and approximately 630,000 years ago.
Experts say the ash cloud from a full-bore eruption would blanket most of the United States with devastating results.
But, scientists say the chances of this are remote for the foreseeable future.
Well... who ya gonna believe? "A Wyoming woman" who "believes in signs and portents", or scientists?
I'm amazed that this story hasn't made it to Zerohedge yet, considering they've ran a whole flood of news on a pending Yellowstone eruption recently, and this is most definitely something that they can blame on international Jewry.
PS for those of you in Ontario, an eclipse will be passing right over us in April 2024, so you'll get a chance to see something better then.
I intend to carry a "the end is nigh" sign on that day.
Friday, August 18, 2017
Maggie Haberman on Steve Bannon:
The notion some folks are telling themselves is that if Bannon is gone, this all magically changes. It does not.
Problem #1 is, who does he get replaced with?
Problem #2 is, he probably won't get executed by firing squad; he'll just go back to the internet and troll the President from outside.
But feel free to ooh wow buy the S&P up to its 3:00 PM Thursday level on the news of Bannon's purported firing.
Apparently his "Broadway production" is a self-indulgent waste of time. But at least he's being funny for a few minutes today:
Reuters - filmmaker Michael Moore says Trump "will get us all killed". Quote:
"This guy's going to get us all killed. There's nobody in charge. This man (Trump) has the nuclear codes," Moore, 63, told Reuters Television in an interview on Thursday.
"I'm hoping somebody in the Pentagon is protecting us. Like, whatever's in that nuclear briefcase it's just some girlfriend's phone number or something[...]".
QQQ is threatening to break its SMA(50). That'd be a big plummet if it came. Wonder if the American Republican investor has panicked enough?
Anyway, some reading:
NY Times - Fed officials confront new reality: low inflation and low unemployment. Quote:
Most Fed officials subscribe to a view of inflation in which prices rise more quickly as unemployment declines. The basic idea is that companies must offer higher and higher wages to keep their workers.
Now, the Fed is confronting “the coexistence of low inflation and low unemployment,” a phenomenon that inverts the “stagflation” experience of the 1970s, when both inflation and unemployment climbed.
The meeting account said most officials continued to regard low unemployment as the most important factor. They said inflation was rising slowly because of temporary factors, like a decline in cellphone service prices. And they remain inclined to raise the Fed’s benchmark rate later this year.
Blaming it on cellphones just shows how utterly ignorant they are. What'll be the next transitory effect keeping down inflation in the $18 TRILLION dollar US economy, hm? Declining pork prices? Framing lumber? An aggressive Piggly Wiggly coupon program?
There are people on the FOMC who believe in hard data and empirics. They are what the press calls "the doves", because they believe in empirical verification, and reality trumping fantasy.
Then there are people on the FOMC who still are wedded to the nonsense bullshit taught in academia based on a homogeneous consumer who can buy a continuous spectrum of consumption, and sell a continuous spectrum of labour, dependent on his utility function which he knows and which satisfies Inada conditions, trading with a homogeneous firm who uses homogeneous priceable capital and homogeneous labour to produce a homogeneous consumption good according to a declining-returns function, that is then sold in perfect competition at breakeven prices, and whatever the hell you do don't mention Sonnenschein Mantel Debreu! These people are living in a fantasy world, and anything they say about economics should be recognized as applying only to the stripped-down fantasy world of their model - not to reality.
Ritholtz - the imaginary debt crisis is here to stay. Quote:
Have a look at the chart below. The total amount of revolving credit outstanding, much of it reflecting credit-card borrowing, peaked in 2008 and then collapsed during the financial crisis. After bottoming in 2011, it slowly began to rise, and almost nine years after the peak has finally reached new highs. There also were new records for the size of the U.S. population, gross domestic product, total household income, net worth and, perhaps most important of all, disposable personal income. This is what tends to happen in an economic expansion.
Go look at the chart.
Or, just realize that the anti-debt narrative originates with 19th-century anti-Semitism, and therefore it's always ever just a right-wing canard, and nothing from the right wing has ever made sense, so you can just ignore the whining from now on.
Since Zerohedge is trying to make the Electronic Frontier Foundation sound like supporters of neo-Nazism, here's a link to the EFF's real post:
EFF - fighting neo-Nazis and the future of free expression. Wherein you learn some things that Zerohedge left out:
We at EFF defend the right of anyone to choose what speech they provide online; platforms have a First Amendment right to decide what speech does and does not appear on their platforms. That’s what laws like CDA 230 in the United States enable and protect.
So contrary to Zerohedge's assertion, the EFF do not say a private company should be forced to publish ideas that it considers odious or dangerous.
It’s notable that in GoDaddy and Google’s eagerness to swiftly distance themselves from American neo-Nazis, no process was followed; CloudFlare’s Prince also admitted that the decision was “not CloudFlare’s policy.” Policies give guidance as to what we might expect, and an opportunity to see justice is done. We should think carefully before throwing them away.
Again, the EFF just wants a transparent process for the removal of neo-Nazi websites. Like, "our company will not provide service to anyone advocating race hatred", or "our company will not provide service to anyone who cheers the murder of a nonviolent protestor, calling her a fat childless whore".
Frankly, I think they're being a bit stupid here. Daily Stormer's takedown is not an item of concern for free speech advocates anywhere.
But if there is a single reason why so many individuals and companies are acting together now to unite against neo-Nazis, it is because a future that seemed unlikely a few years ago—that white nationalists and Nazis now have significant power and influence in our society—now seems possible.
And so they recognize that an individual's moral compass should never be subsumed by airy-fairy bullshit about "freedom of speech".
I'd add that if you compel internet companies to allow neo-Nazis to use their services, you're going to drive everyone with a moral compass out of the industry.
I'm not telling you who, cos you wouldn't click through - what's changed in the past few days for Trump. And, from one of the most astute no-bullshit political analysts around, here's the money shot:
Anyone with eyes — eyes not glued to Fox News, anyway — has long realized that Trump is utterly incapable, morally and intellectually, of filling the office he holds. But in the past few days things seem to have reached a critical mass.
Journalists have stopped seizing on brief moments of not-craziness to declare Trump “presidential”; business leaders have stopped trying to curry favor by lending Trump an air of respectability; even military leaders have gone as far as they can to dissociate themselves from administration pronouncements.
Put it this way: “Not my president” used to sound like an extreme slogan. Now it has more or less become the operating principle for key parts of the U.S. system.
Even for Republicans, by the way.
I wonder if they'll even be able to dogwhistle anymore, now that the masses have seen the subtext presented explicitly by Trump?
Bloomberg - Trump abandons plan for infrastructure council.
I mean, it's hard to set up a council on infrastructure when the only people interested in associating with you don't own construction companies or engineering consultants.
Like, y'know... David Duke.
I'm only sayin'....
Thursday, August 17, 2017
Vanity Fair - Trump's implosion cannot be controlled. The CEOs figured this out already and jumped ship; are the Trump admin appointees with brain cells going to be next out the door in disgust? The entire White House is running anonymously to the press to complain about how impossible their job is.
The Economist - Donald Trump has no grasp of what it takes to be President. Well, at least you didn't endorse him in 2016 and make yourselves look even stupider than you normally look, guys.
WaPo - magazine covers after Charlottesville are jarring. Well, if you can't persuade Republicans with reasoning, you might as well try using cartoons.
Newsweek - Trump is just six Senate votes away from impeachment. Haha! Dream on! The Republican Senators who have been criticizing Trump would still never in a million years vote him out of office. And that's even after stipulating that Pence would be an ideal rubber-stamping pet puppy for Republicans.
I at least take solace in the fact that a fair number of people, both voters and beltway insiders, are finally starting to realize how stupid it is to put a clown like this in office for 4 years.
Thing about populism is, once you start down that road you quickly find yourself jumping more and more sharks:
Pitchfork - Thor Harris says he's running for Governor of Texas. Quote:
Thor Harris—frontman for Thor & Friends, and former member of Swans and Shearwater—said today that he wants to run for governor of Texas.
Wait, what? Former member of Swans? This Swans?
OK, I'm in!
Standing in front of a rainbow flag, he explained his reasoning. “Howdy, my name’s Thor Harris, and I’m running for governor of Texas, ’cause fuck this.”
I find his political viewpoint intriguing and would definitely subscribe to his newsletter.
When asked if he’s really planning to run, Harris responded to Pitchfork, “Why the fuck not?
Again, that's a far better reason to run than most.
In February, Harris was suspended from Twitter after he posted a joking tutorial about how to punch Nazis. His how-to followed the viral video of alt-right activist Richard Spencer getting punched in the head on Inauguration Day.
OK, so he's definitely not a Republican. If he was a Republican, he'd have posted a video about how he loves sucking Nazi cock, instead of a video about punching them FFS I mean that'd mean punching Strom Thurmond or something.
So, I hereby support Thor's run for governorship of Texas. #1, I'd like to see how deep the populist rabbithole can go, and #2, apparently the Democrats are such fucking sissies that they're not even going to contest the governorship, because that would mean talking to American citizens, and they gave that up decades ago. So we may as well have someone contesting the governorship.
Wednesday, August 16, 2017
NBC - literally every CEO quits Trumps council. No, not just that one, but the other one also:
"As our members have expressed individually over the past several days, intolerance, racism and violence have absolutely no place in this country and are an affront to core American values...We believe the debate over Forum participation has become a distraction from our well-intentioned and sincere desire to aid vital policy discussions on how to improve the lives of everyday Americans," a statement from members of the Strategic and Policy Forum council read.
"As such, the President and we are disbanding the Forum," it added.
They understand Trump will be a lot more mellow about it if they share credit with him.
The Campbells CEO stated it in the most simple way possible, just so all the Nazis in the south fucking well get it:
Within minutes, Campbell Soup Co. president and chief executive Denise Morrison issued her own statement, in which she said, "Racism and murder are unequivocally reprehensible and are not morally equivalent to anything else that happened in Charlottesville."
Wah, say the butthurt Trumptards! Racism and murder are not unequivocally reprehensible! They're exactly as bad as taking down a statue or saying that black lives matter!
Think the Republican clowns are actually going to get their corporate tax breaks now?
New Deal Demoncrat - 1980's "The Changing of the Guard". Wherein he argues that the Democratic Party's turn away from the working class was evident even back in 1980. It's a good read. Here's his conclusion:
Even now, two generations later, as we have seen that when you take economic equity for granted it goes away, Chuck Schumer in 2016 and Mark Penn this year have continued to laud a strategy grasping for suburban Republicans and eschewing the traditional Democratic urban working class. As it turned out, bill Clinton had the priorities of voters fundamentally wrong: social conservatism was categorically more important to a critical mass of (especially white Southern) voters than economic conservatism.
But the ideology that Bill Black spoke of in June was already flowering 40 years ago -- the turning away from traditional Democratic power centers, and from broad government programs anchored in economic populism, in favor of social issues and a commitment to lower taxation and more efficient fiscal prudence -- espoused by a group that grew up in the post-war middle class suburbs and sought to appeal to those suburbanites first and foremost, taking for granted that the broad prosperity that those programs forstered would continue.
I'd add two things though.
The Republicans have followed a long strategy of changing the narrative for the working class/rural/southern Conservative voter. Firstly, they got involved in swinging Christian fundamentalism hard-right, to the point that now apparently American Jesus believes in hating black people and letting poor people suffer.
Secondly, through the Mont Pelerin Society, the right wing has worked tirelessly to brainwash people into thinking that radical right-wing policy is supported by economic theory and brings wealth to all, and that it's not even remotely a trojan horse used to reassign more and more wealth to the kleptocratic right-wing elite.
The Democrats seem to have not bothered trying to speak to the rural, conservative, working class voter, or to address the predominant narrative in his political stance in any way, for over 30 years now. It's as if they gave up on the south after Carter.
And maybe that's because American progressivism has always known that rural, conservative voters are susceptible to the most odious forms of populism, and they want to stay above populist manipulation.
Well, guess what? You gotta do it if you want to accomplish something.
NY Times - the danger from low-skilled immigrants is not having them. It's an argument from empirical reality, which means it's probably not going to convince Republicans.
It's a much better argument to ask a bunch of Republican employers who happily profit from hiring immigrants what they're going to do when they have to hire an American instead, and where they're going to find these people.
at 9:15 AM
Larry Summers - this is precisely how fucked the US is. Quote right from the start:
With the term of Janet Yellen as Federal Reserve chair ending next February, the president will have to nominate and the Senate will have to confirm a new head of the central bank in coming months.
Yup. The US is going to have to rely on Trump (or Pence, ahem) to nominate the next Fed Chair.
As an economics student, let me tell you that the next Fed Chair could royally fuck up the entire planet for a hundred years if he's so much as a fan of Prescott & Sargent.
If history is any guide, it is more likely than not that the economy will go into recession during the next Fed chair’s four-year term. Recovery is now in its ninth year with relatively slow underlying growth for demographic and technological reasons, very low unemployment and high asset prices. Even without these factors, experience teaches that recessions are almost never forecast or even rapidly recognised by the Fed or the professional consensus forecast, but there is at least a 20 per cent or so chance that if the economy is not in recession, it will be so within a year. So the likelihood that the next Fed chair will have to address a recession is probably about two-thirds.
Historically, the Fed has responded to recession by cutting rates substantially, with the benchmark funds rate falling by 400 basis points or more in the context of downturns over the past two generations. However, it is very unlikely that there will be room for this kind of rate cutting when the next recession comes given market forecasts. So the central bank will have to improvise with a combination of rhetoric and direct market intervention to influence longer-term rates. That will be tricky given that 10-year Treasuries currently yield below 2.20 per cent and this would decline precipitously with a recession and any move to cut Fed funds.
As a result, the economy is probably quite brittle within the current inflation targeting framework. This is under-appreciated. Responsible new leadership at the Fed will have to give serious thought to shifting the monetary policy framework, perhaps by putting more emphasis on nominal gross domestic product growth, focusing on the price level rather than inflation (so periods of low inflation are followed by periods of high inflation) or raising the inflation target. None of these steps would be easy in current circumstances, but once recession has come effectiveness will diminish.
But now that you've been put to sleep by blah blah technical stuff, let's scare you back to full wakefulness:
There must be more risk now of presidential interference with the Fed than at any time since Richard Nixon. In dealing with international matters, the Fed is partnered with an understaffed and amateurish Treasury and a president who is dissipating US credibility. Most fundamentally, the temper of the times has turned against technical expertise in favour of populist passion and the Fed is the quintessential enduring apolitical institution.
Market's wondering whether it's still rolling over, or whether this past week's action was just a 2% freakout on an upward path.
Calculated Risk - LA port traffic increased in July. So I guess the economy is doing great, if imports keep increasing.
New Deal Demoncrat - real retail disappoints the doomers. With lots of charts for you, because data is king. Not Twitter.
By the way, Kim Jong-Un should really get himself a twitter feed. He needs to be able to talk to more idiots.
And, on the other hand:
Calculated Risk - Goldman on the debt limit. It'll be interesting to see if the Republicans are still interested in sabotaging the United States, what with their party still in control of Congress, and now also the White House. My bet is on yes, but I'm okay with being surprised.
Ninja from Die Antwoord talking about... well....
With hilarious animation.
Monday, August 14, 2017
The story of an American Nazi going on a murderous rampage has taken the focus off North Korea, so stocks are up:
Reuters - Charlottesville violence tests Trump's presidential mettle. And, of course, Piddles responds by blaming the people who don't like Nazis for making Nazis want to commit mass murder. Good work, Piddles!
Reuters - victim in Virginia melee wept for social justice. A story about the person who the Nazi ran over and killed. Which prompted this:
Reuters - Godaddy boots white supremacist website. And of course the right-wingers scream "censorship!", because censorship is what you call a company choosing to quit working with you because you're odious - and censorship is not what you call murdering people at a political counter-rally against Nazis.
And, of course, Trump responds by refusing to offend the Nazis who campaigned for him. So:
Reuters - Merck CEO resigns from Trump council because he's scum. And you should see all the hate being aimed at Frazier right now in the comments sections at popular neo-Nazi Russian-funded propaganda website Zerohedge, because dontcha know Frazier is black.
But, like I said, at least people have quit selling on the North Korea news, and are now buying on the American Nazi news because Nazism doesn't negatively impact expectations of future earnings.
Friday, August 11, 2017
Thursday, August 10, 2017
Hey, here's another thing you can worry about as you sell all your stocks!
Calculated Risk - Goldman on the debt limit.
The Krugginator - how bad will it be if we hit the debt ceiling?
Personally, I don't think the Republicans are stupid enough tohahahaaa I just realized what I wrote there wtf is wrong with me.
As of noon today, $VIX futures are still contangoed.
So this right now is just bullshit selling by people who want to puke into empty bids because they think other people are going to puke into empty bids later.
By the way, on the topic of Republicans:
The "Trump Bump" was the result of Republicans, who avoided getting into the market thru 8 years of Obama because sociamalism, suddenly deciding to go long US equities because they were going to get Obamacare repeal and tax breaks.
Now, they see that Obamacare repeal is never going to happen, thus tax breaks are also less likely, they're scared of losing the House in 2018, and instead of delivering unicorns and lollipops they think Trump is going to start World War 3 with Norht Korea instead.
Thus the shine has gone off the Trump administration among Republican investors.
If that's so, $SPX should go back down to 2000-2200 or so.
Which is a 10 percent drop and nothing to piddle your frilly pink girl-panties about.
Wednesday, August 9, 2017
So there's apparently about 16 million bitcoins.
Each one is supposedly valued at about $3280.
Thus there's approximately $53 billion theoretically supposedly worth of bitcoins.
That's a lot of laundered Chinese money and crypto ransoms!
I wonder when the total theoretical value will exceed the total possible demand? I mean, Bitcoin is only worth what people will pay for it. And everything's demand always has an upper limit.
McAfee promised to eat his own dick on TV if Bitcoin didn't hit $500,000 in 3 years. That'd require somewhere around $10 trillion stored in bitcoins worldwide.
So I guess we get to watch John McAfee eat his own dick on live TV in 3 years.
So when it comes to buying university textbooks on Amazon, you have to buy them out of season. The minute that university bookstores' book lists come out, every single Amazon seller jacks his price up so that there's almost no reason to buy from them.
But that's how "perfectly competitive" markets really work - the market leaders collude to set a high price, and then all the smaller sellers decide to follow their lead to maximize profit. I know, really that's an oligopoly, but in undergraduate economics they say you can't have oligopoly with a hundred sellers.
Anyway, so I had to buy my Metrics 2 textbook, and I know the book the prof wants to use, so I went online to find it before bookstore season.
Hey, someone's selling it for $70 CDN including delivery! That's cheap!
So I bought it.
#1, it's weird that it got to me in like 3 business days even though I only paid for standard shipping.
#2. stranger, it came from Malaysia.
#3, as it turns out, they sent me the "Global Edition". That's the edition released outside the US and Canada for students in third-world countries who would never pay $300 for a textbook because ffs you can buy a year's worth of rice for your family for that kind of money.
So should I return it?
Well, as an economics student, I know that a rational consumer should maximize his utility by profiting from price differentials across segmented markets. And the $200 I saved is worth a lot, utility-wise. So, according to undergraduate economics, I did the right thing and if they want me to send it back they can refund me 2 years of tuition for pumping me full of libertarian fantasy lies.
And the textbook can't be that much different, since it only costs $20 to print anyway, and the company wouldn't be keeping its third-world customers if they short-change them on educational content.
So fuck it! I don't owe the publishers anything at all, since they've fucked me over by charging 10x the production price for textbooks since forever. And since the government allows publishers to fuck me over by legalizing predatory pricing, I don't owe them any import/export law obedience either.
I just don't get these sissy people of today....
Consequence of Sound - New Mexico man arrested for urinating on family at Metallica concert. Sigh:
Rather than missing a song or two to visit the restroom, 44-year-old Daniel Daddio allegedly urinated on a family of three seated in front of him.
According to Arizona’s ABC15, a man, his wife, and their 10-year-old daughter “felt warm liquid washing over their backs and legs” while taking in the concert. When the husband turned around to confront Daddio about the act, he merely shrugged.
I mean, I guess he figured, you're at a Metallica concert, right? This is the band that sued you for using Audiogalaxy 20 years ago, and you're at their concert. You must enjoy getting pissed on, right?
Wonder how long it'll take for Zerohedge to blame this on
Tuesday, August 8, 2017
Stonekettle Station - blah blah Trump blah blah.
I love reading him, though unfortunately he only posts a couple times a month now. But he always comes up with gems like these:
As the so-called Sage of Baltimore, American satirist and pundit Henry Louis Mencken, once said, “democracy is the theory that the common people know what they want, and deserve to get it good and hard.”
Huh. My dad said that was Truman.
I’m not the first to note that Trump is what stupid people think a smart person sounds like
Well... he does sound like Zerohedge, or the comments section for a political Youtube video.
There has never been any depth to anything Trump has ever said. Not once. His responses to every question – every single question – are nothing but rambling non sequiturs. Trump is not capable of critical thought at any level.
Yeah, actually, we knew that already. But what I'd like to note is this:
Remember the last time you guys had a brainless idiot president, who was an utter complete joke, who couldn't even string together a coherent sentence, who was a laughing stock throughout the world?
Then a bunch of terrorists attacked and suddenly everyone thought he was the nation's hero. He even got a second term.
I await this fall's terrorist attack on US soil.
I was checking Zerohedge today to look for a hyperbolic, world's-about-to-end reason for today's 0.2% plunge in the markets, and I realized that the lunatic libertarian-kleptocrat fringe isn't even funny anymore.
Here's two stories, and no I'm not giving you the real links because the point of this is for me to kill my own brain cells so you can protect yours:
Zerohedge - "I have a right to express my concerns": fired Google engineer will pursue legal action: Assange offers job.
This is funny in so many ways. #1, some dick writes a memo complaining about the "left bias" at his employer (whose employ he was free to leave at any time), adding that women are inferior, and then complains that his employer fired him for being a dick.
Even more funny, this whiny girl-boy then supposedly gets offered a job by a guy hiding in the Ecuadoran embassy who now works as a disinformation agent for Vladimir Putin.
Right-wingers are such gutless whiny fucking pussies. I mean, at least my daddy's right-wingers were... well, no, actually I just looked up Joe McCarthy and William F. Buckley, and both of them were also gutless whiny fucking pussies who never even did real wartime service because they were scared of being shot at for their country.
Zerohedge - agricultural work visas soar as farmers struggle with labour shortages amid immigration crackdown.
Is it a story about the stupidity of Republican racist immigration policy? Is it a story of how the American immigration system is set up to unfairly subsidize monopolistic agricultural producers by allowing them to hire cheap labour? Is it even a story about how American right-wing states are full of fat-assed whiny gutless Republican-voting sissies who can't handle picking fruit in the sun for 12 hours a day?
Meanwhile, the cost of that progressivism is an economy that has ~95 million people who have voluntarily taken themselves out of the labor force, many because they simply don't possess the right skills or are unwilling to take jobs that they've been convinced are 'demeaning.'Yup, it's the ebils of progressivism! Those damn progressives are the reason that 95 million over-65s and under-16s don't do manual labour anymore!
And by the way, if you really cared about free-market economics, you'd understand that people have a reservation wage for labour. It's probably at least $10-$12/hr for manual farmwork, because if you offered them any less then they would turn you down in favour of a job at a less-physical, air-conditioned environment indoors - like a Piggly Wiggly.
And if farmers don't offer the market-clearing reservation wage, then the market doesn't clear and you get a "labour shortage". This is free-market, libertarian, undergraduate economics, people!
So obviously Zerohedge hates free-market capitalism, and would prefer a fascist socialist totalitarian government marching people into the fields at gunpoint.
As long as it's only black people being marched into the fields, I guess, right?
Fucking Zerohedge is such a fucking joke, they can't even get their politics right anymore.
WSJ RTE - IMF doesn't want to uncover state corruption.
The problem is that the IMF is the beast of its member countries, and its member countries are corrupt, and its member countries don't want to be called corrupt.
Thus endeth your ten second political economy lesson.
The Krugginator - turns out "structural unemployment" was bullshit. Quote:
It seems like ancient history now, but five years ago there was a remarkable Beltway consensus that high unemployment was structural, the result of a mismatch between the skills workers had and the skills the economy needed. What made this consensus remarkable was that all the evidence pointed the other way: none of the telltale signs of a skill mismatch, like rising wages for some groups despite high unemployment, were in sight. Meanwhile, lots of other evidence – like the fact that unemployment was falling fastest in the same places and occupations where it rose most – pointed to a cyclical story, that is, that the economy was simply suffering from inadequate demand.
Yet so strong was the groupthink that news analyses often presented the structural story as if it were the known truth, without even acknowledging the contrary case.
So here we are, with no obvious up-skilling of the work force, but with unemployment now below pre-crisis levels, with prime-age employment not too far below where it was, and still no wage pressure. People got mad when I called the structural story humbug, but humbug it was.
Why does this matter now? Well, the people who were sure that it was structural are still out there, opining on economic policy. And while we all make mistakes, is there any sign that any of these people have so much as admitted getting this wrong, let along learned from the experience?
BTW, unless you live under a rock you know that right wing economists hate and despise Krugman even more than they hate the Satanist bisexual pervert Keynes. After all, you can just not talk about Keynes (aside from saying "oh, he believes in money printing! he causes inflation" - which is funny because they need to use a Keynesian model to "prove" it), not teach him in undergraduate (despite him having invented macroeconomics and monetary policy), and jump through hoops to cut all of his theory out of macro to replace it with idiotic 19th-century mathematical fantasy that rivals a D&D simulation of orcs vs trolls.
But you can't simply ignore the Kruggatolah because he is read by more people than all other economists combined. And that makes right-wing fruitcakes angry.
But now, even leftist economics professors (I met one! - well, at least he seemed a bit leftist on a few things) are beginning to hate Krugman for his hardcore partisanship.
Me? Far as I'm concerned, most of these other folks are gutless wimps, and at least K-dog is using the bully pulpit at NYT to lob grenades. Let's see these other fucking sissies grow a pair, get a real job in the press, and start fighting back against the 50-year wave of right wing kleptocratic mythology that their field has perpetuated.
Monday, August 7, 2017
Tim Taylor - colony collapse disorder news: bees learn how to reproduce. Fuck, even I know how to do that:
Despite the increased mortality rates, there has been no downward trend in the total number of honeybee colonies in the United States over the past 10 years. Indeed, there are more honeybee colonies in the country today than when colony collapse disorder began.
They seem to be doing this thing called "reproducing".
As far as the rest of the article, though, I don't see how "capitalism is staving off colony collapse disorder." Unless, of course, the queen bees are being paid to reproduce.
Beekeeping is actually slavery, btw, not capitalism.
Jared Bernstein - more job growth, but still no inflation. And he includes this helpful pic:
I.e., the Phillips curve is now horizontal.
What I don't get it why this is a fucking surprise. Governments can easily flatten the Phillips curve through policy, can't they? Or don't macro models incorporate policy in them?
New Deal Demoncrat - weekly indicators.
Yup, still nothing to worry about, but go read it anyway so you can be familiar with what counts as an "economic indicator", instead of (say) relying on the blog of some idiot with a cheap newsletter.
So, normally, I'd go long miners with HGU.to on the TSX. It's double-long, and it used to follow the GDX in the US.
But now, with the change in the composition of GDX, I've noticed that HGU.to's correlation to it has been greatly damaged. Some days, GDX and HGU move in opposite directions.
This makes trading via HGU far more difficult, and something I'll avoid from now on as I don't need the extra work of quanting everything out.
By illustration of what a double-long ETF is supposed to do, just look at HSU vs SPY:
That black line along the bottom is kinda like what correlation is supposed to look line (though the past week's wobble away from 1 looks a bit concerning). Correlation between HSU and SPY should be nearly exactly 1.
Here's HQU vs QQQ:
Even better. Correlation is almost always 1.
But here's HGU vs GDX:
The big wobble in correlation at the start of June, and the bigger wobble throughout all of July, mean HGU is no longer a vehicle for trading GDX. I mean, a correlation dropping to 0.35 or so? I may as well trade Magna or Royal Bank to get exposure to gold miners.
I know this is because of the radical repurposing of GDX that happened in the US. And maybe that actually means you should use a non-repurposed Canadian gold miners ETF to do TA on gold miners from now on, and avoid looking at the GDX chart altogether.
It just surprises me, because I thought HGU.to gets its double-GDX correlation-one movement through trading of GDX forward options. I guess not. And I thought the purpose of HGU was to yield double the performance of GDX. Again, I guess not.
I could look up the details of how HGU works by looking at its info circular, but frankly until gold miners go on a tear, why bother opening the hood of another ETF? I won't have time to day-trade in September anyway.
But here's the warning for you Canadian readers. If you were wondering why your Canadian goldbug ETFs were all screwy, this is a clue as to why.
Friday, August 4, 2017
Tuesday, August 1, 2017
It was so crazy that Lizza saved the audio of the interview under the filename insane_scaramucci_interview.mp3.
Really. Jump ahead to 2:40 if you don't believe me.
So Anthony Scaramucci is fired as communications director after just a few days, and here's why:
New Yorker - Anthony Scaramucci called me to unload about White House leakers, Reince Preibus, and Steve Bannon. Quote:
He responded by threatening to fire the entire White House communications staff. “What I’m going to do is, I will eliminate everyone in the comms team and we’ll start over,” he said. I laughed, not sure if he really believed that such a threat would convince a journalist to reveal a source. He continued to press me and complain about the staff he’s inherited in his new job.
Sounds like someone who has no clue how to deal with the media, which makes him a bad choice for WH comm director. Also, he sounds like someone who either runs on empty bluster or destroys organizations on a whim, either of which makes him a bad director of anything.
Monday, July 31, 2017
The volume comes to sell QQQ, but then the volume goes and QQQ stops doing anything. Meanwhile people are buying $DJIA because who the fuck knows it's not as if any of those companies were ever worth shit to begin with.
So in lieu of any sort of real commentary, here's a video about a stupid cat:
Saturday, July 29, 2017
The catnip is growing great this year, thanks to our very wet spring and early summer. In fact, it's even sprouting up in the lawn, which is almost dead from last year's several months of drought.
Even better, it looks like the rain has suppressed the aphid farming ants, so there are no aphids on my catnip this year. There do seem to be aphid farmers around, but it looks like they've moved on to farming large red aphids on the majestic 4-foot-high thistles that come up everywhere because of the rain.
As usual, the catnip is attracting all sorts of bees - some honeybees, some small grey bees (i.e. they have grey stripes instead of yellow), tiny needlebees (about as small as a large mosquito but definitely beeish), and yet again stupid cabbage butterflies. And strangely, some carnivorous wasps (i.e. the wasps that truly, no shitting you, eat the dead animals my cat brings home) and hornets.
But not to worry, all insects are very happy and placid when they are drinking catnip nectar. Stupid the cat even swats at the damn things when he's out there.
Strangely, I've seen absolutely no bumblebees all year - except today, where there are what look like smaller bumblebees on the flowers. But the big fat zeppelin-sized ones that we normally have everywhere have been completely absent this year.
Hopefully it's just a population cycle thing, maybe cos of the extremely abnormal weather we've had this year.
Now all I have to do is learn how to re-seed a fucking lawn properly. Cos all I've been doing is growing bigger and bigger weeds.
Friday, July 28, 2017
Way beyond most of the readership, but this is a blog post I wish I'd read 3 years ago:
Magic maths and money - why mathematics has not been effective in economics.
Suffice to say, modern mathematical economic models try to generate synthetic a priori knowledge (like the relation between A and B).
But if you have some philosophy background, and maybe also know a bit about how math works at the differential equations level and above, then you know that's impossible.
Slapping together a bunch of axioms can't create one whit of knowledge, unless you also know how those axioms work with each other, which (if you're trying to build a model that corresponds in any way with the real world) requires empirical (not synthetic) knowledge.
E.g., a macroeconomic model does these things:
1. assume you can model a labour market in isolation, assume it has certain characteristics, and assume an equation modeling how it works;
2. assume you can model a firm's production in isolation, assume it has certain characteristics, and assume an equation modeling how it works;
3. assume you can model an asset market in isolation, assume its characteristics, and assume an equation modeling how it works;
4. assume there are actors, assume how homogeneous they are, assume different homogeneity doesn't change the results, assume they act a certain way, assume how homogeneous their way of acting is, and assume an equation modeling how they behave;
5. assume you haven't missed anything that changes how this network of countable infinite equations works;
6. assume that none of the above assumptions, if changed, sends the solution off in a completely different direction;
7. if you like, also assume productivity magically increases over time with something we call "A", which is completely exogenous and don't ask us what "A" really is.
Each of those assumptions is wrong, thus the model is prima facie wrong according to any mathematician or philosopher out there. All you're doing, essentially, is modeling a battle between an army of orcs and Chuck Norris. Thus every math prof shits himself laughing whenever he reads an economics paper.
So why do this?:
The answer is rooted in the observation that the 'mathematical' approach is powerful rhetorically: you can use it to convince everyone of almost anything, providing you can make the chain of arguments tricky enough to follow. From a philosophical perspective, Kant distinguished the ‘lower faculties’, such as mathematics, that would consider matters of pure reason independently of the concerns of the state from the ‘higher faculties’, engineering, jurisprudence, medicine and theology, were concerned with matters of authority and would be regulated and monitored by the state. If economics is mathematical it should inform the state, not be directed by the state, if it is not then it will have the same status (and funding) as theology (and, one would suppose, other modern social and human sciences).Exactly. Economics is meant to order politicians around. That's the whole point of neoliberalism: the death of state sovereignty and the rise of the kleptocratic elite back to their traditional position of absolute power.
It's easier to boss politicians and the government around by using math than by using data, history, and informed judgment.