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Wednesday, August 16, 2017

All the CEOs say he's a waste of time. Sad!


Breaking news:

NBC - literally every CEO quits Trumps council. No, not just that one, but the other one:

"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?

Criticizing Democrats in 1980


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.

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.

And maybe that's because American progressivism has always considered rural, conservative voters to be susceptible to the most odious forms of populism, and they considered themselves above populist manipulation.

NYT on low-skilled immigrants


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.


Larry Summers reminds us how fucked the US really is


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.

Boring details:

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.

Yeah.

Some economic news


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.

Meanwhile:

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.

The time Ninja and Kanye played basketball with Drake


Ninja from Die Antwoord talking about... well....



With hilarious animation.


Monday, August 14, 2017

Your daily Nazi news


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

Friday video: Alvvays


From among the surfeit of new indie bands with superfluous vees in their names, here's Canadian band Alvvays with a fun corker that I'm sure Alan McGee would love:



Unfortunately they're not noisy like this all the time.

Thursday, August 10, 2017

And on the topic of Bitcoin....


I find it funny that I post one single snark on Bitcoin, and all of a sudden I get a massive influx of traffic from Russia.

I wonder how much money the Russian central bank has invested in Bitcoin?


If WWIII wasn't bad enough....


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.


VIX bulletin


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

Bitcoin math


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.

A small economics lesson


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.