Wednesday, January 17, 2018
Did my seminar, it might have been good, I dunno.
No real news on the market front: despite yesterday, people are still in a loading-up-the-truck mode in the US equities. $USD has been dropping precipitously, which you should expect when the US government is generating massive new future deficits with their tax plan when the rest of the world is eating away at their deficits through economic growth. Of course, a drop in $USD is great for US businesses with a lot of foreign sales, and a drop in $USD means stocks have to rise in $USD terms to maintain real value.
Gold should go up because the other commodities have gone up. Although the scuttlebutt is that the rise in the price of oil is just being engineered by the Saudis to get the best possible price for their float of Saudi Aramco, in which case you should expect the price of oil to go back down in a year or so to kick US shale back out of the market.
Have been trying to consolidate my view of stock markets:
1. A stock price doesn't rise as a reward for booked earnings, because investors don't buy stocks to reward companies: they buy stocks in expectation of future appreciation.
2. If prices move because of expectations, then your most important factors in generating an algorithm for "fair price" should be expectation functions, not empirical values from the past (ignoring the idea of temporal correlation in time series, since after all that tends toward zero as t increases).
3. So the market is a mechanism for averaging over the expectation functions of all market participants. Importantly, expectation functions of non-participants are worth nothing (except to try to predict when they may change into participants), and expectation functions of participants are weighted by their size of participation.
4. Then, the job of the investor is to try to predict the inflection points for the expectation functions, not the inflection points for prices - though the latter will influence the former, obviously.
5. So basically, your job is to try to calculate E(E(x)).
Seems like the above is even beyond Shiller, so that's probably a pretty decent theory for now.
Friday, January 12, 2018
It's very problematic to put together a policy seminar in one week that's worth 30% of your total grade, in a 4th-year class that you really want to get an A+ in, taught by a prof whose reccie you want for grad school, just saying.
I'm dumbfounded and stupefied by the continued strength in SPY and QQQ: they've gone way too far, you shouldn't make this much money in a month, their technicals are very overextended.
Then again, the big Trump tax breaks are going to put a lot of new money into the pockets of buyers of equities, while simultaneously allowing companies to buy back shares to shrink the equity pool. So while the behaviour is abnormal, the environment itself is abnormal.
And of course this is going to blow one hell of a bubble, because Republicans believe in bubbles. But it can take years to play out: recessions happen for reasons, not because of disturbances in the quantum foam.
I disbelieve the inflation hype, by the way, because (1) nobody can measure inflation anymore, it's all been politicized; (2) price inflation is not asset inflation is not commodity inflation; (3) the institutional monetary system of the West has been successfully fighting "inflation" for 35 years now, they aren't going to stop anytime soon.
But with all that in mind, The Cookie Monster Himself laid out a few years ago why there's a good case to invest in gold... eventually. Now might be that eventuity.
But, with that in mind:
WSJ - the global economy's output gap has closed. This is a big thing. I'm not interested in explaining this to you: go read Wikipedia on the topic, and then get 3 years of an economics degree.
New Deal Demoncrat - JOLTS confirms November payrolls strength.
New Deal Demoncrat - a US economic boom in 2018? Then again, what's important for the US is whether there's a global boom, not a US one.
Just popped into Business Insider, and it seems they feel Trump stories are sufficient clickbait:
Business Insider - Botswana asks, 'are we a shithole country?' Dude, if you don't have a Trump tower, you're a shithole country. Russia, on the other hand, is a fantastic country.
Business Insider - Paul Ryan calls Trump's 'shithole' comment 'unfortunate'. Quote:
"I thought about my own family. My family, like a whole lot of people came from Ireland on what they called 'coffin ships' and worked the railroads," Ryan said. "It is a beautiful story of America, and that is a great story. That is the story today, and that is the story we had yesterday, and that is what makes this country so exceptional and unique in the first place."
See, Ryan is what you get when you let fucking Catholics into your country.
He continued: "We've got great friends from Africa in Janesville who are doctors, who are just incredible citizens. And I just think it's important that we celebrate that."
"Some of my friends are black!"
Business Insider - Trump asked if he's a racist at MLK address. The answer? He wouldn't let them touch his money, he leaves that to the Jews. Seriously, you had to ask?
And, of course:
Business Insider - Trump's lawyers paid a porn star $130,000 in hush money. Cuz if you paid her and she's a porn star, then it's okay.
Yeah, I'm still here... I'm just working on a seminar that I have to present on Tuesday.
Here's two interesting articles from Jojo on gold and gold miners:
Get Back Jojo! - five reasons gold stocks will break out in 2018.
Get Back Jojo! - here are the key levels in gold and miners.
Thursday, January 11, 2018
Reuters - South Korea to ban cryptocurrency, raids exchanges on tax evasion charges. Quote:
South Korea’s government said on Thursday it plans to ban cryptocurrency trading, sending bitcoin prices plummeting and throwing the virtual coin market into turmoil as the nation’s police and tax authorities raided local exchanges on alleged tax evasion.
The clampdown in South Korea, a crucial source of global demand for cryptocurrency, came as policymakers around the world struggled to regulate an asset whose value has skyrocketed over the last year.
Justice minister Park Sang-ki said the government was preparing a bill to ban trading of the virtual currency on domestic exchanges.
And of course it's more complicated than that, but the point remains:
"Fiat" doesn't mean "worthless money". "Fiat" means "stuff that the government declares to be money". Thus, anything that the government declares to not be money ends up not being money.
Because the government says so.
Thus endeth the lesson.
Tuesday, January 9, 2018
There's three problems with James Damore suing Google, alleging they fired him for being a "white male conservative":
1. His original memo isn't very "conservative" at all. It seems that he's only gotten that way recently out of bitterness over being fired.
2. Your company can fire you for causing trouble at work.
Oh... and most importantly,
3. Google is worth $771 billion. James Damore isn't. Ergo, he can never win a lawsuit against them, which makes you wonder how much of a tard he has to be to sue for this nonsense.
It's hilarious, by the way, that conservatives are in favour of fire-at-will legislation that gives an employer blanket right to terminate anyone for any reason, and yet the minute Google does this they're evil or something.
I guess conservatives admit after all that we need the heavy hand of government to force employers to hire people that they don't like.
Saturday, January 6, 2018
CNN - Trump: "I'm a very stable genius". Well, I guess we're all okay then:
"Actually, throughout my life, my two greatest assets have been mental stability and being, like, really smart," the President continued. "Crooked Hillary Clinton also played these cards very hard and, as everyone knows, went down in flames. I went from VERY successful businessman, to top T.V. Star ... to President of the United States (on my first try). I think that would qualify as not smart, but genius ... and a very stable genius at that!"
Darn right! And there's nothing that screams stability more than still fixating on Hillary Clinton a year after the election!
Or desperately trying to defend your mental status on Twitter!
Friday, January 5, 2018
Ha ha, turns out Trump is an incompetent retard who didn't even want to be president, you Republicans are idiots:
BBC - Trump seen as a child by staff. Quote:
Mr Wolff has hit back against White House attacks, saying the president has no credibility and that "100% of the people around him" question his fitness for office.To be fair, the Republican party's god nowadays is a B-movie actor who was senile while in office.
He added that White House staff described the president as childlike because "he has the need for immediate gratification. It's all about him... This man does not read, does not listen. He's like a pinball just shooting off the sides".
CNN - book hits Trump where it hurts most: his ego. Quote:
But as Washington consumes a sensational West Wing exposé by journalist Michael Wolff, Trump is being forced to watch as his prized image is ripped to shreds.To be fair, most of the Republican insiders got heir start in politics working for a short balding sweaty man who was so paranoid that he recorded his own illegal schemes on audio tape.
When a presidency is anchored so fundamentally on an image, as it is with Trump, rather than a long history of political achievement or ideological consistency, any deterioration of that image can be especially perilous. For Trump, who may be more conscious of how he is perceived than any politician in history, the mockery is likely to be especially painful.
BBC - everyone's talking about Trump's mental illness. Quote:
In his book, Fire and Fury, journalist Michael Wolff writes that President Donald Trump is showing worsening signs of mental decline.To be fair, um... shit I already brought up Reagan. OK, the Republican party's ideological leader is a son of a goldbug who worships a Russian immigrant sci-fi author who hated socialism while spending her entire old age collecting welfare.
"Everybody was painfully aware of the increasing pace of his repetitions," he writes in Hollywood Reporter.
Vox - even psychiatrists are saying Trump should be evaluated by force. Quote:
Yet there is a growing call from a group of psychiatrists — the best medical experts at interpreting aberrant human behavior — for exactly this: an emergency evaluation of the president’s mental capacity, by force if necessary.Come on! Everyone in the Republican party is a narcissistic psychopath with delusions of conspiracies. You'll have to do better than that!
Leading this call is Bandy Lee, an assistant professor in forensic psychiatry (the interface of law and mental health) at the Yale School of Medicine who has devoted her 20-year career to studying, predicting, and preventing violence.
She recently briefed a dozen members of Congress — both Democrats and Republicans — on the president’s mental state. And this week, she, along with Judith Herman at Harvard and Robert Jay Lifton at Columbia, released a statement arguing that Trump is “further unraveling.” In October, a collection of essays from 27 mental health professionals that Lee edited, The Dangerous Case of Donald Trump, was published.
The Guardian - Donald Trump eats McDonald's for fear of being poisoned? Quote:
Trump’s answer to the poisoning threat is to eat McDonald’s, by preference, all the time; the burger chain never knows he’s coming, and it’s all pre-made. This has the distinct ring of post-hoc justification – it would be much more reliable to get a nine-year-old to sit next to him and pre-taste his food. Besides which, even if the staff of McDonald’s don’t in general know who’s coming, it would be unusual for them to feed the president without a heads-up. Much more likely, Trump fears poison and he really likes McDonald’s.OK... she wins.
This, too, was an open secret from the time of his trip to the Middle East, when his trailer requests read like the death row meals in a dystopian movie about 100 people all getting electrocuted on the same day.
Thursday, January 4, 2018
Calculated Risk - FOMC opinion on the Trump tax plan.They don't think it'll do much to change their situation, besides maybe giving them a little extra impetus to raise rates more, which anyone could have told you.
But also, this:
However, some business contacts and respondents to business surveys suggested that firms were cautious about expanding capital spending in response to the proposed tax changes or noted that the increase in cash flow that would result from corporate tax cuts was more likely to be used for mergers and acquisitions or for debt reduction and stock buybacks.
So it's simply going to pump a larger swing upward in the stock market.
Because asset valuations are the place where you see the elite plutocracy's demand-pull "inflation".
Wednesday, January 3, 2018
Bonddad - commodities and inflation. Turns out you don't have to run a worthless $400/yr weekly newsletter of wordsalad to notice that metals and energy have been on an upward tear for the last year.
Bonddad notes that this doesn't particularly mean that actual US inflation numbers are going to pick up. I'd respond, though, that for someone like me all that matters is what is going to happen with traders' perceptions of inflation: those, after all, are what really drive commodity prices.
NY Mag - Donald Trump didn't want to be president, tried not to win the presidency, and his entire team thought he was unfit to be president. My god, it's full of derp:
From the start, the leitmotif for Trump about his own campaign was how crappy it was, and how everybody involved in it was a loser. In August, when he was trailing Hillary Clinton by more than 12 points, he couldn’t conjure even a far-fetched scenario for achieving an electoral victory. He was baffled when the right-wing billionaire Robert Mercer, a Ted Cruz backer whom Trump barely knew, offered him an infusion of $5 million. When Mercer and his daughter Rebekah presented their plan to take over the campaign and install their lieutenants, Steve Bannon and Conway, Trump didn’t resist. He only expressed vast incomprehension about why anyone would want to do that. “This thing,” he told the Mercers, “is so fucked up.”
Shortly after 8 p.m. on Election Night, when the unexpected trend — Trump might actually win — seemed confirmed, Don Jr. told a friend that his father, or DJT, as he calls him, looked as if he had seen a ghost. Melania was in tears—and not of joy.
There was, in the space of little more than an hour, in Steve Bannon’s not unamused observation, a befuddled Trump morphing into a disbelieving Trump and then into a horrified Trump.
Early in the campaign, Sam Nunberg was sent to explain the Constitution to the candidate. “I got as far as the Fourth Amendment,” Nunberg recalled, “before his finger is pulling down on his lip and his eyes are rolling back in his head.”
Priebus had his own reservations: He had come out of his first long meeting with Trump thinking it had been a disconcertingly weird experience. Trump talked nonstop and constantly repeated himself.
“Here’s the deal,” a close Trump associate told Priebus. “In an hour meeting with him, you’re going to hear 54 minutes of stories, and they’re going to be the same stories over and over again. So you have to have one point to make, and you pepper it in whenever you can.”
The truth was, Ivanka and Jared were as much the chief of staff as Priebus or Bannon, all of them reporting directly to the president. The couple had opted for formal jobs in the West Wing, in part because they knew that influencing Trump required you to be all-in. From phone call to phone call — and his day, beyond organized meetings, was almost entirely phone calls — you could lose him. He could not really converse, not in the sense of sharing information, or of a balanced back-and-forth conversation. He neither particularly listened to what was said to him nor particularly considered what he said in response. He demanded you pay him attention, then decided you were weak for groveling.
If he was not having his 6:30 dinner with Steve Bannon, then, more to his liking, he was in bed by that time with a cheeseburger, watching his three screens and making phone calls — the phone was his true contact point with the world — to a small group of friends, who charted his rising and falling levels of agitation through the evening and then compared notes with one another.
As details of Trump’s personal life leaked out, he became obsessed with identifying the leaker. The source of all the gossip, however, may well have been Trump himself. In his calls throughout the day and at night from his bed, he often spoke to people who had no reason to keep his confidences. He was a river of grievances, which recipients of his calls promptly spread to the ever-attentive media.
As soon as the campaign team had stepped into the White House, Walsh saw, it had gone from managing Trump to the expectation of being managed by him. Yet the president, while proposing the most radical departure from governing and policy norms in several generations, had few specific ideas about how to turn his themes and vitriol into policy. And making suggestions to him was deeply complicated. Here, arguably, was the central issue of the Trump presidency, informing every aspect of Trumpian policy and leadership: He didn’t process information in any conventional sense. He didn’t read. He didn’t really even skim. Some believed that for all practical purposes he was no more than semi-literate. He trusted his own expertise — no matter how paltry or irrelevant — more than anyone else’s. He was often confident, but he was just as often paralyzed, less a savant than a figure of sputtering and dangerous insecurities, whose instinctive response was to lash out and behave as if his gut, however confused, was in fact in some clear and forceful way telling him what to do. It was, said Walsh, “like trying to figure out what a child wants.”
During that first month, Walsh’s disbelief and even fear about what was happening in the White House moved her to think about quitting. Every day after that became a countdown toward the moment she knew she wouldn’t be able to take it anymore. To Walsh, the proud political pro, the chaos, the rivalries, and the president’s own lack of focus were simply incomprehensible. In early March, not long before she left, she confronted Kushner with a simple request. “Just give me the three things the president wants to focus on,” she demanded. “What are the three priorities of this White House?”
It was the most basic question imaginable — one that any qualified presidential candidate would have answered long before he took up residence at 1600 Pennsylvania Avenue. Six weeks into Trump’s presidency, Kushner was wholly without an answer.
And hilariously, the guy who wrote this book about the clusterfuck of the Trump presidency was able to get all this inside information because he just hung around the White House and nobody had the authority to ask what he was doing there or tell him to leave.