Wednesday, November 22, 2017

Wednesday news

Gotta remember to watch Mr. Robot tonight, I missed it last week:

New Deal Demoncrat - still no DOOOOOM in the yield curve. No, it hasn't inverted. And as the charts show, the yield curve being flattish can go on for five years... of fantastic expansion like the late 1990s.

Calculated Risk - chemical activity barometer really positive. It's got a lead of about a year on industrial production. Though, actually, the US economic cycle is mostly governed by real estate, not industry.

Reuters - in Trump strongholds, some Dems want to go for broke. Frankly, I wouldn't be surprised if Beto O'Rourke's campaign to legalize marijuana and bring in universal health care wins him a Texas Senate seat. #1, Texas is demographically swinging left, we've known this for a decade. #2, maybe the reason Dems haven't been able to win in hardcore-Republican states is because they try too much to sound to sound like slightly-less-hateful Republicans?

I mean, if I were living in Nazi Germany I wouldn't vote for Mr. Slightly Less Hitler. I'd want to vote for Mr. About As Unlike Hitler As You Can Get.

Tuesday, November 21, 2017

INTERSTELLAR SPACESHIP ARRIVES: here's what you need to know

I don't know why this isn't getting more play:

Guardian - interstellar spaceship arrives in our solar system. And yet they continue calling it an "asteroid" because the PTB don't want us mouth-breathing natives to get all worked up:

Astronomers are now certain that the mysterious object detected hurtling past our sun last month is indeed from another solar system. They have named it 1I/2017 U1(’Oumuamua)

'Oumuamua means "scout" in Hawaiian. Is there something they don't want us to know?

And if so, why are they telling us?

It is thought to be an extremely dark object, absorbing 96% of the light that falls on its surface, and it is red. This colour is the hallmark of organic (carbon-based) molecules. Organic molecules are the building blocks of the biological molecules that allow life to function.

Yeah, "red" like a warship, not like organic carbon molecules.

They are travelling too fast to be captured by the gravity of the sun.

Ask yourself: how likely is it that a dumb piece of rock can travel too fast to be captured by the Sun's gravitational well?

And if that's not enough, here's an "artist's representation" of this "asteroid":

Does THAT look like an "asteroid" to you? Yeah, right.

How likely is it that an "asteroid" is going to be so long and thin? Why hasn't it broken up along the long axis from torque or collisions, or compressed due to gravity? Was it just made a couple years ago?

In a spaceship factory by aliens?

This, ladies and gentlemen, is an interstellar spaceship. We have been found. Soon the aliens will attack.

Buy gold, cos blockchain won't mean dangly wobbly donkey dick when they take out all global communications and computers with their worldwide EMP attack.

Where the fuck is Jeff Berwick when you need him?

Monday, November 20, 2017

Some Monday evening reading

Home stretch before exams. Here's stuff:

New Deal Demoncrat - housing slump looks like it is ending. Is there no end to the bull market?

Bonddad - quit piddling your frilly pink panties. The junk bond doom is not all it's cracked up to be.

IPE Zone - Norway's $1T SWF divesting from oil. Frankly, they should have done this years ago: their income is heavily correlated with oil to begin with, and you're supposed to count your income stream as part of your investment portfolio.

FT - world's pool of negative-yielding debt swells to $11T. Because there's too much money and not enough places to invest it. I mean, what would you rather hold, cash?

BBC - Indonesia's Orang Rimba forced to renounce their faith. I guess now that we evil white colonizers have learned how evil we were to forcibly convert natives and steal their land, the brown people of the world can have their turn at being evil.

Friday, November 17, 2017

Friday videos: all the videos are coming back

FFS, never saw this Pale Saints video before:

I think Meriel was already in the band at this point.

Thursday, November 16, 2017

Not all FRB economists know their ass from a hole in the ground

FRBSF - stock market evaluation and the macroeconomy. It pretty much illustrates why economists are so stupid when it comes to markets:

One valuation metric, the cyclically adjusted price-earnings or CAPE ratio for the Standard & Poor’s (S&P) 500 stock index was originally developed by Campbell and Shiller (1998) to help judge whether the stock market is overvalued. The CAPE ratio is computed as the real, that is, inflation-adjusted, value of the S&P 500 divided by the real earnings of companies in the index averaged over the most recent 10 years. Campbell and Shiller found that higher values of the CAPE ratio predicted lower future real returns on stocks over subsequent 10-year periods.

Yes, and Shiller today says not to put too much stock into the CAPE, but you've never listened to him, you've only read about CAPE in university.

A parsimonious set of macroeconomic variables can account for much of the movement in the CAPE ratio over the past five decades. These variables include the “natural” real rate of interest, the growth rate of potential GDP, and the core inflation rate. Reasonable projections for these same macroeconomic variables over the next 10 years can provide a prediction about future movements in the CAPE ratio, which, in turn, will influence the magnitude of future stock returns.

#1, You can't project shit without including political inputs.

#2, r-star is something you made up. It doesn't exist in the real world. Nobody knows the natural rate of interest. And you might want to look under the hood to see what r-star is derived from, as I'll show later....

#3, Whose r-star are you using? The USA's? The entire world invests in US-listed equities, not just the USA. And there's no reason to expect r-star of each nation to converge.

#4, 5 decades is a heterogenous dataset. Regressing on it will be misleading.

A simple regression model can be used to assess how well macroeconomic variables explain movements in the CAPE ratio. Specifically, the model regresses the quarterly average CAPE ratio on a constant, the Laubach-Williams (LW) two-sided estimate of r-star, the CBO four-quarter growth rate of potential GDP, the 20-quarter change in the LW r-star estimate, and the four-quarter core PCE inflation rate. The explanatory variables are each lagged by one quarter in the regression equation to help account for real-time data availability issues.

Figure 4 plots fitted values of the CAPE ratio from the regression model through 2017:Q3. The fit is quite good, accounting for 70% of the variance in the actual CAPE ratio over the past five decades.

So you're finding co-movement between the CAPE and the following:

a) GDP growth and core PCE inflation, which are highly correlated with earnings.
b) Laubach-Williams r-star, which is a made up thing, and probably uses as its inputs things that are highly correlated with earnings, GDP growth and core PCE.

No wonder your R-squared is 70%! If you want to get it higher, maybe you can try dropping Laubach-Williams r-star entirely!

Absent further changes in the ratio, stock prices can rise only as fast as earnings. Over the past 30 years, real earnings for the S&P 500 have grown at an average compound rate of about 4% per year. A decline in the CAPE ratio from current levels would imply that stock prices must grow slower than earnings.

No, it wouldn't imply that. Because despite your graduating with an MA in Finance, Kevin, you've forgotten your basic portfolio theory: stock prices are dependent on supply and demand, and wealth is growing faster than growth in available investments.

Again, here's the simple question that I always ask: where else are people going to put their trillions? Bonds? Real estate? Cash?

Republicans are self-destructing

WaPo - Democrats win seat in deep-red Oklahoma. Eventually the chickens come home to roost:

Democrats have flipped another statehouse seat in deeply conservative Oklahoma amid growing frustration over years of state budget shortfalls and recent scandals that led to the resignation of Republican incumbents.

Democrat Allison Ikley-Freeman defeated Republican Brian O’Hara in Tuesday’s special election for a state Senate seat representing parts of Tulsa. Complete but unofficial election results show that Ikley-Freeman, who is a therapist at a nonprofit mental health agency, won by 31 votes.

Doesn't sound particularly amazing, til you realize the district went for Trump by 40%.

That's what happens when your party are idiots: eventually everyone gets fed up with you:

The Legislature’s controlling party has failed during an ongoing special legislative session to push through tax increase plans that would bring new revenue to state coffers. Lawmakers now are considering bills that would balance the budget by raiding savings accounts and imposing cuts of about 2.5 percent to most state agencies.


Michael Whelan is a Democratic consultant who helped manage Ikley-Freeman’s campaign and the races of Democratic Reps. Karen Gaddis in Tulsa and Jacob Rosecrants in Norman, who both won Republican-held seats in special elections this year.

He attributes the Democrats’ success to a combination of factors that includes the state’s budget woes, voter dissatisfaction with President Trump and a series of scandals that have led to the resignation of four GOP incumbents this year.

“The formula has been very similar for each of these races,” Whelan said “There are a lot of Republicans out there with buyer’s remorse with President Trump, which naturally suppresses turnout.

“Then you’ve got scandal after scandal happening locally, and I think Republicans are losing faith in their brand a little bit.”

Proof that literally everyone eventually looks in the mirror.

One small step for Joe Kernen

On CNBC this morning, Joe Kernen took one small step toward not being a self-important Republican flak who babbles inane shit over everyone when he admitted his problem is that he has a "very small dongle".

Wednesday, November 15, 2017

Someone failed propaganda school

Oh, those wacky Russkies. If they weren't trying to subvert democracy and replace it with a worldwide authoritarian kleptocratic plutocracy commanded by Vladimir Tiny-Penis Putin, you'd almost want to hug them for trying so hard:

BBC News - Russkies post screenshot of a video game to prove Americans are helping ISIS. No, really:

Russia's Ministry of Defence has posted what it called "irrefutable proof" of the US aiding so-called Islamic State - but one of the images was actually taken from a video game.

The ministry claimed the image showed an IS convoy leaving a Syrian town last week aided by US forces.

Instead, it came from the smartphone game AC-130 Gunship Simulator: Special Ops Squadron.

What a doomed pathetic nation Russia is.

Even better Trump news

The Trump news just keeps on Trumping!:

BBC - American government doesn't trust Trump with the nukes. Gee, wonder why:

Some senators present said they were troubled about the president's latitude to launch a nuclear strike.

Chris Murphy, a Democrat from Connecticut, said: "We are concerned that the president is so unstable, is so volatile, has a decision-making process that is so quixotic, that he might order a nuclear-weapons strike that is wildly out of step with US national-security interests."

One of the experts, C Robert Kehler, who was commander of the US Strategic Command from 2011-13, said that in his former role he would have followed the president's order to carry out the strike - if it were legal.

He said if he were uncertain about its legality, he would have consulted with his own advisers.

Under certain circumstances, he explained: "I would have said, 'I'm not ready to proceed.'"

One senator, Ron Johnson, a Wisconsin Republican, asked: "Then what happens?"

Mr Kehler admitted: "I don't know."

People in the room laughed. But it was a nervous laugh.

The same laugh they laughed when Orange was elected, except now with nuclear weapons.

Monday, November 13, 2017

Brexit drives out furriners, then British realize they need furriners for things

IPE Zone - rotting crops in Cornwall. Yup, apparently the Cornish, who voted to leave because they hate smelly Romanians, didn't realize that those smelly Romanians were the only ones in Cornwall who would pick their crops for a pittance.

Sunday, November 12, 2017

Vanadium: the next story you're going to be fleeced by

Klendathu Capitalist - Vanadium, the next commodity. He says blah blah supply, blah blah demand. I respond that you don't invest in an iron ore byproduct, and for fuck's sake how stupid do you have to be to listen to Raoul Pal?

Trump eclipses all previous forms of stupid with new MegaStupid

This is hilarious:

LA Times - Trump judge nominee, 36, who has never tried a case, wins Federal appointment. Oh don't worry, being a Federal judge is something you can learn on the job:

Brett J. Talley, President Trump’s nominee to be a federal judge in Alabama, has never tried a case, was unanimously rated “not qualified” by the American Bar Assn.’s judicial rating committee, has practiced law for only three years and, as a blogger last year, displayed a degree of partisanship unusual for a judicial nominee, denouncing “Hillary Rotten Clinton” and pledging support for the National Rifle Assn.

Hey! I'm a blogger and not qualified! Can I be a Federal judge too?

On Thursday, the Senate Judiciary Committee, on a party-line vote, approved him for a lifetime appointment to the federal bench.

Talley, 36, is part of what Trump has called the “untold story” of his success in filling the courts with young conservatives.

Hey, I can be conservative too! I can ban gay marriage, have compulsory gun ownership for wife-beaters, and force schools to teach that Jesus rode a dinosaur! Can I be judge?

“The judge story is an untold story. Nobody wants to talk about it,” Trump said last month, standing alongside Senate Majority Leader Mitch McConnell (R-Ky.) in the White House Rose Garden. “But when you think of it, Mitch and I were saying, that has consequences 40 years out, depending on the age of the judge — but 40 years out.”

Civil rights groups and liberal advocates see the matter differently. They denounced Thursday’s vote, calling it “laughable” that none of the committee Republicans objected to confirming a lawyer with as little experience as Talley to preside over federal trials.

“He’s practiced law for less than three years and never argued a motion, let alone brought a case. This is the least amount of experience I’ve seen in a judicial nominee,” said Kristine Lucius, executive vice president of the Leadership Conference on Civil Rights.

Why not go one better? Find a 16 year old mentally retarded pedophile serial rapist, get him adopted by Fred Phelps, and appoint him to the Supreme Court. He'll be turning out conservatism for the next 90 years. Take that, Dems!

The group was one of several on the left that urged the Judiciary Committee to reject Talley because of his lack of qualifications and because of doubts over whether he had the “temperament and ability to approach cases with the fairness and open-mindedness necessary to serve as a federal judge.”

Some conservatives discount the ABA’s rating. “The ABA is a liberal interest group. They have a long history of giving lower ratings to Republican nominees,” said Carrie Severino, counsel for the Judicial Crisis Network, which supports Trump’s nominees.

Maybe Republican nominees are rated lower just because they're all fucking idiots? Like, 36-year-old bloggers who have never tried a case? Might that be a reason they're rated lower? Or is it all a librul conspiracy to... um... stack the courts with people who will defend liberty?

Saturday, November 11, 2017

A bunch of economics stories

Here's some fun general reading:

Marginal Revolution - finding archaeological sites using economics. Although, as the post's comments note, (a) they're using economic geography, not economics; (b) uh, they've been doing this for decades.

Medium - could Rome have had an industrial revolution? Interesting bit of speculative fiction, but I think part of the requirement for an industrial revolution is the weakening of the plutocratic rentier class. You can't have industrial revolution when the landed gentry rule the country. I think that's even an Acemoglu theory, which makes me feel dirty now.

New Deal Demoncrat - predicting US elections with net strong disapproval. Interesting theory, but some of the other graphs (which are VERY interesting) gave me an idea for an undergrad thesis.

Thursday, November 9, 2017

The pope just keeps getting better and better

You tell 'em, Your Holiness!

BBC - Pope Francis: mass is for prayers, not mobile phones. Do what he says or go to hell:

Pope Francis has chided the Catholic faithful for using their mobile phones during Mass.

He said it made him sad when many phones were held up, and even priests and bishops were taking photos.

The pontiff is not known to have used a mobile phone in public since his election and once asked young people to carry Bibles instead of phones.

However, he is an avid user of social media and regularly allows himself to be snapped with pilgrims for selfies.

He has millions of followers on Twitter.

OK, that last bit needs some context.

Ellen DeGeneres has 5 times as many followers as the Pope. Which, actually, says something about the world today when a lesbian comedienne can beat the apostolic successor to St. Paul by 5 to 1.

I've got nothing wrong with that personally, I just find it interesting.

Speaking at his weekly audience in St Peter's Square in Rome, Pope Francis said that Mass was a time for prayer and not a show.

"At a certain point the priest leading the ceremony says 'lift up our hearts'. He doesn't say 'lift up our mobile phones to take photographs' - it's a very ugly thing," he said.

"It's so sad when I'm celebrating mass here or inside the basilica and I see lots of phones held up - not just by the faithful, but also by priests and bishops! Please!"

Y'know, Your Holiness, you do have the authority to excommunicate these people for offending God.

Monday, November 6, 2017

Trump indictment news

The Guardian - there's a lot more there. It's getting juicy:

For a moment in court, the mask slipped. Paul Manafort glanced at his lawyer and smirked, like a TV mafia boss with reasons to be confident. It was the look of a man who, after decades of work as a lobbyist for murderous dictators in Africa and Asia, was not about to be rattled by the prospect of house arrest.

But less than a mile away, another man displayed rather less equanimity. Donald Trump woke before dawn on Monday and, instead of heading to the Oval Office, lingered in the White House residence. “Trump clicked on the television and spent the morning playing fuming media critic, legal analyst and crisis communications strategist, according to several people close to him,” the Washington Post reported.

Until that moment, the justice department investigation into his election campaign’s alleged collusion with Russia had seemed somewhat theoretical, dismissable by Trump as a “hoax” and “witch-hunt”. But here was the concrete of the courthouse, the accused escorted in by marshals, standing before a robed judge, swearing on oath and pleading for liberty. Suddenly Trump understood the five-month investigation by special counsel Robert Mueller – probing whether the American president has been compromised by a foreign power – had entered a new and dangerous phase.

“Overall this week what we learned is that Bob Mueller knows a lot more about what happened during the presidential campaign than anyone on the outside thought he did,” said Matthew Miller, a partner at strategic advisory firm Vianovo and former director of public affairs at the justice department. “We have an incomplete picture and we don’t know what the final picture might look like.”

Manafort, who served as Trump’s campaign chairman for five months, and his business associate Rick Gates, who also played a role in the campaign, were indicted on 12 counts including conspiracy against the US, conspiracy to launder money, acting as an unregistered foreign agent, making false statements and failing to report foreign bank and financial accounts.

There was a silver lining for the president: the indictment did not reference the Trump campaign or coordination with Russia. But it did allege a criminal conspiracy was continuing into February this year, after Trump had taken office, and that the pair funneled payments through foreign companies and bank accounts as part of their work for Ukraine’s pro-Russia former president Viktor Yanukovych.

Frank Figliuzzi, former assistant director for counterintelligence at the FBI, told MSNBC: “If you look at this through a counterintelligence lens, you see the fingerprints of the Russian government here … He [Manafort] got a primer on how the Russians can influence a campaign when he represented the Ukrainian candidate [Yanukovych] and he saw what Russia could do to influence a campaign. And he liked it.”

Appearing in a tense courtroom on Monday before a packed public gallery, Manafort and Gates pleaded not guilty and were released on multimillion-dollar bonds but confined to their homes. Lawyers for Manafort – also among the participants of a June 2016 meeting at Trump Tower with a Kremlin-linked lawyer after Donald Trump Jr was promised “dirt” on rival Hillary Clinton – defended him in a court filing on Thursday as a “successful, international political consultant” who was necessarily involved in foreign financial transactions. US district judge Amy Berman Jackson has set a possible date of 7 May for the trial.

And so on, as we know it will.

I'd personally like to see a few dozen Republicunt senators and congressmen rounded up, but I guess we'll have to depend on the Paradise Papers for that....

Saturday, November 4, 2017

Oh, Bitcoin is SUCH a bubble.

This is such a bubble, it's only a matter of when:

Reuters - craptocurrencies' market cap surpasses $200 billion. Note: the mortgage-backed securities whose implosion destroyed the world economy reached a total peak value of $7.3 trillion. So we're only about 3% of the way there.

And the MBSes actually had an underlying value, they were never "worth" $0, it was just the immediate drop in price that was the problem.

And the coming crash in craptocurrencies hopefully won't bankrupt any banks and cause a liquidity crisis; all it'll do is bankrupt a bunch of weekend-anarchist fruits, which is fine because in an ideal world they'd all be broke anyway.

No, you say? No, it's not a bubble? Well, just look at this:

FT Alphaville - how Buttcoin is marketed to the masses. Yup, they send invitations out to stupid people, bring a bunch of said stupid people into a seminar, and pitch them a get-rich-quick scheme:
It was this feeling that Mr Ahonsi and his associates targeted last week. One man, who identified himself as Dev Patel, told the crowd: “You want a bigger house, better car, nice clothes, private school for your kids, exotic holidays, etc. […] It’s that cryptocurrency that’s going to get you the financial freedom.”

He was more explicit later. “If you follow us and you go through what we’re going to say, you will make money and you will get your financial freedom that you’re looking for,” Mr Patel said.

Mr Ahonsi and Mr Patel were speaking at an event run by Pro FX Options, a firm based at the WeWork in Aldgate that trains ordinary people to trade binary options, a controversial form of fixed-odds gambling.

The free seminar on cryptocurrencies lasted around two hours. At the end the attendees were encouraged to sign up for a £420 one-day course where they would be taught how to trade and helped to sign up with Coinbase, which pays Pro FX Options a referral fee.
Multiply 200,000 stupid millionaires by a million dollars each, and you get Bitcon's capitalization.

And let me tell you: here at university I'm surrounded by idiot children of the 905 bourgeoisie, whose mommies and daddies are worth over a million, who spend years at university for a rubber-stamp BA without ever having to read a book or have a coherent thought, who think in a fourth-year seminar class that prefacing their answer with "I think that..." and then going on about their feelings and stupid beliefs counts as academic discussion.

Put succinctly, there are literally millions of stupid millionaires in their 20s and 30s out there today, who need to get fleeced and lose their wealth. I applaud the Russian pedophiles, Moldovan pimps, and American neo-Nazis who will fleece these people out of their mommies' and daddies' cash via craptocurrencies, because at least the money's going to go to people who have a bit of character.

The idiot bourgeoisie has been handed nothing but fucking candy by the kleptocratic elite in government for the past 40 years, their lives have been so fucking easy. And, just like you'd expect, their race has now devolved into semi-intelligent Eloi. They're stupid and slow-moving, and they need to get fucking eaten.

And now any Morlock out there who wants a meal knows where and how to get it.

Let's fleece all the rich fuckers.

Yup, I'm finally on board with this Bitcoin thing. Yay Bitcoin!

Friday, November 3, 2017

Friday videos: I Break Horses

Here's a song that Jason Pierce wishes he had written:

On Boston pulling its 2024 Olympics bid once the figured out what they'd signed on for

This is fucking nuts, but then again, you'd expect it when the Olympics is run by tax-dodging, corrupt thieves.

Tim Taylor - on Boston and the 2024 Olympics. Quote:

On January 8, 2015, the US Olympic committee chose the city of Boston from among four finalists to be the US city that would compete for the right to host the 2024 Summer Olympic games. By July, the USOC had retracted the invitation. What happened? Andrew Zimbalist, who had a ringside seat for the controversy from his position at Smith College as well as a professional interest as a researcher in sports economics, tells the story in "Boston Takes a Pass on the Olympic Torch: Scholarly research does sometimes have a positive effect on public policy," which appears in the Fall 2017 issue of Regulation magazine (pp. 28-33)

Part of the issue was a lack of transparency so complete that it blended into outright disinformation. For example, a group called Boston 2024 had submitted Boston's proposal to the USOC, but the proposal was not publicly released. The mayor of Boston, without a vote of the city council or a public debate, signed a "joinder agreement" that committed the city to accept all terms of the US Olympic Committee and the International Olympic Committee if the city was chosen.

As the details came out, they weren't pretty. As Zimbalist reports:

"One such term [of the joinder agreement] was that the city would provide a financial guarantee to cover any deficits in the event of a cost overrun or revenue shortfall. ... The 2012 Games in London alone had a nearly threefold overrun, with a final cost in excess of $18 billion. Given that background and the fact that the entire Boston city budget was only $2.7 billion, it was not a trivial matter that Walsh had signed this agreement."

Other elements of the plan turned out to include a gag rule: "The City, including its employees, officers, and representatives, shall not make, publish, or communicate to any Person, or communicate in any public forum, any comments or statements (written or oral) that reflect unfavorably upon, denigrate or disparage, or are detrimental to the reputation or stature of, the ICO, the IPC, the USOC, the IOC Bid, the Bid Committee, or the Olympic or Paralympic movement. ..."

Other requirements turned out to involve tax breaks, shutting down the Boston Common, and more[....]

And so on.

Suggestion: maybe we should let the Olympic Games be held by corrupt totalitarian dictatorships from now on. That's essentially what the Olympics organization is, anyway.

Thursday, November 2, 2017

Why did Manafort work for Trump, anyway?

Back to doing lots of work for school. Strangely, this means I mostly post here at night now.

And here's your evening Trump news:

Talking Points Memo - why did Manafort work for Trump? We need to ask, because he's not the type of person to work for free:

It was an extremely bad idea for Paul Manafort to get involved in a presidential campaign on the way to the nomination when he was sitting atop so much dirty laundry.

Unless of course, he had no choice.

This is not simply a nasty comment. Even based on what is publicly known, what was publicly known a year ago, that Manafort has been involved in highly questionable foreign representation for decades and a lot of financial transactions that look like money laundering. As I said last night about President Trump, lots of people slip through for years or decades without getting in trouble for their financial crimes. Some never get caught. Going to the white hot center of the US political process is a really good way to get caught.

Why would Manafort do that?

One plausible explanation is simple hubris. Arrogance makes people stupid. But there are other indications that Manafort needed money, that he was overextended and desperate. But he, quite conspicuously, worked for Trump for free.

That’s odd. Because there’s nothing about Paul Manafort and his forty years in the US political world that suggests he works cheap or for free. But a salary is not the only way or even the primary way someone like Manafort could restore himself financially through getting tight with Donald Trump. The big pay off would be in the influence he would gain and the money he could make off the work – either re-juiced for the US political game or to get the big money in Russia or the Ukraine with his influence batteries recharged. We know about exchanges Manafort had with colleagues speculating about how he could ‘make himself whole’ based on the newfound celebrity, particularly in the former Soviet sphere.

After Manafort sealed his arrangement with Trump, he asked his Ukrainian fixer Konstanin Kilimnik to pass on word to top Russian oligarch Oleg Deripaska that he could provide briefings on the campaign if Deripaska would find that helpful. Manafort and Deripaska had a longstanding business relationship. Manafort also asked Kilimnik “How do we use [this] to get whole?” In other words, can do we use working for Trump to recoup their finances.

And so on....

K-dog says Paul Ryan likes autofellation

The Krugginator - Paul Ryan is choking on his own mystery meat. Bonus points to the Kruggatolah for that reference to sucking one's own dick, though it's not entirely apropos here:

Now, a cynic might have expected Republicans to go for full-on cynicism: “What, you took it seriously when we talked about fiscal responsibility? The joke’s on you! Ha ha ha!” And to a certain extent that is what they’ve done: after all the deficit-hawk posturing, they’re openly admitting that their intention is to increase the deficit by $1.5 trillion.

But they apparently didn’t feel free to cut completely loose: they did set a deficit target, and as I understand the mechanics of reconciliation, the budgets passed by the House and Senate, while they don’t actually set policy, kind of leave them stuck with an upper limit on just how much they can blow up the deficit.

And they have no idea how to get there. Try to cut one set of deductions, and the homebuilders get mad at you. Try to cut another, and upper-middle-class suburbanites in blue states who still vote GOP get mad. And so on.

The point is that these problems were always predictable, which is why the Ryan budgets were always obviously fraudulent. Ryan’s fakery may have fooled his naive constituents — by which I mean practically the whole Beltway pundit class — but never fooled anyone who could do the math.

So will the GOP pass something? Probably — but it’s more likely to be a miniature Christmas tree of handouts to the wealthy than the grand tax reform they’ve been promising.

And let’s hope that whatever happens gets reported as the failure it is. Ryan and company promised big stuff, but never had any way to deliver.

As a side note, I wonder what happened to all the Republicunts who spent eight years screaming about how badly Obama was doing? Because they're awfully silent now that their own clowns are fully and completely in charge.

I mean, they're not fully silent, sure, because they still scream about Killary and open borders and Sharia and terrorism... but they seem to have forgotten that their own party of clowns and thieves is now in charge, and could easily do something about all America's "problems" if they felt like it.

Yup, Papadopoulos wore a wire

The Atlantic - Yup, Papadopoulos wore a wire. Quote:

The inquiry is examining potential collusion between the Trump campaign and the Russian government in what American intelligence agencies have said was an attempt by the Kremlin to sway the 2016 election in Trump’s favor. The special counsel is also reportedly looking into whether the president himself sought to obstruct the investigation.

Although the plea was unsealed Monday, Papadopoulos was arrested at Dulles Airport on July 27. The next day, in the motion to seal the filings associated with his arrest, the office of the special counsel argued that “public disclosure of the defendant’s appearance” would “significantly undermine his ability to serve as a proactive cooperator.”

“I assume that means he wouldn’t be able to wear a wire and trick a target of the investigation into making incriminating statements, because his cooperation would then be known,” said Bruce Green, a former associate counsel in the Iran-Contra affair and a Fordham Law School professor.

That phrase, “proactive cooperator,” is what implies that between the moment of his arrest and the unsealing of his plea agreement, Papadopoulos might have engaged his former colleagues on behalf of federal investigators.

“I take ‘proactive cooperator’ to mean that he’s out on his own gathering information for the investigation that it is interested to have him continue to gather before he is exposed as a cooperator,” said John Q. Barrett, a law professor at St. John’s and a former associate counsel for the government in the Iran-Contra case.

And what does it mean for Trump and the Republican Party's chances of staying out of jail?

“Everyone who had previously dealt with Papadopoulos knew knew there was an investigation; they may have been incautious,” Green said, “but they’d have to have been truly stupid to engage in incriminating conversations with Papadopoulos at this point.”

Truly stupid? Check!

Wednesday, November 1, 2017

Russia uses Interpol to harass critics

QZ - how Russia is using Interpol to harass Bill Browder. Intro goes like this:

Bill Browder used to be Russia’s biggest foreign investor; now he is one of its harshest critics. The Russian government tried three times between 2012 and 2015 to get Interpol, the international policing organization, to issue a global “red notice” for Browder—a request for other countries to arrest him.

All three times, the attempts failed, with Interpol declaring them politically motivated. This year the Kremlin has changed tactic and twice unilaterally issued a different type of notice—a “diffusion,” an arrest request that isn’t public and isn’t vetted by Interpol itself. The latest one was filed last week, on Oct. 17, and within the US immigration bureaucracy it apparently triggered an automatic ban on Browder, who is a UK citizen. It took the US a day (paywall) to realize its mistake and revoke the ban. Interpol took nine days to finally block Russia’s warrant, Browder says.

“It’s outrageous that Russia has repeatedly abused the Interpol diffusion system for political and criminal purposes,” he wrote in an email to Quartz. “The only way to stop their abuse is to take away Russia’s right to unilaterally post diffusions and have any future notices vetted by non-Russians at Interpol headquarters.”

Why not just shut Russia out of Interpol? I mean, sure, then all the world's child molesters, mass murderers, terrorists and mafia would move there... but most of the world's child molesters, mass murderers, terrorists and mafia live there already, right? Why not stick all of them in one country so we know where they all are?

Machine learning sux

Still catching up on the last week's news items....

FT Alphaville - machine learning sux. Quote:

But the failure of all of the algorithms to perform well in 2016 and 2017 highlights the age-old problem with models.

“2016 was a kind of a tricky year,” says Oikonomou, noting that the algorithms “didn’t handle sharp changes in the market”.

“Even this year you could argue that the market is not driven by fundamentals,” he adds, which is maybe not the best environment for a model trained to detect historical patterns in fundamentals.

Or, just maybe, once you put enough algos into the market, all the beta gets arbed.

First iron law of the markets 1, twentysomething quants with grad school training and a working knowledge of Matlab 0.

Tuesday, October 31, 2017

Papadopoulos has worn a wire for the FBI for months

This is just luscious.

BBC - The real Trump indictment story. Quote:

If there's anyone in Trump's campaign circle with something to hide, they should be concerned that Papadopoulos was arrested back on 27 July. He struck a plea agreement with the Mueller team on 5 October.

That was nearly four weeks ago and, according to the court documents, Papadopoulos has been co-operating with government investigators ever since. In fact, Mr Mueller told the relevant court he did not want the arrest made public because it would "significantly undermine his ability to serve as a proactive co-operator".

So who has Papadopoulos spoken to since his arrest? And what sorts of topics could he have discussed?

According to Dan Dale of the Toronto Star, a former prosecutor told him the term "proactive co-operator" can indicate someone who is willing to wear a wire tap.

HotAir Blog goes through an extended what-if scenario that envisions how Papadopoulos could go about surreptitiously gathering incriminating details from members of Trump's campaign inner circle. He could ask for their "advice" on how to disrupt Mr Mueller's investigation after disclosing that he had been arrested.

"Suddenly those people woke up this morning and realised they'd had conversations with Papadopoulos recently about how to throw Mueller off the trail and only now do they realise he's been in cahoots with Mueller for three months," the theory goes. "Hoo boy."

Ha! And now all the Trumptards are triggered!

Three newsblobs


Calculated Risk - are house prices in a bubble? tl;dr: no.

Uneasy Money - more on John Taylor being a twit. He's pretty sure that the Fed chairship instead goes to Powell if Yellen doesn't keep it. This blog seems to have more common sense than the wharrgarblers who are still harping on about Taylor.

The Nation - what killed the Democratic Party? Well, to me, it's probably a mix of bailing out Wall Street instead of Main Street, and spending 2 years pretending to stand up for the people til they lost the 2010 midterms and had no power anymore. Frankly, 2012's Obama victory was just momentum.

Hey, remember eDigital? Yeah, blockchain has become like that.

FT Alphaville - this is the dumbest thing we've ever seen. When's the crash? For those of you who remember eDigital, which is probably only just Pharmasave Dave if he's still around:

On-Line PLC is a little AIM-listed business whose website looks like this:

Its primary asset is a stake in ADVFN, a markets data site that looks like this:
Yesterday, On-Line PLC said it would be adding the word ‘Blockchain’ to its name. And now its shares look like this:

Monday, October 30, 2017

Longer-form reads for those of you as intellectual as me

Here's some longer-form reading to help you get up to my admittedly very advanced level:

Simon Wren-Lewis - why is the government making such a mess of A50? The British really have utterly no bloody clue how to secede from Europe.

Grow The Con - where did all the investment go? Short story is, you don't need it in an oligopolistic plutocracy. Need help getting your head round that? Read some history of medieval economies, or the history of the Antebellum south. I don't see how this should be news... except for an economist.

Stumbling and Mumbling - capitalist triumphalism, a brief history. Here's the intro to get you interested:

Ken Burns’ history of the Vietnam war is getting many plaudits. What’s not been noted about it, though, is that it reminds us of something we’ve forgotten – that the victory of capitalism over communism was not generally regarded as inevitable at the time. The idea that it was owes more to the hindsight bias than to historic fact. Indeed, capitalist triumphalism – of the sort we see from CapX, the IEA and Very Selective Reading of Wealth of Nations Institute – is relatively new.

What I mean is that the American government did not commit mass murder, sacrifice tens of thousands of its own young men, cause vicious domestic social divisions and jeopardise the economy in order to save Vietnam from a flawed economic experiment. It did so because it feared communism would succeed, not that it would fail – that communism could supplant capitalism. Equally, the Macarthyism of the early 50s was aimed not at rooting out cranks but genuine threats to American capitalism.

When Khrushchev spoke of “burying” and “overtaking” western capitalism, nobody laughed. The danger was a serious one. And the launch of Sputnik suggested to the world that Communism could produce technologies that eclipsed capitalist ones. As Francis Spufford showed in Red Plenty (discussed here and here) the Soviets had a genuine optimism that they could beat capitalism – and cold warriors feared they were right.

NDD on treasury market DOOOOOM

New Deal Demoncrat - treasury market DOOOOOM. Quote:

The top chart is the IEIs, which represent the 3-7 section of the treasury curve. The middle chart is the IEFs, which are the 7-10 year section of the curve, while the bottom chart is the TLTs, which represent the 20+ year section of the curve. All three fell through technical support yesterday; all are below their respective 200-day EMAs.

There are two reasons for this. First, the market believes Trump will nominate a more hawkish Fed governor, probably John Taylor. Second, the market is betting the Republicans will pass a large tax cut. Traders believe this will lead to higher growth and more inflation. Therefore, they are selling bonds, which under-perform in a higher growth, higher inflation environment.

Um, #2 only applies to idiot Republican traders who trade based on ignorant beliefs. The tax cut can't lead to higher growth and more inflation, because the Fed's duty is to respond to zero-unemployment growth and higher inflation with higher rates.

#1 is the only explanation.

Or, alternatively, traders have found somewhere else other than bonds to put their money into. Idiot republicans only came out of cash last November, so now they're probably running up the risk chain.

Three from New Deal Demoncrat

New Deal Demoncrat - leading indicators negative for second straight quarter. Quote:
There are two long leading indicators in the GDP report: real private residential investement and corporate profits. Since the latter is not released until the second or third revision, the less leading proxy of proprietors' income serves as a placeholder.

Real private residential investment declined at a -6.0% annual rate, following a revised -7.8% annual rate for Q2 (blue in the graph below). That's even worse when you take into account that the best measure is housing investment as a share of GDP (red). Since housing investment declined and GDP rose, that's an even bigger hit.
Yes, and that's especially bad if the housing cycle is the economic cycle.

Yeah seriously, he's been wharrgarbling about Trump for a while, but now with actual data backing him up he's got my attention.

New Deal Demoncrat - weekly indicators: mortgage rates turn negative. And just imagine how worse it'll be with a new Fed chair hell-bent on raising rates by a couple percent because of all the hyperinflation we've been having.

New Deal Demoncrat - real cost of renting versus home ownership. I guess what the working class is supposed to do is go back to living 6 to a room, like in the age of Dickens.

Sunday, October 29, 2017

Stock valuation: portfolio theory versus discounted PV

Apropos of nothing,

1. Stock (or bond, or land, or anything) market prices don't depend on their discounted net present value of future flows.

Yes, the underlying value of an investment is its discounted NPV of future flows, but "underlying value" doesn't mean much.

Investment prices depend on how much money chases how much paper. That's all.

2. The population is heterogeneous in consumption and saving; the marginal propensity to consume is real. In fact, any "economist" who doesn't admit this is a fraud.

3. The population at the low end of the pay scale (where all money is going into consumption) contribute directly to a business' NPV of future flows.

Thus, when low-pay people are seeing big raises, the underlying value of investments will tend to go up.

4. The population at the high end of the pay scale invests more than it consumes. Thus, when the high-paid population are seeing big raises, they contribute to inflation of investment prices.

5. Thus, any long-trend divergence between underlying investment values and market prices is indicative of more money going to the rich.

6. Equities and bonds are not capital; capital investment is productive investment, while equity and bond investment is just the purchase of money flows.

Yes, when investment in productive capital provides a higher return than investment in (say) zero-real-yield-or-worse bonds, then money should flow into investment in productive capital. Productive capacity will increase, and thus the economy grows in size.

But, money will not flow into generating new productive capital when there's no expectation of consumption growth. (Capital investment behaves according to a risk-averse utility function.) It also won't flow into generating new productive capital when monopolistic/oligopolistic power contributes to a new firm entry cost that's higher than the paltry expected returns in a no-consumption-growth market.

Thus, the only place for money to go is bonds and stocks.


Plutocracy results in a stagnant economy and grossly inflated asset prices.

Inclusive economic equality will result in deflated asset prices and high economic growth.

You can give me my Nobel Prize any time.

Friday, October 27, 2017

Friday videos: Lanterns on the Lake

Turns out the kids of today are still making fabulous music, I just had to hit dislike on 200 videos by skinny-jeans brats to get new recommendations.

Wednesday, October 25, 2017

John Taylor and gold

So if John Taylor really wants to jack up interest rates super high because of his idiotic right-wing pseudo-theory, then if he gets selected as chair of the Fed you should expect the price of gold to superhypercollapse.

Because conservatives know what they want, and deserve to get it good and hard.

Sunday, October 22, 2017

Some Sunday reading

Still recovering from a cold, and I also have a lot of work to do over the next while.

But here's a bit of reading for you:

Jared Bernstein - a must-listen podcast from steel country. You can call all Trump voters racist and sexist, or you can listen to them and see what explanation they have for switching support from Obama in 2012 to Trump in 2016 - which some of them must have done, since Trump carried more states than Obama did, and it's not like retired angry old men have been outbreeding the general population.

FT Alphaville - eight centuries of the risk-free rate. Seems like, secularly, there really is a demographic push downward in rates, modified at times with spikes as the world switches from benchmarking one country to benchmarking another. Then again, that might just be how they set the chart up.

Noah Smith - the Taylor Rule is not what the Fed needs. Especially since Taylor isn't even trying to use his own rule like a grownup - he's just arbitrarily using 50% coefficients. That shows he's not even trying to be methodical or empirical: And if he doesn't know how to do that he has no fucking place on the Fed committee.

Bloomberg - psychopath hedge fund managers make less money than nice guys. Out of curiosity, what does that suggest about newsletter writers who underperform the S&P 500 year after year?

Daily Beast - on women's health, Trump is even dumber than we thought. Yes, apparently he's going to ban all birth control now? Or is he going to leave condoms legal?

Friday, October 20, 2017

Tuesday, October 17, 2017

On gold, world markets, and R2K

Some other reading:

Reformed Borker (Bork Bork Bork!) - it's the global economy, stupid. Read this and you'll want to go long global equities!

All Star Charts - bull flag in small caps. Read this and you'll want to go long IWM!

Jesse's Cafe Americain - gold to da moon Alice! Read this and you'll want to go long gold! Oh but wait:

Jesse's Cafe Americain - one market day later.... Read this and you'll... um... blah blah evil bear raid, blah blah Goldman Sachs, blah blah international Jewry.

Some perspective from Liz Ann Sonders

I'm still sick with a cold, and in addition now have to make up a week's worth of work at school, so thus the lack of posting.

But I just remembered today that I'm still not following Liz Ann Sonders as much as I should, so here's her latest market update:

Liz Ann Sonders - 13 Oct market perspective.

Salient points:
U.S. stock indices have continued to push to record highs, with little apparently able to throw them off course. The grind higher has pushed through natural disasters, the Las Vegas tragedy, domestic political failures, international political tensions, and missile tests and threats from North Korea—an ample “wall of worry” for stocks to climb.


Although there is little of the excess that would suggest recession risk is near, we do see signs that the characteristics of the economy and market may be changing. Bond yields have crept higher, international markets have performed better, and cyclical sectors such as energy and materials have outperformed—all potential signs of the latter stages of a cycle.


Strong surveys indicate improving economy

ISM manuf. vs. ISM non-manuf.

Source: FactSet, Institute for Supply Management. As of Oct. 9, 2017.
Additionally, the U.S. Citigroup Economic Surprise Index has moved back into positive territory, while several measures of capital expenditures have started to move higher. 
Economic surprises are positive

Citi Economic Surprise Index- US
Source: FactSet, Citigroup. As of Oct. 9, 2017.
And capex looks to be improving

nondefense capital goods orders ex-aircraft
Source: FactSet, U.S. Census Bureau. As of Oct. 9, 2017.
Philly Fed Capex Index
Source: Federal Reserve Bank of Philadelphia. As of Oct. 9, 2017.

Read her, she's an example of the exceedingly rare analyst who knows what they're talking about.

Saturday, October 14, 2017

Mr. Robot commentary

And as for this week's episode of Mr. Robot, two observations:

1. It is obvious from Elliot's monologue that Sam Esmail feels personally responsible for the election of Donald Trump. Good, that'll teach him.

2. It is obvious from, hell, like ten whole minutes of this episode that Sam Esmail has been reading the Mr. Robot reddit threads for ideas, came across the "Whiterose is building a time machine!" thread, and has decided to incorporate it into the series. Whether it'll be for real or just a troll is still to be determined.

Friday, October 13, 2017


I did not know this was a thing:

San Diego Union-Tribune - world's first talking sex robot is ready for her close-up. Quotes:
News of creator Matt McMullen’s latest invention — he’s been making lifelike silicone sex dolls for 20 years — has created international media interest and a firestorm of criticism from ethicists and futurists who see a dark side to a sex doll
What, a dark side? To a sex robot?
that becomes more “human” with each technological innovation.
OK yeah, if it becomes more human that's dark. I don't want a humanlike sex robot. I want one that shuts up and makes me a damn sammich.
One critic worries that the doll’s artificial intelligence app could be hacked to make it kill its owner (like the vengeance meted out by sex robots in the film “Ex Machina” and TV show “Westworld”).
We have that now, it's called "wife".
And women’s advocates say owners could realistically rehearse plans for violent sexual acts with the interactive dolls.
And what's wrong with that? If I have violent sex with a pumpkin is it a crime? Then who cares about a robot? And is it okay if I have violent sex with a James McAvoy robot, instead of some poor helpless oppressed woman robot?

The Sun - you aren't committing adultery if you bed a sex robot, says law. Yeah like I even care.

Cosmo - 1 in 4 men would consider sex with a robot. Well, duh. If she doesn't have a 60-inch ass, three chins and four multiracial children by different fathers, then she's a novelty. Amirite?

The Guardian - should we ban sex robots while we have the chance? The leftie fascists have to weigh in with their two cents. I assume "while we have the chance" is a nod to the fact that nobody's going to want to ban them when they all have one.

Daily Mirror - sex robot that lets men simulate rape should be outlawed, says campaigner. Oh, Daily Mirror! Whatever it is, you always find someone campaigning against it! How do you do this?

NY Post - sex bot "heavily soiled by barbarians" at tech fair. But it gets funnier:
The ersatz lover — an interactive silicone doll named Samantha — was the star attraction at the Ars Electronica Festival
heh heh... "arse"...
in the city of Linz, where sex-crazed men mounted her and groped her bulbous breasts.
Yes, in Austria. Though I'm sure they're blaming it all on Turkish immigrants.

Men's Health - this orgasming sex robot blah blah don't care. The bonerkiller:
“We are not perverts, and these dolls are not for perverts,” Squire said on ITV'sThis Morning.
OK, well I am a pervert, so let me know when you decide to make something for me, you pompous little wankstain.

Italian students strike over "work experience"

BBC - Italian students strike over "work experience". Quote:

Italian Education Minister Valeria Fedeli defended the centre-left government's education policy. She said internships gave students "complementary skills that enable them to face the future with more knowledge".


In a statement (in Italian), McDonald's said its outlets across Italy were taking "up to 10,000 students each year", with the aim of helping young people develop skills required in their future employment.

And of course the working for free bit is just icing on the cake, right?

Well, these jobs do "enable them to face the future with more knowledge" - the knowledge that the globalists want to march the working class back into the loving embrace of feudalism, and that at this point the only way to turn this big fucking boat of capitalist kleptocracy around is to gun down all the fuckers responsible.

Friday videos: that crazy Ed Ball again

The strange thing about a song with the lyrics "Ma-n-chester, Manchester Eng-land" is that you don't expect the rest of the lyrics to be all so poetic.

Wednesday, October 11, 2017

Got a cold

I've got a cold, here's some news so get off my dick:

Tim Duy - Trump's going to destroy the Fed. By appointing Kevin Warsh, who has no clue what he's doing. And yes, there are people like this in the field of economics.

The Krugginator - again, Trump's going to destroy the Fed.

IPE Zone - and meanwhile, Houston the abandoned hellscape. Contractors can't find the tradesmen to rebuild the city, because they're in Mexico.

I mean, you could easily take all the middle-aged unemployed white men in the rust belt, train them all to be drywallers and framers, and fix your problem right there.

But corporations don't want to train anyone anymore, they don't want to pay decent wages to skilled trades anymore, and thus the US slides back into feudalism.

Remember, in a feudalist economy, productivity growth is 0, wages are subsistence-level, and nobody in the elite cares because they can still make 5-10% profit per year sitting on their investments.

Wednesday, October 4, 2017

Yellen and Kashkari

Two newsbits:

Jared Bernstein - Trump's best move is to reappoint Yellen. He has a very good point:
There’s an interesting way in which a more hawkish Fed chair–and most of the top candidates other than Yellen fit that bill–would be a double whammy for Trump.

First, raising rates would slow growth, which presidents never like. Second, higher rates strengthen the dollar, making our exports less price competitive, which this particular president really wouldn’t like.
So let's see if President Piddles has the sense to reappoint Yellen.

Neel Kashkari - my take on inflation. I didn't understand the appointment of a lower-level functionary with an MBA, but it turns out that Kashkari has the most sense of the lot - probably because he has no economics background, so he falls back on empirics.

Tuesday, October 3, 2017

Well, you voted Trump....

Vox - Puerto Rico is all our worst fears about Trump becoming real. Quote:

“People on TV news shows spoke significantly fewer sentences about Hurricane Maria than about Hurricanes Harvey and Irma,” he writes, and “the spike in conversation about Puerto Rico right as the hurricane hit was also much smaller than the spike in mentions of Texas and Florida.”

Cable producers surely had their reasons for this. But something anyone in the media could tell you is that cable producers’ news judgment is not an infallible guide to the substantive importance of various stories. In particular, a broad range of issues — potentially including natural disasters in outlying US territories — have an asymmetrical quality to them, where if handled appropriately most people won’t care that much, but if botched it eventually becomes a big deal.

This is why traditionally presidents have relied upon staff and the massive information-gathering capabilities of the American government for information rather than letting television set the agenda. Trump has a different philosophy, however, and spent the post-storm Saturday glued to his television and letting the hosts of Fox & Friends drag him into an ill-advised Twitter spat with NFL stars.

Because Trump wasn’t paying attention, the situation evolved into a catastrophe. And because the situation evolved into a catastrophe, it eventually ended up on television.

The Washington Post reports that by Monday, Trump “was becoming frustrated by the coverage he was seeing on TV.”


A president who was focused on his job could have asked in advance what the plan was for a hurricane strike on Puerto Rico. He would have discovered that since Puerto Rico is part of the United States, FEMA is the default lead agency, but it’s the US military that has the ships and helicopters that would be needed to get supplies into the interior of a wrecked island. And he could have worked something out. Instead, he didn’t get worked up about Puerto Rico until more than a week after the storm hit, when he saw the mayor of San Juan lambasting him on television. He lashed out with his usual playbook — one that will only make things worse.


Retired Gen. John Kelly’s background and experience are unusual for a White House chief of staff, but as it happens, his final military assignment was as commander of American military forces in South America, Central America, and the Caribbean basin — basically perfect preparation for the crisis that happens to have struck.

It’s of course entirely possible that things would be going even worse if Reince Priebus were still in charge, but on its face, Kelly’s experience does not seem to be doing any good. And that should be a stake through the heart of the notion that some stable of “adults in the room” are going to save the country from having made a spectacularly inappropriate choice of chief executive.

The one thing we can say for sure is that it’s essentially inconceivable that the next objectively difficult crisis that Trump fumbles will be more in Kelly’s wheelhouse than a disaster requiring a military response in the Caribbean. We’re witnessing the Trump administration at peak performance, and it’s appalling.

Well, as President Truman once said, "the American people know what they want, and they deserve to get it good and hard".*

*yeah I know it was probably someone more like Mencken

A quick market comment....

US equities:

SPY is RSI=74, +2SD. IWM is >2SD, RSI=85. QQQ, however, is not overbought.


GLD is -2SD, RSI=36. SLV is about -1.8SD, RSI=35. GDX is ~-1.5SD, RSI=42. Gold and the miners are at a thick band of price, so they should have support here. Copper is failing to break down below its SMA(50). GDX is supported at its weekly SMA(50).

Would you go short S&P, long gold miners right here?

Monday, October 2, 2017

Monday news

Seems like the market's climbing a wall of worry again... everyone's doubting it as it continues to scale all-time highs.

In other news, I got 84% on my first Metrics 2 test, which is okay, so I'll be sticking at it.

Here's some high-class reading for those of you who think multisyllabically:

New Deal Demoncrat - weekly indicators. Everything's still hunky-dory.

IPE Zone - can US stocks still rise? Yes, because there's nowhere else for the tens of trillions of world wealth to go.

CFR - the world's China problem. They just can't get it through their fucking heads that China has figured out that macroeconomic orthodoxy is only one possible solution, and that a strong enough state can do what it wants.

Tim Taylor - demography rebalances Asia. I know for a fact that wealthy old people don't spend down their wealth. And as for India, it's a clusterfuck: the only way it grows is by (1) exporting goods via satellite because their transportation network is a disaster, or (2) generating fake numbers for their real estate values. Neither of those is a recipe for success.

WSJ paywall - many students around the world can't read. As it turns out, the growth economist's assertion that "education spending raises human capital" is bullshit. You have to actually have teaching, not just spending.

Thursday, September 28, 2017

Thursday stuff

Well, my first Metrics II test was a lot easier than I thought, so I guess I'll stick with it. At least, I need to see what the marking scheme is like.

Anyway, let's catch up with some news of the past few days:

New Deal Demoncrat - Yellen just confirmed 2% is the new inflation ceiling. So when the Fed causes a Volcker recession in the next year, you'll see a deflationary wage-price spiral. Yay! Buy gold!

WSJ Paywall - global growth picks up, but can it be sustained? Writing it off as "the cellphone effect" is nonsense. Cellphones are just another consumption good. If people are buying them, then they have money to spend. Coulda been mangoes for all we care.

IPE Zone - did Xi and Macron just make US stocks great again? Quote:
From Xi Jinping’s China to Emmanuel Macron’s France, politicians are delivering policies that businesses want. As a result, the world economy is growing faster than at any time since the post-crisis bump of 2010. The yuan and the euro have risen sharply against the dollar. A more competitive greenback and the prospect of strong exports have supported U.S. stock prices. A Chinese communist and a French technocrat have done more for American business than Trump has.
Take that, America!

NY Times - US corporations guilty of collusion, face jail time. Haha no. No, there's no such thing as anti-trust law when it comes to gentlemen's agreements between fast food companies to refuse to hire each others' former workers. Yes, there should be, because this is collusive action that restricts free markets. But economic theory, don't forget, only ever exists to make the rich richer and the poor back into the slaves they were before WWII.

Reuters - Republicans fail again! Because they're morons. Thankfully, they've just saved thousands of lives by being morons.

Noah Smith - handwaving on health care. The thing to understand is that John Cochrane isn't a real economist. Yes, he is a pretend economist, and yes he tore the RBC boys a new one when he proved they didn't know undergrad-level econometrics, but he's also a twit who blathers utter fucking nonsense in an attempt to rent his bunghole out to the Republican Party.

Monday, September 25, 2017


I'm days away from dropping my Metrics 2. I didn't like a tenured professor being replaced at the last minute with a grad student, but decided to give her the benefit of the doubt.

As it turns out, she refuses to admit when she marked me wrong and doesn't know the math. So that's it for benefit of doubt. I'm not sticking in that class if it means I fuck my chances at grad school with a fucking C.

Here's some fucking news:

Klendathu Capitalist - big week for the once mighty dollar. I think he's being a fucking pussy. When was the last time the USD dropped 11% in a year? Did everyone puke dollars then? So why do you think they're going to puke them now?

New Deal Demoncrat - weekly indicators. All good, doesn't matter, it's all about Kim Jong Un and Republicunt health care demolition bills and people wanting to rotate out of tech stocks every month.

Robert Shiller - the coming bear market! Because Shiller doesn't get to clickbait his headline with a question mark. Sorry dickhead, either put your money where your mouth is or shut it the fuck up.

Vox - We asked GOP senators to explain why they're supporting Graham-Cassidy, and all they did was blather incoherent nonsense like little Nazi punks. If you needed any proof that Republicans have no fucking clue what they're voting for and are just in it to take bribes for their votes, this is it.

Sunday, September 24, 2017

For the AfD

In celebration of the probable AfD election victory in Germany this weekend:

And this is the fate that awaits the rest of Europe!:

PS Vladdy Pooty-Poot is still a man-loving pussy bitch.

Saturday, September 23, 2017

This is how to be a bitchy economist

BBC - scientists develop new antibody that attacks 99% of HIV strains. Scientists at Harvard and MIT have helped develop an antibody that basically destroys HIV.

Meanwhile, macroeconomists at Harvard and MIT have written some really crappy books and whored their asses out to the Koch Brothers.

Friday, September 22, 2017

Here's how you do Halloween

BBC - 'decapitated man' halloween display in Tennessee sparks 911 call. With a helpful image of what a 'decapitated man' halloween display looks like:

With a very good-natured response from the police, believe it or not!:
Greene County TN Sheriff's Department wrote on Facebook: "ATTENTION EVERYONE!!! For those of you driving on Chuckey Pike in Greene County: THIS IS A HALLOWEEN DECORATION!

"Do NOT call 911 reporting a dead body. Instead, congratulate the homeowner on a great display."
I guess the homeowner must be white, otherwise the cops would have murdered him and gunned down his family.

Friday evening news

Gotta do a load of econometrics homework this weekend so I don't bomb on the first test.

But first, here's the news!:

Pole Mic Spains - cash is oversold. This guy's even a weirder weirdo than Klendathu Capitalist, but if you're going to get your market opinions from someone it may as well be a weirdo.

PIIE - the Fed buys into secular stagnation. Trust me when I say this is the most important market story right now:
The FOMC's estimate of the so-called neutral federal funds rate had declined from 4¼ percent a few years ago to 3 percent earlier this year and is now only 2¾ percent. With the federal funds rate currently near 1¼ percent, the Fed is almost halfway through its tightening cycle (assuming that the economy does not significantly overheat in the meantime). Moreover, it is possible that the projected neutral rate will decline further, as the FOMC ponders research that suggests the long-run neutral rate might be as low as 2 percent.
Their Fed funds rate has been going up slower than their estimate of the neutral rate has been coming down. So about a year from now, they'll have raised rates up to 2% at the same time as they'll be estimating that the neutral rate has dropped below 2%... which means a Volcker recession in 2020.

Noahpinion - let's whine about the future. I agree entirely:
Our modern society is totally wired and connected, but also totally unequal - "the future is here, it's just not evenly distributed", as Gibson was fond of saying. Hackers, cyberwarfare, and online psyops are a regular part of our political and economic life. Billionaires build spaceships and collaborate with the government to spy on the populace, while working-class people live out of shipping crates and drink poison water. Hobbyists are into body modifications and genetic engineering, while labs are researching artificial body parts and brain-computer interfaces. The jetpack is real, but there's only one of it, and it's owned by a rich guy. Artificial intelligences trade stocks and can beat humans at Go, deaf people can hear, libertarians and criminals funnel billions of dollars around the world with untraceable private crypto-money. A meme virus almost as crazy as the one in Snow Crash swept an insane man to the presidency of the United States, and in Texas you can carry a sword on the street like a street samurai in Neuromancer. There are even artificial pop stars and murderous cyborg super-athletes.

We are, roughly, living in the world the cyberpunks envisioned.
Of course, like any article, it gets better after he says "but...".

Niskanen Center - black liberty matters. A nice big article on how libertarians are actually closet racists, because all they really want is liberty for white people.

Vox - a new study debunks one of the arguments against basic income. One more win for fully automated luxury gay space communism!:

Freitag Deutscherfederalelektionvideo

In honour of the election, let's evilly culturally appropriate the Germans:

Thursday, September 21, 2017

RUSSIA DECLARES WAR!!!! against... wait, who?

BBC News - All of Russia declares war against Morgan Freeman. I enshitten not thee:

Russia has aimed its entire media arsenal at the veteran Hollywood actor Morgan Freeman over his appearance in a video accusing the Kremlin of waging war on America during last year's presidential election.

The video shows the Oscar winner accusing President Vladimir Putin, a known former KGB spy and kleptocrat, of launching cyber attacks and spreading false information in order to avenge the collapse of the Soviet Union.

And of course Mr He-Man Pooty-Poot the Bear Wrestler and Sometimes Bear Lover is incensed by this, kinda like how fellow kleptocrat and banana-republic dictator Rocket Man hates when you make fun of his hair and flabby face.

So He-Man Pooty-Poot the Bear Wrestler and Sometimes Bear Lover will retaliate the only way he knows how: by aiming the entire might of his failed alcoholic empire at Morgan Freeman!

Unfortunately, Pooty-Poot, the Morgan Freeman meme was here first:

Wednesday, September 20, 2017

Yet more various news

Still not actively TAing yet: hopefully they can assign me a room now.

Here's fun news items:

Calculated Risk - architecture billings growth streak continues. So quit selling S&P you fucking pussies!

Tim Duy the Economics Guy - Fed may have too much faith in inflation forecasts. In which case, yet again, the Federal Reserve will cause a recession and kill thousands just so they can provide more money to the rentier class.

Reuters - Buffett calls US pessimists 'out of their minds'. Well, they're not always 'out of their minds'; sometimes they're just Russian-funded neo-Nazi propagandists. Here's Warren himself:
He noted that since Forbes created its first list of the 400 richest Americans in 1982 -- Buffett was worth just $250 million then -- some 1,500 different people have been included.

All with one thing in common.

“You don’t see any short sellers,” he said, referring to people who bet stock prices will fall.
Would you expect Pooty-Poot to be short US and long gold? Of course not, he's got his own billions stashed away in US equities, like every other tinpot dictator.

Tim Taylor - antitrust in the 1520s. Yes, once upon a time Protestantism (and by that we include Luther Himself) was against monopolies. Of course, back then Protestantism was revolutionary; now it's just another opiate propping up the kleptocracy.

Monday, September 18, 2017

NDD on real median income: YABUT

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.

Proving you're stupid

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.

Oh crap look what's up for Wednesday

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 likes Trump now

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?