Wednesday, May 17, 2017

Wednesday noos


I guess people are selling S&P 500 today because they think Trump is about to be impeached? Is that it?

Anyway, here's some great reading for you:

New Deal Demoncrat - is the rental affordability crisis abating? If rents have quit increasing in the US, that'll mean more money in the pockets of the poor, which is how you build a sustainable economy. But I'm sure Trump will fuck that up somehow.

FT Alphaville - healthy pickup in capex predicted, again. Last time it was predicted, it didn't happen. Will this time be different? Not if you read some of the economic theory stuff I've been reading: the reason we're in capex stagnation is because more and more corporate earnings are being captured as rents by the power elite - the same reason government bond yields are at silly lows, btw.

Macro Tourist - the $VIX article no-one will like. Quote:

The narrative overwhelmingly embraced by most of the street is that there is a monster VIX short position out there, and that this volatility selling is a disaster in waiting. This camp has some impressive alumni. For the past year, the smart as a tack Jesse Felder, has been writing pieces about this risk. If you want to understand his point of view, check out the article from last summer - “The Short Vol Trade has gotten completely out of hand”. I love Jesse’s writing, and taking the other side of his trade gives me pause, but I respectfully suggest he might be wrong on this one.

He takes the "every seller is matched with a buyer" assumption and runs with it, arguing that there's a monster $VIX long position out there. The kill-shot comes when he notes it's actually the Vix long ETF that has built the monster position: apparently XIV's shares outstanding has been collapsing! That's convincing enough for me.

AEON - human capital theory was a cold war propaganda campaign. Really interesting long essay about how the Ayn Rand club invented the term "human capital" as a counterweight to Soviet communism. I'm skeptical of the whole Mont Pelerin Society conspiracy theory, but I also know that people like Milton Friedman were propagandists and not economists. In fact, if you decide to model human capital, you'll find that a monopsonist employer will use their market power to underpay for it - in which case worker exploitation simply becomes more obvious.

BBC - Avril Lavigne is dead again. The old "Avril Lavigne died in 2003 and was replaced by an exact replica" story has returned. Oh, and entirely parenthetically, her new album comes out this year.



Tuesday, May 16, 2017

China hit by Wannacry, tech writers show they don't understand tech


Engadget - China hit hard by Wannacry because they use pirated software.

Yes, it was true as of Saturday that Wannacry spread so aggressively through China, India and Russia because those three countries are third-world shitholes where the entire nation runs off of one pirated copy of XP.

But then the killswitch got tripped. The worm stops spreading entirely if it connects to the killswitch website.

The reason the virus has continued to spread through China after Saturday was because their nation firewalls the killswitch website.


Monday, May 15, 2017

Microsoft has a point


The Register - Microsoft tells governments to quit hoarding exploits. Quote:

In the midst of the ongoing WannaCrypt attacks, Microsoft has issued an unusually strongly-worded warning to governments around the world to quit hoarding vulnerabilities.

The bug exploited by the attack was hoarded by the United States national security agency (NSA), leaked earlier this year and since patched by Microsoft – but patches aren't perfect, rollouts take time and WannaCrypt locked up a lot of machines in its first wave.

Microsoft is not pleased, and in this post, renews its call for a “Digital Geneva Convention”, and its long-standing demand that governments disclose vulnerabilities to vendors instead of stockpiling them.

“An equivalent scenario with conventional weapons would be the U.S. military having some of its Tomahawk missiles stolen,” writes Brad Smith, Redmond president and legal boss.

Noting the “unintended but disconcerting” link between nation-state activity and criminal activity, Smith adds that governments need “to consider the damage to civilians that comes from hoarding these vulnerabilities and the use of these exploits”. The “Digital Geneva Convention” Redmond recommends would therefore require governments “to report vulnerabilities to vendors, rather than stockpile, sell, or exploit them”.

With the caveat that these exploits are generally the result of poor programming, partially because Bill Gates would rather farm the work out to idiots in Bangalore instead of paying his domestic coders a decent wage, and the "Digital Geneva Convention" was probably written to benefit Microsoft and not the civilized world, I otherwise agree.

Exploits are potential weapons of mass destruction, very much like Tomahawk missiles. When a hack gets out into the wild, it can at least cause millions of dollars of damage, and at most bring down worldwide communications and commerce: we've seen that happen in the past.

We're okay with the military having weapons of mass destruction, because we expect them to have the tools to effectively attack national enemies. But we also expect the military to damn well keep them under lock and key, and not just let some contractor walk out the door with them to sell them on the black market.

We do this with plutonium, sarin and anthrax, so let's also do this with hack tools.

Oh, as an aside: when we find out some Russian is making sarin in his kitchen, we kill him and then lock up everyone he's ever met. We also don't let him sell it on the darknet and take payment in Bitcoin.

I think governments will take this seriously, and I still think Bitcoin's days are numbered.