23 June 2016

The Great British Depression: Come On Down! [update]

It's just past 8 am EDT, and the most thrilling carnival ride in years is about to start.

How much will you bid on a market basket of UK exports? Same as yesterday? 1% more? 50% less? "Should I stay, or should I go??" The last pollster prediction was too close to call. The bookies make it Remain by a neck.
Financial markets are on a knife's edge ahead of Thursday's Brexit referendum, but investors will have to wait longer than usual to get the result of the vote.

Unlike normal general elections there won't be any exit polls at 10 p.m. London time, or 5 p.m. Eastern Time, when the voting stations close, so anyone nervously waiting for the outcome will have to stay awake and watch for local results to trickle out overnight.
-- here

That's too bad!! If the UK polling stations closed at American 8 pm, we'd have Mr. Market all in a tizzy for the last hour. Oh, the joy of it. OTOH, there will be leaks of exit data all day long, so we just might have the start of The Great British Depression today. All those .1%-ers pining for massive deflation will get their wish. They'll be able to buy a new Rolls at half price.
In the absence of exit polls, hedge funds and investment banks have commissioned private surveys to give them a head start on trading, according to U.K. media. That means financial markets could start to react to the referendum before any official results have been announced.

Cute. Even public voting has been privatized.

We see the triumph of nativism over intelligence. What a shock it will be to the Brits when they discover that financial services they've ridden all goes away. The City exploded when the UK went EU, not the other way round. They've bitten off their nose to spite their face. See, fiduciary capital is naturally stateless, and there's nothing of substance holding it in the City. You just need computers, servers, desks, and office space to hold same. With cloud-y computing all the rage, the City work will pop up in Paris and Berlin and Rome and such, since the servers need not be co-located, anyway.

Hopefully, the ramifications will become clear before the USofA gets to choose between nativism and intelligence.

We must all hang together, or assuredly we shall all hang separately.
-- Ben Franklin

16 June 2016

Money For Nothing, part the second

One of the adopted themes of these endeavors is that predicting tomorrow based on the last X years/months/weeks/days requires that the context of today and tomorrow is quite the same as the previous Xs. Gordon's book is a very (overly?) long account of how tech as been fleshed out during the last century or so. Key to understanding the history is that innovations such as the steamboat had much bigger impact on progress than has/will Twitter.

Moreover, one need keep in mind that both the DotBomb of 2000 and the Great Recession of 2008 were powered by the same context: a global over-supply of savings. Some (much?) of tha glut of moolah is unused corporate profit, which is in the trillions of dollars. That segment of the glut exists just because the CEO class no longer knows how to deploy fiduciary capital into innovative physical capital. Both the DotBomb and the Great Recession were bubbles generated by all that idle moolah demanding high returns and little risk. In the former case, the likes of pets.com were viewed as can't miss sure things. In the latter case, holders of idle moolah decided they'd learned the hard lesson of chasing high return at low risk in the dot.com world, so it all flooded into moderate return at low risk: the American house.

So, we got "Viagra at The Home". The common knowledge was that house mortgages were a safe instrument; historically, default rates were teeny. The mortgage industry obliged the demand for securities by creating ever more mortgages, which required making said mortgages to folks who'd not previously qualified. Rising house prices, per fixed definition of "house", can only happen if mortgagees (Joe Sixpacks) have rising incomes, or drastically reduced other spending. Neither accounted for the experienced house price inflation. Once that inflation just slowed (it didn't have to stop, much less reverse), escaping mortgages became impossible. Crash.

Coupled with this demand for high return at low risk is the scenario that the .1% will engineer a crash just so they can "earn" their 10% return in the form of deflation. Brexit may well do that. Turns out that not only the .1% but also the millennials think that 10% is their God given right. Gad.
Research from U.K.-based asset management firm Schroders shows that millennials (those ages 18 to 35) expect annual investment returns of 10.2 percent. That's higher than the historical averages of 9 percent to 10 percent. More important, it represents a much bigger bang for their investment buck than they're likely to get given today's historically low interest rates around the world amid slow global growth.

This week, Treasuries have traded at 1.56%. Given the Giant Pool of Money (some may be from the ECB and BoJ) chasing high returns at low risk, that ain't gonna happen. Ironically (or perversely, depending), insurance companies and brokerages have been pumping "you should save more, with us of course") adverts on the TeeVee. Yet mo money chasing little demand for it. Perversely (that again), economic growth is driven by growing aggregate demand. Depending on how that demand is distributed, an economy gets more or less growth. But if most folks stop consuming and start "saving", they get recession (or, heavens, depression) and yet less return on their "saving". Welcome to the world of zero sum.

10 June 2016

Lord of The Flies, part the second

These endeavors have discussed the "Lord of the Flies" attributes of my beautiful Bermuda, not that I could afford to live there or work in the predatory financial services companies that own the island. Turns out, I'm not the only one to have figured out that islands, especially the lone, isolated types are microcosms of a dystopian future. The future need not be so, but we can only avoid it if we, as a global tribe, take concerted action to prevent the .1% from taking everything of value that isn't nailed down. Take my wife! Please!
Of all Mr. Thiel's social-engineering enthusiasms, one I would have most loved to see play out is Seasteading, an initiative to create libertarian utopias on artificial islands in the middle of oceans. In 2008 Mr. Thiel and the activist Patri Friedman founded the Seasteading Institute, with the goal of building these communities. Seasteading, Mr. Thiel wrote, could "create a new space for freedom" where entrepreneurial leaders, working beyond the reach of governments and their pesky laws, could take society forward.

Recently Mr. Thiel suggested that he'd gone cold on Seasteading, because of cost and practicality. Unmentioned was the possibility that the experiment would have come to an ideologically inconvenient conclusion: that a small island -- whether created by nature or man -- would be an astonishingly bad place to live without rules. [no shit, Sherlock; and my emphasis, natch]

The wonderful aspect of the article is, of course, that the author agrees with me on the salient point: all this talk of innovation being antagonistic to conventional academics is based on a warped notion of innovation. Most of this innovation of the last couple of decades is a continuing replay of infotainment software, Just today, we get more such data.
A majority -- 55 percent -- of employers considered smartphones to be the biggest killers of workplace productivity. That's hardly surprising given that more than eight in 10 workers (83 percent) own the devices and 82 percent keep them within eye contact while at work.

It all started with the GUI wordprocessor (I'm snarking at you Word), which enticed folks into spending their time worrying about the sizzle rather than the steak.

So, back to the Thiel takedown:
We don't have enough of the desperately needed inventions -- nuclear fusion energy or cancer cures -- that emerge when credentialed scientists tinker away for years on expensive machines that have nothing to do with Snapchat. Of course, this sort of tinkering most often happens in the academic institutions that Mr. Thiel reviles, despite their role in the foundational breakthroughs -- such as the internet -- that enabled Mr. Thiel to build his $2.7 billion fortune.

Alas, you can't really eat the sizzle.

07 June 2016

The Good. The Super. The Supreme. part the eighth

It's good to be alive.
It's Super Tuesday.
It's impossible for the Rabid Right to get it's way with the Supreme court.

Regular reader may recall the proposition that motive and incentive always trump (hehe) data when they are in conflict. With the passing of Scalia, the RR immediately looked at the data, their control of the House and Senate, and pronounced that there would be no Obama replacement. They intended to get a Super Scalia, i.e. more rabidly right, next year.

My, how bad was that assessment? Earlier today I saw a headline that Obama is to meet today with Republicans to discuss appointment. At the time of the passing, I allowed (although not until now in print) McConnell was out of his mind.

Here's the situation. If the RR double down on the election, what's the likely outcome? We won't know until tomorrow morning, but the candidate will be either Trump, Rubio, or Cruz. None can win the election, whether against Sanders or Clinton. A bold statement, but Trump is a wacko billionaire, and the other two are paid for by wacko billionaires. Not only is the RR certain to not win the White House, if it pushes its KKK agenda, it will lose both House and Senate; the latter with greater certainty.

So, McConnell et al face a simple wager: get a "moderate", less than Super Scalia, now or risk another Ginsberg in a year. Such a deal?

[part 2, 3 March]
As any Ph.D. quant or desperate stockmarket plunger knows, odds on an outcome change as the event's time approaches. In the case of sports events, the bookies adjust odds to keep the amount of moolah going to each outcome about equal. The same might be said of political events. If events proceed as at present, Trump becomes more unstoppable toward the nomination. As that happens, the RR has to gauge whether they can get a Trump White House, and if so whether he'd nominate a Super Scalia. Both are highly unlikely.

Here's a bit of Kristof
Me: He has a reputation as a straight shooter, but he lies. When PolitiFact was choosing its "lie of the year," it found that all its real contenders were Trump statements -- so it collectively awarded his many campaign misstatements the "lie of the year" award. And in backing him, you're pretty much guaranteeing a Hillary Clinton presidency. Indeed, because of Trump, the betting markets are now predicting a Democratic Senate as well.

Voter: Come on! Trump proved all of you pundits wrong again and again, and he'll do so again. And even those betting markets you like to cite -- they show Trump with at least a one-in-four chance of being our next president, and that's while other Republicans are trying to rip him apart. Just wait until the party rallies around Trump.
[my emphasis]

And, as expected, Obama is floating a "moderate". Take a small chance now, or a bigger one later. Brinksmanship in action.
Naming her would escalate political pressure on Republican Chuck Grassley of Iowa, the chairman of the Senate Judiciary Committee, who spoke fondly of Kelly in 2013 before the Senate voted 96-0 to confirm her for the Court of Appeals.

Not game, set, match. Too soon, but it's political waterboarding at its best.

[part 3, 17 March]
Thanks to a raging flu, I've been bedridden, so this is a couple of days late in typing.

So, in sum, Obama has taken the predicted tack: here's an old guy, with a mixed/neutral record. If you don't take it, here's your options.
1) Trump wins, and may be you a Super Scalia. But you're just as likely to get a Sherman or Taft, if Trump is pushed to make good on his anti-hedgies rhetoric.
2) Trump gets trounced by Hillary. The most likely outcome. She'll nominate a 40-something anti-Scalia, and won't back down. Constitutional crisis, or as the Rabid Right likes to say, "elections have consequences". Moreover, Trump could (still too dim) take down the Senate. Which is the main reason the RR is so intent on getting rid of him. Cruz is no better, just sneakier.

[part 4, 22 March]
Thanks to some reporting from the NYT, we now know that Roberts, not the most truthful of appointees during confirmation called for a dialing down of partisanship.
Last month, Chief Justice John G. Roberts Jr. delivered some blunt remarks about the Supreme Court confirmation process. The Senate should ensure that nominees are qualified, he said, and leave politics out of it.

Still, only the fourth inning.

[part 5, 25 March]
Well, more pressure. Chinese water torture, sort of. Or, waterboarding, if you're of The Donald tribe.
the polls building pressure.
Senate Republican leaders have said they will not hold hearings on any Supreme Court justice nominated by President Obama because they want to wait until the next president is in office. Seventy-three percent of Americans think this is being done for political reasons, while just a quarter say it is because that's what Republican Senate leaders think is best for the country.

And the Blue State Republicans are getting squeezed.
A week ago, [Sen. Mark Kirk of Illinois], who faces a tough reelection fight, became the first Republican senator to break with the rest of his conference to call for an up-or-down vote on Garland, according to reports. Kirk told a Chicago radio station that his colleagues should "just man up and cast a vote."

One out, bottom of the fourth.

[part 6, 22 April]
In the news, GOP pulling the plug on state elections. Kind of a surprise, at least to me. The Rabid Right has taken over much of governance by the simple expedient of taking over state government. Why stop now?

The lede:
The Republican National Committee is scaling back its financial commitments to some of the most hotly contested states because of flagging fund-raising, the most concrete evidence yet of how the party's divisive and protracted presidential race is threatening the party's entire ticket in November.

Here's the pressure point: they're getting ever more worried that Trump will not only lose, but take the Senate, and worse the House, with him.
This sort of unease about Mr. Trump, along with the dislike many of the party's business-oriented donors have for the hard-line Mr. Cruz, has prompted the R.N.C. to begin privately assuring donors that it will create a so-called Senate Trust fund. Money earmarked for that fund will go entirely to initiatives aimed at retaining the Senate -- including hiring field operatives and opposition researchers and bolstering digital efforts.

If events keep following this story, Republicans will have to admit that Garland is the best they're going to get.

Drip, drip, drip.

[part 7, 11 May 2016]
(One might be tempted to name this piece, "7 Days in May", but I'll pass on that.)
New polling out:
A plurality of swing-state voters approve of Judge Merrick Garland, President Obama's nominee to the Supreme Court, according to a new Quinnipiac University poll conducted in Florida, Ohio, and Pennsylvania. The survey, released Wednesday, found that a majority of voters in those states would like the Senate to at least consider Garland's nomination.

The Donald, more than Hillary, needs the swing states, since he's carrying the baggage of the extreme Right Wing. It gets funnier by the day.
The question of Garland's nomination has already seeped into at least one swing state Senate race. Sitting Pennsylvania Sen. Pat Toomey, a Republican who is running for re-election, has said he would like to wait for the next president to pick the next Supreme Court justice -- a decision that has 30 percent of voters saying they would be less likely to vote for him in November.

And it will get worse for Pat and his brethren. It's only May.

Addendum (not worth making a new update):

Check the Iowa bet on Congress, bottom of the page. Yikes!!

[part 8, 6 June]
I've never heard of Earle I. Mack, but he paid $104,000 for page A5 of the NYT. He's posted the page here.

drip, drip, drip.

20 May 2016

Something Smells

And it ain't in Denmark. (Pepe Le) Pew Research recently published a report claiming that the middle class was being hollowed out by migrations not only down but up as well. I just don't recall such an assertion before. Every news organ on the planet, especially the Right Wing cabal, has written it up. Here's the Times take on it. With nice R graphs.
The study defined middle-class households as those making between two-thirds and twice the national median income. That was roughly $42,000 to $125,000 a year for a family of three in 2014, though adjustments were also made for the cost of living in different areas.

I can't imagine a more biased definition of "middle class" than that. Fact is, $125,000 puts a household firmly in the top 20%. That's hardly middle class. Using the Wiki/Census, I'd say median income ±half median income. Median is $57,000, so the range for middle class is $28,500 to $85,500, which puts the top of the middle class in the 69th percentile or upper 30%. That makes a good deal more sense.

In any case, the notion of middle class was originally based on population distribution of income, not income percentiles alone. The phat middle was the point, and was what drove growth. As income/wealth has increased its skew, growth has waned. It's not a coincidence, but even Bernie (that I've read, anyway) ignores the historical record.

Here's a particularly helpful post. Note the median and average incomes shown in the bottom right of the graph, as it changes. This is the cumulative income distribution, so you don't see the skew of the frequency distribution graph, but when the average/mean is above the median, that's the definition of right skew (aka, income inequality).

And, it turns out, The Donald has changed his tune (now that he's got the nomination sewn up) on taxes: bunches for his 1% class, of course.

17 May 2016

A Man's Home

is his "Castle". One of the few scripted TeeVee shows I watched with regularity. "Elementary" is better, and hopefully won't devolve as quickly as "Castle". We'll see.

Suffice to say, the final episode of "Castle" was a Frankenstein monster. Wondering whether I was alone in finding the whole renewal/Katic/"Castle, P.I."/alternate ending mashup utterly lame, I went surfing. Turned out, I wasn't alone.
3) Beckett was an autonomous character. Yes, Castle had the mother and kid and the show had his name, but Beckett was a character. She wasn't just there to enable Castle's creative fiction. She wasn't just there to be an inspiration for a male writer. She's not an embodiment of male fantasy. That's what the ending makes her into. It completely sells out her personhood in much the same way a certain Fox series dispatched with its female lead earlier this spring by making her into an instrument of male deliverance and undoing everything about her as a character. The conclusion of these eight years of TV should not have been, "Oh, that Beckett. She totally inspired Richard Castle."
-- Daniel Fienberg/Hollywood Reporter

Yeah. Moreover, the producers didn't really do an "alternative ending", of course, merely grafted on an extra arm and leg to a body run by an Abby Normal brain. When the Katic firing was revealed, yet with renewal still unstated, I concluded that ABC/Castle's producers were buffoons. Cut costs by firing one of two co-leads? Not only that, but Beckett was the course through which 99.44% of the stories flowed. (Which, not incidentally, would be good reason for the actor playing the titular character to grow a tad fractious with his co-lead. Just sayin. Wouldn't you?) Castle, the man, would do a De Niro and jump into bed with Hayley and consult with Ryan and Espo now that beloved Kate was hors de combat? Is there any credible segue? Nope.

So, it is clear that the ABC/producers had no idea about an alternative. "Bring me the head of Kate Beckett!!" must happen. Or both. The cliffhanger had already been shot, evidently. Shooting a new ending really means writing a different, completely, ending, then filming it. A Jack-in-the-box Caleb was tawdry anyway, so I suppose that, being cheap and lazy, they merely tacked on the most saccharine ploy from a Creative Writing 101 class does track. Which is to say, a classless ending.

16 May 2016

You Can't Make This Stuff Up

from briefing.com
8:32 am Kindred Biosciences announces positive results from pivotal study of KIND-010 for the management of weight loss in cats (KIN) :

Co announced positive topline results from its pivotal field study of KIND-010, mirtazapine transdermal gel, for the management of weight loss in cats. This study, KB105, was a multicenter, randomized, double-blind, placebo-controlled pivotal field study that enrolled 231 cats to assess the effectiveness of KIND-010 in stimulating weight gain in cats. The primary endpoint was percentage change in body weight from Day 1 to Week 2. At Week 2, the mean percent increase in body weight from Day 1 was 4.07% in the KIND-010 group (n=90), versus 0.29% in the placebo group (n=97) (p<0.0001). Based on a preliminary review of the safety data, the drug appears to be well tolerated. The Company plans to file the Effectiveness Technical Section with the data from the KB105 pivotal field study with the Food and Drug Administration in the third quarter of 2016.

I suppose we'll see face lifts for Fido in the nonce.