The Socialism of Poverty - part the second

If there be any left who doubt that the Empty State folks, who complain that they've been left behind by the rest of us, have made their own ingrate bed, well Eduardo Porter has gathered up much investigation by academics, researchers, and bureaucrats (who provide the socialism to the ingrates). You should read it.

For starters, this is the title in my dead trees version I read this morning: "The Government Check Disconnect". Not too pointed, I think you'd agree. Here, on the other hand, is the title as I just pulled up for the innterTubes version: "Where Government Is a Dirty Word, but Its Checks Pay the Bills". Now, that's a title I can applaud. Ingrates in other words. Note that it is customary in the news biz for byline folk not to write the headline; editorial normally does that. The subject of the article: Kentucky.

"The SNAP card works every month; the kids eat two meals a day, but people don't think about where the food comes from and go vote for Republicans," said Larry King, a Kentucky farmer who is chairman of the Democratic Party in McCreary County, whose residents get 55 percent of their income from federal transfers.

As said here more times than not, they've continued to elect Right Wingnut politicians who revel in grinding them under the boot. But these knuckleheads blame DC Democrats, who've been the only ones attempting to bring them out of their self-inflicted Dark Age. Can't let them wimins and faggots tell them what to do!!! No sirreee!!

Harlan has few answers to its economic tribulations: few roads linking it to the world's markets, few good broadband links, few college graduates, few investors willing to risk their money there. "Most of the kids from here who have a chance to go to university never come back," said Colby Kirk, executive director at One Harlan County, a nonprofit economic development group serving the area.

As stated more than once: you're not going to turn a 55 year old unemployed, uneducated, miner/factory worker/whatever into a 56 year old financial analyst. Either support them directly and humanely, or let them die out naturally. The Right Wingnuts have been on a tirade toward the latter. The rest of us seek some sort of former. I don't have the answer, yet. But knuckleheads have to admit the base truth: they've been electing their overseers for generations, and have to stop doing that. If they don't, nothing will change.

Here is the end of the article, and where Porter manages to go off the rails:

As small towns lag behind prosperous urban centers along the coasts, as rural communities shed businesses and jobs, and as their residents turn to welfare as a last line of sustenance, the more they will resent Washington's inability, or unwillingness, to stem the decline.
[my emphasis]

It's absolutely not Washington to blame. Washington didn't make natural gas cleaner and cheaper than coal. Washington didn't tell Kentucky, or any state, to denigrate education. Most of the difference between coastal, urban development and the dearth of same in the Empty States is that the coastal states' citizens chose to invest in their kids and society. There's a reason that the best schools, public and private, exist in coastal cities. We decided, generations ago, that it mattered. It was, and remains, true that the progressive coastal states have been sending moolah by the boxcar load to the Empty States, by way of Washington. Don't now blame us because the Empty State folks, over those self same generations, didn't give a damn.

My Name is Bond, Junk Bond

We don't need no stinkin data!! That, in a nutshell, is The Manchurian President's view of how the Fed should do its work. Any number of pundits have been taking a swing at such nonsense (although, it has to be admitted that these missives have made the case that Policy isn't driven by data). The one I saw today is from the estimable Neil Irwin. Yes, this could be titled as the next installment in the "I Still Hate Neil Irwin" saga. But, given the nature of his text, it was too much to ignore.

But the most memorable part of the president's tweet — and one that actually is a pretty good guideline for all central bankers — was, "Feel the market, don't just go by meaningless numbers."

What Irwin, and the rest of the pundits, still ignore is that long term interest rate is determined by the worth of physical capital. The CxO class still won't or can't find new and better ways to invest in plant and equipment. So, the opportunity cost to the CxO class, and 1% individuals, (Treasuries) remains in the toilet just because that's where much of that moolah goes. As demand increases, price increases, and interest rate falls. That's Econ 101.

Well, stock buybacks, too.

Florida GOP Senator Marco Rubio said on Twitter last week that the tax code shouldn't encourage buybacks.

"When [a] corporation uses profits for stock buy back it's deciding that returning capital to shareholders is better for business than investing in their products or workers," Rubio said. "No surprise we have work life that is unstable & low paying."

Little Marco!!! How un-Republican of you.

The Asymptote of Progress - part the eleventh

Here's a really funny piece of the roll-out of 5G, at AT&T (note to some: this ain't the company that ran Bell Labs and such). Much of the fun is found in the comments.

One such comment implies that 5G is more or less antique microwave transmission. Well, turns out, could be.

Let's consider 5G access systems at microwave and millimeter wave frequencies. One of the major hurdles in implementing radio access at microwave frequency is overcoming the unfavorable propagation characteristics. Radio propagation at these frequencies is highly affected by atmospheric attenuation, rain, blockage (buildings, people, foliage), and reflections. Microwave point-to-point links have been deployed for many years but these are generally line of sight systems.

Will 5G actually work, at a price and service level that's better than LTE? Doesn't sound like it so far.

The Socialism of Poverty

It gets clearer and clearer that the NYT folks are reading these missives. Not that they'll admit it, naturally. A frequent theme over the last year or so is that the Red State vs. Blue State meme is bogus; and always has been. The political, social, and economic divide is betwixt shitkickers and city dwellers. The divide goes back to the beginning of the Country. Just look at the abominations in the original Constitution and the Bill of Rights; accommodation of Southern (rural) demands. The following stories from the last few days add more testimony from 'experts'. What none of the experts and reporters have the balls to say is that the shitkickers are poor, uneducated, sick, and hopeless because they've always elected fascist politicians to run their local and state governments. Yet, it's also a fact that Washington, particularly under Democratic administrations, has been shifting moolah from Blue States to Red States since at least FDR. The damn Farm Bill alone runs to $20,000,000,000 each and every year. It's proper to yell at them, "you've made your bed now sleep in it. Get out of my face!!" If only we could get rid of the Electoral College which cemented the shitkicker bias in the presidency.

So, let's look at the articles.

First, "Chase for Talent Pushes Tech Giants Far Beyond West Coast". Here's the money quote

Driven by a limited pool of skilled workers and the ballooning cost of living in their home bases of Silicon Valley and Seattle, as well as President Trump's shifting immigration policies, the companies are aggressively taking their talent hunt across the United States and elsewhere. And they are coalescing particularly around a handful of urban areas that are already winners in the new knowledge-based economy, including New York City, Washington, Boston and Austin, Tex.

Austin, it need be noted, is about as Blue as can be (Austin is in Travis County; can't find just Austin numbers, but here's a zoomable precinct map without clear city boundaries you can play with.)

Second, an earlier piece

Tech companies feed on highly educated and specialized workers, specifically dense clusters of them where workers and companies interacting with one another are more likely to produce new ideas. Washington and New York, as it turns out, are two of the most highly educated regions in the country, with already large pools of tech workers.

Third, a rural saga "For Manufacturers, a Complex Mix Can Determine Location"

But the rural labor force is not necessarily less expensive.

Bob Hess, a vice chairman of Newmark Knight Frank, the global real estate company, explained that labor costs were no longer significantly lower in rural parts of the country.

Fourth, another Eduardo Porter piece, "The Hard Truths of Trying to 'Save' the Rural Economy". A few quotes get Mr. Porter.

One thing seems clear to me: nobody — not experts or policymakers or people in these communities — seems to know quite how to pick rural America up.

Well, may be. Or may be not. Just a few graphs later he says,

In a report published in November, Mark Muro, William Galston and Clara Hendrickson of the Brookings Institution laid out a portfolio of ideas to rescue the substantial swath of the country that they identify as "left behind." They identify critical shortages bedeviling declining communities: workers with digital skills, broadband connections, capital. And they have plans to address them: I.T. training and education initiatives, regulatory changes to boost lending to small businesses, incentives to invest in broadband.
[that snippet is somewhat different from the text in my dead trees version. hmmm?]

One need only note that Right Wingnut Red States (mostly) have passed laws prohibiting communities from establishing "socialist" innterTubes services.

Naturally, capitalization of agriculture is what caused the rural flight of the no longer employed farm hands to Northern factories. These days,

There are, to be sure, some rural communities with productivity as high as some big cities. But they rely on heavily mechanized and automated industries that support few jobs: oil extraction or large-scale agriculture, in which tractors talk to satellites and no drivers are involved. The livestock business on the vast pastures of Sioux County, Neb., for example, supports an economy worth $306,000 per worker, according to data from Mr. Muro and Jacob Whiton of Brookings. But only 1,200 people live there.

So, we, this country, have two choices: either let the shitkickers die off in their bitterness and stupidity at what they did to themselves, or implement a program even more generous than what FDR did for them in the 30s or more than the current flood of money from the Blue States. All for a bunch of uneducated ingrates. What a country!

The Socialism of Power

Sunday '60 Minutes' ran a segment about Musk/Tesla.

During the piece, Musk says that it would be OK with him if others used the Tesla patents (which are open source) to make an even better electrical vehicle. His reason: electric vehicles are better for the planet. Now, that's a testable assertion, and it ain't necessarily so. Here's a table of CO₂ by type of power generation. Of most note is the difference between coal with and without scrubber. Compare to:

Every gallon of gasoline burned creates about 8,887 grams of CO2.

So, when electricity comes from wind, hydro, nucular, solar, and my fave, tidal (but, of course, being a New Englander within spitting distance of the Bay of Fundy, one might expect that), then electric transport is better for the planet. Otherwise, may be not so much.

In sum, whether electric vehicles are cleaner, in a birth to grave sense, isn't a slam dunk question. Back before there was an EPA, I was in a class where the notion of air pollution vis-a-vis how to power cars came up. The instructor asks, "what matters?". Your humble servant offered that electric vehicles may be cleaner in use, but the total emissions attributed to such vehicles must include emissions from power plants that provide the leetle electrons to charge the batteries. I got an "atta boy" from the instructor. I always have taken a macro-view of most questions, since winners shouldn't be allowed to foist costs on losers. How often do you hear Musk, et al, delve into that question? It's not in his interest. If you look up the Great Smog of London, you'll see that clean air is mostly a local problem. California did much the same for much the same reason. The Manchurian President braying that China and Russia won't do anything doesn't matter so much.

From the macro-view, electric cars have been around since the late 19th century. Also, about the time that gasoline cars began to push the electric ones aside, electric intra- and inter-city transport on rails grew. Some systems were governmental, most private (at least at the beginning). By the 1950s most had disappeared. Did GM do it? I buy it, but not all do. The fact remains that the energy density of gasoline is far beyond what the best batteries can manage.

gasoline 34.2
Lithium 4.32

Beyond just density is the 'refill' problem. One can drive up to a gas station and fill the tank in a few minutes. Recharging a Tesla:

Five hours is good for overnight charging, but for rapid boosts, it's not that great. Tesla offers a global network of supercharging stations specially designed to provide up to 120 kilowatts of power to its vehicles. The 90kWh Model S can charge from zero to 100 percent in just 75 minutes, or from zero to 80 percent in 40 minutes.

So, in sum: if we, as a country or planet, want to switch to 'clean' electric transport, we're locked into mass transport vehicles connected to dedicated non-coal fired power plants. Electric mass transport equals socialism. Not what the Right Wingnuts want to talk about.

There are a couple of ways to simulate the main advantage of gasoline with electric cars: its portability and ease of fueling. One is build Teslas with exchangeable battery packs, which they sorta, kinda tried but abandoned some years ago. The other is build proximity charging into urban streets, which turns each automobile into a mini-tram, an approach already under study.

But the ultimate solution could involve none of that at all. Wireless charging—the long-simmering solution for charging electronic devices without having to remember to actually plug it in—could solve a variety of problems relating to the complexity and ease of charging networks....while bringing a few benefits of its own, as well.

Not every street in every city need by powered, of course. The point of the network would be to provide enough power to run the "average" car while it is drawing power from the street. The main thoroughfares, but not the many side streets. After all, cars would be recharged when at the house.

Well, I'll be. Not my idea, after all. Those damn Socialist Europeans!! Note, however, that this is age-old contact charging; the street cars in DC decades ago also got their power from conduit in the street rather than the usual overhead wire. Didn't want to spoil the view. Really.

Most streetcar systems use overhead catenary wires for power. However, a very old law prohibits wires of any kind in the L'Enfant City, generally bounded by the Potomac and Anacostia Rivers, Rock Creek, and Florida Avenue. The pre-1962 system had a network of vaults under the road. Wires ran in the road, and a device called a "plow" connected to the streetcar reached under the roadbed and contacted the wires.

You know what's amusing about all of this? One of Tesla's (the man) inventions, we think, was a method of radiated power distribution. Some services, like clean water and dirty sewer, really are social goods.

Topsy Turvy

Well, as predicted some times over the last couple of years, the rate inversion is happening. Cue the disco ball!! Here's a quote:

It passed with little fanfare, but the spread between the 2-year and 5-year Treasury notes went negative yesterday, the first inversion of the yield curve since 2007.

There is a host of other punditry to read. Not seen or heard by Your Humble Servant in these punditries is a discussion of what, exactly, drives such an inversion. Recourse to a banking metaphor, as in the article cited, is misleading. Yes, the description of how community banking works is accurate on its face: borrow short and low; lend long and high. But that's not what drives Treasuries and other such instruments.

Treasuries are instruments of Big Holders, and are the instrument of last resort: when Big Holders, aka corporations and the .1%, can't figure out how to generate real returns on real capital investment, they turn to free money from Uncle Sugar. As the real capital alternatives dry up, either because technology doesn't progress or the CxO class can't find any, Treasuries become the instrument of choice. Of note is the plain fact that corporates took all that extra moolah from the Tax Giveaway and bought back shares, pumped dividends, and chased Treasuries. Same thing as under Dubya.

It's only when real capital generates large real returns that fiduciary returns can climb. That pesky Law of Supply and Demand sends ever more moolah chasing Treasuries when there's nothing else to do. Or, to put it otherwise, it's a matter of opportunity cost. Treasuries looked good for the same reason that an ugly guy looks good at closing time: any port in a storm. The Fed can't manufacture superior real capital investment.

Stupid Is As Stupid Does - part the second

Some days just keep on giving. Here's the latest, so far, from The Manchurian President

....I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN

Of course, the only ones getting rich since he ascended his throne is the l%. Tariffs are TAXES on Americans, not tribute paid by Chinese. When the facts don't fit the propaganda, lie.

Blue States' Wet Dream

OK, not the kind that plague adolescent boys; may be not quite plague. This is the Blue State political version, prompted by the criminal information published for Michael Cohen this week. I can say you heard this first here. At least, I've not read or heard it elsewhere as I type. What seems possible, although speculative of course, is that Mueller is running a spectacular gag on The Manchurian President.

What is clear is that both The Manchurian President and his kids and in-laws are referred in the information and such. Here's the gag. The Nixon expulsion was preceded by the Agnew ousting. A necessary precursor. What of today? Well, we have Pence on the record lying about all the grifting, as well. Mueller will offer them a simple choice: walk away and neither the USofA nor the various states with jurisdiction will try either of them, nor their kith and kin, with mountains of financial crimes. All under seal. The new President, until 2020, is Nancy Pelosi. That's the current order of succession. To change that would require both Senate and House passing new order law. Not going to happen.

Not a high probability event, I'll admit. But such a sweet dream.

Silly Season

In the world of Formula One, from the last few races to the beginning of the calendar year, is Silly Season. AKA, when teams and drivers do-si-do to determine who will drive where. Much of the time the status of drivers and teams is 'secret', yet always seems to be in the press, thus Silly. Well, I have seen the future of golf and it is truly Silly.

Anyone with any interest in sport is aware that today is Tiger and Phil day. The match is PPV, and the earliest price I could find was to be about $30. Later reports put it at $25. Ultimately, $19.99. Or not. A few minutes ago I went surfing to see what the score was. While PPV, they can't stop media reporting how the match is going. Came across a page that said BleacherReport was openly streaming it. Really? Off to BleacherReport to see. Golly Gee... there it is. My machine only has DVI, so no sound (both are mic-ed up, and the 'banter' was said to be a large part of the draw...), but not a problem. I typically put something on the stereo for sports rather than listen to commentators commentate. Bill Frisell.

The main reason I wouldn't pay to watch two geezers play country club golf is that it must be lousy golf. So far, over these last few holes, so it is. Not to mention that each shot, from address to in the air, is no more than 10s of seconds. Not an action packed adventure. The result, of course, is that 99.44% of the video is two geezers walking to the next shot. Joyful.

Another puzzlement: this is a PPV event, but Capital One is a sponsor, and they've managed to insert commercials!! Of course, I've no idea whether that's a side-deal they made with BleacherReport to send the stream. If not, if I'd paid my $19.99 and I still got to watch Chuck and Sam in inane commercials (I assume, since I don't hear them), I'd be a tad pissed.

Some of the media speculated that PPV is the future of golf, and such. That assumes that the advert model is wasted, and that there're enough fat old white guys willing to drop $19.99/day to watch about the most boring, actionless sport there is. Sometimes progress isn't.

Back to watching the geezers. I'll let you look up who 'wins'. And, again, since this is a match play event twixt two geezers, it's dirt simple to arrange for it to end up even (aka, a tie) such that each pockets $4.5. Bet?

Go Stuff Yourself

Well, happy Thanksgiving, a day when many utter those immortal words, "I guess I'll eat myself to death". Which words impel me to rant, not for the first time, about the most asinine bit of innumeracy. Not quite as stupid as believing that one can acquire syphilis from a public toilet seat, but real close.

So, in the last few days, whilst watching Pundit TeeVee, a talking head and some of the usual pundits were discussing The Manchurian President scandals. Along the way, one of the group said that the Founders couldn't have conceived of judges living as long as they do today, thus they wouldn't have made Federal judgeships lifetime appointments had they understood this. Well, it was fist-through-monitor time!!! This wasn't a bunch of Faux News propagandists! These were the usual gang of idiots from the Effete Eastern Intellectual Cabal! Gad.

I do acknowledge that innumeracy is rampant, and is one reason that The Manchurian President so easily gulls so many. But come on. The life span of a 65 year old in 1800 is not that much shorter than it is today. And much of today's longer life span after 65 is spent drugged up to the gills. We haven't cured any of the diseases of being old, have we? We can add a handful of months to cancer or cardiac patients, but these are merely delaying tactics. Diabetes and obesity, mark my words, will soon enough drive down lifespan, both measures, any day now.

What flummoxes civilians (those not of the demographer et al classes), is the simple statement that in year X lifespan was 45 years and today it's 75, or thereabouts. Civilians then jump to the conclusion that those "extra" 30 years have gotten tacked on at the end. Nope. More than once in these missives, I've dragged out the numbers (which I'm too full to do again; ok, here's a table), but the increased lifespan of a 65 year old from the start of Social Security to today is about 6 years, not 30. Fact is, from the beginning of time to the early 20th century, the lifespan of a 65 year old was pretty much static. It wasn't until then that medicine began to find methods to keep geezers alive a bit longer.

The answer to the question: "where, Dr. Robert, did those 30 years come from?" is simple. Almost entirely from massively reducing childhood mortality through vaccines, and adult mortality through antibiotics. The last couple of decades added some time from smoking reduction. But all of this just means that more folks get to 65 than in previous times. The average lifespan goes up just because lots and lots fewer folks are kicking the bucket by 40. That's it. That's just how average works.

Since there are age requirements for elected Federal positions, one might assume that there are for judges, well...

Believe it or not, the U.S. Constitution sets forth no specific requirements about who can become a federal judge.
...
A federal judge is not even required to possess a law degree!

Therefore, The Manchurian President could nominate Ivanka, aka The Pinhead, and get her appointed. If he found enough dirt on enough senators to coerce them to vote. Now go stuff yourself.

Money For Nothing - part the third

One of the persistent themes in these endeavors: asserting continuity, especially over time, in a dataset is fraught with danger! Will Robinson! The sole situation where it makes sense, unambiguously, is when the data generation process is owned by God, which is to say the hard sciences: physics, chemistry, and in a pinch biology. God doesn't change his/her rule set on a whim to gain advantage over Man. Some religions posit that God rewards the loyal and destroys the disloyal, but that's bunk. God didn't flood the earth (well, the region over which each particular religion had hegemony) to punish non-believers. Jim Jones killed those folks. Just Jim Jones.

The last version of these missives had something to say about totally crackpot 'data analysis' in macro data. One of the pet exercises among the macro-analysts is predicting booms and busts. Buy at the bottom and ride the wave up. Sell/short at the top and make money (or, not lose any) on the way down. Money for nothing.

Today brings a trenchant condemnation of the financial industry. A writer after my own beating heart. If his text sounds a bit like, "house prices can't possibly continue to rocket into the sky forever"; well, yes it does. You have been warned. Whether there's as much moolah at risk of crashing the entire economy is the Big Question.

Each boom and each bust develops from specific actions/events. Some are repeated in later periods. Most not. Each boom or bust has had a unique driver. It ain't explained by Elliot or Kondratieva. Not that simple. Ya gotta look for the new scam. It's always a new scam, scurrying under the radar of regulators. Or, one might suspect, in cahoots with regulators. That way be dragons when Right Wingnuts 'regulate'.

It Is Rocket Science

Happy birthday (40th) to the NYT 'Science Tuesday'. In my dead trees version are a bunch of ~half-page articles on science questions "still out there". Here are some excerpts.

Dennis Overbye on Einstein:

Dr. Hossenfelder argues that physicists have gone off course by exalting mathematical elegance. "They believed that Mother Nature was elegant, simple and kind about providing clues," she wrote. "They thought they could hear her whispering when they were talking to themselves."

Not just physicists. Here's a blog post I saw recently that takes econometrics into dragon country. There have been crackpot time-based notions of macro-economics for some decades. One is the Kondratiev waves. Another is the Elliot Wave, favored by the Gordon Gekko club. Those interested in how economic growth happens, and doesn't, read Solow for the mathy/technical analysis or Gordon with an historical argument.

Nicholas Bakalar on living forever:

Dr. Nir Barzilai, a professor of medicine at the Albert Einstein School of Medicine, is planning a study of metformin, a drug that has been used for 60 years to treat diabetes and has been shown to be effective against several age-related diseases.

According to the Wiki, metformin was first isolated in 1922; wouldn't it be a kick in the pants of big PhARMA if a 2 cent pill keeps us upright forever?

Kenneth Chang on warp drive:

The key is that relativity does not impose a speed limit on the expansion of space. "Space can expand at any speed it wants," Dr. Alcubierre said.
...
Negative energy has the effect of antigravity, pushing space apart, which you would need for the aspect of the warp drive that expands space.

Well, The Manchurian President presents with an infinite amount of negative energy. Ship him off to Alpha Centauri.

Gina Kolata on the fattening of the American Herd:

In 1976, 15 percent of American adults were obese. Now the it's nearly 40 percent. No one really knows why bodies have changed so much.

Umm... too many RC and a Moon Pie for breakfast, lunch, and suppa?? Me thinks?

The Amazing Spitting Man

OK. Let's bet how long The Manchurian President will take to trash Amazon for the disloyal act of putting the two new HQs dead center in the middle of Educated Coast Land. I don't twit, so it may have already happened. Certainly before the sun goes down. Go Blue!

Goodbye Tony

The mainstream pundits are finally figuring out that the issue driving the country into pieces is the urban/rural divide. The former is plastic, while the latter is concrete. Very white concrete. If you remembered to watch the very last "Parts Unknown", which ended a few minutes ago, about the Lower East Side of NYC, the divide is clear as day.

Bourdain spent the early part of his restaurant career there in the 70s and 80s. The episode interviewed people and places from that period. Nearly all those he talks with say, in one way or another, "if you can't stand change, you can't live here." Of course, in old, fat, white flyover country nothing changes. And they want it that way. Or, if possible, the way it was ante-bellum. If you know a way to get through to such folks, let me know.

New Gold - part the seventh

Yet another laggard in the mainstream media figuring out that the Buck's New Gold status has some implications. This piece deals with the Trumpian (lack of) intelligence manifest in tariffs and the like. Of major concern, although not the lede alas, is this:

In some ways, sanctions are the perfect American weapon. They are cheap, put no American lives at risk and elicit no equivalent response. Thanks to the centrality of the dollar to the global financial system, only the United States has the power to fully wield them.

In other words, if the US Buck were just another currency, Trump's sword would just be a wet noodle. Kind of like his dick.

Quit Bitchin

Do you get sick and tired of the fat, uneducated, shitkickers in flyover country's continued whining about how unfair it is that the Coastal states get all the good jobs??? Do you?? White grievance manifest. When I've typed about that situation in the many times past, the conclusion is obvious: they're in the situation just because they have always in years past, and continue to, elect right wingnut politicians who see to it that the shitkickers remain uneducated, unhealthy and generally unemployable beyond "do you want fries with that" or lawn boy. At some point tough love has to tell them the truth: it's your own damn fault; don't blame the highly educated Coastal Cabal.

So, it was with a warm heart, that Emily Badger provides lots of meat on those bones in the context of Amazon headquarters 2/3. The lede:

In the end, even Amazon has behaved according to this rule: In the modern tech economy, cities that already have wealth, opportunity, highly educated workers and high salaries will just keep attracting more of them.

This situation mirrors the Red/Blue divide, which I (and an increasing number of Others) have been saying is really a Rural/Urban divide.

Between 2010 and 2017, according to Brookings, nearly half of the country's total employment growth occurred in just 20 large metro areas (places that are home to about a third of the population). The Washington and New York regions alone accounted for about half of the net increase in business establishments across the country between 2007 and 2016, according to the Economic Innovation Group, which tracks economic inequality across the country.

Keep in mind: the GOP's middle class tax cut (snark) doubly penalized Coastal Blue states by cutting the deduction of state taxes, which taxes are used, in large part, to support education and healthcare of the folks the likes of Amazon wants to find. You won't find many in flyover country, just because the flyover folks don't want to learn anything useful, but want a 90210 Lifestyle. They ain't no such thing as a free lunch. Numerous studies, here and here for example, have been driving a stake in the lie that small business drives job growth. Certainly not high-skill, high-education jobs. Nope.

Also, we see, again, the minority dictatorship by the shitkickers, in the person of The Manchurian President, who's convinced them that he's their savior. Yeah, right.

There is some hope that flyover folks are beginning to find some sense. Some Red state voters got Medicaid expansion and a raised minimum wage.

The RCH Factor

So, for the last couple of weeks the Pundits of MSNBC have been HIGHsterical. It goes like this: "we blew it in 2016 by misjudging the polls"!! Well, no. As stated many times, and many places (here, certainly), the pollsters got the national vote dead on (you should read the whole thing).

But here's a stubborn and surprising fact — and one to keep in mind as midterm polls really start rolling in: Over the past two years — meaning in the 2016 general election and then in the various gubernatorial elections and special elections that have taken place in 2017 and 2018 — the accuracy of polls has been pretty much average by historical standards.

As also stated here many times, stratified random sampling is the toughest thing in all of quant. At the national level, it's quite a bit easier to say how the vote totals will go, but when you have something as biased as the electoral college getting in the way, making a presidential prediction gets to be problematic.

The number that matters to the 2016 experience is 79,000. That's the high end of various numbers that have been reported for PA, MI, WI margins for Trump. Turns out, while vote totals by state are readily available, number of precincts by state aren't so easy to find. I was able to find both numbers for MI. Here they are:
Trump margin: 10,704
precincts: 4,830

So, the margin is about 2 votes per precinct!!! There is no way on God's Green Earth that a national poll would find so few aberrant voters. The midterms aren't biased by the electoral college. Even so, MSNBC is showing as I type, and they've put up numbers for some interesting races, and the margins are running in the 4 to 6 point range. But... if you look at the fine print in the graphics, the MOE (that's what it says, rather than spelling out margin of error) runs to 3.5+ points! There's a reason that the House as been held by Democrats so much of the time: the mass of the voting public isn't Trumpian and never has been. It's essentially Liberal, even though many won't admit it.

Radio Free Europe

Well, oh my. So the Right Wingnuts are out to invent a smear of Mueller. Now, remember this: at least the Russians and Chinese have been tapping The Manchurian President's clear-text iPhone. Likely the Brits, French, and Germans at least as well. Also, this cute smear didn't come to light until after the tapping revelation. You can be sure that the tappers have tape of The Manchurian President okay-ing the gig. If not demanding it. Recall, also, the reason The Manchurian President uses this phone is that he doesn't want his calls to his cabal logged by the Damn Gummint, so he would surely do the deed on his personal device. If he did it, of course. Would the Brits be willing to share?? How about the Dutch?? Can you say, "even the GOP has to impeach"?

Thought for The Day - 19 October 2018

OK. What are the odds that the latest 'caravan' was instigated by the The Manchurian President brigade? The perfect October Surprise. The Honduras nasties get a few bucks and rid of some malcontents. The Manchurian President gets his 'issue'. 99.44%.

A Feature, Not a Bug

Just go read this piece. Calls bullshit. Just as any intelligent analyst did at the outset. Shift $1.5 trillion from the many to the few, blow up the deficit, and round up the usual suspects.

One way to think about it is from the perspective of a small-business owner. Let's say you run your own bakery. You sell bread for $4 a loaf. Today, you sold 90 loaves, for $360 in revenue. You expect that, because it's a busier day at the bakery tomorrow, you'll sell 100 loaves then, earning $400. But you"d like to sell even more than that, so you lower the price to $3 a loaf to encourage additional purchases.

Congratulations! You sell 125 loaves. Your revenue goes up, to $375. That's more than you brought in the day before. Your price cut, though, has not "paid for itself" - because you ended up bringing in less revenue than you would have otherwise.

In other words, you brought in more money than the day before. But it's less than you would have made if you hadn't cut the price.

It will be so much better for the country when SS, Medicare, and Medicaid are eliminated. Right?

I Bet You Didn't Know This

One of the most disturbing reports in quite a long time. I didn't know it. I bet you didn't either.

Native Americans did not obtain the right to vote in the United States until 1965, when the Voting Rights Act was passed, prohibiting voter restriction based on race.

Thought for the Day - 12 October 2018 [update]

The Fed is playing with fire, i.e. disaster. For the first time, The Manchurian President may be right in his yelling at The Fed. I doubt his yelling is motivated by anything more than self interest. He has a lot of debt in his Failing New York Businesses.

As has been posited in these missives since the Great Recession, economic health, i.e. widespread growth, is driven by increasing demand for the stuff (tangible and intangible) that we make. It's a long establish fact that the marginal propensity to consume goes down as income goes up. There're only so many bananas that one person will buy in a given time period. Giving Mo Money to those with lots o Money doesn't do the job. It makes them happier, naturally, but does nothing to promote growth. Business doesn't make Mo Stuff in the face of static demand. Much less falling demand.

Which brings us to this line from briefing.com today - 8:06AM:

Starbucks says executing a $5 bln accelerated share repurchase program as part of previously announced plan to return $25 bln to shareholders (54.86 )

What do you think will happen to that $5 billion?? Will it be spent buying a new car?? A new house?? Nah. It will be plowed back into the market, in some form. It might go directly to Treasuries, and push up prices and down yields. It might go (indirectly pushing up Treasuries) into some other share, pushing up its price and down its return. Some might end up in the hands of Joe Sixpack Retail Plunger who might buy an extra case of Bud each week, but that'd be the shrinking minority.

No matter how you spin it, liquidity is being pushed into the hands of, mostly, folks with more money than they know how to spend on consumer product already. So, they'll try to spend it on assets. And so goes up the price of assets, and down the various types of interest rate. Most of the recovery from the Great Recession has been driven by unwarranted increases in asset prices. This should be no surprise, as most of the recovery effort, intentional or accidental, has been directed at the 1%. Joe Sixpack hasn't seen much benefit. The financial pundits, and the elites who make the decisions, won't tell us the truth. It might just make enough folks mad enough to see that The Manchurian President has been scamming the Populist President label from the beginning.

By pushing short term rates higher, in the face of stagnant returns on long term real capital in the private sector, the Fed is shooting us all in the foot. Rate inversion, here we come. You won't enjoy the ride.

[update]
Here's some more reporting I just finished reading with my morning greasy spoon java:

When companies have more cash than they believe they can use productively, they typically return it to shareholders either with cash payments - known as dividends - or by repurchasing shares in the market. Buybacks raise demand, putting upward pressure on share prices.

And, as before, rising share prices drives percent return, aka interest rate, down. The Fed can do nothing to make the CxO class smarter at finding new, profitable, ways to build physical capital. Monetarism can go only so far.

Yes Ore No - part the third

In answer to a diminishing number of requests, I offer up another data point in the argument over tariffs. Studious reader will recall "Yes Ore No - part the second" which contains this perfect gem of logic:

Now, you can't have steel, or aluminum, without the source ores. It's not a case of 'where there's a will there's a way'. Yeah gotta have ore.

Putting up tariffs is done for one or two reasons (mayhaps both); 1) to finance the government (here's the data) or 2) to generate excess profit to fledgling domestic industry. As stated, steel isn't fledgling, and aluminum is dead as a door nail. Steel is nearly so, based on known reserves of iron ore. We used to have bunches, but burned up much of it building ships and tanks during WWII. Moreover, to make specialty steels, other minerals are needed.

Which brings us to today's NYT missive about Finnish (mostly, stainless) steel. It's a case where there's no possibility of making such steel with American resources, and the amount of money that tariffs will bring is a spit in the ocean of government budget. Stupid is as stupid does.

Perhaps most important, there are no active chromium mines in North America.

You can't make stainless without chrome. Nickel and molybdenum are commonly added as well.

He Did It [update]

One of my guilty pleasures is the "Law and Order" shows. Just the Original and "Criminal Intent", though. There must be thousands of actors in the NYC metro area, since they've got to have gone through that many. Some actors are considered "exotic looking". Bette Davis when she was younger. Among today's performers, Penny Balfour is the tops.

In the L&W episode "Hubris", the bad guy is played by Tim Guinee, also border line exotic. Certainly smarmy this time around. During the trial portion of the episode, Guinee is self-lawyer while Balfour is jury foreman. He flirts openly with her. He gets acquitted. She pushes the jury to do so.

With a couple of minutes to go, she comes to see McCoy. Admits that she steered the jury. And that he dumped her right after the trial.
Gibbons (Balfour): "He did it, didn't he?"
Carmichael; "Yeah, he did."

The episode ends with the cops called to her apartment, with Morriston (Guinee) dead on the kitchen floor with a knife in his neck. Seems he attempted to garrot her while she was making dinner, with null effect.

Kavanaugh did it, and listening to Collins dance around the truth for an hour...

[update]
A while back, I heard something about cum laude graduations from Yale around the time Kavanaugh did. Basically, it was a Lake Wobegon sort of place. So, here's the data:

Last year [1987], 46.4 percent of all seniors graduated from Yale with general honors - 11 percent graduated summa cum laude, 11.5 percent magna cum laude and 23.9 percent cum laude. In 1986, 50.5 percent of the graduating class received honors.

How special they were.

Day and Night

More than once over the course of the last few years, these missives have asserted that the best show on the TeeVee is 'Anthony Bourdain, Parts Unknown'. That was said long before he died in June. As more information emerged about the circumstances, it seemed to me that the most likely situation was a Carradine. After the first 2 episodes of this final set, I'm not so sure. At the time of the suicide, he was in France with Eric Ripert recording an episode, and was later reported to show no signs of despair or other darkness. Ripert, by all accounts, was one of his closest friends. Perhaps first among many.

It was a bit eerie watching the remaining episodes of the then current season being broadcast. He was there in full view, but not. Then, CNN announced that episodes for season 12 in production were in various forms of completion, and would be shown. The season would be 1 fully complete episode, 4 episodes with sufficient location recording, but no post-production narration, and 2 'tribute' episodes. This could be difficult.

Sunday before last was the complete episode, Kenya, with W. Kamau Bell as tag-along sidekick. The majority of episodes over the seasons are just Bourdain going somewhere, meeting up with foodies, musicians, politicians, academics, chefs, cooks, and so on. The crunchier places require some number of fixers to keep things going, if only navigating language. This was a standard 'Parts Unknown', not to be missed, but known to be the last. Ever. What comes next?

Spain came next, last night. Again, a sidekick in the form of Jose Andres. And a good thing, too. Sort of. This episode proves what made 'Parts Unknown' so extraordinary: Anthony Bourdain's view of the human condition, spoken with heart and feeling and experience. Most episodes have Bourdain interacting with local folk for extended periods of time. I never took double stopwatches to time how much of Bourdain we got in situ, and how much post-production narration. I'm pretty sure it's more post, but not by a wide margin. I'll guess that the intent was for Bourdain to fill in the history of Andres, Asturias, the food, the people in post, because we hear very little of him in the episode. We hear Andres. I can't be sure, but I suspect having to do the post for the episode was not an easy experience. There's a short bit about a miners' strike that's just the sort of incident Bourdain would chew on. Loudly, mouth wide open. But we got only a bit of Andres and a local musician telling us about it.

We do get some tighter head shots, which struck me as out of the norm. His hair is silver, and his face is lined like a newly harrowed field. He looks tired. I don't know whether these episodes are in chron order. Which is to say, whether we'll see him change as he approaches his end. Will there be clues to his state of mind, and so on? Will we see him just a few days or weeks before France? Will we be told how these episodes mesh with France? Some of us really, really need to know. The Kenya episode had a few seconds of a wall GUI map of a game preserve, with incident locations and dates, that were February of this year. Just a handful of months left.

The remaining 3 episodes may be painful, if there's not a sidekick or two to fill the void. I'll watch, but I'll likely be angry at the bastard for doing what he did.

Join Me For Drinks

Some interesting news (well, not news to some):

For the first time since 2005, the U.S. Army missed its recruiting goal this year, falling short by about 6,500 soldiers, despite pouring an extra $200 million into bonuses and approving some additional waivers for bad conduct or health issues.

Those who've been paying attention know that the military has been lowering the bar to recruitment for decades. Fatter, dumber, and crazier after all these years:

Only about 30 percent of 17- to 24-year-olds meet the physical, mental and moral requirements for the military, and only one in eight are interested in serving.

Only about 30 percent of Americans are the The Manchurian President base. That means 70% aren't thin enough, smart enough, and sane enough. Now we know where the base comes from. Coincidence?

Last October, Army said it would meet its goal:

The Army will reach its goal of 80,000 new soldiers without compromising quality, predicted Maj. Gen. Jeffrey Snow, who leads its recruiting command.

Well, no.

Turns out, not too surprisingly, that the problem has been reported for some time. Here's 2006:

Replacing a gunner who'd scored Category IV on the aptitude test (ranking in the 10-30 percentile) with one who'd scored Category IIIA (50-64 percentile) improved the chances of hitting targets by 34 percent.

Is this stat sig?? Not reported, but I'll guess that it's close to population data, so it's just numbers.

Which gets me to wondering: have the Cats been re-defined over time? That is, is a Cat III or IV less intelligent now than in the past? Has there been a double whammy here? The wiki has some history.

The ASVAB was first introduced in 1968 and was adopted by all branches of the military in 1976. It underwent a major revision in 2002. In 2004, the test's percentile rank scoring system was renormalized, to ensure that a score of 50% really did represent doing better than exactly 50% of the test takers.

Was 'renormalized' just another way to cheat dumber kids into the Service? Well, here's contemporary pushback against that accusation.

"We don't want people to think we are lowering the standard of quality coming into the Air Force," Ms. Strickland said. "It appears that way because 36 is lower than 40, but it will still be the same quality of applicants we are accepting into the Air Force today."

That newspeak for: "we've found that all these kids are dumber than in years past, so we've lowered the raw score to meet the percentile we've previously used." The assertion made by DoD is that kids got smarter from 1980 to 2004, so raw scores needed to be lowered to meet the median (IQ?) that existed in 1980.

"Potential servicemembers in the last 20 years, simply put, have gotten smarter," Ms. Strickland said. "So the scores have shifted."

Do you believe that? Make you feel better?

We hear all about, esp. in Military recruiting adverts, how the "new Army/Air Force/Navy" is more tech savvy. Which means more tech savvy personnel. One meme is that video gaming prowess is now a plus. Yes, it's true.

Here's some other data. It's from the wiki, but as usual is heavily linked. It shows that, even after boosting the raw scores with a renormalization, math and verbal SAT scores have been and continue to decline. Is it likely that college aspirational students would be in decline, while HS/GED students are ascendant? I thought so.

Live Long and Procreate

During the fiasco called Kavanaugh one of the Left pundits (I didn't take notes, but this isn't a unique assertion) allowed has how the USofA is the last modern country which puts its supreme court judges on the bench for the rest of their lives. He also allowed that an 18 year term has been broached, and he supported such. The argument is simply that a life term in 1800 spanned far fewer years than today. That's not disputable. But what is disputable is how much? The pundit stated 36 as the life expectancy then, while now it's around 75. Lifetime appointment is nuts!!!! And so on.

But, naturally, it's a somewhat bogus argument. Life expectancy at birth didn't change by big numbers until the 20th century. Childhood vaccinations, sulfa drugs, antibiotics, and such account for why folks live longer. And most of the increase comes before 21 or so. Here's a succinct table.

So, yes lifetime Supreme Court appointment is nonsense, but not because middle aged white men live a whole lot longer now than in 1800. Another table which indicates about 8 years more now for 50 year olds, a reasonable guesstimate.

So yes, Kavanaugh is a horrid candidate (and should be impeached for lying at his 2004 and 2006 hearings), but he'd not be around as much longer as the "life expectancy has risen 40 years since the Constitution" assertion. Don't use stupid numbers to make your case.

A Good Wheel

Lots of times there's no reason to reinvent the wheel. The Microsoft/R folks have gone through the Maria deaths report, and provide good evidence that The Manchurian President is a Tillerson. In spades.

The process used by the George Washington researchers is easily defended by anyone who is not innumerate. Go have a read.

Big Lies - part the first

If you're going to lie, might as well make it a big one. Today is unemployment reporting day, and once again the reported number of new claims is the lowest since 1969. There will be a tweet in due time taking credit for this. Which isn't even true, in the time series sense. But consider the base number for 1969 and 2018: the size of the labor force. The BLS has such data, surprise! Here's the picture.

If you look real close, you can see that the labor force has doubled. Not an apple to apple comparison.

Papa Doc Makes a House Call

Another skunk in the outhouse. Papadopoulos, convicted, is now setting up interference for The Manchurian President. Too bad the mainstream pundits don't see it. So I'll tell what Papa Doc is doing.

First, the denial/no recollection of the statement to the Australian diplomat about the Hillary emails.
Second, the assertion that Session not only didn't push back on the Trump/Putin meeting, but encouraged it.

The first gag is designed to impugn the onset of the FBI counter-intelligence investigation. Which led to the current mess. Trump gets to claim it's all a fabricated witch hunt.

The second gag is designed to provide an excuse for canning Jolly Jeff, putting in DeVos (or any other bag o flesh that's been confirmed) in as AG and then can Rosenstein, Mueller, and anyone else up on Russia.

Now you know. It'll be a while until the usual suspects figure it out.

The Man of The Book

Two meaningful events today. Both remind us of The Manchurian President: he bragged that his building was now the tallest after the towers were downed, and Woodward's book goes on sale. It's all about The Donald. Sad.

It seems that we can interpret Woodward's book title in two ways. And even at the same time.

As a complete sentence - Fear Trump in the White House. Which means exactly how it reads.

or

As a definition - Fear: Trump in the White House. Which means exactly how it reads.

Thought For The Day - 10 September 2018

The Manchurian President responded to Obambi's stump speaking with a complaint, as one might expect. The recovery from the Great Recession was the weakest in history. And such. This sounds an awful lot like a motorcyclist, who rides without a helmet, and who runs into a bridge abutment after drinking all night. The Obamacare folks put him back together, but he continues to complain that his face isn't exactly as pretty as it was before. Some ingrates have all the luck.

Horton Hears a Who

With all the hubbub over the Anonymous op-ed in the Failing New York Times, the most agita (from my reading) is that the Times risks significant loss of credibility, and perhaps faces an existential threat from Dear Leader and minions, if it turns out that Anonymous is the second assistant deputy director of toilet paper in the Small Business Administration. Or some such.

What all those hand wringers appear to ignore is the critical sentence:

I work for the President.

Now, it is possible that the Editors at the Times would allow Anonymous to make that statement, knowing that s/he is really the second assistant deputy director of toilet paper in the Small Business Administration, but I find that impossible to believe. The Editors preamble describes Anonymous as "a senior official in the Trump administration". That's not the second assistant deputy director of toilet paper in the Small Business Administration, either. Those two statements combined have to mean at least Cabinet member or White House denizen. Some people are scared shitless by this fucking moron, as Tillerson has it.

Protect The Rich. NOW!!

Yet another ode to protecting the rich from the poor huddled masses. Football owners, who on the whole get stadiums paid for by taxpayers to begin with, are being discriminated against by the states' tax policies. Move to Red states where the governments don't provide education, healthcare, clean water, clean air to the bulk of their citizens. Poor football owners.

Here's the tale from Fox Sports; not the left-wing rabble you might expect to talk about the issue.

It's worth noting that moving high capital sports to Red states doesn't work. We already know how that ends up. NASCAR has been failing for some time, especially since the Great Recession. It's just that good ole boys just can't pay the freight to attend. And watching roundy-round cars until one crashes isn't as much fun since there aren't so many wrecks and few die; any more.

Quants' Hubris - part the fourth

The more things change, the more they stay the same. The perpetual mantra of the financial quant, horrid experience to the contrary.

And so back to the main question - can quants actually predict the future? Quants depend on the past, as manifest in their data, being the same as the future. For natural phenomena, that's true. The problem for quants in that space is knowing what God's Rules really are. Black plague is carried by rat fleas, not a punishment for impiety.

Because they did not understand the biology of the disease, many people believed that the Black Death was a kind of divine punishment - retribution for sins against God such as greed, blasphemy, heresy, fornication and worldliness.

But, in time, a scientific explanation emerged:

The most authoritative account at the time came from the medical faculty in Paris in a report to the king of France that blamed the heavens, in the form of a conjunction of three planets in 1345 that caused a "great pestilence in the air". This report became the first and most widely circulated of a series of plague tracts that sought to give advice to sufferers. That the plague was caused by bad air became the most widely accepted theory.
[the wiki]

Well, may be not so much science. Or, as Mellencamp has sung, "people believe what they want to believe when it makes no sense at all."

We saw just this happen when the quants enabled the Great Recession; believing that house prices could rise, everywhere, like a rocket forever. After all, the data proved it. What the data didn't prove was why so many wonky mortgages could be made. The answer to that question was simple, if not widely expressed: the Powers That Be had changed the rules for making a mortgage. The old data was under the old rules. Not the new mortgages. Oops.

Recent reporting brings us another example of data lagging reality. And, perhaps, just as unpleasant results. You should read it up, if you only follow Fox News. It's worth noting that fracking is nothing really new. Tertiary extraction, which has been used for decades, works by the same principle: force out trapped oil with high pressure fluid. What's new, to me, in this article is this:

A key reason for the terrible financial results is that fracked oil wells show a steep decline rate: The amount of oil they produce in the second year is drastically smaller than the amount produced in the first year. According to an economist at the Kansas City Federal Reserve, production in the average well in the Bakken — a key area for fracking shale in North Dakota — declines 69 percent in its first year and more than 85 percent in its first three years.

IOW, fracked oil is not sustainable, either in terms of output or financially. Which leads to the second question: if these well go dry as fast as a high school lineman sucking up a milkshake, how is output sustained? A good question, it seems to me.

Because the industry has such a voracious need for capital, and capital costs money, fracking could not have taken off so dramatically were it not for record low interest rates after the 2008 financial crisis. In other words, the Federal Reserve is responsible for the fracking boom.

The problem with QE, not so much TARP, was that it didn't make any requirement for sensible use of the capital. So, sense went out the window. The article ends thus

But rhetoric doesn't produce profits, and most things that are economically unsustainable, from money-losing dot-coms to subprime mortgages, eventually come to a bitter end.

Another voice in the choir of quant hubris and the asymptote of progress. If welfare queens had been given the moolah, and went out and bought crack and Cadillacs, ya think the billionaire donor class might have yelled and screamed? Ya think?

The Oracle Pooped

Yes, the Oracles pooped in FL a couple of days ago, which means there's been time for the pundits (and pollsters?) to do the usual post mortem to explain how they missed Gillum. It appears to be along the same line as 2016/Trump: ineffective stratification. Long time reader knows that one of the mantra of this quant is 'stratification is critical and it is haaahhd'. Getting to the moon was easier.

Given the typical size of such samples, ~1000, accuracy depends of either of two factors: the population is largely homogeneous with respect to the issue being measured, or strata/subsamples have to reflect both defining characteristics of subpopulations and their weights. Miss either, much less both, and your results don't hit the bullseye. The Manchurian President was, inadvertently, right. The pollsters didn't oversample the cities, but rather treated ex-urban areas in those three states as homogeneous to the cities. And, before 2016, the data on which the stratification was based that was an accurate criterion. Some people, voters, were fooled by lying. Some people, pollsters, were fooled by historical data.

It's worth mentioning that The Great Recession happened just because the Smartest Guys in the Room believed that explosive growth in house buying and thence prices was not only sustainable, but an organic growth. If something is too good to be true, it is. In the housing case, the rules of the game were changed, mostly by the Smartest Guys in the Room to their advantage. They were the piper and they played the tune. The rest of us paid the price.

So, with all that, here's one self-congratulatory missive.

A Change Research poll released last week showed Andrew Gillum winning the Florida Democratic primary with 33% of the vote — making it the only pollster to predict Gillum's stunning victory last night.

And, in a footnote, they tell us how they did it (well, not with trumpets blaring, naturally):

Post-stratification was done on age, gender, ethnicity, region, and 2016 Democratic primary vote.

Know your voter.

The Asymptote of Progress - part the tenth [update]

Boy howdy! Yet more reporting on the next node of semiconductors. Another halfway step to the wall. Their best bit is a comment:

A few years ago, an ex-Intel buffin held a talk on chipmaking at the end of Moore's law. He predicted it would come at 2016-2020 and around 10nm.

That's really it then. We'll get another node at 7nm (eventually) but after that? Slow, incremental improvement.

Few people understand how big of a deal this is, but think about this. All of us grew up in a world where the power and speed of computers and electronics would double roughly every two years.

This exponential growth was a virtual certainty and it fed the biggest prosperity engine in human history. There isn't many fields and businesses that didn't in some way benefit from it.

And that's almost over. There's a few years left where it almost seems like nothing has changed, but it has.

Some of us have children. Those children won't live in a world with electronics doubling in speed and capability every few years.

The next generation of video games for them will look pretty much like the last one, unless you'll know where to look.

For them, it'll be nothing but slow, incremental improvement year after year: A 2% improvement here. A 1% improvement there. The way it was before the transistor.

The scariest thing is, what will happen to the economy. Trillions of dollars and billions of man hours have been spent in the shadow of Moore's law the past decades. What will happen, once there isn't a reason to get a new TV every 4 years? If computers only get a few percent faster every year, will computers become a thing you buy once a decade?
-- V900
[my emphasis]

The other half of the problem is that ole amortization boogie man. The article does recognize that bit of horror:

Development of leading-edge process technologies is extremely expensive. Every new node requires billions of dollars in investments. Those costs are eventually amortized over each chip the company makes, so to keep increasing R&D costs from driving up chip prices, foundries need to produce more chips.

And, naturally, chip makers need customers who make things with the chips that raw civilians buy with their incomes. More concentration of incomes to the 1% leaves an ever diminishing pile for the rest to buy things with said cheeps. The frog is beginning to feel the boil.

[update]
Just got back from my FNYT and coffee to find this new comment:

"Some of us have children. Those children won’t live in a world with electronics doubling in speed and capability every few years."

Oh....the.....horror.....
-- Manch

Stop Pickin on Me

[apologies to Warren Zevon]

I went home with a waitress the way I always do
How was I to know she was with the russians, too?

I was gambling in havana, I took a little risk
Send lawyers, guns, and money
Dad, get me out of this, hiyah!

An innocent bystander
Somehow I got stuck between a rock and a hard place
And I'm down on my luck
Yes, I'm down on my luck
Well, I'm down on my luck

I'm hiding in [Mar-a-Lago], I'm a desperate man
Send lawyers, guns, and money
The shit has hit the fan

Send lawyers, guns, and money
Send lawyers, guns, and money
Send lawyers, guns, and money, hiyah!
Send lawyers, guns, and money, ow!

Given the reporting out today, yeah, the shit has hit the fan.

We Don't Need No Education - part the third

The right wing's efforts in Social Darwinism hit another home run. Cheer for the hole in one. It seems that teaching is the profession that only the lame want to enter.

[F]ewer college students are studying education. Enrollments dropped by 35 percent between 2009 and 2014, according to the Learning Policy Institute.

So, plenty of excuse to put an end to that pesky free public education. If you can't afford it, you must not need it and you can't have it.

Thought For The Day - 21 August 2018

Today The Manchurian President now knows what it's like to be on the business end of a double barrel 8-gauge shotgun loaded with deer slugs. Yes, there are such, though not in current production.

Yes Ore No - part the second

There's a few line story in the news today. It seems Wilbur Ross will be braying at Century Aluminum in Kentucky on Wednesday; a smelter is re-opening idled lines. The Manchurian President wants credit. Recall the first entry in what is now a series: the USofA has little iron ore and virtually no bauxite (in global resource terms).

IF YOU DON'T HAVE STEEL, YOU DON'T HAVE A COUNTRY!
-- The Manchurian President/2018

Of course, that's pure nonsense. In the financialized economy of the 1%, national steel and aluminum are completely irrelevant.

Now, you can't have steel, or aluminum, without the source ores. It's not a case of 'where there's a will there's a way'. Yeah gotta have ore. And for aluminum, lots o electrons.

Alcoa, formerly the Aluminum Company of America, and another American company, Century Aluminum, have opened factories like this in Iceland, and closed factories in the United States, for a simple reason: Electricity is much cheaper here.
...
Bauxite may be mined and refined in Jamaica, shipped to northern Quebec for smelting, then hammered into car parts in Alcoa, Tenn.
[here]

Cheap electricity is what supports smelting aluminum; it requires prodigious amounts of leetle electrons to turn ore into metal. That Kentucky smelter exists because of the TVA.

In Washington state, for instance, the smelters that used to operate near the hydroelectric power plants along the Columbia River have been priced out by the power-chugging server farms of tech companies such as Microsoft.
[here]

and

Aluminum has been called "solid electricity" because of the amount used to make it (13,500 to 17,000 kWh per ton). That's why most of the aluminum smelters were built where the Tennessee Valley Authority and the Bonneville Power Authority could deliver cheap hydroelectric power.
[here]

So, a huge Pyrrhic victory for jingoism. Swell.

Thought For The Day - 17 August 2018

As if one needed yet more reporting on Turkey basting and the US Buck's supremacy. Not to mention all those trillions looking for hefty returns at low risk, we get some briefing.com words(7:55):

Looking at other markets, the Turkish lira is down 4.2% against the U.S. dollar this morning, on track to end its three-day rebound, but still remains a ways above its all-time low, which it hit on Monday. Meanwhile, U.S. Treasuries are higher, pushing yields into the red, with the benchmark 10-yr yield down two basis points at 2.85%.

Or, as we say (or so I'm told) in the Navy, "Dive motherfucker!! Dive!!!" Yeah, there's no advantage to being the world's reserve currency.

New Gold - part the sixth

The Manchurian President continues braying that the USofA is the victim of bad the international monetary and trade deals. Day after day. While these missives have explained why it is that the US Buck being the world's reserve currency actually gives us the royal flush in spades hand. The Manchurian President is either too stupid to figure that out, or he's just lying to cover his ass. Blame the global elites and their Democratic enablers. And so on.

Well, today brings yet more reporting that the USofA is gutting lots of the world.

A crumbling currency inflicts many damaging consequences: Companies that borrowed in dollars — the global reserve currency — have to come up with steadily more money in their local currencies to repay U.S. dollar debts. Having to do so also raises risks for the banks that lent to them.

That's the kind of squeeze that ignited the catastrophic 1997-1998 Asian financial crisis. A currency disaster in Thailand infected the entire region, and East Asian economies absorbed devastating damage.
[my emphasis]

We're the victims. Yeah, sure.

And, how might other countries manage this:

And emerging-market countries learned lessons from the debacle two decades ago. Many piled up reserves to fend off speculative assaults on their currencies. At the start of 1997, emerging-market countries' reserves amounted to barely 6 percent of their economic output. Now, they equal nearly 18 percent, according to the Institute of International Finance, a banking trade group.

Guess what?? All the US Buck reserves came from our current account trade deficit. No trade deficit, no expanding New Gold stock, no expanding world market, world market deflation. You don't want to live in that kind of world. Arithmetic doesn't lie. Yummy.

New Gold - Part the Fifth

Here we go again. There are upsides and downsides to the US Buck being the world's Reserve Currency, aka New Gold. One of the side-effects, in both directions, is on domestic interest rates. Many's the time these missives have called out the repercussions of rate inversion. Well, here's some more reporting on where we are.

It has been a long bull run for both stocks and bonds, and borrower defaults have been at historically low levels for years. As has the spread -- the difference between the yields -- of Treasury-backed securities and riskier bonds. But as interest rates continue to rise, and some companies and other borrowers fail to meet their debt obligations, defaults will inevitably increase along with the spreads.

The implication, of course, is that longer term private debt has been written at artificially low rates, and thus high prices. Again, there's nearly $2 trillion in idle money just on corporate balance sheets (see recent missives). Not to mention the 1% and .1%. All seeking 10% and no risk.

So, that reporting was a few days ago. Today we hear another siren, sounding in Turkey, of all places. Much the same as China over the last decade or so, lots of real estate building. As the saying goes, there's only so much time and so much land. You'll never get the former back once it's gone, and there's no more of the latter. Easy money in real estate.

Mr. Lee noticed that Turkish banks were borrowing in dollars to make other loans to fast-growing Turkish companies. He also saw that, over all, Turkey's economy was growing more reliant on financing from foreign investors. It struck him as similar to what had happened to Thailand in the years before the Asian financial crisis in 1997.

Gold giveth and gold taketh away. As with the Great Recession, lots of idle money, unable to find productive homes in physical capital, chases real estate.

Blues for Donald in D# Major

The most important news out of Tuesday, not widely discussed that I've seen, is that right-to-work got drowned by a blue tsunami in Missouri, the 'Show Me State'. It seems that lots o folks there have figured out that The Manchurian President has been lying all the time. As Rachel Maddow tells us, "watch what they do, not what they say".

The Manchurian President keeps taking from the many poor and giving to the few rich. "Vote for George O'Brien, get Charley off the MTA".

Real growth can only happen if aggregate demand grows, and that has never happened while income and wealth concentrate as they have over the last few decades. Rich people don't buy/spend as much of their moolah, per dollar, as the poor. They chase instruments, and they've had a big appetite for high-return/low-risk such; not that such actually exist, naturally. Which gave us the Great Recession. What will be next? I don't have a firm answer. May be soon.

Along that line, we have this reporting that Treasuries are inching toward 3%, and the pundits are losing their minds. Let's see. Warren is sitting on $116 billion. How much is corporate America sitting on? $1.9 trillion as of the end of 2017. The Smartest Guys in the Room can't figure out how to make real investment. In due time, not much IMHO, they'll go back to chasing Treasuries and driving up price once again. Rates will collapse.

Why? Well, my frenemy Neil Irwin reveals why he's sorta, kinda Luddite.

I think most digital technology is more mature than we think. People have been using personal computers since the 1980s, and smartphones for more than a decade. And the thing about a mature product is that improvements tend to be marginal rather than transformational.

What these missives have been naming, 'The Asymptote of Progress' for a long while. Marginal 'improvements' don't generate significant growth or return, naturally. The latest iPhone doesn't have the impact of the steam engine. That pesky asymptote gets flatter by the day.

Fool's Goal

Are you old enough to remember pets.com? Cute Lamb Chop-ish sock puppet spokescritter. Lots o fun to watch the adverts. Didn't last all that long.

It began operations in February 1999 and liquidated in November 2000.
[the wiki]

Before I looked it up just now, I hadn't realized just how short its life was. Poor doggy. Got hit by bus.

Today's missive is about a similar ploy: dinner over the internet. There's in the neighborhood of half a dozen such outfits. Today's report is for (7:09)Blue Apron:

Reports Q2 (Jun) loss of $0.17 per share, in-line with the Capital IQ Consensus of ($0.17); revenues fell 24.6% year/year to $179.6 mln vs the $188.51 mln Capital IQ Consensus.

Customers decreased 24% year-over-year and decreased 9% quarter-over-quarter as the Company progresses through the aforementioned transition period. Average Revenue per Customer was $250 in the second quarter of 2018 compared to $251 in the second quarter of 2017, and $250 in the first quarter of 2018.

Going the way of the sockpuppet doggy? Only time will tell.

Them Cheatin Canadians

Well, I suppose the truth had to come out eventually. Turns out the seat of Tech Growth isn't where you might expect, if you drink The Manchurian President's Flavor Aid. It's Toronto. Those wily Canadians are using currency manipulation and open border to drain our precious bodily fluids. We must attack before it's too late. Once a friend, now an enemy.

The capital of Canada's Ontario province created 28,900 tech jobs last year, up 14 percent from 2016. Toronto's more than 241,000 tech employees represent a 52 percent increase during the last five years, according to CBRE.

The Doctor Is In

Recall the mentioning of that old saw, Dr. Copper? Well, a major American copper corporation had this to say (8:09):

Despite the recent decline in copper prices associated with the uncertain impact on the global economy of recent international trade actions, we remain positive on the outlook for copper prices given limitations on supply and the important role of copper in the global economy. To date, we have not experienced a decline in demand for our products, but will be prepared to adjust our plans if necessary to respond to market conditions.

I guess all is well. "What you're seeing and what you're reading is not what's happening."

Here's what's happening to the good Doctor. A bit of whistling past the graveyard. Ya think.

Thought For The Day - 22 July 2018

'60 Minutes' is in re-run mode, so we've just seen the piece on Hubble. I'm a sucker for such science. One might wonder whether The Manchurian President gives a hearty shit? Probably not. Real Americans don't care about real science.

Thought For The Day - 18 July 2018

Dear Dear Leader:

It's not about how kissy face you are with Vlad the Impaler, or other dictators; it's about doing what's best for the USofA. Sucking up to Vlad may get you your Trump Tower Moscow, but that's not in the USofA best interest. And, what's this about the SS blocking subpoenas for Jared?? So, I guess you've decided that The Family is above the Law?

Thought For The Day - 16 July 2018

Well, given the events of today, now would be the right time to apply to the Small Business Administration for a fat loan for my start up, The White Boy Brown Shirt and Jackboot Co. Ya think?

Quant's Hubris - part the second

"Regular reader, by now, knows one of the mantras: "the bane of the capitalist is capital". Meaning, of course, that using capital to get rich by substituting machines (hardware and/or software) for people reaches a tipping point. Not just the wall of diminishing returns, but the abyss of unremitting sunk cost. That's just a fancy way of saying that automation methods become more expensive, as unit cost."

Thus begins Part the First (not then known to be yet another serial) of the capitalist's dilemma. Capital, the real physical kind at least, makes its value-add either (or both) by replacing labor while keeping output static, or by increasing output with the same labor. The problem for the capitalist is that as automation (not to mention robotics) moves ahead, labor is gradually (or instantly) removed, thus removing yet more folks from earning and no further benefit from labor substitution. The only way for the capitalist to win when the labor component reaches that tipping point, is to push more output with all those magnificent machines. But can that be done as labor continues to be ejected? Fewer folks earning, whatever happens to GDP, inevitably leads to diminishing demand. Macro, anyway. The reason there's a fraction of the coal miners today vis-a-vis 1940 is not the EPA or other effete bureaucrats, but massive changes in how coal is mined. More machines, less underground extraction (aka, hill topping), poof! There went the jobs. The Kenyan President had nothing to do with it.

Quite the same thing has happened in general manufacturing. First, New England manufacturers departed for the labor antagonistic South. Still aiming to sell to the remaining higher wage North, of course. Thence to Mexico and Central America and Caribbean. And thence to Asia, China as poster child.

There's been a paper making the rounds of the innterTubes for a while now, and makes another appearance today. The in-your-face number is $8.46 as the China specific value-add to an iPhone7. Naturally, one can go find whining that such a number is way too low, but that's not the main point of this missive.

The main point is that amount of direct labor in making an iPhone is teeny, no matter the dollar value. Most of the value in such things is delivered by automated processes; almost no humans touch semi-conductor in production these days. Robots, even. And, of course, China didn't steal American jobs, Steve Jobs and his friends sent them away. And, of course, Apple's source isn't even a Chinese (the big one on the continent), but from that little island called Taiwan.

The authors, without resorting to irony (I would, fur shur), say that Foxconn got about $3,000,000,000 (or may be $4,000,000,000) to make a plant in Wisconsin. Welfare queen. Taxpayers shouldn't pay for sports facilities, either, but that's another show. If you want a rundown, here's one.

To land the massive Foxconn factory, Gov. Scott Walker has committed the state to paying more than eight times as much per job as Wisconsin will provide under similar job creation deals struck last year, a Milwaukee Journal Sentinel analysis has found.

So, the next logical question: does capital hang around after such incentives end? Way back in 2012, the Failing New York Times published an extensive piece on corporate extortion. Worth the read.

A more caustic review, and newer, is here.

What's being discovered, but only occasionally acknowledged, is that the farm-to-factory paradigm of the 20th century no longer holds. Back then, factories absorbed displaced farm hands since skill level wasn't an impediment. Today, we've two problems: 1) new jobs are a fraction of those eliminated, and 2) new jobs simply can't be done by those displaced.

The answer, of course, is socialism, wherein the net winners compensate the net losers. GDP grows, demand is maintained, and technology can continue. If technology reaches a point where it serves only to eliminate macro-demand, it's game over. Reducing price through cost reduction of automation is meaningful only to those who remain with income sufficient to afford the new, lower price. As income concentrates, the number of demand units, aka people, diminishes. Jay Leno may have hundreds of old cars, but that doesn't do much for Ford or GM.

RC and A MoonPie

One of Dr. McElhone's more fun adages went, sort of: "breakfast is an RC Cola and a MoonPie". At the time, I don't think I'd ever seen a MoonPie, New England and all that. Just to confirm, I consulted The Wiki, happily discovering I remembered correctly. The little grey cells aren't all done.

There is a custom for eating Moon pies with RC Cola, although the origin of this is unknown.

He also had a long held antipathy for pie charts. That's more common these days. Thanks to the folks at MicroSoft we get an R version of a different kind of "pie" chart. Not only is it a really effective way to present data, but look closely. Orange Julius Caesar is gulling you. Again.

I Still Hate Neil Irwin - part the eleventh

This time, just go read the piece. As Crooked Hillary said, her votes came from the counties that produces 65% of GDP. In other words, well fed, well educated, healthy folks do better. As pointed out here many times, the pool of white grievance is the result of unfed, uneducated, unhealthy fish belly folks voting in governments which grind them under the boot heel. And, of course, they blame Democrats. Low information voting at its finest.

Just go read the piece. I will note that Virginia, led by the DC suburbs, is throwing off the burden of Dixie. West Virginia, not so much.

Individual proposals aside, experts haven't formed a consensus on how to make economically moribund places feel more like economically dynamic ones. But it is clearer than ever that this divergence explains much of what ails the United States' economy, and just maybe its politics, too.

Don't Let the Big Chunks Get Stuck

Over the years there have been commercial zero gravity rides. Whether NASA or otherwise, the name vomit comet applies. I imagine it's quite unsettling. Tender readers will recall the numerous times these missives have pointed out the coming rate inversion (that missive nearly two years ago) will have dire consequences. At one point, I offered up that when it happens it will snap your head off. Blow big chunks. Or something like that.

At long last, the mainstream sees fit to write about it. Took ya long enough, boy.

The Money Quote:

If enough investors begin to grow concerned about a recession, they will most likely put more and more money into the safety of long-term government bonds. That buying binge would likely help flatten, or invert, the yield curve.

Then people will write articles about the curve's sending a stronger signal on recession. And that could, in turn, drive even more people to buy into long-term bonds. Rinse. Repeat.

The fact remains, that American capitalists long ago ran out of new ideas how to spend all those trillions of Uncle Sugar Bucks. Risk aversion is just the polite way of saying they're greedy idiots. They've pissed away the additional trillion they got from Orange Julius Caesar on share buybacks, M&A, and dividends. None of which improve productivity, wages, or employment. Fact is, historically, M&A in particular has been a job destruction exercise. MAWA!!