Data Data Everywhere, nor Any One to Trust

So, let's get in Mr. Peabody's Wayback Machine, and visit econ near its beginning, 1776. The field was then known as 'political economics', reflecting that Damn Gummint policy has both direct and indirect effects on the nation's economy. And, if your economy is big enough (the United States of Alabama, fur instance) or deeply embedded enough (OPEC, et al) in the global system, then all nations.

And so it was, until Samuelson screwed things up by plastering political economics with a slathering of mathematical lipstick. Then his colleague, Solow, went ahead and did much the same with math stats.

Unlike natural phenomena, which play by God's rules (more or less immutable; until we find we've deduced one or so incorrectly, see Einstein), humans write the rules of economies. And, of course, in most cases the stronger players write the rules on their behalf. And, so economics lost its way. They/we might bigly benefit from a text by a couple of real maths, von Neumann and Morgenstern on Game Theory:

Richard Stone (1948) Asserts that Unquestionably, for economists this book is the most important contribution that has appeared since J. M. Keynes's General Theory was published in 1936. It is concerned with the behaviour of individuals, and the coalitions which they may form in attempting to better themselves. It is directed therefore to the kinds of problem that are met with in the theory of value, and especially those that arise under conditions of duopoly, imperfect competition and the like.
[my emphasis]

As most know, econ is divided into at least two distinct types: micro and macro. The former generally deals with problems of The Firm, and the latter with problems of The Whole Damn Economy, and by default, what the Damn Gummint does, or doesn't do, to affect the nation's economy as a whole. Our Dear Friend Krugman is of the latter tribe. As am I.

The overriding problem for the macor tribe is data. Most of it is shaky, at best. Manipulated at worst. And, not always by malfeasance. As mentioned in these missives from before they existed, much of the macro data is samples. And, of course, sampling always has error; there's a good bit of theory about that in any math stats sampling text. And, of course, it's been widely documented that much sample data at the national level has been falling in response rate. On the whole, one might surmise that a data-driven macro policy agenda is on thinning ice. (Ayatollah 49% Don^© is licking his chops.) Take the recent oddity with the inflation number: our friends in the Damn Gummint put a foot on the scale. I guess they figured no one would notice.

Deep inside its monthly inflation report on Friday, the Bureau of Economic Analysis said that the cost of legal services rose 1.8 percent in January. That was an unusually large increase, but not nearly as big as the double-digit gain that some forecasters were expecting.

The reason for the divergence: The agency, which is part of the Commerce Department, had changed the source of its data on legal prices, relying on wholesale prices from the Bureau of Labor Statistics rather than the consumer price data it usually uses.

[T]he adjustment was enough to shave roughly a tenth of a percentage point off the monthly change in the core Personal Consumption Expenditures price index.

Which brings us to the obit of an unknown, to me anyway, economist, Christopher A. Sims. Who the hell cares about an obscure econ? Because he was emblematic of the curse of macro data in economic analysis.

Though statistical models of the economy improved, they still couldn't always provide reliable forecasts or guidance for policymakers. A notable failure was the 2008-9 financial crisis, which few economists saw coming.

Ahhh. The ones who did, and often not 'economists', knew that macro results are always, within non-primitive societies, driven by the Damn Gummint's laws and regulations. Some times by intention, and some times by inattention. What those who figured out where the USofA's economy was headed knew what Blythe Masters had unleashed. With no guardrails or barriers or laws or regulations to stop the tsunami from killing the global economy.

She is widely credited with creating the modern credit default swap, a derivative used to manage credit exposure to underlying reference entities.

Here's the CDS:

Some general criticism of financial derivatives is also relevant to credit derivatives. Warren Buffett famously described derivatives bought speculatively as "financial weapons of mass destruction." In Berkshire Hathaway's annual report to shareholders in 2002, he said, "Unless derivatives contracts are collateralized or guaranteed, their ultimate value also depends on the creditworthiness of the counterparties to them. In the meantime, though, before a contract is settled, the counterparties record profits and losses—often huge in amount—in their current earnings statements without so much as a penny changing hands. The range of derivatives contracts is limited only by the imagination of man (or sometimes, so it seems, madmen)."

In essence, CDS et al, are just gambling vehicles which allow unconnected parties to bet on the health, or lack thereof, of companies. As the Great Recession proved, at values far in excess of the companies targeted. One might call the CDS as short-selling on one part LSD and two parts steroids.

So, was Dr. Sims an evil genius? Not entirely sure. He did get the nearly-Nobel in econ, though.

Thought For The Dau - 11 March 2026

If you really believe that blowing up an elementary school was a mistake, well here's the truth:
He's a fucking moron.
-- Rex Tillerson/2017

As many have opined: cruelty is the point. Blowing up an elementary school is just what Ayatollah 49% Don^© has in mind. We're the cops of the world, and we'll kill whoever we want. A malignant narcissistic psychopath on crack.

He admitted it on the record

Asked in a wide-ranging interview with The New York Times if there were any limits on his global powers, Mr. Trump said: "Yeah, there is one thing. My own morality. My own mind. It's the only thing that can stop me."

If you believe he has any morality, then you're a Rex Tillerson person, too.

Thought For The Day - 6 March 2026

Now that BLS has told the truth: Ayatollah 49% Don^©'s self-aggrandizing bullshit has put the employment situation in the toilet, 92,000 job loss. He He He. Will the current (interim) director, William J. Wiatrowski get fired, too?

Reefer Madness [updated]

It was back in 1936 when "Reefer Madness" was produced. Now we have the modern version: "FDA Madness". Under the misdirection of Prince Bobby, it's a gang that can't shoot straight.

One of the latest fiascos is about Huntington's Disease. If you're an Olde Folkie, you surely know of Arlo Guthrie and "Alice's Restaurant" who was exempted from Vietnam because of the littering offense told in the song. Bet he didn't know that would happen. His father Woody, had (what was then called) Huntington's Chorea. Woody died in 1967. It is progressive and fatal and is yet without therapy for the disease directly (some symptom therapies exist). Two of Woody's daughters died of it. His mother died of it, from whom he inherited the disease.

It is classified as a Rare Disease, and FDA, at least titularly, has recently loosened the requirements on therapies for Rare Disease. uniQure is a drug company in the Netherlands and previously in Lexington, MA which has been developing a gene therapy. They recently published the results of a trial of the therapy, and claimed that the therapy reduced disease progression by 75% after 3 years.

Enthusiasm reigned and the stock price soared. Then FDA went on the warpath against both the therapy and the company. Now, the WSJ has a report, anonymously sourced, that FDA calls uniQure liars and the therapy worthless. Being the WSJ, one must be subscribed to read it up.

Federal Health Officials Attack Rare-Disease Drug, Say Company Lied

Fortunately, Fierce Biotech has a report which covers the main points of the battle betwixt uniQure and FDA.

The sticking point is simple: uniQure claims it has, in writing, approval for the trial while this FDA source claims that it never gave its approval and requires a (double?) blind, placebo controlled study for approval. Even before the recent 'loosening' of Rare Disease study requirements, given the small patient population typical of Rare Disease, running such trials is difficult; small patient pool and reluctance to take the chance of NOT getting the therapy. Moreover, in fatal diseases with no other therapy, is it ethical to demand standard structure trials? Mayhaps not.

The Fierce Biotech report mentions other Rare Disease

"Moreover, FDA, as a general rule, never makes such assurances. FDA will always say, 'Well, we have to see the data when we get it.'"

And that's, at best, a half truth. There are discussions with FDA about trial design as a matter of course. FDA has a separate, formal approach, called a Special Protocol Assessment. It's a semi-fixed agreement on the conduct of a trial, however FDA has been known to toss out an SPA if they change their mind.

As I was typing this out, the wonderful Adam Feuerstein made (a free!!) account of the fiasco available at STAT. Enjoy.

[update]
Well... that didn't take long. Vinay, exit stage right!! While, as I type, no one admits that he's the miscreant wrt uniQure, sure looks like the head of Usual Suspects.

The Totally Unhinged - part the third

It's considered bad form to begin an essay with "I...", so let's just say that I'm not surprised by the latest episode of the Totally Unhinged. Absolutely fucking predictable. When you're dealing with a degenerate psychopath, expect the most Unhinged.

President Trump said on Thursday that he should have a say in choosing Iran's new leader, in the most explicit statement he has made yet about his vision of the U.S. role in creating a new government in Tehran.

The NYT report references an Axios report which states

President Trump told Axios in an interview Thursday that he needs to be personally involved in selecting Iran's next leader — just as he was in Venezuela.

It would be one thing to assert that the USofA, working/negotiating with Iran's appointing mullahs should have some input, given that we blew up Dear Leader, and apparently, the second and third tier Ayatollah 49% Don^© choices. It's takes a boatload of chutzpah to demand his own self be the Decider.

And, by the bye, the two previous Supreme Leaders were chosen by a rotating council of 88. Kind of like our Electoral College. Ooops.

One might expect that Ayatollah 49% Don^© will, eventually, come around to demanding that Shah, Jr. be the New Dictator. After all, Shah Sr. was such a good fit with the oil and gas oligarchy.

And, of course, if the mullahs demur, Ayatollah 49% Don^© can just blow them up, too.

I don't know... what's the Islam for chutzpah?

The Totally Unhinged - part the second

Anyone with a functioning brain knew that The United States of Alabama had entered a New Dark Ages with Ayatollah 49% Don^©'s ascension to the Throne of Washington. The crowning of Prince Bobby at FDA was among the Unhinged appointments which led the way.

Now, the wonderful Adam Feuerstein posts a perfect example of Acts of The Totally Unhinged

The Duchenne muscular dystrophy [DMD] patient & advocacy community keeps a gene therapy and multiple drugs on the US market, stopping the FDA from taking action, despite failed confirmatory clinical trials showing no efficacy and questionable safety.

The Huntington's disease patient and advocacy community can't even persuade the FDA to allow a filing of a gene therapy, despite a positive clinical trial.

A bit of background. Under pressure from many patient/advocate communities to loosen up the approval process for rare and/or unmet needs, FDA did adopt some 'looser' regulations. DMD was among the recent cases where highly questionable drugs gained approval.

What Feuerstein is referring to is FDA's two-faced behavior: really stupid DMD drugs get approved on lousy data, but Huntington's developers get cut no slack even with actionable data. For myself, I smell the rancid odor of Baksheesh.

Thank you Ayatollah 49% Don^© for your attention to this matter.

Goldfinger

The Lamestream Media is all agog: what is Ayatollah 49% Don^©'s point in starting a war with Iran? He of "Peace President" propaganda?

"Wag the Dog" is all you need to know. That was specifically about a sex scandal, and so today. But the reason specific to today is the Rich Guys' need to extract value from The Rest of Us. And, in this case, fossil fuels, Ayatollah 49% Don^©'s major fixation. If the Strait of Hormuz gets really clogged, or essentially shut down... well Goldfinger didn't go to Fort Knox to steal the gold, but to leave it a radioactive dump for all time. In Ayatollah 49% Don^©'s mind (such as a lower brain stem might be), the future is burning stuff. American based stuff becomes, thus, more valuable if other supplies are sequestered. Bank shot.