The Good. The Super. The Supreme.

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

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

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

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

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

Blocking and Tackling

Yet another piece on ad blocking. It even contributed this week's preamble entry. What the ad pushers, and ad buyers as well, don't want to admit: selling just views or eyes or impressions is just what newspapers and magazines have done for centuries. The web, it's zealots claimed, had a better way. But, where's the innovation? Ad pushers are just lazy. The tech to identify actual buyers of the adverted widgets exists. Yes, the number of eyes who look goes down, but all those (humble self included) who ignore ads are a waste of time and energy in the first place. Why do you bother? And do you really think your mumbling is so much more informative than Wikipedia? We don't need no widgets from your adverts. Long text ads in the the manner advocated by David Ogilvy are rather impossible:

In 1955, he coined the phrase, "The customer is not a moron, she's your wife" based on these values.

Of course, the innterTubes particularly on teeny phone screens, aren't a very good place for such adverts. Not to mention that all that ad cruff that turns a cable modem connection into a 1995 dialup experience. The tragedy of the commons, writ large.

"The temptation is to block these people who honestly aren't going to respond to ads anyway."
-- Ken Fisher, editor in chief ArsTechnica

As mentioned in an earlier missive: if the likes of Fisher have their way, the web will become the playground of just the 1% who have the moolah and inclination to buy silly widgets.

The Tyranny of Average Cost, part the ninth

The Tyranny of Average Cost™ has morphed into a bugbear in these endeavors. One place where the Tyranny is manipulated to the benefit of the few with cost to the many is Pharma. I've mentioned a few times that Pharma has been pushing Orphan Drugs, based on periodic reporting. Orphan drugs, by FDA fiat (from statute), allow Pharma to charge monopoly pricing on, allegedly, small diseases.

Now comes some numbers confirming the anecdote.

Last year, the agency received a record 472 requests from companies to have their medicines designated as orphan drugs. And the FDA agreed to award 354 designations, which was a 22 percent increase over 2014.

The justification for the Orphan Drug Act amounts to bowing to The Tyranny of Average Cost™.

In a recent paper in the American Journal of Clinical Oncology, a team of researchers argued that drug makers are exploiting loopholes that allow them to widen the market for such drugs and distorting the original purpose of the law.

Ya think? The not always understood gotcha: once approved, a drug company can "educate" physicians to use any drug for any purpose. There are restrictions on how such "education" is implemented, but they're not much of a barrier. Rats manage to get through the teeniest crack.

Tears of A Clown

"He who laughs last didn't get it"
-- unknown wag (although Bierce or Mencken, could be)

Forbes is finally chuckling. For years it's been obvious, and frequently lamented here, that shipping by the tonne by rail is at least an order of magnitude cheaper than by the each by air. Amazon can eat the cost difference for so long. So, stock the B&M stores with the high volume movers, whether books or inflatable girl dolls or diapers brought in by low cost transport, leaving the low volume stuff in some of the fulfillment centres, and charging real transport cost. Where else is the buyer going to get a left handed nostril cleaner? Hmm?

We believe that by opening physical stores, Amazon might be looking to provide a more personal shopping experience to its consumers, reduce shipping costs by providing a store pick up facility and integrate the online and offline shopping

Pity the Poor Bankster

Well, pundits are finally getting it: they ain't much return in real investment.

Central banks have kept interest rates low to stimulate demand for loans. But loans with low interest rates are often less profitable for banks. As a result, banks may then lend less, which may then reduce the overall impact of low interest rates on the economy.

Unfortunately, but not surprising, the reporter (and, one might presume, his sources) ignores the other sides of the situation. First, corporations can sell bonds directly, thus benefiting from low interest rates. Second, if business generally had some idea of how to grow organically, low rates lowers the necessary return from investment. That was, after all, the notion behind QE (and successors): business will invest more if the internal rate of return of real investment only has to pay back 2 or 3 percent on borrowing. But, of course, corporations packing away trillions in retained profit aren't going to borrow to invest. They have been borrowing to pay dividends, buy back own shares, and buy competitors. Invest? How childish.

Dee Feat is in Dee Flation, part the thirty first

Well, the shit keeps hitting the fan:

Treasuries Rally on Risk Aversion

U.S. Treasuries are starting the week on a strong note as European equity indices move to multi-year lows and the German 10-year Bund yield declines 5 bps to 0.25%. The S&P 500 is indicating down 1.14% to 1,856.5 and WTI crude is down 2.85% to $30.01/bbl. The U.S. Dollar Index is up 0.19% to 97.22 and gold is up 1.75% to $1,178/troy oz., a fresh multi-month high
Yield Check:
2-yr: -2 bps to 0.70%
5-yr: -3 bps to 1.21%
10-yr: -3 bps to 1.81%
30-yr: -2 bps to 2.65%

briefing.com 8 Feb 2016, 7:38am

Deductive Reasoning

Among the most interesting, if heinous, ideas of the 1% is that healthcare is just another consumption good, and if "we" make it more expensive, then people will spend less on healthcare. And the rich will get richer, of course. The notion, of course, is nonsense. Only the 1% could ever afford tummy tucks and silicone boobs and such. The rest of us only seek healthcare when something bad happens. There have been studies (you can find them, if you're interested) which find that preventative healthcare makes no difference to overall health of a population. That should be obvious: how many health problems do you know of that show up in an annual (or biannual) physical? Vanishingly few.

One of the core ideas of the save-money-by-making-healthcare-expensive is high deductible plans. Again, the notion that such plans are both less expensive and offer better health is grounded in the notion that the 99% are visiting doctors like corner ice cream shops. Of course not. Sure, there are a few hypochondriacs, but the gross effect is to deny vital healthcare when it's a matter of life or mortality/morbidity.

Today is a report on a study bringing some data to the issue. I expect you'll find it illuminating.

The hospital offering the $3,000 M.R.I. might lose enough business that it will lower its price.

I picked that particular sentence, since The Tyranny of Average Cost™ is generally couched in terms of what happens to the price of MRI scans if far fewer are done. The notion that MRI scans are highly price elastic makes no sense: the cost is almost entirely amortization of the machinery. There's not much else to pay for. Fewer MRIs at $3,000 mean that the MRI scan now costs $4,000 or $5,000, depending on how many are removed from the accounting.

Anyway, a large, unnamed company instituted a high deductible plan, and was followed by some academic researchers.

Amitabh Chandra, an economist at Harvard, and one of the researchers, said he was convinced the study would prove the value of deductibles, at least for well-off and well-educated workers.

He was wrong.
...
Mr. Chandra said he was no longer convinced that deductibles turned patients into good consumers. "The best case was the theoretical case," he said. "I was all for high-deductible plans before I wrote my paper."

And, of course, the punchline is stated explicitly:

"There's essentially nothing they can do to prevent the likelihood they'll have high-cost health events," [Dr. Peter B. Bach] said.

Well, just die early. Which is the whole point, of course.