2:00PM Water Cooler 2/5/2018

By Lambert Strether of .

Readers, I must beg your indulgence to make today’s Water Cooler an open thread; I got bogged down in trying to dope out what the heck Dimon, Bezos, and Buffett are up to in their new and extremely vaguely-defined health care venture. (I also ran out of storage space on my Mac and Yahoo Mail — I know, I know… — where are my sources are, decided to act up.) So if anybody knows of a mail program that’s free, includes the ability to direct mail to folders via macros, has good search tools, and the good iOS app my workflow demands, I’m open to it; but I’ve tried Yandex, and it’s not good enough, especially its app. –lambert

* * *

Sigh:

* * *

Talk amongst yourselves, but allow me the pleasure of doing a minor happy dance that at the Super Bowl, for once, the good guys () won. That’s a very good start for 2018. (Disclosure: I lived in Center City Philadelphia for several years — right near the Ritz, in fact — and really did come to love it. I also lived in Boston for seventeen years, and didn’t have one twinge of nostalgia for it when I left, although one can hardly blame the Patriots for that.)

So herewith some random, post-game Tweets:

The Bill Belichick postgame press conference is the closest we’ll get to seeing Henry Kissinger put on trial for his crimes

— Dan O'Sullivan (@Bro_Pair)


So there is justice. And then there are the fans:

Celebrating fans brought down awning outside Philadelphia's Ritz Carlton hotel after last night's historic win.

— NBC News (@NBCNews)

Sure, the Ritz, but why stop there? What about the Wharton School and the Philadelphia Fed?

He’s got a point:

Can’t wait for the Hayes to trash Philly fans for trashing the city. Surely will be popping up on to call them thugs and to decry the lawlessness.

— rolandsmartin (@rolandsmartin)

I mean, the Ritz awning jumpers weren’t dragged away by Imperial Storm Troopers, right?

And then this call, ZOMG:

Fourth down, , Doug Pederson calls this play.

— Philadelphia Eagles (@Eagles)


Somehow, I don’t think the bearded Patriot dude on the sidelines is saying “How do you figure…”

* * *

Readers, feel free to me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, with (a) links, and even better (b) sources I should curate regularly, (c) how to send me a check if you are allergic to PayPal, and (d) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! If you want your handle to appear as a credit, please place it at the start of your mail in parentheses: (thus). Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant:

This is another hopeful crocus, which I believe I have run before, but all the plant pictures are trapped in my mail as well… (This is in fact what crocuses would look like in my garden after the snow is gone, because I mulch with dead leaves.)

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

85 comments

  1. diptherio

    I think this might catch the interest of NC readers. It’s a rather novel strategy for converting large, publicly-traded companies into worker-owned cooperatives. The funding mechanism proposed involves out-of-the-money put options. Financier types encouraged to chime in.

    How do the employees of a business become owners of a worker cooperative? The first step is for the workers to organize themselves and agree to start their own worker cooperative business. Second, they would publicly state their intention to start their own business to avoid insider trading. Stating this in a small, print-only publication would create an informational asymmetry where the plan was not widely known. Even if the plan became widely known it would be impossible to judge the credibility of the statement. Third, the workers would decide to resign simultaneously on an agreed date. Before that date they would engage in financial transactions which would become profitable if a business suddenly lost its employees. These transactions could be carried out individually by the workers or through the new cooperative business entity they had created.

    The workers would then simultaneously resign in a very public and visible way to generate a market reaction. After they quit they could exit their positions profitably. The proceeds from these transactions would then be used to finance their new business.

    1. jsn

      Assuming solidarity and perfect coordination, the workers of the world are unstoppable!

      Of course, historically both of those assumptions have proved very heavy lifts.

      If this tactic caught on in a moment of financial panic like 2008, it could take on a powerful life of its own while the shareholder class was preoccupied with their own worries. This is a moment to plan for!

    2. Paul Cardan

      Thanks. That’s interesting. The author seems to be arguing that straightforward attempts to establish worker coops are unlikely to succeed. If takeover involves purchase of shares of an existing enterprise, the price of shares is likely to plummet, due to the fact that workers will henceforth be taking all the profits. Since it’s irrational to purchase shares known to be of declining value, workers won’t. And so the author recommends a rather devious, roundabout strategy for acquiring ownership, one that doesn’t require purchase of presently high-valued but soon to decline shares.

      But even if workers manage to pull it off (which, as noted above, is a big if), wouldn’t it still be difficult to acquire additional capital? Investors generally expect returns on investment, and thus a cut of any sur the enterprise generates, a cut, then, of what might loosely be called profits. But the workers are taking all of those. And what if they don’t? What if they agree to what amounts to a loan (to be repaid with interest) from those in a position to lend? Well then, they’re working for people who don’t. Wasn’t this what we were trying to get away from?

      Perhaps the problem here is that, by the logic of the market, coops are irrational, period.

        1. Paul Cardan

          I like cooperatives too. Would love to see more of them. I also wish socialists would give them some more thought, rather than dismissing them based on some things Rosa Luxemburg said about them, in passing, over a hundred years ago, in a different context. More thought’s needed, I think, because it seems unlikely that relatively large numbers of worker cooperatives will be sustainable, let alone flourishing, before major changes are made to the manner in which markets work. This has to do with the conditions on which capital (in the ordinary sense of the term) is made available.

    3. Fraibert

      You’d have to run this financial engineering through a gamut of specialist lawyers, but I’m skeptical that it’d be cleared.

      One issue I personally see is that it is possibly hardcore price fixing in violation of the Antitrust laws. My understanding is the basic idea here is a coordinated agreement to undertake a mass resignation for the purpose of lowering the overall cost of purchasing the business. In other words, you have an (1) agreement that (2) has a direct effect on price and (3) which is specifically intended to have such effect.

      (You might ask why union contracts don’t similarly violate the law. The answer is because Congress has separately authorized unions and employers to set terms of employment, including wages (labor prices). If these labor laws didn’t exist, then a union contract would almost certainly be a violation of the Sherman Act.)

  2. Stephen V.

    Speaking of Healthcare ! ICYMI, as the Twitter says, here is one of my favorite Lambert pieces, from Balloon Dog to Flying Cow !
    [snip]
    or Trump, as we have seen, what matters is that there be a deal, and that the deal possess, oh, a “soft and buttery” surface. Or a shiny one. Or whatever, the surface has to be “great,” and sellable as great. What a “great” surface would look like — except Medicare for All — I don’t know. It seems unlikely that either party has what it takes to devise — again, except Medicare for All — a surface that induces a “very luxurious and a very exciting feeling.”
    http://cfdtrade.info/2017/10/balloon-dog-orange-art-health-care-deal.html

    1. ChiGal in Carolina

      It will all be about taking the human interaction out of health care–so costly! so inefficient! Many studies have shown that at least in mental health, the RELATIONSHIP is at least as important as the modality.

      Also sadly have to report that I went to aTown Hall for our MoC David Price who, though he finally signed on as a cosponsor of HR 676 has no intention of championing it. I got to ask my question, throwing in a few facts from a recent APA study about levels of stress re health insurance broken down by incomes over and under $50k. Asked how many in the room could relate, and About half the people raised their hands. The audience skewed older, and I realize I should have asked a follow-up: How many who DIDN’T raise their hands are on Medicare?

      Anyway he babbled something about fixing the ACA and then lowering the age to opt in at 55, which of course will not address the real issue: getting the profit motive out of health care.

      But really the most shocking thing to me was that at least half the time was sucked up with questions from people young and old asking about RUSSIA RUSSIARUSSIA.

      Damn!

  3. dcblogger

    In this Michael Brooks Show clip, Michael Brooks and documentarian Anthony Lappe discuss the role the CIA played in creating the opioid crisis.

  4. ioga

    “Lewis’s conclusion is similar to that of scholar Cedric Johnson (who is cited as the competing view to Alexander in the report). Johnson, a professor of African-American studies at the University of Illinois at Chicago, argues that “contemporary patterns of incarceration and police violence are classed in a manner that is not restricted to blacks and whose central dynamics cannot be explained through institutional racism.” Instead, Johnson sees the modern prison state in the United States as a means by which Americans who cannot find decent employment and living standards are discarded.”

    1. JohnnyGL

      From 1st story:

      His best friends from high school work as cab drivers and busboys or in Pathmark, a major supermarket chain, and he doesn’t get invited to poker nights at their houses. “None of them came to my wedding,” Faridi says sadly.

      Some definition of success….get money and power….lose all your friends.

  5. Bruce F

    I came across about water, farming, and politics in California that I wanted to share.

    Everyone is acting “logically” but the whole thing is insane.

    Reminded me a little of Chinatown.

    1. jo6pac

      Thanks long but worth the time. I’ve traveled in that are a few times. This the only thing the left out.

  6. Kevin

    Lessons learned on turning 45. “Politics is not the most important thing in the world. It’s just the one people talk about the most. Your spouse and others around you matter more to your happiness than the government does.

    If we want to despatch spacecraft to distant parts of the Universe carrying evidence there is (or was) intelligent life on Earth, what should that evidence be? It’s hard to imagine that any symbolic message will be understood in isolation.

    1. ewmayer

      Thanks for the link – coincidentally, last night my all-†ime favorite episode of Star Trek:TNG, “The Inner Light”, was on the H&I cable channel. My only quibble with said episode is the rather weak generically-feel-good title; “Memento Mori” would have been much better, IMO.

      Being a math geek I disagree with the author of the piece re. Math’s universality – while certainly many advanced math subfields require heavy doses of an idiosyncratic shared symbology, it seems something as basic as the numbers, especially the integers, must needs be a universal concept, even if their symbolic representations are culture-specific. However, digital communications use 0s and 1s for a reason, and thus broadcasting pulsed signals makes conversion into base-2 numbers the only reasonable interpretation. Among the integers, various elementary arithmetic operations also make a good claim to being universal – we add 2 stones to a pile of 3 to get a pile of 5, for instance. Once we have suppemented add and subtract with multiply and divide, the related concept of numbers evenly dividing others (or not) also naturally arises – try to evenly divide 5 rocks among 2 cavemen, for example. Thus we get to prime vs composite numbers … anyhow, long story short, if one wishes to convey mankind’s state of technological – and thus social/organizational attainment in the briefest number of bits and bytes, using the exponents of the known Mersenne primes (primes of a very special form, strings of all ones in base 2) seems a very good way to go.

  7. Robert Hahl

    Some music.

    Fun Lovin’ Criminals – All For Self

    Over The Rhine – Daddy Untwisted

    Unity JAM – Tony Succar

    I was wondering what it took for a girl to break into that Unity band.

    Do it like a Dude – Collab Didi Negron & Teresa Morini

  8. DonCoyote

    “Security also lies in the value of our free institutions. A cantankerous press, an obstinate press, a ubiquitous press must be suffered by those in authority to preserve the even greater values of freedom of expression and the right of the people to know.”

    So opined Murray Gurfein, New York State judge, during one of the Pentagon Papers hearings. I quote this because I saw over the weekend, without knowing what the movie was about (I knew who the leads were), or much about the Pentagon Papers in general. {It’s about the Washington Post in 1971 when the Pentagon Papers were coming to light}. Specifically, I did not know that it was a Spielberg production, and that it was “rushed through” in less than a year. I think Spielberg is trying to disparage Trump and his “attacks” (“fake news”) on the mainstream media (probably a feminist shout-out too over a female owning a paper in the 70’s). However, interestingly (at least to me) he brings out several other themes that neoliberals like Spielberg find a little less appealing:

    1) Journalists should not be cozying up to the politicians they report on (Bradlee does a mea culpa for his JFK coverage, and Kay Graham, the Post owner, has to overcome her friendship to Defense Secretary McNamara, the commissioner of the Pentagon Papers). A lesson the MSM in general, and Hollywood and the Washington Post specifically, have forgotten.

    2) Whistleblowers are heroes, and the MSM should be supporting them, then and now. But somehow can’t affirm Snowden (the way they affirmed Ellsberg, the Pentagon Papers leaker) as a hero and someone who did the right thing (although Ellsberg calls Snowden a hero).

    3) The U.S. is probably the last country that should be outraged over (alleged) election meddling, when the .

    Anyway, it’s not a bad movie (I don’t think Meryl Streep does bad movies), but the messaging does get tiresome at times (not to mention the irony that America’s richest neoliberal now owns the Post and takes gobs of CIA money, so would never publish the Pentagon Papers today).

    1. a different chris

      >must be suffered by those in authority to preserve the even greater values of freedom of expression and the right of the people to know

      Not sure where he thought he was going with that. Why do those in authority want to preserve those values?

    2. Wukchumni

      Just a few posts up from this one is a story about Lynda Resnick, photocopying the Pentagon Papers for Ellsberg in 1971.

  9. djrichard

    Lambert, for indexing of emails and files, I highly recommend X1 search: . I call this thing my brain on paper – it is invaluable.

    I only use it for desktop search of email I’ve stored locally on my desktop machine (in outlook pst files) as well as local files. But apparently it can be used to index email hosted via the likes of Yahoo and Gmail (apparently by using IMAP). It can also be used to index files you have in the cloud.

    With this tool, I don’t bother putting things in folders anymore. Which is probably a bad habit. But folders are basically just another way to tag things and I usually find that there’s enough tagging that x1 search can pull simply by indexing the content of the email and files themselves.

      1. Lambert Strether Post author

        I’m not sure addiction is the right metaphor. For one thing, there’s one program that’s utterly essential to my workflow that is only on the Mac, and for which I have been unable to find an alternative: , a radically simple single pane outliner.* Ironically, Opal is a descendant of Acta, a “desk accessory” outliner for the Mac that originally catalyzed my ability to write, back on the Mac 512KE; Microsoft then proceeded to destroy the entire product category with its own horrid outiner in Word.

        I also have twenty years or so of muscle memory of Mac command keys, and so on — all enforced by the consistency of the Mac Human Interface Guidelines — an approach to standardizing UI/UX that the sh*theads who wrote iOS ignored. All that gets thrown away on another platform, so my productivity takes a hit.

        * I just looked again. ? Seriously? [vomits].

        1. argonut

          Free and with unlimited storage, maybe can offer what you need. Hover cursor over ‘tools’ in the header for iPhone and iPad Apps. My needs are simple, so I haven’t explored all of its features.

  10. WheresOurTeddy

    Re: Super Bowl

    The Detroit Lions will be coached next year by Matt Patricia, Defensive Coordinator for the Patriots, who has the distinction of being the only team in NFL history to give up as many TD receptions to the opposing quarterbacks as there were punts forced by their (nonexistent) defense. In the last 2 years his defenses have given up 69 points in the Super Bowl, and it took a miraculous comeback to win last year, and would have been another had they pulled it off this year. Enjoy, Detroit!

    This was literally the highest-yardage gained game ever in league history, playoffs or regular season. Brady is the first player to throw for 500 yards and lose EVER.

    The Patriots benched their best defensive back (who played on 97% of the team’s snaps this season but zero in the Super Bowl) and got torched by a backup QB.

    This will go down as the “why didn’t Malcolm Butler get to play?” game.

    I can’t say it any better than God can though: ^tfw&ref_url=https%3A%2F%2Fdeadspin.com%2Fajax%2Finset%2Fiframe%3Fid%3D-960353409944596480%26autosize%3D1

    1. PKMKII

      The Pats’ D has been mired in mediocrity for several seasons now, the Brady-Belichick offensive razzle dazzle has just obscured it. Last night made it only too clear, and as age inevitably catches up to Brady, it will only get more apparent.

    2. Katniss Everdeen

      Only ONE punt in the whole game–by the Eagles.

      More than one person remarked that the announcers did not seem shy about whose side they were on, referring to two of the Eagles’ touchdowns as “disputed,” and seeming to maintain until the bitter end that Brady would pull it off.

      Couldn’t help drawing an election 2016 parallel–experienced, aristocratic, status quo Pats against a “populist” Eagles back-up quarterback and an unconventional coach who was at the high school level 10 years ago.

      “Disputed” touchdowns. TWO of ’em doncha know.

      1. Liberal Mole

        Hilarious that two posts on my Faceborg were furious at the announcers’ obvious prejudice for the Patriots. Luckily we were in a bar watching a screen with very little sound and no subtitles.

        1. lyman alpha blob

          Heh. A lot of Pats fans including myself would swear that Chris Collinsworth is a Patriot-hating hack. All a matter of perspective I guess…

    3. The Rev Kev

      Hey guys, I would suggest a rule change for Gridiron in that for a player to score, he actually has to ground it like you see in Aussie football. To show you what I am talking about, there is a clip of 15 top tries at where you can see how this plays out in action.
      The advantage here is that it makes tries both more challenging and the game better. If not, then this will be the future of a touchdown in Gridiron-

      1. integer

        he actually has to ground it like you see in Aussie football

        Aussie football is Australian rules football (AFL), not Rugby. Are you from QLD? While Australia does have some domestic Rugby competitions, Rugby is an international sport. Sorry to nitpick. FWIW I agree with the vast majority of your other comments.

        1. The Rev Kev

          You’re right of course. I only used the term Aussie football as I didn’t want to go into the details of the differences between Rugby League, Rugby Union and Australian Rules Football which would have made too many people’s eyes glaze over here. That is what my comments are for!

    4. ambrit

      I followed the sub-tweets on down for a while and…this alternate universe thing has gone a bit too far.
      So much hatred…this line mostly from the “Dem” side. I can attest to there being a similar hatred aimed the other way from deplorable country.
      If this is the American zeitgeist, then we’re all well and truly headed for a massive bonfire, and maybe some guillotine action.
      Maybe a semi-documentary idea for Michael Moore, in collaboration with Werner Herzog: “Gangs of D.C.”

  11. Wukchumni

    I would have liked to see the Pats win it one more time, so Brady could retire instead of being the usual thorn in my side next season, playing in the same division as the hapless Bills, but he done run out of magic.

    1. Arizona Slim

      I can’t help thinking that Brady will stay in the pro game for too long. Think Willie Mays and baseball and you have the idea

      This would be a great time for Brady to walk away, but he won’t

      1. Wukchumni

        It’s not unusual to see a classical musician playing into their 70’s or 80’s, such as Earl Wild.

        Being a quadragenerian in the NFL-aside from kickers, is really pushing it.

  12. Duck1

    Did someone remove the punchbowl or has Powell, being a newbie, wrangled the animal spirits in the wrong direction? I guess the money waiting on the sidelines won’t be bitcoins.

  13. dcblogger

    I understand why the stock market is going down, but why now? Why not last year? Why not next summer? What was the triggering event.

    1. Jim Haygood

      There doesn’t have to be a reason. Probably the most important one is that the collective mood had gotten way too frothy. Some bullish sentiment indicators reached records last week.

      Objectively, rising interest rates reduce the discounted value of stocks’ future cash flows. The Fed started hiking in Dec 2015 and its plan for three more hikes this year is known to all.

      Why does it suddenly matter today? Maybe a monarch butterfly flapped it wings in Mexico and disturbed the force. It doesn’t have to make sense, and usually doesn’t.

      However, the pure fear at spike bottoms is sharper and easier to identify than the gradual frog-boiling of a long, rounded top. Blood in the streets brings sweet bargains.

      1. Wukchumni

        Any possibility the mere idea of the Fed taking action against a Unabanker other than the usual civil fine amounting to bupkis, caused the spiral?

        We’re talkin’ uncharted territory here, the past decade.

      2. FreeMarketApologist

        The big drop around 3:30 looks like a mini “flash-crash”, and may have been an overreaction from automated systems or nervous portfolio managers trying to lock in profits against a drop with a steeper slope downward. It corrected quickly, but the day’s downward trend continued to the close. Year-to-date Mr. Market is down only about 2%. Over a 5 and 10 year horizon the markets are still up over 80%. ( dividends!). Unless you’re a market timer, take a deep breath and go look at the flowers.

    2. SCM

      The catalyst was the release of a report showing higher than expected wage growth. This spread fears of inflationary pressure and possible headwind to figure earnings growth.

      1. Kurtismayfield

        It amazes me that a wage growth of 3% is such a threat to Wall Street that it loses 7% of it’s value in two days. The bubble may be just over, we will see how it goes tomorrow. A 700 point drop would be a ten percent cut from Thursday’s close.

      2. OpenThePodBayDoorsHAL

        That’s really telling if you think about it.

        “Oh noes, the plebes are starting to get some of our MONEYMONEYMONEY, noooo, I’m melting…”

  14. Jim Haygood

    Well, today’s 4.6% Dow smash was a hell of a welcome for Japewell’s first day at the Fed, before they’d even shown him the executive washroom.

    Traders’ mentality is to challenge the new Fed head with an immediate crisis to see whether he’ll blink. “A couple of POMOs to ease the pain, guvnor!

    Unlike stocks, both bonds and gold performed like champs. IEF, which holds 7 to 10-year Treasuries, gained 0.8% on safe haven buying. Likewise the old yellow dog (IAU) picked up 0.4%.

    With VIX at a towering 37 (it never stays above 40 for long), this may be the fabulous dip we’ve all been desperately waiting for. Despite today’s pratfall, Bubble III ain’t over yet.

  15. Wukchumni

    I heard the drink of choice in Dow Jonestown today, is kool-aid laced with loss.

    The reign of error has been taking credit for Wall*Street’s performance under his watch, but i’d imagine he’ll be quiet as a church mouse today.

    1. Jim Haygood

      … or else come out swinging:

      “Chuck Schumer and Nancy Pelosi crushed the stock market today with their malicious threats to shut down the government. They must be stopped! MAGA!”

      1. Massinissa

        As if a government shutdown a week ago would cause a mini-crash today of all days. Well, I guess we cant fault him for being able to stay on to his message.

  16. audrey jr

    I know little about the stock market other than the knowledge imparted here at NC via the commetariat. But I do know crooks and liars when I encounter them.
    Control fraud, which I do understand, is the only game in town.
    And Control fraud is walking around this nation arm in arm with best bud, RICO.
    I hope to see it fall like a salugi.

    1. Amfortas the Hippie

      that would be sweet…especially if it’s true what somebody said above that the little flashcrash was due to wages going up. I mean…come on!
      lol.
      Yves, et alia, have spy holes into the chicken house.
      You and I are necessarily outside of it, and I avoid it altogether(it smells bad).
      Days like today, the chicken house is in an uproar.
      but we cannot determine with any accuracy what all the commotion is about…throwing a rotten cabbage(good) or a live coon(bad) in there sounds almost identical from outside the chicken house.
      prior to lucking on NC, when the market burped, I had to run all over, read 50 things, then boil them carefully, in order to get some idea of what was going on….because I didn’t trust anybody to tell me the truth.
      It’s nice to have somebody(plural) with knowledge of such things that I am generally and consistently in agreement with on stuff I DO know a thing or two about.
      Makes life much simpler

  17. barrisj

    Amongst the various reasons offered for recent market plunges is “fear of inflation”, which includes rising hourly wages for the great unwashed. From 2.7 to 3% y-o-y..the horror of it all! In actual dollar terms, ave. hourly wage for Dec 2016 was $22.50, and so average wage increase from 2.7 to “inflationary” 3.0 petcent is 61CENTS v. 67CENTS per hour pay rise. So for an extra 6cents an hour increase, “inflationary” bells start chiming furiously and markets go into a deep swoon. Wages and salaries have lagged w-a-a-a-y behind inflation for so long that even the briefest of actual real increase can – inter alia – provoke market melltdowns is frankly hilarious.

  18. Jim Haygood

    Today was another interesting stress test of different asset classes. Let’s start with a 50/50 stock/bond portfolio:

    S&P 500 index …………… (4.11%)
    Bloomberg Agg bonds ….. +0.40%
    50/50 blend ………………. (2.24%)

    Now for Craazymon Fund:

    Junk bonds ……………….. (0.33%)
    Emerging mkt stocks ……. (3.47%)
    Gold ………………………. +0.39%
    50/30/20 blend ………….. (1.16%)

    Main point is that diversifying among asset classes cushions the blow when one of them (stocks) has a hissy fit. A secondary point is that investment grade bonds (Bloomberg Agg) rose in a flight to safety, while junk bonds fell slightly. But both kinds of bonds were more stable than stocks. As usual gold’s in its own world, uncorrelated with paper and keystroke assets.

  19. audrey jr

    In case you’re bored by the stock market failure(s) it seems there’s some grifting and financial cover-ups going on over at the offices of Newsweek:

  20. BenX

    I have suspected that the next market bust would be predicated by nothing. Everyone’s wondering what the trigger will be. What if it doesn’t need a trigger?

  21. rps

    headlines a 2nd dirty dossier compiled by Hillary Clinton insider and family confidant Cody Shearer. Newest documents reveal the dossier ended up in the hands of the FBI and “the Justice Department used it to justify a Federal Intelligence Surveillance Act warrant against former Trump adviser Carter Page.” A must watch video of Hillary fabricating (yes, I’m being kind) the FBI investigating Trump was not known to the public before the election (November 8, 2016). October 31, 2016, and November 1, 2016 proves otherwise. Hillary the fabricator is scrambling for higher ground or drinking her own kool aid.

    In the DM video, Trevor Noah of Comedy Central asks Hillary, “Now people say Hillary is there a difference between your team paying for the opposition research and Donald Trump’s people working with the Russians to influence the election. Is there a difference?” Noah tows the party line maintaining Hillary’s gospel in an unproven Russian Trump election conspiracy. Seems she’s hard at work discrediting the mounting evidence of the FISA memo and more documents to come.

    She says, “Serious people understand” in the interview. Paraphrasing We’ve got serious problems, and we need serious people. And if you want to talk about character, Hillary, you’d better come at us with more than a dodgy dossier from a British ex-spook claiming it wasn’t your idea but a republican donor before the primary. This is a time for serious people, Hillary, and your fifteen minutes are up.

    Oh what a wicked web we weave when we first we practice to deceive…How quickly Hillary’s web is unraveling and exposing her complicity and interference in an election to discredit a rival presidential candidate.

  22. Jim Haygood

    First apparent victims of today’s smash: a couple of inverse volatility funds. These funds hold short VIX futures. When VIX screams up as it did today, inverse funds take a hard leveraged hit.

    XIV closed at 99 today, down from 146 less than month ago. All well and good. But in after hours trading XIV is at 15 (fifteen), down another 85%. Another inverse volatility fund, SVXY, is down 80% after hours.

    Both XIV and SVXY are supposed to liquidate upon losing 80% of their value. But how? Overnight futures markets are thin, and there may not be offers for the massive volume they need to buy back. If VIX futures rise too far against them, these funds could go to zero or even wind up owing money to their prime brokers. BAD!

    This rhymes a bit with Long Term Capital Management’s leveraged crack-up in 1998, which propelled Easy Al Greenspan into extending a helping hand. Will today’s inverse volatility fund meltdown excite Japewell’s tender mercies?

    Stay tuned for tomorrow’s exciting episode of … As the VIX Burns.

  23. Pat

    In Kill Me Now news, Hillary once again will not shut up. To be fair, she is just icing on the cake as most of the rest of the conference line-up would also have me looking for the exit.

    The last couple of paragraphs, especially the last line of the article do show a little bit of editorial push back as I doubt they were part of the PR announcement that was the basis of the article.

    1. HopeLB

      Maybe some hacker from DefCon (there’s got to be some overlap!) will interrupt the remote, live video and have a Hillary Impersonator (maybe one who looks like Trump trying to impersonate Hillary?) showing off little sculptures she’s made of pipecleaners, barb wire, bits of world map, bits of bone, paper cut outs of glitter adorned Kissinger/Albright/Brennan/Clapper headshots and bullets. The Double Trump/Hillary Impersonator then explains to the Maker crowd, Sheryl Sandberg included, that these are not art projects but are actually artful, complicated 3-d flow chart diagrams of How to Make War, How to Never Leave a Trail, How to Start a New Red Scare, How To Play Pretend Dem,etc,.

  24. JCC

    I thought I’d share a recent email I received from my CA Congressman Kevin McCarthy:

    Thank you for letting me know of your support for net neutrality.

    Like you, I believe in a free and open Internet, where Internet Service Providers (ISPs) are transparent about their network management practices and do not block consumers to lawful services. However, I believe the Internet has flourished largely due to the government’s hands-off regulatory approach towards it, which has incentivized critical investment and innovation. Prior to the Federal Communications Commission’s (FCC) actions under the Obama Administration, the Internet enjoyed unprecedented growth, with roughly $1.5 trillion in investments into broadband network infrastructure.

    Under the Obama Administration, the FCC in 2015 implemented the Open Internet Order, which treated ISPs as utilities under Title II of the Communications Act of 1934, subjecting ISPs to an outdated regulatory framework designed for the monopoly telephone era. I am concerned this approach may stifle innovation, result in stunted investment, and decrease broadband growth, the effects of which are ultimately passed on to the consumer through increased prices and a less dynamic Internet.

    On December 14, 2017, the FCC adopted, by a vote of 3 to 2, an order to restore the regulatory framework that existed for roughly 20 years prior to the 2015 FCC action, and generally returned the regulatory authority over ISPs from the FCC to the Federal Trade Commission (FTC) and the Department of Justice. The new order will enhance transparency by requiring ISPs to disclose to the public information on their network management practices, such as blocking, throttling, or paid prioritization. I support the FCC’s efforts to restore a less-intrusive regulatory approach to the Internet and believe that by reducing the red tape, ISPs will be better able to find innovative solutions to congested broadband networks. I also believe that any abuses should be dealt with swiftly by the FTC, and if need be, through legislative solutions in Congress.

    As your Representative in Congress, be assured I appreciate your comments and will monitor how this order is carried out. I encourage you to continue to share with me your thoughts on issues that are important to you.

    I replied back to him saying “as an IT professional of strong Irish Heritage, as I assume you also have based on your name, and with a strong understanding of how American Monopolies function, which I assume you obviously do not have, I commend you on your ability to toss out the blarney and bullsh!t”

    I then picked apart to the best of my ability each one of his “points”.

    I knew it was probably a complete waste of time ing him in the first place, but I didn’t think Mr. McCarthy would blatantly show that he believes we are all just a bunch of ignorant putzes.

    1. Wukchumni

      McCarthy is my congressman too, and for whatever reason, his lackeys have showed up in town for meetings and to hear from his constituents, and then absolutely nothing ever comes of it. A complete waste of time.

      The first meeting had 30-35 people, the last one had just one lone person show up.

      Fool us once, shame on you
      Fool us twice, shame on me

  25. Rob Erto

    The Guardian: “Economic mobility has fallen steeply in America over the last few decades; one study estimates it has almost halved since 1940. Increasingly, your class is your destiny. Nevertheless, the country remains enamored of these rags-to-riches tales which perpetuate the myth that, in the US, anything is possible if you pull yourself up by your bootstraps.”

    Who writes this stuff? And who reads it?

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