25 December 2016

The 300

The asymptotic nature of tech progress (the world, and universe, are bounded so there's only so much to be discovered about the physical world) has been a driving meme here for some time. This affects both product development and investment prospects. While corporations sit on trillions of dollars chasing Treasuries, they aren't investing in new productive capital (it's a long, academic study but worth the effort). Without new tech embodied in new machinery, return on investment is just fiduciary juggling: the current generation foregoes consumption to provided income to future generations. No real growth necessarily means that interest is paid directly from consumption; a transfer of wealth from the many to the few. The Donald's class keeps demanding that the Fed increase interest rates, all while they chase, en masse, Treasuries thus driving down the interest rate. Talk about cognitive dissonance.
[It] reveals that the long-term increase in capital's net share of income in large developed countries has consisted entirely of housing.

My, my. Sound familiar? Since housing is non-producing, it operates on the same mechanism of Treasuries, which is to re-distribute funds from those who work to those who don't. Nothing, it appears, was learned from the Great Recession. In order to pay increased housing price, there is a short list of opportunities. (The bounding factor is total mortgage monthly payment as a fraction of monthly income.) Mortgage holders' incomes are rising, so this increased level of earnings pays for higher mortgage payment (not happening). Housing operates as a Ponzi, where early buyers flip to later buyers at materially higher price, pocketing the capital gain or foolishly be the next victim in the scheme through buying a yet more expensive house (thus, the Great Recession, so yes). Reduce interest rate, thus trading interest for house price at a, more or less, static monthly payment (not happening). Lastly, stretch mortgage length; another method to hold monthly payment at bay (not so much). This last has been more active in auto loans, particularly since the Great Recession blew up the mortgage securitization process; now cars loans are packaged. Cool.

Without new, in the sense of not being just incremental change to the existing status, tech there can be no truly innovative products. And the nature of what is produced matters. New products which improve macro-productivity will trace back to new income creation. New products which are pure consumption (Angry Birds, for instance) don't create anything at the macro level. Apple got fat and lazy off the iPhone because it had a stranglehold on cap touch screen production for a couple of years at the outset. But one of the long delayed predictions of semiconductor tech remains in the future: wafer size of 450mm.
Since lithography is one of the biggest challenges in the 450mm wafer transition, ASM Lithography's announcement in March 2014 that it would temporarily hold off on the development of equipment for 450mm wafers made some in the industry believe it was a signal that the transition would never happen.

SK Hynix is building yet another fab, and it's 300mm. Won't be up and running until 2020, or thereabouts.

Kiss my asymptote.

23 December 2016

A Christmas Homily

For some time, I've struggled to conjure a single sentence to explain the urban/rural or Red/Blue or sentient/moron divide that bedevils this Western World, not just the USofA. Quite out of my norm, I scanned the letters to the editor of a recent NYT; generally I ignore such sections of publications.

But here it is:
Academics are trained to distinguish reality from lies or fantasy, and to respect facts and sound arguments. If that biases academics toward liberalism, then there is a problem with conservatism, not with academia.
-- Andrea Liu/2016

The Donald is of the faith, if you're rich you must be smart. Well, no. You're just greedy.

22 December 2016

Distribution Free Statistics

It's been an occasional theme of these endeavors, even part and parcel of the sub-title of one version, that the US (and, by extension, the global) economy has entered a less-than-zero sum game. In the past (see Gordon's book), the standard response to job destruction by tech change was that more new jobs were created than were busted by the machines. That sequence of events was possible only because the new jobs were no more challenging than the old ones. Displaced farmers were quite savvy enough to stick tires on chassis coming along Mr. Ford's assembly line.

So, today we get some more quotes with data, once again, demonstrating that, this time, it really is different. If the US, and by extension the global, economy is to avoid permanent collapse income has to be disconnected from production. Or, as one of these subtitles says
It's the Distribution, Stupid

Yes, we make more stuff with fewer hands. This is called increasing productivity, and all the data over the last few decades has shown this to be true. Also true: almost none of that increase (i.e., growth) has ended up in the hands of hands. Capital gets almost all of it.
Donald J. Trump told workers like Ms. Johnson that he would bring back their jobs by clamping down on trade, offshoring and immigration. But economists say the bigger threat to their jobs has been something else: automation.

"Over the long haul, clearly automation's been much more important -- it's not even close," said Lawrence Katz, an economics professor at Harvard who studies labor and technological change.

Now you know why corporations and their 1% owners continue to sit on $$$ trillions and chasing Treasuries. Even as tech eliminates more jobs, corporations are running out of ways to eliminate those that remain. So they goad the Fed into raising the interest rate in the hopes that doing so will cause Treasuries' rates, and their incomes. Yet more transfer of wealth from the many to the few.

Happy Christmas.

The Ivory Watch Tower

The second version of Apple Watch is out and about, and the much ballyhooed blood pressure measure still hasn't appeared. And there's a reason, which I've experienced for some years. First, the sensors in the Watch are on top of the wrist, while the best access to the body's plumbing is on the inside. Second, I've been to the dentist, optometrist, and real doctor over the last month. The dentist and eye guy both take a perfunctory blood pressure reading; meaning both strap on a bracelet device, which inflates and eventually displays a reading. Two different, but operating the same way, devices. And both said my BP was 150-ish over 90-ish. Baloney.

So, I was at the real doctor this week, and the nurse pulled down the sphig and her stethoscope and took my BP. 121 over 83. Same as always, +- a couple of points. Top of wrist sensors aren't worth a plugged nickel. Only Apple fanbois have been deluded into thinking otherwise. And, I suppose, they voted for The Donald. Same naive` behaviour and, eventually, same naive` regret.

13 December 2016

A Man of Subsistence, part the second

We return with Eccles, again:
As mass production has to be accompanied by mass consumption; mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.
-- Marriner Eccles (mid 1930s FDR advisor)

And we ask whether it's possible for the 1800-ish view of the USofA (a nation of yeoman farmers largely unconnected to government, to paraphrase Jefferson) so beloved by the alt-right remains a viable foundation in 2016. Or, to be blunt: can capitalists impose subsistence on the 99% and still have capitalists flourish? Well, in order to do that, the 99% have to be supplied with the three foundations of survival; food, clothing, and shelter. And the capitalists need to be in the business of selling such, not just conducting a continuing FIRE sale. In the mid-1930s, the USofA economy was largely self-sufficient; the Great Depression shuttered much productive capital, but didn't destroy it. Plants which had stopped making automobiles were quickly repurposed to build tanks and jeeps. Thus the WWII re-industrialization was only a matter of will to employ it. In today's economy, local food production is largely for the 1%, but staples are mostly domestic and shipped country wide. Clothing is almost wholly imported. Housing is moving from nail pounders making stick built houses, to site assembly of factory produced modules. In a nutshell, American capital doesn't come near enough to supplying the rudiments of 21st century subsistence; one might reasonably include personal transport as a necessity, for instance, since nearly no American tends his own few acres of bottom land with a mule.

If The Donald does get his way with 35% tariffs (he doesn't have the authority to do so by fiat; so far, anyway), the ones most hurt by that will be the poorly educated white folks in Pennsyltucky who voted for him, since they get most of their stuff from China and the like and not so much from Goldman Sachs. There's a certain irony in that, of course, but lots of others (3 million more or thereabouts who didn't, so far) get hurt too.

The point, of course, is that Eccles' observation, while the alt-right would likely see Marx in it, is merely a re-imagination of global equilibrium. Whatever goes out must be consumed. In an agrarian economy, with a smattering of simple manufacturing, such an economy can be self-sustaining of a 99% subsistence labor force, societies were such for thousands of years; Jefferson's vision put starkly. By 2016, USofA output is increasingly in FIRE and other intangibles. One can't make subsistence with tweets; they aren't very nutritious (particularly The Donald brand). In the early 1900s, Henry Ford rocked the world by raising the wages of his assembly line drones. He did so for the avowed reason that they'd be better able to buy his Model T. Do you imagine Blankfein at Goldman Sachs (once The Donald's pinata, now bromancer) having such an epiphany? Or that the poorly educated white folks could, miracle of miracles, afford his product? I doubt it. But either today's raptor capitalist must, or our economy collapses. Recent reporting of research that today's young-uns are less likely to earn more than their parents then any previous generation should come as no surprise. After all, we live in the culmination of the 1%'s Pac Man-ing of the GDP.

How to (re-)distribute is far less important (except to ideologues, of course) than it get done. While likely not the first to express it, Krugman put it well:
My spending is your income, and your spending is my income, so if both of us try to spend less at the same time, what we end up achieving is mutual impoverishment.

If, after all, Americans can't be supported by what their economy makes (financial services, mostly), and they can't develop the skills needed to make what the economy makes (ditto), then what's the result?

A question of balance. Switzerland and the island countries can make economies largely on shifting moolah twixt Peter and Paul, who of course live elsewhere, since they're teeny little societies. The USofA, not so much.

And we close, again, with Twain:
It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.
-- Mark Twain

08 December 2016

Book Larnin

Well, the shit has hit the fan. One of the emerging themes of these endeavors is that those blinded by data, they ignore history and events, get it very, very wrong. I've spent more than a few keystrokes in these musings berating the deficit hawks. The least intelligent are the trade deficit hawks. The Almighty Buck really is New Gold, and in order for the global economy to prosper and expand, there has to be a steady flow of bucks into all those other countries. That flow only happens if we run a current account trade deficit. Surprise, surprise.
[Hyun Song Shin, the head of research at the Bank of International Settlements] concerns also center on the global banking system and the possibility that the dollar's rise will accentuate what he refers to as an emerging dearth of dollars, which could bring back memories of the financial crisis in 2008 and 2009, when a global rush into dollars created a liquidity panic.

"What's good for General Motors is good for the United States." May be not so much for the rest of the world.

Here's the best part:
During such eras of dollar strength, global central banks were forced to dip into their reserves to defend their weakening currencies, leading to what some economists are now calling quantitative tightening.

That would be the flip side of quantitative easing, the policy of the past decade where central banks have flooded the world with cash in a bid to spur growth and combat deflation.

Why the best? I read a dead trees NYT while sipping my one cup of coffee at Panera. I got to that part of the story, and circled "inflation" and noted "deflation". By the time I got around to typing this missive, the innterTubes version was corrected, with a note saying so. Gotcha.

07 December 2016

It's a Brave New World. Really. I Mean It.

Two bits of news today, courtesy AnandTech, one and two. One has to wonder how much longer the reactionary cabal will continue to ignore the benefits of the RM? Of course, here on the West side of The Pond, reactionary has become normal.

A Man of Subsistence

Since the beginning of time, well Adam Smith (the real one) at least, economics has been characterized as studying the interplay among three high level inputs to production: land, labour, and capital. Until the industrial revolution, landowners held sway. Subsequently, both capitalists and their puppet economists agreed that they were the chosen people.

So, let me start with an anecdote. Here on the hill is a sorta, kinda commune. The houses came down through the wife's family, which now consists of two sisters and a brother (who lives elsewhere), two cats, two dogs (Lhasa and Jack Russell-ish), and humble self. Recently, since both dogs are getting up there in dog years, I suggested we get a third, so that when the first of the pair succumbs to whatever ails it, the survivor will still have a companion. Made sense, to me anyway. The wife demurred, saying that two would gang up on the third; not necessarily the newcomer.

I found that amusing, since she and her sister have done that to moi. She didn't notice the irony, of course. They're BAPs, so they deserve a servant.

Which brings us to The Donald and Carrier (Pence's Indiana is actually paying for it!) and Boeing and such. It has been an article of faith, codified by that Pareto guy, that labour will always, under any economic regime, be reduced to subsistence wages in deference to the needs of landowners and capitalists. Pareto, in particular, used data going back centuries to make his point. Marx, not Groucho, demurred.

On the other hand, we have this observation, of more recent vintage (yes, it's part of the preamble to one version of these endeavors):
As mass production has to be accompanied by mass consumption; mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.
-- Marriner Eccles (mid 1930s FDR advisor)

Take Smith and Eccles, toss in a blender, and what sort of smoothie do you get? What we get is the distribution problem writ bold: as automation decreases the number of labour hours in the production of widgets, we have a demand problem. The lunatic right wing continues to demand yet more supply side support for capital, but the fact remains true; corporations and the 1% sit on trillions of $$$ of idle cash. That cash, to the extent it is used at all, is spent chasing Treasuries down to 1.5% return and M&A and share buybacks. None of those uses has any growth, at the macro level, component. It's all just moving money from the many to the few, who just sit on it as they do today. And, if the spend it all, they still chase Treasuries being the scaredy cats they truly are.

What you get, if an improving macro-economy is the goal, is a revised definition of "subsistence". In the middle ages through the end of the 19th century, subsistence meant just the other triad of economics: food, clothing, and shelter. Labour's only purpose was to reproduce in sufficient numbers to supply effort making the stuff for the elite, whether regal or commercial. Today's lunatic right still thinks in those terms, despite the obvious fact that production today is utterly different from as late as 1900. Eccles understood that. The Donald and his entourage don't. In particular, they are wilfully ignorant of the fact that the 1% have really good healthcare because the employer paid health benefits originating during WWII (and damn gummint support for R&D) are what paid for it all. If only the 1% can pay for healthcare as just another consumer discretionary spend, in a short time even they'll have 1920s variety healthcare.
It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.
-- Mark Twain

05 December 2016

Pareto Failure, part the second

Well, well. Some, but not the true believers I'd expect, Trumpistas have discovered the issue with Pareto Optimal. Or, as I prefer, Pareto Fail. We have this article today, with some really scrumptious quotes.

Just to recap. Pareto was, sorta kinda, an economist of the Italian variety. Just as Mussolini began to drag the country into the mire. The signal example of his Optimal: given a pie and three people, where the status quo is that two divide the pie half-and-half, any attempt to re-distribute any part of the pie to the third people results in lowered utility. This assumes, of course, that the loss of utility by the pair exceeds the gain in utility by the singlet. And that assumption is based on further assumptions about utility curves and the like. Read up George Stiglitz (here's a start) for details.

So, what's the signal quote?
"Cutting taxes for shareholders will destroy more factories than whatever he saves by jawboning companies from the bully pulpit," Mr. Konczal said. And incentives like the ones Carrier received only forestall the inevitable shift by multinational giants to low-cost locales like Mexico and Asia. "They will just go later after pocketing some money," Mr. Konczal said.

As they always do. Just look at professional sports teams and their publicly paid for arenas. Welfare for billionaires.

Or this:
"The dry statistics on trade aren't working to counter Trump," Timothy A. Duy, an economics professor at the University of Oregon, said in a blog post on Sunday. "The aggregate gains are irrelevant to someone suffering a personal loss. Critics need to find an effective response to Trump. I don't think we have it yet."

That's just saying "Pareto fails". It also obliquely raises the key point to all this: if moving 1,000 jobs to Mexico, or wherever, at a loss of, say, $30,000/job/annum leads to a $10/unit decline in the price of 1,000,000 unit/annum widget, what's best? With a long enough time horizon, the winners (all those buying the widget) could, through force of law, compensate the losers. The fact that the Carrier jobs weren't in support of consumer goods, but rather commercial ones, makes the compensation process either easier or harder, depending on the mechanism.

Pareto fails just because it is amoral. And it is commonly used to justify supply side voodoo economic tactics. Clowns are con men, and I hate clowns.

02 December 2016

The Scariest Sentence You'll Ever Read

Today, states containing just 17 percent of the American population, a historic low, can theoretically elect a Senate majority
-- Emily Badger/2016

Thought For The Day - 2 December 2016

Unemployment rate: 4.6% vs. 4.9% consensus, 4.9% previous.
178,000 additional jobs.


"Yo, Donald!! You'd best not fuck up an economy that's working just fine in order to make rich folks richer and poor folks sicker and poorer. You do dat, and I'll whoop your fat ass to Selma and back."


24 November 2016

Thought For The Day - 24 November 2016 (it's a Turkey) [update]

Well, it is Thanksgiving (at least, in the USofA), so there should be something to be thankful for. One would think so? Here's some musings on The Donald's announced appointments.

Atty. General, Jeff Sessions: will bring white supremacy to a head, by actually implementing voter suppression, as he did while Alabama AG.

HUD, Ben Carson: will implement a voucher-only housing support program, which will enable slum lords across this great land to be even richer; mortality and morbidity of residents will soar as maintenance of buildings will be optional under the now Rand based HUD, thus eliminating the less desirables (not to say, deplorables) from the population. One might call it the Carson Plague.

Education, Betsy DeVos: the Scamway of teaching will be the way of the future. The Bible thumping, snake handling, incestuous states will be encouraged to teach "traditional subjects" such as the earth is 6,000 years old, people froliced with dinosaurs, and the Bible is the only history book in use. Science will be deemed anti-American, and only white wives with at least three children will be certified as teachers.

UN, Nikki Haley: since she speaks in tongues, will be able to communicate with all members of the body without need of simultaneous translation.

Chief of Staff, Reince Priebus: cat's paw for Bannon (see below).

Chief Counsel, Steve Bannon: the really nice, smart guy that The Donald greatly admires. His white supremacist Breitbart doesn't really represent The Donald's view of the country. Will be in charge of building, staffing, and filling the rural re-education camps for all urbanites with IQ above 100, documented Democratic voting, multi-cultural thought patterns, and lacking family Bible handed down at least four generations.

Be thankful for a real, great America of the future.

[update 1:38 pm EST]
Just tuned into the Vikings/Lions game, and saw this ad. Cook has sent a shot across The Donald's bow. I'd bet on Tiny Tim.

21 November 2016

Thought For the Day - 21 November 2016

Those following Mr. Market have seen the argument about whether twitter's worth its share price, who might buy it, and how soon it goes the way of My Space. It occurs to me that The Donald's use of twitter as his propaganda vehicle will be its salvation. Technology to the rescue. I guess.

Red River Valley

As chronicled here for some time, well, once more. The divide here in the USofA has been urban/rural from the time of the Constitution's construction. It's only in the last few decades, from when Nixon instituted the Southern Strategy, the divide became Red State, Blue State. But that just confuses the issue. As mentioned here before, there are few, if any, homogeneous Red states; even Red states have Blue cities.

Here's a lengthy piece, with many on-point quotes, that describes the situation.
In 1920, for the first time, the Census Bureau counted more people living in urbanized America than in the countryside. This hasn't been a rural nation ever since.
and this
The Electoral College is just one example of how an increasingly urban country has inherited the political structures of a rural past. Today, states containing just 17 percent of the American population, a historic low, can theoretically elect a Senate majority.

Not to mention that the Red state whiners consistently are net moochers on the Federal purse:

Red states are twice as dependent on the Damn Gummint than the Blue States. Of course.

The only near term solution is the 270 state compact. I suspect that a Roberts' court will declare it unconstitutional, since it evades one interpretation of the state/Senate sovereignty clause. Hopefully, we get to find out.

A Grove of Olive Branches

Andy Grove, of Intel fame, is famous for "Only the Paranoid Survive", both epithet and book. While a reasonable adage in the micro world of corporations and sectors (not that corporates engage in oligopoly as a matter of course, of course), it's a bad foundation for heads of state. With Putin and his puppet The Donald leading the Western world in thin skinned whininess, we're in for a spiral into totalitarianism. The Donald tweets (will he still be spending his Presidential overnights all thumbs?) angrily about a fourth wall speech at "Hamilton". And now we find today a poll (oversampled against him, of course :):) ) demonstrating our collective revulsion of him.

Oh, and no, Ford didn't not move to Mexico because The Donald interceded. Ford never was going to move that plant to Mexico. The good thing about tweets, from The Donald's point of view, is that they're difficult to fact-check in real time. And how would you get the truth to The Donald's fawners? You see the problem? A congenital liar has the advantage.

17 November 2016

Pareto Failure

Quants, whether finance, bio, or econ consider themselves amoral in their approach. Just crunch the numbers.

After Adam Smith, Wilfredo Pareto is likely the "quant" most likely familiar to those interested in econ. Well, more theory than stat, but still. He defined a sort of optimal equilbrium, in the macro sense. In sum, the optimal allocation has been reached when further shifting of resources amongst participants yields lower overall "satisfaction".

The failure of Pareto is illustrated by a classic example: if one has a group of three individuals and a pie of resources where two of the three have taken half of the pie each, then Pareto optimal has been reached. The rationale is that any part of the pie going to the third individual means the two (either alone or tandem) must relinquish some resource. It's not surprising that Mussolini liked Pareto: he provided a sort of "scientific" excuse for autocracy.

Whether he's heard of or read Pareto, Trump is taking the Mussolini tack. That didn't deter him from selling a bill of goods to the poorly educated white (formerly blue collar middle) class. And they bought it by the bushel. We already know, although they will most likely ignore the reality (esp. if they get their news through Facebook!) or consider The Donald's tweets truth, that The Donald has thrown them under the bus. He was recorded telling his rich steakhouse billionaire buddies that they're going to get that wonderful tax break.

Will they believe their own ears, or just the continuing dog whistles from Trump Tower?

16 November 2016

Thought For The Day - 16 November 2016

In 1964 Goldwater, or as he was known to his followers AuH2O, ran as the President of not governing. He lost. Reagan ran the same way, but won. Neither, at least once the job's purpose became manifest, shirked their duty. Much of what they did was to turn governance to lining the pockets of the wealthy, but at least they governed.

Make no mistake, what you see going on with Trump is a purposeful effort to destroy governance. I see the various pundits, the not Breibart wing, wringing their hands over the incompetence of the transition. After all that Trump has said and done since he went Birther Ballistic, haven't they learned that he plays only one song? Trump only knows absolute power. His network of companies are privately held. His outside investors have no control of their investments. There are no public shareholders. Trump's word is fiat.

Why would he seek any other mentor than Putin? He doesn't need a transition because he and his kids will do the thumbs up or thumbs down on all decisions, just as what was done in Rome.

12 November 2016

The British Really Are Smarter Than a Republican

Leave it to the Brits the to figure out the US. For some months, these endeavors have argued that the Red/Blue dichotomy is actually false. The issue is urban/rural, and always has been. Except for the most empty of the Empty States™, blue cities abound. It's just that what have been characterized as Red states were, for a couple of hundred years, devoid of cities. Not so much anymore. Only if the Trump administration manages to fully implement voter suppression can the Right Wingnuts continue to control governance. Cities make for liberal ethos. God's country makes for tribalism and bigotry and the like.

Who's Driving The Car?

Thanks to simple-talk, I'm informed that Fabian Pascal has posted part two (part one is linked) of his series on "Principle of Orthogonal Database Design". If you read here, you should read this series. I've long mused that the essence of RDBMS is notion of independence in the data. Sometimes this is voiced as "one fact, one place, one time". I like orthogonal; it's a word that makes me giggle and has for years. Along with "batshit", which describes coders who "prefer to do transactions on the client". Totally batshit.

Which raises a question: are triggers as bad or necessary as discussed in Joe Celko's piece, also on simple-talk? One of the commenters describes an, alleged, corner case which demands trigger support. Joe provides an extensive answer, on point.

But I've always thought about such corner cases from the other direction: if the RM is consistent, which it looks so to me, and a SQL database schema is faithful to the RM, which vendors certainly don't enforce, then the answer may be somewhat different. The answer could, likely so, be that the application "logic" which demands the corner case trigger is wrong. Further normalization to reach organic normal form™ is the avenue of escape. After all, the RM is really a logic engine. It's no coincidence that the database language datalog shadows the programming logic language prolog.

Just a thought.

11 November 2016

Thought For The Day - 11 November 2016

That didn't take long.

Was it just yesterday that Hillary and Barack told us to give King Donald of Orange a chance to lead?

Well, the protests have already started. Reporting has it that EPA admin candidates are climate deniers.

His lead bullet point is abortion ban.

Lead? I predict, on the economic front, that he'll (by intent or stupidity) Volckerize the economy because
1 - he and his buddies want 10% risk-free return on their idle moolah because they're too chicken shit to make real investment, so the damn gummint must provide them with much higher, liveable, unearned income
2 - he and his buddies seek to destroy non-existent inflation; one can never start too soon to halt the scourge of inflation

And, of course, his propaganda chief (Giuliani?) will bullhorn that the ensuing catastrophe was the fault of Obama. And, of course, the reactionary rural rubes who voted for him will swallow hook, line, and sinker.

10 November 2016

Democracy? Not So Much

The electoral college is a constitutional relic of a fundamentally different nation, one with 13 states and a potential electorate of 2.5 million citizens, slashed dramatically by restrictions that limited the franchise to white, land-owning Protestant men.
-- The Guardian

Just the sort of electorate the reactionary rural rubes who gave us Trump have wet dreams about. Of course, most of them have no land, but who's paying attention. And they're stupid enough to think he'll wave his fairy wand and give them 90210 wage jobs. As if. Trump will do what every Republican has always done: give himself and his ilk more. He'll make an effort to give them satisfaction by further restricting abortion and having the DoJ flipping on voting suppression. DoJ will take the lead in legislating preventatives against voter fraud. And so on.

Funny thing is (and you can go find more for your own amusement) he violently tweeted back in 2012 that the Electoral College should be abolished. Depends on who's ox is being gored. Ya think?

09 November 2016

The B School Is Not, Very Not, Amused

This particular bit of R isn't of intrinsic interest to me, but the title can't be ignored, given some earlier musings here.
Webscraping with rvest: So Easy Even An MBA Can Do It!

Thought For The Day - 9 November 2016

Well, now we know the unvarnished truth: middle America, God's country, is unrepentantly white supremacist. While they live fat and happy on their $14 billion (and climbing) farm subsidies. And, I suppose, King Donald of Orange will bray about his "mandate", denying the simple fact he got fewer votes than Clinton. The wonders of gerrymandering and the Electoral College.

"The Economist" says it's even higher:
American farm subsidies are egregiously expensive, harvesting $20 billion a year from taxpayers' pockets. Most of the money goes to big, rich farmers producing staple commodities such as corn and soyabeans in states such as Iowa.

I guess it might be even more profitable if slavery could be re-instated. Don't laugh, the re-education camps will be opening soon. All of the intellectual elites on the coasts will be required to report.

What's amusing, in an "I told you so" mood is that healthcare provider stocks are in the tank on the basis that Obamacare might go away: lower volume will drive up average cost, and lower volume some more since even the blessed insured will find themselves priced out; rinse and repeat.

07 November 2016

Size Matters - Part The Second

Generally speaking, one sees drug developers announcing that some clinical trial is going so well that they've decided to increase sample size. That's baloney, of course, since trial success is intimately tied to p-value, and that's (for a given delta) inversely proportional to n. So, what they really mean is, "this shit ain't making it, so let's drown them with data points!" May be, just may be, the trial will squeak into stat sig (even if it's some post-hoc subset!) before the budget runs out. The delta might not even be clinically meaningful, but what the hell; FDA could still approve.

Today brings something of an exception: a revision (if I read this correctly) to lower sample size:
6:06 am Intec Pharma announces that the protocol for the Accordance Study has been amended to reflect input from opinion leaders and biostatisticians specializing in PD (NTEC) : Co states, "The amended protocol's sample size estimation uses a predicted standard deviation that is based on recent evidence from similar Parkinson's disease clinical trials. Using this estimated standard deviation and the same predicted difference between the active intervention and control, we achieve a substantial savings in sample size, without altering the objectives, endpoints or statistical power of the Accordance Study."
[briefing.com 7 November 2016]

Something of a roll of the dice, given that neuro drugs are notoriously difficult to measure in the first place.

05 November 2016

Thought For The Day - 5 November 2016

"Business Insider" is, as one might expect, a capitalist's organ. So you should read up its paranoid ravings on the result of anointing King Donald of Orange.
Trump's proposed tax cuts for the rich will not stimulate growth, just as the Bush tax cuts did not stimulate growth (because taxes on the wealthy are not actually stifling growth -- what is stifling growth is the lack of middle-class spending power). The tax cut will, however, increase the deficit and accelerate the growth of federal debt. President Trump will blame this on Congress and the Obama administration.

Personally, I hope most of this doesn't happen. I hope that President Trump would be the president that some of his smarter supporters expect him to be -- not the mean, petty, reckless, and uninformed proto-tyrant he sounds like, but a reasonable, effective pragmatist who just enjoys entertaining crowds by saying outrageous and offensive things and otherwise acting like a boor.

But given how consistent Trump has been in his actions and pronouncements over the past 18 months, I think it's more likely that what we've seen is what we would get.

04 November 2016

Nor Any Job But Think

These endeavors exist in a number of versions on multiple platforms.

One version has the following sub-title:
It's the Distribution, Stupid

That version also has some relevant quotes, among which is this:
As mass production has to be accompanied by mass consumption; mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.
-- Marriner Eccles

Eccles has a bio on the Wiki. The point is that he was an FDR advisor during the Great Depression. This is the most elegant description of the capitalists' dilemma: physical capital earns its keep through productivity, but more importantly, sales of that output. No demand, no return. This is the simple explanation for why corporations and the 1% are sitting on trillions of idle $$$. They have lost the ability to turn fiduciary capital into productive physical capital. Thus we had the DotBomb (idle cash chasing The Next Big Thing), the Great Recession (idle cash chasing home mortgages) and today's 1.5% Treasuries (idle cash chasing "zero risk" return). In all three cases, there was little to no positive macro effect.

As Election Day approaches, we hear The Donald claiming to have the cure to the downwardly mobile middle class. Never mind that it's been confirmed that most of his wealth is from financial and tax engineering. He continues to blame capitalists for using immigrant labor and cheap imported materials. Just as he did with his Washington hotel.

"Di bot boss, di bot."

It's been obvious for some decades that the Luddites were right, just a century or two early. The current crisis, the non-recovery of jobs from The Great Recession, is merely the most recent manifestation. The bots have been on the rise for some time.
America has lost more than seven million factory jobs since manufacturing employment peaked in 1979. Yet American factory production, minus raw materials and some other costs, more than doubled over the same span to $1.91 trillion last year, according to the Commerce Department, which uses 2009 dollars to adjust for inflation. That's a notch below the record set on the eve of the Great Recession in 2007. And it makes U.S. manufacturers No. 2 in the world behind China.

But there are two sides to the middle class problem. The bots mostly explain the loss of the blue collar middle class. The rise of FIRE is the other side of the coin.

Back to 1800. The Luddites have forever been opposed by the Techs. Through the middle of the 20th century, the Techs held the policy upper hand. The argument, generally offered as some version of Pareto optimality. The crux of Pareto is that the "winners" *could* compensate the "losers" and still gain. But Pareto justifications never seem to require the compensation.
Thus, in practice, to ensure that nobody is disadvantaged by a change aimed at achieving Pareto efficiency, compensation of one or more parties may be required.

Where the Techs' analysis fails is to assume that the farm-to-factory migration of the late 19th through mid-20th century is still the exemplar to be followed today. That earlier labor migration worked because farmers could do factory work, since it required less skill, brain power, than what they had been doing. The dollar wage may have been a tad better, due to value of goods made.

But with the rise of FIRE as the sink for "skilled", brain work, labor has made a migration from lost manufacturing quite impossible. Worse, FIRE is a net overhead at the macro level. MBAs make money by moving Uncle Sam's moolah from the left pocket to the right pocket, and deducting a fine fee for the effort.
The Department of Education numbers support his point. In 1980-1981, some 19.1% of all the master's granted were in business. In 1990-1991, advanced degrees in business grew to 22.8% of the total market, and in 2000-2001, it was 24.4%.

Just what the world needs, more Liar Loans, LIBOR fiddling, and London Whales.

So, as the meta-quote from Bill Clinton says, capitalism (whether laissez faire or socialist) can only survive when aggregate demand tracks output. We know from the data that, on the whole, wealth and income concentration have put a spike in that. The situation will only get worse if King Donald of Orange takes the opportunity to worsen the concentration with his avowed tax plan.
[T]axpayers in the top 1 percent would see the largest increase in after-tax income on a static basis, driven by both the lower top marginal tax rate and the lower corporate income tax. Under the higher-rate assumption this increase would be 10.2 percent, and under the lower-rate assumption this increase would be 16.0 percent.

Further, the notion that giving more moolah to profit-rich corporations and 1%-ers will lead to investment-driven Nirvana has been proven a lie at least since the Laffer Supply Side nonsense. One can't push a string; monetary policy can contract an economy by killing the money supply. As the QE extension of TARP has shown, those with idle moolah don't make more physical investment if you give them yet more moolah. They just run, lemming like, toward Treasuries. There's a reason they bring about 1.5%: the CxO class is impotent.

03 November 2016

Data, Data Everywhere

A couple of interesting pieces in today's news on the data front. Some may recall the Triage piece from the early days of these endeavors. The point being to parse factors driving voter motivation to mete out cash in the most effective way. There's been more reporting during this election on "algorithmic modeling" in campaign management. You read it here half a decade ago.

So, today one side of the election is making fun of Big Data and widely reported public polls. Messina makes the case for Little Data. It sounds something along the lines of the Moody's prediction which is totally poll-free.
Clinton is forecast to pick up 332 Electoral College votes against 206 for Republican Donald Trump, Moody's Analytics predicted on Tuesday in the final update of its model before Election Day on Nov. 8. That would match Obama's margin of victory over Republican challenger Mitt Romney in 2012.

Messina makes the case that targeted data is more informative than widespread polling. Little Data beats Big Data.

The other supportive piece confirms a point made here more than once: the Red/Blue divide is really an Urban/Rural divide.
"What happens if you abandon the places where most people live?" said Mr. Perlstein, the historian. After its 2012 defeat, the Republican Party wrung its hands over the need to face demographic change in a country that's becoming majority-minority. But geography poses a problem, too: Once-white suburbs are growing more diverse; poverty is spreading there; and central cities that Republicans relinquished are now the country's economic engines.

Thanks to the Obama/DNC stupidity before the 2010 mid-term elections (which provoked the Triage piece), the Right solidified its minority ruling class base through the simple expedient of rampant gerrymandering. It may happen, and perhaps forever, that Democrats win the popular vote, due to my personal definition of "over voting" in cities, yet lose the Electoral College. Once that happens, there's exactly 0 chance of getting a Constitutional elimination of the College. Right wing minority control of governance becomes permanent.

Have a nice day.

02 November 2016

Thought For The Day - 2 November 2016

Major European indices trade in negative territory amid widespread risk aversion associated with Tuesday's presidential election in the United States.
-- briefing.com/2 November 2016 @7:24am

Not that King Donald of Orange cares what anyone thinks, so long as he gets his unearned tax breaks.

01 November 2016

Thought For The Day - 1 November 2016 [update 3 November 2016]

It will be discovered, some months from now, that the Abedin email dump on the Weiner machine were planted by rogue (or so it will be claimed at the time) FBI agents using the copies made from the private server. These will be the self same agents who demanded further action against Clinton during the initial private server inquiry. Unrequited, they set out to elect Trump.

Well, that didn't take long: here
"The FBI is Trumpland," said one current agent.
The FBI would not comment for this story.

There has been other, emerging, reporting. Of course.

31 October 2016

Sweet 16

Regular reader might remember Bill Gates' comment that nobody would ever need more 640K. Turns out he's been shown to be right, yet again. Regular reader might also remember my often musing that Intel (and others) could have opted to use the fast growing transistor budgets to implement the X86 ISA(s) directly in hardware. But chose to go the RISC machine fronted by a JIT (sort of, anyway) "decoder" avenue.

Well, today we find this story explaining why Bill was basically right. You want more speed? Do the work with less cpu. Who knew? Well, me.
To reduce those energy demands, the researchers demonstrated how they used a conventional Intel chip and turned off half of its circuitry devoted to what engineers call mathematical precision. Then they "reinvested" the savings to improve the quality of the computed result.

Did they run down to merely 16 bits? Could be.
He suggested trading off precision to make dramatic gains in computing efficiency.

26 October 2016

Thought For The Day, 26 October 2016

The latest in The Donald's mindless jabbering is the execution of "oversampling" in polls. As any drug developer knows, with enough observations one can find stat sig in a ham sandwich. That's what oversampling does: narrows the CI/lowers p-value. It doesn't change the point estimate one way or the other systematically. Oversampling won't make The Donald look like a bigger loooooser or Hillary a bigger winner. It will only solidify the accuracy of the point estimate. Moreover, the technique isn't, on the whole, used in public facing polls, but by campaign's internal polls where it wants more accurate estimates of sub-groups known/suspected of being heterogeneous.

So, I just did a simple search, and lo and behold, Pew Research (The Donald's source of oversampling evil) had this to say:
Oversampling is the practice of selecting respondents so that some groups make up a larger share of the survey sample than they do in the population. Oversampling small groups can be difficult and costly, but it allows polls to shed light on groups that would otherwise be too small to report on.

Even the non-brained dead rightist organs (or some anyway) know the truth.
The conservative blogosphere is lighting up again with accusations of polling bias against Republican presidential candidate Donald Trump in his race against Democratic opponent Hillary Clinton. However, Trump supporters should avoid giving into this temptation to assume unfavorable results must be biased results. Clinton really is leading Trump, and by nearly 6 percentage points.
[June, 2016]

25 October 2016

Treading Water, part the second

Well, the NYT has finally caught up with these endeavors. As mused here more than once, The Giant Pool of Money is still out there, and continues to grow. Landon Thomas reports the extent, but fails to direct the reader to the elephant in the room: the CxO class has run out of ways to turn fiduciary capital into profitable physical capital. Fiduciary investing is just Ponzi with ribbons.
"Asia and Europe keep exporting their savings to the rest of the world," said Brad W. Setser, an expert in global financial flows who worked at the United States Treasury from 2011 to 2015. "All this money sloshing around looking for a home is not healthy -- it indicates a real lack of demand in other parts of the global economy."

IOW, the idle rich keep demanding real return rates of interest for their idle cash. Not going to happen.
"It has really caused spreads to move," [Ken Monaghan, who oversees high-yield bonds for the global fund manager Amundi Smith Breeden] said, using Wall Street jargon to describe what happens when the interest rates of these bonds decrease as investors pile in. "We are seeing institutional investors come to us and ask for levels of risk that they have never asked for before."

Only when the CxO class figure out how to generate real growth in physical investment will there be real growth in the global economy. It helps if that growth ends up in the hands of the 99%.

23 October 2016

Brexit, part the Second

A couple of notes on Brexit.

Peter S. Goodman wrote a few weeks ago on the impact of the divorce on London's financial industry.
"There were the people who thought Brexit would be reversed," [ Adam S. Posen] continued. "There were the people who delusionally thought there would be a soft Brexit, and all the northern Europeans would be nice to them. And there were people who believed that this crew in charge of the British negotiations were somehow going to strike a good deal. All of the delusions have run out of material."

And, in a couple of minutes, Bourdain will be surveying The City, as it is called, to see what the mood is post-Brexit vote. Judging from the many bumpers CNN has run, it's not likely cheery.

The Joker

Regular reader may have noted an absence from these endeavors over the last week or so. Was off on the island, sans computer, which wouldn't make much difference since the island has, on a good day, arthritic innterTubes service. It does, thanks be to God, get newspapers delivered each morning on the boat. But the boat doesn't have a consistent schedule over the week. Sometimes the newspapers arrive in mid-morning, others nearer to noon. Since I'm on the island once a year, generally, memorizing said schedule isn't a big priority. Yesterday was going back to the mainland day (sniff!), and the later arrival of my beloved NYT. Since this is after even a late breakfast, I toddle on down to the grocery and end up waiting for the bundles to arrive. This week finds a couple of other geezers (only geezers read from dead trees; or perhaps only geezers read) often joining me for the bundles of joy.

So, yesterday I was there when the stock person wheeled in the basket of bundles, not off wandering. One of the geezers got his New York Post, which came off the top of the bundles. The stocker took his time digging through the bundles. The geezer allowed that his beloved Mets had failed in this year, which led me to remark, "what a contrast; Trump and the Mets!!". For those not of the tri-state area, the New York tabloids are not all of the right. Just the Post. The Daily News is even more rabidly anti-Trump than the Times. Who knew? Well, the other geezer. While waiting for the Times to reach the surface, he offered up the following story of his own creation.

Trump has won the election (I know, it's a nightmare story) and is settling in to the White House. The first night he just can't fall asleep, so is pacing about the residence.

In due time he spies the apparition of George Washington approach him. Not quite scared, but desperate for relief, he asks President Washington for advice; how to get to sleep. Washington responds, "Donald, you should increase your defense forces. The people will support your efforts." Trump thanks Washington, wanders to the bedroom, and does fall blissfully to sleep.

The next night, same problem. Same pacing, but different president appears. This time it's Jefferson. And Trump poses his problem yet again. Jefferson offers, "Donald, you should give much added support to education. The people will support your efforts." As before, Trump manages to sleep.

The third night, still that problem. Yet another president joins him with advice. It is Lincoln who offers, "Donald, go to the theater."

10 October 2016

GOP Triage

Some time before the 2010 mid-terms, I chatted with "tech" folks at the DNC about the, by then obvious, problem: the RNC and the Kochs and such had taken control of Washington by the simple expedient of taking over state governments. Moreover, the threat to participatory democracy was greater than it seemed, since controlling state senates, and then Washington Senators, became rule by the right wing Elite. The states that have been taken over are in the South and Mountain West; rural, God, Guns, and No Abortion knee jerks.

I don't know whether it's been accepted as standard jargon, but Gore was hurt by the electoral college by "over votes", which happen in large population states that are strongly partisan. Those states are overwhelming Democratic, while the Republican skewed states are of much smaller population. Over votes occur when the popular vote for the candidate in a large population state greatly exceeds 50%. Such a pattern is sometimes called "wasted votes". The electoral winner ends up with close margins in small states, wiped out in large states, but enough small state wins to reach the 270 needed. What the Southern founders wanted: rule by the landed gentry.

My chat with the DNC, on a method to triage campaign spending at the state level so as to not get shellacked, fell on deaf ears. A bit later, the nice folks at simple-talk posted the approach as an article. And the Republicans have continued to hose the Democrats in the mid-term and down-ticket races.

Until now. Lots of reporting stating that the GOP Elite have recognized what has been mused in these pages for months: King Donald of Orange threatens to drive both houses of Congress to the Democrats. If any of you dear readers are of the knee jerk right, you'd best not ignore the problem, or you'll lose not only the three elected branches of government, but Garland will be pulled off the table and Obama will be up for the Supremes, and he'll get in. Is a little bit of pussy worth the price?

08 October 2016


In keeping with a few musings in previous postings to these endeavors, both quant and historical analysis in the wake of the Brexit vote concluded that nothing good would come of the effort for most Brits. A few months along, and that appears to be the case. Surprise. Give it a read, but for those who aren't interested, here's the punchline:
The stakes are considerable. Britain ships nearly half its exports to other European Union members.
this misses the fact that nearly one-third of the goods and services consumed in Britain are imported. In dollar terms, the price of those goods and services is spiking. Eventually, economists assume, this inflation will work its way through the economy, further depressing growth by crimping consumer spending and potentially sowing unemployment.

Germany and France have made it clear that the Brits won't get to have their cake (free trade) and eat it (immigration wall) too. Although Boris Johnson says:
Our policy is having our cake and eating it.

Not bloody likely Boris.

Game, Set, Match

Some years ago, Joe Celko published "Joe Celko's Thinking in Sets", which, IIRC, was mostly about auxilliary functionality. Today, the SQLServerCentral folks have posted a more on-point article about set-theoritic SQL/database processes. Very cool.
In this article, I'll try to show the difference between a RBAR loop, a recursive CTE and a set-based loop. When the latter was applied to a real life problem, it improved performance of a query that ran for over 25 hours and wasn't able to complete, to a query that finished in two minutes. The table had over 15 million rows and was constantly growing.

Even if you're not a SS user, and I've not been for a few years, the discussion is worth the effort. All RDBMS worth your time implement a decent CTE, so, modulo syntax, it's all transferable. If the discussion sounds a bit like the [x]apply functions in R, well, it is.

06 October 2016

My Dear Lou [clarified]

OK, so back in the mid-60s, my musical taste went to what we would likely today call "adult contemporary folk", which was saloon singers doing Pete Seeger style songs; a sort of folk music despised by true believers. My favorite brand was "The Limeliters", a trio of late 30-somethings. Not many of my peers had heard of them, except possibly from myriad commercials, and not knowing who the singers were. Only one of the trio still lives.

A few minutes ago, during the usual horrible Thursday NFL game, I watched the commercial for "Mafia III", and was shocked. After the trio disbanded in 1963, they later had some reunion concerts and recordings in the 70s and 80s. One of their gigs was to record "Everybody Wants to Go to Heaven" by Charles Larson as part of a songwriting competition.

Somehow the producers of "Mafia III" found the tape, and sampled out Lou Gottlieb's phrasing of the tagline, "but nobody, aaah nobody wants to die". Gottlieb died in 1996, way too soon.
The idea is to make "Nobody Wants to Die" available for download, though details are still being worked out.

That would be so cool. A 70s reunion of a 60s trio doing a songwriting contest winner (sung by an aging Jew, since, of course, the Jewish religion offers neither heaven nor hell) backing a 2016 video game which thinks the song is from the 60s. Only in America could such a confluence of irony happen.

I Wanna Be Like Donald

This is one of many, I suspect, similar pieces claiming everybody can be like King Donald of Orange: lose money this year and deduct it against income in future years. If you go and read the article, you'll find that the ability is available only to those who conduct business for income, not those who earn wages.

But, guess what? It was under Reagan that the ability of ordinary wage earners to avail themselves of something similar, called income averaging, was removed. Reagan, the man of the ordinary people. Of course.
An existing provision in the tax code, called Income Averaging, which reduced taxes for those only recently making a much higher salary than before, was eliminated (although later partially reinstated, for farmers in 1997 and for fishermen in 2004).

Not too surprising that the Right's usual suspects got their access to the provision restored.

Thought For The Day - 6 October 2016

Well, another example of the Right meets "Lord of the Flies". Couldn't happen to nicer folks. And may be the Red environs of FL will be visited by (St.) Matthew twice. Ditto.
Apparently some colleagues challenged Woolfe over his vacillating stance on UKIP during Thursday's meeting, and it escalated into an argument and then a fight with one man in particular. The two reportedly removed their jackets and stepped out of the meeting room into a hallway, where Sky says the still-unidentified UKIP member punched Woolfe once, which caused him to fall back and hit his head on a pole.

Redneck on redneck violence. Our South has been living with it since the Scots and Irish invaded 300 years ago.
Author (and U.S. Senator) Jim Webb puts forth a thesis in his book Born Fighting to suggest that the character traits he ascribes to the Scotch-Irish such as loyalty to kin, extreme mistrust of governmental authority and legal strictures, and a propensity to bear arms and to use them, helped shape the American identity.

I wonder? Will they suppress their hated of "governmental authority" to vote for King Donald of Orange? A King for their side just might be an OK form of authority.

05 October 2016

Those Stupid Socialist Europeans

The main argument by The Right against anything Left is that European Socialism is failed and can't do anything right. Much of Europe's problems stem from its willingness to accept Middle East refugees in numbers that are nearly an order of magnitude more than the supposed beacon of freedom. There's nothing stupid about socialists; they're just not as personally greedy as King Donald of Orange and his ilk.

For those on the Northeast coast, hurricane Matthew has been of some concern, since we don't get hurricanes all that often, and when we do they tend to wreak a bit of havoc. So, knowing the future path is a frequent concern; some of us watch the weatherperson religiously. These weatherpeople display the official Hurricane Center path, and some show long term (in hurricane life terms) paths. The two most watched are referred to as GFS, which is US made, and the European, which is from Europe. For many days, the GFS had the storm skirting the coast to the Carolinas, and thence someplace in the genral vicinity of New England. The European had it making a hard right turn, somewhere between the Bahamas and the Carolinas. As of last night's news, the hurricane center path was a bit farther south of Cape Cod than previously, tracking the GFS. The European still had that hard right.

Just checked the 8 AM NOAA update, and behold, Matthew gets to pulverise Florida and thence Bermuda; well, may be. Offshore money launders; one of the deeper rings in Dante's Hell.

Amongst the quant crowd meteorology is up there with nuclear bomb design: lots of number crunching and such. The two models under consideration are considered the equation solving type: input the initial conditions in the environment, then calculate step by step based on the equations.
The best hurricane forecasting models we have are "global" models that solve the mathematical equations governing the behavior of the atmosphere at every point on the globe. Models that solve these equations are called "dynamical" models. The four best hurricane forecast models--ECMWF, GFDL, GFS, and UKMET--are all global dynamical models. These models take several hours to run on the world's most advanced supercomputers.

Other types of models are more or less pure data, time series analysis on steroids.

Our quants keep getting bested by their European forebears.

01 October 2016

The Inscrutable Chinese

For some long years, clinical trials conducted ex-US have been viewed with suspicion, not always veiled. Now, the Chinese government reveals the depth of the perfidy.
China's food and drug regulator recently carried out a one-year review of clinical trials, concluding that more than 80 percent of clinical data is "fabricated," state media reported.

According to reporting, some 80% of the active ingredients (API) in US drugs are sourced from India and China.
"I don't think that the 80 percent figure is overstated," Luo said. "If you compare Western pharmaceuticals manufactured overseas with those manufactured in China, there is a huge difference in the ingredients; the quality of the China-made drugs is appalling."

The real question is: how much of the US-bound API is unqualified? We may never know. One review of clinicaltrials.gov (the FDA's archive) showed 8365 entries citing "China" in the record. Oops. Such trials aren't necessarily exclusively conducted in China.

US FDA has been paying some attention.
Twelve out of the 19 overseas FDA warnings issued in 2015 by the FDA's Center for Drug Evaluation and Research (CDER) for cGMP violations were delivered to Indian facilities.

There are no patriots in capitalism's CxO suites.

30 September 2016

Thought For The Day - 30 September 2016

PROS has been using R for a while in development, but found running R within SQL Server 2016 to be 100 times (not 100%, 100x!) faster for price optimization.


What's that adage from Gandhi, "then you win."

25 September 2016

Thought For The Day - 25 September 2016

It's advert time, but you should watch out for reruns of "Parts Unknown", since Bourdain somehow managed to get Obama to have dinner at a noodle shop in the middle of Hanoi. They had an adult conversation of various topics. Now, think for a moment whether that could have happened with King Donald of Orange.

22 September 2016

Dew Drop Inn, The Good News Cafe - part the second

It's kind of quick for a part the second, but Nate Cohn has let another cat out of another bag.
Well, well, well. Look at that. A net five-point difference between the five measures, including our own, even though all are based on identical data. Remember: There are no sampling differences in this exercise. Everyone is coming up with a number based on the same interviews.

With regard to the Census/BLS earnings surveys, here's how to decline. More bad data. Yum. Ayn Rand would be proud to turn back the clock to 1800.

20 September 2016

Dew Drop Inn, The Good News Cafe

The regular reader may recall the admonition in these endeavors that macro analysis is fraught with danger: nearly all the data is from sample surveys, of varying quality and coverage. This reader, who hasn't been living under a rock or as "The Martian", is aware that 2015 income has been widely reported as having risen in the last year. For the first time in many years. The reporting, in some places, does admit that the 2015 level is still below 2007 levels; but who's counting?

Here's the public release:
The increases of 5.3 percent and 5.4 percent for family and nonfamily households were not statistically different.
In fact, if you read through the various sections, that sentence repeats and repeats and repeats...

A question about stat sig makes it all a bit worse:
The Census Bureau uses 90 percent confidence intervals and 0.10 levels of significance to determine statistical validity. Consult standard statistical textbooks for alternative criteria.
-- here

So, right off the bat, we've got squishing differences. By usually accepted stat sig, .05, it wouldn't be even close.

It gets better. There's a link to a spreadsheet with some underlying numbers. If you look at these numbers, the claim is that most are stat sig at .10!

If you follow the first quote link (page 6):
The effect of nonresponse cannot be measured directly, but one indication of its potential effect is the nonresponse rate. The basic CPS household-level nonresponse rate was 14.9 percent. The household-level CPS ASEC nonresponse rate was an additional 15.8 percent. These two nonresponse rates lead to a combined supplement nonresponse rate of 28.3 percent.

Following on, one finds the description of imputing missing responses:
Multiple imputation is a general approach to analyzing data with missing values. We can treat the traditional sample as if the responses were missing for income sources targeted by the redesign and use multiple imputation to generate plausible responses. We use a flexible semiparametric imputation technique to place individuals into strata along two dimensions: 1) their probability of income recipiency and 2) their expected income conditional on recipiency for each income source.
Much of that document is devoted to describing how this is done.

All surveys must deal with non-responses, so those in the business wouldn't find such a process out of band. For civilians, not so much. As I said, most likely believe that all these numbers are full measures, probably from IRS. Were that it were so. Without the raw data, it's not possible (well, for humble self) parse out whether the wonderful increase was an artifact of imputation. But, it could be.

So, should we guess that the Kenyan President ordered the minions at Census and BLS to put a heavy thumb on the scales? No. Having done data and stats for the government (not public facing, though), there's a good deal of resistance to the corner office dudes telling us what to do. Case in point: Farkas at FDA resigned rather than be party to the data fuck up that was eteplirsen. There's been a good deal of fiddling with the sampling underlying the surveys (yes, more than one for these data), and described at length in the background docs. Is all of this fiddling enough to turn nearly a decade of the 1% getting richer and the 99% having kids the other way 'round? Could be. Certainly a question those with the data to answer.

19 September 2016

Pandering Central

Well, being a biostat just got more difficult. FDA, specifically the Boss in Charge Dr. Janet Woodcock, decided by fiat to approve Sarepta's eteplirsen, branded Exondys. The MoA data presented by the sponsor was not statistically different from 0, in aggregate, and no evidence that what dystrophin (the target compound) was produced was clinically meaningful. Woodcock threw not only the outside panel of experts, but also her staff under the bus. Both sets of experts saw eteplirsen for what it is: a (estimated) $400,000 saline solution. You wonder why healthcare cost goes nuts? This is one of the main reasons. The DMD parents, who lobbied ceaselessly for approval, win. Or so they think. When the boys die on schedule, they'll be really angry. That's not a good thing. If Exondys made some level of difference for all DMD patients, there might be some sense to this. But Exondys only affects 13% of DMD patients.

Sarepta is on the hook to conduct a confirmatory trial. I wouldn't hold my breath; they'll continue to find excuses, just as they've done so far.

It's a sad day for data.

06 September 2016

Thought For The Day - 6 September 2016

Vegetarian, vegan, gluten free and such dieters can be tweeked by simply telling them a bit of history. Among the dinosaurs, the herbivores were the big, slow, fat, dumb ones; while the carnivores were the fast, lean, smart ones.

05 September 2016

NoSql? No Mas! No Mas!

First they ignore you, then they laugh at you, then they fight you, then you win.
-- Gandhi

It may be a tad early to gloat, but indications are that the NoSql zealots have waved the white flag and admitted that CAP is silly and doing ACID is way more fun. I suppose they deserve hemorrhoids, too. Couldn't happen to a nicer bunch of folks. A bit of innterTubes searching confirms the occasional tidbit that drifts by: the thought leaders in the NoSql cabal finally admit that transactions and central control over data consistency ain't such an old fashioned idea after all. They've discovered it, and will be patenting it soon. Not that NoSql datastores were any kind of innovation, either. Just VSAM files in ASCII with a buzzy name.

Told ya so.

Here's the main wave from the perpetrator of CAP. At least the principal instigator admits the error. The silly part of the whole episode is that partitions really are rare occurrences. They are just extended latency when they occur. Federated RDBMS, which have been around since about 1990 (the general principles since the mid 80s), have handled the situation. Here's a DB2 tutorial from 2003. The semantics are about the same with other such RDBMS.
As the "CAP Confusion" sidebar explains, the "2 of 3" view is misleading on several fronts. First, because partitions are rare, there is little reason to forfeit C or A when the system is not partitioned.

Fact is, distributed RDBMS (both single and multi- vendor database) existed since at least the early 1990's. And it wasn't just casual; here's a paper on security from Mitre (just down the road from Progress, which supported federation) from 1994. While it's no secret that I'm not a big fan of The Zuck,
Facebook uses the opposite strategy: the master copy is always in one location, so a remote user typically has a closer but potentially stale copy. However, when users update their pages, the update goes to the master copy directly as do all the user's reads for a short time, despite higher latency. After 20 seconds, the user's traffic reverts to the closer copy, which by that time should reflect the update.

So, what's the deal?
Another aspect of CAP confusion is the hidden cost of forfeiting consistency, which is the need to know the system's invariants. The subtle beauty of a consistent system is that the invariants tend to hold even when the designer does not know what they are.

Or, as many RM zealots tell us, high NF schemas reveal facts about data relationships we didn't know before. The schema specifies the invariants, but the data reveals the real world correlations.

Later in the piece, Brewer goes off the deep end:
The essential ATM operations are deposit, withdraw, and check balance. The key invariant is that the balance should be zero or higher. Because only withdraw can violate the invariant, it will need special treatment, but the other two operations can always execute.

This is the PollyAnna view of how banks run ATMs, and transactions generally. His description, and what is assumed by most civilians, is that Your Bank updates Your Account in real time, whether at an ATM or human teller. Not true. Accounts are reconciled (sometimes so as to generate overdrafts!)) in batch at some time EOD. Much of the big money made on bank hacking happens because the perps know that they have hours to do the deed before the accounts used are reconciled. Sometimes the intermediate accounts never see the deed. COBOL cowboys much prefer batch. They've been doing things that way for six decades. BASE has been the default paradigm in banking since forever.

So, with so many cpu cycles, SSD, XPoint, NVRAM, bandwidth, and the like available why would anyone drop OLTP/ACID on purpose? Back in the thrilling days of yesteryear when the 360 and 2311 DASD ruled the world, may be there was no other choice. Times, they are a changin.

[For those that keep track of such things, this musing and its title were started before I saw the adverts for the new Roberto Duran movie.]

04 September 2016

Physicists Aren't From Mars

Was toddling back from the grocery this morning, and the wind from Hermine made its way to South Butt Fuck. For reasons unknown, that reminded me of "The Martian", which reminded me that the most vocal complaint about the movie (and, I guess, the book which I've not read) was the initial premise, that a wind storm on Mars would be powerful enough to endanger the MAV.

But, to me anyway, that wasn't the dumbest McGuffin in the movie. That was the Rich Purnell Maneuver, whereby the Hermes mothercraft is slingshot back to Mars to collect Watney. The story takes place in 2035 and that's important.
The Mariner 10 probe was the first spacecraft to use the gravitational slingshot effect to reach another planet, passing by Venus on February 5, 1974, on its way to becoming the first spacecraft to explore Mercury.
-- Wikipedia

The movie shows Purnell sitting in a cold room with hundreds of servers connected to his laptop, ostensibly to do the harder than hard calculations. Give me a break. NASA had a 60 year Rip Van Winkle moment?

03 September 2016

Thought For The Day - 3 September 2016

Recently, I saw a comment on one of the many message boards that said, more or less, that the profit motive is the key to innovation.

Bullshit on that. Smart people will do smart things, if so allowed, irregardless. It's what they do; just like the scorpion, the frog, and the river. Paying stupid people more money doesn't make them any smarter. Or capable of doing smart things.

Money can't buy you brains. Not to put inside your skull, at least.

Watch Where You're Going

Perhaps the most useful service provided by Apple Watch is to provide some of us (humble self very much included) the motivation to prick yet another rosy balloon. There persist in being folks who assert that the Watch is just a better battery away from being the awesome device worn by cartoon cop Dick Tracy. It's such silliness. Please read Gordon's book. Technological progress isn't a matter of human imagination, pulling rabbits out of our collective hat (brain) deus ex machina, but rather figuring out how Mother Nature has put the world together. The earth, and all the resources in it, is finite. There's a lot less of them than 1800. Get over it.

We've arrived at the lithium-ion battery, and that's as far as we're going to get. At least for a watch form factor. Lithium is the smallest atom capable of supplying electrons, without the potential of blowing up (mostly, lithium batteries don't :) ). Until a neo-Edison invents a new atom, that is. For those wishing for more authority, MIT has a new piece on the problem. It fails to make the point that the periodic table has been fully populated, modulo accelerator generated nanosecond monster atoms, and thus the wall has been hit. Lithium is it. The hydrogen fuel cell has been around for a bit, but de-scaling down to laptop/phone/watch size is fantasy. To answer those banking on yet smaller chip nodes to make Dick Tracy's wrist thingee reality, I'll offer the following (admitting I'm not EE): at some node, Xnm (my guess for X is 10), control of, and compensation for, leakage and capacitance will drain more power than the Xnm node will save over X+nm. You read it here first.

It's really fun living in a time, the 19th century for example, when you know that you've only scratched the surface of that big ball of reality that is Mother Nature. Anything imaginable looks possible. Not so much when the periodic table is all there to see, thermodynamics have been codified, the Bohr atom described, and so on. Now we have productive corporations, even Apple, segueing to "services" to make moolah, because they see the end of growth from novel widgets.

We live in a Rand New World, battling with a Christ New World. In the Old World, recently ended, economic growth was driven by population growth with each new kid becoming a consumer, if only the necessities. The expansion of white folks into land lived on by others for thousands of years was a manifestation of that. Since contemporary Western economies no longer deal in necessities, population growth can't drive economic growth. We imported folks to do the heavy lifting, starting with black folks, but also Chinese and lower level European ethnics (from the WASP point of view, of course) all in service to the betterment of the few. With the industrial revolution came the problem of consuming output. In the Dark Age, when production was sorta, kinda one man makes one widget (and the widget went to the manor's Lord), that problem didn't exist. But with automated production, i.e. non-linear increase in productivity, the problem became manifest. If you invent a new automated, capital intensive, way to make widgets, how do you find consumers to soak up the deluge of widgets? The manor's Lord, and even including his spawn, won't be enough. In the last few decades, it's been an all consuming problem. Yes, that's a pun with a healthy dose of irony.

So, we have to figure out how to grow an economy with a relatively (with respect to recent history and living memory) fixed technology. If you look at FRED data, you'll see that USofA "output" has been increasingly non-widgets, not stuff, but "services". Unless the path down the road of income and wealth concentration is reversed, we'll be in a permanent Dark Age. The key to avoiding that is to solve the 1%'s refusal to admit that their wealth is mostly luck, so they shouldn't be allowed to keep it all. In order for an economy to grow, aggregate demand has to grow. The "recovery" from the Great Recession is the poster child for faux recovery. It's been driven by monetary manipulation, not demand growth. That 4.9% unemployment rate just reported is mostly the result of the denominator (the size of the labor force) shrinking. Consider that for a moment. The data increasingly confirm that most folks are still worse off than they were before the Great Recession. Hyper capitalism only works if the 99% consume the output, rather than just the 1%. They will only buy so many Ferraris. The Donald tries to hammer on that exposed nerve of angry white folks, but nothing in his history indicates that he would actually do anything good (increase aggregate demand) for the 99%. Certainly, his tax proposals are pure 1% welfare.

So, in the end, the Quixotic Quest for the ultimate battery is fantasy, propelled by dreams of 19th century invention. "We did it back then when we didn't know anything, so it should be easy now when we know so much more." Dirty Harry famously said, "A man's got to know his limitations". So does a nation. So do all nations. There are only so many elements in the periodic table (and a fixed supply of them here on the Blue Marble, and, no, mining them on other planets won't happen with chemical rockets), and they can be assembled into only so many molecules (far more on the organic side, but still true). Thermodynamics proves that there's no such thing as a free lunch. And so on. The great discoveries of the 19th and 20th centuries have brought us to the walls of this box we call reality, and the structure of our society and economy will either adapt to this very different reality, or we'll end up like the rats in the experiment. We can have continuing, robust, economic growth (with or without a battery an order of magnitude more potent than lithium-ion) without burgeoning population where just 1% skim off the production. We just need to spread the wealth around. It will be spent on fancy services that all can use happily. Ayn or Jesus? Take your pick.

01 September 2016

The Did It Again

After all these years of ORMs being discredited, one would think that folks intent on fashioning themselves as "data folks" would bite the bullet and learn about the RM and SQL. They are, in sum, only a bit of set theory. What quant would shy away from some basic maths? Maths is what quants do, right?

I guess not. An ORM for R has been announced. The end of the world is nigh.

What's even more perplexing: R can now be run, more or less, in-engine with all of the serious RDBMS. Why go backasswards?

30 August 2016

From Russia, With Love

While the right wing continues to bray about in-person voter fraud, which has never been documented above single digits anywhere, we get news that Russia (most likely) has been hacking away. Who would fund such an effort? Why, don't things go better with Koch? Of course they do. Security researchers have been warning us that the real threat of voter fraud lies in these automated systems, whose code is secret and security never independently vetted.

This is not new.
In January and February 2004, a whistleblower named Stephen Heller brought to light memos from Jones Day, Diebold's attorneys, informing Diebold that they were in breach of California law by continuing to use illegal and uncertified software in California voting machines.

This is Schneier's take
But while computer security experts like me have sounded the alarm for many years, states have largely ignored the threat, and the machine manufacturers have thrown up enough obfuscating babble that election officials are largely mollified.

If ever there were a computer/data/quant problem worth spending energy on, this is it.

As I said, things do go better with Koch.

29 August 2016

Thought For the Day - 29 August 2016

Yet more yakking from the Mainstream Pundit Class this morning that Yellen is about to "raise" interest rates. To be clear, the Fed has no absolute (fiat) control over any interest rate. Not even the Fed Funds rate, which is the one it's assumed to control directly. And that's the overnight inter-bank transfer rate. About as short term as one can get. It's "changed" by the Fed "suggestion" of some new higher/lower rate. Given the structure, banks comply.

Now, if the long term rate on corporate and Treasuries is determined by the internal rate of return on physical capital in the private sector, and it is albeit at some arm's length, then should the Fed/Yellen decide to push up Fed funds, one gets into a rate inversion. One caused by fiat, as it happens, not economic reality. The theory (almost entirely right wing, Greenspanian) is that raising Fed funds will filter out to Treasuries and corporate bonds. But how? The fact is, long term rates are in the crapper just because capitalists have run out of ideas. They're sitting on TRILLIONS of idle $$$, which they can't find useful ways to invest in their businesses. All these TRILLIONS have been chasing Treasuries for years, pushing down yields. The CxO class would rather get 10% (they hope, but so much moolah chasing Treasuries gets them 1/10th that) from Uncle Sugar fur shur, than build out new plant and equipment. Raising Fed funds rate isn't going to cause Gyro Gearloose light bulbs to start flashing over the heads of said CxO class members. They'll still be just as clueless as they are today. They still won't have any more idea how to generate 10% internal rate of return than they do today. All we'll get is an acceleration in wealth transfer from the many to the few.

So they demand that Uncle Sugar pay them 10% or so on Treasuries so that the CxO and hedge fund classes don't have to work for a living. Why should Uncle Sugar, i.e. the little people who pay taxes, agree to such a transfer of wealth from the 99% to the 1%? Where's the free market in all that?

Being a financial engineer in the next few years is an occupation which will keep the gastroenterolgists very, very busy. "Ulcers hab been berry, berry goo to me!!"

26 August 2016

Game Over

Courtesy of AnandTech:
This means a system with 256GB of DRAM and a 768GB Optane drive can essentially act like a system with '1TB' of DRAM space to fill with a database. The abstraction layer in the software/hypervisor is aimed at brokering the actual interface between DRAM and Optane, but it should be transparent to software. This would enable some database applications to move from 'partial DRAM and SSD scratch space' into a full 'DRAM' environment, making it easier for programming. Of course, the performance compared to an all-DRAM database is lower, but the point of this is to move databases out of the SSD/HDD environment by making the DRAM space larger.

So, what are we waiting for kiddies? 5NF is like falling off a log from now on. You can ignore the bitching in the comments, of course.

Robber Barons

I'm not a twit, but some who are post read access to their feeds. Adam Feuerstein, enfant terrible of Big Pharma and Fake Pharma (those many nano- and micro-cap companies that only take money and deliver nothing), does so.

He's been talking about Mylan/EpiPen and some related topics in the last couple of days. It's a hoot.

Have a gander.

24 August 2016

Out of the Mouths of Bastards

Regular reader may recall earlier musings where I put words in the mouths of Pharma CEOs with regard to monopoly pricing granted by FDA in the form exclusivity for some drugs for some period of time: "here's a life saving drug; so give me all your future life's earnings". Hyperbole, a bit.

Well, here comes Shkreli, again, weighing in on the EpiPen situation:
"Mylan sort of found themselves in my shoes in the sense that they bought a company, that company had a lot of old medicines, a lot of those old medicines had old prices that weren't reflective of modern prices," Shkreli said. "Three hundred dollars, they've been raising it slowly about 15 percent every six months which is relatively slowly -- not as fast as what I did. My guess is Mylan probably thinks that they could sell this thing for $1,000 a syringe. And with, now with these news reports, they probably won't."

Mylan paid a stupid price for the rights to EpiPen, and the rest of us get to pay a stupid price. They didn't invent the device or the drug that's dispensed, they just bought in both. And, by the way, the CxO crowd at Mylan have done rather well.
Proxy filings show that from 2007 to 2015, Mylan CEO Heather Bresch's total compensation went from $2,453,456 to $18,931,068, a 671 percent increase. During the same period, the company raised EpiPen prices, with the average wholesale price going from $56.64 to $317.82, a 461 percent increase, according to data provided by Connecture.

Vote for The Donald. He'll fix the problem, since it's the fault of all those Mexican rapists Obama has let in.

23 August 2016

I Have a Warrant For Your Arrest

A, allegedly large, subset of mainstream pundits muse that Joe Sixpack hasn't been active in the stock market since The Great Recession. Among the reasons given is that Joe figures the game is rigged against him, so why bother? To some extent Joe's right. One of the ways that rigging happens (mostly in small cap companies, to be fair to Big Capital) is how secondary offerings are structured. Among other things, they typically price from a bit to a lot below the current share price, and there's always the suspicion that the buyers knew enough ahead of time to short the stock and use the secondary shares to cover. Pure profit for a couple of days holding. Tough to prove, of course, but if it looks like a flock of ducks, it likely is a flock of ducks.

Another way is through attaching warrants to the secondary. Warrants, for those not in the know, are options to buy shares at a specified price for some term in the future. Often, but not always, the warrants are immediately effective. The trick to warrants: the specified price isn't carved in stone. The company can amend the deal any time it sees fit.

Here's an excellent example.

Original price: $2.25 to $6.00 per share
Today's price: $.35 and replacements at $.41

Such a deal. Of course, the share price of the company has been down below $.50 for some time.