I Still Hate Neil Irwin, part the fourth

The best part of not being an academic quant is that I don't have to read every word written by every academic quant on planet Earth. The worst part is the occasional time when an original insight turns out to have a name. Sigh.

In yesterday's Easter Homily, I mentioned an oft offered truth: the US buck is the global reserve currency, and for that reason we have to run a current account deficit against the Rest-of-World economies. The alternatives: 1) forsake reserve currency status or 2) forsake the deficit. Both ways be dragons.

So, as I'm sipping my coffee and reading my dead trees NYT, I find yet another reason to hate Neil Irwin. The piece is a cute Baby Econ essay on international trade (but, CarNation and BananaLand? sounds a bit racist, dontcha think?), and worth the read on its own. But what really frosts my cookies is that the reserve currency problem has a name:

There's even a name for this: the Triffin dilemma. In the mid-20th century, the economist Robert Triffin warned that the provider of the global reserve currency would need to run perpetual trade deficits to keep the world financial system from freezing, with those trade deficits potentially fueling domestic booms and busts.

The key idea is that if a President Trump or any other future leader really wants to reduce our trade deficits in a major way, that leader is going to have to rethink the very underpinnings of global finance.

Damn you, Neil Irwin!!

David and Goliath

There are two kinds of quant: the micro (firm/sector) and the macro (country/planet). The concerns of these two are not just different, but antithetical. The micro quant seeks to destroy the rest of the economy, and sweep up all the moolah to itself; while the macro quant seeks to keep the whole running in a long-term stable fashion. It's in the DNA of the micro quant to blame the damn gummint whenever a crash happens. Micro actors can't cause a crash, of course.

Over the years since the Great Recession, central banks including the US Fed have attempted to conduct trickle-down stimulus. The exercise has floated various asset markets, but hasn't had much impact otherwise. One of the problems facing the micro quant, one might argue the only real problem and one he can't do a thing about, is that the US buck continues to be the planet's reserve currency. There are two knock-on effects to the USofA being the global reserve currency. The first is that we have to run a current account deficit in order to keep the flow of Bongo Bucks into the rest-of-world economies, otherwise vicious deflation (what the US experienced for most of the 19th century, up to the end of it) kills off the whole. The second is that exporting 2nd and 3rd (and the occasional 1st) world countries fiddle their currencies downward vis-a-vis the US buck in order to bolster their exporting. One might observe that it's been America's lower class (not the 1%) that has sacrificed in order to raise some 2nd and 3rd world populations out of their poverty. If Trump ever figures that bit out, watch out.

All of that has been offered in these endeavors a number of times. Today we get some data on how even the Mighty Apple can't fight macro forces. Boo hoo.

... Timothy D. Cook, its chief executive, discussed the repercussions during an earnings call with Wall Street analysts. Two-thirds of "Apple's revenue is now generated outside the United States," he said, "so foreign currency fluctuations have a very meaningful impact on our results."

Not incidentally, I'm slogging through Gordon's book. And it is a slog. It reads like a MA econ thesis, with a footnote every sentence or two. But it does provide oodles of data to show that growth is driven by both aggregate demand and tech progress. And both are in short supply these days. Income/wealth concentration merges with mankind's meeting the limits of what can be discovered about the real, macro world. No one invented the elements of the periodic table, only found them. Having found all of them... well, you get the idea. Also in today's Times is a Morgenson piece on stock buybacks.

"You really have to ask why a company's board decides to return a big chunk of capital instead of replacing managers with ones who can figure out how to develop the operations," said Gary Lutin, who oversees the Shareholder Forum.

"If the board doesn't think it's worth investing in the company's future," Mr. Lutin added, "how can a shareholder justify continuing to hold the stock, or voting for directors who've given up?"

Again, more data that the CxO types have run out of ideas for growing their businesses organically. Finally, and you should look it up, is the case study of Valeant pharma. A very nasty bit of business, that.

In the real world, David always loses and Goliath always wins. Happy Easter all you Christians.

The Good. The Super. The Supreme. part the fifth

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

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

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

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

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

[part 2, 3 March]
As any Ph.D. quant or desperate stockmarket plunger knows, odds on an outcome change as the event's time approaches. In the case of sports events, the bookies adjust odds to keep the amount of moolah going to each outcome about equal. The same might be said of political events. If events proceed as at present, Trump becomes more unstoppable toward the nomination. As that happens, the RR has to gauge whether they can get a Trump White House, and if so whether he'd nominate a Super Scalia. Both are highly unlikely.

Here's a bit of Kristof

Me: He has a reputation as a straight shooter, but he lies. When PolitiFact was choosing its "lie of the year," it found that all its real contenders were Trump statements -- so it collectively awarded his many campaign misstatements the "lie of the year" award. And in backing him, you're pretty much guaranteeing a Hillary Clinton presidency. Indeed, because of Trump, the betting markets are now predicting a Democratic Senate as well.

Voter: Come on! Trump proved all of you pundits wrong again and again, and he'll do so again. And even those betting markets you like to cite -- they show Trump with at least a one-in-four chance of being our next president, and that's while other Republicans are trying to rip him apart. Just wait until the party rallies around Trump.
[my emphasis]

And, as expected, Obama is floating a "moderate". Take a small chance now, or a bigger one later. Brinksmanship in action.

Naming her would escalate political pressure on Republican Chuck Grassley of Iowa, the chairman of the Senate Judiciary Committee, who spoke fondly of Kelly in 2013 before the Senate voted 96-0 to confirm her for the Court of Appeals.

Not game, set, match. Too soon, but it's political waterboarding at its best.

[part 3, 17 March]
Thanks to a raging flu, I've been bedridden, so this is a couple of days late in typing.

So, in sum, Obama has taken the predicted tack: here's an old guy, with a mixed/neutral record. If you don't take it, here's your options.
1) Trump wins, and may be you a Super Scalia. But you're just as likely to get a Sherman or Taft, if Trump is pushed to make good on his anti-hedgies rhetoric.
2) Trump gets trounced by Hillary. The most likely outcome. She'll nominate a 40-something anti-Scalia, and won't back down. Constitutional crisis, or as the Rabid Right likes to say, "elections have consequences". Moreover, Trump could (still too dim) take down the Senate. Which is the main reason the RR is so intent on getting rid of him. Cruz is no better, just sneakier.

[part 4, 22 March]
Thanks to some reporting from the NYT, we now know that Roberts, not the most truthful of appointees during confirmation called for a dialing down of partisanship.

Last month, Chief Justice John G. Roberts Jr. delivered some blunt remarks about the Supreme Court confirmation process. The Senate should ensure that nominees are qualified, he said, and leave politics out of it.

Still, only the fourth inning.

[part 5, 25 March]
Well, more pressure. Chinese water torture, sort of. Or, waterboarding, if you're of The Donald tribe.
the polls building pressure.

Senate Republican leaders have said they will not hold hearings on any Supreme Court justice nominated by President Obama because they want to wait until the next president is in office. Seventy-three percent of Americans think this is being done for political reasons, while just a quarter say it is because that's what Republican Senate leaders think is best for the country.

And the Blue State Republicans are getting squeezed.

A week ago, [Sen. Mark Kirk of Illinois], who faces a tough reelection fight, became the first Republican senator to break with the rest of his conference to call for an up-or-down vote on Garland, according to reports. Kirk told a Chicago radio station that his colleagues should "just man up and cast a vote."

One out, bottom of the fourth.

The Good. The Super. The Supreme. part the fourth

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

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

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

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

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

[part 2, 3 March]
As any Ph.D. quant or desperate stockmarket plunger knows, odds on an outcome change as the event's time approaches. In the case of sports events, the bookies adjust odds to keep the amount of moolah going to each outcome about equal. The same might be said of political events. If events proceed as at present, Trump becomes more unstoppable toward the nomination. As that happens, the RR has to gauge whether they can get a Trump White House, and if so whether he'd nominate a Super Scalia. Both are highly unlikely.

Here's a bit of Kristof

Me: He has a reputation as a straight shooter, but he lies. When PolitiFact was choosing its "lie of the year," it found that all its real contenders were Trump statements -- so it collectively awarded his many campaign misstatements the "lie of the year" award. And in backing him, you're pretty much guaranteeing a Hillary Clinton presidency. Indeed, because of Trump, the betting markets are now predicting a Democratic Senate as well.

Voter: Come on! Trump proved all of you pundits wrong again and again, and he'll do so again. And even those betting markets you like to cite -- they show Trump with at least a one-in-four chance of being our next president, and that's while other Republicans are trying to rip him apart. Just wait until the party rallies around Trump.
[my emphasis]

And, as expected, Obama is floating a "moderate". Take a small chance now, or a bigger one later. Brinksmanship in action.

Naming her would escalate political pressure on Republican Chuck Grassley of Iowa, the chairman of the Senate Judiciary Committee, who spoke fondly of Kelly in 2013 before the Senate voted 96-0 to confirm her for the Court of Appeals.

Not game, set, match. Too soon, but it's political waterboarding at its best.

[part 3, 17 March]
Thanks to a raging flu, I've been bedridden, so this is a couple of days late in typing.

So, in sum, Obama has taken the predicted tack: here's an old guy, with a mixed/neutral record. If you don't take it, here's your options.
1) Trump wins, and may be you a Super Scalia. But you're just as likely to get a Sherman or Taft, if Trump is pushed to make good on his anti-hedgies rhetoric.
2) Trump gets trounced by Hillary. The most likely outcome. She'll nominate a 40-something anti-Scalia, and won't back down. Constitutional crisis, or as the Rabid Right likes to say, "elections have consequences". Moreover, Trump could (still too dim) take down the Senate. Which is the main reason the RR is so intent on getting rid of him. Cruz is no better, just sneakier.

[part 4, 22 March]
Thanks to some reporting from the NYT, we now know that Roberts, not the most truthful of appointees during confirmation called for a dialing down of partisanship.

Last month, Chief Justice John G. Roberts Jr. delivered some blunt remarks about the Supreme Court confirmation process. The Senate should ensure that nominees are qualified, he said, and leave politics out of it.

Still, only the fourth inning.

A Random Act of Kindness

Yet another report on RDBMS on HDD vs. SSD passes my bleary eyes. It's not materially different from all the others I've seen. And that's still a problem.

The whole point of SSD storage (or fully in-memory, a la HANA) is that Organic Normal Form™ schemas minimize storage footprint, maximize DRI, and are implemented through random I/O. Large RAID10 arrays of very fast fat HDD have been around for a long time, so SSD fast random I/O has been available longer than SSD, just not as cheaply.

The only meaningful test of RDBMS on HDD vs. SSD requires fully refactoring a lousy RBAR schema on HDD (the kind that "does transaction control in the client because that's what we're used to") to Organic Normal Form™ on SSD. Nobody bothers, that I've been able to find. It's too bad, because such tests end up being little more than rescaling of their respective sequential performance. And, yeah, SSD is faster. I think we knew that.

RIP DB2/luw

When the reports that MicroSoft would port SQL Server to linux, I had to check my calendar. Was it already 1 April? Remember, that story has appeared countless times over that last couple of decades on that day. Had the usual suspects gotten confused by leap day?

No, it turns out to be true this time. And long overdue, in a way. While I don't have any experience writing the SS engine, I'm willing to guess that it's almost wholly pure C++, that is not many calls to windows apis. It really shouldn't be a huge deal to compile to a linux target. And MicroSoft has had a couple of decades to pick away at the problem.

In the end, MicroSoft isn't likely to dent Oracle much, but it will kill off DB2 on linux. Why? Simple: if you're on linux and want a Big Deal database that isn't Oracle, you had to swallow hard and use DB2/LUW. It is, by the way, a fine RDBMS, treated as a red headed step child by IBM. Now, you can have the familiar SS. Also a fine database, by the way. Windows is horrid, but SS is just fine.

RIP

The Good. The Super. The Supreme. part the third

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

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

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

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

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

[part 2, 3 March]
As any Ph.D. quant or desperate stockmarket plunger knows, odds on an outcome change as the event's time approaches. In the case of sports events, the bookies adjust odds to keep the amount of moolah going to each outcome about equal. The same might be said of political events. If events proceed as at present, Trump becomes more unstoppable toward the nomination. As that happens, the RR has to gauge whether they can get a Trump White House, and if so whether he'd nominate a Super Scalia. Both are highly unlikely.

Here's a bit of Kristof

Me: He has a reputation as a straight shooter, but he lies. When PolitiFact was choosing its "lie of the year," it found that all its real contenders were Trump statements -- so it collectively awarded his many campaign misstatements the "lie of the year" award. And in backing him, you're pretty much guaranteeing a Hillary Clinton presidency. Indeed, because of Trump, the betting markets are now predicting a Democratic Senate as well.

Voter: Come on! Trump proved all of you pundits wrong again and again, and he'll do so again. And even those betting markets you like to cite -- they show Trump with at least a one-in-four chance of being our next president, and that's while other Republicans are trying to rip him apart. Just wait until the party rallies around Trump.
[my emphasis]

And, as expected, Obama is floating a "moderate". Take a small chance now, or a bigger one later. Brinksmanship in action.

Naming her would escalate political pressure on Republican Chuck Grassley of Iowa, the chairman of the Senate Judiciary Committee, who spoke fondly of Kelly in 2013 before the Senate voted 96-0 to confirm her for the Court of Appeals.

Not game, set, match. Too soon, but it's political waterboarding at its best.

[part 3, 17 March]
Thanks to a raging flu, I've been bedridden, so this is a couple of days late in typing.

So, in sum, Obama has taken the predicted tack: here's an old guy, with a mixed/neutral record. If you don't take it, here's your options.
1) Trump wins, and may be you a Super Scalia. But you're just as likely to get a Sherman or Taft, if Trump is pushed to make good on his anti-hedgies rhetoric.
2) Trump gets trounced by Hillary. The most likely outcome. She'll nominate a 40-something anti-Scalia, and won't back down. Constitutional crisis, or as the Rabid Right likes to say, "elections have consequences". Moreover, Trump could (still too dim) take down the Senate. Which is the main reason the RR is so intent on getting rid of him. Cruz is no better, just sneakier.

Men At Work

The knuckleheads at the NYT managed to keep me from my daily dose of dead trees all the news. Fortunately, today it's back. And what a wonder it is. One of the minor themes of these endeavors is, what is the relationship among declining real investment, income concentration, wages, aggregate demand, and economic growth. In sum, my view is that history has shown us that a broadly overweening middle class, has most of national income, is the prerequisite for a stable society and economic growth.

So, two related stories in today's edition. First, Eduardo Porter on the working class. Second, a debate, of sorts between Porter and Farhad Manjoo on the trajectory of automation.

The points of interest in the Porter piece can be summed up in this quote:

Stepping into the vacuum, the technologically endowed of Silicon Valley are talking about a future that bypasses the labor market entirely. They are offering up a universal basic income -- financed by taxing rich capitalists and an elite corps of computer programmers tasked with making sure the robots perform meticulously -- as the tool to satisfy people's basic needs without any work involved.

And, of course, the ultimate hypocrisy of the Redneck

Research by Suzanne Mettler and Julianna Koch from Cornell University underscores how any plan to help Mr. Trump's beleaguered supporters may end up entangled in ideological knots. They found that on closer inspection, many Americans who deny ever benefiting from a government social program actually received far more public support than they realized. And the most strenuous denials come from conservative Republicans.

Having seen some news footage from Red states in the last year or so, it's not that the Rednecks don't realize they get the money. They simply deny that the Damn Gummint is doing them a favor.

The debate/conversation:

If robots were eating our lunch, it would show up as fast productivity growth. But as Robert Gordon points out in his new book, "The Rise and Fall of American Growth," productivity has slowed sharply.
-- Porter

Bending the truth here. Yes, macro productivity numbers have stalled. But research going back to the beginning of the PC infestation has found that white collar computerization hasn't improved productivity. Some research makes clear what anyone who's been in an office environment for a while knows: fancy word processing and slide decks leads folks to worry about the sizzle and ignore the steak. FIRE sectors have been the areas soaking up "high value" talent over the last two or three decades. But, FIRE is all overhead from a macro point of view, so not only has computerization not improved FIRE productivity, it's all dead weight to begin with. On the other hand, there's no debate that the production of physical things has replaced humans with automation. Whether robots are actually cheaper, in the long run, is not certain. After all, you still have to pay the vig on the robot no matter how much you produce. Robots don't understand the pink slip.

More contradiction:

They see software not just altering the labor market at the margins but fundamentally changing everything about human society. While there will be some work, for most nonprogrammers work will be insecure and unreliable.
-- Manjoo

Anyone who's attempted to continue in the software world past age 35 knows where the end of a career occurs. Whether kiddie koders really should be the future of IT is a long discussion. Just consider that my generation perfected ERP, building out RDBMS systems from VSAM antecedents. ERP enabled the large productivity gains in manufacturing. Can the same be said of social networking, twitter, or e-commerce? Not.

Finally, we fall through the looking glass

We will be able to invent materials to precisely fit the specifications of our homes and cars and tools, rather than make our homes, cars and tools with whatever materials are available.

First, no amount of code can specify a molecule that physics says can't exist. At least, for more than a few nanoseconds. Second, and more importantly, a Star Trek replicator will chew energy like Pacman. Well, lots faster.

P-ing Into The Wind

Thanks, once again, to r-bloggers, an interesting piece floats past my eyeballs. Norm Matlof has his take on a new ASA paper (the link is in his piece), which purports to be a position paper on p-value. I caught it hot off the press, and was moved to open up the comment window and type away. Furiously. When I got to the point of posting, I reneged, mostly because my cavil didn't really amount to much and I wasn't all that interested in taking a pot shot at one who doesn't appear infected by lethal Bayesianitis. Stay away from the zombies.

I returned, since the piece was still on the front page of r-bloggers, and the number of comments was now well beyond 0. I suppose I should look at what others had to say. One comment, much shorter than what I had composed, made the point:

You seem to have misread the ASA statement. They did not reject p-values, merely the misuse and general overemphasis of p-values. p-values are fine, but can't be interpreted in isolation.
-- Clark

Looking, just now, there are further comments, some quite pointed. So far, oddly, none reflecting Bayesianitis.

So, what's so contoversial about p-value? Here is my take.

1:
p-value is "unintuitive". This derives from the Null Hypothesis Significance Test method. All of stat, whether The Frequentist or The Bayesian, came to be in the context of sampling from a population. The count of the sample may be minuscule relative to the population, and the exact (analytic) distribution function of the population may be unknown. Thankfully, the Normal distribution and central limit theorem were devised to allow tractable arithmetic for "large" sample sizes, where "large" really isn't; samples of minuscule size relative to populations were still OK. Count a big enough sample, and all distributions are normal "enough".

The purpose of "statistics", as I was taught in school, was to support inference of population parameters from samples (estimates). A "statistic" was shorthand for "test statistic", and not batting average or QBR or any of the other "advanced analytics" or Big Data manipulations.

NHST was devised as a kind of proof by contradiction exercise: assume that the estimate(s) from the sample data really are accurate to the equivalent population parameter. In order to contradict the assumption, i.e. the estimate is not accurate to the population, then some measure of the estimate vis-a-vis the population will be the decider. That's the p-value. If the calculated p-value meets some specified threshold, then we can reasonably conclude that our sample data couldn't have been drawn from the population. This works either for parameter from a "known" population, or when considering estimates of the same parameter from two samples.

2:
p-value threshold, e.g. .05 is arbitrary, and thus makes p-value analysis bad. Well, no. History and inertia have installed .05 as the standard threshold, but nothing in the math or arithmetic requires it. In the drug field, one occasionally sees both .01 and .1 used.

3:
p-value is commonly misrepresented, i.e. a p-value of .04 is said to mean "there is a 4% chance that the estimate is wrong". All the p-value means is that, for the level of significance chosen, if the value is smaller, then we conclude that the null hypothesis is false. Nothing more.

4:
The Bayesian remains unrequited, and demands that direct statements about the parameters be made from the data. Since the only objective reality is the sample data, and The Frequentist has demonstrated the analytic and computational limits of samples, The Bayesian resorts to fiddling the data with prior knowledge to devise alternative arithmetic. And that way be dragons. The Bayesian is requited, having devised a more satisfactory arithmetic for his purpose, but the fact remains that the sole objective reality is the sample data. The Bayesian hasn't, really, increased the information content of the sample, just imposed external bias to the data. I'm not a fan.

In the end: the sample data is the sole objective reality, and the only real analysis of that data is simple arithmetic. If you can't answer your question with that data, get better data; imputing external data into the analysis merely adds bias.

Doing a Headstand

A while back, one of these entries predicted that the Fed's short-term rate increases would run up against the long-term rate decline. I'm not exactly alone (Robert J. Gordon being my most famous brethren) in concluding that the driving reasons for collapsing long-term rates are two-fold:
1 - the CxO class, in the main, have run out of ideas for turning fiduciary capital into physical capital. It's the real productivity increase that pays the vig. Fiduciary instruments are just moving moolah from one pocket to another; no real return.
2 - the Giant Pool of Money continues to grow.

1 plus 2 equals an ever growing tsunami of moolah chasing limited fiduciaries, mostly US Treasuries. Price goes up, coupon is fixed, thus interest rate falls. Treasuries are auctioned, so the best the gummint can do is anticipate demand for an auction. The Almighty Buck remains the global reserve currency, so the Giant Pool fights amongst itself for places at the trough, driving down the interest rate. The Fed's quixotic quest is silly. The suits in the walnut panelled rooms can see what's happening at auction. They must be demented.

The unusual conditions defined by negative interest rates also complicate matters for the Federal Reserve, which has begun to raise short-term rates in the United States, only to see longer-term rates decline. That unexpected development is occurring partly because below-zero rates in European and Japanese bond markets have created greater demand for American bonds, raising their prices and driving down yields, which move in an opposite direction. Negative rates have not been common for very long and their consequences aren't entirely understood.

Sommer has been among the clearer headed mainstream pundits, but still refuses to delve into why real returns continue to decline. An Econ 101 course is in order.

Weird Bedfellows

Trump can be heard on the recording saying, "Better Business Bureau just sent it...this just came in."
-- The Donald/2016

Earlier in the history of the nation:

"I have here in my hand a list of 205 [State Department employees] that were known to the Secretary of State as being members of the Communist Party and who nevertheless are still working and shaping the policy of the State Department.'

-- Joe McCarthy/1950

The Good, The Super. The Supreme. part the second

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

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

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

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

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

[part 2, 3 March]
As any Ph.D. quant or desperate stockmarket plunger knows, odds on an outcome change as the event's time approaches. In the case of sports events, the bookies adjust odds to keep the amount of moolah going to each outcome about equal. The same might be said of political events. If events proceed as at present, Trump becomes more unstoppable toward the nomination. As that happens, the RR has to gauge whether they can get a Trump White House, and if so whether he'd nominate a Super Scalia. Both are highly unlikely.

Here's a bit of Kristof

Me: He has a reputation as a straight shooter, but he lies. When PolitiFact was choosing its "lie of the year," it found that all its real contenders were Trump statements -- so it collectively awarded his many campaign misstatements the "lie of the year" award. And in backing him, you're pretty much guaranteeing a Hillary Clinton presidency. Indeed, because of Trump, the betting markets are now predicting a Democratic Senate as well.

Voter: Come on! Trump proved all of you pundits wrong again and again, and he'll do so again. And even those betting markets you like to cite -- they show Trump with at least a one-in-four chance of being our next president, and that's while other Republicans are trying to rip him apart. Just wait until the party rallies around Trump.
[my emphasis]

And, as expected, Obama is floating a "moderate". Take a small chance now, or a bigger one later. Brinksmanship in action.

Naming her would escalate political pressure on Republican Chuck Grassley of Iowa, the chairman of the Senate Judiciary Committee, who spoke fondly of Kelly in 2013 before the Senate voted 96-0 to confirm her for the Court of Appeals.

Not game, set, match. Too soon, but it's political waterboarding at its best.

The Good. The Super. The Supreme.

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

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

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

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

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