30 August 2018

The Oracle Pooped

Yes, the Oracles pooped in FL a couple of days ago, which means there's been time for the pundits (and pollsters?) to do the usual post mortem to explain how they missed Gillum. It appears to be along the same line as 2016/Trump: ineffective stratification. Long time reader knows that one of the mantra of this quant is 'stratification is critical and it is haaahhd'. Getting to the moon was easier.

Given the typical size of such samples, ~1000, accuracy depends of either of two factors: the population is largely homogeneous with respect to the issue being measured, or strata/subsamples have to reflect both defining characteristics of subpopulations and their weights. Miss either, much less both, and your results don't hit the bullseye. The Manchurian President was, inadvertently, right. The pollsters didn't oversample the cities, but rather treated ex-urban areas in those three states as homogeneous to the cities. And, before 2016, the data on which the stratification was based that was an accurate criterion. Some people, voters, were fooled by lying. Some people, pollsters, were fooled by historical data.

It's worth mentioning that The Great Recession happened just because the Smartest Guys in the Room believed that explosive growth in house buying and thence prices was not only sustainable, but an organic growth. If something is too good to be true, it is. In the housing case, the rules of the game were changed, mostly by the Smartest Guys in the Room to their advantage. They were the piper and they played the tune. The rest of us paid the price.

So, with all that, here's one self-congratulatory missive.
A Change Research poll released last week showed Andrew Gillum winning the Florida Democratic primary with 33% of the vote — making it the only pollster to predict Gillum's stunning victory last night.

And, in a footnote, they tell us how they did it (well, not with trumpets blaring, naturally):
Post-stratification was done on age, gender, ethnicity, region, and 2016 Democratic primary vote.

Know your voter.

27 August 2018

The Asymptote of Progress - part the tenth [update]

Boy howdy! Yet more reporting on the next node of semiconductors. Another halfway step to the wall. Their best bit is a comment:
A few years ago, an ex-Intel buffin held a talk on chipmaking at the end of Moore's law. He predicted it would come at 2016-2020 and around 10nm.

That's really it then. We'll get another node at 7nm (eventually) but after that? Slow, incremental improvement.

Few people understand how big of a deal this is, but think about this. All of us grew up in a world where the power and speed of computers and electronics would double roughly every two years.

This exponential growth was a virtual certainty and it fed the biggest prosperity engine in human history. There isn't many fields and businesses that didn't in some way benefit from it.

And that's almost over. There's a few years left where it almost seems like nothing has changed, but it has.

Some of us have children. Those children won't live in a world with electronics doubling in speed and capability every few years.

The next generation of video games for them will look pretty much like the last one, unless you'll know where to look.

For them, it'll be nothing but slow, incremental improvement year after year: A 2% improvement here. A 1% improvement there. The way it was before the transistor.

The scariest thing is, what will happen to the economy. Trillions of dollars and billions of man hours have been spent in the shadow of Moore's law the past decades. What will happen, once there isn't a reason to get a new TV every 4 years? If computers only get a few percent faster every year, will computers become a thing you buy once a decade?
-- V900
[my emphasis]

The other half of the problem is that ole amortization boogie man. The article does recognize that bit of horror:
Development of leading-edge process technologies is extremely expensive. Every new node requires billions of dollars in investments. Those costs are eventually amortized over each chip the company makes, so to keep increasing R&D costs from driving up chip prices, foundries need to produce more chips.

And, naturally, chip makers need customers who make things with the chips that raw civilians buy with their incomes. More concentration of incomes to the 1% leaves an ever diminishing pile for the rest to buy things with said cheeps. The frog is beginning to feel the boil.

Just got back from my FNYT and coffee to find this new comment:
"Some of us have children. Those children won’t live in a world with electronics doubling in speed and capability every few years."

-- Manch

23 August 2018

Stop Pickin On Me

[apologies to Warren Zevon]

I went home with a waitress the way I always do
How was I to know she was with the russians, too?

I was gambling in havana, I took a little risk
Send lawyers, guns, and money
Dad, get me out of this, hiyah!

An innocent bystander
Somehow I got stuck between a rock and a hard place
And I'm down on my luck
Yes, I'm down on my luck
Well, I'm down on my luck

I'm hiding in [Mar-a-Lago], I'm a desperate man
Send lawyers, guns, and money
The shit has hit the fan

Send lawyers, guns, and money
Send lawyers, guns, and money
Send lawyers, guns, and money, hiyah!
Send lawyers, guns, and money, ow!

Given the reporting out today, yeah, the shit has hit the fan.

We Don't Need No Education - part the third

The right wing's efforts in Social Darwinism hit another home run. Cheer for the hole in one. It seems that teaching is the profession that only the lame want to enter.
[F]ewer college students are studying education. Enrollments dropped by 35 percent between 2009 and 2014, according to the Learning Policy Institute.

So, plenty of excuse to put an end to that pesky free public education. If you can't afford it, you must not need it and you can't have it.

22 August 2018

Another Guy's Rant - part the first

Every now and again, one comes across a rant with lots more words than one's own on the same subject. One just bows in humility. It should come as no surprise that NoSQL is one of my pet peeves. Grant Fritchey goes the extra mile. Bless his heart.

I Remember Mama

These missives have mentioned my forays with the TI-990 mini in two of its forms back in the late 80s and early 90s. The signature characteristic of the machine was its (nearly) registerless design, using main memory for both 'registers' and 'memory'. The motivation for the design was that, at the time, memory speeds and cpu speeds were near enough that a greatly simplified cpu had a cost/benefit edge over conventional designs. Or so the TI engineers thought. Outside of a few verticals, the 990 didn't make much of a splash. Notably, none of the mainframe companies pursued the idea.

Well, may be a bit of that 990 magic could be back. We have this reporting on nanotube memory. It's non-volatile, fast, and dense. A registerless machine, with a single level of storage, makes abundant sense. We'll just have to see.

It's also notable that the company has been around for nearly two decades attempting to get the stuff made. As ARM, it doesn't manufacture. The founders are ex-Harvard, although the Big Cheese isn't a techy. Hmmm??

Thought For The Day - 21 August 2018

Today The Manchurian President now knows what it's like to be on the business end of a double barrel 8-gauge shotgun loaded with deer slugs. Yes, there are such, though not in current production.

20 August 2018

Yes Ore No - part the second

There's a few line story in the news today. It seems Wilbur Ross will be braying at Century Aluminum in Kentucky on Wednesday; a smelter is re-opening idled lines. The Manchurian President wants credit. Recall the first entry in what is now a series: the USofA has little iron ore and virtually no bauxite (in global resource terms).
-- The Manchurian President/2018

Of course, that's pure nonsense. In the financialized economy of the 1%, national steel and aluminum are completely irrelevant.

Now, you can't have steel, or aluminum, without the source ores. It's not a case of 'where there's a will there's a way'. Yeah gotta have ore. And for aluminum, lots o electrons.
Alcoa, formerly the Aluminum Company of America, and another American company, Century Aluminum, have opened factories like this in Iceland, and closed factories in the United States, for a simple reason: Electricity is much cheaper here.
Bauxite may be mined and refined in Jamaica, shipped to northern Quebec for smelting, then hammered into car parts in Alcoa, Tenn.

Cheap electricity is what supports smelting aluminum; it requires prodigious amounts of leetle electrons to turn ore into metal. That Kentucky smelter exists because of the TVA.
In Washington state, for instance, the smelters that used to operate near the hydroelectric power plants along the Columbia River have been priced out by the power-chugging server farms of tech companies such as Microsoft.
Aluminum has been called "solid electricity" because of the amount used to make it (13,500 to 17,000 kWh per ton). That's why most of the aluminum smelters were built where the Tennessee Valley Authority and the Bonneville Power Authority could deliver cheap hydroelectric power.

So, a huge Pyrrhic victory for jingoism. Swell.

17 August 2018

Thought For The Day - 17 August 2018

As if one needed yet more reporting on Turkey basting and the US Buck's supremacy. Not to mention all those trillions looking for hefty returns at low risk, we get some briefing.com words(7:55):
Looking at other markets, the Turkish lira is down 4.2% against the U.S. dollar this morning, on track to end its three-day rebound, but still remains a ways above its all-time low, which it hit on Monday. Meanwhile, U.S. Treasuries are higher, pushing yields into the red, with the benchmark 10-yr yield down two basis points at 2.85%.

Or, as we say (or so I'm told) in the Navy, "Dive motherfucker!! Dive!!!" Yeah, there's no advantage to being the world's reserve currency.

15 August 2018

New Gold - Part the Sixth

The Manchurian President continues braying that the USofA is the victim of bad the international monetary and trade deals. Day after day. While these missives have explained why it is that the US Buck being the world's reserve currency actually gives us the royal flush in spades hand. The Manchurian President is either too stupid to figure that out, or he's just lying to cover his ass. Blame the global elites and their Democratic enablers. And so on.

Well, today brings yet more reporting that the USofA is gutting lots of the world.
A crumbling currency inflicts many damaging consequences: Companies that borrowed in dollars — the global reserve currency — have to come up with steadily more money in their local currencies to repay U.S. dollar debts. Having to do so also raises risks for the banks that lent to them.

That's the kind of squeeze that ignited the catastrophic 1997-1998 Asian financial crisis. A currency disaster in Thailand infected the entire region, and East Asian economies absorbed devastating damage.
[my emphasis]

We're the victims. Yeah, sure.

And, how might other countries manage this:
And emerging-market countries learned lessons from the debacle two decades ago. Many piled up reserves to fend off speculative assaults on their currencies. At the start of 1997, emerging-market countries' reserves amounted to barely 6 percent of their economic output. Now, they equal nearly 18 percent, according to the Institute of International Finance, a banking trade group.

Guess what?? All the US Buck reserves came from our current account trade deficit. No trade deficit, no expanding New Gold stock, no expanding world market, world market deflation. You don't want to live in that kind of world. Arithmetic doesn't lie. Yummy.

13 August 2018

New Gold - Part the Fifth

Here we go again. There are upsides and downsides to the US Buck being the world's Reserve Currency, aka New Gold. One of the side-effects, in both directions, is on domestic interest rates. Many's the time these missives have called out the repercussions of rate inversion. Well, here's some more reporting on where we are.
It has been a long bull run for both stocks and bonds, and borrower defaults have been at historically low levels for years. As has the spread -- the difference between the yields -- of Treasury-backed securities and riskier bonds. But as interest rates continue to rise, and some companies and other borrowers fail to meet their debt obligations, defaults will inevitably increase along with the spreads.

The implication, of course, is that longer term private debt has been written at artificially low rates, and thus high prices. Again, there's nearly $2 trillion in idle money just on corporate balance sheets (see recent missives). Not to mention the 1% and .1%. All seeking 10% and no risk.

So, that reporting was a few days ago. Today we hear another siren, sounding in Turkey, of all places. Much the same as China over the last decade or so, lots of real estate building. As the saying goes, there's only so much time and so much land. You'll never get the former back once it's gone, and there's no more of the latter. Easy money in real estate.
Mr. Lee noticed that Turkish banks were borrowing in dollars to make other loans to fast-growing Turkish companies. He also saw that, over all, Turkey's economy was growing more reliant on financing from foreign investors. It struck him as similar to what had happened to Thailand in the years before the Asian financial crisis in 1997.

Gold giveth and gold taketh away. As with the Great Recession, lots of idle money, unable to find productive homes in physical capital, chases real estate.

09 August 2018

Blues for Donald in D# Major

The most important news out of Tuesday, not widely discussed that I've seen, is that right-to-work got drowned by a blue tsunami in Missouri, the 'Show Me State'. It seems that lots o folks there have figured out that The Manchurian President has been lying all the time. As Rachel Maddow tells us, "watch what they do, not what they say".

The Manchurian President keeps taking from the many poor and giving to the few rich. "Vote for George O'Brien, get Charley off the MTA".

Real growth can only happen if aggregate demand grows, and that has never happened while income and wealth concentrate as they have over the last few decades. Rich people don't buy/spend as much of their moolah, per dollar, as the poor. They chase instruments, and they've had a big appetite for high-return/low-risk such; not that such actually exist, naturally. Which gave us the Great Recession. What will be next? I don't have a firm answer. May be soon.

Along that line, we have this reporting that Treasuries are inching toward 3%, and the pundits are losing their minds. Let's see. Warren is sitting on $116 billion. How much is corporate America sitting on? $1.9 trillion as of the end of 2017. The Smartest Guys in the Room can't figure out how to make real investment. In due time, not much IMHO, they'll go back to chasing Treasuries and driving up price once again. Rates will collapse.

Why? Well, my frenemy Neil Irwin reveals why he's sorta, kinda Luddite.
I think most digital technology is more mature than we think. People have been using personal computers since the 1980s, and smartphones for more than a decade. And the thing about a mature product is that improvements tend to be marginal rather than transformational.

What these missives have been naming, 'The Asymptote of Progress' for a long while. Marginal 'improvements' don't generate significant growth or return, naturally. The latest iPhone doesn't have the impact of the steam engine. That pesky asymptote gets flatter by the day.

02 August 2018

Fool's Goal

Are you old enough to remember pets.com? Cute Lamb Chop-ish sock puppet spokescritter. Lots o fun to watch the adverts. Didn't last all that long.
It began operations in February 1999 and liquidated in November 2000.
[the wiki]

Before I looked it up just now, I hadn't realized just how short its life was. Poor doggy. Got hit by bus.

Today's missive is about a similar ploy: dinner over the internet. There's in the neighborhood of half a dozen such outfits. Today's report is for (7:09)Blue Apron:
Reports Q2 (Jun) loss of $0.17 per share, in-line with the Capital IQ Consensus of ($0.17); revenues fell 24.6% year/year to $179.6 mln vs the $188.51 mln Capital IQ Consensus.

Customers decreased 24% year-over-year and decreased 9% quarter-over-quarter as the Company progresses through the aforementioned transition period. Average Revenue per Customer was $250 in the second quarter of 2018 compared to $251 in the second quarter of 2017, and $250 in the first quarter of 2018.

Going the way of the sockpuppet doggy? Only time will tell.