31 August 2019

Splain This to Me

Just saw another advert for an in-home exercise machine, Nautilus I guess. These sorts of adverts started, near as I can recall, with Peloton. These adverts show a sweaty thin and comely female on the machine in an upscale apartment, with a vista view and smack dab in the middle of some living space. This Nautilus advert had the treadmill a couple of feet from the dining area.

Now please tell me: why would a sane and rational human want their dining area to smell like the bottom of a gym locker? Or do sweaty thin and comely females smell like orange blossoms?

C Is a Passing Grade

Generally, Bob Rudis's posts (the ones that show up on r-bloggers, anyway) are useful to read. This one, OTOH IMHO, didn't even hit the dartboard, much less the bull's eye. That it continues the 'get off my lawn' meme of the geezer crowd is what appeals and compels this missive.

The lament, especially among the ever decreasing number of assembly coding geezers, is that 'these kids don't know anything!' Which, considering how easily gulled in their political decision making they've shown, is obvious.
Prior to this, most of the assignments were just variations on each other (read from stdin, loop with conditionals, print output) with no program going over 100 LoC (that includes comments and spacing).

OTOH, using FizzBuzz and R to demonstrate that a 14 day C++ course leaves the student unprepared to code professionally is a tautology, is kind of silly. R is hardly the archetype of language architecture rectitude.

1) as a low level language (it's not, absent many libraries, high level), those are the things one needs to know from the get go; and the notion that code blocks are short on purpose is definitely part of today's modular approach.

2) the topics described in the post are dog standard 101 fare in any low level language; it's worth remembering that C/C++ is 'the universal assembler' and the notion the students would get much more than that in 14 days is silly.

3) not getting to OO semantics and syntax in 14 days should not surprise; C++ is not an OO language by design any more than R is; Bjarne called it "C with Classes" and C++ remains the same.

4) virtually no kiddie koder gets a job (as programmer or scientist) writing C/C++; those days ended more than a decade ago with the rise of the innterTubes and PHP/java/python/etc. Web Frameworks. They're more likely, if sucked up by Corporate IT, slipped in with the Indians maintaining 30 year old COBOL applications. I'm not kidding.

5) thus, kiddie koders (and a lot of re-purposed geezer mainframe assembly cowboys) will never write a line of semantic C/C++; or even PHP/java/python/etc.

6) if one simply looks at titular coder adverts, not only are base languages seldom demanded, but some specific Web Framework is the demand; and file dump oriented SQL ('we prefer to do transactions in the client').

7) using R as the platform to complain that kids can't code any more is hubris in the extreme, since there isn't a much more platypus language on the planet (modulo hundreds of home grown 'high level' proprietary languages, often with home grown OS).

So, yes kids don't know nuthin no more. But so much of coding these days is driven by teen age 'entrepreneurs' who only want to get rich with the next whiz bang innterTubes money spinner, marginally useful, and not fatally buggy, next week. Almost all fail. But that's always been true. The difference is that the VC community has been valuing slick tongued teen agers, since at least when The Zuck crawled out of the muck under the Charles, over wizened veterans.

It would be of interest to see what a 14 day syllabus for FizzBuzz worthy C++ (and fluent C++ semantics) would look like. If one undertakes to teach some language in 14 days, only z assembler is a dumber choice than C++. Teach 'em javascript or python or the flavor-of-the-week Web Framework. Or, in a pinch for the engineer types, FORTRAN.

30 August 2019

Luddites Unite!

Yet another reason to treat your smartphone like a mobile telephone. Sheeple bedazzled by bling.

Thought for the Day - 30 August 2019

Oh, wouldn't it be loverly if Dorian makes a direct hit on Mar-a-Lago, and Puerto Rico sends a bunch of folks to toss paper towels at The Manchurian President?

27 August 2019

My Friend

Long before I read the Gordon book, I found it intuitively obvious that overall progress from the middle of the 19th century through most of the 20th could be traced to filling out the periodic table. Turns out, which I had long forgotten, that the table as we know it today is credited to Mendeleev. And the year was 1869.

A helpful review is in today's NYT.
"In a physical mixture, you get the sum of the parts when you mix A with B. In chemistry, you combine A and B and you get something qualitatively new."

Counterintuitively perhaps, is the fact that much of the table was constructed without understanding how atoms were built. That didn't happen until Bohr (1913). Kind of like a blind monkey typing out "Macbeth".

25 August 2019


Regular reader of one version of these endeavors is confronted with the following each visit:
It's the Distribution, Stupid

Yes, Bubba re-purposed. But the reality of that notion increasingly becomes, in the words of Dr. McElhone, "intuitively obvious to even the most casual observer".

The problem, however, is significant to both the soft-hearted lefty and the cold-hearted quant. Both groups need stable, yet increasing, macro demand in order to gain their ends. Those ends, at least superficially, are contradictory, yet just a cursory look at the data from the USofA from the 19th century shows how life goes when the 1% really do rule the roost.

Which brings us to Binyamin Appelbaum, now above the pay grade of economics reporter.
[T]he difference in average life expectancy between poor and wealthy women widened from 3.9 to 13.6 years [from 1980 to 2010].

This piece makes the point, the first time I recall from a mainstream pundit, that quant is hamstrung vis-a-vis the real sciences in the way frequently mentioned here:
Markets are constructed by people, for purposes chosen by people — and people can change the rules.
[my emphasis]

That sentence is a big deal. Quant analysis requires a stable set of rules, and events driving data within known limits. I talking to you Contrywide and Blythe Masters. They bent and changed the rules in ways that didn't enter the data until it was too late.
When wealth is concentrated in the hands of the few, studies show, total consumption declines and investment lags. Corporations and wealthy households increasingly resemble Scrooge McDuck, sitting on piles of money they can't use productively.

Again, a frequent observation here. Inflation is rampant in Treasuries just because the McDucks are scaredy cats and are all chasing said Treasuries. Price goes up when demand goes up. Add to that pressure of the Tyranny of Fixed Cost, and the demand for increasing consumer demand, and the capitalist's gonads get sucked up. As production becomes ever more capital intense, the only way to drive down average cost is to increase output, since variable (aka, labor) cost becomes a decreasing proportion of BoM. The cost structure can't respond to falling demand proportionately. However, eliminating labor means, certainly, eliminating middle and lower class earnings. The other option is to shift production to services tailored to the rich. I bet you saw that coming.

24 August 2019

The Final Solution

Mueller (75), likely because he saw he had no skin in the game, chose to slink away, gonads left on the ground. Not the Mueller we were led to believe.

Powell (66), on the other hand, has very much skin in the game. And he knows it. And, further, he knows that his quant buddies in the hedge funds, banks, and CxO class who need a stable economic platform on which to execute their wizardry, are finding their fancy models don't work when there's a paranoid six year old driving the machine.

Unless Powell makes a straightforward statement that the carnage happening both in the asset markets and the real economy are being caused by The Manchurian President's stupid behavior, he can't help them. The Manchurian President has to be slapped down by the adults. Powell has to be the first to do his job. Just because The Manchurian President gave the 1% so many gifts, doesn't mean he's a stable, rational genius. He is a fucking moron, and Powell has to go on the record. If he doesn't, the global economy is in the toilet. We'll see.

"[T]rade wars are good, and easy to win."
-- The Manchurian President/2 Mar 2018

23 August 2019

Merchant of Crash

Not for the first time, but yet another event to re-kindle fair reader's interest in Mercantilism. And, since this is the era of The Manchurian President, we know that he's stepped into a pile of shit. And the rest of us get the slime and stink.

China's gone after oil. As well they might. They ain't stupid. They know the balance of Mercantilism is largely in their favor. The USofA exports raw resources to China, and imports finished goods from China. Archetypal wrong end of the deal. That being a bad deal was understood by The Real Adam Smith lo those many centuries ago. The Right Wingnuts still think that the 19th resource gorging USofA economy can be re-kindled if only we slay our enemies. Good luck with that.
Oil futures dived Friday morning after China announced it would impose retaliatory tariffs on $75 billion worth of imports from the U.S., including a levy on crude, amplifying concerns about the global economy and demand prospects for crude.

West Texas Intermediate crude for October delivery CLV19, -1.88% on the New York Mercantile Exchange — the U.S. benchmark — fell $1.64, or 3%, to trade at $53.71 a barrel, suffering the worst of the selloff after reports said China's tariff list includes a 5% levy on imports of U.S. oil.

21 August 2019

Book Larnin - part the second

A couple of, one might think, disparate threads woven together today. We'll start with a long piece in the NYT delving into The Manchurian President's hitman at the Fed opening the barn door so the horses can run wild. All in the name of loosening the reins on our fantastic capitalists.
Some of the changes, seemingly incremental and technical on their own, could add up to a weakening of capital requirements installed in the wake of the crisis to prevent the largest banks from suffering the kind of destabilizing losses that imperiled the United States economy.

You know, the bankers would never put the rest of us at risk so they can make more than the market rate of return. Now would they?
The tinkering is being driven by Randal K. Quarles, the Fed's vice chair for supervision, whom Trump nominated in 2017...

We all know, of course, that he has our best interests (he he) at heart. Here's a short bio
As [George W. Bush's] Under Secretary, Quarles led the Department's activities in financial sector and capital markets policy, including coordination of the President's Working Group on Financial Markets, development of administration policy on hedge funds and derivatives, regulatory reform of Fannie Mae and Freddie Mac, and proposing fundamental reform of the U.S. financial regulatory structure.
[my bold]

In other words, an architect of the regime which crashed the world's economy.

Which brings us to Gary Marcus, who's in the news recently about his growing angst over what AI is and what AI can do. This not hot off the presses, of course.
And when I look at current AI through a perspective of human cognitive development — how children learn — I'm very dissatisfied by the state of AI. There's no AI that's remotely as clever as my four year old or my six year old.

Which reminds me of something My Pappy included in his war stories (WWII). For most of the War he was in North Africa, Algiers. He was in the Signal Corps building aircraft beacons. His unit was housed in a commandeered mansion, complete with houseboy. Said houseboy was somewhere about 10 and, according to Pappy, spoke about 6 languages. I recall hearing this when I was in high school, trying to learn languages. For a long time I was puzzled by this, but eventually the answer dawned on me: a child learning language isn't learning *a* language at all. The child is learning communication with humans, associating sounds with concrete things and even more abstract concepts. As such, each discrete language from the adult point of view, is just the sounds needed to communicate with certain adults; it's all one language to the child. So the sounds for the Brits are different from those for the French and from those for the Arabs. And so on ad infinitum. It's only later, when language becomes text, that difficulty arises. Can AI do that? I do wonder.

And of course, the coup
I have been saying for several years that deep learning is shallow, that it doesn't really capture how things work or what they do in the world. It's just a certain kind of statistical analysis. And I was really struck when Yoshua Bengio, one of the fathers of deep learning, kind of reached the same conclusion. I used to say this and people looked at me funny and got mad at me. And then suddenly here was one of the leaders of the field noticing the same thing.
[my emphasis]

Another recent piece tells the tale of how all that big data gets built to train AI. It's not high tech.

In all, we find the fact events drive data, not the other way around. Surprise, surprise.

16 August 2019

Thought For The Day - 16 August 2019

How's about the USofA swapping Puerto Rico for Greenland? Denmark gets a winter wonderland vacation spot, and we get an air force base to bomb Russia back to the stone age. Not that The Manchurian President, or Moscow Mitch, would consider that. But, they could build a glacial golf course, with an Ice Hotel on the first hole.

And it makes an equal swap: both countries still have the same number of territories.

GE Whiz

OK, so the GE shit has hit the fan. The thrower has face validity, in that he exposed Madoff before anyone. What's odd, at least to me, is this statement:
General Electric CEO Larry Culp released a statement following the release of Markopolos' report, saying, "GE will always take any allegation of financial misconduct seriously. But this is market manipulation — pure and simple. Mr. Markopolos's report contains false statements of fact, and these claims could have been corrected if he had checked them with GE before publishing the report. The fact that he wrote a 170-page paper but never talked to company officials goes to show that he is not interested in accurate financial analysis, but solely in generating downward volatility in GE stock so that he and his undisclosed hedge fund partner can personally profit."
[my emphasis]

One might take that bold text to mean that GE has some non-public information which 'explains' the accounting questions. That statement, in and of itself, might give one pause.

15 August 2019

I Still Hate Neil Irwin - part the fifteenth

Neil keeps inching toward the truth, which is, of course, that the CxO class has been shivering in their boots for years. As has been predicted here for years, rate inversion was inevitable, just because those holding all that TARP, QE, and tax cut moolah accumulated over the last decade (and longer, to be honest) have been chasing fiduciaries rather than buying plant and equipment. And, naturally, driving up the price of Treasuries and driving down the interest rate. The Fed has only the most tenuous control of any interest rate, and that is a very short term one. Jawboning by fiddling with the Fed rate only works when doing so makes a modicum of sense. Only the Right Wingnuts foist the pablum of 'investment by business will end income inequality and create more, and better jobs'. Laff my ass off. And so on. Killing off the middle class consumer makes the Masters of the Universe feel better, which is to say, superior, but ends up killing the whole kit and kaboodle. It's been the American way from the get-go.
If you're a corporate C.E.O. making investment decisions, the environment in which operate is shifting beneath your feet. Even with a seemingly bottomless supply of cheap capital available and a very low corporate tax rate, it feels awfully risky out there.

And indeed, through the first half of the year, falling business investment was a drag on American economic growth.

And, by the way, the environment hasn't really shifted. Yes, The Manchurian President's tariffs are stupid and paid for by the USofA consumer, but the assault on the middle class has been ongoing since the start of the Housing Bubble. Hell's bells, the bubble happened just because the Masters sought risk-free (or, at least, risk-nearly-free) returns after the DotBomb. Fiduciaries looked like the best bet, since they didn't depend on finding profitable physical placements. What sort of fiduciaries should they embrace? Well, home mortgages have been rock stable for decades, so why not make lots of high priced ones, and package them up in securities? Just write some paper, and all those strung out lower middle class dopes would keep paying their escalating ARM mortgages and make the Masters rich. They wouldn't all default at once, would they? Of course they won't.

Laffer, where are you? If ever Supply Side Economics would be proven correct, the last decade of super cheap capital should have proved it. The unleashing of massive investment in physical capital by the Masters of the Universe!! Nah. The Masters have all chased Treasuries, happy to take the guarantee of paltry interest (paid for with the taxes of the underclass, of course). Masters, my sphincter.
Researchers from Wall Street financial firms and the Federal Reserve have concluded that companies used repatriated funds mostly to buy back stock.
-- Jim Tankersley/2019

Lots of knuckleheads bought a piece of some bridge over the East River.

13 August 2019

The Red and The Blue - part the second

Well, what has been prophesied (there are only three rural-majority/Red) states in these endeavors has come to be recognized by the mainstream pundits. Good on me.

Now if only the Dems can get it through their thick skulls that rabid rural rednecks are never going to be anything but rabid bible thumping (they consistently quote scriptur defending slavery and racism, dontcha know?) racists, and concentrate on the cities/suburbs where somewhat more open minds live. Again, it was a mere 78,900 rednecks that put The Manchurian President on his throne. If the Dems can't find that many recalcitrant voters in Blue Cities even in Red States...
The stakes in the struggle for Texas' big metro areas are rising because they are growing so fast. While the four major metro areas cast about 60% of the statewide votes in the 1996 presidential election, that rose to about 69% in 2016 and 2018, Murray and Cross found. Murray expects the number to cross 70% in 2020.

And the concentration of Texas' population into its biggest metropolitan areas shows no signs of slackening. The Texas Demographic Center, the official state demographer, projects that 70% of the state's population growth through 2050 will settle in just 10 large metropolitan counties. Those include the big five urban centers that O'Rourke carried as well as five adjacent suburban counties; those adjacent counties still leaned toward the GOP in 2018 but by a much smaller cumulative margin than in the past. Overall, O'Rourke won the 10 counties expected to account for the preponderance of the state's future growth by a combined nearly 700,000 votes.

As the report does point out, Southern college education generally and Texas in particular, is more Bible thumping than in the liberal (in the classical meaning of the word) states. So just being educated doesn't strongly mean intellectual honesty. But it's a start. And the simple fact that polyglot cities in due time expose even rednecks to diverse peoples and leads to ever less discrimination.

12 August 2019

Just Your Average Joe

A few times over the years of these missives, there's been occasion to point out the difference between average cost pricing and marginal cost pricing. In particular, the differential effect of a high fixed-cost burden on pricing. Well, here we go again, with a report in the NYT about medical tourism.

Of special interest is the part the doctor's fee plays in the scenario:
Dr. Parisi, who spent less than 24 hours in Cancun, was paid $2,700 or three times what he would have received from Medicare, the largest single payer of hospital cost in the United States.
[my emphasis]

Once again, we see the tyranny of fixed cost in action.
In the United States, knee replacement surgery costs an average of about $30,000 — sometimes double or triple that — but at Galenia, it is only $12,000.

So, it's clear that the cost differential isn't labor, since the doctor got triple what he would have in the US. It's support of the hospital that's the devil in the details.

How are the extra dollars spent? Perhaps some group of health economists have/will manage to do a comparative study, although I doubt many hospitals will be willing to spill the beans. Does most of that large difference go to the CxO class of hospital admin? Or does it subsidize useful, but little used, equipment like MRI or hyperbaric?

And, oh yeah, the patient got a check for $5,000 on top of it all.

The unintentional (one hopes) side-effect of syphoning off such patients from US hospitals is that average cost of such interventions here will go up; there's just fewer patients using these interventions. Since total revenue diminishes, other interventions may also be re-priced upward to cover the 'shortfall'. Guess who'll likely be those patients? The poor, of course.

The tyranny of fixed cost visited my household. For reasons best left unsaid, the roof of the house is now covered with solar panels. The local electric company dragged its feet for months in the process of wiring in the panels. So far at least, electric companies are required to permit clients to co-generate. They don't like that, since it limits their revenue. The number of solar houses in any given utility's area is likely just in the noise, but once the number of installations begins to have a measurable effect on defraying the fixed cost of generation, transmission, and maintenance the lobbying to prohibit new installations and disenfranchise existing installations will gain much speed. There's no such thing as a free market when it threatens vested interest.
The utilities have successfully waged battles to squelch rooftop solar in states such as Arizona and Indiana, mostly by wielding political muscle to reduce compensation to customers for electricity fed back into the grid.

And, in yet another case of, if you can't beat 'em join 'em
For all the conflict surrounding rooftop solar, solar energy last year generated just under 1 percent of U.S. electricity, and utility-scale solar farms have three times the generating capacity of residential solar installations. That disparity is likely to grow.

Finally, the coup
And as more and more customers install solar panels, utilities earn less and less revenue, which means that rates for remaining customers must increase — which drives even more of them to rooftop solar. As battery storage becomes cheaper, some customers will be tempted to leave the grid entirely. A paper published by the Edison Electric Institute in 2013 famously warned of this vicious circle, giving rise to the expression "utility death spiral."

Hemmed in by their business model and regulators who expect adherence to it, many utilities have concluded that they have only one alternative: stop rooftop solar. In this battle, utilities have sometimes behaved oafishly, sabotaging themselves.

08 August 2019

I Still Hate Neil Irwin - part the fourteenth

FINALLY!!! Mr. Irwin has found a pundit/expert with the gonads to say what needs to be said:
"The dollar being the primary global currency has enormous benefits for the U.S., but with the side effect that when the U.S. tries to depreciate, there are limits on how much it can do that," said Adam Posen, president of the Peterson Institute for International Economics.

FWIW, The Peterson Institute is bigly right of center, so admitting that Bully Uncle Sam is a bad thing means something.
The Peterson Institute has been at the forefront of research on the proposals by the Trump Administration of reforming the tax code.

If you really want something to chew on
Which brings us to the case of the Peter G. Peterson Institute, which, according to SourceWatch, is "founded, chaired, and funded" by Pete Peterson, a conservative Republican billionaire who made his money as a Wall Street hedge fund manager and served as secretary of commerce under President Richard Nixon. He has devoted himself and his billions to promoting deficit hysteria and convincing the public that programs like Social Security and Medicare will destroy the economy.

Boeing Boeing - part the fourth

David Gelles reports on the latest Max news, that a group of survivors have petitioned FAA to fully re-certify the Max, which is to say certify the Max scratch as a new aircraft. I guess that means the Worst Case Scenario. Actually, worse than what I've inferred is needed. Redesigned wing and landing gear is the extent of my Worst Case Scenario, which would not mean a new aircraft cert. We'll see, but it appears the momentum is building.

This could, note 'could', become an arrow in the quiver of whoever is the Dem candidate: the Right Wingnuts favor the Big Corporations over the Little People. The trend to outsource cert to Boeing et al didn't begin with The Manchurian President, but the amended type cert for the Max is in his closet. As recalled in an earlier installment, the signal change to the cert process happened under Dubya.
To earn certification for the 737 MAX 8, Boeing undertook a comprehensive test program that began just over one year ago with four airplanes, plus ground and laboratory testing. Following a rigorous certification process, the FAA granted Boeing an Amended Type Certificate for the 737 MAX 8, verifying the design complies with required aviation regulations and is safe and reliable.

Again, is it possible to fly an inherently unstable aircraft with managing software? Yes, sort of, with the X-29 being exhibit 1. But even in that case, the notion was to exploit instability to generate otherwise impossible maneuvering, which didn't happen.
[T]he whole system as flown (with the flight control system in the loop as well) could not be characterized as having any special increased agility.

It's hard to make the case that the Max design, with engines where they ought not to be, had any benefit to anyone. Just more moolah in Boeing's financials.

07 August 2019


Now if only engines can be built to handle such data!
1U can do 32x EDSFF Long, which means 32x 30.72TB = 983TB ( Just short of a PB ). And that is only on a 96-layer BICS4 3D TLC NAND. And that 41PB in a single Rack!. And in the not far future 100PB in a Rack.

You could fit the whole of DropBox into a few of these Racks!.
-- ksec

Big data? Ok, I'll stuff it in DB2.

Vas Deferens

So, that didn't take long. Again. In Sunday's NYT Business section is a full page puff piece (each is) on Vas Narasimhan, CEO of Novartis. I considered typing a missive on the piece, but let it go, since the sole significant thought I'd had (scrawled under his photo) was:
Why would you want a McKinsey graduate running a drug company?

McKinsey has the well earned reputation as the capitalist's Social Darwinism wet dream defender. Kind of like a high price defense attorney. Confuse them when you can't convince them.

A few days later, now, we know that Novartis has been playing fast and loose with trial data for a $2 million gene therapy. The notion of "I save your life, give me all your future earnings" is so McKinsey. I guess we know why he's running a drug company.

Here's an Axios piece on Novartis and the faked data drug
The future of medicine is in personalized and scientifically advanced drugs, meaning that Zolgensma's imminent approval is just the beginning of the seven-digit price tag era. While drug companies say the drugs' effectiveness justifies their costs, some experts are pushing back.

Later in the article it is mentioned that the underlying drug tech will be used for other drugs. IOW, Novartis isn't on the hook for the drug's R&D for this one indication. Surprise, surprise. And, of course, no forensic accounting exists, publicly, of that R&D spend.

Here's a report that lays out the scheme
As Novartis' departing CEO Joe Jimenez noted in a November 2016 editorial in Forbes, "We want to be rewarded for the tangible outcomes that our products provide the patient, not for simply selling pills."

Left to inference is the simple question: what's the value of "tangible outcomes" in moolah terms? Two possibilities are at the top of the totem pole:
- avoided costs of alternative, existing therapies
- the net present value of a patient's earnings

The first metric is, generally, not a kerfuffle. The second sure is. If there is a truly orphan population at risk, then only the 1% need apply, since their lifetime earnings are much higher. Not that they'd actually turn over any of it, of course. Only that the bean counters can put said 'amount' in the 'value' side of the equation. Thus justifying that multi-million dollar price.

Finally, a dense and detailed review of the drug by medical professionals.

I Told You So - 7 August 2019

Well, the rollercoaster has gone uppy-down (not for the first time over the course of these missives), to quote a Boss Man I had in a food factory long ago. My job was to pull straps of bread pans (thoroughly greased inside and out) stacked on a skid and throw them on a conveyor belt where they were pulled under the dough formers, and thence to the proof racks. Being all of 140 lbs. soaking wet, and the fact that the pans were generally banged up, they generally didn't like being separated. Thus some amount of angst on my part, and so, every so often a strap would end up with the cavity side facing the belt when the process got behind. Then, of course, the doughs would jam up the former, since the doughs had no where to go. So Boss Man would run over to clear the mess and scream "Uppy Down!!!" at me. Not that I cared a whole lot.

Your casual rate inversion is something we should all care about. Thanks to The Manchurian President and his cabal of "the best people", who don't have one complete brain among them, Treasuries are soaring and interest is plunging, even below the 'cut' of a few days ago. The CxO class, still in the realm of really cheap moolah, still can't find profitable places to put all that cheap money. What a wonderful world it would be!
The US Federal Reserve cut rates last month for the first time in a decade. That helped precipitate the decline in long-term bond yields, although yields had been trending lower for some time.

That's a worrying sign: The yield curve, which plots the interest rates across the maturities of debt, is currently inverted. Shorter-term debt is paying higher rates than longer-term bonds, as investors remain fearful of a US recession. An inversion of the yield curve has preceded every recession.

05 August 2019

New Gold - part the ninth [update]

Mr. Market is having a nervous breakdown as I type, all the result of a fucking moron running the Damn Gummint. 78,900 other morons put him there. The Fed just put its thumb in the dike, hoping to stave off the flooding recession resulting from The Manchurian President's stupidity.

The amusing part of all this has been the whining from the farm states; 'we can't sell our growing to China!!'.
"The Chinese market is something we've built up over years, and it's been washed away in a short time," said Marcy Svenningsen, who grows soybeans, corn and wheat in North Dakota.

If The Manchurian President really paid attention in his baby econ class (either Fordham or undergrad Wharton), he will know what mercantilism really, really is:
Mercantilism helped create trade patterns such as the triangular trade in the North Atlantic, in which raw materials were imported to the metropolis and then processed and redistributed to other colonies.

IOW, The Manchurian President and his cabal in bidnezz have put the USofA on the wrong side of mercantilism. With all the benefits.

As usual, that didn't take long.
China's halt of US agricultural purchases will hurt America's farmers in dire need of relief. The trade war has forced Washington to come to the rescue of farmers with billions of dollars in aid. Delinquencies on agriculture loans have tripled since mid-2015 to eight-year highs, according to the St. Louis Federal Reserve Bank.

When will the Damn Gummint send free-money checks to all those city workers put out of work? Once again, the Red states sponging off the Blue.

Investors piled into government bonds, driving the 10-year Treasury yield to 1.75%, the lowest level in nearly three years.

Are you surprised?

Probably? Not

It's no secret that I've some problem using pure quant in the arena of human events. The cause and effect of human events are determined, almost entirely, by the rules surrounding said events. And said rules can and will be changed even in-flight if those who seek to benefit from said events see that the desired outcome is not forthcoming. I'm talking to you, Blythe Masters. Time series analysis to predict booms and busts in the economy principally among them. Given The Manchurian President's behavior, would anyone be surprised if he'd managed to threaten BLS and Census Supergrades (aka, SES)? Of course he's tried. Could the really, really rosy numbers coming out of BLS be fudged? If the Secretary of an agency can clear out the Supergrades with a snap of the fingers, what do you think?

Well, here are a couple of reports that might be of interest to those who share my chary attitude.

Should Probabilistic Inference be Thrown Under the Bus?
The real problem is that entire practice of Bayesian inference, and its Information Theory relative, is surprisingly fundamentally flawed in non-linear domains.

The second is older, and closer to the Great Recession "Kill the Quants?": Why risk analysis fails.
The financial crisis featured both models that were wrong and models that were right but were ignored by managers. Modeling errors vied with deliberate misstatements. Federal agencies deferred to the expertise and presumed non-malevolence of private firms.

I really like "presumed non-malevolence of private firms". As if!! Blythe Masters, Blythe Masters, Blythe Masters

Boeing Boeing - part the third

Well, some recent reporting that bears reading. Supports the increased likelihood of The Worst Case Scenario.
[A]fter intense lobbying by industry, [FAA] adopted new rules in 2005 that would give manufacturers like Boeing even more control.

Are you surprised that this was during a 'Business Friendly' Republican president? Didn't think so.

The salient fact of the crashes is that MCAS was not intended or designed to deal with the phase of flight when the crashes occurred. It's one thing to blame the AoA sensor, but it has to be recognized that MCAS is designed to compensate for dangerous aerodynamics, due to engine position, in level flight phase.
The review described a system that would activate only in rare situations, when a plane was making a sharp turn at high speeds.

One might say, when the Max was flying like an F-15! Or, perhaps, the Grumman X-29; given that it was controlled by 80s computers, it might perform using today's components. But, even so, should a passenger aircraft need so much compute just to keep it flying? Not to assert that the Max is as troublesome as the backward wing X-29, but how close is too close? IOW, some more, automation to accomplish otherwise tedious pilot input is one thing, using unbidden automation just to stay in flight is quite another.

Which brings us to the lede, appropriately buried near the end of the article:
The overhauled version would move the stabilizer by as much as 2.5 degrees each time it triggered, significantly pushing down the nose of the plane. The earlier version move the stabilizer by 0.6 degrees.

Yes, that's a bunch different. For those only vaguely familiar with how aircraft wings work, the rear wing, aka horizontal stabilizer in standard wing designs, has two moveable parts. One is the elevator, which is the trailing edge hinged, just as the main wing aileron and is managed by the pilot's control, the yoke. It provides fine control over the nose angle in flight. On larger aircraft (and some small private aircraft), such as the 737, the whole tail wing can be rotated. Setting the stabilizer is normally done to balance the aircraft in level flight. Such rotation, being the entire wing, produces very large force. This is what MCAS moves around. I can't find any numbers on the relative max force of elevator deflection and stabilizer rotation, but given the very large difference in area of the two and the fact that rotating the stabilizer also changes the AoA of said stabilizer, it's no surprise that pilots couldn't counteract the MCAS generated stabilizer rotation by moving the yoke/elevator.

The Worst Case Scenario remains in play.