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.