Friday, December 15, 2017

Testing the barrier

Stocks, Yields, Dollar Surge On News Rubio Is "Yes" On Tax Bill


The senate has agreed to support higher interest charges.  

Interest charges were already growing by 10% a year prior.  This puts us into the shutdown territory, when congress pays 3% of real GDP in interest charges.   Next comes the budget and senators will be protecting their small discretionaries in the face of highly volatile, and rising interest charges.

The one to ten slope has been less than 70 basis points for days, it will have to stay that low else the ten year yield fails to hold below 2.5. The long term chart  on that tells me we don't see 2.5 until  regime change.

Curve slope is time independent

The insurance component of tem banking sets the time indices, and stretches out loans a bit.  In brigade theory the there are no term points, instead we have the finite, and small, set of -iLog(i), where i is the share of some hypothetical market channel, two color.  The variations of -iLog(i) should be gaussian distributed, according the Shannon theory, I think.

Not for us, since the two sided trade sets the shares i. And the variation in the derived set of i will be proportional to the amount if inside information absorbed.   After seasonal adjustment, that is closer to 1.5 points.  This is price variation, not bit error.  

Pricing is the result of discovery, that means we are intentionally sloppy, not up to Shannon standards, we waste a bit of transaction space on discovery.  Our model has to create both signal and noise, in the Shannon model, it is not a given.  We complete  the model by passing the map, and that takes up space.  The map, in this case, is the tradebook with some fixed uncertainty.  That is, menu costs are real, and computed in the economy, for real, as a trade exchange, a two sequence mapping problem.  


The lost transaction space is taken by the market maker, the pit boss.  Shannon wants the pit boss error to be nicely rounded, but it comes out chaotic. Chaotic mainly because agents will adjust window sizes, the sequence to completion.  We never actually get a complete message to encode, in the Shannon sense.  So we will always have requantization.


At the pits


We get adjustable, asynchronous  interest charges.  These charges are meant to create the exact Shannon match, as if interest flows were constant, as if the sequences were mostly repeatable.  These interest flows set pricing, the pit boss accumulates a chaotic residual, and trading bots get charged an implicit (or explicit)  menu fee to cover the lost transaction space.  Shannon is the equilibrium for repeatable sequences, all inside information has been gleaned, the banker knows the sequence to completion. Shannon proved it in the limit as sequences get longer. Brigade theory is an adaptable Huffman encoder and does not have a complete calculus, but does pricing ration fine and dandy.


Bible thumpers support Islamic terror

The bible thumping Republ planned to allow Islamic radical mosques  to engage in private terror plots.  These re the boneheads like that thumper who swallowed the gun barrel.  The US has a serious problem with the thumper crowd, they seem a bit dense.
Live by the parliamentarian, die by the parliamentarian? The effort to include a repeal of the ban on partisan activities by churches and other charities got blocked from the Republican tax bill in the Senate after a challenge from Democrats. 

Thursday, December 14, 2017

Ezra, increasing deficits precede recession

Ezra is claiming that deficits don;t matter because Yglesias told him so. 

I suggest Ezra look at the chart of deficits and blue bar, have Yglesias check it out.  Fond me a spot where deficits are increasing, and 100% of the time you get recession.

How are you and Krugman going to explain the next blue bar, because you both know deficits will be increasing, before, after and during the coming recession?  Is Krugman saying that blue bars are OK?  Either that or he has to explain this chart, or he has to get out of the arena.  Denial of this chart is tantamount to stupidity.

The California Rule again

Two members of a California state appeals court panel on Tuesday repeatedly questioned lawyers representing county employees and the office of California Gov. Edmund G. "Jerry" Brown Jr. about whether the lifetime pension benefits given to government workers at time of employment could be altered to instead provide "reasonable pension benefits."

Randy Diamond takes a shot at reporting from the Cal appeals court.

I am sorry for the governments in this case, but the California Rule has been an accepted verbal agreement, well known and agreed to by local governments for years. 

At any time they have the ability to prohibit the rule in writing in their contracts.  The problem is not the California Rule but the deeper issues, unions control local governments, and local elected officials may suffer government shut down when they stop agreeing to the Rule.  That problem is a deeper issue, required by law here in California, and the Cal courts have no jurisdiction. Cal courts are not under any mandate to enforce voting rights or rights of assembly, that is a Federal Rights issue, and the US Supremes think  the issue is way to smelly to deal with.

California government got itself into a huge mess.

What did Hayek know?

Economists doing a review of Hayek knowledge systems claim there is no aggregate coordination.  But, the brigade system does impose a global condition, uncertainty, all agents agree on the uncertainty of the  current tradebook. Also the physical laws of economics are enforced, the conservation of coin' and we avoid longer queues.  Finally, prices are not the signals, interest charges are the signals  interest charges indicate current queue length. No problem, we got this info stuff nailed.
While Hayek himself did not develop a mathematical formulation of his vision, there do exist models of the economy as a complex adaptive system in which aggregate outcomes are determined by the social interaction of agents with limited and local knowledge. This so-called agent-based literature makes intensive use of computational rather than analytical methods, and focuses on disequilibrium adjustment rather than the characterisation of equilibrium paths. Epstein (2007) calls the approach generative, while Tesfatsion (2006) calls it constructive. Its connection to Hayek’s thought has been previously noted (Vriend 2002, Rosser 2012, Axtell 2016).A key element in this literature is the absence of imposed coordination across individuals in actions and beliefs. There is no assumption that individual plans are mutually consistent, or that subjectively perceived laws of motion coincide with the objectively realised laws of motion to which these perceptions give rise. This does not, of course, rule out model-consistent expectations or market clearing as endogenous outcomes, arising through adaptation by individuals.

AlphaZero version of AI is just the sandbox

They built a sandbox, as described in this blog and by the fintech industry.

That machine views the world as an auto-traded pit of move sequences which is a projection of a rule book in the smart contracts layer.

In other words, I have a rule set for chess,and I apply it to the queen side rook, knight move combinations. Under the projection of the rule book, one side wants to bottle those pieces up with a small ;move tree', and expand the other side with a more expanded move tree.  That is, the bottler wants a great selection of moves than the bottled-up.

Comparison of tree structure is our  generator calculus, for aloh zero they called it neural net weightings, but they may have gone n t generator theory.

In any event, aloh zero wants a probabilistic generator,  one that is accurate for some long sequence that gets to the end game.  It wants a probability distribution of move sequences for that corner of the board. 

If in the limited move space, the generator for one side occupies more moves, then it generate tempos for other parts of the board.  A tempo is like ash, it can be spent elsewhere on the board, in another trading pit, like the king side corner where the opponent has castled.

Smart contracts are the rules, including subsets of ruled designed for some pieces over sme subspaces of the game. The goal is to price the moves as it plays, it has a portfolio management problem.

Wallet vendors securing the sandbox

Here’s What Keeps Bitcoin Developers Up at Night as the Price Hits $10,000

The recent Baltic Honeybadger 2017 conference in Riga, Latvia featured an all star panel of Bitcoin developers and security experts on the second day of the event. During this panel, the participants were asked to explain what kinds of possible issues with Bitcoin keep them up at night.In their responses, the panel of Ciphrex CEO and Bitcoin Core contributor Eric Lombrozo, Blockstream CEO Adam Back, JoinMarket developer Adam Gibson, applied cryptography consultant and sometimes Bitcoin Core contributor Peter Todd, SatoshiLabs CTO Pavol Rusnak, and Libbitcoin lead maintainer Eric Voskuil discussed the issues with the recent phenomenon of spinoff coins, a lack of understanding as to why Bitcoin is useful, and the fact that some of them sleep better today than they did in the early days of this new technology.
The problem they deal with is scaling, both i the hardware wallets, the online accounts, and the interfaces to the blockchains.    All of these problems boil down to a secure protocol and a timeout.  It is the secure protocol they worry about, the point where simple protocols need to be protected to the microprocessor core.

Start with hardware wallets. The secure element in a hardware wallet looks and acts like a spread to us.  But inside the wallet, the protected space is a data structure, per coin, in a portion of memory only accessible via a set of protected kernel call.  The protected structures include keys and accounts.

For the trading pits, like Coinbase, the same should hold true by reduction, these sites should look like endpoints of a cash transaction between two secure elements. I side the pits, every transactions an encapsulation of that, the your protected trading bot engages in cash transaction with the pit boss.

In my semantics, a cash transaction is a point to point watermarked coin transfer, with erasure of the coin at the a source guarantee.


Wednesday, December 13, 2017

The planned partial shutdown

The measure, known as a continuing resolution, was introduced Wednesday and is set to be voted on next week. It would keep most parts of the government open until Jan. 19 while providing full-year funding for the Defense Department, $4 billion in extra money for missile defense requested by Trump Administration in the wake of North Korean threats, and an extension of the Children’s Health Insurance Program.
I can meet that plan. 

They get labeled

Oh my: Some women invite harassment with the way they dress, says House … Dem?

If you are the hot looking babe then we all know you spend hours decorating yourself. We aren't always looking for decorators. 

A simple fix to make a cash card from an ATM card

The new cards with the chip make fine intelligent cash cards, it they can be programmed at the point of sale. 

The amount of money each card holds is an encrypted value, and only the point of sale terminals know the secret key.  So, making a counterfeit proof, cash card is equivalent to securing the POS terminals, protecting their secret keys.  When POS makes change, it just reprograms the ATM chip using honest accounting.

Don;t even need a patent, this stuff is already done using the SIM chips.