Thursday, June 30, 2011

A solution to the Amazon tax issue

First, recognize that this is a technology change issue, not a fairness issue. Amazon and the on line sellers do business differently than strip malls, their retail tax structure should be different.

How do we tax Amazon at the distribution level? Apply a smaller, but not insignificant last mile delivery tax. Tell them "great, you don;t need strip mall services", but you need an extra bit of "last mile transportation services". Set the tax low enough so local on line warehouses see a gain to staying in the system.

Do on line services use last mile government services.  Probably a bit.  My local UPS delivery center is pretty hard on the roads.

Seven months

President Obama and Senate Democrats are weighing a scaled-back U.S. budget deal that would avert a looming default but force Congress to tackle the politically toxic issue again before the 2012 elections, a Senate Democratic aide told Reuters on Thursday
The deal would cover the country's borrowing needs for seven months, the aide said. That would theoretically include budget savings of roughly $1 trillion to attract the Republican support needed to pass it through Congress. CNBC

Does this sound like the California deal? Smoke mirrors and two quarters of kicking. The stages in the government channel are adjusting to the same budget uncertainty. Under this contracted environment they operate synchronously. They need twice the normal bandwidth. Steep curve, right? So the points of aggregation are dense along the steep part of the curve, the short end.

Countdown to default

he White House and congressional Republicans will need to reach agreement on raising the nation’s debt limit no later than July 22 so that legislation can get passed in time to stave off a default on U.S. debt, two Democratic officials familiar with the negotiations said. Bloomberg
Legislatures up and down the line in trouble.

Chart to ponder

EMRATIO going up while Federal share of the economy drops.  What was happening in the 1990s that made us happy to work?  Two government shutdowns, progressive tax rates, rejection of Hillarycare, deregulation of telecom, split government, cutting defense.

I would have picked Illinois to be the greater threat

Federal Reserve Bank of Kansas City President Thomas Hoenig compared Greece’s debt crisis and the U.S.’s heated fiscal debate Thursday, adding the Hellenic Republic “holding the world hostage” to its financial woes held lessons for the U.S. WSJ

Jumping ship

Treasury Secretary Timothy F. Geithner has signaled to White House officials that he’s considering leaving the administration after President Barack Obama reaches an agreement with Congress to raise the national debt limit, according to three people familiar with the matter. Bloomberg

Will meth addicts take over Mexican government

This is what the real threat is from Mexico:
SACRAMENTO) - We published a story this week that may be our single most important in seven years, out of almost 20,000 articles; about a looming, bloody revolution in Mexico.

If this comes to pass, it will leave Los Zetas; Mexico's single most dangerous cartel, in control of all of Mexico. Very questionable things, like unexplainable stashes of weapons and uniforms all over the country, that are brand new and U.S. manufactured, the best high end weapons being currently used in Afghanistan; and military operations between the U.S. and Mexican military forces taking place that neither government admitted to, until Wikileaks published the indisputable evidence. Salem News

The Zombie threat is actually real. These folks are mentally cold blooded, a chunk of their brain is missing due the meth. The result will be pure violence.

Digital hardcoins and currency trading

The smart coin is essentially a bitcoin account embedded into a large coin.  They can be safely traded against each other, even when issued from separate banks, because the coin reader can always give secure value amount.  More interesting is that the coin can reflect immediate currency value, to the same signal to noise as any other bitcoin account.

So banks can issue the coin, then defend their value, keeping their customers happry.  Or banks can bet client bitcoins against hedges upon request, and value is reflected in clients personal bitcoin.  So the clients portfolio is always immediately liquid at the local grocer.

Seasonal algae farming

In these part timers, they take their small fishubg boat out beyond the waves, towing a small barge with their rolls of algae bags.  A part timer could easily unfurl an acre, getting 5,000 gallons for a few months work.  Keep a small motor boat for errands. The part timers wants bags about 1/8 an acre in size.
Between part timers, experimenters, dairy farmers, and swamp dweller; we have a big enough market.

We need to convert a pool maker, a maker of plastic,  inflatable, large wading pools would know this. We get this standard flow through, tubed bag.

After a while, certain places along the coast get bunched up with gypsy algae farmers. So we put in a platform, a mile out or so.  Give them an oasis, and plumbinh to land. That's how history will have it, the little bag that could.

Wednesday, June 29, 2011

Election time is liar's poker for the economists

Economists will go into philosophy mode for another year, basically becoming liars. Also, it is the time to watch government data carefully.  Also the time when economists fudge and cover up their bogus claims from prior elections.

What grade did S&P give Ireland?

S&P ratings agency wants to give Congress a 'D', if they miss a payment. If 60% of the debt is held by Americans, then Americans should get a hefty yield rise in their Treasury purchases. Sounds like good news to me.

Autonomous vehivle symposium

Construction, mining and agriculture.  I am looking forward to their trailerbots.
Free University of Berlin has product:
The car dubbed MadeInGermany is able to detect other cars, motorcycles, bicycles, and pedestrians and thus cope safely with complex traffic situations. It can recognize traffic lights, stop signs, the trace lines on the road, etc., and it “knows” how to implement the traffic rules including right-of-way. Three video cameras, multiple laser scanners, and radar allow the onboard computer to calculate a three-dimensional model of the road and assess the traffic situation. The car can be controlled using mobile devices such as an iPad.

The Berlin vehicle was developed by the robotics experts in the AutoNOMOS laboratory of Freie Universität Berlin under the direction of the computer science professor Raúl Rojas. The AutoNOMOS project aims to examine new forms of mobility and has been funded by the German Ministry for Education and Research within the ForMaT (Research for the Market in Teams) program since 2009. In a virtual innovation laboratory (InnoLab), specific concepts for autonomous vehicles and driver assistance programs are developed with a focus on market and customer demands. Details Here

Amazon won't buy government goodies

Amazon threatens to drop California associates Business Times
This is a case where liberal economists fail to educate their rabble. If you ask the commenters what government services Amazon provides the answer is always the same, Amazon wants to pay tax for the purpose of warm feelings, the liberal economists told me so. Liberal citizens, ask yourself what is different from a delivery truck and a shopping mall. If you can figure that one out, then ask, how do the government services change between the two.

Even Business Insider has a problem telling a delivery truck from a shopping mall. Here it editorializes that California must stop delivery trucks, and never explains why  should California go on a tax hunt against delivery trucks. 

One delusional didn't win the presidency

'I Would Have Been a Good President, Maybe Even a Great One'John Kerry

Anybody with brains would avoid making this statement.

Ms. Bachmann shows her Big Government Conservative colors

The tea party Republicans overwhelmingly oppose President Barack Obama's decision to participate in the NATO-led operation in Libya without consulting Congress. But 27 of the caucus' 59 members voted against a GOP-led bill to strip federal dollars from the American effort there.

The group's chairwoman, Rep. Michele Bachmann of Minnesota, was among those who voted no. Her role in the failure of the GOP bill was sorely noted by tea partiers outside the Beltway.

"We have no congressional authorization for military action in Libya, but our brilliant GOP leadership did not cut off funding," wrote Judson Phillips on a blog for one group, Tea Party Nation. "Could they possibly be any more gutless?"

Bachmann, a GOP presidential hopeful, did not immediately respond to several requests for comment.Live Leak

Watson, the jeopardy machine, is looking like a better choice for president.

Fresno City financial disaster

Budget Director Renena Smith and her staff write that City Hall in FY2012 will pay $17,349,100 in debt service payments. The entire general fund is expected to take in $214,619,000 next year. Debt service payments will be 8.1% of the general fund.

But these debt service payments don't include the city's bill for the pension obligation bonds. These are bonds dating back about 20 years that were issued to fund the city's pension plans. The general fund's share of payments on these POBs in FY2012 will be $12,046,000.

So now the general fund debt service payments are up to $29,395,100 in FY2012. That's 13.7% of the general fund.

But we're still not done. The POBs in the late 1990s and early in the 21st century were invested. The returns were so good that the city didn't have to make cash contributions to the pension programs. The city spent the savings, in part on employee raises that added to the city's pension obligations.

Then the recession hit. The city now must pay cash to the pension programs to keep them fully funded. In FY2012, the city will contribute $23,989,000 of general fund money to the pension systems.

Anyone want to guess what the payments will be in, say, 2021 if the Dow doesn't rise 18% every year for the next decade? Anyone want to guess how many investors throughout the world are chasing after the guaranteed 8% return that Fresno's tiny (relatively speaking) pension systems must have?

Add the $29,395,100 in debt service payments and the $23,989,000 in direct pension contributions and you discover that the general fund in FY2012 is facing $53,384,100 in debt payments of one kind or another. That's 24.9% of the general fund.Fresno Bee

On top of that, the County of Fresno now devotes over 30% of taxes to prior pension obligations. It is all over but the shouting, and there is going to be lots of that.

Here the Fresno Bee joins 10 other California dailies in calling for pension reform.

Jerry Brown and Gray Davis get most of the blame.

Bill Clinton was ready to go through with a government shutdown

Obama and this crew of democrats are not. Why? Krugman wants to know.

I dunno, frankly I have imperfect information here. I do guess on occasion that Pelosi and Obama are more concerned about any threats to Obamacare.

The other half of the British puzzle?

Thousands of British schools will close and travelers will face long lines at airport immigration this week when three quarters of a million workers go on strike _ the first blast in what unions hope will be a summer of discontent against the cost-cutting government's austerity plans.

The government hopes it will fizzle into a summer of hardheaded acceptance.

The first test comes Thursday, when 750,000 public-sector workers _ from teachers to driving examiners to customs officials _ walk out for the day, part of a growing wave of opposition to the Conservative-led government's deficit-cutting regime of tax hikes, benefit curbs and spending cuts.AP

Five months of 3.5% inflation and .5% growth leads to restructuring by other means.

Michael Schuman answers the wrong question

How America can avoid a Greek tragedy
The real question is how can Illinois avoid the Greek tragedy. A default in Illinois causes many of the came problems for the USA as a Greek default causes for Europe.

California Bullet Train back under the microscope

High-speed rail plan draws analysts’ concern over costs, projections
Undergirding the warnings, an inquiry by California Watch and The Orange County Register has found, is a tangle of related concerns:
The appointed officials who make up California’s High-Speed Rail Authority  say they will rely on $19 billion in federal aid to pay for the 800-mile system. But the legislative analyst says federal funding may amount to less than $4 billion – a $15 billion shortfall.
The rail authority’s $45 billion construction estimate may be $22 billion too low, the legislative analyst says. Cost overruns of the sort that have afflicted other big U.S. projects could even drive the actual price above $200 billion, according to a critical study by a Stanford University professor.
The bullet train’s prospects for turning big profits are founded on ridership forecasts that are deeply flawed, two studies claim. Rather than making billions in profits, high-speed rail might actually “incur significant revenue shortfalls,” a UC Berkeley study found.

California debt service is now 7% of budget. The likelihood that the bond market will buy additional trains bonds next year is small.

Tuesday, June 28, 2011

Massachusetts joins Arizona war against Qudaffi

Libya mission brings John McCain and John Kerry together again

Don't touch my government goodies

California Chief Justice Tani Cantil-Sakauye said today she is "dismayed and gravely concerned" about cuts to judicial branch funding in the proposed state budget announced Monday by the Legislature and Gov. Jerry Brown. SacBee

Whack a Mole

Local governments had an overall debt of 10.7 trillion yuan ($1.65 trillion) by the end of 2010, said China's top auditor on Monday in a report to the National People's Congress.

He warned that some were at risk of defaulting on payments.  Mish quoting a Chinese Banker

In the spirit of Tax Holidays

I want to out perform Cisco and Mr. Chambers in his call for a Corporate  tax holiday. I propose a nationwide property tax holiday, retroactive for five years.

In the future gulf coast of Florida

A vision of aqua farmers looking like a dark lake 30 miles by 200 miles, made of plastic bags.  Aqua farmers doing their 3 day shifts on the barges and platforms.  Piping between the middle of Aquaville and the Florida land make bidirectional liquid transport.

Aquaville is powerful, it can generate billions of gallons of fuel per day. More importantly,  engineers can some eat atmospheric CO2 or eat O2.  It is the global thermostat, as powerful as the arctic

The atmospheric time constant of Aquaville is about ten years, that long to notice the weather change.  So powerful is the lake that co2 is sequestered, for ten year, and reused as feedstock for o2 consuming fish, that is how we get to set the temperature.

Don't touch my government goodies

"I respectfully urge the governor and legislators to work together to bring home a budget agreement and get this great state moving forward again," UC President Mark Yudof said in a statement Sunday. "It is imperative, however, that any such agreement spare the University of California any additional cuts beyond the $500 million reduction it already is working to absorb."

British economy

British Treasury curve 

Since Jan 2010, inflation has held steady at 3.5%. (Trading Economics) During the same period, growth has averages .5%.
How is that possible?
There is no medium term economic planning in Britain, everything must be done in a six month window.  How does the economy hold a stock of bonds over ten years?  A puzzle.

Case Shiller 20 city index

Nineteen of 20 cities in the index posted annual declines in April — just Washington notched an increase. The monthly rises were more widespread with 13 cities climbing. On a seasonally adjusted basis, which aims to take into account the stronger spring-summer selling season, eight cities — Atlanta, Los Angeles, Minneapolis, New York, Phoenix, San Francisco, Seattle and Washington, D.C. — posted monthly increases. Miami prices were flat on a seasonally adjusted basis.

Basically what we see is that Washington DC owns the housing market when Keynes is in town, but when Keynes goes away the various cities show nominal house price growth. This is what Keynesians do, they skew the economy causing unnecessary cyclic behavior.

California has a budget deal

Brown, Democrats reach budget deal without taxes or pension reform
The Democratic budget plan is based on an expectation of $4 billion in extra revenue in addition to $6.6 billion in unexpected revenue that was forecast last month. "That's nearly $11 billion in new revenue that the Democrats assume will magically appear," said Senate Budget Committee Vice Chairman Bob Huff (R-Diamond Bar). (Associated Press)
The money will not appear when GDP growth nation wide is 1.5%. They did eliminate the redevelopment boondogles, but that will trigger a series of lawsuits, mainly by Republicans who lose their welfare checks.

Michigan Dems caught in a scandal on the patent bill

Sleaze here. It onvovles the Jesse Jackson kid and one of their Senators. A payola deal.

Monday, June 27, 2011

Oakland's deranged mayor bears watching

Fitch Ratings, one of the three major credit agencies for public and corporate debt, downgraded $649 million of Oakland bonds on June 9, 2011.
Oakland mayor Jean Quan never presented a budget to the council as the city charter requires. Instead, she submitted three "scenarios." None of them could be adopted as an official budget document, and all are designed solely for a political purpose
Good grief:
Quan previously led the Oakland school district into a $100 million bankruptcy when she was president of the school board, ignoring clear warnings in staff documents and from a state auditing agency.
In 2008 when Quan chaired the finance committee of the city council, she approved now-disgraced city administrator Deborah Edgerly's raid on the reserve fund. The budget adopted that Spring maintained spending beyond the City's means, taking reserves from $70 million to $10 million with the sweep of a pen.ORPN

James Kwak deceives us

Of the $3.8 trillion in outlays in President Obama’s proposed FY 2012 budget, more than half comes in one door and immediately goes out another door back to ordinary people, the vast majority of whom are or were previously taxpayers. $742 billion gets paid out in unrestricted cash by Social Security; another $762 billion goes to pay for people’s health care expenses. Other entitlement programs such as retirement benefits for federal employees (civilian and military), food stamps, and unemployment insurance add up to another $716 billion.* There’s no way to reduce this spending without directly hurting “taxpayers.” You can argue that some of these programs should be eliminated, but you can’t argue that you can eliminate those programs without hurting ordinary people.Baseline Scenario

If it were the case that this part of Congressional spending is in one door and out the other to ordinary people, then why pay the transaction costs? Why not let ordinary people keep their money in the first place?

The answer is that these are transfers from one group to another. If that is the case, then Washington had better have an accurate democracy to prevent theft and inefficiency. But Washington does not have an accurate democracy, Senate representation varies from one group to another by five fold, depending upon the state one resides in.

What Kwak calls simple movements of money really amounts to an inflexible production system in the Senate. The system is so distorted that folks in California, who have 1/5 the proper representation, are not really obligated to pay taxes. And that problem leads to the political quandary of who really should pay taxers in a distortionary government which is designed for unfairness.

The theoretical limit of algae fuel production

Based on physical laws and assumptions of perfect efficiencies, the team calculated the theoretical limit to be 38,000 gal·ac-1·yr-1 (354,000 L·ha-1·yr-1) of unrefined oil with an uncertainty of roughly 10% and with 50% cell oil content. Limits for the practical cases examined in their report ranged from 4,900 to 6,500 gal·ac-1·yr-1 (46,300-60,500 L·ha-1·yr-1) of unrefined oil.Green Car Congress

My maximum of 100,000 to 200,000 gal was high.
Only a portion of the solar spectrum is utilizable for photosynthesis; PAR (photosynthetically active radiation) is commonly defined as 400-700 nm.

So the genetic engineering here is to expand the spectrum to include shorter wavelengths.
To get a sense of the limit, the Sun illuminated the earth at a a horsepower per square meter. It takes about 75 horsepower to run a small car fueling some 50 cars per acre.

Energy efficiency and more energy consumption go together

"Energy Emergence: Rebound and Backfire as Emergent Phenomena" finds extensive evidence and a strong expert consensus that a large amount of the energy savings from below-cost energy efficiency are eroded by demand 'rebound effects,' and that in some cases the rebound exceeds the savings, resulting in increased energy consumption from efficiency, known as backfire. The report contains a comprehensive review of the expert literature.The BreakThrough

It is not a discovery, it is a central principle of economics. The goal is to replace all of the fossil fuel consumption with three or four times as much algae fuels. When we make the economy boom again, we will double our energy consumption within a few years.

Good News

Understanding how the economy reacted to fiscal stimulus in the aftermath of the deepest recession of the last fifty years is essential. Joshua Aizenman of the University of California, Santa Cruz, and Gurnain Kaur Pasricha of the Santa Cruz Institute for International Economics and the Bank of Canada show that aggregate fiscal expenditure stimulus in the United States, properly adjusted for the declining fiscal expenditure of the fifty states, was close to zero in 2009.Economist's Voice

Government caused less distortion than expected.

Zero Hedge calls the recession

Using manufacturing survey, Zero Hedge has the recession beginning last month.Also Calculated Risk shows tthe trucking index off %2.3.

But,but... the Treasury curve didn't invert!  A puzzle.  Looking for clues I see that Ireland, Greece and Portugal, the default nations, have inverted yield curves.

Yes, but many of us want to raise the cost of Congressional debt

Investors in the US government bond market could face losses of up to $100bn if the largest economy loses its triple A rating, according to a research arm of McGraw-Hill, the parent of Standard & Poor’s.
A ratings downgrade that results in higher bond yields and lower prices could also mean the US Treasury paying $2.3bn-$3.75bn a year more in interest on financing a $1,000bn annual budget deficit.

“If Standard & Poor’s or any of the other major rating agencies downgrade the US, Treasuries would likely drop in value, possibly by as much as $100bn,” said analysts at S&P Valuation and Risk Strategies, a research team separate from the agency.

Stan Collender is buried in his entanglement and from where he stands, only the foolish would want to raise the cost of Congressional spending.

Remember, democracy does not exist in our Senate, and much of the mess in Washington is due to that problem. A good deal of the electorate has come to the conclusion that Congress engages in waste. Americans normally engage in government destruction when government is undemocratic.

The real rating agency has already spoken in the 2010 Congressional election, and the verdict in the democratically elected House is that we are debt constrained. Imposing Stan's dictatorial view of policy won't change the verdict..

Government retrenchment is expansionary

When government is crowding itself out. We are talking about central government retrenchment, and here is my favorite chart:
These are the Treasury spreads over time.  They are dropping, they ten year yield.  This chart is two years old and ten year yields are now at three.  It means that there is not enough useful yield to support the existing government channel, state, federal and local.  Restructuring government will result in a more  productive relationship between levels of government and the economy.

The first line suspect is the Bush family

sama al-Nujaifi, the Iraqi parliament speaker, has told Al Jazeera that the amount of Iraqi money unaccounted for by the US is $18.7bn - three times more than the reported $6.6bn.

Just before departing for a visit to the US, al-Nujaifi said that he has received a report this week based on information from US and Iraqi auditors that the amount of money withdrawn from a fund from Iraqi oil proceeds, but unaccounted for, is much more than the $6.6bn reported missing last week.

"There is a lot of money missing during the first American administration of Iraqi money in the first year of occupation.

"Iraq's development fund has lost around $18bn of Iraqi money in these operations - their location is unknown. Also missing are the documents of expenditure.

The Bush family, and the Republican traitors have a history of government theft and trading with the enemy, from the Nazis to the Bin Ladens.

Steve Horwitz hits the target

The Problem is Central Banking not Fractional Reserve Banking
In some free-market circles fractional reserve banking (FRB) is blamed for everything from business cycles to bad breath. Defenders are seen as apologists for inflation and fraud. Thankfully these views remain a minority because they are gravely mistaken. As I, and other Austrian monetary theorists, such as George Selgin and Larry White, have argued, there’s nothing wrong with FRB that getting rid of a central bank can’t cure. Fractional reserve banking works just fine in a free market.

The free banking crew understands network theory.

Who really stymied the California budget deal?

"The governor abruptly walked away from all negotiations in March and declared them over," said Harman, whose district includes Fountain Valley. "For him to say there was any possibility at that time for meaningful reform would make him a revisionist. Public employee labor unions stood firmly opposed to any pension reform or spending cap and the Governor declared negotiations over."State Senator Tom Harmon

His point is simple, Jerry Brown's politics are dictated by keeping the Dills Act, and union pension reform is off the table. Jerry is facing revolts in San Jose, Oakland and many cities with democratic administrations. We have about 6 calls for pension reform from major editorial newspapers around the state.

It is Jerry who is resisting a fair budget deal.

Sunday, June 26, 2011

Bank for International Settlements

"Addressing overindebtedness, private as well as public," the BIS Annual Report says, "is the key to building a solid foundation for high, balanced real growth and a stable financial system. That means both driving up private saving and taking substantial action now to reduce deficits in the countries that were at the core of the crisis."BIS
The country at the core of the crisis was the good old USA. BIS thinks we are still in debt crisis.

The fundamental libertarian platform

Angry Bear wanted a complex answer, and I don't have one.  All I have is the simple, basic mathematical formulation for libertarians.  OK, are you ready?  Here is is, hold the applause line:

Libertarian theory says buyers do not want queues for goods with more than three people. Sellers do not like queues of zero.

Surprised? Not me, I went through the math.  The basic formula works with Kling's Patterns of Sustainable Trade. The only question is whether the three people should be two.

Tim Donnelly, American revolutionary

Not much has changed since the days of the Revolutionary War, according to Assemblyman Tim Donnelly. The American people still don’t like taxation without representation, and pushed hard enough, they will revolt, he says.
His point is that much of the public sector funding decisions are closed door negotiations with a state mandated union. That is a lack of voter due process and it is perfectly moral and reasonable for taxpayers to refuse to pay taxes until democracy is restored.

Ms Bachmann a Welfare Queen?

ut the Minnesota Republican and her family have benefited personally from government aid, an examination of her record and finances shows. A counseling clinic run by her husband has received nearly $30,000 from the state of Minnesota in the last five years, money that in part came from the federal government. 
A family farm in Wisconsin, in which the congresswoman is a partner, received nearly $260,000 in federal farm subsidies.And she has sought to keep federal money flowing to her constituents. After publicly criticizing the Obama administration's stimulus program, Bachmann requested stimulus funds to support projects in her district. Although she has been a fierce critic of earmarks — calling them "part of the root problem with Washington's spending addiction" — the congresswoman nonetheless argued recently that transportation projects should not be considered congressional pork.LA Times

Ms Bachmann is wrong on Earmarks; they are efficienc and they have good multipliers.

OK let's use Johnathan Chait's chart on tax revenue

Johnathan Chait thinks we can sustain federal revenues above 19% of GDP.    Look at his chart, we have never kept revenues above 19% for more than a couple of years, an election cycle mainly.

What is Johnathon Chait's issue?  Because we managed to sustain high income for a couple of years we should plan on doing is for five-ten years, then bet the economy on the idea?

Obama goes for a tax hike

Treasury Secretary Timothy Geithner told the House Small Business Committee on Wednesday that the Obama administration believes taxes on small business must increase so the administration does not have to “shrink the overall size of government programs.” CNSNEWS
HT Mish

Inflation is a lagging indicator

 Bob Higgs wonders why we have no hyperinflation.

We do not see inflation until the recovery begins.  The way it works is as follows:

At some point in the near future the economy will finally grasp what happened to us, and correct the problem.  When that happens, rates rise quite rapidly as investment begins and economic yields increase.   The federal government will see both its rates rise and its cost of doing business rise.  In the new environment, the federal government become unsustainable and defaults in hyperinflation.

We are not quite there yet.  We have the traffic automation thing going, we know that is part of it.  Next we have to accept reality about oil and begin to see gains in algae oil.  We get over the last part and its boom times as the central government goes broke.

Congressional earmarks have a multiplier of 1.2-1.4

A study of well matched fiscal shocks to Italians provinces (counties) was accomplished in a paper that has been floating around that one can read here.  Krugman refers to it.

The economists looked a fiscal shocks that happen to Italian provinces when the Italian central government takes over from corrupt officials.  When the central government investigator has evidence of mafia corruption in an Italian provincial government, the central government will take over the local government, shut down all local government investment, then restart the investment again only as the mafiaoso are run out of town.

So far so good, the researchers have clear instances of a negative fiscal shock in isolated Italian provinces.  They can answer the question, what happens to general private sector activity when local government goes through a sudden shutdown.  I bring up earmarks because the study most closely resembles the shutting down of Congressional earmarks going directly to a Congressional districts.

Good work actually.  What do I take away?  Local governments are well instrumented to manage local projects with local direct management (even if they are corrupt) .  Earmarks to Congressional districts are likely to have good multipliers. 

IS curve, kind of nutty if you ask me

That said, widespread credit constraints presumably reduce the number of players who can take advantage of lower rates. So the IS curve, while still downward-sloping, is probably steeper than normal, a point Mark Thoma has made.

Wiki says:
For the IS curve, the independent variable is the interest rate and the dependent variable is the level of income (even though the interest rate is plotted vertically). The IS curve is drawn as downward-sloping with the interest rate (i) on the vertical axis and GDP (gross domestic product: Y) on the horizontal axis.

The short term economic yield is not independent, whoever got that idea?
The Treasury yield curve is the closest thing we have to an semi-orthogonal representation of the growth in Federal Government goods and services, from the short to the long end. It is a compacted view of federal goods flowing through the channel. That is something that is far from an independent variable. Most of the time the fed is not setting that short end, it is trying to catch up to it.

What is the real definition of Zero Bound? It is the result that happens when, over 20 years, Congress loses its credibility on delivering Pareto efficient transaction. Any move that Congress makes will harm one region more than it helps any other. In channel theory, that means that more accurate changes in inventory flow in regional government is Pareto Efficient. Or, more plainly, the government channel wants medium sized goods delivered at medium rates by regional government, to bridge the gap. The problem is, we don't have regional governments, the next step down are dysfunctional states.

Marin County Mafia weighs into the debt debate

House Democratic Leader Nancy Pelosi (D-Calif.) will demand a seat in the table for the final talks on the national debt limit, putting a strong liberal voice in the room.

Pelosi and House Democrats were left out of the negotiations between President Obama and Senate Republican Leader Mitch McConnell (R-Ky.) last year that extended nearly all of the Bush tax rates though 2012.

Pelosi didn’t participate in the final high-level talks over fiscal 2011 spending levels either. Hill 

Hard to schedule trains these days

"The quest for late-night BART service hit a roadblock today. After surveying BART riders, the transit agency found that extending BART trains by an hour on Friday night and cutting an hour of service on Saturday morning would disproportionately affect poor people and minorities.

The survey found that 56 percent of late Friday night riders were minorities and 49 percent low income. In contrast, 68 percent of early Saturday morning riders were minorities and 53 percent were low income.

BART board director Tom Radulovich said that the results of the survey mean that "it is not impossible, but it makes it harder" to make the trains run later." Bay Citizen 

Saturday, June 25, 2011

Sweetheart, my median candidate

The baseline algae oil economics

Baseline production: 15,000/365 = 50 gal/(acre*day).

Biodiesel enough for 50 small cars to drive to and from work.
50 million cars needs a million acres or we need
1,000,000/640 ~ 1500 square miles, a 40 mile by 40 mile lake of algae bags.

The Aquafarm economics

$100,000 per acre fixed investment generates 15,000 gal at $1.50/gallon, sales flow.  So debt service costs less than 25% of revenue, per acre.  There are fixed costs, like a service barge, small boats, wearable parts, and some nutrient and seed purchases.

Yield per acre should be higher where there is a steady nutrient source. Discovery and process improvement should increase yields. The range of possible biofuel products increases demand.

This entire industry will be made possible with major industrial interest in manufacturing algae growing plastic bags for a brand new $150 billion market over ten years.

I will start hunting for companies having expertise in durable, transparent plastic sheeting.

Where I live

A Downtown even:

We need a Traffic Automation Industry Association

A board that can organize the autobot conventions in Vegas.

Entangled thinking by Cullen Roche

Look at his post: CUT, CAP AND BALANCE = R.I.P. U.S.A.
He claims the Republicans strategy is a straitjacket for Washington DC and will end the growth potential of Washington DC, thus ending the USA.

Yes, but the correct name is restructuring the USA away and reforming the Regional Nations of America. Here is his screwed up quote:
With the US now running a current account deficit of 4% it is imperative that the government sector run a deficit in excess of 4% in order for the private sector to be able to save. If this were not the case, the private sector would be forced into deficit and the economy would contract.

No, the regional nations would carry debt to match their own deficits. As he says, regional nations are necessary if trade deficits need the offset.

We are unable to keep Washington DC as the center of government because technology has passed the concept of a DC into oblivion. Governments adapt and restructure. Our governments will contract and go through violence because elites think government should always remain the same. Like all Keynesians, he thinks government is the constant in their equations. So their theory partly works when there is debt capacity. When debt capacity has been used up, governments dissolve and restructure.

If Cullen or any other Keynesian wants to test my theory, there is a simple test. Propose to sell California 8 more Senators for $2 trillion. That is a good deal for California and they very well would break up the state, build a debt holding institution and form a regional nation for that gain.

Iran preparing to release their Belt Bombers

"The U.S. and the European governments that follow it describe Palestinian combatant groups who fight for the liberation of their land as terrorists," Khamenei said in a written message to an international conference on combating terrorism that opened Saturday in Tehran.

At the same time, Khamenei said, Israeli military strikes that hit civilians or assassinations of Palestinians by Israeli security agents are not condemned by the West as acts of terrorism.AP

This follows the declaration by Mahmoud Ahmadinejad's occult master that Belt Bombing was fine and dandy.  Persia dipping their toe into another Arab custom.  I would think that Persian pride would ask why the hell has Persia adopted Arab occultism?

Something fishy about the Bitcom crash

"It appears that someone who performs audits on our system and had read-only access to our database had their computer compromised. This allowed for someone to pull our database," the statement read.BBC
The theft happened at Mt Gox, a Bitcom exchange. But trading is peer to peer, the private key of a trader is needed to steal, Mt Gox should not have that. We are not hearing the whole story here.

Here is part of the story:
If the certificate authority's root key is stolen, then anyone can create digital certificates, which compromises the trust level of the certificate authority and makes all the certificates from that certificate authority null and void. PKI for Dummies

More later

Friday, June 24, 2011

African American mobs in action

By Logan Smith

COLUMBIA, SC (WIS) - All eight suspects are in custody after a brutal attack in Five Points early Monday morning which left the teenage victim in critical condition, according to Columbia police.

Columbia Police Department spokeswoman Jennifer Timmons said 19-year-old Thyeem Henrey was charged with second degree assault and battery by mob, common law robbery, and criminal conspiracy. He appeared in court Friday afternoon where the judge set bond at $750,000. WISTV

It it me or has anyone else observed that rage attacks from African Americans are more common. Am I allowed to point this out?

Cook County debt scarey

Every Chicago household’s share of local govt. debt: $63,525
Adding in their share of federal and state debt, each household in Chicago is pays about 7-8 grand in government debt service, coming off of taxes.

Its all Greek to me

George Papandreou, the Slovakian premier Iveta Radicova told the European affairs committee of her parliament that the Greek PM had doubts whether the [latest austerity] steps would pass in parliament. Euro Intelligence

Thursday, June 23, 2011

What Happened to the Government's Duty to Iron Out the Business Cycle?

Is central government properly matched to balance out the economic ups and downs.  Brad wants to know, and so do I.

If government multipliers have any meaning, then they are traceable in their ups and downs.  We have downed, then upped a bit, then downed, then upped a tiny, and now we dip.  Over that three year baseline, who has discerned the multiplier going from up to down then up?  Central government does not have that bandwidth.

But what about the long wave balance?  Exactly, look at ten year treasury yields since 1980; then talk about balance.

Safety and security of the digital hardcoin

The first rule is that the coin is unpowered, and inert. Second, the coin can have a unique stamp. Third, the coin has some good metal in it, making forgery expensive.

When unpowered it is still real money, though buyer should have open access to read value by powering the coin and requesting public information from it.

When then is the disutility between the digital hard coin and a gold coin? Digital coin needs low cost value readers. The digital will wear out eventually.

Different exchanges could produce their own versions.  Small value coins, say up to a hundred, no password required, good to go.  And they talk to the register, can take change and be returned.  High value coins storing thousands might have a simple four button password arrangement, making them slightly bulky.  Manufacturers guarantee them to be valid Bitcoin accounts and sell them, adding mechanical durability, embedding the chip, and adding precious metals.

The chip issues a serial signal, its program is read only, certified at the manufacturer. It is a two port coin, power and signal; the case providing neutral.  It can be laid simply on the reader. At the gas pump it works like a credit card, but can be anonymously traded cash. All the registers will know how to talk to it.  Industry can try out mechanically raised lettering for serial proofing of their quality.

Consider the high end digital coin, encased in gold.  It can tell you what its nominal weight should be and who manufactured the thing.  The extra intelligence is less than a buck, and rides along with the gold. The brains make no exchanges, gold speaks for itself, but it makes the gold much more liquid since its contents can be truly reported anywhere there is a low cost reader.

Common everyday hard coins.  Really just instant ATM cash accounts one might by, just to use the payment system.  At the low end, they are disposable, simple plastic disks with the bare minimum metal for connections.  Use them up then return them via the merchant chin for recylcling.  They can be dated at the low end, spend and return within some time period.

Retail advantages.
Mainly the low cost reader and no need for connections or verification.  The coin secures itself, and the readers should cost less than a cheap calculator.  Unlike a credit card, I can grab a small valued digicoin and loan it out for errands, just like cash.
Why not?.

Bitcoin Bank Robbery

Huge Bitcoin sell off due to a compromised account - rollback

With my idea for hard Bitcoin money, the user could lay the digital coin atop his wallet and absorb the residual cash into the coin. The coin itself could be just enough to have storage, and it is unpowered while in your pocket. About the size of a large silver coin.

Inverted yield curve

The Greek 2 year yield was up to 28.6% today. The ten year yield was up to 16.9%. Calculated Risk
Greece has to reduce its short term deliverables by 10% in order to prevent a bankruptcy. That comes to a 10% reduction in civil service payouts.

Eric Cantor panics when the cuts hit home

Why did he back out of budget cuts?
Because when the cuts hit the defense industry, especially all those naval personnel in his district,then Cantor panics.

How to protect your algae farm in a hurricane

You have to sink you algae bags about ten feet below the ocean surface to keep them out of the wind.  The bag technology has to release the trapped air then using the light weight anchoring system, just winch the bags below the surface.

Gulf Coast Ocean Depth

Gulf Base:
he Gulf of Mexico basin resembles a large pit with a broad shallow rim. Approximately 38% of the Gulf is comprised by shallow and intertidal areas (< 20 m deep). The area of the continental shelf (< 180 m) and continental slope (180 - 3,000 m) represent 22% and 20% respectively, and abyssal areas deeper than 3,000 m comprise the final 20% 

Hey, we could algae farm some small portion of the shallow rim and provide liquid fuels for North America.   But that delta around Louisiana  is nutrient rich, and close to an existing oil port.  Aqua bags for algae growth should be a huge industry.

Schizophrenic Persia

Fundamentally, the fight conforms to a pattern of presidential politics that has troubled the Islamic Republic since the 1979 revolution. The system allows for two presidents, one divine, the other democratic. The divine leader, Ayatollah Khamenei, holds most of the power levers, controlling the military, the judiciary and the state broadcasting services.NYT

There is a rift between the religious president, who follows a warped version of an Arab religion while the un-divine president follows a further warping of the same religion. Like both are trying to deal with the horror that some Arab marauder invaded persia some 1300 years ago and left them with this bizarre religious belief, and they can't make it work.

Wednesday, June 22, 2011

We need the Super Bus in Vegas

The State of Nevada just passed Assembly Bill No. 511 which, among other things, authorizes the Department of Transportation to develop rules and regulations governing the use of driverless cars Forbes

Let's talk stimulus, shall we? The benefit here, at the minimum, is the Vegas Autobot conventions, easily another $50 million in convention business.

Compare Nevada with the Bay Area, Oakland. Today, Nevada can market the SuperBus and move people across a protected lanes for 20 miles at over 100 MPH. An Oakland Airport connector could do nearly the same, grab some lane space on existing roads, pay some cash up front and get out the curbing machine.

My secret girlfriend accused of thievery

According to House expense reports, Bachmann and three conservative GOP colleagues — Reps. Tom Price (Ga.), Steve King (Iowa) and Todd Akin (Mo.) — each paid $3,407.50 that day, a total of $13,630, to a sound and stage company called National Events, apparently for the sound system used at the rally.

The money came from the Members' taxpayer-funded office accounts, despite House rules prohibiting the use of these funds for political activities. Bachmann's office insists the expense was a proper use of official funds. RollCall

Nothing like Jerry Brown's use of taxpayer money to pay off the Guard Unions.

Samwick gives half the equation

Andrew Samwick, a former chief economist on President Bush's Council of Economic Advisers, told The Lookout. When the economy suffers from a lack of demand, as it does now, Samwick explained, most economists think increasing spending is the more effective way to generate that demand and get things moving again. Capital Games and Gains
The opposite is when the economy suffers lack of supply then extra spending by Congress reduces GDP.  Unfortunately, we have had three "lacks of supply" since 2008, three times energy shortages reared, three times that government spending reduced GDP.

We have little space for central government to oscillate its multiplier around one.  Not enough bandwidth in Congress to track the multiplier.


he first thing is that we use hybrid algae. In our case, algae can naturally make ethanol, but we significantly enhance that capability, which basically links photosynthesis and internal production of sugars with the conversion of those sugars immediately into ethanol. So, the algae gets carbon dioxide, sunlight and seawater and makes the small molecule ethanol. It leaves the cell naturally, goes into the culture and evaporates out of that culture. We have closed photobioreactors that lay on the ground—they look like a huge long ziplock bag.

The ethanol-water vapor collects in the headspace above the culture at night when it gets colder, condenses and runs down the inside walls into collection troughs. That ethanol-water mixture is enhanced in its concentration of ethanol compared to the culture, and we take that and purify it. The first and second steps of separation are all powered by the sun, so we don’t pay for any of those separations, nor creation of the molecule.

In our case, more than 90% of the carbon that goes in, in the form of carbon dioxide, gets converted into ethanol. It really allows us to produce a molecule much cheaper (than other methods). We’re trying to, on a commercial basis, produce ethanol for around 85 cents a gallon. And I don’t think cellulose or any other process can beat the dollar mark, or even come close to it.AIM

In my vision I see algae farmers off the gulf coast, operating 20 acre algae bag farms from anchored barges. They are experts at maintaining large algae bags, football field size. Experts at the various filtering equipment, passive and active. They produce algae products, diesel glycerides, protein, and alcohol. The gulf coast support about 10,000 of these.    The algae products delivered by small collection tankers for post processing.  Ammonia byproducts travel back to the aqua farm to close part of he loop.  Aqua farms thrive in delta areas with nutrient rich run off.

Algenol is on the track.  We will be looking at filtering technology in the next weeks.  I am betting on a bag technology firm to arise, with a focus on large scale, floating semi-permeable, flow through, multi-stage, durable bag technology.  Lotta early stage stock picks coming up, the well run algae genetics and seed firm would be great.

Hard money for Bitcoins

About the size of a large silver coin. Shaped like a coin, given a shiny surface. Underneath it is a Bitcoin account with self intelligence. Put them in a smart wallet and read their value, use them to power Bitcoin digital purchases or use then for poker chips. Mail them, collect them. They are powerless, drawing power from the wallet.

Tuesday, June 21, 2011

Saving the oceans is easier

Levels of CO2 being absorbed by the oceans are already far greater than during the great extinction of marine species 55 million years ago (during the Paleocene-Eocene Thermal Maximum), it concludes.BBC
Thanks for the CO2 fertilizer, we will scrub that away as we build the algae system.

My Gubmint Check!

(Reuters) - California's controller said on Tuesday he would not pay lawmakers after they approved a state budget whose "numbers simply did not add up," vowing to withhold paychecks until they submit a balanced budget.Reuters
We need California, the Comedy. Jerry can pay them in Lockyer Laserbacks.

In defense of incandescent bulbs

They make cheap heaters on a cold night in a small room.

Light transparency and plastic bags

For algae growth, we want to exude heat and retain the photosynthetic spectra. We can match the genetics of the algae to the filtering properties of the plastic, trying for th optimum combination. I will look that up.

But why do I expect such higher yields from plastic bag?
Four things, exposure to the sun, near sterile conditions, flow through production and availability of warm sea water. I think these together, with genetic engineering, will lead to 7-10% yield increases over the next five years. Current baseline is 15,000 g/acre; the high end of what algae can produce in open pond. The bag alone should triple that by eliminating invasive algae and allowing the producer to select from the current varieties. Then yields gains from practice and development doubles that. We also underestimate the churning action of the ocean surface, along with proper plastic film gets maximum light dispersal. Look up the illuminating power of the sun, more than enough energy.

So, I predict: 100,000 gallons of raw algae goo per acre per year.

A puzzler

…a significant part of the increase in long-term unemployment is indeed due to the inflow into unemployment of workers with relatively low job finding rates. Marginal Revolution quoting an IMF study.
I am not sure what sector are being discussed. However, if the sector is software and technology, then I am quite sure all available candidates are available via web search. Managers with open jobs in the software industry already know who the candidates are. Further, qualified candidates in the software industry already know who is growing and hiring.

Bad policy

We should attempt to bind the post-2015 congress through supermajority provisions and triggers so that if we have post-2015 gridlock we won't go careening off into disaster.Brad
Leaving policy choices made by today's legislature to be corrected by tomorrow's legislature; not a good idea.

Monday, June 20, 2011

We should put the California Dills Act on the ballot

The governor refuses to place any reform measures on the same ballot. Apparently, the public has a sacred right to vote on tax hikes, but not on anything else. Republicans are rightly frustrated about that stubbornness. “Senate Republicans provided Governor Brown and the Democrats a pathway to a bipartisan budget solution that would have allowed voters to decide on taxes, meaningful pension reform and a hard spending cap,” said Senate Republican Leader Bob Dutton after the veto. “On March 25, Governor Brown said no and broke off budget negotiations with Republicans. Senate Republicans will continue to fight for reforms that will heal the economy and put unemployed Californians back to work.” CalWatch
It appears to me that Jerry Brown wants to rig the outcome.

What did Keynes say?

Caplan wants to apply the Krugman Turing test.
Keynes proclaimed that the private markets overcompensate for shocks, and that government is a bit more stable. Or, alternatively, government can be made more stable than private markets.

Government, in our case, has been running up the debt since 1980, yet ten year yields have steadily dropped. Our legislature seems to be learning another lesson, the more government borrows the less stimulus it gets.

Where did Keynes make his error? He used a math that the economy doesn't. Keynes assumed that markets were infinitely divisible and support intermediate solutions. I don't have to go far to find out Keynes was a dunce. I have looked at the street outside my house for ten years, it is still the same width, and the cars upon it still take one whole lane. No infinitely divisible autos around here.

Which brings up to the Krugman anti-Keynes diagnosis, Stranded in Suburbia, in which Krugmen points out exactly the problem, we do not have intermediate solutions without new technology.

Who listens to Alan Binder

No, that's not a typo. House Speaker John Boehner and other Republicans regularly rail against "job-killing government spending." Think about that for a minute. The claim is that employment actually declines when federal spending rises. Using the same illogic, employment should soar if we made massive cuts in public spending.. WSJ

Alan Binder is a dunce:
For example, how is it that public purchases of computers destroy jobs but private purchases of computers create them?

Answer: The amount of energy needed to produce the last batch of computers make it uneconomical in the market. So, Congress, when spending on computers is buying computers whose production causes layoffs as energy is unnecessarily consumed. Now, California is hit with excessive federal debt service for computers we never needed. That is called multiplier less than one.

Take at look at the rise of federal debt since 1980, and also look at ten year yields and wage distribution. What does it tells us? Productivity and GDP lower when Congress spends excessively via debt.

Murdock likes Perry

Between January 2001 and June 2010, the Bureau of Labor Statistics calculates, Texas’s non-farm employment grew from 9,542,400 in January 2001, when Perry took office, to 10,395,800 in June 2010 — an increase of 853,400 or 8.9 percent. Big-government California simultaneously lost 827,800 jobs. Employment in Texas grew more than in the other 49 states combined. “Texas was one of the very few which even added jobs over that time,” BLS’s Cheryl Abbot told NRO
And he cites the California exodus:
Texas’s achievements so stunned Gavin Newsom, California’s Democratic lieutenant governor, that he flew a delegation to Austin last May to ask Perry how he lures defectors from the Golden State. Of the 70 companies that fled California in 2011, the Wall Street Journal’s John Fund reported last April, 14 relocated to Texas — these exiles’ favorite destination.
In which Gavim Newsom found the secret, no Gavin Newsom in Texas.

The Fed is raising risk premia?

The higher equity risk premium does not only discourage investment in general, it also favours sectors in the economy that are characterised by relatively high debt-to-equity ratios (e.g. the financial sector). It may explain why – by the mid-2000s – bank profits accounted for 40% of S&P 500 companies’ profits combined. The “financialisation” of the economy is often attributed to deregulation. However, the combination of low bond yields and high equity risk premiums, which favoured the banks disproportionately, contributed to the financialisation as well.Heleen Mees
The argument is that in the early 2000s, emerging markets did not have access to good equity investments, and plowed their savings back into fixed income assets. Hence:
The higher equity risk premium does not only discourage investment in general, it also favours sectors in the economy that are characterised by relatively high debt-to-equity ratios (e.g. the financial sector). It may explain why – by the mid-2000s – bank profits accounted for 40% of S&P 500 companies’ profits combined.
In other words, with easy money and arbitrage, corporations mainly traded paper. There is however a deeper issue. With energy shortages, corporation found no way to make money with high input prices. Corporations bet on the Socialist Banking Industry, supported by Congress and lil Bush. So, yes, the crash can be blamed on Bush and the Red State Welfare problem.

Reversion to commonwealth status

Residents of Puerto Rico
"Income you receive from Puerto Rican sources during your residence in
Puerto Rico is exempt from U.S. tax. This includes income for the
period of Puerto Rican residence in the year you change your residence
from Puerto Rico if you resided there at least 2 years before the
change. However, income you receive for services performed in Puerto
Rico as an employee of the United States is not exempt from U.S.
income tax." IRS

If California defaulted and ceased operating as a state of the union, what is its status? Where is the best place to default? In Congress? No, in state government. In one fell swoop a state can opt out of the USA by default. California would not be seceding, California would simple be unable to carry out Due Process and citizens would thus default to territorial status.

McConnel goes for Red State Welfare

On Sunday, Mr. McConnell said if the White House and Congress can’t reach a deficit reduction deficit reduction deal that includes entitlement reforms, then GOP lawmakers may approve “a very short term” increase in the debt ceiling and revisit the issue in the fall. “You cannot ignore entitlement reform,” Mr. McConnell said during an appearance on CBS’s “Face the Nation.” WSJ

McConnell chickens out when he discovers that Kentucky's 30% welfare bonus is threatened. All the more reason for California citizens to engage in a federal tax revolt until we get more than 1/5 of a Senator.

Nutty Islamic Pakastini Belt Bombers

A girl of nine has told how she escaped Pakistani terrorists who tried to use her as a human bomb. Sohana Jawed said she was kidnapped on her way to school in Peshawar, and forced to wear a remotely-controlled suicide jacket. But she escaped her captors as they prepared to send her towards a paramilitary checkpoint.">A girl of nine has told how she escaped Pakistani terrorists who tried to use her as a human bomb. Sohana Jawed said she was kidnapped on her way to school in Peshawar, and forced to wear a remotely-controlled suicide jacket. But she escaped her captors as they prepared to send her towards a paramilitary checkpoint.

Naked animals in the water

HT Instapundit

Prince George and the Taxi Medallion corrupution

Akinrelere had expected to obtain one of 400 coveted new taxi medallions that were to be issued after the County Council voted last year to expand the number of cabs in Prince George’s.

But the taxi officials gave out only about two-thirds of the medallions that were promised. The remainder may never be issued, if a bill slated for a hearing Tuesday wins approval. That, drivers say, would reverse gains they achieved last year after a nearly five-year political battle. WA Post

The issue is taxi congestion, the solution is congestion pricing for taxis. Here is how my law works. Anybody who wants to operate a taxi get the GPS-Ometer for a few bucks. When the taxi is in a taxi congested area, then the driver will pay a per mile fee.

The solution is simple, so simple that taxi corruption is the only reason to dismiss it.

Sunday, June 19, 2011

Riordan Downgrades LA

He said Los Angeles, like many cities and states, faces dramatic increases in employee pension and health-care benefit costs over the next several years.

Riordan served as mayor of Los Angeles from 1993 to 2001. He believes muni doomsayer Meredith Whitney is right with her prediction that local governments are in big trouble. Bond Buyer

California local governments are getting toes to the line, ready for the starting gun.

Boehner and the Clean Debt Hike

The Fed is all pooped out

This graph show the Fed dissipated any stimulus powers it had by 2005. JDH has the rest of the story.  But it seems there are two Fed policy regimes, hard and easy.  The Fed needs to do both, periodically, but has been doing too much of the easy lately.

My theory is that the economy computed Fed policy, not the other way around.

IMF Fears Fire

Thanks to Democrats’ delays and the Biden talks’ debt-ceiling-debate target, the budget discussion will be rolled into the debt limit debate — and the IMF will continue to warn against “playing with fire.” But it didn’t have to be this way.Hot Air
Where there's fire there's energy. Make Congress meet and continue for three months and meet and so on. See how they do Under Fire.

Saturday, June 18, 2011

UK Banks run like heck

UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a “Lehman-style” event connected to a Greek default. Telegraph

Algae bag technology

This is outdoor, clear tarp in sizes of 20 by 30 feet. Two of these made into a bag works as well as any hard plastic bioreactor.  Result: 2,000 gallons of biodiesel per year.
We  need this:
Nutrients are present in several forms in aquatic systems, including dissolved inorganic, dissolved organic, particulate organic, and biotic forms. Only dissolved forms are directly available for algal growth: for nitrogen and phosphorus these include ammonia, nitrate, nitrite, and orthophosphate (as well as dissolved CO2, and dissolved silica, etc.) KRIS 

So, setting up near waste treatment helps. We need to recirculate water, so we need a holding pond or tank.

Filter technology for the hobbyist. Pool filters work here, but simple lower pressure flow filters are just fine and cheaper.

And then we need algae stock, hmmm, this site helps! Oilgae This is the garage market that will transform liquid energy.

From that web site, a multi-stage bioreactor. This one lets the algae gro into proteins, then process the proteins with an enzyme:
But, one of the noted problems with protein usage is the nitrogen content. Liao’s process, which has already been licensed by an unnamed company, takes out the nitrogen from the proteins and recycles it back into an algal growing pond. By altering the commonly used E. coli bacteria, Liao and his team developed an artificial metabolic system that converts the algal proteins. “The metabolic system is like fermentation,” he said. First the algal proteins are harvested then “cooked” for nearly an hour at 80 to 100 degrees Celsius, turning the algal proteins into a hyrdolysate. Then, those proteins are fed to the altered E. coli, which ferments the proteins into alcohols and, at the same time, secretes the ammonia for reuse

The algae industry will support a variety of algae processes producing a variety of portable energy fuels.

I invent the secure digital wallet

The secure digital wallet has secure permanent memory built in.  Said memory is decoupled from the general CPU by a separate operated digital gate.  Said gate can only be activated for a period after password is keyed in, There, I am the first to file.


Looking for hygrogen

See those hydrogens bound up in the molecule

We get tons of that from algae farms. It goes almost directly into the diesel engine. Purely solar, we just use carbon to carry the energy.

With the shortages we have, an algae farmer could net $50,000 an acre; with about $200,000/acre investment in plastic bag and equipment. The farmer operates from stationary barges, running 320 acres per barge in plastic bags. New Orleans would become a water farm hub, and deliver a third of the nations transportation fuel needs.

Almost, but Rick has to speak to the Senate problem.

"This administration in Washington that's in power now clearly believes that government is not only the answer to every need, but it's the most qualified to make the most central decisions for every American in every area," Perry said. He called Obama's approach to the economy "an affront to every freedom-loving American and a threat to every private sector job in this country."National Journal

Rick Perry speaking to Republicans from the welfare state of Louisiana, garnering an extra $.78 for each federal tax dollar. Gov Perry is from a state that gets 1/4 of a Senator, compared to the welfare states. Texas pays a 6 cent premium as of 2005. So when Rick proposes the traditional Republican populist program, more debt and more Red State welfare; citizens who elected him in Texas will be face higher debt service costs.

Big states produce presidents because it is one of only two fair votes we get, that and Congressional. My advice to Texas citizens, this time send in a president who will force default and restructuring. The only way to insure Red State Welfare is via regional governments, the formation of which produces safe assets.

Friday, June 17, 2011

The Treasury curve seems noticeably flatter

Dynamic Yield Curve

Why would the curve get flat? Strictly speaking, Congress is reducing the network complexity, adding certainty to the distribution of government goods. Two offsetting factors work together. Economies of scale are reduced, fewer stages of production, a rank reduction.

Complexity theorists make videos

Shown here on Thoma's site. He is continuing the theme I approach as network theory vs smooth theory. If you watch the videos, the central idea to keep in mind:

When network flows are very certain, the agent creates network complexity to sub-divide the flow, obtaining gains from specialization.  The network always tries to return each node to the same constant of uncertainty in inventory.

Community College cuts

COSTA MESA — Coast Community College District trustees approved a tentative budget this week that cuts about 10% of classes across its three colleges in order to help fill in a $15.5-million budget gap.

The district unanimously accepted its 2011-12 budget Wednesday night.

Modifications could be added to the final budget that the board will vote on in September. Topix

Except for gym, cafeteria, drama, arts, sports, and labs; drop all the classes and replace them with tablets and seminars. Seriously, go for the technology assist, smaller groups meeting less often., assisted by technology.

Thursday, June 16, 2011


Restructuring of federal government. The yield curve is closing in no another noise floor, maybe one more than Congress can stand. We have been getting lower and lower yields from Congress since 1980.

Invitations to a belt bombing

An al-Qaida-linked website has posted a potential hit list of targets that include names and photos of several U.S. officials and business leaders, calling for terrorists to target these Americans in their own homes, NBC New York has learned.NBC
That would be the gurus from Arabia who steal women and watch porn.

The New Orleans Algae Convention

Right? Where else do the workers live ten feet under the factory floor.

Nanotube filters

CARBON NANOTUBE TECHNOLOGY PROMISES to lead to the next generation of filters. Filters are critical elements of both liquid and gas phase processes. In cleaning processes, filtration may remove contaminants from cleaning agents prior to a process, maintain cleaning agent quality during the process, and treat prior to disposal. High Efficiency Particulate Air (HEPA) filters are critical components of cleanrooms. Controlled Environments

Make them in large sheets, 100 sq ft? Please?

Here at Imagisoft, we think of a completely passiove system that uses wave motion for flow through algae production. The bags are about one football field each, but oriented to forward wave action. Permeability is controlled to prevent micro-organisms. It is seeded from one end, open and churned in sunlight, and goo forced out the other end.

I partially stopped ethanol subsidies

I supported my partial Senator Feinstein who got repeal through.

Baker is a monetarist?

Suppose that emerging economies announced tomorrow that there will be no more loans to the United States.
Nope, no money illusion here:
Could this lead to inflation? It is unlikely given the massive amount of excess capacity and huge numbers of unemployed workers in the U.S. economy.
A lower dollar is essential for getting the trade deficit down. Everything else is chicken feed.
Would the lower dollar lead the rebalance? Well, it will be very close behind.
This means that if deficit whiners understood economics, they would all be demanding a lower-valued dollar.
This is not true.  If you want more exports and less imports, you have to stop the oil tankers coming from Arabia, and sell energy conserving machines.

PIMCO might get what it wants in California

With Brown's veto the timing of a budget for the fiscal year beginning July 1 is uncertain. But Christian Stracke, head of credit research at PIMCO in Newport Beach, California, said that does not worry him if Brown follows through on his vow for a spending plan free of one-time moves and gimmicks.

"He's decided to take a stand, and to take a stand to continue to try to address the long-term fundamental fiscal problems California faces," Stracke said. WNFL
But it will come at the expense of what PIMCO wants in Washington DC, now that is has reversed its bet.

Brown vetoed the Dem budget, because it was made of one time tricks. I prefer to call it month by month budgeting, making the legislatures work.

If Brown wants to solve the fundamental California problem, then welcome to the revolution against DC.

Tea Party Welfare

WASHINGTON — The Republican-led House voted to slash domestic and international food aid Thursday while rejecting cuts to farm subsidies. WA Post
Voters are not idiots, we knew that Tea Party Populism would fade when their welfare goodies were threatened.

The Real Tea party comes when NY, Texas and California demand a fair democracy.

Minnesota has no excuse

Though the Twins agreed to pay approximately one-third of the cost, the rest of the bill was to be footed by a 0.15 percent sales tax hike in Hennepin County -- a relatively small encumbrance on the state's largest county, but an increased tax burden nonetheless. The bill was controversial, since the state legislature and Pawlenty took advantage of a 1997 law to grant the county board permission to enact the new tax without a voter referendum.
Seriously, how can Minnesota send a politician to the presidency with these kind of contradictions.

Black Culture is embarrassing

Black male prisoners, however, consistently exhibited lower death rates than black male nonprisoners did. Project Muse 
I mean, I am embarrassed to be Black if my culture cannot protect itself without Union Guards and prison bars.

My simple math on algae production

The USA consumes 800 million gallons of oil a day. A well managed acre of algae per day can produce 200 gallons, and that number should rise with technology. That is .13 million gallons per square mile. I have farmed 640 acres before, I should put that on my resume. 640 acres is a square mile. Who is going to farm a square mile of plastic floating bags? A stationary supertanker might.

So, do I have that right? .13 million gallons per day per square mile of algae? 5000 square miles of algae farming off shore in the Caribbean. Do a lot of it on shore, get algae production up to 200,000 gallons per acre per year. Easy stuff.

Wednesday, June 15, 2011

The PIMCO two step

They talk their bet. When they bet against Treasuries, they claim we are at risk of default. When they reverse their bet, suddenly Treasuries must be guarded with our lives:
NEWPORT BEACH – It has been raised more than 70 times in the last 50 years, mostly without commotion. It must be raised again this summer if the United States government is to continue paying its bills on time. But now America’s debt ceiling has become the subject of intense political posturing and touch-and-go negotiations behind closed doors. And, obviously, the outcome has implications that go well beyond the US.

The web bots are laughing at these histrionics.

Herbert Hoover Jr and the garage radio designers

James Millen (amateur radio call sign W1HRX) in Massachusetts was in charge of the mechanical design. According to several accounts, Herbert Hoover, Jr. (amateur radio call sign W6ZH), son of US President Herbert Hoover, and Howard Morgan (of Western Electric) designed the electronics in Hoover's garage in Pasadena, California.[1] Dana Bacon (W1BZR) was also involved and wrote about the receiver as second author with James Millen. Some of National Radio's tool makers marked their overtime slips with HOR for "Hell Of a Rush." Management decided that a version of that abbreviation should be the name of the new receiver, choosing the slight alteration HRO to make it less objectionable.[2][3] That was quickly countered by saying that HRO stood for "Helluva Rush Order" [4].

These garage radio amateurs caused the great Depression

CO2 scrubbers around the world in algae production

Production so efficient we get surplus vegoil algae. Five thousand square miles of algae plastic bags in water farms around the world. Supported by a green revolution in energy algae genetics. It will be our first planned geoengineering project. Increasing automation and growth in these farms lead to increasing control over CO2 levels.

Key industrys:
Automated water farm tools. Filter systems, passive and active. Plastic bag systems and construction and production. Genetic seed and engineering companies. The industry will scale, to include farming at two to 200 acres water sites.

Very water intensive and favoring salt water coast locations.

Marketing to OPEC

The cartel of oil-producing countries will have $1 trillion (£600bn) in revenues for the first time this year, benefiting from high prices that may cause a "double-dip recession". Teloegraph
They can coinvest in the algae at scale industry. We take a number of good spots around the globe and suck CO2 into plastic bags.

GI vs Islamic nutcases

Lurking among the jihadists was a group of al-Qaeda operatives responsible for blowing up the American embassies in Tanzania and Kenya in 1998. Those attacks, which killed 224 and wounded 5,000, were the curtain-raiser for the war on terror. In 2007 Abu Taha al-Sudani, an explosives expert, was killed by the Americans. In 2009 Saleh Ali Nabhan, a Kenyan was accused of carrying out a terrorist attack in Mombasa in 2002, was killed by an American helicopter strike. Nabhan's death left a Comorian, Fazul Abdullah Muhammad, as the head of al-Qaeda in the region. The Economist

Oil Charts

Kedrosky wants us to look at this chart showing a crossover into a structural oil  deficit.
The economy will actually do the calculations for us with the dollar deflater:

The oil prices chart works because it displays the correlation between dollar deflater and oil trade. The variation in the international value of the dollar is mostly determined by American oil imports, has been since 2001.  That is a sign of oil shortages, though economists often imagine some money illusion that causes the problem.

Jerry Brownshirts trash voter rights

After being amended last Wednesday, the Assembly approved AB 438 on Friday, so the bill will now move to the Senate. Under the terms of the legislation, if a city wants to contract out for its library services, it will have to jump through hoops due to restrictions that will dictate how and when a city can contract for a service. Cal City
Close the city libraries, take the savings and donate tablets to the local students.

Breaking the back of DC borrowing

SAO PAULO, June 15 (Reuters) - For the first time, investors saw Brazilian debt as less risky than highly rated U.S. debt, which Finance Minister Guido Mantega said on Wednesday was a reflection of Brazil's economic resilience and soundness.

Mantega, speaking at a news conference in Brasilia, boasted that financial markets briefly perceived the once debt-laden emerging market economy as bearing lower risk than the United States thanks partly to its stronger fiscal position.
Great news when investors begin to look accurately at sovereign debt.  Hopefully this will stop the borrowing in DC.

Social networking boom in Silicon Valley

The advances are defying a U.S. housing slump that has sent national values to an eight-year low. Share sales such as the IPO of LinkedIn -- which doubled on its first day of trading -- and an expected offering from Facebook will fuel a boom in some Silicon Valley cities into 2013, said Kenneth Rosen, an economist at the University of California, Berkeley.Bloomberg

This will not last. None of these companies have any idea on how to make money.