Tuesday, December 31, 2013

Things to watch in 2014

Mexican oil deregulation:
The bill ending the state monopoly was approved by the Mexican Congress Dec. 12. Before becoming law, the proposal must be ratified by state assemblies, most of which are controlled by proponents of the reform. Oil companies will be offered production-sharing contracts, or licenses where they get ownership of the pumped oil and authority to book crude reserves for accounting purposes. The contracts will be overseen by government regulators. 
Return of the Tea Party:
Last week Treasury Secretary Jack Lew told Congress that they project the debt ceiling to be breached in the weeks after February 7th, and that will not negotiate.
Treasury Secretary Jacob Lew is telling Congress that he will have only a few weeks after Feb. 7 to avoid an unprecedented default on the nation’s debt. He says Congress should act quickly next year to raise the borrowing limit.
As part of the agreement that ended the 16-day partial government shutdown in October, Congress suspended the debt limit until Feb. 7.
Splintering of the medical industry:
As part of that control, the federal government is setting prices either directly (for Medicare and Medicaid) or indirectly (for exchange plans). Medicare reimbursement rates are much lower than posted prices at most health services providers, generally only about 40 percent of the full posted price. (Most private insurance companies also pay less than the full posted price.) Medicaid reimbursements vary considerably relative to Medicare, both by services and by state, but on average Medicaid paid 34 percent less than Medicare.
And this chart:
How long can the Fed holds rates at zero?

SemantiSoft, my two dollar company

For reasons having nothing to do with selling software, I happened across the web name semantisoft, obtained as a discount from registering something else. Now I am the proud owner of www.semantisoft.com. All that JSON and database stuff I was playing with, I reassigned it to SemantiSoft. This is not my first company formed out of whole cloth on this blog. I previously had Imagisoft whose mission was to Imagine Imaginary Things. I spent zero dollars in that company, and broke even.

Anyway, that brings up software.  I have the urge, because I have a Linux machine now (Ubuntu) , and building a Json join kernel is much easier on Linux than the other. But I am a hobbyist, and not likely to take things seriously enough to produce a production version on GitHub. Betting against myself has been one of my most accurate bets. But, playing with my c compiler is hard to resist, stay tuned, I might just get ferocious with the software again.

Welcome to California

AccuWeather: Two storms will merge quickly enough to produce a major snowstorm from the upper part of the mid-Atlantic to southern New England Thursday into Friday.
The storm will affect more than 70 million people in the Midwest and the Northeast combined and could have a major negative impact on travel for people returning from holiday destinations, heading back to school or resuming business activities.

Seriously. Instead of freezing your ass off, come out here and help us subdivide the state. All you North Easterners can have your own state. Texas makes the same offer.

We don't have jobless benefits because Democrats prefer discretionary spending

Hillary Clinton Calls for Restoring Jobless Benefits
When Congress returns from its holiday recess, the Senate will consider a bipartisan bill that would extend the benefits program by three months. But support in the House is not assured, and House Speaker John Boehner (R., Ohio) has said Republicans would back an extension only if it is paired with spending cuts elsewhere.

Hillary is the usual delusionist. It was her friends that bitched about sequester and cuts to discretionary spending. When they finally get that restored, at the expense of unemployment, then they bitch. The basic problem is Hillary has a choice. She can call for growth, in which she has to plug a 15% hole in the federal budget, or she can push for a downturn. That hole arises because our government in DC just got their interest payments increased, and they will likely have to allocate 15% of their budget for interest expense. They jump borrowing in the bond market during high growth, they will shoot rates way too high. Just to cover interest expense, they will need to borrow an equivalent of 1% of GDP.

Gobierno en Washington no puede permitirse los pagos de intereses durante los períodos de alto crecimiento
Aquí están los números:

We collect about 18% of income for taxes in DC.  Our interest expense becomes about 3.2% from 1.8% over in the next year, mainly due to growth. That is a jump of 1.4%, or 7%.  That is the minimum size hole. Congress needs to plan for 10% jump if they want to sustain growth.

Not impossible, over the next few years, taxes will rise a bit faster than growth. But our Congress is not likely to pull it off, their track record is dismal. The odds still favor a sharp rise in interest rates at just the wrong time.

Asians counting daffodils

Government debt crushing the middle class

China’s Local Debt Swells to 17.9 Trillion Yuan in Audit

China’s local-government debt swelled to 17.9 trillion yuan ($2.95 trillion), underscoring risks to the financial system as President Xi Jinping rolls out economic reforms. Debt including contingent liabilities rose about 13 percent in the six months through June, based on figures in a report by the National Audit Office, posted on its website yesterday. That followed a 48 percent increase over the previous two years. China’s borrowing spree in recent years has evoked comparisons to debt surges that tipped Asian nations into crisis in the late 1990s and preceded Japan’s lost decades. The audit result adds pressure for Xi, yesterday named head of a Communist Party leading group for reform, to repair a fiscal system that starves local governments of tax revenue.

Much of this suddenly discovered by a confidential audit. The borrowing bulge bounces between China and Japan. Both trying to recreate the past when the USA was the base consumer. But they are getting rebellions as they pass the losses onto the middle class.
Clase media y los pobres siempre paga la deuda del gobierno

What you know, Kevin Drum, is what passes the Orwellian censors

Some folks have granted their free speech right to the NYT Orwellian society.
That said, after more than a year of investigation we know a lot. And while I was out of town, David Kirkpatrick of the New York Times produced a state-of-the-art summary of where the best evidence leads us. The whole piece is well worth reading, but I'd highlight a couple of things.

It is no surprise, we notice the hemming and hawing in your prose when you near the border of allowable ideas. We also notice the other half, Yglesias, not limited to little boutique articles, so as not to tread across Orwellian waters. Both of these sold their soul's a long time ago, both forced into bondage by the NYT, Wall Street, and the political masters in DC.

Nuestros derechos de libertad de expresión, restringidos por el maestro político en DC.

Howard Dean, statistically incompetent hick from a teeny weeny state

What works in Vermont is surely going to work in California!
Mr. Dean, a onetime presidential candidate and the former governor of Vermont, said that for young people under 18 in his state “the individual mandate is really not that necessary and the actual data does not lead to the conclusion that you’re going to have huge cost overruns for the insurance companies.”

Well, ask Jerry Brown. He thinks it is fine and dandy to send California the sick and disabled. But Darrell Steinberg, Cal Senate Leader and master in charge of government goodies , says no, California is tired of being told by DC to pay for everything. Who created this entire mess? Nancy Pelosi, brilliant, just brilliant.

Monday, December 30, 2013

Our dual nature: It is in the PSST theory

Patterns of sustainability and specialization should read patterns of Sustainability or Specialization. We grow by increased specialization and shrink by increased sustainability.

The first theorem of PSST should read: When the marginal cost of a product drops, then the product becomes a component in specialized versions of itself.

Apply this theorem to the Bitcoin debate.  Bitcoin technology is reproducible with a press of a button, it is open source.  Hence the technology will be the foundation of a variety of specialized crypto currencies with restricted uses. And in fact, the smart card is a general purpose accounting technology. Its uses extend beyond mere money because the smart card can support a variety of digital accounting currencies. Rather we get an extended definition of currency.

Smart cards work well with bar card readers, point of sale, time card technology, warehousing and general inventory, portfolio instruments, and voting technology.  These cards will be everywhere that humans need to count.

I almost wrote software

Came damn close, brought up the development system with the JSON join machine and stared for 30 seconds.  Just to threaten myself, I guess.

Cuando gobierno no confía en los pobres a tener dinero

The poor have a greater propensity to save, cash is their major asset.Heaven forbid we would risk a bust to make cash savers better off. No, instead, lets get that cash and have DC spend it on their behalf:

Narrowing the Income Gap, Without Another Bust
 Jared Bernstein says:
In our era of historically high levels of income inequality, growth is of course necessary, but it’s not sufficient to lift the living standards of the bottom half.  The chart above gives a rough look at the problem, showing the growth over the expansion thus far in G.D.P. (up 10 percent), corporate profits (up 50 percent), the Standard & Poor’s 500-stock index (up 77 percent), and median household income (down 4 percent), all adjusted for inflation.

Yet, those poor households are mainly savers, and the short end of the saving curve has been flatlined, under orders from the NYT and its allies in DC.  The NYT is guilty of an Orwellian desire to centralize all of the poor's budget into DC, they make a business out of it.

If government in DC really wants to help the poor, then make cash labor legal and let the deposit rate rise.

Ted Curz announces an anti Canadian foreign policy

Ted Cruz denies the value of Canadian citizenship. "Canadian citizenship papers are worthless", Ted scoffed at a reporter.

Belt bombing Russia

The claim among the spy websites is that the belt bombings are related to Putin's mercantilist attitude toward a Syrian fuel pipeline. Some part of the Saudi intelligence regime controls the belt bombers. So this is all a Great Game.

I doubt it. I think this is Russia, Europe, China, India, and now us; building a barrier between the North and the nut case Arabians. This barrier is built from a Shia arc, from Hezbollah thru the Opthamologist, Iraq and Iran. The Iron Curtain of our age.

The path from Africa to Turkey is where a lot of evolution takes place, it ain't pretty and humans are altering the regime.

Sunday, December 29, 2013

My letter to the Fresno Bee

Why I support the Draper proposal to break up California

In short, Fresno is the poorest because Fresno is neglected within a sea of 38 million people with only two Senators. Central government, in Washington DC, takes 15% of our taxes is managed by 60 Senators from 30 small states. These middle America states with 3-8 million people are barely knowledgeable or interested about Fresno. Most of us cannot even name these ruling states. But they own the Senate. We are an entity that is traded, behind the scenes in the parlors of Washington DC. We get a train because Chicago wants one. Suddenly No Child Left Behind just shows up, and California education is in turmoil. All of these cases, we are not there, we are a chip in someone's game.

Let may change the subject subject here to the Constitutionality issue of Texas and their eight new Senators. I think Texans should consider two options, create senate districts and share the current legislature and governorship. The second one would be to elect all ten Senators at large.  The first will pass Constitutional muster. The second if iffy. There is an implied containment in a 'state'; its citizens must be able to act cohesively as a plebiscite, and elections at large have a hard time meeting that condition. It may be especially onerous if a plebiscite is convened among 1/8 a fraction in a heterogeneous population. But Texas could test it anyway.

Desigualdad, el tema de nuestro tiempo

Gobierno hace los desiguales: 

The poor have been getting poorer, the richer richer; and its been going on since the mid 70s. During that period, real growth has slowly dropped, the two have been connected and economists are taking their positions. Its a real problem, the connection between inequality and growth is real. The logic is compelling. Growth is a rise in incomes. Total growth is to be had by summing up the income distribution. But growth is also obtained by summing up the yield curve. Those curves gotta match. So when Ben slams the short end of the curve to zero, he is reducing incomes. When Ben is pushing the curve to the right, he is making the rich richer. And the data seems to agree. This problem, naturally, is closely associated with our skew between the need of the little Hoovers and the big Four. DC can no longer push large programs through value added government and the chain operates on the edge of collapse. Most of us know it, we are all just in various stages of denial. Lot more to come, stay tuned...

Saturday, December 28, 2013

So, the father to the rabbi, 'how much do you charge'

The rabbi said, 'nothing, I only take tips'
PITTSBURGH (KDKA) – A local rabbi is being sued after allegedly botching a bris, the traditional Jewish circumcision ritual, and severing a newborn boy’s penis.

How does repressing interest rates help the poor?

Not at all, as a matter of fact it hurts them: Saving Most Popular Among Lower-Income Americans
In fact, Americans with the absolute lowest annual household incomes, $20,000 or less, are the most likely to say they enjoy saving money (66%) rather than spending it (30%), compared with Americans at other income levels. The propensity to save drops off notably among those bringing in $50,000 or more, though the majority still lean that way, including 56% of those with household incomes between $50,000 and $74,999 and 55% of those earning $75,000 or more.
But DC wants cheap money so the poor pay the price. 
Déjame decirlo:
De hecho, los norteamericanos con los ingresos domésticos anuales bajos absolutos, $20.000 o menos, son los más propensos a decir que les gusta ahorrar dinero (66%) en lugar de gastarlo (30%), en comparación con los americanos en otros niveles de ingresos. La propensión a ahorrar disminuye notablemente entre los trayendo en $50.000 o más, aunque la mayoría todavía magra así, incluyendo el 56% de aquellos con ingresos entre $50.000 y $74.999 y el 55% de los que ganan $75.000 o más.
Pero DC quiere dinero barato, por tanto, la pobre paga el precio.

Asymmetry and Dualism

Why do we crash the economy fast and grow it low? I have my ideas, and this is a topic that will be around for a few years.  But first, we have to make sure the assumption is true.  Maybe we jump up fast, and jump down fast, but stay in the middle slowly.  We have not discussed the possibility of a jump up, suddenly, in GDP, and it may happen.

But, where the economic debate now stands, we have to ask why are we dual natured. The prior theory was that collective action was different than individual action. Man is not inherently dual natured, just the herd is. That view is being pushed aside for a while, now we ask: Why and How is man dual natured?
Andolfatto says job searching is different than job firing:
As it turns out, the sharp rise in unemployment followed by a slow decline follows as a natural property of labor market search models, something that I showed here (the example I alluded to above). The basic idea is very simple. As I explained above, the labor market is a market for productive relationships. It takes time to build up relationship capital. It takes no time at all to destroy relationship capital. (It takes time to build a nice sandcastle, but an instant for some jerk to kick it down.)

So why do we fire en mass and hire one at a time? In other words, the transaction time to complete the paperwork for hiring someone is about the same as for firing someone. In the meanwhile, the someone is looking for a job, but is listed as unemployed. All things being equal the economy would stabilize with a random walk around the employment line. Instead we get mass firings, and that is not immediately explained by the job search problem.

What is going on?

Economists are having to deal with asymmetry because we have flat lined the short end of the bankers curve. So we will go through a series of debates in which each economist tries to show asymmetry is illusionary, or an artifact of aggregation.  Each of these efforts willb e shot down by me, and eventually they will deal with dualism as a fundamental feature.

The Sac Bee photocopies the Fresno Bee editorial

Both rags owned by the same corporation, both rags resorting to ad hominem attacks on Tim Draper. And both rags under the control of the Undemocratic Party Oligarchs.

Estaré leyendo las noticias en Español

National havoc and chaos caused by Nancy Pelosi

MDs sue ObamaCare insurer over dropped doctors
WASHINGTON — A group of New York doctors is suing insurance giant UnitedHealthcare, charging that it booted doctors from its network to avoid cost hikes imposed by ObamaCare.

The California and New York party Oligarchs are going to be responsible for ten years of lawsuits, I blame Nancy, someone completely uneducated in the healthcare industry spear headed a bonehead disaster on America.

Look at No Child Left Behind, another of Nancy's bonehead moves. It has been a continual series of disruptions to California education.  It is not the citizen's out here, we do not have real democracy.

Where does Nancy fit into my list of evil California Politicians?

So many disasters, she is only third or fourth. I need to save the top spot of the most disasterous politician for  Lt. Governor Gavin Newsom; and he has barely started his set of catastrophes. That time bomb is enough for every American to force a California split.

My hometown paper chickens out on California split

EDITORIAL: Don't split up California

Fresno Bee: For all its flaws, California happens to have 53 members of the House of Representatives, which is about one-quarter of what any given bill needs to pass. So the argument that we're underrepresented seems curious. 

 Whose bill would that be? There are at least four different economies, does Fresno get the bill that San Francisco wants? Are we supposed to trust two affirmative action Senators who barely give us a vote in the Senate. How often do the two 129 year old biddies ever come to visit Fresno?

Draper's plan is the kind of thing a guy with money on his hands would do if he were looking for his next venture capital target(s): six new states that owe him something.

Read more here: http://www.fresnobee.com/2013/12/27/3686886/dont-split-up-california-drapers.html#storylink=cpy

The old ad hominem attack. The Fresno Bee fails to recognize the ongoing efforts in Jefferson, and Southern California to get the state right sized. These reporters in the Fresno Bee are born again oligarchs, and fairly stupid ones at that.

Remember the 60 vote rule in the Senate? These bozos at the Fresno Bee want it waived, so 60 rural Senators can set policy for California. Effectively they gave away what limited power Diane Feinstein has, just because the Fresno Bee thinks that Patty Murray, a Senator from Washington, knows what is best for California.

Where do the editors at the Bee really think? We are too brown to have a real Senate vote, too Hispanic for self rule, vegetable farmers too stupid to think. Maybe we don't have enough brains in Fresno public schools to teach proportional democracy. Tell us, editors, why we cannot have democracy?

Next up it the Sacramento Bee, then the LA Times, these rags are all part of the Party Orwellians, and each rag will, in their turn, get exposed for what they are.

Friday, December 27, 2013

Middle Eastern Wars

NY Daily: Former Lebanese minister Mohamad Chatah, who opposed Syrian President Bashar al-Assad, was killed Friday in a massive Beirut bomb blast that one of his political allies blamed on Lebanon's Shi'ite Hezbollah militia.
The terrifying moment of the explosion was captured during a live “Future TV” news broadcast.
Well the culprits are almost certainly that opthamalogist and the Hezbulla with the hat.

In the beginning:
I say the Sunni started it, they were the one's who introduced the religion of violence in 700 AD. The Persians adopted a form of the religion, mainly out of fright at those marauding Arabs mohammeds.

I am not saying the Europeans didn't do their part for religious massacres. In the same way that Catholics started the European BS, the Sunni really did it mostly first, in 700 AD. And they have been using the same trick, fooling naive African boys with stories about magical people in heaven, telling them murder and rape are OK, in the name of magical mohhamed.

Nancy Pelosi's racist plot thickens

Feds see surge in children crossing US border amid concerns over immigration policy
Statistics released late last week show 24,668 "unaccompanied alien children" were placed last year in the care of the federal agency that, by law, is responsible for them. That's nearly double the number from 2012, and nearly quadruple the number in years past.
As is often the case with immigration statistics, it's unclear what is driving the increase. The surge could be driven in part by better enforcement, and immigration officers doing a better job catching border crossers.
But critics point to other factors. A federal judge in Texas claimed earlier this month that the Department of Homeland Security has been delivering children smuggled across the U.S.-Mexico border to their illegal immigrant parents. In June 2012, the administration decided to give a reprieve to young illegal immigrants who came to the U.S. as children.
Critics say these policies send a clear message south of the border: The rewards of trying to cross into the U.S. outweigh the risks.
Chris Crane, who heads The National ICE Council immigration officer union, said agents are being "overrun" with children crossing the border.
"We can't keep up with it," he said.
Nancy Pelosi told us straight on TV that the plan was to draw Mexicans into the US and get them to vote Democrat. This is not a secret, it is what the White Supremacist Liberal plans.

Before the 2020 census

NYT:  Beyond a blow to New Yorkers’ collective ego, the changing population pattern could have many practical and political implications, including diminished congressional delegations, a setback New York already suffered in 2010 — the year of the last decennial census count — when the state lost two districts, while Florida gained two seats. Census data also inform how billions of dollars in federal funding and grants are divvied up among the states, for things like highway planning and construction, public aid for housing and health care and education programs.

New York should join the movement to restore democracy to the Senate. The thirty small states that control government, at the moment, will soon fail, and likely agree to expand the Senate. The longer New York fiddles, the less political space they will have concerning how the new 32 Senate seats are to be passed around.

Eric Holder accused of racism

Although there have been several incidents in which it would seem apparent that racial hate was a motivating factor — especially when one considers that other nicknames used to the describe the knockout game are “polar bearing” or “Get the Jew” – an extensive Internet search by this writer failed to turn up a single other incident where the U.S. Department of Justice pursued hate crime charges against anyone allegedly involved in the knockout game. Claims FrontPage

Whoa, that is quite a charge. Out here in California, the White Supremacist Liberals rule, but then we are allowed because we fund the national democratic party. Back east, in DC, I thought racism was no longer the official policy. Didn't the Civil War settle that issue? Now we find the National Democratic Party is back into their standard Jim Crow theology, justice separated by race. 

What does Eric Holder want me to think? Black lawyers are too stupid to understand the law?

Sunbelt and entitlements

Census Bureau expects Florida to surpass New York in population
Demographers expect Florida to replace New York as the third most populous state, separated by as little as a few thousand people. The Census Bureau is expected to release its population estimates Monday, the New York Times reported Friday. California and Texas are expected to hold firm as the No. 1 and No. 2 most populous states, respectively. The census figures indicate foreign-born migrants are moving to warm-weather states, like California, Texas and Florida, and New York is losing roughly 50,000 people each year to Florida, most of them retirees.

Which puts our 60 little Hoover Senators in a pickle. Their states pay into social security but Florida reaps the gains. Is this happening more than necessary? We dunno, looking at the effects of entitlements on demographics is forbidden by the thought police at the New York Times.

Ed Lambert: Capital gains vs operating profits

He notices a relationship between operating profits and corporate savings. When corporations reduce investment in the future and run off of operating profits then we get a contraction.

Here I have unadjusted federal tax income (blue) and federal interest expenses (red). Federal interest expenses have become volatile over time, it becomes hard to keep the budget stable.  Part of interest expense rise  is taxable income variation getting worse at the end of the cycle; and the Fed is generally raising interest rates.

So the Fed is generally pumping, up to a point, making capital appreciation a larger drive of federal taxes than ordinary income, capital appreciation being much more unpredictable. This same action increases the short term debt required by everyone to cover over the year.  The curve flattens as short term borrowing increase and we contract.

Ungreen Bots

Why Driverless Cars Won't Save The Environment

 Business Insider:
In other words, the ease of taking a ride in an automated vehicle could make us much more likely and frequently to jump in the car. “You take the driver out of the loop, and people will be much more willing to sit in their vehicles,” said MacKenzie. He suggested that the first 90 minutes at work is spent mostly answering emails. Why not decide to get a bigger, nicer and cheaper house 90 minutes away from your job, and answer your emails during the commute in your self-driving car? The result: more suburban sprawl and all the environmental damage it represents. Read more: http://readwrite.com/2013/12/26/researchers-say-automated-driving-is-not-green-panacea#awesm=~orceb6yLyc3v1y#ixzz2ogIpWHPh

RoboCars make travel so efficient the economy expands once again to utilize the gains, we get real big growth.

Thursday, December 26, 2013

LA wants water not HSR

Daily Kos: The total cost of the Bay Delta Conservation Plan to build the peripheral tunnels could be as high as $67 billion, according to new figures revealed at a Westlands Water District board meeting last month by a Westlands staff member and a Citigroup bond consultant.
This new figure, with construction bond costs included in the total, counters the claims by Brown administration officials over the past two years that the plan would cost $24.5 billion during its 50-year implementation period.

$60 billion for a train to no-where or $60 billion for water?

No Child Left Behind cancelled

Education Week: More than 40 states and the District of Columbia have waivers [from accountability testing] from the NCLB law, but California isn't one of them.
California will soon get its waiver if the Secretary of Education wants those political payments from the teacher unions.

God makes appearance

There she is, the Godess Almighty
Life News: A woman with the message “I AM GOD” painted on her body jumped up on the altar and screamed in the middle of a Mass on Christmas at Cologne Cathedral, the home of the Roman Catholic Archbishop of Cologne and one of the tallest cathedrals in the world.
She performed immediate miracles for three teenage boys.

Running from the Dim Kim Son

North Korean Officials Flood to China, Possible Mass Defection
[Exclusive] 70 high-ranking North Korean Officials, including Jang’s former aides, fled to China. A senior official related to North Korea’s nuclear arms and slush funds in secret contact with Seoul concerning possible defection List of possible defectors includes former ambassador and high-ranking party and military officials. Jang is reported to have transferred more than ₩70 million to Kim Jong-nam, the elder half brother of Kim Jong-un. A group of about 70 North Koreans-high-ranking party, military officials, and their families-are reported to have fled North Korea into China around the time Jang Song-Taek, former deputy chairman of North Korea’s Military Commission, was executed. Some of the group are known to be in touch with South Korean intelligence while they lie low at a safe place in China and decide whether to defect.
Teeny Weeny dictators with basketball anxiety are not popular.

Bots to hunt Arab Sunni Belt Bombers in Iraq

U.S. Providing Drones and Missiles to Aid Iraq in Terror Fight
The U.S. is providing Iraq with helicopters, missiles and surveillance drones to help the country counter an increase in terrorist bombings, a State Department official said today.
Driving those Sunni Arabs boys back to the farm.

Here come the financial police

WSJ: As Washington’s infamous budget battles and government shutdowns show, resolving the U.S. debt overhang by cutting federal spending and raising taxes is a colossal political task. That’s why, according to Harvard University economist Carmen Reinhart, U.S. officials are resorting to financial regulation and monetary policy as an effective way to pare down the country’s public obligations. “The relatively ‘stealthier’ financial repression tax may be a more politically-palatable alternative,” Mrs. Reinhart said a 2011 paper on how rich countries liquidate their arrears.
Arnold Kling warned that this is the next step.

Obama attempts a military coup

Obama Admin to IDF Generals: Stop Being So Concerned About Israel’s Security
After a prominent retired Israeli general spoke out against IDF withdrawal from the Jordan Valley, Israeli media reported that the Obama administration’s head envoy to the Israeli-Palestinian negotiations, Martin Indyk, convened a meeting of Israeli security officials. He pressured them to drop their objections to the plan and make media appearances in support of it to help sell a skeptical Israeli public on the benefits of a reduction in security.

California's ongoing civil war about education funding

Read Dan Waters full report:
The powerful political forces that have been skirmishing for years over the direction of California’s public schools appear to be headed for a multi-front political and legal war next year.
It pits the education establishment – led and mostly financed by the California Teachers Association – against a loose coalition of civil rights activists and business-backed school reform groups.

Read more here: http://www.sacbee.com/2013/12/20/6015661/dan-walters-powerful-factions.html#storylink=cpy

It has mostly been local vs state control of schools. The war is not ending soon, and the federal government with NCLB makes it worse. Its a divide between parents who know how to make education work and those other parents. Why have a family if you cannot devote your resources to your school; that is the whole point.

We have a visualization of the suspected sucker puncher

A suspected sucker puncher from Brooklyn.  If you know someone who looks like this, call the police immediately, he could be the deranged sucker puncher. The latest report concerns a young mother who was sucker punched.

But wait:
Federal authorities said Thursday they have arrested and charged a Texas man in connection with the “knockout game,” accusing him of a hate crime for targeting a black man for a vicious street attack. washtimes

Now I am confused, those Texans, always going for that racial equality.

Tracking America's colonial territory

Our four large colonies and their unemployment

Here we have the four large states and their unemployment rates. New York and California doing the worst, led by California naturally. Florida and Texas have met their target of 6-6.5%. Screw California and the Fed has it, time to normalize.

Americans going bezerko

E.R. Costs for Mentally Ill Soar, and Hospitals Seek Better Way
Nationally, more than 6.4 million visits to emergency rooms in 2010, or about 5 percent of total visits, involved patients whose primary diagnosis was a mental health condition or substance abuse. That is up 28 percent from just four years earlier, according to the latest figures available from the Agency for Healthcare Research and Quality in Rockville, Md.
By one federal estimate, spending by general hospitals to care for these patients is expected to nearly double to $38.5 billion in 2014, from $20.3 billion in 2003. NYT
That would be baby boomers suffering the after affects of LBJ and the birth of upside downism. Obamacare solves the problem by charging the gen x for their parent's collective mistake. Now boomers get government mental health care.

A Democrat whoops

Washington (CNN) - Democrats have lost their advantage and Republicans now have a slight edge in the battle for control of Congress, according to a new national poll.
A CNN/ORC International survey released Thursday also indicates that President Barack Obama may be dragging down Democratic congressional candidates, and that the 2014 midterm elections are shaping up to be a low-turnout event, with only three in 10 registered voters extremely or very enthusiastic about voting next year.

Two months ago, Democrats held a 50%-42% advantage among registered voters in a generic ballot, which asked respondents to choose between a Democrat or Republican in their congressional district without identifying the candidates. That result came after congressional Republicans appeared to overplay their hand in the bitter fight over the federal government shutdown and the debt ceiling.
But the Democratic lead evaporated, and a CNN poll a month ago indicated the GOP holding a 49%-47% lead. The new survey, conducted in mid-December, indicates Republicans with a 49%-44% edge over the Democrats.

I love round numbers

The ten year treasury yield just touched 3%. Oil is a few pennies shy of $100. Its like watching a pinball machine. Yahoo Finance says:

But if 1996 is any guide, than interest on the national debt will approach 7%, triple the proportion of the national budget, or "What fills the ten percent budget hole that sustains this growth' 

Zero Hedge says this is  an American thing:
S&P 500 earnings are 14% above their 2007 peak while euro-area profits are 53% below their all-time high in March 2008 (of course, this is not firm EBITDA but earnings per share - which is a mirage of low-credit-cost buyback-driven float shrink in some nations of the world... but still)
Are we just in a fracking mania? I don't know, yet.

Oh yes, the other thing about 1996, It had a Clinton and a Benson Treasury and a Brad Delong, budget balancing spear chucker.

Humans rebel against web bots

First up is Larry again, with an article in the NBER talking about robots replacing humans:
I believe in a much more anecdotal way than Dale Jorgenson, who has quantified it to an extraordinary degree, that the defining feature of economic growth in this era is the set of changes that are associated with information technology.
We got stagnititis from the bots.
Brad points us to The Second Machine Age
Now comes the second machine age. Computers and one digital advances are doing for mental power… what the steam engine and its descendants did for muscle power… to blow past previous limitations…. Whether or not the new machine age bends the curve as dramatically as Watt’s steam engine, it is a very big deal indeed…
Now we have Yglesias jumping in with the war between a Google bot and a group of humans called Rap Genius, Yglesias wants to free the bots from corporate control:
 Having a lot of traffic is great. The more the better. But when a huge share of your traffic comes from one particular source, it's really not your traffic. If it's all search, then it's Google's traffic. If it's all Facebook likes, then it's Facebook's traffic. 

I think these folks are jumping ahead to problem set three while we are working on problem set two. So far, the bots have been productive for us, this is not the stagnititis, we still have to deal with the California BlackHole, the biggest issue of the last thirty years. 
About the bots

My opinion has been articulated, bots will always appear slightly more intelligent than the human it talks to. These two articles are an example, the bot tells me that DeLong and Summers communicate behind the scenes, because the bot finds them both, it discovers a semantic similarity between them. My search bot evidently keeps behind the scene links between these humans anti-bots, it snoops on them for me.

Wednesday, December 25, 2013

The Six Californias debate

I have read something like 2,000 comments on Tim Drapers plan to break California into six states. I have some informal statistics.
  • The first group are those who want the political parties to retain control. That is, whatever defects we have in government proportionality can be handled within the parties. 
  • The second group sees the benefits in terms of government efficiency and a better democracy. 
  • There is a third group in New York, who want to do the same there. They get real vocal. 
  •  Then there are the small state commenters, clearly intimidated by losing the excess Senate vote they control. 

Among Californians commenting, about half want to do this or something similar. Most of the alternatives are North and South, two states. But a strong contingent says three states. Then there is a lot of comment about adjusting the boundaries in the Draper proposal. In summary, the initiative is likely to get on the ballot and there will be a big debate out here, in California.

What about Texas?
Few comments came from Texas.  They are in a tight spot because they cannot allow California to outgun them in the Senate, but they want to keep their boundary.  The solution is to bid for their share, 4 new Senators, and elect them at large. Nothing in the constitution disallows that, as long as they have access to a fair state legislature.

My hometown paper calls for Smart Cards

Government needs to mandate chip cards after Target breach Fresno Bee

'Tis the season of goodwill toward all, family meals and traditions, and shopping.
Unfortunately, 'tis also the season of sophisticated criminal rip-offs, like the massive data breach at all 1,797 Target stores in the United States, affecting 40 million credit card users between Nov. 27 and Dec. 15. The thieves got customer names, credit and debit card numbers, as well as card expiration dates and the three-digit security codes.
The rest of the world has migrated to more secure embedded microchip-based cards. The United States should, too.
The Target incident, which hurt business in the crucial shopping weekend before Christmas, should make the change come sooner rather than later. Credit card fraud costs are heading toward the $10 billion mark.
Europe, Asia, Latin America and our neighbors, Canada and Mexico, already have adopted chip cards. They are the international standard for payment cards. More than 1.5 billion chip cards have been issued globally and more than three-quarters of payment terminals outside the United States accept chip cards.

Read more here: http://www.fresnobee.com/2013/12/24/3683621/editorial-government-needs-to.html#storylink=cpy

Great news.

Rosenberg UnSecStags us

We may have suffered the secstags a few years ago, but no more says this Wallstreet trader:
Meanwhile, the nattering nabobs of negativity are dominating the headlines. It’s incredible. I debated Larry Summers in late 2011 over whether the U.S. economy was following Japan, and I was in that camp at that time and Mr. Summers was in the land of green shoots and escape velocity. Business Insider
Says the secstags were mainly about oil and fracking saved us. More likely, we have the SecStags when he is losing money, and we don't have it when he is winning money.

Tuesday, December 24, 2013

White Supremacist Liberals are none too happy with Tim Draper

Tim is the rich investor who is funding the ballot initiative to bring democracy to California, by making  six smaller states. I immediately read the comments in the hours and days after the plan was announced. The California liberal does not want to give Fresno and central California a fair say in DC. Nor is the liberal happy about coming to Fresno and explaining why we are too brown to have a fair Senate vote, and our own governor.

Your typical White Supremacist Liberal
So, here in Fresno we await our affirmative action, one fifth Senator to explain it to us.  Diane, tell us, why are we too devolved to have better representation in Washington DC? Is it because bright thinkers only come from Marin County? Jim Costas, my representative, and the father of Train to Nowhere, is going to explain why Fresno is better off ignorant of the schemes in DC. Just let Diane and the Party handle it, he will say.  After all, it was Diane who figured out how to jigger a train track from here to hullabaloo.

The economic impact:

  • It opens up the pacific rim to greater trade because of the ability of states to independently adapt to export markets.
  • Government efficiency goes way up in DC as voters out here are much closer to the process.
  • We make the Senate a community of like minded Senators.  More of them represent equal sized districts, all Senate planning become efficient.
  • California no longer suffers the massive inefficiency of trying to mesh large state programs with DC programs.

My stab at the gain is about 4 trillion, just for California.  Do this to Florida, New York and Texas, the gain goes up, 8 trillion.  Do this, then take all those central bank assets and trade them for the 40 year bet that this works well. Then, sometime around 60 years from now, do this again.

A whoops for Democrats

Borrowed from Zero Hedge
That would California's own, Nancy Pelosi, taking down the entire national party.

Can we rollover forever?

I have the real growth rate, percent change over the year. I also have the interest payments divided by the debt, giving the interest rate per year. When the blue line is above the red, we are not going to roll over the debt indefinitely.  Delong points to a Laurence Ball, Douglas W. Elmendorf, N. Gregory Mankiw paper from 1995 in which he posits that we can roll over indefinitely if growth exceeds interest payments. Well in 1995 we weren't doing so hot, interest payments exceeding growth by 4 points.  Things have gotten a little better, but DC is still a losing bet. Look at Clinton policy in 1995-2000. We were paying 6% yearly for money, including past debt rollover. Growth was 5%. Anyone who wants to repeat that task with over twice the debt/gdp ratio is going to raise taxes and cut expenses, sorry.

Here I plot the ten year rate (grean) and the aggregate interest rate over the total debt (blue).  The read line id debt to gdp ratio.  Congress generally pays the ten year rate over the total debt. The only way to accommodate 5% growth and pay debt costs is to bet long, very long.  I doubt anyone would believe Congress. The alternative is high, progressive taxes and extreme budget cuts, in other words, retrace the blunders of the past.

This chart is important, it is the interest expense as a percent of federal expenditures. To support a consistent 4% growth rate,  Congress will have to fill a whole of 11% in the budget. (Clinton did the same as you can see). That means taxes or disunion. That hole is equal to 2% of GDP.  Someone's taxes must go up faster than growth, any volunteers?

 The biggest losing president? The most ignorant jackass president who lost money hand over fist? Ronald Reagan, the alzheimer's president.

This economy!!

Stocks up, the ten year approaching 3%, oil near $100. This economy is testing third gear. If the transmission is not working, we are going to stall. Good luck to us.

Zero Hedge says beware the housing bubble

So, lets compare the average new house price and the dollar deflator. Are house prices staying even with a devaluing dollar? No, housing is in the same bubble it was in 2006, well nearly.

Monday, December 23, 2013

The US Constitution and the Six Californias initiative

New States may be admitted by the Congress into this Union; but no new States shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress. Article 4, Sec 3

Congress loves democracy, right? Otherwise California should secede. Hence, I have no doubt Congress will approve.

Still the better idea

This is still the better idea.

Tim Drapper vs the Jim Crow Democrats of California

That is the battle shaping up between Tim Drapper's '12 Senators for California' group and the Undemocrat oligarch.  The central committee of the Undemocrats are definitely against fair voting for Californians. The opposition will be, in order: Nancy Pelosi, Darrell Steinberg, Jerry Brown, John Perez, the two affirmative action One Fifth Senators.

How does Diane debate the issue? She will have to denounce democracy.

Tim Drapper's plan to save America from California

We have the details:
Draper is bootstrapping his own political brainchild. “I will make sure it gets on the ballot, he said. This can cost millions of dollars and there’s no big partners yet on board. But Draper says he’s seen a lot of grassroots interest.
There’s still a lot of process questions that have to be worked out. What happens after it passes? Who’s in charge of creating new governors, redrawing congressional districts, and distributing natural resources? Draper couldn’t answer these in great detail, because they’ll supposedly be answered over the next several months.
When Draper first proposed this idea to me at the Nantucket Project conference, I had my doubts. But, yes, this is in fact happening. Six Californias. Draper expects to hold another press conference when he gets a million signatures.

Here is a real simple idea. Make the ballot simple.  
Ballot statement: California gets 12 Senators.
Forget the details, debate that later.

The Mormons version

Sunday, December 22, 2013

Do not Twist while SecStagging

A banana to Steve Williamson. Kocherlakota, trust your first instinct, and its OK to be L infinity.

Fresno, Ca wants that deal

Are manufacturers being cautious because they fear liability lawsuits? Or is it, as Lawrence suggests due to “the growing gap between what cars can already do, technically, and what is sanctioned by the law”? Last year, Ford demonstrated a self-driving car–in Belgium. Volvo has announced that it will place 100 self-driving cars on the road for experimental purposes–in Sweden. Britain, meanwhile, has offered 10 million pounds to any city willing to become a testing ground for driverless cars by 2017.Anti Planner

With ten days cash in the budget, we are broke. So 10,000 pounds of UK fiat might just do the trick. You can have all of my neighborhood, a complete ten block square area with lots of pizzas to be delivered. Send us your DeliverBot and 10,000 pounds of that fiat.

Bawbwa Wawa is a delusional?

Barbara Walters Discovers That Obama Isn't The Messiah
Said multi-millionaire, literally limousine-liberal Barbara Walters in response to CNN's further left-leaning Piers Morgan's question about why Obama is struggling so much at the moment:
"He made so many promises. We thought he was going to be — I shouldn't say this at Christmas time — but the next Messiah."
Bawbwa was our first and most expensive affirmative action experiment. Now we find out she was mentally ill all that time.

Saturday, December 21, 2013

California is getting 12 Senators?

TechCrunch has learned about noted technology investor Tim Draper’s plan to split California into six separate states, including a Northern California slice appropriately named “Silicon Valley.”
Draper shared his vision with TechCrunch tonight. He says he’s submitting a polished version to the state’s Attorney General in the form of a ballot proposition proposal within the next 48 hours. “Six Californias” already has a campaign website up and is eager for an army of volunteers.

If we do it this way, then Texas will want 8 new Senators and Florida 6. That would be unfair to the Little Hoover states. Let Oregon have the blue section, and take another two senators, but I much prefer a fair share for everyone.

Friday, December 20, 2013

I propose the shoe standard theory of fiat banking

What do we know about the representative consumer? He/she has some cash and is wearing a pair of shoes. No other facts about the consumer are constant across all persons.

So, for the fiat banker, a perfect measure of the consumer propensity to spend is simple, he/she buys a new pair of tennies every six months. Even in San Francisco, where they have naked consumers, they still wear shoes. So when a naked consumer walks into your store for a soda pop, you know that you can price the soda pop in units of tennis shoe, and not confuse the buyer.

The shoe is neutral coinage, everything can be priced in units of shoe. In the environment where the smart card allows multiple types of currencies, each currency can be adjusted to the local price of the average tenny. Thus the store owner prices everything in units of shoe, the smart terminal offer the variety of coinage mutually accepted, units of coinage needed adjusted to represent a pair of size 9 low top jogging shoe.

Tiniest dictator in the world declares fax war

Only Dennis Rodman could have bested such a stunt:
North Korea has threatened to strike South Korea in response to conservatives' anti-Pyongyang rallies here on the second death anniversary of its leader Kim Jong-il earlier this week, a senior military official said Friday.

The North's powerful National Defense Commission on Thursday sent a fax to South Korea's National Security Council through the western coastal military hotline to threaten to strike the South "without notice," the official said.

The latest threat came after several conservative groups and North Korean defectors on Tuesday held rallies in Seoul to protest against North Korea's authoritarian rule and human rights abuse, with some burning Kim Jong-un's photo. CBS

The nutcases in the Fresno, CA city hall

We have a city council that has less than ten days cash in the budget. Yet, we have one city councilman who wants to provide retirement services for every stray dog in town!  The city is too meth addicted to be self-governed, we are like Oakland, not yet evolved enough for self rule.

So, the City Council passes this law that says we cannot have a non-operable car on our property. Just amazing.  My truck, in my driveway, which I seldom use, has a low tire, and the city code police cited me. They are not going to collect either my car, which they threatened to take. So far they have spent at least $200 driving up to my house three different times, taking photos and leaving nasty notes.  I called the lawyers at city hall to find out if they actually had any brains.  They did, and they admitted they were not going to steal my car.  I will fix the flat, and the city will now have nine days of cash on the city budget to provide retirement services for all the dogs in town.

Seriously,  when a town has 10% of its voters brain damaged from meth and another 30% that do not speak the language; the normal procedure is to shut down the government due to incompetence.

Do stock traders obey Schiller's 5% return rule?

No, with a lag of one business cycle, the traders follow the steepness of the treasury curve. Traders have been doing that since 1995.   The main cause is the economy is constrained by the ability of Congress to make interest payments, and the wholly owned fiat business of Congress has been helping out, since 1995.  The market is simply following the maximum gain frontier, which has been bounded by the financial stress of Congress. It is the borrow and bailout binge started by the Republicans, then a confirmed disaster under the Obama Keynesians. 

Thursday, December 19, 2013

Optimal Federal Reserve Policy

Everyone wants to know. So I give the answer.
Assume a reasonably democratic society which owns the hergemon fiat bank.  How much should they take as profit?

I call this the ATM fee that shoppers are willing to pay, how much ATM fee for a $100 withdrawal? I think in this case, via the miracle of imaginary modelling that shoppers will pay and voters should earnh 1.5% of GDP per year in return for their semi-monopoly fiat business. I further claim the Fed cannot do much better than this.  If it is done right, inflation could be kept to zero and the full 1.5% of GDP made available to rural, inbred, yokel Senators, who unfortunately, are not democratic. Hence this model must predicts inefficiencies with  mal-democracy.

And that is a microfounded model!

The pros say we need this chart

The chart tells us that consumers have credit power again, they are taking on some debt, probably buying houses, cars and durables. The key here is how much of a credit cycle they have left. Leverage cycles have grown shorter over time, mainly because of the stagnititis.

Wednesday, December 18, 2013

Did the dead cat fly today?

Stocks took off after the taper came through. Wow, throw all my predictions out the window. My prediction was a smooth correction of twenty percent over two quarters. Growth is still running high, so far austerity seems to be working. Maybe this market can do a random sideways walk for a while. But if that really was a dead cat flying, then long term growth is real, fed or not, we going to third gear. It means the QE causes good is likely untrue, and this puts to death the idea that government multipliers are always greater than one.

Jerry and the Oligarchs are coming to town

Jerry Brown, urged to run for president, won't rule out 2016 bid
If he weren’t the nation’s oldest governor, a ripe 75, Jerry Brown would automatically be counted among serious Democratic candidates for president in 2016. He boasts a household name, an impressive list of accomplishments in the country’s most populous state — a state some once deemed ungovernable — glowing national media coverage and a deep familiarity with the pitfalls and rigors of a White House bid, having run three times before. Now, some are pushing Brown to consider another try for the White House, even if it means taking on Hillary Rodham Clinton, the prohibitive, if still undeclared, Democratic favorite. “I think Jerry is precisely what America needs,” said Rose Ann DeMoro, the leader of a national nurses union and a strong political ally of Brown. “He has the courage of his convictions, which we haven’t seen in a very long while.”

The mastermind of twenty years of floundering budgets, Jim Crowism in government, the poorest state in the union, and the least democratic state; this guy wants to run the US presidency in a far away delusional land called DCville. Dissolution of the Union would be a better result.

I love a good rant

The rich continue to grow richer, and as David McWilliams (of Punk Economics) so eloquently explains in this brief clip, this has pushed the Fed into a corner. As the Federal Reserve gets a new chair and decides what to do next, whether to print $85 billion a month more or not, McWilliams examines the heist that is the new normal financialized economy - who gets all the loot and why today's kidnappers wear Prada. "Wake up," he blasts, explaining the uncomfortable reality of what happens when financial kidnappers dress up as loyal patriots and extort money in the name of the common good.

"Today's ransom is the billions of dollars in the form of QE; today's hostage is the US economy which the kidnappers threaten to kill by a collapse in asset prices if they don't get more and more free money... and who is paying the ransom... it is the Federal Reserve...

The message from Wall Street - the kidnapper - is: if you don't give us what we want, we will killl the economy."Zero Hedge

Economists have discovered that QE has very perverse and ill effects on the economy. Not too surprising. The question now is whether the fed is doing this to bailout Congress, or if the fed is simply bozo all by itself. Our economic thought leaders are hot on the trail.

Republican welfare bums

Sunday, December 15, 2013

Larry Summers under assault by the thought police?

"Today, secular stagnation should be viewed as a contingency to be insured against – not a fate to which we ought to be resigned," he writes.

What happened? One month we have the stagnititis and now we are cured? I think the party thought police had a talk with the man. But its too late, for we now have some plausible evidence that QE causes deflation and increases inequality. So we are gonna get more thought police.

Who are the thought police protecting? The two big Democratic states, New York. Both are begging for goodies from DC. Problem is, the two big Democratic states are likely causing the stagnititis.

Is this the Prince that bombed us on 911?

MONACO — An influential Saudi prince blasted the Obama administration on Sunday for indecision and a loss of credibility with allies in the Middle East, saying that American efforts to secure a peace deal between Israelis and Palestinians would founder without a clear commitment from President Obama. “We’ve seen several red lines put forward by the president, which went along and became pinkish as time grew, and eventually ended up completely white,” said Prince Turki al-Faisal, the former intelligence chief of Saudi Arabia. “When that kind of assurance comes from a leader of a country like the United States, we expect him to stand by it.” He added, “There is an issue of confidence.” NYT

Foreign policy is confusing. Friends of the Bush family attack us on 911 then claim they were just kidding!

World's tiniest dictator begins acting career with Dennis Rodman

Help McDonald's with the simple stuff

McDonald’s New App Is a Glorified Coupon
The chain announced in September that some restaurants in Salt Lake City and Austin were experimenting with a mobile-payment app. But this is a more difficult transition than persuading younger customers to accept digital coupons. “Everyone across industries is trying to figure out what the mobile thing is and how we’re going to approach it,” says but Marcos Sanchez, a spokesman for app-tracking firm App Annie. “Figuring out mobile payment is not easy. You need to integrate it into your point-of-sale system.” If the app also allows customers to order for pickup, that’s another change in restaurant operations for businesses designed to deal with walk-in or drive-thru customers.

Hey, moronic bankers. What they want is the universal smart card that can handle the whole variety of digital transactions. McDonald's can combine their own money with coupons. Now is the time, where is my Fidelity Unicard?

Islamic Monkeys in Space

Iran hails voyage of Fargam the space monkey
Iran said on Saturday that it had safely returned a monkey to Earth after blasting it into space in the second such launch this year in its controversial ballistic programme. President Hassan Rouhani congratulated the scientists involved in the mission, in a message carried by the official IRNA news agency. The report added that the rocket reached a height of 120 kilometres (75 miles).

They are going to make a TV series, the lives and adventures of monkey astronauts.

Country yokel Senators hold out for budget goodies

Budget deal still short of votes to pass Senate: Durbin
WASHINGTON (Reuters) - Senate Democrats are still short of the votes needed to pass a budget deal that would avoid a government shutdown in January and blunt automatic spending cuts, Senator Dick Durbin, the chamber's No. 2 Democrat, said on Sunday. "The struggle is still on in the United States Senate. We will need about eight Republicans to come our way. I feel we'll have a good strong showing from the Democratic side, but we need bipartisan support to pass it," Durbin, of Illinois, said on the CBS "Face the Nation" program.

When the Hoover Senators are in control, bribes work best. Try to keep the bribes under $20 billion, please.

Lockyer: John Perez is a dunce

Lockyer: school pension plan implodes without fixce
LOS ANGELES -- California Treasurer Bill Lockyer is warning that the state teacher retirement system is rapidly running out of money. Lockyer predicts the plan that pays benefits to retired public school educators won't exist in 30 years unless it's fixed. The Ventura County Star reported (http://bit.ly/18MC0Wm ) Saturday that Lockyer says a budget expert recommends that the state kick in another $500 million of taxpayer dollars to the teacher fund for each of several years to cut its unfunded liability. He says if nothing is done the California State Teachers' Retirement System "implodes" in 30 years. The newspaper said his remarks were made in a speech in Ventura County Thursday.

Yet in the article by Dan Walters we find John Perez, the speaker of the California House is completely ignorant of the problem. Well Lockyer is not to be trusted, he was the idiot that proposed California IOUs as California official money. But Perez is definitely on the very stupid side. Nothing is real in California, its all fake in the government, mainly because Guv Brown has abolished clear thinking, no longer allowed.

California White Supremacist Liberals are idiots

As the number of homeless people in Los Angeles County continues to rise, the City Council is weighing a ban on feeding homeless people in public areas.
City Council members Tom LaBonge and Mitch O’Farrell, both Democrats, introduced the resolution after complaints from Los Angeles residents. Arguing that meal lines should be moved indoors, the legislators said the proposal would benefit both the homeless and residential neighborhoods. MSNBC

Jerry Brown has all but admitted that California's liberal establishment wants to gather the nations poor in California. That policy was officially supported by the same dumbshot city council people in this story from LA. I cannot believe all California politicians are as stupid as John Perez.

Saudi Arabia attacked us on 9 11

Says the NY Post. The claim includes the charge that the Bush kid covered up the problem, yet confirming once again that three generations of Bush traitors have been trading with the enemy.

If we are stupid enough to elect traitors to DC, then maybe its time to dissolve the union.

John Perez, the third most evil politician in California history

Dan Walters:
Assembly Speaker John A. Pérez summoned reporters to the Capitol last week to unveil what he called a “blueprint for a responsible budget.” Pérez stressed his intent to create a reserve against future economic downturns and while the outline included billions of dollars in additional spending, mostly on education, health and welfare services, he didn’t let that word cross his lips, instead calling it “investment.” When Pérez had finished his presentation, reporters asked questions, and one of them was whether his concept included any money to ease ever-increasing deficits in the teacher retirement system and mounting obligations for retiree health care. These are no small matters. The California State Teachers’ Retirement System (CalSTRS) told Gov. Jerry Brown and legislators months ago that it needs another $4.5 billion a year from someone – the state, school districts or teachers – to avoid insolvency in future years. And the CalSTRS deficit is growing by millions of dollars each day. Meanwhile, it’s estimated that the deficit to cover health care promises to retired state employees is approaching $50 billion and also continuing to grow. And what was Pérez’s response? Just short of silence. He muttered something about having a discussion about the issues sometime in the future, but that was it. Putting $4.5 billion more a year into teachers’ retirements and setting aside a prudent amount to cover health care would more than erase the $5.6 billion surplus that Legislative Analyst Mac Taylor has projected for the 2014-15 fiscal year, leaving nothing for the new spending that Pérez envisions. That arithmetic fact, therefore, tells us that the Pérez plan is anything but responsible.

Why does California get stuck with bonehead politicians?

Who exactly does Putin intend to nuke?

Meanwhile, Russia Casually Announces It Will Use Nukes If Attacked
This article implies Putin intended to nuke Ukrainian protesters.

Russia Stations Tactical, Nuclear-Capable Missiles Along Polish Border
Now we find out he really intended to nuke the Poles. Putin needs a geography lesson or a shrink. But wait, now we find out the problem:
(Reuters) - President Vladimir Putin conceded for the first time on Thursday that Russia's economic problems were home-grown and vowed not to abandon the spending promises he made on returning to the Kremlin last year. Facing an audience of lawmakers, officials and business leaders, Putin also said "nothing has been done" to implement an initiative he launched a year ago to stem capital flight that has sapped both investment and the Kremlin's coffers. Reuters

Russia intends to nuke Goldman Sachs! He should just go have sex with a bear and forget about it.

Friday, December 13, 2013

Teeny Weeny Dim Kim Son: Tiniest dicator in the world

Execution Raises Doubts About Kim’s Grip on North Korea
SEOUL, South Korea — Perhaps one of the most intriguing details in North Korea’s announcement of the execution of Jang Song-thaek, the uncle and presumed mentor of the leader Kim Jong-un, was what its state-run news media reported that Mr. Jang said while confessing to plotting to overthrow Mr. Kim’s government.

The Teeny Weeny Kim is on Meth, someone got him started, he can't quit.

Free, free at last

Robots Have Taken Over the Internet
More than 60 percent of all Internet traffic now comes from bots, according to a new study.
The study, published earlier this week by the web security firm Incapsula, found that online traffic from bots in 2013  — automated softwarethat include everything from hacking tools to spammers to search engine catalogers — is up 21 percent from 2012, when 51 percent of website visits already came from bots. Thirty-one percent of bots are malicious, according to the study, but spam bots decreased from two percent of traffic last year to half-a-percent in 2013.
The report includes evidence of more sophisticated hacker activity, including an eight percent increase in so-called “Other Impersonators,” hostile bots that attempt to impersonate benign bots and tend to be specifically crafted for a particular malicious activity.

Well, welcome to earth web bots.

Thursday, December 12, 2013

Leaving digital cash on the kitchen counter

The children have to pay schools fees. They have smart cards, just leave 50 digital dollars on the kitchen table. How? The point of sale device, in its simplest form is a standalone card reader calculator, and not much more. Cost? 20 dollars. Battery operated, just leave the thing in the kitchen. Dad can swipe in the bucks before work, then the kids can swipe it out later.

Government regulation and the Universal Smart Card

Government really cannot impose sweeping regulations on the universal smart card standard, that becomes a blanket burden in free exchange. Within the smart card are a variety of crypto and digital authorizations, not all of them qualify as money in the tax sense. Some smart cards carry around cryptos based on the SP500, but not accepted for consumer exchange.  The only efficient approach to regulation is to define the tax crypto, the crypto dollar that is accepted by the federal government for tax and payment. The CryptoCollar has restrictions, such as a password required for purchases over $100. Purchases over $1500 are cleared online immediately with a federal reserve bank, and so on and so on. The CryptoDollar trades with other cryptos at the broker level, it defines the tax schedule for the economy, in the aggregate.

Government becomes a more efficient hegemon, really, but it loses a large piece of seigniorage because the smart card includes competing units of account. The Fed utimately accepts the concept of a CryptoDollar, for efficiency purposes. But it is all relative to an across the board gain in currency efficiency, the smart card is just irresistible from that stand point.

Wednesday, December 11, 2013

Interest bearing crypto currencies

Fidelity and Vanguard take cash and invest in the yield curve.  In exchange for cash, investors get crypto shares of the fund, crypto money that is redeemed as a percentage of an invested fund.

The Smart Card recognizes these digital coins, and the shokeeper must decide if he wants the price in one of the following: Interest bearing investment coins, Bitcoins, dollar debit, or dollar credit, or WalMart coupons. That is a lot of currencies! Seems complicated? No, the shopkeeper accepts the Fidelity coins because he is smart and knows the fund and knows the Fidelity coins are traded on the mareket. So, the shopkeeper sells the gallon of milk and in return gets fully invested, inheriting the interest bearing coin. Ultimately the Fidelity coins get redeemed at Fidelity for, what? Interesting question, because their greatest utility is being interest bearing crypto fiat. The only real trade is with other interest bearing crypto currencies on the market.

Crypto Coins backed equity brokers are a bit volatile, and are not going to be popular at the market. Then, who knows because the shopkeepers crypto register is itself a perfectly intelligent web bot, let it decide. Equity backed cryptos will be very popular as integral to the stock market. We can envision crypto currencies built around an index, then we have direct trades across indicies by trading coins. But the crypto currencies offer a way out of high speed trading, they are easily managed in web bots.

So, wow! That is some economy. Sounds like great fun, what comes next? The  robotic delivery technology becomes valuable. Any product anywhere any time via efficient robotics. Its because the central banker bots can compute inventory stabilization in real time with the digital data.

The SmartCard and WalMart crypto currency

When we all have our smart cards, WalMart can run its own crypto currency.  We can buy WalMartCoins at the store, or sometimes banks sell them; placed right in the Smart Card. Useable only in WalMart Stores, but great discounts.  Home Depot return credits could be placed right back into your SmartCard using HomeDepot Coins. We get an active on line market, trading WalMart for HomeDepot.  Sounds like fun, actually. Hey Fidelity, where is my UniCard? Seriously, why is this not big business, and why isn't WalMart and Home Depot pushing the idea, a universal smart card protocol, handles a variety of digital transactions in a variety of different digital currencies. No one would leave home without one!

The Universal Smart Card

One that handles all point of sale transactions, Bitcoin, Food Stamps, debit, credit, JPMCoin.  Use the universal digital smart card technology to enable the whole bunch, all at once. Zero Hedge spotted this:
Fidelity now allows clients to put bitcoins in IRAs
Fidelity has partnered with SecondMarket’s Bitcoin Investment Trust to allow its clients to save for their retirement by putting the virtual currency in self-directed IRAs.
The bet here is that crypto currencies have a place. The way to win the bet is for Fidelity to propose an enhancement to the current debit card standard, upgrade our point of sale technology for smart catds. Everybody wins, pareto efficient.

Make the card a little more counterfeit proof, keep the magnetic stripe and the raised lettering.  Add the chip, replaceable. Insert the little silicon chip, define a short, 1 inch distance, wireless technology. What are the proposals out there? Let's hear some ideas.

So, Fidelity, go get an OEM agreement purchasepoint of sale technology, go sell the idea to shopkeepers, go dominate that market, I dare you. We can call it the Fidelity UniCard; universal demand, a new business, upgrade all the old point of sale equiplment with newer, cheaper, smarter versions.

Let's help Francis Fufuyama with a long division problem

The Decay of American Political Institutions
M any political institutions in the United States are decaying. This is not the same thing as the broader phenomenon of societal or civilization decline, which has become a highly politicized topic in the discourse about America. Political decay in this instance simply means that a specific political process—sometimes an individual government agency—has become dysfunctional. This is the result of intellectual rigidity and the growing power of entrenched political actors that prevent reform and rebalancing.

Anyway, the long useless article never once mentions a test of democracy. Yet it mentions democracy about 20 times, half the time referring the the USA as a democracy with no test or validity.

Francis, here is a test. Divide the number of congressional districts by the number of Senate seats which represent them. Francis, accomplishing this homework, will discover a democracy skew of about 20 fold. Further he will find the skew in democracy, in the Senate, has doubled since 1980. Then he will discover we have a state vector, the path from Fresno,CA to DC is not the same path from Salem, Oregon to DC. He will be forced to treat government as a value added network, then he will get interesting results.

Ah, if we could just take our social scientists into the third grade, just for a bit.

Tuesday, December 10, 2013

My definition of digital currency

It is a coin, made of encryption bits. Central payment clearing is optional. 

The serial numbers of every digital coin and the digital wallet it came from are known only to the digital wallets exchanging the digital coin. It is up to the payees to voluntarily aggregate payments and look for fraud. It is up to them to insure digital wallets have a physical counterpart that it difficult to counterfeit, like smart card that are tamper proof.

So when a shopkeeper accepts a MasterCharge digital payment, he is looking over the card construction, then collecting wallet id and coin ids. He may check personal ID.  Beyond that, he can spend the stuff without ever checking with MasterCharge. But the shopkeeper has some prior agreement with MasterCharge to clear accounts. Or his deposit bank may require clearing accounts, mainly for fraud detections, are their duplicate bitcoin IDs out there.

 I think Bitcoin keeps the chain of transactions between account clearings. That way they can ultimately reconstruct the accounts  and discover any cheats. They have to do that because the ultimate central banker is a web bot without a second job. But JP Morgan could skip even that step assuming the smart cards were very counterfeit proof. When the frauds are discovered, they split the difference with an insurance payment, and one of the duplicates deleted.

So in the libertarian version, if I risk it, I can collect digital coin payments in my digital wallet and never report my wealth, for decades! The only way to find my wealth would be to interrogate a large number of payer wallets, and get a representative sample. In a cokmpletely libertarian version of digital coin, the system need only know the wallets are valid,  but they remain anonymous.

Two fiats, dollars and food stamps

Are they, in fact, the same fiat?  Food stamps only work for food stores, however, if the main constituent user of food stamps shops for food, in  the same proportion as do  dollar food shoppers. Then in the context of the food sector, the two are equivalent at the register.

If I take food stamps just outside the store they suffer a huge discount in the trade for dollars.  The food stamp yield curve is steeper than the dollar yield curve in the middle. The discount is due to different bandwidths of the dollar holder and stamp holder. The stamp holder cannot refill until next month, the dollar holder can refill on a weekly basis, and thus dollar holders have a liquidity advantage in the trade.

What is a food stamp fiat bond? It is the food stamp budget item in DC, seen as a paper asset (a fiat with in large denomination). The budget item has stable returns measured over five year periods because the Senate gets hammered if the flow is volatile. Hence, the food stamp fiat bond trades equitably with the interest expense budget item, the fiats are on par at G.

So, when the complete 'yield' curves of both papers are compared, they differ in the monthly middle, but typically  remain proportional over periods longer than five years. They co-integrate reasonably well, mathematicians would say.

But, the difference matters in terms of grocery store efficiency, as any small grocer will tell you. For some reason, the food stamp cycles appear monthly, and small grocers will deliberately stock up with an extra monthly cycle.  This is because toward the end of the month, stamps have less discount compared to dollars, they will be refilled soon. The cycle cost cannot be dismissed by using random due dates on the food stamp cards. When the stamps come in aperiodically, the grocer needs just a bit more excess inventory, over all. The grocer fed balances the food fed and the dollar fed; and has to cover increased inventory expense.
How to the fiat discounts compare over the month? 

If stamps are in a surplus, relative to the holders portfolio, and about to be refilled, the holder has more options. If he is minimizing transactions, he will make the largest transaction he can, trading stamps for a dollar denomination that covers him until the middle of the month, he can even promise to deliver some stamps after the transaction. With this norm, the system ends up with a cross denominational fiat set, a virtual  currency, whose denominations have a monthly transaction size, so the balance trader can trade once a month to offset the cycle.

If he is minimizing volatility, then a range of virtual fiat cross denominations are used, the trend in exchange rates looks like a smooth random walk, and the continuous approximation is appropriate, which is great news for computation. But it is the former norm that is valid; the tendency of grocery deliveries is to actually create container sizes to match, hence the losses.

Wait, you say, there is not enough stamps to dollars trade to cover the spread, the induced cycle.  Yes, but there is some grey trade, sufficient to determine the discount, and there is trading food stamps for expenses in shared housing, and there is usually a secondary income so some work to leisure trade. But, likely there is not enough stamps to dollars trade to cover the spread, and the grocer food deliveries adjust to cover the residual.

So, we can expense out any contradictions. 
The net cost is mostly in the adjustments needed for grocery delivery. a more robust delivery system than needed otherwise. The cost is apparent in the difference in yield curves between stamps and dollars. If the net result, an expansion of the food network is good, then the dollar fiat does a lousy job. Except the dollar fiat is a monopoly of government.