Tuesday, June 30, 2015

The Fed has already raised the effective fund rate

From .08 to .12 using the old fashioned reverse repurchase.
Bond guru Bill Gross believes the Federal Reserve will raise interest rates once this year, but only because it needs to prove that it can.


Mark Perry's favorite industry

Platts: - ... [US oil producers] have wrung astonishing efficiencies from their operations in a very short period of time, as the number of days to drill a well keeps contracting while initial well production rates and estimated hydrocarbon recoveries expand.

Also, corporate efficiencies, coupled with cost concessions of around 15%-25% granted by oil services and equipment providers this year, have also lowered well costs and driven up internal return rates in the best plays to the point that operators appear comfortable with the current price environment, even if they privately hope for an eventual return to $80/b oil.

Sunday, June 28, 2015

Is reverse repurchase working?

Reverse repurchase was the gimmick the Fed invented to get the non-member banks access to the Fed deposit rate. The total deposit balance is blue and exceeds the loans to DC, the loan to deposit rate now .85. The blue line is a cycle mainly because the Fed is closing has created a loop, hopefully that goes away. The new deposits only earn .12 compared to the existing member deposits earning .25. If you consider the remits back to Treasury as a tax on the bond market then we have an effective tax cut. I looked at the Treasury yields from Bloomberg and the one year bond is now .29, higher than the deposit rate. The ten year is about 2.48. The curve has flattened. Interesting times ahead.

Saturday, June 27, 2015

The middle class loves the new supplemental currencies

Wallet specific rewards, call them points, or simply bit money. Business Insider has the scoop.

We can figure out how long the Fed reserves will last

We can use out Poisson assumption and get a good idea. First we construct out two period model.

Deposits^2-Loans^2 = Liquidity

Now liquidity is going to be low, by law the Fed is not allowed to be a central banker.  But let's set liquidity to 1.0, as if the Fed is perfectly adapted to the Shannon condition.  That chat on the left is loans/deposits, tanh.  We will find the probability distribution of liquidity on the right side of the equation. It will be a distribution named Skellam, and wiki has it here. Skellam is constructed from the two parameters, Cosh^2 and sinh^2, so lets find out what Cosh and Sinh might be when tanh is near one. But one catch, we have not included the reverse repurchase deposits.  But I have looked and I can say that adding them in makes tanh near .98. That makes Cosh^2 about 25, and sinh ^2 about 25.

The Skellam distribution says the mean to variance is going to be 1/(25+24) os about 1/49. What that means is that the Fed has to go through 49 variations of deposit combinations otherwise called Fed press conferences. That would be 2^49, or some 10000 trillion months assuming the member banks alter their portfolio once per month. Mathematicians will give a better answer from the moment generating function which tells us the time, or number of transactions to expect.

Why don't I use log(50,2) and get the number of bits? Because the bankers have to build the encode and decode tree, they have to count all the combinations first.  Mathematicians will correct me, but I think I am close. In this case we have 30 member banks.

But wait, you say, wasn't the tanh  above 1, up to 1.15 during 2012? You bet, and when the Fed does that is it fermion statistics, we use coth, 1/tanh.  During those periods money is sucked from tax payers and handed over to wealthy people.

Can the economy wait 900 trillion years? No, the boneheads in DC will fly the helicopter, as in Nixon Shock.  The super wealthy have their baskets ready, they will know where the money lands.  Hence the urgency of getting banker bot into the pocket of every middle class person in North America.

Friday, June 26, 2015

Finged print authentication on smart cards is available

Swipe your finger across the smart card and you will be authenticated by finger print.  So this part is done. But I would also require your face be printed on the card also.

So, the security protocol to protect our smart cards is coming together just fine.

Obamacare costs were 43% of personal spending this month

Here are the consumer healthcare payments, mostly Obamacare, in precentage from the previous period. They are taken from the BEA consumption and outlays, here. The total amount of consumer spending growth was 1.43, and so we can see that 43% of that was Obamacare, less than last month but still high as we can see.


0.40 0.30 0.48 –0.16 0.45 0.52 0.88 0.62

A new suplemental currency in action

Business Insider: The prevalence of video-on-demand is causing box office profits to decrease, especially in North America. One company is giving consumers an incentive to keep going to the multiplex.

MoviePass is a subscription service that, for a $30 to $35 monthly fee, offers unlimited trips to the movie theater. We took it for a test drive and found that the service makes a lot of economic sense for people who venture to the theater frequently enough to cover the subscription cost.

Pay attention WalMart. Movie Pass closes a loop that regular dollars cannot close. Now movies theaters, movie producers and theater goers have captured their shared information and saved a consumer product.

Jerry Brown and the cover up

Jerry has decided to hide the rate increases on Obamacare, which means they are likely greater than 50%.  This is Jerry planning to do the California spiral.
CalWatch: But California Insurance Commissioner Dave Jones dismissed that claim. In an interview with State of Reform, Jones characterized California’s health insurance providers as a virtual monopoly, “attributable in part to decisions made by Covered California and unchecked rate increases as top issues.”
Inside and outside the exchange, he said, “you have an extraordinary concentration of the market going to a handful of carriers. As a result, they function in a classical economic sense as monopolists or oligopolists who are able to dictate prices for what is an essential good that people desperately need and are willing to pay just about anything to get.”
Jones has raised hackles among Democrats for challenging Covered California’s effectiveness and propriety. But activists further to his left have created bigger headaches. Not all consumer groups have been kind to Covered California executives. In a letter to Lee, Santa Monica-based Consumer Watchdog demanded that Covered California release its planned rate increases for next year. California “has successfully lobbied the federal government to delay public disclosure of qualified health plan rate change proposals for 2016,” the organization noted, becoming the only state in the nation to do so.
“Citizens of every other state now have access to proposed rate hikes, except the people of California, who are already disadvantaged by the absence of rate regulation in this state,” the letter warned.

Abenomics worked? Horse manure

Here it is, Japan's growth rate over the years, hovering around zero and the latest reading is 1%.  You cannot even see Abenomics in this picture!

How about the inflation rate?
Abe managed to fuck up the pricing mechanism, naturally, one of the stupidest ideas economists have ever tried. All that jerking around on prices makes the economy inefficient.

How about unemployment?

Down, below their typical 4%. A half point below, barely any effect. So all this horseshit means Japanese have to work harder to pay for the ignorance of economists. Notice they have to work when pricing is all fouled up.



Who is to blame? Badly educated economists of the Kanosian, Lafferonian  and Monotonarian variety.

Thursday, June 25, 2015

Economist using the theory of everything

On Reaching for Yield and the Coexistence of Bubbles and Negative Bubbles

We develop a model of financial intermediation characterized by an inside agency problem such that managers "reach for yield" by overinvesting in risky assets and concurrently underinvesting in safer assets when they have access to high enough liquidity. The investment preferences of managers follow a certain pecking order whereby their first preference is to invest in risky assets; their second preference is to hoard on to liquid assets (i.e. cash and cash equivalents) so as to provide a buffer against runs; and their last preference is to invest in medium-risk assets. The reaching-for-yield behavior of managers is conducive to the formation of bubbles in the market for risky assets and concurrently "negative bubbles" in the market for safer (i.e. medium-risk) assets. We show that loose monetary policy reduces the cost of covering any liquidity shortfalls suffered by the intermediary which induces further "reaching for yield" culminating in the coexistence of bubbles and negative bubbles in risky and safer assets respectively.

This is the classic Peter Keevash problem.  Investors try to match cash on hand against assets that might drop in price. The investors have borrowed against the assets and when asset prices drop the asset is underwater.  Where does Peter Keevash come in?  The investor notices that some small set of assets go underwater together more than once. They then drop the group size by combining elements of their portfolio, and that is a contraction. So what is the solution? For a big bank, hire Peter Keevash.

Why is Peter Keevash my new hero? He does not use the contrivance of information theory, he can work directly with queuing theory and finite systems.

Walmart! Charges yes, dollars no


Wal-Mart to impose charges on suppliers as its costs mount

Wal-Mart Stores will begin charging fees to almost all vendors for stocking their items in new stores and for warehousing inventory, raising pressure on suppliers as the world’s largest retailer battles higher costs from wage hikes. 

Make them pay in Walmart dollars. The cost of circulating WalMart value points around the loop is nearly zero. The dollar cost to travel that loop is about 2%.  Get it! Banker Bot is free, it comsumes a nicklel of electricity a year. It is passed easily from bot to bot, all automatic. Walmart runs the value point savings and loan business.

I know you folks are excited about  banker bot, and you plan miracles with WalMart Value points.  Well here is your first miracle, use WalMart value points to lower the accounting cost from supplier to shopper. Your inventory volatility drops way down, you come out a big winner, you are super secure.  Go  talk to George Selgin, I think he is the CEO of Banker Bot company.  He has this whole thing nailed, he is the go to guy.

We need Peter Keevash in our banker bot company

He will tell us how many stores we can visit before we end up going to the same three stores on any given shopping trip.  When we make duplicates, our banker bot will adjust savings and loans in our various currencies to maximize the gain and minimize the cost. Peter will make life pleasant for a billion folks like you and me.

Peter looks geeky, the VC firms will love the guy. Maybe we can get this guy to e mail our favorite CEO, George Selgin. Hey, Peter, shout out, the venture firms want you on our favorite bot company, and as a founder you will get the best deal available.

But, seriously, it is absolutely essential that we have a brand new team in charge of giving every human being a banker bot in their pocket. CardLogix knows this, and all the existing Silicon Valley firms know that my team will win this game, we got the goods and we know how to protect the SmartCard holder. And we have no grab bag of useless gadgets we are trying to protect. My team has only you, the middle class person, in mind.

I know Silicon Valley. Apple will screw this up. What the bankers want is this team, Peter, Mitilde, Dannica and George.  I know this technology and I will find a great bitcoin group software out there, give me a few days.  40 million of us middle class will jump on this technology, in our SmartCards. I know security, and this is nearly lock proof.  This team I selected will outperform any other team on the globe. Put 20 million into this team, together they are worth hundreds of millions.

Tuesday, June 23, 2015

Brad DeLong, the Boom and Bust is in California

Why Small Booms Can Cause Big Busts

That would be Brad DeLong, supposed expert on political economy. He lives in the spiral state od California, as clearly explained by jerry Brown who pays Brad's salary. Yet Brad still has no clue.


Brad, look at California unemployment.  The unemployment rate in California spans the complete business cycle this time around, and now its upticking.  Yet Brad thinks there is some Magic Walrus in the Swampland that is supposed to stop the California spiral.  No, the spiral is mandated by laws, laws which Brad mostly likely voted for.  Why does Jerry keep supporting that horse pit of an economics department?

The Trump Comb Over

Scary looking.

Yes dear, the GSEs are a nightmare

Kanosians, like Barry Ritholtz, peddle Horse Manure. The Government Sponsored Enterprises are a disaster. Guaranteed to Fail:

On September 30, 1999, a New York Times reporter, Steven Holmes published a piece titled “Fannie Mae Eases Credit to Aid Mortgage Lending ”. The crux of the story was that Fannie Mae was lowering its credit standards, which in turn would increase home ownership. Franklin Raines, the then Chief Executive Officer (CEO) of Fannie Mae, is quoted in the article: “ Fannie Mae has expanded home owne rship for millions of families in the 1990's by reducing down payment requirements. Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so - called subprime market.'' Consistent with sound journalism, the story analyzed the potential consequences of Fannie Mae’s foray into riskier lending. Quite presciently, the author Steven Holmes sounded an alarm that Fannie Mae was taking on l arge amounts of new risk, which in good times would not cause problems, but in a downturn could lead to a massive government bailout. The article also quotes Peter Wallison, an American Enterprise Institute scholar and frequent critic of the government - spo nsored enterprises (GSEs), in particular, the two largest ones, Fannie Mae and Freddie Mac: “From the perspective of many people, including me, this is another thrift industry growing up around us...If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

Even George Bush knew:
2001

    April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."  (2002 Budget Analytic Perspectives, pg. 142)

2002

    May: The Office of Management and Budget (OMB) calls for the disclosure and corporate governance principles contained in the President's 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac.  (OMB Prompt Letter to OFHEO, 5/29/02)

2003

    February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market.


    September: Then-Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.


    September: Then-House Financial Services Committee Ranking Member Barney Frank (D-MA) strongly disagrees with the Administration's assessment, saying "these two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis … The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."  (Stephen Labaton, "New Agency Proposed To Oversee Freddie Mac And Fannie Mae," The New York Times, 9/11/03) 


    October: Senator Thomas Carper (D-DE) refuses to acknowledge any necessity for GSE reforms, saying "if it ain't broke, don't fix it."  (Sen. Carper, Hearing of Senate Committee on Banking, Housing, and Urban Affairs, 10/16/03)


    November: Then-Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk."  To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE."  (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

2004

    February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital and calls for creation of a new, world-class regulator:  "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore … should be replaced with a new strengthened regulator."  (2005 Budget Analytic Perspectives, pg. 83)


    February: Then-CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted."  Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator."  (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)


    April: Rep. Frank ignores the warnings, accusing the Administration of creating an "artificial issue."  At a speech to the Mortgage Bankers Association conference, Rep. Frank said "people tend to pay their mortgages.  I don't think we are in any remote danger here.  This focus on receivership, I think, is intended to create fears that aren't there."  ("Frank: GSE Failure A Phony Issue," American Banker, 4/21/04)


    June: Then-Treasury Deputy Secretary Samuel Bodman spotlights the risk posed by the GSEs and calls for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system.  Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs:  Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System."  (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

2005

    April: Then-Secretary Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America … Half-measures will only exacerbate the risks to our financial system."  (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)


    July: Then-Minority Leader Harry Reid rejects legislation reforming GSEs, "while I favor improving oversight by our federal housing regulators to ensure safety and soundness, we cannot pass legislation that could limit Americans from owning homes and potentially harm our economy in the process." ("Dems Rip New Fannie Mae Regulatory Measure," United Press International, 7/28/05)

Monday, June 22, 2015

Use queuing rates to solve the 150 year old mystery

Science magazine: If you have n schoolgirls, can you create groups of size k such that each smaller set of size t appears in just one of the larger groups? Such an arrangement is called an (n, k, t) design.
Let's forget about N, the number of school girls. Instead lets construct a queueing system that generates groups of size k in which no set of size t appear more than onece. How do we do that?

I have my machine on the left. The machine makes groups from the first k elements in the input queue. The input queue is formed from the original group of school girls selecting one at a time, but that selection is interleaved with school girls selected from groups already composed. But from the already composed group, I only grab them at a rate 1/t , in sequence as in first out revolves back into the queue. This rate divisor implies that school girls  becoming part of their second group will be split by t members, and when making their third group will be split by t^2 members, and so on. So as each school girls get revolved its rate divisor insures no duplicate t sets.



I continue this process until I have a selection of school girls in the bottom queue who have gone through the revolving queue some 1+1/t+1/t^2+1/t^3... and the total number of trips through the revolving queue equals the group size. I need enough of these selection such that they add up to a whole number..

Why does this not work?
From the article, Keevash established an answer:
In January 2014, Keevash established that, apart from a few exceptions, designs will always exist if the divisibility requirements are satisfied.

He is talking about a divisibility requirement of the three parameters, (N,g,t). But isn't that all I do up in my machine? Haven't I just established a divisibility requirement in the three variables?

Hyperbolics
We can see that cosh and sing right away:
cosh = 1/2 * t^[k/2] ( 1+ t^-k), and similar for sign. t^[k/2] are the number of groups we can make.

Saturday, June 20, 2015

Spinning is popular

I was reading Dannica again and her model of spinning tops that follow a graph. So how did the spin model become popular?  It is an inferred kinetic motion, spin by definition is not directly observable.  Mass has spin, there is light propagation. The problem is there is twice as much non-light that is not propagating, cold positions I call them. Not enough exchanges to release light, a little black hole.  That spot is the spike at the fermi level in fermi statistics. There is no empty space, it may be that God pulled a fast one. We cannot exist without fermi statistics. So the bubbles of the universe have no option, they must be self compressed. Causility dictates the whole thing.

The magnetic field is simply a standard mechanism for back flow so the elasticity matches the  equipartition bisection.  Supper cool the atoms and the fermion statistics drop to its fermi level, no? Also if we dump empty space then we are locally combinatorial. The Second law, it seems, needs one unit of adaptation variance to maintain the entropy state, and needs more than one to continually remove redundancy. Thus causality maintained.

Where I want to go on statistics

Tanh'' and Coth'' have the forms: Tanh/[2*(S^2+1)] and Coth/[2*(C^2-1)], if I have that rightwards.  These are the forms of fermion and boson statistics. But the Cosh and Sinh have a phase shift in the exponent, caused by the adaptation variance being greater or lessor than one. The adaptation variance is like chemical potential, think elasticity of exchanges. Minimum redundancy gets us relative exchange rate and that determines the equipartition bisection point for set recombinatorics. I think there is a discrete Poisson distribution, bound at either end. A tall order, and some mathematician is getting a Swedish Banana and huge quantities.

Chain of reasoning
T*T' is simply a term appearing in the probability distribution of a ratio.  T goes to one, T' is the incremental space needed for the probable T.

The form of T'' results because we impose the hyperbolic condition on the original variables. So this is just a condition that allows Feymans as an operator. So the hyperbolic condition defines the adapted state, the Gibbs state. No, I just checked, the Gibbs state assumes a fixed container, it has only one set of statistics. We should define this the Higgs entropy state and confuse everyone.

Except, the distributions are not infinite divisible. Two distributions on energy force or power actually, the fermion and boson.

Friday, June 19, 2015

150 million new Medical customers

The California Senate’s Appropriations Committee passed SB 4 to give health care to all illegal/undocumented  aliens. Breitbart News estimates that based on the non-partisan Legislative Analyst’s Office projections, SB 4 will cost at least $1 billion, and the cost will undoubtedly go much higher over time.

With the state’s fiscal year winding down through June 30th, Sacramento politicians are furiously competing to spend a piece of the state’s $3 billion in “surplus” cash.
Folks not familiar with California?  A couple of facts.

1) To qualify as a legal illegal alien requires a mailing address.
2) Just conservatively that must be 150 million people.

So, California's floundering legislature needs to explain where the profit is, otherwise it is bankruptcy time, many, many laid off public sector workers.  I guess the other question is why our experts in political economy up in Berkeley missed this whole episode? We are not asking them to turn the legislature into economists, god forbid; but how about helping them with a little arithmetic and logic.

Inundated with Greek letters

 The Poisson distribution has Euler's number in it, its doing symbolic multiply. That should be a 16th order polynomial, and lamba should be a rational fraction. It causes problems when do the probability of L1-L2, the difference of two queues, one in and one out. That distribution likely is polynomial, but I have done no work on it. Anyway, the Newtons version of that distribution is this:
This is one of those spots where some theory seems to be missing. This distribution on the left has a Bessel function, the integral of a sine and other stuff.  But it should all come down to a power series, or a power series of a compact polynomial.

Makes me a bit stuck, and seeing as how lazy I am; being stuck is compound.  This is where professional mathematicians get huge quantities and rewards.

Wednesday, June 17, 2015

Betting the recession rules and conjecturing on primes

Here we have a plot of good coincident recession indicators. We want to bet these two. Start by betting just one, build a runtime probability, balanced graph of the numbers, in sequence with a window set by user.  Then map that tree into tanh'', and that gives you the pay off when the next number comes in above precision. Once you have a balanced graph, then it can map into a constrained flow model, dual queueing models.


This is TOE at its best, take any logistic graph, balance it with delivery rates, map it to tanh'' and generate the yield curve, the inventory borrowing rates.  This is like, nirvana to an economist, this is the calculus of double entry accounting, the holy grail.

So make the probability graph of the prime numbers. Out to some finite prime. Balance it as best as possible. Then hyperbolics tells you the relative queue sizes for each prime, the number of dance partners needed to multiply with this prime.  It is really log entropy of that prime. No???

Where is Matilde Marcolli when you need her. I hope she ran away and joined a banker bot start up.

Monday, June 15, 2015

Correcting a math error

I said the tanh = (sqrt(2/3) was the top of the tanh'' curve, it is not. The correct number was tanh=(sqrt(1/3).

But the other condition was interesting because sqrt(3)+sqrt(2) is within .002 of Pi.

WSJ is just silly

WSJ: The U.S. economy’s first-quarter contraction could look less grim thanks to new data showing stronger-than-expected revenues at doctors’ offices.
Eight of 12 broad categories of service-providing businesses saw annual revenue growth decelerate or drop outright in the first quarter compared with the final three months of 2014, the Commerce Department said Wednesday in its Quarterly Services Survey. However, year-over-year revenue growth accelerated in one of the largest sectors, health care and social assistance.
The evidence of stronger-than-expected spending on health-care services led several private economists to upgrade their estimates for gross domestic product, the broadest measure of goods and services produced across the U.S. economy.

OK, so the US specialty is medicine, then why is the demand for medical specialties so high?  If this was our money maker, then it should be easy to hire workers, but it ain't.   This is a constrain on the economy at the moment, and that means something, likely exports or durables, is going to get a downward, backward revision.

Sunday, June 14, 2015

How to end recessions forever

Defeat the government bean counters who draw grey bars in our Fred  charts.

Can we do it?

I think we can break even. They have a finite set of rules based on a regular data stream. All we have to do is sty within the rule envelope, we require it be concave, (so we know up from down). Banker bot just sets up a betting tree for each of the rules. Insider betting is accepted, just obey the rules. Over time, the economy would assume the no recession entropy state and we win. Having smart cards with banker bots means we have 40 million no arbitrage betters. The payouts from the betting tree will always compensate for non-adiabatic change, hence never a recession.

CardLogix has a clue

A full development environment for the card chip.

Who is in charge of qualifying software, and the card should not be alterable after they are personalized.  Where is it that we can put our pics on the card?



So, the team I picked should meet up with some CardLogis developers. But they do that standard languages, so why wait. If you are a software geek, I would be harassing the team I chose. If I was a CardLogix executive I would be harassing the venture community to fund the team I chose. The team I chose would make this all work.

Fun with hyperbolics

I always assumed the peak of tanh'', taken positive, was at log(phi^(3/2)), I never checked. Then one day I did tanh'''=0, low and behold, what is the hyperbolic condition at that point? 3-2=1, I kid you not. Tanh = sqrt(2/3), a familiar ratio.  This is just set combinatorics, and hyperbolics do sets really nicely.

Saturday, June 13, 2015

Horse manure from the Bank of England

Money creation in the modern economy

In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

Nope, cannot work this way as principle is returned with interest.  Ultimately this approach creates deflation, as in the USA and UK today.

Money in the USA is created via helicopter drop about every 40 years, out last drop was the Nixon Shock.

Cards with hardware, coming

US banks are putting the chip inside the credit card, then mandating its use..  Good enough, we can fit banker bot in that chip.   So, let me repeat,  the team I propose can manage this and make it fair bot and make us all pareto.

Las nuevas tarjetas de crédito tendrán dhips. Todo el mundo necesita un bot banquero en ese chip, llame a su banco y exigir bot banquero.

Here is the VP marketing. She's not that good looking, the pic is airbrushed. But she is one hellava mathematician, we will be reading more of her collgeg paper. Remember, she gets Gibb's She made us go clicking around and find out about lattices that have special pass keys, and spinning tops pirouetting about, like workmen on a skyscraper frame.

But she is the VP of marketing, and a great author of other books.. She will get us smart cards with out pics on them, the bot will manage all sorts of sequences and trade with other secure bots. relevant bots.  Every person in the world will need one.

We need the Alternative Money group, Selgin and company. He is great for the job and has the best sense of humor, better than Mish.  The venture community knows this is a big deal, and this is the team, take 30 million and go buy them, you will gain a huge reward.

Liquidity with an index and queues as sets

OK, we have the hyperbolic condition mapped into a queueing problem.  Everyone enters the ball room and dances with one  or more folks. Then they leave. Entering and leaving independent, and at equilibrium they ae at equilibrium with Poisson mean = variance. So we can define deviation, C and S, such that:
c(x)^2 = S(x)^2 = L(k)

I gave liquidity, the number of dance partners, an index, different from x. This sounds like fun. I will quantize x to integer quantum number. I am going to let  The value, L(k)_ is allowed to go below zero, when that happens we get fermions!, the dance floor has a partial set  for parties doing the three person waltz. Queues as sets! Sounds like a blast. I can make linear combinations of queues.

And one of my favorite mathematicians.

Friday, June 12, 2015

How do I know the Fed is not our central banker?

This chart reveals the dirty secret.  How did the excess reserves match the reserve portfolio of treasuries so well? This is an accurate double entry accounting in the Fed balance sheet. And iot obeys the constrained flow conditions, so someone did a BlackScholes. But it wasn't Bernanke because he pre-announced his purchases (red line). The excess reserves (blue line) was always adjusted after some time to re-align with the portfolio. The adjustment was done using the ten year yield.

Once you understand what happened then you have the aha moment,  Goldman Sachs or JP Morgan is our new central banker. Dunno exactly which one, but they share their banker bot with their partners, (read member banks). The Fed actually got fired somewhere in 1988, or a bit earlier, likely when Greenspan took over. The Fed has actually never set the interest rate since Volcker left, the data shows that. The one year treasury is the benchmark, and it is being set somewhere in some urine infested back alley in New York City.

What are the other options here?

Treasury could have adjusted its debt sales to make the reserves match portfolios. Or, the Theory of Everything, which says that some people, conscious or unconscious always runs a generalized Black Scholes in aggregate adapted statistics. In other words, this match had to happen to keep the ruler straight, otherwise we would have second dipped; (and we almost did).

Jerry Brown's statement, two posts below brings up a point

If the likely path toward a global depression is California's Clueless Floundering legislature, then why isn't the Berkeley political economy department not educating these folks? Why is it that numbskull like Robert Reich cannot even see what friggen economy pays his wages. All those bozos at Berkeley think the only solution is some Magic Walrus in some backwater swamp 3,000 miles to the east. I keep wondering why they leave Jerry all alone to sweat this stuff when in fact Jerry needs to shut that department down completely.

Hemos elegido una legislatura inútil, estúpida en California. A menos que tengamos estos frutos secos educados que están a punto de lanzar el globo entero en una depresión.

A simple view of hyperbolics as a dual queueing problem

I was looking at yet another economist problem, hiring workers who later leave. What is the best way to model this.

An input queue and an output queue.
The firm has a queue of workers leaving and people entering. Thwe firm has a rule, there should be one more person in the input queue than the output queue, that way it never has a shortage. It can change the arrival rate in and out by raising or lowering wages.
What is the equilibrium? Poisson queue where mean equals variance. so, using deviation, I (inout) and O (output), we get:
I^2-O^2 = 1
And waddya know, the hyperbolic condition. I and O are functions of wages paid. This conserves labor and so works in finite systems.
If you want some slack, let the input queue grow and the constant on the right become larger than one, more liquidity.
Labor is conserved, the condition meets not just the envelope theorm but meets Ito's calculus, so the economist can compute the probability distribution of labor over firms. This also connects wages across firms because at equilibrium the input and output rates will segregate the variances up to the optimum overlap. determined by the selected precision of the overall labor market.
It is time for the economist to move on to complete, Ito compatible, likelihood macro models. Leave time out of the system, use relative rates. Find equilibrium, then go and time the hiring process with some real firms and you can add time back in.

Thursday, June 11, 2015

Jerry Brown ultimately is an honest man

Business Insider: California was America’s Greece in 2009. It had excellent wine and olive oil. But tax revenues were collapsing. The deficit ballooned. Its credit rating was cut to the lowest of any state in the US. It couldn’t borrow at reasonable rates. And when, under Gov. Arnold Schwarzenegger, it couldn’t pay its bills with real money, it sent fancy-looking IOUs to its suppliers.
Today, California is flush with money. The economy in the coastal areas has bounced back. Unemployment, while still high in some areas, continues to drop. The budget is on its second annual “surplus” in a row. Capital gains taxes from the booming tech sector, the soaring stock market, the white-hot property sector, and all kinds of other investment activities, on top of some “temporary” tax increases, triggered a flood of revenues – $6.7 billion more than Brown’s office had estimated just in January.
OK, no one can figure out how to deal with the unfunded pension and healthcare liabilities. But what the heck, lawmakers at the Democratic stronghold are now fighting over how to spend the “surplus.” They’ve got till June 15 to figure it out and pass a budget or their pay will be docked.
Gov. Jerry Brown, sworn in for his fourth and final term in January – he’d served two terms in the 1970s – is putting his stamp of frugality on the budget, trying to stem the flood of spending proposals. But lawmakers need to be reelected, votes need to be bought, special interests need to be satisfied, and so the money needs to flow.
Brown’s budget – up 6% from the current year – directs most of the “surplus,” as required by law, toward schools and a newfangled rainy-day fund. It’s also used to pay down the “wall of debt,” as he’d called it, that governments have built up over the years with deficit spending. Standard & Poor’s is watching. It currently rates California’s general obligation bonds A+. If the lawmakers don’t go overboard, it might upgrade the state back to where it was 14 years ago.
Home prices are soaring and in a number of cities have gone far beyond the peak of the prior housing bubble. Stocks are soaring. The tech boom is in full swing. Startups with multi-billion-dollar valuations and vertigo-inducing cash-burn rates are proliferating. Silicon Valley is once again changing the world for the better.
“And by the way, we don’t really compete with Texas and New York,” Gov. Brown said in a speech at the CalChamber on May 29, in reference to California’s status as the seventh largest economy in the world. “No, we’re competing with the UK and Germany. And we are ahead of India, Russia, Italy, and Brazil.” Exuberance is back.

ut Brown has seen this movie before a few times. It always ends in tears. Boom and bust. Now is the boom. He told his audience at the CalChamber that in good times, as the rainy-day fund builds up, “everybody forgets the recession, and they want to start spending. And right in the middle of all that, we get a crash.” “If we have a modest recession – not if, when we have a recession, if it’s modest – the California state budget will lose $40 billion over three to three-and-a-half years,” he added. But by next summer, the rainy-day fund would only contain up to $4.2 billion, according to legislative analysts.
In Sacramento two days earlier, he said: “The longer you’re away from a recession, the less you remember it, and all you see is money coming in. Usually at the point when the recession is right around the corner and people are feeling the best ever and they want to just spend, we crash.”
“I love all those programs I veto,” Brown explained, “because I don’t want to cut them back when we hit the next recession.”
It’s not a recession per se that will bleed California finances, but declining asset prices. The piles of money being shuffled around in the stock market that has been soaring for six years, in the housing market that has been soaring for over three years, in the office boom, and in the startup scene eventually become taxable events. The manna of the Facebook IPO in 2012 was of such magnitude that legislative analysts included estimates of it in their projections.
But most people in California are struggling with high costs of living and so-so incomes on their labor. Only a very small number of people get a significant portion of their income from investments – namely the “1%.” And so it’s no surprise, given this skewed wealth distribution, that the top 1% of Californians pays about half of the state’s income taxes. And when the stock market drops, when housing and office booms leak hot air, or when the whole startup mania reverts back to the mean, income tax revenues collapse.
This is what happened in 2008. The housing bubble imploded. The stock market collapsed. Tech cratered again. Stock options became worthless. Layoffs cascaded through the economy. And tax revenues simply dried up. That’s how it happens every time. And every time, it’s a “surprise”
But we don’t have anything to worry about. “We are in a much better position today to deal with that economic downturn whenever it occurs than we have been in the recent past,” H.D. Palmer, a spokesman for Brown’s Department of Finance, told the L.A. Times. That’s what they say every time. But Gov. Brown, who has seen these things unfold so many times before, seems to be warning about a crash in asset prices that could be uncomfortably near.

Wednesday, June 10, 2015

Hospital hiring goes vertical

From this report we find a vertical demand for health care professionals.  Wage growth is already 2.3% while the economy is growing at 0%. Who is paying this? Obamacare premiums have been the fastest growing consumer purchase for the last quarter.


The LA Times is showing a double digit growth in private hospital emergency room usage.

How does it end? This looks like a recession next quarter. The only thing left in the economy was housing and autos. But housing lost some wind with a half point jump in mortgages to 4.2%.  Cars were supposed to carry us forward, but not likely. Consumers will hold off on the car another quarter until they catch up.

Its not just Obamacare, Medicare is doing its own surge.


So, tell me, how come Kanosians did not see this coming?


Tuesday, June 9, 2015

Fixing my yield curve math

I put up a graph of the second derivative of the yield curve under the assumption that the two period model holds, and I had error. This version seems better, I adjust the term period rates, they have to be expressed in the period of the loan, not year over year. So I still adjust this idea. The short term is on the right, long term to the left; a tanh X axis. The peak is at the ten year spot, which is correct, that is the knee of the real curve, so that is the spot with the most second derivative.

Paul Volcker wanrs: Crooks in California politics

Mish points us to a report called Truth and Integrity in State government.  The group is headed by Volker and some other honest pundits. Making a long story short, the California legislature is as corrupt as they come, a nightmare.  This is a real warning, California will easily crash the US economy, they usually do. 

La corrupción, una pesadilla. No es liberal o conservadora, es la corrupción de California, puro y simple. La legislatura de California está a punto de provocar una recesión.



Alejo debe haber conseguido un gran soborno

CalWatch: Redevelopment agencies would once again have the power to seize private property for big developers under a bill that passed the California State Assembly earlier this month.
Assembly Bill 2, authored by Assemblyman Luis Alejo, D-Salinas, would give local governments the power to create new entities that would have the same legal authority as redevelopment agencies. These new Community Revitalization Investment Authorities would have the power to issue bonds, award sweetheart deals to businesses and “acquire and transfer property subject to eminent domain,” according to the legislative analysis of the bill.
Property rights advocates warn that the bill’s language contains no restrictions on eminent domain and could resurrect the abuses made possible by the Supreme Court’s controversial Kelo decision.
Why do we need official bribery back on the table. We have enough problems with the pension stuffing fraud.

Luis Alejo quiere traer de vuelta el soborno y el fraude. Se permitirá que las agencias de desarrollo priovate para aprovechar cabo casas, con un soborno adecuada a los funcionarios locales.

Global warming taxes spent on more global warming

What we have is absolute fraud by jerry Brown and the Floundering California legislature. Californian's ignorant environmental political groups are equally complicit.
Sac Bee: Gov. Jerry Brown and legislative leaders have agreed to set aside a dispute over cap-and-trade revenue until after adopting the state’s annual spending plan, eliminating a point of contention in budget talks 10 days before the deadline for its approval.
H.D. Palmer, spokesman for Brown’s Department of Finance, said in an email Friday that Brown, Senate President Pro Tem Kevin de León and Assembly Speaker Toni Atkins agreed to pick up negotiations surrounding cap-and-trade – money polluters pay to offset carbon emissions – “outside of the budget process.”
While removing a hurdle for the budget’s passage, cap-and-trade remains a sticking point for Brown and legislative Democrats.
Senate leaders have proposed a spending plan that exceeds Brown’s proposal by about $500 million, mostly for greenhouse gas reducing programs benefiting disadvantaged communities, according to a report by the nonpartisan Legislative Analyst’s Office.
The cap-and-trade debate does not affect the largest portion of the fund – 60 percent, or $1.2 billion, continuously appropriated for high-speed rail, transit and other programs agreed to last year.
Palmer said removing cap-and-trade from the budget talks would “ensure that there’s ample time to put in place a thoughtful expenditure plan.”
High speed rail, a proven global warmer worse than cars, as is the San Jose Light rail and other transit projects.
How much more global warming does transit cause?
This study from UCLA says a fully operational light rail costs $10 per seat -hour, the cost of moving one seat per one hour, even if the seat is not occupied! If the average trip is 20 miles in one hour and 50% capacity that comes to about $20/trip, of the equivalent of five gallons of gas per 20 miles. That is total costs. Even if we cut the MPG on a car by half to cover capital costs, we still get the typical light rail is at least a third as inefficient as the typical car.

Read more here: http://www.sacbee.com/news/politics-government/capitol-alert/article23239488.html?utm_source=dlvr.it&utm_medium=twitter#storylink=cpy

Are the DC poliicians still binge spending

Government expenditures.  Binge spending not as bad as lil Bush, but still enough to keep growth low for a long time.

Sunday, June 7, 2015

California's gonna need more global warming taxes

CalWatch: Despite a sounder economic footing, California’s pensions problem has deepened. That was the conclusion drawn by analysts who warned that new accounting rules would shine a startling spotlight on practices long kept in the shadows.
“The Governmental Accounting Standards Board is implementing new rules that require governments, for the first time, to report unfunded pension liabilities on their 2015 balance sheets,” Lawrence McQuillan noted at the Sacramento Bee. “Overall from 2008 through 2012, California local governments’ pension spending increased 17 percent while tax revenue grew only 4 percent.”
Note, even though pensions earned nearly 10% YoY on the market, governments could not keep up. Now the market is neutral, pension funds are reporting 1-2% YoY gains. Meanwhile the economy is not at 1.8% GDP growth, not 2.3.  So that 17/4 ratio will go to 23/3; the denominator and numerator both change.

Are the taxpayers on the hook when their elected officials cheat?
Critics have pointed to evidence of a pattern of conduct in masking pension costs. As Steven Greenhut has observed, a grand jury investigation into Marin County pension practices produced a recently issued report with damning details:
“The county’s governments increased pension benefits 38 times between 2001 and 2006. Each time, agencies were supposed to provide public notice about the proposed changes, obtain actuarial reports detailing the future costs of the benefit hikes, and detail the degree to which the increases will affect the funds’ financial conditions.”
Instead, officials “violated these requirements in a variety of ways — providing little, if any, notice to the citizens of Marin County that they would be responsible in the future for hundreds of millions of dollars in pension costs,” the report concluded.
So the NASB accounting board is bring new rules that make it difficult for Matir County's crooked politicians.  We have had the same problem under Grey Davis, pension stuffing  in county government.

Saturday, June 6, 2015

Scot Sumner find poorly decomposed data

He is looking at reviews from a new book about social mobility. Evidently the book talks about why some children do not move up from poverty. One of the book reviews posted this bubble chart. It shows your chance of being rich if you were poor before, and visa versa. The numbers in the bubble gives you the probability you stay where you are.

Scott notices the mobility in the middle quintiles, the rows at the 2nd, 3rd and 4th quintiles show a lot of mobility. If you were rich or poor, you are likely to end up in the middle. Why is that? Its the middle class. Most activity takes place in the middle class, that is where the economy is most divergent and has the most second derivative; the most spare liquidity compared to the economic activities at that level.  In other words, the economy is optimized around the middle class.

This is poor decomposition because the quintiles are linear and not weighted by total volatility. At least two of the quintiles need to be combined, they are equally significant. The real social mobility issue is mainly about the dirt poor and the filthy rich.   But over all, I agree with Scott, this does not show much immobility over a few generations, but a few generations is a long time, a hundred years of more.

The second derivative makes us wide band, so our lives are not volatile, we have options. The poor and filthy rich will be volatile, more signifant. The middle three are important, but not as significant toward the outcome. The second derivatives are the partial transactions, any element a and b do not make a probability in one step, they queue up.  Set combinatorics are paced.

Banker bot and the venture capital companies

They really have no choice, they have to invest in the team I propose.  I have this nailed, and if this team gets together, then they are the money, they are the trusted group to manage the money machine.  Everyone gets a copy of the money machine. That means the stock of the team I propose is going to be money. And the other way around, the team I choose has some duty, because they are essentially releasing self replicating AI into the financial community. That I chose them, having nailed the issue, means they have a duty.

Google and Apple flubbed this

They tried to do the synergy thing with their handheld gadgets, their product is spoiled.  This is not something done by the goofy techs in Silicon Valley, we do this with the pros, this is a standardization issue on a technology far more important then Silicon Valley cardboard cutouts. You want this team, the one I named.  I am the best spotter you have, and until all 40 million of this market has a banker bot in their pocket, they are not safe.

Friday, June 5, 2015

Danica McKellar does graphs

We began our reading of Danica's paper and concluded that Danica was sending four tops spinning down Gibb's mountain, and they had to find a path through without bumping into a bad spin, a spin the tips you of the right path. Let's continue our story.
We begin with a description of a general Ashkin–Teller model on an arbitrary graph with spins at each vertex. There are four possible spin types, labelled: blue, red C , yellow, and red − . The spins may be regarded as lying equidistant on the unit circle, occurring clockwise in the order just named, with blue at 12 o’clock. There is complete symmetry around the circle, so that interactions receive energy assignments based solely on the relative positions of the spin colours on the circle. Here the model is ‘completely’ ferromagnetic: colours opposite to each other receive the highest energy assignments; the like–like interactions the lowest, and the adjacent colours receive an intermediate energy. Without loss of generality, we may set this intermediate energy level D 0. For positive K h i;j i , k h i;j i , we set the like–like interaction between sites i and j along the edge h i;j iD k h i;j i − K h i;j i , and the interaction for spin pairs with colours opposite to each other to k h i;j i . Although the Z 2 Ashkin–Teller model in our theorem has uniform couplings (and at most one edge between any two sites), some of our proofs will use the flexibility of multiple edges between sites and nonuniform coupling constants. In this paper, we confine attention to the parameter region k h i;j i 6 K h i;j i = 2 for all h i;j i .

Clicking through we get:

The Ising model (/ˈsɪŋ/; German: [ˈiːzɪŋ]), named after the physicist Ernst Ising, is a mathematical model of ferromagnetism in statistical mechanics. The model consists of discrete variables that represent magnetic dipole moments of atomic spins that can be in one of two states (+1 or −1). The spins are arranged in a graph, usually a lattice, allowing each spin to interact with its neighbors. The model allows the identification of phase transitions, as a simplified model of reality. The two-dimensional square-lattice Ising model is one of the simplest statistical models to show a phase transition.[1]

So here we are, Danica is teaching us about restricting sets to certain properties, type them. And we are going to use a graph, we are going to make a graph representation of the belief function of a top going down Gibb's mountain.  The graph will say, "Hmm, go left here with a .75 probability.!".  How did these tops ever figure this out?

Danica you are my pick to be VP Marketing for the banker bot company.  The issue here is who can we trust to get banker bot safely into our pocket. 

My pick for CEO is still George Selgin, and he can bring his VP of engineering. That leaves our number one recruit, we want Matilde Marcolli, and her graduate students. This is the win-win team, Card Logix would be putty with these guys in charge of depolyment. All of the bankers, immediately on board. This is Google squared, I know this business.

Can I get these folks excited about this? Hmmm...

How much second derivative does the yield curve have?

Three month bills are on the right end, this is the Tanh X axis.  I take 1+r and 1-r from the curve, and compute hyperbolic angle.  Then I go to the constrained flow conditions. The sum total of second derivative here is .55, that is, the economy has a bit more liquidity than one.   The thirty year is farthest to the left, count from there.


That second D is the Shannon clock. The total of second D is 1.0. We always need a half of one to avoid the dreaded spiral. Now Shannon tells us that if we get our stuff encoded, we can do a lot with that bit of liquidity. 

What did we do with our .45 of second D? We likely nudged the huge states, frankly.  The big four states are a big fermion in our economy.

Banker bot software structure

What is the software? It manages a probability tree, like a Huffman encoder, or the way Bitcoin manages a prime number tree. Lets see, here is some code like stuff:

int Liquidity(node,sample) {

if(node == 0)
L = result(node,sample)
else
L = Liquidity(node.right,sample) +  Liquidity(node.left,sample)
return(L)


And result does either the Huffman count and rebalance, or ditto with second derivative, tanh for banker bot.  Or the prime thing with bitcoin.  It just crawls the tree and keeps it balanced by probability of occurance, up to some precision.

So, missing details there, but this post is about the whole picture.  Banker bot does this for many trees, a tree per currency. And banker bot bets the trees against each other.  The currencies are price ratios incoming from some sequential set of prices. The prices coming to smart card are really purchases or sales, of numbers from the trees.  The different currencies are typed by some national credit card association. Exchanges, sender and receiver, are qualified as specified by the exchange type..

All currencies can be money, exchanged on the spot without central supervision, and exchanged many times before reporting anything to a central clearing house.  Unless, that is, the currency or merchandise seller, specifies a more complete clearance. The key here, everything is locked inside the card, and your private key, public key are locked in their, its sealed. Your picture is on the thing, and bot can send a probability map of your face that makes you recognizable by any banker bot anywhere. Bot can keep a probability map of you fingerprint.

It is tamper proof, takes prices and maps them to the probability tree, That is all the real banker needs, it is like a spreadsheet function, really not much more.Everything is a probability tree.



Central Banke regime change, every generation does it

Secular stagnation: The time for one-armed policy is over

Stagnation is gripping several of the world’s largest economies and many view this as secular, not transient. This column argues that many economies need both demand-side stimulus and supply-side reform to close the output gap and restore potential-output growth. A combined monetary-fiscal stimulus – i.e. helicopter money – is needed to close the output gap, and this should be accompanied with extensive debt restructuring, policies to halt rising inequality, and additional public infrastructure investment.

We have done this five time in US history, countless times in Europe and China.  What we have is standard procedure for central banking. It will happen, and unless we adjust technology, these bozos will drop the dough-re-mi on the wealthy. 

Millenniums get you smart card, now.

Millenniums, you have to push for the Smart Card technology now, before the drop.  The only thing that will save you is a counterfeit proof banker bot in your pocket. The banker bot will optimally shift you deposits and credit among the various currencies and maintain a guard barrier around your account at all times.

Thursday, June 4, 2015

The sets of compressible elements

Look at:
(1+x^n)^2 - (1-x^-n)^2 = L

The terms on the left, what are they? Two things, a compact representation of the probability tree, and two bubbles, one slightly compressed and one slightly expanded. They are set up to maintain the equipartition by the constrained flow balance.

So the flow condition implies a fractal knowledge of the graph that is maintained by exchanges. The indices,n, are the number of compressible modes available to the set of bubble.  But set theory is maintained as long as the compression of the queues follows the compressed mode.  This is the key in going from probability of picking a graph to probability of passing a node on a graph. its is the key element in the toe when the information contrivance is removed.  We need the set theory for this.

Echanges are 'paced' to maintain set types.  The pacing is done by the second derivative of Tanh and Coth, these are partial elements. They pace the balance equation between two surfaces, and that makes sequential causal, we get space and time; and we get sequence spectrums.

The software model of toe

Computers are serial, so the software has an algorithm that traverses the probability graph and adjusts the queues at each node. It will rework the branches, exchange up and down links as required.

In nature there are a multitude of the graph bots, and the issue is how are the 'second derivative' queues maintained in a free collection of things. But the traversing bot model should work anyway, as long as the causality sequence is maintained.

Let's read Danica's college paper

My other hero mathematician, Danica McKellar, co authored this paper:

Perculation and Gibbs states

Abstract. For a region of the nearest-neighbour ferromagnetic Ashkin–Teller spin systems on Z^2 , we characterize the existence of multiple Gibbs states via percolation. In particular, there are multiple Gibbs states if and only if there exists percolation of any of the spin types (i.e. the magnetized states are characterized by percolation of the dominant species). This result was previously known only for the Potts models on Z^2

What's a Gibbs state?
Wiki knows all: In probability theory and statistical mechanics, a Gibbs state is an equilibrium probability distribution which remains invariant under future evolution of the system. For example, a stationary or steady-state distribution of a Markov chain, such as that achieved by running a Markov chain Monte Carlo iteration for a sufficiently long time, is a Gibbs state.

My hero Danica McKellar, thinks everything has a banker bot maintaining a probability graph so the equipartition is maintained and we can use set which will appear, just not now.  By the way, have we seen William Gibbs recently?


Here is is, the spitting image of Sigmund Freud.  I guess we have to call him one of the inventors of the theory of everything. He has a kind of quantum set theory.

So Danica knows percolation theory, which fundamentally, tells us how many shapes of the probability graph we can have. A perculation is an open path to the top of the tree. Danic plays the Wythoff game.



So, here,
She and Matilde Marcolli should be great friends, one would think. Both are authors and mathematicians who get the toe. They must have met at some book fair somewhere. They both know about the other, I am sure. 

Danica tells us:

We begin with a description of a general Ashkin–Teller model on an arbitrary graph with spins at each vertex. There are four possible spin types, labelled: blue, red C , yellow, and red − . The spins may be regarded as lying equidistant on the unit circle, occurring clockwise in the order just named, with blue at 12 o’clock. There is complete symmetry around the circle, so that interactions receive energy assignments based solely on the relative positions of the spin colours on the circle. Here the model is ‘completely’ ferromagnetic: colours opposite to each other receive the highest energy assignments; the like–like interactions the lowest, and the adjacent colours receive an intermediate energy. Without loss of generality, we may set this intermediate energy level D 0. For positive K h i;j i , k h i;j i , we set the like–like interaction between sites i and j along the edge h i;j iD k h i;j i − K h i;j i , and the interaction for spin pairs with colours opposite to each other to k h i;j i . Although the Z 2 Ashkin–Teller model in our theorem has uniform couplings (and at most one edge between any two sites), some of our proofs will use the flexibility of multiple edges between sites and nonuniform coupling constants. In this paper, we confine attention to the parameter region k h i;j i 6 K h i;j i = 2 for all h i;j i .

Sounds like spinning tops on a circle!  How did they get there?  She proves equipartition, she proves the existence of a quantum set model the guarantees enough queue to cover the the descent of four tops from Gibbs mountain.  The tops can wait in the queue for paths with finite capacity. 

I should help Danica write a book! She is my first or second hero. Is my selection biased?

Sets that do not commute

Back to a specific theory of sets, a theory that conforms to the flow constrained conditions. I looked at set typing, noted the 'queue' is not a complete set, it does not obey the omega algebra rules.

What about the set of things that are cold position, which I define to mean that there is no Wythoff move that improves its 'second derivative'.  These sets are combined with, so they do not commute.

Anyway, still thinking this out. Remember the goal, remove the contrivance of information theory in the toe. We want the set theory of quantum entanglement. So my bet is that whoever invented the overlapping bubbles gets the banana. I just invented the bubble, I stole the overlap idea.

Credit history and money

Economists make theories of credit and money, how the money base changes with credit.  That is a wrong theory, the true money base is proportional to credit history, the second derivative.  As long as the credit history is getting better, free and unencumbered money will expand. Ultimately the utility cost of money becomes the cost of maintaining credit history.

Smart cards change all that because smart cards have a no arbitrage banker bot inside. For the smart card holder, that means the second derivative of the loan/deposit ratio of the smart card always meets the constrained flow condition. This holds for any currency the holder may be using, as long as the currency has a visible no arbitrage yield curve. The cost of doing this function is the one time payment for a smart card plus the cost of a watch battery every year. Banker bot is free.   The smart card is counterfeit proof, it has your picture inside and out so it can't really be fooled.

Thuis, Smart card makes the utility cost of money a uniform constant across all wealth class. All transaction pay the constant fee regardless of transaction size. The no arbitrage baker bot system has its own liquidity demands, the number on the right side of the hyperbolic defining equation. That liquidity number, the flexibility of banker bot to 'float', tends to one, money is the closest we get to a perfect Shannon match.

No, these gas taxes will be Obamacare taxes

California will use the money for other causes, not road building. The Floundering legislature will spend according to its priorities, and road building is low on its priority list.
Hill: California is considering increasing the amount of money drivers in their state will have to pay at the pump to help pay for transportation projects as federal road funding dries up.
Legislation has been in introduced in the California state Senate that would increase the state’s approximately 47 cents-per-gallon gas tax by 10 cents.
The new California fuel levy, which would be the state's first increase since 1994, will be collected on top of an 18.4-cents-per-gallon federal gas tax that is charged to all drivers in the nation to fill the federal government’s transportation funding coffers.
The American Petroleum Institute says the gas tax increase will bring the total amount of money that drivers in California are charged at the pump to more than 75 cents per gallon. The state is the latest to consider increasing its gas tax in recent years as federal transportation funding has dried up.

Wednesday, June 3, 2015

Getting quantum entanglement without information theory

Information gets the sufficient condition for quantum entanglement, but not the necessary. We need to do better.
Wiki on type theory: The types of type theory were invented by Bertrand Russell in response to his discovery that Gottlob Frege's version of naive set theory was afflicted with Russell's paradox. This theory of types features prominently in Whitehead and Russell's Principia Mathematica. It avoids Russell's paradox by first creating a hierarchy of types, then assigning each mathematical (and possibly other) entity to a type. Objects of a given type are built exclusively from objects of preceding types (those lower in the hierarchy), thus preventing loops.
The goal here is to go from equipartition to entanglement and still have set omega algebras 'almost everywhere'. We need the queue concept, an incomplete set. We need to enforce typing by compression, and that gets overlap. Overlaps are finite and determined by index. Queues carry the second derivative, and in the entanglement version of sets, queues are stable via restriction of compression,  Queues have motion.

So who is going to create the entagled set theory? Some young and soon to be wealthy mathematician.

Tuesday, June 2, 2015

Inflation never soars unless you are expecting a recession

Krugman and Feldstein are both wrong about the monetary base and inflation.
The rate of inflation drops once the monetary machine is contained. Look, this is the YoY deflator. When it jumps up, that means recession, otherwise inflation falls. This has been mostly true ever since Nixon shock.  So I have a hard time understanding the bizarre models, the stick rubbing Hicks thing or the monetary base thing.  The rule is simple, the inflation rate falls. Unless the Fed and G are doing the 40 years helicopter drop, we get less inflation over time.  There is a reason for that, inflation is what the economy tries to eliminate, it is an error.

Valeria Ilva tries peer to peer violence in St. Paul's public schools

Distrust and Disorder: The district also shifted its thinking on discipline, influenced by data that showed black kids being suspended at alarming rates. Such punishment would now come as a last resort. Instead, disruptive or destructive students would essentially receive a 20-minute timeout, receive counseling by a "behavioral coach," then return to class when they calmed down.
The changes came at the behest of Superintendent Valeria Silva. When she took up the torch of St. Paul's schools in 2009, she inherited an urban district like so many others — one with a dire achievement gap between students of color and their white counterparts.
She charged teachers with the job of fixing this gap, lest they be complicit in the cycle of poverty among black and brown communities.
Silva's solution, called Strong Schools, Strong Communities, was touted as "the most revolutionary changes in achievement, alignment, and sustainability seen within SPPS in the last 40 years." At least according to the district's website.
To kick it off, St. Paul spent more than $1 million on Pacific Educational Group, a San Francisco consulting firm that purports to create "racially conscious and socially just" schools.
Pacific offered racial equity training for teachers and staff, where they practiced talking about race. Teachers were asked to explore their biases, to preface their opinions with "As a white man, I believe..." or "As a black woman, I think...."
"The work begins with people looking at themselves and their own beliefs and implicit biases," says Michelle Bierman, the district's director of racial equity. If teachers could recognize their subconscious racism, everyone would work together to bridge the gap.
So, when a kid slugs another, first check to make sure is not racial culture.  Evidently some racial cultures communicate by mouth slugging.

Monday, June 1, 2015

Looking for Misky

The Case of the Missing Minsky Paul Krugman is looking for moments when we have a gray bar, Minsky moments. They happen to appear once per president. They result because Congress only makes on long term tax/spend decision per president. Note the exception, Reagan. He made a blunder4ous tax/spend decision and immeadiately caused a severe crash, then he made a correction. That allowed him to skip the 1988 Misnky moment. The eleder Bush made the one tax/spend decision and had his Minsky in 1992. Then we have the pattern continuing seince then.

Banker Bot to the rescue

Seasonal adjustment explained
So, the average first-quarter growth rate since the end of the recession has been 0.4%, while the average growth rate over that period was 2.2%. This might make you wonder whether there is something funny going on with the seasonal adjustment of the data. The same thought occurred to Glenn Rudebusch et al. at the S.F. Fed, and they showed that, in fact, there is residual seasonality in the real GDP time series. They ran the supposedly-seasonally-adjusted real GDP time series through Census X-12 (a standard statistical seasonal adjustment filter), and came up with an estimate of first-quarter 2015 real GDP growth that was 1.6 percentage points higher than the reported number at the time (before the latest revisions). Apparently the BEA has been made aware of this problem, and is working on it.

Banker Bot prices the WinterCoin to Dollars. So agents in the economy can save and borrow to measure seasonal change in WinterCoin. But WinterCoin needs a mark to market mechanism, the Winter Coin bettors need an external signal to bet against. This is the requirement in no arbitrage betting, there must be a group trading against the effect externally, that is banker bots member bank problem.

Banker bot always needs to recruit a consistent group of betters who have a stake in the outcome. But we have three dominant effect, DC tax season, winter weather and holiday spending. One bet that differentiates the seasonal effect is government deficits in DC vs sales tax income for the large states.