## Sunday, October 22, 2017

### We survived hurricane season

Initial, and optimistic, estimates put the cost at a quarter point for Q4. Housing starts took a bigger dive than expected, so that estimate is closer to a third of a point, Labor markets remain 'tight' the survey says, meaning JOLTs may have slowed, but not died. Two more weeks of erratic JOLTs data is likely.

My revised estimate is 2/3 of  points of GDP loss over three quarters, down from a full point.  We will skip the blue bar and worry again in Q1 2018, Swamp ledger time.

## Friday, October 20, 2017

### Millennials have agreed!

The ten year is at 2.38, a 40 basis point jump over two years, or a 15% rise in federal interest charges for the indefinite future.  We got the  millennials to sign the ledger on this day, those wonderful little kids.

## Thursday, October 19, 2017

### Wealthy folks on strike

Treasury Secretary Steven Munchin, speaking on the eve of the 30th anniversary of the 1987 market crash, predicted stocks will plunge if Congress fails to overhaul taxes."There's no question in my mind if we don't get it done you're going to see a reversal of a significant amount of these gains," Mnuchin told Politico on Wednesday.Mnuchin's warning -- a highly unusual one for a sitting treasury secretary -- suggests he fears a drop of at least thousands of Dow points. The average has spiked almost 5,000 points since last fall's election, a rally that President Trump often celebrates as evidence of his success.
The super wealthy can no longer be guaranteed the market rises as they fund Congressional debt.  Ned should know, he was head life insurance salesman at Goldman-Sachs.   Tis is a threat, either the Swam cu taxes on the super wealthy of interest charges are going up.

## Wednesday, October 18, 2017

### Why would an intelligent person join Mensa?

A study of intelligence and neurosis discovers that members of the high intelligence club, called MENSA,  are neurotic. Smart happy people don't join narcissistic organizations. In fact, it is kind of a stupid thing to do, unless you are smart and neurotic.

After comparing this with the statistical national average for each illness they found that those in the Mensa community had considerably higher rates of varying disorders.
While 10 per cent of the general population were diagnosed with anxiety disorder, that rose to 20 per cent among the Mensa community, according to the study which published in the Science Direct journal.

### Not worth the enforcement

At around midnight Sunday, Gov. Jerry Brown pandered to religious extremists and jeopardized the job security of women across California.In his final act of this legislative session, Brown vetoed a bill that would have ensured that a woman can’t be fired because she decided to get pregnant, use contraception or have an abortion.Assembly Bill 569, the Reproductive Health Non-Discrimination Act, would have banned workplace discrimination due to a woman’s personal reproductive health choices.

This is back to California and the legislature granting licenses to sue just about any business for any reason.

In this case, gay bars hiring gar workers, lots of lawsuits. Businesses that don;t cater to the LGBTGIF crowd be getting sued all the time for marketing reasons.  Brown was correct to veto, it is not the place to be doing this, not in a state where each law is a license to suddenly sue some, now defenseless, business.

The cost of California's lawsuit business

Businesses in California survive by watching potential lawsuits, and avoid them like the plague.  The legislature grants the right for some aggrieved class to sue some other identified class. The result  is that business has a narrower range of operations, in marketing, production or services, before it runs afoul of some lawsuit.  During a downturn, business will simply  shut for a while until margins improve enough to cover lawsuit risk.

Real problem, happen in my hometown all the time, mostly real estate restriction, a myriad from the state, old building designation being the worst. Then all the mandates in emergency health care running the costs of emergency rooms way up.   labor relations with local government a nightmare of regulation.  Handicapped access was a big lawsuit problem for a while.  On and on... businesses and local government getting hit with these 'licenses to sue' granted by a fairly ignorant state legislature.

### No, macroeconomics becomes much easier

Noah is concerned because the spectral response in macro is generational and sparse. The major motions of the economy are the federal recession cycle and the generational monetary cycle with one more long term and a bunch of smaller terms.  Not enough to transmit Magic Walrus which does not recognize trade book uncertainty.

But the sandbox does it right, and is no arbitrage, auto-traded.  It will compute, in the collective, whatever significant instruments the economists concoct. The trade sequences that currently the academics are passing and sharing in  python, with a bit of adaption, becomes the trade books themselves, directly traded.  Nothing changes except economists have to understand trade book uncertainty and why we quantize.

### I wasn't invited

Rethinking Macroeconomic Policy Conference

No one from Redneck U seemed welcome, it was strictly a Magic Walrus event.

Here is a video of Ben, stroking his beard and looking all serious:

The video got squashed, some how. In it he introduced his new gadget, the monetary regime changer for flatline curves.  Ben is worried about government debt in a deflationary environment, he doesn't like the uncoordinated bankruptcy of the Swamp.  He has this price level idea for a target that kicks in during the emergency.

My suggestion is to directly do what he wants to do, wipe out government debt. He just needs to default in a fair traded environment so one part is not designated the arbitrary payer.  He wants sandbox, a better gadget.

### Prison unions officially allowed to steal from inmates

When an inmate has a Restitution Fine and Direct Order Collection a portion of any money you send in will be used to pay that fine or collection. Effective January 1, 2007 and thereafter, when an inmate owes any obligation pursuant to a restitution fine imposed by a court, the department shall deduct 50 percent or the balance owing, whichever is less, from the inmate's wages and trust account deposits regardless of the source of such income. In addition, an administrative fee of 10 percent of the deduction shall be deducted to reimburse the department for its administrative costs, for a maximum deduction of 55 percent.
Prison guards,  obliged to the union, inmates be damned. I just wanted to send some kid I know a few bucks, now I have to do a whole bunch of discovery to find out how much will be taken.  His crime involved no victims, he ran from the cops, safely, but got caught.  Then the kid skips meth class and gets a parole violation.  It is a catch up game chasing the kid down before California government destroys his life, which they may have already done.

## Tuesday, October 17, 2017

### But this judge doesn't count

Federal judge in Hawaii blocks Trump's 3rd travel ban hours before it was going to take effect

He has already been labeled a 'make shit up',  talking points judge with no logical concept of the law, a Sotomayor type. The rest of the  supremes will dismiss his objection without a hearing.

### Judicial tyranny

Tax that guy behind the tree and send me my check.

### The cops can take a finger

Government May ‘Seize’ Your Fingerprint to Unlock Apple Devices, Federal Court Rules

What is the rule on returning seized evidence?
If the seized property was contraband, the police will not return the property under any circumstances. If the police seized your property as evidence, it will likely be held until the conclusion of the criminal case. ... This can be the most challenging situation in which to compel the return of your property.
They have your finger, how do you perform bodily functions while stored in the evidence locker?  You cannot, a finger is not evidence.

### More dilithium crystal

We are running with a 1% slope for a few days, and lightly under dipping into .88.  The whole curve jums a basis point, that is a bit of volatility and the markets might be topping.

### Bitcoin is composed of

• Chinese capital flow restrictions,
• US QE operations,
• India's demonetization,
• Euro bailouts
• and Russian oligarchs.

All the aggregated forces that move central bank money off of equilibrium.  Stock and flow tells us that these are 20-40 billion/month moves, and if bitcoin is the most available antidote then a market value the size of Morgan-Stanley is justified.

## Monday, October 16, 2017

### The Association of Politically Incorrect Bloggers will file a protest

Car bomb kills journalist behind Panama Papers offshore tax evasion investigation 'days after she received threats to her safety'

Someone laundering money through Malta done it, possibly Mexican government and cartel crooks.

Mexico is getting to be a pain in the ass with the opioids and meth and government crooks and killings.  After Trump nukes Tijuana, we should impose Franciscan rule, let the catholics learn em something.

### We should fail to notice the muslims"

Pakistani police burst into a classroom last week, dragged 14-year-old Arsalan Masih out, and beat him to death in what appears to be the latest sectarian lynching targeting Pakistan's besieged Christian minority.
A lot of losers in the islamic nations, which is chicken and egg?

We all have whacko police, and deranged old white men with penis anxiety and guns.  But islamics always seem to attack christians, maybe because the popes don't fight back?

#### California legally recognizes third gender option

If member one and two are OK then here is an operation to create fourth member, outside of the three; a blend of one and two.  We should assume spin exclusion, so only unique combinations of 1-3 of the given genders allowed. The resultant set of all combinations leaves us complete,  any combination resolves back to a member of the set, the uniques.

For genders a,b,c with no duplicates, these are the permissible sets, and any combination or intersection of the commutable elements results in a member of the et, except null.  If we include null then we admit of a lass of self transitioning genders, ruining the whole point. Can't be a member of the Null gender.

How do genders intersect, make a composite of their genders differences?  Unknown.

a,b,c,ab,ac,bc,abc

The plumbing will be difficult and costly.

### There is a group of corrupt congress reps involved

The corrupt side effects of government regulation, like the imposed migration out of Illinois, using defense procurement for political gain; war crimes, actually.
The US Drug Enforcement Administration ‘shut off’ investigations into large distributors of addictive opioid pills, while a new law made it nearly impossible to prosecute them, the agency’s former employees said.
During the Obama administration, the drug industry used their money and influence to pressure top lawyers at the DEA to take a softer approach to investigating large distributors of opioid pills, even when there was ample evidence of suspicious dealings, Joe Rannazzisi, former head of the DEA’s Office of Diversion Control, told CBS’ 60 Minutes program.
Rannazzisi accused America’s largest painkiller distributors, including Cardinal Health, McKesson, and AmerisourceBergen, of “knowingly” turning a blind eye to the addictive pills being diverted to illicit use.

### Keeping accounts in the bronze age

The transition from proto-writing to the earliest fully developed writing systems took place in the late 4th to early 3rd millennium BCE in the Fertile Crescent. The Kish tablet, dated to 3500 BCE, reflects the stage of "proto-cuneiform", when what would become the cuneiform script of Sumerwas still in the proto-writing stage. By the end of the 4th millennium BCE, this symbol system had evolved into a method of keeping accounts, using a round-shaped stylus impressed into soft clay at different angles for recording numbers. This was gradually augmented with pictographic writing using a sharp stylus to indicate what was being counted. The transitional stage to a writing system proper takes place in the Jemdet Nasr period (31st to 30th centuries BCE).

Boldface is mine.

But note that keeping accounts seems to be coincident with early text.   Prior to this should be barter, but keeping accounts would not be associated with barter. Keeping accounts is about fiat money.

Once the traders keep clay tablets with inventory marks, they have term structure, they have accounts payable and receivable. Most of the accounts ties to shipments, or to the value added of the shopkeeper.  What makes these accounts have a denominational algebra is the standardization of transportation in cities.  Thus the standardization of account marks is determined by the container algebra, the number of units held in one standard wagon load.  Buying by the 'case' becomes normative, the accounts adopt a matching quantization.

### The consensus on AI

includes this gem from Business Insider:
While AI is having an enormous impact on individuals and the smart home, perhaps its largest impact can be felt in the e-commerce space. In the increasingly cluttered e-commerce space, personalization is one of the key differentiators retailers can turn towards to stand out to consumers. In fact, retailers that have implemented personalization strategies see sales gains of 6-10%, at a rate two to three times faster than other retailers, according to a report by Boston Consulting Group.This can be accomplished by leveraging machine learning technology to sift through customer data to present the relevant information in front of that consumer as soon as they hit the page.
More accurate trade book begets inventory stability and lower cost to the consumer.  What is the price of something? The resource cost of holding spare inventory because consumers have demand jitter.

It will be a little different than BI claims, remember we are building the singularity as we do this.  The consumer has bot agents building the optimum probability of arrival for any goodie in demand.

The computation is shared with producers in the trade book.  The card and sandbox have already gotten the best choices in mind. The customer already signed up in a buyers club, negotiating large, but fewer transactions, lowering inventory costs.  Most of the user's personal history remaining private, the aps depend on honest self appraisals from the cash card, in the form of compact distributions, mostly anonymous.

Hence the biggest change of secure element, trading bots, yours and producer,  dealing with honest information (precision is stated)  means no ads and good security; but all the benefits remain for producer and consumer. That is AI, computed by the bots via fair trading (sandbox rules).

## Sunday, October 15, 2017

### This can't work

China Manufacturing PMI (index level) in  Red

10-year Treasury yields in
Black

This is a Bloomberg chart.

This is the US taxpayer paying rates on debt according to Chinese production growth.  The more productive the Chinese, the more in interest charges are paid by Millennials for debt accrued before they were born.

Unsustainable once we realize that dwet/GDP is greater than 1 so interest charges will be looking more like the 15 year rate.

But, if anyone doubted the twin deficit theory, the two lines above might change their mind.

### Money, accounting and cities

I would think they go together.  Cities comprise the rise of shops,specialized tradesmen.  They take inputs and deliver outputs, no public flea market; it is a city.

Early skilled shops would take a raw material for production of a specific sort, and keep account of the raw material.  In the general case, the customer delivered the raw material, and the produced output was pre-assigned in the traders book.

From there we have the simple matter of one customer re-assigning the delivery for a future product, money.  Sovereigns, naturally, would impose a share of output from all craftmen, keep the sovereign's mark in each book.

We had paper, we would not start with a commodity. Real commodity money is jewelry, still exists and dates back to bartering and stone age.

## Saturday, October 14, 2017

### Xi Ping is into theory

BEIJING (Reuters) - China’s ruling Communist Party has agreed to amend the party constitution, expected to embed President Xi Jinping’s political thought, ahead of next week’s five-yearly party congress in which Xi will tighten his grip on power.
Kind of like writing a bible, takes lots of years:

Xi’s more recent predecessors, Jiang Zemin and Hu Jintao, both had the party constitution amended to include their guiding thoughts, but without their names directly attached.
Jiang has his “Three Represents”, which embraced private entrepreneurs, written in, while Hu, Xi’s immediate predecessor, had his economic doctrine of “scientific development” included.

Old Ping got some space for entrepreneurs.  If your theory is super special, it is named after you, like the catholics do with sainthood.  Their constitution reads like Wikipedia.

### When populatyion measurment is very accurate

The Math Behind Gerrymandering and Wasted Votes

This Quant magazine goes into detail about Gerrymandering when voters always obey a preference. And the article makes sense.

But Gerrymandering occurs during census and populations change, hence there is uncertainty in voting preferences.  With a variation in preference of zero, one can do a lot. But when the populations are reasonably split, and the voting patterns slightly uncertain, then there is  moderate possibility that Gerrymandering works in reverse, the minority gaining more seats when districts are evenly matched..

The minority then gets their Gerrymandered allotment every time, but occasionaly they win the more evenly matched district as a bonus. This is what we see in Texas, under even modest voter uncertainty, it is very difficult to insure the Gerrymandering does not backfire.

## Friday, October 13, 2017

### Just a revolution

The Director of The People’s Bank of China’s (PBOC) Digital Currency Research Institute, Yao Qian, has announced his determination that the issuance of a state-owned digital currency is necessary in order to “fundamentally guarantee the market position of… [China’s] currency”, as reported by Chinese media outlet, Yicai.

### Where did California regulators get this authority?

Covered California slaps a surcharge on health plans as Trump remains coy on subsidies

How did an appointed committee have the authority to raise rates based on a possibility? The fee is a tax, did the federal government order the states to arbitrarily set taxes without a fair vote? Is this a contractual fee?  I do not exactly remember the Cal legislature ever voting on Obamacare, one way or the other. Now we have appointed people setting our tax rate.

### More like siblings

The twin deficits, they are called.  Many economists complaining that this is a complex story, not so fast.

The blue and red going down is trade balance getting worse, the green going up is debt.  The lower blue deficit.
Kind of mirrored.  Our trade deficit has been increasing since the shock, and so has Swamp debt.  My guess at cause and effect? Bailouts never amortize. We the deficit gets bad, usually domestic business is lousy and government is bailing folks out.

### Market up, slope down

Treasury slope is now .9, the market up a fifth of a point.

So a quarter point rise in the market goes with a ten basis point drop in slope.  If the two were not traded simultaneously, there would be arbitrage.

# The rise of a new kind of finance is setting off alarm bells at the Fed

The new math for pattern matching requires fair access to the tradebook and auto-trading.  In other words, the Redneck Reference architecture along with Intel security standards, what Microsoft is doing with COCO and the new open access trading platforms.

Blockchain is not the scary part, Fed researchers are following the math links and finding advance theory on pattern matching.

### A Redneck compatible architecture

Bitcoin Press Release: The next generation Bitcoin and digital asset trading platform, NakamotoX debuts its Alpha, starts inviting users for Alpha testing and trading contest.
I look over this ad.  They are paying attention to the Redneck Reference architecture.

## Thursday, October 12, 2017

### Here is a lead for sandbox researchers

We define the relevant information in a signal x ∈ X as being the information that this signal provides about another signal y ∈ Y . Examples include the information that face images provide about the names of the people portrayed, or the information that speech sounds provide about the words spoken. Understanding the signal x requires more than just predicting y, it also requires specifying which features of X play a role in the prediction. We formalize this problem as that of finding a short code for X that preserves the maximum information about Y . That is, we squeeze the information that X provides about Y through a ‘bottleneck’ formed by a limited set of codewords X˜. This constrained optimization problem can be seen as a generalization of rate distortion theory in which the distortion measure d(x, x˜) emerges from the joint statistics of X and Y . This approach yields an exact set of self consistent equations for the coding rules X → X˜ and X˜ → Y . Solutions to these equations can be found by a convergent re–estimation method that generalizes the Blahut–Arimoto algorithm. Our variational principle provides a surprisingly rich framework for discussing a variety of problems in signal processing and learning, as will be described in detail elsewhere.
Brad DeLong spotted this because he watches the sandbox tech.   This is another version of what is exciting us all, formal methods for matching algorithms between two sequences.  This one is worth a read if you are a mathematician at Coinbase, for example.  Or, for example, if you were a mathematician at Microsoft and wanted your company to make zillions in Fintech, then you might check this article.

This choice quote:
A fundamental problem in formalizing our intuitive ideas about information is to provide a quantitative notion of “meaningful” or “relevant” information.
What I call 'significant' , trade books ordered as compact generators of the typical sequence. Take the significance measure as how much innovation does this transaction add to the stable statistics of the process; a good definition.

These folks, in 1999, went ahead in time and stole my ideas.

In multi color, we have two or more sequences Xi, each simply something about the typical sequence Y.  The incoherence between the sequence X, against Y is the bit error. We have invented a method of mutual coherence in maximum entropy systems, completing the analogy to Euler systems.

Three color leads to surfaces that are isomorphism of the some object having 'holes' surrounded by smooth surfaces. Our concept of loan and deposit is two matching surfaces operating as a sphere packer.   Add the third color, say he ledger fee, small.  You split the sphere packers into mostly independent groups, and add a 'hole' in doing so, or something like that.  (I am still learning the stuff).
An easier think is that the third color manages skew in the system transaction distribution.  This was kind of the point, mapping a statistical algebra of mean, sigma and skew against a surface geometry by noting the hole dimensionality, a kind of degrees of freedom match between systems.

Follow this line if you are into the provisioning of auto traded pits.

Inflation probably picked up a little in September due to the increase in gasoline prices following Hurricane Harvey, so COLA will probably be close to 2%.
A little bad weather and a whole bunch of folks get permanent wage increases.   Calculated Risk goes into some detail on COLAs, including a bunch of protections against negative adjustments.

We are at the end of the cycle, the Swamp needs to pay the bills and the market has likely peaked. (How many times have we said that?).  But capital gains taxes slow down as well as a bunch of merchant income.  Taxes, right now, are rising by 1%, spending needs to rise by 2-3% to support legal obligations, as we see above in the 2& COLA.  We should sequester the budget soon, maybe right after the downturn.

### Ben has a new gadget

I propose and discuss a third possible alternative: a “temporary price-level target” that kicks in only during periods in which rates are constrained by the ZLB. I argue that the adoption of a temporary price-level target would be likely to improve economic performance, relative to the current framework.
When we have a downturn, like a whole bunch of hurricanes hit or something like that.  He has a modification of his pit boss algorithm, a slight regime change when the going gets tough.  What's a price level target? I guess you basically skip the unemployment target thing? Dunno, if it is a god idea, send me a copy and I will run it in my two  color, sandbox compatible trading pit, test it. We can learn to bet the regime change.

### Great mathematician

Vladimir Voevodsky, Revolutionary Mathematician, Dies at 51

Lotta heartbreak in the math community, it was sudden.

I am looking up his work, learning new stuff.  He advanced a particular interesting form of topological proof.  I will handwave it, quite generally.

If you want to integrate over a smooth surface of an object, like a donut, or sphere.  If one knows the number holes or loops in the object then  can one determine the best lines of symmetry over which to  integrate on the surface. this more of an example of how to use his theories, he is finding the algebra os shape, and all iso-deformations of shapes.

What happens if we shrink the column of a shape full of holes? We get a graph, nearly, which is interesting theoretically.  I think, finite structure and their algebras,might be what he was about.

### Curve a bit steep, stocks down but wait

Curve is back with a slope greater than a point, stocks down.  Goldman-Sachs us reaching its limit  on keep Congress funded and stocks rising.

Update:

Then the curve flattens and stocks drift. Slope is below a point (ten  minus one).  The range seems narrower and the debt pushers can't quite make the surplus. As if we are topping.

This could be hurricane short term debt effects.  But the damage seems large enough that a one year of 1.40% seems to be near minimum for a quarter. Congress, getting squeezed. Stay tuned!

Update2:

## 'Hawkish' Fed Minutes Crush Yield Curve To Flattest Since Start Of Last Recession

Well, it could be the dovish goldman-sachs.  One might say the ten year is stuck, low. And, remember, these minutes were ante hurricane.

What is the proper thing for the Fed to do with the hurricane debt?  Raise rates, actually, as if the Fed wanted to tell everyone, suddenly, we got hurricane debt. Then lower rate a quarter hence when the swamp absorbs the debt, one way or the other.

## Wednesday, October 11, 2017

### Deficits and inequality

The dots are called the GINI coefficient. The higher the dot the more inequality. Deficits are higher when the red line drops.

It seems that inequality drops a bit when we run deficits, but it is not a sure thing.  We have to recognize that our deficit cycle is coincident with the recessions.

During these recessions, wealthy people get a bit poorer, and they recover their wealth and then some when the Swamp begins paying the bills again.

### It is the Koch socialism problem

A Zillionaire’s Solution: Tax the Rich and Save the Economy

The problem is that voters refuse to pay for all the crap they buy from the Swamp.  Wealthy people are recruited to make sure volatility is low, rates controlled such that government can make the interest charges.

The wealthy, being part of the debt cartel, get first choice on the available investments, after they fund Swamp debt.  A lucrative deal,a deal that guarantees wealthy people get about 7%  return.

Bill Gates, for example, made 2/3 of his money via wealth management under this scheme, he went from 20 billion to 80 billion, all the while claiming to be some innovative geek.  Bill Gates, and the rest, can thank the MIT  crew and their horrible Magic Walrus assumption.

### Hollywood is not full of educated folks

Actress Lea Seydoux: ‘Everyone Knew What Harvey Was Up To’

None of these actors and actresses have much education. Their knowledge of history, like that Colbert guy, all comes from Doonesbury cartoons.  They are generally speaking to Californians, most of whom were educated in some of the worst public school in America.

So, from the point of view of uneducated folks, like Ben Affleck, they had no idea that they were doing the same shit they complained about. The solution is to recognize Hollywood entertainment as useless shit, starting with the Colbert guy.

### 100 million refugees headed to Europe

Death of the Nile

Population growing at great than 3%, no sanitation, dams being built and the river is used for sewage. Then we have desertification, so farmers are going broke.   Fishing no longer works for Egypt.

Result? They are all headed to Europe, mainly Sweden.

### My hometown in the news

#### Police plan curfew centers to keep juveniles off city’s mean streets

By mean streets he means a class of brain dead long time meth users.  Our city is full of them and almost the entire generation of young kids around the lower  middle class got stuck on the stuff and became life time disabled.

But the drug panel claims that opioids are much worse.  Likely true, but the opioid user generally lie still and approach death peacefully.

### Virus companies release viruses

Although there are strict security restrictions in using computers within the military, Lee says huge "holes" have been exposed at times when the intranet and the extranet were connected. North Korean hackers were able to steal data through malicious virus codes that they had implanted inside a software vaccine company that provide exclusive services as a subcontractor to the South Korean military, according to Lee.
And the South Korean military is clueless, worthless.

Here is an idea.  Forget protecting the network, try protecting the data.  Encrypt the data, do not reveal the secret key to anyone, not even yourself.  Then only secure ID cards having the appropriate decoding key can read the data, and no one gets to look inside the secure ID, not even the owner..

Why is this so difficult to understand?  Even Intel figured it out and they have a hardware protection standard. Use the Intel standard and then the idiots in the military can buy all spy software from North Korea, it can do no harm.

We have the Intel standard specifically because idiot computer users buy anti virus software and therefore allow the anti-virus company steal your stuff.

So the military has a choice.  Either read my blog and get a clue or voters will cut all your funding since you mostly send everything to our enemies. If Tim Cook could figure it out, it cannot be that difficult.

Now, Intel, send me a check.

### Jerry Brown finds a way to raise taxes without a legislature

California Slaps Surcharge On ACA Plans As Trump Remains Coy On Subsidies
California’s health exchange said Wednesday it has ordered insurers to add a surcharge to certain policies next year because the Trump administration has yet to commit to paying a key set of consumer subsidies under the Affordable Care Act.
I am a little confused.  The Federal Supremes  ruled that Obamacare premiums are a tax, thus implying that the taxes were raised by a legislature.  Now we have some appointed committee voting to raise our taxes.  Why not just dismiss the legislature completely and just raise taxes by committee?

### Sandbox attack!

Deputy Attorney General Rod Rosenstein warned Monday that strong encryption built into handheld devices is preventing law enforcement agencies from protecting Americans from criminals and terrorists.
Rosenstein said "warrant-proof" encryption used on smart phones and other devices has blocked courts from gaining access to evidence and intelligence needed to protect citizens. He called the problem "one of our greatest challenges."
Intelligent cash cards have to be exempt, otherwise we will not develop the default machine for Congress.  Without the default machine the Swamp is no more.

The Swamp is stuck, it cannot pay its interest charges and its only hope is the sandbox.

### Disasters raise interest charges

The House is poised Thursday — over the fierce objections of conservatives — to pass a \$36.5 billion emergency package to help states and U.S. territories ravaged by a series of hurricanes and wildfires that have killed dozens and destroyed thousands of homes.
Trumpster says this is the first of the installments.  If the three installments are in the same range then we add 100 billion to the deficit over three years.   So, we can forget tax reform, just move on and see if we can pay the charges or default.

### Interest rate declines started in 1984

Delong likes to start the series in 1990:

It is the long, steady decline in safe interest rates at all maturities since 1990

Why does Brad want to exclude half the monetary cycle?  Because Brad does not want to acknowledge the idea that central banking has a monetary cycle.

But, there is the stagnations, debt rising in Congress over the monetary cycle because the central bank bails out bad policy.  This is what Warsh has been arguing, when central banks bail out government, they wander off equilibrium and once a generation we need a restructure to bring it back.

Why do Kanosians care one way or the other?   Because in the 70s they lied, they said Magic Walrus was fact, now they are stuck.

### Curve flatter by a basis point

And the one year rate rises to 1.40%, the curve remaining under a 1% slope.  Hence, we get a stock market rise.

Now, 1.4% seems like a good one year rate in these times, everyone likely jumping on it.  But government debt issuance stays ahead of the mob, one year consistently rising, the ten year cannot go lower.

If Congress were to sequester right now, we could hold on, avoid a recession.  But it looks like Ned and Trump plan to invert the curve.

### Ned Ryerson wants the fed to be his personal banker

Why does the former hedge fund manager and Goldman employee like Power? According to Politico's sources, "Mnuchin, who knows Powell well, feels comfortable with him and feels like Powell is a safe pick over whom he can exert some measure of influence."
Koch socialism, somehow free market capitalism has become a safety net for the debt cartel.  Ned is a dunce, needs a slug:

# Feds Probing Potential Insider Trading By Senator Bob Corker

Who cares what anyone says about the corrupt senate, don't think anyone there is really clean.  Senators like Corker and Feinstein mostly do insider trading and little legislation, for which I am thankful. The last thing we want the corrupt bozos to do is write more law.

## Jimmy Carter Offers To Meet With Kim Jong-Un To Prevent War With North Korea

He has an identity crises, always did.

# Kentucky Pension Crisis Goes Nuclear As Teacher Retirements Surge 64% Over Last Year

### Religious psycho proposes Sharia Law in Alabama

Alabama Senate candidate Roy Moore (R) received more than \$1 million from a charity group between 2007 and 2012 for part-time work despite claiming he received no "regular salary" from the group, according to a new report.The Washington Post reported Wednesday that Moore had arranged to take a yearly salary of \$180,000 from the Alabama-based Foundation for Moral Law, a charity he founded to promote Christian values in government.

When asked about imposing Islamic law on US citizens, Roy responded,"Well I am a friggen idiot after all"  I doubt the voters of Alabama want an Islamic nutcase for Senator.

### Cyrus says his ongoing bribery machine was incidental to the case

Manhattan DA: It’s Totally The NYPD’s Fault That We Didn’t Prosecute Weinstein In 2015

I disagree with Cyrus a bit.

I think all of his cases are in doubt and half the jailed people of NYC have a valid case that Cyrus is a corrupt jackass.

## Tuesday, October 10, 2017

### Yet another significant disaster

And it is not done, evacuation orders still expanding.

Like Puerto Rico, Sonoma is severe pension problem. A third  of Santa Rosa burned, population 120000, entire neighborhoods.

Much less damage than Texas or Puerto Rico.

## Nancy Pelosi threatens government shutdown to protect ‘Dreamers’

The place is paralyzed anyway.  Let's move the discussion on to default.

### I'm gonna have to do some mansplaining to Liz

USPS Banking? Elizabeth Warren Thinks It’s A Great Idea

She worries about the unbanked, all 60 million of us citizens.  Mobile wallet tech has put that many onto banking in the last few years.

### Not quite, Tim Duy

Kevin Warsh, Very Serious Person, by Tim Duy

Tim claims that some speech given by Warsh is advocating for reduced deficits.  I read the whole thing.  The text I read simply said that combining fiscal and monetary policy is dangerous, bad policy results from the fiscal side remain there, and visa versa.  The text was a very sound judgement.

What Tim did was to assume we all knew that Warsh did not like deficits at the current moment.  May or may not be true,  but separating fiscal and monetary is extremely important.

A lot of economists are saying 'more fiscal policy'. What they mean is that their favorite programs should get higher priority than interest payments.  That won't happen until we are ready to default.

According to the Times, there has long been speculation Kaspersky's popular antivirus software might provide a back door for Russian intelligence."Antivirus is the ultimate back door," Blake Darché, a former NSA operator and co-founder of Area 1 Security told the Times. "It provides consistent, reliable, and remote access that can be used for any purpose, from launching a destructive attack to conducting espionage on thousands or even millions of users."

In the early days of the Internet I always assumed the anti-virus makers were releasing the viruses.   That would be the straight path to riches.

I hear the military invents stuff now and then.  They should invent the secure smart ID card.  Then life is simple, the protected data can only be recovered using the secure smart ID card.

### There is no empty space

Physicists got the Nobel for doing the more accurate Michelson–Morley experiment , not about the speed of light but about the elasticity of the very constituent of space, the quantized unit of vacuum.
To find the smallest of the small, it pays to dream big. The American physicists Rainer Weiss, Kip Thorne and Barry Barish shared the 2017 Nobel Prize in Physics today for their leading roles in the discovery of “gravitational waves,” tiny ripples in space-time set in motion by faraway cataclysms such as the collisions of black holes.
Time and distance are an approximation we engineers created, damn useful but artificial.

### Implying that Cyrus Vance, corrupt prosecutor, took his usual bribe?

"The case was carried out by experienced detectives and supervisors from NYPD's Special Victims Unit. The detectives used well established investigative techniques...  This evidence, along with other statements and timeline information was presented to the office of the Manhattan District Attorney."
Plug in your own crime, from sexual perversion to real estate fraud, Cyrus Vance will handle the details, for a price.  Here he is, negotiating a bribe.

### Zuckerburg gets stuck in an imaginary world

Here is his video from Matrix World.

He pleas for help, representing himself as a cartoon.  A worldwide assembly of geeks is trying to reverse the virus and get Mark back.  We suspect the Russians dunnit.

### The proton is the unit of account in the universe

Missing protons between galaxies mediate the connections as they reach maximum entropy.  That is the missing matter.
This result establishes the presence of ionised gas in large-scale filaments, and suggests that the missing baryons problem may be resolved via observations of the cosmic web,” said the authors of the second study.“The missing baryon problem is solved,” claims Hideki Tanimura at the Institute of Space Astrophysics in Orsay, France, leader of one of the groups.The result is not surprising from a theoretical perspective, as filaments of gas linking galaxies together have been predicted for years, through models that have been developed and compared with observation. One of the theories that makes these filaments’ existence likely is dark matter, for example. But the ability to look using the Sloan Digital Sky Survey Data and identify the missing mass is a big step
Here is how I think of it. All these free space protons run a low bandwidth communications channel used for one purpose, deciding, in the aggregate, what is the best estimate of Pi.

### Same headline four years in a row

But it is OK:
Homelessness surging among California college students
We still have tent living in sunny California!

### Flatter curve today

One year at 1.36 and the Ten year at 2.35, slope less than a point.  Goldman-Sachs has to flatten the curve to drive stock indices higher.  But they cannot hold the slope at less than a point, so tomorrow GS will adjust the slope up and stocks will slightly dip.

## Trump Proposes IQ Test With Tillerson To Find Out Who Is The Real Moron

If one were a Freudian.

Nothing really wrong, better than a   Carter with the identity crisis or Reagan with the Alzheimer's.  Trump entertains and that is about the best  thing from the swamp.

## A Desperate OPEC Asks US Shale For Help In Cutting Oil Output

But...
And..

### My corner grocer runs a savings and loan

The customers and the store owner have a debt scheme. He adds up the bill, puts it in the book and we pay him every two weeks.  He does other interesting stuff, he is a mathematician, formally.  All of his prices are quantized to the nearest quarter, and purchases rarely exceed \$40, so addition only involves 160 integers in the set.  Given the limited set of goods he sells, addition is a breeze, so I just ride my bike past the counter on the way out, he counts.

Does my corner grocer run a savings an loan?

You bet.  He adjusts prices to cover probable losses due to his risk.  No transaction costs.  Spenders generally keep their trips to the store within their estimation off red.green; the safety bounds they need to clear the ledger every week or so.

And the grocer conserves inventory, at risk.  I go in and out, his trade book is as visible to him as it is to me.  His default rate is low and happens when someone moves out or up or down from the scene, generally he has about \$50 at risk when that happens. But he becomes a one stop shop, banking and groceries. He saves his customers about 1.5% in ATM fees. He basically competes against the ATM machine he has in the store.

Techies could easily embody his transaction rules in a digital contract, he doesn't need the paper notebook.  And is pricing is a 7 bit  precision system.  On an ongoing basis, one could use a Redneck compatible, open architecture, fair trading pit and auto price based on prior sequences of transactions. Do this off line, as needed.  Just compute the price level needed to cover the odds of losses over the typical sequence.

But then again, if everyone has the intelligent cash card, then my grocer can run a formal S&L for us all.  Then keep his prices tied to typical inventory transaction costs, get a nearly constant margin and adjust customer queues with interest on pay ins and outs.   Our cards will give us the green light on this idea.

## Monday, October 9, 2017

### Oil imports account for most of our trade imbalance

Trade deficit increase when the blue line goes down.  The red line (oil prices) go up when trade deficit gets worse, mostly.

And oil shortages have generally been the channel that recessions hit first.  The problem is price fixing by OPEC.

### Manhattan district attorney Cyrus Vance, easy to bribe

Manhattan’s district attorney knew, too. In 2015, Weinstein’s lawyer donated \$10,000 to the campaign of Manhattan district attorney Cyrus Vance after he declined to file sexual assault charges against the producer.
The Trumpster bribed the guy to get his daughter out of a real estate fraud.  Evidently that is the role of the Manhattan prosecutor, take bribes.  Bribery seems perfectly legal in NYC. The Trumpster won't sic the FBI on this guy because the Trumpster did some of the bribing.

Cyrus Vance, gets a free pass while letting this Weinstein turd degrades all our favorite hollywood actresses.

So, if you are in NYC, in a bit of legal trouble, just go see Cyrus, tell him Matt sent you, he knows what to do. But keep it hush, hush.

### Before the hurricanes?

Update: Framing Lumber Prices Up 20% Year-over-year

1) Framing Lumber from Random Lengths through early Sept 2017 (via NAHB), and 2) CME framing futures.
McBride of Calculated Risk watches lumber prices.  This increase includes Harvey, in Texas, but not the next two? And it is a bit out of season to see these prices.

So, we can gauge the bottlenecks added by the next two hurricanes and earthquake.    We will see a three sigma stress on the construction industry, this bodes ill and will take two quarters to clear up.

### Peak government job

The hiring was very steep in the 80s and 90s.  That is 30 years ago, and  now the retiring is very steep.

State and local budgets are in crisis if we see many pension stampedes.  This is why the Alt Ls and Rs are squabbling.

## Saturday, October 7, 2017

### Great blog

a personal view of the theory of computation

A mathematician who reviews all the new work on completeness proofs for computational processes. This blog and a few others I check into and follow the links.  Behind the scenes, for me,  is theory about matching two or more sequences by matching their algebraic generators.   Then show a sequence if increasingly refined generators that reach a hard bound, a contained set of solutions that are compact under indefinite recursions.

Interesting stuff, like this:

Cohen’s paper. The main advance was to use a beautiful concept of trees of degree-${d}$ polynomials with interlacing roots from MSS and improve it so that the requisite trees have polynomial rather than exponential maximum branch length, which governs the time of the algorithm. The paper well rewards further reading.

OK, not having followed up, but my impression is that Cohen proved, for a class of generators, that they are a well queue generating graph, polynomial time. My interpretation,"How do we know a graph is minimal?  Push some queuable items thru it and see if loops show up. (Are the queues stable).

A queueable items that have stable, small queues can survive arrival errors that are within the bounds identified in the generator skewness, keeping full conservation of queuing stuff.

### It's a Dim Kim Family

Kim Jong Un Boosts Sister Within North Korea's Inner Circle

Poison a brother, promote a  sister, machine gun an uncle and a pop star.

It's a great sitcom idea, but we need a 4'2" lead actor with a bowl cut. I should write the musical but I am backlogged. I have the lead title, 'I am Kim, Dim I am'.     The tune,words, dancing;coming to me. I have tall Kimono Japanese dancing women surround our fearless  like god's little toddler.  Leader will goose step around, singing his short ditty of praises to his family royalty with the Kimono girls in chorus.  The Kimono girls in their chorus revealing subtle family flaws and giggling behind his back.  Great opening scene, where is Hollywood!