Sunday, June 25, 2017

Opiod crisis getting worse says Bubba

Former President Bill Clinton expressed his alarm to U.S. mayors on Saturday about the growing opioid crisis and warned that the drug epidemic is not going to be constrained to rural America because of heroin flowing in from Mexico and fentanyl growing more attractive to inner city gangs.
“In the beginning, this despicable epidemic had a less violent delivery system. Our kids were delivered and a lot of our adults were delivered into a paralyzing addiction by doctors, pharmacists and drug manufacturers, not by armed gangs. However, this movie is coming to a theater near you,” Clinton said to the U.S. Mayors Conference in Miami. “Because as the government got better at dealing with opioids, more people moved into heroin.”
“Heroin is even cheaper now because it is now being grown in Mexico in the hidden parts of the Sierra Madre Mountains and being harvested by preteens. And then it got even cheaper with fentanyl which is a synthetic drug that if you have a 13-year-old child or certainly a 15-year-old child who can make a ‘C’ in high school chemistry and access to a garage they can learn how to make. And now it’s becoming attractive to urban gangs,” Clinton warned. “It’s going to eat us all alive.”
Clinton has been privately sounding the alarm about the effects of Mexican heroin for years, speech transcripts released by WikiLeaks last fall revealed.

Ismed in LA

 Institute on Inequality and Democracy at the University of California Los Angeles

"This resource guide outlines the first steps the UCLA Abolitionist Planning Group has taken to understand Trumpism as a moment in United States politics. Building on long-standing exclusions, Trumpism consolidates power through white supremacy, misogyny, nationalism, xenophobia, corporatism, and militarism. Committed to a philosophy of abolitionism, the Abolitionist Planning Group seeks to understand how urban planning, as discipline and professional practice, can analyze and address the systematic oppressions expanded and institutionalized by the new administration."

Uh, a unionist song!

 Free tent women everywhere!

Can BTC pick this up?

Italy will commit as much as 17 billion euros ($19 billion) to clean up two failed banks in one of its wealthiest regions in the nation’s biggest rescue on record.
Government re-directing monetary flow means adaptation.  The quickest adaption is buy  bitcoin with euro.

Dealing with tax dollars and crypto cash

The pure cash layer, as defined with secure element, allows you to honestly pass around tax dollars from your card to any other card.

Just like debit cash, except no need to involve the bank.  Or the S&L can put a chunk of your own on even money, and your SE can share currency risk with everyone else, and spend against that deposit, up front with the proper cash advance contract.  Your secure element knows the bounds and the contract.

Geeks need only put a format called 'tax money' in the multi-currency structure.  If a SE element can generate a tax money token, then it is following the rules.

Then peer to peer exchange is a simple interface to any chat system

Everything must be a point to point exchange between secure elements.  The software simply is an interface between the secure element and any given message service. The SE issues chat commands directly via the NFC interface.  Both parties have chat internet addresses a priori.

Can we do the with Trezor? Sure, using the USB port and writing some reverse engineer software for the smartphone app. Plug your Trezor in and tap on the send money app, the only requirement is a Trezor on the other end. Leave  your Trezor plugged in, build an online shopping app to take digits straight from the wallet.

If your wallet is staying out, it can have its own IP address.  Or it can open and close connections like a cell phone, if it is roaming.  But, the free and easiest method is to assume a plain vanilla text service, a chat.  Our assumption should hold, this is a two point network and has no congestion, there is no compression of flow.  Digits are not co-mingled and the chat exchange does not need priced congestion.  It is sort of by definition, a view that says we will take this route for peer to peer and call it person to person cash.

This is the null trading bot, works with null ledger service. The secure element generate the proper token to the text exchange, and both parties observe incoming text. It is the null trading bot because its only function is send and receive text, one at a time.  So, I think, we can conclude that all wallets will, by design or add on, support direct person to person bearer crypto cash.

Cash is not going anywhere, holding crypto cash in your pocket is the norm, works like regular cash.

There are no congestion free exchanges

And another rule: Exchanges always trade with bots under the same processor as the pit boss.

Assume non stationary buffering, with congestion management.
All the exchange take some risk, they have to manage a bit of error, but the bounds can be set; as long as you accept the possibility of bankruptcy with free entry and exit.

Thus, all exchanges have some custodial holdings of the crypto, and they all obey contract and thus are secure elements, as I always suspected.  Hence, with certainty, I can say, the fundamental transaction in the box is cash transfer, point to point between two secure elements.  If you go through a third party bank, the bank has to be secure element.

The exception to the rule is personal exchanges between two parties, direct or over via network message. We should assume these to happen over messaging services and are congestion free.

The Swamp pays the ten year rate

We hear a bunch of nonsense that central bank money is cheap for the senators.  It is not.

The chart shows actual interest payments divided by total debt (includes SS funds). We can obviously see that the debt cartel has figured government projects are always ten year projects, and priced interest charges accordingly.

So, if we hear some nonsense that the Swamp can borrow its way out of debt, the answer is no.  Our GDP growth rate is likely 1.5%, all things being equal then borrowing money  makes the Swamp more bankrupt than it already is.

Isn't there some sort of nominal trick the Swamp can play where inflation eats away from debt?

The numbers posted above are ex post, based interest payments paid after all accounts are settled.  It there was some trick, the the Swamp would occasionally be getting money cheap. But is is never the safe, the actual interest payments always seem to be just above the ten year rate.

Saturday, June 24, 2017

Selling stocks in the sandbox

One pit per stock, naturally.  We eliminate any intermediate supply chain, the corporate spreadsheet is a distribution with known precision, everything  round robin look at the balance sheet.

The issue is auto pricing to the same uncertainty as the trade book., which we guarantee by having all the buy and sell bots look at the stack before prices are crunched. The TU needs to be less than a quarter point, we need trade volume on the single stock, else the pit boss can get stuck paying for inside information.

In addition to volume, we need liquidity. All the prices are adjusted via a mandatory  margin account kept by all traders. So, two traders agree on price, by some other channel.  They report the event to the pit boss and interest swaps occur to rebalance.   This all depends on what? No flow, no quantization.

But,but... we still have risk profile at the secure elements, so low volume,micro stocks can be auto pitted, but trading bots pre-qualified to run wide of amber.

And, as always, when the pit boss becomes hysterical frightened, pull the jamming flag, cause a noticeable ledger fee.

What have I gained?

The buyer and seller do not want to worry the mechanics of the system, they want to be assured that all TU imposed in the system are fairly distributed.  Thus, buyers and sellers can trade stock based upon posted priced, and the congestion between their deal and the actual price is fairly paid for.

So, buyer and seller meet on the board, and click on the deal.  The next day, your margin account will show a slight adjustment, relative to the formal deal. The pit boss is  accounting for the cost (or gain) of defeating a string of HFT traders. Unknown to you, your trading bot has negotiated a bit, on your behalf. But it will be a well known and commonly used bot; deemed safe by  all.

California legislature kills millions

SACRAMENTO, Calif.June 24, 2017 /PRNewswire/ -- California Association of Health Underwriters President Rick Coburn applauded actions taken today by Speaker Anthony Rendon (D-Lakewood) that recognize the serious deficiencies of SB 562. The Speaker has officially postponed any further legislative action on this bill until January 2018. He also indicated there would likely be a single payer ballot initiative on the California November 2018.SB 562 proposes a $400 billion per year government-run single payer system for California. SB 562 does not contain any credible funding mechanism other than immense new taxes on all Californians. The bill also fails to address or manage the real problems healthcare systems face today such as the constant upward cost spiral of medical care, escalating prescription drug prices and ensuring consumers have access to quality medical providers throughout California.

Waiting for regime change

The US aggregate measures since the Nixon Shock.

Note that we spend more time taking zero or tiny price hikes these days.  And a rising government deficit always precedes a recession, all ex post, of course.

But the recent deficit rise is smooth, well anticipated. This looks like an economy ready to bounce along at near zero.  I keep thinking, we know what's coming, a regime change; a bit of accounting between generations.

Money Stuff talks ETH crash

Matt Levine: 
On Wednesday, the price of ether -- the cryptocurrency of the Ethereum blockchain -- on the GDAX exchange briefly crashed from $328 to $0.10. The story seems to be that there was a big market sell order that blew through a lot of the buy orders on the book, pushing the price down.
What was missing?

All traders must submit a risk profile, the red/green span they are willing to tolerate.  The trading bot that executes the orders can translate risk profile into stop limits on the trade.  Round robin access to the tradebook then prevents the trading bot from jumping across a concavity, as happened.

It is mathematics that requires risk profiles and auto trading need to go together.  In the Redneck model, each trade bot starts with the user's token, which contains the necessary risk profile. The trading bot format makes analysis easier because bot the pit boss and trading bots are treated semi-equally on the stack.  But there are limited types of bots that can trade,and they can be tested simply to avoid the concavity problem.

Friday, June 23, 2017

Xi will be a bit alarmed

The contract is completely outside the purview of the regulators, but is likely between two Chinese citizens in China.

Exchanges need the trading bot model

Simple traders just enforce finite bound on their bid/ask, and set aside to tradebook uncertainty.
The automatic trading algorithm has fair round robin access to the bid/ask before  matches are set.

The pit boss has to make the market and everyone measures its distribution of gains and losses.

Bots are prequalified by path tracing and mostly bonded by the pros. The stability cops. Pit boss cannot hog the stack, except by contract.  Check with the stability cops.

Trading bot model is the best for pre-analysis, working through paths in pairs or triplets and so on, the bound can generally be found, and its risk distributed. You can disqualify some unknown bots, and making the even money price is a farily easy task, to the accuracy of TU.

The sandbox and government crypto regs

Made this point several times.

The sandbox cannot show you any secret passages, it runs maximum entropy.  Try to sneak messages and they get hedge to garbldy doo.

In order to send messages and secret text, you have to make a presence in smart layer, extract a profit that has spare entropy, make a store front.  And you  might win or lose, government's got good shoe leather.  But, nothing to see in pure cash, by definition. No crime, no government; except when the issue is counterfeit, sandbox is on the hunt with government.

Is Coinbase liable for the crash?

Sure are.

The rules of fair, bounded variation trading are well established, by CATO in their free money project and by queueing theory as pointed out continuously on this blog.  Fair traded pits, bounded variation on the trading bots, equal and fair access to the trading stack by all parties, free entry and exit, and the bounded variation contract for the bit error function.

So, sure, clients should sue the frig out of Coinbase for mathematical incompetence. I suggest Coinbase go to settlement, otherwise a shitload of experts will testify to the incompetence of the firm.

Bitcoin reality, a bit of it

Bitcoin News:

Using a credit card to purchase cryptocurrency divorces virtual currencies from many of the core use-values that underpins bitcoin’s basic protocol. The innovation of the blockchain, a trustless ledger that comprises a decentralized ledger that can validate and verify transactions without the involvement of third parties, is made essentially inert by the involvement of credit card companies in a transaction. The transaction is immediately dependant upon a centralized third party, and involves paying fees to the credit card companies, Netcents, and Visa or Mastercard, in order to access technology designed to circumvent the very third parties that are now facilitating the transaction.

Under the current system, yes, traditional banking removes the need for block chain.  But we not going to do traditional banking, we are going to do automated S&L, and in the secure element sandbox, all money is transferable point to point with no central authority and no block chain.

Blockchain is still useful, it is a contract checkpoint.   What is missing in the whole debate is that neither traditional banking nor bitcoiners understand money, prices and savings and loan.  We cannot understand money until we understand the basket brigade theory of goods delivery.

As a reminder to bitcoiners, the original white paper theorized side chains just for this problem, it is in the design boneheads.

Coordination failure

From a review of Trezor, a hardware wallet:

It might be convenient to keep Bitcoin on those online services since you can easily buy or sell. 
This line blew me away.  It is convenient to keep bitcoin in your friggen pocket so you an put it in someone else's pocket, as it it were exactly like cash.  Send it pocket to pocket, either over the internet or directly, no third party exchange needed.

Never in my wildest dreams did I think that 200,000 geeks would get the idea that transferring a batch of watermarked bits from me directly to you is somehow prohibited in the software world!  I have made this point every time.  If we are eliminating cash transfers, then the system is useless, you may as well eliminate the badly designed exchanges like Coinbase which is crash and hedge prone.

So, I have a message to young software geeks, do not listen to the bitcoiners, ask yourself, and I repeat for the 100th time, how foes one human transfer a sweaty cash to another person? Think hard, this is not a trick question.  Pretend you have, in your past, handed a wad of paper to someone, how exactly did that work?  Now, with that in mind, imagine that NFC is cellulose and bits are ink.  With only that change, how could you pass bits from one secure element directly to another?  

You are having a hard time with the obvious because your marketing and sales folks seem a little dense, ignore them.  Just close your eyes and pretend you have a bunch of NFC bits in your hand, ready to pass to your neighbor.  Focus on and, think, radio link layer, maybe? send and receive, maybe? Any of this ring a bell?

Think what happens when you ship 10,000 of these Trezor wallets and start getting calls, "How to I send cash from me to spouse?"  And your help desk has to talk about cash transfers that are not allowed to happen with wallets! Is you sales VP that stupid?

On the Trezor wallet, did those folks think that we use a USB plug to spend money?

I looked at the features.  Taking your Trezor wallet to Walmart did not seem to be one of them.  It is not a wallet, you idiots, that is a stationary vault and only works when plugged onto a PC having a USB port.  That is not a wallet, your VP of marketing is a liar and SOB.

Thursday, June 22, 2017

Block chain and the S&L pits

The savings and loans pits are not calling the block chain for each interest swap.  The block chain network would jam.

S&Ls for bitcoin are not currency issuers and must be backed by a bit error fund to remain zero bound.  So the pit boss has a bitcoin account on the block chain and all traders must check their bitcoins in to the pit boss on entering, and check their coins out when leaving the pit. The pit is secure, as secure as a hardware wallet and the pit boss runs an honest game.

Why would anyone leave their coins on the block chain instead of on account with the pit boss, utilizing the savings and loan function?  All of the side chains become savings and loan pits, I do not see any other way. Most of the activity on the block chain will be traditional savings and loaners checking in and out of the S&L pits.

But we can extend the concept. If you trust your S&L and it is well regarded by merchants, then keep the money on the pit boss address, it is as safe as your own address, then all the merchants can deal with the S&L and mostly skip any call to the block chain except for daily balances.

The block chain is really just an account balancing activity and need only happen once a day, week or month;depending upon the activity. Otherwise, keep it as pit boss money. Ledger services are there only to meet some smart contract or regtech condition of verifiability.  If no regulatory or contract is pending, just carry around pit boss money and spend it normally.

Make it the general rule.  All crypto coins are either issued from S&L or converted to S&L format, and shove the block chain completely up into the smart layer.  It is pretty clear the sandbox will not work without S&L functionality for pricing purposes, so let us just adopt S&L permanently on theoretical grounds as he main solution for congestion management.

Something clueless about this

My Patients Need Medicaid

My elecric car buyers need subsidies
My voters need right of free assembly in California
My grocery customers need need food stamps
My defense team needs weapons.

I am sometimes confused by the rhetorical stupidity of doctors.  

The correct method is to at least hand wave the concept that government can not do everything, then sort of weasel in there about how your thing is better than the other things.  Doctors don't get the concept, at least Kanosians do the handwave, then introduce their special thing about the third paragraph, not the title.

We already understand the problem

Cybersecurity is becoming a vital concern for the functioning of a modern economy. This column argues that the threat of cyber attacks should be tackled economy-wide, with economic policies aimed at overcoming the externalities and information asymmetries that lead to suboptimal protection choices on the part of private agents. There is an urgent need for an improved understanding of microeconomic mechanisms in the cybersecurity market, and for reliable data upon which policy design can be based.
We are encrypting cash, delivering tamper proof secure elements and pricing congestion in the money net,   We make it nearly impossible  to spoof pure cash and obsoleted the opportunity for HFT by going to asynchronous interest swaps. . Problem solved, everyone pay attention.

Getting serious about secession in California

California is restricting publicly funded travel to four more states because of recent laws that leaders here view as discriminatory against gay and transgender people.All totaled, California now bans most state-funded travel to eight states.The new additions to California’s restricted travel list are Texas, Alabama, Kentucky and South Dakota.
The eight states  banned don't  like us anyway, and another ten states would like to join the ban against California. 

Assuming no pension stampede

Projection: Chicago's police pension fund will be broke in 2021

It is a two way street when cops observe the limit and bail early. Let the loop do its pricing and we might end up in crisis by late 2018.

The ETH crash

An official post has been published on GDAX’s blog, stating “our initial investigations show no indication of wrongdoing or account takeovers. We understand this event can be frustrating for our customers. Our matching engine operated as intended throughout this event and trading with advanced features like margin always carries inherent risk.

Tradebook uncertainty is a very skewed distribution at the exchange.  

We have a matching engine vs some bot or human a few seconds to a few minutes away.  In a fair traded system, each trading bot should see the same uncertainty, which is certainly more like 5%, not 30%.  Hence, bot trading on margin would have acquired the liquidity or cancelled the debt before the trade executed.

All auto trading, only.  Otherwise the reaction times are over the map, you leave huge hedges during high volatility.  At the least, why didn't the trade bots have [rice bounds on their bid or ask?  Something is not though out here.

The spring break effect

The buyers' clubs

They pre-coordinate and create an artificial supply chain, sharing in gains to scale. 

They can be simulated, or activated, with specialized coins, or they can work with other coin issuers.  It is simple, really.  The beer drinkers will loan money for deliveries of a variety of beers to some region over some time period, a pit open to qualified beer producers.  The incentives do the rest, beer drinkers show up over the space and time and drink a variety of cheap brews from small breweries everywhere, while fishing in the boat.

The clubs are illiquid, bond to tight personal consumption contracts.  But the number of these clubs are enormous, they will pop up everywhere.  Retailers and suppliers will watch, sign up and discount. Clubs reduce flow jitter and pay for less spare capacity.

Mechanics of NGDP betting queues

My version has two queues, one to remove a bet and one to add a bet.  The trading bots are betting the mean value of NGDP when the pit boss declares mean to variance in spec and presses the bets.

In this scenario the even money bot is simple.  When it is your turn to remove, do so if your current bet is more than one tradebook uncertainty from the current mean.  Then on the add queue, bet the current mean. Your bot trader will always be within one tradebook uncertainty of inflation free cash.

This is a cascaded market structure ordered by  significance.  The congestion is ex post, in the payoffs. The central bank has to pay off some 6 billion betters and thus needs some digits stored around the world else the money network actually congests, like bitcoin does.  But payout ledger fees may be possible, ex post.  So here is always a quantization noise gap once the bets are pressed and the proper mean to variance will not appear again until the bets clear.

Finance, it just measures empty space in the basket brigade and charges us for it.

But they will capitulate to sandbox

Albert Edwards: "Citizens Will Soon Turn Their Rage Towards Central Bankers"

All parties know the new technology is here.

A better inflation survey

What was the largest price change?
-5 to 5 scale, percent

What product did you see this?
List he standard product accounts.

What was the second largest?

Two responses is enough. This is a much more accurate method of adjusting the price distribution.  It marks the flows that went just beyond bounds.

How do we estimate NGDP?

We are really good at measuring the implicit price deflator.  Another moment of the deja vu, the Hamilton two peak theory.

Example, you think a home appliance was a good deal this month.  Some time later you see another large price change in the same appliance. We linearize our two best looks, the recent peak deviations are remembered. Shannon-Nyquist applies, seeing something twice almost locks in a net present value.

The concept of optimum compression is to requantize when you see it 1 1/2 times.  That is why we compress the queues, queue size is advanced warning. the economy is optimum we we see fewer deja vus, they are actually inefficient and cause price locks.

They accumulage, they are like tiny quants of overflow or underflow.

Wednesday, June 21, 2017

Another way to bet NGDP in the pits

The problem with letting the BEA set the release period is that time periodic is a hedging opportunity, prohibited in pure cash.

In this type of bet, the value of NGDP is set when we (6 billion of us) all agree it is set, to some precision. Or, when the bets coalesce to a well rounded error function, then there is nothing more to say, the economy has spoke.  The economy speaks when a large representative sample has clicked the NGDP betting Icon and place bets, with direct transaction costs zero, fair access to the error surface, free entry and exit.

The pit boss is looking to find mean to variance meets the stated precision then it computes pay off by probability, or odds if you just take the finite bets and do direct convolutions without assuming a particular distribution. Time is gone, the moment is asynchronous when we agree.

How do 6 billion bet?

Spawn identical pits for the insignificant bet.  They still get the pay off odds, but they contribute less to NGDP. Queues of small and similar bets go off branch, look a side chain, have their own pit. Transactions costs almost zero.  Easy stuff.   If you specify a pit boss that tilts the table, no problem under fair access. An inflationary pit boss will pay out slightly more than is take in on bet compression. But fair access nd trade book uncertainty wienerizes the trend.

Government programs encourage concentration in cities

Many places in America are essentially devoid of doctors

Rural medicine will never have the economies  of scale obtained in LA.  Federal regulations is too complex and costly for  small rural hospitals.

The Dim Kim Son to learn golf

NEW DELHI, June 21 (Yonhap) -- North Korea's top envoy to India on Wednesday offered a conditional moratorium on his country's nuclear and missile tests in an apparent bid to hold talks with the United States.North Korea Ambassador to India Kye Chun-yong said Pyongyang is willing to talk in terms of freezing its nuclear and missile tests under certain circumstances."If our demands is met, we can negotiate in terms of the moratorium of such as weapons testing," Kye said in English in an interview posted on the website of India's television station WION.He suggested that one of the key demands is the halt of the U.S. joint military drills with South Korea, which Pyongyang denounced as a rehearsal for invasion. Seoul and Washington say their annual exercises are defensive in nature.

All good peace deals end with a Trump branded golf course. 

Has Da Blowsio even looked at the problem?

.Manhattan Institute.

New York City’s pension contributions stand at a near-record 11% of the city’s total budget—and 35% of payroll alone. They consume 17% of city tax revenues, double the average proportion of the 1990s and early 2000s. Increasingly, city pension costs crowd out spending on other public services while limiting options for tax relief. Indeed, New York’s annual pension contributions will soon displace social services as the second-largest spending category in the city budget, behind only education, consuming more than 80 cents of every dollar raised by the city’s personal income tax.

The time to act was years ago. NYC may  be on the unstoppable Chicago trajectory. 

Reckless endangerment resulting in death

Yanez, the cop, had police training and years of experience to guide him in a situation like that. Castile, the civilian, had nothing except his wits. Go watch the dashcam video and you’ll see it’s Castile who’s clearly the more nervous of the two when the encounter begins yet he behaves perfectly reasonably, volunteering to Yanez that he has a weapon. Obviously he’s trying to alert the cop to the fact that there’s a gun in the car for fear that Yanez will spot it on his own and panic. Then he tries to comply with Yanez’s command to present his license and registration and Yanez, unreasonably, panics anyway and starts pumping shots into him.

Involuntary manslaughter.

We get these issue all the time in Fresno, CA.  The problem is that frightened little shithead momma's boys make for cheap cops as they get this bizarre sense of masculinity.  

Betting on the periodically released NGDP numbers

NGDP betting is abet on the ex post discovery of NGDP vs RGDP, and the number to bet  is the BEA release once per quarter.  The problem is that this number becomes more accurate as the NGDP release date approaches and the bets will pile up much faster than the NGDP betting machine can organize hem.  The betting network becomes jammed and uncomputable in near time.

Hence, the NGFDP betting machne has to raise ledger fees, betting fees, as the release date approaches.  We get:

NGDPbet = NGDPmeasured - betting fees

The two terms on the right are random processes, mostly queuing processes.  Hence the number on the left will be a random process with variance equal to almost the sum of variances in the two terms on the right.  As a result the bet spread will be very broad, Ledger fee, on average, becomes large and flows to he betting machine.  The net result is that the central betting machine never is capable of targeting accurately, mostly orbiting in a large region around some poorly estimated fix point.

There are fixes, most of them involve eliminating feedback from the BEA and instead sending feedback back to the BEA, This is something we can get into, and the problem as always are time syncs that are easily hedged.

Dick 'deficits don't matter' Cheney, in the news

When you depend on government mandated entitlement slaves

And no chewing gum in class

Evergreen College President: Disruptive students will be given a stern warning

Why do election systems have web access points?

Current and former officials said in testimony before the congressional intelligence committees on Wednesday that Russian hackers infiltrated election systems in at least 21 states leading up to Election Day in a "well-planned, well-coordinated" campaign directed by Russian President Vladimir Putin.
If your election system  accessible via the web then we have one conclusion, you are an idiot. 

Multi-currency ForEx

European digital currency exchange Bitstamp rolled out Litecoin trading on Monday. The trading function will be accomplished by using trading pairs. It is paired with USD, EUR, and BTC. Now customers are able to effectively trade Litecoin via Bitstamp’s service. 

Now we have to automate the bid compression. I will be getting in to that, but it is symmetrical, congested flow, the pairs volatile at reversal events.

How to run a taxi company

Model the market cap for bitcoin

Investment Legend Bill Miller Still Bullish on Bitcoin

The bitcoin network hedges central banks.  There are about six central banks it hedges and at any given point about two of them will be herking and jerking.  Each of the herkies is a diversion of about 20 billion, and the bitcoiners have to push 40 billion, typically, before ledger fees jump.

Then go with a risk stock to flow of six.  It is ok because this is a managed congestion.  
6 * 40  = 240 billion bitcoin market cap.

Promarket talks sandbox

“The Blockchain Is Going to Revolutionize Central Banking and Monetary Policy”
A post from pro-markets about blockchain and central banking.  

I make some necessary corrections, but the main point is that block chain does not revolutionize central banking, but the sandbox, with spawn capability,  is Singularity 1.0 and will revolutionize society beyond our wildest imagination.
There is a ready-made solution to this. It’s sometimes called the narrowing of the banking system, where instead of branching out through fractional reserves and lending and re-lending the money, you would go directly against the government as a depositor and the whole system would be narrowed to just depositors and the government.
No, the sandbox does depositors and borrowers.  There is no special role for government. In fact no humans are allowed in pure cash at all, all interest charges are automatic, optimum and maximum entropy, meaning there will be no observably better deal without inside information.

As of 2008, you see that there’s been a barrier at zero. The government would have wished to pay lower interest rates, but the public can defeat a negative interest rate by just holding cash and putting it under the mattress. Cash yields zero. If you’re going to pay negative interest rates, everyone’s just going to hold cash. Not electronic money. With electronic money, they can just erase one percent of your balance every week, or whatever they feel they need to do.
No, with digital cash we can carry the stuff in our pockets using hardware wallet.  But, in fact, the stastics tell use that  negative earnings on depositys cas still surprise us.
If people have electronic accounts at the [central] bank, you can have regions targeted, demographics targeted. You could cut taxes to women, or to different ethnic groups, or to people over certain age, or whatever.
Governments can let central banks have this power today, and equally governments can prohibit it tomortrow. 
Privacy, again, becomes a big issue. If the government has everybody’s bank account right in front of them, it’s impossible to hide.
No, in the new system,  all citizens trade  anonymously and continuously using trading bots.  If government wants to track us down they have to wait until we buy a pizza then follow the pizza truck.
What about people who can’t use computers?
The cash card they hold will appear to be the most intelligent thing in the universe.  We will live an an automatic flow controlled inventory system in which then collective trading pits know more about trade than any group of humans,past, present of future.

Tuesday, June 20, 2017

And also keep Gavin Newsom out of office

Yup, and almost half of us supported Putin

Former Homeland Security Secretary Jeh Johnson said in a written statement that the Russian government, and by extension, its president Vladimir Putin, had "orchestrated cyberattacks" on the US "for the purpose of influencing our election – plain and simple."

Old folks have to work, not enough entitlement slaves

By Richard Eisenberg...June 20, 2017...9:19 a.m. ET
"“Genius clubs” to channel older workers’ talents. Mandatory retirement — at 80. A “dynamic” work/life path, instead of today’s linear path. The end of the expectation of rising pay as you age. Volunteering: the new status symbol. Unions for older workers. These are some of the fascinating forecasts I’ve just heard regarding the future of work for Americans over 50.
A job!  
That's not what I was told.  Nancy said I can have this idealic life of leisure and Magic Walrus provides my do-re-me. 

What if you are not sure?

Canada Passes Law Criminalizing Use Of Wrong Gender Pronouns

I propose the neutral gender pronoun, "thing".  

Just  say 'thing' and avoid arrest, as in, "Hey, thing, how's it hanging"; that avoids a trip in the patrol car.

Entitlement slaves in demand

I Need More Mexicans”: A Kansas Farmer’s Message To Trump

We cannot absorb and manage the number of slaves needed to correct the boomer coordination failure.  I suggest the Swamp take the same approach as Illinois.

Boneheads pushing Trump to a disaster

Hot Air, again:

Those skeptical of U.S. intervention in the Syrian civil war have long warned that it could escalate into a civilization-warping conflict between nuclear powers. But neither Vietnam nor Afghanistan nor Iraq nor Libya has persuaded today’s hawks to sufficiently weight the unintended consequences that plague all complex military interventions. And there are so many varieties of hawks that are urging action. The complexity of the civil war in Syria is underscored by the fact that the ascendant pro-war faction inside the Trump administration is composed of Iran hawks. According to reporters Kate Brannen, Dan De Luce and Paul McLeary at Just Security, antagonism toward Iran is causing two officials in the Trump White House to push for broadening the conflict, against the advice of officials at the Pentagon…

Sounds like Israeli agents in the NSC working Trump like a play thing. These same agents will drive the Swamp back into a 2008 style economic crash.

A formal declaration in Illinois

From the official in charge of making payments.

Accordingly, I must communicate to you at this time the full extent of our dire fiscal straits and the potential disruptions that we face in addressing even our most critical core responsibilities going forward into the new fiscal year. My Office has very serious concerns that, in the coming weeks, the State of Illinois will no longer be able to guarantee timely and predictable payments in a number of areas that we have to date managed (albeit with extreme difficulty) despite an unpaid bill backlog in excess of $15 billion and growing rapidly.

What do Blackrock customers really want?

Blackrock, one of the biggest investments banks, is going to autotrading bots:
The expansion of BlackRock's digital efforts comes as fund and wealth managers globally look to overhaul their distribution models amid tougher regulation, pressure on fees and the changing investment needs of a younger generation.
Patrick Olson, BlackRock's chief operating officer for Europe, the Middle East and Africa, and who will join Scalable's supervisory board, said the decision to invest came as investors increasingly wanted to access their holdings using technology.

"This trend is prompting strong demand from European financial institutions – including banks, insurers, wealth managers and advisory firms – for high-quality technology-enabled investment solutions," Olsen said.

Customers want fair traded pits which are not  subject to skimming by HFT.  Thus, Blackrock needs to get their wealth customers secure elements and a trading architecture built to Redneck Systems reference architecture. Fell free to utilize the trading systems defined by this blog and nothing is patentable, including the S&L bet compression algorithms.

As far as secure elemets, Blackrock needs to pester the hardware wallet vendors.

Nightmare in the Swamp

Hot Air:
A pair of top White House officials is pushing to broaden the war in Syria, viewing it as an opportunity to confront Iran and its proxy forces on the ground there, according to two sources familiar with the debate inside the Donald Trump administration.
A disaster in the making.  

All money is bearer cash in the sandbox

JP Koning of the Moneyness blog:
I don't want to pick on them too much, but all these authors are describing a particular implementation of central bank digital money: account-based digital money. There's an entirely different way to design a CBDC, as digital bearer tokens. My guess is that the authors omit this distinction because macroeconomists tend to abstract away from the differences between various types of money.
There is still confusion about sandbox and secure element.  If I have a secure element, then I do honest double entry accounting, and am tamper proof and can treat any money as bearer cash.

What is JP missing?

He fails to understand that digital money means you have a device in your hand.   We are making that device as secure as gold and as intelligent as a central banker (Janet, not Ben).  If you define money that needs a ledger service, fine, but the cash device in our hand can defer the ledger service and pass the cash around as the user decides,  The distinction of bearer cash is gone.

What are the basic requirements needed yo replace the entire global system with digital money?

Give everyone the secure element and make the thousand lines of code in the Redneck S&L trading pit open source. No one needs a ledger system in pure cash.  You need ledger systems when you bet time and space because you have to check that the digits have arrived at the time and space specified.  All that is in the smart layer.  Pure cash support ledger systems of all sorts, for whatever reason, but pure cash itself is ledgerless, and honest and tamper proof.

The Dim Kim Son seems a bit agitated

BEIJING — Chinese websites are censoring “Kim Fatty the Third,” a nickname widely used to disparage North Korean leader Kim Jong Un, after officials from his country reportedly conveyed their displeasure in a meeting with their Chinese counterparts.

He should go machine gun a general, that always helps. 

Hero of the sandbox

Sony’s Felica technology is behind many of the most popular contactless NFC smart cards. Already the de facto standard in Japan for commuter travel payments, Felica is being used at the point of sale, railway and air ticketing, as well as for University ID cards – to name a few. It was recently announced that bitcoin has been successfully integrated with Felica technology. Plans have been announced for each contactless smart card to include a bitcoin wallet that holds a private key on the card.

Monday, June 19, 2017

Vladimir has been busy

Russia is reportedly behind a disturbing number of assassinations outside its borders

Obama engaging in obstruction of justice

FOIA Request On Susan Rice's Unmaskings Rejected Because "Records Were Moved To Obama Library"

I am beginning to suspect the guy more and more.  
I gave him a break on Eric Holder being an anti-white racist, but the meeting on the tarmac, and now this.

Jerry Brown sends tax subsidies to China

Tesla Close to Agreeing on Plan for China Production Plant

The plot involves Elon hiding all that co2 output from his battery factory.  Jerry can fake it, the little browns get taxed into homelessness and teachers will have to forego some pensions,

Republican Communist Party watch

GOP defense spending battle delays Republican budget © Greg Nash Republicans on the House Budget Committee are talking about increasing defense spending beyond President Trump’s proposed $54 billion boost, which has led to an impasse between defense hawks and deficit hawks. 
 The fight has forced the committee to postpone the rollout of its 2018 budget resolution, a key element in moving forward President Trump’s legislative agenda. 
 The House GOP may have the opportunity to settle on a strategy when it meets for its weekly policy discussion this Wednesday, a meeting that will focus on budget and appropriations.
Rest assured, the helicopter will fly soon, 

Europe has a ghetto shortage

There’s also the fact that Germany, France, and Britain already have Islamic and immigrant ghettos that can incorporate — that is, hide — new migrants. The settlement of these migrants in Poland, Hungary, and the Czech Republic means the establishment of new ghettos, against the wishes of current residents and a crashing tsunami of public opinion.
Read more at:

The plot is to cram the muslim entitlement slaves into cramped ghettos making it easier to track the belt bombers, 

We do not have general prices rises, in general

This is the Obamacare premium hikes over fours years, about twice the rate of the implicit deflator.

Housing is about 4.5% a year, three times the implicit.  Hence the rest of the consumables are in general deflation.  The current banking system does not cause inflation except on generational regime changes.

What happens is a reversion to mean, the distribution goes back to a well rounded distribution.  Then the true inflationary costs of the 40 year monetary cycle are discovered, and marked to market.

I would worry about coordination failure, especially since my blogged is masked from the politicians and they remain clueless. However the central bankers are getting clues very fast and we have to rely on them to explain it to the politicians.

The yield curve still flat

One to Ten year spread is still less than a point.

The small spread means fewer baskets in the economy and the curve thus has too many spectral points.  Somewhere in that spread, the term structure will collapse in a contraction. We are all going to make fewer trips to the store and carry bigger baskets.  Already my corner grocer is feeling the pinch.  He has to carry some debt, and he now gets fewer but larger purchases over the month and cannot justify being a small store.

We are in California where small business is harassed by politicians.  But Illinois has already breeched, New York is under stress.   Beware the sudden rush to retire.  Texas will not be able to carry us through the next downturn.

Bummer since the ruskies are my tean

Just Super. Russia Will Treat US Planes Over Syria “As Targets” Now

Sorry Israel, but I decided to support Assad.  It seems our formal allies, the wahabi nutcases of Arabia, are out to belt bomb me, and I would prefer to set up a defense line against the deranged sunni sect.

No, Jeff's team reads my blog

Opinion: The big lesson from Amazon and Whole Foods: Disruptive competition comes out of nowhere

They are trying to patent and implement the Redneck architecture, including my long running series on banker bot.  They will soon attempt  to patent the optimum loan to deposit liquidity machine.  These nuts are a predictable as a can ob beans.

If you really want innovation, watch WalMart, they have been on my team from the beginning. And WalMart will kick their behind.

Why doesn't Kushner sue Comey and the FBI?

FBIdirector admitted he leaked sensitive information about Kushner in a way that NYT could create fake news.  Comey was head of the FBI, leaked the worthless information with reckless disregard. Comey should be sued, and Mueller named as partner in crime for after the fact cover up.

Understanding your own savings and loans in the sandbox

Your bot is operating in the S&L pit, and you have digits in and digits out.  For the pit boss, he takes the aggregate of deposits and aggregate of loans and sort matches, covering the loans with deposits.

So, if you need a loan, key he card for a round trip message to the pits, over any communication channel. Some pits let you just spend, and notify later. It depends on your contract, but your secure element, the pit boss and your token will sort that all out.

Depending upon the state of affairs, you loan can be hit multiple times with asynchronous, adjustable interest charges.  Your bot can handle it, just check in now and then.  Some of the pits are configured for long term adjustable, in the sense of a house mortgage, not a problem.

When should you borrow rather than pay cash?  Your secure element can keep you in the even money bet, just pay according to price.

Anglican counter attack

LONDON — Prime Minister Theresa May said the van ploughing into pedestrians near the Finsbury Park Mosque in North London is being treated as a "potential terrorist attack" by police. May will chair an emergency meeting later on Monday. 

Sunday, June 18, 2017



1. Not only is there no evidence that Trump personally colluded with Russians or ordered anyone to collude with Russians, there’s now evidence that he hasn’t been under personal investigation by the FBI. 2. There is absolutely zero available evidence that Jeff Sessions colluded with the Russians. 3. Similarly, there is so far no evidence that even Trump’s more unsavory aides – men like Paul Manafort and Michael Flynn — colluded to influence the election 4. To the extent that there is evidence of wrongdoing connected with a foreign power, it deals not with the election itself but rather with Flynn’s alleged failures to disclose foreign payments and contacts.
I have no idea what Mueller and his team hope to accomplish.
Something is bizarre in Swampland.

Evolution in action

Surge in Latino homeless population 'a whole new phenomenon' for Los Angeles

Now, he is part of a rising number of Latinos who are living homeless in Los Angeles. Recent figures released by the county show that Latino homelessness shot up by 63% in the past year, a staggering number in a county that saw its overall homeless population soar by 23%, despite increasing efforts to get people off the street.Nearly every demographic, including youth, families and veterans, showed increases in homelessness, but Latinos delivered one of the sharpest rises, adding more than 7,000 people to the surge.lA

Waiting for QE to clear

Meta stable says Deutsche bank.  This is the US gov, making interest payments and handing out COLAs.  It has just abut run out of available liquidity to borrow.

When judges rule the executive

Illinois State Official: "We Are In Massive Crisis Mode, This Is Not A False Alarm"

Illinois gov got hit with a bunch of contract rulings which force payments.  This has a name, bankruptcy.

Saturday, June 17, 2017

OS updates are a conspiracy

The new Windows 10 update has dumped the standard analog phone jack and the realtek driver no longer drives the headphones.

I knew they were going to fry something, Microsoft was in such a rush to upgrade.

Ubuntu performs the same stunt.  They insist you update, but you know that if you update then some standard technology will become obsolete. In Ubuntu's case, it was my serial mouse.

Not really

Roxanne Jones, CNN

She is an affirmative action appointee from a state that gets 1/30 of the senator that Montana gets.   That means her vote in the senate is essentially worthless, which is why we use senator appointments to fulfill our affirmative action quota out here.

It is not abut drone deliveries

Jeff wants Whole Foods because of the buyer's club effect that is coming soon.

Our personal, secure elements can down load the WalMart grocery list, and our smart phone application will set up all your WalMart buyer's club discounts to be maximized.  The green light points your way down prows of price beacons.

One could make food stamps obsolete because the distribution of choices is dense when transaction costs assumed zero. When the cost of discounting milk by date is zero, then most milk inventory will be allocated, and buying milk on the last day will be pennies to the nickel.

Most of the product minimizing is a pain in the ass, mathematically; huge set of graph searches.  But your phone or pc has the graphics and horse power. It knows about secure element and can prepare the optimum purchase list off line.

The geeks are doing this, and inventory costs are going to drop, a fair deflation.

The optimum S to L matcher

To understand the theory, consider a simplification. We have a loan queue and a deposit queue.  The pit boss wants to run down both queues and match S to L as best it van, making up the difference with created or destroyed money, the bit error.  In fact, this would work if all parties operated optimally in tyher sandbox.  Less than optimum matchers use less cycles and thus traders have more looks at the stack.

The optimum is to make two moving window Huffman encoders for each queue, but add in pit boss loan and deposit events to make both queues binary balanced twos complement trees.  Then you have a node by node match, the interest charges should be the path length times the aggregate ratio.

When the bit error exceeds bounds, the pit boss lengthens or shortens the Huffman window as need be.  All participants can traverse the tree, in turn or drop deposit and loan asynchronously.

How is sub optimum matching and red/gree connected?

The secure element uses the red/green indicator to warn when the pricing surface has a convcavity, and he should price around it .

This means, warn if you but two dozen eggs and forget the bacon.  If that happens, the coherence the two supply chains had altered, and you jumped, bought two dozen eggs thinking they were cheap compared to bacon.  Should have just bought the same, and watched one more time, then you price around the bend. Then find out later you only can eat half of much bacon as before.

But it is highly quantized, choices become locally limited so a sub optimum price in the pit still avoids jumping the shark.  Then you add in the buyers club effect where buyers coordinate to reduce supply chain volatility.

A lot of options for robotic pit bosses. Keep it simple as it can then be validated.

Fed liabilities

I think the term is a bit misleading as it describes loans outstanding minus deposits on account.   Most of that, except maybe 30%, is a shared liability between depositors and borrowers.   But the Fed has ledger prices it can raise.

The actual liabilities of Janet and her minions are their salaries, about 5-10 billion a year.  If they fail to make rent and salary, the judge will yell them to print up the do-re-me and meet contracts. So, Fed failure is a wind down, like anything else in no arbitrage cash.

Another way to account for the Fed is to take the 15 billion in its expenses and call that ledger fee and it comes to much less than 1/2% of spending, a very low amount since our ledger fees are currently about 2%.

The Fed can hold gains/loss on an accumulated basis and let it go negative.  Statistics of queue tell use that, we have queue in and queue out, at stability we can measure the likelihood to the one or the other queues expanding beyond variance bounds.  That is a prior contract,the Fed is bound to take gains or losses, and cannot be liable except for fraud.

What fraud? Secret conversations that set prices without an equally observable trade book, discretion.  If the Fed assumes discretion,  in favor of certain parties, then the liability hold to the party.  The Fed, via discretion, has created an imbalance in the loans to deposits, favoring government as the borrower.  That is fraud in the sandbox.

Friday, June 16, 2017

Secure elements fix this problem

Moneyness blog posts about the definition of currency:
All of this still has relevance today. Take the case of private cryptocurrencies and CBDC, or central bank digital currencies. Because law makers have not been very clear about their legal status, bitcoin and other forms of crypto don't have currency, at least not in the Macleodian sense of the term. This means that a storekeeper who accepts bitcoin (or a future Fedcoin) may also be taking on the liability to give said coins back if they are proven to be stolen. And this lack of currency-status can only handicap a cyptocoin's ability to freely circulate. 
I thought of bitcoin as currency once as I thought it could be stolen,   I was wrong, they cannot be cleanly stolen as spending the stolen coins reveals the spender on the block chain.

If I have a secure element and use coins having the null ledger service, then I can be defrauded out of the cryptocoins and they can be truly stolen, here is no ledger service for them to appear.  I cannot counterfeit, at least not without a huge investment; so coins are still conserved. A standard S&L an issue coins with the null ledger service.

The secure element has a specific design goal, simulate paper cash transfers exactly.