Which taxpayers cover the salaries?

November continued the annual trend that Breitbart California highlighted in September, which is of booming government employment and slow private sector employment. California’s government-heavy educational, health services, and social assistance sectors continue to grow at about 3 percent, while the private sector-heavy information technology and professional services sectors grew at less than 1 percent.

California imbalances were not discovered by Breitbart, they were discovered by looking at this chart:

 This chart shows the government sector in  California causing chaos in the US economy. The huge swings in unemployment result from rule by low IQ union members, and a legislature much less intelligent than that. If the US economy crashes, I would blame California legislatures.

And, if California does crash the economy, then Jerry Brown's legacy is destroyed, trash; he goes down as yet another Gavin Newsom bonehead.

Japan debt and Abenomics

Did Abe get government debt stabilized?
No, the debt is doing what it does, flatten at the end of the cycle, then take off after the American recession.

Scott Sumner wants to give Abe the credit, but Abe will be driving that debt up again, as soon as we get a slow down.

Just another NRA nut having sex with his phallic toy

Police in Houston say a man who had an AR-15 rifle, a shotgun, handgun, and ammunition in his hotel room on New Year's Eve had no intention to use them

Here he is, yet another dufas rural white with the NRA castration anxiety

Police as social worker

For the third year in a row, Baltimore, Md., has had more than 300 murders, reaching a new record of murders per number of residents in 2017. 
 Some residents attribute the high murder rate to relaxed police patrols in the city following high-profile cases of police brutality. Officers have backed off in neighborhoods, like the one where Freddie Gray was arrested. 
 The Rev. Kinji Scott, a pastor in Baltimore who's held positions in local city government, says the opposite needs to happen. "We wanted the police there," Scott says. "We wanted them engaged in the community. We didn't want them beating the hell out of us, we didn't want that." 
 He's among activists who are calling for police reform to reduce the violence in Baltimore and several other high-crime cities across the U.S. that he says haven't seen change. That change begins with a conversation between the communities directly involved, Scott says. 

"We need the front line police officers and we need the heart of the black community to step to the forefront of this discussion," he says. "And that's when we're going to see a decrease in crime."

The ghettos alternate between surviving adults who want  law and order, and the  unparented children who are cluelessly wandering the streets.  There is no cultural memory in the ghetto, they have no deja vu from generation to generation.

The Dim Kim is bluffing

(TOKYO) — North Korean leader Kim Jong Un said Monday the United States should be aware that his country’s nuclear forces are now a reality, not a threat. But he also struck a conciliatory tone in his annual New Year’s address, wishing success for the Winter Olympics set to begin in the South in February and suggesting the North may send a delegation to participate.

Beat the Ptess is dumber than a mushroom

Beat the Press is trying to tell us why Congress subsidizes Amazon:

There actually is a very simple explanation for the differing assessments. The Postal Service has a huge amount of fixed costs in the form of retiree benefits and especially retiree health benefits. Congress has required that the Postal Service prefund 75 years of retiree health benefits. This requirement sets the Postal Service apart from private businesses, who do little or no prefunding of retiree health benefits. It also accounts for almost all of the Postal Service's losses over the last decade.

Well, this must be a Dean Baker bonehead play.  He discovers that the Post Office has losses because it has high labor expenses.   That is exactly the point, why is Congress paying for Amazon labor? 

What a frggen idiot. His implication  is that it is OK to use taxpayer money and give it to Jeff Bozo.  That is like saying it is OK for Jerry Brown to take energy from efficient users and give it to inefficient users, which Dean certainly approves of. In  one case, Dean wants taxpayers to write huge checks to Elon, in another wants huge taxpayer checks to eff.

Somethings are just stupid, and Dean Baker can make shit up all he wants, but somethings are simply stupid.  Especially Dean telling poor folks to write large checks to wealthy folks.

Trump's new buddies in camel land

Saudi Prince Al Waleed bin Talal’s Ex-Wife Tells All: Orgies with Underage Girls, Drugs, Bangladeshi Children Traded as Sex Slaves

A quarter of the nation's homeless in California

It could hardly come as a surprise to anyone who travels around the state: the number of people who are homeless in California continues to rise at a steady clip. Every year, the federal Department of Housing and Urban Development releases a Point in Time count of the homeless population. This year that number reached nearly 554,000 — a 1 percent increase from last year, driven by the dramatic surge in West Coast cities.
 More than one-quarter of the total homeless population nationwide lives in California, roughly 114,000. The vast majority are “unsheltered” — a more bureaucratic term to describe the thousands living on the streets, under freeways and tucked into grassy fields and parks in cities all around the state. 
 “It’s certainly a bigger increase than we would have expected,” said Ben Metcalf, the director of the state’s Department of Housing and Community Development. “There’s a tale of different countries here: We’re seeing a real significant increase and much of the rest of the country is not. We’re all doing the same things, but here the rent is too damn high. We’ve seen an incredible increase in the cost of housing.”

California is warm and big. With 15% of the population, it holds 25% of the homeless.  Gavin Newsom wants to give all the homeless free medical care and charge  Texas for the service. 

See the problem?  California politicians have that Venezuela thing going.  Neither Texas, nor Florida, nor Illinois intend to pay to have all the homeless medically assisted in California. They will all send us the homeless, then ditch out on the payments.

Meanwhile, California will pay huge taxes to conform to the current Obamacare law.

Ether contracts can initialize accounts?

A hacker stole $31M of Ether — how it happened, and what it means for Ethereum

Hat Tip to Delong, he tracks this stuff and is an implicit sandbox supporter.

A contract, read escrow instructions, had a default method that re-initialized the contract account with new signatures!   Allowing bots to initialize accounts? Not allowed.  But more importantly, the macro codes that are part of contracts cannot loop, really, at all.  They should beck up the tree and try again until timeout, or some finite count.

Ripple did the right thing by being second in the escrow stuff.  They looked at ethereum and abstracted just the few critical synchronization functions needed, then kept their contracts limited to spanning tree without real loops. That is why they are willing to freeze accounts, the equivalent of a timeout, enforcing the contract to a known stable state.

It is all part of developing the sandbox, we expected these kinds of layer miscues. Not a big deal, the market will focus on one central escrow router to serve everyone on an ad hoc basis.

Facebook solicits comments by contract

California has leveled misdemeanor charges against 41-year-old Mark Feigin after he sent five anti-Muslim posts to the Islamic Center of Southern California’s (ICSC) Facebook page in 2016.
 The California Attorney General’s office argues that his comments constituted “repeated contact by means of an electronic communication device” with “intent to annoy or harass,” a misdemeanor under California law, Reason.com reported Friday. California courts are scheduled to begin the trial Jan. 2, according to court records. Feigin admitted in October 2016 that he wrote the following comments between Sept. 17 and 25 of the same year.

Whoever filed the suit has no idea what they  are arguing.  This implies that the California legislature will intervene in contracts between private agents, specifically restricting the speech people are allowed.

This is both pure ignorance in California, and a attempt at full secession.  This prosecution could not stand while California remains in the union, that is an impossibility. The Federal courts would jam completely.

Who filed?

Outr attorney general, of the delusional law club, where the current affirmative action senator came from; pure Sotomayor, an embarrassment and cause for expulsion from the union.  And, if you look at the guy's last name, you get racist, another of the Franciscan tradition, just ask the priest or get a license from the king.  The typical idiot generated by that bizarre legal tradition, pure Venezuela.  

California is getting four years of this crap from Gavin, the child molesting, next appointed governor of the state.

The Federal law and rights

It is like a blockchain.  When some California political dufas fucks up a right, we have a choice in the Swamp.  Either tax the frig out of California and let the violation slip. Or, make the correct ruling and California has a tantrum.  But if we let it  pass, do the Sotomayor, then the whole legal blockchain jams as that violation ripples into all the past rulings.

Escrow bots and ledger fees

Ledger services congest, hence any escrow bot needing a congested ledger service needs to auto-trade, it will have to obverse contract limitson  ledger fees, against its timeout.   At that point the escrow bot owns the asset, it has a valid wallet address. 

So, right now, today, we have auto-priced systems, we have the Ripple escrow bot trading with the Coinbase pit boss, nary a human around. Between Ripple and my shopkeeper, we are damn near full sandbox.

So, let us advance Ripple's bot so it can handle single party protocols, like IBM Watson generating protocol generators for hedging among multiple digital assets.  IBM Watson can register its protocol as a contract, and let old Ripople bot run the hedging system under timeout. Now we have Watson bot talking generators with Ripple bot talking generators with Coinbase bot. Can't get much more singular than that from version 1.0.

The most efficient cash transaction protocol invented

I and my local shopkeeper hold the record. But it is an experimental setting.  I ride my bike down the aisle and grab goodie. He notes the total and writes it in a tattered blue notebook. Once a week I clear accounts with tax cash.

Now, our monetary transaction fees are about a dime a year, my share of the cost of his tattered blue notebook, plus the register costs if he uses it as a calculator.

The thing is, his store has all the technology needed to exactly reproduce the system, cellulose to silicon, ink to digital pulses. Just give my ATM card intelligence and an NFC interface. I think I can drop the monetary transaction cost in half, a nickel a year, if the system become general cash.  The only thing the shop keep needs is an intelligent card, just like mine.

Why use pricing?

Our intelligent cards could count goods, as a simple escrow protocol.  But we still need and implicit coin, the goods have to be marked relative to each other in order to match in and out with proper congestion.  The shopkeeper remains a pit boss.  We need pit boss when we control congestion. In the current case, me and shopkeeper engage an escrow service once a week, or so, to clear my account in the pits, even though I trade daily. The "or so" is important, it is my inventory uncertainty in their household. I run a pit at home, he runs one at the store, we have a ledger service interface. When I clear accounts, I invoke Swift and my ATM fee is 1.5%. I want more shopkeeper and less Fed.

Take Tether, for example

Tether is he competitor to Fedcoin, which does not exist. Both are really escrow services, they swap the swift protocol for the block chain protocol, this makes it easier for escrow services that need to exchange digital assets.

But all the escrow services will need timeout, hence, after some finite, and small, series of transactions, the tether protocol is turned back into the swift system.  Thus, all tether wallets close the loop, their transaction history can be deleted from the block chain.  Ripple has the same feature Both of these coins exist simply because the swift system is a three party protocol and unnecessary.

If I am designing Fedcoin to compete, then I need a simple, finite blockchain, with the automatic delete function.  Since the procedure is only for escrow, only bots need own Fedcoin, timeout money, essentially.

What is missing everywhere?
The pit boss, the bot that can run the adaptive digital asset markets. The pit boss is the enemy if the perfect, iy gets everyone to the nearest approximation before the perfect can be computed.

The thing about escrow bots

First, the escrow function in the sand box becomes a standard monetary routing system. They will be everywhere, all of them linked to the verification system, thus being counterfeit proofed.

Second, it the exception that proves the rule about bots, if they own something, unattached to a human, then they have a timeout.  It is theoretically impossible for a bot to own an asset for an arbitrary time period, the timeout is needed in protocol theory to prevent lockup, from confused bots.

Oddly enough, the bot timeout is also the human insurance policy against Steve Hawkings fear of bots run amok. The system puts humans at the endpoints of protocol sequences,  bots in the middle. The bots always, everywhere needing a timeout, which is to say they cannot have indefinite loops in their protocol.

So, in the sandbox, just consider that any digital assets that need routing will be routed by the digital asset router.  The digital asset router (escrow bot) has a well known, and constant wallet address.

Pit bosses have the character of a timeout, they cannot accumulate coin in the bit error, indefinitely. But the pit boss maintains the generators which become probability protocols, and is simply the asynchronous version of the escrow bot, an escrow bot with approximate exchange prices.

Data science is mostly about interleaving sequences

Announcing the Berkeley Distinguished Lectures in Data Science

So, just call these folks, Sphere Packers Anonymous, and the site has some interesting reads.  I will go through it, wanting to see if they are getting close to auto traded systems.  These kinds of symposia are great for testing the state of science regarding Fintech, usually worth thumbing through if I am a Fintech. This paper, for instance:

Data-driven induction of critical timescales to improve the development of predictive models in the earth sciences

This author is doing the Google Alpha Zero problem, trying to  find the bridge between locally accurate models and globally unstable models. 

This is the chess game problem, the game rules are not a spanning tree without loops, chess loops the frig all over the place.  One needs larger windows to find the relative prime for these loops, separate and count their steps in chess terms. So the chess play is all about finding the relevant window sizes that need searching at various points of the board.  This author has a  job waiting at Giggles, could easily design a pit boss forus.

Goldman-Sachs likes the 2018 economy

Goldman Sees Crypto, Credit Shadowing Robust 2018 U.S. Economy

Using their method, they get a 2.6% growth rate for 2018,relative to our typical 2.1%.    If I use their method, and assume no requant, then I get about 2.3%, mostly a small boost late in 2018 from the tax reform.

The difference is mainly the costs hitting us in Q1, I think the hurricanes are a bit more costly than consensus, the tax adjustment will causer a bit of stall, and Obamacare costs unexpectedly high.

The difference is important when considering sustainability. The ten year cannot rise at 50-70 basis points next year without causing a stall in the Swamp, in housing and autos.

If we consider quantization effects, then we see that as the business cycle continues, the sequence of gains and losses becomes larger, window sizes grow, folks have to plan out a longer series of transactions.  Windows resizing means both shifts between borrower and depositor , and if we are expanding the sphere, the sizes grow by about 1.5.  We reach the impossibility point, and we requant, shifting transactions across the boundary until we have the closest match to an irrational bit error a the currency issuer, and we can do not better.

California will have to shift their education and medial systems around quite a bit, rather chaotically and we do not have the liquidity, the second derivative. We will stall out here, and we want to keep Jerry alert for some quick actions.

Trump, himself, stole the e mails from Hillary?

Nick Ackerman, a former Watergate prosecutor, said Saturday that the big issue in special counsel Robert Mueller investigation is not whether the Trump campaign coordinated with Russia, but whether it conspired to steal emails from prominent figures in the Democratic Party.

If Mueller intends to prove Trump conspired to steal the e mails, then Mueller is going to prove that Trump, himself, participated in the theft.    How exactly would Trump engage in computer theft?

If it was a Russian government job, then there is no possible way Trump could have contributed.  Mueller must prove that Trump knew the hacker before the hack.

Weeks before the Wikileaks emails, the Russians had been shopping the dirt with a bunch of Trump underlings.  If Trump was aware of the theft a year earlier, then he is a pretty cool criminal for keeping his mouth shut, and that is not Trump.

Politically correct FX exchange

The central banks defined a set of proper behavior for users of the FX exchange system.  Their goals sound a lot like bitcoin, except the politically correct.

The purpose of the Global Code is to promote a robust, fair, liquid, open, and appropriately transparent market in which a diverse set of Market Participants, supported by resilient infrastructure, are able to confidently and effectively transact at competitive prices that reflect available market information and in a manner that conforms to acceptable standards of behaviour.

This is mostly about large transfers between fiats, exactly what bitcoin was designed to do.

Rich get richer when we drive up government debt

Plain and simple.  Yet our socialist masters think we will inflate all that wealth away.

Free, free at last

Police in Iran’s capital said Thursday they will no longer arrest women for failing to observe the Islamic dress code in place since the 1979 revolution.

No longer forced  to  wear the tent.  

Counterfeiting the Byzantine Generals

Blockchain solves he fault tolerance problem described below.  All parties have to reach a consensus,  or at least majority rule.  Any party must its consistent conclusion to all other patites, else it is sending two different messages and cheating.  Two different messages is called double spending.

So that is blockchain, getting all the iners to agree on which of multiple spending messages is selected.

A group of generals, each commanding a portion of the Byzantine army, encircle a city. These generals wish to formulate a plan for attacking the city. In its simplest form, the generals must only decide whether to attack or retreat. Some generals may prefer to attack, while others prefer to retreat. The important thing is that every general agrees on a common decision, for a halfhearted attack by a few generals would become a rout and be worse than a coordinated attack or a coordinated retreat.

How does counterfeit proofing the general help?

The counterfeit proofing requires the cost of counterfeit to be high, and the gaim low. Then we allow that theledger services is not called immediately, paper cash, for example, can float around for a number of transactions before it ends up in a bank where counterfeit losses are take.

What does it better?

It is a continuum.  Blockchain wants immediate clearance, but we pay a price in congestion.  The price we pay the miners is much more than the losses from counterfeit incurred in small transactions. 

In watermarked paper or digits, the cash is generally accepted for consumption, but eventually moves into the account managed by the coin issuer, who then detects double spends.  The cash card is disqualified.

But cass cards, and paper cash, can be  counterfeit difficult. The cheater must invest up front, then carefully laundry the fake digits such that they do not immediately end  up on account. 

The system works well for paper cash, and counterfeiting can be made much more difficult as we moved to watermarked cash exchange. Just adding a passcode means he counterfeiter needs cooperation from the card owner. Or, with biometrics, a featured biometric value helps select the secret key.

Cowardly Persians scaredy poo of Mecca

 Persian 'hardliners' and the bearded religious psychos. I would be embarrassed to be Iranian.

TEHRAN, Iran (AP) — Iranian hard-liners rallied Saturday to support the country’s supreme leader and clerically overseen government as spontaneous protests sparked by anger over the country’s ailing economy roiled major cities in the Islamic Republic.The demonstrations, commemorating a mass 2009 pro-government rally challenging those who rejected the re-election of hard-line President Mahmoud Ahmadinejad amid fraud allegations, had been scheduled weeks earlier.

If Ripple has an escrow bot then it can make a pit boss

Ripple is functionally an escrow machine, hence it has a bot that implicitly owns digital assets for a fixed time. So, Ripple need only develop a pit boss code and it can run an S&L pit for its clients, who can dipin to the pit as needed to reduce contract volatility. Make it a short windows pit, let the pit boss run with volatile short term interest charges.  Then, Ripple could agree, under contract, to release the escrowed coins under a bit error process, deliberate, bettable inflation.

Our escrow machine is in operation!

On the 7th of December, Ripple announced that it had successfully locked up 55 billion XRP via a “cryptographically secured escrow account”. Ripple originally published its intention to conduct the lockup in May, stating that “By securing the lion’s share of our XRP, investors can now mathematically verify the maximum supply of XRP that can enter the market.”

Fro a public company, it is easy, you get your ass sued for fraud if you violate the escrow.

But, otherwise, how is it done technically? Your escrow machine is a robot wallet whose function is guaranteed by Intel.   But we can duplicate the Intel function is we can make out machine tamper proof.

An escrow machine is a protected code that executes simple contracts and can own digital assets. It always has a timeout on contracts.

Rational approximation

Let us consider this equation.

(r+e)^2 - (r-e)^2 = 1

Solving this we find that r = 1/e, this is the hyperbolic system.  It is really a condition on indexing, the area between the two concentric circles must be on, we are indexing circular rings.

The solutions r with asymmetric error, 1/r are also satisfied with the rational fibonacci ratios. And the sequence of fibonacci ratios makes the 'estimate' of r become increasingly irrational until r become, in the limit, Phi, the most irrational number of all.

What does this have to do with banking?

The banker is receiving two sequences, overs and unders; moments when agents realize they have enough, or not enough and cause liquidity events, mainly dumping digits back to the banker of taking them from the banker.  I think the banker needs only do the subtraction, two independent sequences are squared products because the agents have been packing sphere.

The banker wants his window of  deposits to be about 1.5 times his window of loans. Window meaning number of transactions before the expected repeat sequence of some rational approximation.  In  other words, the pit boss is using index arithmetic, just divying up the spots in the generator that balances loans and deposits.  Once the banker has the proper window sizes, the banker can enter market maker, small loans or deposits, to fill in space, equivalent to making their generators isomorphic. Then, the interest charges should force the closest match that generates irrational bit error sequence.

Keeping the Roy Moores out of Tehran

More and more folks are getting pissed at the religious psychos, whether they are from Alabama or from  the mosques of Iran. 

Anti-government demonstrations that began in one city on Thursday have now spread to several major cities in Iran.Large numbers reportedly turned out in Rasht, in the north, and Kermanshah, in the west, with smaller protests in Isfahan, Hamadan and elsewhere.The protests began against rising prices but have spiralled into a general outcry against clerical rule and government policies.

The kanosians call it stimulus

Trump targets Amazon in call for higher postal rates

I call it Koch  socialism, the idea that government should have monopoly control of money and use that control as monopoly insurance.  Trump can't figure out his socialism from Hillary's socialism,. How can he be president if he doesn't have one form of socialism or the other.

Inflation adjustments anyone?

If they are adjusting for inflation, then they will adjust for deflation.

Here is a bit of a problem. A lot of the pensions, most, have inflation adjustments, but no deflation adjustments.

States rights, sectionalism is back

NY Gov Rips Trump Tax Bill: "Let's Pillage The Blue To Give To The Red"

The old Democrat is back again, trying to preserve entitlement slavery.

A simple escrow wallet

I propose a single point escrow wallet account, it can take your funds, at your request, and it owns your funds until some contract is complete or a timeout occurs.

The escrow promise is legally enforceable,  Participating users can submit a contract specification in the specified grammar, along with the cash remit.  The escrow wallet account publishes the contract terms on  its public blockchain, then transfers the money to escrow wallet account.  Any other user participating in the contract can then observe the rules of exchange, and give the signing signature to release some digital asset, possibly another coin. Thus the contract is completed, and revealed on the public chain, users have their goodies.

We can see it is hard to cheat the escrow wallet account, especially if users pay an insurance fee.  The wallet can cheat us, but after the wallet has a public list of hundreds of happy escrow users, folks will trust it.  But,more importantly, the escrow wallet runs a simple protocol langue interpreter, easily inspected, and check summed by the server  kernel.

This idea is barebones smart contract with no assumption about the type of ledger services or securities traded. It has no native ledger system of its own except the published record of past contract terms.  This is a simple, third party system, easily protected, autonomous and can get us across ledger services.

No coin needed, but the system needs an external hook so new digital asset definitions can be adapted to the contracts.  Fake digital assets is the hacker door, the one we watch. But the contract machine, itself, is easily protected. So, it will run forever and honestly for the most basic=, standard exchange protocols.

If the escrow wallet is standardized, (the protocol language gets accepted), then in the sandbox we give them a known address and spread them around. They are a utility, like URL look up router. They route contracts between ledger services.

Almost the same game plan in 2018

The central gamer is to avoid blue in Q1 of the New Year.  Q1 one at zero does not a blue bar make.

Big things to watch:

• California stumble, cross your fingers and wish Jerry good health.
• Natural disaster cost, expect to write off a third of GDP growth.
• Tax season,  a one third of GDP growth in accounting costs this time of year.
• Tax volatility.  Watch another one third of income get moved around in uncertain ways due to the tax law
• Higher Obamacare taxes
• Congress fails resolutely to continue because of high interest charges.
• And pension stampedes.

Understanding Ripple tokens

They are currently designed as almost fixed rate bearer token for block chain ledger services.  All the  ledger contract timeout, at which point the ripple bearer tokens are traded back to some cash, the Ripple coin having a lifetime congruent with the transaction interval.  Ripple is a tick tock ledger step service.


The pit boss risk is as low as the transaction times, about a tenth of a second.  The ledger proof is consensus, a consortia of big banks and institutions run the miner pool.

Why the coin?, a  utility, and little more.  No one is packing sphere with ripple coin, well, not much of a sphere.

It seems the Ripple board runs coin issuance like a stock, committing legally to restrictions and escrow, liable in court.  Ripple is competing with Swift, as does Bitcoin.    Ripple labs is a good company, for what it does.

Ripple can;t handle congestion. When Ripple or Swift hit turbulence, the member banks take a taxi and visit Janet. When Bitcoin hits turbulence, fees rise.

Ripple, thus, imposes a time clock.  As the auto pits become widely deployed, the trading bots will trade, even that short timeout on Ripple's coin.  Some pits will offer the Ripple consortia the opportunity to loan out their Ripple, out of the Ripple ledger and into a Redneck trading at its most naked. 

But Ripple can legally change their issuance, with enough warning to its consortia, and make the Ripple coin into a full bearer digital note with no real timeout. Then its consortia members can trade it raw, against any of the registered  digital securities, including other bearer notes.

Price vs ledger fees, block chain edition

I am looking at a collection of iners and a collection of customer transactions.  The two together are going through a discovery process, finding the proper application that mids stable in transaction size and fee.

I cannot see a solution where that transaction fee is stable except at a price an order of magnitude lower. 

But, and here is the but.  We do not know how the sandbox stadium will fill, and if another blockchain variant captured the smaller transactions, then bitcoin has room to stay a bit higher than this chart indicates. It will have a trading pit balancing the two and keeping them both with stable fees.

Blockrock and rates

The real story behind low interest rates

According to the Blackrock blog, we have a 30 year history of sovereign financial disaster that has caused us to save more fiat, to buy the dips.  Starting with China, but picking up in Europe, everyone saved the fiat to prepare for the crash.

I think this is mostly correct.  But, it is a spiral, because of central imbalances, mostly everywhere.  Government, especially Chinese Commies and US-European entitled need to mark to market a bit more often, rather than increase the window of integration.

All employees, California, 3 month change, BEA series

Three month change, after seasonal adjustment.

What we see is this dip recently where California had no job additions.

Is that dip a trend?  Absolutely, this is a cycle, as we can all see looking 20 years back.  California has passed its peak employment for the cycle and is on down trend, obvious.  Do not let some economist tell you, "this time is different".

If we judge by the  increasing dip, then we should expect a much bigger drop during the scheduled recession. Thus using the BEA series, I can say,"This time is much worse".

The pension stress is greater, the number of municipals which have already frozen employment is greater than the last cycle.  We likely will have three cities, like Stockton, declaring bankruptcy, or going through arbitration.

Also, California population stabilized some years ago, we are noo getting new business.

Plus, most California school districts went on a corruption inspired building binge and are now facing much higher interest charges.

Then, adding insult to injury, we have had four or five tax hikes up and down government. Gasoline taxes up three timers, and each time the inflation adjusted payments to unions cause a downward shift in energy efficiency, driving business out.

Now, the one person who  could get the behemoth through is retiring, and we are facing the appointed governor, Gavin  Newsom, undoubtedly a complete disaster and instant bankruptcy.

Beating the counterfeiters

In the sandbox we use the same principle used for paper.  We make the cost of reverse engineering and reproduction significant, such that out of band industrial activity is noticeable.  Then we know that ultimately enough search locates the counterfeit source.

In secure cash card, we have a parameter called cash limit for typical consumers. This limits the transaction size and makes counterfeit flows difficult to conceal. The reverse engineering process requires high cost silicon wafer readers which have to sort through the maze of key masking inserted to defeat, an expensive industrial activity

But the best part of protection is the verification request, back to the foundry.   Every network keeps a constant address to reach the chip foundries which can verify a local processor.  The foundries expect a reasonable flow of verification requests, likely to match the use of the wellets.  They will notice, right away, when their expectations are wrong.  This leads to the active cyber patrol.  The occasional reading of the trade books looking for flows not really cyber verified all that much. 

The cyber cops make our secure cards do their security duty. Remember the foundries, themselves,ultimately insure against counterfeit.

Spending from the top of the block chain

The original miners who own large bulks of bitcoin, they don't spend it.  The block chain is an expanding spanning tree, but will evolve to become more compact.  Hence, when  the bigger owners spend, they drive up congestion and complexity as they move large bulks.

Driving up congestion fees drives out the small transactions, the small players become segmented in the queue and stuck for long periods. We can generate a corresponding yield over time by noting the wait times per transaction fee.  In the balanced arrangement, a lot of transactions cross the border between cost justified or not.

There should be an upper and lower bound on value transferred that keeps congestion fees stable.    Like any other random network, if there is a structured generator,  there is quantization and bounds. The general network gets pruned, and soon the block chain fits a niche,as a generator.  All the block chains currencies, matching the shape of the tree to ultimately  generate the spread of values transferred.

Pure cash, digital bearer notes, do it better.   Take Coinbase, for example, a giant dark pool.  coinbase need only issue bearer notes in each of the coins they trade.  Users check in their bitcoins cna check out coinbase bearer notes, identified for that currency.  Then traders are free to trade from account to account without calling any ledger service, Coinbase guarantees the exchange protocols to be cash 'safe'.

Coinbase only incurs the banker problem, suddenly everyone wants to exit Coinbase can cash out via the ledger.  Coinbase and the users cause huge ledger fee risk. No problem, Coinbase tacks on its own ledger fee,or rather a bearer note tax, and uses that to induce exits and induce entries.  Then Coinbase is just remarketing all the various public blockchain coins, helping users find the various niches they fit into, and balances out the ledger queues.

Putting Nick Rowe's theory to the test

China launches apple futures

Nick Rowe, the banking economist has the world full of apple buyers, sellers and importers, at times. Now we have the real version of his model, he will have to do oranges, instead.

An intermediate tool for the Fed

In Swift vs Bitcoin, it looks like bitcoin is going to win. Time for plan B. I suggest the Fed issue digital bearer notes, of high denomination, for direct cash transactions within anonymous dark pools.

If the dark pool can secure transaction, according to Fed requirements,then they can directly exchange Fed bearer notes, and subdivisions of these notes, among the dark pool members.

In other words, enable spontaneous sand boxes in fintech. Then the central banks can balance the dark pools with Swift,  I am allowing dark pools to manage the ledger queue, price it, and thus the pools operate closer to the indifference axis, the ledger queue size drops way down, Swift, a two stepper,  works just fine, in tht case.

Mormans do it better

Interesting point from Kevin Drum

He notes:

If you’re wondering why the PE usually spikes upward during a recession, it’s because earnings crater faster than stock prices. When the denominator goes down, the PE goes up.


We do not have a real inverse in the economy. 

Instead of an inverse, we have rotting junk piles.

Loud mouth real estate developers sell hotel rooms

A Tablet investigation using public sources to trace the evolution of the now-famous dossier suggests that central elements of the Russiagate scandal emerged not from the British ex-spy Christopher Steele’s top-secret “sources” in the Russian government—which are unlikely to exist separate from Russian government control—but from a series of stories that Fusion GPS co-founder Glenn Simpson and his wife Mary Jacoby co-wrote for The Wall Street Journal well before Fusion GPS existed, and Donald Trump was simply another loud-mouthed Manhattan real estate millionaire.

My point. Trump was a conspiracy to sell hotel rooms,  covered by a fake presidential run. He accidently won. 

Trump had Putin and the Oligarchs by the short hairs, he was going to lose and while closing on the sales generated in the fraud. We got the president we wanted, an accidental outsider.

Model consisent subdivision of index space

Recalculating time

From Thoma's site again, the folks at MIT are doing another form of  Markov sphere packing.  If a series of overlapping measurement are taken at the surface, then how would index space divide up the volume. The 'how'is the recursive algorithm that derives time as a recursive algorithm over rational approximators.

Functional approximation of shocks

In this paper, we relax the assumption of symmetric government spending multipliers using a novel econometric procedure —Functional Approximation of Impulse Responses (FAIR)— that consists of directly modeling and estimating the economy’s impulse responses to structural shocks.

I barely read this one from Mark Thoma's site. 

The idea is that the shock effects have a rational approximation that adapts through the recession sequence.    This is akin to the relaxed assumption in the Napier-Stokes, trying to determine if the motion inside a volume is unique, by measuring expansion and contraction at the surface.

If one can construct rational approximators in run time, then one can compute a ratio, the government multiplier.  This is possible because index space and functional space are isomorphisms of same fraction, within a bound error.

They find that automatic stabilizers work during the crash.  Basically we want G to jump up to a Pell configuration on the Markov tree and just 'time synch' the workers through the worst part. 

The effect allows index space to rehire intermediaries to sort out the labor market. Then, after the intermediaries have a process,  government can drop down to the  bottom triple in the tree.

Unit cost of a central banker hedge

Whoever needs to price bitcoin.

Btc/hedge, as in one Btc for each unit of yuan perturbation by the PBOC.  So we have a ledger system that records the amount of local currency held in escrow until the central banker reverses the play.

The central banker sets terms, the insiders know time to completion. We are, in essence, back to the Napier-Stokes flow problem.  The central banker introduced unobservable mark to  market when it sets rates. Bitcoin is the shortest path to market for insiders.  Btc is likely to follow the shortest, unique path. Btc implicitly sets time to completion such that the index space subdivides with uniformly reducing bit error. Btc thus forces the central bank to stay within error bounds. 

Because Btc is the shortest protocol, it become the ledger system for a set of central bank dark pools, balancing the expansion or contraction of dark pools kn a Nash equilibrium. Dynamically, the CVB makes a move. Btc responds first. The CB obseres Btc and marks to market using the Swift two step ledger. 

From the CB point of view, Btc is a central baker bearer note, good around the world. So, Btc has won its niche, I keep saying. The niche is that balance between transaction size and congestion, the blockchain the miners  and Btc found the sweet spot.

They are not doing the full hundred million

Fighting terrorism is now morphing into clamping down on human migration, as far as the European Union is concerned. 
 France’s President Emmanuel Macron is leading the charge, claiming at a conference in Paris last week that terrorism and human trafficking are part of the same problem, requiring the deployment of a military force spread across Africa. 

European women are not that horny. 

Chip debit cards reduce fraud

I forget the reference, on a payments web site likely.
I don't know why. The protocol is the same as with magnetic strip, except more information can be held in the chip. The most likely cause is that POS terminals got upgraded. The new terminals have you hold the card in place that it can access it twice.  I dunno what' going on, but fraud is down.

Obamacare taxes kill millennials

The story of modern life has been one of people enjoying better health and living longer. In the United States, life expectancy at birth has inched up almost every year over the past half century, going from under 70 years in 1963 to nearly 79 years in 2014. But the progress that once seemed automatic has stopped. Last year, for the second consecutive year, life expectancy declined. 
 This is not because of a surge in heart attacks among retirees. In fact, life expectancy at age 65 rose a bit in 2016. The overall decline stems from an increase in the death rate among younger people. In the 15-24 age group, mortality rose by almost 8 percent; among those 25-34, it jumped by more than 10 percent. Only among seniors did the death rate decline.

Weak solutions to flow equations

Some exflow conditions exciting work on  continuous equations of two sided flow. Relates to what we do, I read a bit, and the proof seems to be analogous with sandbox. They deal with non compressible fluids. We don't.


Does the new proof use rational approximation, tending toward the limit? Yes, in a way that we might do with generators that have increasing rank.  As rank increases, is there systematic decrease in bit error. A systematic decrease means a minimum path, making the series of generator changes unique.

Time, in this case, is a recursive algorithm that systematically subdivides index space. That would be a polynomial that follows the current index space and can be systematically morphed into another polynomial which increasingly subdivides indices. Look at the equivalent polynomial that tracks the path of bit error as rank increases, see if that polynomial blows up. If not, your recursive algorithm is working.

Now this is the part where I decide, does it matter? Yes, kind of interesting. But I am not the pro,  I went as far as reviewing the Napier-Stokes, and understanding this as yet another sphere packing where we relate actions in a volume to measurements on the surface.  Now and then I will thumb through the proof, mainly top find ideas to steal, for us sandboxers.

It is that extra, variable carrying cost in labor markets

Intermediaries hold inside information for both hired and hiring. It us costly. The market, otherwise, is  rational approximation, a finite rank generator. Thus, over the business cycle, the labor market gains structure, and the intermediaries are dismissed. Labor structure suddenly gets sticky, it actually gets Shannon locked in one of the Pell number pits. We think labor bracket are forever fixed, but uderneath n one is managing inside information.

So, we get this explosive lay-off sequence when we need t break the quant due to imbalance.  The unemployment rate jumps, suddenly, as we hire all the intermediaries back.    We don't like intermediaries in labor, we alway try and structure them away, like signalling as Caplan would say.

The solution is a  protocol based system of revealing anonymous abstracts of hidden information. Thus we increase the productivity if the intermediary process such hat we are stable three color.

California pension stampede

But unemployment is 4.9%, and wavering, to be sure.

So, should the employment to population ratio start dropping, as in he chart on the left?

Not in California if we are at peak boomer retirement. And this bodes ill since it forces the state to collect capital gains taxes, far to erratic to make those pension payments.

Mathematically, that large number of retireereoreent a high rank generator, thus having low bit error. If you want balance, the retirees have to be matched by a high rank stream of labor tax, the employers work the chaos in between.
Do the constrained in index space, your total transaction size per complete sequence is the sum of your windows on worker, retiree, and employer.  Do it with Markov processes or do it with a deterministically with cubic root solution.

In either case, worker and retiree have to be much more symmetric about some algebra.  Or, saying it therwise, the conceot iof worker/.retiree must be a good approximator.

Housing the singularity

Cheap electricity, cold weather provide 'huge marketing opportunity' for Manitoba to attract bitcoin 'miners'

The central banker is stuck

We have this likely true assumption, we are all Markovian sphere packers.with that assumption, the mathematicians can take us from rational approximation theory, via rational generators with irrational error, which gives us an index algebra and that implies a condition on, N, the total number of transactions in a central bank three color pit.

Hence, we have the central back solution to the sandbox, but it implies that all parties, all 6 billion, get a fast and almost equal, transaction step.  True under both paper and digital, all agents have to have access to the bearer note, cash, a one step protocol.

We have to have the intelligent, secure cash card.  Configurable to trade multiple, types of protected tokens. Along with the automated pits.That comes  at least a billion hardware wallets, and soon.

Rednek partner: Swift is insanity, avoid it like the plague

Buffett partner Charlie Munger says bitcoin is ‘total insanity,’ avoid it ‘like the plague’

Bitcoin remains the shortest path to FX transfer, do not be fooled by its low transaction rates. Bitcoin is still a one step protocol, and beats Swift, Munger's favorite socialist clearing system.  Swift is a two step through the protocol, it has a to call Janet in the protocol tree.  Blockchains will beat that.

We are headed to a world of dark pools interconnected via the bitcoin FX tool. In this world, we all can get our existing bitcoin wallets and bet the dark pools. The central banks will not like this.

But Charlie is one of the biggest dark pools.  He likes Swift and the implied currency insurance, born by the typical taxpayer.  He is a Koch socialist.

Ten year remains below 2.5%

I noticed it hit the 2.5 barrier and fall back, twice.

The linear drop in the ten year yield over five recessions since 1980, that was won with blood, it is a long streak.  Don't need to be economists to figure this one out.

Tax reform was about scattering before the next recession, which we want to be mild. The long term gains from the corporate tax reduction is two recessions away, all the tax planner know this.

Who is planning out that long? Any of us plan on moving up the Markov Tree? The sandbox can, but it will isolate the indifference point needed so the budget tends to reduce its deficit, an unpleasant thought.

All of this is well known and discussed consensus on Wall Street, we will have to automate the trading system.

How to deal with time bets, in the pits

Futures contracts are all protocols that time out. 

Some parties agree to sell a security in 10 working days, other parties agree to buy.  The contracts are all on the buy and sell queues, and then ten day queues are organized as compact distributions. But securities are not cash,

The queue of ten day contracts becomes he queue of nine day, then eight and so on.  Each day, at a specific time, the pit boss applies interest charges.  The charges are gains to the smaller window, buy or sell.  We want the quantity bought or sold to match, to reduce pit boss tisk.

At the end of ten days, if this is done right, we should have an indifference point, one remaining party on each side with price difference equal to the one day rate, which would be almost zero. The relative rates of change being nearly zero, equilibrium.

Who is packing sphere? The company itself. The more surplus it produces allows it to buy at a future high rice, generating interest income. 

It almost works except for the jamming, right before morning when the pit boss clears the days interest charges.  Agents were not bound to a transaction rate, so agents could manipulate time to completion by suddenly showing up with their bets a millisec before the clearing event.  These bets would undoubtedly favor one side or the other, forcing the pit boss into a large market making risk.

We cannot be time stationary.  But the pitboss can impose a variable transaction fee, which it collects designed to force the bets to spread out.  Thus, the traders are now back to asynchronous and adaptable interest charges, and we can get a fair estimate of time rate of growth for the company, 

The transaction fee is a time insurance payment, forcing parties to maintain a stable queue. It is insurance against time plotters.

How could Walmart use bitcoin?

Give their customers a free bitcoin account (web wallet) on the Walmart server, no double spending allowed, like a normal bank account with no automatic overdraft.

Walmart runs a miner node, but any spending from the wallet to Walmart are held in escrow, not cleared on the blockchain immediately.  Any other spending is celeared in run time with the regular public block chain.

Whenever the bitcoin transactions to Walmart fill a complete block, it is optimally packed, and Walmart submits it to the public block chain.  This is equivalent to a branded custodial bitcoin.

But,but...

That means Walmart has secure elements in its server. Bu Walmart sells hardware walleys, why not cutnoaste that code on the server into the hardware wallets, do it in cooperation with Trezor.

Then, anyone can be a custodial bitcoin holder, spend them all you want your cash card knows not to double soed and any holder of bitcoin transactions can submit them to the block chain at their leisure.  

So, the customers spend merchants collect up to a week or  month of transactions with deferred calls to the ledger. When they have a batch of transactions, they get a cut rate deal from the regular miners, they are already partially packed.

Become used car salesmen

Subprime Auto Defaults Are Soaring, and PE Firms Have No Way Out

I always thought they knew the exit, sell the repossessed car, except many of these cars are flooded.

The storage costs on bitcoin

Parts of the blockchain from the past get rewritten as transactions ‘complete’. 

If folks are using bitcoin fr Christmas spending at Walmart, The transaction path will end up agglomerated at WalMart addresses. Some blocks with a lot of recent Walmart activity may get re-written, say after the winter sale, when all the money is collected. This is the part about reducing empty space in existing blocks by repacking valid blocks, it comes under the moniker orphan block in the literature. The effort of repacking old blocks goes down exponentially as transactions complete, the upper blocks become packed. The repacking cost is storage cost and is small, and repacking reduces look up times later.

The problem is apparent when the guy at the tip of the chain ges n a spending spree.    In that case, the spender generates a larger proportion of transactions, and the transactions will cause considerable re-write as they arrive because there is a packing of his transactions that is optimal, and will constantly be computed.  

Window size and irrational sequences

The theory abut Lagrange  approximation requires that some irrational formuli be more irrational than others.  What do we mean?

Basket brigade theory has window sizes, an adaptable queueing window of transactions that are converted into compact generator, with an irrational 'quant' error term (I normally call this bit error).  This is like a rational approximation with an irratoonal continuing fraction.

If we incrementally increase the window and derive the best compact representation, then the bit error will either increase or decrease.  If the bit error increases, then that means a shorter window contained a partial rational algebra, rational relations. Like Pi, is the example used. It is irrational, be we get a good approximation at 22/7, then the next best approximation is some window of 200.  In between we get a lousy approximation from any window.

So Pi is less irrational than Phi, the most irrational.  With Phi I can always reduce bit error by increasing window size.  There is no 'gap' in my indices where information becomes redundant. Thus, all new remainders have innovations, not redundancy, it is maximum entropy.

This is something we keep in mind.  All of our generators carry the remainder from a rational compact graph.  The compact graph captures all redundancy, up to the current rank.  The window size is what is determined,the condition we have to meet. Generally that mans approaching one of the point on the Markov, but we are not as accurate as the roton in doing this.

Where is the queuing in all this?

  Convert the 'arc' isomorphism of the generator to normal form. Feed it with the incrementing indices and as it generates the typical sequence, the window size is queued up at the nodes in the generator.

There really are no number lines in math, they lied.  There are recursive algorithms, and all the math is protocol theory, the theory of queuing up when running recursive protocolss.

What if the bit error ends up with structure?
Hey, my agents are trying to estimate Pi, and went beyond 22/7. My bit error now has structure and will form a compact graph. In physics get quarks. In economics we get central banking.

In physics, when the compression is to great, essentially the virtual it bss cannot get on the bubbles and sort them. This is aliasing in algebra, the line of symmetry won;t support the transitions needed by the necessary motions. So, it way underamples, and gains structure and quantizes, we get a three color, side lobes.  This is the spectral version of relativity, and the better version.

Physics has a pit boss, called  the speed of light In spectral theory that is a fixed generator, in brigade theory it is still self measured and subject to uncertainty. The speed of light is like the least irrational of them all.

Pennsylvania joins the big five

Illinois is mostly moving out west, to the homeless shelters.

WA Post on Fedcoin

Cash has the distinct advantage of being anonymous. You can put cash under your mattress or in a vault, and no one knows about it except you. A national cryptocurrency would make it far more difficult for criminals to hoard money because all transactions would be recorded in the government ledger. 

No.   once we have a digital representation of the currency, we can treat it like cash.

Bitcoin and other cryptocurrencies are based on a complicated technology known as blockchain, which acts like a digital ledger of all transactions completed with the currency. It’s somewhat similar to the serial number that you can find on every dollar bill, but it actually means something because it makes bitcoin nearly impossible to counterfeit.

Let us be more specific.  As long as my counterparty is willing to wait two  minutes or two days for the bitcoin to clear the blockchain, then, yes, here is no double spending. But we are not waiting, we will take the Fecoin inside he ringed fence and skipo the call to blockchain, just exchangethe digits without a third party.

 With a national cryptocurrency, whose supply is controlled by the central bank, rates can be negative.

Complete horeshit.   There is certaintly a finite probability of a negative 'usage' charge, and in FX trading one side always suffers the flow.  But, otherwise, the interest charge are always determined by the collective match between loans and deposits, under the published bounds on market making risk the bank is willing to take.  There is no setting of rates, I don't care how many beards and suits you have on the committees, the trading pits are automated.

Worried about deflation in a recession? No longer. A national cryptocurrency such as fedcoin would be able to operationalize Milton Friedman’s famous “helicopter cash” as an alternative strategy to stimulate the economy.

Milt and Ben are not the brightest bulbs on the subject.  'Helicopter droppings', are mathematically, the currency risk, the probability of losses and gains by the currency market maker (the pit bosses that sort the queues and matches the sequences).

Th author of the WA Post article is a bit behind the scene.  Central bankers have already been caught with the 'fake cash' idea of a three party transaction, like bitcoin or swift). So, from now on he pundits have to remember, two party exchange uses watermarked digits and counterfeit proof no double spending rule. Three party is a phone call to janet or the miners, whenever you make a purchase.  No central banker wants to be embarrassed again by me when they make the boo boo.

Bitcoin to the rescue

ZAR Tumbles As South Africa's ANC "Decides" To Nationalize Central Bank, Confiscate Land

Three week budget cycle

Shutdown clock ticking, GOP struggling for spending deal

We get another continuing resolution until mid January, three weeks. The bankruptcy judge has granted reprieve from the two week budget cycle.

Sounds more like a rightdoing

It appears the price of bitcoin cash on other exchanges increased in the hours before our announcement... [while there's] no indication of any wrongdoing at this time, we will be conducting an investigation..."

Coinbase announced support for the other variant for bitcoin.  Some insiders may have revealed the plot.  Which, of course, is exactly why we like coinbase, they reveal the plot.  

We don;t want less of it, we want more. We want to download the Redneck architecture, configure it for whatever digital trade, then hit go.  Our users can tap their cash card on the icon and begin auto-trading.  Thus, us little folk get in early.

Unit of account and cash

Generally they are considered one in the same, why.

If I have a blockchain of all the dairy cows in Wisconsin, then the dairy cow might be my unit of account, but I can I do accounting?  With paper cash, I can take my cash, divide it piles, on my desk, one pile to pay each bill.  That is a unit of account, the dairy cow on the blockchain must be a security, a ledger. If the cow is in your barn, you own it.

Nor can I trade a cow with anonymity, they weight a thousand pounds. But that restriction is one of unit of account, I cannot carry an ad hoc  pile of cows to pay my electric bill, but I can stuff paper into my wallet.

But that makes bitcoin a security.  What is owned? The rights to a pile of digits in the swift system, you have hedged the central bank with inside information, and used the shortest protocol, a trade at Coinbase. Once you make the nearly instant trade at coinbase, the blockchain will eventually resolve the ledger.  So each central bank perturbation, the insiders move digits to the block chain until the central banks relents.

Markov Tree and two color pits

From Wiki:

Thus, there are infinitely many Markov triples of the form
where F_x is the xth Fibonacci number. Likewise, there are infinitely many Markov triples of the form
where P_x is the xth Pell number.^[2]

These are all the two colored pits.  Not the x window size comes out one or two, those are rank zero, or a bit above, bit error.  So, we can decompose the three color, and generally will do so with automatically deployed pits, as needed. We end up arranging these 'hickey stick'  things (technical term).

As usual, we never get the exact solution, there isn't one.  Prices will orbit, semi-randomly, spiral then be reset then spiral....