The Fed as tax collector

The usual crowd is trying to understand the Fed in terms of standard currency emitter, but it is the wrong model. The Fed also collects an adjustable seigniorag stream, it is a tax collector.

Then we see a simple business operation in the repo market, loan demand became volatile and treasury raised its monopsony fees. Then is becomes clear, this is an unstable central bank, it loses market share when it intervenes in the repo market. The Fed does not want to lose market share and the pricing on government goods quits working.

The only fix is to make the seigniorage fee a future bet, create a measurement axis and use it to shove seigniorage risk back onto the market and out of Treasury. Either that or move to competitive curency banking.

It seems obvious, but not if you spent ten years in 'This time is different' school. In sandbox terms, they want to force a three color model to fit into a two color trading pit. They teach the Fed as a monopoly when it is a monopsony.  Their model cannot notice the competitive banking environment because they promised something 40 years ago. If this time is truly different, then we can neutralize the recession cycles, was the idea. Traditional economics school got hoisted on their own petard.

Dim Kim Son suffers basketball envy

Might have deeper roots however. What is it about himself that he really finds too small?

More drone

Syrian oil refinery suffered a few explosions,thanks, they say, to ISIS having UAVs of some sort. Not sure what having means, one can order them on line. But, I digress.

The real point is where the frigg is the US Navy going to park those two acre, 15 billion tubs of lard they built? Certainly no where near the Persian Gulf, or Eastern Mediterranean.  The safest place to put them is in the middle of the Atlantic, undergoing fixes and repairs, on a semi-permanent basis.

Whoa, then where can you park all those F35s? Certainly not anywhere in any airport in the middle east, they are safest in the middle of Kansas.

The military will be making the sudden shift to combat defense drone fairly quickly.  It is not that drone warfare really damages the ship, it is they stop operations for the afternoon while the Navy cleans up the mess. And, airbases in the middle east need strong perimeter drone defense if there is any hope of using cockpits.  It is evolving quickly into drone v drone.

Bringing us back the he NSA and the answer, how are they going t provably identify good UAV from not good? Answer, they need SecureID tech.

No blue bar Q4

We look to have the usual 2.1%, possibly 1.9%, definitely above zero. No sudden mass layoffs. One small bout of inflation with oil holding, up 10%. The curve is still flat on the short end. This is an economy that is getting by, kicking can, staying just above the doldrums, nothing more.
Charts from Mish.

My gray swan I am starting to watch? The tax battles going on, states vying against the Swamp for income and housing taxes. These battles end in very last minute deals, just before both parties get the willies. We get some unknown tax jolt from a private meeting of the elders.

A sever government stumble in New York seems more likely than in California, at the moment. Cuomo has cause for desperation.  Tax fuel the exit. Illinois disease. But taxes and technology in NYC fuels a potential sudden stop in NYC first, one of those skews that is hard to avoid. The local tax base there depend on the financial district, like Silicon Valley taxes fuel Sacramento, out here. But New York it is all endogenous, wealth sudden exit from exactly the came community the hires the poor. The technology makes an easier move to the South or Southwest.

When we are safely tucked into our pods the bots can manage.

Ask any San Franciscan what the state of California has an excess of and the most likely answer will be homeless people (and their excrement, especially with the liberal mecca recording as many as 16,000 "feces complaints" in one week ). Actually, ask just about anyone and the answer will be the same: after all with 130,000 homeless, California is now home to more than a quarter of the nation's homeless population.
That all may soon change, however, if a new crowdfunding effort succeeds in its effort to solve the US homeless crisis by building a 300-acre city open exclusively for those without a home. Daune Nason, founder of the Folsom-based Citizens Again, released details Thursday of his plans for an estimated $3 billion private city equipped with amenities and services for a 150,000 “high-needs” population, CBS LA reports.

It is an evangelical day

SHOCK POLL: 43% OF EVANGELICALS WANT TRUMP REMOVED...

I feel in such an angelical way
Not bellicose
Didn't burn my toast
Played the nice host

Makes me think of an evangelical day
I feel in such an angelical way

I think I can get an original beat out of this, add more lyrics of the same tempo, pick some note from a simple chord. Trump! The musical. My lead man? Hmm.. someone who is a great actor, not some character bum like DeNiro. I like Matt Daman, teach him singing.

Robert's has hardly a role in the Senate trial

Clause 6: Trial of Impeachment[edit]

The Senate shall have the sole Power to try all Impeachments. When sitting for that Purpose, they shall be on Oath or Affirmation. When the President of the United States is tried, the Chief Justice shall preside: And no Person shall be convicted without the Concurrence of two thirds of the Members present.

Clause Six grants to the Senate the sole power to try impeachments and spells out the basic procedures for impeachment trials.

There are barely any rules of evidence or order, except a fair count of senate votes. None of the rights apply, inside the trial. Lawyers are completely useless, it is plain and plainly ruled for all to see. Tell those bizarre TV lawyers they are not needed, tell Roberts to wear a suit and do his duty by verifying the count.

I am not reading it

But this is Brad's summary, it will do:

Stripped down, the conclusions of The General Theory might be expressed as four bullet points:

1. Economies can and often do suffer from an overall lack of demand, which leads to involuntary unemployment
2. The economy’s automatic tendency to correct shortfalls in demand, if it exists at all, operates slowly and painfully
3. Government policies to increase demand, by contrast, can reduce unemployment quickly
4. Sometimes increasing the money supply won’t be enough to persuade the private sector to spend more, and government spending must step into the breach

Point one means economies suffer partial shutdowns on occasion.  point two means capital flows in an economy. Point three is moot since government policies are in phase with shutdowns on a repeatable basis. Government is part of the economy. Point four, even pretending that fouling the money supply helps is an error.

Government mostly fouled the pricing system in the USA in the last forty years. A better Keynesian stimulus estimates government typical losses to the economy then announces the predicted losses well before they occur. Making up fantasies about pushing string does not help, just adds a layer of confusion for the shadow bankers to sort.

Street camping in LA is legal these days

In their proposal, the party cites the World Bank’s estimate that there could be as many as 140 million “climate refugees” flooding into the west from Africa, South Asia, and South America by the year 2050.

The EU Green Party has a new policy.

Welcome to LA

I am the pro on squandered defense spending

Used to be my business, squander it.

The Texas Space Cadet thing is another wasted SI initiative, and will be hard to dislodge. And our enemies will fly a drone into their power supply, all the cubicles will go dark for the duration. There are no positive side effects to speak of, Texas is better off taking the cash and promoting math and history in their schools, more honestly in both cases.

If this is about the military and human resources, then give me the Medical Corp, up in rank and producing medical techs, ASAP.