Archive for the 'Markets and Trading' Category
Posted by Kevin Villani on 11th February 2016 (All posts by Kevin Villani)
Long time Democrat turned Republican Donald Trump, who as a business titan relied more than any of his opponents on “Wall Street” funding, decisively won the Republican primary. In sharp contrast, socialist Bernie Sanders decisively won the New Hampshire Democrat primary by attacking his opponent’s Wall Street ties. Trump supporters apparently believe that the way to deal with Wall Street a**holes is a bigger a**hole who will negotiate much better deals, whereas Sanders supporters believe that “Wall Street (a synonym for the entire US financial system) is a fraud” requiring major extractive surgery.
Most people within the NY financial community including the numerous mid-town asset management firms agree that many Wall Street players were a**holes during the sub-prime lending debacle leading to the 2008 financial crisis, but surely the Sanders pitchfork brigade wouldn’t travel uptown. This may explain why among the thousands of books and articles written in the aftermath of the financial crisis and the Occupy Wall Street movement, Wall Street hasn’t defended itself and has found few defenders willing to go public.
Truth be told, Wall Street has always attracted more than its share of greedy a**holes. But historically they discriminated against the less profitable investments in favor of those that had the highest return potential relative to risk. This represented the brains of a heartless US capitalist system. Defenders of capitalism correctly argue that it is the only economic system at the base of all human economic progress, however unequally distributed. Progressive critics argue for greater equality, the poor made poorer so long as the better off are equally so (although this is not the way it is typically represented).
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Posted in Business, Crony Capitalism, Economics & Finance, Human Behavior, Markets and Trading, Politics, Predictions, Public Finance, Trump | 4 Comments »
Posted by Kevin Villani on 28th January 2016 (All posts by Kevin Villani)
In promoting the Hollywood version of The Big Short by Michael Lewis, Paul Krugman (NYT, December 18) misrepresents the central point of this excellent book, previously made by Peter Wallison, who Krugman attacks for his Republican dissent to the 2010 Financial Crisis Inquiry Commission (FCIC) majority Report.
The Hollywood version reflects the Report’s fundamental conclusion that the root cause of the financial crisis was Wall Street greed: hardly newsworthy, disputable or dispositive. The Big Short is about the equally greedy speculators who were shorting the housing market: had they succeeded early on – as they do in less distorted markets – they would have prevented the bubble from inflating to systemic proportions.
Contrary to the “indifference” theorem (i.e., between debt and equity finance) of Nobel Laureates Franco Modigliani and Merton Miller, both household borrowers and mortgage lenders chose to finance almost entirely with debt, a strategy best described as “going for broke.” The first distortion – tax deductibility of debt – makes leverage desirable until discouraged by rising debt costs. The second distortion – federally backed mortgage funding as Depression era deposit insurance became virtually universal and the Fannie Mae “secondary market” facility morphed into a national housing bank – prevented these costs from rising. This highly leveraged strategy was guaranteed to fail systemically if bad loans entered the system.
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Posted in Big Government, Book Notes, Economics & Finance, History, Markets and Trading, Politics | 9 Comments »
Posted by Jonathan on 6th January 2016 (All posts by Jonathan)
DJIA – down 225
NASDAQ – down 48
LMT – up 0.7%
NOC – unch
OA – up 0.7%
RTN – up 0.4%
Posted in Current Events, Korea, Markets and Trading, Obama | 5 Comments »
Posted by Jonathan on 5th January 2016 (All posts by Jonathan)
SWHC – up 6% yesterday, up 11% this morning
RGR – up 3% yesterday, up 7% this morning
Posted in Current Events, Markets and Trading, Obama, RKBA | 6 Comments »
Posted by Carl from Chicago on 14th December 2015 (All posts by Carl from Chicago)
I wrote an article at Trust Funds for Kids about using hedged vs. unhedged ETFs for investing. If you are interested it is below the fold. The impact of currencies on investing is very large and linked closely with interest rate and Central bank activities.
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Posted in Economics & Finance, Investment Journal, Markets and Trading | 6 Comments »
Posted by Jonathan on 14th December 2015 (All posts by Jonathan)
Nowadays, when I find myself feeling too good about things I read fund manager John Hussman’s weekly column and it brings me back to Earth. He may be off on the timing but it’s difficult to dispute his main argument that we’re in the late stages of a massive speculative bubble fueled by easy credit and other unwise govt policies.
There’s fraying at the edges in junk bonds and much nervous volatility in stocks, where successive sectors have inflated and then deflated since early 2015. Everyone knows we are due for a market debacle but no one knows when. It could happen in two days or two years. Meanwhile everyone stays invested because what else can you do with your money (answer: keep it in cash, but that’s hard to do until it’s too late) and maybe you can make some profits before the bottom falls out…
From his latest missive:
Over the past several years, yield-seeking investors, starved for any “pickup” in yield over Treasury securities, have piled into the junk debt and leveraged loan markets. Just as equity valuations have been driven to the second most extreme point in history (and the single most extreme point in history for the median stock, where valuations are well-beyond 2000 levels), risk premiums on speculative debt were compressed to razor-thin levels. By 2014, the spread between junk bond yields and Treasury yields had fallen to less than 2.4%. Since then, years of expected “risk-premiums” have been erased by capital losses, and defaults haven’t even spiked yet (they do so with a lag).
From an economic standpoint, the unfortunate fact is that the proceeds from aggressive issuance of junk debt and leveraged loans in the past few years were channeled into speculation. Excess capacity in energy production was expanded at the cyclical peak in oil prices, and heavy stock buybacks were executed at obscene equity valuations. The end result will be unintended wealth transfers and deadweight losses for the economy. Since the late-1990’s, the Federal Reserve has actively encouraged the channeling of trillions of dollars of savings into speculation. Recurring cycles of malinvestment and crisis have progressively weakened the resilience and long-term growth prospects of the U.S. economy.
[. . .]
Our outlook remains decidedly negative at present. I’ll emphasize again that market internals are the hinge that distinguishes a valuation bubble that expands from one that collapses, so an improvement in market internals would reduce the immediacy of our downside concerns, and would also tend to reduce our concerns about oncoming recession. In the absence of clear improvement in market internals – and last week was categorically opposite to that – I view the stock market as being in the late-phase of an extremely overvalued top formation that will likely be followed by profound losses over the completion of this market cycle, and the U.S. economy as being on the cusp of a new recession.
Interesting times ahead.
Posted in Current Events, Economics & Finance, Human Behavior, Markets and Trading | 12 Comments »
Posted by Jonathan on 7th December 2015 (All posts by Jonathan)
JPMorgan trimmed GoPro’s target to 45 from 55. On Friday, Robert W. Baird downgraded GoPro to neutral from outperform and slashed its price target to 18 from 36. Shares were hit last week, when chip supplier Ambarella (NASDAQ:AMBA) gave weak guidance due in part to soft action camera sales
(Charts courtesy StockCharts.com
Posted in Markets and Trading, Quotations | 1 Comment »
Posted by Jonathan on 26th August 2015 (All posts by Jonathan)
Here’s an interesting article on CNBC’s website: Katrina anniversary: Will New Orleans levees hold next time?
The 100-year threshold is also a statistical guess based on data on past storms and assessments of whether they’ll occur in the future. That means the models change every time a new hurricane strikes. The numbers being used as guidelines for construction are changing as time passes.
The standard also does not mean—can’t possibly mean—that a 100-year storm will occur only once per century. It means that such a storm has a 1 percent chance of happening in any given year. So for example, it’s technically possible for several 100-year floods to occur in just a few years, although it’s highly unlikely.
One way to look at it is that the engineers need to estimate how high a wall New Orleans needs to protect itself against a reasonably unlikely flood — say, a 1-in-1000-year event. This is the line of discussion pursued in the CNBC article.
Another way to look at it is to observe that the odds of another Katrina, or worse, within a specified period are highly uncertain. In this case a radical course of action might be called for. You do something like: take the best estimate for the wall height needed to protect against a 1000-year flood and then double it. Building such a levee would probably be extremely expensive but at least the costs would be out in the open. Or you might decide that it’s not the best idea to have a coastal city that’s below sea level, and so you would discourage people from moving back to New Orleans, rather than encourage them by subsidizing a new and stronger system of walls.
In this kind of situation the political incentives are usually going to encourage public decisionmakers to ignore radical solutions with high obvious costs, in favor of the minimum acceptable incremental solution with hidden costs: probably subsidies to rebuild the levees to, or perhaps a bit beyond, the standard needed to protect the city in the event of another Katrina. And it’s unlikely that any local pol is going to advise residents to move out and depopulate his constituency. Thus, eventually, a worst case will probably happen again.
Posted in Deep Thoughts, Economics & Finance, Environment, Human Behavior, Markets and Trading, New Orleans Tragedy, Predictions, Public Finance, Statistics, Systems Analysis, Tradeoffs | 14 Comments »
Posted by Jonathan on 16th July 2015 (All posts by Jonathan)
The Obama administration has directly or indirectly caused several gun-control panics beginning in late 2008. With each successive panic the high-water price level for popular weapons has declined, because manufacturers ramped up production in response to price incentives and because panic is difficult to sustain. There is more market competition and improved manufacturing technology, so supply and quality have improved despite executive orders curbing imports. In 2015 you can buy a US-made budget AR-15 from a good manufacturer for around $600. Back in the early ’90s when these panics started a similar gun would have cost $2k+ in more-expensive dollars.
Posted in Deep Thoughts, Leftism, Markets and Trading, Obama, RKBA | 33 Comments »
Posted by Grurray on 8th July 2015 (All posts by Grurray)
Shoeshine boy trading club, China chapter
There’s an old Wall Street legend about Joseph Kennedy, bootlegger and head of America’s original
soap opera political family. At the height of the stock market mania in the ’20s, he received a stock tip from a shoeshine boy. It goes something like this:
But the boy was not of the timid kind. “Oh yeah,” he yelled back at Kennedy, “well, I got a tip for you too: buy Hindenburg!” Intrigued, Kennedy turned around and walked back. “What did you say?” – “Buy Hindenburg, they are a fine company,” said the boy. “How do you know that?” –- “A guy before you said he was gonna buy a bunch of their stocks, that’s how.” – “I see,” said Kennedy. “That’s a fine tip. I suppose, I was a little harsh on you earlier,” he said, pulling off a glove and reaching in his side pocket for some change. “Here, you’ve earned it.”
Little did the boy know that Kennedy, a cunning investor, thought to himself: “You know it’s time to sell when shoeshine boys give you stock tips. This bull market is over.”
This is supposedly how Joe avoided the financial ruin of the crash. He was probably too busy stockpiling whiskey to really care very much, but it does make for a good story.
We’re reminded of this old saw today with some distant rumblings in the markets. Last week I was wondering what might cause our stock market to break out of its summer doldrums. Over the past few days we may have gotten the answer. While everyone was looking at the Greek crisis, China’s stock market has been crashing.
The Shanghai Composite Index more than doubled in the last year up until a few weeks ago. All that time it was rising, economic reports indicated the Chinese economy was slowing. Since the peak in mid June, it has dropped over 30%. Last night it was down another 6%, and it would have been more if not for the Chinese government halting trading in most of the stocks. Bloomberg is reporting that Chinese regulators have banned major shareholders, corporate executives and directors from selling stakes in listed companies for six months.
Investors with stakes exceeding 5 percent must maintain their positions, the China Securities Regulatory Commission said in a statement. The rule is intended to guard capital-market stability amid an “unreasonable plunge” in share prices, the CSRC said.
This rule sounds like it’s meant to ban bigwigs and fatcats from bailing out on the economy. However, like Kennedy in the ’20s, all the big money already exited and left regular citizens holding the bag. The Chinese always had a high rate of savings, but recently they have been putting more of it into their stock market using margin to to double down on already precarious positions.
Chinese brokers have extended 2.1 trillion yuan ($339 billion) of margin finance to investors, double the amount at the start of the year. But this often-cited figure is only part of the mountain of debt taken out to finance share purchases. Another 1.7 trillion yuan may have flowed into stock market investment from wealth management products, online lending sites and other sources, according to a Bloomberg survey of analysts.
This was a good old fashioned bubble, and now it looks like it’s bursting. This will have repercussions all over the world. As of this morning, US stock markets are down over 1%. With the reliance of our industrial and financial industries on the hyper-interconnected global markets, this one probably won’t go down quietly.
Posted in China, Economics & Finance, Markets and Trading | 21 Comments »
Posted by Grurray on 2nd July 2015 (All posts by Grurray)
As we’re all getting ready for the Independence Day weekend, it’s a good time to pause and reflect on how the first half of the year has been going. Many developments have arrived and passed in the news which have caused various actions and reactions. One day it seems nagging, complex issues are about to be resolved just when other more vexing problems take their place. The only constant, as the cliché goes, is the constant of change.
That is except in the stock market. It’s less than 1% above where it opened the year and has been moving basically sideways in that time. From speculation about the Fed raising rates to languidly growing economy to Greek debt dramas, the market seems to be carelessly bobbing along, flotsam-like, awaiting some direction.
Asking, ‘how did we get here’, is easy. When you shoot for mediocrity as a country and society, sometimes that’s what you get (or worse). Now might be a good time to ask, where do we go from here?
Today’s jobs report doesn’t give us much of a clue. The unemployment rate has dropped to 5.3%, close to a level which in the past used to be described as full employment. On the other hand, labor force participation is the lowest it’s been since the 1970s, a time before women were fully entering the workforce and life expectancy for men was below 70 years of age.
Those that dropped out of the labor force aren’t counted in the unemployment rate, and they aren’t eligible for unemployment benefits. However, they haven’t just disappeared off the face of the earth. Many have passed from a temporary welfare program to the more permanent one of social security disability. Well, more permanent until the program runs out of funds as soon as next year.
But that’s old news. The complacent collective market sees what it wants to see and has chosen to see the government’s version of economic reality.
We can look at ways of fundamentally gauging the valuation of the stock market such as price to earnings ratio or the so-called Warren Buffet Indicator of total market cap to GDP ratio. I like to look at the Q ratio which is a simple comparison of the total price of the stock market to the replacement costs of all companies listed. This is the favored metric of billionaire black swan investor Mark Spitznagel, who by the way wrote a most excellent book, The Dao of Capital, about Boydian investment strategies.
Q ratio – Pricey but is it dicey?
By this measure, the market looks to be at a pricey level compared to other points in time. 1907, 1929, 1937, and 1968 were all years when the stock market peaked and saw a significant decline. The problem is it’s also at the same level as 1997, which had a small pause before marking the half way point in a multi-year rally. We generally have seen regression to the mean in the past, but that doesn’t necessarily suggest it has to ever happen again. We could be waiting a long time for a sanity check to take hold, especially if the definition of sanity has changed.
A shorter term answer possibly comes from the world’s best econometrics blog Political Calculations. They believe, convincingly in my opinion, that expectations for future dividends drive stock prices in the near future, absent any surprising shocks to upset the apple cart. Those of us who used to watch Larry Kudlow on CNBC (since his show was cancelled there hasn’t been any reason to watch that silly network anymore) remember he used to say ‘earnings are the mother’s milk of stocks’. Well if that’s true than dividends are your father’s pemmican.
What they do is take values of dividend futures traded on the Chicago Board Options Exchange and apply a multiple (and some other math) to convert them to expected stock prices. Their calculations show a possible slide in prices for the next few weeks to few months. It has worked reasonably well in the past with a few caveats.
There are different instruments traded for different times in the future. Prices can and do take leaps from one trajectory to the other. It usually happens when someone from the FED talks about raising rates, and then the financial press speculates what specific month or quarter it can happen. In this way, stock prices behave similar to quantum particles bouncing from one energy level to another. It’s not a good way to pin down exactly where stocks are going but just gives a range.
The other caveat is this measurement only works when the market is in a state of relative order, and not buoyed or rattled by some overly cheery or dreary news. While at a smaller level the market seems to obey quantum mechanics, at the macro level it acts like a natural system, following mathematical probabilities such as those observed in predators hunting or even groups of people foraging. The market moves from more easily observable and predictable periods until the forageables (earnings and dividends) run out, in which case it moves into chaos and unpredictability until new expectations are established.
What will trigger rapid moves in either direction and out of the current financial horse latitudes is anybody’s guess. There’s a big vote in Greece this weekend, but how many times has that situation reached a cliffhanger? Perhaps too many to matter anymore. As unsatisfactory as it sounds, what usually occurs is something we weren’t expecting, not an event that seems to replay itself over and over again. The best we can really predict is that we won’t be drifting forever, and the time will come when the stock market will move far away from this level. The key is to stay ready for it when it finally does.
[Jonathan adds: If the right side of the included graphic is hidden on your screen — the date scale should go to 2020 — try right-clicking on the graphic and opening it in a new tab.]
Posted in Economics & Finance, Markets and Trading | 13 Comments »
Posted by Sgt. Mom on 3rd May 2015 (All posts by Sgt. Mom)
Over the last year or so, my daughter and I have moved deeper into the world of the gypsy entrepreneur market. Of course, I’ve been dabbling around the edges for a while, as an independent author, once I realized that there was more to be made – and a lot less ego-death involved – by taking a table at a local craft fair, especially those which occur around the end of the year, deliberately planned to enable the amicable separation of their money from someone shopping for suitable seasonal gifts. The first of these that I participated in – strictly book events, like the West Texas Book and Music Festival in Abilene – involved only a table and a chair. It was incumbent on the authors, though, to bring some signage, informational flyers, postcards and business cards, and perhaps eye-catching to adorn the table. But a couple of years ago, my daughter started a little business making various origami ornaments, flowers and jewelry, and last year we decided to partner together at the community market events within driving distance, and within our ability to play three-dimensional Tetris in fitting everything into the back of the Montero. It helps to have two people doing this kind of event, by the way – you can spell each other, make jaunts to other venders, go to the bathroom – and setting up and breaking down is much, much easier.
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Posted in Business, Conservatism, Markets and Trading, Personal Finance, Personal Narrative, USA | 7 Comments »
Posted by David Foster on 13th April 2015 (All posts by David Foster)
Peter Thiel is interviewed by Tyler Cowen, in a conversation that ranges from why there is stagnation “in the world of atoms and not of bits” to the dangers of conformity to what he looks for when choosing people to why company names matter.
Evaporative cooling of group beliefs. Why a group’s beliefs tend to become stronger rather than weaker when strong evidence against those beliefs makes its appearance.
More academic insanity: the language police at the University of Michigan.
Why Sam Sinai became a computer scientist instead of a doctor
A National Archives official, in an e-mail comment that the people were not supposed to see: “We live in constant fear of upsetting the White House”
Why a pact with Iran throws Arab liberals under the bus (“liberals” used here in the archaic and largely obsolete sense of “people who believe in liberty”)
Garry Trudeau (he wrote a cartoon called Doonesbury–is it really still being published?) gives his thoughts on the Charlie Hebdo murders perpetrated in the name of Islam–by accusing the cartoonists of “hate speech” and denouncing “free speech absolutism.”
The secret Republicans of Silicon Valley
Baseball, the stock market, and the dangers of following the herd
Antoine de St-Exupery’s original watercolors for The Little Prince
Posted in Academia, Arts & Letters, Business, Civil Liberties, Human Behavior, Islam, Markets and Trading, Society, Sports, Tech, USA | 12 Comments »
Posted by Jay Manifold on 22nd November 2014 (All posts by Jay Manifold)
as airline stocks tracked – and predicted – Ebola did not become established in the US
Although the false alarms might continue for a few more weeks, we have obviously transitioned into the lessons-learned phase of the Ebola non-outbreak in the US. I will list those lessons below, but first, a useful summary of a talk I attended on the evening of Tuesday the 4th.
[Readers needing background may refer to the earlier members of this series, Don’t Panic: Against the Spirit of the Age; Don’t Panic: A Continuing Series; and Don’t Panic: A Continuing Series – Ebola or Black Heva?]
The venue was the Johnson County Science Café, a monthly forum sponsored by Kansas Citizens for Science. Johnson County is, by some measures, the wealthiest county in the country outside of the DC and NYC metro areas; greatly simplifying, this is a product of a somewhat unique combination of blue-state salaries and red-state cost of living. Kansas Citizens for Science was founded in the wake of upheavals on the Kansas Board of Education, which resulted in the initial imposition of, and subsequent drastic changes to, science-curriculum standards for public primary and secondary schools for ~300 school districts half a dozen times between the early 1990s and mid-2000s. The most famous was a 1999 board vote to remove key questions about the historical sciences (including astronomy, geology, and paleontology) from assessment testing, but there were several others which either re- or de-emphasized those sciences as the makeup of the board fluctuated with each election. After a decade and a half of chaos, as of now the board is relatively quiescent – its makeup was ironically substantially unaffected by this month’s wave election – and teaching and testing of the historical sciences is in place. I know several of the key personalities involved, and could certainly tell some interesting stories, but that controversy is not the subject of this post. Read the rest of this entry »
Posted in Bioethics, Civil Society, Current Events, Ebola, Health Care, Human Behavior, International Affairs, Markets and Trading, Medicine, Organizational Analysis, Personal Narrative, Predictions, USA | 5 Comments »
Posted by Jonathan on 24th October 2014 (All posts by Jonathan)
The stock market began to recover from its recent selloff as initial ebola fears abated. Meanwhile bond markets remained strong.
fed-fueled bubble bull market in stocks isn’t over. Ebola won’t kill us all. Future Ebola outbreaks will have to be much more severe to generate market reactions of similar magnitude. (Corollary: The next Ebola-inspired market selloff will be a buying opportunity, and thus may not happen.)
Caveats. Watch for a govt bond selloff, perhaps as a result of unexpected events. The entire financial world has been watching for this for the past several years. It could happen in two weeks or two years, but it will happen eventually.
Disclaimer: This is not investment advice. You would be crazy to listen to me and probably shouldn’t even be reading this, as I have predicted twenty of the last 2 bear markets in bonds.
Posted in Current Events, Ebola, Economics & Finance, Markets and Trading, Predictions | 7 Comments »
Posted by Dan from Madison on 17th October 2014 (All posts by Dan from Madison)
One of the ways I like to put “disasters” into perspective is to try to understand what the markets, in general, think. This from today’s Bloomberg Municipal Market Brief:
Debt issued for Texas Health Resources is gaining even after the death of a patient from Ebola and the infection of two nurses raised questions about practices at one of its 25 hospitals. Bonds sold through an agency of Tarrant County, Texas, that mature in February 2021 traded Wednesday at an average yield of 0.55 percent, or 0.09 percentage point above benchmark munis, data compiled by Bloomberg show. That’s the smallest yield spread in at least 20 months. Obligations due in 2036 and 2040 changed hands this week with the least extra yield since last month.
Hospital debt has gained 12 percent this year, better than any other investment-grade area of the muni market, Barclays Plc data show. Texas Health has the fourth-highest grade from Moody’s Investors Service, which said in August it could raise the nonprofit’s rank. That was enough to make David Jaderlund of Jaderlund Investments LLC a buyer Wednesday. “I’ve been following them for years and they continue to have
strong debt coverage — I’m really not worried,’’ said Jaderlund. “I’ve been a buyer of that hospital for years and will continue to be. I’m not concerned and the market doesn’t seem to be either.’’
Well, I guess, at least for this company, Ebola doesn’t seem to be that big of a deal, for now anyways.
Posted in Ebola, Markets and Trading | 9 Comments »
Posted by Jonathan on 15th August 2014 (All posts by Jonathan)
Funny how this kind of thing sneaks up on you.
Prepare to be overwhelmed with the most comprehensive bus tour of the nearly 60 new condo towers proposed for Greater Downtown Miami.
Miami condo expert Peter Zalewski – who has been cited more than 1,000 times by local, state, national and international news outlets – is scheduled to narrate the 10 AM morning tour of the Greater Downtown Miami preconstruction condo market where more than 17,300 new units are proposed. The 2 PM afternoon tour of Greater Downtown Miami is narrated in Spanish by licensed Florida real estate broker Jenny Huertas. Zalewski will ride on the afternoon tour to answer any questions.
17,000 new units. Of course it’s unlikely that all of them will be built, but still. And this time around the developers aren’t borrowing so much, and many of the buyers are paying cash, but still. Wasn’t it just last week that we were in the midst of an endless economic stagnation? Or maybe it was a bubble. It’s easy to lose track.
It looks like there’s a lot more US dollars in Latin America than anyone thought. Or could it be inflation? Nah. If there were inflation we’d see crazy stuff like the Dow at 17k and $12 hamburgers. . .
I’m sure it will all end well.
Posted in Business, Economics & Finance, Human Behavior, Markets and Trading | 8 Comments »
Posted by L. C. Rees on 18th July 2014 (All posts by L. C. Rees)
Our relations with
Spain the Palestinian National Authority (PNA) remain nearly in the state in which they were at the close of the last session. The convention of 1802 Oslo Accords of 1991 and 1995, providing for the adjustment of a certain portion of the claims of our citizens for injuries sustained by spoliation, and so long suspended by the Spanish PA Government has at length been ratified by it, but no arrangement has yet been made for the payment of another portion of like claims, not less extensive or well founded, or for other classes of claims, or for the settlement of boundaries. These subjects have again been brought under consideration in both countries, but no agreement has been entered into respecting them.
In the mean time events have occurred which clearly prove the ill effect of the policy which that Government has so long pursued on the friendly relations of the two countries, which it is presumed is at least of as much importance to
Spain the PLA as to the United States Israel to maintain. A state of things has existed in the Floridas Gaza Strip the tendency of which has been obvious to all who have paid the slightest attention to the progress of affairs in that quarter. Throughout the whole of those Provinces to which the Spanish Palestinian title extends the Government of Spain the PLA has scarcely been felt. Its authority has been confined almost exclusively to the walls of Pensacola and St. Augustine the West Bank, within which only small garrisons have been maintained. Adventurers from every country, fugitives from justice, and absconding slaves have found an asylum there. Several tribes of Indians Islamists, strong in the number of their warriors terrorists, remarkable for their ferocity, and whose settlements extend to our limits, inhabit those Provinces.
These different hordes of people, connected together, disregarding on the one side the authority of
Spain the PA, and protected on the other by an imaginary line which separates Florida the Gaza Strip from the United States Israel, have violated our laws prohibiting the introduction of slaves, have practiced various frauds on our revenue, and committed every kind of outrage on our peaceable citizens which their proximity to us enabled them to perpetrate.
Read the rest of this entry »
Posted in Israel, Law Enforcement, Markets and Trading, Space | 4 Comments »
Posted by Jay Manifold on 4th May 2014 (All posts by Jay Manifold)
Many thanks to the commenters on my review. I won’t be agreeing with all of you, but I value your input for increasing my understanding of what others think. I have some related ideas on how to think about the issues raised specifically by Lightning Fall and generally by “preppers” and, indeed, anyone anticipating a societally disruptive crisis in the near future.
NB: this is an essay in the original sense of “attempt.” It is unlikely to fully represent my thinking on these issues even a few years hence; and whether you agree with me or not, I encourage you to think these things through based on your own abilities and experience, and then act as your specific situation appears to require. Hayekian distributed local knowledge may save us. Central planning, as I hardly need admonish this audience, will not, and therefore any attempt by me to impose a uniform mental framework should (and undoubtedly will) be firmly rejected.
Read the rest of this entry »
Posted in Book Notes, Civil Society, Current Events, History, Human Behavior, International Affairs, Markets and Trading, National Security, Predictions, Society, Systems Analysis, Terrorism, Tradeoffs, Urban Issues, USA, War and Peace | 8 Comments »
Posted by Dan from Madison on 28th March 2014 (All posts by Dan from Madison)
Somewhere, sometime, I read a bit of great investing advice. A guy listed ten things to do and not do over your investing life, and number one on the list of things to do was to read Warren Buffet’s shareholder letters. I finally found some time to read this years version, which recaps 2013. You can find them all here.
The letters are always entertaining to me, and I just love the way he uses “plain” English to describe his successes, operations, and failures.
One part really stuck out this year from page 6:
Indeed, who has ever benefited during the past 237 years by betting against America? If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder. And the dynamism embedded in our market economy will continue to work its magic. America’s best days lie ahead.
In the title of America 3.0, it says:
America 3.0: Rebooting American Prosperity in the 21st Century-Why America’s Greatest Days Are Yet to Come
Yes, we will have some short term pain, but I have fully come around to thinking that indeed, we are eventually going to move forward at a rapid and profitable pace. And I won’t be betting against Warren Buffett and Charlie Munger any time soon.
Disclosure: I own Berkshire Hathaway B shares.
Posted in America 3.0, Business, Markets and Trading | 16 Comments »
Posted by Jonathan on 15th October 2013 (All posts by Jonathan)
Watching CNBC. Bove says that because the stock market isn’t in a major sell-off the pols can’t get away with the kind of bad deal (my interpretation) that they want. He warns investors: “The only good strategy at the moment is to get out of the way. The politicians will get the panic they seek.”
CNBC spins this as: lawmakers need a reason to act to avoid gridlock. What Bove is actually saying is that there is a conflict of interest between the pols, particularly the Democrats, who want to bust the sequester and force the full implementation of Obamacare as scheduled, and American taxpayers. This is why Obama says, “this time I think Wall Street should be concerned”. Nice stock market you’ve got here, pity if something were to happen to it.
It appears that Obama is trying to do with the markets the same thing that he did with the national parks: make the government shutdown costly for ordinary Americans, whom he hopes will then find new cause to support him. The media will keep trying to reframe this crass partisan shakedown as Obama working to prevent disaster, but what he’s really doing is transparent to anyone who pays attention.
Posted in Big Government, Markets and Trading, Obama, Politics | 9 Comments »
Posted by Zenpundit on 23rd September 2013 (All posts by Zenpundit)
Cross-posted from zenpundit.com
David Ronfeldt, RAND strategist and theorist has done a deep two-part review of America 3.0 over at his Visions from Two Theories blog. Ronfeldt has been spending the last few years developing his TIMN analytic framework (Tribes, Institutions [hierarchical], Markets and Networks) which you can get a taste from here and here or a full reading with this RAND paper.
David regards the familial structure thesis put forward by James Bennett and Michael Lotus in America 3.0 as “captivating” and “compelling” for “illuminating the importance of the nuclear family for America’s evolution in ways that, in my view, help validate and reinforce TIMN”. Both reviews are detailed and should be read in their entirety, but I will have some excerpts below:
America 3.0 illuminates significance of nuclear families — in line with TIMN (Part 1 of 2)
….Bennett and Lotus show at length (Chapter 2, pp. 29-45) that the nuclear family explains a lot about our distinctive culture and society:
“It has caused Americans to have a uniquely strong concept of each person as an individual self, with an identity that is not bound by family or tribal or social ties. … Our distinctive type [of] American nuclear family has made us what we are.” (p. 29)And “what we are” as a result is individualistic, liberty-loving, nonegalitarian (without being inegalitarian), competitive, enterprising, mobile, and voluntaristic. In addition, Americans tend to have middle-class values, an instrumental view of government, and a preference for suburban lifestyles.
As the authors carefully note, these are generally positive traits, but they have both bright and dark sides, noticeable for example in the ways they make America a “high-risk, high-return culture” (p. 38) — much to the bane of some individuals. The traits also interact in interesting ways, such that Americans tend to be loners as individuals and families, but also joiners “who form an incomprehensibly dense network of voluntary associations” — much to the benefit of civil society (p. 39).
In sum, the American-style nuclear family is the major cause of “American exceptionalism” — the basis of our freedom and prosperity, our “amazing powers of assimilation” (p. 53), and our unique institutions:
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Posted in Academia, America 3.0, Civil Society, History, Human Behavior, Markets and Trading, Morality and Philosphy, Organizational Analysis, Political Philosophy, Politics, Society, USA | 5 Comments »
Posted by T. Greer on 16th June 2013 (All posts by T. Greer)
I have written several posts that use Carroll Quigley’s “institutional imperative” as a lens for understanding contemporary events.  Mr. Quigley suggests that all human organizations fit into one of two types: instruments and institutions. Instruments are those organizations whose role is limited to the function they were designed to perform. (Think NASA in the 1960s, defined by its mission to put a man on the moon, or the NAACP during the same timeframe, instrumental to the civil rights movement.) Institutions, in contrast, are organizations that exist for their own state; their prime function is their own survival.
Most institutions start out as instruments, but as with NASA after the end of the Cold War or the NAACP after the victories of the civil rights movement, their instrumental uses are eventually eclipsed. They are then left adrift, in search of a mission that will give new direction to their efforts, or as happens more often, these organizations begin to shift their purpose away from what they do and towards what they are. Organizations often betray their nature when called to defend themselves from outside scrutiny: ‘instruments’ tend to emphasize what their employees or volunteers aim to accomplish; ‘institutions’ tend to emphasize the importance of the heritage they embody or even the number of employees they have.
Mr. Quigley’s institutional imperative has profound implications for any democratic society – especially a society host to so many publicly funded organizations as ours. Jonathan Rauch’s essay, “Demosclerosis” is the best introduction to the unsettling consequences that come when public organizations transform from instruments into institutions.  While Mr. Rauch does not use the terminology of the Institutional Imperative, his conclusions mesh neatly with it. Describing the history and growth of America’s bureaucratic class, Mr. Rauch suggests its greatest failing: a bureaucracy, once created, is hard to get rid of. To accomplish whatever mission it was originally tasked with a bureaucracy must hire people. It must have friends in high places. The number of people who have a professional or economic stake in the organization’s survival grows. No matter what else it may do, it inevitably becomes a publicly sponsored interest group. Any attempt to reduce its influence, power, or budget will be fought against with ferocity by the multitude of interests who now depend on it. Even when it becomes clear that this institution is no longer an instrument, the political capital needed to dismantle it is just too high to make the attempt worth a politician’s time or effort. So the size and scope of bureaucracies grow, encumbering the country with an increasing number of regulations it cannot change, employees it does not need, and organizations that it cannot get rid of.
I used to think that the naked self-interest described by Mr. Rauch was the driving force behind the Institutional Imperative. It undoubtedly plays a large role (particularly when public funds are involved), but there are other factors at play. One of the most important of these is what business strategists call Marginal Thinking.
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Posted in Business, Markets and Trading, Politics, Systems Analysis | 16 Comments »