Remembering Why Markets Move

Personally feel sorry for those who will suffer as the ‘powers that be’ inject some more volatility…it is not the money managers, whose miserable performance (they now discuss ‘bonus risk’) continues, but the poor ignorant people who let them manage, manipulate, fold, spindle, and mutilate their savings.

Strong view: markets move because of foundational economics, but the amplitude and sometimes the direction is caused by the players in all the markets.  The boys and girls in the trading rooms get little for doing nothing, so any hint at a good rumor will move people’s pensions and all the derivatives wrapped around them like bathrobes after a Turkish massage.[less fee, of course].  And now we add the digital amplification, where the boys and girls have a party every night and instead of exchanging Tupperware or erotic toys they trade bifurcating morphing algorithms all to their own benefit.  We, the general ‘we’ cannot see either because we do not want to, or because two basis points never mattered before.  Now that the transactions are millions, the 2bps adds up to somebody’s holiday in some islands somewhere.

On cleaning

Waiting for Mr. Clean

 

To make a long story short, it has been possibly seven years since there was a decent cleanup around here. Recently embarked upon a journey to redress this sin for a visit by an old friend, and there are surely lessons learned:

              No matter what you thought there is a lot more stuff to throw out. Every room, every closet, every drawer and shelf have 40% stuff that it makes no sense to keep and get out all manner of crud that requires cleaning.  Throw it out.  Then throw out another 20%.

              Once you start you are trapped into finishing. One clean area adjacent to a cruddy area is unacceptable and you are intimidated to keep going.

              No housekeeper will come near the place until it is already cleaned.  I have had friends and their mothers run laughing……

              Painting over dirt is not possible.  You still have to clean first.  And then the painting merely reveals how filthy the unpainted areas are. You cannot partially paint.

              Many things are easier to replace than clean.  Toasters, coffee makers, some rugs, lamp shades, and houseplants need more than a revitalization….they need a deep six.

              Some cleaning is simply awful and has to be done as in ‘taking castor oil’.  Ceiling fans top the list, but screen door/storm doors and the thresholds are tedious. Appliances (damn that Cuisinart) are better tucked out of sight.

So we are getting there…it will be easier now with no daylight. Might even consider dusting…..

Short Answer to ‘Why Things Are?’

Events of the past year, reaching a crescendo in the Paris dystopia.  Media addicts on both the supply and demand sides reached their usual exaggerative peaks.  I have not been shocked or surprised.  Why?

Two fundamental elements have changed in the 21^st century, pushed by technological change and the cumulative effect of repeated short-termism – the structure of societies, and the symmetry of solutions.

Experts, researchers, and reporters accustomed to measuring year to year phenomena from economics to behavior are using old models of how cultures, countries, and groups are constructed.  There have been so many significant structural changes (all anecdotal, but piling up) that the family is not the same family, the society is not the old structure, and groups previously identified have reformed or split. Thus, the data and statistics are not incorrect; they are merely measuring and analyzing the wrong things.  The broad measures no longer suffice, since every part of our world is now an assemblage of many smaller parts, all difficult to deal with as a block. All the experts are not wrong; they are just off the mark.  Structural change explains why.

We love reliable structures.  For work, or opinion, or convenience we relax in the knowledge that people and places and things fits nicely into broad catagories.  They no longer fit, and we are no longer comfortable.

We also love linear explanations and solutions.  Cause and effect is probably taught in formative years all around the world. Explanations appear inadequate and the solutions attempted fail to fully achieve objectives – because few things are linear anymore. You cannot have a ‘war’ on anything from drugs to terrorists because the problems are asymmetric and the attacks are linear. (Think whack a mole)

Each month the experts appear increasingly foolish and the problems more intractable.   I am a bit relaxed about how all our leaders and/or heroes appear foolish.  I am more concerned that the proper (asymmetric) solutions fly in the face of our core beliefs….like our constitution.

How to be a really bad (stalking) target

This piece is for you to pass to grandma and grandpa (unless you are grandma).

I met a nice pair of ladies, out at my roadside honor vegetable stand. Subsequently and randomly the younger one (a redhead) showed up from time to time to help me pick tomatoes and squash early in the morning.  Happy to have the company, I was charmed.  Later in the summer mom came along and bought some baskets and vases for a wedding she was doing – again it was not a waste of time and they were charming. In case you don’t know, Zeke and I don’t have a lot of visitors (at least I don’t), but in vegetable season there are neighbors who enjoy my garden almost every day. The redhead must have come a half dozen times and mom twice.

Last weekend, summer long over, they popped in on a Sunday and visited the greenhouse and picked up some decorations and vases. Both charming, mom breathless, they hit me with the pitch.  What I really needed to do was come to a full day seminar with them – it would be really well worth it --- trust them.  Repetition of the invitation – almost insistence – got me to say ‘I’ll think about it.’

Of course the internet told me that this was all part of the Landmark pyramid scheme (a descendant of Erhard Seminar Training) which insidiously invites vulnerable people to free short seminar and then longer seminars for a small fees  and then the fees increase and once they are imbedded in your life they get imbedded in your finances.  They are patient – they wait for the elderly to enter into decline.

I was at the gateway, but nevertheless I was shocked that they had been essentially stalking me all summer long and were giving their gateway pitch, foolishly, to the wrong guy. They may not even be the perps in the scheme, since the design is to hook multitudes to the free seminars and use them to recruit more participants so they can target the best ones.  My ‘mom and redhead’ might just be pawns.

The census lady told me that 30% of households are single person, mostly older.  How many of them are being stalked?  How many of them become victims of persuasive rhetoric?  Maybe I should volunteer to the D.A.’s office to go undercover? Nope, that would be out of character.

Come to think of it, they never paid me for the vases and decorations.

Big Deal for everyone to be concerned…..about us not them

China, is appears, has been burning more coal than previously announced (14% or 17% more, depending on the source).  This is a lot of carbon by any standards.  My own recent experiences with PRC is that they probably did not intend to do this, but they still have a 20^th century bureaucracy (soon to be minus a few heads) that is clueless about things like unintended consequences.

What should be of concern is our officials.  Consider the possibilities:

1. Our officials did not know.  Hard to believe since they know Xi’s underwear color every day.
2. They wanted to suppress the information and negotiate behind the scenes. After all the Chinese have made a 20 year climate commitment and are shocked by their own air quality.
3. Revealing this data during the political campaign season would hurt/help key people.
4. The addition of information like this feeds the science denial folklore
5. There is more, possibly mercury data that they are burying.

All this is in the age of public pronouncements (by all) urging more transparency….

Blame it all on the short form

Astute or trained observation not required – everyone is now captive to the short form.  Small screens, sound bites, elevator speech, wisdom in 140 characters, messages for drive-time radio – they are now the currency of the majority.  Combine this intellectual attention disorder with an infusion of highly skilled rhetorical persuaders and you get extreme, shallow, views. The humans are smart, their phones are smart, but chronically under informed and seemingly content to stay that way.

Sometimes they will search, but only read bits on the small screens and never go to the pages after the first. The long form interview survives, but for a small minority.  The long form feature in print or film also survives, but for the few who are not continuously interrupted by device creep in their lives.

Little wonder that our politics are bollixed (technical term) and our public discourse shallow.  Persuasive rhetoric leads to cognitive capture no matter what fallacies are imbedded in the conclusions.  Fallacies, after all, require the time to dissect, analyze, research and debunk – no time for that. All argument becomes polarized (no time for nuance) and discussion of underlying facts become swamped in reductive and inductive errors – no time to construct proper arguments.

Here is to the reclusive lifestyle – we can revel in our large screens and long written presentations. The hubris of knowing you are either correct or well documented is of great comfort, but doesn’t solve anything.

What must be said…loudly…to politicians

Do your job. Make the government work effectively and with luck efficiently.  Do your job. Repair what needs to be fixed, as in roads and bridges; pass a functioning budget; and follow the expert guidance of the commissions that you funded (such as reducing the size of staff).  Do your job. All other issues are peripheral – nice to help your popularity but not relevant if the government continues to malfunction.

Most experts in risk tell us that the number one long term risk in the US is continued dysfunctional government at all levels.  We all have to tell them to focus on the basics, or get out.

And it is time to get everyone to vote.

Acknowledging deep personal failure

I finally have to confront my own long term philosophical absolute failure, and share it.

1) Over time I am aware that I am extremely antiwar.  It makes no sense to kill so many people and destroy so much in commitment of life and treasure that most often has no result.  Yet we are fighting non-stop wars, and forward contracting for ten years for more war, while politicians cry for even more.

2) I work on economic development and progress in general, whether infrastructure or human capital.  Yet all around us the economic drivers of growth are in decline and neglected; and in place we have destruction and decay; while those responsible fritter away time on things none of their business.

3) Fifty years ago we worked hard, protested, and even marched against tribalism.  We devoted months and years of our lives to stop absolute adherence to tribal groups and practices like apartheid. Yet now everyone seems to cluster to tribal instincts – cultural, racial, or belief systems – and apartheid is back.

4) At the end of the day I am a bit of a humanitarian, recognizing that how people treat people matters. Yet everywhere we look we humans are practicing man’s inhumanity to fellow man. Somehow the simple delineation of what is right and what is wrong has gotten lost in cognitive capture.

I can’t watch the television news and commentary.  I cannot read short form articles.  I am a failure.

Remembrances of things past

We are a long distance from Swann’s Way in years, in attitudes, and in wear and tear. Events trigger echoes from our personal histories – it is wonderfully self-indulgent.  I find that the recollections are stream of consciousness, just like Proust, and filled with time traps where it is easy to get lost.  I do.

Although time has calcified dominant views, and as someone who really prefers plants and animals to humans the switch to autumnal colors and smells is better fodder for daydreaming. Later sunrises reveal and confirm Spinoza’s pantheism so we can carry on and grow older with no grace whatsoever.  I would surely prefer starting and finishing each day floating in fall tranquility, but everything intrudes.

The animals do not drive vehicles.  The trees and plants do not operate bulldozers, whose backup signals reverberate all day long for extraordinary distances even in the countryside.  The garden is not self-absorbed and tribal, but humans are. Perhaps we are all destined to be reclusive.

The Singular, if understated, message from the Fed

September meeting, announcements, analysis and reactions focused on the technical details; but I heard one clear message – the growth and normalization of the U.S. economy is confounded by the behavior of the U.S. Congress. Without fiscal participation, monetary policy is at best constrained.

Yellen’s statement merely referenced the situation, but all manner of historical comparisons remind us that some level of fiscal stimulus gives monetary policy leverage for growth.  We have conflict, sequester, no energy policy, little attention to infrastructure, and a budget process overwhelmed with peripheral discussions and not economics. The Fed is forced to the sidelines.

Few if any of the political candidates offer hope to change the impasse.  The message now is clearer than ever --  the U.S. needs an entirely new cast of characters in politics.  Perhaps professionals who care about more than their own electoral success.

Garden September cleanup –TRASH your tomato plants!

It may be a little more work, but please take the time to pull out your tomato plants and put them in the trash --  no mowing, no composting, and no burning (incineration, maybe, if you have no airborne ashes).

The reason is a family of diseases generally referred to as blight.  The source is a set of spores in the soil and plants, and the effects emerge next year.  So please please please take the time to fully clean up plants and dead leaves and get them off your property.  Ask neighbors to do the same (blight is airborne).

Then plan your garden for next year to place your tomato plants in a different spot, and never near potatoes.  Everyone cleaning up will get rid of this stuff.   from Stimigo Farm.

Where did the Chinese hide China?

Six day trip to Beijing, with a pretty hard work schedule.  Have not been north of Shanghai for 17 years, and what I see is a shock – not the gentrification and terrific infrastructure, since I know the effort put in to ready the city for the Olympics.  China has disappeared from view. Even outside the Central Business District, you have to wander deep into the neighborhoods to find an outdoor barbeque or hoards  of street vendors.  I wanted to find a vegetable market, but I had too much work to do.  There are supermarkets now, and they are awful. I cannot help but think that the bureaucrats made one too many trips to Singapore about a dozen years ago and we a suffering the prophylactic result. I guess we should be happy that nobody in the town spits on the sidewalk anymore, but it is a welcome relief that everybody (men) still openly picks their nose.

The question we seldom ask

All the news stories – all the pathos that the twenty somethings roll out with their vocal fog at its most intense fill the airwaves.  Are we really desensitized to the 20 million refugees wandering across our television screens every evening because they are so far away?  After all the US has always taken in international refugees (70,000 – 100,000 and often to our country’s benefit) but compared to the German commitment to 800,000 (they really need the labor force) it is both small in number and clearly inadequate.

Do we have a humanitarian obligation – our country, our families, our communities?  Nobody wants to talk about it – we pay taxes and contribute to charities for that sort of moral compass resolution. Unfortunately one might say the American politicians (not you and I of course) precipitated all of this displacement with their war, excuse me, conflict instigation policies for the past two decades;  but that is beyond the point. There is a humanitarian need, no demand, right now that has paralyzed the West.

Our governments are on holiday, our churches are empty now so nobody hears, and our international organizations are swamped.  Not until each individual asks what their own personal obligation might be can progress be made.  For those who listen, let me debunk the argument that creating more refugee relief will generate more refugees – the migrating masses have nothing left at home.  The classic nonsense between economic migrants vs. refugees is moot with this event.  So is ignorance.

 

 

August was an excellent month for the environment but not green supporters

Reviewing the news items for the past month (while listening to Living on Earth):

              Promising research has emerged on RNA use in agriculture, which will slow GMO

              Carbon reduction technology has now been proven on a small scale

              Tesla appears to have solved a lot of the engineering problems for solar storage

              Public noise from science deniers has almost ceased

              Even Californians have proven they can conserve water – agriculture too

These are major, well documented break-through in technology and behavior, but why are green supporters miserable?  They continue to complain, non-stop, about everything from historical disasters (New Orleans) to the prevalence of green lawns (21% of water use) in the US.

I can be charitable, and point out that the technology that can really begin to attack carbon, reduce risk in agriculture, revolutionize individual travel, and modify wasteful behavior are all long term efforts with long term results.  The sound bites and airwave rants of environmentalist are all short term in focus. They all make a living claiming that the sky is falling.

How about the theory that ‘greens’ just like to and need to complain all the time?

Corruption is no joke

Long an advocate of the view of the US as the most corrupt society in the world, I submit:

‘Meghan Kelly and Donald Trump walk into a bar [pause].  They order drinks [pause].  As the drinks arrive Donald Trump removes a large brown envelope with USD200,000 and hands it to Meghan Kelly.

They both raise their glasses and drink a toast to Charles Van Doren  [drum thump].’

The Secret to Donald Trump’s success

Americans probably do not know that their country is possibly the most corrupt in the world.  The average citizen has little comparison to make; but with the sheer order of magnitude of money, complexity, sophistication mixed with technology give our politicians much leverage in many dimensions.  They are corrupt, the legality of which is twisted in the complexity of the laws and rules (which they wrote).  Donald Trump is many things, but he is not overtly corrupt.

When Donald reminds us that the money forces cannot affect him, he is ‘speaking truth to power.  they're going to say what others don't want us to hear’(from Geoff Nunberg).  and Donald is speaking a truth that Americans want to hear, finally.

He reminds everyone how money has corrupted every single politician.  We need the reminder, and I hope that as his lead in the polls dwindles his clear message does not.

Media commentary (radio, TV, web) is mostly Bloviation

bloviator

1. A public figure, with access to media coverage, who makes outlandish, strident statements on issues, thinking that the average man will care about their opinions.
   
   2. Someone who pontificates on issues of which they are uninformed, yet pretend to be expert.
   
   3. Pompous blowhard, intentionally speaking about topics on which they are totally unqualified.  

bloviator criteria:

Inflammatory rhetoric works best when the

speaker can square off against traditional targets

 

When they portend to be speaking truth to power,

bloviators deliberately attempt to say what others

don't want us to hear.

 

Their bravado is always sham bravado. They're not

 going to run the risk of saying anything that will make

 their own partisans shift uncomfortably in their seats

 

The "hard truths" bloviators tell are claims intended to

get a rise out of the people on the other side, to the

gratification of the people on their own.

 

In today's clamorous media world there aren't any

silent corners left— everybody is talking at once,

 

The bloviators have to be pretty strident to get heard

over the din and clutter.

 

These days, telling it like it is means testifying

to your anger with plain talk and raw invective.

 

 

 

July tomato (and garden) tasks

Sure it feels like Louisiana…and we should all check on the elderly….but don’t neglect your tomato plants.  Keep them tied up and remove the bottom leaves (they are useless).  You want as much air to flow through as they ripen. Weeding does not have to be perfect, but do your best in the heat.

Summer squash of all varieties comes fast and fuurios right now CHECK BOTH MORNING AND EVENING so they do not get elephantiasis and become relegated to the brad line.  Try this handy idea for surplus:

ZUCCHINI PANCAKES

---

□   3 eggs
□   2 zucchini, grated
□   1/2 c. whole wheat flour or stoneground cornmeal
□   Add more flour or a little milk to make pancake consistency

Stir the eggs into the grated zucchini, then mix in the flour until all the lumps are gone. Fry the batter like pancakes with a bit of butter to keep it from sticking. Delicious topped with grated cheese. (or nothing)

These are a great finger food and a balanced meal, and you can add corn or other veggies. Put them in the fridge as a cool side dish for later.

 

Gardens after a heavy rain

I enjoy when my visitors/neighbors laugh at my shoes—the ones piled up on the porch caked in mud and stone.  I have a particular devotion to getting out in the gardens after a heavy rain.  Good news – although the weeds are easier to pull it might not be necessary to ‘clean weed’ everything.  The bad news is that cultivation of some sort is, in my view, critical especially after a heavy rain. So is mowing.

Insects of all sort love puddles of water, and not even puddles.  They come out to party after every rain, but the soaking and pounding rainfall of late forms (courtesy of Chester County clay) a particularly fertile surface for bugs. So I encourage everyone to join the muddy boots club and scratch/hoe/or even Mantis every surface you can around the plants you cherish.  Even the Japanese Beetle visitors can be slowed.

The more serious issue is rutting when cultivating with a machine large or small.  Soil compaction is not your friend, so you have to pick and choose where to run equipment depending upon how quickly it drains or dries. I start at gardens at higher levels and work down very much my experience. As mentioned, mowing is also a deterrent to bug proliferation – too many of the critters are airborne so that even nearby weed patches can be breeding grounds for visitors you do not want.  Again try to avoid rutting, but running a mower as soon as possible after a rain is not to cut the grass, but to thwart bugs.

Best mud boots?  I still love muck boots and their imitators.  Older crocks which lace up work as well – and so do wind surfing booties, but the rubber slip ons generally slip off.

The definitive word on pinching tomato plants

‘It depends’.  There are wildly diverse views on pinching.  Advocates note that you can get faster fruit (true) bigger fruit (sometimes) and dense foliage (often).  Opponents say it’s a waste of time. See http://tallcloverfarm.com/326/tomato-plants-leave-the-poor-little-suckers-alone    Me?

For starters, determinant plants do not need any pruning at all, since they stop growing on their own.  I suggest if you can let the plants spread out let them go because letting the summer breezes pass through the plants is a great beg deterrent. One pruning that is necessary is removal of the lowest leaves just as they begin to yellow – they are of no use to the plant.  The rest depends on your garden and your available time.  I do not pinch – at least not tomatoes.

An honest analysis of getting old

I’ve been at it for a year and a half now --- watching, reading, discussion with experts, and even exchanges with normal people.  I have tried to parse and categorize old age based upon what actually occurs, and like everything else it is complex. Without granularity I have reached three conclusions I can share at the outset, and the first is the bad news that growing old is, without exception, the management (or lack of) of decline.

Older people (this is not chronologically dependent) can then be considered based upon how they are dealing with the mental physical and social decline those progresses at a variety of paces.  The guy toolkit is not very well prepared for this task -- our fathers give us few insights as they age since they are facing the issues for the first time.  My dad gave me some of the bad news, but more about all the funerals he had to attend and issues dealing with an aging spouse.  He was in poor health, so his issues involved the medical care he needed.  He never told me, despite many lengthy conversations, of the forces of decline. He never shared hints as to how he was dealing with it.

Impossible to ignore, like gravity, the forces of decline make multi-tasking an ordeal; first modify and then cripple physical activities that were routine; and risk obliterating any social skills (some of us have few to begin with).  Your scope of activity mental and physical begins to contract and then shrink before you realize it; but most of all you are confronted with the need to choose which of your legacy activities to retain and which to jettison – you cannot do them all.

Yet we try to carry on.  So many older guys keep up their work and exercise and hobby routines no matter the age related difficulty.  They try to keep up the rigors of travel, and the volumes of reading or gardening that they have always accomplished.  After all they have done it for years.  So my second insight is that early on in the aging process is that you must pivot from doing everything you want to do to selecting activities and levels of activity from the deck you are dealt.  Pivot to a careful choice recognizing limited capabilities now and less in the future.  Some are easy (this old guy is not climbing ladders anymore) and some are painful (no more day trips to the shore) in the realization of what is no longer possible. Pivot you must, and there are no guidelines in the guy manual on how to do this.

Failure to pivot to a world of selected activity usually results in a total reset.  Some call it retirement or recovery (from a medical event) but older people inevitable have to reset their lives to a different pace and scale.  This reset could be managed and planned if somebody would tell us how to do it.  The real estate industry seems to market the downsizing of homes, and the warmer climate invite retirees to relocate as part of their reset.  If you are an exercise fanatic you can purchase a condo in an athletic resort in Florida to suit your future needs.  A reset is a big deal, but physically and financially this is the third conclusion -- everyone must plan some sort of reset. You cannot reverse mortgage out of the inevitable decline in everything else

I am comfortable with this decline/pivot/reset conclusion. Now I see others in terms of how they are dealing with these three forces. Not very well, I am afraid; since life brings a few more cards to the deck we are dealt. Foremost is medication and medical treatment.  Older people are consumed with often excessive meds and doctor visits; trapped in a health care system that by its own admission overdoes the testing and treatments and medications.  These old boys are seldom clear headed anymore, so more often than not they let others make choice for them.

The other card that pops up in the deck like the joker you never thought was in there is the death of a spouse.  Not supposed to happen, some of us old guys have a sudden void in all aspects of their lives that is impossible to anticipate. The dog listens well, but leave a bit to be desired in conversations.  You suddenly realize that most of your activity was tailored for two people rather than one.  Going out to a restaurant by you becomes a feed and now a meal.  Going to the movies loses its charm when solo.  Invitations to parties evaporate. Visits (frequent) by single females are just plain weird. My conclusion is that this is the most serious motivation for pivot and reset.

After the medical filter, I look at old guys on how well they face the world by themselves.  I am still working on this one…if you want details ask the dog.

Seemingly excessive discussions of health issues

Where to start, from someone who sees a recent trend in individual behavior as increasingly self-absorbed and dwelling on real and imaginary health problems, and as a proponent of the ‘mind your own business’ school of social discourse?  But it is unavoidable, these discussions of medical and emotional problems.  Maybe we should not ever greet anyone with ‘How are you?’  But that will not stop the inevitable flow of the narrative of doctor visits, recurring problems, potential procedures, and of course medications.

Friends and family and acquaintances are at the very least swept up in discussions of all things medical.  The world, and the bodies of these adults and of course their children and parents, cannot be degenerating at such a rapid rate that that is all there is to talk about.  At the usual risk of offending everyone, there is clear behavior in excess here.  The fixation so many have with health issues all the time such that it fills or dominates conversations is really IMHOP boring.  But what do you do?

The Guy Manual, if ever written, should be a guide to behavior reacting or even anticipating things we do not normally anticipate.  There is no chapter in the Guy Manual on what to do when all those around you seem to have drifted into a hypochondriac fog. Often they are unavoidable, since family members are often caught up in the medical morass(es) that fill everyday life. Frankly, we want to be sympathetic out of courtesy, but we do not care about their aches and pains, or syndromes, or medical agenda that make doctors and pharmacopeia on the top of mind.  We really do believe that a) it is none of our business; or b) it is really boring; or even c) there is a deep seeded psychological problem behind it all.

Clever guidance would be a way to avoid the conversations, or those who insist on pivoting each and every conversation towards health issues -- often difficult. Crude guidance (for those of us with few if any social skills) would be to preempt conversations with rules – ‘I do not want to discuss health and medical issues in any way’ may well be off-putting to exactly those we wish to put off. Redirection to another topic may well work for those who can take a hint, but simply changing the topic of conversation several times will not stop those fixated on things medical.

A couched offensive approach currently has my favor.  Each time they insist on pivoting the conversation to their favorite health topic ask them a foundational question.  So for example if they begin a litany of things they cannot eat you inquire if they are familiar with orthorexia.  If they constantly talk about doctor’s visits ask them if they have read about   somatoform disorder^[4] .  If they talk about the disease du jour ask them if they know about the Internists study  Choosing Wisely    .  If, inevitably, they talk about all manner of medications ask them if they have studied ‘polypharmacy’. At the end of the day there really are better things to talk about.  It sure beats simply calling them boring hypochondriacs (maybe). At the end of the day you can always just walk……

Greens cannot ignore the fundamentals of finance

There is clearly a big gap in most of the commentary from the ‘bright side’ of the green arguments ---no understanding of capital.

The reason I say the good guys are winning is that all capital flows globally will now avoid fossil fuels like the proverbial plague.  (here is my rant) .  Not even ethanol.

MOST DO NOT REALIZE THAT PRIOR INVESTMENTS ARE SUNK CAPITAL THAT CANNOT BE REVERSED  The coal fired power plants, the crappy oil cars, the miserable electric grid, and even the production of resistant antibiotics are all funded by capital that is through the pipeline of annuities and pensions and insurance policies and coupons that grandmothers (of politicians)clip. Stopping the use of old oil cars stops payments to pensioners (in pensions that are already under water).  So the main enemy is time*…..it will take time for these things to work through our capitalist system.

Old coal fired power plants are a good case (and our most egregious environmental sin) ---  even the operators do not like them and are happy to pay fines and insurance policy bills as long as they make their bond payments.  Raising capital for scrubbers and conversion is not possible at this time.  Same for Duke energy (current poster child) who would love to raise capital to properly entomb coal ash but is stuck (at least until their bankruptcy).

My favorite case right now is used batteries…..clearly a plague on the green scene.  It was announced this week that they have found a way to take (some not all) of used batteries and make them into a home (stationary) storage system in a financially viable way.  Same for spent nuclear fuel rods….but all of this takes time* AND  CAPITAL.  So (end of rant coming) keep to the ‘right is right and wrong is wrong’  theme, but watch the capital…

*some cheeky guy might site the existence of GADD  --Green attention deficit disorder

Pea Heaven

Peas Peas Peas Peas…finally filling and delicious.  A sure sign of summer, no matter how late.  In salad or soup hot and cold or certainly raw  the non sacrin sweetness is unmatched and make the aches and pains of gardening more than worthwhile. I understand you can purchase fresh picked peas from Amish garde3ners…but make sure they are very recently picked. So nice to find something simple and awesome!

Derp, derpy, derping, …whatever

I would like to say two nice words about the younger generations, who I take great delight in often belittling..... South Park.  Sure they are overly obsessed with each and every famous episode, but the bits that ooze into our culture are priceless….take Mr. Derp.

Mr. Derp repeats, over and over, his platitudes (attention youngsters this is called cognitive capture) despite evident facts to the contrary (attention millennials this is called Dunning Kruger). We see it so often it now gets into the mainstream – politicians and of course economists are labeled Derpy.  In public.  In the press. It sounds so innocent and silly to us older folk, but at the root of derp is contempt, make no mistake.

Not since John Stewart became the sole source of news for several generations has there been a popular culture icon with such a profound effect.  Embrace Mr. Derp.

The Two Dollar Bill is Back

Full disclosure – I have a vegetable stand with an honor box.  Stories about the honor box and notes from people who have no cash (and IOU 75 cents) could take three pages.  I have noted that this year there is a small flood of two dollar bills, when I had not seen them before.  I get a Suzy B every once in a while, and often the ‘ashtray dump’ of a pile of small change, but never smiling Jeffersons (remember?).

So, as a curious mind wanting to know, I asked several local merchants (yes, bars) if they have been getting them as well, only to learn of a cascade from the local gentlemens’  clubs that is the source. How remarkable!  First, that they would abandon one dollar bills when making change for customers as an incentive to double the tips for the staff (can you imagine asking the lady for change for a two?)  but more remarkable that the effect from one small industry can move so broadly so fast.

Lest we forget, it was the adult internet entertainment industry that begat efficient online payment systems ten years ago.  I wonder what innovations are next?

Gardening…cool weather vs hours of sunlight

Worried about your warm weather plants? Think about the hours of sunlight (even with clouds) that they are enjoying without hot winds or heavy rain.  My friends who are the real experts say that now that the sun rises at 5:30 and sets at 8:30 the tomato plants are very happy no matter what the temperature.  It is not too late to plant tomato plants, but plant them deep.  We still have vigorous and large plants in 20 varieties that you can still enjoy this summer.

Don’t worry about the cool temperatures, only the cool nights.  Many gardeners cover their plants when the temperature approaches 50.  The best is still a ‘wall ‘o water’ but there is a risk of burn when there are no clouds. We will have a week of clouds. The cloud cover will make your peas and greens very happy too. Unfortunately, weeds are happy too. Leave your shoes outside…..

Memirial Day Musically

Half the stations on the radio are running patriotic songs with military bands and the same narrative that was probably used 50 years ago. Half the stations are sneaking in (or featuring) protest songs from every era – after all our wars never seem to stop.

Cannot avoid thinking of the stupidity of all that destruction.  The intense passion and desire to send armed forces to third world countries to reverse any development that has been achieved never ends. It appears that contracts have been signed with DD Eisenhower’s favorite complex for another ten years in Kabul (without any discussion in Congress).

When will they ever learn.

Trying vs Cheating

Hot news topics include the Wall Street cheaters, and their quotes ‘If you ain’t cheating, you ain’t trying’    in all the press.  Actually this oft quoted phrase with better grammer can be attributed to Mark Grace when he played for the Chicago Cubs.  It is important to have a look at the world we know.

On Wall Street, they now have focused on ‘conduct risk’ and individual responsibility for ethics.  On main street, companies and retail merchants collect massive data sets, so that if a customer or employee behaves unethically, eventually the computers catch up.  Russian  motorists  find a dash video recorder is essential, and now everyone has to wear go-pro’s (hopefully turning them off in the toilet).

I did the money count at the honor box on my roadside vegetable stand last night.  As usual, there was more money than missing plants and a couple of notes with ‘I owe you 75 cents’ messages. Go figure.

Missing rail passengers

Fifteen years ago there was a horrific rail accident outside Paddington Station in London. Death and injury (31 and 250) were shocking, and the effect on hundreds of others who walked away unscathed was severe as well. The story that often escapes notice was the fairly large number of people unaccounted for.  They did not have a passenger manifest, but the two trains were full, and the dead and injured were added to many who were interviewed and several dozen people simply went missing after the accident.

Each year a few of the missing emerge and they all have similar stories – a contentious divorce, a difficult job, family problems, financial overload, and a general sense of frustration that gave them the brilliant idea to take advantage of the situation and simply walk away, presumably into a new life.

Traveling to places like Rio or Bali or the beach towns in Australia north of Sydney you can go to a restaurant and sit at the bar where nobody has a name. They seem content in their choice, having unburdened their former selves from the weight of a life too heavy.  They will never go back.

We should not expect all the missing from the Philadelphia rail crash to be discovered, at least not locally. They will be joining their fellow travelers in Bali.

Looking at the past as ‘self-fulfilling panic’

A beautiful Spring morning complete with the wafting aroma of wisteria and the morning birds is really a nice time to reflect on disasters over the past decade.  We get help from the thoughtful pundits, who tend to do the same.  Here is my conclusion:

The financial crisis, the global political crisis, and our own personal crisis (potentially plural) are the clear result of leverage (financial and personal), non-linearities,multiple equilibria, and self-fulfilling panic.

To be brief, just think about overextension we have all done over the past decade….more than our individual or collective capacity – that is leverage (with its cousin, risk). Observe that old patterns and structures have diminished, so people and institutions no longer follow linear (straightforward) paths. Then note that most strive to envisage a logical stability, when in fact there are several versions of stability that clash.  And finally, most of our fatal flaws come from panic. Mine did,,,

There, that’s the answer….don’t you feel better already?

 

Druggies

Drugged the dog last night…he had smashed his leg while jumping up into the truck and the vet said there was no damage just ‘soft tissue bruising’ and prescribed  Mobic – a popular human anti-inflammatory that is cheap (about 35 cents a pill).

I hat drugging anybody, particularly family, but just as I gave him his cheeseburger/ pill treat he looked up at me and said ‘how ‘bout you old man?’  So I (for the first time) popped one ibuprofen PM.

We both slept like babies…..

The importance of fifty degrees

Here comes may --- the ladies in my family always started to set out plants on the first of May with the same diligence that they applied to planting peas on St Paddy’s day.  But they also covered their plants at night to protect against the chill in spring evenings (and clear skies). All the greens are happy in this weather, but your summer plants simply do not like extreme cold.

If you want to put out your started plants, harden them first for a couple nights under cover (even newspaper) and then watch the weather.  Nighttime lows below 50 degrees will set back your young plants, unless you cover them as well.  The soil should be 50 degrees minimum as well (don’t throw out that old thermometer) if you really want to be sure. One way to ‘cheat’ is to warm the soild with anything black (there is no science about black plastic, by the way) that the sun heats up nicely.  You don’t see them so much anymore but the old boys used to use ‘tomato caps’ to cover, and now they sell expensive ‘wall ‘o water’ covers. Nighttime setbacks will give you spindly plants and less harvest.

For my opinion, it is worth the wait for a couple of weeks if you can do a cold frame against the side of your house – summer plants love full long sunshine and degree days and we are not there yet.

Drones….worse for animals than hot air balloons

If you have animals and you live in the countryside it is a good bet that you (and your animals) detest hot air balloons.  The sound and image terrifies horses and cows and drives dogs nuts.  But now we see that drones are worse.  One hobbyist floating a drone above horses taking what is supposed to be a serene video causes a stampede.  Who cares?  Politicians, rather than getting out in front of issues like this are too busy raising campaign money.

At last… a star at the Fed we can cheer for…..

Right or wrong, Fed officials get volumes of criticism; but now the Federal Reserve system can be proud to cheer for one of their own.  On Saturday, Bryant Jennings faces Wladmir Klitschko for a high stakes heavyweight battle at  Madison Square Garden . Jennings was, for 10 years, an employee and the Philly Fed; and is universally admired by his colleagues. I think we should all cheer him on for the symbolism at least.

 Oh, the irony……

China growth as a case study for global innumeracy; another reason to ignore media news stories….

Economists are boring, but admitting to finding Hank Paulson refreshing is beyond admitting boredom; but I confess the saturation of the airwaves with interviews of his views on China while promoting his new book (Dealing with China: An Insider Unmasks the New Economic Superpower by Henry M. Paulson) was a personal pleasure.  We have been pummeled by the media with commentary about how the China economy is in trouble as standard GDP year on year growth approaches 7%.  Rubbish.

Paulson gets it right on the fundamentals; disaggregation of the forces and drivers is the best methodology for looking at China.  What I found interesting (over and over again) was his refusal to deal with the macro number.  Again he is correct. Financial innumeracy amongst politicians is endemic.

As the basis has expanded, normal (untransformed) year on year growth will always rescale, but those in the media and politics cannot grasp this concept. Those of us who are boring just have to keep reminding them how to pronounce ‘logarithmic’. This is about finance and economics and budgets and all manner of detail which should be their expertise, but is at the end of the day a demonstration of their lack of suitability (IMHOP) for the job.   It is not the law of large numbers, is it just basic ignorance.

Quick reads:

Why China's economy is slowing  Mar 11th 2015  by S.R. | SHANGHAI

http://www.economist.com/blogs/economist-explains/2015/03/economist-explains-8

The law of large numbers (financial, rather than statistical) applies to nations as well as to companies: the bigger an economy gets, the harder it is to keep growing at a fast clip. Growth of 7% this year for China would generate more additional output than a 14% pace did in 2007.

The simple arithmetic of China’s growth slowdown     Danny Quah | February 18, 2015

http://www.brookings.edu/blogs/future-development/posts/2015/02/18-china-growth-quah

The conclusion? China in 2015 is a very different economy from even just 10 years ago. It has changed far more than the world at large has in this time. A 7 percent growth rate is obviously lower than an 8 percent one. So, whatever good comes from a 7 percent growth rate, at the margin a growth rate a little higher will be even better. But, quantifying the changes that have taken place in the global economy, a 7 percent growth rate for China today means something even more positive than did a 12 percent growth rate 10 years ago.

Dirt deception

It important to get angry about really silly stupid stuff….but have you ever tried to buy dirt?

Speaking of taking advantage of innumeracy, you can buy bags measured in quarts or square feet or compressed or with filler added….it is wildly confusing since compression shrinks the visible size of the bag.  The giant compressed bales of Pro- mix are the best deal, but you would never know from the packaging.

Remember the measure: There are about 25 and 3/4 dry quarts in a cubic foot. A 20 dry quarts package of potting soil is approximately 3/4 of a cubic foot. So the 16 quart bag in the grocery store for $6.95 is much more expensive that the $8.99 one cubic foot bag at the big box store. Or is it?

Of course it is…there is a reason they call them smart phones…44 vs. 34 cents per quart.

We already have a strong, articulate, experienced female leader

Hilary Clinton is having a very bad week this week.  Christine Lagarde is in the U.S.

The head of the I.M.F. is knowledgeable, factual, agile in interviews, and very very impressive under pressure. She is a young vibrant and articulate sixty year old who is clearly a leader without peer who transcends any discussion of silly topics like gender or nationality or politics.

Personally I appreciate the history that she turned down the opportunity to be a leader in national politics and instead devoted her talents to world growth and development. Lagarde has also avoided foolish mistakes or statements or associations throughout her career.  In short, all others pale by comparison.

Old Fashioned Intervention

I have gotten interventionist emails and mailings for many months now.  Stress relief, packaged and disguised with all manner of new age wonderfulness. Somatic movement or authentic movement or any of the clearly well packaged mindfulness techniques are making careers for a new generation of quacks.  They prey on the kids with PTSD (and the funding behind them), they prey on the lonely, and they prey on the (allegedly) 23% of adults who are untreated and in need of professional credentialed intervention. Personally, I think this is part of the transformation of the structure of families and households, where the old extended family ties have become distanced and attenuated.

Nevermind. Let the rest of them meander down the path of spirituality and mindfulness as they strive to be centered and at peace. I prefer an early evening out with an old pal. 

The positive side of tribalism

The numbers are overwhelming with 44% of adults in the US saying they go to church and only 11% still attending weekly.  This well overrepresented minority makes the headlines with silly legislation and protest about discrimination and intrusions into the private personal decisions of other people not in their tribe.  It is tribalism the same way the turmoil in the geopolitical world is tribalism.

Technically, for those who care, these beliefs are part of the human ecosystem or a display of cognitive capture or (for the BLS) the largest entertainment expenditure in the U.S. For the holiday weekend families (whatever that is in 2015) gather and declare truce from arguments that have endured generations to essentially celebrate springtime. Outdoor folk get the opening of trout season and of course gardeners can finally get dirt under their fingernails. Even the Paganists got a blood moon lunar eclipse.

Would that tribalists could be calm and tranquil more often.

Hello Mother Nature

Might just be old age, but I feel we all hunkered down longer and harder this winter waiting for a spring that seemed often delayed.  But here it is…time to remember to wear gloves when handling dirt a lot and even some sun screen now that we will finally have a couple of days of sunshine.

The peeper frogs at night, the early birds in the day, and even an eclipse --- nature is so much better to celebrate than tired and meaningless ecclesiastic calendar driven events.

How to look at the Economy

April fool’s day is an appropriate time to listen to the news stories about the economy – none of them can be serious!  The world economy and the U.S. in particular increases each day in complexity, yet the media in particular try to focus their short form lens on a handful of phenomena.  Don’t.

A bundle of measures, not bundled but listed with relative and time series comparisons (stay awake) is the best direction to look.  A survey of surveys is better, but more time consuming; and for those of you who are students young and old, the public databases (think FRED) are perfect to answer your questions. About the Economy writ large (the big picture) or small (how does it affect me).

The answer, across almost every dimension, is that American large and medium companies are in good and getting better shape. They are growing, and producing innovation and profits while investing in the future.  The managers and employees at these companies are probably doing nicely.  But there are, IMHOP, four sectors in the economic world – Government Consumers, and Institutions all of which present a mixed picture.  In short, there are huge recent structural changes that in the U.S. show spotty adaptation and leadership.  The government is easy, since most agree that even the best are slow to adapt to new technology and new challenges. So any success in the other sectors is subject to government performance.  At worst government is slow to embrace new tools and techniques; at worst they are enumerate providers of poor quality services.

For consumers you will see the split between informed and uninformed, which has little to do with income of region. The family structure is changing dramatically (only 47 % of households have a married couple) and the consumption expenditures for all are becoming more and more of a business decision.  Impulse purchases and kneejerk reaction to marketing and advertising should be replaced by sober well considered decision about what to buy and when.  For many there is excellent planning and seemingly for an equal number there is not. Do we need a government agency to protect consumers from stupidity? Tempted to say no, I note the student loan issue, where the system has a twentysomething making $10000 loan choice without any thought. So the big picture is muddied, but you scenario as a consumer is really based on information – those who avoid doing stupid things seem in good shape.

The sector of the economy that is problematic is our institutions (some of which are government funded). They play a greater role than ever before, and they are visibly problematic more than in the past.  Institutions are supposed to fill in the gaps between companies and governments and individuals.  They should be forward looking and marshal resources for the long term benefit of all. My observation is that many are wonderful examples of what we want our institutions to be – proactive, productive, and transparent.  There are, however, a large number of archaic backward looking institutions that often appear to be focused on their own survival and not their mission.  You know who they are.

So how is the economy?  It depends. You should consider being an active economic participant.  If your company, your government (local), your institutions, and your household have their act together you are in great shape.  If any of these elements faces challenges (most of us) you should step up to meet them, otherwise your economy is at risk.