Greenspan's Body Count: Roy Kim

A 58-year-old taxi driver killed himself in his Queens home this month, marking the eight suicide in the taxi industry this year. The suicide was confirmed by the NYC Medical Examiner on Wednesday, just as the City Council passed bills to give counseling to taxi drivers facing financial and mental health issues.

The Medical Examiner confirmed Kim committed suicide in his Bayside home on November 5th, the Post reports, adding that "Kim, who had just purchased his taxi medallion last year, was more than $500,000 in debt from the deal and struggling to stay afloat." His friend, taxi driver Young Lee, told the tabloid, "He was in a lot of debt from that. For a while he was making money but then it just went slowly down and down and down. All drivers are really struggling."
Greenspan's Body Count stands at 265.


Yes, Democrats will even lie about rape for political gain

Thanks, CNN and NY Times, for working these nutjobs into such a lather.

OpenSecrets.org on Judy Munro-Leighton,the woman who admitted lying about being raped by Brett Kavanaugh:

Displaying 1 - 22 of 22 records
Money to CandidatesMUNRO-LEIGHTON, JUDY

JEFFERSON COMMUNITY COLLEGE09-23-2004$250.00Mongiardo, Daniel (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED10-04-2018$25.00Heitkamp, Heidi (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED10-10-2018$25.00O'Rourke, Beto (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED10-10-2018$25.00McCaskill, Claire (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED10-16-2018$25.00Heitkamp, Heidi (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED10-08-2016$10.00Kander, Jason (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

RETIRED10-25-2016$10.00Clinton, Hillary (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

JEFFERSON COMMUNITY COLLEGE10-19-2004$250.00Mongiardo, Daniel (D)
Money to CandidatesMUNRO LEIGHTON, JUDY

JEFF COMM COLEGE06-30-2004$200.00Kerry, John (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED11-07-2017$15.00Jones, Doug (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED11-21-2017$15.00Jones, Doug (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED10-15-2018$10.00Garrett, Janet (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED12-11-2017$15.00Jones, Doug (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED11-14-2017$15.00Jones, Doug (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED11-26-2017$25.00Jones, Doug (D)

NOT EMPLOYED10-16-2018$25.00Moveon.org
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED10-17-2018$10.00Garrett, Janet (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

RETIRED10-29-2016$10.00Clinton, Hillary (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

JEFFERSON COMM COLLEGE03-31-2006$250.00Horne, Andrew J (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED12-03-2017$25.00Jones, Doug (D)
Money to CandidatesMUNRO-LEIGHTON, JUDY

NOT EMPLOYED11-28-2017$15.00Jones, Doug (D)


You Walk Away, student loan edition

Back in the housing crash, there was a phenomenon known as "jingle mail" or "you walk away" where sad, underwater homeowners solved their problems by defaulting.

Now You Walk Away comes to student debt.
He now lives in a concrete house in the village of Uchakkada for $50 a month. His backyard is filled with coconut trees and chickens. “I saw four elephants just yesterday,” he said, adding that he hopes to never set foot in a Walmart again.

His debt is currently on its way to default. But more than 9,000 miles away from Colorado, Haag said, his student loans don’t feel real anymore.

“It’s kind of like, if a tree falls in the woods and no one hears it, does it really exist?” he said.


What's wrong with Wealthfront's Risk Parity Fund? Sleuthing using regression analysis

In January, robo-advisor Wealthfront launched a risk parity fund. Risk parity means investing in multiple asset classes, and using leverage to increase the returns from the less volatile asset classes such as bonds.

The fund immediately attracted criticism for its high fees, which it soon cut. But it turns out there's more wrong with Wealthfront's risk parity fund than the fees. In April, I noted that the fund was already trailing both stocks and bonds, and trailing AQR's risk parity fund (AQRIX) by 4%. I suspected they had way too much leverage to bonds in a rising interest rate environment, and I investigated using a very simple regression analysis.

You can do regression analysis like this with a number of programs from Excel to more sophisticated tools like Python and Matlab. You take a series of daily returns to the fund, the series of daily returns to different asset classes, dump them into the regression engine and it will tell you how much the fund's performance is driven by those asset classes. Putting just two asset classes into the regression, the S&P and a broad bond index, quickly revealed that the fund was highly exposed to bonds.

That's not where you want to be if rates keep rising. And that's exactly what's happened in the 5 1/2 months since. As rates have risen, the fund has underperformed even more, and is now down 14% for the year and is more than 7% worse than AQR's fund.

With more days of trading data, we can now run a more complete regression analysis to see what the heck is in Wealthfront's fund. As a baseline, let's look at AQR's fund first. Here's the regression output using a lot of common asset classes (I tried a few others, but these were the best fit).

Now that is a beautiful regression. The high R-Square means that with 8 generic asset classes, we have explained 88% of the returns of AQRIX. The high t-values and low p-values ("Pr > |t|") mean that each of these asset classes is highly certain to be a driver of AQR's returns. The parameter estimate ("beta") means how much AQRIX is expected to trade up with a 1% move in each asset class. So the biggest betas are to bonds ("agg"), high-yield ("junk"), commodities ("comx" is the return to Pimco's commodity fund with the returns to oil and gold backed out), and the S&P 500 ("sp"). If you add all the betas, you get 2.11, meaning for every dollar you put in the fund, you're effectively getting $2.11 worth of exposure to the asset classes.

Now let's look at Wealthfront.

Just 5 asset classes explain 82% of the return, with bonds ("agg") having the greatest beta by far. Note that Wealthfront's pure bond interest-rate bet is greater than AQR's bond, high-yield, and REIT exposures combined.

The portfolio managers are a couple of Ph.D.s who I suspect suffer from Menzie Chinn Syndrome -- i.e. too much math, too little common sense. If your backtest period is during the past 37 years of historically declining bond yields, you shouldn't count on that trend continuing forever.


Greenspan visits the Emerald Isle

Irish Examiner:
Insolvency experts are warning that mortgage arrears are still leading some homeowners to thoughts of suicide as the level of insurmountable household debt remains stubbornly high.

The Association of Personal Insolvency Practitioners (APIP) also says the ongoing problem of mortgage arrears is going to exacerbate the homelessness crisis as lenders lose patience and push for repossession.

Eugene McDarby, APIP chairman, said the crisis is clear to the 80-plus PIPs operating across the country.

“In the past week alone, I have met three clients who have admitted to giving consideration to taking their own lives,” he said.

“To wake up every morning knowing that you are in danger of losing your home would take its toll on the most mentally tough person.

Most recent Central Bank figures show that almost one in every 11 residential mortgages — representing 66,479 households — was in arrears at the end of June this year.


Greenspan's Body Count: Shannan Watts, Celeste Watts, Bella Watts

Fox News:
Shanann Watts called her husband “my ROCK!” and the “best dad us girls could ask for” in what appeared to be an idyllic life on social media.

However, behind the scene, it was a different picture that ended with her and her daughters’ lives this week.

Watts and her husband Chris – who is accused of killing her and their two girls – appeared to be in dire financial strain.

Three years ago, they jointly filed for bankruptcy, citing more than $70,000 in debt, KDVR-TV reported.

The couple had a combined income of $90,000 in 2014. But they also had tens of thousands of dollars in credit card debt, along with student loans and medical bills — for a total of $70,000 in unsecured claims on top of a sizable mortgage.

They said in the filing their nearly $3,000 monthly mortgage payments and $600 in monthly car payments formed the bulk of their $4,900 in monthly expenses.

On Wednesday, Chris Watts, 33, was arrested and held on three counts of first-degree murder for allegedly killing his 34-year-old wife and their daughters Celeste, 3, and Bella, 4. He was held without bond on Thursday with charges expected Monday.
Greenspan's Body Count stands at 264.


Democracy Dies in Dumbness

American democracy: choosing your rulers based on name recognition and sound bites from the vapid and corrupt news media.

Or, better yet, on red-vs-blue tribalism.


Yet another way Obamacare makes healthcare more expensive

Eight years too late, NPR discovers that Obamacare has explicit incentives for insurers to make procedures cost more:
The Affordable Care Act kept profit margins in check by requiring companies to use at least 80 percent of the premiums for medical care. That's good in theory, but it actually contributes to rising health care costs. If the insurance company has accurately built high costs into the premium, it can make more money. Here's how: Let's say administrative expenses eat up about 17 percent of each premium dollar and around 3 percent is profit. Making a 3 percent profit is better if the company spends more.

It's as if a mom told her son he could have 3 percent of a bowl of ice cream. A clever child would say, "Make it a bigger bowl."

Wonks call this a "perverse incentive."
Read the whole thing. It's infuriating.

Politicians, particularly on the left, are complete idiots when it comes to understanding economic incentives. They should never be allowed to create incentive structures for vast swaths of the economy.


The Fed's Quadruple Mandate

The Fed's Quadruple Mandate:

1) price stability
2) full employment
3) facilitating large deficits by suppressing interest rates and/or monetizing debt
4) supporting asset prices


CalPERS has been a net seller of stocks - but that will change

Despite CalPERS, like most government pension plans, being vastly underfunded, they're actually still paying out more money to beneficiaries than they're taking in as contributions from municipal employees and employers.

CalPERS 2016-17 financial report:

Look at the numbers circled in green. That's what they're putting into investments. The numbers circled in red are what they're taking out each year.

The green numbers were even lower in recent years. CalPERS has been putting far less into the market than it's been taking out every year. They're belatedly starting to increase contributions, and the net contributions (green minus red) should turn positive fairly soon.

To the extent CalPERS is representative of public pensions overall (and it generally is), turning from net seller to net buyer will be a tailwind for stocks. And should stocks decline over a few years, it makes pensions even more underfunded and thus requires them to buy even more. Call it the CalPERS Put.


What did I tell you people about incentives?

ABC News:
Dart then instituted a program that rewarded "serial masturbators" with pizza if they went 30 days without a sexual assault or masturbating incident, according to the lawsuit.

Since detainees who had never exposed themselves were not eligible to receive pizza as a reward, the program had a reverse effect, leading to an "increase in exposure incidents" since the detainees without prior incidents "were now incentivized to commit indecent exposure and masturbation in order to qualify for a pizza reward," court documents state.
HT: Charlie McDanger


Debt outlook so bad the CBO stops publishing it

The Congressional Budget Office regularly posts 10-year budget outlooks.

Here is the most recent:

It shows a deficit of 3.6% of GDP in 2017, 2.8% of GDP in 2018, and worsening to 5.2% of GDP by 2027. But that projection was from June 2017, long before the Trump tax cuts or the Omnibus which busted the spending caps.

Outside analysts are now projecting deficits well over a trillion dollars in 2019, or more than 5% of GDP. So what does the CBO say? They don't say.

You can see that over the last several years, the CBO has updated its projections 2 or 3 times per year. But now, with the massive tax cuts and budget-busting Omnibus, suddenly the CBO goes radio silent for 9 months!

Is the fiscal trajectory simply too horrifying for publication?

UPDATE: Whoomp! There it is!


Happy #ReleaseTheMemo Day!

Did the FBI spy on the Trump campaign based on a pee pee porn novella commissioned by the Hillary campaign?


Americans worry about what their media masters tell them to worry about

WSJ Daily Shot:
The US federal government deficit is moving in the wrong direction. Here is an updated fiscal balance as a percentage of the GDP

A trend which is even scarier than the rising budget deficit is that increasingly Americans just don’t care. For the first time in years, the majority of Americans didn’t list the deficit as a ‘top priority’ issue.

Americans care about what the mainstream media tell them to care about. When the media stop covering the deficit, the sheeple stop thinking about it.

The disinformation and election interference is coming from inside the house

The FBI just admitted in court that Hunter Biden's laptop is real. Here are 20 minutes of Joe Biden, U.S. intelligence officials, and th...