Showing posts from June, 2016

Fortune-tellers with formulas: modern macroeconomic forecasters

We'd never heard of the web magazine Aeon before, until a friend sent us this outstanding "Emperor has no clothes" article: The new astrology: By fetishising mathematical models, economists turned economics into a highly paid pseudoscience.
The failure of the field to predict the 2008 crisis has also been well-documented. In 2003, for example, only five years before the Great Recession, the Nobel Laureate Robert E Lucas Jr told the American Economic Association that ‘macroeconomics […] has succeeded: its central problem of depression prevention has been solved’. Short-term predictions fair little better – in April 2014, for instance, a survey of 67 economists yielded 100 per cent consensus: interest rates would rise over the next six months. Instead, they fell. A lot.

Nonetheless, surveys indicate that economists see their discipline as ‘the most scientific of the social sciences’. What is the basis of this collective faith, shared by universities, presidents and billion…

Congratulations to the people of Great Britain on their Independence Day!

Is David Cameron Great Britain's George Washington?

Apocalypse Now: helicopter money is already here

"Helicopter money," the process of printing money to fund government deficits, is the radical last refuge of a desperate central bank. Ben Bernanke and other academics and central planners have discussed it ad nauseum in theory, but it's never been actually tried in a major modern economy.

Except is has. And is.

Says Douche Bank viaMarketWatch:

But Torsten Slok, Deutsche Bank’s chief international economist, argues that the Fed has been employing measures similar to helicopter money via its remittances to the Treasury.

“The Fed in 2015 paid the U.S. Treasury $117 billion and dividing that by the total number of households (125 million) shows that the Fed is already giving money to U.S. consumers,” he said in a note on Tuesday.

That comes out to each U.S. household receiving about $1,000 from the government and equivalent to a 2% tax relief for households falling in the $50,000 median-income bracket, according to Slok. Get real assets.

So much for the War on Drugs

Ethereum is the new Bitcoin

The price of Bitcoin has exploded recently:

The tech intelligentsia are saying that a new technology, Ethereum, is better than Bitcoin.  Don't ask me; I just spot a trend and ride it.  I took a small portion of my Bitcoin and traded it for some Ethereum.
If you want to get started in Bitcoin or Ethereum, take a look at Coinbase, an easy place to transfer in money and buy and store Bitcoin.  Its related exchange GDAX will allow you to trade dollars or Bitcoin for Ethereum.

Trump FAIL: Trump-endorsed Congresswoman Renee Ellmers loses by 30 points

North Carolina State Board of Elections:

Still time to dump the "Embarrassing Loser" before he does this to the entire party?  Ace thinks so.

Conversations with entitled firefighters


The Wall Street Journal is way too optimistic on pensions

The Wall Street Journal is trying to make the point that pensions' assumed 7.5% rate of return is increasingly difficult to achieve, but even the Journal's numbers are still way too optimistic.

The Journal thinks that with the portfolio on the right, you can still get 7.5% annual returns.  With 12% of the portfolio in bonds, where the Vanguard Total Bond Market is yielding 2.5% and prices have nowhere to go but down, you'd need a permanent bond market plateau and you'd have to earn 8.2% on the rest of your portfolio to get that 7.5% overall.

How are equities supposed to generate 8.2% in an era of 2% GDP growth, 2% inflation, 2% interest rates, and historicallyhighvaluations?  The Journal doesn't explain.  Famed investor Jeremy Grantham of GMO doesn't think they're going generate anything close to that.

What has the above portfolio actually earned in the past year?  Not so pretty.  Here's what it looks like, assuming small allocations to high-yield, emer…

Poker is dead

Our man in Vegas writes:
GTO and the next generation

When I started in poker, the original batch of road gamblers from Texas was sainted and revered. "Nobody played better than Johnny Moss," or "For my money, Jack Strauss was the best gambler who ever walked." A lot of the old faces still frequented the games: Bobby Baldwin and Doyle Brunson at the highest levels, and guys like Slim Preston and Eskimo Clark scraping around the small games.

Fast forward a decade and a half, and poker bears little resemblance to what it once was. The new crop are the furthest thing from gold-chained cigar chompers or Texans with ten-gallon hats and shitkicker boots. They're suburban dweebs who grew up reading internet forums about combinatorics and GTO play (that's game theory optimal, for you old-timers). And at a card table full of these kids, between you and me, the old guys don't stand a fuckin' chance.

This progression of the game is impressive in one respect. Pok…