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

Plan to Keep San Diego High Could Be on November Ballot

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 historically high valuations?  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, emerging markets, and foreign real estate within the broader asset classes, and making the generous assumption that private equity returned 3% more than US Large Cap.

That looks a lot more like Jeremy Grantham's numbers than 7.5%!

It is certain that CalPERS is going to report yet another horror show of a year for its fiscal year ending June 30.

Spreadsheet here.

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. Poker seemed to defy cold calculus for some time, due to the element of hidden information. You can teach a computer every combination on a chess board, but can you teach it about tilt and when and why and who to bluff? As it turns out, yes, yes you can. Limit Hold 'Em is for all practical matters solved as thoroughly as chess, and the rest of the games will fall as quickly as programmers and neural networks care to knock them down. There's still some magic and art in translating this math to a table of meat puppets in the real world, but that's beside the point.

The game has moved beyond the crafty sharp with nerves of steel. That guy is the fish.

In another respect, this progression is devastating: it's killing poker. Not the game, but the scene. Tourists enjoyed taking a shot against the Texan with his toothpick and his whiskey and his charm. They would probably lose to him, but they got a bit of entertainment for the price of admission. And they had the sense that as much as they were gambling, the Texan was gambling back at them.

That is just no longer the case, and it is no longer the vibe. At anything above the lowest stakes, the dismantling of the tourist is clinical and brutal. The professional is frequently charmless and ungracious, and wears his contempt for the inferior player on his sleeve. Losing to the new breed is no fun for anybody.

This brings us to what we see at the Wynn this week: packed house and nobody wants to play poker. Sure, you can scrape out a few bucks, but the days of tourists and weekend punters wanting to come fire at the poker tables seem to have passed. Inside that room are crickets, and a bunch of kids who learned a lot about tactics and perhaps less about the long game.