20 October 2017

Biggest Corruption

If you were a risk-averse member of the Billionaire's Boys Club, what would be your ultimate wet dream? Well??? By my lights, I'd say I would want Treasury instruments to be sold at interest rate value rather than auctioned at coupon value.

Translation: the way it currently works by 31 U.S.C. Subtitle III, Subchapters I & II, Treasury sets a return value, aka coupon, per some unit of instrument, say $100 per unit. Treasury then auctions those units. The resulting interest rate is the $100/X where X is the final auction price of the unit. If X is $1,000, then the interest rate is 10%. If X is $10,000, then it's 1%. For the last few years, X has been nudging much closer to 1% than 10%. That's driving the idle rich batshit.

Near as I can tell, nowhere in the statute is coupon/auction mandated as the method for selling instruments. Donald J. Quisling can/could direct Treasury to henceforth sell instruments with a fixed coupon (current practice) and fixed price (not auctioned to highest bidder), thus yielding the idle rich's 10% government debt. The fall out from this is clear. The secondary market for Treasuries would still be awash in moolah, and so would bid up the price of such instruments, thus giving the original buyers a massive capital gain windfall (which implies a change in tax law to remove holding periods for capital gains protection, naturally). The other, much worse side-effect is that US government debt just got lots more expensive. Yet another transfer of wealth from the many to the few.

Have a nice day.

19 October 2017

For So Long?

While watching the baseball games yesterday, I noted (for the first time, I suppose) that the home plate umpire wore glasses!!! The country has gone to hell in a handbasket. The only reason I could see this abomination was because the ump caught a foul off the mask, which he took off for a bit, on camera.

So, off to the innterTubes to find out how long this degradation of America's Game has been going on. I expected a few years, at most. Well, not so much.
On April 25, 1956, newspapers across trumpeted the news that Frank Umont had on the previous day become the first big league umpire to wear eyeglasses in a regularly scheduled game.

Damn! And to top it off, that's my sister's birthday, although not year. Instant karma.

Why the iPhone X?

The first decade of my life was spent in a 1,000 sq.ft. house-on-slab, built on an abandon wood lot. Thanks to that, the termites swarmed in the spring. Bad as it was, the parents managed to get foreclosed, so it was off to veteran's housing. This was 1960, and then at least one parent had to be a real veteran; during our years there the projects devolved into open welfare apartments.

The parents were a bit above average smarts, but below average ambition. Oh well. The point of the experience was this: by the time I was eleven or twelve I noticed that there were a lot of late model Buicks and Cadillacs in the parking area. Why, thought young Robert? Weren't there more useful and important things to own?

The answer from the point of view of those Caddy Daddies, as I eventually figured out, was: of course not. A fancy, even if old-ish, car was the most conspicuous object poor folk could still buy. Even if it meant lousy living space and lousy food and lousy clothes and lousy everything else. But that Caddy was parked outside the apartment.

The iPhone X is quite the same: a conspicuous object that doesn't do much more than far cheaper alternatives, but worth it as a measure of self esteem. Behavioral economists' fodder, for sure.

18 October 2017

New Gold, Part the Fourth

Yet another installment in the continuing saga of what it means for the US Buck to be New Gold. Today's contestant is Eduardo Porter, a many time returner. His jumping off point is the current account trade deficit. What he doesn't do is connect the dots from domestic bucks to international trade dependent on sufficient US Bucks in the system to support non-deflationary growth. That last bit is an oxymoron, naturally.

Here's where Porter finally gets closer to the point
But slashing the trade deficit for good will be very tough. That would require weakening the American dollar, the reserve currency of the world. That would be no easy task.

The dollar is the main currency used in global trade, as well as international capital market transactions. People and governments the world over store their wealth in American stocks and bonds. What's more, the dollar is the go-to currency in the time of financial crises, even if the crises at hand are centered in the United States. Against these forces it is hard to keep the dollar down.

QED
From AnandTech we get the louder drumbeat of the Brave New World; run by Corps rather than the Damn Gummint, of course.
From the beginning, the NNP and its Nervana Engine predecessor have aimed at displacing GPUs in the machine learning and AI space, where applications can range from weather prediction and autonomous vehicles to targeted advertising on social media.
[my emphasis]

I wonder. Will they take payment in rubles?

17 October 2017

The Gull Flies True

Once again, the editors of the NYT have shown their sense of humor. Two articles which illustrate an issue, just not on the same page this time.

The easy one is this Kimmel piece. Kimmel, after all, is an obvious totem these days. And he knows it.
Of course, you want as many people to watch your show as possible. But some things are more important than bringing in a big audience. I hope that we, as a nation, get back to a time where I can have a normal, well-rounded show, that's more focused on Beyoncé and Jay-Z than Donald and Ivanka. But for the time being, this is what's at the forefront of people's minds.

Paired with this piece on the Trumpcare situation.
So for residents of the nearly all-white county, who overwhelmingly voted for President Trump, the fight over the Affordable Care Act is about both lives and livelihoods, access to care and to jobs. And the cloud that remains over the law's future is unsettling.

May be, just may be, these shitkickers will figure out that the Billionaire Boys Club founder cares not a whit about them. He gulled them right good.

12 October 2017

Where Quant Matters

There's only one field where quant really, really matters and it's not tech and it's not finance (666). It's biopharma. And the reason, naturally, is that, past the discovery process, it's all about the numbers. Do the numbers from the trials demonstrate that CompoundX is really better than some placebo or Standard of Care?? Bayesians, may you rot in hell if you get your hands on clinical trials.

If you follow biopharma more than casually, you know of Derek Lowe. Today's musing is mandatory.
How many of the bullish investors in that company [Axovant] realized (or really understood) that the same exact compound had failed a well-run Phase II trial in Alzheimer's, and that since then two other drugs with the exact same mechanism of action had done the same?

I've used the epithet more than once: "as any math stat will tell you, give me a large enough sample size and I'll get you stat sig for a ham sandwich curing cancer". Well, here's a snip from a comment to Lowe's piece
I went back to look at the REVEAL results, and no wonder they are not filing it. The CV event rates were 10.8% for anacetrapib and 11.8% for placebo. That is a microscopic effect size. True, the p-value was 0.004, but that is probably due to the "black hole" effect common to many outcome trials - small difference trend toward significance when the sample size becomes large. No payer would reimburse for this level of efficacy, p-value or not.
-- Emjeff

Read through the comments. As of when I type this, they're at least as acerbic as Lowe. Well, a whole lot more. Good on 'em.