Sunday assorted links


#1: Shades of tulipmania

More dollars than sense.

Of course the seller may have more sense, and do something useful.

Recession is waiting in the wings for sure

This watch cost more than your car!

Re:1. My bet is that watches are not a good investment. In general, very few people collect things that are not used anymore. I suspect the price of watches will go down like sniffing tobacco boxes already did and the stamps collection of my youth has been doing. Kind of Mises regression theorem.
I am trying to get interested my kids in ancient coins now (tennis failed spectacularly...). Roman coins are very common and surprisingly affordable, silver denaria selling in most cases for a few tens of dollars. Plus, with 1000 years of consules and imperatores, it’s going to be fun.

I have a 1990 Rolex Submariner purchased for A$1100 25 years ago. I had it appraised in the USA this past summer: US$6500.

That's a 24% return CAGR [@ current A$: USA$ exchange rate].

You're welcome to your Denaria.

an object that people are going to use less that was once owned by a movie star that people are going to remember less is not a good investment

3- this was great. Got to a basic truth with the line about both sides being separated by whether they trust the capacity for the Spanish government to reform or not.

Which is a scenario with probability zero. The new kid in the block Ciudadanos wants to recentralize powers, and Podemos, on the other side, is a political outcast, being ostracized by the status quo and the press. If there was instruments for that, they would show that Ciudadanos triggered an increase in national anxiety in Catalonia that translated into pro independence positions.

The case for independence is evident. The only reason why we can't go all in is that it lacks overwhelming support. Still, the fact that newcomers tend to align with pro independence in one or two generations makes me be optimistic about it.

Lol, “if only everyone agreed with us, it would be soooo straightforward.”

But they don’t.

Recently, attended a wedding. A close friend of the happy couple is a Catalonian woman married to an American. They live in Barcelona. The woman is pro-independence. She said the perception is Catalonians work and pay taxes while the rest of Spain is lolling on the beach.

It's likely rich vs. poor. Spanish taxpayers are still paying for the government's 2008/9 bailouts of Spanish banks' creditors, the recession, etc.

The recent referendum likely was skewed by over-representation by independence voters and saying home of status quo voters. Likely, a characteristic of revolution is that there is no overwhelming majority supporting either position. .

Another factor is membership in the EU. Independent Catalonia would remain in the EU. Possibly, the EU would step in and mediate before a civil war commenced.

Yes, 3 is very good. The two interlocutors are clever and honest. But in fairness, if I have seen many people arguing like Gemma (the pro-independence guy), I haven't seen anyone before reading this text arguing like Toni (the anti-independence guy).

It is almost as if Catalonian against independence knew that defending their position vs a far more militant group is not a wise thing, as it could cost them their job, or their business. My brother in law lives in Barcelona. He describes his situation at work in terms better fit for East Germany.

Toni's position is not the typical anti-independence position, which is why you haven't seen it around much. He is representing a more catalan-centric left-wingish opposition, essentially conceding all the slights from the Spanish govt as true but asking for a different reaction. Most of the unionists, even those in catalonia, don't agree catalans should be upset about much or even at all.

For what it's worth, I agree with Toni on everything except that independence is undesirable in the abstract which I'm more agnostic about. After many hours of probing my compatriots, I can attest it is not a majority position.

PS: Gemma is a woman's name.

Yes. Toni is unusual in many ways. Already in that he puts forward but quickly abandon the "illegality" argument, recognizing its great weakness. After that, a serious discussion can and do begin, and Toni's arguments are rather convincing.

"This sort of popular resistance is what you can expect if you unleash a campaign of repression."

Ridiculous hyperbole. If they want to leave, then a spuriously legal secession process is not the correct way, which is revolution and then they will see what repression really looks like.

Generally speaking you can't secede without a war/revolution. What is often left out of the calculation is that not everyone in the land mass wanting secession wants to leave the union and not everyone in the land mass being seceded from wants then to go. And many are willing to fight to back up their position. secession is more or less stealing and even if it is popular with a majority there is always those who aren't going to like it. SO if Catalonia is serious; buy the weapons, raise an army and come and take it!

They actually tried (The Police force) to buy more weapons, thanks to the Spanish gun laws this purchase from overseas had to be approved by the Guardia Civil, in Madrid, who chose not to approve the permit.

The problem is that the conditional arrangements in Catalonia could only be solved by Pujols.

Once he left the scene, it has been chaos.

I do wonder if Mas has arranged all this to take out the ERC and PUC leadership and give him a clear path. The problem is the every other Spanish party is not going back to giving concessions to Catalans in exchange for support.

I do wonder if Mas could do a deal with the Cs. Go for the money, give up independence, and make significant concession on the anti-spanish measures in hiring and education in Barcelona.

>It is that what America has become?

I dunno, Spanky, I think you're going to need a new catchphrase.

It kinds wears thin after the 3000th time. Now matter how badly you mangle the wording.

1. I suppose this undermines Mr. Cochrane's analysis of the incidence of corporate taxes. If the current price of stock isn't based on the discounted present value of future earnings, then what is it? What is the current price of Mr. Newman's watch? It's a price lower than what the buyer expects to be the future price. But why would the future price of Mr. Newman's watch be higher than it is today, since in the future it can do no more than in the present, which is to tell one what time it is. Life was simple for economists when classical theories held true, and life is difficult for economists when they don't. Life was simple when owners of capital could evaluate an investment according to the stream of income the investment would produce. Life is is difficult when there is no stream of income or when the stream of income can't compare to the potential reward from rising asset prices attributable to the belief that prices tomorrow will be higher than prices today. Indeed, the rate of return on productive capital has been depressed for decades, and owners of capital have sought greater returns by competing for assets with the potential for rising prices, the potential attributable to the belief that prices will rise, and rise faster than the rate of return from productive capital. Of course, prices will rise as long as investors believe they will rise, and when investors believe they won't, or, heaven forbid, investors believe prices will fall, classical theory won't save investors from armageddon. Nobody wants to get stuck with Mr. Newman's watch when prices of assets collapse. Isn't that what the Fed is for, to keep asset prices rising so the buyer of Mr. Newman's watch will receive his just reward?

Newmans watch is priced like shares of stock. It's from a pool of things that are getting scarcer and scarcer, just like shares of stock, being chased by ever more money created by monetary policy that is not paid to workers producing more objects, or shares of stock.

It's free lunch economics.

The way to wealth is cut costs. Ie, stop paying workers. Cut labor costs. All costs are labor costs.

Then charge higher prices.

Then demand government put money in people's pockets to buy the stuff workers made in the past.

Free lunch economics does not seek to increase the number of Paul Newman's. Thus increasing the number of symbols of his era. Or rather, free lunch economics tries to manufacture a thousand Paul Newman's every year making them as unique as Asian watches. Thus their watches are as scarce as Asian watches. The price set for the many Paul Newman knockoffs is too high, higher than the price set for Paul Newman in the 60s, so they don't sell well. And are thus discontinued quickly.

Hollywood invested in the long term to produce the Paul Newman's, which included the Ronald Reagan's.

Which Hollywood long term investment had the greater return? Paul Newman or Ronald Reagan?

Candela uses the wrong strategy. You do not pay people for moving there. You charge them a fee for having that extraordinary right.
If “Life quality rocks here. We haven’t had one crime in 20 years” is sustained you could charge quite a lot these days.

I'd move there just for the orrecchiete with ragu. Or what my mother used to call strascinat'. Of course that would wreak havoc with my low-carb diet, but I'd die fat and happy.

5. There is no labor in Uber!

A guy in an urban city with no job who walks and rides the bus to look for work can never get a job driving for Uber.

He is not a capitalized business person able to meet Uber high minimum capital investment standards.

Almost all rides are provided by those with jobs that pay for vehicles that are rented to produce marginal capital returns to make the investment in a vehicle to get to a job less of a deadweight cost to the family.

Remember, Uber is NOT AN EMPLOYER!

Uber merely makes starting a contract transportation business extreme easy, creating millions of new startup businesses per year. And an equal number of small business endings.

hear, hear!

2 and none of this would be known but for Trump surprising everyone by winning.

Cute, but ultimately foolish, bothsideism is what got us Trump.

You'd think self-styled smart people would get it by now, and understand their own role, responsibility.

Smart people are quite pleased at the role they had in this.

What is amazing is how all this stuff was probed and investigated to hang Trump. They are so stupid they can't even get this right.

All is proceeding pretty well as I predicted it would.

I always joked it would be the RICO act that takes the DNC down, but it might come true.

It is pretty odd for you to say you are pleased when you don't even live here, or are you going to move to Trump's America?

It was a big deal for the entire Soviet Bloc. Which is why the Farewell Dossier was such a big deal. In one clean sweep Soviet industrial and technological espionage networks in the West were crushed. At which point the Soviet's ability to keep up with the west long term were ended.

It's a damn shame that billionaire toadies like Cowen push for open border and trade policies which allow the Chinese to conduct similarly wide spread espionage- but that's what a life of donor servitude brings.

The Saudis retook control OPEC(at a cost of 1-2 trillion). The fall of the USSR was just a pleasant by-product.

I wonder how much business Uber loses from people who do not have smartphones. I don't have one because 99.9% of what I need from a phone for is satisfied by a landline. Uber and Lyft are pretty much the only things which tempt me to get one, but not enough to pay the exhorbitant cost of cell service. But if there was a free smartphone which only could only do one thing -- order Uber rides -- I'd like one of those. Heck, I'd even pay for it if it was a one-time cost with no monthly fee. The monthly fee is the deal-killer.

I'm pretty sure you can order one from your PC.

Is $11/month an exorbitant cost?

No, I don't think you can use Uber from a PC. (At least when I looked into it half a year ago, the answer was no.) I was a holdout, not getting a smartphone, until a few months ago. It's getting hard when traveling to find maps and transit info without one.

Yeah, I'll probably buy a smart phone in the next year or two, especially for travel as you say.

Until now, I've been using cheapo cell phones that I literally bought at a 7-11 or Walgreens.

Almost certainly not. There is a GPS record on your phone and on the driver's phone that show the same thing: the route and the timeline. This is critical for Uber.

In Austria costs are as low as $6/month

#4 If Europe was country and they all spoke the same language,Italy and Greece might be growing like Florida and Germany shrinking like Michigan.

Michigan has not been shrinking for a number of years

Illinois is the current poster child for shrinkage.

And its largely related to one man. Michael Madigan.

That being said Chicago is booming. Despite the dysfunction chicago is vastly cheaper than any of its competitors (nyc, la) for being a major metropolitan city, So mid-sized to large corporates love the place. But the lower end is leaving the city. You Mcdonald's type corps and smaller who have junior/mid-level staff not making CEO level pay is a great fit for chicago. Those guys can't afford a great lifestyle in nyc, but don't want to live in other midwestern cities.

Specific areas of Michigan are losing population, even if Michigan as a whole is not. Specific areas of Italy are losing population even if Italy as a whole is not.

That sounds like pretty much every state or country

About 3: I have no idea who is right or wrong on Catalonia's independence, and like everybody else here I don't care. But I feel pretty sure we will soon see terrorist attacks on Madrid: has Rajoy learned nothing from ETA?

When was the last time ETA killed somebody? Spanish anti-ETA policy seems to have been a resounding success.

@Borjigid "When was the last time ETA killed somebody?" Answer: in 2011. The first killing was in 1968. Meanwhile the ETA killed 829 people. Are those 43 years of terror really "a resounding success" which one wishes to see emulated with Catalonia?

Hi Attila,

wellcome to MR. Tyler is intelligent, makes good posts and links to interesting stuff. However, there are (at least) 3 things that cut his IQ by half: Trump, Piketty and the impending Eurogeddon.......if the Eurozone collapse is not economical, it might be political and this makes Tyler happy.

I do not think that a Catalonian terrorist group is likely. If it did happen, if anything, it would help Rajoy!

The interesting tidbit that the dialogue does not cover, when it mentions Podemos, is that they are now in serious trouble in the rest of Spain, and are trying to control their Catalonian chapter: It will surprise absolutely anyone that leftist workers elsewhere in Spain, who voted for Podemos, are not very sympathetic of an independence narrative that is mainly about how Catalonia thinks other regions are getting too much aid. It is almost as if nationalism and socialism do not blend all that well together.

The current Catalan independentist movement is not going turn violent, let alone terrorist, for sure. But who knows what may happen 5 to 15 years from now? I would not be so sure of your prediction.

The problem with Spain is that it encourages terrorism against itself, by being weak against demands supported by terrorism and rigid against peaceful demands

The cases of weakness I have in mind are the following: (1) 800+ killed by ETA gained the Basque country an autonomy status much stronger than Catalonia, in particular with fiscal autonomy. (2) When Al-Qaeda, on March 11, 2003 killed hundreds in one day in Madrid, their first demand was that Spain soldiers went out if Iraq: they did, just a few weeks after the attack. The case of rigidity is of course, Catalonia's independence movement, who obtained nothing (or less than nothing -- they lost their autonomy) after five years of won referendums, won elections, and non-violent protests.

#4: In all of the West, people are moving to nice cities and suburbs but evacuating less desirable towns. This trend is happening in Italy just like in the US, Canada, or the rest of Europe. Would depressed cities in the US that are losing population offer to pay residents to live there?

#5: I dare say the return to American industrial espionage was very high in the 19th century. Who gets the best return today?


#1 Here is a WSJ story about the watch from last June - sorry, it's behind a paywall. But, for those with a subscription:

It actually is a very nice story.

Honestly, Tyler's not even trying:

Uber's labor is elastic says a working paper /
More drivers and more working hours follow an increase in fa(-)res /
Those who want more cash per hour do not have a prayer /
cos Uber's labor is elastic per the working paper.

5. I guess the trivial ease with which you could steal technologies in Civ 2 wasn't so ridiculous after all. Leonardo's Workshop and the diplomat's 'incite revolt' capability on the other hand...

Can someone put the Uber finding in plain non-economist English for me? Just a sentence or so.

Let's suppose you think Uber drivers aren't getting paid enough. You might think you can help them by increasing the amount they get paid for each ride.

The immediate effect of this change is to increase their take-home pay. However, the change also has the secondary effect of enticing more drivers to start driving for Uber. As a result, with more Uber drivers on the road, each driver has more down time, waiting for somebody to request a ride.

Since Uber drivers only get paid for the time they are actually driving customers, the longer wait time between rides cancels out the increased payment for each ride, so there is no overall increase in take-home pay.

2. Of course Leonid Bershidsky.knows very little on the US political system and funding the dossier is normal everyday stuff in the US. In fact the original funders were right wing HRC hating Free Beacon that claims it did not partake in any of the Russian material. (In which I don't believe them that concerns of Russian influence was not included.) To remind, Leonid, that the US political is extremely dirty but, unlike Russia, political opponents are not shot in weird circumstances and 98% not put in jail.

Also, the Dossier was so weak that it was shop around a month before the election and nobody would print it officially. (It was alluded several times) Also, Obama almost announced Russian engagement in July but was threatened by Republican leaders not to do so.

Additionally, the Russian influence evidence came from:
1) Hiring of indicted Paul Manafort and his history.
2) Trump was fined $10M for international money laundering last year.
3) Democratic hacked e-mails by Russians
4) Facebook ad purchased.

None of these came to light due to Dossier.

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