Friday assorted links


7. I don't like blockchain because it is an incredibly energy-inefficient path to security, but .. sometimes you want the heat:

The actual tweet in 7 is really stupid. She quotes someone saying that it could be profitable to use as much energy as Nigeria mining Bitcoins, then concludes that miners do use that much energy.

It is kind of one of a theme. I liked this one:

Yes It's an interesting thing, that if you have electric heat and your heat strips are on, you get to use electricity for other things free, if the heat pump is on you get it at half price.

*Religious* Catholics are probably already a minority. This is just ground-level anecdotal evidence (I'm a Brazilian atheist, but I have relatives who provide services to the church), but religious Catholics in Brazil have a demographic similar to print newspaper subscribers.

And landline telephones, no doubt.

very good.

whereas very traditionalist Catholic couples, with their average of 6 children per family, will have, a few generations from now, 1, 296 new descendants (6*6*6*6), while the average post-Vatican II Catholic couple will have, if lucky, 16 (2*2*2*2).

Yes, I concur.

You're assuming all their descendants will remain traditionalist Catholics.
But kids raised in strict religious families frequently rebel. (Speaking as an atheist who was raised Catholic, here ... none of my four siblings are particularly religious, only one is even nominally still Catholic.)

Good point Hazel. Highest multi-generational retention rates (among major religious groups) that I am aware of in the USA are Hasidic Jews, then the Amish/Mennonites (there is a study or two out there, with real numbers, this is just my guess). There have only been at most 2 full generations of traditionalist Catholics (as defined by regular attendance at a Latin Mass parish, let's say) and I doubt they will have the same retention rate as the Hasidics or the Mennonites, but if they are even close, they will be extremely populous.

Oh look, Cisco is apparently unnatural (as a Brazilian atheist)

I can assure you Atheism has gained little to no ground in Brazil. It has little to do with the real ethos and aspirations of the Brazilian people.

I can assure you of a lot of things, doesn't make them true.

I can only assure people of true things, doing otherwise would be anthetical to the Brazilian ethos.

Then why do you lie so much?

I don't.

Another lie.

It isn't.

And another one.

No, it is not.

Do you ever stop?

I never start.

7. The author of that article failed to differentiate mining a new Bitcoin vs transferring an existing Bitcoin from Wallet A to Wallet B. He mentions 300k "Bitcoin transactions" per day. This is a correct statement, but in point of fact the 300k 'Bitcoin transactions per day' represents transfers of existing Bitcoins and *not* new Bitcoins being mined. I don't know how many Bitcoins get mined per day but there's about 17 million in circulation right now and a hard cap of 21 million. Someone smarter than me can do that math, but there's nowhere near 300k Bitcoins being *mined* per day.

Mining a new Bitcoin might take as much energy as a house uses in a week. Transferring an existing Bitcoin is probably more akin to using an ATM machine or paying a bill online with respect to energy use.

In fact, the article is undercounting the amount of energy per transaction, because you need to divide the amount of energy used to create all Bitcoins in existence by the amount of transactions to get the number he wanted, not the amount of energy used in a year.

I still say that 'energy per Bitcoin transaction' is a meaningless statistic.

Suppose that when it comes to automobiles there are only two types of 'transactions'-building a car and honking the horn. For a given car, it will get built exactly once. The horn could get honked hundreds or thousands of times. Building the car will take way, way, way more energy than honking the horn.

How valuable of a statistic would 'amount of energy used per automobile transaction' be? It would be meaningless.

"How valuable of a statistic would ‘amount of energy used per automobile transaction’ be? It would be meaningless."

Then why are taxis now hybrids?

The "transaction" there is honking the horn. If the amount of electricity used in building cars divided by the much, much more common activity of honking horns was measured in megawatts, that really would be stunning and meaningful.

Granted, in that case what we'd really be saying is "holy shit, building cars is energy intensive!"

But I believe, assuming the author wasn't just being stupid, is that the point is this: for only 300,000 transactions a day, they're using a heck of a lot of energy. Bitcoin production:Bitcoin transactions is not similar to Car production:car honking, but car production:car miles driven. And if someone told you that your car, while it got 30 MPG, used so much energy in being built that its effective MPG was only 1, well, that would be very interesting, no?

6. By 2030, will religious Catholics be a minority in Brazil?

They are a minority now, being much outnumbered by superstitious Catholics and lip-service Catholics.

Anyway, why pick on Brazil? Indeed, why pick on Roman Catholics?

7. In a few decades there will be econ-blogs where commenters will be saying "hey, bitcoin couldn't have been that bad, I mean that's all so irrational." Yes: it is that bad.

How much energy can the distribution, creation, production, protection, and destruction of paper and coin currency uses? Armored vehicles are not the greenest around last time I checked?

You have to account for the fact that paper currency is several orders of magnitude more common than bitcoin. And if central banks held reserves in crypto-currency, how would they protect their private keys? Armored vehicles, security teams to protect the people who know the keys, and cyber-security to protect the central bank computers.

about the difference in mass between data and physical currency.

Moving one ton of pennies valued less than $4,000 costs a lot more energy than physically transporting a wallet key containing the same value the same distance, if only because less mechanical work is being done.

OK, all of us who aren't copper industry lobbyists can agree that pennies are dumb, and nickels too. Pennies are dumb because it costs more to make them than they are worth, like bitcoin, where the cost to make them approaches what they are worth and is much, much more than the cost to print a million dollars and drive it across the country back and forth many times. And remember that only a small percentage of money is actually physical, the rest is electronic, numbers in an account.


Now, a new study suggests that being penny wise and pound foolish is not so much a failure of judgment as it is a function of how our brains tally the value of objects that vary widely in worth.

Researchers at Washington University School of Medicine in St. Louis have found that when monkeys are faced with a choice between two options, the firing of neurons activated in the brain adjusts to reflect the enormity of the decision. Such an approach would explain why the same person can see 20 cents as a lot one moment and $5,000 as a little the next, the researchers said.

... “This paper explains where those judgments originate. The same neural circuit underlies decisions that range from a few dollars to hundreds of thousands of dollars. We found that a system that adapts to the range of values ensures maximal payoff.”

... A similar process likely occurs as people make decisions, the researchers said. But what happens to firing rates when a person stops thinking about ice cream and starts thinking about houses? A house might be hundreds of thousands of times more valuable than a cup of ice cream, but neurons cannot fire pulses 100,000 times faster. The speed at which they can fire maxes out at about 500 spikes per second.

It's unsurprising that neurons can't fire 100,000 faster, it's also unsurprising that the same "neural circuitry" is used to analyze decisions involving differing amounts of value. That is not "irrational," it doesn't cost you anything to use your neural circuits to analyze the difference between 3.40$ and 3.60$. "It's a small value, who cares" would be the irrational way of thinking, since decisions like that can add up over time. I'll accept that they can "explain where those judgments originate," when they can use their brain scanning to predict people's decisions.

5. The real story on the tax bill:

Yes, I'm pretty sure Trump became President just so he could climb his way out of poverty.

Trump is fatiguing, and that is one of the things that makes responding to him so difficult. His Overton Window is a jagged tear on American Constitutional government, but also tiresome, repetitive, stupid.

(Tweets today are all about a US President wanting to micro-manage the Justice Department to his own ends.)

It would be tiring for us all to begin each day with Good Housekeeping for American values, but the tragedy is that it might be needed.

Specifically on tax, do you really want government by the elites for the elites? Is that what you asked for in November 2016?

This has been the standard GOP view on taxes since Reagan (and likewise criticized as "tax cuts for the rich" yadayadayada). But you don't deserve government subsidies to fund treatment for your Trump Derangement Syndrome, so have at it. It's amusing.

It was sad in 2016 when accurate analysis was called "derangement," but what is it now?

Something below tragic.

BTW, the proper comparison is not between the old left wing *criticism* that the Republicans only care about the rich. It is against the Trumpian *claim* that they were something new, for the disenfranchised right wing working class.

Saying "haha, we really are just for the rich" is not a win in that setting.


"House Republicans have put forward a plan to fundamentally revamp the tax code and provide large tax breaks to the highest income Americans through rate cuts on business income and repeal of the estate tax. However, House Republicans have also claimed that the plan provides significant tax breaks to middle-income families. It turns out, though, that those tax breaks for the middle are small as compared to what’s offered to the top, and disappearing.

In rolling out their plan, House Republicans focused on an example family — a married couple making $59,000 per year and with two kids. They said that family would get a tax cut of over $1,182 in 2018 (compared to what they paid in 2017). But, what they didn’t say is that a family making $59,000 would face a tax increase by 2024 relative to current law, with the tax increase potentially rising to nearly $500 by 2027. This is even as tax cuts for those at the top are maintained."

It's pretty obvious why Trump ran for president. The main reason of course being his galactic narcissism, along with wanting to stick it to the elites who look have looked down on him his whole life. But certainly getting the estate tax repealed for his kids' benefit was in there too.

"But certainly getting the estate tax repealed for his kids’ benefit was in there too."

The GOP has pushed for repeal of the Death Tax for decades. It shrunk and then disappeared for one year in 2010 as part of the 2001 Bush tax cuts.

Trump has nothing to do with the GOP push for this popular [54-19 according to 2016 Gallup poll] reform.

You're not one of those fools who thinks that people with substantial wealth actually pay the inheritance tax are you? Trump's assets will be held in Trusts such that the tax wont affect his children in any substantial way.

Now, a farmer or small-business owner whose entire wealth is tied up in his enterprise, the inheritance tax can fuck them good and hard. But since those people ten d not to vote for the politicians you revere, I'll bet you are completely OK with that.

Those folks can use trusts too.

Holy cow, Robert Mercer's Renaissance Technologies owes $7 billion in back taxes.

Funny that they can pull stuff off while calling college professors and editorial writers "the elite."

1. What are Ray Dalio and the other hedge fund operators, who make money whether the market is going up or down (volatile) but not when it's stable, going to do? What's the Fed going to do to keep the economy growing if asset prices don't continue to rise? What are investors going to do if they don't expect another fool will come along and buy their stock at ever higher prices? I'm a conservative, which means I value order and stability. And personally, I don't care for drama. Something's terribly wrong when volatility means stability and stability means volatility.

5. The most important fact about pass-throughs, well the two most important facts, are that S corporations aren't that tax efficient and partnerships for tax purposes are very efficient; indeed, partnerships are so efficient that many tax professionals joke that subchapter K (the partnership tax provisions) makes the income tax (and the estate tax) optional. The reference to S corporations is a diversion, so partisans can claim that they are helping small business and family farms, often S corporations, with their tax cuts. It's nonsense. Their advisers to small business and family farms wouldn't know how to help their clients exploit subchapter K any more than they know how to assist Silicon Valley billionaires how to build spaceships to Mars.

Can you explain at least one easy trick for partners not to pay income taxes? 'Cause I think your kind of full of it. Signed, former partner.

It's not really a trick but rather a treat, it's called carried interest, a gift to hedge fund operators, a great way to convert to ordinary income to capital gain. But carried interest doesn't take an expert, only a government sympathetic to hedge fund operators and such. Partnerships, because they don't pay taxes (unlike S corporations that do pay taxes on certain income including the appreciation in assets move out of the S corporation form), can move assets here, there, and everywhere without having to pay a toll charge, can add partners and more partners, can add layer upon layer of partnerships, can add class upon class of partners, again without having to pay a toll charge, and creating so much confusion among anyone who dare attempt to figure out the entire web of partnerships and owners that nobody would try. By contrast, the use of CFCs to shift income from the U.S. to a tax haven is a simple exercise, although it too depends on a sympathetic government, a government that would greet the tax avoiders as heroes when they appeared before Congress. Me? I've got friends in low places, where the whiskey drowns and the beer chases, my blues away, and I'll be okay. I'm not big on social graces, think I'll slip on down to the Oasis. Oh, I've got friends, in low places.

America has become a hopelessly divided house, and a divided house will never find a good price at the real estate market. I wonder why Americans hate one another so much.

At least we are united in our hatred of Brazil. Hail Benjy's Boys!

It is sad to need hatred ro united a people as if one were a Hutu or a Ustaše.

We don't need it. We like it! Is there anything more fun than hating Brazil?

Many things. Peace, harmony, understending, democracy, rising living standards, a booming srock marcker. We have all those things.

Those things are great but none of them are as fun as hating Brazil.

Hstred is not fun.

Depends on the target. If it's Brazil, it's more fun than a barrel of monkeys.

No, it is not.

Oh my goodness it is so fun, for everyone in the family from age 8 to 80

No, it is not. Only sociopaths like it.

Famous American inventor Orville Wright once wrote "It is great fun to hate Brazil, that's why I stole the idea of the airplane from them"

He was not an inventor, he was a bicycles manufactor. I doubt he could have ever been so hinest abiut himself and his cheating. He expect to be able tomride his hoax and sold the invention he sold to be used as a weapon to be used to murder people.

"The Genocide of Brazil’s Indians"

"SÃO PAULO, BRAZIL — On April 30 2017, a group of ranchers armed with rifles and machetes attacked a settlement of about 400 families from the Gamela tribe, in the state of Maranhão, in northeastern Brazil. According to the Indigenous Missionary Council, an advocacy group, 22 Indians were wounded, including three children. Many were shot in the back or had their wrists chopped."

You lie, boy! Brazil is a beacon of light to all nations. It is sad how the great nation of my forefatheds is treated here.

Stop impersonating me.

No, you stop impersonating ME.

The so-called Indigenous Missionary Council is an nti-Brazilian organization which is supported by America's Department of State and encourages anti-Brazilian Indian rebellions in the North region. There is no need to take seriously their rants.

There have been skirmishes between settlers and Indians, but their coexistence is mostly peaceful ans respectful. There is no clash of civilizations as the one between Palestines and Israelis or Indians and Pakistanis. You can compare those skirmishes with the way Americans hunted down their Indians or with the violence of "lone wolf" operatives in New York.

As for Brazil's treatment of natives, suffices to say they were given for their exclusive control an area bigger than many European countries. They own some of the richest lands in the world and enjoy population denaities among the lowest on Earth. Meanwhile, we have to squeeze more than 200 million Brazilian in an area smaller than Central Asia.

Actually, the Times' so-called reporting could not even go to the trouble of disguising its blatant and disgusting anti-Brazilian biad or addressing some widely known facts. Yes, Brazil's Indians have worse social and economic indicators than the average (not unlike America, where Indians drink themselves to an early death under the boot of WASP domination), but that is because they are poorly integrated into Brazil's economy. They have their own lands, which, I must add, enterprising Brazilians are banned from exploring, they have their own languages and cultures, they are, by their own representatives' demands, legally set apart from normal Brazilian society. They are even considered unimputable, but if I went into a killing spree, I would be jailed. That's justice for you.

It is sad that their leaders' foolishness and our own generosity are now being seized by greedy and unscrupulous imperialists as a stick to be used against the Brazilian people, our democratic system and our peaceful way of life. Maybe Americans should dedicate themselves to consider the beams in their own eyes before they deicde to behold the mote in their friends eyes. We don't have in our history nothing like America's unbelievable history of racial fractiousness, oppreasiona and violence. It would be anthetical to the Brazilian character.

1. Why on earth would a claim like "volatility crashed last month" be supported with a fuzzy, 30 year long graph that doesn't even appear to have monthly granularity? As an options trader, I can assure you that volatility didn't "crash" in October. It was really low. A record low, even, but there have been a few occasions where we hit record lows in equity volatility in 2017. October wasn't very special.

6. Fundamentalist Protestantism is what's growing rapidly down south. "Religious Catholics" are harmless, fundamentalist Protestants are not. I suppose the worst are the fundamentalist Catholics, former Protestant fundamentalists who become Catholics. Now that's a scary breed of fanatics! I'm not naming names, but one works for a major American newspaper, spreading Protestant fundamentalist ideas as just harmless Catholic theology, purposefully agitating those in the pews who would otherwise be satisfied with the liturgy and ritual that the former Protestant fundamentalist considers nothing more than idolatry.

#4 - Is that the right the meaning of the “penny wise, pound foolish” idiom? I've always thought it referred to when the "pennywise" decisions turn out to be more expensive in the long run than an up front more expensive investment.

I've always interpreted the phrase to cover both situations: save pennies in the short run but pay pounds in the long run. But also: save pennies by driving to the low price gas station, but pay pounds due to burning gasoline to get there (and pay thousands of pounds because you're driving a gas guzzler instead of a hybrid or something).

Or ounce wise, pound foolish: drink diet soda and to help reduce your weight -- but you're drinking that diet soda while gorging at an all-you-can-eat buffet. Reducing ounces while putting on pounds.

Or andy other sub-optimal decision where you're optimizing on some small thing while failing to optimize some bigger thing.

7. It's crazy how many technical deficiencies bitcoin has and still it keeps thriwing. I've been expecting a final crash for years, but at this point I'm willing to believe that maybe it will never come and the world really is this insane. Even among cryptocurrencies, bitcoin is not especially good from the technical point of view.

"We don’t have in our history anything like the Inquisition or the Jewish Ghettos "

Yes, you had the Inquisition and there were no ghettos because everyone found practicing Judaism was expelled.

It was the Portuguese Kingdom Inquisition. Brazilians never, ever created an Inquisition. It was the Portuguese colonialist that expelled the Jews, it does not count. Eventually, they were accepted back. The point is, while Aericans were sending children back to Hitler's ovens, Brazil was welcoming refugees.

Would you apply that same logic to America? Anything that happened before 1776 was "the British?"

"The point is, while Aericans were sending children back to Hitler’s ovens, Brazil was welcoming refugees."

Sure they welcomed Jewish refugees, anyone without melanin was welcome to whiten the population. But many more ended up migrating to America because "Hitler's ovens"(i.e. living in Europe before the war) was preferable to Brazil for most.

It is completly different. American colonists had a tradition of self-government that was denied to Brazilians by the Portuguese oppressor. While Americans were making their town halls and Franklin was getting rich as a printer, Brazilians were banned from having manufacturing and press.

"Sure they welcomed Jewish refugees, anyone without melanin was welcome to whiten the population." Our forefathers actually acted on humanitarian concerns about the victims of Hitler's police state.

The growth of pass-through businesses has also contributed to the erosion of the payroll tax base, which funds the Social Security, Disability, and Medicare trust funds.

If FICA is a tax, and I believe that it is, then Social Security is a welfare program (Government charity) rather than forced saving or a retirement account and so should pay out $240/week to all US citizens above 63 without regard to how much they paid in FICA taxes. Another possible way to go is divide the total FICA revenue by the number of recipients each week and pay that to each recipient. The current system makes no sense to me, I see no reason to give more to those who earned more. Some low earners get only about $600/month. The Government part of Australian pension system seems to work that way and most people there still support the system.

I have a pass through entity. It also pays me a W-2 salary. If I don't pay myself a reasonable salary, I can get in trouble, according to my CPA.

We pay salary that is exactly where we get SS maxed out.

So, pass-through does not = no FICA.

We also pay for unemployment and never get that.

Even if you don't pay yourself the max FICA salary, and let the difference pass through, you will pay self-employment tax to make up for the FICA you don't pay.

(4.) This is fundamentally wrong. The car decision is once a decade, while grocery decisions are made every week of every year, so 520 times over the same span.

Good point.

Number four. Plainly speaking, neuroscientists know a lot less about brain functionality than they claim. They have very limited access to the pulse trains inside these actuators columns of cells.

They missed the whole bit about consciousness. Consciousness is just humans training themselves, as in sports or skills. We put ourselves through repetitive actions and watch what happens, it is why we have the dominant hand feature.

They have no memory theory. Most of our memories are inhibited actions triggered by objects in the environment. All of the upper cortex stuff is really about sequence matching neurons that trigger a neural column to generate a muscular action.
Simple stuff, including AI, just simple mechanics.

The real fun in neuroscience is the limbic system where pain and discomfort meet hormonal release. Chemistry meets neuron to achieve homeostasis for the body, really interesting stuff. It is where addictions lie.

When I report business income from consulting on my taxes, is that a pass-through business?

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