Saturday assorted links


#3 But how do they package things?

Nose, that is how my chihuahua buries its goodies in my bed. She attempts to nose the bedspread over the rotten tamale from a week ago. They are not too good at it, I would recommend humans with the opposeable thumb.

I knew humans were more effective packers than dogs. Unless hiring dogs is a cost-cutting measure or some kind of affirmative action policy, I don't see the point of it.

Do they qualify for unemployment benefits?

4. Stephen Williamson on Libra.

"What we should be wary of is the possibility that, by issuing a cryptocurrency, Facebook is just evading regulation, in the same way that "coin offerings" evade securities regulation. "


Regulation is huge and costly, compliance officers everywhere in big banks. So the regulation function can be simplified inside a complete shadow liquidity net. It is a great idea, we all should be supporting efficient shadow banks. Libra is not likely to make the grade, but Zuck my figure it out. Like I say, I think JPM has the better shadow net. It is about competition, which of these shadow systems can best defeat the cost of compliance, a good thing.

@Matt Young - "but Zuck my figure it out" - should read "Zuck may figure it out". Please make a note of this.

I don't think wall Street thinks Libra is going to make it, since the stock price of Western Union has not fallen that much. I hope Libra does make it, since it costs me a lot of money, over $30 each time plus unfavorable exchange rate spreads, to send money from the USA overseas, which I do all the time.

Try this: Interactive Brokers. Their low costs continue to amaze me on equities and equity options and sending money to myself. If I recall correctly I remitted to myself cross border once or twice. The currency spread is typically small, for example 0.00005 CAD per USD plus a 2 USD lump sum.

5. As our president has taught us, good ideas can't be expressed on Twitter. Lazonick points out the obvious - that our reliance on rising asset prices for prosperity is foolhardy - and Surowiecki explodes on Twitter with outrage. But of course we rely on rising asset prices for prosperity. Ask the president. Ask the Fed. Ask any sentient person. Which explains why investment in productive capital is depressed and has been for years, even with trillion dollar tax cuts for corporations, which use the tax cuts to increase the price of their stock (with stock buybacks)not invest in productive capital. Rising asset prices makes somebody happy. Who would that be? Those who own most of the assets. A majority of Americans are stupid, which explains why Pompeo and Bolton can say that we should attack Iran because Iran supports al Qaeda and why Surowiecki wrote Wisdom of Crowds: al Qaeda is a Sunni terrorist organization and through social media (the R&D Surowiecki extols) crowds flock together like birds of a feather.

Of course, since WWII, US business generally has been guilty of only looking to the next quarter's net income.

Aside from that, I think Surowiecki is "barking up the wrong tree." R&D expenditures are not "it." "It" is capital expenditures juxtaposed against stock repurchases for stock price appreciation. They also need to factor in near-zero and (EU) negative interest yields.

I like my dog analogy. In this case, Surowiecki refuses to lap up Lazonick's vomit.

3. o tempora! o mores!

It doesn't seem to me that Libra is equivalent to a "bank" as Williamson asserts. It strikes me that the proposal is to create a more efficient clearing system. It won't take my deposits---it will clear transactions that I initiate with an authorised member of the system. I think that is what clearing houses do.

Download the FDIC compliant banking app to your iPod with AppleID. Your are good to go, complete access to the Swift system, direct. No need to notify the Fed when you make a purchase. This would include access to Fed accounts where you earn close to IOER on deposits, and you get access to overnight funds, plus a complete digital bearer asset vault in your iPod.

How does the constitution prohibit this, we all have the right to coin, it is in the constitution, why not exercise it?

Holy Inverted Yield Curve, Batman!

The Fed pays 2.35% on required and excess reserve balances. The three-month UST Note yields 2.218%. The UST 10 year Bond pays 2.06%.

You can go to Treasury Direct and buy UST notes and bonds.

I did not know Thew Fed will pay IOER on your just anybody's money. I (obviously mistakenly) believed that an individual cannot simply self-identify as a Fed member bank or a chartered bank holding company and deposit Fed reserves.

1. Williamson is right about Facebook and Libra. Megan McArdle has an equally critical view although from a different perspective: For those unaware, Zuckerberg started Facebook at Harvard to circulate photos of hot girls. He's been circulating photos of hot girls ever since; he understands prurient and mimetic desire and combined the two in social media. He is a huckster, a very successful huckster. Is America great, or what?

I think you focus on the salacious out of rank ignorance. Maybe it was originally about the hot girls, but as a long time user of FB, with hundreds of friends — family abroad; colleagues; friends; fellow parents — it’s not that now. And it’s used by the over 30 crowd and pretty much ignored by anyone younger.

I use it to study in touch with old friends without having to phone or email them, ditto my many family members and my extended family (by marriage) in Europe. Also I belong to private parents groups for social events and some private Historians group.

There’s nothing huckster-ish about it. It’s a bulletin board for a segment of the over 30 crowd. Staid and bland, exactly how I like my tools. You want hucker-ism? YouTube and television.

#1...I remember first becoming aware of Luttwak prior to the First Gulf War. He was on a TV panel discussion explaining that bombing couldn't work. The enemy would simply wait until the ineffective bombing ended, and then come out and fight, undaunted by the bombing. What was impressive was that he argued as if he was exasperated simply having to argue with the other panelists, he being so clearly superior to them strategically and intellectually. Needless to say, the bombing worked.

Luttwak is part of a cadre of TV guests we've been plagued with who can sound knowledgable and profound blowing an ill wind of advice out of their butts, never being held accountable for anything they predict. He's entertainment, and, just like the Leftists academics he despises, he might have indeed read a few books without, sadly, learning anything useful from them. He's a gas bag's gas bag, I'll give him that. That people actually hire him explains why everything lately goes sideways, being, like Dick Cheney, much more likely to shoot the man standing next to him on his own side than any outside target.

Oh you score some cheap snark points — haha, a Dick Cheney shotgun joke executed badly: Don Pretari, SNL’s producers called, and they want their 2006 Cheney jokes back — but you naively don’t separate the pundit from the scholar. Which suggests you have never opened one of Luttwak’s books. I recommend the ones on Rome’s Grand Strategy and Coup de Finally... everyone is wrong. The goal is be wrong less frequently than anyone else. And failing that, getting people to think about how to become less likely to be wrong.

I have read a few books, and actually have five on my Kindle, and you make a fair point. But some of those Leftist Academics are serious scholars worth reading as well. I was referring to what we call "punditry" .
Scholars, even very good ones, can be egregiously wrong about what's going on now.

Luttwak: “You know, I never gave George W Bush enough credit for what he’s done in the Middle East...I failed to appreciate at the time that he was a strategic genius far beyond Bismarck. He ignited a religious war between Shi’ites and Sunnis that will occupy the region for the next 1,000 years. It was a pure stroke of brilliance!”

GTFOH. This is the epitome of the no skin in the game, Davos lecture circuit, insulated from the results of his "good ideas" Intellectual Yet Idiot class that Nassim Taleb always disparages.

More power to him. He is prospering with his fine lines of BS.

The Fed should hire him and fire all the economists. He could not do worse.

Of course, the Luttwak link is to a profile from 2015 (super Straussian, TC), so he may well be on to a different grift by now.

Why does Facebook Libre need to hold a basket of assets? A single U.S. dollar is already a basket of assets. Likewise a thousand U.S. dollars is a basket. Trade it for whatever basket you want: 8.75 shares of Oracle plus 21 bags of the four pound sack of Hershey Kisses or any other mix you can think of.

I wonder: Is Surowiecki truly as ignorant as his tweets require? In any case, an astonishingly weak-minded display that does more to support than undermine Lazonick. Straussian, perhaps.

#1. Frankly, Luttwak sounds like a nut. I didn't know much about him except that he is respected by the defense establishment. But Bush achieving a stroke of genius in unleashing a 1000-year Shiite-Sunni war? Maybe Luttwak was speaking ironically. After all, it's the Guardian. And I think too highly of Bush to imagine he would intentionally set off a 1000-year civil war among some not very nice people who live in a very sensitive location.

"... occasionally undermined by the desire to have a shock effect on listeners." — Zbigniew Brzezinski, quoted in the article

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