Saturday assorted links

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6. What is going on in the repo market?
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To big to fail wills make is desireable for the big banks, especially subsidiaries of the primary dealers, to keep excess reserves higher than otherwise.

But it is part of a wider problem, the primary dealership system has the task of managing liquidity for treasury, that is a value added channel. I works when total liquidity is managed, and that includes that siegniorage stream, which can be nearly 100 billion. The value added channel looks ae all of government liquidity and hedges as necessary, meaning they will keep excess reserves as needed to keep siegniorage sufficient. They get a premium return for doing that job and are enabled by legislation to do it, a legal requirement actually. Living wills is part of that.

We can use our abstract algebra tree here, but I move on a bit.

This is the case where the entire Treasury liquidity flow is known to market accuracy, so the big banks can generate the liquidity government needs as they actually sit in debt planning groups and determine the rate and quantity of debt flow.

Betting the whole channel is called maximum entropy betting, you know the boundary conditions and market uncertainty, you can make quantum mechanics bets, like spreading your bets on NBA championship early, the entire casino is closed and bounded..

Our primary dealership, Goldman Sachs does this, they hedge all the liquidity flows since they know the pre-determined outcome. Hence, the seigniorage stream becomes a managed stream, there is no complete market. Most of the deposit banks are the regulated half of some investment banks in the primary dealership. There is a loop, it is closed by he cartel, the loop cost accumulated and set like an option call.

The banking model is flawed thinking. The central bank is not that special, more a monopsony, and the Fed does indeed need to engage in overnight market making as its primary function. But it needs to draw deposits and loans from a fair distribution of the monetary sphere. The law needs to de-emphasize the primary dealer system and emphasize large government agencies keep their own Fed accounts, self manage their liquidity. Then Congress may more efficiently go about creating good and evil, as you may observe, but we get a much better measure of the intensity, a more granular view, less volatility.

Should Mnuchin sell bonds to the Venezuela central bank and pay US soldiers and military contractors with Bolivars?

The Fed is not the only central bank, so it's hard to call it a monopsony.

In fact, Mnuchin could simply go back to pre-Constitution days and print Continentals, which it would use to pay the soldiers and military suppliers and avoid levying taxes. No government would accept them in payment of taxes, just like in the good old days when Congress had no power to tax.

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So is it government spending ramping up at the end of the fiscal year? Sorry, I am pretty ignorant on this.

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In this week's Barron's, Randall Forsyth attempted to comment on this week's repo 'crisis.' He doesn't know shit about it, either.

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( Indian demonetization reduced gdp by 2%. )
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The more important question is - who had to bear the burden of this policy ?

Who absorbed more of the losses ? Rich, Middle Class, or poor ?

If poor people had to bear the burden then I am okay.
If rich people had to bear the burden then I have a problem.

dear robbin hood, u don't have clue, u virtue-signalling a ho,

blame the victim all the way down, asshole

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Oh yes. I love to do virtue-signaling. Just like Robinhood did. Just like Communists and socialists do.

Simply stated I would love to steal from poor (whatever little they have) and give it to rich. Seriously.

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#3. Bird count is down 2.9 billion since 1970. Who cares if climate change is a hoax. Bottom line for me is that humans now control the world's ecosystems of which climate is a part. If we do not take responsibility we will, or our children will, suffer dire consequences.

I do not think humans are up to the task.

"I do not think humans are up to the task."

My opinion is at this has been an intelligence test we are collectively failing. Maybe snag that Thiel line again:

"The medievals believed in the weakness of the will but the power of the intellect. Modern people tend to believe in the power of the will and the weakness of the intellect."

What is it that makes people doubt all environmental risks injurious to their lifestyle choices?

Is it a problem of will, or a softness of intellect?

I’ll take collective action problems, for $400 Alex. Specifically Nash equilibrium.

Neither will nor intellect, but rather a result of game theory.

In rational game theory would rational actors pretend to disbelieve real problems?

It doesn't seem even in their own long term interest.

It's screwing over, among other people, one's future self and descendants.

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Or to put it differently, it isn't a "tragedy" of the commons so much as "the commons" (with bare dirt and erosion) "looks fine to me."

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Typical hubris of humans to think that they're in control.

It's why humans don't walk randomly into traffic. They want better than random odds of survival.

But hey, I could see why "Nature" wouldn't care. Nature was fine with Chicxulub.

Yes, Chicxulub should be a reminder that I am a process of creative destruction and that eventually you hubristic humans will suffer the same fate as the dinosaurs.

Not very "creative" if most of the universe is cold and dead. And indication that we should try hard to hold on to what we have.

My time horizon is many orders of magnitude greater and your human criteria of "cold" and "dead" are typically small-minded in comparison to my infinite majesty.

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Of course, Climates are also changing on Mars, Mercury and Venus where there is no HUMAN. It's Solar Cycles.

Really, it's the tragedy of the Elites and a half century of failed environmental apocalypse predictions.

The insane solutions, er, green new deal, are similar to a healthy, 21 year-old man having his legs amputated because his doctor told him about bone cancer.

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What is the optimal amount of blackbirds?

The number necessary to preserve their, and the ecological systems of which they are part, long term survival.

Plus say 30% because stuff happens.

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#2...Also try "The Long Way Home" Dama & D'Gary

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#5 - money is neutral. Paging Scott Sumner, paging Brian Donohue! I'm surprised nobody picked up on this post, the most significant post of them all; I guess TC's title was somewhat misleading. An 86% reduction in money supply resulted in a mere 2% reduction in potential GDP from a counterfactual. The authors themselves state: "Our analysis rejects monetary non-neutrality using a large-scale natural experiment". Money is (largely) short term as well as long-term neutral.

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3. The birds. Is that like 700 million working women? Who counted the birds? Is this a racist plot? Kill all blue, red and brown birds. Man the walls. The birds are attacking. Seriously, if birds are migratory and you feed them after September 1st, they may be duped into staying around and then die in a cold winter they are not equipped for. So, keep those bird feeders inside until December 1st.

I have a feeling this is more environmentalist propaganda. I don't put much stock in the NYT. I wish we could say the same about Canadian geese. I'm sure the bird deaths will be used as propaganda for climate change. They have all ready started something like this in Cook County, IL. Figures don't lie but.... Environmentalism is dogma masquerading as science.

Also, the have started a bird banding program in Cook County because birds are supposed to be an indicator of environmental health. And it creates income for government agencies and PhDs in ornithology. See a pattern here? Never mind that there are more bald eagles in Illinois than ever before. The environmental industry is always looking for revenue sources.

The environmentalists are telling us we have hundreds of millions less birds than in 1970. How gullible are we? This is statistics for bird brains.

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Everything the leftist media says is taken at face value. Everything the conservatives say is assigned some cynical purpose and deconstructed and disbelieved.

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3. also, I have a relative who lives in Maine and is a bird watcher and posts the pictures on social media. There are tons of birds in Maine. Maybe those blackbirds went to Maine for the summer to get away from white- and red, brown, yellow, blue..-- privilege.

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#3 The author has an hidden agenda quoting only anti-development researchers

"The sheer scale of the bird decline meant that stopping it would require immense effort, said Dr. Young, of the University of California, Santa Barbara. Habitats must be defended, chemicals restricted, buildings redesigned."

and ignoring more specific causes like the effects of the spread of West Nile Virus WNV on the bird population, a more particular visual proof is the steady population size of black crows before the start of the WNV season from June and the gradual drop in population size to only 20% at the November end of WNV season in one year,

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3323091/bin/03-0499-F.jpg

Those so called anti-development experts cannot explain the steady and then sudden drop in the crow population. A more general discussion of the effects of WNV,

https://www.sciencemag.org/news/2015/11/west-nile-virus-still-wiping-out-birds-across-north-america

"West Nile arrived in North America 16 years ago. Though it can infect and kill people, birds are the virus’s primary host. But North American avian species had never contracted WNV, and the novel pathogen spread across the continent in just 5 years, leaving millions of birds, from jays to sparrows to finches, dead in its wake. Previous studies indicated that a variety of factors, such as climate and habitat, affected how various bird species responded to the virus. For instance, researchers had shown that birds in urban environments seemed more likely to contract the ailment, although scientists do not yet know why."

The report contradicted the cited article on "Tiny warbler-like birds called vireos are booming", the SciMag report said "For example, populations of warbling vireos (Vireo gilvus) dropped only 8.7% when they contracted WNV. But instead of recovering, this species’ populations have continued to drop every year by roughly the same percentage, a trend the scientists expect is continuing." Compounded decline of 8.7% year after year.

The WNV hits intelligent birds like crows especially hard, which is similar to the human situation for people with CCR5 Delta32 mutation (which I previous asserted to be more intelligent, now confired by a recent Joy et al paper in Cell). The hot bed of WNV is the Middle East and it also spread to Europe. Somehow it managed to cross the Atlantic Ocean to New York and spreads to every part of US. The strange thing is that WNV does not yet cross the narrow English Channel between UK and Europe. So I suppose the ravens (larger crows) at the Tower of London and the survival of the British Empire are safe at the moment. Brexit might also have reduce the odds of a cross-over :)

P.S. Lab test result: "Experimentally derived death rates of American Crows infected with WNV were 100% in two studies (13,14)"

Field collected result: as the above chart.

P.P.S. UK better get some Aussie Ravens for backup.

https://csiropedia.csiro.au/aussie-ravens-ruled-out-as-west-nile-virus-indicators/

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“Unlike American corvids who suffer high mortality rates when exposed to West Nile virus, the Australian ravens exposed to the virus showed only mild clinical signs and all infected birds recovered. This means Australia’s Little Raven could not be used as an early warning sentinel, indicating the presence of West Nile virus in Australia,” he says.

(Australian) Kunjin virus may confer immunity in birds to the highly pathogenic West Nile virus,” Dr Bingham says.
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A bad round of comments today. Where's Thiago?

Paraguay attacked Brazil again. Thag enlisted

I told him to stop wasting his time with this nonsense.

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