Good Saturday morn: Pour yourself a strong cup of black joe, and settle in for our long form weekend reads:
• The Cook and the Chef: Elon Musk’s Secret Sauce (Wait But Why)
• The Discovery of Statistical Regression (Priceonomics) see also Playing the Probabilities (A Wealth of Common Sense)
• Howard Buffett Is Getting His Hands Dirty (Bloomberg)
• The Start-Up That Will Keep Health-Insurance Companies Honest: HoneyInsured uses economic research—and a connection to Healthcare.gov—to suggest certain plans. (The Atlantic)
• Where Does Technological Innovation Come From? (WSJ)
• Blogging: After the Gold Rush (Reformed Broker)
• The Man Who’s Trying To Build A Better Apple (Buzzfeed)
• ‘The Attacks Will Be Spectacular’: An exclusive look at how the Bush administration ignored far more detailed CIA warnings than was previously revealed before 9/11 (Politico) see also Fighting Terrorism Was the Biggest Weakness of the Bush Administration (NY Mag)
• Living and Dying on Airbnb: My dad died in an Airbnb rental, and he’s not the only one. What can the company do to improve safety? (Medium)
• The Asteroid Hunters: It’s highly unlikely that a gigantic space rock will crash through our atmosphere and destroy civilization as we know it. But it’s not impossible either. (Popular Mechanics)
Be sure to check out our Masters in Business interview this weekend with David Rosenberg, chief economist at Gluskin Sheff.
Commodity Prices Keep Falling
Source: Bespoke Investment Group
Amazing that Snowden didn’t protect Paris yesterday.
I bet France is going to move on collecting phone meta data. Now all we have to do is get the privacy whack jobs here to expand their thinking in the US and let us collect the metadata that has kept us safe and ACTS AS A DETERRENT TO CRAZIES
https://theintercept.com/2015/11/15/exploiting-emotions-about-paris-to-blame-snowden-distract-from-actual-culprits-who-empowered-isis/
Why haven’t the US and Russia been more effective at shutting down ISIS’s (1) production of oil and (2) the sale of that oil? Who is buying that oil and if any western companies are supporting that production they should be held accountable legally and called out publicly.
The West is infiltrating potential terrorist cells, a very difficult task, but this type of intelligence should be easy to collect and to take action upon.
Why Republicans Still Love the Gold Standard
…Senator Ted Cruz …advocated a return to the gold standard — that is, tying the value of a dollar to a set amount of gold — …
…Mr. Cruz is not the only Republican presidential candidate to express admiration for the gold standard: Senator Rand Paul and Ben Carson have, too. …
Why is a discredited policy now attractive to Republicans? The gold standard suits a political moment. Tying the dollar to an arbitrary quantity of shiny metal binds policy makers’ hands, robbing them of their discretion to act: The central bank can’t adjust the money supply to counteract crises or prevent them. These limits, for many Republicans, are good things. The gold standard is essentially the monetary equivalent of a government shutdown.
Why Not the Gold Standard? Talking Points on the Likely Consequences of Re-Establishment of a Gold Standard
Consequences for the Magnitude of Business Cycles:
[points]
Consequences for the Long-Run Average Rate of Inflation:
[points]
Why Do Some Still Advocate a Gold Standard?
[points]
More market Liquidity BS.
“…In a note to clients Tuesday, Charles Himmelberg and Chris Henson at Goldman Sachs dissect the recent decline in dealer inventories of investment-grade corporate bonds. This sounds arcane and boring, but their analysis is one of the most important and troubling things we’ve read about bond-market liquidity.Now, bond-market liquidity as a topic also seems arcane and boring, but is central to thinking about how modern markets function and has been the No. 1 topic of discussion…”
http://www.businessinsider.com/goldman-sachs-on-bond-market-liquidity-2015-11
If you are an individual this is meaningless.
If you are a big high-fee institution with sky-high-rent, fancy suits, and T&E budgets then you should PAY for liquidity and not expect the citizenry to suffer or pay for your wondrous ability to sucker morons into giving you their money to invest so you need to put billions to work.
PAY UP FATSO.
An ex-JP Morgan adviser admitted to stealing $22 million from clients for gambling and other expenses
http://www.businessinsider.com/financial-advisor-insights-november-13-2015-2015-11
This is outrageous. What other expenses?
Vive la France!!!
Zero Hedge whose PREDICTED thebcollapse, rampanat inflation and rampant deflation now laughs at other people assigning probabilities based on historical patterns.
http://www.zerohedge.com/news/2015-11-10/goldman-sees-60-chance-current-expansion-continues-another-4-years-becomes-longest-e
Once the right wing kooks finally understand they cannot predict the future, indexing will dominate and all the BS the big banks lobby for from the financial system to let them trade in and out will lower the price for all of us.
Dinosaurs adapting! It’s beautiful.
The Silver Lining of Unemployment Benefits (ht EV)
Does making unemployment benefits more generous keep more people out of work? Ioana Marinescu shares her fascinating discovery that by making the job market more relaxed, they actually help match people with the few available job vacancies.
NB: This finding supports policy in both directions: (a) during economic downturns when unemployment becomes high extending benefits is not only the humane thing to do it is the smart thing to do because it assures quicker matches for what job openings there are and (b) when the economy is strong and unemployment is low then decreasing the duration of benefits also assures quicker matches for a larger set of openings with fewer prospective workers.
«when unemployment becomes high extending benefits is not only the humane thing to do it is the smart thing to do»
But it is always the smart self-interested thing to do, because it is *insurance*, like health care insurance or pensions. Unless you are absolutely certain never to be unemployed and never to be sick and never to live longer than you expect, being uninsured against those risks is quite dumb. And being so sure is usually quite dumb too.
The whole propaganda machine that tries to persuade gullible voters that insurance against unemployent or sickness or long life is wrong is based on the idea that it will never benefit themselves. That only someone else will get the payout if they become unemployed or sick or lives longer than they expected.
It is like the idea that insuring yourself against losing your house in a fire is a waste of money because only the small minority of “lucky ducky” people who lose their house in a fire get the payout and thus have a good return on their “investment”.
What is amazing is that the “middle classes” largely believe that propaganda.
BTW I reckon that the propaganda against “social” insurance is not motivated by the desire to cut taxes; it is probably true that the the rich people who fund the propaganda can self-insure, so for them paying taxes for it is probably superfluous; but they don’t pay much if any taxes, so practically all social insurance is paid for by the middle classes and mostly benefits the middle classes. What I reckon their motivation is about: to raise the chances that the middle classes don’t insure themselves against risks, so that there is a steady supply of desperate ex-middle class people as an object lesson and to use.