Nov

30

 WSJ featured a chart of BTC vs other bubbles. Usually there is a correlate–such as the desk top computer and tech stocks, gold and political uncertainty (sic), etc.

The only things I can think of that correlate with BTC's trajectory are the frequency of NK nuke tests and due-process free salacious executions of key members of the deep state.

Others?

Andy Aitken writes: 

A key characteristic of a bubble is that the people in it don't recognize that they are in it.

The bubble proclamations about bitcoin seem to come from those who have missed out (i.e., they're "too smart" to participate), as well as from those that stand to lose something. Despite Anatoly's misquoting of me, in response to Jamie Dimon calling bitcoin a fraud, I did not call Jamie Dimon a fraud. I wrote that bitcoin said that Dimon is a fraud. Bitcoin is still less than a $150B market cap, less than a third the size of one company (Cisco) at the height of the internet craze. Which turned out to have not been a "craze". The most chiliastic augurs of a connected humanity, portents of Teilhard de Chardin's noosphere reified, were too conservative. Just 15 years later, there are quite a few tech-oriented companies that have surpassed CSCO's peak valuation, and everyone is tied to the net 24/7 through pocket supercomputers.

In my view, the bubble that is barely acknowledged is the vast scope, size, and scale of the state (not just the government), and its rapacious intrusion into our private lives. This precarious bubble continues to inflate on the premise that there is no diminishing marginal utility of additional units of state power. The gap grows between the linear growth in expectations and the logarithmic returns. If this is a bubble, then bitcoin represents its antithesis.

Rocky Humbert writes: 

Andy, Bubble schmubble. There are sardines for trading and sardines for eating. I submit that the most important trait for successful investors/speculators is knowing the difference. And not becoming an idealogue, philosopher or believer. I suggest that you read the Harvard paper that I posted two days ago a bit more carefully. As the paper reports and I've learned from experience, these moves go much further and last much longer than reasonable people expect. Especially for bitcoin (and real estate markets) since the supply/new issuance is very limited. And since you mentioned Cisco, I believe its high tick war around 85; 17 years later the stock is trading at 38. During its final blowoff phase, the stock appreciated by about 800% and the only trade was to be long. Until it wasn't. And then the only trade was to be short — for about two decades (with most of the move occuring during the first 24 months). Same thing with the Nikkei in 1990. Gold in 1979. Etc. And I feel comfortable predicting that the same thing will be true for BTC but from a final blowoff top of who-knows-where. Lastly, here's a rocky challege: Name one major currency whose value routinely moves around by 20% intra-day? (Other than a government engineered revaluation, of course.) Anyone? Anyone? Of course, it's Bitcoin.

Andy Aitken replies: 

I've been emailed personally by several people on the List who asked what I guess they thought were questions I hadn't considered or couldn't answer.

I've responded with thorough emails with numerous academic and non-academic references, and never received a "thanks" or even an acknowledgement of my time spent. The fact is that I have pulled out many times my investment, and yet those with the strongest opinions have nothing at stake (at least in terms of money, the need to be right is very much in evidence), with no more relevance to the market price than a bucket shop price shouter. I have less certitude about the future price than they do. But what do I know?

I really don't care if people think I am ridiculous or stupid. I'll take my profits while they opinionate. Your benchmark of price stability (USD) has declined in purchasing power by 99.5% since the creation of the Fed just over 100 years ago. This was after a long period of purchasing power stability, or even of productivity-driven deflation. Ah, but those fluctuations in prices (e.g. 1907)! They drove a free people to put the management of their currency in the hands of technocrats. My grandfather retired as a bank vice president about 55 years ago, never having earned more than $10K a year. And yet he and his family lived an upper middle class life, with no mortgage on the brick house on a tree-lined street, cars bought with cash, and a child who went to an expensive private college.

What sort of price stability is this? I hold gold and trade it, and even expect a rally in it, but I think we all know that the CBs would kill any "bubble" in gold, though such a "bubble" might be very much justified. If the state and its extension, the CME, kill bitcoin as Anatoly hopes, then another cryptocurrency (or something like it) will replace it.

There are already several that could replace it. It is a mistake to equate bitcoin with cryptocurrency.

There is the beginning of something here that all lovers of freedom should welcome, even if its name is not bitcoin.

Jason Pilfer writes: 

Victor had a quote about Dimon I recall that sums up many of these bitcoin bubble threads.

"Sounds like one of the non-falsifiable predictions from the adventurous traveler or so many of his ilk that don't have the constraint of having to make a profit with trading.vic"

I admire Andy's instructive tenacity and hope to see more. There remains quite a chasm to bridge. I've argued in the past that cryptos are an ongoing disruption rather than simply a new currency coming into an old framework. Many of the predictions would be more relevant if bitcoin were simply a global fiat currency.

The chartism and top/bottom calling entirely misses the reason why cryptos came into being, are incredibly popular and accelerating in adoption and appeal.

The bubble discussion is weary and likely tied to the ongoing global FOMO effect, yesterday I ran across this Fortune link from two years ago about how to short the megabubble when bitcoin was 1/10th today's price

Not much has changed.

The higher level discussion about CME impact is insightful and appreciated.

Nov

30

These are two extremely important papers in Nature that have big implications longer term. Both of them solved a problem using quantum computing that classical computing cannot currently address even at the supercomputer level.

Obviously, no impact to cryptocurrencies yet, but it is something to keep in mind for the long game in terms of potential disrupters to encryption in general:

Probing Many Body Dynamics on a 51-Atom Quantum Simulator

Observation of a Many Body Dymanic Phase Transition with a 53 Qubit Quantum Simulator

Nov

29

 Change Research has just released their 3rd poll on the Alabama Senate race. They show Roy Moore at 49%, Doug Jones at 44%, with 7% undecided and 4% planning to write-in another candidate.

The partisan allocation is - for Alabama - extremely cautious; it may understate the overall Republican share of the electorate, but it is - by far - the most scientific weighting of any of the polls taken for this race. They use the 2016 Presidential vote tally, as self-reported by the sample.

Donald Trump, the Republican 58.4 Hillary Clinton, the Democrat 32.5 Gary Johnson, the Libertarian 4.6 Did not vote 2.9 Jill Stein, the Green Party 1.5

Their sampling was done over the weekend so their data is - right now - the only survey information that is current. RCP and others are using what is very stale data. Nate Silver and Co. - the usual Leftist suspects - seem to be unusually slow in incorporating the results into their data. That could be taken as a sign.

The cross-tabs for the Change Research poll are fascinating and wonderfully detailed.

Nov

29

I heard a lot of excitement around the bubble in bitcoin, blockchain, and how the precious metals will turn around soon. I'm quoted in the article reviewing the landscape, from a old conference I used to speak. Jim Rickards, Frank Holms, Doug Casey.

"Quotes, Gloats, and Anecdotes from the Silver & Gold Summit"

Nov

29

 USDA reports the year corn production first reached these milestones:

Bushels/Acre          Year achieved

30                             1896

40                             1948

50                             1958

60                             1961

70                             1965

80                             1967

90                             1972

100                           1978

110                           1982

120,130                    1992

140                           2003

150,160                    2004

170                           2014

180*est                     2022

190*est                     2027

*USDA forecast

85% of the US corn crop is planted in rows 30 inches apart, according to Pioneer Hybrids. This allows for a population approaching 40,000 plants per acre. Narrowing the distance between rows to 20 or 22 inches has shown a significant increase in yields in many trials. There's a school of ag scientists who predict that the development of new hybrids and GMO's combined with narrow rows will allow for ultra high plant populations of up to 80,000 plants per acre. The huge populations will be achieved without causing undue stress to the plant. Scientists are working on future root systems that will adapt to the narrow rows, allowing for the more efficient collection of water. In some hybrids, they are tinkering with the shape of the plant, making them more Christmas tree like to maximize exposure to light. The effect of sunlight cannot be underestimated, as any sunlight that hits the ground is effectively wasted. To further increase yields, scientists are tinkering with the size and shape of the ears, going from the biggest/longest ears to shorter more modest size ears with many more ears per plant. After all, huge ears require more support and that translates to wasted, non-essential plant structure. One envisions a time in the future when corn yields will average 200+ bu/ac. Science and modern agriculture methods and practices have increased yields by 466% in a little over a century.

Nov

28

 In "Strange Pursuit", a Bowdrie story by Louis L'Amour, the author says that the first law of reading signs is to look for the unusual–the direction of the grass after a man or horse has recently trodden –its opposite for a horse or a displaced rock. How can this be applied to predicting markets?

One idea is to take the longest failure of an event and study what happens afterwards. For example, the failure of bonds down and stocks down on a single day. I have been listening to L'Amour short stories as an antidote to stroke lately and have found them highly entertaining and soporific. You will excuse my bad typing recently as my brain makes my fingers off by at least two keys.

Nov

28

 Very flawed but interesting depiction of Churchill's in 10 days around becoming prime minister. For some reason they spent half the picture on the secretary. They made up a scene on the underground where a man of color told Churchill what to do. They pictured Halifax as a McCain type and made the king into a potent figure in the war but he wasn't. Good depiction of Clementine. Made 3 Churchill sound like waffling all the time rather than strong upholder of western civiliziation/ left out all the cravenness of the French for sights of Churchill looking at typist. Right out of Ellsworth Touhie.

Nov

28

"U.S Mint's Silver and Gold Coins Turn to Lead":

The government currently is selling the gold-coin proofs at a 25% markup over per-ounce gold prices, a premium that can run as high as $360 per coin. The silver coins carry a more than 200% premium over market silver prices. That might be well worth it for coin collectors and hoarders—or for stashing in a post-apocalypse bunker along with the guns and freeze-dried macaroni. But some unhappy investors have deposited them into retirement accounts, where the shiny gold and silver coins have performed like lead sinkers. Paul Rumage, a 64-year-old retired software engineer from Michigan, said he was looking for a haven from stocks for his individual retirement account in 2013. A private dealer persuaded him to buy 45 four-coin sets of American Eagle gold proofs, and 979 ounces of silver Eagle proofs, records show. The 1,135-coin treasure of gold and silver cost him $308,000, which included a 6% commission for the broker. Less than a month later, his IRA statement valued the coins at $212,000. "I knew something was wrong," Mr. Rumage said. After filing a lawsuit against the dealer and broker, he sold the coins back at a loss. He since has given up on gold and instead bought land in Arkansas.

Nov

28

Change Research has just released their 3rd poll on the Alabama Senate race. They show Roy Moore at 49%, Doug Jones at 44%, with 7% undecided and 4% planning to write-in another candidate.

https://tinyurl.com/yb739e9z

The partisan allocation is - for Alabama - extremely cautious; it may understate the overall Republican share of the electorate, but it is - by far - the most scientific weighting of any of the polls taken for this race. They use the 2016 Presidential vote tally, as self-reported by the sample.

Donald Trump, the Republican    58.4
Hillary Clinton, the Democrat    32.5
Gary Johnson, the Libertarian    4.6
Did not vote    2.9
Jill Stein, the Green Party    1.5

Their sampling was done over the weekend so their data is - right now - the only survey information that is current. RCP and others are using what is very stale data. Nate Silver and Co. - the usual Leftist suspects - seem to be unusually slow in incorporating the results into their data. That could be taken as a sign.

https://www.mediaite.com/online/will-roy-moore-actually-win-an-running-analysis/

The cross-tabs for the Change Research poll are fascinating and wonderfully detailed.

https://tinyurl.com/yaldfxby

Nov

26

From what I gather, the pretensions of moral philosophy to be "scientific" were laughed at when the term "social science" was coined.

Say what you will about the 21st century, one thing that is getting better is that social-science authors have the ability to, and feel some obligation to, post their code and data sources where readers can access them.

EqualityofOpportunity.org/data

^ This warms my heart.

Jeff Watson writes: 

Your post reminded me of an engaging article I read this morning. The article is about the increased bullshit that is being strewn across workplaces worldwide. It describes the origins and history of the bullshit, then examines and illustrates the many different kinds of bullshit being tossed about from the boardroom to the classroom. Well worth the read.

Nov

26

I got it completely wrong! VT covered the line and there were only 10 points scored in the whole game.

Russ Sears writes: 

Gamblers fallacy. Just because your luck has been "good/bad" doesn't imply it must change if the events are independent. In fact, "it" (calling randomness good/bad) implies that your perception of the odds are wrong. 

Nov

25

 I was thinking about TSLA the other day after seeing the new promotional video with the truck and sports car. It's business trajectory reminds me of many tech business models, such as Uber. Which is create an app for an existing product that bypasses laws, regulations and taxes and then abuse ones competitive advantage.

The traditional car companies ceased to be car production businesses and became finance companies a decade or two back. Will TSLA cease to be a car company and become an energy company? TSLA can bypass consumption taxes on fossil fuels and god knows what else, while setting up 'refueling stations' to resell energy. They'll have a repeat business where they buy energy in bulk and resell it . To their clients and others. Being the first guys in, they'll set up a monopoly where they can. Energy will turn into their main business. The cars made will become rubbish and they'll exist like a business such as Verizon. How long will it take governments to cotton on? And when they do, will it be too late?

Jim Lackey writes:

Lack sees shades of 1999 when E brokers became higher market cap than brick banks. My buddies were 6 months too early. If or when AAPL trades 1/20th of US GDP it may be the csco of the year. One realizes no one ever made selling them. From the bleachers there is only tracking stocks missing from a lesson I do not wish my son to learn like dad, the hard way. Musk after pay pal was cut off by banks and the street in 2008. We were all busy fighting for our lives. The first guy through the door always gets bloody. I'm sure he does not care about his stock owner partners. He's said time and again, do not buy. Interesting why anyone would own this paper when they are fiduciary. I know why my old trading friends are caught short. Tis the season to squeeze. 

Nov

25

Bitcoin passed a milestone today, although it has gone unrecognized and unheralded.

Those who hold BTC, and have held it prior to July 24 of this year, received an equivalent amount of Bitcoin Cash and Bitcoin Gold in their wallets. For example, one who held 5 BTC would have received 5 Bitcoin Cash (BCH) on August 1 and 5 Bitcoin Gold (BTG) on October 24 in the wallet.

Today, the combined value of Bitcoin, Bitcoin Cash, and Bitcoin Gold surpassed $10K.

Currently, BTC + BCH + BTG = 8184 + 1655.10 + 391.50 = 10,230.60

Nov

25

Black was right: Price is within a factor 2 of Value:

J. P. Bouchaud, S. Ciliberti, Y. Lempérière, A. Majewski, P. Seager & K. Sin Ronia Capital Fund Management, 23 rue de l'Université, 75007 Paris, France

Abstract:

We provide further evidence that markets trend on the medium term (months) and mean-revert on the long term (several years). Our results bolster Black's intuition that prices tend to be off roughly by a factor of 2, and take years to equilibrate. The story behind these results fits well with the existence of two types of behaviour in financial markets: "chartists", who act as trend followers, and "fundamentalists", who set in when the price is clearly out of line. Mean-reversion is a self-correcting mechanism, tempering (albeit only weakly) the exuberance of financial markets.

See also: "the holy hand grenade"

Doc Castaldo writes: 

"Black was right: Price is within a factor 2 of Value"

This goes back to a famous difference of opinion between Robert C. Merton and Fischer Black.

In trying to explain Efficient Markets to a student audience, Merton said that to him an Efficient market was one where prices are within 5% of true value 95% of the time. This was his subjective estimate of how efficient he thought the stock market was, and a way of communicating the idea of high but not perfect efficiency to the audience.

Fischer Black had a looser concept and said that to him, efficiency only meant that prices are within a factor of 2 of true value at least half the time. The rest was what he called "noise", i.e. random divergences from true value.

The problem of course is that these are only analogies and no one knows what the "true value" is and therefore how far away from it the market is.

Nov

24

 Thanksgiving is about sharing prosperity, and it's a good time to think about where prosperity comes from. The Pilgrims figured it out in 1623. We'll retell that story as we celebrate the way it lives on in countless U.S. families and companies today. And in particular at one company, McDonald's (MCD, news, msgs), that in its humdrum way beautifully demonstrates the source of prosperity and the American way of life.

The Pilgrims started with so little. They had to hide in England because the authorities considered them dangerous. They fled to Holland but found themselves compelled to take menial jobs. On the way to America, many of the company died. They lost their way to Virginia and landed in Massachusetts just as winter set in. The Virginia Co., their backers in London, went bankrupt and couldn't send relief supplies.

To cope with want, the Pilgrims made the same mistake that so many countries do even today: They divided all their land, efforts, supplies and produce in common, to each according to his need.

As always in such systems, need surpassed supply.

The Pilgrims spent their first three years in America suffering from hunger, illness, cold and infighting. People stole from the common stores "despite being well whipped," according to William Bradford's "Of Plymouth Plantation."

Bradford, governor of Plymouth Colony, records what happened next: "They began to think how they might raise as much corn as they could, that they might not continue to languish in misery. After much debate, the Governor decided that each settler should plant corn for themselves."

Under the Land Division of 1623, each family received one acre per family member to farm. That year, three times as many acres were planted as the year before. Prosperity was not long in coming.

The Pilgrims turned from their Old World system of common ownership to incentives. They didn't go that way out of ideological conviction, but because they didn't have the luxury of waiting for support to come to them.

How many families in America tell the same tale? "When we came here, we worked hard and our lives were better."

But that wasn't the end of the story. Before the switch to incentives, the hungry settlers were at each other's throats. Hard workers resented receiving the same portions of food as those who were not able to do even a quarter of the work they did. Young men resented having to work without compensation to feed other men's wives and children. Mature men resented receiving the same allotments as did the younger and meaner sort. Women resented being forced to do laundry and other chores for men other than their husbands. Many people felt too sick to work.

But when they were allowed to farm their own plots, the most amazing thing happened. Everybody — the sick, the women and even the children — went out willingly into the fields to work. People started to respect and like one another again. It wasn't that they were bad people, Bradford explained; it's just human nature. Adam Smith came to the same conclusion later, and Friedrich Hayek updated Smith's ideas for the 20th century. But we don't need to go back to New England for understanding. Similar outcomes can be seen at McDonald's every day.

For centuries, people on the lower rungs of the social ladder weren't able to eat meat. They ate grains and beans. But people like beef. And chicken.

When McDonald's started popping up in every neighborhood, all of a sudden there was an affordable place for families to eat. Previously, one of the main differences between the upper and lower classes was that the rich could eat out. Even if the poor could afford the tab, they couldn't hire baby sitters, and they couldn't bring their kids to the elegant establishments designed for the rich because they would have disturbed the other diners.

Most kids don't like fancy restaurants anyway. They want fries, not polenta with wild mushrooms. They want fried codfish, not turbot. They want burgers, not lamb chops.

How many people has McDonald's made happy? How many families has it brought together? How many Happy Meals have been eaten there? How many kids have enjoyed the playgrounds? How many tired workers have been able to catch a quick meal? How many women are able to pursue careers and other productive activities and dreams because McDonald's has freed them from the task of having to cook every night?

The Pilgrims might have served 200 or 300 American Indians at their Thanksgiving feast. McDonald's serves 26 million customers a day at 13,700 U.S. restaurants.

For the traveler, McDonald's is a home away from home, offering so much for so little. The restrooms are clean. And McDonald's serves hot strong organic coffee in smooth cups of some wonderful material that keeps liquids hot without burning the hand, shaped to fit into the cup holders that just happen to be in your car, with carefully designed tops that permit just the right amount to be sipped.

No regulator, no fascist dictator, no socialist planner decreed sip tops or cup holders. But how many late-night drivers have died for the lack of a good cup of coffee? What could be more munificent than saving lives?

And the story doesn't end there. Consider the employees of McDonald's. How many people have worked there and learned the most important lesson in America: The customer is always right?

The anti-this-and-that people who demonstrate against profit incentives and free markets like to single out McDonald's as a symbol of modern capitalism. (They don't mean that in a nice way.) As the McLibel Support Campaign puts it: "(McDonald's) has pioneered many business practices that have been taken up by others, and have come to represent a symbol of the way that society is going –'McDonaldization.'" But when have you ever seen an unhappy customer at McDonald's? There couldn't be too many of them, because about 10% of America eats there each day. Given the choice of cooking at home or going to other restaurants — and competition ensures that there are other restaurants — people go to McDonald's because they trust they'll find good food, quick service and value for money. What could be more munificent, more representative of sharing the fruits of hard work than McDonald's?

McDonald's and the Pilgrims are the essence of America. The people work hard, motivated by the chance for profits. They provide a welcome to others, whether to Indians joining in harvest celebrations, or to customers looking to satisfy their hunger. Their work results in high quality, low costs and family togetherness.

Those humdrum, everyday attributes are what makes America great. That's what we should be celebrating. It's the source of all our munificence, from the first Thanksgiving to today.

Nov

20

One, from Bill Rafter

November 20, 2017 | 1 Comment

Seeing the news of Mugabe being deposed reminded of the scene in The Count of Monte Cristo in which Caderousse is the first of Edmond Dantes' tormentors to die. On that occasion the Count simply says "One".

Who will be "Two"? Maduro? Kim? A few years ago I would have included Assad, but not now. And what about the de facto coup in Saudi. That was nicely engineered.

These are exciting rather than scary times, IMO.

Nov

20

 The biggest yachts in the world are in town for the holiday season and the grill run by Mr. Lembke was on at Mar-a-Lago yesterday in anticipation of the President's visit for Thanksgiving. Cranes and construction crews are everywhere busy as things locally are on a rapid up and up.

And a da Vinci was sold by a local property owner

Nov

20

Dear Friends,

Does anyone have primer like material recommendations in the areas of CLOs/Distressed Debt Funds/Structured Credits? My guess is anything by Fabozzi or like minded authors would be too technical at this juncture.

I have stepped away from finance the last few years working on my "lemonade stand" venture, a career and academic coaching/advisory firm in Shanghai. I have a client who is an emerging international tax/fund administration expert and is now starting to have discussions with some of the premier buyside firms in the world re: the areas above. She's about to finish the CFA and start CAIA but the material is generally too rudimentary. She's looking to upgrade her lingo abilities.

I would appreciate a few ideas.

Nov

20

 Outlaws use game theory.

Game theory is the math connected with the analysis of strategies for dealing with competitive situations. The outcome of the participant's choice of action depends critically on the actions of the other participants,

Outlaws, being the majority in Slab City, make this town an apt place to study game theory.

The other anomaly of the population is the individualism. Being individuals, there is primarily non-cooperative game theory. Unlike other games, small town outlaws operate better alone, under the radar, and satisfied with continued repeated small profits toward an eventual fortune, without getting caught.

The way they don't get caught is what I call subconscious game theory. Almost zero of the participants have math skills beyond arithmetic, and yet their IQ's are much higher than the Americans norm. This provides an enormous subconscious space for lightning calculations of game theory.

Some of the finest criminal minds have lived or vacationed here in the past three years. There has been the kidnapper of Patty Hearst, road partner of the JFK shooter, girlfriend of 'El Chapo' Guzman, point man of the Jonestown massacre, principal in the World Trade Center bombing, and an early executioner for Hell's Angels.

Crime is like sport, business, politics, gunfights, or any other competitive setting where what I call the three elements of game theory interact: Game, Play, and Analysis. The Game is the well-defined mathematical setting, the Play is the recipe of action, and the Analysis is the best recipe.

Some examples of game theories that occur daily in Slab City are War of Attrition, Cake Cutting, Truel, Stag and Hare, Chariot Race, Pirate's Party, Peace-War, Dictator, Restaurants, Companies, Coordination, and Brinksmanship.

In War on Attrition the game theory is a dynamic timing contest involving a pause. Slab City Poker players meet at a central table where a timer is set, as each sets off about town in a stealing contest. The various strategies are to go by foot or bicycle, carrying a pack or pushing a cart, and so on. At the end of the timed 'hand' they return to the table to compare loot, trade strategies, and get high, before going out on the town for another hand. The conclusion drawn is there is no value in the pause in Slab City poker because they are all liars, and keep their higher value articles 'in the hole' somewhere so they're not stolen during the next hand.

Slab City is wild with adventure, and a hotbed of lawless game theory. It reminds me of the old west Dodge City where the citizens said, 'Leave me alone, and let me go my own route to hell.' A wicket little town, indeed, its character is so crystal clear that one might conclude is marked for special providence.

Nov

17

The price price of BTC is unlikely exceed 8,000 by much - a reader

Do you play poker? If so, have you ever made money from listening to the people watching the game?

The top call is interesting, but it would be a lot more interesting if you put money on it instead of making paper trade calls, as you have been since BTC was trading at 400.

I suggest 3-6 months of consolidation now that the 2x fork threat has passed (today) without drama.

The rest of the crypto market (i.e. alts such as ETH or app utility tokens such as REP) has been pounded indiscriminately in both BTC and USD terms since August. The attention has been entirely on BTC and its forks, with BTC dominance (market cap of BTC as a % of all crypto) climbing from 40% in June to briefly over 60% last week. The alt bear market has been relentless, taking 75% - 90% off the value of coins for solid, valuable projects with serious PE/VC backing.

Several of these apps will launch on the mainnet to great fanfare in the next few months, and will lift the price on many alts, including some that are undeserving. Coinbase/GDAX will begin allowing trading of some of these in January. Currently they only allow trading in BTC, Ether (ETH), and Litecoin (LTC). Coinbase is all that many new crypto investors know of the market (USD and crypto deposits are insured).

Also, now that Coinbase/GDAX has launched a custody program for digital assets, competitors will follow suit. Soon, institutions will have no compliance barriers to holding crypto and hedging with futures (launching this month on CME) or options (January on the CBOE).

But Wall Street and the CME are latecomers to this party, and with a few exceptions, haven't yet had the opportunity for many "liquidity events" such as what an equity IPO represents. I don't see a close analogy here. Most of the BTC that can exist has already been mined and is available to trade. Anecdotally, I know quite a few serious investors who are clueless about crypto who are champing at the bit to "short the bitcoin bubble" via futures. They haven't bothered to read any of the educational materials I have sent them, don't understand the market beyond what they read in the WSJ and Barron's, and have little but rock-ribbed certitude to justify their position. I expect them to get their education the hard way. IMO in the near term the debut of futures and options will create a tug-of-war. What someone treating it as just another financial asset does not understand is the degree to which network growth, miner hashpower, and difficulty adjustments have on the price. There are, in other words, fundamentals that are reflected in the long-term price trajectory, and complex stakeholder relationships.

I don't call tops (or bottoms), but I do expect a trendless consolidation period for BTC. Consider that following its 4000% run to 420 in June, ETH has traded in a range of 130-380, with trading action concentrated in the high end of that range. I expect ETH to rally while BTC stalls. Price growth has lagged network growth by a significant margin since June, and several of the closely watched use cases/apps are about to launch, which will increase network utilization significantly.

Nov

17

Today we had four people ask us about the likelihood of a current liquidity problem. Someone out there in Financial Journalist Land remembers the last line of the journalist in The Man Who Shot Liberty Valence: If the legend is more interesting than the truth, print the legend.

Here was our response (it's very short). As pictures and charts often do, these compel belief.

Mr. Theo writes: 

Thanks Bill. I would also add that historically the flattening of steep yield has been the best environment for equities.

Nov

17

 All the Slabs rest on these three words:  Might is Right. 

I will try to describe life here in a rational and straightforward manner. Human rights are not determined by justice, but my might. Hide it as you may, the naked fist rules and makes or breaks kings, as of yore. All of the other theories are lures and lies once you enter the town limit. 

It is the greatest human example of the Law of the Jungle that I have ever visited. The expression means ‘every man for himself’. I’ve been in every type of jungle around the world, and the code of survival is the same in Slab with reference to the superiority of brute force or self-interest in the struggle for survival.  

The phrase was used in a poem by Rudyard Kipling to describe the behavior and obligations of a wolf in a pack. In ‘The Law for the Wolves’:

Now this is the law of the jungle, as old and true as the sky,

And the wolf that shall keep it may prosper, but the wolf that shall break it must die.

For the strength of the pack is the wolf, and the strength of the wolf is the pack.

Every great Slabber is a lone wolf, for individualism runs strong in this anarchist community. But, when he must, he banks with others, to fight other packs on the trail. Everywhere Might is Right.

The Slabs consists of a warren of trailers and shanties on the dark squares of a checkerboard of WWII cement. The town rises in honor of Woodstock along the open road that Kerouac wrote about. It offers freedom lovers unmatched profoundness in contrast to the surrounding America.

A lion’s share of that freedom is accepting its tenet of social Darwinism. The term is used to refer to various ways of thinking and theories that emerged in the second half of the 19th century. It applied the evolutionary concept of natural selection to human society, especially in isolated ones like Slab City. Scholars still debate the extent to which the idea provisions opposing aggressive individualism. To roll it out into the open, Slab City believes that power, strength and superiority are the mark of a moral human being. Inherent human rights are nonexistence. Human rights instead are the spoils of the conquering man, and only to be enjoyed when they are taken and defended. 

The core Might is Right gives the superior brain and brawn an excuse to take control, and the weaker a reason to violent revolt. ‘And, that’s the way it is,’ as Walter Cronkite might sum the town’s morals. 

Moral values undergo a rampant change on passing the abandoned guard shack outside Salvation Mountain. They are the standards of good and evil which govern an individual’s behavior and choices. Individual morals are sure to differ inside and outside this town, and a visitor who stays long almost always undergoes a paradigm shift toward social Darwinism. There is no middle ground in defending yourself and, either, rising or falling. Strong personalities are built and broken here. 

The key is how to manage to live together? It is an outlaw town in the sense that there are no laws, and every disagreement that I have ever seen – thousands – have been solved by the threat or execution of the sword of principles defined in the Victorian book Might is Right by Ragnar Redbeard. Published posthumously in 1890, it heavily advocates egoistic anarchism, individualism, amorality, consequentialism, and psychological hedonism. Egoistic anarchism is particularly interesting in upholding extreme individualism without regard to how well or ill humanity may fare. It rejects conventional ideas of human and natural rights and argues that only strength of mind or physical might can establish moral rights. The response to the book has been nothing more or less than either love or hatred, which is the same reaction of every visitor to Slab City. It is regularly featured on the most-banned book lists, as this outlaw town is denounced as the most desperado to be shunned. 

The book and town are a veritable political and philosophical earthquake, marking the collapse of a false and depressing ideology that has held sway for 2,000 years. The thought is positively startling. Little of what you know is true. They may take who have the power. They can keep who can. 

Some Redbeard quotes echo what I see daily in Slab City:

‘If a man smite you on one cheek, smash him down; smite him hip and thigh, for self-preservation is the highest law.’

‘The natural world is a world of war; the natural man is a warrior; the natural law is tooth and claw.’

‘Nothing so lowers a lover in a virile maiden’s estimation, than for him to be whipped in a personal encounter with a rival.’

‘A condition of combat everywhere exists. We are born into perpetual conflict.’

‘Every man’s hand against every other man: except where living individuals have formed temporary partnerships. When one partner breaks the mutual agreement, the combine is necessarily dissolved, and all become enemies as before.’

‘Every organism, every human being, must conquer or serve. This is an ultimatum.’

‘Sociology is a biological problem and nations are herds of cattle.’


Slab City supplants the ideal of what is right, beautiful, and pleasant by the terrible consequence that Might is Right. It is fearful to think of what would befall humanity if such were to spread among the masses of people. And it has already begun to spread. 

The Law of the Slabs is that those who are strong and apply ruthless self-interest are the most successful. This is a zoo of predators offering contrast to the rest of USA. It urges us to face reality and deal with life as it really is rather than what we wish it was. The town is not what it should or must be but the way it is. 

I’m open to the idea of the Law of the Jungle having survived it in as many desperate situations as the spots on a leopard. There has been nothing else since stepping into the Slabs. However, it may take others a week to acclimate to Might is Right.

There are a lot of terms thrown around here – ‘Law of the Jungle’, ‘red in tooth and claw’, ‘survival of the fittest’ and ‘social Darwinism’ – but the waffle reduces to Might is Right. The town asks no questions and gives its reward to the strong.

Nov

17

 Slab City is the most recycling city in America. Recycling is converting waste into reusable material. The town is a giant recycling plant where the machines are the people on a desert surface, ever sifting, until the final unusable trash covers the town like volcanic ash. 

The types of recycling are:

For human waste, there are homemade porta-potties or dug holes in the ground, with some compost. One gentleman moves a tripod latrine around, sits and shits, with a blanket modestly covering him, to camouflage his droppings with the dogs’. 

There is no infrastructure of electric, sewage, or water. Everything is hauled in. There is no need for recycling bins.

Basically, the town looks like a checkerboard dump of scrupulously clean slabs kitty-corner to heaps of trash. It’s well picked through because one Slabber's trash is another's treasure. Light trash blows into the desert on weekly westerlies called the ‘garbage delivery’, and the heavier stuff has accumulated like slag over the decades.

No one can afford nor has the transportation to go to the county dump. There is no need to haul discards to the Goodies (Goodwill’s) and Sallies (Salvation Army’s) because Slabbers would have to bus long distances to retrieve them. 

The year-round population of about 200 are the have-nots. The snowbirds arriving by the droves each fall are the haves to dilute the disadvantaged population by 5:1. They put their discards on a 5-acre plot called Walmart, where everyone walks along somewhat organized aisles among cactus and creosote to pick what they like.

Sunday Madness is when the weekend tourists leave behind their valuables. My strategy is to radiate out from Walmart into their vacated campsites and collect items to redistribute among the worthy. I’ve given away a piano, motorcycle, car, bicycles, camping gear, food, clothes, bow and arrow, and musical instruments. 

One man stood at Saturday open mike at the Music Range and declared the town was a garbage dump. The audience knew better, and dragged him from the stage, beat him, and tossed him in the bushes.

Nov

14

"Low Volatility and Investor Complacency - the NY Fed Offers An Interesting Analysis":

As discussed in Robert Shiller's Nobel Prize lecture, the original puzzle in financial economics was why stock prices are so volatile relative to dividends. According to the Gordon growth formula, stock prices and dividends should have the same volatility. In the data, however, stock prices are significantly more volatile than dividends. Since the 1950s, stock prices have exhibited 16 percent annualized volatility. That is almost 10 percentage points higher than the "fundamental" volatility of dividends, which has been closer to 7 percent (for example, see Shiller's annual data).

Shiller interpreted these results as evidence that stock prices were inefficient, with investors potentially succumbing to animal spirits, or "waves of optimism and pessimism," to explain the large variation in stock prices (see John Cochrane's discussion of this view in a Grumpy Economist blog post) . Importantly, however, Shiller's analysis assumed a constant discount rate for computing net present values. Subsequent work provided evidence against this assumption. Time-varying discount rates are now a standard feature of asset pricing models that can explain the excess volatility of stock prices relative to dividends (see Discount Rates by Cochrane or Monika Piazzesi's summary of related asset pricing research).

As shown in the previous chart, today's realized volatility is about 6-7 percent. This level is what one would have originally predicted using the Gordon growth formula, suggesting that the low volatility puzzle is perhaps less puzzling than originally thought. Alternatively, if one subscribes to the more recent asset pricing theories, it appears that current volatility is either abnormally low or that discount rate variation has somehow been dampened, leading us back to concerns about investor complacency.

Larry Williams writes: 

The disparity is because investors are more influenced by price than dividends. Dividends are not a driver of emotions, prices are. The waves of optimism or animal spirits are in response to price changes which may feed upon itself.

Theo Dosis writes: 

Also worth mentioning that Schiller's data is garbage.

Ken Sadofsky writes: 

How so?

You needn't encumber your own studies, but perhaps a reference to anything, somethings - studies, that falsify.

I understand mu((c) or (s))h is too vague and convoluted to falsify; but then why false a void?

I ask, because you speak with authority.

Thanks,

a wannabe learner. 

Nov

14

 An elder affectionately called Elderberry for many years was the town 'Hangman'. He was handed by police and locals the extreme sinners to determine their public fates. He recently passed the gavel to the town Elders as a whole.

The Elders are old heads who appear continually groggy but regularly spurt beautiful answers to perplexing difficulties. Each has tutored for decades under the great instructor at Slab City, Dr. Time. They are tough, resilient, seasoned, and savvy. Prisons and the Slabs do not soften you up; they make you a piece of rock.

It is one thing to be fierce in battle, but it is important also, to be wise in council. The elders form a foundation of decency. They are modeled after the American Indian tribal elders, who are responsible for guiding the culture and philosophy when it goes askew. The elders are older, and have the respect of their own community. Not all are very old, but most are graying. They are closest to reminding me of the outer ring of Elder 'Guardians of the Universe' in Justice League of America comics. The Guardians were a ghostly race of extraterrestrials who are the founders and leaders of interstellar law enforcement. They are immortal and the oldest living things in the universe.

The Elders are watching. In Slab, they are a loose committee of seniors to investigate and deter horrible crimes. The qualifications for each is that he be on the far side of the following equation, looking back through the equal sign: As a child, one day I realized that all adults are imperfect and at that moment I became an adolescent; then one day I forgave them and became an adult; and then in one instant I forgave myself and became wise.

The Elders are not lawmakers, but instead mete out consequences for vulgar acts. It is their function to punish effectively, to remove the irritant and with the same stroke prevent others from stepping in. They meet in a council of texts (difficult to trace), and less frequently, by personal visits or trusted runners.

The situation is discussed, and recommendations made. This is modern frontier justice, also called extrajudicial punishment, which is motivated by the nonexistence of laws in this community. You just don't go out and hit wrongdoers – arson, rob, dislocate, or kill. It is has to be sanctioned by the Elders.

The justice represents what Mark Twain once observed, 'We have a criminal jury system which is superior to any in the world, and its efficiency is only marred by the difficulty of finding twelve men every day who don't know anything and can't read.' The Slab council is operated by men and women who are often illiterate, and able to blank their minds to pass cool decisions.

When a person enters this lawless society he doesn't necessarily agree to abide by the customs, but if he crosses them he becomes liable to the Elders judgement. The due process is that he is clearly warned. If he continues to cross the line, then he becomes an outlaw even to the outlaws. The verbal gavel falls. He may choose to stand and fight, or to flee. That choice is the essence of freedom.

The Elders have evolved a social system over time, a code of moral-political-economic principles, which determines the association of the members of the community. Only in rare instances do they rear up on their sinewy hind legs and roar. They usually hire in-house specialists – arsonists and strong arms – but nevertheless rarely call on old out-of-town relationships to pay old favors. The Elders do not involve themselves in the hour-to-hour bickering that is a part of town life as fleas are to an infested dog.

Ethically, the system is more forthright than regular American law and order. There are only two fundamental questions the outlaw town code must answer in order for the Elders to act: Does the social system recognize individual rights? And, does the social system allow physical force in human relationships? The answer here is 'yes' to both.

People come to Slab City just to disappear, to get off the grid, and they don't want leaders. The citizens without laws are the can openers of American life elsewhere, so their actions should be studied, and they should not be surprised to hear of the Elders taxing duty.

The Slab summer of 2017 will be remembered as the Battle of Good and Evil. It was three hot straight months of daily debauchery that has rarely occurred before. I look at the difference between good and evil as a kind of foul line in baseball. It's thin, made of flimsy lime, and if you cross it, it starts to blur where fair becomes foul and foul becomes fair. The line is determined by the individual according to his moral values. Examine yourself, set firm standards, and you create good and evil in Slab City. If you grow blind to the line, the Elders are the umpires.

Nothing was sacred this summer. The police were useless; even an obstacle. We needed one Texas Ranger, or the Lone Ranger, but lacking him, the task fell into the hands of two traditional strong-arm personalities. They were good, decent men. One was the drug lord who I did medical and legal for. The other was the primary Slab strong-arm and part-time arsonist. Each represented what the Godfather wanted to be. Few in town except the Elders knew they had died in back-to-back methamphetamine heart attacks. After they vacated, wanna-be enforcers quibbled for the alpha position and none possess the chutzpah to pull it off. Without limits, this outlaw town fueled by meth has gone haywire. The atrocities have been sad, interesting, and newsworthy. I started car camping in a widening radius from the center. There, still, I refused to underestimate the decency of the human race, particularly in America. The Elders stepped in, and the town is restored to even kilter.

Slab City is a town of young anarchists in a disenchanted nation, where the council of Elders keep the seams from bursting. Otherwise, I believe it, would evolve into a single strong-arm dictatorship. If you study the portraits of the most brutal dictators in world history – Hitler, Stalin, Leopold, Nicholas II, Lenin, Dada, and Hussein - they share the same facial features. The frown creases run down from the nostrils, mouth line forms a big upside-down U, thin chins, long ears, receding hairlines, and fiery eyes. However, if you could see the Slab City Elders around a kitchen table, there are only the fiery eyes and cheerful structures.

Grown men and women do not need leaders, but now and then they need little reminders. A rebel grows old, and sometimes wiser. He finds the things he rebelled against he must defend against the newer rebels. Even this leading lawless town in America needs some moral guidance now and then.

In schools where our elders are books, I once championed a teaching program in high school to bring in seniors as volunteer teachers' aides. No thrones or crowns, just gray hairs and wrinkles of men and women who had lived the longest to predict the students' futures by reflecting on their pasts. Their rule of accumulated wisdom was, 'Give them what you know, and let the kids make mistakes. Circle the wagons and hammer down if they cross the line.'

The people on the road leading to Slab City pity their buckle-kneed Elders, fearing the day they, too, will join their ranks. The elderly pity the younger generation, well knowing the trials and tribulations that lie ahead of them. Listen to your Elders, there isn't any better wisdom for you. In this way you have the advantage of living life backwards, and that is where your future lies.

Nov

13

Stocks looking pretty vulnerable in here.

Victor Niederhoffer writes: 

Yes. But remember the senator's golden apple and Vince's admonition that you have to be crazy if you're not long and refresh the dimsonian 40,000 a century and see how it works in Nov and Dec.

Nov

13

Reminder that Silver said:

“That Patriots drive took another 5:07 off the clock and actually dropped their win probability from 1.1% to 0.5%:”

AND

he said that Trump had a 2% chance of winning the Republican nomination.

After such low probability fiascoes it’s impossible to believe that he adds information beyond what can be gleaned from the gambling markets. If he were an active manager, you should go with the index fund.

Nov

11

1. Gann's son says rumors about his dad's fortune are false

2. Heiby didn't trade much but had a printing bus that paid bills

3. Senator is bullish but finds it harder to make the triple digit returns any more

4. A certain bear has 30 people writing bearish things for his followers

5. It was hard finding a place to trade during the hurricane in St. Croix

6. Arthur Merrill was a barbershop singer

"The Senator" Larry Williams writes: 

Heiby's business was selling printing presses or other industrial items as I recall, not printing business as such. Trying to locate him and may have a lead. He would be close to 100 now.

Gann's son said he "never saw all the money dad was supposed to have made, we lived simply and in a simple house; dad was a chartist". I also knew WDG's promoter, FB Thatcher. He had the best Gann stories.

Yes bullish long term may have a correction here, but no bear market in sight. Had a good run early this year but equity keeps going up to old highs and backing off–need a break out here but still treading water with equity curve.

Art Merrill was very much gentleman as is VN. Unlike me, Art was very good with details. Details are one of my great weaknesses.

Nov

10

 I have always thought of "If" by Rudyard Kipling as a fully developed trading plan. It's on my wall above my trading desk and head.

Charles Pennington writes:

Even this?!

"If you can make one heap of all your winnings
And risk it all on one turn of pitch-and-toss,
And lose, and start again at your beginnings"

That doesn't sound like a good trading plan!
 

Nov

8

 While everyone is focused on the no brainer outcomes in VA and NJ, it's quite interesting to observe that Dems swept all of the low level row office positions in the Bucks County and Montgomery County courthouses near Philadelphia.

This is interesting for two reasons.

1. It has never been the case that incumbents got booted out like this, let alone all of them.

2. These two counties flipping to R over the past three decades are a big reason why Rs have been able to do well in Pa. since these are/were the swing counties.

Apparently no longer. They booted out all the incumbent Rs, something which has never happened.

Wow, people must really hate Trump for that to happen. Of course things can change between now and the midterm elections and the next presidential election.

But this is a huge indicator of where things are going, at least for now, and one you may have missed because who tracks row office elections in county courthouses.

Nov

6

 Do you hear that?

This new and sudden silence is deafening.

No crack of the bat. No slap of the mitt. No murmur in the stands. No roar of the crowd. No police whistles as they break up a fight at Citifield. No melodious tones of the announcers as they describe how the pitcher overcame juvenile explosive diarrhea to attain Major League success. Hell, I would go even put up with Joe Bucks annoying cadence and nonsense of the would turn the lights back on and open the turnstiles once more. But it is not to be. The 2017 baseball season is gone now. It had a good, exciting long life-extending as far as the rules allow but it has left the world leaving us only memories of its glory and grandeur. Spring training is 100 days away, and the silence is deafening.

Gone are the bright colors and melodic songs of the Blue Jays. Cardinals and Orioles. The Marlins and Rays scamper among the waves no longer. The Padres and Mariners have both ended their voyages for now. Though they are champions only memories of the Astros light the night sky now. The Rangers and Indians alike have retreated from the plains. The delights of spring and summer are gone once again along with the extreme passion and grand intensity of October.

Ahead lies only winter with Timberwolves, Grizzlies, Warriors, and Raptors to hold our attention to any degree. They won't work for me as I find most NBA basketball to be absolutely unwatchable on TV. One can almost succumb to tears comparing Havlicek, Monroe, West, Frazier, Bird, and Magic to the run and slam version of the game played today. I must confess I do watch the highlights most nights but a whole game would be too much for me.

I have pondered my loss of interest in the NFL a great deal. Part of it is the fact that the game is shit. The referees seem to be determined to have more airtime than the two starting quarterbacks and flags fly out more consistency that many airlines have ever shown. While I am a fan of celebrating achievements watching some idiot do a victory dance because he sacked the quarterback while his team is losing 31-7 late in the 4th quarter disgusts me. If we are honest, it is just not a very good game anymore.

Part of it I think is social. Football is an excuse for the single, or no kids crowd to head to the bar at noon on Sunday and avoid the emptiness of an apartment on Sunday with no work or events to distract you. It is something to do when the snow is up to the low edge of your ass, and the idea of venturing outside is about as welcome as inviting a politician to dinner. It helps pass the winter and gives you something to think about besides frozen pipes salted driveways.

I am now married these past seven years and live in Florida. I am not a big fan of day drinking unless I can get a nap before dinner, so I don't head out to the sports bars much anymore. There is always something to do in Florida and weather that allows you to do things.

I am sure it is a combination of things, but the NFL just does not hold my interest. I follow and watch Notre Dame and Navy at the college level but have no interest in the pro version of the game. No, baseball is the game for me. An evening with a book, while the games played on the TV, has been the preferred activity of many of the last 249 days. Checking the MLB app on a regular basis when the wife wants to watch something else has also been a significant part of my life. Games on the radio version of the app while running around town doing errands while engaging in Florida things has also been a regular activity. Now, that's over. One catch, one toss from Altuve to first base and baseball is over. No more home runs, double plays, dumb baserunning, brilliant pitches, astounding catches, stretching a single or stealing a base. No more second-guessing the manager, yelling at umpires encased in my flat screen or wondering how in the hell Chris Davis could let that pitch go by without swinging. No more box score searching, mathematical determinations of how we can catch the division leaders with a little run of luck. There will be the hot stove league, trades and all sorts of managerial stuff going on all winter to follow. I will probably go sit at the bar during the Winter meetings next weekend to get a little fix. But none of it will enough.

The silence is deafening.

Stefan Jovanovich writes: 

There is the NHL - where all the fans and players stand for 2 national anthems whenever American and Canadian franchises compete and they know the words to both. It is the only team sport other than baseball where 1 player–pitcher, goalie–can single handedly lead a weaker team to victory–something neither Michael Jordan nor Barry Sanders could do.

Tim Melvin writes: 

I have gone to some minor league hockey games and enjoyed them…but find the sport unwatchable on TV. The only ice I want to see most of the time is my glass. While I am watching a baseball game.

Nov

6

 "We are facing a total reform to find a balance and to cover all the needs and investments of the country." -N. Maduro.

The reform is intended to restructure the debt. Down down like Charlie Brown.

anonymous writes: 

Venezuela is a lesson that things take longer to collapse than one expected. I am surprised that to date none of Maduro's bodyguards has plugged him. When will that happen? Probably when the residents fear the status quo more than change.

Parallels to North Korea? Not really. In the Hermit Kingdom the state has almost total control.

Nov

3

 "How Moneyball Tactics Built a Basketball Juggernaut":

AS A LONGTIME partner at Kleiner Perkins Caufield & Byers, Joe Lacob had a reputation for backing high-risk, high-reward startups. But when he paid $450 million in 2010 for the Golden State Warriors—then valued at a measly $315 million and considered the worst team in the NBA—even die-hard fans scoffed.Seven years later, the Warriors are two-time champs worth a reported $2.6 billion.

In his new book, Betaball, Erik Malinowski (a former WIRED staffer) credits the slingshot turnaround not to Steph Curry's swishing three-pointers but to Lacob's application of Silicon Valley strategies to revitalize a sluggish team.

Nov

3

"Russian Influence Reached 12 Million Through Facebook Alone":

"The internet search giant Google also confirmed earlier reports that the Internet Research Agency [a Kremlin-linked hasbara outfit] had purchased search and display ads from it. Google said the group had bought $4,700 in ads… How could poor Hillary, with only $1.2 billion and a virtual monopoly on the fervent support of the press lords—both American (such as Jeff Bezos of The Washington Post) and un-American (such as Carlos Slim of The New York Times)—hope to compete with Moscow's marketing might?"

In Facebook's earnings call this evening, Mark Zuckerberg emphasized at length how serious he is about investigating the Russians' use of Facebook to influence the US election, and how Facebook's increased security/preventive efforts will take priority over Facebook profits.Aside from the article quoted above (and linked to below), are there any major media news stories that have realistically analyzed and explained to the public the total $145,000 claimed to have been spent by Russia-linked buyers on Google, Facebook and other social media, compared to the over $1 billion spent by Hillary Clinton, plus equivalent amounts from the DNC and rich PACs supporting her?

$4,700 is what my auto parts company used to spend on Google EACH WEEK, and it did nothing to prevent the company from failing. I very much doubt the $4,500 spent on Google by the Russians (supposedly to foster racial tension by encouraging Blacks to attend protest events, as I recall, although possibly that was their Facebook spending) influenced even one vote.

Jeb Bush had a war chest of $100,000,000 early in the Republican primary contest and he could not influence the election.

Hillary Clinton and her supporters had a couple of billion dollars to spend and could not influence the election.

And if an easier comparison, how about the $145,000 the supposed Russian collusion with Trump spent compared to the $12 million the Hillary campaign and DNC spent to collude with the Russians in developing the anti-Trump dossier?

I realize reporters are usually not good at math, but don't they have any sense of the difference between $145,000 and $12 million? Or the difference between $145,000 and a couple of billion?

Nov

1

 The spectacle of public hangings in old England, where criminals were hanged in front of enormous crowds, were the largest social gatherings of the time. Picnics, children, barking dogs, and sweethearts on their boyfriends' shoulders were brought to watch the criminals die by hanging. A whole lot of offenses could get you stretched. Vendors would show up early to set up their food and mementoes related to the hanging. Pamphlets would be sold which claimed to have printed the dying speech of him with the rope collar. Known as the 'Last Dying Speech', the quotes were usually fake, as the truly inquiring rushed to get good spots close to the gallows, in hopes of hearing the final address. Sometimes he dropped still publicly shaming the hangman, the audience, and abuse of the times. It was not a quick process, since it was a short fall, the neck would often not break, and he would have to strangle to death, which took several minutes. Sometimes the families and friends of the dying would be asked to pull down on the legs to help speed the process along. This whipped the crowd up into riots, fighting and rolling in the mud; bets had been made on how long the hung would kick. After he was dead, the mob would rush the stage to try to get a souvenir. Hangmen were known to flog the body in order to cut off pieces of clothing to hand out. The rope was also cut up and sold, the cost based on the crime and fame of the hanged.

It was obviously an important occasion, that carried into the old US west. The collar carnivals were brutal things to witness, no matter how guilty. That was about as much conversation as is needed to sway the pop-eyed cowpokes away from the same position. Necktie parties saved many a young or potential criminal his life. Men were not hanged for stealing horses, but that horses may not be stolen.

In Slab City, the show of prevention carries on, with an intellectual twist. The more macabre and public the humiliation, the more reflective as a deterrent. Death is not so important as the shock and exposure. It has been determined in this outlaw town that an ounce of public example is worth a pound of cure.

There certainly is no harm among the lawless in striving for more graphic examples, which fall short of the death penalty. Public astonishment works where all else fails, despite what outsiders say, including the legal and penal process you are accustomed to in more civilized spectacles.

Here are some examples, in order of popularity, of how Slabbers punish in-house that others may be amended

1. Corporal Punishment – Corporal punishment is a tradition in Slab City, where due process is so slow and often unavailable. The thought process of residents seems to be, 'You have wronged me. I won't sue you, for the law is too slow or nonexistent. I'll ruin you!' This has been a bumper year for assaults on women. One I fetched water for was beaten on the body, but not head, by a pipe for stealing. She denied the light fingers but accepted the bruises on arms and legs philosophically without covering them up. Another female was hit in the face by the end of a 4×4" and, smitten, the next day moved in with her caveman. The black and blue marks seem to be like relief confessions with debts paid.

Any local punishment is colorful to draw attention. One thief was hitched like a piece of bacon to a truck bumper and dragged along the town streets for all to see, but slowly, until he was cured. Another resident, though not a churchgoer here, tied a cuckolding parson to a chair on his car bumper, and drove him to the front door of church on Sunday morning to greet his congregation.

You have not been assaulted or restrained until you have shaken with fear like a rabbit about to be mouthed and bruised, and then in a burst of adrenalin free yourself, and gone under a bush to think about what happened, and rehearse what better way to react the next time. Assaults like this are usually against overwhelming numbers, called 'making a mountain' on another person. After a few like this, the thing to look for early on in a fight is smiles. I like a man who grins while he fights, because if I am beaten he will let me live. For this reason I never smile, just for the psychological advantage. The best must be punished in the worst way where there is no other cure for the wrongdoing heart. Jack Black had the biggest, and he confessed, 'The whipping post is a strange place to gather fresh confidence and courage, yet that's what it gives me, and in that dark cell I left behind many fears and misgivings.'

Torture marks are extremely common in Slab City, where people wear them as extended advertisements. They are able to spew tales of awe, like Ray Bradbury's Illustrated Man whose tattoos jumped to life when you touched them, and each tells a story. There is an annual Rave party at the base of Salvation Mountain where, two years ago, a woman was found with 'Bitch' carved in script in her back. I believe handwriting analysts should be brought in for such travesties, although perhaps the victim's crime was worse, that she paid for with indelible stripes.

2. Rough Music - Recently in Slab a bully pinned down a girl and had to face the rough music. Her slight boyfriend rounded up a crew to take shifts following the Palooka around town banging on pots and yelling, 'Woman beater!' The public humiliation spread wherever the bully went for a full day, until he issued an apology. This technique was used throughout Europe, also known as Charivari, to draw public attention via discordant mock serenade.

3. Arson – Very black smoke caused by plastic or tires with obligatory gasoline is the best smoke signal. On first sight, a mob reaches the place to cheer, 'Eviction Notice', watch the fire engines arrive, and later sift the wet soot for valuables. There are about two burnouts per month here.

The most memorable was the AirBnB fire that charged tourists $100 a night for a hammock above a dirt floor crawling with scorpions in a thatched hut, and pancakes. I saw the smoke while hiking toward sunset, and veered to walk by the flames leaping from the apex. Already a dozen sifters had beaten the fire trucks, and thirty more joined after the department left. The owner was thus evicted for shooting a girl with a BB gun, videotaping it, and claiming to the police she had been trespassing. I treated the man who started it after Magnesium shavings from a VW engine block, that burns without oxygen, sprinkled and ignited on his arm.

This is a town of firebugs with the highest arson rate in the nation. The arsonists are highly-sought specialists who accept $10 - $50 for a simple burn. Their angles at a burn would stagger Pythagoras. Slab also offers amateurs to come knocking in the night, push over your tent, pick a fight as a pretense, and burn you out when you protest, collecting their fee in the ashes. You may think ahead and, wanting your place burned down, pick a fight with a torcher, and then collect from the warming heartstrings of the neighbors, local parson, and Red Cross. Losing a home can turn a fat profit, and you may relocate to a better site, or finance yourself out of town.

The most recent torch at the Sausage Camp was a double-alarm fire set by a clever arsonist using a cigarette fuse - gasoline balloon, while simultaneously lighting the corner of a tent across town as he shouted, 'Fire!' as an alibi.

4. Rail out of Town - $25 is the going rate to get someone run out of town. Locally, it's called 'walking' a wrongdoer to the town limit. $50 will get him beat up on the way. A small group of vigilantes overcomes the victim at his door, without allowing him to pack, and drives him to the limit, returning then to rob and occupy his camp as part of the payment. The rail is omitted from the old frontier method of the offender being made to straddle it held on the shoulders of two or more bearers, but from Slab he is usually dumped by the RR track where he may wait on a freight to continue. (Not a bad option.)

Most walk-outs occur in the middle when a party calls on Mr. Jones and urges him on. Sometimes, a meeting is held in advance to decide the place and time, inviting all to gather at the foot of the home and join the post-drive robbery. This is a rare mercy giving the individual a chance to prepare to defend, or to flee, in advance of the mob.

5. Badge of Shame - I've been to every major USA city. In Boston they ask, 'How much does he know?' In Washington DC, 'Who does he know?' In New York, 'How much is he worth?' In Chicago, 'Who were his parents?' In Slab City, 'Is his nose busted?' If you don't have a black eye, bruises, or broken knuckles, then you go unadmired here. I have devised to avoid a fight, or get a date here, by making a scratch under my eye or fall on the dirt bike, and let the blood dry without washing until the threat has passed.

A badge of shame is a mark of shame, a stigma, that works in reverse in Slab City. In old England, under the Poor Act, paupers in receipt of relief were required to wear a badge of blue or red cloth on the right sleeve in an open and visible manner, to discourage others from collecting relief. In other parts of Europe, people were made to go barefoot to platform their submission as is customarily associated with lower status. More recently, in Bangkok, Thailand, the police switched to punitive pink armbands adorned with cute Hello Kitty cartoons, as are seen tattooed on the bodies of many Slabbers, that were intended to be worn as badges of shame for minor infractions. Those displays are reversed here, reminding me of an incident a few months ago.

The victim was a golfer in a hovel, and his arsonist so displeased by public sentiment from torching the place with the Campbell cans that served as nine holes, that he sifted the ashes until he found the One-wood. He went to him, with the driver in an outstretched palm of penance, and the golfer grabbed it. He drove the head with gusto into the chest over the target heart of him, who fell back as though pulled by a giant bungee. He got to his feet, thanked the golfer, and paraded from slab to slab shirtless, showing the crimson mark on his chest to all, who examined the horizontal lines of the driver head. They forgave and admired him, and gave him beers, every time he said, 'He didn't drive me out of town!'

6. Pet Humiliation - Regularly the innocent are also shamed. The animals have few quarrels among themselves, but weekly are caught among their owners' tiffs. The Pet Cemetery has standing room only for the strangled, raped, and barb-wire muzzled dogs in this so-called dog lover's paradise. As a vet, I was called to Poverty Flat to examine the three-inch carving of 'PhD' on a Labrador puppy's thigh. The P and D were particularly painful to view on the curves. The owner had figured the pup as the best defense against repeated burglaries, and had posted him at the entrance. After, the dog shied from rather than barked at strangers. Feeling worse, the owner gave the pup away, who now answers to PhD, and gets lots of positive pats.

7. Execution – Murder makes no sense as a deterrent unless it is newsworthy. The executions are carried out by a group, plus an approved 'witness for the public' who is trusted in the community to speak the truth. He becomes the town crier of the event rather than the people flocking to the gallows as in England, because that would be messy with the law.

A victim is invited into the desert for a party, sometimes his birthday, or a supposed rave, or to participate in the execution of another. When he is positioned at the remote site, usually on the adjacent gunnery range, he is seized, and the punishment begins, as viewed by the witness. What follows turns the stomach, without detail here, and only the general images given.

Canal drownings are common, about biannual, and cement boots in the concrete lined canal are unnecessary because the victim is usually stoned, unable to swim, and with a ladder out only every 200 meters, it is a steep climb from watery death. These slayings are conveniently blamed on accident, and for the reasons just named. Drownings in the hot spring are less frequent but more effective, because the body floats around and bumps into someone late at night, driven to the shores by a bubbly jet up the center. That person tries to make conversation with the floater before finally admitting the death, which is lengthy in his drug-crazed monologue. He cannot go to the police because he will be implicated, so it just floats around town.

Some of the other slayings to curb violence have been tying the person to a target on the bombing range, and rely and the sharp eyesight of the US Marine gunships and bombers. Another standard for many years has been dropping the person screaming down a vertical mineshaft, and letting him perish from thirst and hunger. (You may see their old trousers at noon.) In another, the public witness of the rattlesnake pistol whipping to the face of a man, who had plundered the valley where I lived, last remarked that he would not return. Finally, a person was stripped and spread-eagled on hot black desert pavement for the vultures to have their say. These California scavengers spiral in on 7'-wingspans, alighting clumsily like Grandpa McCoys, but swift to the anus. Their feet are useless for ripping skin, but their powerful beaks plunge up the entrails, through the diaphragm, and to the lungs, flapping and screeching at their own display.

The guideline for execution is the offender is incorrigible and uncontrollable, so let the great axe fall. It must be spectacular to piggyback prevention on removal. One man was cut into small pieces and found over the course of a month by various scrappers strewn in a ten mile radius about the bombing range. No one figured out how they got there, as they were handed about town for appraisal, but the reason was clear – he had ratted on human smuggling.

Execution is a business. If they kill you, they don't consider it murder, only doing business. They don't get much publicity. They just disappear.

Is public humiliation useful? The first premise is that whenever a human being, though commission of a crime, has exiled himself from decency, he needs to be reintegrated with it through suffering. The second premise is that suffering should be inflicted with the aim of bringing his psyche to recognize freely some day that its infliction was just. The third premise is to be a deterrent, to the individual as well in the community where he is shown, the punishment must be made memorable. The fourth premise is that Innocent third parties should be left out.

Shaming is on the rise. Across the US, we've shifted to a mode of scrutinizing each other for purity, and punishing people for small transgressions or no real transgression at all, just to blow off steam. Donkey ears and dunce caps are back in style in schools. Online shaming is cool. Politicians call each other out in public. Surveillance is welcomed in the name of conformity. Digging up a target's personal information – name, cell number, address, SS#, family relationships, financial history –to encourage harassment from others is SOP. Recently, a judge ordered two convicted shoplifters to carry these signs in front of an Alabama Walmart, 'I am a thief. I stole from Walmart.' In Indiana, a 22-year old skipped out on jury duty, and was ordered by the court to hold a sign, 'I failed to appear for jury duty' on a public corner. There is no sign that the new call-out culture is fading away.

The psychology of public humiliation is the same wherever you go. An unpleasant emotion is brought about by feeling that one's social status or public image has decreased from peer pressure. It is shame, the opposite of pride. People experiencing public humiliation may have diminished feelings of self-worth. Humiliation is related to embarrassment, but it cuts deeper and lasts longer because others are involved. While guilt is generally associated with doing something wrong, shame is connected with feeling like a bad person because others are watching. The victim characteristically wants to escape, but cannot. The humiliated individual may develop a variety of symptoms including paranoia, apathy, anxiety, PTSD, and repressed fury that may erupt into lashing out against innocent victims, as a means of release, or suicide.

Humiliation can befall anyone at any time, and more so in Slab City. The town is a showcase of public spectacle. There is no other way because the law cannot handle the community. If you forgive the Slab fox for stealing your chickens, he will come back and take your sheep. But if you humiliate him it denies and destroys his status claims. The victim either has to find the strength and self-esteem to come to terms with his shame, or if that proves too difficult, he must abandons the life he has built here and move on to start afresh.

Public spectacle is a round-the-clock crime prevention in Slab City. Laws are sand, customs are rock here. And the shamers are elevated in status.

Nov

1

Announcement found here.

"The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin. Bitcoin futures will be listed on and subject to the rules of CME."

Doug Martin writes: 

What do you think the notional value will be per contract?

100 Coins X $6500 = $650,000/contract

5% move per day. Margin requirements would be quite large per contract.

John Netto writes: 

There will be a mini-BTC

Henrik Andersson writes: 

I'm also curious so I called CME and asked. Each contract will represent 1 Bitcoin and when the contract settles you will receive the cash amount of the Bitcoin Reference Rate. 

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