This is disappointing. It does not suggest a bad economy, but one in which the growth in jobs is proving quite stubborn.



 Did Kurzweil upload his brain and forget the password??!

I recently drilled down on a lot of his work and speeches.

He basically only ever says four or five things, for the entire past 1-2 decades.

Here are the top ten things Kurzzzweil needs to never say ever again, in his entire life.

1. "I am so smart, I made all these brilliant predictions."

2. "I may not have invented the Web. But I predicted it. And I did it back when no one else did or could. Only I was so smart. (See below.)"

3. "Everything increases exponentially in tech and only I was able to perceive this. My critics could not which is why they were so wrong and I was so right, so often. (See # 1.)"

4. "I invented a device that reads books to the blind. (Did I mention how smart I am and how much smarter I am then everyone else? Mainly because I understand the power of exponential growth in anything tech, and nobody else did, especially my critics who were horribly wrong while I was so brilliantly right.)"

5."Nanobots will eventually circulate inside our bodies, correcting all our ills."

6. "One day brain implants will allow us to extend our frontal cortex into the cloud allowing us to upload our brains, and we will be so much smarter. Especially me. I will still be smarter than everyone else."

7. "Did I mention I went to M.I.T., a few dozen times in this speech alone?"

8. "Nanobots."

9. "Exponential growth is awesome."

10. "…and it's usually why I am so right and my critics were always so wrong, and why I am so much smarter than them."

What an insufferable bore.

He is mostly and mainly a self marketing machine masquerading as an intellect. But the sad thing is, people fall for it. It works. Google fell for it.

I think some people here have, too.




  It was the fall of 2011. He was the kid with long blonde hair who came home one weekend and called a family meeting. His girlfriend at the time was upstairs in his room. Pam and I weren't certain what was about to come down but we sat at the kitchen table and he told us.

He was going to join the United States Air Force.

On the surface we were happy. We knew he doesn't do things on the spur-of-the-moment and had thought this through. He was going to attempt to do a 4 year ROTC program in 3 years and graduate on time with a mechanical engineering degree.

It wasn't long and Pam and I had one of the greatest experiences of life in pinning his Officer bars on his shoulders at the commissioning ceremony after graduation from Georgia Tech.

A couple days later found us on the road to Vandenburg AFB in Lompoc, CA for his ICBM training. It was the longest trip of my life. All those miles of thinking where the years went, all of the mistakes I made and wishing that parenthood had do-overs. As he slept I kept the truck and trailer on the road with misty eyes.

There were goodbye tears that sunny cloudless California morning in Lompoc. Tears from both of us, nary a word was spoken. A new chapter was about to begin.

Months later I was in Lompoc for his graduation. As is typical of him, he never told us he was graduating from Georgia Tech with highest honors or that he was graduating #1 in his training class at Vandenburg! It was a special time and I could feel my own Dad's presence with us.

At 25 years of age he has had a great start to his career. His security clearance is top-secret; his awards as winner of the 2015 and 2017 Global Strike Command Challenge competitions have opened up some interesting opportunities. Today his role is instructing young officers in preparation for launching missiles capable of delivering ICBM warheads anywhere on earth in 30 minutes.

As one of very few Air Force Officers who have qualified as Expert Marksman on the firing range I like to think I had a small part in his career!

Today, Memorial Day, 2018, the Parisian family commemorates the service that my dad, Douglas Parisian gave our nation as a bomber pilot.

And today, Pam and I are proud to announce that our son, Hunter Parisian, is a now a CAPTAIN in the United States Air Force.

Congratulations Hunter!



 Here are some interesting facts about Darwin.

1. He liked to smoke a cigarette to calm down from the politics of sustaining his views.

2. His greatest talent he said was in timing the swings of the long term gilts.

3. He liked to read novels about pretty girls.

4. He went to a watering spa often for relaxation.

5. After sleeping in the grass he heard the birds singing and saw the worms crawling and the insects buzzing about and he had never been so happy. His passage about "interesting to see the tangled bank of birds flitting about"…. must have come from this…

6. He liked to study worms and ants and trollopes. Nanny felt very sorry for him that he had nothing better to do.

These come from excellent book by Janet Browne Darwin: The Power of Place.



Apologies if I have asked this one before. Mr Jovanovich's post reminded me of B.S., about whom I've a longstanding puzzle.

Why don't Case-Shiller indices see more volume?

There is exactly one market-maker for all of the Case-Shiller indices. He lives at 123 Maple St in Greenwich and has decades of bank experience. To me there are natural shorts (everybody with a mortgage in Indianapolis should short Indianapolis) and natural longs (everybody without a mortgage in Indianapolis should long 1/20th Indianapolis). For hot coastal markets there are even more natural longs.

And yet they see such low volume. B.S. is quite famous, and so are his indices. (Major US newspapers cite them.) What gives?



 I was reading this: “Our main finding is that economic data do not appear informative enough to uniquely identify the relevant predictors when a large pool of variables is available to the researcher. Put differently, predictive model uncertainty seems too pervasive to be treated as statistically negligible. The right approach to scientific reporting is thus to assess and fully convey this uncertainty, rather than understating it through the use of dogmatic (prior) assumptions favoring sparse models.”

And Karl Popper’s “Science as Falsification” came to mind. 

Peter Grieve writes: 

I’m sorry to say that there is a movement in physics to abandon Popper’s ideas about falsifiability. This seems to be motivated by the fact that string theory and the multiverse theory are at best extremely difficult to test.

Those still supporting Popper are called Popperazzi. Some of them call string theory “mathematical theology”.

Kim Zussman adds: 

Is an untestable theory that fits observations necessary to discard?

Stefan Jovanovich replies:

A theory that “fits” - i.e. usefully works with - observations cannot be discarded until those observations challenge the theory’s ability to predict events. The theory may simply be lucky enough to fit what people and their instruments can “see” and be better than chance at estimating what will happen in the future; but that “luck” will still be sufficient know-how until repeated observation reduces its foresight to no better odds than chance.

Observation is the test. Until Eddington’s observations of the eclipse in 1919, there had been no observations of the spacial interaction of matter and light that contradicted Newton’s theory. Eddington’s observations did not “prove” Einstein’s theory was “settled science” as the warmists like to say; they proved that Newton’s theory was not as useful an approximation of reality as general relativity.

The point that Eugene Fama keeps making is that economics, as a general theory of behavior, has yet to be even lucky over any extended period of time. Its interpretations of information theory seem to work fairly well in the limited domain of financial transactions but only to prove that risk’s rewards are only verifiable after the fact.

Meanwhile, we enjoy the game and keep blowing on the dice when it is our turn to roll.



We use the 72 hour rule: family, friends and fish should never be together for more than 72 hours at a time.



 The mouse with one hole is quickly taken. This proverb maybe generalized to all sorts of market conditions.

It's why one should never take a half hour trade in markets no matter what the expectations… and it also applies to those big shots that can go against you 1 in 20 times like February 4th and other things.



"As of March 31, 2018, total household indebtedness was $13.2 trillion, $536 billion higher than the previous peak in the third quarter of 2008."

The total household debt was "18.5 percent above the trough in the second quarter of 2013."

(full article here)

George Devaux writes: 

Ratios are important here.

Number of households/individuals- resulting debt

Same for income level (capacity to repay debt)

Same for assets - resulting debt to asset ratios

I apologize for suggesting math to a person whose wordsmithing I relish–in the sense of consuming as a gourmand.



 An observation: Whether it be chess, table tennis, markets or whatever, people love to be on the attack and score quick victories that draw attention. I think it's an ego driven thing, the spectacular win helps people with their self image. Markets tend to go down faster than the go up, which makes the short the weapon of choice in this field. Chess players are forever wanting to emulate Mikhail Tal or Garry Kasparov and score quick victories, and table tennis players will play for winners regardless of the percentage they get in.

This would represent a systematic bias from humans in all fields plus a way of gaining an edge just about everywhere and anywhere. Find an egomaniac and do what they hate; defend instead of attack and play for the long game instead of a quick and spectacular win. Perhaps this equates to the chair's depiction of 'the house', but maybe it goes further?


Jeff Watson writes: 

The ego thing is real, and I suspect but cannot prove that the quick victory would pay short money. Back in the pit days, the frenzied scalpers would be in the market a few seconds and a good scalp might be 3-4 ticks on a 10 lot. Meanwhile, the spreader would be watching their position, adding to and subtracting from, and in a few weeks might make 100 ticks on a 1500 lot. Nobody watched the spreader because the scalper was making all the noise and grabbing the attention. Sometimes in life and the markets, the tortoise beats the hare. Fading a big ego is a tried and true strategy as long as one picks their entry and exit points.

Brett Steenbarger writes: 

What a great point!

The desire for the short (and quick market move) also comes from inability to delay gratification (lack of patience and the need to be gratified right away).

It also comes from a compensatory mechanism, where people who missed a large up move now look for vindication with a large down move. It never fails that, after a large market rally (such as we've had the last couple of years), traders trot out "the 1987 analogue" and the specter of a grand correction. I've yet to see a 1987 analogue proponent who made large money in the preceding rally. I've also yet to see a true replay of 1987.

Finally, it is surprising how many money managers let their political predilections shape their investment views. Many viscerally dislike the current U.S. President and have been steadfastly bearish through his tenure. The worst outcome for them would not be an economic or geopolitical cataclysm, but events that truly would bring growth and prosperity. Ayn Rand has written insightfully about "sense of life", and you have long noted the destructive sense of life of the permabear.



A great story I did not know. Some of the Wrens were only seventeen.

Wargaming the Atlantic War: Captain Gilbert Roberts and the Wrens of the Western Approaches Tactical Unit:

The Western Approaches Tactical Unit (WATU) was a Royal Navy analysis team founded in early 1942. Their remit was to study the conduct of convoy operations, to understand how the U-boats operated and to formulate tactics to counter this evolving threat. The unit was made up of experienced naval officers and a number of talented young women from the WRNS. Using conceptual/analytical wargames, WATU developed a range of tactics during the war and disseminated these to over 5,000 Allied officers through a series of lectures and tactical games. Many of these appeared in the Atlantic Convoy Instructions and were used with considerable success by Allied naval forces during the decisive engagements of the Atlantic War. The essay outlines the origins and purpose of the organisation, how the team functioned, the individuals that conducted the wargames, and the series of evolving challenges that it was intended to overcome – focusing on the series of Anti-Submarine Warfare training and analysis wargames conducted by the unit between 1942 and 1943. The article concludes with an overview of some of the numerous lessons that modern defence analysts could draw from the work of the unit and highlights its utility as an exemplar of the use of wargaming as a tool for modern defence analysis.



I'm sure you have read articles like this, but I found it hard to believe at first. Buy the close and sell the open since 1993 returns just under 600%. The reverse flat.

anonymous writes:

Along comes an article BUY THE CLOSE SELL THE OPEN. Since 1993 with 5280 observations the average move at the open is 0.2 that's 20 points on 1000 base, i.e, 0.02 % it's unchanged from open to close. 

Alston Mabry writes: 

SPY, for the last 250 trading days:

mean Close-Open:  +0.17
sd Close-Open:   0.9839755

mean Open-Close:  -0.06
sd Open-Close:   1.88

anonymous writes: 

transaction costs….



Betting odds on the 2pm decision by the pres?

Kim Zussman writes: 

My bet is something other than complete abandonment. Trump has an upcoming heroic / legacy accomplishment possible with Kim, and won't want to give an example of US abrogating prior treaties.

Zubin Al Genubi writes:

Even if you knew ahead of time what the news will be, there is a theory that says it wouldn't help you trade what the market does.

Larry Williams writes: 

Fully agree based on 565 years of looking at news and the markets.

Other than, if news is supposed to be bullish and prices sell off there is trouble ahead and vice versa.



Shocking low range in bonds today (May 7th) of only 18 points versus usual average of 40 points… Much greater vol will occur soon so public can do the wrong thing. Believe that this is lowest range on a non-holiday in many months.



Commodities have been sucking wind for years, but recently look like they are
finally turning around. Some of the ETF might be feeling the effects of
heavy weights on oil, which has come back after its big drop years ago.

Rocky bragged about this repeatedly. He seems to be right.



When Will AI Exceed Human Performance? Evidence from AI Experts


Advances in artificial intelligence (AI) will transform modern life by reshaping transportation, health, science, finance, and the military. To adapt public policy, we need to better anticipate these advances. Here we report the results from a large survey of machine learning researchers on their beliefs about progress in AI. Researchers predict AI will outperform humans in many activities in the next ten years, such as translating languages (by 2024), writing high-school essays (by 2026), driving a truck (by 2027), working in retail (by 2031), writing a bestselling book (by 2049), and working as a surgeon (by 2053). Researchers believe there is a 50% chance of AI outperforming humans in all tasks in 45 years and of automating all human jobs in 120 years, with Asian respondents expecting these dates much sooner than North Americans. These results will inform discussion amongst researchers and policymakers about anticipating and managing trends in AI.



 The book Something Wonderful by Todd Purdum is endlessly instructive as to the inner workings of the show business team of Rodgers and Hammerstein. Amazingly they didn't like each other after working together for 2 years. The book describes all the warts of rogers' personality but is very admiring of how he maintained boyish qualities in his melodies. Sondheim was taken in as a second son by Hammerstein and repaid him by saying Hammerstein was a mediocre talent with great soul and Rogers was a gifted talent with no soul. The stories of Rogers and Sondheim collaborate where Rogers couldn't countenance working with 3 people of a non masculine persuasion are interesting. Also, the many people that it takes to make a show including the set designer, the orchestrator, the rehearsal pianist, and the costume designer. The book contains the history and results and the formation of each show that Rand H did together and is particularly strong on the business aspects of how they financed it, and how they transformed their enterprise into a billion dollar machine but is somewhat weak on the musical and poetical aspects of the collaboration.



 Here's an essay describing the rural areas of Kansas and how the technology has farming, from increasing yields to needing less labor. The improvements are at the expense of the workers and small towns and counties that are losing population.. Towns are disappearing, but so are industrial workers in the rest of the country, all of this because of increases in productivity and improved technology and farming methods. There is population growth in only a few counties, the rest of the counties are losing population at a steady place. There is a thread of nostalgia in the piece, a longing for times before market forces displaced jobs and people. The author found an interesting correlation….that towns with grocery stories selling fresh food did better than those who didn't. The article mentions various "cures" for Kansas' economic malaise, things like organic farming, raising taxes, and various state sponsored schemes to make everything better. State money is being made available for people to sustain "fresh food" sellers in small towns to keep them going. There is mention of the horrible effects of tax cuts of a few years ago which hastened this decline. Sadly, there is no mention of the benefits to the consumer of the cheaper grain etc.There is also no argument for allowing the small towns to collapse and the utilizing the population in a more economical fashion elsewhere. That's OK, the beautiful pictures of rural Kansas in the article make the rest of the article worthwhile.

anonymous writes: 

American Marxists always think the losers of the recent past have a special purity because they were never guilty of being competitive and selfish. It is the Big Lie that never dies. In fact, these dying towns are themselves the survivors of an earlier competition. For every town that still has the lights turned on, there were once a dozen villages, hamlets and whistle-stops on spur lines whose tracks and ties are long gone.




Or, Despite What You Might Think The socialists Aren't Done.

"The Real Risk Is Believing That Volatility Is Risk"

Investors are much more concerned about a surge in the VIX than they are by the prospect of nuclear war—that's a mistake.

By James Mackintosh

Updated April 30, 2018 1:25 p.m. ET 23 COMMENTS Which risk should you be more scared by: American cities being vaporized by North Korean nuclear missiles, or the VIX spiking above 20? Judging by recent market reactions, investors are much more worried about volatility than they are by the prospect of nuclear armageddon.

In one way this is a grossly unfair comparison, but it also goes to the heart of one of the most important questions in investment: What is risk?

Investors almost entirely ignored what many thought was a rising prospect of nuclear war on the Korean Peninsula last year, and they have also pretty much ignored the welcome prospect in the past week of peace breaking out. Investors realize they have no idea what the chance of war is, and aren't even any good at assessing whether it has gone up or down.

By contrast, February's "volmageddon" had a direct impact on stock prices. The Cboe Volatility Index and its equivalents in other markets are treated by many investors, academics and policy makers as a proxy for risk generally.

This is a mistake.



 I heard about a kid recently who broke his table tennis bat in anger after a loss. When his parents wouldn't get him a new one he stopped playing competitively.

My take on this met with some surprise–just get him another bat and send him back in there. If money is a problem take it from other privileges, for example trips to a particular eatery.

My reasoning is that competition, whilst having huge potential benefits, is tough and it needs time to learn to manage yourself within this kind of environment. Parents and coaches don't help if and when they stoke up the pressure with any kind of blame.




There is an article circulating on Twitter. I'm sure it's selling ink for Forbes. It plays into the politics of providing additional government supports for higher-priced coal and nuclear. But it's based on faulty analysis.

There is no debate among industry participants. Wind and solar have had a significant impact on power markets (energy markets). Market-clearing prices in Europe, United Kingdom, the United States have declined. As more wind and solar resources are added, prices decline further. This phenomenon explains why independent power producers struggle for margin. It also explains why coal and nuclear plants are seeking additional government supports to stay in business. They will tell anyone willing to listen, coal and nuclear are not competitive without new subsidies (their initial capital costs were fully subsidized).

Here's the author's trickery. He completely ignores power market dynamics. He jumps to the end of the utility value chain, focuses on the final retail price of electricity, and falsely concludes the villains are wind and solar.

What the author doesn't tell readers is that electricity prices (not energy prices) are heavily regulated all over the world, including Europe and the United States. When deciding on the price of electricity, regulators include the market price of energy and add much more (state and local taxes, fees, reliability costs, infrastructure costs, bad debt, line maintenance, operations, management costs, union costs, pension costs, guaranteed utility margins, and so on). While energy prices have been declining, regulated costs have been increasing.

It turns out the villain is not the market; it's the regulators. The other villain is the publication of faulty analysis.


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