Tuesday, August 30, 2016

Civil Discourse in the Public Square

Civil discourse in public should follow the Socratic Method, it should be the pursuit of truth in facts and ideas and making them plain for all to consider. It should be left to the intelligence of the people to realize what is true, and it should never be dictation nor ad hominem personal attacks.

The ideas and ideals must be placed before the people and the people are smart enough to decide fairly. There are never enough rabid followers to sway the outcome, there are only liars that hide truth from the public. The liars, when exposed, should be vilified by the appearance of their bias or allegiance, not their personal qualities. Even when I portrayed these ideas, I was mindful not to be too preachy for fear of stamping on my own point.

Anyone that does not treat you or your ideas in this manner gives you the evidence you need to make your own choice on what they stand for.

Manners are the grease of civilization, use them but don't let wrong ideas propagate through politeness. 

When I wrote this, the power went out, so perhaps I am angering the powers that be by speaking towards reason for all. 

What are investors in the dynamics of the economy?

I have been thinking about how investors interplay with the economy. While the facile view is that investors are the source or money, which isn't false, and they take profits, which is true, they also provide another role.

Investors, including banks, provide a forcing function "of a kind" to the market conditions of the day. Of course people have called it market forces for many years. In some ways that forcing function can provide two effects with specific behaviour apart from random action that is assumed. I will try to establish what "of a kind" means.

The first is reward and punishment for good / bad management of the company by drastic forcing of stock prices, futures etc. This everyone understands.

The second is as a resistance function for and against the current stock price trend. In general investors buy when stocks are undervalued, and sell when they net a profit. This is another one that is probably covered to death in the literature.

What isn't covered is perhaps the application of artificial intelligence to the problem. With principal component analysis, one could understand "exactly" how individual forcing functions operated. If one had that, then you have a stochastic prediction of future action when those same actors held a stock for example.

Whether by algorithm or by human behaviour, they will share a common signature. For example, one might peg a 10 or 15% profit and then always sell.  That makes it, with enough analysis and data, easier to forecast movement. Not guaranteed, not assured, but trends would improve your chances of making the statistically correct decision when faced with buy, hold, or sell.

Note, I am not a financial planner of any kind, which means I am not obligated to lie to you about investing in any way. My evidence for investment knowledge is a 20 year track record of stock investing and turning a profit, not great but consistently positive.

Sunday, August 28, 2016

The Press Policy Policy

In order to remove the chance of another Full Trumpian monster candidate, we need to make press fully accountable for how much effort they spend on hysteria instead of policy.

From now on all journalists must reduce coverage of candidates when they talk about anything other than policy. They must increase coverage of those that do present policy. The people are better served by eager parties willing to be honest for public good.

Thursday, August 18, 2016

At 11:07PM, #DonaldTrump became weaponized

I watched the Fox News "Townhall" for #DonaldTrump hosted by Sean Hannity yesterday, and at 11:07 the candidate became weaponized.

What I say was a raw raw cheer show organized by obviously biased interests - letting people speak exactly how long their scripted responses were timed to last, I saw flags and freedom and all the stuff that appeals to emotions. I saw modified policies that made more sense and seemed more reasonable. And it was all aimed at Clinton.

And then I saw the most shocking, most eventual, galvanized, weaponized, worst thing of all: a reasonable-sounding Trump. Of course the transformation has been coming a long time, but he's now weaponized - his calm and demeanor attached to real facts about Clintons now make his effective range far greater and his denial-piercing attacks unstoppable against Clinton.

Clinton supporters are like fickle friends, they are going to hold their noses and vote in fear of Trump. +Dilbert Scott Adams is voting Clinton for his safety. But if she wavers too much or gets a political body blow they may just sit on the sidelines rather than vote. They will think their position will ride out 4 years.

Trump supporters are like rabid dogs. They won't just get in your face and yell at you to vote they might try to use your hand to vote for their guy if they could.

I predicted before +Dilbert Scott Adams that Trump would win. But what I see now makes it more likely he won't just win, he's going to paste her into a dark smoking spot on the carpet.

Here are the factors behind this prediction:
  1. Trump listened to angry voters and adopted their causes.
  2. Trump is malleable yet acceptable to Christian Conservatives. He is malleable and that also appeals to Centrists who just want results.
  3. Trump was all over the map and people didn't care.
  4. The fact Trump is more idealogically Democratic makes him less scary and more acceptable to people that just want jobs. Democrats may think they are winning but Clinton is more odious to right wingers than Trump is to left wingers. Polls are off ( see below).
  5. Trump's elliptical and plain speaking teflon-coated him against media salvos.
  6. Both Trump and Clinton are accomplished liars - that's a wash with most voters.
  7. Trump's got angry on his side.
  8. Trump has hidden voters - lots of people won't tell a pollster but they are voting for him. 
  9. Trump has new voters - the previous polls and number don't account for this and any poll of 1000 people is meaningless because they don't account for skewed reality, and those pollsters are lying.
  10. The DNC has been lying about their primaries numbers.  Go back to Iowa, go back to the first state before the hysteria and before things got serious. The DNC and RNC reported the same numbers. And yet look at social media, look at rallies, and look at how many more voters turned up for Trump. It's impossible they rallied the same number, it's unlikely they had that many people when Trump had not even won one state. He was a phantom threat no one took seriously, remember?  When the DNC went second, they lied- they ginned their numbers - to make them even with Trump. They are so lost now they are lying as much to themselves as the public.    Big mistake.
  11. To my surprise, the Clinton team went straight into buying and using TV commercials right after the conventions. Why? Because they are seeing numbers far far worse than what's reported. Because they wanted to shape the conversation and define their opponent. They thought it would work - they used the right strategy and right messaging. All executed perfectly.  And - and this gets better - all that money is moving the needle zero. Why? Because it can't make a dent. Clinton needs to be ahead so far she can survive a mistake in the debates. But that's not appeared. That money didn't buy her a chance.
So here comes weaponized Trump.

While Clinton seems to think she's been smarter, calling Trump a racist and  unstable instead of driving home issues that's about to change.  The problem is that off-handed divisiveness plays to the same people that are in denial of reality, they think those arguments are making a dent. Are they?

Clinton has set herself up for total failure: her campaign made this about how capable she is: she's the most experienced, more venerable, more grandmotherly, more nuanced candidate than Trump. They have framed Trump as not capable.

But if anything goes wrong, if she makes one mistake then she can't make that bar she just set for herself.

If riots continue, if the stock market crashes, if the terrorists attack on US soil her capability is tied right to the Obama White House. If she stumbles her words or - god forbid - refuses to answer those same straight questions about her corruption, her emails, her servers, etc. in a debate he will catch her in a lie and she will be done.

Her bar of credibility is set way, way high. Trump's bar is set at he reads from a teleprompter and stays on message. The right wing party of Canada (Conservatives) tried this in the last election and lost handily to a non-capable guy that showed up with his tie on straight. This strategy is not going to win you anything if you frame yourself as fully capable like that, but if your opponent exceeds the non compos mentis bar you've made the argument for him.

What if Trump looks like a reasonable manager? What then? You don't think Trump who's managed lots of workers for many years can't show up and look respectable for a 1 hour debate?

And worse, worse is that Clinton is an amoral liar that avoids all reasonable questions about her corruption; her standard response is it's all part of a smear campaign from the right. She and Bill have been besmirched for their many tireless deeds of the poor and downtrodden. She has been persecuted, not that's she's done wrong. This might play to her voters, but will it play to reasonable centrist voters?  NO. The electorate is far larger and more mainstream than either the GOP or the DNC.

Look at Clinton Foundation tax returns they spend more on travel than they do on charities. It's not going to take long to expose her corruption. She hasn't held a news conference because she can't handle the questions. The drip drip drip water torture of corruption is going to start spilling out. What exactly does she think those debates are going to be?

In sum, Clinton is going to lose and lose big. There is only one way to stop Trump now, and that's if enough people switch from Hillary to Governor Gary Johnson and maybe that will stop the tide of misfortune that comes next.

Tuesday, August 16, 2016

The Eventual Stupidity of Investors

Right now stock markets are climbing to all time highs, at a time when productivity, demand, and worker participation are at all-time lows. Add to that, ageing demographics implies higher societal welfare costs draining discretionary expenditures.  While stocks are individual gambles, they are all operating now in the same investing climate which should dictate profit selling and reducing positions in line with expectations.

Yet stocks are rising and indices are all-time in the US. This is a contradiction. The macro reason is the ultra-liquidity in larger organizations needs to go somewhere and bonds are becoming guaranteed money losing investments.  This is the reality, so people are betting on companies to at least keep their money safe.  Fat chance.

The flight to safety/ quality is a lemming charge off the cliff, the eventual stupidity of investors.  

Right now, lemmings are overconfident in the outcome of the US election, where if Trump or Clinton win there will be dramatic changes to policy and directions the nation takes. The volatility level is surprisingly low for an election year, where zero hedge indicates they must think central banks will save them.

Even if your stocks are in profitable companies, even if they execute at 80% to 100% of forecast, they are still able to return to investors %5 on investment. Why is this a problem? Right now companies are using stock buy-backs to gin up returns and keep their options profitable.

Can anyone tell me what the 5% yield means to a stock that has increased 100%? Yes, that yield - ignoring specifics - for the investor buying at twice the price is 2.5%. You are paying far more and getting far less.

Which constituency has the greatest impact when investors run up the stocks' prices? Yes, insiders with options; exactly the wrong people you want to profit from your money. Their sales will be guaranteed, your money is not.

When Icahn, Marc Faber, and Welch  as proven industrial captains are warning of collapse it's not a question of if but when. This is the summary of economics right now:

And yet, this flight may cause the bubble to burst. All it takes is one massive institutional investor to swamp sell out. If you invest in these stocks you are risking 100% of your money with a slim chance of half returns. Insiders will make a profit and you might not be able to sell in time to get out.  Yes, I concede the volatility might gain you a profit in the short term if you are smart and fast enough. How many are both of these? Most are investing on "hope" and that's why they fail.

My definition of stupidity is fighting old battles: not learning from history how to avoid dangers.   The 2008/2009 bubble was seen and people did not respond in time to avoid. The graphs are aligning to 2008 proportions.

Yet another graph with data one can't spin:

Here's another astute investor pointing out it is interest rate hikes - with so many industries depending on cheap money and massive leverage - that is the single biggest risk to future profits and even business as usual. Hanjin is not the only company that will go bankrupt through over-leveraged operations.

Even truck purchases indicate a recession is underway.

More evidence the market is in overhang mode, last week there were two inside weeks in a row. That is a black swan-type unusual event heralding doom conditions.

Jim Cramer thinks it's turned market sentiment that is punishing under-performing stocks. It's not; cautious people are sniffing around the edges of the next financial collapse. Poor performing stocks are the canary in the coal mine.  Savvy investors are not rushing back into stocks if they suspect bad news might trigger a huge drop.  That's not bad sentiment, it's people paying attention!

Here's a smarter play, pull out your money and wait till these stocks crash. That's a guaranteed way to increase your yield buying in the trough not on the the bow wake. Rebuy at reasonable prices is a smart play.

Riskier for those with balls, short Apple, Google, and Facebook.

Saturday, August 13, 2016

Deregulate Marijuana

If you want to make marijuana legal, stop calling the process:

"Decriminalizing marijuana"

"Legalizing marijuana"

Both those concepts assume there is a reason why they refer to illegality and therefore they need to be illicit. Marijuana is a natural product like sugar.  It has harmful effects just like caffeine and sugar. Those concepts link it to crime.  This relationship is over simplistic to the point of rejecting the basic premise.

The "decriminalize" mindset is a holdover in the meme psyche of our prohibitionist past. There is no real reason except dogma why that is.

If you want to appeal to right wing thinkers - who work on a pro-conservative basis, you should refer to it as:

"Deregulate marijuana"

Conservatives believe in minimal government and reducing government
overreach into freedoms. To deregulate is to increase freedom and civil rights.

Monday, August 8, 2016

Perfect Futurama Quotes

For those of you who express yourself best in Futurama quotes, because it's the superior nerdy Simpsons, I present to you the Morbotron (It's not mine, I just needed a flashy way to end sentence):


Saturday, August 6, 2016

I am posting on Twitter

Some people may find even shorter discourse interesting.  I find a challenge in compressing many complicated ideas in a single tweet. Most professional people / professionals are not very good at it. Trump is the worst.

If you want some stylistic tips to emulate, here is my Twitter handle. Read how much I can cram in a tweet that's writing practice.

I will follow you back!