Earlier posts · Page 28
The Dark Side of the Morning, from anonymous
The handful of SpecListers who have had investments in crypto are well past 30 (no offense intended, you don't look it).
But yes, many of the enthusiasts are millennial. Having come of age in the depths of the financial crisis, they have a keen distrust of the banking system and the political establishment that reinforces its oligopoly power and socializes its risks.
I have cut and paste the answers I got from a very good friend who really can hack the math and the digital mysteries of cryptocurrencies. He is 30.
My contribution is the choice of a sound track.
Stefan Jovanovich writes:
"A Brief History of Bitcoin Hacks and Frauds"
Sum up the number of stolen bitcoins just from the 7 hacks mentioned by that article and multiply by current price. Adds up to greater than $13B.
Out of all the bitcoins ever mined, 6.6% of them were stolen from just those 7 hacks.
And that is with bitcoin basically only used by tech savvy people. Imagine how much worse it would be if bitcoin went mainstream?
This site offers a retrospective on 45 different hacks.
Demise of Rball in S. Diego, from Bo Keely
I was just notified by a historical foundation that there are no longer any court clubs in San Diego.
They've all been leveled or converted to doughnut shops and Crossfits.
The IRA cannot hold any tournaments in San Diego, and for the first time no player in the top 50 hails from the mecca.
There are no courts to play on.
That's a feather in my cap.
Bugs and a Bad Cancer, from Kim Zussman
"Researchers find bacteria tied to esophageal cancer"
December 1, 2017
David Lillienfeld writes:
There was a Nobel award in the early part of last century for the discovery of the bacterial cause of cancer. The work was subsequently found to be deficient.
anonymous writes:
If they give Nobel Prizes for common sene then my Grandfather should receive one. As a nine year old boy I was heartbroken when my Granddad told me that our black Lab Duke was sick and not going to get better. I asked him what was wrong and he told me he had cancer, a sickness where the body turns against itself with healthy tissue being taken over by the disease. "Why? What causes this?" I asked. "Well it was probably from his food (diet) or on the instructions he got from his mom and dad since he was a puppy (ie. Genes)".
So why do humans get cancer? Same reason: our diet and our genes. Why do elephants not get cancer? Going out on a limb here… their diet and their genes.
The highest rates of cancer outside of humans in higher order species are the very ones in which we human control the diet: livestock and pets. Given that dog's frequently consume the scraps of their human family's meals one would EXPECT to see a significant correlation to diet induced disease. Veterinarians note that cancer has become much more prevalent in man's best friend in the last half century and again–Captain Obvious–it has also increased discernably in man.
BTC Futures Launch Impact, from Andy Aiken
Today, the fund that trades as GBTC is down over 25% on the day. Yet BTC itself is up 2%. I attribute the drop to the impending launch of BTC futures on the CBOE, CME, and Nasdaq. So Anatoly was right, in a way. The effect on BTC itself remains to be seen.
This fund, which is not an ETF, has traded at a premium as high as 100% over NAV, and was trading at an 80% premium yesterday. A more sophisticated investor could have invested directly in the Trust by buying shares at NAV. After a 1-year lockup, one could have a GBTC share cert issued, and sell the shares at the premium. But people were foolishly buying shares of this product, perhaps so they could have BTC exposure in a tax-advantaged account.
The Power of Groups, from Mr. Rove
"The power of Groups is that they're where people go to have conversations about specific topics. So, in the context of conspiracist or highly partisan communities, they can become incredibly powerful echo chambers; few people join a group to start challenging the prevailing opinion, and those who do typically get kicked out."
-"Fake News and Rabbit Holes: Radicalization via the Recommendation Engine"
One of the Pleasures, from Victor Niederhoffer
One of the pleasures of a long lived affinity group like this are the little improvements to one's life that occur not planned but arising out of a little something of friendship. 15 years ago I met Vince Fulco on the list. He was a good man and had a wonderful wife who tragically succumbed. Vince was a can do guy who always could be counted on to do the little extra that goes beyond dollar or clock.
He taught me to roll the tennis courts with a circular path rather than perpendicular among countless other things. One thing he did was to set us up on the bloomberg so that we received spot prices free for the metals rather than the costly futures. For 10 years we saved money by using spot rather than the futures. Certain adjustments had to be made since there was a 3 and a half hour difference in their closing times… but now gold trades as much as bonds, 300,000 contracts a day. And it's become viable to trade in size as is bunds rather than bonds. So we bite the bullet after 12 years and get the future prices and recall all of Fulco's contributions to our life and are not surprised at all that he is doing so well in China. We thank him and wish him well in his pursuits. He's a good man. I could write a similar story about many on this list– but it's a little lugubrious after a stroke and it takes a meaningful % of my remaining life expectancy to type a long memo these days.
Comments
Stanley Rowen on December 8, 2017 11:57 pm
Sorry you’re not well, and wishing you a full and speedy recovery. I’ve been a big fan of yours for years, ever since reading the two books on speculation that you authored. Yes, the affinity group enables one to connect with like-minded people, while also offering fresh perspectives to ponder.
Bubbles Not Tulips, from Stefan Jovanovich
Andy Aiken writes:
Since bitcoin is one of these emotionally freighted subjects that permits otherwise serious investors to unironically post charts that juxtapose data from highly disparate eras, contexts, and time frames, I might as well contribute one too.
Stefan Jovanovich writes:
It is not emotional, Andy. If it were, I and others would not have complimented you, both on the List and privately, on a great call. What the professionals on this List have taught me is that price movements are themselves information, independent of the units they denominate. The difficulty with your chart is that it is not a display of prices over time. What I find paradoxical about cryptocurrencies is that their growth in popularity and transaction volumes has been accompanied by a rise in price that is independent of any increases in outputs or payouts. All other mines in history that have seen dramatic price rises in their asset values have seen even greater increases in outputs even as the output prices dropped–salt, silver, gold, coal and even diamonds all followed this pattern. The asset prices for the leaseholds for the essential commodity of the modern age–oil & gas energy–have confirmed this same pattern. Rockefeller became the wealthiest man in history by owning the distribution and production of a product whose price plummeted even as consumption soared.
Clearly, cryptocurrencies, like Tesla's newly imagined giant batteries, defy all the known rules. Congratulations on the unprecedented and profitable levitation.
Andy Aiken replies:
I didn't mean to say that your points, or the discussion on the List, were emotional. It's been a rational discussion here, although I do think dismissing bitcoin as a bubble similar to the South Seas stock bubble shows an insufficient understanding of bitcoin as well as the South Seas affair.
My "emotionally freighted" reference had performances such as this recent Joseph Stiglitz interview in mind. "We ought to just go back to what we have always had" (i.e. the state prints money at will and deliberately impoverishes the middle class over multiple generations) One of the B'Berg commentators even chips in with his pathetic misunderstanding of Marx, as if to red-bait libertarian viewers who might consider buying a few satoshi.
I was thinking as well of this chestnut from Paul Krugman, another courtier to the flexions:
When I have been in doubt about how to live or invest, doing what Krugman and Stiglitz consider evil has always been a rewarding choice.
What is unique about bitcoin is that unlike diffusion of earlier technologies, in which investors participated by investing in representations of the technology (startup companies), in the case of bitcoin and a handful of other platform cryptos, the coin is definitionally equivalent to the technology.
The dynamics driving the price are aligned with Brexit and the "surprise" election of Trump. Bitcoin is a Cassandra for our age.
The price could of course drop by 50% or 90%. As Jayson points out, it has dropped by this magnitude several times previously. It's the nature of innovation that isn't "managed" by the state.
Comments
Andre on December 7, 2017 12:53 pm
I believe the gambling habits of asians are driving this. Their government crackdown makes it all the more alluring to them. Maybe like sticking it to the big man.
Andre on December 7, 2017 12:56 pm
The best most accurate observations are usually taboo i believe because it leaves the loser or the mass man out of the winning like in turf betting book
Articles, from Victor Niederhoffer
Articles from Goldman paint a bearish picture and they are so flawed in their analysis. This is what the CFA stuff has led to. Gresham's Law.
anonymous writes:
Does "the CFA stuff" mean the attempt to certify critical thinking and standardise which facts are important?
Comments
Arch on December 5, 2017 12:12 pm
Does “the CFA stuff” mean
I think he means empty credentials useful only on Linkedin profiles.
Article of the Day, from Mr. Rove
"The Secrets of the Wave Pilots":
What seems clear is that our ability to navigate is inextricably tied not just to our ability to remember the past but also to learning, decision-making, imagining and planning for the future. And though our sense of direction often feels innate, it may develop — and perhaps be modified — in a region of the brain called the retrosplenial cortex, next to the hippocampus, which becomes active when we investigate and judge the permanence of landmarks. In 2012, Maguire and co-authors published their finding that an accurate understanding of whether a landmark is likely to stay put separates good navigators from poor ones, who are as apt to take cues from an idling delivery truck as a church steeple. The retrosplenial cortex passes our decisions about the stability of objects to the hippocampus, where their influence on way-finding intersects with other basic cognitive skills that, like memory, are as crucial to identity as to survival.
Recently, Maguire and colleagues proposed a new unified theory of the hippocampus, imagining it not as a repository for disparate memories and directions but as a constructor of scenes that incorporate both. (Try to recall a moment from your past or picture a future one without visualizing yourself in the physical space where that moment happens.) Edvard and May-Britt Moser have similarly hypothesized that our ability to time-travel mentally evolved directly from our ability to travel in the physical world, and that the mental processes that make navigation possible are also the ones that allow us to tell a story. ''In the same way that an infinite number of paths can connect the origin and endpoint of a journey,'' Edvard Moser and another co-author wrote in a 2013 paper, ''a recalled story can be told in many ways, connecting the beginning and the end through innumerable variations.''
Ever Since the CFA Exams, from Victor Niederhoffer
Ever since the CFA exams I have noticed a tendency for Wall Street research to deteriorate. A Gresham's Law appears to be operating. The articles like the white shoe one I mentioned are chock full of seemingly sapient stuff that are scientifically flawed amid reference to Shiller p/e data with their 10 year averaging and data when no earnings were reported etc. They refuse to take account of interest rates and use technical analysis and charts for suggestive but random conclusions. It is sad to see this deterioration as literacy increases as predicted by Nock.
Alston Mabry writes:
I find that if I'm really serious about an individual ticker, one of the few places where I can get at least trailheads to research is the earnings conference call, not for the company's answers but more for the analyst's questions, assuming there are analysts on the call who are at least somewhat skeptical. Not that I dig into individual tickers that much anymore.
anonymous writes:
Vic's point of Gresham's Law happens everywhere, but especially in situations where there are credentials given that appear to have value. IMO the CFA society exists (as does the CMT) primarily to enhance the status of its anointed ones (for a price), and for the side benefit of providing income to the society heads.
Al is right: There is no original thinking and virtually no research. But there is a benefit to us thinking ones: If all of what passes for research is bot-written drivel, released over some time period, a case can be made for trends to exist based on the gradual release of the drivel. That would support the contention that what really drives certain markets is momentum and sentiment.
Never complain about the weaknesses of your opponents; exploit them.
Allen Gilespie adds:
In an effort to defend free thinking CFAs from the white shoe firms, I have attached and included a link to my most recent annual analysis on the Dow Jones Industrial Index built on Ben Graham's method's with an added modern twist and nod to Richard Russell in a world of QE. I have also include my white paper on Bitcoin, Banking, and Bernanke in a World of Monetary Chaos from 2013. Prior year reports available to those with a Bloomberg under DIA US equity. Given that the economy now includes industrial businesses and network/software type businesses like MSFT and V I think there is a delta between book value, average ratio and earnings methods due to network value theory and excessive monetary inflation. I am calling this new valuation framework my Gold, Bitcoin, Dow Theory whereby one bitcoin plus one gold coin = one Dow share. Obviously, figuring out the key ratios is key, but in short, the theory is that gold and tangible book on the Dow should trade on a ratio. There will then be the goodwill book value which gets measure by crytpo, so in combination they will equal the value of shares in fiat. In short, there is value but that value is dependent on the value of money, assets, earnings, and interest rates. We live in a world of fiat, hard, and crypto currencies. In short, I think QE is the same as John Law effort to demonitize gold but then cryptos broke out - you can inflate values but the market will find a way to make proper measurements. I have started making all price targets in dollars, gold and bitcoin equivalents - when money is mispriced it is hard to know the value of anything and all secular bear markets are the result of a breakdown in the monetary system (greenbacks - bi-metal system - gold standard - Bretton Woods - Quasi-Free float - Crypto) - bear just don't understand how they play (sometime values decline (deflation) (1929-1932), sometimes they inflate (1966-1982) so nominal prices hold but you loose purchasing power, and sometimes you hyperinflate your values go up but you gotta find a better currency (cyrpto).
The Dow Jones Industrial Average - Fintrust Investment Advisors
Bitcoin, Banking and Bernanke - Fintrust Investment Advisors
Rocky Humbert writes:
Spurious correlation. The first CFA exam was administered on June 15, 1963 to 278 men and 6 women. In 2017, the pass rate for CFA-I was 43% out of 189,000 candidates. The average starting salary for most CFA's is under $100k.
See page 55 of From Practice to Profession: A History of The Financial Analysts Federation and the Investment Profession
"CFA Says Pass Rate for Level 2 Climbs to 47%, Highest Since 2006"
Russ Sears writes:
While I agree with much of what Rocky states, what appears to be missing from the thread is that the motive for much "rresearsh" is often CYB (cover. your. behind) Designatona helps but the real cause and effect of such proliferation is litigation and regulation.
Gordon Haave writes:
I'm a CFA and I agree with Vic and Jeff. Almost anything written by a CFA is formulaic and uninteresting.
I get an email once a week from the CFA society linking to all the things on Seeking Alpha that were written by CFA's and they are almost universally worthless.
Rocky Humbert writes:
Wait a second. The hypothesis proffered by Vic was that "ever since the CFA exams I have noticed a tendency for wall street research to deteriorate. A greshams law appears to be operating."
We are in agreement that virtually all of the research is unhelpful or rubbish. But it is incorrect to to attribute this to the CFA exam or to suggest that this is anew phenomenon. At the very least, it is due to the fact that customers of wall street firms do not pay for the "product." And the price of the product has finally converged to the value. Do you remember Henry Blodgett? Mary Meeker? That was 20 years ago. This isn't news.
Additionally, back in the early 1990's and long before the front-running scandals, David Silfen formed an internal prop group to invest based on GS analyst research. The results were abysmal and the group was disbanded.
Russ Sears writes:
While I agree with much of what Rocky states What appears to be missing from the thread is that the motive for much "rresearsh" is often CYB (cover. your. behind) Designatona help but the real cause and effect of such proliferation is litigation and regulation.
Paul Marino writes:
I agree with you Russ, but in a world where you can pay to know if Fed Powell likes his morning egg hard boiled or over easy I'm a little over easy myself. Bernanke was an oatmeal man. This is Flexionic activity written by Gov's and the Operator's will take every advantage over the common man.
Allen Gillespie writes:
In an effort to defend free thinking CFAs from the white shoe firms, I have attached and included a link to my most recent annual analysis on the Dow Jones Industrial Index built on Ben Graham's method's with an added modern twist and nod to Richard Russell in a world of QE. I have also include my white paper on Bitcoin, Banking, and Bernanke from 2013. Prior year reports available to those with a Bloomberg under DIA equity. Given that the economy now includes industrial businesses and network/software type businesses like MSFT and V I think there is a delta between book value, average ratio and earnings methods due to network value theory and excessive monetary inflation. I am calling this new valuation framework my Gold, Bitcoin, Dow Theory whereby one bitcoin plus one gold coin = one Dow share. Obviously, figuring out the key ratios is key, but in short, the theory is that gold and tangible book on the Dow will normalize and the delta goes to crytpo, so in combination they will equal the value of shares in fiat. In short, there is value but that value is dependent on the value of money, assets, earnings, and interest rates. We live in a world of fiat, hard, and crypto currencies. In short, I think QE is the same as John Law effort to demonitize gold but then cryptos broke out - you can inflate values but the market will find a way to make proper measurements. I have started making all price targets in dollars, gold and bitcoin equivalents - when money is mispriced it is hard to know the value of anything and all secular bear markets are the result of a breakdown in the monetary system (greenbacks - bi-metal system - gold standard - Bretton Woods - Quasi-Free float - Crypto) - bear just don't understand how they play (sometime values decline (deflation) (1929-1932), sometimes they inflate (1966-1982) so nominal prices hold but you loose purchasing power, and sometimes you hyperinflate your values go up but you gotta find a better currency (cyrpto).
anonymous writes:
David Simon made a related point to all this with regard to journalism. (He worked for the Baltimore Sun before writing The Wire.) As seasoned journalists who knew their beat were replaced by cheaper fresh faces who can still write words, skepticism and quality deteriorated.
Greatest Bubble Since Dotcom, from Anatoly Veltman
Infographic: Visualizing the Journey to $10,000 Bitcoin
How did Bitcoin jump 10X in value in the matter of just 11 months? This timeline visualizes the events in the journey to $10,000 Bitcoin. After dotcom popped, many companies lost 98% market cap - yet an operating concern remained (YHOO comes to mind). What's behind Bitcoin? I have removed 2000-3000 as an area of support following this weekend's madness. Clearly, she'll end below 1 Alas, as I always said, the hi print is likely prior to CME debut.
Andy Aiken writes:
"Clearly" and yet Anatoly claims to have no position. Evidently his net worth is tied up in airline vouchers.
anonymous writes:
Actually the "right" trade during the dotcom bubble was to be long and own low delta, far out of the money puts. The same was true during the silver bubble, the nat gas bubble and all exponential moves. What I find astounding is that some people never learn from their past mistakes. If you don't know who the sucker is at the poker table, look in the mirror…. Of more interest than calling the "top" or "bottom" in bitcoin (or anything else) for bragging rights and which are worthless, what do intelligent people expect the opening futures yield curve/implied interest rate for Bitcoin futures to look like? There is no real borrow market; so should futures be in backwardation? Or should it be upward sloping like a regular currency with a positive interest rate? My guess (based on learning from experience) is that speculative flows will swamp arbitrage flows and so it will be in backwardation so long at the market is rising strongly — and once the price has topped and it starts declining, the yield curve can/will go positive. My instinct is that the shape of the futures yield curve will provide a better clue about the status of the bear/bull debate than pulling numbers out of the air — and it's options on futures where the real fun will be had. Does anyone have a better perspective on this?
Andy Aiken writes:
Finally an interesting question on this subject. There could be some good spread trade opportunities, since I expect the term structure to move wildly in the initial stage of market development.
I expect it to be mostly in contango at first, but move to a modest backwardation that reflects an implied yield.
Bill Rafter writes:
From the cheap seats, bubbles tend to coexist with inversions (backwardation). Current uncertainty places a premium on the near month while the distant months play with the expectation of mean-reversion. Isn't that exactly what Bitcoin is all about? So you would expect Bitcoin futures to show backwardation. The only problem is that you cannot build an economically rational model for such a price structure. Thus it seems as though momentum and sentiment will rule the day. Appropriate quote from the Senator: "It is conjecture. When a researcher lacks hard evidence, conjecture is his greatest tool. Some conjecture better than others. Some conclusions are more conclusive than others."
Comments
Scott on December 2, 2017 5:33 am
Ah yes, the spreads will be will quite nice with implied vols over 100. With so much questionable activity in the exchanges, I just hope we get to see it before one of them implodes like mt. Gox again. Inevitable.
russell thomas on December 2, 2017 6:42 am
My thoughts on a perceived Bitcoin bubble. The price of bitcoin is reaching for the sky . It may be the first time in history where the whole world is able to speculate together connected by a light speed communication network called the internet. Not just many nations but different age groups. Mostly the young. Kids can mine from their bedrooms and trade on smartphones which everyone has. The young have grown up on bitcoin
Ed on December 4, 2017 8:32 am
The right trade was to ride the bubble while knowing it was a bubble, Soros style.
Arch Stanton on December 4, 2017 6:09 pm
There should be a law, in the spirit of Godwin’s Law, to reflect that all financial websites eventually turn into Bitcoin discussion venues.
Andrej Bojovic on December 4, 2017 6:22 pm
For those who know this area, where would you look for the “low delta, far out of the money puts”?
Pierre Aribaut on December 31, 2017 5:14 am
There are now many risks on the Bitcoin : spread (already big when nothing happens, so imagine when something happens…), liquidity (market risk), exchange platform (that can be hacked or implode, so you can lose your bitcoins because of the platform), valorization (market risk).
Miner Update, from anonymous
I posted on a friend a while back that started out with 50 servers a year ago mining BTC. He recently found some investors and is scaling up to 2000 servers. Some metrics he follows; on his variable costs (electricity, rent, etc), he budgeted it would take 15 days of mining each month to cover, last month it took 5 days. Return of capital he budgeted 6 months, actually taking 3 months. Break even prices for BTC (marginal mining cost) is $1000 to $1200. Says scale is important, bigger processing capability of 2000 servers allows more profitable transactions. They will soon be #2 in their "pool". He has a good relationship with largest server producer in China and negotiated a power deal in the US with decreasing marginal cost based on usage. On ICO and cryptos in general he would not know a crypto-fork from a salad fork, but knows how to run a business and will ride this wave for as long as it goes, with a good cushion above BTC $1000.
Jim Lackey writes:
Why isn't Google Amazon or the valley locking this biz? Good question or as usual I'm last to know.
Anatoly Veltman writes:
I could never understand the ethics of crypto mining "biz". You certainly use up resources–to produce "what"??
J. Hales writes:
Would your friends ROI be positive without the rally? Or more simply: would his investors have done better simply just buying Bitcoin outright?
Years ago when Bitcoin was trading around $50 I did a lot of research on mining operations almost every single one was essentially equivalent to: long bitcoin - expenses of maintaining servers and operations. None the less, they were extremely popular 'investments' as people liked the cachet of being a technologically sophisticated 'miner.'
Quantum Computing Update, from Dylan Distasio
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
BTCorrelation, from Kim Zussman
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.
Comments
Andre on December 1, 2017 11:44 am
It looks like tulip bulbs to me. Who were the original users of bitcoin, I think clueless deviants wanting to buy drugs on the internet. Some average marijuana was bought for $30,000 of bitcoin in today’s bitcoin value. Is it not digital fiat? I don’t get it.
B on December 2, 2017 8:27 am
Who where the original users of the internet? Deviants who wanted drugs and porn. Looks like that turned out ok.
Notes on Corn Yield and Other New Developments, from Jeff Watson
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.
Gold and Silver Summit in San Francisco Talks Bitcoin, from Bud Conrad
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"
Alabama Senate Race Update, from Stefan Jovanovich
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.
The Darkest Hour, by Victor Niederhoffer
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.
Strange Pursuit, from Victor Niederhoffer
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.
No Justice for Survivalists, from Mr. Rove
"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.
Alabama Senate Race, from Stefan Jovanovich
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.
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.
Virginia Tech vs Virginia, from JT Holley
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.
Comments
Andre on November 27, 2017 9:59 am
Th rabbit hole is when you introduce attribution error and you believe it’s because x and y reason you’re losing but in reality the odds are so against you. I learned this the hard way.
Replicability in Social Science, from Mr. Isomorphisms
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.
TSLA, from Julian Rowberry
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.
Comments
Andrej Bojovic on November 25, 2017 9:40 pm
I agree with Julian that TSLA is far from a normal car company. Even their cars only look like cars when they’re actually a bloated marriage between a large electric drill and a smartphone.
Their customer base is like a rock band’s fan club so they get all the marketing they need for free, with social media providing the platform. A lot of their customers aren’t even car fans, just people who like cool expensive gadgets.
And they’re a tech company employing the best engineers in the world, their progress of speed is counterintuitive because it’s not linear.
In 10 years they’ll take a piece of the market from the car companies, the oil companies, the electric companies, the trucking companies, the convenience stores, the construction companies, the plane companies, Uber, public transport and a few others that even they themselves don’t know yet.
And they’ll have a jolly good ride while analysts will keep thinking they’re looking at a car company just because a Tesla looks like a car.
Neither One Nor Three But Two, from Kim Zussman
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
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.
Bitcoin Milestone, from Andy Aiken
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
Comments
russell thomas on November 25, 2017 12:09 pm
The idea of having an international neutral currency detatched from nation baggage and regulation is obviously quite appealing . Im just learning about bitcoin , and quite alot to take in. At first glance bitcoin is agreat idea but im gussing a fork will occur that could make the original bitcoin unwanted and then of no value. Is this possible ? Or will bitcoin always exist and always be in demand even if a fork ends up more value ?
Palm Beach Thanksgiving, from Pitt T. Maner III
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
Outlaw Game Theory, from Bo Keely
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.
Comments
Neil Raphel on November 21, 2017 11:12 am
Great articles about Slab City. I think you have the making of a Netflix series. Don’t sell the rights too cheaply.
One, from Bill Rafter
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.
Comments
russell thomas on November 20, 2017 3:22 pm
Donald Trump or Teresa May could be next
Finance Book Recommendations? from Vince Fulco
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.
Comments
nat on November 21, 2017 7:51 pm
I read the first edition of this book and found it relatively helpful before taking a position modeling CLO/CDO deals. Likely a bit out of date but anything new likely rimes.
Recycling in Slab City, from Bo Keely
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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:
- CRV (CA Redemption Value) – Every bottle, can, and jug is redeemed.
- Metal– Recycling brass shells from the Chocolate Mt. Gunnery Range is big business.
- Wood– All scrap wood is used for construction or campfires.
- Food – Everything is eaten.
- Textiles – Everything is passed on, or put on free tables near the bus stop.
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.
Comments
Robert M on October 9, 2021 11:40 pm
Living clean and simple is a great recipe for a life well lived
Might is Right, from Bo Keely
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 Rightby 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.
Comments
Andre on November 17, 2017 5:28 pm
pdf of the book
https://thundermark.files.wordpress.com/2014/07/might-is-right.pdf
Liquidity Squeeze or Not? from Bill Rafter
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.
BTC 8000 Top Call? from Andy Aiken
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.
Comments
Andre on November 18, 2017 12:47 pm
https://unglueit-files.s3.amazonaws.com/ebf/05db7df4f31840f0a873d6ea14dcc28d.pdf
white paper by Satoshi Nakamoto
I wish I would have made the connection between my frustrations after reading the creature from jekyll island and this technology which I was too dumb to understand at the time.
Andre on November 18, 2017 12:48 pm
white paper
https://bitcoin.org/bitcoin.pdf
DC on November 19, 2017 5:41 pm
Will be interesting to see the terms structure on of the futures contracts. Most likely contango since there in no yield on BTC and there is a cost to borrow, but how steep and does it go above or below the short term interest rate imply some sort of prediction by the market. Conventional thinking is many want to sell futures to hedge cash BTC, making me think it will be the opposite, steep contango.
Murali on November 21, 2017 12:12 pm
Hi Andy,
Can you share any good resources on cryptocurrencies for newbies?
Thanks.
jason humbert on November 28, 2017 8:52 pm
great call. very timely indeed
The Elders, from Bo Keely
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.
Low Volatility and Investor Complacency, shared by Stefan Jovanovich
"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.
That Anniversary, from Charles Pennington
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.
Stocks Looking Vulnerable, from Mr. Rove
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.
Some Takeaways from a Meeting with the Senator, from Victor Niederhoffer
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Gann's son says rumors about his dad's fortune are false
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Heiby didn't trade much but had a printing bus that paid bills
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Senator is bullish but finds it harder to make the triple digit returns any more
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A certain bear has 30 people writing bearish things for his followers
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It was hard finding a place to trade during the hurricane in St. Croix
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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.
Comments
Victor7 on November 12, 2017 9:40 am
a reader asks if I am still alive… yes. but20days ago i suffered a stroke i am on mend
“If” by Rudyard Kipling (A trading poem), from Peter Ringel
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!
Comments
David Rosenfeld on November 14, 2017 9:39 pm
Please see the Part III of my poem “Nonbeliever,” the fully edited and correctly footnoted, complete version of which is available in softcover as a collection of scorched-lung libertarian poetry in “The Husbandman.” The penultimate stanza refers to the Principle of the Everchanging Cycles from “Secrets of Professional Turf Betting” that Mr. Niederhoffer used to talk about.
III.
Truth burns deep and long and new.
Principles all deadwood hew.
Knowledge heats to forge those who
Will mold and cast their minds.
Sprinkled over like a dust,
A crackle of cerebral crust,
Free men staking deals on trust
Trade in values, right and just.
Life is of the living born;
Only living dead can mourn.
That which lost, if not forlorn,
Can, in time, all be regained.
For that which is, so not shall be,
Forever through Eternity.
What will come cannot be planned
But guided by Invisible Hand.
This be known, if not much more,
Gleaned from secret gambler lore:
A way that wins is soon displaced
Yet also by improvements graced.
So sings this lone non-believer,
From his vantage point no nearer
To despair than that achiever
Whose great glories wax no fleeter.
A Political Signal You May Have Missed, from Mr. Rove
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.
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It has never been the case that incumbents got booted out like this, let alone all of them.
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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.
Comments
Chris on November 8, 2017 10:09 pm
It’s not that people hate trump, it’s that people hate establishment republicans.
Richard Berger on November 9, 2017 4:59 pm
Nonsense. I live in PA and there was very little interest and low turnout in what were essentially local elections. That contrasts with 2016 where it was truly Trumpsylvania.
Venezuela, from Stef Estebiza
"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.
The Silence is Deafening, from Tim Melvin
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.
Comments
russell thomas on November 6, 2017 5:35 pm
As North American sports go. Ive watched NHL Ice Hockey in london and it was a great game.
Watched American Football and it goes on for far too long, way to many stoppages.
Football is the most popular game in the world for good reason and lasts 90 minutes.
If you like NFL why not try Rugby League , which NFL partly originates from . Its tough skillful and lasts 80 minutes.
Rugby Union again tough and skillful , also lasts 80 minutes. These 3 games played around the globe and developing in USA.
Timothy Melvin on November 7, 2017 9:54 am
David didnt write this piece…I did
Barman on November 9, 2017 10:55 am
boring….
Russian Facebookers, from DVG9
"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?
Betaball, from Chris Cooper
"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.
Public Spectacle as Punishment in an Outlaw Town, from Bo Keely
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
- 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.
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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.
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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.
- 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.
- 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!'
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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.
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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.
CME Group Announces Launch of Bitcoin Futures, from Michael Chuprin
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.
Comments
Joe DiLeo on November 1, 2017 8:20 pm
Digital currency will yield most significant global finance disruption ever experienced. Never before has innovation at scale had ability to impact both 1st & 3rd world economies with equitable levels of adaption & import.
Each of our 7.6 billion fellow planet-dwellers who are unbanked, privacy absolutist, enemies of corruption/manipulation omnipresent in fiat currency, tax sheltering esq., criminal cartel,s etc—-> has now found nirvana.
The opportunity cost of ignorance will be incalculable.
Andre on November 2, 2017 12:10 pm
This thing is absolutely insane. I bought bitcoin in 2012 and the broker Mt Got went out of business. With all the mercurialness of bitcoin back then I don’t understand how this has been allowed to happen. Is it foreign governments despite to topple USD as world reserve currency?
Slab Theft Methods, from Bo Keely
About the only thing that hasn't been stolen around here is the honesty to thieve with good judgment. The town is a circle of theft, like a bucket brigade out one shore and into the other. You would think it an infinite zero game, but new goods roll in faster than new hands to grab them.
Their methods are varied and creative.I'm going to write them down as I learned them – with a smile – as a victim and from other victims.
• The most common technique is door-to-door knocking. If you're not there, he goes in and takes something. If you're home, he says 'Hello', and comes back later.
• The second most common technique is shop and steal. This is a walking town, and the rows or trailers and shelters are like Walmart aisles. See something you like, put it in a basket. It is done primarily at night since neighbors tend to form neighborhood watches.
• Campfire thefts are the third most common. A thief walks from fire to fire, observing the participants, and visits each in turn's camp to rob.
• The hot pool is another tipoff to the burglar who phones a comrade to make the heist as the victim frolics.
• Thieves love Saturday night at the Music Range. They bop by, listen to a song, watch the dancers and audience, and go rob their camps. They return to the Range to substantiate their whereabouts, and at last call pickpocket the sleeping drunks.
• Arsons are timed to cause occupants to flee, so those who arrive to extinguish may plunder.
• Dog theft is rife to draw an owner from his camp to be robbed.
• It's not easy to steal where the landlord is a thief, but the man I rented from kept a key and stole from me.
• The most lucrative housebreaks occur weekly when someone is carted to jail, and the early bird gets the worm.
• Each summer people pass from heatstroke, and the thieves invade like maggots. They tear apart the walls for jewelry, marijuana, weapons, cash, and ID.
• The opportunist is a walking lookout, with eyes open and ears open and hands open every ticking minute of the day and night.
• The thief thinks, and is right, that the most conspicuous is the least obvious. Every bystander thinks the other bystanders would catch a wrongdoing.
The boldness of thieves is not surprising if you put yourself in their shoes. No one is going to notice if you train long and hard to act natural. Some actually prefer to break into the front door, and explain that they had been hired to work on it by the owner. I caught one burglar doing this, and called the owner, as he made his empty-handed getaway. Most thieves labor hard to make it so obvious that nobody notices.
Big city thieves use cars. You gotta have a car to burglar to carry the stuff and get away. You can't use a car in Slab because it would be one of the few running ones, likely to break down, and the cops would intercept it pulling out of town. So, crime is always afoot, making it more interesting for the spectators. The action scenes are contained and in slower motion, and you can take part if you choose by stepping up and tackling somebody running down the street, chased by someone else screaming 'Bloody thief!' It's guesswork to figure who's in the wrong. It could be a distraction while your own place is being plucked.
Since the robbers have only fast feet and ATV's, they must commission a pickup to haul big booty from the adjacent valleys and gunnery range. There is about one case per year, including my mine three years ago, where the burglars 'borrow' a truck from a silent partner who does not report it stolen. He is protected because, if the truck turns up, he can say it was 'stolen' and the cops will reclaim it for him. If it's not implicated, the robbers return it with a commission in the truck bed. That's what happened at my camp, where the Slab thieves hauled off about eight loads over the course of three days, and slept in my bed, and cooked on my stove. That's why I have to smile.
Another cunning ruse is circular thievery. One crime has to be concealed by another, and so others will hire you. It goes like this: A accuses B of a burglary he has committed to victim C. C hires A to beat B up, rob, or burn him out. A tells B that C was the culprit, and C turns around and hires A to perform the same crime on B. Usually, B and C end up at each other's throats, while A gloats over the ashes that have covered the evidence of his crimes. For good measure A broadcasts the circle throughout town, omitting himself, but should be the primary suspect per Shakespeare's Hamlet, 'Thou doth protest too much.'
When the enterprising burglar is not burglaring, he is planning the next one. Who has the tidiest camp, the greenest cacti, the darkest yards, dearth of dogs, or the shades pulled? A search for original simplification begins. The basic burglar MO is to get in the easiest way, avoid confrontation, and make the unnoticed getaway.
Crime is terribly revealing. Try and vary your methods as you will, your tastes, your habits, your attitude of mind, and your soul is revealed by your methods. Sooner or later you will get caught, and may think it was all worth it.
Slab City is a well-equipped laboratory to study theft, and the instruments and strategies that have been invented to thwart them. Since this may be the town with the highest per capita burglary in the nation, at the rate of about two nightly among 200 residents, it makes sense that some of the best thieves, methods, and defenses here have been fashioned here, that may be applied throughout the US.
There is a hierarchal triangle of theft in this outlaw town, where the smallest thieves are stolen from by the fewer larger thieves, until the apex is reached that is an omniscient eye. That eye does exist, high atop a hillside by Siphon #8 of the Coachella Canal. It is a 5-foot wood sculpture like the all-seeing eye of the 1" logo on the George Washingtons in your pocket. Here the smart thieves climb and perch with binoculars, telescopes, or night vision goggles, depending on the hour, to case their board in the everyday game of Slab City theft.
Almost everyone steals.
I'm about to develop a new theory of the structure of criminal activity in Slab City. Most people who do well at crime are called Slab businessmen. Just because it is illegal doesn't change the economics of a town.
Their booty is their status. If you take small things frequently without planning throughout the day you are a petty thief. However, if you steal something grand like arms from the adjacent military range you are a gentleman of society, and everyone stops by to visit. I've arrived at this by knowing many of them, from the bottom to the top of the robbing heap.
The bare bones of the skeletal structure with the omniscient eye on top are occupied by the zombie like meth junkies who rattle throughout the night sifting camps for nickel-dime stuff to exchange at two all-night drug houses for methamphetamine. Fifty percent of this town's occupants are these Jekyll – Hydes. They are creatures of habit and action who, by second nature and so without want for a design, see something they need or might need and pluck it as a normal person might take a four-leaf clover on a lawn of green grass. Living hand to mouth, their fate is to move on when they become too conspicuous, get run out of town, or thrown in the hoosegow.
The flesh of Slab, however, the fewer and best, are the lone wolves. They have a greater range, riding Mad-Max ATV's and stolen vehicles to larger jobs, utilize some planning, and sell their loot for cash to the drug houses or townspeople. They also take custom orders from the locals, as the town's mobile Sears and Roebuck catalogue. Since they have no reported income, they get the least strung out molls. They are marijuana stoners, save no money, collect welfare, and live out their final days on medication provided by the state slabbering tales of yore in depreciated trailers to their old cronies.
There are no organized thieving rings here, except catch-as-catch can. The people are just too damn independent. They are physically robust and mentally sharp to not need, and in fact, to ward off, any organization that attempts to cajole them. Those crime rings are reserved for the tiny fractions of specialists of meth manufacture, gun assembly, scrapping the military range, and smuggling illegal aliens.
Down these mean streets a man must walk who himself is not mean, who has a sharp stroke of kindness in his heart, or he would not be tolerated in Slab City. The two types of thieves – Jekyll-Hydes and Sears and Roebuck boosters – are not heroes to anyone, but neither are they villains. They are, as stated, businessmen. They are so common as to be called the common man of Slab. Each must be a complete man and yet an unusual man. He must be, in the weathered sense, a man of personal honor.
The peace of mind of these crooks is remarkable. Outside a criminal world, a guilty conscience is the emotion as a result of some action that we've labeled or perceived as being bad or wrong. However, this is trumped in this outlaw town by the idea that every resident has been so wronged in the past by a third party – authority – that he cannot be held representable for nearly everything he does. He is merely acting out against past injustices. That anyone might think he or she can do wrong proves his moral inferiority. It's a topsy-turvy world. I have yet to encounter a guilty conscience in town, which makes them all the more light-fingered, quick thinking, and fleet of foot.
None is an intellectual, and instead it seems these common men were given the weapons of light fingers to battle the intellectual man. I find petty and grand theft here like door-to-door selling: it seems easy, requiring little talent, yet few people ever will do it well, and few manage to stick with it for very long.
The brain of a Slab thief is straightforward. He has a grid in front of his mind, and for anything in the visual world to reach him it first has to squeeze through the bars. A shovel, book, bicycle, or can of beans might enter. That information has to be broken into small cubes, and then packaged in two dimensional squares which are preferable. They take up less space in his mind, and encourage him more to steal from the outside world.
Strangely, it cannot be exaggerated how important property is to the people of Slab City. For many of them, this is the first patch of dirt they have owned in their lives by right of squat on State land. The things they put on it – their trailer, shed, and belongings – are their first possessions. At the same time, there is no one but the owner to defend what is his. This is what makes the town interesting and dangerous.
For, by nature, these people who have not had are covetous of those who do. The love of property and consciousness of right and wrong have conflicting places here. The sparks fly daily! Private property was the original source of freedom. It is still the bulwark here. The Slabs they build their lives on is a broad foundation on which nearly all of their psyche rests. And then, with one match, or one large raid, the footing is gone. It happened to me, and I've watched it happen to a dozen others. The residents fall back into two groups: The fewer socialists with an idea that there is no private property, who are fond to say, 'We would live exceedingly quiet if these two words – mine and thine – were taken away.' And, the defenders who believe that property is everything, our sole guarantee of freedom, and who like to say, 'You will not rob me even for the greater good of the community.' I think that every person's property is an extension of his mind, that nobody else has a right to, but himself.
As much as property theft is a regrettable element of the human experience, this dream destination has become a University of Slabs. Like other branches of learning, its reputation spreads far and wide, drawing learners from the Atlantic to Pacific. The campus rests snugly on State property between the Salton Sea and Coachella Canal. It is a self-governed oasis where outside laws are supposed to apply at the University, but are unenforceable.
The dorms are what you bring or build from scrap. Meals and groceries are served weekly as pocket or need affords. There are cafes of old spools and tire seats, movies thrown on sheets, wide-screen cable TV at an Internet, a distinctive anarchist library, weekly concerts, an international shrine at Salvation Mountain, and frequent tourist visitors who inject a cosmopolitan sense to the campus.
The streets are safe, but absolutely crime ridden. Crime hides elsewhere, and by far the most terrifying things out there, but in Slab City it is in the open to be studied.
A monk in his cloister, a fish in the water, a thief in Slab City.Even a thief takes ten years to learn his trade, except in Slab on the accelerated program of so many teachers the program is compressed into one year. Most newcomers apprentice under an instructor and pay a 50% commission on all swag in the initial months, before a partnership often develops. Graduates of outside institutions – jails, prisons, and reform schools - may select to start alone, working steadily toward an advanced degree of education. For now, the majority of freshmen are simple observers on their lawn chairs and through astonished windows during the early months.
The instructors are among the slickest operators I've met, and I know most of them. The only ones who interest me must be things of power, handled with cat mittens, and wicked enough to inspire protest, but kind enough to forgive. I must fear him, and then triumph over the fear, and parallel his career in harmony with all of his previous developments. I am a sort of alter ego trustee.
One step into Slab University, and you will look down to see if your shoes are missing. Come, and learn from the best. And their defenses. If you're not inclined to burgle, thieve, pickpocket, or plunder, then this will be a character building experience. The study of crime at the U begins with the knowledge of oneself. All that you despise, all that you loathe, whatever that you reject, all that you presumably condemn and seek to convert springs from you.
Why am I here? Learning is treasure no thief can touch. Every single Slab shadow spells adventure. I would rather scramble around them, and right to their top and watch the criminals turn profits in a microcosm than languish on the outside. The most practical defense against the world of burglars and thieves is a thorough knowledge of it.
Key Structures in Chess, Markets, Tai Chi and Table Tennis, from Nigel Davies
My son and I took up table tennis last year and started taking lessons in July. One thing I found interesting was the body structure required in order to strike the ball with consistency, and actually it was highly reminiscent of tai chi. The upper body needs to keep structural integrity whilst most of the movement is generated by using the waist and groin.
It occurred to me that table tennis could probably borrow a training approach used by tai chi players and other internal martial artists, that of holding standing postures (known as zhan zhuang). This form of training is regarded as a major key to making progress, though needless to say it is not very popular. I wondered if standing postures had ever been used to train tennis players, the closest thing I've ever heard of being the training done at the Spartak Tennis Club in Moscow, where the young students practice shots without hitting a ball for the first three months.
We use key structures to master chess, with certain typical positions (characterized by their pawn structures) being regarded as the most important. Many moons ago the chair pointed out to me that this had similarities to the countist's approach to markets, that certain typical situations could be identified and that when they arose they were favorable.
Anyway, my question is this: Do other spheres also have sets of key structures to work on and do these represent a cornerstone to mastery? And if they are not widely recognized in a particular pursuit, can they represent a way of gaining an edge?
Karl Rove comments:
Certainly in guitar playing this is the case, but it would be boring to explain to non-players. But it is similar to your positioning concept in table tennis, with completely different configurations of course.
(No groin action unless you are imitating Elvis, which is generally uncool.)
Comments
Anonymous on November 1, 2017 6:18 pm
These are good questions. In tennis, practice of posture is an often overlooked aspect of training.
IQ, from Scott Brooks
Normal people can have extraordinary abilities. Prof. Haier writes about a non-savant who used memory techniques to memorize 67,890 digits of π! He also notes that chess grandmasters have an average IQ of 100; they seem to have a highly specialized ability that is different from normal intelligence. Prof. Haier asks whether we will eventually understand the brain well enough to endow anyone with special abilities of that kind.
The Neuroscience of Intelligence also includes a good introduction to the history of intelligence research, beginning with the development of the first IQ tests. Prof. Haier notes that a significant turning point was Arthur Jensen's famous 1969 article in Harvard Educational Review. Jensen wrote that genetic limits on intelligence meant that there were limits to what could be achieved through early education, and that there was a significant genetic contribution to the black/white gap in IQ. This so horrified liberals that for the 1970s, 80s, and part of the 90s, it was impossible to get grant money to study IQ. Even today, most research on the brain ignores intelligence, and instead concentrates on such things as schizophrenia, Alzheimer's, and other mental disorders. The Jensen article set in motion what Prof. Haier calls "a decades-old concerted effort to undercut, deny, and impugn any and all genetic studies of intelligence."
This campaign was a success. Despite the enormous body of evidence to the contrary, many people still think that no person has any inherent limitations, and that with the right role models, cultural sensitivity, and other mumbo jumbo, anyone can become a lawyer or scientist. Prof. Haier writes that one reason for this is that people who make policy are usually fairly smart and don't know anyone who isn't. They have no idea what life is like for stupid people. Prof. Haier adds that the other reason is that denying genetics is an attempt to explain away race differences in IQ.
Bill Rafter writes:
Did Will Haier suffer the same fate as Jensen?
Another money quote:
"As Prof. Haier notes, there are 51 million people in the United States with IQs of 85 or lower. Their poverty and social failure are not their fault. After 50 years of "programs" that do nothing, we should recognize that a huge part of the problem is stupidity and try to cure it."
Comments
Ed on October 31, 2017 10:45 pm
The sub-IQ is a wealth and political power transfer conduit for the welfare/corporatist state, which is why his numbers are growing so rapidly and with such enthusiasm from above.
jim davis on November 2, 2017 1:07 am
I’d suggest that a reliable measure of low IQ would be disbelief that IQ had a significant genetic component.
Red Notice, from Victor Niederhoffer
Red Notice by Bill Browder is a true life story of present day Russian capitalism and the murder of Magnitski. The author's father was chair of the mathematics department at Chicago, and the two sons were chair of math at Princeton and Brown. Bill Browder inherited the parents intelligence and applied it to becoming the biggest investor in Russia. He found that Russian assets were being sold at 5% of their value and got Salomon to invest 25 big at the lows. The funniest part is how all his colleagues approached the news. "What's the spread between bid and asked?" "What are the advisory fees we can get out of it". He describes the market where the chits to buy the properties were sold and it's like an early version of the commodity exchanges with armed guards every where since all the transactions had to be in cash.
There are many intelligent observations he makes- eg Russians love children and it's the only place in world where you can bring a crying child into a restaurant and people will smile. That led to the importance of the adoption restriction we've heard so much about. When Magniski was murdered, Kerry refused to sign off on a bill to censure Russia but Browder put so much of a full court press on that finally it passed after the election when Kerry was going to become secretary of state anyway. So Putin in retaliation banned the adoption of Russian kids by US families.
It wasn't such a innocuous thing that the kids were involved in when they met with the Russian Prime minister but a cause celebre in Russia. It was amazing to see that Browder gave up his business to get vengeance for his lawyer Magniski who was beaten with a rubber hose shortly before he died. Above all, it the story of a very smart businessman and how he became a billionaire by buying headlong into an undervalue assets.
Anatoly Veltman comments:
I assume Browder took a lot of profits out of Russia. And he lived, too.
Look, something had to be paid. He didn't. His employee did…
Vic started this thread with an ode to the wonderful risk taker/capitalist. Part of the truth was that privatization drive resulted in the wealth of the populace ending up in just a few hands. Browder included. Many a babushka in the vastness of Siberia have taken a cut in their $60 social security to buttress Browder's retirement. Browder's brand of capitalism was a lil' too much for the majority rank and file in that land. Yes, he did pay for that nation's former assets 5c on the dollar.
Comments
Gregory Rehmke on October 23, 2017 8:59 pm
The insecure property rights system (or lack of system) of countries in transition adds the huge risks to investments. Some invest and have their money confiscated. Others invest and earn significant returns. If returns are too high though, critics claim the assets were somehow stolen from the country. Asset value comes from capable management (whether companies or natural resources). So multiple risks: maybe the companies and resources won’t be valued more highly than the purchase costs, maybe they will be higher value, but will be confiscated by those in power of arbitrary legal system, or, third option, the asset value is realized or appreciates…and the investor is accused of ripping off retirees.
Andre on October 26, 2017 11:14 pm
Its amazing the stellar series of hands browder is dealt in beginning of book aside from his abilities.
Adam on November 6, 2017 12:38 pm
Thought you might like this.
Mimi Gerstell on November 7, 2017 10:44 pm
Victor, two of your old squash buddies are arguing about your status (living or dead). I have assured David Maxwell (87) that you are alive, but because he saw a NYT obit re a different Niederhoffer, he remains skeptical of my report. OTOH, my brother Fred Gerstell (81) has been convinced of your survival even though he never uses the Internet. Any tiny message from you to me, I would forward to DM as absolute evidence.
Victor replies:
a reader asks if I am still alive… yes. but20days ago i suffered a stroke i am on mend
Internet of Things, from anonymous
I've been looking at the Internet of Things from the perspective of security. In medicine, this has become a concern—as it is everywhere else IoT is rearing its head, which is to say everywhere. The process of providing information from one node in a network to another is a transaction, and blockchains provide a means for securely effecting/tracking transactions. Why wouldn't one simply frame the transmissions from an IoT node, then, for an IoT system to assure a secure system (an oxymoron, I know)? I must be misunderstanding a bunch of concepts here, and thought someone might provide some insights that I'm lacking.
Baseball Thoughts, from anonymous
An interesting aspect of baseball is that top competitive athletes fail 70% of the time and they are considered good and are paid millions. They play 160 games a year, and no team or player no matter how good can win them all. There are too many variables. They learn to think statistically, and go for percentages. Its a different way of thinking than normal. Specs also fail 40% of the time, at least statistically and that is considered good. Winning and losing tends to be overemphasized in conventional thinking. I wonder what kind of training for youth might change that.
Stefan Jovanovich comments:
Baseball is about losing most of the/your time; for all the audience cheering and TV noise its natural pace is laconic. So is work. The game outlasts your skills if you are really good or great; it defeats most of us almost immediately. That is why its home has been the parts of "America" that have never had the pretense of being "winners" - the grain farms, the mill towns, the small city (NOT the Large) ghettoes and hoods. The people always knew that the real odds in life are never far from 50/50.
Sunday Ride, from Bo Keely
The best Sunday alarm clock is sunshine on chrome. That's what the motorcycle is, a system of concepts worked out in steel.
My 1979 Honda Enduro XL 185 is cherry red with 9,000 original miles. It was produced for the highway and off-road as a specialist dual sport from 1979-83. It's a single cylinder, 180cc, four-stroke, five-speed, chain driven, air cooled, and with a top speed of 60 mph that I mean to reach before noon on a smooth stretch of desert pavement.
I began, paused in the black saddle, looking over the handlebars at the expanse of desert east of Slab City. Six distinct terrains appeared before me: dirt tracks, rutted tracks, washes, black pavement, overland, and sand. I would develop the best riding style for each by testing the two forces the desert would decree on the bike: center of gravity and angular momentum.
This was a tall order, because the last time I rode was a decade ago. My neighbor had rescued it from the mitts of Slab City thieves who had loaded it onto a trailer and were about to pull away. The neighbor had kept the bike in storage at his camp until I was ready to tackle it. I had obtained a DMV one-day 'Permit to Move' that was good for the Sunday ride.
I began like a baby, hardly able to crawl. Rather than try to be a natural on it, I took it in steps, gradually advancing toward the more difficult and speedier.
I experimented with each of the terrains, and the effect of the two forces over them, to arrive at the best riding style. The terrains were:
• Dirt track – Undulating with some sand, but free of ruts and stones.
• Rutted dirt tracks – Trickier with old tire or water cuts.
• Washes – Dry streambeds, except during flashflood.
• Desert pavement – Smooth worn surfaces of interlocking rocks that has a glassy appearance.
• Overland – Open desert.
• Sand – Includes sandy spots, and deep sand like dunes.
Most people just get on and ride, but I prefer a scientific approach of identifying variables, quickly testing each, saving the best, and then ride relaxed for the rest of my longer life. The two primary factors in dirt bike riding are center of gravity and angular momentum. These in combination keep the bike upright over rough land. Center of gravity is self-explanatory, but angular momentum is not. Each wheel acts as a gyroscope to hold the bike in the same plane that it is spinning. The faster the wheels turn, the stronger the effect; if you go fast enough, theoretically, your wheels need not touch the ground to stay upright.
Knowing that the Honda functioned entirely in accordance with the laws of reason was a comfort, and I loosened up on the saddle. I didn't study books for this … The best techniques for each of the landscapes were:
• Dirt tracks - The bike may be brought up to its near maximum of 60 mph. The science that keeps it upright on 21" front knobby and 18" rear tires is astonishing. It 'drifts' above the ground surface touching it as little as possible and using solely the angular momentum of the wheels for balance. The bike cannot tip over since it is essentially floating through space on two vertical gyroscopes. I put a mental governor at 50 mph to honor my common sense of the voices of thousands of ghosts of survival.
• Rutted dirt tracks – The technique uses the ground surface for traction in an odd way. The tires are 'shrunk' like a sports ball for greater density by the bounces to provide greater angular momentum. It is palpable. I could do 40 mph on these roads, slowing for ruts not by breaking but by downshifting.
• Washes - These are an all-out blast using ground traction with twists and sudden waffle iron cracking from drying past sweeping Palo Verde branches. The wash races uphill in a wind for miles at 25 mph, until it narrows to a stenosis. It's like riding a pinball in a busy machine with many natural 'bumpers', and the usual speed is an interrupted 25 mph.
• Desert Pavement - The runway of black pavement of volcanic rock may stretch for a quarter-mile into the foothills. I took off like the road runner cartoon. The technique is to float along with little traction, relying on angular velocity to keep the bike stable. If you start to skid, give it a little gas, as angular acceleration increases the stability by the square of the increase of mph. I kept the sprints to 30 mph to not kick up rocks to preserve the beautiful smooth canvas.
• Overland – The stage is a march of changing terrain at the front tire. The recurrent surprises are bushes, rocks, trees, Ironwood stumps, sand traps, dips and rises, dust devils, cacti, and rattlesnakes. The faster you go, the more you have to be on your toes. I felt like a midget operating a sledgehammer, constantly being bullied around over rough ground, and tossed out of the seat like a raggedy Andy.
• Sand - I mastered last sand. The normal technique is to deflate the tires from 25 psi to about 10 psi to spread the surface area of the tire, until the tire is so flattened it is able to ride on the sand itself. However, deflating was not practical on alternating sand and hard patches, so in 10" or deeper sand on stretches of a quarter-mile or longer, I used a Frankenstein technique where I sat in the saddle at 5mph, and took looping 10' steps with either foot on the cycle sides.
I hadn't ridden in ten years, and there was only one spill per annum – always at slow speed in surprise sand traps, and the bike came tumbling after. A computer generated model of the bike and its rider on an uncontrolled turn shows only his helmet, and his conscious taking the shape inside the frame, hoping beyond hope. It got to be like leaving an animal scent: the bike left a little oil, and I a little blood. I just pulled out the toilet paper and duct tape to make compression bandages to stop the bleeding.
Once I tumbled into a red ant hill, and got stung about twenty times, which was more memorable than any of the falls. The fascinating sequence of pain is twenty minutes each of sting, as the venom streaks up the lymphatics, followed by ache, as it enters the muscles, concluding with a burning of the skin, and final relief. Each time the 260 lb. bike fell, it was a clean-and-jerk effort to upright it again, shaking the ants off before they clogged my air filter.
Once I developed a satisfactory ride for all six terrains, I slowed, and cruised. The six now had to be blended into each other to meet head-on the quick changing pattern of the desert. It was like orchestrating a band to suit the audience. I mentally rehearsed as I cruised blending one into the next, with all combinations, and solved the Sunday ride mentally before applying it physically. Now in my mind, like the parts of the Honda, there was a working mobile synergy.
With the short learning of two hours out of the way, now I could ride any surface and enjoy the sightseeing. Heading overland on the fringe of the Chocolate Mountain Gunnery Range, my eyes lifted to three helicopters approaching low from the south. I pulled instinctively before being spotted like a chased animal under an Ironwood. The fat copters looked like Mil-17's, pregnant with troops, as they swooped overhead so even the Ironwood branches rustled. They landed a scant half-mile away on a black pavement. The rascal in me took hold, and I shut the engine, and started walking up a draw to toward them. As I neared, the choppers rose lighter, it seemed, and took flight. When this happens, a dust cloud is thrown a quarter-mile out in all directions, and several stories into the sky.
In that cover, I walked another few minutes, guessing they had deployed about sixty US Marines for desert training. I would be a good object for them, but knowing a little of their bureaucracy, thought that they might mistake me for an official observer in a camouflage tank top, sunglasses, and black boots. Abruptly, I rounded a bend and spotted fifty yards away the first group of ten Marines in field dress, scrambling to their feet with weapons at ready. I raised my sunglass, waved nonchalantly, and did an about face. They didn't follow, but wouldn't have mattered because it was unclear if I was on the unsigned range or not; the US military makes mistakes, and so do I.
I rode the Honda thirty minutes away, and stumbled on a 30-foot military dumpster with 8-foot sides and a ladder leading to the top. I climbed, and peeked over like Kilroy. The floor was littered with dozens of unopened MRE (Made Ready to Eat) rations. MRE's are self-contained complete meals packaged for the US Armed Forces. I knew each contains an entrée, side dish, crackers and spread, drink, and desert. Just looking at them made me hungry. They are coveted by Slabbers, and I could have opened an MRE stand, selling packets for $3 while they lasted. I greedily teetered, but noticed there was no inside ladder leading out. I could have survived for about a month down there, and would have expired before the packages, that have no expiration date. Instead, I used a length of rope to lasso one Beef Stew, which took a dozen throws for five minutes, and decided that one was enough.
Besides, the sun was setting. It closes fast in the desert. My camp drew near on the Coachella Canal. I squinted, my face wrinkled up like a chipmunk under the baseball helmet. I arrived at sunset back at the Slab Camp, on a near empty two-gallon tank. At about 50 mpg, I had gone nearly 100 miles over rough terrain on this Sunday drive. Beef Stew is nearly as important as petro at the end of a Sunday ride.
I felt exhilarated. I felt I had achieved a rare distinction. I had driven a vehicle in a way that would terrify a New York cab driver, and felt safe. The dirt bike is the most versatile machine out there, except for the life form. You look at where you're going and where you are and it never makes sense, but on looking back at where I had been a pattern seemed to emerge. Slowly, by nuts and bolts, I had built a mental manual for open desert riding and life.
The lessons are: Never hesitate to ride past the last stop sign at the edge of town. Don't hesitate to practice on the roughest ground. Well-trained reflexes are better than luck. The more you look around, the more you see. You don't stop riding because you're getting old, but you get old when you stop riding.And, the real cycle you're working on is yourself. I filed everything away in the back of my mind, to use next week.
Not everyone has a cherry red motorcycle, but everybody has different theaters of life. The goal is to develop the best character in each, and then to meld them into one whole self. In this way, one Sunday ride can last your whole life.
Comments
James Lackey on November 1, 2017 10:03 am
I’ve been riding since I was 5 and racing since 11 years old. I have 45 years of experience. No, broke it down in 45 minutes. Fantastic. Lack.
Prez vs. Humorous Chair, from anonymous
TRUMP, YELLEN MEETING LASTED FROM 2:00 TO 2:30 - WH OFFICIAL: FOX NEWS
Odds on her staying? I believe she is not long for the Chair.
Elimination Game Alert, from anonymous
It's where we get the saying "All I need is a chip and a seat".
Jeff Watson writes:
Some degenerates have been known to say, "All she needed was another furlong and she would have won."
“Do You Really Want Me to Answer Honestly the Perfect Wife Says?” from Victor Niederhoffer
Comments
Andre on October 22, 2017 2:09 pm
Old media is breaking new media will be youtube stars enthusiastic about their niche. I see it in golf and software development.
Cognium, from Pitt T. Maner III
Memory enhancement is an area apparently in need of further research–the recent statement highlighted below by one in the field is surprising to read.
- "Working memory and distractions were the subjects of the second speaker, Fiona McNab, a Wellcome Trust Research Career Development Fellow at the University of York (UK). McNab explained that working memory is important for decision making, reasoning, language, and mathematical processing.
She said there was no scientific evidence to show current brain training games could improve working memory; while games might improve the performance of a specific task intrinsic to the game, they do not have a transfer effect to other tasks. Instead, McNab highlighted the use of functional magnetic resonance imaging and behavioural studies to explore working memory and distraction. She also referred to the Great Brain Experiment, an app that allows users to play games to test their memories and provide data for neuroscience research."
- There is certainly an interesting history to the idea of memory improvement though. Pelaminism was a popular subject in Victorian England.
It is interesting to consider what combinations of games and training would be most synergistic to improving memory. There are activities like climbing a tree or balance-related exercises that are thought to be helpful in this regard too. Link 2 suggests an IQ increase of 10-20 points over time–that's quite a claim. Further research needed though.
3. "The biggest lesson here was that — yes — intensive training strengthens cognition and the brain, but we still don't understand why and how," Courtney said. "We can't just jump onto a video game and expect that's going to cure all of our cognitive problems. We need more targeted interventions."
- Here's an example of the dual n back program and here is one of the free dual n back games online.
Hum Drum Observations of Consumer Trends, from Victor Niederhoffer
On my way with Aubrey on Grand street at 4:00 pm, I notice a line of 100 people waiting at the entrance of a store.
What were they selling—- pickles.
I believe they were the Pickle People store.
Right adjacent to a bagel store in China town with about 25 people waiting outside.
Also noted, I had Penguin ice cream and it was the second or third best banana ice cream I've had in 50 years.
Harvey Weinstein, from anonymous
The process and speed of Weinstein's demise is an excellent example of the "critical angle of repose." Weinstein's angle of repose was very steep–any number of his widely-known misdeeds could have triggered an avalanche–but his personality, relationships and business acumen resulted in a morphology that had a very steep angle.
One can find numerous analogies in markets and individual companies–John Gutfreund is one example that comes to mind. An astute investor might claim to be able to exit a position/relationship before the angle of repose is reached, but it is nearly impossible to discern luck from brains in this regard.
The Executioner’s Coat, from Bo Keely
The all-leather executioner's trench coat is a classic seen riding around Slab on the wide shoulders and bowed legs of a man who was gifted the coat by Sonny Barger of the Hells Angels.
From burnt-out detectives to comic book heroes, countless tough guys through the ages have worn trench coats to add mystery, intrigue, and gravity to their character and actions.
Famous people who have worn trench coats are Winston Churchill, Dwight Eisenhower, Adolf Hitler, Humphrey Bogart, Audrey Hepburn, Steve McQueen, Rock Hudson, Ali MacGraw, and the Blade Runner.
The Slab City executioner is in step with the Marlboro Man. He is college educated, a champion athletic, and swift to strike for justice.
The trench coat wasn't exactly invented for use during the war that gave it its name. The WWI officers were mired in muddy, bloody trenches across Europe. No other ranks were permitted to wear them. But there was a tragic consequence of officers' distinctive dress: it made them easier targets for snipers, especially as they led the charge over the top of the trench. By Christmas 1914, officers were dying at a higher rate than soldiers. Since the combat strategies of WWII were less trench focused than WWI, shorter multi-functional field jackets replaced them in the military. Thirdly, however, Hollywood stars showcased the trench coat in films across the US, and continue to be the cultural treasures of he-men and she-women on the silver screen.
The trench coat is also the style that west coast hobos wear called a 'California Overcoat'. For soldiers and hoboes to be able to move quickly, every trench coat has a vent, storm flaps, and maybe a dozen pockets. Everything one owns in life on the road is carried in it. I wore one through an autumn on the rails in lieu of a backpack or bindle, and found it kept me warm, dry, protected from scrapes, offered enough pockets to hold everything I needed to carry, and left my hands free to climb up and down ladders.
That's why I inspected the executioner in his shining jacket whenever he walked by in Slab City. But it is not why I began seeing his daughter.
A call went out … the executioner's coat had been stolen! That's like stepping on King Kong's toes. The owner told me it was priceless because of the Hells Angels history of being passed from executioner to executioner. A $1000 reward was offered. I made the rounds, and someone knew who had taken it. This was relayed to the owner, and he recovered it.
Now he owed me $50 that I had given an informant to get the coat. Business must have been off, because the executioner was broke. Weeks passed, until he sided me on a special Saturday night at the Music Range.
It was prom night, and he had a pretty blonde on his leather sleeve. On this special annual night under the stars, a photographer snaps Polaroids for all of the contestants running for King and Queen of the Slab Prom. When the date couldn't take the crooked elbow of her man because of the jacket, the photographer suggested he take it off and lay it down. He did remove the jacket, but draped it over the crook of his other elbow, for the flash.
Now, 'Here comes old Flat top, he come grovin' up slowly…' in his long black trench coat. He sided me, stage left, brushing my elbow. He reached deep down into one pocket … and withdrew nothing. Then the next pocket, and the next … taking out and holding open palms of air.
He pulled no money, but no weapon either!
Then he turned his face out of the amplifier shadow, and looked at me for the first time. I'll say it again, for the first time. His right eye was glass. It stared at me with a fixed pupil, neither dilating nor contracting. Then it winked!
I like to think that I turned the executioner's coat inside out that night, to make a friend.
Sure enough, one week later, he charged me with a Louisville slugger baseball bat on a slab over a bad pitch of misinformation. The bat stopped short of my nose for my last home run. The following week, he rushed up with a foot-long Rambo knife, and I carefully drew his attention to its sheath. He holstered it, and chuckled.
A black trench coat over a gold heart is the best of fashion that has given me a tranquility that no religion can bestow.
Comments
Anonymous on October 14, 2017 12:49 pm
Aren’t you people getting tired of Bo Keely’s reports from
Slab City. I mean really who cares about a bunch of deadbeats in
the desert, contributing nothing to society except drugs and crime.
I was interested for awhile, it had a lot of sociological insights into
human motivation and survival skills; but really at this point I could
care less about how the scum of our society make through the day
Andre on October 15, 2017 6:17 pm
I find the slab city posts a great juxtaposition to the rest of the blog. There are two sides to everything. I think they help keep one grounded.
Bill Wolfe on October 16, 2017 9:02 pm
Hey Boss,
Please give this shit a rest. I can’t claim “anonymous” but I think there are many members here feeling the same.
Andre on October 17, 2017 10:17 am
Maybe your mark ie anonymous will subscribe to wolfe wave for 3000.
A.P. on October 18, 2017 12:43 am
Don’t shut Bo down. If you don’t like his entries, don’t read them.
Shoeless Steve, from Bo Keely
I was called Shoeless Steve in some hobo jungles because I would walk in barefoot. There is no way anyone is going to rob, or even bum cigarettes off a man without shoes. In fact, it brings out the goodness that, although not innate in every man, lurks in every dark heart. I get offered wine. I have walked into a shoe store barefoot and gotten a discount.
So, the other day at Walmart when a shoeless man asked me for mine, I gave them to him. He whined that they were too small. I told him to put them on the opposite feet, which is also my habit. It feels good with the arch on the outside, gives greater space for the small toes to uncurl, widens the shoe with walking, and wears on the opposites for a longer life. You have to learn to think outside the shoe.
From Our SF Bay Area Correspondent, from David Lillienfeld
Here in Shangri-La, aka the SF Bay area, the air is full of the smell of oak. Burned oak. What you might smell if you're downwind of your neighbor burning oak logs in the fireplace to warm a house in winter (the few times one needs to do so in these environs) as I do. It can be a pleasant enough smell. Except in this instance, it's the smell of communities dying. Or at least undergoing significant body blows. The concentration of particulates in the air south of San Francisco is high—among the highest recorded in the SF Bay area. Ever. My wife tells me that trying to run in it is at best challenging. She gave up after a half mile. I don't run, but I can attest to the effects based on how sore my eyes have felt when I've been outside for more than an incidental period for the better part of the week.
This invasion of particulates has its origins in the North Bay, with those particulates noted (and impactful) 80-90 miles to the south in the South Bay. In the North Bay, the area is known as Wine Country. One of the tourist Meccas of California. Fire. Lots of fire. We have such fires on a regular basis across the state. When I lived in San Diego a few years back, we had such fires just northeast of the city. At their height, the fires were moving a football field every 5-10 minutes. We were about 7-8 miles from them—you could smell the burning wood but no vision of the fire. That didn't mean there wasn't concern. Sometime one afternoon, the local authorities concluded that with the breezes would push the flames across I-15, where a last ditch effort was being mounted to staunch the spread of the burn. Evacuations were ordered.
It's one thing to see an evacuation like that in New Orleans in the wake of Katrina. It's another to be part of one. In this case, 750,000 plus persons evacuated. Going up I-5 near Camp Pendleton. Something I can't recommend as one of those life experiences to be savored.
In the North Bay, there are a variety of fires with lots of evacuations. Some are for communities likely familiar to enophiles—particularly those of Napa and Sonoma wines. For instance, Calistoga, a quiet community of 5K or so persons. There are wineries all around it, some award-winning, most not. Lots of vineyards. Only 15 or so wineries are known to have burned to the ground, but it seems likely there are others still to be found. An energetic effort is being mounted to staunch the flames from jumping across State Route 29. With 40 mph winds expected tonight, I have my doubts about the chances of success.
A friend of mine lives (or at least lived) in Santa Rosa. She's at least 10 miles from any forested area. According to the last appraisal (about 3 years ago), she had an art collection worth $8-9 million. Past tense. One of her neighbors snuck back into the neighborhood before being noticed by the MPs and escorted out and told my friend that her house no longer exists. Her husband's prized XKE that he was restoring was still in what had been the garage, its tires melted into the concrete floor, the green body now covered with acidic ash. He doesn't know how disfiguring the ash might be, but he's hopeful that there's something left to work with. My friend is prepared to find otherwise. They left the house with about 5 minutes before the fire hit—and they weren't cavalier. But it's hard to know to evacuate to avoid a fire moving 3 football fields every 5 minutes. Or least thought to be moving that fast.
The areas of the fires are still off-limits because of concerns of re-burning or simmering embers. We'll see soon enough, I'm sure. As the number of wineries impacted goes up, so do the lost jobs. I guess the rebuilding will generate jobs too, just not those that the employment-displaced have the requisite training. Then there are the hotels and restaurants and the rest of the now no-longer functioning tourist industry. Gone. At least for a little while. Long enough that many of those in those communities living from paycheck to paycheck are already assessing where to move to be able to provide for their families.
Once the fires have been extinguished, the assessments of the damage will begin. Expect those estimates to rapidly climb. An estimated 5+ percent of the housing stock in Santa Rosa is now gone. Scenes of those neighborhoods look like pictures of Berlin after WW2 (or Hiroshima after the appearance of Little Boy). If the winds fulfill their feared effects, other parts of Santa Rosa will also cease to exist. The current estimate is that there's at least $1.5 billion of damage just in Santa Rosa, but an insurance adjuster who lives in the area opined on the radio this morning that that amount is "way low." How low? He paused and said that while it wasn't Harvey, it would be "significant just in Santa Rosa." He refused to speculate on other areas. Lest you think that the damage is limited to Calistoga, Santa Rosa, or Sonoma, consider: the eastern side of Napa (the city) has been progressively evacuated. There's still many residences between the fire and downtown, but the country fire chief said at a press conference this afternoon that if the 60 mph winds predicted for tonight, downtown Napa will be at risk. He's not sure how to stop the fire from moving west after that. There's too much wood housing stock available to burn on the west side of the city.
How will this end? Possibly over the weekend. Possibly not. While the winds are forecast to return tonight, the temperature is expected to warm into the upper 80s/lower 90s on Sunday/Monday. Perfect burning weather. Perfect for re-ignition. Maybe the firefighters will get at least enough of a respite to catch some sleep before again take on an earthly form of hell. So even if you hear that the fires have been controlled and the worst of it has now passed, don't be surprised if those statements turn out to be off the mark.
Shangri-La indeed.
Jim Sogi writes:
My theory is the smoke and ash will block the sun, cooling the air down, and seeding the clouds resulting in more snow, and cooler temperatures this year. While its good for skiing, I wonder if it will affect agriculture and commodities in Western US?
Anecdotally, there have been early snow storms across the West this year. One ski area in Colorado is opening today.
I Recently Got Conned Also, from Victor Niederhoffer
I recently got conned also about my books which I love and are part of my soul. Out of clear blue sky like Mr. Grain's mom, I get a call from a letter dealer. He's been refraining from contacting me the past 25 years because he's such an ethical guy and didn't wish to compete with the other dealers he sells letters to and then I buy them.
He comes to my house. And he sees lots of rare books. Well he can recommend a great book dealer who can give me a great deal, a special deal. But because there is some mold on some books, and they can't tell the condition until they see them, I am recommended to ship all my books to the dealer.
"Okay, I say, but don't send any books worth 2,500 or less. I go to the book dealer and I'm thinking about my trades and Aubrey is there. They offer me 350,000 for 200 books and I say I'll reflect. They raise the offer to 400. I wasn't thinking and because the books are part of my heritage, I didn't look at the list of books they took. I like to do a deal, and since they're recommended by my letter dealer as special and I've done much business with the book seller before, I say yes.
Then I realize that I sold 200 books with min of 2,500 and max of 20,000 for about 1200 a book. I immediately write back that I'll pay them a 100 break up fee if they cancel the transaction. "You see, they can't do that because the books are already in play. The letter dealer then tells me that "how did you expect me to be compensated. Of course I was partners with the book seller".
Every day, I make a mistake like that in the market. But it doesn't hurt as much because the books were part of me as my parents had more books from the book sellers dump than I had and I loved the books. I still think about it every night, and haven't gone into my library in the 3 weeks since the con.
Aside from Mr. Grain's mol, I am the easiest to con in the world.
Another con is to involve the victim in some wrongful behavior so that he doesn't wish to bring in the police. Frank Perdaux was great at that in the railroad con where the confederate whispers to the mark that he can see the hole card and therefore they are sure to win. The confederate also shows empathy with the mark by joining him in fleecing the southern rube who is so brash and naïve and saw the women in scanty clothes.
One of the most reprehensible things to me in the recent con played on me is that the con man read my book and knew I loved and admired my dad. The con man sent me a video of his father who supposedly was a colleague of my dad, to show me how he respected his father just as much. To add icing on the cake, he told me how his son was a great basketball coach and had the integrity of Cato refusing to bow to the rough and tumble unethical behavior of the other coaches. It was a very nice touch but it still rankles.
Bo Keely writes:
I enjoyed your post on being conned. You have read as many books as I about getting conned, but the most important point they omit is that a smart person is conned when he is rushed or tired. I have tried to solve this in my daily transactions that are susceptible to cons at Slab City by mentally causing myself to pause before saying, or signing something. When money is flashing, I reinforce the pause by stepping back. I only make mistakes when I'm compromised, and imagine you are about the same. Regards to your rare letter man.
Comments
Walton on October 12, 2017 10:19 am
A la Livermore, you could offer the con a payment greater than his expected compensation.
A life lesson is that that which holds sentimental value is not for sale in nominal terms.
High T, from Pitt T. Maner III
A call for preventative measures–less Lamotta, more De Niro?
"Raging Bull: First study to find link between testosterone and stock market instability":
"Based on our findings, professional traders, investment advisories, and hedge funds should limit the risk taken by young male traders," continued Nadler. "This is the first study to have shown that testosterone changes the way the brain calculates value and returns in the stock market and therefore- testosterone's neurologic influence will cause traders to make suboptimal decisions unless systems prevent them from occurring."
anonymous writes:
That paper fits in well with the overall plan to feminize males in the West. I'm sure this latest generation won't have to worry much about high T levels between the estrogenic impact of leftist culture, environmental toxins, and hormone treatments in youth.
Very Important Birthday, from Jeff Watson
Ayn Rand's "Atlas Shrugged" turns 60 years old today.
I was around 12 years old when I first read it and can say that the book opened my eyes and changed my life.
I still look at people in the news and try to assign characters from the book to them.
One does not have to look very far to find a James Taggart or Wesley Mouch.
Finding a Hank Reardon or Dagny Taggart is a little tougher these days.
"Stossel: Ayn Rand–The Author People Love to Hate"
Comments
Andre on October 11, 2017 8:29 am
I used to think elon musk was a hank reardon, but he’s definitely out of touch and I’m wondering when this thing is going to turn out to be an enron.
Andre on October 14, 2017 10:28 pm
I doubt Hank Reardon would be drinking whiskey and answering reddit AMAs with everyone. This man is off his rocker.
Scam Hits My Family, from anonymous
Publisher's Clearing House directs it's advertising towards the elderly. The advertising format of Publisher's Clearing House (PCH) attracts con men who piggyback on their message and try to extract as much cash as they can from the elderly and unsuspecting by declaring them winners of the big prize.
This hit close to home this week. A few weeks ago, my mother in law called my wife to tell her that Publisher's called to inform her that she won the grand prize of 70 million dollars and a new Mercedes. My wife, ever the skeptic, told her mother that she didn't believe the whole thing, and please don't send any money. Mother in law assured my wife that she didn't send any money.
She mentioned a lawyer/representative of PCH she spoke to who was named Dave Sayer (an actual prize patrol spokesman of PCH). My wife googled this name and got a zillion hits of this Dave Sayer/PCH scam and how to know it's a con. My wife called back and told her mother it was a scam but my MIL didn't believe her. My wife then reported it to the state Attorney General's office, and had one of the officers call my MIL to inform her that this was a total con.
After speaking to my MIL, the officer then called my wife back and said that my MIL had indeed sent cash to this guy via Western Union. She sent $6,000 cash, at least that's what she admitted. The officer thinks it was probably much more as most victims won't ever admit the true damages. My wife confronted her mother to tell her to not send any more money. My MIL said that her money is her business, and to butt out. The problem is that she believes the guy and expects to have a brand new Mercedes delivered this afternoon (Oct 10) and her check for $70 million by the end of the week. Of course it won't show and she can kiss her 6K goodbye. She won't get her 70 million either.
Incidentally, the 6 grand was the tax and delivery charges for the Mercedes. Here's the deal, my MIL is in her early 80s and is quite aware of things. Her mental facilities are not diminished and she's quite bright. Her problem is that she does not believe that people would call on the phone and misrepresent themselves. She thinks she's streetwise enough to recognize a con. The MIL believes in the goodness of human nature and is also a old South Christian woman. She is quite naive and she's also $6K poorer.
My MIL does not think she has been the victim of a con at all, quite the opposite, she is ready to drive her new Mercedes and is ready to sell the Toyota I bought her last year. One thing she does have that all con victims share is an out sized sense of greed, of getting something for nothing. She was never a customer of Publisher's Clearing House. Needless to say, we are very heartbroken and also upset that despite being shown the truth, she is waiting at home for her new car and $70 million. Somehow, I feel that this is going to come out of my pocket.
anonymous writes:
Anecdotally, I've noticed that the elderly seem very susceptible to being catfished also by Nigerians and others, even if they don't otherwise appear gullible. I guess hope and loneliness are very powerful emotions to be exploited.
Sorry to hear about the MIL and the fact you'll probably being paying for it.
anonymous writes:
Everyone should be aware of this Phishing scam. It almost snagged me and I'm not "elderly" (in actuarial terms at least).
I received a text on my cell phone that says: Alert from CHASE Bank : Your Debit-Card is temporary Locked. Please call us now at 201-754-1565. Thank you for your time
There are two clues that this is bogus. (1) The word temporary is a typo. They meant temporarily. (2) The call back number is in New Jersey. If the text had no typo and an 800 number and perhaps the last 4 digits of my debit card, then I would have called them and been phished. Instead I blocked caller ID and called the number and heard a legitimate sounding Chase autoanswer voice, which detected my caller ID blocking and hung up on me.
I've heard of scams like this during which they record you saying the word "Yes" and then use your recorded voice to purchase goods/services/transfer money. Or it could just have been an attempt at identity theft. Regardless, I forwarded the text to Abuse@Chase.Com and Chase shut down the scammer….for now at least.
It's a jungle out there. Robo callers/texting/emailing makes the marginal cost of solicitation close to zero.
Comments
bob on October 18, 2017 12:18 pm
Similar scam is to be contacted and the caller (or email/text) says it is the fraud prevention dept of any of your cards and to contact them about suspicious activity to verify if it was you or not.
the first thing they ask is for you to verify your account with all the details of your card and other identifying information. This once happened to me so I told the caller there was no way I would give him that info but I could call the number on back of card then I was the one initiating to a legit number. He immediately said okay I understand didn’t try to argue.
Indeed it was a real request from chase. Since I called a known legitimate number I proceeded and they cancelled any bogus charges before posted.
cf. Stanley Milgram’s obedience to authority experiments.
Ps From Snopes on the ‘can you hear me to entice a yes scam’ it appears apocryphal:
snippet:
‘The “Can you hear me?” scam for now seems to be more a suggestion of a hypothetical crime scheme than a real one that is actually robbing victims of money. In messages we left with the BBC, the FTC, and the Consumer Federation of America, we asked a question absent from all the news reports we’ve encountered about this scam: “Are there any documented cases of people being victimized in this manner?” We have not yet received any affirmative response to those queries.’
Insurance Exposure to California Fires, from Steve Ellison
Recalling that the panic of 1907 was caused by insurance losses after the San Francisco earthquake, today I see an estimate that more than 11,000 homes in Santa Rosa and Napa with a value of more than $5 billion are at risk of fire damage.
Indeed whole sections of the city in Santa Rosa are burned to the ground (my nephew has been displaced as he was staying at a friend's house, and the house burned down).
Halloween: Trick or Treating Officers, from Bo Keely
I was confronted on a public road outside Slab City by two men in a battered green truck with an old emblem on the side that was so scratched and dusty that it was obscured. The men's uniforms were so wrinkled that their names could not be read, until one at my demand smoothed it out to be legible.
The men harassed me for 30 minutes, or tried to.
They said they stopped me for not having a front license plate, and because I was on a private irrigation road. It was a properly plated Arizona car, and the road is public. They were also concerned that I was driving in underwear. They had zero knowledge of the area, laws, and admitted it was their first time to patrol here.
I would not let them search my vehicle.
One went for his gun, and I asked him to identify his home office.
They provided a Fish and Game office in Los Angeles that I've contacted, and been told they don't have officers by that name, nor that they cover this Imperial County.
There was an unoccupied old tow truck parked a mile off as I drove away.
I've written various authorities telling them of the unprofessional conduct and possibly masquerading officers. The thought is that they are 'trick or treating' in trying to search and steal from my car, and to be in cahoots with a tow truck to 'impound' new model cars to their own disposal.
There currently also are two men in old auctioned sheriff's cars with uniforms and badges who are canvassing the area who have been identified as bogus.
You should ask for identification in this season before trick or treating.
For Those Whose Trades Drive Them to Drink, from anonymous
"A supplement that may block the toxic effects of alcohol"
My friends in the nutritional supplement community tell me that you can enhance the metabolism of blood alcohol to acetate, carbon dioxide, and water and minimize the acetaldehyde molecular logjam by taking oral supplements. L-cysteine, vitamin C, and vitamin B1, which are purported to help.
At supplement doses, they are cheap and harmless at worst. At best: Goodbye, acetaldehyde toxicity; hello, restful sleep. About 200 mg of L-cysteine per ounce of alcohol consumed is sufficient to block a major portion of the toxic effect of acetaldehyde. But because alcohol is absorbed and metabolized rapidly, it may be necessary to take L-cysteine before and concurrently with consumption to maintain protection.
Also, an excess of vitamin C (perhaps 600 mg) can help keep the L-cysteine in its reduced state and "on the job" against acetaldehyde. Experts recommend these doses (with or without extra B1): one round before drinking, one with each additional drink, and one when finished. Some say that this regimen works very well.
Comments
Andre on October 11, 2017 8:31 am
Or you can read Stop Drinking Now by Allen Carr. Why drink addictive poison to begin with? It’s ruined my mom’s life and it was or is ruining mine.
They Vet You, from Victor Niederhoffer
They vet you in Stockholm to see if you're a fellow traveler before giving you the Nobel, and I guess this imposter passed the test.
Pitt T. Maner III writes:
The lack of overreaction must be very puzzling.
Of possible interest–NNT has been very critical via tweets and made note in retweet feed of Swedish/Dr. Nudge affinity for a "cashless society". Perhaps risks/dangers of… With that it must be time for a Fika.
Superb Interactive Asset Allocation Tool/Visualizer, from Rocky Humbert
I stumbled upon this tool on the RA website. It's by far the best one I've seen (for free). It allows you to see historical risk/reward for different asset classes over different time periods, efficient horizons, expected future returns, various blends, mixes, blah blah blah. It really is superb.
Columbo, from Victor Niederhoffer
The Columbo series showed a different kind of detective mystery.
Instead of starting out with uncertainty and finding the perp, it starts out with a carefully documented murder, and then the plot is "how to catch him" rather than "who did it".
For a linear difference equation there are only 9 shapes that the dynamic solution can take. Depending on the y(t) = b(y(t-1) + a how are these two paths to the solution related.
Right before I go to sleep I like to play with a good difference equation preferably second order. It's often a fibonacci.
Comments
Stan Rowen on October 15, 2017 8:25 pm
One of the delightful things about the Columbo series is how a shabby, seemingly foolish detective always ends up outsmarting the sophisticated, clever, overconfident, condescending criminal. We know before they do, that they cannot avoid the inevitability of the case being solved by Columbo. We enjoy that the shattering of their hubris and their downfall have been caused by an overly humble character who they had, until the end, considered grossly inferior to themselves.
Interesting Paper, from Victor Niederhoffer
Interesting paper (Capital Structure Dynamics and Stock Returns, 2006) on debt ratio as a predictor of stock returns relating to companies issuing equity reducing debt ratio when stocks too high and against signaling theory that companies issue debt when they are sure they can pay the interest back. Calls for an update.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=685462
Comments
james on October 10, 2017 7:42 pm
The link to the paper is broken. Looks interesting–could this be updated.
A Queen of Sorts, from Andrew Moe
Fans of confidence games will thoroughly enjoy the ESPN 30 for 30 podcast called "[A Queen of Sorts](http://www.espn.com/chalk/story/_/id/20095352/gambling-queen-sorts-30-30-podcast)" detailing the elaborate con pulled off by "Kelly" Sun and her whale, poker star Phil Ivey, to fleece multiple casinos worldwide out of tens of millions of dollars. The play is revealed in elaborate detail by a panel of experts who have reviewed the surveillance tapes to peel back the layers behind their method– edge sorting. All elements of the classic con are represented. First they must grease the wheels. Taking advantage of casino's bias that Asian women are "stupid and superstitious", they banter with purpose, seasoning each new dealer. Next come the small requests that they need granted in order and to a T. Little by little, they sort the deck without ever touching the cards. By the time the play is set, they have a 6% edge on each hand of baccarat - at $150,000 per hand. Huge winnings ensue. But they encounter a new problem - how do you get out the door with $10 million of a casino's money? I made the wife and kids listen during dinner one night and while they protested like a pack of wild wolves in the beginning, by the end of the meal they had every deck of cards in the house out searching for irregularities. Tremendous. Enjoy. ### Jeff Watson writes: I followed this closely. Ivey did not cheat and was brilliant, that's all. It wasn't a con, just good gambling and he beat the house fair and square. Casinos always welcome you to come try out your "system." This is an example of what will happen when your system works well. The casino will cry foul and welsh. --- ## [Indecent Summer @ Slab, from Bo Keely](posts/2017/2017-10-07--indecent-summer-slab-from-bo-keely--wp-11895.md)
The past summer @ Slab was the first 'indecent' period in anyone's recollection. Nobody could figure out why, so I did. The two strongest personalities in the area 1 year ago died of meth heart attacks. They were good, decent guys. One was the drug lord who I did medical & legal for. The other was the primary Slab strong arm and part-time arsonist. Each represented what the Godfather wanted to be. 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.