Friday, June 16, 2017
Thursday, June 15, 2017
Noah Smith - summing up my thoughts on macro. He seems more hopeful than most. Also,
Noah Smith - is economics a science? Short answer: no. Understanding the long answer would require you to have studied philosophy and structure of science and to have seen some advanced undergrad econ, but basically the long version of the short version of the long answer is again no, at least when it comes to macro.
Basically, macroeconomics never works out of sample, and there is no such thing as a falsifying empirical result that causes you to throw out your theory. They compensate for that fucking joke by saying "oh, well every macro theory is wrong, we know this", which begs the question of why academic macroeconomists always arrogantly asserts that their patent fucking nonsense should inform policy.
From what I've seen, though, economics seems to behave well as a science (a) when it's as far away as possible from politics (like, calculating where your company should hedge prices, or figuring out the demand curve for soybean meal) and (b) when real money is at stake, like doing corporate micro or central bank policy.
But once you put the economist near a politician, he turns into a fucktard.
Some reading stuff:
Calculated Risk - rail traffic increased in May and LA port traffic increased in May. Quit piddling yourself.
FT Alphaville - tech tantrum shows how the market has changed. Everything's algorithmic now, and the computers tend to all puke stocks at the same point, which explains the nutbar volume bars we're seeing in QQQ. It's as if they want to lose money. Well, maybe it's just that the kids programming these algos are dumb brats who just finished a Master's in quant at university, and they don't actually have a clue about anything.
NY Times - the Conservative plan to cause the next market crash. Every single thing the party is doing is explicitly intended to destroy the USA.
Simon Wren-Lewis - Conservative zugzwang. With the election result, the UK conservatives are now backed into a corner and can't win no matter what they do. Good job!
Wednesday, June 14, 2017
Calculated Risk - 25bp rate hike. The only one voting against was Neel Kashkari, who if you remember I was very nasty about a few years ago but who turns out to be the only one on the Fed board who has sufficient common sense.
Gold miners get hammered on a 0.25% rate hike, but what's really weird is people selling SPY down on Yellen's statements.
It's as if it's a dudebro fad or something. Like getting a barbed wire tattoo.
So today, everyone thinks Janet Yellen is going to raise rates another quarter point, despite inflation being nonexistent in the US.
Of course, she has to make her decision based on future expectations a year out, not based on what's happening today.
But all previous one-year-out future expectations that have come from the Fed have proven to be a joke, and maybe at some point the Fed hawks will realize this.
Then again, Trump is supposed to pursue inflationary policy.
But then again, it's not like the Republican House, Senate and WH have demonstrated any ability to accomplish a single fucking thing so far, and who says Trump is even going to be around 6 months from now?
So there's no way to pick a direction.
I would have bought gold miners yesterday at an RSI of 50 and at SMA(200) support, except then I caught myself hoping that the trade would come out positive. If your trade involves hoping for a positive result, you should get the fuck out of that trade.
So I'd like to see what happens today before taking much of a position.