Friday, January 26, 2018

Friday videos: another one bites the dust

Mark E. Smith died this week, age 60.

Here's the Fall from about the pinnacle of their career, basically:

But he still got a one-hour documentary done on him:

Thursday, January 25, 2018

Why gold went down

Trump killed gold!:

Reuters - Trump talks up US dollar at Davros. Quote:
“The dollar is going to get stronger and stronger and ultimately I want to see a strong dollar,” Trump said in an interview with CNBC, adding that Mnuchin’s comments had been misinterpreted.
Well ffs it's not like any idiot would trade based on the crap coming out of this clown's mouth-
Following the president’s comments, the dollar pared losses against major currencies.
I stand corrected. People really do think this fucktard is smarter than them, and many of these people work on Wall Street.

Tuesday, January 23, 2018

And John Quiggin comes along to put the boots in....

John Quiggin - the quicker Bitcoin reaches its true value the better. You won't click on it, so I'll just give you this:
In the time since bitcoin was launched in 2009, it has become evident that design flaws make it useless as a medium of exchange. A design feature called the block size limit means that bitcoin can only handle around seven transactions per second. Under current rules, those who want their transactions handled rapidly (mostly speculative traders) must pay a premium to have this happen.

As a result, anyone wanting to use bitcoin for buying and selling faces lengthy delays and, currently, a cost of around US$20 per transaction. Obviously, no one will pay such a charge for day-to-day transactions. The handful of merchants who announced a willingness to accept bitcoin in the early days have since dropped it. Even a bitcoin conference was recently forced to announce that it would not accept bitcoin for registration fees.

For a while, bitcoin was favoured by users who wanted to transact anonymously, sometimes for legitimate reasons and sometimes illegally. But while bitcoin transactions are anonymous in the short run, they are anything but untraceable. The whole point of the bitcoin blockchain is that it is a complete ledger of all transactions. So, if someone else gains access to your bitcoins (for example, if a law enforcement agency compels you to hand over the keys), they have access to your entire transaction history.

Various means have been proposed for making cryptocurrencies untraceable. But all of them run up against the fact that the blockchain operates on the basis of contributions from a set of servers. If someone can get control of a majority of the servers, he or she controls the blockchain. Because the great majority of these servers are in China, the Chinese government is in a position to do this at any time it chooses. In fact, because mining is organised into relatively small “pools,” it would be sufficient to take control of four of them, something that could be done overnight.

Similarly, although various suggestions have been made for improving efficiency, there’s little to suggest that a decentralised blockchain can outperform a central intermediary like a bank or credit card company.

Even if blockchain technology turns out to be the basis of a new digital currency, it’s clear that bitcoin will not be that currency. What about the thousand or so other cryptocurrencies out there? The ease with which cryptocurrencies have proliferated supplies the answer.

Suppose that some government and its central bank decided to replace their existing currency with a digital system based on a blockchain. Adopting one of the existing currencies would involve a massive transfer of wealth to the owners of that currency. The obvious choice would be to start a new one and capture the value of issuing it (known as seigniorage).
And so on.

Bitcoin Schadenfreude

the Sun - panicky Bitcoin investors struggle to withdraw cash. Ha ha!:

THERE are mounting fears that Bitcoin investors will struggle to get their cash out after the cryptocurrency's value fell 40 per cent in a single month.

Many are looking to put their money in gold instead, with some European gold traders reporting a "five fold increase" in demand amid fears Bitcoin could collapse entirely.

And before you say "oh, it's just the Sun", remember this is the kind of newspaper that potential new Bitcoin investors would be reading.

Stick a fork in it, Crispin!

Anchored expectations and wage stagnation?

It's a tremendously common-sensical explanation for wage stagnation in the face of massive economic growth, which explains why economists are only fucking stumbling onto the idea right now:

Jaren Bernstein - anchored expectations and wage stagnation. Quote:
Sen’s argument is that even employers who need new workers are avoiding raising their wage offers because they don’t want to have to raise the pay of their incumbent workforce.

When an employer in the Boston district was asked why the company didn’t raise wages as a way of attracting more workers, it responded that if it had done so, it would have had to pay all the existing workers more, which would be uneconomic. And another contact in the Boston district said that when a worker departs, the replacement typically ends up earning 10 percent more than the departing worker made.

This implies that incumbents could do much better if they left their jobs paying well below what they could get elsewhere given current conditions. That would show up as more labor-market churn, which has, in fact, been down in recent years (the economist Betsey Stevenson has long emphasized this development).

If so, then perhaps incumbent workers are just too used to a labor market market characterized by stagnating pay so they don’t bother looking for a better job elsewhere, under the assumption that, pay-wise, their next job would be no better than their current one. It’s “well-anchored expectations,” applied to a job market long characterized by wage stagnation. And just like with the Fed’s inflation problem–undershooting their inflation target for years on end–it takes a long time for expectations to change.
And, of course, the elephant in the room that no economist dare mention:
US employers have just thoroughly forgotten how to raise pay, and they don’t have too much by way of unions to remind them.

Monday, January 22, 2018

Wow, Branko Milanovic is getting to be quite the bolshie

I'm proud....

Branko Milanovic - dutiful dirges of Davos. OK, he just spoiled it with the alliterative title:

Thousands of people will gather next week in Davos. Their combined wealth will reach several hundred billion dollars, perhaps even close to a trillion. Never in world history will be the amount of wealth per square foot so high. And this year, for the sixth or seventh consecutive time, what would be one of the principal topics addressed by these captains of industry, billionaires, employers of thousands of people across the four corners of the globe: inequality…

Only in passing, and probably on the margins of the official program, will they get into the tremendous monopoly and monopsony power of their companies, ability to play one jurisdiction against another in order to avoid taxes, how to ban organized labor in their companies, how to use government ambulance services to carry workers who have fainted from extra heat (to save expense of air conditioning), how to make their workforce complement its wage through private charity donations, or perhaps how to pay the average tax rate between 0 and 12% (Trump to Romney). If they are from the emerging market economies they can also exchange experiences on how to delay payments of wages for several months while investing these funds at high interests rates, how to save on labor protection standards, or how to buy privatized companies for a song and then set up shell companies in the Caribbean or Channel Islands.

Still poverty and inequality which are, as we know, the defining issues of our time will be permanently on their minds.

It is just that somehow they never succeeded to find enough money, or time, or perhaps willing lobbyists to help with the policies they will all agree, during the official sessions, should be done: to increase taxes on the top 1% and on large inheritances, to provide decent wages or not to impound salaries, to reduce gaps between CEO and average pay, to spend more money on public education, to make access to financial assets more attractive to the middle and working class, to equalize taxes on capital and labor, to reduce corruption in government contracts and privatizations.

Since they have been singularly unsuccessful in convincing governments to do anything about rising inequality--will they lament-- it is not surprising that nothing has been done. Or rather that the very opposite policies have been conducted: Trump has, as he promised or threatened, passed a historic tax cut for the wealthy while Macron has discovered the attraction of latter-day Thatcherism. Nothing positive of note seems to have been done in the emerging market economies either (with perhaps the crackdown on corruption in China the only important exception).

This return to the industrial relations and tax policies of the early 19th century is bizarrely spearheaded by people who speak the language of equality, respect, participation, and transparency. None of them is in favor of “Master and Servant Act” or forced labor. It just so happened that the language of equality has been harnessed in the pursuit of structurally most inegalitarian policies over the past fifty years, or more.

All very true, but then again it's not like we can end it with a well-placed armed terrorist attack on Davos or anything.