Chaos Patch (#99)
(Open thread + links)
Call it the Deep Right? Tick war. Salami tactics. Mises and fascism. Ethnomasochism. Questions of organization. Economic links. Reflections on the Alt-Right (1, 2, 3, 4, 5). Something new. The weekly round.
The Hell that is Pakistan. Trapped by the Saudis. The chaos to come. America’s opportunity. China troubles (1, 2, 3), and related. Commercialization of hard security. The demographic dimension. Skyscraper index in space and time. Tax crisis? “Democracy …”
Shale 2.0. “A new mall hasn’t been built in the US since 2006.” Against ‘welfare for all’. A dead cowboy. The F-35 catastrophe. Radical tech-deflation. Shadow power. Hyperthyroidism in American politics.
Trumpenführer panic report — confusion and mad, terrified shrieking (1, 2, 3, 4 (see)). Riding the pendulum. Conservative breakdown (1, 2, 3, 4, 5, 6). Acceptance (1, 2, 3, 4, 5, 6, 7, 8, 9). “On 4chan’s My Little Pony board … support for Trump is unanimous …” (and other lunacy). Fox left in the lurch (1, 2, 3).
Cologne after-shocks (1, 2, 3, 4. 5, 6) and other related outrages. Assimilation failed. Honesty about Islam and homosexuality. Islamization of America.
The Duck versus Twitter (1, 2, 3, 4), also notable. Facebook and moral universalism. Dawkins disinvitation. The SJW mind. Blacklist.
Coates on the take, in context. Whitening of the Left (UK version). The Ferguson effect.
Human achievement database online (see also). Brightened by diversity. Thompson on Hive Mind. Intelligence and longevity. Where civilization breaks down. American Eugenics 1.0. Ridley on The Selfish Gene. A sermon on scientism. Science is annoying.
Apocalypse Corner. Preparation time. It’s on. Anglo–American angles. The world economy is toast. America Alone (10 years on), and The Clash of Civilizations (20 years on).
Go is gone (1, 2, 3). Yudkowsky sounds the alarm. Some skepticism from the AI Guild, and from Go types. AI is our friend. Clarifications. Memristors hit the mainstream media. Retail automation. Notes on the blocksize limit (also 1, 2). DIY neurotronics. Distributed ‘democracy‘.
Climate obstreperousness from Spencer and Briggs.
Elusive space. Fungi in space. Water on Pluto.
Personal productivity heuristics. Tim Powers speaks.
[…] Chaos Patch (#99) […]
Posted on January 31st, 2016 at 9:01 am | QuoteCapitalism will eat democracy — unless we speak up
Good. that’s why NRx should embrace technology and capitalism
Why Robots Mean Interest Rates Could Go Even Lower In The Future
also good news
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Posted on January 31st, 2016 at 2:26 pm | QuoteWould you consider adding the archive.is javascript to allow me to reference specific points in your article when I quote you ?
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Posted on January 31st, 2016 at 2:52 pm | QuoteRegarding the “organization” link:
While all of the above would be useful in creating valuable information for sale and also in creating contacts with Deep State-types, the next step is to ask how to truly capture the value of the information created by the Truth Agency. Rather than sell it to others, why not act on it and make much more in profit?
The obvious way to do this is through the financial markets … or the Bain Capital way
Having thought about similar plans, the largest problem is an utter lack of any empirical evidence that NRx produces what financial markets would term “valuable information.”
The maxim of investing for alpha is that 1) you must have different expectations than the market and 2) the market must converge to your expectations over your investing horizon.
Most NRx types steadfastly refuse to understand the current expectations because they are considered what would best be termed as “Cathedral inspired myth.”
How many Austrian economists have “good” track records on prediction (serious question). I know of exactly zero. Even guys like Peter Schiff who have their fortunes, also have awful prediction records and it isn’t absurd to say they have their fortunes in spite of their economic theory. If someone like Bob Murphy is light years ahead of orthodox economists, why aren’t he or those who follow his analysis able to profit?
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Hurlock Reply:
January 31st, 2016 at 3:56 pm
Have you heard of Mark Spitznagel?
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grey enlightenment Reply:
January 31st, 2016 at 4:01 pm
one success out of many losers who used an option trading method that no longer works
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Hurlock Reply:
January 31st, 2016 at 4:07 pm
Who are the losers?
And wasn’t the question about predictions? Spitznagel has a very good track record of predictions.
grey enlightenment Reply:
January 31st, 2016 at 4:12 pm
due to the mathematics of derivative pricing, most predictions are losers for the people who trade them. Making a correct prediction doesn’t mean you will make money.
The losers are people who took Schiff and others advice to buy gold, sell stocks, etc. I imagine there are many of them given his large exposure.
Different T Reply:
January 31st, 2016 at 4:31 pm
who used an option trading method that no longer works
Is this referencing Spitznagel? From his wiki, his fund’s strategy simplistically seems to be making small, highly asymmetrical bets on mispriced risks (by definition, otherwise the bets would have higher cost). What are you referring to with this “method that no longer works”?
frank Reply:
January 31st, 2016 at 8:03 pm
Isn’t Michael Burry from the Big Short an austrian? Btw, there’s a hilarious article by Noah Smith on why he’s wrong this time. A sample:
Why does Burry buy into discredited theories of the crisis and embrace dubious criticisms of the Fed? It isn’t clear, but the reason might be an anti-government, libertarian ideology. Burry says:
“Government policies and regulations in the postcrisis era have aided the hollowing-out of middle America far more than anything the private sector has done…Capitalism is on trial.”
In fact, this idea pervades Burry’s arguments — government is always a villain. Libertarianism is fine and good, but ideology can distort reality and prevent people from efficiently assimilating the available evidence. Unfortunately, that happens too often on Wall Street. When we ask why even the most brilliant and competent investors can succumb to bad ideas outside of their area of expertise, ideology too often is the culprit.
They will never listen gentlemen. Even if we predict everything in exact order, they’ll still say “this time is different”.
Different T Reply:
February 1st, 2016 at 12:41 am
Burry doesn’t appear Austrian, just more “libertarian” than most. He certainly does blame the Fed; but also deregulation, fraud, and bank greed. Most importantly, in the interview I watched, he said more regulation is needed (a new Glass-Steagal), taxes raised/spending cut, etc.
Different T Reply:
January 31st, 2016 at 4:21 pm
Nope, thanks.
Just read his wiki. Any other links to learn more about his past?
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@grey enlightenment
You are dodging the issue.
Has Spitznagel been mostly right in his predictions? Yes he has.
Has Spitznagel made a large net profit in the past decade? Yes, he has.
I mean, the guy is a billionaire, what else do you want?
As for Schiff, ok he was wrong in his main predictions, specifically about inflation. So was Murphy. And? Does that disprove austrian theory? Are you unaware that there were in fact a lot of austrians who disagreed with the inflation predictions?
Just because some austrian economists made wrong predictions doesn’t mean that Austrian theory is wrong – that’s just silly and sloppy thinking, especially when you have several counter-examples.
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grey enlightenment Reply:
January 31st, 2016 at 4:34 pm
I’m not going down the rabbit hole of debating the merits or lack thereof of Austrian economics, a debate that is utterly unwinnable. I’m just talking about these gurus and forecasters who have been wrong most of the time. Betting on econ collapse, treasury market collapse, dollar collapse, etc…all have been a losing trades since 2008.
Spitznagel’s hedge fund Universa Investments “made one of the biggest profits on Wall Street during the 2008 financial crisis” (according to CNBC),[42] scoring returns of over 100% as the Standard & Poor’s 500-stock index lost over a third of its value,[5][7][8][10][18][19][20][43][44] and making him “a fortune” according to The Wall Street Journal.[5] Despite being “one of Wall Street’s most bearish investors” (and even “the world’s most bearish investor”[45]), Spitznagel has “produced consistent gains since then, including a 30 percent return” in 2013 and 10 percent in 2014 (and has “been up every year since 2008”), according to The New York Times.[14] Spitznagel produced gains of 20% (or over $1 billion) in the 2015 stock market selloff.[46]
That’s just one successful person out of many losers. Mathematically, betting against the market is a losing game, and one of two people who do it successfully doesn’t change that fact.
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Ahote Reply:
January 31st, 2016 at 5:04 pm
Mark Skousen is an independent Austrian critic of “doomsayers.” There are also many Mises Institute affiliated critics of “doomsayers.” Note that Schiff isn’t, strictly speaking, an Austrian. Murphy always struck me as a nerd.
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Just because some austrian economists made wrong predictions doesn’t mean that Austrian theory is wrong – that’s just silly and sloppy thinking, especially when you have several counter-examples.
But did the Austrians who disagreed profit? Making a prediction in writing or disagreeing with a written prediction mean little to nothing. If Austrians do not even have access to meaningful capital to wager on their theories, does that tell you anything?
Any other guys besides Spitznagel? Any links to the Austrians who disagreed about inflation?
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Posted on January 31st, 2016 at 4:27 pm | Quotewho used an option trading method that no longer works
Is this referencing Spitznagel? From his wiki, his fund’s strategy simplistically seems to be making small, highly asymmetrical bets on mispriced risks (by definition, otherwise the bets would have higher cost). What are you referring to with this “method that no longer works”?
The method is taking advantage of high interest rates to buy OTM (out of money) puts on index funds. You put 95% of capital in risk-free interest bearing accounts and the rest in OTM puts. The interest is enough to compensate for the losers, since these options will expire worthless most of the time. Now with risk-free rates permanently close to zero, obviously this does not work. Eventually your bankroll will be depleted by these tiny bets.
There are other reasons. In accordance to Black Scholes , put options are cheaper when interest rates are high. Also, the market has a tendency to crash more often when rates are high. This is partially because high interest rates makes stock less attractive to less riskier assets.
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Different T Reply:
January 31st, 2016 at 4:57 pm
Thanks.
Mathematically, betting against the market is a losing game
It seems timing asset bubble bursts is a very difficult game that can occasionally be overcome when the cost of a long position is low enough (ie, Spitznagel’s strategy).
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8/pol/ thread 404d, here is an archive link:
https://archive.is/FEiUl
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Posted on January 31st, 2016 at 6:16 pm | QuoteOther than moralism, what on earth is possibly bad about sterilizing 60,000 incapable people?
Under democracy, we sterilize the capable by making them work to support the incapable. Reverse that and we might have health again.
Great list of links that went well with Sumatra and maduro.
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Posted on January 31st, 2016 at 7:33 pm | QuoteJumping on the Duck twitter censorship bandwagon, I’m noticing more and more discussion from Brahmin-y types about shutting down comments sections for good in the name of abuse management. I think he might be onto something.
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Posted on January 31st, 2016 at 10:06 pm | Quote99 n.o.
Batting for the best part of two years, congrats – and with a stick of rhubarb too! (Boycott would be dead impressed). Surrounding chaoz has certainly increased (bitchez). NRx has increasingly repeated itself. Dark Enlightenment? I call for a Chaos Patch to discuss the state of disunion (i.e. shedding skin from here on out (i.e. in this chaos patch here)).
It is, after all, almost the current Year of the Monkey.
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Posted on January 31st, 2016 at 11:00 pm | Quote“…there’s no difference between being early and being wrong.” – Barton Biggs
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Posted on January 31st, 2016 at 11:48 pm | QuoteThat Pakistan/India article brings to mind the UR analysis of Israeli/Hamas relations.
The war with Israel/India is Palestine/Pakistan’s national industry. Peace would be disastrous.
Funny how the alliteration lines up too.
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Posted on February 1st, 2016 at 2:48 am | Quote