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2018-01-17 11:57 by Karl Denninger
in Editorial , 657 references
[Comments enabled]  

So now BitCON has dropped under $10,000, which is a 50% retrace since the "top."

The screamers are all out saying "well, this has happened before" (50% declines) and it has always led to another (huge) advance -- buy now!

Uh, not so fast folks.

Who knows if this time is the one where it falls apart -- literally.

But let me point out that as the coins "mined" increase the difficulty increases and worse, the "reward" -- number of coins you get - goes down.

This is important because not only does it mean the next one cost more to get but it also becomes a huge problem since the "miners" are the source of transaction verification.  Without transaction verification the entire scheme collapses as worthless.

Therefore as time goes on and the imputed cost structure of clearing transactions is forced out of being cross-subsidized that cost becomes exposed and it is enormous compared against all other existing means of payment -- eclipsing even physical gold and silver in that regard.

These frictional losses that are inherent in the "distributed" cryptocurrency space are very, very hard to eliminate and doing so with existing systems is nearly impossible.

I agree that the concept of chains of signed certifications has the potential to remove a lot of game-playing in society generally.  For example were Barack Obama's alleged "birth certificate" a cryptographically-signed digital image with a certificate chain valid back to a national archivist it would have been nearly impossible to tamper with it in any way.  As a modern-day example if you have a software executable with a cryptographic hash it is essentially impossible to modify that software while not breaking the hash verification.

We do this today with land titles, for example, by keeping them in a book and referring back to the previous issue in the same series of books.  But this requires that I trust the archivist, since there is no way to know if he tampered with it, just as is the case with so-called "vital records."  If, instead, said title was digitally signed with a certificate that had a chain of issuers back to a trusted place then you'd have to corrupt that and everyone under it in order to commit forgery.  It is much harder to corrupt 10 people than one and it is very hard to corrupt hundreds without someone raising hell about it.

That doesn't make the current offerings in this space compelling; to the contrary, by attempting to make them "anonymous" and "uncontrollable by any central party" they actually made them unusable as either mediums of exchange or stores of value because manipulation became the intent and inherent in the design.  This in turn led to obfuscation and cross-subsidization of the clearing mechanism which becomes exponentially harder and thus more expensive the more it is used, which is also stupid.  While some of the existing scams have tried to address some of these misfeatures the means by which they do so are inherently hacks because of the very nature of what they tried to build.

At some point all of these existing systems will fold back and when they do they will become effectively worthless.  Without a clearing function you cannot trade in these things since you can't prove ownership and without a means to pay for that clearing function which expands in cost exponentially over time nobody will do it, since nobody ever works for free.

Whether this is the point where recognition comes and BitCON collapses to zero is not a question with a definitive answer, except after the fact.  However, anyone paying $10,000 for a string of digits under these circumstances ought to have their head examined, and if you paid $20,000 for that same string of digits a few weeks ago you've already lost half.

You might want to consider, in that case, whether a 50% loss is better than a 100% one.

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2018-01-17 06:00 by Karl Denninger
in Editorial , 245 references
[Comments enabled]  

It's amusing, really.

Yesterday the President's doctor takes to the lectern and the press spends an hour trying to find some way to spin his medical exam.

There really wasn't one, by the way.  I know how to read a medical chart including all the basics on a metabolic panel and what I heard was right up the middle.

Trump is 71.  He's overweight, borderline obese.  But his A1c is 5.0 which isn't just good, it's really good.  At his body mass he should be running somewhere around 6.0, which is "high normal" but still (according to the "med dudes") in-range.  Instead he's up-the-middle normal -- on the lower end!  His fasting glucose is 89  Again, up-the-middle normal.  Blood pressure?  Normal.  Ejection fraction?  Normal.  Exercise tolerance?  Normal.  Low-exposure CT? Normal.

Cholesterol?  Immaterial, really.  Seriously.  If he's not evidence that the so-called "lipid hypothesis" is horse**** what is?  Here's a guy who eats hamburgers all the time, lots of saturated fats, and guess what -- lots of cholesterol in his blood.  But -- no heart disease and no diabetes.  Why?  That's simple -- low systemic inflammation.

Guess what it appears he doesn't eat a lot of?

Refined carbs and vegetable oils.  Steak and burgers for the win, to be blunt.

But heh, you know, it doesn't matter really whether he does or doesn't.  When the doc was drilled on how the hell a guy can eat like that and not wind up a walking heart attack he had a one-word (true) answer: Genetics.

Yep.  Luck of the dice, basically.

Well, and a few other things.  No tobacco, especially, and no alcohol consumption.  At all.

Genetics is luck.  Choosing not to smoke is a choice.  So is not eating the fast carbs, which it appears Trump doesn't.

I didn't get a VO2Max from that presser, but I'd like one.  "Very good for age" doesn't tell me much -- I want a number, and the doc had one, since he did a stress test.  But that's ok.  It's probably not as good as mine (51-54, depending on where I am in conditioning for a race) but then again Trump has 15 years on me.  If mine is 51 in 15 years I'll eat the paper this can be printed on.  Then again while my metabolic numbers are normal too I'm also 15 years younger.

There were questions as to whether golf counts as exercise (duh, really?)  It'd count more if he walked the course and even more if he carried his own bag, but the latter is not something a billionaire would do.  Oh, and the former?  Most courses won't let you any more, because there are too many people who turn a round of golf into a 6+ hour ordeal if they walk, mostly because they're 300+lb tubs-o-lard that more waddle than walk, and that makes play miserable for everyone else.  If you want to know how I know this it's because I carried bags for some of them when I was a teen.  Never mind that I understand he'd kick my ass on the golf course as his handicap is said to be an amazing 2.8 -- way ****ing better than damn near any 71 year old, even a retired PGA pro.  I know how to play that game and used to pretty-regularly.  I've seen videos of him hitting the ball and looked at it frame-by-frame.  I'll never hit it like that on a consistent basis folks; he really does pretty-much have it dialed in.

Yeah, Trump is fat, but let's cut the **** folks, there are some people who can be fat -- at least somewhat fat, not morbidly obese -- and healthy.  Not many, but some.  Trump is one of them.  The problem is that you cannot simply say "oh he's ok so I'll do it too" because you don't find out if you have the genetics for it until you get into your 40s or 50s and by then, if you don't, you're already severely compromised metabolically.

As for cognitive impairment, that's off the table too -- assessed at Trump's request.

So now what?

Lose 10-15 lbs as the doc said?  **** him; Trump should lose 30-50.  But he won't, and he got a good genetic draw, so unlike me and the rest of the US it doesn't matter.  No elevated A1c, no elevated fasting glucose, no elevated BP and his ejection fraction is normal so you get to shut the **** up eh.  No, not everyone gets a participation trophy in this game called life.

Look folks, not one in a thousand will get away with what Trump has thus far.  Myself included.  Which is why I stopped being a fat-ass seven years ago.  I'd like to see 71, and maybe 81 or 91.  I knew I wouldn't if I didn't cut the crap.  My genetic draw was just average, instead of three or four standard deviations out on the right side of the curve.

You may not like Trump -- I sure as hell don't for all the lies on "fixing" health care and going after the banks that have robbed us all -- but he's not going to drop dead during his term, and almost-certainly won't if he wins another one.

You're not going to get that gift folks -- nor will you get him on cognitive impairment.

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2018-01-16 07:00 by Karl Denninger
in Editorial , 242 references
[Comments enabled]  

I generally like David Stockman's work and read it from time to time, so when I see him go off the rails with utter nonsense while refusing to actually put analysis to his work, which he claims to do, it forces me to give him the slant-eye on a forward basis.

He's earned that with this piece.

Let's start with the up-front nonsense he leads with in the third paragraph:

Indeed, even prior to yesterday's outburst it was hard to deny that Trump is a semi-literate bully and that he never got (read) the memo on racial comity and respect. But we actually happen to think that the Donald's potty-talk eruption resulted not from some dark place in his mind and heart, but from sheer frustration as the intractability of the immigration issue closes in on him.

Instead of presenting a case Stockman instead decides to use the infantile debate tactic of poisoning the well in an attempt to lend legitimacy to everything that follows -- and he does it early, right in the first three paragraphs.

That's sad for several reasons, first and foremost because it's utterly unnecessary.  The more-serious charge is that fully half the nation will stop reading right there, and indeed that's part of the point of his rant -- he doesn't want people to actually take in and process his argument, so he pulls that card immediately, thereby giving those on the left what they want in the form of a dog whistle while at the same time dissuading anyone from actual analysis on the case he tries to make.

I wish the sins ended there but they're just beginning, including his own contradictions.  First, there's the truth right up front:

What we mean is that neither party has its cards face up on the matter----which goes way beyond the potential deportation of the 800,000 dreamers, chain migration, the diversity lottery and the Wall. Underneath it all there is a brutal, raging political struggle for dominance which is almost existential in import.

To wit, the sundry Dem caucuses want more immigrants, and the browner the better, because it's their only route to electoral dominance. By contrast, the hard core GOP immigrant-thumpers are desperately attempting to hang-on to Red State rule in the face of the forbidding demographic math of the white population---and the fact that not many Norwegians want to come to America anyway.

True.  But when you are in a froth-induced rage to the point of the first paragraph I cited you tend to forget what you said just a few column inches later.  Specifically:

At the end of the day, there is only one way out of the impending fiscal catastrophe. Namely, a revival of the old-time fiscal religion within the GOP, and a Paul-on-the-road-to-Damascus conversion among Republicans on the matter of immigration.

That is to say, America does not need Walls; it actually needs tens of millions of younger and working age immigrants who can function as tax mules to carry the burden of 105 million baby-boomer and retirees.

What?

Just a few inches above Stockman got done telling us that Democrats want lots of brown immigrants because they will vote for them, and their policies grant ever-greater handouts.

A nation full of immigrants that are tax sinks, which on balance all of these "brown" immigrants are, will not save anything.  In fact they'll make it collapse faster and harder!

Look at just the public school cost in these areas of the country -- indeed, virtually everywhere.  It's north of $10,000/year/pupil.  This is an utterly-obscene amount of money and it means that for each new "immigrant" that is either a near-school-age child or any offspring they produce each of them causes the nation to go in the hole by nearly $250,000 before they graduate High School -- if they graduate.

Now add another $100 large on that for a 4-year college degree.

Both of these costs exist because the policy of unbridled and illegal immigration have led to extraordinary expenses that are mandated and the financialization of both events.

Remember too that the "payback" on that is not lifetime earnings -- it's taxes paid, discounted for the current value of the money.  The odds of the average immigrant managing to pay taxes of $350,000 over the ensuing few years (remember, discounted cash value folks -- if it takes them 40 years then at a 3% discounted cash value they need to pay well north of a million dollars in tax) is effectively zero.

That is, statistically speaking exactly none of those immigrants will ever pay $1 million in taxes during their lifetime and that is without subtracting back out all of the tax-paid benefits beyond the age of 18 such as welfare, SNAP, Section 8 housing, Medicaid, Social Security and Medicare.

That there are a few you can point to who did (e.g. CEOs of companies such as Intel) today doesn't change the statistical reality, which is that you cannot fix this problem through importing people from third-world ****holes, and in fact the more of them you import and the more of them you allow to stay who are already here the worse your fiscal problem gets.

That's the math whether Stockman likes it or not and he knows it because he admits this is the very strategy the Democrats are adhered to and why they adhere to it.

David presents many other scary and true facts in his article.  But, his prescription for a fix is factually and knowingly bankrupt.  He demolishes his very own argument within the first few paragraphs but he has obviously forgotten his bit of truth-telling just a few short column inches down the page.

This is the market of an ideologically-married, factually-bankrupt individual; they refuse to analyze on the facts because doing so means they must change their precepts.

To resolve the issue of immigrants coming here and being tax sinks, which on balance they are today we must either get rid of the ability of those people to ever access any public services for which they do not pay or we must throw all of the illegals out who are in fact tax sinks, including all their indirect effects such as their bearing of children and their fiscal impact and bar any future immigrants who similarly are or become down the road said tax sinks.

It is virtually impossible to admit anyone other than a genius-level intellect to the country and not have them be a tax sink and thus destructive given the current cost structure of our public benefit system, whether the issue be primary and secondary education, post-secondary education, medical care and other government handouts such as EITC, TANF, Section 8 and similar.

In order to fix that you have to get the cost structure down to the point that the average immigrant can pay less than $100,000 in federal taxes over their working lifetime instead of $1 million and have the books balance.

There will be those who claim "the answer" is to get rid of all public benefits for immigrants and their offspring.  That's a good start but it's not enough because as Stockman points out (as I have) the root of the problem isn't there -- it's in the cost of those benefits and payment streams flowing to American citizens as well.

So if we're serious about avoiding the detonation of our nation's finances we have to cut the crap.  All of it.

It must start with the medical system and it's monopolies, locking all of those people up and dispossessing them of every penny of their stolen wealth under penalty of imprisonment.  I've written much on this but the fact is that nothing other than the threat of jail or death is going to dissuade them from their thieving, so one of the two it must be.  This is not a choice, it's a mandate: Do it or the nation is screwed.

We must also apply the same to the entire educational system.  No more free public education.  Period.  Have a kid, pay for him or her to go to school or teach him or her yourself.  huge percentage of our so-called "teachers" are either politically biased to the point of uselessness, incompetent themselves or both and our entire "educational system" is chock full of non-teaching entities and money sinks that make it impossible to actually hire qualified people at a rate they'll agree to work for.  We must also remove all public and government-subsidized support, including loans, for so-called "higher education."  If a college cannot demonstrate that it imparts knowledge and ability superior by a wide margin to the cost of attendance in present dollars, not future ones, for virtually every student accepted then that school needs to go out of business -- period.  The means by which that's demonstrated is that students pay for their education in cashwhich means that cost must inevitably be tied to what said uneducated person can earn to pay for it.  It was this way for over a hundred years in the United States and we put men on the moon multiple times with graduates of exactly those schools.  There is no reason it cannot be that way again, right now -- other than the lobbying and theft of these institutions and everyone who works for them.

Finally, Stockman is just flat wrong on the so-called "aging population."  It relies on a premise of continued expansion in life expectancy that is just flat-out bull****; there is zero support for it.  Never mind that the generations to follow are smaller than the boomers who will start dying in the next few years.

Social Security, for example, is designed to stockpile Treasury Bonds with maturities that roughly match the duration of expected payouts.  That's because there are population booms and busts, and during the booms those people pay in before they get paid, thus filling up the bond repository.  That government continues to spend the money and stick "IOUs" in the box doesn't change the structure of the program.  The actual debt taken on is the truth, not the so-called "deficit."  In other words the program is fine; it's funding is close to one dollar in seven earned up to the cap, and your payouts are capped too.

Medicare, on the other hand, is designed under the same rubric but with an assumption that medical spending is 4% of GDP.  It cannot survive in any fashion, say much less as it is now with medical spending at 19% of GDP.  The only way Medicare survives is if we kill all the medical monopolies right ****ing now.  Fortunately the tools to do so already exist, having been in the law for more than 100 years and confirmed through two separate Supreme Court rulings in the late 1970s and early 1980s.   We must kill the monopolists through legal process and blowing up corporate extraction and monopolist schemes throughout the medical and health insurance systems right damn now because the only alternative is that a material percentage of the population will be forced to kill everyone involved in both via other, much more violent and unlawful means if we don't.

Medicaid, which has no tax funding, has the same issue but compounded and thus is even worse.  The reason is simple: The more poor people you have the more people wind up on Medicaid.  If we do not stop the extraction and monopolist horse**** then Medicaid will bury the nation before Medicare does, not that it much matters which goes first.  Oh by the way, the odds of a Medicaid recipient having nothing to lose and thus concluding that "all after the first one are free" is much higher than for a Medicare recipient.  Contemplate that for a while and what it will result in when the money runs out.

That's the math -- but Stockman has joined the left, along with a number of so-called "mainstream" Republicans, who have decided to lie to you, on purpose and with intent, even when they document for you, in their own single column, that they are in fact lying.

Stockman, like so many others, have in fact descended into arguing for the destruction of the nation -- both fiscally and violently.

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2018-01-15 12:13 by Karl Denninger
in Editorial , 306 references
[Comments enabled]  

That we live in a world where every single move you made was tracked by the government and big corporations. 

There are cameras at every street corner, in every building and even in your own home, all connected to a gigantic cloud that was intentionally compromised by the government so it could see everything you did.

I have a dream!

That in exchange for silently cooperating with the government in putting those cameras and microphones everywhere huge corporations worth hundreds of billions of dollars would be given a pass from privacy laws and allowed to tap into that information too, both to sell you things and to screw you out of thousands of dollars every year by perverting the so-called market.

I have a dream!

That "self-driving" cars will soon make their appearance on the roads, but will always be connected to said cloud by law, with disconnection or independent action being an absolute offense and subject to immediate fines and confiscations. These vehicles will communicate exactly who is in them, where they're going and where they've come from, building an impenetrable and permanent dossier on every single movement everyone in the country makes from birth to death that cannot be evaded or avoided.

I have a dream!

That the people of this nation would be so stupid that they'd fail to recognize that spending money you don't have is a bankrupt premise and can never work, as it robs the very people who you "give" the money to and drives them further into poverty every single time.

I have a dream!

That the people of this nation would be so easily seduced that they would pay money to buy a microphone that was always on and they did not control, willingly putting it in their living room and, for many, another in their bedroom so on command that examination of their lives could be conducted not only when on the public streets but when they were having their most-intimate moments.

I have a dream!

That it would be considered misconduct bordering on criminality to assert that one's draw in the genetic lottery is immutable, but if you're unhappy with it, or for that matter anything else, you have the right to steal however much money is required to try to become more happy.

I have a dream!

That you can come here illegally five times, be deported five more, come back again, then assault the passengers on a Greyhound bus and threaten to kill them and the mayor of the city where you reside, and who harbored you in direct violation of the law, will not be indicted, arrested or prosecuted.

I have a dream!

That firms claiming to sell "insurance" in an area of the economy consuming fully one fifth of all spending will be given the ability to keep charging you after the event you bought insurance against happens, and you require them to pay -- or they'll stop paying and you will die.

I have a dream!

That the people of this nation will allow a company to sell a drug here for $70,000 that you can buy in another nation for $200, and if you try to break that monopoly by flying there with a suitcase to fill with said pills and sell here you'll go to prison on your return.

I have a dream!

That when you need emergency medical care a whole cadre of people will financially******you blind, charging you $30,000 for a $2,000 hour of airtime in a chopper to get to the hospital and $100,000+ for "care" you can buy on a non-emergency basis in another nation for $2,000.  Then, with that not being enough to cover the salaries of the 50 "administrators" per doctor or nurse, and the multi-million dollar CEO salary, when they nearly kill you with an infection you get while under said "care" they'll screw you out of another $250,000 to fix their mistake -- whether you live or not.

I have a dream!

Assuming you physically survive the outrageous behavior of dozens when you have that medical emergency you'll congratulate them for saving your life instead of roasting them on a spit slathered in BBQ sauce when both state and federal governments refuse to imprison all of the above for violating 100+ year old anti-trust laws and 50+ year old consumer protection laws that are intended to prohibit exactly the long litany of of extortionate series of acts they perpetrated upon you.

I have a dream!

That should you have a child and have little money said child has the right to steal not only a public education through high school but also a collegiate education from every other person who has more money and deigns to attend, even if it places those "better off" young adults in debt up their eyeballs.

I have a dream!

That Hezbollah would be given free rein to import thousands of pounds of cocaine into the United States and sell it without fear of arrest, but any American caught doing the same thing would spend the rest of their life in prison -- all so we can phony up a diplomatic fraud with another country.

I have a dream!

That our own FBI not only was involved in leaving Hezbollah alone peddling all that cocaine but also intentionally concealed bribery of government officials and others in the selling of nuclear fuel for both power and bombs to the Russians -- because the President at the time was Black Jesus and his Secretary of State was the titular female half of the greatest crime family ever to live in the White House.

I have a dream!

That the very same titular female head would get a convicted child trafficker in Haiti off with a tiny little sentence, when the evidence appears to indicate that she was in fact involved in human trafficking and was arrested for same; after all young black children are worth far less than white ones and when the money is good slavery -- even sexual slavery -- is still ok, so long as the pimps are one of the privileged.

Sadly, there is also a dream I did not have.

I did not have a dream of handcuffs on Hillary and Bill Clinton, nor Black Jesus. I did not dream of President "Rule of Law" Trump demanding Jeff Sessions indict every one of the above individuals and firms, or he would be fired and replaced with someone who will.  I did not dream of Rahm laying in a prison cell for harboring an illegal immigrant -- who went on to threaten the lives of Americans.  Nor did I dream of those conspiring to import cocaine via Hezbollah going to prison either, or of the Googleplex, Spamazon or Facesucker being shut down for invading the privacy of Americans and selling their secrets for pennies while screwing them out of billions.  And finally I did not dream of the myriad health care executives, from hospital administrators to drug company CEOs to insurance firm boards of directors being led out in handcuffs to face the music for violating 100+ year old law, their companies laying smoldering in ruins and their executive staff all facing decades of prison time and confiscation of every penny they have.

Nor will I, because unlike MLK there will be no awakening of the US Public, there will be no outrage, there will be no marches, no pitchforks or torches.

There will only be the little mewl intercepted from time to time by Alexa and Echo, with Amazon, Google and the government chortling in glee as one is bent over the table, cheeks spread wide:

Please sir, this time, just the tip?

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2018-01-15 11:07 by Karl Denninger
in Editorial , 440 references
[Comments enabled]  

If you had any pretense that the United States, including high officials in the government such as the President and his Press Secretary are not completely ****ed in the head to the point of abject stupidity when it comes to security matters you don't need to look at Hillary and the willful non-prosecution of her felonious behavior.

You need only look at Sarah Sanders.

White House Press Secretary Sarah Sanders took to Twitter to call out Amazon after her young son inadvertently ordered an $80 toy using the the company's Echo device. 

"Alexa, we have a problem if my 2 year old can order a Batman toy by yelling "Batman!" over and over again into the Echo," Sanders tweeted on Sunday.

Oh really?

So let me see if I get this right.

The White House Press Secretary has a spying device with an always-on microphone in her home and in fact it is connected and working.  A device she willingly and intentionally paid for.

Said spying device allegedly "ordered" an $80 toy because her child spoke a series of words.

The outrage, of course, is that the device ordered an $80 toy.

The idiocy is not that said device ordered an $80 toy.

The idiocy is that anyone in this country, say much less anyone with access to sensitive information of any sort, whether of government importance or just personal private importance, would place such a device in their house.

I'm sure that in just two short weeks we'll hear that Amazon sold "millions" of Echos this holiday season.  I'm sure we'll hear how "smart" Amazon and Jeff Bezos are for doing that.

And I'm sure you will still have yours, you won't throw it in the trash where it belongs, or even better take a big steaming dump on top of it in its original box and send it to Bezos' home.

"You" collectively, America, all the way up the line to our White House Press Secretary, have knowingly brought a spying device into your house where by its very nature it must listen to everything that happens within range of its microphone.  What's even better is that you paid for this thing.

How ****ing stupid are you?

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