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I finished reading Debt of Honor my Tom Clancy recently. It was one of my granddad's that he gave away. I liked it more than I expected. The first 500 pages are all introducing hundreds of characters and details about them, but the story was good.
Been reading Lilies of the Field aloud with my wife. It's short and sweet.
Started reading No Country for Old Men on my own. It's not sweet at all.
Got The Two Income Trap from the library, but haven't gotten past the introduction yet.
A podcast episode on a related topic is Cathy O'Neil on Weapons of Math Destruction on Econtalk
- Cathy O'Neil, data scientist and author of Weapons of Math Destruction talks with EconTalk host Russ Roberts about the ideas in her book. O'Neil argues that the commercial application of big data often harms individuals in unknown ways. She argues that the poor are particularly vulnerable to exploitation. Examples discussed include prison sentencing, college rankings, evaluations of teachers, and targeted advertising. O'Neil argues for more transparency and ethical standards when using data.
Includes discussion of the recidivism rate - the projected likelyhood of returning to prison - how the use of zip codes is a proxy for race and how recidivism projections punish most those who would have the hardest time reintegrating into society even after a short sentence.
They also note how the misuse of data can cause self-reinforcing effects, and increasing damage in the future
Cutting a big gear&shaft& internal acme thread part out of a 5x5x4 inch chunk of steel is the funniest. or most wasteful. It could have had the exact same function except harder steel and a fraction of the price by just using 1" plate and 2" round bar and a bit of keystock.
Buying an off-the-shelf gear reduction would have cost less and lasted longer too, but it might have ruined the beautiful crt monitor shape of the thing.
On news: An old, misleading, video may be the most plausible trigger for a bad day for the market, but I think it's more accurate to say the cause is the guessing-game of interpreting the effect of any info, and the effects of effects, and so on. I think nearly all reporting on daily fluctuations is a search for a story that feels right, and I think the weirdness of the stories or the size of the reaction doesn't shed light on the health or durability of any long term trends. I am skeptical of believing in the market's rationality even while it looks like it's rational.
That's my interpretation of it. A relationship between daily market news and anything would be hard to prove or disprove in any meaningful way.
On time until a correction/recession/meltdown:
I am not making a confident prediction that there is 2 years left moving up, just that I don't think a big correction is immanent. I think really slow growth or flat over the next couple years is more likely than big growth or a crash.
I don't see much of the "irrational exuberance" that I would expect in the lead up to a large correction. There are a lot (A) who seem overconfident that the stock market will preform well, a lot (B) who are trying weird things to get a good return, and a lot (C) who are sure it is about to crash. When someone in group B finds a silver bullet and group A starts to join in on the wonderful new thing, I'll be scared and join group C. I hope I will anyway.
Market breadth - was under the impression that market breadth was in a pretty boring range, but while trying to double check that I found a lot of conflicting info, I'll update on that when I get time to look more deeply.
Debt & Housing
Some regions are ripe for a big drop in housing prices, but I don't believe that will have much affect outside of those regions because:
There is less investment money riding on mortgages because rates have dropped, so the financial effects of a housing drop are smaller.
A broad drop in housing is less likely because the delinquency rate is lower and the housing debt service load is lower (because of lower rates).
- What aspect of market behavior are you seeing right now that indicates there's another 2 years of runway on this bull market? What tea leaves are you reading? Because history doesn't repeat itself but it rhymes and apparently I'm not seeing what you're seeing.
Some of the warning signs you see look like unimportant noise to me. And without the warning signs, I think slow overall growth is likely, with some small corrections and rallies along the way.
One could argue that the day-to-day market swings don't have a lot to do with any longer term movements.
One could also make the case that this kind of financial reporting is just picking whichever cause feels like a good fit for the effect observed. Not by which is plausible.
Kleinbl00 you told us you aren't optimistic and went to cash for now, but what makes you think there isn't more time left in this bull market. Housing has gone out of control in a few places, but not so bad everywhere else. The equity bull market is historically long, but not so remarkable in gains, and there have been some corrections (Jan 2016) which have let of steam and kept people at least partially risk-aware. I think there's a couple years left before there is a big drop in prices.
(I'm not trying to convince you, I'm just curious what you think about it.)
- I know I am getting better at golf because I am hitting fewer spectators.
- Gerald R. Ford
I average about 1 round of golf a year, only at family reunions. Last time was 2 years ago though, and was seriously bad, so I decided to practice some at a driving range. (Practice is cheating according to 1 uncle. He plays by natural ability alone (very badly))
If anyone has depressing jokes or quotes about golf, I would love to hear them
Beyond the basics of interest rates, I don't know enough to sort good information from people just finding whichever conclusion they want to.
Interest rates have stayed near zero for 10 years because the economy hasn't "heated up" enough to make the fed raise it. I think they want to wait until inflation gets a little higher before raising more. Inflation is often the result of too-low rates, but inflation has been really low the past 10 years, proving a bunch of warnings wrong.
There are tons of simple explanations that X caused a slow recovery and Y is the sure-fire fix.
The only simple explanation that made much sense to me is that a financial crisis is the worst kind of crisis, because the loss of trust in the system as recovery. That explanation doesn't come with a solution though.
So we've got divergence of expectation and outcome, and dark omens of volitility in the last few months. It's possible for pressure to bleed of slowly or pop with a bang. Or pressure could keep building for longer than anyone expects. If it pops, rates don't have a lot of room to go down, but quantitative easing is an option too.
Treasury bonds aren't paying much at all. Other interest uses treasury yields as a baseline.
Interest rates went down to promote economic recovery. Lower interest [hopefully] causes money to shift from financial investments to investments which grow the broader economy.
Some money does, some money just finds more risky or overcrowded investments.
Fun fact: Donald Trump, George W. Bush, and Bill Clinton were all born in the summer of 1946.
Donnie: June 14, 1946
Dubya: July 6, 1946
Bill: August 19, 1946