Week 4

Maurice Wilkins, who died on Tuesday aged 87, played a key role in discovering the double helix structure of DNA, the molecule that carries genetic information. He shared the Nobel Prize awarded for the momentous discovery with Francis Crick and James Watson.

Although Watson and Crick became far better known than the intensely private and self-effacing Wilkins, the Cambridge pair were, in essence, theoreticians. Their conclusion that DNA had twin molecular chains intertwined, published in 1952, relied on the experimental results obtained at King's College London by Wilkins and his colleague Rosalind Franklin.

Crick & Watson most likely "borrowed" ideas from Linus Pauling - his name comes up in the "real inventor" gossip, not Wilkins'. Admittedy one day they were visiting Pauling who was also researching DNA, and some DNA X-Ray results suggesting double-helix structure were on his desk. Pauling was suspecting this structure, but Crick & Watson did some more snooping, then jumped in and published a paper using these specific words, upstaging Pauling.

We are five days into a dramatically different eating regime, and several hours into a session of being bombarded with information that runs counter to the received wisdom about diet that we have been given all our lives.

The regime itself is relatively simple. It can be simplified as a week of “healing the gut” by eliminating sugar, dairy, wheat, caffeine and alcohol from our diets and eating more fermented food such as sauerkraut, followed by a long-term change in eating habits to cut out sugar and refined carbohydrates such as white rice, breakfast cereal and pasta.

This is Montignac's Method

There is nothing new about it.

It's a good system tho.

Kotlikoff & Burns

[From The Coming Generational Storm book, 2005] According to The Treasury Papers, Medicare has a 43.6 trillion dollars unfunded liability! 10 This is over four-fifths of the $51 trillion fiscal gap. 11 The reason the Medicare liability is roughly six times larger than Social Security’s is not due to major differences in the present values of their projected future benefit payments. Medicare’s projected benefits are larger than those of Social Security, but by only one-fifth. The big difference is that the 12.4 percent Social Security payroll tax is much larger than the 2.9 percent Medicare tax. In the Treasury Papers’ fiscal gap accounting, Medicare is allocated none of the general revenue finance used to finance a good chunk of its benefits.

Yep

As of today the unfunded liabilities of US are roughly around 100 trillion dollars. IMO this is why a switch to universal basic income will be necessary for US at some point; instead of politicians writing themselves IOU's, sweeping things under the carpet, gov at some point will have cancel all of its programs, and start UBI, redistributing today's tax income for today's citizens, not tomorrow's imaginery income for a population whose make-up we cannot be sure of, but at worst case can be tilted heavily towards the old. The K. I. S. S. principle will win the day.

News

Republicans in Congress want to repeal Obamacare.

Good..

.. if they replace it with something working, such as single-payer healthcare. If it works in Canada, Australia, it should be good enough for the United States of America. I have a feeling US did not go this route, because low-skilled immigration issue is entangled here somehow.. If that is the case, then the priority should be clear -- given the choice between low-skilled immigration and healthcare (that is not an abomination) like Obamacare, then the choice should be for functioning health-care.

Comment

But Obamacare tried to work within the existing the system, balancing everyone's needs.

Hmmm...

Then why did Aetna pull out? Oh, and they announced this in 2016 smack in the middle of the presidential race, saying a big fffuuuuuuuuuuuccccccckkkk yoooouuuuuu to the administration. Imagine the conditions that caused them to do that. Companies do not prefer to get in public spats with the government. If they do, you can be sure they are hurting badly.

This is the final criticism on Obamacare - it became the Byzantian piece of work that it became because, reportedly, it tried to remain in the existing system.. but participants in the existing system are not happy. So mission not accomplished.

Comment

US owes nearly 20 trillion in debt.

What is the maturity?

Debt maturing (paid back) in 1 years is not the same as debt maturing in 10. Plus US debt is paid back in US dollars, US could simply inflate that away. Say with 7% inflation US would have to pay back only half the debt in 10 years. "The magic of compounding" works in the other direction too, you see, let's call it the black magic of reverse compounding (inflation).

Now, there is bunch of hoopla around Trump's plans for deficit spending which will surely cause inflation. If central bank wants to "tame" inflation and raises rates, then it will be back to 80s under Volcker, the king dollar. But if you wanted to generate inflation higher than usual, u'd need FED not be as gung-ho as Volcker. Then.. maybe Trump would want to appoint someone unlike Volcker after Yellen.. But is the debt issue that much of a big deal to start changing things around at this scale?

Let's try to think other reasons.. The new admin wants to f..k the Chinese who are holding 1 trillion US debt (not sure of the maturity). But with long maturity they would not be f..ked fast enough, it'd be a nice and slow grind, plus Japanese hold nearly as much debt as the Chinese - who are a solid US ally (I guess that is why the press does not make a big deal about them holding debt).

There was some talk around debt restructuring, etc.. But candidates say a lot of things on the campaign trail. Whatz brother T gonna do? Let's wait and see.

Question

But if someone is holding your debt, don't they have you over the barrel?

Debt issuers have many advantages, especially a country like US who can find buyers for its debt easily. See the article. If someone owns %5 of your debt, they don't own 5% of you.

Question

Trump wants to degrade Chinese power in exporting.

It can happen

It happened to the Japanese. IMO the rise of the Chinese was encouraged by US to counterbalance the Japanese. In fact one of the better explanations I heard about Japanese being in constant crisis of late is that they did not adapt to the world where China became the major exporter. Let's remember the 80s - they were the rising star, ppl were in a tizzy on Japanese buying up US assets, right? Remember the book / movie Rising Sun?

If the #1 economy in the world wants a country to become #2, that country will become #2.

Question

How did the US help China and Japan?

Know-how transfer, educating next generation of scientists

I heard a research scientist in US says once that "these Chinese are smart, they send PhD students targeted for specific areas, then they go back and invent stuff". But none of that can happen if US did not have an open-door policy for their scientists. Same was true for Japan previously. "But Japan made breakthrough advances in quality engineering, they followed Edwards Deming's teaching well". Right, but the US government sent him there. For that specific purpose.

Obviously both China and Japan made use of the opportunities, and became great economies, and China is on route to become a major innovator. All great stuff.

Question

What latest tech did you like recently?

A tea cup

I was sitting at a cafe and they brought tea in this cup

The cup has two layers with air in between, so tea is sort-of floating in air (looks great!), and the outside layer remains cold. No burnt fingers, no tiny holder on the side either so to I dont have to do frickin surgical strike just to hold the shit momentarily. Awesome tech.

But I am most troubled by what the President-elect did with Carrier to hold on to an extra 700 jobs in Indiana [..] I have always thought of American capitalism as dominantly rule and law based. Courts enforce contracts and property rights in ways that are largely independent of just who it is who is before them. Taxes are calculable on the basis of an arithmetic algorithm. Companies and governments buy from the cheapest bidder. Regulation follows previously promulgated rules. In the economic arena, the state’s monopoly on the use of force is used to enforce contract and property rights and to enforce previously promulgated laws.

Even though we know of instances of corruption, abuse of power, favoritism and selective enforcement, we take this rules-based system for granted. But looking around the world today or back through American history, this model is hardly a norm. Many market economies operate what might be called ad hoc or deals-based capitalism: Economic actors assume that they have to protect their property and do their own contract enforcement. Tax collectors use discretion in assessing taxes. Companies and governments buy from their friends rather than seek low cost bids. Regulators abuse their power. The state’s monopoly on the use of force is used to enrich and satisfy the desires of those who control the apparatus of the state.

This is the world of New York City under Tammany Hall, of Suharto’s Indonesia, and of Putin’s Russia.

Reliance on rules and law has enormous advantages. It greatly increases predictability and reduces uncertainty. It reduces expenditures on both guarding property and seeking to appropriate property.

Right

I believe some people have problem understanding scale; only incentives can create beneficial results at scale, one-one-one cajoling with single person at the center will have a hard time causing change, at scale. I remember one developing-world politician (a true imbecile) say once about unemployment "if every employer in the country hired one more person, there would be no more unemployment". This is true, in the sense that if everyone gave me a cent, I'd be a millionaire. Would people do it? Of course not. But why not? Because there is no incentive to do it.

I can't even categorize these people's approach as economics at macro. This is a sort of .... "bleeding-heart micro". They imagine a situation that is ideal, then divide that final goal into pieces, and that is what everyone needs to do. If everyone at the micro level did this little piece, we'd be fine. But.. if everyone did their piece in Communism, that ideology would have worked too.. It didn't because people won't perform their little pieces if it does not fit their (human) nature.

Article

[Paraphrasing] Obama saved General Motors because he really wanted to save [their experimental electric car] Bolt.

Yeah well..

Saving the auto industry was a mistake. There are many ways US gov could have saved that one vehicle, spawn it off to a seperate company, etc. The money that saved GM could have gone to a dynamic start-up instead of a slow-moving colossus.

The first time the sugar industry felt compelled to “knock down reports that sugar is fattening,” as this newspaper put it, it was 1956. [..] The industry responded with a national advertising campaign based on what it believed to be solid science. The ads explained that there was no such thing as a “fattening food”: “All foods supply calories and there is no difference between the calories that come from sugar or steak or grapefruit or ice cream.”

More than 60 years later, the sugar industry is still making the same argument, or at least paying researchers to do it for them. The stakes have changed, however, with a near tripling of the prevalence of obesity in the intervening decades and what the Centers for Disease Control and Prevention figures reveal to be an almost unimaginable 655 percent increase in the percentage of Americans with diabetes diagnoses. When it comes to weight gain, the sugar industry and purveyors of sugary beverages still insist, a calorie is a calorie, regardless of its source, so guidelines that single out sugar as a dietary evil are not evidence-based.

Damn

Good catch NYT. So there is heartbeat in that carcass after all.. :)

Juust kidding!

“[Soros’s] connections, especially in the political realm, provided him with information that was not generally known” before he made a fortune by shorting sterling in 1992.

Incorrect

First, the Sterling bet was mostly Druckenmiller, and the basis of it all was watching "the macro", governments, central banks, so forth - see Mallaby's More Money Than God.

There is one instance where Soros heard the German central banker Schlesinger at a central bankers’ gathering in Basel where he "declared publicly that he could make no guarantees about the future course of interest rates", Soros approaches him to double-check if he meant what he said, and he did. That comment indicated to him the Italian lira would be weak, so Soros and Druckenmiller add the lira to the basket of currencies to be shorted. But this is all connecting the dots.. noone comes to Soros and whispers in his ear "buy this at this time, sell this other thing". He used information available to everyone.

But not all participants in the markets are traders.

Let's take this case: Consider Company Z on March 1, 2009, which due to unforeseen circumstances must now find $10 million for an expenditure that will occur on June 1, 2009. It expects to generate revenue over time, so expects to be able to repay this amount on September 1, 2009. They can normally borrow funds for 3 months from its local bank at a rate of 3 month Libor plus 100 basis points. But then the effective interest rate would remain unknown until June 1. What does the company do? Company Z can sell 10 Eurodollar future contracts (for total notional principal of $10 million) that expire on June 1, 2009.

Get all of that? So by short-selling futures on Eurodollars, company guarantees the rate it will get in the future is the same as today. Shorting ED is in a way speculating on the interest rate (LIBOR). If the rate went up in 3 months, Z would have "made" money (ED "price" is calculated 100-rate, 93 means %7), but it would be borrowing for its expenditure at that LIBOR, any gains offset the higher rate on June, so Z is back to March 1 - exactly what they were aiming for.

In this case the company, or its CFO did not enter the market to make (or lose) money. They simply wanted to put a certain number in their books for a future expenditure. Something they could know from today.

The needs of such people, that CFO are not nothing. A huge portion of finance is there to serve them, so the CFO can sit in front of his CEO and say "yes Mr./Mrs. CEO, that expenditure is planned for, and ___ is the rate we will be borrowing at".

He can't just say "pfff.. hey man, who knows whatz the rate gonna be.. but don't you worrry about a thaaang, it'll all be fine". If he said that, the CEO wouldn't simply fire that CFO, he'd probably throw him out the window. Businesses try to base themselves on predictability as much as possible.

Note: Eurodollar futures are based on a $1 million face-value, 3-month maturity Eurodollar time deposit. Eurodollars are time deposits denominated in U.S. dollars and held at banks outside the United States. A time deposit is simply an interest-yielding bank deposit with a specified date of maturity. At the end of November 2016 total ED contracts outstanding stood at $12.84 trillion.

“My stomach is killing me,” I complained. The pain was a mild burning that came and went when I moved, and the area felt tender when pressed. [..] “Well, the good news is your symptoms don’t seem worrying on a medical level and can be managed at home. This sounds like dyspepsia to me. Dyspepsia is doctor-speak for indigestion,” came the response. “You should try to avoid irritants such as spicy foods, black coffee/tea or anti-inflammatories. If the problem does not settle or becomes recurrent, talk to a GP.”

The diagnosis, unremarkable though it seems, did not come from any human medical professional — it was delivered to me on my smartphone by Babylon, an artificially intelligent medical adviser with whom I had been exchanging messages via an app.

Exciting new developments

AI should be able to replace most doctor visits in the near future.

Researcher

[geek] It was discouraging throughout the 1970’s that the work done on [automatic differentation, a technique whereby one can compute the derivative of any mathematical software function, programmatically ...] were ignored and even disparaged. Presentations at conferences were met with disinterest or disbelief. One reason advanced for this was the wide-spread conviction that if a function was represented by a formula, then a formula for its derivative was necessary before its derivative could be evaluated. Furthermore, the differentiation of a function defined only by an algorithm and not by a formula seemed beyond comprehension. A few simple examples could be incorporated into elementary calculus courses to combat these fallacies [..] An informal survey of numerical analysis and other textbooks reveals that most recommend against the use of derivatives, in particular regarding Newton’s method and Taylor series solution of differential equations. The reason advanced is the complexity of obtaining the “required” formulas for derivatives and Taylor coefficients by hand.[/geek]

Yes

Computers changed everything. The curriculum needs to be updated to reflect that. Also see this. Deep Learning makes heavy use of AD.

Gallup defines a good job as 30+ hours per week for an employer who provides a regular paycheck. [.. and] is calculated as a percentage of the total population.

I don't know enough millenials to judge if this is true but it is interesting.

[-]

Ha ha.. The federal thing is all nice and good, but now Buttfuckee, South Carolina is deciding immigration policy for Orange County, California. That cannot stand. Elected reps are there to balance out the local with federal, the long with the short term. If they cannot do their job, either they go or their electors do.

"Acknowledging that the legal and political obstacles are formidable, the proponent of a state ballot measure to sever California’s ties with the United States and form its own nation has been cleared to start collecting signatures.

If passed by voters, the measure, “California Nationhood. Initiative Constitutional Amendment and Statue,” would remove language from the state constitution describing California as “an inseparable part of the United States of America” and require the governor to request admission for California to the United Nations"