Financial news

2:00PM Water Cooler 10/29/2019

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Via Naked Capitalism

By Lambert Strether of Corrente.

Patient readers, I’ll have more in a bit; my brunch was a little too long and a little too liquid. But also, my news harvest, once I throw out the hysteria and the non-stories about stuff that might happen, is oddly thin; oddly because California is literally on fire, and much of the world metaphorically so (because of the global protests). It’s quiet. Too quiet. –lambert UPDATE All done!

Politics

“But what is government itself, but the greatest of all reflections on human nature?” –James Madison, Federalist 51

“They had one weapon left and both knew it: treachery.” –Frank Herbert, Dune

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2020

Alert reader dk (not to be confused with DK) is in the process of developing the following interactive chart. Here is (are) the latest Dem Primary Polling as of 10/29/2019, 12:00 PM EDT:

I went to the daily instead of a 7-day average (for now) to see what was happening with Biden. He’s back up, at least according to Morning Consult. And here are the poll results, as of 10/29/2019, 12:00 PM EDT.

Finally a new poll! The Biden juggernaut rolls on, Sanders and Warren are tied.

I think dk has started a really neat project, and in the near future we’ll seek your feedback (within reason) for the tool “live.”

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Biden (D)(1): “How Biden Helped Strip Bankruptcy Protection From Millions Just Before a Recession” [GQ]. “[BAPCPA (bankruptcy “reform”)] overwhelmingly passed with Biden’s support—while bankruptcy reform had been dead on arrival just a few years earlier, 18 Senate Democrats chose to side with all 55 Republicans and the lone independent [Jeffords, not Sanders] to vote in favor of the bill. Then president George W. Bush promptly signed it into law, and 14 years later BAPCPA is still making it more costly and cumbersome to declare bankruptcy. With the U.S. likely heading for another recession and credit card debt at a record $870 billion, millions more Americans could end up struggling with mountains of debt than they would otherwise had Biden not fought so hard to strip them of bankruptcy protection.” • Thanks, Joe. Well worth a read!

Buttigieg (D)(1): “Citizens demand police tapes’ release” [WNDU]. “Some people in South Bend continue to demand the release of the police tapes that resulted in the demotion of the city’s first African American police chief…. ‘This is beyond a travesty of justice. This is beyond a simple crisis of credibility of the mayor. This goes to the heart of the fabric of American justice,’ Pastor Mario Sims said. The mayor’s office has refused to release the tapes, alleging they were illegally recorded…. Last week, 16 News Now reported the South Bend Common Council met behind closed doors to discuss whether or not they should go forth with the seven-year lawsuit over the tapes being released publicly…. On Monday, Mark Bode, spokesman for Mayor Buttigieg’s office, said, ‘Right now, the tapes are under court order, and we are awaiting the judge’s decision.’” • Not gonna help in South Carolina. With any age group.

Gabbard (D)(1): “All in the Family: The American Sangh’s affair with Tulsi Gabbard” [Caravan]. “Gabbard’s rise in US politics came out of nowhere, and is inexplicable until one considers how Sangh donations gave her a leg up when she was a virtual unknown. The first Indian-American donors to her first congressional campaign—who were also among the first non-Hawaiians to support her—are top executives in RSS affiliates in the United States. Donor names provided in filings to the Federal Election Commission, which I collated with lists from Sangh websites and promotional materials as well as media reports, reveal that hundreds of leaders and members of such groups gave hundreds of thousands of dollars to Gabbard in the formative years of her congressional career.” • RSS = “Rashtriya Swayamsevak Sangh—the parent organisation of India’s ruling Bharatiya Janata Party.” • I don’t know if “inexplicable” is fair, because Gabbard is talented. Dunno about the BJP, though.

Sanders (D)(1): “Sanders endorsed by Tlaib at Detroit rally knocking corporate greed” [Michigan Advance]. Tlaib: “We deserve a president who understands that the corporate assault on our lives existed before Trump, and it will exist after Trump. Someone who will never back down from a fight with the wealthy and the powerful, who will call them out and will bring our movement to their front yards. Someone who looks at a problem and finds the most transformative solutions, who isn’t constrained by the corporate conventional wisdom of what’s possible or worth fighting for. … We deserve someone who writes the damn bills. We deserve Bernie Sanders.”

UDPATE Sanders (D)(2): Campaign video:

(I’m very happy with the trend to have closed captioning on videos, because that way I don’t have to turn up the sound). Interesting because Sanders doing two things at once: Working to convert age into an asset, but more importantly, because starting to draw distinctions (albeit implicitly). “The ideas that I am talking to you tonight about, they didn’t come to me yesterday…. These are ideas that I have fought for my entire life.”

Pollsters

Latest NH poll (and it’s just one poll):

“A mess.” Now, why would you say that, Harry? About your own poll?

Our Famously Free Press

UPDATE Expect the unexpected:

RussiaGate

UPDATE “Uncovering Russiagate’s Origins Could Prevent Future Scandals” [Aaron Maté, The Nation]. “There is no doubt that Donald Trump would like to exact political revenge on those behind the Russia probe, and it is fair to be skeptical of his Department of Justice. But it would be a mistake to reflexively dismiss the inquiry, which is led by US Attorney John Durham and overseen by Attorney General William Barr. The public deserves an accounting of what occurred. And given the intrusion of the nation’s intelligence’s services into domestic politics, a failure to learn lessons and enact safeguards could leave future candidates, especially on the left, vulnerable to similar investigations…. And even with this all-consuming investigation now over, we still do not have a firm understanding of how it began.” • A lonely voice of reason.

Impeachment

UPDATE “Nancy Pelosi still doesn’t believe in impeachment” [The Week]. “The problem with [Pelosi’s] strategy of impeachment in name only is that it is formally unstructured. What Pelosi and most of the Democratic leadership understand as a cynical political stalling tactic is understood by much of the party’s younger rank-and-file membership — to say nothing of the always credulous base — as a deathly serious mission to extirpate a tyrant from the republic. The vote now scheduled for Thursday does not change the reality on the ground. According to the letter Pelosi addressed to Democrats on Monday, the resolution — the text of which has yet to appear — will be formal rather than substantive. Procedures will be established, a framework agreed upon, documents requested. It will not bring the party closer to impeachment itself. But it will remove a few more crucial pegs from the Jenga tower that will inevitably fall at some point between now and November 2020 — the hypothetical moment when refusing to proceed further could actually threaten her leadership… It turns out that if you want to enjoy all the political benefits of attempting to impeach the president of the United States, sooner or later you actually have to attempt to impeach him. Imagine that.”

UPDATE “Republicans eye a shift in impeachment strategy as Trump demands new attacks” [Politico]. “There is a growing desire among Republicans to start building a more merit-based case to defend Trump in the Ukraine scandal, according to a source familiar with the GOP’s thinking… Republicans, however, still think they are on solid ground when it comes to their process argument and aren’t ready to drop that crusade entirely… Trump’s public defense will be left in the hands of the nine Republicans on the House Intelligence Committee — the fewest number of GOP lawmakers to push back against the impeachment inquiry.”

Realignment and Legitimacy

“Romney, Manchin want new rescue committees to address trust fund solvency” [Roll Call]. “Sen. Mitt Romney is leading a new bipartisan effort to try to force lawmakers to come together to address looming funding shortfalls in several government trust funds. In a draft bill shared first with CQ Roll Call, a bipartisan contingent led by the Utah Republican wants to establish “Rescue Committees” to write legislation providing 75 years of solvency for trust funds identified in a report to Congress from the Treasury Department. Examples of funds that would likely qualify include Social Security and the Highway Trust Fund. Backing the effort in the Senate are three of the most moderate members of the Democratic caucus: Sens. Joe Manchin III of West Virginia, Kyrsten Sinema of Arizona and Doug Jones of Alabama, along with Republican Sen. Todd Young of Indiana.” • Awesome. Sanders, with Kelton as his advisor, had the opportunity to loosen the grip of “pay for” on the throat of the Federal Government, and didn’t. Warren not only hasn’t, she’s strengthening it, by developing a “tax plan” for #MedicareForAll. And here come the “moderates,” putting the Grand Bargain back into play!

UPDATE “The new Democratic senator irritating the left and delighting the GOP” [Politico]. “[]ith her party fixated on beating both McSally and Trump in Arizona, Sinema’s endorsement or even guidance for candidates about how to win there could be key. But that’s not something she’s interested in, either. She even said it’s ‘premature’ to commit to supporting her own party’s nominee at this point and indicated it could be months before she tunes into a debate. ‘Eventually it would be wonderful to have a candidate that shares the values of the majority of Americans,’ Sinema said cryptically. ‘Let’s winnow the field below like, 20 or something, and then maybe it gets easier. Like, when it’s enough for two basketball teams, it’s too much.’” • Vote Blue no matter who!

UPDATE “The Border Between Red and Blue America” [New York Times]. “Suburbia should not be considered a distinct entity, but two separate realms. The difference between inner-ring and outer-ring suburbs goes well beyond geography…. [R]e-examining the 2016 presidential election through that lens, we found that the fault line in party preference was precisely at the boundary between old and new…. We called less-dense suburbs ‘outer ring,’ and denser suburbs ‘inner ring.’ … And the inner ring is more likely to support Democratic candidates; the outer more likely to vote Republican. Our analysis jibes with what some others have pointed out, there is a relationship between density and political preference. ‘Majorities tend to flip from blue to red roughly where commuter suburbs give way to ‘exurban’ sprawl,’ wrote Will Wilkinson, a researcher at the libertarian Niskanen Center, in a recent report. ‘That’s where the political boundary of the density divide is drawn.’” • Hmm. Different granularity from county-level data.

UPDATE “The Market for Voting Machines Is Broken. This Company Has Thrived in It” [Pro Publica]. “ES&S — based in Omaha, Nebraska, and employing roughly 500 people — controls around 50% of the country’s election system market, the company says, meaning that some 70 million Americans vote using the company’s equipment… ES&S’ lawsuits and threats of lawsuits have helped delay or thwart progress toward better voting technology even when the litigation is unsuccessful, more than two dozen election officials and voting technology experts said in interviews…. ES&S’ lawsuits and threats of lawsuits have helped delay or thwart progress toward better voting technology even when the litigation is unsuccessful, more than two dozen election officials and voting technology experts said in interviews.” • Private equity. Of course.

Stats Watch

Consumer Confidence, October 2019: “For a second straight month, limited erosion in the consumer’s assessment of the labor market held down the Conference Board’s index” [Econoday]. “Those saying jobs currently are hard to get rose …. in a closely watched reading, however, that is offset by a …. rise in those saying jobs are plentiful, now at 46.9 percent. Yet the outlook for jobs is clearly down, though only modestly… In yet another mixed signal, expectations for future income, which are largely based on job prospects as well as the outlook for the stock market, held solid… Business conditions are described as favorable to flat, both now and in the future… Today’s report is more mixed than unfavorable.”

S&P Corelogic Case-Shiller Home Price Index, August 2019: “Home prices failed to improve in August, showing disappointing results” [Econoday]. “These two reports offer definitive data but they do lag, and other indications on home prices have recently been picking up. Nevertheless, August’s Case-Shiller and FHFA results are a reminder that sales of existing homes, though improving from last year, have been struggling to move higher.”

Pending Home Sales Index, September 2019: “[A] sharp and better-than-expected” rise [Econoday].

Real Estate: “A multibillion-dollar space race is under way in the warehouse market. Real-estate heavyweight Prologis Inc. is raising the stakes with its $12.6 billion acquisition of Liberty Property Trust and its 107 million square feet of logistics space…. capping a series of buys that come as private-equity firm Blackstone Group is pushing into the market” [Wall Street Journal]. “The buy will push Prologis past the 800 million square feet of warehouse space Blackstone holds. The scale suggests the companies may be looking to offer customers bigger agreements that stretch across different regional markets involving multiple warehouses. Reports show the U.S. logistics real-estate market remains tight after several years of high demand driven by e-commerce growth, with a growing premium on more expensive real estate close to population centers. It turns out that the more consumers go online, the more demand there is for physical warehouse space.” • I imagine the next step will be to turn the warehouses back into brick-and-mortar stores.

Manufacturing: “Lawmaker blames investors for Boeing’s race to sell troubled 737 Max: ‘This all starts on Wall Street’” [CNBC]. “Investors pressured Boeing to quickly build its fuel-efficient 737 Max planes to top European rival Airbus, a key lawmaker said before the manufacturer’s CEO appears before Congress on two fatal crashes of the beleaguered planes. ‘This all starts on Wall Street,’ Rep. Peter DeFazio, an Oregon Democrat and chair of the House Committee on Transportation and Infrastructure.”

Manufacturing: “‘Why Is This Airplane Still Flying?’ The FAA Missteps That Kept Boeing’s MAX Aloft” [Wall Street Journal]. “Just after a Boeing Co. 737 MAX jet crashed in Indonesia a year ago, FAA officials asked themselves: Should they warn the world the entire fleet could have a design flaw? A Federal Aviation Administration analysis showed a good chance the same malfunction would crop up again, according to agency officials and people briefed on the results. Even under the most optimistic scenario, the agency’s statistical models projected a high likelihood of a similar emergency within roughly a year.” • Very good reporting from the WSJ, well worth a read.

Manufacturing: “FAA admin. on Boeing 737 Max: We’re still deciding ‘when, whether’ plane will fly again” [Steve Dickson, USA Today]. “The FAA is fully committed to address all of the recommendations raised by investigators, including those that pertain to when, whether or how the 737 Max will return to service. As we have said repeatedly, the aircraft will fly only after we determine it is safe.” • Dickson is the administrator of the FAA.

Manufacturing: “Congress is accountable in Boeing MAX crisis, too” [Leeham News & Analysis]. “Year after year after year, Congress does not properly fund the FAA in order for it to do its work. It doesn’t give the FAA the money or the human resources or expertise to do its work.” • Correct!

Manufacturing: “I’m not Boeing anywhere near that: Coder whizz heads off jumbo-sized maintenance snafu” [The Register]. Really a tech doc war story about the 747: “After about 30 pages I reached a page where my Windows app showed more data than the RS6000 app. I had two extra diagrams and an extra paragraph of text. Clicking through the thousands of pages I found more places where my app showed extra diagrams and text.” • Hoo boy. The culprit: “‘After a few days of debugging,’ Pete told us, ‘it turned out [to be] an optimisation bug in the IBM C compiler used on the RS6000. It was overwriting registers that were being used to store local C variables when the call stack got too deep.’ Thus not all the text and diagrams were being displayed.” • BWA-HA-HA-HA! Premature optimization is the root of all evil.

Supply Chain: “There may be a national dish soap shortage, but it’s hard to tell until someone comes clean. Retailer Walmart Inc. recently posted signs in many of its stores warning that it faces a “national supply shortage” of the products even though shelves were fully stocked” [Wall Street Journal]. “The warnings came after Procter & Gamble Co. said it hadn’t made enough Dawn and Gain dish soap. That’s led to confusion in store aisles since rival retailers say they have plenty of soap on hand, highlighting how supply chains hiccups can affect the fiercely competitive consumer goods sector. Walmart is a larger seller of P&G products than any other retailer, so any supply shortages could hit the company harder. Walmart also strains to keep inventories tight to operate more efficiently, which can also leave its stores more exposed to supply chain disruptions.”

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Today’s Fear & Greed Index: 72 Greed (previous close: 67, Greed) [CNN]. One week ago: 59 (Greed). (0 is Extreme Fear; 100 is Extreme Greed). Last updated Oct 29 at 12:41pm.

The Biosphere

UPDATE I am here for species richness:

UPDATE “New York Doesn’t Need a Smoking Gun to Win the Exxon Climate Trial” [Bloomberg]. “The trial of New York’s $1.6 billion securities-fraud lawsuit against Exxon Mobil begins its second week Monday, after a series of witnesses failed to provide any concrete evidence that the oil giant knowingly misled shareholders about its climate change accounting… [U]nder New York law, how things look to shareholders—rather than what Exxon intended—may be what decides the case…. ‘This is precisely why New York is pursuing Exxon under the Martin Act,’ said James Fanto, a professor at Brooklyn Law School. ‘New York could prevail if it showed that Exxon’s disclosure had a kind of fraudulent effect in misleading shareholders.’”

Class Warfare

“A Union Is an Equalization of Power” [Portside]. “When US workers try to unionize, roughly a third of their employers engage in retaliatory firings. A union organizer today has a one-in-five to one-in-seven chance of losing their job while trying to secure the ability to bargain collectively.”

“Getty fire: Housekeepers and gardeners go to work despite the flames” [Los Angeles Times]. “Carmen Solano didn’t know a brush fire had erupted Monday near the neighborhood where she worked. She simply left at 6 a.m. for her job cleaning a house on a street of multimillion-dollar homes. Carrying a red backpack filled with tortillas, bananas, water and her lunch, Solano arrived at the North Robinwood Drive home in a taxi shared with other housekeepers. ‘There’s a lot of smoke,’ the driver said, as he dropped off the Guatemalan immigrant in the choking ash of the Getty fire. Normally, Solano works at the home on Wednesday, but the owner had asked her to come Monday. Dressed in a pink sweater and pink sweatpants, she rang the doorbell over and over. No response. By her feet, a jack-o’-lantern grinned. As she waited at the front door, she realized she’d either left her phone on her dresser at home or in the taxi. Solano was stranded. Ash rained down, speckling her braided hair white.” • Not that her employers could have called her, before they left their multimillion-dollar home.

“Uber, Lyft, DoorDash launch a $90-million fight against California labor law” [Los Angeles Times]. “[A] trio of Silicon Valley sharing-economy companies on Tuesday unveiled a ballot measure to exclude many of those they pay for work from being considered benefits-earning employees. The proposal, which Uber, Lyft and DoorDash intend to qualify for the statewide ballot next November, states that an ‘app-based driver is an independent contractor’ as long as a series of conditions are met by a company. The initiative says drivers will be guaranteed a minimum amount of pay as well as insurance to cover work-related injuries and auto accidents. And it lays out details for healthcare subsidies, protections against on-the-job harassment or discrimination and a system to enforce some workplace rights.” • Uh huh. No problem at all, having Silicon Valley goons write labor legislation.

News of the Wired

“You can buy a piece of Steve Jobs’ turtleneck — in an iPhone” [New York Post]. • Holy relics, ffs.

“The 2010s Broke Our Sense Of Time” [Buzzfeed]. “In the 20 months between Hillary Clinton’s campaign announcement and Trump’s inauguration, everything from Apple Music to HBO Now to Apple News launched or relaunched; the Amazon Echo, Google Home, and Apple Watch hit the full market; publishers established the current form and tone of the news push alerts that you receive; Facebook launched a livestreaming function and then deprioritized the function when people aired violence; Instagram launched the ephemeral, inexhaustive stories, so you can share — as they put it — “everything in between” the moments you care about; Twitter introduced the quote-tweet option, which formalized and democratized a function from the earlier days of Twitter, and transformed every Trump tweet into an opportunity for commentary.” • The method for restoring one’s sense of linear time, therefore, is to avoid Apple Music, Apple News, Apple Watch, HBO, Amazon Echo, Google Home, Facebook, and Instagram. Turn off all push alerts. Which I have done. Oh, and make sure your Twitter feed, if you have one, is set to “Latest Tweets Appear as They Happen,” which turns of the algo. Easy peasy.

“The ethics of algorithms: Mapping the debate” [Big Data and Society]. “Determining the potential and actual ethical impact of an algorithm is difficult for many reasons. Identifying the influence of human subjectivity in algorithm design and configuration often requires investigation of long-term, multi-user development processes. Even with sufficient resources, problems and underlying values will often not be apparent until a problematic use case arises. Learning algorithms, often quoted as the ‘future’ of algorithms and analytics (Tutt, 2016), introduce uncertainty over how and why decisions are made due to their capacity to tweak operational parameters and decision-making rules ‘in the wild’ (Burrell, 2016). Determining whether a particular problematic decision is merely a one-off ‘bug’ or evidence of a systemic failure or bias may be impossible (or at least highly difficult) with poorly interpretable and predictable learning algorithms. Such challenges are set to grow, as algorithms increase in complexity and interact with each other’s outputs to take decisions (Tutt, 2016). The resulting gap between the design and operation of algorithms and our understanding of their ethical implications can have severe consequences affecting individuals, groups and whole segments of a society.” • Butlerian Jihaad getting more attractive all the time…

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Readers, feel free to contact me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, with (a) links, and even better (b) sources I should curate regularly, (c) how to send me a check if you are allergic to PayPal, and (d) to find out how to send me images of plants. Vegetables are fine! Fungi and coral are deemed to be honorary plants! If you want your handle to appear as a credit, please place it at the start of your mail in parentheses: (thus). Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (TH):

Th writes: “Wish my garden looked like the Fullerton Arboretum. (Except for the bush that looks like it’s wearing sunglasses—what’s going on there? Kind of creepy).”

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