Bit Player

November 19, 2017

“When people who have nothing to do with finance ask that sort of question [about an asset class], normally that market will get into trouble within a few months.  According to knowledge from my experience, it is a very important signal.”

Katsunori Sago, speaking about Bitcoin

SouthSea_House_1754

Over the course of his career, Sago-san has developed the ability to discern this particular type of signal among the deafening white noise of mass-market disinformation because the tumescent bitcoin bubble is deja vu all over again.  Here’s why: the usual suspects have very few actual arrows in their quiver of capital accumulation techniques, so the most efficient method of accelerating the cash conversion cycle is one that gets used over and over and over again.  It’s called pump-and-dump (or ‘asset inflation’ if you’re talking with the white-shoe set), and since there’s a sucker born every minute or so, the key to success is applying this well-honed technique to a financial asset that hasn’t previously existed in the sucker’s (brief) lifetime.  Tulip bulb futures.  South Sea commerce.  Railway construction bonds. Mineral exploration equities.  Internet services.  Collateralized debt obligations.  Blockchain cryptocurrencies.

All of these assets actually exist (or did at one time), but were –or are– incorrectly valued in the market.  Erroneous valuation is based on erroneous, low-quality information.  Therefore, fraudulent (or overly-enthusiastic) ‘information’ about current and future asset value is the core technology of asset inflation operations, just as it is of political discourse.  Reduced to the simplest terms, market bubbles are thus primarily a function of information quality, and the lesson we should have learned long ago is that the global information-production industry has significant quality-control problems.

This should not be surprising.  The Herman-Chomsky propaganda model of (advertiser-supported) journalism asserts that the structure and business plans of information-production enterprises rely on arousing and maintaining the interest of a sizeable audience which will be provided with commercial advertising in addition to the information about social developments that they hope to learn from their news provider.  In this environment, novelty and immediacy become the dominant dimensions of information ‘quality’ while other dimensions such as accuracy, precision, lack of bias, and objectivity are correspondingly de-emphasized.  As you have surely learned in the past twelve months.

So if you don’t want to heed Sago-san’s warning, perhaps you’d prefer to hear the sad truth from Herr Beckert.  He has a refreshing perspective on the role of fictional narratives in shaping ‘rational’ market behavior.

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Bradley Tanks

October 11, 2017

“The reality is that it was all there for us and we have nobody to blame but ourselves.”
US captain Michael Bradley

Speak for yourself, Cap’n America.  As far as I’m concerned, Team USA’s elimination from 2018 World Cup qualification is cosmic payback for Bradley’s role in sabotaging former coach Jurgen Klinsmann during the 2016 Copa De Oro and last year’s early World Cup qualification stages.  Anyone who watched those matches without rose-colored glasses would have seen that Bradley did his best to give those games away, and succeeded.  Was he –is he– trying to win back the head coach’s job for daddy Bob Bradley?

Can Team USA hope to win when its “leader” is working for the other side to feather his own nest?  In case you’re wondering, that’s a metaphorical question.

Xu Drop

September 12, 2017

“Although it has involved [a series of] disturbing events, the North Korean “crisis” of recent months is largely an invented one.”

“In light of the undeniable reality of mutual [nuclear] deterrence, the North Korean “crisis” of 2017 can most accurately be seen as a media puppet show put on by Chairman Kim and President Trump for their own public relations purposes.”

“[Analysts] say there is no definitive, publicly available proof that North Korea has a missile with the range to strike the continental United States, a miniaturized nuclear warhead to mount on it, and the shielding technology to make sure the warhead survives the heat and pressure of reentry to the atmosphere.”

“The North Korean situation might begin to [move toward] difficult diplomacy [and] an acceptable resolution if journalists downplayed the Chairman Kim-President Trump Puppet Show and focused on reality: North Korea is a tiny, impoverished country that would be instantly vaporized if it ever launched a serious attack on the United States.”

John Mecklin is the editor in chief of the Bulletin of the Atomic Scientists. Reuters News Service thinks him sufficiently credible to give his op-ed piece a relatively prominent place on its September 12 webpage.

 

In contrast, Lunghu is a wild-eyed conspiracy theorist (well, maybe not) considered credible by a relatively small number of people who believe that past performance might be a possible indicator of occasional insight.  The fact that Mr. Mecklin makes several of the same points advanced by Lunghu in an August blogpost should not be used by skeptical readers to disparage either writer.  Lunghu is unconstrained by institutional responsibilities and obligations that discourage venturesome speculation or insolent provocation: Editor Mecklin is not.  Thus there’s a limit to what he can say in public, and there’s a limit to what Reuters will publish.  Will Reuters‘ editors learn to read between the lines as well?

Governors’ Balls

August 30, 2017

It is impossible to say whether or not the feeling which had awakened in our hero’s heart was the feeling of love; for it is indeed doubtful whether men who are neither too fat nor too thin are capable of falling in love.  Nevertheless, something strange, something which he could not altogether explain, had come over him.  It seemed, as he admitted to himself afterward, as though the ball, with all its tumult and conversation, had suddenly faded away to become something quite remote –that the violins and woodwinds had moved behind some distant hill, and everything seemed covered with a mist, like the carelessly sketched-in background of a mediocre painting.  And out of this misty, roughly sketched background only the delicate features of the ravishing fair-haired girl emerged clearly: her rounded oval face, her slender, slender figure, which is so characteristic of young girls during the first months after they have left school, the simple white dress which so lightly and elegantly draped her graceful young limbs, accentuating the soft lines of her enchanting form.  Her exquisite shape was like a beautifully carved ivory toy, glowing white and translucent against the dull blur of the surrounding crowd.

It seems that things like that actually do happen.  It seems that even the Chichikovs of this world are for a few moments transformed into poets … but the word ‘poet’ is perhaps an exaggeration.

But here to our great regret we must observe that gentlemen of substance and high office are somehow a trifle ponderous in conversation with the ladies.  It is young lieutenants who are far more adept at the game –or, in any case, no officers above the rank of captain.  How they manage it only God knows.  They don’t seem to be saying anything particularly clever, but the young lady rocks and wriggles with laughter in her chair.

 

Perhaps it’s not surprising that Nikolai Gogol didn’t know the young lieutenants’ secret of success: the strictures of religious orthodoxy weighed upon him with a heavy hand.  But who knows, maybe he originally intended to save the really good stuff for Part II of Dead Souls.  Instead, foolish man, he burned the manuscript and starved himself into an early grave.

Since Gogol can’t tell you, I will: sparkling eyes and a playful tone communicate everything that patriarchal society insists be left unsaid.

 

Lee Shore

August 25, 2017

Elwood Dowd is the only one in town who can actually see Harvey, a Norse-Celtic púca spirit that takes the form of a (usually) invisible rabbit more than six feet tall. The two become inseparable friends … for a while.

Because Ding yin Fire [in the Year of the Fowl] is associated with the South direction, possible misfortunes are said to be more likely to occur in southern regions of the globe, a nation, or a large city.  Houston, do we have a problem?

Yes, yes we do.  Although the Fowl Month has only just begun, it’s already being rudely greeted by this year’s Rabbit foe, whose emblem back in the month of March was yin Water above yin Wood.  Get it?  Water over Wood?  Folks in Galveston certainly know what that means.

Actually, as of 1600 UTC, it currently appears that the region to the south of Houston –Port Aransas and Corpus Christi– will take the brunt of Hurricane Harvey’s feng and shui.  Perhaps Houston itself will be spared because of Governor Sam Houston‘s initial attitude toward secession in 1861:

Let me tell you what is coming. After the sacrifice of countless millions of treasure and hundreds of thousands of lives, you may win Southern independence if God be not against you, but I doubt it.  The North is determined to preserve this Union.  They are not a fiery, impulsive people as you are, for they live in colder climates.  But when they begin to move in a given direction, they move with the steady momentum and perseverance of a mighty avalanche; and they will overwhelm the South.”

Any Confederate monuments still standing are gonna be awash up to the fetlocks –or maybe the withers– by Saturday.

Future Confederate general Robert E. Lee, then still a colonel in the U.S. Army, was in San Antonio at the time [February 8, 1861] and when he heard the news of the surrender [of military stores being housed in the old Alamo mission] to Texas authorities, responded, “Has it come so soon as this?”

 

Thalassocracy

August 21, 2017

It’s probably just me: news that Liberian-flagged tanker Alnic MC is owned by a Greek company named Stealth Maritime Corporation immediately inspired thoughts of 21st century naval tactics like AIS-spoofing and Aegis cloaking rather than fond memories of three-banked oarsmen in Athenian triremes.

US Navy guided-missile destroyer USS John S. McCain collided with an oil tanker east of Singapore before dawn on Monday, tearing a hole below the waterline and causing significant damage to crew berthing, machinery, and communications rooms.  Ten sailors are missing and five injured. … Early indications [from photos of the damage] suggested that the warship may have turned across the bow of the tanker.

credit: Ahmad Masood

The USS McCain had carried out a freedom of navigation operation in the South China Sea earlier this month, coming within 12 nautical miles of an artificial island built by China [atop a low-lying coral reef in waters also claimed by Vietnam and the Philippines].

Upon mature but superficial reflection, I’ve compiled four provisional hypotheses to “explain” the unexpected recurrence of this sealane collision between a US Navy destroyer and a (much larger) merchant vessel.  Take your pick:

  • a) sheer incompetence and dereliction of duty on the part of U.S. Navy watchstanders in the McCain.
  • b) hacked navigation systems onboard the Fitzgerald and McCain, compromised by those fiendishly clever cyber-warriors of the People’s Liberation Navy.
  • c) feng-shui retribution decreed by Tai Sui, the Duke of Heaven, for disturbing the chi of the southern region during the Year of the Fowl (a resident of the South).
  • d) a brazen scheme by Seventh Fleet commanders to steer the (multi-million-dollar) repair work to whichever Malaysian defense contractor is now filling Fat Leonard‘s size 13 shoes.

Unfortunately, the U.S. military has problems you can’t fix by hurling money.  As they say in Murmansk, “The fish rots from the head down.”  What do you see when you triangulate those coordinates?

 

Black Skies Matter

August 19, 2017

North America’s partially total solar eclipse isn’t due until Monday August 21st, but it seems as though our avian wildlife already knows what’s coming.  I say that because the birds in these here parts are already exhibiting anomalous behavior 48 hours in advance, on Saturday afternoon.  This despite the fact that it’s “officially” National Aviation Day. Here are some examples of bird behavior we don’t usually see (or hear) in my semi-rural environs:

  • total absence of spiraling vultures riding the thermal lifts in the high, wide skies overhead.  This despite the abundance of attractive roadkill deer carcasses littering the grassy margins of our picturesque country lanes … and the vultures aren’t on the ground snacking, either.
  • eerie quiet instead of the regular alarm calls of countless crows.  Occasional cheeps, chirps and tweets from other species hidden in the distant shrubbery, but not the usual cacaphonic conversation you can’t avoid hearing.
  • no visible feeding, and very little flying.  Airborne birds are taking very short-hop flights from tree to tree or shrub to thicket, but no longhaul excursions.  Yesterday evening, under a rainbow that formed in the wake of a slow-rolling storm front, flocks of swallows wheeled through the raindrops and flashed across the fields in golden, oblique sunbeams shining eastward from beneath the trailing clouds.  Not today.
  • more than four dozen mourning doves perched in a long row on roadside power line, facing west across several hundred acres of open fields.  Usually, that kind of a lineup would be an invitation to buffet lunch for the neighborhood red-tailed hawks, but they’re nowhere to be seen.
  • when I visited town earlier in the day, sparrows and pigeons that usually swarm along the main street to pick at lunch leftovers were instead flitting between the shrubs and trees one block to the south, annoying the jays and other usual inhabitants of the area.

Now that I’m once again paying closer attention to the non-human environment, I’ll continue to monitor animal behavior as the eclipse draws nearer.  Ordinarily, I’d only be interested in the effect of a new moon on women’s behavior.  I already know what effect it has on me.

Highwayman’s Hitch

As long as I’m talking about birds, I might as well go on record with an observation that occurred to me a couple of years ago, but which I haven’t previously published in explicit form:

Once you’re able to comprehend Alfred Hitchcock‘s “The Birds” as the tragi-comic pastiche of Sergei Eisenstein‘s “Battleship Potemkin” that it was intended to be, you’ll be in a position to evaluate the enduring influence of Ivor Montagu on Hitchcock’s cinematic oeuvre.

Understand?  Probably not.

Rarer Earth Metals

August 15, 2017

Carbon and iron are among the most commonly-occurring, non-gaseous elements on Earth –thus, effusive chemists might (with scant exaggeration) claim that our planet’s core and surface are largely composed of these two substances.  However, long before Mendeleev and Meyer thought of rearranging our whirling atomic chaos into serried tabular ranks, Taoist seers had divided all existence into five elemental categories: water, wood, fire, earth, metal.  Carbon (earth).  Iron (metal).  Carbon (coal).  Iron (ore).

China has announced that it will cut off imports of North Korean coal, iron ore, seafood and other goods in three weeks, under U.N. sanctions imposed over the North’s nuclear and missile programs.  The Chinese customs agency said Monday that it will stop processing imports of North Korean coal, iron and lead ores and fish at midnight on September 5.  A veteran trader based in Shandong who deals in coking coal and anthracite, and a Beijing-based iron ore trader with a company that handles North Korean iron ore, said the government stopped issuing permits to bring in iron ore several weeks ago.  Iron ore cargoes from North Korea are usually in concentrate form with relatively high iron content of 60-63 percent.

I like the timing of this announcement, coming as it does in the final week of the yang earth/yang metal Monkey Month.  Even better, the import ban goes into effect right in the middle of the yin earth/yin metal Fowl (Rooster) Month, just before the Full Corn Moon of September 6.  It’s probably no coincidence that this adjustment to Chinese trade policy will bring importation of elemental earth and metal feedstock commodities into closer harmony with the timeless rhythms of the celestial calendar.

From September 6 through September 20, the yin earth and yin metal energy of the Fowl Month will gradually transform into the yang metal/yang earth configuration of the Dog Month/October (essentially reversing the energy pattern of Monkey Month/August).  All the while, Tai Sui will be watching developments in the East from this year’s Western throne.  Nobody with any sense of the possible consequences will want to create a disturbance in the “self-penalty” Fowl Month.  Even when the official party line dismisses feng-shui as a feudal superstition, why take unnecessary risks with the people’s welfare at stake?

 

Red Glaring Era

August 12, 2017

Not so very long ago, just a few years back –when Kim Jong-il was Washington’s designated Yellow Peril boogeyman– a couple of American rocketry specialists proposed a novel and intriguing thesis … which they then backed up with data and analysis in an unclassified monograph.  Long story short, they asserted that North Korea lacked the scientific, technical and industrial infrastructure (as well as the money) required to design and manufacture the relatively sophisticated missiles then soaring off the sacred soil of the DPRK.

Curiously, however, these missiles exhibited all the operating characteristics (range, payload, telemetry, engine thrust, etc.) of hardware with which the American rocketeers were already quite familiar: Russian missiles.  And when Kim Jong-il paraded his missiles through the streets of Pyongyang on major holidays, whadda ya know, they looked an awful lot like Russian missiles too.  Not top-tier stuff; second-class, older-model Russian rockets.

Golly, how can this be?  Were these Korean missiles carefully copied exact clones?  Uh … probably not, for the reasons noted above.  Instead, concluded our intrepid aeronautical engineers, it was much more likely that Kim Jong-il was sourcing his hardware inventory in off-the-shelf, plug-and-play, launchpad-ready condition from (cue the gasps of surprise and dismay) Comrade Bear.  That’s right, Bad Vlad hisseff.  Now, of course, as former employees of –and current consultants to– the United States military-industrial complex, these analysts didn’t come right out and accuse democratically elected officials of the Russian Federation of violating UN sanctions and the rules of fair play.  Such forthright candor would have been undiplomatic and downright unseemly.  But they took pains to point out that medium-range missiles are generally considered a closely-guarded defense technology and are very rarely known to cross international borders unassisted.

Then, just for fun, the analysts built a timeline of Kim Jong-il’s nuclear tests and missile launches … cross-referenced with a chronology of Russian foreign policy initiatives.  Should we be surprised that they found repeated instances in which tensions between Russia and the United States or Japan were promptly followed by bellicose posturing from Pyongyang?  This pattern suggested the possibility that North Korean weapons tests were in some cases “commissioned” by Russia, with the requisite materiel furnished on an as-needed basis.  When Comrade Bear wanted to twist the trousers of the US, South Korea or Japan, Kim Jong-il was exactly the right man for the job.

So, was this –is this– at all a credible thesis?  Those who might know ain’t talkin’ ’bout it in public.  Nobody’s even botherin’ to ridicule the possibility, fer cryin’ out loud.  What might we infer from that?

That was then, this is now

Here we are in the Year of the Fowl and it’s déjà vu all over again.  Seems that those who don’t care to know recent history are only too happy to repeat it.  Kim Jong-un suddenly starts launching missiles that (allegedly) have intercontinental capability, and Chicken Little promptly notices that the sky is falling.  How convenient.

It’s not surprising that Donald Trump has seized this marvelous opportunity for saber-rattling with both tiny hands: he desperately needs an excuse to deflect public discourse away from his amply-demonstrated ignorance, incompetence and venality.  To that end, his overheated rhetoric is furiously furnishing further fuel for the waning yin fire that still lingers from the Sheep Month.  Not to worry (too much): it’s all part of the script for Trump’s latest “reality” television series.  The plotlines were laid out over dessert at G20, and almost everyone (even you) is playing their appointed roles.  We haven’t yet seen the credits roll, but in reality TV, the screenwriter’s name never appears. How convenient.

It should be pretty obvious what the donald might hope to gain from edging to the brink of his own splendid little war, but perhaps some readers may find it less clear what Putin gets out of this artful deal.  Here ya go:

Comrade Bear benefits from 2017’s DPRK Monkey Month antics in at least 4 ways:

  • a manufactured war crisis diverts U.S. media attention away from the Mueller investigation of Russia-Trump collusion.  A helping hand extended to his fellow Gazprom shareholder?
  • payback for U.S. Senate sanctions against Russia’s siloviki kleptocracy.
  • a wedge into the joints of America’s North Asia alliances with Japan and South Korea: each nation has different interests at stake.
  • the usual suspect, China, gets all the Confucian blame for the misbehavior of Number One Son Kim Jong-un … while sly Comrade Bear basks in the sun at a lakeside dacha.  He’s not actually relaxing.

In these circumstances, what would Marshal Shaposhnikov suggest?  Perhaps a peek at the Vostochny cosmodrome might provide an answer.

 

Eggs-actly

August 9, 2017

Self-penalty appears to have arrived a little early (at least in Europe) during the Year of the Fowl, manifesting in the eighth Gregorian month rather than waiting for the eighth (rooster) month of the luni-solar calendar.  To what does Lunghu refer?  Merely this: back in January, my half-assed feng shui predictions explicitly foretold problems for the poultry industry in 2017.  The specific verbiage was …

The Fowl’s self-penalty can be expected to cause bottom-line problems for major corporations that use a Fowl image as part of their logo … or operate in the poultry business.

However, in the spirit of “America First,” I had been thinking primarily about the potential threat to industrial poultry production in the United States rather than what might befall our plucky and gallant NATO allies on the front lines of a global food security battleground.  But of course, before there was a chicken there had to be an egg:

Dutch authorities have ordered eggs pulled from supermarket shelves, have temporarily closed 138 poultry farms and may cull millions of chickens [because] the presence of a potentially harmful insecticide —fipronil— has been detected in Dutch eggs.  Supermarkets in Germany, Belgium, Sweden and Switzerland have since pulled millions of eggs from their shelves.  The scare has hit major egg exporter the Netherlands the hardest, where the scandal erupted on August 1.

Fipronil is commonly used in veterinary products to get rid of fleas, lice and ticks. It is banned from being used to treat animals destined for human consumption.  The problem [has been traced to] a substance used by a Dutch company, Chickfriend, that farmers in the Netherlands and Belgium hired to treat their chickens.  The French government says a Belgian company mixed fipronil with a [treatment approved for poultry use].  The Belgian company, Poultry-Vision, says the firm sold a shipment to Chickfriend but has not said where it got the substance.

It would be very distressing to learn that Poultry-Vision sourced its inventory through alibaba.com or yandex.market because then we’d have to consider the hypothesis that Lunghu’s January “prediction” was less an unlucky coincidence than the roadmap to a self-fulfilling prophecy, one engineered by certain folks intent on corroding the bonds of social trust which hold the EU more-or-less together.  On the other hand, this chicken-or-egg conundrum may merely be the result of inexorable “market forces” that take the form of race-to-the-bottom corner-cutting practices in a cutthroat capitalist environment.  Either way, the fowl’s self-penalty is just beginning: the lunar Rooster month won’t fully arrive until the Full Corn Moon on September 6th.  I haven’t even begun to think about what the combination of yin earth over yin metal might mean in a yin Fire year, but it probably won’t be good.

R.I.P. Mynheer Bosch