|<<>>|32 of 45 Show listMobile Mode

Links and Notes for February 5th, 2021

Published by marco on

Below are links to articles, highlighted passages[1], and occasional annotations[2] for the week ending on the date in the title, enriching the raw data from Instapaper Likes and Twitter. They are intentionally succinct, else they’d be articles and probably end up in the gigantic backlog of unpublished drafts. YMMV.

[1] Emphases are added, unless otherwise noted.
[2] Annotations are only lightly edited.


Dr. Michael Osterholm warns of massive spring surge of coronavirus in the US

““The surge that is likely to occur with this new variant from England is going to happen in the next six to 14 weeks. If we see that happen, we are going to see something that we have not seen yet in this country. Imagine,” he said, “you and I are sitting on a beach with blue skies and it’s 70 degrees. But I see a category five hurricane or higher 450 miles offshore. Telling people to evacuate on that nice blue-sky day is going to be hard. But I can also tell you that hurricane is coming.””
“Dr. Leana Wen, a public health professor at George Washington University, told the Financial Times, “The Biden administration said it inherited no national distribution strategy, but if that is the case, how did we get to 1 million vaccinations a day, and why are we still targeting that number? We should be aiming for at least 2 million doses a day, if not 3 million.””

”I Am Quite Apprehensive about What Might Otherwise Happen in Spring and Summer” (Der Spiegel) (original German: »Ich habe schlimme Befürchtungen, was sonst im Frühjahr und Sommer passieren könnte« by Rafaela von Bredow and Veronika Hackenbroch, interviewing Christian Drosten)

“[…] we don’t know what curves are coming up and whether the road is suddenly about to get steeper. We also don’t know how far we still have to go, but we do know that we absolutely have to avoid missing a corner. In a situation like this, closing our eyes doesn’t help. We have to keep going and do one thing in particular: Hit the brakes, even if they might be rusty.
“The fact that we had such a relaxed summer in 2020 likely had to do with the fact that our case numbers remained below a critical threshold in the spring. But that’s not the case any longer. I am afraid that it will be more like in Spain, where case numbers climbed rapidly again after the lockdown was lifted, even though it was quite hot. In South Africa, too, where it is currently summer, case numbers are at a high level.”
“Antibodies are just one component of immune protection, another is T-cell immunity. That protects much more strongly against a serious progression of the illness. If the virus mutates, it doesn’t have an effect on T-cell immunity. As such, I don’t think that we have to fear that our vaccines will be ineffective.
“Let me be extremely clear about that: According to what I have heard, the infection mortality rate in Germany – meaning the percent of SARS-CoV-2 infections that result in death in Germany – is likely over 1.1 percent. That is more than 10 times higher than the flu.
“I would not have considered it likely that children would be spared by SARS-CoV-2. From a purely biological perspective, the mucous membrane doesn’t change all that much during puberty. Which means that children can also get infected – and be contagious. That so many doubts about that fact have arisen was always, and still is, confusing to me.”

Should People Who Want to Save the World from the Pandemic Be Demanding We Pay China to Produce Billions of Vaccine Doses? by Dean Baker (CEPR)

“Given the urgency in getting people vaccinated, it seems we should be paying these Chinese manufacturers to ramp up production as quickly as possible. One of the Chinese manufacturers contracted with Brazil to sell its vaccine at a bit more than $2 a dose. Suppose we needed 10 billion doses to vaccinate 5 billion people in the developing world. That would come to $20 billion. That is chump change compared to the trillions of dollars of lost output suffered by the U.S., Europe, and the rest of the world as a result of the pandemic. That is in addition to the millions of lives.

“The bottom line is that we need to get people throughout the world vaccinated as quickly as possible. If our manufacturers are not up to the task, we should pay China or anyone else who is. Given the relative cost and benefits, this really should not be a hard call.”

Finance & Economy

This snippet from The Other Guys with annotations explains everything in a nutshell.

*Diamond Hands*

GameStop Stock Game Got Stomped by Matt Levine (Bloomberg)

“[…] maybe a lot of the move in GameStop’s price was not caused by retail traders on Robinhood and Reddit, but by professionals, hedge funds and proprietary trading firms and professional day-trading shops. When retail buying was shut down, other buying continued.
“Retail investors were net buyers on Monday but net sellers for the rest of the week (through yesterday), and all in all quite balanced: About 49.8% of retail orders (that Citadel Securities saw) were to buy, and 50.2% were to sell.
“Those other retail investors could be normal people who bought 100 shares of GameStop in 2005, forgot about them, and then remembered and sold them into this rally, or they could be Reddit posters who got in early, pumped the stock on WallStreetBets, and then happily got out as more people piled in to buy.
“Still I think this complicates the popular story of “everyone on Robinhood was buying GameStock at once, and none of them were selling, so the stock went up in a demonstration of the power of small-time traders to take on Wall Street.””
“The rise of Robinhood-y meme stocks, it seemed to me, changed that dynamic. If everyone on Robinhood decides all at once to buy Tesla Inc. stock, and Tesla shoots up, then the wholesaler on the other side of that trade is getting run over. It’s selling Tesla at $700 and $750 and $800 and $850, selling more and more at higher prices without ever being able to buy back at lower prices from other retail investors who want to sell. No retail investor wants to sell; everyone on Robinhood wants to do the same thing at the same time. It seemed to me that Robinhood orders are now worse than orders from big mutual funds and hedge funds, more likely to move the price against the market maker who interacts with them. Why would anyone pay to be on the other side of that? But … nope? That stereotype of new-style Robinhood trading might just be wrong. Even in one of the wildest melt-ups in stock-market memory, the absolute epitome of insane one-way retail buying, actual retail order flow was pretty balanced. People were buying, people were selling, it was fine, you could still make money trading with them.
“One key consideration for brokers, particularly around high-flying and volatile stocks like GameStop, is in the money they must put up with the DTCC while waiting a few days for stock transactions to settle. Those outlays, which behave like margin in a brokerage account, can create a cash crunch on volatile days, say when GameStop falls from $483 to $112 like it did at one point during Thursday’s session. “It’s not really Robinhood doing nefarious stuff,” said Bloomberg Intelligence analyst Larry Tabb. “It’s the DTCC saying ‘This stuff is just too risky. We don’t trust that these guys have the cash to be able to withstand settling these things two days from now, because in two days, who knows what the price could be, it could be zero.’”
At least three brokerages said the trading restrictions stemmed from mandates from their clearing firm, which process the securities on the back end after a user executes a trade with their brokerage. Webull Chief Executive Anthony Denier said his platform’s clearing firm, Apex Clearing Corp., notified him Thursday morning that Webull needed to shut off the ability to open new positions in certain stocks. Otherwise, Apex wouldn’t be able to settle the trades, he said.”
DTCC, which operates the clearinghouses for U.S. stock and bond trades, is a key part of the plumbing of financial markets. Usually drawing little notice, it facilitates the movement of stocks and bonds among buyers and sellers and provides data and analytics services.”
“The volatility of those stocks is approaching infinity as their trading volume increases, so the traditionally mild and technical credit risk around settling trades has become real and scary. Brokerages have to put up more money to guarantee against that risk, and also think about ways to prevent the risk from coming true. “Stop buying super volatile stocks” is one obvious way.
“It is a hard business because you have to borrow the stock and post collateral and pay fees, and as the stock goes up you have to post more collateral and pay more fees: Even if you are right about a short bet, and the company ends up going to zero, if it goes up a lot first you might be forced out of your position and lose money.
“It seems to me that selling stock is as legitimate as buying it, that betting that prices will go down is as legitimate as betting that they’ll go up, that for prices to be accurate and capital allocation to be efficient you need to let skeptics express their opinions, and that anyway a lot of actual short selling is for helpful market-plumbing reasons (market making, hedging options, etc.) rather than big negative bets against companies.
“[…] you could require her to have the money in her account on Monday. You might not, though, if you wanted to aggressively compete for the business of active traders. Or you might, as Robinhood does, let her use the proceeds of a sale before the sale settles, increasing your own credit exposure.

How Will the GameStop Game Stop? by Matt Levine (Bloomberg)

If the redditors can hold on long enough, can they get GameStop added to the S&P? Can they turn it into a big company just by bidding the stock up? If they can, then S&P 500 index funds will be forced to buy it, no matter the price, and all the redditors who brought it here can get out at a profit. And they will have a big and permanent win, and also the current version of financial capitalism—the index-fund version—will collapse in absurdity. This is not likely just because the S&P is not purely based on market capitalization; for one thing, a company needs to have positive net income to be added to the index. GameStop doesn’t.
“Call options are a leveraged way to bet on the stock: You put in less money than if you’d bought the stock directly, but get similar upside. You also sharpen the problem of getting out. If you buy short-dated out-of-the-money call options on GameStop, and it stops going up, you don’t have to worry about finding someone to buy your stock: Your options will expire worthless and you’ll lose all your money. Call options are also a leveraged way to push the stock up: When you buy a call option, the market maker who sells you the option buys some of the underlying stock to hedge its exposure to you, and this pushes the stock up. And then if the stock goes up more, the market maker’s exposure gets bigger, and it buys even more stock.
“[…] no regulator or politician or economist or CEO—goes around saying, like, “the point of the stock market is to be really fun and exciting and let people mess with each other and make some of them super rich more or less at random.” The point of the stock market is to Enable Price Discovery or Encourage Capital Formation or something boring like that. Stock markets exist so that companies can raise money to fund their projects, and so that the smartest analysts of companies can work diligently and compete fiercely to put the proper value on those companies so that we as a society can know what projects are most valuable.”
“Financial markets exist to foster price discovery and capital formation, but the way they do that is mostly by letting smart people mess with each other all day. WallStreetBets is a new class of smart people messing, quite effectively, with the old ones.
“But I also think it is funny when some redditors blow up a short hedge fund for fun, and I don’t really think they should be banned or punished either. The redditors are playing an obvious silly game, in public, on Reddit, but the hedge funds are playing a game too, and they are grown-ups and know what they’re getting into.

A quick calculation of how a short position can turn really, really bad:

“Short sellers *already* sold the stock at $20 or $30 or whatever, when they established their positions; if you buy it at $300 and sell it to them at $1,000 at the end, and it crashes down to $30, then they really did eat the whole loss from $1,000 down to $30.”
“Strictly they sell as their delta—the theoretical hedge ratio for their options—goes down. Delta is sensitive to price (this sensitivity is “gamma”) but it can also move with, for instance, time to expiration. If you have a $100-strike call expiring in a week and the stock is at $150, your delta goes up each day even if the stock is flat (as it becomes more likely to finish in the money); if the stock is at $50, your delta goes down each day even if the stock is flat (as it becomes more likely to finish out of the money). If you’re buying short-dated out-of-the-money calls, you need the stock to go *up* for the gamma squeeze to keep helping you; if it stays flat, market makers will be selling stock and hurting you.”

GameStonk Rocket Rocket Rocket by Matt Levine (Bloomberg)

“I also think that approximately zero percent of the stock’s rise this week can be explained by fundamentals. There has been no news out of GameStop since Jan. 11, no indication that its turnaround strategy is working, or not working. This week’s action is all technicals and resentment and YOLO.
“What could they say? “Huh, nice that the stock’s up.” One important thing to remember is that while you and I and Reddit and Elon Musk can all treat GameStop’s stock as an absurd gambling token, a toy adrift on market sentiment far from any economic reality, it is still the stock of a company. The company’s executives still come to work each day and have to figure out what this all means.”
“Companies issue stock to fund projects, stocks go up because investors think companies have good projects to fund, companies use their stock price to recruit employees and pay for mergers and make decisions about what projects to pursue in the real world. I don’t know, I feel like a moron typing all of this. But I just have to type it! Think of how GameStop’s board must feel! The market is telling them something, but it is hard to hear what it’s saying through its maniacal laughter.
“Normally dealers selling the bullish options buy the underlying stock as a hedge. With enough volume – and there’s been plenty – that can drive the stocks higher, making the calls in-the-money.”
Lately the frenzied pace of boom and bust in these penny stocks has started to drown out all the other forms of speculative mania in the pandemic-era market. Call it another froth marker – retail traders beset with mass psychosis amid zero-commission fees and zero benchmark interest rates – to be filed alongside the GameStop Corp. saga, the three-fold rally in cryptocurrencies, the SPACs that are minted daily and the record highs being plumbed by major equity indexes. Cool. Stocks, what even are they.”
“The weird part is, you shouldn’t need to do both. Like either you bamboozle an unsophisticated client into doing some nasty derivative with you, because the client’s representative is too unsophisticated to know what is going on—or else the client representative knows exactly what is going on, but you overcome her objections by bribing her. If you have to bribe the client to do a trade with you, the client is probably sophisticated enough to know that the trade is bad? I guess it doesn’t actually work that way. Still feels a bit like overkill.”
“Basically what Satoshi had in mind. Also I collected baseball cards when I was a kid, and those don’t even have video. Paying money for ephemeral manufactured sports memorabilia based on artificial scarcity is an American tradition; now it’s on the blockchain.

The GameStop Game Never Stops by Matt Levine (Bloomberg)

A succinct definition of a short:

“When you short a stock, you borrow shares and sell them, promising to return them later. You have to pay a fee to borrow shares, you have to post collateral based on the value of the borrowed shares, and you (generally) have to return the shares you borrowed if the lender asks for them back.”

An example of how it’s possible for a stock to be more than 100% short.

“There are 100 shares. A owns 90 of them, B owns 10. A lends her 90 shares to C, who shorts them all to D. Now A owns 90 shares, B owns 10 and D owns 90—there are 100 shares outstanding, but 190 shares show up on ownership lists. (The accounts balance because C owes 90 shares to A, giving C, in a sense, negative 90 shares.) Short interest is 90 shares out of 100 outstanding. Now D lends her 90 shares to E, who shorts them all to F. Now A owns 90, B 10, D 90 and F 90, for a total of 280 shares. Short interest is 180 shares out of 100 outstanding. No problem! No big deal! You can just keep re-borrowing the shares. F can lend them to G! It’s fine.”

It’s just that the likelihood that all of these borrowers can all settle at a workable price becomes more and more unlikely. Sometimes you’re on the wrong side of a trade indeed. Some borrowers will likely default and go bankrupt. It’s not illegal or creating anything out of thin air, but it’s a highly volatile situation that is unlikely to be beneficial to price-discovery or any other of the actual jobs a sane society would expect from its financial markets.

“There is a feedback loop: The stock goes up, short sellers give up, they buy stock to surrender, and their buying pushes the stock up more.”

An example of call options:

“Second, a lot of people (on Reddit) who like GameStop don’t buy stock; they buy call options. If you are a retail trader looking to gamble on a stock, you can buy call options to get leveraged exposure to the stock. For instance, last Tuesday (Jan. 19), you could have bought a $50-strike call option on 100 shares of GameStop stock expiring this coming Friday (Jan. 29). Bloomberg tells me this option would have cost you about $3.35 per share, or about $335 for a 100-share option contract; the stock closed that day at $39.36. If you sold the options on Friday (Jan. 22), when the stock closed at $65.01, they were worth $18.16 per share. You put in $335 and got back $1,816; you made a 442% return in four days. If you had just bought 100 shares of stock instead, you would have had to put in $3,936 to get back $6,501, a 65% return. Of course if the stock had stayed flat instead of going up to $65.01, you’d have lost 0% by buying shares and 100% by buying the options.”

This is a decent definition of how an option is priced (and delta):

“Its option pricing model—the Black-Scholes formula or a related model—tellsit how much stock to buy; that output is a number called “delta” and ordinarily expressed as a percentage. Delta is the sensitivity of the option price to the stock price; the higher the delta, the more the option behaves like stock. The more in-the-money the option—for a call option, the higher the stock price is relative to the strike price—the higher the delta will be. A loose, nontechnical, *incorrect*but still sometimes helpful way to think about delta is as “the probability that an option will end up in the money.” A 100-delta option is so far in the money that it is sure to convert into stock, so it’s just stock. A 0-delta option is so far out of the money that it can’t possibly convert into stock, so it’s just worthless. A 50-delta option is roughly at-the-money—a $50-strike call when the stock is trading at $50—and could go either way.”
You haven’t done anything else—you bought the options on Tuesday, and then stopped trading—but the market maker kept buying hundreds of dollars more stock as the stock went up to keep the option hedged. Multiply that by the extreme popularity of GameStop options, and you get a lot of stock being bought as the price goes up—which, of course, pushes the price up more.”
“[…] then the stock going up forced short sellers and options market makers to buy stock, which caused it to go up more, which caused them to buy more, etc.”
“[…] people who were betting *against* GameStop bought put options. Dealers who sold them those options would have sold stock (short) to hedge them. Initially this might keep the price down. But as the stock went up, the dealers would *reduce* their hedge, buying in stock (covering their short positions). This too would have the effect of pushing up the stock—and could look a little like a short squeeze.”

A definition of gamma:

“Meanwhile the market maker who sold you the options would have hedged its option exposure by buying about 40 shares of GameStop stock, for about $1,575. (This—the fraction of the underlying shares that the market maker buys to hedge the option—is called “delta.” ) Your $335 of option premium caused $1,575 of stock buying. More important, as the stock goes up, the market maker will adjust its hedge by buying more stock—by the end of the day on Friday, the market maker would have owned about 80 shares. (The change in delta as the stock price changes is called “gamma,” and people who like this sort of technical explanation love talking about “gamma.”)”
“When I wrote about Signal, I got a few thoughtful emails from readers about Bitcoin. Bitcoin is a financial asset with no cash flows. It has value purely because people think it’s valuable. Bitcoin is worth $34,000 because other people will pay you $34,000 for it, and they’ll pay you $34,000 because other people will pay them $34,000, etc. There is no underlying claim; there is just a widespread acknowledgment that people think it’s valuable.
“Their complaints will have the basic form: Look, you have fiduciary duties to your shareholders; you are supposed to deal honestly with us. You sold us stock that you knew was ridiculously overvalued. Yes right sure we happily bought it, yes right sure we also knew it was ridiculously overvalued—this is not a secret!—but, you know, still. It’s a bit rude.
This is why I am basically fond of stock buybacks: Companies with no great ideas for what to do with their cash should give it back to shareholders, and companies that *think* they have great ideas for what to do with their cash often don’t and should give it back to shareholders too.”

GameStop Is Just a Game by Matt Levine (Bloomberg)

“Maybe the craziest thing in the chart is not the wild spikes up and down, but the flat lulls when no one was trading because the stock exchange wouldn’t let them. “The stock surged as much as 145% to $159.18 on Monday,” reports Bloomberg News, “triggering at least nine trading halts.” The theory behind a trading halt is basically that the stock has moved around too much, too quickly, for people to really mean it.
Gleefully getting top-ticked on a stock—buying it at its highest price ever and then bragging about it as the price collapses—in order to earn the strange respect of your friends on Reddit: That is a thing you can do. You might enjoy it. I am not going to say it is irrational; people have spent their money on worse things. But it is not the sort of rationality that the stock market is set up for.
“[…] if the U.S. Securities and Exchange Commission were to go after WallStreetBets for this stuff they will be breaking new ground and going beyond their previous cases.”

The definition of securities fraud in the U.S.:

“(1) That the accused had the ability to influence market prices; (2) that the accused specifically intended to create or effect a price or price trend that does not reflect legitimate forces of supply and demand; (3) that artificial prices existed; and (4) that the accused caused the artificial prices.”
“The point here is that it is at least theoretically possible that no one buys stock for any reason other than “hey it’s a fun pump.” That is, no one is deceived about the fundamentals (there’s no fake news about the company), and also no one is deceived about the technicals. No one says “huh this stock is up on a lot of good buying pressure, I should buy some”; everyone who buys says “hey this stock is up because it’s being pumped, and if I get in now I might still get out before it collapses, and that’ll be fun.” It is “respect the pump” as a quasi-mystical mantra.
“I bet the SEC would say that’s market manipulation, but I am not so sure. I suppose we did our trading “for the purpose of inducing the purchase or sale of such security by others,” but not by deceiving them about what’s going on. “Join us in a fun game of chicken,” was our basic message here. Did we try “to create or effect a price or price trend that does not reflect legitimate forces of supply and demand”? Who’s to say what’s “legitimate”? Surely the price did not reflect expectations about future cash flows, but just as surely the price reflected supply and demand: We all wanted to own it because we were having fun, so the price went up.
“On the other hand it is all pretty dumb? Like if you are a securities regulator, you can think of your job narrowly as preventing people from lying about stocks, or more broadly as encouraging capital formation and fostering confidence in markets and moving markets toward efficiency and perfection. And, you know, this is the opposite of that. A popular conclusion from the GameStop story is “well I guess the stock market is nonsense now,” and I’m not sure that conclusion is wrong. Seems like the sort of thing the SEC wouldn’t like. But what can they do about it?”
If “spite” is a predictable driver of stock prices, you might as well exploit it. Perhaps market psychology, in 2021, is sometimes reverse psychology.”
Why was Epstein, who was not a lawyer or an accountant or a college graduate for that matter, so good at tax? I actually don’t have too much trouble believing this—in my experience, some people are just born with a natural gift for tax structuring, and need surprisingly little formal training to achieve their potential—but it is fascinating.”

Suck It, Wall Street by Matt Taibbi (TK News)

“[…] polite society was united in its horror at the spectacle of amateur gamblers doing to hotshot finance professionals what those market pros routinely do to everyone else.”
America’s banks just had maybe their best year ever, raking in $125 billion in underwriting fees at a time when the rest of the country is dealing with record unemployment, thanks entirely to massive Federal Reserve intervention that turned a crash into a boom. Who thinks the “fundamental value” of most stocks would be this high, absent the Fed’s Atlas-like support in the last year?”
“In other words, it was all well and good for investment banks and executives of phoney-baloney companies to gorge themselves on funhouse profits on a funhouse economy, but when amateurs decided to funnel just a bit of this clown show into their own pockets, finance pros wailed like the grave of Adam Smith had been danced upon.”
“Fundamentals? How much does Sorkin think his exalted Delta Airlines would be worth now, if the Fed hadn’t stopped its death plunge last March? How much would any of the airlines be worth in the Covid age, with their fleets of mothballed jets? What a joke!”
“Short-sellers bet by borrowing shares from so-called prime brokers (Goldman, Sachs and JP Morgan Chase are among the biggest), selling them, and waiting for the price to drop, at which point they buy them back on the open market at the lower price and return them.”
“The degree to which even the beneficial functions of short-sellers are cheered or not is dependent upon whose corruption they’re uncovering. Let the record show that when the S.E.C. imposed a ban on shorts of financial stocks in 2008, they routed short-sellers who were dead right about the insolubility of America’s banking sector. The state prevented their correct judgment about companies like Wachovia and Washington Mutual, whose stocks kept plunging even after the ban and went bust soon after. The shorts were right about all the other banks, too. The Inspector General of the TARP, Neil Barofsky, eventually told the Financial Crisis Inquiry Commission that 12 of the 13 biggest banks were on the brink of failure when they got saved — by the short ban, by emergency overnight grants of commercial bank licenses to companies that weren’t commercial banks, by the bailouts, by the subsequent avalanche of underwriting fees, and most of all, by the lies about all of the above.”
“The home of James “rude awakening” Gorman, Morgan Stanley, got its bank holding company license (and the lifesaving Fed credit lines that came with it) late on a Sunday night in September, 2008, because the firm couldn’t have opened its doors without it the next Monday morning. They’d have been blown to bits, by “fundamentals.” Instead, they got rescued, given a forever pass to keep feeding at the neck of society while claiming, falsely, to be not-failures and not-welfare recipients, better somehow than the “dumb money” they think should be theirs alone to manage.
“This is where society will ultimately come down, of course, uniting to denounce $GME as financial Trumpism, even though it actually comes closer to being an updated and superior version of Occupy Wall Street.

“[…] they see that the stock market, like the ballot box, remains one of the only places where sheer numbers still matter more than capital or connections. And they’re piling on, and it’s delicious, not so much because they’re right, but because the people running for cover are so wrong, and still can’t admit it.

“Buy the ticket, take the ride, nitwits. If you earned anything, it’s this.”

Quick Thoughts on the Minimum Wage by Dean Baker (CEPR)

“The 12 years since the last increase in the minimum wage is the longest period without a hike since the federal minimum wage was first established in 1938. Few workers are now earning the national minimum wage, both because of market conditions and because many states and cities now have considerably higher minimum wages.”
“A higher minimum wage also has positive societal effects. A recent review of the literature found that a 10 percent increase in the minimum wage would reduce the poverty rate by 5.3 percent. Another study found that a 50 cent increase in the minimum wage reduced the likelihood that formerly incarcerated people would return to prison within a year by 2.8 percent.”
“Most researchers are honest and will accurately report what they find in their analysis. However, we should realize that there are some pretty big thumbs on the scale in the minimum wage battle, and those thumbs want to show that minimum wage hikes will cause job loss.
“The actual story is a bit more complicated since typically these studies look at a specific type of worker, such as young people or workers with less education. It could be the case that employment in an industry has not changed, but we have seen older or more educated workers replacing younger and less-educated workers.

Getting Lazy in Discussing Winning in the Stock Market by Dean Baker (CEPR)

“[…] The point of the piece is that people who just held an index, rather than trying to speculate on individual stocks, have seen very healthy returns over the last three decades.

“While the basic point is well-taken (most people will lose money by trading, both because they tend not to make the right calls on average and because of the fees associated with trading), there is an important qualification that should be made. Future returns over any long period will depend on the market’s current valuation relative to corporate earnings. This means that in periods where price-to-earnings ratios are high, we can anticipate lower future returns.

“This means that investors in stock indexes can expect relatively low returns going forward, especially if some or all of the corporate tax cut put in place under Donald Trump is repealed. That doesn’t mean it is necessarily bad to invest in a stock index, but the returns may not be quite what some people would expect.

”This is for you, Dad”: Interview with an Anonymous GameStop Investor by Matt Taibbi (SubStack)

“Since 2008, the tendency among mainstream commentators has been to shrug off reverberations from the crash that force their way into news, usually on the grounds that the millions who lost homes, careers, marriages, lifetimes of savings, health, and in thousands of cases, their lives, are not truly poor or “working class,” or are only “relatively low-wealth,” as New York magazine recently put it. In the case of GameStop, there’s been a parade of stories describing investors as dupes, dummies, financial Trumpists, irresponsible gamblers, even crooks, their trade pegged as almost everything but what on some level it surely was and is, an echo of a suppressed national disaster.”
To this day I know I can outwork people in physical labor simply because my threshold for what is considered difficult is much higher, because I spent summers as a child doing that. I’m not sure where that squares with labor laws, but it happened.”
SP: If you make a TD Ameritrade account, you can run, think or swim. It’s like a mini Bloomberg terminal. You’re not going to get the same richness of data, but you’re going to get a significant amount that you normally wouldn’t ten years ago. And in places like wallstreetbets, I was meeting people who clearly used to or still did work on Wall Street, who would teach you, for free, how to do things like recognize distressed companies, research their debt covenants, look up public data about who was invested in what, and so on.
SP: It’s the COVID-19 sell-off and pump. It’s what these guys do. It really does feel as though CNBC is a participant in market manipulation for the rich. These hedge fund guys go on air and it’s like they’re trying to spook the herd in the direction of their trades. They tell everyone to get out when they’re short, and once all the meat is all off the bone, they go long, just in time for the recovery. They get to call the top and the bottom of the market. It’s totally fucked.

“And in the middle of all this misery, you have a group of the most cancerous rent-seekers on earth, aligning to destroy this company GameStop, because they decided it shouldn’t exist anymore.

“[…] They’re playing these games while there are people out there who can’t afford Christmas presents for their kids, can’t afford food. What are these families supposed to do?

“Meanwhile those guys at the hedge funds, they’re not sharing that fear. Why should they? They’re going to get bailed out anyway.

There’s going to be a constant battle to direct the Sauron-like gaze of this board now. It’s going to be very difficult to get ahead of that, just like it’s difficult to know what the number one meme is for next month.”

“But the trade was destroyed. Whether or not that was intentional is not for me to say. All I can say is what happened. Retail brokerages all of a sudden stopped allowing their clients to trade, unless they were of a certain net worth. Banks could do it. Hedge funds could keep doing it. They could still be in the trade. But you and I could not. We could only sell. We could only do the one thing that they would need us to do, to get themselves out of the quagmire. And it wasn’t about price at that point. It was about control of physical shares that would allow you to cover.

“So yeah, a message got sent. But one was also received. They basically said, “We understand the message you’re sending. And here’s the message we’re sending back.”

“But it was worth it.”

Matt Levine explains in detail in the other notes how this almost certainly was reserve requirements and the DTCC/NSCC/Clearing companies doing what is legally required of them—Robinhood has to raise over $3B in a week, more than they’d raised in the previous 8 years—but the optics are very, very bad.

In Response to “New York,” Re: GameStop by Matt Taibbi (SubStack)

“About a year after that, at Zuccotti Park in New York, it struck me that if Occupy Wall Street could attract the people from places like that Rocket Docket in Jacksonville, it might have overrun the country. At the time, the emerging criticism of Wall Street that was coming from younger, urban, college-educated activists had not yet lined up with the gigantic reservoir of rage that was out there among the millions who’d lost homes, jobs, pensions, etc.
“Propaganda blasted out on every channel, to the effect that it was your own fault if you took on an adjustable-rate mortgage that went sideways, or bought too big of a house. People above all feel shame when they can’t pay their debts, and many took it to heart when pundits said the crash was caused by people buying houses they couldn’t afford.
“[..] resentment in some neighborhoods grew toward the family down the street who’d been foreclosed upon, leaving a boarded-up eyesore on the block and collapsing property values for those left.”
“Why they were pissed off gets to the second question, about the bailouts, ZIRP, the TARP, even the CARES Act. While so many people went into personal tailspins from 2008 on, their nightmares were often compounded watching as the very people who caused the crash — including the banks and mortgage originators who knowingly pumped mountains of fraudulent subprime instruments into the economy — not only got saved but were further enriched, by bailouts and an array of extravagant Fed programs.
“Perhaps some form of rescue was necessary, but there’s something odd going on when a bank executive can be looking at closing up shop one day, as many were last March, only to go on to secure record profits and over $30 million in personal compensation, with nothing changing in between but a bailout. Meanwhile, at the bottom of the economic spectrum, there were no such reversals of fortune. You lost your job, you got foreclosed on, that was it.”
“If you think it’s not fair that a small business faces a different market risk than Morgan Stanley, if it seems wrong that a restaurant is allowed to fail but not a bank, you’re a libertarian. In the Trump era, every criticism of establishment politics apparently has to be framed as conservative grift.
“Trading in the stock may indeed have been restricted because of laws requiring that brokers have the capital to cover trades, although Robinhood’s collateral calls dropping from $3 billion to $1.4 billion in few hours seems a bit odd (as does the fact that the Depository Trust Clearing Corporation has rarely been so finicky about compliance issues before, across a generation of naked short-selling and other practices).”

In my experience working with them, the DTCC is perhaps not very competent (it wasn’t always easy to find someone capable of consulting on their ACATS process) and certainly not very fast, but I would never have accused them of not being finicky.

Public Policy & Politics

Why the Senate Shouldn’t Hold a Late Impeachment Trial by Philip Bobbitt (Lawfare)

“Donald Trump deserves punishment for the long campaign to discredit the results of the 2020 election that culminated in his inciting the Jan. 6 attack on Congress and the Capitol. Nevertheless, the Senate is making a mistake in holding a trial of the article of impeachment, which is scheduled to begin the week of Feb. 8, after the president leaves office. Doing so subverts the law in an effort to punish someone who subverted the law.”

Contra Weyl On Technocracy by Scott Siskind (Astral Codex Ten)

“I want to make it really clear that I’m not saying that technocracy is good and democracy is bad. I’m saying that this is actually a hard problem. It’s not a morality play, where you tell ghost stories about scary High Modernists, point vaguely in the direction of Brasilia, say some platitudes about how no system can ever be truly unbiased, and then your work is done. There are actually a bunch of complicated reasons why formal expertise might be more useful in some situations, and local knowledge might be more useful in others.
In this case, supplementing the technocratic method with human judgment just plain worsens the technocratic method. I don’t know if this carries over to more society-relevant decisions, but it’s the sort of thing you have to consider.”
“Perhaps the decision to make Congressional districts compact hexagons instead of compact pentagons might very subtly favor Republicans in some way. But it would favor Republicans less than getting a bunch of Republicans together to draw every district in exactly the way that favors Republicans the most; there’s a limit to how biased a short hexagon-drawing algorithm can get.
“[…] at the same time Weyl was making fun of us for caring about biological catastrophes, Ord was writing about how the numbers suggested zoonotic diseases from bats could cause catastrophic pandemics.
EA [effective altruism] started with a sort of merger and cross-pollination between people trying to save lives by eg curing malaria, and transhumanist/singularitarian groups working on protecting the long-term future; it held together because both groups agree that the other’s position can make sense given different sets of complicated assumptions about ethics and tractability.
“Worse, the extremely elitist, segregated, and condescending approach to philanthropy encouraged by the community has created widespread public backlash that has closely tracked a broader populist reaction to technologically-driven globalist elites and that increasingly seems to be one of the largest risk factors for precisely the sorts of catastrophes effective altruists increasingly see as the largest threats to their long-term viewpoint on universal welfare.”
“This hasn’t been my experience of the masses. My experience has been they hate elites trying to lecture them on what to do, especially if justified in pseudoscientific mumbo-jumbo that they can see through easily.
“And would Weyl’s suggestions really help prevent populist backlashes? He wishes we abandoned our overly-rational ways in favor of “humanities, Continental philosophy, and the humanistic social sciences” − isn’t that usually code for stuff like queer theory, postcolonial theory, and postmodernism? Are working-class Trump supporters really banging on their keyboards when they read about effective altruism, shouting “YOU NEED TO STOP TRYING TO BE OBJECTIVE AND FACT-BASED, AND BE MORE OPEN TO INSIGHTS FROM QUEER THEORY AND POSTMODERNISM”? This”

Nailed it. Because as soon as you’re rational, you necessarily exclude unsubstantiated touchy-feely stuff, leading to hurt feelings and an obvious need for retribution.

“But I don’t think it’s fair to demand other people optimize their philosophy to avoid completely hypothetical populist backlashes, while you’re saying the most tone-deaf populist-backlash-provoking stuff imaginable.”
“There are separate critiques of top-down intervention, mechanistic decision-making, autocracy, expert opinions, and lack of bottom-up feedback. All of those critiques are important − and all of them are matched by equally important reasons why sometimes you would want to use those things to some degree.”
“Maybe I’m being too technocratic here, but at some point you need to break things down, look at this (social) scientifically, and try to figure out which parts of things are consistently bad and which parts sometimes seem to help.

Despite facing repression, Alexei Navalny is no hero. Russian writer Katya Kazbek reveals the Western-backed opposition figure’s real history. by Royce Kumelovs and Katya Kazbek (The Grayzone)

His support in Russia has been greatly exaggerated by the Western press. The Navalny supporters, who are not as numerous, have been galvanized by the attempt on his life and his arrest. Others, who might not be supporting Navalny per se, view the case of his apprehension as yet another in the string of cases where one’s political views become a basis for detention and imprisonment.”
“I would say that these protests, as well as the protests in neighboring Belarus, have been an inspirational force for recent protests across Russia. But I believe that the Russian protests are a mix of organic and astroturfed. I would definitely see what’s happening with Alexei Navalny in the context of the foreign politics of the European Union and the USA — and especially to the presidency of Joe Biden. The US Democrats have spent years talking about the so-called “Russiagate”, a narrative prevalent in the US, that blamed Russia for Hilary Clinton’s loss in 2016. The conspiracy has been debunked continuously but remains a big staple of American politics. I believe that because of that and the proxy wars going on between the two countries, Biden’s term will be very hawkish on Russia.
“Of course, twenty-somethings, who were too young to participate in the protests of the 2010s, or people who had been apolitical before will perceive them as unprecedented, and I do believe that there has been an increase in participation in a broader geographic and class context—as compared to the mostly Moscow-centric, middle-class events of 2010s.
“[…] no effort to address or center the working class has been made. All of it makes the narrative all too familiar, and the protests appear detached from the everyday worries of Russia’s working class.
“Boris Yeltsin’s coup, that was backed by Bill Clinton and the US media, is definitely something people think back to a lot.”
And even if this record is indeed marred deeply with corruption, trespasses, and things that many find unpalatable, life under Putin has improved as compared to the impoverished 90s. It might not be a huge advantage, but having seen the pits, no one is eager to forfeit the small advantage that exists for the unknown. And as someone on Twitter rightly said: “While it’s obvious whom Navalny is against, it’s not quite clear whom he is for.”
“I want everyone to realize that the overwhelming majority of western journalists are busy communicating their own narrative, which does not have anything to do with the real situation on the ground; however, it too often reflects the opinions of State Departments of NATO countries. Disgruntled diaspora voices and loud English-speaking liberals in Moscow are incredibly biased, also. The majority of Russian online presence is in Russian and overwhelmingly on VK.com and Telegram. So judging the country by what you hear most often about it is misleading and dangerous.”
“The biggest myth about Russia is that Putin is some off-the-charts dictator, Russia is an absolute hellhole, and that his only opposition is Navalny […]”
“[…] the foundations set in place by the Soviet Union remain quite firm: from the access to free, unlimited abortions to a genuinely multiethnic society. Russia is not without its racial problems, of course, but that’s also true for Europe with its Roma and migrants, the US with its Latinos and African-Americans and Australia with the Aboriginal and Torres-Strait Islander people to pontificate about.”
“[…] the West should get rid of the white savior syndrome and allow Russians to choose their leader themselves. According to polls, right now, it is Putin. I’m not a fan, but I don’t feel like I have the moral high ground to tell most of my compatriots they lack the agency to make this choice for themselves.”
“[…] as someone who has worked as an election observer during a presidential election, I can say that even in Moscow, he wins by a margin, fair and square. Meanwhile, his most significant opposition is not Navalny, as one can gather from the poll figures. The real opposition party, CPRF, holds a sizeable presence in the Duma. And while overall it is quite reactionary for my personal taste and tends to sometimes fall in line with Putin, it exists; it’s big.

How the work ethic became a substitute for good jobs by Jamie McCallum (Aeon)

“According to a WEC spokesperson, most jobs pay $1.21 per day, in order to incentivise a positive work ethic. If there was a formula for obliterating the work ethic, giving people undesirable jobs with long hours and barely paying them sounds exactly like it.
“Widespread anxiety about a diminished work ethic is confounding when considered against the actual data on how much time Americans spend working.”

No. It’s a reflection of the realization that hard work isn’t enough. The system taught them that hard is work rewarded by chance, or even punished with work and responsibility and no reward. Why keep doing it? The elites have broken the machine they built.

“These three features – overwork, unstable schedules, and a lack of adequate hours – define the paradoxical time signature of the work life today, especially for low-wage workers. There was no simple across-the-board extension of work hours. Instead, the unequal redistribution of our labour time reflects deepening economic insecurity and social inequality. It’s easy to understand why people actually work, but given how odious and arduous it is, what sustains the belief that work is good for us?”

It’s the only way to not die of malnutrition or exposure.

“[…] there’s nothing we do with as much regularity, intensity and unquestioned submission as work. We rationalise our quotidian experiences by shaping belief systems to accommodate them, not the other way around.”
“Today’s low-wage workforce, however, is damned to low-wage work through no act of self-sabotage. Some kids are told to do the mopping up in their schools, others to start businesses and found new schools – class dynamics that persist into adulthood as well.”

Why We Can’t Give Up on the Idea of a World Free From Nuclear Weapons by Vijay Prashad (CounterPunch)

“On January 22, 2021, the Treaty on the Prohibition of Nuclear Weapons (TPNW) became international law for the 122 states who signed the agreement in July 2017. The TPNW, as with most treaties, is summed up in one sentence (article 1a): “Each State Party undertakes never under any circumstances to… Develop, test, produce, manufacture, otherwise acquire, possess or stockpile nuclear weapons or other nuclear explosive devices.” There is no complexity here. This is a treaty to ban nuclear weapons.
“[…] the yield from the “Little Boy” used on Hiroshima is estimated at 15 kilotons, whereas the yield from one W88 warhead that is deployed on a Trident II submarine is estimated at 475 kilotons. It is not just the number of nuclear weapons that are available; the current nuclear weapons, many of them deployed on submarines and ships, are far more lethal.”
““For the U.S., hyping up the China factor is nothing but a ploy to divert world attention, and to create a pretext, under which they could walk away from the New START, as they have done on so many other arms control treaties. The real purpose is to get rid of all possible restrictions and have a free hand in seeking overwhelming military superiority over any adversary, real or imagined.””

NY Times’ pseudo-expert accusing China of genocide worked for far-right cult Falun Gong’s publicity arm by Ben Norton (The Grayzone)

“The New York Times has been a central conveyor belt for the transmission of the US information war against China, providing it with a critical patina of journalistic credibility and marketing it to the liberal intelligensia that comprises the Times’ readership.
“The New York Times printed Pang’s op-ed, “It Took a Genocide for Me to Remember My Uighur Roots,” on January 10. The faulty article was a case study in how little evidence corporate media editors require to green light a piece as long as it accuses official US enemies of the most titanic of war crimes.”
“Meanwhile, social media platforms like Twitter and Facebook have suspended the accounts of prominent Uighurs and other Chinese Muslims who provided an alternative perspective on the conflict. In Western media, only one viewpoint is allowed: that that serves the interest of Washington and its new Cold War.
“The far-right German academic is the source for practically every Western media report alleging “genocide” and enormous concentration camps in Xinjiang. Zenz, who has never spent […] significant period of time in China, and who has published no scholarship on Chinese politics, history or society, is not so much an academic as he is a right-wing operative.”
ETIM, also known as the Turkistan Islamic Party (TIP), is an al-Qaeda-linked extremist militia that has carried out numerous terrorist attacks in Xinjiang. It is recognized as a terrorist organization by the United Nations, European Union, and many countries.
“ETIM, also known as the Turkistan Islamic Party (TIP), is an al-Qaeda-linked extremist militia that has carried out numerous terrorist attacks in Xinjiang. It is recognized as a terrorist organization by the United Nations, European Union, and many countries. Pompeo’s State Department removed ETIM from the US government’s official terrorist list in October 2020, as part of Washington’s intensifying cold war on China.
“In fact, the original image, which was proudly published on the Xinjiang Bureau of Justice’s own WeChat account, with a watermark identifying it as an official photo taken by Chinese authorities. Western anti-China propagandists have subsequently cropped off the watermark and presented the photo as proof of China caught in the act.
“In a 2017 report titled “Uighurs fighting in Syria take aim at China,” the Associated Press reported, “Since 2013, thousands of Uighurs, a Turkic-speaking Muslim minority from western China, have traveled to Syria to train with the Uighur militant group Turkistan Islamic Party and fight alongside al-Qaida, playing key roles in several battles.” The AP continued: “Uighur militants have killed hundreds, if not thousands, in attacks inside China in a decades-long insurgency that initially targeted police and other symbols of Chinese authority but in recent years also included civilians.””
“(ETIM) in Syria While Washington has preferred killing Islamist extremists like these with drones and military interventions, China has resorted to re-education centers.

Fake Meat, Real Profits by Charlie Mitchell (The Baffler)

“A common justification for pursuing these partnerships goes like this: Big Meat aren’t animal-killing companies, they’re protein companies. They’ll go where the money goes. Okay. But more importantly, they are ruthless, cruel, and criminal companies, and a reform campaign that began in the public and activist sectors but loses sight of this simple fact is doomed to perpetuate the system it claims to fight.”
“They want it both ways—they want their fantasy perpetuated whether or not it has any basis, and they want to keep their trade secrets so they make their billions. What’s in it for us?”
“Alt-meat optimists who are excited by the science but remain ambivalent about who controls such technology misunderstand the nature of exploitation and the reasons so many animals are killed, forests cut down, and workers abused. The voracious insatiability of global capital created the industrial slaughterhouse, the confinement animal system, and the chicken breeding technology that puts farmed animals in terrible pain their entire lives. When the chips are down, fiduciary obligations will always privilege profit over the moral aspirations of these patent-clutching geniuses.

Don’t Be Fooled: The Official Unemployment Numbers Are a Lie by Eleanor Goldfield (Mint Press News)

“The pandemic added a harsh life-or-death lens to work like Tiffany’s and as she says with a sigh and a laugh, “it’s a very self-selecting population that comes out to eat or drink right now – and it’s not very savory people as it turns out.” People that refuse to tip, people who complain about their martini coming in a plastic cup rather than a glass, people who report the bar for violating social distancing rules after they were thrown out for violating social distancing rules.
“As an example, if you’re curious about your eligibility in Indiana, you’ll find yourself on a page that not only demands you learn a bunch of new terminology like “lag quarter” but that you also get to work on some math: “To meet the minimum eligibility for UI, your total wages during your base period must be equal to at least one and one-half (1.5) multiplied by your wages in the highest quarter of your base period.” For a tipped or free-lance worker with unsteady or sub-minimum wage income, this doesn’t sound especially promising, and indeed it’s not. In true capitalist logic, you can be too poor to qualify for unemployment.
“For instance, you may have heard that the economy lost 140,000 jobs in December. What may have flown under the radar is the fact that men actually gained 16,000 jobs, while women lost 156,000. 154,000 of those were black women. This is vital information. In a nation so sharply cut along race and gender lines, you can’t have a legitimate conversation about policy without considering these facts. Not to mention the facts as to why these women lost their jobs: because they had to care for children? Because they got sick? Because their workplaces closed? We can’t talk about policy without considering these questions.”

Reflecting the Authoritarian Climate, Washington Will Remain Militarized Until At Least March by Glenn Greenwald (SubStack)

“[…] with the inauguration over and done, those troops remain and are not going anywhere any time soon. Working with federal law enforcement agencies, the National Guard Bureau announced on Monday that between 5,000 and 7,000 troops will remain in Washington until at least mid-March.
“The U.S. is the most militarized country in the world, and has the most para-militarized police force on the planet. Earlier today, the Acting Chief of the Capitol Police acknowledged that they had advanced knowledge of what was planned but failed to take necessary steps to police it.
“This threat seems wildly overblown by the combination of media outlets looking for ratings, law enforcement agencies searching for power, and Democratic Party operatives eager to exploit the climate of fear for a new War on Terror.
“And so the scenes of soldiers on the streets of the nation’s capital, there in the thousands and for an indefinite period of time, is provoking little to no concern.”
Cotton acknowledged that the central cause of the protests was a just one, noting they were provoked by “the wrongful death of George Floyd.” He also strongly affirmed the right of people to peacefully protest in support of that cause, accusing those justifying the violence of “a revolting moral equivalence of rioters and looters to peaceful, law-abiding protesters,” adding: “A majority who seek to protest peacefully shouldn’t be confused with bands of miscreants.”
“Their view was not that Cotton’s plea for soldiers in the streets was misguided, but that advocacy for it was so obscene, so extremist, so dangerous and repugnant, that the mere publication of the op-ed by The Paper of Record was an act of grave immorality.

The Political Fallout From the Capitol Hill Invasion May Prove More Significant Than 9/11 by Patrick Cockburn (CounterPunch)

“I recalled the old Baghdad Green Zone this week as 25,000 National Guards established a well-defended area with the same name in the centre of Washington. The overt purpose was to protect the inauguration of Joe Biden as president and US security agencies, caught on the hop by the invasion of the Capitol on 6 January, were busy slamming the stable door long after the immediate crisis was over.

Forgiving Student Debt Alone Won’t Fix the Crisis by Matt Taibbi (Rolling Stone)

“By 2019, more than 50 percent of Americans said student debt was a “major problem,” and even a few scattered Republicans began arguing for forgiveness and/or allowing student debt to be discharged in bankruptcy. Fed chair Jerome Powell said he was “at a loss to explain” why the law disallowed bankruptcies for student borrowers.
“Student debt, they say, is simply too available to too many young, inexperienced borrowers.”
“[…] an elaborate con, in which the Department of Education finances an escalating subsidy first for private banks and loan services, but more particularly for colleges and universities. Combine a basically unlimited amount of available federal student debt with what has become a de facto societal requirement of a college degree for even the most menial professional work, and colleges can essentially charge whatever they want for tuition.”
“The cycle is consistent. Politicians want to show they care, so they expand “access” to education. Schools in turn expand tuition costs and keep doing it because they have a basically captive customer pool that needs degrees to have any chance at professional salaries.”
“No matter how it shakes out, though, it won’t stem the tide of new debt holders. So long as universities keep building palatial dorms and libraries and paying for them by getting the signatures of teenagers on mortgage-like notes, the problem will continue.”

Are Libertarians Domestic Terrorists? by Ron Paul (Antiwar.com)

“Anyone who gets his news from sources other than mainstream media or big tech, or who uses certain “unapproved” social media platforms, is considered to have had his grievances “fueled by false narratives.” For something to be considered a false narrative, it need only contradict the “official” narrative.”
“Legislation expanding the federal government’s authority to use its surveillance and other unconstitutional powers against “domestic terrorists” is likely to soon be considered by Congress. Just as the PATRIOT Act was written years before 2001, this legislation was written long before January 6. The bill’s proponents are simply taking advantage of the hysteria following the so-called insurrection to push the bill onto the congressional agenda.

The idea that libertarianism creates terrorists is absurd. Libertarians support the non-aggression principle, so they reject using force to advance their political goals. They rely instead on peaceful persuasion.

“Libertarianism is being attacked because it does not support just reforming a few government policies. Instead, it presents a formidable intellectual challenge to the entire welfare-warfare state.”

The ultimate goal of those pushing for a crackdown on “domestic terrorism” is to make people unwilling to even consider “radical” ideas — to make people so afraid of certain ideas that they refuse to even give those ideas a fair hearing.

I agree with all of this. One doesn’t have to be a an economic libertarian in order to believe in this adherence to justice and free expression.

The Fire This Time by James Howard Kunstler (Clusterfuck Nation)

Branding everyone to the right of Woke a “terrorist” and an “insurrectionist,” as is the style these days with the sore winner party, will probably not warm a whole lot of hearts and minds among the politically disenchanted. […] and so the beatings will continue until morale improves.
“Outside the razor-wired DC perimeter, with its bomb-proof bureaucracy, the economy is in freefall. This has not quite come to the attention of a new regime aroused over systemic racism and the pressing need to expand athletic opportunity for transsexuals.

He’s not gentle about it, but he’s right to when he mentions the optics of prioritizing transsexuals in the military when there are a few other niggling issues of slightly higher import to address.

Ideological Imperialism Is Leading to a Bad End by Patrick Buchanan (Antiwar.com)

“In an editorial, “Nothing But a Poisoner,” The Washington Post thundered:

““Western governments should be doing what they can to help this unprecedented challenge to Mr. Putin’s autocracy survive and grow…

““Mr. Putin has dedicated himself to exploiting the weaknesses in democratic systems. Now is the time to return the favor.”

“Consider what the Post is calling for here:

“The U.S. and NATO nations should openly side with protesters in Russia’s cities whose goal is the overthrow of Putin and of the internationally recognized government of Russia.

How, one wonders, would Americans react if Putin openly urged worldwide support for the “Stop the Steal” mob that invaded the US Capitol to overturn the results of the Nov. 3 election?

Where did we Americans acquire the right to intervene in the internal affairs of nations – be they autocracies, monarchies or republics – that do not threaten or attack us?”
“Actually, the larger question, the basic question is why the internal affairs of Burma, a nation 10,000 miles from the United States, are the business of the United States.

Surveillance Kills Freedom by Andrew Napolitano (Antiwar.com)

“Who can be happy while being observed by the government? A watched person changes behavior and loses liberty on account of being watched. The liberty to make unfettered choices, the right to shake a metaphorical fist in the tyrant’s face, the personal power to ignore what the government expects are all dissipated.

“A watched person hesitates to exercise freedom. The more the government gets away with surveillance without warrants, the more people will accept the servitude it brings.

Everybody Wants Action on Putin and Russia: But To Do What? by Doug Bandow (Antiwar.com)

“Putin transformed a corrupt, ineffective, violent, and fraudulent democracy into a tidier authoritarian state, more characteristic of the old empire. He captured a gaggle of once influential business oligarchs, turning them into regime vassals. […]

“The resulting regime is ugly. But Putin does not seek global hegemony, which would be far beyond his nation’s capabilities. In fact, the Russian Federation looks a lot like the old Russian Empire, desiring to protect its borders, extend its influence, and safeguard its interests. It is no totalitarian predator state. There is no ideological competition between Moscow and Washington.

“Russia’s behavior was brutal, destructive, and unjustified, but not particularly threatening to America or Europe. Moscow’s hostility also should have been unsurprising: imagine how Washington policymakers would have reacted in similar circumstances. If the Soviet Union had sought to redirect Mexican commerce to friendly states in South America, promoted a street revolution against the elected, pro-American president of Mexico, and invited the new government to join the Warsaw Pact, the outraged screams in Washington would have been heard across the Atlantic. The president would have been expected to use means fair and foul to, again, do something.”

“Moreover, there is nothing nefarious or surprising about Moscow’s refusal to accept Washington as global dictatress.

“What is striking is not American hypocrisy. After all, most nations’ diplomacy is suffused with outrageous inconsistencies. Instead, Washington officials truly excel at sanctimony, being filled with moral certitude even as they behave like those they are righteously denouncing. It was impossible as an American to listen to the squalid and Pharisaic Mike Pompeo without feeling a mix of embarrassment and contempt.”

“Indeed, Navalny is no Russian Thomas Jefferson, John Adams, or George Washington. To the contrary, some who knew him when he was obscure warn that he trends both authoritarian and nationalist: that is, he disagrees with Putin over who should rule, not how Russia should be ruled.

Science & Nature

Energy Conservation and Non-Conservation in Quantum Mechanics by Sean Carroll (Preposterous Universe)

“[…] the state of a quantum system is no longer specified by things like “position” or “momentum” or “spin.” Those classical notions are now thought of as possible measurement outcomes, not well-defined characteristics of the system. The quantum state — or wave function — is a superposition of various possible measurement outcomes, where “superposition” is a fancy term for “linear combination.”
“[…] measuring the system changes its wave function. When we have a spin in a superposition of this type, we can’t predict with certainty what outcome we will see. All we can predict is the probability, which is given by the amplitude squared. And once that measurement is made, the wave function “collapses” into a state that is purely what is observed.
There are, however, special states called eigenstates, in which some particular observable has a definite value. So we have “position eigenstates,” for which the position is exactly defined, “momentum eigenstates,” for which momentum is exactly defined, and so on. There are no states for which both position and momentum are exactly defined — that would violate the Heisenberg uncertainty principle.”
“All the interesting evolution of quantum systems can actually be thought of as different energy eigenstates combining to give time-dependent answers to questions we could ask about other quantities like position or momentum.”
“If we think of an arbitrary quantum state as a weighted superposition of various specific-energy eigenstates, the average energy is just what it sounds like: the weighted average of the energies of all those eigenstates.
“In Everettian quantum theory, while the expectation value of the Hamiltonian is conserved for the wave function of the universe (including all the branches), it is not constant within individual worlds. It should therefore be possible to experimentally measure violations of conservation of energy, and we suggest an experimental protocol for doing so.”
“And as we say in the paper, the average energy is a rigorous energy-like quantity that would be perfectly conserved if it weren’t for measurements. So the fact that measurements violate that conservation law is pretty interesting.
“The point is that in Everett, wave functions never collapse; all they ever do is obey the Schrödinger equation. What you and I think of as a “measurement” is just when a quantum system in a superposition becomes entangled with some macroscopic object (the “measuring apparatus”), which in turn becomes entangled with its environment (“decoherence”). When that happens, the different parts of the superposition become parts of separate worlds.
“The nice thing about this is: energy is completely conserved! Individual observers think that they witness the average energy changing, because they only live in one branch at a time. But in the “wave function of the universe” (the quantum state describing all branches at once), the average energy is a constant, since that wave function obeys the Schrödinger equation. The energy simply gets divided up between branches slightly differently as time goes on.
“This “thinning” process is completely invisible from inside. You have no way of knowing what the amplitude of your particular branch is; it’s invisible to you. The fact that the amplitudes go down doesn’t mean that the world around you looks somehow less tangible or energetic. The energy you would calculate by adding up the individual energies of all the stuff in the universe (stars, planets, black holes, dark matter, etc) goes into the energy of your particular branch; there’s no reason for that number to systematically diminish over time.”
“Is this change of the average energy of the universe (as seen by observers on individual branches) potentially observable in experiments? In principle, absolutely yes; in practice, maybe, but it would be hard.

Ontology Of Psychiatric Conditions: Taxometrics by Scott Siskind (Astral Codex Ten)

“Suppose a category is real and involves at least three correlated traits. For example, human vs. rabbit involves weight, lifespan, and IQ; healthy vs. flu involves cough, fever, and muscle pain. Pick one trait – let’s say cough. If the flu is a real category, then as we go from lowest-cough-level to highest-cough-level, the people we’re looking at should gradually go from mostly-not-having-the-flu to 50-50 to mostly-having-the-flu.
“I haven’t hunted down all their individual studies, but I suspect this is a sort of artifact of how people respond to their addictions. For example, people who have lots of problems with tobacco either successfully quit and become nonsmokers, or don’t quit and become heavy smokers. So there might be an artificial divide where the only people who smoke are the people who do it socially and enjoy it and feel no reason to quit, and the people who are so addicted they can’t possibly quit.
“75% of findings were “unambiguously non-taxonic”, 17% were “unambiguously taxonic”, and 8% were “ambiguous”. In other words, the field as a whole pretty strongly suggests that most psychiatric disorders are just the tail end of normal variation, like “tall person” or “rich person”, and not a separate category like “rabbit” or “has the flu”. Among the conditions that were very strongly found to be dimensional only were depression, anxiety, and ADHD.”
“If anyone ever demands you have an opinion on the question “is binary gender real?”, I think the most scientifically-supported answer would be “it has a Comparative Curve Fit Index of 0.42 plus or minus 0.1, which means it trends towards dimensionality but taxonicity cannot be ruled out”.
“Practically, Jeff Bezos might as well be a different species. If your idea of wealth is a doctor who makes $200,000 a year, you’re totally unprepared to think about Jeff Bezos. Your whole economic world between the poor single mother and the rich doctor occupies one order of magnitude; Jeff Bezos is five orders of magnitude beyond it.
“I think it’s fair to think of severe ADHD as having the same relationship to normal absent-mindedness that Jeff Bezos has a to a guy making a little above median income. They’re the same sort of thing on the same distribution. But one is so much further out than our normal vocabulary for talking about these kinds of differences that it’s okay to have a different word for it and different intuitions around it.”
“Are psychiatrists mistaking moderately useful bins for underlying cosmic secrets? It’s hard for me to tell exactly how many people make this mistake; the people who understand what’s going on and are just using the categories as rules-of-thumb tend to sound a lot like the people who don’t. My guess is most professionals, and an overwhelming majority of laymen, are actually confused on this point, and this messes them up in a lot of ways.”
“I’ve moved away from thought processes like “If this person has ADHD, they genuinely need a stimulant; if not, they’re just faking”. Instead, I try to think of how much the patient’s symptoms are disabling them, whether a stimulant would relieve some of those symptoms, how likely the symptoms are to go away without an stimulant, and, based on all this, whether the benefits of a stimulant outweigh the risks.”
“By comparison, giving someone a college scholarship might help them become richer, but it’s not “curing” “the” “cause” of “poverty” in a way that flips them from a “not rich” to a “rich” status.)”

Know Your Amphetamines by Scott Siskind (Astral Codex Ten)

“So why was it Adderall − a weird combination of four different salts selected kind of at random by a sketchy diet pill company − that caught on? I’m not sure. My best guess is good timing plus good advertising.
“Even if we agree that amphetamines are the right treatment for ADHD (many people don’t!), how concerned should we be that the particular amphetamines we use are a random mix of salts selected by sketchy 1950s diet-pill peddlers?
“I do appreciate Dr. Charles Popper’s contribution here; he notes that since Adderall has so many different salts, they take different amounts of time to get absorbed by your body, which means Adderall has a more gradual onset and offset compared to something purer like Dexedrine. Things with gradual onsets and offsets are probably less addictive and less likely to produce withdrawals and “crashes”. As far as I can tell, this is the strongest pro-Adderall argument.
“All the reviews are like this. And I bet all of these patients are telling the truth. Sometimes I read drug reviews and I wonder whether these people are special cases, or driven to exaggerate, but these descriptions match my impression of how the average Desoxyn patient feels. What’s the catch? Desoxyn is methamphetamine.
There’s a lot of confusion around the difference between amphetamine and methamphetamine. On the one hand you have anti-psychiatry activists who will say that using Adderall for ADHD is exactly like giving kids crystal meth; on the other you’ll have people who say that obviously normal amphetamine is okay, but meth-amphetamine is a demonic substance that will hijack your brain and destroy your life. The truth is more complicated.
“[…] proven differences between METH and AMPH in addiction liability and in reward efficacy have evaded researchers. Animals self-administer METH and AMPH at comparable rates (Balster and Schuster 1973) and humans prefer similar doses (Martin et al. 1971).”
The simplest explanation of the difference between meth users and responsible amphetamine users is that the meth users take much, much more. This study asks abusers how much they use in an average day, and gets numbers from about 300 to 800 mg. An average clinical dose of either Adderall or Desoxyn would be about 20 mg a day.”



Žižek on the Žhip of Fools Again by Nick Pemberton (CounterPunch)

“Acolytes and zealots can work through these serious changes of chord, the way you do at an all-night jazz riffing of horns into the morning, where it helps if you’re high to get to the upper registers of the player’s abstract theorizing.”

I haven’t read the book, but that’s a fair description of what it sometimes feels like to read Žižek.

“Expecting some kind of catastrophe, the rich are buying villas in New Zealand or renovating Cold War nuclear bunkers in the Rocky Mountains, but the problem with a pandemic is that one cannot isolate from it completely—like an umbilical cord that cannot be severed, a minimal link with polluted reality is unavoidable.
“[…] catch-up protests that enjoy the support of Western liberal media; for instance, those in Hong Kong and Minsk. On the other side, we have much more troubling protests that react to the limits of the liberal-democratic project itself, such as the Yellow Vests, Black Lives Matter, and Extinction Rebellion.
“In the end, Žižek shrugs meaningfully at us and tells us we needs must make a choice between our current regimen of the will-to-ignorance (some kind of weird Nietzschean thing, I guess) or choose brave new thinking, blue or red.”

“Whatever manifests itself has the shape of an ‘I‘” by Justin E.H. Smith (SubStack)

“Over the past few decades we have witnessed a technological and economic revolution of epoch-making importance. The long-term consequences of this revolution for human thriving are not yet known, but the prognosis does not look good. For one thing, the largest industry in the world now is quite literally an attention-seeking industry.
“Yet even extending only as far as trees and worms, the philosopher transmits a clear commitment to the possibility, and salutariness, of cultivating empathetic attention beyond the human realm, and into domains where, ordinarily, we suppose we do not have access to “what it’s like” to be the sort of being brought into focus.”
“Bare observation without attention —if such a thing is possible (I’ll stay agnostic on that for today)— leaves the observer unchanged, or merely records the presence of the object; attention opens up the attender to the object, so that it may “go to work on her”, bringing her into a changed state, and thus exercising a power we ordinarily restrict to agent-others worthy of a second-person stance.”
“In time, we might expect, the moral character, or perhaps merely the coolness or popularity, of people will be judged not on anything they actually say, but on the character of the bots that shadow them. In 2040 we might check in on how our digital personae are doing in the same way we periodically check our stocks: just as we now monitor our passive income, we may someday soon do the same for our passive selves; perhaps these selves, too, will be assigned a social-credit rating, whether called by that or some other name, to which we can appeal, or which we will seek to conceal, when we are maneuvering for elite university entry, or perhaps a new job.”
“As this process continues, and I sink deeper into the work, I find that that world is not at all as it first appeared to me. It is not that I now think the narrator is “good” or “correct” or “praiseworthy” whereas at the beginning the opposite appellations applied. It is that the moral commitment that I have taken on towards his work, the commitment of attention, has infused his world into mine. Neither the novel nor the reader is any longer the same.

This is a lovely way of describing how a book can affect the reader. This happens to me very often. You get “drawn in”, even if the initial pages don’t immediately “grab you”.

“It is difficult to imagine taking on Marcel Proust’s multivolume magnum opus, for example, without what we might call a deep “attentional commitment” (whether we follow through on that commitment is another matter), one that has a moral dimension if for no other reason than that we know that the sheer amount of time we will have to devote to reading In Search of Lost Time is time taken away from our fellow human beings, and even from other forms of care of ourselves that we might have pursued.”
“[…] we may in turn consider the following possible account of the present “crisis of attention”: that it results not from the overabundance in the digital age of possible foci for this mental faculty, as James Williams suggests, but from the excessively narrow channeling of our cognitive and emotional investment down pathways that are structurally guaranteed to limit or prevent personal transformation. Whether this is a temporary limitation of our digital technologies, deriving from the economic model that governs them, or whether it is here to stay, is a question it is too soon to answer, or at least a question for another day.”


The EU must protect the right to privacy and not attack end-to-end encryption (Protonmail)

“The Council’s stated aim of “security through encryption and security despite encryption” — and the backdoors to encryption that this would require — will threaten the basic rights of millions of Europeans and undermine a global shift towards adopting end-to-end encryption.
“In response, these four leading European technology companies reject any attempts to use legal instruments to violate citizens’ privacy and stand up to protect the rights of people and businesses choosing end-to-end encryption.”
“But the proposals are the digital equivalent of giving law enforcement a key to every citizen’s home and might begin a slippery slope towards greater violations of personal privacy.”
“But, as ProtonMail, Threema, Tresorit, and Tutanota point out, the Commission should remember that, from a technological point of view, it is impossible to provide any kind of access to end-to-end encrypted content, even targeted access in a lawful process, without critically weakening the whole system.
“These new proposals are irreconcilable with the EU’s current stance on data privacy: the current and proposed approaches are at complete odds with each other, as it is impossible to guarantee the integrity of encryption while providing any kind of targeted access to the encrypted data,” Istvan Lam, Co-founder and CEO at Tresorit, the end-to-end encrypted file sync & sharing service, said.”
“End-to-end encryption protects our data and communication against eavesdroppers such as hackers, (foreign) governments, and terrorists. By demanding encryption backdoors, politicians are not asking us to choose between security and privacy. They are asking us to choose no security,” said Arne Möhle, Co-Founder at Tutanota, the German end-to-end encrypted email provider.”

The article More SolarWinds News by Bruce Schneier finally addresses why Schneier believes it was the Russians.

“On attribution: Earlier this month, the US government has stated the attack is “likely Russian in origin.” This echos what then Secretary of State Mike Pompeo said in December, and the Washington Post‘s reporting (both from December). (The New York Times has repeated this attribution — a good article that also discusses the magnitude of the attack.) More evidence comes from code forensics, which links it to Turla, another Russian threat actor.”

Because the government said it was (back on Jan. 5th) and Mike Pompeo said it was (back in December, before Christmas) and the NYT (Jan. 2nd) and WaPo (December 2019) and NPR all repeated it.

Schneier calls the NYT article “good”, but I remember reading it and thinking that it was just typical NYT propaganda. There is no evidence presented other than pointing to Pompeo’s completely unfounded claim. Pompeo is a dangerous fool hell-bent on an agenda. When it’s convenient, though, people cite him as an authority without any caveat. I’ve seen them do similarly with Mitch McConnell. Typically, all of these sources reference each other incestuously, leading back to an unfounded and untrustworthy source (Pompeo in this case).

I’m a bit surprised to see Schneier relying on this chain of evidence. He included his links, so I assume that’s what he’s basing his opinion on, but maybe I’m missing some context anyway. That is, however, the same benefit of the doubt we usually give to sources that make claims founds on “sensitive security information” that inevitably turn out to be false or deliberate misinformation with the intent to reignite hostilities with an official enemy (Russia, in this case).


An Introduction to Algebraic Effects and Handlers Invited tutorial paper by Matija Pretnar (Science Direct)

Since there are no values of the void type, a call to raise or fail effectively aborts the continuation, because there are no handlers that could resume it by yielding a suitable value.”
“The list of examples in Section 2 is by no means exhaustive. For more involved examples that include multi-threading, delimited continuations, selection functionals, text processing, resource management, efficient backtracking, or logic programming, see [5,10,6,25]. A number of implementations of handlers has also sprung up, either as independent languages [3,14], or as libraries in existing languages [10,6,25]. More recently, a multicore [2]branch of OCaml [1] has started adopting handlers as a way of implementing concurrency primitives.
“Traditionally, algebraic effects were described not only by a set of operations, but also by an equational theory that captures their properties. For example, nondeterminism can be represented with a binary operation decide and equations stating its idempotency, commutativity, and associativity [18,9,17]. The benefit of equations is that they validate certain program optimizations [11] and better capture the effectful behaviour of operations. With various extensions of such theories, one can also describe complicated effects such as control-flow jumps [7] even in the absence of handlers, or quantum computation.”

How to avoid layout shifts caused by web fonts
by Simon Hearne

“Icon fonts are bad practice for performance and accessibility, replace them with SVG as soon as possible.

bliki: PullRequest by Martin Fowler

“Pull requests have become widely used in software development, but critics are concerned by the addition of integration friction which can prevent continuous integration.”
“Feature Branching is a good way of packaging together a logical contribution so that it can be assessed, accepted, or deferred as a single unit. This makes a lot of sense when contributors are not trusted to commit directly to mainline. But Feature Branching comes at a cost, which is that it usually limits the frequency of integration, leading to complicated merges and deterring refactoring.
“I suspect that since pull requests are so popular, a lot of teams are using them by default when they would do better without them.

Building a social media platform without going bankrupt
Part IV–Caching and distribution
by Oren Eini

“if you put them behind something like Cloudflare, given that we explicitly state what post ids we want, we can set a cache duration of 1 – 3 minutes without needing to worry too much about updates. That can massively reduce the number of requests that we actually have to handle, and it costs a lot less.”

How to hire senior developers: Give them more autonomy by Alexander

What is required is that the new programmer has the opportunity to work in close contact with the programmers who already possess the theory, so as to be able to become familiar with the place of the program in the wider context of the relevant real world situations and so as to acquire the knowledge of how the program works and how unusual program reactions and program modifications are handled within the program theory.

“He even compares these interactions to teaching a skill like writing, or learning a musical instrument, which requires constant personal instruction from a teacher.

“Imagine an expert piano player. They could “document” in meticulous detail where exactly they put their fingers while playing. But even with the most fine grained detail, you wouldn’t be able to learn how to play the piano just by reading this documentation.

Teaching is an undervalued skill, especially in senior developers […] Retaining talent is even more important than you might think. It’s crazy that in an industry where the main value is tied up so much to individual contributors, people change jobs every two years.”