Wednesday, March 29, 2017


"There are no rules of architecture for a castle in the clouds." - G.K. Chesterton

Evelyn Waugh was regarded as a truly funny man, if very unconventional.
His first marriage to Evelyn Gardner was annulled; infidelity was involved. His second marriage was to Laura Herbert (1937–1966, his death)This is from a letter proposing to Laura: Waugh wrote: “I can’t advise you in my favour because I think it would be beastly for you, but think how nice it would be for me. I am restless & moody & misanthropic & lazy & have no money . . . In fact it’s a lousy proposition”.

Evelyn Waugh with his first wife, Evelyn Gardner, in 1928

Laura <i>Herbert</i> Waugh
And Laura, Added by: Terry (Todd) Ferl

During the first Gulf War in 1991 American soldiers outnumbered private contractors in the region by about 60-to-1; but, by 2006, there were nearly as many private contractors as soldiers in Iraq — about 100,000 contract employees, not counting subcontractor employees, versus 140,000 troops. Today, the government spends more (about $350 billion) on defense contractors than on all official federal bureaucrats ($250 billion). (From DiIulio's book on the subtle growth of government.)

The Squid and their numbers: Goldman Sachs Group Inc. (GS.N) has agreed to pay $56.5 million to resolve a U.S. class action lawsuit accusing it and other banks of rigging an interest rate benchmark used in the $553 trillion derivatives market. $553 Trillion! TRILLION!

Tom Wainwright has a new book called Narco-nomics that analyses the drug cartels as a legitimate business pursuit. Perhaps the biggest point of Wainwright's book is that governments' attempts at attacking the drug problem by focusing on limiting their supply is mistaken. Rather, argues Wainwright, they would be better served by focusing their efforts on the demand side of the market. Wainwright offers evidence that efforts at dissuading people from taking drugs in the first place has the effect of reducing the amount of drugs on the street far more than similarly priced efforts at eradicating supply.

Data released on Wednesday showed Sweden’s government generated a budget surplus of SKr85bn ($9.5bn) in 2016, with approximately SKr40bn coming from tax overpayments. The government will have to repay more than £3.5bn to businesses and individuals who purposely paid too much tax in 2016.
The government wants to discourage further overpayments but the national debt office has admitted its efforts will probably not be enough.
While bank interest rates plummeted, Swedish tax rules meant that excess deposits in taxpayers’ payment accounts continued to earn a minimum of 0.56 percent annual interest, leading many people to use them like makeshift bank accounts.

Gunmen killed five female security employees and their driver on their way to work at Kandahar airport in south Afghanistan, officials said, the latest episode of violence against women in the country’s security sector. I wonder whose idea the "female security employees" was?

Some terrific performances at the gala for the new African-American museum. Gladys Knight sans Pips was great--as were a number of very talented women I did not know. Obama was there with Michelle and both of them clapped and sang; they knew all the words. There was a terrible sweet sadness about the event. The seven surviving members of the Tuskegee pilot's unit from WW11 were introduced and the crowd jumped to its feet; big men, usually with studied indifference, wept.  There is something very bad here. I generally just dismiss the bigots and the racial entrepreneurs and assume things will work themselves out, especially since I do not believe it easy to make social change from the top down. And I think the distinction between tolerance and approval is acceptable. But these people, many rich and famous and accomplished, did not feel loved by their country or community. They do not even feel liked. 

Who is....Tom Hayden?

Mortgage applications slid 21% during the fourth quarter from the prior period after rates rose in the wake of Trump’s election.

Presidential elections are coming for Russia. They will likely be held in 2018 (though there have been rumors they could happen in 2017). Like President Xi Jinping in China, who is using “anti-corruption” as a pretense to remove rivals ahead of his reappointment at this fall’s Communist Party Congress, Putin is securing his political position in the name of fighting corruption.
The purges are not limited to governors who have significant powers in the Russian Federation’s political system. Putin has also removed generals from the Interior Ministry as well as the Ministry of Civil Defense, Emergencies and Elimination of Consequences of National Disasters. These ministries are responsible for forces that are used to control domestic social order and quell protests. Ensuring the loyalty of such ministries is essential and must be done before serious problems emerge. A total of 16 generals have been removed, according to RIA Novosti, and two of those were also removed from military service.

In a cross section of countries, we do not find that stricter regulation of entry is associated with higher quality products, better pollution records or health outcomes, or keener competition.  But stricter regulation of entry is associated with sharply higher levels of corruption, and a greater relative size of the unofficial economy.  This evidence favors public choice over the public interest theories of regulation. (Quarterly Journal of Economics)

Statistically, you’re far more likely to get killed this year in a car crash (1 in 50,000), in a plane crash (1 in 750,000), or even struck by lightning (1 in 14 million), than you are to be killed by terrorists (1 in 20 million).

Dividend aristocrats.
Exxon pays a 3.7% dividend yield.
Quarter after quarter, Exxon Mobile has been paying dividends to its shareholders without fail for decades, even at the peak of the financial crisis.Not only that, but the company has generally increased its dividend each year as well. But, for the last several years, Exxon has been borrowing money in order to maintain its dividend payments.
Last month, for example, the company reported $26.4 billion in cashflow from its business operations during 2016. But in order to maintain the business, the company had to spend $16.7 billion on what’s known in finance as “capital expenditures.” The “capex;" every year they have to replace old machinery, purchase more land, etc.
So after subtracting the capex, Exxon Mobil had $9.7 billion remaining in “free cash flow”. But, according to the company, they paid $12.5 billion in dividends.
How could it pay $12.5 billion in dividends when they only had $9.7 billion in free cash flow remaining after the capex spending?
They borrowed it.
Exxon borrowed billions of dollars in order to pay its shareholders a healthy dividend. And they’ve been doing this for years.
Verizon: in 2016, the company earned $22.7 billion from its business operations, but had $17.1 billion worth of capex.
That left $5.6 billion remaining. Yet Verizon paid $9.3 billion in dividends.
Once again, the company took on billions of dollars in additional debt.
Apple has been borrowing because it is cheaper than repatriating dollars and paying the tax.

Of the world's top 30 violinists of the 20th century, at least 20 of them are of Jewish ancestry. Jews constitute no more than 3 percent of the U.S. population but 35 percent of American Nobel Prize winners. Some serious inequality there needs addressed.

Golden oldie:

“The peculiar evil of silencing the expression of an opinion is that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.” --J.S. Mill

A view, associated with Thomas Jefferson, holds that private finance will be smaller and less powerful only if the government is smaller and less powerful.  Government inevitably becomes the partner and enabler of major financial institutions.  Government’s attempts at oversight serve primarily to facilitate rent-seeking, which offers greater profit without greater productivity.
Whatever else one might say about the history of securities regulation in the United States, it should cause us to give Jefferson’s opinion a renewed and serious hearing.--Paul Mahoney

Engels' "The Condition of the Working Class in England" shaped the understanding of the Industrial Revolution of many--not only professional historians, but the general public, too.  Engels argued that the introduction of machinery has killed upward social mobility, making the proletariat for the first time a "permanent class of the population, whereas it had formerly often been merely a transition leading to the bourgeoisie." Not many people could be that wrong and still be taken seriously by anyone. Why? Why are these murderous prophets still taken seriously? Because unhappy people want someone to blame. And revenge. They want revenge.

The California Senate had a day to honor the late Tom Hayden.  State Senator Janet Nguyen, a Republican from Orange County, attacked him in the Senate for his support of the North Vietnamese during the Vietnam war. After she switched from speaking Vietnamese to speaking English, two of the Democratic Senators tried to shut her down and she ended up being forcefully removed from the Senate floor.

AAAaaaannnnnddddd........a graph:

No comments: