Jun

8

This article on a pairs trade has more mumbo jumbo in it than can fit in a big barn. And it brings to mind the absurdity of pairs trade in the first place, and how much money is lost in trying to implement, and how great it is that almost all the short funds have gone into oblivion, that such funds and ideas still provide us with trillions of dollars more that those who look to the drift can fletcherize. One notes a comparable set of "opportune " articles that the "Dax has entered a bear market today".

"How to Play a U.S. Trucker Pair Trade Rising Off Five-Year Low"

Jim Sogi writes: 

A Former Fed Governor mentioned in an interview that I think Mr. Chair posted mentioned that there was a shortage of truck drivers in the work pool. Not enough could qualify by having no criminal convictions, sober, commercial license, and the ability to add and subtract.

Jun

8

I have often walked down the moving average street, but I like to look at what number for the average elicits buying so as you get near it, you can hope for a nice change in the distribuion of subsequent changes. I like to stop and stare at the amount that the curent price is above moving averages of different length and look at the expectations that follow various amount above and below. The changes in direction of the moving average have also been of interest. And the first advisory service I ever bought in commodities was called 'the cumulative average'. 60 years ago I bought it.

Ed Stewart writes: 

In 2012 I applied a 10 - 20 moving average cross to VIX trading product as an example showing the propensity to trend downwards in those markets, do mostly to the massive contango effects that were even more severe at that time - I also noted that every single MA combination worked in a wide range. A guy has continued to track that simple MA cross in XIV (inverse VIX etn), and it has continued to work, often much better than "sophisticated" multi-factor systems. I have had a great deal of luck trading the VIX futures with a combination curve slope, moving averages, and my preference for getting a period after a (seemingly) failed breakout of elevated volatility.

My thought based on this is that if one has reason to believe a market has a great deal of trend persistence yet timing might still be an issue, the simple MA approach seems like a good or reasonable tool. It's not the tool or technique itself so much but the features of a market that count and define if an idea or tool might work.

On the distance from MA idea, I like to do a similar thing but use mid-point of an X period range or a point like open, close, or other specific time.

Gary Phillips writes: 

"It's not the tool or technique itself so much but the features of a market that count and define if an idea or tool might work."

Good point. Any technical information and inferences made from using this or related indicators reflect not a primary but a secondary process that involves compliance of the indicators with fundamentals and/or a cognitive bias. However, indicators that are derivatives of price, track price changes; and, if there is persistence (the future is like the past) they inevitably end up contributing to the myth that they are predictive.

Stefan Martinek writes:

I think the best tools/techniques "learn" from the market and use the data features in some way (e.g. market specific level of noise, noise "memory", etc.). This is why I never use MAs or anything that has MAs inside where we arbitrarily via parameter selection force our views on data. Good techniques are usually adaptive and ask data what parameters are preferred now.

Jun

8

You can run a social security maximization program on you and your spouse to figure out what option gives you the best potential income.

anonymous writes: 

Either your financial advisor has a tool such as Ssanalyzer (which can cost up to $1000 per year), or you can try your luck with free programs such as described here.

But in general the rule of thumb seems to be that unless you are destitute or in poor health it does not pay to to start collecting SS early (at 62) and you should wait until 66 or even beyond.

Jun

8

China has granted another 1 trillion yuan ($161bn) quota to provinces to swap high-interest debt into low-cost bonds, doubling the previous amount, according to people familiar with the matter.

The increase comes as the first stage of the bond swap is under way. Commercial banks have been buying such bonds after the central bank flooded the interbank market with cheap funds…

The expansion will help the government cut risks from a record surge in borrowing that local authorities took on to fund a glut of investment projects. The process — which includes inducements for banks to buy new, longer-maturity, lower yielding bonds — is alleviating a funding crunch among provinces that had threatened to deepen the economy's slowdown.

Local-government obligations may have reached 25 trillion yuan, bigger than the size of the German economy, according to estimates from Mizuho Securities… That compares with the figure of 17.9 trillion yuan as of June 30, 2013 given by the National Audit Office."

- Bloomberg

Jun

8

He's the first pitcher in MLB history since 1995 (and second since 1900) to throw with both arms.

But he's by far the best to do it. I never thought he would make it to the bigs given that he has velocity issues… but what a great debut.

"Venditte makes MLB debut"

He's not an Eddie Gaedel gimmick. This could be fun to watch for a few years. And, his story is very interesting.

Go Elephants!

Jun

8

23aloha retweeted David Beard ‏@dabeard

"The Nazis interrupted her studies. She finally got her medical degree — at age 102".

Jun

8

I've been eating do it yourself Soylent which I call "Superfood" for about 9 months now. It's changed my life. I eat it instead of lunch and as an energy drink. I make my own custom formula high in high energy elements such as maltodextrin, dextrose, spirulina, and whey isolate protein. I've added chia seeds and use masa harina for the carbs. I add electrolytes, calcium and vitamins as well. I've found it to be very very effective in providing good nutrition and energy while engaged in high energy activities such as surfing or skiing. It is easy to digest, easy to consume while on the go. It is much more economical than commercial energy bars or drinks, and much more nutritionally complete.

It is great to drink a little at a time through the day or the days activities without having to stop, sit and consume raw foods and it keeps your sugar and energy levels up consistently though the day without cycles of hunger. During driving or a work day it is great way to stay hydrated, and nourished and avoid low blood sugar, grumpiness. It helps me be productive by avoiding having to stop at a restaurant, wait to be served, eat, and pay, saving hours, and money. It only costs about $4 a day for the bulk ingredient which I can order from Amazon. It is great for traveling when access to food or a restaurant my not be possible. I vacuum pack it in convenient size bags and add to water, or to fruit smoothies.

We have a lot of mango, banana, pineapple and papaya in our yard now, so it makes a great smoothie in the morning. I find myself leaner, with good hair and nails, with more energy. I surely enjoy the good flavors of a nice meal after drinking what I call "Superfood" all day though. I prefer my homemade variety because I can custom mix the formula to match my individual taste, nutritional needs and preferences. Plus its all easily and readily available when I need on my shelf, or very quickly from Amazon. I mix the dry ingredients with a Kitchenaid, and mix the drink in the Vitamix.

The website has a diy section with a custom home recipes submitted by users and a nutrition and calorie calculator. I highly highly recommend it.

Jun

5

One wonders how a 30 year yield of 3.1 % and 10 year of 2.4% might impact the economy negatively and whether that will give pause to hawkish activities especially before an election. One wonders also how the inflation adjusted bonds fit in with these numbers.

John Floyd writes: 

The 5y5y inflation swap [see chart below] has remained in a range, the election and/or referendum to watch may be the one in Greece, which I would say is greater than 50/50 probability of occurring, that is likely to have some impact on Bunds and UST, and the sirens of Fed and ECB don't seem quite confident on economic growth.

Jun

5

I once asked of the Chair, is it really worth it to trade markets not based in the United States? We decided that it was an 'interesting' question.

Taking this further it is of much interest to calculate the relative stability of markets. 'Stability' can be measured in many ways and I leave it to the reader (if there are any) to think about this point further.

For example:

1. Are US T - notes more stable than their international peers?

2. Is the S&P 500 more stable than its international peers?

3. Does relative stability explain why the regularities extant in U.S. markets are often massively more persistent than those for similar markets 'overseas'?

There are some interesting things to look at if one believes that the U.S. markets are at the beginning of the chain that moves other markets.

Clearly the more 'stable' market and the market at the beginning of the chain changes from time to time but my supposition is that it takes some great measure of 'statistical crisis'– for lack of a better term– to upset the U.S. market's hegemony even temporarily.

Bill Rafter writes: 

Presumably stability is the opposite of volatility, but there are a lot of ways to count volatility. And of course there is the question of "over which period?" I'm only guessing of course, but I'll bet that John B would define stability as staying within N standard deviations of a moving mean. And that also begs the question as to the period considered. Should the period be static or floating?

Ideally markets that are more stable would attract more portfolio holdings. That is, there would be a stability premium, or alternatively a cost of volatility. If there were two assets priced at $10 and you knew (don't ask how) they would be priced a $20 at a given point in the future, which do you buy for the portfolio? Obviously the more stable of the two since you may have the need to liquidate before the end of the period. In theory the more volatile one would be discounted vis-à-vis the more stable one. With stocks the end certainty is less defined than with bonds.

The original question implied that the investor/trader was looking to be long country markets that were more stable.

Let's suppose that you believe the country ETFs represent their respective markets. Then you could rank those ETFs by inverted volatility. We have done that after first ranking them by other means. We then would have say 10 ETFs that we would like to own, and make a final selection of a few according to inverted volatility. Alternatively it also makes good sense to buy the entire 10, but with different percentages of your equity.

Does that work? Yes, it is more profitable than holding SPY, but not exciting, such that we don't charge for it. We always include SPY in such rankings, as a tracer bullet. The really interesting thing is that SPY never rises to the top of the daily rankings.

We also have the problem of "over which period". One consideration would be to rank all the country ETFs according to the same period, as though China and the U.S. should be compared by the same time standard. That would seem correct if the account owner had a specific time need. Another consideration would be to let each country ETF dictate the period for comparison. But then you might have the input time for Australia being ranked over two years, with SPY only ranked over two months. That would seem correct if the investor was more of a speculator.

Jun

5

It is interesting how there has always been a question between fundamentals and technicals. Though it seems there is no question. Fundamentals and drift hold the conditions and price action holds the shape–the shape of how to get on, how to benefit, and how to make the most of the current economic situation. You need the macro understanding before anything else is possible… and then magic is possible.

anonymous writes: 

I'm not sure you need the macro understanding. Look at radio and air travel in the 1930s. Or IT (or at least large sectors of IT) in the 1970s.

Fundamentals ultimately win, the same way water does. 

Jun

5

Given Vic's interest in trees, I am posting this link to some amazing photos of trees. A friend had sent me this link today. I believe you will find it worthwhile viewing.

Marion Dreyfus writes: 

I wrote this about the first tree in this extraordinary series of trees.

Bark

He was a lad off to war and fortune. He was in Flanders. He propped his bike against the beloved oak Where in a nimbus of earnest he had embraced his girl expecting her to wait. He felt sure of her, sure she would. And left his gawky 3-speed. A lad of 18, younger then than he'd be now uncynical, unjaded, just a country lad. And the years passed, decade folding over decade. And his girl was affianced to another felled by the waiting for him. But the tree never forgot. And year with year by year on year it stood silent, sentinel awaiting his return, that lad who, ere he left, had lain beneath these capacious shading arms. And not wanting to abandon its friend the tree widened in girth, and stretched in height, enfolding the now-rusted Raleigh incorporating the boy's loveleaving but the handlebars and wheels spoking outlifting the bike with its annual spurt from its packed grassy mound. There for all time awaiting the lad's eager return. The tree grandfather to its earlier self. And the bike? The bike, not still shiny but loyal and mute, keeping its vigil too should his lad ever return.

Jun

4

Janine R. Wedel will speak about her book “Unaccountable: How elite power brokers corrupt our finances, freedom, and security.” She is a previous Junto speaker and a Professor in the School of Policy, Government and International Affairs at George Mason University. Meeting starts at 7:30pm, main speaker at 8pm. Location: General Society Library, 20 West 44th St., ground floor, New York City. All Dailyspec readers are invited.

Jun

3

We've had some big waves recently. The waves are measured by amplitude and period. We had 6 foot waves with 22 second period. This is very powerful compared to a 6 foot wave with a 9 second period as it stacks up on the reef when it breaks so there is much more water where you are in the wave. The surf prediction services use buoys to give the wave amplitude and period peak to peak, and with two parameters and a direction, we have very good information to determine when, where to go out, what board to use, and how to approach the wave, where to line up. Ocean waves in theory follow a sine wave, but in real conditions so much random influence results in a lot of chop most of the time. That's why we look for a nice clean big swell with a long period. We know the waves are going to be good.

At times, the stock charts have wave like structures and some descriptive method giving the height of the move and the length of time between maxima and minima would be very helpful descriptions if not having some predictive ability. X period maxima doesn't work because the periods tend to differ according to the day and doesn't describe the swings. The daily algebraic range doesn't really capture differences in conditions. There's been some work with sine waves, but that doesn't work either. It's easy enough to see looking back, but it's hard to describe in an algo to find them. Chair discussed percentage and algebraic ranges and it's odd there isn't a simple way of describing volatility. I don't understand implied volatility, but it just doesn't seem right to me with its directionality. Absolute volatility doesn't seem all that great in distinguishing various conditions, nor do daily ranges. I don't mean to Prechterize but the idea is that the waves often do not come as isolated events, but in a series of moves.

In the ocean, tides are generally, but not perfectly, predicted by tide charts which generally follow a sine function. Dr Phil has often mentioned arc sine functions in daily markets which tend to place highs and lows at the beginning and end of the session. This is often helpful.

Jun

3

So I wish to present the argument that various interests and groups, notably including "Keynesian" economists, have sold to the public a "quasi-doctrine" which teaches, in effect, that "less is more" or that (in other words) "bad money is better than good money". Here we can remember the classic ancient economics saying called "Gresham's law" which was "the bad money drives out the good". The saying of Gresham's is mostly of interest here because it illustrates the "old" or "classical" concept of "bad money" and this can be contrasted with more recent attitudes which have been very much influenced by the Keynesians and by the results of their influence on government policies since the 30s.

"Capitalism is not intelligent, it is not nice, it's not fair, it is not virtuous and not keep promises. In short, we dislike it and we are beginning to despise it. But when we wonder what to put in its place, we are extremely perplexed."

-John Maynard Keynes

Stefan Jovanovich writes: 

Gresham's law only applies when a country has legal tender coinage of different metals. When he was brought in as agent for the Crown in Amsterdam, Gresham had to explain to Warwick (the head of Edward VI's Regency Council) how he and others had made a hash of things by taking more and more silver out of the shilling coins they were minting. As a result, the Crown's credit was lousy; and no one would accept the "new" shillings except at a severe discount. Because Warwick had authorized several successive debasements, no one in their right mind paid their debts using the still unadulterated gold coins of the realm; those people kept in their strong boxes or sent to Amsterdam where they could profit from the arbitrage opportunity. (In England, of course, "the law" required them to accept all coinage at is face legal tender measure.)

None of this applies to the present situation for the simple reason that coin are no longer legal tender anywhere in the world. The only measure of "bad" money that now applies is whether or not someone will swap your legal tender IOUs for some other legal tender IOUs; now it is the bad money that disappears, not from hiding but from the disappearance of the traders willing to hold it even for a millisecond.

The goldistas, like the Jacobites, still keep thinking that the rightful king will return to the thrown, that, because gold once was money, it will be so again. It may; but, if it does, there will be little arbitrage opportunity - just as there was little opportunity when Grant strong-armed Congress into adopting resumption. Gold will become legal tender again only when a government accepts the wisdom of the authors of the American Constitution - i.e. "the law" cannot put a price on money. As I wrote recently, Cantillon's reform for Greece would be similar to what Gresham did in Amsterdam for Edward VI - a combination of absolute default and establishment of a new currency based on a fixed weight and measure. (I should note that Gresham did not solve the secondary problem of bimetallism; when the coins are "honest" and have the amount of precious metal that the law requires, the ratio of the legal tender values will still create the problem of arbitrage. The actual demand for silver and gold bullion will be at variance with the official ratio. Grant also solved that inescapable problem by limiting silver coinage to secondary coins and limiting the amount minted so that there was no opportunity for arbitrage.)

There is, in Gresham's and Grant's sense, no money in the world right now; there are only IOUs that countries have defined as their legal tender.

This does not make a difference to the people who are "in the market". But, to the great majority of people, who have only their small savings of money, it makes an enormous difference. The great thing about "deflation" - the ability of people to make things better, faster and, therefore, cheaper - was that it rewarded thrift and gave folks a return on investment simply from holding their coins and deferring spending. When people "did not trust banks", it was not simply out of ignorance; they knew that their hoards of gold coin would be worth more and more in the future. So, too, would bank deposits; but only if the bank actually paid out in coin. Default was the risk that debasement now is.

Jun

3

There has been a subtle change in the comovements and contramovements between bonds and SPU during the same day in 2015 from previous years. Given that bonds are down the conditional prob of stocks being up has been 60% in 2015, 80% in 2014, 68% in 2013, 82% in 2012, 79% in 2011. Given that bonds were up, the conditional prob of stocks being up has been 38% in 2015, 48% in 2014, 51% in 2013, 30% in 2012, 31%% in 2011 note that these are movements during the same period, not leading in any way. Assuming perfect knowledge, it would be useful, but it is purely descriptive. However, what the descriptive tab shows, is that comovements , the red and green in our tabs, have been relatively more numerous this year, than in previous years. Indeed there were 39 comovements so far in 2015, and 62 countermovements, giving comovements as 38%. In 2012, and 2011, the comovements were just 26% of the total.


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Jun

3

It is interesting to note that since the high in U.S. Bond futures in late January the subsequent move in the SP 500 futures has been very strong.

It is even more thought provoking that since the recent highs in BUNDS till today, that the DAX is lower.

So are higher bond yields bullish or bearish.

Jun

2

One needs to start calculating the potential risks that have been swept under the rug, the talking heads and the media always have an answer to the so called why and if.

I heard no one talking about the lever effect we have been facing lately. It is easy and stupid to assume, ohh it is all about Greece… but those so called hedged positions based on rates are pushing the market all over the place… rates rip and so goes eur…we have absolutely seen nothing yet when one compares today to past.

What if history repeats and what if it starts moving 2SD. It would be wise to think over your options. And did anyone actually see the action on eur futures call options in european time zone? Someone or a few knew what was going to happen in advance or why would they buy thousands of 1.13 weekly calls when the pair was at 1.098…

Jun

2

Boulevard

Directed by Dito Montiel

Boulevard, one of the last films made in which Robin Williams stars as a sad, crimped man, has had a helluva time finding its way to a theater near us, reports the Mirror way back last October 2014.The film, which mysteriously got positive nods at the Tribeca Film Festival in New York (and Outfest in LA) before comedian and actor Williams took his own life in August, tells the gloomy story of a married banker, Nolan (Robin Williams) who breaks from what Henry David Thoreau deftly called a "life of quiet desperation" in search of intimacy (or something) with rough street trade—a hustler named Leo (Roberto Aguire)–in his later years.

We write "mysteriously" because from the first moment the film opens on a grim-faced Williams driving his grey sedan in his grey city and his grey life, the movie exposes the third rail in two ways. We find little that redeems this film from unalleviated discomfort on every level. Few at the screening seemed uplifted or charmed by the morose piece directed by veteran director Montiel ("A Guide to Recognizing Your Saints" 2006). That emptiness and equivocal response explains for the film looked at a bleak future.

Though Williams after completing the movie commented that to him the film was a "sad, beautiful story," the other glaring reason for not enjoying this novelty film is that frame for frame, no audience member can forget that this talented, colorful actor did himself in a few weeks after the end of the shoot. Either you feel voyeuresque watching him alive when we know what he did to himself, or we are consumed with a creepy weltschmerz, rerunning those headlines.

So the disquiet of this fundamentally pessimistic life, closeted by his own fears and perhaps his ailing, tough, dying father–for whom Nolan cares when he isn't at the soul-destroying bank job or tending to his loving but unintimate wife (Kathy Baker plays his sensitive, hurt-filled wife, ironically named Joy), is reflected in the hearts of viewers, who can't stop recalling that shocking suicide so recently ago. Did making this unremittingly uncomfortable tale add to his private despair? Did it stoke his desire to end all tomorrows?

The marriage of Nolan and Joy marriage, so far from the model literature and life have imagined for millions, is loving, but reflects what we ought to know: No one really knows the nature of others' relationships. What we assume is sensual and intense may be, in fact, asexual and all but residual.

We. Are. Silos. In. Society.

The acting is superior, the little-town feel is accurate, and the ensemble project that mittel America thast big city dwellers don't have recourse to. That limited horizon. That cautious coloring inside the lines, lest our neighbors "talk." For all the scenes with Leo and his skeevy pimp, there is no actual sex of any kind, as Nolan cannot betray his wife, whom he does love, even though they have for years slept apart, have separate bedrooms, lead separate lives. There are far too many extreme close-ups on Robin Williams' face, and the music behind many scenes can be distracting.

It's not a beddy-bye narrative, as the scriptwriter fails to provide rationale for why Nolan should be so wrenchingly self-abusive, instantaneously with this troubled hustler, who returns very little for all the money and gifts and caring bestowed on him by the older man. The writer infuses his characters with humanity, but implausible reactions, in the case of the increasingly agitated protagonist.

Coming to mind very early on, in fact, was the bleak 1910 verse by Edwin Arlington Robinson, "Miniver Cheevy"– a hopeless soul who spends his hours obsessed with what might have been if only he had been born earlier. Where Miniver drinks to drown his unredeemed, unlovely life, Nolan takes to the surly, unloving street rat, Leo.

The poem frames a plausible rationale: Miniver Cheevy, child of scorn, Grew lean while he assailed the seasons; He wept that he was ever born, And he had reasons. Even closer to the ironic take on men "leading lives of quiet desperation" is another Robinson poem we devoured in high school, "Richard Cory"—which, however, ends more bleakly than does the tacked-on, unlikely ending of "Boulevard": So on we worked and waited for the light, And went without the meat and cursed the bread, And Richard Cory, one calm summer night, Went home and put a bullet in his head. Unlike Richard Cory, though, whose suicide isn't necessarily a shock to those in his town, but a source of morbid fascination and gossip, the suicide of Robin Williams was a shock, and resonated across the Hollywood firmament with disbelief.

Though "Boulevard" is the final film in which Williams plays a suppressed character, there are three still unreleased films starring the legendary icon that have not yet been released: "Night at the Museum: Secret of the Tomb," "A Merry Friggin' Christmas," and the comedy "Absolutely Anything." Let's pray this trio of valedictories do not evoke anhedonic references by Thoreau and Robinson.

Jun

2

Yet another class of bears—- the peg ratio. And a lonely voice of reason—- the discount rate– and Peter Lynch, the man who never read a book or went to the opera.

"Lynch’s Secret to Finding Value Discovers Little in S&P 500"

anonymous writes: 

It's unfair to say he never went to the opera. In fact it was his interest in musical performance that got him fined by the SEC–Twelve musical concerts and many sporting events. He made the mistake of never taking along even one of the execution brokers who provided the freebies he actively pursued.

It's often the company one keeps that determines one's results and one's customers' costs. It makes it impossible to trust Lynch's comments on S&P valuation as meal substance when he misdirects about opera attendance v. football attendance as a validity of one's personal measure.

SEC case links here and here.

Jun

1

Australia has outperformed the rest of the world for a century with a 7.5% returns adjusted for inflation vs our own 6.2%.

The triumph of the optimists study attracted enough following and we were bombarded in 2006 to 2009 with reports from bulge brackets ( most notably Credit Swiss ) explaining the virtue of investing in Australia for the long Haul. The reports invariably mentioned the outperformance of Australia vs the U.S. with a standard deviation of 18.2 vs our own 20.4 etc..etc..

Other reasons for the outperformance according to the authors of these reports included the resource rich nature of the country and the sound banking system.

The attractiveness of the Aussie dollar should add to the outperformance of Australia over he rest of the world.

The market in its infinite wisdom and sense of humor managed to tell a different story over the following years where Australia managed to underperform by a wide margin. If one incorporates the weakness of the Aussie dollar into the equation, things will look even worse over the last ten years. Ever changing cycles at its best.

One was tempted today to buy some Australian ETFs after listening to a speech from the same guys about "why Australia and Canada will underperform going forward".

One was tempted to bet that the cycles are about to change again.

anonymous writes: 

Huh? The 10 year trailing compounded return of EWA (Australian) ETF is 8.02% The 10 year trailing compounded return of EWC (Canada) ETF is 7.25% Both of those ETF's have an annual ~ 0.51% mgmt fee so add 5%ish to those numbers to compare with the The 10 year trailing compounded return of the SPY is 7.96. And one concludes that it's a backward looking yawn.

Of course, if you just want to look at the past five years, then you are making a commodity market call. Period.

If you want to make a macro cyclical call, perhaps you should look at Japan. For a US investor, it's produced a 0% RoR for the past 20 years — that is, no buy&hold investor under the age of 50 has made a dime there. Readers of this list may remember my macro call on Japan in 2012. I have not touched my position since then.

Jun

1

An excellent book is The Wool Trade in English Medieval History by Eileen Power, the "most interesting woman" of the 1930s. Shows that they counted every aspect of the sheep better than technicians do their counting today. Also shows that the entire English Constitution devolved from the free markets of the pastoral shepherds and the exporters versus the merchants of wool in medieval times.

The wool entrepreneurs developed into the middle class of England from whom the industrial revolution, the constitution,and prosperity evolved. A typical passage:

In these baillifs accounts, the long rond of the shepherd's year unrolls itself like on of those horizontal Chinese scrolls that have taken one from spring to winter by the time the eye has traveled along their length". In the manorial roles sheep were carefully divided into ewes, wethers and yearlings, lambs, and there was set down the number with which the reeve started the year, the numbers added by purchase or natural increase, lost by disease, sold or given in tithes, (the number that disgraced themselves by not giving progeny) and the number left at Christmas when the account was drawn up. Of course every purchase was accounted for, and balanced with the ending sales to wholesales.

A great admirer of Eileen Power to whom I owe the introduction to this great scholar is Tracy Quan   whose books and persona are equally scholarly and interesting.

Stefan Jovanovich adds: 

Amazon has a free Kindle edition of Power's best seller from the 1920s: "Medieval People"

(Caution: Historical Hobby Horse in Use) Power was a colleague of Norman Angell, Ramsay MacDonald and C. P. Trevelyan in the Union of Democratic Control - the last "pacifist" organization that was not simply a front for the Comintern.

What Angell wrote about the Grand Illusion of Imperialism is still true and is worth considering in light of recent efforts to find a new cause of war in the South China Sea:

"wealth in the economically civilized world is founded upon credit and commercial contract (these being the outgrowth of an economic interdependence due to the increasing division of labour and greatly developed communication). If credit and commercial contract are tampered with in an attempt at confiscation, the credit-dependent wealth is undermined, and its collapse involves that of the conqueror; so that if conquest is not to be self-injurious it must respect the enemy's property, in which case it becomes economically futile. Thus the wealth of conquered territory remains in the hands of the population of such territory. When Germany annexed Alsace, no individual German secured a single mark's worth of Alsatian property as the spoils of war. Conquest in the modern world is a process of multiplying by x, and then obtaining the original figure by dividing by x. For a modern nation to add to its territory no more adds to the wealth of the people of such nation than it would add to the wealth of Londoners if the City of London were to annex the county of Hertford."

Angell was equally prescient about the Balkan Wars and their danger:

"The fundamental causes of this war are economic in the narrower, as well as in the larger sense of the term; in the first because conquest was the Turk's only trade -he desired to live out of taxes wrung from a conquered people, to exploit them as a means of livelihood, and this conception was at the bottom of most of Turkish mis-government…..

"If European statecraft had not been animated by false conceptions, largely economic in origin, based upon a belief in the necessary rivalry of states, the advantages of preponderant force and conquest, the Western nations could have composed their quarrels and ended the abominations of the Balkan peninsula long ago-even in the opinion of the Times. And it is our own false statecraft-that of Great Britain-which has a large part of the responsibility for this failure of European civilization. It has caused us to sustain the Turk in Europe, to fight a great and popular war with that aim (he is referring to Crimea), and led us into treaties which had they been kept, would have obliged us to fight to-day on the side of the Turk against the Balkan States"

Jun

1

A recent post by Tim Melvin noted that Baltimore may be a shit hole, but it's our shit hole. That of many of us on the list. Even if we no longer live there, we identify with it. The glory of Fort McHenry. The commanding of Johns Hopkins. The ignominy of Bankruptcy Tower. The notoriety of Payoff Row. The poverty and lack of hope for a better life in some places in the city. And of course, The Block. Once two blocks (go figure), it's now not even one. Maybe that's the effect of being right next to the police HQ. Add in a dysfunctional education system in the city, the three decades of the departure of industry and the conversion of the town to a bedroom community for DC (in part), and you have a shit hole. I'm sure that some (many?) may contest that conclusion, but try contesting the elements leading me to it.

In the 1960s and early 1970s, if one were to hear a screaming crowd at Memorial Stadium, 33rd Street, Baltimore, chances were good that it was Sunday and the Colts were playing at home. The stadium was usually sold out. It was the era (the "Diner" era—and the Hilltop Diner really did exit, across Reisterstown Road from the Crest Theater—providing relief from the infernal Baltimore summers—and Barcelona Nut Shop) when Colts season tickets were inherited and valued as much as a car or a prized bottle of Lafite or Mouton. It was the golden era for the Orioles, but they did not commandeer the attention, the love the Colts did.

But all of that changed in 1979, specifically June 22, 1979. Edward Bennett Williams had just bought the Os and was complaining about the lack of enthusiasm (and attendance) by the good people of Baltimore. Maybe the team should move to Washington. Lots of interest in DC. and it took forever to drive back to DC. By his chauffeur. The BCPD tailed him once and clocked his trip as 45 minutes, not much more than from York, Pennsylvania (Birdland North) to the Grey Lady of 33rd Street It was the night of the birth of "Orioles Magic," which eventually had an accompanying song (until "You can do magic" replaced it for when relievers entered the game in a tight pitching situation during the early 1980s).

So 1979 wasn't shaping up to be a great year for the Os. Until June 22, 1979. On that night, in the bottom of the ninth, with one on, Doug DeCinces homered to left field. Anyone in the stadium that night will surely remember it. The roar of the crowd was deafening, and the stadium didn't really begin to empty for at least 15-20 minutes after then. Carley Eckman's call (I was listening on a transistor radio, not unusual for someone in the bleachers, not far from the orange and black "Here" flag) was memorable, too. Objective calling of the game flew out the window that moment. The entirety of the Orioles team greeted DeCinces at the plate (for DeCinces, the hit became, at least in part, redemption; it's hard being the position successor to a baseball legend, the "human vacuum cleaner" aka Brooks Robinson), making for an award-winning photo. The next day, a Saturday, that HR was the talk of the town. The following Monday, discussions around the water coolers and over coffee included at least some mention—and often much more—of the HR. 1979 wore on, and the Birds flew high. No one expected much of that team. There were few dominant players, and it was the rare season when Jim Palmer was out of sorts during the season. The World Series that year found the Os against the Pirates, losing in seven games with the final one at home. It was the last time that a visiting team won the series in seven games.

The night of May 29, 2015, also a Friday night, may go down as the renaissance of Orioles Magic. The game was a hard fought pitchers' dual. Gonzalez had pitched a good 8 innings for Baltimore, giving up only one run—earned. Going into the ninth, the score tied, at 1-1, Darren O'Day, a journeyman pitcher who had become the Os middle relief/setup man, came in, proceeded to give up back-to-back hits and promptly loaded the bases with no one out. A situation pregnant for a hit and an RBI to take the lead. But that wasn't the script that was followed on that Friday eve. What followed were two strikeouts and the final out of the inning, a grounder by Elmore to Machado for an unassisted out at third. O'Day had thrown 24 pitches that inning. 24 (or was it 25?). One inning. That's a lot of pitches. For that final out, the crowd was on its feet and the Camden Yards reverberated with cheers and stomps. The bottom of the inning found Os on 1st and 3rd with 2 down. JJ Hardy, an infield specialist with a batting average south of .200 (Orioles faithful will recall Mark Belanger as having somewhat better production at the plate, which isn't saying much), strode to the plate and promptly hit a single to left field. It was all that was needed. Somewhere between 1st and 2nd, after the winning run had been scored, the Os mobbed Hardy as the sellout crowd registered its approval.

The night felt like that of June 22, 1979. One of those days when many in Birdland can recall where they were when DeCinces homered. Will the Magic reappear? The excitement? Hard to say. Let's revisit it in a month. This year's Os are hardly dominant in just about any position on the field, save maybe Zach Britton as a closer. Jimenez is having a good year, and compared with 2014, a great one. But that's about it. And the Os are in 3rd place in the AL East as a result. One game under .500 and one game behind the Yanks. Who ever would have thought that a third of the way through the season the pace would be set by a team one game over .500. At least the Birds have the best home record in the division. So the team has its work cut out for the next three months—not to violate the first rule of holes for the next month as it gets its act together and the, in a reprise of last year's performance—rise to the top.

We've had some discussions recently about the decline of baseball in the US, and yes, the sport has had its troubles. But it's always managed to find a champion and grittily renew its place in the national entertainment firmament. Babe Ruth, Cal Ripken.The sport is shaking off the self-induced haze of the steroid era. And the helicoptering of kids doesn't auger well for a rebirth of the national pastime, which has indeed become passed time. As the country struggles economically with a recession possibly looming over the horizon, with dysfunction in DC and political sex scandals seeming to be the order of the day (I don't recall them being this common, but maybe it's like FDR's wheelchair, no one ever reported them)—the latest being inappropriate touching by the pre-political life former Speaker of the House (does it much matter that it was pre-political life?)—it must have been some serious touching to merit a $3+ million payoff—the country needs to rally around something. As President Snow observed, hope is the only emotion stronger than fear, and while complacency is the rule on Wall Street for the moment, there's some fear being voiced by those with memories of times before ZIRP, of times when interest rates actually ascended, not declined. Memories of the early 1980s. With deflation the concern du jour of the NFL if not the BEA, it may be baseball's time to shine again.

So, in Baltimore, is it Orioles Magic, 2015 edition? We'll see. As for the moment, it's to be savored. Go to war, Miss Agnes! Let's go Os!

Play ball!

Stefan Jovanovich writes: 

This notion of baseball's "decline" is entirely a construct of the Fairness Police. There is now, in fact, far greater "diversity" (sic) among the players of Major League Baseball than there ever has been; the only problem is that the darkest-skinned players are more likely to be Cubans than American blacks. Measured by money paid to the players (baseball, unlike football and basketball and hockey, does not have a hard salary cap), valuations for franchises, television revenues, ticket sales, and concession revenues, these are the best of times. And, regarding the play itself, Buck Showalter is right: "this is the Golden Age". 

Paul Marino writes: 

Here is a great video of the great player for the Buccos, Andrew McCutchen, making some little kids' life last night when playing in San Diego.

Would love to see Pitt make a run at playoffs again, but in a tough division with the best organization in the league St. Louis playing .660 ball, almost a clean + .50bps win % over entire MLB.

anonymous adds: 

I hated the fact that the Giants had to play Pittsburgh for the wild card; they have a wonderful ball park and a really great organization and they are all around good guys. So, clearly the plan for this year is that the Giants beat the Dodgers outright and the Bucs have their wild card game on the road.

Having your loyal fans cheer for you can be a tremendous handicap when it is all or nothing. The Giants have been lucky to be the road team in their "Big Games". The last 4 times they have won the World Series - 1954, 2010,2012,2014 - the deciding game was in the other guys' park. The one time it was at home - 1962 - they lost even though they had Willie McCovey at bat and the winning run on second base and he absolutely smoked the ball - right into the Yankees' second baseman's glove.

Jun

1

Many ask me why I don't adjust % wise rather than algebraically. A good reason is that the algebraic volatility of the market has not changed in 20 years. In other words the stand dev of a daily change was 14 in 1996 and is 14 today.

Period                          ending lvl      stand dev

12 30 1995- 12 30 1998        1413               12

12 30 1998  12 30 2001        1144               17 

01 30 2001 12 30  2004         1204               11 

12 30 2004 -12 30 2007        1356               11

12 30 2007- 12 30 2010        1520               19 

12 30 2010  12 30 2013        1801               14

12 30 2014-5 30 2015           2108               14    

Another set of mumbo jumbo shibboleths lands in boot hill.

anonymous writes: 

You may have a great point, and no one can force you. Let's hope the market won't either, lol…

My greatest problem with 20 year stats is that they reflected entirely different forces, rules and even psychology (AI is certainly different from humans). Of greatest worry is that cost of money has never been similar to current period, and so all the areas of the business of banking. That calls for changes in investing assumptions, which shouldn't kept static throughout.

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