Thought of the Day: POLITICS

Showing posts with label POLITICS. Show all posts

From the great Gave Kal service

In 1939, Franklin Roosevelt famously dismissed reservations about Nicaragua’s brutal dictator Anastazio Somoza with the comment “he may be a sonofabitch, but he’s our sonofabitch.” In the world of foreign policy realpolitik, to a large degree FDR’s doctrine still holds true. Witness, for example, the verbal contortions that US president Donald Trump and secretary of state Mike Pompeo have been forced to pull off in recent days in order to condemn Saudi Arabia, but not too much...

from Bloomberg

The world’s business leaders have suddenly been stricken with a conscience.
After the disappearance and suspected murder of journalist Jamal Khashoggi from the Saudi Arabian consulate in Istanbul, executives who’d been lined up for the “Davos in the Desert”¹ Future Investment Initiative conference in Riyadh this month are getting cold feet.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon and his peer at Blackstone Group LP Steve Schwarzman, along with BlackRock Inc.’s Larry Fink, Uber Technologies Inc.’s Dara Khosrowshahi and Richard Branson have all sent in cancellations. Credit Suisse Group AG CEO Tidjane Thiam and HSBC Holdings Plc’s John Flint became the latest to shun the forum on Tuesday..................................

The double standard is hardly surprising. Making money has required a certain flexibility on moral issues ever since Joseph taught Pharaoh how to profit off a seven-year famine. Being ethical in business is difficult because being unethical is often lucrative.

Of course it pays being ethical but the best for a company for a corporate leader is not to fake he is concerned about politics, image, minorities, etc....the most important thing is to do a great service to your clients, to be of service to constantly improve the service and product. Amazon is a great company not only because they are ethical but because they really care about their client and their service. Lot's of companies care about minorities and they don't care about their customers. they will disappear. to go or not to go to Saudi Arabia does't matter. The best for Saudi Arabia was to have the great service of Amazon or Facebook or Google to all their citizens. That would change Saudi Arabia more than skip a conference!

The great Charles Gave says that two open economies with currency set up by the market should in the long run have the same stock market return.That was the case with Italy & Germany. Until the single currency the Euro the MIB & the Dax were hand in hand.

what happen since the Euro inception? DAX up & MIB sideways

If we left the market forces work in the euro zone in 20 years the best place to build cars will build them all. What is the solution? facilitate the movement of labor and let Italy do only what they are best at. Turism/Leisure & Food

what happens with the people that used to build FIATs they must be subsidized a bit.

If two market economies allow currency flexibility and free flowing capital, their total stock market returns should, over time, be about the same. How could it be different? If one country’s corporate sector earns higher returns, its equities will outperform and attract capital from the lagging market. The impact will be to push up the currency of the high-return market and pull lower that of the low-return one. Over time, changes in competitiveness will cause returns on invested capital across both jurisdictions to equalize.
Charles Gave

low vol stocks + leverage = Beat the market

Image result for low volatility anomaly graph

From Wikipedia

The low-volatility anomaly^{[Note 1]} is the observation that portfolios of low-volatility stocks have higher risk-adjusted returns than portfolios with high-volatility stocks in most markets studied. The capital asset pricing model made some predictions of return versus beta. First, return should be a linear function of beta, and nothing else. Also, the return of a stock with average beta should be the average return of stocks (this is easy to show given the first assumption). Second, the intercept should be equal to the risk-free rate. Then the slope can be computed from these two points. Almost immediately these predictions were challenged on the grounds that they are empirically not true. Studies find that the correct slope is either less than predicted, not significantly different from zero, or even negative. Also, additional factors are predictive of return independent of beta.^[1]
Black proposed a theory where there is a zero-beta return which is different from the risk-free return. This fits the data better since the zero-beta return is different from the risk-free return. It still presumes, on principle, that there is higher return for higher beta.
The low-volatility anomaly has now been found in the United States over an 85-year period and in global markets for at least the past 20 years.^[when?]^[2]^[3]^[4]
Research challenging CAPM's underlying assumptions about risk has been mounting for decades.^[5] One challenge was in 1972, when Jensen, Black and Scholes published a study showing what CAPM would look like if one could not borrow at a risk-free rate. Their results indicated that the relationship between beta and realized return was flatter than predicted by CAPM.^[6]^{[Note 2]}
Shortly after, Robert Haugen and A. James Heins produced a working paper titled “On the Evidence Supporting the Existence of Risk Premiums in the Capital Market”.^{[Note 3]} Studying the period from 1926 to 1971, they concluded that "over the long run stock portfolios with lesser variance in monthly returns have experienced greater average returns than their ‘riskier’ counterparts".^[

Image result for low volatility anomaly AQR

In Portugal the Government as a dual system if you are Portuguese you pay 50% marginal tax above 80,000 euros /year plus 11% Social Security plus 24% VAT plus ......If you are a new resident in Portugal you pay 0% for 10 years or 20% if you get income locally.

This has make real estate skyrocket and make life difficult for Portuguese who live in Portugal. Big taxes and high real estate prices.

I was trying to figure out what is the scandal? No one can explain to me.... people just speak about manipulation and some other buzzwords.

i guess for a political campaign to send emails trying to influence your vote it's what they do. President Obama apparently used the internet with great efficacy.

So this is the scandal from A to Z

In June 2014, a researcher named Aleksandr Kogan developed a personality-quiz app for Facebook. It was heavily influenced by a similar personality-quiz app made by the Psychometrics Centre, a Cambridge University laboratory where Kogan worked. About 270,000 people installed Kogan’s app on their Facebook account. But as with any Facebook developer at the time, Kogan could access data about those users or their friends. And when Kogan’s app asked for that data, it saved that information into a private database instead of immediately deleting it. Kogan provided that private database, containing information about 50 million Facebook users, to the voter-profiling company Cambridge Analytica. Cambridge Analytica used it to make 30 million “psychographic” profiles about voters.

So this Guy Alexander Kogan developed an app with a quiz and when you dowloaded it to your Facebook it stole your messages, photos and of all your friends. Smart guy!

Fault 1- Facebook should not let this to happen but Facebook contests

“No systems were infiltrated, no passwords or information were stolen or hacked,” tweeted one Facebook executive. For its part, Facebook says it learned about Kogan’s private database in 2015, when it removed his app and demanded that he and any of his partners delete the data.

Then Kogan sold this database to Cambridge Analytica and they profiled 30 million users of the 50 million data set's. This guy loves fishing, this one is a cyclist, this one......

Then they emailed people knowing a bit about them. I guess the idea must be

if you know that person A thinks 1,2, and 3 you send an email saying if you think 1, 2 and 3 please vote for TRUMP don't hesitate

for person B that thinks 4,5, and 6 you send a different version.

is that it? I thought there was something criminal here but that was not the case.

Conclusion for me

To me Facebook is a wonderful tool to keep up with your friends
Facebook will change some things and this situation will never happen again
different breach of data will happen but not this one
if you don't want your pics all over the place don't publish anything

Advice

when someone approaches you and they know a bit about you be careful!

From The Economist

With populists in the driving seat, Italy is heading for trouble

Both chambers of parliament are hung, with no easy or quick way for anyone to achieve a majority. More alarming is that half of the voters—fed up with high unemployment, stagnant wages, uncontrolled immigration and a self-serving political class—voted for the two main populist parties, the Five Star Movement (M5S) and the Northern League. Both are hostile to the EU and especially the euro, and both campaigned on lavish tax and spending promises that Italy cannot afford.

Beppe Grillo, a part-time comedian who began his political career with the cry of vaffanculo! (fuck off!) to the establishment is the light behind the 5 star movement!

Italy shows that people vote as if it does not matter. The Capitalist system takes care of everybody so we can vote in any crazy person that when in power can’t do nothing crazy

Beppe Grillo, a part-time comedian who began his political career with the cry of vaffanculo! (fuck off!) to the establishment is the light behind the 5 star movement. Poor Italy!

i think people are a bit snozzy almost everything is getting cheaper, we can fly low cost, we can use UBER, food is cheaper in the supermarket the only problem in the world is that no ones needs us to work. Besides programmers & techies no one is really needed anymore perhaps football players and entertaining people. all the rest are interchangeable.

this is why people vote in crazy people as if it did not matter. The big job of Governments is to keep people entertained and busy.

From Bloomberg Mliv, Mark Cudmore

Formerly known as Dow Jones-UBS Agriculture Subindex Total Return (DJUBAGTR), the index is a commodity group subindex of the Bloomberg CITR. The index is composed of futures contracts on
coffee, corn, cotton, soybeans, soybean oil, soybean meal,sugar and wheat. It reflects the return on
fully collateralized futures positions and is quoted in USD.

Ever-cheaper food may wreak havoc for markets next year. It's clear from the Markets Live macro assets survey on WHIS that the consensus is for higher benchmark yields in 2018. That suggests a belief inflation will pick-up. 

But food prices are a key input to CPI globally and they continue to fall. Technology and science are making agriculture increasingly efficient and there are plenty of gains still to be made globally. The Bloomberg Agriculture Subindex closed at the lowest level since records began in 1991. And it's unlikely to see relief soon given that the weakness has caught speculators offside. Friday's CFTC data showed that the combined net-long positions for agricultural products increased more than 10-fold in the week ending Dec. 5.

And it really matters. Falling food prices were cited as the core reason why China's weekend CPI release came in below expectations. On the other side of the world, Brazil's latest CPI print came in below all economists' forecasts. This year has seen the measure drop below the target range for the first time since 1999 after the 7th-straight decline for food prices. 

From Bloomberg:

The proposed overhaul will be the third major change to the U.S. tax code over the past 40 years. The Dollar Index plummeted 16% in 1986 after Ronald Reagan's reforms reduced the top income-tax rate to 38% from 50%. After George W. Bush cut taxes on dividends in 2003, the currency slid 15%.

The swiss (Swiss national Bank) are making a huge profit. Good for them.

From The Great Gartman letter. We have written many times about the fact... and it is a fact... that the Swiss National Bank has effectively become both the nation’s central bank and one of the largest, if not indeed the very largest, hedge funds in the world. The process began several years ago when the SNB swore that it would do what it could and using what methods were available to it to weaken the Swiss franc relative to the EUR and to the US dollar. It has succeeded, until recently, creating Swiss francs out of the thinnest of air, and selling those Francs vs. the EUR and the dollar, and then taking those EURs and dollars to buy European and US equities and debt securities. The SNB’s balance sheet is a CHf 813 billion (and given that the CHf and the US dollar are effectively at parity one with the other that CHf 813 billion is the same as $813 billion) and this is very nearly 125% of the Swiss GDP.

why do we have Emerging markets crisis from time to time

1.Because EM are not catching up with DM. That is the reality
2.Globalization makes people from EM desire what we have in DM not the opposite
3.Automation is not friendly to EM
4.The best minds in EM don't stay in their countries
5.The cancer treatment is not going to be invented in any EM country

Except Singapore and perhaps Korea no Emerging market ever emerged

Turkey is running a chunky current account deficit of about US$40bn a year, and has a large external debt of about US$400bn on a gross basis and US$200bn on a net basis (about 50% of GDP).

GaveKal

Looking at The Economist Indicators i see a crisis coming soon.

From the Economist

Perversely, policies to help the poor unintentionally exacerbate the plight of left-behind places. Unemployment and health benefits enable the least employable people to survive in struggling places when once they would have had no choice but to move. Welfare makes capitalism less brutal for individuals, but it perpetuates the problems where they live.

https://www.economist.com/news/leaders/21730412-time-fresh-thinking-about-changing-economics-geography-right-way-help-declining

also from the same article of The Ecomonist
The pension of a teacher who stays in the same state could be twice as big as that of a teacher who moves mid-career.

I noticed that people move less & less the system is designed to discourage people to move to the land of opportunity. Only the retirees that have their pension set in stone can move freely.

It is precisely because there is so much poverty, hunger and illness that the world must be very careful not to get in the way of the things that have bettered so many lives already – the tools of trade, technology and trust, of specialization and exchange.

Matt Ridley

PS yes as long as trade is free the world will do well. Don’t interrupt what is working for 200 years. Don’t mess just because despite everybody is getting better a minority is doing even better (. That is the way it is. To close commerce and free trade we lose specialization and to do a bit of everything = poverty.

Adam Smith pointed out that there were three things that make us more prosperous, in a general sort of way: freedom to pursue our own self-interest; specialization, which he called division of labor; and freedom of trade. P. J. O'Rourke

“The ideal of an “all-round” education is out of date; it has been destroyed by the progress of knowledge.”
― Bertrand Russell, Sceptical Essays

Resultado de imagem para manufacturing is increasing - but manufacturing jobs are not

I read this and i get the feeling as Yuval Noah Hariri mentioned in his great book Homo Deus, that the economic value of man will go down very dramatically!

http://amzn.to/2xzXlDg

The following points are taken from Udo Gollub, the CEO of 17 Minute Languages Facebook post...

Software will disrupt most traditional industries in the next 5-10 years.
Uber is just a software tool, they don't own any cars, and are now the biggest taxi company in the world
Airbnb is now the biggest hotel company in the world, although they don't own any properties.
Artificial Intelligence: Computers become exponentially better in understanding the world. This year, a computer beat the best Go player in the world, 10 years earlier than expected.
In the US, young lawyers already don't get jobs. Because of IBM Watson, you can get legal advice (so far for more or less basic stuff) within seconds, with 90% accuracy compared with 70% accuracy when done by humans.
So if you study law, stop immediately. There will be 90% less lawyers in the future, only specialists will remain.
Watson already helps nurses diagnosing cancer, 4 times more accurate than human nurses. Facebook now has a pattern recognition software that can recognize faces better than humans. In 2030, computers will become more intelligent than humans.
Autonomous cars: In 2018 the first self driving cars will appear for the public. Around 2020, the complete industry will start to be disrupted. You don't want to own a car anymore. You will call a car with your phone, it will show up at your location and drive you to your destination. You will not need to park it, you only pay for the driven distance and can be productive while driving. Our kids will never get a driver's licence and will never own a car.
It will change the cities, because we will need 90-95% less cars for that. We can transform former parking spaces into parks. 1.2 million people die each year in car accidents worldwide. We now have one accident every 60,000 miles (100,000 km), with autonomous driving that will drop to one accident in 6 million miles (10 million km). That will save a million lives each year.
Most car companies will probably become bankrupt. Traditional car companies try the evolutionary approach and just build a better car, while tech companies (Tesla, Apple, Google) will do the revolutionary approach and build a computer on wheels.
Many engineers from Volkswagen and Audi; are completely terrified of Tesla.
Insurance companies will have massive trouble because without accidents, the insurance will become 100x cheaper. Their car insurance business model will disappear.
Real estate will change. Because if you can work while you commute, people will move further away to live in a more beautiful neighborhood.
Electric cars will become mainstream about 2020. Cities will be less noisy because all new cars will run on electricity. Electricity will become incredibly cheap and clean: Solar production has been on an exponential curve for 30 years, but you can now see the burgeoning impact.
Last year, more solar energy was installed worldwide than fossil. Energy companies are desperately trying to limit access to the grid to prevent competition from home solar installations, but that can't last. Technology will take care of that strategy.
With cheap electricity comes cheap and abundant water. Desalination of salt water now only needs 2kWh per cubic meter (@ 0.25 cents). We don't have scarce water in most places, we only have scarce drinking water. Imagine what will be possible if anyone can have as much clean water as he wants, for nearly no cost.
Health: The Tricorder X price will be announced this year. There are companies who will build a medical device (called the "Tricorder" from Star Trek) that works with your phone, which takes your retina scan, your blood sample and you breath into it.
It then analyses 54 biomarkers that will identify nearly any disease. It will be cheap, so in a few years everyone on this planet will have access to world class medical analysis, nearly for free. Goodbye, medical establishment.
3D printing: The price of the cheapest 3D printer came down from $18,000 to $400 within 10 years. In the same time, it became 100 times faster. All major shoe companies have already started 3D printing shoes.
Some spare airplane parts are already 3D printed in remote airports. The space station now has a printer that eliminates the need for the large amount of spare parts they used to have in the past.
At the end of this year, new smart phones will have 3D scanning possibilities. You can then 3D scan your feet and print your perfect shoe at home.
In China, they already 3D printed and built a complete 6-storey office building. By 2027, 10% of everything that's being produced will be 3D printed.
Business opportunities: If you think of a niche you want to go in, ask yourself: "in the future, do you think we will have that?" and if the answer is yes, how can you make that happen sooner?
If it doesn't work with your phone, forget the idea. And any idea designed for success in the 20th century is doomed to failure in the 21st century.
Work: 70-80% of jobs will disappear in the next 20 years. There will be a lot of new jobs, but it is not clear if there will be enough new jobs in such a small time.
Agriculture: There will be a $100 agricultural robot in the future. Farmers in 3rd world countries can then become managers of their field instead of working all day on their fields.
Aeroponics will need much less water. The first Petri dish produced veal, is now available and will be cheaper than cow produced veal in 2018. Right now, 30% of all agricultural surfaces is used for cows. Imagine if we don't need that space anymore. There are several startups who will bring insect protein to the market shortly. It contains more protein than meat. It will be labelled as "alternative protein source" (because most people still reject the idea of eating insects).
There is an app called "moodies" which can already tell in which mood you're in. By 2020 there will be apps that can tell by your facial expressions, if you are lying. Imagine a political debate where it's being displayed when they're telling the truth and when they're not.
Bitcoin may even become the default reserve currency ... Of the world!
Longevity: Right now, the average life span increases by 3 months per year. Four years ago, the life span used to be 79 years, now it's 80 years. The increase itself is increasing and by 2036, there will be more than one year increase per year. So we all might live for a long long time, probably way more than 100.
Education: The cheapest smart phones are already at $10 in Africa and Asia. By 2020, 70% of all humans will own a smart phone. That means, everyone has the same access to world class education.
Every child can use Khan academy for everything a child needs to learn at school in First World countries. There have already been releases of software in Indonesia and soon there will be releases in Arabic, Suaheli and Chinese this summer. I can see enormous potential if we give the English app for free, so that children in Africa and everywhere else can become fluent in English and that could happen within half a year.

@Carneirao101

Moravec's paradox is the discovery by artificial intelligence and robotics researchers that, contrary to traditional assumptions, high-level reasoning requires very little computation, but low-level sensorimotor skills require enormous computational resources. The principle was articulated by Hans Moravec, Rodney Brooks, Marvin Minsky and others in the 1980s. As Moravec writes, "it is comparatively easy to make computers exhibit adult level performance on intelligence tests or playing checkers, and difficult or impossible to give them the skills of a one-year-old when it comes to perception and mobility."

BCA reserch wisely as usual concludes that middle incomes will be squeezed and low pay jobs will survive. Why because the computers will destroy the false specialists.

what is a False Specialist? A medical Doctor, a Management Guru, etc..... you never know if what they prescribe works or not. why ?Doctor prescribes medicine A and you get better, who knows if you were going to get better anyway.
Another example a patient with the same conditions sees 10 different medical Doctors and gets 5 or 6 different diagnostics

what is a real specialist? A plumber. Something does not work and after he leaves the House it works. A bike repair mechanic is also a real specialist.

Don't study to be a false specialist. soft education creates false specialists (Management, Economics, sociology etc....) study only hard sciences or physical skils, music, gymnastics, dancing, sports etc...

Resultado de imagem para moravec paradox

We need to get serious about eradicating mosquitoes. This isn’t a joke; they are unstoppable in Maine, where they are merely an annoyance. Elsewhere in the world, they are much more than a pest; they are the most dangerous animal in the world to humans. DEET, citronella, electric zappers, propane attractants -- at best slow some of them down. Zika, dengue fever, malaria, yellow fever and encephalitis are why we should be making an even greater effort to deal with this global health threat. More bats and frogs may help, but technology is likely our best bet.

Barry Ritholtz