Who wants to get bragging rights by calling the bottom on this market slide? I’m going to say that the correct value is 3,200 (pre-coronapanic value) plus 0 percent growth for 2020 when Americans cowered in place and 8 percent growth for 2021. Then add 20 percent for the inflation rate that is experienced by people with enough money to buy stock. So today’s correct nominal value is 4,096. Markets tend to overshoot, though, so let’s take 5 percent off that for the bottom: 3,891.
Not a huge change compared to May 9, 2022, at least in nominal dollars, but the index is down in real terms given the inflation that continues to eat away at savings.
My prediction that the stock market would bottom out at 3,891 was wrong. 3,667 on June 16 was the local minimum. But some of the folks who commented were off by even more, e.g., with a prediction of 2,700 (but on the third hand, I didn’t specify a time interval so it is possible that we will yet reach 2,700).
The latest CPI numbers are out today. What’s the correct level of panic?
Here are a couple of mid-August pictures from Target:
Prices were going up to fast that the “Sale!” numbers are actually higher than the regular prices, listed above (it isn’t a positional error; the SKUs match).
“U.S. Inflation Eased to 8.3% in August” (WSJ, today) headlines what seems like an irrelevant number in a world where half-trillion-dollar government spending programs may be announced at any moment (e.g., Joe Biden’s transfer of student loan debt from the laptop class to the working class, funding housing, health care, food, etc. for millions of additional migrants, ). Is the price increase compared to a year ago informative regarding what to expect next month? If we dig into the article we can learn a bit about what is happening now:
On a monthly basis, the CPI increased 0.1% in August from July, despite a sharp decline in gasoline prices. The core CPI rose 0.6% in August–double July’s pace.
The best estimate of current inflation, then, is 7.4% annually (the 0.6% core number, fed into the Google as 1.006^12). But it could also be only 1.2% (based on the 0.1% month-to-month number).
It’s been nearly two years since New York has led the fight against the coronavirus, but as the virus evolves so does the battle. On Monday, Governor Hochul announced she will not be extending COVID emergency powers which she’s held onto since former Governor Cuomo left office in August of last year. … Hochul says she feels comfortable relinquishing those powers which will expire by midnight tonight.
(Why is it “nearly two years”? Andrew Cuomo shut down public schools and made it illegal for small business to operate in New York 2.5 years ago, no?)
New Yorkers will no longer be living under a state of emergency then? New laws will have to be passed by the legislature rather than decreed by the executive? No. From Friday, September 9… “Hochul Declares Polio State of Emergency for New York” (nytimes):
Gov. Kathy Hochul of New York declared a state of emergency on Friday over the growing polio outbreak…
Some photos from a June 2021 trip to NYC (I used to go there for business every 2-3 months, but now everything is via Zoom).
I was disappointed that our fellow Floridian Frances Tiafoe did not win the U.S. Open.
The Science-following part of my brain was gratified that Novak Djokovic’s filthy unvaccinated Science-denying body was excluded by President Biden’s orders (not applicable to asylum-seekers, of course). It was also good to see that Stefanos Tsitsipas was punished with an early loss for his previously expressed lack of enthusiasm for the Sacrament of Fauci (see “Why So Many Tennis Players Don’t Want the Covid Vaccine” (New York Times, August 30, 2021)).
It was disappointing that Margaret Court wasn’t selected by ESPN to provide commentary. From Wikipedia:
Court has been a consistent critic of LGBT rights and same-sex marriage in Australia. In 2012, she opposed proposed same-sex marriage reforms. Court has been criticised for such statements by openly gay tennis players Billie Jean King, Rennae Stubbs and Martina Navratilova, and in 2012, an LGBT rights protest group called for the renaming of Margaret Court Arena.
Court was criticised in May 2017 after writing a letter to The West Australian decrying Qantas, the largest airline in Australia, for being a corporate supporter of same-sex marriage and saying that she would boycott the airline. … high-profile guests Martina Navratilova and John McEnroe paraded a banner calling for the Margaret Court Arena to be renamed in honour of four-time Australian Open champion Evonne Goolagong. In 2020, her Margaret Court Community Outreach charity was denied a Lotterywest grant for a freezer truck on the basis of her public statements on gay people.
Who better to start the much-needed dialog on these topics, which are important enough to the tennis world that the “This is Pride” banner was larger than the American flag at the Delray Beach Open (February 2022):
Out of principle, I watched only the open-to-all-gender-IDs ATP events that are, I believe, unfairly characterized as “men’s”. I don’t think that there is any requirement in the ATP Rulebook that a player identify as a “man”. I did not watch any of the “women’s” events organized by the gender-discriminatory Women’s Tennis Association. However, it would have been interesting to see a rematch between Serena Williams and beer-drinking, cigarette-smoking Karsten Braasch (“He was well-noted for … his habit of smoking during changeovers.”)
Today is 9/11, the anniversary of the 2001 jihad, our reaction to which was to engage in years of war. I’m going to devote today to describing a visit to the Nobel Peace Center in Oslo.
The Peace Center is in a former train station, no longer needed because Oslo, unlike Boston, constructed a tunnel to unify all of its trains into one station. A view from the National Museum (mostly art):
The red brick towers behind the building are the City Hall, where the Nobel Peace Prize is actually awarded.
The visitor experience begins with a history of Alfred Nobel, whose father was an impoverished entrepreneur and engineer. In addition to being a chemistry nerd, he loved to write fiction:
When he was young and poor, women refused to marry him. When he was old and rich, he didn’t want to get married.
This is what set him up to die without heirs and, therefore, endow the Nobel Prizes.
Treason is not just for Donald Trump and the January 6 insurrectionists. Alfred Nobel was also convicted of treason:
The visitor can use a touchscreen “peace personality” explorer. If you put in zero interest in helping anyone, the software says that your closest match among Peace Prize recipients is Barack Obama.
Moving upstairs, we find a room devoted to polar explorer Fridtjof Nansen, who later become a diplomat. Nansen seems to have been one of the originators of the idea that people in non-Malthusian situations are obligated to send money, food, and other aid to prevent the consequences of Malthusianism. His lecture in 1922:
“When one has stood face to face with famine, with death by starvation itself, then surely one should have had one’s eyes opened to the full extent of this misfortune. When one has beheld the great beseeching eyes in the starved faces of children staring hopelessly into the fading daylight, the eyes of agonized mothers while they press their dying children to their empty breasts in silent despair, and the ghostlike men lying exhausted on mats on cabin floors, with only the merciful release of death to wait for, then surely one must understand where all this is leading, understand a little of the true nature of the question. This is not the struggle for power, but a single and terrible accusation against those who still do not want to see, a single great prayer for a drop of mercy to give men a chance to live.”
In the spirit of Nansen, the UN World Food Programme won the prize in 2020 “for its efforts to combat hunger, for its contribution to bettering conditions for peace in conflict-affected areas and for acting as a driving force in efforts to prevent the use of hunger as a weapon of war and conflict.”
There is a room of tablets on sticks, a bit like some of the installations in Marfa, Texas (“Visitors are required to wear masks indoors”, said the site on September 4, 2022). Each prize winner gets a tablet:
Following Olympic viewing procedure, we will concern ourselves only with Americans. Barack Obama (2009) is featured for creating “a new climate in international politics”. Quite a few winners are featured for ending wars, but somehow the Big Guy didn’t win in 2021 for ending our war in Afghanistan? Al Gore won in 2007 and Jimmy Carter in 2002. Notorious racist Woodrow Wilson won in 1919 for his role in founding the quixotic League of Nations. Norman Borlaug won for deferring our date with Malthus via the Green Revolution.
The museum promotes “freedom of expression”, but the gift shop suggests that some perspectives are more welcome than others. A sampling:
Gro Harlem Brundtland, Prime Minister from 1990-1996, liked to say “It’s typically Norwegian to be good at things.” (source) The Nobel Peace Center is certainly consistent with this point of view.
Readers: What are you thinking about today with respect to the events of 9/11/2001?
The typical electric aircraft company is stuffed with cash on one end (e.g., “Joby Aviation raises $1.6 billion in SPAC merger at $6.6 billion valuation”) while huge promises come out the other end. So far there is little evidence of delivery on the promises that were made years ago, much less on the more recently made promises. Example promise: Joby now says that they’ll be operated eVTOL air taxis in 2024; they tout the fact that they got an air carrier certificate using, apparently, a Cirrus, as evidence that they are progressing toward this goal.
Generally speaking, the electric aircraft folks who showed up to Oshkosh 2022 had the same promises that they were making at Oshkosh 2018, e.g., “we’ll be certified and flying commercially in three years.” It doesn’t seem as though any progress has been made. The batteries are the same as in 2018. The computers and software that enable autonomy and/or idiot-proof human piloting are functionally the same as in 2018. The overall aircraft architectures are the same as in 2018. What these folks are doing with their $billions is a mystery. Let’s keep in mind that the U.S. involvement in World War II spanned the same time period: four years. Admittedly the percentage of GDP devoted to improving aircraft technology was larger, but the changes from 1941 to 1945 were dramatic indeed (B-17 to pressurized B-29, for example; development of the Lockheed P-80 jet fighter).
One area where it seems as though electric-powered aviation has a good chance of near-term success is carrying cargo, e.g., for “last mile” deliveries or going out to islands. What vehicle is already big enough to carry 200 lbs. of cargo and doesn’t need a runway? A single-seat helicopter! These have always been niche products since there aren’t a lot of folks who want to build and fly their own one-seat helicopter that is even trickier to fly than a Robinson R22. But what if the cabin is turned into a cargo compartment and the flying is handed over to a computer with the fast reflexes required to make this kind of machine safe? The folks behind the Mosquito helicopter, in partnership with a Canadian company, are doing just this:
At least for the moment, the heavy lifting will be done by a conventional gasoline-powered engine. Since Oshkosh is more about the human experience of aviation, including building one’s own aircraft, the biggest companies in drone cargo weren’t there, but the event reminded me to check in with Amazon. A June 2022 press release says “We are working with the Federal Aviation Administration (FAA) and local officials in Lockeford [California] to obtain permission to conduct these deliveries and will continue with that collaboration into the future.” So it could happen next week, next year, or next decade!
Readers: What’s your best guess as to when it will be possible to get an aerial Uber in at least 5 U.S. cities? And your best guess as to when it will be possible to get packages delivered by drone to your suburban house in at least 5 U.S. metro areas? Given the technical and regulatory challenges, I’m going to say 2028 for the Ubers and 2026 for the delivery-to-house drones. I think there will be regular drone-based delivery services to at least 5 remote areas of Canada, however, by 2024 (smaller population means it will be easier to get everyone to agree).
Related:
NASA at Oshkosh (thinking about how to ensure that these autonomous vehicles are airworthy on a continuing basis)
Nationalizations. Subsidies. Cash handouts. Price caps. Profit taxes. It’s back to 20th-century economics in Europe.
Governments are resorting to old-school solutions, long dismissed as bad policy, throwing vast amounts of money at the energy crisis engulfing the region, in a bid to avert a political, social and economic meltdown.
In response [to rising energy prices], E.U. governments have already earmarked more than $350 billion to subsidize consumers, industry and utility companies; ministers are to meet on Friday to finalize the bloc’s direct intervention in markets to grab excess profits, cap electricity prices and subsidize utilities companies.
The huge public spending is in addition to a nearly trillion-dollar stimulus package adopted over the past year to deal with the economic fallout from the pandemic, mostly through borrowing. The ballooning debt load would have normally caused an uproar in the bloc, where fiscal conservatism has dominated policy and politics for years.
“This is clearly an exceptional and one-off situation,” said Daniel Gros, a German economist and director of the Centre for European Policy Studies, a Brussels-based think tank, who normally takes fiscally conservative positions. “It’s different from increasing unemployment or social benefits structurally forever, and it’s a special situation that won’t last forever.”
The last paragraph is my favorite. Coronapanic was exceptional, so borrowing/printing and spending $1 trillion (amateurs! the U.S. spent $10 trillion) in 2020/2021 was okay. The rise in energy prices is 2022’s exceptional event, so borrowing/printing and spending another $1 trillion will also be okay. The end of the paragraph is also interesting. The U.S. actually did make “structurally forever” changes to the American welfare state, already the world’s 2nd largest (percent of GDP), the free-forever broadband benefit for those who choose not to work and King Biden’s forgiveness of student loans previously owed to the Crown. According to the Germans, therefore, we are headed for disaster.
Eurocrats seem to think that voters won’t notice the subtle inflation tax caused by these programs and/or future standard tax increases. They’re paying subjects with their own money:
The Belgian government has handed out $100 to every household irrespective of income.
This is a fascinating example of human psychology. Europeans will eventually have to pay for all of the energy that they’re consuming in 2022 and they’ll have to pay the 2022 price. But they’re going to be happier paying starting in 2023 if the government gives them a Three-card Monte game to watch in 2022. And they’ll be happier getting a pay cut via inflation than getting a pay cut in nominal euros.
What’s non-EU-member Norway doing, other than getting insanely rich from the war in Ukraine? The nation’s hydroelectric power is being sold at record prices to the rest of Europe. The oil and gas wells are producing unprecedented gushers of money. Consumers have to pay higher prices for natural gas, but the government steps in and pays, using the record revenues coming in for oil and gas, 90 percent of the amount over a set price. Cruise ships that formerly stopped in St. Petersburg now come to Oslo for two days per sailing, paying enormous port fees and buoying the local tour operators.
“The problem with socialism is that you eventually run out of other people’s money,” said Margaret Thatcher. Norway has amended this to “The beauty of socialism is that you never run out of the dinosaurs’ money”.
Here are some of Oslo’s gleaming new waterfront neighborhoods next to the gleaming new Munch Museum:
Camila Cabello partnered with the National Resources Defense Council Action Fund to help spearhead an initiative addressing climate change. And she’s not alone. Selena Gomez, Demi Lovato, Lin-Manuel Miranda, and Shakira joined alongside Leonardo DiCaprio, Lady Gaga and Billie Eilish in urging Congress to pass climate change legislation.
Same person (2022):
Tons of CO2 will be emitted to transport two people who have just seen Hamilton in New York to the other side of the Atlantic Ocean to see… Hamilton.
While trying to watch an Artemis rocket launch that was subjected to abortion care we happened to chat with a Gulfstream pilot who talked about working for some Silicon Valley righteous. They wouldn’t allow plastic bottles on their private jets because that was environmentally unsound. But they had no qualms about firing up a 100,000 lb. jet to carry one or two passengers on a leisure trip.
We are devastated by the U.S. Supreme Court’s ruling eliminating the right to an abortion which has been a right since 1973. In response, we are teaming up with organizations providing support, access, and travel expenses to those seeking these services.
We’re stronger when we work together. We can stand up for every person’s right to make decisions about their own body and their own lives. Join HAMILTON & Friends in the fight for reproductive access and reproductive choice today.
I hope that everyone will tune in today to watch our fellow Floridian Frances Tiafoe compete in the marked-safe-from-Djokovic U.S. Open tennis tournament. There are a variety of questions raised by Tiafoe’s situation. We are informed by daily reports in the media and on Facebook that Florida is being crushed under the boot of the dictator Ron DeSantis. Books are banned. Pregnant people cannot get on-demand abortion care when they go in for reproductive health care after 15 weeks of being pregnant persons. Science is suppressed. Public schools are not allowed to “instruct” kindergartners in all of the rites of the nation’s established religion. A professional tennis player can live anywhere in the world and, certainly, could live in any of the 49 states that are not tyrannically governed by Ron DeSantis. Why is Tiafoe, with his $6+ million in prize money so far, still a Florida resident?
Another question raised by my casual searches for matches and times using The Google… what country or countries are Medvedev and Khachanov from? Google shows nearly every other player next to a national flag. Are we to understand that, contrary to international law, Medvedev and Khachanov are stateless?
According to Google, Tiafoe beat a stateless player named “Rublev” two days ago:
Readers: Did you also notice this unusual situation?
If these emergencies are, in fact, emergencies, how is it possible for everyone’s attention to be directed toward the transition from an elderly monarch with purely ceremonial duties to a child of that monarch?
(Separately, what would Meghan Markle need to do in order to obtain the position of queen for herself?)
