Monthly Archives: November 2018

Volatility in the Market

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Some folks worry about the return of turbulence—their term—to stock market pricing.

Market turbulence is leading some investors to call on the Federal Reserve to halt its campaign of interest rate increases….

No need.  The Fed needs to get its benchmark rates back to levels historically consistent with its goal of 2% inflation instead of its heretofore artificially suppressed rates.  It’s getting close, but the Fed isn’t there yet—it has a couple-three more rate increases yet to go.

Those investors need to understand a couple of things about volatility—or turbulence—in the market.  For short-term traders, volatility presents buying opportunities.  For long-term investors, volatility is just noise in the system, well worth ignoring.  For yield chasers, volatility represents opportunities to go broke in short order, culling the herd for the benefit of the rest of the trading/investing population.

Nevertheless, we get guys like Stanley Druckenmiller, who once ran a George Soros hedge fund and has hectored the Fed to raise rates from those artificial lows, saying

I would pause and see if the market knows something we don’t[.]

It’s almost always the case, though, that the market knows something we don’t.  And I include my august self in that “we.”

The Fed needs to stay the course, or if a change in pace is warranted, the Fed needs to get quickly to those historically consistent levels.  In either case, the Fed then would need to sit down, be quiet, and let the market do what it knows more about than the rest of us.

EU Counterproductive Meddling

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Italy is standing tall on its budget for the next fiscal year, despite the European Union’s disapproval of it.

The EU Commission has again rejected Italy’s proposed budget on Wednesday, paving the way for financial sanctions to be applied in the next few months.

The specific bone of contention centers, mostly, on projected budget deficits as a per cent of GDP.  The Italian budget deficit works out to 2.4% of GDP, the Italians say, which is well within the 3.0% EU limit; however, the EU Knows Better: the Commission claims the deficit will exceed 3.0% by 2020.  Whom to believe….

One indication of integrity is this.  Italy’s debt-to-GDP ratio currently stands at 130% of GDP, which is well above the EU-recommended upper bound of 60%.  In the Commission’s view, though, that recommendation is an EU mandate, and it’s demanding that Italy also act to reduce its debt-to-GDP ratio.

Or there will be consequences.

 [I]f Italy still fails to comply [on the budget deficit matter], the Commission can apply financial sanctions, which can include fines up to 0.2% of GDP….

Another indication. The EU thinks the Italian government is spending too much, so it will punish the nation by making the Italian government spend even more.

Other member nations need to take notice as they contemplate their own future in the EU.

A Necessary Start

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Secretary of Education Betsy DeVos is on the verge of issuing actual rules (not “guidance” letters) directing the way in which colleges and universities must handle accusations of sexual assault.  These rules will include

  • the right of every survivor to be taken seriously and the right of every person accused to know that guilt is not predetermined
  • both the alleged victim and the accused would be able to inspect and review all evidence
  • All Title IX hearings would include cross-examination, which could occur in-person or by live stream, with campus adjudicators allowed to observe the demeanor of witnesses as they assess credibility
  • statements of anyone who refuses cross-examination could not be considered in the final determination Title IX judges would be required to consider both inculpatory and exculpatory evidence.
  • acknowledges that schools’ “treatment of both complainant and respondent could constitute discrimination on the basis of sex”
  • both the alleged victim and the accused would enjoy the same opportunities for appeal, and, if both parties agreed, administrators could offer informal resolution processes like mediation
  • universities could still use a weaker “preponderance of evidence” as the standard of proof, similar to civil cases, rather than a higher “clear and convincing evidence” standard.

The proposal is a good start toward redressing the inequities of the Obama administration’s infamous Dear Colleague Letter, but there remain a couple of serious weaknesses.

One is the continued use of the preponderance of evidence standard.  The problem with this is that accusations of assault, whether sexual or other, are accusations of felonies.  That demands the clear and convincing evidence standard.  Related to this is the investigation and adjudication itself.  Such accusations demand the police and a criminal court conduct the investigation and trial, not the school and its administrators.  Sexual harassment accusations also need a more serious standard of proof than 50%-plus-one-minim of belief.

And: as long as acquittals—however a college/university wants to style them—are appealable by the accuser, there still is no justice possible in the proceedings or the rules that structure them.

That Progressive-Democrats object even to this nod toward justice, though, is instructive for 2020 and what a Progressive-Democrat Congress and White House will do to individual liberty.

Bullying

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You can’t wear the clothes you can afford to buy, that are good quality, and that look nice without being ostentatious (you can’t wear your ostentatious rags, either, come to that).  That’s bullying, don’t you know.

That’s the attitude of the Church of England’s Woodchurch High School in northwestern England (it’s across the Mersey from Liverpool—yes, that Mersey).  They’re pretending to “poverty proof” their school, so they sent a letter to their students’ significant overseers (the institution actually refered to “parents/carers”:

As you are all aware from an email that was sent out yesterday, pupils will not be permitted to bring in Canadian (sic) Goose and Monclair (sic) coats after the Christmas break.

In the name of anti-bullying, then, this school’s management is going to bully a different group of kids.  Because clothes make the child, not what he’s taught about character.

Their hypocrisy stinks.

Happy Thanksgiving

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I first posted this in 2011.  I think it bears repeating today.

Today I thought I’d share some thoughts on the matter offered by other folks who are a bit more articulate than I.  In the meantime, be thankful for who we are and where we are: whatever straits in which we find ourselves, we’re orders of magnitude better off than most everyone else in the world.

Now therefore I do recommend and assign Thursday the 26th day of November next to be devoted by the People of these States to the service of that great and glorious Being, who is the beneficent Author of all the good that was, that is, or that will be — That we may then all unite in rendering unto him our sincere and humble thanks — for his kind care and protection of the People of this country previous to their becoming a Nation — for the signal and manifold mercies, and the favorable interpositions of his providence, which we experienced in the course and conclusion of the late war — for the great degree of tranquility, union, and plenty, which we have since enjoyed — for the peaceable and rational manner in which we have been enabled to establish constitutions of government for our safety and happiness, and particularly the national One now lately instituted, for the civil and religious liberty with which we are blessed, and the means we have of acquiring and diffusing useful knowledge; and in general for all the great and various favors which he hath been pleased to confer upon us.
-George Washington, 3 October 1789

The year that is drawing toward its close has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added which are of so extraordinary a nature that they cannot fail to penetrate and soften even the heart which is habitually insensible to the ever-watchful providence of Almighty God. … No human counsel hath devised nor hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God, who, while dealing with us in anger for our sins, hath nevertheless remembered mercy.
-Abraham Lincoln, 3 October 1863

We are profoundly grateful for the blessings bestowed upon us: the preservation of our freedom, so dearly bought and so highly prized; our opportunities for human welfare and happiness, so limitless in their scope; our material prosperity, so far surpassing that of earlier years; and our private spiritual blessings, so deeply cherished by all. For these we offer fervent thanks to God.
-Harry S Truman, 22 November 1950

Perhaps no custom reveals our character as a Nation so clearly as our celebration of Thanksgiving Day. Rooted deeply in our Judeo-Christian heritage, the practice of offering thanksgiving underscores our unshakable belief in God as the foundation of our Nation and our firm reliance upon Him from Whom all blessings flow.
-Ronald W Reagan, 27 November 1986

This Thanksgiving, as we enjoy the company of family and friends, let us gratefully turn our hearts to God, the loving Source of all Life and Liberty. Let us seek His forgiveness for our shortcomings and transgressions and renew our determination to remain a people worthy of His continued favor and protection. Acknowledging our dependence on the Almighty, obeying His Commandments, and reaching out to help those who do not share fully in this Nation’s bounty is the most heartfelt and meaningful answer we can give to the timeless appeal of the Psalmist: ‘O give thanks to the Lord for He is good: for his steadfast love endures forever.’
-George H W Bush, 14 November 1990

And then enjoy yourselves; have plain, raw fun.  That’s not just allowed, it’s a Good in its own right.