The Evil Empire Owns You Now
And folks wonder why I don’t “do” “social media”…
Every month or so I get another invitation to “join” or “friend” or whatever someone on “social media”. IMHO, anything preceded by the word “social” is being Red Flagged with avoid or misdirection. But in the case of “social media” the sugar is that you get “connected” with other folks who are interesting to you or who may benefit you (such as via a job search on linkedin connections). The downside is that it is a treasure of PII Personal Identifying Information about you and rich in “contact trace” information. It just screams “security risk” to me (then again, I’m a computer security guy so all sorts of things make me worry).
Well, all you LinkedIn folks, you may now glory in the knowledge that Microsoft has just bought all your data.
http://money.cnn.com/2016/06/13/technology/microsoft-linkedin/index.html
In one of the biggest tech mergers of all time, Microsoft said Monday that it’s buying LinkedIn in a deal valued at $26.2 billion.
[…]
The deal combines Microsoft, which dominates the global market for computer systems, with LinkedIn, known as the main social network for professionals.Microsoft wants to use LinkedIn as a database of professional information and distribution channel for its software systems. LinkedIn gains additional financing and access to millions of people who could potentially join its network.
[…]
A sales rep could look up someone he’s pitching to through Outlook and see their LinkedIn information while writing an email pitch. In the future, Microsoft might even deploy Cortana as a virtual assistant to write the email too, based on that LinkedIn data.For HR professionals, Microsoft could integrate LinkedIn work history of interested candidates to determine compensation offers and job placement.
Congratulations, you have just been pwned… “All your informations are belong to us!!”
And folks wonder why I never respond to requests to join… Sigh.
Yellen At The Fed
Today the Fed announced… well… announced nothing. On one of the Biz Channels they had a quick set of statements by various observers with names like “Zombie Fed” and “Groundhog Day at the Fed” and more.
Essentially, The Fed is stuck in a Liquidity Trap (as I covered in the Global Liquidity Trap article) and can’t get out. Yellen is fixated on Monetary Policy (since that is what The Fed controls) while the “fix” is in the taxation / regulation / fiscal policy area. The Government now occupies so much of GDP that Fiscal Policy dominates and Monetary Policy simply can not fix bad fiscal policy. Taxes are too high, government spending is way too high, government debt is a runaway freight train to hell too high, and no interest rate can fix that. (Ask Japan, they have been trying ZIRP, or near it, for a few decades now with zero effect. ZIRP being Zero Interest Rate Policy).
So The Fed announced they would stay the course of steering in circles… which is probably the best thing they can do right now. Though, were I running The Fed, I’d have at least a 1/4% rate hike each year up to about 2% as long as “no bad thing” was happening. It would eventually normalize interest rates and take all of that stupidity out of the financial signaling system, while having very little impact on the present financial bubble. Perhaps even oh so slowly deflating a bit of it.
As it stands, all sorts of normally sane folks are now jumping on the “It’s Gonna POP!” bandwagon and saying to dump stocks, dump bonds, dump currencies and buy gold; thus driving up gold into it’s own (eventual) bubble. Me? I’m mostly still sitting in cash. The $US has been (as one Fox Biz lady announcer put it) “the prettiest girl at the dance” so far, despite recent softening. Yes, on my “to do” list is to reevaluate the global race to the bottom and find the better lifeboat “going forward”… Maybe this weekend. It will be a slow collapse over months to years… again, see Japan.
The global Financial PseudoWisdom is that “more stimulus” can fix it, but it can’t. Lower taxes and lower government burden on the economy is all that can fix it. The private sector is where jobs, wealth, and new productivity enhancements come from, and once Government crowds that out, be it by direct growth or misallocation of resources through Crony Capitalism / 3rd Way Socialism the economy stagnates. Then comes either revolution (see Venezuela in the early stages) or stagnation (Japan and much of the EU) or decay into bankruptcy (Puerto Rico, Greece, Cyprus, …).
So “pick one” America: Cut Government and Government Debt and thrive; or cruise in circles until the gas runs out and you sink.
Gators In Florida, News At 11
I guess this is how the lesser aware become aware. The highly emotional tearjerk story.
So for anyone not already inundated with it: A family from Nebraska was walking along in the water at the edge of the beach on the giant lake near The Grand Floridian resort. Now this thing runs about $500 to $1000 a night for a room, so assuming they were staying in that resort, these were folks who had some amount of money, and ought to have had common sense. But were not “gator smart”. The bottom line was that about 9:30 in the evening during prime gator hunting time, their 2 year old was snatched by a gator.
Yes, a horrible story. Yes, a tragedy of astounding degree. Pulled from mom’s hand as they waded, dad tried to wrestle the kid back. The only thing they did wrong was they forgot “Florida has gators. They hunt at the water’s edge. They especially like dusk and evening.”
I’ve seen other folks ranting about why Disney has a resort next to a ‘lake filled with gators’. They clearly also do not understand gators. Folks find gators in their swimming pool inside their “Florida Screen Room” from time to time. Baby gators can swim through most any reasonable fence that would hold back an adult gator from entering a lake, so any lake with a drain will have gators move upstream into it, even through a fence. Lakes without a drain will have gators walk in. A recent video posting showed about a 12 foot gator strolling through a golf course… so don’t play out of the water trap…
So, OK, I’m trying to remain emotionally centered… but really: Must one put up signs “Gators In Florida!”? The ball teams have names like Gators. They sell “Gator Jerky” from roadside trucks. You can’t drive into the State without seeing signs for Gator Parks and Gator Feeding and more. Sigh. “Here’s your sign.”
Gators In Florida… this is news…
Musings from the Chiefio 
You can’t fix stupid. Someone said that.
National Parks are experiencing multiple problems, such as the fellow, now gone, walking on thin crust over a hot acid pool.
~~~~~~~~~~Other news:
Revolution aborted:
Venezuelan brewer and food producer Empresas Polar will soon resume beer production after obtained a $35 million loan from Spanish bank BBVA.
Not that I know anything (Econ 101, 50+ yrs ago doesn’t leave a lot of dents in the memory), but I have remembered the rule of thumb that the price of money’s natural rate is 4% plus the inflation rate. Are you suggesting the inflation rate is -2%? My own cost of living increase over the last three years or so is about 2-3%/annum. Am I wrong?
IIRc the rule of 72
72 divided by the rate of inflation is the time for the value of your money to halve
@Gary Turner:
I’m only using 2% as that is The Fed target inflation rate, so interest rate ought to be at least that. There are many interest rates, and the lowest is the Fed Discount Rate, so that 4% you quote is likely bank retail rather than The Fed Rate (that is to the banks).
As to present inflation rate: Official statistics are officially screwed (since Reagan had them jigger the CPI). My best guess is that we are presently running about 6% on “things I buy” and about -2% on “wages I can get”… but YMMV depending on where you live and what you buy.
My current “quick check” is the price of a 1 lb bag of rice or beans. It had been 35 ¢ a few years back, then hit 1/2 buck, now it is $1 at the cheap places and $1.30 at the better stores… Also the price of a mediocre beer has gone from about 75 ¢ each to $8 / six pack… but that is in California where we pay extra for everything… (Including a 4% “health tax” that showed up on a dinner bill in a San Francisco hotel / restaurant this last weekend…)
So no, I don’t think you are wrong.
@John F. Hultquist:
Oh Joy! Venezuela is saved… for now ;-)
@ Another Ian:
Yup: https://en.wikipedia.org/wiki/Rule_of_72
The Fed needs to raise the rate to at least 2% just to have any influence. Whether it is the right time or not is immaterial. Anything else is basically running in circles as you say.
I’m pretty sure that every time Janet gets a notion to nudge the rates up a bit, she calls Valerie to let her in on the plan and is then given a firm denial.
Because they are in a liquidity trap and any significant move in interest rates makes the market freak out I think the only solution (if they had the guts to try it) would be to announce a gradual creeping increase in the rate say 5 basis points every week for the next x weeks. That would be a small enough increment where people might not panic to dump their stocks, they would have both time and certainty to drive their choices to make rational corrections in market behavior.
If you think about it when you get down to very low interest rates if your effective Federal Funds rate is 0.37% a .25% bump in rates on a percentage of change basis is a pretty large step change.
That would be like making a 5% increase in a federal funds rate of 6%.
http://www.federalreserve.gov/releases/h15/current/
As long as people keep spouting inflation rate, they’re going to continue making the same mistakes. There is no such thing as an inflation rate. Yes, you can calculate a price change rate, but inflation is *felt*, which leads to an internal alteration in valuations; and all economic valuations are personal, subjective, contingently true, made under uncertainty, and being damped and driven, subject to rapid change from manic to panic with a slower change from panic to manic. Stop asking the wrong question!
My heart sank when I read the headline. I have been careful to avoid all social media for the reasons you have mentioned. But, having lost my job after 13 years with the same firm (they had to get rid of the so-called old guys and make way for the more youthful, pliable and obiedient ones), I started a company and felt Linkedin was a necessary evil. It felt like I made a deal with the devil clicking on the contract consent button. It is actually helping me connect to potential clients more easily than traditional methods. But now I am reconsidering. MS is an evil corp, there is no doubt. The grip of the controllers squeezes ever more tightly. God bless us all.