Cool for cats

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The future is increasingly (increasingly increasingly) renewables.

Oil is not going to go out-of-fashion. The supply/demand looks like it will stay roughly in balance.

The future seems to coming-on quicker than it used-to (and I don’t think it is because I am becoming older and fartier (although that is also true)).

It is not `technology` that is accelerating … I think technology is pretty stagnant.

It is, I think, a `pie-size` problem, that is growing.
That is … the problem is growing, because the pie is shrinking in size.

I see the pie as `the economy`.
The economy pie grows as money is passed-around.
The `accelerant` for this money-passing is profits.
Profits are based on `margins`.
Margins are exploitable opportunities for profits.
The economy accelerates on profit-margins.

The modern economy is not accelerating, because profit-margins are being squeezed.

(The economy can be kept going on credit … but this is only a short-term solution)

Modern Western economies have split into –
1. The squeezers.
2. The squeezees.

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NYT
Loans ‘Designed to Fail’: States Say Navient Preyed on Students

In recent months, the student loan giant Navient, which was spun off from Sallie Mae in 2014 and retained nearly all of the company’s loan portfolio, has come under fire for aggressive and sloppy loan collection practices, which led to a set of government lawsuits filed in January. But those accusations have overshadowed broader claims, detailed in two state lawsuits filed by the attorneys general in Illinois and Washington, that Sallie Mae engaged in predatory lending, extending billions of dollars in private loans to students like Ms. Hardin that never should have been made in the first place.

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Alberto Nardelli at Buzzfeed
The EU Says Its Banking And Medicine Agencies Will Not Stay In Britain
“The United Kingdom is leaving the European Union, and it will have no say in the location of the EU agencies.”

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  • amoeba

    The UK is becoming a squeezee.

    “For similar reasons, it is likely the UK will be left without MEPs, including Nigel Farage, in the European parliament, or commissioners in the European Commission, once the country leaves the EU.”

    “likely” is not the word; it is “certain”.

    Although profits are certainly a mainstay of growth, it is the allocation of those profits that determines whether “spenders” or “savers” are the recipients. There is a chronic trend for the “savers” ie the rich non-spenders to accumulate more of the profits and the workers, aka, “earn-it-or-borrow-it-and-spend-it-allers” to be given an ever smaller piece of the apple crumble.

    The spenders drive the economy, the savers drive the stock market.

    • Debts are fixed. Asset values … not so much.

      Would you prefer debts … or investments~?

      • amoeba

        There is not much fixed about anything really. The debtor can default, and solid debtors like the Great US of A don’t return much interest. Currencies can go up and down on weird whims. As indeed can gold.

        A mix is required to provide some stability and some income.

      • CSArichardo

        Trick questions ? Debts are investments ! Maybe I missed something ??

        • Please explain – `Debts are investments`?

          • CSArichardo

            Maybe I should say debts are assets to some people (banks, etc) and liabilities to those who borrow the money (people or companies who are also legally people !)

            • What about investments~?

              • CSArichardo

                An asset inflates in price or deflates in price… a debt stays constant but not if borrowed in a rising foreign currency.

                So in reality debts are only constant or fixed in the money they were borrowed in.

  • amoeba

    The Brits are going to take this lot up the arse.

    “The administrative chill is biting even before Britain leaves the EU. An internal memo reveals Brussels is starting systematically to shut out British groups from multibillion-euro contracts and urging companies to decamp to one of the 27 remaining EU members as it prepares for Brexit.

    This is after it emerged last week that UK companies face being locked out of lucrative European space contracts. Britain is also fighting to remain the home of two of the EU’s most prestigious agencies covering medicines and banking after the split.”

    The tail is certainly not going to wag the dog.

    With Europe outside of Germany limping along, and UK contractors shut out of Euro-contracts, it will provide a decent boost for the European economy. This will not have escaped the Europeans. Wonder if there will be financial incentives to the Euro-companies to move production back to Europe. That would be geat news for say Spain and Italy if the Germans built plants over there.

    But will Britain now take the ludicrous “tit for tat” path, which will screw up the UK economy even more.

    Any bets for the UK gdp over the next five years?

    My money is on a lurch down and then flatlining. The number crunchers will be working overtime to modify the inflation deflator so that they can avoid nasty words like “recession” and the “d” word.

    Australia and New Zealand are also turning inward with a “jobs for natives” initiative, similar to Trump.

    One cannot say that we live in boring economic times.

    • I kinda see it as a `if we are going to get to there from here … then~??`

      As in: If Europe is going to contract … it has to contract somewhere.
      If the world is going to contract … it has to contract somewheres.

      The only way round the contracting future is `dicking with the money`.
      Question: Where did China get all the money to build-out over the last 30 years (savings~?)?

      The West is going to have to play `money for nothing` (or the chicks will flee).

      • amoeba

        From where I am sitting the world is definitely not contracting.

        Outside of China, with its 1,400,000,000 army of consumers there are 260,000,000 Indonesians moving up the economic ladder, Vietnam has 95,000,000, Philippines 104,000,000 all keen to work and progress.

        The chaotic mess of India has also nearly 1,400,000,000 budding consumers.

        These are countries where they are starting from a very low base in terms of income/capita, so a doubling of gdp in say 15 to 20 years or sooner is certainly possible. There is no way that the UK, Greece, France or similar countries are going to be performing like that.

        The money for nothing game is the way to go. But I really haven’t got a clue where the limits are, whether it would be responsibly used to provide jobs and boost consumption, or whether it would be squandered and end up in the stock market and property bubble. Anyway, the Central Banks would not play along, as we can’t have irresponsible politicians running the show, can we? The IMF would go beserk and the BIS would probably also whinge.

        IMO the current covert government debt monetisation is about as far as it will be allowed. Now they are putting out “feelers” in preparation for rolling back the Fed purchases.

        • Where are all these nice Eastern countries going to get all the money from~?

          (I am not saying that they have to get it from the rich West … I am asking if they will get it from the same place China got all its development money)

          • amoeba

            The banks will make a whole bunch of loans…….. and the money will whizz around and around.

            • Cannot banks in Manchester do the same~?

              • amoeba

                Sure, but the Brits are already loaded up to the hilt with debt and there are very few investors interested in building factories and putting in more infrastructure in the UK. The cost of doing business is too large and the risk/reward ratio is not attractive. Particularly with the Brexit.

                UK banks tend to lend on existing assets like housing. Business loans are high risk unless there is property put up as collateral.

                Build a factory in Vietnam, engage willing labour at 150 Quid/month, and churn out vast quantitities of low cost clothes, shoes, electrical goods and components that the natives can also afford. Ship out the stuff around Asia and then over to Europe.

                That’s the way to go.

                • CSArichardo

                  Sure the Brits can but its “higher” inflation risk…you know the “state of the economy” that prevents it from happening ????

                  • amoeba

                    Yes, I can’t see how the UK can avoid slipping off the current plateau into a recession.

                    Nobody in their right mind is going to make any large investments until the trading situation with the Eurozone is clarified. And Brussels is not even going to think about trade deals until the divorce is finalised.

                    So there is going to be at least a two year hiatus on investment decisions.

                    • What if the UK government guaranteed the investment opportunities (a bit like in China)?

                    • CSArichardo

                      It only works if you control the economic pyramid which I think they (the Brit pyramid) can do !!??

                    • amoeba

                      Yep.

                      That has been one of my rants for some time.

                      Governments should either encourage and sponsor investment or get out of peoples’ faces so private industry can get on with it.

  • amoeba

    Good Kahneman interview.

    He tangented on the “nurse discussion” we had.

    How should intuition and algorithm based diagnosis work together. At one point he seemed to think that we should at some point back off with the algorithm stuff and allow a bit of human intuition to creep in. But towards the end he was talking about the “singularity” when artificial intelligence could create an even higher level of artificial intelligence.

    Maybe I should get a dog before I become a pet of a higher level AI program?