Tuesday, December 31, 2013

"JibJab 2013 Year in Review: 'What A Year!"'

Not bad but still working to recapture the magic of 2004's "This Land" video (below).
From JibJab:

JibJab Originals

The Most Downloaded Papers at the Social Science Research Network: 2013 Edition

From the SSRN blog:
2014 is right around the corner and it’s about that time to highlight our most downloaded papers from the past year. These articles covered it all – organ transplants, game theory, asset management, government surveillance and privacy and beyond.
Congrats and cheers from all of us at SSRN!
Top Papers January-June 2013
1. A Brief Introduction to the Basics of Game Theory
by Matthew Jackson (Stanford University – Department of Economics)
2. Do Defaults Save Lives?
by Eric Johnson (Columbia Business School – Marketing) and Daniel Goldstein (Microsoft Research New York City)
3. The Dishonesty of Honest People: A Theory of Self-Concept Maintenance
by Nina Mazar (University of Toronto – Joseph L. Rotman School of Management) and On Amir (University of California, San Diego (UCSD) – Rady School of Management) and Dan Ariely (Duke University – Fuqua School of Business)
4. Ham Sandwich Nation: Due Process When Everything is a Crime
by Glenn Reynolds (University of Tennessee College of Law)
5. ‘I’ve Got Nothing to Hide’ and Other Misunderstandings of Privacy
by Daniel Solove (George Washington University Law School)

Top 5 Papers July-December 2013
1. A Brief Introduction to the Basics of Game Theory
by Matthew O. Jackson (Stanford University – Department of Economics)
2. Legal Regulation of the Multimodal Carriage of Goods
by Nadezda Alexandrovna Butakova (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
3. A Quantitative Approach to Tactical Asset Allocation
by Mebane T. Faber (Cambria Investment Management)

Scientists Favorite Jokes: 'An Electron and a Positron Walked into a Bar…'

From the Guardian:
Science is a very serious business, so what tickles a rational mind? In a not very scientific experiment, we asked a sample of great minds for their favourite jokes

Batman: salt of the earth. Photograph: Allstar/Cinetext/20 CENTURY FOX


■ Two theoretical physicists are lost at the top of a mountain. Theoretical physicist No 1 pulls out a map and peruses it for a while. Then he turns to theoretical physicist No 2 and says: "Hey, I've figured it out. I know where we are."
"Where are we then?"
"Do you see that mountain over there?"
"Well… THAT'S where we are."
I heard this joke at a physics conference in Les Arcs (I was at the top of a mountain skiing at the time, so it was quite apt). It was explained to me that it was first told by a Nobel prize-winning experimental physicist by way of indicating how out-of-touch with the real world theoretical physicists can sometimes be.
Jeff Forshaw, professor of physics and astronomy, University of Manchester

■ An electron and a positron go into a bar.
Positron: "You're round."
Electron: "Are you sure?"
Positron: "I'm positive."
I think I heard this on Radio 4 after the publication of a record (small) measurement of the electron electric dipole moment – often explained as the roundness of the electron – by Jony Hudson et al in Nature 2011.
Joanna Haigh, professor of atmospheric physics, Imperial College, London
■ A group of wealthy investors wanted to be able to predict the outcome of a horse race. So they hired a group of biologists, a group of statisticians, and a group of physicists. Each group was given a year to research the issue. After one year, the groups all reported to the investors. The biologists said that they could genetically engineer an unbeatable racehorse, but it would take 200 years and $100bn. The statisticians reported next. They said that they could predict the outcome of any race, at a cost of $100m per race, and they would only be right 10% of the time. Finally, the physicists reported that they could also predict the outcome of any race, and that their process was cheap and simple. The investors listened eagerly to this proposal. The head physicist reported, "We have made several simplifying assumptions: first, let each horse be a perfect rolling sphere… "
This is really the joke form of "all models are wrong, some models are useful" and also sums up the sort of physics confidence that they can solve problems (ie, by making the model solvable).
Ewan Birney, associate director, European Bioinformatics Institute

 ■ What is a physicist's favourite food? Fission chips.
Callum Roberts, professor in marine conservation, University of York
...MANY MORE, some even worse than the above.

Indicators: Watching for a Down Start for the Market in 2014

This is real short term stuff.
Contrary indicator: Gold reversed this morning's declines and is now up on the day by a few cents.

We've mentioned before that First Solar (FSLR) has shown some predictive ability, with anywhere from a 1 day to 1 week lag.
After being a major gainer during 2013 it is down 2% today.
Ditto for another of the more speculative issues, Tesla. Biggest gainer among major stocks in 2013, down 2.26% today.

S&P 500 Index 1846.36 up 5.29
DJIA 16,552.43 up 48.14.
TSLA $149.00
FSLR $54.51

Recovery: Worst. Loan. Creation. Ever.

From ZeroHedge:
For all the endless talk of a recovery during the past five years, there is a very tangible reason why for most people this is nothing but spin, propaganda and lies: when one strips away the retroactively adjusted GDP, the seasonally adjusted (and politically mandated) counting of temp jobs, the constantly upward revised jobless claims, the Fed's $4+ trillion balance sheet of course, and even the declining (yes, declining) real disposable income per capita, what one is left with is the lowest loan creation out of a recession (or depression) in history, and is at indexed levels last seen during the Lehman collapse over five years ago!
Why is loan creation important? Because in traditional economics (not their "New Normal" equivalent, where central planning decides everything), loans - i.e., money created by commercial banks - ultimately leads to GDP growth. It also has a direct bearing on the steepness of the bond curve and thus, inflation expectations. Conversely, lack of loan creation ultimately means the government is forced to adjusted the definition of GDP to make it seem as if there is growth, or to rely on an inventory stockpiling boost to "growth" and all other recently seen gimmicks to force the conviction of "growth."
There's more. As the charts below show, there is a direct link between loan demand (and thus creation), and EPS growth, Industrial Production, Employment and CRE development. Obviously, the lower the loan creation, the worse all of these will look.
But how is it possible that banks continue to function in an environment in which there has been zero loan creation for the past 5 years? Simple: the banks' excess deposits (a liability) has been pumped higher by about $2.5 trillion thanks to the Fed's excess deposits...MORE

Ripe for rebellion? "Where protest is likeliest to break out"

From The Economist:

From anti-austerity movements to middle-class revolts, in rich countries and in poor, social unrest has been on the rise around the world. The reasons for the protests vary. Some are direct responses to economic distress (in Greece and Spain, for example). Others are revolts against dictatorship (especially in the Middle East). A number also express the aspirations of new middle classes in fast-growing emerging markets (whether in Turkey or Brazil). But they share some underlying features.

The common backdrop is the 2008-09 financial crisis and its aftermath. Economic distress is almost a necessary condition for serious social or political instability, but it is not a sufficient one. Declines in income and high unemployment are not always followed by unrest. Only when economic trouble is accompanied by other elements of vulnerability is there a high risk of instability. Such factors include wide income-inequality, poor government, low levels of social provision, ethnic tensions and a history of unrest. Of particular importance in sparking unrest in recent times appears to have been an erosion of trust in governments and institutions: a crisis of democracy.

Trust has been in secular decline throughout the rich world since the 1970s. This trend accelerated and spread after the collapse of communism in 1989. And as opinion polls have documented, it has sped up again since the 2008–09 financial crisis.

65 countries will be at a high or very high risk
The Economist Intelligence Unit (EIU), a sister company of The Economist, measures the risk of social unrest in 150 countries around the world. It places a heavy emphasis on institutional and political weaknesses. And recent developments have indeed revealed a deep sense of popular dissatisfaction with political elites and institutions in many emerging markets.

The protesters in Turkey in 2013, for example, were dissatisfied with some abrupt decisions by Recep Tayyip Erdogan’s government. In Bulgaria, what started off as protests against higher electricity bills turned into generalised anti-government demonstrations complaining of corruption—and led to the fall of the government. Protests have continued.

What to expect in 2014? The recession is now over or has eased in much of the world. Yet political reactions to economic distress have historically come with a lag. Austerity is still on the agenda in 2014 in many countries and this will fuel social unrest....MORE

Fun Fact: More Than Half of All U.S. Farmland Used to Produce Grain is Rented (and what that means)

From Reuters via agProfessional:
High cash rents to squeeze Midwest grain farmers in 2014
Rents on prime U.S. crop land are expected to stay high in 2014 despite a sharp drop in grain prices, raising financial pressure on farmers who rent most of their land and risk big losses in the coming year, analysts and bankers say.

More than half the 250 million acres (101 million hectares) of corn, soybean and wheat land in the United States, the world's biggest grain exporter, are rented. Negotiations on 2014 farm land leases are going on in the Corn Belt and Great Plains, with farmers, absentee owners and their farm managers, and farm lenders all penciling out projected grain growing profits and losses.

"With the recent drop in crop prices and the stickiness of land rents not falling as quickly as crop prices, many farmers are feeling the squeeze once again between revenue, costs and rent," said Kent Olson, an economist at the University of Minnesota.

That is a marked difference from five years of record or near-record farm income driven by record demand for biofuels and exports, capped with record grain prices in 2012 during the worst U.S. drought in 50 years. Now things have changed. The record large U.S. harvest in 2013 bins has dropped grain prices 30 percent in six months.

Bottom-line estimates for growing corn in 2013 in northern Illinois, for instance, now project a loss of $81 an acre compared to net gains of $188 an acre in 2012 and $251 in 2011, according to farm economist Gary Schnitkey of the University of Illinois.

For 2014, projections based on current costs and prices pencil out to a loss of $53 an acre for corn, he says. The outlook is similar in Iowa and Minnesota, which with Illinois produce more than a third of all U.S. corn and soybeans.

The problem for renters, though, is two-fold. Lease rates almost always lag drops in grain prices as landowners see what the market will bear. And farmers usually chase land prices for fear of losing the acreage in future to some other neighbor who will risk and pay more....MORE

"Copper Supply in Focus as Market Moves to Surplus"

LME  7,387USD/t
From Mineweb:
As with most commodities, the copper market was driven by China in 2013 and there is every reason to believe the Asian giant will remain in the driver's seat in 2014.

But, while China remains the driver, 2014 could well mark the year the metal switches from the demand car to the supply car as Chinese consumption levels peak and new sources of supply come on stream.
According to Wood MacKenzie's Sophie Chung, total copper consumption is expected to grow at around 4% per annum over the next five years, with China being the main user.

Speaking at Mines and Money in London earlier this month, Chung explained that, while Chinese demand is expected to remain robust over the coming years, "based on how China has grown since 2000, we expect its peak consumption rate to peak in 2013, just below the peak rates of Germany, the US and Japan."
This is in contrast to the supply side of the picture which was, according to Natixis, surprisingly good in 2013 – mined output rose around 8% during the year as new mines such as Oyu Tolgoi and Ministro Hales came online and production from Collahuasi and Escondida surprised on the upside – and likely to get better in 2014.

But, while mined output rose over the year, a variety of smelting issues meant that refined copper was harder to come by, which explains the rise in both treatment and refining charges and physical premiums.
According to Natixis, the combination of both the imminent arrival of as much as an extra million tonnes of mined output per year and the tightness currently on display accounted for the moderate rise in prices to around $7,200/tonne.

But, it says, “Through the course of 2014, additional smelting (and SX/EW) capacity should come on-stream, helping to facilitate a rise in refined copper production and taking the market into a gradually expanding surplus. This should ultimately limit gains in copper prices, although the tightness of the market could push spot prices higher in the very near term."

Wood Mackenzie believes that this surplus should last until around 2017, reflecting the various new projects that are coming online....MORE
COMEX (March) $3.3940

The Most Expensive U.S. Homes That Came on the Market in 2013

From Curbed:
Mapping the Country's Dozen Priciest Properties in 2013

2013 was a funny year for blockbuster real estate—despite the fact that last 12 months were seemingly packed with vanity pricing, nine-figure listings, and enough "historic" pedigrees, $20M-plus renovations, and beach frontage to give even die-hard consumers of ostentatious real estate a stomach ache, the crème de la crème of pricy listings have (surprise!) struggled to maintain their inflated asks, particularly when one looks at the fates of 2012's most expensive properties. Casa Casuarina, which was listed last year for $125M? Sold at auction for $41.5M. The three $95M NYC apartments? Yeah, not one sold. But what of the fates of this year's blockbusters? Well, Copper Beech Farm, which roared onto the market for an eye-popping $190M, has already been slashed by $50M.

 The map below charts the 12 priciest properties to officially hit the market in the Untied States in 2013, and the fates that have befallen them. Do have a look:
Copper Beech Farm, $190M
Indian Field Road, Greenwich, CT 06830
Most expensive listings of 2013
Copper Beech Farm, $190M
Copper Beech Farm, $190M 
Indian Field Road, Greenwich, CT 06830

Copper Beech Farm, the 50-acre (debt-laden) Greenwich estate that roared onto the market in May with a record-setting $190M price tag, has since suffered the fate shared by so many of its nine-figure peers: it's been mercilessly slashed, now asking $140M. Owned by timber mogul John Rudey, the property is stocked with a 12-bedroom mansion, a whopping 4,000 feet of water frontage, and not one, but two offshore islands. [link] Website
Crespi Estate, $135M 
5555 Walnut Hill Lane, Dallas, TX 75229

In January, Texas business honcho Tom Hicks put his vast, Dallas, Texas, spread on the market for a staggering—nay, otherworldly$135M, making it the priciest ask in the country at the time (no small feat, indeed). Despite once owning the Texas Rangers and being appraised by Forbes in 2009 to have a net worth of about $1B, Hicks has stumbled financially in the last few years, so it may be no real surprise that he's looking to unload a house that is, as the Real Estalker points out, 10 times the size of the average American home. [link

McKinsey Has Nothing on Dogbert the Consultant

The last strip of the year from Dilbert.com:

 The Official Dilbert Website featuring Scott Adams Dilbert strips, animations and more

Dilbert's creator, Scott Adams must be wallowing in his outbreak of credibility or something; in years past Dogbert would have made sure he had the client's correct billing address.
It's all about the money (loot, swag, moolah, wampum, see blog descriptor above, etc) for the avaricious pooch:

Dec. 30
Dec. 28

Deflation Impact: "US Population Growth Slowest Since 1937"

Today's stroll down memory lane is prompted by this story at ABC News:
These days, everything is moving faster in the U.S.,  except for population growth.
According to the U.S. Census Bureau figures released Monday, growth from July 1, 2012 through July 1, 2013 was 2.3 million people, or 0.71 percent of the total U.S. population.
That’s less than last year’s 0.75 percent growth, and the slowest rate since 1937.
Census Bureau researchers say the slow expansion of people in the country is due to Baby Boomers, by far the largest segment of the population, getting older, as well as fewer immigrants entering the U.S.
Meanwhile, in case you’re interested, the U.S. population when the clock hits midnight Tuesday will stand at 317,297,938, give or take a few people.  That’s an increase of 2,218,622 from last New Year’s Day.
From our March 2009 post "Demographically Driven Inflation and Deflation":

Political Calculations is quirky. On the one hand they link to Prof. Shiller's merged Cowles/S&P data (first rate scholarship/database). On the other they do a "On the Moneyed Midways" linkfest that seems aimed at a totally different target audience. Here's an example of the former:
There are two questions that we'll seek to answer in this post:
  1. How might the change in a nation's population over time affect its rate of inflation?
  2. Are U.S. baby boomers the most inherently evil generation ever in economic history?
Before we go any further though, for the sake of eliminating the suspense involved, here are the answers to both questions:
  1. Predictably.
  2. Yes.
We are being a bit facetious with our second question, but let's see if you don't draw a similar conclusion after we work through the first question.
That question arises as we've recently been looking to develop a model for anticipating the future rate of inflation in the United States, which we could then incorporate into the kind of tools we develop and make available to everybody in the world here at Political Calculations. In doing that, we began with a July 2006 paper by Ivan Kitov, a geophysicist whose work in economics we first became familiar with back in 2005 (via one of David Smith's discussion forums, whose archives unfortunately appear to only go back four years), which has intrigued us for some time: Exact Prediction of Inflation in the USA.
In the paper, Kitov presents his findings of a remarkable correlation between the measured rate of inflation observed in the U.S. and the change of the size of the U.S. workforce over the years from 1965 through 2002, which is observable in the figure we've excerpted from the paper. In this chart, we see that inflation, as measured by the GDP deflator, closely follows the trajectory determined by the change in the size of the U.S. labor force (dLF) with respect to the total labor force (LF) some two years earlier. In simpler terms, changes in the rate of inflation in the U.S lag the change in the relative size of the U.S. labor force by a two year period.
How That Might Work How might changes in the size of the US. workforce drive changes in the U.S. inflation rate? We suspect that the answer to that question lies in the change in consumption patterns driven by those entering and exiting the U.S. labor force....MORE, including some interesting charts.

"Gold And Silver Smashed To 2013 Lows"

I know it's getting repetitive but, "we're still looking for $875 sometime in Q3 2014".
Gold $1185.90 last, $1181.40 low.
Silver $18.87 last, $18.72 low.
From ZeroHedge:
As the US session starts, despite a dearth of news and actvity in other markets, the precious metals complex is being smashed lower (on heavy volume). Gold just hit 2013 lows at $1182 and Silver at $18.837 is near its 2013 lows also.

It seems someone wants the status-quo-defying precious metals going out at their lows as central-planning-supporting stocks go out at their highs...

on heavy volume...

Chartology: A Longer Term View of The S&P 500

You haven't seen much on equities on the blog for months. We've had the short then long Tesla trades which got close to the $160 target-$158.00- on the 26th and the hatin'-on-the-gold-miners shorts but for the overall market not many posts.

There are two reasons for the lack of commentary:
First, and overriding, I'm not that good in the latter stages of a bull market. Early on seems easy, catching the turn the day after the Mar. 9, 2009 bottom,* albeit thinking it was only the start of a six or so week rally, the confidence intervals were a lot higher then than they are as we approach the five-year anniversary in a few months.

As a side note the first part of the '80's-'90's Big Bull Market lasted 5 years and 13 days-from 776.92 on Aug. 12, 1982 to 2722 on Aug. 25, 1987.

The second reason for the lack of commentary has been the monetary environment-"Don't fight the Fed" on steroids.
As long as the federales are doing the QE thing the appropriate posture is to shade ones positioning to the long side while at the same time realizing it's a game of musical chairs where the one certainty is the music will stop, if for no other reason than to give the band a chance to grab a cocktail and change conductors, and since the underlying philosophy of the stuff we put out in public is higher certainty trades even if that means lower expected returns (you won't see many exotic or hybrid instruments, for example), when the certainty levels decline the appropriate action is to shut up.

In just the last ten days we're starting to see forecasts for 2014 which definitely carry a whiff of complacency with them, how the new year is shaping up to be the perfect economic environment for equities etc and that gets the antennae twitching.

Just so any future archeologists can ascertain whether we are even close to having a clue as to what is going on we try to include the level of the instrument on any post that might be construed as a recommendation, in this case it is the S&P 500 which looks to open at 1838 up 3.00 (or alternatively the DJIA which looks set to open at 16,472 up 33.00).

Finally, we don't have a lot of faith in Elliot Wave Theory, the "alternate" wave counts are just too loosey-goosey for holding the analyst accountable.

From Dragonfly Capital:
A year end series taking a longer perspective in many market indexes, macro related commodities, currency and bonds. Over three weeks these reviews are intended to help create a high level road map for the the next twelve months and beyond. We finish today with the S&P 500 ($SPY, $SPX).

The S&P 500 has long ago replaced the Dow Jones Industrial Average as the benchmark index for most managers. And for good reason, its broad constituency gives it enough diversification among the large cap names to give a clear understanding of market direction. 2013 was a breakout year for this index, breaking a 15 year channel of price action and continuing the move higher since the bottom of the financial crisis. It has climbed a wall of worry the whole way and there is still a very low participation rate among individual investors. The monthly chart below shows that channel and projects a target of 2400 on the break out above it on a Measured Move. Another 550 points to go. Wow! This can be roughly confirmed by using Elliott Wave principles as well. Since the 2010 bottom the price action has been in Wave III of the impulse higher. This is often the strongest wave. The fractal nature of Elliott Wave shows this is also Wave III since October 2011 and Wave v within that Wave III. All that means is that it could make an interim top shortly at 1923. That would be supported by the Relative Strength Index (RSI), currently technically overbought, reverting lower. The next wave, Wave IV, would be expected to be very flat as it usually is opposite in nature to Wave II, which was down. Using a 5%
spx m
correction would bring it back to about 1820 before the Wave V higher to complete the bigger Wave III. All this says that 2400 can be seen from 2 different perspectives. The weekly picture can help fill in some of the details along the way, and I promise no more Elliott Wave. The chart below shows that the S&P 500 has been in a rising channel, narrowing very slightly, since the November 2012 launching point. Currently it is at the top of that channel and with a RSI that is hovering around the technically overbought level at 70 it would make sense if it reverted to towards the bottom of the channel. The 20 week Simple Moving Average (SMA), also roughly the 100 day SMA, has acted as support and is just above the channel bottom. That would be a target entry point on a hold there if it does pullback. All of the SMA are rising and have
spx w
good separation, as they move higher in a parallel fashion with the price channel. This is a strong trend. The daily chart though suggests that it may not get that low in the near term. The S&P broke a rising wedge from July in October, retested it and has moved higher. The recent break out of the yellow box has a Measured Move to 1848, about where it is now, and near the round number 1850...MORE
It looks like more up, then down. Do click through for the larger charts.

*March 3, 2009
Marc Faber: Stocks Poised to Rally
March 10, 2009
S&P 500 5% Days
I'll go with Faber on the timeline, at least three, maybe six weeks before we see a change in direction, i.e. more than a one day move.
March 13, 2009
Markets: Where Do We Go From Here?
Using the low I.Q. approach* to investment analysis, refined by yours truly, while we will have some down days in the next two weeks, the trend will be up.
Then come the first quarter earnings reports and the crystal ball gets a bit cloudier....
Being on the right side of the move makes it easier to stay on the right side of the move.
Plus, it's pretty funny when the computers start asking if they can use some margin.

See also the calls on the move in the Nikkei. We were late, waiting until December 2012, but quite exuberant once we realized what was going on:
 ...As was advised in January's "No typo: Analyst sets Nikkei 63 million target (it's Société Générale's Dylan Grice)":
....A couple characteristics of big bull markets:
1) Once the move is underway waiting for a pullback almost guarantees you will be underinvested. Everybody is waiting for a pullback, not everybody has the fearlessness/foolishness to committ.

2) The market will find a way to make your day-to-day prognostications and pronouncements look stupid.

Ease in, even if you have to grit your teeth and shut your eyes.

Monday, December 30, 2013

Organovo Will 3D Print a Liver in 2014 (ONVO)

From ComputerWorld:
The first 3D printed organ -- a liver -- is expected in 2014
Approximately 18 people die every day waiting for an organ transplant. But that may change someday sooner than you think -- thanks to 3D printing.

Advances in the 3D printing of human tissue have moved fast enough that San Diego-based bio-printing company Organovo now expects to unveil the world's first printed organ -- a human liver -- next year.

Like other forms of 3D printing, bio-printing lays down layer after layer of material -- in this case, live cells -- to form a solid physical entity -- in this case, human tissue. The major stumbling block in creating tissue continues to be manufacturing the vascular system needed to provide it with life-sustaining oxygen and nutrients.

Living cells may literally die before the tissue gets off the printer table.

Organovo, however, said it has overcome that vascular issue to a degree. "We have achieved thicknesses of greater than 500 microns, and have maintained liver tissue in a fully functional state with native phenotypic behavior for at least 40 days," said Mike Renard, Organovo's executive vice president of commercial operations.

A micron is one-millionth of a meter. To better understand the scale Renard is describing, think of it this way: A sheet of printer paper is 100 microns thick. So the tissue Organovo has printed is the thickness of five sheets of paper stacked on top of each other.
Liver tissue
Liver tissue printed in a petri dish. (Image: Organovo)
Printing hepatocytes -- the cells that make up most liver tissue -- isn't enough, however. There are multiple types of cells with different functions in tissue that must be combined to create a living human organ....MORE
HT to and headline from: On 3D Printing

Office of the Director of National Intelligence or Goldman Sachs: You Decide


Sure, sure an Octopus is not a squid but there is cephalopod solidarity.
See also our 2011 post "Octopi Wall Street" and:
Brought to you by the Joker, the Penguin, the Riddler, and Catwoman.Twentieth Century-Fox

Here's the Navy's drone program logo:

"Why Is Machine Learning (CS 229) The Most Popular Course At Stanford?"

From Forbes:
Stanford professor Andrew Ng teaching his course on Machine Learning (in a video from 2008)
New Brainlike Computers, Learning From Experience,” reads a headline on the front page of The New York Times this morning. The article focuses on machine-learning algorithms, known as a neural networks, that are becoming increasingly important in computer science. And in 2014 Qualcomm will release the first commercial version  of a neuromorphic processor that transforms this software technique directly into hardware to increase performance for intensive machine learning tasks.

But buried in the last paragraph of the story was the fact that “The largest class on campus this fall at Stanford was a graduate level machine-learning course covering both statistical and biological approaches, taught by the computer scientist Andrew Ng. More than 760 students enrolled.” And several previous versions of the course are available online for free. The most recent is from Coursera (which Ng cofounded with Daphne Koller last year) but the 2008 course is on iTune U, YouTube and Stanford’s Engineering Everywhere.

What’s going on here? Simply put, machine learning is the part of artificial intelligence that actually works. You can use it to train computers to do things that are impossible to program in advance. Ng uses the example of handwriting recognition as a classic example of a problem that can only be achieved through machine learning. In his introductory lecture on Coursera, Ng refers to search engines like Google and Bing, Facebook and Apple’s photo tagging application and Gmail’s spam filtering as everyday examples of machine learning at work. Ng is the director of the Stanford Artificial Intelligence Lab and one of the founders, with Jeff Dean, of Google Brain, a deep learning research project at Google. He is using machine learning as a step towards the “AI dream of someday building machines as intelligent as you or I.”...MORE

"The Physics Hidden by the Invisibility Cloak": Metamaterials and the Father of the Superlens

New Scientist via Slate:
If only J.K. Rowling had written about metamaterials and perfect lenses.
John Pendry is a physicist at Imperial College London who laid the theoretical foundations for the invisibility cloak and superlenses capable of producing the sharpest ever images. He talks about the profound physics obscured by his invisibility cloak and how metamaterials could help realize the perfect lens.

Valerie Jamieson: Invisibility cloaks can guide light around objects as if they weren't there. It is awe-inspiring physics. So why the frustration?
John Pendry: It's when I give talks, particularly popular ones. Of all the things I am interested in, I am always asked about invisibility cloaks. I think, "Oh God, not another invisibility cloak lecture." I still enjoy giving them, but there are many other things I'm working on that are more profound; they just don't have that fertile soil which J. K. Rowling prepared for us.

VJ: What topics do you wish were better-known?
JP: The concept of a perfect lens is profound. A lens is a complicated thing that takes every point in an object and reconstructs it in the image—with no loss of detail in the case of a perfect lens.

VJ: An ordinary microscope or telescope can't see detail on a scale less than the wavelength of light. You realized it was possible to break this diffraction limit. How?
JP: I knew that Russian engineer Victor Veselago had theorized a lens made out of material with a negative refractive index. In 1999 I checked whether such a lens could be perfect, expecting the usual answer—that it wasn't perfect. I didn't get it; the theory said it was perfect. I was astonished, and so was everybody else. The mechanism of a perfect lens is very strange. I still get letters saying that it is all rubbish, but this has died down.

VJ: How did the perfect lens go from theoretical possibility to reality?
JP: The concept of metamaterials opened up the field. A metamaterial is a material whose electric and magnetic properties are determined as much by its structure as by its chemical composition, although the structure must be on a scale much smaller than the wavelength of light you're using. The real kick-start came when I got together with a team in San Diego who made the first material that had a negative refractive index, which was something of a Holy Grail for electromagnetism. It had been talked about for many, many years but you just couldn't find any stuff that did that.

VJ: Experimentally, what has been achieved?
JP: A perfect lens is very hard to realize in the lab. People have achieved sub-wavelength resolution that is more than 10 times as good as a normal lens, but it is far from being used as a microscope.

VJ: Can these lenses be used for anything else?
JP: There is a halfway house that my research team in London is working on—a light harvester. It concentrates light on a very small area. Ordinarily the area you can shrink to will be limited by the wavelength of the light you are using, as an ordinary lens is. We are using metamaterials to concentrate light onto an area less than a square nanometer. Once you do that, you have the potential to make sensors for single molecules.

VJ: Will metamaterials win a Nobel Prize?
JP: All I can say is that I hope they will. It is a lottery, isn't it really?

VJ: If you met J. K. Rowling, what would you say?
JP: I'd be in awe. I'd let her speak first, like the Queen.

This article originally appeared in New Scientist.

Sunday, December 29, 2013

"The New New Great Game: Geography, Energy, The Dollar and Gold"

Just about the time 'the 'stans' start receding from the Western headlines it is probably most important to think about them.
From ZeroHedge:
Submitted by Paul Mylchreest of Monument Securities
Sir Halford Mackinder’s 1904 speach in which he outlined his “Heartland Theory” was a founding moment for geo-politics. He argued that control of the Eurasian landmass (Europe, Asia and the Middle East), which contained the bulk of the world’s population and natural resources, was the major geo-political prize.
As time passed, energy (first crude oil then natural gas), became increasingly integral to this concept and its strategic significance cannot be overstated.

Remarkably, Mackinder’s theory has remained equally valid, if not more so, in the modern era - although key “pivot areas” for exercising control have evolved. In addition to Central Asia and Trans-Caucasus in Mackinder’s day, the oil producing nations of the Middle East took on increasing importance in the “New Great Game”.

The geo-political confrontation between the US on one hand and China (in increasingly close cooperation with Russia) on the other, is evolving rapidly. We see a “New New Great Game” (NNGG) emerging and have “tweaked” the Heartland Theory to include....
....The “New New Great Game”
Mackinder’s “Heartland Theory”
The traditional “Great Game” obviously dates back to the geo-political rivalry between Great Britain and Russia for supremacy in the central Asian region during the nineteenth and early part of the last century. In his famous speech, “The Geographical Pivot of History”, to the Royal Geographical Society in 1904, Sir Halford Mackinder outlined his “Heartland Theory. ” According to Wikipedia.

“This is often considered a, if not the, founding moment of geo-politics...”
Briefly, this posited that the major geo-political prize is Eurasia (the “World Island”), i.e. the European, Asian and Middle Eastern land mass, which contained the bulk of the world’s population and its natural resources. Mackinder argued that control of the “pivot area“ of central Asia was the key to controlling Eurasia.
This is taken from his paper published in the April 1904 edition of the “The Geographical Journal.”
He also emphasised the important difference between sea power and land power. From Zurich-based ISN’s 2009 “Geopolitics and US Middle Eastern Policy: Mackinder and Brzezinski.”
“Mackinder’s theory was a counter-argument to notions that maritime supremacy was sufficient for a power such as Great Britain to safeguard its hegemony. He claimed that, with the emergence of new transportation routes [e.g. Trans-Siberian railway] and technology, a power that could control the centre (and the abundant resources) of the Eurasian landmass...would ultimately be able to attack the colonies of a sea power everywhere on the continent. “
The Trans-Siberian Railway.

In the wake of World War One, Mackinder argued the case for preventing a convergence of interests between Russia and new “pivot” states of Eastern Europe (Austria, Hungary, Czechoslovakia and Poland). This led to his famous dictum.
“Who rules East Europe commands the Heartland;
Who rules the Heartland commands the World Island;
Who rules the World Island commands the World.”
It’s important to emphasise that the pivot area does evolve/fluctuate with changes in geo-political reality. Indeed, Mackinder included the Baltic states in one of his revisions.
As the world industrialised and became increasingly dependent on crude oil (and later, natural gas), energy resources became ever more integral to the Great Game. With such a large proportion of the world’s oil and gas reserves found on the Eurasian land mass, this was easily accommodated within Mackinder’s theory.
The period just before World War One, with the British Navy’s switch from coal to oil and the adoption of the automobile, set the stage for this. Indeed, in 1913, the British government acquired a 51% controlling interest in the Anglo-Persian Oil Company, the forerunner of BP.
Remarkably, the validity of Mackinder’s theory has stood the test of time, even though most people are unfamiliar with it. The following quote is from the Reagan Administration’s “National Security Strategy of the United States” published in January 1988.
“The first historical dimension of our strategy is relatively simple, clear-cut, and immensely sensible. It is the conviction that the United States’ most basic national security interests would be endangered if a hostile state or group of states were to dominate the Eurasian land mass – that area of the globe often referred to as the world’s heartland.”
Right now, it’s obvious that US national security interests are threatened by a combination of China and Russia.

This was the influential globalist (and former National Security Advisor), Zbigniew Brzezinski, writing in his famous 1997 book, “The Grand Chessboard.”
“Ever since the continents started interacting politically some 500 years ago, Eurasia has been the centre of world power… For America, the chief geopolitical prize is Eurasia – and America’s global primacy is directly dependent on how long and how effectively its preponderance on the Eurasian continent is sustained.”
In the “New Great Game”, (NGG) of the modern era, the major rivalry is between US/NATO on one side and China, Russia, other members of the Shanghai Cooperation Organisation and the likes of Iran, on the other.
The “pivot states” in the NGG are.
  • The key nations in Central Asia and the Trans-Caucasus: especially those with substantial energy resources and/or pipelines (e.g. Azerbaijan, Ukraine, Turkmenistan, Uzbekistan etc). Here is a chart showing the major gas pipelines
And the major oil pipelines:


Google As God: The Case of Andreessen Horowitz-backed Rap Genius (GOOG)

We looked at Rap Genius in 2012's "Why Andreessen Horowitz Is Investing in Rap Genius".
In a nutshell the company intended to expand from explanations of rap lyrics to explanations of the entire universe (or something).
Here's the headline story from The Daily Dot:
The real problem with the fall of Rap Genius
You may have already heard what happened to Rap Genius last week. A Web developer caught the lyrics analysis site in an elaborate scheme to ensure that links to its pages topped the Google results for rap and pop lyrics searches. To penalize the site for its shady dealings, Google knocked it far down in the rankings, even in searches for "rap genius."

Rap Genius responded with the sort of Janus-faced apology that's been standard operating procedure on the Internet in 2013: Yes, we did something wrong, but most of our competitors are doing it, too. The apologetic half would sound far more genuine were it not paired with a rationalization. The rationalization would make for a pretty reasonable point had it come from just about anyone else.

With news sites splitting their time between enjoying Rap Genius' comeuppance and speculating on whether the move will kill them outright, an aspect of the story that's taken largely for granted is Google's Zeus-like power to strike an offending site with lightning.

That isn’t to say that Rap Genius was in the right, or that Google abused its power in taking the site down a few notches. If a site wants the benefits of search visibility, it should be prepared to play by the rules of search providers. If search providers want sites to obey their rules, they have to be prepared to penalize those that don't. Rather, the problem is with the online market, and the way in which we've allowed a few powerful services to grow into gatekeepers for the rest of the Internet.

To understand why that’s the case, it’s important to acknowledge that one of the more enduring difficulties created by digital media is the way in which it conceals. That leads to a number of problems variously termed “visibility” or “discoverability,” but which can be illustrated by imagining that you’re in the waiting room of a doctor’s office, looking for something to read. Because print magazines are physical objects, each one asserts its own presence simply by virtue of the space it occupies. One may get buried under the others, or slip behind a chair, but it should be easy to sort through them to find one that interests you.

What happens, though, when you copy those magazines into the virtual space of a tablet or smartphone? Since they no longer take up a discernible physical space, there’s no obvious way to sort through them—unless, that is, someone builds one. Without the reader app on your device, it would be significantly more difficult to find the magazine you want; without some basic menu functions, you’d be unable to access them at all.

Most of the interfaces we deal with on digital platforms are just that: solutions for sorting information in a way that makes the concealed accessible to humans. Menus work well enough when you’re dealing with a dozen magazines or so, but when you’re dealing with millions of pages, you need a more powerful way to sort and index all that information.

That’s where search engines step in. They’ve long since proven themselves as an effective way of navigating the wealth of sites and pages on an ever-growing network, but they’ve bred a reliance from which even the sharing economy of social media has failed to wean us. To an unsettling degree, we’re dependent on search, and more and more over the last 25 years, that’s meant a dependence on a single search provider.

Before Google achieved dominance, there were dozens of options—like Lycos, Infoseek, and the recently departed Altavista—each delivering a slightly different view of the Web. Some of the early contenders are still around, but none comes close to the market share held by Google. In 2013, it handled slightly more than two-thirds of the searches conducted on the Web. Even sharing search results between them, Yahoo and Microsoft’s Bing only managed about 11 percent and 17 percent respectively, with everyone else netting single-digits or a fraction of a percent.

Google’s gotten there by maintaining a nimble and reliable search algorithm, which might make this seem like an example of fair competition producing a clear winner. That’s an immense amount of power to concentrate in a single company, though, and it has consequences for how the Web as a whole operates....MUCH MORE

Webcam Aboard the 'Aurora Australis' As It Attempts to Rescue the Scientists/Media/Tourists Aboard the Akademik Shokalskiy

It's summer in Antarctica.
From the Australian Antarctic Division's webcam page:

Webcam image looking from the Aurora Australis at 66° south – heading south-southeast, as at 3:01 am ship local time (6:01 am AEST)

Here's the backstory at the Australian Broadcasting Corp, Nov. 25:
$1.5 million Australian expedition to Antarctica

Getting rich in the new Washington: The Transition From Power or Money to Power AND Money

From the Washington Post's The Insiders' Game special report:
I’d been at the Post only a few months in 1988 when the managing editor, Robert Kaiser, walked into my office, closed the door and tossed onto my desk the section from that day’s paper containing the list of recent home sales in the District. One sale was circled — mine.
Bob’s message that afternoon was that I’d broken an unwritten rule by buying an $830,000 house in an upscale neighborhood of Northwest Washington. Post journalists were not supposed to call attention to themselves in that way, he explained. I had chosen a house that didn’t reflect my proper place, as a mid-level editor, in the pecking order of Washington. Because I was new in town, he wanted to warn me about my violation of this unwritten code.
The son of a diplomat and academic, Bob grew up in a Washington where your place in the social order wasn’t determined by how much money you had but by how much power and influence you had and how much respect you commanded. It was all about what you did and what you knew, not what you had.
Even the few who had wealth abided by the old-money ethic that you didn’t flaunt it — and most certainly you didn’t talk about it. Washington back then thought of itself as a city that existed for one purpose, to serve the public.
If that strikes you today as incredibly hokey and naïve, consider it a measure of how much the culture of Washington has changed in the past 30 years. In almost every way, the region continues to be shaped by the presence of the federal government. But as this series, the Insiders’ Game, has richly illustrated, the idea of “serving the public” has taken on a somewhat different meaning — one less rooted in sacrifice, stewardship and the chance to make a difference, one more given to celebrity, manipulation and the chance to make a big score.
This transformation was not part of some grand strategy hatched over lunch at the Metropolitan Club to make this the richest region in the country. Nor was it some mysterious breakdown in the moral fiber of those living in the capital. According to those who lived through it, the explanation is a whole lot more simple: The nation changed and Washington changed with it.
(Andre da Loba/For The Washington Post)
Still small and Southern
In the decades after World War II, Washington was something of a middle-class paradise, a company town where a rapidly growing government provided reliable jobs and steady income to a wide range of Americans who flocked here — black and white, urban and suburban, high skilled and low, ambitious and risk-averse....MUCH MORE
HT: Marginal Revolution

Andrew Smithers on Labor, Capital and Taxes

This is almost a year old but I wanted it on the blog as a reference.

I haven't seen anyone post a 120-125-year study of the fraction of corporate profitability used to pay wages and salaries; fringe benefits such as corporate pension contributions, health care, vacation time etc; corporate taxes; plant, property and equipment; dividends-pretty much the whole schmear.
I'll probably have to commission something to get what I want but here's a start.

Some of the dates to watch for: The 1870's for the rise of the trades/crafts/labor unions;1913 when the 16th amendment passed, marking the start of income taxation; the use of medical coverage as an inducement to employees under WWII's wage and price controls; the big shift during the 1980's from defined benefit to defined contribution retirement plans and a few others that readers know better than I.

From the PBS NewsHour's Business Desk:
Today we welcome once again our friend and monetary minstrel Jon Shayne, aka Merle Hazard, a Nashville investment manager. Shayne has written and sung such classics as "H-E-D-G-E," "In the Hamptons," "The Greek Debt Crisis" and "Inflation or Deflation?" He shared one of his latest hits, "Fiscal Cliff," with us on Making Sense. You can access his entire oeuvre here.

Today, he conducts an interview with Andrew Smithers, a British economist. We'll let him take it from here.

Jon Shayne: Late last year, Andrew Smithers answered questions on this page about how labor's share of output in the U.S. has declined over the past thirty years. Judging from the comments received and other reader reaction, many of you would like to hear more about the topic. Andrew was kind enough to agree to answer another round of questions.

This graph of his, which we also used in the first interview, shows how much labor's share has declined, in favor of capital's:
Andrew Smithers chart 
U.S. Department of Commerce, Bureau of Economic Analysis.
Andrew formerly ran the asset management business of S.G. Warburg, and now heads up his own consulting firm, Smithers & Co., in London. In our last interview, he explained his view that the movement toward a "bonus culture," in which business managers get paid for short-term rather than long-term profits, is responsible for the diminishment in output going to labor.

Jon Shayne: Andrew, a reader asked whether the problem of labor's lower share can be solved by higher income tax rates, at least on those with very high incomes. Can it?
Andrew Smithers: Yes, it would, I think, fix the problem, but it would probably cause a great deal of other damage -- for example many of the best U.S. managers and entrepreneurs might choose to emigrate, as French ones are doing in response to high threatened French taxes. We need a solution to the perverse incentives of the modern bonus system, but a better one than very high marginal tax rates.

Jon Shayne: In our prior piece, you said that the respective shares of labor and capital are mean-reverting. In other words, you are saying that labor's share will, in time, go back up to its average level, and capital's share will go down. Why? Is the mechanism of reversion political, or more purely economic?
Andrew Smithers: It's economic. Companies can increase output either by using more capital, more labor, or both. They will choose what's best for them. Adding more labor without adding more capital, or adding more capital without adding more labor, will be less efficient than adding both. With this simple assumption economists have shown that profit margins are in theory mean-reverting.

This is one of those all-too-rare economic theories which is supported by the evidence. Professor James Mitchell, of the University of Warwick, has done a statistical analysis of the US data from 1929-2011 that confirms the US profit margins are mean-reverting. I will put be putting some of the details of his research into the appendix of an upcoming book of mine.

Note from JS: In the background of Andrew's answer is the idea that as technology, i.e. capital, improves, it produces more output per hour of labor. This actually makes workers more valuable to employers. All else equal, employers then bid up the price of labor. This is an economic explanation of why living standards have risen over time.
Jon Shayne: Paul Krugman has raised the possibility that labor's current lower share could be a result of technological advances or looser antitrust enforcement. Or a combination of the two. You gave evidence in the prior interview that technology is not the real issue here, but what do you think about looser antitrust enforcement, which seems to have begun during Ronald Reagan's presidency, as an explanation? All else equal, if a business gains some degree of monopoly power, it can make prices and profits go up, without raising wages.
Andrew Smithers: The argument for increased monopoly power is, next to the perverse impact of the bonus culture, the best available explanation that I have seen of the level of profit margins and cash flow surpluses of the business sector in the UK and U.S. In fact the two explanations have much in common.
Companies have a great deal of monopoly power in the short term. Unless spare capacity is massive, buyers cannot shift easily to new sources of supply. Managements are thus always making judgments when they make pricing decisions. The risk they take in keeping up margins is that they will increasingly lose market share over time. The risk they take if they allow margins to narrow is that they will make lower profits in the short term. They have to judge between similar risks when taking decisions on investment. The long-term risk of not investing is that they will have higher production costs than their competitors over time, and the risk of investing is that it will lower profits and, in addition, profits per share. (In the latter case because money spent on new investment cannot be used to buy back shares.)

The bonus system encourages management to play down the longer-term risks in order to maximize short term profits per share. It is in effect an encouragement to exploit short-term monopoly power more aggressively than before.

The effect of the bonus system and a rise in monopoly power are thus very similar in many ways. In both cases, profit margins will rise and investment will not rise proportionately, as the rise in monopoly will probably affect the return on existing capital rather than new.

There are, however, some points which make the bonus culture the better of the two explanations.
1) The evidence for an increase in monopoly power is, as far as I am aware, limited to the evidence that profit margins are unusually high and business cash flow unusually strong. But the evidence for the change in business incentives is independent. We don't therefore need to assume that monopoly power has changed and the principle of parsimony (Ockham's razor) suggests that the bonus culture should be the preferred explanation unless other evidence for rising monopoly is produced for both UK and the U.S.
2)The bonus culture encourages companies to report highly volatile profits, but this does not apply to an increase in monopoly. US reported profits have become much more volatile than the profits shown in the NIPA, as I show in the Chart below. (NIPA is the National Income Products Account series, published by a division of the US Dept. of Commerce.)
Note from JS: Even if domestic competition has lessened, it is also possible, or likely, that international competition has intensified. EPS is Earnings per Share
Jon Shayne: You disagree, then, with the conventional wisdom, at least the old conventional wisdom, that public companies use accounting techniques, some might say tricks, to smooth their earnings?
Andrew Smithers: They may have smoothed earnings a bit in the past. Up to 1990, the volatility of published profits was a bit less than the volatility of NIPA profits, but management now wants volatile earnings and, as the chart shows, what management wants, management gits....MORE

Saturday, December 28, 2013

"Yes Virginia, Obama and the Democrats Are Mussolini-Style Corporatists, Just Like the Republicans"

I've a feeling we'll be coming back to the subject of corporatism over the course of 2014.

From our March 2013 post "Copyright Infringement Now Seen As Terrorism":
As Political Capitalism becomes indistinguishable from Mussolini's Corporatism it's getting close to the time where the West has to decide just what it wants to be when it grows up.

"The rich and powerful too often bend the acts of government to their selfish purposes, many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by acts of Congress."
Andrew Jackson (1830) Cited by Charles Sellers, The Market Revolution: Jacksonian America 1815-1846. New York: Oxford University Press, 1991, p. 62

"Capitalism's biggest political enemies are not the firebrand trade unionists spewing vitriol against the system but the executives in pin-striped suits extolling the virtues of competitive markets with every breath while attempting to extinguish them with every action."
Raghuram Rajan and Luigi Zingales, Saving Capitalism from the Capitalists. New York: Crown Business, 2003, p. 276. 
And yes, I know the distinction between Fascism and vertical syndicalist corporatism based on guilds. I'm just using a shorthand, readily understandable usage....
Phrases such as "...the distinction between Fascism and vertical syndicalist corporatism based on guilds" make me the hit of any party.

From naked capitalism's Yves Smith writing at Truth-Out:

High stakes: Zynga chairman Mark Pincus, Yahoo! chief executive Marissa Mayer and US President Barack Obama.
President Barack Obama meets with technology company executives to discuss surveillance and health care in the Roosevelt Room of the White House in Washington, Dec. 17, 2013. From right: Obama; Marissa Mayer, the chief executive of Yahoo!; and Mark Pincus, a co-founder of Zynga. (Gabriella Demczuk/The New York Times) 
Reader dSquib flagged a “bizarre” article by Mike Konczal in the New Republic titled, “Corporatism” is the Latest Hysterical Right-Wing Accusation: The secret history of a smear.” dSquib seemed quite perplexed that anyone would deem calling Obama a corporatist, which as we’ll demonstrate is patently true, a smear.
I’m actually a bit miffed that Konczal treats the “corporatism” appellation as the sole property of the right wing (in the style sheet of the Vichy Left, calling them “hysterics” is redundant but necessary for the rubes), since I have a prior claim. And what is particularly rich is that Konczal apparently regards the allusion to Mussolini to be unfair:
Right-wing critics have a new favorite word to malign President Obama’s economic policies: corporatism. Naturally, it’s an ugly word. Whether it evokes Benito Mussolini’s fascist Italy or just an image of the rich growing richer through government collusion, it’s a vision nobody would defend. Nobody is for corporatism.
“Nobody is for corporatism”? Huh? Why does Konczal think K Street and “think tanks” which for the most part the arms and legs of corporations, exist? There is an entire large, well funded, and extremely effective business apparatus that extracts lucrative programs, explicit subsidies, guarantees, and various other gimmies from government bodies at all levels. Tom Ferguson has been meticulously documenting since the early 1980s how campaign finance in America works, which he calls he calls the “investment theory of politics“: that political parties in the US respond not to popular will or the interests of broader society, but the patronage of large money blocks, with certain industries preferring one party to the other.

One suspects the reason for the sensitivity within the ranks of the Democratic party water-carriers to the “corporatist” label is that Obamacare is a textbook case. Konczal cleverly tries to undermine this charge by serving up an example of histrionic right-wing messaging: depicting the contraception requirement (PR-wise, the Republican have been big on throwing identity politics into the ACA mix, but they are hardly alone).
Yet Obamacare IS corporatist. Here we have the industries that are significant contributors to why the American medical system is so overpriced – the health insurers and Big Pharma – actually playing a major role in writing the legislation. And how is it not a sop to large companies to have the government require that citizens buy your product or else pay large tax penalties? Mr. Market certainly thought so, for the price of health insurer and drug company stocks jumped the day the ACA passed. And remember, the beneficiaries of Obamacare extend beyond the insurers and pharmaceutical makers. Hospitals, who increasingly engage in oligopoly pricing (most surgeries need to be done in hospitals), also come out even stronger because new requirements imposed on doctors’ practices will make it difficult for a retiring MD who practices medicine, as opposed to servicing the rich (e.g., cosmetic surgeons) to sell their business to anyone other than a hospital.

And the label fits in the banking arena like a glove. I’ve been called both the Bush, but far more often the Obama bank-friendly policies “Mussolini-style corporatism” since 2008, and well before what Konczal claims is the origin of this description, Tim Carney’s book Obamanomics, published November 30, 2009.
We used this expression September 28, 2008, in Mussolini-Style Corporatism in Action: Treasury Conference Call on Bailout Bill to Analysts. And as much as the TARP was a Bush creation, remember that it was nixed by Congress the first time it was presented. Obama, who was seen as the likely next President, not only supported it, he whipped aggressively for it. So TARP has the fingerprints of both parties all over it....MUCH MORE
The thing I learned from the Mike Konzcal piece at The New Republic is how silly he looks trying to argue that "no, really, the emperor does have clothes on".
Good grief.
"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power. "
-B. Mussolini via BrainyQuote
We've been circling this kind of stuff for years. In 2008's "Hank Paulson, George Washington and Benito Mussolini Walk Into a Bar: Part I" we looked at Machiavelli's Discourses on the First 10 Books of Titus Livy
2009 saw "Newsweek: Goldman Supplied 9 Pages of Proposed Changes to Derivatives Legislation (GS)".
2010 had "The Left Right Paradigm is Over: Its You vs. [Big] Corporations"
"President Obama Examines John Boehner’s New Tanning Bed at General Electric Factory" (GE)
Here's a gentle poke at the Speaker.
Because at Climateer Investing we're nothing if not equal opportunity,
We'll be back with more on the new chairman of the President's Council on Jobs and Competitiveness.
His record at GE, the destruction of shareholder wealth, the shipping jobs to China programs, the bailouts and guarantees, crony capitalism, Mussolini style corporatism and power elites, the 3.6% tax rate, subsidies and Davos, all in good fun, of course
"Blaming Capitalism for Corporatism"
...One of the authors has some of those Nobel tchotchkes. 
2013's "Blueprint For America: 'Fascist Italy's Experiment With Economic Corporatism'" had links to the above and to:
There's Pollution and There's: Führer Flatus
Scent of a Führer
Hitler wanted to control the world. But he couldn't even control his flatulence.
Guests at the Berghof, Hitler’s private chalet in the Bavarian Alps, must have endured some unpleasant odors in the otherwise healthful mountain air.
Mussolini and Hitler
The dictator who smelt it, dealt it.

Great Minds and All That

From Dilbert.com:
The Official Dilbert Website featuring Scott Adams Dilbert strips, animations and more
Scary, isn't it.
Teach the Kids (or yourself) to Code or What is the Founder of Google-X Up To?
Technology: So Where's the #&@*$% Innovation?