BRIEFLY NOTED: For 2023-10-12 Th

The usually reliable Megaw of the FT gets the inflation news wrong; Molly White is a boss as she covers the FTX trial; Timothy Burke wrestles with how to think about the human social practices of...

Oct 12, 2023

NOTES on SubStack:

Economics Watch: This from the usually reliable Nicholas Megaw of the FT seems to me to miss the mark. We economists have been looking at (a) headline inflation, (b) core inflation—removing volatile food and energy inflation from the headline index—as a better forecaster of future headline inflation than headline inflation is, and recently (c) “supercore” inflation—removing housing inflation from the core—index—on the grounds that recently housing inflation has also become weird, volatile, and self-reversing; thus now supercore is likely to be a better forecast of future headline inflation than either headline or core.

The September numbers on inflation were 0.4% monthly headline inflation, down from 0.6%; 0.3% monthly core inflation, steady; and core inflation boosted by a surprisingly large 0.6% housing inflation number—suggesting a fall in “supercore”.

If the bet that supercore is the measure we should be looking at, this is good news. But the market seems to not know how to take it:

CryptoGrift Watch: Molly White is a boss! She posts the Alameda internal semi-balance sheet and the “Alt-7” version that was sent to outsiders as they stood on, I believe, early November 2022. The FTT, SRM, and SOL on the semi-balance sheet are SBF- and FTX-created crypto assets with no fundamental value—$8.1 billion, plus another $3.8 billion in crypto assets, plus another $4.6 billion “lent” to SBF and other insiders. All of these had value only to the extent that the crypto Ponzi schemes continued. That is $16.5 on the asset side that could vanish in an instant. Thus the $6.2 billion of notional Alameda NAV could turn into -$10.3 billion in an instant.

And on the liabilities side we have the $9.9 billion in “borrowed” FTX customer funds. When you put your money into FTX, and FTX said that it had bought ETH for you, it was quite possible that it had not done so—that it had entered a holdings of ETH in its database, but had actually given the money out to Alameda instead.

No matter what Michael Lewis may say, taking your customer’s money and using it to allow Alameda to make very large bets on crypto is not a “great business”—it is, rather, a business that is derivative of the crypto Ponzi scheme, and “great” only as long as the music continues to play:

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Just War Theory Watch: It is not that “intention” rules all. Actions that have an effect against the adversary professional military but that cause disproportionate civilian casualties are disallowed, morally and ethically. Of course, there is a sliding scale here—militaries that hide behind walls or make themselves indistinguishable from the civilian population are penalized in terms of what “disproportionate” means for their civilian populations. And these rules were set up by those with training and resources—the Big Battalions, on whose side are the gods. And these rules about “disproportionate” are very often breached. The Allied bombing campaign over Nazi Germany, the point of which was not to do damage to Nazi Germany’s professional military but rather to induce Hitler to move some artillery barrels from the Russian front pointing east to the home front pointing up, in order to give the Red Army a break (and to show that the Allies were doing something in order to try to keep Stalin from trying to make a separate peace with Hitler):

MUST-READ: W.H. Auden Confronts the World of September 1, 1939:

The last two stanzas of the poem are bullshit. So I have cut them:

W. H. Auden: September 1, 1939: ‘I sit in one of the dives
On Fifty-second Street
Uncertain and afraid
As the clever hopes expire
Of a low dishonest decade:
Waves of anger and fear
Circulate over the bright
And darkened lands of the earth,
Obsessing our private lives;
The unmentionable odour of death
Offends the September night.
Accurate scholarship can
Unearth the whole offence
From Luther until now
That has driven a culture mad,
Find what occurred at Linz,
What huge imago made
A psychopathic god:
I and the public know
What all schoolchildren learn,
Those to whom evil is done
Do evil in return.
Exiled Thucydides knew
All that a speech can say
About Democracy,
And what dictators do,
The elderly rubbish they talk
To an apathetic grave;
Analysed all in his book,
The enlightenment driven away,
The habit-forming pain,
Mismanagement and grief:
We must suffer them all again.
Into this neutral air
Where blind skyscrapers use
Their full height to proclaim
The strength of Collective Man,
Each language pours its vain
Competitive excuse:
But who can live for long
In an euphoric dream;
Out of the mirror they stare,
Imperialism's face
And the international wrong.
Faces along the bar
Cling to their average day:
The lights must never go out,
The music must always play,
All the conventions conspire
To make this fort assume
The furniture of home;
Lest we should see where we are,
Lost in a haunted wood,
Children afraid of the night
Who have never been happy or good.
The windiest militant trash
Important Persons shout
Is not so crude as our wish:
What mad Nijinsky wrote
About Diaghilev
Is true of the normal heart;
For the error bred in the bone
Of each woman and each man
Craves what it cannot have,
Not universal love
But to be loved alone.
From the conservative dark
Into the ethical life
The dense commuters come,
Repeating their morning vow;
"I will be true to the wife,
I'll concentrate more on my work,"
And helpless governors wake
To resume their compulsory game:
Who can release them now,
Who can reach the deaf,
Who can speak for the dumb?…

Refer a friend

ONE IMAGE: Hamas Terrorist Operation Al-Aqsa Flood:

People forget how small Israel is. From Gaza City to Beersheba is 25 miles. That is as far as from here in Berkeley to Pacifica just south of San Franciso on the coast.

ONE AUDIO: Timothy Garton Ash & Frank Fukuyama on “Homelands”:

<https://overcast.fm/+3cnfUw-3w>

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Very Briefly Noted:

Economics: Ummm… I would not say that the Federal Reserve’s job is simple. I would say that the targets are clear, conceptually, but that implementation is very difficult. It is not as bad as, as von Clausewitz said of war “everything is very simple but the simplest thing is difficult…. Difficulties accumulate and produce a friction…” But it is bad: Mary Daly: Rising Rents & Stagnant Wages: ‘Our jobs are very simple. Our mandated goals are price stability and full employment. We're achieving full employment, and we're missing on price stability. And so Congress mandates that we achieve that goal, and that's what we're working towards…
Human Capital: Chad Orzel: Two Cultures, Both Lacking Dignity: ‘Closest to matching my take on the Two Cultures split as it currently exists is this… John Brown stan account: ‘Two things…. 1) STEM people would benefit from a bit more humanities…. 2) Humanities people typically have the less rounded education…. If your typical STEM grad were as bad with language as your typical humanities grad were at math, they would be functionally illiterate. I regularly meet college graduates who don't know how to calculate a percent change or do a simple unit conversion. That's not great!… I don't think it's good for our educational culture that math is treated as an innate skill rather than a learned skill…
Politics: John B. Judis: The Gaping Hole in the Center of the Electorate: ‘In 2024…. If candidates can show their opponents are on the side of the rich and big business, they are likely to win over the uncommitted…. On foreign policy, they are skeptical of any initiatives that do not appear obviously based on defending the national interest and American security…
Neofascism: Kevin Kruse: So Long, and Thanks for All the Fish: ‘Twitter…. I’ve been telling myself that I still had a big platform…. Except, as I slowly realized, I don’t have a big platform anymore…. We still have a big number of followers, but they’re not actually seeing what we post and we’re not remotely having the impact that we once did (or at least thought we did)…
Hannah Hartig & al.: Republican Gains in 2022 Midterms Driven Mostly by Turnout Advantage…
Noah Smith: ‘“Weird how Hamas is obviously far right but only the far left supports them.” The far left dreams of nothing but power. Their ideology is utterly plastic, and malleable…. The far right dreams of cruelty—of visiting pain on those they hate. The far left sees cruelty primarily as a tool of gaining and asserting power. It's a subtle distinction, I admit…. From Russian Bolsheviks to modern-day online tankies, those guys are all the same…
Luke O’Neill: That was what happened in the dark: ‘After that Joseph Roberts became even more popular on the right, because he was now the innocent man whose suffering had caused Title IX to be gutted…. In 2020 USA Today gave Roberts a byline in their op-ed section called “If Black Lives Matter, Due Process Must Matter.” He compared himself to Emmett Till…. Nobody ever checked up on his story about his time at Savannah State or asked around for police reports…. And so in July when Roberts killed [Rachel] Buckner, beheaded her, cut off her hands and feet, and left the rest of her body in a trash bag in Alameda, it was a big surprise…. The Weekly Standard and The Washington Examiner and Arc Digital and the opinion pages of most major dailies, but especially of USA Today, have no ethical criteria for what they run…
CryptoGrifters: David Z. Morris: ‘I'm now on page 71 of Michael Lewis' #FTX SBF book and I am still in a world where Bankman-Fried is a world-saving genius who did nothing of note wrong… Alice: ‘Towards the end it alludes to it, but ultimately aligns with the bias that SBF is trusted unless hard evidence to the contrary is presented. Gary's testimony tells a different story (that the FTX 'debt ceiling' was consistently raised), rather than fiat@ accident… precog.eth: ‘Allegiances and alliances…
GPT-LLM-ML: Lucas Ropek: So Far, AI Is a Money Pit That Isn't Paying Off: ‘Users pay $10 a month subscription fee for Copilot but, according to a source interviewed by the Journal, Microsoft lost an average of $20 per user during the first few months of this year…. AI platforms are notoriously expensive to operate. Platforms like ChatGPT and DALL-E burn through an enormous amount of computing power…. Not only is AI a solution in search of a problem, but it’s also swiftly becoming something of a problem in search of a solution…
Hussein Yahfoufi: Non-Technical Guide to Prompt Engineering: ‘1. Give specific requests… 2. Give the AI a role or persona… 3. Clearly define sections of your prompt… 4. When possible, break up the prompt into multiple prompts or define steps in the prompt… 5. Give an example of what you are looking for…. 6. Control the scope of where an answer comes from… 7. Ask for citations when accuracy is critical… 8. Chain your prompts… 9. Give ChatGPT time to think… work through the problem step by step… 10. Ask ChatGPT if it missed anything…

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