Kevin Duffy on looting and the welfare state

We've condoned looting for decades. It's called welfare. This is what the welfare state produced, a culture of victims. If you oppose the welfare state, well, "you're a racist!"

Conditioned by the welfare state and the envy, hatred and entitlement it promotes, looters make the system more efficient: they cut out the middleman.

~ Kevin Duffy, May 31, 2020

Vernon Coleman on coronavirus brainwashing

The fact is that if you confuse and bewilder at the same time that you're frightening people, you unsettle them and you create an anxious and obedient population.  And that's what's been going on for weeks.

~ Vernon Coleman, "Coronavirus: You've been brainwashed," 8:45 mark, May 27, 2020

George Orwell on the future

If you want to picture the future, imagine a boot stamping on a human face forever.  Power is not a means, it is an end.

George Orwell, 1984

(Addendum: In posting this quote and photo, I rushed to judgment along with the mob, viewing the events through my own ideological lens.  For an alternative view on what likely caused the death of George Floyd - drug overdose - see here.)

Minneapolis police officer kills George Floyd

Jeff Deist on presentism, progressivism and the "New Economics"

Presentism is at the core of the progressive worldview, which insists the past is alway retrograde, the present is always better but still deeply imperfect, and the future has an ultimately happy deterministic arc. It is one manifestation of the hubris which comes from imagining we live in a unique time, and a uniquely enlightened time.

Presentism is the hallmark of the imagined economics smart set: the Paul Krugmans, Christine Lagardes, Thomas Pikettys, Noah Smiths, and Benyamin Appelbaums of today. The economics they advocate—mostly in blogs, social media, financial news shows, or pop books, and never in treatises—is sui generis, unique to them. It’s their own economics, created out of whole cloth by them individually, supposedly scientific and brand new to suit today’s world. It’s a New Economics for 2020. And of course they all insist they’re merely following and interpreting the data, going where it takes them. After all, they’re scientists!

But exactly what theory or education or discipline do they apply to that data? Is it really economics?

Of course we know there is no New Economics, any more than there is new physics or new calculus. There are advances and discoveries in economic science, and there are new technologies which of course have an enormous effect on economies. But economics is, and always will be, about human action in the context of choice, scarcity, opportunity cost, and subjective measures of value.

~ Jeff Deist, "Mises and the 'New Economics'," talk at the Austrian Scholars Conference hosted by Grove City College, February 22, 2020

Andy Serwer on common thread underlying recent shocking news

The recent spate of shocking news—rioting in Minneapolis and cities across the country, 100,000-plus COVID-19 deaths, unprecedented tension with China and President Trump’s escalated ranting and bizarre-o battle with Twitter—may seem disparate and complex.

And yet underlying all of this is a single, simple thread. It is an obstruction of truth by those with a personal or political agenda. In a way then, all this news is really one story. It’s about how we’re being distracted from facts and real underlying issues. This clouding is what makes our complicated world that much more difficult to sort out and so too staking a middle ground.

~ Andy Serwer, "The common thread underlying the riots, Covid, China, Twitter and Trump," Yahoo Finance, May 30, 2020

Rolf Dobelli on the value of inflexibility

The second reason inflexibility is so valuable has to do with reputation.  By being consistent on certain topics, you signal where you stand and establish the areas where there's no room for negotiation...  If you lead a life consistent with your pledges - whatever those look like - people will gradually start to leave you in peace.  Legendary investor Warren Buffett, for instance, refuses on principle to negotiate.  If you want to sell him your company, you've got exactly one shot...  Buffett has acquired such a reputation for inflexibility that he's now guaranteed to be offered the best deal right from the word go, without wasting any time on haggling.

~ Rolf Dobelli, The Art of the Good Life, p. 11

Dr. Malcolm Kendrick on Covid-19 death certification in the UK

[D]eath certification is certainly not an exact science. Never was, never will be. It’s true that things are somewhat more accurate in hospitals, where there are more tests and scans, and suchlike.

Then, along comes Covid-19, and many of the rules – such as they were – went straight out the window. At one point, it was even suggested that relatives could fill in death certificates, if no-one else was available. Though I am not sure this ever happened.

What were we now supposed to do? If an elderly person died in a care home, or at home, did they die of Covid-19? Well, frankly, who knows? Especially if they didn’t have a test for Covid-19 – which for several weeks was not even allowed. Only patients entering hospital were deemed worthy of a test. No-one else.

What advice was given? It varied throughout the country, and from coroner to coroner – and from day to day. Was every person in a care home now to be diagnosed as dying of the coronavirus ? Well, that was certainly the advice given in several parts of the UK.

~ Dr. Malcolm Kendrick, "I’ve Signed Death Certificates During COVID-19. Here’s Why You Can’t Trust Any of the Statistics on the Number of Victims," RT Opinion, May 28, 2020

Alan Greenspan on improvements in lending technology (2004)

Improvements in lending practices driven by information technology have enabled lenders to reach out to households with previously unrecognized borrowing capacities.

~ Alan Greenspan, remarks before America's Community Bankers in Washington, DC, October 19, 2004

Kevin Duffy on ideology

In order to navigate an impossibly complex world, we take shortcuts, build logical frameworks and adopt ideologies. These are lenses through which we view events, our own reality in a sense. Over time, these lenses become hardened and extremely difficult to change, regardless of the counter evidence.

~ Kevin Duffy, "The Expert Model," LewRockwell.com, May 27, 2020

(Excerpt from the May 27 issue of The Coffee Can Portfolio, p. 2)

Kevin Duffy views the investment landscape through the lens of an Austrian economist and value investor

These are extraordinarily disorienting times. While the economist in me is terrified, my inner value investor feels like a mosquito in a nudist colony.

~ Kevin Duffy, The Coffee Can Portfolio, May 27, 2020, p. 12

Kevin Duffy on stagflation

Higher food prices in grocery stores and empty bins at Walmart (yet no shortage of toilet paper!) bring to mind the stagflation of the 1970s. With Secretary Mnuchin handing out $1,200 checks like it’s candy, it may be time to dust off those inflation hedges.

~ Kevin Duffy, The Coffee Can Portfolio, May 27, 2020, p. 12

Kevin Duffy on the downside of ZIRP

In addition to fake news and fake science, we now have fake interest rates sending fake signals to businesses and investors attempting to allocate capital, and to governments more than willing to squander it.

~ Kevin Duffy, The Coffee Can Portfolio, May 27, 2020, p. 12

Kevin Duffy on growth vs. value investing

Categories such as “growth” and “value” are overly simplistic attempts by investors trying to make sense of complexity. At the end of the day, growth and value investors are both attempting to buy a stream of future cash flows at the lowest possible price. Value investors put more weight on current earnings whereas growth investors emphasize future earnings, but I see little benefit in favoring one approach over the other.

~ Kevin Duffy, The Coffee Can Portfolio, May 27, 2020, p. 7

Kevin Duffy on the extrapolation of investors

“Past performance may not guarantee future results.” Investors often ignore this caveat, piling on after a long-established trend. With investing, the view is always clearer through the rearview mirror.

~ Kevin Duffy, The Coffee Can Portfolio, May 27, 2020, p. 7

Charles de Gaulle on the police

If police officers weren't stupid, they wouldn't be police officers.

~ Charles de Gaulle

Kevin Duffy on the two predominant ideologies

There are essentially two views of the world: order and chaos.  Some see a natural order: the food chain, pecking orders, innate behaviors, complex adaptive systems, natural selection.  Others see chaos requiring direction by a group of experts.

At least when it comes to economic activity, the overwhelming majority adopt the chaos view.  They fail to grasp Adam Smith’s “invisible hand” of mutually beneficial trade, Friedrich Hayek’s “pretense of knowledge” with regard to central planners, or Frederic Bastiat’s “seen and unseen costs” concerning the unintended consequences of economic policies.

~ Kevin Duffy, "The Expert Model," LewRockwell.com, May 27, 2020

(Excerpt from the May 27 issue of The Coffee Can Portfolio, p. 2)

Howard Marks on contrary investing

Large amounts of money aren’t made by buying what everybody likes. They’re made by buying what everybody underestimates.

~ Howard Marks

USA Today's Michael Stern on the side effects of home isolation

Moving into the third month of home isolation, the toll on each of us is different. Some face financial hardship. Some have seen their education thrown into limbo. For me, the longer I’m home alone, the more my obsessive-compulsive disorder flares. I didn’t realize this until a phone call in which a friend asked whether I was staying safe.

I explained that I had found a way to test myself for coronavirus: Loss of taste is one of the first signs of infection, so I bought a 5 pound tub of jelly beans with 49 flavors. I eat several handfuls daily, one bean at a time. If I recognize each of the different flavors, I figure that I’m safe.

The dead silence on the line convinced me it was time to book a Zoom therapy session.

~ Michael J. Stern, "Coronavirus: I was in the stay-at-home-until-it's-safe camp. But I just can't take it anymore," USA Today, May 26, 2020

Gregory van Kipnis on Covid-19 death statistics

As COVID-19 deaths mounted, not a word was officially spoken about where they were occurring [residents of long-term medical care facilities accounted for 53% of all COVID-19 deaths]. Fear was stoked that it was a population-wide epidemic. We should ALL lock down.

What a costly mistake, a mistake that continues to this day. Governors and mayors with fresh data insights into the truth still want to be central planners and determine which businesses can re-open and to what degree, who should still shelter or socially distance. They send out teams to draw circles in the grass defining where groups can camp out and place police monitors in all the parks to warn people to stay within the circles. At this point they are just imaginary prisons, but they are prisons.

Madness, sheer madness. 

Though that is an easy and superficial observation to make, what is really unsaid, and not easy to admit, is that large numbers of politicians and bureaucrats have revealed their true nature. Speeches decorated with declarations of “better safe than sorry” and “planning is better than no planning” reveal they are authoritarians by nature; central planners of the worst kind. 

In conclusion, the relevant death rate for policy purposes has been obscured. The consequence has been inappropriate policies. They have resulted in a bizarro world of highly restricted commercial functioning and immense economic destruction, alongside no evidence that lives were saved and growing evidence of second-tier loss of life resulting from lockdown.  

~ Gregory van Kipnis, "Focus on the Covid-19 Death Rate," AIER.org, May 24, 2020

Bill Bonner on the rise and fall of Amazon.com (2003)

[Jeff Bezos] was 35 when Time magazine awarded him its "Person of the Year" title in January 2001.  When the going was good, Time gushed, "Jeffrey Preston Bezos... peered into the maze of connected computers called the World Wide Web and realized that the future of retailing was glowing back at him... Every time a seismic shift takes place in our economy, there are people who feel the vibrations long before the rest of us do," rattled Time, "vibrations so strong they demand action - actions that can seem rash, even stupid."  Well, yes.  Very stupid.

[...]

Some people get rich in a revolution.  Some people get killed.  By October 2001, it was becoming clear who would be the victims - those who believed in Amazon.com and the Information Revolution.

Bezos was of course one of the victims.  In 2001, he was awarded the "Fame is Fleeting Award," by Gretchen Morgenson in the New York Times, "for one of the fastest falls from grace in recent history."  She considered it sadly ironic that he was facing irate shareholders only a year after being honored as Time's Person of the Year.

For at the end of 2000, Amazon's stock prices showed a decline of 89 percent to the $7 to $10 range (from its December 1999 high of $113).  Thus, a pin had pierced the bubble in high technology, and those who "got it" were getting it good and hard.  Their day of reckoning had come.

~ Bill Bonner, Financial Reckoning Day, pp. 23-24

Kevin Duffy on the two choices to deal with the coronavirus

1 in 295,000 people under the age of 35 have died of Covid-19. Why should their lives be put on hold for such a minuscule risk?

The correct plan should've been targeted isolation for those most at risk and normal lives for the rest, minimizing the economic damage AND the risk of infection to the high-risk group as the low-risk group gained herd immunity. Of course this plan takes into account the unique situation of every individual and is compatible with a free society.

Instead, the plan we got crammed down our throats by the authorities and egged on by the fearmongering media was universal isolation, one-size fits all. Sadly, most people accepted this because they were scared out of their wits and chose security over liberty. 

~ Kevin Duffy, Facebook post, May 24, 2020

Anthony Fauci starts to distance himself from his original lockdown advice

I don’t want people to think that any of us feel that staying locked down for a prolonged period of time is the way to go.

~ Anthony Fauci, CNBC interview, May 22, 2020

Robert Higgs on war as the "master key" of the state

War is what I call the "master key" of the state.  It's the key that opens every other door to take away your liberties.  And if you support opening that door, you have let out a monster - and you will rue the day you supported war.

~ Robert Higgs

Thaddeus Russell: "The pandemic is the health of the state"

Randolph Bourne said "War is the health of the state..."  Well, it turns out the pandemic is the health of the state.

~ Thaddeus Russell, "Why Does the Left Favor Lockdowns?," The Tom Woods Show, May 19, 2020

Thaddeus Russell on the difference between the shutdowners and the reopeners

All I can say is, for people who want the lockdown to continue, is that these are the people who value security over freedom.  That's it.  That's one of the main dividers between people.  There are people... who primarily value security, safety, you could say a static life.  They don't want time to move.  They don't want change necessarily.  And those of us who value dynamism and change and liberty and individualism and all that.  And individual creativity.  And that's the divide.

~ Thaddeus Russell, "Why Does the Left Favor Lockdowns?," The Tom Woods Show, May 19, 2020

Scott Pelley of '60 Minutes' asks Jerome Powell, "Fair to say you simply flooded the system with money?"

Scott Pelley: Fair to say you simply flooded the system with money?

Jerome Powell: Yes. We did. That's another way to think about it. We did.

Scott Pelley: Where does it come from? Do you just print it?

Jerome Powell: We print it digitally. So we-- you know, we-- as a central bank, we have the ability to create money digitally and we do that by buying Treasury Bills or bonds or other government guaranteed securities. And that actually increases the money supply. We also print actual currency and we distribute that through the Federal Reserve banks.

~ Jerome Powell, 60 Minutes interview, May 17, 2020

Glenn Kelman on the coronavirus impact on vacation real estate markets

MW: What’s your take on the state of secondary markets and vacation markets right now?

Kelman: Toast. Those are going to be in tough shape. There’s a whole economy that was built around the liquidity there that Airbnb provided. You could get pretty deep into debt and still have somebody pay your mortgage every month because Airbnb and other travel websites were so good at finding someone to rent it out. And I don’t think many of those folks have the reserves that Marriott, or that Hilton does.

~ Glenn Kelman, CEO of Redfin, "Redfin CEO: Vacation real estate markets are 'toast' because of the pandemic as Airbnb owners rush to offload their homes," MarketWatch.com, May 18, 2020

The Telegraph: "Neil Ferguson's Imperial model could be the most devastating software mistake of all time"

In the history of expensive software mistakes, Mariner 1 was probably the most notorious. The unmanned spacecraft was destroyed seconds after launch from Cape Canaveral in 1962 when it veered dangerously off-course due to a line of dodgy code.

But nobody died and the only hits were to Nasa’s budget and pride. Imperial College’s modelling of non-pharmaceutical interventions for Covid-19 which helped persuade the UK and other countries to bring in draconian lockdowns will supersede the failed Venus space probe and could go down in history as the most devastating software mistake of all time, in terms of economic costs and lives lost.

~ David Richards and Constantin Boudnik, "Neil Ferguson's Imperial model could be the most devastating software mistake of all time," The Telegraph, May 16, 2020

Brian Schartz on the rush by investors to buy Covid-19 winners

Like Pavlov’s dogs, investors have rushed right back to many of the same incredibly valued equities, despite a clear and convincing outlook that a severe recession is about to play out in the United States and all around the world.  Central bankers have rung the bell, and investors responded as they have been conditioned. In some cases, investors have declared certain equities as “pandemic winners” and bid the shares to new all-time highs creating valuations that cannot be justified even if their businesses are strong for the duration of this crisis.  We simply contemplate the magnitude of the current situation compared to the housing crisis and the dot-com bust.  We are convinced that the magnitude of this recession will prove to be much larger than either of those events.  As a result, we foresee a meaningful “second wave” of selling in the markets in the coming months.  Bull markets are born at moments of despair, not days of central bank induced hope.

~ Brian Schartz, Downtown Associates Q1 Investor Letter, April 24, 2020

Jorge Luis Borges on democracy and statistics

Democracy is an abuse of statistics.

~ Jorge Luis Borges

Will Rogers on Congress

This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer.

~ Will Rogers

H.L. Mencken on democracy reaching perfection

As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people.  On some great and glorious day the plain folks of the land will reach their heart’s desire at last and the White House will be adorned by a downright moron.

~ H.L. Mencken

Bloomberg on Covid-19 impact on global economy

The pandemic is expected to wipe out $8.5 trillion in global output and could send 130 million people into the ranks of extreme poverty, according to the UN. Already, more than 100 countries have appealed to the International Monetary Fund for help as the coronavirus eradicates key sources of revenue such as tourism and travel.

~ Bloomberg, "Pandemic Shatters World Order, Sowing Anger and Mistrust," May 17, 2020, article by Nick Wadhams

Paul McCulley on Fed buying 85% of Treasury's net debt issuance in the past 7 weeks

We’ve had a merger of monetary and fiscal policy. We’ve broken down the church-and-state separation between the two.

~ Paul McCulley, former chief economist at PIMCO, Bloomberg interview, May 15, 2020

(Credit to Philip Grant, editor of Almost Daily Grant's, for finding this quote. Also, according to May 15, 2020 ADG: "According to estimates from Bloomberg Economics, the Fed will purchase up to $3.5 trillion in government bonds this year, covering the bulk of an estimated $3.7 trillion fiscal shortfall.")