Gospel at the Wall St Journal (and probably the other business publications too) is that raising interest rates hurts the stock market and falling interest rates help the stock market. The Journal is the only business publication I read, so I don't really know if the rest of the business press follows the Journal's gospel, but it's a good bet that they do.
Why this link between market performance and interest rates? Could it be that a lot of stock is bought for speculation, and on borrowed money? Margin accounts with brokerages, where the stock broker loans the investor/speculator the money to buy the stock, and the investor/speculator pledges the stock as collateral to back the loan.
Is this a good thing? Margin accounts can really slam the market hard. When the market goes down, like it did this month, the value of the stock pledged as collateral goes down. And the broker calls the investor/speculator and asks for more money to back the loan. A margin call. The only way most investor/speculators have to raise the money is to sell the stock, which drives the market down further.
The social good that the stock market performs is to make stocks into a very liquid asset. I can buy stock with my extra cash, knowing that when I need the money for something, I can sell the stock, quickly. Without the stock market, should I need to turn my stock into cash, it might take months to find someone who wants to buy my stock. And without the market doing deals and publishing the stock price, I would be hard pressed to get a decent price for my stock. I might decide not to put my money into stocks, but rather such economy boosting assets as antiques, artworks, classic cars, coins, stamps, cyber currency, or betting on sports.
The social purpose of the joint stock company is to channel investor money into companies that use the money to build factories, build railroads, buy equipment, and grow the economy. If the investor's money is just a loan, then the investor is sucking up loan money that could just as well be borrowed from banks by the company itself, rather than giving the investor a cut.
The stock market has a lot of gambling built into it. Do margin accounts, and borrowing to buy stock make it easier for companies to raise money, or do they just support the gambling part of the market? If we forbid borrowing to buy stock, would the market be steadier and more predictable?
Thursday, March 1, 2018
Wednesday, February 28, 2018
V-22 Osprey vs large Helicopters
A few numbers:
Chinook CH-47
Cost $38 million
Combat Radius 200 miles
Cruise Speed 160 knots
Payload 24,000 lbs
Super Stallion CH53
Cost $24 million
Combat Radius 621 miles
Cruise Speed 150 knots
Payload 30,000 lbs
Osprey V-22
Cost $72.1 million
Combat Radius 426 miles
Cruise Speed 275 knots
Payload 20,000 lbs
The Marine Corps loves the V-22. Not sure why. All the V-22 offers over the CH53 is much higher cruise speed. The CH-53 has better combat radius and payload. We could buy three CH-53 helicopters for the price of a single V-22.
Chinook CH-47
Cost $38 million
Combat Radius 200 miles
Cruise Speed 160 knots
Payload 24,000 lbs
Super Stallion CH53
Cost $24 million
Combat Radius 621 miles
Cruise Speed 150 knots
Payload 30,000 lbs
Osprey V-22
Cost $72.1 million
Combat Radius 426 miles
Cruise Speed 275 knots
Payload 20,000 lbs
The Marine Corps loves the V-22. Not sure why. All the V-22 offers over the CH53 is much higher cruise speed. The CH-53 has better combat radius and payload. We could buy three CH-53 helicopters for the price of a single V-22.
Tuesday, February 27, 2018
Taking Honest Work From Trial Lawyers
Yesterday's Wall St Journal had an op-ed piece headlined "Safety from Hackers -- and Trial Lawyers". The author, Brian E. Finch is a lawyer working for a "cyber security" law firm. He is advocating passage of the "Cyber Safety Act" thru Congress. This act would shield companies from law suits over security breaches.
Right now, companies can get sued down to their socks when hackers get thru their security and steal customer lists, with addresses and credit card numbers. Mr. Evans thinks this liability is horrible and discourages innovation in the tech industry.
Me, I think fear of lawsuits is the only thing preventing companies from selling even more insecure products than they do today. Suing Micro$oft for the uncounted security holes in Windows would improve world wide cyber security. The hackers that cracked the federal Office of Personal Management got their hands on my old Air Force service records and records of security clearances that I held for years after leaving the Air Force. Right now, any thoughtful company will take all the precautions it can think of to keep hackers out, for fear of dreadful law suits and market annilation when loopholes let the hackers in.
We got a lot of excess lawyers sloshing around the country, mostly causing trouble. Let's put them to work suing companies that peddle insecure products or who fail to safeguard their customer's records.
Right now, companies can get sued down to their socks when hackers get thru their security and steal customer lists, with addresses and credit card numbers. Mr. Evans thinks this liability is horrible and discourages innovation in the tech industry.
Me, I think fear of lawsuits is the only thing preventing companies from selling even more insecure products than they do today. Suing Micro$oft for the uncounted security holes in Windows would improve world wide cyber security. The hackers that cracked the federal Office of Personal Management got their hands on my old Air Force service records and records of security clearances that I held for years after leaving the Air Force. Right now, any thoughtful company will take all the precautions it can think of to keep hackers out, for fear of dreadful law suits and market annilation when loopholes let the hackers in.
We got a lot of excess lawyers sloshing around the country, mostly causing trouble. Let's put them to work suing companies that peddle insecure products or who fail to safeguard their customer's records.
Meet Jane Walker
Big liquor company Diageo is launching a whiskey for women brand. Called Jane Walker, with a snappy new label showing a sharp looking female version of Johnny Walker. The scotch inside will be the same as what goes into Johnny Walker Black Label bottles.
Will it sell? Consider that few guys will buy a women's whiskey, which cuts the new brand off from half the population, the harder drinking half. How many women will buy a women's whiskey rather than the old reliable well known Johnny Walker? Or old reliable Cutty Sark, J&B, or Ballentine for half the price of Jane Walker ?
Will it sell? Consider that few guys will buy a women's whiskey, which cuts the new brand off from half the population, the harder drinking half. How many women will buy a women's whiskey rather than the old reliable well known Johnny Walker? Or old reliable Cutty Sark, J&B, or Ballentine for half the price of Jane Walker ?
Monday, February 26, 2018
Dr. Seuss is back on top
Wall St Journal, best selling books week ended 18 Feb.
Hardcover Fiction
Green Eggs and Ham Dr. Seuss Number 6 in sales
One Fish Two fish Red fish Blue Fish Dr. Seuss Number 10 in sales.
Not bad for a couple of children's books that have been in print like forever.
Hardcover Fiction
Green Eggs and Ham Dr. Seuss Number 6 in sales
One Fish Two fish Red fish Blue Fish Dr. Seuss Number 10 in sales.
Not bad for a couple of children's books that have been in print like forever.
Sunday, February 25, 2018
Alternate History: WWII Might have beens
Everyone agrees that Hitler's greatest mistake was to take on the Russians before finishing off the British. In 1940 the German army had shown it was lightyears ahead of every other army. The Germans had occupied Denmark and Norway, invaded and conquered Poland, Holland, Belgium, and even France. All the Germans needed to do, to settle Britain's hash, was to get their army, actually just a small part of their army, across the English Channel. After Dunkirk the British Army was in no shape to stand off an invasion of Boy Scouts, let alone a couple of panzer divisions.
The only problem from the German point of view, was getting their army across the channel in one piece. They had about 2000 Rhine river barges to make the crossing in. These were seaworthy enough for a channel crossing in good weather. Summer weather. Trouble was, the British had a couple of hundred destroyers, fifty cruisers, and a dozen real battleships to oppose such a crossing. When the British steam up along side a river barge in a destroyer, that's the end of the river barge and all its troops, (or cargo). The Germans only had about ten destroyers, some subs, a couple of cruisers, and a couple of light duty battleships. The Royal Navy would have an enjoyable turkey shoot cleaning out that batch. The only equalizer the Germans had was the Luftwaffe, and for that to be effective it had to defeat the Royal Air Force. You cannot take out surface vessels when you have Hurricanes and Spitfires on your tail. The Germans tried to take out the RAF in the summer of 1940, resulting in what we now call the Battle of Britain. Unfortunately for Hitler, the RAF out shot the Luftwaffe that summer.
One equalizer that the Germans might have obtained, the French Navy. France was a great power, and had a sizable Navy, not quite as big as the Royal Navy, but far superior to what the Germans had in 1940. The French were pissed off at the British, they blamed the British for their defeat by the Germans that summer. According to the French, the British didn't send enough troops, enough aircraft, and they bugged out when the going got tough. If the Germans had stroked the defeated French enough, they might have been able to get the French to join them in an invasion of England, and bring along their Navy. This would have required a lot more diplomacy from the Germans than was usual for them, but it might have happened. And if so, it would have been curtains for the Brits in 1940.
This worried the British so much, that they sank a good portion of the French fleet in North Africa just to make sure they didn't join the Germans.
The only problem from the German point of view, was getting their army across the channel in one piece. They had about 2000 Rhine river barges to make the crossing in. These were seaworthy enough for a channel crossing in good weather. Summer weather. Trouble was, the British had a couple of hundred destroyers, fifty cruisers, and a dozen real battleships to oppose such a crossing. When the British steam up along side a river barge in a destroyer, that's the end of the river barge and all its troops, (or cargo). The Germans only had about ten destroyers, some subs, a couple of cruisers, and a couple of light duty battleships. The Royal Navy would have an enjoyable turkey shoot cleaning out that batch. The only equalizer the Germans had was the Luftwaffe, and for that to be effective it had to defeat the Royal Air Force. You cannot take out surface vessels when you have Hurricanes and Spitfires on your tail. The Germans tried to take out the RAF in the summer of 1940, resulting in what we now call the Battle of Britain. Unfortunately for Hitler, the RAF out shot the Luftwaffe that summer.
One equalizer that the Germans might have obtained, the French Navy. France was a great power, and had a sizable Navy, not quite as big as the Royal Navy, but far superior to what the Germans had in 1940. The French were pissed off at the British, they blamed the British for their defeat by the Germans that summer. According to the French, the British didn't send enough troops, enough aircraft, and they bugged out when the going got tough. If the Germans had stroked the defeated French enough, they might have been able to get the French to join them in an invasion of England, and bring along their Navy. This would have required a lot more diplomacy from the Germans than was usual for them, but it might have happened. And if so, it would have been curtains for the Brits in 1940.
This worried the British so much, that they sank a good portion of the French fleet in North Africa just to make sure they didn't join the Germans.
Friday, February 23, 2018
Notes for auto designers
Let's talk about the driver on the interior of the car. The dashboard has to be usable in full sun and in darkness. Those dinky little digital displays, LED's usually, just aren't bright enough to see when the sun is shining in thru the windows. Where as a good round dialface, with a nice bright pointer is readable day and night. Even better would be the system we used in the Air Force. All gauges were marked in green for their normal operating range and red for dangerous ranges. Hence the term "redline".
And the cost cutters keep pushing the cheapest kind of control, a single pole single position push button. And they make black buttons on a black control panel, with tiny little legends on the buttons. Leaving us drivers fumbling in the dark just trying to change stations on the radio. The radio on my car is so bad that Buick wired up a complete second set of radio controls on the steering wheel, to make it easier to use the radio. Fine industrial design that, dual controls on a car radio. If they just made the buttons a contrasting color to the control panel it would help a lot. And they could standardize those steering wheel stalks that work the wipers and washer, the lights, the turn signals, and the slushbox. And important controls ought to be knobs that you can feel for in the dark, not pushbuttons. For extra credit put different shaped knobs on different controls so you can tell them apart by feel in the dark.
And the cost cutters keep pushing the cheapest kind of control, a single pole single position push button. And they make black buttons on a black control panel, with tiny little legends on the buttons. Leaving us drivers fumbling in the dark just trying to change stations on the radio. The radio on my car is so bad that Buick wired up a complete second set of radio controls on the steering wheel, to make it easier to use the radio. Fine industrial design that, dual controls on a car radio. If they just made the buttons a contrasting color to the control panel it would help a lot. And they could standardize those steering wheel stalks that work the wipers and washer, the lights, the turn signals, and the slushbox. And important controls ought to be knobs that you can feel for in the dark, not pushbuttons. For extra credit put different shaped knobs on different controls so you can tell them apart by feel in the dark.
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