SharperDingaan

AI algorithms actually are just an application of technical analysis, but in a diiferent context. 'History can predict future events'; in tech speak, make the machine calculate all possible correlations in a data set - & it WILL find some that are 'somewhat' predictive (middling R-square values). As it applies these correlations, we call it 'learning'. Of course, the 'machine' is only as 'smart' as the R-square of the correlation, and it's stability in an out-of-sample application; introduce it to a market-discontinuity, and it goes beserk :) One of the theoretical arguments around HFT is that if your holding period is very small (nano-seconds), almost all your price gain will be attributable to market drift; and we can calculate the amount of that drift, using the Brownian Motion equations. Applied to AI, the more you can apply the Brownian Motion equations to an AI algorithm, the more accurate and stable it becomes. All things coming out of the 'investment' silo, and making the jump into other places. SD

Well, Detroit went through a bankruptcy in 2013, and the Pensions obligations took a much smaller haircut than other debt obligations. Buffet wrote about this and clearly stated that moving a company to location with a pension problem implies a liability for the company or their employees and needs to be considered. Buying a property or house in such a Location is pretty much the same. The typical arrangement with these is that existing pension participants are protocted as as date X, and the plan closed to new participants. Go-forward inflation/cost-of-living adjustments then become zero until the plan becomes manageable again. Inflation, and early deaths essentially take care of the problem. SD

More inclined to think humans think too much of themselves ... Repeatedly don't wash and you're prone to boils. Filth caused the boil. Cause and effect. Pop the boil, but not remove the pus, and you just get a bigger mess. Intervention caused it to worsen. Also cause and effect. But did intervention CAUSE the boil? No. It was already there. Do planetary cycle changes trigger climate events? seems reasonable. Has human intervention (emmissions, pollution, etc) made the effects worse? quite probably. But did humans TRIGGER those climate events? pretty damn arrogant to think we're that powerful! All we can do is take our best guess, and decide as to whether its worth spending some of todays treasure in precaution. You also have to be alive to benefit, so if you're 90+ ... it's not so great a deal :) SD

I think the fact that climate scientists can't forecast accurately is more of a reason to play it safe and protect against climate change. If scientists were sure climate change would cost between 5 to 10 trillion to the global economy we could prepare for that. However if the range was 1 trillion to 25 trillion you have to be more proactive as the potential pain of 25 trillion significantly outweighs the upside suprise of only 1 trillion in costs. Additionally most climate scientists have usually been wrong by being too optimistic. Your argument has an unjustifiable lack of symmetry. Since we can't forecast accurately we should assume bad cases on both sides. For example if global warming is in fact preventing an incipient ice age than the cost of preventing it could be 100 trillion or more. So I say the surprise of an ice age vastly outweighs the pain of warming. There is also another problem. The future is filled with tail events like this...all of which have huge potential costs. You cannot avoid and plan for all of them simultaneously both because plans may be mutually exclusive and because you won't have the resources. My argument is that you would be far better off focusing on adaptation to an unknowable future than pretending you can predict it and avoid all its various worst cases. Nobody 'knows' the future, all we can do is guess. Then 'bitch' that my guess is more 'precise' than your guess ;) it's just a guess folks! The standard approach is to simply share the risk ..,, Pay for the event if/when it occurrs, and spread the cost over the entire population. Our neighbouring volcano blows up, we're all dead - the same as its always been. But at any point ....... We can simply move to someplace else, away from the volcano. Renewables versus fossil fuels. But it's not a guarantee; move to the ocean, and maybe we just drown when the volcano goes off. However, like cockroaches, some of us will remain living. Problem is ... Do you want to be the long-lived cockroach dressed in skins, with lower quality of life. OR - do you want to live like a king, with high quality of life, next to the volcano - until it blows? If you're old/sick you want the volcano - as time is limited, if you're young - you'd rather live forever! Who's doing the bitching? the rich countries, that are the equivalent of the old/sick! Sure, TODAY, the renewables are not as good or cost-effective as they could be. But it's fixable through repeat rounds of innovation, and economies of scale. Lots of runway. Fossil fuels are the same; but they've been around for a while, & the cheapest deposits have been used up. Less runway. Harvest the fossil fuels, reinvest in renewables, and you improve BOTH economics AND the environment. No brainer. Carbon taxes are just a way of doing it. Not what the spin doctors want you to hear. Screws up the message! SD

This is no different to TV advertising by a drug company; that puts an actor in a white coat, to sell the virtues of drug X, Y, Z. An infomercial, made to appear legitimate. But questionable infomation. All scientist are trained in scientific methodology. But a scientist trained in climate science, approaches it differently than a scientist trained in geology or biology. The geologic record evidences repeated climate events, the biologic record evidences mass extinctions at about the same periods; climate science relates all these things, and more, holistically together. Weight/legitimacy is relative. Climate scientist highest, then supporting sciences (geology, biology, etc), you and I next. But media 'presence' is weight/legitimacy x 'marketing'. A well marketed supporting character will often 'rank' higher than a poorly marketed expert; as the legal profession demonstrates every day. 'Heart' also often overides 'head'. 'Heart' says deny, 'cause we don't want to change or pay the costs of change; whereas 'head' says at least take precautions, just in case you're wrong. But .. as long as the 'effects' happen elsewhere, and slowly - 'heart' will prevail. Doesn't mean it's 'right'. SD

Guess what currency was used to transact for purchases https://blockonomi.com/history-of-silk-road/ All that the world knows, is that a digital wallet has 'N' BTC in it. The world does not know who's account that is, who paid into it, and who received any payments from it; just accounts. ONLY two entities know the identities; the account holder, and the Oracle that issued the wallet keys. SD

Much is made of the 21M cap. Problem is that BTC is not scarce, UNTIL that cap is eventually reached. The second problem is what does the cap include? Are the BTC in frozen wallets (lost the keys) included in that 21M? - 'cause if they aren't, it's hard evidence that the cap can, and has been changed; upwards (ie: inflation). The 'risk' also didn't go away, it just got swapped. BTC offers the most value to the criminal element, and BTC security ultimately rests on their material presence. Russian and Chinese hackers are very good, but nobody hacks their patrons as it leads to a very short life ;) Hence asset class non-correlation, comes at the cost of criminal association. Not always a bad thing, if the alternative is reliance on a corrupt cental banker. BTC is just another brand of soap; there are lots of competing brands (stores of value), and there always will be. There will also be competing central banker token (CBDC), that is interest bearing. 5% capture of the existing gold allocation seens overly optimistic SD

'Store of Value' is THREE things; 1) the 'store' itself, 2) the cost to 'transact' with the store, and 3) the anticipated length of the storage period. If I used my house as the 'store', the cost is maybe a low 3-6% (buy & sell commissions), but my 'store' is not unique. If I used Bitcoin as the 'store', the most recent 12 month nominal loss on sale (transaction cost) had I sold - would has been very high, but my 'store' is unique. But if I intended to hold that Bitcoin for 'N' years, and could expect a nominal fiat currency gain on sale (because of inflation) when I sell, then Bitcoin is a great store! Yes the tech is wonderful. But I just want the 'store of value' to be able to give me my money back, anywhere, when I want, at a net zero cost. Whether that 'store of value' is BTC, diamonds, gold, carpets, cars, art, houses, or sea shells - I don't really care. Look around you .... Where are the rich people 'storing their wealth' ? Houses, social connections, stock/bonds ........ BTC is far down the list. SD

Oh, I think you do .. https://www.coinbase.com/price/bitcoin Feb 18 2019, 1 BTC was worth 3,578 USD. 35.7M for that 10,000 BTC pizza One year ago, Feb 19, 2018, 1 BTC was worth 11,491 USD - and that 10,000 BTC pizza cost 114.9M Hey bro, where did my 79.2M go ? (114.9 - 35.7). 'Store of value' man! from your pocket into mine ;) Not quite how 'store of value' is supposed to work! SD No idea what you are talking about here. If you have invested in $25 into bitcoin in May 2010, It would have been worth $40 million dollars today. That is a simple fact. Verify this yourself. https://qz.com/1285209/bitcoin-pizza-day-2018-eight-years-ago-someone-bought-two-pizzas-with-bitcoins-now-worth-82-million/ At the time when this article is written it was worth 82 million. Today, the same 10,000 bitcoins are worth, $40 Million dollars. It is quite obvious that Crypto Assets are the best performing asset on a 10-year basis with a huge margin.

You might want to be remind yourself that you are ONLY talking Bitcoin here, and NOT the other crypto. You might also want to consider human nature. The store of value is based on a maximum 21M coin, a number set by humans. People change, key folks die, circumstances change. Todays 21M limit can, and probably will, change at some point in the future. And recognize that the store of value ..... also has to hold its value. Yesterdays $1.00 Bitcoin, selling for 2c today, hasn't exactly done its 'store of value' job very well. SD

Just to add to this .... Accounting treatment is mandated by the accounting standard used. US GAAP allows amortization over 40 years, IFRS requires a means test every year, and an immediate expense of any decline in valuation. However, IFRS also allows a write-up of goodwill, to the total amount paid for goodwill at the time of acquisition; US GAAP does not. The IFRS treatment is largely a response to the widespread abuse of goodwill accounting under GAAP; primarily by serial acquirers, technology, and drug companies. Create the goodwill by using overvalued company stock to pay for the acquisition; amortise the cost of the 'synergy premium' over 40 years to minimize the impact every year. And the bigger the goodwill asset, the better the Balance Sheet ratios, and the easier to debt finance. If the promised 'synergies' subsequently did not appear, it did not matter; as there was no impact on the annual amortization. The name may be the same, but economic and accounting goodwill are not the same thing. Goodwill is not a substitute for reputation; it's just acquisition premium. SD

Goodwill is a business expense no different to depreciation, and reflects use of the asset. Tax deductibility depends on the tax code of the country the company is based in, in most places it will be a tax deductible expense. Where goodwill was incurred in foreign currency, it is revalued the same as any other foreign currency asset at period end; typically at the end-of-period exchange rate. It's not that unusual a transaction; it's just not seen that often on most NA company books. SD

The company will report on its Statement Changes Financial Position the debt due on maturity date. There will also be a note disclosure that outlines the relevant details, terms, and conditions. The only time an entity can report a 'gain' on its issued debt, is if they've bought it back from the market at less than the maturity value; then either extinguished or defeased it. A company can only MTM assets and liabilties available for sale, and must record the MTM adjustment in Other Comprehensive Income. It cannot record a MTM adjustment on debt that it has issued, just because it has become less credit worthy. A company does not get a positive MTM on debt they cannot repay as a result of restructuring or bankruptcy. Under IFRS goodwill is means tested every year, and the deteriation in value recorded as a goodwill expense in the income statement. Under US GAAP, goodwill is simply amortized forward over up to a 40 year period. Obviously it is possible to 'engineer' transactions. Parents will often defease a portion of a subs debt to execute a restructuring. Goodwill will often move to a US GAAP reporter to minimize the annual goodwill charge. To avoid a note disclosure it must only be non-material, at the time it occurrs. SD First: I am no accounting expert, but I would like to add some questions for my own understanding... On the question whether principal shown or whether interest is included: Wouldn't that depends less on whether a company is a corporate or a bank, but on the form of the debt? To my understanding, loans taken by a company would be accounted for at amortized cost and hence be shown as principal, only. Debt issued via marketable securities (bonds) would be accounted for at fair value. Fair value is the value of all future payments, discounted by expected interest rates plus credit spreads of the issuer. Thus, debt accounted at fair value would be discounted for by the market's estimate of the issuer's creditworthiness: if the issuer's creditworthiness degrades, liabilities are reduced and a gain is shown. I don't like this effect either, but if you want fair value to reflect market price, then there is no easy way out of this - after all, the market will indeed pay less for your bonds if your creditworthiness degrades. If I remember correctly (and again, I am no expert on this, so I might remember wrongly), this discount is treated differently in U.S? IFRS and European IFRS: IIRC in Europe, the best approximation of market price, including discounts for creditworthiness, will be used for fair valued liabilities while in the U.S. the market price has to be corrected by changes from own creditworthiness so that deteriorating creditworthiness will not reduce the liabilities (which I think to be more intelligent than the European treatment because a company always will have to repay its debt fully) Can anyone confirm this? I am really not certain about this difference, but I think that the upcoming IFRS 9 will have rules that forbid to show gains on the balance sheet caused by deteriorating creditworthiness...

Liberty simply chose data points that are more sensational than relevant. Click bait. It would have been more powerful if he'd also included the number of dead coin, as a % of all coin issued. Sure, most crypto has lost 90%+ of it's peak value; yet despite that, Bitcoin (the monster), has dropped the least of all them. Maybe because Bitcoin is the only one you can hedge with options/futures? if you know how? Sure a lot of people lost a lot of money, greed's a bitch. Others made a lot of money on their 'crypto' investments, and continue to do so today; but they all have deep knowledge in the technology/asset class. Sadly, jelously is part of life, and nobody likes the winner - when it isn't them. Crypto isn't going away. There are quite a few very practical applications for utility coin, but they aren't public, and there's little interest in making them public. Many of them 'hiding' in plain sight, that you and I have been actively using for years, and take for granted. Everytime you have 'redeemed' a travel point, or a 'gift card', what did you think you were doing ;) SD

..... and that near/long-term prospects for o/g in the WCSB are not as sh1t as some would like you to believe. Not quite the 'political' message that everyone's conservative Alberta MP is currently whispering in their ear. SD

Financially, a house is valued the same way that we value a bond; PV of future benefits. When interest rates are high the PV of those future benefits is small (house is cheap); when interest rates are low the PV of those future benefits is large (house is expensive). Change usage, and you change the benefits, further altering the calculation. Leverage the asset (mortgage) and you magnify the PV change in benefit. Per the below reference. The average mortgage rate in Canada is 6.9% In the 1980’s it ranged from 12-14%, spiking at 21.94%; from 2008 it has fallen from 5% to the current 3.84%. The usual mortgage amortization term is 25 yrs. For illustrative purposes, make up a monthly payment; and discount it for 25 years at each of the above mortgage rates. The 1980’s house price is very low, the 2018 house price very high, and the average house price is ‘in between’. Divide by the average house price to get a sense of the impact neccessary to return to 'average'. https://www.theglobeandmail.com/real-estate/the-market/remember-when-what-have-we-learned-from-80s-interest-rates/article24398735/ Of course, todays housing market should fall as interest rates go back to 6.9%. But we have no idea how long it will take for rates to rise another 310bp, and we know that the price for an individual property will be determined by supply/demand at the time of sale. If nobody wants your place, you’re not getting the price you want. Look around you. At current debt levels, how many people around you would still be able to pay their floating rate mortgage if rates were 300bp higher? They need to sell before that occurs, and move to something smaller with a smaller mortgage. The price of the $1M McMansion falls as everyone sells, and the price of the 500K townhouse rises as everyone buys one. The houses remain, with different people living in them, but the process takes a very long time. No crashes. Boomers owe their wealth to their ability to have bought a house in the mid 80’s, and finance it with a mortgage. 25 years later that house was worth many times what was paid for it, the mortgage was paid off, and the gain on sale was tax free. And every year of those 25 years, interest rates fell, continuously spurring the economy, and ensuring that you remain employed. And if you were a ‘bank’ employee you did even better, with ‘below market’ mortgages as a perk. If you’re < your mid-40’s today, this isn’t your life. SD

There are still 12 registered political parties Who sleeps with whom really doesn't matter; how many boxes on the voting card matters, and the sentiment on the day. We all found our last time around that many shades of blue isn't blue - it's orange. And as conservatives have ruled Alberta for 40 years+ that result could ONLY have been an 'own goal'. Sure mistakes happen, but this isn't the first time. We dont care who wins; just do it decisivly, and have your house in order. We don't see that it is, and this is a time when millions of people in Alberta need clear leadership to get things done. Silence, and toleration of a gong show is counter-productive. Folks in Alberta are angry, as they should be. They want change, and it isn't going to be 'same old' anymore. It also isn't going to be just changing the colour of the ruling political party. We wish Albertans luck in their choices SD

Power to the conservatives. But if the PC's and the WRP were as tight as believed, they would be 2 fewer choices on the voting card come May. If every one of these voters voted for the UCP, as they say they will, the UCP might well beat the NDP; but we know that survey responders frequently lie, and if those PC and WRP boxes still appear on the voting card .... ??? There's still MANY shades of blue on the voting card; and a conservative is voting for the SHADE of blue, not the COLOUR blue. Of course, the spindoctor will swear up and down that isn't true, but until those political parties actually de-register .... We still have a gong show. SD

Canadian voters typically throw an incumbrant out, they don't vote a specific new guy in. Hence, Alberta will probably end up with a conservative government. The sad part is that Alberta's conservative movement is really a 'gong show'. 8 (AAP, AP, FCPA, PAPA, PC, RPA, UCP, WRP) of the 12 registered political parties running for Alberta's election, are just various brands of conservatism. https://www.elections.ab.ca/parties-and-candidates/parties/ Makes your head spin ;D If this is how 'conservatives' manage 'their' brand, it doesn't look promising for Alberta. We just want good governance. Could care less if its the 'comrades', 'libtards', 'tree-huggers', or 'PC's' that do it - just don't screw it up! Hence the smartest thing Albertas conservatives could do for themselves, is cut throats and toss the bodies down a deep well. One brand of soap gentlemen, not eight! Obviously not a popular view. But most people would say, 'you get what you deserve' Hopefully, sanity prevails ...... and sooner, rather than later. SD

My bad, my reference was supposed to have been Western Union and not Wells Fargo. In most places, if you don't have a bank account; you can't participate in the global 'payments' system. You got around it by using various versions of the 'Hawala' or 'Chiti' systems. Give your money to person 'X', they would arrange payment to person 'Y', in countries A, B, or C - in return for a large fee, and a reputation for honest dealing. No bank account to receive money into = no credit = no cards (debit/credit) = no way to obtain cash without paying somebody a large fee to cash your (wage, social assistance, etc) cheque for you. Maybe the nearest 'branch' is too far away from you, you look/smell so much like a bum (homeless, druggies, etc.) that security/staff won't let you in to open an account, or you're just an 'undesirable' caste member - & it's outright discrimination. 2 Billion+ people around the world. ApplePay, GooglePay, etc. doesn't care what you look/smell like, or where you live. You can open an account on-line, from anywhere; easily receive money into, and pay out of that account; and at a cost that purely depends on whether the 'other side' also has an ApplePay, or GooglePay account. All you need is a basic smart-phone, a reliable way of charging it, and an internet connection. Much of which already exists in many places. So what? Mega-Bank XYZ is typically 'at most' a national bank + 'a bit'. Sizeable if you're US, less so if you're Icelandic. ApplePay, GooglePay, clients are 'everyone on the planet', they are scaleable networks, and transaction costs decline with size. Lose the ability to curtail access to a bank account, and it's Mega-Bank that's dead in the water. All because they were too arrogant to work with the 'little people'. Recognize the enormous opportunity in front of their noses - couldn't get past the smell. And that this is a common experience of just about EVERY new-comer/immigrant in the world. SD

There are literally hundreds of thousands of migrant workers around the world, that are systematically exploited. They don't look like us, talk like us, think like us, and may even 'smell' a little. They're the bottom of the social ladder, exist to be abused, and they do all the sh1t jobs that you and will not do. But they have the same needs as everyone else, and are ignored because they are too 'poor' to pay. Of course, every drug dealer, and pimp, knows this is utter bullshit - but apparently, not Wall Street. Migrants typically pay 10%+ of their weekly remittances in fees, simply for a Wells Fargo to take their cash and wire the proceeds to their home country. Yet we can routinely do the same thing by any one of a number of smartphone apps at a fraction of the cost; we just need an account to deposit the cash into. But according to Wall Street, that isn't a threat; and we continue to systematically over-value Wells Fargo, and under-value the smart app competitors. Traveling circus acts, made their money bringing 'low-brow' entertainment to the people. It's essentially live theatre, & didn't require you to know the language, or the culture, to enjoy a good laugh amongst others in similar circumstance to you. Masked mexican wresting shows are very similar, and the characters are often hilarious, when 'collecting' from the crowd after the show. Clear value, but unless it's a 'Vegas' quality production, not worth anything. Rags to rags in 3 generatiions, also applies to industry. SD

We live next door to the US, it's our 70%+ trading partner, and we don't have a wall. That'll be next week - to keep the socialists out! SD

Kids 'fall' into entreprenurialism, they can't be pushed; much as you can lead a horse to water, but can't make it drink. Curiosity both leads the way, and sets the pace; the same way a 'hand's-on' exhibit at a science museum encourages experimentation. And the person 'teaching' it is often the artisan/trades-person doing it, not the parent. Around the world, entrepreneurs almost instantly recognize each other. Hence, a budding 'entrepreneurial' kid couldn't get a better instructor, and the more precocious the kid, and less parental 'control', the better. 'Class' and status has no bearing, and everything is about you - the person. I was taught how to brew native beer in 44-gallon oil-drums, and serve it by the calabash at zulu 'beer drinks', by two 'traditionally-built' black african women; under apartheid, where racial 'mixing' was not supposed to exist. It was a short-step from that into boot-legging (applied physics/chemistry) and calling horse races at the local nearby track (applied statistics). Because I was 'known',and could speak 'zulu', I'd hear from the 'stable-boys' how the various horses were performing; and place Saturday morning bets for eveyone 'accross the fence'. Sadly it had to eventually be shut down because we were winning too often, and the stable-boys were using the money to return home. Evey now and again, there would also be an interesting 'update' with the folks. Siblings compete, so where one is successful; expect the others to follow. It emerged many years later that my sister was way more 'entreprenerial' than I ever was, and I had no idea! She had also been 'adopted' into a different native tribe, as I had; and the various tip-offs received over the years, kept the family free of terrorist ambush. Entreprenurship is simbiotic. Main point here, is get out of your kids way. Lead them to water, let them make their own decisions, and keep a 'light touch'. SD

That tiny minority poisons the well for everyone else, and while that may have been seen as acceptable at one time; the times have moved on. Hence the reference to drunk driving, 2nd hand smoke, wife beating, etc. Agreed environmental liability is an ongoing cost of business. You can either 'pay as you go', or provision for it - and rank that provision ahead of all obligations in a bankruptcy. You don't get to diminish/escape it by simply declaring bankruptcy, the times have changed. Greater certainty, and a lower cost of doing business. Everybody hates their banker, their regulator, and God damn that CPR! ;) It gives everyone someone else but themselves to blame, and helps politicians capture votes. Of course there is no possibility that either you, or your industry, were a sh1t credit at the time you applied - and the banker was just being prudent? They didn't have to lend to you, and apparently you ALSO couldn't get ANYONE ELSE to lend to as well? Your banker was right! Sure, regulators and central bankers aren't perefect, they're human. And we all accept the cost of that, when we collectively pay to clean up the impairment that the minority left behind. Apparently we can't change the rules of the game, that permit the extraction of those resources that we all collectively own? Different strokes. SD

Quick adds to this .... Your kids are NOT little versions of you, and are NOT there to follow you into the 'family profession/business'. Great if they choose to, but it's THEIR decision, NOT yours. Seems obvious, but lots of parents just don't 'get' this. Kids screw up; all the time. If they aren't - they aren't learning. But it's often better to let the 'market' clear the screw-up; as the 'real' learning is in how you fix your mistakes. School-yard bullying, and mental abuse, is part of life. But they cant bully, if they cant walk, and have to breathe through a straw. There is also nothing wrong with giving kids their heads. Just be aware that their 'undertakings', may be a lot more than what you might have been expecting. Bootlegging tends to rock parents a bit. SD