Finally, Bloomberg has something on macro worth seeing

Mercifully, this actually has nothing to do with what Jamie Dimon thinks.

You need to stop doing what you are doing — unless I guess what you are doing is buying dollars 😉 — and go see this.

Larry Summers tries to explain to his utterly clueless, yet pompous, interviewers at Bloomberg that Trump’s approach to trade does not rise even to the level of voodoo economics. It is more like Creationism and denying Evolution. Check the video at 8:00. This is prime Summers condescension, which I always find so convincing in real time and later come to regret, although probably not in this case.

Fun and games aside, there is a substantial debate between Krugman and Summers over the effect of the proposed border adjustment tax.  Krugman says it will not even move the exchange rate, by which he means to insist that the trade balance is determined by capital flows, not exchange rates, and that the exchange rate will just adjust to whatever tax disturbance is implemented to maintain the dominance of capital flows.  In Krugman’s view, the border adjustment tax won’t even require a move of the exchange rate.

Summers moots a 20% rise of the foreign exchange value of the dollar in response to this. In fairness, he is citing estimates of the “advocates”, but not critically. It seems to me that this something folks need to get on top of. I am an unemployed business economist with no assets overseas, other than Canada, so I can be leisurely about it. But all you kids out there in the hedge fund world, get on it.

Speaking of evolution

Somebody need to explain to Ray Dalio how evolution works. He loves evoking the concept but invariably butchers it.

Dalio said the Journal’s report omitted several items provided to the newspaper that showed the success of Bridgewater’s unusual culture and employees’ long-term satisfaction with the firm. For example, while turnover at Bridgewater during the first two years is high at 21 percent and 10 percent, respectively, it drops off to 3 percent by the fifth year — which is “exceptionally low,” he said. He added that 94 percent of employees believe that Bridgewater’s culture helps their personal evolution, according to the firm’s latest anonymous annual survey.

Evolution happens to a species, not an individual. And it is not progressive. It has no goal.  Selection is solely for the current environment, not some universal conception of the good. The individual’s contribution to evolution is to die.

Actually, maybe this works. The reason that the long-run turnover is lower than the short-run turnover (relative to elsewhere) is that once your soul dies you can stay at Bridgewater.

Back when I was at SAC, and generally living in a state of fear driven by my own incompetence rather than a cult leader, I got approached by a recruiter for Bridgewater. She said I would be allowed to talk to Ray Dalio. I did not know what a BFD he was at the time or really what Bridgewater was. I mentioned that might be a cool “retirement job.” But I doubt they would have me now.

GOP so appalling


Prioritize is such an ugly word, which probably came from McKinsey. As a general rule, you shouldn’t go around verbizing nouns, because it makes you look dumb. Trump should say that Congress ought not establish as a priority gutting the unfair ethics lapdog.

 Speaking of quislings


The caption there is not what this guy actually said. What he said is that Ford takes all things into account when making decisions, that Trump’s deregulatory focus and pro-growth policies are worth staying for, and that this represents a vote of confidence that he will deliver what he has promised.

If Ford was being shaken down by Trump or feared being shaken down by Trump, this is exactly what they would say.  I suppose there is some possibility — a good one actually — that this guy actually likes what he is hearing from Trump, which would tend to enrich CEOs, irrespective of his effect on employment in the USA.

I am not actually confident this guy is a quisling. He may actually be just getting on the right team for the class war. But the speed with which these guys fall in line is amazing — and depressing. Land of the Free. Home of the Brave.

Separately, doesn’t NAFTA make ALL of this illegal? Or are treaties signed by the President of the United States and receiving Senate assent just toilet paper? NAFTA. NATO. All the NAs.

Hell of a country. Heckuva job. That’s it! I am so not buying a Ford.