Weekend Reading
Econ
Did Lockdowns Turn Americans Into Lazy Bums?
Scott Sumner contra the idea that the easier financial conditions make the Fed’s job harder.
Dr. Doom says the Great Stagflation is coming. I don’t think he’s wrong, but it’s a lazy argument.
And for housing starts there are a record 1.665 million units under construction. This eclipses the previous record of 1.680 million units that were under construction (mostly apartments in 1973 for the baby boom generation).
We are seeing a sharp slowdown in the housing market, with more price reductions, more inventory, and fewer sales. It will take some time to see the impact on house price growth, but that is coming too. However, inventory growth has slowed recently, and inventory is key for predicting house prices.
Does the US need 4 million or 20 million new houses?
Shorting the Canadian housing market has worked about as well as shorting JGBs or buying Fannie Mae preferreds, but maybe this time it’s different? David Rosenberg: Roof is about to cave in on the Canadian economy and Canada’s Real Estate Market is a Giant Pyramid Scheme.
Ideas, Idea Processing, and TFP Growth in the US: 1899 to 2019. Paper claiming that the decline in productivity since 1969 isn’t because there are fewer ideas, or ‘low hanging fruit’ to discover, but is caused by our sclerotic legal and financial system reducing ‘idea processing capability.’
Matt Stoller on the DOJ trying to stop the Penguin/Simon & Schuster merger.
The behavior of the markets for Treasuries in March 2020 is particularly striking in contrast to the great financial crisis in 2007–2009 (GFC), during which Treasury markets rallied and did not feature dysfunction and illiquidity…
With SLR back in effect and no sign that dealers will use the Fed’s new Standing Repo Facility, it’s almost certain that the Treasury market will malfunction the next time there is an external shock.
Trump
If I had to make a market on what Trump is doing in 2025, I’d say 25% he’s dead, 25% he’s in Guantanamo, and 50% he’s President.
Ex head of the CIA implying that Grover Cleveland will remain the only US President to serve non-consecutive terms.
What’s in the Unsealed Mar-a-Lago Search Warrant?
Inside the War Between Trump and His Generals.
The establishment really, really doesn’t like Schedule F.
Foreign
America Must Prepare for a War Over Taiwan. Must we?
Germany is now the fulcrum for Vladimir Putin’s pressure.
America’s China Challenge—Joseph Nye advocating “managed strategic competition” with China.
Op-ed from a former Indian ambassador to Turkey and Uzbekistan, who won’t be getting any Georgetown cocktail party invites if he visits.
India should have strategic focus — choice is between a subaltern role for perpetuation of America’s global hegemony and western dominance in the international system, or a more just world order where countries can pursue own paths of development as equals with mutual respect. It is nonsense that without the US conducting itself as the world policeman, ‘anarchy’ will set in. Almost all hotspots in the post-Cold War period are traceable directly or indirectly to US recklessness.
Translated interview with Ruslan Pukhov. The website is pro-Ukraine, so maybe the interview leaves out segments that are more sanguine about Russian prospects. But generally, he paints a picture of a WW1-style stalemate where neither side has the equipment or manpower to win a decisive victory.
China withdraws promise not to send troops to Taiwan if it takes control of island
Taiwan Is Part of China - This Is an Indisputable Fact.
The Energy Transition
It became necessary to destroy the planet to save it.
“They are mining rare earth everywhere and we are no longer safe to drink water,” she said. “There is nothing to support the children. Nothing to eat.”
“Inflation Reduction Act”? More Like The Resource Curse on Meth Act.
Green energy depends on critical minerals. Who controls the supply chains?
Tornado Cash
On Monday Treasury declared Ethereum blockchain addresses associated with Tornado Cash as sanctioned entities. Interacting with the addresses is now a felony punishable by up to 20 years in prison. Predictably, the crypto and libertarian minded are aghast (see here and here). I think it is an unconstitutional prior restraint on speech. A very similar issue arose when the Federal Government tried to ban the publication of schematics to print a 3D gun—3D Printed Speech: 3D-Printer Code Under Constitutional Scrutiny.
Two years later, on May 6, 2015, DD sued the State Department to keep the Liberator blueprints online. Most interestingly, the complaint advanced a First Amendment claim, arguing that the digital blueprints—the computer code itself—constituted protected speech and that the Department’s order was an impermissible prior restraint on that speech, meaning that the government was attempting to restrict DD’s expression before it could take place—i.e., before the organization could even post its blueprints online. After three years of litigation, the case settled, so whether the code is considered protected speech remains open for debate.
But even if Treasury has to back down, it’s efforts have really kneecapped one of the foundational crypto tenets—censorship resistance. TBH, I think crypto is transitioning away from being a widely held financial asset into more of a traditional open source tech/software project.
Miscellaneous
The Sanctification of George Soros
Too bad I’m too boring to need it—This Anti-Tracking Tool Checks If You’re Being Followed.
Verbifying—AI version of Norm Macdonald’s voice reading his recollections of Bob Dylan