Monthly Archives: August 2016


Scott’s article about the EpiPen pricing debacle, REVERSE VOXSPLAINING: DRUGS VS. CHAIRS, is going hugely viral having been shared thousands of times on Facebook and posted many times on Reddit. Scott argues that FDA regulation, and possibly lobbying by maker of the EpiPen, Mylan Pharmaceuticals, is preventing the production of cheaper alternatives to the EpiPen. By contrast, the production furniture such as such chairs and tables are unregulated, and that’s why IKEA chairs cost $40 instead of $400, because the furniture industry is perfectly competitive. Overall, it’s a good argument, reminiscent of one Milton Friedan would probably make if he were alive.

However, there are a couple problems with Scott’s reasoning: namely, that an EpiPen, which is an emergency device, is much more complicated and has a much smaller margin of error for functionality than household furniture, so the analogy may not be apt; second, the suffix ‘pen’ belies its complexity, because some assume it’s like a Bic pen and that if Bic pens are cheap and simple, so should Epinephrine pens. An EpiPen, more specifically, an Epinephrine autoinjector, is a fairly complicated device. It has to work with nearly 100% consistency, for a wide range of ages and body weights, and for a wide range of potential allergens. It has to inject the right about of Epinephrine every time – too much may cause death and too little may be ineffective. The auto-injecting technology must work consistently, too, and not jam-up, break, or leak. And the whole thing has to be designed in such a way that a person with no medical experience can administer it correctly. All of this requires a considerable amount of testing and engineering.

The problem is, when people die from drugs or have very adverse side-effects, patients (or their families) tend to sue, both the FDA, doctors, and drug companies. It doesn’t even have to be drugs; for example, the FDA got sued over shellfish poisoning. And here’s a lawsuit over genetically engineered salmon. And then a suit that alleges former FDA chief suppressed danger of ‘deadly’ drug for sake of profit. So here we have two extremes: either the FDA being too cautious (in the case of approving EpiPen alternatives) or being callous. Given that the spectre of litigation is always hovering, this necessitates erring on the side of caution. As a commenter notes:

Therefore the FDA tends to err on the side of not approving things. If you have a population of near-term terminal patients they’re more likely to approve stuff quickly, e.g. for late-stage cancer patients with little hope, because the headline risks to the agency are again low. But for anything where the advantage is just an issue of money or convenience, a new drug with even slightly iffy safety or efficacy relative to the state of the art is going to get slow-rolled into oblivion.

Another thing that’s amazing is how big the pen is. When I first heard about this story, I assumed the pen was something that could fit in a shirt pocket, but it’s actually much bigger:

On a related note, there’s a common misconception that the FDA is blocking experimental potential cures for deadly cancers, but this is not true; rather, the FDA is blocking the production of treatments that are completely ineffective (and in the case of terminal cancer, the bar is pretty low, with a ‘successful’ drug often costing tens of thousands of dollars and only adding a few months of additional life for the patient). Refractory cancer patients are often referred to clinical trials as a last-ditch measure, but very seldom do these trials produce successful treatments.

Mylan spent $1.5 million lobbying in a given year, but that is still nowhere near the top.

Then, as other people have pointed out, the issue is also insurance companies only covering EpiPen and not its cheaper alternative, Adrenaclick.

But also, the article went viral because the headline itself invokes curiosity: ‘What do chairs have to do with drugs?’, so people are enticed to click to find out. This is a technique used by the authors of Freakonomics, for example, in the chapters ‘What Do Schoolteachers and Sumo Wrestlers Have in Common?’ and ‘Why Drug Dealers Live With Their Moms’, where two seemingly opposite or random subjects are linked together in some way. The headline is probably the most important part of an article.

American Exceptionalism: America vs. Britain

It becomes immediately apparent to any American who has the misfortune of visiting Britain how much worse of a country it is. Compared to America, everything is miniaturized and more expensive. The same probably applies to much of Europe, as well as Australia, Canada, and New Zealand, but for this post I’m primarily going to focus on Britain. For the British, this is a permanent reality, and the data affirms that Britain, according to a wide variety of metrics, is a worse country than America – and not the ‘utopia’ that the American left makes it out to be.

First, Britain is significantly poorer than America, as measured in ppp-dollars (purchasing power parity), meaning a reduced standard of living:

Despite the outward opulence of the Royal Family and Buckingham Palace, Britain is even poorer than Mississippi, the poorest of all fifty states:

Fraser has used the average PPP for the US. But as we can see there’s different PPP adjustments for different States. If $100 will buy you $115 worth of goods in Mississippi this is the same statement as the correct PPP adjustment for Mississippi incomes, or in this case GDP, is 100:115. Or, if you prefer, Mississippi’s properly PPP adjusted GDP per capita is $40,400 or so: well above the UK’s $36,200.

The median household income for Mississippi, surveyed between 2010-2014, is $39,680. For the UK, a 2013/14 HBAI report gave median household income (2 adults) as £23,556. Converted into US dollars, that’s still only $30,500.

Compared to Americans, Brits pay much more for common household electronics:

Although the home ownership rate in Britain is slightly higher than in America, the homes are much smaller:

Electricity is more expensive: In the UK, it costs 22 cents per kilowatt hour; America is just 13 cents:

The CPI (consumer price + rent index) index for the USA is 66, vs. 78 for Britain:

The Nordic countries have among the highest costs of living…The same liberals who whine about wages in America not being high enough, yet sing the prasies of Switzerland and Norway, fail to realize that wages relative to living expenses for the Nordic countries is far worse than America. This means a lower standard of living because your purchasing power is so poor.

Overall, there is more crime in Britain than in America:

This maybe attributable to shorter sentences and a lower incarceration rate. The average burglary sentence in the United States is 16 months, compared to 5 months in Canada and 7 months in England. America also has its three-strikes laws.

Significantly worse stock market performance (FTSE 100 vs. S&P 500):

And Germany has those awful toilets.

In Britain (and much of Europe and the Middle East) the plumbing is weak, prone to failure, and the toilets have a narrow and shallow bowl (instead of a much larger volume of water like toilets in America), often resulting in shit frequently sticking the sides of the bowl. American toilets, especially modern ones you find in office buildings and major chains, have voluminous bowls and powerful jets, and thus nothing stays behind after flushing. well as much worse survival rates for all major cancers:

America tops the list, wit the highest survival rates of all cancers.

Intellectualism, Individualism, and Wealth, Part 4 (philosophy of millennials)

Errata: yesterday’s article, Alt-Right: Classifications and Significance, described neocons as apologetically anti-populist, when it should have been unapologetically anti-populist.

Continuing on the series on Intellectualism, Individualism, and Wealth…

The Millennial Mindset, Part 2: Philosophy and Wealth describes the underlying philosophy of most millennials as rationalist and valuing of authenticity. But another label could be deontological. Millennials, particularly smart and rational ones, seem to have an ethical system predicated on rules and promoting maximum ‘goodness’, even if ‘goodness’ may be hard to quantify or may be attained by unconventional means. The Kantian categorical imperative is relevant:

Kant then argues that the consequences of an act of willing cannot be used to determine that the person has a good will; good consequences could arise by accident from an action that was motivated by a desire to cause harm to an innocent person, and bad consequences could arise from an action that was well-motivated. Instead, he claims, a person has a good will when he ‘acts out of respect for the moral law’.[12] People ‘act out of respect for the moral law’ when they act in some way because they have a duty to do so. So, the only thing that is truly good in itself is a good will, and a good will is only good when the willer chooses to do something because it is that person’s duty, i.e. out of “respect” for the law. He defines respect as “the concept of a worth which thwarts my self-love.”[13]

As evidence of the importance of deontology, a Reddit ‘Life Pro Tips’ post which meticulously gives a list of rules for disposing of the possessions of the deceased, went viral and got a lot up-votes and comments. This is in contrast to boomers, in the 60′s, who eschewed rules and promoted ‘rebellion’ (even though they were conformist in their need to rebel). That’s probably why millennials don’t go to clubs, preferring instead to stay at home and be introspective.

This is also related to consequentialism and utilitarianism, discussed numerous times on this blog and at the end of part 3. The philosophy can also be described as quasi-authoritarian and somewhat bureaucratic, but with contradictions such as promoting individualism and authenticity. To reconcile this, individualism and authenticity is championed provided it’s within the sphere of one’s biological capabilities (also related to the meritocracy stratified by IQ), and to try to exit the sphere puts one at risk of becoming a poseur, which is among the worst things to be in a culture and society that values authenticity more than ever.

But we’re also seeing the rise of ‘advice culture’ – a subset of ‘intellectualism culture’ (as categorized here, and will be described in greater detail in upcoming installments of this series). Like the story on ‘coping with being average’, as mentioned at the end of part 2, articles that offer advice on navigating today’s difficult, hyper-meritocratic economy and culture, frequently go viral. Boomers, like the iconoclasts of the Protestant Reformation, wanted to tear down the system; millennials, on the other hand, seek to adapt, either by emulating the rich and successful or by finding ways of coping with mediocrity. Even in the 90′s, for gen-x, it as about The Matrix cyber punk rebellion and escapism though alt music, MTV, and sitcoms. But millennials want to stay in the present, to confront reality head-on, and seek complications through philosophy and inquiry (intellectualism) into things like economics and social dynamics – not the simplicity of blissful ignorance. Writers like David Foster Wallace and Hunter S. Thomson (who committed suicide within three years of each other), exude authenticity and have seen their legacies explode in recent years, becoming cultural icons. Wallace’s This is Water, a commencement speech he wrote in 2005, and Hunter’s Finding Your Purpose, a letter addressed to a fan, have been shared innumerate times and cover themes about coping with the idiosyncrasies and travails of modern society without losing one’s sanity, as well as existentialism and finding meaning in life.

Alt-Right: Classifications and Significance

For some reason the definition of the ‘alt right’ refuses to be resolved to anyone’s full satisfaction.

My ‘definition’ is that the ‘alt right’ is a subset of ‘right’ that rejects the ‘mainstream’, which is a kinda circular definition, but taken literally that’s what ‘alternative’ means. The ‘alt right’ can include rationalists and pacifists (rejection of activism and politics), which includes NRx. Then there is also the ‘larpy right’ (pro-activism, political involvement) which may include Richard Spencer and Raddix Journal. Most of ‘alt right’, especially pacifists, are unified in rejection of ‘low-information’ discourse – such as mainstream taking points and sensationalism that one would find on major networks like Fox News or CNN – preferring more nuanced discourse that puts greater precedence on empirical evidence than ‘tribal loyally’ or emotion.

The hierarchy could be like this:

primary: ‘right-wing’

secondary: ‘mainstream right’ ‘alt right’

tertiary: ‘activist alt-right’ ‘pacifist alt-right’ ‘futurist-right’ etc.

Or in the case of this blog:

Neoconservatism meets HBD, with elements of anarcho capitalism, reaction, futurism, and rationalism.

The quadrant below helps illustrate the differences between these subsets:

The ‘GOP intelligentsia’, which mostly consists of neocons, seems miscatergorized and belongs on the upper-plane, equidistant from ‘Nick Land’ and ‘The Economist’. Neocons tend to embrace technology and capitalism and are also unapologetically anti-populist. In many ways, neoconservatives and pacifist variants of the alt-right have a lot in common, both rejecting egalitarianism and populism.

Some define the ‘alt right’ as inclusive of only activist-variants of the ‘right’, and that pacifists, like NRx, belong to a separate categorization, separate from the ‘alt right’. But if the bottom-right of the quadrant is the ‘alt right’, what should the upper-right quadrant be called?

Most of the disagreement between these different subsets of the ‘right’, particularity between the ‘anti-cuck right’ and the ‘mainstream right’, seem to be over small differences. From Ingroup/Outgroup dynamics:

For NRx, the ‘outgroup’ may not be liberals, which is the most obvious choice given than NRx is a right-wing ideology/movement/whatever. Instead, perhaps, it’s ‘low-information’ and ‘democracy’, both from the ‘right’ and ‘left’, as one type of ‘outgroup’. As in the case of utilitarianism, it’s possible to be on the ‘left’ and still reject direct forms of democracy.

As very recent example of ingroup/outgroup dynamics over small differences, the post-2015 ‘cuckservative’ movement, which pitted ‘traditional conservatives’ against ‘establishment conservatives’, with insults hurled between both sides on Twitter and blogs, despite both sides being ‘conservatives’.

Thus, possibly in every group, there may be two ‘outgroups’: one involving small differences (establishment conservatives vs. alt right, neoliberals vs. welfare liberals) and an ‘outgroup’ of broader differences (conservatives vs. liberals).

That’s why I have always found the split in the right between the ‘alts’ vs. the ‘establishment/mainstream’ to be kinda frivolous. They agree one everything except for immigration and Trump. It’s not like the mainstream right is for open borders. Rather they support ‘some’ immigration under controlled conditions. I’ve never heard a mainstream conservative like Hannity or Limbaugh come out and endorse open borders. Sometimes arguments are so heated because the differences are so small. The ‘anti-cucks’ believe that the ‘cucks’ are too moderate on some issues, and there is perhaps some truth to this, but we’re talking about tiny differences when they otherwise agree on 95% of stuff. Ben Shapiro, for example, is a frequent target by the ‘anti-cucks’ on Twitter, but here are a list of his books:

Brainwashed: How Universities Indoctrinate America’s Youth (ISBN 0-78526148-6). WND Books: 2004.
Porn Generation: How Social Liberalism Is Corrupting Our Future (ISBN 0-89526016-6). Regnery: 2005.
Project President: Bad Hair and Botox on the Road to the White House (ISBN 1-59555100-X). Thomas Nelson: 2008.
Primetime Propaganda: The True Hollywood Story of How the Left Took Over Your TV (ISBN 0-06209210-3). Harper Collins: 2011.
Bullies: How the Left’s Culture of Fear and Intimidation Silences America (ISBN 1-47671001-5). Threshold Editions: 2013.
The People vs. Barack Obama: The Criminal Case Against the Obama Administration (ISBN 1-47676513-8). Threshold Editions: 2014.

Just going by the titles, how can anyone on the ‘anti-cuck right’ find disagreement here. Isn’t there mutual agreement that universities are indoctrinating America’s youth with leftism. Or that Obama is inept. Or how the ‘left’ has taken over much of popular culture. The disagreement, again, has to do with two issues specifically: immigration and Trump, but otherwise they agree. Yet over the past year and a half, the two sides have been hurling invectives at each other on twitter and blogs over these small differences.

But there is probably more to is than that. The rejection of the ‘mainstream’ is in repudiation of neocon economic policies, as well as a general suspicion that that ‘establishment’ is not acting in the best interests of average, middle-class Americans – but rather the interests of either the really poor who may not even be citizens (illegals) or the interests of elites (business interests, Wall St., etc.) that may have no loyalty or cultural anchoring to America (as Ross Douthat calls ‘faux cosmopolitanism’). Meanwhile, the ‘bedrock’ of America – its middle class and even ‘working poor’ – is being ignored. Since the early 80′s, beginning all the way with Reagan, GOP economic policy has answered to a Frankenstein’s monster-like amalgamation of think tanks – Cato, AEI, and CFR – which tend to promote globalist policy such as free trade, automation, outsourcing, deregulation, and open borders. As Thomas Frank mentions in What’s the Matter with Kansas, to win voters the GOP uses culture war issues but tends to gloss-over the economic ones, using vague language and buzzwords (as all politicians do) such as ‘job creation’ and ‘competitiveness’. Whether or not globalist policy works (creates growth and jobs in the long-run despite the short-term inconvenience of job loss) is subject to some debate, but I imagine that if such policy were presented prima facie (and not obfuscated with buzzwords), many voters would likely not support it, and I think that’s what’s happening with the rise of Trump and the ‘at right’. Trump is arguably the first GOP nominee in over 30 years that is chartering his own economic policy, without the influence of think thanks, wonks, and pundits.

Wealth, Intellectualism, and Individualism, Part 3

Continuing from part 2 about finance:

Trillions of dollars of wealth has been created since the market bottom of March 2009, and especially since 2013, some examples being:

The S&P 500 bottomed at 666 in March 2009. As of 8/25/2016 it’s now at 2170 for a gain of 226%, which does not include the generous dividends. Dividends included, it’s over 250%. At seven years and counting, the bull market is also the second-longest ever, and I predict it has much further to go.

In 2008 and 2009, leftist pundits fondly envisaged a post-America era, where America and its economy would no longer dominate, with perhaps Russia, Germany, Turkey, or Brazil as the new ‘status quo’. Pop-psychology purveyors like Gladwell, Ariely, Taleb, and Daniel Kahneman, rose to fame, whose books promoted ‘leveling‘, in repudiation to the hubris and elitism as embodied by Wall St. and the Bush administration, which so spectacularly, to the delight of the left, imploded in 2008. Then, much to the dismay of the left, America came roaring back as Europe fell into perpetual recession and the emerging economies were broadsided by corruption, stagnation, falling commodity prices, and high inflation. Due to the flight to safety and American exceptionalism, treasury yields are at record low, the dollar is at record highs, and the S&P 500 has posted the highest real gains since 2009 of any major stock index in the world.

From The New Gilded Age; The Post-2008 Economy, Part 4:

Some on the left say America is in decline or losing its influence. Not true, we’re pulling ahead of the rest of the world. Silicon Valley is not only the center of the technology universe, but America’s intellectual institutions are the envy of foreigners and are inundated with applications from the best and the brightest from all over the world. So while the left whines about America having too much inequality and not enough jobs, rich and smart foreigners – whether they are going to Caltech or MIT, working at Google, or buying up expensive real estate – can’t get enough of America.

In 2009, Facebook was only worth $9 billion; it’s now worth over $250 billion. Tesla went from being a prototype to a dominant player in the luxury car market and has a market cap of over $30 billion. Google, Amazon, Apple, and Microsoft added a combined $1 trillion in market capitalization since the 2009 bottom – about the size of the economy of Spain. Web 2.0 was in its infancy; now Snapchat, Uber, Dropbox, and Twitter are worth combined $150-200 billion.

Home prices keep going up, and prices in the the Bay Area have almost doubled since 2011, and I predict prices will keep rising due to huge demand from wealthy foreigners, private equity, and newly-minted tech millionaires, as well as due to limited supply. Thanks to Stanford University, biotech, and web 2.0, the Bay Area is the capitalism and intellectualism capital of the world right now, overtaking Manhattan. Sand Hill Road of Menlo Park, California, is the most expensive street in the world.

Teens, millennials are making thousands of dollars month with social media on sites like Tumblr, Vine, and Instagram; others are making a fortune trading stocks.

Given all this wealth being created, and much more to go, is it any wonder millennials want a piece of it instead of being poor and bitter like a typical ‘black lives matter’ supporter, protesting imagined racism and injustice on deaf ears. Or a ‘social justice warrior’, who sees sexism and oppression everywhere, and is dependent on welfare and Patreon donations because ‘social justice’ is not a skill employers are typically looking for.

That’s why there is so much interest in wealth creation, particularly on high-IQ communities like Hacker News, Reddit, and 4chan, with posts about day trading, ‘YOLO’ (/r/WallStBets), stock market, real estate,and finance getting so many ‘up-votes’ and discussion, and why we aspire to be like Musk and Shkreli, who became wealthy through intellect, hard work, and free market capitalism, not by complaining about ‘wealth inequality being too high’ or ‘the fed being a conspiracy’. Despite the liberal media’s narrative that all millennials are broke and in debt, it’s not too uncommon on Reddit communities like /r/investing to find stories of 20 or 30-somethings, often in technology or the rental property market, who have hundreds of thousands of dollars to invest.

And while the baby boomers had it easy (an abundance of good-paying jobs for all skill levels, generous and early retirements, social security payouts, no mountains of student loan debt), for millennials times are more trying, which could explain why not only so many millennials may have a grudge against the blissful boomers, but also why millennials – possibly the most educated generation ever – are so obsessed with self-sufficiency, intellect, and self-determination – so much so that some will voluntarily choose unemployment than having to answer to a less-intelligent, uneducated superior.

(image credit: Worthless College Degree Book Trailer)

Difficult economic times also call for changing expectations of becoming an ‘adult’, with ‘initiation’ into adulthood being delayed. From, The five different paths that people take before they feel like official adults:

A typical pathway was laid out in the early and mid-20th century: exit school, get a job, move out of the parental home, get married, and have children.

While this might be considered the “normal” pathway even today, these transitions do not occur in such a neat and predictable order for many contemporary young people. Furthermore, the time to complete them has become longer.

It is commonplace today for young people to return to school after beginning work, move back in with parents (or never leave), have children prior to marriage, or work in less secure part-time jobs.

That pretty much sums it up about millennials: Overeducated, overqualified for most jobs, and lots of introspection and time spent in mindfulness. Not as much interest in family formation or marriage. I would also add: posting online on sites like Tumblr, debating crime and gun statistics, a keen interest in quantum physics and other obscure complicated stuff, and trying to ‘get into’ the stock market and finance despite being cynical about ‘corporate America’ and not having any particular use for the money (because they tend to also be minimalists).

As explained in the post Adulting, the idiosyncrasies of millennials may be a way to adapt to a culture and economy that rewards individualism, in addition to a more competitive, difficult economic environment:

Boomers had four decades of post-WW2 prosperity serendipitously dropped on their lap, which they frittered with excess consumerism, with millennials fighting for the scraps of what is left in our increasingly competitive, winner-take-all economy. Boomers never had to compete with computers for jobs, had to contend with an economy so hellbent on productivity and efficiency, with a culture and economy that rewards quantifiable results and individualism over family and community, more than ever. The post-2008 economy is like an ‘Ayn Rand world’ in overdrive. Being an ‘adult’ means trying to emulate an economic and social ideal that no longer exists, as well as being a slave to political correctness or a corporate machine, and it’s understandable why millennials have turned sour of the concept, instead embracing the ‘Randian’ ideal of individualism over obsoleted collectivist ideals of family and community, because it’s the best way to adapt.

Rather than waste precious years in a dead-end job, millennials would rather self-actualize by trading, investing, posting videos and vines online, learning to code and other high-paying skills, occasionally making huge fortunes in the process. On Reddit here is an example of someone who a couple months ago turned $18k into $135k in two weeks. Such stories are not too uncommon. And there is there the article earlier about ‘Tumblr teens’ making more money than their parents.

Related to the synthesis of wealth, intellectualism, and individualism, millennials want to be wealthy and they care a lot about stocks and personal finance, but they eschew ostentatious materialism, preferring wealth as measured by a bank statement or a trading account, not a big home or a sports car that depreciates as quickly as it accelerates. Finance has become more important than family. Millennials, in channeling, either subconsciously or intentionally, the matriarch of individualism and self-interest, Ayn Rand, aspire to be like Musk or Zuckerberg, or Warren Buffett – individuals who became wealthy through intellectualism and individualism, not swinging a stick for a ‘team’ or parroting lines to a camera. As I will explain later, intellect, especially in STEM – which includes finance, philosophy, and economics – gives you ‘social capital’ (even if you’re not wealthy) more-so than just being rich and dull. Few take the opinions of actors and athletes on important matters seriously, but they (the media) constantly defer to scientists and economists on important matters. Millennials understand this distinction.

To millennials, wealth is is not measured by how many ‘toys’ you have. Rather, it’s about wealth in a bank account, as well as ‘cognitive wealth’ and ‘social capital’.

As mentioned earlier, personal responsibility ‘the self > the collective’ is a major theme of post-2008 society, with individuals (whether through low IQ, bad choices, majoring in a low-ROI subject instead of STEM, being dumb, etc.), not the marketplace or society, to blame for failure. People who blame the the government, Wall St., bankers, and the fed, for losing money and being failures at life get no sympathy online. Blame yourself. The market is not rigged; it’s actually very efficient and rational. Instead, buy index funds. Stop being a sore loser who whines about manipulation and bubbles as others are getting wealthy, or maybe you’re not smart enough to make money. In much the same way rationalist millennials reject deities and other apparitions, they rightfully reject fed ‘conspiracies’, wishful thinking, ‘doom and gloom’ (eschatology), allegations of the stock market being a ‘fraud and a bubble’, and other delusions. They also tend to be pragmatic, consequentialist, and utilitarian, arguing that policy, even if it’s unpopular (such as bank bailouts, tax cuts for the rich, or eugenics), that creates the most wealth or ‘good’ indirectly is desirable over policy that doesn’t (excess welfare spending, disability, etc.) but otherwise ‘feels good’ (naturalistic fallacy).

Did Hillary Commit Insider Trading?

A story about alleged insider trading by an informed trader who bought put options on IBB (a biotech ETF) before Hillary made a tweet about ‘Epi Pen’ prices, went viral:

It was also posted on r/the_donald and r/conspiracy

Here is the tweet in question:

Posted at 11:02 PST.

The options in question are the IBB August 26th 190 puts traded on August 24th, 2016, particularly the 100 puts that were traded. Here is a chart of all the put trades and times for the 24th, for the 190 strike expiring on the 26th:

The 100 contracts, as evidenced by the huge bar, were traded at 8:21 PST. Although this trade was placed well before Hillary’s tweet, the evidence is less damning when you consider that many order were placed before the tweet, not just a single one. It shows over 300 put options traded before the tweet, with some orders (except for the 100 contract outlier) as high as 40 contracts. Had it been a single order placed just before the tweet, yes, it would be suspicious, but seems like many of these puts changed hands by multiple parties.

Also, the trade was made hours before the tweet. If an insider trader wanted to maximize their profits from bad news and minimize uncertainty, they would make the trade much closer to the time of headline.

Here is the chart for IBB on August 24th:

As shown above, IBB began to fall precipitously an hour before tweet, falling from 298 to 294. It fell from 294, after the tweet was made, and ended the day at 286.

This suggests that there were other factors involved in IBBs’s decline besides the tweet. The tweet itself was no the cause of the decline, which was underway an hour before the tweet was made. The decline of IBB also mirrors the S&P 500 for August 24th, which also began to fall rapidly around the same time IBB did. This suggests that someone may have bought those 100 IBB puts not due to informed trading but perhaps because the price momentum of IBB was negative in the hours leading up to the tweet. Also, people buy puts for many reasons: sometimes it’s to hedge or as part of bigger trade.

So yeah I doubt there was insider trading involved. Probably just a coincidence.

American Exceptionalism

This post succinctly summarizes why the US stock market ha done so well compared to the rest of the world:

If the world is circling the drain, America is furthest from the drain, on the most outer ripple. Wherever the market falls more than a couple percent, the huge funds step in and keep buying the dips, as developed economies are awash with liquidity and US stock market and treasuries are still the best game in town in a world of uncertainty. The S&P 500 has gained 5% since Brexit:

Public and private pension funds and insurance companies are among the biggest holders of stocks and treasury bonds. That’s a huge part of the economy that is helping keep interest rates low and stock prices high.

Those who heeded the doom an gloom headlines about Brexit and sold their stocks at the bottom (the worst possible time), would have missed out on this huge rally.

A winning investment strategy since 2009 has been to short all markets excluding US, while going long the S&P 500 or the Nasdaq 100:

As shown above, foreign markets have markedly lagged the S&P 500 since 2011. The S&p 500 (blue) is up 85% since 2012 (and this does not include the generous 2% annual dividends). China (pink) is flat. Brazil (green) is down 48%. Turkey (purple) is down 19%.

This agrees with a thesis of this blog, which is that America is still exceptional (or at least compared to the rest of the world).

As I explain in Slow Economic Growth Not a Big Deal, America is leading the world in terms of intellectual output and inflation-adjusted GDP growth. There is a lot of evidence that not only is America not in decline, it’s running laps around the rest of the world.

America still best place to invest. Emerging markets, Europe, and Japan have too many problems, either too much volatility, slow growth, high inflation, corruption, or too much regulation, which hurts capitalism. Emerging markets are dependent on capital inflows in order to keep growing, resulting in lots of debt at very high yields. America also has a lot of debt. but the key distinction is that it can name its own price, resulting in very low yields on its debt. Foreign countries also suffer from cognitive outflow: all their best and bright (understandably) moving to America, which has much more opportunity for the best and the brightest from all over the world. Rich foreigners and their smart kids are coming to America, buying up real estate in the most expensive of locations, attending America’s most prestigious schools, and then working at some of the most lucrative, fastest-growing companies like Snapchat, Facebook, Palantir, Airbnb, Pinterest, and Google, and making millions in the process (from the real estate, stock options, and high wages). Only in America is that possible, not in Denmark, Japan, or Brazil.

America occupies 63 spots of the top 200 institutions of higher education in the world, followed by UK with only 34:

America also has 6 of the top 10 academic institutions:

Unfortunately, for better or worse, a lot of Americans also being left out, sitting on the sidelines as others make tons of money. Although wealth inequality has always existed, perhaps to add insult to injury, it seems like policy makers care more about appeasing both extremes (either the really poor immigrants or the cognitive and financial elite) than average Americans, who are pushed to periphery in terms of policy. This could explain the appeal of Trump, as part of a growing backlash against policy makers who seem too deferential to either extremes of the wealth spectrum and ignoring ‘average people’ in the middle.

Mason, in his post 10 THINGS MOST AMERICANS DON’T KNOW ABOUT AMERICA sums this up pretty well:

If you’re extremely talented or intelligent, the US is probably the best place in the world to live. The system is stacked heavily to allow people of talent and advantage to rise to the top quickly.

The problem with the US is that everyone thinks they are of talent and advantage. As John Steinbeck famously said, the problem with poor Americans is that “they don’t believe they’re poor, but rather temporarily embarrassed millionaires.” It’s this culture of self-delusion that allows America to continue to innovate and churn out new industry more than anyone else in the world. But this shared delusion also unfortunately keeps perpetuating large social inequalities and the quality of life for the average citizen lower than most other developed countries. It’s the price we pay to maintain our growth and economic dominance.

America may bee the land of opportunity for the best and brightest, but for far too many such exceptionalism is out of reach. One of the best, easiest ways for average Americans to take advantage of America’s economic dominance is to buy and hold the S&P 500.

Wealth, Intellectualism, and Individualism, Part 2 (the obsession with finance)

The second pillar is wealth. Francisco d’Anconia’s infamous speech from Atlas Shrugged is relevant:

“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?

It seems like in recent years there has been a massive surge, especially online, in finance-related topics and discussion. Everyone is looking for ways to get wealthy, whether through stocks, trading, options, or making money online. But also, there are often huge, heated discussions about wealth management, financial planing, indexing, and the structure of the market itself, such as whether the stock market is rigged, manipulated, overvalued, or efficient. Money may not be the roof of all evil, but it is certainly the root of a lot of online discussions. Same for the surge in discussions about job loss and automation, post scarcity, basic income, and wealth equality, as part of the post-2008 ‘great debate‘ online about economics.

The wealth ‘boom’ and obsession with wealth didn’t really begin in earnest until 2013. Pre-2013 there was the OWS movement, and the the memory of the financial crisis was still fresh in the minds of millions of millennials, with much resentment towards Wall St. and bankers, as capitalism had ‘failed’ them. In addition, Obama had been reelected, and millennial voters were still optimistic that the ‘hope and change’ he promised in his first term could still be realized. Then, almost inexplicably, in 2013, along with the post-2013 SJW backlash, gamergate, and then, in 2015, with the Trump ‘surge’, there was a 180-degree change in mindset among millennials, from resisting capitalism and wealth creation to embracing it more than ever. With the S&P 500 up up 30% in 2013 alone (the greatest one-year gain since 1953), OWS a failure, and Obama’s ‘hope and change’ more of a myth than reality, millions of millennials suddenly realized that it’s better, more productive to emulate the rich and successful than resent them. Related to ‘individualism’ (in part 1), the cutthroat nature of the economy also played a role in this transition, as millennials realized that the competitive economic environment necessitated self-sufficiency for a future when there would be a smaller social safety net, instead of hoping for the government to bail them out. From: The Millennial Mindset – Individualism Over The Collective:

Even ‘selfie’ culture is an example of the ‘self’ being more important than the ‘collective’. Same for the rise of MGTOW and ‘mens’s rights’, both which emphasize individualism against politically correct social norms. Millennials understand that the economy is and will continue to become more competitive and that you cannot rely on the ‘collective’ – be it the government, friends, or family – to pull you up – you have to forge your own destiny, your own wealth, and your own success. Or in the words of James Altucher, ‘choose yourself’. The economy is forcing everyone to become ‘Objectivists‘.

And from What isn’t being taught in schools that should be?:

But also, millennials see their baby boomers parents (as well as the headlines since 2008 of people losing everything, of being unemployed) frittering cash on useless purchases, and other bad financial decisions. Millennials, who are surprisingly savvy about personal finance, value self-sufficiency and financial independence, but schools typically don’t teach personal finance – things as debt, mortgages vs. renting, taxes, budgeting, credit scores, index funds vs. individual stocks vs. bonds, credit cards, or even how to balance a checkbook. That’s where the dissatisfaction with today’s educational system comes from – that fact schools are not teaching these pertinent, actionable skills.

Personal finance, including budgeting, is very important to millennials, who value financial independence and self-sufficiency. Although many millennials are living at home with their parents longer, millennials value ‘financial independence’ over ‘location independence’ and are using the saved money to become self-sufficient, such as by buying a home or investing in the stock market, instead of pissing away money every month to the landlord. When they finally ‘leave the nest’, they will have a lot of money saved up. This also explains why millennials also like STEM so much: not only is it intellectually demanding (intellectualism), but it pays the most too:

To give an example of how finance is so important to millennials, a thread on Reddit about the simulated buy and hold returns of the S&P 500 over many intervals, went massively viral getting thousands of up-votes, hundreds comments, and two gilding of ‘Reddit Gold’ for the thread creator. Everyone wants to get richer.

A question on Quora, What are good ways to prepare my kids to become billionaires?, got over a hundred replies, with some replies getting hundreds of up-votes, signifying considerable interest in wealth creation.

As another example of the importance of wealth creation, a post on Hacker News about day trading also went hugely viral and generated hundreds of posts detailing individual experiences day trading, with some posts containing very detailed statistical analysis of day trading successes vs. failures. This ties into intellectualism, because success at day trading is an intellectual endeavor, with smarter people making more money than the less intelligent who trade and lose money, and with the stock market making new highs almost every week, there is an increased interest in investing but also day trading, as a way to make money quickly. Making thousands of dollars as a doctor or a lawyer? Snooze. Trading stocks? Hundred of replies and thousands of page views. The reason, again, has to do with intellectualism but also individualism, because in today’s difficult economy, where jobs are are being automated-away and inflation-adjusted wages are flat, necessitates that people find ways to generate income and become self-sufficient without being dependent on an employer.

Millennials are facing a future where social security may not exist, with lots of student loan debt that may never be paid off, on top a sucky job market that is not producing enough good-paying jobs, all the while inflation-adjusted wages are stagnant across many jobs and industries. Day trading is seen a one form of escape from employer bondage, with the added appeal of being intellectual and STEM-like (analyzing data, price patterns, charts, etc.), the latter is why it is so appealing to millennials and other smart people, who see the stock market as a form of ‘science’ that can be analyzed rigorously, like astrophysics. Professions like being a doctor or a lawyer seem to have lost their luster and have too much regulation and student loan debt involved, whereas day trading and finance is seen as a short-cut to wealth for those who are smart enough. Day trading also appeals to the Randian desire to become self-made and self-sufficient, to be distinguished and rewarded financially for one’s merits, and to ‘outwit’ the less-intelligent masses who also trade but fail. In fact, there is a character in Atlas Shrugged who is a genius and can predict the stock market.

But at the same time, an article about ‘being average‘ also went viral. This ties into post-2008 ‘authenticity culture’, of how it’s better to be authentically ‘true to yourself’, even if it means being average, than being deluded and afflicted by Dunning Kruger. Biological determinism again rears its head, with genes limiting the potential of people who aspire to more than their biology will allow. This is related to ‘share narratives’, as millions of people are seeking answers to existential questions like, ‘Can someone who is only average find meaning in life in an economy and culture that seems to rewards individual success and talent, and how so?’ Not everyone can be a day trading genius, a web 2.0 billionaire, or a top physicist or mathematician, so learning or coping with being ‘average’ is a useful skill.

Reddit communities /r/investing, /r/personalfinance, and /r/wallstbets have seen immense growth in the past few years, especially the latter, which caters to young day traders and option traders, many of whom consistently make a lot of money trading. It’s not too uncommon in these communities too see heated, highly technical debates about market efficiency, capital asset pricing models, commission structures, option pricing and other complicated topics, combining wealth and intellectualism. Unlike earlier decades, it’s not only finance professors and old economists who have an interest or knowledge in such topics – but now it’s every 20 and 30-something who is an expert on finance and is actively participating in these debates.

It’s just weird but also understandable in light of recent economic and cultural changes how people went from, in 2011 with OWS, protesting capitalism to now, in 2016, to not being able to get enough of it. A complete 180-degree change in mindset.

To be continued…

Heuristics for the Post-2008 World, Part 1

This advice given this in this article captures the ethos of post-2008 era – an era in which IQ, self-determination, intellectual expertise and knowledge are more important than ever, coinciding with the post-2008 decline/obsolescence of collectivism and liberalism, in general. Commentary is below.

1. Ignore 1-star and 5-star reviews of books, hotels and products. The 3-star reviews will answer all your questions.

This ties in with the post-2008 rise of expertism. The smartest reviewers tend to give more nuanced reviews, although 1-star reviews can still reflect a genuine criticism of a book.

2. When you’re a host, use that experience to learn how to be a better guest, and vice-versa.

3. If you want to be fit, become someone who doesn’t skip or reschedule workouts. Skipping workouts is always the beginning of the end.

As part of the post-2008 culture of self-determination, Red Pill culture and individualism, million of men are hitting the gym to lift heavy weights, posting pictures of it on Instagram.

This also explains why Trump is so popular, and how he bested more experienced, smarter candidates like Cruz. After an eight-year hiatus, voters want masculinity to return to the Oval Office, and Trump, unlike Obama who is perceived as a weak push-over, will command respect and authority among foreign leaders, even if they don’t agree with Trump policy-wise. This will give a Trump presidency increased negotiating power with regard to trade and foreign relations, and may even augur well for world peace because Trump will be perceived as more inclined to fight back if America’s interests are threatened. Even though Trump has made possibly disparaging comments about Mexico and China, the leaders of those countries, where masculinity is culturally considered more important than in America or Europe, can still respect Trump’s command of authority, whereas they see Obama, and rightfully so, as weak, effeminate, and malleable. The Saudis, for example, may not agree with Trump but they respect him nonetheless, much in the same way a cadet respects or is subordinate to his drill instructor. The same for George W. Bush, who forged friendships with the Saudis, despite obvious cultural and ethnic differences, because they both respected each other’s power and masculinity. The Saudis were also close with Reagan and George H. W. Bush, but they snubbed Obama and Clinton. The same for the Chinese…they respect Trump, but pretended to respect Obama. Just because foreign dignitaries seem to ‘like’ Obama doesn’t mean they actually respect him. Foreign leaders know they can walk all over Obama, but not Trump.

4. Learn keyboard shortcuts. If you don’t know what CTRL + Z does, your life is definitely harder than it has to be.

People getting smarter and more productive. But also the need or pressure – either self-inflicted or peer – to self-improve in order to keep up, which is a common theme in our competitive, results-orientated post-2008 era.

5. Become a stranger’s secret ally, even for a few minutes. Your perception of strangers in general will change.

6. Get over the myth that philosophy is boring — it has a history of changing lives. It’s only as boring as the person talking about it.

It’s like we’re on the same wavelength. I’m attuned to the new era. Learnedness in philosophy is useful because it signals above average critical thinking skills, which is helpful in an increasingly technological economy. Philosophy, because it requires the comprehension and synthesis of abstruse and arcane texts, requires an above-average IQ and hence it ranks high in the hierarchy of majors, garnering respect for people who major in it – especially in the post-2008 era, where intelligence is more important and revered than ever.

7. If you’re about to put down a boring a non-fiction book, skim the rest of it before you move on. Read the bits that still appeal to you.

Skim the book at B&N.

8. Ask yourself if you’ve become a relationship freeloader. Initiate the plans about half the time.

America has an entitlement spending problem because it’s burdened by a growing parasitic class, as well as surging healthcare spending for things such as end-of-life care and free emergency room care for the uninsured.

9. Notice how much you talk in your head, and experiment with listening to your surroundings instead. You can’t do both at the same time.

It would seem like INTP & INTJ people, who are introspective and independent, are wired for success in post-2008 economy, while social skills and extroversion are becoming less important and respected. As part of the post-2008 rise of the expert and nerd culture, being a socially awkward geek, as optimized by Raymond Babbitt in Rain Main and John Nash in A Beautiful Mind, exudes authenticity and competence, while being too chatty and outgoing signals possible incompetence and superficiality.

10. Reach out to people you know are shy. It’s hard for them to get involved in social things without somebody making a point of including them.

Same as #9

11. Learn the difference between something that makes you feel bad, and something that’s wrong. A thing can feel bad and be right, and it can feel good and be wrong.

TARP immediately comes to mind as something that made a lot of people mad but was the right thing to do, same for QE and other unpopular but economically auspicious programs. Democracy and the ‘will of the people’ should cede to the best policy as determined by experts. Sometimes the elite are wrong on cultural issues, but they are often right on economic issues and defense.

12. If you need to stop for any reason in a public place, move off to the side first.

If you must be an asshole, level it upon those who deserve it such as the parasitic class. Otherwise try to be courteous to a fault , exhibiting supranatural situational awareness even if social skills are not important. If you are an eccentric and or eminent mathematician who is too busy trying to solve the mysteries of the universe than to be bothered with the petty norms of social conduct, you may get a pass on this rule, in order to be logically consistent with #9.

13. Before you share an interesting “fact” on Facebook, take thirty seconds to Google it first, to see if you’re spreading made-up bullshit.

As part of the post-2008 rise of expertism, ignorance and being a poser (Dunning–Kruger effect) more than ever, is not tolerated, especially by the smartest generation. They, the smarties, have very little patience for your unfounded assumptions, superstitions, protestations and beliefs, deferring to the experts on the matters – but still skeptical of any form of zealotry and proselytization, nonetheless.

Most of news is just sensationalism anyway and can be safely ignored.

14. Clean things up right away, unless your messes tend to improve with age.

The post-2008 rise of self-actualization, self-determination (within the limitations imposed by biology) and individualism against the leftist forces of collectivism, political correctness, and egalitarianism.

To be continued…

‘Shared Narratives’ is not bi-partisanship

Over the past month or so, I’ve discussed ‘shared narratives’ – points of common agreement among smart people, that somewhat unexpectedly bring them together.

Is this the same as bi-partisanship? No. The far-right and the far-left (assuming the political spectrum is linear) are opposite to each other on many issues, but an example of a shared narrative is the rejection of ‘low information’ discourse.

Although it’s commonly agreed that ‘terrorism is bad’ or ‘the death of family members is bad’, these are more like truisms than ‘shared narratives’. They are so banal that they they cannot be used to forge any long-standing unity. Typically after a tragedy, such as 911, it’s not uncommon for both sides of the political aisle set aside their differences out of solidarity, but after a few weeks things typically return to how they were. On the other hand, shared narratives are long-standing.