Toutes mes félicitations

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Cricket season

Over the road, the cricket square has been cut. Chief among the amusements of the game is there is always a record that falls in cricket. However dull the particular encounter, something will happen. 

“The highest 8th wicket stand between a right and left hander in a tea-time session”. 

“Most runs down the leg-side v India at the SCG since 1972”

Just by definition there is always a record. 22 players, 35 fielding positions, 3 sessions per day, 5 days, right handers, left handers, batters, bowlers. The sheer number of permutations is such that there will be a record of some sort if you look hard enough. 

Perhaps so it is with economic data. How often is it the “worst [x] since records began”. I’m a huge sucker for that kind of data and so there has to be some sort of filter. Maybe the data is not so bad and it is simply indicative of a positive trend of another kind. 

US Firm’s Hiring Plans then. A case in point, an alarmist chart which was billed as the “worst since records began” (in this case, they began in 2005). 

Whichever way you look at it, the numbers are materially lower every month and it goes to the previous discussions about new efficiencies. Not a lot of people are being made redundant but the need for additional workers is significantly lower. Administrative burdens in particular are being managed with AI tools. It makes sense to me, you can make your existing employees a lot more effective than they were two years ago, so they are worth keeping. Adding someone new is not only not worth it, but not needed. 

There will always be records though and there will be massive opportunities for left handed people who can score runs down the leg side.

Where are we?

I accept that this chart has some flaws in its construction. I share it only to show that the current position of the market is not dissimilar to any other post halving period. Supply pressure takes time to build. You might argue that this time around has been worse because of the Mount Gox selling or the German Government but there is always something. Recall the China mining ban, the hardfork wars of 2017 etc. 

My sense though is that supply pressure (short supply) will continue to build. The implication of the chart is that bitcoin could reach $640,000 in a couple of years. I don’t agree, but only because I think it will take a while longer. 

Jim

In Australia, the employment story is rather different. They tell us it’s booming and it happens to be true as well. 880,000 new jobs in Australia since Labour took power. It’s just that 530,000 of them are government jobs. Not that this is necessarily terrible either. An ageing population will require an increase in health care workers and social assistance but it will have to be paid for somehow. 

From a trend perspective it does not exactly smack of a robust economy. Where are the private sector jobs? Unemployment does not win elections though; spending money you don’t have very often does. 

It’s a shame because Australia is an amazing place. A concentrated effort, from a government with a plan, would make it the number one richest country in the world. It might take 10 years, but there would be no looking back once it happened. The depth of resources here is so large, it’s almost unknowable. 

That is not what happens though. The temptation to spend the bounty today and regulate tomorrow into submission is simply too high. 

Next level thinking

It’s embarrassing for me to read this tweet. I dwell on the minutiae of economic data and then read this. 

Me: Hey Elon inflation is down 0.00001%

Elon: “I’m going to Mars”

It’s more than that though. It seems the outer reaches of human achievement, once the exclusive domain of governments, are now the domain of tech entrepreneurs. Elon is going to Mars, but Google invented the AI Algorithm (and then declined to use it). Now OpenAI has a machine so powerful that they have had to hold back the release of it because the USG wants to “check it”. Zuckerberg’s LLAMA 70B is open source though, no checking there, so who knows what the reddit crowd will turn it into.

The most powerful, permissionless money on the planet is also nothing to do with any government. it runs on the payment rails of laptops around the globe. No government anywhere to be seen. 

People laugh when I say that nation states are coming to an end. It seems obvious though, the real power in the world now rests with large tech companies. Elon has more satellites orbiting earth than all governments put together. National governments have to politely ask social media companies to “control their message”. 

Just for comparison, the Australian Prime Minister also had something to say this week. I’m not being critical of this, it represents a meaningful achievement for the people involved. My point is that he operates on one level and the people that today set the global agenda operate on another. That other level appears to differ by an order of magnitude. 

He sees no conflict in announcing that he has increased costs by 15% while simultaneously “capping” revenue. You couldn’t run a business that way but perhaps it works for a country. 

I remain convinced that in 50 years we will not use ‘government money’. Our ancestors will wince, just as we do when we read about ‘bloodletting’ and slavery. 

Euro-Trash

“Toutes mes félicitations”, indeed.

However, the decision by President Macron to appoint Michael Barnier is without precedent. Recall, Macron called a shock election after the performance of some parties in the European elections. It was to his credit that he did so because it was clear the French Parliament no longer represented the views of the people.

The plan started backfiring after Nationalist parties looked like they might sweep the board. It turned out that the views of the people were “the wrong views”. To ensure it didn’t happen, in early July Macron orchestrated the withdrawal of over 200 centrist candidates across the country. It meant that the French left wing parties won and the right did not.  Et Voila!

The most legitimate candidate for the Prime Ministership became the leader of the French Left Jean-Luc Mélenchon. Why? because he won the election that's the kind of how democratic elections work. In this case though he is extremely left wing and Macron considers him a ‘danger to France’. So what though? He won. He actually won, nobody is even arguing about that point and yet somehow he is overlooked for the PM's job which is rightfully his.

Now France erupts in violence as people are once again ignored at the ballot box. 

The new Prime Minister’s Les Républicains party is only the fifth-largest bloc in the National Assembly. Less than 50 legislators (out of 577). He has no credibility and has an almost zero chance of passing any meaningful legislation. 

How then does the President of the ECB tweet her support for the new Prime Minister, who neither won the election nor has the support of the public? 

Surely, as the leader of an independent central bank, stay out of it? Surely?

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