About Those Bonds

With the Fed making its last announcement of 2017 tomorrow (and Yellen making her last press conference as a Fed member), it should be an interesting Wednesday. I thought I’d point out that bonds, by way of TLT, might be in the throes of a fairly large head and shoulders pattern. What’s required here is […]
Slope of Hope

PBS propaganda series about Vietnam

“Making history safe again: What Ken Burns gets wrong about Vietnam” (Salon) is an interview with a professional historian, Christian Appy, who says that the government-funded TV station promotes, as far as possible, the idea that the government-funded Vietnam War was a just and good idea. The government-funded TV station particularly pushes the idea of “American exceptionalism” in this $ 30 million series, which is useful when you’re asking people to pay taxes at 2X the rates of the most efficient countries. The U.S. government is an exceptional force for good on Planet Earth and therefore taxpayers should be happy to fund it with up to 100 percent of their earnings.

Readers: Who has watched this series? How does it compare to what you’ve learned from other historical sources? What else are you thinking about on this Veterans Day?


Philip Greenspun’s Weblog

Congress considering ordering cars to add about 1 IQ point (my 2003 idea)

Back in 2003 I asked why cars didn’t integrate data from existing sensors and warn owners about kids left in the back seat (see Lack of wireless Internet killing children). Today’s New York Times carries “Forgetting a Child in a Back Seat Can Kill. Cars May Soon Warn You”:

At least 41 children have died of heatstroke this year after being left in the back seat of a parked vehicle. Since 1990, when the annual number of vehicular heatstroke victims was first recorded, more than 800 children have died in hot parked cars.

But congressional lawmakers are now weighing whether to require new cars to include a device for detecting children in the back seat and warning the driver of their presence after the car has been turned off. The requirements were attached to a House bill, passed last month, that is meant to speed the development of self-driving vehicles. The Senate version of the bill, which cleared a committee vote this month, includes an amendment with the warning requirement.

It looks as though my 2003 post overlooked a super simple way to do this:

General Motors and Nissan have introduced technologies that remind the driver that a child is in the back seat by analyzing door sequencing. If the rear door is opened before the car is started but not after it is turned off, a warning sounds.

This will be annoying for dog owners, though, in moderate temperatures. The dog enjoys riding around in the back seat, but isn’t welcome in the Kwik-E-Mart. So there will be a lot of spurious warnings.

My 2003 post also overlooked the utility of an additional sensor:

Some companies that sell equipment to the auto industry have developed warning devices. One such system, the VitaSense, uses low-power radio to sense movement and breathing. The technology, developed in Luxembourg by IEE, a manufacturer of automotive sensors, can reportedly detect even a sleeping infant in a rear-facing child seat. If a child is detected after the vehicle has been turned off, it alerts the driver by several means, including flashing lights, beeps, and messages sent to cellphones and computers.

(maybe this is why Luxembourg is so much richer, per capita, than the U.S.?)

For proponents of markets, it is kind of sad that this has taken so long. Why wouldn’t Toyota have added this (at least the trivial door sequence monitor) to the Camry in order to distinguish its product from the Honda Accord? Unless consumers are indifferent to whether their children survive, how to explain this apparent failure of the market?

Readers: how come hundreds of children had to die between my 2003 post and today? There is sort of a competitive market in automobiles (enough competition that GM needed almost $ 100 billion in tax dollars to survive!).


Philip Greenspun’s Weblog

New York Times complains about the lack of dark-skinned executives at other companies

“Tech’s Troubling New Trend: Diversity Is in Your Head” (nytimes) complains about the lack of dark-skinned employees in “leadership roles” at technology companies. It becomes interesting when viewed alongside this page showing portraits of the executives who manage the New York Times.

Comments on this article can be interesting, e.g.,

After 20 years in one field I decided change careers and go into tech. I enrolled at my local university and learned multiple programming languages. I’ve taught entry level classes and volunteered at conferences, including a diversity conference. This is what I have to say about diversity in tech: diversity ends at 40. I can’t get an interview, let alone a job. But those in theirs 20s that I taught? Yeah, they have jobs. Tech is not interested in diversity except to tick off boxes.

Philip Greenspun’s Weblog

If Americans won’t learn about their computers, what hope is there to get them interested in STEM?

Before the current rage for encouraging women and dark-skinned Americans to take up dreary STEM majors and jobs there was a rage for encouraging all Americans, regardless of gender ID or skin color, to toil in the sci-tech mines.

I’m wondering if we have objective evidence of the futility of these efforts from the observed complete lack of interest of Americans in how everyday machines work.

What’s the greatest technological advance that has happened within a middle-aged American’s lifetime? As a computer programmer, I’m going to argue that it is the realization in silicon of the ideas of Alonzo Church, Emil Post, and Alan Turing. These machines are readily available to most Americans: the notebook computer, the desktop computer, the smartphone (plus hundreds of others strewn around the house and car, but they are tougher to poke at). There are great free online tutorials explaining every aspect of these machines from the sandy beach up. But how many people voluntarily learn about wafer fabrication? About transistors and digital logic? About machine language and compilers? About operating systems? To a first approximation, nobody cares. If Americans don’t care about this machine that has transformed their lives, why would it work to exhort them to care about more esoteric subjects?

Separately, I’m wondering if we can measure a falling curiosity about how automobiles work. Back in the 1970s I remember that a lot of people were interested to learn about the cycles of a four-stroke engine, the mechanisms within the transmission, steering, and brakes of a car, etc. Bookstores featured books on these subjects reasonably prominently and these were separate from the practical “here’s how you can fix it yourself” books. I wonder if today’s Honda Accord owner has the same level of knowledge about the vehicle that the average Chevrolet Nova owner had back in the 1970s (and what a great car the Nova was!).

Readers: if the building blocks of computers and computer networking aren’t interesting enough for people to crack a book or browse a web page on the subject, what hope is there to increase the number of Americans interested in the building blocks of other stuff?


Philip Greenspun’s Weblog

Melania Trump learns about Cambridge Public Schools

“Dear Mrs. Trump” is a letter from a Cambridge Public School librarian to Melania Trump, who sent some Dr. Seuss titles to our fair city:

Our beautiful and diverse student body is made up of children from all over the world; from different socioeconomic statuses; with a spectrum of gender expressions and identities; with a range of abilities; and of varied racial, ethnic, and religious backgrounds.

Yearly per-pupil spending in Cambridge is well over $ 20,000 [the statistic is correct, but most of the money is spent on administration and pensions; actual in-classroom spending is a small fraction of the total]

we still struggle to close the achievement gap, retain teachers of color, and dismantle the systemic white supremacy in our institution. [but if white students achieve more than students of color in the Cambridge Public Schools, isn’t the system actually working to increase “systematic white supremacy”?]

You may not be aware of this, but Dr. Seuss is a bit of a cliché, a tired and worn ambassador for children’s literature. … Another fact that many people are unaware of is that Dr. Seuss’s illustrations are steeped in racist propaganda, caricatures, and harmful stereotypes. … Scholar Philip Nel’s new book, Was the Cat in the Hat Black? The Hidden Racism of Children’s Literature, and the Need for Diverse Books, further explores and shines a spotlight on the systemic racism and oppression in education and literature.

The librarian offers a list of ten books in return, e.g., “In this gentle story, Haitian American Saya’s mother is incarcerated because she has no papers. … doesn’t shy away from the realities … the trauma of saying goodbye at the detention facility.” and Separate Is Never Equal: Sylvia Mendez & Her Family’s Fight for Desegregation. Transgender issues are represented by The Boy & the Bindi. (She left off Yo Soy Muslim: A Father’s Letter to His Daughter, prominently featured at the Harvard Bookstore last night.)

[Separately, the librarian complains that “many of us can’t afford to live in the city in which we teach,” but of course if she didn’t have a job she would be entitled to free apartment from the Cambridge Housing Authority. Alternatively, any school employee who studied Massachusetts family law should have been able to figure out a way to live anywhere in Massachusetts without working.]

Readers: Was the Cat in the Hat black? What about Thing 1 and Thing 2? Also, how did the Cat get hold of the alien robot technology that he used to clean up the house after his visit?

Philip Greenspun’s Weblog

Why do young people passionate about diversity choose to go to non-diverse colleges?

There is nothing that students at top schools love more than (a) denouncing Charles Murray for purportedly writing about a correlation between race and IQ, and (b) celebrating the merits of studying among a diverse student body (therefore we need affirmative action programs). Yet  “Even With Affirmative Action, Blacks and Hispanics Are More Underrepresented at Top Colleges Than 35 Years Ago” (nytimes) shows that they have chosen to attend schools where (a) the admissions officers behave as though they agree with the race-IQ thoughtcrime, and (b) they are unlikely to see a non-white/Asian student.

If these good-hearted young people are as passionate about diversity as they say, why didn’t they choose to save a ton of money and attend a state-run school whose student body is more representative of the American population (which leaves open the question, still, of whether to count up all Americans and sort by skin color or to look at the population of 18-year-old Americans)?

Philip Greenspun’s Weblog

About Time?

Well, the latest “North Korean ICBMs are coming!” selloff lasted all of about ten minutes. As I type this now, the ES is freakin’ GREEN, as are most stocks. Looking at the intraday chart of the ES below……..and I realize I’m not an unbiased source………..it just SEEMS to me it’s about time for a selloff […]
Slope of Hope

What are you going to do about it?

Last night a trader sent me a review from a very poor trading day.  He wrote:

Little mad at myself for not taking 2 of my best setups in UVE below 18 and HCI at 32.  Had the alerts go off but didn’t take the trade, and those trades played out to perfection. It definitely got under my skin most of the day and I pressed a little bit throughout the day and cost me a bunch.  

There wasn’t a solution in his review just him sharing his thoughts he was “pissed”.

My response was: what are you going to do about it?

During a monthly review a developing trader shared how his losing days were eating too much into his winning days.  Again, there lacked specific rules for minimizing these losing days.  Trader wrote:

The biggest issue that I seem to be having as of late is controlling my losses on my down days. Instead of stopping the bleeding, I end up obsessing over getting back positive on days where I start down, and end up making stupid decisions that only make things worse.

My response was: what are you going to do about it?

Another consistently profitable trader on the desk carped how he struggled with sizing during the past month that infected his results:

The past couple months I made good progress, having consecutive bigger months and incrementally increasing size.. After getting off to a consistent start, albeit a little complacent, to the month i started pushing my size even more. I did so irresponsibly. I was all over the place. I was bigger in B setups than i was in A setups. My judgement and decision making was totally clouded.

My response was: what are you going to do about it?

The market is at historically low levels of volatility and my strategies are not performing.  What are you going to do about it?

Quant asset managers run the markets and thus markets trade differently than past.  What are you going to do about it?

The market keeps finding a bid (BTFD), when that makes no sense to my trading.  What are you going to do about it?

I keep making the same mistakes as a trader.  What are you going to do about it?

As always, I welcome your feedback/questions at mbellafiore@smbcap.com.

*no relevant positions



SMB Training Blog

Peasantry complains about the imperial Gulfstream on an eclipse jaunt

Here’s a fun New York Times article showing an imperial minister’s wife getting out of what seems to be a taxpayer-funded Gulfstream G550 (7 oval windows minus 2 = basic model number for the new series). The article doesn’t explain why someone would want to take a free Gulfstream trip to Kentucky on August 21, 2017, but I am going to guess this was eclipse-related.

As a measure of how times have changed, below is a photo of  President Eisenhower’s short-hop Air Force One, an Aero Commander 500.

The twin-piston Aero Commander had a value of about $ 53,000 in 1962 (classified ad in December 1962 Flying). That’s about $ 432,000 today, about 1/100th the value of a Gulfstream G550 or 1/10,000th the cost of the latest B747-based Air Force One program.



Philip Greenspun’s Weblog

Charting How Volatility has been Zapped from our Current Market (and what to do about it)

If you’re having trouble making the daily or weekly profits you’ve gained in the past, you’re not alone in this current low volatility market environment.

All things are temporary, and this too shall pass, so before the situation changes, let’s take a look at our extremely tight, compressed, low volatility stock market:

SP500 Stock market volatility declines

We’re seeing the S&P 500 Index with the % Change (daily) as the indicator.

A clear, consistent trend emerged:  We saw wide intraday swings (more volatility) going into 2016 that steadily declined as we hit the middle of 2017.

For example, it was common to see an intraday (single day) percentage movement greater than 1% (in either direction) at the left side of our chart.

Now, a one-day swing greater than 1% feels like seeing a Black Swan event!

In fact, in ALL of 2017, we’ve seen FOUR days trade more than 1%:  two up days and two down days.

That’s horrific if you’re an intraday or even swing trader who is used to a higher volatility environment.

As traders, we play the hand the market deals us and it often starts with the trend (non-stop bullish up) and volatility environment.

Until the market shuffles the deck and deals us all different cards, we have this ongoing low volatility bullish rising/creeping market.

  • How can we adapt?
  • Raise your timeframe (if you’re just an intraday trader, put on some swing trades)
  • Raise your position size (to make more money in a reduced volatility environment, trade more contracts or share sizes)
  • Play for larger targets (and also consider using wider stops to side-step the noise)

And above all BE PATIENT.  Don’t throw your promising trading career away in frustration.

This situation is temporary, like extremely high volatility environments are temporary.

Take this time to educate yourself on trading strategies, indicators, tactics, etc.

Build up your knowledge and confidence level now so you can effectively deploy those strategies when volatility returns… and it absolutely will.




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Corey Rosenbloom, CMT

Afraid to Trade.com

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