Administrative notice

Blogging will be a little bit lighter until we get squared away on our bandwidth use.  I will still post daily but the posts will be skinnier and more to-the-point.  It may actually be better writing.

The red line is when Kubota was informed of the need to control bandwidth.

As you can see, we "blew up" on 9/3, 9/5 and 9/7.

My countermeasure is to unplug the modem when Kubota is home.

What changed?

Kubota is not a big talker so I asked his friend The Great Brain what was going on.  TGB told me that Kubota has a girl friend!  Furthermore, TGB said that she is a good person and is a grade ahead of Kubota. 

Kubota objected when I asked him about it.  He said, "She is not my girl friend.  We have not 'gone out.'"

Overall, I am pleased with this development.  Nothing is more motivating than the desire to appear mature and capable to members of the opposite sex.  Thinking back, I have noticed a greater emphasis on grooming and appearance.

Now, he needs to start working so he has a few dollars rattling around in his pocket.

Interest Rates: a Historical Perspective

My more Progressive fiends and family sometimes ask me about the basis for my certainty regarding upward pressure on interest rates.

At the time of writing, 10 year Treasury yields are 2.19%.  Image from HERE

 Historically, interest rates have been 2.5%-to-3.0% above the rate of inflation*.  Compounded, a rate of 2.5% requires a duration of 28 years to double.  Similarly, a rate of 3.0% requires a duration of 24 years to double. (*For the sake of simplicity, an inflation rate of 3% will be assumed)

Said another way, people with sufficient assets to invest require a rate of return that doubles their buying power in one generation.

I suspect that the stability of the 2.5%-to-3.0% is due to the fact that man's allotted three-score-and-ten has not moved that much.  That number may have grown to 85 if one is gifted with good genes, the habit of moderation and reasonable access to health care.  But it certainly has not grow in proportion to "economic" metrics like the size of the GDP or the population, for instance.

People with a finite life span cannot afford to measure time in geological epochs. 

Gold

Some conservatives like to point out that inflation is less likely to happen on the gold standard. They might even point out that the buying power of an ounce of gold has remained remarkably constant.  One ounce could buy a top-end suit of clothes at the height of the Roman Empire, just like $1200 (the current price of an ounce of gold) will do today.

Two issues dilute this argument.  We know that since at least the time of Archimedes (Eureka!) that gold was being diluted with baser metals.  It is possible to debase metal coinage via alloying.

The second issue is that this chart shows the interest rates in the dominant culture.  Roman Empire-British Empire-Pax America.  The dominant economic power provides an updraft similar to the Dresden firestorm.  Its sucks in resources from outlying areas which fuels further growth..  That growth creates demand that outstrips supply.  It is the classic fruit-fly population growth "S" curve.

Stocks

In a similar way the "standard" for risky ventures seems to hover around 7% return on buying power.  Compounded, that translates into a doubling of capital every half generation.

The US economy has been accelerating since before the S&P 500 was created.  The P/E has been approximately 16 for the last 130 years which corresponds to a return of 6.7% in nominal terms.

That Price/Earnings ratio tends to go up (i.e., immediate return goes down) in periods of expansion and on classes of assets that are expected to have a "J" shaped growth curve.  For example, consider a young orchard on the verge of producing.  It has no earnings, but an investor is willing to buy it based on the expectation of future profits.

Image from HERE

In the absence of growth, the historic S&P 500 P/E of 15.8 makes no sense.  That translates into a nominal return of 6.7% or a real return of 3.7%. 

Summary

Based on VERY long term historical norms, regression-to-the-mean suggests that interest rates will rise....a lot.

Based on long term historical norms, the stockmarket is overpriced with a P/E of 21 UNLESS the economy shows an incredible growth spurt in the very near future.  A P/E of less than 16 is defensible due to evidence of the slowing global economy.

Labor Day

The ERJ "Barbie".  Low tech and cheap.  A steel wheel from Danny Hector.  A couple of cinder blocks and a grill.

This little guy (upper left corner of photo, in middle of leaf) was kept an eye on me from the persimmon tree next to the driveway.  Persimmons are not native to Michigan but they seem to do just fine.

We had a storm cell sweeping in so I hurried things a bit too much.  The fire was a blast furnace even  with the draft control.  Normally I would have let it burn down more, and I would not have had the breeze kicking up with the oncoming storm.  The blocks are angled to take advantage of our prevailing SW breezes.

I need a better system for holding up the grille.  A job for later.

I hope you all had a Labor Day weekend that regenerated you.

Narrative

Little Cindy-Lou Who, who was not more than two.
The Grinch had been caught by this tiny Who daughter,
Who'd got out of bed for a cup of cold water.

She stared at the Grinch and said, "Santy Claus, why,”
"Why are you taking our Christmas tree? WHY?"

But, you know, that old Grinch was so smart and so slick,
He thought up a lie, and he thought it up quick!
"Why, my sweet little tot," the fake Santy Claus lied,
"There's a light on this tree that won't light on one side."

"So I'm taking it home to my workshop, my dear."
"I'll fix it up there. Then I'll bring it back here."

And his fib fooled the child. Then he patted her head,
And he got her a drink and he sent her to bed.  -Dr Suess

If you are like me, you cringe when you read the word "narrative" in a report.

You know that you are about to waste time reading about flights of fantasy that have only occasional, accidental encounters with objective fact.  It is beyond my comprehension that any reporter would ever use the word "narrative".  It is an admission that they are about to repeat "information" they know is not factual.

So I was tickled to run across this essay, "I am not a Story"

The author contends that it is common for people to create order in their lives by formatting it as a story or a movie script.  It is, however, not universal.


The author of the essay suggests that students of psychology tend to be an introspective bunch. They are not truly representative of the larger population.  Their introspection does not scale to include everybody.

There are many who lack introspection, or who live totally in the moment. There are others whose past is not populated by the warm, cozy cottages of A. A. Milne or Jan Karon. They would rather husband their emotional reserves to battle today's demons rather than squander them refighting yesterday's unwinnable conflicts.

"Narrative" has other handicaps

If you have lived long enough, you have witnessed unexplainable tragedy: Pearl Harbor, Boston Marathon, Ebola, car accidents, dead toddlers washed up on the beach.

If you have lived long enough, you have witnessed unexplainable, miraculous good fortune: The love of a good woman, child birth, heroic sacrifice.

That which cannot be explained is poor fodder for "narrative." Quite literally, "narrative" is the "explaining" positioned between the dialog and action. How can one "explain" what is inexplicable?

Another shortcoming of narrative is that it demands "proximate cause". Two-hundred thousand tons of wet snow is not proximate cause. Narrative demands the clap of the hands or the report of a gun shot to explain an avalanche.  Life can be weird.  Narrative fails when an event has deep, undeniable, emotional impact on us and we cannot identify proximate cause.

Perhaps the biggest shortcoming of "narrative" is that the script demands that we cast ourselves as the hero, especially when we have not acted in heroic ways.  This causes "narrative" and observable fact to rapidly part company.  I am talking about the angelic choir-boys where were about to enroll in college.  You know the ones.

In some cases, the narrator takes the Promethean script, "I am so great that the Gods chose me for special torment."  In their minds they are sublimely heroic.  The rest of us see them as tedious, self-handicappers.

Another shortcoming of "narrative" is that they almost always rely on presumption of other's motives as a source of energy and conflict.  Presumption of motive is not observable fact.  It might be good story telling but it is not a way to be successful.

For the record, I am not very good at creating "narrative".  Mostly it is because I am too lazy to keep notes.  Also, I grew near the middle of a family of eight children.  I have no illusions about the universe revolving around me.

Remember:  "Narrative" = old Grinch was so smart and so slick, He thought up a lie, and he thought it up quick!...Quick, that is, if spending a lifetime bending observations to fit is "quick".

Spitback

Mrs ERJ has been combing through the pantry, pulling expired canned goods.  My job is to hump them up the stairs and dispose of them.  This is a job she has been doing a bit at a time.  The company that collects our trash has a limit on how many pounds we can put in the receptacle.  Mrs ERJ knocks off after pulling about fifty pounds of cans and such.

I figured out that we could dispose of much more if I emptied out the cans.  Emptying out the cans involves poking a hole in them.  Bullets make holes!  I have a gun with a new spring kit that needs shooting.  What do you think happened next?

Spitback

I thought I had the spitback problem solved.  Cans of baked beans seemed to be the worst actor.  But I found out that they do not spit back if you shot them end-to-end rather than in the side.

I was having a blast.

And then.....

I shot one of those squeeze bottles of mayonnaise.  I positioned it just like I positioned the cans...so I can hit it in the end.  I hit it right in the cap.  The 124 grain hollowpoint transferred some kinetic energy to the mayo, which in turn inflated the flexible polyester bottle.

Empirically, it can be proven that one needs only half of a converging-diverging nozzle when dealing with incompressible fluids.  This "nozzle" was pointed slightly upward and straight back at me.  Mrs ERJ, ever quick to put a positive spin on events, quipped "Well, at least you smell nice."  Between the chortles, that is.

She volunteered to take a picture for the blog.  And I might have let her if not for the fact that the ejectia had remained in one blob until it painted a bold, white stripe the length of my scalp.  The stripe was one-and-a-half inches wide and ran front-to-rear.

In retrospect, that may have been what prompted the chortles and comment about smell.

Kids: Its all fun and games until the mayo bottle spits back.

Hair, squash and hose

Hair

Rain showers expected through the day.

Belladonna is home.  This is a "hair" weekend.  All of the little micro-braids come out.  It is a marathon movie watching session as her fingers fly.  Later this weekend she has a session with Rosemary.  Then her hair is virtually maintenance free for six-to-eight weeks

Squash

This photo accurately captures the color and luminosity of the cut squash.  It really is that glowing green-and-orange.

Yesterday I picked one of the North Georgia Candy Roaster squash.  The seeds are drying.  The flesh was cooked, cooled, mixed with sugar, eggs, milk, cinnamon, nutmeg, ginger an mace. 

It is a crust-less pumpkin pie.

Zero Turn mowers

Between showers, I went over to Roger's house and tidied up a job I started earlier.  It turns out that Roger has two, zero turn mowers.  The larger one was sidelined due to fuel leaks.  Roger and I road-tripped into town with the old, rotted out fuel line.  We replaced it all with new.

These are fine for attaching labels to tree branches but do not stay secure under vibration.

Roger is very fond of wire twist ties.  He proposed that we use them to route the fuel line and secure it so it could not drift over to the exhaust pipe.  I am not as impressed with twist ties as Roger.  Today I lashed down the fuel line with zip-ties.   I used black ones because I think they have more resistance to UV light, always a consideration for equipment that might get parked outside.

It is a good thing that I did.  The hose had walked over and was within an eighth-inch of touching the exhaust pipe.

As an additional measure of overkill, I sleeved the outside of the exhaust pipe closest to the fuel line with aluminum salvaged from a 24 ounce beer can.  I don't know how long the aluminum will last in that application. I considered putting the sleeve on the rubber hose but did not want to run the risk of having the raw edge abrade the hose.

A couple of stories on the internet today

From Missouri

An 11-year-old Missouri boy shot and killed a 16-year-old boy during an attempted home invasion Thursday afternoon, St. Louis County police said.
Police said two suspects tried to break into the home north of downtown St. Louis twice before the shooting on Thursday. On the third try, authorities said the unidentified teen went through the home's unlocked front door while the 11-year-old and a 4-year-old girl were home alone. Police said the younger boy shot the teen in the head. The would-be burglar's body was found in the home's front foyer.

The chatter on the internet suggests that the DA is considering prosecuting the mother of the heroic 11 year old for:

1. Leaving an 11 year old and a 4 year old unatten
2. Leaving a gun where an 11 year old could access it
3. Leaving the front door unlocked. 

In New Mexico:

 Brachle first put two (.45 caliber) bullets into Grant’s torso at point-blank (spitting distance)  range. The detective’s body slumped over in the back seat. Brachle then fired seven more times (all hits) as Grant tried to crawl away.

Here is the amazing thing:  Grant, the target of the shooter, survived!!!
 
That is a testament to the robustness of modern medicine when the victim can receive prompt care.

It is also a cautionary note that even nine solid hits with the "gold standard" of handgun terminal ballistics guarantees nothing.