Complexity Everywhere

What Is The Most Important Question in the World Today?

The most important question in the world is whether the American-led world order is near or far from decline. I say this, not out of some jingoistic view of preserving what I am part of. To explain, I turn to the thought-provoking, perhaps life-changing views of Ray Dalio and David Deutsch.

georgia senate race

Georgia On My Mind

Democrats appear favored to take both seats in the Special Election on January 6 in the Peach State. Polls are moving in their direction, including solid Republican ones. Registration trends since the election favor Democrats. Early voting offers some hope for the Republican incumbents. Republicans have had a huge lead

bitcoin

Bitcoin - Perhaps Not too Late to Be Early

As of this writing, Bitcoin prices in USD are about >250% year-to-date. I was wrong on my bearish view, last November. That post was full of well thought out underlying weaknesses in Bitcoin and a Random Forest model predicting a year-end 2020 price of around $9,000. It’s

artificial intelligence

A Picture is Worth a Thousand Numbers

I’ve enjoyed the recent research and writing about politics and voting data. Time for a short break from that (at least until closer to the Georgia Senate election). Back to some deep learning topics for a bit. The most well-known advances in deep learning have been in computer

presidential election

Four New Years, Two Important Months

It felt pretty good to be wrong this time. History rhymed, it did not repeat. The Biden-Harris campaign overcame a bunch of historical hurdles, an unorthodox opponent in the sitting President, and a global pandemic. They did so with intelligence, grace, and dignity (compare Jen O’Malley Dillon to

presidential election

What Voter Registrations Imply It Would Take for Biden to Win

There is a disconnect between voter registrations and conventional polling in the swing states. I’ve revised my core voter registration model (see here) to identify the likely things that need to happen for Biden to win despite registration disadvantages. Here’s one path for Biden Democrat Excitement

presidential election

If Voter Registrations Matter, Trump is Ahead

There is a groundswell of attention being paid to voter registrations in key swing states, driven in part by a widely circulated report by well-known JPMorgan quant analyst Marko Kolanovic. I first wrote about the importance of registrations last Fall, using Michigan as the example. I am making four arguments

presidential election

Swing State Series - Wisconsin

Election forecasters continue to undervalue concrete data on actual voter registrations in competitive states such as Michigan and Pennsylvania. Wisconsin appears to be a story of lost Democrat support, much more so than gained Republican support. President Trump garnered essentially the same vote total as Senator Romney did in 2012.

2020 election

Swing States Series - Pennsylvania

Election forecasters may be overweighting polls and underweighting voter registration data. Registration data has a lot of noise – it’s hard to judge how independents vote, voters cross parties, and get out the vote operations matter. But all things being equal, you’d rather have voters registered

2020 election

Swing State Series - Michigan

Votes win elections, not polls. And you can’t vote if you don’t register. Last October, I built a voter model (CE-VM) and showed how registrations in Michigan were trending in favor of the President. Elevated registrations are actually occurring in 2016 Republican counties, a phenomenon being

Everything is at a Tipping Point

This era’s American arguments must be resolved successfully. America’s foundation is free and vigorous debate by its citizens. We thrive on arguments: liberal v. conservative, farmer v. banker, rural v. urban, incumbent v. startup, bull v. bear, protestor v. police, etc.. These arguments play themselves out

complex systems

The Prepared Are Planning for Victory

Many are regretting not preparing for the disruptions they are now facing. What should you prepare for next? How about beating this thing. Some predictions: One or more of the dozens of antibody tests in development worksPrivate supply chains distribute these tests across the globeWestern democracies adopt reasonable, non-dystopian approaches

covid-19

There's Reason to be Optimistic About the COVID-19 War

As much as I believe in an immediate national shutdown for 30-45 days with a complete economic backstop, that appears unlikely for now. America is not an autocracy, it is a federal republic. We have the most robust state and local government bureaucracy on the planet. A lot of power

complex systems

The New COVID-19 Base Case is Shutdown, Suppression, Backstop the Entire Economy, Hammer & Dance

The disruption caused by the virus is a surprise attack by an enemy. The enemy is invisible and strikes without warning. It snuck across our borders while we celebrated stock market highs and a Kansa City Super Bowl win. It is here, not far away on the shores of Normandy

coronavirus

Who Shall Fight on the Beaches?

The 2020 COVID-19 battle confirms that most global risk emanates from miscalculated, misguided, and increasingly autocratic actions of the world’s political class. The American people are not being spared. Our highest levels of government are embracing autocratic techniques in response to COIVID-19. In an era of private sector

china

2020 Outlook

Entering year 4 of a 15-year private sector confidence cycle, expect a mixed bag for risk-on asset classes in a world weighed down by the continued miscalculations of public sector actors. Major Themes: A Mixed Bag for Risk-on Assets in 2020: The S&P 500 rises modestly; so does

2019

2019 Year in Review

Entering 2019, I wrote here about three themes impacting markets, politics, and society. Each has materialized, in some form, and with varying impact. Tangible Government Regulation of Big Tech PlatformsDramatic and Rapid Breakdown Of Post-WW2 Multilateral StructuresMilitary Conflict Between India and Pakistan and Between Israel and Arab States I also

bitcoin

Will You Give Thanks for Bitcoin?

After falling as much as 35% from late October levels, Bitcoin (BTC) is likely on the cusp of a dramatic + or – 50% move. BTC has price memory around 6,500, and a break below should take the market to 2018 lows around 3,000. A bounce could result in

complex systems

US Stocks are set up for a dramatic surge into year-end

While the long-term remains uncertain, the rest of 2019 should be very positive During the summer, I expressed a three-part argument here, here, and here, for a downward transition in stocks: Critical slowing down (CSD), a phenomenon observed as complex systems going through a transition, in the S&P

machine learning

Trump Can Hold The Rust Belt (Part 1: Michigan)

Conventional wisdom and polling are that Democrats can regain the Rust Belt firewall in 2020 (Wisconsin, Michigan, Pennsylvania). I built a Random Forest model called CE-VM to predict likely 2020 total votes (turnout) in every U.S. county. CE-VM predicts that~135M votes will be cast in 2020, up from

deep learning

Stocks and Bonds are Now Both Right - No Recession in Sight

Expect Stocks to Make New Highs as the Economy Firms Up Recession fears are everywhere. The US-China trade war, Middle East violence, impeachment in DC, protests in Hong Kong, and Brexit have all weighed on the economy. These fears are likely overblown. Consumer economic data remains robust and the Fed

deep learning

Odds Increase That the Fed Doesn't Cut Rates This Week

Another FOMC decision is upon us. Expectations are for a 25 bps cut. Equity markets are near all-time highs and US economic data continues to be resilient. A communications embargo has limited public FOMC communications. NLP analysis of available FOMC communications suggests a much lower likelihood of a rate cut

china

Congress Supports the Trade War, Even if You Don't

Conventional wisdom is that Congress doesn’t support the trade war. Sentiment analysis of every member’s Twitter feeds paints a different picture. TL;DR: Congress is about as negative on China as the President is. And their followers are rewarding negative China tweets with more likes and

deep learning

Optimism is on the Menu; A Recession is Not

The yield curve has inverted, the trade war seems to be in early innings, and economic data is being revised downward. Forecasters are warning of a recession and even financial panic. CNBC has been replete with talk of markets in turmoil. A good part of the country is apoplectic about

deep learning

Believe Me When I Say To You, I Hope You Love a Trade War Too!

NLP Analysis of the President’s Tweets on Trade (With Some Inspiration From Russians by Sting) In Europe and America, There’s a growing feeling of hysteria. Markets are catching up to the staying power of the trade war. As I wrote on May 23rd here: Investors continue to