by ilene - February 26th, 2017 1:53 pm
Cybersecurity of the power grid: A growing challenge
Called the “largest interconnected machine,” the U.S. electricity grid is a complex digital and physical system crucial to life and commerce in this country. Today, it is made up of more than 7,000 power plants, 55,000 substations, 160,000 miles of high-voltage transmission lines and millions of miles of low-voltage distribution lines. This web of generators, substations and power lines is organized into three major interconnections, operated by 66 balancing authorities and 3,000 different utilities. That’s a lot of power, and many possible vulnerabilities.
The grid has been vulnerable physically for decades. Today, we are just beginning to understand the seriousness of an emerging threat to the grid’s cybersecurity. As the grid has become more dependent on computers and data-sharing, it has become more responsive to changes in power demand and better at integrating new sources of energy. But its computerized control could be abused by attackers who get into the systems.
Until 2015, the threat was hypothetical. But now we know cyberattacks can penetrate electricity grid control networks, shutting down power to large numbers of people. It happened in Ukraine in 2015 and again in 2016, and it could happen here in the U.S., too.
As researchers of grid security, we know the grid has long been designed to withstand random problems, such as equipment failures and trees falling on lines, as well as naturally occurring extreme events including storms and hurricanes. But as a new document from the National Institute of Standards and Technology suggests, we are just beginning to determine how best to protect it against cyberattacks.
Understanding the Ukraine attacks
On Dec. 23, 2015, a cyberattack penetrated electricity distribution control centers in Ukraine using software vulnerabilities, stolen credentials and sophisticated malware. The attackers were able to open dozens of circuit breakers and shut off power to more than 200,000 customers for several hours.
A year later, the country’s electricity transmission facilities were attacked. That attack also cut off electricity service, though to a much smaller geographic area, and for only about an hour. In both cases, it…
by Zero Hedge - February 26th, 2017 12:55 pm
Courtesy of Zero Hedge
"Where did Steve Bannon get his worldview? From my book…"
By Neil Howe via WaPo
The headlines this month have been alarming. “Steve Bannon’s obsession with a dark theory of history should be worrisome” (Business Insider). “Steve Bannon Believes The Apocalypse Is Coming And War Is Inevitable” (the Huffington Post). “Steve Bannon Wants To Start World War III” (the Nation). A common thread in these media reports is that President Trump’s chief strategist is an avid reader and that the book that most inspires his worldview is “The Fourth Turning: An American Prophecy.”
I wrote that book with William Strauss back in 1997. It is true that Bannon is enthralled by it. In 2010, he released a documentary, “Generation Zero,” that is structured around our theory that history in America (and by extension, most other modern societies) unfolds in a recurring cycle of four-generation-long eras. While this cycle does include a time of civic and political crisis — a Fourth Turning, in our parlance — the reporting on the book has been absurdly apocalyptic.
I don’t know Bannon well. I have worked with him on several film projects, including “Generation Zero,” over the years. I’ve been impressed by his cultural savvy. His politics, while unusual, never struck me as offensive. I was surprised when he took over the leadership of Breitbart and promoted the views espoused on that site. Like many people, I first learned about the alt-right (a far-right movement with links to Breitbart and a loosely defined white-nationalist agenda) from the mainstream media. Strauss, who died in 2007, and I never told Bannon what to say or think. But we did perhaps provide him with an insight — that populism, nationalism and state-run authoritarianism would soon be on the rise, not just in America but around the world.
by ilene - February 25th, 2017 7:04 pm
Maybe Joshua Brown's quiet period is over? He did at least emerge from his vacation to post Proudly Permabullish, which is a reminder to look at the stock market in between reading depressing news articles. (5-year S&P 500 chart from Yahoo.)
Courtesy of Joshua M Brown
It’s become fashionable in the age of social media to derisively sneer at our fellow investors who are too optimistic and refer to them as “permabulls.” This sort of thing earns us intellectual style points – points which can be accumulated and redeemed to be spent precisely nowhere.
In the meanwhile, we sometimes forget that the greatest investors in history were permabulls. One hundred years ago, J.P. Morgan said that “the man who is a bear on the future of the United States will always go broke.” See my post Optimism as a Default Setting for the whole story behind that.
This week, Warren Buffett said much the same thing, part of an endless recitation he’s been carrying on publicly for more than 50 years now. The below comes from Buffett’s 2016 annual letter to Berkshire Hathaway shareholders:
America’s economic achievements have led to staggering profits for stockholders. During the 20th century the Dow-Jones Industrials advanced from 66 to 11,497, a 17,320% capital gain that was materially boosted by steadily increasing dividends. The trend continues: By yearend 2016, the index had advanced a further 72%, to 19,763.
American business – and consequently a basket of stocks – is virtually certain to be worth far more in the years ahead. Innovation, productivity gains, entrepreneurial spirit and an abundance of capital will see to that. Ever-present naysayers may prosper by marketing their gloomy forecasts. But heaven help them if they act on the nonsense they peddle.
Many companies, of course, will fall behind, and some will fail. Winnowing of that sort is a product of market dynamism. Moreover, the years ahead will occasionally deliver major market declines – even panics – that will affect virtually all stocks. No one can tell you when these traumas will occur – not me, not Charlie, not economists, not the media. Meg McConnell of
by ilene - February 25th, 2017 5:48 pm
Summary: All of the US equity indices made new all-time highs again this week. Treasuries were the biggest winner. A drawdown of at least 5-8% in SPX is odds-on before year end, but there are a number of compelling studies suggesting that 2017 will probably continue to be a good year for US equities.
* * *
On Friday, SPX and DJIA made new all-time highs (ATH). During the week, COMPQ, NDX, RUT and NYSE also made new ATHs. All the indices moving to new highs together suggests that this is a broadly based rally. The trend remains up.
For the week, SPX and DJIA gained 1%. NDX notched a 0.4% gain and RUT closed lower. The biggest gain came from treasuries, with TLT gaining 1.4%. We continue to like the set up in treasuries, as explained in detail last week (here).
Little has changed from last week's summary. Instead of repeating those the same messages, we'll highlight four new studies that show a favorable longer term outlook for US equities.
First, SPX has now gone 76 days since the last 3% drawdown ended on November 4, right before the US election. That is the longest streak since July 2006 to February 2007, when the SPX went 150 days without a 3% drawdown. The chart below shows the duration and magnitude of the current rally relative to other long streaks in the past 14 years (yellow highlighting equals the current rally). Enlarge any chart by clicking on it.
The message from this chart is twofold.
First, the current uninterrupted rally is rare and extended from a historical perspective, but these periods can last much longer.
Second, when the current uptrend ends, it is not likely to lead directly into a more significant downturn. Momentum like this weakens before it reverses. In each of the cases highlighted above, after a 3-5% drawdown, SPX either continued higher or retested the prior high before falling lower. Mid-2011, 2012 and 2014 are recent examples of the latter case (shown below). That would be our expectation now as well.
by ilene - February 24th, 2017 10:24 pm
Seeking truth among 'alternative facts'
Part of what I do as an archaeologist is judge between competing claims to truth. Indeed, you could say this is the entire purpose of science. Before we make a judgment about what is true, there are facts that have to be examined and weighed against one another.
When Trump’s senior advisor Kellyanne Conway made her now infamous reference to “alternative facts,” many viewers were stunned. But I am a scientist. I spend my days trying to pull “facts” out of the remains of the past. After thinking about what Conway said, I realized that it was not ridiculous at all.
There are always “alternative facts.” What matters is how we decide which of those alternative facts are most likely to be true.
Science or authority?
What made Conway’s suggesting “alternative facts” about the size of the crowd at Trump’s inauguration seem so ridiculous was that, from a scientific perspective, it was obviously false. In science, we use empirical observations to generate “alternative facts” that we judge against one another using established bodies of method and theory and logical argument. Photos of the relatively small crowd at Trump’s inauguration gave empirical evidence that Conway’s “alternative facts” that the crowd was enormous were unlikely to be true.
I’m often asked how archaeologists know whether an object is a stone tool rather than a fragmented rock. We don’t always. Looking at the same rock I might see a tool, while another archaeologist might not. Through science we can usually determine what is true.
We look at how the rock was broken, and whether the breaks were more likely from natural or human processes. We look at wear on the stone to see if it matches that of other known tools. In short, we use empirical observations and methods to decide which description best represents reality.
by ilene - February 24th, 2017 8:50 pm
Courtesy of James Howard Kunstler
Remember that one? It was about as weird as it gets. A meme generated out of the voluminous hacked John Podesta emails that some conspiracy connoisseurs cooked up into a tale of satanic child abuse revolving around a certain chi-chi Washington DC pizza joint. I never signed on with the story, but it was an interesting indication of how far the boundaries of mass psychology could be pushed in the mind wars of politics.
Sex, of course, is fraught. Sex and the feelings it conjures beat a path straight to the limbic system where the most primitive thoughts become the father of the most primitive deeds. In our American world, this realm of thought and deed has turned into a political football with the Left and the Right scrimmaging ferociously for field position — while the real political agenda of everything important other than sex lies outside the stadium.
The Comet Pizza story was understandably upsetting to Democrats who didn’t like being painted as child molesters. Unfortunately for them, it coincided with the bust of one Anthony Weiner — and his infamous laptop — disgraced former “sexting” congressman, husband of Hillary’s top aide and BFF, Huma Abedin. The laptop allegedly contained a lot of child porn.
That garbage barge of sexual allegation and innuendo couldn’t have helped the Hillary campaign, along with all the Clinton Foundation stuff, in the march to electoral loserdom. I suspect the chthonic darkness of it all generated the “Russia-did-it” hysteria that cluttered up the news-cloud during the first month of Trumptopia. The collective superego of America is reeling with shame and rage.
On the Right side spectrum stood the curious figure of Milo Yiannopoulos, the self-styled “Dangerous Faggot,” who has made a sensational career lately as an ideological provocateur, especially on the campus scene were he got so into the indignant faces of the Maoist snowflakes with his special brand of boundary-pushing that they resorted to disrupting his events, dis-inviting him at the last moment, or finally rioting, as in the case at UC Berkeley a few weeks ago.
by ilene - February 23rd, 2017 11:44 pm
The Manchurian President
As the Trump presidency unravels, unraveling the country along with it, there is no real political antecedent, no lessons from American history on which to draw and provide guidance. We are in entirely uncharted waters.
But there is an antecedent in our popular culture that provides a prism through which to view the contemporary calamity, especially the alleged collusion between Trump’s henchmen and Russian intelligence to deny Hillary Clinton the presidency. I am not the first observer who has noted the relevance of the movie The Manchurian Candidate. But the relevance is more than skin or celluloid deep. It goes to the very heart of this bizarre and frightening political moment.
First, the fact that this implausibly plotted Hollywood thriller could now be applied, not altogether implausibly, to a sitting American president demonstrates just how far off the rails this country has gone. Outlandish plots suddenly seem credible, and not just to conspiracy theorists.
Second, and perhaps more significantly, the film demonstrates not only how much our narrative bearings have been lost but also our political and moral bearings, and how an admittedly paranoid movie may actually be insufficiently paranoid when it comes to our new reality. It isn’t just the possibility that we had a Manchurian candidate for the presidency. It is the possibility that we now have a Manchurian president, a Manchurian Congress and a Manchurian government.
The 1962 movie, directed by John Frankenheimer and written by George Axelrod based on Richard Condon’s best-selling political potboiler, stars Frank Sinatra as Major Bennett Marco, an army intelligence officer posted with a platoon that withstands a fierce firefight during the Korean War. The platoon leader, Sgt. Raymond Shaw, played by Laurence Harvey, returns to the States and to a Congressional Medal of Honor awarded for his valor in saving all but two of his men.
It just so happens that Shaw is the son of a politically ambitious Lady Macbeth (Angela Lansbury) and the stepson of an opportunistic, alcohol-addled Joe McCarthy clone named John Iselin (James Gregory), a US senator who is angling for the presidency and…
by Zero Hedge - February 23rd, 2017 10:55 pm
Courtesy of Zero Hedge
The latest GDP numbers from the World Bank were released earlier this month, and today’s visualization from HowMuch.net breaks them down to show the relative share of the global economy for each country.
As Visual Capitalist's Jeff Desjardins explains, the full circle, known as a Voronoi Diagram, represents the entirety of the $74 trillion global economy in nominal terms. Meanwhile, each country’s segment is sized accordingly to their percentage of global GDP output. Continents are also grouped together and sorted by color.
Here is the data for the Top 20 Countries in table form:
by clarisezoleta - February 23rd, 2017 11:18 am
PhilStockWorld.com Weekly Trading Webinar – 02-22-17
For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here
00:02:30 Checking on the Markets
00:05:18 FOMC Meeting
00:23:47 Tesla Powerwall
00:43:27 NGJ7 Trade Ideas
00:46:19 Natural Gas Chart
00:52:17 ESRX on Long-Term Portfolio
00:54:11 QCOM on Long-Term Portfolio
00:56:25 Trade Ideas
01:01:30 TEVA Trade Ideas
01:04:10 LNG Charts
01:10:26 PFE Charts
01:11:49 Crude Oil
01:21:38 PFE Trade Ideas
01:22:55 Checking on the Markets
01:39:41 LL Charts
01:42:28 Checking on the Markets
Phil's Weekly Trading Webinars provide a great opportunity to learn what we do at PSW. Subscribe to our YouTube channel and view past webinars, here. For LIVE access to PSW's Weekly Webinars – demonstrating trading strategies in real time – join us at PSW — click here!
by ilene - February 22nd, 2017 11:13 pm
Want a stronger economy? Give immigrants a warm welcome
Immigrants have long been a scapegoat when economies are sputtering, jobs are being lost or security is a concern.
President Donald Trump’s planned wall along the Mexican border, for example, is premised on the notion that immigrants are pouring across the border (they’re not), taking Americans’ jobs (they haven’t) and committing a disproportionate share of crimes (they don’t).
The presumed threats of immigration were also front and center in Trump’s recently announced plan to deport millions of people who were in the U.S. illegally.
We saw something similar when U.K. voters opted for a “Brexit” from the European Union last year, when many British politicians cast immigrants as a threat to the physical, social and economic welfare of natives.
While it has become a popular notion in the West that immigrants jeopardize the job prospects of natives, over 30 years of economic research (including my own) give strong reason to believe otherwise.
And in fact, the opposite may be more likely: There’s evidence immigrants actually promote economic growth.
Why we blame immigrants for our troubles
Extensive reviews of research on the topic (like this one) show that most studies of how immigration affects native wages and employment found very little effect.
Although economists have yet to arrive at a complete consensus, decades of studies generally do not support the notion that immigration harms the economy, market wages or native employment. So why do so many believe it when research suggests otherwise?
A central issue is that it is easy to think that the labor market is a zero-sum game and the number of jobs available is fixed. If everyone were competing over a finite number of jobs, more immigrants would mean fewer opportunities for natives, and vice versa, right? The reality, however, is much more complex, as I will show. Further, it is simply false to think of the number of jobs as fixed in the first place. Employment has been generally rising since 2010, which means more jobs for everyone.