Author Archive for ilene

What is a tariff? An economist explains


What is a tariff? An economist explains

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Foreign goods wait to be unloaded at the Port of Los Angeles. AP Photo/Nick Ut

Courtesy of Amitrajeet A. Batabyal, Rochester Institute of Technology

President Donald Trump recently slapped tariffs of 25 percent on imported steel and 10 percent on foreign aluminum, prompting significant concern and discussion about the wisdom of this action.

As an economist who shares some of those concerns, I believe it’s important to first understand what a tariff actually is and does before we can determine whether Trump’s new trade barriers are good or bad.

Two kinds of tariffs

A tariff, simply put, is a tax levied on an imported good.

There are two types. A “unit” or specific tariff is a tax levied as a fixed charge for each unit of a good that is imported – for instance $300 per ton of imported steel. An “ad valorem” tariff is levied as a proportion of the value of imported goods. An example is a 20 percent tariff on imported automobiles. Both tariffs act in similar ways.

Tariffs are one of the oldest trade policy instruments, with their use dating back to at least the 18th century. Historically, the main objective of a tariff was to raise revenue. In fact, before ratifying the 16th Amendment in 1913 and formally creating the income tax, the U.S. government raised most of its revenue from tariffs.

Even so, the main purpose of a tariff these days tends to be about protecting particular domestic industries from foreign competition, alongside raising revenue.

Examining a tariff’s impact

The impact of a tariff depends on whether the levying country is large or small – not in terms of size but the potency of its trade and ability to influence world prices.

Ghana, for example, roughly the size of Minnesota with a population similar to Texas, is the world’s top exporter of cocoa. The Netherlands, meanwhile, slightly smaller than New Jersey, is the commodity’s biggest importer. As such, both countries’ trade policies can have a significant impact on the price of cocoa on global…
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Fearless leader or lame duck? Putin’s certain triumph heralds fresh uncertainty


Fearless leader or lame duck? Putin's certain triumph heralds fresh uncertainty

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Russian President Vladimir Putin at a massive rally in his support n Moscow, March 3, 2018. AP/Pavel Golovkin

Courtesy of Cynthia Hooper, College of the Holy Cross

Long before it happened, Russia’s ruling party had already called it “the ultimate victory.”

On March 18, Russians go to the polls where they will – without doubt – re-elect President Vladimir Putin to a fourth leadership term.

The race is technically contested. Seven other candidates are participating. They include a 34-year-old former reality TV star who admits that “when money gets into her hands, she spends everything” on clothes.

But with the country’s television media under tight Kremlin control and the outspoken dissident Alexander Navalny barred from the ballot, no one besides Putin is expected to garner even double-digit support.

My research as a scholar of Russian and Soviet history shows that there is no escaping the fact that Putin is genuinely popular. Also, that his whole administrative apparatus has always been prepared to invest significant resources in making him appear even more revered than he actually is.

Therein lies the paradox.

Putin’s efforts to uphold the trappings of democracy, even while asserting his right to “manage” Russia’s democratic process, has led to a situation where – according to the very constitutional limits he has previously endorsed – this upcoming electoral victory should be his last.

That means that in a matter of days, Putin, the man that Kremlin spokesman Dmitry Peskov has compared to a god, calling him “a leader of the political Olympus,” will turn into a lame duck, albeit one with a six-year tenure.

Bowing to the constitution – publicly

Putin has sidestepped this situation once before. Winning his first presidential campaign in 2000, Putin served two consecutive four-year terms – all that the Russian constitution allowed. As the second stint approached its end, debate swirled over whether the leader would consent to step down or defy the law and stay in place.

He did neither. In a move that could…
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A timeline of Stephen Hawking’s remarkable life


A timeline of Stephen Hawking's remarkable life

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Stephen Hawking at Gonville & Caius College, Cambridge in 2015. lwpkommunikacio/flickr, CC BY-NC-SA

Courtesy of Michael Courts, The Conversation and Sarah Keenihan, The Conversation

Acclaimed British theoretical physicist, cosmologist and author Stephen Hawking has died aged 76. After being diagnosed at the age of 21, he had lived for more than half a century with motor neurone disease.

A family statement recorded Hawking as saying:

It would not be much of a universe if it wasn’t home to the people you love.


The ConversationMove through the timeline using the arrows or scrolling.


Michael Courts, Deputy Section Editor: Politics + Society, The Conversation and Sarah Keenihan, Section Editor: Science + Technology, The Conversation

This article was originally published on The Conversation. Read the original article.

Download Stephen Hawking's The Grand Design.

Read more: Tributes pour in for Stephen Hawking, the famous theoretical physicist who died at age 76

Stephen Hawking as accidental ambassador for assistive technologies


Stephen Hawking as accidental ambassador for assistive technologies

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A computer-generated voice was essential to Hawking’s participation in the world around him. AP Photo/John Raoux

Courtesy of Martin E. Blair, The University of Montana

Imagine you’ve contemplated the great scientific theories of the past and arrived at new insights based on your own observations. Imagine you’ve organized these thoughts into compelling arguments. Imagine that what you have to say will likely advance humanity’s understanding of its existence. Now imagine your frustration if you were unable to use your physical voice or hands to speak or write the thoughts coalescing in your mind.

Such was the situation for Stephen Hawking, the great explainer of the universe, who died on March 14. He was a brilliant physicist who published more than 230 scientific articles, papers, books, book chapters and children’s books. He gave countless lectures and stretched humankind’s understanding of the nature of our existence. Hawking was well-regarded by his scientific peers but also explained his thoughts in ways that make sense to everyone else. This is an unparalleled contribution for anyone, but especially for someone whose communication was severely limited by ALS, or amyotrophic lateral sclerosis.

At age 21, Hawking was given the standard two to five years to live after his ALS diagnosis. He beat the predictions. Hawking lived with the physical effects of this neurodegenerative disease for more than half a century.

Fortunately, Hawking lived in a time when researchers were rapidly developing electronic technology to assist people with physical limitations in achieving increased independence. Here at Montana’s University Center for Excellence on Developmental Disabilities, we investigate and promote services and supports that increase quality of life, independence and integration of people with disabilities. For us, Hawking was a valuable role model for more than the next generation of scientists. With his recognizable wheelchair and computer-generated voice, he demonstrated the value of technological solutions to liberating the voice of those with physical and communication disabilities.

Tech fills in for functional limitations

So-called assistive technologies provide a means for people to move from place to place, to eat independently, to see and hear what they can’t otherwise perceive. They include…
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The Deutsche Bank-Trump Connection: Why House Probe Abruptly Shut Down

Courtesy of Pam Martens

Deutsche Bank Headquarters in Frankfurt, Germany

Deutsche Bank Headquarters in Frankfurt, Germany

It now appears that a major contributing factor to the abrupt shutdown of the Russia-Trump probe by the House Intelligence Committee was a fear that the Committee was getting too close to Trump’s dealings with Deutsche Bank and Deutsche Bank’s dealings with Russia.

The draft report released by the Democrats after belatedly learning that their Republican colleagues had abruptly ended the probe, included this paragraph:

“Donald Trump’s finances historically have been opaque, but there have long been credible allegations as to the use of Trump properties to launder money by Russian oligarchs, criminals, and regime cronies. There also remain critical unanswered questions about the source of President Trump’s personal and corporate financing. For example, Deutsche Bank, which was fined $630 million in 2017 over its involvement in a $10 billion Russian money-laundering scheme, consistently has been the source of financing for President Trump, his businesses, and his family. We have only begun to explore the relationship between President Trump and Deutsche Bank, and between the bank and Russia.”

Deutsche Bank’s “$10 billion Russian money-laundering scheme” which became known by the shorthand term “mirror trades,” was the subject of a May 23, 2017 letter sent by Maxine Waters, the ranking member of the House Financial Services Committee and other House Democrats to John Cryan, CEO of Deutsche Bank. The letter began:

“We write seeking information relating to two internal reviews reportedly conducted by Deutsche Bank (“Bank”): one regarding its 2011 Russian mirror trading scandal and the other regarding its review of the personal accounts of President Donald Trump and his family members held at the Bank. What is troubling is that the Bank to our knowledge has thus far refused to disclose or publicly comment on the results of either of its internal reviews. As a result, there is no transparency regarding who participated in, or benefited from, the Russian mirror trading scheme that allowed $10 billion to flow out of Russia. Likewise, Congress remains in the dark on whether loans Deutsche Bank made to President Trump were guaranteed by the Russian Government, or were in any way connected to Russia. It is critical that you provide this Committee

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Stephen Hawking: Martin Rees looks back on colleague’s spectacular success against all odds


Stephen Hawking: Martin Rees looks back on colleague's spectacular success against all odds

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Lwp Kommunikáció/Flickr, CC BY-SA

Courtesy of Martin Rees, University of Cambridge

Soon after I enrolled as a graduate student at Cambridge University in 1964, I encountered a fellow student, two years ahead of me in his studies, who was unsteady on his feet and spoke with great difficulty. This was Stephen Hawking. He had recently been diagnosed with a degenerative disease, and it was thought that he might not survive long enough even to finish his PhD. But he lived to the age of 76, passing away on March 14, 2018.

It really was astonishing. Astronomers are used to large numbers. But few numbers could be as large as the odds I’d have given against witnessing this lifetime of achievement back then. Even mere survival would have been a medical marvel, but of course he didn’t just survive. He became one of the most famous scientists in the world – acclaimed as a world-leading researcher in mathematical physics, for his best-selling books and for his astonishing triumph over adversity.

Perhaps surprisingly, Hawking was rather laid back as an undergraduate student at Oxford University. Yet his brilliance earned him a first class degree in physics, and he went on to pursue a research career at the University of Cambridge. Within a few years of the onset of his disease, he was wheelchair-bound, and his speech was an indistinct croak that could only be interpreted by those who knew him. In other respects, fortune had favoured him. He married a family friend, Jane Wilde, who provided a supportive home life for him and their three children.

Early work

The 1960s were an exciting period in astronomy and cosmology. This was the decade when evidence began to emerge for black holes and the Big Bang. In Cambridge, Hawking focused on the new mathematical concepts being developed by the mathematical physicist Roger Penrose, then at University College London, which were initiating a renaissance in the study of Einstein’s theory of general relativity.

Using these techniques, Hawking worked out that the universe must have emerged from a “singularity” – a…
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Economists are unfairly maligned – but they are often pretty prejudiced themselves


Economists are unfairly maligned – but they are often pretty prejudiced themselves

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Courtesy of Esteban Ortiz-Ospina, University of Oxford

I am an economist, and I have spent many hours of my life trying to fight misleading stereotypes about what I do. People, for example, often assume that when I say “I’m an economist”, I mean “I worship the creed of self-righting markets”.

In response to such assumptions or accusations, some of the world’s leading economists are attempting to explain #WhatEconomistsReallyDo. This is an important effort. But I think this discussion is also a great opportunity for economists to reflect on their own prejudices, in particular those regarding other social sciences.

Duncan Green, senior strategic adviser at Oxfam, recently wrote on Twitter that, while working at the UK’s Department for International Development (DFID), he “got into trouble” at an “economics for non-economists” course for asking when the “non-economics for economists” course would be running.

There is something to this: it’s unhelpful when people criticise economics without understanding what economists actually do, but it is also unhelpful when economists criticise or even entirely disregard research from other disciplines simply because they use different methodologies.

Let’s start with “economics for non-economists”.


The different views on what economists actually do can be nicely captured in metaphors. I find the cartography metaphor spot on: economists try to create and use maps to navigate the world of human choices.

If economists are cartographers, then economic models are their maps. Models, just like maps, make assumptions to abstract from unnecessary detail and show you the way.

Different maps are helpful in different situations. That’s what makes this metaphor helpful. If you are hiking in the Alps and you want to find your way, you will want a map that gives you a simplified perspective of the terrain – steep changes in altitude should stand out. A map with elevation contour lines will be very helpful.

On the other hand, if you are an engineer trying to calibrate the compass in an airplane, then a hiking map is not going to be of much use to you.…
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The financial sector is professional gambling in action


The financial sector is professional gambling in action

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Courtesy of Chris Brady, University of Salford

The American journalist and poet Ambrose Bierce wrote in his 1906 satire The Devil’s Dictionary that “the gambling known as business looks with severe disfavour on the business known as gambling”.

That phrase has a particular ring of truth about it when one starts to think about the “casino banking” that caused the financial crisis almost ten years ago. But that term was – and still is – a slur on casinos. If the financial services industry was as well-regulated and as well understood as the gambling industry, the financial collapse may have been avoided.

At the root of all financial bubbles, scams and scandals is the self-proclaimed “professionalism” of the financial sector – what Nobel Prize-winning economist Freidrick von Hayek referred to as “the pretence of knowledge”.

Portrait of Friedrich von Hayek. Wikipedia

Professionalism and distraction

Von Hayek admitted to the futility of trying to make economics “scientific” in the accepted sense of the word. Like any profession, the financial sector seeks to clothe its “pretence of knowledge” in the language it uses to distract its customers from recognising that it is simply an arm of the gambling industry. Substitute betting jargon for finance-speak and the reality becomes clearer. The majority of actions in the finance sector are bets.

The finance sector has a vested interest in dissociating itself from the gambling industry itself. In his book, The Poker Face of Wall Street, finance expert Aaron Brown said:

Gambling lies at the heart of economic ideas and institutions, no matter how uncomfortable many people in the financial industry are with the idea.

Indeed, in the immediate aftermath of Tulipmania (the manic buying of tulips and the ridiculous prices they achieved in the mid 17th-century Netherlands) the courts refused to rule in favour of sellers trying to enforce contracts for sale on the grounds that it was a “gambling operation”.

Bluffing and confidence

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What the National School Walkout says about schools and free speech


What the National School Walkout says about schools and free speech

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Students from South Plantation High School, carrying placards, protest in support of gun control. Carlos Garcia/Reuters

Courtesy of Clay Calvert, University of Florida

Thousands of high school students across the nation today are expected to leave their classes precisely at 10 a.m. for 17 minutes.

The walkout serves two purposes: to honor the 17 people – including 14 students – killed exactly one month ago at Marjory Stoneman Douglas High School in Parkland, Florida, and to call for stronger gun control laws.

Organized by a Women’s March unit called Youth Empower and promoted on Twitter with the hashtags #Enough and #NationalSchoolWalkout, the organizers report:

“Some students plan to circle their school holding hands while others will congregate in hallways to hold hands, sing songs or stand together in silence. Others plan to speak the names of people killed by gun violence — from the 17 students killed in Parkland to members of their own family or community.”

Some schools are threatening to punish these young activists. But others are trying to work with them. As one article puts it, “The response from school districts has been mixed, with some threatening to suspend students and others promising to incorporate the walkout into a civics lesson.”

Enter the First Amendment

From my standpoint as director of the Marion B. Brechner First Amendment Project at the University of Florida, all of this raises important questions about the scope of First Amendment speech rights for high school students. Are the students who exit their classes immune from punishment?

A starting point for answering this question is to understand that the First Amendment only protects against government censorship, not censorship by private entities. Thus, only public school students have First Amendment speech rights. Private school students do not.

California is an exception to this rule. It has a statute known as the Leonard Law that extends First Amendment speech rights to students at private nonreligious high schools. No other state has such a statute.

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The Flash Correction


The Flash Correction

Courtesy of 

31 days ago the market peaked. In nine sessions the NASDAQ 100 fell 10%. And then in the next 21, it got it all back and then some, gaining 13% over that time. [Note: The Nasdaq 100 dropped about 1.2% today to 7,046.5.]

This has been a wild few weeks for stocks, but it is not unprecedented. This type of move has happened before, as shown in the chart below.

What’s interesting about the previous V formations is that they all occurred at very identifiable moments – the Russian default in the fall of ’98, the dotcom crash experienced a few of these puke and rallies, and then at the bottom of the GFC in 2009. But what story are we ascribing to what just happened?

The best I can come up with is this was a flash correction driven by many forces, but absent a single culprit.


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The Byzantine history of Putin's Russian empire


The Byzantine history of Putin's Russian empire

Courtesy of Theodore Christou, Queen's University, Ontario

Russian athletes were conspicuous in their neutral colours during this year’s Winter Olympics and Paralympics due to a ban based on doping allegations.

In Vancouver in 2010 and in Sochi in 2014, however, Russia’s Olympic hockey jerseys prominently featured a two-headed eagle exactly where Canada’s jerseys highlighted the maple leaf.


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Zero Hedge

"Where Will It Stop?": Libor Spread Blows Out Beyond Eurocrisis Highs, Central Banks Intervention Awaited

Courtesy of ZeroHedge. View original post here.

Until two days ago, the critical level for both the Libor-OIS and FRA-OIS spread was the "psychological level" of 50bps. This, however, was breached on Wednesday when as we reported Libor pushed significantly higher without a matching move in swaps. And yet, despite the sharp push wider, both spreads remained below the peak levels observed during the European sovereign debt crisis of 2011/2012, with some speculating that open ce...

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Connor Browne - FAANG Stocks Dominance

By VW Staff. Originally published at ValueWalk.

They are known as the FAANGs but Facebook, Amazon, Apple, Netflix and Google/Alphabet should also be dubbed the great disruptors. They have created new businesses and destroyed old ones, changing the way we conduct our personal and business lives in the process.

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Digital Currencies

Anthill 23: Bursting the Bitcoin bubble


Anthill 23: Bursting the Bitcoin bubble


Courtesy of Annabel Bligh, The Conversation; Gemma Ware, The Conversation; Kelly Fiveash, The Conversation, and Will de Freitas, The Conversation


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Insider Scoop

BofA: Lyft, Magna Could Be The First Of Many Autonomous Vehicle Partnerships

Courtesy of Benzinga.

Related MGA Benzinga Pro's 5 Stocks To Watch Today Earnings Scheduled For February 22, 2018 ... more from Insider

Chart School

Selling Extends For A Third Day

Courtesy of Declan.

Indices extended loses for a third day but didn't change the picture from yesterday.  The S&P is still sitting on a support level of the former channel as On-Balance-Volume extended on yesterday's 'sell' trigger.

The Nasdaq confirmed its 'bull trap' but it still has a support level from the last swing high to use. Technicals remain net bullish with relative performance particularly strong.


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How your brain is wired to just say 'yes' to opioids

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.


How your brain is wired to just say ‘yes’ to opioids

A Philadelphia man, who struggles with opioid addiction, in 2017. AP Photo/Matt Rourke

Courtesy of Paul R. Sanberg, University of South Florida and Samantha Portis, University of South Florida


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Members' Corner

Fatal Flaws of our Enlightenment?


David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on many topics including national defense, creativity, and space exploration. He’s also one of the “World’s Best Futurists.” Find David’s books and latest thoughts on various matters at his website and blog. In ...

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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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NewsWare: Watch Today's Webinar!


We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...

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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.


EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>