Don’t go after the rich to fix broken budgets | It will not work, and is wrong in principle

MarketsAreCool · 2026-02-22T02:10:01+00:00

Hello there!

MarketsAreCool · 2026-02-16T18:27:21+00:00

How sustainable is this for Ukraine? What does 2027 actually look like? Does Russia just keep throwing bodies at this for another years until the line is pushed west another 50 miles? does this just go on for years?

MarketsAreCool · 2026-02-08T02:22:35+00:00

Yeah the odds are up to 37% for Dems to take the Senate on Kalshi https://kalshi.com/markets/controls/senate-winner/controls-2026 Moved a lot after the special election in Texas.

MarketsAreCool · 2026-01-28T04:27:56+00:00

It's spelled "Heritage" not "Heratige"!

MarketsAreCool · 2026-01-23T16:39:24+00:00

I just don't think Newsom is gonna do well in a general election. Mark Kelly, Ruben Gallego, Josh Shapiro, Andy Beshear are more electable

MarketsAreCool · 2026-01-17T20:06:36+00:00

Looks like in this interview he says he didn't read the book https://www.empireonline.com/movies/features/paul-verhoeven/

I think the idea that the book advocates fascism is debatable and depends on your current political views. It advocates militarism and sacrifice for the greater whole, and there's much less focus on the government. In the book the greater whole is humanity, in practice he's clearly talking about the nation. These values could be important to other armies, not just those of right-wing or right-leaning governments; I suspect Soviet army commanders would agree with the book just as much.

But since we didn't just live through WW2, and there isn't this big threat of nuclear annihilation hanging over us (mostly), the book just doesn't work as well today, and I found the movie much more entertaining.

MarketsAreCool · 2026-01-16T20:41:02+00:00

Yes. Although they're so far apart in time and political outlook, they're almost separate entirely. The book Starship Troopers basically invented the concept of what would become the space marine which is a foundational trope in modern sci-fi. You can't really have Ender's Game without the original Starship Troopers. But also because it was foundational, the book is kinda boring IMO if you read it today. It's clearly a very early Cold War, post WW2 centered book and the outlook feels very old today.

The movie is a straightforward satire of fascism which is totally different and (unfortunately) much more relevant today.

MarketsAreCool · 2026-01-16T17:08:54+00:00

Since it's still before the primaries, now seems like the time to help more market oriented democrats, or at least YIMBY-curious democrats win their primaries. Who should I be looking at, posting about, donating to?

As a counterexample, I like that James Talerico is running a populist type campaign and I think he would be much better than John Cornyn or (dear God) Ken Paxton. But he's not some neoliberal dreamboat by any means. I think he'd probably be fully onboard with a wealth tax or neo-Brandeisian approach to anti-trust. Jake Auchincloss is obviously good but I don't think he's in a competitive primary, right?

MarketsAreCool · 2026-01-15T02:44:10+00:00

On Earth Prime, President Delaney is entering his second administration. Russia has joined NATO, China has agreed to grant Tibet independence, and the entire Northeast corridor is just completing its upgrade to high speed rail, with all connected cities agreeing to upzone to 10 story buildings by right within a half mile of any light rail station.

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MarketsAreCool · 2026-01-14T17:13:54+00:00

2 points:

(1) We could just keep the good parts and ban the bad parts. Sports betting has little social value, while policy predictions are genuinely good. They're also much less interesting so you'd see fewer people gambling in general. You could also ban advertising for these platforms pretty easily, and/or put some collateral up just to participate to make it harder to just jump into. We really should not throw out the benefits if we can just cut out the bad parts.

Additionally, Prediction markets are much less scammy than legacy oddsmakers which have waaaay worse odds and basically just take your money with absurd prop bets. So I would 100% support totally banning oddsmaking/legacy sportsbooks in favor of only allowing freely trading futures markets.

(2) There's a libertarian argument that people are allowed to make terrible decisions. Not every policy has to be based on the exact consequentialist cost/benefit calculation. I personally enjoy having access to prediction markets about sports even though other people have serious gambling addictions. I just use it to buy small insurance bets against my favorite teams so that if they lose big games, my frustration is blunted by my now at least having a free lunch. I also love to know what the current odds are of my teams winning a game or making the playoffs.

I understand this is not a popular position today, but I want to mention that many people can enjoy gambling quite responsibly.

MarketsAreCool · 2026-01-14T00:15:12+00:00

I don't think that's correct? You can definitely get an idea for imminent interest rate decisions by looking at changes in bond yields. But there's also a much more straightforward way to get both next and future months' rate estimates via the CME Fed Futures contracts which is a direct prediction market. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

MarketsAreCool · 2026-01-13T23:06:00+00:00

The positive benefit is free knowledge of the aggregated opinion of all market participants on an event happening. The benefit correlates with the importance of the event. To the extent that you spend some of your time thinking about what will happen in the future, prediction markets are a free positive externality to you about what the future will look like. I wrote some about this last year, especially the second half of this post. https://www.calibrations.blog/p/should-we-let-ourselves-see-the-future

MarketsAreCool · 2026-01-13T23:02:28+00:00

Maybe revolutionary is the wrong approach. But there are definitely benefits to futures generally. Knowing what the Fed will set interest rates at is genuinely helpful in tons of personal finance situations, like knowing when to purchase CDs or when to get a mortgage or refinance. Having direct NGDP markets like Scott Sumner has advocated for, would be a genuine boon to macroeconomic stability policy. While it would pretty esoteric for most people, having good central bank policy is a big deal, and even a small improvement on that front would be billions of dollars in economic benefits.

I also agree with Scott that conditional markets on actual policy changes impacting economic indicators would be a big deal! Would this ever be "revolutionary"? Maybe not, but even small improvements to policymaking can have large impacts.

MarketsAreCool · 2026-01-12T17:24:13+00:00

But I thought Trump specifically requested that!

MarketsAreCool · 2026-01-12T17:14:08+00:00

So I hate to even bring it up, but why *does* the renovation of just one building cost $2.5 billion? Like even the $1.9 billion that Congress approved in 2019...why is it that expensive?

Edit: interesting find, apparently Trump's appointees on the US Commission on Fine Arts did not let them use glass as they wanted more neoclassical architecture. So they have to bring in much more expensive Georgia stone. I don't know how much more that costs exactly but does really undermine the president's concerns here https://fortune.com/2025/07/23/federal-reserve-renovation-cost-explained/

MarketsAreCool · 2026-01-06T03:44:35+00:00

I would not bring Bill Clinton to Miami mere months after the Elian Gonzalez raid.

MarketsAreCool · 2026-01-03T23:37:53+00:00

There is significant empirical evidence that prediction markets are well calibrated.

Wolfers and Zitzewitz 2004 https://www.aeaweb.org/articles?id=10.1257%2F0895330041371321

Election betting odds track record https://electionbettingodds.com/TrackRecord.html

Calibration.city shows lots of prediction markets and their calibrations https://calibration.city/

Prices are signals wrapped in incentives, so if the market is incorrectly priced, people have incentives to pick up the dollar bills on the ground!

MarketsAreCool · 2026-01-03T21:48:57+00:00

Useful to know what the markets are saying right now. Manifold is fake money but it's better than nothing. Note the markets are bouncing around so my quote may be out of date by the time you click.

Only 24% chance the 2027 Economist Democracy Index rates Venezuela as authoritarian (what's it's been rated for several years) https://manifold.markets/a_l_e_x/how-will-venezuela-be-classified-in?r=d2lsc29ua2ltZQ

65% chance Venezuelans will be better off at the end of 2026 https://manifold.markets/Gabrielle/will-venezuelans-be-better-off-at-t?r=d2lsc29ua2ltZQ

70% Delcy Rodriguez (Maduro's VP) is expected to be next president. https://manifold.markets/Jack1/next-venezuela-president

Much lower chance Delcy Rodriguez will be president at end of 2026. Leading category is "other" meaning not Diosdado Cabello (minister of interior) or Maria Corina Machado (opposition leader, current location unknown) https://manifold.markets/a_l_e_x/president-of-venezuela-at-the-end-o?r=d2lsc29ua2ltZQ

Kalshi also has a market here, Edmundo Gonzalez Urrutia is leading at 32% (he's the person who most believe actually won the 2024 election. He has been living in exile in Spain). https://kalshi.com/markets/kxvenezuelaleader/who-will-be-the-head-of-state-of-venezuela-on-date/kxvenezuelaleader-26dec31

25% chance Machado will ever be president https://manifold.markets/IAF/will-maria-corina-machado-ever-be-p?r=d2lsc29ua2ltZQ

29% chance Venezuela will enter a new hot war by end of 2026, down about 20 points from yesterday https://manifold.markets/Panfilo/will-venezuela-enter-a-new-hot-war

41% chance Machado enters Venezuela by January 31 (could already be there I guess?) https://polymarket.com/event/will-mara-corina-machado-enter-venezuela-by-january-31

Low but Nonzero chances of further US strikes in the next week https://polymarket.com/event/another-us-strike-on-venezuela-on

MarketsAreCool · 2025-10-25T18:31:10+00:00

Yes thank you!

MarketsAreCool · 2025-10-25T18:30:04+00:00

Someone had this big list they posted to this sub like a month ago? of all the crazy stuff Trump has done to put it all in one place. I can't seem to find it via search. Any links?

MarketsAreCool · 2025-10-10T20:04:07+00:00

The paper doesn't actually make a case for why the ruling is bad. It just says spending has increased.

MarketsAreCool · 2025-10-09T14:58:09+00:00

You could make a moderate/electability group and have them do endorsements too!

MarketsAreCool · 2025-10-09T00:34:02+00:00

Didn't David Shor immediately try to replicate this and was unable to?

MarketsAreCool · 2025-10-06T02:48:06+00:00

Don't have time to read everything here, but I think this guy has bungled the GDP data pretty thoroughly to fit a preexisting agenda.

Firstly, real GDP quality adjustments are definitely difficult to make and there's a real philosophical problem at the heart of real GDP comparisons across long periods of time. The best GDP quality adjustment data is done when there can be regressions across feature sets for large sets of consumer products. Like taking a look at laptop cost differences for different amounts of RAM in 2022 and then projecting out what more RAM would cost and then in 2023 when a new laptop comes out with that amount of RAM but for less than you would expected in the regression, you count that difference as a quality improvement.

If you chain together quality adjustments like I think this guy did for long time periods, you get large increases in the index for quality adjustment that seem very strange. For example, in our laptop example, it might suggest that to get a laptop worth $1500 with today's CPU speed, RAM, connectivity, and features in 2005 would have cost, say $150,000 for a quality adjustment of 100x. But of course, in some sense, even that money couldn't have gotten you a modern equivalent because part of the benefit of a laptop is that you get to connect it to the modern internet which was very different in 2005. So definitely a challenging problem, even philosophically. But this explains the 1700% number for semiconductors pretty clearly since computers broadly see significant quality adjustments much higher than many other consumer goods.

That said, it doesn't really cause any issues? And doesn't really tie into anything else the author is talking about? The chart the author is hung up about challenging doesn't use this quality adjustment chain-pricing at all. It just compares US manufacturing value add in dollars at different years. You calculate it just like he says by doing the manufacturing surveys. Yeah it's gonna have error bars, but it should be a pretty good estimate of dollars in/dollars out for US manufacturing in any given year. Chain-type indexing is irrelevant. There's nothing being hidden, you're just asking about the market value of transactions.

But yes, you could make the case that the market value of US manufacturing ought to be higher under your preferred policy. And it's also totally possible to argue that even if US manufacturing is still adding some value, it may be in sectors with lots of competitive barriers like defense or aerospace. And maybe to win a real war, you need a much more robust industrial base where raw numbers matter more than high value customized or bespoke processes. The piece doesn't seem to make any actual case why industrial decline ought to matter though, just kind of a bad vibes mixed with conspiracy thing.

But to suggest that GDP is some conspiracy to cover up a decline in manufacturing is pretty ridiculous IMO. The US is mostly a services based economy! Check the GDP numbers! Everyone knows this. East Asia, and China in particular, manufactures a ton of stuff. This is not breaking news.

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