Tuesday Morning Links

• Before heading to the Chamartín high-speed rail station this morning I took a nice walk down to the Royal Palace. As a frequent traveler to continental Europe, I am always impressed with the cleanliness and order of many European cities. I saw municipal workers sweeping up leaves and cigarette butts (no leaf blowers). The other striking feature is the absence of homeless people. Like most of its EU partners, Spain is a liberal democracy; yet its streets are free of the homeless and the associated litter and human waste matter. There’s something terribly wrong with the governance of most US cities. It’s not fair to ascribe this to liberal leadership; rather, it’s what I call “abdicationism”, the willful refusal to police the existing laws, thus making life miserable for law-abiding citizens. [Curated Carlos]
• Murkowski is often described as one of the Senate's most moderate Republicans and as a crucial swing vote. According to CQ Roll Call, she voted with President Barack Obama's position 72.3% of the time in 2013; she was one of only two Republicans to vote with Obama over 70% of the time. She opposed Brett Kavanaugh's Supreme Court nomination in 2018 and supported Ketanji Brown Jackson's Supreme Court nomination in 2022. In 2021, she was one of seven Republican senators to vote to convict Donald Trump of incitement of insurrection in his second impeachment trial; she was censured by the Alaska Republican Party for casting this vote. [Lisa Murkowski]
• The company benefits from two network effects. The first occurs at the exchanges themselves, which are global, two-sided networks that connect buyers and sellers of futures and options contracts and provide them with unrivaled liquidity. This two-sided network effect is further strengthened by the nature of the futures contracts traded on the exchanges. For most assets, traders have no restrictions on where they can buy and sell them. For instance, if a trader buys Microsoft stock on the NASDAQ, he or she can subsequently sell it on any number of exchanges or on increasingly popular alternative trading systems (ATS) such as dark pools and electronic communication networks (ECN). In fact, ATS platforms have become so popular that, as of April 2019, traders chose to execute nearly 39% of all their U.S. stock trades on them. Futures contracts are different. Futures contracts opened on one exchange cannot be closed at another exchange, making it much harder for competitors to successfully develop alternative sources of liquidity for futures buyers and sellers. [YCG Investments]
• Clinton claimed that the protesters simply didn’t want to know the facts, as evidenced by the vehemence of their clamor: “They won’t hush. When someone won’t hush and listen, that ain’t democracy. They’re afraid of the truth. Don’t be afraid of the truth.” Of course, one could perhaps take issue with Clinton’s equation of hushing and democracy (“Hush and Listen” sounding like the official slogan of a folksy police state run by bayou Stalinists). [Jacobin]
• An American economist, I think it was, once remarked that a single servant is worth a household full of appliances; in my experience, he was absolutely right. To be relieved of the tedium of looking after oneself, and of the day-to-day tasks that can make life such a trial and a bore, is to enter a state of near-bliss. One of the reasons that some of our polymathic ancestors were able to achieve so much was that they never had to do anything for themselves. But there are also difficulties with servants. No man, said Napoleon, is a hero to his valet; and a servant is inclined to know more about you than you might wish him (or anyone else) to know. [The New Criterion]
• It’s not that people don’t like dogs anymore, but the unwavering loyalty toward dogs (especially juxtaposed with a so-called Karen) has come to an end. People may still like dogs, but not all dogs, and certainly not all dog owners. A couple ignoring trail rules to bring an emotional support dog on their hike is no longer the default good guy. The vibe shift against dogs is here—and it’s not just about dogs. It’s about society, families, and what constitutes “order.” I’ve noticed this shift myself. I’ve never been a Dog Person, but I’ve always appreciated dogs from afar. I grew up with a dog I loved. I don’t want to own a dog, but if a friend has a dog I’m happy to interact with it. I think most dog owners are good people who follow the rules. But rules that relate to dogs—barring them from specific locations, or requiring leashes—exist for a reason. And society seems to be getting a bit collectively annoyed by the small but very visible group of dog owners who think these rules don’t apply to them. [Cartoons Hate Her]
• Mortgage rates have soared in recent years, and new mortgage initiations have plunged and stagnated. Very few can afford to buy homes given sky-high prices coupled with nearly 7% interest rates on mortgages. At the same time, very few homeowners want to sell, since it would mean giving up their 3% mortgages. This is an unstable situation that will eventually be resolved by falling home prices and/or falling mortgage rates. [Scott Grannis]
• I've written several times about my admiration for Argentina's Javier Milei (see MAGA down south). Many called him crazy, but he, like Trump, overcame seemingly insurmountable odds to beat the candidate of the ruling party. Argentina was teetering on the precipice of an economic collapse, and now, after just one year of Milei's ministrations, inflation has been radically downsized, from 25.5% per month when he assumed office a year ago to only 2.7% last month, and the economy is once again growing, with some projecting real GDP growth of almost 10% in the coming year. Confirming the dramatic improvement in the outlook, the free market peso (the "Blue" dollar) has been almost unchanged over the past year (see Chart #1), and the Argentine stock market (using ARGT as a proxy) has surged by almost 75% in the past year in dollar terms. [Scott Grannis]