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Comment author: Lumifer 09 November 2016 03:56:30PM 0 points [-]

What matters is the "socially-necessary" labor

Yes, that's still classical Marxism, isn't it?

But the question is, what does using this framework give you? Which falsifiable predictions flow out of it, predictions which are contested by mainstream economics? As you recall, Marx predicted how history will develop and he turned out to be wrong.

Your answers tend to follow the first iron law of the social sciences: "Sometimes it's this way, and sometimes it's that way." and sure, the future is uncertain, but then why is the Marxist theory of value better than any other one?

I appreciate you giving a specific scenario for the world economy, but it looks entirely mainstream to me. I doubt you will have trouble finding conventional economists who will look at it and nod, saying "Yep, that's very likely". Though you might keep in mind that post-2008 the central banks around the world have dumped huge amounts of money into their economies, amounts that many if not most economists thought would trigger significant inflation. And... it didn't happen. At all. So that "fear of depreciating paper currencies with respect to commodity-money" could be baseless. Or maybe not X-D -- macroeconomics is really in disarray these days.

Comment author: Matthew_Opitz 10 November 2016 04:56:59PM *  0 points [-]

What does this framework give me? Well, I bet that I'll be able to predict the onset of the next world economic crisis much better than either the perma-bear goldbugs of the Austrian school, the Keynesians who think that a little stimulus is all that's ever needed to avoid a crisis, the monetarists, or any other economist. I can know when to stay invested in equities, and when to cash out and invest in gold, and when to cash out of gold and buy into equities for the next bull market, and so on and so on. I bet I can grow my investment over the next 20 years much better than the market average.

There are plenty of mainstream economists who will warn from time to time that there might be a recession approaching within the next few years. But what objective basis do they ever have for saying this? Aren't they usually just trying to gauge fickle investor and consumer "animal spirits"? And how specific and actionable are any of their predictions, really? Can an investor use any of them to guide trades and still sleep well at night and not feel like a dupe who is following some random guru's hunch?

To time the cycles, I do not need to rely on fickle estimations of consumer confidence or any unobservable psychology like that. There are specific objective numbers that I will be keeping an eye on in the coming years—indicators that are not mainstream, including Marxist authors' estimations of the world average rate of profit, the annual world production of physical gold, and the annual world economic output as measured in gold ounces (important!). No mainstream economist that I know—even Austrian goldbugs—think that world gold production has a casual role in world economic cycles.

If this sounds cuckoo, I suggest reading these two short articles: "On gold's monetary role today" https://critiqueofcrisistheory.wordpress.com/a-reply-to-anonymous-on-golds-monetary-role-today/ "Can the capitalist state ensure full employment by providing a replacement market?" https://critiqueofcrisistheory.wordpress.com/can-the-capitalist-state-ensure-full-employment-by-providing-a-replacement-market/

Yes, it does not surprise me that most economists were wrong about the expected inflation from quantitative easing. They could not foresee that most of this money would not enter circulation or act as a basis for additional multiples of credit creation on top of it that would enter circulation. They could not foresee that this QE money would sit inert for the time being as "excess reserves" due to central bank payment of interest on these excess reserves that was competitive with other attainable interest rates on the market. In reality, these excess reserves—so long as interest is paid on them—are not typical base money, but instead themselves function more like interest-bearing bonds. Heck, I didn't even have to know anything about Marxism to anticipate that!

Now, here's a concrete prediction: if the Federal Reserve were to decide to cease all payment of interest on excess reserves without also at the same time unwinding the QEs, leaving a permanently-swollen monetary base of token money that then has the incentive to be activated as the basis for many multiples of loans to be made on top of it—then you will see continued depreciation of the dollar with respect to gold.

Thankfully, though, I am not relegated to trying to mind-read what the Federal Reserve will do because my strategy of trading between equities and gold is only concerned with the relative prices between those two. I will come out ahead in real terms by correctly timing relative changes in their prices, regardless of whatever happens to their nominal dollar prices as a result of Federal Reserve shenanigans. And I would argue that, on average over the medium to long run, the Federal Reserves operations are neutral with respect to these relative prices. The Federal Reserve can change the nominal form of crises (whether they take the appearance of unemployment, dollar-inflation, or some intermediate admixture of the two like 1970s stagflation), but the Federal Reserve cannot actually influence the relative movements of equities and gold. If, thanks to incredibly dovish Federal Reserve policy in response to the onset of a crisis, equities continue to appreciate in dollar terms, gold will be appreciating even more.

Comment author: Lumifer 08 November 2016 04:37:24PM *  0 points [-]

Note that, according to marginalism, profit vanishes at equilibrium and capitalists, on average, earn only interest on their capital.

I don't think that's true, at least once you go beyond simplified intro-to-economics kind of texts. In a very very crude model (which is not specifically marginalist) with no frictions capital costlessly and instantly flows between different applications equalizing their risk-adjusted rate of return. But no one pretends this crude model is anywhere close to reality.

Also, you're not making any predictions. You're making an observation. Plus, of course, the equilibrium is an unattainable state, an attractor for chaotic motion. While you are drawn to it, you never actually get there.

And yes, I would argue that demand does not, in the medium to long-run, influence "value" or "long-run average market price."

That... depends on the context. In a very simplified scenario sure. In a bit more complicated scenario which includes, say, the economies of scale, it does. Consider e.g. the "value" of a widget the demand for which is a couple of dozens a year. It's likely to be very expensive (= high "value") since at such levels of production it's going to be hand-assembled. Now let's say it got popular and you can sell a couple of millions a year. This makes it worthwhile to build a proper assembly line and the widget magically gets much, much cheaper (= low "value"), all because of demand.

Your example of oil is also a bit more complicated. Oil does not have a uniform price of production. Each well has its own. This means that when demand is low, high-cost wells are shut down (and the low-cost wells produce cheap oil), while when demand is high, high-cost wells are drilled and/or reactivated producing expensive oil. In this way demand directly affects the global price of oil. When it's high, low-cost wells make a lot of profit, when it's low, high-cost wells are turned off.

Marx's labor theory of value

You do realize there are reasons why it's not all that popular nowadays? In particular, the notion of value as labour crystallised in the product has a lot of issues. Even Marx himself realized the problems by the third volume of Das Kapital.

But, in any case, you're saying it explains "long-run changes in prices of production and the average world rate of profit"? How does it do that? What does it say will happen during the next couple of decades?

Comment author: Matthew_Opitz 08 November 2016 10:31:51PM 0 points [-]

Yes, I realize that Marx's labor theory of value is not popular nowadays. I think that is a mistake. I think even investors would get a better descriptive model of reality if they adopted it for their own uses. That is what I am trying to do myself. I could care less about overthrowing capitalism. Instead, let me milk it for all I can....

As for "labour crystallised in the product," that's not how I think of it, regardless of however Marx wrote about it. (I'm not particularly interested in arguing from quotation, nor would you probably find that persuasive, so I'll just tell you how I make sense of it).

I interpret the labor-value of something (good or service) as the relative proportion of society's aggregate labor that must be devoted to its production in order to, with a given level of productivity of labor, reproduce that good or service sustainably over the long-term. Nothing gets crystallized in any individual product. That would be downright metaphysical thinking.

After all, just because an individual item has a certain labor-value doesn't mean that it will individually automatically fetch a certain price. It is not the individual labor-value that influences price. A pair of sneakers made by a factory that is half as efficient as the typical sneaker factory does not have twice the labor-value or fetch twice the price. What matters is the "socially-necessary" labor expended on an item. And how can that be perceived? On average in the long-run, if a particular firm's service or production process does not yield an average rate of profit, then that is society's signal, after-the-fact, that some of the labor devoted to that line of production is not being counted by society as having been "socially-necessary" labor. (Of course, technological change can lower the socially-necessary labor for a certain line of production, which will appear as falling prices (assuming a non-depreciating currency) through competition and below-average profits for any firms still using old techniques that waste labor that is now socially-unnecessary).

If business owners were to rely on a crude, metaphysical interpretation of Marx's labor theory of value that assured them that the value was already baked into their product as soon as it rolled off the production line, they would be unpleasantly surprised if it were to turn out that they could not realize the expected labor-value in their product...perhaps due to something like their competitors having, in the intervening time, embarked upon a technological innovation that changed society's unconscious, distributed calculation of what labor was "socially-necessary" for this line of production....

As for your final questions: it's a bit complicated, to say the least. There are even various schools of Marxists that don't agree with each other.

I think there is somewhat of a consensus that there is a real long-term tendency for the (real, inflation-adjusted) world rate of profit to fall, theoretically and empirically, and therefore you can expect there to be an ever-decreasing ceiling on how high (real) interest rates can go during a business cycle before they begin to eat up all of the profit rate and leave nothing for net profit of enterprise, thus precipitating a decline in production and a recession. (Although some Marxists reject that there is a theoretical or empirical tendency for the rate of profit to fall. See Andrew Kliman's book "The Failure of Capitalist Production" if you are interested in this "exciting" debate).

More controversial still is the question of what, if anything, monetary policy can do to influence interest rates and aggregate purchasing power to prevent future recessions. I concur with what I call the "Commodity-Money" school (see Ernest Mandel's work on "Marx's Theory of Money", Sam William's "Critique of Crisis Theory" blog, or the writings of Jon Britton) that argues that there is actually very little that monetary authorities can do to alter the course of business cycles because paper currencies, while they are no longer legally tied to commodity-money, remain tied to commodity-money in a practical sense, and that movements in the world production of commodity-money place practical limits on what authorities governing paper currencies can do.

I don't have the patience to explain all of this here in greater depth when others have already done so elsewhere. Sam Williams's "Critique of Crisis Theory" blog is what I would recommend reading from the top to get the clearest explanation of this stuff.

By the way, my "commodity-money" understanding of Marx's labor theory of value leads me to believe that we are currently entering a boom phase in the business cycle in which equities, on average, will continue to perform well. (I have holdings in Vanguard Total World Stock (VT), for your information. It is a very simple instrument for tracking the world economy with low management fees). So, expect accelerating growth for 3-4 years. Towards the end of that period, I expect an oncoming credit crisis and recession to be heralded by world gold production to start declining slightly and interest rates to be inching upward to a dangerous level infringing on the net profit of enterprise (hence, why a theory of the expected average rate of profit is so useful!)...with little that the Federal Reserve or other monetary authorities will be able or willing to do about it due to the fear of depreciating paper currencies with respect to commodity-money too much. Business will continue to apparently boom for a short while longer, but it will be in its unsustainable credit-boom phase by that point, and it will be time to cash out of equities and into commodity-money (gold).

Comment author: Lumifer 07 November 2016 07:40:02PM 0 points [-]

I would define "value" as "long-run average market price."

Sure. But note that the great majority of people do NOT define "value" like this, so there will be communications problems :-/

So there is "value" which you are saying is basically cost of production (right?) and there is the SPA ("subjective practical advantage") which is just how you feel about things. If I understand you correctly you are also saying there is no link between the two (because demand does not affect the "value"), yes?

This looks like unusual terminology, but are there any significant heterodox statements about reality that you want to make on this basis? Translated into regular econospeak you are saying that demand does not influence the cost of production (subject to quibbles about fixed and variable costs) and I would expect Econ 101 to agree with that. What exactly do you deny in "marginalism"?

I agree that economics (as a field) has a LOT of problems, but what are you suggesting as a solution?

Comment author: Matthew_Opitz 08 November 2016 01:28:13PM *  0 points [-]

Not "cost of production," but "price of production," which includes the cost of production plus an average rate of profit.

Note that, according to marginalism, profit vanishes at equilibrium and capitalists, on average, earn only interest on their capital. I disagree. At equilibrium (over the long-run), an active capitalist (someone who employs capital to produce commodities) can expect, on average, to make a rate of profit that is at all times strictly above the going interest rate. The average rate of profit must always include some substantial amount of "profit of enterprise" to account for the added risk of producing and marketing an uncertain product rather than just being a financial capitalist and earning an interest rate (which carries a typically lesser risk of the default of the debtor). If the rate of profit is not substantially above the rate of interest, over the long run you will see capitalists transition from productive investment into financial capitalists (a problem we have right now). This will eventually decrease the supply of commodities and increase their relative prices until it is once again profitable to produce commodities even after deducting interest.

So, that is one concrete prediction. And empirically, although the averate world rate of profit can sometimes briefly dip negative, it is as a rule on average a substantial positive percentage.

And yes, I would argue that demand does not, in the medium to long-run, influence "value" or "long-run average market price." It's all about the price of production instead. The practical advantage of this is that this opens up opportunities for arbitrage against other people who don't realize this. For example, if it is 2007 and you see demand for oil surging and the price skyrocketing, you should keep in mind that the price of production of oil has probably not changed that much (excepting the fact that some of the new oil being brought online was shale oil that had a higher price of production), and thus oil will be making above-average profits at these prices. You can then expect investment to flood into oil production over the next ~5 years, thus increasing supply and bringing the market price of oil down to (or even temporarily below) the price of production. If I had had some money back then instead of being in high school, and if I had known what I know now, I am confident that I could have made some serious money on some sort of long-term oil future betting. Note that, now that I do have a little bit of money, I am indeed making plays in the market right now based on my analysis, although I won't go into specifics about what those are right here...

Note that, so far, we have been taking the price of production of various things and the average rate of profit as readily-discernable "givens" at any point in time. However, prices of production and the average world rate of profit can change as well over the long term.

Even the classical economists didn't really have a theory for what determined these changes. (For example, Adam Smith could tell you that the cost of production was the rent + capital + wages that, on average, was needed to produce something, but how can you anticipate changes in the costs of each of those? And then you need to add on the average rate of profit, but how can you anticipate how the average rate of profit of the world economy will evolve?)

So far, the only theory that I have seen that even tries to explain long-run changes in prices of production and the average world rate of profit is Marx's labor theory of value. For example, see: https://critiqueofcrisistheory.wordpress.com/responses-to-readers-austrian-economics-versus-marxism/why-prices-rise-above-labor-values-during-a-boom/

Note that you don't have to buy into Marx's labor theory of value to do medium-run arbitrage involving prices of production. All you need is classical economics for that.

Only if you wanted to do very long-run arbitrage that took into account technological change and the resulting increases in the productivity of labor in certain sectors—and thus declining production prices for those commodities and a long-term tendency for the worldwide average rate of profit to fall as the so-called "organic composition of capital" increases—then you would have to rely on Marx's labor theory of value or some other yet-to-be invented theory that could attempt to forecast changes in prices of production and the average worldwide rate of profit.

Comment author: Lumifer 07 November 2016 03:56:57PM 0 points [-]

against both the subjective theory of value

Which value? How do you define "value" in this context?

failure of modern economists to utilize the concepts of use-value and exchange-value as separate things

In which way is it a failure? Who, among modern economists, consistently confuses the two?

Comment author: Matthew_Opitz 07 November 2016 06:57:57PM *  0 points [-]

For the purposes of this discussion, I would define "value" as "long-run average market price." Note that, in this sense, "use-value" has nothing whatsoever to do with value, unless you believe in the subjective theory of value. That's why I say it is unfortunate terminology, and "use-value" should less confusingly be called "subjective practical advantage."

Which economists confuse the two? The false equivocation of use-value with exchange-value is one of the core assumptions of marginalism, and pretty much everyone these days is a marginalist of some sort, so it would be easier to name economists that didn't confuse the two: Steve Keen and Anwar Shaikh are the first two that come to mind. Any Marxist economist will have a good grip on the distinction, so that would include people like Andrew Kliman and Michael Roberts as well.

Comment author: Lumifer 04 November 2016 03:47:40PM 0 points [-]

You seem to be demolishing some straw.

The example of needing toothpaste and buying shampoo because it also costs $5 is ridiculous and is understood by all to be ridiculous. I don't really see the need for multiple paragraphs explaining the difference between personal value and market value.

Econ 101 will agree with you that the equilibrium price is the cost of production plus some minimal profit. It might point out, though, that given the difference between the fixed and variable costs the scale of production matters.

What is the non-straw position that you are arguing against?

Comment author: Matthew_Opitz 05 November 2016 02:17:31PM *  0 points [-]

I was arguing against both the subjective theory of value, and the failure of modern economists to utilize the concepts of use-value and exchange-value as separate things.

Comment author: Matthew_Opitz 04 November 2016 03:30:46PM 0 points [-]

I know that the main thrust of the article was about vote trading and not marginalism, but I just have to blow off some frustration at how silly the example at the beginning of the article was, and how juvenile its marginalist premises are in general.

There has been a real retrogression in economics ever since the late 1800s. The classical economists (such as Adam Smith and David Ricardo) were light years ahead of today's marginalists in, among other things, being able to distinguish between "use-value" and "exchange-value," or as I like to call them, "subjective practical advantage" vs. "social advantage."

A lawn-mower might have both a subjective practical advantage and a social advantage. If you have grass in your yard, a lawn-mower might have a subjective practical advantage in being able to cut the grass. And yet, maybe it is an old model that nobody else is interested in, and therefore there is almost no social advantage to owning that lawn-mower (little to no price that one can fetch for it).

Likewise, vice-versa. If, for some reason, all of your grass died, or if you decided to pave over your lawn with a parking lot, then your lawn-mower would probably not have any more subjective practical advantage (unless you could cleverly think of something else to use it for). But it still might have a very important social advantage if others might want to buy it from you. So, you might continue to hoard it (instead of immediately throwing it in the dumpster), in anticipation of having a chance to sell it soon.

Nor do use-value and exchange-value scale in the same fashion. 1000 lawn-mowers is not necessarily 1000x more useful to an individual in a subjective, practical sense. But 1000 lawn-mowers certainly IS 1000x more useful to an individual in terms of exchange-value (assuming that the total size of the market for lawn-mowers is orders of magnitude larger than 1000 lawn-mowers, and thus the seller of these 1000 lawn-mowers forms a negligible part of the overall supply of lawn-mowers. Whereas, if the lawn-mower market is extremely small, then yes, it is possible that the price of 1000x more lawn-mowers will not scale linearly). THIS discrepancy between how use-value scales and exchange-value tends to scale is—contra the early marginalists like Carl Menger and Eugen von Böhm-Bawerk—the basis for the "double-inequality" that causes people to trade—NOT different valuations of how useful something is.

The ECON 101 that is taught nowadays gets this most basic thing wrong: medium-run market prices are NOT determined by demand or subjective desire for a commodity, ONLY by the conditions of supply.

Yes, in the short-run, supply is fixed, and the market price will vary according to demand. But in the medium-run, investment can re-allocate from lines of business that yield below-average profits to lines that yield above-average profits.

Therefore, if interest in a product or service suddenly declines, yes, in the short-run the price will drop. But that will mean that the producers of that product or service will be making below-average profits, or even losses, on that good or activity. They will re-allocate to other activities. Soon the quantity produced will adjust downwards, restricting the supply until the price of the product or service equals once again the cost of production + average rate of profit (what classical economists called the "natural price" or "price of production"—the long-term price needed to sustainably incentivize members of society to continue to reproduce the good or service. (Note that this is different from the "cost-price" that the producer pays, as the price of production also includes an average rate of profit, and note that this only applies to "commodities," meaning, things whose production can be increased and decreased with investment. Priceless, one-off works of art and other such novelties have their supply fixed and only respond to changes in demand).

So, subjective consumer desires, in the medium-run (3-5 years) have nothing to do with the market prices of commodities. The market prices of commodities will, instead, tend to fluctuate around the price of production, and the only thing that consumer desires dictate is what quantity will be produced around that price of production. The only thing that really matters, in the medium-run, is how many consumers are willing to pay the price of production for that product. You can, for the medium-run, forget about the rest of the demand curve (how many people would be willing to buy at half the price or double the price, etc.).

So, in short, it should be obvious why buying $5 worth of toothpaste is different from buying $5 worth of shampoo. They have equal spot exchange-values (and probably similar prices of production if their prices tend, over the medium-run to fluctuate close to each others'), but they do not necessarily have equal use-values to a particular individual at a particular time. One must weigh the use-value of the $5 before spending it, which means considering all of the other things that one could spend that $5 on then or in the future, and all of these possibilities will have different use-values, albeit the same exchange-value. Only if toothpaste is the best use of that $5 at that point for that individual will that individual want to buy toothpaste.

Use-value vs. exchange value, and the OBJECTIVE medium-run determination of price according to price of production (NOT SUBJECTIVE!) was all understood perfectly well 200 years ago, and yet now this probably sounds like some sort of crackpot ranting. It's not. Trust me, it's all there in the writings of the classical economists themselves, who were head-and-shoulders above the charlatans in mainstream economics today.

Although I am not a neoreactionary, I do tend to sympathize from time to time with their view that, despite all of our technological ease, we are really living in an era of intellectual and social decay....

Comment author: Matthew_Opitz 23 April 2016 04:09:11PM *  4 points [-]

There are also some examples of anti-sleepwalk bias:
1. World War I. The crisis unfolded over more than a month. Surely the diplomats will work something out right? Nope.
2. Germany's invasion of the Soviet Union in World War II. Surely some of Hitler's generals will speak up and persuade Hitler away from this crazy plan when Germany has not even finished the first part of the war against Britain. Surely Germany would not willingly put itself into another two-front war even after many generals had explicitly decided that Germany must never get involved in another two-front war ever again. Right? Nope.
3. The sinking of the Titanic. Surely, with over two and a half hours to react to the iceberg impact before the ship finished sinking, SURELY there would be enough time to get all of the lifeboats safely and calmly loaded up to near max capacity, right? NOPE. And going even further back to the decision to not put enough lifeboats on in the first place...SURELY the White Star Line must have a good reason for this. SURELY this means that the ship really is unsinkable, right? NOPE.
4. The 2008 financial crisis. SURELY the monetary authorities have solved the problem of preventing recessions and smoothing out the business cycle. So SURELY I as a private trader can afford to be as reckless as I want and not have to worry about systemic risk, etc.

In response to comment by gjm on Suppose HBD is True
Comment author: OrphanWilde 21 April 2016 05:51:37PM -1 points [-]

Further: let's suppose, at least for the sake of argument, that you're very nearly right, that in our hypothetical HBD-is-right world you get scarcely any extra useful information from a person's race once you've looked at a few other equally trivial characteristics.

The issue isn't that there isn't extra useful information, the issue is that we're pretty terrible at quickly processing variable dependence to arrive at correct answers, where rapid processing is part of the situation in consideration.

In that kind of situation, clothing alone will tell you more than clothing plus race - not because you couldn't arrive at a better answer given more information, but because the additional information is almost certainly going to be overweighted by virtue of the brain not having a good intuitive handle on either dependent variables or small numbers.

Comment author: Matthew_Opitz 22 April 2016 02:54:51PM 1 point [-]

I don't know...would clothing alone tell you more than clothing plus race? I think we would need to test this.

Is a poorly-dressed Irish-American (or at least, someone who looks Irish-American with bright red hair and pale white skin) as statistically likely to mug someone, given a certain situation (deserted street at night, etc.) as a poorly-dressed African-American? For reasons of political correctness, I would not like to share my pre-suppositions.

I will say, however, that, in certain historical contexts (1840s, for example), my money would have been on the Irish-American being more likely to mug me, and I would have taken more precautionary measures to avoid those Irish parts of town, whereas I would have expected the neighborhoods inhabited by free blacks to have been relatively safe.

Nowadays, I don't know what the statistics would be if you measured crimes perpetrated by certain races, when adjusted for socio-economic category (in other words, comparing poor to poor, or wealth to wealthy in each group). But many people would probably have their suspicions. So, can we test these intuitions to see if they are just bigoted racism, or if they unfortunately happen to be accurate generalizations?

Comment author: TheAncientGeek 22 April 2016 11:36:49AM *  0 points [-]

Are US employers forbidden from setting all meet based tests, or just IQ tests?

Because task-specific tests aren't just an alternative to IQ tests, they're a better alternative in almost every case.

Comment author: Matthew_Opitz 22 April 2016 02:32:49PM 0 points [-]

True in many cases, although for some jobs the task might not be well-specified in advance (such as in some cutting-edge tech jobs), and what you need are not necessarily people with any particular domain-specific skills, but rather just people who are good all-around adaptable thinkers and learners.

Comment author: knb 20 April 2016 12:30:28AM 2 points [-]

Looks like Andrea Rossi's E-Cat cold fusion scam is finally reaching its end-phase. Some previous LW discussion here, here and here.

Comment author: Matthew_Opitz 21 April 2016 10:57:33PM 2 points [-]

Yeah, what a hoot it has been watching this whole debacle slowly unfold! Someone should really write a long retrospective on the E-Cat controversy as a case-study in applying rationality to assess claims.

My priors about Andrea Rossi's claims were informed by things such as: 1. He has been convicted of fraud before. (Strongly negative factor) 2. The idea of this type of cold fusion has been deemed by most scientists to be far-fetched. (Weakly negative factor. Nobody has claimed that physics is a solved domain, and I'm always open to new ideas...)

From there, I updated on the following evidence: 1. Rossi received apparent lukewarm endorsement from several professional scientists. (Weakly positive factor. Still didn't mean a whole lot.) 2. Rossi dragged his feet on doing a clear, transparent, independently-conducted calorimetric test of his device—something that many people were willing to do for him, and which is not rocket science to perform. (Strongly negative factor—strongly pattern-matches with a fraudster). 3. Rossi claimed to have received independent contracts for licensing his device. First Defkalion in Greece, then Industrial Heat. Rossi also made various claims about NASA and Texas Instruments being involved. When investigated, the claims about the reputable organizations being involved turned out to be exaggerations, and the other partners were either of unknown reputation (Defkalion) that quickly disappeared, or had close ties to Rossi himself. Still no independent validation. (Strongly negative factor).

And now we arrive at the point where even Industrial Heat is breaking ties with Rossi. What a fun show!

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