Friday, July 31, 2015

The Lessons of Cecil the Lion

H/T to Michael Bane for posting a link to Captain Capitalism on the whole Cecil the Lion affair.

In a week where the undercover videos of the horrific things happening at Planned Parenthood kept getting more and more disturbing, the Networks went into panic mode about Cecil and ignored the sale of aborted baby parts.

Regular readers will know that I'm not a hunter, and that I have cats, so I'm especially unlikely to go hunting a cat.  Dropping about $60 or $70,000 to go shoot a lion is nowhere on my list of things I'd like to do.  On the other hand, I know enough about this stuff to know that you don't just fly to some place in Africa, grab your gun off the plane and "go shoot you a lion".  You pay big fees and have to be led by local guides; you can only hunt in managed areas for managed animals for a trophy.  When I heard that this dentist had killed this "celebrity lion", I immediately figured the guides must have done something really wrong and the first thing I heard about the incident (aside from that it happened at all) was that the guides were under investigation.  The dentist may well have shot the arrow, but the fault is the guides'. 

But the outrage against the dentist who bow hunted the lion has been nothing short of complete, unbridled rage, with death threats, horrible insults being thrown at him online, and more.  The guy basically has had to go into hiding, close his office, layoff his staff, and abandon his patients; the crowd rage has hurt a lot of other people.  We've seen glimmers of this before, some of which I wrote about here, for example.  But here's where Captain Capitalism did something more constructive than I did.

Teh interwebz were having none of it.

And there's a couple of big lessons here.


Plan accordingly.
Consider that this is a group of people who would kill someone or just ruin their life because they were involved in a tragic mistake on another person's part (the guides in this case) but the group doesn't care at all about the killing and dismembering of humans for profit.  It's hard to argue they're fit to make the important decisions incumbent in a democratic republic. 

(Glen McCoy

As Captain Capitalism says, prepare for dealing with the zombie hordes.  For real.

Wednesday, July 29, 2015

When Figuring The Distortions From Central Banks..

Don't forget that they've changed the very nature of the stock markets. 

The Hildebeest made an anti-freedom speech the other day in which she promised to impose much higher taxes on those who hold stocks for less than two years, branding it "short termism" and "quarterly capitalism" - as if she or any other clown in the should be able to decide how long you should hold onto any investment.  People should be able to hold an investment for however long suits them; if they're 40 years from retirement I'll bet they're more friendly to holding stocks longer than someone that's two years away.  The issue of the microsecond traders is only a minor side note to this.  Why is it better for the economy to hold on to a stock for 2 years and 1 day than to hold it 1 day less than 2 years?  Or even six years versus 2 years?  What does it accomplish except hurt certain people? 

First off, it's laughable she'd imply she's going to do anything the big banks and brokers oppose.  She's clearly steering hard left because she's afraid the commie will suck votes away from her and affect her air of inevitability.  But it's hard to imagine a bigger crony to Wall Street than any Clinton.  She is absolutely not going to do anything to damage the ones who have funded her so greatly.   

But on another level, the distortions caused by the central banks are the biggest reason for this whole way of working.  In the 19th-century, Swedish economist Knut Wicksell explained that when you push lending rates below their “natural rate” – the rate determined by the return on capital – you get distortions.  Instead of doing the hard work of improving the business, and being more innovative, they can borrow money for next to nothing and go try to find something with a higher yield.  The central bank manipulations encourage this short termism. 
As a politico with long track record of wanting to micromanage every aspect of everyone's lives, Hildebeest is responsible for the very thing she's trying to punish. 

Tuesday, July 28, 2015

Techy Tuesday - Spam Drops to Lowest Level Since 2003

I stumbled across this story through a tech email I get, MakeUseOf, and they report that a Monthly Threat Report from Symantec says spam email accounted for 49.7% of internet email traffic in June.  This marks the lowest level since 2003, and is remarkably low compared to an all-time peak of 90% in June of 2009.  I know I haven't heard of any number that low being thrown around as the percentage of spam in email traffic.

This is great news for not just email users but companies that are dedicated to fighting spam. Their business isn’t going away anytime soon, but they are making progress.
But keep on top of the security upgrades for your computer, no matter what flavor you use.  Symantec also reports there were 57.6 million new malware variants created in June, up from 44.5 million pieces of malware created in May and 29.2 million in April.  The number of attacks from a nasty type of malware called Ransomware have increased for the second month in a row and the number of attacks by a particularly insidious version called crypto-ransomware reached its highest levels since December 2014.

This struck me as interesting.  Hope you find it interesting, too. 

Monday, July 27, 2015

Inside the Orion Space Capules

Let's lighten things up a little, since yesterday's post on the currency wars and efforts to end the dollar's reign as the world's reserve currency is kind of depressing.  It would lead to a pretty massive destabilization of the US, and you've got to believe a lot of people would die. 

How about a tour of the developing Orion capsules' prototype interior, courtesy of Design News magazine?  If you'll recall, the Orion capsule had its maiden voyage last December and is currently in the running to be the ultimate vehicle which will carry man to Mars (assuming it gets chosen over the competing designs). 
The displays in the capsule are going to be glass cockpit, instead of knobs and switches.  Cool?  Maybe.  Switches and hardware have the side effect of focusing the designers on the interface, and making them consciously choose every control they need and where it goes, with the stark realization that they can run out of panel space.  Glass cockpits with the infinitely reconfigurable options software engineers have can generate so many options the controls become less usable, especially in a crisis when multiple alarms are going off and they're looking at unfamiliar displays.  In an effort to make the system more user-centric, they can end up making it user-hostile. 

There's an interesting thread of ideas in the comments too. The idea is that space flight ends up being less like a test pilot's flights - a few hours in a new plane to work out kinks - and more like submarine missions.  A test pilot can often punch out; pull the handle and exit the plane.  A submariner will generally be on a mission for months in a very hostile environment, and they generally can't  punch out.  Submariners either resolve their problems or go down with the ship - sometimes suddenly and with no time to figure things out.  Astronauts, as we've seen too often in the last 30 years, also go down with their ship suddenly, with no time to do anything about it. 

Go read...

Sunday, July 26, 2015

The Attack on Precious Metal Prices

Gold hit a five year low this week, and the intra-day low on Monday was the lowest price in 13 years.  If you watch "technical analysis" (my definition: drawing lines on charts and thinking they mean something), you'll know that by going below $1100/oz, it solidly broke the "support line" at $1130, which was thought to be a dependable "floor" to the price.

So what's going on?  Keith Fitz-Gerald, writing at Bonner and Partners, says it was nothing less than a coordinated bear attack.  Bill Holter, writing at Jim Sinclair's Mineset agrees (H/T to Western Rifle Shooters Association).
If you’ve just joined us, a bear raid is a highly technical tactic typically used by large institutional traders or “short and distort” artists. The goal is to create windfall profits though short sales, options, futures contracts, currencies, and whatever else can be brought to bear.
First off, a little perspective.  A lot of gold was sold; far, far more than on a typical day.  More than 3 million lots traded on the Shanghai Gold Exchange; a normal day is less than 30,000 lots; 1/100 the amount traded on Monday.  
Why Monday?  Monday’s raid was carefully timed to exploit low-liquidity conditions; lots of contracts but not much liquidity lying around as the owners of those contracts probably had to cover losses from the Chinese crash or lower market prices everywhere else. There were no economic reports or industry-significant events when it hit.  Also, Japan's market was closed and they could have affected the outcome of the raid if they didn't want to play along or fought hard to bid up the price.

Who could affect that much gold sales?  Zerohedge reports a "hunt for the mystery leader of the bear raid" has begun, but from what I've heard, they typically don't find anyone.  A few of the major Exchange Traded Funds (ETFs), or "paper gold" traders, and a handful of nations could sell that much gold without hurting.  China, notably, has been buying gold for quite some time, and as Holter points out, needs to reach a certain percentage of gold holdings to be admitted to the International Monetary Fund's Special Drawing Rights (around 2.7% of GDP in gold seems to be where the IMF is happy).  You've probably seen the warnings posted as adverts for somebody's products which say that a major currency disruption is coming in October.  One line of thought is that the IMF is going to switch the world to their SDRs as the reserve currency and abandon the dollar.  SDRs are the currency of last resort as it hasn't been reduced in value by over printing like ours, and most of the rest of the currencies in the world.  As Holter puts it:
As a theory, most believe the 600 tons of gold announced by China last week was the reason for the Sunday/Monday drop.  This I believe is correct but for 180 degree wrong reasons.  Many were shocked and disappointed at the number of only 600 tons.  It truly is laughable as it represents about 3 months worth of gold China currently imports and has been for over 5 years.  I believe they made this announcement for two reasons.  First, they needed to show more gold in order to be considered by the IMF for inclusion into the SDR this fall.  I also believe they wanted to show a lower number so as not to spook gold higher as they are clearly a buyer each month.  If you are a buyer, why press the price higher as long as you are receiving delivery? 
The Chinese have been increasing their gold supplies for years now.  During some periods in 2013, for example, they bought every ounce of gold produced in the world.  Could the Chinese have enough gold to sell off 3 million lots on the Shanghai Exchange and run the bear attack?  Why would they want to?

Aside from the short term "let's make a metric butt load of money" aspect, Holter sees it not as part of the ongoing currency wars we've been in for a while, but as opening salvos of World War III.
Going a step further and tying this all together we can see several things happening.  China is now witnessing an unprecedented capital outflow while the U.S. dollar has gotten stronger.  A strong U.S. dollar is textbook warfare against Russia and aimed at tightening the screws further both financially and economically. We have heard from Sergei Glayzev on several occasions, Russia/Mr. Putin plan on dropping a financial and moral “truth bomb” on the United States.  They will only be pushed so far, I believe some sort of data dump can be expected at any moment.

If you look at this from the standpoint of “war”, these are all chess moves between those issuing a fake currency and those wanting to do real trade with real settlement.  Did the U.S. just “punish” China for being a gold buyer and making an announcement (even though miniscule)?  I think this can be looked at as the Western banks are short paper gold derivatives and long dollars whereas the East is long real metal and desirous of leaving the Western banking system behind.  There is no other reason China and Russia would have set up trade banks, clearing systems, currency hubs etc. all over the world if they did not expect to use them.  This is a war between the West wanting to prolong their own current fiat system and the East wanting to move away to one that is equitable to all involved.
This has, of course, spread to silver as we talked about Monday, after all this manipulation took place.  The US Mint suspended sales of silver eagles before all this started, and I'm reading reports that many (all?) silver sellers are either refusing orders or talking about long lead times; like two or three months.  That's a physical shortage if there ever was one.  Fitz-Gerald suggests that the ease with which gold was brought below its resistance line is an indication there might be more losses yet to come.  It's an absolute truism that you want to buy when "there's blood in the streets".  If you're interested in having gold, the streets are either bloody right now, or they're going to get bloody soon.   

Last words to Bill Holter at Jim Sinclair's Mineset:
We are already in WW III.  It is because of and being waged in financial assets.  It is clear to me the U.S. is in panic mode and trying to break the long term bull trend in gold.  If the trend cannot be broken, the dollar will be zeroed out.  Unfortunately, both sides know this full well.  The military warnings of late from both Russia and China have become much louder and the actions and movements by the U.S. (staging in Turkey for Syrian raids for example) much more dangerous.  As I see it, the U.S. “needs” war to cover many dirty financial tracks.  China/Russia on the other hand may try to prevent war by releasing “the truth” and thus crippling the U.S. financially and thus the ability to wage aggression.  The problem as I see it is the world is too far along technologically and the days of having to pay and fund an army long term is behind us.  Now, “kicking the table over” is a simple as pushing a button.  Unfortunately, this may be the only remaining choice for the U.S. in the financial collapse I see coming.

Saturday, July 25, 2015

The Coming Industrial Revolution






Friday, July 24, 2015

California Tree Humpers Huggers

Leave it to Berzerkley.  The University of California at Berkeley, AKA The People's Republic of Berkeley.

According to several news reports (H/T to Daily Caller), Activists at the University of California at Berkeley got naked on Saturday to show their love for nearby trees that authorities are planning to cut down.
About 50 people showed up at a grove of eucalyptus trees on the campus of UC-Berkeley, stripped off their clothes, and began to intimately interact with the trees in the grove for the benefit of photographer Jack Gescheidt.
Eucalyptus trees?  They're an invasive species in California, and are targeted for control by UC Berkeley, the city of Oakland and the East Bay Regional Park District.  We had a pair of them here at "Castle Graybeard" when we first moved in and for our first 10 years or so, eventually cutting them down and replacing them with a native oak tree.  Eucalyptus trees are messy, dropping sheets of bark, and lots of branches of all sizes on a regular basis.  My final incentive to remove them was when a branch about 3" in diameter came falling down and bounced into our old sliding glass doors.  It didn't break one, but would the next big branch?  Chopping these trees down in California is part of fire mitigation efforts.  Ever heard of eucalyptus oil?  It's flammable.   

It gets better (if you like to laugh at tree huggers).
Naturally, I had to take a look at that Tree Spirit Project webpage, and all I can say is he's either really interested in trees, or he really likes getting people to take their clothes off so he can photograph them ... interacting on, around, and sometimes in trees.  There's a word for that, and it involves mandatory reporting and registering when you move around the country.  
Throughout the land, the plaintiff cry of the tree hugger could be heard, "Ouch, dammit!  Does anyone have any tweezers?"

Thursday, July 23, 2015

The A Word

For the first time in the history of this blog, I'm going to put up a content warning for graphic, disgusting language.  Not f-words or boring old stuff like that.  Gruesome, disgusting things.  

I had one of those odd synchronicity things, where stories just line up.  Or maybe it wasn't weird synchronicity, maybe it just all goes together.

First, there was all the hidden camera video from Planned Parenthood, talking about harvesting baby parts for sale.  Talking about how they mastered just slightly side-stepping the law by putting a baby in breech position so they could crush it's little skull and still harvest a healthy liver and maybe a heart and lungs.  How they do "less crunchy" abortions so that the valuable little organs are available for sale so they can recover their costs - as one of the modern Dr.s Mengele put it.  As Michael Ramirez put it:
But everyone knows abortion is supposed to be "available, safe and rare", right?  It turns out that isn't quite right.  In New York City, more black babies are aborted than born.
That's about a 1.25 aborted to every live birth, roughly 5/4.  As actress Stacey Dash put it, Black Lives Don't Seem to Matter in NYC.   She also publishes an astounding quote by Supreme Court Justice Ruth Bader Ginsburg in a 2009 interview with the occasionally-truthful New York Times.
“...growth in populations that we don’t want to have too many of.” WTF???  Is this Margaret Sanger in the 1920s?  I've heard her referred to as Darth Vader Ginsburg.  She's earning it here.

Look, I know this is a difficult subject.  The life of unwanted children isn't a wonderful bed of roses.  The tired old argument about exceptions for incest only applies to 1% of abortions (according to Wikipedia), so it just distracts attention from the other 99%.  It's dishonest to talk about "tissue" and speculating "when does it become a human life?"  What do they think it is before then, a squid?  If it's not a life at all, what is it then: a Volkswagen?  It just strikes me as incredibly disconnected to have children in a neonatal intensive care unit who are a month or more older than a child being aborted across town.  A baby born 6 weeks premature is considered pretty likely to make it these days, but Planned Parenthood is talking about harvesting their organs. 

During the interviews one of the Planned Parenthood doctors put it, “We don’t want to be in a position of being accused of selling tissue and stuff like that”.  Can you imagine a drug dealer saying, “We don’t want to be in a position of being accused of selling cocaine and stuff like that.”  Isn't that tantamount to saying that's exactly what you're doing and you damned well know it?   

Tuesday, July 21, 2015

Techy Tuesday - Smart Dust

University of Michigan researchers have demonstrated the smallest complete computer to date: the Michigan Micro Mote.  They estimate 150 of them would fit in a sewing thimble.
“To be ‘complete,’ a computer system must have an input of data, the ability to process that data – meaning process and store it, make decisions about what to do next – and, ultimately, the ability to output the data,” says David Blaauw, a professor of electrical engineering and computer science at the University of Michigan. “The sensors are the input and the radios are the output. The other key to being a complete computer is the ability to supply its own power.”
Think of these as smart sensors.  With a power source, sensor and radio link, these could be used in places where it's too difficult to get something bigger.  Early talk is using these for medical purposes: monitoring processes inside the body, as well as conducting EKGs and detecting and monitoring tumor growth.  If you're of a certain age, you'll recall the 1966 film Fantastic Voyage.  It's not a miniature submarine with an equally miniature Raquel Welch in it, but the Micro Mote can actually be injected into the body to perform some of these functions.
Here's one perched on the rim of a nickel.   You'll note the glaring absence of a keyboard, mouse or monitor.  Instructions are sent to the Micro Mote by flashing a light at it (On Off Keying).  The output comes over the radio link, which they say is short range, on the order of 2 meters. 

The biggest problem in creating these dedicated computers is power.  The Micro Mote includes a "solar cell" which produces enough power to run the computer even indoors.  With a 1mm2 solar cell producing 20nW (20 nanoWatts, or 20 billionths of a Watt), the device can harvest enough energy under ambient light to run perpetually. The device’s standby current consumption is 2nA - 2 billionths of an Amp - claimed to be about one millionth of the standby current in typical cellphone. 

The University of Michigan website has some ideas on interesting uses for "smart dust".  I think we can count on some of these being developed!

Monday, July 20, 2015

Silver is Down - Don't Buy Silver?

Not me.  Not now. 

I believe in dollar cost averaging and just getting a set dollar amount on a regular schedule.  But not tonight.  I went to the usual dealers I go to.  The spot price for silver as I write this is $14.70.  The price at Apmex right now for their cheapest 90% silver, also called junk silver, coins is $5.86/oz over spot, a 39.7% markup.  Most of the other grades are $6.34/oz over spot, a 43.1% markup.  Silver eagles from the US mint are in the range of $4.45/oz over spot in small quantities; in large quantities, they're $3.33/oz. over. 

A divergence between the price of physical metal and the paper price we get from those spot price numbers (like the one just to the right of this column) usually indicates a disconnect between the amount of metal actually available and demand.  Good luck getting it for any price closer to the normal.  The companies that hold the coins figure the price will be higher in a few weeks or so, and they can sell the coins then.  For now, if you want to pay a 43% markup, they'll take your money.  I personally don't see any sense in buying at a 43% markup, even though I pay the same amount of Federal Reserve Notes at some time in the future and get the same ounce of silver only with a smaller markup.  I fully admit that may not be rational!

There's always some difference between the spot price and the physical metal price.  You could say that spot is a theoretical number based on pure metal with no processing involved, but in reality it's the price of hypothetical silver in a paper trade.  It's a regular occurrence that more paper is traded on a given day than all the silver in the world.  If anyone called the bets on those days, there wouldn't be enough silver to back the paper. 

Do I think it's all unraveling?  Most likely not, although a serious disconnect between the spot price and the hold-it-in-your-hand price is often thought of as a warning sign.  There's a famous saying that "markets can remain irrational longer than you can remain solvent" and that seems to me to be what's going on.

Sunday, July 19, 2015

Computers - Can't Live With 'Em, Can't Dynamite 'Em

Sorry, fun seekers.  It was a crazy day; crazy weekend really.  Typical computer stuff. 

I have a Canon multi-function printer (printer/copier/scanner) about four feet behind and left of my left shoulder as I type this.  It has been there at least five years and I've been using it for that whole time, through at least a couple of computers (this one turned four years old in March) and running XP, Win 7 and Ubuntu operating systems.  As a rough number, I print something about once a week. Yesterday, my computer decided it wasn't going to work with it any more; in fact, it decided the printer had left the known universe.  Mrs. Graybeard could print to it just fine, but my system couldn't even find it.  One time during the day, I turned the printer off and back on again (universal software fix) and my computer found it, then lost it within the next half hour.  For the rest of the day, nothing I did would make it work.  I even turned this computer off and on again.

In frustration, I uninstalled it yesterday, figuring I'd reinstall it this morning.  And then, just because I haven't done it in a while, I defragmented my data drive yesterday. 

This morning when I started up the computer, this computer thought my 1 TB data drive was gone.  It offered me a chance to run a disk check while booting, but I opted to go to Windoze and work from there.  I keep a pretty good backup, doing a differential backup every other day, so I wasn't that concerned, but it's nice to have that terabyte there without having to work at it.  So I spent about two hours running disk checking utilities, and the process was very slow.  The task would sit there with no feedback to me whatsoever for long periods, then advance.  Just as I was about to head up to the local Staples and pick up another Terabyte drive, it started working. 

Again, I shut down and started up again, and this time it was fine.  On to the printer.  This time it only took about a half hour out of today, starting from no printer installed at all. 

Today's computers really are amazing technology - when they work.  You can buy anybody's accessories for it and they work - for the most part.  When they don't work, they can make you pull your hair and wish for the old days of dip switches and manually assigning IRQ numbers.  At least you felt like you had some control.

Saturday, July 18, 2015

"Institutionalized Reparations" Database Being Built by Obama

In a shocking story posted this afternoon to the New York Post, and picked up by the Drudge Report, author Paul Sperry reveals that the President whom the people had hoped would heal race relations in this country is taking unprecedented measures to make those relations worse than ever before.  Paul Sperry is a Hoover Institution media fellow and author of the book “The Great American Bank Robbery,” which exposed the racial politics behind the mortgage bust (Google Community Reinvestment Act - or search this blog's many postings on it). The administration is obtaining unprecedented information in order to prove racism.  They're doing this by data mining every piece of data the can get their hands on:
Remember what I was saying a couple of weeks ago about "disparate impact theory"?  Here it is at the point of a bayonet.  The recent Supreme Court ruling I was talking about in that link said you could be successfully sued for discrimination even if your intent was not to discriminate and you did everything in your power not to discriminate, as long as a disparate impact can be shown.  Big Brother Barack wants the databases operational before he leaves office, and much of the data in them will be posted online, so civil-rights attorneys and urban activist groups will be able to exploit them to show patterns of “racial disparities” and “segregation,” even if no other evidence of discrimination exists.    



Did you enjoy the 2008 subprime mortgage crisis and collapse?  They're working full tilt to create another one.

FHFA will share the info with Obama’s brainchild, the Consumer Financial Protection Bureau, CFPB, which acts more like a civil-rights agency, aggressively investigating lenders for racial bias.

Just like everything with this virulently racist administration, everything ... everything ... is seen through the distorted prism of race.  No economic decision, no credit card purchase, no school punishment, nothing will be exempt from racial "balancing".  If black students behave worse than other groups, be they Asian, Hispanic or especially white, and those misbehaving students get disciplined more often, the schools will be punished.  If they are enrolled less often in programs for the gifted, the schools will be punished. 

I know I've lifted a lot from the NY Post article, but you should definitely go read the whole thing.  As author Paul Sperry concludes:


Friday, July 17, 2015

Pluto - at Childhood's End





Thursday, July 16, 2015

The Resounding Stupidity of Central Banks and Central Planners

"Resounding stupidity" may sound a bit harsh, especially coming from us unwashed mundanes when we criticize our central bank philosopher kings.  But what other word can you apply to a group that is told of a better way to do their job, shown real world experimental results that show the suggested way really does work better, and yet chooses to ignore those results and follows their old models?

Note that in what follows, unless otherwise linked or attributed, the technical information and quotes in this post come from chapter 6 of: 
Rickards, James, The Death of Money: The Coming Collapse of the International Monetary System, Penguin Publishing Group. Kindle Edition.
The contrast to the way the European Central Bank is handling Greece and, by extension, what I'm sure you've heard referred to as the PIIGS countries (Portugal, Ireland, Italy, Greece, and Spain) is found in the BELL countries of Bulgaria, Estonia, Latvia and Lithuania.  Haven't heard of them?  That's because their story is a success story.
In addition to being EU members, they had all fixed the value of their local currencies to the euro. Pegging to the euro has led the BELLs into the same internal adjustment and devaluation as the Eurozone periphery, since they cannot use currency devaluation as a quick fix for dealing with economic adjustment issues.
Pegging means that they weren't using the Euro (although some have since gone over completely to it) they've just guaranteed their currencies are going to stay at some fixed price relative to the euro.  That means that any country trading with them has the perceived stability of the euro to deal with, not a currency that could be revalued whenever the issuing country felt like it. 

This is one of those rare instances in international monetary policy where there's almost a perfect controlled experiment.  Beginning in 2008 and continuing into 2009, each BELL country suffered approximately a 20 percent decline in output in those two years, and unemployment reached 20 percent. The decline in output in the GIIPS in the same period was only slightly less.  (Note that Jim Rickards uses the acronym GIIPS instead of PIIGS -- I don't know why).  Both groups suffered a loss of foreign investment and loss of access to the capital markets of about the same size.
From these comparable initial conditions, divergent policies were pursued. The GIIPS initially continued so-called economic stimulus and made only slight cuts in public spending. Greece actually increased the number of government employees between 2010 and 2011. The principal way of addressing fiscal issues in the GIIPS was through tax increases. The internal adjustment process of lowering unit labor costs began in the GIIPS only in 2010, and serious fiscal and labor market reform was begun in 2013; much work remains.

In contrast, the BELLs took immediate, drastic measures to put their fiscal houses in order, and strong growth resumed as early as 2010 and is now the highest in the EU. The turnaround was dramatic. Latvia’s economy contracted 24 percent in 2008– 9, but then grew over 10 percent in 2011– 12. Estonia contracted 20 percent in 2008– 9 but grew at a robust 7.9 percent rate in 2011. Lithuania’s economy did not suffer as much as the other BELLs in the crisis and actually grew 2.8 percent in 2008. Lithuania’s growth did decline in 2009, but it bounced back quickly and rose 5.9 percent in 2011. This pattern of collapse followed by robust growth in the Baltic BELLs is the classic V pattern that is much discussed but seldom seen in recent years because governments such as the United States use money printing to truncate the V, leaving protracted, anemic growth in its wake.

How does one account for this sharp turnaround in the Baltic states’ growth compared to the EU periphery? Anders Åslund, a scholar at the Peterson Institute for International Economics in Washington, D.C., and an expert on the eastern European and Russian economies, has written extensively on this topic. He attributes economic success in the Baltics and failure in southern Europe from 2009 to 2012 to specific factors. When confronted with severe economic contraction, he suggests, an affected nation must embrace the crisis and turn it to political advantage. Political leaders who explain clearly the economic choices to their citizens will gain support for tough policies, while leaders such as those in the United States and southern Europe who deny the problem’s depth will find that the sense of urgency recedes and that citizens are less willing over time to make the needed sacrifices. Åslund also urges that countries facing economic crises should embrace new leaders with new ideas. Vested interests associated with old leadership will be most likely to cling to failed policies, while new leaders are able to pursue the cuts in government spending needed to restore fiscal health.

Åslund also recommends that the emergency economic responses be clearly communicated, front-loaded, and weighted more to spending cuts than tax increases. Citizens will support policies they understand but will be ambivalent about the need for spending cuts if politicians sugarcoat the situation and prolong the process. He also says that “credible culprits are useful.” In Latvia’s case, three oligarchs dominated the economy in 2006, and 51 percent of the seats in parliament were held by parties they controlled. Reform politicians campaigned against their corruption, and by 2011 the oligarchs’ representation had shrunk to 13 percent. The United States also had corrupt bankers as ready-made culprits but chose to bail them out rather than hold them accountable for the precrisis excesses.

Finally and most important, Åslund emphasizes that the restructuring process must be equitable and take the form of a social compact. All societal sectors, government and nongovernment, union and nonunion, must sacrifice to restore vigor to the economy. With regard to Latvia, he writes, “The government prohibited double incomes for senior civil servants . . . and cut salaries of top officials more than of junior public employees, with 35 percent salary cuts for ministers.” Again, the process in the Baltics contrasts sharply with that of countries such as the United States, where government spending has increased since the crisis. In the United States, public union and government employee salaries and benefits have mostly been protected, while the brunt of adjustment has fallen on the nonunion private sector. Åslund concludes by noting that these recommendations were mostly followed in the Baltics and disregarded in the southern periphery, with the result that the Baltics are now growing robustly while Europe’s southern periphery is stuck in recession with uncertain prospects.
For those not keeping score: the PIIGS used conventional central bank and central planner approaches.  They raised taxes and followed conventional "economic stimulus" programs, such as loans and top-down commands on wages.  They didn't touch unions and their wages.  The BELLs followed more market based and certainly more conservative approaches: they slashed government spending and let the market sort things out.  Yes, some wages went down (Paul Krugman in the broad brush believes wages are not governed by markets and never go down).  Some folks were undoubtedly hurt or massively inconvenienced.  Yet by 2013, the occasionally fact-based NY Times covered the Latvian turnaround

Christine Lagarde, Director of the IMF, commented in a speech in Riga, Latvia
While challenges remain today, you have pulled through. You have returned to strong growth and reduced unemployment. . . . You have lowered budget deficits and kept government debt ratios to some of the lowest in the European Union. You have become more competitive in world markets through wage and price cuts. You have restored confidence and brought down interest rates through good macroeconomic policies. We are here today to celebrate your achievements.
By February of 2012, Estonia was recognized as the fastest growing economy in the Eurozone, while Greece was in Year Three (Four?) of its Continuing Crisis
Today, Estonia’s economy is the fastest-growing in the currency bloc, consumers and businesses are paying lower interest rates, and business ties with Finland—a euro member state and Estonia’s main trading partner—are tighter than ever. “Lots of Finnish producers seek cooperation partners here now as things are more transparent for them,” says Ermo Saks, owner of an audiovisual production company in the capital of Tallinn, where costs are still 48 percent lower than in Finland.
Let me post a graph that has been here before in several updates.  It used to come from the Calculated Risk blog - to be honest, I don't know if they still keep it up.  This is from last August ('14) when the recovery was complete (yeah, right).  The X axis (horizontal) is the length of all recessions since WWII, and the Y axis (vertical) is the depth of the recession, measured as percent job losses. 

What I'm showing here is the pattern of short, V-shaped recessions (what Rickards calls the "classic V pattern" above) vs the longer, flatter, sort-of-a-flattened-U shape recession we had in 1990, 2001 and since 2007.  This is the kind of effect we're talking about.  The BELL countries, got over their recessions faster, and got back to growth.  Although this chart shows the US recovery was over by last summer, it's not hard to find evidence that we've never returned to pre-2007 levels of employment.  The US Labor Participation rate is still the lowest it has been since the late 1970s.  People who are out of the labor market don't get counted in the unemployment rate that's used in this chart.  

Taken in overview, the way the BELLs handled the crash of '08 is a lesson not just for Mario Draghi and the European Central Bank, but for Janet Yellen of the Fed and Haruhiko Kuroda of the Bank of Japan.  The central banks could do well to back off from their overriding love of control and let the market work.  Does everything always look perfect under the market?  Of course not.  But it's self-correcting and infinitely faster to find a better solution than doctrinaire bankers who are shown a better way of doing things and then refuse to follow it. 

The central bankers are as intellectually inbred as any group of inbreds that you can imagine: there is no real diversity of thought to be found.  Asked to comment on the lessons of Latvia, on how much better the different policies worked out, economics professor Morten Hansen, head of the economics department at the Stockholm School of Economics in Riga refused to think what worked in the BELL countries was a worthwhile experiment, saying:

Just a fluke.  Nothing to see here.  Move along... move along.  

The US Federal Reserve, under Ben Bernanke at the time, swore we would not repeat the mistakes the Bank of Japan made that led to their 20 year recession; in fact, we've repeated every single one.  Some of them more than once. 

Wednesday, July 15, 2015

Now Young Skywalker...You Will Die

(reference) On Sunday, Brock over at Free North Carolina posted an article about a simple and probably unexpected way to die during a grid down situation: spider bite.

Let me just emphasize one more way.  I'm sure everyone has thought about it, or strange as it may sound, thinks they've thought of it.  Infection.  The thing about infections is that they can pop up at any time without any warning or indications, and not just from a cut or other injury.  

The main reason for the quiet here over Sunday/Monday was an abrupt run in with the medical system.  Part was planned, but part was an out of the blue infection unrelated to any injury or other affront I can recall.   Within 12 hours, I was able to start antibiotics.  A quick trip to the local Doc-in-a-Box "urgent care" facility and then a stop at our local Publix for antibiotics, and I'm on the road to recovery.  If the grid had been down when this struck, I might well be dead by now, or pushing my limits.  Instead, Publix gives away two weeks worth of several antibiotics for free.  I assume that's because the cost of the generic forms they dispense are less than the cost of administering payment systems, or possibly they do it to attract business. 

I believe it was back on the old, abandoned Geek with a 45 blog that I read a similar post where he was simply astonished at the widespread availability of antibiotics, compounds that would have saved millions upon millions of lives from pneumonia alone, and he could be cured of pneumonia for a few dollars.  Now add in that many of them are free and compound that wonder. 

There are at least three big problems with having antibiotics around as general preparations for times with collapsed or just less-than-optimum health systems.  The first is that they're not just something you take they're specific; certain antibiotics only affect certain bacteria, so that you just don't need AN antibiotic, you need THE antibiotic for the infection you have; taking the wrong one could cause damage.  Needing several types of antibiotics means lots of storage.  The second problem is partly based on that issue; they are typically available by prescription only (although most folks already know the system hack for that).  The third big problem is that you shouldn't just give someone a bottle of something and think you're done.  They really do require knowledge on a caregiver's part.  

Something everybody who thinks they'll be administering first aid in shaky times should know is not just which antibiotics to try first for which conditions, but when not to administer them, and what to do if they don't work or the patient gets sicker (from the illness or from reaction to the drug).  I'm certainly not the guy to teach such a class, but I'd sure like to take it.  I know there are people in our community who could put on such a program, so it may be available and I'm just not aware of it.  Patriot Nurse on YouTube comes to mind, as does Dive Medic

My bottom line here is that there are lots and lots of ways to die when civilization goes fully dysfunctional.  Spider bites, snake bites, tick bites and other critters can get you.  Or you could wake up with an infection out of nowhere.  It often seems to me that people talk about something major like an EMP happening and over a hundred million people dying, yet the implication is that they're somehow not among those who do.  This hasn't even touched the many ways of dying that don't have anything to do with infection at all.  
(probably a stock photo of a hand model pouring out pills - from)

Tuesday, July 14, 2015

Techy Tuesday - NASA Still Sometimes Dreams Big

They just can't execute their dreams because of their insane leadership's priorities (I'm thinking Muslim outreach).  Still, for coolness factor, this autonomous robotic submarine to explore Saturn's moon Titan is tough to beat.  While this is entirely dreams and conceptual studies now, the program is one NASA just chose for an additional round of funding to study in more detail as part of their Innovative Advanced Concepts (NIAC) program
Titan is unique in the outer solar system in that it is the only one of the bodies outside the Earth with liquid lakes and seas on its surface. The Titanian seas, however, are not composed of water, like Earth’s seas, but are seas of liquid hydrocarbons. What lies beneath the surface of Titan’s seas? We propose to develop a conceptual design of a submersible autonomous vehicle (submarine) to explore extraterrestrial seas. Specifically, to send a submarine to Titan’s largest northern sea, Kraken Mare. This craft will autonomously carry out detailed scientific investigations under the surface of Kraken Mare, providing unprecedented knowledge of an extraterrestrial sea and expanding NASA’s existing capabilities in planetary exploration to include in situ nautical operations. Sprawling over some 1000 km, with depths estimated at 300 m, Kraken Mare is comparable in size to the Great Lakes and represents an opportunity for an unprecedented planetary exploration mission. This mission would be a logical follow-on to a Titan surface mission such as TiME (Titan Mare Explorer) or even a component of a flagship mission of multiple vehicles. The mission concept we propose to study will investigate a full spectrum of oceanographic phenomena: chemical composition of the liquid, surface and subsurface currents, mixing and layering in the “water” column, tides, wind and waves, bathymetry, and bottom features and composition. Measurements of all these aspects of Titan’s hydrocarbon ocean environment can only be made through focused in situ exploration with a well-instrumented craft.
The concept is for a robotic submarine that will be about the size of a car.
Somewhat similar to an Earth-based submarine, the cylindrical vessel about the length of a car would plunge through the thick atmosphere of Titan and dive into its largest liquid hydrocarbon sea, Kraken Mare. Here, it would explore the subsurface region for 90 days, sending data and images back to Earth. It would travel at a rather sedate one meter per second (2.2 miles per hour) using four propellers at its back, enabling it to cover a planned route of 2,000 kilometers (1,200 miles). Instruments on board would include sonar, a sampling system and a camera to answer questions such as whether there could be life on Titan, which is up for debate.
There are many technical challenges to overcome in such a mission, beyond simply getting a vehicle that size all the way to Saturn and delivering it to Kraken Mare.  To begin with, as it says, they're looking to design a submarine to move in liquids, but they don't know what's in the Kraken sea.  Is it all liquid methane?  On top of that, it's very, very cold out at Titan.  These hydrocarbon seas are -180°C (-300°F).  Is it colder at depth?  Do parts of the sea freeze out slightly below the surface and make the entire mission impossible?   In their diagram, it mentions insulation, but not heating.  While it's true silicon electronics often works better cold than at room temperature, that's at -55C vs +25C. I'm not aware of any class of electronic components that are specified to operate at -180C. 

(Proposed vehicle)
I see problems with the antenna concept (green area in the top illustration).  An antenna of that size will be high gain, but it will be very, very narrow area coverage.  I don't think a vehicle floating in an "ocean" would be stable enough to link back to earth.  I think it would more likely be better to communicate with a local space craft in Titanian orbit and have that one beam back to Earth.

Some of us who worked tangentially around NASA have remarked that NASA's biggest post-Apollo accomplishment has been to get stuff done despite their leadership.  I'd like to live lone enough to see something like this, but I have a hard time thinking it will happen.

Saturday, July 11, 2015

I Got Yer Hyperinflation Right Here!

On more than one occasion (example), I've come down on the side that predicts our economic collapse will be inflation or hyperinflation rather than deflation.  I've also been more circumspect and less sure that I know what's coming.  The Federal Reserve, though, has always seen and still now sees deflation everywhere and that's among the reasons it continues to buy bonds.

Keith Weiner, CEO of Monetary Metals, blogs on Kitco this week that we have, in fact, had terrible inflationary impacts.  The reason the Fed doesn't react to this inflation is baked into their market distortions.  He begins:
In hyperinflation, the purchasing power of the currency collapses. Before the onset, suppose one collapsar buys ten loaves of bread. Soon, it buys only one loaf. Shortly thereafter, it buys only one slice. Next, it can only purchase a saltine cracker. Pretty soon the collapsar won’t buy any bread at all. Stick a fork in it, it’s done.

Many critics of the Federal Reserve, the European Central bank, and others have predicted that this end is coming soon. They have been frustrated as prices are clearly not skyrocketing. For example, the price of crude oil was cut almost in half (so far). There’s little to see if one looks at the purchasing power of the dollar, euro, Swiss franc, etc. Purchasing power, as conventionally understood, is doing just fine.
There are real indicators of inflation, such as the smaller package for the same (or higher) price phenomenon, for example, but there are few signs of excessive inflation (although in my mind, the 2% target the Fed uses is too high).  Nobel prize-winning asshole Paul Krugman, while writing about how wonderful the economy is, compares people who predict runaway inflation to “true believers whose faith in a predicted apocalypse persists even after it fails to materialize.”  Think of the Heaven's Gate cult who killed themselves over the coming of comet Hale-Bopp.  If you think we run the risk of inflation, Krugman thinks you're one of them. 

Weiner, though, finds the missing inflation that nobody else finds.

An illustration is useful.

The collapse in YPP suggests an analogy to hyperinflation. Look at how much capital you need to support a middle class lifestyle. Measured in dollars, the dollar price of this capital is skyrocketing.

This skyrocketing price of capital has the same effect as hyperinflation: it undermines savings and causes people to eat themselves out of house and home.
This, of course, is due to the Zero Interest Rate Policies of the Fed, exactly what Krugman is praising.   A generation ago, 1979, one could earn a decent retirement income with the interest on savings of $100,000.  Today, it takes 1000 times that, $100 Million to earn that income.  How many of us have $100,000,000 in savings to retire on? 
I've said before that the Fed has crosshairs on the back of every saver, and this is a perfect example of the effects of the ZIRP.  The market distortions of the zero interest rates are ripping apart savers, small businesses, and many other groups.  What would help savers, retirees and those planning to retire is for interest rates to go back up to their historical levels.  That would hammer the rest of the economy as the percentage of the Federal Budget needed to pay interest on the debt would increase, and have to come from somewhere.

Friday, July 10, 2015

Among the Best Financial Pieces I've Ever Read

Last weekend, the Bonner & Partners newsletter I get every day was particularly good.   Instead of notes from Bill Bonner, they gave the platform to financial writer and podcaster James Altucher.  Altucher is an unusual thinker and because of that has been interviewed by Glenn Beck, Tim Ferris and others.  He has been a multi millionaire a couple of times and lost it all a couple of times.  He has been a hedge fund manager and author but is probably best known for an article he posted on LinkedIn called 10 Reasons You Have to Quit Your Job in 2014.  The columns are available in 3 parts on the Bonner website and I really think they're worth your time.  Part 1Part 2 and Part 3.

Now let me throw out a few quotes that really stood out to me.  As a teaser to encourage you to read the whole thing.

Part 1.  The Ultimate Cheat Sheet for Investing All of Your Money
  • The most important three words in investing are: “I don’t know.” If someone doesn’t say that to you then they are lying.
  • SHOULD I DAY-TRADE? Only if you are also willing to take all of your money, rip it into tiny pieces, make cupcakes with one piece of money inside each cupcake, and then eat all of the cupcakes.
    Then you will get sick, and eat all of your money, but it will taste thrilling along the way. Which is what day-trading is.
  • WELL, WHO MAKES MONEY IN THE MARKET THEN? Three types of people:
    2. People who hold stocks for a millionth of a second (see Michael Lewis’ book Flash Boys which I highly recommend). This is borderline illegal and I don’t recommend it.
    3. People who cheat.
Part 2. What I Learned About Life After Interviewing 80 Highly Successful People  (Seriously - read this one).
  • A Good Life is Measured in Decades - Too many people want happiness, love, money, connections, everything yesterday.  Me too.  I call it “the disease.” I feel often I can paint over a certain emptiness inside if only… if only… I have X.
  • A Good Life is Measured by What You Did Today - This is the opposite of the previous one but the same. You get success in decades by having success now.
Part 3.  The Secrets of Personal Finance
  • The things you need to know.
    The first answer is: nothing. You need to know absolutely nothing about personal finance. Buying a cheap beer versus buying an expensive beer will not help you get rich.
  • First off, don’t bother saving money. You get more money in the bank by making more money. That’s rule No. 1.
    People might think this is flippant. What if they can’t make more money? Well, then, you’re going to run out of money. No personal finance rule will help.
  • Don’t invest in anything that you can’t directly control every aspect of.  In other words… yourself. 
    • 1. You can’t make or save money from a salary. And salaries have been going down versus inflation for 40 years. So don’t count on a salary. You’re 20; please take this advice alone if you take any advice at all. 
    • 2. Investing is a tax on the middle class. There are at least five levels of fees stripped out of your hard-earned cash before your money touches an investment.
Don't miss the list of the 15 life skills needed to make more money.  As he says, these are never learned in college.

James Altucher (source)

Wednesday, July 8, 2015

Peering Out of the Bunker of Doom

I'm cautiously peering out of the Bunker of Doom, wishing the AR in my hands was a BAR.  Nobody rioting.  Nobody with ruck sack and a rifle slung over their shoulder.  No MRAPs.  Just a normal summer evening.

China's markets lost again today.  They're down over 32% from the peak of the bubble.  Bayou Renaissance Man points out that they're on the virtually the same slope as the US crash of 1929.   Estimates are that the total amount of wealth that has vanished in China totals $3.2 Trillion, which is approximately the GDP of the UK

It's spreading.  The commodities China has been buying - to fund its mal-invested State Run Enterprises that do things like build cities with no inhabitants - are now sitting.  Peter points out that iron ore is down 10%.  Copper is down 15% in the last 60 days.  Chinese steel is cheaper than cabbage.  Silver is at five year lows.

The market shutdown on the NYSE was unsettling.  Zerohedge has the post mortem,
What began as a glitch in pre-market trading turned into the NYSE's longest trading halt since Hurrican Sandy battered the East Coast. The ever-increasing complexity of US equity markets combined with an ever-decreasing pool of greater fools leaves windows open on down days (for it appears these 'glitches' only ever occur on down days) for markets to break. While NYSE traders defended the very market structure they have abhorred in the past as evidence that today was "not a failure," we can't help but find CNBC's Scott Wapner's amusing remark that "if retail investors want low cost liquid trading they are going to have learn to live with it" the perfect post-mortem for a rigged system brimming with confident insiders ever excited to take mom-and-pop's money.
ZH also speculated that we could be seeing what cyberwar looks like:
After a series of cyber failures involving first UAL, then this website, then the NYSE which is still halted, then the WSJ, some have suggested that this could be a concerted cyber attack (perhaps by retaliatory China unhappy its stocks are plunging) focusing on the US. So we decided to look at a real-time cyber attack map courtesy of Norsecorp which provides real time visibility into global cyber attacks.

What clearly stands out is that for some reason Chinese DDOS attacks/hackers seem to be focusing on St. Louis this morning.
Mrs. Graybeard finds links that St. Louis is actually a headquarters of the folks who research hacking attacks, and they put out honeypots to catch them.  Naturally, that will make it look like they're concentrating on St. Louis.  I mean, the NYSE really isn't even in New York anymore, not all of it.  But St. Louis?  Unless their going after Anheuser Busch...

So reassured the Zombies haven't started shuffling, and feeling simultaneously relieved yet somehow slightly depressed that it looks like I go to work tomorrow, I flip the happy switch to SAFE, drop the magazine and eject the round from the chamber. But I'll be watching the markets a bit more closely tomorrow.

Tuesday, July 7, 2015

Techy Tuesday - Using Superconductors to Improve Cancer Radiation Therapy

Anyone who has had cancer or even just been close to someone who has had it knows the phrase, "slash, poison, burn"; the standard treatment for cancer.  Just saying surgery, chemotherapy, and radiation is an oversimplification.  Surgery to remove the tumors is usually first, although I've met people who got poisoned first - chemotherapy to shrink the tumors.  Radiation therapy is last in this order, and frequently is last, but it's sometimes the only treatment.  Radiation therapy consists of using high energy subatomic particles; literally exposing the patient to intense blasts of radiation.  As in all cancer treatment, the goal is to kill the cancer without killing the patient.

While there are different ways to apply radiation, in external beam therapy, patients are literally placed at the cross hairs of particle accelerator to slam high energy particles into their bodies.  I'd say "into the tumor", but if the surgery was successful, there's no tumor left. The particle beam is slamming into tissue to wipe out a few bad cells that may have slipped past the scalpel into the body, and not been poisoned by the chemotherapy.
(XKCD 933)

Last week, Design News wrote about an innovation in creating these "flesh-searing relativistic particle cannons" from MIT.
For many different types of cancers among patients in various age groups, proton beam radiotherapy treatment (PBRT) is a desirable alternative to other types of radiation therapy. In PBRT, synchrocyclotrons, cyclotrons, isochronous cyclotrons, synchrotrons, and other proton accelerators release high-energy proton beams to radiate cancerous tumors. A proton beam can be directly aimed at a tumor, sparing healthy surrounding tissue from radiation.

With only 14 clinics in the U.S., PBRT is not available to all who qualify. For more than 10 years, scientists at MIT’s Plasma Science and Fusion Center (PSFC) have been researching new synchrocyclotron designs to lower PBRT-machine costs in cancer-treating clinics around the world.

In 2008, a team at MIT’s Plasma Science and Fusion Center designed a lightweight and compact synchrocyclotron by replacing the copper electromagnetic coils with superconducting varieties. Superconductive coils are cooled to low temperatures in order to reduce the resistivity of the material. They allow for smaller coils with less turns to generate higher magnetic fields, and can decrease the overall weight of an accelerator.

The new design could be placed directly on the gantry head that directs the proton beam at tumors. MIT’s synchrocyclotron gantry design replaces the old setup—the synchrocyclotron’s large size typically requires a separate room from the gantry and patient.
The article claims many improvements for the new PBRT machines over the old design, including a cleaner, more patient friendly layout.  ProNova Solutions is the company commercializing this treatment.  High temperatures superconductors have been around since the late 80s, but don't have much role in the world outside the physics lab.  I'm aware of some superconducting electronics sold for use in cellular base stations (paper here - pdf warning) and that puzzled me.  The infrastructure to pump liquid nitrogen over these systems must be a big cost, but it was explained that the rent paid for cellular installations on buildings like the Sears Tower or Empire State goes into the millions of dollars per square foot. 
It's a cool design and interesting to see superconductor technology in medicine... but it's still to create a machine to shoot you with high energy particles out of a "flesh-searing relativistic particle cannons".  It's still a pretty awful thing to do to a person.  I keep hearing that genomics is going to radically change cancer therapy.  Obsoleting this sort of treatment would be wonderful.