Year: 2008

Economics Update

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More blood for Citicorp and Merril, it looks like they will be needing additional foreign money, as they are expected to report additional losses amounting to $25 billion. In addition, Capital One is expected to report about a billion dollars more in losses than was previously expected (what’s in your wallet).

And Moody’s is thinking about cutting Freddie Mac’s rating to A-, which could make raising capital much more difficult.

December retail sales figures sucked wet farts from dead pigeons. It was an increase, but less than inflation, which makes a decrease in real $.

Ben Bernanke has pretty much guaranteed a rate cut in a speech he gave today to the Women in Housing and Finance and Exchequer Club in Washington, D.C.

Bush’s North Korea Counterfeit Accusations Completely Bogus

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In May of last year, I made a couple of posts about how the accusations of the DPRK counterfeiting US dollars was bogus (here and here).

Now a McClatchy news investigation has found no evidence that to support these allegations (Bush lying, what a surprise).

If you look at my old articles, I finger the US intelligence services as being the most likely people to do this. They have the means, and opportunity, and as to motive, it allows them to hand out a suitcase full of cash without it appearing on budget.

Klaus Bender, the author of a book on the subject, “Moneymakers: The Secret World of Banknote Printing,” said that the phony $100 bill is “not a fake anymore. It’s an illegal parallel print of a genuine note.”

“It goes way beyond what normal counterfeiters are able to do,” said Bender, whose book first spotlighted the improbability of North Korean supernotes. “And it is so elaborate (and expensive) it doesn’t pay for the counterfeiting anymore.”

Bender claims that the supernotes are of such high quality and are updated so frequently that they could be produced only by a U.S. government agency such as the CIA.

As unsubstantiated as the allegation is, there is a precedent. In his new book on the history of the CIA, journalist Tim Weiner detailed how the agency tried to undermine the Soviet Union’s economy by counterfeiting its currency.

Political Updates for the Day

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John Kerry has endorsed Barack Obama. I’m not sure how much of this is that he likes Obama, and how much is the feeling that he might have that the Clintonistas submarined him in 2004 to clear the way for Hillary.

TheHill.com – Clinton outraised Obama in the fourth quarter, $24 million to $23.5 million. No breakdown of contributions between primary and general though.

We are starting to see stories about Obama’s ties to Antoin “Tony” Rezko and his house purchase. I don’t see much being there in terms of corruption (stupidity is another matter), but if he gets the nomination, this will be a regular Republican talking point.

Richardson drops out of the race no word yet on who he will endorse, but my guess would be Clinton.

Landrieu’s corruption story seems to have had a bit of wind taken out of its sales. It appears that the earmark in question was because, “Paul Vance, the superintendent of the D.C. public schools, had written Landrieu, then the ranking member on the D.C appropriations subcommittee, and Sen. Mike DeWine (R-OH), then the chair, to ask for funds for Voyager.” It’s not the end of the investigation, but it makes it look like any developments are not imminent.

Looks like Unity ’08 will be shut down to make way for a Bloomberg campaign site. Well, f&^% you your honor.

Holy Crap!!! I Got a Prediction Right!!!!

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On 17 November, I wrote about Bank of America buying $$2 billion worth of preferred Countrywide stock yielding 7.3%, and that can be converted into common stock at $18 per share (a 21% discount of the then price). It was supposed to be master stroke of vulture capitalism, giving away the gold the golden goose for some magic beans.

At the time, I said, “Honestly, I think that they will end up losing money on this.“

It appears that I was right (happy dance), and we are now seeing the articles wondering how Can Bank of America Can Salvage Its Countrywide Stake. They didn’t buy the golden goose, they bought the intestinal gas from the beans (It’s trading for $8.72), and now everyone is wondering how BoA will minimize its hurt.


These guys are paid millions of dollars to get stuff like this right, and they didn’t, and I did.

It doesn’t take a genius to figure this stuff out.

Matthew Saroff’s Hall of Failed Predictions: Exhibit 38,745

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I was certain that, if there were a winner in the HD-DVD/Blu-Ray wars, it would be HD-DVD. ( here, here, here, here, here, and here)

It’s a cheaper tech, and it’s not controlled by Sony.

Well, the New York Times is now reporting that
NBC Universal and Paramount are seriously considering a switch to Blu-Ray.

I’m not wrong yet, but it seems likely that I will be in the next 12-18 months.

Then again, the end of the HD-DVD/Blu-Ray wars has always seemed to be 12-18 months away.

Finally, Some Sanity on Security Classifications

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The Public Interest Declassification Board is calling for a streamlining of the declassification process.

Speaking as someone who has held a secret clearance*, the biggest problem is complacency, and this is driven by over-classification.

When everything you touch, even things that are ordinary and are actually publicly known, is classified, are classified, nothing is classified. It becomes background noise.

*Just in case you are wondering if the fact that a complete and total pratt like me got a secret clearance means that we are all doomed, the answer is yes.

When the Department of Defense Homeland Secrity Wants It’s Money Back, You’ve Screwed Up

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So, the Coast Guard wants to to stretch and improve some (49) patrol boats, and the contract goes out to Lockheed-Martin and Northrop-Grumman, with the former doing the new systems, and the latter doing the hulls.

Small problem though, the systems don’t work, and the stretched boats buckle and leak. What’s more they leaked more than water. They used unshielded cables on the upgrade, meaning that your average Russian fishing trawler could listen in to a secure military network.

So the Coast Guard is asking for its money back:

The U.S. Coast Guard has asked a joint venture of Lockheed Martin Corp and Northrop Grumman Corp to pay $96.1 million for eight patrol boats that it modified, but that cannot be used.

I’m shocked, but less so than if it happened on a DoD, as opposed to a DHS contract*.

The coast guard is decommissioning (basically scrapping) the boats in question, and is taking back management of the program from the LSI (see my rundown on the LSI process, and why congress is moving to ban the process, here) of the , “$24 billion, 25-year modernization program known as Deepwater”.

Wouldn’t happen in the DoD. Too many generals who plan to work their retirements with the defense contractors.

*The strikethrough in the title is irony, not a correction.

New Chinese Short Range AAM

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Ares recently posted a description of a new Chinese short range air-to-air missile.

Seeing as how I actually spent some time working in rockets and missiles (SAMs mostly) I though I’d look at their thoughts and add a few of my own:

First, the missile clearly has thrust vectoring, but it does not have any forward fins. These seem to run counter to each other.

A missile lacking forward fins typically has better long range kinematics (the ASRAAM, for example actually has beyond visual range capabilities), but the thrust vectoring shows a bias toward shorter engagement distances.

It should be noted that the fore body strakes probably contribute a quite bit to aerodynamic maneuverability, particularly at high speeds (you will note that the ASRAMM below lacks them)

The rocket motor is almost certainly relatively low thrust at launch, to allow for the vectoring paddles to work with relatively small actuators (the AIM-9X does not do this, but it is reusing an old motor). Additionally, since the thrust vectoring has little benefit at higher speeds, where aerodynamics work better, it’s likely that they are jettisoned shortly thereafter in flight.

The report states that the missile is an Imaging Infra Red system, and my guess would be that uses a scanning array, rather than a staring array (go to the Wiki link, it explains the difference fully). While there are applications where a staring array is crucial, such as astronomical devices, for AAMs, the advantages are in dispute, staring arrays are much more difficult to manufacture.

One possibility is that this is the product of South African and Chinese cooperation though, it looks a lot like the Denel A-Darter (see below). Note that the A-Darter has a 6″ diameter (166mm) as compared to the 5 inches of the Sidewinder, which implies superior kinematics because of greater fuel volume).

The Best Slashdot Post Ever

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You can read it, in all of its awfulness, here, in a discussion of a professor who bemoans the fact that students are learning Java, as opposed to “real” computer languages.

University should be about people (Score:2, Funny)
by Anonymous Coward on Tuesday January 08, @03:22AM (#21951018)

I’m concerned about the narrowm view of the world IT people and engineers have these days. I think the problem starts at college – There’s a culture that somehow science is more rational and usefull then the humanitities. Lecturers encourage students to joke about arts students, and humilaite them whenever possible. This encourages eliteism, and I for one am sick of it.

Let’s tell it like it is. ‘science’ is just as much about opinion as the humanities. Research simply follows the fad of the day. Take dieticians for example. These men and woman believe that just because they have degree in medical science that they are all knowing. Why, what they recommend one day may kill you the next! (see the DDT story for more information.) Science is 95% opinion then facts, lets face it. What about astrology, the most rediculious of the sciences! But I degress…

Another example is music. We know what sounds good. Everyone agreed that Valves for instance sound great. But knowitall engineers use trensastors with inferious sound quality just to save a few bucks. They argue with numbers. Hey, I don’t want to do maths just to listen to music. I know what I like. You cannot apply objective reasoning to a subject which is intristically subjective. But try telling those recent grads with their useless piece of paper that and they go all
mightier–then-thou.

The problem with you technical guys are that you are all so eliteist. Whilst you want to trun collage into a trade school with yore narrow minded views that collage should be a job training centre, Humanities are focused on making you a well rounded person who is actually interesting to be with, not a boringfocused geek. Really, it makes me so mad when people say “oh, he’s doing a humanities degree, that’s easy”. I have to read *3* *books* *a* *week* on average. Not picture books either I assue you. It is a lot of work, but the upshot is improved grammer and spelling skills that are lacking in the technical. As for those that say “you will be working at mcdonalds” , I’m going on to so a PhD in socialolgy where I’ll be line for tenure where I have a much more rewarding job then being a science freak or an engineer. Anyways, all I have to do to be a engineer wold be to get my MSCE and how hard couyld that be? Technical stuff is simply whatever fad the market thinks is hot at the moment, but all great things were done by humanities.

You technical types are far to narrow minded and cynsical. You should learn to enjoy life.

Peace be to god, he transcends all.

Ummmm….Amazing. I’ve marked all the misspellings, and least I think that I did.

Three whole books a week, huh…I’m so impressed.

FWIW, I am a product of two liberal arts majors, my dad did sociology/city planning, and my mom did English, but started in mathematics.

I respect the social sciences.

I just don’t respect this particular social scientist.

Spectacular self-ownage.

Markets Don’t Work as Predictive Instruments

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Paul Krugman has an rather interesting insight into the New Hampshire primary results, specifically he gives us this picture of the Intrade price for “Clinton wins the Democratic nomination” bidding:

These investors in this market, you know the one that is supposed to predict the future, got it completely wrong. In fact, as time went on more and more of them got it wring (the bar graphs are at the bottom). Dr. Krugman notes, “There’s no hint that the market saw either Iowa or New Hampshire coming, or knew anything beyond the bloviations of the talking heads.”

That is the little picture, but there is a bigger picture, and that is that markets are not some sort of magically predictive tool. They are simply a sort of group guessing game.

One of the arguments for the increasing use of arbitrage is that by creating derivatives, like futures market, help the economy, because of their ability to predict future market swings.

The answer is that they don’t. What more, as can be seen on an almost weekly basis, these instruments contribute to price swings, and make commodities more active, by adding another layer of profit taking on the way to market, though, to be fair, they employ no-account Harvard MBAs.

There are cases where futures markets are essential. Without the ability to buy rubber for delivery at a later date, for example, bidding on OEM tires for a car manufacturer would be risky and more expensive, but now we have entities like stock futures, which are unnecessary, make the market more volatile, and encourage speculation at the expense of investing.

The Effect of Proposition 13 On the California Real Estate Market

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A friend of mine pulled a graph from an old story in the Orange County register where they predicted that home prices were expected to fall in 2007. (Well I did say it was an old story, dated 19 October 2006.

What I found interesting was the graphic, what we can learn from it with a bit more data:

Ignoring the obvious, that they underestimated the drop like every other real estate ad supported media entity, we can learn something about the effect of Proposition 13 on the California real estate market.

Proposition 13, passed in 1987, says that a house can only be taxed at 1% of property evaluation, and that absent a sale, that the evaluation can not increase by more than 2% per year.

So that $62,290.00 house in 1977 would now be assessed, absent any intervening sale, at $112,830.00 in 2007, while the true market value would $550,000.00 in 2007.

Truth be told, it would probably be less, if just because houses are getting bigger (McMansions), so let’s call it $508,000.00.

So if you stay in the house, and improve it, and don’t down size it, and leave it to your kids, right now you will be paying 22% the taxes you would if it has been assessed at fair market value.

Under those circumstances, it makes no sense to move to a bigger house when your family gets bigger, you just add on to the existing one, and if you sell to move to a smaller house when the children move out, your profit are wiped out by the tax hike.

There are a whole bunch of people sitting on houses that they would otherwise sell, because of the tax consequences.

So less housing reaches the market, you see less of the empty nesters moving into townhouses, etc., more sprawl, and through supply and demand, prices rise.

You also have the side effect that commerical property is corporate owned, and the corporation is sold, rather than the property, which raises the burden on new home purchasers.

It’s one of the reasons that California is so screwed up.

Diner Diving

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My job shop took me out to lunch and gave some schwag, a pencil cosy, pen, and sticky pad.

They also took me out to lunch at the Silver Diner.

I like diners, I find them to be a bit of an adventure, as opposed to chains, though this is a local chain with 20 restaurants in Maryland and Virginia.

I had a burger, and it was pretty good. The shoe string fries were very nice, maybe next time I’ll do onion rigs, and the coffee was good, in a “this is a diner, not a latte house” way, which is my preference.

Both the restaurant, and my job shop are recommended, and for the latter, I’d say that even if they hadn’t just fed me.

Military Ignoring “Don’t Ask Don’t Tell” At Least Until You Come Home

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Actually the soldier in question is suggesting that the Military’s policies on gays serving may be changing, because he told his CO’s that he was gay, and because he’s been out for years.

Nope:

“This particular soldier’s unit only recently returned from the war to Fort Hood, Texas, so it’s premature to speculate on any future actions until the young man’s situation can be considered by his chain of command,” Boyce said in a statement.

Translation: Now that you’ve done your tour, and we no longer need you, you will be separated, you will have no benefits, and we want that enlistment bonus back.

God, What Miserable Excuses for Human Beings

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The thing that surprises me is that it’s that this is a Maureen Dowd Op/ED, and I’m not referring to her as a miserable excuse of a human being.

When I walked into the office Monday, people were clustering around a computer to watch what they thought they would never see: Hillary Clinton with the unmistakable look of tears in her eyes.

A woman gazing at the screen was grimacing, saying it was bad. Three guys watched it over and over, drawn to the “humanized” Hillary. One reporter who covers security issues cringed. “We are at war,” he said. “Is this how she’ll talk to Kim Jong-il?”

Another reporter joked: “That crying really seemed genuine. I’ll bet she spent hours thinking about it beforehand.” He added dryly: “Crying doesn’t usually work in campaigns. Only in relationships.”

Though let me say, that MoDo does not come across as any great testimony to humanity in this article either.

Atrios calls them, “…all broken. Complete monsters”, and I’m inclined to agree.

I’m beginning to think that we should abolish Journalism schools, and go back to the old way, paperboy to copy boy to cub reporter to reporter, because the products of Journalism schools seemed to have missed “Humanity 101”.

Of course, these days, I’m not sure how you do the “copy boy” bit.

US Healthcare Sucks

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France, Japan and Australia rated best and the United States worst in new rankings focusing on preventable deaths due to treatable conditions in 19 leading industrialized nations, researchers said on Tuesday.

I am totally not surprised. The US has coasted for 50+ years on the fact that we as a nation were so damn wealthy that we could subscribe to a system that is inefficient and cruel.

That time has passed. There are transactions, healthcare being one, where the classic free market simply fails.

Whether its single payer or a National Health Service (my favorite), it’s clear that, to quote Pete Townshend, The Music Must Change.

Dewey Defeats Truman

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Let me just offer Ramesh Ponnuru, and the rest of my “friends” at the National Review a hearty:

Ha Ha!!!

BTW, with the exception of Jonah Goldberg, you folks was robbed. Bill Kriston can’t write, can’t think, and can’t get the facts straight. If the NY Times wanted a another reactionary in its OP/ED page, they could have selected someone better, though I find his first column so laughable, it amused me.

Like I’ve said before, I’m not classy. I’ve nearly broken 40 posts using the “schadenfreude” tag.