Year: 2009

Economics Update

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Well, out in the real world, housing starts and housing permits both fell unexpectedly, and industrial production fell ½%, which looks bad, while the Baltic Dry Index, an index of ship activity, hit a 7 month high, mostly on Chinese demand for iron ore.

Note that the fall in housing starts and building premits was almost entirely related to a drop in construction of condominiums and apartments.

In the long run, this may be good news, as it means that the supply of new housing units is finally being outstripped by demand, as anemic as it is, which is a first step to recovery.

Note also, however, that housing starts is a leading indicator, and as such this does not speak well for “green shoots” in the economy.

My guess would be that that condos are driving this, as they used to be a step up to a stand alone house, but now people realize that a condo is as hard to get rid of as a case of herpes.

In the delusional world of bankers the news is fairly good, with the LIBOR hitting a to a 4 month low, the Volatility Index (VIX) below 30 for the first time since Lehman imploded, and >Barry Ritholtz’s semi regular credit crisis watch is showing signs of thawing in a number of metrics.

So at this point, the problem may be more the real economy than it is the banks, and the fact that Norway, the outlier in so many good ways, like its lack of corruption in a petro state, has finally joined the rest of Europe in a recession.

Meanwhile, it looks like Allstate and Ameriprise will not be among insurance companies taking TARP money.

I’m not sure if it’s the potential for pay limits, or the stigma, or the fact that they think that Geithner is a turd.

Meanwhile, in currency, the good news in the credit market pushed the dollar down on reduced demand for a safe haven.

Oil broke the $60/bbl barrier in interday trading, before settling at $59.65/bbl, largely on yet another refinery fire….Is it me, or is this beginning to sound awfully convenient?

I’m wondering if they timed it so that deferred maintenance would kick in just before the start of the Summer driving season.

An Idea So Good, that It Can’t Happen Here

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But it appears that the EU is getting ready to give people the same basic rights with software as they have with other consumer products:

Software companies could be held responsible for the security and efficacy of their products, if a new European Commission consumer protection proposal becomes law.

Commissioners Viviane Reding and Meglena Kuneva have proposed that EU consumer protections for physical products be extended to software. The suggested change in the law is part of an EU action agenda put forward by the commissioners after identifying gaps in EU consumer protection rules.

This would invalidate the bullsh$# license provisions which say, “What, you expected this sh#$ to work? Your problem!”

It would, of course, put Microflaccid out of business.

A Big Story on the Nuclear Non Proliferation Front

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The U.S. National Nuclear Security Administration has requested no funds for the reliable replacement warhead program, which means that Barack Obama has largely eschewed a reeplenishment and update of the US nuclear arsenal.

They are seeking $143 to develop advanced validation methods of existing warheads, but one of the promises inherent in the Nuclear Non-Proliferation Treaty was that the nuclear powers would gradually denuclearize themselves, and it appears that this is a big step towards this.

The Collapse of Chinese Rural Healthcare

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I remember reading about the “Barefoot Doctors“, paramedics sent out by Mao Zedong to address the lack of healthcare in the the rural regions, and now, with the Chinese Communist Party’s aggressive focus on economic development in urban areas, their rural healthcare system has been systematically dismantled:

Tan Zhengrui serves some 700 people in China’s rural Miyun county, making doctor’s rounds on his motorcycle with a stethoscope, thermometer and blood-pressure gauge — the sum total of his medical equipment.

Just 80 kilometers (50 miles) from central Beijing, Tan’s clinic in Peng He Yan village consists of a bed, a bench and a couple of desks. He doesn’t even have a scale to weigh patients.

The focus of the article is on the worries that if Swine Flu “goes viral”* in the rural areas, there will be nothing to arrest its spread.

Note that Tan Zhengrui, who started his career as one of Mao’s “Barefoot Doctors,” is due to retire, and there is no replacement in sight, and he suggests a return to the old ways, “We need a policy like Mao’s, to order people out to the countryside.”

Certainly, requiring a year of internship in the rural areas as a part of a doctor’s education would not be a bad thing.

*Sorry for the pun.†
†OK, I’m not really sorry for the pun, I’m an invertebrate punster, so slug me.‡
†Not sorry for that one either.

Adventures in Aircraft Recognition

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Remember my post a few hours ago regarding a photograph of a mystery aircraft photographed over Afghanistan?

I’m almost ready to call it a hoax.

To refresh your memory, here is the photo (top), and here is a photo of the LongEZ modified by the AFRL to test pulse detonation propulsion
mystery aircraft, and below it are three photographs the first one from Wiki, and the next two from Mojave Skies (I’ve mirrored and cropped them to more closely match match the orientation of the mystery pic).

The similarities, cranked wing, large boxy structure under the fuselage, location of the canopy, are all rather striking.

What is missing are the canards, wingtip rudders, and the pulse detonation tubes sticking out the back, but with photoshop/GIMP and some reduction in resolution, I think that the conclusion that it is a faked photograph may be higher on the list.

The aircraft only flew at the Mojave airport, and now sits at the National Museum of the U.S. Air Force at Wright-Patterson Air Force Base outside of Dayton, Ohio, and it clearly never shared even the same hemisphere as Afghanistan.

(click pics for full size images)

The Fall of the House of Hank Greenberg

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The Times of London has a very good account of what took down AIG, and it predates Joseph Cassano, the head of its Financial Products Unit, and it makes it clear that the insurance giant was on shaky ground, with the active participation of its founder Hank Greenberg, for at least a decade previous.

It also notes how Brooksley Born, who was purged by Fed Chairman Alan “Bubbles” Greenspan and Treasury Secretary Robert “Why am I not Under Indictment for Insider Trading” Rubin, knew about the problem, and that it was systemic, and tried to do something about it.

It’s a good read, and highly recommended.

Huh, My Bad

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Actually, as lot of people’s “my bad”, because that picture I posted as a “mystery UAV”, was the wrong picture, as Stephen Trimble observes.

The previous photo was apparently the wrong one, and I posted it in error.

If this one is accurate, and it is almost as bad as the other one, It looks like a slightly cranked wing, and maybe a radome underneath, and a canopy, or maybe air intake above.

In any case, I’m confused, and have no clue as to what is in the air over Afghanistan.

Economics Update

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Well, we have another expert on the economy saying that the so-called green shoots are not real, the Postmaster General of the United States, John Potter, is saying that mail volume continues to fall, and in these days of email, increasingly mail volume is driven by, and so is a a very good indicator of, the state of the mail order business.

On the other hand, the banks have continued loosening short term credit, with
the LIBOR dropping sharply again, indicating that bank to bank lending is getting healther, and the National Association of Homebuilder confidence index rose to 16 from 14, though with neutral being 50, this is a change from “end of the world bad” to “beins strapped in a chair and forced to watch the Ben Affleck Jennifer Lopez movie Gigli” bad.

It doesn’t help that the situation for the GSEs, Fannie and Freddie, is looking increasingly dire, with further losses into the tens, if not hundreds of billions forecast, and one wonders if at some point, a decision is made to wind them down, which would eliminate much of the available financing available for mortgages in the US.

I would also note that, with the big banks concentrating on buying up other banks, the fact that the smaller US look to need an additional $24 billion in capital does not bode well for the finance needs for much of our economy.

While we’re at it, let’s note that the real estate crash is now firmly hitting the higher end of the market, as people purchase those homes as “trade ups,” and they have run out of rubes people with sufficient equity in the old homes to do so.

And in the old standbys, energy and currency, rose by the most in a month, on concerns about Nigerian unrest, a fire at a refinery in Pennsylvania, and concerns about the start of the Summer driving season, while dollar rose on comments by the Japanese Finance Ministry that they needed to work to keep the Yen from appreciating too much.

What the Hell Are They Flying in Afghanistan?

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OK, so we now have a picture to go along with the reports of a stealthy UAV operating in Pakistan and Afghanistan.

So, you have the grainy picture, and the artist’s conception.

The thing is, it doesn’t make any sense to use stealth in Afghanistan.

The Taliban does not have any air defense radars operating, so why work on a specialized stealth shape?

I can see aural stealth (noise), and IR stealth, and visual stealth, but using a radar avoiding platform where there is no radar just makes no sense.

[on edit]
I just came across the BAE Corax (Raven in Greek) as a possible answer.

It’s a British system, and it matches the general configuration, including the long wing, though the photo seems to show a lot more wing sweep.

More Scramjet News

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While DARPA’s Blackswift hypersonic , the dual mode turbojet/scramjet Falcon combined-cycle engine technology (FACET)soldiers on, (paid subscription required) and has actually successfully completed tests up to Mach 4 in a wind tunnel.

The technology used a turbojet to get to high supersonic speeds, at which point the scramjet kicks in, and the turbojet is cocooned, and it is supposed to take a vehicle to around Mach 6.

Additionally, the X-51A scramjet test vehicle has been moved to the Boeing plant at Huntington Beach, CA for structural tests.

It’s not as sophisticated as the FACET, it’s a pure scramjet, and boosted to speed by a rocket booster after being dropped by a B-52, and it’s rather crude, using existing equipment wherever possible, using a rocket booster from ATACMS, an existing fuel control system, and geriatric igniters from the TF-33 engine, along with using a rather heavy tungsten nose cone and ablative coatings elsewhere to deal with the heat.

Maneuverability is Irrelevant

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That’s the latest pitch for the F-35, as noted by Stephen Trimble.

They even have a video showing how their new whiz bank sensor fusion means that you can see everywhere all the time, so maneuverability does not matter, because they have the Electro-Optical Distributed Aperture System (EO-DAS).

You have to love this quote at around the 3½ minute mark, “maneuverability is irrelevant. Instead of mutual kills, the F-35 simply exits the fight, and lets its missiles do the turning.”

Shades of the no gun versions of the F-4 Phantom II, and how well those worked.

Watch the video, and I’ll note how this is disingenuous afterwords.


First, note that with distinctly limited space in the weapons bays, the F-35 is pretty much limited to the AIM-120 AMRAAM and the AIM-9Z, the latest Sidewinder, both of which are smaller, and so have inferior kinematics (range and end game maneuverability) to their Russian and Chinese counterparts, particularly when they start off with an 180° turn with an over the shoulder shot, so shooting the aircraft behind you is not all that likely, since by the time that they are in your missile envelope, they have already fired.

This is particularly true of the Sidewinder, which was never designed with thrust vectoring, and is smaller (5″ diameter as vs 6″ diameter), and is using an older motor not designed for thrust vectoring. The Over the shoulder AMRAAM actually has a new larger motor using the space available from a reduction in the size of its guidance electronics.

Of course, at the ranges where the AMRAAM outperforms the Sidewinder, you probably want to turn and put the nose on target to improve the envelope anyway.

Improved situational awareness is a good thing. Most pilots get shot down by a threat that they never see, but once the guy is in your 6 o’clock, you are hosed.

Ebay Discovered to Have Socially Redeeming Value

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It turns out that stealing artifacts from archeological sites is expensive and time consuming, and eBay allows these folks, who already know a fair amount about the artifacts to to make their money more easily by peddling counterfeits:

A little over a decade ago, archaeologists experienced a collective nightmare–the emergence of eBay, the Internet auction site that, among other things, lets people sell looted artifacts. The black market for antiquities has existed for centuries, of course, with devastating consequences for the world’s cultural heritage. But we could at least take some comfort that it was largely confined to either high-end dealers on one end of the economic spectrum or rural flea markets on the other. The sheer physical constraints of transporting and selling illegal artifacts kept the market relatively small. But the rise of online auction sites promised to drastically alter the landscape. And so it did, just not in the dire way we had anticipated.

Back in the pre-eBay days, the cost of acquiring and selling an antiquity was high. The actual looter was usually paid little, but various middlemen down the line added huge costs. During my 25 years of working in the Andes, I have often seen this dynamic at work. In years past, transporting an object was a big expense, even for portable artifacts, and the potential for arrest added to the total cost of doing business. In addition, the expense of authentication, conservation, and occasional restoration of the pieces, made buying and selling quality antiquities a wealthy person’s vice.

Our greatest fear was that the Internet would democratize antiquities trafficking and lead to widespread looting. This seemed a logical outcome of a system in which anyone could open up an eBay site and sell artifacts dug up by locals anywhere in the world. We feared that an unorganized but massive looting campaign was about to begin, with everything from potsherds to pieces of the Great Wall on the auction block for a few dollars. But a very curious thing has happened. It appears that electronic buying and selling has actually hurt the antiquities trade.

How is it possible? The short answer is that many of the primary “producers” of the objects have shifted from looting sites to faking antiquities. I’ve been tracking eBay antiquities for years now, and from what I can tell, this shift began around 2000, about five years after eBay was established. It is true that fakes have been around for centuries. In 1886, the celebrated Smithsonian archaeologist W. H. Holmes described countless bogus antiquities in Mexico. A few decades later, Egyptologist T. G. Wakeling noted that many ancient Egyptian artifacts were, in fact, fakes. In the 19th century, American and European museums purchased large numbers of “Etruscan” ceramic vessels and sarcophagi that came straight from the kilns of rural Italian farmers. But these were usually the really good fakes, labor-intensive pieces that required lots of work and skill. Today, every grade and kind of antiquity is being mass-produced and sold in quantities too large to imagine.

…

The interaction between technology and society is indeed weird.

Lying Two Faced Rat Bastard!

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I have a joke for you:
Q:What’s the difference between Barack Obama and Dick Cheney?
A: I have no damn clue, because Barack Obama is restarting the military tribunals:

Military Tribunals Will Resume, Obama Says

By Peter Finn
Washington Post Staff Writer
Friday, May 15, 2009 1:55 PM

President Obama said today he will revive military commissions but with greater legal safeguards for defendants to try some terrorist suspects held at the military base in Cuba.

The decision, which follows an intense internal debate, represents something of a reversal by the president who said during the campaign that military courts martial or the federal courts offered a better route to successful prosecution because he said military commissions had been an “enormous failure.”

In recent weeks, however, the administration appears to have bowed to fears articulated by the Pentagon that bringing some detainees before regular courts presented enormous legal hurdles and could risk acquittals.

Risk acquittals? You are doing this because of a Risk of Acquittals?

That’s the F$#@ING POINT OF A F$#@ING TRIAL, YOU F$#@ING ILL CONCEIVED F$#@ING SON OF A F$#@ING WOMBAT!

If you don’t have a “risk of acquittal”, it’s a F$#@ING show trial. So you are pre-announcing that the military commissions are a fraud, because, you don’t want to “risk acquittals”

He’s claiming that they will be fairer than the commissions that Bush came up with, because….Because, He’s Barack Obama, and he’s just so F$#@ING awesome.

Wrong! We are the United States of America, our whole system of government is about not relying on our leaders being, “so F$#@ING awesome,” it’s about the F$#@ING rule of F$#@ING law.

I don’t care how F$#@ING awsome you F$#@ING think you are, that’s not how Americans do things.

That weren’t bad enough you also have this:

The administration is still grappling with how to handle the cases of detainees that are deemed too dangerous to release, but that some in the Pentagon fear cannot be prosecuted in any legal forum. That could lead to the creation of a system of indefinite detention without charge backed by some form of regular court review.

Well, there’s another wonderful bit of accepting who we are as a nation: If there is anything that defines American jurisprudence, and the things that our founding fathers, commie pinkos like George Washington, Thomas Jefferson, and Ben Franklin, it was that they found the very idea that someone could use the state could detain someone forever without any recourse to legal process to be an anathema.

It’s wrong, it’s stupid, and it’s un-American.

Glenn Greenwald, who is far kinder than I am, or perhaps more well spoken (better writer is a given), calls this “Obama’s kinder, gentler military commissions.” He quotes many people who are now serving in the Obama administration, as well as President Obama when he was candidate Obama, noting that the problem is not just that the processes were wrong, but that the entire idea of a special court with special procedures is wrong.

What is most pernicious, quoting a letter in response to Greenwald’s article is this:

The other aspect of it, and you hinted at this the other day, is this: Under Bush, half the country was trained to recite all sorts of dangerous propositions about how important it is to vest The President with all sorts of powers to keep us safe, how vital it is that he keep things secret to protect us from the Terrorists, how we can trust in our leaders to exercise in ways we don’t understand because we know he’s good at heart.

And now, with Obama, a significant portion of the other half of the country is being trained to recite the same things.

Once again proving that almost any person on the Internet can write, and think, more clearly than I can.

And then there’s what Digby said:

By the way, I have to wonder why it’s taken centuries to come up with the civilian and military justice systems? Apparently, creating a new one is piece of cake. Why all the sturm and drang with appellate court challenges and legislation? Just put it in a presidential memo and carry on.

What has been announced today is disgraceful.

Economics Update

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Grim news out of Europe, with Euro zone GDP collapsing by 2.5% in the first quarter…That’s a quarterly decline, not a year over year decline, and largest decline for the Euro zone in at least 13 years. Before that there were no Euro zone statistics. (It should be noted that the YoY number is 4.6%, which is merely scary, as opposed to a terrifying double digit annual decline)

Not surprisingly, this pushed the dollar up relative to the Euro.

As bad as this was, it was even worse in Eastern Europe, because their recent growth was driven by exports and foreign investments looking for high returns, which are both gone.

Again using the quarterly numbers, Hungary -6.4%, Slovakia -5.4%, the Czech Republic -3.4, and Romania -6.4%.

A lot of this was driven by Germany’s contraction, which was among the largest in Western Europe, because they have a Hooverite as Chancellor, which was -3.8%, the biggest decline in Germany since the end of WWII.

Seriously we are talking end of the world numbers, he said, citing experts:

Dr Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath of God type stuff.
Dr. Peter Venkman: Exactly.
Dr Ray Stantz: Fire and brimstone coming down from the skies! Rivers and seas boiling!
Dr. Egon Spengler: Forty years of darkness! Earthquakes, volcanoes…
Winston Zeddemore: The dead rising from the grave!
Dr. Peter Venkman: Human sacrifice, dogs and cats living together… mass hysteria!

Of course you have to go to Russia for a really scary number, -9.5% in the first quarter….Annualize that.

The news from the US was relatively mild, with the Empire State Manufacturing Survey showing only a modest decline. The index was up, but still below zero, so it still indicates contraction, and the Fed’s report on capacity utilization showed a marked decline.

We are still seeing the largest year over year decline in consumer prices since June 1955, but month to month indicates that there was no change, which eases deflationary concerns…A bit.

In banking, we are seeing further signs of easing with both the LIBOR and TED spread falling.

The easing of credit may be why the FDIC is walking away from its plan to guarantee 10 year bank bonds, though there are also indications of push-back from Treasury.

Meanwhile, the horrible GDP numbers from Europe, and the stronger dollar drove oil down, though retail gasoline is moving in the opposite direction, up 12% over the past 17 days.