Quotulatiousness

March 31, 2013

The deep strangeness of the Cyprus bank haircuts

Filed under: Economics, Europe, Greece, Russia — Tags: , — Nicholas @ 11:36

At Forbes, Tim Worstall has some thoughts on the oddities now apparent in how the Cyprus banking crisis has played out so far:

Now that we’re seeing the real numbers coming out about who loses what in the Cyprus haircut/bank consolidations there’s something very strange about the numbers. Whiffy even, and that’s not with a good odour to it either. For, as far as I can tell at least, the haircuts are far larger than they need to be in order to make good the damage that we were told about. I’m therefore coming around to the idea that this wasn’t what we’ve been told it was, a story of Russian offshore deposits and tax avoidance. Rather, it’s two banks which invested regular domestic deposits into just terrible opportunities and then lost it all.

I don’t think I can make the case absolutely but I think it’s a case worth at least investigating.

[. . .]

But back to the point I’m trying to work through here. We’ve been told that the immediate cause was all about all that foreign money which flooded the country’s banking system. Yet when we look at the amount that is being raised by the haircuts it doesn’t look as if the two bankrupt banks had all that much of those foreign deposits. It looks very much like the banks which had the deposits didn’t invest badly and thus didn’t go bankrupt. So the problem isn’t therefore one of all that foreign money.

Rather, it’s a problem of where those two banks invested their deposits. And it looks as if this was largely in Greek Government and Cypriot Government bonds. Which is why they are bust.

The question is not whether armed drones will be deployed domestically, but when

Filed under: Law, Liberty, Technology, USA — Tags: , , , , , , — Nicholas @ 11:01

Glenn Greenwald presents a strong case that it is inevitable that armed drones will be deployed over the US:

The use of drones by domestic US law enforcement agencies is growing rapidly, both in terms of numbers and types of usage. As a result, civil liberties and privacy groups led by the ACLU — while accepting that domestic drones are inevitable — have been devoting increasing efforts to publicizing their unique dangers and agitating for statutory limits. These efforts are being impeded by those who mock the idea that domestic drones pose unique dangers (often the same people who mock concern over their usage on foreign soil). This dismissive posture is grounded not only in soft authoritarianism (a religious-type faith in the Goodness of US political leaders and state power generally) but also ignorance over current drone capabilities, the ways drones are now being developed and marketed for domestic use, and the activities of the increasingly powerful domestic drone lobby. So it’s quite worthwhile to lay out the key under-discussed facts shaping this issue.

I’m going to focus here most on domestic surveillance drones, but I want to say a few words about weaponized drones. The belief that weaponized drones won’t be used on US soil is patently irrational. Of course they will be. It’s not just likely but inevitable. Police departments are already speaking openly about how their drones “could be equipped to carry nonlethal weapons such as Tasers or a bean-bag gun.” The drone industry has already developed and is now aggressively marketing precisely such weaponized drones for domestic law enforcement use. It likely won’t be in the form that has received the most media attention: the type of large Predator or Reaper drones that shoot Hellfire missiles which destroy homes and cars in Pakistan, Yemen, Somalia, Afghanistan and multiple other countries aimed at Muslims (although US law enforcement agencies already possess Predator drones and have used them over US soil for surveillance).

Ralph Klein, RIP

Filed under: Cancon, History, Media, Politics — Tags: , , , — Nicholas @ 09:47

In Maclean’s, Colby Cosh talks about the late former premier of Alberta:

Ralph Klein, the former premier of Alberta, has died at 70. He shall not now ever be able to collect on the vast debt of apologies he is owed by calumniators, false chroniclers, lazy pundits, and political enemies. The misunderstandings of Ralph have been copious and mostly deliberate. He is still routinely characterized as an anti-gay social conservative in league with sinister theocratic forces, even though he was personally about as churchy as an alley cat. More importantly, he took a diamond-hard line against the use of the “notwithstanding” clause after the Supreme Court wrote sexual orientation into Alberta’s discrimination law in the Vriend decision; and he insisted the public accept the court’s verdict.

He is accused of failing to maximize the public benefits of Alberta’s resource wealth and “save” oil and gas funds for the future, although government resource revenues grew more than fourfold in his 14 years as premier and the net financial position of the province improved by $43 billion. Both promptly collapsed under his bamboozled successor Ed Stelmach, and have not yet recovered to Ralphian levels. Klein is also charged with failing to pay enough conscious attention to economic diversification, a concept that served as the pretext for a hundred costly boondoggles under earlier Conservative regimes; yet somehow he succeeded in presiding over an Alberta economy whose GDP moved sharply away from energy-dependence, and which saw the emergence of previously unimaginable non-energy businesses like software maker Matrikon and game manufacturer BioWare. Whether or not you care to give an iota of credit to Klein, his rule coincided with Alberta becoming a place young technicians and entrepreneurs don’t have to be stupid not to leave.

[. . .]

There is a basic failure among diehard enemies of the Klein government to accept the evidence that his energy, privatization, and flat-tax policies increased the Alberta government’s capacity to spend and provide services — that the more we got of Klein, the safer and more lavish their cherished government entitlements appeared to be. They are not at all safe now; the profoundest irony of Klein’s demise is that it has arrived at a moment in which present premier Alison Redford faces choices like those Klein confronted when he captured the Progressive Conservative leadership in 1992.

Indeed, when Redford’s heavily obfuscated budget plans are translated into English, one sees that the next few years in Alberta must inevitably resemble the early days of Kleinism. Premier Redford is trying to protect spending on infrastructure to prevent a “deficit” in upkeep on buildings and transport, of the sort that materialized after Klein’s initial austerities. But operational spending, particularly on personnel expenses, is bound to be slashed, Klein-fashion. And the slashes will have to be all the deeper if the bridges are going to get painted. A fierce fight with the public sector (whose unfunded pension liabilities grew 80% between Klein’s last budget and Stelmach’s second) is already taking shape, with teachers, doctors, and pharmacists on the verge of all-out war over their pay envelopes. Haven’t the Klein-haters who fell over themselves to vote for internationalist, socially concerned Alison seen this movie before?

March 30, 2013

All those manufacturing jobs are never coming back

Filed under: Britain, Business, China, Economics, USA — Tags: , — Nicholas @ 08:37

Tim Worstall explains why this is at the Adam Smith Institute blog:

I’m always rather puzzled by those who shout that we’ve got to bring manufacturing back to the UK. Apparently this will solve all our problems over what to do with dim Northern lads or something. Once they’re all hammering out whippet flanges then we just won’t have a problem with unemployment ever again. The problem with this idea is that modern manufacturing simply doesn’t provide many jobs. And if it were to provide mass employment it would be very badly paid employment too:

    Americans working to produce traded goods and services earn, roughly, according to their productivity. If low-skill workers in America aren’t much more productive in manufacture of traded goods and services than low-skill workers in China, then they can’t earn much more than workers in China while being employed in manufacture of traded goods and services. They can earn a rich-world wage in production of non-traded goods and services, like sandwiches and haircuts, so long as there is sufficient local demand. In other words, the only way to get less-skilled Americans a good wage in a manufacturing industry is to significantly raise their skill and productivity level. If that can’t be accomplished, they can only hope to find good wages in non-traded industries. At least, that is, until wages of less-skilled workers across the developing world come much closer to converging with those in America.

Of course, that’s all about America but the same logic pertains here as well. Chinese manufacturing wages are around $6,000 a year at present. Meaning that if we had mass employment in manufacturing, as they do, then wages would need to be around that level. Or, alternatively, UK based manufacturing would have to be much more productive to support higher wages. And “more productive” is the same as saying “uses less labour”. Thus you can have few well paid jobs (in the Rolls Royces etc of this world) or you can have many badly paid jobs (Shenzen). It isn’t actually possible to mix and match between the two.

QotD: Stupidity

Filed under: Books, Humour, Quotations — Tags: — Nicholas @ 08:29

“No one would be that stu—”

Susan stopped. Of course someone would be that stupid. Some humans would do anything to see if it was possible to do it. If you put a large switch in some cave somewhere, with a sign on it, saying “End of the World Switch. PLEASE DO NOT TOUCH”, the paint wouldn’t even have time to dry.

Terry Pratchett, Thief of Time

The impact of a bayonet charge

Filed under: Britain, Middle East, Military, USA, Weapons — Tags: , , , — Nicholas @ 08:22

Strategy Page on one of the most antique weapons still regularly issued to infantry troops:

Although the U.S. Army dropped bayonet training three years ago, most ground troops world-wide still get some of it. Some army personnel want to bring it back. The U.S. Marine Corps still trains riflemen on how to use the bayonet, as does Britain. In fact, British troops were the last troops to actually use a bayonet charge in combat. This happened in 2004, when a patrol of 20 British troops in Basra, Iraq were ambushed by about a hundred Iraqi Shia militiamen. Help was still on the way when the commander of the British troops realized they were running out of ammo and the Iraqi gunmen were moving closer. So he ordered his troops to fix bayonets and charge. That thoroughly demoralized the Iraqis who after some close combat with the British (Scots, actually) left 35 of them dead, all ran away. Some of the British troops were wounded, but all survived. This, however, was one of the very few such incidents of bayonet use in the last decade. The problem is that Western troops tend to be well trained marksmen and Iraq or Afghan gunmen have learned not to get too close. So opportunities for launching a bayonet charge are increasingly rare.

While the U.S. Army eliminated bayonet drills from basic training, the U.S. Marine Corps has not. The marines did this not so much for developing weapons skills, but for mentally conditioning marines for combat. The bayonet drills are part of larger program emphasizing one-on-one combat. The army does this, to a lesser extent, and now without bayonet training.

The army attitude towards close combat is a bit different, and always has been. While the bayonet and the bayonet charge have a firm place in military history, the reality is rather different. This has had a heavy influence on the army bayonet training decision. Bayonets are often still carried, but rarely attached to the front of a rifle. Most modern bayonets are simply knives, which are handy for all sorts of things on the battlefield. Sticking them in the enemy is rarely one of them. Army leaders saw training new recruits in the battlefield use of the bayonet as misleading and a waste of time. The marines looked beyond the weapon, to the spirit and enthusiasm with which it, and many other implements of destruction, are used in close combat.

Looking at crowdfunding as a replacement for venture capital

Filed under: Business, Economics, Technology — Tags: , , , — Nicholas @ 07:43

ESR looks at where crowdfunding fits in the traditional tech start-up food chain:

In How crowdfunding and the JOBS Act will shape open source companies, Fred Trotter proposes that crowdfunding a la Kickstarter and IndieGoGo is going to displace venture capitalists as the normal engine of funding for open-source tech startups, and that this development will be a tremendous enabler. Trotter paints a rosy picture of idealistic geeks enabled to do fully open-source projects because they’ll no longer feel as pressed to offer a lucrative early exit to VCs on the promise of rent capture from proprietary technology.

Some of the early evidence from crowdfunding successes does seem to point at this kind of outcome, especially near 3D printing and consumer electronics with a lot of geek buy-in. And I’d love to believe all of Trotter’s optimism. But there’s a nagging problem of scale here that makes me think the actual consequences will be more mixed and messy than he suggests.

In general, VCs don’t want to talk to you at all unless they can see a good case for ploughing in at least $2 million, and they don’t get really interested below a scale of about $15M. This is because the amount of time required for them to babysit an investment (sit on the company’s board, assist job searches, etc.) doesn’t scale down for smaller investments — small plays are just as much work for much less money. This is why there’s a second class of investors, often called “angels”, who trade early financing on the $100K order of magnitude for equity. The normal trajectory of a startup goes from friends & family money through angels up to VCs. Each successive stage in this pipeline is generally placing a larger bet and accordingly has less risk tolerance and a higher time discount than the previous; VCs, in particular, will be looking for a fast cash-out via initial public offering.

The problem is this: it’s quite rare for crowdfunding to raise money even equivalent to the low-end threshold of a VC, let alone the volume they lay down when they’re willing to bet heavily. Unless crowdfunding becomes an order of magnitude more effective than it is now (which seems to me possible but unlikely) the financing source it will displace isn’t VCs but angels.

March 29, 2013

This week in Guild Wars 2

Filed under: Gaming — Tags: , — Nicholas @ 11:44

My weekly Guild Wars 2 community round-up at GuildMag is now online. This week’s round-up has lots of reaction to the big March WvW update, plus the usual assortment of blog posts, videos, podcasts, and fan fiction from around the GW2 community.

If cable company ads were honest, we’d see something very similar to this

Filed under: Business, Cancon, Media — Tags: , , , , — Nicholas @ 10:10

H/T to Joey “Accordion Guy” deVilla for the link.

If North American cable-and-internet providers were honest, they’d produce an ad that went like this. Note that there’s some swearing involved, as is often the case with cable-and-internet providers.

Cyprus has become the EU’s “lab rat”

Filed under: Bureaucracy, Economics, Europe — Tags: , , , — Nicholas @ 09:59

In sp!ked, Bruno Waterfield talks about the EU’s most recent involuntary experimental subject, Cyprus:

Every negative European political trend has deepened in the latest round of the Eurozone crisis, as Cyprus has been treated by the EU with a disdain for self-determination worthy of the high age of imperialism. It is this which is really troubling, not the haircuts for depositors or the bank closures. In effect, an entire island nation has been made a laboratory rat for a new Eurozone experiment in rebalancing economies in the EU single currency — whether the Cypriots like it or not.

Cyprus is the perfect fall guy for the EU and IMF experts who, despite the mess in Greece and elsewhere in southern Europe, still believe they know best how to run a nation’s affairs. That’s because, as well as being too small to count, especially for the markets, Cyprus is easily painted as a bad guy, a swarthy, even Levantine crook which launders dirty Russian money (nearly a third of Cypriot bank deposits) for ‘dodgy’ oligarchs. This whiff of corruption (nothing new to Cyprus, or other European banks for that matter) provides the perfect pretext for treating Cyprus as a case apart. This is meant to soothe the fears of senior northern European debt holders — it is corrupt Cyprus, and not failed private risk in general, that has been targeted.

So, because it is small, and in the eyes of the Eurozone social engineers, easily contained, Cyprus has been selected to be an experiment, potentially a model for Portugal or Spain. And if it all goes horribly wrong… well, Cyprus is small and a dodgy special case, so who cares? The EU doesn’t.

Demonizing smokers hasn’t forced them to quit … let’s start sending them to psychiatric care instead

Filed under: Britain, Health, Media — Tags: , , , , , — Nicholas @ 09:53

When the all the persuasion, “nudging”, shaming, harassment, and legal shenanigans haven’t worked, try taking a leaf out of the old Soviet Union playbook for dealing with dissidents:

Smoking may be a sign of psychiatric illness, experts say. Doctors should routinely consider referring people who smoke to mental health services, in case they need treatment, they add.

The controversial recommendation from the British Lung Foundation, a charity, comes in response to a major report, Smoking and Mental Health, published this week by the Royal College of Physicians and the Royal College of Psychiatrists with the Faculty of Public Health. It says that almost one in three cigarettes smoked in Britain today is smoked by someone with a mental disorder. When people with drug and alcohol problems are included the proportion is even higher.

The reason is that smoking rates have more than halved over the past 50 years, but the decline has not happened equally in all parts of society.

“Smoking is increasingly becoming the domain of the most disadvantaged: the poor, homeless, imprisoned and those with mental disorder. This is a damning indictment of UK public health policy and clinical service provision,” the report says.

Duffel Blog: F-35 inducted into NYC Air Museum

Filed under: Humour, Military, USA — Tags: , , , — Nicholas @ 09:28

A scoop from the keen bunch at The Duffel Blog:

Sources confirmed that the F-35 Lightning II was inducted yesterday into the Intrepid, Sea, Air, and Space Museum in New York City. The closed door ceremony was the high point for the F-35, capping off the fighter’s illustrious warfighting career as the most colossal fuck-up in military acquisition history.

Speaking to Duffel Blog reporters, museum curator Saul Rosenblatt said, “We weren’t sure if the F-35 was up to snuff as an exhibit in this museum. We take great pride in displaying planes with a robust combat history, like the A-4 Skyhawk and the A-6 Intruder. We passed on the F-22 Raptor because that was an even bigger piece of shit fighter jet. We had no choice but to display the F-35 between the crapper and the concession stand.”

[. . .]

“At a cost of over $137 million per plane, it makes the surface area underneath the exhibit’s landing gear the most expensive real estate in New York City. Per square foot, this will drive up apartment values across the entire West Side,” said an overjoyed real estate agent.

“For the project’s total cost of almost $400 billion you could have bought the Louvre and had some money left to shop at Saks,” a downtown designer told TDB. When asked his opinion about the F-35, construction worker Dominick Antonelli said “that’s all we need here, another overpaid, sucky, New York Jet.”

March 28, 2013

Paul Wells: They didn’t call it a budget because it isn’t a budget

Filed under: Cancon, Economics, Government, Media — Tags: , , , , — Nicholas @ 13:48

For example, a budget would actually provide you with comprehensible statements of anticipated revenues and spending for all the big ticket items:

I work in Ottawa and I try to stay on top of things, but this was news to me. In fact, I didn’t even notice it until four days after Finance Minister Jim Flaherty released his — er — plan on March 21. Of course, there was much chortling in the press gallery at the government’s insistence on calling its annual account of revenues and expenses something besides a budget. But the significance of the thing took a while to sink in. Flaherty and his boss, Stephen Harper, do not call their big annual document a “budget” anymore because it is no longer a budget.

A budget, as anyone who has tried to run a household knows, is the moment when you stop telling yourself soothing tales and inject a note of reality into your life. On page 64 of the 1997 budget, for instance, the government of the day gave us an “outlook for program spending” with multi-year projections for spending levels in defence, Aboriginal programs, “business subsidies” and so on. It was that straightforward.

Harper’s Economic Action Plans, by contrast, are carnivals of fantasy. EAP13 — we will use the government-approved hashtag, which I assume is pronounced to sound like a shriek of terror — is 200 pages longer than Budget 1997 but finds no room for a one-page program-spending outlook, nor indeed for a program-spending outlook of any length. Like the best funhouses, this one depends on its volume for much of its amusement value. The decision to merge CIDA into the Foreign Affairs Department is announced on the 31st page of a chapter on “supporting families and communities,” and I can only assume it is there as a reward for perseverance. The morning after Flaherty’s speech, a diplomat asked me how it is possible for a G7 country to release a budget that does not at any point say how much the government will spend on defence next year. I gave the fellow a long answer. I should have said his premise was wrong, because — stop me if you’ve heard this — it’s not a budget.

Challenging Prohibition-era federal laws

Filed under: Cancon, Law, Liberty, Wine — Tags: , , , , — Nicholas @ 09:57

Michael Pinkus updates us on a hopeful sign that we may soon see the end of one of Canada’s surviving Prohibition-era laws:

Almost two years ago I published in these very pages an interview I did with Ian Blue, a lawyer who had turned his focus to liquor laws, constitutional issues and even more importantly, the Importation of Intoxicating Liquors Act (IILA). Now, many think the law was struck down but in fact there was just an amendment made to the federal law that now allows you to carry a certain amount of booze for personal use across provincial borders without fear of being charged by your provincial liquor board. So why am I bringing up this “ancient history” — well it seems the constitutional challenge that Ian was hoping for has finally got a name and a voice in the form of Vin de Garde wine club, and the challenge is going forward — before you blindly blow this off as another soon-to-be failed attempt to challenge the power and might of the LCBO I suggest we revisit the interview, the article and the issues that surround it; there seems to be more relevance here than ever before. This is going to get very interesting.

    Have you ever been out to British Columbia and brought back a couple of bottles of wine? Better yet, have you ever driven across the border to Quebec and brought back a case of beer? If you have done either of these things then you my friend are a felon, capital F-E-L-O-N. That’s all according to the Importation of Intoxicating Liquors Act (IILA) of 1928, which is still on the books and very much in use by our liquor board (the LCBO). What it boils down to is, you can travel to Cuba and bring back 2 bottles of rum, go stateside and return with two bottles of wine, go to Mexico and carry back 4 cervesas; but you can’t cross Canadian provincial borders carrying any booze back with you. So, who’s ready to turn themselves in?

    Not so fast says lawyer Ian Blue, who has been looking into the matter for us. Ian is an energy lawyer who found himself in a conversation with fellow lawyer, Arnold Schwisberg, about the IILA and like an ear-worm (a song that won’t leave your head) Ian couldn’t stop thinking about the absurdity of the Act. “The constitutional issues around inter-provincial and international sales of energy have equipped me admirably to look at the IILA … it stuck with me until I wrote my paper on the subject ‘On the Rocks’.” Ian subsequently wrote a second article on the same topic (On the Rocks; The Gold Seal Case: A Surprising Second Look); both appear in Advocate Quarterly.

    [. . .]

    “Liquor boards would continue to exist, their power would just be diminished,” but they would definitely put up a fight, “You’re fighting entrenched interests, so if you’re diminishing their power they’re going to fight to try and keep it.”

    How big a fight? “I would be fighting 10 sets of lawyers one each from every attorney general’s department; probably 10 sets of lawyers from the provincial liquor commission; and probably lawyers from the police associations,” estimates Ian, but that’s just the tip of the iceberg. “What [a win] would mean is that if I wanted to have a private liquor store I could set one up and I could buy directly from the wineries in Niagara or British Columbia or foreign countries. Nova Scotia restaurants could order wines from Ontario. It would just loosen up the system. [It] doesn’t mean licentiousness; the province could still legislate standards for people who work in liquor stores, store hours, security, all safe drinking training, all that stuff; it’s just that you would not need to have liquor and wine sold through publicly funded liquor stores; being sold to you by unionized staff on defined benefit pension plans.”

    But what about those who claim a loss of provincial revenue as their argument for keeping the liquor boards as is? According to winelaw.ca, “The Provincial Governments make their money regardless of whether the sale is made in a government store or a private store. In fact, the revenue that government makes from liquor on a per capita basis for 2007/2008 was as follows: $192 for BC [a mix of private and government stores], $190 for Alberta [all private stores], and $139 for Ontario.”

“Gaming in the 1970 and 80s felt a little like being into punk rock”

Filed under: Gaming, Media — Tags: , , , , — Nicholas @ 09:32

Explanation of the headline: gaming in the 70’s was like being into punk because it was very much an outsider interest, you had to go well out of your way to find it, and it was cool (at least to you, not so much to your family and non-gaming friends). Peter Bebergal finds online caches of some of the classic gaming magazines of the day:

The Internet Archive is one of the great treasures of the internet, housing content in every media; texts, video, audio. It’s also the home of the Wayback Machine, an archive of the Internet from 1996. I thought I had explored the site pretty thoroughly — at least according to my own interests — but recently came across runs of some of the great gaming magazines of the 1970s and 80s; The Space Gamer, Ares, Polyhedron, The General, and — temporarily — Dragon Magazine. These magazines represent not only the golden age of gaming, but expose the thrill and excitement of gaming when it was still new, still on the margins. It was a time when gaming still felt a little, dare I say, punk.

Today, finding members of your particular community of interest is a Google search away, but in the 1970s the only way to be in contact with others who shared interests was through magazines. For many gamers, even finding the games could be difficult. Discovering the gaming magazines revealed an active gaming industry that still maintained a sense of being on the vanguard.

The earliest issues show off their newsletter origins. The Space Gamer and The General started off on plain paper in black and white. Even the first issues of Dragon look like a teenager’s fanzine, but the enthusiasm and energy are infectious. Who couldn’t love the introduction of new monsters for your campaign such as the Gem Var, a creature composed entirely of gemstone and that cannot take damage from bladed weapons. The artists, editors and letter writers were the best friends you had never met. Gaming in the 1970 and 80s felt a little like being into punk rock. You knew it was offbeat, knew that outsiders didn’t get it, but you also knew that this was cool. Even the advertisements and listings of conventions expanded the universe of gaming a thousandfold. Not unlike ordering 45s of unknown bands from punk zines, was sending away for microgames, miniatures and supplements from tiny game publishers.

While I wasn’t as much into the early roleplaying games, I was very much into wargaming and that was in the “respectable” part of the gaming ghetto until the boom in RPGs pretty much took all the oxygen out of the room. Of course, even in the “respectable” area, there were the Napoleonic grognards and the frisson-of-insanity East Front fanatics…

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