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Sunday, September 29, 2019
Reading List: The Boys' Book of Model Railroading
- Yates, Raymond F. The Boys' Book of Model Railroading. New York: Harper & Row, 1951. ISBN 978-1-127-46606-1.
- In the years before World War II, Lionel was the leader in the U.S. in manufacturing of model railroad equipment, specialising in “tinplate” models which were often unrealistic in scale, painted in garish colours, and appealing to young children and the mothers who bought them as gifts. During the war, the company turned to production of items for the U.S. Navy. After the war, the company returned to the model railroad market, remaking their product line with more realistic models. This coincided with the arrival of the baby boom generation, which, as the boys grew up, had an unlimited appetite for ever more complicated and realistic model railroads, which Lionel was eager to meet with simple, rugged, and affordable gear which set the standard for model railroading for a generation. This book, published in 1951, just as Lionel was reaching the peak of its success, was written by Raymond F. Yates, author of earlier classics such as A Boy and a Battery and A Boy and a Motor, which were perennially wait-listed at the public library when I was a kid during the 1950s. The book starts with the basics of electricity, then moves on to a totally Lionel-based view of the model railroading hobby. There are numerous do-it-yourself projects, ranging from building simple scenery to complex remote-controlled projects with both mechanical and electrical actuation. There is even a section on replacing the unsightly centre third rail of Lionel O-gauge track with a subtle third rail located to the side of the track which the author notes “should be undertaken only if you are prepared to do a lot of work and if you know how to use a soldering iron.” Imagine what this requires for transmitting current across switches and crossovers! Although I read this book, back in the day, I'm glad I never went that deeply down the rabbit hole. I learned a few things here I never stumbled across while running my Lionel oval layout during the Eisenhower administration or in engineering school many years later. For example: why did Lionel opt for AC power and a three rail system rather than the obvious approach of DC motors and two rails, which makes it easier, for example, to reverse trains and looks more like the real thing? The answer is that a three rail system with AC power is symmetrical, and allows all kinds of complicated geometries in layouts without worrying about cross-polarity connections on junctions. AC power allows using inexpensive transformers to run the layout from mains power without rectifiers which, in the 1950s, would have meant messy and inefficient selenium stacks prone to blowing up into toxic garlic-smelling fumes if mistreated. But many of the Lionel remote control gizmos, such as the knuckle couplers, switches, semaphore signals, and that eternal favourite, the giraffe car, used solenoids as actuators. How could that work with AC power? Well, think about it—if you have a soft iron plunger within the coil, but not at its centre, when current is applied to the coil, the induced magnetic field will pull it into the centre of the coil. This force is independent of the direction of the current. So an alternating current will create a varying magnetic field which, averaged over the mechanical inertia of the plunger, will still pull it in as long as the solenoid is energised. In practice, running a solenoid on AC may result in a hum, buzz, or chatter, which can be avoided by including a shading coil, in which an induced current creates a magnetic field 90° out of phase to the alternating current in the main coil and smooths the magnetic field actuating the plunger. I never knew that; did you? This is a book for boys. There is only a hint of the fanaticism to which the hobby of model railroading can be taken. We catch a whiff of it in the chapter about running the railroad on a published schedule, with telegraph connections between dispatchers and clocks modified to keep “scale time”. All in all, it was great fun then, and great fun to recall now. To see how far off the deep end O-gauge model railroading has gone since 1951, check out the Lionel Trains 2019 Catalogue. This book is out of print, but used copies are readily available at a reasonable price.
Tuesday, September 24, 2019
Jean-Daniel Nicoud visits Fourmilab
On September 22nd, 2019, Prof. Jean-Daniel Nicoud, founder of the Laboratoire de Micro-Informatique (LAMI) at the Ecole Polytechnique Fédérale de Lausanne (EPFL) in Switzerland, visited Fourmilab. LAMI pioneered the optical computer mouse, the Smaky computer, and the Kephera robot, all of which were commercialised by spin-off companies, including Logitech. In the mid-1990s, I supported a project at LAMI/EPFL to explore possible technological means of aiding in the removal of anti-personnel land mines which are the legacy of conflicts around the globe. The project sponsored two conferences, in Lausanne, Switzerland and Zagreb, Croatia, which were among the first to bring together operators working in de-mining in the field, technologists with promising approaches to improving the efficiency of such work, and NGOs looking to spend their money more effectively in achieving the ultimate goal of eliminating this legacy of war. LAMI developed a lightweight robot, PEMEX, which served as a testbed for sensor and actuator technology. Since his retirement from EPFL in 2000, Prof. Nicoud has continued to pioneer cutting-edge technology through his company, DIDEL. There you will find what you need to build and fly ultralight aircraft (did I say “ultralight”?—we're talking less than ten grams!), program Arduinos, and explore the frontiers of the Maker culture on the threshold of the Roaring Twenties. We had a great visit, and only spent a little time talking about the old days of building circuits from SSI TTL and 8 bit microprocessors, but mostly about what we, and our successors, will accomplish in the coming decade and afterward with the “extravagant computing” resources at their disposal. These are the good old days.Monday, September 23, 2019
Reading List: Permanent Record
- Snowden, Edward. Permanent Record. New York: Metropolitan Books, 2019. ISBN 978-1-250-23723-1.
-
The revolution in communication and computing technologies
which has continually accelerated since the introduction of
integrated circuits in the 1960s and has since given
rise to the Internet, ubiquitous mobile telephony,
vast data centres with formidable processing and storage
capacity, and technologies such as natural language text processing,
voice recognition, and image analysis, has created the
potential, for the first time in human history, of
mass surveillance to a degree unimagined even in dystopian
fiction such as George Orwell's
1984 or attempted by
the secret police of totalitarian regimes like
the Soviet Union, Nazi Germany, or North Korea. But,
residents of enlightened developed countries
such as the United States thought, they were protected,
by legal safeguards such as the
Fourth
Amendment to the U.S. Constitution, from having their
government deploy such forbidding tools against its
own citizens. Certainly, there was awareness, from
disclosures such as those in James Bamford's 1982
book The Puzzle Palace,
that agencies such as the National Security Agency (NSA) were
employing advanced and highly secret technologies to spy
upon foreign governments and their agents who might attempt
to harm the United States and its citizens, but their
activities were circumscribed by a legal framework which
strictly limited the scope of their domestic activities.
Well, that's what most people believed until the courageous
acts by Edward Snowden, a senior technical contractor
working for the NSA, revealed, in 2013, multiple programs of
indiscriminate mass surveillance directed against, well,
everybody in the world, U.S. citizens most definitely
included. The NSA had developed and deployed a large array
of hardware and software tools whose mission was essentially
to capture all the communications and personal data of everybody
in the world, scan it for items of interest, and store it
forever where it could be accessed in future investigations.
Data were collected through a multitude of means:
monitoring traffic across the Internet, collecting mobile
phone call and location data (estimated at five billion
records per day in 2013), spidering data from Web sites,
breaking vulnerable encryption technologies, working
with “corporate partners” to snoop data passing
through their facilities, and fusing this vast and varied
data with query tools such as
XKEYSCORE,
which might be thought of as a Google search engine built
by people who from the outset proclaimed, “Heck yes,
we're evil!”
How did Edward Snowden, over his career a contractor
employee for companies including BAE Systems, Dell Computer,
and Booz Allen Hamilton, and a government employee of
the CIA, obtain access to such carefully guarded secrets?
What motivated him to disclose this information to the
media? How did he spirit the information out of the
famously security-obsessed NSA and get it into the
hands of the media? And what were the consequences of
his actions? All of these questions are answered in
this beautifully written, relentlessly candid,
passionately argued, and technologically insightful
book by the person who, more than anyone else, is
responsible for revealing the malignant ambition of
the government of the United States and its accomplices
in the Five Eyes (Australia, Canada, New Zealand,
and the United Kingdom) to implement and deploy a
global
panopticon
which would shrink the scope of privacy of individuals
to essentially zero—in the words of an NSA PowerPoint
(of course) presentation from 2011, “Sniff It All,
Know It All, Collect It All, Process It All, Exploit It
All, Partner It All”. They didn't mention
“Store It All Forever”, but with the construction
of the US$1.5 billion
Utah
Data Center which consumes 65 megawatts of electricity,
it's pretty clear that's what they're doing.
Edward Snowden was born in 1983 and grew up along with the
personal computer revolution. His first contact with
computers was when his father brought home a Commodore 64,
on which father and son would play many games. Later, just
seven years old, his father introduced him to programming
on a computer at the Coast Guard base where he worked, and,
a few years later, when the family had moved to the Maryland
suburbs of Washington DC after his father had been transferred
to Coast Guard Headquarters, the family got a Compaq 486
PC clone which opened the world of programming and exploration
of online groups and the nascent World Wide Web via the
narrow pipe of a dial-up connection to America Online. In
those golden days of the 1990s, the Internet was mostly
created by individuals for individuals, and you could have
any identity, or as many identities as you wished, inventing
and discarding them as you explored the world and yourself.
This was ideal for a youth who wasn't interested in
sports and tended to be reserved in the presence of others.
He explored the many corners of the Internet and, like
so many with the talent for understanding complex systems,
learned to deduce the rules governing systems and explore
ways of using them to his own ends. Bob Bickford defines
a hacker as “Any person who derives joy from discovering
ways to circumvent limitations.” Hacking is not criminal,
and it has nothing to do with computers. As his life
progressed, Snowden would learn how to hack school, the job
market, and eventually the oppressive surveillance state.
By September 2001, Snowden was working for an independent
Web site developer operating out of her house on the grounds
of Fort Meade, Maryland, the home of the NSA (for whom,
coincidentally, his mother worked in a support capacity).
After the attacks on the World Trade Center and Pentagon,
he decided, in his family's long tradition of service to
their country (his grandfather is a Rear Admiral in the
Coast Guard, and ancestors fought in the Revolution,
Civil War, and both world wars), that his talents would
be better put to use in the intelligence community. His
lack of a four year college degree would usually be a bar
to such employment, but the terrorist attacks changed all the rules,
and military veterans were being given a fast track into
such jobs, so, after exploring his options, Snowden
enlisted in the Army, under a special program called
18 X-Ray, which would send qualifying recruits
directly into Special Forces training after completing
their basic training.
His military career was to prove short. During a training
exercise, he took a fall in the forest which
fractured the tibia bone in both legs and was advised
he would never be able to qualify for Special Forces.
Given the option of serving out his time in a desk job or
taking immediate “administrative separation”
(in which he would waive the government's liability for
the injury), he opted for the latter. Finally, after a
circuitous process, he was hired by a government contractor
and received the exclusive Top Secret/Sensitive Compartmented
Information security clearance which qualified him to work
at the CIA.
A few words are in order about contractors at government
agencies. In some media accounts of the Snowden disclosures,
he has been dismissed as “just a contractor”, but
in the present-day U.S. government where nothing is as it
seems and much of everything is a scam, in fact many of the
people working in the most sensitive capacities in the
intelligence community are contractors supplied by the big
“beltway bandit” firms which have sprung up like
mushrooms around the federal swamp. You see, agencies operate
under strict limits on the number of pure government (civil
service) employees they can hire and, of course, government
employment is almost always forever. But, if they pay a
contractor to supply a body to do precisely the same job, on
site, they can pay the contractor from operating funds and
bypass the entire civil service mechanism and limits and,
further, they're free to cut jobs any time they wish and
to get rid of people and request a replacement from the
contractor without going through the arduous process of
laying off or
firing a “govvy”. In all of Snowden's jobs,
the blue badged civil servants worked alongside the
green badge contractors without distinction in job
function. Contractors would rarely ever visit the
premises of their nominal “employers” except
for formalities of hiring and employee benefits.
One of Snowden's co-workers said “contracting
was the third biggest scam in Washington after the
income tax and Congress.”
His work at the CIA was in system administration, and he
rapidly learned that regardless of classification levels,
compartmentalisation, and need to know, the person in
a modern organisation who knows everything, or at least
has the ability to find out if interested, is the
system administrator. In order to keep a system running,
ensure the integrity of the data stored on it, restore
backups when hardware, software, or user errors cause
things to be lost, and the myriad other tasks that
comprise the work of a “sysadmin”, you have
to have privileges to access pretty much everything in
the system. You might not be able to see things on
other systems, but the ones under your control are an
open book. The only safeguard employers have over
rogue administrators is monitoring of their actions, and
this is often laughably poor, especially as bosses
often lack the computer savvy of the administrators
who work for them.
After nine months on the job, an opening came up for a
CIA civil servant job in overseas technical support.
Attracted to travel and exotic postings abroad, Snowden
turned in his green badge for a blue one and after a
training program, was sent to exotic…Geneva as
computer security technician, under diplomatic cover.
As placid as it may seem, Geneva was on the cutting edge
of CIA spying technology, with the United Nations,
numerous international agencies, and private banks all
prime targets for snooping.
Two years later Snowden was a
contractor once again, this time with Dell Computer, who
placed him with the NSA, first in Japan, then back
in Maryland, and eventually in Hawaii as lead technologist
of the Office of Information Sharing, where he developed
a system called “Heartbeat” which allowed all
of NSA's sites around the world to share their local
information with others. It can be thought of as an
automated blog aggregator for Top Secret information.
This provided him personal access to just about everything
the NSA was up to, world-wide. And he found what he read
profoundly disturbing and dismaying.
Once he became aware of the scope of mass surveillance,
he transferred to another job in Hawaii which would allow
him to personally verify its power by gaining access to
XKEYSCORE. His worst fears were confirmed, and he began
to patiently, with great caution, and using all of his
insider's knowledge, prepare to bring the archives
he had spirited out from the Heartbeat system to the
attention of the public via respected media who would
understand the need to redact any material which might,
for example, put agents in the field at risk. He discusses
why, based upon his personal experience and that of others, he
decided the whistleblower approach within the chain of
command was not feasible: the unconstitutional surveillance
he had discovered had been approved at the highest levels
of government—there was nobody who could stop it who
had not already approved it.
The narrative then follows preparing for departure, securing the
data for travel, taking a leave of absence from work, travelling
to Hong Kong, and arranging to meet the journalists he had
chosen for the disclosure. There is a good deal of useful
tradecraft information in this narrative for anybody with
secrets to guard. Then, after the stories began to break
in June, 2013, the tale of his harrowing escape from the
long reach of Uncle Sam is recounted. Popular media accounts
of Snowden “defecting to Russia” are untrue. He
had planned to seek asylum in Ecuador, and had obtained a
laissez-passer from the
Ecuadoran consul and arranged to travel to Quito from Hong
Kong via Moscow, Havana, and Caracas, as that was the only
routing which did not pass through U.S. airspace or involve
stops in countries with extradition treaties with the U.S.
Upon arrival in Moscow, he discovered that his U.S. passport
had been revoked
while en route from Hong Kong, and without a valid passport
he could neither board an onward flight nor leave the
airport. He ended up trapped in the Moscow airport for
forty days while twenty-seven countries folded to U.S.
pressure and denied him political asylum. After spending
so long in the airport he even became tired of eating at
the Burger King there, on August 1st, 2013 Russia granted
him temporary asylum. At this writing, he is still in
Moscow, having been joined in 2017 by Lindsay Mills, the
love of his life he left behind in Hawaii in 2013, and who
is now his wife.
This is very much a personal narrative, and you will get an
excellent sense for who Edward Snowden is and why he chose to do
what he did. The first thing that struck me is that he
really knows his stuff. Some of the press coverage
presented him as a kind of low-level contractor systems nerd,
but he was principal architect of EPICSHELTER, NSA's
worldwide backup and archiving system, and sole developer of
the Heartbeat aggregation system for reports from sites around
the globe. At the time he left to make his disclosures, his
salary was US$120,000 per year, hardly the pay of a humble
programmer. His descriptions of technologies and systems in
the book are comprehensive and flawless. He comes across as
motivated entirely by outrage at the NSA's flouting of the
constitutional protections supposed to be afforded U.S.
citizens and its abuses in implementing mass surveillance,
sanctioned at the highest levels of government across two
administrations from different political parties. He did not
seek money for his disclosures, and did not offer them to
foreign governments. He took care to erase all media containing
the documents he removed from the NSA before embarking on his
trip from Hong Kong, and when approached upon landing in
Moscow by agents from the Russian FSB (intelligence service)
with what was obviously a recruitment pitch, he immediately
cut it off, saying,
Listen, I understand who you are, and what this is. Please let me be clear that I have no intention to cooperate with you. I'm not going to cooperate with any intelligence service. I mean no disrespect, but this isn't going to be that kind of meeting. If you want to search my bag, it's right here. But I promise you, there's nothing in it that can help you.
And that was that. Edward Snowden could have kept quiet, done his job, collected his handsome salary, continued to live in a Hawaiian paradise, and share his life with Lindsay, but he threw it all away on a matter of principle and duty to his fellow citizens and the Constitution he had sworn to defend when taking the oath upon joining the Army and the CIA. On the basis of the law, he is doubtless guilty of the three federal crimes with which he has been charged, sufficient to lock him up for as many as thirty years should the U.S. lay its hands on him. But he believes he did the correct thing in an attempt to right wrongs which were intolerable. I agree, and can only admire his courage. If anybody is deserving of a Presidential pardon, it is Edward Snowden. There is relatively little discussion here of the actual content of the documents which were disclosed and the surveillance programs they revealed. For full details, visit the Snowden Surveillance Archive, which has copies of all of the documents which have been disclosed by the media to date. U.S. government employees and contractors should read the warning on the site before viewing this material.
Monday, September 16, 2019
Reading List: Public Loneliness
- Brennan, Gerald. Public Loneliness. Chicago: Tortoise Books, [2014] 2017. ISBN 978-0-9986325-1-3.
- This is the second book in the author's “Altered Space” series of alternative histories of the cold war space race. Each stand-alone story explores a space mission which did not take place, but could have, given the technology and political circumstances at the time. The first, Zero Phase (October 2016), asks what might have happened had Apollo 13's service module oxygen tank waited to explode until after the lunar module had landed on the Moon. The third, Island of Clouds (July 2019), tells the story of a Venus fly-by mission using Apollo-derived hardware in 1972. The present short book (120 pages in paperback edition) is the tale of a Soviet circumlunar mission piloted by Yuri Gagarin in October 1967, to celebrate the 50th anniversary of the Bolshevik revolution and the tenth anniversary of the launch of Sputnik. As with all of the Altered Space stories, this could have happened: in the 1960s, the Soviet Union had two manned lunar programmes, each using entirely different hardware. The lunar landing project was based on the N1 rocket, a modified Soyuz spacecraft called the 7K-LOK, and the LK one-man lunar lander. The Zond project aimed at a manned lunar fly-by mission (the spacecraft would loop around the Moon and return to Earth on a “free return trajectory” without entering lunar orbit). Zond missions would launch on the Proton booster with a crew of one or two cosmonauts flying around the Moon in a spacecraft designated Soyuz 7K-L1, which was stripped down by removal of the orbital module (forcing the crew to endure the entire trip in the cramped launch/descent module) and equipped for the lunar mission by the addition of a high gain antenna, navigation system, and a heat shield capable of handling the velocity of entry from a lunar mission. In our timeline, the Zond programme was plagued by problems. The first four unmanned lunar mission attempts, launched between April and November 1967, all failed due to problems with the Proton booster. Zond 4, in March of 1968, flew out to a lunar distance, but was deliberately launched 180° away from the Moon (perhaps to avoid the complexity of lunar gravity). It returned to Earth, but off-course, and was blown up by its self-destruct mechanism to avoid it falling into the hands of another country. Two more Zond launches in April and July 1968 failed from booster problems, with the second killing three people when its upper stage exploded on the launch pad. In September 1968 Zond 5 became the first spacecraft to circle the Moon and return to Earth, carrying a “crew” of two tortoises, fruit fly eggs, and plant seeds. The planned “double dip” re-entry failed, and the spacecraft made a ballistic re-entry with deceleration which might have killed a human cosmonaut, but didn't seem to faze the tortoises. Zond 6 performed a second circumlunar mission in November 1968, again with tortoises and other biological specimens. During the return to Earth, the capsule depressurised, killing all of the living occupants. After a successful re-entry, the parachute failed and the capsule crashed to Earth. This was followed by three more launch failures and then, finally, in August 1969, a completely successful unmanned flight which was the first in which a crew, if onboard, would have survived. By this time, of course, the U.S. had not only orbited the Moon (a much more ambitious mission than Zond's fly-by), but landed on the surface, so even a successful Zond mission would have been an embarrassing afterthought. After one more unmanned test in October 1970, the Zond programme was cancelled. In this story, the Zond project encounters fewer troubles and with the anniversary of the October revolution approaching in 1967, the go-ahead was given for a piloted flight around the Moon. Yuri Gagarin, who had been deeply unhappy at being removed from flight status and paraded around the world as a cultural ambassador, used his celebrity status to be assigned to the lunar mission which, given weight constraints and the cramped Soyuz cabin, was to be flown by a single cosmonaut. The tale is narrated by Gagarin himself. The spacecraft is highly automated, so there isn't much for him to do other than take pictures of the Earth and Moon, and so he has plenty of time to reflect upon his career and the experience of being transformed overnight from an unknown 27 year old fighter pilot into a global celebrity and icon of Soviet technological prowess. He seems to have a mild case of impostor syndrome, being acutely aware that he was entirely a passive passenger on his Vostok 1 flight, never once touching the controls, and that the credit he received for the accomplishment belonged to the engineers and technicians who built and operated the craft, who continued to work in obscurity. There are extensive flashbacks to the flight, his experiences afterward, and the frustration at seeing his flying career come to an end. But this is Soviet hardware, and not long into the flight problems occur which pose increasing risks to the demanding mission profile. Although the planned trajectory will sling the spacecraft around the Moon and back to Earth, several small trajectory correction maneuvers will be required to hit the narrow re-entry corridor in the Earth's atmosphere: too steep and the capsule will burn up, too shallow and it will skip off the atmosphere into a high elliptical orbit in which the cosmonaut's life support consumables may run out before it returns to Earth. The compounding problems put these course corrections at risk, and mission control decides not to announce the flight to the public while it is in progress. As the book concludes, Gagarin does not know his ultimate fate, and neither does the reader. This is a moving story, well told, and flawless in its description of the spacecraft and Zond mission plan. One odd stylistic choice is that in Gagarin's narration, he speaks of the names of spacecraft as their English translation of the Russian names: “East” instead of “Vostok”, “Union” as opposed to “Soyuz”, etc. This might seem confusing, but think about it: that's how a Russian would have heard those words, so it's correct to translate them into English along with his other thoughts. There is a zinger on the last page that speaks to the nature of the Soviet propaganda machine—I'll not spoil it for you. The Kindle edition is free to Kindle Unlimited subscribers.
Sunday, September 15, 2019
Gnome-o-gram: “Take my money. Please—I'll pay you!”
Here’s just about the craziest financial chart I’ve seen in some time.
Courtesy of Deutsche Bank, via CNBC, this is a plot of the total face value of government bonds (not, as the chart is mis-labeled, all debt) which now trade at negative yields. In other words, if you buy the bond today at its market price, hold it to maturity, and add all of the interest it will pay from now until it matures, you’ll end up with less than the price you paid for the bond. And this is in “nominal currency”, not accounting for any depreciation in the purchasing power of the money you get back (due to inflation) compared to what you paid for the bond.
Fixed-income investing (bonds, time deposits, etc.) used to be easy to understand and, let’s face it, boring. It’s supposed to be boring: “gentlemen prefer bonds” because assuming the issuer doesn’t go bust and default on the debt (which can’t happen with bonds issued by a government that can print its own money—the money you get back may be worth less or worthless, but you’ll get it back for sure), you’ll earn the steady rate of income quoted for the bond when you bought it all the way until maturity, when you get your money back. As interest rates go up and down, the market value of the bond will fluctuate, but that doesn’t matter if you hold it until maturity, when it pays off at face value.
Usually, the longer the term of the bond, the higher the rate of interest you’ll earn, since investors demand a greater yield in return for tying up their money for a longer period of time. This isn’t always the case: in fact, we’re presently in a period of an inverted yield curve, which I discussed here in an earlier gnome-o-gram.
But what could possess investors to bet on a sure loser: an investment which is guaranteed to pay back less money than was paid for it? And this isn’t just some rubes who fell for a fast-talking salesman: there are fifteen trillion US dollars worth of these bonds in the portfolios of institutions (banks, pension funds, insurance companies, corporate treasuries, government agencies) worldwide.
The reason is basically fear (and, in the case of some institutions, mandates that they hold some fraction of their assets in government securities). With yields on even substantially risky bonds in the cellar, at least you don’t run any risk with the government bond and you only lose a little money. (For some reason, the alternative of simply ordering up a pallet of high-denomination bills from the central bank and putting them in the vault doesn’t seem to occur to these people, or is considered beneath their dignity.) And with equity markets looking over-extended and volatile, that option is increasingly unattractive.
It isn’t just government bonds, either. Here’s a chart by Bianco Research, published by Market Watch, showing negative yielding corporate bonds in the hands of investors exploding from zero to US$ 1.2 trillion in the first eight months of this year.
When a recession occurs, the principal tool in the hands of a central bank to promote recovery is lowering interest rates. But conventional wisdom among analysts used to be that when rates were already close to zero, there “weren’t any arrows left in the quiver” because “rates can’t go negative”. Well, it appears they can, because they have.
Now, I guess the question is how far into negative territory they can go. If a recession sets in over the next year, I suppose we’ll see.
Wednesday, September 11, 2019
Reading List: Civil War Two
- Chittum, Thomas. Civil War Two. Seattle: Amazon Digital Services, [1993, 1996] 2018. ASIN B07FCWD7C4.
- This book was originally published in 1993 with a revised edition in 1996. This Kindle edition, released in 2018, and available for free to Kindle Unlimited subscribers, appears to be identical to the last print edition, although the number of typographical, punctuation, grammatical, and formatting errors (I counted 78 in 176 pages of text, and I wasn't reading with a particularly critical eye) makes me wonder if the Kindle edition was made by optical character recognition of a print copy and never properly copy edited before publication. The errors are so frequent and egregious that readers will get the impression that the publisher couldn't be bothered to read over the text before it reached their eyes. Sometimes, a book with mediocre production values can be rescued by its content, but that is not the case here. The author, who served two tours as a rifleman with the U.S. Army in Vietnam (1965 and 1966), then fought with the Rhodesian Territorials in the early 1970s and the Croatian Army in 1991–1992, argues that the U.S. has been transformed from a largely homogeneous republic in which minorities and newcomers were encouraged and provided a path to assimilate, and is now a multi-ethnic empire in which each group (principally, whites and those who, like most East Asians, have assimilated to the present majority's culture; blacks; and Hispanics) sees itself engaged in a zero-sum contest against the others for power and the wealth of the empire. So far, this is a relatively common and non-controversial observation, at least among those on the dissident right who have been observing the deliberate fracturing of the society into rival interest groups along ethnic lines by cynical politicians aiming to assemble a “coalition of the aggrieved” into a majority. But from this starting point the author goes on to forecast increasingly violent riots along ethnic lines, initially in the large cities and then, as people flee areas in which they are an ethnic minority and flock together with others of their tribe, at borders between the emerging territories. He then sees a progression toward large-scale conventional warfare proceeding in four steps: an initial Foundational Phase where the present Cold Civil War heats up as street gangs align on ethnic lines, new irregular forces spring up to defend against the others, and the police either divide among the factions or align themselves with that dominant in their territory. Next, in a protracted Terrorist Phase, the rival forces will increasingly attack one another and carry out strikes against the forces of the empire who try to suppress them. This will lead to increasing flight and concentration of each group in a territory where it is the majority, and then demands for more autonomy for that territory. He estimates (writing in the first half of the 1990s) that this was the present phase and could be expected to last for another five to twenty-five years (which would put its conclusion no later than 2020). The Terrorist Phase will then give way to Guerilla Warfare, with street gangs and militia groups evolving into full-time paramilitary forces like the Viet Cong and Irish Republican Army. The empire will respond with an internal security force similar to that of the Soviet Union, and, as chaos escalates, most remaining civil liberties will be suspended “for the duration of the emergency”. He forecasts this phase as lasting between ten and twenty years. Finally, the situation will progress to All-Out, Continuous Warfare, where groups will unite and align along ethnic lines, bringing into play heavy weapons (artillery, rocket powered grenades, armour, etc.) seized from military depots or provided by military personnel defecting to the factional forces. The economy will collapse, and insurgent forces will fund their operations by running the black market that replaces it. For this phase, think the ex-Yugoslavia in the 1990s. When the dust settles, possibly involving the intervention of United Nations or other “peacekeeping” troops, the result will be a partition of the United States into three ethnically-defined nations. The upper U.S., from coast to coast, will have a larger white (plus East Asian, and other assimilated groups) majority than today. The Old South extending through east Texas will be a black majority nation, and the Southwest, from central Texas through coastal California north of the San Francisco area will be a Hispanic majority nation, possibly affiliated or united with Mexico. The borders will be sharp, defended, and prone to occasional violence. My problem with this is that it's…ridiculous. Just because a country has rival ethnic groups doesn't mean you'll end up with pitched warfare and partition. Yes, that's what happened in ex-Yugoslavia, but that was a case where centuries-long ethnic tensions and hatred upon which the lid had been screwed down for fifty years by an authoritarian communist regime were released into the open when it collapsed. Countries including Canada, Ireland/Northern Ireland, and Belgium have long-standing ethnic disputes, tension, and occasional violence, and yet they have not progressed to tanks in the street and artillery duels across defended frontiers. The divide in the U.S. does not seem to be so much across ethnic lines as between a coastal and urban élite and a heartland productive population which has been looted at the expense of the ruling class. The ethnic groups, to the extent they have been organised as factions with a grievance agenda, seem mostly interested in vying for which can extract the most funds from the shrinking productive population for the benefit of their members. This divide, often called “blue/red” or “globalist/nationalist” goes right down the middle of a number of highly controversial and divisive issues such as immigration, abortion, firearms rights, equality before the law vs. affirmative action, free trade vs. economic nationalism, individual enterprise vs. socialism and redistribution, and many others. (The polarisation can be seen clearly by observing that if you know on which side an individual comes down on one of these issues, you can predict, with a high probability, their view on all the others.) To my mind, a much more realistic (not to mention far better written) scenario for the U.S. coming apart at the seams is Kurt Schlichter's People's Republic (November 2018) which, although fiction, seems an entirely plausible extrapolation of present trends and the aftermath of two incompatible worldviews going their separate ways.