Blood and treasure

Why do people use the phrase "blood and treasure" when discussing the war in Iraq?

I suspect the reason is it sounds much grander and more epic than "soldier's lives and money."

It has connotations of mythical battles and the kind of simple-minded loftiness of cheap fantasy novels.

It is a suspect phrase because it has connotations that distract from its actual meaning.

...or were you looking at the Woman in the Red Dress?

Researchers have discovered that the colour red enhances men's attraction towards women:

the women shown framed by or wearing red were rated significantly more attractive and sexually desirable by men than the exact same women shown with other colors. When wearing red, the woman was also more likely to score an invitation to the prom and to be treated to a more expensive outing.

Apparently this will have implications for dating and product design, but I think that they've already been taken on board in these contexts.

New webcomics &c

A brilliant new webcomic Suburban Panic! here.

A nice mix of the humanist, atheist, rationalist, scientific, Epicurean, and general political whimsy.

Also a good use of the ComicPress WordPress theme.

I've tried said theme on XAMPP locally, and it works. I'm going to have to upgrade my hosting package but I think I'll wait until I'm comfortable with ComicPress and the general look'n'feel.

I mean it's OK at the moment, just a little web circa 2001 for my liking.

Cutting debt into little bits

Comprehending what caused the recent credit-crunch/liquidity-crisis is much easier after reading Tom Cunningham's explanation:

But wait, there's a loose end, what about all the risky leftover pieces of investment? Who's going to buy those?

This is the clever part. Suppose you're offered the chance to flip a coin, where you'll get £100 if it's heads, but nothing if it's tails. On average you get £50, but it's risky. Now instead say you pool your winnings with 100 other people who are in the same situation and you all share the proceeds. Again you'll get £50 on average, but it's now a much surer prospect.

This is the trick to deal with the risky parts of the investments: if one firm can buy up a huge number of these separate risky investments then the risks start to cancel out, and as a whole it becomes a fairly safe investment.

It all makes sense. Sort of.

Cutting up debt

The thing investors really don't like is uncertainty. And what the financial engineers in the city have been trying to do is "smooth out" risk. Risk remains, but it is well managed *in theory*.

The logical conclusion would have been one enormous world investment, stitched together from all of the billions of separate individual investments. But the financial engineers stumbled before they could construct that one.

Cunningham's conclusion is that "no one has found any fundamental problem with the principle of sharing risk."

This raises the interesting possibility that once the smoke has cleared financiers might start doing it right.

[image from SqueakyMarmot]

Steal from the best

Because I'm tired and thought this collection of quotations was fun:

A human being should be able to:
change a diaper,
plan an invasion,
butcher a hog,
conn a ship,
design a building,
write a sonnet,
balance accounts,
build a wall,
set a bone,
comfort the dying,
take orders,
give orders,
cooperate,
act alone,
solve equations,
analyze a new problem,
pitch manure,
program a computer,
cook a tasty meal,
fight efficiently,
die gallantly.

Specialization is for insects.

Robert Heinlein

I just had a thought

(It didn't hurt.)

I am capable of summoning resources that will enable me to travel to any densely populated location on Earth within hours, and many more remote places within days.

My life-expectancy is around 70 years, and is likely to rise due to advances in medical technology.

That life is nearly guaranteed to be free of the penury and hardship that characterises the lives of the vast majority of my fellow human beings on this planet at this time, and throughout history.

I can banish pain with ease.

I have direct access to a vast chunk of all human knowledge - I can find an answer to virtually any question.

I can communicate instantly with any and every person I know at a moments notice.


Truly these are good times to be alive.

Impatience with the IMP

It seems I'm in good company with my opinion that the government's IMP (Interception Modernisation Project) is a great big steaming pile of FAIL and that Geoff Hoon is a bit silly, from the The Independent's Open House:

In speaking out against the government's proposed database of telephone and internet records last night, Director of Public Prosecutions Sir Ken Macdonald joined a remarkable cast of critics of Labour's most draconian instincts.

...the really startling chorus of opposition to the raft of illiberal policies that has characterised this government is that which has emerged from the security establishment.

It's former MI5 heads Stella Rimington and Eliza Manningham-Buller speaking out against 42 days, and senior members of the Association of Chief Police Officers saying the same thing. It's former Prison Service director general (now Barnado’s Chief Executive) Martin Narey decrying the rate at which we incarcerate children, or Prison Governors Association president Paul Tidball on the government's decision to build Titan prisons 'in the face of unanimous opposition from professional and expert groups'. And it's Brian Gladman, a former director of strategic electronic communications at the Ministry of Defence and US government security consultant, saying that ID cards would be a disaster.

The list goes on. These people are not partisans. They're professionals. They're experts. If anyone is going to have sympathy with the impulse to 'go quite a long way' in undermining freedom to stop terrorism (another Hoonism) and crime and benefit fraud, it is surely them. And if even these people think the government has got it wrong, one has to ask: who on earth does the government consult when it formulates this stuff?

The appropriate message is that all of this is not "being tough on terrorism" it is giving in to terrorism.

Atheist bus

I blogged about Ariane Sherine's suggestion for an atheist bus advert back in June and it seems the plan has come close to fruition:

The Atheist Bus Campaign launches today thanks to Comment is free readers. Because of your enthusiastic response to the idea of a reassuring God-free advert being used to counter religious advertising, the slogan "There's probably no God. Now stop worrying and enjoy your life" could now become an ad campaign on London buses – and leading secularists have jumped on board to help us raise the money.

Their picture:


And here is my original mock up:


Mine is admittedly less positive and more definite - but whatayagonnado?

However since then I have come to the conclusion that there isn't anything inherently wrong with a belief in God, just as long as belief does not become the basis of any kind of temporal power or influence.

I can empathise with the faithful, even if I don't agree with them.

Still, I applaud this agenda of atheist expression.

{Money? What money? Give it to Amnesty I say!}

[images from the Graun and SideLong on flickr]

A-Holy smokes! H. J. Blackham is STILL ALIVE!

I've been re-reading Humanism by H.J. Blackham. A brilliant book - and much easier going the second time round (I think in the meantime some of the ideas have sunk in).

Anyway I searched the author and Harold John Blackham is still alive:

H. J. Blackham, born on 31 March 1903, has been a leading and widely respected British humanist for most of his life.

...

H. J. Blackham was a key organiser of the World Union of Freethinker's conference in London in 1938. When he tried to refound it after the war he decided a new organisation was needed and together with the Dutch philosopher Jaap van Prag started the International Humanist and Ethical Union, of which Julian Huxley was the first President. Blackham worked closely with Julian Huxley in many ways including helping him to revise Religion without Revelation.

...

He has enjoyed many years retirement in the Wye valley, reading, writing and growing vegetables. He lives the exemplary humanist life that of thought and action welded together.

105 years old!

It makes sense, after all. If you genuinely believe this life is everything that ever will be then you damn well make sure you get your fair share.

Bertrand Russell got a good innings as well [imagine being an adult in the Victorian era and living to see Nixon in the Whitehouse - what an epic journey!] at 97.

Anyway kudos to Blackham.

Oily Irony

Hilarious news from Cuba:

Mother nature, it emerged this week, appears to have blessed the island with enough oil reserves to vault it into the ranks of energy powers. The government announced there may be more than 20bn barrels of recoverable oil in offshore fields in Cuba's share of the Gulf of Mexico, more than twice the previous estimate.

If confirmed, it puts Cuba's reserves on par with those of the US and into the world's top 20. Drilling is expected to start next year by Cuba's state oil company Cubapetroleo, or Cupet.

And the American response:

"It would change their whole equation. The government would have more money and no longer be dependent on foreign oil," said Kirby Jones, founder of the Washington-based US-Cuba Trade Association. "It could join the club of oil exporting nations."

Cuba's unexpected arrival into the big oil league could increase pressure on the next administration to loosen the embargo to let US oil companies participate in the bonanza and reduce US dependency on the middle east, said Jones. "Up until now the embargo did not really impact on us in a substantive, strategic way. Oil is different. It's something we need and want."

Hah! Hilarious.

Where's my fusion reactor?

Best. Resignation Letter. Ever.

This has been floating around for a few days. Andrew Lahde, a Californian hedge fund manager who has made a Lot of Money betting on the sub prime debacle has decided to quit fund managing and live the High Life:

Dear Investor:

Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, “What I have learned about the hedge fund business is that I hate it.” I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

There are far too many people for me to sincerely thank for my success. However, I do not want to sound like a Hollywood actor accepting an award. The money was reward enough. Furthermore, the endless list those deserving thanks know who they are.

I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.

So this is it. With all due respect, I am dropping out. Please do not expect any type of reply to emails or voicemails within normal time frames or at all. Andy Springer and his company will be handling the dissolution of the fund. And don’t worry about my employees, they were always employed by Mr. Springer’s company and only one (who has been well-rewarded) will lose his job.

I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life — where I had to compete for spaces in universities and graduate schools, jobs and assets under management — with those who had all the advantages (rich parents) that I did not. May meritocracy be part of a new form of government, which needs to be established.

On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government. Capitalism worked for two hundred years, but times change, and systems become corrupt. George Soros, a man of staggering wealth, has stated that he would like to be remembered as a philosopher. My suggestion is that this great man start and sponsor a forum for great minds to come together to create a new system of government that truly represents the common man’s interest, while at the same time creating rewards great enough to attract the best and brightest minds to serve in government roles without having to rely on corruption to further their interests or lifestyles. This forum could be similar to the one used to create the operating system, Linux, which competes with Microsoft’s near monopoly. I believe there is an answer, but for now the system is clearly broken.

Lastly, while I still have an audience, I would like to bring attention to an alternative food and energy source. You won’t see it included in BP’s, “Feel good. We are working on sustainable solutions,” television commercials, nor is it mentioned in ADM’s similar commercials. But hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term. The original American flag was made of hemp fiber and our Constitution was printed on paper made of hemp. It was used as recently as World War II by the U.S. Government, and then promptly made illegal after the war was won. At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country? Ah, the female. The evil female plant — marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers. This policy is ludicrous. It has surely contributed to our dependency on foreign energy sources. Our policies have other countries literally laughing at our stupidity, most notably Canada, as well as several European nations (both Eastern and Western). You would not know this by paying attention to U.S. media sources though, as they tend not to elaborate on who is laughing at the United States this week. Please people, let’s stop the rhetoric and start thinking about how we can truly become self-sufficient.

With that I say good-bye and good luck.

All the best,

Andrew Lahde”

Quoted in full because it's pretty good.

[from The Biog Picture, via the FT, Futurismic, Slashdot, Jon Taplin et al][images from striatic pink n girly gadl dawnzy58 The Consumerist dustpuppy wili_hydrid aforero on flickr]

The Great Depression: what really happened?

Jon Taplin points to a fascinating article on the Great Depression by James Livingston. As ever with this topic it raises as many questions as it answers, but it makes for interesting reading:

...the Great Depression was the consequence of a massive shift of income shares to profits, away from wages and thus consumption, at the very moment—the 1920s—that expanded production of consumer durables became the crucial condition of economic growth as such.

This shift produced a tidal wave of surplus capital that, in the absence of any need for increased investment in productive capacity (net investment declined steadily through the 1920s even as industrial productivity and output increased spectacularly), flowed inevitably into speculative channels, particularly the stock market bubble of the late 20s;

when the bubble burst—that is, when non-financial firms pulled out of the call loan market in October—demand for securities listed on the stock exchange evaporated, and the banks were left holding billions of dollars in “distressed assets.”

The credit freeze and the extraordinary deflation of the 1930s followed; not even the Reconstruction Finance Corporation could restore investor confidence and reflate the larger economy.

Livingston basically seems to be arguing that Milton Friedman's view of the Great Depression as being exacerbated by government intervention was incorrect.

Livingston also argues a fundamental idea of supply-side economics (as advocated by Reagan et al) is incorrect.

The idea is that if you cut taxes on the rich they will use the additional money to invest in new factories, research, job-creation and infrastructure.

It seems they don't, and in fact invest in speculative (often property-based) securities, and create a speculative bubble. According to James Livingston:

The “underlying cause” of the Great Depression was not a short-term credit contraction engineered by central bankers who, unlike Ferguson and Bernanke, hadn’t yet had the privilege of reading Milton Friedman’s big book. The underlying cause of that economic disaster was a fundamental shift of income shares away from wages/consumption to corporate profits that produced a tidal wave of surplus capital that could not be profitably invested in goods production—and, in fact, was not invested in good production.. In terms of classical, neoclassical, and supply-side theory this shift of income shares should have produced more investment and more jobs, but it didn’t.

Livingston claims that during the 1920s the growing demand for consumer durables meant that massive economic growth was created with almost no investment in factories or job-creation.

At the same time weaker trade-unions meant the owners of capital could increase their share of revenue at the expense of workers.

So profits went up, but wages didn't. As increasing the wages of consumers was the only practical way of growing consumption, this lead to problems.

The lunacy of the IMP

Listen to some of these justifications from transport secretary Geoff Hoon MP for the government's Interception Modernisation Programme:

He said the police and security services needed the powers to deal with "terrorists or criminals" using telephones connected to the internet, for "perfectly proper reasons, to protect our society".

...

"If they are going to use the internet to communicate with each other and we don't have the power to deal with that, then you are giving a licence to terrorists to kill people."

...

He added: "The biggest civil liberty of all is not to be killed by a terrorist."

There is a very straightforward reason why the government shouldn't push forward with the IMP.

The government has shown again and again and again that it is incapable of storing the people's data securely and responsibly. And I'm talking about any government - the more information the state has, the more leaky the state becomes.

Incidentally this is Geoff Hoon MP speaking, who was appointed transport secretary in the recent cabinet reshuffle, the same reshuffle that saw Tom Harris MP sacked from his job as a transport minister, presumably because he committed the cardinal sin of pissing off the Daily Mail by asking why "...is everyone so bloody miserable?"

Geoff goes some way towards answering this question. Misery is an entirely understandable response if the people of Britain are constantly being told that they are under threat from terrorists and as a result have to have their every electronic communication recorded by an incompetent government.

That is a LOT of money - what about global warming?

I've been pondering something for the past few days: the British government can rustle up £37 billion at short notice to solve a banking crisis:




So what about global warming? What about energy security? Couldn't these issues be greatly improved by this cash?

I suspect the reason has to do with the fact that the situation around global warming is extremely uncertain: governments still aren't entirely sure if it will happen as advertised and if it does, will it be all bad?

Bjørn Lomborg and Freeman Dyson have both pointed out that there are potential upsides to global warming and climate change. Bjørn Lomborg claims:

According to the first complete peer-reviewed survey of climate change’s effects on health, global warming will save lives. By 2050, global warming will cause almost 400,000 more heat-related deaths each year – but 1.8m fewer people will die from cold.

And Freeman Dyson claims:

...if the increase of carbon dioxide in the atmosphere is allowed to continue, shall we arrive at a climate similar to the climate of six thousand years ago when the Sahara was wet?

Second, if we could choose between the climate of today with a dry Sahara and the climate of six thousand years ago with a wet Sahara, should we prefer the climate of today?

My second heresy answers yes to the first question and no to the second. It says that the warm climate of six thousand years ago with the wet Sahara is to be preferred, and that increasing carbon dioxide in the atmosphere may help to bring it back.

I am not saying that this heresy is true. I am only saying that it will not do us any harm to think about it.

What I am certain of is that climate change lies in Taleb's fourth quadrant and is liable to be rife with black swans, and maybe a few white ones.

Then there is the misrepresentation of academics' views by the media.

There is also the obvious fact that no one is entirely sure what the best course of action is. Some advocate nuclear power, others advocate wind, tide, and solar power.

I am inclined to agree with the politicians: this is a complicated and unpredictable situation. By all means do something (at least only for reasons of energy security - a much more explicable problem, if no more tractable) but don't imagine we understand everything.

[image from the BBC NEWS]

Self evident truths

It's always nice to remind ourselves of what good people should strive for:




[via Boing Boing]

The future of capitalism and the EU

Some chap called David Marquand has written the most sensible article on the recent economic troubles I've seen so far:

It is not fashionable to say so at the moment, but that makes it all the more important to remind ourselves that globalisation has made it possible for the governments of India and China to lift millions out of the most appalling poverty - and that, as Churchill said of democracy, the capitalist market economy is the worst economic system ever invented, apart from all the others.

In truth, the fundamentalisms of right and left mirror each other. One says, "markets good, states bad". The other says, "states good, markets bad". The truth is that they are both good and bad - at the same time.

He goes on to say:

The need now is for clever regulation, on a global scale.


In the EU, there is an equal need for much stronger political institutions to complement the central bank. But the greatest need of all is for a new theory of the mixed economy, framed for the global marketplace of today, as the now-defunct Keynesian system was framed for the national post-war economies.

This reference to the EU is in line with my own thoughts: the EU can only be fit-for-purpose if it is made stronger, or it should be reduced in influence and importance. The situation we have now is a half-way house that benefits no one.

Problems in the Eurozone

Reading Ambrose Evans-Pritchard's comments on the problems facing the Euro:

Who in the eurozone can do what Alistair Darling has just done in extremis to save Britain's banks, as this $10 trillion house of cards falls down? There is no EU treasury or debt union to back up the single currency. The ECB is not allowed to launch bail-outs by EU law. Each country must save its own skin, yet none has full control of the policy instruments.

Sure, it's part of The Telegraph's house style to criticise the Euro and EU generally, but it makes a fair point about the basic problems of the common currency in this kind of crisis:

Germany has vetoed French and Italian ideas for an EU lifeboat fund. The former knows exactly where that leads. It is a Trojan horse that will be used one day to co-opt German taxpayers into rescues for less Teutonic EMU kin.

One can sympathise with Berlin. But sharing debts with Italy and Spain was implicit when they agreed to launch the euro.

A shared currency entails obligations. We have reached the watershed moment when Germany has to decide whether to put its full sovereign weight behind the EMU project or reveal that it is not prepared to do so in a crisis.

All this shows that the EU should either:

1. Get it's act together and become a highly federalised super-state a la the USA, with a common economic policy, constitution, common military and foreign policy.
2. Accept that it will only ever be an economic bloc, like a collection of Norways. Each country should retain control over central banks, economic policy etc.

I'm fairly ambivalent towards the EU. The arguments for or against it haven't been made clear by politicians.

The basic problem is that the creation of a United States of Europe requires local governments to unilaterally give up power, evolving legislative and executive power to a congressional European government, and devolving power concerning local policies to local assemblies.

But no politician will ever do this: so the EU is stuck between being a common market with minimal oversight and a federal superstate.

From a purely patriotic perspective it'd be nice to be a citizen (as opposed to a subject) of a liberal, democratic, enterprising global power that would effectively counterbalance China, Asia, and the USA, but I wish our politicos would pull their fingers out and get on with it.

There are no words...

"If you have a garden and a library, you have everything you need" --- Cicero.

Oh Fucking Hell

Ugh. Why?

LATER: When I first read this I was paralysed with rage.

I don't usually engage emotionally with politics - but...

No, no. I really can't express myself.

Finance and computers: an analogy

A computer takes digital data and transforms it in fairly basic ways. Adding, subtracting, logical statements etc.

Computers are powerful tools because we can make them perform more complex tasks than these basic functions by building new layers of abstraction on top of these basic processes.

Machine code can be used to make a compiler for the C programming language, which can in turn be used to make an operating system, on top of which can run applications, which can be used in ever more complex and elaborate ways.

Abstraction and "higher order" properties are important in computing, but when the same ideas are applied to finance things go all gooey.

The basic unit of economic interaction is not a bit or a logic gate; it is a human being, an absurdly complicated thing, and one that we don't fully understand.

In computing, logic gates and machine code are fairly simple. Because they are simple and well understood, we can build a layer of abstraction on top of them and rely on them to function correctly whilst we pursue higher order things (like writing and reading blogs).

This is what SF writer Iain Banks calls the "dependency principle" - complex software is based on a simpler layer beneath it, which is in turn based on an even simpler layer beneath it, until you get out of software and into the bare metal.

In the recent economic troubles - the credit crunch caused by the insidious spread of bad mortgage debt and the fact that banks now don't know how much these assets are worth (if anything) - can be thought of in similar terms to the structure of software.

A layer of abstraction is based on a simpler substrate: derivatives that are based on the risk of a given mortgage defaulting.

The difference between finance and computers is the layer beneath the abstraction isn't straightforward and predictable.

Penstroke and Complex

There are two kinds of problems in the world:

• Penstroke problems: problems caused by legislators or businesses that could be solved with effective legislation. Prohibition is one such problem.
  
• Complex problems: problems of huge scale and complexity, which require a great deal of effort, experimentation, thought, and consideration from many people to be solved. Global warming is an example.

John McCain in the Actuarial Sense

If John McCain has a heart attack a month before the election what will happen?

Presumably the election will have to go ahead - but would the American people elect a guy who had a heart attack a month before the polls open?

They have elected a dead guy to political office a few times.