Friday, November 28, 2008

Faves: Hiroshige

    Swimming carp - Utagawa Hiroshige - click the image for big version

Hiroshige is my favorite of the great 19th century Japanese artists.  His paintings and woodblocks have a unique delicacy and balance.  Others, like Hokusai, are better known, but I like Hiroshige best.

My Pix

    Dobson Shoe Store, Letterkenney, County Donegal, 1988
    Kodachrome 200 - 25mm lens


Space Shuttle - ISS panorama - August 2007 - click for big

Happy 10th birthday ISS! I've seen it pass overhead twice and been amazed.  Here is a website that lets you know when to have a look.

Musical Chairs

   This is not a credible plan

Hank Paulson doesn't seem to be reading this blog.  Otherwise, he'd stop what he's doing and try something else.  A table from the San Francisco Chronicle shows the bailout so-far.  Of $8.5 trillion pledged, $3.2 trillion is committed.   Remember that big chunks of that $3.2 trillion are loans, guarantees or other financing that will be paid back.  Its not all money out the door.  Still, $3.2 trillion is a really big amount of money.  Really big.  The site MegaPenny (mentioned earlier today on this blog) says that you would need 2.6 trillion pennies to make a life-sized replica of the Sears Tower.  US GDP is around $14 trillion, so the US Government has already put up the equivalent of 25% of GDP to fight the crisis.  But its not working.  Bank lending remains tight.  International shipping prices have plunged 90% in the last 3 months.  The  near collapse of Citi Group last week was primarily due to a new understanding that the rotten US Consumer debt extends far beyond the sub-prime mortgage market.

The problem with Paulson's solutions is that they do not come to grips with the underlying crisis.  He's trying to put Humpty Dumpty back together.  But the system is fundamentally broken and can't be put back together.  At its simplest level, the crisis is due to US Consumer debt.  Real wages in the US have moved little since the early 1990's.  Most of the growth in per-capita spending was due not to increased incomes, but increased debt.  New   ways of packaging consumer debt created new investors for that debt, and new ways for consumers to finance their debt.  All of this is OK as long as 1) the consumers don't take on too much debt and 2) the assets they buy with that debt don't go down in value.  As long as the  packaged debts represent normal consumer behavior, everything should work out properly.  Consumers get cheaper debt, banks can lend without holding the debt on their balance sheets, and investors get a very low risk investment vehicle.  In other words, as long as the systems works the way its supposed to, the system will work the way its supposed to.

As we are all now aware, however, the system did not work the way it was supposed to.  Rather than take existing debt and re-package it, banks found collateralization so lucrative, that they set out to create new debt.  People figured out quickly that they could get any amount of money they wanted against their house.  They re-mortgaged as their houses went up in value and spent the proceeds.  That is how Americans increased their standard of living through debt.  But for the system to work, it has to be driven by economic activity, not create economic activity.  At this point, the US Government is facing two intertwined problems.  First is that economic growth has come to rely on increasing levels of consumer debt.  Second is that collaterallization has become the main way consumer debt is financed in the US.  Its a grand game of musical chairs.  As long as the music continued, and the supply of chairs kept increasing, nobody worried.  But now the music has stopped and some of the chairs have turned out to be paper mache.

The success of securitization of consumer debt has pushed all other kinds of debt management out of business.  Now that securitization has failed, the US no longer has alternative ways of financing its huge debt.  That is the real reason markets have frozen.  Not because banks don't trust each other, government guarantees have taken care of that.  But because the way banks finance debt no longer works.  Nobody trusts collateralized consumer debt.  That's why GM can't get money to lend people who want to buy its cars.  The entire system of collateralized debt has to be unwound and re-created using either the old tools or new ones not yet invented.  In the meantime, all that crappy debt sits there rotting on bank balance sheets, threatening their very existence.

Hank Paulson's problem is that US growth cannot continue to be financed by increasing consumer debt.  His other problem is that the entire system of creating consumer debt (the good as well as the bad) has broken down.  Pension funds in Toulouse no longer want securitized US mortgages.  So even if GM invents a perfect electric car for $10,000 and everyone wants it, there's no way to lend them the money.  GM can't do it because it can't sell the debt.  The banks can't do it because they need to lower their lending due to the crappy assets on their balance sheets.  Paulson can try to prop up the collateralization industry as much as he wants, but in a crisis caused by too much debt, more debt is not the answer.  Another game of musical chairs won't solve the problem.


    Shell exploding, Utah Beach, June 6, 1944

My son was watching the second episode of Band of Brothers last night.  Its the one where Dick Winters and his boys knock out some German artillery that's shelling the Utah Beach landings.  The artillery was identified to Winters as 88's, and most discussion describes them as such.  However, when he got there, Winters discovered they were 105's.  This photograph  shows a German shell exploding on the beach.  Even though the photo caption says the shell is an 88, it was probably from one of those guns.  Its hard to tell the difference between an incoming 88 shell and a 105 shell, especially on your first day in combat.

The Americans had only 275 killed on Utah Beach that day.  Most of those would have been the first wave, and most of the rest from shelling like this.

Big Numbers

    One million pennies

The MegaPenny Project is a cool little website that gives some visualization of large numbers.  Before this fall, trillion was a number you heard infrequently.  Having trouble getting my head around a billion, trillions are off the scale.  MegaPenny will show you the way.  Its kind of USA focused, but given that's where the trillions are being bandied about, it's kind of fitting.  Highly recommended.

Tuesday, November 25, 2008


Don't you know there ain't no Devil,
that's just God when He's drunk.
Tom Waits - Heart Attack & Vine

Monday, November 24, 2008


   1943 T-34/85
The Russian T-34 is generally agreed the best all-around tank in the war.  The Germans were surprised, first by its capabilities and then by the staggering quantities produced by Soviet industry.  The T-34 was a simple and rugged design.  Its reliability was legendary.  There have been T-34s pulled out of bogs in recent years that, after some clean-up, worked perfectly.  One example found in an Estonian bog is here. WW2 tanks were notoriously finicky, especially German tanks.  Not the T-34.  It was built, well, like a tank. The platform was exceptionally flexible.  Armor, gun and engine were all improved through the war.  The picture above is a 1943 model with a big 85mm gun.

Robert Fisk: Kabul Redux

    View of Kabul from the Intercontinental - Koldor Hormaza via Wikipedia

The irritable but fantastic Robert Fisk has a scary article  about Afghanistan on The Independent.  He ruminates from the roof of the Central Hotel (similar view to that from the Intercontinental pictured above), comparing the current situation with that of the Soviets in the mid 1980's.  There are many similarities.  He goes on to include more similarities from the British 19th Century Afghan experience.  Neither of the two proceeding enterprises, as we all know, ended well.

My Pix

    Goldfish, my livingroom

All my photos are on Flickr.

Saturday, November 22, 2008

Oswald Did It

Lee Oswald, Dallas Police Department Mug Shot, November 23, 1963.  Oswald was given a few serious smacks during the arrest.  At the time, he was a suspect in the shooting of a police officer, not JFK.  Police usually err on the side of unnecessary violence when arresting a cop killer.  However, in this case Oswald pulled a gun and tried to shoot the arresting officers, so they had a practical reason for clobbering him.  He wasn't charged with Kennedy's murder until the next day, occasioning this mug shot.

The answer to the most closely examined crime in history remains tantalizingly out of reach.  All the information necessary to answer the question is available, but its like a jigsaw puzzle with too many of some pieces, and not enough of others.  You can re-arrange the pieces to incompletely assemble several different pictures.  Its the lack of a clear-cut answer that makes it interesting.  Anyone can grab the pieces and have a go.  But that doesn't mean all the potential solutions are equally valid.  When you strip away the opinion, confusion, ass-covering and self-serving spin, you are left with a fairly complete set of physical evidence.  Unfortunately, much of this evidence is either not conclusive, open to interpretation or tainted in some way.  Nevertheless, in its totality, the physical evidence is consistent with the theory that Oswald did it, alone.  While the story painted by the evidence is incomplete, there is not a single bit of physical evidence incompatible with the Oswald did it theory.  Not a single thing.  In any case of less importance, it would be considered open-and-shut.

This is especially true of the murder of Dallas Police Officer J.D. Tippet shortly after 1pm on November 22nd.  Shells from Oswald's pistol were found at the scene (the type of revolver used precludes ballistic match of slugs).  There is a chain of witnesses that give an almost complete series of sightings from the murder scene to the Texas Theater where Oswald was arrested.  On-the-scene witnesses identified Oswald as the killer.  Oswald was in possession of the pistol when arrested, and tried to shoot the arresting officers.  The jacket he had at the murder scene, but was not wearing when arrested was found in a parking lot between the murder scene and the theater.

Oswald's rifle was missing from its usual storage place, and found on the sixth floor of the Texas School Book Depository, where Oswald worked.  A single whole bullet and several fragments recovered from the victims and the limousine ballistically matched Oswald's rifle.  Several people saw someone who looked like Oswald fire a rifle from the sixth floor of the Depository at the motorcade.  Most witnesses recalled three shots.  Three expended shell casings matching Oswald's rifle were found on the floor inside the sixth floor window.  Although many witnesses thought the shots came from the famous grassy knoll, nobody at the time saw anyone there with a gun.  Nobody, including people who would have been less than 30 feet from a grassy knoll shooter and people on the East side of Elm Street, who would have been looking directly at the knoll as Kennedy passed in front of them as the shots were fired.

As the official investigations unrolled, people rightly smelled a cover-up.  We now know that there was more than one.  First, the Dallas FBI were all over Oswald.  J. Edgar Hoover himself knew who Lee Oswald was. How could someone who had the attention of the FBI shoot the President?  If the FBI couldn't protect the President of the United States from a known threat, what were they good for?  These were questions Hoover preferred avoiding.   Second was the botched autopsy at Bethesda the evening of the 22nd.  The doctors failed to follow procedure and failed to nail down important details.  Even elementary points such as the path of the bullet that entered Kennedy's back escaped them.  Third was the showdown at Parkland.  Kennedy's body was evidence in a murder case.  Since murdering a President was not at that time a Federal crime, any charges would have to be laid under Texas law.  The Dallas Police therefore had jurisdiction.  There was a guns-drawn showdown over JFK's body between the Dallas Police and the Secret Service.  The Secret Service agents were 100% wrong in taking Kennedy's body back to Washington, but the Dallas Police didn't feel like a gun battle, so JFK went back to Washington immediately.  As mentioned, there was an about-to-be botched autopsy waiting.  Lastly, this was a crime that should never have happened.  The Secret Service should never have allowed an open car in Dallas.  Assassination attempts were not exactly rare.  Both FDR and Truman had escaped determined, public attacks.  FDR's was in an open car.  Due to the Vietnam War, the Bay of Pigs, the Cuban Missile Crisis and Civil Rights, Kennedy was a polarizing figure, especially in the South.  Because he wore a corset to cope with wartime back injuries, Kennedy was a sitting duck in a car.  Some people see all this and think conspiracy.  At least partly due to my experience in bureaucracy, I see typical bureaucratic error and ass-covering.

The real key to understanding the event is not to be found in the evidence, however.  The key is Oswald.  Kennedy had nothing to do with it.  He just drove past the wrong building on the wrong day. It was all about Lee.  It was about being somebody, doing something important.  It was about Marina, and his mother, the Paines, the Russians who rejected him, the Cubans who ignored him, the FBI who harassed him, Dallas and his pointless, stupid job.  It was about Lee being powerful for once.  He could reach out, as he always wanted to, and touch important people and important events.  It was, truly, all about Lee.

Friday, November 21, 2008


What clever man has ever needed to commit a crime? Crime is the last resort of political half-wits.
Charles Maurice de Talleyrand

WW2: Barbarossa

    One minute before.  From Signal Magazine, 1941.
3:14 AM German time, Sunday June 22, 1941.  One minute before the start of Operation Barbarossa, the invasion of the Soviet Union.  On June 22nd, the same day Napoleon had invaded Russia in 1812, 3.5 million German and one million Axis troops kicked off the biggest military operation in history.  They attacked on a front stretching from the Arctic Circle to the Black Sea.  Hitler was convinced, and convinced his generals, that the Soviets would fall like a house of cards.  Hitler considered the Red Army a racially inferior mob of Slavs led by Jewish Communists.  If the Germans could defeat the mighty French Army in six weeks, then what chance did the Soviets have?  It appeared from the German point of view a logical train of reasoning.  There was little disagreement.

These soldiers are somewhere in what is now Eastern Poland, ready to jump off against a completely unaware and unprepared Soviet front line. The fire in the trees is probably due to a German artillery round falling short. Few of the front-line soldiers in the photo would survive the war.

My Pix

    Toronto railyard, dawn, 1985ish.
    Kodachrome 64 - 300 mm lens.  

For the interested, this photo was taken from the bridge on Bathurst street south of Front.  Its looking East across the CN railyard.  Most of that rail land is gone now.  Toronto had better uses for it.  The bridge is here   Google Maps.  From the satellite photo on Google Maps, it looks like this actual stretch of track still exists.

All my photos are on Flickr.


       Image: JPL Cassini 
The surface of Europa, one of Jupiter's many moons.  The surface of Europa is water ice. The lines come from cracks caused by Jupiter's tidal forces.  Scientists think there's a liquid ocean underneath the ice.  As a result, Europa is currently the best candidate for life elsewhere in the solar system.

Twenty five years ago, it was generally agreed that there was no possibility of life in the solar system outside Earth.  However, three things have changed.  First, we know far more about locations like Europa than previously, mainly due to Voyager and Cassini.   Second, a more general acceptance of the idea that the building blocks of life formed not on Earth, but in space.  This is Fred Hoyle's famous theory that life came via raining comets.  Life was, rather than a completely random process, an accident waiting to happen.  We should expect to see life anywhere with a combination of comets (everywhere in our solar system) and an environment conducive to life (possibly Europa, Titan and Mars at the least).  Last is the dawning awareness among scientists of the success of bacteria.  They are by far the most evolved and prolific life form on our planet.  The only place scientists have looked and not found bacteria on earth is; nowhere.  They've found bacteria everywhere they've looked.  Including under a kilometer of sediment at the bottom of the ocean.  If bacteria can live there, they could live in a liquid ocean under the Europa ice cap, if such an ocean exists.  It will take many years before we can have a look.  In the meantime, we have these marvelous and tantalizing pictures.

Wednesday, November 19, 2008


Exhaustion, Waffen SS soldier, Eastern Front 1944(?).  Here's the glory of war.  By this point in the war, the SS were what one person called, "a group of increasingly desperate men."  They had a gentleman's agreement with the Red Army; no prisoners.  Like his comrades, this man has a simple choice.  Fear doesn't matter, nor hunger, cold, or exhaustion.  If he doesn't keep moving, he's dead.


There is no such thing as part freedom.
Nelson Mandela

My Pix

    Seaweed, Point Lobos, California, 1981
Kodachrome 25 (I think), don't remember the lens.
These are usually under water, but exposed here at low tide.  They are about 6 inches tall.

Around here  on Google Maps.

All my photos are on Flickr.

Top Singers List

    Aretha Franklin, New York, 1961 

Rolling Stone has a list of the top 100 singers of all time.  Its a bit predictable, and heavy on 60's R&B, but still fun.  Guess who was number 1?

Tuesday, November 18, 2008

Faves: Grindhouse

So maybe a double-feature tribute to '70's B movies wasn't such a good idea.  The film got mixed reviews and a relativly poor box-office reception.  Between foreign markets and DVD, the thing may have broke even.  The two movies themselves are very uneven.  But they have their moments.  What makes this a winning package, to me at least, is the trailers.  Especially the one for Machete.  This is an example of the whole being greater than the sum of the parts.


Another in the tense meeting series.  Chester Nimitz makes a little speech on his arrival to take over the Pacific Fleet, December 31, 1941.  He's replacing the disgraced Husband E. Kimmel, who stands on the right.  What, exactly, are you going to say in a situation like this?  The fleet he's just taken command of is mostly sitting on the bottom of Pearl Harbour.  The Japanese might be returning for another attack any day, and the US Navy can't stop them.  The men standing before him are responsible for the worst disaster in American military history.  In Russia, they'd have all been shot.  Probably in Germany too.  In Japan they would have all killed themselves.  Too bad I can't find a reference to what he actually said.


If God dwells inside us, I sure hope He like burritos, because that's what He's getting!
Jack Handey

My Pix

   Malahide Castle, Dublin, Ireland, 1987
   Kodachrome 64 - probably 25mm lens

Here on Google Maps

All my photos are on Flickr.

Monday, November 17, 2008

My Pix

    Niagara Falls from the US side, January 1993
    Kodachrome 62 - 25mm lens

Here  is the spot on Google Maps.
All my photos are on Flickr.

Crash of The Valkyries

  Tom Cruise working hard at acting tough.

Its possible that Tom Cruise's new movie Valkyrie will be good, but I doubt it.  It has the stink of movies that fail before they even get started.  A vanity star vehicle, numerous re-writes, shooting troubles, re-shoots, delays in release, then finally a release date guaranteed to kill attendance.  Who wants to go to a film about a failed plot to assassinate Adolf Hitler on December 26?

I don't know why the movie was made in the first place.  Von Stauffenberg's coup was a keystone cops affair.  Poorly conceived and incompetently executed, it failed on every level.  Most importantly, the one absolutely key necessity, killing Hitler, was fumbled by Von Stauffenberg himself, twice.  Had Von Stauffenberg used all the explosives (which would have fit in the briefcase), he would have killed Hitler.  Had he set the bomb off himself, he would have killed Hitler.  But no.  Von Stauffenberg used half the available explosives, and fled the premises. Someone still at the meeting unknowingly moved the briefcase into a place where the bomb's damage was minimized.  Von Stauffenberg then took off for Berlin having failed to ascertain if Hitler was dead or not.  Incommunicado for several hours on a plane, his confederates could not communicate with him or coordinate the next steps.  But the wires from East Prussia started burning up right away with a very angry Hitler.  What hope the coup might have had faded before Von Stauffenberg arrived back in Berlin.  He was shot later that night.  Von Stauffenberg was that rare man, someone willing to bravely die for their country, singularly placed to have that sacrifice mean something, and then throwing that opportunity away through agonizing stupidity.

Von Stauffenberg is revered in German history.  This is because there were precious few examples of anti-Nazi activities through the entire war.  Not that the coup would have made much difference.  They were hoping that by deposing Hitler, they could induce the Americans and British to join them fighting the Soviets.  The chances of that happening were zero, as any reasonably bright 12 year old could have told them.

In truth, Von Stauffenberg's idiotic blundering removed any possibility of the war ending in 1944.  Just as both East and West fronts gave way and the Army was retreating in disarray, there would have been an opportunity for the military to topple Hitler.  Any combination of a dead Hitler and a conflicted, retreating Army would have arguably precipitated a general collapse of German resistance.   Instead of plotting, however, senior Army commanders were scurrying to hide from SS squads armed with piano wire and meathooks, bent on smoking out all the traitors responsible for the attempted coup.

Once you are aware of the story, its hard to believe anyone outside Germany thought it was worth a movie.  No matter what way you tell it, its a story of failure, missed opportunity and nasty revenge.  I'm predicting this is not a formula for holiday box-office success.  This is a movie that should never have been made.

Sunday, November 16, 2008


We can't all do everything.

My Pix

    Ruined 10th century church, Lispole, County Kerry, Ireland.

Here it is on Google Maps!


    The Beatles - Indra Club, Hamburg, August 17, 1960.  With Stu Sutcliffe and original drummer Pete Best.

Malcolm Gladwell's new book is about success.  Here is an extended excerpt from The Guardian.  After reading the article, I'm not sure I need to read the book.

Gladwell makes two interesting points.  First is that to acheive expertise in anything, you need around 10,000 hours or 10 years.  He examines the Beatles and Bill Gates to show they amassed such expertise at young ages.  He also talks about luck.  This factors into career success in two ways.  First, in atheletics, those who are born earlier in the year have a significant advantage over their younger comrades born later in the year.  He doesn't mention it in the excerpt, but Wayne Gretzky was born in January.  Second, those lucky enough to be in the right field at the right time can catch a wave.  He notes that the first personal computer appeared in 1975.  People born aroung 1955 were best placed to ride the computer wave.  They were old enough to have gained expertise, but young enough not to have already become part of the old system.  Bill Gates was born in 1955.  Paul Allen, 1953.  Steve Ballmer, 1956.  Steve Jobs, 1955.  Even more dramatic, in a Forbes compilation of the 75 richest people in history, 14 were born in the USA between 1831 and 1840.  Out of all the humans that have ever lived, 20% of the richest were born in one country in one decade.  Several more were born elsewhere, but emigrated to the US.  They became, of course, the robber barrons. 

Its hard to discuss, but all this makes me feel better.  I've never acheived the kind of career success I wanted or expected.  From a macro point of view, I guess it shouldn't be a suprise.  I entered the photography business at a point where it suddenly became impossible to earn a living from Canadian magazines.  I expanded into architectural photography at the beginning of a real-estate bust.  Had I gone into computers rather than photography, I might have caught the end of that wave.  But when I started getting interested, it was between the inital computer revolution and the Internet revolution.  By the time I got into the Internet business, the bust was at hand.  My current position was a port in a storm.  Because of my health issues, I can't feasibly look for anything new.  But Gladwell gives me some optimism.  I've acheived expertise in more than one realm, and still have time to do it again.  The Chinese say a man has time in his life for three careers.  I think Gladwell has described what they meant.

Friday, November 14, 2008


I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant.
H. L. Mencken

My Pix

    Molly McGinley, Hughd's Pub, Dunfanaghy, County Donegal, Ireland, 1988
    Kodachrome 200 - 18mm lens

Bad Debt

    Structural analysis of the US debt markets by M.C. Escher

Since nobody at the US Treasury Department seems to be listening to me, I'll re-iterate what I said yesterday.  Re-animating the system for securitizing consumer debt is not a solution to the problem.  The securitization of consumer debt is the problem.  The system can't be put back together because its fundamentally broken.

Two things have happened.  First, there was a systemic breakdown in the linking of risk and reward.  Securitizing mortgages allowed those who granted the mortgages to pass the risk to someone else via securitization.  Once securitized, the underlying risk of the individual mortgages was lost.  Its not just that investors sucked up securitized mortgages without looking at the underlying risk, its that they sucked them up despite being unable to look at the underlying risk.  That's not supposed to happen.  That it did is evidence the system itself was broken in ways only now coming to light.  The second thing was that global investors and US consumers used the broken system to throw a party.  Because there is no central exchange or clearinghouse for securitized debt, nobody knows the total amount out there.  US Consumers took on too much debt and there was no way to tell.  Had this information been available, alarm bells would have gone off long ago.  Everyone involved is guilty here.  The exchanges, the banks, the investment banks, the mortgage lenders, the consumers, the investors and especially the Fed and the Treasury Department.

OK, so now the system is broken.  What happens next?  The banking crisis will continue for some time.  One of the really bad things banks did during the boom was to securitize their loans and sell them off.  That took the loans off the balance sheet.  They no longer counted against the bank's lending ratio.  But who bought most of the securitized debt?  Other banks.  They bought the debt and put it on the asset side of the balance sheet.  Loans that should have counted against the bank's lending ratio were magically transformed into assets that increased a bank's lending ratio.  It is going to take years to unwind all twists and turns in bank assets.  In the meantime, banks are sensibly avoiding purchases of new securitized debt.  The debt market is thus frozen.  It doesn't matter how much money the Treasury Department throws at the banks, they are not going to turn on the taps again until the debt they already have gets figured out.

That brings up the next problem.  Because the risk/return relationship was disrupted by massive securitization, there is no way to know what the existing securities are worth.  The security is good until someone defaults.  Then its worth nothing.  Or more precisely, partly nothing since thousands of individual loans were combined into the securities.  In a theoretical worst case, you don't know that a batch of securitized mortgages is good until 30 years have passed and all the underlying mortgages are paid off.  In reality, modeling will tell you how good the pool is based on the performance of a small sample.  But the models depend on 20 years of historical performance.  They can't predict what's happening now, and they can't predict what's going to happen as a result.  Think of it this way.  20 years of data on a beach's wave action won't tell you when a tsunami is coming or how bad it will be.

Unfortunately, it gets worse.  Batches of securitized debt should have a consistent risk profile.  They should be just as risky today as tomorrow.  That's not the case anymore.  As US housing prices fall, and economic activity slows down, more and more of the underlying debts will default.  The gobs of securitized US consumer debt are getting riskier each day.  Again, no amount of government guarantees to the banks can change that.  As the crisis gets worse, more and more securitized debt goes bad.  It has now spread from the US housing market to the wider consumer market.  Securitized credit card debt, student loans and car loans are plunging in value.  As I said yesterday, US consumers have borrowed more than they can repay.  A clamp-down on consumer lending is inevitable and rational.  The entire system of creating wealth through selling securitized loans is broken.  The financial markets will have to either find new ways to facilitate debt or return to the pre-derivatives methods used prior to the '90's.  Either way, all the bad securities created in the last 20 years need to be undone, with un-foreseeable consequences.

Thursday, November 13, 2008

My Pix

    Haiga Sophia at sunset, Istanbul, Turkey, 1986.
    Kodachrome 64 - 300mm lens

One damn impressive building.  Here  it is on Google Maps.

All my photos are on Flickr.


Extreme positions are not succeeded by moderate ones, but by contrary extreme positions.
Friedrich Nietzsche

What Paulson Said

      Brendan Smialowski for The New York Times 
Henry Paulson's news conference yesterday scared the shit out of me.  It is now clear that the US Government has no plan to deal with the crisis.  They don't even understand it.  The key thing Paulson said was:
the important markets for securitizing credit outside of the banking system also need support. Approximately 40 percent of U.S. consumer credit is provided through securitization of credit card receivables, auto loans and student loans and similar products. This market, which is vital for lending and growth, has for all practical purposes ground to a halt. Addressing these two priorities will have powerful impacts on the overall financial system, the strength of our financial institutions and the availability of consumer credit.
Full text here .

Cheap, securitized credit was what got us into this mess.  More of it won't get us out.  The system is fundamentally broken.  Restoring the status-quo is not a viable option.  The system has to get fixed.  American consumers have financed their prosperity for the last 20 years through credit and the bill is due.

As a group, US consumers have a negative savings rate of 113%.  They owe $1.13 for each $1.00 of assets they own.  And with house prices still falling, that $1.00 of assets is going to be worth less.  But the $1.13 stays the same, so the problem gets worse every day.  The reason banks and credit card companies can't finance new consumer debt is because American consumers are a bad risk.  They already have more debt than they can pay off.  All the government money in the world won't change that.

The money Paulson wants to throw at the markets comes from one of three places; taxes, bonds or the printing press.  The current lame-duck Congress can't pass significant new taxes.  Obama has promised a tax cut to 95% of US households.  With the economy burning around them, US legislators will not support new taxes next year.  So the US government will need to borrow the money through selling bonds.  At some point, foreigners are going to see the staggering levels of US public and private debt as a problem.  Then they will stop buying US bonds.  At that point, the only way the US government can continue to function is by printing money.  That risks a dollar crash.  If the current problems are like Mount St. Helens, a dollar crash would be like Krakatoa.

Things are already looking dicey for continued massive US government borrowing.  China has announced an enormous stimulus package.  The best place for them to get that money would be to sell some of the almost $1 trillion they own in US Treasuries, creating a down-draft on the US$.  Even if they hold on to their Treasuries in order to keep the Yuan from going up, they will be spending their money at home, not lending it to the US.  Likewise the Japanese and the OPEC countries.  Lower demand and/or lower prices mean that they don't have as many US dollars that need parking.  Early signs of possible trouble in the US Treasuries markets have already surfaced.

An inability to raise taxes, lower demand for US Treasuries and a continuing need to throw money at the US credit markets sets the stage for a perfect financial storm.  This crisis is far from over.  The current US administration has not come to grips with the underlying problems.  The US financial sector still seems more focused on bonuses than survival.  Unless someone like Obama comes up with a really good idea soon, things are going to get much worse before they get better.

An excellent overview of the situation for the non-MBA by Niall Ferguson is here.  Long but worth it.


Future. That period of time in which our affairs prosper, our friends are true and our happiness is assured.
Ambrose Bierce

My Pix

    Flower stand outside Temple Tube Station, London, October 1984.
    Kodachrome 64 - 18mm lens

All my photos are on Flickr .

Tuesday, November 11, 2008

November 11

Captain Jeff Francis, 1st Regiment, Royal Canadian Horse Artillery, Shilo, Manitoba.  Captain Francis was from Halifax and was married, with one child.  He and six others were killed by a roadside bomb 20 km south-west of Kandahar City, Afghanistan, July 4, 2007. The others were Captain Matthew Dawe, Master Corporal Colin Bason, Corporal Jordan Anderson, Corporal Cole Bartsch, Private Lane Watkins and an Afghan interpreter. 

Monday, November 10, 2008


It's sad that a family can be torn apart by something as simple as a pack of wild dogs.
Jack Handey

My Pix

    Flowers, County Donegal, Ireland - 1988

Another harmonious combination of Kodachrome 200 and the 300mm lens.  This is one of my favorite photos.

Fun Facts To Know And Share

Elvis Presley, Chuck Berry and James Brown all made their first records in 1954.  Berry is the only one still alive.  He is still performing at age 82.  Here is his website .  I saw him perform in the late 1970's.  It was a great concert.

Sunday, November 9, 2008

My Pix

    Near Lispole,  County Kerry, Ireland - 1987

    Kodachrome 200 - 300mm lens
The keen-eyed will notice that this photo is taken from the road on Kinnard hill looking north-north-west.  The school is in the middle distance, Gowlin and Lisdargan in the far distance.  Punters may also want to note that Clooncurra, Churchfield, Deerpark and Emlagh now appear as place-names on Google Maps.

Kodachrome 200 and the 300mm lens were a killer combination.  I like this photo because it was atmospheric, hard to capture.  And I got it.

All my photos are on Flickr .

Saturday, November 8, 2008


When I was a kid in the 1960's, most of the adults had been through the war.  They all had stories.  Some were great.  The father of one friend had commanded a company of Shermans in Italy.  He had a fantastic story about Tiger hunting in Italian hill towns.  To go after a Tiger tank, the rule of thumb was that you needed five Shermans.  The Sherman's 75mm gun was useless against anything but the Tiger's rear.  Three Shermans would maneuver to get the Tiger backed up against a wall or a house.  The other two Shermans would fire into the structure.  The idea was to have one Sherman loaded and ready to fire at the rear of the Tiger as the other one brought down the last wall.  It was a very high-stakes game of chicken.

This photo of a Canadian Sherman outside Potenza in 1943 is pretty close to both the tank and the hill town in the story.


From the moment I picked your book up until I laid it down I was convulsed with laughter. Some day I intend reading it.
Groucho Marx
via Gabriel Robins


The cure for boredom is curiosity. There is no cure for curiosity.
Dorothy Parker

Faves: Everybody's Rockin'

I've got a soft spot for both Neil Young and Rockabilly.  So his 1983 Rockabilly album Everybody's Rockin' was a favorite from day one.

Rockabilly is the forgotten genre of American music.  Its an article of faith that Elvis' success came from re-packaging "colored" music for white audiences.  I've never agreed, because Elvis was Rockabilly through and through from the beginning.  His earliest and best records were made in Sam Phillips' Sun Records studios, the capitol of Rockabilly.  The same place that a young Johnny Cash was also making Rockabilly records before he went Country.

Neil Young captured the weird undercurrents in Rockabilly on Everybody's Rockin'.  You can see in Rockabilly the precursors of Las Vegas, Liberace, and over-the-top elements of white working class culture.  Fins, pompadours, leather jackets, motorcycles, electric guitars.  See exhibit A below:

    Gene Vincent and his Blue Caps in the studio, mid '50s.  These guys are intense.

Neil Young has been the most consistently inconsistent musician out there.  Going his own way has often left his fans behind.  Its been a struggle for relevance. I sympathize.  Getting people to pay attention has been a struggle in my various creative endevours.

Anyway, a Rockabilly album was natural for Young, and he delivered.  He made a bizarre and funny video for the single Wonderin'.  The only version online is this poor quality one, but its a little better than nothing.

Thursday, November 6, 2008

Language Map of Europe

From Book of Joe click the image for details.


More orchids


Edible, adj.: Good to eat, and wholesome to digest, as a worm to a toad, a toad to a snake, a snake to a pig, a pig to a man, and a man to a worm.
Ambrose Bierce

My Pix

College Street, Toronto - 1988
Kodachrome 200 - 300mm lens
Looking west from the top of the Toronto Hydro Building at Carlton and Yonge.  Shows a stretch of College street between University and Bathurst.

Tuesday, November 4, 2008


Divisional standards on parade.  I'm guessing this is the 1934 Nurmberg rally, but it could be anytime up to around 1938.  I have no documentary support for that, but its my feeling based on all the photos I've seen.  The Germans were good at spectacle.  The prominence of these standards at such a propaganda event reflects the totality of Hitler's co-option of the Wehrmacht.  The German Army ceased to serve the nation, but rather served Adolf Hitler. This is literal, they took an oath to him, personally.  Few officers questioned that oath until defeat was certain.

Here are the same standards on display in Red Square during the Soviet victory parade, June 24, 1945.  This parade was remarkable for several reasons, and mostly unknown in the West.  More photographs of this memorable day will appear in this series of WW2 posts.  While the Germans were good at spectacle, the Russians were good at symbolism.

My Pix

    Harbour, Mykonos, Greece - 1986
    Kodachrome 64 - can't remember what lens


I think age is a very high price to pay for maturity.
Tom Stoppard

Monday, November 3, 2008

Crazy Airport Approach

Tegucigalpa, Honduras - Yikes
You want a pilot that's done this before, a lot.

via Cheap Flights Finder 

My Pix

    Stairs, Sifnos, Greece - 1986
    Kodachrome 64 - Contax RTS - I think its the 300mm lens

To the extent I had a unique vision, here it is.  Abstract, architectural detail, low, hard, sculpural light, large flat areas, creamy white and blue colors.  This is as close as I ever got to a perfect picture.


If all the economists were laid end to end, they'd never reach a conclusion.
George Bernard Shaw

If all the girls who attended the Yale prom were laid end to end, I wouldn't be a bit surprised.
Dorothy Parker

My Pix

    Brooklyn Bridge, New York - January 1990
    Kodachrome 64 - Contax RTS2 - Zeiss 18mm f4


Another in the tense meeting series.  These are German troops surrendering to Canadians in Holland on May 5, 1945.  They may be surrendering, but these are not beaten men.  They still have fight in them and they're armed to the teeth.  The Canadians were extremely nervous about last minute complications or misunderstandings.  This event was 3 days before the general German surrender, so problems were possible.  The Canadians didn't relax until all the weapons these guys were carrying had been secured.  The kid on the right edge of the photo looks about 14.


I just watched Obama speaking live in Jacksonville.  He brought tears to my eyes.  It was one of the best speeches I've ever seen.  He pulled out all the stops in a way I haven't seen before.  There is a school of rhetoric developed by Southern US Baptist Ministers.  Martin Luther King was its most famous master, but far from its only expert practitioner.  Today, Obama used these techniques in Jacksonville to stunning effect.  I really want him to win.

------------------ Update
Just watched McCain speaking in Virginia.  By far the best speech I've ever seen from him.  He started slow and wobbly, but gathered strength and finished on a triumphal flourish.  Very impressive, but not in Obama's league.  With Obama, I know he's not telling the truth about lowering taxes.  With the current US deficits, taxes are going to go WAY up no matter who gets elected.  But Obama's lack of truth on this issue doesn't bother me.  I feel like he can't afford to be honest or he'll get squewered by the Republicans.  They are already hammering him as a socialist.  When McCain says he's going to lower taxes, lower energy prices and raise home prices, it sounds like he's out of touch or intentionally lying.

Anyway, its an interesting day to watch CNN.  The four candidates are speaking multiple times live today.  A political junkie's heaven.

Sunday, November 2, 2008


    Heathrow Airport from Google Map s click for bigger - note the concord parked in the upper right corner


A ponderous pre-war Soviet bomber.  This kind of plane didn't stand a chance against decent fighters or flak guns.  Neither the Russians, nor the Japanese, nor the Germans were able to field a credible strategic bomber during the war.  The British had two, the Americans four.  As a result, Japanese and German cities were reduced to rubble.  During the entire war, the Luftwaffe managed to kill about 90,000 British civilians.  By 1945, Allied bombing was killing more German civilians than that each week.  The Americans killed more Japanese civilians than that in a single raid, several times.

On the Eastern Front, air superiority was always a local issue.  The front was simply too big to gain anything more than a local advantage.  The only exception to this was the pre-emptive strikes carried out by the Germans on June 22, 1941.  However, the Red Air Force was useless at that point, and wouldn't have been able to slow the Wehrmacht much anyway.  In all, air power never had the decisive impact in Russia that it had in the West.