Friday, September 28, 2007

A New 4GW Theater on the Horizon?

The translation of a recent headline from Russia's Nezavisimaya Gazeta gives a feel for what is going down in Georgia: The Smell of Great Bloodshed.

Map courtesy the United States Central Intelligence Agency


It may just be a smell at the moment, but we could soon see Russian troops marching into "South Ossetia" in "Operation Ossetian Freedom" or something like it, in support of two breakaway regions in the country - Abkhazia and South Ossetia.

Tensions have been high between Russia and the former Soviet republic of Georgia for several years. Georgia underwent the "Rose Revolution" back in 2003, part of the color-wheel revolutions that swept a number of countries, bringing to power governments more or less favorable to the United States.

Georgia has been a loyal supporter of the United States in Iraq, sending in hundreds of troops, which have recently been increased to thousands - some of which are on patrol and in combat. In addition, Georgia has petitioned NATO, which angers the Russians, who have been accused of helping sponsor the two breakaway regions mentioned above.

With no love lost between the two sides and with the Russians wanting to roll back the advances NATO made into the lands ruled by the old USSR, this might be just the conflict the Bear is looking for to make its point.

From Stratfor (from their very valuable Intelligence Brief service) this morning we get a fresh look at the rising tensions and a recent clash that could signal open war:

Few states despise each other more than Russia and the former Soviet republic of Georgia. Displaying their venom for each other was the event of the day at the United Nations on Thursday. The core incident the two sides debated occurred Sept. 20 and both sides more or less denied the other's description of events.

According to Georgian President Mikhail Saakashvili in his speech to the General Assembly, Georgian forces detained a group of militants led by a Russian lieutenant colonel in the Kodori Gorge, a mountainous region that straddles the border between Georgia proper and Abkhazia, a Russian-backed secessionist region. Saakashvili pointedly asked, "One has to wonder: What was a vice colonel of the Russian military doing in the Georgian forests, organizing and leading a group of armed insurgents on a mission of terror?"

The Russian response, both from Moscow's U.N. ambassador and Russian Foreign Minister Sergei Lavrov was not long in coming. Lavrov claimed the Russians were on an anti-terrorism exercise and that when the Russians acceded to the Georgians' demand that they disarm, two Russian instructors were executed with knives and gunshots to the head.

Why the Russians waited seven days before mentioning this to the world raised more than a few eyebrows. Also odd was the dispassionate way in which the Russian dignitaries brought up the topic. There were no calls for apologies or justice, just a bland hope that the U.N. observation mission in the area would get to the bottom of things.

There are really only two scenarios to consider. Either the Russians were executed and the Russians just found out the details, or there were no executions and the Russians have chosen to ratchet up tensions.

Either way the result is the same: the Russians have now put themselves in a place where they cannot easily back down. Their credibility is on the line. Either Russia can allow Georgia to think it is okay to execute its soldiers, or it can visit consequences upon the Georgians. It is almost as if the Russians were beginning to build a logical case for an intervention in Georgia. In fact, that is likely precisely what they are doing.

There are signs that the Russians may already be moving. The night of Sept. 26-27 witnessed heavy mortar exchanges between Georgian villages and the South Ossetian capital of Tskhinvali. South Ossetia is Georgia's other pro-Russian secessionist region. Thursday also brought with it reports that Abkhaz forces were advancing on the border of Georgia proper.

Neither the Abkhaz nor the South Ossetians are capable of doing more than harassing their border regions -- their combined population is only 250,000 vs. Georgia's six million and their gaining and maintenance of de facto independence would have been impossible without extensive Russian military assistance.

None of this is conclusive, but the mortaring, the troop movements and the seemingly detached use of the word "executed" is beyond the pale even for the troubled Caucasus. The events of Thursday -- and a week earlier -- could just go down in history as yet more spittle exchanged between a fallen empire and its former colony. But never forget that Russia has the means and motive to crush Georgia -- and with the United States occupied in full by Iraq, Russia now has the opportunity...

One key fact to remember. In addition to acting as a "lily pad" from which the US and NATO can project power into Russia's sphere of influence, Georgia plays host to a portion of the Baku-Tbilisi-Ceyhan pipeline, a key source of Caucasus oil that does not run through Russian territory.

Map courtesy Wikipedia

So, let's review the situation in Georgia:

  1. We have a small country that is key link in a pipeline that transfers up to 1 million barrels of crude per day to world petroleum markets. This million barrels of crude is far more vital to the United States and Europe than it is to Russia - who is currently still an exporter of oil.
  2. Georgia, a country sharing a border with Russia, is trying to join NATO
  3. Georgia has two low-level insurgencies brewing, both supported to one degree or another by Russia
  4. Georgia is supporting U.S. forces in Iraq and is now putting troops into combat situations, thereby beginning to create a force, small though it may be, that has experience in counterinsurgency warfare.
  5. Russia is feeling more and more confident these days in her power. Demonstrating that power through a short, successful military campaign that crushes a fledgling NATO-aspiring country would go a long way to put the Baltic States and Eastern Europe on notice that Russia means business and that her interests must be taken into account.

Now, that high-octane mix of factors might just convince the Russians that a quick attack into Georgia, in support of the Ossetians and Abkhazians might be a low-risk, high-reward operation. That, in my opinion, would be a grave miscalculation.

You'd think the Russians would remember their experience in Afghanistan against a small country supported with U.S. arms. The Georgians would almost certainly adapt to a 4GW style of conflict. The Georgians would suffer greatly, but the Russians would pay the price in either an occupation that would drag on for years, resulting in many casualties, or in a quick in-and-out campaign that creates a generation of terrorists based in Georgia, plotting and executing attacks all through Russia.

Let's keep a close watch on this, folks. We might be witnessing the birth of a brand new theater of Fourth Generation Warfare and a new generation of GlobalGuerrillas.

Thursday, September 27, 2007

Iran WarWatch (Part Fifteen)

With the recent visit by Iranian President Ahmadinejad to the U.N. now behind us, I figure it is time to revisit the Iran WarWatch.

On the face of it, this would appear to be another step towards open war between the U.S. and Iran. The very savvy John Robb is thinking along these lines:
Ahmadinejad's visit is an opportunity for a manufactured uproar, which in turn will lead to the designation of the Revolutionary Guard Corps as a terrorist organization. This, of course, is the pretext for bombing the Guard.

I'd say he's probably correct, but as we move forward, I wonder if I have underestimated Bush 43. I am on record as opposing the invasion of Iraq from the get-go and have thought many of his actions will leave the U.S. in a much weaker geopolitcal position when he finally leaves office.

But with recent positivie developments in the North Korean talks, I am beginning to wonder if the Bush 43 administration is making a final push to wrap things up on their foreign policy agenda - via diplomacy, of all things.

Talks with North Korea have been going well, recently, and have resulted in the shutdown of the Yongbyon reactor. In addition, there have been reports from Stratfor (sorry, behind a subscription wall or I'd link to it) that maybe there was a nuclear connection between the NORK's and Syria and that the raid was conducted off of detailed information given up by the NORK's. I still regard it as unlikely, but I guess it is possible.

If that is the case, then we might see a "Grand Bargain" of some sort very soon which would bring North Korea in from the cold in the same manner Libya was reintegrated into the world system when they gave up their nuke program and ratted out the AQ Khan network.

That would leave Iran one very isolated place. With North Korea taken care of, the Bush 43 administration would then be able to focus solely on Iran (well, and Syria, I guess, but that is more of a sideshow). That focus might still be via the military, such as strikes on IRGC bases, but with a big diplomatic win with charter "Axis of Evil" member North Korea, the Iranians might, just might, but up for caving in to U.S. demands.

That would require continued high levels of optimism and confidence, which implies continued high levels in the various financial markets and general economies of most of the countries who wield a big stick - the U.S., the Europeans, Russia, China, etc.

Maybe, just maybe, they can wrap this thing up with both Iran and North Korea before the worst of the eonomic effects of the Baby Boom generation retirement wave, the mortgage mess and the credit card debt bomb are felt. That would give us a much better context in which we would enter the coming downdraft in mood and markets.

Wednesday, September 26, 2007

A Baby Step in the Right Direction


South Texas Project (Image: STPNOC)

The first of hopefully many Combined Operating License applications for new nuclear reactors was filed yesterday. The U.S. may finally be taking steps to secure her energy future. I am cautiously optimistic, but have full faith in the ability of the Baby Boom generation of leaders to screw it up. We shall see.


South Texas Project (STP) is already home to two pressurised water reactors (PWRs). Units 3 and 4 will be Advanced Boiling Water Reactors (ABWRs) with a total capacity of at least 2700 MWe, according to NRG. The site, in Matagorda County, is considered to be one of the best in America for nuclear expansion, according to NRG. The site itself and its cooling reservoir were originally designed to support four units, and the two new units will be built adjacent to the existing ones.

NRG president and CEO David Crane described the licence application as heralding a new day for energy in America and a new day for the environment. "Advanced nuclear technology is the only currently viable large-scale alternative to traditional coal-fuelled generation to produce none of the traditional air emissions - and most importantly in this age of climate change - no carbon dioxide or other greenhouse gases," he noted.

The decision to use GE-Hitachi ABWRs reflects NRG's analysis that such units are well proven, four of them having been operating in Japan for up to ten years, and they have full design certification in USA. The design also has excellent credentials for construction time and bringing the units in on budget...

Tuesday, September 25, 2007

Another Deflationary Canary Drops Dead

The "coal mine" of the economy is becoming littered with bodies of canaries alerting the aware to a very, very dangerous situation.

A reduction in the availability of credit is - say it quietly - the very definition of deflation...

Barclaycard cuts consumer credit limits
by Harriet Meyer, Guardian Unlimited

Barclaycard has cut credit limits for half a million customers in an effort to reduce the number defaulting on their debts. Britain's biggest card issuer, with 10m holders, is also tightening the criteria for people applying for cards, rejecting more than half of applicants, as well as monitoring existing cardholders' debts.

The strategy, which follows a review of credit limits last year, is aimed at cutting the level of bad debt. Barclaycard is also using information available to it from other lenders under new industry data-sharing initiatives.

Monday, September 24, 2007

Thank You, Colonel Stanislav Petrov

Heroic actions don't usually take the shape of a man jumping on a grenade to save his fellow soldiers. They often come in the form of one individual who takes a stand in the face of enormous pressure from peers, bureaucracy and the law of the land. This week back in 1983, one man changed the course of history through sheer individual bravery.

In this case, we see a clear example of the root causes of the Chernobyl disaster that would occur a few years later - blind obedience to orders from a hierarchical authority. In this case, though, one man, one individual (yes, you socialist bastards, the individual does make a difference in history) stood up and used his own mind, his own reason to avert catastrophe. The cowardly engineers at Chernobyl did not.

But why would the engineers at Chernobyl stand up and stop an obviously idiotic series of tests to continue in violation of clear safety procedures when Col. Stanislav Petrov, who made a brave and ultimately correct choice that save the world from nuclear armageddon, was punished for his bravery?

Actions have consequences. For the USSR, those consequences ultimately destroyed it.

Stanislav Petrov — World Hero

...During the Cold War at this time, the United States and the Soviet Union were bitter adversaries. These two world powers did not trust each other, and this distrust led to a dangerous consequence: They built thousands of nuclear weapons to be used against each other if a war should ever break out between them. If there ever were such a war, these nations would very likely devastate each other and much of the world many times over, resulting in the deaths of perhaps hundreds of millions of people.

It was Lieutenant Colonel Stanislav Petrov’s duty to use computers and satellites to warn the Soviet Union if there were ever a nuclear missile attack by the United States. In the event of such an attack, the Soviet Union’s strategy was to launch an immediate all-out nuclear weapons counterattack against the United States.

On this particular day, something went wrong. Suddenly the computer alarms sounded, warning that an American missile was heading toward the Soviet Union. Lt. Col. Petrov reasoned that a computer error had occurred, since the United States was not likely to launch just one missile if it were attacking the Soviet Union — it would launch many. Besides, there had been questions in the past about the reliability of the satellite system being used. So he dismissed the warning as a false alarm, concluding that no missile had actually been launched by the United States.

But then, just a short time later, the situation turned very serious. Now the computer system was indicating a second missile had been launched by the United States and was approaching the Soviet Union. Then it showed a third missile being launched, and then a fourth and a fifth. The sound of the alarms was deafening. In front of Lt. Col. Petrov the word “Start” was flashing in bright lettering, presumably the instruction indicating the Soviet Union must begin launching a massive counterstrike against the United States.

Even though Lt. Col. Petrov had a gnawing feeling the computer system was wrong, he had no way of knowing for sure. He had nothing else to go by. The Soviet Union’s land radar was not capable of detecting any missiles beyond the horizon, information that by then would be too late to be useful. And worse, he had only a few minutes to decide what to tell the Soviet leadership. He made his final decision: He would trust his intuition and declare it a false alarm. If he were wrong, he realized nuclear missiles from the United States would soon begin raining down on the Soviet Union...

Sunday, September 23, 2007

Speaking of Argentina

Hat tip to Blue Owl over at the LATOC Forum for letting me know about this article on the situation in Argentina, post-collapse and devaluation. A long article, but well worth your time. Print it off and read it at work and your boss will think you are being productive. You will be, but in a way he or she won't imagine until it is too late:

Lessons From Argentina's Economic Collapse

And, for you quants out there, here is a very intersting paper on how the Argentine stock market actually boomed during the collapse - in response to the currency controls and bank freezes. There are a lot of lessons to learn from our friends down south.

The price of inconvertible deposits: the stock market boom during the Argentine crisis
by Eduardo Levy Yeyatia, Sergio L. Schmuklerb, Neeltje Van Horenb
Abstract
The Argentine crisis witnessed, among other things, a deposit run, the suspension of deposit convertibility, and a ‘‘boom’’ in the stock market. We argue that this boom reflects the cost that depositors were willing to incur to get their money out of the banking system, in light of the impending risks. This boom was generalized to all stocks and more pronounced in liquid stocks. Furthermore, the boom was a symptom that deposits were effectively restricted and that investors were not able to circumvent capital controls.

What Happens When You Kill Your Currency

...and you have a massive debt load. The following spots illustrate how a developed, wealthy country plunged into financial and social chaos when their debts caught up with them.

We in the U.S. should be paying very close attention to what happened during and after the Argentinean peso collapsed in 2001-2002. The YouTube spots have that tiresome socialist focus on "the masses" and "mass demonstrations" and go light on root-cause analysis. That said, there won't be a lot of clear thinking going on if something similar happens here in the U.S. Note also how the tensions marry up with the oppressive legacy of the military governments of the 1970's - folks looking to hang their anger on all sorts of emotional pegs.



Note in Part 1 they blamed the U.S. and the IMF. Expect to see "China" inserted where you just saw "USA" when they do these interviews here, post-collapse.



Ahhh, pot-bangers and left-wingers. Again, get used to it. I suggest adding a good supply of earplugs to your oh-shit kit for when the "spontaneous proletarian uprising" starts up. Also, note the decentralization and local councils that sprang up in response to paralysis on the part of the governing elites. I can't imagine the local councils will govern much better, but I do expect it as part of a natural response. I do wonder what things were like in the rural areas, though.



Taking over a factory so they can continue to work (as opposed to shutting it down, like they saw in the 1970's)? Could happen. If nothing else, it proves that these were reasonably decent, hard-working folks caught up in a storm they didn't create or comprehend. And, of course, more socialist jargon...



Well, I do feel for the lady interviewed at the beginning of this clip, but when you can reduce the workforce of a company by 90% and still operate, there was something going on there. Sure, the big bosses probably went too far, but obviously labor had implemented a serious feather-bedding operation there too. And in the end, the workers pay - not the union or corporate bosses.



More strikes and protests. Again, I wonder how the less-politicized and more pragmatic people out in the countryside reacted? How did folks in the pampas or in the small towns and cities of the Andes handle things?

Time to review socionomics texts to look for potential trends.

Warning? Prelude? Or just interesting history?

Review of the FOMC Action

This is the common view of what is in store for the U.S. economy. I am more in the deflationist camp, short term, but it is good to know what we might be facing.

I personally think that the Fed won't go out of their way to collapse out the value of the U.S. dollar, as the value of the Fed's holdings would be eroded in turn, so beware of a near term rally in the USD. That isn't financial advice, just guesswork as we move into a critical period in the economic life of the United States. Current trends indicate we can hold the markets together for another quarter, at least. I'm all in favor of it. Every day gained is another day for preparation.

Friday, September 21, 2007

Secondary Effects

In a complex 4GW world, those acting against the system are counting on the asymmetric effects and the overreactions of those in "authority" to amplify their actions. The rad-poisoning death of Alexander Litvinenko is an interesting case in point. This particluar assassination, assuming the Russians did it, was not a strike by a 4GW entity as such, but it does illustrate how one small act can monkeywrench a much larger system.

Litvinenko Murder Hits Cancer Patient Drug Deliveries
by Jonathan Tirone

Sept. 20 (Bloomberg) -- The death of former Russian spy Alexander Litvinenko, killed by a lethal dose of the radioactive polonium-210 isotope in London last year, is leading to unlikely new victims: cancer patients.

Companies and countries are refusing to handle thousands of radioactive isotopes that are used to diagnose and treat cancer and the trend has increased since Litvinenko's death, the United Nations atomic agency said late yesterday. The boycott is hurting doctors' abilities to treat patients in countries that need to import the material.

"British Airways will not carry radiopharmaceutical cancer treatment for patients in the United Kingdom,'' said Jack Edlow, chair of the International Atomic Energy Agency committee investigating the shipment denials. "You can't get these things into the U.K. at the moment. It's a problem.''

This is a very real problem. In my day job, I work for a civlian nuclear facility that makes thousands of radioactive shipments all over the U.S. and into Europe. Many of these shipments are of medical compounds or active ingredients used to treat cancer. We've had numerous incidents where a customs agent just decided to halt a shipment because he or she didn't like the radiation symbol on the box. The fact that there was a cancer patient on the other end of that shipment, in excruciating pain, was irrelevant. The fact that that same customs agent would be exposed to more radiation smoking a pack of cigarettes or eating a bunch of bananas was also irrelevant. His or her uneducated and unnecessary fear is all that matters. 4GW uses such weak points in the system to major effect.

And, just FYI, but the Jack Edlow cited in the article above is one of the top gurus in the world when it comes to shipping radioactive material.

Because of the fears that have been whipped up over radiation, rad shipments are treated with much more scrutiny than shipments of far more hazardous materials such as toxic chemicals and explosives.

In the 4GW manual that someone is going to publish some day, you may rest assured that finding minor systempunkts like this will be one of the commandments for those who would break apart the globalized world trading system.

Thursday, September 20, 2007

Miscellaneous Current Events

For those of you keeping tabs on how "black globalization" and 4GW entities are evolving, there are a recent string of blog posts that will interest you:

"al Qaidastan" Rising - ZenPundit kicks things off with an overview of the legitimacy of 4GW entities.

Elements of 4GW - Soob gives an excellent short list of the flavors (failed or otherwise) of recent 4GW entities. I agree wholeheartedly that Hamas is a failure. They never should have taken over de jure power in Gaza if they wanted to remain success in the eyes of their target constituency.

The TAZ and black globalization - John Robb touches on the topic as well

Syria-a-go-go

Also, let me put on my tinfoil hat for a moment regarding the recent Israeli strike(?) on Syria. If this is more disinfo and/or propaganda in a run-up to a larger series of attacks on Syria, Iran, Hezbollah, et al, then maybe we need to turn a skeptical eye towards this recent tragic story out of Lebanon:

Bush Says Assassination in Lebanon Aimed at Silencing Democracy


By Paul Tighe and Camilla Hall, Bloomberg

Sept. 20 (Bloomberg) -- President George W. Bush condemned the killing of an anti-Syrian lawmaker in Lebanon as an attempt to ``silence'' people working for democracy as he blamed Syria and Iran for trying to destabilize the country.

The killing of Antoine Ghanem, a member of the Lebanese Phalange Party, in an attack in Beirut yesterday, is part of a ``tragic pattern of political assassinations,'' Bush said in an e-mailed statement issued late yesterday in Washington.

The "cowardly attack comes days before the Lebanese Parliament is scheduled to convene to elect a new president,'' Bush said. The U.S. stands with the Lebanese people as "they resist attempts by the Syrian and Iranian regimes and their allies to destabilize Lebanon and undermine its sovereignty.''

Would it be worth the life of a Lebanese lawmaker if it would generate enough world support for an attack on Syria and Iran? Interesting calculus. I have no proof, so I'll hold off on speculating further, but such a dramatic assassination at a time of high tensions between Israel and Syria would seem to be counterproductive to the Syrian position.

That said, maybe the Syrians wanted to send a message that they too can reach out and make their displeasure felt. We shall see.

Wednesday, September 19, 2007

More Lies Greenpeace Has Told Me

We take another break from worrying about finance markets and 4GW to review a recent "Top 10" issued by our friends over at Greenpeace. It is focused on Canada, but the press release is typical of the memes that Greenpeace tries to infect the mediastream with across the world.

This will run a bit long, but I just can't stand it when these jokers use half-truths to scare people into supporting the Greenpeace dogma.

"Top Ten" List Against Nuclear Power

1. Nuclear power produces radioactive waste

Canada's nuclear reactors have produced over 40,000 tonnes of highlyradioactive fuel waste, which must be isolated from humans and the environment for a million years. When reactors are dismantled, they become radioactive trash, which must be isolated from the environment for hundreds of thousands of years. Mining and processing uranium for reactor fuel also produces waste known as tailings. There are currently over 200 million tonnes of uranium tailings in Ontario and Saskatchewan. This waste remains a hazard for thousands of years and contains carcinogens, such as radium, radon gas, and thorium among others.

Typical disinformation. Waste products are generated. Of course, waste products are generated when you build PV cells for solar power systems or make the specialty materials needecd for wind mills, too. Nuclear power at least gives you tremendous amounts of power in exchange for the wastes you create. Plus, the waste issue is very overstated.

Currently, when fuel rods are used in Canada, they are taken out and stored. They are not reprocessed, which would basically take about 85%-95% of the material and enable it to be reused in new fuel elements. The Brits, the French, the Japanese and the Russians all recycle fuel in this way, making the waste stream much smaller. The U.S. doesn't recycle either. By separating out the various portions of the used fuel rods, you can actually pull out the hot stuff and isolate it. By it's very nature of decaying so rapidly that it produces large doses of radiation, it will decay away much more rapidly. You can even destroy it in a "burner" reactor. But every time you mention reprocessing, Greenpeace gets hysterical as well. So they hate the waste, but hate ways to minimize it as well. I give them style points for holding the position, but the logic is lost on me.

The tailings material is stuff that was dug up from the ground. The radium, radon, etc. was going to be there anyway. Mining it didn't make it radioactive.

Reactor components do need to be isolated when a facility shuts down. Items such as the pressure vessel and associated piping very well might need a place to rest for a few thousand years - but hundreds of thousands of years? For what component? Until they give details, that looks like a blatant lie.

2. Nuclear power limits clean energy

A dollar can only be spent once and every dollar spent on nuclear is a dollar not available for green energy and conservation. Ontario's current commitment to nuclear mega-projects will lock Ontario into an inflexible, centralized electricity system for at least 50 years. Investment in renewable energy, conservation and local generation will be suppressed as capital will be tied up in nuclear projects and green energy entrepreneurs will invest elsewhere. Nuclear power is a Trojan Horse in the fight to stop climate change - a cynical deception to revive a dying industry.

Amazing. Nuclear power generation can give tremendous outputs of electricity for large numbers of citizens with practically zero emissions. But it is not clean and green?

And, actually, nuclear power plants could be critical components of a distributed grid power system. Not all plants are in the thousand megawatt range. Some, like the pebble-bed modular design being perfected in South Africa, could provide a network of stable electricity in the low hundreds of megawatts, providing reliable energy in an era of unreliable continent-wide grids.

Investors will put money where they can get results and a return on their money. If nuclear is so bad, why are big money players moving back into the industry? It is not dying, it is just getting started. As for cynical, I'd say many Greenpeace tactics could be termed that as well.

3. Nuclear power isn't safe

Safe nuclear power is a myth. Human error or technical failure could causea meltdown at any of Canada's nuclear reactors. Imagine the consequences of a Chernobyl scale accident here in Canada.After Chernobyl, over 350,000 people were forced to permanently relocate, destroying local economies and communities. The high price of resettlement, health care, environmental clean-up and lost agricultural capacity has costthe Ukraine and Belarus hundreds of billions of dollars, forcing them toestablish a 'Chernobyl tax' to pay nuclear power's high costs. The nuclear industry knows that the risk of major nuclear accident is realand requires a special law, the Nuclear Liability Act, to protect itfinancially from the liability of an accident.

Lie. Safe nuclear power is a reality. How many people have died in coal mining accidents over the last twenty years? From natural gas explosions? From exposure to toxic chemicals at the silicon plants that make photo-voltaic cells for solar systems?

How many have died in Canada or the U.S. in a commercial nuclear power plant due to an accident? Zero.

Chernobyl was a horrible design run by a country (the USSR) that valued politics over engineering safety. That type of accident could never happen in a Western reactor due to a wide variety of differences in design. Read more here. This lie has been debunked so many times, I won't waste my breath on it.

4. Nuclear power plants are a terrorist target

Nuclear power plants are attractive targets for terrorists because oftheir importance to the electricity supply system, the severe consequences of radioactive releases and because of their symbolic character. Canada's nuclear reactors were not designed to withstand a deliberate crash by a jumbo jet full of fuel, or many other types of attack. Such an attack would have widespread and catastrophic consequences for both theenvironment and public health.

Name me one nuclear power plant that has been a terrorist target. One. Just one. Oh, I'm sorry, you can't.

I won't relate the details of safety and security systems found in plants due to NRC regulations, but obviously Greenpeace needs to hire folks with an engineering background who can actually do a materials analysis on impact scenarios.

They are the best-protected infrastructure in most any country they are located in. Nice to see Green"peace" take a page from the fear and hate-mongering neo-cons with the whole terrorist distraction.

5. Nuclear power is unreliable and dependent on fossil fuel

Coal and nuclear stations work as a dirty tag team in Ontario's electricity system. When our nuclear reactors perform poorly, we crank up the coal plants for lack of alternatives - alternatives that we never built because system planners assumed, in spite of 30 years of evidence to the contrary, that nuclear performance was just about to get better. The root cause of our current smog crisis can be traced back to the early 1990's when declining nuclear performance eventually culminated in the 1997 shutdown of eight of the province's twenty reactors - the largest nuclear shutdown in world history. As a result, Ontario turned up its coal plants and emissions causing acid rain, smog and global warming to more than doubled. After undergoing $2 billion dollars in repairs, two reactors at the Pickering A nuclear station were shut down again this summer for repairs, boosting our reliance on coal yet again.

I can't speak to the Canadian experience there. I am skeptical because nuclear power plants in the U.S. have a 90% capacity factor (meaning, they operate 90% of the time - an astounding number in the industry - compare it to, at best, 30% for wind and ~12%-17% for solar). Nuclear is actually the most reliable form of power plant in the U.S.

The designs that AECL has proposed to build in Canada are in use around the world and have been built on-time and on-budget.

I'll have to let Greenpeace go with that one due to a lack of time for me to check the facts, but you might want to do some digging on your own on that factoid they threw out.

6. Nuclear power can make nuclear weapons

Every state that has nuclear power capability is only months away from having nuclear weapons capacity, according to the International Atomic Energy Agency. Countries such as India and Pakistan used so called peaceful Canadian nuclear technology to develop the atomic bomb. North Korea developed nuclear weapons criteria even as a signatory of the Non-Proliferation Treaty. Existing international controls failed to stop the export of sensitive nuclear technology to Libya, North Korean and Iran.

Dear Lord, what a crock. Countries with nuclear power are not "only months away from having nuclear weapons." To build a bomb, the material you need is the metallic form or either U-235 (around 90% with the rest being mostly U-238) or Pu-239 which can be generated in the types of plants that Canada has. The problem is the fuel is in ceramic pellet form.

Reprocessing, which I pimped out above, can be mis-used to provide such material, but those facilities would be under IAEA seal. And, even once you do have the material, building a working bomb is very complex. The whole "easy to build an A-bomb" lie was exposed when their big bomb test turned out to be a fizzle.

Sigh. What a red herring. Yes we need international controls and inspections, but peaceful uses of nuclear power give countries a resource they can use to grow their economies and provide for their people and, hopefully, reduce the causes of war. Oh well, another point they've taken and blown out of proportion.

7. Nuclear plants emit radioactive emissions

Nuclear stations release radioactive pollutants into the air and thewater. Radioactivity can be absorbed by living things through air, water andfood. Exposure to radioactivity increases the risk of cancer and having birth defects. Canadian reactors release levels of radioactive tritium at levels that are considered hazardous by European radiation protection standards. Because there is no fail-proof way of isolating radioactive waste for a million years, Canada's stockpiles of radioactive waste will be future radioactive pollution.

True. Nuclear power plants do generate tiny amounts of radioactive gas and tritium. Tritium is radioactive, true, but at such an absurdly low level that no negative health effects have ever been proven. Tritium is regulated because of its radioactive nature, but guess what - a shipload of bananas contains more radioactive material than the levels produced by the tritium at plants. (Bananas contain potassium, which as a naturally radioactive isotope). Ugh. Get your risk levels figured out.

I really like the "exposure to radioactivity increases the risk of cancer and having birth defects" part. That is true - at high levels. At the levels we are talking about (tritium, the noble gases released, etc.) there is no proven link to health problems at all. As a matter of fact, there is much evidence that low-level radiation is actually beneficial to living systems. Again, the neo-con fear tactics. Did these guys work for Bush 43 before joining Greenpeace?

8. Nuclear power is expensive

Every nuclear plant in Canada has undergone massive cost over-runs and delays. The high cost of nuclear power effectively bankrupted Ontario Hydro and every month Ontarians pay down the nuclear industry's massive debt ontheir electricity bill. And there are still bills to be paid: the industry estimates that the long-term management of radioactive waste will cost $24billion. Worse, the costs of any serious nuclear accident or impacts of radioactive pollution from nuclear waste will be borne by society and not the nuclear industry.

Again, a topic that has been debunked so many times that I will just link to one of many studies here and go on with my life.

I don't have details on the Canadian situation, but if it is anything like the U.S. then the power producers are paying into a trust fund for waste treatment or disposal.

9. Nuclear power is unpopular

After decades of cost over-runs, poor performance and mounting stockpiles of radioactive wastes, Ontarians are rightly skeptical of nuclear. In pollafter poll, Ontarians rate the nuclear power just above coal-fired generation in their energy preferences. Polls also show that Ontarians believe that Ontario's electricity plans are being written at the behest of the nuclear lobby and do not fully develop Ontario's green energy potential.

I wonder why it is unpopular? Could it be from the many lawsuits, some of which had zero merit, used to hamstring and defame the industry, plus the many "press releases" used to spread half-truths by Greenpeace and others?

And, by the way, notice that they have to turn to a playground argument at this point. Not once have they talked about the capacity factor of nuclear versus wind or solar. They've not talked about Greenpeace opposing more hydro in some cases.

10. Nuclear power is slow to build

The expert consensus is that climate change must be stopped within thenext 10 years to avert the worst impacts. New nuclear reactors take 10 - 15years to build and cannot contribute to stopping dangerous climate change. Due to the long lead times involved to build new nuclear stations and the declining performance of Ontario's ageing reactors, recent energy modelling by the WWF and the Pembina Institute shows that Ontario's current nuclear mega-project energy strategy will keep Ontario dependent on coal until as lateas 2017. To phase out coal in the near term, Ontario must adopt a modern approach to energy planning and commit to a portfolio of energy options that are quick to deploy, such as conservation, renewables and local decentralized generation.

10-15 years to build? On what planet? If Greenpeace, et al, were not trying to tie up utilities in court at every step of the way, they could build plants as quickly as they do in China or Japan - roughly 4 to 5 years from first concrete to connecting to the grid.

The Canadian style reactors have been built on these time frames in China. Again, on-time and on-budget. But somehow Canadians can't do what Chinese can?

And, another question - what "experts" did they get their consensus from?

I know it won't make much difference, but such a blatant bunch of B.S. needed to be called on.

Mood Swing

I know we are just at mid-week, but I did want to comment on that huge spike upwards in the Dow Jones Industrial Average yesterday. Chart pic courtesy http://www.nasdaq.com/

Fed Chairman Ben Bernanke announced a 50 basis point rate cut yesterday afternoon and the DJIA ends up 335 points. Absolutely amazing and another confirmation of socionomics.

There was no reasoning involved in that spike up in the afternoon. There was no logical thought, no cold analysis of the numbers. It was a herd of men and women all throwing money into one place in a very short period of time.

Now, I'm all for it, personally. The longer this market remains elevated, the more time I have to prepare for the coming economic storm. But please don't be fooled into thinking that a 0.5% drop in the fed funds rate means anything. Please note that a lot of mortgage rates key off the 10 year treasury.

Yesterday's cut was window dressing. But this entire market is one huge hallucination anyway, so I guess let's just keep passing out the intoxicants and keep the party going as long as possible. It's going to be one ugly morning after, though.

Tuesday, September 18, 2007

Shhhhhhh

How soon before we see "Don't Taze Me Bro'!" t-shirts on college campi everywhere?

Part of me feels for the kid. He got all worked up over injustice. Rose up to expose the evil-doers to the light of truth by getting Sen. Kerry on his side, then rambles on and on and on and on...

Come to think of it, he sounded a bit like this...

Sunday, September 16, 2007

One Hell of a Week...

“It’s going to be one hell of a week...”
- anonymous investment banker

This could be a very, very emotional week around the world. How the financial markets express it will set the trend for the rest of the year, in my opinion.

First, we have the following story from which the above quote was lifted:

World’s banks hit for $30billion in credit crunch
Louise Armitstead and David Smith

THE world’s investment banks are to reveal a $30 billion (£14.9 billion) hit from bad debts as they unveil results that give the first real insight into the impact of the debt crisis.

City analysts predict the banks will have to write down as much as 10% of the $300 billion of leveraged loans currently agreed but not yet syndicated when they report third-quarter results to the market.

Banks are also expected to announce further hefty provisions to cover their exposure to commercial paper, including the so-called conduits and SIVs, a type of highly leveraged investment fund. In some cases profits for the third quarter could have been almost wiped out by a combination of exposure to bad debts and complicated commercial paper.

Kian Abouhossein, banking analyst at JP Morgan, said: “The hits will essentially mean that some investment banks will have made almost no money over the last quarter. Profits will be close to zero..."

And of course, the ongoing emotional panic centered on the United Kingdom's Northern Rock bank:

Crisis at Northern Rock Comes to a Head
by Michael Shedlock

...Northern Rock is getting what it deserves. Taking on massive amounts of long term mortgage loans financed by short term borrowing in an overheated housing market is begging for trouble. Beg for trouble long enough and eventually it will find you. Expect to see more of these kinds of events on both sides of the Atlantic...

Add to the mix the constant stream of "terror" and "war" related memes fed into the global mediastream via the Iraq, Iran and Afghanistan brands of "news" and you have the potential for an explosive week to the downside as the herds of men and women who make up markets, countries and civilizations across the globe choose to express their fears and anger through bank runs and snap military "decisions" that might wind up coming back to haunt us all.

Keep a close eye on September 18th-19th. Folks might use the excuse of the Federal Reserve meeting to panic one way or the other.

If we get out of this week clean, then, in market parlance, we will be successfully climbing a wall of worry and one can expect a nice run through the end of the year, more or less.

If we see panic begin to take over, then, my friends, we have moved from Act I to Act II of the Great Unraveling. Here's hoping the playwright has a few more scenes in Act I, allowing us all more time to finish preparing for what comes next.

Spy Games

The following story makes great reading and will bring a smile to those of us who rejoiced at the fall of the Berlin Wall:

The Farewell Dossier
by Alan Bellows

In 1982, operatives from the USSR's Committee for State Security– known internationally as the KGB– celebrated the procurement of a very elusive bit of Western technology. The Soviets were developing a highly lucrative pipeline to carry natural gas across the expanse of Siberia, but they lacked the software to manage the complex array of pumps, valves, turbines, and storage facilities that the system would require. The United States possessed such software, but the US government had predictably turned down their Cold War opponent's request to purchase the product.

Never ones to allow the limitations of the law to dictate their actions, the KGB officials inserted an agent to abduct the technology from a Canadian firm. Unbeknownst to the Soviet spies, the software they stole sported a little something extra: a few lines of computer code which had been inserted just for them...

Now, aside from reminiscing about sticking it to the Soviets, this should also be a cautionary tale in today's fragmenting world.

With corporate and privatized espionage rampant - who knows what sorts of disinfo is making it into product lines at corporations around the world? How much disinfo has been flooded onto the internet by operatives of various countries or multi-national corporations? What might the consequences be?

Just another reason for you to educate yourself broadly. In the Coming Chaos, we are all going to have a tremendous responsibility to care for ourselves and those we call friend and family. Being able to spot at least the obvious flaws in software outputs and technical documents could save your butt some day.

Saturday, September 15, 2007

Another Return on Disruption Stat

I'm off to the game, but will leave you with this recent posting from the formidable John Robb:

MEXICO: ROI (return on investment) for Mexico disruption

"Investment likes silence" Mexican Economy Secretary Carlos Arce on the negative impact these attacks could have on foreign direct investment (FDI) in Mexico.

New ROI estimates for the September attacks on Mexican natural gas pipelines:
  • Over 2,500 business will suffer severe harm in 11 of Mexico's 32 states. 1,100 companies have shut down production. Key industries impacted: Auto, glass, food, and cement. For example: Volkswagen (1,780 cars a day, 81% of which is for export).
  • Revised estimate of $200 million a day in costs.
  • Impact expected to last for a week.

ROI for an attack that cost less than estimated $10,000 to accomplish? Rough estimate: 1.4 million percent. Welcome to modern war.

Welcome to modern war indeed.

Friday, September 14, 2007

Sparse Posting

I'm still trying to run down more information on this "nuclear installation" in Syria as well as trying to figure out the chart of the DJIA - whether I can relax a little in anticipation of another big upward thrust (good news all around) or if we are teetering on the edge of something calamitous. I should probably leave charting to the experts like Prudens Speculari, but I can't help myself.

I'm intrigued by flurry of Iran wartalk as well - blaming Iran for supplying the arms used in a recent attack on U.S. forces, continued tensions, etc.

Plus, the strain on the credit markets continues to grow. How long before plastic deformation and fracture sets in, as we engineers like to ask?

Nothing really new to post - very busy at work and at home, plus the Tigers kick off their home opener tomorrow, so I've been getting ready for the first tailgate. Here at FutureJacked, we cover all facets of the human condition.

Have a good weekend. Keep an eye on the Iran/Syria/Israel/U.S. "story" and hope things will continue to be all talk, no bombs.

Wednesday, September 12, 2007

Syrian Alarm Bell

Okay, something is very, very fishy over in the Middle East at the moment. Yes, I know that it is a less-than-stable area of the world in the best of times, but this recent Israeli incursion in Syria looks to be something much bigger than a reconnaisance run that was detected:

U.S. Confirms Israeli Strikes Hit Syrian Target Last Week
By MARK MAZZETTI and HELENE COOPER, New York Times

WASHINGTON, Sept. 11 — After days of silence from the Israeli government, American officials confirmed Tuesday that Israeli warplanes launched airstrikes inside Syria last week, the first such attack since 2003.

A Defense Department official said Israeli jets had struck at least one target in northeastern Syria last Thursday, but the official said it was still unclear exactly what the jets hit and the extent of the bombing damage.

Syria has lodged a protest at the United Nations in response to the airstrike, accusing Israel of “flagrant violation” of its airspace. But Israel’s government has repeatedly declined to comment on the matter.

Officials in Washington said that the most likely targets of the raid were weapons caches that Israel’s government believes Iran has been sending the Lebanese militant group Hezbollah through Syria. Iran and Syria are Hezbollah’s primary benefactors, and American intelligence officials say a steady flow of munitions from Iran runs through Syria and into Lebanon.

In the summer of 2006, during fighting between Israeli and Hezbollah forces, the militant group fired hundreds of missiles into Israel, surprising Israel with the extent and sophistication of its arsenal. Israel has tried repeatedly to get the United Nations to prevent the arms shipments across the Syria-Lebanon border.

One Bush administration official said Israel had recently carried out reconnaissance flights over Syria, taking pictures of possible nuclear installations that Israeli officials believed might have been supplied with material from North Korea. The administration official said Israeli officials believed that North Korea might be unloading some of its nuclear material on Syria

What is going on here? I completely understand the Israeli Air Force (IAF) hitting some suspected weapons dumps that they think were intended for Hezbollah. But why the complete silence? Is there something bigger involved?

And what in the world is meant by "nuclear installations"? If the NORKs are shipping plutonium to Syria and/or Iran, you don't need a "nuclear installation" (again, define that term, please, oh mighty New York Times) to work with plutonium in its metal form. You need a clean facility with some machine tools, some good filters and one that is preferably (from a Syrian point of view) deep in some heavily fortified bunker. You don't need a reactor. You don't need an isotope separation facility.

What in the world is being left out of this news story? Is this just propaganda (the whole nuke warhead fear thing) for a run-up to an attack on Iran and Syria? Is this, hopefully, solid intel that the public is only getting a taste of? Is this completely bogus information and no one really knows what the hell is going on?

Something is not right about this situation. More to come if I can scare up hard info.

That's Fedtastic

Below please find an article on the U.S. Federal Reserve and its ability, or lack thereof, to contain the coming credit storm. I've reproduced the article with permission and in its entirety.

Enjoy.

Why the Fed is Such a Lousy Wizard of Oz
By Susan C. Walker, Elliott Wave International

Central bankers who "follow the yellow brick road" end up in Jackson Hole, Wyoming, every Labor Day weekend for their annual symposium sponsored by – who else? – the Kansas City Fed. (Who can forget Judy Garland saying to her little dog, "Toto, I've got a feeling we're not in Kansas anymore," in the 1939 movie, The Wizard of Oz?)

The Jackson Hole Resort serves as the Federal Reserve's equivalent of the Emerald City, as Fed governors and presidents meet with central bankers and economists from around the world to discuss economic issues. This year, the symposium focused on housing and monetary policy. Usually, the Fed chairman kicks off the symposium and, this year, the new chairman, Ben S. Bernanke, did the honors. He closed his speech with these words:

"The interaction of housing, housing finance, and economic activity has for years been of central importance for understanding the behavior of the economy, and it will continue to be central to our thinking as we try to anticipate economic and financial developments."

Then came the other speeches. And it seems that some of the guests in Emerald City were waiting for their chance to pull back the curtain and prove that the Wonderful Wizard of Oz isn't such a wizard after all. Bloomberg reported that "Federal Reserve officials, wrestling with a housing recession that jeopardizes U.S. growth, got an earful from critics at a weekend retreat, arguing they should use regulation and interest rates to prevent asset-price bubbles." Apparently, one academic paper presented at Jackson Hole graded the Fed an 'F' for the way it has handled the repercussions from the rise and fall of the housing market.

Truth be told, these folks are a little late to the table as critics of the Fed. We're glad they're joining us, but here's what they still haven't learned: It isn't because the Federal Reserve messes up by allowing credit, asset and stock bubbles to form that it's not a wizard. The Federal Reserve isn't a wizard for one particular reason that it doesn't want anybody to know – and that is that the Fed doesn't lead the financial markets, it follows them.

People everywhere want to believe in the Fed's wizardry. But all this talk about how the Fed will be able to help the U.S. economy and hold up the markets by cutting rates now is as much hooey as the Wizard of Oz promising Dorothy, the Scarecrow, the Tin Man and the Cowardly Lion that he could give them what they wanted: a return to Kansas, a brain, a heart, and courage. Because when the Fed does do something, it always comes after the markets have already made their moves.

If you don't believe it, you should look at one chart from the most recent Elliott Wave Financial Forecast. It compares the movements in the Fed Funds rate with the movements of the 3-month U.S. Treasury Bill Yield. What does it reveal? That the Fed has followed the T-Bill yield up and down every step of the way since 2000. And the interesting question becomes this: Since the T-bill yield has dropped nearly two points since February, how soon will the Fed cut its rate to follow the market's lead this time?

[Editor's note: You can see this chart and read the Special Section it appears in by accessing the free report, The Unwonderful Wizardry of the Fed.]

We've got our own brains, heart and courage here at Elliott Wave International, and we've used them to explain over and over again that putting faith in the Fed to turn around the markets and the economy is blind faith indeed.

"This blind faith in the Fed's power to hold up the economy and stocks epitomizes the following definition of magic offered by Teller of the illusionist and comedy team of Penn and Teller: a 'theatrical linking of a cause with an effect that has no basis in physical reality, but that – in our hearts – ought to be.'" [September 2007, The Elliott Wave Financial Forecast]

Because, you see, what makes the markets move has less to do with what the unwizardly Fed does and more with changes in the mass psychology of all the people investing in those markets. The Elliott Wave Principle describes how bullish and bearish trends in the financial markets reflect changes in social mood, from positive to negative and back again. To extend the metaphor: The Fed can't affect social mood anymore than the Wonderful Wizard of Oz could change the direction of the wind that brought his hot air balloon to the Land of Oz in the first place.

As our EWI analysts write, "With respect to the timing of the Federal Reserve Board rate cuts, we need to reiterate one key point. The market, not the Fed, sets rates." Being able to understand this information puts you one step closer to clicking your ruby red shoes together and whispering those magic words: "There's no place like home." Once you land back in Kansas, your eyes will open, and you will see that an unwarranted faith in the Fed was just a bad dream.

Susan C. Walker writes for Elliott Wave International, a market forecasting and technical analysis company. She has been an associate editor with Inc. magazine, a newspaper writer and editor, an investor relations executive and a speechwriter for the Federal Reserve Bank of Atlanta. Her columns also appear regularly on FoxNews.com.

Monday, September 10, 2007

Iran Alarm Bell

Here's something you want to keep on your radar. I don't think it rises to the level of adding to part of the Iran WarWatch series, but it could be a marker on the road to further conflict around the Persian Gulf.

Production line for Mo99-tc99m radiopharmaceutical launched: AEOI

TEHRAN, Sept. 9 (MNA)-- The Atomic Energy Organization of Iran announced on Sunday that the mass production of Molybdenum 99 - technetium 99m radiopharmaceutical has started and medical centers will be supplied with the drug within a few days.

“The therapeutic compound, which is used for diagnosing many diseases, including those that require a scan from heart muscles, marrow, salivary glands, thyroid, parathyroid, lungs, liver, kidney etc. has been thoroughly produced by Iranian scientists and the alumni of national universities,” Dr. Mohammad Ghannadi, the chairman of research center for nuclear science and technology, told reports at a press conference on Sunday.

In 120 centers for nuclear medicine in Iran, 10,000 patients use this radiopharmaceutical every week, Ghannadi said, adding that from the next week on the nuclear research center will supply two third of the country’s need for this compound, Ghannadi stated.

“Production of this compound at home was important not only in terms of technical (progress) but also in terms of economic saving,” he noted.

Iran used to spend over $3 million a year to import required amounts of Mo99-tc99m, but now a significant proportion of the country’s need can be produced at home, he explained.

No big deal, right? Just some nuclear medicine work, so who cares.

Mo-99 (which means it has an atomic weight of 99 - naturally occuring isotopes of elements differ in the number of neutrons held in the nucleus - they have the same chemical properties, but different nuclear properties) is unstable decays down into Tc-99m which gives off a low-energy gamma ray that is easy to pick up using special medical detector devices. It's been used for decades to help diagnose a huge range of diseases and cancers. We speak in terms of Mo-99 because it has a half-life of 2.7 days while Tc-99m only has a half-life of 6 hours. You can process and ship Mo-99, knowing that all the while it is constantly cranking out the Tc-99m you need (this is the basis for a Tc-99m Generator).

Get to the point? Okay. There are two main methods to make Mo-99. In the first method, called the "n-gamma" process, natural molybdenum (24% Mo-98) or molybdenum highly enriched in the Mo-98 isotope, is placed in a nuclear reactor and bombarded with neutrons. This creates a significant percentage of Mo-99 that can then be processed and used in Tc-99m Generators. This is not the process used by most major manufacturers these days.

The way to make significant amounts is to take thin foils of uranium and place them in a reactor. It is most efficient to use highly-enriched uranium (something above 20% in the U-235 isotope, the isotope that is of concern to bomb-makers), but low-enriched uranium has been proven to work and theoretically natural uranium can be used as well. The foils sit in the reactor. They are hit by neutrons and the Uranium-235 splits apart (fissions). Six percent (6%) of the time, this creates Mo-99. Then, after a few days, you take the foils out, put them in an acid bath and, using a variety of chemical carriers and separation steps, you isolate the Mo-99 in almost pure form. This is then made into Tc-99m Generators that are more efficient than the "n-gamma" ones.

Why Worry?

Why this matters - that means, if the Iranians are producing Mo-99 via the fission process and are able to do it in large quantities, they have mastered at least some of the skills necessary to do radioisotope separation. This is very important if you want to accumulate plutonium to make your own bomb. You can do this by putting a lot of uranium-238 in a reactor. The U-238 picks up neutrons and, usually, instead of fissioning, transmutes into plutonium-239, the isotope of interset to people who want to make nuclear weapons. The Israelis and North Koreans followed this path (as did the U.S. in the Fat Man device that was exploded over Nagasaki) in their weapons programs.

The Iranians do not appear to be following the plutonium bomb path. They seem intent on focusing on enriched uranium (enriched in U-235). So why worry? A few reasons.

First, they could be hedging their bets, just like the U.S. did in the Manhattan Project. Two different bomb types, two different paths to follow to produce the material needed. Redundancy and flexibility. Iran, in my opinion, is nowhere near the ability to produce Pu-239 in large quantities, but who knows if they've been able to construct some sort of neutron source and are following this path in secret. I'm sure there are a lot folks at Langley and Fort Meade worried about this as well. Assuming they are using the fission-product Mo-99 process, they are now building up the skill sets to take advantage of this path.

Second, this could be part of a reason for the U.S. to pull the trigger on air strikes. Who knows what other data (correct or not) the U.S. intel services have on Iran's suspected weapons program. This announcement (again, assuming they are using the fission process - I will hunt this down if I can) is an alarm bell ringing loudly that the Persians have some ability and skill with radioisotope separation. If it is incorporated into a bunch of other "signals" coming out of Iran, this could be the straw that breaks the camel's back, so to speak. The chemical process that launched a thousand airstrikes.

Or not. Here's hoping I am making a mountain out of a mole hill. Have a great week, but be prepared for some excitement.

Sunday, September 9, 2007

A Crash From The Past

Anyone wanting a refresher in how various financial manias can sweep a country, to collapse in a heap of deflation and despair, link over to this Google Books version of Only Yesterday: An Informal History of the 1920's.

"Only Yesterday deals with that delightful decade from the Armistice in November 1918 to the panic and depression of 1929-30. Here is the story of Woodrow Wilson's defeat, the Harding scandals, the Coolidge prosperity, the revolution in manners and morals, the bull market and its smash-up. Allen's lively narrative brings back an endless variety of half-forgotten events, fashions, crazes, and absurdities. Deftly written, with a humorous touch, Only Yesterday traces, beneath the excitements of day-to-day life in the 20s, those currents in national life and thought which are the essence of true history."

Remain Calm, All Is Well (Part Seventeen)

The next two weeks will tell the tale in the derivatives markets, and thus, in the financial markets and eventually mass mood as relates to economic progress.

You will be told time and time again, that the economy is strong and that the "fundamentals are sound". You can even choose to believe it. Please then ignore the following:

Banks face 10-day debt timebomb

CDO Losses Can't Be Quantified (!!!)

Central banks face a liquidity trap

And, for old times sake, review this article by Bill Lind on a possible future we face when Iraq veterans finally do start coming home, right in the teeth of a housing and finance collapse...

Friday, September 7, 2007

And on a Lighter Note

We do hereby interrupt the credit crunch, collateral collapse, the bleeding 4GW wound of Iraq and the pending assault upon Iran for a few minutes of laughter.



Greg Warren is one funny S.O.B. We attended college together and he was responsible for a nickname that has stuck with me for over 17 years. Thanks Greg. I think.

This Guy Gets It

Take a few minutes and listen to this amateur take on markets and events. Note especially his talk about the implications of the problems in commerical paper and payroll implications...



If you have time, check out the array of videos he's posted on his YouTube account. Interesting stuff.

Thursday, September 6, 2007

The Coming Shift in Attitude

With financial markets holding together amazingly well in the face of a drumbeat of very negative financial news and with the conflict in Iraq seemingly finding some sort of equilibrium (though I believe it to be just a pause on the road to Hell, I hope I am wrong) I wanted to revisit the topic of "attitude" or perception.

As Napoleon is reputed to have once said in the context of war, the moral is to the physical as three is to one.

In eras of great change, such as the one we are just now embarking upon, there can be significant tension between the old, accepted wisdom and the new reality. One of the main victims of this Coming Chaos, in my opinion, will be a repudiation of the excellence of U.S. scientific, financial and governmental institutions.

And when such perceptions change, then the door to revolution (military, scientific paradigm change, religious, etc.) or collapse is opened. A quote from the acerbic-to-the-point-of-distraction James Howard Kunstler paints the scene:

...As US manufacturing decamped to low-labor-cost nations, we turned increasingly to the manufacture of abstruse investment schemes designed to create "value" ingeniously out of thin air rather than productive activity. These succeeded largely because of the momentum of legitimacy American institutions accumulated in the years after the Second World War. The rest of the world believed our ingenuity was backed by credibility. That momentum has about run out.

You will hear about central banks and hedge funds and derivatives and mortgage backed securities, and all kinds of jargon, but the issue will really come down to matters other than finance. Are we building a society with a future? Does our culture affirm life or yearn for destruction? Are our daily ceremonies and rituals meaningful or empty? Are our hopes and dreams consistent with what reality has to offer? Can we look in the mirror and say that we are upright people?

Often I dismiss the more extreme conclusions of Mr. Kunstler. He strikes me as an angry Baby Boomer, longing for the destruction of a system he does not like but offering little in the way of something constructive to replace what he would tear down. Except for building more railroads and building prettier, more community-oriented homes (both of which I am in favor of) he has little to offer other than bile and scorn. An unfortunately common theme among that generation of "activitst" types.

But here he has a point. There will come a time where some large bastion of American excellence will fall because the foundations have been neglected and because we've relied on reputation rather than effort. My best guess? It will come somewhere either in the realm of physics, possibly with the Chinese, Japanese and Indians adopting the Electric Universe model of astrophysics, leaving U.S. Universities in the dust as new discoveries are made or something radical will happen in the realm of life sciences - some discovery about disease pathways or stem cell funtionality that is currently being missed due to cultural blinders.

What's the big deal? It's just science at work, right? Well, in my opinion, these types of revolutions can be watershed moments where cultures on the upswing take command of the intellectual heights and where a significant loss of confidence in institutions overwhelms a culture on the downswing.

This is not always a bad thing for the culture on the downswing. Such shocks can lead to the sweeping away of hidebound institutions and reinvigorate efforts in the sciences and industry. Of course, they can also lead to a fatal loss of confidence akin to what swept western Europe in the late 1930's when the rising, revolutionary power of Germany confronted, and almost crushed, the old imperials powers of France and the U.K.

This has been a bit rambling today. I'll try and put together something a little more coherent in the coming days. Until then, the markets and world events seem to be holding up well. We are seeing progress in North Korea. Things are dicey in Iraq, especially where Iran is concerned, but there is still time before the attack that I believe is inevitable.

Enjoy it and here's hoping this calm lasts a bit longer.

Tuesday, September 4, 2007

A Little Iraq for You

Swamped by a big project with little time to FutureJack. An original post is coming, but until then:

News from the Front: America’s military has mastered 4GW!
by Fabius Maximus
...There is no “Iraq Army.” There are many units loyal to specific ethnic, regional, or religious groups – including some loyal (at least for now) to the Coalition. But few are loyal to the Iraq government...

Monday, September 3, 2007

Whew

Looks like I was wrong about worrying about an "incident" yesterday. For my U.S. friends, have a great Labor Day. Everyone else, the same.

Saturday, September 1, 2007

DEFCON Two

Not to be alarmist, but please do keep your eyes open and your "oh shit" kit handy this weekend. One of the analysis services I subscribe to has issued a warning for either a string of "accidents" or attacks, probably beginning on September 2nd and probably centered in the U.S. Northeast.

I realize this is vague, but I won't publish the details because there aren't many to be had. For my U.S. readers, enjoy that Labor Day barbecue with friends and family, but be mentally prepared for upheaval. If you are at work or have a few minutes, please review your Gambler's Analysis of where you and your family stands today in terms of cash on hand, transportation and medical needs.

Here's hoping I am completely wrong on this alert...

Also, while I have you here, check out this story from the New York Times. This sort of financing tactic by globalguerrillas has been going on for years. Glad to see the Times catching up.

Terror’s Purse Strings
Guest Op-Ed by Dana Thomas
...Most people think that buying an imitation handbag or wallet is harmless, a victimless crime. But the counterfeiting rackets are run by crime syndicates that also deal in narcotics, weapons, child prostitution, human trafficking and terrorism. Ronald K. Noble, the secretary general of Interpol, told the House of Representatives Committee on International Relations that profits from the sale of counterfeit goods have gone to groups associated with Hezbollah, the Shiite terrorist group, paramilitary organizations in Northern Ireland and FARC, the Revolutionary Armed Forces of Colombia...

Good luck policing it.