THE VIEW FROM CHAOS MANOR
View 479 August 13 - 19, 2007
Highlights this week:
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August 13, 2007
Niven says he has run out of inspiration, so it's my turn in INFERNO II. What I want is a story as poignant and memorable as Dante's Paolo and Francesca. A tall order, and probably beyond my ability to write. It's not beyond Niven's. But this does mean I have to think up the general outline and let him loose on it. If this gives you some insight into how we work together, so be it.
I'm very happy with what we have done with Aimee Semple McPherson. And Carl...
There was considerable good discussion of the Global Warming Scam -- it's becoming that -- over the weekend. In particular, you must read Freeman Dyson's disquisition on the subject. I regard Freeman Dyson as one of the sanest men on the planet. We have had our differences, but they are differences for a reason, and on issues that reasonable men can disagree on. Freeman Dyson rejects the "consensus" on global warming on much the same reasoning I have, but he has gone into more detail on the physics involved. Read his essay.
All of which means that the campaign to label "Global Warming Deniers" as heretics to be burned at the stake will go into even higher gear. Watch for moves to denounce Dyson -- perhaps all the Dysons including Esther -- as idiots and fanatics. There is a great deal of money at stake in the Global Warming Scam, enough that I expect the next stage to involve lawsuits and violence. After all, the planet is at stake! The Fate of Mankind is at issue! How can the DENIERS be permitted to exist? Depend on it, there's enough money involved that it will come to that. Of course most of those involved will have Good Intentions. They Mean Well.
I have given up my attempt to consolidate Mail and View on one page. It does mean you are going to have to help: I don't play games with promoting this site, although perhaps I should. I do try to build an intelligent readership, witness the fact that I have the best mail section on the web: I defy anyone to show me a better one.
It does mean you have to do your part by inviting intelligent friends. I am not after a mass readership; but I do want people who believe in rational discussion. And if you have a chance to link to this place, it might be worth doing.
|This week:||Tuesday, August
On our walk yesterday we spied a dead crow. I attempted to report it to the city health authorities. When I called the number, I got a long message in English from Mayor Villaraigosa, followed by the same message in Spanish, followed by a long wait listening to the Los Angeles Chamber Orchestra. Since I was on a cell phone with lousy reception I gave up. Roberta reported the dead bird when we got home and she could use a speaker phone. Incidentally, despite her efforts, the dead crow is still in our neighbor's driveway this morning.
Finding a dead crow is fairly unusual. The last time I saw a dead crow was some years ago, and there was a flock of 40 or so crows flying around above the body, and making a great fuss.
Actually, I have to correct that: about 5 years ago I found an injured young crow, that had probably fallen from a great height. I took it home, which took considerable nerve because more than a dozen crows attempted to stop me. They were quite aggressive in their attempt at defending the helpless youngster, and after I put the young crow in the bird cage I keep for fledglings -- we have raised about a dozen young birds, mostly linnets but also a mocking bird, a ring-neck dove, and a thrush -- after I put the young bird in a cage the others hung around to watch. Alas, the bird couldn't perch properly although it was old enough to do so, and it died.
My point being that in both cases there were many crows around, all concerned about the dead bird in one case and the dying fledgling in the other. Yesterday's crow lay on the parking strip alone. There aren't enough crows left in Studio City to form an honor guard for it.
A few years ago flocks of 30 or so were common, and in the evenings they would all fly to some common location, so that you'd see several hundred crows getting together to talk over the day's events before they dispersed at dusk. They didn't live in huge flocks, but they seem to have remembered that their ancestors once did.
No more. A dozen crows is a large flock now. They're most seen in pairs, or fours.
It's due to West Nile virus, which has become endemic in Los Angeles county, having come to the eastern United States in 1999. Precisely who brought it here is unknown, although in theory one is not supposed to be admitted to the US when carrying a virus infection. Some speculate that it came in via an infected bird. West Nile is carried by mosquitoes. It can be directly infectious as well. And, alas, it was spread by blood transfusions and organ transplants before hospitals began to screen for it in donors. Now Canada and England worry about Americans bringing in West Nile to their countries.
West Nile Virus is one consequence of diversity that might not have been prevented if we had kept the old Melting Pot concept of Americanization of all immigrants. On the other hand, one of the characteristics of American culture is cooperation with the public health authorities. It might have been caught and quarantined. It might not have been.
West Nile has been in the world a long time, and surely people infected with it have come to the US before in the past centuries. It's only recently that it got uncontrollably loose.
The United States was not built on the notion of diversity. It was build on the notion of e pluribus unum: from many we become one. You could study to become an American, and provided you did so, you would be accepted. There might be initiation rituals: "No Irish need apply"; but over time, as the Jewish police captain in Serpico says, "When I joined the force you had to have an uncircumcised shamrock between your legs to get promoted." Far from the objects of discrimination, Irish had become favored. The same happened with Italians. St. Patrick's Day Parades, Columbus Day Parades, Serbian Halls, recall those times when we celebrated our diverse origins -- but did so as part of Americana.
You could study to become an American, and over time we were becoming one. The Melting Pot worked. There was a long delay in allowing American Blacks to become part of that process, but even that was happening -- until we discovered diversity as a goal. Now the very idea of e pluribus unum is derided.
When I was a guest of Nokia in Finland a few years ago, I was introduced by the President to a Vice President: "He is a Swede who lives in Finland." It turns out that this man's family had lived in Finland for over a hundred years. At the time I thought that was odd. I suppose today it can happen here.
The United States was built on the notion of the Melting Pot: once you became an American, you were American first and your origin wasn't important. We didn't always live up to those ideals -- it took Truman and the Korean War to end segregation in the Armed Forces -- but it was the ideal. No more. We are not told to forget the Melting Pot and becoming American.
This morning the papers tell a story: in Thousand Oaks, one of the safest cities in America, a 7 year old boy named Molina was hacked to death by his mother's friend Calvin Sharp. The mother's name was Ruiz. The boy had apparently spent too much time playing video games.
Welcome to diversity.
The hedge funds are crashing, and Wall Street is threatened. The story is all over the papers. It's a very old story of supposedly smart people using their "technical analysis" of the market to make predictions. When things go on as they predicted they become confident. They borrow money on their stock holdings to buy more stock. Pretty soon they are speculating on borrowed money. It's all borrowed money.
Huge sums are injected into the markets this way. It's all paper. The housing market gets huge shots of money. There's no place to put it, so people without incomes and without credit are loaned large sums. All this money goes into the housing market. The price of a house goes up, and up, and up -- my house, which I bought in 1968 for $30,000 ( a lot then; I was able to borrow 90% of that because I was a college professor with nearly perfect credit) is said to be worth more than a million dollars now. Since the market is going up, it doesn't matter if people without income buy houses on 100% interest only loans; they'll still "build equity" as the price (not value) of the house goes steadily up, and even if they default on the loan everyone will make money. They can sell out for a profit.
In 1929 people bought Insull stocks without knowing what the companies did: they knew the stocks would go up. The resulting crash was overture to the Great Depression. Too much money chasing too little of value. One of the "reforms" of that time was to limit the margins in the stock market. You couldn't play the market on borrowed money secured only by the "value" of your stocks. At least not more than 10% margins...
But the smartest people in the world, the hedge fund managers, found ways around that in recent years. The result was the housing bubble, and a new stock market bubble. We went through all this once before, with stocks valued at 100 times -- not earnings, because the company hadn't earned anything yet -- but 100 times expected earnings. I warned readers in 1998 that this couldn't be sustained for long. For a stock to be worth 100 times its earnings (let along expected earnings) would mean that it would take 100 years for the stock to earn enough to pay for itself. Thus the only way it could be worth that would be for it to go up: for earnings to go up by a factor of 10 every couple of years. But if you look at the potential market for the company's services, there was not a growth factor of 100 even if the company had no competition at all.
The result was the dot bust. We now have new bubbles, and the smartest people in the world, the hedge fund managers, are astonished that they have suddenly lost as much 30% and more of their capital value in a few weeks. Of course the capital "value" may not have been there in the first place.
And they never catch wise.
Note too that a great deal of our employment base is in the "service economy". That phrase covers a multitude of positions, many very low paid: but also a number of the glamour go-go positions, the lords of the earth as described in Tom Wolfe's novel. None of them produce anything that can be eaten, ridden, worn, or even watched for entertainment. Their entire "productivity" consists of moving numbers around and manipulating paper and electronic representations of numbers on paper. None of that has an intrinsic value: and when it stops going up, people want their money out of it, only there's nothing valuable in there to begin with, and a "market correction" is inevitable.
There was a time when "sound investment" meant creating consumable goods. Now you can travel on trains through block after block of closed factories and dead production facilities. We get our goods from overseas, and pay for them through debt.
And we never catch wise.
There's another "You've been sent a greeting card" spam mail making the rounds. It seems to be prolific. In some cases, it may get through spam filters.
The message includes a link to click on to get your card. Clicking on the link will result in an attempt to download a virus on your computer.
If your anti-virus is current, it should block the viral install attempt. But "Safe Computing Practices" are that you should be very wary about clicking on links in emails. And greeting cards emails are a common malware-distribution technique.
My recommendation is to just delete greeting cards messages.
Regards, Rick Hellewell
For what it's worth, I just delete all those as well, even though I am pretty sure some of them actually come from people who mean well. But they scare me.
Niven and I will be on xfire in about half an hour. It's some kind of on-line conference.
August 16, 2007
The private sector space program is alive and well and mostly centered in Mojave. XCOR needs an aerodynamicist; see mail.
Niven and I did the XFIRE on line interview yesterday, then I spent the rest of the day working on Inferno II. We're getting there. We have added 8,000 words since we turned in the first draft in June, and there are many new scenes.
The financial industry crisis grows. The interesting thing about this is how much of the bubble is caused by government, and how little most of us know about how that works: does anyone even know the formal name of "Fannie Mae"? Or of "Freddie Mac?" Yet the existence of those government created institutions is a major factor in determining the price (I won't say value) of domestic real estate in the United States; they have injected enormous sums into the housing market, and allowed housing paper to be used as collateral to borrow more money which is again injected into the market.
Naturally if there's more money chasing certain goods, the price of those goods will go up. If there's a LOT more money chasing those goods, a bubble is created. Fannie Mae and Freddie Mac were created to make it easier for Americans to own their own homes. The result has been that a house that cost $30,000 in 1968 can be sold for $1,200,000 in 2007.
That's an increase of a factor of 40 in 40 years. In 1968 a salary of $21,000 a year with a down payment of $3,000 was sufficient to buy the house. Today a down payment of $3,000 and an "unverified" income -- that is, about anything you claim to make -- is sufficient to get a mortgage company to "buy" the house and allow you to live in it. Of course incomes have not gone up by a factor of 40 in 40 years. Not many in Studio City make $800,000 in the best year of their lives.
Some mortgage deals were made for tiny down payments and interest-only payments on the loans. These were variable interest loans, meaning that if interest rates went up, the payments would go up; and since some couples, with both partners working, could just barely cover the original payments, a rise in payment coupled with any kind of financial blow was ruin. I say all this from personal observation in my own neighborhood.
So long as the bubble lasted, it still worked: they were "building equity", in that what they could sell the house for went up, so if they had to bail out, they could walk away with a small profit or at least without debts even after real estate brokerage fees and taxes and other non-trivial costs of buying and selling houses. Those were the days when buying a "fixer upper" and investing a lot of time and energy into making it more salable could return handsome profits, and some industrious people got quite wealthy at this. A few made even more money by writing books and holding classes on how they did it.
And a few used their "equity" as collateral to borrow more money to invest in the dot com bubble, or in more real estate commercial or domestic, or even just to have a good time. Again I say this from personal observation.
But when the bubble halts -- it doesn't even have to burst -- there's a problem. Once the housing prices no longer inflate, there's no more equity from just holding the property. The only way to build equity would be to pay off the loan, and many couldn't afford to do that. Indeed, they couldn't really afford to make the interest only payments. And when the housing prices begin to fall, the real troubles begin. And here we are.
I recall back in the days of Jimmy Carter when inflation was in double digits, and Poul Anderson and I amused ourselves thinking of how, Komt der Tag, we would track down our creditors and ruthlessly pay them off with inflated paper dollars. That was for amusement. Mr. Heinlein used to tell us that writers are professional gamblers and must never forget that. In good times, pay off your mortgage, pay off your car loan; own the essentials of your life free and clear, because while writers get to work inside and sitting down and with no heavy lifting, there will come hard times.
Fortunately, story tellers usually do well in hard times. People want to be entertained. Escapist fiction about men who fly and the clash of empires will usually sell. Maybe not for as much as during good times, but people will pay for entertainment.
We can hope that the bubbles won't burst, and we can come down off this 40 year real estate bubble without too much damage to our productive people. We'll see.
The government meant well. It wanted people to be able to own their own homes. For a while FHA and VA and other loan guarantees did that and did it well. But injecting too much money into a market will always drive up prices. And creative people will always find ways to work the system in ways it was never designed to do. The intention of the government was to make it easy for working class people to own homes. But when I can take mortgage papers for a house that sold for $70,00 and borrow $90,000 on that paper; then loan that money to someone to buy a house for $90,000; and then borrow on that -- etc. The resulting 40-fold increase in prices was the result of clever people finding ways around the regulations. And so it goes.
"The pair say they have conducted an experiment in which microwave photons - energetic packets of light - traveled "instantaneously" between a pair of prisms that had been moved up to 3ft apart."
"The scientists were investigating a phenomenon called quantum tunneling, which allows sub-atomic particles to break apparently unbreakable laws."
If true, this changes everything.
I am always skeptical of anything that claims that about half of physics is just dead wrong. It's why I never get excited about yet one more Dean Drive or other gadget that "converts rotary to linear acceleration" or otherwise manages to be "lifter" or "reactionless drive." I'm always willing to look at a repeatable experimental result, but I don't care much about theories. If you can accelerate without reaction, show us; don't worry about someone stealing it, or about not getting noticed. If you can do it, even a few micro-gravities, you'll get your Nobel Prize.
Faster than light is even less probable for good reasons. On the other hand, I don't understand quantum effects and once when I said that, Dick Feynman replied "It's all right, Jerry. I don't either." When someone reports an experimental result, I can at least listen, and maybe get a little excited, or at least hopeful.
Peter Glaskowsky sent this:
Subject: c unbroken
This piece, while not persuasive in itself, links to some pretty good analyses:
To which we can only say, ah, well.
I am still waiting for someone to send information faster than the speed of light. It ought to be easy to establish that you can do that, if you can.
There has been considerable response to the XCOR requirement to hire an aerodynamicist who wants to help the private space program and possibly go space. Aleta wants to emphasize that age is no barrier: they're more than willing to hire a grey-haired enthusiast with experience and competence.
I put this in View rather than Mail because it's a matter of importance. Note that we now know that the 1930's were the hottest decade of the 20th Century; so the threats against people who are accused of being "Global Warming Deniers" has redoubled.
When the Administration attempted to make Hansen of NASA stop pushing his extreme predictions (rolling dice on a Congressional hearing table as an example) as if they were real science, he screamed that he was being silenced, and wanted help from the public. I don't see him out there defending the rights of those who don't agree with him, and I have yet to see him comment on the readjustment of the temperature history data.
You can prove anything if you make up your data, or your model connects only to selected data. Another of Pournelle's Laws. I should name it.
Dr. Pournelle-- Walter Williams' recent column on Global Warming may be of interest. He is a professor of economics at Mason University. That's all I know of him, except that when I do see his column, it's usually interesting.
The most important service rendered by the press is that of educating people to approach printed matter with distrust. –Samuel Butler
And do see
I have asked several modeling experts if any of these data are likely to be incorporated in the climate models. No one knows how it could be: that sort of thing isn't usually modeled.
Yet without data on ocean temperatures (80% of the Earth's surface is water) how will we even know what the annual temperature of the Earth is or has been?
|This week:||Saturday, August
Of course, once you learn about Minsky (This is not our Marvin Minsky, but a formerly rather obscure professor of economics) and his theory you will wonder why in the world anyone ever doubted his analysis. Minsky basically said that if you have enough easy credit and speculative buying on margin and borrowed money, there will come a hesitation in the rising market; when that happens, the unsecured speculators will be shaken out; but if the bubble is large enough, then even the reasonably prudent speculators with sound backing to their ventures will be forced to sell assets to keep their positions; and when that happens, prices will fall below values, and panic can and often will begin. (Note that this is my rather free wheeling summary of what Minsky said; he was a great deal more careful than me, and had more quantitative evidence.)
My take is that this is about what anyone who hasn't gone bald on the inside of his head from listening to economists and studying complicated "models" of an economy would know from watching just how people behave.
We have seen that happen. Next to go will be those who haven't sufficient reserves to meet reverses: mutual funds are at an all time low on cash reserves. Some, like hedge funds, borrowed to take advantage of rising returns.
And the papers are full of the astonishing news that no one really knows who has bought up how much of the housing bubble debt. It's all distributed all over the place, no one was watching and no one really cared who was buying since the commissions were so wonderful -- and once you had sold the debt you had money to loan out again! And again! We do not know just who will be forced to the wall when the crunch comes. And who is depending on incomes from those debt holders for their pensions and insurance payouts.
The Minsky Moment comes when even the hedged buyers find themselves in a cash crunch. It's not obvious this has happened, and the Fed will step in to try to stop things getting to that point; but managing to deflate a bubble while there are still plenty of greedy people hoping to expand the bubble and make a bit more while the getting's good is a very tricky business indeed.
There is mail on a variety of matters, some important.
|This week:||Sunday, August
.We had a power failure from 0940 until about 1700. We'll catch up tomorrow.
We have many letters explaining that the Tennessee River nuclear plant slowdown came because the outfall water would raise the river temperature above 90 F, thus endangering fish and other critters in the river. The river water is not used for reactor core cooling to begin with, and there was never any danger to the power plant; the entire "danger" is to river inhabitants. Thanks to all.
This is a day book. It's not all that well edited. I try to keep this up daily, but sometimes I can't. I'll keep trying. See also the weekly COMPUTING AT CHAOS MANOR column, 8,000 - 12,000 words, depending. (Older columns here.) For more on what this page is about, please go to the VIEW PAGE. If you have never read the explanatory material on that page, please do so. If you got here through a link that didn't take you to the front page of this site, click here for a better explanation of what we're trying to do here. This site is run on the "public radio" model; see below.
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