Cardboard Spaceship

Least Generous Horoscope in History...

The perenially funny Daily Mash has just published a horoscope from Psychic Bob that almost beats their classic from Xmas. 

"Leo (23 JUL-22 AUG)
Sit down with your partner and ask them 'how is your life with me?' and 'how can I improve?'. Make sure you've got a comfortable spot and have already familiarised yourself with the terms 'emotional cripple' and 'sexually ungenerous premature ejaculater'."

For as much credence as I give these things (zero) it's still a low blow. 

One of my favourite cartoons from the now defunct Punch magazine had a man watching the news, with the line:

"Astrology received a major boost today as everyone born under the sign of Cancer was knocked down and killed by a runaway egg lorry"

Euro as a Roach Motel...

Barry Eichengreen of Berkeley writes on Vox about the possibilities of leaving the Euro for countries like Greece.  I came across this via Paul Krugmann, the Nobel Prize guy, discussing the possibility of Greece taking a Eurozone holiday as raised by Harvard's Martin Feldstein in the FT.  (Not much doubt what economists are chatting about over the last few days.

Now, I have only a shaky grasp of academic economics, as a reading of this blog will not doubt confirm, but I do know a lot about software systems, and I have been through the Euro introduction with SAP.  When Eichengreen talks about the reasons why a Euro departure would not be possible, he is bang on the money.

"The insurmountable obstacle to exit is neither economic nor political, then, but procedural. Reintroducing the national currency would require essentially all contracts – including those governing wages, bank deposits, bonds, mortgages, taxes, and most everything else – to be redenominated in the domestic currency. The legislature could pass a law requiring banks, firms, households and governments to redenominate their contracts in this manner. But in a democracy this decision would have to be preceded by very extensive discussion.

And for it to be executed smoothly, it would have to be accompanied by detailed planning. Computers will have to be reprogrammed. Vending machines will have to be modified. Payment machines will have to be serviced to prevent motorists from being trapped in subterranean parking garages. Notes and coins will have to be positioned around the country. One need only recall the extensive planning that preceded the introduction of the physical euro."

One of the reasons that SAP grew so effectively over the period of the nineties was the Y2K threat, if you remember that one, and the Euro changeover.  1999 for the virtual currency, 2000 for the bug, 2002 for the physical notes.  Damn near killed all of us with the workload.  The whole IT business was trembling like a shitting dog with fear over that, and that was in benign economic conditions.  Now imagine doing the same in a period of economic dislocation?   My first one thought was, what would you offer to pay the implementation staff in?  The currency you are giving up which might retain value, or your new one, which won't?  

No, the Euro is real roach motel, you check in but you can't leave alive. 

There Goes the Spaceship...

Highly worrying news here in the Spaceship, as it turns out that according to the New Scientist, my travelling at warp speed is not good for the health.   Basically, bashing into hydrogen atoms at the speed of light is like an ultra high dose radiation beam.  Even cardboard will not stop it, I suppose, nor my tin foil hat. 

"The fatal dose of radiation for a human is 6 sieverts. Edelstein's calculations show that the crew would receive a radiation dose of more than 10,000 sieverts within a second. Intense radiation would also weaken the structure of the spacecraft and damage its electronic instruments.

Edelstein speculates this might be one reason why extraterrestrial civilisations haven't paid us a visit. Even if ET has mastered building a rocket that can travel at the speed of light, he may be lying dead inside a weakened craft whose navigation systems have short-circuited."

Poor old ET.

"Events, Dear Boy, Events..."

The title of this post comes from Harold Macmillan, once a prime minister of the UK, who was asked by journalist what was most likely to bring down a government.  To which that was his reply.

Yesterday I speculated that the plight of Greece would be resolved, if at all, by either eradication of national sovereignty, or a complete default on the debts, as an alternative to social unrest and collapse.  (All marvelous options, of course.)

God's Teeth, things are going fast.  the EU has already moved to limit Greece's voting rights, with a symbolic withdrawal of voting rights in one meeting, but with some hard core sentiment behind it.  

"We certainly won't let them off the hook," said Austria's finance minister, Josef Proll, echoing views shared by colleagues in Northern Europe. Some German officials have called for Greece to be denied a vote in all EU matters until it emerges from "receivership".

Now, let's see, Germany running Greece according to the Teutonic economic model, and imposing swingeing cuts on public sector jobs, salaries, and raising the retirement age by six years to bring it into line with the German norms. 

What could possibly go wrong?

Quick... Something Funny.

Messiah of your choice on a bicycle, I just read my last post again. 

Have a quick look at this.  Breathe deeply.  Okay.  Okay. 

My wife, Mrs Spaceship, has started asking me not to talk like this to our medical friends, as they are getting really stressed out by my views on the world.   Talk to the bankers, and it's a done deal, only thing they want to talk about is how to leverage the chaos, and where to stash the Gold Bullion, supposing they can find any. 

Greece - Bail or Not to Bail?

Otmar Issing, former member of the ECB (European Central Bank) board, and president of the Institute for Financial Studies, which is perilously close to the Daily Mash's "Institute for Studies" is in an uncompromising mood on the subject of Greece getting a bailout from the ECB, et al.

"It is certainly true that this is a decisive moment for Emu – but for the opposite reason. Greece will continue to receive support from several European Union funds. But financial aid from other EU countries or institutions that amounted, directly or indirectly, to a bail-out would violate EU treaties and undermine the foundations of Emu. Such principles do not allow for compromise. Once Greece was helped, the dam would be broken. A bail-out for the country that broke the rules would make it impossible to deny aid to others.

It seems that quite a number of observers have forgotten what Emu is, and what it is not. The monetary union is based on two pillars. One is the stability of the euro, guaranteed by an independent central bank with a clear mandate to maintain price stability. The other is fiscal solidity, which has to be delivered by individual member states. Member countries are still sovereign. Emu does not represent a state; it is an institutional arrangement unique in history.  (Maybe there's a reason for that, like it's a real bad idea? - Hamish)

In the 1990s, many economists – I was among them – warned that starting monetary union without having established a political union was putting the cart before the horse. Now the question is whether monetary union can survive without such a political union. The current crisis must be handled in such a way as to produce a positive answer. The viability of the whole framework – nothing less – is at stake."

Well, I would say that there is a stark choice:  take over Greece at gunpoint effectively, and run it economically in a way that, to say the least, it has not chosen to run itself, or give them loads of dosh from the Germans, who will fight it all the way, and probably win, because that's what the law actually says.  Which means that what will actually happen is nothing, and so Greece will default, the Euro will go down the toilet, and the knock on effect of this lot will take down the exposed countries, in this this case France, Germany, and...  bugger... Switzerland. 

Comment from the Wall Street Journal worth a read, for this sentence alone:

"No wonder European leaders felt unable to leave Greece to the mercy of the markets. But in offering support, they are merely following a familiar pattern established during the crisis of shifting responsibility for funding the global debt pile from credit markets to the banks, from banks to sovereigns and now from weak sovereigns to stronger ones. Once this transfer is complete, the debt pile really will have nowhere else to go."

Really, it's a multinational version of Gresham's Law, with bad money driving out, or at least absorbing, the good money.   In case you are feeling all tin-foil-hatty at this point, you might like to start examining the serial numbers on your Euros, because in theory they all come from the different countries.  (not that legally it makes a blind bit of difference, as money is fungible.)

Enjoy the show, as I always say, you've paid a lot for the ticket.

BAFFLING PIGS and the DUKS

No, I haven't got a sudden dose of ALL CAPS SHOUTING DISEASE, but rather the Baflling Pigs and the Duks is an acronym I came across while reading about Greece and the Euro issues.  And ALLCAPS is the correct usage for acronyms, like USA and SNAFU or FUBAR. 

Euro Members in the European Union

Belgium, Austria, France, Finland, Luxembourg, Italy, Netherlands, Germany, followed by Portugal, Ireland, Greece and Spain. = Baffling Pigs.

Euro Non-Members in the European Union

Denmark, United Kingdom, and Sweden. = Duks.

Made me laugh, or at least as loud as I could reading the news around it.  I thought that the sovereign debt crisis would take months to build, but it seems to have happened all in a rush. 

Niall Ferguson, the Harvard history professor, has this to say in the FT about the situation in the States. 

"Although the US household savings rate has risen since the Great Recession began, it has not risen enough to absorb a trillion dollars of net Treasury issuance a year. Only two things have thus far stood between the US and higher bond yields: purchases of Treasuries (and mortgage-backed securities, which many sellers essentially swapped for Treasuries) by the Federal Reserve and reserve accumulation by the Chinese monetary authorities.

But now the Fed is phasing out such purchases and is expected to wind up quantitative easing. Meanwhile, the Chinese have sharply reduced their purchases of Treasuries from around 47 per cent of new issuance in 2006 to 20 per cent in 2008 to an estimated 5 per cent last year. Small wonder Morgan Stanley assumes that 10-year yields will rise from around 3.5 per cent to 5.5 per cent this year. On a gross federal debt fast approaching $15,000bn, that implies up to $300bn of extra interest payments – and you get up there pretty quickly with the average maturity of the debt now below 50 months.

The Obama Adminstration's new budget blithely assumes real GDP growth of 3.6 per cent over the next five years, with inflation averaging 1.4 per cent. But with rising real rates, growth might well be lower. Under those circumstances, interest payments could soar as a share of federal revenue – from a tenth to a fifth to a quarter."

Holy crap, enjoy the show, you're going to pay a lot for the ticket.

Diplomat Apparently Unsuitable due to Unfortunate Name...

The otherwise blameless Akbar Zib of the Pakistani diplomatic corps has been refused a post in Saudi Arabia, because his name translates in Arabic to "Mightiest Knob" or somesuch.  I can see why that would be difficult. 

I have come across this kind of problem before, as I was introduced to an otherwise unremarkable Dutchman, who had a very haunted look around his eyes as he was introduced to me as...  Ruud Kok. 

Fortunately, I am now experienced enough in this kind of thing to not flinch, even slightly, which changed the expression on his face completely, and we had a civil conversation about some bloody SAP thing or another.  

Still, given that my name translates into German, Hamish Newlands becoming Hamisch Neulands, meaning evil or spiteful new territories, and that's me working for a German company too.   Tell you what though, with the exception of the additional "c" which doesn't bother me, I have never, ever had to spell my name in Germany.  Try that in America.

"You're Amish?  Okay buddy, whatever, but I asked you for your name, not your religion.  And you're in trouble, I saw you getting out of a car..."

More about non-Darwinian Evolution - Viruses.

A few days ago I wrote about the startling conclusions about horizontal versus vertical genetics, and the implications that this might have for our understanding of the kinds of evolution, and genetic information flow that might be possible.  In that article, the main mechanism was the shuffling of bacterial DNA across boundaries, but there is another excellent article on the subject at New Scientist, this time talking about the viral DNA load in the genome.

"When, in 2001, the human genome was sequenced for the first time, we were confronted by several surprises. One was the sheer lack of genes: where we had anticipated perhaps 100,000 there were actually as few as 20,000. A bigger surprise came from analysis of the genetic sequences, which revealed that these genes made up a mere 1.5 per cent of the genome. This is dwarfed by DNA deriving from viruses, which amounts to roughly 9 per cent.

On top of that, huge chunks of the genome are made up of mysterious virus-like entities called retrotransposons, pieces of selfish DNA that appear to serve no function other than to make copies of themselves. These account for no less than 34 per cent of our genome.

All in all, the virus-like components of the human genome amount to almost half of our DNA. This would once have been dismissed as mere "junk DNA", but we now know that some of it plays a critical role in our biology. As to the origins and function of the rest, we simply do not know.

The human genome therefore presents us with a paradox. How does this viral DNA come to be there? What role has it played in our evolution, and what is it doing to our physiology? To answer these questions we need to deconstruct the origins of the human genome - a story more fantastic than anything we previously imagined, with viruses playing a bigger part than you might care to believe."

Now, that is interesting, and makes the whole evolutionary picture a lot more complex than I was taught twenty years ago.  (My degree is in Genetics.)  Wonderful stuff, and it really makes you think about the systems complexity in nature.

No More Man on the Moon for the USA

Well, the face of the biggest budget deficit going into 2011 since the war, it is not surprising in the slightest that America has to make budget cuts. 

Pity for the science nerds and space nuts amongst us is that one of them is the manned space budget.   Well, the approach was rather flawed, and the scientific advantage of putting more footprints on the moon was always debatable, but it is one less source of wonder in the world.