outsourcethinking

Losing the War – by Lee Sandlin

Lengthy and somewhat aged (1997) article about WW2. This part caught my eye:

The plan set the true clock time of the war. No matter what the surface play of battle was in Africa or the South Seas, the underlying dynamic never changed: every hour, every day the Allies were preparing for the invasion of Europe. They were stockpiling thousands of landing craft, tens of thousands of tanks, millions upon millions of rifles and mortars and howitzers, oceans of bullets and bombs and artillery shells — the united power of the American and Russian economies was slowly building up a military force large enough to overrun a continent. The sheer bulk of the armaments involved would have been unimaginable a few years earlier. One number may suggest the scale. Before the war began the entire German Luftwaffe consisted of 4,000 planes; by the time of the Normandy invasion American factories were turning out 4,000 new planes every two weeks.

[via Losing the War - by Lee Sandlin]

Wars test the limits of our capabilities. By refocusing in response to an imminent threat, production of aircraft soared. If we could do this in the 1940’s, I feel much more comfortable about our ability to respond to climate change. Unfortunately, we probably have to wait until the threat is much more imminent.

in vino veritas

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I always thought they came out of your nose

The essence of economic recovery

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Méditations

Or does the bubble reputation distract you? Keep before your eyes the swift onset of oblivion, and the abysses of eternity before us and behind; mark how hollow are the echoes of applause, how fickle and undiscerning the judgments of professed admirers, and how puny the arena of human fame. For the entire earth is but a point, and the place of our own habitation but a minute corner in it; and how many are therein who will praise you, and what sort of men are they?

-Marcus Aurelius, Méditations

Swine Flu map mashup

Google Map Mashup of the latest incidences and news on the spread of the Swine Flu (H1N1).

I wonder how long it will be before someone connects this to Google’s Latitude service. That way you could know whether you are close to someone who is infected, as well as which route to take to avoid them.

America has forgotten how to riot.

Man is tasered at concert for refusing to put his clothes back on. Judging by other videos of police brutality, the police here appear to be doing their best to defuse the situation with no forcible arrest before things turn nasty. I don’t know if he had been told he would be arrested subsequently. At any rate, he doesn’t cooperate. What the police should have realized is that when there are chants from the crowd rallying an individual on, it is difficult to get them to reverse course.

Halfway through the video, one of the police officers has enough of the rather comical attempts to forcibly clothe the man and readies his taser. His colleague waves him off, suggesting that at least one of them knew that would not be the right response. However after another scuffle, the officer uses it anyway. First once, and then repeatedly on different parts of the man’s body.

Naked Wizard Tased By Reality from Tracy Anderson on Vimeo.

What bothers me more than the police brutality is that the three police officers are surrounded by a sizable crowd of adolescents. Apart from collective groaning and swearing, they are restrained by nothing more than a few gruff commands (e.g. “Stand back”), as the taser is applied again and again right before their eyes. By this point, it is clear to all that the individual is a victim of ongoing police brutality. Where are those who initially cheered the man’s nudity and defiance? Why do they not act? The police don’t seem the slightest bit worried that the crowd will interfere in any way. You’d be hard pressed to find any police officer in the EU who would be bold enough to arrest someone in the middle of a crowd of adolescents, let alone brutality attack them with tasers.

Am I suggesting charging and attacking the officers? No. The real power of the crowd lies in its ability to immobilize. If everyone had raised their arms and chanted something peaceful like “this is not a riot” in a tighter and tighter circle, they would have quickly closed the available space for the police to do anything but try to escape. Of course, there is the risk that if they had fought their way out (e.g tasers, batons, guns) some people would have been injured, but I doubt that even an American police officer has the stomach to start attacking random people in a crowd.

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.-Thomas Jefferson

The Real Pirate Bay

Excellent point:

The Pirate Bay guys were criminally prosecuted for….violating (largely obsolete) copyright. Almost no one in finance has been held even civilly liable for vastly more economically damaging actions.

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Collateral Damage

With these sorts of people leaving, AIG is going to have a tough time building a team that will be able to repay their loans. I particularly like the analogy to a plumber who fixes the pipes but the electrician burns down the house- the plumber still needs to be paid.

[ Op-Ed Contributor - Dear A.I.G., I Quit! - NYTimes.com ]

Geeks, venereal disease and mindboggling screw-ups

Entertaining highlights from Warren Buffet’s 2008 letter to Berkshire Hathaway shareholders. The letter is worth browsing through in its entirety.

Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the symbols. Our advice: Beware of geeks bearing formulas.

Improved “transparency” – a favorite remedy of politicians, commentators and financial regulators for averting future train wrecks – won’t cure the problems that derivatives pose. I know of no reporting mechanism that would come close to describing and measuring the risks in a huge and complex portfolio of derivatives. Auditors can’t audit these contracts, and regulators can’t regulate them. When I read the pages of “disclosure” in 10-Ks of companies that are entangled with these instruments, all I end up knowing is that I don’t know what is going on in their portfolios (and then I reach for some aspirin).

Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It’s not just whom you sleep with, but also whom they are sleeping with.

Sleeping around, to continue our metaphor, can actually be useful for large derivatives dealers because it assures them government aid if trouble hits. In other words, only companies having problems that can infect the entire neighborhood – I won’t mention names – are certain to become a concern of the state (an outcome, I’m sad to say, that is proper). From this irritating reality comes The First Law of Corporate Survival for ambitious CEOs who pile on leverage and run large and unfathomable derivatives books: Modest incompetence simply won’t do; it’s mindboggling screw-ups that are required.

[Letters 1977- 2008]