Skepticism on The Infinite Unknown

Scary Charts

Jared Watkins — Mon, 03 Jun 2013 00:00:00 +0000

I don’t often write about stocks or the economy.. it’s just too difficult to know anything with any certainty anymore. We’ve been kicking this can down the road far longer than I thought would be possible at this point but a quick look around the world and you are seeing the wheels start to come off. Here are a few scary charts that when combined with the news coming out of Europe and Japan spell trouble.

The M2 money supply… if you don’t know what this is wikipedia has a writeup on it.

The velocity of money.

The real unemployment rate… not that number GovCo reports every month.

And as for the market… I don’t trust it one bit. It’s not real… it’s a fabrication and fully owned enterprise of helicopter Ben Bernanke. This isn’t just me… here’s the smart vs dumb money chart. The smart money is getting out while the ‘retail investor’ is piling in.

More evidence of the same… the number of people playing the market with borrowed money is peaking again.

Ideas to Live By #4 No One is Really in Charge

Jared Watkins — Sat, 04 Aug 2012 00:00:00 +0000

A while back I wrote about 4 simple ideas to live by (rules isn’t the right word) and suggested that if you lived your life with these things in mind the world would seem much more predictable. I was reading the recent email newsletter from John Mauldin and came across this bit he borrowed from George Friedman. Here he’s talking about the power of the presidency and broken campaign promises. Emphasis mine:

The power often ascribed to the U.S. presidency is overblown. But even so, people — including leaders — all over the world still take that power very seriously. They want to believe that someone is in control of what is happening. The thought that no one can control something as vast and complex as a country or the world is a frightening thought. Conspiracy theories offer this comfort, too, since they assume that while evil may govern the world, at least the world is governed. There is, of course, an alternative viewpoint, namely that while no one actually is in charge, the world is still predictable as long as you understand the impersonal forces guiding it. This is an uncomfortable and unacceptable notion to those who would make a difference in the world. For such people, the presidential race — like political disputes the world over — is of great significance.

I define being ‘In Charge’ as having the authority and the ability to successfully impose your will on those you are in charge of. That is.. if you have some idea for a great new thing.. you talk about it.. everyone agrees that it’s a great new thing.. but in the end it doesn’t get implemented or it does but it’s no longer what you had in mind.. are you really in charge? I’d say no. You may have the appearance of being in charge.. but if you can’t execute your grand ideas then you are little more than a figurehead. We don’t elect anyone to the position of “Influencer in Chief” but that’s exactly what we have.

I think this is why politicians will often fall back on living at the whim of the polls. All they have to do is align their ‘grand ideas’ with the direction of the prevailing winds of opinion and they can appear to be more in control than they actually are… or can be. Of course.. most grand plans never turn out the way they are supposed to.. and opinions can change on a whim.. so this is a politically dangerous way to live. That gets back to my number one idea to live by.

Here they are again:

People are stupid
There are no authorities
No one knows what’s going on
No one is really in charge

So when I see the stunning pace of the changes in our national priorities over the last 3.5 years… I do NOT ascribe all this to being the whims of the sitting president. The scary truth is that his views are only aligned with the shared views of those running the bureaucracy that is the federal government. His presence was only the catalyst for putting those changes into practice… a justification for changes that, not long ago, would have been seen as impossible.

Unraveling the Duct Tape

Jared Watkins — Sat, 21 Jan 2012 00:00:00 +0000

I’ve written before about the world being held together by duct tape… and it seems there are more people lately who have decided to rip off the covers and go looking for some duct tape. The latest headline comes from the world of SCADA systems.

Researchers Lay Bare Woeful SCADA Security. SCADA systems are small embedded computers that help guide various kinds of industrial processes..manufacturing, power plants and water systems. Basically anything where you have sensors, motors, pumps etc that have to be monitored and controlled. Iran learned all about lax SCADA security over the last couple years and now everyone else is finding out about it too. The dirty little secret is that most of these systems haven’t fundamentally changed in the last 20 years… despite huge improvements in the level of sophistication of what’s out there now even for hobbyists. Things like the Arduino platform costs an order of magnitude less than commercial systems and can perform many of the same jobs. Actually that’s not true though.. SCADA systems have changed in one very important way.. people started plugging them into a network. Once you do that.. you are opening yourself up for a world of hurt if those systems were not designed to operate in a hostile environment. As the researches in the linked story found out.. some of them can’t even be probed without crashing.. never mind standing up to direct attacks.

I was fortunate enough to take the SANS security course on Wireless Ethical Hacking, Penetration Testing, and Defenses a few years ago. While I totally recommend the SANS courses.. they are really top notch in the world of tech training.. one of the things I learned as a result of that course is that very few people/organizations take security seriously. Security should be thought of as existing on a continuum along with ease of use. That is.. something could be totally secure and totally unusable or very easy to use and totally insecure. SCADA systems have been operating at that end of the scale for decades now and I doubt very seriously that’s going to change anytime soon. If the customers who buy these systems cared at all about security they would demand the systems actually be more secure. That doesn’t happen though.. and I blame human nature.

Incidentally… you may think your world isn’t personally touched by these systems but you would be wrong. In fact.. in some areas you may already have a vulnerable SCADA component bolted right on your own home. Heard of the SmartGrid? The very same researcher who taught my wireless hacking class has found some serious issues with the power meters used in smart grid systems. Imagine a worm that could infect a network of power company smart meters.. giving control over the power they regulate to some 3rd party. At that point it would be trivial to crash the regional electrical grid on demand.. and we know from what happened accidentally in the north east a few years ago that can take days to recover from. Sleep tight!

Global Warming: Still More Scam Than Science

Jared Watkins — Wed, 02 Nov 2011 00:00:00 +0000

More news from the front… GLOBAL WARMING IS OVER, SAYS EXPERT

Before I get into this article… I want to rebut something else that’s been part of this story. It’s being reported that Dr Richard Muller is a long time AGW (anthropomorphic global warming) skeptic and so the fact that he appears to have done a 180 adds to the drama of the story. In fact this is not true at all.. he never was a skeptic.

In an interview about his book back in 08 he was asked what the next president needed to know about GW and he said:

The bottom line is that there is a consensus the and the president needs to know what the IPCC says. Second, they say that most of the warming of the last 50 years is probably due to humans. You need to know that this is from carbon dioxide, and you need to understand which technologies can reduce this and which can’t. Roughly 1 degree Fahrenheit of global warming has taken place; we’re responsible for one quarter of it. If we cut back so we don’t cause any more, global warming will be delayed by three years and keep on going up. And now the developing world is producing most of the carbon dioxide.

So.. this guy has been in the bag for AGW for years.. and the fact that the exact opposite is being reported far and wide today should cause your little internal red flags to go up.

Now for the relevant quotes from the new article.

Prof Muller, of Berkeley University in California, and Prof Curry, who chairs the Department Of Earth And Atmospheric Sciences at America’s Georgia Institute of Technology, were part of the BEST project that carried out analysis of more than 1.6 billion temperature recordings collected from more than 39,000 weather stations around the world. When Prof Curry heard that Prof Muller was saying that the Berkeley Earth Surface Temperature (BEST) findings would put an end to climate change scepticism for good she was horrified. “This isn’t the end of scepticism,” she exclaimed.In a serious clash of scientific experts Prof Curry has accused Prof Muller of trying to “hide the decline in rates of global warming”. She says that BEST’s research actually shows that there has been no increase in world temperatures for 13 years. This issue is crucial because the levels of carbon dioxide in the air have continued to rise rapidly over the last decade and if temperatures have remained constant during that period it would suggest there is no direct link between carbon gas emissions and global warming. “Whatever it is that is going on here it doesn’t look like it’s being dominated by carbon dioxide,” says Prof Curry.

Indeed she says this global warming standstill since the end of the Nineties – which has been completely unexpected – has wide-reaching consequences for the causes of climate change and has already led many climate scientists to start looking at alternative factors that may have contributed to global warming, other than carbon gas emissions. In particular she has mentioned the influence of clouds, natural temperature cycles and solar radiation.

What she also seems furious about is the way that Prof Muller went about publishing BEST’s results without consulting her and before a proper peer review could be carried out.

DING DING DING… We have a winner here folks!

Don't be a Slave to Your Vendors

Jared Watkins — Tue, 12 Apr 2011 00:00:00 +0000

One of the reasons I like and support the use of open source software is that you can avoid most of the drama that comes from relying on 3rd party vendors. By this I mean.. you must pay exorbitant sums for ongoing maintenance, you are locked into their product upgrade treadmill, you have little say in the direction of their products, you have a single source for support, and if your vendor gets acquired there is a very good chance the product you depend on will go away or change in ways that force you to abandon it with even more pain. I’ve seen this play out from both sides of the table having spent time in both enterprise environments and working for software companies.

On the technology side I’ve seen how the constant demand for new features almost always overrides the need for bug fixes and a refined and well designed product. This stems mostly from sales and the need to constantly increase revenue (theirs not yours!). New versions with more features are required to drive new sales and force established customers to continue down the road of planned obsolescence. Customers must upgrade ‘end of life’ products because of the need to run a supported platform (for CIO CYA) as no one wants to be running an unsupported system that causes problems. Many times these upgrades require a ton of planning.. new hardware.. migration strategies.. and lots of meetings. To me all this effort seems less like progress and more like breaking windows in order to stay busy replacing them. None of that effort goes toward what should be the core function of IT inside an enterprise.

In my opinion… those resources should be spent building and customizing systems based on open source software whenever practical. Rather than spend your time and money propping up another companies bottom line.. spend them internally refining the tools that run your business until they become a strategic advantage. Build your teams.. invest in your people and develop subject matter experts to give IT a growth path within the company. By doing this you own the results and end up with an advantage that can’t be easily duplicated. Too often IT is viewed strictly as a cost center.. and that’s a real shame because with a little leadership it doesn’t have to be that way. Better to be a builder and own the building than pay rent forever and be forced to move every time the landlord needs more money. And if you are a C level executive.. stop basing your IT strategy on what you read in airline magazines or the latest buzzword-laden reports from Gartner and their ilk.

Radiation Fear Mongering

Jared Watkins — Sun, 20 Mar 2011 00:00:00 +0000

With all the fear mongering about radiation exposure in media lately I thought it would good to get a little clarity. I found this great chart that breaks down the normal levels of exposure we all get in everyday life and compares it with what’s going on in Japan.. and what happened with the other two major reactor incidents from history. So far.. it’s really not as bad as everyone in the media is making it out to be. I keep hearing about these ‘worst case’ scenarios that are less and less likely as time goes by.. but I guess that doesn’t sell papers nearly as well.

E85 (Ethanol) Sucks!

Jared Watkins — Sun, 26 Dec 2010 00:00:00 +0000

Two and half years ago I registered the e85sucks.com domain because it was clear to me at that point that the big push for more domestic ethanol production and use was a scam. Now finally the very same people who were pushing it back then have finally come clean that it was a bad idea. Now there have been plenty of people saying this stuff for years.. but it’s nice to know eventually the truth can be recognized.

So lets look at where we stand today. There are many lawsuits pending from various engine makers that even E10 (10% ethanol) is cutting the service life of engines in half. These lawsuits are coming from lawn care equipment manufacturers and others who make boats, airplanes and even cars. I hate to think how this is going to affect the classic cars I like so much. Will they still be on the road in another 20 years? Roughly 1/3 of our corn is currently diverted from food to fuel production which drives up the price of almost all food across the board. Remember general Wesley Clark? He was hired by the corn lobby a few years ago to push for mandated E15 use in our fuel. Apparently that has been money well spent as the EPA ruled in October that it’s ok to use E15 in cars made after 2007… so how old is your car? They are still testing.. but it’s likely we are going to see E15 showing up in pumps before you know it. If E10 requires 1/3 of our corn production.. what happens to food prices when E15 becomes mandated?

In case you didn’t know.. ethanol is corrosive to lots of components in your car. It will eat rubber seals and hoses, plastic fittings and even some metal alloys. That means that if your car isn’t outfitted for it.. you will be replacing engine and fuel system parts much more quickly. For instance.. there has been a rash of fuel pump failures going back several years now blamed on too-rich mixtures of ethanol in current fuel. Average replacement cost.. $1000 and that’s just one component.

The production of ethanol from corn never made sense economically, technically or environmentally and now that an industry has grown up around that lie it’s going to take a long time and a lot of resources to stop it. If I believed in conspiracies I might think they are pushing E15 to get all the ‘old’ cars off the road.. since it’s going to do so much damage to all the non flex-fuel vehicles out there. This could be viewed as an economic stimulus (by political idiots) for the accelerated purchase of new cars and all the required repair work from those suckers who try to keep their old car on the road. While they are at it they might as well start breaking some windows too.

Detroit Blows it Again

Jared Watkins — Mon, 11 Oct 2010 00:00:00 +0000

How GM “Lied” About The Electric Car

Wow… what were they thinking. In summary… it seems the claims that GM has been making for years about the design and performance of the Volt were just out and out lies. They claimed it was a serial hybrid.. meaning the gas engine was just acting as an electrical generator and that the electric motors drove the wheels. That’s a lie. They claimed it would get 230 mpg in city driving and have an initial electric range of 40 miles to cover the average commute. All lies. As people are finding out, this is nothing but an american built hybrid that’s not substantially different from what toyota has been building for over a decade. Actually that’s not totally right.. it is substantially different in one way and that’s the price.. it’s about 50% more expensive. <!-more–> Say what you will about the Chinese and their lack of respect for IP.. but when they want to copy something they just go out and do it. By comparison this ‘revolutionary’ car (that isn’t) has been in development for what.. 4.. 5 years at GM? Really guys… this is the best you can do… how pathetic. The only good thing that Might come out of this is using lithium based batteries rather than the nimh ones that the other companies are using. Of course.. since we don’t have confirmation on that yet either.. I’d hold off on buying more SQM. At this point I wouldn’t believe any claims they were making.

Now that I think of it.. remember that ad campaign that was around a few months ago where GM was bragging that they had paid back the bailout money? Yea.. that wasn’t true either and they finally copped to it last month. Moving money from one tax-payer pocket to another isn’t really the same as repaying the bailout.

So that’s two strikes against Government Motors now… two very public, very big, and very obvious lies. It’s nice to see the new management is demonstrating the same level of ethics, openness and competence as the rest of our federal government. Now I’m curious to see what will make it a trifecta. At this point it wouldn’t surprise me in the least if the new CEO Rick Wagoner held a press conference and announced that he was actually Xenu and had come to destroy the human race (and shareholder value) by selling us little econo-box deathtrap cars for over-inflated prices. That would at least make some little bit of sense for what’s been going on in that company lately.

The world is held together by duct tape

Jared Watkins — Fri, 24 Sep 2010 00:00:00 +0000

CIA used ‘illegal, inaccurate code to target kill drones’

Netezza illegally and hastily reverse-engineered IISi’s code (targeting software) to deliver a version that produced locations inaccurate by up to 13 metres. Despite knowing about the miscalculations, the CIA accepted the software, court submissions indicate.

I have a theory… or perhaps this should be another of those rules to live by.

The world is held together by duct tape. By that I mean things that one would expect to be well designed and engineered.. efficient.. safe.. proven etc often times aren’t and it’s only because no one knows about it that that the wheels keep turning as well as they do. Luckily this doesn’t apply to things like bridges or buildings.. at least here in the US where we have laws about such things. But there is a whole world of other ‘systems’ out there that, despite being a Rube-Goldberg collection of moving parts, are depended on by lots of people and companies in order to function.

I won’t give any names.. but I’ve seen and heard about such situations across a wide range of companies. Take for instance a particular ‘big 10′ bank that has a certain excel spreadsheet at the core of one of it’s biggest business units. This spreadsheet is old.. it only works on an obsolete version of excel and is so utterly complicated and hacked together that no one currently working there knows what it does or how it works exactly. Despite this.. they couldn’t operate without it.. and they spend tons of money on an endless string of consultants to modify it and add features as requirements change which further complicates the mess. It is also accepted by auditors who.. though they don’t know what it’s doing either.. accept its output at face value.

I’ve seen or heard of similar situations in phone companies.. power companies.. schools.. hospitals.. and lets not even talk about the military. I’ll go so far as to say this is the norm. This is way too common to be anything but an extension of human nature and I don’t think it’s necessarily a bad thing. I’ve seen plenty of people attempt to fight this. Project managers.. engineers.. auditors etc. Often times they are so over worked that.. while they get the big stuff.. there is still a ton of duct tape down at the level they can’t be bothered with. Everyone knows this.. and that’s just how it is. In time those bits are forgotten and people move on to the next project until the duct tape starts to unravel.. or someone notices.

Currently Reading:

‘Crisis Economics: A Crash Course in the Future of Finance’

Spend Spend Spend Spend Spend

Jared Watkins — Mon, 09 Aug 2010 00:00:00 +0000

For every 1 billion the federal government spends we (90 million who actually pay federal taxes) will get a bill for $11.11. That’s pretty easy math.. so for instance the additional 57 billion of new ‘stimulus’ last week cost us about $633 each. How much did you earn last week? If they were honest about what they were doing they would send out invoices to all taxpayers every month to cover the new ‘stimulus’. What makes it worse is that we are borrowing about 40% of every dollar the feds spend which we will also have to pay interest on. The bill for that interest is still TBD as congress shows no intention of paying down our debt any time soon.

For the big stimulus monster last year.. just the principal of 862 billion means that each of us suckers tax payers is getting a bill for about $9577.

Now lets see a show of hands… how many people think federal spending stimulates anything?