More motgage trouble

In this article, the author discusses the Alt-A mortgage resets, which are expected to peak in 2009-2010. Essentially the author argues another risk uptick is in the offing which will throw a bunch of currently healthy people in a mess, particularly in a worsening economy. Not sure how credible the data is.

If this is true, can this averted? Well, maybe. One difference between the Alt-A resets and the subprime mortgage resets is the ability of the borrowers to refinance. If the US government is able to get Fannie Mae and Freddie Mac to lower refinance rates and create sufficient liquidity, some of the impact of the reset may be offset. If, if, if ...

Ironical kill by great white

Will ironies never cease. First, the famous environmentalist and naturalist Steve 'crocodile hunter' Irvin was killed by a ray in 2006. Now Brian Guest, a naturalist who campaigned to rescue Great White sharks, was eaten by one while swimming only meters away from his son off the coast of Australia. The article gives a gruesome account of his death.

He reportedly wrote on the Western Angler website forum in 2004: "I have always had an understanding with my wife that if a shark or ocean accident caused my death then so be it, at least it was doing what I wanted. Every surfer, fisherman and diver has far more chance of being killed by bees, drunk drivers, teenage car thieves and lightning. Every death is a tragedy – regardless of the cause – but we have no greater claim to use of this earth than any of the other creatures [we] share it with."

It doesn't seem as if the Great Whites discern between their friends and enemies in picking their meals.

Fear of cliffs

If you expected an article about the white cliffs of Dover, you will be sorely disappointed. I am referring here to cliff events in the context of the economy.

In recent days there have been frantic efforts by many in the government egged on by many reputed economists including advocates of free markets to intervene in the market and prop up failing institutions. They have intervened, but seemingly to little effect. What's going on? Why is there such a panic?

Underlying the theory of free markets is an assumption that free markets, even when not perfectly efficient, are mean reverting. This is why advocates of non-intervention speak of "market correction". The idea is that while there can be a distortion in value for a time, ultimately everything will automatically revert to a true value. Of course, this view assumes the existence of such am invariant 'true value'.

There is, however, a more interesting set of theories that have been evolving that postulate that natural systems, including financial markets are chaotic. This means, that while they may occasionally appear to be mean reverting, there is no reason that they should revert to a mean. Instead, even small changes can have extremely magnified effects resulting in a different level in the long run. In such systems, small changes can have huge, often catastrophic effects. Examples of such chaotic changes are literally the straw that breaks the camel's back or the butterfly effect. In this view, there are times when a financial system like the economy can stand at a brink, where on one side, it seems unwell but curable, and on the other it faces complete ruin.

Let me illustrate with an example.

In the early part of this decade, as Enron devolved into a financial debacle, disclosures made to ratings agencies put the ratings agencies in a quandary. On the one hand, if they continued to maintain the same credit rating, then it was possible that in the interim time the company could find a way to pull itself out of the mess. On the other hand, if they reduced the rating, then it would automatically trigger a series of obligations that would hinder Enron's ability to borrow. The resulting mess would lead to further downgrades, and so on, quickly reducing Enron to junk bond status.

This was an example of a credit cliff. It's a situation where a small change in the conditions, i.e. Enron's credit rating, could push it over a cliff.

Two things to note.

• Firstly, the cliff was characterized by the value was driven belief that was ultimately self referential - i.e. it had value because people believed it had value. It was solvent as long as people believed that it was and would continue to be solvent.

• Secondly, the fiction was ultimately unsustainable.

How does this relate to the US economy? Well, you see, all those panicking economists are actually worried that the US economy is at such a cliff. The value of US companies, US markets, US debt and ultimately the US economy is ultimately dependent entirely on everyone's belief in the US economy and its ability to survive this crisis.

The problem is that the US economy as a whole is over-leveraged and over valued. The US need a HUGE amount of money to dig itself out. The only way for the US to get that money is that everyone continues to believe in the US.

With huge foreign holdings of US debt and US investments, if people suddenly started to doubt the US and started to disinvest, then the US economy could, in theory, collapse. The problem is that unlike the mean reverting view, in this view, the new equilibrium would leave the faith in the US economy so damaged that it would permanently destroy the US economy's value, and the US would never completely recover.

The Fed's experiment with Lehman caused a crash that has everyone spooked. They won't try it again. No other large US brand name can be allowed to fail. What the US government, Fed and all those illustrious economists are hoping is that if they can just hold on long enough, things will get better. They are banking on the assumption that it's in no one's interest to let the US fail. The alternative is a complete collapse of the US economy.

Are we really at such a cliff? Who knows? But you don't really want to find out by stepping off the ledge, do you?

However, note that all these interventions maintain a fiction. They keep you on the right side of the ledge. They don;t get you further away from the ledge. In fact, in some ways, they lift you up a bit, making the fall, if it comes, all the worse. So long as there is no catastrophic collapse of the economy, you could say these measures are working. But you are still at the edge.

To fix things, we still need to fix the underlying problem - asset price inflation. There are only two solutions. Either let the asset prices deflate. Or, let them stagnate until the value increases to the price. Neither is attractive. Both take time, maybe years. And, remember the second lesson from Enron is that ultimately the fiction can only maintained for so long. Let's hope the creditors of the US economy are more patient.

On the bailouts ...

Dhakks and I were having a discussion recently on the bailouts, and I was almost inspired to write a lengthy piece explaining my views. But then I came across this Calvin and Hobbes strip that does it so much better. Enjoy! (click on the strip to expand)

Should India receive a Dinosaur Tax?

I've often heard the idea toyed around that the world should perhaps pay Brazil an oxygen tax. No, the UN isn't seriously contemplating that.

But now, methinks, the world owes India a Dinosaur Tax. There's new evidence that suggests lava flows, and related sulfur emissions, in India led to the decline of dinosaurs.
It's a nascent investigation but you can read more about it here.

Fun stuff

With the economy tanking, consumer prices falling by the largest amount in 50 years, the Fed cutting rates to unheard of levels (apparently unaware of the complete failure of supply side economics over the last year), and Madoff adding to gloom and doom, I thought something more entertaining may be in order.

Dick Cavett recently got an earful for his amusing piece, "The Wild Wordsmith of Wasilla" where he explores gems such as: "My concern has been the atrocities there in Darfur and the relevance to me with that issue as we spoke about Africa and some of the countries there that were kind of the people succumbing to the dictators and the corruption of some collapsed governments on the continent, the relevance was Alaska’s investment in Darfur with some of our permanent fund dollars." It's stuff you can't make up.

His latest piece on Gov. Blagojevich is equally amusing, as he ponders, "The question overhanging this sordid mess, you might agree, is, “How did such a specimen ever get elected?”

It’s as if a soldier, tested for his fitness as potential combat leader, passed his physical despite scurvy, pyorrhea, Jake leg, leprosy, the quinsy, contagious influenza and at least two trick knees."

It's just what I was wondering.

And, if you missed it, President Bush provided his contribution with the famous shoe ducking incident, which just about summarises his presidency.

The $50BN fraud

This is the latest scandal to hit Wall Street. The facts are simple. Bernard Madoff, a hedge fund manager, has for years apparently run one of the biggest scams on wall street. He essentially took money from new investors and paid off older investors with it. The entire house of cards has collapsed with the fall in the world markets. The aggregate losses to investors, which includes some big names across the world, is estimated to be $50BN. He has been arrested, and is out on bail.

The puzzling part is that for years, investors, bankers, lawyers, IRS agents and auditors all scrutinized his books and concluded he was completely above board. The fact that this could continue for years (some estimate 10+ years) without alerting any regulators has investors shaken. The BBC is reporting that this has shaken foreign investors' confidence in the US regulatory system to an extent that could potentially have serious consequences for the US.

By the way, this is a classic Ponzi scheme. A Ponzi scheme is one where you delude people into thinking you are making them money by paying them off with money from incoming investors. You can keep this going so long as everyone trusts you.

The term "Ponzi scheme" refers to Charles Ponzi. Charles Ponzi was by no means the first to conceive of this. However, he did do it more extravagantly than most. In 1920, he was involved in a scheme to make money off arbitrage on postage stamps that promised to "double your money in 90 days". He realized soon enough though that he didn't actually need to buy the postage stamps and exchange them as he promised. He could do it on his books and everyone would go along with him. So, he kept paying off people with the money he collected from incoming investors. Ultimately, his scheme collapsed leading to his ruin, arrest and jail. He died in poverty in Brazil. Before he died, he is reputed to have told a reporter, "Even if they never got anything for it, it was cheap at that price. Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over."

India placed second at Miss World 2008

Ksenia Sukhinova has won Miss World 2008, while Parvathy Omanakuttan from India has come in second and Gabrielle Walcott from Trinidad & Tobago has come third.

Lessons from Japan

In 1990, Japan suffered a massive financial crisis. Their banks had been involved in profligate lending, resulting in a housing boom. Then after an all time high on December 29, the Nikkei crashed. Housing prices began to slide and Japanese banks were left holding billions in non performing assets. This caused a banking collapse that spread into a recession.

The Japanese response to the crisis was, at first denial, and then a reluctance to intervene. However, Japan also tried all the measures the US is contemplating, lowering interest rates, fiscal stimulus, tax cuts, etc. The result:

The chart above shows the result. The Nikkei 225 index has never again reached anywhere close to its peak in December 1989.

In this article, the authors argue that the real culprit was not the actions taken by the Japanese government, but the relative inaction, the changes were slow, and there was reluctance to make large enough bets (i.e. relatively tight fiscal policies) that have caused the subsequent gloom. This view is echoed by the consensus opinion of economists as illustrated here. And, in this article, the current actions taken by the US government are compared to actions by the Swedish government (only much more accelerated), and the Swedes did get their act together.

Having said all this though, the lesson that Japan holds for us is that while there are a plethora of opinions on what the right thing to do is, if mismanaged we could see a very long and hard route to recovery.

Economic collapse?

This article in the Atlantic suggests that the Obama team is worried about the real possibility of double digit unemployment and the potential collapse of large but unstable foreign economies (Pakistan?). Doesn't sound good. Hopefully, they'll think of a solution.

Corruption in the windy city

Blagojevich, the Illinois Governor, has been caught attempting to make money by selling such mundane things as the Obama's Senate seat to the highest bidder. The press has led the charge as judge, jury and executioner, with good reason, given the extraordinary tapes of phone conversations. In one of these conversations he brazenly declares, "[the Senate seat] is a (expletive) valuable thing, you just don't give it away for nothing." Ah, Lincoln would be proud.

The expletive laced conversations was enacted on the Rachel Maddow Show to the amusement of viewers:



This is a very interesting piece that outlines Obama's many associations with the said Governor. As the article points out, it would be hard for a politician from the state legislature in Illinois not to have had many an association with the murkier side. Obama is no exception having had extensive dealings with both Blagojevich and Rezko, and he certainly has friends in high and corrupt places. In a state where three of its last eight Governors spent time in prison (Blagojevich would make the fourth), it would have been nigh impossible for a rising star like Obama to have avoided them. As Blagojevich's highly expletive laced opinion of Obama in this piece illustrates, Obama was not playing ball on Blagojevich's demands for money for favors. But, while Obama's reputation may remain unscathed in the eyes of his many supporters, the GOP, conservatives and Fox News have already gleefully declared him guilty by suspicion. Read the conservative bloggers and you'd think Obama committed the crime himself. In fact, the irony of it may be that Obama himself may have expedited Blagojevich's downfall by championing a revised ethics bill, which forced Blagojevich to attempt to speed up his takings before the bill took effect. Also, while Rahm Emmanuel's aides deny it, the chatter on the blogosphere is that he or someone on Obama's staff may have tipped of the Feds.

Apart from the obviously criminal behavior, Blagojevich's seems to have been astonishingly stupid in not following his own admonishments of caution (there are extensive pieces where he advises the parties on the phone with him to always assume someone is listening). As with so many other corrupt politicians before him, lulled by previous successes, he seems to have indulged in increasingly risky behavior, a.k.a. Elliot Spitzer in many ways.

Still, in some ways, as a rick38 on this blog points out, the press seems to forget that people are innocent until proven guilty. As rick38 says, "Much talk is made about Blagojevich “scheming” to sell a senate seat, but scheming alone isn’t enough to convict anyone. He has to be caught trying to make a deal before they can even think of indicting him. But since he was exposed before he had a chance to carry out his scheme, his plans have become thwarted, and he may now get off scot free.

If they (Fitzgerald and the Tribune) had held off until Blagojevich had shaken hands with someone, they would have had enough to force him to resign, allowing the Lieutenant Governor to step in and select a successor to Obama in accordance with the Illinois Constitution. They would also be able to pursue the case to its completion and get more goods on more people inevitably involved. ..."

Having not seen the evidence in the case, I can't say how prescient Rick38 is.

Palinisms

I recently came across a quote from Sarah Palin where she strings together seemingly sagacious phrases and multi syllabic words to produce sentences that defy explanation. I began to ponder whether, with Bush about to fade away, Palinisms are going to be the new Bushisms. I started trawling the net for a list of fun examples and it seems I wasn't the first to think of this idea. Here is a list of some famous Palinisms. A review of this attempt to diagrammatically represent her sentences reveals why I believe Palinism is to Bushism like Ulysses is to a Western flick. Enjoy :)

Zardari a peacnik?

In this article by Asif Ali Zardari, President of Pakistan, he makes some interesting assertions. First, he basically declares the terrorists enemies of Pakistan as well as India. Second he makes overtures to India. Thirdly, he draws parallels with his own loss and those of India's. Finally, he acknowledges the presence of terrorists in Pakistan and acknowledges that this is a vestige of the cold war.


Benazir Bhutto's commitment to democracy was questionable. Her commitment to peace with India was even more questionable. Benazir Bhutto often came across as having a deep seated resentment for India.


Having said that, Mr. Zardari's comments do resonate. Benazir's death was as much an offshoot of the terrorists in Pakistan as the attacks on India. They have arrested the Lshkar-e-Taiba members, Let's see how this plays out.

PS: Pakistan has reportedly refused to extradite the terrorists to India. While Indians may be shocked, few countries agree to extradite people, notwithstanding treaties. The UK, for instance, is notorious for dargging its feet on extraditions despite extradition treaties. For instance, the UK is on record as saying no extraditions to the US for death penalty cases (i.e. terrorists included).

Sincerest form of flattery?

Bangladesh has nearly completed a life sized replica of the Taj Mahal, complete with marble, diamonds, and garden. Here is the article. I wonder whether this will have any impact on the Indian tourism industry over time.

The difficulties of dealing with gunmen

There are two major outstanding questions on the Mumbai terrorist - how did this happen, and what can be done to prevent it?

One of the baffling pieces questions about the Mumbai terror attacks is how just 10 people could have inflicted so much damage for over 60 hours across 10 locations. Some have been tempted to accuse the Indian troops of incompetence.

There are a lot of people alleging a cover-up. In this article, Sandhya Jain points out that a number of the facts make it seem unlikely that 10 people could have committed these attacks. How, she argues could two people hold the commandos at bay for 60+ hours while torturing and killing victims. One view is that there were mercenaries involved who were actually killed by the terrorists. Another is that there were more terrorists involved who have made a getaway, and it is being suppressed.

It's very hard to know the facts. However, in defense of those who allege only 10 people were involved, here are some things to ponder.

The first thing to remember is that gunmen intent on killing people can be surprisingly effective at causing carnage. For instance, the April 2007 Virginia Tech massacre resulted in the deaths of 32 people and injuries to scores more with just one gun man. The average per terrorist in the Mumbai attacks was ~18. The Columbine High School Massacre killed 12 people, and the shooting was continuing well after the SWAT teams arrived. It was probably the incompetence of the shooters at Columbine that kept the number of deaths so low.

The gunmen in such attacks have a huge tactical advantage. Whereas the gunmen are intent on killing people indiscriminately, security forces must only kill the gunmen and must avoid injuring all the other innocent bystanders. To make things more difficult, it's often not possible for security forces to tell who are the gunmen and who are innocent bystanders, so they need to move with extreme caution verifying identities of people before acting. There are no such constraints on the gunmen.

Also, it's hard to reason or deal with gunmen on a suicide mission. Most procedures for hostage situations tend to assume that the gunman doesn't want to die or is mentally disturbed. Terrorists are on suicide missions but are otherwise surprisingly rational, which causes many standard hostage procedures to fail completely. It is why Israel has been unable to stop Palestinian terrorists completely.

Some have wondered about the length of time it took to deal with the situation. In the beltway sniper case in 2002, the snipers were able to continue terrorising the I-95 corridor in Virginia and Maryland for three weeks, largely by moving around. The same, to an extent is true of the killers in India. They weren't stationary. In a building with hundreds of rooms, tens of floors and hundreds of innocent people, the police and army had no idea how many people they were dealing with and where they were, which made this very tough. Also, in many cases they just moved from one location to another, e.g. from the railway station to Nariman House, which meant that the responders were always one step behind. The terrain inside the building made it more like guerrilla warfare, which tends to even the odds for the underdog.

The gunmen were extremely well trained, by some reports they were trained by special forces. They carried sophisticated weapons - automatic assault rifles, grenades and two way communication devices, etc. They rigged bodies and the locations with booby traps, making negotiating the passages more difficult for the Indian commandos. They also took hostages and used them as shields.

This is a great article that describes the attacks in detail.

Even if we accept the official version of the story, there is no denying that India was woefully unprepared and the response was so poor that the death toll and injuries were much worse than they need have been:

• Lack of preparedness: The police in Mumbai were neither equipped nor trained to deal with situations like this. There was no SWAT team in Mumbai (a city of 19 million people). They had to fly in the commandos from New Delhi (where they protect politicians) so that the commandos only arrived 10 hours after the terror began. Contrast that with Virginia Tech and Columbine, where SWAT teams arrived within a couple of hours of the attack beginning, despite these not even being major metro areas.
• Lack of equipment: At the scene, the police didn't have proper bullet proof vests, few had two way radios. Even the commandos lacked night vision goggles and thermal sensors, so they were unable to see in the darkness. In fact, most of the police lacked even basic weapons or weapons training. Many have pointed out that the shooters didn't have all that sophisticated weapons. True, if you compare them to US SWAT teams. Not true if you compare them with Indian police.
• Poor training: Some of the procedures used by commandos: rappelling from a helicopter onto the roof, slowly descending down the narrow corridors, shooting blindly with the gun held over their heads suggested that the commandos weren't adequately trained, were too slow and tentative and weren't willing to take a hit. Contrast the speed of the action with what happens with the FBI or Israelis and you'll see what I mean.
• No clear demarcation of responsibility or procedures for response: India received several warnings about such an attack, the last as late as November 18, several days before the attacks. Yet, India could do nothing as intelligence filtered through the systems slowly, at each stage being met with skepticism and confusion. It's not clear that the right people were ever informed. The various agencies that were informed had no action plan of how to respond or how to coordinate. This is similar to what happened in the US after 9/11 which led to the creation of the color coded threat level system in the US.
• Ineffective communications systems: There were massive communications problems as there is no common intelligence sharing or communications system shared by all agencies. Not all the egncies involved had the same types of devices, there was no shared lines, and there were no communication and information sharing procedure. This is similar to what happened in Hurricane Katrina in the US. So, fire brigades, police, commandos, etc. couldn't convey information from one to the other quickly enough.
• Hotels with inadequate security: In most Western hotels, there would have been closed circuit televisions, sophisticated security systems, automatic doors that could be used to cordon off sections in the hotels. It seems that the Taj and Oberoi lacked even basic security systems, making intelligence about the terrorists' movements within hard to come by.
• Lack of tactical information about terrain: The commandos didn't have maps of the buildings they were entering, whereas systems in the US and elsewhere would have given SWAT teams exact maps and visual representations of all the buildings. So, the Indian commandos had to literally feel their way through unknown darkened corridors.
• No effective administrative command and control: There was an amazing breakdown in the command and control structure at all levels of the civilian administration. The Chief Minister and Governor can call martial law. They didn't do that in India, which meant huge crowds were able to gather metres away from the impacted buildings giving commandos little room to maneuver. It wasn't exactly clear who was in-charge and who needs to make what calls. There was no decision making structure and no clear lines of authority and authorities jockeyed for position and power.

I am sure that a thorough investigation will reveal a lot more weaknesses. All in all, it was very pathetic. If this were to happen again, even with advance warning, it isn't clear that India could prevent it or reduce the damage.

On the prevention front, the focus of the recriminations in India has been the ineptitude of the politicians. Unfortunately it requires a whole lot more, including a complete overhaul of the counter-insurgency systems in India. As the list above suggests, there are obvious areas of focus that stem from easily identifiable symptoms, e.g. fix security preparedness, equipment, administrative systems and procedures and intelligence gathering and response.

On the larger strategic front, though, the fixes are a lot less less clear.

The traditional view peddled by Pakistan is that Kashmir is the underlying cause of the hatred against India. However, there is a growing view as discussed in this article by Patrick French, that the type of hatred that fuels these attacks is the cause in itself and not a symptom. That the use of Kashmir and other examples of Indian transgressions are merely excuses, which, even if fixed, wouldn't root out people like these terrorists. Mr. Hafiz Saeed, head of Laskar-e-Taiba, reportedly said in 2000, “There can’t be any peace while India remains intact. Cut them, cut them — cut them so much that they kneel before you and ask for mercy.” However, he and his ilk have gone further, clubbing Israel, America and India in the same breath and avowing to establish a caliphate in Central Asia and murder those who insult the Prophet. The good news is that Indian Muslims are outraged by the terrorists. This same article talks about how Muslims were killed by the terrorists and Mumbai's Muslim council's refusal to allow the dead terrorists to buried at their cemeteries.

Fareed Zakaria argues very convincingly in this insightful piece that the solution to this problem is really to get Pakistan to start policing and rooting out the safe havens for these people within its border. To make matters more interesting, the terrorists attacks against Israelis, British and Americans has put Pakistan on the back foot in terms of their ability to continue to give aid and comfort to terrorists. Pakistan's civilian leadership seems to have got this memo from the US too, and they have made an arrest already - funny how quickly they can move when they want to. What remains to be seen is whether the Pakistani government is going to keep up the pressure or whether their resolve will wane after this token gesture.

As Richard Clarke illustrates in his article about the next steps that US and Al-Qaeda could take, the problem is that the task ahead for the terrorists is substantially easier than the one for US, and by extension India and Pakistan.

Obama's birth certificate

This article and the comments below it discuss Obama's citizenship. It is extraordinary the lengths to which some of these people are willing to go to in justifying their argument that Obama is not a natural US citizen.

The Supreme Court is considering a case on this. However, a quick clarifications. Contrary to the assertions of the bloggers and the commenters, Obama's birth certificate is not the issue in the case before the Supreme Court. The facts of Obama's birth have already been settled. He was born in Hawaii. Here's politifact.org's comment on the subject.

The case the Supreme Court is considering alleges that because Obama's father was a Kenyan and Kenya was still at the time a British colony, that the laws at the time would have made him a dual citizen of both the US and UK/Kenya and therefore he is not a natural born American citizen. If the Supreme Court decides that this view is correct, children of immigrants (even if only one parent is an immigrant) would be ineligible to be the US President. It seems unlikely though that the Supreme Court would decide to overturn the election.

UPDATE: The Supreme Court has thrown out the case. One appeal is still pending - the case filed by Berg alleging Obama wasn't born in Hawaii. The Federal court in Philadelphia had earlier rules that Berg had no locus standii to challenge Obama's citizenship. It's more than likely that Berg will lose the appeal.

Higgs Boson - addressing Dhakks

Dhakks asks in an earlier post whether the Large Hadron Collider is worth the billions that are being spent on it. My answer, quite simply, is yes. In fact, my only regret is that the US abandoned the even bigger Superconducting Super Collider in 1993. They should probably build it now, or an even bigger one.

I have two reasons. The first is my bias towards supporting scientific research - knowledge for knowledge's sake.

There are a number of problems with Science as we know it today. Most of the world lives comfortably unaware of the extent of ignorance and incongruity that the Human race is condemned to. If you'd like an entertaining version of our lack of knowledge, I would recommend "A Brief History of Nearly Everything."

A quick summary is as follows. We don't really understand where life came from or indeed what life is. We have discovered, just of late, that most of known biology is but a small fraction of life on Earth, most of the rest we don't know and don't understand. In Physics, the two great theories relativity (the theory of really big things) and quantum mechanics (the theory of really small things don't agree at the crucial point where they meet, and if we look into space and try to explain everything we see with existing theories, then the only explanation is that 96% of the Universe is made of stuff we don't know anything about. This is only the stuff which we know that we don't know. Who knows how much we don't know we don't know.

The experiments on Large Hadron Collider will, among other things, test the current standard model of the quantum physics, look for the Higgs boson, and start looking at whether String Theory is really valid. All this for a cost less than the amount the US spends on potato chips in a year.

These are just the experiments currently scheduled. Over time, it could yield surprising results that enable us to explore the reaches of what we don't know.

Does this knowledge have any practical value? Not immediately. However, those theorists working on quantum theory in the early 20th century could never have imagined the types of technologies their theories made possible. So, the results it generates could be the foundation of science and technology in the future. It all depends on what we learn, and we won't know that until we try.

However, there is a second more practical reason for building it.

The LHC is undoubtedly going to be the best particle accelerator in the world for many years to come. This means that the over 40 years of dominance that the US has had in the world of particle physics may end, as the best and the brightest from around the world will congregate to Europe and not the US for particle physics. That could, very soon, have noticeable economic consequences for both the US and Europe, and may be well worth the $2+BN that Europe has shelled out.

The centrist puzzle

Throughout the election season, the GOP peddled the view that Obama was a closet radical leftist. McCain and Co. went so far as to describe him as Socialist. Even the 'punditocracy' pointed to the "data" - his votes in the legislature and Senate that supposedly proved that he had no record of being centrist. Now, as Michael Gerson's article shows, they are all scratching their heads in wonder as his picks for various cabinet posts prove to be centrist. The left is infuriated. The right is pleasantly surprised and horrified.

Of course, all these reactions are a repudiation not of Obama's record, but the media story surrounding his record. Those who were crying "Socialist" and "Radical" were relying not on facts, but on opinions based on a selective sampling of facts. For instance, Obama's voting record can only be described as leftist if you believe that all tenets of the Democratic party platform are by definition leftist. Those who had bothered to examine his statements, his record and his opinions (which have been surprisingly consistent over the last 15 years or so), would have realized that he was a centrist all the time, and that votes to the contrary were usually tactical voting or political maneuvering. The gasps of astonishment just show the extent to which the media is willing to delude itself and buy the memes they peddle.

Why no outrage?

A very good article by Thomas Friedman who points out that there has been little outrage in Pakistan to the attacks in Mumbai, in complete contrast to, say the outrage and riots in Pakistan over the Danish cartoons about the Prophet Mohammed which resulted in the deaths of several people.

Recession began in 2007

Finally, economists are coming around to saying what most consumers have known for ages, that the recession began in late 2007. Here is the latest report that asserts this. It also says that if anything, the recession seems to be gathering pace, not slowing down.

Uncomfortable facts

In this article, Asra Nomani criticizes the conditions of Muslims in India and points out that this is a disaster waiting to happen. While it may be tempting to dismiss criticism of the Indian government policy towards Muslims as being ill conceived and insensitive, coming as it does just after a horrific terrorist attack, the data on this is pretty damning. Over the last twenty years (i.e. roughly since the mid-1980s), Muslims have fallen behind even the scheduled castes and tribes in terms of socio-economic progress. This report as part of the Sachhar Committee report shows some of this data. At minimum, this shows that while India is progressing, for one reason or the other, Muslims in India are being left behind. For the Muslim community to fall off so dramatically, there really has to be widespread disengagement. This is particularly evidenced by the fact that unlike Dalits and other minorities, and despite being the largest minority in India, there is no effective political advocacy on behalf of Muslims in the political process. This is not to validate the demands of Muslims, but more to highlight the lack of effective democratic outlet for Muslims.

This is a great article by Fareed Zarkaria where he, among other things, points out that these issues need to be resolved not just by India but by the whole region, as the problems bleed from one country to another.

One of the readers comments in the Fareed Zarkaria article alleges that the Indian Army and R&AW routinely engineer these incidents within India and then blame Pakistan. Searches for reports on the Sabarmati Express, Godhra incident, Malegaon blasts, etc. reveals a pot pourri of allegations of this kind emanating from news organizations from Pakistan and India. As with all news, people selectively remember the reports that supports their view of the world.

The underlying problem for people like the commenter though is that there is no credible trustworthy impartial arbiter of truth in the sub-continent. Even in horrific cases such as the Godhra incident, there are contrary opinions issued by different commissions. These commissions are often designed to make political hay out of lamentable situations, and as a result, people are left with doubts. Even to this day the facts in most of these cases are unclear.

Adding to confusion are the often wild and baseless accusations and claims made by the Indian media and politicians, which never get rescinded and are then absorbed into the ongoing memes in the Indian consciousness. How many terrorists were there in the latest attacks? How did they get there? Where are they from? All sorts of facts and speculation have been bandied about.

Some of these are harmless. But often, these factoids, despite being blatently false, feed and justify the views of extremists.