Archive for the 'EU' Category

Neither a borrower nor a lender be?

Monday, May 19th, 2014

The FT reported that PE firms in Europe are paying 10.4x EBITDA now, versus 9.7x in 2007. The US PE prices look to be about 9.1x versus 9.6x in 2007. Debt ratios are 5.6x versus 6.1x in the good old days. 2007, eh? We recall the Bear Stearns conference call back then, when virtually no one knew what was coming over the next 13 months. Compared to 2007, the economic fundamentals do not seem as good today. What do these high PE prices portend?

A tale from CDG

Saturday, May 3rd, 2014

30 years ago or so our Concorde flight from Charles de Gaulle to JFK had engine trouble shortly after takeoff. After returning to the airport, we all waited together for another plane. Seated nearby were Felix Rohatyn and David Rockefeller, who told a little story. He had called on François Mitterand at the Élysée Palace, and was really PO’d that Mitterand kept him waiting for half an hour. Rohatyn nodded his disapproval of the impolite behavior. Rockefeller went on with the story, saying that during his meeting he invited Mitterand to his country estate. Rohatyn seemed surprised by this gracious gesture. Then Rockefeller delivered the punchline: “What I didn’t tell him is that Giscard d’Estaing will be there that weekend.” Laughter all around.

Drip, Drip, Drip

Sunday, February 9th, 2014

A genius speaks. Letters from a grammar school principal here and here, and an explanation. The end of snow. Blah blah and an interesting piece on the ACA; RIP has dual meanings. Jonah has too much time on his hands. Thoughts on the 1st amendment. A diner at Elaine’s and Primola makes his case. And a couple of additional examples of well-funded government antics. Drip, Drip, Drip.

This, that, and the other thing

Sunday, November 10th, 2013

In 1963 Sukiyaki was a big hit in the US. A couple of years later so was Hogan’s Heroes. These things happened only two decades after the end of WWII. Two bad ideologies had been defeated. Life moved on. We’re now a dozen years after 9-11 and the ideology that led to it is still mostly untouched. Not a good sign. It would be a very strange thing if the US’s fecklessness on Iran produced Sunni-Israeli cooperation that resulted in a change in a vile ideology. Probably impossible, but we’re looking for the pony in there somewhere.

In other news, Pigalle is apparently being ruined “by the banal globalization of hipster good taste, the same pleasant and invisible force that puts kale frittata, steel-cut oats and burrata salad on brunch tables from Stockholm to San Francisco.” Have a pleasant Sunday!

Bright lines, perilous times

Sunday, November 3rd, 2013

The NYT is still happy, though concerned that their man “misspoke” two dozen times or so. The AP is running news that was unthinkable five years ago, and ABC is mocking their erstwhile messiah. A line has been crossed, the line demarcating the limits of political BS.

So now we have a world where Saudi Arabia, Syria, Russia, Iran, Israel, Germany, England, and most of the rest of the world don’t believe a word the BS-er in chief says, along with at least the half of the USA that is paying attention — and that number seems likely to grow. Only the NYT and its followers, parts of the Washington press corps, and faculty lounges take the college professor seriously now. Everyone who wants to know now knows that a bright line has been crossed, and as a consequence we live in perilous times for the next three years or so.

Eh and Eh…….and Eh

Thursday, October 17th, 2013

Eh and Eh, foreign and domestic dysfunction. And finally, a case can be made either way for shutdown. We happen to think it was good theater, the evidence for which is that is the rhetoric of the other side. But reasonable people can differ. This is not reasonable, however. Anyway, none of this matters because the country can’t be saved until it stops its practice of 40-70% of children in its various communities being born to unwed mothers.

Rejoice and be deeply uneasy at the same time?

Wednesday, October 9th, 2013

Evans-Pritchard:

Rejoice: the Yellen Fed will print money…Janet Yellen is to take over the US Federal Reserve, the world’s monetary hegemon, the master of all our lives. The Fed will be looser for longer. The FOMC will continue to print money until the US economy creates enough jobs to reignite wage pressures and inflation, regardless of asset bubbles, or collateral damage along the way.

No Fed chief in history has been better qualified. She is a glaring contrast to Alan Greenspan, a political speech writer for Richard Nixon, who never earned a real PhD (it was honorary) or penned an economic paper of depth…

She was…quick to sense the danger of a chain reaction through the shadow banking system. Ben Bernanke and the FOMC majority scoffed at worries that the subprime debacle was the tip of an iceberg.

“I feel the presence of a 600-pound gorilla in the room, and that is the housing sector. The risk for further significant deterioration, with house prices falling and mortgage delinquencies rising, causes me appreciable angst,” she told Fed colleagues in June 2007, a 15 months before the storm hit…

she clashed with New York Fed chief William Dudley in December 2007 over the risks of subprime mortgage defaults, which is telling since Dudley (ex Goldman Sachs) was supposed to be the official with his finger on the market pulse. “The possibilities of a credit crunch developing and of the economy slipping into a recession seem all too real. At the time of our last meeting, I held out hope that the financial turmoil would gradually ebb and the economy might escape without serious damage. Subsequent developments have severely shaken that belief,” she said. She was absolutely right again…

The next chairman of the Fed is going to track the labour participation rate. Money will stay loose. Markets have been spared again. The Brics can breathe easier. This leaves me deeply uneasy. We are surely past the point where we can keep using QE to pump up asset prices.

So she’s the most qualified Fed chair in history and he’s deeply uneasy. Well, he’s been on both sides of issues before. Pethokoukis has a more balanced appraisal of the situation.

Bonus business link: Jim Chanos.

What’s the next mission for the LHC?

Sunday, September 22nd, 2013

Tech Week:

Fresh collisions will be launched in two years’ time as CERN looks into other phenomena, such as anti-matter. They will create a significant amount of additional data for the IT team to deal with. When they need to, each of the site’s four particle detector hubs – ATLAS, CMS, ALICE and LHCb – take what amounts to 40 million pictures a second, producing 40 petabytes of information. Whilst not all of that information is kept – much of it related to already understood physics rather than interesting new particles – there is still 25GB a second that has to be thrown on standard discs and tapes…

When the giant underground tube starts seeing particles smashing into one another again, the backend systems need to be ready for the extraordinary amount of data that will come through, whilst supporting the bespoke code that picks out the interesting collisions…it’s like helping to “find a needle in a haystack when you don’t know what a needle is”…the LHC does not have enough budget to build as many systems as CERN would like, partly thanks to the current European economic climate. Nor has it been able to bring in new workers, even where additional systems have been installed.

So it appears that the LHC schedule may not be met. Well at least the earth wasn’t destroyed by the darned thing. Perhaps the funding lag is related to the LHC already having discovered the Higgs Boson. As explained here in this video, that apparently was the main mission of the LHC, and it accomplished it promptly and left the Standard Model intact. Now what?

Astonishing? Or merely today’s news? And tomorrow….?

Monday, September 9th, 2013

The Secretary of State:

We will be able to hold Bashar al-Assad accountable without engaging in troops on the ground or any other prolonged kind of effort in a very limited, very targeted, short-term effort that degrades his capacity to deliver chemical weapons without assuming responsibility for Syria’s civil war. That is exactly what we are talking about doing – unbelievably small, limited kind of effort.

“Unbelievably small, limited kind of effort.” Amazing. Alienating both hawks and doves simultaneously, while managing to look completely incoherent. Quite the hat trick.

We’d guess that there’s going to be no attack, since all this dithering and incompetence have virtually guaranteed a disproportionate response from Syria’s sponsors. Having said that, it is unwise to underestimate the stupidity and utter absence of both strategic and tactical thinking among this crew.

Inside baseball

Saturday, August 17th, 2013

Conrad Black has an excellent piece at NRO regarding a recent book on FDR and Soviet spying. Ron Radosh has a similar piece. John Earl Haynes and Harvey Klehr have a very detailed review of the Agent 19 scholarship at FrontPage. The authors remind us of the kids who memorized the HR’s, RBI’s, batting averages and all the other statistics of their favorite players back in our youth. Makes our head spin. However, the extensive espionage of the thirties and forties raises the interesting question of who their contemporary counterparts are and whom they’re working for. (Normally you might ask the NSA the question, but they’re tied up at the moment.)

So much remains to be learned

Thursday, August 8th, 2013

Nature:

During the most recent ice age, milk was essentially a toxin to adults because — unlike children — they could not produce the lactase enzyme required to break down lactose, the main sugar in milk. But as farming started to replace hunting and gathering in the Middle East around 11,000 years ago, cattle herders learned how to reduce lactose in dairy products to tolerable levels by fermenting milk to make cheese or yogurt. Several thousand years later, a genetic mutation spread through Europe that gave people the ability to produce lactase — and drink milk — throughout their lives. That adaptation opened up a rich new source of nutrition that could have sustained communities when harvests failed…

Most people who retain the ability to digest milk can trace their ancestry to Europe, where the trait seems to be linked to a single nucleotide in which the DNA base cytosine changed to thymine in a genomic region not far from the lactase gene. There are other pockets of lactase persistence in West Africa, the Middle East and south Asia that seem to be linked to separate mutations. The single-nucleotide switch in Europe happened relatively recently. Thomas and his colleagues estimated the timing by looking at genetic variations in modern populations and running computer simulations of how the related genetic mutation might have spread through ancient populations. They proposed that the trait of lactase persistence, dubbed the LP allele, emerged about 7,500 years ago in the broad, fertile plains of Hungary…

Looking back through the archaeological literature, Bogucki found other examples of ancient perforated pottery. “They were so unusual — people would almost always include them in publications,” says Bogucki, now at Princeton…The mystery potsherds sat in storage until 2011, when Mélanie Roffet-Salque pulled them out and analysed fatty residues preserved in the clay. Roffet-Salque, a geochemist at the University of Bristol, UK, found signatures of abundant milk fats — evidence that the early farmers had used the pottery as sieves to separate fatty milk solids from liquid whey. That makes the Polish relics the oldest known evidence of cheese-making in the world

Well, that’s an upbeat tale, as opposed to this scary one.

It’s worse than you thought

Monday, July 15th, 2013

Standpoint:

Undergraduates who went up to Oxford to read modern history in the mid-1970s found themselves examined in their first term on four historical classics: Edward Gibbon’s Decline and Fall of the Roman Empire; Macaulay’s History of England, Alexis de Tocqueville’s L’Ancien Régime et la Revolution and the Weltgeschichtliche Betrachtungen (“Reflections on World History”) by Nietzsche’s Swiss friend and mentor, Jacob Burckhardt. These texts suited the taste of the Regius Professor, Hugh Trevor-Roper, himself a great historian both of the 17th and 20th centuries…Today his chair, Froude’s chair, is occupied by Lyndal Roper, an Australian specialist on witchcraft in early modern Germany…

history in general has retreated into the ivory tower, or lies rolling in the gutter…the first minister for a generation to care enough about history to wish to restore it to the privileged place in the nation’s intellectual life that it once enjoyed, has encountered bitter opposition, not from philistines and barbarians, but from the historians themselves.

Western history includes hard won and bitter battles to make rationality trump superstition. Now no one remembers the past, but it’s even worse than that. Apparently the historians themselves do not care about or do not believe in the broad narrative of the West’s remarkable triumphs of the last millennium.

Three Days of the Gondorff

Sunday, July 7th, 2013

The NYT reports on 1800 requests, zero denials, and all in secret:

the FISA court hears from only one side in the case — the government — and its findings are almost never made public. A Court of Review is empaneled to hear appeals, but that is known to have happened only a handful of times in the court’s history, and no case has ever been taken to the Supreme Court. In fact, it is not clear in all circumstances whether Internet and phone companies that are turning over the reams of data even have the right to appear before the FISA court.

Created by Congress in 1978 as a check against wiretapping abuses by the government, the court meets in a secure, nondescript room in the federal courthouse in Washington. All of the current 11 judges, who serve seven-year terms, were appointed to the special court by Chief Justice John G. Roberts Jr., and 10 of them were nominated to the bench by Republican presidents. Most hail from districts outside the capital and come in rotating shifts to hear surveillance applications; a single judge signs most surveillance orders, which totaled nearly 1,800 last year. None of the requests from the intelligence agencies was denied…

The officials said one central concept connects a number of the court’s opinions. The judges have concluded that the mere collection of enormous volumes of “metadata” — facts like the time of phone calls and the numbers dialed, but not the content of conversations — does not violate the Fourth Amendment, as long as the government establishes a valid reason under national security regulations before taking the next step of actually examining the contents of an American’s communications.

This concept is rooted partly in the “special needs” provision the court has embraced. “The basic idea is that it’s O.K. to create this huge pond of data,” a third official said, “but you have to establish a reason to stick your pole in the water and start fishing.”

Under the new procedures passed by Congress in 2008 in the FISA Amendments Act, even the collection of metadata must be considered “relevant” to a terrorism investigation or other intelligence activities. The court has indicated that while individual pieces of data may not appear “relevant” to a terrorism investigation, the total picture that the bits of data create may in fact be relevant, according to the officials with knowledge of the decisions.

Let’s see. All your internet information, all your phone calls, credit card charges, and your locations at the time, and all the same information about your counterparties, including secret, shared email accounts that serve as dropboxes for private communications. That’s how they got the goods on Petraeus and his girlfriend. It’s the Chicago Way after all, and think of what they have on reporters and editors, congressman and senators, businessmen and union heads, and everyone on both sides thinking about running in 2016. You doubt this? Come on.

It’s a good plot for a movie. Sort of Three Days of the Condor, apparently without the murders. But there’s something missing. Most of the commentary on potential abuse of the NSA’s comprehensive database has focused on political corruption. It’s a big story and a good story, and no doubt it is going on. But there’s a bigger and better plotline as well. Money. Imagine every hedge fund senior staff getting the scrutiny that Stevie Cohen and his crew get. The senior Wall Street types, every Fortune 500 CEO and BOD, the Silicon Valley VC’s, the PE moguls, etc. And oh yes, here’s where the international reach of the NSA comes in.

The NSA’s surveillance captures international corporate communications, those of the global Forbes 400, and places like Russia, China, Saudi Arabia, Switzerland, etc where insider trading and market manipulation are perhaps more the rule rather than the exception. Imagine knowing in advance that an investor was going to break the pound. Imagine knowing in advance what OPEC or the oil manipulators of 2008 were going to do. Or knowing about the bear raids on banks in 2007-2009 just before they happened. Do you keep the information or sell it to your unsavory friends? Who knows? We haven’t written the script yet, but we have a working title: Three Days of the Gondorff.

Fickle, expensive, noisy, and deadly

Saturday, June 29th, 2013

Daily Mail:

There had been only eight recorded sightings of the white-throated needletail in the UK since 1846…The last sighting of a white-throated needletail was 22 years ago. A relative of the common swift, it is said to be capable of flying at an astonishing 106mph…A group of 40 enthusiasts dashed to the Hebrides to catch a glimpse of the brown, black and blue bird, which breeds in Asia and winters in Australasia…John Marchant, 62, who had made the trip all the way from Norfolk, said: ‘We were absolutely over the moon to see the bird. We watched it for nearly two hours. ‘But while we were watching it suddenly got a bit close to the turbine and then the blades hit it. ‘We all rushed up to the turbine, which took about five minutes, hoping the bird had just been knocked out the sky but was okay. ‘Unfortunately it had taken a blow to the head and was stone dead.

The turbines operate at 24% of capacity, cost 9x more than creating power from gas, and have to be backed up at all times by fuel burning generators in case the wind dies down. And if you’re a white-throated needletail, they can ruin your whole day.

Drone on

Saturday, June 1st, 2013

cdn-media.nationaljournal.com

NJ:

more than 75 countries have remote piloted aircraft. More than 50 nations are building a total of nearly a thousand types. At its last display at a trade show in Beijing, China showed off 25 different unmanned aerial vehicles.

The MQ-9, pictured above, is a serious aircraft. New versions will have 1K thrust engines, 88 foot wings, 12,000 pounds GTOW, and up to 42 hours of non-stop ISR flying. They can carry 14 Hellfire missiles or 4 of those plus two 500LB laser guided bombs. The technology is advancing very quickly in this arena, and soon there will be thousands of them flying globally. The current US order book is less than 500, but that will no doubt increase substantially. Oddly enough, we don’t recall ever hearing of the company that makes these aircraft before now. From the Google car to this, a brave new world.

Those dangerous tweets

Thursday, May 30th, 2013

Christopher Hitchens noted the deterioration in England back in 2007, and things have not improved. Going back a little further, to the days of the Cartoon Riots, we note Wretchard’s excellent piece on the perils of appeasement.

And here we are again today. The media and the police in England have joined forces to suppress free speech in the wake of the horrific slaughter of that soldier the other day. We suppose they’re afraid of the soccer hooligans acting up, though evidence for that is scarce. So they’re going after tweets of all things. This can’t end well.

Why stop with free speech? The logic of this appeasement ends in burning books and shuttering museums. Time to get a head start.

Notice a pattern?

Sunday, May 26th, 2013

A newspaper in Sweden:

while the Stockholm riots keep spreading and intensifying, Swedish police have adopted a tactic of non-interference. ”Our ambition is really to do as little as possible,” Stockholm Chief of Police Mats Löfving explained to the Swedish newspaper Expressen on Tuesday. “We go to the crime scenes, but when we get there we stand and wait,” elaborated Lars Byström, the media relations officer of the Stockholm Police Department. ”If we see a burning car, we let it burn if there is no risk of the fire spreading to other cars or buildings nearby. By doing so we minimize the risk of having rocks thrown at us.” Swedish parking laws, however, continue to be rigidly enforced

It’s all senseless violence, don’t you know? Steyn has some additional observations on how very strange the West has become — not that any of this is new; the “youths” have been rioting for years and no one seems to know why

Bureaucracies continue to argue for their own destruction

Monday, May 20th, 2013

Telegraph:

The small glass jugs filled with green or gold coloured extra virgin olive oil are familiar and traditional for restaurant goers across Europe but they will be banned from 1 January 2014…The use of classic, refillable glass jugs or glazed terracotta dipping bowls and the choice of a restaurateur to buy olive oil from a small artisan producer or family business will be outlawed…The European Commissions justification for the ban, under special Common Agriculture Policy regulations, is “hygiene” and to protect the “image of olive oil”…”It will seem bonkers that olive oil jugs must go while vinegar bottles or refillable wine jugs can stay.”

At least they’re fiddling with olive oil. It could be a lot worse.

60% now

Tuesday, May 7th, 2013

Pioneer Press:

more than six out of 10 women who give birth in their early 20s are unmarried. That is census data, from census demographers, from the very government that then becomes responsible for many, if not most, of those unmarried women and children. If that isn’t an astonishing statistic, it should be.

From bad to worse. Melanie Phillips has more.

The masses are revolting

Tuesday, April 30th, 2013

Spectator:

the French political system is terminally sick. The historical background certainly confirms this. For more than 30 years, every French government has lost every election. With a single exception, you have to be over 50 today to have voted in the last election, in 1978, when the incumbent majority held on to power: Nicolas Sarkozy managed to get a conservative majority re-elected in 2007 only because he profiled himself, dishonestly, as a new broom and as a rebel against the roi fainéant, his former mentor Jacques Chirac. Add to this the fact that in 2005 the referendum on the European constitution produced a ‘no ‘vote — that is, a disavowal of the entire political establishment — and you are confronted with a bitter reality: the French electorate hates its politicians and takes every chance to vote against them. François Hollande’s election last May was therefore not a victory but only his predecessor’s defeat. He was elected with 48 per cent of the votes, if you include spoilt and invalid ballots, and 39 per cent of the registered voters. His election was especially unimpressive considering the widespread revulsion at Sarkozy’s personal bling and at his betrayal of his own voters. But even so, Hollande’s catastrophic poll rating has broken all records. When in March he became the most unpopular president after ten months in office, his rating stood at 31 per cent. Now it is 26 per cent.

With unemployment nearing 11%, what do you expect?