Tuesday, September 1, 2015

Techy Tuesday - A Big Couple of Weeks in Electronics History

On August 28, 1958, Jack St. Clair Kilby of Texas Instruments demonstrated the first functional circuit made from a collection of pieces of silicon; it was a multivibrator, a type of oscillator or two state circuit.  Kilby had been hired by Willis Adcock the previous May, three months prior.  Since he had only been at TI those few months, he didn't have vacation time when the plant was to be shut down for a mass vacation.
[Kilby] was “left alone to ponder” and sketched out a circuit made entirely of semiconductors.

When Adcock returned from vacation, Kilby showed him the sketches. Adcock was skeptical and requested proof such a device would work. 

So Kilby – using packaged growth-junction transistors, resistors formed by cutting small bars of silicon etched to value, and capacitors cut from diffused silicon power transistor wafers – assembled and demonstrated a circuit made of discrete silicon elements.
While an interesting midpoint, it still wasn't the big prize that Kilby is known for today.  That came a couple of weeks later: September 12, 1958.  Jack demonstrated the first completely integrated circuit, made from a wafer of germanium, an embodiment of the same basic multivibrator circuit.  It wasn't much to look at and the component density wasn't an improvement over previous attempts to miniaturize electronics, everything is glued to a glass slide which is about an inch long, but it was the start of the integrated circuit industry, leading inexorably to today's submicron geometry transistors etched by the million in today's world.  
It was integrated with all the components in the bar of germanium, but the connecting wires are visible here.  Integrated wires were still yet to come, but the principle of having all of the circuit elements created from a piece of semiconductor was demonstrated.  In February of 1959, Kilby applied for the patent on the IC and was granted it a few months later.  TI is still proud of being the company where the IC was invented and still has a historical web page up about it. 
The integrated circuit first won a place in the military market through programs such as the first computer using silicon chips for the Air Force in 1961 and the Minuteman Missile in 1962. Recognizing the need for a "demonstration product" to speed widespread use of the IC, Patrick E. Haggerty, former TI chairman, challenged Kilby to design a calculator as powerful as the large, electro-mechanical desktop models of the day, but small enough to fit in a coat pocket. The resulting electronic hand-held calculator, of which Kilby is a co-inventor, successfully commercialized the integrated circuit.
The integration of wires was to come in 1959, when Fairchild Semiconductor co-founder Bob Noyce demonstrated his planar integrated circuit.  Robert Noyce went on to found Intel with Andy Grove and Gordon Moore in 1968, and many historians refer to Kilby and Noyce as essentially co-inventors of the integrated circuit.  But now we've wandered too far from our subject, three remarkable weeks in 1958.




Monday, August 31, 2015

A PC That Runs on 5 Watts?

GiadaTech, a company I've never heard of, made a little news with the release of their model F200, a PC that runs on 5W that's aimed at thin client, digital signage, and industrial control applications. 
Within its 4.6×4.2×1.2-in. metal chassis, the fanless F200 packs 2 Gbytes of DDR3 DRAM and 8 Gbytes or 16 Gbytes of eMMC flash soldered directly on the board. It requires just 5 W of power at full load, compared to most desktop PCs using 100 W or more.
While clearly not a desktop-class device, compared to hobbyist single board computers like the Raspberry Pi or BeagleBoard, I'd be pretty sure it would hold its own.  Based on an Intel Celeron dual core, dual thread processor running at 1.58~2.16GHz, it's capable of running Linux or one of the Android builds, Windows 7 or 8.1.  

The basic version is said to list at $110, but there are many options including HDMI video, SIM card for 3G connectivity, mSATA II drive connections for a Solid State Drive.  It's supposed to be for sale Real Soon Now: "September of 2015", but apparently not tonight. 


Sunday, August 30, 2015

Congress Passes the Americans With No Abilities Act

 WASHINGTON, DC - On Tuesday, Congress approved the Americans With No Abilities Act, sweeping new legislation that provides benefits and protection for more than 135 million talentless Americans.
 
         The act, signed into law by President Obama shortly after its  passage, is being  hailed as a major victory for the millions upon millions of U.S.citizens who lack any real skills or uses.
 
         "Roughly 50 percent of Americans-through no fault of their own-do not possess the talent necessary to carve out a meaningful role for themselves in society," said Obama, a longtime ANA supporter. "Their lives are futile hamster-wheel existences of unrewarding, dead-end busywork: xeroxing documents written by others, fulfilling mail-in rebates for Black & Decker toaster ovens, and processing bureaucratic forms that nobody will ever see. Sadly, for these millions of nonabled Americans, the American dream of working hard and moving up through the ranks is simply not a reality."
 
         Under the Americans With No Abilities Act, more than 25 million important-sounding "middle man" positions will be created in the white-collar sector for nonabled persons, providing them with an illusory sense of purpose and ability. Mandatory, non-performance-based raises and promotions will also be offered to create a sense of upward mobility for even the most unremarkable,  utterly replaceable employees.
 
        The legislation also provides corporations with incentives to hire nonabled workers, including tax breaks for those who hire one non-germane worker for every two talented hirees.

         Finally, the Americans With No Abilities Act also contains tough new measures to prevent discrimination against the nonabled by banning prospective employers from asking such job-interview questions as, "What can you bring to this organization?" and "Do you have any special skills that would make you an asset to this company?"  
   
        "As a nonabled person, I frequently find myself unable to keep up with co-workers who have something going for them," said Mary Lou Gertz, who lost her position as an unessential filing clerk at a Minneapolis tile wholesaler last month because of her lack of notable skills. "This new law should really help people like me."  Singer Justin Bieber agreed, saying, "While I'm living proof you can get far in music without a lot of talent, the ANA is really going to help bring lots more acts like mine to the public!"   

        Lena Dunham, creator, writer and star of HBO's "Little Girls" noted, "I've done well in life for someone without a single shred of talent or abilities, but I know I've found a ways to penetrate a market that not many people can get into.  This law will help the millions of people who have no skills and keep them from becoming competition". 

        With the passage of the Americans With No Abilities Act, Gertz and millions of other untalented, inessential citizens can finally see a light at the end of the tunnel.
 
        Said Obama: "It is our duty, both as lawmakers and as human beings, to provide each and every American citizen, regardless of his or her lack of value to society, some sort of space to take up in this
great nation."
Justin Beiber and President Obama at the post-signing party (photo credit Roy Ters). 


Irrational Rifle Lust

Ever since I saw the first marketing release on the Ruger Precision Rifle, I've been fighting rifle lust.  I have this mildly irrational thing about rifles, and they're punching all my buttons on this one, for sure.

To borrow a quote from American Rifleman review,
As Townsend Whelen, former U.S. Army colonel and American Rifleman contributor, was once famously quoted as saying, “Only accurate rifles are interesting.” Employing that rubric alone, the Ruger Precision Rifle is a supremely interesting firearm. And, to the company’s credit, the introduction of additional evaluation criteria such as versatility, reliability and value only make its newest bolt-action repeater all the more intriguing. Featuring sub-minute-of-angle accuracy, the dependability of a bolt gun built on the gunmaker’s proven American action, all the modularity of the ├╝ber-customizable AR-15 platform, the ability to accept a multitude of magazine types and a price tag that is a literal fraction of many of the guns it will compete against on the market, Ruger’s latest foray into the long-range precision shooting field should pique the interest of a broad range of gun aficionados.

Sturm, Ruger & Co. believes that within the gun world there exists a sizeable segment of shooters who are interested in long-range precision shooting—they just have never been able to justify taking the plunge due to the typically astronomical cost of purchasing a gun designed expressly for that purpose. With an MSRP of $1,399—and a likely eventual selling price closer to $1,100—the Precision Rifle represents Ruger’s invitation for these cost-conscious gun buyers to finally enter the world of long-range shooting.

Like I say: irrational rifle lust.  I can list a handful of reasons why it's irrational.  The longest range I have within even an hour's drive radius is my club's 600 yard range - which I haven't even visited!  There are some longer ranges in the "several hours" drive range, which I've never visited either.  I have a couple of guns that are probably capable of decent performance at 600 yards, but aren't going to be capable of 1/2 MOA, both in .308.  My .30-06 probably isn't far behind.  But this ain't the wide open spaces of Texas or the BLM lands out west.  This is Florida.  You could watch your dog running away for three days if it weren't for the golf course developments and condos.

But I'm smack dab in the marketing demographic, "shooters who are interested in long-range precision shooting ... just have never been able to justify taking the plunge due to the typically astronomical cost of purchasing a gun designed expressly for that purpose."   ~$1100 street, 1/2 MOA, maybe even in 6.5 Creedmore.  To borrow a quote from Tam in a comment here about 18 months ago, that rifle on my range would be "... like driving a Lambo Gallardo up and down your driveway" ...  Like I say, it's irrational lust. 
 


Friday, August 28, 2015

Important Tropical Storm Erika Update

Dave Barry posts this update from weather.com.  Note to weather.com guys:  passing spell check doesn't mean you're off the hook.
To be temporarily serious, by the placement of the symbols, I can tell you that was yesterday.  Today the path has shifted west until the 8 PM update has it coming ashore as a tropical storm around Tampa on Monday afternoon and moving up the west coast of Florida, which will be a Bad Thing for folks over there.  They've had an extremely wet summer over there, with flood warnings and advisories daily, so they could do without the rain.  I think McThag is over there somewhere.  Good luck! 

I'm keeping an eye on it to see if I have to do any serious preparation, but as long as it stays a tropical storm it looks like I'm going to work Monday.  It's almost a summer hobby around here to keep an eye on the forecasts. 


Tales From the Over Regulated State # 18 - Redefining Employment

The National Labor Relations Board issued a ruling that will dramatically impact franchise agreements, and could lead to franchises completely going away.  Franchising has always been based on an independent business model; that is, compared to a company opening another branch or office, a franchisee got the benefit of the name but was essentially an independent business who (for fees) could operate essentially as they wanted.  This ruling turns that upside down.  From PJ Media:
The National Labor Relations Board issued a ruling that revised its “joint employer” standard, making the parent company of independently owned franchises responsible for many labor practices.

The case at issue involved a California Teamsters local who asked the NLRB to declare Browning-Ferris and a staffing agency “joint employers.” The staffing firm, Leadpoint Business Services out of Phoenix, had been supplying Browning-Ferris with temporary workers and the Teamsters wanted the board to recognize the bargaining rights of the subcontracted labor.
Years ago, in my first "supervisor" position, I was sent to a seminar on unions, who were trying to unionize the electronics company I was in at the time.  The saying then (under Jimmy Carter) was, "never assume the NLRB arbitration is fair or objective".  Damn near 40 years later, no real change.

What the NLRB has done here is to say that the franchising corporation is jointly responsible for the actions of a franchisee.  It also means unions no longer need to be concerned with organizing every franchisee in the country (for giants like Burger King or McDonald's); they could unionize entire operations by simply organizing at the "home office".  Rueters reports,
The board, in a 3-2 decision that will likely be appealed in U.S. court, said the existing standard, under which companies had to have “direct and immediate control” over employment matters such as hiring and firing to be considered employers, was outdated and did not reflect the realities of the 21st century workforce.

“We will no longer require that a joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority,” Board Chairman Mark Pearce wrote.

The decision means large companies that use a franchise model or staffing agencies will in many cases be required to bargain directly with unions and employees, potentially making it easier for them to win higher wages and better working conditions.
...
Michael Lotito, a lawyer at Littler Mendelson in San Francisco who works with industry groups, said companies will have two main options moving forward: take more control over workers, which would upend existing business models, or back away and risk losing control over brand identity.

“The NLRB has totally upset the apple cart with respect to an understanding over accepted business risk,” he said
...
The decision came as McDonald’s Corp (MCD.N) is facing a series of NLRB cases brought against dozens of its franchisees around the country. The fast food giant has argued that it is not a joint employer because it does not hire and fire franchise workers, and Thursday’s decision may make it more difficult for the company to make its case.
The articles focus on companies like McDonald's and Burger King, but franchising is very wide spread and by no means ends with food services.  There are franchise systems in education, home furnishings,  clothing, oil change chains, gas stations, convenience stores, fitness stores, coaching, tanning salons; essentially "you name it".  When I was about 10 or 15 years younger and contemplating other things to do in life, I considered buying a franchise for a Woodcraft store, so add woodworking stores. 

In essence, as the dissenting members of the NLRB said, they've redefined employment.  PJ Media states:
Franchises account for more than $2 trillion of America’s economy. There are more than 800,000 franchises nationwide with more than 18 million employees. All of that is threatened by the ruling of the labor board that seeks to destroy independent franchise business owners.
Why should any business want to sell franchises anymore if they become responsible for everything the franchisees do?  It implies the franchisers will be responsible for (read: subject to lawsuits over) hiring and firing decisions, and possibly every aspect of policies and procedures the franchisees will implement.  If a franchise holder fires an employee, that employee can apparently sue both their "local" boss and the national corporation.  Franchise owners buy franchises as a way to get national name recognition as they start a business while still usually retaining more flexibility over these sorts of mundane policies.  That freedom goes away under this ruling.

This is yet another example of the problem of the effects of government agencies writing law on their own without going through congress.  This ruling will be appealed, but assume for a moment they get a friendly judge and the ruling is upheld.  They've then changed the nature of full time employment nationwide, not just for the 18 million people working for a franchise, but for everyone.  It's impossible to estimate what sort of effect it would have, but one possibility is that full time employment eventually ends. People contract to some business and are self-employed small businesses for their entire working lives.  It's something I think I've seen coming for years.


(source)

Note to really long time readers: I knew I've done a lot of these "Tales From the Over Regulated State", but since I never started to number them, they were always hard to search for.  I just used the search tool in the upper left to search on Over Regulated and see how many there have been.  This seems to be number 18, so I'll use this number and try to number from now on.



Wednesday, August 26, 2015

I Still Don't Think It's Over

Everything is hurting, but the DJIA went up over 600 bucks today: 619 to 16,285.  Gold is down, silver is below the 5 year low a few weeks ago to a 6 year low.  Is the bleeding over? 

I say it's a dead cat bounce.  This isn't even the end of the beginning.  I'm on the sidelines until maybe mid-October. 

At the end of the first quarter, investors held about $24 Trillion in stocks.  Prices are down about 10% since then, so $2.4T has evaporated.  The problem with this whole $2.4 T is that it was funded by quantitative easing and zero interest rates.  It was pure fakery.  I've been beating this horse since they started printing money after 2008. 

The essence of the problem in 2008 was that there was too much outstanding credit.  Corporations and people were mortgaged to the hilt and couldn't afford to add more to their payments.  Borrowing money can only move a purchase forward in time.  The classic example is buying a car by either financing it now, and paying the bank interest every month, or putting aside a few hundred$ every month for four years and buying the car for cash.  You spent the same number of dollars, didn't pay a bank or finance company anything but got the car four years later than if you financed it.  Borrowing the money to buy the car moved the purchase forward (and ended up in a lower end car due to paying that interest).  

So the Philosopher Kings of the central banks said the economy needed to borrow more and started pumping out more money.  Banks got it first and they started pumping stock prices to trade back and forth.  Then it flowed to corporations who did the same.  Later corporations realized a way to make themselves look good was to borrow money at nearly zero interest and buy back their stock.  Any CEO or other executive who got a bonus based on stock price could increase demand for their stock and pump its price up.  All of the horrible market distortions of the trillions of dollars in Quantitative Easing flowed all around us. 

You'll hear this latest correction being blamed on capitalism.  Capitalism had nothing to do with this.  It's pure cronyism.  Politicians are making money off this, too, so they're no more interested in stopping it than a lion is interested in stopping the problem of too many fat, slow gazelles. 

So, while acknowledging that trying to time the market is a good way to get destroyed, my guess is it will be relatively flat for a while, until it starts to look like a "new normal".  Then the roller coaster starts again. 

By the way, this is why advisers always said to diversify, and have some money in relatively safe asset classes (bonds, real estate), and some money in cash (I include gold, silver, brass, lead and other hard assets)
A rough observation is that the DJIA bottomed around where it was in October of '13.  At current prices, it has wiped out about 18 months of swapping back and forth.


Tuesday, August 25, 2015

Techy Tuesday - Gears 101

Gears are fundamental components in mechanical systems, but they have many design considerations.  For example, you might not be able to get a gear ratio you want in the type of gear you want to use.  This handy primer to gears showed up in my mail today and I thought it might be something readers could use.

What’s the Difference Between Spur, Helical, Bevel, and Worm Gears?

These are spur gears, probably the most commonly thought of shape.  Except they're not shaped correctly in this picture (from that link).  

Gears are available in practically limitless sizes and shapes from specialty businesses (such as), but machinists should learn to cut them, too.  The shape of a gear tooth isn't really a triangle like the one closest to the front in this picture, and anything with the very asymmetrical tooth shape and spacing of that one in the top rear is custom - if it's anything other than a computer artist's idea.  Spur gears are cut in a mathematical curve called an involute.  The edges of the gear that make contact are curved, not straight like these pictures.   It reduces wear, reduces noise, and improves power transfer.  What's not to like?  
How do you cut a complex shape like this?  Today, you go to one of your favorite tool stores and buy an involute cutter.  They're kind of pricey, but you don't need tons of them.  I'm pretty sure the involute cutters are ground, not cut.

There has to be weeks worth of videos to watch on gear cutting on YouTube.  One method I've seen uses the milling machine with a fourth (rotary) axis.  The process is to put the blank on the fourth axis (indexed or full rotary), sticking out so the gear blank is perpendicular to the table.  Put the cutter on the motor spindle, and position it so it will cut at the point on the gear blank so the flat of the cutter (parallel to the table) is perpendicular to the gear blank - the 9:00 position.  Make a cut; you'll usually have to smoothly feed the work into the cutter as it's spinning until the cut is fully formed; then retract the cutter, index to where the next tooth will be, make the next cut, and so on.  There are really a few basic ways of making gears - this one is pretty simple for the home shop, but won't cut helical gears.   
(source)

There are literally books written on this subject.  Many books.  This is the barest of introductions.  Sound like something you'd like to do? 


Monday, August 24, 2015

Washington Post - Give Blacks More Votes Than Whites

Rarely do you see the SJWs state their demands for reparations quite so openly.  According to the Daily Caller:
“Racial reconciliation is impossible without some kind of broad-based, systemic reparations,” writes Theodore R. Johnson, a former White House fellow and current Ph.D candidate in law and policy at Northeastern University. “But if a pecuniary answer can’t fix the structural disadvantage — and it can’t — what can?”

The answer, Johnson argues, is simple: weighted voting, where black votes count for more than white ones. Specifically, Johnson suggests giving each black person five-thirds of a vote, to reverse the old three-fifths compromise written into the U.S. Constitution.
...
Johnson justifies his argument by saying it’s the only way to solve the “structural disadvantages” faced by blacks.
So only racism will fix racism?  Sounds like he's been studying the Federal Reserve, where they believe the cure to being in too much debt is to borrow more.  

I don't know about you, but my family is recent to this country, arriving in the early 1900s.   I'm only second generation American on both mom's and dad's sides of my family.  Nobody in my ancestry was in this country was here during the years slavery was legal.  But I'd bet just about anything that if you went far enough back, someone in my family was a slave.  Slavery was the norm in the world until the US ended it, and it's still common in much of the Islamic world today. 

So the country that not only ended slavery in its society, but almost tore itself apart in doing so, and is now almost tearing itself apart in the name of ending any hint of any "ism", this country must pay.  And cure racism by using more racism.

I call bullshit.



Sunday, August 23, 2015

Info Bleg

I've been wearing electronic hearing protection for shooting for a few years, now.  These are over the ear protection and they can make it hard to get a good cheek weld. Or, like Mrs. Graybeard, recoil knocks her hearing protection out place on every shot. 

I'd like to get a pair of electronic in-the-ear-canal plugs, but I don't know who's good.  I've seen some at a couple of hundred$, and I'd prefer to keep it in the price range more like this ($50-ish) and less like this ($400-ish).  And for darned sure not like this.  (Yeah, I know.  It's Orvis; what do I expect?)

Anybody have any favorites?  In-the-ear, active electronic hearing protection. 

Today was a maintenance day around the house.  Had to install some upgrades to software in a couple of places, which always seems to take more time than it's supposed to.  Had to do some work around the house, but only about an hour outside.  Miscellaneous junk like that. 
(source)


Saturday, August 22, 2015

I Don't Think It's Over

The 531 point drop in the DJIA yesterday set off a lot of hand-wringing among the chattering classes.  The DJIA is down 10.1% since its May high, meeting the technical definition for a correction.  Barrons points out:
It wasn’t just the Dow that got hammered today. The Nasdaq Composite fell 3.5% to 4,706.04, while the S&P 500 dropped 3.2% to 1,971.10. The small-cap Russell 2000 declined 1.3% to 1,156.79. The S&P 500 is off 7.5% from its all;-time high, while the Nasdaq is off 9.8% and the Russell 2000 is off 10.7%.

This week alone, the S&P 500 lost $1.1 trillion of value. As S&P Dow Jones Indices’ Howard Silverblatt put it: “Ouch.”
You can find any economist you want willing to say this is just a hiccup and it will recover, or that it will get worse.  For my two cents, I don't think it's over.  A 20% correction down to 14630 is not only not out of the question, it could well be the best case scenario, as I will explain.  (I recall telling Mrs. Graybeard we'd see Dow 16,000 by the end of this month, but I don't seem to have written it down anywhere).  In 2014, I posted these words from Seeking Alpha, quoting Andrew Lapthorne of SocGen.
"The number of 1% down days for the S&P 500 in any given year has averaged 27 since 1969; the S&P 500 has seen just sixteen 1% down days over the last 12 months. It has now been 468 days since a market correction of 10% or more, the fourth longest period on record, and, as we show below, the annualized peak to trough loss has only been 5% compared to typical annual drawdown of 15%."
The last time we had a 10% correction was in October 2011, about 1400 days ago.  A 20% correction would be like a reversion to the mean, which some think we're overdue for.  The concept of reversion means the longer something remains an outlier, the more likely it is to revert back to the average.  In this case, it means the longer US stocks go without a meaningful correction, the more statistically likely a meaningful correction becomes.  A 20% correction meets the definition of a bear market and would certainly be meaningful.  It would be bad but nowhere near as bad as it could be. 

In the articles which I've been cautioning about a possible snap back coming this September/October, like the last one, I've been referring to this graphic from my 2014 post.  There's one little difference here: I put a red mark near where we are today.  I say "near" because the May record high was off the top of this chart, and the chart was bad enough to start with!
What this chart is showing is that since the late '90s, the middle of Alan Greenspan's days as Fed Head, the DJIA has been in a diverging wedge pattern: setting higher highs and lower lows.  Twice before, when it hit a new all time high, there was a snap back to a new lower low, and that was in the second year after that previous high.  Back in 2014, I was looking at that pattern and saying the previous all time peak in 2013 will lead to a snap back, probably in September or October of this year.  The target for that snap back (lower line) looked to be 6000.  Dow 6000?  There would be blood in the streets.

Has the new higher high invalidated this; that is, did it just set the snap back further into the future - and predict a lower DJIA of around 5000?  I. Don't. Know.

Notice this doesn't have anything to do with anybody's prophecies, or anything that the extremely atheistic will dismiss as "religious nut job" stuff.  This is pure technical analysis.  Read the indicators.  This doesn't require sheep entrails or any other divination, just pattern recognition, knowledge of the markets and stuff taught in any technical analysis seminar or class.  Reversion to the mean can be a nasty thing; some say that's what Greece's problems are.  The problem is that it's the least nasty of these possibilities. 


Friday, August 21, 2015

About That Daytona Bar/Gun Shop Combination

While wasting time on my iPad yesterday, the Bing App's news page had a link to a story about a gun range in Daytona that is going to serve alcohol.  I'm not going to link to any of the stories, because they were all on liberal rag websites like HuffPo and featured absolutely predictable headlines emphasizing it as a stupid decision.  You can go look, if you want.

Being afflicted with the "curse of reason", I wondered what the real story was.  So I spent a few minutes to find a local newspaper with the real story.  The business is a range with added restaurant, which seems to be an idea that's becoming popular: we have one of those that just opened here in town.  The owner wants an alcohol license to sell drinks along with their food.  I have to say, I don't think you could house a range and restaurant/bar any more safely than they're doing it:
Customers could bring their own guns or rent one on site, the business partners said. If a restaurant customer orders an alcoholic beverage, his or her driver's license will be scanned by staff along with the licenses of everyone else at their table.

If the person drinking wanted to go to the gun range after eating, his or her license would be scanned again and the customer would be flagged as someone blocked from shooting because of the alcohol sale.
Since I've joined the gun club, I haven't been to an indoor "pay range" very often, but being asked for to show a driver's license isn't uncommon, so that doesn't seem like it's a new and highly oppressive.  They add several additional steps to this concept.  "He said he'll keep a watch list for customers who could be trouble and he'll contact police when necessary. Perkinson said he'll also have access to a Florida Department of Law Enforcement database."  It certainly seems like he addressed any reasonable objections.  I have to say the watch list idea is a little offensive to me, but I'm not naive enough to think other ranges don't do that. 

It seems like this new system is pretty solid.  Seems like it will keep people going from drinking to shooting, but if you visited the range and wanted to stop for a snack and a brew on the way out; no problem. 

Now I would do my best to never need to shoot after a few drinks, because it frankly doesn't seem like I'd be at my best.  Chances are that's a pretty easy idea to get agreement on. But this sure doesn't seem like a big deal.  Any range could have someone walk in that was just having a few beers before coming to the range.  You're less likely to deal with someone being impaired at this one. 
(source)
As usual, the liberal anti-gun press is full of crap on this issue.  Too anxious to condemn rather than spend 2 minutes and really learn the story.   That might require thought.


Thursday, August 20, 2015

World's Largest Smugness Generator

I've backed a project or two on Kickstarter, so I get their weekly emails on Thursdays.  Today's email floored me with two incredible smugness generators aimed at the greenies.  The biggest is a Steam Ring generator for the world's cleanest power plant.   The text reads:
By 2017 the citizens of Copenhagen will not only be able to ski down the cleanest power plant in the world - their perceptions of what a power plant can be will be challenged by an art piece that raises awareness of our carbon emissions. The world’s first steam ring generator will puff out a steam ring for every ton of CO2 burned in the plant.
Wait... whut?  "Every ton of CO2 burned in the plant"?  CO2 doesn't burn.  If they figured out a way to burn CO2, I have to confess that would be pretty darned remarkable.

The whole thing blows my mind.  They're going to generate steam to blow rings?  Steam is valuable stuff, in the industrial sense.  It sure isn't lying around doing nothing; it shouldn't be waste.  It's not waste heat from the plant because the Kickstarter page is to design the steam ring generator itself.  Some sort of energy has to be used to heat water to generate steam; are they going to burn fossil fuels?  No,.. wait.  It says something about that plant being the "cleanest power plant in the world", so that must mean it's going to be nuclear.  A nuclear powered steam generator for ... an aesthetic project? 

When something makes that little sense, I figure its purpose in life is to be a smugness generator, so the people around the power plant can feel just so much better than those other people.  They're using clean energy and are showing you just how much cleaner they are than you.  How much is smugness worth to you? 
Artist's conception - from the Kickstarter project page.


Wednesday, August 19, 2015

Any Other Taurus Millennium Owners Here?

By now, you've probably seen the information about the liability suit Taurus lost affecting 9 different models of their "PT" series Millennium guns.  Bob Owens at Bearing Arms had it on July 28

If I may clip text out and summarize it more,
Forjas Taurus SA has agreed to a $39 million settlement in a class action lawsuit alleging some of the company’s most popular semi-automatic handguns can discharge when dropped and have a defective safety that allows the gun to fire even when it’s engaged.

According to court documents filed May 15 in a U.S. District Court in Florida, the company has agreed to pay up to $30 million to owners of nine separate handgun models who opt to send their pistols back, with owners receiving anywhere from $150 to $200 for their pistols depending on how many choose that option.

“The Taurus Companies do not admit liability in connection with the settlement,” the official told Grand View Outdoors. “If anyone has one of these pistols, we are happy to inspect it under the warranty and suggest that they send it to us so that we can do so.” [NOTE: Taurus has apparently extended the warranty to any age gun, and is happy to do the work on a gun I'm not the original owner of - SiG]
The suit covers:
  • PT-111 Millennium
  • PT-132 Millennium
  • PT-138 Millennium
  • PT-140 Millennium
  • PT-145 Millennium
  • PT-745 Millennium
  • PT-609
  • PT-640
  • PT-24/7
I own a PT-145 Millennium Pro, the .45ACP version, which I bought in a FTF sale back in '11.  Of course, I've never experienced the failure, but I've never dropped it.  In general, I think recalls tend to be done when defects are relatively rare.  Still, I did the online customer service chat with them and inadvertently referred to this as a recall, asking how I could tell if my model was affected by the recall.  I was informed there was no recall, but they would look it over to make sure it was OK.  They emailed me a FedEx mailer to return it.  If they're offering to take a look at it, I'm game.

If you're waiting to be contacted, I didn't get the impression they were going to do that.  At least not yet.  Maybe it was just the Instant Messenger-style chat I had, where it's easy to lose nuance in conversation, but I didn't get that impression.  If you own one and want to be involved, I'd contact them through customer service.  I suspect it will take a while to work through what has been estimated to be 100,000 guns. 

The way I read that news article (essentially, Bob Owens copying Grand View Outdoors entirely), they will either repair or offer to buy your old gun from you.  Not sure which way I'd go.  There's nothing wrong with the Taurus.  On the other hand, if I took the money, I could take my "refund", add some cash and buy something better!

My Taurus, left with my XD subcompact in 9mm, from the post when I got the Taurus. 


Tuesday, August 18, 2015

Techy Tuesday - Candidate for Dad of the Year 2015

Last March I saw an article on the simulated moon launch console a dad made for his kid.  Most impressive Dad of 2014.

It's a new year, though (and mostly gone, too) but I think I have found 2015's Dad of the Year.  Check out what he built for his 1 year old Princess:
If you remember the last of the original Star Wars trilogy, the one with the Ewoks, formally known as Return of the Jedi, you'll recognize the speeder bike instantly.

A young dad named Tez Gelmir designed and built this and posted instructions on Instructables.  Through a combination of plywood, hardware store supplies, 3D printing, woodworking and electronics hardware, he brought it to life.  
I see the overall design as three main parts, firstly the speeder bike its self (the hull etc); secondly the rocker arms/frame and thirdly the electronics.
  • My first consideration was strength and stability for the safety of the little ones, as though this project is for my 1y/o, I also have a 5y/o who no doubt will want a turn. The need to be strong enough to handle a beating led me to the first part of my design, a rigid backbone with a solid plywood top for the seat platform. This gave me a good foundation for things like the handles and outrigger to mount from, and somewhere to fix the 3D printed hull shell.
  • The rocker arms were the source of great deliberation (as you can tell by the multiple sketches above) as the effects of the weight of the speeder bike and a toddler over a guessed center of gravity was quite a challenge. My solution was to use the two center rocker arms to clamp either side of the speeder bike's timber backbone but still have clearance to slide the rockers back and forth 50mm or so to find the center of balance. This design also has scope to easily replace the rocker arms with maybe a (motorized?) rolling mobile base..... I'm just thinking out load.... stay tuned....
  • In terms of the electronics I am not going to go into too much detail as I feel it is a little out of the scope of this instructable and I would recommend doing an Arduino setup (where as I used bits and pieces I had laying around).I wanted to end up with an LED blaster canon with the sound of the blaster and another button on the control panel that spun the turbine on the power cell. My initial idea was to use the guts from a toy blaster but it turned out the circuitry in the toy blasters were very fragile and I managed to damage the sound chip while assembling. So I ended up using a simple 555 timer flashing LED for the blaster and a sound recording/playback module I had laying around from another project. The power cell turbine is a simple circuit and I just used a small DC motor I found from a car windscreen washer pump.
To the hardcore techies out there: I realize this is a little low/old tech for these weekly rambles into whatever cool tech industry news crosses my desk, but (1) it's a good example of combining lots of home-level tech into something useful and (2) it's cool.  "Straight up Maker" in my mind.

Go check out his Instructables page.  He's got a video, too.



Monday, August 17, 2015

Why Does the Number 7 Keep Showing Up??

What's so important about the number 7?  Why does it keep coming up? This is the question posed by Peter Degraaf in a commentary on Kitco, posted last Thursday.
Reaching back to forty nine years ago (7 x 7), in 1966 the USA experienced a ‘credit crunch’.   In August of that year the US bond market suffered a serious ‘liquidity crisis’.

Seven years later in 1973, the world experienced an ‘oil embargo’ followed by a dramatic rise in the price of oil. There were long lines of cars at gas stations.

Move forward by 7 years and in 1980 Wall Street avoided the collapse of some of its banks and brokerage houses by forcing the Hunt Brothers to stop accumulating silver.

Another seven years passed and in the fall of 1987 stock markets crashed around the world. ‘Black Monday’ of October 1987 saw the Dow lose 22% in one day.

Then seven years later, in 1994, the bond markets crashed.

Seven years passed and in 2001 Wall Street was closed for 5 days due to the militant Islamists attack on the World Trade Center in New York.  The DOW lost 684 points on Sept 17th 2001. Banks received billions of dollars of newly created money from the Federal Reserve, to keep the system afloat.

The seven year cycle moved on and in 2008 we saw the Subprime Housing Market Collapse, along with the overnight bankruptcy of Lehman Brothers. The Lehman investment bank fell so fast, none of the employees had any idea their jobs were disappearing. The DOW lost 777 points on Sept 29th 2008. The banking system almost collapsed, (banks refused to cash checks except after a three day ‘hold’, for fear that the issuing bank might fail), but the US FED saved the day, by massive injections of newly created cash, not only into US banks, but also some Canadian and foreign banks. The debt problem was ‘solved’ with more debt!
On the 7th straight of 7 year cycles, the Dow lost 777 points??  I think if I was into numerology I'd be saying, "you've got to be kidding me!" and "are you trying for style points?"

The point of this isn't the previous 7 financial problems; the point is that it's 7 years since 2008 and conditions aren't looking very rosy.  For example, Bayou Renaissance Man and others linked to the story that "The Doomsday Clock for global market crash strikes one minute to midnight..." in the Telegraph.  Of course, I've written an acre of words on this subject.  I know I've written about expecting a crash around the end of this September recently.  I thought I said it more forcefully than this piece in May of 2014.  Looking at the diverging wedge pattern in the DJIA index, I said:   
You can see that there is typically a very large pull back within these two year periods.  That will be in 2014 to 2015; for what it's worth, many big crashes tend to come in the fall, around the end of the Fed.Gov fiscal year (September 30).
I'll note that the same diverging wedge appeared in the Russel 2000 index.  Diverging wedges are generally not good. 

As Degraaf points out, here we are in 2015, 7 years later, and the problems of 2008, despite (or because of ) Dodd-Frank, weren't solved, they were papered over with money printed by the Federal Reserve.
"I told them the real 2014 deficit was $5 trillion, not the $500 billion or $300 billion or whatever it was announced to be this year. Almost all the liabilities of the government are being kept off the books by bogus accounting. The government is 58% underfinanced. Social Security is 33% underfinanced. So, the entire government enterprise is in worse fiscal shape than Social Security is, but they are both in terrible shape. [On future prospects] If you take all the expenditures that the government is expected to make, as projected by the Congressional Budget Office (CBO), all the spending on defense, repairing the roads, paying for the Supreme Court Justice salaries, Social Security, Medicare, Medicaid, welfare, everything, and take all those expenditures into the future, and compare that to all the taxes that are projected to come in, then the difference is $210 trillion. That is the fiscal gap. That is our true debt."
Lawrence Kotlikoff a professor of Economics at Boston University, in testimony before the US Senate,  [emphasis in the original - SiG]
As we've said here many times, the stock market has been running entirely on the monetary creation of the worlds' central banks.  We've also talked about how creating debt to get out of debt can't work in the long term.  John Maynard Keynes once famously said, "The long run is a misleading guide to current affairs. In the long run we are all dead", as a counter to the argument that his policies would lead to destruction in the long run.  A lot of people are concerned it may now be the end of the road.  It may be "the long run".  
 
This chart is a little tough to read, but it's the DJIA values indexed with 1/31/2005 chosen at 100%, with other lines drawn on it: five and three year moving averages in red and yellow (red-ish, yellow-ish) and a black line drawn on it as an envelope to add the author's interpretation of the general shape of the pattern.  This is from another excellent piece on Elliott Wave analysis, by Jay Taylor of MiningStocks.com, which also points to likely downturns in the next several weeks. 

It really seems like a time to be preparing for Bad Things.  Prepare for collision.   As Taylor concludes that second piece,
Of immediate concern is how do we prepare for the cataclysm that is to come, despite all hopes and prayers that it won’t.
We can always look at a pattern like this, of seven straight seven year cycles with Bad Things happening and say, "Past performance is no guarantee of future results".  On the other hand if seven times in a row I walked out my front door something painful happened, by the eighth time, I'd be looking out for it.


Sunday, August 16, 2015

The Least Secure Voting Machines in the US

And possibly the world.

H/T to Yahoo! Tech for the story.  As usual, the problem is government.  In particular, after the "Hanging Chad" election in 2000, the congress passed the Help America Vote Act of 2002. Among other things, the Act banned punched-card and mechanical-lever voting machines.  This led to the inevitable gold rush to suck up that gubmint money by producing voting machines.  And just as the War on Some Drugs money has always been spent so wisely; like the Quadro Tracker, the $1000 empty box with a 'diving rod' on it, so was spent the Help America Vote money.  As I've said before, the Fed.Gov dribbles money like a toddler dripping turds out of its Pampers, and this always attracts companies ready to suck up the gubmint droppings.
Outside of Virginia, only a few counties in Pennsylvania and Mississippi adopted Winvote (from the now-defunct Frisco, Tex.-based Advanced Voting Systems). But Winvote terminals had much in common with other electronic voting machines of that time: They were built to win government contracts. And they were based on general-purpose Windows platforms that made them needlessly complex and vulnerable to exploits.
Winvote fulfilled its purpose, to suck up money, and quite possibly delivered the least secure systems ever.  
Jeremy Epstein, a security scientist with SRI International, has spent years investigating the weaknesses of these and other electronic voting systems. But even he didn’t know how bad Winvote terminals were until this past April

That’s when the Virginia Information Technologies Agency condemned the security of these machines and banned them from the commonwealth. Their only remaining use was, literally, as a lesson to others.
Switching to Epstein's summary for a moment:
If an election was held using the AVS WinVote, and it wasn’t hacked, it was only because no one tried. The vulnerabilities were so severe, and so trivial to exploit, that anyone with even a modicum of training could have succeeded. They didn’t need to be in the polling place – within a few hundred feet (e.g., in the parking lot) is easy, and within a half mile with a rudimentary antenna built using a Pringles can. Further, there are no logs or other records that would indicate if such a thing ever happened, so if an election was hacked any time in the past, we will never know.
How bad was it?  How about the shiny key to lock the machine?  Epstein reports “All the keys are the same for every Winvote that’s ever been made, because that way it’s easier,”
• Winvote’s machine runs a version of Windows XP that hasn’t had patches installed since 2004 — four years before AVS deservedly went out of business.
• Its wireless network is “safeguarded” with insecure WEP encryption — and the password is abcde. (and that was unchangeable)
• The Windows admin password is (no, I’m not making this up) admin. (and that seemed unchangeable as well)
• Windows file-sharing is left on.
• The machine tracks votes using an obsolete version of Microsoft Access, in which the unencrypted database file is “protected” with a five-character password that a security tool cracked in seconds. (That password — shoup — apparently refers to a voting-machine company with a history of criminal indictments.)
• The system doesn’t log changes to that file.
• You can’t turn off the WiFi; if you remove the wireless card, the device won’t boot.
As the saying goes, security wasn't an afterthought; it was never thought of at all.     

It's hard to say just what the worst part of this situation is, but possibly it's (as mentioned a few paragraphs ago), "if an election was hacked any time in the past, we will never know."  Possibly the worst part is that this might not be unique to Winvote machines at all.  In fact, Diebold wasn't much better

Technology moves quickly, as I don't have to tell you.  Governments don't - they're the second slowest institutions to change in the world.  We've got to get smarter about electronic voting machines.  The county I'm in has you enter votes on a sheet of paper and tallies them optically, the way standardized tests are graded.  Those are only "hacker proof" if they're off a network and handled carefully.  But, just as they say the hackers are winning attacks on the financial institutions because there's so much money at stake, the amount of money and power at stake here dwarfs anything in the banks. 

(A Winvote key and administrator's card)


Saturday, August 15, 2015

You, Too, Can Own the NSA Playset.

Well, an open source version, not the version the NSA spent millions or billions of taxpayer money to get.  arstechnica has the story.
When Der Spiegel and Jacob Appelbaum published leaked pages of the National Security Agency's ANT Catalog—the collection of tools and software created for NSA's Tailored Access Operations (TAO) division—it triggered shock, awe, and a range of other emotions around the world. Among some hardware hackers and security researchers, it triggered something else, too—a desire to replicate the capabilities of TAO's toolbox to conduct research on how the same approaches might be used by other adversaries.

In less than 18 months since the catalog's leak, the NSA Playset project has done just that. The collection boasts over a dozen devices that put the power of the NSA's TAO into the hands of researchers. Project creator Michael Ossmann—a security researcher, radio frequency hardware engineer, and founder of Great Scott Gadgets—detailed the tools at a presentation during the Black Hat conference in Las Vegas last week, and he talked with Ars more about it this past weekend at DEF CON 23.
This is kind of advanced hardware/software hacking, so I'm guessing most of my readers who would feel comfortable diving into this stuff have heard of this already, but maybe not.  (Borepatch?  Dr. Jim?  You there?)   You'll note that "Project creator Michael Ossmann " is said to be a radio frequency hardware engineer.  That, of course, is what I do, although I've never worked in this area and I'll be the first to admit I'm weak at embedded software.  Several projects seem to focus on a System On a Chip (SOC) from Texas Instruments called the C1111.  For example the project "Turnipschool" embeds one of these TI chips onto what appears to be (or could be made to appear to be) a USB cable.  Instant bugging of any communication of the USB bus - as well as injecting commands into the USB cable.   Details for doing it yourself are at the project's webpage.


The same TI SOC is used in other places; as usual, once you learn how to use a device, people tend to come up with different uses for it.  For example, Ossmann turned the out-of-production Mattel IM-Me "Girl-Tech" toy into a spectrum analyzer.  Samy Kamkar, of Applied Hacking, turned one into a garage door opener, which will open every garage door that uses the standard radio keys.  He explains in a video on that page how remarkably non-secure they are and how easy it is to open every garage door that uses that protocol. 

There might well be some interesting and useful toys in their toybox.  Check it out.


Friday, August 14, 2015

John Kerry Threatens Us If We Don't Accept His Iran Deal

As little as I think of this administration, they always find ways to make a new low.  This week Secretary of State John Kerry threatened US - concerned citizens - with what would be economic disaster and quite possibly thermonuclear war if we don't acquiesce and beg our senators to approve his deal with Iran.   Video here from the Washington Free Beacon and the part I'm referring to is at 1:00 or so.
“That is a recipe, very quickly, my friends, business people here, for the American dollar to cease to be the reserve currency of the world, which is already bubbling out there,” Kerry said.
Just in case I'm writing poorly, let me be extra-tedious in explaining what's going on here.  Obama and his minions, or whomever the puppet master is, decided we must negotiate with Iran.  I don't know why we must, but they say We Must Negotiate.  And by "with Iran", that means the current hard line, anti-American, anti-Western regime.  Furthermore, Obama said that very early in his career, before he was elected president.  Then, in the "Green Revolution" of 2009, when there was a genuine chance to help pro-American students and others overthrow the ayatollahs, and change the regime Obama blithely let the regime kill the protesters in the street.  Years later, the Obamanoids finally get into "negotiation" with Iran.  By all accounts they bent over backwards and gave away the farm.  And now, because we are genuinely concerned that this is a bad deal, when we didn't necessarily even want any deal with the ayatollahs in the first place, Kerry and these guys, who work for us, are telling us that if we reject the deal we're the problem.  We're going to cause the economic world to collapse.  Are you familiar with the word chutzpah? 

Zerohedge has the story, with an angle nobody else seems to have.  Almost one year ago to the day, August 27, 2014, Obama's former Chief Economic Advisor, Jared Bernstein, published an op ed in the New York Times declaring that it was time to stop being the world's reserve currency!   They want  the dollar to be "Dethroned".  They don't want to be the world's reserve currency.

Assume for a moment this guy knows what he's talking about and "reserve status is a curse";  what's the other side?  Why should we care if the US is the world's reserve currency?   What "reserve" means is that other nations have a central bank that keeps US dollars instead of some other reserve.  In the days when all nations were on a gold standard, they kept gold.  There are trillions of these dollars out there.  I don't know an accurate number but I've read around $3 T and there's reason to believe that the unofficial and black markets account for more than that.  If another currency becomes the reserve, those countries don't need those dollars, so they go into circulation.  That puts those 3 Trillion into the pool with another $1 Trillion in circulation in the US, diluting the value of those dollars to 1/4.  If there are four times as many dollars in circulation, each one will be worth 1/4 of what it was before the decision.  After that, more disruptions would follow.  Currently the world market for oil is priced in dollars.  When that stops being the case, the use for dollars to buy oil goes away and those dollars flood back.  As other currencies shift in value, our debt payments would inevitably change, most likely for the worse.  China's recent devaluation of their yuan has this effect. 

David Buckner, adjunct economics professor at Columbia University (yeah, they sometimes hire sane profs!) was interviewed by Glenn Beck yesterday about this.  It's a good interview and (as far as I can see) not behind a paywall.  You can listen.  
(A scene from the 2009 Green Revolution - VOA)




Wednesday, August 12, 2015

On That Mail Server Problem

Another story I haven't paid that much attention to is the Hildebeest's mail server story, because I can't believe that there's any chance any member of the highly inbred ruling class could possibly go to jail for a crime they committed.  But H/T to Karl Denninger for pointing out something:
There are reports that out of the few (something like 40!) emails examined so far two were not only classified, they were TS/SCI at the time they were sent -- that is, (literally) "above Top Secret."
Or to quote from the Fox News story he linked to:
The flurry of activity came after Charles McCullough, the inspector general, notified senior members of Congress that two of four retroactively classified emails found on Clinton's server were deemed "Top Secret, Sensitive Compartmented Information" — a rating that is the government's highest classifications. [Note: the word is usually given as "Compartmentalized" - SiG]
Like most engineers in this country, I've spent some time in the world of classified information, and have held clearances like this.  This is a Big Deal.  Is it bigger than having getting the US Ambassador to Libya killed, probably over running guns to Al Qaeda?  The first US Ambassador killed in over 30 years?   In my book, it could be, because TS/SCI information can potentially cover "sources and methods" - the kind of information that can compromise many people and shut down intelligence operations completely.  On the other hand, if Hillary is willing to off an Ambassador, what respect do you think a mere field agent would get?  (here, I'm assuming it was her)

As always with the ruling class, if one of us "country class" people did this, we'd be handcuffed and perp walked faster than you can say, "Top Secret, Sensitive Compartmentalized Information".  But as I said up top, I just can't imagine that any member of the ruling class, let alone a Clinton, would ever have to pay penance for any crime they committed that would get the rest of us imprisoned for life. 



Tuesday, August 11, 2015

Techy Tuesday - The Lexus Hoverboard

To a generation of young engineers who grew up watching Back to the Future II  with Michael J. Fox as Marty McFly riding his hoverboard around town, it seems like it had to happen that some group got together and succeeding in inventing one.  The video:

The design depends on getting pucks of high temperature ceramic superconductors cold enough to levitate over a metal track so the interaction of superconducting electrons and magnetic fields forces the hoverboard to levitate off the track.  Liquid nitrogen (usually called LN2) isn't terribly expensive; the last time I bought some it was a bit less than the price of regular gasoline, but I'll admit I haven't checked.  In itself, the price of some LN2 isn't going to hinder this as much as the special track would, but I can see it being useful for amusement park fun rides.  I bet they could sell a lot of rides for the price of a gallon of regular gas.  It's not something you'll be able to ride anywhere like a skateboard, as Michael J Fox did in that movie.

I swear I've seen a couple of groups saying they've gotten them running, including some with websites implying they're just about there on the market, but they don't really seem to be.  This Lexus board appears to be quite close to commercially feasible.  Lexus seems to be motivated by using this as a poster child for how innovative they are.  Works for me!



Monday, August 10, 2015

The Coming Crisis In State and Local Government Finances

There seems to be a common thought that since states and local governments are required to balance their budgets, that they're relatively fiscally sound.  Folks seem to think the states should be relatively unaffected by the coming collapse of the dollar.  A little thought should dispel that idea: everyone knows that the feds essentially blackmail the states by handing over money for the Feds' pet projects, as long as the states/locals do something else the Feds want; this helps finance the states' expenses.  Unfortunately, it's worse than that.

Charles Hugh Smith "Of Two Minds" blog takes a look at the coming crisis in state and local government finances.  As he puts it, "Strangely enough, every easily foreseeable financial crisis is presented in the mainstream media as one that “nobody saw coming.” No doubt the crisis visible in these three charts will also fall into the “nobody saw it coming” category." The first chart may tell the whole story, or at least most of it:
State and local government debt, excluding employee retirement funds (which everyone was talking about a few years ago) and a few other line items, has gone up 150% since 2000.  Nominal GDP rose about 77% since 2000. So state and local debt rose at double the rate of GDP. That is the definition of an unsustainable trend.

At some point, borrowing becomes impossible (or prohibitively expensive) and the only trick left is to raise some taxes.  Unfortunately, that well is empty, too.  Taxes have gone up at essentially the rate of GDP growth: 75% instead of 77%. 
Even worse, the Expenses have gone up more than the taxes, 82% vs. 75%, making the situation worse every day.  When the housing bubble popped in '07-'08, that reduced property tax revenues, squeezing the local governments harder.  The real problem though is the decrease in household income to pay those taxes; the taxpayers are getting squeezed. 
As Charles Hugh Smith puts it:
Wages and salaries are barely keeping up with inflation, real household incomes are down 8.5% since 2000 and state and local government taxes and spending are rising at twice the rate of inflation--where does this lead to?

1. The bond market may choke if state and local governments try to "borrow our way to prosperity" as they did in the 2000s.

2. If state and local taxes keep soaring while wages stagnate and household income declines, households will have less cash to spend on consumption.

3. Declining consumer spending = recession.

4. In recessions, sales and income taxes decline as households spending drops. This will crimp state and local tax revenues.

5. This sets up an unvirtuous cycle: state and local governments will have to raise taxes to maintain their trend of higher spending. Higher taxes reduce household spending, which reduces income and sales tax revenues. In response, state and local governments raise taxes again. This further suppresses disposable income and consumption. In other words, raising taxes offers diminishing returns.

At some point, local government revenues will decline despite tax increases and the bond market will raise the premium on local government debt in response to the rising risks.

When borrowing become prohibitive (or impossible) and raising taxes no longer generates more revenues, state and local governments will have to cut expenditures. Given their many contractual obligations, these cuts will slice very quickly into sinews and bone.
State and local governments have to balance budgets, but they're not all in strong financial shape.  What we have here is another one of those situations that just can't keep going the way that it has been going.  Continuing to spend more than income is the very definition of unsustainable.  And we all know things that can't go on won't go on. 



Sunday, August 9, 2015

Read of the Day

On February 3rd of this year, ISIS released a video of their members executing Jordanian pilot Mu’ath al-Kaseasbeh by burning him alive in a cage.  The world expressed outrage and disgust and then returned to being "concerned" and writing sternly worded letters.  In response, ISIS burned three Iraqis to death.

Sultan Knish points out the Muslims have been burning Jews alive as a matter of policy, and if the west does anything at all it's put pressure on Israel to release the terrorists that do it.  A sample of the stories he tells: 
The Moses family was driving on a pre-holiday shopping trip before Passover when their car was struck by a Muslim firebomb. Ofra Moses, who was five-months pregnant, wasn’t able to get her seatbelt open and burned to death. It took her 5-year-old son Tal another three months to die of his burns.

His 8-year-old sister Adi suffered severe burns as her father rolled her burning body in the sand to put out the flames. “I looked in the direction of our car and watched as my mother burned in front of my eyes,” she recalls.

She still remembers lying bandaged while her little brother screamed in pain in the next room.

Mohammad Daoud, the Muslim terrorist who did this to the family, was given two life sentences and an additional 72 years. But when the PLO demanded his release, Obama and Kerry forced Israel to comply.
This is accepted practice in Islam.  There are fire bombing attacks all the time in Israel. 

The problem is Islam. Go read


I'm Not Really Watching the Circus

I've paid very little attention to the circus going on in the Stupid Party.  I have very little use for the Trump circus, or the various sideshows in the 16 ring circus, but if I'm stuck at my desk for a long period of time, I will listen to talk radio.  That means I hear more of it by osmosis than by going and paying attention to it.  I went into this year knowing a bit about all of them, and thinking I'd probably vote for Ted Cruz or Rand Paul, but either way I had a lot of time to think about it.

Through all of the stuff that's been working its way into my subconscious, one candidate has stood out.  Of course I think Cruz and Paul are good - I expected them to be good.  The one who has snuck into my mind as surprisingly good, and better than I thought they'd be is Carly Fiorina.

Simply, I haven't heard a thing that she has said that hasn't sounded good.  Intelligent, economically wise, advocating points I agree with all the time.  For example, listen to this couple of interview questions on this CNN video posted to the Daily Caller.  Jake Tapper seems incapable of processing the straightforward spoken English; Carly has to clarify what I thought was perfectly understandable.  She recognizes that companies may want to offer more maternity leave as a benefit, to make the company more attractive to applicants.  I've heard her rail against over-regulation, and how much that costs businesses; that's a subject I almost preach about all the time. 
    
I don't know much about her and with six months (?) until our primary, I'm not suggesting I'd vote for her.  All I really know is that Carly was the CEO of Hewlett Packard when the company broke up.  I don't know much about the company and what it was going through.  I had an officemate about 10 years ago who had worked for HP at the time and he didn't think much of her, but I can't say that means anything.  (For the record, if the CEO of a place I worked for was running and I told you I didn't think much of him, you'd be 100% correct to wonder if I knew anything about anything).  Her not being a politician is good.  Being someone who worked in the private sector is really good.  Having real world business experience is the complete opposite of the just about everyone in the current administration and I'm thinking anything that's the complete opposite of the current clowns would be a good thing.  Of the major non-politicians in this race, Carly, Dr. Ben Carson (whose biography we bought in the late '90s), and Trump, I think I'd go with Carly without any need for long, deep analysis. 
(source)


Saturday, August 8, 2015

Is The Next Bull Market in Precious Metals Starting?

It's an old line that I've quoted often enough: the way to prosper in a bull market is to buy when there's blood in the streets; when the prices in the bear market that precedes the bull are close to their lowest levels.  It's a time when people at their most pessimistic about investing in that market.  That leads to the other pithy observation that every bull market starts when things are at their absolute worst, just as every wealth-destroying bear market starts when times are good and everyone is at their most optimistic.

In light of that, you might be interested to know that the gold and silver mining companies' stocks have been getting hammered for years.  Precious metals miners, as measured by the Market Vectors Gold Miner’s ETF, are down by about 70% over the last five years.  Over that period, gold itself is down about 8%.  There was a run up and loss of over 70%, but measured at the specific endpoints, the loss was the more moderate 8%.  The miners are feeling that 70% loss.  At the recent Sprott-Stansbury Natural Resource Symposium, the air was thick with gloom and doom sentiments from the miners. The sentiment that this is the worst the mining sector has looked in thirty years was in the air.
Mining execs say banks won’t return their calls. Promoters say they are thinking about taking their firms into cloud computing, video games, or Chapter 11.

“What do you know about cloud computing?” we ask.

“Nothing. But I know gold mining. And I know it’s no place to make money.”
The Washington Post ran an article under the headline "Gold is Doomed"; the Wall Street Journal said gold is nothing more than a "pet rock", and Bloomberg Financial said "gold is a textbook short".
Sounds like blood in the streets to me.

It's important to note that stock prices for the mining companies aren't very well correlated to the prices of the metals because their prices are determined by completely different mechanisms.  Mining companies are priced according to their costs, the effectiveness of their management, their P/E and other metrics familiar to stock traders.  Gold's price is set by the commodity exchanges and manipulators.  Miners need to spend to get the gold out of the ground.  Once it's out of the ground and off to refining, their work is essentially over - aside from exploring and finding new deposits.  In that sense, if you wanted to invest in mining stocks and also physical gold, you would go into the mining companies first.  It's the nature of the mining sector that it works slowly.  The rule of thumb is that it takes ten years from the time a deposit is identified until poured gold bars are hitting the streets.  The delay is worse in developed countries proportional to the amount of regulations they work under and the required number of tons of paperwork that need to be completed before mining can begin.

An apparent paradox here is that only big companies can afford to wait 10 years to get the mine production, but big companies are very rarely risk-takers so they wouldn't be exploring.  Conversely, a small company can take the risks of exploration but they don't have the money to wait 10 years to start making money off their discovery.  The way the paradox is resolved is that the small companies (called the juniors) do the exploration and early development.  If they don't find anything, they wink out of existence; if they do find a good deposit and get close to producing metal, they get bought up by one of the big companies.  
Silver has also been hit hard.  Silver peaked in early 2011 at $48.48;  this week it closed at $14.81, down 69% from its peak.  It's down 7.1% so far this year, but strangely, silver production was up in 2014 even with prices going down.  Has it reached bottom?  Has the next silver bull market already started?
  • Like gold, silver fell as the U.S. dollar rose on the back of expectations that the Fed will hike rates.
  • World demand for physical silver fell 4% in 2014, largely due to a record 19.5% drop in investment demand.
  • Silver exchange-traded funds (ETFs) did not see big liquidations in 2014. ETF holdings grew by 1.4 million ounces and recorded their highest year-end level at 636 million ounces.
So why did miners produce more silver in the face of declining prices?  In this case, it's because they weren't silver mines.  About 75% of the silver mined is produced as a byproduct in other types of mines: primarily gold, copper, lead and zinc.  Mines that are primarily silver producers actually did cut some operations, especially the most expensive deposits to mine, and did other things to improve their efficiencies. 
There was a big drop in investment demand last year: 19.5%. This tells us that most short-term investors and sellers have left the market. We don’t know any “silver bugs” who were selling. That means that today’s bullion is in stronger hands. And that means that any new buying will have a strong impact on prices.
Silver bugs are likely to be buying and holding it as insurance; a "safe haven".  "If you can't hold it in your hand and you can't defend it, you don't own it" - right?  So is there any way to get that 19.5% of demand back this year?  Laurynas Vegys, writing at Bonner and Partners explains:
The Silver Institute expects more silver demand from investors this year. They say that the first half of 2015 sales of silver bars were the fifth highest on record.

Photovoltaics (PV) is another source of silver demand that many analysts expect to rise in 2015 and beyond. Global PV demand is set to increase by 30% in 2015, according to IHS analysts. China alone has plans to install 17 gigawatts of solar capacity by the end of the year.

The solar industry consumes a small amount of silver compared to jewelry and other electronics. Yet, if PV demand delivers in 2015, it will become the third-largest source of fabrication demand for silver.

Wild card: Tesla plans to put batteries big enough to power a house in every home. What happens if that takes root is anyone’s guess… but it will be big. Really big. And the impact on demand for silver would be just as huge.
Are the metals due to start back up this year?  I don't have crystal ball and I don't do well on the timing of predictions, but I see things in their favor.   The Fed is going to have start raising interest rates at some point.  The dollar shouldn't be as strong as it is (what I call "the least disgusting girl at the dance" theory).  Counter to that, the world economy is looking shaky again.  China's stock market is a mess, most investment houses don't believe the official government economic growth numbers that China issues any more (wise with all government numbers).  The scenario Jim Rickards talks about of global bank holidays which I covered in early May seems to be getting more likely; at least beyond "single digit percent probability".  During periods of uncertainty, people like the "safe haven assets" like precious metals.  They've been the fall back for a few thousand years.  It's believable they will be again.