"No Easy Day" - behind the hype

My copy of "No Easy Day" by former SEAL "Mark Owen" arrived yesterday. I was very curious to know exactly what he'd been saying and why all the controversy, so spent the evening working through the book.

First of all, it's a good read. I'm assuming that Owen's co-author Kevin Maurer did the first-pass editing and structuring from Owen's account, but he did a good job. It reads very well, short on verbiage and striking the right balance between detail and action. The book doesn't touch much on Owen's initial SEAL training and operations; it's his time in DEVGRU (Naval Special Warfare Development Group aka "SEAL Team Six") that takes up most of the book. It's not even ops-ops-ops; a few ops such as the Maersk Alabama hijacking and some strikes in Iraq and Afghanistan are covered, but a good portion of the book simply talks about daily life as a SEAL, the camaraderie, the nitty-gritty of prepping for deployments and managing the (tiny) amount of time at home or with family.

There was inevitable concern in the Spec-ops community about classified operational and training information leaking from a book like this that was not explicitly reviewed and censored by the Pentagon. I think these concerns are overblown. The information that was new to me was, in the main, not technical and not detailed. An example is that he refutes the common perception that SEALs assault in a wham-bam-gotcha style; rather, it's relatively slow and quiet, aiming to let the enemy show themselves. There's no technical information about the Abbottabad raid itself that I hadn't seen from leaks before. Indeed, Owen makes the point that within a couple of days of the raid everyone in the Pentagon or administration who had information had leaked it.

The planning and raid itself takes up maybe the last third of the book. There are some great diagrams in the second collection of image plates showing how the assault progressed step-by-step, giving a much clearer picture of how the bin Laden house was constructed and where the actions took place. Contrary to much speculation, the actual assault onto the third floor and shooting of bin Laden is not that much different from the main White House account; the chief difference is that Owen asserts that the point man actually hit bin Laden in the head when he poked his head out onto the stairway, and that by the time they entered his room he was already on the ground and on his way out. This seems plausible; the point main knew bin Laden was almost certainly on that floor, was prepared for him to show himself, was at close range and had his weapon up and pointing forwards. He would have been the source of endless ribbing if he'd actually missed.

Owen and his fellow SEALs clearly aren't pleased with the politics of the post-raid leaks, but on the other hand they weren't surprised - after all, this is what politicians do. He seems pretty neutral about Obama, probably not a Democratic voter, but respectful of his position as Commander-in-Chief. The only top brass whom they admire is, unsurprisingly, Admiral McRaven who was a 3-star commanding JSOC at the time of the raid, and was subsequently (shocker) bumped to four stars. Owen also shines a little light on the personalities of the CIA analysts who worked with the SEALs in the planning of the raid.

Overall I enjoyed the book. It was a compelling read, packed with interesting information and vignettes of day-to-day life in the special ops community. Recommended.

Immigrants live near immigrants, who knew?

UK schools are socially segregated. Well, yes. But what's this? Immigrants tend to live near other immigrants:

Some 80% of UK students with an immigrant background attend schools with a high concentration of immigrant students, according to the Organisation for Economic Co-operation and Development's (OECD) latest edition of Education at a Glance.

I don't know about you, but if I move to a new country which speaks a completely different language to me, I'd want to start off by living near other people I know and who can speak the same language, point me to the shops where I can buy familiar brands, and help me navigate the foreign bureaucracy. Of course immigrants tend to cluster together. And they will tend to be found in largish cities, near international airports, where very cheap rental housing can be found. So schools in those areas will have a very high proportion of students whose parents are a) very poor in national terms and b) don't necessarily have a good command of English, so are less able to help with homework. Given that parental income is an excellent proxy for school achievement, it is staggeringly obvious that schools with a high proportion of recent immigrants will have relatively poor results.

Sure enough, even parental education doesn't help:

Some 42.5% of immigrant students born to highly educated mothers - those who have a degree - are in disadvantaged schools.

Right. Those highly educated mothers are quite possibly unable to find employment in the UK at any level more sophisticated than stacking supermarket shelves or cleaning lavatories - they have no UK employment history, and no job references that an average employer will take up. It will take them time to establish a solid work history and start a climb towards the jobs that actually match their skills. A talented phlebotomist from French Guyana may start her UK career cleaning the bogs of the local hospital - after three years she may have graduated to managing supplies for the lab, and after another 3-5 years and night time study she may get the minimal qualification to take blood for the lab. After that her career arcs high and bright, until after 5 more years she's running the lab and is known through the hospital as a get-things-done kind of gal, with nearby private hospitals trying to poach here. But her first few years are going to be poor and hard going.

If we want to improve the poor schools, we need to do something about the 1-2 disruptive pupils who spoil the learning of a class of 25-30 students. Get them out of the way of the children of immigrants whose parents venerate learning. Even if we spend 4x the regular per-head teaching cost on getting those disruptive pupils taught elsewhere, we still come out ahead.

They may be poor but they ain't stupid

The Star Tribune writes how the poor in America are finding ways to exploit the wrinkles in the system to make a living - not a great living, just a few bucks a time, but it's a start:

There are the return stringers -- people on the front end of loose-knit shoplifting gangs -- hired to return purloined merchandise for store credit using a driver's license. Recently, a pimple-faced, tattooed and gap-toothed young man returned more than $60 of Oil of Olay age-defying cosmetics.
I did not ask what would have been obvious questions. Do you have a receipt? Did you pay with a debit or credit card? Have these improved your skin? I gave him a gift card.

There are non-criminal entrepreneurs too - a grandma purchasing a gift card, buying small value items to turn most of the card into cash, then returning the items for cash. Free ATM withdrawals! Yes, UK citizens, ATM withdrawals in the USA generally cost you a buck or two unless you can drive 10-40 miles to a branch of your own bank.

But the newest entrepreneurial poor at our East St. Paul Target are the couponers, who, individually or in groups, purchase multiples of same items at little or no cost using high-dollar or "free" coupons found online. Then they return the items for full cash value.

A fantastic bit of arbitrage here. Couponing has for decades been a way of life for the very poor in America - and hold no illusions, the "poor" in the UK have no idea what poverty in a first-world country can be like. There are even mainstream TV shows on the subjects such as Extreme Couponing. The economic premise is price discrimination - the very poor can trade time clipping coupons for relatively small monetary savings. Now they have found a way to amplify those savings into cash rather than cheap purchases.

Article author Doug Champeau hypothesises that the increase in entrepreneurship is at least partly due to the newly-impoverished former members of the American middle-class; business nous and economic literacy translates into being able to analyse and exploit an overly complex system of discounts and benefits for the poor. Perhaps this tells us a lot about how people stay in poverty - the opportunities to rise are there, but they haven't been equipped by their high school education to be able to find them.

A golden opportunity for Prince Harry

The Foreign Office is asking Capt. Harry Wales to visit China. And why do they want him to do that?

His father Prince Charles has never visited and a trip by the 27-year-old would aid attempts to build a friendship, reported the Sunday Telegraph.
[...]
Tensions with China are growing after ongoing dialogue between Britain and the Dalai Lama - Tibet's spiritual leader and critic of Chinese rulers.

You mean that where all these refined, world-wise mandarins in the FO have failed, they think an Apache gunner and occasional striptease artist might succeed? Interesting. What are we paying the FO bods for, then? I can't imagine that British royalty per se is going to impress the kleptocratic dictatorship that seems to form the Chinese government.

Nevertheless, perhaps the FO is right. Harry should go to China. While there he should make repeated public references to the welfare of Tibetans, express hope that China and Taiwan can improve diplomatic relations (extra points for referring to the latter as "The Republic of China") and while speaking at Chinese universities should laud the freedom of speech and freedom to question authority that characterises British education and hope that such positive traits will be encouraged in China in future, in marked contrast to June 1989 in Beijing.^[1].

After all, what's the worst that China is going to do as a result? Ban English drivers from the following Formula 1 races in China? Throw Harry in jail? Flavour his drink with a little potassium cyanide? They're already annoyed by Britain just talking to the Dalai Lama, I don't see much downside risk here.

^[1] If that little lot doesn't cause this blog to be blocked by the Great Firewall of China, nothing will.

Atlas Shrugged - the film(s)

I happened across the trailer for Atlas Shrugged part 2 yesterday, which made me remember that I actually hadn't seen Atlas Shrugged part 1; it came out before I read the book. So I ordered the DVD of part 1 from Amazon and watched it via Amazon streaming (thank you, Amazon, for letting me immediately stream a film that I'd just bought, a fantastic idea).

It may be an unpopular perspective, but I think the film was an excellent adaptation of the book. The casting was inspired, with Taylor Schilling nailing Dagny Taggart. Grant Bowler was a more likeable Hank Rearden than the book character, but I was Just Fine with that. Even the smaller characters (Wyatt, Rearden's wife, Willers) were well portrayed and written. The visual effects were OK, though you could tell they weren't the same grade as a George Lucas masterpiece; that's what a smaller budget does for you. The dialogue was well tweaked to feel current with the 2011 political and labour scene; the world of Rearden, Mouch and the Taggarts didn't feel a million miles away from today's America.

Unlike the book, the 96 minutes of film really packed in the story; the main criticism I have is that so much was happening so quickly that if you hadn't read the book you'd be sunk; it would need maybe 2-3 viewings to appreciate it fully. Overall though it kept me on the edge of my seat, and the sudden jarring end (or "stop" as some critics had it, which was fair) was well-timed. Recommended to anyone who's read at least some of the book and is more interested in the story than the philosophy.

I'm not sure about part 2. The complete recasting is going to be rather jarring. It opens in US cinemas in October so hopefully will be available on DVD before the end of the year. We'll see how they do.

Gloucestershire engineering

Chas Fellows from Gloucestershire County Council is an economic illiterate. He's going to put solar panels on the roofs of county council buildings and make money! It could save up to £6.5mm over the next four years! What's not to like?

Hang on, isn't the break-even for solar in the UK, with the current subsidy, 10-12 years? It couldn't possibly be that the esteemed Cllr. Fellows is completely ignoring the capital cost of installing the panels, can it?

So what does Chas (Conservative, Environment and Economy) say?

"Times are tough at the moment."
"We're doing everything we can to save money and find funds to protect services for the most vulnerable."
"This scheme has the added benefit of producing green electricity and creating some local jobs."

Yeeeees, Chas, are you familiar with the concept that jobs are a cost, not a benefit? How, exactly, are you saving money when you have to pony up for all the capital costs for the panels and their installation? And what, exactly, does "green electricity" look like?

One of the costs which I bet they haven't anticipated is going to be the need to employ people to go clean all the pigeon crap off the solar panels every week. And this is Gloucestershire, which is not exactly famed for sunshine... Chas Fellows, you do seem to be a pillock of the first order. I guess it's not your money, though, so you don't care?

Nokia is toast, and here's why

After its torrid year (share price of $2.64 down 60% in 12 months, and down over 90% from its $40 high in 2007), Nokia are rolling out their first reasonable stabs at Windows Phone model (the Lumia series) and the world has responded with a wide yawn. As Andrew Orlowski in The Reg opines:

A Windows Phone is somehow seen as a risky choice, despite (or perhaps even because of) its radical design. The ODMs (original device manufacturers) haven't yet shown us a Windows Phone with a killer feature. WP has sold on the basis of the People Hub, and perhaps this has been oversold a little.

Thing is, Nokia has always made pretty decent hardware. It tended to lead the edge with cameras in the early 2000's, and the Lumias follow in that tradition. Apple's iPhone cameras, to be honest, have been pretty "blah" - it's been the OS and applications built around them which have made the iPhone such a phenomenally successful camera phone. The Androids, tied in well with Google Plus which offers better photo quality than Facebook, and having better cameras, are more of a benchmark for the Lumia. It's a shame that Nokia's staggeringly inept PR department completely messed up the Lumia launch by giving the press a scandal to latch on to, rather than letting them talk about what looks like quite a good image stabilisation system.

Nokia's problem is the Finnish problem - "Not Invented Here" syndrome was invented in Finland. See, for instance, Linus Torvalds and Linux; the difference was that Linus was smart enough to realise when the product became too big for just him, and smart enough not to reinvent everything about an operating system. Nokia, by contrast, wrote its own phone OS (a diabolical mish-mash of C with a plethora of #defines to build a semi-OO message-passing system that caused the phone to lock up and reboot if any app received any message for which it didn't have a registered handler) and firmly resisted any alternatives. I think they only accepted Symbian when it a) became clear that Nokia OS was disappearing up its own backside and b) no-one else was really using Symbian any more. Adopting Windows Phone must have been an extremely bitter pill for them to swallow, and I'm sure their good software guys left in droves.

What Nokia should have done, once iPhone and Android appeared on the scene, was build some serious attempts at mass-market Android phones with Nokia hardware. Throw away most of the Nokia software, start re-pointing their medium-term software dev effort at Android system applications, and complement what they were good at (low-to-medium-end phone hardware) with a decent next-generation phone OS. Instead, they fell like a brick and had to be bailed out in effect by Microsoft, becoming MS's Great White Hope for Windows Phone. No prizes for guessing who's pulling the strings in Nokia's strategic direction.

Eventually they're going to end up a glorified phone hardware manufacturer, just uploading the latest Windows Phone images into their devices. Oh, how the mighty are fallen.

Chinese debt - a molehill concealing a mountain?

Compelling reading in "The Diplomat" on the twin problems threatening to shake the very foundations of the Chinese banking system - if they ever become too large to be hidden any more. Go read the whole thing. When reading the following excerpts, note that there's about 10 yuan to the pound sterling:

[...] If the share of dud loans should reach 20 percent, a far more likely scenario, Chinese banks would have to write down 2 to 2.8 trillion yuan, a move sure to destroy their balance sheets.
The Chinese government, to its credit, was also aware of the danger of this ticking debt bomb. Unfortunately, it used a solution that merely delayed the inevitable. In the first half of this year, Beijing announced a policy of mandating banks to extend by one more year the deadline for local governments to repay their bank loans that were about to mature. This move was taken, in all likelihood, to conceal the festering problem in the financial sector during the year of leadership transition. But it did nothing to defuse the debt bomb.

So the banks themselves may have got sheaves of bad loans and are desperately collaborating to conceal them, in the knowledge that once one brick in the dam goes, the others follow shortly after. But what about the consumers and individual investors?

Because of very low-yield for savings by Chinese banks (since deposit rates are regulated) and competition among banks for deposits and new fee-generating businesses, a complex, unregulated shadow banking system has emerged [...] To evade regulatory oversight, these [short-term investment] products do not appear on a bank's balance sheet. [...] China had about 10.4 trillion yuan in wealth management products, about 11.5 percent of the total bank deposits, at the end of June this year.

Chinese citizens can't get squat in interest for their money, so the only way to even approach a return matching inflation is to invest in increasingly risky vehicles, property and development projects, with very little effective regulation and risk management by whatever the Chinese equivalent of the FSA / SEC is - if it has one.

This second point squares with several articles from John Hempton's hedge fund blog at Bronte Capital where he's been discussion the outright frauds and other extremely suspicious behaviour in the Chinese banking, equities and investments. In his Chinese kleptocracy post he notes:

Most Chinese savings however are not invested in see-through apartment buildings. Bank deposits still dominate. The Chinese banks are the finest deposit franchises in human history. They can borrow huge amounts at ex-ante negative real returns.
And those deposits are mostly lent to State Owned enterprises.

All this seems to be coming together to create a near-perfect storm of fraud, abuse, property and asset bubbles, massive stock market fraud and inflated earnings, looting by connected people and a shafting of the Chinese middle- and lower-class that is likely to make the Western mis-selling and mortgage fraud of 1998-2008 look like the epitome of good financial practice.

I think we're going to see a steady and increasing stream of hard assets and hard currency sneak out of China, as those with sufficient connections to move their wealth and families abroad do so. Eventually there is going to come a point where the insolvent banks can no longer be concealed even if a dictatorial Government is willing to try, and the unrest that results is going to have quite the butcher's bill.

Can it be fixed? I don't think anyone who is in a position to even try to fix it is going to be willing to try; you're much more likely to put yourself in the firing line when things inevitably do go bad. And "the firing line" in Chinese politics is no euphemism.

"Undocumented" - the latest euphemism

You would imagine that "undocumented" in relation to a resident's immigration status means that they are lacking a document that would prove their status. You would not, for instance, think that it meant that the reason for a lack of documentation was that they lacked the actual status. Unless, it seems, you are a notorious hippie reporter writing in the Guardian about immigrants in the USA:

Here in Charlotte, outside the convention center, ten brave souls, among them a young woman and her mother, a couple and their daughter, sat down in the pouring rain on a large banner they placed in the middle of the intersection. The banner read "No Papers, No Fear" (in Spanish, "Sin Papeles, Sin Miedo"), with a large butterfly in the center.

Hmm. The implication here is that the banner was written in Spanish; I believe that English is still the universal language of the USA. Why write your banner in Spanish if you're aiming at the bulk of USA voters?

There are quotes from undocumented citizens:

"I am undocumented. I've been living here for 18 years. I pay taxes, and I'm paying more taxes than Citibank."

Fascinating. What SSN is on his IRS form 1040? He'll need one, if he's to pay taxes. Where did he get it? Bet it wasn't from the IRS if he provided only authentic documentation. And, while we're at it, Citibank paid $3.5bn in income tax in 2011.

You can argue all you like about the various demented parts of the USA immigration laws, and the states' need for workers who are prepared to work at sub-minimum wage in the fields of the agricultural states, but let's not pussy around with terms like "undocumented". This could apply to children of illegal immigrants who were brought in to the USA by their parents, and bear no responsibility for their current status: it does not apply to their parents who came into the country in full knowledge of their illegal status.

Free money from builders!

It seems that there's plenty of land we can build on, with over 400,000 plots with planning permission, but for some reason the house builders aren't in any rush to build:

The new statistics raise further questions about the pressing need for George Osborne to relax planning rules to boost house building. They will fuel campaigners’ belief that the problem is not with the planning system, but with the slow speed at which builders are converting approvals into new homes.

Here's an idea. Take each plot, look at the largest house (or collection of apartments) which could be built with the relevant planning permission. The council is then entitled to the corresponding council tax for that plot, starting from (say) 6 months after planning permission is granted. This is only changed when the house is complete and formally assessed for the correct council tax band. While we're at it, cancel all council tax relief for empty homes - an empty house has a negative externality on the neighbourhood, so it's economically sensible to penalise a house in that state.

Benefits: more money for councils (say, 200,000 plots at an average of £1000 apiece is a cool £200 million per year) straight out of the pockets of any builders who aren't organised enough to build a house after they get planning permission. Builders have an incentive to build more quickly and sell the houses as quickly as possible. There's also now a direct financial incentive to get tenants or buyers into a house as soon as it's empty.

No doubt the Land Value Tax crowd will approve but point out this doesn't go far enough. Well, baby steps. For now it seems to be a point where taxing antisocial behaviour can actually benefit everyone...