Global Crunch

This piece is intended to be a short essay on the current global crunch as I see it. I'm writing at this point, because current wisdom says that the Global Crunch won't be as bad as the Great Depression of the 1930s. Here I'm going to do a comparison between market collapses in the 20th century and the current situation. I won't say much about any predictions.

The Global Crunch is a long-term global financial crisis of whose signs had been in evidence since around 2005 and came to an obvious head in the summer of 2008. It is a direct product of unsustainable financial control; war and increasing competition for fossil fuels. Here we look at the following factors:

• What to call the Global Crunch.
• A Comparison with the Crash of 1929.
• A Comparison with the Recession in the late 1980s.
• Factors affecting the crunch.

I think inevitably, this crisis will become known as "The Global Crunch"; at the time of writing, it's variously referred to as "The Credit Crunch" or the particularly lame "The Downturn" used by BBC News.

Many of my references are taken from the Wikipedia. The 1929 Crash was a culmination of 5 years of massive stock market growth which was ultimately boosted by heavy speculative investment. The market initially recovered over the next several months of 1930, but this was not enough to prevent the subsequent Great Depression and corresponding global recessions in Britain and more importantly in Germany (where the economic (and social) instability lead directly to the the rise in power of extreme political parties and subsequently the Nazi dictatorship and World War II).

The Great Depression was exacerbated by nationalistic protectionist measures following the crash; hyper-inflation in Germany; and the road to recovery was only initiated by the implementation of Keynsian Economics in Japan; the US (the New Deal) and later in the UK to some extent. Note: Keynsian economics works on the basis that it is the flow of cash which produces wealth not the amount of it in anyone's possession. Ironically it was the World War II which propelled the US into the industrial leadership it maintained at least until the early 21st century.

The Great Depression was followed by several decades where national economics were heavily regulated by Government.

The 1987 Crash. Again, the crash of late 1980s (and the subsequent 1990s recession) can be seen as a product of market deregulation that began in the early 1980s with the Reagan/Thatcher free-market era. In this case, the UK changed its laws to allow less heavily regulated stock markets; which lead to London re-emerging as a global financial centre as financial interests moved from Europe and the US to the UK. The US subsequently started to change its regulation.

In 1986 the UK chancellor Nigel Lawson further deregulated the markets which lead to the Boom of 1987. The 1987 Crash in both the UK and US was precipitated by the large number of stocks managed by simplistic computer programs which automatically sold their shares under certain conditions - therefore since the same programs were being used everywhere, it was possible for an extremely rapid crash (actually at a far greater rate than in 1929) to take place.

In the months proceeding the crash it looked inevitable that the country would head into a recession of some kind; though the government repeatedly asserted that this was not going to happen. Of course, this was not the case and a recession did indeed follow a few years later and at it's height in 1991-1992 was responsible for a high number of repossessions from unsustainable mortgages from the Conservative housing boom of the mid to late 1980s.

So, when we come to look at the Crunch we actually see the hallmarks of previous crashes all over again. We see deregulated markets leading to a financial boom and subsequent serious bust. We see the effect of housing and mortgages on the whole financial outlook (the deregulation of the housing market in the US: the Subprime market and in the UK being very similar to that of the 80s); excessive speculation and loans (where capital / loan ratios were increased). On top of that we have constraints due to fossil fuels becoming a constraint on the economy and the undermining of the western economies by a number of unnecessary wars.

What we can predict is that this is only the start of the problem. If the past is anything to go by we can see that market collapses usually impact people for at least the next 5 to 10 years - it's unlikely we'll be at 2006 - 2007 levels by 2013 (5 years from now); it's likely that, given that economic pundits are telling us that there will be a significant recession for a few years that in fact it will be worse than in 1987 (because then they said it wasn't going to happen at all)!

I'm publishing this the day after the Dow Jones fell to 7553.8 - a fall of 46% compared with its height of 13900 about a year ago (the 1929 crash was a fall of 43% compared with its height).

Dreamstate

On Tuesday November 5, it seemed like the US and in kind, many countries around the world entered a bit of Dreamstate akin to Britain's May 5 1997 moment, but more profound.

I know thousands of people have commented similarly, but the one thing that I am strongly reminded of is how much Obama's politics are influenced by the 60's American Civil Rights movement. In particular, MLK's (what can only be described as a literally prophetic) vision of a future America expressed in his "I have a dream" speech and book "Strength To Love".

For me, the image that most brilliantly captured the event in my mind is of the children of MLKs era: Barack & Michelle (Jan'64), Joe and Jill (June'51) holding hands at the Grant Park party.



But, it's not just the fact that he foresaw an America that looked beyond the racial stereotypes of the day to a time when "little black boys and black girls will be able to join hands with little white boys and white girls as sisters and brothers"

It's not just that he was fighting against the gross injustices that stemmed directly from the civil war 102 years earlier.

But the many incidental details I think that are particularly poignant. Whether he says "we refuse to believe that the bank of justice is bankrupt" or "It would be fatal for the nation to overlook the urgency of the moment" he could have been speaking during the economic turmoil of last month and not over 45 years ago.

For MLK it wasn't only about the objectives, but the standard for attaining them "We must forever conduct our struggle on the high plane of dignity and discipline... we must rise to the majestic heights of meeting physical force with soul force". This strategy, followed almost entirely to the letter for 45 years has brought a result that could not have been achieved by any other means.

And the recognition that this is really a struggle for the whole of America: "many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny. They have come to realize that their freedom is inextricably bound to our freedom. We cannot walk alone."

And not just a struggle in terms of skin colour; but the broadest possible sweep of God's intent. As a result MLK immerses his speech in rich Biblical themes: Mercy running like a river; Mountains being laid low* mediated through the magnificent (i.e. secular) Constitution of the United States; which he saw literally as a cheque written for all God's children, to be cashed in through faith in action.

I'm struck most of all by MLKs sense of timescale - which can only be described as pure prophecy. Despite the injustices he was campaigning against, injustices that spanned over 2 centuries he believed that although he might not get there, in fact his own children would: "my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character" From my research all four of his children are still alive (they are in their late 50s or early 60s).

No one should be under the illusion that Obama is any kind of messianic figure. Yet, Obama fits the bill as the man of the moment; being born during the rise of the civil rights movement and elected at just the right time. He certainly appears to be the right man when judged by character and merit; rather than privilege and position. He made it to the highest post in the land in living memory of The Dream at a time of national (international) crisis as a man of intelligence and faith.

Northwest Passage Opens For A Second Time

According to this Nsidc image, the McClure straits Northwest passage in the Arctic has opened for the second time in two years, the second time since records began. It's worth pointing out that because we are fairly late in the season, there will be more variability in ice-extent, so I wouldn't be surprised if it closed briefly over the next few days. Nevertheless, I would expect it to become open for a significant period of time this year since we have another month of melting to go.

The Cryosphere Today image from 18/08/08 doesn't yet show the McClure strait being completely open - the top and bottom still have some 50%-ish concentrations of ice present. Their calculations are calculated differently and show lower-figures.

As an overall picture then, the Arctic in 2008 is turning out to be fairly similar to 2007, with ice-extent well below the 2005 record and with a few 100 000Km2 still to lose, meaning that the Arctic ice extent could get as low as 4.8mKm2 this year (it's currently on 5.69).

Think Ahead, Think iBase

This article is promted by the LowEndMac article in Beyond The Mac Mini. About 6 to 7 Years ago I added a page to my (then current) website: The Snial Homepage. I was toying with what Apple might do to produce an ultra-budget iMac based around wireless technologies. The basic idea is that it would be easier for Apple to get existing customers to buy more Macs and distribute them around for specific purposes than for Apple to expand their customer-base. To do this you'd make them really small (so they can be placed anywhere); cut down on absolutely everything and make up for it using the network and just enough USB/FireWire ports. So, the Macs would be capable, but only under the wing of a more powerful computer.

The result was the iBase. Although the performance of the iBase is poor (and was deliberately so even in 2001) Apple seems to be converging slowly on some of its ideas. Consider:

• The use of low-end technology in the Mac mini, i.e. relatively slow CPUs.
  
• The missing external drive in the MacBook Air.
• The limited number of ports in the MacBook Air (even more limited than the iBase). In particular, like the iBase, the MacBook Air doesn't have Ethernet.
• The similar solution for using removable media (e.g. Operating System upgrade) - by using a virtual drive from another computer over wireless.
  
• The small laptop-style keyboard. The one shown in the image is actually a double-prediction. I took an image of a full-sized Black Apple keyboard from 2001; cut off the keypad and cursor pad keys and then inverted it. Apple's keyboards went white in 2002 and the smaller keyboard appeared in 2007 (although it's silver now).
• The lack of expandability - even by Apple standards, iBase is restricted by only supporting a single RAM slot (the MacBook Air has its RAM soldered on!).
  

The iBase makes just as much sense now as it did 7 years ago, or more sense. The move towards cheap UMPCs, such as the popular eeePC says there's a healthy market for small screen computers. The increasing popularity of Linux (in particular, consumer oriented-versions) and Mac OS X means that internet media is more accessible - it's more cross platform. The move towards wireless networks and high-bandwidth internet (Broadband at 512KBit/s had only just come out when iBase was written) means that the traditional roles of DVDs and CDs are falling by the wayside in favour of technologies like Apple TV and the BBC iPlayer. Finally, cheap NAS technology means that computing at all levels is becoming more client-server based; more distributed; more prevalent and yet less obtrusive.

So, the iBase concept is more than just a small computer, it's more human-oriented technology: handy when you want it, but less invasive at the same time.

RIP-11

It blew up and then it died!

I acquired a PDP-11 over 7 years ago (September 2000). You probably don't want to know what a pdp-11 is, but you should, so here's the low-down:

A pdp-11 is a 37 year old computer, made by a company called DEC that went bust 10 years ago. The exciting thing is that it is so old, big, slow and limited. The processor isn't 1cmx1cm, it's about the size of a Beano annual. There's about 500 chips inside! Only trained personnel ever used these things, because maintenance was such an issue. They cost over £10,000 each when new. They were unreliable.

But, these are the computers that created the internet and the world's most popular programming language called 'C'. These computers gave us email, CAT scans, fractal graphics and early office tools. The bosses of today's computer industry started their careers with these machines. They're epic, but they're unreliable!

Mine was one of the fastest PDP-11s around, a 25 year old model called a Micro PDP-11/73. In today's terms really it's very slow, about 1000 times less powerful than any computer you could buy today. It looked a bit like a tower PC, but it was big, about the size (and weight) of a large old-style radiator. I was going to have a go at trying to use it, but every time I turned it on I could do nothing with it, because the last owner had left a junk operating system on it.

Now that I had a bit of spare time, or rather, because I'm trying to clear away some rubbish, I decided to get the machine going once and for all. I tested out how to use a pdp11 using a pdp-11 emulator on my Mac and it was looking good. And then I checked out all the circuit boards that made up the pdp11, removing them all and then replacing them carefully. The machine is good, it's got 512K of RAM and controls a 30Mb Hard drive.

The clever thing was simply the effort of transferring a new operating system and everything to the pdp-11. I did that by copying it from my Mac to a Zip250 USB drive and then to a PC running Windows98 which I rebooted into DOS so that I could use a program called PUTR which can copy files to ancient 5.25" disks. So, I worked out a way of getting enough of the OS and utilities into 400K (!!!) so I could boot up the pdp11 and then install that OS onto it's Hard Drive.

Easy! But no, it took all day. Just connecting all the cables up from the back of the pdp11 to the front was a nightmare (maybe I got it wrong??!?) and then the VT320 terminal was just generating rubbish for a while. Finally I got it to display something and boot the pdp11 to the floppy disk where my OS was.

AND IT WORKED! For the first time EVER in my life I'd managed to get an ancient minicomputer era computer to run and have control over it!

So, then I copied the OS to it's Hard Disk (and that worked woo!) and spent a few hours copying over the rest of the OS using the same laborious method above. And it was lovely, I turned on the machine for a bit; wrote a bit of a Forth program. I found out it can run about 120000 Forth instructions per second, which means it runs Forth about as fast as a 386 ran QuickBasic.

I turned off the pdp11 and was just about to do a demo and film it and .... as I was trying to get the camera to work. I heard a crackle. And another. Some blue sparks from inside the casing.

YIKE! Oh, good grief!!!!!!!!!! I turned off the computer at the mains - smoke started pouring out the pdp11 while I went to grab a CO2 extinguisher (I have one!). Gee, it smells in the spare room now.

So the pdp11's an RIP-11 now :-( What a disaster!

Ultimate Boeing 747 Challenge

In The God Delusion, Richard Dawkins takes Fred Hoyle's Boeing 747 argument and turns it on it's head. The Boeing 747 argument essentially claims it's too improbable that the complexity of living things could have arisen by a sequence of chance events governed by the process of natural selection and therefore it's reasonable to deduce that life has been designed. RD counters that the designer must be more complex than what s/he designs and therefore if living things are too improbable; then the designer of living things must be even more improbable.

As Dawkins says: "A designer God cannot be used to explain organized complexity because any God capable of designing anything would have to be complex enough to demand the same kind of explanation in his own right."

Here is a counter-argument based on the hypothesis is that there's no logical connection between the structural complexity of a designer and the object being designed. We can analyze the hypothesis by considering the design of real systems (I've been involved with a few, maybe you have too).

1. We know from the concept of structural decomposition, or stepwise refinement (e.g. in software or hardware) that a large design which cannot be comprehended in its entirety by its designer can nevertheless be produced if the designer factors the work into a number of simpler subdesigns; and these in turn can be factored until each particular job is comprehensible.
2. We know there is, in principle, no upper limit to the complexity of the design that can be attempted in this matter, because we are looking at it from a top-down viewpoint, not bottom-up. In theory this means that given enough time or resources a designer really can design something more complex than him or herself.
3. We know that there may be an upper limit practical complexity of a design that may be implemented which is governed by the methodology of the design process. In other words, more complex designs don't need a more complex design process, merely a more consistently applied methodology - ie the random factors that affect human beings in a normal environment undermine their ability to create complex designs.

It seems to me on reflection that the human ability to design has little bearing on our physiological complexity; and our limited ability to reason makes us equivalent to a rather 'simple system' far exceeded by the designs we've already accomplished. Nevertheless it's random factors which present the greatest obstacles to our efforts to succeed.

AFAIK, the basic question about whether Evolution is a product of randomness or is determinism seems to have shifted over the past few decades. I distinctly remember in my youth (around 25 years ago) that evolutionists presented evolution as a series of random events subject to the process of natural selection. The important thing to emphasize was the 'randomness' of survival. In retrospect I conclude that this was the case, because it's a good argument against God - if randomness is the source of evolution then obviously it's under no-one's control, not even God's.

However, in the intervening decades we have a better estimation of how badly randomness works as a driver for evolution. And so the argument has shifted to looking at the natural selection side of evolution as a deterministic process. A deterministic process can also be used as an anti-God argument: if a process is deterministic, then there's no decisions for God to make.

This argument isn't really trying to weigh up these two viewpoints. All it's about is saying (a) that the complexity of the designer has no bearing on what is being designed in a situation where a designer is involved. (b) A designer's methodology does have a bearing on what can be designed - a methodology equivalent to a process of natural selection would be extremely counter-productive.

Quakey-Wakey!

The biggest earthquake to hit the UK for 25 years struck last night at 0:56 and I was awake to witness it here in Withington, Manchester!

I felt the entire building shaking and saw items moving for several seconds. I kinda had a hunch on what it was after witnessing the Manchester Earthquake swarm of 2002. A couple of my neighbours popped out of their flats and I told them, yeah I'd seen it all before: this was a 3-point-something earthquake and we can all go to sleep.

But I went back and started looking for reports of it on the news. The BBC was ticker-taping about a tremor in the West Midlands, but I quickly found a Wikipedia article about it being written as I was refreshing the page. It first said it was a Manchester earthquake with unknown magnitude, but as the list of reports came in it quickly settled on being a 4.7 to 5.0 earthquake in England. Turns out it was a 5.3 in Lincolnshire. It's even reported on CNN (they found an American chap living in a timber-frame Tudor house to interview, of course!)