Year: 2009

When Lebanon is A Safe Haven for Your Money….

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You know that we are completely boned:

Instead, the silver-haired banker became a hero by playing it very, very safe. In 2005, he defied pressure from the Lebanese business community and bucked international trends to issue what now looks like a prophetic decree: a blanket order barring any bank in his country from investing in mortgage-backed securities, which contributed to the most dramatic collapse of financial institutions since the Great Depression.

So as major banks in America and Europe were shuttered or partly nationalized and thousands of people in the U.S. financial sector were laid off, Lebanon’s banks had one of their best years ever.

Billions in cash continue to pour in to the relative safety of Lebanese savings accounts, with comfy but not extravagant yields of 6%. A nation shunned for years as the quintessential failed state has become a pretty safe bet, or as safe a bet as investors are likely to find in this climate.

Lebanon as safe haven….I have a real problem wrapping my head around this.

Bad Idea Stopped, For Now

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It appears that the Congressional Democrats killed a proposal to convene a special Social Security task force, at least in the near term.

There will not be any announcement of such a body at the “fiscal responsibility summit”, and this is a good thing.

The solvency of Social Security is the least of our worries right now, the public already pushed back on this in 2005 when Bush tried it, and people are looking at their 401(k)s right now, and want no part of privatization.

Handing off social security to wall street is a bad idea.

Expanding the sorts of wages covered by social security, and dropping the earnings limit may not be a good thing, but the “a bipartisan group take up the issue and devise a plan” people like Representative Ellen O. Tauscher, chairwoman of the New Democrats coalition, have one plan:

  • Give the money to Wall Street.
  • Extract campaign contributions from Wall Street Bankers.

Further raising the retirement age, reducing benefits, and/or handing the money to investment bankers, which is what the “Social Security Reformers” really want is a bad idea.

Just look at Chile’s privatized pensions.

The problem is 40 years in the future, and if one were simply to drop the cap on the employers portion of social security taxes, and expand the wages that are covered, there are an awful lot of wages to fat-cats that don’t count, and the problem is solved.

The Mess That Greenspan Made: The Great Inflation Moderation that Wasn’t

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Tim at The Mess That Greenspan Made has a great post on how the Federal Reserve, and Alan “Bubbles” Greenspan, succeeded in making a laughing stock of inflation results through the use of imputed rent (owner’s equivalent rent) in the CPI data.

Not only is inflation higher, but the swings in inflation, driven as they are by the aggressive policies of the Federal Reserve to drive down wages manage inflation, are much more extreme.

In essence, as I’ve noted before the Fed has made itself look good.

BTW, you can get more information, in mind numbing detail, from Shadow Stats.

Governor Andrew Cuomo

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Because we just had New York Governor David Paterson confirm that he let his people loose to smear Carolyn Kennedy, to the New York Times, no less:

For the first time, Gov. David A. Paterson acknowledged Friday that he personally ordered his staff to contest Caroline Kennedy’s version of events in the hours after she withdrew from consideration to be United States senator.

However, Mr. Paterson said that he was bewildered when his staffers subsequently unleashed harsh personal attacks against Ms. Kennedy, saying he merely wanted them to challenge the assertion from Ms. Kennedy’s camp that she had been his first choice to replace Hillary Rodham Clinton.

Let me be the first to say to you that you are lying through your teeth.

You could have picked up the phone, and talked to any paper on the record, and it would have ended this, but you leaked it via your staff, and considering what your staff said, through staffers who were clearly given marching orders to slime her.

Not choosing Caroline Kennedy as Senator was the right course of action.

She is intensely private, generally uninvolved in politics, and shows all indications of being worse on the campaign trail than her cousin, Kathleen Kennedy Townsend.

That being said, you did not have the guts to say that to her face, or to tell the people of New York the truth, which is pathetic.

Economics Update

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The Federal Reserve Bank of Chicago’s National Activity Index showed a small bump in January, though it should be noted that December was an absolut disaster, so I’m callijng dead cat bounce, particularly since the 3 month moving average is at a record low.

It also appears that the gift that keeps on giving, AIG, is looking for more welfare from the government.

The US government already owns 70% of the company. How about giving all of senior management the boot….TODAY.

BTW, it appears that the rising levels of derfault on commercial real estate are giving Atlanta Federal Reserve Bank President Dennis Lockhart the willies. He says that it is keeping him up at night.

Meanwhile, the go-go free market capital of the Arab world, Dubai, has just gotten a bailout from the United Arab Emirates following the failure of its bond offering.

Dubai has done its level best to cast itself as the banking sector of the Arab petro-states in the region, and now it looks like things are going bad there too.

Not only are there problems with bond offerings, but thousands of expats are fleeing the country, because they have lost their jobs, and under the law there, they face debtors prison.

Meanwhile, it appears that oil spiked above $40 on Friday, but it’s below $40/bbl again.

In currency, the dollar gained against both the Yen and Euro.

The Yen is down largely on concerns about declining exports will effect Japan’s export driven economy.

The concern with the Euro is that the former Warsaw Pact and Soviet States that were absorbed (too soon) in the optimism that followed the fall of the Berlin Wall are beginning to resemble Iceland, or Ireland, or Argentina.

I will be posting on Citi, and “stress testing”, later.

European Aerospace Aggressively Pursuing Indian LCA Program

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With its indigenous Kaveri engine repeatedly delayed, India is looking to foreign engines to power light combat aircraft (LCA), the Tejas, and Eurojet is pitching its EJ200 as a competitor to the GE F414, and they are promising some, “special sauce”, thrust vectoring.

Unspoken in this bid to power the diminutive delta is the concerns that the Indian government has regarding ITAR restrictions which could hamstring sales to other nations.

This is also what is driving India’s interest in procuring an AESA radar from EADS for an upgraded version of the fighter.

AESA And Typhoon

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It looks like Eurofighter is considering adding an AESA radar to the Typhoon that has mechanical scanning.

The neat trick here is that instead of simply strapping an AESA radar to the pitch and yaw actuators, they mount the radar at an angle, and then rotate the array to get a wider field of view.

About a year and a half ago, I posted about the Russians looking at something similar, though their idea used the existing actuators of a plane array radar.

I don’t believe that in either case the actuators would respond as quickly as those on a more conventional radar, because the AESA is heavier than a slotted plate array antenna, but the electronic response of the AESA within a narrower band is literally hundreds of times faster than that.

Both would achieve the same thing, a very large field of view, though I think that Eurofighter’s concept looks like it is much more amenable to reduction of head on radar cross section.

Mechanically, this is a lot simpler to do, though you need slip rings for both power and signal, and a rather complex fitting for cooling, as all current AESAs need liquid cooling.

More F-22s Appear to Be Coming

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The reports appear to indicate that the USAF will get 60 More F-22s, at a price tag of around $800-900 billion, though it appears that it will remain firmly in the “not for export” category.

Won’t be much use for the military, and it’s really expensive, the the wild blue yonder types are ecstatic right now.

How about if instead of the planes, we just chip in and rent them a hooker?

That way the taxpayer won’t be quite so f%$#ed.

An End to Pilots?

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The Airforce will graduate its first class of unrated pilots to operate the MQ-1 Predator drone this summer.: (paid subscription required)

The first group of nonrated U.S. Air Force pilots who are being trained to fly MQ-1 Predator missions is expected to graduate by the end of the summer.

The Air Force selected 10 active-duty nonpilot (unrated) captains to be the first of two groups to receive unmanned aircraft system (UAS) training. Once qualified, they will be a beta test group for Air Force leadership to see how nonrated pilots perform at the controls of UASs. The Army has proceeded with UAS flight operations using nonrated pilots, while the Air Force has come under fire for slow training of its UAS pilots, maintainers and sensor operators.

It makes sense.

Modern UAVs are sufficiently automated that the role of the operator is far closer to that of a gunner than it is a pilot.

It’s interesting how it’s going. My guess is that the USAF fought this every step of the way, just like they fought UAVs when they first came out.

The white scarf must cut off blood to the brain.

High Speed Helos Looks to Boost Speed in Tests

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Piasecki helicopter is looking to demonstrat higher speeds in its vectored-thrust ducted propeller (VTDP) X-49 Speedhawk demonstrator. (paid subscription required)

They are currently installing a 3rd engine to power the propulsor, and expand the envelope to 193 kts (223 mph).

In the meantime, Sikorsky is looking toward taking its X-2 advancing blade helicopter to about 250 kts (288 mph). It’s already powered up the propulsor on the ground, and they look to open the envelope slowly, as this is a privately funded project.

Interestingly enough, it appears that they may exceed 250 kts in test at some point, as the manager of advanced programs notes, “We are comfortable getting to a 250-kt. cruise. The dash speed will be higher.”

I can see one or both of these technologies as a replacement for the A-10, which is a fine aircraft, but the US Air Force has wanted it dead for 30 years, and they only grudgingly address the close air support needs of ground troops.

Retrofitting Stealth to Existing Airframes

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Bill Sweetman was at Aero India, and he noticed that the Zhuk-M1E proposed for Mig-29 upgrades has been treated with a bit of radar absorbent material (top picture).

This won’t make a plane invisible, but it will significantly reduce the RCS of an aircraft in the front aspect, so the rule of thumb, about 5m2 is likely no longer operative, particularly when juxtaposed with RAM coatings on the inlets, fan, or the installation of radar blocker screens, as was done with the F/A-18 E/F, though the environment in an engine inlet is rather more severe than that found under a radome.

You can see a similar application on the Have Glass II F-16s (bottom, the RAM is white).

Additionally, the move to AESA radars might provide some additional reductions.

This probably doesn’t reduce detection much, but it probably does increase the effectiveness of jamming relative, particularly with the necessarily (physics is a bitch) high frequency radars on air-to-air missile seekers.

Also, you may want to check out this PowerPoint (19.3M) for some perspectives.

Gripen/JSF in the Netherlands Gets Odd

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So, Saab is talking about cutting its losses on the fighter competition in the Netherlands if they order two F-35 test aircraft in the next few months, which brings them into the JSF test program, which makes sense, the fix has been in for some time here, with Lockheed throwing too much business Dutch industry’s way for them to say no.

But wait, there’s more.

The Netherlands is demanding a firm fixed price for the F-35, which Lockheed Martin is simply unable to do….The aircraft is still (!) not mature enough, and we are seeing price ranges from $60m to $160 million from various sources and what is counted. (The last number is from Air Power Australia, and they really dislike the JSF[Update: the Israelis are saying $200 million, more than the F-22])

Saab, meanwhile, has given a firm fixed price offer which covers pretty much everything from soup to nuts of around $79 million.

I don’t think that Saab has the least chance of winning this, but this is definitely interesting.

Israel Balking at JSF Cost

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The flyaway cost has gone from $50-60 million to something closer to $100 million, and the IAF is beginning to wonder if it is worth it, particularly since the electronic warfare and avionics systems are going to be locked up tightly, preventing the Israelis from customizing the aircraft to their needs.

Note that this is flyaway costs, which is the lowest measure of cost, so these budget numbers, which are still in flux, are only going to get worse.

I would also note that down the road, countries that want to upgrade their JSFs are going to get done like a 3 dollar whore by Lockheed Martin.

Update: We have these comments from a Israeli Air Force (IAF) chief procurement officer Brigadier-General Ze’ev Sni giving a $200 million price tag.