A bit of a special blog this week with only the subject dearest to us avionistas: airplanes!
Last weekend the Belgian 15th Wing opened its doors in Melsbroek. Those who don't know Melsbroek, this is the military part of Brussels National. When you take off from 25R and are sitting at the right hand, the hangars you see: that's Melsbroek, home of the 15th Wing which is the transport section of the Belgium Air Force.
It's the 3rd time in 20 years they opened their doors and the occasion was always the anniversary of the in-service time of the C-130 in the Air Force. First time I went was on May 2, 1992, then September 28, 2002 and last weekend. Below some photos full of nostalgia and some scenes of this year's event. Most prominent advance in those 20 years is the artwork! Enjoy!
20 years C-130
30 years C-130
40 years C-130
Canadian C-130J showing off its fancy props to its older Belgian brother
I wonder if that massive in-flight refuelling probe on top of this RAF Hercules doesn't make the thing nose heavy...
Also 40 years in service: Falcon DA-20
The old-Aeroflot style livery on the 15th Wing 330 remains awful
MD-900 Explorer
Didn't know our Police was doing black OPS...
It doesn't get more nostalgic than this DC-3
Up close and personnel to the business end of another DC-3 (Air France F-BBBE)
Let me ask you something: how much is a quadrillion dollars. Don’t say a lot of money, that’s too easy. How many zero’s does it have? 9? That’s a billion. 12? That’s a trillion. 15 then? Yep. 1 quadrillion looks like this:
1000000000000000
Why do I ask this question? Well let me answer that by asking you another question. How much is the Gross World Product (GWP)? (GWP = total gross world product = the value of everything we all together produce over a year). The IMF (and they should know) puts it at 72 trillion US$ at market exchange rates (see p 149 of the April 2013 IMF World Economic Outlook). That’s a lot. You also remember what brought the banks down back in 2008 (this weekend was the 5th anniversary of Lehman’s fall): the wonderful world of derivatives (like Credit Default Swaps) and too much exposure. The current estimates of the total global derivatives markets range from 700 trillion (estimate by The Economist in 2011) to 1,2 quadrillion US$. These are estimates because no-one really knows. Scary hu? Why does no one really know? Because derivatives are fictitious. It doesn’t really exist. It is not adding any value to the economy or the real world. I give you the Wikipedia definition which is clear enough: “A derivative is a financial instrument which derives its value from the value of underlying entities such as an asset, index, or interest rate—it has no intrinsic value in itself.”
Some claim however that these numbers are a gross exaggeration. In fact these derivatives “only” have a market value of 21 trillion US$.
A couple of remarks. Even if true, 21 trillion still is an enormous amount of non-existent value. But it isn't true. Last week the US Office of the Comptroller of the Currency published its quarterly report showing that just US banks hold 231 trillion $ in derivatives! JP Morgan is champion with 70 trillion$! The horror literature can be found here: http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq113.pdf
Secondly if the global derivatives market is 700 trillion and the “real” market value is 21 trillion, someone has used a rather big leverage... In fact the real value is only 3% of the total market (at the conservative estimate of 700 trillion). So what might you conclude? Well, when the derivatives market shrinks with a mere 3%, the complete underlying real value is wiped out and the whole system comes crumbling down on us. When this happens can we afford it? Well... no. The derivatives market is 10 times the value of everything humans produce during 1 year!
I was reminded of this by an interview I saw last weekend and a presentation. Throughout history numbers with 15 zero’s have not been uncommon to the man in the street. In November 1923, the American dollar was worth 4210500000000 German Mark (that’s 4,2105 trillion German Mark). So you needed 4210 of these notes to exchange them to 1 US$ (picture courtesy of Wikipedia):
Now, the presentation I saw gave some numbers of the very top rich, the 0,1%. These are quite fascinating and are for the US but the same happened all across the world:
1970 1% were worth 10% of national income
Today 1% are worth 20% of national income
Today 0,1% are worth 8% of national income
In 1992, the total Forbes 400 list (400 wealthiest people in US) represented a wealth of 300 billion US$.
Today this is 1,7 trillion US$.
What does this teach us? Get used to a lot of zeros. The richer are getting a lot richer, fast. Inequality is rising (fast). For the Taleb aficionados (like me) this is Extremistan to the extreme (and you know what happens next).
In other news, Dijsselbloem (head of the Eurogroup) spoke before his turn (again), when addressing the European Parliament week before last, stating Greece is in need of another rescue plan. The warning was taken over by the IMF and Moody’s last week. In the mean time almost unnoticed, Slovenia liquidated two banks (Pro Banka and Factor Banka). The Government seized the institutions to prevent what they fear could otherwise have been a deposit run. And the oldest bank in the world, Italian Monte Pascchi, is in critical need to raise 2,5 billion €. Commenting on Reuters one investment banker described the chances of success like this: "There is no chance on the planet that they can raise [this] in 12 months... they are heading towards nationalization”. The capital raise equals the current entire market value of the bank. So the Italian state is likely to have to come to the rescue which means a repeat of the Cyprus experience (remember that template-which-wasn’t-one “exceptional-case-that-will-never-be-repeated-again”). This also means that bondholders AND depositors would be drawn into a bail-in (for deposit holders above 100000,- €)! Also last week Dijsselbloem added that Europe should ensure bail-ins are done in the right way by states (to be understood as 'by confiscating depositors' savings'). See here for the EU’s law that will be adopted by year-end legitimising the bail-in principle based on the one-off-special-never-to-be-seen-again-case of Cyprus: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofin/137627.pdf
Over to some fun! Embrear posted this video about a floating book it sent to selected potential customers for its Lineage 1000. I would love to get a copy as well (no I am not in the market for a Lineage 1000).
As for the aviation part there is no contest with Virgin Galactic’s successful test flight demonstrating all technical mission phases in one single flight for the first time:
Seems that nor the politicians nor the media are asking the right questions about Syria, let alone answer them.
So in an attempt to help them out here is what I like to have answered (truthfully if possible):
1. Can we believe the US this time when they claim they have irrefutable evidence?
2. Is it really so that the US and some European countries are appalled that chemical weapons have been used?
3. Or is it just a good excuse and is there a different agenda (gas pipeline?)?
4. If chemical weapons are so inhumane why has the US not disposed off its own chemical weapons yet? (It is working on this, but they still have a stockpile left according to wikipedia: The Chemical Weapons Convention signed in 1993 stipulated a deadline of April 2012 to fully dispose of all chemical weapons, the US missed the deadline and the Pentagon indicated that they are looking at a 2023 target!!! http://en.wikipedia.org/wiki/Chemical_Weapons_Convention)
I am sure that the media will keep us informed over every nitty-gritty detail leading up to the US Congress discussion and vote on Syria. Whilst you are watching that theatre, bear in mind the words of Noam Chomsky (he doesn't need an introduction - but for those who have never heard of him see http://en.wikipedia.org/wiki/Noam_Chomsky). He made some remarkable statements during his keynote address at the Deutsche Welle Global Media Forum in Bonn, Germany, 17 June 2013: “In the past, the United States has sometimes, kind of sardonically, been described as a one-party state: the business party with two factions called Democrats and Republicans. That’s no longer true. It’s still a one-party state, the business party. But it only has one faction. The faction is moderate Republicans, who are now called Democrats. There are virtually no moderate Republicans in what’s called the Republican Party and virtually no liberal Democrats in what’s called the Democratic [sic] Party. It’s basically a party of what would be moderate Republicans and similarly, Richard Nixon would be way at the left of the political spectrum today. Eisenhower would be in outer space.”
Now, today's blog may give you the impression I am US-basing. That's not the intention.
As a small token of appreciation, I include two movies. The first one has a big wow-factor for me. In my student days as engineer we were still drawing on paper when designing something. We also had some courses on computer drawing but they were rather rough. Elon Musk (the founder of Paypal and current CEO of Tesla and Space X) posted a movie where they design pieces of a rocket in 3D with hand gestures (!) and then print it in 3D. He speaks of a revolution and that is exactly what it is. (The more critical reader would say that Elon is a born South-African, so this is not an example of how great the US is, but Elon's businesses were started, nurtured and grown in the US, so see it as a tribute to the good-old American Dream).
The second movie is posted by NASA doing a crash test of a helicopter on August 28. The research is aimed at improving the survivability of helicopter occupants. A very and much needed, noble goal. I am particularly intrigued in this test as I worked in car industry for 12 years, mainly dealing with car safety and have witnessed a lot of car crash tests and in my current job, I am amongst others responsible for helicopter safety. So this really is an interesting combination of my two worlds! I would love to see the readings from those dummies. Especially the two dressed in white (as they only had lap belts!).
You probably guessed the song that has to go with it: Crash Test Dummies - Mmm Mmm Mmm
