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
We homo sapiens are a strange lot aren't we. No one blinks when ten thousands of civilians are slaughtered with guns, bombs and mortar attacks. A couple of hundred die in a gas attack and the world calls it monstrous and suddenly some countries happily switch to the punishing mode under the motto: 'let us stop the killing with gas by bombing them'. Did anyone, anyone, actually come up with a plan to stop the bloodshed? Or am I too naive and is that not the intent. And whatever happened to learning from history or from past mistakes? Those with their fingers at the button should realise by now that you can't bomb a country into democracy. At least the UK Parliament put a stop to it for now.
With many great thinkers and philosophers contemplating if the democratic system has passed its expiry date, let me remind you all that the UK's vote is the second time in a year that a national Parliament has stopped (at least for some time), what seemed to be an multi-national given. The first time was when the Cyprus parliament voted down the first full bail-in proposal that all Cypriots should pass on part of their savings to save the banks and the country. My respect to those Parliaments who vote using their common sense and not their political agendas.
Those who want to understand the Middle East, see attached summary by KN Al-Sabah published this week in the FT:
Now over to something completely different. This is a headline from Wednesday in the New York Times:
"Researcher Controls Another Person’s Brain Over the Internet".
Que????
Yes indeed. Researchers at the University of Washington have successfully connected two human brains over the internet. One researcher moved the hand of the other researcher by just thinking about it whilst their brains were, via EEG's, connected to each other through the internet. It's the first time they experimented from human to human, but it worked before between rats and it worked from a human to a rat (a human moved the rat's tail just by thinking about it, the article doesn't say what the rat's retaliation was...). Read the full article here: http://bits.blogs.nytimes.com/2013/08/27/researcher-controls-another-persons-brain-over-the-internet/?smid=tw-share&_r=0
I'm sure this can lead to wonderful applications that can dramatically improve the life of paralysed patients but would I want my brain to be connected, let alone controlled, by someone else's brain? No thank you. My thoughts are purely my own. This world is getting crazy.
Whilst listening to the news this week I couldn't help thinking about a song from The Machines back in the eighties. The Machines were a Belgian band (don't worry they sing in English). The song that I've been humming all week is: 'I See the Lies in Your Eyes' (only the title is relevant as it is actually a love song).
And now we need something beautiful to offset these dark thoughts. How about a picture of a Venus eclipse of the Sun? Courtesy of NASA we have this amazing photo with the Sun imaged in three colours of ultraviolet light by the Earth-orbiting Solar Dynamics Observatory, with the black circle being Venus. Enjoy it as the next Venusian solar eclipse will occur in 2117.
I just finished reading 'Why nations fail'. A bit of a struggle I must admit.
If you are into history: read it. Bear in mind however that history is being told from a very Anglo-Saxon world-view. If that bothers you (like it did with me), still read it but try not to be too irritated by it. There is some good food for thought in the thesis they propose as to why nations fail. Summarised in one sentence it would be something line: extractive economic institutions that are structured to extract resources from the many by the few and are synergistically linked to extractive political institutions which concentrate power in the hands of few.
A bit of a mouthful isn't it (now you know why the read was such a struggle). But it does make some sense. Even though the authors say several times that prosperity is not eternal in a given nation, they do give the impression that in our western world we will prosper on for the next century. And that's what worries me. The authors seem not to have grasped the idea that established democracies with inclusive political and economic institutions can fail too (when they become too top-down heavy). If you want to understand really why nations fail and ignore the sort of colonial Anglo-Saxon speak of this book, I can recommend the very intelligent book 'The collapse of complex societies' by Tainter. I'm not going to spoil it for you by explaining here what it says, but if, no when!, you read it, you will better understand what is happening in our world today.
Since this Summer, the Belgian Airforce seems to have put a low level flying route above my village. It coincides with me starting this blog. Is the Belgian military keeping, NSA-wise, an eye on me ;-)? It is fun though, I used to watch Starfighters, Mirage V's and F-16's on low level flying above my parents place when I was a kid, and now they seem to have found me again! Well the F-16's at least... Just for fun a picture of an F-16 at the 20102 airshow in Beauvechain. Whenever I catch one above my house I'll post it as well.
Talking about low level flying... I came across some fascinating video's of low passes. I know what you are thinking: we've all seen it, all of us who fly have done it (admit it, it is fun). But these are just mind boggling. You remember that TAP A300 routine from a couple of years ago (see http://www.youtube.com/watch?v=26H-WzIe858)? That was impressive. Here is another one unknown to me before. This time a 747-300 from Aerosur, and honestly, when it banks away, it would have scared the living daylights out of me : http://www.youtube.com/watch?v=B6s0pBqIriw
In my blog of July 3 (The news you may have missed, debt and a walk on Mars) I spoke to you about the BIS (Bank of International Settlements which is like the central bank of central banks). In their annual report they said that all the extra money created through quantitative easing (by the US, UK and Japan), and the long term refinancing operations (by the ECB) has not solved anything, but just kicked the can further down the road. And that the can got a whole lot bigger (global debt has risen with 23000 billion euro).
They have just released another report titled 'Caveat Creditor'. Says it all really. Their claim this time is simple: if someone is overlending that is not only his mistake but also the responsibility of his creditor who granted all those loans. In this particular case: European banks gave too many loans to Southern states in "expectations of a bail-out". Well they weren't wrong on their expectations weren't they... It was not the first time banks fell into that trap either: "This failure of lenders is not a new phenomenon. A key lesson from a succession of emerging market crises in the 1980s and 1990s was that lenders – particularly banks in the advanced economies – had been reckless." That's pretty straightforward language! The BIS concludes that "symmetry in adjustment between creditors and debtors" is necessary to get us out of the crisis. In common speak: be less gready - everyone. That is not what is happening today however with surplus states continuing giving loans to overdebted countries. The BIS finds this a "dangerous" structure and with capital flow reversals that can occur at any time it could have "devastating consequences". Uh-oh...
You can read the full report here: http://www.bis.org/publ/work419.pdf
I give in, I can't resist the pictures and feedback from Oshkosh any longer, it is too tempting. I was right last week, they didn't have an Avro Shackleton, what they did have was a B17 formation flying with the Jetman. Yep indeed. Watch this video: https://www.youtube.com/watch?v=qUUYuvheS3M. Now that's what I call flying, if anyone has a spare set of wings and jet engines in his shed, let me know. The pictures are from the Breitling website and the B-17 Champaign Lady facebook page (https://www.facebook.com/pages/B-17-Champaign-Lady/247176712036792).
And for those of you for whom it is not enough rocket-like, have a look at this video: a thundering video shot from the Space Shuttle boosters during launch. Watch it until the end and put your speakers on! http://www.youtube.com/watch?v=2aCOyOvOw5c#at=490
I stumbled over a small article on Reuters that wasn't picked up in mainstream media. It's important nevertheless: the Cypriot bail-in has apparently been raised to 47,5% (up from 37,3% - see http://uk.reuters.com/article/2013/07/28/uk-cyprus-bank-idUKBRE96R03Y20130728). Let me translate that for you: everyone in Cyprus who had > € 100000,- on an account, will be robbed of 47,5% of everything above that € 100000,- mark. Yes 'robbed'. How else do you call it when politicians and European institutions decide that you loose a big part of your money. And don't give me anything of that: "the rich can afford it" nonsense. This is not about the rich. It is confiscation of savings, something people have worked for all their lives. Just imagine you just sold your house to go and live in a retirement home! Or you were saving to guy a house! Thank you very much says the bank and the government. And Cypriots should still count their blessings because if it hadn't been for some brave parliamentarians who blocked the first proposal of going through, the confiscation would have applied to all deposit holders, without a minimum.
In the mean time in Greece the situation is so bad it is heart braking. Our national radio 1 sent a reporter to Greece and he gave a description from the war zone: people have no money for medication, those who are diagnosed with cancer actually get a dead sentence as they don't have the money for the therapy, infants are brought in underfed, a three month baby had not gained any weight since his birth, people who still have some money for food and medicine try to share as much as they can with others who don't, voluntary organisations are set up for the distribution of food and medicine. Does this read like a refugee camp on the border between Syria and Turkey? Well this is what is happening in Greece right now. To add insult to injury, the Troika published this week its third review on Greece's second economic adjustment program saying "Greece continues to make overall, albeit often slow, progress under the Second Economic Adjustment Programme..." (http://ec.europa.eu/economy_finance/publications/occasional_paper/2013/pdf/ocp159_summary_en.pdf)
But Europe is fine,all is well, the politicians are enjoying their holidays taking a break from the eurocrisis that seems only like a bad nightmare to them. And then surprise on their (the politicians) faces when they see the results of the latest eurobarometer. You can read the full Eurobarometer report here: http://ec.europa.eu/public_opinion/archives/eb/eb79/eb79_first_en.pdf
Dear Mr Van Rompuy and Mr Barroso, your little project doesn't look well:
As I write this, aviation's walhalla is located at N43°59.06’ W88°33.42’. Google it and you will see a map of Wittman Regional Airport the home of the EAA Airventure in Oshkosh. Nope, I am not going to put up some pictures of this year's event. It's too painful to look at these whilst being stuck in an office in Brussels. But by all means have a look on their website: http://www.airventure.org/
It did make me think about those very first airshows I went to. Of course nothing comparable to Oshkosh but still. One vivid memory is of the Leopoldsburg Sanicole airshow. These were the days when public was still allowed close up to the action (I'm showing my age here...). In fact in this case, the barriers were right on the edge of the grass strip. Which resulted in these pictures. You have to excuse me for the poor quality, in those days I had a cheap camera with no zoom and no possibility to tweak the exposure or shutter speed. A basic push-the-button-swing-the-handle-5-times-to-get-to-the-next-frame camera. Yes I know I am that old already. In case you are wondering what the blurs are on the pictures: a Pitss Special S-2A of the Chilean Halcones (isn't that exotic to see in Belgium!), a Let L-410 (just after rotation) and the venerable Avro Shackleton (do you remember that airplane!? - bet they don't have one of these in Oshkosh :-) ). Those were the days!
