Guy Berger

A few months ago we were discussing the mysterious die-off of American bees. Some biologists may be onto the reason: 9/16/07

Point #1 -- This guy misunderstands the significance of "core" inflation (inflation which ignores changes in food and energy prices). Nobody disputes that food and energy prices are important (in fact they are very important). However, these tend to be quite volatile from month to month, which means that it's tough to tell what the underlying trend in inflation is when include them. In the long run it would be extremely foolish for a central bank to ignore them, especially if inflation is routinely higher/lower than core inflation. But in the short run the Fed is taking the right approach. Seasonal adjustments make sense. As MG said already, if you're going to compare pumpkin sales in October to pumpkin sales in November, you're obviously going to find a decline. But that doesn't tell you anything about the relative health of the pumpkin market; you have to adjust for higher pumpkin demand in October relative to November. Or in the inflation example -- if you're going to estimate oil price changes from March to August, you need to control for the fact that oil prices routinely go up in the summer. Otherwise you will overestimate the actual trend in inflation. I don't know enough about how seasonal adjustments are calculated to know how accurate they are. That said, I don't believe that central banks and statistical agencies in most rich countries are "cooking the books", so to speak. In some developing countries this is a different story. (eg Argentina) Point #2 - I assume he is responding to the cut in the Fed funds rate here. Like the French revolution, I think it's too early to tell whether this was a wise move. I am guessing the Fed figured (not without reason) that if they only cut 25 basis points, they would have ended up looking back a few months down the road and thinking "gee, I wish we had cut 50 basis points in the first place". Obviously if as a result of this cut the economy overheats and inflation ramps up, they will look really stupid (especially if they don't retighten monetary policy in response). Point #3 is going to take a much longer response that I don't have the time for right now. But I think it's mostly BS. Guy

My understanding of Northern Rock (which I have been following tangentially) was that the problem wasn't subprime. (In fact, most of the problems with "subprime", at least as far as financial markets go, don't have to do with the mortgages themselves, but rather with liquidity risk surrounding assets backed by subprime -- not the chance that those assets will default (very small), but rather the chance that you will have difficulty selling those assets in the short term.) The problem with Northern Rock was that it relied on funding from interbank borrowing, rather than deposits. Normally that is not a problem. But when the interbank lending market dried up in the recent weeks all of a sudden Northern Rock faced a serious crunch. I'll read Moose's article and comment about it shortly. Guy

This one was the cleverest:

This one is actually apropos given the hype over his new book:

Somebody posted this on the Miles list:

Al, In my opinion the band made its best music during 1971-73, both in the studio and live. Gotta go to work, will write more in detail tonight. Guy

I think on the particulars, the rating agencies are correct -- they were rating default risk, not liquidity risk. And from the data mentioned in this article, it seems like they were doing an OK job. (1% downgrades seems quite low; but perhaps the data.) For people to shout and scream that the rating agencies fucked things up... well, I just don't see it. It seems like a lot of buck-passing by investors that should have known better. That said, we're talking about a very serious conflict of interest. Perhaps the best solution would be to make them fully disclose the amount of money they are being paid by the issuer of the security they are rating. Needless to say that whatever "fix" legislators come up with will be a real mess.

Ubu, You can probably buy the original album as a replacement for cheap. That might not be aesthetically satisfying but you will get all the original music (if I remember the tracklist of the box correctly). I sympathize -- I get really pissed off when a favorite disc becomes unplayable or even mildly scratched. Guy

Grad school is a great place to meet intelligent, pretentious, weird-looking women. Guy

A more skeptical, though still sympathetic, review from Foreign Affairs magazine:

All nuclear reactors rely on nuclear fission, a process that was discovered in the 1930s. When certain heavy atoms are struck by a neutron, they absorb it, become unstable and split apart. This results in two lighter atoms, and two or three neutrons are ejected. The process releases large amounts of energy, much of it in the form of the kinetic energy of the fast-moving fission products. This kinetic energy is converted to heat as the fission products slow down. If the ejected neutrons go on to strike other unstable atoms nearby, those too can break apart, releasing further neutrons in a process known as a chain reaction. When enough of these neutrons produce further fissions—rather than escaping, bouncing off or being absorbed by atoms that do not split apart—the process becomes self-sustaining. An uncontrolled chain reaction within a large amount of fissionable material can lead to an explosive release of energy, as in nuclear weapons. But in nuclear reactors, which contain far less fissionable material, the chain reaction and the release of energy are carefully controlled. War and peace In 1942 the physicist Enrico Fermi led a group of scientists who built the first nuclear reactor as part of the Manhattan Project—America's effort to build the first atomic bomb. Although the reactor was simple in design, it included features that are part of almost every nuclear power plant today. The reactor core consisted of pellets of uranium fuel inside bricks made of graphite, which served as a “moderator”, reducing the speed of the neutrons in order to maximise their ability to cause further fissions. (Most reactors today use water as the moderator.) In addition, the set-up included “control rods” made of a material that absorbed neutrons. These rods could be inserted into the core to slow or shut down the chain reaction if necessary. Although all of this was done with a view to building an effective weapon, the scientists involved always knew that nuclear technologies also had promising peaceful uses. In 1953 America's president, Dwight Eisenhower, gave his famous “Atoms for Peace” speech before the United Nations General Assembly, in which he called for the controlled application of nuclear energy in a civilian context. In the mid-1950s the world's first civilian nuclear power stations appeared in America, Britain and Russia. America's first civilian nuclear power plant, of a type called a pressurised water reactor (PWR), was designed by Westinghouse and adapted from the reactors used in nuclear submarines. Inside a PWR, water—which is kept under high pressure to prevent it from boiling—has a double function. In a closed “primary” loop, it serves as a coolant for the reactor core and as a moderator, to slow down the fast neutrons created during fission. As the water in the primary loop circulates, it becomes very hot. This heat energy is then transferred to a secondary loop of water. The resulting steam is used to spin turbines that generate electricity. Nuclear's golden age In the 1950s the pursuit of atomic energy was viewed as a largely positive endeavour. In a speech in 1954 before a group of science writers, the head of America's Atomic Energy Commission, Lewis Strauss, even declared that one day nuclear power would be “too cheap to meter”. By the mid-1960s America's two leading reactor vendors, General Electric (GE) and Westinghouse, were involved in an intense competition. GE began to offer “turnkey” contracts to utilities, in which it delivered an entire nuclear plant for a fixed price. To keep up, Westinghouse followed suit, causing a surge in orders. But this sales ploy turned out to be a money-loser for both firms in the end. The boom in reactor construction coincided with the beginnings of America's environmental movement and a sense of growing unease about nuclear power. By the early 1970s uncertainties over radioactive-waste disposal, the effects of radiation and the potential consequences of a nuclear accident prompted a backlash. One frightening scenario was the “China Syndrome”: the idea that molten radioactive fuel undergoing a runaway reaction might burn its way through the bottom of the reactor's pressure vessel and containment structure, and then down into the Earth. Of course the fuel would never actually reach China, but were it to breach the containment structure, the result could be a huge release of radioactivity. As electricity demand levelled off and interest rates shot up, applications to build nuclear reactors started to decline, at least in America. Then in 1979 a serious accident occurred at a plant at Three Mile Island, near Harrisburg, Pennsylvania. A combination of mechanical failures and operator errors caused a partial melting of the reactor core. Fortunately the pressure vessel housing the core held, and virtually no dangerous radioactive gases escaped from the plant, says J. Samuel Walker, the historian of the Nuclear Regulatory Commission, the agency that regulates America's nuclear power plants. Although the accident nearly killed off America's nuclear-power industry, it did not harm any people. But a few years later a true disaster occurred. In 1986 a reactor at Chernobyl in Ukraine became unstable, and a power surge inside the core led to two explosions that destroyed the reactor and blew its roof off. As a result, significant amounts of radioactive material escaped into the environment. About 30 emergency workers died of radiation exposure shortly after the accident. Thousands more people who lived in contaminated areas developed serious health problems, some of them fatal. The cause of the accident was found to be a combination of operator errors and inherent flaws in the plant's design. Industry insiders pointed out that reactors based on this flawed design had not been deployed in Western countries. Even so, the accident further undermined public confidence in nuclear power. Although the nuclear industry faced decline or stagnation in many Western countries in the 1980s, it thrived in one of them: France. After the oil crisis of 1973, France decided to pursue the goal of fossil-fuel independence. With few energy resources of its own, pursuing nuclear power seemed like the best strategy. All the commercial nuclear plants operating in France today were based on technology devised by Westinghouse, which licensed its PWR design to France in the 1960s. Today the country has 59 nuclear reactors supplying 78% of its electricity. Nuclear has worked well in France in part because it is accepted by politicians and the public alike, so there are few delays due to protests or planning problems. Elsewhere, these have lengthened the construction period and enormously increased costs. Once up and running, however, nuclear plants have a distinct advantage over those run on coal or natural gas: they need comparatively little fuel to operate. Although the price of uranium jumped from about $70 per pound in January to about $130 in mid-July, operating costs of nuclear power plants have changed very little. (Construction accounts for as much as three-quarters of the cost of nuclear generation.) Moreover, the rise in the price has prompted an exploration boom that will ultimately lead to more mines and greater supply. Uranium is not thought to be particularly scarce—it has simply not been very profitable to look for it recently. The latest generation of reactors, which evolved from models constructed in the 1970s and 1980s, include important improvements over prior designs. Westinghouse's new AP1000, for example, has “passive safety” systems that can prevent a meltdown during an emergency without operator intervention. If the reactor loses pressure because of a loss of coolant, for example, pressurised tanks deliver water to the core, since the pressure in the tanks is higher than that in the core, explains Howard Bruschi, who has worked for Westinghouse since the 1960s and is now a consultant to the company. The new reactor's simplified design also means that fewer motors, pumps and pipes are needed, reducing not only the potential for mechanical errors, but also costs of maintenance, inspections and repairs. Westinghouse recently agreed to provide four new plants to China. Soul of a new reactor Meanwhile, Areva, a French nuclear company, is engineering ever more powerful plants. Its first reactor, which began operating in 1977, was rated at 900 megawatts; its latest model, the evolutionary power reactor (EPR), is a 1,600-megawatt design. The company has already begun building two such plants in Europe: one in Finland, which is now expected to start operating in 2011, about two years late, and another in France. Both the EPR and the AP1000, along with GE's latest design, are among the plants under consideration by American utilities. A demonstration plant of a completely different type, a “pebble bed” reactor, is scheduled to be built in South Africa starting in 2009. Based on technology that originated in Germany, its design is unique in several ways. For one thing, its small size (165 megawatts) should make it comparatively fast and cheap to build; depending on power needs, several units sharing a single control room could be constructed on one site. And the uranium fuel is encapsulated in rugged “pebbles”, the size of tennis balls, which are designed to withstand a loss of coolant without disintegrating, making the reactor extremely safe. Andrew Kadak, a professor at the Massachusetts Institute of Technology (MIT), who has been developing a smaller, alternative pebble-bed design with his students, is convinced that “these reactors cannot melt down.” Even though new designs for nuclear plants may be safer, they still generate toxic waste. After about three years of use, the fuel is depleted of most fissile uranium but has accumulated long-lived radioactive materials that cannot be burned in conventional reactors. At the moment most such waste is stored near the plant until it can be moved to a permanent facility. But no country is yet operating a final disposal site for highly radioactive nuclear waste. America's Yucca Mountain repository, for example, is not expected to be ready for use for many years, if ever. In some countries nuclear waste is “reprocessed”—a procedure in which plutonium is separated from the rest of the spent fuel, which can then be made into new fuel. Plutonium, of course, can be used to make nuclear weapons. Because of concern over nuclear proliferation, America has not engaged in civilian reprocessing since 1977. As part of a new multinational initiative called the Global Nuclear Energy Partnership (GNEP), however, America's Department of Energy is supporting a type of spent fuel reprocessing which does not separate the plutonium from other highly radioactive materials in the waste, thus making it more resistant to proliferation than traditional reprocessing. This mixture of plutonium and other radioactive elements could then be turned into fuel suitable for use in “fast” reactors. Most reactors in operation today are called “thermal” reactors, because they use a moderator to slow down the neutrons and promote fission. Fast reactors, in contrast, do not employ moderators and use much faster neutrons to produce fissions. So they can consume many of the long-lived radioactive materials that thermal reactors cannot. AP They don't build them like they used to This approach could extract far more energy from a given amount of nuclear fuel while at the same time reducing the volume and toxicity of nuclear waste. Proponents of fast reactors reckon that most of the remaining waste would need to be stored for only a few centuries, perhaps, rather than hundreds of thousands of years, once the most radioactive elements had been separated out. According to the Nuclear Energy Institute, a lobby group in Washington, DC, this could mean that America would need only one nuclear-waste repository. In the long term, a fleet of fast reactors could use nuclear fuel so efficiently that “for all practical purposes, the uranium would be inexhaustible,” says William Hannum, a nuclear physicist who used to work at America's Argonne National Laboratory. But opponents of this strategy call it a distraction that could hinder the renewal of the nuclear power industry. For one thing, many new fast reactors and fuel-reprocessing facilities would have to be built, adding billions of dollars to the enormous sums already required for new nuclear plants. In addition, some of the technologies in question have not been demonstrated on a commercial scale yet. And the GNEP reverses America's ban on civilian reprocessing, which critics say could encourage the proliferation of weapons-grade materials. In the end, the deployment of new nuclear reactors will depend on many factors, including successful waste and proliferation management, improved economics, and perhaps most important, convincing the public that nuclear reactors can be operated safely. Despite these obstacles, there is an undeniable mood of optimism in the industry. Whether that will be enough to spark the deployment of the hundreds of reactors that will be needed to help mitigate the effects of global warming remains to be seen, cautions Richard Lester, a professor of nuclear science and engineering at MIT. Were there to be another disaster like Chernobyl, or a successful terrorist attack on a nuclear plant, all bets would be off. But for now most people in the industry agree that nuclear power's prospects look brighter than they have in a long time.

Shana tova, fellas. Guy

Damn, that's horrible. The guy was a visionary. Guy

Dialogue is a great date and quite a showcase for Hill the composer, but it has less of Hill the pianist than albums under his own name. Guy

I should also add that Andrew's late 60s work tends to be more accessible than his mid 60s work. None of those seem to be on the list, but if you are interested check out Passing Ships or Dance with Death. Guy

Judgment and Smoke Stack are the most straight ahead on that list. However, Black Fire is the first thing I would get after Point of Departure. Guy

Interesting obituary. Anybody heard this guy's music?

Several times - I Senegal. And Dakar is like New York, only fast! and civilised. MG I'll have to get there some day, I'm sure it's fantastic. Some of my brother's friends were in Senegal (not sure if it was Dakar or elsewhere) for the Peace Corps and were foolish enough (after being forewarned) to speak Hebrew at a bar. They got beaten up really badly by some thugs, but I'm guessing it was for money (yay, foreigners!) rather than anti-Semitic reasons. I'm guessing few people in Senegal would even recognize the language. Guy

downtown Dakar: Anybody been there? Guy

Normally I would agree with you Chuck. I'm not wasting my money on the iPhone. I remember when I bought my first IPod, I tried my best to avoid buying an Apple product. However, I came to the conclusion that Apple was offering the best product in its class. Maybe that's changed since then. Guy ps I'm looking forward to the iTurd (new product that will make your shit come out in a glistening white color)...

My 20 gig ipod is slowly dying. I'm having battery issues (it occasionally shuts off due to "low battery" even when 75% charged) and 20 gigs isn't enough for all the music I want to put on there. I'm trying to figure out whether I should get the 80 or 160 gig, given the relatively small difference in price. I figure that while 80 gig will almost surely be sufficient, I could encode at 192 if I get the bigger one. Then again, with the cheapo head phones I use I probably won't be able to tell the difference. Even the 160 will be cheaper than the 20 gig, which I bought about 3 years ago. Guy

I think it's interesting to what degree Google's founders (and many, though not all, of its employees) believe in their company's "mission." We'll see if that persists once the company's growth slows and the endless gusher of money stops. (I'm a skeptic.) 9/4/2007

I went through some of the old Strong Bad emails. Still hilarious. Are they still making them? I quit sometime after "Dangeresque 3" because they stopped being funny, but maybe it's gotten better since then. Guy ps Strong Bad email favorites some kinda robot guitar viklas techno your friends kids book