The geo-politics of 2024: a seriously good read

Here's a seriously good offering by a heavyweight US historian of the geopolitics of the modern age.  We all have our amateur views on this stuff: but Zelikow is a professional, giving thought-provoking inputs from a range of telling 20th century precedents and parallels that I certainly wasn't familiar with and I'm guessing few others would be, either.  There are also some very basic history lessons the whole world should be taking  ... 

The Axis powers all ... hoped America would decide to stay in its hemisphere and mind its own business. They were not sure just when or whether they should do anything that would bring the United States into the war. Though each side started from a posture of basic hostility, they had to make new choices. The United States decided to arm Germany’s enemies. And it decided not to abandon beleaguered China ... Roosevelt did try hard to find an accommodation with Japan. His efforts in the first half of 1941 were entirely fruitless ... At all times Japan was prepared to negotiate about Indochina. It was even prepared to forego the great plans for the southward advance into resource-rich British and Dutch colonies. But Japan was not prepared to yield its domination of China ... Tokyo redoubled its efforts, diplomatically and militarily. The new government decided that it would either conclude a deal by the end of November - even a temporary one - or it would go to war. In this crunch time, the United States still would not write China off. This U.S. commitment to China was not well-understood at the time or by historians now. For Roosevelt, the commitment mainly arose from his complex calculations about the war in Europe - the need to keep the Soviet Union from collapse and therefore the need to keep Japanese troops tied down in China.   It is worth recalling today, as Russia and China confront the United States, that the proximate reason for America’s entry into World War II was its determination to save those two countries from extinction.  (my emphasis)

He feeds all the historical considerations into his analysis of today's situation for America (and Russia, China, Taiwan, Japan, Iran ...).   His lengthy conclusions start thus: 

I believe the anti-American partnership has probably decided to double down. They are probably preparing in earnest for a period of major confrontation. My view on this rests on my analysis of the history presented above as well as some key assessments of Moscow, Tehran, Beijing, and - to a lesser extent - Pyongyang. Xi and Putin regard themselves as world-historical men of destiny. They believe they are capable of decisive, strategic action. Xi ranks himself with Mao and Stalin. Putin evokes the memory of Peter the Great. In China, Russia, and Iran the information and decision environments are cloistered. In China, Russia, and Iran the propaganda ministries have already been preparing their populations for a time of war, great sacrifice, and existential struggle ...  I believe that some Iranians have now stored up so much resentment and hatred that they may be desperate to do almost anything to get at Israel. The North Korean intentions seem driven, but as opaque as usual. My working hypothesis is that they are preparing for a period of conflict and that they are wondering about possible opportunities to play an important role. In each capital there are arguments for retrenchment on one side and, on the other, for more militancy. The more militant factions have likely been arguing and speculating about ways to turn over the table. Beijing’s outlook is both the most important and the most difficult to assess, since its government has visibly sought a policy of “peaceful coexistence” with the United States. I think it is most likely that Beijing has assessed that the die has been cast for a period of escalating confrontation**.

Strongly recommended.  Incidentally, given the foregoing, the idea that appeasing Putin over Ukraine makes things better, or would have if we'd done it prior to 2022, seems to me a very odd one.

ND 

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**He has a very interesting view on China's most likely strategy for Taiwan

The curious, oh-so-Russian tale of General Popov (1)

Popular Popov:  a soldiers' soldier

Way down the rankings on the War in Ukraine pages is the newly-revived story of Russian General Popov, who is now being charged with 'fraud of a particularly extensive nature'.  It's alleged he sold thousands of tonnes of steel, intended for Russian fortifications against the ill-fated 2023 Ukrainian counter-offensive, to a shady metals dealer for over $1m in cash that's been found at his house.  His fall from grace happened late last summer, but at the time it seemed to do with his public complaints that troop rotations weren't being made sufficiently frequently.  No charges were brought back then, nor corruption even mentioned; he'd slid from public attention and been sent to Syria. 

Given that today's backdrop is the recent high-profile 'sideways promotion' of Defence Minister Shoigu, his replacement with an economist known for efficiency, and several other senior officials also being done for corruption of various kinds, it's easy to imagine the new charges against Popov are just part of a traditional changing-of-the guard purge that is so popular with communist and former-communist regimes: happens all the time.  Odd that he was a critic of Shoigu (so why should he go down now, as Shoigu himself falls from favour?) but hey, clearing the decks is clearing the decks.  He probably pissed off others as well.

The reaction from the Russian 'milblogger' fraternity has been very interesting: I.I.Popov is extremely popular, a "soldiers' soldier", credited (by the soldiery, at least) of being the main factor behind the crucial, successful defence of Tokmak on the Zaporizhia front last year.  Here are some typical contributions: 

• Nothing has yet been proven, and we suspect that Ivan Ivanovich could have suffered for his statements.  It is unseemly to keep one of the heroes of our time behind bars
• Front line soldiers were greatly demoralized by news of the removal of the "simple" and "relatable" honest General Popov. Yes, perhaps he had his flaws. But in the context of [other] commanders who sacrificed dozens of personnel for the sake of their next "Star of the Hero" medal, Popov clearly stood out for the better
• The experienced commander, who was doted upon by his subordinates ...  
• I know for sure that without his hands-on leadership in organizing the defensive lines [in 2023], we would hardly have been ready to meet the Armed Forces of Ukraine at the peak of their power
• General Ivan Popov is not a thief. He is a soldier. However... we forgive thieves too. Or they don't get imprisoned at all. A soldier cannot always count on this
• If the investigation proves his guilt, then he must suffer the punishment he deserves, but all the good he has done for the Russian army must be taken into account. He must not be allowed to be made a scapegoat. 

Etc etc.  here are several strands here.  (a) Maybe he's being fitted up (for his temerity to complain about lack of troop rotations);  (b) Maybe he did make off with some steel, but hey, everyone in his position does stuff like that - so what?  (c) Maybe he's too popular for his own good.

(a) is of course entirely possible: we may never know.  Regimes like Russia's do that kind of thing all the time.  In countries with no rule of law, everyone stands in permanent peril of being condemned on trumped-up charges, and those in power never mind reminding people of it from time to time.  I'll return to (b) - a characteristically Russian sentiment - in a second post.

(c) is also interesting: and it's not just in light of the extraordinary Prigozhin mutiny of last year.  Communist and former-communist regimes not only fear the rule of law, they fear the military as a credible alternative source of power.  As soon as WW2 ended, Stalin effectively banished the legendary - and very popular - Zhukov, the clear victor of the eastern front.  Everyone knew why.  The first thing Lenin did after the 1917 revolution was to demobilize the army (even while technically still at war with Germany!), for fear of having armed men loose on the streets.  Here's another telling recent milblog entry on the Popov case: 

A general who makes mistakes, and a popular general who makes mistakes, are two completely different matters from the point of view of 'the system'. Whether he is really guilty of what he is accused of is not so important ...

Poor old Popov.  Keep away from windows and private planes, eh? 

ND 

The return of the 'creative' estate agents

A while ago I featured one of the more creative examples of the estate agents' art of describing properties for sale in euphemistic terms.  It was an inaccessible house in the middle of a wood that used to be a sand quarry just a mile across the suburbs from Schloss Drew.   The agent termed it "Charming Home in Very Secluded Location. Extremely Leafy Outlooks".

Well, now the same agent has another property to shift, this time even closer to the Drew residence; and the circumstances are not dissimilar as you can see from a pic I took myself.  The vocab they've reached for looks awfully similar, too.

Unique Secluded Location With Leafy Outlooks ... Large Rear Garden With Leafy Backdrop 

One hopes prospective buyers will do their own DD, because 'leafy' is not the only aspect of the backdrop.  This place is in another wood that used to be a sand quarry, where the enterprising local youth have created an elaborate BMX bike course with some fairly stiff obstacles and jumps.  When, several decades ago, I was a local councillor, this was in my patch: and the warmest applause I ever received at a public meeting was when I vowed I would ensure the Council would put a stop to the BMX-ers here.  Revisiting the site of my political triumph this week, I discovered to my amazement that, not only has the Council evidently given up the struggle now, they've even conferred an ironic blessing upon the victors by erecting a sign eschewing all responsibility for maintaining the private-enterprise course, so that anyone using it does so at their own risk!

A little deeper into the wood there is, I find, a quite enormous tree house built of railway sleepers and huge steel bolts.  By whom?  I must try to find out.  It's of a construction that had me looking all around for signs of zipwires etc, but I could find none.  Again, every indication this is an entirely freelance venture - no Council 'elf-n-safety officer would dare to be seen anywhere near it. 

"Unique location" and "leafy" it may indeed be - but I'm less sure about secluded ...   Anyone got other nice examples of the estate agents' art?

ND

Starmer and his shameless way with words

I'm not entirely sure why we bother, but it seems GE 2024 ('25?) has kicked off with Starmer's "6 first steps".  Just for completeness:

1. Deliver economic stability:  empty.  Only on the list - at the top - as some kind of pro forma finger-crossing anti-Truss-style-meltdown incantation. 
2. Cut NHS waiting times:  they all say that, and always have done.  Doubtless some number-juggling possibilities, otherwise it can't in practice be delivered by anything short of vast sums of money a la Blair government.
3. Launch a new Border Security Command:  empty.  A trivial opportunity to give highly paid jobs to a handful of ex coppers etc.  Will impress nobody, & certainly not the people-smugglers.
4. Set up Great British Energy:  empty.  Is any Green even vaguely satisfied by this as a commitment to anything they really care about?  Whatever happened to "the climate emergency is the #1 top priority for all of mankind, trumping all others" etc etc?
5. Crack down on antisocial behaviour:  empty.  Can't be delivered.
6. Recruit 6,500 new teachers:  empty.  There are 567,000 teachers in the UK.  Assuming an average career of 25 years, that means approx 20,000 are recruited annually in any case.  Tweak those assumptions as you like, but 6,500 is still an empty number.

Aside, then, from #1 (purely for the finance sector) the rest are empty words corresponding to polling data on popular priorities.  NHS > immigration > climate > ASB > education.

*  *  *  *

Anyhow, as literally everyone has spotted, Starmer has cheerfully reneged on everything he's ever said.  His entire strategy rests on "looking the part" = sober white man in suit.  (POCs in suits, clearly in vogue recently, don't really seem to have made much of a mark in any part of the UK, though I suppose Khan would beg to differ and he may have a point.)  Starmer's reverse-ferret word-gaming is shameless enough to impress any spin doctor anywhere, and as a complete aside, I noticed a really cute one last week.  One of his biggest faux-pas of recent times came last October when he very deliberately said Israel had the right to cut off food, water and electricity to Gaza.  Last week he had this played back to him and he "welcomed" the opportunity to remind everyone that he'd immediately corrected the misunderstanding that he could ;possibly have meant what he said: he had of course meant the right to self defence, as he'd immediately made clear.  

Except, we know that wasn't what happened.  In fact, for several days afterwards, his people were instructed to hit the airwaves with highly equivocal explanations of what he'd said that didn't in any way represent an immediate and clear correction: and well to the fore in this sophistry was Emily Thornberry.  And it was she, last week, who popped up with more of the same, because she now has a clever argument that he was right all along!  It goes like this:  he was speaking only a couple of days after 7 Oct.  Israel had just commenced anti-Hamas operations, and as a purely temporary tactical military expedient, cutting off electricity etc to your enemy is perfectly OK.  So what he said was OK, too!

Amazing.  How long will these people get any benefit of the doubt whatsoever in government?  The Left hates them deeply: the Greens soon will; and you can see why.

ND      

Where will the engineers come from?

Recently we aired the thesis that the oil & gas majors (Exxon, Shell, BP, Total, Equinor et al) have effectively given up on net zero and, with greater or lesser degrees of 'green camouflage', intend to be sure of their share of many more decades of mainstream hydrocarbon business.  Shell was Exhibit 'A'.  Now we read: 

Shell to close Chinese green power generation business            Decision comes amid wider Western exodus from communist country

Warm, fuzzy  ...  pic: Octopus Energy, of course! 
Their London HQ really is like that

That's interesting for another reason.  The other day I met a senior Shell bod who told me they can't recruit UK or US new-graduate engineers for love nor money.  They can't even retain the ones they've got.  Apparently, GenZ kids don't much want to be engineers anyway; and those that do, want to save the planet in some cosy, purple-Octopus manner.  I'm guessing these kids hope this all comes to pass without their being made to do Hard Sums, too. 

So: to which universities does Shell go with its recruiting campaigns these days, then?   Ans: those of the Far East, almost exclusively.  It's not just the source of underpaid care workers and nail-bar slaves, then.

The Greens hope(d) to winkle the oil & gas cos out via ESG & investment boycotts, but that doesn't seem to be working as planned.  If Green indoctrination starves them of home-nation staff, but can't prevent bright, diligent, mobile Chinese / Malay / Vietnamese / Filipino engineers from filling their ranks, a decade from now, those oil & gas companies are going to have a very odd profile.

Perhaps the Army could also recruit there, too?  The Gurkhas have always been enthusiastic recruits.  And I bet you wouldn't need to worry about all that pronoun nonsense that's infected the Armed Forces these days.

ND

Trade war with China, hmm?

"The EU has restated its readiness to launch a trade war with China over imports of cheap electric cars, steel and cheap solar and wind technology, with Ursula von der Leyen saying the bloc will “not waver” from protecting industries and jobs after a meeting with the Chinese president, Xi Jinping, on his multi-day tour of Europe ...

If she's serious, the cost of (inter alia) net-zero programmes across Europe will go through the roof: and in principle at least, that's non-discretionary spending.  It'll be made all the more acute by the forthcoming Carbon Border Adjustment Mechanism.  I presume it would also be the final nail in the coffin of German exports to China.  And who'd have any euros left over for Ukraine?  It's quite a bluff, if that's what it is.

If she means it, well all I can say is: assuming the UK would somehow get swept up in this rather than being a lucky beneficiary of ramped-up Chinese dumping, then not for the first time in recent years, I will be very glad of my substantial hedge against inflation.  (No, not gold - that's against Bad News.)

Incidentally, you gotta smile at the nasty conference-hall-style chair Macron gave Xi at the Élysée.  That wobbly table looks rather egalitarian, too ...   He gave Trump a much nicer time.

ND

Trouble at t'campus: where is this going?

I was a teenager when the anti-war protests hit US universities (and Grosvenor Square) and there was one of those historically quite frequent Paris uprisings.  It all seemed fairly apocalyptic at the time, with an undercurrent of Marxism & Trotskyism and something of a 'radicalisation' of a cohort of youth.  University-educated youth, that is, which in the UK at that time was a fairly modest percentage of the whole.  Large books are written on the impact this had - which wasn't nearly as much as its instigators hoped; certainly not as radical or instantaneous as they expected, even if it might have set off some kind of decades-long Gramscian process.

When I was at the university myself in the '70s, things were still fairly 'robust'.  There were pro-IRA meetings in pubs (with the occasional actual IRA man in attendance) and a readiness to resort to occupations of buildings, street-skirmishing, fist-fights etc on a fairly frequent basis.  I recall a spectacular (and very well-organised) pitch battle between the Trots and a visiting band of National Front: a set-piece medieval contest.  The 1980s seemed to put an end to this, and a curiously placid thirty-year period has ensued where very little campus violence has happened at all**.

Well, if the USA is its usual harbinger of trends, this might all be about to end.  In America there's no mainstream political outlet for pro-Palestinian sentiment (not even Bernie Sanders), absent which something ad hoc is bound to occur.  And there's a fairly violent anti-anti reaction, seemingly from off campus.  As happened in the '60s, it falls to an out-of-touch Democrat to preside over this, so a statesmanlike resolution seems unlikely and matters will fall to the frequently less-than-impressive local authorities.  The university authorities also seem fairly clueless as to what to do.  And elections loom.

Any lessons for us?  Well, Starmer is dead set against having the 'official' Labour Party offer any sort of mainstream political outlet for pro-Palestinian sentiment; and the university authorities are fairly clueless ... so we're also in a position where revolting students - in a vastly bigger overall student population than 50-60 years ago - are left to their own devices++.  Oh, and yes, elections loom here, too.

There are many dimensions to this but one that interests me particularly is: how does it play out in the GE?  Will the malcontents all vote for Galloway's party?  The Greens?  I just can't see a political pressure-valve for pro-Palestinian students, or indeed anyone with those sympathies.  Or maybe we find there aren't so many malcontents at all.

The 'traditional' student rebel never wanted a mainstream political outlet anyway, as a matter of pride.  They wanted to hate The Man in all his besuited manifestations.  Maybe, then, they are quietly happy at their rebellious work today, and will just graduate in due course to get on with the rest of their lives.  Could be a few smashed windows in the meantime, however.  Oh, and no statesmanlike resolution from Prime Minister "DPP" Starmer, either.

ND 

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** Oddly, though, the little dears are so permanently petrified (of whom?) that there are key-pad locks on every door, where once everyone came and went as they pleased.  I have various fairly regular contacts with undergraduates and sometimes over a drink they will say - it seems your generation had more fun than we do ..?   I think they are right.  It's sad.

++ I haven't been to Germany for a while but from a distance it looks like many of the same factors are at work there, too.  France?

Net Zero contradictions: SNP/Green fallout is symptomatic

As argued here several times, governments are deeply ill-advised to set "legally binding targets" for Net Zero policies.  Well, LBTs for almost anything actually; because somebody litigious will be displeased when a target is missed.  How much time and energy can any government afford to spend defending such legal actions?  Yet that's what is happening increasingly across those parts of the world  - UK, EU, USA etc - where governments can be challenged in these ways by anyone with the wonga / sympathetic lawyers etc to muster a challenge (& make the challenge without getting a 'Visit' to dissuade them from their actions).  Since some of these targets are essentially out of reach, it's child's play to demonstrate the government is "not doing enough" (although there's a trap down that road for the litigant, we'll come on to later).    

One or both of two reactions are inevitable.  (i) Governments will take away the means for challenges to be mounted: (ii) they will row back from legally binding targets.  Whatever the attractions of the former to ministers not much concerned for good governance, without doubt the latter is the correct approach, in logic and in law. 

And in Scotland, on specifically the Net Zero issue we've just seen the SNP / Green coalition's first minister Humza Yousaf do exactly that.  It rather seems he did it without consulting the Greens - not much point, really - and now they are parting company, Yousaf unilaterally jumping the SNP out of the Coalition before they were pushed.  Similar things have happened in Germany on a somewhat less dramatic scale - no outright coalition ruptures yet - and doubtless in other places I haven't noticed.  

'Net Zero 2050' as a legally binding target has an odd history.  Many governments had vague 'ambitions' in that direction but as regards outright LBT it took a flailing, failing Theresa May to be the first in, with her hastily-conceived, un-deliberated bid for legacy-glory back in 2019.  It took everyone by surprise, not least Parliament, which shamefully spent next to no time on the legislation; but also a bewildered Climate Change Committee which had to gulp several times before endorsing it as even feasible**.  It then took on the nature of a global vogue.

I suppose it's obvious to even legacy-hungry PMs that legislating for a legally-binding 'end to climate change by 2050' would be preposterous.  But they really ought to take that thought seriously, and take the lesson on board.  For the same reason plus additional issues of pure logic, picking a second-order proxy like 'locally-produced CO2 emissions' for your LBT is almost as ridiculous (by its own lights, that is) without switching it to 'CO2 emitted as a consequence of local consumption'.  

But at least 2050 is a (fairly) long time into the future, to the point where a government defending a legal action can at least argue "how can you be sure we're not going to meet the LBT?"  Thus far, HMG has failed at this game by not convincing the courts it's doing very much at all.  But here's the danger for the litigious greens: the more a government appears to be doing (and right now, that's quite a lot, what with lengthy strategies - on paper - for new nukes, hydrogen, CCS, HPs, EVs etc etc, plus quite a bit of dosh) the more the greens need to 'prove' the run-rate isn't enough.  And in doing that, there's a risk they'll prove that the required run-rate is in fact substantially more than 36 per over, and can't be achieved by anybody.

But that's to get caught up in the fiction, because as suggested above, governments are not going to prolong their own agonies for much longer.  Really crass targets like the SNP/Green's annual increments adding up to an eventual 2050 end-game are just too easy to identify as impossible - so they have to be pulled.  

That case is just the most dramatic we've seen so far, and with the most immediate political consequences.  But will the SNP thereby lose votes, eh?  That isn't quite so obvious.  The Tories have softened a fair few lower-visibility targets already themselves, taking the 'ULEZ' gamble it'll help them a bit at the polls.  The soundness of that judgement may take a bit of calibrating if the GE is as much of a meltdown as many believe.  But Starmer never rushes in with a promise to 'reverse the reversal' in these matters, does he?

As with several things, let's check back at year-end to see how the land lies after all those 2024 GEs.  My guess is that across Europe and the USA, a slew of targets will have been softened.  That's partly for the avoidance of litigation, as above; partly for electoral calculations; and partly something I spotted the big oil companies concluding a while back.  "We've now had several years' experience to analyse; we've done the numbers, and checked them twice; they just don't add up."  

ND 

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** which they only did making a bunch of caveats so sweeping, they might as well have said: sorry, it can't be done.

Nuclear fuel: an important development

Yesterday I met a senior DESNZ type who was a bit miffed that there'd been very little coverage of this announcement from January -  

UK invests in high-tech nuclear fuel to push Putin out of global energy market:   £300 million UK investment to support domestic production of fuel required to power next-generation nuclear reactors. First European country to launch high-assay low enriched uranium (HALEU) programme ... Investment will end Russia’s reign as the only commercial producer of HALEU.   The UK will become the first country in Europe to launch a high-tech HALEU nuclear fuel programme, strengthening supply for new nuclear projects and driving Putin further out of global energy markets.   

That's the DESNZ press release header, incidentally.  Setting aside the Putin-baiting, tabloid-style punchline - they really were trying for media coverage, but that stuff never works - this is one of those very rare beasts, an actually strategic government measure.  

Well, I certainly missed this in Jan.  On further investigation, it turns out the French are doing something similar, and the USA started last year.  Over the past two years we've had the occasional BTL comment on the need for this.  Quite refreshing when governments take logical actions, even if belatedly.  

Now, where's my shopping list ..?

ND 

Gold: a very traditional debating point

It's been a very long time since we last ran a thread on gold - it seems to be this one from 2015, when CU wrote: Gold hits a five year low; a positive message?

Well, turned out 2015 was not just a five-year low, it was a turning point, with gold on a rising trend thereafter,  There was a high in July 2020;  Russia's invasion of Ukraine didn't seem to register much; and the 2020 peak has been surpassed comfortably all this year.  Somebody will doubtless have a chart-based view: and I'd note that many key commodities seemed to have turned a corner just recently (certainly the energy-related ones I look at). 

Given that the gold market has many of the hallmarks** of a fair & easy place to invest and trade - deep liquidity; transparency; security (if you don't get suckered by the wrong platform) - the old discussion-points bear dusting off.  Do we have here the perfect hedge against Bad News?   That tends to be my way of looking at it.  Was 2015 a good year for news?  There's certainly a load of grim tidings circulating this year.  Of course, some folk view gold like others see Bitcoin - a market phenomenon with plenty of emotion & sentiment surrounding it, but nothing to take seriously.

What do we think?  Over to t'readership.

ND

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** sorry about that

Iran / Israel: George Bush Snr's 1991 doctrine needed

Prisoners of Geography (Tim Marshall) is a well known, oft-quoted book on geopolitics.  It's really an A-level text - first-year university stuff at best.  I don't have a copy to hand.  But the weekend's news from the middle east brings one of Marshall's often quite blunt assessments to mind, which from memory runs roughly thus: 

A lot of people in middle eastern nations harbour vicious and irreconcilable hatreds against each other.  It's a typical mistake made by western folks, not to believe middle easterners when they say they hate someone, and what they intend to do about it.

OK, so we believe it: this whole matter is filled with irreconcilable hatreds, and people hell-bent on killing their neighbours.  And that these hatreds can spill out all over the place, not least the www.  So let's try to keep this thread strategic.

1) Looks like Netanyahu, in furtherance of his political / personal goals, has played Biden ruthlessly, successfully - and transparently.  Plenty of commentators saw a canny, US-suckering escalation coming.  Forewarned isn't always forearmed.  Still, Biden should have been able to do better than this for the furtherance of his own goals - not least of which is retaining independence of agency.  That said ...

2)  "Can the USA be relied upon any more to protect its friends then, eh?"  And indeed, can coordinated onslaughts of massed, mix-&-match missiles be defended against - by anyone?  Russia thought it had proven the answers were "no", and "no".  Well, there's a bit more to ponder now, on the part of the many people in the RoW who have been wondering about that.  Including ...      

3)  Taiwan and, errr, China.   Ah yes, China.  We read that, once again, the Chinese are "very interested" in what's going on in the middle east.  But, once again, just as in the case of their some-time client Libya, China's role seems to be that of a rather academically interested spectator.  When are they going to become that global great power they keep billing themselves as?  And it's back to the drawing board for that invasion of his own Xi keeps toying with.  ("One Iron Dome system, please, for the oriental gentleman to the north of the Philippines.") 

So, back to Netanyahu.  In 1991, Saddam Hussein launched a wave of Scuds on Israel (and Saudi).  George Bush Snr told Israel to stay its hand - which was just as well, because the pointy end of the  Israeli airforce had taken off moments before the first missile landed (we could detect Scuds at launch even in those days) and was in a holding pattern, waiting for the order to nuke Baghdad etc.  (You might like to refer back to my 30th anniversary account of this episode.) 

We all need "Ironclad" Biden** to dust off his history and make that call, firmly and credibly.  Is he up to it?  

ND

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**Wasn't that subtle of him, eh?  See, he does have some advisers with their heads screwed on.  They just seem to go missing at vital moments.

Why would Lloyds boast about culling risk controls?

Here's a very odd story, that we must surely assume comes from Lloyds itself. 

Lloyds cuts risk management roles in bid to ‘move at greater pace’ 

Bank’s risk assessment method blocking change, internal review concludes ... internal risk structures were acting as a “blocker” to change ... The changes will help the bank in “resetting our approach to risk and controls” and enable Lloyds to “move at greater pace”, according to an internal memo seen by the Financial Times. Mr Nunn [CEO] has been ramping up the pace of change at the bank after setting out a turnaround plan in February 2022.

Well.  First of all, whoever this Charlie Nunn is, waiting more than two years before "ramping up the pace of change" sounds to me like being asleep on the job: a classic "re-launch" so beloved of failing governments and managements of all kinds.  FFS, he became CEO in August 2021!  I'm no revolutionary, but the longest I ever waited in a new managerial job before making changes at pace was about 3 months, and that delay (for such it was) was for a very specific tactical reason.  Ordinarily, it's Machiavelli's dictum that should rule: make your big changes straight away.  Two years is, frankly, pathetic.  (And check Nunn's salary!)

Secondly, what sort of caricature BSD does he wish to be seen as, ostentatiously axing risk management posts?  I'm not really asleep at my desk, I'm a BSD!  Get out of the road, you risk managers!  We'd be making so much more money if it wasn't for you!  Yeah, right.  Two years.

Thirdly, properly construed, the one facet of financial** risk management that can only with difficulty be a positive contributor to doing good business, is credit risk management.  There's only ever bad news in credit: the best that can happen is that counterparty performs its side of the deal!  Which we kinda assumed in the first place, right?  And nobody ever pays you more than you billed them for, and says - hey, keep the change. 

Otherwise, financial risk management should be viewed as potentially a big positive contributor to doing good business.  It is good business you want to do, right?  Or is it a quick speculative buck: book the 'profits' today, grab the bonus and run away?  I start to wonder.

Finally, the joke is, "The shake-up will see 45 jobs removed from these risk teams, equivalent to around 1.5pc of the 3,600 people who work in risk jobs for Lloyds."  In other words, it's trivial, cheeseparing stuff anyway.  

ND 

(PS, I have never been a risk manager, in case you were wondering.  But I have worked with some brilliant ones.  Only in a dysfunctional organisation does RM stymie good business.)

________________

** There are loads of non-financial risks that fall into the same baleful category: 'operational risk' (- the catchall for a lot of shit-that-can-happen); and reputational risk, political risk etc etc etc. 

Shell to quit London stock exchange listing?

Unloved - in some quarters ...

Shell seems to be putting it about that it might leave the LSE for a New York listing.  Well, it's already listed in NY and has been for many years.  Obviously, quitting London will save on costs to some extent, but why will the share price be liberated?  If US investors value Shell that much more highly, why doesn't this make itself felt via its NY listing price?  There'd be plenty of folk eager to exploit any arbitrage opportunity if a differential opened up.

I think we can guess the answer.  As the DTel says: "a growing focus on environmental, social and governance (ESG) measures among investors has begun to threaten [London's] status, with major [mining and energy] companies starting to defect to the US."  By "investors" they presumably mean the London-based institutional type.  

The DTel goes on:  "It comes as Shell looks to shift its business away from oil and gas towards greener sources of energy. But its hybrid approach has risked alienating traditional investors focused on profits, while failing to appease more activist investors concerned about climate change."

I have a slightly different way of describing what's going on.  For some while now it's been apparent to me that the oil majors - both IOCs and NOCs - have done the sums, and concluded that renewables etc simply aren't going to sweep them aside [the green reductio mentioned in the quote below], & that demand for the traditional oil & gas business and its products is secure for many decades to come.  The only question is: which players are going to conduct this business?

Obviously, the NOCs aren't bowing out: in fact, starting with the most recent COP, they are becoming confidently strident on the subject.  Several years ago, when Shell, BP et al were very definitely promoting their reorientation towards 'green', I discerned Exxon wondering whether it really needed to change at all:  "You can see them thinking: the world will still need oil ... maybe there's a niche for just one unreconstructed old dinosaur ...":  and in 2021 I wrote: 

Some people are making a Great Deal of Money from this - right now. And the scope for a great deal more to be made in the coming years is huge ... Even just the continued supply of simple gas to western consumers (whether the green-woke like it or not) has a lot of mileage still in it ... But the 'traditional players' seem to feel themselves unable to make the usual response to an economic reductio ad absurdum, in terms of investment (long term) and arbitrage (short term) to take advantage of the mispriced assets etc ... So: is it all simply about greenwashing? Maybe you just need the right "communications" firm in tow.  I think Shell [as well as Exxon] was hoping they could pull this one off, too. 

Traditional business

Three years on, personally I don't think there's much doubt left.  Exxon goes (or stays) without saying.  Shell, BP, Chevron, even Equinor! - are looking to pull off the balancing act.  If you're only listed in NY, you don't need to make so many of those pesky ESG declarations about how woke you are in your Annual Report**.  The company that interests me is Total: they've gone for a fairly comprehensive woke/green rebranding, and are certainly putting themselves about in the renewables space.  But it's clear they haven't remotely given up on the hard stuff, either - not least in Africa, where they seen to have been singled out by the Semtex wing of the green movement (as we noted here).

My characterisation of the current situation is that it's to be an awkward but determined balancing act for all except the utterly unreconstructed NOCs + Exxon.  The rest are going to try to have it both ways, as best they can.  The depth and reality of the green reductio is such, there's just too much money lost if they give up on the trad stuff they are so good at.  Switching SE listings will be just one of the many games they'll be contemplating.

ND 

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**Though, interestingly, you do need to make much more rigorous risk disclosures, US shareholders being highly litigious in these matters.  Several years ago Germany's mighty E.on (before it split) withdrew from its NY listing - my confident explanation is and was that they didn't like the extensive - and quantified - risk disclosures they needed to make in their US reporting about their dependence on vast and very disadvantageous Russian gas purchases.   Shell will be needing to mull that over, too.  Oh how complicated it all is! 

The lies that businessmen tell

The other day I was asked by a good friend and ex colleague whether, by some remote chance, I'd kept a copy of a report we'd written - 20 years ago ...

Well, he stood a chance as I've always been quite hot on backup.  Sure enough, there was the relevant backup folder - on an old CD, my standard procedure in those days.

As I hunted for a USB CD drive, it crossed my mind that back in the early '00s there was a scare, naturally promoted by someone selling another kind of data storage solution, that CDs were destined somehow to degrade over time, and fairly quickly too.  So, getting the little drive whirring into action, I waited with mild misgivings for the old familiar sound-pattern to run its course ... and lo! the report [i] - easily read, thanks to the wonders of backwards compatibility.  

These bloody liars, eh?  Which led to a further train of thought.  I started my energy career in a big old household-name oil company, and at the time the public debate over lead in gasoline was raging.  We had several refineries and some very fine labs, and we were assured - by technical folk one was inclined to believe - that there was no way on earth to make gasoline of suitable octane, economically, without the addition of lead.  Well, the lead limit was reduced from (IIRC) 0.64 g/l to 0.43 [ii] ... then a few years later to 0.15; and thence, without fuss, to zero.  Was this possible without extravagant extra cost?  Oh yes it was! 

In other words, these sage technical types were lying through their teeth, not only to parliamentarians and newspapers etc but even to their own colleagues!  [iii]

It is really difficult to "follow the science" with any confidence.  As Hugh Laurie's character in House  frequently said: everybody lies ...  

Caveat emptor?  How do you stand a chance, hmm?  Follow the money is often a better principle.

ND

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[i] It is quite good, actually!  We wrote it for the European Commission.

[ii] I may have mis-remembered the decimal.  Or the units.  It's a while ago, and nowadays nobody talks about lead at all !

[iii] The whole story of lead in gasoline is pretty interesting - see this BBC article.  Be sure to read right to the very unexpected end!

Happy Easter: some music

Over at Sacker's blog, there's an interesting Good Friday post from 'JD': a religious procession in the Spanish town of Avilés, taking place to a somewhat syncopated drumbeat.  Somewhat disconcerting, too - take a look for yourself - in all that Inquisition garb, making the drumbeat even more sinister.  At least to Protestants like me.

It put me immediately in mind of another procession I've personally witnessed - in the oddly similarly-named Ávila‎, another Spanish town: in fact, a splendid walled city.  Their procession is in honour of St Teresa.  And the thing is, they also process to syncopated drumbeat - though not identical with the one in Sackers' post.  And no pointy hats, either.  Sadly, I haven't quickly been able to find it on youtube.

I wonder if all Spanish religious processions jive in the same manner - perhaps one of our readers knows?

Anyhow, here's some more fine Easter music - Wagner's Karfreitagszauber from Parsifal.  Not a Catholic, Wagner.

ND

PS: the other vid from JD's post - from Pergolesi's Stabat Mater - is worth listening to, as well.  Wiki mentions that Bach picked up on it: and to my ear, there's something there that Mozart must have picked up on too, for his mighty Requiem.

2024 Predictions Compo: Bankman-Fried Update

So we have an outcome on yet another of our 2024 predictions compo items: SB-F's sentence & fine.  The jail term is clear enough, the fine less so: he must "forfeit $11bn in assets".  Is that a fine?  Anyhow, it's financial - and a much bigger number than almost any of us guessed.  In fairness, we've still the appeal to be heard so let's wait up.

There seems also to be belated news on the UK's recessionary status in 4Q23, which might impact on the results of last year's compo.  Must look into that.

Some of you have been kind enough to note that my early intelligence on Putin's share of the vote turned out to be spot-on.  Yup, when the fix went in there were some communicative folks in the know who just couldn't contain themselves.  Russia is like that.

ND

UPDATE / PS:

SB-F features in this very illuminating article on soi-dissant 'Effective Altruism' -

https://www.wired.com/story/deaths-of-effective-altruism/

Aspects of Russia's war on Ukraine: (3) Germany

In times gone by Germany as a whole, and most German businessmen I have met, liked to come across as the grown-ups of Europe.  Oh, their worldly wisdom!  How I remember the condescending post-Brexit lectures on the imminent departure of the whole of the City of London for Frankfurt ... [1]

Well, it didn't seem to get them very far when the custard hit the fan.  Their two aces - being deeply in bed with Russia, and exporting like crazy to China, didn't turn out quite the bankers they had assumed when Putin played his own hand: cue breast-beating and hand-wringing.  So what happened next in Germany?  Well, lots of things but I'll highlight a few:

• A typically dynamic German practical response: massive shift towards LNG to replace NS1 / NS2 gas - long before 'someone' exercised the Semtex option
• Hugely accelerated efforts on a large-scale shift to hydrogen fuel as the supposed saviour of German manufacturing (no tangible results yet, though)
• Meaningful slump in said manufacturing sector (whether this is permanent 'demand destruction' is yet to be established) with baleful economic repercussions
• Promises (as yet unfulfilled) of much more defence spending and a full-scale reorientation of policy
• Lame & abject 'followerism' as regards military aid for Ukraine: truly, pathetically demeaning

And now, the 'intercepted military telephone discussion' of a couple of weeks back.  WTF?  Afterwards, Scholz had the gall to suggest that everyone still has complete trust in Germany as a secure & reliable military ally.  Errr, no.  Hasn't been any for years before this incident; even less (if that's possible) now.  They don't get a look-in on anything of importance.

In short, from having a plausible case for being the grown-ups of Europe, Germany now looks like the over-sized, know-nothing teenager sulking in its bedroom and defying calls to come down for the family outing.  What and how long it takes for Germans to throw off this current malaise is not something I have a detailed view on, except that nobody should ever underestimate their ultimate capacity for hard work and self-sacrifice, whether in a good cause or a bad one.  Doesn't look as though it will be in time to be of much assistance to Ukraine, though.  I suppose keeping out of the way isn't nothing, in the circumstances.  It may be the best that can be hoped for.

While we all wait to learn the outcome of this surely-temporary impasse, there's a question lingering in my mind: did Mutti realise what she was doing all those years of 'drawing Russia into the fold', and how misconceived it was?  Obviously, the German polity embraced her always-implausible policy wholesale: as Nietzsche said, " 'Credo quia absurdus est': that is what the German spirit wants" [2].

Merkel mostly keeps her peace on the matter, and we can see why; but early on, there were some hints at remorse (- unlike the shameless Schröder, only too happy to draw his enormous Russian stipend: historical, ocean-going, world-scale treachery).  She, remember, was a prize-winning Russian student: fluent in the language, in communism - and surely also in the Russian mentality?  I don't have a tenth of her first-hand experience of Russia; and for a westerner the 'Mysterious Russian Soul' takes a bit of adjusting to.  But I still reckon to have more insight than she seems to have deployed.  When you've been systematically exposed to all things Russian (including the bully Putin personally - the man who maliciously enjoyed literally setting the dogs on her) as long as she has, it's pretty weird to misread them quite as badly as she did.  I don't consider her guilty of Schröder-sin, so I can only assume her neuro-wiring is extremely well geared for language-learning but not for reading human beings.  It happens out there on the autism spectrum.

This post hasn't been much centred on Ukraine (for which apologies).  It was the Russian invasion that triggered Germany's present regression, of course - but we must surely assess there was a major fault-line in the coherence and wisdom of German geo-economic policy and overall statescraft that would have become manifest eventually, one way or another.  What are the likely consequences - e.g. for the EU?  For NATO?  The West vis-à-vis China?   Etc etc.  Very much open to any insights and perspectives on this massive and rather important topic - lots of you [2] know Germany well.

ND 

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[1]  Frankfurt?!  Have you ever been there?  Would your wife be willing to live there?  Would anyone ever visit you there?

[2] OK, this quote is a bit out of context but Nietzsche very much saw the Germans as being suckers for falling in behind a Grand Idea, whether or not having serious merit.  He blamed Bismarck for using his undoubted statesmanship and populism to build up "a monstrosity of imperial power"; and I don't think he'd have liked what Merkel did either. 

[3] Am greatly missing whatever would have been Mark Wadsworth's opinions on this: he thought widely & laterally, and was an excellent German speaker.

The refurbishment of Sidney Cotton's G-AFTL

By, er, popular demand:  a short account of the recent refurbishment of Sidney Cotton's legendary Lockheed Electra 12a, UK registration G-AFTL.  For more on why it's a legend, see these earlier posts.  Here, we're concerned mostly with the airframe.

Photo: IWM

G-AFTL was one of several (probably four) Electras acquired surreptitiously, just before WW2, on behalf of the British and French secret services.  Each was modified in different ways to facilitate its use for clandestine aerial photography.  Some were fitted with inconspicuous cameras - they wouldn't be noticed by a passenger.  Others carried cameras so big, nobody inside the cabin could possibly miss them.  The exact camera fit of G-AFTL is the subject of very careful current research, but I'm only covering it briefly here (see below).  Official records of the missions Cotton flew in it differ from his claims on the matter - he seemed to be conveniently and boastfully conflating missions by more than one plane and more than one pilot; and the claims of his personal role (made on his behalf via fawning biographers) are certainly exaggerated.  That doesn't really matter for our purposes here: the whole pre-war and early-war exploit was astonishing and very productive.

After many successful missions, G-AFTL was in a hangar at Heston (near today's LHR) when in September 1940 it suffered a direct hit by German bombing - a parachute mine.  Word was, it had been crushed - but in fact, it had quite miraculously escaped write-off damage, see photo below.  It seems that Cotton's MI6 handler, one F.W.Winterbotham (another James Bond character), gifted Cotton the plane for services rendered, and helped him get it back to Lockheed in Burbank, California (under a 1941 "export licence") to be fixed - not a trivial matter in wartime.  

Rumours of its demise had been exaggerated ...  photo: Tuttle

In any case, fixed it definitely was.  And there was a lot more work done on it in North America over the years, as would inevitably be the case for any aircraft that's been flying, on and off, for over 80 years  When recently the plane was stripped right down, evidence was found of several fairly major jobs done over the years.  The extra fuel tanks fitted by Cotton had been stripped out in the USA.  The damaged port wing and aileron were replaced by Boeing of Canada in 1942, using cannibalised parts from probably two other Lockheeds.

In 2022 the plane came back to Blighty from a prolonged period of semi-neglect in the USA, and was taken in hand at Sywell.  A very exhaustive (and costly) refurbishment followed, with a lot of research and detective work thereby facilitated on all manner of different aspects of the plane, its history, and Cotton's claims.  It turns out G-AFTL's cameras (no longer extant, but the fittings can be detected) must have been of the bulky non-covert type - and thus G-AFTL wasn't one of the planes that carried out recce actually within Germany during "commercial" visits (Cotton had business there).  Also, only one of this pair of large cameras benefited from one of Cotton's many genuine innovations - he was a serious inventor and holder of many patents - the diversion of hot engine air to play over the lens of the camera to stop it from freezing at altitude, a major issue for high-altitude aerial reconnaissance at the time.  Only the starboard engine had its air pipework modified, and the mods only reached the starboard aperture.  It is felt that the port camera may have been kept warm by virtue of its positioning in the body of the aircraft.

The undercarriage proved to be the most difficult thing to fix in the 14-month rebuild.  Painstaking efforts to find clues under the several layers of paintwork as to its pre-war livery have failed to come up with anything definitive, so the current 'restoration' paint scheme is speculative.  This is a bit of a shame because part of the Cotton legend is that he invented "CamoTint", a bluish paint job that made it very difficult to spot at high altitudes.  

Propellers of a different type to the original have been used for the reconditioned engines.  No example could be procured of the 'tear-drop' type of canopy extension that Cotton had fitted to at least the port side of the forward cockpit glazing to facilitate good 180 degree sideways visibility for the pilot - another 1939 innovation, though Cotton himself didn't hold the patent for that one.  The interior has been fitted out for passenger use (and rather sumptuously, too - the new owner probably knows his market) rather than in the necessarily spartan, ultra-utilitarian way Cotton converted it for his 1930's purposes. 

Photo: IWM

All this work culminated triumphantly in complete restoration to airworthiness, as you can see in that IWM film.

Hope that satisfies interest!

ND

Aspects of Russia's War on Ukraine: Part 2 - the air war

Having considered developments on the land, we now turn to the air.  Many months ago there was a period of serious debate around whether Russia was going to go down the tactical nuclear route.  I never thought it remotely likely, but offered two hypothetical scenarios where it might be more plausible: if Ukraine threatened (in believable terms) to be about to retake Crimea; and/or if Russia committed its airforce - it was very noticeably absent from the battle at that time - and it was shot out of the skies.  The first of those is somewhat obvious, but what was the reasoning on the latter?

Answer:  unlike any of its ground assets, Russia cannot replace its airforce.  So it's been largely withheld, although as Ukraine's limited and now dwindling AA assets have slowly been depleted, Putin has gradually been hazarding more of his aircraft. 

A-50:  looks smart - but not many left

Until a few weeks ago, that was: and then two A-50s were shot out of the sky (by whom, exactly, remains unclear: the Russians are curiously anxious to claim it was friendly fire).   These critical planes are used for directing air assets into forward positions - and Putin doesn't have very many of them left (fingers of one hand now).  The Chinese are highly unlikely to offer them any substitutes, and I'm not at all sure India will sell them any either.  And skilled crews are even harder to come by - essentially irreplaceable in the short term.  Nobody bales out of one of those.  So the Russian airforce once more takes a step backwards - and just when they were perfecting the use of their new glide bombs.  

So - another period of relative impasse in the air: and I don't think this has been a 'pre-election' issue for Putin: he genuinely never wants to see his irreplaceable airforce seriously degraded.  This deprives Russia of one of the standard doctrinal components of what it needs to be doing to execute on its newly-revived 'Soviet' operational method (see earlier post), namely, the vital air contribution required towards the 'firepower' imperative.  My assessment that Putin dare not hazard his airforce stands - particularly in light of the crazy comments he lets his outriders make about taking on NATO in the foreseeable future.

For completeness, we should remember that Ukraine was similarly hobbled during its ill-fated 2023 offensive.  Supposedly planned initially on NATO lines, it was always missing the air component - which for NATO doctrine is even more critical than for Soviet.  'Ill-conceived' might be a better description.

What might break this current impasse?  A couple of things can be envisaged in terms of purely military considerations (i.e. putting aside some political stroke):

(1) Putin might decide to throw in the airforce anyway - if not right now, then perhaps in the expected Russian summer offensive.  Will Ukraine have received the currently-on-ice new package of US military aid by then?  If not, the Russian airforce might be expected to get away with fewer casualties than it would have at any time since Feb 24. 

(2) The Russians might come up with a novel work-around for the lack of A-50s.  The rapid and creative way technology is being adapted in this conflict by both sides, who knows?  I say 'adapted' because Russia has serious problems getting new Western electronic components for anything really advanced, albeit sanctions aren't remotely watertight.  

(3) The long-discussed F-16s might arrive in fair numbers on the other side.  If Ukranian pilots have been trained on the air-to-air mission, that really would keep the Russian aircraft at a distance.  But maybe they've been trained for close air support ... I just don't know.  The F-16 is versatile, but only in terms of how it's been fitted out and crewed: not every F-16 squadron can effectively taken on any role. 

Otherwise, this strange conflict will continue on its hybrid course for many more months to come.

In Part 3 we'll look at Germany's lamentable performance in all this.

ND

Sidney Cotton's Pirate War - revisited

A couple of years ago I ran a couple of posts on the piratical old rogue Sidney Cotton and his WW2 exploits in the famous Lockheed G-AFTL; and how it was returning to the UK to be refurbished.  Several of you said you enjoyed the tale.  But I hadn't updated the story for you: and now's the time.

I'm pleased to say the illustrious aircraft been restored to full flying glory (- in fact, possibly even 'better' than before because I can tell you the newly-installed interior is rather more sumptuous than it ever was).  Recently it's been a centrepiece in a big display at IWM Duxford, 'Spies in the Skies', on WW2 aerial reconnaissance.  I'm including the link here: it works right now but I suspect it'll be coming down in the near future as they draw stumps on the display.  But there will be other opportunities to see the Lockheed because it is flying perfectly well now. 

Also on offer from the IWM is this short film (click above) on the plane and a little of its history.  We need to be a bit cautious on the story, because Cotton was a serial liar - a shame, because the true story is riveting enough without his self-serving embellishments:  see those earlier blog posts.

On another aspect of the IWM display, they were also showing a short official film on Bomb Damage Assessment in WW2 - link here.  Different times:  the destruction of avowedly civilian targets being cheerfully discussed in the film would count as war crimes today.  O tempora, o mores ... 

ND