Category Archives: Security

You’re only vulnerable, everywhere

Today John Stewart exposed the soft underbelly of CNN’s “Target USA” all-day program.

I’d quote the best lines here, but that would spoil the fun…

Watching Stewart is like seeing the best of the best stories of the day, but for news. Take, for example, his coverage of the “Bush reads The Stranger” story. What’s next, Bush reading poetry? There’s something deeply ironic about Bush reading up on “anti-dogma” philosophy, beyond the fact that the story of The Stranger is strangely appropriate to describe Bush’s agenda. Some have also pointed out that Bush Administration looked to Camus in his Feb 2005 “New Era in Transatlantic Unity” speech. Note the State Department’s byline: “Bush says Israeli-Palestinian settlement ‘within reach'” and the fact that Bush mentioned the path to a peaceful Lebanon in that speech. Perhaps he felt like he needed to go back and re-read Camus since things did not work out quite as expected.

Speaking of irony, Bill Moyers once suggested that the difference between journalism and poetry is freedom. Guess which one he thought was more grounded:

In discussing less politically charged subjects, Nye asked Moyers for his thoughts on poetry, since he and his wife, Judith, produce public readings every year. Moyers said poetry is the greatest outlet for the sensual, religious, erotic, intellectual and spiritual experiences in life, and that, although he has only written one poem in the course of his life, he greatly appreciates the art.

“Poetry is like going to church,� he said. “It is like finding a voice that says, ‘This, too, shall pass.’�

Moyers said his profession did not offer the same creative freedom that poetry could.

“As a journalist, you are not quite as much at liberty as the poet because you are supposed to be tethered to verification,� he said. “We’re supposed to offer evidence, and we’re supposed to have deep respect for the facts. You don’t speculate in public domain. The best journalists are cautious in that respect.�

However, Stewart clearly shows through his brilliant comedy that journalists on Fox and CNN are paid handsomely to speculate in the public domain. Meanwhile, poets seem more often to be the ones who wrangle with the facts of life (i.e. slam contests or even blogs). Thus it seems almost probable that a national poet would provide the public more sincere verification and tangible evidence than many of the national news reporters.

Oh, and for even more fun with security and the news, Stephen Colbert has some great tips on how to protect your identity.

US Senate Warning on Canadian Beef

Apparently Canadian feed practices are discussed in the US Senate as a high-risk to the American beef industry. I found this letter from several US Senators asking the USDA to explain America’s plan to prevent the disease from speading south again:

August 3, 2006

The Honorable Michael Johanns
United States Department of Agriculture
1400 Independence Avenue SW
Washington, DC 20520

Dear Secretary Johanns:

We are writing in regards to the recent news that the Canadian government has confirmed its fourth positive case of bovine spongiform encephalopathy (BSE) this year, and that this particular case involved a cow born after Canada enacted certain BSE preventative feed measures. This news is of particular concern to the American beef industry, which is currently undertaking significant steps to improve the competitiveness of U.S. beef in foreign markets.

The unusually high number of BSE outbreaks in Canada this year raises serious questions about Canadian implementation of a 1997 ruminant-to-ruminant feed ban. Current U.S. import protocols allow some commingling of imported Canadian beef with domestic product, which could lead our trading partners to call into question the safety of our beef exports. As recently as 2003, U.S. beef exports were restricted in more than 50 countries when a Canadian-born cow with BSE was discovered in Washington State. All necessary steps must be taken to ensure this doesn’t happen again.

We are encouraged by your July 13, 2006 pledge to send United States Department of Agriculture (USDA) inspectors to Canada to help thoroughly investigate this most recent case of BSE. However, the potential for negative economic impacts on beef producers throughout the country as a result of possible shortcomings in Canada’s BSE policies may merit a more innovative response from USDA.

As USDA learns more about this recent case of BSE in Canada, please inform us of how your agency plans to address the situation.
Sincerely,

Senator Barbara Boxer
Senator Richard Durbin
Senator Dianne Feinstein
Senator Byron L. Dorgan
Senator Kent Conrad
Senator Russell D. Feingold

Wonder what they mean by “more innovative response” to address “possible shortcomings in Canada’s BSE policies”.

Allen’s campaign remark caught on video(s)

If a picture is worth a thousand words…

Video has been spreading quickly about a Republican campaigning for the US Senate from Virgina who called a dark-skinned man in the audience a Macaque (Old World Monkey) and asked the audience to give him a “Welcome to America and the real world, or Virginia”. This apparently was his way to warm up the audience on August 11th, just before he said “Friends, we’re in the midst of a war on terror…”

A short video of just his remarks is available here.

The story gets more strange by the minute if you read details of the controversy and Allen’s background. For example, the Wikipedia has several interesting points:

According to Allen’s sister Jennifer, their mother “prided herself for being un-American. … She was ashamed that she had given up her French citizenship to become a citizen of a country she deemed infantile.”

[…]

Sidarth says he has never received a personal apology from Senator Allen. However, according to John Reid, Allen’s communications director, “The Senator has apologized sincerely and repeatedly over the last two days to the young man and to the public in general.”

I see some tough questions of identity ahead for a man on the campaign trail. John Stewart offers his perspective here along with a report from Rob Corddry.

Speaking of Stewart, here is a fine video of President Bush throwing insults to his audience. Perhaps Allen was just trying to follow by example.

Mandelbrot on financial risk

A book review on Amazon provides a prickly rebuke to Mandelbrot and Hudson’s new theories on finanical risk:

Because the two main assumptions of modern finance are flawed, all related models are flawed as they understate risk. If such models understate risk, they actually overprice stocks and underprice options, and also understate the capital financial institutions should hold to withstand market risk.

If the author had stopped there, I would have given him a 5 rating. However, such a rebuttal of finance theory would make no more than a great essay. Instead, he attempts to build an entirely different edifice of modern finance over 300 pages. And, his theoretical foundation lacks any robustness. That’s why I call it a castle of cards.

Mandelbrot builds his edifice of modern finance on two new parameters that would replace the mean return and volatility of return or standard deviation (mean and standard deviation being the parameters defining a normal distribution). His first parameter is Alpha, derived from Pareto’s Law, is an exponent that measures how wildly prices vary. It defines how fat the tails of the price change curve are. The second one, the H Coefficient, borrowed from a hydrologist named Hurst, is an exponent that measures the dependence of price changes upon past changes.

Well, what is wrong with these two measures? He confesses at the end of the book that no two individuals calculate the same Alpha and H Coefficient when using the exact same historical data! Apparently, there is no one established way to calculate these two parameters. The divergence between the various methodologies can be huge. Using one method, you could derive Alpha and H coefficients that suggest a stock is not risky, using another method you would reach the opposite conclusion. So, after reading nearly 300 pages of intense theories you get that their own foundations are at this stage nonexistent. If Alpha and H are mathematically not replicable and well defined, you can’t apply his multifractal geometry model in any meaningful way.

I haven’t read the book yet, so I’ll wait before commenting, but I thought the reviewer provided some excellent points on the inherent flaws in risk calculations, worth noting here.