by Jules Evans | Feb 26, 2008 | Global system, UK
‘Clueless’. That’s how the financial press is summing up our politicians’ understanding of financial markets.
The ignorance of most politicians about the basics of financial markets was cruelly exposed, say both IFR and Euroweek (two of the City’s leading organs), by the furore in the Houses of Parliament over the fact that Northern Rock had securitized around 40% of its mortgages in an off-balance sheet special purpose vehicle called Granite.
David Cameron has confronted Gordon Brown with the existence of Granite, as if it was some dark and terrible secret which has only just come to light. He said: “We found out at 10 minutes to midnight that half of the mortgages, the best half, are owned by somebody else [Granite]. Why are you covering it up?” The media have been equally sensationalist. The Guardian claimed to have ‘exposed’ the existence of Granite in a front-page ‘investigation’. Patrick Wintour et al informed us that: “The existence of Granite was first brought to public attention by the Guardian last November.”
These ‘revelations’ come as a big surprise to the financial press, who have been writing about the existence of Granite for several years. It is one of the best known issuers in the securitization market, and its existence is openly acknowledged in Northern Rock’s accounts, and is registered with the SEC.
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by David Steven | Feb 26, 2008 | Conflict and security, South Asia
The world is beginning to resemble a low-budget television comedy:
A Pakistan ISP that was ordered to censor YouTube accidentally managed to take down the video site around the world for several hours Sunday.
The Pakistani government ordered ISPs to censor YouTube to prevent Pakistanis from seeing a trailer to an anti-Islamic film by Dutch politician Geert Wilders. YouTube has since removed the clip for violating its terms of service, but a screenshot of the film, available via Google, shows a crude drawing of a pig defecating with the word Allah underneath it.
Pakistan Telecom complied by changing the BGP entry for YouTube — essentially updating its local internet address book for where YouTube’s section of the internet is. The idea was to direct its internet users to a page that said YouTube was blocked.
Unfortunately, the ISP announced the new route to upstream providers. The upstream providers didn’t verify the new route but accepted it and then passed it along, cascading the bad address around the net, until most everyone using the net on Sunday would have been directed to the Pakistani’s network block. The blunder not only took down YouTube, but also choked the Pakistani ISP, which was quickly deluged with millions of requests for talking cat videos.
by Alex Evans | Feb 26, 2008 | Conflict and security, Influence and networks, North America
[youtube:http://www.youtube.com/watch?v=UoZeZprXnDg]
A propos of David’s recent posts on lax security surrounding Barack Obama, American voters can at least take heart from new research from Harvard University, which finds that the effect of assassination attempts in democracies – either successful or not – is negligible. In autocracies, on the other hand, they can have a decisive effect. Michael Moynihan in The American has the details:
In “Hit or Miss? The Effect of Assassinations on Institutions and War,” Olken and Jones looked at the effects of political assassination, using a strict empirical methodology that takes into account economic conditions at the time of the killing and what Olken calls a “novel data set” of assassination attempts, successful and unsuccessful, between 1875 and 2004.
Olken and Jones discovered that a country was “more likely to see democratization following the assassination of an autocratic leader,” but found no substantial “effect following assassinations—or assassination attempts—on democratic leaders.” They concluded that “on average, successful assassinations of autocrats produce sustained moves toward democracy.” The researchers also found that assassinations have no effect on the inauguration of wars, a result that “suggests that World War I might have begun regardless of whether or not the attempt on the life of Archduke Franz Ferdinand in 1914 had succeeded or failed.”
