Tuesday, May 31, 2016

I've Got a Question for Bill Kristol

 


Bill Kristol posted a somewhat cryptic Tweet this weekend. 



He is hinting at an impressive independent candidate with a strong team and a real chance.  I first saw this tweet while Will and I were doing the radio show last Sunday, and I misinterpreted it to be a reference to Gary Johnson's having just won the Libertarian nomination a few hours earlier. Of course, that was wrong.  As Will pointed out, Bill Kristol is a strong Neoconservative, and he will certainly not find Johnson appealing. I've seen no follow-up from Kristol in the two days since the tweet.  People have speculated that the candidate could be Mitt Romney, but I doubt it.  Mostly, folks are just confused by what Kristol could possibly have in mind. Most of the speculation has centered around the impossible nature of a last minute independent bid.  The filing deadline for Texas has already passed, and other states' deadlines will soon pass as well.  And even then, getting on the ballot in many of these states requires a lengthy, exhausting, and expensive effort in collecting signatures.

But maybe Bill Kristol has been reading our stuff.  For a few months now, some of us Libertarians have been fantasizing about a somewhat whimsical campaign  strategy.  Mind you, this is not the Johnson campaign strategy, just the bizarre hallucinations of a few crazy Libertarians with too much time on their hands.  The plan is described in the following scenario:  Gary Johnson concentrates his efforts in a small number of states with the focus being to win at least one small state, or a state where Electoral College electors are allocated proportionally.  Nebraska and Maine allocate one vote to each Congressional District, and the remaining two votes to the overall statewide winner.  The rest of the states are winner take all.  We then hope that Trump and Hillary fight to a draw or near draw where they each fail to win a majority of the electoral votes.  There are 538 Electoral College votes.  One for each member of the House and Senate (535) plus 3 more for the District of Columbia.  Total of 538.  You need a majority to win the presidency, that is 50% plus one.  That's 270 votes.  One possible result could look like this: 

Clinton    269
Trump     268
Johnson   1

Total        538

That throws the race to the House of Representatives.  The 12th Amendment mandates that the House choose from among the top three Electoral College vote getters.  In our Libertarian fantasy, the newly elected, and presumably still Republican House of Representatives, led by Paul Ryan (no Trump fan he) makes the following calculation:
  1. We're never going to vote for Hillary. 
  2. We despise Trump almost as much and have been praying for a means by which to jettison him.  
  3. We'll vote for Johnson, a former two term Republican governor, and suffer the shitstorm that ensues.
Trump voters will be furious, as will Clinton supporters who got even more votes.  House Republicans may lack the courage to make this choice, but it's a possibility.  I did, after all, acknowledge that the plan was a fantasy.  The plan would be a little easier if Hillary actually leads Trump by a small margin.  That could provide some cover for a Republican House in their defense against an angry Republican electorate. After all, if they just awarded the presidency to the winner of the plurality, they'd have to give it to Hillary. 

So what if Kristol is pondering the same strategy?  Find a candidate.  Marry him or her up with enough #Never Trump donors to run a credible, but geographically and strategically limited campaign, and concentrate all efforts in states and Congressional Districts where they think they have a fighting chance of winning.  The more Electoral College votes the candidate wins, the better the chance that both Trump and Hillary fail to achieve the magic 270, but under ideal circumstances, all it takes is one electoral vote for the "spoiler".  Some will argue that this independent strategy has never worked in the past.  Even Ross Perot with 19% of the popular vote got no Electoral College votes.  That's true, but Perot was running a nationwide campaign against relatively popular mainstream candidates.  Kristol's candidate will be opposing the most polarizing and despicable human beings in the western hemisphere, and all efforts will be focused like a laser beam on areas of the country where success is most likely.

So where do you focus your resources if you want the easiest wins of the most Electoral College votes?  And where, if you lose the state, you don't accidentally alter the establishment expectations of Trump vs Clinton wins to the point that you tip one or the other to an Electoral College majority where they might otherwise have fallen short?  First, maybe focus on Nebraska and Maine where you might eke out one or more of the proportionally allocated votes.  More on that later.  You might also focus on swing states with the easiest ballot access and the largest numbers of independent voters, especially the states where Trump and Hillary both lost their respective primaries by the largest margins.  Or maybe you flood the zone in small states where you can get the biggest Electoral College bang for the smallest number of limited campaign bucks.  I'm sure that a decent team of election professionals and maybe a computer algorithm or two could come with a potentially winning strategy based on those principles.

And who's the candidate?  Here's a list of criteria that would make the most sense in diminishing order of relevance:

Neoconservative leanings or at least not totally hostile to Neoconservative views or else Kristol would not be the prime mover here.  

Obviously none of this years failed Republican candidates need apply

Someone of substance or the effort would be doomed from the start.
 
Pro life.   Not critical, but, there are no candidates currently in the race who are pro life.  Pro lifers are motivated, and they vote.  Trump says he is pro life, but he's a liar, and most of the pro life folks know it.  Kristol would have to pick a real superman to pass up a pro life candidate here.

Moderate Republican, moderate Democrat or independent.   Not polarizing and equally appealing to disaffected Republicans and Democrats.    

Not currently in the political arena.  That will help insulate this candidate from the inevitable accusations of spoiler.  If they are currently in politics, this could be a career ending enterprise if it fails.  They will need to be willing to take a bullet for their country if the effort is unsuccessful.

Favorite son of a state or district that offers best odds for a win.

Here is my current short list based on a limited imagination and my imperfect knowledge of the players from whom I believe Kristol would choose.

Robert Gates
David Petraeus
James Mattis
Ben Sasse
 
Absolutely top of the list is Robert Gates.  He is a remarkable man, with reasonable name recognition amongst those not living under a rock for the past decade.  His character is beyond reproach as far as I know.  His 'straight out of the movies' resume includes Eagle Scout, and current President of the Boy Scouts of America, university president, and of course, an incredible executive resume as Director of the CIA and Secretary of Defense.  He has bi-partison appeal, having served faithfully under presidents of both parties.  He is truly the Dwight David Eisenhower of the 21st century.  And, oh by the way, he served directly with Barack Obama and Hillary Clinton, so he will be somewhat insulated from attacks from them, and if it becomes necessary, he probably knows where some bodies are buried. I've seen him on the talk shows.  He interviews well, coming across as serious, sincere, capable, and trustworthy.  I believe he is enough of a patriot to take on this task despite its unconventional nature and the risks involved.  The country is after all in great peril.

David Petraeus has many of the same attributes as Gates, so I felt compelled to include him.  He obviously has some major drawbacks which limit his appeal stemming from the extramarital affair and subsequent criminal charges for not safeguarding secret documents.  Apart from the obvious character implications of the affair, the mishandling of secret information charge would somewhat insulate Hillary from her own email troubles, so Petraeus is not as appealing an option as Gates.  Still, there are many who would overlook his negatives if he was the candidate.

James Mattis is on the list only because Kristol had floated the name several weeks ago.  He lacks the name recognition of the others, and frankly, I think the nickname "Mad Dog" is in and of itself a bit too polarizing.  Still, he's on my list.

Finally, on my short list is Ben Sasse. Senator Ben Sasse from Nebraska is the outlier.  He doesn't have the name recognition or the resume/gravitas of the others, and he may not be willing to stake his political career on such a risky move.  But he has exhibited the character to defy the Republican Party and proclaim he will not support Trump.  He also hails from Nebraska, one of the states where all you need to do to win an Electoral College vote is come in on top in one of the three Congressional Districts. The downside is, Nebraska is a red state where Trump won the Republican primary with 61% of the vote and won every county in doing it.  Still, a favorite son candidate like Sasse might best Trump if he was on the ballot.  Sasse's chances are slim, that's why he's the last one on my list.



 
Of course, the strategy is still a long shot.  Can such a candidate even win a single electoral vote?  Can he win enough electoral votes and in the right places to deny both Trump and Clinton the 270 majority in the Electoral College that would make the entire effort worthwhile?  Could you rely on the politically spineless House of Representatives to do the right thing if the strategy succeeded?  What if Clinton gets indicted, drops out, and is replaced with Joe Biden?  Does the strategy still work, or does it now hand the election to Biden?  So many places where the strategy could fail.  But the United States is in serious trouble.  A choice between Trump or Hillary puts this country in serious jeopardy.  Even for Libertarians who are supporting Gary Johnson, the most likely outcome this cycle is a Trump or Clinton win with a consolation prize of a larger and invigorated Libertarian Party.  A man like Robert Gates has a better chance of making this fantasy strategy work than does Gary Johnson.  And if Robert Gates could pull it off, that still leaves open the prospect of a stronger Libertarian Party as well.

OK.  That's my dream put to (digital) pen and paper.  Bill Kristol:  The next move is yours.

Monday, March 7, 2016

Crude Oil in Storage is Rapidly Approaching Full Capacity. So Why is the Price Rising?

Something funny is happening with the price of crude oil. Supply is increasing, demand is decreasing, storage capacity is running out, and yet the price is going up.  Up  from $32.84 a barrel on February 26 to $36.33 a week later on March 4.  That's a rise of 10.63% in one week.  Up almost another 5% today. If you are interested in this topic, listen to about 10 minutes of this Macro Voices podcast starting about 41 minutes. Then come back and read on.  If you have the time, the entire podcast is worth a listen as are the other offerings on their website.  It seems that speculators anticipating a rising price have been able to drive the price up based on their will to see it rise.  And foreign oil ministers have cooperated with press releases hinting at impending production cuts or freezes.  The key to the potential collapse of this house of cards may be the rapidly approaching limit on crude oil storage capacity.

For background, let's review some basics of crude oil storage in the US (Crude Inventories and Storage Capacities)
 
The following graphic describes how crude is stored, where it's stored, and how much capacity exists.  Ignore the actual storage numbers.  They're from Feb 2015 and are out of date.  Just look at capacity.  That hasn't changed much.

  graph of U.S. crude oil storage capacity, as explained in the article text


PADD is an acronym for Petroleum Administration for Defense District.  The country is divided into PADD districts labeled 1-5.  The map above shows the boundaries of the various PADDs and the graph shows the capacity of each. 
As I mentioned, that data too is a bit dated, but close. 

 The narrative on the webpage defines the terminology such as the difference between working capacity and shell capacity, so check out the actual page to read that and get a fuller understanding.  This diagram below is down at the bottom of the page, and it clarifies the terminology even better.

Inline image 3


For current stats on capacity, check this webpage.  As of this writing, November 2015 is the most recently published data on capacity.  March 2016 data will be published at the end of May.  

Here are the current stats on available storage courtesy of the US government Energy Information Administration.  

 Current working capacity is just over 500 million barrels.   Shell capacity about 100 million barrels more.  That extra 100 million barrels is referred to as contingency space, so I'm not sure when or even if that ever comes into play.  And BTW, these capacities are separate from what's known as the Strategic Petroleum Reserve.  That capacity is a further 700 million barrels or so and it it practically maxed out now.

The following 2 charts are representations of current stocks of crude oil relative to overall capacity, and they are more current than the chart at the top of the page.  The first chart is stocks vs capacity for only PADD 3 (Gulf Coast) and Cushing, Oklahoma (part of PADD 2).  Cushing is listed separately because it is important to oil markets as the point of delivery for the WTI futures contract for crude. WTI futures contracts for delivery at Cushing are what determines the price of crude.  Cushing and PADD 3 together make up almost 70% of US commercial storage.  Notice we are currently at 84% capacity for these sites, and Cushing alone is at 89%.

Inline image 2 The next graph shows current stock vs a 5yr range.  Notice that 1)  stocks are way above normal, and 2) crude inventories currently stand in excess of 500 million barrels, which is approaching full capacity.
Inline image 1

Finally, here is an excerpt from the most recent EIA weekly report on crude stocks as of this writing. 
(Click here for most recent report)






The third line is the Strategic Petroleum Reserve which is at capacity, not changing and thus irrelevant.  The relevant line is line 2:  Commercial (Excluding SPR).    The value is 518 million barrels which is a 10.4 million barrel build (2%) from the previous week. 

Summary:  All time high in crude in storage.  Still increasing at significant rate.  Rapidly approaching full capacity.  Now is when the 10 minute part of the podcast comes into play.  Price will only loosely obey supply/demand rules as long as storage is adequate.  Speculation and rumors of production cuts/freezes can have significant influence.  But when storage runs out, price can plummet as that represents suddenly reduced demand.(N0 0ne demands crude if they're not using it and now they can't even store it).

So why in the face of this did oil go up 10% last week alone and a further 5.7% today? 

Looks to me like rude should be headed a lot lower in the future.
Jess

Wednesday, July 29, 2015

Something Funny Here


Why the fear over ubiquitous data encryption is overblown

Mike McConnell was director of the National Security Agency under President Clinton and director of national intelligence under President George W. Bush. Michael Chertoff was homeland security secretary under Bush. William Lynn was deputy defense secretary under President Obama.
More than three years ago, as former national security officials, we penned an op-ed to raise awareness among the public, the business community and Congress of the serious threat to the nation’s well-being posed by the massive theft of intellectual property, technology and business information by the Chinese government through cyberexploitation. Today, we write again to raise the level of thinking and debate about ubiquitous encryption to protect information from exploitation.
In the wake of global controversy over government surveillance, a number of U.S. technology companies have developed and are offering their users what we call ubiquitous encryption — that is, end-to-end encryption of data with only the sender and intended recipient possessing decryption keys. With this technology, the plain text of messages is inaccessible to the companies offering the products or services as well as to the government, even with lawfully authorized access for public safety or law enforcement purposes.
The FBI director and the Justice Department have raised serious and legitimate concerns that ubiquitous encryption without a second decryption key in the hands of a third party would allow criminals to keep their communications secret, even when law enforcement officials have court-approved authorization to access those communications. There also are concerns about such encryption providing secure communications to national security intelligence targets such as terrorist organizations and nations operating counter to U.S. national security interests.
Several other nations are pursuing access to encrypted communications. In Britain, Parliament is considering requiring technology companies to build decryption capabilities for authorized government access into products and services offered in that country. The Chinese have proposed similar approaches to ensure that the government can monitor the content and activities of their citizens. Pakistan has recently blocked BlackBerry services, which provide ubiquitous encryption by default.
We recognize the importance our officials attach to being able to decrypt a coded communication under a warrant or similar legal authority. But the issue that has not been addressed is the competing priorities that support the companies’ resistance to building in a back door or duplicated key for decryption. We believe that the greater public good is a secure communications infrastructure protected by ubiquitous encryption at the device, server and enterprise level without building in means for government monitoring.
First, such an encryption system would protect individual privacy and business information from exploitation at a much higher level than exists today. As a recent MIT paper explains, requiring duplicate keys introduces vulnerabilities in encryption that raise the risk of compromise and theft by bad actors. If third-party key holders have less than perfect security, they may be hacked and the duplicate key exposed. This is no theoretical possibility, as evidenced by major cyberintrusions into supposedly secure government databases and the successful compromise of security tokens held by the security firm RSA. Furthermore, requiring a duplicate key rules out security techniques, such as one-time-only private keys.
Second, a requirement that U.S. technology providers create a duplicate key will not prevent malicious actors from finding other technology providers who will furnish ubiquitous encryption. The smart bad guys will find ways and technologies to avoid access, and we can be sure that the “dark Web” marketplace will offer myriad such capabilities. This could lead to a perverse outcome in which law-abiding organizations and individuals lack protected communications but malicious actors have them.
Finally, and most significantly, if the United States can demand that companies make available a duplicate key, other nations such as China will insist on the same. There will be no principled basis to resist that legal demand. The result will be to expose business, political and personal communications to a wide spectrum of governmental access regimes with varying degrees of due process.
Strategically, the interests of U.S. businesses are essential to protecting U.S. national security interests. After all, political power and military power are derived from economic strength. If the United States is to maintain its global role and influence, protecting business interests from massive economic espionage is essential. And that imperative may outweigh the tactical benefit of making encrypted communications more easily accessible to Western authorities.
History teaches that the fear that ubiquitous encryption will cause our security to go dark is overblown. There was a great debate about encryption in the early ’90s. When the mathematics of “public key” encryption were discovered as a way to provide encryption protection broadly and cheaply to all users, some national security officials were convinced that if the technology were not restricted, law enforcement and intelligence organizations would go dark or deaf.
As a result, the idea of “escrowed key,” known as Clipper Chip, was introduced. The concept was that unbreakable encryption would be provided to individuals and businesses, but the keys could be obtained from escrow by the government under court authorization for legitimate law enforcement or intelligence purposes.
The administration and Congress rejected the Clipper Chip based on the reaction from business and the public. In addition, restrictions were relaxed on the export of encryption technology. But the sky did not fall, and we did not go dark and deaf. Law enforcement and intelligence officials simply had to face a new future. As witnesses to that new future, we can attest that our security agencies were able to protect national security interests to an even greater extent in the ’90s and into the new century.
Today, with almost everyone carrying a networked device on his or her person, ubiquitous encryption provides essential security. If law enforcement and intelligence organizations face a future without assured access to encrypted communications, they will develop technologies and techniques to meet their legitimate mission goals.
Read more on this issue:
The Post’s View: Putting the digital keys to unlock data out of authorities’ reach
The Post’s View: Compromise needed on smartphone encryption
Cyrus R. Vance Jr.: Apple, Google threaten public safety with default smartphone encryption

Tuesday, September 24, 2013

What, No Warming?



I've been seeing references lately to some interesting climate news.  A case in point is this recent article in Der Spiegel.  Contrary to the predictions of the climate models, warming has plateaued over the past 15 years.  What does that mean.  Well, I have an opinion, but then I tend to inherently distrust the UN no matter what they're involved in.  The fact that their goal seems to be to place the burden of climate change remediation on large, developed countries while largely giving developing countries a pass makes me suspicious that this is nothing more than another UN program attempting to mandate transfer payments from the US to the rest of the world.  But then, I'm what the climate folks derisively refer to as a climate change denier, so my opinion won't be worth much to the green fanatics who seem to own the microphone on this topic.  Most of them have as little knowledge of climate science as I do, but that doesn't stop them from chiming in as experts. 

But no matter how you feel about the subject, these quotes from the aforementioned article should concern you:

"In the lead-up to this week's conference, tensions have been high between the IPCC's climate researchers and the IPCC's government representatives,...The conference's participants will negotiate the creation of a 30-page summary for policymakers from the 1,000-page full report. Governments send representatives from their relevant ministries in order to have a hand in what message that summary will contain. "

"Despite resistance from many researchers, the German ministries insist that it is important not to detract from the effectiveness of climate change warnings by discussing the past 15 years' lack of global warming. Doing so, they say, would result in a loss of the support necessary for pursuing rigorous climate policies. "Climate policy needs the element of fear," Ott openly admits. "Otherwise, no politician would take on this topic."

Why do we need government bureaucrats tinkering with the summary of the researchers' findings?  You don't mean to tell me that politics plays a role here, do you?  I suspect politics has played a role in this from the very start, but then what do I know?  I'm in denial.