Essays High Finance New Territories

The Plot(s) to Stabilize Venzuela

Latest article for 21Cryptos magazine. Saving the world’s worst economic crisis with Cryptocurrency – discusses a few recent attempts by crypto-currency companies and foundations to stabilize Venezuelan hyper-inflation by increasing the adoption of crypto-currencies.

High Finance New Territories Project

Internet 3.0 will start in the third world | 21cryptos

Why the developing world will likely leap-frog the west when it comes to adopting to the “internet of money.” 

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The Bank

I am now earning £2 10s a week for sitting in an office from 9.15 to 5 with an hour for lunch, and tea served in the office. It’s not a princely salary, but there are good prospects of a rise [raise] as I become more useful. Perhaps it will surprise you to hear that I enjoy the work. It is not nearly so fatiguing as schoolteaching, and is more interesting, I have a desk and a filing cabinet in a small room with another man. The filing cabinet is my province, for it contains balance sheets of all the foreign banks with which Lloyd’s does business. These balances I file and tabulate in such a way as to show the progress or decline of every bank from year to year.—T.S. Eliot (via The Rumpus)

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David Swenson’s asset balancing tips:

Domestic Equity (30 percent): Refers to stocks in U.S.-based companies listed on U.S. exchanges.
Emerging Market Equity (5 percent): Refers to stocks from emerging markets around the world, such as Brazil, Russia, India and China.

Foreign Developed Equity (15 percent): Refers to stocks listed on major foreign markets in developed countries, such as the United Kingdom, Germany, France and Japan.

Real Estate Investment Trusts (20 percent): Refers to stocks of companies that invest directly in real estate through ownership of property.

U.S. Treasury Notes and Bonds (15 percent): These are fixed-interest U.S. government debt securities that mature in more than one year. Notes and bonds pay interest semi-annually. The income is only taxed at the federal level.

U.S. Treasury Inflation-Protection Securities, or TIPS (15 percent): These are special types of Treasury notes that offer protection from inflation, as measured by the Consumer Price Index. They pay interest every six months and the principal when the security matures.

High Finance New Territories Research

Stage one of the ‘Middle Income Economies Microfund’

Globe of gold


States are beginning to mature from resource- and foreign aid-based economies to ‘middle-income,’ as they transition demand begins to grow in predictable markets such as infrastructure, telecom, automobiles and consumer goods.

Many “emerging middle income” countries have endured strict state controls over the economy, such as Vietnam, Uganda, India… These sectors often are dominated by one or two companies. Well-managed companies will face little competition, particularly when insulated from foreign competition.

A “buy-and-hold” strategy will provide insulation from political and economic fluctuations over time and best take advantage of these growing economies.

Annual growth (after inflation) of these economies approaches and often exceeds 10 percent despite the poor performance of the global economy. Individual sectors have enjoyed much faster growth.

STAGE ONE: LOGISTICS – finding an online brokerage — one with a modest or non-existant annual fee — with access to emerging markets. The best so far is Scottrade which offers ADPs for Mexico, Philippines, South Africa, Thailand and Brazil. Vietnam offers online trading accounts… Another issue is finding index funds that focus on the sector to give me a little bit of insulation and breadth.

THOUGHTS? Please weigh in…

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Writing for Machines

Writers are anxious about the Internet and all things electronic, as we worry these newfangled ways of entertaining ourselves might someday obviate our own work. The solution, perhaps, lies in understanding and adapting to this new medium. Consuming enough that we can master its complexities and render appealingly intelligent confections for our readers. But who are these readers? Are they different online than they are in print? Some of them aren’t even human. There is a new form of reader browsing the Internet. For this is no longer just the age of mechanical reproduction; we now have to contend with mechanical readers as well. [LINK]

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The Prelude to Stuxnet

Robert Amsterdam pic of Siberian pipelines
Pic via The Oil Drum, I think
While reading up on the Stuxnet worm — a USB spread malicious code that targets Siemens industrial control systems computers and has apparently mangled almost a third of the uranium centrifuges in Nantaz — I came across references to a pipeline explosion caused by a trojan horse. A three kiloton explosion..

The story was covered by William Safire in 2004. Throughout the 70s, the Soviets were back-engineering American computer hardware. They earned huge amounts of foreign currency when oil prices soared and the West was eager to buy oil and gas from them. They spent much of the money on a military technology buying spree, purchasing the latest Western technology through a vast network of shadowy third-party purchasing agents and intermediaries.

Through a French-run KGB colonel, CIA and NATO began distributing ” deliberately flawed designs for stealth technology and space defense… The technology topping the Soviets’ wish list was for computer control systems to automate the operation of the new trans-Siberian gas pipeline. When we turned down their overt purchase order, the KGB sent a covert agent into a Canadian company to steal the software; tipped off by Farewell, we added what geeks call a Trojan horse to the pirated product.”

“The pipeline software that was to run the pumps, turbines and valves was programmed to go haywire,” writes Gus Reed, “to reset pump speeds and valve settings to produce pressures far beyond those acceptable to the pipeline joints and welds. The result was the most monumental non-nuclear explosion and fire ever seen from space.” (NYTimes 2/4/2004)