My Amazon Review of Daniel Silva's "The Cellist"

 

Life in a Russian (money) Laundromat

 

As I write this there are 11,633 reviews for Danial Silva’s “The Cellist” posted on Amazon.  As a result, this review will be much shorter than usual. Silva writes a very fast-paced spy thriller led by his protagonist Gabriel Allon, the head of Israel’s secret intelligence service. The story opens with the assassination of a disaffected Russian oligarch in London by a nerve agent. We then find Allon teaming up with Isabel Brenner who works as a compliance officer at a very corrupt German bank that serves as a money laundromat for Putin and the Russian oligarchy. She is also a very talented cellist, hence the title.

 

Silva takes us into the innerworkings of money laundering and the use of Russian cyber warfare in inducing Americans to follow the violent leads of far rightwing sects which goes so far as assassination. Readers will get a very real sense as to how powerful the role of Russian money is in the West and how far Putin will go to achieve his ends. It is an easier read than many of the long articles on the subject in, say The Washington Post.

For the full Amazon Review see: Life in a Russian (money) Laundromat (amazon.com)

Governors DeSantis and Abbott Sabotage their States' Economies

 Long after the COVID pandemic is over, Governors Ron DeSantis and Greg Abbott will be remembered as the two who sabotaged the economic development of their respective states. How So?

At the start of the pandemic both low tax and business friendly Florida and Texas were riding high with businesses and individuals rushing into their respective states with the movement towards working from home putting it into overdrive. However, their anti-public health responses to COVID and its Delta variant with respect mandated mask requirements and their failure to be all-in in encouraging vaccines will soon frighten away businesses as they see hospitalizations and deaths soar.

Simply put no one wants to get sick or die as a result of a self-inflected wound coming from fatal governmental policies. By playing to the worst instincts of their constituents, DeSantis and Abbott will soon find their states at the short end of the stick when it comes to attracting economic activity.

My Amazon Review of Jeffrey Orens' "The Soul of Genius: Marie Curie, Albert Einstein......."

 

The Rise of the New Physics

 

In 1911 Ernest Solvay the founder of Solvay S.A., then the largest chemical company in the world as a result of its new soda ash process, convened a conference of the world’s leading physicists in Brussels. Solvay was long interested in physics and theorized that energy and mass were inter-related. The idea of the conference came from German physicist Walter Nernst and it continues to this day at three year intervals with the 1927 conference being the most memorable for for its contents and participants.

 

In this book retired Solvay chemical engineer/manager Jeffrey Orens tells the story of the conference and its attendees, most notably Marie Curie and Albert Einstein. The purpose of the conference was to deal with the failure of classical physics to deal with the new world of quantum mechanics. To Orens the conference was Einstein’s coming out party because although his four path breaking papers came out in 1905, few scientists actually knew him personally. Thus, it was in Brussels where the scientific community recognized his true genius and he was soon off to a high post in Berlin, not bad for a lowly patent clerk in Bern.

 

Orens spends a good part of his book on the life of Marie Curie and how as a Polish émigré in Paris she would go on to win Nobel Prizes in physics in chemistry. The former for the discovery of radiation and the latter for isolating radium. She puts up with the rankest of sexism as the French scientific establishment fails to accept that women can do science.

 

The sexism comes to its head during the Solvay Conference where Curie is accused of having an affair her longtime married colleague Paul Langevin. Had she been a man, far from the affair being on the front pages of the tabloids, it would have largely been unnoticed. The couple loved each other, but it wasn’t to be. However, their grandchildren would later marry.

 

For a chemical engineer Orens tells a good story and it is worthy entry to the history of science.

For the full Amazon URL see: The Rise of the New Physics (amazon.com)

My Amazon Review of John Sedgwick's "From the River to the Sea:......"

 

Railroad War in the West

 

From boardrooms to courtrooms to private armies fighting it out on the rails, John Sedgwick tells the story of the great railroad war that shaped the American Southwest. On one side there was General William Jackson Palmer of the Denver & Rio Grande and on the other side was William Barstow Strong of the Atchison, Topeka and Santa Fe. They fought it out in the mountains of Colorado and the highly critical Raton Pass that separates Colorado from New Mexico. Both wanted to reach the Pacific Ocean.  Along the way they fought over who would serve the great silver mines of Colorado. We also have an appearance on behalf of the Santa Fe, Bat Masterson of Dodge City and OK Corral fame.

 

At the outset the Denver & Rio Grande had all of the advantages. It was already present in Colorado while the Santa Fe was a pissant railroad serving Atchison and Topeka, Kansas. However Strong was by far the better railroad man first as general manager and later as president of the Santa Fe. Strong wins the Raton Pass and extends his railroad deep into New Mexico and then heads west to Los Angeles. The business side of the deal was sealed at the Santa Fe’s headquarters in Boston where Strong and Palmer were coerced into a deal by robber baron Jay Gould who controlled the mighty Union Pacific at the time. Neither party could afford to cross Gould.

 

When the Santa Fe makes it into Los Angeles, then a sleepy backwater town of 30,000 or so in 1887 he at once breaks the California monopoly of the Southern Pacific and then ends up in a price war that lowered the Chicago-Los Angeles fare to a mere $1.00. With that a surge of people flood into sunny Southern California that quintupled the population of Las Angeles to 150,000 by 1890.

 

Sedgwick tell a great story of how these two men helped shaped the West as we now know it. Sometimes he gets bogged down in too many details, but the book will make a great read for those interested in the history of the American West.

For the full Amazon URL see: Railroad War in the West (amazon.com)

Joe Biden, Hang Down your Head in Shame

 I just listened to President Joe Biden's speech on Afghanistan. He was eloquent on the need to withdraw our troops from Afghanistan, but he failed to take any real responsibility for the disastrous withdrawal of our personnel and close allies in the country. The ongoing humanitarian failure is there for the world to see and it will only get worse from here once the Taliban is in full control. There was no contingency planning for the near instantaneous collapse of the Afghan government. Why? It was likely a combination of a massive intelligence failure and groupthink in the highest levels of government.

Heads should roll. He should have opened his speech by announcing the resignation of his national security advisor, Jake Sullivan. After our failure in Mogadishu with "Blackhawk Down" in 1993, Secretary of Defense Les Aspin resigned. 

This was not rocket science in predicting what is now transpiring. In May I tweeted that "Biden would rue the day he ordered the pullout." At the beginning of August, I tweeted it was "game over". While America sleeped  the Taliban were making deals with the tribal warlords to enable them to seize power region by region. Once the Afghans realized which way the wind was blowing the cut the best deals they could.

The long term tragedy of the debacle in Kabul is that America has lost trust throughout the world. By betraying our in-country Afghan allies we have sent messages from Taipei to Tel Aviv that America cannot  be trusted and in host of places individuals and countries will recalculate their position in the world. Further with the Taliban victory Pakistan has improved its strategic position vis a vis India which will likely lead to increased tensions on the subcontinent. All in all, not a pretty picture.

The Fed and the High-Pressure Economy

Nearly 50 years ago (Spring 1973) Arthur Okun wrote an important article for Brookings entitled “Upward Mobility in a High-Pressure Economy.” (See: https://www.brookings.edu/bpea-articles/upward-mobility-in-a-high-pressure-economy/ ) It seems to me that the Fed is seeking such an environment where the economy is operating at or above its potential level of output to light a fire underneath the labor market. That is a worthy goal, but the last time it was tried it ended with unfortunate inflationary consequences.

 

Chair Powell’s concern about the labor market explains his reluctance to put specific numerical guideposts on the Fed’s plan to exit from its emergency monetary policy established in March 2021. Thus, in his July 14^th testimony before Congress, Powell used the term “substantial further progress” on reaching its maximum employment and 2% inflation goals without defining it. 

 

Inflation is already running well above 2% and likely to be far from transitory and the BLS just reported that the unemployment rate dropped to a recovery low of 5.4% in July. To be sure total employment remains far from its February 2020 peak, but many workers have permanently left the workforce due to retirement and lifestyle choices.

 

Although the Fed will make verbal moves to start the tapering process either at the upcoming Jackson Hole meeting or the September FOMC meeting, my guess is that it will drag its feet when it comes to actually implementing a meaningful tapering program. Simply put the Fed is running an experiment to how hot it can run the economy before inducing a significant rise in inflation expectations. My guess we are a lot closer to that than what the Fed thinks. Meantime monetary policy will remain easier than what is warranted and that along with strong corporate earnings will continue to elevate stock prices.

My Amazon Review of Serhii Plokhy's "Nuclear Folly: A History of the Cuban Missile Crisis"

 

Khrushchev’s Nuclear Gamble

 

Many books have been written about the October 1962 Cuban missile crisis, but I believe that Harvard historian and Russia expert Serhii Plokhy’s will become the standard text. He views the crisis from the Russian side and introduces declassified Soviet and Ukrainian KGB files along with interviews of several of the participants. From early on Khrushchev sees Kennedy as far easier to deal with than Nixon. In fact, Plokhy highlights conversations between a KGB officer and Robert Kennedy prior to the 1960 election. Today we would call that collusion. Khrushchev does his best to get Kennedy elected by highlighting Soviet missile strength which played into Kennedy’s campaign highlighting the missile gap, which was nonexistent.

 

With Cold War tensions seething over Berlin, Kennedy meets Khrushhev in Vienna in June 1961. Khrushchev browbeats Kennedy and comes to believe that he can get away with anything. The seeds of the missile crisis were planted in Vienna. The official Soviet rationale for the missiles were to offset the presence of U.S. Jupiter missiles in Turkey. But there was more to it. The Soviets wanted to prevent another invasion of Cuba, checkmate the U.S. in Berlin by opening up another front, and feared that the development of the solid fueled Minuteman missile would give the U.S. a first strike capability when, in fact, Russia had few ICBMs.

 

Khrushchev bullies his presidium to activate his plans to place missiles with their nuclear warheads in Cuba. He argued that their presence could be kept secret, but his military and the Old Bolshevik Anastas Mikoyan correctly argued otherwise. Mikoyan is the hero of the piece on the Soviet side because he later convinces Castro to support the withdrawal and inspection of the missiles.

 

Plokhy goes into great detail as to how the unauthorized shooting down of an American U-2 by a local commander, an accidental overflight into Russia by a B-52 and the near use of a nuclear tipped torpedo in in a Russian sub could have led to a global conflagration. Sometimes the command and control in Washington D.C. and Moscow don’t work exactly as planned.

 

On the American side we see Kennedy moving from hawk to dove and we his constant looking over his shoulder on the domestic consequences of his actions. He is especially fearful of New York Senator Kenneth Keating pressing him on the missile issue prior to the enactment of the embargo.

 

In the end it was both Kennedy’s and Khrushchev’s fear of nuclear war that enabled the crisis to cool. Out of that came Khrushchev’s newfound respect for Kennedy and the treaty banning the atmospheric testing of nuclear weapons in 1963. I know haven’t done justice to Plokhy’s very fine book. At time when we worry about nuclear proliferation in Iran and North Korea his book is a worthwhile reminder of how things can go wrong.

For the full Amazon URL see: Khrushchev's Nuclear Gamble (amazon.com)