Saturday, 29 April 2017

Who Knew It Was Going to Be So Complicated and/or Hard?

Apparently Not This Clueless Chap

Who knew the following were difficult, complicated, or hard?


North Korea

The Constitution

The Presidency


Taiwan and China

Walking and chewing gum

David Frum summed it up quite nicely.

All this information was cunningly concealed by being put in books and other forms of writing
So what does a chap with good genes (whose uncle was a  scientist!), who knows more than everyone else in the Government, and who doesn't trust either his  diplomats' or intelligence professionals' advice when he finally realizes something is complicated and needs answers? 

  1. Well, there's Fox News, Breitbart, or Infowars for honest unbiased journalism.
  2. A newly made Chinese "friend" could in ten minutes honestly explain North Korea without trying to advantage his own country's foreign interests.
  3. Retreat into a fantasy world.  Actually with #1, it's more of a further descent into fantasy.

Sunday, 2 April 2017

Securing the Homeland -- Extreme Vetting Part 3

On a Winning Streak with Another Great Pick

Consistency in performance is what distinguishes a great businessman or a great political leader from mediocre ones. 

Here we are in part 3 of extreme vetting and the pattern is consistent.  You be the judge of performance.

28 March AP reported.
This week, the AP revealed Manafort's secret work for a Russian billionaire to advance the interests of Russian President Vladimir Putin a decade ago. Manafort did not dispute working for Oleg Deripaska but said he had represented him only in personal and business matters. He called the focus on him a "smear campaign," and said he was ready to defend his work if investigators wish to learn more about it.
The White House said Trump had not been aware of Manafort's work on behalf of Deripaska, a close Putin ally with whom Manafort, who is 67, eventually signed a $10 million annual contract beginning in 2006. "The president was not aware of Paul's clients from the last decade," said spokesman Sean Spicer. "What else don't we know? I mean, where he went to school, what grades he got, who he played with in the sandbox?"
AA's head is spinning as promised by Candidate Trump. 

Does this mean that extreme vetting is extreme only in the past five years?  Or is it a shorter period?  And I suppose there's was no  reason to ask Paul about his work in the electoral campaign of the pro-Russian candidate for President of Ukraine Viktor Yanukovych.  Nor about the allegations raised by the current Kiev government against Mr.Manafort.  A curious lack of curiosity.

Extreme Vetting 24/7

 Sleep well, citizens, the Homeland is secure.

The Excitement is Palpable -- New Sign-In Experience Coming to GMail

Elated Crowds Cheer the News
AA was elated when he read the announcement from the good folks at Gmail--whose parent by the way sponsors free BlogSpot--that soon Gmail will have a "cleaner, simpler look" and my sign-in experience will be faster.

Not since the announcement of  Windows 10 or the new IPhone has there been such excitement at bayt AA.  What's even more joyous is that AA can simply wait for the change to occur.  No need to stand in line at the Apple Store.

It's not only a win for AA but for America. A win that I'd point out has occurred a scant 12 weeks into the new Administration.  

Saturday, 1 April 2017

Securing the Homeland: Extreme Vetting Part 2

Welcoming Mr. Giuliani to Team Trump

President Trump has correctly noted the importance of extreme vetting to protect the Homeland.

One needs to make sure that those who enter the Homeland or who serve it are not dangerous individuals or those who do not have the best interest of the United States at heart.

On March 27, the NY Times carried a disturbing report on Reza Zarrab which just goes to prove the wisdom of President Trump's statement about extreme vetting.  Zarrab has been charged with facilitating millions of dollars in illicit transactions on behalf of Iran and other sanctioned entities through the use of front companies and false documentation.  He's currently facing trial in the United States. 

Reza Zarrab, a prominent Turkish gold trader who has been jailed in New York on charges of violating the United States sanctions on Iran, has added Rudolph W. Giuliani, the former New York mayor, to his legal team, adding intrigue to a case that has been steeped in international politicking between Turkey and the United States.
Just last month, Mr. Giuliani and another prominent lawyer, Michael B. Mukasey, traveled to meet with the Turkish president, Recep Tayyip Erdogan, as part of their efforts on behalf of Mr. Zarrab, according to a person briefed on the meeting who spoke on the condition of anonymity because of the sensitivity of the trip.
With vetting like this, the nation is clearly in good hands.  I suppose

BIS: GSIBs Risk IT Systems Weak

Unnamed GSIB Data Scientist /Risk Manager Demonstrates New Techology

In January 2013, the Basel Committee published the Principles for effective risk data aggregation and risk reporting (the “Principles”) to remedy deficiencies in risk management disclosed by the 2008 “Great Financial Crisis” (first euphemism of the post).  G-SIBS (Globally Systematically Important Banks) identified in 2011 and 2012 were required to fully implement the Principles by January 2016.

The BIS explained its action as follows:
“One of the most significant lessons learned from the global financial crisis that began in 2007 was that banks’ information technology (IT) and data architectures were inadequate to support the broad management of financial risks. Many banks lacked the ability to aggregate risk exposures and identify concentrations quickly and accurately at the bank group level, across business lines and between legal entities. Some banks were unable to manage their risks properly because of weak risk data aggregation capabilities and risk reporting practices. This had severe consequences to the banks themselves and to the stability of the financial system as a whole.”
In March this year, the BIS issued a progress report on implementation of the Principles.  Italics courtesy of AA.
“The latest assessments by supervisors show that banks’ level of compliance is unsatisfactory and the overall implementation progress remains a source of concern to supervisors. Based on supervisors’ assessments, only one bank fully complied with the Principles, even though the implementation deadline for global systemically important banks (G-SIBs) identified in 2011 and 2012 had lapsed in January 2016. In view of the unsatisfactory assessment results, banks are urged to step up efforts to comply with the Principles. Supervisors are expected to monitor progress and call on banks to address observed weaknesses.” 

There were some 28 G-SIBS as of November 2012. 

One out of 28 is roughly 3.6% compliance.

Not a very impressive performance from these megabanks who tout their capacity to provide state-of-the-art banking services based not only on their self-proclaimed profound intelligence but also their ability to perform complex mathematical analyses and calculations. These are also the same banks that have convinced their regulators that their internal risk models are sufficiently robust so that they should be used to determine their “true” exposure to various risks and, thus, their required capital under the Basel Framework.

The BIS progress report indicates that these self-assessments may be “overly optimistic” (second euphemism of the post). 

What’s even more disturbing is the BIS assessment of the reasons for the failure to reach compliance. You can read that in detail in Appendix 2.  Here’s the BIS’s take on “technical shortcomings”.

“Difficulties in execution and management of complex and large-scale IT and data infrastructure projects, such as resources and funding issues, deficiencies in project management, and coordination with other ongoing strategic programmes.

Overreliance on manual processes and interventions to produce risk reports, although some manual processes are unavoidable.

Incomplete integration and implementation of bank -wide data architecture and frameworks (eg data taxonomies, data dictionaries, risk data policies).

Weaknesses in data quality controls (eg reconciliation, validation checks, data quality standards).”

On a positive note, the BIS may have just supported US corporation and banks’ contention that they are incapable of determining the ratio of their CEO’s pay to the average for all other employees.

If we accept that as a working hypothesis, would you buy a product or place a deposit with a bank unable to measure its risk exposure or perform simple math (Dodd Frank)?