Saturday, August 18

Kashmiri Pandits launch political party in Jammu & Kashmir

Now this promises to be an interesting development in Kashmir. The launch of a political party which concentrates on Kashmiri Pandit's. For those 3 people in the world who have not heard about the Kashmir Problem, it relates to one of the unfinished items from the Partition of India. The ruler of Kashmir was Hindu, the majority of the population was Muslim. The Ruler signed over his state to India, but Pakistan sent in troops way back in 1948. And it got messy since then. From 1989, there is an intifada going on, and in the middle of this gigantic tragedy, the Kashmiri Hindu citizens, known as Kashmiri Pandits (KP's), were forced to leave Kashmir. And they have become a diaspora as well as living in refugee camps in India. They are one more of the forgotten refugee groups in the world and very tragic indeed.

But curiously, they have not really gotten organised since then. Some websites and stories have been circulated but they have not been really taken seriously by anybody, not by India, not by the Kashmiri politicians of every hue, not by Pakistan and certainly not by the international community. And who is to blame and what to do is submerged in a morass of claims, counter-claims and denials.

But a very interesting development has happened. The KP's have formed a political party. "We have launched a political party, the Jammu and Kashmir National Democratic Front, with the aim to fight for the honourable return and rehabilitation of Pandits in the valley and constitution of a development board for them in Jammu," its acting coordinator AK Dewani said.

Now, if those guys are smart, have some committed members, and have a good strategos in place, the best way for them to win back their lands, property and claims is to wage a non-violent struggle against militancy. If they can do it, then the Kashmiri militants will be caught between a rock and a hard place. They really cannot go against a determined non-violent struggle as that will violate the pure idea of Kashmiriat. Also see here, here, or here.

Yes, many Hindu's will be killed, but nobody said self determination was easy. And here is an idea, read up on Edward Said, read up on the variety of Palestinian works, their supporters. Those guys have made being a refugee a work of art. And they will succeed as well, against Israel that is. Learn how the Palestinians have managed to turn the tables. But the KP's have one advantage which they have not used, and that is that their enemy has Islamist terrorists in their middle. Too bad they have not utilised that angle, but hey, better late than never.

Now that would be really ironical and poetic justice. Best of luck to them.

Contingency Planning, for Technology and Terrorism

Here is a news story about how a small network card brought down a huge airport for 8 hours. Do you remember the nursery rhyme? for want of a nail? this is the full rhyme

For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.

Given this scenario, one might have wondered why the airport did not do anything? Well, it is a truism that one cannot protect everybody from every possible risk. Either that would be impossible or too expensive.

But the common reaction is that we should be right 100% of the time. That's where the terrorists win out. They just have to be lucky once, we have to be lucky every time.

Various professionals in diverse fields will tell you that you try to work to a risk based approach. For example, the Soviet missile chaps (I had a long chat with one of their strategists in Moscow over couple of bottles of pepper vodka, will dig out the notes sometime and report on it) worked on the assumption that the interceptor missiles from the USA will get "some" warheads, some will disappear into space, some wont fire, some will miss their targets so their idea was to go for a huge number of warheads on the assumption that a few will get through!

Take a look at the high quality components which are supplied by the electronics industry to the super computer world, the avionics industry, etc. Each of those components comes with a company supplied figure of "MTBF" or mean time before failure. In other words, the company specifies when they estimate the component to fail, generally in terms of time (replace component after 500 minutes or something like that) and you replace the component before that time.

In the financial world, risk is frequently managed according to that perspective. You put aside sufficient capital so that you are protected against events that have a probability of happening say once every 10,000 years. See here for an example. Goldman Sachs also made a bad bet on the probability of events, see here for a background and here for the current state.

So while their automated models were based upon events happening say once in 1000 years, some events which were not thought to happen in 30,000 years happened, and they got caught out. In other words, even genius's get caught out. In fact, even Nobel Prize Winners get caught out like this case with Long Term Capital Management.

In this case, we are simply talking about a lowly network card, which would have been manufactured somewhere in China by a very automated process, and having not much redundancy either. Think about it, even the Challenger Space Shuttle was brought down by the failure of a tiny seal. See here for an example of MTBF.

Sometimes, even if you have all the nails, you will still lose the kingdom. To use Donald Rumsfeld's rather brutal words, "stuff happens".

So one needs to take these issues with a grain of piquant salt!!!

Contingency Planning, for Technology and Terrorism

By Stephen Barr
Thursday, August 16, 2007; D04

Small things often trip up large organizations. That's what happened at the Los Angeles International Airport last weekend.

A common piece of computer hardware -- a network interface card -- at a U.S. customs work station malfunctioned, taking down the agency's network at the airport. The system failure, which lasted nearly eight hours, delayed the arrivals of at least 17,000 international passengers and left many travelers stranded for hours in airplanes.

Network cards allow computers to communicate with one another, and most home computer users know them as Ethernet cards. Most of the time, when network interface cards feel like having a nervous breakdown, they go all the way and fail completely. This usually means that one computer goes down, but other work stations continue to function.

Customs and Border Protection, part of the Department of Homeland Security, wasn't so lucky. The network card at LAX took down the local area network when the card repeatedly began seeking attention and assistance in performing its functions, setting off a "data storm," overloading the network's efforts to manage itself.

"It was a fluke," said Ken Ritchhart, acting assistant commissioner for the CBP's office of information and technology.

A costly fluke.

Officials in the aviation industry have criticized the CBP for taking too long to fix the computer problem. Los Angeles airport and city officials have expressed frustration, and airplane passengers have complained that the agency needed a better, faster back-up plan for when computers go out.

But balancing "customer service" against national security is not easy for Customs and Border Protection. About 46,000 people move through customs lanes every hour, on average. Their names and passports are matched by customs computers against terrorism watch lists and FBI databases.

When the computers are humming, it typically takes five seconds to determine a passenger's status and a minute or so to clear him for entry. When work stations go down, customs officers get out laptops to connect into databases.

Ritchhart said work-station computers at LAX were about four years old and were scheduled for replacement next year. The cables that link work stations are about 20 years old.

Before the Los Angeles outage, the CBP had plans to upgrade work stations, cables and electronic components at its major sites, including New York and Miami. About $15 million has been set aside for replacing cables, switches and satellite links, and $10 million more will be spent to upgrade work stations, Ritchhart said.

For the short term, the CBP scrambled a tiger team of techies to review the agency's procedures for handling major computer outages. Officials also will review the contract with their telecommunications vendor to see whether the required response time of four hours should be cut in half.

Customs and Border Protection, of course, is not the only agency grappling with customer-service issues.

The Social Security Administration and the Veterans Affairs Department struggle to keep pace with benefit claims. In June, the State Department was overwhelmed with passport applications because of a new rule requiring passports for U.S. citizens flying within the Western Hemisphere.

Agencies responsible for national security, in particular, are motivated "not to let something bad happen," which does not always mesh with other goals, such as customer service, said Frank J. Cilluffo of the Homeland Security Policy Institute at George Washington University.

Government has a responsibility to provide security, and "we don't want to undermine that important mission," he said.

Still, many federal agencies need to look harder at their performance and plan more rigorously for such issues as surges in passport applications and chaos caused by technology breakdowns, said John Stewart, an operating partner at Monomoy Capital Partners, a private-equity fund that helps troubled companies turn around.

"The government is operating more in a responsive mode," he said. "That's not a good situation to be in when trying to meet the needs of customers."

Agencies also become vulnerable when they lapse into tunnel vision or rely too much on technology, said Donald F. Kettl, a University of Pennsylvania political science professor. "We are going to have things that outflank us," he said. "They might be hurricanes, or terrorists, or a bad chip inside a computer."

Stephen Barr's e-mail address

Can an honest person be corrupt? Yes

Here's an email exchange with a colleague on a mailing list. My answer is that yes, you can be a personally honest person but you can be totally corrupt at the same time. I hate corruption and have written about it frequently as in here, and see a search here.

All this to be taken with a grain of piquant salt!!!


From: Bhaskar Dasgupta []
Sent: 18 August 2007 09:12
Subject: Indians are honest people: Reader's Digest Test


Very interesting indeed but I found it very ironical.

There have been quite a lot of studies done on corruption. If you see where it arises, it always arises when there is a process to be negotiated, short-circuiting that process will unfairly benefit somebody and finally the process/results are not transparent. For most of the day to day interactions between 1-2-1 citizens, these conditions do not hold.

But when the state gets involved, corruption takes hold. If the mobile phone was switched to some element of a public good, such as electricity, or railway reservations (pre computerisation) or licences, then you would see the results at the transparency international website, with just these honest people giving bribes and taking them.

That's the irony.




There is now proof that Indians, although they are poor, are among
the most honest people in the world.

I am aware of the corruption in India, and have frequently thought
about it. I had concluded that Indians are inherently very honest,
however the system has been forcing them to engage in corruption to
survive. The system has been corrected to some extent, and as a
result, corruption has declined, although India has along way to go
to implement a totally fair system.

I should mention that corruption is not India's greatest problem. An
ineffecive system is worse than a corrupt system.


Reader's Digest Conducts Global Cell Phone Honesty Test

What will you do if you notice a mobile phone left unattended and
ringing in a shopping mall lobby? Would you answer the call? In case
you do, will you spare some time and trouble yourself to return it?
Alternatively, just cut-it, keep the tempting new handset in your
pocket and walk away? Some most populated cities in 32 countries were
selected to observe how people behave in such a situation.

Reader's Digest, a widely read magazine, conducted an informal
honesty test by leaving 960 mobile phones, at select busy public
spots, in each city. The "Global Cell-Phone Honesty Test" reveals
that almost 68 % people gave it back.

According to Reader's Digest , the test was conducted concurrently in
32 countries. Researchers observed the mobile handsets from a
distance after leaving it as "lost" at a place. Handsets were brand-
new, mid-priced models with tempting designs. Researchers were
observing for three possible types of human responses. One may decide
to return the phone or keep the phone with himself. He may also
decide to make a call later, on the pre-programmed handset number,
the third possibility.

Beguiling findings of this "Global Honesty Test" represents some
natural human instincts in a different way. "The average return rate
was remarkable 68 percent, or about two thirds of the 30 phones we
dropped in each city." said Conrad Kiechel, Editorial Director,
International, in a press release on

See results at


Mumbai is in the top 5. 24 of the 30 phones were returned in Mumbai.

Only Llublija (29 returned), Toronto (28),Seoul (27), Stockholm (26)
proved to be more honest.

Thank you, people of Mumbai.


Tenure or Political Opinions? - the strange battleground in the USA

A note was sent to me with this link and was entitled, what do you think?

All I had to say is that I am thankfully not in that position. But I feel sorry for the good professor's students who will only get one side of the story. It is also tragic that there is an assumption in the USA that the Israeli side is all powerful. Between these two extremes, the student and society are getting pummeled. The teachers are supposed to present a balanced view of life and love to their students.

Now I realise that this situation is more appropriate in the arts area, but would you really go to a political science class where only one side is taught? or would you go to a English literature class where only American literature is taught and england English American literature is not taught? or would you go to a history of music class where only pop music is taught while Handel is ignored?

Curiously, in the USA, academics are a bit lopsided and the arena of debate, see here for a different view. In fact, I saw the comments on the Angry Arab Blog quite funny, the very mention of Edward Said sends me into chuckles. That is one series of impenetrable pap. Also, there is a strange series comments with quote warfare.

Perhaps that's why the people who come out of the science backgrounds do not have this kind of issue. And perhaps this is why one wonders as to what's the real benefit of going to study political science, government, etc.? Talking heads anyone? I wonder if the good professor realises that he is as guilty of bias as that of his accusers? :) now that's irony, lol.

Friday, August 17

Biometric Technologies - A primer

Some of my readers have emailed me asking for more details around the biometric technology bits following my previous post about biometrics. Well, here are some of the links which you might find of use.

International Biometric Group - Biometrics Basics: Understanding Biometric Technologies

The following primers are available on biometric basics.

How is Biometrics Defined?

What are the Leading Biometric Technologies?

Which is the Best Biometric Technology?

What are the Benefits of Biometric Technology?

What Are Biometrics' Basic Components and Processes?

How Do Biometric Systems Determine "Matches"?

Are Biometric Systems Difficult to Use?

How Do Identification and Verification Differ?

Are Biometric Templates Secret?

How Large are Biometric Templates?

What Factors Cause Biometric Systems to Fail?

What are the Benefits of Using Multiple Biometrics?

Is DNA a Biometric?

shining a light on a little known corner of the regulatory world where it intersects with outsourcing

MiFID will most probably impact these following activities (as noted by Clifford Chance)

(a) Provision of regular or constant compliance, internal audit, accounting or risk management
(b) Provision of credit risk control and credit risk analysis;
(c) Portfolio administration or portfolio management by a third party;
(d) Provision of data storage (physical and electronic);
(e) Provision of ongoing, day-to-day systems maintenance/support; and
(f) Provision of ongoing, day-to-day software/systems management (e.g. where third party
carries out day-to-day functionality and/or runs software or processes on its own systems).

ChaseCooper further reports that:

  • 40% do not have an up-to-date exit management plan in place with their service provider
  • 36% do not have their regulatory team review its contracts
  • A third do not have a service level agreement in place with every service provider
  • 32% do not regularly test service provider’s disaster recovery
  • Where a service provider fails to meet regulatory standards, 31% do not have step-in rights or the right to terminate their agreement
  • More than 30% of agreements do not require the service provider to regularly test back up facilities.

  • Now this is serious stuff, this level of management negligence is definitely worrisome and while the FSA might be going for principles based regulation, until and unless it actually turfs out people and firms from the financial services market for mismanagement and not just mis-selling/fraud, we will keep on seeing this form of mismanagement. So you might well ask, why am I going all anal about an SLA? It is because of the "broken window syndrome".

    The what? Well, the idea of the broken window syndrome was adopted by the NY Police and they clamped down on minor crimes such as broken windows, squeege merchants and petty crime. The idea being that if you make sure that minor crimes are avoided, then major crimes are reduced, as it happened in NY. While that is being hotly debated in the USA, it does make sense. When you are faced with basic mismanagement of this nature, such as not looking after outsourcing contracts, it will not hurt immediately, but in case of crashes or market turns, this suddenly becomes a pain. And the tragedy is that the people who get hurt are the people least able to handle that hurt, such as pensioners.

    Furthermore, management of outsourcing contracts is a painful task, specially when management think of it as "manage my mess for less" also means "out of sight out of mind". It does not, even if you have outsourced your business processes or technology, you still need to make sure that they are doing what they are supposed to. Till now, there was no regulatory downside, only business downside. But with MiFID, it has now come under the ambit of the regulators. I wonder how many vendor management departments have been involved in the MiFID process? Based upon my limited knowledge, I would say that 2 out of 3 vendor management departments have not been fully involved (ask around your outsourced vendor partner relationship manager about MiFID and the impact, see them gibber and worry!) and if they are worried, you should be too!!!, November 1, 2007, the go live date is not that far away!

    All this to be taken with a grain of piquant salt!!!

    A letter from a Hedge Fund to its shareholders - very funny!

    This was a very funny article written by a Bloomberg Columnist, Mark Gilbert. I am afraid the humour is a bit towards very arcane financial mathematics, but I think you can get the gist of the joke coming through. Thanks to my friend, Paran RamaKrishnan, in Australia, to draw attention to this gem. I have to admit that I started my career making those models which rely on hexagonal cuboid surfaces, lol lol lol. So now you understand this is not an investment advice! :)

    All this to be taken with a grain of piquant salt!!!

    Commentary by Mark Gilbert

    Aug. 16 (Bloomberg) -- Dear investor, we'd like to take this opportunity to update you on the recent performance of our hedge fund, Short-Term Capital Mismanagement LLP. As you know, market selection for the entire fund is guided by a proprietary investing tool we like to call ``a dartboard.''

    Once the asset classes are decided, individual security
    selections are generated by digitizing our unique hexagonal cuboid models. Unfortunately, it transpires that our hexagonal cuboids are not as unique as we thought. Hundreds of other hedge funds
    possess identical dice. The technical term for this is a ``crowded trade.'' You may also see it referred to as ``climbing on a bandwagon already headed for the wall.''

    As our alpha generation collapses, our beta has turned negative, our delta hedging has gone toxic and, trust me, you do not want to hear about our gamma. We can't even find our epsilons in the dark with both hands. You will appreciate that accurate pricing is essential for evaluating our investment strategies. This has proven to be
    extremely challenging in recent days.

    Previously, we have relied
    on Bob, the sales guy at Hokey-Cokey Bank. Bob assured us the securities were still worth 100 percent of face value, so everything was cool. Bob sold the collateralized debt obligations to us in the first place, so he knows what he's talking about. Bob, however, appears to have had a nervous breakdown, judging by the maniacal laughter that greeted our requests for price verification this week. Our efforts to implement an in-house CDO valuation framework, using a technique the ancients knew as ``making things up,'' proved unsatisfactory.

    Where's the Bid?

    Currently, all of the portfolios we manage are undergoing a rigorous screening known as ``crossing our fingers and praying that we don't have to try and find a bid in the market.'' This is supplemented by a cross-market statistical analysis originally
    developed by the U.S. military called ``don't ask, don't tell.'' This ``unmarking-to-unmarket'' procedure has been the benchmark for the hedge-fund industry for the past, ooh, 72 hours. We have, of course, been in touch with the rating companies to update our default-probability scenarios, particularly on the
    AAA rated investments we own. They recommended a forecasting method using stochastics to regress the drift-to-downgrade timescales for the past 100 years and throw them forward for the next five minutes. The technical term for this is ``induction,'' though those of you of a less quantitative bent may know it as

    AAA or Toast?

    We are pleased to report that, contrary to what current market prices might suggest, all of our top-rated securities remain absolutely AAA. Provided, that is, the future performance of the underlying collateral is identical to its history. Otherwise, the rating companies say our investments are likely to be reclassified as ``toast.''
    We have also been checking our back-up credit lines with our friends in the investment-banking world. As soon as they return our calls, we'll be able to update you on our emergency liquidity position. We are sure they are fine.

    Some of you have written to us asking for your money back, citing clauses in the fund documentation called redemption rights. Frankly, we never expected you to actually read that prospectus, which came prepackaged when we bought the Microsoft
    Hedge-Fund Guy software. We certainly have no idea what all those long words mean.

    We have filed your letters in a special drawer in the filing cabinet marked ``trash'' for now. Do you have any idea how much trouble you all would be in if we actually sold this stuff in the market today? At these crazy prices? Fuhgeddaboudit. You'll thank us later.

    Not a Rescue

    Speaking of crazy prices, we know you'll be thrilled to learn that we've invited a bunch of our rich pals into the fund to participate in this once-in-a-lifetime opportunity. But this is not a rescue. Do not even think the word rescue. This is an
    opportunity. Not a rescue. An opportunity. In fact, we think this is such a fantastic opportunity, we've agreed to forgo our usual management fee, and we'll only take half our usual slice of the profits. Provided there are any profits to slice. You, of course, are absolutely invited to participate in this offer by sending us yet more of your money on exactly the same revised terms as our rich pals.

    Finally, a word for all of you who have been kind enough to inquire about my personal financial situation. I am relieved to report that my directors and officers insurance is fully paid up. Furthermore, my Bentley Continental was paid out of the 2 percent fee we levied when you wrote your first check to us, so I will still be able to trundle into the parking lot each morning in an open-necked shirt to ignore your telephone calls and e-mails.


    Hedge-Fund Guy.

    Thursday, August 16

    Sarko and the Unions, Round II, Sarko wins on a KO

    OMG, Holy Christ, Sarko is kicking union backsides, he was already on a roll. Now he has managed to poke another finger in the eye of the Unions. According to late breaking news, the French court who was judging whether or not the minimum service provision for transport sector employees was legal or not has ruled that it IS legal. The French Parliament passed the bill 2 weeks ago and the union hot footed it to the courts moaning that this was all illegal and against the constitutional right to strike. The court basically told them to stop whining, this has nothing to do with the right to strike.

    What the ruling effectively means is that the transport public service sector unions have to guarantee a minimum service (which obviously will be dealt with in negotiations with the management or the ministry). They have also banned wildcat lightening strikes and after 8 days, they need to reconfirm the strike in a SECRET ballot.

    I think this is the same stage at which Margaret Thatcher was when she faced down the coal miners. That was the crucial step in breaking the sclerotic grip that labour had over the british economy. But I am impressed with Sarko, good man, way to go.

    All this to be taken with a grain of piquant salt!!!

    Why newspapers are screwed by Google?

    I think newspapers are screwed by Google or by Web 2.0. In terms of content generation, they simply cannot compete with the great unwashed herd of people like me. And when access to this content is very simple via google reader, facebook or mobile phones, then one wonders why we need newspapers. I dont even buy a newspaper any more! See here for a previous essay.

    Famous former Wall Street internet analyst Henry Blodget reckons "newspapers are screwed". Is he right?
    August 16, 2007 1:30 PM
    There is an interesting little debate going on, started by a post from the famous former Wall Street (Merrill Lynch) analyst Henry Blodget: Running the Numbers: Why Newspapers Are Screwed (see here). Blodget looked at The New York Times and reckoned that although going online reduced costs, compared with printing on paper, it reduced profits even more.There were some interesting responses, particularly one from Seamus McCauley at Virtual Economics on Why newspapers are not screwed (here). The gist of it was that as more papers went bust, the survivors would become more valuable. "If most news publishers are to fall by the wayside, the market in which those remaining operate will be very different."Now Blodget has fired back with The Great Advertising Share Shift: Google Sucks Life Out Of Old Media at his Silicon Alley Insider. He points out that online advertising revenue at the big four (Google, Yahoo, AOL and MSN) is up by 42% while "US advertising revenue at 15 big television, newspaper, magazine, radio, and outdoor companies (Time Warner, Viacom, CBS, etc) shrank by $280 million in Q2, or 3%." (He's also published his spreadsheet.)"Traditional media executives are doing a superb job of milking cash flow out of shrinking businesses, but you can't save your way to prosperity," says Blodget.Perhaps the situation is even worse than Blodget thinks. Newspapers are responding to the decline of print and finding new markets by going online: The Guardian has done that very successfully. But as Jakob Nielsen pointed out in my interview last week, Google "takes a big percentage of the money. The web is a web, and that is good, but companies invest a lot of money in creating content, and the money goes to Google for indexing it."If it wasn't Google, of course, it would be Yahoo, MSN or some other search engine site. Google is more of a problem not because of what it does, exactly, but because it's so damned good at it.So, are newspapers really screwed, and if so, what could we do about it?

    All this to be taken with a grain of piquant salt!!!

    Wednesday, August 15

    EU project builds European infrastructure for testing biometrics technologies

    I spotted something buried deep in one of the thick (electronically speaking that is) EU developments and notifications emails that somehow seem to land in my in-box. I am very impressed by one thing, how the European bureaucrats are always on the lookout for things that the national authorities might be doing which might not be "European". This is one example. Every country has its own way of having biometric identification frameworks and usage. And in almost all cases, even inside a country, you will find different standards and usage.

    For example, the United Kingdom has started off on inviting contractors to start work for the National ID project. Now are these guys going to work with the benefits agency? or the NHS card system? or the passport agency? don't think so, haven't seen it anyway. It is early days yet, but one would have thought that some standards work would have pushed through. Remember how EU got a leg up on 2G mobile networks by pushing for the GSM standard? and USA then ended up on the back foot because of no standards. Mind you, then EU tried to do the same for 3G and 2.5G and ended up in the most unholy mess imaginable. But aiming for standards of interoperability is good. So it seems for this story as well. The EU is launching a project to get standards for biometric identification interoperability.

    But what I am finding very curious that there is no mention of any financial institution cooperation / collaboration. Money is what makes the world go around and if there is one thing which should be interoperable is the financial transaction framework. Its not like that the EU is not already working on this. For example, the EU is working on the SEPA, the Single European Payments Area, working on TARGET II, on having a common depository, imposing standards and and and (and, yes, up to and including specs on credit cards and and and). So when we are talking about two such huge operations going on, has anybody ever thought of linking these two up? or at least talking to each other? Havent heard of anything and my admittedly limited googling and emailing didnt produce any responses.

    If Europe can come up with say a credit card or financial instrument biometric identification which is in synch with or interoperable with the national security identifier project, then it will single-handedly give a leg up to the next but one generation of technology, manufacturing and service firms. It can be done, but I wonder if anybody is listening?

    All this to be taken with a grain of piquant salt!!!

    EU project builds European infrastructure for testing biometrics technologies

    [Date: 2007-08-13]

    An EU-funded project has begun work on setting up a European infrastructure for the testing and certification of biometrics components and systems.

    Biometric recognition systems measure the behavioural or physical traits of people. These can be as varied as iris images, fingerprints, the structure of veins in the hand, or even an individual's typing rhythm.

    The systems are currently used by national governments for border controls, and the EU is looking to develop a coherent approach for Europe. The technology is used to detect illegal immigration, and to identity theft and security threats.

    The BioTesting Europe project is seeking to establish European interoperability for large-scale cross-national identity management systems, such as passports, visas and ID cards.

    The project will also help to establish European centres for the testing and certification of these biometric components and systems.

    'In order to establish European interoperability within large identity management systems, more specific requirements for designing testing and evaluation schemes are needed,' explains Max Snijder, the project coordinator from the European Biometrics Forum. 'An integrated and European approach is the absolute success factor in achieving these goals. That means simultaneous actions are needed that facilitate alignment between all levels of stakeholders that are involved: end users, testing laboratories, accreditation organisations and industry.'

    The project has begun outlining the need for testing and certification schemes, and will then make an inventory of existing capabilities, mapping user requirements and defining the business case.

    Ultimately, the project will establish a European Biometric Testing and Certification Roadmap for further research and development.

    BioTesting Europe is funded under the EU's Sixth Framework Programme under its 'preparatory action for security research' theme. It is being coordinated by the European Biometric Forum, and involves the UK's National Physical Laboratory, Germany's Fraunhofer-Institut für Graphische Verarberaitung (IGD), and the European Commission's Joint Research Centre (JRC).

    For more information, please visit:

    Category: Projects
    Data Source Provider: National Physics Laboratory (NPL) Document Reference: Based on a press release from the National Physics Laboratory (NPL) Programme or Service Acronym: SECURITY, FP7, FP7-COOPERATION, FP7-SECURITY, FUTURE RESEARCH Subject Index: Coordination, Cooperation; Scientific Research

    RCN: 28202

    I am not sure who is more curious in this picture?

    This picture was quite cute! :), and as you can see, not sure who is more curious!

    All this to be taken with a grain of piquant salt!!!

    Another Poke to my MP, G. Thomas, about the Iraqi Interpreters

    I poked my MP again on this issue. Please take the liberty to write to your local MP (see details here on how to contact, some tips here, dont forget to sign the Downing Street Petition here) and ask them to support this issue

    Dear Mr. Thomas

    I realise you are busy but I was directed to this website about other MP's who have signed up to this issue

    They are

    Conservatives (1):
    Anne Milton
    Labour (11):Celia BarlowHugh BayleyWayne DavidFrank DobsonJim FitzpatrickPatricia HewittDavid LammyChris MoleAndrew SmithDr Rudi VisPaul Truswell (via Ian Clenshaw)
    Lib Dems (3):
    John BarrettLynn FeatherstoneRobert Smith
    I would appreciate knowing your views on this.



    Dr. Bhaskar Dasgupta
    North Harrow.
    - Hide quoted text -
    On 08/08/07, Bhaskar Dasgupta <> wrote:
    Hello there Mr. Thomas

    I am one of your constituency members, living in 36 Hooking Green, North Harrow. I wanted to inquire whether you have pushed the prime minister to do something dramatic and quick about the Iraqi Interpreters? I have written about this on my blog for more details here: . I would like to hear if anything has been done on this issue by yourself.

    Look forward to hearing from you.



    The Abandoned Iraqis - Shame on the UK
    August 08, 2007
    Dr Bhaskar Dasgupta
    Now this is a big blot on the British Government. A really bad situation. The British Government allows refugees to flood into the United Kingdom but where people have actually helped us in delivering our foreign policy objectives, we treat them horribly. Why? Why are we so ungrateful? And unthinking? Do the grand panjandrums in Whitehall have rocks in place of their brains? And is Prime Minister Gordon Brown thinking? We keep on doing this. These are interpreters for the British Army units in Basra. As you can imagine, they are putting themselves in harm's way.
    And as you can further imagine, they will and are being targeted as traitors by the assorted militias and terrorists in Southern Iraq. So given the fact that they helped us and in return, are facing danger to their lives and for their families, dont you think we should give them asylum and a leg up to settle in the UK? For crying out loud, they can be our greatest asset in the fight against Arabic speaking terrorists. Bring them into our counter-terrorist intelligence operations in the UK! But no, we are going to be stupid at best and criminally negligent at worst.
    We did it to the Cossacks after World War II by handing them over to the Russians who massacred them mercilessly. See
    here , and here. Shameful, utterly shameful. And we are not talking about 5 people here or there, we are talking about hundreds of thousands of people, where the British soldiers actively took these cossacks, their families, women and children, using British military transport, and handed them over to the murderous communist thugs of Stalin. And nothing, nothing since then in the British history books or media, it is as if it did not occur. And not one British Soldier or Politician has done or said anything to acknowledge this shameful crime.
    But they were "others". Think about those brave little soldiers, the Gurkhas. Their courage and loyalty is unmatched and legendary. And they have bravely gone into battle for Crown and Country for decades and decades. How do we repay them? Badly. See
    here and here. You can give a Gurkha a Victoria Cross but you cant give him Citizenship? You pay him peanuts which is not even sufficient to live upon properly. While you are happy to spend money down the drain on silly things such as the bloody Millennium Dome. Why on earth did these brave British soldiers have to go to the courts to ask for decent behaviour? Are we now lacking in any form of gratitude? some form of common sense? a bit of faithfulness and loyalty? How absolutely bizarre and heartless of us!
    And now these interpreters in Iraq. Criminal.

    Israel's Military Intelligence Performance in the Second Lebanon War

    An interesting report crossed my in-box, which compared the intelligence performance of Israel during the Second Lebanon War. Broadly speaking, it did very well in the strategic aspects but failed miserably on the tactical aspects, therefore letting Hizbollah escape without the overwhelming defeat which is usually the fate of Israeli opponents.

    The author points to two aspects. The first and frankly admirable aspect is that of Hizbollah, it has amazing security protocols, which made it impossible for israeli intelligence to penetrate the organisation. Compartmentalisation of information was taken to an insane level, the communications security was top class (no evesdropping on their comms), and very worryingly, have a very good counter-intelligence activity. The fact that Israeli soldiers were using mobile phones was stupid, and Hizbollah is reported to have hacked into the mobile phone network, tracked their movements and in many cases, ambushes were setup. Also, by knowing their movements, they hid their rockets!

    On the Israeli side, they did not have human agents inside Hizbollah, the Christian Maronites were not used, high turnover of israeli officers within the services, lower priority given to tactical intelligence gathering over strategic reporting, and sadly, even when they did have reports, they did not distribute them effectively or efficiently to the ground forces. End result? well, we all know it.

    Now India and Israel are collaborating closely, but I wonder if the Israeli forces read the Kargil report from a few years back? Here is a good overview of that report and here is another. Here is a good conference review on the conflict. I strongly believe that the intelligence agencies should review and read these again.

    All this to be taken with a grain of piquant salt!!!

    The Draft, good or daft idea?

    In his recent blog entry, Steven Levitt, author of Freakonomics, says that the draft is a bad idea. He refers to Milton Friedman who opposed the draft and in my obituary of that great man, that's one of the things i disagreed with him. A draft is not much more than paying taxes as a human activity. Measured as an economic man, this is silly for him to do, but as a citizen of a state, this is one of the activities that one has to do. That's the compact a citizen makes with the state and that, I am afraid, does not square with economics.

    What do you think?

    All this to be taken with a grain of piquant salt!!!

    Restore the Draft? What a Bad Idea
    Steven D. Levitt
    A long report in Time magazine a few weeks back carries the headline: “Restoring the Draft: No Panacea.”
    Milton Friedman must be turning over his grave at the mere suggestion of a draft. If the problem is that not enough young people are volunteering to fight in Iraq, there are two reasonable solutions: 1) take the troops out of Iraq; or 2) compensate soldiers well enough that they are willing to enlist.

    The idea that a draft presents a reasonable solution is completely backwards. First, it puts the “wrong” people in the military — people who are either uninterested in a military life, not well equipped for one, or who put a very high value on doing something else. From an economic perspective, those are all decent reasons for not wanting to be in the military. (I understand that there are other perspectives — for example, a sense of debt or duty to one’s country — but if a person feels that way, it will be factored into his or her interest in military life.)

    One thing markets are good at is allocating people to tasks. They accomplish this through wages. As such, we should pay U.S. soldiers a fair wage to compensate them for the risks they take! A draft is essentially a large, very concentrated tax on those who are drafted. Economic theory tells us that is an extremely inefficient way to accomplish our goal.

    Critics might argue that sending less economically-advantaged kids to die in Iraq is inherently unfair. While I wouldn’t disagree that it’s unfair that some people are born rich and others poor, given that income disparity exists in this country, you’d have to possess a low opinion of the decision-making ability of military enlistees to say that a draft makes more sense than a volunteer army. Given the options they face, the men and women joining the military are choosing that option over the others available to them. A draft may make sense as an attempt to reduce inequality; but in a world filled with inequality, letting people choose their own paths is better than dictating one for them. As a perfect example of this, the Army is currently offering
    $20,000 “quick ship” bonuses to those who are willing to ship out to basic training within 30 days of signing up. (This bonus likely has something to do with the fact that the Army just hit its monthly recruiting goal for the first time in a while.)

    It would be even better if the government was required to pay fair wages to soldiers during war time — i.e., if combat pay was market-determined and soldiers could opt to leave whenever they wanted, like most jobs. If that were the case, the cost to the government would skyrocket and more accurately reflect the true costs of war, leading to a truer assessment of whether the benefits of military action outweigh the costs.
    Critics also argue that, if more affluent Caucasians were in the military, we wouldn’t be in Iraq. That is probably true, but it doesn’t automatically mean that a draft is a good idea. A draft would make fighting wars much less efficient, which should mean fewer wars. But it may be the case that, if you can fight a war efficiently, it is worth fighting — even if it’s not worth fighting inefficiently. Just to be clear, I am not saying this particular war is necessarily worth fighting — just that, in theory, this could be true.

    As a side point, the current system of relying on reservists doesn’t seem like a good one, either. Essentially, it involves the government overpaying reservists when they aren’t needed, and underpaying them when they are needed. This setup shifts all the risk from the government to the reservists. From an economic perspective, such a result doesn’t make any sense, because individuals shouldn’t/don’t like risk. Ideally, you would want a system in which the payment to reservists is extremely low in peace time, and high enough in war time that they would be indifferent to being called up or not.

    Tuesday, August 14

    circular logic or let me go bash my head out on the nearest wall

    I am trying to get my password reset on my ISP email address as I have been locked out of it. So I email, call, and call and call customer support. Finally after 3 weeks, manage to get a lady who sounds a bit smart today. She said, well, the second line support people have emailed the reset password to you. Not really willing to admit that such a crucial piece of my life is dependent upon these near Darwin Award winners, I clarified, which email account have you used to email me? Pat came the answer, your bulldog account email. I fell silent wondering which insult to use? when the lady (did I mention that she sounded a bit smart?) exclaimed, ooooo, I seee!!!, not very smart of them, is it? I went, no, i dont think it is very smart while biting my tongue.

    So to cut a long story short, i have to wait for a written notification as their systems cannot handle another email account and their security policies forbid them from giving me the email password over the phone. Circular logic?

    All this to be taken with a grain of piquant salt!!!

    Foreign grad students and research | vox - Research-based policy analysis and commentary from Europe's leading economists

    Here is an interesting research report on the impact of visa restrictions on foreign doctoral students on scientific discovery and research in American universities. Short article but very interesting.

    International graduate students: are they critical for scientific discovery?

    Keith E. Maskus
    15 August 2007

    New research shows that visa policies that restrict foreign grad students in general, and favour those with greater financial resources, harm the research output of US science and engineering departments. American policy currently makes both of these mistakes, and needs fundamental reform.

    In the aftermath of the attacks of September 11, 2001, the US government significantly tightened the restrictions that foreign doctoral students needed to meet to qualify for student visas. Partly for this reason, the number of foreign graduate students in the United States fell by 18% from 2001-2003. In the face of strong opposition from universities and businesses needing technically skilled workers, procedures since then have been streamlined and enrolments are slowly rebuilding. However, in some scientific and engineering fields, especially computer science, the Visa Mantis security clearance continues to raise lengthy delays and increase costs for international students wishing to study in the United States.

    In truth, this shock simply exacerbated what appears to be a sustained decline in US graduate enrolments of international students in science and engineering, relative to universities in other countries, which began in the late 1990s. There are several factors behind this change, including the high cost of American study, the increasing quality of technical training at universities in numerous countries, and more relaxed immigration policies in Europe, Canada and Australia that make it easier for international students to remain post-graduation on an accelerated track to citizenship. Further, the extraordinary investments currently being made to enhance university science in China, Singapore, the United Kingdom, and elsewhere are making their institutions attractive locations for graduate students and faculty.

    In short, there is rapidly growing competition for an input that had been almost the exclusive province of American universities: highly proficient international doctoral students in science and engineering. Educational officials have widely decried the evident reduction in the “competitiveness” of American universities in this regard, claiming that this trend risks an eventual slowdown of US technological leadership. It has also attracted considerable attention from the National Academies (2005) and is a common subject for the public media. Indeed, in their intermittent battles over the future of immigration policy, one central question for the US Congress and the Bush Administration is how to treat foreign-born scientists and engineers.

    All of this raises an obvious question: how true is it that foreign doctoral students actually are causal contributors to knowledge development in the United States? Casual inspection of the data would support this idea. For example, the first chart below demonstrates that the number of international students receiving science and engineering doctorates (given by the line labelled “temporary visa holders”) rose from around 3,000 in 1980 to 8,000 in 2001, while the share of foreigners in graduate enrolments increased markedly. Many of these students became faculty members at US universities and established research programs of their own. At the same time, the number of scientific publications mushroomed over this period. It is possible that this increase in international students actually contributed to the expansion of knowledge, which is the question at hand. But it is also possible that both trends were driven by other factors, such as improvements in research capacities at universities arising from the growth in grant funding. As always, correlation is not causation.

    For this reason, it is difficult to sort out the actual causal impacts of foreign doctoral enrolments in the growth of publications. However, a current working paper, which I have co-authored, makes considerable progress (Stuen, Mobarak and Maskus 2007; hereafter SMM). Using data from the National Science Foundation, SMM calculate US and foreign enrolments in 100 research-intensive American universities, broken down into 23 science and engineering fields, over the period 1973 to 1998. SMM also break down the foreign students into country of origin, permitting calculation, for example, of the number of Russian enrolments in chemical engineering at Stanford in 1995. Because such enrolment decisions are endogenous to department quality, SMM estimate a first-stage instrumental variables (IV) equation to isolate the exogenous variations in student supply functions. The IV list they choose includes shocks in home countries, aggregated to eight regions, to GDP growth rates, real exchange rates, the oil share of GDP, policies restricting emigration to the US for study, and other variables. The potential power of these instruments may be seen in the second chart, which shows that Chinese enrolments in US programs expanded greatly after the restrictions on foreign study were relaxed in the early 1980s. It also demonstrates that Chinese doctoral students track increases in GDP per capita in that country.

    Policy Changes on Foreign Study Abroad in China and Doctoral Student Enrolment

    SMM use these student-supply shocks, which are specific to the 2300 individual department-university pairs, to estimate the independent contribution of domestic and international students to science and engineering journal publications. For this purpose, SMM developed a database from the ISI Web of Science that counts every publication in indexed science and engineering journals associated with at least one author at each department, amounting to over 3 million articles. These were aggregated to the university-department-year level, generating over 57,000 observations. SMM then estimated a “knowledge production function”, with the counts of publications (and also the number of citations of department publications) as dependent variables, and instrumented total graduate students, the international student share, department-level research expenditures, and an extensive set of fixed effects for field-university pairs, field trends and university trends. Because the dependent variables are integer counts rather than continuous variables, SMM estimate negative binomial regressions in their second stage.

    The results of the estimation are striking. To save space here, I summarise the results for the regressions explaining publication citations, which are probably the more relevant measure of scientific discovery. First, both US and international students are important contributors to publishing. Measured at the mean values of citation counts, an increase in enrolment of one American or one foreign student (holding total students constant) would raise the average number of department citations by 1.2% per year (about 15 citations).

    However, these impacts varied in interesting ways as the samples were broken down. For example, while a domestic student would raise citations in “elite” universities (those with high undergraduate admission standards) by 20, another international student would do so by 32, suggesting the latter are more productive in high-quality institutions. However, American students were more productive at the margin in “non-elite” universities. Breaking down the students into whether their BA degree came from higher-quality or lower-quality undergraduate students, SMM find that both US and international students from higher-quality schools significantly raised citation counts at elite universities, while foreign candidates from lower-quality schools actually reduced publication productivities. Lower-ranked departments that admit more such students, which may be necessary simply to have enough graduate enrolments to meet needs for teaching assistants, may be diminishing their own research productivity.

    Perhaps the most interesting result arises when SMM break down the instrumental variables into shocks that would be neutral across foreign students and those that would differentially affect students who could not afford to pay for schooling. The idea is that “neutral” shocks should not affect the quality distribution of foreign students, while negative “ability to pay” shocks should lower their average quality by cutting out productive students who cannot marshal the financial resources. Indeed, SMM find that neutral shocks generate a foreign-student productivity of about 19 publications, while non-neutral shocks generate a corresponding figure of 10 publications. The inference they draw is that shocks that restrict the supply of higher-quality students reduce the publishing productivity of American universities.

    The SMM results are relevant for assessing the wisdom of restrictive visa policies imposed on international doctoral students. The fact that all graduate students, whether domestic or foreign, directly expand knowledge creation, implies that enrolment restrictions on the latter do, in fact, hamper the research efforts of US universities. At a deeper level, visa policies that favour foreign students with greater financial resources are likely to have a particularly pernicious impact on the ability of science and engineering departments to thrive. American policy currently makes both of these mistakes, and needs fundamental reform.


    National Academies (2005). Policy Implications of International Graduate Students and Postdoctoral Scholars in the United States. Washington: The National Academies Press.
    Stuen, Eric T., Ahmed Mushfiq Mobarak and Keith E. Maskus. 2007. Foreign PhD Students and Knowledge Creation at US Universities: Evidence from Enrollment Fluctuations. Working Paper, Department of Economics, University of Colorado at Boulder.

    Now this is one of the bravest corporate decisions I have ever read about

    Check out this post by JP. Besides the very interesting debate about Facebook, how many of you would be happy to open up your mailboxes to your subordinates?

    All this to be taken with a grain of piquant salt!!!

    What an amazingly polite way to go about asking for self-determination, only in the United Kingdom!

    Today the Scottish Government released a white paper on Scottish Independence. In effect, it is asking for a national debate on three options.
    1. Retention of the devolution scheme defined by the Scotland Act 1998, with the possibility of further evolution in powers, extending these individually as occasion arises.
    2. Redesigning devolution by adopting a specific range of extensions to the current powers of the Scottish Parliament and Scottish Government, possibly involving fiscal autonomy, but short of progress to full independence.
    3. Extending the powers of the Scottish Parliament and Scottish Government to the point of independence.
    The current Scottish government prefers the third option. Now there is a gigantic amount of political history behind this, and an even greater mind-numbingly boring amount of economic history behind this desire for economic history. I will be reviewing this paper in greater detail (some of the proposals are extremely cute and smart, very very cute indeed), but thought of bringing this to your attention with some initial comments.

    1. Its only in the United Kingdom that you can actually have debates over independence based upon some bureaucratic method!, lol, i was laughing my guts out when I look around the world where people are fighting for self determination and independence using terrorism, revolutions, blood, riots, etc. And what do we do? we write a paper!

    2. All the TV channels are full of this white paper, and the main element of debate? Are there furious debates about the historical record? or the atrocities carried out by the English? or digging out old history and pointing fingers? oh! no, I am afraid the debate is stultifying boring and concentrating on what will be the impact on public finances in Scotland if/when it becomes independent. PUBLIC FINANCES? YAWN!

    3. Most of the people wont be bothered, and frankly, if you ask me, this is a classic elitist or a small segment of population driver. But I would be curious to learn how they plan to explain this level of public opinion. 31% FOR, a drop of 20% in just 6 months?

    4. I would like to draw your attention to another essay which I wrote before. When parties which demand self determination and independence get into government, then the scales drop from people's eyes. Before independence or governing, they are all about just 1 thing, the protest vote, the reform vote, the distancing vote, the independence vote, call it what you may. But when they get into power, they have to deal with the same things, sewers, hospitals, bridges, subsidies, transport, and all the angst which was on the previous government seamlessly transfers over to the new government. Well, the drop in support clearly shows that the populace has got over its conniptions / hissy fits and has managed to see the light.

    But fascinating reading! :)

    All this to be taken with a grain of piquant salt!!!

    Is USA really as near collapsing as the Roman Empire did?

    Now here's an interesting report from the Comptroller General of the USA. For those who do not know this fellow, he is an independent senior government official, somewhat akin to the Auditor General in other countries, who reports directly into the US Congress and is really considered to be independent of partisan politics. He is also blessed with an attention span greater than a blowfly (more than 1 week, remember the quote about a week being a long time in politics?) so he can take a long view on "stuff".

    He spoke at a meeting and was unusually downbeat about USA, talking about how the US government is sitting on a "burning platform". The platform being burnt on firewood made up of huge deficits, major health care issues and funding problems, immigration chasms and problems, runaway spending, heavy over-extension on military and foreign policy, and so on and so forth. And he draws a parallel with the end of the Roman Empire.

    He talks about trying to repair the US government and US state by targeting the above problems in a bi-partisan manner so that the US state lives on for much longer rather than be over-run by the Huns, Ostrogoth's, Visigoths and various other goths and bots (pun intended). Some of his quotes are very very thought-provoking indeed.

    At the start of the 21st century, our country faces a range of sustainability challenges: fiscal, health care, energy, education, the environment, Iraq, aging infrastructure, and immigration policy, to name a few. These challenges are complex and of critical importance.

    Unfortunately, our government’s track record in adapting to new conditions and meeting new challenges isn’t very good. Much of the federal government remains overly bureaucratic, myopic, narrowly focused, and based on the past.

    To preserve its ability to address these and other emerging trends, America needs to return to fiscal discipline and focus on the future. At both ends of Pennsylvania Avenue and on both sides of the political aisle, we need leaders who will face these facts, speak the truth, partner for progress, and make tough choices. We also need leadership from our state capitols and city halls and from businesses, colleges and universities, charities, think tanks, the military, and the media. So far, there have been too few calls for fundamental change and shared sacrifice.


    Obviously, a return to fiscal discipline is essential.

    Government transformation is also essential.

    Unfortunately, once federal programs or agencies are created, the tendency is to fund them in perpetuity. This is what I mean when I say our government is on autopilot.

    We need nothing less than a top-to-bottom review of federal programs, policies, and operations.

    Entitlement reform is especially urgent.

    In so many areas—recruiting, training and development, job classification, pay and benefits, and employee empowerment—the federal government lags behind other sectors. This is a serious problem given that, in many areas, the government is competing with these sectors for top talent. Moreover, despite the wave of federal retirements that we know are coming, few agencies have adequate succession plans in place.

    And his closing statement?

    What’s needed now is leadership. The kind of leadership that leads to meaningful and lasting change has to be bipartisan and broad-based. Character also counts. We need men and women with courage, integrity, and creativity. Leaders who can partner for progress and are committed to truly and properly discharging their stewardship responsibilities. But leadership can’t just come from Capitol Hill or the White House. Leadership also needs to come from Main Street.

    There is much to agree with what he said, but one needs to think about this alternative viewpoint. Yes, the Roman Empire collapsed, but the core civilisational ideas survived, the idea of democracy, of separation of church and state, the establishment of the longest serving organisation (the Catholic Church), huge artistic and scientific advances, all these happened due to, after the crash and in Italy. So while ONE system of government collapsed, Rome as Gibbons said, still lives on.

    Final word? "In Italy for thirty years under the Borgias they had warfare, terror, murder, bloodshed - but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love, 500 years of democracy and peace, and what did that produce? The cuckoo clock. So long, Holly." - The Third Man

    All this to be taken with a grain of piquant salt!!!

    Civic Banking - It makes sense

    My colleague, James Gardner over at LlyodsTSB has written an excellent and thought provoking post on what civic banking means. Now this is something that British banks can take a leaf out of, see the figures here for bank customer satisfaction.

    Further research commissioned to GfK NOP showed that treating customers fairly is at the core of regulation for banks and building societies. Two thirds (67%) of customers agreed that that they are treated fairly by their building society, compared to under half (48%) of bank customers. While 34% of bank customers said they did not trust their provider, just 17% of building society customers said they could not trust the advice they were given – a figure building societies will work hard to reduce even further.

    All this to be taken with a grain of piquant salt!!!