Global Guerrillas

LINKS: 28 OCTOBER 2010

Some random items of interest:

• Hersh on Cyberwar in the New Yorker.  I've been in some of the high level discussions on cyberwar the USG is having, and it's a complete mess.  There isn't any structure to the debate and it is being driven by refurbished Cold Warriors that don't understand it (all of them understand the $$ attached to it though).
• New Orleans: In seven years, New Orleans' crime camera program has yielded six indictments: three for crimes caught on video and three for bribes and kickbacks a vendor is accused of paying a former city official to sell the cameras to City Hall. (via Schneier)
• Estimates of the size of the National Petroleum Reserve in Alaska slashed by 90%. Was the earlier estimate pure spin?
• Chinese menace advertisement on YouTube. Used to promote a political position on the deficit and health care. (mi: 135,373)   On that note:  a short clip from a hilarious Chinese show called "Money Mind." (mi: 13,647)
• Online tool to promote the effectiveness of the USG's stimulus funds.  It did just the opposite for me.  I used the tool to check on stimulus spending in my zip and found that $3 m in grant money was spent to create one job.  Stimulus tip (in an age of transparency): if you can't directly link $'s spent with a specific job, don't spend it.
• Video of Iranian militia shooting at protesters.  (mi: 25,784)  Vast majority of views coming from Iran.  Interesting video of huge lines to get gasoline in Iran (mi: 1,753)
• More coming.

NOTE:  Whenever you see mi, it means Momentum Index.  The Momentum Index is the social media equivalent of what the Dow Jones Industrial Average is for the stock market and PageRank is for Google.  If you are interested in finding out more about Momentum (the tool behind the index), please send me a note.

LINKS: 27 OCTOBER 2010

Some random items of interest:

• More D2 Sturm und drang from Bill Gross at PIMCO.  Why November 3rd is more important than the 2nd. We are, as even some Fed Governors now publically admit, in a “liquidity trap,” where interest rates or trillions in QEII asset purchases may not stimulate borrowing or lending because consumer demand is just not there. Escaping from a liquidity trap may be impossible, much like light trapped in a black hole.
• On Lawrence of Arabia's role as one of the founders of 20th Century guerrilla warfare and a good source of insight into Afghanistan.  I concur.  He's typically left out.  Further, open source warfare (21st Century guerrilla warfare) owes a BIG debt to Lawrence.  More at the great arab revolt research project.   Also, I heartily recommend both the Seven Pillars of Wisdom (only $2 on Kindle) AND Liddell Hart's Lawrence of Arabia (Hart does an excellent job dissecting Lawrence's strategic logic).
• Glen Greenwald at Salon dissects the role of establishment media (using Wikileaks coverage as an example).  In short, establishment media (NYTimes, WaPo, ABC, CBS, NBC, etc.):  "serving the Government's interests, siding with government and military officials, and attacking government critics is what they do. That's their role. That's what makes them the 'establishment media"
• More support that this century's great depression (D2) has already started and is about to get worse.  

LINKS: 26 OCTOBER 2010

Some random items of interest:

• Amexica.  An excellent new book on the open source war in Mexico.  Shlok has a solid review.  Vanity Fair has an excerpt.
  
  The Mexican narco-war may be the first real 21st-century war—a war that is, in the end, about nothing. Yes, there are regional and clan identities involved—loyalties of a sort to Tamaulipas, to Michoacan, to Sinaloa—but they are too fluid, too subject to betrayal, for the war to be defined as tribal. Yes, the Mexicans are torturing and killing one another over money and the smuggling routes that provide it, but much of the savagery, as noted, is over the smaller profits of the domestic market, the street corner, the sprawling colonia—savagery perpetrated for little real reward, and mainly for its own sake. Mexico’s war has no single propelling cause, no single objective, and certainly no grand ideology. It is a conflict of a post-political era.
   
• Griftopia.  Matt Taibbi's new book on the financial rape of America.  Here's a chapter on the sale of interstate highways, parking meters, etc by cash strapped cities and states.
  
  When you're trying to sell a highway that was once considered one of your nation's great engineering marvels — 532 miles of hard-built road that required tons of dynamite, wood, and steel and the labor of thousands to bore seven mighty tunnels through the Allegheny Mountains — when you're offering that up to petro-despots just so you can fight off a single-year budget shortfall, just so you can keep the lights on in the state house into the next fiscal year, you've entered a new stage in your societal development.
   
• Nice global map of Hackerspaces.  Seoul Korea has combined its hackerspace with its transition town effort (as in:  hackerspaces and resilient communities = goodness).
  
  
  
• A detailed description of why the mess in the mortgage securitization fiasco isn't just a paperwork error.  
• Ex San Jose police chief in favor of CA's prop 19.
• Microrentals.  BMW launching hourly car rentals.  Comparison to car share systems.
• More on the decline of the middle class in the US.
• Prefabbed micro botnets.  

QUOTES: Why Work?

Re:  Maslow's Hierarchy of Needs  "Everything from that second tier to the capstone, they (Internet Types) can get at a cost that rounds down to zero, if they so choose."  David Wong at Cracked (the humor site).

“Poor folk love their cellphones!”  Bruce Sterling.  Connectivity = Poverty.  

Bruce Sterling on Favela chic: "You have lost everything material, no job or prospects, but you are wired to the gills and really big on Facebook."

For most kids today in developed economies, the question is: why should I work (any more than I have to) if most of what makes me happy is nearly free?  

Connectivity = poverty will grow until:  an economic system that truly leverages and aligns with social connectivity is built.  Once that social economy is built...  watch out.  

JOURNAL: Different Visions of the Future

Watch this video on kickstarter and the trailer for this video documentary.

Now ask yourself the question:

Which world would you want to live in? 

THE MORTGAGE FIASCO IN SIMPLE TERMS

Here's a quick and dirty synopsis of what is going on in the US mortgage industry from everything I've read.  It's an early read of the situation, and it comes with the usual caveat "I am not a lawyer," but I think it explains why many, if not most, mortgages in the US are potentially worthless scraps of paper.  

The reason I spent the time to explain this, is that this could be one of the factors (along with currency wars and sovereign defaults) driving a massive financial crisis over the next year or so.

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Here it is.  Traditional mortgages are simply contract between you and your local bank:

• You agree to pay a certain amount every month (principal + interest) until the loan is paid off.
• Your home (the title) is collateral on that loan.
• If you don't pay the amount specified, your home is forfeit.

However, global banks wanted to take these dull mortgages and turn them into something institutional investors could purchase.  So, they developed a complex process to do this.

First, they sold the loans to the institutional investors (as securities that they are allowed to purchase according to their charters) by removing the collateral, your home's title, from the loan. 

Second, they put the title in a special pool that "simulated" the effects of collateral on the loans they sold.  To accomplish this, the banks had to a create a complex process to comply with the myriad rules controlling real estate transactions (state, interstate commerce, etc.) and federal tax laws.  Further, this process was very rigid.  It to be completed in a specified time (within the year of the securitization) and in a specified way in order to be legal.

However, and here is where things went really wrong.  The banks, and their representatives didn't do the paperwork, as required by law, on millions of mortgages.  Why?  In some cases the process of filing the paperwork was considered too expensive and was put off.  In other cases, it was avoided because it could trigger unwanted liability given the claims made by the sellers of the loans to investors (as in:  the quality of the loans was very high, when they had reason to believe this was otherwise).  

In any case, the collateral was never actually transferred properly.  So, the loans that were sold to investors became simple contracts:

• You agree to pay a certain amount every month (principal + interest) until the loan is paid off.

Note that there's nothing more to this loan.  No collateral.  No foreclosure for non-payment. 

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Thing is, this isn't a paperwork error.  It's gross negligence, on the bank's part, that materially altered the relationship between you and the new owner of the loan.  Once the collateral was removed from the loan, it can't be reattached.  Your home's title can't be attached to a loan willy nilly and without your consent.  To do otherwise is theft, and that's exactly what every lawyer from here to Timbuktu will be arguing.  

Of course, that's not going stop the banks from trying to "fix" this.  They've already tried fraudulently manufacturing paperwork via fake, backdated signitures to claim the title was properly sent to the reserve.  They got found out and foreclosures were stopped across the country.  Expect similar behavior in Congress and in the press.  

EXAMPLE: Networked Start-ups

Here's a great example of how the Maker Revolution in combination with global economic networks can become an engine of economic growth for resilient communities.   

The example is a new "start-up" that is "selling" a product called the Glif.  Essentially, it's a small piece of plastic that allows you to mount your iPhone 4 on a tripod.  It solves a niche problem quite nicely.  

To build it.  The team ( Thomas Gerhardt and Dan Provost) did their research and product development on their own (a labor of love).  They also printed a 3D plastic prototype.  To raise money for low cost per unit (and likely higher quality at this juncture) injection molding ($10 k fixed cost set-up), they turned to Kickstarter for funding.  

It has been an unqualified success, selling nearly 4,000 units for about $100 k in revenue.

Some items of note:

• The network of potential customers funds the effort.  It cuts out the expensive overhead of banks/venture capitalists. The network is also the retail outlet, not Amazon, during the early phase (saves $$).  Improved versions of this type of economic network could push this process to new heights.
• The development and production is potentially hyper local (more so if the final product was printed in 3D also).  Local hackerspaces are perfect for seeding this.

AUTOMATING THE MAKER REVOLUTION

Open source hardware is taking off.  Hackerspaces are spreading like wildfire (we'll see thousands, potentially tens of thousands, of these spring up in the next five years). To help this revolution zoom, we need an online system that standardizes and simplifies the description of the processes used to make the hardware.  For example:  Marcin over at openfarmtech has composed a replication document for partners developing the LifeTrac II open source tractor (see inset pic). It's a great effort, but so much more should be done.

So, what would a new system look like? Some ideas (drawn from a very similar system my team and I built 5 years ago -- it enabled globally decentralized printing of complex documents with exacting levels of quality):

• Specification standardization and conversion to standards.  Quality checks on the files to ensure completeness.  
• Process automation to simplify production.  Step 1, 2, 3, etc.  This could even include a ticketing system so more than one group could coordinate their activity.
• Bundles of automated quality control processes to ensure that the steps in the production process are done correctly.
• Lots more...

So, for anyone ready to get in front of the MAKER REVOLUTION (akin to the agricultural and industrial revolutions), this is the project for you (or me, if someone wants to fund it).  

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Adafruit Industries (a maker company) adds:  There are a few options…

• Wikis of all shapes and sizes (we like dokuwiki)
• Instructables
• Make: Projects

The big challenge is making documentation as part of the product and project. Each summer we’re asked if we have interns or jobs available and each year we say “document some projects you’ve made and send us links” – unfortunately not many have rallied to do this.

Twitter: @johnrobb

Spending some time on Twitter again (it's been years).  

JOURNAL: Financial Meltdown 2011?

Josh Rosner, a well respected banking analyst (via Naked Capitalism).  He maintains:  What if nearly all of the mortgages that were securitized (mortgage loans that were bundled and sold as securities) over the last decade are actually unsecured or worthless paper?  A couple court cases forced by actions like this, could set off the stampede.  

For more detail check out Yves (the author of Naked Capitalism) on BNN.  With mortgage securitization, the entire system of distrust created by transactional morality is being hoisted on the petard of its own complexity and greed.

JOURNAL: Open Source Jihad

A resource manual for those who loathe tyrants… a disaster for the repressive imperialistic nations:the open source jihad is America's worst nightmare.  Al Qaeda's stated goal for Inspire. 

Al Qaeda in the Arabian Peninsula put out a magazine this summer called Inspire.  It's a slick glossy e-zine. What really makes it interesting isn't how slick the magazine is.  Instead, it is the purpose of the magazine: to promote "open source jihad" by providing readers with the tools they need to plan, motivate, organize, and pull off effective attacks against Western targets (i.e. specifics on recipes for bombs that don't use controlled substances and how to's on secure Interent communications via the software Asrar Al-Mujahideen).

This is yet another example of how young, innovative insurgents around the world are embracing open source warfare (OSW).  

JOURNAL: Moral Decay?

Moral decay is often cited as a reason for why empires/civilizations collapse.  The slow failure of the US mortgage market, the largest debt market in the world and the shining jewel of the US economic/financial system, is  a good example of moral decay at work.  

Why is this market failing?  It's being gutted -- from wholesale fraud and ruthless profiteering at the bank/servicer level to strategic defaults at the homeowner level -- because a relatively efficient and effective moral system is being replaced by a burdensome and ineffective one.  What shift?  Our previous moral system featured trust, loyalty, reputation, responsibility, belief, fairness, etc.   While these features were sometimes in short supply, on the whole it provided us with an underlying and nearly costless structure to our social and economic interactions.  

Our new moral system is that of the dominant global marketplace.  This new system emphasizes transactional, short-term interactions rather than long-term relationships.  All interactions are intensely legalistic, as in: nothing is assumed except what is spelled out in the contract.  Goodness is solely based on transactional success and therefore anything goes, as long as you don't get punished for it.  

In this moral system, every social and economic interaction becomes increasingly costly due to a need to contractually defend yourself against cheating, fraud, and theft.  Worse, when legalistic punishment is absent/lax, rampant looting and fraud occurs.  

Given the costs and dangers of moral decay, it's not hard to see why it can cause a complex empire/civilization to collapse.

JOURNAL: Weak Social Networks?

Social networks are effective at increasing participation—by lessening the level of motivation that participation requires....   Facebook activism succeeds not by motivating people to make a real sacrifice but by motivating them to do the things that people do when they are not motivated enough to make a real sacrifice.  Malcolm Gladwell's recent article (Small Change) in the New Yorker (where he contrasts the +/- of weak tie networks with hierarchies).

In abstract, weak tie networks do have deficiencies: they don't provide enough motivation for risky action and they often lack strategic coherence.   However, in the real world, solutions to these problems are already evolving.  Some we've already seen include:

• Lots of small, local networks with strong ties between individuals embedded within a much larger weak tie network (we've seen this in the open source insurgencies in Iraq and Afghanistan).  
• Light coordinating networks that are limited to enabling strategy and conducting public relations for a larger weak tie network (MEND, Tea Party, 4Chan, Wikileaks, al Qaeda, Linux, etc.).
• Disruptive methods of attack that are easy for participants in weak tie networks to put into play.

No silver bullet yet, but this is a process in evolution.

NOTE:  I think the problems Gladwell cites have more to do with the death of protest movements as a means of social change than any deficiencies seen in weak tie networks.

JOURNAL: Social Media Insurgency

Here's an interesting social media insurgency called "Rethink Afghanistan." It's a combination of a blog site with movie clips and a Facebook group that's already generated ~48 k likes.  As part of this effort, it's taking effective aim at Petraeus.  

On a similar note here's an article about "brand jacking." Fernando Motolese, a creator of viral videos, recently approached French food giant Danone (known as Dannon in the United States) with an unusual proposition. He had filmed a gross-out humor video about the gastrointestinal effects of Danone's Activia yogurt, and he intended to release it on the Internet. Would Danone pay him a few pennies each time the video got viewed? If not, Motolese said, he might upload an even more offensive spoof.

THE NEXT SOCIAL NETWORKING JUGGERNAUT

Some fun thoughts about social networks (a side benefit of having spent the last couple of months up to my eyeballs in social networking data).  It may or may not be useful.

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Up until now, Facebook and Twitter have just been riffs on blogs. These networks are pretty much dealing the same ideas the community building blogging software was talking about back in 2001.*  Essentially:  blogs + RSS (really simple syndication) = knowledge/social networks for organizations.  Another similar approach is what LiveJournal was doing with teenagers.

The above implies that the real next generation of social networks (2.0) is not just more of the same.  That revolution has passed.  It's something else entirely.  So what is it?  My belief is that this next phase is going to be driven by the following: a combination of software that makes group formation/mx easy and online gaming,

A sign that at least part of this is on the right track: Facebook has just jumped into this area with some new grouping features that they think is critical to their future.

Here's a restatement of the opportunity to turn Facebook into the equivalent of AltaVista/Yahoo of social networking:

• Software that makes grouping easy... from initial recruitment, first member recognition, rules for behavior, enforcement, goals, and reward allocation. Everything you need to build a group that operates as a club, a tribe, or a company. 
• Open MMOG (massively multiplayer online game) functionality.  Basically, a set of functionality that enables people to build their own games on the network.  As in:  You get points for....  Your quest is..  Your reward is....   This gets even more interesting if you believe, as I do, that all real world social networks (like the global economy) are just poorly written MMGs (massively multiplayer games) with obscure/hidden/rigged rules.
• To really do this right, by avoiding cognitive slavery and zooming the platform to new levels: the entire platform should be owned in large part by the users.  Make the users of the platform financial partners (based on their participation) and this could turn into something that gives modern capitalism a run for its money.

* NOTE:  As an example of some early (albeit clunky) thinking on social networks, read some the posts I made to my old k-logs group during 2001 thru 03. K-Logs (knowledge management weblogs) was a relatively influential discussion group back in the early days of social networking, when there were only a couple of hundred (soon a couple of thousand) of us in the blogging universe (I'm not claiming any prescience on this, only noting the similarity).

LINKS: 7 OCTOBER 2010

The posts have been MUCH slower than usual since the summer.  I've been working on a new product.  It's very close to release, so I can start to ramp up the posts again.

Here's some random items of interest:

• Latitude.  An interesting presentation on the "Sharing Economy."  Nice thinking. People are most interested in sharing infrequent-use items that have a high barrier to ownership or a high burden of ownership. Cut that premise into a MMOG economy and something interesting will happen....
• Michigan to make it illegal for people to build farms on their land in Detroit?
• Naked Capitalism gets hit by DDoS attacks. The logfiles show massive traffic spikes. So I guess I’m annoying people who like fighting dirty.  This is pPotentially due to the author's relentless coverage of rampant fraud in the US mortgage market, which is the biggest debt market in the world. Fraud on this scale is only rivaled by what we saw in Russia after the collapse of the USSR.  This is very similar to the situation Orlov anticipated.
• Resilient tech:  Growing plastic.  Eben Bayer: Are mushrooms the new plastic? While our approach appears less sophisticated than plastics, living cells should be considered fantastic near nano-tech type assemblers. The mycelium we use in our process transforms ag-byproducts into a natural polymer, and it does it at room temperature & pressure & at any scale. The plastics industry requires supply chains that stretch around the world and giant facilities to perform the same feat.  Eben Bayer on Twitter.
• America's path to permanent war.  Andrew Bacevich's MIT lecture on his new book:  Washington Rules
• Globalization and modularity:  Modularity is a characteristic of healthy ecosystems.  The global economy works against modular structures (hmm, sounds like yet another refutation of Ricardo).
• 3D printing can handle even large parts.  Printing all of the parts required for a custom car or aircraft is not that far away. 
• The US and Shell get Henry in South Africa.
• Damon Vrabel.  The US is spending all of its money fighting the wrong enemy. The "War on Terror" has become the most successful military diversion in history, having lasted twice as long as WWII so far. While the US and other countries are under severe attack by financial powers through the corporate system and the currency and bond markets, the US military is convinced that people living in remote deserts are the threat.  Shades of the losing side in the cold war.