Tag: finance

 

 

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When the God of all fiat inflated

All those in his realm were elated

Their joy was a lie

And now they must die

For hazard was all he created

The Limerick King

 

 

 

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When they came to the end of their climb

They discovered the source of the crime

The All Seeing Eye

Shone bright in the sky

Destroyer of wealth for all time

The Limerick King

 

 

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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5hE0vh04mnQ/story01.htm williambanzai7

It is perhaps ironic that the creator of the AK-47 assault rifle, also known as the Kalashnikov named for its creator Mikhail Kalashnikov, and of which there are between 70 and 100 million in circulation making it the world’s most popular weapon, has just passed away from what is essentially old age, at 94. “It is difficult and sad to realize that Mikhail Kalashnikov is no longer with us. We have lost one of the most talented, memorable and committed patriots of Russia, who served his country throughout his life,” said the statement from the press secretary of the Udmurtia administration Viktor Chulkov.

RT reports that Kalashnikov, who had been suffering from heart-related problems in recent years, had been in intensive care in Izhevsk – where the plant that produces the eponymous rifles is located – since November 17. The official cause of death will be revealed following a mandatory autopsy.

More on Kalashnikov’s passing from RT:

A public funeral will be organized by the regional administration, in consultation with surviving relatives, though no date has been named so far.

 

For most of his life, Kalashnikov was feted as a straightforward hero.

 

The self-taught peasant turned tank mechanic who never finished high school, but achieved a remarkable and lasting feat of engineering while still in his twenties.

 

But as the rifles, inextricably linked forever to their creator by name, were more and more commonly seen in the hands of terrorists, radicals and child soldiers, the inventor was often forced to defend himself to journalists.

 

He was forever asked if he regretted engineering the weapon that probably killed more than any other in the last fifty years.

 

“I invented it for the protection of the Motherland. I have no regrets and bear no responsibility for how politicians have used it,” he told them.

 

On a few occasions, when in a more reflective mood, the usually forceful Kalashnikov wondered what might have been.

 

“I’m proud of my invention, but I’m sad that it is used by terrorists,” he said once.

 

“I would prefer to have invented a machine that people could use and that would help farmers with their work – for example a lawnmower.”

 

Indeed, at his museum in Izhevsk, where he spent most of his life working at the factory that was eventually named after him, there is an ingenious mechanical lawnmower Kalashnikov invented to more easily take care of the lawn at his country house.

 

It’s not what he will be remembered for.

 

Considering his age and circumstances, it was hardly surprising that Kalashnikov felt he could best serve his country by creating weapons.

His life story, as presented in a prepared obit by the FT:

Mikhail Timofeyevich Kalashnikov was born on 10 November 1919 into humble surroundings in western Siberia. After basic secondary schooling he became a technician on the Turkestan-Siberian railway. When the second world war came he was drafted as a tank mechanic to the front near Bryansk in the west of Russia. Within months he was injured and it was in hospital that he became obsessed by his dream.

 

“I decided to build a gun of my own which could stand up to the Germans. It was a bit of a crazy escapade, I suppose. I didn’t have any specialist education and I couldn’t even draw,” he said. His first designs attracted little attention, but on release from hospital he went back to his engine workshop in Siberia to try to make a prototype.

 

It was not long before he was on his way to Alma-Ata, the capital of Kazakhstan, with his first model in his hand. On arrival in the town, he was arrested for carrying unauthorised firearms, but the police soon released him when he told them of his dream project.

 

Kalashnikov went straight to the Communist party for advice and was sent to several provincial institutes. After a determined battle with the bureaucrats, he finally made it to Moscow. But the diminutive sergeant was scorned by the top brass, including generals such as Vasily Degtyaryov, the Soviet Union’s most prominent weapons designer between the wars.

 

Kalashnikov was so shy that he signed his sketches “MikhTim”, the first syllables of his first names. But he persevered, and by 1949 had been awarded the Stalin Prize and made a Hero of Socialist Labour. The same year he was transferred to Izhevsk to supervise production. So secretive were the testings of the rifle that photographs were forbidden and cartridge cases had to be picked up after firing. By the mid-50s the AK-47 literally, the Automatic Kalashnikov made in 1947, was standard issue to the Soviet armed forces.

 

It was only in the 1960s, when he became a member of the Supreme Soviet, the then parliament in Moscow, that Kalashnikov emerged from the obscurity of Izhevsk. Even in the early 1980s, however, he was ordered not to reply to a letter from an American academic for fear of inadvertently disclosing information.

 

In May 1990, on his first visit to the old cold war enemy, he was introduced in Washington to Eugene Stoner, designer of the M-16, the closest thing to an American equivalent of the AK-47, which was first issued to US troops in 1961. Kalashnikov’s clothes were shabby. The few dollars in his pocket had been given by his factory and by the American institute sponsoring the trip. He later recalled: “Stoner has his own aircraft I can’t even afford my own plane ticket.”

 

Kalashnikov’s personal life was fraught with tragedy. He met his wife Yekaterina at an army testing range near Moscow. She was a graphic artist and helped him put his designs on paper. They married in 1943 and had four children, although he saw little of them because of his work schedule. Yekaterina died in 1977 after a long illness, and his youngest daughter Natalia moved in to keep him company, only to die in a car crash six years later.

 

His hearing failing him, he lived alone for his final 10 years, although Yelena, another of his daughters, would visit him on Sundays to do the cleaning. His only perks were a driver and a country dacha by the lake. On his trips abroad, usually as part of a Russian delegation to an arms fair, he would always be accompanied by Yelena, who smoothed the path with her passable English.

 

Kalashnikov retained the title of chief designer at the Izhevsk factory that produced the AK-47 and related models, and in his later years would go to work on designs for new hunting rifles. He was an avid shooter, and with his son Viktor and a close-knit group of friends would go hunting for elk in the snow. Relaxing after a hunt in the factory’s dacha three hours outside the town, he often took to musing about his life.

 

His reflections were tinged with sadness that his rifle had become the tool of terrorist groups from the former Soviet republics, to Africa to Northern Ireland. “I wanted my invention to serve peace,” he once said. “I didn’t want it to make war easier. Constructors have never been given their just deserts in this country. If the politicians had worked as hard as we did, the guns would never have got into the wrong hands.”

Some visual info on the legendary gun:

 

Finally, a summary on the legacy of the world’s most popular gun from Weapons and Warfare:

 

The Long Road to the AK-47

No firearm in history has enjoyed the fame or popularity of the assault rifle known as the AK-47, or Kalashnikov. Created by a Soviet weapons designer at the dawn of the Cold War, it was mass-produced and distributed worldwide in the millions, leading to its canonization in the revolutionary Third World of the 1950s and 1960s. Indeed, far beyond its utility, the AK-47 became a Cold War icon, appearing on revolutionary flags, in songs and poems, and in televised insurgencies as proof of communist fervor and supposed martial superiority. And it continues to play a major role in warfare today, most visibly in guerrilla conflicts in Africa and the Middle East.

The AK-47 has succeeded so wildly because it is almost an ideal realization of the personal firearm: where most weapons have had to contend with tradeoffs between accuracy, lethality, speed of fire, reliability, cost of production, and ease of carrying and use, the AK-47 managed to find a sweet spot maximizing these traits. In fact, the weapon is so reliable, effective, and easy to use by untrained operators that its advent made it widely possible for just about any group, even with little money, modern technology, or formal military training, to mount significant, deadly assaults against a much larger and more advanced force — a fact that has transformed the face of warfare and created a revolutionary romance that still surrounds the weapon.

Since gunpowder is not static in power in the way that human muscle is, once fiery arms were invented in the fourteenth century, they would in theory constantly improve in a way that bows, slings, and swords could not. But in reality, centuries of technological stagnation followed the invention of the first gun: for example, the eighteenth- and nineteenth-century “Brown Bess” flintlock musket remained almost unchanged during its use by the British Empire over the course of more than a century. Early muskets and their predecessors had slow rates of fire and poor accuracy and reliability, and thus did not always ensure battlefield superiority over arrows, edged weapons, and hand-launched missiles. Benjamin Franklin famously advocated the use of bows by the cash-strapped Continental Army, arguing that they were cheaper, easier to use, and could send more arrows per minute than the musket could fire balls.

The problem was that the various qualities of a good handheld weapon were often mutually exclusive. Increased lethality, for instance, was usually attained by increasing the weight of the firearm and bullets, which often reduced reliability and mobility, and made weapons too expensive to outfit an entire army. So the development of personal firearms was often haphazard, especially during periods of general peace. Black-powder, muzzle-loading, smoothbore (unrifled) firearms were the norm for centuries. Only in the mid-nineteenth century did sophisticated metallurgy and techniques of mass production at last begin to usher in rear-loading models, cartridge ammunition, more powerful and smokeless gunpowder, rifled barrels, and interchangeable, machined parts. The result was a giant leap in the ability of soldiers to kill one another on a mass scale, as the ancient science of effective body armor was unable to keep pace. By the nineteenth century, the personal arms race was on.

The watershed years were those of the American Civil War, which created a race for more rapidly firing and lethal arms. The war that began with the use of muskets and Minié balls ended with the Henry repeating rifle, which allowed a skilled single shooter to load and fire up to twenty-eight times per minute. The war also saw the development of the Gatling machine gun, and, somewhat later, the Maxim, the first fully automatic weapon. The more advanced models of these machines could in theory spit out six hundred rounds per minute, allowing two-man teams to lay down a volume of fire greater than what was possible from a whole company of riflemen. The new machine guns proved revolutionary, especially in the colonial wars in Africa, Asia, and Latin America, in which small numbers of Westerners could trump numerically superior foes, sending a chilling message of technological superiority. The venerable traditions of the mounted lancer, the cavalryman, and the skilled swordsman slipped into decline with the advent of the machine gun.

But the early machine guns, though rapid-fire and quite lethal, were heavy and they often jammed, leaving their operators defenseless. And they were costly and difficult to move and maneuver. Nevertheless, during World War I, improved mobile Maxim, Vickers, and Colt-Browning machine guns reigned supreme across the trenches, overpowering the firing rates of bolt-action, clip-fed rifles. In response to the machine gun’s lethal tyranny on the battlefield, early twentieth-century tacticians began dreaming of an everyman’s mini-machine gun that would diffuse such killing power into the hands of millions of combatants.

The result was the generation of the so-called submachine gun, most prominently the German MP-18, the Italian Villar Perosa and Beretta Model 1918, and the American Thompson (or Tommy Gun). These weapons fired pistol cartridges, allowing for the employment of existing stocks; they were relatively light at around ten pounds; and they could in theory be shot at astounding rates of fire of well over 400 rounds per minute. Whereas World War I was defined by heavy machine guns battling each other in antipodal fashion across clearly defined fields of fire, battles of World War II were frequently fought in jungles, forests, and urban streets, in which the enemy was typically near and highly mobile. Submachine guns proved popular during this war — and spawned a number of cheaper imitations — thanks to their adaptability to a situation in which constant streams of bullets were directed at soldiers from every direction by constantly moving enemies, and enemies were more likely to be stopped by sudden, rapid fire than by precisely aimed shots from small, longer-barrel weapons.

Yet, for a variety of reasons, the new submachine guns could still not entirely replace clip-fed repeating rifles. While they delivered far more bullets pe
r minute, their short barrels allowed only for poor accuracy and limited range. The less powerful pistol cartridges and greater recoil from near-continuous fire also meant that few submachine guns were deadly beyond two hundred yards — a potentially fatal limitation at the times when rifle sharpshooters had clear fields of fire at over a thousand yards. The constant rapid firing, together with the grime, heat, and filthy conditions of battle, made the submachine guns jam far too frequently. And another problem developed during the war that transcended the weapons’ advantage of rapid firing: heavily-laden soldiers simply could not carry enough additional bullets — often larger-caliber .30 and .45 ammunition — to take advantage of their guns’ voracious appetites.

On the other hand, repeating rifles, even when semi-automatic and equipped with enlarged clips and improved barrel and stock designs that allowed a good chance of hits at great distances, did not allow enough shots per minute for the increasingly close-order combat in which enemy soldiers might appear suddenly en masse, and in all conceivable landscapes. Their longer barrels and clumsy shoulder stocks certainly proved a hindrance during close-in fighting. Other tradeoffs arose as millions of combatants joined the Allies or Axis powers in a global war, allowing little time to ensure traditional marksmanship training for men from such widely disparate backgrounds. The advantages that could be gained from employing a more accurate, slower-firing, traditional semi-automatic rifle were often lost by the inexperience of the users. There had been design attempts during World War I to bridge these differences, the most successful of which was the American Browning Automatic Rifle. It was almost as accurate as a rifle, but with a weight of over fifteen pounds and a small magazine of just twenty rounds, riflemen often had to shoot from a prone position, with a barrel tripod and plenty of available magazines nearby.

But in the post-World War II era, a true breakthrough addressed the apparently irreconcilable advantages of submachine guns and repeating, clip-fed rifles. The brilliant compromise became known as the “assault rifle,” the most prominent of which was the Russian Mikhail Kalashnikov’s AK-47 (for automatic Kalashnikov, model 1947), which came into wide use in the early 1950s. Kalashnikov, who benefited from the designs of earlier German and Russian prototypes, seemingly at last solved the six-hundred-year-long dilemma of providing an accurate rifle that was not only capable of firing hundreds of rounds per minute, but was still deadly at ranges of 300-400 yards and beyond. And at under ten pounds, the AK-47 was easy to carry, simple to operate, and highly dependable. Moreover, by using a medium-sized bullet (the 7.62x39mm cartridge, equivalent to about .31 caliber) rather than larger .40 caliber rounds, the AK-47 achieved a deadly muzzle velocity of over 2,300 feet per second. In short, Kalashnikov seemed to have squared the circle by creating a light, cheap, rapid-firing, accurate, reliable, and lethal weapon that was neither rifle nor submachine gun. The gun proved perfect for revolutionaries in Third World countries, and the Kremlin would gleefully reward its new friends with mass deliveries of their wondrous weapon.

The sudden ubiquity of the AK-47 stunned the United States and Europe, and seemed to turn the so-called First World’s advantages in marksmanship and weapon craftsmanship on their heads. Illiterate insurgents, amply equipped with cheap AK-47s — now produced even more inexpensively by an array of Soviet satellite countries — suddenly had at their disposal more firepower than American soldiers. And what did it matter if Western riflemen were in theory better trained or shot a better calibrated and more accurate weapon, when mere teenagers in the tens of thousands could pepper Western troops with bullets?

The widespread export of the AK-47 marked yet another Sputnik-like moment in which state communism seemed to outpace Western entrepreneurialism. And just as the Soviets’ Sputnik success would set off the space race, and as there were other rivalries between the Soviet T-34 tank and its American counterparts, and between MiG-15 and F-86 jet fighters in the skies of Korea, so too was there a competition in assault rifle technology. Not until the early 1960s did the Americans accept that their old reliable M1 and its replacement M14 were woefully wrong for the new non-traditional theaters of the Cold War.

If a new American assault weapon were to follow in the Kalashnikov model, it would have to trump its Russian competitor with greater accuracy and lethality. This goal was seemingly accomplished with the M16 rifle, invented in the 1950s by the legendary arms designer Eugene Stoner. The sleek black assault rifle employed plastic and aluminum alloys to reduce the weight to two pounds less than the rival AK-47. And it used even smaller ammunition — the 5.56x45mm high-velocity bullet that was to become the standard NATO round.

The result was that, by all accounts, the M16 proved to be an exceptionally reliable and accurate assault rifle. Its smaller-caliber bullet was in some ways as lethal as the AK-47’s larger ammunition, as it had a muzzle velocity of over 3,000 feet per second, and the bullet tended to break up after penetrating flesh. The M16 also proved somewhat easier to handle and had less recoil than the AK-47. And soldiers could carry far more of the lighter-weight ammunition. The ensuing shoot-off between the two weapons in the Vietnam War was supposed to make clear the American gun’s advantages in rates of fire, accuracy, and lethality.

But just the opposite proved to be true — at least in the first four years of the M16’s wide use. Jamming was chronic, apparently due to initial design flaws in the gun, manufacturing problems with the gunpowder, and soldiers’ frequent failure to clean the weapon regularly amid the humidity and dirt of the jungle. In contrast, the AK-47 seemed nearly indestructible, in part due to its simpler construction and greater tolerances. In Vietnam, at least, the verdict favored the notion of an uncomplicated assault rifle that compensated for lost accuracy by achieving greater reliability, simplicity of use, and a larger bullet.

The AK-47 further exasperated Westerners by its cheap fabrication from stamped metals and its brilliant operation with just a few working parts. By the late 1960s, soldiers were taking apart, cleaning, and reassembling the weapon in about half the time required for the M16. Something that felt and looked so “cheap,” and that was produced by the Communist Bloc notorious for its shoddily manufactured products, surely, it seemed, could not be comparable to a rifle designed by the Americans, the British, or the Germans, with their far more distinguished firearms pedigree.

Yet the Communist Bloc continued to meet world demand with millions of AK-47s. And when the Soviet Union collapsed, its former republics and clients often sought to unload their stockpiles at discounted prices. Ironically, the United States eventually became the largest purchaser of the AK-47 in its efforts to supply poorer allies — such as some areas of the former-Yugoslavia, post-Saddam Iraq, and Afghanistan — with cheap, reliable assault rifles without its own large fingerprints on the arm sales. The result today is that some 75 million AK-47s have been produced, with most still in circulation, making it the most ubiquitous weapon in the history of firearms — dwarfing the M16’s eight million.

The debate between exponents of the AK-47 and the M16 has never been resolved, in part because both guns continued to evolve with subsequent improved models and have now both been superseded by more recent designs; in part because ideology and national chauvinism were inseparable from dispassionate analysis; and in part because the relative value of accuracy versus reliability is so subjective. In any case, NATO troops in gene
ral felt that their improved models of M16s by the 1980s had proved superior, even as some of the old problems of jamming and insufficient stopping power sometimes reappeared during the harsh conditions of sand and heat during the most recent Iraq War.

The story of the AK-47, amid the ongoing saga of rifle evolution, has in recent years spawned a number of popular books. The best is C. J. Chivers’s scholarly The Gun. Chivers takes a properly skeptical view of many of the claims by Mikhail Kalashnikov surrounding the birth of AK-47, and offers a sober and fair account of the acrimonious rivalry between the M16 and AK-47. In dispassionate fashion, Chivers concludes that few inventions of the twentieth century have done so much to kill so many through “war, terror, atrocity, and crime.” But after such a clear-headed analysis of the AK-47, he surprisingly offers the emotional hope that eventually the seasons, aging, and wear and tear will finally rid the world of this nearly indestructible menace — and with it the bestowing into the hands of untrained near-children the world over the power to kill indiscriminately and en masse. To this hope, one might rejoin that the fault is not in our stars, but in our selves.

Larry Kahaner’s book AK-47: The Weapon that Changed the Face of War is a lighter but nevertheless engaging story of the contemporary AK-47 as a cultural phenomenon. He too reminds us that many of the terrorist movements and insurgencies in Asia, Latin America, and especially Africa would have been impossible without the widespread dispersion of the AK-47, the ideal weapon for impoverished, poorly trained mercenaries. He points out that the acrimonious controversy between the AK-47 and the M16 resurfaced again forty years after Vietnam during the post-Saddam Hussein insurgency, when improved versions of both assault rifles collided in the streets of urban Iraq. And the verdict was again ambiguous, as U.S. troops still largely preferred their own weapons but developed a grudging respect for the insurgents’ “bullet hoses,” which shot streams of deadly large-caliber bullets at close ranges and seemed impervious to the sand and heat of the Iraqi landscape.

Then there is the book by Mikhail Kalashnikov himself. Now a nonagenarian, Kalashnikov was presented in 2009 with the title Hero of the Russian Federation, the country’s highest honor. With the help of his daughter Elena Joly, Kalashnikov wrote an autobiography, first published in French in 2003 and available in a 2006 English translation. Kalashnikov fought during the worst months of the German invasion of Russia; in 1941, in a failed counter-offensive, he was almost killed when his Red Army tank regiment was cut off and overwhelmed.

During a long subsequent illness and recovery, Kalashnikov’s innate gun-making talents were noticed. And so, despite his lack of formal design training, he was soon promoted to work with a team of Soviet engineers, quickly emerged as a senior designer, and was mostly responsible for the AK-47. The most fascinating chapters in Kalashnikov’s story are about the nightmare of life in Stalin’s Soviet Union, in which any achievement, commercial or intellectual, earned envy that in turn might translate into accusations of being a counter-revolutionary, would-be elite, often with deadly repercussions.

As Chivers and Kahaner point out, and as is discernible in Kalashnikov’s memoir, his relationship with his own deadly invention over the last two-thirds of a century has proved erratic. Kalashnikov is proud of his promotion to the rank of lieutenant general in the Armed Forces of the Russian Federation, and under Communist rule he was twice honored as a Hero of Socialist Labor. Yet even as Kalashnikov details the horrors of Stalinist Russia that resulted in his own family’s brutal exile, he concludes, “I consider Stalin as one of the great national leaders of the twentieth century, and as a great army leader.”

Kalashnikov takes great trouble to note that the AK-47 grew out of an effort to protect his homeland from a repeat of the sort of barbaric invasion that Hitler unleashed, adding that he did not profit, at least in Western style, from the sales of some 100 million weapons that bear his name (including variants on the AK-47). And yet Kalashnikov seems almost longingly to note the millions of dollars in profits that came to Eugene Stoner from his M16, even as he ostensibly prefers the public acclaim in Russia that was never accorded to Stoner in the United States. That same paradox characterizes Kalashnikov’s occasional regret that his invention became the signature weapon among terrorists and bandits — many of them now deadly enemies of Russia itself — juxtaposed with his pride in the astounding success of a supposedly defensive AK-47. Speaking at a ceremony honoring the sixtieth anniversary of the weapon, he claimed, “I sleep well. It’s the politicians who are to blame for failing to come to an agreement and resorting to violence.”

So what in the end are we to make of the AK-47, given that people ultimately kill one another and design weapons that do it so effectively? A perfect storm of events explains the gun’s lethal role in eroding civilization over the last six decades. The impoverished post-colonial world was eager for the sort of advanced weapons that had characterized a near-century of endemic warfare in the more advanced West, and the Soviet Union was eager to fan liberationist movements against the West. It took the postwar glamour of international communism, the industrial muscle of the Soviet Union, and a Russian genius with no higher education but great practical savvy to at last provide millions with such parity, meeting the requirements of a new arms lethality at very little cost. The result was the tragedy of a global assault rifle that has been crucial to self-described liberationists in furthering so often the cause of tyranny.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/YdsnGrdML-A/story01.htm Tyler Durden

It is perhaps ironic that the creator of the AK-47 assault rifle, also known as the Kalashnikov named for its creator Mikhail Kalashnikov, and of which there are between 70 and 100 million in circulation making it the world’s most popular weapon, has just passed away from what is essentially old age, at 94. “It is difficult and sad to realize that Mikhail Kalashnikov is no longer with us. We have lost one of the most talented, memorable and committed patriots of Russia, who served his country throughout his life,” said the statement from the press secretary of the Udmurtia administration Viktor Chulkov.

RT reports that Kalashnikov, who had been suffering from heart-related problems in recent years, had been in intensive care in Izhevsk – where the plant that produces the eponymous rifles is located – since November 17. The official cause of death will be revealed following a mandatory autopsy.

More on Kalashnikov’s passing from RT:

A public funeral will be organized by the regional administration, in consultation with surviving relatives, though no date has been named so far.

 

For most of his life, Kalashnikov was feted as a straightforward hero.

 

The self-taught peasant turned tank mechanic who never finished high school, but achieved a remarkable and lasting feat of engineering while still in his twenties.

 

But as the rifles, inextricably linked forever to their creator by name, were more and more commonly seen in the hands of terrorists, radicals and child soldiers, the inventor was often forced to defend himself to journalists.

 

He was forever asked if he regretted engineering the weapon that probably killed more than any other in the last fifty years.

 

“I invented it for the protection of the Motherland. I have no regrets and bear no responsibility for how politicians have used it,” he told them.

 

On a few occasions, when in a more reflective mood, the usually forceful Kalashnikov wondered what might have been.

 

“I’m proud of my invention, but I’m sad that it is used by terrorists,” he said once.

 

“I would prefer to have invented a machine that people could use and that would help farmers with their work – for example a lawnmower.”

 

Indeed, at his museum in Izhevsk, where he spent most of his life working at the factory that was eventually named after him, there is an ingenious mechanical lawnmower Kalashnikov invented to more easily take care of the lawn at his country house.

 

It’s not what he will be remembered for.

 

Considering his age and circumstances, it was hardly surprising that Kalashnikov felt he could best serve his country by creating weapons.

His life story, as presented in a prepared obit by the FT:

Mikhail Timofeyevich Kalashnikov was born on 10 November 1919 into humble surroundings in western Siberia. After basic secondary schooling he became a technician on the Turkestan-Siberian railway. When the second world war came he was drafted as a tank mechanic to the front near Bryansk in the west of Russia. Within months he was injured and it was in hospital that he became obsessed by his dream.

 

“I decided to build a gun of my own which could stand up to the Germans. It was a bit of a crazy escapade, I suppose. I didn’t have any specialist education and I couldn’t even draw,” he said. His first designs attracted little attention, but on release from hospital he went back to his engine workshop in Siberia to try to make a prototype.

 

It was not long before he was on his way to Alma-Ata, the capital of Kazakhstan, with his first model in his hand. On arrival in the town, he was arrested for carrying unauthorised firearms, but the police soon released him when he told them of his dream project.

 

Kalashnikov went straight to the Communist party for advice and was sent to several provincial institutes. After a determined battle with the bureaucrats, he finally made it to Moscow. But the diminutive sergeant was scorned by the top brass, including generals such as Vasily Degtyaryov, the Soviet Union’s most prominent weapons designer between the wars.

 

Kalashnikov was so shy that he signed his sketches “MikhTim”, the first syllables of his first names. But he persevered, and by 1949 had been awarded the Stalin Prize and made a Hero of Socialist Labour. The same year he was transferred to Izhevsk to supervise production. So secretive were the testings of the rifle that photographs were forbidden and cartridge cases had to be picked up after firing. By the mid-50s the AK-47 literally, the Automatic Kalashnikov made in 1947, was standard issue to the Soviet armed forces.

 

It was only in the 1960s, when he became a member of the Supreme Soviet, the then parliament in Moscow, that Kalashnikov emerged from the obscurity of Izhevsk. Even in the early 1980s, however, he was ordered not to reply to a letter from an American academic for fear of inadvertently disclosing information.

 

In May 1990, on his first visit to the old cold war enemy, he was introduced in Washington to Eugene Stoner, designer of the M-16, the closest thing to an American equivalent of the AK-47, which was first issued to US troops in 1961. Kalashnikov’s clothes were shabby. The few dollars in his pocket had been given by his factory and by the American institute sponsoring the trip. He later recalled: “Stoner has his own aircraft I can’t even afford my own plane ticket.”

 

Kalashnikov’s personal life was fraught with tragedy. He met his wife Yekaterina at an army testing range near Moscow. She was a graphic artist and helped him put his designs on paper. They married in 1943 and had four children, although he saw little of them because of his work schedule. Yekaterina died in 1977 after a long illness, and his youngest daughter Natalia moved in to keep him company, only to die in a car crash six years later.

 

His hearing failing him, he lived alone for his final 10 years, although Yelena, another of his daughters, would visit him on Sundays to do the cleaning. His only perks were a driver and a country dacha by the lake. On his trips abroad, usually as part of a Russian delegation to an arms fair, he would always be accompanied by Yelena, who smoothed the path with her passable English.

 

Kalashnikov retained the title of chief designer at the Izhevsk factory that produced the AK-47 and related models, and in his later years would go to work on designs for new hunting rifles. He was an avid shooter, and with his son Viktor and a close-knit group of friends would go hunting for elk in the snow. Relaxing after a hunt in the factory’s dacha three hours outside the town, he often took to musing about his life.

 

His reflections were tinged with sadness that his rifle had become the tool of terrorist groups from the former Soviet republics, to Africa to Northern Ireland. “I wanted my invention to serve peace,” he once said. “I didn’t want it to make war easier. Constructors have never been given their just deserts in this country. If the politicians had worked as hard as we did, the guns would never have got into the wrong hands.”

Some visual info on the legendary gun:

 

Finally, a summary on the legacy of the world’s most popular gun from Weapons and Warfare:

 

The Long Road to the AK-47

No firearm in history has enjoyed the fame or popularity of the assault rifle known as the AK-47, or Kalashnikov. Created by a Soviet weapons designer at the dawn of the Cold War, it was mass-produced and distributed worldwide in the millions, leading to its canonization in the revolutionary Third World of the 1950s and 1960s. Indeed, far beyond its utility, the AK-47 became a Cold War icon, appearing on revolutionary flags, in songs and poems, and in televised insurgencies as proof of communist fervor and supposed martial superiority. And it continues to play a major role in warfare today, most visibly in guerrilla conflicts in Africa and the Middle East.

The AK-47 has succeeded so wildly because it is almost an ideal realization of the personal firearm: where most weapons have had to contend with tradeoffs between accuracy, lethality, speed of fire, reliability, cost of production, and ease of carrying and use, the AK-47 managed to find a sweet spot maximizing these traits. In fact, the weapon is so reliable, effective, and easy to use by untrained operators that its advent made it widely possible for just about any group, even with little money, modern technology, or formal military training, to mount significant, deadly assaults against a much larger and more advanced force — a fact that has transformed the face of warfare and created a revolutionary romance that still surrounds the weapon.

Since gunpowder is not static in power in the way that human muscle is, once fiery arms were invented in the fourteenth century, they would in theory constantly improve in a way that bows, slings, and swords could not. But in reality, centuries of technological stagnation followed the invention of the first gun: for example, the eighteenth- and nineteenth-century “Brown Bess” flintlock musket remained almost unchanged during its use by the British Empire over the course of more than a century. Early muskets and their predecessors had slow rates of fire and poor accuracy and reliability, and thus did not always ensure battlefield superiority over arrows, edged weapons, and hand-launched missiles. Benjamin Franklin famously advocated the use of bows by the cash-strapped Continental Army, arguing that they were cheaper, easier to use, and could send more arrows per minute than the musket could fire balls.

The problem was that the various qualities of a good handheld weapon were often mutually exclusive. Increased lethality, for instance, was usually attained by increasing the weight of the firearm and bullets, which often reduced reliability and mobility, and made weapons too expensive to outfit an entire army. So the development of personal firearms was often haphazard, especially during periods of general peace. Black-powder, muzzle-loading, smoothbore (unrifled) firearms were the norm for centuries. Only in the mid-nineteenth century did sophisticated metallurgy and techniques of mass production at last begin to usher in rear-loading models, cartridge ammunition, more powerful and smokeless gunpowder, rifled barrels, and interchangeable, machined parts. The result was a giant leap in the ability of soldiers to kill one another on a mass scale, as the ancient science of effective body armor was unable to keep pace. By the nineteenth century, the personal arms race was on.

The watershed years were those of the American Civil War, which created a race for more rapidly firing and lethal arms. The war that began with the use of muskets and Minié balls ended with the Henry repeating rifle, which allowed a skilled single shooter to load and fire up to twenty-eight times per minute. The war also saw the development of the Gatling machine gun, and, somewhat later, the Maxim, the first fully automatic weapon. The more advanced models of these machines could in theory spit out six hundred rounds per minute, allowing two-man teams to lay down a volume of fire greater than what was possible from a whole company of riflemen. The new machine guns proved revolutionary, especially in the colonial wars in Africa, Asia, and Latin America, in which small numbers of Westerners could trump numerically superior foes, sending a chilling message of technological superiority. The venerable traditions of the mounted lancer, the cavalryman, and the skilled swordsman slipped into decline with the advent of the machine gun.

But the early machine guns, though rapid-fire and quite lethal, were heavy and they often jammed, leaving their operators defenseless. And they were costly and difficult to move and maneuver. Nevertheless, during World War I, improved mobile Maxim, Vickers, and Colt-Browning machine guns reigned supreme across the trenches, overpowering the firing rates of bolt-action, clip-fed rifles. In response to the machine gun’s lethal tyranny on the battlefield, early twentieth-century tacticians began dreaming of an everyman’s mini-machine gun that would diffuse such killing power into the hands of millions of combatants.

The result was the generation of the so-called submachine gun, most prominently the German MP-18, the Italian Villar Perosa and Beretta Model 1918, and the American Thompson (or Tommy Gun). These weapons fired pistol cartridges, allowing for the employment of existing stocks; they were relatively light at around ten pounds; and they could in theory be shot at astounding rates of fire of well over 400 rounds per minute. Whereas World War I was defined by heavy machine guns battling each other in antipodal fashion across clearly defined fields of fire, battles of World War II were frequently fought in jungles, forests, and urban streets, in which the enemy was typically near and highly mobile. Submachine guns proved popular during this war — and spawned a number of cheaper imitations — thanks to their adaptability to a situation in which constant streams of bullets were directed at soldiers from every direction by constantly moving enemies, and enemies were more likely to be stopped by sudden, rapid fire than by precisely aimed shots from small, longer-barrel weapons.

Yet, for a variety of reasons, the new submachine guns could still not entirely replace clip-fed repeating rifles. While they delivered far more bullets per minute, their short barrels allowed only for poor accuracy and limited range. The less powerful pistol cartridges and greater recoil from near-continuous fire also meant that few submachine guns were deadly beyond two hundred yards — a potentially fatal limitation at the times when rifle sharpshooters had clear fields of fire at over a thousand yards. The constant rapid firing, together with the grime, heat, and filthy conditions of battle, made the submachine guns jam far too frequently. And another problem developed during the war that transcended the weapons’ advantage of rapid firing: heavily-laden soldiers simply could not carry enough additional bullets — often larger-caliber .30 and .45 ammunition — to take advantage of their guns’ voracious appetites.

On the other hand, repeating rifles, even when semi-automatic and equipped with enlarged clips and improved barrel and stock designs that allowed a good chance of hits at great distances, did not allow enough shots per minute for the increasingly close-order combat in which enemy soldiers might appear suddenly en masse, and in all conceivable landscapes. Their longer barrels and clumsy shoulder stocks certainly proved a hindrance during close-in fighting. Other tradeoffs arose as millions of combatants joined the Allies or Axis powers in a global war, allowing little time to ensure traditional marksmanship training for men from such widely disparate backgrounds. The advantages that could be gained from employing a more accurate, slower-firing, traditional semi-automatic rifle were often lost by the inexperience of the users. There had been design attempts during World War I to bridge these differences, the most successful of which was the American Browning Automatic Rifle. It was almost as accurate as a rifle, but with a weight of over fifteen pounds and a small magazine of just twenty rounds, riflemen often had to shoot from a prone position, with a barrel tripod and plenty of available magazines nearby.

But in the post-World War II era, a true breakthrough addressed the apparently irreconcilable advantages of submachine guns and repeating, clip-fed rifles. The brilliant compromise became known as the “assault rifle,” the most prominent of which was the Russian Mikhail Kalashnikov’s AK-47 (for automatic Kalashnikov, model 1947), which came into wide use in the early 1950s. Kalashnikov, who benefited from the designs of earlier German and Russian prototypes, seemingly at last solved the six-hundred-year-long dilemma of providing an accurate rifle that was not only capable of firing hundreds of rounds per minute, but was still deadly at ranges of 300-400 yards and beyond. And at under ten pounds, the AK-47 was easy to carry, simple to operate, and highly dependable. Moreover, by using a medium-sized bullet (the 7.62x39mm cartridge, equivalent to about .31 caliber) rather than larger .40 caliber rounds, the AK-47 achieved a deadly muzzle velocity of over 2,300 feet per second. In short, Kalashnikov seemed to have squared the circle by creating a light, cheap, rapid-firing, accurate, reliable, and lethal weapon that was neither rifle nor submachine gun. The gun proved perfect for revolutionaries in Third World countries, and the Kremlin would gleefully reward its new friends with mass deliveries of their wondrous weapon.

The sudden ubiquity of the AK-47 stunned the United States and Europe, and seemed to turn the so-called First World’s advantages in marksmanship and weapon craftsmanship on their heads. Illiterate insurgents, amply equipped with cheap AK-47s — now produced even more inexpensively by an array of Soviet satellite countries — suddenly had at their disposal more firepower than American soldiers. And what did it matter if Western riflemen were in theory better trained or shot a better calibrated and more accurate weapon, when mere teenagers in the tens of thousands could pepper Western troops with bullets?

The widespread export of the AK-47 marked yet another Sputnik-like moment in which state communism seemed to outpace Western entrepreneurialism. And just as the Soviets’ Sputnik success would set off the space race, and as there were other rivalries between the Soviet T-34 tank and its American counterparts, and between MiG-15 and F-86 jet fighters in the skies of Korea, so too was there a competition in assault rifle technology. Not until the early 1960s did the Americans accept that their old reliable M1 and its replacement M14 were woefully wrong for the new non-traditional theaters of the Cold War.

If a new American assault weapon were to follow in the Kalashnikov model, it would have to trump its Russian competitor with greater accuracy and lethality. This goal was seemingly accomplished with the M16 rifle, invented in the 1950s by the legendary arms designer Eugene Stoner. The sleek black assault rifle employed plastic and aluminum alloys to reduce the weight to two pounds less than the rival AK-47. And it used even smaller ammunition — the 5.56x45mm high-velocity bullet that was to become the standard NATO round.

The result was that, by all accounts, the M16 proved to be an exceptionally reliable and accurate assault rifle. Its smaller-caliber bullet was in some ways as lethal as the AK-47’s larger ammunition, as it had a muzzle velocity of over 3,000 feet per second, and the bullet tended to break up after penetrating flesh. The M16 also proved somewhat easier to handle and had less recoil than the AK-47. And soldiers could carry far more of the lighter-weight ammunition. The ensuing shoot-off between the two weapons in the Vietnam War was supposed to make clear the American gun’s advantages in rates of fire, accuracy, and lethality.

But just the opposite proved to be true — at least in the first four years of the M16’s wide use. Jamming was chronic, apparently due to initial design flaws in the gun, manufacturing problems with the gunpowder, and soldiers’ frequent failure to clean the weapon regularly amid the humidity and dirt of the jungle. In contrast, the AK-47 seemed nearly indestructible, in part due to its simpler construction and greater tolerances. In Vietnam, at least, the verdict favored the notion of an uncomplicated assault rifle that compensated for lost accuracy by achieving greater reliability, simplicity of use, and a larger bullet.

The AK-47 further exasperated Westerners by its cheap fabrication from stamped metals and its brilliant operation with just a few working parts. By the late 1960s, soldiers were taking apart, cleaning, and reassembling the weapon in about half the time required for the M16. Something that felt and looked so “cheap,” and that was produced by the Communist Bloc notorious for its shoddily manufactured products, surely, it seemed, could not be comparable to a rifle designed by the Americans, the British, or the Germans, with their far more distinguished firearms pedigree.

Yet the Communist Bloc continued to meet world demand with millions of AK-47s. And when the Soviet Union collapsed, its former republics and clients often sought to unload their stockpiles at discounted prices. Ironically, the United States eventually became the largest purchaser of the AK-47 in its efforts to supply poorer allies — such as some areas of the former-Yugoslavia, post-Saddam Iraq, and Afghanistan — with cheap, reliable assault rifles without its own large fingerprints on the arm sales. The result today is that some 75 million AK-47s have been produced, with most still in circulation, making it the most ubiquitous weapon in the history of firearms — dwarfing the M16’s eight million.

The debate between exponents of the AK-47 and the M16 has never been resolved, in part because both guns continued to evolve with subsequent improved models and have now both been superseded by more recent designs; in part because ideology and national chauvinism were inseparable from dispassionate analysis; and in part because the relative value of accuracy versus reliability is so subjective. In any case, NATO troops in general felt that their improved models of M16s by the 1980s had proved superior, even as some of the old problems of jamming and insufficient stopping power sometimes reappeared during the harsh conditions of sand and heat during the most recent Iraq War.

The story of the AK-47, amid the ongoing saga of rifle evolution, has in recent years spawned a number of popular books. The best is C. J. Chivers’s scholarly The Gun. Chivers takes a properly skeptical view of many of the claims by Mikhail Kalashnikov surrounding the birth of AK-47, and offers a sober and fair account of the acrimonious rivalry between the M16 and AK-47. In dispassionate fashion, Chivers concludes that few inventions of the twentieth century have done so much to kill so many through “war, terror, atrocity, and crime.” But after such a clear-headed analysis of the AK-47, he surprisingly offers the emotional hope that eventually the seasons, aging, and wear and tear will finally rid the world of this nearly indestructible menace — and with it the bestowing into the hands of untrained near-children the world over the power to kill indiscriminately and en masse. To this hope, one might rejoin that the fault is not in our stars, but in our selves.

Larry Kahaner’s book AK-47: The Weapon that Changed the Face of War is a lighter but nevertheless engaging story of the contemporary AK-47 as a cultural phenomenon. He too reminds us that many of the terrorist movements and insurgencies in Asia, Latin America, and especially Africa would have been impossible without the widespread dispersion of the AK-47, the ideal weapon for impoverished, poorly trained mercenaries. He points out that the acrimonious controversy between the AK-47 and the M16 resurfaced again forty years after Vietnam during the post-Saddam Hussein insurgency, when improved versions of both assault rifles collided in the streets of urban Iraq. And the verdict was again ambiguous, as U.S. troops still largely preferred their own weapons but developed a grudging respect for the insurgents’ “bullet hoses,” which shot streams of deadly large-caliber bullets at close ranges and seemed impervious to the sand and heat of the Iraqi landscape.

Then there is the book by Mikhail Kalashnikov himself. Now a nonagenarian, Kalashnikov was presented in 2009 with the title Hero of the Russian Federation, the country’s highest honor. With the help of his daughter Elena Joly, Kalashnikov wrote an autobiography, first published in French in 2003 and available in a 2006 English translation. Kalashnikov fought during the worst months of the German invasion of Russia; in 1941, in a failed counter-offensive, he was almost killed when his Red Army tank regiment was cut off and overwhelmed.

During a long subsequent illness and recovery, Kalashnikov’s innate gun-making talents were noticed. And so, despite his lack of formal design training, he was soon promoted to work with a team of Soviet engineers, quickly emerged as a senior designer, and was mostly responsible for the AK-47. The most fascinating chapters in Kalashnikov’s story are about the nightmare of life in Stalin’s Soviet Union, in which any achievement, commercial or intellectual, earned envy that in turn might translate into accusations of being a counter-revolutionary, would-be elite, often with deadly repercussions.

As Chivers and Kahaner point out, and as is discernible in Kalashnikov’s memoir, his relationship with his own deadly invention over the last two-thirds of a century has proved erratic. Kalashnikov is proud of his promotion to the rank of lieutenant general in the Armed Forces of the Russian Federation, and under Communist rule he was twice honored as a Hero of Socialist Labor. Yet even as Kalashnikov details the horrors of Stalinist Russia that resulted in his own family’s brutal exile, he concludes, “I consider Stalin as one of the great national leaders of the twentieth century, and as a great army leader.”

Kalashnikov takes great trouble to note that the AK-47 grew out of an effort to protect his homeland from a repeat of the sort of barbaric invasion that Hitler unleashed, adding that he did not profit, at least in Western style, from the sales of some 100 million weapons that bear his name (including variants on the AK-47). And yet Kalashnikov seems almost longingly to note the millions of dollars in profits that came to Eugene Stoner from his M16, even as he ostensibly prefers the public acclaim in Russia that was never accorded to Stoner in the United States. That same paradox characterizes Kalashnikov’s occasional regret that his invention became the signature weapon among terrorists and bandits — many of them now deadly enemies of Russia itself — juxtaposed with his pride in the astounding success of a supposedly defensive AK-47. Speaking at a ceremony honoring the sixtieth anniversary of the weapon, he claimed, “I sleep well. It’s the politicians who are to blame for failing to come to an agreement and resorting to violence.”

So what in the end are we to make of the AK-47, given that people ultimately kill one another and design weapons that do it so effectively? A perfect storm of events explains the gun’s lethal role in eroding civilization over the last six decades. The impoverished post-colonial world was eager for the sort of advanced weapons that had characterized a near-century of endemic warfare in the more advanced West, and the Soviet Union was eager to fan liberationist movements against the West. It took the postwar glamour of international communism, the industrial muscle of the Soviet Union, and a Russian genius with no higher education but great practical savvy to at last provide millions with such parity, meeting the requirements of a new arms lethality at very little cost. The result was the tragedy of a global assault rifle that has been crucial to self-described liberationists in furthering so often the cause of tyranny.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/YdsnGrdML-A/story01.htm Tyler Durden

What would we do without Zero Hedge?  Does anyone else notice the rapid deterioration of financial news media, especially in the US?  OK, we are not naive, there are biases in the media, traders from big ibanks talking up their positions, and trading is all about information arbitrage.  But financial news used to be really serious.  Traders could turn on a TV to see what the markets were doing.  Bloomberg being the last financial channel broadcast on TV to avoid the “CNBC Phenomenon” or more specifically the “Cramer Phenomenon.”  But now, even Bloomberg TV has become a financial version of The View, with the occasional serious guest, and the occasional well researched article.

This is not meant to be a praise-all for ZH, but seriously, what other site has a continual flow of objective analysis, and breaking news that’s not visible elsewhere on the net?  Ok, traders don’t really need news they just need data, so in today’s electronic market financial journalism may be less valuable for traders.  But that doesn’t mean the quality of financial journalism should be allowed to deteriorate to an entertainment level.  Trading is often compared to gambling, Wall St. being the ‘big casino’ – but most involved take it very seriously, and the markets can make or break families, companies, and countries.  In most Vegas casinos, you will find all sorts of cheap tricks to overwhelm your visual cortex such as scantily clad ladies, loud bells and whistles, lots of flashing lights, free drinks and food spiked with salt and sugar, and well dressed managers waiting to be so polite and charming should they see you drop a load.  See any similarities?  

There is another interesting parallel with ZH, it was founded in 2009, before Wikileaks became popular, and before the NSA scandal.  Starting with Wikileaks exposing Swiss banking activities, and other significant financial infos, traders and investors have started changing the way they obtain and process information on the internets.  This was more solidified with the NSA scandal, although much infos released by Snowden are not of a financial nature.  Many of the policies now being implemented by a global community of concerned internet users were running on ZH before all of this happened.  Again, not an all-praise for ZH, but what value do many mainstream financial networks have, with all their biases, agreements with partners, and guests from large houses talking up their positions.  It was a shocking for many to learn that all it takes to get on CNBC is $2,500 (probably policy changed now, but it used to be like this).  Stock traders from the late 90’s remember the ‘Power Lunch Bump’ where it was almost guaranteed that the guest, whoever he was or whatever he said, was good for at least a few points of their stock to jump while talking.  A new group of retail traders flush with cash from the 90’s boom were anxious to get in on the action but didn’t know anything other than to turn on the TV and watch CNBC.  Professional traders took it with a grain of salt, but it sure was a great way to pay for lunch.  What a different world we live in.

So what’s the new financial media all about?  It’s outlined well in the ZH Manifesto:

our mission:

• to widen the scope of financial, economic and political information available to the professional investing public.
• to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become.
• to liberate oppressed knowledge.
• to provide analysis uninhibited by political constraint.
• to facilitate information’s unending quest for freedom.

our method: pseudonymous speech…

anonymity is a shield from the tyranny of the majority. it thus exemplifies the purpose behind the bill of rights, and of the first amendment in particular: to protect unpopular individuals from retaliation– and their ideas from suppression– at the hand of an intolerant society.

   …responsibly used.

the right to remain anonymous may be abused when it shields fraudulent conduct. but political speech by its nature will sometimes have unpalatable consequences, and, in general, our society accords greater weight to the value of free speech than to the dangers of its misuse.

 

– mcintyre v. ohio elections commission 514 u.s. 334 (1995) justice stevens writing for the majority

What ZH represents most importantly, an anonymous network of financial professionals which is extremely diverse, some are from the mainstream, some from the fringes.  It’s a bastion of internet freedom, representing free speech as it was intended.  Of course that’s just the platform, it doesn’t guarantee high quality of information, but somehow, it is the only source where information is almost all quality.  

Aside from retail investors, what’s to keep traditional financial media alive at all?  In the case of something like Bloomberg, their public media is almost irrelevant.  The BB team is supporting their clients for the terminal, and so having their own network of analysts, journalists, and other types of agents makes sense to support data provided through the terminal.  But what about others?

There are other exceptions such as Reuters, not a unique financial media, but they are backed by the trading element of their business.  But unless you are a customer of Reuters, such as the new product giving their clients a nanosecond edge “Ultra Low Latency Data” their reporting on general news and especially financial events is suspect.  

Or maybe, the only thing keeping such mainstream institutions alive, are a secret group of corporate clients, that can use such outlets for their own information campaign purposes.  In any event, as the markets evolve, and the internet evolves, the new paradigm in financial media is the “Bitcoin” model, not the USD model:

“The advantage for Chinese users to use Bitcoin is freedom, people can do something without any official authority,” said Patrick Lin, system administrator of Erights.net and owner of about 1,500 Bitcoins. Lin said he’s sticking to the currency itself, rather than IPOs, in part because of weak regulation. “The Bitcoin world is just like the Wild West — no law, but opportunity and risk,” he said.

ZH is a public site, but represents the gateway into the ‘dark’ internet, at least as it’s concerning financial media.  Of course, there wasn’t technology 50 years ago to support such a network, so it was easy for certain powerful media companies to dominate the sphere.  Now, anyone with a computer and internet access, can learn as much about the markets as you can at Wharton (if they learn anything there is questionable).  With that knowledge, that person can open a blog, and become their own independent financial media agent.  The standing argument that bloggers are unprofessional because they don’t have journalistic credentials, has been disproved in the last years, since it was sites like ZH that broke the flash trading scandal, and Wikileaks, that broke the story about Julius Baer.   

The new paradigm of financial media is a decentralized, global network of well informed uber-agents, who proliferate their information privately through their own information portals, and through public networks, such as Zero Hedge (currently, ZH the only one).

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/fGIAVJu35ME/story01.htm globalintelhub

Investors from multi-billion dollar hedge funds to individuals buying as few as 10 properties have acquired more than 1 million homes across the U.S. in the past three years, transforming a mom-and-pop business into one of Wall Street’s hottest investments. As we noted here, Blackstone Group LP alone has acquired more than 40,000 properties in 14 cities to become the largest single-family landlord in the country. As Bloomberg notes, the new landlords are transforming the way Americans live and accumulate wealth. But while Wall Street is becoming America’s largest residential landlord, it appears China wants to get paid for commercial properties… and Detroit.

Via Reuters,

Chinese investors, the second-biggest overseas buyers of U.S. residential real estate, are building up portfolios of U.S. commercial property as they look for new avenues of diversification.

 

Chinese entities announced more than $5.89 billion in projects in January-October, nearly six times the $996 million for all of 2011 and 2012 combined, showed data from New York-based consultancy Rhodium Group.

 

“There is a lot of upside,” said Thilo Hanemann, Rhodium’s research director. “We are at the beginning of a structural increase of Chinese investment in U.S. commercial real estate.”

 

…

 

China’s push into U.S. property is underpinned by declining investment returns at home, a growing desire by wealthy individuals and developers to diversify their holdings overseas, and property companies looking to capitalize on offshore migration.

 

…

 

Chinese nationals bought more than $8.1 billion worth of real estate in the year ended March 31, representing 12 percent of the estimated $68.2 billion of domestic property purchased by overseas nationals

 

…

 

Not everyone is convinced that Chinese investment in the U.S. property market will continue uninterrupted. Other options for expansion include Europe, Australia and Singapore, which account for about two-thirds of offshore Chinese real estate investment, according to Jones Lang Lasalle.

 

Zhang Xin, the chief executive of SOHO China Ltd, who paid $700 million through her family trust to buy a stake in the General Motors Building in Manhattan, said that while the U.S. regulatory and legal environment remained attractive, valuations were getting expensive.

 

“I would not feel as comfortable today putting in money as I did a few years ago,” Zhang said.

So reform and liberalization in China sees hot money flowing not just into Bitcoin but now commercial property in America.

While Wall Street becoming America’s largest residential landlord, it appears China wants to get paid for commercial properties… and Detroit.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/MNYznApI-_Y/story01.htm Tyler Durden

While Citi’s earnings-yield gap model indicates stocks are over-valued currently, their proprietary panic/euphoria model has now been in “euphoria” mode for six straight weeks. Having risen further into extremes, Tobias Levkovich notes that readings at this level indicate the market may retreat with an 83% historical probability of losses in the next 12 months.

 

The Earnings-yield gap sees stocks modestly over-valued…

 

But investors are “euphoric” – will its be 1987 and 2008’s collapse or 1999’s meltup before collapse?

 

Charts: Citi

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Pf1OT129EBM/story01.htm Tyler Durden

While Citi’s earnings-yield gap model indicates stocks are over-valued currently, their proprietary panic/euphoria model has now been in “euphoria” mode for six straight weeks. Having risen further into extremes, Tobias Levkovich notes that readings at this level indicate the market may retreat with an 83% historical probability of losses in the next 12 months.

 

The Earnings-yield gap sees stocks modestly over-valued…

 

But investors are “euphoric” – will its be 1987 and 2008’s collapse or 1999’s meltup before collapse?

 

Charts: Citi

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Pf1OT129EBM/story01.htm Tyler Durden

While the US is debating which set of Al Qaeda “rebels” in Syria is the best local partner for the State Department to provide military support to, once Qatar’s demands for a trans-Syria pipeline return some time in 2014, Vladimir Putin – fresh from his diplomatic oup in the Ukraine – is reinforcing his other major victory in 2013: the preservation of the Assad state, this time however with more than words. As Reuters reports, Russia has sent 25 armored trucks and 50 other vehicles to Syria to help transport toxins that are to be destroyed under an international agreement to rid the nation of its chemical arsenal, Defense Minister Sergei Shoigu said on Monday. Or in other words, Russia just sent Syria more than 75 military vehicles.

From Reuters:

In a report to President Vladimir Putin, Shoigu said Russian aircraft delivered 50 Kamaz trucks and 25 Ural armored trucks to the Syrian port city of Latakia on December 18-20 along with other equipment, state-run news agency RIA reported.

 

“The Defence Ministry has very swiftly implemented actions to deliver to Syria equipment and materiel to provide for the removal of Syrian chemical weapons and their destruction,” Shoigu was quoted as saying.

Unlike Obamacare’s scheduling issues, Syria is expected to honor its commitment to transfer its chemcial weapons to external control by the deadline.

Damascus agreed to transport the “most critical” chemicals, including around 20 tons of mustard nerve agent, out of the northern port of Latakia by December 31 to be safely destroyed abroad away from the war zone.

 

“The Defence Ministry has very swiftly implemented actions to deliver to Syria equipment and materiel to provide for the removal of Syrian chemical weapons and their destruction,” Shoigu was quoted as saying.

And while the west may have bungled both the Syrian escalation and the more recent return of the Ukraine to the Russian sphere of influence, they were at least smart enough to realize that Russia adding more weapons in Syria will hardly allow the EU to benefit from Qatari gas in the near future.

Western powers has baulked at Syria’s request for military transport equipment to transport chemical weapons material to Latakia because of concerns it could be used to fight Assad’s opponents in the conflict or kill civilians.

 

Russia has been a major seller of conventional weapons to Syria and has given Assad crucial support during the conflict, blocking attempts to punish with sanctions and saying his exit must not be a precondition for a peace process.

 

Syrian government forces took control of a key highway connecting Damascus to the coast earlier this month, but the Organisation for the Prohibition of Chemical Weapons has voiced concern the deadline could be missed.

But for all intents and purposes, Syria and the Middle East may be yesterday’s news. The one “asset” that Putin is certainly focued on next, as is China, as is the US, is Africa: it is here that the geopolitical hotspots of 2014 are far more likely to generate significant headaches for the superpowers (unless of course Israel decides it needs the GDP boost and launches the Iranian attack on its own).

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/jNoRreDHPXc/story01.htm Tyler Durden

Submitted by Howard Kunstler of Kunstler.com,

And so in his valedictory, Federal Reserve chief Ben Bernanke pulls one last dead rabbit out of his hat — it suffocated while the head-fake taper percolated in Ben’s brain lo these many months of jive talkin’. As the year turns, the central bank will supposedly monetize $10 billion less debt per month — $75 billion down from $85 billion — with $5 billion each deducted from the US Treasury stream and the rotten mortgage barrel. Was there a catch?

You could say that. For instance, what to make of the curious report out of the American Enterprise Institute by John H. Makin saying that the Fed’s actual purchase of debt paper amounted to an average $94 billion a month through the year 2013, not $85 billion? I have averred often in this space to the Fed’s ability to conduct back-door buying operations of all kinds of janky financial crapola — and in a world where claims on promises to pay hugely exceed anyone’s ability to pay or re-pay, there’s as much of it out there as there are plastic grocery bags floating in the horse latitudes of the Pacific Ocean. The Fed can hose up bad paper all the live-long day and apparently get away with mis-reporting what it is doing, and is the country any the worse for it?

At the end of that live-long day the American people are left in a matrix of lies so thick and sticky that all the de-greasing agents supposedly vested in freedom of the press will not avail to liberate them, and they are suspended like little morsels of winged prey to be sucked dry by the descending spiders of crony capital.

Bottom line: the taper so far is just  $1 billion shy of being completely fake (so far as anyone knows), a magician’s mis-direction from the real action of the gag, which was removing the previous “threshold” of a 6.5 percent unemployment figure for raising interest rates — in other words, promising ZIRP (zero interest rate policy) forever! That would green light a never-ending continued carry trade (i.e. looting operation) of Too-Big-To-Fail-or-Jail primary dealer banks extracting “free” money from the Fed window for conversion, abracadabra, into, say, student loans at 5 percent, guaranteed to enslave the generation now coming into adult flower. (The catch there being that they might flower into revolutionaries eager to string up such bankers from every lamp post in the Hamptons.)

I know there is a lot of confusion “out there” about what constitutes inflation — is it a so-called “monetary phenomenon” or just shit costing more? — but that’s probably too fine a distinction for “folks” (to use the president’s favorite term) who can’t pay five bucks for a jar of peanut butter. The price of everything except the yellow junk called gold, seems to be shooting up. Pretty soon, they’ll be using that worthless gold to solder the drain pipes on bathroom fixtures out where the housing starts roam.

Which brings us to the interesting question: exactly what mysterious entities have been systematically pounding the price of the yellow stuff down in the PM markets like Tony Soprano’s crew “tuning up” some pathetic vic with thirty-inch lengths of re-bar and a fungo bat? And, per corollary, who are the anonymous agents yanking the equity indexes such as we saw on Wednesday, December 18, when a holy host of stock shorts was magically deployed in anticipation of Ben Bernanke’s taper announcement so as to inspire a short-covering mega-rally when he opened the hole in his beard? What I wonder: if we have so much fabulous surveillance technology, why doesn’t some enterprising nerd team find out who’s behind all these pushing-pullings, yanking-and-crankings? Where is the Snowden of the financial markets who will unmask these actors?

Let’s cut to the chase. You heard it here: not only will the Fed eventually (i.e. soon) fail to taper in any meaningful sense; before this is over they will ramp up the purchases of worthless securities beyond $100 billion a month through every back door and trap door in the infamous Eccles Building, including perhaps Janet Yellen’s dainty fundament. The inflation — whatever that is — is sitting out there waiting behind the Hoover Dam of the Fed’s balance sheet. I wouldn’t want to be in Las Vegas when the first cracks appear on it. Merry Christmas everyone.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/joCmUfNpDjE/story01.htm Tyler Durden

Submitted by Howard Kunstler of Kunstler.com,

And so in his valedictory, Federal Reserve chief Ben Bernanke pulls one last dead rabbit out of his hat — it suffocated while the head-fake taper percolated in Ben’s brain lo these many months of jive talkin’. As the year turns, the central bank will supposedly monetize $10 billion less debt per month — $75 billion down from $85 billion — with $5 billion each deducted from the US Treasury stream and the rotten mortgage barrel. Was there a catch?

You could say that. For instance, what to make of the curious report out of the American Enterprise Institute by John H. Makin saying that the Fed’s actual purchase of debt paper amounted to an average $94 billion a month through the year 2013, not $85 billion? I have averred often in this space to the Fed’s ability to conduct back-door buying operations of all kinds of janky financial crapola — and in a world where claims on promises to pay hugely exceed anyone’s ability to pay or re-pay, there’s as much of it out there as there are plastic grocery bags floating in the horse latitudes of the Pacific Ocean. The Fed can hose up bad paper all the live-long day and apparently get away with mis-reporting what it is doing, and is the country any the worse for it?

At the end of that live-long day the American people are left in a matrix of lies so thick and sticky that all the de-greasing agents supposedly vested in freedom of the press will not avail to liberate them, and they are suspended like little morsels of winged prey to be sucked dry by the descending spiders of crony capital.

Bottom line: the taper so far is just  $1 billion shy of being completely fake (so far as anyone knows), a magician’s mis-direction from the real action of the gag, which was removing the previous “threshold” of a 6.5 percent unemployment figure for raising interest rates — in other words, promising ZIRP (zero interest rate policy) forever! That would green light a never-ending continued carry trade (i.e. looting operation) of Too-Big-To-Fail-or-Jail primary dealer banks extracting “free” money from the Fed window for conversion, abracadabra, into, say, student loans at 5 percent, guaranteed to enslave the generation now coming into adult flower. (The catch there being that they might flower into revolutionaries eager to string up such bankers from every lamp post in the Hamptons.)

I know there is a lot of confusion “out there” about what constitutes inflation — is it a so-called “monetary phenomenon” or just shit costing more? — but that’s probably too fine a distinction for “folks” (to use the president’s favorite term) who can’t pay five bucks for a jar of peanut butter. The price of everything except the yellow junk called gold, seems to be shooting up. Pretty soon, they’ll be using that worthless gold to solder the drain pipes on bathroom fixtures out where the housing starts roam.

Which brings us to the interesting question: exactly what mysterious entities have been systematically pounding the price of the yellow stuff down in the PM markets like Tony Soprano’s crew “tuning up” some pathetic vic with thirty-inch lengths of re-bar and a fungo bat? And, per corollary, who are the anonymous agents yanking the equity indexes such as we saw on Wednesday, December 18, when a holy host of stock shorts was magically deployed in anticipation of Ben Bernanke’s taper announcement so as to inspire a short-covering mega-rally when he opened the hole in his beard? What I wonder: if we have so much fabulous surveillance technology, why doesn’t some enterprising nerd team find out who’s behind all these pushing-pullings, yanking-and-crankings? Where is the Snowden of the financial markets who will unmask these actors?

Let’s cut to the chase. You heard it here: not only will the Fed eventually (i.e. soon) fail to taper in any meaningful sense; before this is over they will ramp up the purchases of worthless securities beyond $100 billion a month through every back door and trap door in the infamous Eccles Building, including perhaps Janet Yellen’s dainty fundament. The inflation — whatever that is — is sitting out there waiting behind the Hoover Dam of the Fed’s balance sheet. I wouldn’t want to be in Las Vegas when the first cracks appear on it. Merry Christmas everyone.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/joCmUfNpDjE/story01.htm Tyler Durden