Negotiating With Rebellious Rogues - Part 2

A continuation from, http://dtbnguyen.blogspot.com/2013/04/negotiating-with-rebellious-rogues.html

Has been interesting watching some of the messages being sent out and the way they've been interpreted.

Key problems/issues:
- is it that Kim Jong Un doesn't know how to ratchet down (Offer them a set of choices? Make signal too indirect and they may not understand it? Too direct and they may just ratchet it up again.)? or is he being influenced not to go down? Based on what I've read about him this doesn't seem like his 'natural personality' or his wording/phrasing (if feels like they've learnt from or were taught by the Iranians). Need further information though. Likely need a combination of greater background work by intelligence analysts (keep in mind the notion of 'projection' when doing analysis) and analysis by defectors.
http://thecable.foreignpolicy.com/posts/2013/04/09/exclusive_us_and_north_korea_held_secret_meeting_in_march
- this is as much about us as about them. For a long while now, North Korea has used provocations and other techniques as a means of gaining concessions. They've been pushing back members of the international community and we've been responding to threats. Shutting down all communications is simply another means of controlling the situation from there side. Become proactive whether it has to do with offers of peace, aid, war, etc...
http://www.reuters.com/article/2013/04/10/us-korea-north-bank-idUSBRE93900L20130410
http://www.abc.net.au/radionational/programs/latenightlive/north-korea-and-sanctions/4616300
Basically, engage rather than respond to them. We need to break the cycle provocations/response at some point. Possibly link a stop of threats to a growth in aid over time? a reduction of sanctions? Then link any increase in provocations to the opposite as well?
- present all a wide range of options at next meeting. Figure out whether they are just looking for attention/aid? whether they simply aren't going to except anything? and are simply going to be a nuisance for a short while... if it is the latter would be looking carefully elsewhere.
- if it is the case that we aren't really dealing purely with Kim Jong Un then we should be thinking about those people are all 'pulling the strings'? if my reading of the background of some of the people who may be 'pulling the strings' is correct then we may need to factor in other issues as well. Personal experience indicates that that people who have been under intense stress, wars, famine, etc... often have an extremely tarnished view of the world. Factor this in as well...
- are they ratcheting things up because they are trying to solidify or is this going to be the tone of things to be come? support a possible uprising? chances of success (note difference between Mail and Iraq/Syria. Support was clear in Mali and we intervened early. Highly unlikely this is going to be a 'clean operation')?
http://www.abc.net.au/news/2013-04-10/my-life-as-a-north-korean-super-spy3a-exclusive/4621358
http://www.abc.net.au/news/2013-04-10/spy-says-threats-are-to-prop-up-new-president/4621842
http://www.smh.com.au/world/kim-jongun-struggling-former-north-korean-spy-20130410-2hlwx.html?google_editors_picks=true
http://www.businessinsider.com/north-koreas-army-erupted-in-deadly-clashes-before-kim-jong-un-took-command-2013-4?IR=T
- if the regime is at breaking point? does he simply need a way out of this for himself and other members of the regime?
- if Iran/North Korea are co-operating/distracting international community efforts for arms control then it's likely that messages are going to be 'massaged' as well. Factor this in. Use what we have learnt in past confrontations. Don't just give up, poke, prod, learn, feel...
- if you honestly believe that he is going trying to solidify things (with a chance of piece down the line) suggest you make the offer big and credible but not enough to make us look 'weak'. That will only encourage further provocations.
- look at trying to increase the size of the buffer zone if at all possible. That way we can reduce the chances of misunderstandings/accidents in future. You can't shoot/provoke someone if they aren't within range.
- if you want to ratchet it down, consider ratcheting down a lot... A simple re-schedule is unlikely to be enough. Something that can be seen to be a genuine concession. If they are to de-nuclearize the concessions are probably going to be high/almost unpalatable. This is more than just a regional problem. China, Japan, South Korea, United States, and other neighbours are all vital to the world's interests from both political, military, economic, and other interests. Hope that the if peace can be negotiated the burden of re-building North Korea is going to shared by all.
- reading further and clear that re-unification is unlikely going to be smooth/easy and if it is going to happen it's going to be in the distant future. It will take time. Don't try to do too much at once but don't give up an short/medium term stability. Many barriers are going to have to be broken down. Consider 'PSYOPS' type operations. Broadcast international media into North Korea, drop leaflets, etc... Try to ensure that it's not just propoganda. Try to make sure that there is no threat of invasion unless provoked. If we are to give aid make sure that it's the type of aid which can not be re-used for dual purposes. Make sure that it is the type of aid that can only be used to help the citizens of North Korea and ensure that they know where exactly it's coming from. Be more aware of the implcations of some of sanctions that have been imposed. Try to make it targeted towards the regime rather than the people. Done incorrectly it will just harden their resolve and case against us. Be aware that like Iran they have 'hardened' their economy against sanctions and it's likely that anytime you do ratchet it up their likely to simply take it away from the people. Keep in mind that the UN and international laws have not caught up or are applicable to our circumstances. In this case, we have to consider alternative options...
http://www.guardian.co.uk/world/2013/apr/08/north-korean-soldiers-joint-drills?cmp=wp-plugin
http://www.news.com.au/world-news/north-korea-propoganda-sees-population-in-a-permanent-war/story-fndir2ev-1226618447623
- if there is an issue of pride/face at stake consider sending aid via China. History seems to play a more important role in Asia then in some of the cultures that I have most often been exposed to.
http://rendezvous.blogs.nytimes.com/2013/04/10/missiles-marathons-memorial-stones-figuring-out-north-korea-and-china/
http://www.independent.ie/incoming/china-and-russia-urge-north-korea-to-step-back-from-missile-launch-29187829.html
http://www.guardian.co.uk/commentisfree/2013/apr/10/korea-focus-china-versus-japan-oil
- believe that more work needs to be done into exactly why Kim Jong Un was chosen to be North Korea's new leader. Don't think that this is as simple as it first appears.
http://en.wikipedia.org/wiki/North_Korea
- history indicates that no countries that possess nuclear weapons have been invaded. Need to see how they view the rest of the world. Work back from there...
http://www.globalresearch.ca/does-north-korea-need-nuclear-weapons/5323227
http://www.washingtonsblog.com/2012/10/the-real-reason-america-used-nuclear-weapons-against-japan-to-contain-russian-ambitions.html
- delivery of message is poor in some cases. If someone like me is analysing your responses it can be guaranteed that there will be an army of staff on their side analysing the way you deliver your messages. Nuance/inflections points are important in guaging the mood of someone and their conviction behind the message being conveyed.
http://www.thestar.com/opinion/commentary/2013/04/10/china_losing_patience_with_north_korean_antics.html
- if considering change of regime think about Libya/Syria. Not going to be smooth. Believe that the following quotes are relevant, "it was once said of Prussia that it wasn't a country that had an army, but an army that had a country. And North Korea is a garrison state, a society organized for war", and "the conventional army loses if it does not win. The guerrilla wins if he does not lose."
http://www.vanityfair.com/politics/features/2001/01/hitchens-200101
http://www.nytimes.com/2013/01/31/opinion/global/will-syria-bleed-hezbollah-dry.html
- China and other countries need to understand that while territory does play an important role in defense it is pointless unless you have some relative control over it. It is in China's best interests that they bring North Korea under control during peacetime than during war. Moreover, with some of the weapons in circulation and under development now, North Korea could be (depends on the level of risk you're willing to take) rendered fairly useless in the early part of any campaign. The strength, survival, growth, and stability of North Korea is important for both itself as well as that of it's neighbours so don't look at this whole situation like it's not your problem. Allies (or even 'attack dogs') who can not be brought to heal are just as dangerous for their owners as well as strangers/enemies. Moreover, while China plays an important cog in the world economy they should realise that they aren't indispensable. Others can and are likely willing to take their place. Continued military provocations can only serve to hinder relations and future trade between them and the rest of the world. Peace is in everyones best interests.
http://www.bbc.co.uk/news/world-asia-china-22104024
http://zeenews.india.com/news/world/german-foreign-minister-warns-north-korea-playing-with-fire_841155.html
http://www.news.com.au/world-news/united-states-and-south-korean-armed-forces-placed-at-vital-alert-watchcon-2/story-fndir2ev-1226617936354
http://www.afr.com/p/world/us_will_target_north_korea_missile_ZVV7wlJX9YD1SdpTv3ZqUN
http://abcnews.go.com/Politics/wireStory/admiral-north-korea-direct-threat-us-18913130
http://www.reuters.com/article/2013/04/10/us-korea-usa-china-idUSBRE93903U20130410
http://edition.cnn.com/2013/04/09/world/north-korea-us-intel/?hpt=hp_t2
http://www.informationweek.com/security/attacks/north-korea-behind-bank-malware-south-ko/240152644
http://www.theage.com.au/comment/north-korean-nuke-test-may-keep-lid-on-crisis-20130410-2hlmg.html
http://www.nytimes.com/2013/04/12/world/asia/north-korea-tensions.html?_r=0
http://thecable.foreignpolicy.com/posts/2013/04/02/nobody_home_at_the_state_department
http://www.foreignpolicy.com/articles/2013/04/09/how_to_detect_a_nuclear_test_on_your_iphone
http://world.time.com/2013/04/09/chinas-long-fruitless-history-of-irritation-with-north-korea/
http://www.usnews.com/opinion/blogs/world-report/2013/04/09/making-sense-of-north-koreas-peculiar-madness
http://e-ring.foreignpolicy.com/posts/2013/04/09/why_doesn_t_seoul_have_iron_dome
http://www.csmonitor.com/USA/Military/2013/0409/Top-admiral-worries-North-Korea-crisis-could-escalate-pretty-quickly
http://www.latimes.com/news/nationworld/world/la-fg-norkor-missile-20130410,0,1321213.story
http://www.theaustralian.com.au/news/world/north-korea-shifts-missiles-in-attempt-to-outwit-intelligence/story-e6frg6so-1226618332121

- as usual thanks to all of the individuals and groups who purchase and use my goods and services
http://sites.google.com/site/dtbnguyen/
http://dtbnguyen.blogspot.com.au/

Anti-Weapons Technology

Have obviously been looking at the Korean and other hotspot situations around the globe of late. When negotiations have broken down in the past other ways that have been tried include:

- sanctions/export controls

- pre-emptive strikes (risk of 'dimplomatic incident')

- sabotage of infrastructure experimental/testing sites (various methods but security is often incredibly high now. Sites often have isolated power/environmental system. Key scientists are are placed sometimes placed under permanent guard now depending on environment)

- covert operations (not as simple as it sounds depending on the environment)

- and so on...

On and off for a while now, I've been thinking of something different. It's roughly based on concepts from various different fields such as:

- missle defense

- crumple zones

- force fields

but essentially offers a diferent option for defense.

Modern weapons (there is work on chemical, directed energy, microwave, laser and other weapons but details of these programs are mostly classified) mostly work on the premise of a 'controlled explosion' in the context of direction, range, and magnitude of the subsequent impact.

If we look at current missile defense technology (Typically they work with with a combination of other systems comprised of tracking, interception, and control. Needless to say, they aren't cheap, require extensive training/skill to setup/operate, and with the exception of a few systems aren't all that efficient for the purpose for which they developed.) they basically work by activating missle warheads which are most likely triggered through one or several of the following means:

- Contact

- Proximity

- Remote

- Timed

- Altitude

- Combined

http://en.wikipedia.org/wiki/Warhead

Obviously, success has been limited particularly with longer range projectile interception (high speed, range, multiple warheads, decoys, and so on...). The biggest problem has basically been associated with the so called 'bullet-on-bullet' problem. Namely, trying to hit a projectiles moving at extreme speed with another projectile that are both relatively small.

Previously, I thought about this problem in my 'Convergence' report. Basically a 'colloidal' like solution (can be gas, liquid, or solid)(conceptually it would be similar in principle to using using 'shrapel' or multiple interceptors in the fashion that the Israeli have done in the Tamir interceptor using in the Iron Dome system)  that can/will work based on physical, chemical, or other principles... but let's think about this further. Without range/accuracy/controlled explosions weapons are pointless.

http://en.wikipedia.org/wiki/Colloid

http://en.wikipedia.org/wiki/Iron_Dome

https://csis.org/blog/iron-dome-watershed-missile-defense

If you flood a known area with highly volatile substances you basically have the same effect as missile interception. Namely, energy dispersal at an area that does not harm valuable targets or people.

http://en.wikipedia.org/wiki/Flammable_liquid

http://www.ccohs.ca/oshanswers/chemicals/flammable/flam.html

http://www.tkolb.net/tra_sch/Flammable/index.html

http://en.wikipedia.org/wiki/Gas_explosion

http://en.wikipedia.org/wiki/Flammability_limit

http://www.engineeringtoolbox.com/explosive-concentration-limits-d_423.html

http://www.haaretz.com/news/diplomacy-defense/the-porous-shield-of-israel-s-iron-dome.premium-1.479064

http://www.nytimes.com/2013/03/21/world/middleeast/israels-iron-dome-system-is-at-center-of-debate.html?pagewanted=all&_r=0

http://www.thenation.com/blog/173497/united-states-china-compete-russias-favor

http://www.defence.pk/forums/military-forum/128753-top-10-future-weapons-israel.html
http://www.haaretz.com/news/diplomacy-defense/the-porous-shield-of-israel-s-iron-dome.premium-1.479064
http://theatheistconservative.com/tag/the-tamir-interceptor-missile/

The added bonus is that it forms the basis for 'deterrence' without the madness associated with, 'Mutually Assurred Destruction'. Obvious problem is dispersal and control of it particularly in the case of secure installations/bunkers:

- gaseus solution and you run of the risk of having it basically go anywhere especially in the context of outdoor environments (though mid-flight missile defense is significantly easier if there is a cloud of gas which disables incoming weapons than having to deal with 'bullet-on-bullet' type missle defense)

- liquid based and you have the same problem unless there are natural canals/tunnels that you can use

- solid and you have to deal with the problem of camouflage and existing security staff picking it up easily

http://en.wikipedia.org/wiki/Cloud_seeding

http://en.wikipedia.org/wiki/Parachute_mine

http://en.wikipedia.org/wiki/Whipple_shield

http://www.smh.com.au/technology/sci-tech/i-spy-with-my-little-fly--animal-cruelty-20130330-2h02s.html

http://www.brisbanetimes.com.au/technology/sci-tech/swarm-of-robots-that-could-be-a-lifesaver-20130330-2h04o.html

http://www.itwire.com/science-news/biology/59253-robot-swarms-unlocking-the-hive-mind

Other obvious problems include:

- safety in research, development and deployment of such defensive systems as well

- if not deployed correctly is that you run the risk of making the explosion even bigger than it would have been had just the original weapon being deployed (particularly worrying if you have a localised 'shield'). More research required...

- the other problem with this technology is whether or not to disclose your use/development of it (battle between intelligence/defense)?

In the context of control of WMD think about it in the following fashion. If we can find substances that we can secrete into areas that will react with WMD to either render them inert or cause them to explode in an uncontrolled fashion then we finally have the basis for true arms control without the needs for 'inspections'. Not easy though...

At this point we digress to 'force field' technology (not as outlandish as you may think. The British military have been done some succcessful testing of similar concepts to protect some of their vehicles.). Typically they work at the point (or close to) of impact but in principle to what was outlined in the previous section. The more energy is dispersed away (think about 'crumple zones' in cars) and distant from the target the less target will be directed against the original target.

http://en.wikipedia.org/wiki/Force_shield

http://www.telegraph.co.uk/technology/news/7487740/Star-Trek-style-force-field-armour-being-developed-by-military-scientists.html

http://www.foreignpolicy.com/articles/2013/03/04/the_pentagon

http://www.fas.org/irp/program/collect/uas_2009.pdf

http://www.nytimes.com/2013/03/30/opinion/global/the-u-s-missile-defense-plan-in-europe.html?_r=0

The key problem has always been how to control the shape of 'shields' though. Electromagnetic based/wireless waves are used basically everywhere now. As a child I remember learning about the shape of magnetic fields by playing around with magnetics and ferro-magnetic/iron particles. Take these concepts further. If the field is strong enough we can begin playing around with synthetic/semi-synthetic substances (hopefully small/light enough to 'float' along with/in the field) which can:

- cause the propulsion system (almost always chemically based nowadays though that is beginning to change) of incoming projectices to shut down

- cause an explosion out/away from the target

- otherwise render incoming projectiles inert

Clear problems that we face:

- how much power is required to deploy such a system? Is this level of power realistic or do we need to find/develop more efficient means of energy development? If others aware of possession of such technology do we require increased surveillance or less?

- are there any available substances that fit our parameters?

- if successful we face a 'class break' problem. We might have to completely change our all of our own weapons/propulsion systemns to continue to remain capable of offensive operations. Alternatively, 'tuning' of the technology would have to be required to allow for a 'one way' shield (allows outward but not inwards)...

- if countries are able to find a way of making AWT style technologies 'one way' then others suffer a significant disadvantage and would basically be unable to defend themselves in times of conflict

http://en.wikipedia.org/wiki/Plasma_%28physics%29

http://en.wikipedia.org/wiki/Earth's_magnetic_field

http://en.wikipedia.org/wiki/Fuel_cell

Clearly, developing AWT is easier said then done. Moreover (like conventional weapons), AWT style technologies have to be deployed/demonstrated to work in the field a number of times for it to have any longer term impact. Conceptually similar to booby trapped ammunition except the impact is far more significant. We basically use the strength of their own weapons/explosives/aggression against the agressor. The other thing that needs to be kept in mind is that the concept of pre-emption and deterrance only works with people of sane mind.

http://www.wired.com/politics/security/magazine/17-10/mf_deadhand?currentPage=all

http://english.pravda.ru/world/americas/27-04-2010/113190-doomsday_weapon-0/

http://www.independent.ie/world-news/europe/its-a-conspiracy-says-cyberattack-accused-29162189.html

http://skeptoid.com/episodes/4121

/mf_deadhand?currentPage=all

http://en.wikipedia.org/wiki/Doomsday_device

Such AWT style technologies obviously have significant applications:

- especially in the context of conflicts that where the results of intervention are neither guaranteed or the results of intervention are unlikely to be predictable

- conflicts where both a political solution is desired but cessation of fighting can not be guaranteed

- useful for nations that want a defense/deterrent but don't want to pursue WMD style weapons technology

- could form the basis for shields that could be used for yourself, your personal belongings, or even inter-stellar/gallactic travel vehicles

- may be possible to create shields at regional levels or potentially globally to defend against 'rogue states'

http://www.smh.com.au/world/north-korea-preparing-new-nuclear-test-20130408-2hghw.html

http://www.latimes.com/news/world/worldnow/la-fg-wn-china-north-korea--20130407,0,1255574.story

http://www.smh.com.au/world/north-korea-preparing-new-nuclear-test-20130408-2hghw.html

Like I said, I'm not going to pretend that any of this is going to be simple. Nonetheless, we seem to have the components there to make this work... Moreover, I believe that while Nuclear and other Weapons of Mass Destruction were a necessity during certain periods of human history they clearly represent an indictment upon us. It would be nice to finally have a means of defending ourselves against them.

- as usual thanks to all of the individuals and groups who purchase and use my goods and services
http://sites.google.com/site/dtbnguyen/
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Negotiating With Rebellious Rogues

I don't think that anyone would disagree that the situation between North Korea and it's neighbours is undesireable. It's been decades and it seems as though little if no progress has been made towards a genuine, long lasting peace. Recent events indicate that things may have changed for the worse though...

Part of the problem is that even in recent past history indicates several so called 'rogue states' (including North Korea) have:
- shared information, research, and (they've even flown scientists around the world to participate in joint research) expertise regarding weapons (WMD in particular) technology with one another
http://rt.com/op-edge/north-korea-us-danger-279/

http://online.wsj.com/article/SB10001424127887323419104578378434011235810.html
- probably not recognised the difference between standing up for their interests and crossing the line into belligerance (cultural differences do not help)
- have often ignored communications with other states (particular with respect with nuclear dis-armament)

- possibly co-operated with regards to timing in during senstive times to possible  distract others from other 'illicit activity'

- have agreed to measures towards nuclear disarmament and increasing stability only to go back on their promises. Do some basic research/background and you'll see that the line between criminal and state activity sometimes blurs to become indistinguishable
- not (perhaps they have?) recognised have sent all sorts of strange and sometimes conflicting signals

http://www.heraldsun.com.au/news/dennis-rodman-worms-his-way-into-north-korean-leader-kim-jong-uns-affections/story-e6frf7jo-1226612820351

http://www.csmonitor.com/USA/DC-Decoder/2013/0404/Why-North-Korea-s-US-attack-plans-are-nutty

http://blogs.telegraph.co.uk/news/davidblair/100210753/what-does-north-korea-hope-to-gain-from-all-this-tub-thumping-belligerence/
http://www.smh.com.au/digital-life/digital-life-news/north-koreans-send-photoshop-army-into-battle-20130328-2gvmp.html

http://www.washingtonpost.com/blogs/worldviews/wp/2013/04/04/map-this-is-how-far-those-north-korean-missiles-can-actually-reach/

So what are the options?
- wait, watch, and see. Basically, what has been done so far. Be aware of the situation, increase surveillance, do drills, take measures to guard yourselves against any possible manouvres. Problem is you're always reacting to what they do

http://news.sky.com/story/1074718/north-korea-us-deploys-spy-plane-to-japan

http://killerapps.foreignpolicy.com/posts/2013/04/05/retro_friday_forget_thaad_check_out_this_1945_article_on_missile_defense
- be proactive. Tighten restrictions/sanctions/aid even further. Shutdown EVERYTHING (including co-operation at Kaesong). Do not rule out pre-emptive attacks/covert action especially if there are imminent signs of a launch/attack
http://www.nytimes.com/2013/04/06/world/asia/us-sees-china-as-lever-to-press-north-korea.html?pagewanted=all&_r=0

- ignore. Not a good option particularly in light of past 'incidents'
- he may simply be trying to tighten control/hold on power. In which case, we should just play along and hope that one day North Korea and it's neighbours can come to a peaceful arrangement. Obviously, this is a dangerous option and if we don't judge things correctly we may be worse off in future than we are currently 

http://www.smh.com.au/world/bomb-alaska-20130405-2hc7i.html?google_editors_picks=true

http://www.news.com.au/world-news/north-korean-leader-kim-jong-un-paints-a-confused-contradictory-picture-of-his-true-character/story-fndir2ev-1226613251895
- this may simply be probing/poking us to see what the response will be in case of a real conflict. Likely that responses gathered from this particular situation will be used in subsequent situations. Wide range of responses possible here... job of defense, foreigns affairs, and intelligence analysts/strategists

- if they refuse to give up nuclear weapons technology offer their neighbours nuclear and/or ofther arms (offensive as well as defensive) technology. Possibly even if it is under foreign/allied control. Make them realise that it is in neither sides interests to pursue this tack. Obvious problem is how other countries would react to such an offer and the precedent it would set worldwide. There's also the issue of operational security. In the past, Japanese rocketry research was successfully penetrated, research into American nuclear weapons was breached, and it's been clear that South Korean cyber security needs some work

http://www.aljazeera.com/indepth/opinion/2013/03/20133319531732780.html

http://www.theglobeandmail.com/news/world/north-korea-in-state-of-war-as-fresh-cyberattack-claims-emerge/article10586425/
- offer a peace agreement (are they genuinely interested in peace though?). However, make it known that if we do go down this route North Korea has to know that it's neighbours have to be able to ensure their safety as well. Concessions will likely have to be made on both North Korea's part as well as that of it's neighbours. Recommend gradual, phased standing down of military forces, expansion of buffer zone, and inspections from both sides that they are they are complying with the terms of the deal. Similar in nature to nuclear weapons inspections but these will occur primarily between neighbours. International intervention a choice if desired- go to war. Choice up/down scale between 'measured response', 'escalation', and 'all out attack'. Long range bombardment to hit all known launch sites and sites of danger. They may back down at this point or act even more irrationally (based on conventional wisdom). Obvious risk is that not all dangerous assets are hit and they have may nuclear assets still in possession. Moreover, not sure how others in the region are likely to react. China may seem them as a strategic nuisance/buffer zone (reminds me of Iranian policy with regards to Syria actually) but it's also clear that North Korea is becoming more difficult for both allies and enemies alike. Would China join in (pictures of border indicate build up of Chinese forces)? A proxy war ensues similar to Syria? Another major issue is if the regime falls who takes over (UN forces until transition takes place or would someone else?)?  How could it get worse though? Major humanitarian, economic, stability, and other problems at stake...
http://www.news.com.au/world-news/what-will-china-do-if-north-korea-strikes-against-south-korea-and-the-usa/story-fndir2ev-1226613169835

- mount a phony war? Exfiltrate regime, bomb regime headquarters/all relevant sites, and then basically start from scratch? Practicality (suspect that even basic things like secure communications would be problematic)?
http://freebeacon.com/risky-business/

- Chinese strategic concept of buffer zone needs to factor in ability to control situation though. Perhaps they need to tighten grip on North Korea? Stop thinking about North Korean regime disappearing but make the Chinese realise that they will be the ones who have to support North Korea from now on. No more international support...

- pursue nuclear research in parallel (as opposed to nuclear arms inspections) if it really is their intention to pursue nuclear power rather than nuclear weapons?

Key questions:
- perhaps the regime actually is in trouble (based on what I've seen they've always been able to manage in spite of sanctions)? Is this is just a means of solidifying power? Is this just a campaign of mis-information?

- is this just internal stuff that we're unlikely to understand unless we are North Korean? Defectors to help interpret some of these messages? I remember reading reports/accounts from defectors in the past and a lot of what they said just seemed bizarre when viewed from a Western perspective (as an aside, I once remember taking a personality test of how I perceive myself and how I thought others perceived me. Not only were they unusual but there was somewhat of a disconnect between what I thought and what others thought as well. Suspect this may be happening (limited impact though) here)
http://en.wikipedia.org/wiki/Shin_Dong-hyuk_%28human_rights_activist%29
http://en.wikipedia.org/wiki/North_Korean_defectors 

- obvious question but one that should be asked. Are they reacting to us or are we reacting to them? If we do 'play along' do we keep our message muted or go out of our way to praise their state?

http://www.csmonitor.com/World/Latest-News-Wires/2013/0406/North-Korea-Fidel-Castro-warns-Kim-Jong-un-against-war
http://edition.cnn.com/2013/04/04/politics/koreas-u-s-/index.html
- should we negotiate with the knowledge that they will almost definitely go back on their word?
- would temporarily stopping excercises/scaling back help?

Either way, I believe that we need to be more clear/firm in our communications. Clear that there is some room for interpretation at the moment. Many people can talk but there must only be one or a limited number of responses and it must be firm with no room for mis-interpretation.

Keep in mind standard tenets of nuclear warfare/strategy. Richard A. Clarke's Cyber War is slight alarmist but actually does  a good job of outlining some of the strategies that have been used to avoid nuclear catastrophe in the past.

http://www.washingtonpost.com/blogs/worldviews/wp/2013/04/01/is-north-korea-being-more-restrained-than-we-think/
http://edition.cnn.com/2013/03/16/world/asia/north-korea-us-nuclear/?hpt=hp_t3
http://www.smh.com.au/comment/north-korea-is-a-joke-thats-why-its-so-dangerous-20130401-2h2ih.html
http://www.telegraph.co.uk/news/worldnews/asia/northkorea/9963902/North-Korea-sharpens-nuclear-threat.html
http://www.washingtonpost.com/world/asia_pacific/north-koreas-kim-orders-rockets-on-standby-after-us-sends-b-2s-to-skorea-for-military-drills/2013/03/28/c99254b0-9804-11e2-b5b4-b63027b499de_story.html
http://www.latimes.com/news/world/worldnow/la-fg-wn-south-korea-threats-north-20130404,0,7030734.story
http://au.news.yahoo.com/world/a/-/world/16568134/north-korea-lacks-means-for-nuclear-strike-on-u-s-experts/
http://www.news.com.au/world-news/intercepted-north-korean-military-communications-reveal-plan-to-launch-missile/story-fndir2ev-1226612936097 

http://www.heraldsun.com.au/news/world/north-korea-gives-final-approval-for-nuclear-attack-on-united-states/story-fnd134gw-1226612136732
http://www.businessweek.com/articles/2013-04-03/north-korean-nukes-how-worried-should-we-be-and-what-is-kim-jong-un-thinking#r=shared
http://www.rawstory.com/rs/2013/04/04/u-s-official-we-are-not-on-the-brink-of-war-with-north-korea/
http://www.telegraph.co.uk/news/worldnews/asia/northkorea/9973577/North-Korea-missile-threat-latest-live.html
http://www.usatoday.com/story/news/nation/2013/04/05/koreans-in-us-concerned-about-norths-threats/2058291/
http://management.fortune.cnn.com/2013/03/28/china-russia-us-frenemies/

- as usual thanks to all of the individuals and groups who purchase and use my goods and services
http://sites.google.com/site/dtbnguyen/
http://dtbnguyen.blogspot.com.au/

Random Thoughts and Bugs

Perhaps you've heard of developer Bob's mis-adventures? A fun re-interpretation...
http://www.telegraph.co.uk/news/worldnews/asia/china/9811275/You-never-catch-me-outsource-work-to-China.html

The things spies will do...
http://www.telegraph.co.uk/news/worldnews/europe/russia/9022827/Russian-spy-rock-was-genuine-former-chief-of-staff-admits.html
http://www.haaretz.com/news/diplomacy-defense/report-israel-s-syria-spy-cameras-tracked-russian-navy-1.512798
http://io9.com/the-cias-secret-experiments-to-turn-cats-into-spies-453478752

In spite of the trouble he created you have to admire his sense of humour, creativity, zeal, and skill.
http://www.wired.co.uk/news/archive/2013-02/12/japanese-cat-hacker-caught
http://www.theregister.co.uk/2013/02/11/japan_online_threat_arrest/
http://www.wired.co.uk/news/archive/2013-01/07/japan-cat-collar-hacker-clue
http://www.news.com.au/technology/clue-found-on-cat-collar-in-unsolved-japanese-hacking-case/story-e6frfro0-1226549207641

Warned about this previously in the context of intelligence/law enforcement systems previously on this blog. Interesting to see how much information can be 'extracted' (both explicity and implicitly) just by using social media platforms.
http://www.itwire.com/your-it-news/home-it/59021-facebook-likes-can-profile-your-personality

Covered this in 'Convergence' report. Basically, new/popular platforms are most likely to be targeted and easiest to find bugs in.
http://www.informationweek.com/mobility/security/malware-writers-prefer-android/240150256

Have to admire his tenacity...
http://www.smh.com.au/world/not-worth-it--russian-oil-pipeline-thief-20130328-2gvi2.html

Even dictatorships need hard cash! Opening a chain of restaurants is something I'd never thought they'd do though.
http://thediplomat.com/2010/09/06/kim-jong-il%E2%80%99s-slush-fund-woe/
http://freekorea.us/category/sanctions/money-laundering/
http://www.foreignpolicy.com/articles/2013/01/09/dont_engage_kim_jong_un_bankrupt_him

Thought about this in 'Convergence' report. Can have notion of 'Super-Portals' but must be customisable. Suspect that it will be based client side if it does actually work.
http://www.itwire.com/your-it-news/mobility/59023-android-is-so-in-in-asia

If you like your Easter eggs 'hot' here's an early Christmas present.
http://www.bbc.co.uk/news/uk-england-surrey-21981063

The HP Mini 210 is nice looking machine but it isn't without it's problems. Overheating seems to be one of them. Not playing games seems to be a suggestion for avoiding it?
http://supportforhp.iyogi.com/mini-210/overheating-2.html
Pity it seems to still have the keyboard/trackpad bug that I found out about on the DM1 though.
http://www.ifixit.com/Wiki/HP_Mini_210-2070NR_Troubleshooting
Like the DM1 great/neat internal setup and easy access though.
http://www.pcworld.idg.com.au/review/back_to_school/hp/mini_210_nb-210-1017tu_01/338723
Hilarious system specific bug...
http://h20000.www2.hp.com/bizsupport/TechSupport/Document.jsp?objectID=c02784074&jumpid=em_alerts_us-us_Apr11_xbu_all_all_1221350_78559_laptops/tablets/netbooks_critical_006_0http://www.laptopmag.com/review/laptop/hp-mini-210.aspx

Repairing laptop cords.
http://www.fonerbooks.com/laptop_7.htm
Solder heatshrink looks very interesting if you've ever had to repair any wiring before.
http://www.calcentron.com/Pages/fusion_solder_heat_shrink/fusion_solder_heat_shrink.html

Some interesting gun control and NRA background articles
http://www.salon.com/2013/01/14/the_nra_once_supported_gun_control/
http://www.businessweek.com/articles/2013-03-14/why-gun-makers-fear-the-nra#r=rss
http://www.nytimes.com/2013/01/17/us/politics/obama-to-ask-congress-to-toughen-gun-laws.html
http://www.forbes.com/sites/abrambrown/2013/01/16/what-obamas-gun-control-laws-mean-for-32b-firearm-industry/
http://takingnote.blogs.nytimes.com/2013/01/16/a-right-of-insurrection/
http://online.wsj.com/article/SB10001424127887323968304578245720749827656.html
http://www.washingtonpost.com/world/europe/in-aftermath-of-swiss-shooting-echoes-of-us-gun-control-debate/2013/02/07/38457624-6e1d-11e2-ac36-3d8d9dcaa2e2_story.html
http://www.foreignpolicy.com/articles/2013/01/16/does_the_nra_want_to_turn_america_into_afghanistan
http://theweek.com/bullpen/column/238719/washingtons-gun-debate-whats-next
http://www.guardian.co.uk/commentisfree/2013/jan/17/obama-gun-control-miss-target
http://www.theglobeandmail.com/news/world/biden-takes-gun-control-message-to-nra-country/article7887824/
http://www.theaustralian.com.au/business/wall-street-journal/barack-obamas-rocky-path-on-gun-control-starts-with-his-own-politicians/story-fnay3ubk-1226556149128
http://www.philly.com/philly/news/politics/20130117_Local_pro-_and_anti-_gun_control_advocates_echo_the_national_debate.html

In case I/you need to reset a USB port every once in a while.
http://askubuntu.com/questions/645/how-do-you-reset-a-usb-device-from-the-command-line

Bugs of the Week

Un-named Technology Retailer Website (company/more details undisclosed for reasons of reputation and security)

Recently a local technology retailer had a competition. Basically, they would have pictures of iTunes vouchers randomly distributed throughout their website. This sounds likes a neat way of gaining extra marketing. Pity they allowed for directory listing through various image directories though. Combine this with a download manager which can download the contents of entire directories without user intervention and thumbnail previews (image filenames were helpful as well!) in many file managers now and you basically have enough iTunes credit to last a while.

- as usual thanks to all of the individuals and groups who purchase and use my goods and services
http://sites.google.com/site/dtbnguyen/
http://dtbnguyen.blogspot.com.au/

Bailing-In European Style - Part 2

A deal with Cyprus was obviously concluded. However, some comments were made which were probably unwise or ill-timed (or weren't depending on your perspective).
http://www.680news.com/2013/03/25/eurogroups-dijsselbloem-forcing-losses-on-bank-owners-large-depositors-new-rescue-template/
http://www.reuters.com/article/2013/03/25/eurozone-cyprus-speaker-idUSL5N0CG13N20130325
http://www.reuters.com/article/2013/03/25/us-markets-global-idUSBRE88901C20130325
http://uk.reuters.com/article/2013/03/25/uk-eurogroup-cyprus-dijsselbloem-idUKBRE92O0IL20130325
http://au.businessinsider.com/buiter-euro-recovery-starts-with-cyprus-2013-3
http://finance.ninemsn.com.au/newscolumnists/greg/8632465/the-overnight-report-cyprus-evokes-double-dutch
http://www.smh.com.au/business/cypriot-deal-no-blueprint-says-stevens-20130326-2gs92.html
http://www.bloomberg.com/news/2013-03-25/dijsselbloem-says-euro-troubled-lenders-must-fend-for-themselves.html

A number of ways we can interpreted what was said:
- he was sending out a warning to the rest of the Eurozone to reduce their risk exposure
- he was being honest and direct about future Eurozone policy
- he simply wanted to test the markets to see how they would respond
- he was slightly careless in airing his mind
Either way, it gives an important insight into what the European leaders are thinking. It also tells us that they could probably handle the public relations side a little bit better (leaking certain notes from meetings does not help either. All it does is trigger speculation... unless the point is to guage market reaction to such policies?).
http://blogs.reuters.com/felix-salmon/2013/03/25/the-dijsselbloem-principle/
http://online.wsj.com/article/SB10001424127887324789504578384500381305458.html

Like I said in my previous post, I believe that the public should not take on responsibility for reckless behaviour in the private sector. I'm not in the game of rewarding incompetance, hubris, or sheer foolishness and I don't think that many of the international creditors that are currently in charge of bailouts are either (I probably wouldn't have dipped into deposits though. This would has probably increased the chances of 'capital flight' (there's already an increased number of inquiries regarding movement towards safer options within the EU/Eurozone) and ironically stronger 'capital controls'. No one's saying that they can't have a flourishing financial sector. We just want a stable/healthy (even if it is a 'bloated' sector)). We can't keep on trying to fix debt with more debt if there is no growth that stems from it. Moreover, by taking public money and using it to bail out banks whose business models/practices are simply not functioning/working is not doing anybody any favours. Even if we had bailed them out and did exactly what they wanted who says we wouldn't be in the exact some situation several months down the line? The thing that I've noticed is that during times of stress/volatility people often double down and they either end up winning big or losing big. For the moment, we'll play things by the book until things stablise.
http://www.guardian.co.uk/business/2013/mar/26/cyprus-bailout-eurozone-clash-savers
http://www.reuters.com/article/2013/03/26/eurozone-cyprus-luxembourg-germany-idUSL2N0CI1FW20130326
http://en.wikipedia.org/wiki/Capital_control
http://online.wsj.com/article/SB10001424127887324373204578376502337439038.html
http://www.irishtimes.com/business/economy/europe/euro-zone-remains-stuck-in-a-horrific-mess-1.1339928
http://www.guardian.co.uk/world/2013/mar/24/cyprus-economic-model-broken-advisers
http://www.businessweek.com/news/2013-03-26/cyprus-capital-controls-first-in-eu-could-last-years

For those people who think that the deal was 'bad' for them and basically destroys their financial sector and economy (We need to think about this within context. If a retail chain, car manufacturer, or defense contractor suddenly falls apart does the government step in? Only in rare cases do they step in and even then it is only with heavy conditions imposed that they are granted government support. The same applies here.). They need to understand what exactly what was on the line. The country was basically a day (hours actually) away from 'bankruptcy'. Not only would you have lost both banks but government services, and a good proportion of other things that you take for granted as well. Moreover, my understanding is that much of the equipment that is required to create your own currency is destroyed upon entry to the Eurozone which means that a graceful exit is unlikely to be smooth nor simple. People need to understand the implications of going it alone. It's clear that the apetite is not there to test the waters and see what an exit from the Eurozone would be like. They also need to undertand that others were basically overexposing themselves to more risk than required. They should be part of the solution. You can't blame someone else for making bad decisions. If the market is there for other banks surefly they shoud consider especially in light of the light of the stress the existing bank is under?
http://au.news.yahoo.com/thewest/business/a/-/world/16443742/anxious-cypriots-blame-eu-fear-for-the-future/
http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/
http://www.guardian.co.uk/commentisfree/2013/mar/26/cyprus-europe-love-tougher-austerity
http://www.theaustralian.com.au/news/world/superhuman-bid-to-reopen-cypriot-banks/story-e6frg6so-1226607319532
http://www.theaustralian.com.au/business/wall-street-journal/cyprus-bailout-may-not-be-the-last/story-fnay3x58-1226607477703

It wasn't a question of Cyprus being forced/co-erced into anything (negotiations have been going on in the background for some while now though. Had they accepted an earlier offer things may have been a little less painful as well. Whether it was necessary or useful to target depositors with such a haircut is in question. Confidence is just as important in financial markets as are fundamentals. Would have only targeted creditors. Re-structuring can mean very many things but part of it is getting rid of toxic assets and trying to restore the health of the EU/Eurozone as quickly as possible.). The people running those banks chose to increase their risk exposure. It would be fine if they were still growing but with the EU/Eurozone being relatively unstable/seak over the last few years they took on too much than they could chew and they basically lost. While the solution that has been found may not be perfect it has staved off the uncertainty that comes part of a Eurozone exit. Something which neither European nor Cypriot leaders seem to be willing to countenance at this particular moment in time. Even in the case of Iceland/Finland while things may have recovered, things aren't exactly 'normal' now. Capital controls that were imposed long ago are still present (they have a odd way of dealing with foreign exchanges), many of their former billionaires are no longer, and a good chunk of their bloated financial sector is now gone.
http://www.bdlive.co.za/world/europe/2013/03/27/osborne-criticises-slow-eurozone-rescue
http://www.independent.ie/business/world/no-more-billionaires-as-iceland-purges-itself-of-old-values-that-brought-ruin-29144720.html
http://www.marketwatch.com/story/how-the-european-union-killed-cyprus-in-one-day-2013-03-25?link=MW_home_latest_news
http://www.marketwatch.com/story/cyprus-lenders-agree-bailout-deal-reports-2013-03-24
http://www.bloomberg.com/news/2013-03-27/cyprus-capital-controls-first-in-eu-could-last-years.html
http://www.reuters.com/article/2013/03/24/us-eurozone-finland-idUSBRE92N0BY20130324

http://yle.fi/uutiset/bank_of_finland_chief_forecasts_lengthy_recovery/6343500

http://www.kwrintl.com/library/2010/thesovereignchallenge.html
http://www.upi.com/Top_News/Analysis/Outside-View/2013/03/25/Outside-View-Cyprus-would-do-better-to-leave-the-euro/UPI-88431364216756/
http://www.businessweek.com/news/2013-03-26/german-10-year-bunds-decline-before-dutch-italian-debt-auctions

The other thing that needs to understand is that if that we go towards the bail-in model we won't be propping up unsustainable businesses models/practices any longer but actually gaining genuine, sustainable, real growth that actually helps the citizens of Europe in the long term. They may not have the ability to devalue but they do have other countries/people who have the strength and hopefully the desire to help rebuild their economy. The thing they need to know is that they aren't going to be alone as they rebuild their economy (perhaps with the right incentives and supervision another bank may be able to fill in the void?).
http://www.neurope.eu/article/taskforce-cyprus
http://www.incyprus.com.cy/en-gb/Top-Stories-News/4342/33834/eu-to-help-cyprus-rebuild-economy
Moreover, since they are such a small country:
- they are in a position to make rapid changes (regulation, taxes, investment)
- any changes that do make will have an almost immediate impact
- the results of any successful programs that the ECB implements in Cyprus can be used in aiding other Eurozone members
http://www.guardian.co.uk/business/2013/mar/24/cyprus-bailout-lehman-demise
http://www.slideshare.net/as248/the-myopia-of-hope-bob-swarup-presentation-feb-2013?goback=.gde_116172_member_219439575
The key questions are of course:
- the timing of investment (do we try to break the fall or do we let it bottom out?)?
- what form of investment (private, public, what sections of the economy?)?
- and how much investment?
There are several purposes for this investment. Among them are trying to balance the ledger (cuts Vs growth) and social/political change (if policies here are sucessful and they are able to recover rapidly, then we can extend them back upwards up the hierarchy if need be in places such as Spain, Portual, Italy, and Greece. Will also help strengthen enthusiasm/confidence for the policies that are currently being pursued.)
http://en.wikipedia.org/wiki/Cyprus
http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG

If we're going to have capital controls (even if only temporarily) the ECB, EU, and other relevant stakeholders (British actually flew in Euros to their military bases) should make provisions to deal with basic necessities/goods as well. It's another compounding problem, if people can't withdraw enough money how are they going to pay for goods and services, what reasons are their to bring money in if they can't bring it out, etc?
http://en.wikipedia.org/wiki/Capital_control

Should probably hold off on adding new members to the Eurozone for the time being unless it can be proven that it will be beneficial to both the Eurozone as well as the country in question.

Interesting that the EU/Eurozone seems to have the ability to do things quickly if/when required. Suggest they do it more often and more proactively (perhaps even get the bank supervisor going by the end of the year as opposed to mid-2014?). Helps avoid critical situations like this weekend (though obviously co-operation admittedly wasn't strong early in the piece in this case) and allows us to use the Eurozone/EU in the way in which it was originally intended, for the benefit of other states.

Market manipulation/money laundering problem not a simple problem to solve.
http://euobserver.com/magnitsky/119156
http://euobserver.com/justice/119567
http://dealbook.nytimes.com/2013/03/26/europe-expands-investigation-into-derivatives-market/

Interesting perspective of political ramifications of Cyprus situation.
http://www.dailymail.co.uk/news/article-2297258/If-Cyprus-falls-Putins-grip-West-lost-battle-new-Cold-War.html?ito=feeds-newsxml
http://www.telegraph.co.uk/culture/books/bookreviews/9287904/Deception-Spies-Lies-and-How-Russia-Dupes-the-West-by-Edward-Lucas-review.html
http://www.washingtonpost.com/blogs/worldviews/wp/2013/03/25/a-bailout-for-cyprus-a-geopolitical-failure-for-russia/

http://blogs.reuters.com/edward-hadas/2013/03/27/banker-think-in-welcome-retreat/http://www.dailyfx.com/forex/fundamental/article/weekly_spotlight/2013/03/26/What_if_Were_Wrong_About_Cyprus_and_Jorgen_Dijsselbloem_Christopher_Vecchio.html
http://www.euroweek.com/Article.aspx?ArticleID=3181653&LS=EMS807498&eventcookielogin=Login&cookielogin=1&actionname=cookielogin&eid=E017
http://au.businessinsider.com/dijsselbloem-reveals-the-euro-end-game-2013-3 
http://www.ibtimes.com/five-ways-euro-zone-has-changed-eu-imf-ecb-known-troika-financially-rescued-cyprus-1149931
http://www.smh.com.au/business/world-business/euro-rises-after-cyprus-agrees-to-deal-20130325-2gpq6.html
http://www.consilium.europa.eu//uedocs/cms_data/docs/pressdata/en/ecofin/136487.pdf
http://www.news.com.au/breaking-news/world/europe-money-crisis-leads-to-poor-health/story-e6frfkui-1226607555265
http://www.smh.com.au/world/wholesale-theft--in-the-name-of-saving-the-euro-20130326-2gr7a.html
http://www.smh.com.au/world/cypriots-fear-austeritys-big-hit-20130327-2gumm.html
http://www.smh.com.au/business/motley-fool/the-end-of-the-financial-crisis-20130326-2grlw.html
http://www.telegraph.co.uk/finance/debt-crisis-live/
http://www.theaustralian.com.au/news/world/cyprus-plays-safe-as-markets-spooked/story-e6frg6so-1226607114069
http://www.reuters.com/article/2013/03/23/us-eurozone-cyprus-precedent-idUSBRE92M09N20130323
http://www.businessinsider.com/kotok-europe-is-in-trouble-2013-3?IR=T
http://www.independent.ie/opinion/analysis/shocking-treatment-of-cyprus-has-exposed-eurozones-inherent-flaws-29150368.html
http://www.chicagotribune.com/business/sns-rt-us-eurozone-cyprus-dutch-pollbre92n091-20130324,0,3155890.story
http://www.nytimes.com/2013/03/25/business/global/25iht-dixon25.html?_r=0
http://www.reuters.com/article/2013/03/24/us-eurozone-cyprus-worldbank-idUSBRE92N09T20130324
http://www.smh.com.au/business/world-business/revamped-cyprus-deal-to-close-bank-force-losses-20130325-2gp41.html
http://www.washingtonpost.com/world/cyprus-bailout-deal-reached/2013/03/25/1e11f04a-9530-11e2-95ca-dd43e7ffee9c_story.html
http://www.smh.com.au/business/world-business/as-euro-zone-suffers-emerging-markets-thrive-20130325-2gokq.html
http://www.iol.co.za/business/business-news/emerging-states-risk-catching-cyprus-cold-1.1490930
http://www.spiegel.de/international/europe/cypriot-parliament-investigates-government-after-dubious-transactions-a-891168.html
http://www.reuters.com/article/2013/03/25/eurozone-cyprus-barnier-idUSL5N0CH24M20130325
http://uk.reuters.com/article/2013/03/21/uk-eurozone-cyprus-call-idUKBRE92K0DW20130321
http://www.chicagotribune.com/business/sns-rt-us-eurozone-cyprus-banksbre92o0r8-20130325,0,1480820.story
http://www.abc.net.au/news/2013-03-26/cyprus-banks-remain-shut-michael-pettis-offers-his/4596150?section=business
http://www.guardian.co.uk/business/2013/mar/26/eurozone-crisis-cyprus-banks
http://www.ft.com/cms/s/2/fcd3f62e-953b-11e2-a151-00144feabdc0.html
http://www.ekathimerini.com/4dcgi/_w_articles_wsite3_1_26/03/2013_489977
http://www.reuters.com/article/2013/03/26/piraeusbank-cyprus-idUSL5N0CI0D420130326
http://www.guardian.co.uk/commentisfree/2013/mar/27/cyprus-germany-cause-eurozone-crisis
http://www.guardian.co.uk/commentisfree/2013/mar/26/cyprus-bailout-eurozone
http://www.foxbusiness.com/news/2013/03/26/cyprus-rescue-marks-game-changer-for-europe-banks/
http://www.nytimes.com/2013/03/27/business/global/europe-officials-seek-to-contain-cyprus-damage.html?pagewanted=all
http://www.bloomberg.com/news/2013-03-26/canada-says-six-largest-banks-are-all-systemically-important-.html
http://www.guardian.co.uk/business/2012/nov/22/paul-tucker-splitting-banks-retail-investment
http://www.hm-treasury.gov.uk/press_46_12.htm

- as usual thanks to all of the individuals and groups who purchase and use my goods and services
http://sites.google.com/site/dtbnguyen/
http://dtbnguyen.blogspot.com.au/

Bailing-In European Style

It's clear that people are tired of watching banks and others major institutions of getting themselves into trouble only for them to be 'bailed out' using taxpayer money (often because failure may result in a catastrophic cascade/succession of other failures). This has happened most prominently in the United States of late but obviously the situation has continuously popped up over the last few years in Europe as well.

Thus far, the reasons how they have found themselves in be such circumstances have often been related to compentency, taking high levels of risk that borders on negligence and malpractice, and engaging in (and being knowingly involved in) unethical and often illegal transactions.

I think most people are in the same boat though. As far as I'm concerned the people in charge can make an unlimited amount of money if they perform. However, if they have to be bailed out they should be penalised for their indiscretions. The option to take a haircut of salaries, stock options, and so on... of any people who are directly responsible should not and can not be ruled out (ironically, there are often local laws which cover corporate governance in relation to these issues though awareness of these particular laws is sometimes sub-par and not enforced often or harshly enough)(In an ideal world such people would either resign or be let go. However, keeping them on temporarily so that they can detail just exactly where they diverged may be necessary/required.). They have to learn that if they want to play with other people's money they will be held accountable. After all, it's clear that there is a far greater propensity for risk taking, if you have no 'skin in the game'.

Moreover:
- if funds can be determined to be be used for criminal (or other abnormal) activities (if you've ever read up on/about issues related to 'export controls' especially with regards to countries that are under sanction you'll realise that tracking such activities is easier said than done. There is also the problem of just exactly how big a role criminal activity plays in modern economies. One paper I read basically insinuated that it may actually be 'holding' up a good chunk of 'normal activity'. More research needs to go into this...)
http://globalresearch.ca/articles/PET108A.html
http://www.fatf-gafi.org/pages/faq/moneylaundering/

http://www.spiegel.de/international/europe/german-spy-agency-says-cyprus-bailout-would-help-russian-oligarchs-a-865291.html
- if they have resorted to unusual regulations to artifically boost their performance in an unsustainable fashion which could lead to collapse
- or if there is any other 'abnormalities' in the system
they should be among the first to be forced to shell out some of the burden not the average citizen who hasn't done anything wrong
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/20/a-very-clear-explanation-of-why-the-euro-zone-keeps-exploding/

Obviously, there are several key problems with 'bailing in' including:
- bank/currency runs
- loss of confidence which can lead to other cascading effects
- legal/jurisdictional issues
- political issues (though history indicates that if a levy is implemented fairly and under the correct circumstances it may actually be successful)
http://carolabinder.blogspot.com.au/2013/03/cyprus-levy-historical-precedents.html
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=980223
- implementation (they recently closed banks in Cyprus as a means of stopping a bank/currency run. This is only part of the solution though. If they do go directly after proceeds from criminal activity or other people 'of wealth' they need to think about back dating laws/dealing with jurisdiction issues so that if money is shifted or broken into multiple accounts (to deal with haircuts that are based on 'tiering'). Further discussion required at an international level.)

That's why I'm proposing something slightly different. Recently, the Australian Federal government implemented something called a 'super profits' tax on the mining sector (It's implementation was only partially successful due to loopholes in the way it was legislated.) as a way of basically funding future investment if/when the mining sector does undergo something of a downturn. I propose something similar. If banks are making substantial profits (the size of this is arbitrary but if you look at profits in the financial sector they seem quite healthy at the top end despite many of the problems that we are currently facing), a chunk of their profits will to go into a pool that is then used to help stablise, neutralise, and then hopefully fix crises situations such as this. It will ultimately act as a further firewall against instability and reduce the burden upon central banks (and ultimately taxpayers) in dealing with such circumstances (Obviously, the key problem is the size of it and how to implement it without impacting upon growth upon the finance/banking sector too much. Further thought/discussion required...).
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/22/the-scary-politics-of-the-euro-zone/

Banks/opponents of this policy need to think about it in a different way. If one of their competitors collapses even though they may get a share of the clients confidence in the sector is also shaken which ultimately impacts on them as well. This is reflected in the style of assets which clients are willing to invest in and ultimately the returns that are realistically posisble. Moreover, it's clear that many banks have questionable assets on their books (everywhere not just Europe) and that removing them from their books isn't going to be an easy nor quick process. A pool of money from those who are able to provide further stability to the system is in everyone's best interest and ultimately backs up any stablity funds or any other liquidity options that are provided by the ECB.
http://www.bloomberg.com/news/2013-03-11/europe-s-accounting-rules-are-destroying-its-banks.html
http://www.banksdaily.com/topbanks/Europe/2011.html
http://www.banksdaily.com/topbanks/Europe/2012.html

Another option is to bail out/in based on citizenship (transfer all money back/responsibility back to the point of origin). At this point, we re-capitalise which reduces the burden on depositors. An option to basically reduce the size of the possible impact of a possible default, reduce the size of the finance sector in proportion in comparison to their economy while also allowing them room to breathe and basically set things right. Basically, roll up the bank or shift the responsibility back to others within the Eurozone (or elsewhere) to maintain confidence within the Eurozone whilst also allowing for the (hopefully) successful roll up of the bank in question. Clearly this is something that has been thought of (and implemented) in the past (Iceland/Greece) but it is also clear that there is some reluctance by those who basically have 'less skin to lose' than members of the Eurozone. If we do go down this path we may require more negotiations and therefore more time to have deal with the problem at large. Time that we may not have depending on those that are involved and how far they're willing to push their case forward.
http://www.reuters.com/article/2013/03/16/cyprus-bailout-greece-idUSL6N0C81SM20130316

Finally, equity in projects underway should always be considered (enough to make it worthwhile but also allows the country in question to maintain sovereignty).
http://www.bloomberg.com/news/2013-03-20/cyprus-s-four-options-to-avoid-banking-collapse.html

For me, only after all of these other options have been considered should a broad levy be considered...

Been thinking about the logistics of having a second currency. Instead of a second currency if another country were willing to share their currency (temporarily or over the long term) that may be an option with regards to an exit and would save on a lot of production/implementation issues as well? The obvious question is just exactly who would be willing to put their hand up to do this.

The obvious question that has been asked before is whether or not they (Cyprus) are that important in the overall scheme of things. As stated elsewhere, they represent only a fraction of Eurozone output and most markets seem to be brushing off these issues. People may be factoring in confidence as too vital a factor in this circumstance. The key thing is just how strongly they are linked back into the Eurozone/EU.
http://www.globalpost.com/dispatch/news/thomson-reuters/130321/spain-beats-bond-sale-target-brushes-cyprus-crisis-0
http://www.latimes.com/news/world/worldnow/la-fg-wn-cyprus-euro-crisis-20130319,0,1616609.story
From a personal perspective, I think it would be a really good test to see how the Eurozone/EU would hold up and the logistics of the process if they were to be let go.

One of the things I've found interesting throughout the the European crises is the dynamic/relationship between the desires/rights of the individual versus that of the state and ultimately the EU. On the one hand, you have those who are doing everything they possibly can to keep it from breaking up. On the other hand, there are those who are calling for reform and possibly even the breakup of the Eurozone/EU. Clearly, some of the policies that have been implemented may take time to bear fruit (such as in Germany when they reformed their labour laws about a decade ago) but the thing that continues to plague me is whether or not forcing countries into the mould/shape is necessarily the best policy at this particular moment in time. If we use a second currency we'll gain some additional flexibility, give some countries some more breathing room, and basically allow them to make their own progress in a multi-tier/speed EU which also allows them to change position at any point in time should they desire (depending on it's implementation). For me, progression should be natural and desired not forced. This shouldn't be a question of just not whether or not whether policies that are being pursued are the correct way forward. We should also question whether or not short/medium term pain is worth long term gain (or vice versa) and whether ultimately the citizens of EU/Eurozone buy into the vision that European leaders are currently proposing.
http://dtbnguyen.blogspot.com/2013/01/the-rebirth-and-regrowth-of-european.html
http://dtbnguyen.blogspot.com/2013/03/europes-road-towards-regrowth-continued.html

http://dtbnguyen.blogspot.com/2013/03/europes-road-towards-regrowth.html

The other thing that needs to be thought about is whether the stronger economies can energise the weaker ones or whether they are just being slowed down them. This is not a simple question obviously especially in light of the role Asia (and China in particular) have played in global economic growth in recent history.
http://www.ft.com/cms/s/0/2f89e5ee-930a-11e2-9593-00144feabdc0.html

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/22/the-scary-politics-of-the-euro-zone/
http://www.reuters.com/article/2013/03/22/us-cyprus-parliament-idUSBRE92G03I20130322
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/18/everything-you-need-to-know-about-the-cyprus-bailout-in-one-faq-2/
http://www.smh.com.au/world/cyprus-shellshocked-over-eurozone-bailout-20130317-2g8db.html
http://www.reuters.com/article/2013/03/20/us-eurozone-cyprus-greece-heat-idUSBRE92J0QT20130320
http://www.theaustralian.com.au/news/world/rescue-options-narrow-as-cyprus-works-on-plan-b/story-e6frg6so-1226602891881
http://www.economist.com/blogs/blighty/2013/03/generational-inequality?spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709
http://www.latimes.com/business/money/la-fi-mo-oecd-global-economy-20130311,0,4815250.story
http://www.theaustralian.com.au/business/wall-street-journal/is-bitter-medicine-for-cyprus-a-cure-for-the-eurozone/story-fnay3x58-1226600464827
http://uk.reuters.com/article/2013/03/21/uk-france-tax-idUKBRE92K0BV20130321
http://uk.reuters.com/article/2013/03/15/uk-eurozone-cyprus-idUKBRE92E02120130315
http://www.ibtimes.co.uk/articles/368579/20120731/deutsche-bank-results-investment-banking.htm
http://rt.com/op-edge/cyprus-no-longer-part-eurozone-544/
http://www.businessweek.com/articles/2013-03-17/how-europe-let-cyprus-get-into-this-mess#r=discussed
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/19/what-is-the-eurozone-doing/
http://www.guardian.co.uk/business/economics-blog/2013/mar/19/cyprus-eurozone-cunning-plan-bank-bailout
http://thinkprogress.org/economy/2013/03/19/1739601/united-kingdom-united-states-austerity/?mobile=nc
http://www.smh.com.au/business/world-business/cyprus-banks-set-for-overhaul-amid-ecb-threats-20130322-2gjas.html
http://www.smh.com.au/business/world-business/what-happens-if-cyprus-cant-agree-to-a-plan-b-20130322-2gje7.html
http://www.businessweek.com/articles/2013-03-20/jittery-spaniards-seek-safe-haven-in-bitcoins#r=read
http://www.businessweek.com/news/2013-03-21/grillo-s-euro-skeptic-party-seeks-mandate-for-italy-government
http://www.bloomberg.com/news/2013-03-20/why-global-economies-face-an-age-of-deflation.html
http://europa.eu/rapid/press-release_SPEECH-01-540_en.htm
http://www.ft.com/cms/s/0/f2e5a544-8d8f-11e2-9a8a-00144feabdc0.html

- as usual thanks to all of the individuals and groups who purchase and use my goods and services
http://sites.google.com/site/dtbnguyen/
http://dtbnguyen.blogspot.com.au/