Wild Speculation

(TL;DR / outline of post

1. Funding _was_ Secured but got kiboshed by low oil and the leadership transition in Saudi Arabia that also included that hotel thing and the embassy thing. Oil was low because we were putting pressure on Russia / Putin and inadvertently (?) took out Saudi along the way.

2. If we continue to fail to control crypto, it will wipe out our economic system; Musk bought Twitter in an effort to fix this problem. I don’t know that we should be grateful nor am I sure that his efforts will work, but on balance, I think most commentators are worried about the wrong things.

End outline)

The financial press has bled out into mainstream press, and the results are weird and exciting. Here are some completely bullshit, based on absolutely nothing, speculations I’ve been entertaining. I mean, if _other_ people area allowed to make up and write complete nonsense, I don’t see any reason to miss out on this golden opportunity to do the same.

Or should I say, crypto opportunity.

First, we have the Twitter buyout. Matt Levine has been providing play-by-play, which has been fun and enlightening in many ways. However, Levine has consistently characterized Musk’s previous efforts to take a company private in a very comparable way as … amateurish? A bit bonkers? All of which is probably true, at least from most perspectives. OTOH, lately Business Insider and others have been chewing on the recently public emails from Musk to Al-Rumayyan (and yeah, I keep spelling it wrong, so it may still be wrong now) as that deal fell apart. With that tiny bit of additional data (nothing to build an edifice on, but look what everyone else is doing! Why can’t I play too!), I offer an alternative explanation. Anyone who has ever tried to nail down any element of the Saudi royal family and/or government with paperwork has been … disappointed, shall we say, and that’s assuming that they survived their efforts with their dignity and/or hide intact. Musk’s lack of paperwork when getting the sovereign wealth fund on board is irrelevant. Paperwork with these people _truly is_ a detail, and not one worth putting any real time and effort into. I initially thought, well, maybe Musk made a naive mistake and thought he was dealing with The Decision Maker, only he wasn’t. And actually, I think that _was_ the mistake, but I don’t think it was naive. Al-Rumayyan had been running the sovereign wealth fund at that point for a while as a momentum growth tech asset fund, which was _delightful_ for a lot of other people who wanted to sell out of Very Large Stakes and didn’t want to depress the market while doing so. The sovereign wealth fund had already bought into Sofbank; why NOT help take Tesla private. Seemed perfect for what at the time was the Kingdom’s PR efforts to present themselves as transitioning to a New Energy Future and being Responsible Stewards of Fossil Fuel Reserves and the blah blah blah.

https://www.businessinsider.com/elon-musk-texts-anger-saudi-pif-taking-telsa-private-docs-2022-4

So why did the deal fall apart? Al-Rumayyan played it off as, hey, we hadn’t gotten to the completion point, and from the perspective of paper-oriented people, that made sense, ha ha ha Musk is stupid. But paper doesn’t _help_ you with these people. And according to Musk, Al-Rumayyan was _enthusiastic_, said he’d wanted in since 2016. And there is _no question_ that Al-Rumayyan is The Man when it comes to running that fund and having the ear of The Actual Man. If the fund Man changed his mind in a hurry, there’s really only one person who could have made him do that.

So…. Why? I think they ran out of money. Oil was low, and it became clear that it was not going to being ticking up for a while. We opened the taps to pressure Russia and render ourselves more independent of Other Countries (you know, like These Guys), and it was working on Russia; I am sort of wondering if we almost broke Saudi?

https://www.wsj.com/articles/saudi-royals-are-selling-homes-yachts-and-art-as-crown-prince-cuts-income-11650792780

I don’t want to encourage anyone to pay for BI or WSJ and I’m sorry to point to paywalls, but here I am. But before you say, well, there’s another perspective here, I’ll point you to one:

https://www.theguardian.com/world/2020/nov/19/saudi-accounts-emerge-of-ritz-carlton-night-of-the-beating

The Guardian article has a great quote:

“Warde said: “Anti-corruption initiatives are usually politically motivated. They are often tools for singling out those who were enriched. They provide selective lists of those who were enriched. This was a clear case of the intersection of money and politics in the Islamic world.””

It’s true. Anti-corruption initiatives — all reform impulses — are politically motivated. All of them. And there are some reform impulses that are extremely gross, both in terms of goals and tactics. But watch out for people who complain about something happening among an elite group saying “it’s politically motivated”. Of course it is. That’s everything about an elite group.

(Lots of people draw connections between the events around this time and what happened in the embassy in Turkey, and I’m sure they are right to do so. But given that we _now_ know that the woman who was such an able spokesperson for the victim in the months after that disgusting violation of diplomatic privileges and custom around embassies was the fiancee of a _married man_, and given that both women remain quite vehement defenders of that man’s innocence of whatever he may or may not have been killed over, I think it’s fair to say that none of us have any fucking clue what was actually going on around that man and what he may have had planned.)

The Tesla deal being worked on and falling apart overlaps with the events above, and I think all of that points very clear to a highly, highly stressed government in Saudi that was desperate for money. They were stopping outflows (to take Tesla private) and they were cutting off leeches and they were hunting down anyone who might plausibly be a kingmaker or possibly a leader of a revolution that has been rolling along just below the surface for decades. It was all being run by someone who was young, and poorly informed, and who hadn’t participated in a lot of what everyone else had been doing for a long time. Depending on your perspective, this was a straightforward power grab and consolidation … or reform efforts. Similarly, resistance to this was either a straightforward effort to maintain a hold on power that was intergenerational and assumed … or efforts to incrementally improve the situation in Saudi for women within the elite. It’s a desert on top of a lake of oil. I feel like that’s an adequate explanation for everything, honestly.

Musk miscalculating and thinking he had money from an element of this doesn’t actually feel like the kind of naïveté I had it pegged as. It’s not “failure to sign the papers before opening his mouth”. It’s not “dealing with Not the Decision Maker instead of The Decision Maker”. It’s, surprised by a (counter-)revolution. Honestly, it can happen to anyone.

OK, so that’s speculation number one, but it connects to the next bit.

Musk _did_ learn a lot from these events, altho probably not what people think he should / did learn. He got the money from different sources this time, for one thing. But that’s not what I think is interesting about the Twitter thing.

Again, from BI, but it’s really just a quote:

“In announcing his acquisition plans, Musk said he wants to, "make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans."”

Meanwhile, over on TRMS, RM is “afraid” and has a lot of “fear” about what Musk might do, and top of mind for all the people like her is, Will The Donald be Allowed to Return.

These are _really_ different lists of things to prioritize. It’s _hard_ to argue with ideas like “defeating the spambots”, and Musk has been super exercised about the spambots and Twitter has either been unable or unwilling to do anything effective about them, and I think I know why. BUT FIRST! Why is Musk so exercised about the spambots? Because the spambots are pumping the crypto momentum, and they are tightly associating themselves with Musk.

I know you are thinking ha ha ha neener neener neener BUT again at BI:

https://markets.businessinsider.com/news/currencies/top-ecb-official-urges-crypto-crackdown-to-avoid-lawless-frenzy-2022-4

You almost don’t need to read past the headline there, but basically we’ve got Fabio Panetta at ECB saying crypto is rapidly becoming a systemic risk to the financial system and is undermining our efforts at stopping international money laundering. In case you have been doing other more important things for the last decade, efforts to stop international money laundering are a big part (along with us pumping lots of oil to keep the price down) of how we put enough pressure on Russia to reverse Putin’s progress towards Taking Over the Whole World. I understand you might be thinking, Russia invaded Ukraine! How is Putin’s progress being reversed!?!? Well, The Donald failed both to get re-elected or to pull off a coup AND Le Pen did not win re-election AND Jansa did not win re-election. This is substantially different from 2016, when The Donald was elected, not to mention Boris Johnson, Brexit, extended periods of time in the Netherlands without a government because of the difficulties of creating a workable coalition (and meaningful fear that Geert Wilders would be elected).

Will The Donald return to twitter? I have no idea. I also don’t really care. That’s very much fighting the last / wrong war. Right _now_ we’ve got other, bigger problems, and I’m pleased to see that Musk is interested in working on at least some of them. I’m not sure what he means by “authenticate all humans”, and I’m _really_ not entirely certain it will fix twitter’s problems with bot networks if, in fact, their most recent incarnations are more like call centers than actual bots. But I’m not particularly fearful.

I’m going to save my wild speculation about trains, PTC, the Biden train thing and unions for another post, because it’s barely after 9 am and I’m already tired. I’ll go put a TL;DR at the top to save you the trouble of making it all the way down here.

More Wild Speculation

(Outline at top of post, this time to organize my thoughts:

NOT TRAINS. That’ll be 3, if I get there.

Our intelligence is really good, but we didn’t realize that Russia’s military had the problems it had.

Our intelligence is focused on Threats, not Opportunities.

And that’s not the Good Thing it seems like it is.
)

This post is not about trains, for anyone who made it to the bottom of the last one. If I get to trains, it’ll be later. Sorry.

US intelligences services are really good. They are well-funded. They have great technology. They have enormous institutional knowledge about how to do what they do and they have unbelievable connectivity. True, they were probably undermined by Orange Guy, but honestly, he didn’t have the focus to really do anything meaningful to them and it’s not clear he even really cared to damage them particularly; he was more interested in sharing inappropriately with That Evil Guy’s Minions. We could clearly see both Ukraine invasions in the lead up to them. But we absolutely mis-assessed the probability of the success of the second invasion. How did we get that so wrong?

A lot of Twitter in the first hours/days/weeks of the invasion was busy sharing photos and interpretations of pictures coming out of Ukraine of Russian equipment that was not … functioning as expected. The most obvious of course was the convoy that was not progressing, but there were great analyses of things like tires. In the lead up to the invasion, the tire focus involved weather and frozen ground vs. muddy ground. But post invasion, a lot of people were talking about tire failures that indicated a failure to do very basic maintenance.

Other analyses revolved around having a conscript army, and the lack of cranes / forklifts on the trucks, and other logistics associated with the Russian army. The initial things I saw on twitter — and which caused me to dive into my current fascination with all things Warehouse and Circular Economy and Innovation in non-customer facing parts of our economy, but which enable e-commerce — bore out as true and the initial analysts credited in later, more traditional journalistic coverage.

Basically, the Russian economy is significantly more backward than we realized, and that is reflected in the military. Also, the Russian military is suffering from the results of a decade of corruption diverting resources and failing to do maintenance and resupply. The Russian military is, in a word, incompetent. Still big, and with lots of go bang stuff, and some capacity to deliver the go bang stuff. But incompetent. And our intelligence services _entirely failed to notice_. That is _amazing_. Why did _that_ happen?

First observation: a lot of intelligence is basically learning what the other side’s leadership knows. That’s not _all_ of intelligence, but it is a a lot of it. A good deal of the rest of it is connecting with the opposition to the leadership and what they know. What’s left after you get past that is any open-source information. So, if Russian leadership did not know they were incompetent, and if Russian opposition was focused on Anti-Corruption actions without necessarily understanding or caring about incompetence in the military that resulted from corruption, then our intelligence was unlikely to find out, as there isn’t really any open source in Russia.

Second observation: anyone in Russia who _did_ want the military to be competent / well-run was punished for efforts in that direction. To the extent that our intelligence _saw_ that, we’d probably chuckle and forget about it. The opposition in Russia similar. They have no motivation to publicize this. If they did publicize this, it would have been fixed.

But still. It isn’t _that hard_ to build a picture of how well an organization is run / where its strengths and weaknesses are. How did we fail to notice these weaknesses? Well, Russia has nukes, and when both sides have nukes, there’s this Mutually Assured Destruction era assumption that you almost don’t _need_ conventional anything if you have nukes. It’s not true now. It was not really true then (Sorry Not Sorry Ike you crazy bastard), either. But it’s a lot of how people think about things.

More relevantly, my sense is that our entire intelligence community is built around finding threats. I think we have stopped looking for Opportunities. I’ll put a little personal color on this to show what I mean by this. I did not grow up rich. And I grew up in a cult. There was a lot more anxiety about paying the bills in the family I grew up in than was justified objectively, also. I have a pretty ingrained tendency to overdo everything I do at all. Almost _all_ of my “good enough” talk is an explicit effort to compensate, and is itself overdone — my husband describes my control freak nature as being so control freaky my primary goal is to make sure people don’t notice just how much of a control freak I am. I think he may have underestimated how bad this is, actually. I think a lot of my control freakiness is aimed at making sure _I_ don’t see how much of a control freak I am. I hit a point in my mid 20s where I realized that I was optimizing with the goal of Preventing Disaster / Compensating for Murphy’s Law. I had gotten _so_ good at that (post-divorce), that I started summarizing my perspective / behavior as, “If someone dropped a million dollars on me, I wouldn’t be able to benefit from it”. And I thought, you know, that’s probably wrong. So I adjusted my approach. I “tuned” not for Avoid Any Bad / Prepare for All Possible Disaster; I “tuned” more loosely, to allow good things into my life. And that worked really well for me. I could see that worked, and I loosened up even more. And that worked really well, so I started doing some pretty crazy stuff, and honestly, most of _that_ has worked out really well. The world looks _really_ different when you quit with the Apocalypse Everywhere All the Time and go with The Future’s So Bright I Gotta Wear Shades.

Don’t be crazy out there; you still have to select achievable goals, make a reality based plan, do solid task breakdown and monitoring, adjust flexibly to changing environments, and implement. I mean. Control freak gotta control freak.

If we had an intelligence apparatus that was focused on Opportunities — hey, Russia isn’t funding their military, if we just …

Yeah. You can see how that has been bad for us in the past!

OTOH, let’s play that out for a bit. Our delightful democracy, where the Person at the Top of the Military turns over (Potentially) every 4 years (for sure after 10) is structured so that politico-military-intelligence policy is directed somewhat arbitrarily by someone who is NOT part of the entrenched technocratic intelligence gathering community. Maybe we _don’t_ want whoever that is to have a list of We Could Totally Take These Guys It Would Be Easy. But maybe we _do_ want to be able to realistically portray what would be involved if we tried to do certain things. Maybe we _do_ want to notice that someone has rotted, has weakened, is a zombie dinosaur that is gonna go boomsplat when it falls over and make sure you are not underneath any of the toxic bits that splash down.

How would we do that? I mean, what’s involved in making sure people do maintenance? That seems more like a checklist of low-value contacts asking very Not Classified Type Questions, and could even be passive data collection of you have a good understanding of indicators of failure to maintain vs. Doing the Maintenance.

Also, we could practice by checking up on ourselves and our allies?

Finally, wild speculations about trains

(Outline to guide my thoughts while writing this.
But first! What’s going on with PTC?
Railroad fans want contemporary and/or SF high speed trains ; the US has really bad passenger trains and extremely cost-conscious freight ; unions on railroads want to keep their jobs and also not die
Everything about railroads is small / niche / weird — rail specific equipment, rail specific users, silo’d and old
There is no US or US adjacent railroad tech ecosystem, so contracts for new developments in rail engineering go to established companies focused on government contracts
Biden’s efforts to get rail going have a very hard road ahead
)

First, what’s going on with positive train control? We’ve been talking about self-driving cars for a while, despite the fact that cars often only have _one_ person in them anyway. I’ve made a joke about self-driving taxis for long enough that my closest friends now remember the punch line (which was why I repeated the joke so often) (Joke goes like this: what’s the difference between a regular Uber and a self-driving Uber? The regular Uber has one driver. The self-driving Uber has two). Trains, meanwhile, transport insane amounts of everything (freight) and/or lots of people (commuter rail). We don’t in any way need self-driving anything, really — what we need is better safety equipment and options so that people can transport themselves without needing to drive themselves.

Positive train control is a better safety system, however, railroad unions have a history of viewing this kind of increased automation with suspicion, as they don’t want to lose their jobs. Normal unions focus primarily on safety ; railroading is so conservative, and has been so insanely dangerous for so long, that their unions treat safety as secondary to job retention. It is a real problem. Let’s look at some of those components AFTER a quick trip over to recent developments in PTC.

https://www.railwayage.com/cs/fra-ptl-supporting-next-generation-train-operations/

This is insanely detailed! But really worth reading carefully, because you can see how serious efforts are being made to develop real world PTC within the constraints of the industry. You can see immediately that the contract was put out to bid to two companies, one you’ve heard of, Boeing, and you probably are not that impressed with any of their recent efforts anywhere at all. At least, you shouldn’t be. The other you may or may not have heard of: SAIC/Leidos. Here is a WaPo article about when that change occurred and a bit of history about them.

https://www.washingtonpost.com/business/capitalbusiness/one-year-later-saic-and-leidos/2014/09/26/d1fefd68-4273-11e4-b437-1a7368204804_story.html

It’s from 7 years ago, and I’m sure you can find something better than that; let’s just say that if Boeing has been an outright horror show over the last few years, SAIC/Leidos is at least consistently unimpressive.

A few more things we can glean from the article!

First, this iteration of PTC involves _zero_ outside the train infrastructure _except for the GPS satellites as they already exist_, and is required to not depend on any special subscription services. Basically, rule one on this thing is it has to work with absolutely minimal, standard, perpetually available equipment. Because, railroad.

Second, this iteration of PTC specifies a 900 Mhz radio link between equipment in the front of the train and equipment at the back of the train (HOT and EOT respectively). While I do not expect my readers to _all_ know this, if you are this far into the article you probably will not be _too_ surprised to learn that this was a stupid requirement, because trains are frequently a mile or more long. Home wireless landline phone handsets used to be 900 Mhz, because it’s kinda useless for anything of any distance and specifically, 900 Mhz only works at mile long distances under ideal circumstances. This iteration of PTC is not successful, as anyone in possession of those two basic facts could have worked out (trains often a mile plus long ; 900 Mhz cannot consistently reach that far).

Finally, whatever they want to put into equipment at the EOT and HOT has to integrate with existing equipment in those locations (annoying but normal). They did allow antenna and what not to be installed on the roof.

This is not going well! I mean, it’s going, which is something. More than has been the case in the past, so, yay? But it’s terrible! Over in rockets, SpaceX is reusing rockets by landing them on their butts. Over in airplanes, we have electric battery powered planes. Over in cars, we have people sleeping on the freeway while AutoPilot illegally drives their car for them. Meanwhile, over in trains, we have someone spec’ing PTC with 900 Mhz. Why would you even do that?

I’m not 100% sure, but I have a couple theories. As noted above, railroad related unions put job retention at a higher priority than safety, so they are, generally, opposed to PTC. The owners of railroad operations, whether freight or passengers, have an all-consuming focus on cost, so they are not looking to implement PTC unless it saves them money, which it won’t, if it can’t reduce their labor costs. Perpetual stalemate there. Passengers are the only constituency that pushes for PTC, and they often forget it exists until there is an accident that PTC might fix, and then there is a flurry for a year or two that produces a contract like the one above.

Now, you might wonder, WTF can’t we just put PTC on the shorter passenger trains. Well, sure! And in fact, we’re finally starting to see discussion of separating PTC implementation and usage into high risk / low risk settings (basically, will annoying passengers or other humans complain when something goes wrong). That _might_ break the stalemate. One of the problems, however, is that everything about railroads is weird, niche, out of date, built in a really screwy way from the perspective of … anyone outside of railroading. In order for a system to pencil out, you’d need to sell it to the larger customer base (freight) in addition to the small customer base (commuter rail and amtrak).

Can passengers, railfans or the citizenry at large be mobilized to push for better train development? Hard to say, but possibly. Certainly, Brightline has been trying to make nice, commercial passenger service happen in Florida, and pre-pandemic, it was looking pretty good. They even made a deal to slap the Virgin name on it instead of Brightline, altho now there is a lawsuit as they are trying to get out of using the brand name (and they specifically say, because the brand is tarnished). If Brightline were to succeed, and tourists were to go to Florida, have a good rail experience, and come home and lobby for more of the same, maybe? If California’s efforts to built high speed high quality passenger rail were not so deeply troubled, maybe?

Certainly, the safety performance of railroads currently, in conjunction with the general invisibility of railroads to most people, has not generated enough sustained interest to pressure the participants in this industry into moving from their entrenched positions (vis a vis, capital is focused on costs and labor on job retention and no one is doing any meaningful innovation at all).

European rail systems retained a higher degree of passenger use for longer than the US for a laundry list of reasons that everyone else will give you and I will eye-roll and say, Because Oil Was Bought with Dollars while very carefully closing my mouth before the phrase, “you ninny” rolls out after. That means there is still a functioning rail system for young people to use and say, I don’t fly because of the climate impact. Could we do that here? Maybe.

One of the biggest problems with rail is the land acquisition problem. That has dogged everyone who ever had a bright idea for a new land-based transportation system. I think that any effort to increase the fraction of trips taken by rail (vs car or plane) _between cities_ (within cities, there are multiple examples of successful light rail systems being created and/or extended) has to build upon the existing rail network. And there lies another huge problem. While _technically_, passenger trains have priority (that was part of the Amtrak deal that took passenger trains off the hands of what would become freight carriers), as a practical matter, most don’t at all, and even on the Acela corridor, it’s hard to sustain what priority they do have _and that’s with nationally elected officials and powerful / wealthy businesspeople riding_. The Acela corridor is there, because it wasn’t possible to run enough plane shuttles along BosWash. We _have_ to have Acela, and we can’t even maintain a priority for those trains.

At this point, freight is preventing bringing back service lost to Hurricane Katrina, because they just don’t want the hassle — and that was a popular line that did a lot to maintain support for Amtrak and to encourage people to try riding trains in the United States. Last summer, Biden signed an executive order directing the Surface Transportation Board to consider rulemaking to deal with the prioritization problem; predictably, the railroads have pushed back.

Biden’s efforts to improve safety on railroads and to improve passenger trains (interurban and commuter heavy rail) are up against some of the toughest problems that currently exist in any industrial segment in our country today. The only thing he has going for him is that every year, more people realize, to their very great pain, how much they need to have functioning, efficient, safe rail in order for their business to continue to do business. In the decade or so after the creation of Amtrak, a lot of people around the country in a position to make decisions about a lot of things figured that highways could completely supplant railroads, so we should just get rid of rail. We _did_ lose a ton of rail, as the system retreated to its core competencies, which at the time involved a lot of unit trains moving coal. We had a comparatively brief phase of oil unit trains (*shudder*) but intermodal is finally up and running, as the true costs of heavy trucks on roadways is experienced.

As more and more states understand the costs of building more highway lanes to accommodate trucking needs (in dollars, in climate impact, in maintenance impact, in how much land has to be acquired to move a given amount of goods), more and more states will appreciate that this could be done cheaper and better and faster — that rare trifecta of Awesome — with rails instead of lanes. The question remains, however, whether that means the highways of the future will be dominated by motor coaches, or whatever future rail will have passenger trains in much higher concentration. We probably won’t see any kind of meaningful distance into that future, until we build a tech ecosystem around rail. And we are not there yet.