… in 1945, Franklin Roosevelt, Winston Churchill and Josef Stalin signed the Yalta Agreement dividing the world up between them and effectively consigning the countries of Eastern Europe to their Soviet fate.

Available from here. Don’t all push. Women and children first.

There are many extraordinary aspects of the Bernard Madoff $50 billion Ponzi scheme, but the strangest of all is that Madoff was rumbled 11 years ago by Harry Markopolos, an investor-turned-investigator who warned other investors that Madoff was running a Ponzi scheme. Mr Markopolos is a sharp operator — an experienced trader who saw right through the Madoff operation. But the really shocking thing is to discover that he presented his data and conclusions to the Boston office of the Securities and Exchange Commission in May 1999. I’ve just come on the document he presented then, and it makes astonishing reading. It’s detailed, informed and very closely argued. He highlights lots of what he calls ‘Red Flags’, any one of which ought to have triggered the regulator’s interest. And yet nothing happened.

In due course we will find out why. But in the meantime there’s been speculation that if Mr Markopolos had had a blog, then Madoff would have been stopped in his tracks much earlier — and a lot of investors might have been spared financial ruin. “Perhaps”, muses Ray Pellecchia on his blog, for example, “Mr. Markopolos lacked only an effective medium to communicate his warning.” He proposes a thought experiment: What would have happened if Mr. Markopolos had blogged his analysis? That is, what if he had posted the entire piece on a blog, under his name or a pseudonym?

“We’ll never know the answer, but here’s what I think might have followed:

• The post would have quickly spread far and wide among traders and investors. It’s a small Street, as the saying goes, and an analysis raising questions about the investment results of a prominent name such as Madoff would have sent e-mails flying.

• Those who had money invested with Mr. Madoff — or who were thinking of investing — would have done the same math that Mr. Markopolos had done, undoubtedly reaching the same conclusion. The resulting rush to pull money out and the avoidance of adding new money would have meant a faster end to the alleged Ponzi scheme.

• If indeed there were some fund managers who had invested with Madoff suspecting that something was amiss but going along for the lucrative ride, as Paul Kedrosky has suggested, they would have been forced to confront the newly unveiled facts. “

It’s a nice thought, but it ignores some harsh realities about corporate and legal life. To be fair, Mr Pellecchia acknowledges some of them.

“Would Mr. Madoff have initiated some sort of “retribution” against Mr. Markopolos, as the Journal says that Mr. Markopolos feared? Even an anonymous blogger can be identified. Again, it’s impossible to know. We do know that Mr. Madoff was chairman of Nasdaq, head of one of its largest market-making firms, and that he and others at his firm had advisory roles with regulators. Could Mr. Markopolos have been blackballed by the Street or subjected to greater regulatory scrutiny because he was taking on an industry leader? Mr. Markopolos also could have been sued for libel, and even if his analysis ultimately would have been proven factual and not libelous, defending a lawsuit is an expensive proposition. But it would seem unlikely that Mr. Madoff would risk exposing his alleged scheme by bringing a lawsuit. All in all, however, it’s easy to see how the possibility of regulatory retribution or a lawsuit would have had a chilling effect on a decision to go public. A whistle blower would need some wherewithal to blog his allegations.”

He certainly would. Just think about it for a moment. At the height of the Wall Street boom, when cretins like Madoff were worshipped as supermen by the media as well as by legislators and regulators, a guy publishes a blog post alleging that the Chairman of the Nasdaq is running the biggest Ponzi scheme in history. Before the poor schmuck can get out of bed the next morning, lawyers from a Wall Street law firm (@ $600+/hour) have had Google/Blogger take down the blog, have had his ISP disconnect him from the Net, and are threatening him with a lawsuit that will bankrupt not only him but everyone in his family unto the fourth generation.

So we need a dose of reality here. If you think the RIAA are nasty, then you’ve never seen real corporate thugs in action. I’ve been threatened twice with libel actions and, believe me, it ain’t funny. We live in a world in which all it takes to persuade an ISP to take down your site is a threatening letter from a lawyer. What Mr Pellecchia’s thought experiment highlights is that while the blogosphere is a great thing, it also has its limitations. There are times when only a big media organisation — a corporation like the BBC or a newspaper like the Guardian, New York Times or Washington Post — has the muscle and financial stamina to take on someone like Madoff in his prime.

Thanks to Hap for the link which started me off on this rant.

Cambridge University is celebrating its 800th Anniversary this year. There are various ways of viewing its contributions to society. You could see it — as the university’s leading security expert Ross Anderson does — as 800 years of creative destruction.

If you want physical objects destroyed, the army can do that. As for badly-run companies, they get trashed when the economy goes into recession; the economist Joseph Schumpeter taught us that this ‘creative destruction’ is vital for progress as it clears away the deadwood and creates space in which new businesses can grow. And it’s just the same in ecosystems: from 1911, the USA put a lot of effort into stopping forest fires, but then discovered that although they saved individual plants and animals they were destroying the environment. A forest with a fire brigade is a sad old forest; a lot of plants from sequoias to proteas reproduce only in the aftermath of a fire.

Just as fire regenerates the forest, so a great university regenerates human culture – our view of the world and our understanding of it. We incinerate the rubbish. And Cambridge has long been the hottest flamethrower; we’re the most creatively destructive institution in all of human history. And big new things come from that. The ground we cleared made us the cradle of evangelical Christianity in the sixteenth and seventeenth centuries, of science in the seventeenth and eighteenth, of atheism in the nineteenth, and of all sorts of cool new stuff since – including the emerging sciences of life and information…

Read on.

Some lovely pieces by his New Yorker colleagues in the current issue. For example, this by his editor, Roger Angell.

As a contributor, he was patient with editing, and pertinaciously involved with his product: an editor’s dream. My end of the work was to point out an occasional inconsistent or extraneous sentence, or a passage that wanted something more. Almost under his breath over our phone connection, while we looked at the same lines, he would try out an alternative: “Which one sounds better, do you think?” Sighing, he would take us back over the same few words again and again, then propose or listen to a switch of some sort, and try again. All writers do this, but not many with such a lavishly extended consideration. He wanted to see each galley, each tiny change, right down to the late-closing page proofs, which he often managed to return by overnight mail an hour or so before closing, with new sentences or passages, handwritten in the margins in a soft pencil, that were fresher and more inventive and revealing than what had been there before. You watched him write.

This process sounds old-fashioned, but Updike was probably the very first New Yorker writer to shift over to a computer, back in the early eighties. “I don’t know how this will change my writing,” he wrote to me in advance, “but it will.” He was right, of course: the flavor was mysteriously different, the same wine but of another year.

And then this from Adam Gopnik:

It was part of the great good luck of this magazine that he needed, or indulged, us, and that his appetites and ambitions matched the dreams of the editors—which is only to say that several generations of editors tossed a bit less fitfully at 3 A.M., knowing that, if a book on some knotty modern subject had been sent out to Massachusetts, two weeks later there was sure to be, rebounding back, nine or ten pages of perfectly tuned prose—typo-free, full of cunning synopsis, serene judgment, big news (a generation got educated on Borges and Nabokov alongside him), bite without tooth marks, and always at the end a permanent turn of phrase or a metaphor, not a witticism merely but a benediction, a blessing, an insight that lifted it far above mere reviewing and into a form of witty personal poetry.

And, as those same generations of editors learned, the near-perfect thing was usually prefaced by a letter gaily outlining its supposed inadequacies, and all the reasons the editors might wisely prefer not to run it at all—a form of modesty that, given not just the quality but the heat and shimmer of what was enclosed, passed the edge of modesty to touch the edge of superstition: it was, one realized, Updike’s way of staying young, an outsider, pressing his face against a window, still the long-faced brilliant boy on a remote Pennsylvania farm turning the pages of a New York magazine and quietly deciding to be a cartoonist and a humorist and a parodist, while the loving and ambitious mother fretted and the weak but honest father listened to the radio (a family triangle that he inserted, again and again, into all our imaginations). He was still a kid from Shillington dreaming of being a New York wit, and feeling lucky that he had been allowed in at all.

“I’ve got to own up to my mistake, which is that ultimately it’s important for this administration to send a message that there aren’t two sets of rules. You know, one for prominent people and one for ordinary folks who have to pay their taxes.”

President Obama, commenting on his mistake in running Tom Daschle for a post in his Administration.

Wow! When was the last time you heard a prominent politician saying something like that — and meaning it?

From Thomas Friedman at Davos.

DAVOS, Switzerland — In its own unpredictable way, the Davos World Economic Forum usually serves as a crude barometer of the latest mood or mania on the world stage. This year did not disappoint. What has struck me is the quiet urgency that infused so many panel discussions and private conversations here between investors, politicians and social activists. To put it crudely: Everyone is looking for the guy — the guy who can tell you exactly what ails the world’s financial system, exactly how we get out of this mess and exactly what you should be doing to protect your savings.

But here’s what’s really scary: The guy isn’t here. He’s left the building. Elvis has left the mountain. Get used to it.

What do I mean? First, if it is not apparent to you yet, it will be soon: There is no magic bullet for this economic crisis, no magic bailout package, no magic stimulus. We have woven such a tangled financial mess with subprime mortgages wrapped in complex bonds and derivatives, pumped up with leverage, and then globalized to the far corners of the earth that, much as we want to think this will soon be over, that is highly unlikely.

We are going to have to learn to live with a lot more uncertainty for a lot longer than our generation has ever experienced…

Q: What is the capital of Iceland?
A: $25

It’s snowing — for the first time in years. The world is suddenly white — and quiet. Rush-hour traffic through the village has virtually disappeared. The children’s schools are closed for the day. (Yes, it’s Britain.) Looking out of the window late last night I was suddenly transported back to the 1970s, when a friend and I were driving back from Vienna and had left the city rather late — certainly too late to make it to Munich. As night came on it began to snow heavily and we left the autobahn and went looking for a village. We came on a small hamlet with an inn straight out of a fairy tale. Funny gothic lettering on the front, golden light spilling out through its windows. We parked and went in. It was warm, bright, hospitable. A few villagers were drinking and talking. We asked if we could have a room for the night, and an evening meal. Of course. We ate quietly (Weiner schnitzel, naturlich, washed down with beer) and turned in for the night, sleeping soundly under warm duvets covered in white covers.

In the morning, everything was eerily quiet. We had breakfast and then took our bags out to the car. The snow was up to the top of the tyres. But on the roads life went on. Business as usual (unlike Britain). We examined the map and found that we were near Berchtesgaden. “Let’s go and see where Hitler’s house was”, said my companion. We set off. It had stopped snowing. The road became steeper. About half-way up we passed a huge building that looked a bit like a country club. A sign proclaimed it as a US Forces R&R centre. My friend (who had been a Vietnam war draft dodger and hated everything American) made a rude gesture and shouted some obscenities out of the window.

Eventually we reached Obersalzburg, the spot where the Berghof — Hitler’s mountain retreat with the famous balcony — had stood. It was now just a cleared area with some remains of buildings — and a hut selling souvenirs. But the stupendous vista of the mountains remained. A party of middle-aged Germans arrived in a coach. They had a tour guide, who took them round the site, pausing from time to time at particular locations and speaking to them in a serious tone of voice. They listened intently. My companion opined that they were listening not just intently but reverently. He went very quiet. And all the way home — through Germany and past all the US bases that then littered the countryside — he never again uttered an anti-American sentiment.