not watched over by machines of loving grace

I see that some of the people that were betting on the indexation of volatility came unstuck last week. Not forgetting that many regular equity investors also lost money.

Credit Suisse handled one of the exchange traded products central to what happened and which was once worth $2.2bn, although last week it lost 96% of its value during the equities sell off, before being declared defunct. Nomura had a similar product which they also shut down.

Neither bank will have been directly affected by this, being merely the facilitators of the products and consequently only accepting their 'that'll do nicely' margin on all of the transactions involved.

It reminds me of that movie, The Big Short, where complex bundling was used to hide dodgy products, until it all unwound. I suppose it illustrates that the slippy money just gets moved around to the next big scam whilst the real effects of the losses drift through into pension funds originally designed to support average working folk.

The guy who wrote the original book of The Big Short (Michael Lewis) also wrote Flash Boys, which is the one about High Frequency Traders. It describes the people who trade in the microseconds of volatility during share disruptions using ultra fast computers on fast links close to the main exchanges. The principal is like that rigged betting used in the movie The Sting, only this version is legal.

Now there's an ironic twist as the listed values of these HFTs are themselves rising. Companies like Virtu and Flow Traders are seeing short term gains in their own listings. A kind of 'meta cubed' level of redirection. Betting on the companies that trade on the volatility of the markets created by exchange traded products failing.

Something else trips into view with all of this. The volatility index (Vix) which was another catalyst in the week's big sell off. More than it being a lagging indicator, there's allegations that trading firms with sophisticated algorithms could manipulate the Vix up or down by posting quotes on S&P options. If true, they wouldn't even need to trade or deploy capital but could cash in on shorts against the falling equities.

But its all quite sophisticated stuff, muddied further by machines running much of the buying and selling. We are still some way from Richard Brautigan's
cybernetic forest filled with pines and electronics where deer stroll peacefully past computers as if they were flowers with spinning blossoms.

a hack from a handsaw

I still use and am even fairly loyal to Garmin products, but I've recently had another one croak on me. This time it was a combination of failing battery and then the switch on the side of the unit stopped working.

I can remember from other Garmin units that when they die, they really die and there's no economical way to repair them. I experienced it with an earlier Edge unit and a couple of their watches. I suppose they do get bashed about a bit in all conditions, but it seems to be quite small things that eventually make them stop working.

Another Garmin device used a small 2032 battery which, once removed, lost all the settings forever and wouldn't allow the unit to be restarted.

And now I see that the latest Apple gadget may be following a similar route.

Even the iFixit team couldn't get inside the new HomePod without using a hacksaw. They also noticed that the circuit boards have been flooded with glue to keep the components in place and to stop rattles. That'll stop home adaptations of the units too.

Maybe the intention is that this will be a 'buy once, lasts forever' kind of purchase, which certainly was true in the days of component hi-fi, but less so in these digital times.

air

My earlier photos of the slopes made it look fairly deserted. Naturally, around the ski stations there's plenty of people. The wide range of feeder cable car routes make this inevitable. Although it looks like a free-for-all it is really quite orderly as people go through the Oyster card style gates to get onto the individual gondolas. I reckon the queue time was only a matter of two or three minutes.

The alternative to using the main slopes is to walk to one of the freestyle areas, ideally carrying a snowboard, to enable some proper air action.

And anyway, once down a slope, there's plenty of spots to pause, maybe to drink in some sunshine, maybe something else as well.

But let's don the Volcom and go take a look over the edge.

There's various ways to get started...

But what goes up must surely come down...

Sometimes moving the show around just a little bit.

Or, just throw some snow around. It still looks dramatic.

Those snow machines will soon put it all back in the right place.

And here's another one of a wider area, to show that there's something for everyone.

So, choose your style and pursue it with vigour.

Kaprun construction

Our base is in the Austrian ski resort area of Kaprun, a small town a few kilometres from Zell-am-See and about 100 kilometres south-west of Salzburg. Nowadays it has adapted to the tourism associated with skiing, having some of the higher mountains close by and a glacier which can provide a snow experience throughout the whole year.

See Kaprun at the bottom of the valley, from my picture taken on the mountainside.

Right now Kaprun is part way through building two new gondola lifts from the centre of town which will link onto the route to the glacier. This significant civil engineering requires both a new cablecar system and also new roads and feeder infrastructure.

My diagram shows the planned new piece of infrastructure, which links right to the Langwied Mountain Station at around 1976 metres. Currently the way to get there involves a 6 km route out of Kaprun before reaching a base station at around 900 metres. Then it is separate routes at 1976m, then 2450m and finally 3029m to get to the top. The new route will go directly to the intermediate 1976m station and presumably will create a big new opportunity for the once farming village of Kaprun.

But these old pictures only tell a partial story of a village that came under Hermann Göring's rule as part of a German propaganda initiative.

In 1938, the Austrian Chancellor Schuschnigg had been bullied by Hitler into agreeing a greater Nazi presence within Austria. Schuschnigg hoped that agreeing to Hitler’s demands would prevent a German invasion. Instead, German foreign minister Göring faked a "plea" for German assistance from inside the Austrian government. Then German troops marched into Austria and Hitler announced his Anschluss (the so called Union of Austria and Germany).

Göring staged the start of construction of Kaprun Dams in 1938, as part of plans for a "Tauernkraftwerk" mountain hydro electricity power plant. There were no plans so he simply used a field and some men with shovels to create the propaganda.

Despite the lack of plans, forced labourers (i.e. slaves) were used to begin the construction in horrendous conditions. As the war started, prisoners including Polish, French and Soviet POWs, Italians, people from the territories of the Soviet Union (‘Ostarbeiter’) and Jews were used to continue the work on power station and on the dam above it in the valley.

By the end of 1944, work on the site had come to a halt, but not before a crude barrage had been constructed out of any materials available at the mountain camp in a desperate attempt to produce some electricity. The propaganda value of this Kaprun Hauptstufe was considerable, even though the amount of power generated was negligible.

After the war the construction of the original Kaprun dams stopped. Then, in 1947, it was started up again and advanced quickly, albeit with still extremely challenging conditions.

Initially, the revised projects were led by the Americans, and the still tough working environment deployed local Austrians and added a few features like the working camp cinema, as was to try to improve morale for this second wave of the project.

Quite quickly, in 1951, the 120 metre high Limberg wall was finished and one year later the main power plant started to operate. Also, in 1950, the construction of the second Kaprun Oberstufe Dam started. Finished five years later, the two dams are connected through a 12 kilometre tunnel.

We found out most of this from a small museum in Kaprun and subsequently I noticed this Austrian movie dramatisation of the second wave of construction. Incidentally, notice the 'Sound of Music' moment in this movie (0:50-ish), ten years before the actual Sound of Music was made.

summit

I said I'd get around to posting some pictures from on the mountains. Above is my iPhone snap of the walk up - or down - with one of the numerous cablecars to the side. From the base station the first choice of cablecars are the Panorama or Gletscherjet (Glacierjet) which climb the first 1000 metres or so. Then there's a couple more to get to the 3000 metre summit.

My picture above is from the intermediate level, which already provides a pretty good panoramic view of the mountains. Then to the very top which stands at around 3000 metres. There's also about 3 metres (10 feet) of snow at this level, so the exact heights are slightly debatable.

My picture from officially 3029 metres looks down onto the glacier, where there's some signs of skiing activity. I'll put together a ski-slopes based post separately, because despite the apparent lack of people there's about 50 in the picture. You'll need to click through and magnify to see most of them although around the corner at the various cafes, restaurants and easier ski runs there's thousands more.

chiller

Another chilly day, temperatures dipping below -10C up top. So far our slightly technical clothing and layering is keeping us toasty, although the use of a sauna back at base is also quite handy.

Below is a quick late afternoon picture from half way up illustrating that the clouds are like a sandwich layer between the lower level and the peaks at the moment.

chill

We've seen quite a few of the signs saying, 'beware of the roof avalanches', although I'm wondering if we should also see some for the icicles, some of which are one a metre long.

The roof avalanche on our own balcony wasn't too bad and has since had its further light covering of snow.

I'm typing this on the balcony, but my fingers are cold from the Macbook's metal surface in -2C temperatures. Still, it's -7C up top at the moment.

Apfelstrudel

My other pictures are still in the camera, so this iPhone snap of Apfelstrudel from mid-afternoon will have to suffice until I can catch up.

I can see how it is sort of evocative of the Alps.

I accompanied it with hot chocolate with whipped cream (Heisse Schoko mit Schlag), so I can feel a little bit guilty now.

But not very. Particularly when I notice that the Austrians still have cigarette machines on street corners and ashtrays in bars.

But then, they also stage skier street races like tonight's through the shopping district.

valley view

A pretty view from the balcony here. We've travelled from Salzburg and set up in this valley surrounded by mountains. Next to explore.

Almdudler moment

Yes, we have already acquired some of that Almdudler fizzy drink, which is almost a tradition when dropping tinto Austria, yet largely unheard of in the UK.

snow report

Time for a few days in Austria, starting in Salzburg. There's some snow about, although I suspect there will be more when we get to the ski areas.

count the cages

Maybe some of the Cabinet are still protecting Theresa May, like some sort of Praetorian Guard, but the classicists will know that such situations can, of themselves, lead to demise.

The PM is off to China over the next few days, unencumbered by her Foreign Secretary, who is probably in Colebrooke Row plotting various li(n)es of succession.

We've Olly Robbins running the David Davies negotiation, whilst ruffled DD looks like he's just back from a night in the cells.

Oh yes, let the caged bird sing.

As well as no grip on colleagues, the government seems to have a limited grasp of the messaging from the EU. I don't think it is just a translation thing, but most of it gets spun to sound more positive. Mr Barnier keeps saying things about time frames which are at odds with what the Brits think. For example, would we be staying under EU legislation until 2020? Pay to stay but have no say? Only able to renegotiate trade terms after the payments and exit terms have been finalised? That's 2018 gone.

Then there's the anachronism of the Lords with around 180 peers requesting to speak and amend the exit bill on Tuesday and Wednesday. Goodness, they've had to open the Lords early (11 am) to get a full day of work in.

Meanwhile, the unscrupulous scavenger birds sit on the wires waiting their moment.