Junk Bonds Wobbly Gyros, and Marriage Bonds July 30, 2001February 20, 2017 JUNK BONDS Bob Price: ‘I guess we can forgive your 88 year old friend for not understanding how bonds work when apparently American Express doesn’t either. Sigh.‘ ☞ For those who skip the Business headlines, Amex wrote down its bond portfolio by yet another $400 million, explaining that it hadn’t understood the risks it was taking. Ouch. WOBBLY GYROS In acknowledging my misuse of the phrase ‘begs the question’ last week, I lamely explained, ‘You’re right. My gyro was wobbly. I’ve gone back and fixed it.’ Chris Williams: ‘Technical tidbit. Gyros don’t wobble anymore. Gyros are now made from lasers and fiber optic tubes formed into rings. The standard is now RLG, Ring Laser Gyro. [Ah, yes. But my gyro was built in 1947, and it definitely wobbles.] A laser is pointed into the fiber optic ring and a sensor is placed at the other end. The sensor is so accurate is can tell if the light coming into it changes its ‘phase.’ ‘Phase of a light signal is . . . well, visualize a sinusoid. You know, like a wave on the ocean. Up and down and back up. Each position on the sinusoid is a position of ‘phase.’ A change of phase means you are at a different point on the sinusoid. ‘If the laser is pointed into the tube, illuminated continuously, and the entire assembly is torqued (twisted) around the axis of the ring, a phase change will occur in the sinusoid. The light has either farther or less far to travel than it did when it left the laser and the twist wasn’t in progress. The sensor can detect this, and measure the amount of twist, and command something to twist it back to the original position. Note this twist measurement was all mechanical gyros ever did, and they would slow down due to friction over time and lose accuracy. RLGs don’t. Who makes ’em? Litton (Northrup Grumman) and Honeywell.’ ☞ Sure, sure, but doesn’t that beg the original question? What was the original question? MARRIAGE BONDS From the op-ed page of the Wall Street Journal comes this conservative’s view of gay marriage. Tomorrow: Exercising Your Stock Options