It's becoming unavoidably obvious that the current global order is unraveling. Add investor fears that we've ignored warning signs of slower growth, particularly in Europe, and that the easy-money days of quantitative easing may finally be coming to an end, and it didn't take much to send equity markets plunging last month. ... A distracted, war-weary America is no longer willing and able to provide global leadership, and no other country is stepping up to take its place. The U.S.'s international disengagement and seemingly improvised foreign policy are leaving allies, distracted by their own problems, looking to hedge their bets. Meanwhile, developing countries have become powerful enough to block U.S.-led plans but are not yet coordinated, motivated or influential enough to offer alternatives. Fast-changing China, revisionist Russia and a host of emerging markets with competing priorities and different political and economic systems leave us with too many major powers with too many divergent interests. The result is a global power vacuum - and markets are afraid of what might come next. ... We've now reached a crossroads where the outcomes of four combustible geopolitical crises could begin to reshape the global economy. Two of these crises are already reaching a critical point. The conflict between Russia and the west will rage in and around Ukraine, on Russia's borders with other neighbors, in energy markets, in financial markets, in the defense budgets of countries on both sides, in cyberspace - and anywhere else Moscow may try to undermine what remains of American global leadership. ... In the Middle East the battle with ISIS has just begun. ... Two other crises, not yet dominating headlines, are very much in play. Chinese leader Xi Jinping has his hands full with transformational economic reforms that will reshape the Chinese market and his country's global standing. But as its economic agenda comes under pressure, Beijing will look to deflect frustration and attention onto foreign companies, neighborhood adversaries or Washington. ... Second, new fissures in the U.S.-Europe alliance are taking shape. Divisions among European countries as well as global challenges that disproportionately threaten Europe are widening a structural divide between Europe and America.

Why thieves love America’s health-care system ... INVESTIGATORS in New York were looking for health-care fraud hot-spots. Agents suggested Oceana, a cluster of luxury condos in Brighton Beach. The 865-unit complex had a garage full of Porsches and Aston Martins—and 500 residents claiming Medicaid, which is meant for the poor and disabled. Though many claims had been filed legitimately, some looked iffy. Last August six residents were charged. Within weeks another 150 had stopped claiming assistance, says Robert Byrnes, one of the investigators. ... Health care is a tempting target for thieves. Medicaid doles out $415 billion a year; Medicare (a federal scheme for the elderly), nearly $600 billion. Total health spending in America is a massive $2.7 trillion, or 17% of GDP. No one knows for sure how much of that is embezzled, but in 2012 Donald Berwick, a former head of the Centres for Medicare and Medicaid Services (CMS), and Andrew Hackbarth of the RAND Corporation, estimated that fraud (and the extra rules and inspections required to fight it) added as much as $98 billion, or roughly 10%, to annual Medicare and Medicaid spending—and up to $272 billion across the entire health system.

As crisis-induced fear fades, companies take on more leverage ... Companies are increasing their borrowing for three main reasons. The most obvious is that interest rates are low, meaning a key cost, borrowed money, can be obtained cheaply. That can result in higher returns to shareholders. Moreover, rates are likely to rise, which is encouraging companies to lock in low rates while they can. ... A second driver is the resurgence of activist investors which, emboldened by a benign economic environment, are pushing firms to return to shareholders cash that had been retained for a rainy day. There are weekly announcements of one hedge fund or another pushing a company to buy back shares, as much for short-term reasons—a large buyer in the market might temporarily push up the price of a stock—as for longer-term ones. ... And then, inevitably, there is tax. Many large companies are quietly following the well-publicised example of Apple by issuing debt to fund dividends or buy-backs rather than repatriating cash held overseas that would trigger large tax payments. Aside from the quirk of holding cash abroad, debt itself offers tax benefits: interest payments are tax-deductible and push down taxable earnings.

With its flying buttresses and domed roof, the Terascale Simulation Facility at the Lawrence Livermore National Laboratory was built as a cathedral to the supercomputer. … The design may suggest some religious reverence for the all-powerful machines. More practically, though, it means they are unencumbered by supporting columns, saving space and creating a more direct route for the arteries of cables to feed and cool the world’s fastest supercomputers. But less than 10 years after being built, the building is already in danger of becoming outdated. … “When we designed this building, we thought it would be good for 50 years but already it’s only adequate and not robust,” says Mike McCoy, who leads the supercomputing effort at Lawrence Livermore as director of the Advanced Simulation and Computing programme. … Even its name risks becoming an anachronism. Terascale computing has been superseded by petascale computing – 1,000 times faster. By 2020, we will be in the exascale age – a thousand times faster again.

An historic trade pact between America and Europe needs saving … IN AN age of small-bore politics, America and the European Union have a chance to achieve something large: a transatlantic pact that would, at a stroke, liberalise a third of global trade. At a time when emerging powers are closing fast on a fretful West, a free-trade area covering America and the EU would offer something more. Done right, it could anchor a transatlantic economic model favouring openness, free markets, free peoples and the rule of law over the closed, managed visions of state capitalism. … Right now, the pact is in trouble, beset by small-mindedness and mutual suspicion. This is madness.

As positions of historical prominence go, it’s a rarefied one. Three US Presidents were murdered after Lincoln, but only one of the assassinations—John F. Kennedy’s—was followed by a similar (and much more storied) reprisal. Two days after Lee Harvey Oswald shot Kennedy in Dallas in November 1963, Jack Ruby killed Oswald with a .38 snub-nosed revolver on live television. ... Ruby was a loosely mobbed-up nightclub owner who claimed he’d done it to save Jacqueline Kennedy from having to endure the pain of a long murder trial. Corbett had a less shady but still unorthodox past—he was a hat maker with a strong religious streak who claimed God had commanded him to bring Lincoln’s killer to justice. Ruby went to prison; Corbett didn’t. ... But a peek at the pages of history—into old newspaper clippings, correspondence, and records held at the Kansas Historical Society in Topeka—reveals how much the assassins’ assassins had in common. Like Ruby, Corbett ended up vilified after his unilateral action denied the public the chance to learn the full truth about the plot to kill the President. And Corbett, too, became fodder for conspiracy theories that followed him to his own strange end.

In the days following Lee’s surrender at Appomattox Court House, word had spread that Union troops were seizing good horses. Garland had hidden Don Juan at a farm in the woods on behalf of its owners, but another freedman told the soldiers where to find it. ... For 150 years, it has been public knowledge that Custer owned Don Juan, but not how he acquired it. His many biographers have written that Union troops seized it during a wartime campaign, as they confiscated every horse in Rebel territory; that was Custer’s own explanation. Until now, the truth has remained hidden in the open, told in correspondence and affidavits archived in the library of the Little Bighorn Battlefield National Monument and the National Archives that have aroused little curiosity among those biographers. But the truth raises important questions about the man and his place in American history. ... And 16 days after Lee’s surrender, ten days after Lincoln’s death by assassination, with all fighting at an end east of the Mississippi River, George Armstrong Custer stole a horse. ... Was it greed that corrupted him? A passion for fine horseflesh—common to most Americans in 1865, but particularly intense in this cavalryman? Was it power—the fact that he could take it? As the military historian John Keegan memorably wrote, “Generalship is bad for people.” Custer was only 25, an age more commonly associated with selfishness than self-reflection, and perhaps that explains it. But the theft was not impulsive. It had required investigation, planning and henchmen. It may help explain his self-destructive actions in the months and years that followed.

Bannon is the executive chairman of Breitbart News, the crusading right-wing populist website that’s a lineal descendant of the Drudge Report (its late founder, Andrew Breitbart, spent years apprenticing with Matt Drudge) and a haven for people who think Fox News is too polite and restrained. ... He’s been a naval officer, investment banker, minor Hollywood player, and political impresario. When former Disney chief Michael Ovitz’s empire was falling to pieces, Bannon sat Ovitz down in his living room and delivered the news that he was finished. When Sarah Palin was at the height of her fame, Bannon was whispering in her ear. When Donald Trump decided to blow up the Republican presidential field, Bannon encouraged his circus-like visit to the U.S.-Mexico border. John Boehner just quit as House speaker because of the mutinous frenzy Bannon and his confederates whipped up among conservatives. Today, backed by mysterious investors and a stream of Seinfeld royalties, he sits at the nexus of what Hillary Clinton once dubbed “the vast right-wing conspiracy,” where he and his network have done more than anyone else to complicate her presidential ambitions—and they plan to do more. But this “conspiracy,” at least under Bannon, has mutated into something different from what Clinton described: It’s as eager to go after establishment Republicans such as Boehner or Jeb Bush as Democrats like Clinton.

A new arms race in our skies threatens the satellites that control everything from security to communications ... the activities of the mystery “ghost” satellite have given many in the defence and intelligence community pause for thought. ... Space, military officials like to say, is the ultimate higher ground. Since the cold war ended, however, it has been a largely uncontested territory. In January 1967, the US, UK and USSR became the first signatories to the Outer Space Treaty. In it, they committed to keeping the moon free of military testing and not putting weapons of mass destruction into orbit. China joined the pact in 1984. Another 100 states are now signed up. ... Almost every country with strategically important satellite constellations and its own launch facilities is considering how to defend — and weaponise — their extraterrestrial assets. ... Satellites are fragile things: a nudge to their orbit, a tilt of their solar panels towards the sun, a laser blast directed at their sensors or a projectile casually fired into their path are all capable of wreaking permanent, irreversible damage. ... While developed societies are becoming more dependent on it than ever before for almost every aspect of their digital economies, their grip on the technologies that have given them global strategic dominance is slipping. And as more countries around the world look to maximise their military advantages, space is becoming the most obvious domain to contest. ... The 1967 Outer Space Treaty had one glaring omission: it has no limits on the use of conventional weapons. Even as militaries around the world work hard to build their space weaponry arsenals, many are now wondering whether the treaty needs to be broadened.

When the U.S. Civil War broke out in 1861, cotton was king. The southern United States produced and exported much of the world’s cotton, England was a major textile producer, and cotton textiles were exported from England around the world. At the time, many around the world depended on cotton for their livelihood. The South believed this so deeply that when the North blocked Southern ports to cut off the South’s primary means of financing war—cotton sales—Southern leaders were sure that Britain would enter the war on their side. That never happened. So when cotton supplies dried up in late 1862, thousands in Manchester and Lancashire who either directly or indirectly depended on cotton for a living found themselves without work. In this post, we describe the British cotton famine of 1862-63 and the stoic British national response. We draw primarily from a fascinating BBC Radio broadcast on the subject and John Watts’ matter-of-factly named Facts of the Cotton Famine, published in 1866.

1. The Hollow Alliance: The trans-Atlantic partnership has been the world’s most important alliance for nearly seventy years, but it’s now weaker, and less relevant, than at any point in decades. It no longer plays a decisive role in addressing any of Europe’s top priorities. Russia’s intervention in Ukraine and the conflict in Syria will expose US-European divisions. As US and European paths diverge, there will be no more international fireman—and conflicts particularly in the Middle East will be left to rage.
2. Closed Europe: In 2016, divisions in Europe will reach a critical point as a core conflict emerges between Open Europe and Closed Europe—and a combination of inequality, refugees, terrorism, and grassroots political pressures pose an unprecedented challenge to the principles on which the new Europe was founded. Europe’s open borders will face particular pressure. The risk of Brexit is underestimated. Europe’s economics will hold together in 2016, but its broader meaning and its social fabric will not.
3. The China Footprint: Never has a country at China’s modest level of economic and political development produced such a powerful global footprint. China is the only country of scale today with a global economic strategy. The recognition in 2016 that China is both the most important and most uncertain driver of a series of global outcomes will increasingly unnerve other international players who aren’t ready for it, don’t understand or agree with Chinese priorities, and won’t know how to respond to it.
4. ISIS and “Friends”: ISIS is the world’s most powerful terrorist organization, it has attracted followers and imitators from Nigeria to the Philippines, and the international response to its rise is inadequate, misdirected, and at cross purposes. For 2016, this problem will prove unfixable, and ISIS (and other terrorist organizations) will take advantage of that. The most vulnerable states will remain those with explicit reasons for ISIS to target them (France, Russia, Turkey, Saudi Arabia, and the United States), and those with the largest numbers of unintegrated Sunni Muslims (Iraq, Lebanon, Jordan, Egypt, and across Europe).
5. Saudi Arabia: The Saudi Kingdom faces a growing risk of destabilizing discord within the royal family this year, and its increasingly isolated status will lead it to act more aggressively across the Middle East this year. The threat of intra-royal family strife is on the rise, and a scenario of open conflict, unimaginable prior to King Salman’s January 2015 ascension, has now become entirely realistic. The key source of external Saudi anxiety is Iran, soon to be free of sanctions.
6. The rise of technologists: A variety of highly influential non-state actors from the world of technology are entering the realm of politics with unprecedented assertiveness. These newly politically ambitious technologists are numerous and diverse, with profiles ranging from Silicon Valley corporations to hacker groups and retired tech philanthropists. The political rise of these actors will generate pushback from governments and citizens, generating both policy and market volatility.
7. Unpredictable Leaders: An unusually wide constellation of leaders known for their erratic behavior will make international politics exceptionally volatile this year. Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdogan are leaders of an unruly pack that includes Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman and – to a lesser but important extent – Ukraine’s Petro Poroshenko. These unpredictable leaders make our list for 2016 because their interventions overlap and conflict. One powerful, erratic leader spells trouble; four spell volatility with major international implications.
8. Brazil: President Dilma Rousseff is fighting for her political survival, and the country’s political and economic crisis is set to worsen in 2016. Contrary to hopes among pundits and many market players, the battle over Rousseff’s impeachment is unlikely to end the current political stalemate. Should the president survive, her government won’t gain the political boost necessary to move on the economic reforms needed to tackle the country’s growing fiscal deficit. If Rousseff is ousted, an administration led by Vice President Michel Temer won’t fare much better.
9. Not enough elections: Emerging markets underwent a historic cycle of national elections in 2014-2015, but this year there are relatively few opportunities for EM voters to make themselves heard at the ballot box. As slower growth and stagnating living standards stoke popular discontent, governance and stability will suffer. Historically, markets have been less volatile in non-election years, but this time will be different. By raising popular expectations, the massive income growth that most EMs enjoyed over the past 10 years has created conditions for a rude awakening.
10. Turkey: After a decisive victory for his AK party in late-2015, President Erdogan will now push to replace the country’s parliamentary system with a presidential one. He’s unlikely to reach his goal in 2016, but his aggressive electioneering will further damage an already battered Turkish business and investment climate. On the security front, there is little prospect of an imminent end to PKK violence, and unrelenting US pressure on Ankara to clamp down on the Islamic State will produce only modest results while making Turkey more vulnerable to new attacks by ISIS.
* Red Herrings: US voters aren't going to elect a president who will close the country to Muslims. China’s economy isn’t headed for a hard landing, and its politics will remain stable. Continued strong leadership from Japan's Shinzo Abe, India's Narendra Modi, and especially China's Xi Jinping will keep Asia's three most important players focused on economic reform and longer-term strategy, reducing the risk of conflict in Asia’s geopolitics.

Is it any wonder investors are questioning why they allocate to emerging markets in the first place? Even going beyond the woes of emerging, we are starting to hear some investors asking whether holding non-U.S. stocks is at all necessary. As market historians we can say that the timing of such sentiments tends to be bad – no one seems to ever decide to give up on an asset class after it has just had good performance, and the last burst of “why bother with non-U.S. stocks” occurred just before the top for the S&P 500 in 2000. But just complaining that investors got it wrong last time they voiced these sentiments does not qualify as thoughtful analysis. ... while emerging markets “deserved” some of their bad luck over the last several years and the outperformance of the U.S. has made some sense, we do not believe that emerging is a value trap, nor do we believe that the U.S. has proved itself particularly extraordinary. ... In total, we can surmise that emerging currencies are a “risk asset” of sorts and that they have delivered a return above U.S. cash over time and should probably continue to do so given the capital needs and vulnerabilities of emerging economies. ... even if the U.S. has somehow managed to unlock the secret to permanently high profits and the economy remains solid, it seems unlikely that the secret will remain an entirely U.S. phenomenon. If we imagine a world in which U.S. profitability is able to remain well above historical levels, we would expect non-U.S. companies to begin to copy their American counterparts, similar to the way profitability converged from the 1970s to the early 2000s. ... we have seen an impressive expansion of American profitability that has not been mirrored in the rest of the world, and U.S. stocks have duly outperformed. This has, not surprisingly, led investors to try to convince themselves of the inherent superiority of U.S. stocks to justify continuing to hold them. We cannot completely reject the possibility that those arguments are correct, but the evidence seems pretty thin.

No one knows for sure why some societies are more innovative than others. The United States is a highly inventive society, the source of a host of technologies -- the airplane, the atomic bomb, the Internet -- that have transformed the world. Modern China, by contrast, is frequently criticized for its widespread copying of foreign inventions and creative works. Once the home of gunpowder, printing, and other transformational inventions, China is today better known for its knockoffs of almost every imaginable product: cars, clothes, computers, fast food, movies, pharmaceuticals, even entire European villages. The United States gave the world the iPhone; China gave it the HiPhone -- a cheap facsimile of a groundbreaking American gadget. ... Some see deep cultural roots to the pervasiveness of copying in China. But a more common view is that China fails to innovate because it lacks strong and stable protections for intellectual property. ... But American anxiety and anger over Chinese piracy are misplaced. Copying is not the plague that American business leaders and politicians often make it out to be. In fact, far from always being an enemy of innovation, copying is often a critical part of creativity. Although copying has a destructive side, it also has a productive side. Nearly all creations rest on prior work, and the ability to freely copy and refine existing designs fuels fields as varied as fashion, finance, and software. Copying can also foster stronger competition, grow markets, and build brands.

Part I: I would like to examine two areas where the U.S. really does have documentable advantages. They are both incredibly important, one especially for good times with thriving capitalism and the other as a protection against possible bad times in the future that I for one fear ... In a world in which most things continue to work well, or at least well enough, the U.S. has the advantage of simply being more entrepreneurial. More of us risk starting new enterprises than do others in developed countries. ... You can even be associated with several bankruptcies and still be a strong-running candidate for President! How unlikely that would be anywhere else. And if three times more of us charge at the Internet, medical research, or social enterprises than in other countries, then we do not have to be better. ... The list of our advantages in Canamerica, as we could call it, is a very long one. First, we are uniquely defensible and difficult to attack. We are well-armed and well-organized. Less obviously, perhaps, we are more than self-sufficient in food production, energy, and mineable resources.
Part II: The positive effects of low resource prices are underestimated. The U.S. and global economies are likely to do significantly better this year than recent opinions predict. The U.S. has plenty of spare capacity to grow above its longer-term limits. The biggest risk would be China’s GDP becoming much more disappointing. ... The U.S. and global markets do not look like they are in bubble territory. They can always suffer a regular bear market (and are almost in one now). But I still believe we will have to wait longer for the BIG ONE and that global equity markets will regroup once more. ... Currently ultra-low resource prices are not sustainable, particularly those of grains and oil. Oil producers need $65/barrel and rising to finance new oil exploration. Resource prices will inevitably rise and as they do they will reduce once again the growth rates of the global economy.

The U.S. government has moved quietly and aggressively to prevent undocumented Indians from entering the United States, many of whom are Sikhs fleeing political repression or economic collapse at home. ... The number of Indian nationals caught trying to cross the southern border into the U.S. exploded suddenly in 2010, growing sixfold to 1,200 from just over 200 the year prior. ... Although the number has oscillated since then, it has remained near an all-time high. And that includes only those caught trying to cross undetected, leaving out Buta Singh and others like him — thousands, mostly young men, who walk up to a border crossing, turn themselves in, and plead asylum. The total number of Indian nationals who tried to enter the U.S. without papers, including through airports and other points of entry, also spiked in the last five years, peaking at close to 13,000 in 2013, more than double the number in 2009. ... Much of this influx, according to dozens of interviews with immigrants, experts, and current and former immigration officials, comes from young Indian men at the border, ferried there by transnational smuggling networks. Although border authorities do not track the religious or regional origins of migrants, government officials and other observers say that large numbers of the new arrivals are Sikhs from Punjab, a region in northwestern India beset by economic collapse and environmental degradation, a major drug epidemic, and decades of what human rights groups describe as political violence carried out with impunity.

You wouldn’t see it in most classrooms, you wouldn’t know it by looking at slumping national test-score averages, but a cadre of American teenagers are reaching world-class heights in math—more of them, more regularly, than ever before. The phenomenon extends well beyond the handful of hopefuls for the Math Olympiad. The students are being produced by a new pedagogical ecosystem—almost entirely extracurricular—that has developed online and in the country’s rich coastal cities and tech meccas. In these places, accelerated students are learning more and learning faster than they were 10 years ago—tackling more-complex material than many people in the advanced-math community had thought possible. ... The change is palpable at the most competitive colleges. At a time when calls for a kind of academic disarmament have begun echoing through affluent communities around the nation, a faction of students are moving in exactly the opposite direction. ... lately, dozens of new math-enrichment camps with names like MathPath, AwesomeMath, MathILy, Idea Math, sparc, Math Zoom, and Epsilon Camp have popped up, opening the gates more widely to kids who have aptitude and enthusiasm for math, but aren’t necessarily prodigies. ... In New York City last fall, it was easier to get a ticket to the hit musical Hamilton than to enroll your child in certain math circles. Some circles in the 350-student New York Math Circle program run out of New York University filled up in about five hours. ... The pedagogical strategy at the heart of the classes is loosely referred to as “problem solving,” a pedestrian term that undersells just how different this approach to math can be. The problem-solving approach has long been a staple of math education in the countries of the former Soviet Union and at elite colleges such as MIT and Cal Tech. It works like this: Instructors present small clusters of students, usually grouped by ability, with a small number of open-ended, multifaceted situations that can be solved by using different approaches.

As global warming thaws the Arctic, Russia is leading the rush to exploit the region’s resources. In late 2013, on a platform in the Pechora Sea, Gazprom became the first company to produce oil offshore in the Arctic, after jailing 30 Greenpeace protesters and confiscating their ship. On the east side of Yamal a partnership led by another Russian company, Novatek, is building a giant terminal to liquefy gas and export it to East Asia and Europe by ice-breaking tanker—though over time there may be less and less ice to break. ... Russia is not alone. More than a fifth of the world’s conventional oil and gas that has yet to be discovered lies above the Arctic Circle, according to a 2008 estimate by the U.S. Geological Survey, and the region is rich in other minerals too. ... Given the hype on both sides of the argument, what’s striking is how patchy the Arctic rush actually is. Few companies have dipped their toes into Arctic waters, and fewer still are making a profit. Last fall Royal Dutch Shell abruptly abandoned its multiyear, seven-billion-dollar effort to extract oil from the Chukchi Sea off Alaska after drilling a single unpromising hole. Record-low oil prices likely contributed to the decision. So did the astronomical costs of operating in a region where infrastructure is sparse, distances are huge, and the weather remains horrific.

Thomas Kelly, the American ambassador here, likes to say that Djibouti today feels like what Casablanca must have felt like in 1940. “All the different nationalities elbowing into each other,” he says. “All the intrigue.” ... About 4,000 soldiers and contractors live here, and they include commandos from Joint Special Operations Command, the team that undertakes the military’s most sensitive counterterrorism operations. After the 2012 attack on the diplomatic mission in Benghazi, Libya, a 150-member rapid response team was established at Camp Lemonnier, assigned to handle future threats to diplomatic personnel abroad. Djibouti is also the U.S. military’s regional hub for drones, and it sends thousands of Predators and Reapers across the region each year.

Fusion analyzed an archive containing 11.5 million internal documents from Mossack Fonseca’s files, including corporate records, financial filings, emails, and more, extending from the firm's inception in 1977 to December 2015. The documents were obtained by the German newspaper Süddeutsche Zeitung and shared with Fusion and over 100 other media outlets by the International Consortium of Investigative Journalists (ICIJ) as part of the Panama Papers investigation. The massive leak is estimated to be 100 times bigger than Wikileaks. It's believed to be the largest global investigation in history. ... The results of the yearlong investigation encompass 214,488 corporate entities – among them companies, trusts, and foundations –controlled by everyone from heads of state, politicians, Forbes-listed billionaires, to drug lords, businesses blacklisted by the US government, scammers, and FIFA officials. ... Today, he says, “Panama is essentially an extension of the U.S. economy.” It harkens back to the early 20th century, when canal workers were paid in American dollars. In the roaring, free-market friendly 1920s, Panama adopted U.S.-style corporate laws. ... The move to Central America positioned Jurgen Mossack to ride the offshore banking wave that crested in Panama (and around the world) in the 1970s, when the country adopted bank-secrecy legislation designed to attract foreign money.

Drones—or remotely piloted aircraft (RPAs), as they are known in the military—have quickly become one of the Pentagon’s tools of choice for precision surveillance and attack, and Holloman is responsible for training new pilots and sensor operators in order to meet swelling demand. This year the base will produce 818 RPA operators, more than double the number of projected F-16 trainees. All told, over 20,000 military and civilian personnel are currently assigned to the RPA program, representing nearly 5% of the Air Force's total capability. ... Base and squadron commanders say the RPA program is on track to become one of the Air Force’s largest divisions. In fact, for the first time ever, drones were responsible for more than half of the weapons dropped by the U.S. on Afghanistan last year. New recruits and pilots transferring to the drone program from other aircraft all pass through Holloman, sooner or later. ... If the pilot of popular mythology is intuitive and independent, the pilot of the RPA era must be analytical and collaborative. He (or sometimes she) must be comfortable multitasking, effective at communicating within and across teams, and capable of continually learning on the job. He or she may have a family to support, and the desire to be present at Little League games and piano recitals. ... Indeed, the daily reality for RPA pilots, as well as sensors, stands in stark contrast to the Maverick of myth. ... The new Maverick represents the future of work in a fully global world dominated by complex machines, complex communications, and fluid, remote teams.

Not only were their parents indeed Russian spies, they were Russians. The man and woman the boys knew as Mom and Dad really were their parents, but their names were not Donald Heathfield and Tracey Foley. Those were Canadians who had died long ago, as children; their identities had been stolen and adopted by the boys’ parents. ... Their real names were Andrei Bezrukov and Elena Vavilova. They were both born in the Soviet Union, had undergone training in the KGB and been dispatched abroad as part of a Soviet programme of deep-cover secret agents, known in Russia as the “illegals”. After a slow-burning career building up an ordinary North American background, the pair were now active agents for the SVR, the foreign spy agency of modern Russia and a successor to the KGB. They, along with eight other agents, had been betrayed by a Russian spy who had defected to the Americans. ... Nearly six years since the FBI raid, I meet Alex in a cafe near the Kiev railway station in Moscow. He is now officially Alexander Vavilov; his brother is Timofei Vavilov, though many of their friends still use their old surname, Foley. ... “They showed us photos of our parents in their 20s in uniform, photos of them with medals. That was the moment when I thought, ‘OK, this is real.’ Until that moment, I’d refused to believe any of it was true,” Alex says. He and Tim were taken to an apartment and told to make themselves at home; one of their minders spent the next few days showing them around Moscow; they took them to museums, even the ballet. An uncle and a cousin the brothers had no idea existed paid a visit; a grandmother also dropped by, but she spoke no English and the boys not a word of Russian.

The United States Air Force, which runs the G.P.S. Master Control Station, in Colorado, calls G.P.S. “the world’s only global utility.” Wholly owned by the U.S. government, the system is available free to everyone, everywhere; an ISIS terrorist glancing at his phone for a position fix benefits from the Pentagon’s largesse as much as a commuter on I-95. Since the first G.P.S. satellite was launched, in 1978, the system has steadily become the most powerful of its kind. (Other countries have navigation satellite networks, but none are as dependable or as widely available.) There are now around seven G.P.S. receivers on this planet for every ten people. Estimates of the system’s economic value often run into the trillions of dollars. ... The Pentagon’s Defense Advanced Research Projects Agency recently determined that, within thirty seconds of a catastrophic G.P.S. shutdown, a position reading would have a margin of error the size of Washington, D.C. After an hour, it would be Montana-sized. Drivers might miss their freeway exits, but planes would also be grounded, ships would drift off course, commuter-rail systems would be tied up, and millions of freight-train cars with G.P.S. beacons would disappear from the map. ... Fortunately, a worldwide G.P.S. failure is unlikely. A hacker or terrorist would require either a weapon powerful enough to destroy the satellites or a way to infiltrate the heavily fortified Master Control Station. The bigger worry is spoofing, the transmission of a bogus G.P.S. signal that nearby receivers mistake for the real thing.

The weapon is called a railgun and requires neither gunpowder nor explosive. It is powered by electromagnetic rails that accelerate a hardened projectile to staggering velocity—a battlefield meteorite with the power to one day transform military strategy, say supporters, and keep the U.S. ahead of advancing Russian and Chinese weaponry. ... The Navy developed the railgun as a potent offensive weapon to blow holes in enemy ships, destroy tanks and level terrorist camps. The weapon system has the attention of top Pentagon officials also interested in its potential to knock enemy missiles out of the sky more inexpensively and in greater numbers than current missile-defense systems—perhaps within a decade. ... The future challenge for the U.S. military, in broad terms, is maintaining a global reach with declining numbers of Navy ships and land forces. Growing expenses and fixed budgets make it more difficult to maintain large forces in the right places to deter aggression. ... Railgun research leans heavily on commercial advances in supercomputing to aim and on smartphone technology to steer the railgun’s projectile using the Global Positioning System.

The goal: neutralize crude oil as an economic weapon and find a way to persuade a hostile kingdom to finance America’s widening deficit with its newfound petrodollar wealth. And according to Parsky, Nixon made clear there was simply no coming back empty-handed. Failure would not only jeopardize America’s financial health but could also give the Soviet Union an opening to make further inroads into the Arab world. ... The basic framework was strikingly simple. The U.S. would buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending. ... The current tally represents just 20 percent of its $587 billion of foreign reserves, well below the two-thirds that central banks typically keep in dollar assets. Some analysts speculate the kingdom may be masking its U.S. debt holdings by accumulating Treasuries through offshore financial centers, which show up in the data of other countries. ... While oil’s collapse has deepened concern that Saudi Arabia will need to liquidate its Treasuries to raise cash, a more troubling worry has also emerged: the specter of the kingdom using its outsize position in the world’s most important debt market as a political weapon, much as it did with oil in the 1970s.

In the late 1800s, a surge in silver production made a shift toward a monetary standard based on gold and silver rather than gold alone increasingly attractive to debtors seeking relief through higher prices. The U.S. government made a tentative step in this direction with the Sherman Silver Purchase Act, an 1890 law requiring the Treasury to significantly increase its purchases of silver. Concern about the United States abandoning the gold standard, however, drove up the demand for gold, which drained the Treasury’s holdings and created strains on the financial system’s liquidity. News in April 1893 that the government was running low on gold was followed by the Panic in May and a severe depression involving widespread commercial and bank failures.