Aftershocks

Richard Herring pointed to 1998 as the start of the real-estate bubble in the United States.

Until about 1998, you were making about as much on your house as on your treasury bill, as if you have invested in treasury bills. The appreciation started just about as interest rates went down... But it led to a circumstance where most of the people doing the business had not in their lifetime experienced a downturn in house prices.

And that in turn led to one of the unreasonable assumptions which underpinned the subprime crisis. It's also worth recalling the origins of the recession that began in 1998. Nouriel Roubini states it succinctly:

During the Asian crisis the yen weakened all the way to 147 to the US dollar by late August 1998; and the BoJ reduced its policy rate to 0.25% ... Then in August 1998 Russia defaulted ... and this default triggered a seizure of global financial markets as major players with levered position started to get margin calls, had to dump their assets to cover their margin calls and started to cover their yen carry trade shorts. LTCM then was hit by this liquidity seizure and avoided a near default in late September 1998 via a private sector bailout coordinated by the NY Fed.

The current liquidity crisis is to some degree an aftershock, an unintended consequence of the response to the 1997 Asian Financial Crisis and 1998 Russian financial crisis.

Make money, not war

Back in February, it was reported that Chinese aimed to send tens of millions of workers to Africa.

An estimated 750,000 mainly rural poor have moved there ... working on projects to build railways, construct electricity grids and even farm the land.
... officials want more of China's surplus rural population of tens of millions of people to follow them, saying they will earn money and help the continent to develop.

Obviously, this measure is aimed at tackling rural unemployment. However, this policy is more intriguing once one considers that these workers being sent abroad are more likely to be male than not. This may be another strategy for tackling the gender imbalance: exporting young males abroad so they won't make trouble on the home front, thus defusing the threat posed to political stability by the youth bulge. According to a report last year:

China will have 30 million more men of marriageable age than women in less than 15 years as a gender imbalance resulting in part from the country's tough one-child policy becomes more pronounced, state media reported Friday.

The numbers line up pretty well for order of magnitude.

The Pentagon and the Poisson distribution

In "Statistics of Deadly Quarrels", Richardson plotted the magnitude of conflicts (by death toll) and ended up with a statistical curve that was near a Poisson distribution. Assuming this trend continues, what should this mean for Pentagon planning? From a review of Richardson's book:

It's no surprise that the two World Wars of the 20th century are at the top of this list; they are the only magnitude-7 conflicts in human history. ... the remainder of the 315 recorded wars, along with all the thousands of quarrels of intermediate size, produced less than a fourth of all the deaths.
The list of magnitude-6 wars also yields surprises, although of a different kind. Richardson identified seven of these conflicts, the smallest causing half a million deaths and the largest about 2 million...

While planning for the Big One is traditional, the statistics imply that we should also expect a larger number of Smaller Ones that may require US-led intervention, and an even greater number of lower-intensity conflicts which may tie up significant resources due to sheer quantity. Iraq is likely not an exceptional case, but merely a conflict further down the curve.