NSA Scandal, The Other Shoe

As the NSA details continue to leak, I'm looking for one in particular.  In most Western countries, the intelligence services are forbidden from spying on their own citizens.  I'm guessing, and its only a guess, that one of the many functions such services carry out is to spy on each other's citizens and exchange the information, thus avoiding the prohibition on domestic spying.  Again this is only speculation, but it would explain some of the bizarre behavior around Edward Snowden.  European governments are condemning US spying on the one hand, but embarrassingly intervened with the Bolivian President's flight home on the other.  Spain, Portugal and France covered themselves in shame over this incident.  If they are so pissed off about US spying, why would they risk serious international embarrassment over this flight?  Because there is a lot more to this story than we know now. Being seen as American lapdogs is a very poor political position, especially in France.  Possibly the incident was a result of American diplomatic pressure, but I doubt it.  Something more fundamental is going on.  Given the leaks of the last month, I think that something will come out.

Gettysburg and Stalingrad

     The Sharpshooter's Den, Alexander Gardiner, 1863

    Stalingrad Attack, Georgie Zelma, 1942

    The most iconic images of the two battles.  Both staged.


Though vastly different in time, place and circumstance, the battles of Gettysburg and Stalingrad share some interesting similarities.

Both were the culmination of invasions gone wrong.  Both marked the strategic high water mark for their respective nations.  Both were attacks by smaller, more powerful forces against larger armies, more poorly organized and led.

Although neither battle was decisive, in the sense of deciding the war, both represented a change in momentum that lasted the duration of the contest.

The preceding campaigns had ended in disaster for the battle's defenders, Case Blue in summer 1942 had cleared Southern Russia and cleared the way to the Caucasus, Chancellorsville in May 1863 was the Army of the Potomac's worst defeat.

These previous defeats set the psychological tone for the battles, leading to fatal overconfidence in the invaders.  Lee had come to feel (IMHO), that his boys could defeat the North on any field at any time.  The German high command, from Hitler on down, were certain the Red Army was on their last legs.  Both were looking for a chance to pin the enemy in order to crush them.  As a result, neither battle was planned in advance by either side.

The other notable psychological issue was that the attacker's overconfidence led them to discount the ability of the defending soldiers to withstand their assaults. They became contests between the high commands of one side, and the regular soldiers of the other.  In both cases, the soldiers stood their ground and won.

On a tactical level, both attacking armies gave up inherent tactical advantages to press the assaults.  This changed the nature of the combat, allowing the defenders to at least partially offset the attacker's superior mobility and firepower.  The assaults themselves were numerous, and the failure of each to finish off the defenders was taken by commanders to indicate the defenders were weakened enough for the next assault to work.  In neither case did the attacking commanders take a step back and contemplate alternative approaches despite the stated objections of their colleagues (most notably Longstreet,  and von Richthofen).

But these parallels only go so far. Gettysburg was all Lee, Stalingrad was all Hitler.  At Stalingrad, the German side had better equipment and an air force.  At Gettysburg, the Army of the Potomac was better equipped, and had a cavalry.  Lee's object was to capture Washington destroy the Army of the Potomac and force a political collapse, ending the war.  Hitler's object was to acquire the Soviet Union's main oil reserves to prolong the war.

Meade was unsuited and unable to deliver a strategic counter-stroke.  Had I Lee's army on the run, I would have been careful too.  The Soviets, on the other hand, delivered a devastating counter-stroke, led by Vasilievsky.  The Army of Northern Virginia got away.  The German Sixth Army was destroyed. 

Yap

Madness is . . . an affliction which in war carries with it the advantage of SURPRISE.
Winston Churchill on the Ardennes Counter-Offensive, December 1944

Stalingrad Map Project

Here is another map of the Battle of Stalingrad.  It shows dispositions on a divisional basis on November 18, 1942, the day before Operation Uranus.

I can't find a definitive document showing the Orders of Battle or unit locations.  This map is interpretive, synthesizing  information from the sources below. A spreadsheet with my complete Order of Battle is here.  SVG version of the file is available here.

Sources:

Books and Articles

Author	Title	Notes
Alexei V. Isaev	Stalingrad The Volga no land for us	Soviet forces and tanks
Antony Beevor	Stalingrad, The Fateful Siege	Most widely cited Order   of Battle
Wikipedia	Red Army order of battle at the Battle of Stalingrad	Useful
Wikipedia	Axis order of battle at the Battle of Stalingrad	Not particularly useful
Staldata	Staldata.com	Axis and Soviet Orders of Battle & force strength
Wolf Höpper	Against the Flood - Operation Uranus (I)	German tank numbers
Joel S. A. Hayward	Stopped At Stalingrad: The Luftwaffe And Hitler's Defeat In The East 1942-1943	Bases used for Airlift
Akhil Kadidal	Stalingrad Pocket	Really good maps and annotated photographs

Maps

Title	Source	Notes
OKH Situation Map Nov 18 42	WW2 Photos Maps	Axis forces locations   Fantastic Site! Jpg is here.
OKH Situation Map Nov 18 42 2	WW2 Photos Maps	Axis forces locations   Fantastic Site! Jpg is here.
S4231 Summary of combat operations in Stalingrad	Armchair General/RIIAWW2	Red Army locations  Excellent map
S4239 Operations in Stalingrad area	Armchair General/RIIAWW2	Red Army locations
S4251 Combat operations of the South-Western, Don and Stalingrad Fronts	Armchair General/RIIAWW2	Red Army locations

Notes:

• There are more units listed in the Order of Battle than appear on the map.  I didn't place any unit on the map unless I could find it in one of the source maps.
• In conflicts between locations on the OKH map and the Soviet maps, I used the Soviet map.   The Germans had not picked up the Uranus build-up, so the Soviets had much better intelligence at this time.
• I could find no information on the strength of the 8th Italian Army, or Soviet 6th and 3rd Guards Armies.
• Unit lines are thicker or thinner based on strength and density.  These are characterizations, not precise measurements. 
• Unit strengths are shown in the layers in the SVG version of the map.  These are based on the Order of Battle spreadsheet linked above.  The spreadsheet includes notes on the units shown on the map.
• The base map is derived from the OKH maps.  I do not know the map projection.
• Please feel free to comment on any inaccuracies!  You can help to make the map better.  I'm particularly interested in proper place-names.
• The license is Creative Commons, share alike, attribution, non-commercial.  You can do anything you like with the image except use it to make money, claim property rights over your derivative images, or not provide attribution.  I encourage anyone to use or change the map.  I do not consider classroom use commercial.  Like all my images, anyone who would like to use the image for commercial purposes should contact me and I can give you a custom license at a reasonable rate.

WW2

 
Stalin and Ribbentrop shake hands after the signing of the Molotov - Ribbentrop Pact with the scary looking Shaposhnikov laughing it up in the background, Moscow, August 23, 1939.

Stalin died 60 years ago today.  He had a stroke in the night, and lay in a pool of urine on the cold floor of his dacha for hours until he was dead.  Beria made sure nobody went in to help him until it was too late.  Not that I'm expressing sympathy.  The world became a better place when he died.  My thoughts about Stalin in a previous article.

This is a revealing photograph, a rare instance of Stalin letting his guard down.  It shows a greedy wolf contemplating a huge meal.   In this case, the meal was Stalin's favorite: Poland.  Significantly, the photo exists because it was taken by a German photographer brought along to the signing by Ribbentrop.  A Soviet photographer would have destroyed the negative rather than risk showing the great leader in an unflattering light.

There is a continuing debate in Russia about what to think of Stalin.  Some praise him for his wartime leadership.  Others condemn him because of his ruthless terror.  Both are right, though I think his crimes far outweigh his achievements. He was, however, the essential man in World War II.  Had he lost his nerve in the summer and fall of 1941, the Germans would have won the war.

Edits for clarity. 

Update:
Stalin did actually lose his nerve in July.  As the enormity of his errors became clear to him, he left the Kremlin and hid out at his dacha for two weeks.  When a delegation came to ask him to return, he thought they had come to arrest him.  But he did go back to work, and by the end of July or early August, his nerve returned.  It never wavered again.

Also, looking at the photo, it occurs to me that Stalin is looking at Poland, and Ribbentrop is thinking, "You took the bait.  We will destroy you."

WW2

    Photo by Georgi Velma T-34, Stalingrad February 1943.  That's the Univermag on the left.

The battle of Stalingrad ended 70 years ago today.  70ish years before that was the Paris Commune.  70ish years before that, Nelson was famously disobedient at Copenhagen.

Stalingrad Map

      click image for big

Here is a data visualization showing Soviet and Axis deployments on November 18, 1942.  It illustrates the German Sixth Army's focus on the the city of Stalingrad, and the Soviet build-up on the more weakly held flanks south and west of the city.  The next day, the Soviets attacked with complete surprise.  From that day, it was downhill almost all the way to Berlin.  Thus November 18, 1942 was the high water mark for the Third Reich.

UGH!  The way the image is saved here makes it unreadable.  For a better version, I've uploaded it to Flickr.  Click on the image to go there.

WW2

 A German assault team advancing in the factory district of Stalingrad, early November 1942.

These men seem to have been resting in the slight draw on the left.  They are now getting up to move forward.  To my eye, they look like they are in an area where they can expect enemy fire, but haven't got any yet.  Its usually easy to tell staged pictures from real pictures by the men themselves.  These guys aren't posing.  They are paying attention to what they are doing rather than the photographer and are spaced out for fighting, not bunched for a photo.

At full size you can see these men are dirty and tired.  The Sixth Army had been fighting in Stalingrad for 2 1/2 months and were hopeful that one final push against the factory district would do the job.  It didn't.  Things were bad at this point, but they were about to become far worse.  Few if any in this picture would see Germany again.

Note the man running on the right is holding an MG 36.  The two on the left are carrying the tripod and ammo.  The guy in the center is carrying a Mauser 98. In the background you can see more Mausers and no automatic weapons are evident.

Meme Watch

WW2

This photo is titled "German tanks cross the Don".  I'm not sure, the Don is wider than this river.  That said, its not far off.  This appears to be SW Russia near the Don bend in the summer of 1942.  At that point, it looked like the German gamble to attack in the South was paying off.  The idea was to smash the Red Army in the South and take the Russian oil fields in the Caucasus.  Hitler had insisted on an offensive aimed at the oil supply, both because Germany was desperate for oil, and to deny it to the Russians.

By mid-August, the Wehrmacht was advancing up to 20 miles per day with the Red Army in disarray.  The overall commander of the operation, von Manstein, sensed an opportunity to deal a knock-out blow to the Red Army.  When the Russian defense stiffened on the West bank of the Volga, von Manstein saw his chance.  He set the German 6th Army to finish the job by taking an industrial city on the Volga called Stalingrad. 

Like Lee at Gettysburg, von Manstein had lost respect for his opponents and thought they would collapse if he could just hit them hard enough. 

WW2

 

Hitler's moment of greatest triumph, July 6, 1940.  France has surrendered and Hitler has achieved in less than two months what Germany could not accomplish in the 4 years of WW1. In this photo he is basking in the total adoration of an entire nation.  Had he stopped there, he would have been considered one of Germany's greatest leaders.  But as Ian Kershaw observed, he couldn't stop there.  Hitler was a gambler and he would continue making bigger and bigger bets until he lost. 

Here is Harry Truman passing the same spot in May 1945.  Truman is in the dark suit, Byrnes and Leahy are riding with him.  There's a big version at the Truman library here.  The gaggle suggests they stopped here for the photo.

 

Crash of The Valkyries

  Tom Cruise working hard at acting tough.

Its possible that Tom Cruise's new movie Valkyrie will be good, but I doubt it.  It has the stink of movies that fail before they even get started.  A vanity star vehicle, numerous re-writes, shooting troubles, re-shoots, delays in release, then finally a release date guaranteed to kill attendance.  Who wants to go to a film about a failed plot to assassinate Adolf Hitler on December 26?

I don't know why the movie was made in the first place.  Von Stauffenberg's coup was a keystone cops affair.  Poorly conceived and incompetently executed, it failed on every level.  Most importantly, the one absolutely key necessity, killing Hitler, was fumbled by Von Stauffenberg himself, twice.  Had Von Stauffenberg used all the explosives (which would have fit in the briefcase), he would have killed Hitler.  Had he set the bomb off himself, he would have killed Hitler.  But no.  Von Stauffenberg used half the available explosives, and fled the premises. Someone still at the meeting unknowingly moved the briefcase into a place where the bomb's damage was minimized.  Von Stauffenberg then took off for Berlin having failed to ascertain if Hitler was dead or not.  Incommunicado for several hours on a plane, his confederates could not communicate with him or coordinate the next steps.  But the wires from East Prussia started burning up right away with a very angry Hitler.  What hope the coup might have had faded before Von Stauffenberg arrived back in Berlin.  He was shot later that night.  Von Stauffenberg was that rare man, someone willing to bravely die for their country, singularly placed to have that sacrifice mean something, and then throwing that opportunity away through agonizing stupidity.

Von Stauffenberg is revered in German history.  This is because there were precious few examples of anti-Nazi activities through the entire war.  Not that the coup would have made much difference.  They were hoping that by deposing Hitler, they could induce the Americans and British to join them fighting the Soviets.  The chances of that happening were zero, as any reasonably bright 12 year old could have told them.

In truth, Von Stauffenberg's idiotic blundering removed any possibility of the war ending in 1944.  Just as both East and West fronts gave way and the Army was retreating in disarray, there would have been an opportunity for the military to topple Hitler.  Any combination of a dead Hitler and a conflicted, retreating Army would have arguably precipitated a general collapse of German resistance.   Instead of plotting, however, senior Army commanders were scurrying to hide from SS squads armed with piano wire and meathooks, bent on smoking out all the traitors responsible for the attempted coup.

Once you are aware of the story, its hard to believe anyone outside Germany thought it was worth a movie.  No matter what way you tell it, its a story of failure, missed opportunity and nasty revenge.  I'm predicting this is not a formula for holiday box-office success.  This is a movie that should never have been made.

The Mother of Short Squeezes

Last week, the German stock market was roiled due to a clever ploy by Porsche. They engineered the biggest short squeeze in history, and may have used it to purchase a majority stake in Volkswagen at a dramatic discount.

Short selling is a techique for exploiting the stock market to conjure money from nothing. If I believe a stock, say General Motors, is going to decline, I can borrow some GM shares and sell them. Some weeks or months later, I go onto the market and buy enough GM shares to pay back the person I borrowed from. If GM is selling at $10 today, but goes down to $9 when I buy shares to pay back, I get to keep the $1. My total investment = $0, my profit = $1 minus whatever pennies I paid to "rent" the stocks. Why would anyone lend out their stocks in this way? Because if my neighbour owns GM stock and does not plan to sell, then a few pennies per share for lending them out is gravy.

There are three problems with short selling. The first is that if the price goes up rather than down, you are out the difference. If GM goes from $10 to $15, I will lose $5 per share. Because a stock can go up to infinity, my potenital liability is also infinte. For this reason alone, lots of people stay away from short selling. The other problem is that an event can force reconciliation. For example, if a large portion of the target company is bought or sold, if the company has a major revenue event, if the company initiates a large stock buy-back or if a serious issue with the wider market causes stock regulators to change the rules. When an external event causes short sellers to all have to repay the borrowed shares at the same time, you get artificial demand for the stock and the price goes up. This is a short squeeze, and the short sellers lose their shirts because they have to buy no matter what the price.

The third thing wrong with short selling is that it is very unpopular. Short sellers are the scavengers of the financial world. The CEOs of companys targeted by short sellers hate them with a passion. The practice seems to embody everything that is wrong with financial markets. Profiting off the misery of others, making money out of thin air, complex games of music chairs where normal rules don't seem to apply. Short sellers trade in bad news and rumour, doing anything legal (and sometimes not legal) to poison a company's reputation. The only reason they are tolerated by regulators is that they perform an essential function. Short sellers help to keep the market honest and companies in line. Any bit of bad news a company holds back becomes a potential opportunity for short sellers. Nowhere are short sellers more disliked than Germany. Germany is all about making and selling things, they don't like speculators for historical and cultural reasons. They especially don't like foreign speculators in the form of hedge funds.

All of this sets up Porsche's power play. They already owned 42.6% of Volkswagen. How a tiny sport-car company was able to buy 42.6% of the world's third largest car company is another story. Last Sunday, Porsche dropped a bombshell. They announced that via complex derivatives deals, they had secretly aqcuired another 31.5% of the company. Porsche's total stake was now 74.1%. The government of Lower Saxony owns 20.1%, so the outstanding public shares dropped to just under 5.8%. Volkswagen had been a popular short among international hedge funds and short sellers. The total number of stocks shorted amounted to 13% of the total stock. That means some of the people who lent stocks to short sellers had secretly pledged them to Porsche via derivatives. When Porsche announced the news, all the short sellers had to liquidate their positions. Since 13% is a lot bigger than 5.8%, there were a lot more buyers than sellers. The price of Volkswaqen share went from €210 on Friday to €1,000 on Monday.  The biggest short squeeze in history.

Presumably, some of the people that held the outstanding 5.8% of the shares held on to them. So where did all the shares come from that were sold to liquidate the short's positions? Probably from Porsche. They sold shares into the short squeeze and then bought them back later when the bloodbath was over. Porsche should have paid about about €14.8 billion for the 31% stake. If they did sell into the short squeeze, they may have netted out at closer to €5 billion, with the short sellers inadvertently providing the rest. NOTE: Porsche's profit from the short squeeze is my speculation.

In North America or Britain, Porsche's secret accumulation would have been illegal. But it has been done before in Germany. Porsche's interest in buying more of VW is well known, and they have been uncharacteristically quiet about it for months. The short sellers knew, or should have known, that they were playing with fire. Although Porsche's actions are very close to the legal borderline, and possibly over, nobody in Berlin is in a mood to do anything about it. A senior German politican's reaction was to call the short-sellers "locusts". It seems that much of the German financial community was involved, at least passively, in a sting designed to hurt primarily foreign speculators and profit German industry.

WW2: Hitler

    Angry Young Man - Adolf Hitler, 1920

There is a simmering controversy over how to think about Hitler.  When I was growing up, Hitler was a caricature, a bogyman to scare kids.  He was considered a unique phenomenon, an evil genius.  A freak of nature like a rogue wave.  Fundamentally unexplainable.  This notion has changed.  In the English speaking world, the change was due primarily to Ian Kershaw's brilliant biography.  Kershaw's breakthrough was to strip the myths that had built up around Hitler and go to the extensive record of what he said and did.  Obvious, one might think, but the accretions of propaganda that grew up before during and after the war had made this impossible before.  During the Cold War, he remained a powerful political totem.  Kershaw turned Hitler into a comprehensible human being.  For me at least, it was the first time I was able to see Hitler in the company of other ambitious men who exploited troubled times.  People like Caesar and Napoleon.  This humanization is crucial to understanding what happened.  The "Hitler was a freak of nature" hypothesis presents no defense against another Hitler.  Understanding exactly what happened and why is the only way to keep it from happening again.

So here is a photograph of Hitler in 1919 or 1920 at the age of 30.  As one can see, he is fully formed.  There is a transformation from the pre-war artist would-be intellectual, and the wartime easy-going army comrade.  That transformation, from the summer of 1918 to the fall of 1919 formed the Hitler of history.  Although the photo is often dated as 1919, I think it is probably from the spring of 1920 when he left the Army and became a full-time political agitator.  His ideas didn't set in stone until his release from prison in 1925 after the failed beer-hall putsch.  But the essential outlines were already there by the time of this photo.  They evolved until 1925, but didn't change.  After 1925, he hardly changed his mind about anything.

The man in this photo is palpably hungry and vulnerable.  He wants much, but hasn't got any of it yet.  This was a time of great uncertainty for Hitler.  He was lucky to keep an Army job after the war, especially as he was a foreigner.  This new political career was risky.  But he had discovered his gift.  He could move a crowd.  That, and his hunger for success, were enough to start.

Despite the obvious posing as a man of gravitas, the anger is genuine.  "I am not," he seems to say, "a man to be trifled with."  But he isn't quite there yet.  I see a man who wants to be taken seriously, and has the idea about how to do it, but doesn't yet have the skill to pull it off.  That skill would come in the very rough and tumble political world of Munich in the early '20s.  It took until 1930 before he had the skills for national politics, and by that time, his chance had come.

I think a lot about Hitler and the Nazis.  Where they came from, how they grew, their tactics, stratagems and of course, their war.  Their ideas were complete nonsense, of course.  You can't learn anything from them.  That makes it easier to study what happened.  There's no distracting ideology.  The Nazis were all about getting, keeping and using power.  Communism, by comparison, actually had a coherent philosophy and ideas you could discuss.  Things didn't work out very well, but the ideas were real.  National Socialism had no discussion.  There were no branches, offshoots, or forks.  There was no Trotsky.  There was only Hitler, and his word was law.  In this photo, you can see that man emerge for the first time.