Links 8/17/10

Sorry for thin links, was in DC being propagandized by Treasury again, and the travel and meeting time means less bandwidth for blogging. Will give you a report in the next day or so.

Massive coral mortality following bleaching in Indonesia PhysOrg

Why Russians Don’t Get Depressed Wired (hat tip Paul Kedrosky)

Bacteria ‘have a sense of smell‘ BBC

Homebuyer Demand All But a ‘Standstill’: Altos Research Housing Wire

Killer Trade Deficits Paul Krugman

In Lehman’s Demise, an Elusive Search for Culprits New York Times. This sounds like desperation on behalf of Lehman’s estate. This blog broke a “rumor” very much like the one described in the complaint, which came from a former Lehman MD and was shorty confirmed in its major details by Bloomberg.

The Decline: Unemployment by County American Observer (hat tip reader John M). An interactive graphic.

Antidote du jour:

Picture 24

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57 comments

  1. ds

    re: homebuyer demand all but a standstill. “The average national house price was $474,946 in July.” $475,000? Where do they get this?

  2. attempter

    Re ruminative Russians:

    On the one hand it’s refreshing to see an article in the MSM which says thinking isn’t so bad after all. It’s not correlated with depression? So maybe it’s not a form of mental illness after all, the way the system usually tries to “diagnose” for anyone who actually thinks. On the other hand it’s those drunken commie Russians. (The author helpfully points out their alleged predilection for vodka.)

    On a related note, Orlov and others with personal experience of both cultures say that non-elite people in the USSR were far less prone to believe their elites’ hype than non-elite Americans are.

    So there too it looks like actually thinking is a pretty good thing to do.

    1. Bates

      As Orlov points out the school system in the USSR taught in 12 years what takes 16 (1-12+4years of college) years to accomplish in the US.

      After several generations watched 5 year plans fail to meet goals is it any wonder that Russians became cynical?

      Orlov also points out that ‘we pretended to work, they pretended to pay us’.

      People in the US that expect central planning to meet with more success here than it did in Russia are probably the same people that claim ‘This Time It’s Different’.

      In the meantime we can all watch as China models itself as a hybrid communist/capitalist economy with a large manufacturing sector employed in razor wire ringed sweat shops and weigh the results against the US propensity to become a…ummm,_________…you fill in the definition of what the US is morphing into. Whatever IT is becoming, IT seems dependent upon selling ever more treasury issues, building ever more military installations around the world, importing ever more from abroad on credit, and IT is watching, stupified, as the centrally planned housing sector continues to crash and burn.

      P.S. Yves…your antidote du jour yesterday of the Polar Bears frolicking on beach with ice floes in background was spectacular! Thanks!

      1. doom

        One of the things that makes Matt Taibbi so incisive is that he steeped himself in Russian culture. So when the US turned into a brutal, collapsing kleptocracy suffocating in malinvestment, he had seen it all before and could highlight it.

        1. Robin Z.

          This is ture about Matt Taibbi. Did you know that we have an occasional commenter here, “charcad”, who was with Matt in Russia in the 90’s? He writes some very interesting posts…..

          1. doom

            I’ll hsve to read his stuff more closely. Surfing the collapse of COMECON is a formative experience providing valuable life skills. Thing is, those skills didn’t use to be so very handy here at home.

          2. NOTaREALmerican

            Very true.

            You your society has reached socialist paradise when “living well” mean you are either running a scam or participating in one.

            We’re there. The last scam going is the Federal government – and those things it deems TBTF.

            (Disclaimer: Works for a Zombie pimping loans to unemployed young people).

    2. aet

      “Alleged”?
      As to their dis-trust of Officialdom, the Russians were lied to by their leaders, systematically and cynically, for over seventy years.
      They were not only told by the opponents of the Leaders that they were lied to: they felt it and lived it: their life-experiences confirmed it.
      And with experience, comes knowledge.

      1. aet

        Hypocrisy of leadership is not confined to any one part of the political spectrum; and it is of a very ancient vintage.

        1. aet

          Along with “The Overcoat”, I recommend Gogol’s “Dead Souls”, which describes some Czarist-era upper-class shenanigans, in a very droll manner.

          1. aet

            I think that the long winter season might be the reason why Russians – and I think we Canadians too – can brood with the best of them.
            I recommend the works of Sibelius, the Finnish composer, as good music to listen to, as you brood away a long winter’s night.

      2. attempter

        As to their dis-trust of Officialdom, the Russians were lied to by their leaders, systematically and cynically, for over seventy years.
        They were not only told by the opponents of the Leaders that they were lied to: they felt it and lived it: their life-experiences confirmed it.
        And with experience, comes knowledge.

        IOW, Americans, having had the same experience, should have the same knowledge.

        (As I said in the other thread, I think they’re finally waking up.)

        1. aet

          I refrain from expressing any opinion specifically about Americans.
          That being said,to discover that one has been lied to by people one has trusted is always painful.
          The danger is that people in pain do not always act reasonably, or without rashness.

        2. NOTaREALmerican

          Re: I think they’re finally waking up

          I suspect, however, that they will – like dumbass peasants throughout history – turn on each other.

          If the Tea Party dopes are any guide, they haven’t got a clue as to who is “doing the lying” (other than “those people”, of course).

          The real problem is a huge percentage of the human population needs a fascist Red Team Party and a socialist Blue Team Party. Their brains are “wired” for authority worship and only these two political organizations (systems) provide the necessary political structure their brains need to create the stories of heroic national greatness. If the Red & Blue teams didn’t exist they’d be spontaneously created in the brains of a majority of the humans (like the Deities).

          Gotta have that big group greatness or nothing makes sense to them. Go team!

  3. KFritz

    Irony alert. It looks as though unemployment is lowest in areas of the Midwest and West very likely to vote Republican, w/ the exception of Washington DC and New Mexico.

    Is this correct?

    1. Scott

      This has less to do with political affiliation and much more to do with the extreme fiscally conservative nature of midwestern culture. Much different mentality there than on both coasts in terms of spending.

      1. KFritz

        I think it also had to do with the economic basis of the area, and distance from and lack of a real estate bubble.
        Think agriculture and natural resource extraction, especially gas and oil.

        That aside, don’t you think that it IS ironic, given that right wing, Republican ideas did a lot to get us into this mess, that one of the most Republican sections of the country is spared the worst of the downturn?

        1. aet

          How much of that red-state employment is defense spending financed by taxes on the urbanized blue states?

          1. KFritz

            If you look @ the map, geographically the best states are Mountain, Upper Midwest, and Mexico. Some of the best areas in Texas do seem to be near military bases, but I don’t think military spending correlates well w/ the map.

  4. dearieme

    “While rumination makes Americans depressed, it actually seems to provide an emotional buffer for Russians.
    What explains these cultural differences?”

    It’s because Americans are bonkers. It comes from too much TV. And the excessive dentistry of course.

        1. MyLessThanPrimeBeef

          That’s why, I guess, people living near an eruption volcano can be so full of hot air.

    1. Dirk

      Is perhaps because Russians are much more experienced at brooding than Americans? This difference the article cites would appear to be learned behavior, a coping mechanism. Americans (on average of course) just don’t know how to brood properly, but they can learn. On the other hand, if they can cope so well, why do Russian men drink so much?

      Thanks for the link. I wish there were a way to drop a dollar in the slot (at the place that published them) for articles I thought were good.

      1. aet

        But they have always, throughout history, enjoyed drinking.
        “But drink is the joy if the Rus!” claimed their leader, as he chose Orthodox Christianity for his people, rather than the abstemiousness of Islam.

        “The Primary Chronicle reports that in the year 987, as the result of a consultation with his boyars, Vladimir sent envoys to study the religions of the various neighboring nations whose representatives had been urging him to embrace their respective faiths. The result is amusingly described in the following apocryphal anecdote. Of the Muslim Bulgarians of the Volga the envoys reported there is no gladness among them; only sorrow and a great stench. They also said that their religion was undesirable due to its taboo against alcoholic beverages and pork[citation needed]; supposedly, Vladimir said on that occasion: “Drinking is the joy of the Rus’.”

        From:http://en.wikipedia.org/wiki/Christianization_of_Kievan_Rus%27

        They need a cite: I’ll give “The Cambridge medeival history”, from which I recall this anecdote, but I can’t recall chapter & verse:

        http://www.cambridge.org/series/sSeries.asp?code=ncme

    2. NOTaREALmerican

      Naaa. Not bonkers. Our culture is based on perpetual optimism. Didn’t yer mom ever tell ya: If you can’t say anything nice don’t say anything at all.

      Nice is optimism. Everybody being above average is optimism.

      Questioning authority is anti-optimism. IMO, this is the primary cause for our undemocratic institutions in America. Americans themselves are extremely uncomfortable questioning the mythology and history (the authority) of “this great and glorious nation”. (Look, if you can’t say anything nice, just keep your mouth shut. Or, put another way: Love it or leave it hippy! And get a god-damn haircut!).

      Optimism is what is required to survive and prosper in corporate American too. All you’ve got to remember is: Never question policy (the rules); be perpetually optimistic (mental flare); and be sociable (play well with other).

      America: a nation of children.

      1. aet

        The attitude which we adopt towards the future is within our choice, as an inch ahead is darkness,as the japanese say.
        Why NOT be optimistic about the future? Or is that attitude to be reserved for only those occasions where one is cewrtain that things cannot get worse? For that moment of certainty shall never come, you know: and thus, one is condemned to pessimism.

          1. aet

            The future is unwritten: and optimism and pessimism are directed exclusively towards futurity.
            Reality is independent of our attitude.

          2. NOTaREALmerican

            Real istic then.

            Is the half-full glass emptying or filling?

            (Dude… Like, it’s totally filling, dude. What else could it be, dude? The glass always fills, dude, this is America, always has always will. Dude, like totally… emptying glasses are for euro pussies dude. dude, totally, dude. We’re the best because our glass is filling dude. Dude, that’s so totally right, dude.)

            Perception IS reality. (Totally).

        1. Anonymous Jones

          One is neither condemned nor forced to choose one or the other. Optimism/pessimism is a convenient dichotomy, but like most all others, a false one. I know my life will end in death, and as such, I know all my goals are ultimately meaningless; yet I strive for these goals every day and enjoy myself immensely while doing so. Is this seemingly inconsistent approach to life optimistic or pessimistic? And does it ultimately matter how we label it? I’d argue that it only matters that we acknowledge the limitations of labels and the limitations of language in general.

        2. aet

          Perception is reality?
          There’s a propagandists view, if I’ve ever heard one.

          So things farther away are actually smaller than identical objects at a nearer distance?

          I don’t want you flying my airplane.

  5. Justin Weleski

    Yves,

    You should give a heads up to those of us in DC next time you come around. I can never make it to one of your meet-ups in NYC, but I could certainly attend one in my own back yard.

    Justin

    1. Ina Deaver

      Hear hear!

      Also, Russians not depressed? Criminy. We’d have to toss out a lot of classical Russian lit to believe that one.

      One of my favorite quotes is, paraphrased, that “To be happy, it is necessary to be rich, stupid, and selfish — but if you are not stupid, all is lost.” There is a level of rumination that helps one to cope with uncertainty in one’s environment, and a level which leads to worry and an overly acute understanding of the uncertainty in one’s environment. The line is a fine one.

      Then there is the Dunning-Kruger effect.

      I would say that a certain amount of cynicism is called for in the modern world, the totalitarian history of Russia notwithstanding.

        1. MyLessThanPrimeBeef

          There is a saying in Zen:

          It’s not this.
          It’s not that.
          It’s not neither.
          It’s not both.

          1. aet

            Skepticism, stoicism, epicureanism, cynicism
            They came into the world together.
            Not opposites: more like a spectrum of attitudes, inthe face of uncertainty.

  6. EmilianoZ

    I’d like to go back to Goldberg’s piece about Israel bombing Iran. The last paragraph deserves some attention:

    ” “Shortly after John F. Kennedy was elected president, Ben-Gurion met him at the Waldorf-Astoria” in New York, Peres told me. “After the meeting, Kennedy accompanied Ben-Gurion to the elevator and said, ‘Mr. Prime Minister, I want to tell you, I was elected because of your people, so what can I do for you in return?’ Ben-Gurion was insulted by the question. He said, ‘What you can do is be a great president of the United States. You must understand that to have a great president of the United States is a great event.’” ”

    I hope someone is reading that carefully. If that someone wants to be reelected in say 2 years, he knows what he has to do. He would only be doing the right thing anyway. It would be for the good of the whole world.

    These are not my personal opinions, these are my interpretation of the article.

    1. NOTaREALmerican

      Re: You must understand that to have a great president of the United States is a great event.

      Perhaps that was then. This is now.

      Maybe the world needs to get beyond American being the “shining beacon on the hill” (or whatever that BS fantasy was) and realize it’s just another Kleptocracy run by sociopaths; like China and the EU (and probably every OTHER country that has a huge pile of taxpayer loot to steal).

      Reality can be wonderful thing. Reality might get the rest of the world to wonder why they keep accepting green pieces of paper with dead Presidents on them too.

  7. MyLessThanPrimeBeef

    A bear and his teddy bear – that’s the way it has always been in nature for millions and millions of years…I think.

  8. Renea Trentini

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  9. Jaap

    it has started… dutch pension funds are ushered to cut pensions in order to save the system in the longer run. fourteen funds with a total membership of ~700.000 people (of which already ~150.000 already enjoying their pensions) are ordered by the Dutch government to cut payouts starting next year. cuts will be from less than 1% to 14%.

    unfortunately I couldn’t find an english speaking link
    http://www.nrc.nl/nieuwsthema/pensioenen/article2603527.ece/Pensioenfondsen_moeten_uitkeringen_verlagen

  10. JerryDenim

    Yves, such a sad story concerning the mass bleaching/coral mortality event in the North Sumatra/Adaman sea area. I was just there in February/March of this year enjoying the beautiful coral and marine life and I had no idea. Such a shame that such a beautiful and bio-diverse part of the world is so fragile and among the first to die from global warming. The undersea life around Aceh’s Pulua Weh island is(was?) an absolute aquatic Eden. Heartbreaking news especially considering the region was just getting back on its feet after the tsunami.

  11. Sundog

    Alex Tabarrok and John Lounsbury have posted notes on Blogggers@Treasury #?….

    http://www.marginalrevolution.com/marginalrevolution/2010/08/afternoon-at-the-treasury.html#comments

    http://www.creditwritedowns.com/2010/08/an-afternoon-at-the-treasury.html

    I really like this question Tyler Cowen apparently asked:
    “What is to say that next time the decision will not be made to again bailout the bondholders?”

    Something that’s often missing in comparisons of the US and Japan is that Japanese banks had a much greater role in capital formation and allocation (a consequence of what’s become known as the East Asian export-led development model which was/is called “capitalist” due to Cold War exigencies and cognitive dissonance).

    In the US, government rescue of large international “banks” has received plenty of attention but structurally the role of marketable debt instruments (broadly speaking bonds & their derivatives, also overnight CP etc.) were the heart of the problem as opposed to plain ol’ bank loans gone bad.

    These two links at The Big Picture are somewhat related and worth a look.

    Barry Ritholz, “2008 Bailout Counter-Factual” (riffing on the idea, What if we had done the right thing?)
    http://www.ritholtz.com/blog/2010/08/bailout-counter-factual/

    Janet Tavakoli, “How to Thwart the Assassins of the American Dream” (review of forthcoming Arianna Huffington book Third World America, check Amazon for blurbs by Warren, Maher, Johnson(s), Taleb, Spitzer, Reich & others)
    http://www.ritholtz.com/blog/2010/08/58210/

  12. Sundog

    I know this all sounds a bit crazy…. Way cool that Waldman posted this just before the Treasury meet.

    Steve Randy Waldman, “Monetary policy for the 21st century”
    http://www.interfluidity.com/v2/918.html

    Something I like to consider once in a while is “the flip.” For example, I was born near the middle of last century. If I had lived my life backward in time it would now be pre-Great War days and automobiles would be a scary novelty.

    Jeremy Isaacs, “Face to Face | JG Ballard”
    http://www.bbc.co.uk/archive/writers/12217.shtml

  13. Mike

    Russians not depressed?! That’s hilarious. The “research” also makes no sense at all – it is a typical “lets destroy a famous stereotype using a false premise” type of study.

    If Russians weren’t depressed they would get depressed about not being depressed. They enjoy it. Drinking to a point just before death (and frequently not even stopping there) is not the hallmark of happy people. This isn’t a cliche, this is normal to anyone who actually knows the community.

    Do Russians have the exact same whiny depression as Americans? No.

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