Links 11/7/10 « naked capitalism

Sunday, November 7, 2010

Links 11/7/10

Cambridgeshire park’s tumour tiger had armed escort BBC

Canadian officials see through ‘unbelievable’ disguise BBC (hat tip reader John M). The Mounties always get their man!

Statin use associated with increased risk of cataract, myopathy, liver dysfunction and acute renal failure with varying numbers needed to harm BMJ. This looks to be a decent study (fairly large study population, tracked over a long period of time) and it does not appear to be getting the attention it warrants (I’ve read of doctors advocating that statins be added to the water supply). Reader fruzy mouse adds, “I suffered the myopathy, and cataracts, after taking statins for over 5 years.

Getting Oil Is Getting Expensive Good Magazine (hat tip reader May S)

Sweden says US has carried out secret surveillance Associated Press (hat tip readers John M, May S)

The Girl Scouts are right: Today, to be a leader is to be a liar Lambert Strether

Assessing midterm losses, Democrats ask whether Obama’s White House fully grasped voters’ fears Washington Post. Obama needs to listen a LOT more to Elizabeth Warren.

Killing each Taliban soldier costs $50 Million; Killing each NATO soldier costs $50 Thousand Kabul Press (hat tip reader May S)

Papandreou Braces for Austerity Backlash in Local Greek Voting Bloomberg

Spanish ministers in talks with business after zero growth Independent. Looks like austerity is working out just as one would expect.

The futile attempt to save the eurozone Samuel Brittan, Financial Times

Hooters Shows Why Deflation May Never Go Away William Pesek, Bloomberg (hat tip reader May S)

Morgan Stanley financial adviser escapes felony charges for hit-and-run ‘because it could jeopardise his job’ Daily Mail (hat tip reader May S)

He Saw Trouble Coming. Now He Sees It Going Gretchen Morgenson. I can easily be accused of being a perennial pessimist, but the comparison to Sweden seems really off. Most notably, Sweden cleaned up its banks. Second, Sweden depreciated its currency markedly (it had suffered due to losing demand from the USSR). Sweden had had a competitive (in terms of product desirability) and pretty large export sector relative to its economy, so the currency devaluation was a major shot in the arm. By contrast, even with a cheaper dollar, it will take time for the US to rebuild an export oriented sector.

Taking 2nd Mortgage to Pay the Foreclosure Lawyer New York Times. This article is missing a critical fact: how prevalent is this practice? The article has only one lawyer who uses second mortgages. If it turns out he is the only lawyer the reporter heard of that is engaged in this practice, the headline is misleading. The article is really about how hard it is for foreclosure defense lawyers to get paid (which actually makes them sympathetic, since it means they probably have clients who wind up not paying, ergo some of their work is effectively charity), while the headline makes it sound like they are putting their client back in the very sort of problem they are trying to escape.

US accused of forcing up world food prices Guardian

Antidote du jour (hat tip George Washington):

36 Comments:

Jojo says:

November 7, 2010 at 5:58 am

The fact that 2010 was a census year gives the Dems another major loss from the mid-term election and has long-term implications in future elections.

I saw few stories on this prior to the election. Perhaps if the Dems had put some emphasis on this, they might have been able to entice more of their base to the polls or to stick with them.
===========
BusinessWeek
State Elections
November 3, 2010

Republicans Win a Big Redistricting Edge
Big state-level gains mean GOP dominance in redrawing congressional districts

The fun for Republicans does not end with their Election Day blowout. Beyond impressive gains in Washington, historic victories at the state level–in legislative and governors’ races–ensure that the party will dominate the redrawing of congressional districts that begins next year.

After each census, politicians in most states engage in a baldly partisan ritual of adjusting district lines in hopes of sending more of their allies to Washington for elections to come. And as bad a time as they had at the national level, the Democrats suffered equal, if not more devastating, setbacks in state races.

Republicans will have unilateral control of about 190 U.S. House districts as a result of the Nov. 2 election, according to Tim Storey, an analyst with the nonpartisan National Conference of State Legislatures in Denver. “Republicans won a commanding advantage in the redistricting process,” he says.

Over the next several years, 15 to 25 seats in the U.S. House of Representatives are more likely to remain Republican or switch from Democratic after redistricting as a result of the party’s victories in the states, says Ed Gillespie, chairman of the Republican State Leadership Committee. “We’re going to end up protecting a lot as opposed to carving new ones,” he predicted in a conference call with reporters.

…

The bottom line: Big Republican gains in state-level races give the GOP a huge advantage over Democrats in redrawing congressional districts.

http://www.businessweek.com/magazine/content/10_46/b4203036818848.htm

Crocodile Chuck says:

November 7, 2010 at 5:58 am

what the?? (antidote du jour)

Ina Deaver says:

November 7, 2010 at 1:20 pm

They are baby river otters, you heathen! They are super, super, massive-insulin-shock cute. The only animal I can think of that is virtually as cute as an adult as it is when it is a pup.
- PunchNRun says:
  
  November 7, 2010 at 3:20 pm
  
  Agreed, they are cute and extraordinarily entertaining. But I’ve watched them chase the keeper out of the enclosure at the Philadelphia Zoo. At feeding time. Took a half-dollar sized chunk out of the back of his leg too.
  
  Everyone needs their personal space.

charles 2 says:

November 7, 2010 at 6:04 am

The title of the article is all about framing, it could have as well be summarized :

Morgan Stanley financial adviser escapes felony charges for hit-and-run ‘because it could jeopardise his ability to pay hefty damages’

Sounds different like that isn’t it ?

Now if bankers could understand that throwing people out of their houses jeopardizes their recoveries on loans…

scraping_by says:

November 7, 2010 at 11:38 am

The general trend of bribery justice, while not unique to the present age, has grown during the present administration. Holder has never met a case with enough evidence to prosecute the rich. And with a percentage slipped over and perhaps under the table, felonies go away. Corrupt local law enforcement, in symbiosis if not in partnership with the local criminals, has a long and honored history in our country. It’s just now the rule rather than the exception.

“He took out his purse.

It is extraordinary to me,” said he, “that you people cannot take care
of yourselves and your children. One or the other of you is for ever in
the way. How do I know what injury you have done my horses. See! Give
him that.

He threw out a gold coin for the valet to pick up, and all the heads
craned forward that all the eyes might look down at it as it fell.”
Tertium Squid says:

November 7, 2010 at 2:12 pm

“Morgan Stanley financial adviser escapes felony charges for hit-and-run ‘because it could jeopardise his ability to pay hefty damages’

Sounds different like that isn’t it?”

Incentives at work. He won’t mind running over peasants until he can no longer afford it.
propertius says:

November 7, 2010 at 9:48 pm

I am inclined to invest in hemp futures. I foresee a surge in demand for sturdy rope.

Jojo says:

November 7, 2010 at 6:09 am

Here’s a hard hitting tie-in to the link story:

Assessing midterm losses, Democrats ask whether Obama’s White House fully grasped voters’ fears Washington Post. Obama needs to listen a LOT more to Elizabeth Warren.
==============
The battle for 2012 starts NOW
by kos
Wed Nov 03, 2010 at 12:46:03 PM PDT

NY Times:

Mr. Obama, and his party, have to do a far better job of explaining their vision and their policies. Mr. Obama needs to break his habits of neglecting his base voters and of sitting on the sidelines and allowing others to shape the debate. He needs to do a much better job of stiffening the spines of his own party’s leaders.

This is what happens when you neglect the base:

1. The 2008 electorate was 74% white, plus 13% black and 9% Latino. The 2010 numbers were 78, 10 and 8. So it was a considerably whiter electorate.

2. In 2008, 18-to-29-year-olds made up 18% and those 65-plus made up 16%. Young people actually outvoted old people. This year, the young cohort was down to 11%, and the seniors were up to a whopping 23% of the electorate. That’s a 24-point flip.

3. The liberal-moderate-conservative numbers in 2008 were 22%, 44% and 34%. Those numbers for yesterday were 20%, 39% and 41%. A big conservative jump, but in all likelihood because liberals didn’t vote in big numbers.

Add to these figures the fact that overall turnout was down by about a third, or more, from nearly 130 million to about 82.5 million. That’s at least 45 million no-shows, and the exits tell us the bulk of them were liberal, young, black, Latino. If 25 million of these no-shows had voted, Democratic losses would pretty obviously have been in the normal range, and they’d still control the House.

What has happened has happened. I’m less interested in talking about the ways the administration screwed up, than in what they’re going to do about it in preparation of 2012.

…

http://www.dailykos.com/storyonly/2010/11/3/916773/-The-battle-for-2012-starts-NOW

lambert strether says:

November 7, 2010 at 10:15 am

Dunno about “hard hitting.” Look at point #1 — It’s like the race card is the only card career “progressives” know how to play.

Anyhow, Kos is just a meme laundry for D factions; that’s their business model. Useful as a weathervane, no more.
Ignim Brites says:

November 7, 2010 at 5:26 pm

The demographic analysis is probably correct but it is difficult to get from that to any policy prescriptions. The problem is that the intellectual and cultural base of the DP are quite well to do “creative” class types, many in the financial industry. Being meritocrats, these people are actually quite naive about the source of their wealth. The policies that would appeal to, if not benefit, the demographic base of the party would hit the intellectual and cultural base shockingly hard. But maybe Obama is now just isolated enough that he will be willing to let them take the hit. The first test will be extension of the Bush tax cuts for the wealthy. Every one talks about the ordinary income tax rates, but the real game is in the dividend and capital gains rates. The Kos crowd just might be young enough to whoop it up over a collapse of the stock market. It actually can be quite exciting. Yes it can! K serrated serrated!

Swedish Lex says:

November 7, 2010 at 6:21 am

Sweden’s recovery in the 90s was due to a number of connected factors:

1. Massive devaluation, i.e. currency debasement. Hence, a moderate trashing of the value of your currency will not suffice.
2. Austerity (relatively speaking)
3. Tax hikes (rich, poor, middle, all).
5. Dealing with bad loans and TBTF
4. Corporate resturcturings & being lucky that the tech bubble took off globally, which massively helped the country’s recovery.

Without the global tech bubble, the Swedish recovery story would have taken much longer and probably have taken another path: http://www.ekonomifakta.se/en/Swedish-economic-history/Structural-Problems-and-Reforms/

So, Shepardson/Morgensen are now hoping a re-peat of the Swedish story as regards the U.S.. My question is what bubble(s), in which part of the world and of what size (a XL bubble will not do the trick as it would be too small for the U.S. economy) they are banking on to happen soon.

By the way, Swedish military spending has gone down from 2,5% of GDP in 1988 to some 1,3% today. Cutting U.S. military spending in half too could be a start.

Jim Haygood says:

November 7, 2010 at 2:32 pm

As you say, cutting U.S. military spending in half would only be a start, because it would still remain close to 2.5% of GDP.

Most countries should be able to defend their borders with defense spending of 1% of GDP. This was Japan’s guideline for several decades after WW II ended.

The U.S. military empire still pointlessly occupies Germany, 65 years after the war ended, and 20 years after Comecon went poof.

But all indications are that this loss-making millwheel round our necks will soldier on until the U.S. becomes an impoverished former empire — a phenomenon repeated so many times in European history.

This process is already well advanced. Bensane Bernanke’s QE2 Dollar Destruction Plan has lit a rather short fuse on the end game, since the U.S. soon will be unable to finance itself internationally in its shunned greenback confetti currency.

A nation which lets a madman like Bernanke proceed unchecked with his lunatic Ponzi scheme deserves its fate.
- Tc says:
  
  November 8, 2010 at 10:08 am
  
  Please note the US needs to maintain some 800 plus military bases around the globe, 12 aircraft carrier fleets in all oceans and seas, 2 ongoing wars, infinite number of naval games around east Asia, and more money to beef up military presence in the pacific….

attempter says:

November 7, 2010 at 7:21 am

Re criminal food and energy speculation (a redundant term):

Despite surging commodity prices, Fed chairman Ben Bernanke has argued the likelihood of deflation is greater than inflation following prolonged weakness in the US economy.

This highlights how there’s no such thing as “the US economy”.

There’s the “economy” of Bernanke and his bankster masters, for whom the financialized pseudo-economy is the only meaningful economy, for whom asset inflation is the goal and rationale of all policy, and commodity inflation a nice side dish.

Then there’s the real economy of the real American people, who are purely the subjects and victims of these crimes and these criminals.

It’s obvious that the real economy doesn’t need the financial parasite appendage at all, and would do much, much better if it ceased to exist.

So that’s what should be done. One obvious measure, the most relevant to this particular example, would be to outlaw all speculation. We just need one big bucket law. That’s the one and only true derivatives regulation.

Then the productive people, who do all the work and create all the wealth, could feed their children and heat their homes in peace, unassaulted by those vile criminals who want these children to go hungry in the cold.

Doug Terpstra says:

November 8, 2010 at 12:12 am

Right on target. The Fed is a criminal syndicate, a scam and a racket, and your jeremiads will become clear enough to a ctitical mass of people within a year’s time. 2012 is certain to look entirely different.

“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.” -Abraham Lincoln

sam says:

November 7, 2010 at 8:00 am

Are foreclosure lawyers the new “trial lawyers”? Those terrible sorts who represent people in court, and not corporations?

dearieme says:

November 7, 2010 at 8:52 am

Kipling knew about Afghanistan:

from “Arithmetic on the Frontier”

A scrimmage in a Border Station-
A canter down some dark defile
Two thousand pounds of education
Drops to a ten-rupee jezail.

H/T http://www.kipling.org.uk/poems_arith.htm

Swedish Lex says:

November 7, 2010 at 9:34 am

Regarding U.S. spying activity in Sweden. We always knew that the personality disorder of Uncle Sam meant that the Patriot Act would have global application – just to ensure that “America is safe”.

I can understand that tiny U.S. feels threatened by the Nordic Giant. Perfectly sane, you know. Who could not feel threatened by a country of 9 million that has not initiated any armed combat against another nation since the Napoleonic wars.

lambert strether says:

November 7, 2010 at 10:38 am

I wouldn’t take the Swedish threat too lightly:

From this day on, the official language of San Marcos will be Swedish. Silence! In addition to that, all citizens will be required to change their underwear every half-hour. Underwear will be worn on the outside so we can check. Furthermore, all children under 16 years old are now… 16 years old!

See? Right in our own back yard.

eric anderson says:

November 7, 2010 at 11:55 am

Statins are the most widespread scam ever foisted on the world by Big Pharma. The Atlantic Magazine warned about this 20 years ago with a landmark article on cholesterol.

There are many ways to reduce cardiovascular health risk that do not involve anything toxic or dangerous side effects. Except for the flushing and irritation, niacin may be the best single answer, but there are many other strategies that could be used in combination. Even with niacin, there are ways to mitigate the flushing reaction.

I found this to be an excellent overview of niacin: “Defuse Multiple Cardiac Risk Factors With One Vitamin” by Tiesha Johnson, Rn, BSN. It also shows how how other supplements can be taken with niacin to make the flushing more tolerable.

http://www.encognitive.com/files/CARDIAC%20risk.pdf

Some additional thoughts on niacin here, in a shorter article from the Life Extension Foundation…

http://www.lef.org/magazine/mag2007/mar2007_atd_01.htm

Anonymous Jones says:

November 7, 2010 at 1:41 pm

I’m skeptical about niacin, but statins are indeed troubling, and the vigor with which doctors seem to believe in them is even more troubling. It’s not just side effects; there’s little proof that the decline in cholesterol caused by the statin actually is a causal link to a lesser risk of heart attacks even though lower cholesterol is linked to a lesser risk of heart attacks (read it again; trust me, the world is complicated).

Groupthink can be overwhelming sometimes. I’m not sure we can always identify when it is groupthink and when the skeptics are just wrong, but I have not been in a single conversation with a doctor in which he or she had any sort of compelling reasons for the deep belief that leads to prescriptions for billions of dollars worth of statins.
- ginnie nyc says:
  
  November 7, 2010 at 2:17 pm
  
  You shouldn’t be skeptical of niacin. My endocrinologist, a board-certified MD, prescribed niacinimide (the no-flush niacin) at 500 mg/day for 3 months. It knocked the cholesterol from 220 to 180. It’s a benign (and cheap) way to get results.
- anon48 says:
  
  November 7, 2010 at 4:12 pm
  
  Re Statins
  
  “It’s not just side effects; there’s little proof that the decline in cholesterol caused by the statin actually is a causal link to a lesser risk of heart attacks even though lower cholesterol is linked to a lesser risk of heart attacks (read it again; trust me, the world is complicated).”
  
  Spot on.
Externality says:

November 7, 2010 at 6:29 pm

Statins also open the door to the prescribing of other drugs that are profitable for Big Pharma.

Shortly after statins came into widespread use, patients began developing what is now commonly diagnosed as fibromyalgia: a combination of muscle pain, fatigue, headaches, etc. While fibromyalgia occurs in people not taking statins, statins seem to cause either FM or a condition very similar to FM.

Big Pharma then began pushing as a “treatment” for fibromyalgia epilepsy and psychiatric drugs such as Neurontin, Lyrica, and Celexa, all of which were on-patent (for other indications) and immensely profitable for Big Pharma. Neurontin’s manufacturer has been repeatedly fined and sued for pushing doctors to prescribe it for conditions which it was ineffective and/or made the symptoms worse. https://secure.wikimedia.org/wikipedia/en/wiki/Gabapentin#Relevant_Legal_Actions

In short, patients who were prescribed (brand name) statins tended to develop symptoms that required other brand name medications.
rcyran says:

November 8, 2010 at 1:34 pm

Statins are certainly over-prescribed (prescribing them to children? give me a break) – for many, a change of diet and exercise is far more preferable.

That said, their affect on significantly lowering death rates from cardio disease is pretty clear.

Haven’t read the study because I don’t have a subscription, but I would suspect many people on statins are quite sick -so some of these conditions may be coincidental. (on the other hand, I’d be willing to bet good money all statins cause myopathy to varying degrees – just look at Baychol)

Dave Erickson says:

November 7, 2010 at 11:57 am

Dr. Milo, man of privilege, meet Mr. Bezinger, man of super-privilege.

Conor says:

November 7, 2010 at 11:59 am

RE: Deflation and Hooters in Japan: Japan, inventor of world changing technologies like the Walkman, reduced to selling cheep chones to China? *gasp!* Heaven forbid!

RE: Antidote du jour: Awwwwwwh! Those kits are soooooooo cute, I want them on my lap right now!! Many thanks to George Washington, whoever she may be.

Transor Z says:

November 7, 2010 at 12:14 pm

Re: Girl Scouts and lying

A number of relatively recent behavioral studies support the girls’ impressions of leadership-as-lying.

People with Power Are Better Liars In Working Paper (2009) Coauthor(s): Dana Carney, Andy J. Yap, Brian J. Lucas, Pranjal Mehta

http://www4.gsb.columbia.edu/ideasatwork/feature/735403/Powerful+Lies

wkj says:

November 7, 2010 at 12:45 pm

When I was in high school in the 1950s, I once glanced at a collection of Ripley’s Believe It or Not items. As I remember, one of the items (published during or shortly after WWII) asserted that the cost per kill for Caesar’s Gallic wars was something like $1/head. The result of combining low tech and high volume I guess.

Enkco says:

November 7, 2010 at 6:33 pm

I think the disparity just demonstrates how much more highly we value human life these days.

Brett says:

November 7, 2010 at 12:53 pm

Regarding that Streitfeld article, I don’t see how anyone would take that offer. The example he gives is a foreclosure lawyer successfully reducing the principle value of a mortgage from $500,000 to $200,000, then as a payment to the lawyers for this service the clients would have to then take a 2nd mortgage on the difference ($300,000) equal to 40% of that written off difference, or in this example $120,000.

Isn’t that almost equivalent to having a house that is underwater by 30%? The only difference is that in the article it states that it is currently unknown what action the lawyer firm would take against the client if they defaulted or failed to pay back the 2nd mortgage. The quote from the lawyers says he’d never foreclose on anyone, but still if he doesn’t how does he get paid?

Seems like some type of scam to me. A. You are paying these lawyers hundreds of dollars a month to fight the bank with no guarantee they’ll get anywhere, and then if they do B. You are forced to take out a significant second mortgage and pay for years on it to the lawyer firm. I’d rather lose my house and take the credit hit than take that high priced deal.

One other question I’d take into consideration is whether or not Florida is one of the states that banks can legally prosecute you for unpaid mortgage balances in court? If the banks can follow you around and sue you then maybe that changes the calculus of this a bit, but if not then I’d never say yes to that scheme.

Maju says:

November 7, 2010 at 2:13 pm

As always a lot of interesting links, thanks. I’m going to focus on the repeated song of “getting out of the Eurozone”: I think it’s just not possible: once you are in you are in forever… unless your economy is strong enough as to launch a separate currency, which is not the case we are discussing here. Even if a country would be thrown out, who would impede that they’d keep using (not issuing anymore though) the euro? Ecuador and Panama use the US dollar, Montenegro and Kosovo use the euro… who could force Greece to issue drachmas again? Why would they want to?

The discussion is in the wrong parameters: the euro demands a federal or at least effective confederal government and loss of effective sovereignty for member states. That’s the only way to reign in this chaos: getting an effective elected government for EU and putting the ECB under it as well.

I am thinking that it may happen in the end that it is Germany who leaves the Eurozone first of all. But this would not be good for Germany either, because they depend on exports to countries like Greece.

The real issue is that you cannot manage a coalition of sovereign states as if it was a colonial empire. It just doesn’t work, specially as Germany does not have the military power to enforce its economic primacy.

John from Concord says:

November 7, 2010 at 4:07 pm

A lower-carb (specifically, reducing or eliminating grains and sugar, not so much Atkins) diet reduces heart disease far more effectively than statins, according to 100+ (really) years of research — but of course it can’t be patented and runs counter to US farm policy.

Where’s that outrage?

Christine Springer says:

November 7, 2010 at 8:09 pm

Hey Yves:

The idea of lawyers taking second mortgages on homes to get paid is only new to people who are outside of the foreclosure defense world. This idea has been rolling around for a couple of years but hasn’t been written about much because there have not been many lawyers to defend borrowers until this year. The foreclosure defense discussion is one where the lawyers are the last ones to show up for the party — I can’t tell you how many loans I audited for people who were going into court pro se. As a result, I’m now spending a lot of time helping lawyers get up to speed on the case law and major defenses, along with marketing and finding clients.

unsecured loans online says:

November 28, 2010 at 10:00 pm

Year end tax planning may be just a little tougher this season since the status of the Bush tax cuts and the federal tax brackets continue to be up within the air. of course the expiring tax cuts won’t get into impact until 2011 however the pending improve in taxes for lengthy term capital gains and dividends could mean you may benefit from some year end tax moves like loss harvesting and wash sales.

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