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Links 6/24/11

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Low-calorie diet offers hope of cure for type 2 diabetes Guardian (hat tip Buzz Potamkin)

Hand-hacking lets you pluck strings like a musical pro New Scientist (hat tip reader Robert M)

US states plan Google antitrust probes Financial Times

As Greece Ponders Default, Lessons From Argentina New York Times. This is pretty astonishing. I forgot where it appeared, but I was told of a presentation by the head of Argentina’s central bank. It shows Argentina to be outperforming all of the rest of Latin America on something like 17 of 19 indicators, and not doing too badly on the remainder.

Europe’s return to Westphalia Philip Stephens, Financial Times (hat tip Swedish Lex)

Greece, Schengen, Nato – the European dream is over Guardian

Bad for Business: Euro Crisis Has Decimated Greek Private Sector Der Spiegel (hat tip reader Tim C)

How European Elites Lost a Generation Der Spiegel (hat tip reader Peter J)

England, their England The Spectator (hat tip Michael Thomas)

The hidden contingent sovereign liability of Danish mortgage bonds Ed Harrison

Second Harlan Crow Connected Group Has A Perfect Litigation Record Before Justice Thomas Alternet (hat tip reader Francois T)

N.J. Slashes Public-Worker Benefits Wall Street Journal

Ga.’s farm-labor crisis going exactly as planned Atlanta Journal-Constitution

Deutsche’s firing of top trader sparks probe Reuters (hat tip reader Tim C)

Antidote du jour:

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35 comments

  1. rjs

    re: lessons from argentina…how bout lessons from iceland?

    i dont know if you noticed that iceland, which by public referendum had last year told the british & dutch banks to stuff it & refused to bail out their banks, floated a five year bond last thursday at 3%…i had thought iceland was supposed to be a pariah, but here they are borrowing at rates comparable to the core of europe…so i ran a quick & dirty google comparison between iceland, which defaulted, and the PIGS, which imposed austerity at the behest of the IMF & the ECB; iceland’s unemployment is 7.1%; for greece, it’s 15.9%, for ireland, it’s 14.8%. for spain, it’s 21%, & for portugal, its 12.6%…icelands GDP is expected to grow at 2.3%, while ireland’s is .6%, spain’s is .7%. greece is negative 3%, and portugal’s GDP is expected to fall 1.3%; as ive noted, iceland can now borrow at 3%; borrowing costs for greece remain above 28%, for ireland, over 12%, for portugal, 13%, and spain, 5.6%…

    shows you what austerity will do for a country…

    1. Richard Kline

      So rjs and folks, it isn’t just ‘austerity’ which drives the relative funding costs of Iceland vis a vis, say, Portugal; it’s the debt overhang. Portugal has a huge, HUGE debt overhang. They can’t reasonably pay it off within decades, but they _must_ roll it over regularly, as well as they _must_ borrow for normal funding processes. This means first of all that Portuges bonds are pure sitting ducks for speculators; huge volume, must fund on set dates, must pay whoever will fund. Secondly, with so much debt outstanding relative to Portugal’s revenue stream, and said rollover constraints, the risk of interrupted (if not defaulted) payments on Portugese bonds are certainly higher in a real sense than on any average sovereign bond.

      Iceland, by contrast, has a very limited exposure to its extant bank debt—the Icelanders will pay only what they choose to pay, and are clear that will be pfenning on the kronar—and are not crushed by sovereign debt. Hence, an evaluation on funding present Icelandic issues can be made principally against realistic revenues rather than the added constraints of an exhaustive debt overhang drawing in the financial sharks. And Iceland has something which Portgal, Ireland, and Greece do not: fish, which have a solid demand and earn foreign exchange, so there is a basis for saying “The islanders have the dough to pay interest.”

      None of this has anything to do with ‘austerity’ directly, which is a political struggle about what how policy and revenue will be fitted to each other, i.e. a domestic calculus as opposed to a financial one. Debt is being used as an excuse for austerity, as opposed to austerity being an unavoidable result of debt. What needs to happen is obvious, which of course is exactly why it won’t be done until every greater error is explored. The debt has to be cut down, stretched out, and largely taken out of the secondary market. But that is a political decision which is harder to face than nationally imprisoning the most vulnerable countries for the time being.

    2. RebelEconomist

      Rubbish. For the millionth time, Iceland rejected the obligation – accepted by its elected politicians – to repay British and Dutch taxpayers for Iceland’s share of deposit insurance payments, and is likely to be found in breach of EEA law. This question had nothing to do with bailing out the banks concerned, which all had their written down to zero. Get the facts right, or keep your worthless opinion to yourself.

      1. attempter

        Once again rebelling against the facts, I see. As well as against freedom and simple human decency.

        Iceland owes nothing (and its “elected politicians”, like all such, are illegitimate thugs). It was the British and Dutch governments who stole from the British and Dutch taxpayers to bail out the banks, so if those peoples want their countries back, there’s where they must seek justice and restitution.

        But your project is to try to set the victims at one another’s throats while the criminals continue to steal and destroy. You’re only a “rebel” against civilization itself.

      2. Francois T

        “accepted by its elected politicians” despite the express will of their people

        Whether you like it or not, Iceland is a democracy, ergo, politicians work for the people over there, contrary to the bought-n’-paid-for-rent-a-congress we’ve got here.

        Since the Icelandic politicians insisted a tad too much to go over the head of their constituents, said constituents decided in referendum to state their will clearly and irrevocably. Is that where your problem come from? Et hinc illae irae?

        Furthermore, and again, contrary to the fascist police state we’ve got here, Iceland investigated the crisis and arrested some Respectable People, including their Prime Minister;(something unthinkable in the Pre-Reich we’re sliding into in the USA) you know, just like they do in the few civilized countries still existing on the face of this planet.

        Long Live Iceland!

    3. Jessica

      For a fully accurate comparison, the GDPs of these nations since they took their different paths needs to be compared.
      If I remember correctly, Iceland’s GDP took a ferocious hit when they first blew off the banks and I think may be still lower than the PIGS.
      On the other hand, the unemployment figures do speak for themselves. I suspect that the unemployment figures are a better index of the impact on the average persons in these countries.

      1. Jessica

        Please allow me to rephrase “blew off the banks” as “did whatever it was they did that was different from the others”.

        1. scraping_by

          On the other hand, much of Iceland’s economy pre-smash was based on financial speculation and arbitrage. In other words, its GDP was artificially increased by throwing around large amounts of money in leveraged speculation. Or, it was the appearance of increase, since the money was mostly deemed, the earnings mostly or entirely on paper, and any attempt to convert to real cash tended to return below exchange amounts.

          Therefore, it’s more likely their economy returned to the level it really was, without a lot of smoke and mirrors.

    4. PJ

      “The government has estimated annual inflation at 9.7% while Economy Minister Amado Boudou expects inflation in the single digits this year.

      Private-sector economists say the government’s inflation data are bogus and based on manipulated data, an allegation government officials frequently deny.

      Economists say annual inflation easily surpasses 20%”

      http://www.marketwatch.com/story/argentinas-inflation-forecast-steady-at-25-2011-06-22

      Governments can always lie and make everything look “Rosa”

  2. Doly

    More interesting reports from my mother in Spain and the indignants:

    There is a lot of support for the indignants even in small cities. I have seen a video of Logroño, there were even more people than in Coruña in last Sunday’s demonstration. Congress has already talked about the indignants and some politicians make noises, but at this late time none of us believe them.

    This is interesting. BIFI (University Institute of Research in Biocomputation and Physics of Complex Systems of the University of Zaragoza) and the company Cierzo Development have studied the propagation in social networks of the indignant movement. They explain it here very well and briefly. (Note: This is a Google Translate link. I love the video, and you don’t need to understand Spanish to see it. As far as I know, this is the first scientific study of a “Twitter revolution”)

    http://translate.google.co.uk/translate?js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&sl=auto&tl=en&u=http%3A%2F%2Fwww.xatakaciencia.com%2Fcomputacion%2Fcomo-se-han-organizado-tan-bien-los-espanoles-para-fraguar-el-15m&act=url

    These are the conclusions of the study:

    http://translate.google.co.uk/translate?hl=en&sl=auto&tl=en&u=http%3A%2F%2F15m.bifi.es%2Fconclusions.php

    In Coruña, neighbourhood groups are fully functioning. In Monte Alto we are working a lot and we’re organized in workgroups. We’re rolling.

    The camp in Obelisco continues, more as a token than anything else, because now the work is done in neighbourhoods. The group of Monte Alto works very well. We have divided ourselves in several groups. I’m in two groups: “Sustainability and environment” and “Urbanism and residences”. They want us to do a neighbourhood action to learn how to make solar cookers and when they’re done, in August, we’ll make a solar meal. In times of crisis these sort of things are useful. They’ve told me that one of my students that knows how to do solar cookers is among the indignants. (Note: My mother is a teacher of draftsmen, very interested in eco-building)

    1. aletheia33

      thanks! very cool video and great to have the report from “inside” spain. tell your mother, she’s an inspiration beyond her country’s borders!

  3. Stan Getz

    Lessons from Argentina:

    That is the lesson the nytimes and the intelligentsia would like Greece to take away. However, the truth is that Argentina, in the last 10 yrs, has had yrs of GDP growth of 9, 8 & 7%. Telling bond investors to go fish, if coupled with intelligent middle class promoting economic policies has greatly contributed to this growth. Argentina is still growing faster than the developed world. Bond investors wants everyone else to practice austerity and privatize public assets to protect their high interest rates and bond investment. Greece should force a major haircut to private investors. Then maybe debt would be properly discounted for the true risk of default.

  4. MyLessThanPrimeBeef

    As Greece ponders default…

    Does a person behave differently than a country?

    Do we have examples of defauling persons outperforming non-defaulting persons? How do they relate to countries defaulting or not defaulting?

    1. Cedric Regula

      Not sure. No studies done…yet. But neither of ‘em are getting any of my money!

  5. tyaresun

    The whole world will turn to Westphalia as globalization implodes over the next decade. Free movement of capital, restricted movement of labor, what a wet dream for banksters and the global elite.

  6. Gaius Gracchus

    Greece should just default. Maybe even nationalize foreign investments.

    What real punishments would there be for Greece? The era of gunboats collecting debts is over and unless the Euros bribe Turkey to engage in “peace-keeping” in Greece, Greece would be a lot better off telling the banks to go screw themselves.

    Even better, Greece should go massively short on Greek debt and then default…. Brazil did something similar in the early 90s –it announced it would default and then bought billions of debt for pennies on the dollar…

  7. aletheia33

    a must read from truthout:

    http://www.truth-out.org/abusive-conditions-martori-farms/1308844017

    “….Marcia Powell, a mentally ill 48-year-old woman incarcerated at the Perryville Unit in Arizona, died. The Arizona Department of Corrections (ADC) has more than 600 of these outdoor cages where prisoners are placed to confine or restrict their movement or to hold them while awaiting medical appointments, work, education, or treatment programs. On May 20, 2009, the temperature was 107 degrees. Powell was placed in an unshaded cage in the prison yard. Although prison policy states that “water shall be continuously available” to caged prisoners and that they should be in the cage for “no more than two consecutive hours,” guards continually denied her water and kept her in the cage for four hours. Powell collapsed of heat stroke, was sent to West Valley Hospital where ADC Director Charles Ryan took her off life support hours later.

    “The ensuing media attention over Powell’s death caused the ADC to temporarily suspend using these cages. Once the media attention faded, the ADC lifted the suspension….

    “Women on the Perryville Unit are assigned to Martori Farms, an Arizona farm corporation that supplies fresh fruits and vegetables to vendors across the United States (Martori is the exclusive supplier to Wal-Mart’s 2,470 Supercenter and Neighborhood Market stores).

    1. Thomas Barton, JD

      Has the national or state ACLU ever taken any action on behalf of this woman and others similarly situated in the Arizona penal system ? Has any human rights organization ever challenged the use of these prisoners for the ag industry as involuntary servitude ? Thanks for your entries.

  8. aletheia33

    a 2nd must read from truthout:

    http://www.truth-out.org/gar-alperovitz-prehistory-next-possible-progressive-era/1306944172:

    there is much more here than quotes can adequately convey, but here are a couple anyway:

    “So, I think the long trend, roughly a 30-year period, will mean that the economic pain either continues without resolution, or the next several decades will be the birthing ground of new strategies and new politics – not simply more activist politics in support of traditional liberalism. While such liberal politics would be positive from my point of view, it’s not sufficient, because the power base – labor – is not there.
    But I do think that what’s happening at several other levels is important. Most people have not been paying attention to what’s going on at the local level. The press doesn’t cover it, nor does it have any resources to cover it. There are literally thousands and thousands of various forms of community-building efforts. This includes 4,000 to 5,000 community development corporations and something like 13,000 worker-owned companies. There are more employees involved in this in one way or another than there are members of unions in the private sector. There are 120 million members of cooperatives; 20 percent of the American electric system is either co-op or municipal, essentially socialized. Land trusts are developing at the local level. At the state level, there are many strategies going on, like public pension funds, for example. California’s is the most well-known, but the state of Alabama is heavily using its pension funds and even investing in some forms of worker-owned companies. . ..

    “As I’ve said, I think there is likely to be substantial stagnation because you can’t get a coherent policy through the political system. In fact, our political system is doing just the opposite: it’s cutting spending and undercutting serious economics. So, I think we’re going to see a lot more stagnation.
    I think that will force even more painful experimentation at the local and state levels, and it’s already happening, but hasn’t been reported on and hasn’t been studied by scholars. The programs that ultimately became the New Deal were often developed at the state and local level first in principle, and then became the basis for national policy. In my judgment, efforts based on the principle of democratizing ownership are likely in health care – as “single payer” – in banking and in other sectors. . ..

    “I think the blockages in Washington are so intense that ultimately, over the long haul, a major reorganization of our national political structure may occur. We are operating with a constitutional system devised in the era of the plow and mule and a population of a mere four million residents largely scattered along the Eastern seaboard. Major reform of this system may ultimately occur in a positive way, as certain large states like California take matters into their own hands as the levels of pain keep increasing due to the failings in Washington. There are several scenarios of ultimately decentralizing real power constitutionally that are possible. On the other hand, continued failure and decay is also possible – i.e. no solution to our problems, period. But the scenario that is least likely, I believe, is successful management without major change in systemic patterns. . ..

  9. okie farmer

    The Guardian article and Stephen’s article in FT predicting the end of the EU both skirt the issue of how the big banks in the EU captured the governing elites of the core as well as the PIIGS. Both writers are all about ‘nationalistic resurgence’ without explaining that the governing elites betrayed the vision and dream of what Kohl, Delors et al were seeking in the beginnings of the Union. By 2004 it was becoming apparent that Brussels was turning to US style neo-liberal economics as a development model for EU. They seemed to have drunk the koolaid that US economic and financial elites had been peddling at Davos for years. The popular resistence to neoliberalism was almost instantaneous all across Europe to the new “treaty” that would institutionalize the “reforms”. One could call that resistence ‘nationalism’ I suppose, but that’s not exactly accurate description of citizens’ rejection of treaty. Both left and right rejected it with only a minority of centrists voting ‘for’… in how many countries? And as Bill Black, Hudson, and many others have opined, the betrayal of the working people to “save” the banks and financial elites continues with bi-partisan vigor all across Europe demonstrating the capture of the complete political apparatus of just about every party. I was hopeful that Europe would reject neoliberal politics after the crash, provide a model for the US, and show that social democracy works. No such luck. It seems to me now that the ruling elites will stick to the neoliberal/austerity paradigm even if it means the destruction of the EU and misery for millions. For now, the banks rule.

  10. dictateursanguinaire

    WSJ using the term “slashed benefits”?? I mean, I know the newspage people don’t have framed pictures of Pinochet like the editorial page people do but the fact that it says anything more neutral than “reformed government mandated inflationary policy” is pretty incredible. Hell, “trimmed Stalinist bureaucracy” would probably get a pass from them.

  11. Philip Pilkington

    Goddammit Columbo — er, Peter Falk — died:

    http://www.guardian.co.uk/tv-and-radio/2011/jun/24/peter-falk-columbo-actor-dies

    I freakin’ love Falk. I didn’t even know he had Alzheimers. Think I might bang out the Columbo collection tonight — maybe even watch Wings of Desire (Rowland S. Howard from the band ‘Crime and the City Solution’ who do the amazing performance mid way through died last December).

    http://www.youtube.com/watch?v=AKunEn9VUrw

  12. Pat

    This news article has very interesting implications:
    http://www.guardian.co.uk/business/2011/jun/24/credit-default-swap-insurance-may-be-worthless
    “UK banks could find they do not have the protection they expect in sovereign debt crisis, says analyst”

    The sources there say that much of the Greek exposure CDSs have been sold by American and UK hedge funds. The article implies that if the hedge funds can’t pay out, then those who bought the CDSs will lose.
    So …… the hedge funds could just pocket the premiums, distribute the fund money back to those who put it in, plus profits, and then go bankrupt. Now wouldn’t that really screw up the whole global financial system?
    I don’t know much about CDS underwriting, but if CDS are negotiable instruments or transferrable contracts, you could also have a situation where the CDS issuers simply sell them to shell companies that go bankrupt.
    Amazing — I wish I had gotten into that racket.

    1. Cedric Regula

      I’m quite certain lots of people will be mailing their CDS insurance claim to a P.O. Box in Grand Caymen.

  13. SH

    “It’s astonishing really that a diet – hard as it was – could change my health so drastically. After six years of having diabetes I can tell the difference. I feel better, even walking round the golf course is easier.”

    It amazes me what passes for news.

    1. Francois T

      Albeit small, the rationale behind this study was sound and based on clinical observations that warranted an explanation.

      I fail to see what is your particular problem with reporting the results of this study.

  14. Francois T

    This extreme low-calorie (600 calories per day for 2 months…ouch!) diet treatment for DM Type II could be HUGE. If the results are convincingly reproduced with larger studies, you’ve basically removed one of the biggest threats to Medicare and Medicaid solvency, no less!

  15. Foppe

    This is a bit of a strange link, and technically only relevant for Euro readers, but still:

    The one-minute clip is the work of French film director Frédérique Pollet Rouyer and Belgian film director, Patric Jean, whose 2007 documentary ‘La domination masculine’ won critical acclaim. In the clip, a steady stream of women visit a young male prostitute, leaving money on a table in payment for his submission to their desires. ‘What we are appealing for is a moment of reflection and empathy,’ says Patric Jean. ‘We are asking viewers to imagine themselves in the place of a prostituted person and how it feels to rent out one’s sexuality and body for money. If this basic reality of prostitution makes them feel uncomfortable or worse, they should take a stand against it.’

    The EWL campaign, entitled ‘Together for a Europe Free from Prostitution’, calls on individuals, national governments and the European Union to take concrete actions to bring about an end to societal tolerance for widespread sexual and economic exploitation of persons in prostitution, the vast majority of whom are women. ‘As far as the members of the European Women’s Lobby are concerned, the system of prostitution represents a backwater of inequality, a place where violence and oppression are thinly veiled by a distorted image of equality through commercial exchange,’ says Rada Boric, Executive member of the EWL, representing more than 2500 women’s associations throughout 30 countries.

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