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Links 9/17/11

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Willow the cat story makes strong case for microchipping Christian Scientist Monitor.

Born to be Viral: Kung-fu mantis thumb-wrestles human New Scientist (hat tip reader Robert M). This is actually kinda mean.

Child Bodybuilding: How Jacked Is Your Kid? Bloomberg. Dancers typically have a lot of physical problems as they age, particular back and hip ailments. The high impact aerobics set of the 1980s has also paid a big price for what was fun and supposedly healthy exercise. I bet these kids are going to regret loading up their joints this much this young.

The $2 Billion UBS Incident: ‘Rogue Trader’ My Ass Matt Taibbi

UBS ‘Rogue’ Trading Lasted 3 Years Wall Street Journal

THE THINK-TANK ARCHIPELAGO: ADAM CURTIS ON HOW LIBERTARIAN THINK-TANKS CRIPPLED THINKING Mark Ames, eXiled

Troy Davis and the Politics of Death Democracy Now (hat tip reader Thomas R)

NY joins federal suit against AT&T, T-Mobile deal Wall Street Journal. Go Schneiderman! I am a happy T-Mobile customer and want to stay that way.

Secure Communities Task Force Members Resign Rather than Endorse the Program Dave Dayen, FireDogLake

Support for Obama Slips; Unease on 2012 Candidates New York Times

Obama Fails To Address Homeless Crisis While at Kitchen Eric Sheptock (hat tip Lambert Strether)

European finance ministers ignore US Treasury Secretary Tim Geithner’s warning of ‘catastrophic risk’ over debt crisis Telegraph (hat tip reader Michael M) and Advice on Debt? Europe Suggests U.S. Can Keep It New York Times

UBS Faces Questions on Oversight After a Trader Lost $2 Billion New York Times

Alabama County’s Debt Deal Averts Bankruptcy New York Times

DANGEROUS JAILS: Part 1 Matthew Fleischer Witness LA (hat tip reader bob)

Defence cuts could boost US unemployment ChannelNewsAsia (hat tip reader May S)

Recession Job Losers Take Bigger Hit to Future Earnings Wall Street Journal (hat tip Mark Thoma)

Killing Jobs and Making Us Sick Joe Nocera, New York Times

Antidote du jour (hat tip Richard Smith, to prove he can provide a non-subversive offering):

This is a more typical Richard selection (I have told him no more carnivorous plants):

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54 comments

  1. BDBlue

    Re homelessness

    I work a few blocks from the WH and in recent months the number of homeless I see seems to have increased. There used to be a couple out during the day. Now, I routinely see 4-6 in the same couple blocks. Whether that indicates an overall higher total is something I can’t be sure of. DC has been struggling to provide resources and has even had to cut some. I’m sure Obama never sees these people, but many of the folks who work in the WH must walk past them every day.

    1. lambert strether

      “Walk past” being indeed the operative phrase.

      “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, beg in the streets or steal bread.”

    2. curlydan

      Unemployment rates in DC are at a 2007-2011 recession high, so interestingly, are Texas’s…so much for the Texas miracle

  2. mikeVa

    We really need a decent press. You rock Yves! Just some thanks for your writing a few days ago. I read the paragraph below and I followed the link back to Naked Capitalism. At first, I was shocked and excited. I should have know the press could hardly ever write so much truth as you did with the Vickers Report:

    “Let’s go to the Dimon argument, such as it is. What about “international” does he not understand? If you want to play outside America’s borders, you can expect to be subject to different rules. The Eurozone, much to the consternation of US and UK players, has basically told the Anglo private equity firms to go to hell. They are forbidden both from doing deals in EU countries and from raising funds there unless they register and obey local rules. The Eurozone has gotten sick of rapacious foreign players buying decent European companies, cutting jobs, saddling them with lots of debt, and shrugging their shoulders when they miscalculate (often) and the rent extraction kills the company. The EU rules, among other things, will restrict how much a PE firm could lever up a portfolio company.”

  3. alex

    re: Defence cuts could boost US unemployment

    It’s an inconvenient fact that many people on the left ignore (and I’m on the left, so this is no right wing rant).

    Cutting _domestic_ defense spending at this time would be like cutting any other sort of government spending – it would increase unemployment. Note that I emphasize “domestic”, as I certainly wouldn’t use unemployment to justify getting people killed in our foreign wars. But when the budget deficit is discussed as a problem, some of the same people who promote Keynesian stimulus and say the short term deficit is not our main problem will turn around and say “cut military spending”.

    If you want Keynesian stimulus then it’s a terrible idea to cut our _domestic_ military spending in the short term. Leave the domestic bases, the defense contracting jobs, and the domestically stationed military personnel.

    1. dearieme

      The trouble is that when reckless politicians (and bankers, and businessmen, and just plain people) run up huge debts across a generation or two, every policy looks unattractive. You have to settle for the least bad, if you think you can discern that.

      1. alex

        “You have to settle for the least bad, if you think you can discern that.”

        What’s your idea of the least bad, or are you just making the obvious point that nothing’s perfect?

    2. Dave of Maryland

      The problem with leaving the domestic defense department in place is that when you’ve got lots of bombs, you tend to use lots of bombs, leading to death, destruction, unhappy widows, dead children, and other unpleasant effects.

      Precisely the same argument was made concerning slavery: Yes we know it’s bloody awful (more awful than people know, or will admit) but, heck, if you liberated the slaves, who would do the work? The Southern economy would collapse overnight. Which would take the Northern economy with it. – Such was the argument. In the end, the North militarized, which saved its economy.

      So how about jobs and money for people?

      1. alex

        “The problem with leaving the domestic defense department in place is that when you’ve got lots of bombs, you tend to use lots of bombs …”

        Keeping domestic military spending at its current levels while unemployment is high doesn’t make military adventures more likely. Consider that we launched two wars (one justified, one not) back when our military spending was much less.

        Even if someone disagrees with the above, but they believe in Keynesian stimulus, they shouldn’t promote domestic military cuts in response to deficit hysteria, as anti-war advocacy of domestic military spending is a separate issue. Either stimulus spending takes precedence over the short term deficit or it doesn’t.

        1. Barbyrah

          With all due respect: This is being presented as a very stark, “either-or” thing…as if those who work war-related jobs are incapable of making any other kind of “contribution.” In other words, only two choices allowed: They either continue making more bombs and weapons – or the U.S. ends up with more unemployed. Period. End of story. Case closed.

          Suggestion: Perhaps if we allowed ourselves to think beyond the constructs of the current (narrow) paradigm, we’d find there are more than just two options.

          1. alex

            Barbyrah: as if those who work war-related jobs are incapable of making any other kind of “contribution.”

            Not at all. But in the short term those who work for the military (directly or indirectly) are as unlikely to find new employment as anyone else who finds themselves out of work these days.

    3. Eureka Springs

      No excuses! MIC is a monster which must be destroyed (at least 85 percent of it). Just like much of the FIRE sector.

      Continued spending of trillions with millions of people working directly towards our own demise is the worst option. Just because those people have no idea what it’s like to work towards peace or within the rule of law… or that this country doesn’t have a jobs plan… is no excuse. There are plenty of people/ideas/jobs plans out there for these folks to stay busy. Freeing up that money would both allow for other jobs, and take a while since many of those employees would need to first clean up their toxic bases. Seems only fitting those who screwed up the environment be the ones to polish toxins off grains of sand for the rest of their lives…) Or Dawg forbid, utilize some or all of their old budgets to work towards improving national infrastructure projects.. green grid, green power, rail, fiber internet to every home on the electric grid etc.

      1. alex

        “MIC is a monster which must be destroyed”

        Then you should explicitly say that you believe that takes precedence over unemployment.

        “There are plenty of people/ideas/jobs plans out there for these folks to stay busy.”

        In the medium/long term, yes. In the short term, the sort of sector switching you’re talking about, with its attendant delays and frictions, is counterproductive to stimulus. Note that I’m not advocating any increase in domestic military spending, just not cutting it right now. Spending increases can go to things like infrastructure and green energy.

        1. Eureka Springs

          “Then you should explicitly say that you believe that takes precedence over unemployment.”

          If that were the only alternative, I would say it. I think your false premise/ lack of imagination represents far to many in our society. Seek help from those who don’t suffer from such malady… and perhaps seek treatment for stockholm syndrome. The unitary executive, congress in complete abrogation of its duty and MIC is now asserting they are in and willing and able to wage war anywhere in the world. If you think we the people will are immune or will never face retaliation for this active policy… too many people will get what you deserve. This cannot end well if we don’t stop it ourselves and quickly.

        2. YankeeFrank

          Sorry alex but that is a bullshit assertion. Defense dollars are notoriously un-stimulative in that dollar for dollar defense spending does extremely little to actually add jobs. Much better would be to cut $300 billion from defense and add $300 billion in infrastructure redevelopment/manufacturing redevelopment. THAT would create many more jobs and ACTUALLY DO SOMETHING USEFUL FOR THE COUNTRY. And the angle supported by most on this blog is most assuredly anti-austerity, because we are NOT stupid.

          1. alex

            “Defense dollars are notoriously un-stimulative”

            You’re failing to distinguish between short term and medium/long term effects. Dean Baker was talking about 20 year effects!

            He correctly points out that military spending in excess of what’s required to defend the country is no different economically than paying one group of people to dig holes and another group to fill them in – there is no useful product. However, digging holes and filling them up (an example Keynes gave) does provide short term stimulus. Certainly that’s not what one would choose to spend _additional_ stimulus funds on but, as I already pointed out, _cutting_ domestic defense spending in the short term to switch it to other projects leads to the sort of delays and frictions that are the worst enemies of Keynesian stimulus.

            Sometimes you can’t have your cake and eat it too.

        3. Patricia

          And not only does the military keep our civilian population in jobs making guns/artillery/etc, but it provides mind-broadening educational work for our young adults overseas.

          And incidentally, it depletes the population of those young adults, requiring fewer to find employment when they finally get back home, which in turn is a greening of America all on it’s own.

          By all means, keep the MIC just as it is!

          Ach…

          1. alex

            “military … provides mind-broadening educational work for our young adults overseas … depletes the population of those young adults”

            Which is why I specifically and repeatedly said, and *emphasized*, that I was talking only about *domestic* military spending. I also detailed my reasons for talking specifically about *domestic* military spending. Next time please address the actual post.

      2. Foppe

        Even within military spending, it might be useful to distinguish between labor intensive and capital intensive projects; spending money on keeping soldiers employed costs almost nothing compared to bombing shit, or subcontracting to Blackwater, Halliburton, Lockheed and friends.

        1. YankeeFrank

          “By this standard, military spending does very poorly. It creates about 12,000 jobs per $1 billion in spending, compared with 17,000 for the green economy, 20,000 for health care and 29,000 for education. This means that when we spend $1 billion on the military rather than green investments, health care or education we are forfeiting between 5,000 and 17,000 jobs. Creating more job opportunities in this country therefore means moving money out of the military and into socially beneficial domestic spending.”

          http://thinkprogress.org/security/2011/09/16/320958/pentagon-military-spending-cuts-unemployment/

    4. wunsacon

      >> If you want Keynesian stimulus then it’s a terrible idea to cut our _domestic_ military spending in the short term.

      It matters how we choose to spend our Reagian stimulus. Instead of bases and wars, we should spend it on scientific research in energy, medicine, etc.

    5. justanotherobserver

      military spending has very little payback in terms of improving society.

      it would be much better to spend that money on actualy INFRASTRUCTURE. So the idea is to spend the money on things that benefit society in the long term.

      Bombs, bullets and airplanes the military itself don’t want don’t qualify.

      Your a lefty and you don’t get that ?

    6. ambrit

      Friends;
      Does anyone here have a line on figures that contrast the percentage of Federal funds spent for Defense vs. Domestic programs impact ‘on the ground?’ Ie. how much of each actually benefits a middle class or below citizen vs. being cycled through unproductive financial schemes? I suggest that Defense spending would do a lot more good for the Nation if diverted to productive endeavours.

      1. ambrit

        Thank you Yankee Frank. I missed your 12:02 comment earlier. As the insurance folks say, “The numbers don’t lie.”

  4. Jim Haygood

    Proof that crowd-sourced humor is the best: the Guardian reports that Obama has turned the White House kitchen into a microbrewery, and asks what the brew should be called. Among the entries:

    Turncoat pale ale
    One Term Bitter
    D.C. Spiked Kool-Aid
    Trojan Horse Ale
    Outta Here Beer
    Old Washingslosh — the pale stale ale with the foam promised in 2014
    Foggy Bottom Foam
    The Audacity of Hops
    Hops and Change American Beer
    Obamabrau
    Teleporter
    Photo-op Special Dark
    Warmonger Malt Liquor
    Third Rail Pale Ale
    Medicale
    Osama bin Lager

    http://www.guardian.co.uk/commentisfree/cifamerica/2011/sep/16/obama-white-house-beer

    1. ambrit

      Beer Consumers;
      No matter what brand of suds you choose, get it in our new, improved, Klepto-Crate. A steal at any price.

  5. Jim Haygood

    Here is a very anomalous data point amid the sea of negative news: the Consumer Metrics Institute Daily Growth Index (which measures year-over-year changes in consumer demand for on-line discretionary durable goods) crossed above zero on August 3rd, and now is screaming higher at a y-o-y rate that’s approaching 10 percent:

    http://www.consumerindexes.com/

    Is Banzai Ben’s beyond-UFB 36.7% quarterly hike in M1 (at an annualized rate) finally gaining traction, as inflation keeps accelerating? If so, welcome to Bubble III!

    http://federalreserve.gov/releases/h6/Current/

    The real economy may suck. But those banana-republic style 30-percent-plus expansion rates (similar to what one sees in Venezuela and Argentina) make our Shoppers Paradise look mighty good on paper.

    Pimp my house, Bennie! Que rico!

      1. Jim Haygood

        Apparently not. From their Q&A:

        7) Our data is inherently inflation free — or “real” using the terminology of the BEA reports. At the very lowest level we measure the year-over-year changes in consumer demand for units of like-kind goods. In a sense we are measuring the number of cars, homes or widgets being consumed by on-line shoppers — and we therefore do not need to apply any “adjustments” to compensate for changes in price levels.

        The BEA, on the other hand, has to use elaborate (and often noisy) “deflaters” to convert their “nominal” data into inflation adjusted “real” numbers. As a consequence the BEA numbers from time to time can be taken hostage by aberrant (or “seasonal”) inflation factors that result in distorted reporting.

        So the pop in the index — allegedly — reflects rising unit demand and not just rising prices. That’s even more surprising.

  6. nestor

    re American jails

    This is not something limited to the Los Angeles county system. Every year Amnesty International details numerous flagrant human rights abuses throughout U.S. prisons and jail systems.

    It is almost unheard of for the worst human rights abusers to even be fired from their jobs, much less held personally accountable. Usually the City or State involved happily pays out millions of taxpayer dollars to the dead torture victim’s family for the right to continue torturing prisoners.

  7. Susan the other

    Tim Geithner got told to keep his advice to himself. The EU doesn’t want to entertain any more bad ideas. And it looks like they are so disgusted with us that they don’t care if we go down in flames. Would the EU have any more respect for the US if we, our financial sector, had admitted to their fraud and incompetence in 2007 when the Europeans first confronted us on our MBS instruments? We knew they were a big mess and we knew it as early as 2006 when the first defaults and foreclosures exposed the bad documentation. The fraud. The decimated land title system. Not to mention other unconscionable loans and investments proffered by our “banks” all over the world. The Greek deal of currency swaps specifically done to hide their debt so they could join the EU. Those CDS written by GS and others are the only reason our Fed rushed to bail out bonds held by French banks. For all we know those CDS contracts were strong-armed out of our banks because the EU knew we fudged Greece’s books. Our reputation is toast. It didn’t have to be this way. From the moment anyone learns about the fraudulent mess we have created, the first thought is: Lets admit it and take care of it. Nobody, except a bankster, thinks: Oh don’t tell anyone, we can hide this and fake it. Apparently Timmy has finally lost his credibility.

    1. Hugh

      European banks speculated just as heavily as American banks. They are just as insolvent. Europeans elites are every bit as kleptocratic and illegitimate as American elites. They aren’t out to fix anything on either side of the Atlantic. Finance officials in Europe are just telling Turbo Timmy to take a flying leap because Helicopter Ben has already intervened with his currency swaps. They may delay contagion to the core for a little while but they do nothing for the contagion in the South and East. So at some point, likely not to far off, markets will start reacting to this and we will be back to where we were a few days ago.

      1. Typing Monkey

        I generally agree, but:

        Finance officials in Europe are just telling Turbo Timmy to take a flying leap because Helicopter Ben has already intervened with his currency swaps.

        It’s a bit more than that–Turbo Timmy is asking them to commit political suicide, and they obviously won’t do it. It appears that Turbo is a little tone deaf to European politics, which makes you wonder about the quality of his briefings.

  8. justanotherobserver

    Re the piece about child weightlifters:

    that’s child abuse.

    and by the way, it should be illegal for teenagers to play football. I know so many adults with bad backs and knees and they got them playing football in high school.

    It’s ridiculous. And that doesn’t even take into account long term damage to their brains from getting their heads smacked around.

  9. Hugh

    We have epiphyseal (growth) plates at the ends of our long bones which allow for growth of our skeleton to its adult size. In adulthood these plates harden increasing the strength of the bone but no longer allowing linear growth of the bone. While we are still growing, these plates are not firmly attached to the long bones. So excessive stress can damage them and the normal development of the bone.

    Then there are the muscular attachments to the bone. These too during growth are not as strong as in adulthood and can be severely torn/damaged by excessive stress.

    The shorter version is that children’s bodies are not just smaller versions of adult ones and should not be treated as if they were.

  10. Santos Guero

    About the mini-weightlifters. Not sure what’s worse, Bloomberg’s reporting or pushing kids as young as three into programmed athletics. Let’s see, Bloomberg quoted the director of a “health club” and the president of a “training outfit” as well as a psychologist. Surprisingly, the guys with an interest in selling their services didn’t see a problem with kids lifting weights. As for the psychologist, good point about messing with kid’s self-image, but the real issue is more likely being a cripple at the age of 30. Missing… any comment from a qualified medical expert like, oh, say a pediatrician. Bloomberg did note, however, that a study by a hospital reported that injury might be a problem. But a later quote from the health club director made it clear this is really nothing to worry about. Oy… as Brad DeLong says, we need a better press corps in this country.

  11. Typing Monkey

    Can somebody explain the mechanics of leaving Euroland?

    Germany could do it if it chooses, of course, because if it reverts back to the deutschmark, other countries would presumably continue to accept the currency.

    But if Greece goes back to the drachma, who would accept it? Other EU members would insist on getting paid in Euros (or even roubles :) when it comes to trade or laons. How would this work exactly?

    More likely, Greece would just default and retain the Euro as a currency (they have few alternatives, because nobody would accept them). Here’s where I am clearly missing something:

    OK, so Greece defaults and end up with a currency that provides the same purchasing power as the day before it defaulted (ie, it retains the Euro). This seems to be ok for most people (except for the creditors, who end up a bit poorer). Interest rates may go up significantly for the government (which is a good thing), but would it for Greek corporations, who could borrow money from elsewhere in the Eurozone, provide collateral, and be subject to the typical consequences of non-repayment? Ditto for individuals.

    And so if everything works more or less ok, what stops the rest of the PIIGS (lol–after Greece, only the PIIS remains…) from doing the same thing?

    Obviously this can’t continue forever, because the Euro will start to really crash after a pattern is established. But it seems that the first to default would actually be in a pretty decent position, as German backing for the currency renders Greece’s default insignificant.

    Obviously, this analysis must be wrong, but where’s the flaw?

  12. Typing Monkey

    Re: Support for Obama slips

    I find it curious that Clinton and Obama (both Dems) attempt so-called “triangulation” strategies, whereas W (R) used the “keep your base”. It certainly explains why politics have been tilting more to the right over the last 20 years.

    But why do the Dems attempt triangulation (ie, adjust to the electorate’s wishes) while the Repubs attempt to convince the electorate to support their (Republicans’) existing wishes? You’d have thought that given the high unemployment numbers, it’d be the Repubs trying to triangulate and the Dems would shift left. That doesn’t seem to be the case, though.

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