Links 7/24/09

In Her Majesty’s Service, Loyal Minion Courts the Queen’s Swans on Thames Wall Street Journal

Hot secret behind toucan’s bill BBC

Chinese Scientists Reprogram Cells to Create Mice Wall Street Journal (hat tip DoctoRx)

Humans Glow in Visible Light LiveScience

Amex, Capital One card losses dampen results Reuters

Panting Dog. BreakingViews. On Cerberus’ woes. Couldn’t happen to a more deserving bunch.

Lack of ambition leaves Europe in the slow lane Philip Stevens, Financial Times. Right up Vinny G;’s alley.

Jobless Checks for Millions Delayed as States Struggle New York Times

Detroit Heads For Bankruptcy; 50 Cities Must “Shrink to Survive” Michael Shedlock

Traders Profit With Computers Set at High Speed, New York Times. The MSM finally takes notice of one of Tyler Durden’s favorite hobbyhorses, but no credit to him. Of course, having a handle like that WILL lead to wariness among Respectable People.

Another Crack Opening Up? Michael Panzner. Makes the case that a CIT bankruptcy would be a much bigger deal than many assume.

Rewriting Analyst History Paul Kedrosky

All stimulus roads lead to China Barry Eichengren, Project Syndicate (hat tip Mark Thoma)

The Debate Continues Tim Duy

Antidote du jour (hat tip reader Richard). I had not idea llamas were this smart and compliant. I don’t think you could get many breeds of dogs to pay attention for that long.

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  1. fresno dan

    I want a llama! The real question: can it distinguish a can of coors from a can of miller? Also, vacuuming would be good.

  2. Steve Koch

    A couple of quotes from the NYT article about automated trading:

    "Although precise figures are elusive, stock exchanges say that a handful of high-frequency traders now account for a more than half of all trades."

    Does not encourage the retail investor, does it?

    "Loopholes in market rules give high-speed investors an early glance at how others are trading…While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee."

    How can this be legal?


    Regarding the llama picture, how can that fence be high enough to keep the llama from jumping it? My miniature schnauzer can jump a fence that is more than 3 times his shoulder height (it might be nearly 4, it was kind of difficult to measure his shoulder height). He can also climb a ladder.

    Dogs are also very good at understanding human gestures, even better than chimps:

  3. Dave Raithel

    As one of the un-respectable people, something about this reminded me of the wire scam in "The Sting."

  4. LeeAnne

    "Lack of ambition leaves Europe in the slow lane"

    The title should be 'socialism is a bad thing' since the article is in an influential publication strategically placed in the middle of the US health care debate.

    In the war against the American people's demand for basic health care services with an option to the back breaking interference and exploitation of private insurers, the opposition's accusation of 'socialism' is the weapon of choice.

    Polls have found that as many as 72% of the American people are in favor of a public option for health care insurance.

    How, in a democracy, can the opposition have any credible power against the wishes of close to an estimated 72% of the people?

    Corporate ownership of the government and of the media is how. Pretending it isn't so helps.

  5. Steve Koch

    "All stimulus roads lead to China" by Barry Eichengren does not seem realistic. BE suggests that it is "obvious" that China should spend more on imports. China has been extremely successful with its export driven approach. If China cannot export as much (because the USA has finally broken its ATM) then there is a huge amount of pent up demand in China for basic services.

    BE also says: "China is worried that its more than $1tn investment in US Treasury securities will not hold its value. It wants reassurance that the US will stand behind its debts. It therefore wants to see a credible program for balancing the US budget once the recession ends.".

    What is the probability that Obama (or anybody else in the unlikely event that Obama does not repeat in 2012) is going to balance the budget anytime soon? What China does have with that $1T in T notes is the ability to extract concessions from Obama, (especially at election time (which is nearly all the time in the USA)).

  6. Steve Koch


    I understand the motivation to make health care insurance available to all American citizens (especially to our elders, kids, and the handicapped).

    What I don't get is why it is a good idea that the government itself actually runs the insurance program from inside the government. Wouldn't giving vouchers to buy insurance be cheaper, more efficient, more responsive to the customer, more flexible, and less prone to political corruption/moral hazard? I don't want the government telling me what to do medically, it is my body and my choice.

    Recent Gallup polls ( indicate that most Americans do not approve of the way that Obama is handling health care reform (independent voters disapprove at a 55-40 rate!). The polls also indicate that most Americans think that the most important goal of health care reform is to reduce cost (even more important than extending coverage to everybody by a 52% to 42% margin).

    Do you have a link for your poll "that as many as 72% of the American people are in favor of a public option for health care insurance"?

  7. donna

    Well, dogs aren't that good at colors… mine isn't fond of putting his toys away, either. He prefers dragging them all out and spreading them all over the floor. Just like the kids…

  8. Anonymous Jones

    Steve —

    Why do you equate a public option of insurance with not having a choice over what to do with your body? How does a public choice stop you from choosing a private insurer? And anyway, you have more of a choice over dealing with your own body with a private insurer? Surely, this has not been your experience with private insurers. And further, no matter how universal a public health care system is, you would always be able to spend your own extra private funds on private care. Private care would never be illegal. Nothing you have said and nothing the government has proposed would lead anyone rational to the conclusion that a public option would lead to the "government telling [you] what to do medically."

    Finally, what is your basis for believing vouchers would be so much more efficient? Are there any studies in any comparable area that would support your idea? Medicare and the VA have actually been well run most of the time and compare quite favorably to most private insurance. How does that fit into your beliefs about a public option?

    Opinions always encouraged here; fact-based ones even more so.

  9. LeeAnne

    Steve Koch,

    The private commercial profit making sector interferes with the need of all Americans for reasonably priced conveniently located basic health care. Therefore, a government solution is essential.

    Medicare is a government administered program of privately provided health care that costs 3% compared to the private sector administrative cost of 30%-50% and higher. Insurance is not a provider of health care, beyond a reasonable 3%-10% normal profit margin, it is a predator, extracting very high fees for private health care transactions.

    One health insurance executive is widely reported to have received $1.7 Billion in salary, information available in a search engine such as Google. How many poor children could have received basic preventative health care with that money?

    "A clear majority of Americans — 72 percent — support a government-sponsored health care plan to compete with private insurers …"

    I admit this statistic does not refer specifically to a public option, and I personally favor a single payer system, but statistics and polls are a different discussion.

    For more information on the desperation of Americans see
    Free medical care this weekend in Virginia

  10. Anonymous

    I would rather have an organization that is not into greed between me and my health care. How can that not make perfect sense? Our government's intentions are much purer than those of corporations who's focus is on profit over social good.


  11. Steve Koch

    Anon Jones:
    The public option will surely drive the private options out of business. I see no reason for the government to be in the insurance business (or the home lending business or the car business or …). Government is far less efficient and responsive than private enterprise in general so why should health care/insurance be any different? Americans (justifiably) hold politicians in profound contempt, why should we put more of our economy under their control?

    Great name, double entendre, right? I'm much less trusting of government than you are. I think governments tend to be corrupt and inefficient. Power is a zero sum game, the more power the government has, the less power I have.

    Medicare has low administration fees but wastes huge amounts of money due to fraud. I don't disagree that all American citizens should have health insurance, I just prefer that it be done with vouchers rather than a government bureaucracy.

  12. Yves Smith

    Steve, Koch

    Your sweeping and undocumented generalizations are unpersuasive and simply reveal ideological bias. Read Felx Rohatyn's book on the stunning large scale infrastructure projects implemented by government, well beyond the time horizon and complexity of the private sector to execute.

    Then tell me if the private sector is always and ever so perfect, why US health care costs twice as much on average as that of the totally or largely socialized systems in other advanced economies, and delivers no better health outcomes.

    In fact, in England, the poorest 1/3 of the population (controlled for age and ethnicity) has better health outcomes than the richest 1/3 in the US, who can presumably afford the best our system has to offer. This is with the much derided and not well loved NHS. (in fact, the study was not looking for US/UK differences, they were looking for differences on health outcomes due to differences in income and chose the US and UK. They were stunned to see the differences between the two countries).

    I'd rather have a system that was cheaper and delivered better results. You'd rather persist with you anti-government prejudice and be milked by a horrid and inefficient system.

    I will grant you the Obama program does not represent much in the way of progress. But you are flat out wrong in your general premise.

  13. david galbraith


    I'm interested to know your views on the mechanisms whereby the government can outperform free-markets, with respect to healthcare.

    There's something wrong in US healthcare that seems to have nothing to do with public/private ideological preference.

    I suspect that healthcare costs overspend in the US is partly to do with preserving things like outmoded bureaucracy where interests are protected by lobbyists, but there is a bigger factor: litigation.

    I have lived in the US (ten years) and UK. I have been poked and prodded and examined ever since I came here for what often seems like, unnecessary 'ass covering' procedures whereby the risk created by the procedure itself (x-ray or whatever) outweighs the chance of illness (according to the opinion of my UK doctor friends).

    Providing cost estimates for this inefficiency is very difficult, but it seems like a significant percentage of healthcare overspend in the US has nothing to do with either government or private organization, but a structural and cultural difference whose root cause is the way the legal system operates (pro-bono litigation etc.)

    I'd don't see anyone mentioning this in current healthcare reform proposals, something which would have to be addressed de facto because universal healthcare revolves around long waiting lists and risk prioritization. Your doctor sometimes has to decide to avoid treatment that could save you. These are a cultural anathema for those with healthcare in the US, and which people would sue over.

    The economics don't work without legal reform.

    More US vs Europe anecdotal experience from a UK expat here, if anyone is interested:

  14. Anonymous

    It's interesting that people often have such a negative response against a health insurance option administered by the government. Yet, those same people have no problem with government-run options for other basic necessities such as water and utilities. We use a socialist system now in many areas like these and people think nothing of it. It is low cost and it works.

  15. david galbraith


    Yes, it turns out I was wrong, the truth is much simpler – doctors get paid for the number of procedures they recommend, a completely mad system. of misaligned incetnives

  16. david galbraith


    … I should recount a story which may horrify any American traveling.

    My sister, who is a doctor in the UK was told not to treat an American if a pilot called out for a doctor due to the insurance risk.

    Anecdotal, sure, but terrifying.

  17. Dan Duncan

    Attempter: What are you talking about?

    You have a link to an article written by a doctor for the New Yorker about "The Cost Conundrum" of healthcare…and that's it? End of discussion–the whole tort liability issue is settled for you. And any claim to the contrary is "fraudulent".


    "The Cost Conundrum" refers to a comparison between El Paso, Texas and McAllen, Texas. McAllen, Texas has 2x the healthcare costs per enrollee. The author examines why McAllen's healthcare costs are too high.

    The main culprit: McAllen orders way too many tests. What's more, the excessive tests do not prove to enhance the care of the patients.

    ONLY THEN, the doctor examines the claim that the doctors in McAllen order these tests as defensive medicine in response to excessive malpractice suits. [In other words, the article isn't even directly about malpractice and defensive medicine.] It turns out that both cities are subject to the same malpractice civil procedural laws, so it's a specious argument to claim that McAllen's higher costs are the direct result of defensive medicine.

    OK, fine. But from this tiny comparison, you not only conclude–but you declare: "So it seems the claim that it's defensive medicine driving up costs is fraudulent."

    Do you even think about this stuff before you write it?

    It's McAllen Texas. One city. In an article in the New Yorker. Medical Malpractice awards isn't even the central point to the article. And from this…claims of defensive medicine driving up costs are "fraudulent"??

    Atul Gawande, the author of this piece, wrote in another article about the fact that his medical insurance costs him over $500,000 a year. You don't think this is factored into costs that are passed on to his patients?

    Here are some other quotes…directly from the very Gawande that you cite:

    "The average doctor in a high-risk practice like surgery or obstetrics is sued about once every six years. Seventy per cent of the time, the suit is either dropped by the plaintiff or won (by the doctor) in court. But the cost of defense is high, and when doctors lose, the average jury verdict is half a million dollars. General surgeons pay anywhere from thirty thousand to two hundred thousand dollars a year in malpractice-insurance premiums, depending on the litigation climate of the state they work in; neurosurgeons and obstetricians pay upward of fifty per cent more."

    But this doesn't contribute to healthcare costs?

    Here's another quote from Gawande:

    "This is our situation in medicine, and litigation has proved to be a singularly unsatisfactory solution. It is expensive, drawn-out, and painfully adversarial. It also helps very few people."

    "There is an alternative approach, which was developed for people who have been injured by vaccines."

    And David Galbraith…that's it? Attempter puts up some lame reference to an article in The New Yorker about one small city in Southern Texas…and Problem Solved???


  18. attempter

    I am not a health care researcher.

    But I am aware of a prominent article, highly praised by researchers and other experts, which makes a point. So I logically cite the article.

    In other words, I act in exactly the way any reasonable person acts with regard to something which is not his specialty.

    As for the term "fraudulent", I did not say malpractice insurance and defensive medicine play zero role in driving up costs.

    I said the right wing talking point that this is a major, or some even say the only factor, is a fraud and a lie.

    And now I say it again.

  19. Dan Duncan

    Attempter: That's not what you stated.

    The article is an article for the New Yorker for crying out loud. You're treating it as if it's some prominent peer reviewed study. And who are the researchers and highly respected experts citing this article? Other bloggers?

    Then you write: "In other words, I act in exactly the way any reasonable person acts with regard to something which is not his specialty."

    Are you kidding? That's your explanation for making such a wildly sweeping assertion??? That you're a reasonable person opining on something that's not your specialty?

    Finally…Yes, it's a fair point that it's incorrect to state that the problem in health care resides solely with malpractice claims. But, that really is Straw Man Reasoning on your point, since no serious commenter on this issue is asserting that it's the ONLY cause.

    It is then debatable about whether malpractice is a major component…

    But if you truly want health care reform…and you are actually thinking for your self and not being a Left Wing automaton…why not just remove the malpractice issue from the debate? Without regard for whether malpractice claims are a major component of our health care problems, do you really think that the current system is efficient and fair…a system that exists not for the benefot of society, but for trial lawyers? Do you really think it doesn't need reform? Do you really think that if reform is instituted your life will be worse for it?

    So…we could get tort reform. It would help reduce costs. Not all the way to what's needed, but it would help. To say otherwise—that's fraudulent.

    Plus, once tort reform is instituted, it's no longer used to obfuscate the argument. Remove that part of your opponents' arguments, and then you can focus on the issues that really matter…the issues that "truly" drive up the health care costs.

    But tort reform is not on the table. Just this fact alone hurts your chances at obtaining true reform and emboldens the opposition.

    But then, it's not really about health care reform, is it? It's about Left vs. Right….And since the Left says "No to Tort reform" and as good little soldiers, so do bloggers who don't think for themselves and who explain the lack of independent thought away with such throw-away statements as:

    "In other words, I act in exactly the way any reasonable person acts with regard to something which is not his specialty."

    In other words, you think in the way that Leftist bloggers tell you to think.

  20. attempter

    In other words, you think in the way that Leftist bloggers tell you to think.

    Now, do I think in the way leftist bloggers tell me how to think, or am I one of the leftist bloggers who tell others how to think?

    You seem to have trouble making up your mind on that.

    As for "emboldening the opposition", I could not possibly care less about that. There is no powerful opposition, other than that which the craven Obama insists on conjuring up like a bogeyman in his closet, and just as real.

    Believe me, if I had come in as president with Obama's mandate and the people riled up they way they were, the banks tottering and the republicans in convulsions, you would've seen a very different method of dealing with the phantom "opposition".

    That would go for the traitors among the Democrats as well.

    So no, I don't care about appeasing anyone.

    As for the merits of tort reform, you have it backwards. Since it is a minor factor at most, it can be left to be dealt with (if necessary) after the big issues have been tackled, which are transformation of the coverage and payer system, transformation of the way doctors and hospitals are paid, and a rigorous cost-effectiveness of treatment measure.

    Funny how the conservatives are so gung-ho about cost-benefit analyses (i.e. how they would affect profits) for anything where the public would benefit, but are die hard enemies wherever corporate rent-seeking is involved, e.g in the case of health care. Now why would that be?….

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