Links 10/27/09

Sorry for few posts of my own, a terrible deadline week and I am behind right now to boot. But I am very pleased with the quality of guest posts and hope you enjoy them.

Butterfly’s Wing Ears May Detect Birds LiveScience (hat tip reader John D)

Chinese railways and speculating pig farmers Michael Pettis

David Brooks Thinks the Government Can Only Be Trusted to Hand Out Money to Banks, Not to Put Conditions on It Dean Baker

Are Big Banks Better? James Kwak, Baseline Scenario

Let A Hundred Theories Bloom Joseph Stiglitz International Business Times (hat tip Mark Thoma)

Twelve Reasons For A Job Loss Recovery Michael Shedlock

For Runaways on the Street, Sex Buys Survival New York Times. This has long been true, but apparently it is becoming more common.

Reports From Showdown In Chicago Seeing the Forest

Climate chief Lord Stern: give up meat to save the planet Times Online. If you must eat meat, chicken is very efficient (in ratio of grain consumed by critter to meat produced).

Dodd Seeks to Freeze Credit-Card Rates Wall Street Journal. Couldn’t happen to a nicer bunch (assuming it happens, of course).

McDonald’s pulls out of Iceland Financial Times

Goldman Sachs says “dark pools” help investors Reuters. And what did you expect them to say?

Back-Door Taxes Hit U.S. With Financing in the Dark Bloomberg (hat tip reader John L)

Senate Pushes for Public Option Without Obama’s Support Huffington Post. One colleague tells me that an insider told him that Obama was never serious about the public option, it was a mere trading chip.

Detroit house auction flops for urban wasteland Reuters (hat tip reader John D)

Antidote du jour:

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  1. Skippy

    Re health-care: With in the last week two of my children have injured themselves. Firstly my youngest daughter in 5th grade whilst at school, she went to lean on a pole and missed and landed straight onto her left arm. She went to the nurses office and they promptly called the ambulance. Funnily enough mom is a paramedic and attended, after some penthrane for the pain they transported her down to the local GP (MD in USA) where a reference for an x-ray was given. So I had driven down to meet I them transported her to the x-ray clinic not far away, whilst standing in the x-ray both with the tech I could see the hairline fracture to her upper left arm so back to the GP.

    So after a 15 min consultation, he suggested we head off to one of the many hospitals we have in my little city. My wife was still on shift and asked me to meet her at one of these hospitals children’s ER. We waited only about 15 min in triage and another 30 min in waiting room before being seen by a children’s orthopedic specialist, a sling was applied with a outpatient appt scheduled in a weeks time.


    Also a few days ago my youngest son in prep ran into the striker side of a door and managing to split open 4cm along the crown, to the bone on his head. After a little triage at home it was back off the same hospital. Again around 15 min triage and a bit longer in waiting this time (resus was required for another child at that time) four stitches were inserted and a script for antibiotics rendered.


    We have 4 kids all but one were born public, in fact the private experience was horrible( mid-wife did all the work even the delivery as the OBYGN we contracted was at an other hospital waiting to deliver [aka over booked] and did not arrive until after birth where upon her arrival blew up the mid-wife for not having the light properly adjusted so she could nick a few stitches in and hand us the bill), where the others were via the birth center and with the same mid-wife on all occasions. Our room was 10m x 8m with en-suite, spa tub, queen-size bed, fold out couch and many other nice things. This room was available for 24hr after the birth and then if one wishes to stay on a semi-private room is organized, not that we need it as we went home with in 48hrs or less with the last three.



    Skippy…ambulance is free over hear, just a small fee attached to your utility bill around 80 bucks if I remember correctly and every one is covered, even the homeless. In fact this service provides a much stabler society and benefits all economically and other wise. Still if you like you can go private and pay big premiums just to have champagne or sushi for lunch..go figure.

  2. Andrew Foland

    The mark of seriousness about the public option was its name: public option.

    When politicians are serious about something, they give it a name. For instance, if you really, really want a bill that will allow pollution, you will name it the “Clean Skies Act”. I don’t mean to imply that a health care name would be necessarily disingenuous, merely that it would definitely exist.

    If they had been serious, then the public option program would have been introduced to great fanfare on day one as something like “Americare”.

  3. dearieme

    “If you must eat meat, chicken is very efficient”: but usually it doesn’t taste of anything. We prefer guinea fowl.

  4. Dan Duncan


    Gotta hand it to the level of sophistication employed by those crafty marketing execs within The Bovine Community….

    Concerned about the ever-increasing levels of cow-slaughter as Americans continued to eat more beef….these execs came out with the simple appeal not to kill the Golden Goose… and they gave us: “Got Milk?”.

    Unfortunately, it turned out that this first campaign was no match for the Cattle Ranchers’ resounding rejoinder of “Where’s the Beef?”

    Undeterred (this is survival after all), the Bovines, who find the term “cattle” to be culturally demeaning and offensive, came back with another iconic entry our “cultural” lexicon by blanketing 10,000 billboards with “Eat Mor Chikkin”.

    Years passed…and all one had to do was look at the Ever-expanding American Waistline to reach the diabetically obvious conclusion: The consumption of chickens and cows is not mutually exclusive.

    The Bovines realized a new approach was needed. Something modern and relevant for the times. They held a brain-storming session, as they searched for the next Big Campaign….

    Mrs. O’Leary’s cow suggested a fire, but that was deemed too “old Skool” by the community and not appropriate in this time of terrorism….

    A pun, having to do with bulls and shit was suggested, was ruled out as “Untasteful”.

    Then, Elsie had a Eureka moment:

    “Let us go the way of General Electric and Al Gore and fight climate change! We’ll have an Einstein Cow who will write the following formula on highway signs all over the country: ‘Beef=CO2′”

    Another cow brought up the point that Global Warming scientists are also concerned about all the methane gases produced by bulls and cows.

    Laughter ensued.

    After some research, it was determined that in fact, Global Warming scientists have voiced concern about Cow Flatulence.

    A silent (but deadly) pause came over the Bovine Community….

    “How are we going to respond to this?”, they asked.

    Elsie, channeling Don Draper, took a deep drag on a Marlboro…and with a firm resolve that can only come from being milked over 1 million times went Mad Cow on the questioner and said:


    1. DownSouth


      Thanks for the link. That’s an absolutely superb overview of what ails the American economy, and Grantham has a wonderful way with words.

      However, I don’t see how you conclude that Grantham “takes not just leadership but the American people to task.” Here’s an example of what he wrote from the first article:

      Misguided, Sometimes Idiotic Mortgage Borrowers
      The more misguided or reckless the borrowers, the more determined the efforts to help them out, it appears, although it must be admitted these efforts had limited effect. In comparison, those who showed restraint and either underhoused themselves or rented received not even a hint of help. Quite the reverse: the money the more prudent potential buyers held back from housing received an artificially low rate.

      And here’s an example from the second article:

      The more complex and confusing new financial instruments became the more “help” ordinary citizens needed from the experts…. At the extreme, this great advantage in knowledge and information held by the financial agents has the agents receiving all the rewards, according to the recent work by my former partner, Paul Wooley, and his colleagues at the Wooley Centre for the Study of Capital Market Dysfunctionality.

      If we consider “the people” to be the consumers of financial products, it seems like almost all his criticism is directed towards the creators and vendors of those products.

      All this discussion begs a very important question, and that is this: “Why aren’t more honest, principled bankers and finance professionals up in arms about what is going on”? It seems they have much more to lose from the actions of ruthless criminal bankers and financiers than even the average citizen. Do the more principled bankers and financiers believe they will be immune to the inevitable public backlash to immoral and criminal bankers?

      Or is it that they have the same problem as economists, and that is that the percentage of those with some inkling of honesty and integrity is so small that they just get drowned out by the crowd? (For a hint of the deplorable state of the economics profession, and how the dissident few who speak out against the ruling orthodoxy get pummeled, see this article )

  5. Kid Dynamite

    yves – judging by your tone, it sounds like you do NOT think that dark pools help investors. why not? if you’re in the “high frequency trading is a leech on the markets” camp, which it seems the vast majority of people are, then it should be very easy to see that dark pools help traders hide from high frequency systems which trade faster and make better use of information than they do.

    1. Skippy

      Did you not get the memo.

      Rules of Acquisition:

      34 War is good for business.

      35 Peace is good for business.

      Skippy..aka..Grand Nagus..oh and dont forget #76 Every once in a while, declare peace. It confuses the hell out of your enemies.

  6. winterwarlock

    upon reflection, I should have been more specific:

    the current economy is falsework, a temporary bridge to the next economy.

    the first wave wiped out male jobs; the next wave is going to wipe out female jobs, beginning in February, to include healthcare, education, and state government.

    those women who employed the bridge to add an analytical component to their capabilities are going to fair quite well in the new economy. the colder the analysis, the better, the more likely to win the economic objective, whether it’s a job, a commission, or organizational development.

    the women who assumed this structure could be a permanent residence, and employed it for the purpose of chauvinism are going to get wiped out. in the third stage, the bosses that built a permanent residence, encouraging arbitrary, malicious, and capricious behavour in management, will get wiped out.

    good luck.

  7. DownSouth

    @ “Senate Pushes for Public Option Without Obama’s Support”

    You gotta love the level of sophistry the White House is willing to stoop to in order to defeat any meaningful healthcare reform, such as this jewel:

    It is not philosophical, one White House aide explained, but is a matter of political practicality. If the votes were there to pass a robust public option through the Senate, the president would be leading the charge, the aide said.

    If the votes were there, why would there even be a need for someone to “lead the charge”?

    Any reason given, any argument made–however nonsensical, incompetent or defactualized—will be made and accepted, even trumpted, by this administration, just so long as any substantive healthcare reform goes down in flames.

    As I said the other day, the battle for significant healthcare reform is a battle Obama wants to lose.

    Not only do a majority of Americans want a public option, but Democratic support for healthcare reform implodes without it:

    Without Public Option, Enthusiasm for Health Care Reform, Especially Among Democrats, Collapses

    There is absolutely no other explanation for Obama’s inexplicable behavior other than he is bought and paid for. How many more blatant examples of his treachery do we have to have before we just stamp a big “Paid” on his forehead?

  8. MyLessThanPrimeBeef

    Regarding red meat and saviing the planet, I would like to say to our young men and women: Make love less often (Can the Catholics be right?).


    Heavy breathing leads to more carbon emission!

    So, the new slogan will be, Make Oxygen, But Don’t Make Love!

  9. Peripheral Visionary

    Re: Red meat, comparisons between meats and grains only work where there is a clear trade-off between the two. That is the case with grain-fed (feed lot) cattle, but is not the case with the range cattle of the Mountain West, where much of the land is not suitable for agriculture, but is suitable for range livestock; the same is likely true of much of Australia, Central Asia, etc.

    Consequently, red meat can certainly be sustainable; just not on the mass scale as at present. Elimination of red meat consumption isn’t necessary, just a significant reduction. I actually think that fish consumption is a greater danger to the environment than red meat, but that’s a different story.

  10. Holy Payola Batman

    Today’s scoop from Bloomberg. Be prepared: clear some space for your jaw to hit your desk/keyboard/floor.

    The NY Fed under Geithner actually crossed out the sentence in their draft AIG CDO swap deals that showed the customary haircut, typically at least 30%, leading to billions in pure payola for Goldman and a few others. They also instructed AIG to falsify or omit required financial disclosure reports, according to this report.

    1. Jim in MN

      My comment above is in ref to the Bloomberg story about the AIG swap payout..kudos to Yves for picking it up in an appropriately major fashion (see new post).

      As a stand alone comment it’s a little weird. I missed the ‘reply’ button!

  11. LeeAnne

    It may be churlish of me to complain about the slight to Soros I perceive in this instance because it’s likely to be unintentional. But the treatment of Soros by the powers that be and MSM is emblematic of how those who dare to speak the truth and manage to be heard are sacrificed for the greater American propaganda enterprise.

    Stiglitz’s name on anything interests me; a kind of imprimatur on the subject of political economics; but his name takes precedence over Soros in this article inappropriately IMHO.

    Slights to Soros in the media are serious when considered in the context of the history of attacks on him in the MSM. Again, it is only my opinion that it is retribution for his active support for sorely needed reform of US Drug Prohibition policy. Those attacks have been outrageous, even threatening at the height of 9/11 hysteria and propaganda, while not enough credence is given to his ideas and efforts on behalf of his country, “America” BTW, for better understanding of markets and open government.

    The article in today’s links on the new Soros initiative with more detail is here:
    George Soros Backs New Institute With $50 million Pledge

    Innovative Thinkers Join Forces to Meet Challenges of Global Economic Crisis

    Leading Economists and Policymakers Including Nobel Laureates George Akerlof, Sir James Mirrlees, A. Michael Spence and Joseph Stiglitz Join to Foster New Thinking.

    Excerpts form the article:

    NEW YORK and BUDAPEST, Hungary, Oct. 27 /PRNewswire-USNewswire/ — In response to the policy challenges presented by the economic crisis and the need to develop fresh approaches to economic theory, a group of top academics, policy makers, and private sector leaders today announced the creation of the Institute for New Economic Thinking (INET). (

    INET’s founding Advisory Board members include Nobel laureates George Akerlof, Sir James Mirrlees, A. Michael Spence and Joseph E. Stiglitz, Willem Buiter, … .

    The Institute was established with a pledge of $5 million per year for 10 years from Open Society Institute Chairman George Soros, a long-time critic of classical economic theory, who will fund the effort through the Central European University (CEU).

    Because he is both an INET benefactor and the proponent of a particular theory, Reflexivity, Soros said he will recuse himself from the grant making process: “While I hope reflexivity will be one of the concepts examined, there are numerous alternatives to the prevailing dogma that must be explored,” Soros added.

  12. Dave Raithel

    From the “Back-Door… Financing in the Dark”:

    “They’re suffering from Stockholm syndrome,” he said, referring to the psychological phenomenon in which hostages begin to identify with and grow sympathetic to their captors. “They are being held hostage by their investment bank.”

    Right, they’re as much victims as run-aways ….

  13. Hugh

    Of course, Obama has always been against a public healthcare option. I keep a list of Obama scandals on the web (as I did for Bush before him). The healthcare debate kicked off with a White House forum on March 5, 2009. At the end of it, Grassley groused that a public option would be unfair to private insurers. This sparked the following stirling defense of the PO from Obama:

    “I recognize, though, the fear that if a public option is run through Washington, and there are incentives to try to tamp down costs and — or at least what shows up on the books, and you’ve got the ability in Washington, apparently, to print money — that private insurance plans might end up feeling overwhelmed.”

    This was on day one of the debate and after the single payer option had already been barred form consideration or even discussion. They are not the words of a man who really cares about a public option, and surprising, only in that they are unusually inarticulate for Obama.

    What my own researches led me to conclude is that Obama made deals with the 3 major private groups involved in healthcare: insurers, BigPharma, and the medical industry, trading the personal mandate, no negotiation on drug prices, etc. for pledges to save x billions over 10 years. This was inherently a bad and stupid process because he was trading real concessions for only potential ones. This also afforded Obama and his economics team a chance they wanted to take a whack at Medicare. There certainly are some savings to be found in Medicare but Obama and crew appear to have wanted to use this as a screen to make real cuts in services.

    In any case, private deals and cuts in Medicare were this Administration’s strategy to hold down healthcare costs. The public plan was never part of this and seriously crimped some of the deals. It was always meant to be ditched. To this end, the White House has backed co-ops, triggers, and opt-outs to try to do it in. And you need to remember that the public option under consideration is actually quite weak. It would not come online until 2013 and be available to only a few million. The Medicare + 5% is a good element but it is not clear if this would be a permanent part of the plan. Even with Harry Reid’s PO with opt-out, it isn’t clear if this is an opt-out or a much weaker opt-in (presumptive action by the states to join).

    As for David Brooks, he is an idiot, a talkingpoints machine for corporatists, especially Republican ones. They feed him the points and he writes about how ordinary Americans really agree with them, even when they obviously don’t. The only thing he ever said that was true was that he didn’t know anything about economics. This of course has never stopped him from opining about them no matter how many times he is wrong about them.

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