Do speedy elephants walk or run? BBC (hat tip reader Paul S)
A Stone Age Subculture Takes Shape in the US Der Spiegel (hat tip reader John D)
New black hole simulator uses real star data New Scientist
Family feud: Nancy Pelosi at odds with President Obama Politico (hat tip DoctoRx)
Another SEC Nothingburger-2 Independent Accountant
Businesses Cutting the Growth Cushion Michael Panzner
Credit Suisse Declares the U.S. a Riskier Investment Than Indonesia Washington Independent (hat tip reader John D). Don’t shoot me, I’m just the messenger.
Wall St. Helped Greece to Mask Debt Fueling Europe’s Crisis New York Times. More detail on a story that has gotten a fair bit of play in the UK and European press. One telling detail: Goldman appeared on Greece’s doorstep in November 2009 to pitch yet another debt-camouflaging swap.
Future Bailouts of America Gretchen Morgenson, New York Times
Systemic risk: how to deal with it? Jaime Caruna, Bank of International Settlements (hat tip Richard Alford and Richard Smith)
One in 10 civil servant posts to leave London Independent
Obama’s Indecent Interval Thomas Johnson, Foreign Policy (hat tip DoctoRx)
The Last Station: Surging Into the Savage Past in Afghanistan Chris Floyd
Antidote du jour:
35 comments
Comments are closed.
What is the antidote critter?
One of these I think, has an impressive trick when not asleep.
http://tinyurl.com/y8up9pn
So, it’s a sugar glider!
Impressive, Richard Smith.
What the? (antidote du jour)
It’s adorable!
Yves,
I thought this article (in Spanish) could be interesting:
http://www.elpais.com/articulo/economia/CNI/investiga/presiones/especulativas/Espana/elpepueco/20100214elpepieco_5/Tes
“Spanish secret service probing into speculators’ pressure on Spain”
The Economic Intelligence division of the National Center of Intelligence (CNI) is investigating what’s behind speculative attacks against Club Med countries, in order to check if investors’ attacks and Anglo-Saxon newspapers’ shown agressivity against Spain is due to market ordinary behaviour or has to do with an organized campaign.
Zapatero is of course trying to defend and bolster trust in the Spanish economy, and I perceive this to be a rhetorical ploy along those lines. What other option does he have? The alternative is financial meltdown.
But the subtext—that this is an attack by the Anglo press–is a little weak. To begin with, as Yves pointed out on another thread: “This makes for great theater, save for the wee complicating factor that we all have a stake in the outcome.” And on that same thread commenter Chris provides a link to a Guardian article where Will Hutton warns: “The struggle to reform Greece and find a system of economic governance to make the euro work is all of Europe’s battle, notwithstanding Gordon Brown at his evasive worst. If it is lost, we all go down.”
http://www.nakedcapitalism.com/2010/02/can-eurobanks-take-a-greek-default.html
Lambasting Roubini also seems to be off the mark. Roubini has not singled out Spain. I think he’s been pretty unsparing in his assessment of the dismal condition of the US as well. There are many, including myself, who believe the milk has already been spilled, and nothing can put it back in the bottle. Globally—US, Spain, Britain, Greece, etc.—the debt is just too great to ever be repaid purely through austerity measures.
I believe there is a legitimate contest between officials like Zapatero, who represent the public interest, and speculators who are only concerned with their own private interests. Zapatero, after all, does care if the whole thing comes tumbling down. The speculators, on the other hand, don’t. The only thing the speculators care about is if they make money betting on the crash. And of course once they’ve placed their bets on the crash, they’re going to do anything and everything in their power to make sure the crash happens.
And while some of that sort of activity may exists, I think the evidence presented in this article misses the target.
The article does not back Zapatero’s thesis, but it’s an interesting piece of news IMHO, since it underlines the fact that Spanish experts themselves can’t explain why there’s so much pressure on Spain if not for speculators’ organized campaigning.
I myself can’t explain why several very intelligent economists fail to understand some pretty obvious points in the Spanish economy (e.g. Krugman posting recently that Spain’s problem was its lack of immigrants, as if receiving 8m immigrants in a single decade wasn’t enough…). It’s as if everyone was oversimplifying til exhaustion. And while I have no doubts on Roubini’s and Krugman’s intellectual honesty, I can see why the Wall Street Journal and lots of speculators would be grateful if Spain entered a fabricated liquidity trap.
don’t worry diego, the economists are just as clueless about our economy here and Krugman understands mathematics but not economics.
I’m a professor of contemporary analysis at the University of Magonia with a sub specialty — especially after two or three glasses of Rioja — in behavioral economic methodology analysis.
GNP is actually Nature + Imagination + Capital + Labor. Measuring economic variables in terms of prices is not at all sound analysis, sort of like trying to measure the Ether Wind in the 1880s.
Everything has to be references in terms of what I call economic relativity theory or ERT. ERT holds that all economic laws must hold regardless of the amount of money, credit or equity held in an economic system. Clearly, most contemporary macroeconomic approaches don’t hold under these conditions and are therefore flawed. There aren’t many models that do, except the one above.
Right now we have imagination running wildly negative and capital running negative. Nature is typically constant. Labor is also typically constant. For every person born, someone has to attend to their needs. So even though population grows, labor is relatively constant.
Krugman as no idea about all this stuff. Really. If Spain is under attack by speculators, it might be Montezuma and the Aztecs, or maybe the Jews, who had it pretty rough there for a while. I think the Anglo Saxons are too stupid to really mount a successful raid on Spain, after all, look what they did to their own countries.
“I think the Anglo Saxons are too stupid to really mount a successful raid on Spain, after all, look what they did to their own countries.”
I can see what Anglo-Saxon speculators did to their own countries… that’s why I am worried!!! :)
Craazyman, I know you are a professor at the University of Magonia, publicly at least, but your writing exposes your secret memebership at ComplaintsWithoutBorders, aka, BeefWithoutBorders, the way you bite into all those countries.
One line of argument in the defense of Spain’s economy that might prove fruitful is a comparison of external debt to GDP.
Bruce Krasting talks about external debt, which includes both private and public debt, in the post I linked above.
Can anyone explain to me why there is an almost exclusive focus on public debt, other than the Libertarian-Austrian-Neoliberal commandment that “thou shall not accrue GOVERNEMNT debt, but PRIVATE is harmless.”
Using the same CIA source Krasting cites, I come up with the following figures, expressed in trillions of dollars:
United States
GDP-14.27
External Debt-13.45
Ratio-.94
Germany
GDP-3.24
External Debt-5.21
Ratio-1.61
France
GDP-2.64
External Debt-5.02
Ratio-1.90
Spain
GDP-1.44
External Debt-2.41
Ratio- 1.67
Greece
GDP-.34
External Debt-.55
Ratio-1.62
It seems to me that framing the debate exclusively in terms of public debt, and punishing those countries that have “too much” public debt, while at the same time ignoring and/or excusing private debt, institutionalizes and enshrines the anti-government bias of the Libertarian-Austrian-Neoliberal constellation, which is pretty much one and the same as the international criminal banking cartel.
And has been shown repeatedly here in Latin America, private debt, during a time of crisis, has a way of almost always becoming public debt.
But even if you account only for public debt, Spain’s public debt is far lower than any of those countries’. Moreover, most external private debt is due to Spanish leading companies buying foreign companies, hence internationalizing Spanish products and services, i.e. productive investment. What’s wrong with borrowing for that?
There are just no fundamentals for Spain’s perceived position as a highly-indebted country on the brink of bankruptcy. Financial mainstream opinion is, once again, self-serving and utterly wrong.
Mexican writers have bemoaned the same thing, that Mexico’s debt situation preceding the crises of 1982 and 1994, or Argentina’s going into its crisis of 2003, were much more benign than that of the US today. There exists, without a doubt, a double standard.
My belief is that this is conquest and plunder by other means, that is by corporate finance instead of gunboat (although, in the case of the US, there is always the thinly veiled use of violence or the threat of violence lurking in the not-too-distant background). The goal here is to get countries into these financial fixes and then use that as a pretense to squeeze the countries into coughing up sovereignty, selling off (privatizing) publicly-owned businesses and functions, throwing the doors to the country open to let foreign goods and service providers come in, seizing control of natural resources, etc. Austerity, selling off state resources or devaluing the local currency are always the solutions demanded. Default is never an option.
Kirchner showed the way in Argentina in 2003 when he played hardball with the nation’s creditors. When a country comes under one of these attacks, there’s one solution that, although temporarily painful, best serves the interests of the nation’s rank and file people: Default! Default! Default!
This article gives a case study in how these attacks worked in 1970s Chile:
http://www.counterpunch.org/grandin11172006.html
Carlos Fuentes describes two more case studies—Mexico 1982 and Mexico 1994—in A New Time for Mexico.
You might also find Kirchner’s inaugural address to the IV Summit of the Americas of interest:
http://www.summit-americas.org/Documents%20for%20Argentina%20Summit%202005/IV%20Summit/Discursos/Discurso%20del%20presidente%20de%20la%20República%20Argentina.pdf
Also, I haven’t read it, but I believe Naomi Kline sets out a similar theme in Shock Doctrine.
Diego,
I might also add that the situation here in Mexico is not totally flattering to Spain. The Spanish-owned banks here in Mexico–Santander and BBVA–are every bit as voracious and give the same horrible service as HSBC, Banamex(CITI), Scotiabank and others.
I suppose if you live by the sword, you die by the sword.
Spain, who I suppose has done its fair share of feasting on smaller fish, may now become a feast for some bigger fish. That’s the problem when one buys into an ideology–like the Libertarian-Austrian-Neoliberal dogma, that touts the rule of the jungle over the rule of law.
I am afraid I can’t agree with your last comments. The opposite of globalization and integration in world markets (including financially) is isolation and poverty. You’ve got some good examples of this in Latin America, including Cuba and Venezuela. Argentina is not far behind them.
Once you accept foreign investment, regulate competition, tax the rich and invest heavily in infrastructure, education and security, you are on your way to development and wealth. That’s the way Mexico has to follow; Chile’s way, Spain’s way, Europe’s way, the US way; not Argentina’s and Cuba’s.
Diego,
I think DownSouth is right on. You confuse decoy globalization with gangsterization by the super wealthy neo-con ruling elite, and yes, if you don’t play ball, like Cuba and Venezuela, the bullies make your life hell on earth.
That’s why the university of Magnolia is having fabricated deception traps installed on all of their toilets (there are over 2000 on campus), instead of the fabricated liquidity trap you say the Wall Street Urinal wants to put on the toilet of Spain.
Fabricated deception traps eliminate deception while the fabricated liquidity trap won’t let it go down the drain so you become constipated and to big and bloated to go. Its just like being ‘too big to fail’. The only way to get relief is to take a big IMFLAX (its like Exlax but it frees up a systemic credit blockage instead of a crap blockage — actually they are the same thing with different names). It can be quite painful but it temporarily clears the debt problems in your system by giving you bigger IMF debt problems. Greece will be taking some IMFLAX soon, after the Wall Street Slimes and the rest of the super wealthy neo-con ruling elite corporate media creates more hate and divisiveness and softens up the european middle class for greater concessions, and of course sets up the EU banks for greater consolidation.
The super wealthy neo-con christian ruling elite are doing god’s work, Krugman is one of their angels.
Deception is the strongest political force on the planet.
The Manichean framing is highly reductionist and doctrinaire and does not at all fit the factual realities of Latin America. To pit the neoliberalism that has been imposed upon various Latin American countires against the statism of Marxist Cuba and Venezuela is to pit error against error, wrong against wrong. And to lump Argentina together with Cuba and Venezuela, or Kirchner together with Castro and Chavez, does not demonstrate a great deal of knowledge of Latin American affairs.
Perhaps Carlos Fuentes summed it up best:
Latin American nation-states were strengthened during the twentieth century (by Batlle y Ordoñez in Uruguay, Cardenas in Mexico, Vargas in Brazil, Alessandri in Chile, Lopez in Columbia, Peron in Argentina) in order to ensure that the public sector would bolster a higher level of development and thereby benefit both the private and the social sectors. Indeed, it did benefit them. Policies regarding infrastructure, education, and health could be executed only by the state but ended up furnishing the homes of the bourgeoisie, who got cheap energy, communications, subsidies, capital, and labor, as well as a previously nonexistent population of consumers. In exchange, the private sector did not return society’s favor with an adequate distribution of income; it remained adamantly opposed to modern taxation systems, and pursued its vocation as lackey to international capital. The state, for its part, grew excessively in response to the unsatisfied demands of different sectors: workers, campesinos, the middle class, the business class, cultural sectors, armies, and, above all, foreign creditors. Incapable of satisfying all these constituents, the Latin American state succumbed first to military dictatorship and then to neoliberal reform. The straitjacket of extreme protectionism, subsidized consumption and production, captive markets, and lack of competitiveness needed to be loosened—and was. But in its stead came a demonization of national states, a delusional faith in the free play of market forces, and the cruel complacency of social Darwinism in lands of extreme hunger and need.
We now know that the shrinking or absence of the state ensures neither well-being nor order. Will pubic administration in Latin America recover its strength enough to impose social obligations and tax reform on the new elites? The repercussions in South America and the Mexican crisis of 1994-95—the “tequila effect”—attest to the continent’s difficulty in doing so. But they also point to a solution. It is a social solution that depends on the capacity of civil society and political forces to ensure that strategies for investment, export, and savings are combined with corrective social measures, tax reform, and renewed social services.
–Carlos Fuentes, A New Time for Mexico
The Stone Ager thing as depicted here reads like another yuppie lifestyle fad, no doubt with visions of lucrative corporate retreat consulting.
But the broader implications are important. It is true that hunter-gatherers were physically more healthy than agricultural workers (they were taller and had better bone structure) and had healthier societies and economies, since agriculture was the beginning of social and economic stratification, surplus expropriation, heirarchy, militarism, domination, serfdom.
And now, with fossil fuel and other resource depletion and the collapse of exponential debt “civilization”, we shall be returning to history’s normal economic levels, as they existed prior to the industrial revolution.
So from the point of view of personal preparation, relocalization, rebuilding community robustness and resiliency, and trying to figure out a way to live at a medieval level of production, but without reverting to feudal socioeconomic organization (there are alternatives, but not if we keep going in the direction the power structure is taking us), we should be studying every aspect of the devolution of industrialism.
I understand the yuppies are most interesting in the Bonobo Stone Age camp where you imitate the lifestyle of Bonobo apes who are known to be the only speicies to resolve conflicts and disputes through sex.
In that Bonobo Stone Age yupppie camp, there is a bar you can go after sunset and you go up to a nice looking cave woman and you say to her, wanna have a dispute?
Re the Stone Age subculture: interesting!
People should not adopt their high fat diet unless they have discussed such w a medical professional. The Stone Agers’ avoidance of virtually any salt except that naturally contained in meat is however spot on and will keep blood pressure low and Type II diabetes away.
As important and more for the diet(s) suggested—more than one focus are described in the article—the restriction of carbohydrate is in line with what we know about reducing insulin levels and Type II disorders as well, and implicated in many other health improvements. In line with your remarks, Rx, pre-Neolithic populations also ate very little sugar and no refined sugar.
Our understanding of pre-Neolithic diets is incomplete. And there are implications that the simulations of them as implied in this article are somewhat skewed. We do not have a full picture of what vegetative subsistence resources were used because things like vegetables do not survive in the archaeological record. Accordingly, our demonstrated picture of such diets likely underrepresents seasonally available fresh vegetable matter. This would have generally been moderate in carbohydrate and heavy in fiber judging by what is known of historical and surviving hunter-gatherer groups. However, the ‘gatherer’ component is under-represented in these neo-preo diets as described. Many such cultures derived the bulk of their calories in some seasons of the year from gleaned resources, typically nuts of various kinds. Starvation ensued when such resources failed occasionally. Seeds were only marginally utilized in most pre-Neolithic diets because they took a lot of effort to gather but were difficult to process into forms that were digestable: they weren’t good bang for the buck. Every culture that could hunt, did so, and fresh meat was _highly_ desirable. But this was in many cases on a good bang for buck return. Megafauna provided a _lot_ of food at a pop for a small group, but those same small groups didn’t necessarily fish even though the lakes and streams in their area are known from the archaeological record to have been well-stocked. There were some cultures whose primary calorie resources were heavily oriented to meat, and they tended to be healthy individuals, but this wasn’t necessarily ‘the norm’ for groups in regions with diverse resources.
The point I’m making is that these neo-preo diets, some of them, are likely make-believe simulations of actual dietary regimes in Deep Antiquity and beyond. But yes, those diets as we understand them were typically both more healthful than modern diets and closer to what the human metabolism and digestive system are adapted to consume.
heading out barefoot right now to Central Park for some breakfast.
trying first for some raw squirrel, but may have to settle for a rat if those little squirrels keep backing me up around the tree like they usually do.
there are bluegill in the boathouse pond, but they’re frozen solid until March.
ha ahhaha hahahahaha hahah :)
Yves, I didn’t see a way to email you directly from the website, but I wanted to apologize for improperly posting your work on my site. I’m not very familiar with blogging etiquette, and to be honest, I don’t even go on the site very much to see how the things I post via email are coming across. I had intended to have it be the URL to your post, not your entire post, but clearly I don’t know what I’m doing.
In any case, I’m a big fan of naked capitalism and the work you do, and I will take care to do things right in the future. Your article has been removed from my site.
Thanks for letting me know and take care,
Josh
RE the Morgenson article on costs of TBTF, the focus should be on denouncing the policy.
The basic banking functions most of us and most/all businesses rely on can be simple regulated or even govt-owned utility-like enterprises. All the other stuff such as doing deals, prop trading, selling/shilling Treasuries to keep the leaky ship of state afloat etc., must allow corporate failure. SO it goes.
And investment banks should be privately owned, using partner’s capital.
Yves, Happy LOSAR, Tibetan New Year, the year of the
Iron Tiger
I thought of you and your antidotes:
http://2.bp.blogspot.com/_HF-7BiYhl7w/S3aHViDv3cI/AAAAAAAAHVQ/x5-
That Stone Age article is a load of horse manure. There were no good old Stone Age days. Perhaps we were in more balance with Nature, but that was because of high mortality rates from disease, malnutrition, and starvation. With the invention of agriculture, people had more food, better nutrition, and more time on their hands to do other things like accounting and other crafts. The wealth that the agricultural communities accumulated led to the hunter gathers to band together to conquer them or try to leading to the formation of armies and the military institution. Try living a Stone Age existence without modern nutrition like the Bushmen of the Kalihari do. They live on the edge almost every day and they are not a tall people. Ask any survival expert. They’ll tell you what diet you’ll have based on the immediate area you can hunt for food. Think people! Survival is not rocket science.
Carbohydrates are not bad for you. Too much fructose in your diet may be bad for you but that is because the food companies use fructose as a sweetener and cheap sugar source in place of sucrose. But which is better, to die of starvation or die of obesity? And the latter is a red herring, most people can handle their obesity.
http://en.wikipedia.org/wiki/Bushmen
“Perhaps we were in more balance with Nature, but that was because of high mortality rates from disease, malnutrition, and starvation. With the invention of agriculture, people had more food, better nutrition, and more time on their hands to do other things like accounting and other crafts.”
Wrong. For example, many perhaps most germ-based diseases are products of agriculture (specifically, animal husbandry).
It’s probably true that stone-age peoples sometimes faced famine. On the other hand, it’s not clear that agriculturists “winning” means they led happier lives. All that “winning” shows is that they could outbreed and/or outfight stone age people.
It’s not so much a question of death by starvation or obesity, but a question of living in the face of starvation but physically able to deal with it or living with obesity and not living your life as fully and freely as you can.
“Future Bailouts of America” (Morgenson) on the need to quantify Govt. guarantees reminds me strongly of the G7 proposal for some kind of “meltdown insurance” floated (if that’s possible) at their recent meeting on Baffin Is.; see here:
http://www.guardian.co.uk/business/2010/feb/07/g7-alistair-darling-levy-banking
I suppose that, in order to estimate how big an insurance fund you will need, you effectively need to estimate how big a guarantee you are going to give, so the two ideas (guarantee/insurance) overlap at that point.
According to the Guardian article, the IMF is writing a report on the insurance fund idea, supposed to be ready in April. I hope the report-writers are reading Marvin Phaup’s GAO paper.
The stone-agers seem to be sort of Nietzschean. Perhaps Der Spiegel might examine that dimension in a future story.
I’m going to comment on the Afghanistan stories against my better judgment.
The “Foreign Policy” article nails the crux of the matter with this sentence: “Afghan President Hamid Karzai’s regime is an utterly illegitimate, incompetent kleptocracy.” I believe that the readers of this blog understand the consequences of our having propped up the house of cards that is the global financial system; If we fail to address the corruption in the Afghan government we can expect a similar sort of outcome (and when I say “address” you should think chainsaws and flamethrowers, not brooms and dusters).
Unfortunately the history of U.S. foreign policy is one of propping up dictators for the expediency’s sake rather than promoting real democracy. At face value the story of Karzai’s blocked appointee list indicates there may be real democracy to be promoted, but the opposition will fight their battle without us.
Mr. Floyd’s piece is not of the same calibre, serving more outrage than substance in Part I, although I entirely appreciate Part II. He states that American commanders do not understand that the guerrilla will just “disperse into the countryside”; in fact not only do they understand it, it is what they wish to achieve. The lesson won in American blood is that fighting insurgency only by killing insurgents will not lead to success any more than fighting crime only by arresting criminals succeeds.
If the mobster has decided to lay low in Peoria, IL he may congratulate himself for getting away, but if his job is to lean on Chicago shopkeepers for protection money and cracking heads to keep folks in the South Side in their place, he’s not doing so well. The aim of the Marja operation is to interpose military force between the insurgents and the people, and if the insurgents had simple left en masse it would have been a grave defeat for them. The fact that at least some insurgents have chosen to stay and fight indicates to me that they realized this. The tactic is proven to work.
But the real question is still: if the operation succeeds and the insurgent strength is diminished, then what? Is the governance of Marja to be handed over to a despot? The people of Marja appear to be caught between a rock and a hard place.
Jim
May I add Jim, that tigers chasing field mice usually starve and until they fix the boarder problems its just a field exercise.
Skippy…funny you bring up the corruption issue, seems to me, like minds work better togeather…ummm.
Jim S said — “The “Foreign Policy” article nails the crux of the matter with this sentence: “Afghan President Hamid Karzai’s regime is an utterly illegitimate, incompetent kleptocracy.” I believe that the readers of this blog understand the consequences of our having propped up the house of cards that is the global financial system; If we fail to address the corruption in the Afghan government we can expect a similar sort of outcome (and when I say “address” you should think chainsaws and flamethrowers, not brooms and dusters).”
The Obama regime is an utterly illegitimate, incompetent kleptocracy. And because we failed to address the corruption here, in scamerica, is the reason we now have “the house of cards that is the global financial system.”
We need to bring the troops home and have them handle the scamerican drug war here in the ‘homeland’, where the alcohol and tobacco cartel, led by drug lord, drug addict Obama, kills over 500,000 scamericans a year and incarcerates, beats, intimidates, and hassles millions of users of competitive products. At the same time they could take out the usury slave dealing banksters on Wall Street and reform the electoral process.
There is no need to unplug stopped up toilets half way around the world when our own scamerican toilet is overflowing and we are all up to our necks in shit.
Deception is the strongest political force on the planet.