Links 2/9/10

‘Boredom can kill you’ ANI

Genes reveal ‘biological ageing’ BBC

Re-Engineering the Human Immune System h+ (hat tip reader David C)

Sahara Desert Greening Due to Climate Change? National Geographic (hat tip reader Diane R)

Spray-on liquid glass is about to revolutionize almost everything PhysOrg (hat tip reader Nick)

Sarah Palin caught cheating, proving to the world once again she’s a colossal IDIOT! Zeitgeist Watch (hat tip reader John L)

Unaccountable America Archein

Traders make $8bn bet against euro Financial Times

The Option of Last Resort: A Two-Currency EMU RGE Monitor

‘PIGS’ Crisis Is Opportunity for Euro to Stand Up Matthew Lynn, Bloomberg

Greek crisis intensifies as Joe Stiglitz calls for Europe to ‘teach the speculators a lesson’ Telegraph (hat tip Swedish Lex)

Mervyn King goes dog sledding but all avoid seal meat at G7 summit in Canada Guardian

Treasury is failing to force banks to lend, warn MPs Independent

The second lien sticking-point FT Alphaville (hat tip Richard Smith)

China says it shut down online academy for hackers LA Times (hat tip reader Sundog)

Dollars Flow Out as Data Flows In New York Times

In praise of mammoth deficits LA Times (hat tip reader Scott)

We’re Weimar James Howard Kunstler (hat tip reader Scott). Whether you agree or not, it’s a lively read

All roads lead to the renminbi Chevelle

Could we start industrial society from scratch today? Kurt Cobb (hat tip reader Robert M). From 2008, but the discussion is still pertinent

Name change: ‘Dynamite Prize in Economics’ Real World Economics. Vote for the economist most responsible for the crisis! (I did see this earlier, forgot to link, a nice reader reminded me, cannot find the message, so apologies for lack of h/t).

This Trend is Not Your Friend: Wall Street’s Killer Instinct Spells Death Knell for Jobs Pam Martens, CounterPunch (hat tip reader Stephen V)

Antidote du jour (hat tip reader Steve S):

Print Friendly, PDF & Email


  1. MyLessThanPrimeBeef

    Is there some kind of bias, bigotry against the plant, fungi, protista or monera kingdom?

    Why don’t we ever have had plants as antidotes du jour?

    I hope we are not so narrow-minded that we think only animals can be antidotes du jour.

      1. MyLessThanPrimeBeef

        If we open ourselves to the possibility, plants can also be so cute.

        I am just asking that we not be bigots.

          1. MyLessThanPrimeBeef

            OK, one day…or maybe not.

            The focus of today’s antidote is either the man’s left ear (maybe his sexy shoulder) or the squirrel, but definitely not the tree or the fuzzy shrubbery in the background.

            I still think it’s bigoted…at lease close minded.

  2. Diego Méndez

    Yves and others,

    what’s your opinion regarding rumours that two big hedge funds have fabricated the Club Med debt crisis?

    1. MyLessThanPrimeBeef

      Plus one investment bank.

      I’ve already asked that question in another thread. So far, nothing.

        1. Diego Méndez

          The problem is: markets’ reaction (by the way, reaction to what? Nothing has changed in Greece in the last few weeks) has been truly overdone.

          There’s nothing explaining why Greece has a much higher default probability built in financial markets’ prices than Third-World default-prone countries such as Morocco or Libanon.

          There’s a huge wave of disinformation in the media, putting Spain as fiscally irresponsible when, in fact, Spain has one of the lowest public-debt level in Europe. Neither can you say a 12% deficit is fiscally irresponsible in the current situation, when the US and the UK have larger deficits and no one is attacking them.

          So I am afraid something really wrong is happening here. That’s why conspiracy theories seem nearer to truth than mainstream information on this issue.

          1. aet

            Damned jargon….I thought at first that the reference was to some vacation company in trouble with its corporate bond payments, and I was thinking, “WTF? Who cares?”…

            But this is about the “Euro-Mediterranean” countries, is it not?

            On second thoughts, perhaps I might still have the same response!

    2. Dan Duncan

      I’ve heard that the “hedge fund rumor” is actually the fabrication…put forth by those in denial that the EU is a mess.

      1. Peripheral Visionary

        Indeed. It’s not just that nothing has changed in the last few weeks; nothing has changed in the last few years. Europe has been deep in a spending hole for years now, and it is only just now that people are noticing. Trying to pin the blame on the speculators is akin to blaming the kid in the crowd for noticing that the emperor has no clothes.

        1. Diego Méndez

          The eurozone has a 6% budget deficit compared to over 10% in Japan, UK and the US. The Emperor has no clothes, but he sits outside the eurozone.

      2. Anonymous Jones

        It is, almost assuredly, both.

        Fabrications occur all the time. In a market as large as the one we’re discussing, there are fabrications made by many on both sides, some of which fabrications, despite the best efforts of the fabricators, actually turn out to be true.

  3. attempter

    The RGE Monitor headline made me laugh, and the piece is also pretty funny. “We fully support something that’s now being proven not to work. Since it’s impossible that we could have been wrong, therefore the concept has to be right and just needs what we’ll call tinkering, no matter how crazed our proposed kludges are in the face of the original concept.”

    Meanwhile Stiglitz proposes weak tea vs. the speculators. Try to defeat their bets? And here I was yesterday wondering why currency attacks aren’t seen to be and dealt with as terrorist attacks or acts of war.

    As for the descent from Peak Oil, it’s long been clear that however possible it might still have been on paper to gradually transform from fossil fuel industrialization to a “green energy” civilization which would exist at a somewhat lower level of energy consumption but still be recognizable as industrial civilization, that looks unlikely to be possible politically.

    As we’re seeing, America’s system is so bottlenecked and so rotted with corruption and criminality that we can’t even enact a no-brainer like single-payer health care, which would be easy to do, would save money, and would be a pure good across the board.

    But we have a system where government and media collude to prevent it from even being discussed, let alone seriously considered. That’s just one example.

    So if the system is so criminally stagnated that we can’t even do that, then an energy revolution is certainly not politically doable.

    Unfortunately, it’s clear that this system is absolutely committed to refeudalization, as the only possible way it can hold onto its wealth and power for any significant length of time. That’s what it’s trying to do. That’s why all its measures are dedicated to propping up the zombie debt/”growth”/war system. That’s all it can do; any alternative would involve relinquishing wealth and power to back to the people.

    In the end this system must and will collapse, but it can perhaps be propped up for a while yet through tyranny, looting, and violence. That’s all they know how to do.

    So that’s why we cannot “expect to see a phoenix hour” for industrialism. It will stagger along as is, running on oil and debt as always, until the supply of these becomes untenable, and then collapse.

    It’s what I call hunkering in the bunker.

  4. MyLessThanPrimeBeef

    I don’t know whether boredom kills but I do know that after getting killed, life can be boring, just as while knowing the truth doesn’t always free you (in fact, in some countries, it will put you jail), freedom does allow you to speak the truth because you are then free to speak the truth.

    1. aet

      The truth of the statement being made is not a pre-requisite for the benefits which flow from the exercise of rights to free expression.

      People are free to express themselves: who cares what what they are expressing is worth? or whether it’s truthful?
      Indeed, what business is it of other people’s at all?
      Would that not rather be to pre-assume some goals or aims to the expression, which serve to make such expressions “legitimate”?

      Freedom of expression is an absolute good for people: regardless of the content of the expression, or whether or not the expression actually seeks to communicate, at all.
      There is an inward aspect to expression, which in my opinion is enough to ground its exercise: there need not be an audience. There needs only be a desire to express oneself.
      Free to express only what is useful or true, or what may be useful or true? No.
      Freedom of expression requires no excuse.
      What would and does require “excuse” is the denial of this freedom.

      I note that people are taught “to hold their tongue”. I think that’s because expression is a inborn human trait which is exercised by everybody – unless and until one gets beaten for it. Free expression is not a gift of one’s social superiors, nor necessarily tied to any purpoese whatsoever.

      Long story short: freedom of expression needs no instrumental or utilitarian excuse beyond the simple wish of the subject to express herself “because she feels like it”.
      But its denial certainly does.

      1. MyLessThanPrimeBeef

        Actually, freedom of thought is more precious than freedom of expression. Unfortunately, many people refuse to exercise the former.

          1. MyLessThanPrimeBeef

            True, dat. But if what people are expressing is no business of others at all, then I imagine what people are thinking is no business of others as well.

  5. Swedish Lex

    The RGE article on a two-currency EMU is worth reading in its entirety. It helps beginning to fill the void of new ideas on how to deal with the euro’s fundamental problems and goes beyond the current simplifications and/or paralyzing denial.

    The RGE proposal is in itself however practically unworkable, at least for the short term, as it most probably would require significant Treaty changes which would take at least two years or so. The beauty of the idea is that it would allow under-performing euro states to devalue by adopting the second tier currency. Such a situation would be met with skepticism among many euro states and the EU Institutions who probably would fear that the second tier states would achieve unfair advantages by codifying a framework for competitive devaluations. The argument against that argument is however that it would be cheaper for the first tier states to let the Club Meds devalue than to administer a proper fiscal assistance.
    The four prerequisites listed by RGE are all valid, as is pointing to the risk of moral hazard. I doubt whether it would be legal under e.g. Germany Law to use taxpayers’ funds to bail out Greece. The EU does not have sufficient own funds and there is, to my knowledge, no mechanism in the EU to raise new resources and to provide fiscal support to the Club Meds that need it in a fashion that is coordinated and that appropriately safeguards the interests of those providing the resources. Calling in the IMF would be to wave the white flag.

    The RGE authors then write that “This leaves bold fiscal consolidation and far-reaching structural reforms in the periphery as the only way out” but then conclude against this because it would mean too much pain in too short time with no immediate up-side for citizens. Hence politically impossible in the countries concerned. I would in addition mention that the EU is ill equipped institution-wise to develop, adopt, implement, and oversee an EU-led carrot and stick programme to care-take the economies of failing euro states. However, despite these arguments against, this is probably the only way forward, in my view. The EU will have to develop a sort of fiscal master plan for the euro zone and device intra euro zone IMF-like powers and institutions to manage these situations in a coherent way with a long-term view. So what I would like to see presented by the EU leadership is:

    1. Commitment by the EU and the euro states respectively to provide short-term assistance to Greece etc., multilaterally and bi-laterally, as the case may be, in order to kill the immediate tension.
    2. Commitment to develop a fiscal master plan for the euro-zone that would apply in the long term and that would establish the rights and obligations of creditors and debtors. Such a plan would require Treaty changes and would thus take 2-3 years to implement.

    My personal wishes aside, there is right now a big silence on behalf of the decision-makers, as at G7, which could mean that there is emptiness or that something is being prepared. A voir.

  6. middyfeek

    Re Kunstler: The man can write, I’ll give him that. But he writes essentially the same column every week. That is, The End Is Nigh.

    He constantly refers to Peak Oil despite the fact that he has no idea where we are versus Peak Oil (nor do I).

  7. DoctoRx

    Re the link to greening of the Sahara Desert: maybe it has nothing to do with global warming. Appar this began in 1982. In 1982, the talk was of global cooling. IMO the safest way to approach this is that climate change has always occurred. Trying to fit scientific observations to fit the latest fad that the power elite is pushing — the cap and trade scam– is a mistake.

    If governments want to discourage use of fossil fuel, all they have to do is keep raising taxes on their production, refining, manufacture and use. And they can fund more research on alternatives, enhance conservation efforts, etc. It’s that simple.

    When I commented to a friend that it’s ironic that Washington looks to be having its snowiest winter ever with a “warmist” in the White House, he said that the warmists are saying that global warming predicts cold snowy winters.

    When a theory predicts everything, it predicts nothing.

    Global warming may be occurring, and humans may be a big contributor to it. Or not. But increasingly it is apparent that its proponents have overreached.

    1. wunsacon

      DoctoRx, do you have a link to any “global cooling” research that involves more than a handful of scientists with tentative conclusions?

  8. Richard Kline

    The description of spray-on liquid glass is ab-so-lute-ly freakin’ amazing. Nontoxic. Easy to apply. Cheap, comparatively speaking. Antibacterial. If it functions as anything close to the description, it’s the most revolutionary product since cheap gasoline.

    There are new things under the sun. Time was, the US came up with more than ‘our’ share of them (in no small part by importing talent from elsewhere). Now, we’re too busy huffing and puffing to blow up/down our neighbors’ houses.

    Now all we need is for some clever Chinese engineer to come up with a deployable small-scale flywheel ‘battery’ and we can get on with A Brand New Day.

  9. steve from virginia

    On the Euro’s difficulties and Stiglitz:

    The developed countries have all painted themselves into a corner. Some, like Greece, have done so faster and farther than others. On one hand is deflation caused by inexorably rising real input costs and on the other hand is deflation caused by half- witted ‘remedies’ such as the old standby, ‘borrowing your way out of debt’ which leaves both borrower and lender insolvent.

    No conspiracy of banks here, just rising costs – energy and real interest rates. The deflater here is self- reinforcing so Stiglitz’s prescription – to raise rates and corral finance markets – simply adds to costs and amplifies deflation. We aren’t in Kansas – or Hong Kong in 1998 – anymore. Oil prices are too high.

    Austerity amps deflation. An alternative eurozone tactic could be to TRY and inflate the euro, but the liquidity traps persist. Inflation has not taken root anywhere other than China and Russia. The Niewe Super- Hard Dollar means there is little inflation in the OPEC countries except Russia (for other reasons).

    The dollar is super- hard because it is pegged to crude by Saudi Arabia. $100 oil would break the peg – but $100 oil would also crash the world’s economies and destroy crude demand. Meanwhile, all the dollar carry trades and dollar short trades are unwinding, that is what is really happening to the euro. No conspiracy.


  10. velobabe

    liquid glass the new amazing nanotechnology panacea invention shown the coating protects against graffiti. liquid glass coating is breathable. trials in vineyards have found spraying vines increases their resistance to fungal diseases, than protects against drunken actions such as “pouring a bottle of wine over an expensive silk shirt and it will come right off”. protects against all potential human error.

  11. William Mitchell

    Sahara greening: according to Jared Diamond’s books, the historical record shows that warmer periods are wetter, and colder periods drier.

    This may create confusion about the risk of global warming. Land-based biomass is actually helped by the wetter weather, so what’s the problem?

    One problem is abruptness. If climate change occurs faster than native species can adapt or move their range, then you get mass extinctions and biodiversity collapse, with unpredictable but likely negative short-term outcomes for many humans.

    Another problem is the unpredictable redistribution of arable land. If weather patterns change unpredictably, no one knows what will become a desert and what will bloom. So large populations may now be living in the “wrong” place relative to the new distribution of food supply — resulting in famine or mass migration.

    1. eric anderson

      Sarah Palin gave a very good pep talk for the Tea Partiers. That’s all it was, and it was a good one. She pleased the intended audience. She has never tried to pass herself off as an intellectual. I agreed with her point for point on the critique of the Obama administration.

      Hate is an ugly thing. Now we get links to an article that concludes by calling her an “f*ckin’ r*t*ard?” Wow, that’s high class criticism. Such a blistering display of intellect.

      For fair and balanced coverage, could we get a link to an article on Obama’s umbilical connection to his teleprompters? What is the message? If you use high-tech devices to feed you your every word — even you can’t pronounce them — then you are truly an outstanding example of brains and rhetorical virtuosity?

      Here is our revered leader in action. Is Obama a genius? Of “corpse” he is. This is Obama’s NU-KYUH-LUR moment.

      1. eric anderson

        Mea culpa. My post was not intended as a reply to “William Mitchell.” Sorry, William. My bad.

      2. Anonymous Jones

        I recorded the speech on my DVR and watched it this weekend. I hadn’t had such a good time in a while. I was skeptical at first, but we just had a ball watching it. Literally took us two and a half hours to get through it because we paused so many times to discuss what she was saying. “Lamestream” was the pinnacle of the night. That won’t be topped for a while. It didn’t hurt that we had a “Reagan” drinking game going. I think the contrast between her attractive appearance and the childish bitterness seen in something like “lamestream” was really interesting (both for her and the people drawn to it).

        Palin is obviously not a fuckin’ retard, but she is a politician (witness her furiously backpedaling and outright lying when she was confronted by Chris Wallace about Rush Limbaugh calling people fuckin’ retards).

        In any event, I’m so intrigued by the people who insist on calling this ‘Tea Party’ movement something other than what it is. Each of the speeches I watched were completely party line. This was almost entirely speeches by Republicans, funded from Republicans, and delivered to Republicans. What exactly am I missing here? It’s not a new movement; it’s rebranding.

        1. Skippy

          You’ll know when she is about to announce her candidacy for Prez.

          She’ll drop some thing and bend over to pick it up as she walks too the dais, on live a feed…lol.

          Skippy…at the waist first, but then she will correct her self half way down…old habits do die hard…eh.

  12. john

    Hey Yves,

    The comments were closed on the Sorkin-AIG-Unofficial-Vault post, so I’m posting here.

    I just asked Sorkin about this during a Q&A he had at Northwestern and specifically whether this was Hank Greenburg’s slush fund. He said he’d emailed you w/ his response already, but he downplayed it saying that they were *issued* by subsidiaries and held (?) by the parent company. Unfortunately, I didn’t get a chance to follow up. Like, if the subsidiaries were supposed to be fine when removed from the parent, couldn’t they have sold those off to raise the money they needed from the taxpayer?

    1. john

      Also, it didn’t occur to me until after I was walking home in the snow, but Sorkin’s answer to a question that preceded mine got me really mad.

      He was responding to a question about ratings agencies and how, ultimately, this mess wasn’t the agencies fault as it was yours, mine and all investors *for*not*understanding*the*investments*we*made*. Aaargh.

      Where to begin? You mean, Andrew, the investments that the people who literally made tens and hundreds of millions of dollars from, and have repeatedly said, “oh, well, we didn’t really understand them ourselves?” The same investments that they were shoveling out the door onto pensions and endowments and towns in Finland while trading emails acknowledging this was all a house of cards? Gotta dance while the music’s playing.

      The thing that gets me is that Sorkin, with his access and his book party and his big card from Buffett and his “definitive” account is just a mouthpiece in the guise of a journalist. Didn’t the Times learn its lesson?

    2. Yves Smith Post author


      Will check why comments is closed, that’s weird.

      For the record, Sorkin never e-mailed me directly. Francine McKenna e-mailed him and she forwarded what he said to me. I then checked it with someone who knows regulations and SEC procedures. Bottom line: even if Sorkin’s revised story is accurate, it’s still sus (re how AIG managed itself, laxity of controls and records, but less dreadful than the original version.

      Re Sorkin generally, I am told that he is the highest paid journalist at the New York Times, so he won’t bite his sources, just nip at them enough to maintain his credibility.

  13. Sundog

    Websense uses a global network of systems to scan and analyze over 40 billion websites every hour, tracking malware and other unwanted content. The results for the latter half of 2009 show a 225 percent increase in malicious websites. (((They need the money.))) Worse, 71 percent of websites found to contain some malicious code were in fact legitimate websites that had been compromised in some way. (((Used to be a respectable, dignified political party, now reduced to a mere tea party.)))

    Last year, every time I fired up my browser I thought to myself this is too good to be true, no way will this last. Bloomberg putting Tom Keene’s “On The Economy” behind a paywall at the turn of the year seemed a harbinger of doom. Maybe it’s going to Hell quicker than I expected.

    *One wonders how much of this it will take before feudal-corporate gated communities start looking attractive again. “CompuServe II,” anyone?

    My personal antidotes this evening, just for the Hell of it.

    the big print giveth and the small print taketh away….
    “Step Right Up” Tom Waits 1977

    To paraphrase Ken Lewis, as long as the Congolese are making music I’ve just gotta dance.

Comments are closed.