Links 5/11/10

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Apologies for thin posts tonight….euro burnout plus the rest of my life demanding attention.

Academics urge radical new approach to climate change BBC

Gulf Spill: Did Pesky Hydrates Trigger the Blowout? ScienceInsider

Searching for Elena Kagan New York Times

The HuffPost’s Business Reporting Shows the Site Maturing Columbia Journalism Review

Trading in Hubris: Pride, Overreach, and the Inevitable Blowback and Consequences Jesse

Bank Swaps, Libor Show Doubts on Europe Bailout: Credit Markets Bloomberg and Markets rally runs out of steam Financial Times. Boy, that didn’t last long.

Christine Lagarde : Le plan de soutien, « un tournant historique » Les Echos (hat tip reader Swedish Lex)

The ECB’s nuclear option has its limitations Ed Harrison

Pre-Emption Deal in the Works? Mike Konczal

Euphoria ends as investors suspect another shameless EU confidence trick Eurointelligence

Greek debt restructuring to avoid euro tragedy could become script John Dizard, Financial Times

Europe’s Debt Crisis: Your Questions Answered New York Times. Your humble blogger, along with Simon Johnson and Carmen Reinhart, provide answers.

Antidote du jour:

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  1. attempter

    Re NYT on Kagan:

    It is gratifying that the president has nominated to this court what would be its third female justice, one who is relatively young, well spoken and, by all accounts, brilliant and collegial.

    I have no idea what the substantive meaning of that gibberish is supposed to be, other than that “collegial” is usually code for “always eager to appease the Right.”

    It may be unfair to blame Ms. Kagan for some of the positions she has taken as solicitor general, a job that requires her to defend the government’s views.

    Unfair? Um, no. On the contrary, at least in the age of kleptocracy, the willingness to take such a job at all is strong evidence that one is primarily a flunkey of power.

    Somebody tell the unprincipled and characterless hacks who make this kind of argument – it’s a condemnation of one’s (lack of)character that one would robotically “defend the government’s views” if she opposed them.

    The White House undoubtedly hopes the ellipses in Ms. Kagan’s record will help her avoid a rocky confirmation hearing. That expedient approach, unfortunately, reflects the widespread sentiment that the right holds the upper hand in judicial debates, forcing the left to duck and cower.

    Well, that means there’s no real “left” involved, but only the confident, aggressive right and the cowardly, quasi-right “liberals”. The real reason the Kagan-Miers comparison is probably wrong is simply that right-wingers will fight if they’re too obviously being screwed, as they did in the case of Miers, while so-called “progressives” are just snivelling little twerps where it comes to fighting for what they claim to believe. They’re actually more conformist and brainlessly tribalistic. The liberal teabaggers cave in to whatever Obama dictates even more readily than the right ever did for Bush.

    Although I reject Kagan, it’s sure not because of her lack of the judicial credential. That’s meaningless. (I’ve been laughing at the astroturf articles trying to claim the Kagan-Miers comparision is wrong because she has better “credentials” than Miers. I sure don’t think Miers was less “qualified” than anybody else. It’s clear that formal credentials no longer mean anything. There’s no reason one even needs to formally be a lawyer at all to be truly qualified to sit on the court. Any generally well-educated, intelligent layman who cares about the public interest would be for that reason alone more qualified than anyone who sits there now.)

    The real credential Kagan lacks is any solid record of what her constitutional principles are, if any. There’s plenty of law professors and legal commentators who’ve never been judges but who have a long record of writings making their positions clear. But Kagan has managed the improbable feat of having written very little of substance in such a long career. That has to signify that at her core she’s a careerist who has no strong principles at all, which doesn’t bode well for the fate of the public interest in her hands on the court.

    Not that we should have expected any better. The “supreme” court is a rogue institution by now, and no one should repose faith in its fidelity to the constitution or to the public interest, or to anything but the power and wealth prerogatives of the elites. Just like the rest of the federal government, the court has no legitimacy and no authority. Only its might makes it “right”.

    1. psychohistorian

      Thank you!

      Yep. And all the kabuki around the process as seen by the public will be that the left is winning this one and the right fought the good fight of delay but lost…when in fact the prerogatives and power of the wealthy elite over the public are furthered.

    2. lambert strether

      attempter writes:

      The “supreme” court is a rogue institution….

      Aw, come on. Let’s be reasonable here. I mean, it’s not like a thin majority of the Court stole an election so they could hand over the nomination process to their ideological soul-mates.

      Oh, wait…

    3. Ray Duray

      Outstanding comment! You have been reading my mail. Or my mind. One or the other.

      At any rate, I find myself completely in agreement with your views.

      Which makes me wonder how in the world I can possibly be part of a political party that is this willfully blind and dishonest?

      The corporate Democrats are looking bad with all the drool running down their chins these days.

    4. Cynthia

      Keep on mind that Larry Summers pushed more than anyone else in the financial-industrial complex to keep financial derivatives unregulated — the very thing that enabled Goldman and other shadow banks to blow up the economy. And now we hear that Larry Summers was responsible for appointing Elena Kagan dean of Harvard Law School. Coupling that with Kagan being on Goldman’s payroll throughout most of their bubble-making years should be reason enough, IMO, to oppose Kagan’s appointment to the Supreme Court. Which STILL makes me wonder why Obama hired a bankster enabler to not only be his chief economic adviser, but to also be his top Supreme Court pick. All I figure is that Obama either has very poor judgment or he’s married to the mob. Either way, none of this speaks well of Obama’s ability to lead our country.

      I can’t emphasis enough how bad it is that Goldman owns Congress and the White House, but I can’t begin to emphasis how bad it is that Goldman will soon be owning a piece of the Supreme Court, too!

    5. Cynthia

      I can’t leave here without also mentioning that I don’t think it was a mere coincidence that Eliot Spitzer got caught soliciting sexual favors from a prostitute just a few months before a fraud-filled bubble burst on Wall Street. Nor do I think it was a mere coincidence that the news about SEC staffers surfing for porn on government time broke just a few days after the SEC announced that it is suing Goldman Sachs for fraud. Don’t get me wrong, I’m not defending the misconduct of either Eliot Spitzer or the porn-surfers at the SEC, but what I do think is happening here is that the shadow banking industry is trying to pull a “Spitzer sting” on the SEC. After all, the shadow banks have the most to lose if the SEC wins its case against Goldman.

      1. MyLessThanPrimeBeef

        I wonder if we willl get a Supreme Court one day in the future that will rule a corporation can run for public office, just like a human being.

    1. KFritz

      Pic appears to be ‘dog’ and ‘coatimundi,’ MesoAmerican and South American relative of the raccoon. They’re both very mellow, especially the Coatimundi, which in the wild is just as ornery as a raccoon.

  2. But What do I Know?

    Is the book event on Thursday still on? Can you give a quick update for your loyal readers. . .

  3. lambert strether

    LIBOR’s a privatized Thatcherite construct with zero transparency and zero accountability.

    It’s a gaggle of old school ties swilling sherry and conspiring against the public.

    Why don’t people treat LIBOR as market manipulation, pure and simple, instead of treating it as some sort of index?

  4. fresno dan

    “Europe’s Debt Crisis: Your Questions Answered New York Times”

    Your answers were the most elucidating, and I just don’t say that because I’m a regular reader, but I’m a regular reader because your answers are the most elucidating.

  5. Div

    Although I reject Kagan, it’s sure not because of her lack of the judicial credential. That’s meaningless. (I’ve been laughing at the astroturf articles trying to claim the Kagan-Miers comparision is wrong because she has better “credentials” than Miers. I sure don’t think Miers was less “qualified” than anybody else. It’s clear that formal credentials no longer mean anything. There’s no reason one even needs to formally be a lawyer at all to be truly qualified to sit on the court. Any generally well-educated, intelligent layman who cares about the public interest would be for that reason alone more qualified than anyone who sits there now.)

    1. aet

      For any lawyer “worth her salt”, such an appointment is a pay cut, and a substantial one too.
      But you know, money really is not everything.
      Even for lawyers. Hard though that may be to recocile to one’s experience.
      From my readings of history, to expect a Magistrate of a Supreme Court to be anything other than conservative (of Justice under the Law) would be to expect too much.
      This kind of job is essentially and always “conservative”: but that word does not carry in this context the idiosyncratic and odd denotation which that word has acquired in recent American political discussions.

      1. Ina Deaver

        I generally applaud true conservatism, although I believed in the crusading of the Warren Court. No, my problem with Elena Kagan is that she’s a corporatist.

        I want a real person who values the rule of law, and who is willing to think long term about the policy implications of the directions that the Court has been taking. At its best, the Court is neither just another piece of the government, bought and paid for by the elite, nor an anchor dragging behind us as we grapple towards something better. At its best, the Court is justice in the face of power.

        I want justice in the face of power. Kagan is never going to be my voice for that, but neither was Wood.

        I want a lawyer, and a very, very good one. But one who probably did not make anywhere near enough powerful friends on the way up. I truly despair of getting it.

  6. Valissa

    Great to hear that some folks are finally being realisitc and practical on “climate change.” Since we really don’t know how much of climate change has been caused by humanity but we have to deal with all the consequences of climate change (both human and natural), the approach laid out in the BBC article actually makes sense.

    This is one of the points I’ve been concerned about….

    “Climate change has been represented as a conventional environmental ‘problem’ that is capable of being ‘solved’. It is neither of these. Yet this framing has locked the world into the rigid agenda that brought us to the dead end of Kyoto, with no evidence of any discernable acceleration of decarbonisation whatsoever.”

    Given that the climate change propaganda (framing) has substituted the traditional concerns of ‘pollution’ and ‘alternative energy’ with the new and improved terminology of ‘climate change’ it’s not surprising that the framing of the problem had gotten all contorted. My question has always been… who has been attempting to benefit from the change in terminology and why?

    1. Valissa

      Of course, this approach still doesn’t seem to deal with the ongoing problem of an increasingly toxic environment and regulation of toxic chemicals.

      17,000 potentially harmful chemicals kept secret under obscure law
      Of some 84,000 chemicals being used commercially in the United States, some 20 percent — or 17,000 — are kept secret not only from the public, but from medical professionals, state regulators and even emergency responders, according to a report at the Washington Post. And the reason for this potentially harmful lack of openness? Profit. A 1976 law, the Toxic Substances Control Act, mandates that manufacturers report to the Environmental Protection Agency any new chemicals they intend to market, but manufacturers can request that a chemical be kept secret if disclosure “could harm their bottom line,” the Washington Post reports.

  7. MindTheGAAP

    On Canada (I recall that Australia is almost as bad–I just haven’t been following the country too closely lately):

    Canadian household debt – a perennial worry in recent years – has ballooned to a point where it’s now more than double 1989 levels […]

    Household debt in Canada reached a record $1.41-trillion in December. If that was spread among all Canadians, each person would carry more than $41,740 in outstanding debt – an amount 2.5 times greater than 1989, according to a report by the Certified General Accountants Association of Canada.

    And Canadians are okay with taking on still more debt. Nearly 60 per cent of respondents whose debt had increased through the recession – and 92 per cent whose debt decreased or stayed the same – still felt they could either manage it well or take on more debt.


    Canada now has the dubious distinction of ranking first in terms of debt-to-financial assets ratio among 20 OECD countries, with its debt-to-income ratio hitting 144 per cent by the end of last year.

    –>I think the US is still a little higher, but the gist remains the same.

  8. dearieme

    “It’s a gaggle of old school ties swilling sherry..”: oh come now. It’s the middle of May, surely they’ll be swilling madeira by now?

  9. Peripheral Visionary

    Re: The HuffPost’s Business Reporting Shows the Site Maturing. I’ll believe the HuffPo is maturing when they stop posting the usual “guess which celebrity has had plastic surgery” trash.

    Re: Academics urge radical new approach to climate change. Interesting, and likely a move in the right direction. I particularly liked this:

    “The raising up of human dignity is the central driver of the Hartwell Paper, replacing the preoccupation with human sinfulness that has failed and will continue to fail to deliver progress.”

    That indeed is a change of direction, although one not likely to go over well with large parts of the environmental movement, who have become the self-appointed moral scolds of the modern era.

  10. Anonymous Jones

    I enjoyed Jesse’s piece. One more exhibit to file in the why-we-need-strong-regulations subfolder: “There’s one a**hole who is going to ruin it for everyone else.”

    We don’t need regulations for the vast majority of the community-minded and law-abiding; we need them because of the few sociopaths among us like the trader Jesse profiles.

    1. craazyman

      Yeah, that was a good one. I bet this guy goes to the grave believing in his myth. Then he’ll hit the wall like a ripe tomatoe. boowahahaa ahahaha hahaha.

      This is the kind of sickness Melville had in mind with his portrait of Claggart in Billy Budd, which I posted a few days back and won’t repeat. Interesting it came from Chapter 11. Another synchronicity. The skies are full of them these days and so are the seas. :(

  11. curlydan

    From article in Jesse’s blog:
    “Goldman, in a quarterly regulatory filing, said it made it through the first quarter without a single day of trading losses, the first time it had accomplished such a feat.”

    Would love to hear from experienced, Wall St types what a normal winning percentage might have been 10 years ago. I mean, apparently, GS couldn’t even do this in the stock market bubble of 2000, right?

    From a statistical perspective, it seems really unlikely given all the noise in the system. Even if we assume a probability of winning of a near God-like 95%, then the probability of winning on every single day of the quarter (assume 65 business days) is 3.6% using a binomial distribution. Reduce that winning probability to 90%, and you get 0.1% chance.

    Do casinos even do this well?

      1. psychohistorian

        They didn’t deserve to be bailed out the last time and should be in jail!

        Wake up folks and keep these revelations of impropriety growing in a cumulative sense so we can develop enough social angst to DO SOMETHING! Please and thank you.

    1. MyLessThanPrimeBeef

      Let’s hope the animals were not unduly distressed emotionally or phystically to make that photo possible in order to entertain Homo Not-So-Sapiens Not-So-Sapiens.

  12. Bob Visser

    Thank you for publishing the interview with Christine Lagarde in Les Echos.
    At last someone, who is present in the European kitchen, is allowed a voice in one of America’s media. Preferable to mr Ambrose, who is bitching from the outside, obeying his (American?)master’s voice(s). Rgds Bob Visser

  13. sam hamster

    What did I say? These Europeans come out of their conference rooms slapping each other on the back with new deals designed to stave off armageddon. It’s another trick. The truth is that underneath their suit pants, they wear diapers because they all pee their pants. They sit in their meetings soaked in their own urine, because they are weak.

    They have nothing to announce, except tales of the doings of shadow puppets. The Euro went back down. The market fizzled. These Ministers, now, lay in their beds with their eyes wide open, dreading the dawn.

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