Links 5/19/10

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Why mice fear the smell of cats BBC

Remote wiping thwarts secret service ZDNet

Dopamine System in Highly Creative People Similar to That Seen in Schizophrenics, Study Finds ScienceDaily (hat tip reader John M)

JAMA commentary: Time to rethink causes, possible treatments of mental disorders EurekAlert (hat tip reader John M)

Moonwalking 4-year-old is China’s ‘prince of pop’ CNN. Yes, this is a break from our regularly scheduled programming.

From Thailand lambert strether and Economic costs of political instability Bangkok Pundit and Thai Army Moves in Slowly Nimal Ghosh

The Thai bloodshed may be over: I got this news alert from the Wall Street Journal, “Thai Protest Leaders Call Off Demonstrations,” but see no story that corresponds to that news item. It seems to be wrong, this is a more current report from the Guardian: Thailand cracks down on redshirts – LIVE

Goldman Sachs Hands Clients Losses in ‘Top Trades’ Bloomberg

You Should’ve Seen the Trade That Got Away Paul Kedrosky

Single currency bloc plays ‘beggar-my-neighbour’ Martin Wolf, Financial Times. Key points: The Eurozone will stay together (not sure Wolf’s optimism is genuine; he may not want to be seen to be arguing for Eurozone breakup) only by virtue of big time currency depreciation, which will not be very nice for its trading partners; the root of the problem was NOT public debt, but private debt.

Proposal gives regulators discretion in derivatives ban Financial Times. Obviously, the idea is to kill it when no one is looking, which of course serves the industry. If you kill it now (and that is warranted, this is a poorly conceived measure), then the powers that be might have to come up with something sensible. But that might inconvenience the industry. This little finesse is perfect for them.

„Die Lehman-Pleite war vorsätzlicher Betrug“ Faz. Via e-mail from Bill Black: “It’s interesting that while the video of my House testimony about Lehman, the Fed, FRBNY, and the SEC went viral on the web, led to Bill Moyers scrambling to interview me, and led to this FAZ interview it has not led to any story in the major U.S. press other than Bill Moyers Journal.”

European Businesses Caught in Credit Squeeze From Greek Debt Crisis New York Times. Ahem, I was hearing about this from established firms with very clean balance sheets in 2008. I wonder how much relief there really between then and now.

‘How can a [CDS] market be made?’ FT Alphaville. A simpler way to get much (not all, but much) of the intended result would be to ban cash settlement of CDS in an event of default. That is how the contracts were originally set up….assuming the EU had the jurisdictional reach, which per below, it doesn’t.

Constructive Populism James Kwak

The arrival of regulatory revenge Eurointelligence

Antidote du jour;

Picture 41

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  1. IF

    I saw Bill Blacks interview before this came up and forwarded it to my relatives. It is fantastic and in German. Which I was hoping for. The Spiegel and the FAZ take independent voices seriously. The FAZ has a long list of interviews of bloggers and other non-MSM players.

    1. IF

      I find it even more impressive as the FAZ is the conservative/ right of center national paper and publishing from Frankfurt am Main. Yes, this is the most American German town, and a city that is most famous for banking. Wondering how this affects subscription rates.

  2. Ina Deaver

    Interestingly, toxoplasmosis – a disease organism which begins its life cycle in soil/mice and must complete it in cats – disables the ability of mice to reasonably detect and fear cats through this mechanism. The mice get reckless, and then they get eaten. Because that is exactly what the organism needs.

    When I read that, I started wondering what organisms might have control of us.

    1. alex black

      Selfish gene theory. Genes don’t care about their host organisms – they only care about their own perpetuation, and will direct organisms toward that end. Sometimes thats good for the organism (good health, etc), sometimes it’s bad (male spiders get eaten by the female after mating, but the males keep chasing down the females like a drunken frat boy. Oh, and death – not good for the organism, but the genes have no more need for it). Apparently this gene found a curious way to replicate itself, using two organisms.

      I applaud its creativity.

      1. DownSouth

        alex black,

        More pseudo-science, hun?

        Why does it not surprise me that a Liberarian-Austrian-Neoliberal (LANie) true believer like yourself would be a disciple of Richard Dawkins, whose pseudo-science, such as that put forth in his book The Selfish Gene, gives intellectual cover to the LANie’s orgy of greed and selfishness?

        1. alex black

          Wow, I seem to have a stalker, and one who is projecting a massive amount of stuff onto me that isn’t me.

          Not sure whether to engage in discussion or pursue a restraining order…. :-)

  3. Doug

    Hi Yves! Any opinion on the Dodd amendment mentioned in the FT piece? I must admit I am having trouble getting a clear take on this bill.



  4. Richard Kline

    Re: the JAMA commentary, it’s just wrong.

    Severe mental disorders are not genetically derived. There is an irreducible developmental—i.e. ‘nurture’—component to them. They are not describeable nor treatable as disorders of the brain, as opposed to dysfunctions of the mind, specifically maladaptations to skewed early development. This assertion is well-understood by therapists who seriously, and successfully, treat severe psychological disorders; the evidence on it is well-documented and irrefutable. Despite that, most of the theraputic professions ignore that evidence and push pills, which in fact for many of the afflicted is not necessarily a vile option, if very much sub-optimal.

    Those fact sets are willfully disregarded by large sets of the scientist-ic industries who would prefer a different perspective. Genetic determinists are forever giving interviews announcing the superiority and impending success of their not at all germane approach, serious methodological problems with their interpretation of the ‘evidence’ notwithstanding which uninformed journalists are ill-prepared to perceive or question. The issue is clouded by the fact that theraputic approachs typically work only in optimal settings with a small subset of individuals, leaving many sufferers hoping for another solution, which is presently and for most will remain a chimera. We have had sixty years of this–60, six-oh–with the biologists never coming up with substantive result, but we hear these ‘breakthrough’ pronouncements regularly on average every 18 months, likely right in tune with the grant-funding cycles of the ‘researchers’ who don’t understand jack regarding what they profess to study.

    1. Francois T

      Richard, may I suggest you pick up a subscription to Molecular Psychiatry?

      You’ll quickly realize that things are not as simple as the duopoly Nurture v. Nature.

      I ought to know: before becoming an MD, I was a psychologist. I’ve seen all flavors and strains of this debate for the last 30 years.

      The enormous strides in the genomics field have forced a, hmmm! shall we say some reconsideration of the complex relationships between genes and environment.

      That said, I share your distrust of “their not at all germane approach, serious methodological problems with their interpretation of the ‘evidence’ notwithstanding which uninformed journalists are ill-prepared to perceive or question.”

      Some geneticists appear to harbor a definite contempt for psychotherapy as being “unscientific” and the product of a “touchy-feely cop out” for those too stupid to do “hard science”.

      To this argument, I can only answer…LOL! Go ahead punk ass tough guy! Do me an interventional study in a natural real world setting when trying to test any hypothesis in the field and come back to me crying that it is so damn hard to do. No shit Sherlock! But, you told me this was for the touchy-feely only. Make up your mind dude! Which is it?

      Answer: it’s both…genes and environment. Yes! it’s complex, not amenable to ad reductio explanations.

      Sartre was right; God condemned us to free will. Makes life interesting, albeit difficult at times. We got to find the answers by ourselves, only to discover there are more questions awaiting us.

      A rather clever fellow this God, wouldn’t you say? :-D

      1. DownSouth

        i> You’ll quickly realize that things are not as simple as the duopoly Nurture v. Nature.


        Answer: it’s both…genes and environment. Yes! it’s complex, not amenable to ad reductio explanations.

        Sounds like the practitioners of medicine are vulnerable to the same sort of Manichean constructs that the practitioners of economics are. The economists have walled themselves off into two warring camps: the blame-everything-on-private-enterprise camp and the blame-everything-on-the-government camp.

        But as you explain, in the field of medicine it’s not so simple: “It’s complex.” I believe the same is true with what ails our sick economy: “it’s both,” and there are problems that arise from both the way we conduct government and the way we conduct private enterprise.

        Both are in need of honest diagnosis, which is difficult in the current emotionally-charged environment.

      2. alex black

        “A rather clever fellow, this God, wouldn’t you say?”

        I’ve been mulling that question over for decades, and am coming to the conclusion that I am in a abusive relationship.

        1. Skippy

          “in a abusive relationship” infers two or more separate individual identities unable to exist without harming the other.

          Skippy…personally I try to be honest but, kind to my self, with out assigning names of deity’s to my inner conversationalists….amends alex…rofl.

  5. Richard Smith

    Naked CDS: when you delve down into the BaFin announcements, it looks as if Market Makers are exempt. They didn’t have to notify short positions under the March reporting requirement, on which this ban seems to be based:

    So I doubt whether the Frankfurt market in CDS is broken.

    But if it was, who would care? A BaFin ban might put a crimp in CDS trading these names in London but I doubt whether it stops it altogether. And there’s always the Euro to short instead.

    The ban looks at best like a parade of impotence, though just possibly a calculated one. At worst, they have simply provided a list of 10 companies to keep a suspicious eye on. Still, they’ve annoyed the French at least (whose banks are presumably major shorters of German CDS, hahaha), so it’s not all bad news.

    Another data point: the Italians are, um, fixing up their banks’ capital ratios, by suspending MTM on Euro govt. bonds. Something of a tell.

    1. Richard Smith

      Oops, meant “the French(whose banks are major protection buyers)”.

      Joke’s on me.

    2. Ronald

      From yesterday’s German magazine Der Spiegel:

      “EU und Bundesregierung kündigen einen großangelegten Angriff auf die Finanzindustrie an. Mit der Aktion verfolgen Merkel und Co. vor allem ein Ziel: Die Wähler sollen endlich das Gefühl bekommen, dass sie nicht alleine für die Krise zahlen.”

      The EU and German government announce a broad-based attack on the financial industry. In doing this, they have one goal in particular in mind: Voters must finally get the feeling that they are not the only ones paying for the crisis.

  6. Kevin Smith

    If a government agency snatches your cell phone etc, the first thing they will do is take out the battery and the SIM card/memory chip if they can, then stuff the device in a little Faraday cage [a “Faraday bag”] which blocks radio transmissions in and out. That pretty much deals with the remote wipe issue.

    On the other side of this cat-and-mouse game, devices can be configured to automatically wipe themselves [and/or first wipe their decryption passwords] if a variety of conditions are met, for example, removal of the battery, SIM or memory chip … failure to put in a password every x number of hours or days, wrong password more than x times, or a special fake password intended to trigger a wipe, etc etc.

    On the OTHER side, the device can be dropped into liquid nitrogen to very rapidly de-energize it, then can be disassembled at leisure and the memory chips read out under controlled conditions.

    And on the other side …. etc etc

  7. Richard Kline

    And on a note of organized politics, it would appear that insurgent democrats did a better number on the Democratic Party than at first I’d feared. More power to them: we need more reformers and anti-corporatists if we’re to get any real reform. The Beltway Party isn’t going to deliver, so new faces in tune with the public interest are needed; good to know a few more may be arriving in due course.

    1. Valissa

      Do you really believe that? After all, once upon a time all those congress critters of both parties were outsiders who got elected and went to DC and then became insiders in order to stay in power. Some basic sociology knowledge shows that people pretty much eventually conform to the herd they join (with a few exceptions but no enough to make a difference).

      While on the one hand I am very pleased that Sestak beat Specter, Sestak is most likely going to vote however the party leaders want him to… so what good is voting in so-called Democratic outsiders if they all can’t wait to suck up to his lordship Obama and his royal advisors (toadies) Pelosi and Reid?

  8. Swedish Lex

    Yes, Martin Wolf’s relative optimism is surprising given the harsh assessment of the euro’s chances of survival.

    The Germans are preparing their laundry list for new EU rules to punish countries that are fiscally loose. I would not be surprised if other euro states in return will require an embryonic European fiscal resource. Watch the French.

  9. lambert strether

    Thanks very much for the links on Thailand; I was writing up the latest and accidentally typed “Baghdad” rather than “Bangkok.” It then occurred to me that urban warfare is starting to look like a feature of whatever post-_____ landscape we seem to be inhabiting these days.

    * * *

    Meanwhile, it will be hard for some of us not to identify with a marginalized movement whose demand is for an end to “double standards.” Also, and especially tragically for a Buddhist nation, the Thais do not have MLK (or, indeed, Ghandi) to look back to…

    1. MarcoPolo

      Thanks for posting that. I’ve been trying to follow this story, but there isn’t very good info coming out right now. You wrote something to suggest that only he monarchy retained any credibility. (I looked back to see exactly what you had written and couldn’t find it. So, sorry if I misunderstood.). Well.. that’s complicated too.

      Maybe there are characteristics similar to Tienammen Square but the better analogy may be Nepal.

  10. Hubert

    Thanks Yves,
    especially for today. Great links, great posts.
    On Bafin/CDS: Merkel looks troubled politically. I am astonished how many Germans (mostly CDU voters) instinctively get that she comitted a act of high treason on german taxpayers and savers. (if one wants to add historic irony: while avoiding Brussels and staying in Moscow on a 8th of May)
    Television state-propaganda did not come through as normally. NEwspapers more sceptical so far. General mood very much against it…
    Her reaction: Reinforce her propaganda and some half-baked measurres.
    I guess that will work for a while…..

    1. DownSouth

      just catering to his real constituents…

      Not all his constituents, just those with the fattest checkbook.

      1. Valissa

        Well, he is the Chairman of the Senate’s Banking Committee so it’s pretty clear where his loyalty lies.

  11. MyLessThanPrimeBeef

    JAMA commentary: Time to rethink causes, possible treatments of mental disorders


    I have a feeling 40, 60 years later, they will still be saying the same thing: time to rethink causes, possible treatments of mental disorders, or many other things.

    The question is, why don’t we just skip this step?

  12. itad?

    dismal job outlook and the return to profits and bonuses on Wall Street:

    The kids already have the technology, but there is no point in rolling it out across an economy predicated upon the best thief wins. Arlen Specter is a good example. He operates in the mud, one step above Joe Lieberman. The Obama machine made him promises, and then threw him under the bus, and for what, to make it a crime for young people not to buy its economic slave insurance plan, and to double the size of the IRS for enforcement, while proposing a VAT to ensure that agency could completely control every stage of production, everywhere.

    Enron / BP Tautology : “… a house of cards over a pool of gas…”

    So, the old family nexus fundamentally broke the agreement back in the 70s, replacing natural new family formation with debt, “illegal” immigration and outsourcing, and has been applying increasing control over associated, decelerating economic profit, hiding the deficit in the debt misdirection of ponzi exploitation economies, with an increasingly efficient click gearing system, which rewards debt consumption with job promotion, and throws out any history that would change the course.

    In accordance, the “American” ethic devolved from individual initiative to create social economic profit (main street), to borrowing working capital and betting operational cash flow on the demographic ponzi scheme, to book phantom profits from “hypothetical future valuations”, to trigger current bonuses (Wall Street). The people at the top borrowed from the taxpayer at 0%, with losses covered at taxpayer guarantee, ultimately reaching 30,000 : 1 leverage, while those at the bottom borrowed at 20%, from the people at the top, and together they all produced the greatest bull market in History, in a classic Graham pump and dump operation, fully expecting to saddle the kids with the ultimate result.

    Now, the single frequency, single amplitude followers are recognizing that they are way off course, and bankrupt, while the proprietors are looking for a place to hide, on a planet with no place to hide.

    As-is to To-be Bridge

    You have everything you need to draw a ladder diagram of the as-is control circuit, translate it to a wiring diagram, and compare it to current economic structures, to get exactly how the system operates, to any level of detail. You also have everything necessary to build micro-generators.

    You will require community constitutions for talent induction. Outcomes are symptoms of processes, which are symptoms of participation, which is a symptom of rules. Communism, socialism, and capitalism are all bankrupt. They removed all the fuses and disconnects, blew out the ground, and every time a component shorts, it fries the circuit.

    I would suggest that you break the problem up into getting transportation off the surface, replacing factory farms with family farms, providing communities with independent access to the global communication stream, and giving the natural food chain avenues to re-install itself. The motor is there, but how / if you hook up to it is completely up to you.

    When the US Supreme Court enabled prosecution of Family Law, tying it into the banking and credit information system, the enterprise architects immediately started training young talent to breed on variable frequency and amplitude, to the end of building components for global virtual economies, of which there are now over 30, some in their 3rd generation, which has fully removed the C talent leg of the old 3 phase/generation motor.

    Bred behavior cannot be changed in real time, and the planetary limit switches are closing the vice on the old system, driving the empire into the brick wall.


    You cannot have fusion without fission. AC is built from DC beyond the knowledge of DC. Physics, chemistry, and biology are all the same thing, from different perspectives. Symbiotic circuits provide for algebraic reduction and compilation. Getting past linear, to quantum, and back to linear is a function of microscope focus. The clock is a relativity circuit. In a relativity circuit, every component is a virtual transformer. In biological systems, DNA is the recursive operating system.

    The supply circuit is a virtual rotor, and will jump the parallel circuits, to physical armatures, when it sees economic profit in doing so. The law follows behavior, first informally, then formally. To the extent you want to bring the old system along, you have to create virtual gear separation, reorganization, and reincorporation, to avoid opening the circuit, which means that you have to bank surplus talent in each gear, beyond the knowledge of the click/gear.

    (a one-way valve into Treasuries is not a good exit plan … unless you can carry the breakdown voltage across the gap, which awaits you on the other side of the cave entrance. It’s a RICO problem. The multi-nationals wrote the interstate/global commerce rules to eliminate access for small business, which originates from natural new family formation, giving themselves exemptions, while funding the proliferation of single amplitude, single frequency types within agency to enforce the rules, with taxpayer money, preventing small business from backfilling the economy when it collapsed. The FBI, among many others, warned Congress on many occasions, which resulted in congressional transfer of FBI resources, to Homeland Security.)

    1. itad?

      “One man who saw through his own eyes and thought with his own brain. Such men may be rare, they may be unknown, but they move the world.”

      “Look at history. Everything we have, every great achievement, has come from the independent work of some independent mind.”

      “Throughout the centuries, there were men who took first steps down new roads, armed with nothing but their own vision. The great creators, the thinkers, the artists, the scientists, the inventors stood alone against the men of their time. Every new thought was opposed, every new invention was denounced. But the men of unborrowed vision went ahead. They fought, they suffered and they paid. But they won.”

  13. Valissa

    U.S. States Consider Starting Their Own Banks
    North Dakota is the only one out of the 50 U.S. states that is still operating with a fiscal surplus, and some economists argue it is in part due to the state-owned Bank of North Dakota – the only bank of its kind in the U.S. – which has been able to pump money into its own economy by making loans to farmers, small businesses and families. Numerous states are beginning to consider the idea of starting their own bank, since the issuance of credit is one of the main ways that money enters the economy. …

    Hawaii, Illinois, Massachusetts, Michigan, Missouri, New Mexico, Vermont, Virginia, and Washington each have proposals on the table in their respective state legislatures considering the formation of a state-run bank in one way or another. In addition, current candidates for political office in eight states – California, Florida, Idaho, Illinois, Missouri, Oregon, Vermont, and Washington State – are pushing a state-run bank as part of their platform.

    1. MindTheGAAP

      some economists argue it is in part due to the state-owned Bank of North Dakota

      Uhh…no…it’s due to an oil boom, I think…

      I like the idea, though–a state runs its own bank, leverages itself to the hilt, and then gets all the cash it wants from the feds because it becomes too big to fail.

      Unfortunately, the Feds have little money left at this point.

  14. Sundog

    Bloomberg often gets justifiably slammed for bizarre headlines, but this is a good one.

    “Class of 2010 Set to Flood U.S. Labor Market as ’09 Graduates Wait Tables”

    The scramble for jobs may depress earnings of new and recent college graduates for years to come and handicap their future career opportunities….

    Unemployment among people under 25 years old was 19.6 percent in April, the highest level since the Labor Department began tracking the data in 1948.

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