Links 6/11/10

Seal whiskers sense faraway fish BBC

Govt may record users’ web history, email data Delimiter. Don’t panic..unless you are in Oz.

General: Kandahar operation will take longer Washington Post. The news summary (via e-mail) had this priceless tidbit: “…a crucial campaign …will take longer than planned because local Afghans do not yet welcome the military-run operation.” Equally stunning stuff in the piece, such as complaints from US officials that Karzai hasn’t stepped up to act like “a partner.” It appears not to have occurred to anyone that the locals see him as a crook and a thug.

Short Bursts on a Long Road to Nowhere Chris Floyd

Scientists offer varied estimates, all high, on size of BP oil leak Washington Post

As US doubles oil gusher estimate, top BP brass summoned to meet Obama Raw Story

Can the U.S. Punish BP’s Shareholders? Room for Debate, New York Times

Some home truths on oil for president Philip Stephens, Financial Times

Europe’s antipathy to stress tests is well founded Gilian Tett, Financial Times. Unfortunately, this piece may reflect Miss Tett’s need to play politics now that she is one of the most senior editors at the FT. It has some very good observations (why the EU banks are in a mess and the authorities are afraid to turn any light on them) with a recital of the stress test party line (that it’s a sound process, as opposed to a clever and successful part of a concerted effort to goose bank stocks). Reader Scott pointed out another large omission:

Eurobanks would seem to have an “issue”, in that their most problematic, or largest problematic, holdings are sovereign debt. That makes their being strengthened by capital injections from those same sovereigns a little dicey. US banks leverage—the big 6, goes from 12x at GS to 17x at JPM and MS (12/31 figures). In Europe you go from RBS and STD at 21x to BNPP at 30x, UBS at 35, and DB at 49x. Hard to gussy those babies up.

Taleb: Debt Problems Are Worse Now Than in 2008 Ed Harrison

One almighty decoupling FT Alphaville

‘It Makes Sense to Be Gloomy’ Michael Panzner

Talk of Trade Wars with China, Tariffs, and Currency Manipulation Move to Forefront; US Trade Imbalance – Whose Fault is It? Michael Shedlock. A compilation of recent stories.

The Interchange Cross-Subsidy: False Analogies Adam Levitin, Credit Slips

Principal Reduction More Effective Than Load Mods to Avoid Default: Deutsche Housing Wire. This blog has been pointing that out for well over a year, but nice to see more data.

Antidote du jour: Every pet should have his own Eames chair!

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  1. Richard Kline

    Re: the WaPo piece on the Kandahar [in]operation, here’s what “Teflon Stan” McChrystal should have said in paraphrase: “When you go to subjugate the people, the poeple have to want you to subjugate them—and we haven’t convinced them yet.”

    But I’m going to talk about another article to the similar effect I read last night at the Christian Science Monitor:

    Now, the CSM has turned into a reliably _hard_ right rag from its former, much better self, but this piece was a typical embedded gung-ho, interview the grunts piece. Some of us have read a fair amount of military history and first person accounts of actions in various wars: this was a total eye-opener if you read between the lines. Here are a few points in takeaway, directly from statements of joes in teh 12th infantry a few miles outside Kandahar. 1) They absolutely do _not_ control the countryside. 2) The Taliban engage them—when they want to, where they want to, as they want to—not the other way around. 3) The occupiers are engaged in an attritional contest where everywhere they go is now mined and they lose a steady, bloody drip of casualties anytime they move. 4) The Taliban have received heavy reinforcements from outside the region which the occupiers are unable in any meaningful way to interdict. 5) The Taliban can, and do, kill anyone who cooperates in any remote way with the occupation, and neither the occupation nor its regime can do anything about this whatsoever. 6) The operational objective of this particular unit was, in effect, to ‘inconvenience the manueverability’ of the Taliban units. 7) The operational objective of their regional command (in Kandahar) was ‘to control the big cities so that they (the Taliban) would have to come to terms with us.’ And keep in mind, this is all taking place at the height of The Surge II in the region with maximum deployment of assets declared as the primary objective of the present occupation campaigning season.

    There is a word for this configuration of conditions: defeat. This is why Stan McChrystal is re-polishing his shiny balls: he and his are completely immobilized, have lost any operational initiative that they may have had, can’t do a damn thing about it, and are now trying to keep the lare population centers hostage to some kind of settlement. This looks hihgly like the Soviet occupation of Afghanistan, minus the saturation bombing but with far more boots on the ground. This looks amazingly like the Indochina dumb-a-thon; even the kind of rhetoric used by the guys in the article I mention would be entirely in place, trying to paint a picture of failure as one where the occupation is ‘in control and on plan’ by milspeak fuzziness and omission, much of it the unintentional result of what is left when candor is excluded.

    We’ve lost in Afghanistan. The only one winning there are the grossly parasitic private contractors sucking down the governments billions at cost-plus for another season of the Long Score of which they are the sole beneficiaries.

    1. Skippy

      Historically undefeated never came up at centcom, heck you could beat the US military by shooting its batterys aka the bunny kind.

    2. craazyman

      Never have figured out what “we” are doing over there. They’d be content to kill each other but now that we’re there they want to kill us. It doesn’t matter who is there. They would Kill them. Kill the women who show their face in the daylight. Kill the infidels who think new thoughts. Kill the devil wherever he is. Kill Satan in the shadows. Kill Satan on the cliffs. Kill Satan in the grains of sand. Kill your neighbor. Kill your cousin. Kill like a man of God. Kill Satan in yourself until you’re a grain of sand under a shoe. And then kill that, utterly. Why are we standing in the way? Just can’t figure that one out. Unless it’s some sort of training exercise where they can use live ammo. But it’s probably more than that even. It’s a probably a morphic field and an n-dimensional thought form moving through the DNA like some Greek God, half insane and half burning with a terrifying pride-filled intelligence like 15 equations all solving for infinity over and over again until its zero and small as a black hole. It makes me nervous just to think about it. But then, I suffer from the ennervating influence of the subtler realms.

    3. Francois T

      Alan Grayson was right about Afghanistan. Once we started the whole Iraq fiasco, we had no business being in Afghanistan.

      Obama won’t be able to spin away the current defeat, since he hasn’t even define victory.

      What a clusterfuck!

    4. psychohistorian

      Folks don’t understand that this is just like the War on Drugs….a never ending war to support imperialism. But since imperialism is never discussed this “war” is sold as “Enduring Freedom” or some other great kabuki phrase.

  2. BDBlue

    A Chelsea Dagger drops point first by Stirling Nixon – a history of neo-liberalism, liberalism, the meaning of the Blanche Lincoln “victory” and a tribute to a great song, all in one post (although really that description doesn’t do this very dense, but terrific, post justice).

  3. john c. halasz

    Re European banks’ raw leverage ratios:

    They use different accounting standards than the U.S. banks. The biggest difference is that they don’t net their derivatives books and the U.S. banks do. Just think what JPM’s leverage ratio would be under European accounting standards.

  4. charles

    In relation to the Gillian Tett’s piece, which contains surprising information following Mr Trichet’statement in Korea that the stress-tests for the European banks were about complete and with Mr Draghi stating jointly that they will be published, and the expression used by Mr Trichet during the ECB’s press conference of ‘appropriate communication’

    Daniel GROS, director of the Center for European Policy Studies, a think tank in Brussels, who made a name for himself as one of the proponents of a European Monetary Fund, interviewed today in the Dutch NRC Handelsblad reports of figures from the BIS that German banks and financial institutions have 250 billions euros of loans’exposure in Spain while Dutch banks have 127 billions, foresees a big cover up coming, orchestrated by the banks,the governments and the ECB.
    I refer it to it as our own Elephant in the Room, Yves and
    Ed Harrison have mentioned it repeatedly
    German Handelblatt is even more vocal: ‘Banking crisis is back ‘;2599089

  5. Will C

    In response to the Afghanistan piece: This is an imperial expedition. The thoughts of Afghans about their government is not taken into consideration. For god’s sake, the opinion of Americans is not taken into consideration in terms of the financial crisis (see the Bailouts), so why would we listen to Afghans?

    The Australian internet piece: At least the Australian government is discussing tracking all internet activity. Here in the freedom loving US, we don’t need a subpoena to get at internet records. Not to mention the NSA computers in the Southwest that are just quietly recording everything that happens online..

    1. NOTaREALmerican

      Yeah butt, we’re winning the wars! We’ve captured or killed Al Kyda #2 over 500 times now. How many times have they captured our Vice President?! ZERO Dude! We’re winning 500 to nuthin’. You’ll never see THIS in the liberal media. You liberals all hate America, and the troops.

      1. aet

        I dunno…it always seemed to me that America was very liberal when it came to using her armed forces.

  6. Anonymous Jones

    On Principal Reduction and Loan Mods. I saw this piece yesterday and thought it was another “dog bites man” story as you like to say.

    Yes, I have always agreed with you on the “effectiveness” of principal writedowns. In fact, much of my day is spent modifying commercial mortgages, and that’s almost all about principal writedowns, or there’s nothing important to talk about.

    The thing is, however, that we should always acknowledge when we speak of this that we are talking about the *short-term* effectiveness of principal reductions. The long-term consequences are unknown. I, for one, know many people who are emboldened by the knowledge that during the next bubble, they will keep all the upside and then foist much of the downside on the lender. Ah, moral hazard. It makes any long-term analysis difficult.

    1. psychohistorian

      What about all us folk out here that didn’t go into consumer debt that we couldn’t afford nor refinance our houses to make it so we are under water on our mortgage. Are we supposed to feel good about these cramdowns and debt writeoffs? Doesn’t doing this set precedent just like bailing out the banks? So now that precedent has been set with the banks what are the NEW definitions of economic rule of law? How is it possible to have a working economy until the bailout problems are resolved?

      1. aet

        Spoken like a true Athenian creditor, of the two thousand five hundred years ago:

        “Solon announced the cancellation of all debts, public and private, and the freeing of individuals under servitude for debt repayment. Though this was met at that time by outrage on the part of the creditors (though Solon himself was a creditor who gave up vast wealth because of his own reforms) it became quickly apparent to most that he had spared Athens from the violence of revolution.”


        There are many instances of full and partial, cancellation of debts, both of private debts and of debts to to taxes, throughout histoory.

        I notice that people are as moral, and as censorious of vice and immorality, as they ever were.

  7. MyLessThanPrimeBeef

    Regarding ‘Talk Of Trade War, Tariffs,…’ do you have that in Chinese?

    It doesn’t hurt to be prepared and/or learn a new language.

    Regarding Panzner’s ‘It Makes Sense To Be Gloomy,’ the only fear we must fear is that we don’t fear enough. (Some guy complained a few days earlier that he didn’t get credit for what he wrote – I hope people remember this: The only fear we have to fear is that we don’t fear enough).

    I think I will end all postings in the futher with this.

    The Only Fear We Have To Fear Is That We Don’t Fear Enough.

  8. kevinearick

    Final thoughts before the big wave:

    Decide and do; the time for thinking is over;

    40% of Americans hold BP in their pensions, and all of their holdings are one technology failure from collapsing. The pensions are toast, unless you decide to fund them locally;

    Private retail spending is falling;

    If a bank is giving the old families 20% returns on your money, they are bankrupting you. As credit contracts, physical currency is required for transactions;

    Labor has no stake in patriotism, because it enables wage arbitrage;

    GDP measures economic loss. It is balanced, or not balanced in this case, by immeasurable individual investment, economic profit, which is final demand;

    Only an economic revolution, realized quantum individual investment increase, can catch that $500T load of promises, which is exponentially being pulled forward, after being exponentially pushed back;

    The digital economy was specifically built to create gravity. It can only be balanced by an analog economy;

    Re-coherence on the event horizon is like a beach. Gravity from the digital economy is sucking the water into the wave. Analog development adjusts both distance to beach and contour of the ocean floor, individually and net. The people who took advantage of the last two years to learn how to surf will be in the best position;

    The gap is set, for those who have invested in the required skills. If you think digital computers are good at bankrupting people … You must be smarter than the computer to surf. A little exercise on all the small surf days is best. Take it apart, modify it, and put it back together;

    BlackRock and DuPont can only create gravity, which is a good investment, IF it is balanced by individual small business investment, to the end of global community development. Back-testing cannot create a path to the future;

    The tax rate to tax base and deficits to debt feedback loops will tell you what you need to know about gravity, when to launch. Once you have caught the wave, think two steps ahead, and the money will follow you. GDP to public dividend to price will tell you what others are doing;

    Building communities from scratch is a threat or an opportunity, depending upon your perspective. Evolution is about turning weaknesses into strengths;

    Surf’s up. Take the money out of the old system, and invest it in the new system. Rinse and repeat, until equilibrium;

    Good luck.

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