Links 7/30/10

Andrew Bacevich, Giving Up On Victory, Not War Tom Englehart

Grantham: Everything You Need to Know About Global Warming in 5 Minutes Barry Ritholtz (hat tip reader Francois T)

Gulf of Mexico Has Long Been a Sink of Pollution New York Times. Mirabile dictu! The Times discovers that the Gulf has dead zones!

The CIA and WMDs: The Damning Evidence The New York Review of Books

How to Reconcile July’s Rising Markets with July’s Dismal Economic News Eugene Linden

Greek Government Invokes Emergency Powers To End Truck Strike MarketNews (hat tip reader Scott)

Wyly brothers charged over ‘undisclosed $550m’ Financial Times. If the claims presented are proven, this looks awfully clear cut. The Manhattan DA referred the case, against big Republican donors, to the SEC in 2005.

A New Spotlight on Japanese-Style Deflation Ed Harrison

IMF Says U.S. Financial System May Need $76 Billion in Capital Bloomberg. Um, the IMF talks about underwater CRE, where the $76 billion seems light relative to serious delinquencies ($700 billion, and a 10% loss severity seems pretty optimistic) and doesn’t touch second mortgages on residences, which is a $150 billion hole at the four biggest banks.

Japan Seems Tolerant as Yen Rises WSJ Market Blog. A continuing mystery…

Curbing Your Enthusiasm Paul Krugman. Gives Obama far more credit than he is due, but at least makes the case for Elizabeth Warren as head of the consumer financial services protection agency.

Antidote du jour:Picture 1

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  1. Bates

    “Companies have been making their numbers [reported earnings] by cutting costs, not increasing sales. Martin Feldstein, President Emeritus of the National Bureau of Economic Research, the organization that officially calls recessions, pointed out during a Bloomberg interview that the group has not called the end of the recession in part because final sales have been lame at best: if first quarter GDP had been based on final sales, it would have risen 0.02% not 2.7% (and sinking with each revision).”

    US stock markets are the poster child for the US Economy.

    US stock markets are the equivalent of an NFL franchise for a city…except the Wall St Bulls Team plays five games per week, not one like the Saints, Forty Niners, et al. The games are longer than NFL games, lasting longer than a couple of hours each business day. To find out how the Wall St team is doing one can tune the tv to a business channel, without sound, and observe the money honeys (cheerleaders) pulling for the Wall St Bulls team.

    Sorry about the sexist ‘money honeys’ comment but the term is common usage on many blogs…and the sweaters the cheerleaders wear lack only a team logo to complete the analogy. I suggest a logo similar to the U of South Florida Bulls.

    See U South Florida logo here…looks like an inverted head and shoulders formation.

  2. InsideTrader

    I wouldn’t say Krugman gives Obama more credit than he is due. He attaches criticisms to every positive statement he throws Obama in this article. I think it’s pretty even-handed that PK mentions how Obama’s appointments were all tools of Rubin and his other appointments are pretty Bush-like. Unless you were being sarcastic, that is. Now, as far as Warren is concerned, sticking a Harvard lawyer on the case of financial advocacy? Well, whatever works I guess.

    2012 is soon here, show your cards, Obama.

    1. Bates

      Jim Quinn… Most excellent link! So true yet so funny…

      “This is where we have a problem. The worshippers of Keynes, that rule the country, are pissed off at you. Don’t you realize that government spending of your money, borrowed from the Chinese, with the bill passed to your grandchildren, was supposed to reinvigorate your animal spirits. They handed you other people’s money to buy cars and homes and what do you do? You stop buying cars and homes as soon as they stop paying you to buy cars and homes. You ungrateful bastards. Bennie has been hugely successful at ruining the retirements of millions of grandmothers by paying them .20% on their money market accounts while forcing mortgage rates for 30 years down to 4.5%. And still you don’t buy houses. Timmy has instructed Fannie Mae to make home loans to anyone with a pulse who can make an X on a piece of paper. No money down, no proof of income, no assets. Just like the good old days. Still you don’t buy houses. What is wrong with you?”

    1. michel

      The warming link was truly dire stuff.

      First, its not ‘just physics’. That increased CO2 has a forcing effect is just physics. That the planet’s response to forcing effects is long term warming is not. Its a complicated matter of fact and depends on whether climate feedbacks exist at all, are negative, positive or on balance neutral. They could turn out to be mildly negative, and we would not have to revise any of the laws of physics. Rather as, were we discover this car did 10 mpg instead of 25 mpg the designer had hoped for, we would not have to revise any of the laws of physics.

      Rather as, when we apply more heat to a boiling pan of water, the reaction of the water is not that its temperature rises over 100C.

      We move from this error of understanding to the logical fallacy of arguing that correlation implies causation. The global average temperature has risen at the same time as CO2 in the last 100 years. Therefore, the argument goes, CO2 rises cause temperature rises. Not necessarily. It may be coincidence, it may be that rises in temperature cause rises in CO2.

      Finally, it invokes Pascal’s wager. The logical fallacy of Pascal’s wager is that it proves too much. We can always hypothesize, as Pascal did, some enormous cost, in his case eternal damnation, which hypothetically can be avoided by some fairly small inconvenience, like going to Mass. The trouble is that if we are not to turn into obsessive compulsive creatures stepping over cracks in the pavement, muttering charms to avoid the evil eye, we are not excused for showing that the course of action proposed actually makes sense: the evil to be avoided must be real, and the action must actually avoid it. Pascal’s wager does not help in this, it is a form of begging the question.

      Consider a couple of abhorrent arguments on the same lines. Pascal’s wager would justify preemptively nuking Iran. Consider the issue of choice: it would justify accepting Islam, just as well as it would justify accepting Christianity. But you can’t do both.

      All in all a real blow to the reputation of Grantham, at least outside his area of expertise. One failure to grasp the central issue that the AGW issue turns on: feedbacks. Two howlers in logic. Not good.

      1. DownSouth

        Well yes it is “just physics.” You raise the amount of carbon dioxide in the atmosphere of a planet and, all things else staying the same, it will raise the planetary temperature every time, guaranteed. It’s all explained here.

        On another thread today you were trying to downplay the devastating consequences of neoliberalism and global capitalism (read deregulation). Corporate apologists always think they can make the fat tail risks of any activity that’s profitable for them disappear, and that’s true whether they’re talking economics or climate change.

        The science backing up AGW is not the same as the superstitions that cause one to “step over cracks in the pavement” and “mutter charms to avoid the evil eye,” but that seems to be lost on you.

        1. eric anderson

          “Well yes it is ‘just physics.’ You raise the amount of carbon dioxide in the atmosphere of a planet and, all things else staying the same, it will raise the planetary temperature every time, guaranteed.”

          Who can argue with that? But “all things else” do not stay the same. The physics is very complicated. Each factor (say, raising CO2) affects other factors, some of which produce feedbacks, positive and negative — these feedbacks have not been accurately quantified. And some of the effects are positive (plant growth).

          In the distant past, we have had CO2 levels ten times higher than they are today, with temperatures that were at times colder than they are today. How can that be? Can you tell me why this occurred, if CO2 is such a powerful forcing agent?

          1. wb

            @ Eric

            “Can you tell me why this occurred, if CO2 is such a powerful forcing agent?”

            STUDY the subject, climatology, Eric. Do you seriously think that guys who have dedicated their lives, their whole careers, worked hard to get PhDs and get scholarly papers published, have NOT checked everything like that, over and over, and come up with convincing results ? I mean, climatology has been studied for a couple of centuries. Do you think all that info can be conveyed in a text box ?


          2. DownSouth

            eric anderson said: “In the distant past, we have had CO2 levels ten times higher than they are today…”

            That is just another falsehood:

            CO2 is produced by fossil fuel burning and other activities such as cement production and tropical deforestation. Measurements of CO2 from the Mauna Loa observatory show that concentrations have increased from about 313 ppm in 1960 to about 389 ppm in 2010. The current observed amount of CO2 exceeds the geological record maxima (~300 ppm) from ice core data…


            Over the past 800,000 years, ice core data shows unambiguously that carbon dioxide has varied from values as low as 180 parts per million (ppm) to the pre-industrial level of 270ppm. Paleoclimatologists consider variations in carbon dioxide to be a fundamental factor in controlling climate variations over this time scale.


          3. DownSouth

            And if you’re talking 500 million years ago when carbon dioxide levels were much higher, there’s a scientific explanation for why temperatures weren’t as high, which is explained thoroughly in the last video Francois T provides in his comment below.

            As the author says, you’re engaging in “fast food” science and buying into a popular “urban myth.”

        2. michel

          You have not answered the question. Other things being equal, doubling CO2 will raise the average global temperature by 1 degree C. This, if it happened, would be no cause for alarm.

          To get to alarming levels, you have to invoke amplification of this warming quantity by positive feedback. The nature and extent of feedbacks are not simple physics, in the sense of laws of nature. They are matters of fact about how the planetary climate actually works. The evidence is not the same. When we subject CO2 to heat, its temperature rises. When we ascertain the energy content of a liter of gasoline, we find out what it is. That’s physics. Whether that much energy will take this car 10 or 30 miles is a matter of all the variables of the car. Same with climate. Whether that 1 degree forcing will lead to no warming, 1 degree warming, or 4 degree warming, is not simple physics. Its about the nature of the planetary system.

          I do not believe there is any evidence for long term positive climate feedbacks, and there is suggestive evidence that they may be negative. That is, a 1 degree CO2 forcing (or any other forcing of that magnitude from any cause) may lead to less than a 1 degree rise in global average temperatures.

          Pacal’s wager is logically fallacious because it justifies not stepping on cracks in the pavement. It is not logically fallacious because a belief in AGW is as rational as a belief in avoiding cracks. AGW is considerably more rational, there is at least some reason to think it is a plausible hypothesis.

          Its problem is, the evidence for it is not persuasive. But that is not a problem with Pascal’s wager. Pascal’s wager is a simple logical fallacy, known since ancient times, when it was referred to as petitio principe. Begging the question.

      2. michael

        And on top of that, the question everybody should always ask themselves is:
        What would need to happen, so I would change my opinion?
        If nothing less than a miracle would suffice, you are having a belief, not an opinion.
        If your response is something like “90% of the scientists would need to state that man made global warming does not exist / is not a threat” then you are just blindly following a majority. That’s fine for you, but don’t start arguing with other people on any details, just say “x% of scientists say so!”

        1. michel

          Personally, I would need proof of feedback mechanisms. If we find proof that they exist and are strongly positive, and we find some way of explaining the MWP and the LIA given them, I would agree that rising CO2 levels (or any other forcing of similar magnitude) will provoke very dangerous warming.

          1. michael

            I find it telling that while making temperature forecasts for 2100, the IPCC seems unable to model the little ice age (or Maunder minimum), much less explain -out of their model- what might have caused it.

  3. ruralcounsel

    The Grantham AGW link was par for the course for an AGW denialist-denier. Since comments there were closed, I’ll mention this here…

    (1) Grantham presumed global temperatures are rising. A portion of the hullabaloo on Climategate was the fudging of the data. The fact is true temperature records are short, perhaps too short to discern long term climatic changes. The warming trends aren’t seen in un-manipulated temperature data. The surrogates for temperature are immensely uncertain and undependable. Cherrypicking data and massaging baselines corrupts the analysis.

    (2) While CO2 is a “greenhouse” gas, the physics say that there is a point at which it can no longer cause an increase in retaining reflected radiation from the earth; i.e. when all the reflected radiation of the absorbed wavelength is already absorbed. In other words, a sponge can’t take up more water if there isn’t any more water to take up. Doesn’t matter how dry it is. Data suggests we’ve already reached that point. Thus increases in C02 wouldn’t cause more warming.

    Not realy very insightful; just a recap of the counter arguments and a repetition of their oversights and errors, and continued silence on the observable weaknesses in ther AGW proponents arguments.


    1. DownSouth

      ruralcounsel said: “The warming trends aren’t seen in un-manipulated temperature data.”

      This is a 24 carat lie, and needs to be called out as such.

      An explanation of where these sorts of falsehoods come from, along with a thorough rebuttal, can be found here and in much greater detail here.

      1. DaRkJaWs

        DownSouth, if you read this, could you please contact me at

        I have this idea to increase social justice and I want to know what you think of it and what Reinhold Niebuhr would think of it. In essence, I seek to solve all of the problems perceived by the likes of Yves Smith and many others and I believe it can be done with my idea.

    2. Francois T


      Try to look at sources that are worth something:

      Before anything else, let’s dissect the anatomy of a myth.

      The scientific debate: Amateurs…MOVE OVER!!

      There are honest scientists who do have objections to AGW. You should listen to them instead of Glenn Beck:

      This climate change thingie won’t affect me, so why should I care? You sure of that?

      “Those” emails PROVE this is all a fraud!
      Sure! If you’re gullible enough to believe cherry picked material obtained by criminal ways. (Do I have to inform you that hacking into servers is a criminal offense?)

      4) It ain’t going to be hot. As a matter of fact, Earth’s gonna cool big time!

      Climate changes no matter what! It’s not man made, dontcha know?

      No I don’t.

      1. eric anderson

        Sorry, this is an honest question. How do you know the Climategate emails were a hack and not a leak?

        Second, if you read the “cherry picked” emails there is no way to put some of those communications in a context that makes the people involved look like disinterested seekers after truth. They look like people trying to subvert the frickin’ scientific process by blacklisting dissenters.

        Let’s not even get into data manipulation and faulty statistical methods and ludicrous non-scientific sources being cited as evidence in the IPCC report. This is evident apart from the Climategate emails.

        1. wb

          Sorry, Eric, everything you say is poorly informed. The climategate hack was a black op to sabotage the Copenhagen conference and flood the media with a smokescreen, by quote-mining and spin and blatant lies. There’s a dirty propaganda war going on, all over the internet, funded and promoted by Big Oil and Big Coal and other powerful forces who have a vested interest in preventing any progress towards limiting CO2 emissions. Think they care about the future of life on Earth, or any of us ?

          Look what goes on, for example :

          ‘Atmospheric CO2 has not increased in 150 years ‘ the headline says.

          Do you believe it ? It could be true, or not. If it’s a lie, who would want to spread such disinformation… ?

          So, lets check the source.

          Turns out that the guy who actually did the research and published it, didn’t say anything like that headline.

          You can check out the version spun by the denialists here :

          And check out the original below, :

          “Basically, Bristol University scientist Knorr has discovered that the proportion of CO2 being absorbed by natural ‘sinks’ (i.e. the oceans and forests) has stayed roughly the same, despite the amount of carbon being emitted shooting up.

          The implication is that we have more time to address climate change than some believe because more carbon has been absorbed than previously thought.

          But Dr Knorr is adamant that we must still adress climate change, and favours mandatory caps on emissions. I ask him if that’s what we need to do and he says, “There is no other way”.

          But I was aware this story would generate a lot of coverage suggesting the research supports climate change denial, and that’s exactly what we’re seeing. I think when the nationals get hold of this (probably tomorrow) it’ll go into overdrive.
          So here is an interview in which I ask Dr Knorr specifically whether his research backs up climate sceptics. (He says no, if you can’t listen to it)”

          1. eric anderson

            Thanks wb. Your answer has nothing to do with what I was questioning, nor did you demonstrate any proof that it was a hack.

            I have provided links that prove the data manipulation going on in the surface temperature data that anyone can check and see. I doubt anyone will. Look at the raw data. Look at where it was collected. Look at the “corrections” that have been done on the raw data. Where do you live? Are you in USA? Look at the official temperature stations in your area on the website. Look at the number of stations with numerous siting deficiencies. Is this any way to gather data? No, it is not.

            We have sufficient information now to judge the US records, the New Zealand temperature data has been exposed as fudged, and now Australia is looking dodgy. The more we look, the more we find scientists have adjusted the raw data so that temperature increases look more extreme.

            The bias is screaming. The warmists put their fingers in their ears.

      2. DownSouth

        Francois T,

        Great links that go a long way to debunk the campaign of lies and disinformation of the AWG deniers.

    1. michel

      I am not spreading disinformation. You can find out about the role of feedbacks by reading the IPCC. You can find out about the logical fallacy of taking correlation for causation by reading any statistics textbook. You can find out about the fallacy of Pascal’s wager…. well, by applying it repeatedly in different areas and seeing how you like the results.

      Or are you saying that Pascal’s wager is valid argument? I hope, if so, you attend Mass regularly. And accept the Prophet’s teaching also.

      Not that you have to accept the validity of PW to be convinced of the truth of the AGW hypothesis. Its just a fallacious argument sometimes used to justify action of various sorts in accordance with various unproven hypotheses. It should not be used, but it only refutes on silly argument for action of a certain sort. Its invalidity does not refute the original AGW hypothesis.

  4. Hugh

    That’s a really nice succinct piece by Eugene Linden, and one scary finding: “in the past year, one in five American households suffered income losses greater than 25%.” The paper economy is tooting merrily along while the real economy is already in the crapper. That is what many of us have been saying here. You have a bubble economy covering over deteriorating fundamentals. But the bubble is showing strains and what seems to be keeping it going now is a kind of self-cannibalizing of industry. As Linden writes about the current spate of upbeat earnings reports: these

    “nice results are coming to some degree at the cost of future consumption which constitutes more than 70% of GDP. Question: how many times can that card be played?”

    Probably as many times as they can get away with it. But at some point the music will stop and the deflationary death spiral this behavior heralds will begin.

    1. Bates


      “nice results are coming to some degree at the cost of future consumption which constitutes more than 70% of GDP”

      What is seldom mentioned about consumer spending is that 50% of it is spent into the ‘services sector’. I bring this up because many people assume the majority of consumer spending is on tangible items.

  5. Bates

    Yves…Great Antidote du Jour! The beauty in the photo could be a twin to our ‘Mocha’.

  6. FrancoisT

    Re: CIA and WMDs

    This quote explains why the Obama Doctrine of Look Forward, No backward is so hopelessly stupid and dangerous:

    The National Intelligence Council and director of central intelligence, George Tenet, gave the NIOs concerned with WMDs big cash awards for producing the NIE, and seven years later and seventeen months into the Obama administration they remain in the same or equivalent jobs.

    We so need a complete investigation into the Iraq mess, it’s not even funny.

  7. gepay

    There have been times in the distant past when the CO2 level was much higher than today. The climate is always changing. I seem to remember that in the relatively recent past (geologically speaking, 12000 years ago we were in an ice age. Im my relatively recent past (the 70s) I remember watching a science show warning about the possibility of an ice age. In fact there has been global warming going on for the last 10ooo years or so – since the last ice age. Our ancestors looked on with happiness as the glaciers retreated. This is not to say that man’s technology hasn’t ?advanced? to the point where we could cause nuclear winter and end the human world as we know it and would like to live in it.
    Yes I know that there are the giant fossil fuel companies who would prefer that nobody looks into the possibility of man induced global warming by CO2 or as they like to say anthropogenic global warming. On the other hand, other factions of the global elite look on global warming as a handy way to control the masses and welcome its accptance as we know any cut backs in carbon usage will not affect people like Bill Gates or any of the other billionairs or the US military. Speaking of which, I think the US military is the greatest danger to peace on this planet at the present time – the US global empire. In a time when people are talking of budget cuts, its budget seems to be sacrosanct.
    I have seen a lot of junky predictions made by advocates of AGW. I have seen a lot of junky computer models of the climate. I am all for going through the hard process of weaning ourselves off of fossil fuels and in general making our world more energy efficient but really the possiblity of AGW is one of our lesser concerns.

  8. wb

    “…really the possiblity of AGW is one of our lesser concerns.”

    Can’t agree with that, gepay. Climate chaos is making it much more difficult to solve the various other pressing problems you mention.

    “The climate is always changing.”

    That’s not the problem. The problem is the rate, the SPEED of change, which is unprecedented and is directly cause by us. There’s no time for ecosystems to evolve and adapt. Global agriculture will be subjected to more frequent extreme weather events. That means not enough food. Glaciers disappear, rivers dry up, sea levels rise, etc. isn’t some abstract ‘possibility of AGW’, it’s happening NOW and the consequences are going to impact everyone.

  9. Richard Kline

    I’d read Bacevich’s piece already, and it is both thoughtful far beyond most such commentary, and in my view a good summation of the policy conundrum facing decision makers in US foreign-military policy (increasingly the same thing). Well worth the time to read.

    There is a further level of analysis to those considered in the discussion as Bacevich frames it there, however; a most important level, which is hardly ever discussed. He concludes with the apt question, only partially rhetorical, to the effect that what is the use of using military force now, as of 2010 and specifically by the US and Israel, if that force ‘doesn’t work’? He poses this after making a solid case that in fact that military force doesn’t work, a conclusion with which I concur and which I believe could be summarized to much greater effect even then he chooses. This misses the larger point, though, that it is widely believed that military force is used in the rational application that ‘it will work’ for some stated end. While the decision makers and actors involved in such military actions may in fact believe this, that they are as a matter of policy and craft, acting to achieve a particular outcome in the main that belief is faulty. In parallel (though not in common) with the way individuals may believe overtly one thing while their actual motivations held and-or-processed beneath the level of their awareness are quite different, even completely opposed, the _actual stated goals of policy_ seldom fully or accurately describe the functional motivations driving policy, specifically military policy. This is something which the study of history makes exceedingly plain, time and time again. Actors say X, but when the issue is studied in detail one finds that Y, Z, A, B, and C are all at least as important in forming the problem set and framing the decision space. And often that D, never even spoken aloud, is likely the largest single driver of action.

    What I mean here, in brief, is that we aren’t attacking other countries because we believe in the policies stated; our policies are specifically, NOT rational, and not those rationally stated. This isn’t simply true of the US, now; it is true in the main of all state and societal actors most of the time, in most things, and most especially in things military. We are not in Afghanistan or Iraq or Colombia or under the thumb of Israel ‘to win.’ Although of course we both expect to win, and want indeed to win. We’re there to hurt people some of us think they don’t like; We’re there to prove that we are the masters both to ourselves domestically and to our putative friends and presumptive foes abroad. We’re there to demonstrate that our culture is so laughably superior to those we attack that they are contemptible for even attempting to compete. We’re there for simple racism. We’re there for profit, copious, egregious, lying on the table in bales of bills for the taking. We’re there ‘to save those poor incapables from themselves, just as we have already done for ourselves, God bless us.’ We’re there so that someone else doesn’t get the opportunity to rake off costs and build up their image. And a hundred other reasons seldom weighted as part of the equation, and most seldom discussed openly as goals _at least as important as the ostenstible stated policies_ behind action.

    This problem could be discussed at far more length, but I’ll let that suffice. But it is part of the explanation of why, for example, we don’t initiate negotiations and leave Afghanistan, but instead wind up bigger and badder every single policy which has already failed abjectly there and which has no vector for a successful outcome. Because we are not really there, killing the Other, ‘to win.’ We’re there because we can and to show that we can. This is why failed policies by states seldom change when proof of their failure is mountainous, stinking, and ever-increasing: failure ends when resource ends or political power is taken away, or alternatively when the reality of either or both is so imminent that it drowns out the policy of illusion with the pressure-wave of reality impact oncoming. The behavior of state-actors makes much more sense from this kind of perspective, I’ll state that for fact. Don’t believe what is said, or even get caught up in it: believe what is shown, and expect that you don’t see it all even so.

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