Links 10/7/10

Dear readers, apologies, the site was down most of the evening. With the higher traffic due to intensive mortgage coverage, I’m pushing the limits of my current setting (despite the little Blogger icon many of you see in the address line, this site is in WordPress….and WordPress does NOT scale well. It’s fine with blogs of normal traffic levels, but at high traffic levels, even with hypercaching, it’s a resource hog. I did cast about last year for a solution. However, the recommendations I got were wildly divergent, this even after providing considerable data. That meant a lot of the respondents really did not understand my service needs, and as a non-techie, I’m in no position to discern which if any might be correct). So please bear with me.

Update 10:00 AM: This wasn’t a normal traffic problem. I’ve been hit by denial of service attacks. The logfiles show massive traffic spikes. So I guess I’m annoying people who like fighting dirty.

Moon impact ‘formed Saturn rings‘ BBC

Bee-Killing Disease May Be Combination Attack, Researchers Say BusinessWeek (hat tip reader John M)

Ann Coulter may face voter fraud charges: report Raw Story

Newsweek ‘in merger talks’ with Daily Beast website Independent

Wen warns against renminbi pressure Financial Times. So Wen makes it very clear: the “disaster” that would result is unemployment in China. Therefore everyone else in the world must have unemployment instead. Wen fails to explain how what might indeed be disaster for China is so terrible for the rest of the world.

Credit for the Recovery Daniel Gross, New York Times

The Emerging Anti-Trade Coalition, and Its Dangers Robert Reich

IMF supports a new round of Quantitative Easing Eurointelligence

Last Redoubt of Structural Unemployment: Policy Uncertainty Mike Konczal

Tech CEOs tell US gov’t how to cut $1 trillion from deficit NetworkWorld

Investigation of Lender Processing Services by Florida Attorney General

NY Fed takes $180m hit on Hilton debt restructuring Financial Times. This is not the last time bomb lurking in the Maiden Lane portfolios.

UK house prices fall by record 3.6pc in a month Telegraph

Waivers Address Talk of Dropping Health Coverage New York Times. This shows the stupidity of the Obama plan. You need everyone in one big risk pool. Otherwise, the insurers cherry pick.

Mortgage Pact Set For Wells, 8 States Wall Street Journal

The Blundering Herd Vanity Fair (hat tip reader Crocodile Chuck)

The rise and rise of correlation Financial Times.

Antidote du jour. From New Scientist, “New species discovered in Papua New Guinea” (hat tip reader blintrick):

Picture 15

This Australasian tree frog was found living 30 metres above the ground.

Researchers often heard them croaking gutturally from the forest canopy, but only managed to find this one male.

It is probably a new species, though its DNA will have to be checked to be sure.

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    1. Jim Haygood

      Many thanks for the Reuters link, tpn. HR 3808 is every bit as scandalous as the preceding TARP LooterFests.

      According to the Thomas summary of legislative actions, HR 3808 was whooped through the House and Senate by voice vote and unanimous consent, respectively. [Enter ‘H.R. 3808’ in the search box at this link:]

      This means that EVERY incumbent is responsible for allowing this corrupt outrage to go through. I presume with 99% certainty that Chicagoland Obama will sign it, on behalf of his palm-greasing bankster cronies.

      Time to put the torch to this reeking kleptocracy! (At the polls, of course! Speaking metaphorically ;-). )

  1. alex

    Yves: “This wasn’t a normal traffic problem. I’ve been hit by denial of service attacks. The logfiles show massive traffic spikes. So I guess I’m annoying people who like fighting dirty.”

    Compared to breaking and entering, doing a DoS attack on a blog is a pretty minor offense. So if your bank hasn’t broken into your home, consider yourself “lucky”.

  2. Tom Stone

    Yves, have you considered talking to Ken Cooper at Calculated Risk? He seems to know what he is doing. And you are offending some important and powerful people who don’t have scruples. Denial of Service attacks should be expected, consider them a compliment.

  3. MyLessThanPrimeBeef

    When a tree frog leaps, he closes his eyes and most of the time, lands on the intended spot.

    I guess that’s what central bankers are doing, emulating tree frogs. Whether these central bankers are as good as tree frogs, we will find out soon enough.

  4. Jim Haygood

    I was hoping you’d post the NYT article about waivers to ObamaCare coverage requirements. It’s not only stupid; it’s corrupt. McDonald’s gets a waiver for its flimsy mini-med health plan; now Burger King and Wendy’s are at a competitive disadvantage unless their lobbyists can get (read ‘buy’) analogous special treatment.

    It reminds me of tax shelters, during the bad old days of 70 and 90 percent marginal rates. Theoretically ‘the rich’ paid these confiscatory rates. But in practice, with drilling partnerships and film making partnerships and livestock partnerships and double-declining balance real estate depreciation, nobody with a half-bright tax accountant actually paid anywhere near those astronomical rates.

    Now — to no one’s surprise — the crony capitalism model has crept into ObamaCare, destroying even the thin pretense of universality.

    This is Chicago-style gangster politics, and it stinks to high heaven. Kudos to the NYT for publishing this incendiary article four weeks before the election. Now it’s clear which set of incumbents deserves a fist in the face at the polls. Let ’em bleed!

    1. Francois T

      “Now — to no one’s surprise — the crony capitalism model has crept into ObamaCare…”

      Bingo! Plus, one got to marvel at the unreal spin Nancy Ann DeParle put on this shameful “waireritis” afflicting the Obummer administration:

      ““The president wants to have a smooth glide path to 2014,””

      Pray tell WTF does that mean exactly? You think you can have a smooth glide path when you reform (albeit partially) something as colossal as 17% of our entire economy?

      Are you kidding me? Or worse, kidding yourselves in DC?

      Like Jim wrote: “now Burger King and Wendy’s are at a competitive disadvantage…”

      Like…duh? What kind of justification could the administration have to refuse the same waiver to Wendy’s and Burger King?

      If I’m not mistaken, none whatsoever.

      So, how long before others in “similar” industries start to cry foul and demand a waiver too?

    2. attempter

      Those of us who said from the start the “regulations” in this thing were totally bogus are already being proven correct.

      Besides the waivers, the other big push at the moment is to gut the 80% rule.

      So far, strangely, not a peep from Krugman, who was so garrulous in astroturfing for the bill last winter. I guess it’s just like with his sham “anti-war” stance: He feels his work here is done.

      1. Jim Haygood

        Don’t forget the ‘universal 1099 filing’ requirements for all businesses, which kick in at the end of 2011.

        Wonder whether they’ll start issuing (read ‘selling’) selective waivers from filing 1099s as well?

        Gangster capitalizm at its finest. Shame about the smell!

  5. Francois T

    “I’ve been hit by a denial of service attacks. The logfiles show massive traffic spikes. So I guess I’m annoying people who like fighting dirty.”

    Fighting dirty? DoS attacks is a freaking felony that carries a max of 15 year prison sentence.

    We’re talking criminal minds here.

    1. alex

      “DoS attacks is a freaking felony that carries a max of 15 year prison sentence.”

      I stand corrected in my 10:28. Looks like the penalty for DoS is even stiffer than for breaking and entering.

      1. Francois T

        Well, that depends who is breaking and entering. If they’re “contractors” for the banksters, Florida police won’t even bother them.

  6. alex

    Re: Wen warns against renminbi pressure

    “Wen fails to explain how what might indeed be disaster for China is so terrible for the rest of the world.”

    And they say Americans can be ethnocentric. Cue the China apologists. This kind of crap is why the time has passed for nicey-nicey talk.

    1. MyLessThanPrimeBeef

      It happened in the 30’s and is happening again – unemployment, recession/depression, currency war, begger-thy-neighbor…

      If you repeat an experiment and the result is the same as before, you might think it’s not the players in the experiment but it’s about the way things are set up.

  7. alex

    Re: The Emerging Anti-Trade Coalition, and Its Dangers

    By defending the status quo as though it were free trade, or even anything approaching it, Reich is being disingenuous, or maybe just plain dumb. Sounds like he’s still carrying water for his old boss.

    Dear Mr. Reich: get a clue. Currency manipulation means there is no “free trade”.

    1. Opir

      People who call themselves “Free Traders” or defend the current regime should be required to read Paul Craig Roberts’ article on the subject, particularly this:

      “However, free trade doctrine is based on the assumption that domestic capital seeks its comparative advantage in its home economy, specializing where its comparative advantage is best and, thereby, increasing the general welfare in the home economy. David Ricardo, who explicated the case for free trade, rules out an economy’s capital seeking absolute advantage abroad instead of comparative advantage at home.”

      This is the part they should repeat to themselves (or perhaps write it 1000 times):

      “Labor arbitrage is not trade and does not meet the Ricardian conditions for comparative advantage upon which the case for free trade is based.”

  8. CingRed

    Yves, You might try asking Karl Denninger for recommendations for a platform. He is both a techie and a blogger so he might be able to give you some good advice to resolve you problem.

  9. jbmoore

    If the site is suffering a DoS, your ISP should be filtering the bogus traffic at the upstream router. If they aren’t, then they are not doing their jobs. If it’s a SYN attack, they can turn on tcpsyn cookies if the underlying OS is Linux. If it is Windows for the OS, then you are kinda out of luck with a SYN attack. Your site admin can put in the ticket and clue in the support tech if need be.

  10. CingRed

    Tech CEO on saving Trillion from deficit: “We know that it is possible to achieve the level of savings we have outlined here,” the report said. “We also know that these savings can be realized while at the same time improving service. We’ve seen it in industry after industry, and we’ve seen it in our own companies’ transformations.” The government has an abysmal record when it comes to making IT changes. Just look at the way over budget but never delivered air traffic system just to name one of many. Before we dump a bunch of money down another IT hole it might be prudent to get a clear understanding about why the gov. seems to be so bad at IT changes and fix those problems first.

  11. Pepe

    I’d like to hear some critiques of Reich’s article.

    Sure, he’s calling for a more progressive tax structure, and other social reforms like free education. But, so what if everyone has a free education, if at the end, there’s no job to be had?

    Wouldn’t some restriction on “free” trade be good for workers? If it’s not worth it to ship manufacturing to Mexico, China, etc. then won’t more jobs be created at home? Isn’t this a good thing?

    Is Reich just carrying neoliberal water here?

    1. Yves Smith Post author


      Jamie Galbraith makes the same point on education in the Predator State. His defense of free trade is very, um, naive.

      I could have written a book 3x as long as ECONNED came out, and one of the topics I had to ditch was the really flawed foundation for the free trade argument (mind you, this does not necessarily proved the converse, that free trade is bad, but that the “proofs” of “free trade is good” suck).

      The most compelling drive by shooting is in a 1954 paper, “The Theory of the Second Best” by Lipsey and Lancaster. It uses trade to make a much bigger and more devastating point.

      It shows that the case for more free trade is based on a very simplistic idealized (two country!) model. A lot of conditions apply: free capital flows, no tariffs, no transaction costs (!), etc. The usual “not very close to reality” abstraction.

      The killer bit is LL shows (both by example, and then a more rigorous argument) that when you can’t obtain the idealized state (and you can’t in this case, efforts to get closer to it may not make you better off and can make you worse off.

      There are other critiques, but I found this one to be pretty fundamental.

      1. alex


        While I agree with your criticism of the simplistic theories of free trade (not to mention how most economists dismiss things like optimal tariffs which can be derived even from those simplistic theories) I think an even more cutting argument is that we don’t have free trade, or anything approaching it.

        Calling the status quo “free trade” is downright Orwellian. At the very least it’s buying into the opposition’s propaganda. You can’t have free trade with rampant currency manipulation (not to mention numerous other barriers), and that obvious point should be emphasized.

        I’m not convinced that true free trade is the best of all world’s, but it would certainly be an improvement on what we have now.

      2. Ina Deaver

        Free trade is a myth – at least as it is defined in the abstract models. The problem is that the differences between reality and the model are then treated as externalities: someone is paying the real costs of making us “worse off,” but it isn’t the companies that are reaping the profits from “free trade.”

        Also, economics is notoriously bad at valuing inputs that are quality dependent: it tends to remove them from the equation and hold the variable constant, or it tends to assume them away. It is still sort of a frontier in economics to assign a value to “clean water” as opposed to just “water,” or “living wage” as opposed to just “equilibrium wage.”

        Until economics gets these matters in hand, it is going to be difficult to get economists to say anything of use on the issue of free trade. And I quit studying economics because I felt that the cult of free trade was a crock, and that humans are not utility maximizing rational players. Without those, the models just fall apart.

        I really, really like James Galbraith’s work, and his father’s before him. Worth revisiting JKG’s “The Culture of Contentment” with new eyes.

      3. Jim Haygood

        Doubtless the fading Empire State could stanch some industrial losses by erecting tariff barriers to imports from the other 49 states.

        But does anyone seriously think the U.S. as a whole would be better off with internal tariff barriers?

        ‘Second Best’ refers to second-order effects. Autarkic states are invariably poor; open-trade entrepots such as Hong Kong and Singapore are richer than their surrounding hinterlands. Mere coincidence? I reckon not!

        1. alex

          “Doubtless the fading Empire State could stanch some industrial losses by erecting tariff barriers to imports from the other 49 states.”

          You may have noticed that there is no currency manipulation between the states, and that just as NY has no tariffs on products from any of the other states, so none of the other states have tariffs on products from NY. In addition there is full labor and capital mobility amongst the states. As such interstate trade bears little resemblance to the status quo in international trade.

          In general I’m a fan of true free trade, but it needs something called a “government” to enforce the conditions and settle the disputes. That’s why the Free Trade Agreement quaintly known as the Constitution of the United States has a few side provisions, like the establishment of a federal government.

          “‘Second Best’ refers to second-order effects.”

          No, second best means an approach that is second best as determined by simplistic theories, but in the messy world of reality often work better that the supposed “first best”.

          “Autarkic states are invariably poor”

          And who is talking about autarky? That’s like saying that someone who decides to cut back by skipping the donuts and pork rinds is starving themselves. Just because some is good doesn’t always mean that more is better.

          “open-trade entrepots such as Hong Kong and Singapore”

          Another absurd comparison. Entrepots make much of their money from trade, while often producing very little themselves. Often that’s ok as they provide a useful service, but it only works for very small countries. Is the US in that category? Suppose every country decides to become an entrepot? Can we all make money by moving stuff around without anyone producing it?

    2. MyLessThanPrimeBeef

      Moderation in all things.

      A little trade is good, like a little water is good for you. Too much, you will drown.

      Saving is a good habit but if everyone saves, you get the thrift paradox.

      Writing is good, but if everyone is a writer, who is going to cook?

      The world will always have need for trash collectors, busboys and wannabee actors.

  12. Denis

    Re WP not scaling, I’ve a plugin that outperforms each of WP-cache, Object-cache, Super-cache, DB-cache and Hyper-cache. Feel free to get in touch by email if you’d like to give it a shot.

  13. Nelcisco

    State capitalism is where we’re headed. All the globalist are preparing for China to lead that way.

  14. Ex-Lehman

    Regarding the Thundering Herd article, I worked with Ricciardi at Credit Suisse, his actions were thoroughly covered in the Wall Street Journal during/after the 2008 crash. What he did there and at Merrill, churning out lame CDOs and shilling them on the unsuspecting, finally on the firms themselves. was identical to what structurers were doing at Lehman from about 2003 on. Also, there was a parallel marginalizing of risk managers at Lehman. Instead of asking why Lehman is not still around, the question should be, why are BofA and Citi still around?

Comments are closed.