Links 11/26/10

Passive smoking ‘kills 600,000’ worldwide BBC

In a Land of the Aging, Children Counter Alzheimer’s New York Times

Israel police under fire for abusing east Jerusalem children Agence France-Press

Correlation Does Not Equal KochNation Marcy Wheeler, FireDogLake

Next Up: a “Flat Tax” for the Rich Michael Hudson, Counterpunch

Australia’s Senate Passes Telstra Bill Wall Street Journal. Telstra brought this on itself by behaving like a bullying monopolist.

Destination Inflation Andy Xie, Caixin

Chinese inflation and European defaults Michael Pettis. Reader Swedish Lex concurs with his analysis of Europe.

Family’s Fall From Affluence Is Swift and Hard New York Times

Investors wonder: Is the stock market rigged? Associated Press. The MSM is waking up only now?

Rally in Technology Shares to End of Year? Ed Harrison

Banks hope to buy off curbs on bonuses Guardian (hat tip Richard Smith)

China, Russia quit dollar China Daily. Not as earth-shaking as the headline suggests, but still significant.

Assets matter just as much as debt Martin Wolf, Financial Times

€9.5m Donegal property development receives one bid at auction – for €5,000 Guardian (hat tip Richard Smith). Ouch.

Who bankrupted Ireland? David Malone. From last week, but interesting nevertheless.

Shadow banks, shadow sovereigns Joseph Cotterill, FT Alphaville

Eating the Irish Paul Krugman

Antidote du jour (hat tip Richard Smith):


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  1. MyLessThanPrimeBeef

    If inflation is a tax, then tax is inflation.

    And if the Fed wants inflation to fight deflation, the Fed should just urge the government to increase tax, since tax is inflation.

  2. babaganush

    That is what you get when you mess with nature and mate a labrador with the easter bunny. Cute in a scary way.

    Evans-Pritchard had an interesting article on Germany this morning: EU rescue costs start to threaten Germany itself

    “Germany cannot keep paying for bail-outs without going bankrupt itself,” said Professor Wilhelm Hankel, of Frankfurt University. “This is frightening people. You cannot find a bank safe deposit box in Germany because every single one has already been taken and stuffed with gold and silver. It is like an underground Switzerland within our borders. People have terrible memories of 1948 and 1923 when they lost their savings.”

    1. Swedish Lex

      Yes, so it is.
      Either euro money printing and EU-federalism or bust. Probably the latter.

      1. BondsOfSteel

        I’ve wondered for a while how long it would be before the ECB starts to print. The Euro is a fiat currenct afterall, and a commitment to QE would remove much of the default risk of it’s members.

        Personally, I this is the more sane approach and will be more successfull than bailouts since it spreads the losses over the whole eurozone.

        Inflation in the core eurozone is close to nothing and the risks of highter than normal inflation in DE/FR are less than collapse in the PIIGS. (It’ll be less costly to DE/FR in the long run too.)

    2. Diego Méndez

      I agree with Swedish Lex.

      However, what shocks me the most is the fact that the German people are frightened because they remember 1923 and 1948.

      If the European Union is to be dissolved or made irrelevant, I’d be more freightened with other 20th-century European remembrances.

  3. Ina Deaver

    I’m wondering how they will spin the drop in air traffic from the new procedures? They were expecting a huge holiday season for the airlines – flights in September were up.

    But somehow I sincerely doubt that they will report truthfully on the impact of the new procedures. From preliminary reports that I could gather, they didn’t use the back-scatter machines at all at several major airports. Could it be that they do not wish the large mass of the traveling public to understand what the new procedures involve, and have to make a choice?

  4. attempter

    If it’s true that only pro-corporate “libertarians” are resisting this (walking the talk, for once), then why would “progressives” regard that as anything other than to their own shame? Articles like the Nation hatchet-job merely highlight yet another item in the endless litany of progressive dishonor.

    One reason is the pro-Democrat partisan corruption of most of their ranks. Though as we see from how Reps are politically capitalizing on this, it looks more like yet another joint Obama-Republican political project.

    But, just as in the case of Wikileaks, we see how for many “progressives”, even the ones who oppose Obama, statism as such is still a core part of their world view, as they abhor anything and anyone who’s anti-state as such. Thus Greenwald quoted one of these Nation worms as expressing absolute hatred for anyone who’s “anti-state”.

    That brings us back to the “libertarians”, who simply lie about being anti-state. They sure want big, aggressive government, but only as bagman and thug for corporations and the rich. By definition it’s impossible to support the very existence of corporations (an artificial creation of the State) at all, unless one is an extreme statist. (We can imagine lots of far more moderate incarnations of government which aren’t so radical as to enshrine and empower concepts like “corporate personhood” and “corporate free speech”. Which also shows the characteristic statist extremism of the likes of Greenwald and the ACLU as well, who support those things.)

    1. Skippy

      “libertarians” are just Pinkerton’s or hire them, to insure their psychotic desires to be the top faeces on the pile of dung they call…winners eat less shit.

    2. Yves Smith Post author

      The Nation does not speak for all progressives. Glenn Greenwald and FireDogLake have been very opposed to the new scanners.

      1. attempter

        I was referring to more direct resistance, like in the case being discussed. If enough people refused to cooperate like that, the machines would have to come out. Period.

        And I was referring to how I saw a few people advocate that on some “real progressive” blogs (i.e. the kind who oppose Obama and the Dems), and the idea was shouted down. It’s clear that if sticking up for freedom would slow down the sheep lines for the slaughterplane, our heroes want no part of it.

        That’s also why so many of them objected to the traffic-blocking in France, snail convoys and such. Never mind that traffic, queues, etc. are among the few vulnerable physical choke points the system has. Where it comes to cars and lines everyone turns into a fascist.

        They were even whipping out the violins for the poor little put-upon TSA perverts. They don’t normally say that about baton-wielding riot police. (Well, some of them do.) But what’s the difference?

  5. craazyman

    Mr. Malone’s “Who Bankrupted Ireland?” is the single best article I’ve ever read on the financial crisis.

    [Yves’ ECONNED is the single best book. ;)]

    I’m tempted to use Mr. Malone’s article as a point of departure for a long essay that analyzes the crisis in terms of the principles of Contemporary Analysis — where money = property like wave = particle and money spirit = property spirit = protection from aggression = defense of self = protection of life energy = tribal cooperation = equivalence of group and individual survival = equilibrium state propgagtion of DNA — and where destruction of money = destruction of property = aggression = money murder = Saturn eating his children = disequilibrium state of propagation of DNA = sub-optimal consciousness projection = destructio of Gnostic group channeled Imagination. But I’m too lazy. The House of Lord’s ability to call out the accounting chicanery is just one example of CA at work. ha ha.

  6. nowhereman

    I’m calling b*llshit on the second hand smoke story. It is science like this that discredits the whole field. How can you isolate cigarette smoke from other environmental pollutants, especially in the far east or anywhere else for that matter?
    What happens if everyone quit smoking, who would major polluters then blame for their sins.

    1. Yves Smith Post author

      My mother has constrictive pulmonary disease, her father was a chain smoker. All her doctors agree the smoking was the culprit, given where she lived growing up.

      And I would say in general it probably is not a stretch to see second-hand smoke as a major culprit. You will get a more acute does of toxins with cigarette smoke inhalation than from environmental pollutants, save in special cases (being close to and downwind of Ground Zero, say).

    2. paper mac

      “It is science like this that discredits the whole field. How can you isolate cigarette smoke from other environmental pollutants, especially in the far east or anywhere else for that matter?”

      With statistical controls, the same way population and epidemiological studies always isolate traits? If it weren’t possible to statistically control for the influence of confounding factors, it would be literally impossible to do any kind of observational study. What exactly is your objection here?

      1. Avg John

        Figures don’t lie, but liars figure and people love to persecute smokers.

        Someone always has an agenda to push and they always come up with these statistical studies to support outlandish claims and expect a gullible public to swallow it hook line and sinker. And depending on a person’s predisposition to a particular issue or grievance, it’s usually all they need to convince themselves of the validity of any particular study.

        I say maybe or maybe not. You don’t know for certain without thoroughly understanding the sampling and population chosen for study.

        I say if you are going to smoke, then step outside and have your cigarette out of courtesy to others (especially if there are children in the household), and if that’s not good enough for the “smoking nazi’s”, well that’s just tough.

        The planet is better off without theses nazis anyway. They are the one’s creating all the stress and trouble in the world that leads to heart disease (statical studies support this) and wars and political conflict, but they don’t want to talk about that.

        1. paper mac

          “I say maybe or maybe not. You don’t know for certain without thoroughly understanding the sampling and population chosen for study.”

          Right, so feel free to actually read the study and point out methodological problems. The Lancet paper the article is describing is linked in the text and it’s available free of charge with registration. Incidentally, you’ll find that the peer review at the Lancet is pretty functional.

          “The planet is better off without theses nazis anyway. They are the one’s creating all the stress and trouble in the world that leads to heart disease (statical studies support this) and wars and political conflict, but they don’t want to talk about that.”

          Yes, truly it is the epidemiologists who are the source of evil in the world, starting their wars and political conflicts.. what are you on about? Similar “nazis” published one of the more comprehensive estimates of Iraqi civilian war deaths in the very same journal. Did you think that was a blow for imperialism or the global corporatist state or whatever it is you’re trying to denounce here, too?

    1. Paul Repstock

      Ted..Man’s inhumanity to man knows no religion or doctrine. I think it is an inherant facet of all Power Based structures. And I think in this case it is fueled by monetary aid from external sources. Whether it be the West Bank, Gaza, Isreal itself, or Washington DC; if there was no financial benifit, fe would want the power.

    2. Ted K

      Mr. Repstock,
      I support Israel as the Jews homeland. And let me stress (I am a non-Jew for the record) I support Israel being the ETERNAL homeland of the Jews. That being said…. What the Israelis (notice I said Israelis, not the more blanket word Jews) did in Gaza in 2008 was very near to genocide on the people, including MANY women and children of Gaza. And this is a position (although I can’t speak for the two gentleman on every detail) that is supported by AT LEAST two (and I could find more if the spirit moved me) highly esteemed Jews of the Academic world: Norman Finkelstein and Richard Goldstone. I think both men are very proud, humanistic, and truth-telling Jews. And their reward for being truth-telling Jews, has been to be blackballed, dragged into the mud, and labeled “self-hating Jews” or “anti-Semites”. When in fact they looked at the situation intellectually as humans, and measured the situation factually as humans, instead of emotionally as Jews. Anyone who doubts that can read the report which the Israeli Government and extreme Zionists have tried to hide–THE GOLDSTONE REPORT. Something Binyamin Netanyahu would rather no Americans realize exists.

  7. Doug Terpstra

    Krugman’s “Eating the Irish” adds satirical realism to the bloody truth of rigged market cannibalism. The banksters seem to enjoy eating their own seed corn as they hollow out societies and economic potential for short term profit. Gore Vidal captured the mindset of this neo-feudalist plutocrat succinctly: “It is not enough to succeed. Others must fail.”

    Worse, like banana-republican plutocrats travelling with armed escorts and armored limousines, they rather enjoy it. This diseased mind exceeds the mere indifference of the sociopath or the incidental impact of unenlightened self-interest. Like Cheney, who with a twisted smile, took personal interest in shooting “fair game” and in the details of torture, banksters seem to take perverse delight in the suffering of others. It is the venal mind of the sadist, like the sickened American soldiers who collected strings of gook ears in Vietnam or today, the fingers of rag-head civilians murdered in Afghanistan.

    And what American imperialists have for decades inflicted internationally with their worldwide military garrison, they are now about to do to their own population with impunity.

    Krugman notes that Iceland stood up to the banksters’ predations and is now faring much better. For our sake I hope the land of Ire lives up to its name and does the same.

    1. babaganush

      “venal mind of the sadist, like the sickened American soldiers who collected strings of gook ears in Vietnam or today, the fingers of rag-head civilians murdered in Afghanistan”

      I wish you wouldn’t write things like that about the bankers…it only encourages those sick puppies. When they hear a description like that they probably go “yeah, that’s right motherf….., I am a killer! And I take down anything and anybody in my path”

      To my recollection, Michael Lewis thought that Liars Poker (and its description of the mind numbing work, ruthless people, coke/stripper outings, misogynistic banter and ripping clients faces off) would dissuade graduates from entering IB, but in fact it had the opposite effect – a lot people thought it was f-ing awesome.

      So, please, don’t feed the animals.

  8. Valissa

    The economic side of 4th Gen warfare… this article is a great validation of John Robb’s modern military theories… see his blog Global Guerillas and his book “Brave New War”.

    Death by a Thousand Cuts
    The slick packaging may be new, but al Qaeda’s emphasis on bleeding the U.S. economy is not. From Osama bin Laden’s earliest declaration of war against America, al Qaeda has linked its attacks to the U.S. economy. He and other salafi jihadi thinkers had long believed that economic power was the key to America’s military might; they thus saw weakening Western economies as their path to victory. …

    The economic strategy of jihad would go through refinement. Its initial phase linked terrorist attacks broadly to economic harm. A second identifiable phase, which al Qaeda pursued even as it continued to attack economic targets, is what you might call its “bleed-until-bankruptcy plan.” Bin Laden announced this plan in October 2004, in the same video in which he boasted of the economic harm inflicted by 9/11. Terrorist attacks are often designed to provoke an overreaction from the opponent and this phase seeks to embroil the United States and its allies in draining wars in the Muslim world. The mujahideen “bled Russia for 10 years, until it went bankrupt,” bin Laden said, and they would now do the same to the United States.

    On a lighter note…

    The Fake Taliban and Other Great Diplo-Scams

  9. scraping_by

    @Who bankrupted the Irish

    That’s one aspect of the Irish mess not often touched upon — the ingratitude of the world financial community.

    Here the Irish recreate their nation along neoliberal, antiregulatory lines. They roll over for anything, bend over for anyone, climb under any desk as long as it’s financial. And when the predictable end comes, what do they get?

    The bonded debt’s expanded with loan sharking. The state assets are given away for bupkis. Their tax revenues are diverted into foreign bank payments. I’ve never even heard a public “Well done, faithful servant.” Pitiful.

    I suppose the reply’s the mantra from The Godfather: “Nothing personal, it’s only business.” Great comfort, as they sleep with the fishes.

  10. Ronnie Hanzely

    Really great thought in this article.

    I think I am going to investigate this subject a lot more.

    Hope you have more articles like this on your blog in the future here, quite a decent contribution to the subject.

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