Links Veterans’ Day

NASA’s Fermi Telescope Finds Giant Structure in Our Galaxy Science Daily (hat tip reader John M)

Big Pharma to begin microchipping drugs Natural News (hat tip reader furzy mouse)

Drug Suits Raise Questions for Doctors, and Juries New York Times

Taliban surges troops while the West surges Generals Kabul Press (hat tip reader May S)

Gerhard Schroeder accuses George W Bush of ‘not telling truth’ in memoirs Telegraph (hat tip reader Swedish Lex)

Fed Easing Seen Ineffective by 75% in Global Poll Favoring ECB Bloomberg

Ben Bernanke: The Chauncey Gardiner of Central Banking Credit Writedowns

The least ‘advanced’ mortgage servicers FT Alphaville. I’m a fan of FTAlphaville, but where is it on this? We’ve written about this issue repeatedly here. The reason servicers don’t stop advancing is servicer credit ratings (which are quite separate from and have no impact on overall bond ratings) and software (many servicers have their software set up to keep advancing until principal and interest and fees equals 100% of the mortgage balance.

Ties to Insurers Could Land Mortgage Servicers in More Trouble American Banker

Negotiations With Banks Begin for Troubled Assets DealBook. This story is weird. It talks breathlessly of a Great Liquidation and then says hardly any deals are happening. Huh?

QE2 and the Titanic Michael Pettis. Confirms a point we’ve made, that China’s investment binge is increasingly unproductive (in terms of GDP growth) and it appears the officialdom is coming around to that point of view.

We must rethink Basel, or growth will suffer Vikram Pandit, Financial Times. Highly shreddable, but I have competing priorities.

China inflation surges to 25-month high Financial Times. The Pettis piece points to unduly low interest rates in China as a major driver of its investments. So raising interest rates is a more fraught process than it might otherwise be.

The Family Jewels: A Veteran’s Story Greg Palast

Antidote du jour:

Picture 19

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  1. purple

    The thing is, one sees China coming to grips with their economic issues far sooner and more rationally than the U.S does – or did – in the last decade.

    1. MyLessThanPrimeBeef

      Good point about software designs, such as MIDI, locking us in, though that’s what generally happens with choice making in life – have you tried to undo your choice of marriage partner? Life is already tough enough; why burden yourself even more with ‘locking-in’ software design choices?

      Shouldn’t we struggle against Facebook, asked Zadie Smith elsewhere in the article? Well, you can’t do that without struggling against technology in general. It’s simply our ego when we think we can pick and choose a particular manifestation of technology to be for or against. Technology, as it exists today, is too powerful for we humans to manage, control, pace or direct. Ms. Smith’s attempt to struggle against Facebook echoes previous attmepted struggles against the internal combustion engine or commercial television. Like those, it’s likely to fail because the focus is too narrow. You may think you’re riding the tiger, but it truth, the tiger is riding you and you can’t get off without having to kill it. It’s either you are against technology or not at all.

      Speaking further on locking in, be attentive to the software into which we are ‘locked in,’ she quoted Lanier. Well, we should be attentive to whether we get locked in with technology. It’s a broader concern. For example, technology brought us billions of people and when asking about doing away with technology, in response, you hear about the concern of how to feed those billions of people without technology – now, that’s locking yourselves in. And it’s because of being locked in, we are likely to continue to ride the tiger.

  2. JackW

    Purple, I am not sure how you came to that conclusion. Beijing hasn’t reformed the banking or interest rate structure and real interest rates have actually declined. It hasn’t addressed the currency in a serious way. For all the attempts to stop it, there has been no dent the growth in real estate development because local governments and local employment are too addicted to it. As worried as they are about the long-term cost of investment, they are so dependent on it in the short term that they have actually caused it to surge. Consumption continues to decline as a share of GDP even though raising it was supposedly their top priority. In fact not only have they not addressed the problems, but there is a pretty widespread consensus in China that in the past two years they have actually gone backwards. Where do you see them coming to grips with the problem?

    1. Skippy

      Rank multiplier + some nice bolo badges to make the girls giggle back home…oh M&A best business practices 80s Japanese boardroom endless CYA meetings disguised as strategy sessions.

      Skippy..the final evolution of McNamara’s philosophy.

    2. hermanas

      Our military havn’t realized their Pogo problem, they should attack Wall street to protect America but Bin Laden beat’em to it.

  3. eric anderson

    Let’s see… Schroeder vs. Bush. Who’s telling the truth?

    Occam’s razor solution: They are both politicians. Their lips are moving. Most likely they’re both lying.

    1. Swedish Lex

      I did not attend the meeting and can therefore say who is lying. However, given Germany’s background, its constitutional and political restrictions as regards invading other countries, it seems doubtful that Schröder would sit in the oval office and give a thumbs up to take Germany to war.

      Bush’s marketing campaign also ran into difficulties with the French, whre Chirac felt compelled to call upon theologians to better understand the American President’s sales pitch:

      1. eric anderson

        “However, given Germany’s background, its constitutional and political restrictions as regards invading other countries, it seems doubtful that Schröder would sit in the oval office and give a thumbs up to take Germany to war. ”

        Even though I agree with this, that doesn’t mean both Schoeder and the President aren’t leaving essential details out of what they choose to remember. Funny how that works.

        I honestly don’t know what motivated Bush. But I think I agree with Tom Friedman’s NYTimes column in June 2003. The real reason for the war was never spoken aloud.

        “The ‘real reason’ for this war, which was never stated, was that after 9/11 America needed to hit someone in the Arab-Muslim world. Afghanistan wasn’t enough because a terrorism bubble had built up over there — a bubble that posed a real threat to the open societies of the West and needed to be punctured. This terrorism bubble said that plowing airplanes into the World Trade Center was O.K., having Muslim preachers say it was O.K. was O.K., having state-run newspapers call people who did such things ‘martyrs’ was O.K. and allowing Muslim charities to raise money for such ‘martyrs’ was O.K. Not only was all this seen as O.K., there was a feeling among radical Muslims that suicide bombing would level the balance of power between the Arab world and the West, because we had gone soft and their activists were ready to die.

        “The only way to puncture that bubble was for American soldiers, men and women, to go into the heart of the Arab-Muslim world, house to house, and make clear that we are ready to kill, and to die, to prevent our open society from being undermined by this terrorism bubble. Smashing Saudi Arabia or Syria would have been fine. But we hit Saddam for one simple reason: because we could, and because he deserved it and because he was right in the heart of that world.”

        I’m sure you do not agree with this. I’m not sure I do anymore. I agree with the plan/premise, but the execution hasn’t been very smart. And nothing Schroeder says changes any of that. Bush was right for the wrong reason, and Ronald Dumsfeld mismanaged it.

        1. DownSouth

          eric anderson said: “I honestly don’t know what motivated Bush.”

          Well here are a couple of clues:

          1) Bush was an oil man.

          2) His VP was an oil man.

          The international oil companies (IOCs) are slowly dying on the vine, starved of reserves, and those that survive do so only by devouring other IOCs.

          And if that’s not enough to get those cognitive gears spinning, then there’s this from Edward W. Said’s book Orientalism:

          Even with all its terrible failing and its appalling dictator (who was partly created by U.S. policy two decades ago), were Iraq to have been the world’s largest exporter of bananas or oranges, surely there would have been no war, no hysteria over mysteriously vanished weapons of mass destruction, no transporting of an enormous army, navy, and air force 7000 miles away to destroy a country scarcely know even to the educated American, all in the name of “freedom.”

          1. Susa

            I’d say oil was just one factor. The other factors can be harder to grasp because some can seem petty, politically incorrect or (in hindsight) obviously stupid. But even leaders are humans, and once groupthink sets in they can convince themselves that doing stupid things is the right thing to do.

            One petty motive is rage at Saddam continuing to stand up to US might. Bush Jr could have been particularly susceptible to talks of finishing what his dad refused to do. Foreign policy can be very vindictive against leaders that anger America. The classic example is Cuba suffering from a 50 year old embargo!

            Then of course there’s also the helping Israel argument. It’s not something neocons like to openly talk about because that fuels resentment in the Arab world. But remember, during the first gulf war Saddam launched many rockets against Israel. Before that war he even supported Palestinian terrorists (or freedom fighters, if you will). An American-friendly Iraq would also put Syria under pressure. So Israel certainly saw benefits in getting rid of him.

            It’s also quite possible the neocons really did believe that bringing democracy pablum. At first glance it seems like a regime change backed by friendly factions and overwhelming military force would be a no-brainer. But that’s only true if you ignore the dismal record seen in, say, Lebanon in the 1980s. Syria went in and backed muslim factions in the civil war. Overwhelming force failed to bring peace. Next Israel invades and tries the same gambit with christians at the helm. Yet again a morass and no peace. Just because a major faction supports you doesn’t necessarily mean the losing faction will quietly accept defeat.

            There are other possible motives too, but the above should serve as examples of what the Bush administration could have viewed as entirely legitimate reasons.

          2. DownSouth


            Tell me it ain’t so!

            You’re beginning to sound like Hannah Arendt:

            The crucial point here is not merely that the policy of lying was hardly ever aimed at the enemy, but was destined chiefly, if not exclusively, for domestic consumption, for propaganda at home…

            Of even greater interest is that nearly all decisions in this disastrous enterprise were made in full cognizance of the fact that they probably could not be carried out: hence goals had constantly to be shifted. There are, first, the publicly proclaimed objectives—-“seeing that the people of South Vietnam are permitted to determine their future” or “assisting the country to win their contest against the…Communist conspiracy” or the containment of China and the avoidance of the domino effect or the protection of America’s reputation “as a counter-subversive guarantor.” To these Dean Rusk has recently added the aim of preventing World War III…

            From 1965 on, the notion of a clear-cut victory receded into the background and the objective became “to convince the enemy that he could not win.” Since the enemy remained unconvinced, the next goal appeared: “to avoid a humiliating defeat”—-as though the hallmark of a defeat in war were mere humiliation. What the Pentagon papers report is the haunting fear of the impact of defeat, not on the welfare of the nation, but “on the reputation of the United States and its President.”


            The ultimate aim was neither power nor profit. Nor was it even influence in the world in order to serve particular, tangible interest for the sake of which prestige, an image of the “greatest power in the world,” was needed and purposefully used. The goal now was the image itself, as is manifest in the very language of the problem-solvers, with their “scenarios” and “audiences,” borrowed from the theater. For this ultimate aim, all policies became short-term interchangeable means, until finally, when all signs pointed to defeat in the war of attrition, the goal was no longer one of avoiding humiliating defeat but of finding ways and means to avoid admitting it and “save face.”

            Image-making as global policy—-not world conquest, but victory in the battle “to win the people’s minds”—-is indeed something new in the huge arsenal of human follies recorded in history. This was not undertaken by a third-rate nation always apt to boast in order to compensate for the real thing, or by one of the old colonial powers that lost their position as a result of World War II and might have been tempted, as De Gaulle was, to bluff their way back to pre-eminence, but by “the dominant power” at the war’s end. It may be natural for elected officeholders—-who owe so much, or believe they owe so much to their campaign managers—-to think that mainupulation is the ruler of the people’s minds and hence the true ruler of the world.
            –Hannah Arendt, Crises of the Republic

    2. KFritz

      In terms of personal integrity, Schroeder is somewhere between Bush and Berlusconi. He negotiated EC petro-energy terms w/ Mother Russia, then went to work in the Russia to Europe energy biz. But his aides, who the best of my knowledge have no such taint, concur. Very likely Bush/Cheney lied.

  4. jf

    I also thought Dealbook story highly suspect. If banks sell those businesses, they have to mark them to the true market. Are they really going to compress book value on a ton of assets?

  5. Dirk

    Re: Vikram Pandit op ed. Ditto the comment in this blog about Rubin and his op ed. When I hear the word growth now I reach for my gun.

    1. DownSouth

      One has to wonder why these guys like Pandit still have a place at the policy table.

      On a similar note, one of Mexico’s major drug cartels, La Familia, sent a letter to the Mexican government earlier this week seeking to “make a deal” with the authorities.

      But hey, if the banking criminals can have a place at the table, why not the drug criminals too?

      Here’s a passage from the letter, and notice how the rhetorical strategy employed by the spokesperson for La Familia differs little from that used by Pandit:

      Unfortunately the federal government continues to demonstrate its incompetence and has realized a bona fide slaughter against the society of Michoacán, using as an excuse putting an end to our organization…

      To sum up, the society recognizes that we do not kill innocents and our commitment to them is and will continue to be their wellbeing.

      Truly Orwellian: Demonize the government while concomitantly claiming that everything La Familia does is with the general welfare of the people in mind. Sounds just like Pandit and the international criminal banking cartel.

  6. tjmc

    The Family Jewels: A Veteran’s Story Greg Palast

    That’s the link that you publish for veteran’s day?

    Well now I bet that there are hundreds of thousands of veterans honored by your thoughts.

  7. Valissa

    American ingenuity at work. LOL… Carnival passengers prepare to disembark in San Diego

    Among the crowd of onlookers waiting at the port are two sisters who flew in last night from Kansas City to sell T-shirts they printed for the occasion.

    “I Survived the 2010 Carnival Cruise Spamcation” the blue shirts read.

    Lissa Letts said she doesn’t know anyone on board. She said she and her sister were stranded in Europe by the volcano earlier this year and had T shirts printed for themselves marking the event. “Everybody wanted to buy them, so we thought these folks would like some shirts too,” Letts said. She was selling them for $20 each.

    Inflation news for the “little people”… ’cause all the really smart econ types say there is NO inflation (as THEY define it) and that what people actually observe in their own rising grocery bills and other daily-weekly-monthly bills has no relevance to the “brilliant ones.”

    Why your toilet paper is shrinking

      1. Glen

        Real or not – the clear message to the WH should be

        You were voted in to roll back forty years of Republican stupid – not give us more!

        Protect SS – raise the cap

        Tax the rich

        Tax the banks

        Tax the corporations

        Stop the wars

        Invest in America.

        Invest in infrastructure.

        Obama is a terrible disappointment. The man has continued the bank bailout, continued the wars, continued the low taxes for the rich (trickle down), attacked SS, and given us a health care bill which rewards the same companies that wrecked American health care, and given us a toothless financial reform bill. Poverty is up, suffering is up, bailouts of the wealth that wrecked the country is up. The man is Bush III.

        1. chris

          I agree 100 percent with you Glen. You don’t have to convert me, but if the story is BS by Huffpo or anyone else, they should be called out on it. I visted Daily Kos and man, they’re raking Huffpo over the coals. It could be jealously or it could be that maybe HP plays fast and loose with the facts.

  8. Doug Terpstra

    Yves, thanks for the link to Greg Palast’s “Family Jewels”. It is a poignant reminder about true spiritual treasures and an important perspective on the horror of war — rarely an unavoidable evil but always hell on Earth. It honors the spirit and sacrifice of his father and other veterans on a day too often spent glorifying war and celebrating blind patriotism.

    1. tjmc

      Must respectfully disagree that Greg Palast’s article is appropriate for Veterans day. Thirty five years after the Vietnam war we once again read that military service in WW II was a noble act while military service in Vietnam participation in oppression. Without exploring everything involved there, one can simply way that that is an insult to many, many good people.

  9. KFritz

    Re: chip-transmitters in drugs. WHICH IMPORTANT NEED OF MEDICAL SCIENCE AND HEALING DOES THIS “INNOVATION” MEET? Are practicing physicians and medical researches (with no tie to Big Pharma or any other medical industry) calling for this ‘feedback’ mechanism? This looks like ‘churning’ of medical procedures to make $ for Big Pharma and its confreres.

    1. paper mac

      Ding ding ding!! Give this man a prize! Seriously though, from a pharmacological point of view it doesn’t make much sense to have your sensor in the GI tract, since in most cases what you care about is the drug concentration at the receptor or in circulation in the blood. I can think of a handful of drugs that it might be useful to monitor GI tract conditions for, but not many. If you have a patient that you need to monitor that closely, I can’t see a microchip in a pill being a better way to go than periodically sampling serum from a catheter.

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