Links 12/6/10

Australia Floods Damage Crops, Disrupt Coal Output Bloomberg. When I was in Sydney, one week had the most astonishing rain I can recall. It was extremely heavy the entire time, interrupted by 4-5 absolutely torrential downpours per day. I recall it being reported on TV as 230 centimeters for the week, which I must have heard incorrectly but trust me, it was pretty impressive regardless.

Japan’s Robot Picks Only the Ripest Strawberries Singularity Hub

Saudi Arabia is ‘biggest funder of terrorists’ Independent (hat tip reader May S)

The Impact of Public Guarantees on Bank Risk Taking: Evidence from a Natural Experiment Alea

Hungarian Forint Slips on Moody’s Downgrade WSJ MarketBeat

Rescue-package debt seniority and the vicious cycle of rescues and emergencies Daniel Gros, VoxEU

A hopeless Europe, unable to cope Wolfgang Munchau, Financial Times

European Officials Split Over Fund Increase, New Eurobond Bloomberg

Juncker and Tremonti: “E-bonds would end the crisis” Eurointelligence

Global Imbalances and the War of Attrition Chevelle. This is a cogent analysis, but I doubt this is what is driving the Fed’s policy (or it is at most a secondary consideration).

Let’s Not Make a Deal Paul Krugman, New York Times

Dem: We could have let economy fall and been in majority for 40 years The Hill. So the bailouts and having the banksters loot on a massive scale is better? This sort of discussion reinforces the ongoingfalse dichotomy, the choices weren’t TARP v. do nothing, there were other possible courses of action.

Pay Freeze Could Cripple Dodd-Frank Dave Dayen, FireDogLake. Is this a bug or a feature?

Foreclosure paperwork miscues piling up Denver Post (hat tip Max Gardner). Another case of someone being foreclosed upon who is current, in this case, they paid off their mortgage!

Paxman Meets Hitchens Paul Kedrosky. Even when Hitchens is off base, he’s sufficiently articulate about it to force opponents to sharpen their rebuttals.

Amex chief calls for jobs taskforce Financial Times. This is interesting. Is it mere window-dressing, or a sign that some senior businessmen are wiling to break ranks with plutocrat-favoring policies? Recall that Simon Johnson, in his Atlantic article The Quiet Coup, stressed that the only way third world countries implemented reform programs was when some of the oligarchs decided to break ranks.

Global Health and Wealth over Two Centuries Rajiv Sethi

The NYT loves Jamie Dimon Felix Salmon. I promised a shred of this piece, but I could barely stomach reading it. I would have been snarkier than Felix, but he points out many of the problems with this example of hagiography masquerading as reporting.

Antidote du jour (credit

Screen shot 2010-12-06 at 4.43.06 AM

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  1. Dennis

    The Impact of Public Guarantees on Bank Risk Taking: Evidence from a Natural Experiment

    From the link — I’m confused, are German banks not on the hook for Greek and Irish debts? And did not several German savings banks had to be nationalized because of investment in ABS?

  2. rjs

    “I recall it being reported on TV as 230 centimeters for the week, which I must have heard incorrectly”

    i have a gardening friend in Oz who reports her rainfall in millimeters…so you likely heard the number right, as that would be about 9 inches, not uncommon in a tropical storm…

  3. rjs

    “I recall it being reported on TV as 230 centimeters for the week, which I must have heard incorrectly”

    they report in millimeters, so 9 inches is probably right…

  4. burnside

    “This is interesting. Is it mere window-dressing, or a sign that some senior businessmen are wiling to break ranks with plutocrat-favoring policies? ”

    Could be. Jay Rockefeller came out this weekend against extending Bush-era tax breaks for the top 1 – 2%. Wants to preserve current policy for those making $250K or less.

  5. wunsacon

    >> Amex chief calls for jobs taskforce Financial Times. This is interesting. Is it mere window-dressing, or a sign that some senior businessmen are wiling to break ranks with plutocrat-favoring policies?

    Perhaps he realizes that his co’s cash flows depend on many people spending money — not just the rich hoarding it.

    1. Doug Terpstra

      I was struck by NYT’s “positively glowing cover photo” of Dimon, as Salmon calls it. The black and white with theatrical lighting looks rather sinister to me, more appropriate for the head of something called JP Morgue.

  6. Cynthia

    RE: Japan’s strawberry harvesting robot…

    I imagine it’s much more difficult to design a machine that can pick delicate fruits (such as strawberries and tomatoes) or care for newborn infants and severely handicapped adults than it is to design a machine that can make decisions and solve problems at top levels of business or accurately diagnose illnesses and devise the best available treatment plans. So if anything, the corporate world has got it all backwards in assuming that it’s easy to replace lower-skilled workers with machines, leaving most of the highly skilled work in the hands of humans.

    Look at this way: being a top-notch exec is very much akin to being a grandmaster chess player. Or, being a great medical diagnostician is simply someone who’s really good at algorithmic thinking. Needless to say, these are the very things that a computer is very good at doing. OTOH, it requires a highly advanced robot with a great deal of touchy-feely skills to pick delicate fruits or care for our neediest and most helpless members of society. In fact, most of our IT companies have designed machines with decision making/problem solving skills that rival that of our most highly-prized corporate execs or our most gifted medical diagnosticians. By contrast, it’s still very challenging for the most advanced robotics labs in the world to design a robot that can do the touchy-feely work that’s required of our most highly-prized migrant workers or our most gifted nursing care aides.

    So for this reason and this reason alone I propose that we replace all of our multi-million-dollar salary execs and our overpaid medical diagnosticians with robots that’ll work for free (24-7), thus enabling us to free up funds for our so-called lower-skilled workers, providing them with a decent standard of living! It’s time that we get back to rewarding skills that humans will always be far better at doing, despite all of the advancements we make towards making robots more and more like ourselves.

    1. MyLessThanPrimeBeef

      Just make sure you don’t get those cheap import robots that might suddenly catch fire, unless you want strawberries flambe.

    2. emca

      The strawberry picking automaton reminds of a site I came across yesterday. In it reams of noodles, pasta, snack goods and pre-made delicacies where processed and packaged in the promotion video, all by machines. Not a human in sight, the absence of which and its appeal says something in itself.

      To your suggestion, pity we can’t apply robotics to something other than manual tasks, but strawberry picking is an onerous, back-breaking labor. How much more indubitably logical to have them assigned to work involving multiple and complex financial transactions. No need for fat bonuses, homes in Hampstead, Westchester or other useless vanities. No hours of self-important gibber on cell phones. All done without prejudice or conceit, the appropriate attire of a true comprehensive and disinterested partner.

      Of course you’d still need human support, development and refinement of the technology in the current world, but one machine could probably replace 10,000 financial ‘wizards’ in our current bloated human regimen. As you suggest,the cost savings based on minimal errors and duplication would be astronomical!

      The only remaining obstacle is given the resources, which is of more social worth, picking tomatoes etc. or creating trickle-down financial bubbles.

      I leave this question for others to ponder.

      1. Skippy

        @all above…ha!

        Look into super conductor magnetic field industrial cooking equipment…

        and the French industrial consumer food show…most of the processed meals at many 4-5 star hotels and some restaurants is so manipulated, its hard to call it food anymore.

        Skippy…robotic food um um good…I think if crazzyman visited one of these facility’s his head would melt like raw sugar in browned butter…lol.

        PS. Granny was right…eating out is a dangerous game indeed…

  7. duffolonious

    “Foreclosure paperwork miscues piling up”, look at the comments below. There are still a lot of people blaming the victim (or lawyers – they’re so greedy). Sadly it looks like a lot of people simply can’t read (and just keep their previous conclusions).

    Yves, Richard, whoever: can you guys get together a list of links and a fairly cohesive rundown of lack of note, robo-signers, fraud, foreclosures being bad for everyone but services (a biggy in my book for the cold, calculating MF’s among us), etc.

  8. EmilianoZ

    Chris Hedges’ column today is a must read. I fear every word he says is true.

    “The beating down of workers, exacerbated by the prospect that unemployment benefits will not be renewed for millions of Americans and that public sector unions will soon be broken, has transformed those in the working class from full members of society, able to participate in its debates, the economy and governance, into terrified people in fragmented pools preoccupied with the struggle of private existence. Those who are economically broken usually cease to be concerned with civic virtues. They will, history has demonstrated, serve any system, no matter how evil, and do anything for a salary, job security and the protection of their families.”

    ““Each time society, through unemployment, frustrates the small man in his normal functioning and normal self-respect,” Hannah Arendt wrote in her 1945 essay “Organized Guilt and Universal Responsibility,” “it trains him for that last stage in which he will willingly undertake any function, even that of hangman.”Organs of state repression do not rely so much on fanatics and sadists as ordinary citizens who are desperate, who need a job, who are willing to obey. Arendt relates a story of a Jew who is released from Buchenwald. The freed Jew encountered, among the SS men who gave him certificates of release, a former schoolmate, whom he did not address but stared at. The SS guard spontaneously explained to his former friend: “You must understand, I have five years of unemployment behind me. They can do anything they want with me.””

    “Arendt also quotes an interview with a camp official at Majdanek. The camp official concedes that he has assisted in the gassing and burying of people alive. But when he is asked, “Do you know the Russians will hang you?” he bursts into tears. “Why should they? What have I done?” he says.I can imagine, should the rule of law ever one day be applied to the insurance companies responsible for the deaths of tens of thousands of Americans denied medical care, that there will be the same confused response from insurance executives. What is frightening in collapsing societies is not only the killers, sadists, murderers and psychopaths who rise up out of the moral swamp to take power, but the huge numbers of ordinary people who become complicit in state crimes.”

    “The expansions of public and private organs of state security, from Homeland Security to the mercenary forces we are building in Iraq and Afghanistan, to the burgeoning internal intelligence organizations, exist because these “ordinary” citizens, many of whom are caring fathers and mothers, husbands and wives, sons and daughters, have confused conformity to the state with innocence. Family values are used, especially by the Christian right, as the exclusive definition of public morality. Politicians, including President Obama, who betray the working class, wage doomed imperial wars, abandon families to home foreclosures and bank repossessions, and refuse to restore habeas corpus, are morally “good” because they are loyal husbands and fathers. Infidelity, instead of corporate murder, becomes in this absurd moral reasoning the highest and most unforgivable offense.”

    1. Doug Terpstra

      Chris Hedges is the reincarnation of the prophet Jeremiah, with frightening insight into the human soul. His 2006 book “American Fascists: The Christian Right and the War on America” is proving remarkably prescient.

      Shunned by the MSM for heresy, he writes inspired truth, which we ignore at our peril. A reckoning is due and if Hedges is right, a wrathful judgment awaits us, akin to the Third Reich or the Babylonian captivity that the irksome Jeremiah warned of.

  9. Doug Terpstra

    RE: Krugman, on plutocrats’ tax cuts, still gives Obama cover as well-meaning but weak, just a nice guy who wants to get a long and not really in collusion with the dark side—now obvious to anyone whose salary is not dependent on such selective perception.

    Familiar, tiresome lines:

    “…if [GOP] tax-cut blackmail works now, why shouldn’t it work again later?” —Well, duh! After working on 27 issues running, ya think?

    “…the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare.” —Yes, but why not point out that these are NOT budget items, that they are funded separately, and that Wall Street wants to loot FICA taxes for its salvation and more wars?

    “Last but not least: if Democrats give in to the blackmailers now, they’ll just face more demands in the future … If the president will endanger America’s fiscal future … what will he give to avoid a government shutdown?” —Gee, Paul, didn’t you notice that’s an exact rerun of the very same script played with Slick Willie in ’94 that gave him cover to shred the safety net, enact rigged trade, concentrate Murdoch’s empire, and deregulate the banksters. Brilliant strategery! The audience will never notice, if the pundits don’t let on.

    Seriously, Charlie Brown, are you really going to try for that field goal again? Krugman clings to the premise that Obamanation, Inc. is not in league with the GOP—that he really does not serve the same master known as Mammon. He’s lost credibility.

  10. skippy

    Wet weather on the eastern Australian coast. The major reservoir (wivenhoe) in Brisbane was down to 13% less than a year ago, it is now, after a few months full and the spill gates are open.

    This is a great site, check lower interactive graph…phew…we were on level 5 water restrictions.


    PS. looking forward to the BIG green tree frogs climbing out of the toilet, on top of cistern late at night. Just to say hi to midnight bathroom visitors…it is a reality check…lol.

  11. L. Sirr

    “E-Bonds Would End the Crisis” in the FT, is pretty much taken from the brillant Yanis Varoufakis. Somebody this blog should take a look at. See his “Modest Proposal” in MRZINE, and his blog


  12. Sundog

    Speaking of Wikileaks, I looked up an old quote that seems apropos…

    The aide told Mr. Suskind, “That’s not the way the world really works anymore. We’re an empire now, and when we act we create our own reality.”

  13. Jack Parsons

    Jared Diamond in “Guns Germs and Cocaine I mean steel” said that Oz has a 10-15 year cycle in drought v.s. flooding.

  14. Sundog

    FBI & FAA pros on Wikileaks, October 2010.

    If WikiLeaks had been around in 2001, could the events of 9/11 have been prevented? The idea is worth considering.
    Lately, the two of us have been wondering how things might have been different if there had been a quick, confidential way to get information out.
    Looking back, Dzakovic believes that if WikiLeaks had existed at the time, he would have gone to it as a last resort to highlight what he knew were serious vulnerabilities that were being ignored.
    Decisions to speak out inside or outside one’s chain of command — let alone to be seen as a whistle-blower or leaker of information — is fraught with ethical and legal questions and can never be undertaken lightly. But there are times when it must be considered.

    From the comments thread, co-author Coleen Rowley:

    A number of people commenting obviously suffer from the delusion that they are better off abdicating their citizen responsiblities to a government leader who will protect them. It’s common and comforting to believe that what we don’t know won’t hurt us. In fact only a small percent of classified government documents actually merit being kept secret. And then only for a certain time, not kept secret in perpetuity. After all was said and done, the prosecutor team could not find anything in the “Pentagon Papers” that qualified as something that should be protected as a secret. But the 7000 pages had just all been stamped “Top Secret” out of laziness.

    It’s the same with the thousands of “Afghan War Diary” documents made public by WikiLeaks. The Pentagon has finally admitted that they cannot identify any soldier or Afghan who has been harmed as a result of those documents being made public.

    It may be counter-intuitive to many people but secrecy does not, as a rule, protect you. It’s quite the opposite! You would be better off to stop putting your head in the sand and inform yourselves to the extent you are able. [my emphasis]

    Coleen Rowley and Bogdan Dzakovic, “WikiLeaks and 9/11: What if?”,0,5616717.story

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