Links 9/13/11

Your humble blogger is very tired and is taking advantage of a spate of good material from other writers to take a badly needed mini-break.

US sales of Botox continue to increase Financial Times

Facebook Edges Out Toilets On Survey of “Things You Can’t Live Without” GizModo

In Study, Fatherhood Leads to Drop in Testosterone New York Times

DuPont’s Herbicide Goes Rogue TruthOut (hat tip reader Aquifer)

Contraceptive pill ‘interferes with women’s memory’ Daily Mail (hat tip reader May S)

Vickers should mark the dismantling of the credit bubble infrastructure. Eventually Channel 4 (hat tip Richard Smith)

Failure to tackle lessons from 2008 Financial Times (hat tip Richard Smith)

Wary Investors Start to Shun European Banks New York Times. “Start to shun”? Where has the Times been?

I.M.F. Chief’s Change of Tune on Bank Capital Andrew Ross Sorkin, New York Times

Lehman Brothers: three years of denial Dean Baker, Guardian (hat tip readers Jorgen and John M)

Italy turns to China for help in debt crisis Financial Times

Greece default risk now 98% Ed Harrison


Concealed Handguns in New York City Backed by 243 Members of U.S. Congress Bloomberg (hat tip Buzz Potamkin). Aieee.

The frontrunner has no clothes Dana Milbank, Washington Post

‘People Are Close to Revolt’: Views From Afar James Fallows, Atlantic

Massive default is best way to fix the economy MarketWatch. Encouraging to see this sort of piece on an investment site.

Big Bank Chart Barry Ritholtz (hat tip reader John M)

The Infrastructure Privatization Bank Reuters. This really sucks.

Bank of America to cut 30,000 jobs over 3 years. But let’s talk about stock prices Daily Kos

Barney Frank Working On Legislation To Overhaul The Federal Reserve Huffington Post (hat tip reader Paul T)

On the risks of synthetic structures Deus Ex Macchiato (hat tip Richard Smith)

Why was the S&L Crisis not a Systemic Economic Crisis? Bill Black, Global Economic Intersection

Antidote du jour:

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  1. M.InTheCity

    Re: Infrastructure Bank – Oy. I’ve had to live with the nasty effects of PPP (public-private partnerships) here in the UK. Uh, worked great. We’ve had to renationalise almost every single thing that was PPP. My favourite was Metronet, who were supposed to be fixing parts of the London tube network. They got a couple of YEARS behind schedule. The final straw was when they asked for something like two or three times the amount of money to fix the rest of their part of the tube network than what Transport for London thought it should cost. The public sector actually could do it cheaper. So they nationalised them.

    However, I have a good mate who should end up thrilled considering he works at an infrastructure fund. This will be a nice little scam for the finance boys and the selected few like Buffett.

  2. Denis

    You’ve mentioned you were tired in a few recent posts, which makes it sound like you’re beginning to burn out… Having been there myself, may I suggest that you take more than a mini-break?

    Oh, and if applicable, setting up a forum helps reduce the daily onslaught of emails. As does snail mail.

  3. M.InTheCity

    Re: The Frontrunner Has No Clothes. The part of the article that really caught my eye was Dana’s discussion of how people were racing to outdue each other in low-brow conservatism:

    “But mostly, the night was about Perry and the other candidates trying to outdo each other in conservatism. This created some eyebrow-raising results…There was Ron Paul’s explanation of the Sept. 11 attacks as a response to America “killing hundreds of thousands of Iraqis for 10 years.” ”

    I’m no Ron Paul fan, but I’m trying to figure out how his statement was some sort of an “eyebrow-raising” statement. We really DID kill lots of Iraqis pre-2003. How is that even controversial? Glenn Greenwald has noted how much the mainstream media hate Dr. Paul. It’s amazing to see it in action in such a hack piece…

    1. Externality

      Not only did the US bomb Iraq almost continuously during the 1990s, it also enforced a sanctions regime that, according to the UN Food and Agricultural Organization, killed 576,000 Iraqi children through hunger and disease.

      The Clinton administration considered the deaths “worth it.” From Wikipedia:

      On May 12, 1996, [Clinton Secretary of State Madeline] Albright defended UN sanctions against Iraq on a 60 Minutes segment in which Lesley Stahl asked her “We have heard that half a million children have died. I mean, that’s more children than died in Hiroshima. And, you know, is the price worth it?” and Albright replied “we think the price is worth it.”

      YouTube video of Albright’s comments on “60 minutes:”

      In 2005, then-New Mexico governor Bill Richardson, who served as Clinton’s Ambassador to the United Nations and Energy Secretary, told PBS’s “Democracy Now” that Albright was “correct,” that over half a million deaths were worth it. (start at 0:29 into the clip for context)

      1. Externality

        By way of clarification, Albright was the US ambassador to the United Nations when she gave the interview. She became President Clinton’s Secretary of State seven months later, on January 23, 1997.

        1. Externality

          By way of clarification, Albright was the US ambassador to the United Nations when she gave the interview. She became President Clinton’s Secretary of State eight months later, on January 23, 1997.

    2. Tom g

      I think the bigger question should be why you are not a ron paul fan. Oh that’s right the government would shut down tomorrow if he was president. He’s also hugely anti-american now according to people with an IQ of less than 50.

      Everyone just hold your nose and vote for this guy so we can hit the reset button.

  4. David

    Great antidote, those two bears remind me of an old British cartoon of Hitler meeting Stalin because it looks like they are negotiating on how to divide up the land. Do ya think they are rational actors ?

    1. Susan the other

      The little bear looks like he’s doing stand up comedy and the big bear looks like a banker. A good antidote on a day that combined Dean Baker on Greenslime and the big coverup; Bill Black on the reality of the situation; and Barney Frank’s emergency solution.

  5. Bruce Post

    Re:”Bank of America to cut 30,000 jobs over 3 years. But let’s talk about stock prices.” Of course, those doing the reporting all have jobs.

    Re: “Massive default is best way to fix the economy.” Having written federal education law and worked for Sen. Bob Stafford (think Stafford loans — student loans), I believe it is well past time that responsible people tackled not just student debt as an issue but parent debt for student loans. Usually, when colleges package what they call their “aid awards”, they euphemistically call loans an award. They will generally list the loans the student should take out, but then they list what is called “unmet need.” That is the gap between what they will charge the student, what the total aid package is and the difference that has to be made up. Quite often, that hole is filled by what has been called PLUS loans or Parent Loans for Undergraduate Students. Those, legally, are parental obligations, and many parents are saddled with higher education loan debt that is greater than what their childen owe, particularly if they have borrowed for multiple kids. To me, having been both a borrower and a student loan agency employee, PLUS loans and parent borrowing should be candidates for that massive default package mentioned in the article (but I won’t hold my breath). ;-)

    1. MyLessThanPrimeBeef

      Lots of people and companies have defaulted.

      Many more will default.

      What is he talking about?

  6. Jim A

    Botox = Botulism Toxin. Now which part of that sounds like a good idea? Intentionally putting that into your body for minor cosmetic reasons sound on the face of it like absurdly stupid vanity.

    1. aet

      Any chemical substance can act as a poison to the body, even pure water – the effect depends upon the size of the dose.

        1. Skippy

          Dialog from the movie “Vote For Bob Roberts” Scene set: assistant opening xmas cards address to Bob.

          Dear Cindy don’t do crack, its a ghetto drug.

          Scene set: assistants nose starts to bleed, too much santa snow has popped a capillary…obligatory HO HO HO!

          Skippy…wealthy kids, moms and pops have better socially affluent drugs or a good script see 50s, 60, 70s suburban stupor.

      1. Yves Smith Post author

        I’m sympathetic with the viewpoint that running experiments on the population with a toxin for mere cosmetic reasons ins’t a hot idea. The problem with our drug regime in general is that the safety part of clinical trials usually extends only to 2 to 4 months. There is NO decent system for reporting long-term results (as in systematic data capture once a drug is in use). And this is true of efficacy (our Psychoalanutus reports that the newer anti-depressants, SSRIs, for selective seratonin reuptake inhibitors, work but only for the first six weeks or so, the efficacy falls off. Which sorta makes sense, you mess with brain chemistry and the body adapts to the dose, it presumably downregulates seratonin production).

        Most of the time, drug companies dismiss adverse side effects over the longer term because they are basically complaints (as in not systematically captured) and can be argued to have resulted from other factors. The only reason, for instance, that we know anti depressants suppress libido is it is SO widely reported that the drug companies can’t deny it.

        And there are more pragmatic reasons for not liking Botox. Slippery slope behavior seems common with cosmetic procedures:

    2. aet

      Does immunization sound like a stupid idea to you too?

      After all, one inoculates with the same stuff that could otherwise kill you.

      1. ambrit

        Dear aet;
        So, just what viriulent malady does Botox defend us against?
        It reminds me of the scene near the end of Bergmans’ “The Serpents Egg,” where the ‘scientist’ takes the cyanide and picks up the mirror to view the symptoms in his own face.
        Are we trying to be Toys R Us Perpetual Kids and “Turn that frown upside down?” With medical procedures?
        “Vanity of vanities. All is vanity.”

  7. Jim Haygood

    Debtors prisons — they’re back!

    It may not be a crime to be poor, but it can land you behind bars if you also are behind on your child-support payments.

    Thousands of so-called “deadbeat” parents are jailed each year in the U.S. after failing to pay court-ordered child support — the vast majority of them for withholding or hiding money out of spite or a feeling that they’ve been unfairly gouged by the courts.

    But in what might seem like an un-American plot twist from a Charles Dickens’ novel, advocates for the poor say, some parents are wrongly being locked away without any regard for their ability to pay — sometimes without the benefit of legal representation.

    Being jailed for a debt is not the half of it. New Jersey will take away your drivers license for falling behind on child support. New York will yank your professional license. Deprived of working in their qualified field, and of the ability to drive to work, ‘deadbeat parents’ are then told to meet their financial obligations with both hands tied behind their backs. It rhymes with tossing accused witches into the water to see whether they can swim.

    The moral vindictiveness behind these medieval laws is somewhat different than that which led to 19th century debtors prisons. Since 90 percent or more of child support is paid by men, these laws are aimed at using the state as a proxy to keep twisting the knife into the sorry smegmatic bastard, long after he’s been evicted from the marital home. So galling is the unfairness of this regime, that it’s a major reason why courthouses now bristle with armed guards and metal detectors.

    1. Jeff

      Child support payments also destroy women’s and children’s lives because the father not only is removed from any possibility of reconciliation from the mother if they
      decide to resume their marriage but also his impoverishment precludes any resumption of financial support.

      Probably half the homeless men in America have been
      forced onto the street by these draconian financial
      decisions made by gynophilic judges.

      That would be an interesting study. “What percentage
      of homeless men and women and children, are the result
      of family support decisions made by unelected judges?”

      1. aet

        If you father the child, you pay the support: and the State ought to help enforce that obligation any way that it can.

        I see nothing at all wrong with that policy.

        1. Jeff

          What if the father wants the mother to have an
          abortion. Or, doesn’t want the mother to have an

          If you have to pay, then you should get to help

          1. Yves Smith Post author

            What bullshit. The man could have damned well worn a condom. Both pregnancy risk and STDs argue for condom use. He has no business demanding a woman engage in a surgical procedure as a result of his failure to take basic precautions.

            And that’s before you get to date rape. Pretty much every woman I know has been in a situation when she has had less than consensual sex, in that it was a date, she was on board for some physical intimacy, but when it went further than she wanted (or the man got rough and she realized his style of sex was not something she was interested in) he did not take no for an answer and basically forced himself on her.

            Now most women would have abortions under those circumstances, but a lot of women feel who are not pro life are nevertheless very reluctant to terminate a pregnancy, they feel a ton of guilt about it. This in not an easy decision for a lot of women, and even though I can’t relate to those sentiments, they are very strong and drive the decisions of many women in the position of having an unexpected pregnancy.

          2. ambrit

            Dear folks;
            I feel you all are making an error in analysis. The mistake, I assert, is in assuming unimpared logical faculties in the two people involved. Sex, when viewed logically, is usually being viewed at a distance. I suspect that some sort of inverse geometric relationship could be derived from any algorithim using sexual arousal and rationality as inputs. If we all acted logically all of the time, we would be Vulcans. Live long and prosper.
            The underlying conflict here seems to be the age old one of power relationships between the genders. Teach young women to be the mistresses of their own bodies and fates. While some might suggest that the best contraceptive is the word ‘No,’ the World being what it is, teaching women a few dirty tricks helps a lot, too. A tolchy to the yarbles does wonders in reducing ardour. Yes, I’m a father to two grown women. We have the scars to prove it.

  8. Jeff

    Re FDA “regulation” of biocides, that is chemical death for profit…

    Revolving door:

    The FDA is bought and paid for and staffed by the chemical death industry. See the above link. Also, the High Court…

    Elena Kagan, Supreme Court Justice
    As President Obama’s Solicitor General, Kagan took Monsanto’s side against organic farmers in the Roundup Ready alfalfa case.

    In Monsanto v. Geertson Seed Farms, Monsanto tried to get the Supreme Court to force genetically engineered alfalfa onto the market without an evaluation of the crop’s environmental impact. Geertson Seed Farms made the case that the USDA should have considered the fact that GE alfalfa would permanently contaminate their GE-free alfalfa seed.

    As Solicitor General, Kagan was supposed to represent the interests of the American people in matters that came before the Supreme Court. Instead, she went to bat for Monsanto.

    Kagan joined a Supreme Court that includes a former Monsanto lawyer, Clarence Thomas.

    1. aet

      That’s very right-wing hiding under “anti-Government” rhetoric: seeing as the FDA is the oldest CONSUMER PROTECTION AGENCY in the USA!

      Use the power effectively: don’t abolish it! That is EXACTLY what rapacious industry would like!

      You paid for it, long ago!

      1. citalopram

        Criminals don’t want rules and regulations, and they certainly don’t want anyone looking over their shoulders (regulatory agencies). This is libertarianism in a nutshell: no rules for the rich and tyranny for you and I.

        1. joel3000

          Good regulation works to protect society from bad market outcomes (e.g. restaurant employees must wash their hands after using the bathroom). Bad regulation is used as a barrier to entry to protect oligopolies from competition.

          1. citalopram

            “Good regulations” and “bad regulations” are open to interpretation and are therefore subjective. Libertarians and the tea party oppose any and all regulations on big business as a “job killer”.

      2. Jeff

        Right wing? Hardly, I am a William Jennings Bryant
        Agrarian Populist if you have to hang a label on me.
        I want to see a real FDA with real regulatory powers and want to see chemical company executives go to prison.

        Knee jerks on the left are as pathetic as on the right.

    2. aet

      As to Madame Justice Kagan, one could think that her experience would make her more, not less, aware of the “weak points” in Monsanto et al.’s future legal arguments.

      Personally, I credit the independence of the Judiciary.

      Perhaps you could explain to me why I shouldn’t?

  9. hello

    China Builds Lead in Afghan Commodities, Adds Oil to Copper

    The deal, to be completed in a month, will boost China’s position as its neighbor’s biggest foreign investor after a state company won the right in 2007 to mine the biggest copper deposit in Afghanistan by pledging to build a coal mine, power plant, smelter and railroad. In Africa, producer of 12 percent of the world’s crude, Chinese companies promised billions of dollars in aid, investment and loans for energy supplies.

  10. b.

    “That’s because the real cause of our economic slump isn’t … low taxes, the growing divide between the rich and the poor… It isn’t, in short, any of the things all the various nitwits say it is. It’s the debt, stupid.”

    Color me unimpressed. Where did the debt come from? From flat and declining wages vs. rising profits. Resetting the debt clock is not solving the problem. Ending the Second Gilded Age might be even less palatable to the purveyors of published opinion than debt forgiveness, but it is not enough to get back to where we started, we will also have to turn in a different direction.

  11. b.

    Fallows is a nice guy, but he is also a pitch-perfect example of the problem.

    “One thing I have learned from seeing the U.S. from outside is that what works in Germany, or Sweden, or Japan, etc, will not necessarily work in the United States.”

    Yeah, like the metric system. It just won’t work.

    “[W]e need American ways to accomplish the same goals.”

    Sorry, James. The word you are looking for is dysfunctional. Your culture is not just “different”, it is self-destructive. You pretend the present is and has always been the American way. You are in denial about the radical change that has has pushed the nation from the constitution and the bill of rights towards the “rule of men” and crimes against humanity. A culture that half tacitly, half explicitly approves of torture is only consistent when it endorses or acquiesces to economic cruelty. The really amazing observation for me is that The People are even more complacent about the erosion of their liberties and the corruption of the institutions meant to facilitate their will, than they are about the redistribution of wealth that is about to ruin their children.

    “I am too wholly a creature of American culture to imagine not having that as the base for my identity, concerns, and efforts.”

    Pray tell, which American culture is that? The culture that shaped Eisenhower, Franklin Roosevelt, and Robert Jackson, and MLK (and even LBJ), or the culture of Carter, Reagan, Clinton, Rove and Obama? I’d like to think that, just like the constitution, that culture is a living thing, and changing – and maybe not always for the worse.

    Entropy. It just won’t work for us.

    1. Hugh

      “[W]e need American ways to accomplish the same goals.”

      Fallows is an idiot, just another Establishment liberal mouthpiece. An expert on handwringing but when it comes to actual solutions, nothing but bromides and platitudes.

      As for that quote above, it was thinking like this that gave us the corporatist Obamacare. Here’s what Obama had to say about single payer plans that provide better health outcomes at half the costs in most of the rest of the industrialized world:

      Every one of us, what we’ve said is, let’s find a uniquely American solution because historically here in the United States the majority of people get their health insurance on the job. So let’s build on that system that already exists — because for us to completely change that, it would be too disruptive.

      August 14, 2009

      Apparently, Obama had never heard of programs like Medicare and Medicaid at the time.

    2. bmeisen

      The metric system, sidewalks, public transit, public education, proportional voting, national healthcare. To be honest the US had the beginnings of a lot of this – was the sidewalk invented in the US? – and they have been stamped out by neo-Pinkertons.

      Hard to imagine worse advice for Americans:

      what works in Germany, or Sweden, or Japan, etc, will not necessarily work in the United States.

      Ignorance is making Americans poor and madder than all hell.

  12. PQS

    Yves, caught this in my old fashioned hard copy of the LRB:

    Another great installment in John Lanchester’s analysis of the Economic Meltdown, which I have found to be one of the most educational series for a layperson like myself. Plus, he has a great sense of humor.

    I did have to disagree with him a bit on this point:

    “The discipline of macro-economics was born out of the study of the Great Depression, in an attempt to understand what had happened and avoid a repetition. That’s why it’s so depressing to see the developed world not just sleepwalking towards another recession, but actively embracing policies which make it more likely.”

    Depressing isn’t the word I would use – more like infuriating or maddening.

  13. Bev

    The Climate Reality Project

    The Climate Reality Project just launched. On September 14, we’re sounding a global wake up call. Watch this video to learn more and join us.

    24 Hours of Reality will be broadcast live from our website. All you need to tune in is a computer (or mobile device) and an Internet connection.

    But that doesn’t mean you need to watch 24 Hours of Reality alone. Host a watch party! Get your PTA group together. Organize your soccer team. Ask your school if you can use the auditorium. Watch the broadcast with people you care about.

  14. Todd

    Re concealed guns. More guns than ever being sold.
    Violent crime is dropping nationwide. Anyone see a

    Criminals love unarmed victims.

  15. Valissa

    As America’s Middle Class Shrinks, P&G Adopts “Hourglass” Strategy

    This week brought a different kind of evidence that brings home (literally and figuratively) the trend of America becoming a two-class society. Among other companies, Procter & Gamble is adopting an “hourglass” marketing strategy, with products aimed at high- and low-end consumers, but not much in the middle. In a marked shift from P&G’s historic focus on middle-class households, “the world’s largest maker of consumer products is now betting that the squeeze on middle America will be long lasting,” The WSJ reports.

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