Links 12/13/11

How We Assign Blame for Corporate Crimes LiveScience (hat tip reader Aquifer). This is not good research. Small sample and no sign it was controlled. I guarantee you’ll see this written up widely.

Electronic Drum Machine Shirt lets you bring beats with you Gizmag

Markets Doubt Europe Deal Wall Street Journal. Duh.

No Draghi Ex Machina Paul Krugman

More Charts of the Day: Italy Works Over 20% More Hours Than Germany and France Credit Writedowns

Pakistan: U.S. Lawmakers Freeze $700 Million In Aid Huffington Post

Supreme Court to Rule on Immigration Law in Arizona New York Times

Imagining 2076: Connect Your Brain to the Internet. How miserable.

Sino-Forest to default on debt payment Financial Times. Score a big one for John Hempton.

Fat-tail fears catch oil traders between $50 and $150 bets Financial Times

Hedgies vs Obama Felix Salmon (hat tip reader Scott). A nice skewering from last week.

Millionaires on Food Stamps and Jobless Pay? G.O.P. Is on It New York Times

GOP Nullification of Consumer Protection Bureau Law Easily Nullified By a Recess Appointment Dave Dayen, Firedoglake

Long-term jobless eye bleak future as benefits end Reuters (hat tip reader furzy mouse)

Banks Push for Foreclosures Pact Wall Street Journal. These leaks are getting more specific, but my contacts remain skeptical.

NPR Reports that Debtors’ Prisons Are Alive and Well Nathalie Martin, Credit Slips

Antidote du jour (hat tip reader furzy mouse):

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  1. David

    For the antidote, I think we have Christopher Robin, Winnie the pooh and Tigger after they have grown up. Time has not been kind to them.

    1. craazyman

      looks like a scene at my office.

      seems like cooperation until suddenly there’s flesh and blood everywhere.

  2. Denis

    Re the livescience article on group minds… It seems to me that, if you dismiss the study a bit quickly based on the sampling.

    By the same token, you may just as well dismiss most if not all results you’ll find in psychology textbooks. Did you know Milgram used classifieds to recruit an even smaller sample for his famous experiment?

    Anyway, cursory googling yields the following PDF:

    The samples were recruited using Mechanical Turk using fallacious pretexts, which isn’t unusual; years back, she would have asked on-campus students or found subjects using classifieds, using equally fallacious pretexts.

    Whether the sample is so-called representative of the general population or not is a moot point when your interest is to gain insights on how a mind works. (If anything, you get more insights by studying subjects that are abnormal to the point of being labelled sick.)

    As for the result itself, she’s basically arguing that we tend to discount an individual’s subjectivity when he’s meld within a strongly stereotyped group. Quite frankly, it’s a no brainer.

    It implies, for instance, that you’d attribute part or all of the blame for youth alcoholism to binge drinking in college, i.e. to conformism rather than on the individual students. Note that her interest lies not in whether binge drinking in college is to actually blame or not, but in whether random people in the street will tend to blame it at all. Which they arguably will.

    Expanding on the result, it also means, since research additionally highlights that subjects tend to conform to their labels, that self-fulfilling prophecies are at work, which implies that sociologists should find trends when studying similarly stereotyped people. Duh. :-)

      1. Aquifer

        Thanx for the link – good summary

        “The research on system justification can enlighten those who are frustrated when people don’t rise up in what would seem their own best interests. Says Kay: ‘If you want to understand how to get social change to happen, you need to understand the conditions that make people resist change and what makes them open to acknowledging that change might be a necessity.'”

        Unfortunately the article, IMO, failed to tell us “what makes them open to acknowledging that change might be a necessity” … Knowledge of what makes change difficult is a necessary, but not sufficient, prerequisite for getting where we need to go …

        1. liberal

          Oh, I think it’s very easy to explain why people don’t rise up: it’s a collective action problem that’s fairly difficult to solve.

    1. MyLessThanPrimeBeef

      Expanding on the result, it also means, since research additionally highlights that subjects tend to conform to their labels,


      How can we use this to our advantage?

      Can we label, for example, vampire squids as Gandhis? Will they conform to the expected standards of this new label?

    2. Yves Smith Post author

      I do dismiss most psychological research for the same reason, plus often questionable study design (in particular in anything done in an in person setting, subtle signals and small changes in wording can create big differences in results).

      1. Sock Puppet

        The hard sciences work by observing natural phenomena, developing theories to explain the phenomena, and then testing those theories in the real world by seeing how well they predict things.
        The soft sciences – including economics – seem to function by taking insufficient observations, developing a theory, then insisting on changing the real world to agree with the theory.
        Economists can’t even explain the past, let alone predict the future. I’ll trust physics over economics any day.

    1. PunchnRun

      Mammals and birds must care for their progeny while they mature. That nurturing instinct transfers readily. Everyone who responds to the antidote of the day testifies to that.

      We come equipped with many instinctive behaviors. Conditioning helps select the ones that take charge. We can “condition” ourselves simply by making choices, but early childhood experiences also have significant effect. As we see here.

      “My goodness, we can all learn from that.”

  3. Jackrabbit

    FBI is using CarrierIQ

    FBI has turned down a FOIR, saying: The material you requested is located in an investigative file which is exempt from disclosure…

    Does CarrierIQ have any value for law enforcement now that it is known?

    And don’t miss the “nothing to see here” CarrierIQ Response to concerns. This Press Release details what the CarrierIQ software does and does not do. Where we learn that:

    Treavor Ekert discovered CarrierIQ only because some programmer has mistakenly forgotten to “switch off” debugging (which outputs info that helps programmers).

    CarrierIQ claims no privacy problems because . . . what was shown in the video [by Treavor Eckhart] demonstrated keystrokes and SMS being written to Android log files [due to the debugging mistake], not stored or transmitted by the IQ Agent.

    They also have a cryptic, weasel-worded explanation for what data is stored (see page 13), claiming that only certain, non-private, information is stored on “CarrierIQ deployed systems” (what about systems deployed by the mobile phone company itself or third party vendors?) and that “. . . we [CarrierIQ] are not permitted to analyze, resell or reuse any of the information
    gathered for our own purposes [when CarrierIQ hosts the database], or to pass to any third party unless required by law.Note: So law enforcement can bypass Carriers and any special protections written into law that is specific to Carriers.

    But its all good because: “… what is actually gathered by a Network Operator is based on their business requirements and the agreements they form with their consumers on data collection.” (page 7) This is the ultimate push off: customers have CHOSEN to allow CarrierIQ functionality.

    How CarrierIQ gets on a mobile device is interesting. Most of the time it is customized and placed there by the handset manufacturer (“embedded”) and can not be deleted by the consumer/user. As described by Trevor and CarrierIQ, a programmer that customizes the software can alter it in a way that causes private information to be recorded (and presumably *could* then be included with information sent to the mobile phone company). CarrierIQ is simply saying that this is not the intended use.

    Furthermore, if private information is recorded – mistakenly or otherwise – it is likely to simply be saved in encrypted files at your mobile phone company or some vendor approved by your mobile phone company so it is somewhat “safe”. But that info would be available to the FBI or other Government Agency.

    I wonder if the info (whatever may be there) would be subject to discovery in a private law suit?

    In any case, I think the response will not satisfy privacy advocates because it sidesteps the question of why CarrierIQ is included on handsets in such a way that it can not be deleted or turned off by the consumer.

  4. Stroebs

    I hope that you will continue to post on OWS, including the port shut downs. This seems like a huge story, with people striking in lieu of longshoreman and truck drivers.

    The movement is pouring sand into some of the cogs that turn on our nation’s dependence on foreign production.

    I cannot help but wonder how far this will go, and how *inconvenient* this pro-democracy movement will become.

    1. EmilianoZ

      The Guardian has a pretty good coverage of yesterday’s events:

      For instance you learn that Scott Olsen was among the protesters:

      “Scott Olsen, the Marine Corps veteran who was struck in the head during a clash between police and Occupy Oakland protests in October, led nearly 1,000 people marching back to the Port of Oakland on Monday evening.”

      1. F. Beard

        That reminds of Laura’s brother who was radicalized by a Cossack saber slash to his face and became a fanatical Red butcher in Doctor Zhivago.

  5. EmilianoZ

    The port truck drivers have written an open letter in support of OWS. In this letter they detail their working conditions. I couldn’t believe my eyes.

    “There are no restrooms for drivers. We keep empty bottles in our cabs. Plastic bags too. We feel like dogs. An Oakland driver was recently banned from the terminal because he was spied relieving himself behind a container. Neither the port, nor the terminal operators or anyone in the industry thinks it is their responsibility to provide humane and hygienic facilities for us. It is absolutely horrible for drivers who are women, who risk infection when they try to hold it until they can find a place to go.”

    “The companies we work for call us independent contractors, as if we were our own bosses, but they boss us around. We receive Third World wages and drive sweatshops on wheels. We cannot negotiate our rates. (Usually we are not allowed to even see them.) We are paid by the load, not by the hour. So when we sit in those long lines at the terminals, or if we are stuck in traffic, we become volunteers who basically donate our time to the trucking and shipping companies.”

    1. PQS

      I don’t understand how OSHA regulations do not apply at these ports….OSHA says employers must provide restroom facilities for both men and women.

      This is true in construction, where nearly everybody onsite is a subcontractor to the GC and not technically an “employee”.

  6. PQS

    Re: Debtor’s prisons:

    One of my friends had this happen to her – she was pulled over for a minor traffic stop, and ended up spending a night in jail because there was a warrant out for her arrest due to an unpaid bill. The court appearance summons had been filed by the debt collection agency and she never saw it or knew about it until she was pulled over. Thank God she was a longtime employee at our company and didn’t suffer any repercussions from this incident, but I can easily imagine scenarios where this could spiral out of control into job loss, yet more financial problems, etc. etc.

    Matt Taibbi said recently that people hate the banks because they have made life for ordinary people just like walking a tightrope over a pit of razor blades – one slip and you’re done; one missed payment and you’re trapped forever.

    I can’t think of a better example that this sort of thing.

  7. MyLessThanPrimeBeef

    If you work 20% more hours, and if

    1) you accomplish 20%+ more, then you are hard working and more productive.

    2) you accomplish exactly 20% more, then you are hard working but not more productive.

    3) you accomplish less than 20% more, then you either are less productive or you loaf on the job.

    Tracking hours worked really doesn’t tell the whole story.

  8. MyLessThanPrimeBeef

    That frozen $700 million is but one manifestation of the man-made global cooling phenomenon, as nations grow cooler and colder towards one another.

  9. William

    Re: “Antidote” photo–This depicts much of what is wrong with human’s attitudes toward other living things–no respect. Instead of keeping these wild animals in Guantanimo-like conditions (complete with the humiliation and a program of constant psychological passification), their rightful autonomy ought to be honored. And no, I’m not an “animal rights” activist. I just don’t think humans have the right to treat other living beings as their pets.

    1. F. Beard

      Many adopted animals have been rescued from the wild where they would have perished. These particular animals, whether rescued or not, appear to be content and are teaching valuable lessons about the non-necessity for conflict in most cases.

  10. G59hb

    Don’t know if this has been posted.

    “Researchers with the Federal Reserve Bank of New York found that investors who used low-down-payment, subprime credit to purchase multiple residential properties helped inflate home prices and are largely to blame for the recession. The researchers said their findings focused on an “undocumented” dimension of the housing market crisis that had been previously overlooked as officials focused on how to contain the financial crisis, not what caused it.”

  11. Jim Haygood

    Tired of being hassled by the real world? Check into Troika Lala-land, where a brighter tomorrow is perpetually just around the corner:

    WASHINGTON (MarketWatch) – Greece is making progress under the economic program backed by the International Monetary Fund but faces “much stronger” headwinds, said Poul Thomsen, the director of the IMF’s mission to Greece, on Tuesday.

    “Structural reforms have fallen short, they are well behind schedule, they are well away from critical mass where people conclude that Greece is doing business in a fundamentally different way,” Thomsen said. “This is the main reason why the hoped-for bottoming out of the recession has not happened,” he said.

    The IMF had expected the Greek economy to reach an “inflection point” this year where the recession would bottom out and slow growth would start. The IMF said a key to the success of the program was that Greece and its private-sector creditors complete work on a debt restructuring program that includes a 50% write-down on the country’s debt.

    Since the official sector isn’t offering ANY writedowns, a 50% haircut on privately-held Greek debt would only cut Greece’s debt burden by around 20% overall, leaving it at an unsustainable level well above 100% of GDP.

    Since the beginning of 2010, Greek banks have lost one-fourth of their deposit base, in an ongoing and accelerating run. Effectively, the ECB is advancing the euros to cover the deposit run … now amounting to tens of billions of euros that won’t be haircut at all, though the insolvent Greek banks are incapable of paying back a penny of it.

    Although some of the withdrawn deposits are being held as cash in mattresses, a portion is being redeposited outside of Greece. How can anyone expect an economic turnaround, while a bank run and capital flight continue to rage? Far from bolstering confidence, the Troika’s program has destroyed it.

    On the other hand, were Greece to default and devalue (meaning reintroduce the drachma), capital flight likely would reverse. With debt haircut to a sustainable level, and drachma prices appearing cheap in euro terms, foreign capital would surge into Greece in search of bargains, as would tourists. OPA!

    1. MyLessThanPrimeBeef

      …foreign capital would surge into Greece in search of bargains, as would tourists. OPA!


      It shows you that there is good guy foreign capital and there is bad guy foreign capital.

      The good guy foreign capital is watiting to rush into Greece.

      The bad guy foreign capital is resisting any private investor haircut.

      It seems like the good 1% should take on the bad 1%.

  12. Valissa

    Talk-show host offers Newt Gingrich $1 million to drop out

    Some conservatives don’t believe in Newt-mentum.

    Popular right-wing talk-radio host Michael Savage has offered Newt Gingrich $1 million to drop out of the race for the GOP nomination because he doesn’t believe the former Speaker of the House can beat President Barack Obama. …

    And why is that?

    Savage has a long list on his blog, including Gingrich’s ads with Nancy Pelosi, his past infidelity and the fact that — no matter his intelligence — when he appears on TV “he will come off badly compared to Obama and look like nothing more than what he is: a fat, old, white man.”


    The fact that this clown is getting any traction at all should make it clear that the 2012 election race is a farce.

    Sooo many reasons to chuckle

    Love the earrings!

  13. serge

    An enormous change has taken place in the tone of mainstream economics over the last 30 years. In the 1960s anyone coming across the subject was confronted with a single confident set of ideas, set down in textbooks claiming to dish out the unquestionable truth in much the same way as primers in A-level physics or chemistry, complete with tick-in multiple choice questionnaires at the end of each section to make sure you learnt the correct answers by rote.1 Economists believed their ‘understanding of the economy was nearly complete’.2 Typically, Paul Samuelson, adviser to the Kennedy government and author of a best selling textbook, claimed that this understanding meant economic crises were a thing of the past. ‘The National Bureau of Economic Research’, he told a conference of economists in 1970, ‘has worked itself out of one of its first jobs, namely business cycles’.

    Such was the orthodoxy in government circles, the media and the educational system. It was also the orthodoxy for Labour politicians. Marx was out of date, argued Anthony Crosland and John Strachey in two very influential books that appeared in 1956, since he had seriously underestimated the possibilities of stabilising the capitalist system.3 The application of Keynes’ teaching could ensure that there would never be slumps again and that poverty would be completely eradicated within a few years.

    Then, suddenly, in the mid-1970s this ‘Keynesian’ orthodoxy fell apart. The advanced Western economies were all afflicted by recessions and far from providing governments with a means to avoid them, the methods preached by Keynes seemed only to produce inflation alongside unemployment. Keynesianism suddenly ceased to be fashionable, and was replaced by ‘new classical’ economic theories based on the previously fringe ideas of Milton Friedman and Friedrich von Hayek.

    There is a crisis in bourgeois economics in the sense that it cannot begin to explain what has gone wrong with the system in the last quarter century or how to put it back on the right track. It is caught between, on the one hand, providing bland apologies for the market of the sort which are to be found in the textbooks or the reports of the IMF and the World Bank, or, on the other hand, of pointing to faults in the system to which it freely admits it has no answers…. –Chris Harman(1996)

    1. Anonymous Jones

      It’s nigh impossible to predict the future movements of any reasonably complex system. The only people who seem to possess the ability to make accurate predictions probably just haven’t made enough predictions yet or died before they could make the requisite number of predictions to expose that their predictions come true no more often than randomly generated guesses.

      You only have to go to a Vegas sportsbook to confirm that this truth is anathema to a lot of people. Humans seems to think they possess tools adequate to make consistent predictions (yes, yes, in Vegas, you just have to be consistently taking advantage of others’ poor predictive abilities, but even then, stories of success there are usually greatly exaggerated).

      Freely admitting that one does not have the answers may, in fact, be the first (or most important?) step toward that nebulous concept of “wisdom”, but it sure won’t make you rich or sell a lot of textbooks. Don’t hold your breath.

  14. kravitz

    Are you suing your bank? Don’t send in the OCC’s Foreclosure Review. You may lose the right to sue if you do. When Housing Wire is annoyed, it’s gotta be bad.

    Borrowers may give up future claims in foreclosure reviews

    “But {OCC Chief Counsel Julie Williams} also revealed in some instances, [reviews] would be final. In some cases, a borrower would not be able to bring future claims against the servicer if he or she takes the payout.”

  15. Jeff

    If anyone is having problems watching youtube videos in Firefox, (everything else works but main screen is black, no audio, no controls, no image),
    here’s what fixed it for me: (Mac OS X)

    open applications,
    highlight Firefox.
    Right click “get info”
    check “open in 32 bit mode”.

  16. Darren Kenworthy

    Regarding the livescience piece, This assertion doesn’t appear to follow from the study, but might illuminate the impulse behind it:

    “When people consider corporations to be mindful entities, this gives them moral rights, such as the right to contribute to political campaigns, as was granted to them by the Supreme Court last year, as well as legal responsibilities,” study researcher Adam Waytz of Northwestern University said in a statement.

    The fact that the researcher would make such an assertion, apparently as if it were supported by a scientific finding, disposes me to dismiss the whole thing as a bad job.

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