Links 8/5/12

Bilingualism ‘can increase mental agility’ Strathclyde. Take that, you monolingual American exceptionalists!

Palm trees ‘grew on Antarctica’ BBC

Human cycles: History as science Nature. Our sometime guest blogger Richard Kline is a very serious practitioner.

Slim chances for America’s obese Gillian Tett, Financial Times. Guess what is the biggest single source of calories in the average American’s diet? Soda pop. And since there are plenty of people who don’t touch the stuff, imagine how much of total daily calories it provides for everyone else (related fun factoid: 25% of the average American’s daily calories are provided by sugar, with high fructose corn syrup counted as sugar).

Hedge-Fund Chief’s Son Freed In Death At Yellowstone Club Bloomberg

China Evacuates 867,000 People As Tropical Storms Hit Coast Bloomberg

China gives UK access to Gu Kailai trial Financial Times

Greek tourism gets Hollywood boost Guardian

‘Vengeance for ECB Bond-Buying Will Be Bitter’ Der Spiegel. The comments are much less sanguinary.

India Blackout Foreshadows US Event Daily Impact (martha r)

The Washington Post on the Most Transparent Administration Ever™ Kevin Gosztola, Firedoglake

Maddow: Romney demanded opponents’ tax returns and lied about residency in 2002 Raw Story

Luck vs. Skill: Seeking the Secret of Your Success Thomas Frank, New York Times

Many Americans Die with ‘Virtually No Financial Assets’ Mark Thoma. So cutting Social Security and Medicare = old people die faster.

AIG Will Still Be Majority Owned by Tax Payers WSJ Deal Journal. Just so you know…

Where are the US jobs? Ask the corporate cash hoarders Guardian

Top Companies Paid 9% U.S. Tax Rate NerdWallet (furzy mouse)

Debauched RMBS Credit Spectrum

FAIL | PB Post – Two Years After Foreclosure Probe Launched, Bondi’s Investigation Winds Down ForeclosureFraud

Rally Monkey: “Stop trying to explain my behaviour. I’m a monkey.” FT Alphaville. I believe reader Maju was trying to puzzle this out.

Why sales of stamps flourish in tough times BBC

Antidote du jour (furzy mouse):

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  1. Kyrie Eleison

    Re: Luck vs. Skill

    Certainly makes one think about, say, the role that teaching and learning styles play in a lot of this.

    What are our goals when measuring something in subjective terms? Are we seeking the “right” answer to garner public approval or are we thinking independently for ourselves and giving an honest answer?

    Even in this study, where there was neither positive nor negative feedback given to the voter based on their choices, it seems rather odd that people would not vote honestly based on taste and opt to not only back the “winners” but also disadvantage the “loser”.

    This leads me to believe that these behaviors are learned, dare I say indoctrinated, in our noble quest for “the right answer” (whatever that means).

  2. Peter Pinguid Society

    Re: Hedge Fund Chief’s son freed in death at Yellowstone Club

    Here at the Peter Pinguid Society we are in mourning over the death of Parker Regan, age 19, son of R. Christopher Regan, co-founder of the Chartis Group, a health care consultancy.

    Parker Regan, a piece of the continent, a member of the 0.01 percent, a part of the main, one of the finest humans on earth, was killed during a drunken joy ride in an all terrain vehicle at the luxurious Yellowstone Club in Montana.

    Whenever a member of the 0.01 percent dies, it’s a tragedy. And I would say a crime, however the drunken driver of the all terrain vehicle was also a member of the 0.01 percent therefore it cannot be a crime, and we’re glad to see that he’s already been freed.

    While there are an estimated 7.031 billion clods on the planet, and roughly 56,597,034 of these clods die each year, and approximately 155,000 clods died on the same day as Parker Regan, Parker Regan was not some insignificant 99.9 percent clod . He was a promontory, a manor of thine own, a member of the 0.01 percent, therefore send not to know for whom the bell tolls, when one of the 0.01 percent dies, it tolls for thee.

    1. Up the Ante

      About the only “bell” that “tolled” for Mr. Regan was that calling him to his duties, in this case to ‘sit upon the throne of gravity’, as it were.

      From the laws of physics, ‘sorry’.

  3. Thorstein

    Correction: Dr. Frank of Luck vs. Skill is Robert Frank of Cornell, not Thomas Frank of Harper’s.

  4. craazyman

    Contra Naturam

    I dunno about this cliodynamics stuff. Sounds like somebody might think they nailed the math, then Bonehead Bankster levers it up 30 or 40 to 1 with some real money on it. God knows what’ll happen then but it sound like it will hurt. There should be a law against mixing math with social studies. ahahahaha. Maybe Mathbabe can come on in here and let us know if this stuff for real or just pattern recognition gone Frankenstein crazy.

    1. Robin Hood

      Ya. You’d think there would be a chance we might understand it if they left the math out.

      1. Bev

        I would like further explanation about this, mathematically, legally:

        The Great Train Robbers of 2012

        August 4, 2012
        by Jim Sinclair

        Dear CIGAs,

        This might be our only hope versus the demons of finance in the Temple of Wall Street, The City, and Bahnhofstrasse.

        It is just that bad.

        Do you realize that Knight Financial just purchased a Pension Financial commodity business with over $400,000,000 in accounts deposited for $5,000,000? The other side of the algo bad trades made all the money that Knight lost in 40 minutes.

        Could this have been “The Great Train Robbery of 2012?”


    2. Glenn Condell

      Yeah I’m leery of a theory that can posit regular as in ‘like clockwork’ historical periods, obeying some law too deep for us to fathom.

      I hated maths at school and ignored it for years, until my growing interest in HPS and biology and psychology etc made me realise how it lies at the base of all sciences – boil chem and physics down and maths is what remains, the language of science. But history is not a science. You might as well propose similar cycles for art. Thought experiments like this can be useful but never conclusive.

      Also, the author and commenters appear unaware of Struass and Howe’s Fourth Turning, a similar theory but based on 80 year cycles. Again useful as a filter but so many exceptions to the schemata that it fails as a model.

    3. gordon

      Another attempt to remove the moral (ie. human) content from history? “We only attacked those guys and killed millions in the process because the cycle peaked – it wasn’t really our evildoing”?

      I’ll stick with Brinton’s “Anatomy of Revolution”, thanks. That’s as close to an amoral study of history as I want to get.

  5. taunger

    re: Slim Chances . . .

    As a recent law grad with a family and dim prospects, I recently qualified for food stamps. I can propose a reason for the obesity epidemic among those on food stamps I have yet to see: eating becomes one of the few gratifications during poverty. Food stamp benefits are generous, as they should be, and I found myself feeling free to get that extra pint of ice cream or fatty breakfast sausages. Thankfully, I have some self-control, but when you can’t go out for a movie, or even pay the cable bill to dull the ache of existence, then it becomes tempting to eat the pain away.

    It is not education, or access to healthy food (though that would help). It is so simple as ending the angst of poverty.

    1. Kyrie Eleison

      Certainly an idea lacking honest consideration these days.

      One of my former bosses, a police chief who also did PI work in the less fortunate areas of Milwaukee on the side, would tell me stories about how there would be no grocery stores in some neighborhoods yet fast food joints on practically every corner.

      The manager of a local KFC there would refer to the day that welfare checks went out as “Mother’s Day”. They would buy up buckets of chicken and toss them in the fridge for the kids to eat until the next round of checks came out.

      So, I have to agree that it’s not just education, and access does play a bigger role than some might think, but keep in mind these are poverty-stricken areas. They are not anything like the neighborhoods many of us meander through on any given day.

    2. Eureka Springs

      I smell a troll. Why don’t you specify how much $ you receive in food stamps. Tell us a little more about all this excess you are able to buy and eat specifically. Tell us how much of a balance you have at the end of the month?

      I suspect we see obesity among American poor due to the types of low cost highly processed foods low budgets tend to purchase/consume. And binge eating from a survival base/fear instinct when food is available. Not just stress and boredom, though surely a part of it.

      The only time in my life a gained weight was in time of poverty because i couldn’t afford fresh foods… and the amount of corn syrup processed foods which (in bulk) replaced them.

      Fresh foods are much, much more expensive. I seriously doubt you are eating that two out the four week period…. unless you have more money on the side than most.

      1. Kyrie Eleison

        I’m not sure he is trolling … I thought most people here were staunch anti-fat crusaders?

        I have to overeat for survival (but for an entirely different reason) and I find a whole lot more truth to what you say, but when it comes to this topic it’s always more convenient to blame the victim.

      2. Biky Bear

        Law school grad doing a three pronged whammy: keep the lawyer liar skills up, keep up the pretense of an Other so when he des get the lawyer job he can golf with a straight face and tell stories about how generous food stamps are, and maintain liberal cred with the finishing move of “these poor people do it to themselves and it’s tragic.”

    3. dcblogger

      Food stamps are $4.50 per person per day. Not generous. Eat a pint of ice cream and you will burn through you monthly allotment in a hurry.

      1. ohmyheck

        Yes. I’m sorry, but foodstamps are not generous. My mentally-ill renter in my basement gets foodstamps. He has no income and gets $200.00 per month. I help him shop, and buy as much as he can from the mark-down bins, and it doesn’t last him the month.

        His mom helps him out a little, and I don’t have the heart to kick him out, because he would then be homeless.

        1. Mark P.

          Kurt Vonnegut had an succinctly accurate phrase “poverty trance.”

          ohmyheck wrote: ‘I don’t have the heart to kick him out, because he would then be homeless.’

          Good on you for having the grace to walk the walk. Most of us talk the talk, but wouldn’t have your patience or willingness to take a loss.

          1. skippy

            Hole heartily seconded!

            I’ve taken in people and animals in need, one of the highest achievements a human can accomplish methinkniks.

            Skippy… you have my personal admiration, good on you!

      2. cwaltz

        when I was cashiering I saw alot of anecdotal evidence that supports taunger’s mentality. I actually had to go back to the pharmacy to ring up a customer after the pharmacist refused to ring up a food stamp purchase for soda and candy.
        I saw food stamps utilized to help fill easter baskets. I certainly don’t begrudge this either.

        The truth is being poor is emotionally taxing and it does get hard to always make the healthy choice. If you can’t afford to take your kids on nice vacations or get them the latest gadgets it would be easy to try and compensate by picking up junk food.

    4. optimader

      I would frame the editorial comment as
      sugar coutned as (high fructose conre syrup rather than

      “fructose corn syrup counted as sugar”.

      Sweetened beverage addicts would be healther if it were sugar rather than HFCS, which shuts down the satiation mechanism in the brain. Now how could that possibly go wrong??

      1. Lyle

        HFCS (as used in soft drinks) is a compound of 55% fructose and 45% glucose, while table sugar (sucrose) is 50 50 glucose fructose. So to claim a 5% modification of the ratio has such big effects seems out of line. Note for reference from Wikipedia there is HFCS90 (90% fructose) and HFCS45(45% fructose which is used in baking) as well.

    5. ginnie nyc

      I’d like to know which metropolis you live in, because here in New York City, the mayor has cut Food Stamps in half in the past year for unmarried adults. I’m about to lose my munificient $40/month in September. The official maximum for single adults ($200) is infrequently bestowed, and is insufficient, anyhow.

  6. Clive

    Re the power supply issue, in Britain local codes mandate burried cables in built-up areas (a small amount of early 20th Centuary overhead wires remain; these are very much the exception). Where rural transmission lines run overhead, these are easier to keep clear of potential obstacles through enforced wayleaves than in towns. So the re-think and upgrades are needed in non-rural locations.

    What a contrast then, to the US (and, to an extent, Japan) where low initial cost but less resiliant overhead lines in cities is the norm. But in Japan, the grid planners build in lost of diversity in the routes partly because as the load density as much higher key — but vulnerable — supergrid lines and interconnects aren’t that common.

    As many of the linked-to articles suggest, electrical supply has edged up the criticality table but no-one has grasped what this means for engineering standards (or, rather, they’ve grasped it but don’t want to pay for it).

    As usual, it’ll take a crisis with possibly lives lost to get any action taken. And I can say for sure, the official response will be “who coulda knode ?”

    1. Clive

      Oh, one very important thing I forgot. The key driver of demand AND grid instability is the very “peaky” summer cooling load. The pretty much unrestricted growth of housing in areas which are borderline uninhabitable without mechanical cooling (and, again, official toleration of very low building standards in respect of thermal insulation due to lobbying by the construction industry aided and abetted by the FHA not asking for better in order to not dent demand for agency insured mortgages) exacerbates the problem every year.

      The mortgage-construction-finance industry monster has fed off the table of the power grid for decades in the US but — shock, horror — hasn’t paid it’s fair share of the costs it is tacitly incurring. That cheap-o subdivision lot in Phoenix is being subsidised by a utility payer in, say, Palm Springs because everyone in the region has to cough up for fixing the resultant issues.

      Not that we’re much better in Britain. Building on flood plains is the probler here — rising sewer utilities and insurance costs hide the true cost of basically environmentally unviable housing starts being allowed.

      1. Robin Hood

        Our building codes are criminal. It wasn’t until a few years ago that AZ had a roof insulation requirement at all (I think they put it in just as the building boom was coming to an end) and now it’s a measly R15, but of course no one verifies we actually get that in new construction. Nationally, in 2007 they released a “guideline” for R20, but if states or localities don’t put that in the building code, no one has to do it.

        To make matters worse, everything is built with vaulted ceilings so you have no attic – just a fixed width roof – and you can’t add insulation later if the builder decided to use 4 inch lumber instead of 6 inch which is needed for better than R15. Things like white roofs or heat reflecting shingles only work a fraction as well.

        Now the extra cost of a high R value roof during construction is almost neglible compared to the price of a house, and the numbers show that it is by far the biggest bang for the buck in reducing heating load in the summer and also a very key element in reducing home heating in the winter.

        But the home building lobby has been successfully fighting this and any other effective eco ideas forever using the same ‘ole saw arguments like “oppressive regulation” and telling congress they are the champions for “consumer choice”. HA! Meanwhile we look around in the resale market and wonder what’s in the roof of that house?

        P.S. I think India has been having routine blackouts long before there were neo-liberals and even a World Bank. It is normal practice there for anyone with a critical facility – hospital, data center, etc… to build there own onsite generating capacity. At least emergency standby stuff.

    2. hermanas

      One house at a time, Clive.
      Solar panels on the roofs in Rockville, Md. would be a start.
      They got lot’s of cash in D.C.
      Stimulus, energy, whatever.
      “Teach your Children”.

      People say I’m “Lucky”.
      I say when “Preparation meets opportunity” is the def.
      They also, say, “You’re always busy but you never do anything.”
      Preparation may look like nothing. :-)

      1. Clive

        Good on you hermanas ! If everyone invested in a solar installation (even a modest one, perhaps 500w to 1Kw), 20+ SEER air conditioning, low energy lighting etc. etc. that would help both themselves and everyone else.

        Of course, that is if you’ve got disposable income and can choose to spend it on those sorts of things rather than a self-indulgent vacation say. Not really an option if you’re stuggling just to get by on food stamps, facing foreclosure and so on. but that’s a whole other argument which I wish people didn’t have to face.

        1. hermanas

          I said Rockville because I surveyed the farms that were cut up for developement there, and the “before and after” images still haunt my mind.

          1. Clive

            I’ve seen pictures too, and cannot believe sometimes that the rape of your beautiful country by ruthless, thoughtless tract development was permitted.

            I do hope the worst excesses are a thing of the past, but your words unfortunately suggest otherwise.

    3. Susan the other

      The whole idea of a grid is a ghastly old dinosaur. Don’t “re-engineer” the stupid thing. Decentralize it. Even Bill Clinton says so.

      1. Robin Hood

        There is a misconception here. The grid has never been centralized – not nationally anyway.

        If we are to use more intermittant sources like wind and solar, they need a grid and base load power still needs to come from conventional sources.

        The Wind Power Assc (not sure if I remembered their name right – but they are supposed to be the experts on wind) say that only 7% of the US population live in areas where wind power is economically feasible. They say we MUST build regional grids to get power from good wind areas to where the population (market) is.

        But we are not. Why not is what we should be talking about.

  7. ignim Brites

    Romney is the weakest Presidential candidate in forty years. Not since the Dems put up George McGovern has a party nominated someone guaranteed to lose his home state. Of course if this tax issue blows up maybe the Reps will dump Romney.

    1. neo-realist

      The republicans can’t dump Romney. He’s their best by default for this year. Jeb won’t run till 2016. As far as republican power grabs are concerned, their bigger priorities are winning the senate and holding down the house. They can cope with Obama governing as republican lite for another 4 years as he brings about incremental changes in the social contract, e.g., SS, medicare, and privatization of government services (charter schools) that they will put on steroid overdrive if they win and consolidate power in all branches of government in 2016.

      1. ignim Brites

        You are correct about Rep priorities and basically another Obama term will make it easier for Reps to hold the house and senate long term. Or to put it anther way, a Romney presidency would guarantee the Dems take the house in 2014, and probably the senate. All symptoms of a failed political class thanks to the Ivy league.

  8. Ep3

    In regards to Americans dying without assets, we need to consider the bigger picture yves. Can this planet sustain 7 billion persons? 10 billion? 15? Most ppl today don’t have the standard of living of Americans. So imagine bumping all them up to that level. We would vanquish all natural resources in a short time. And then what? We can’t let that happen to the elites. They are special. They have worked hard (especially paris Hilton) to get where they are. So all of us peasants need to die off early so we don’t crowd out the elites,

    1. Robin Hood

      Heh. It’s not easy being a professional slut. Just ask Brittany and the rest of the Hollywood hotties. And people just don’t understand the important role they play in trickle down economics.

      Take hair extensions for example. You know how when it gets hot outside and sometimes your long gorgeous hair just makes you feel all hot and yucky? Then you decide to have your stylist come over and cut it all off before you go totally batshit? Next thing you know your media person calls to say you got a interview on TV tomorrow and you scream “Oh My God I Cut My Hair Off!!!”.

      But you don’t pay these media people 10% for nothing and he/she says “Don’t worry dear, we’ll get you some hair extensions right now. Take a few of those pills I gave you, calm down, and we’ll over before you can say ‘Justin Timberlake’.”

      Close call, but everything turns out OK.

      So this is a wonderful opportunity for poor people to become Hair Entrepreneurs and harvest their hair growth for the hair extension market.

      But I guess some people are just to dumb to get it.

    1. Susan the other

      I need a quick clearinghouse for scientific hypotheses… because it now looks like palm trees in northern Siberia and northern Antarctica are evidence of the dreaded polar shift doing a 90 not a full 180. I wonder about stg. I have never heard anyone mention: is the Earth gradually rolling as it goes around the sun?

  9. Up the Ante

    Nukers ‘Debauched’ at Oak Ridge
    the 2-hour Walk Rendering Security Theater

    Oak Ridge uranium plant shut after protesters breach 4 fences, reach building

    ” .. to reach the outer wall of a building where highly enriched uranium, a key nuclear bomb component, is stored. ”

    ” .. had passed through four fences and walked for “over two hours” before reaching the uranium storage building .. ”

    “Stockton said the security breach was the “worst we’ve ever seen.” ”

    [ ‘ya think ? ]

    ” .. the storage building itself .. was built after the Sept. 11, 2001, al-Qaida attacks .. ”

    1. Shutterbuggery

      “Stockton said the security breach was the “worst we’ve ever seen.”

      As long as whistleblowers go into solitary confinement, its also probably the LAST you’ll ever hear about too.

        1. Aquifer

          Somehow i got the impression that SB wasn’t suggesting that that security breach was the last that would ever happen, just the last we would ever hear about …

          1. Up the Ante

            That’s an OK impression, but the topic of whistleblowers is a bit tangential.

            Perhaps a redirect is needed. The FBI has agents assigned to at least some nuclear reactors in the U.S., don’t know if they do at the weapons labs but they may have to to keep an eye on the reverse engineering antics of British security firms. Maximizing profits in an international context could prove to be ulitmately costly.

  10. Up the Ante

    The Portrayal of Differences

    the Chinese ‘can do’ this, yet the Japanese could not evacuate the radiation prefectures ?

    “China evacuated 867,000 people after tropical storms Saola and Damrey hit coastal regions, bringing strong winds and rainstorms, Xinhua News Agency reported, ”

    How far inland did japan’s 2011 tsunami go?

    “.. the 33ft (10m) Tsunami wave .. made it 6 miles (10 kilometers) inland with washed up debris and water reaching distances of 10 miles or more inland.
    .. the city of Sendai was 80 miles (128 km) from epicenter ”'s_2011_tsunami_go

    1. Yves Smith Post author

      Go look at a topographic map of Japan. Only 15% is arable land. When you exclude Hokkaido, there is not a lot of land you can move people to in an emergency. Tell me where the 35 million people how live in Tokyo should go?

      1. Up the Ante

        “Tell me where the 35 million people how live in Tokyo should go? ”

        A very good question to consider well before ringing Tokyo in multitudes of reactors, some built on fault lines.

        They can always go full steam ahead and pretend they didn’t ring Tokyo .. and being so completely locked into their corporate govt. model makes Immelt’s statement on the technology being too costly unlikely to be made by a Japanese politician who can make it happen.

        So that brings it back to the world watching what the Japanese are going to do to themselves.

  11. MyLessThanPrimeBeef

    Bilingualism and mental agility.


    If you had to choose only one language to speak your whole life at birth, which language would make you the most mental agile?

    1. Susan the other

      a visual language, like mandarin, with a pictogram alphabet and lexicon because then I would have to get agile and change my whole mental process from my left brain to my right brain

    1. MyLessThanPrimeBeef

      You would think those banksters would want to keep the cash machines going a bit longer…

  12. F. Beard

    re Why sales of stamps flourish in tough times :

    Short answer: Even monetarily sovereign governments like the UK think they have to balance their budgets. Thus they tend to raise taxes and fees in a recession/Depression! Buying stamps is thus a way to “front run” the increase in postage fees – to front-run government economic stupidity.

    I’m glad I got my ticket off this planet or at least am striving for it.

  13. Susan the other

    Cliodynamics. “Social unrest occurs when labor outstrips demand.” Just exactly how does that happen? What we need, have always needed, is a high percentage of low-productivity jobs (so as not to cause “inflation” – whatever inflation actually is, and these jobs need to be of high social value, i.e. scientists, teachers, organic farmers, community workers, municipal workers, medical professionals, NASA professionals, physics, chemistry, biology – you name it as long as it is not pirate capitalism. Pirate capitalism is a thing of the past. We, only and individually, don’t even see it. We’re like the cargo-cult islanders waiting for the market to come back.

  14. Susan the other

    One more thing: “Debauched RMBS” Credit Spectrum. What a fucking crock. It should have been titled Failed Stealth Commoditization. Or Clumsy Robbery. Or Point of Total Bullshit Continues. This “problem” is not 40 years old, it is at least 3000 years old. It’s called Fraud. Not “lagging ratings” that couldn’t keep up with the wonderful innovations…. excuse me while I vomit. Our paralysis has nothing to do with risk going up as the pool goes down. And how can any of this shit ever be “resecuritized” without clearing the former, underlying securitization – they are mortgages for god’s sake. Hello “title-deed problem.”

      1. Up the Ante

        “If the ratings don’t keep up with these changes, they will understate value and risk. .. When you do this with a static rating model that was created for corporates, not structured, and uses only the rating as a risk input, i.e., the CDO model, you bury the performance signal. This was done over and over again. .. However, the problem of lagging ratings has never been taken seriously in the corridors of power. ”

        Since lagging ratings is the ultimate green light for fraud, they took it seriously, hey ?

        1. Up the Ante

          Yves’ “concrete evidence of fraud.” is that the SEC did not fix lagging ratings after 2008.

          The SEC is LITERALLY an insider trading corporation, a clearinghouse for FRAUD.

    1. Yves Smith Post author

      No, you are confusing two different issues.

      What Rutledge is saying is actually very important, but instead you piss all over it. This by the way is one of the reasons nothing gets prosecuted, is the intolerance of the general public for anything other than very simple narratives.

      She is saying that the in many cases, the tranches of RMBS that were sold into CDOs weren’t brand new, but had some payment history, even if only the first month or two on the underlying mortgages. And if you punched that into the CDO model (which the originators presumably did), you’d see CDO tranches worth zero that they sold for real money.

      That is concrete evidence of fraud.

      1. Paul Tioxon

        Yes, one or two months payment history. It is called seasoning. If you could not get enough loans through the pipeline due to actual underwriting standards, and if you could not hit your monthly sales numbers, during the last few days of the month, an EVP would tour the branch offices and approve loans to be closed in the company name and be held for seasoning before being sold. Of course, all of the initial payments were reported on time payment, meaning on time or not beyond the grace period of 5-10 days. The yield spread premium on the back end was astronomical depending on the closing date and the market pricing for that date. Seasoned loans would be sandbagged to ensure max Yield Spread Premium (YSP) and thrown in with the other crap that actually passed muster. Fraud, Fraud and more Fraud. And that doesn’t count the magic of white out or blank W-2 forms bought by the case at Staples at the branch level of originators. Thanks Mitt for locating so many of those stores close to the neighborhood mortgage factory.

    2. moriarty

      and the great thing about CDOs is that when your sample is sparse, the i.i.d. assumption does wonders for your plausible deniability. The muppet is buying a cashflow stream buffered by ever-so-many poisson-distributed defaults, under the overwhelming closed form greek letter-y logic of the valuation model. Some hapless Raisin-in-the-Sun homeowner always pays up for a while, boosting the variance enough to push your valuation above jack shit point zero zero. Prosecutors cannot comprehend this. If they had the numeracy to grasp it they would have gone to work for investment banks but let’s be frank, they are not the sharpest knives in the drawer. Chris Christie. Nuff said.

  15. spooz

    Wudda you know, ZH posted a political piece that is not Mises propaganda. “Bearish blogger” Tim Knight’s review of Chris Hedges’ new book “Days of Destruction, Days of Revolt”. A quote from Hedges book included therein:

    “Either you join the revolt or you stand on the wrong side of history. You either obstruct through civil disobedience, the only way left to us, the plundering by the criminal class on Wall Street, and accelerated destruction of the ecosystem that sustains the human species, or become the passive enabler of a monstrous evil. You either taste, feel, and smell the intoxication of freedom and revolt, or sink into the miasma of despair and apathy. You are either a rebel or a slave.”

  16. Shyster Sister

    About soda pops,

    Our pre-agricultural ancestors drank water so that’s what our brain interprets all liquids as. Because evolution hasn’t caught up with the invention called soda pop, we don’t get a sated signal when we drink it. Our stomach will still extract energy from everything going down the gullet, but beyond that very temporary feeling of fullness as liquids flows through our stomach we don’t feel sated. In theory we could live on drinks, in practice it’s impossible.

    A lot of people don’t realize this, and on an intuitive level they are fooled by nature into viewing soda pop as a form of water. Cue people essentially drinking meals on top of the solid meals and it’s no wonder so many are overweight.

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