Links 4/5/13

Diversity programs give illusion of corporate fairness, psychologists find ScienceDaily (Chuck L)

Ban pesticides to save bees, say MPs BBC

Withering drought still plaguing half of America Grist

Apple’s iMessage Encryption Too Tough for FBI Mac Observer (scraping_by)

The death of peak oil Jim Hamilton, Econbrowser

Japan declares open currency war MacroBusiness

Obama Avoids Trading Threats With North Korea’s Kim Bloomberg. This all seems to be a lead-up to a presumed new missile test on April 15.

China ‘losing patience’ with North Korea Telegraph

Putsch: Iceland‘s crowd-sourced constitution killed by parliament VerfassungsBlog (Deontos)

HBOS: former bosses should be banned from financial sector, says commission Telegraph. See here for context: The Worst Bank in the World? HBOS’s Calamitous Seven Year Life Ian Fraser (Richard Smith)

‘An accident waiting to happen’: The failure of HBOS Parliamentary Commission on Banking Standards

What makes the French so unhappy? Financial Times. This is not hard! Happy people are not discerning.

ACLU Report Exposes Debtors’ Prison Practices in Ohio ACLU (Deontos)

New York fast-food staff go on strike Guardian

Abolish the 401(k) Salon

Analysis: Big inflows into bonds undercut the “Great Rotation” Reuters

Bitcoin makes journalists say stupid things Nemo

Divorced, Never Separated New York Magazine (Deontos). If you want the prurient background on the Steve Cohen divorce case….

Unfit To Report Mark Ames, NSFW. On Planet Money’s disgracefully inaccurate piece on Social Security disability.

Ex-Thomson Reuters Employee Claims Insider Survey Leaks Bloomberg

Repercussions from Rakoff ruling in Dexia MBS case vs JPMorgan? Alison Frankel (Deontos)

Will bankers’ court wins come back to haunt them? Bloomberg

Treasury Needs a Tough No. 2 Simon Johnson, New York Times

MF Global report blames Corzine Financial Times. I’m only about half way through the report, but it appears to have completely missed the significance of the actual funding mismatch in the repo to maturity trade. And the media accounts, although predictably breathless, don’t contain anything that has not been previously published. You’ll be hearing from me on Monday.

Roger Ebert: stimulating, authoritative critic with formidable internet presence Guardian

Antidote du jour:

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  1. diptherio

    I sent this link to video of the Mayflower, Arkansas oil spill to a retired DOT Pipeline Safety engineer I know. Here’s his response. Juicy stuff, enjoy:

    Interesting where the leak occurred next to a transformer and phone box or at least it appears that way. Possible ground fault. Exxon should have seen this potential and corrected it if this was the case. You don’t place transformers over the top of steel structures, it is a sure invite to disaster.

    Another thing is interesting is that people didn’t know that this pipeline existed under their neighborhood. Either Exxon was not following Federal requirements to inform all populations within a certain distance from the line, or people did not understand.

    Third is that this pipeline reversed flow sometime back so I am guessing it would have had to been pressure tested and that would have required the neighborhood to have been evacuated at Exxon’s expense. Wonder if that happened?

    This line is in a High Consequence Area (HCA) and therefore should have had a defect detection tool (ILI) run down it at a much higher frequency than segments not within an HCA. Have there ever been any anomalies at this location and if so were they repaired and were preventative actions taken to correct the problem? Has internal corrosion ever been an issue?

    Had Exxon ever considered moving this segment of line after the subdivision was built over it and if not why? In my estimation this line should have been moved if at all possible. Large transmission lines have no business being under subdivisions.

    This is a bad deal and my guess is it will have very negative effects on the ability of Keystone XL to get approved. Now there is no one to blame but the oil industry itself if the Keystone line does not get approved, maybe it was divine providence.

    I should also say something else about the location of this line, inside a subdivision. The line has been there for many decades. The subdivision looks pretty new.

    One of my pet peeves is counties that allow developers to develop subdivisions to be built over the top of utility transmission corridors for oil, gas or power. This is really a bad mix. When a transmission pipeline runs through a subdivision it is at a much higher risk of damage or failure. Because of people activity the pipeline has a much higher probability of damage from third parties doing excavation for whatever purposes and damage from potential electrical interference from underground power lines, to name a few. Pipeline companies need to be a lot more proactive in stopping these subdivisions But often I have seen them shy away because developers try to paint them as the all powerful oil industry telling them what they can do. Developers stand to lose a lot of money if they cannot get there subdivisions built. But sometimes you have to take the lumps to protect the people, the environment and the asset.

    [Disclaimer: this engineer supports the Keystone XL pipeline, since currently tar sands oil is being trucked south which is “killing rural ND and Montana.” His view is that a pipeline is safer than trucking and if the oil is going to be being transported anyway, it should be done in the safest manner possible.]

    1. Paul Tioxon


      “On May 31, 1889, a neglected dam and a phenomenal storm led to a catastrophe in which 2,209 people died.

      Yet no city, county, or state legislation was enacted to protect people from similar disasters in the future. Suits were filed against the members of the South Fork Fishing and Hunting Club, but in keeping with the times, the courts viewed the dam break as an act of God, and no legal compensation was made to the survivors.

      The city would continue to suffer nuisance floods, with water in the streets and in people’s basements especially in the spring of the year. It would be another 47 years, and not until more property was destroyed and more lives lost, until some constructive efforts were made to control the waters that flowed through Johnstown.”
      The neglected dam used to be tended to, just so such a disaster would not happen. The death toll rivals the 9/11 attacks. Yet the no response, as indicated, for 47 years, by government authorities to prevent such flooding waters from returning at any level, much less catastrophic. We are on our own. DIY, if you can get a law, or some publicly controlled NGO with authority, great, all the better, but most social and state institutions have been, and continue to be dominated by interests of the powerful for the maintenance of their wealth and power. Every now and then, there can be a mutually beneficial coinciding of interest, that results in laws and protection for all, but not most of the time. The oil companies have no regard for our health or safety and best we go to all electric everything and get off of fossil fuels, even if only in small steps now.

  2. Inverness (@Inverness)

    Couldn’t get beyond the FT paywall, but concerning the French…

    French people often won’t say they are satisfied on surveys, because it implies there’s no room for improvement. This is what my French friends tell me, who claim that French dissatisfaction is over-reported (a recent obsession for Le Monde, at least).

    So, this might have more to do with the approach to filling out surveys, than anything else. For examples, managers are sometimes evaluated by workers who work under them. Why wouldn’t they emphasize what’s wrong, if it could mean improved work conditions? And this tendency be generalized in French culture.

    1. William C

      I think there is a tendency to hypercriticism in French culture. I had a French grandmother and according to her I could never do anything right.

      1. sufferinsuccotash, moocher

        Another term for “hypercriticism” is “Enlightenment”.
        It’s Voltaire being hypercritical of the Parlement of Toulouse for condemning a Protestant to be broken on the wheel on a trumped-up charge of murdering his son.
        That’s hypercriticism I can believe in.

        1. MyLessThanPrimeBeef

          Not to be outdone by the infidel Parlement of Toulouse, a court in Saudi Arabia is condemning a man to paralysis.

  3. William

    Don’t be too secure in thinking iMessage is going to keep your communication private. The FBI can simply store them all until technology catches up–in short order no doubt.

    1. indices

      And would anyone really be surprised if as many backdoors are built into Apple appliances as were attributed to Microsoft and our good friends the Chinese?

  4. fresno dan

    MF Global report blames Corzine Financial Times

    and despite Sarbanes-Oxley, Dodd-Frank, and who knows how many total finanicial laws, somehow, someway, the DoJ will be unable (unwilling) to find a single statute that was broken…
    Wait…wasn’t Cornholeusine a member of the Senate when both those laws were passed…Oh, just Sarbanes Oxley.
    OK than – no secret conspiracy to not prosecute fraudulent financiers….its right out in the OPEN.

  5. Garrett Pace

    Roger Ebert struck me as a very bright guy with a broad cultural awareness and (Vincent Gallo aside) a warm and tolerant humanity.

    Even when I disagreed with his conclusions I found his essays thought provoking.

  6. rich

    As economy flails, debtors’ prisons thrive

    Ask Jack Dawley, 55, an unemployed man in Ohio who between 2007 and 2012 spent a total of 16 days in jail in a Huron County lock-up for failing to pay roughly $1,500 in legal fines he’d incurred in the 1990s. The fines stemmed from Dawley’s convictions for driving under the influence and other offenses. After his release from a Wisconsin correctional facility, Dawley, who admits he had struggled with drugs and alcohol, got clean. But if he put his substance problems behind him, Dawley’s couldn’t outrun his debts.

    Struggling to find a job and dealing with the effects of a back injury, he fell behind on repayments to the municipal court in Norwalk, Ohio. He was arrested six years ago and sent to jail for not paying his original court fines. Although Dawley was put on a monthly payment plan, during his latest stint behind bars in 2012 the court ordered him to pay off his entire remaining debt.

    ” I called my brother, and they told him I have to pay off the whole fine in order for me to get out,” he said. “That was $900. So I sat my whole 10 days [in jail.]”

    Such stories are by no means unusual. Rather, they reflect a justice system that in effect criminalizes poverty. “It’s a growing problem nationally, particularly because of the economic crisis,” said Inimai Chettiar, director of the justice program at New York University School of Law’s Brennan Center for Justice.

    Roughly a third of U.S. states today jail people for not paying off their debts, from court-related fines and fees to credit card and car loans, according to the American Civil Liberties Union. Such practices contravene a 1983 United States Supreme Court ruling that they violate the Constitutions’s Equal Protection Clause.

    Some states apply “poverty penalties,” such as late fees, payment plan fees and interest, when people are unable to pay all their debts at once. Alabama charges a 30 percent collection fee, for instance, while Florida allows private debt collectors to add a 40 percent surcharge on the original debt. Some Florida counties also use so-called collection courts, where debtors can be jailed but have no right to a public defender. In North Carolina, people are charged for using a public defender, so poor defendants who can’t afford such costs may be forced to forgo legal counsel.

    1. Sufferin'Succotash

      Somewhere Charles Dickens must be laughing his ass off at the “last best hope of mankind” still stuck in 18th century legal procedures for handling indebtedness.

  7. Jim Haygood

    From ‘Death of peak oil’:

    ‘But Texas production in 2012 was still 1.4 mb/d below the state’s peak production in 1970, and I haven’t heard anyone suggest that Texas is ever going to get close again to 1970 levels.’

    DUH — I reckon not! Oil fields have a finite life — anywhere from a few years to a century. Exploration is all about replacing aging fields with new ones. Catch that fleeing straw man!

    Even if Peak Oil still has some validity, new and unexpected energy supply from shale gas surely has delayed it by years, if not decades:

    The international shale gas resource base is vast. The initial estimate of technically recoverable shale gas resources in the 32 countries examined is 5,760 trillion cubic feet. Adding the U.S. estimate of 862 trillion cubic feet results in a total shale resource base estimate of 6,622 trillion cubic feet for the United States and the other 32 countries assessed.

    To put this shale gas resource estimate in some perspective, world proven reserves of natural gas as of 2010 are about 6,609 trillion cubic feet. Adding the identified shale gas resources to other gas resources increases total world technically recoverable gas resources by over 40 percent to 22,600 trillion cubic feet.

    In his book Shale Gas: The Promise and the Peril, Vikram Rao claims that New York’s Marcellus Shale could make New York the largest energy producing state in the country — bigger than Texas, Alaska, North Dakota — should the state’s fracking moratorium ever be lifted.

    Rao does not discount the environmental risks. That hydraulic fracturing can produce earthquakes is both logical and well documented.

    But why is it that most U.S. states have accepted these risks, while New York hasn’t? One likely reason is that the elite knowledge workers of the wealthy NYC conurbation, with the majority of the state’s population, are prospering in the post-industrial information economy. They are quite content for their ‘apple-knocker’ upstate cousins to continue as hewers of wood, drawers of water, and guards of prisoners in their cute historical villages that haven’t changed since the 1920s. Thanks, comrades!

    1. YankeeFrank

      Why do you come on this site daily and spew distortions and half-truths? NC has avoided such trollery for some time, but apparently not anymore. The reason New Yorkers are fighting against the shale gas boondoggle is that it is an environmental destroyer — not just the earthquake issue. You conveniently ignore the way shale gas wells destroy ground water and pollute streams and rivers… forever. And this is not just a rural issue — as if that wouldn’t be enough — but it also will affect the entirety of New York City. Where do you think NYC gets its drinking water?

      People like you would be happy to “solve” our energy problems by destroying our environment. But it solves nothing, and gives us energy by taking away the life-source that is clean water. Everywhere the 400+ toxic chemicals used in fracking have been pumped into the ground in massive quantities animals and people have been poisoned and their wells destroyed.

      Go spew your poison on a freeper site where they will actually buy your specious “arguments”.

      1. Jim Haygood

        Nice rant, Frank.

        Maybe you noticed that I provided a link to a 365-page government study, and referenced a book about shale gas whose title includes the word ‘Perils.‘ The author in no way denies environmental impacts from fracking.

        Did my insinuations about downstate elitism hit a little too close to home? Try draping a cloth over your mirror, and you’ll feel much better.

        1. Nathanael

          Rao’s hyping. Shale gas wells in the Marcellus basically run out after 5 years. It’s basically worthless to drill.

          The exploration companies actually KNOW this; their business model is to drill the wells, announce first-year production and then SELL SELL SELL to some sucker who doesn’t realize the steep decline rate of the wells. Cheseapeake et al. have been making good money with this land-flipping scheme, but it has jack-all to do with actual fossil fuel extraction.

          1. skippy

            You would think Jim would understand the term **Malinvestment** as it comes from his beloved tomb of thunkit. As you point out… the hole exercise is just to create some – market paper – to play with…

            Skippy… Dried pulp w/ink or its modern form, electrons – photons of writ is worth more than human lives, any living thing, but, more importantly… future potential.

            PS. Funny thing… hydraulic mining was seen as a “a public and private nuisance” in 1884, they’ve just gone sight unseen (sequestered underground) this time around.

            Legal consequences

            Vast areas of farmland in the Sacramento Valley were deeply buried by the mining sediment. Frequently devastated by flood waters, farmers demanded an end to hydraulic mining. In the most renowned legal fight of farmers against miners, the farmers sued the hydraulic mining operations and the landmark case of Edwards Woodruff v. North Bloomfield Mining and Gravel Company made its way to the United States District Court in San Francisco where Judge Lorenzo Sawyer decided in favor of the farmers in 1884, declaring that hydraulic mining was “a public and private nuisance” and enjoining its operation in areas tributary to navigable streams and rivers. Hydraulic mining was recommenced after 1893 when the United States Congress passed the Camminetti Act which allowed such mining if sediment detention structures were constructed. This led to a number of operations above brush dams and log crib dams. Most of the water-delivery infrastructure had been destroyed by an 1891 flood, so this later stage of mining was carried on at a much smaller scale in California. – wiki

    2. MyLessThanPrimeBeef

      Delaying by years and decades…

      Jim, in Zen, there is a saying, beyond a peak, there is another peak.

    3. Nathanael

      You’re a moron, Jim. I live in one of those upstate NY cities, and we’re more modern than you think. And we don’t need our clean water poisoned, thank you very much.

      By the way, peak oil really means “peak cheap oil”, and always has. We’ve already passed peak cheap oil, some time back. From now on, it’s either increasing prices or decreasing production, and we’re already witnessing that.

      Switch your household off of oil if you want to avoid the price trend.

      Peak methane will take a bit longer.

      1. J Sterling

        Those charts of ramping crude oil and total liquids production amount to 1.1% p.a. and 1.5% p.a. respectively, in a world whose population is growing at 1.3% p.a.

        And the new production is coming from sources that until recently were not considered fit for exploitation (they were “reserve”, whenever oil rights owners talk about their reserves, they’re talking about resources they can’t make money on now; they expect to make money on them when the price goes up in future).

        There’s no magic new technology involved in the new extraction, only the rising price of fuel.

  8. sd

    Link does not work

    Putsch: Iceland‘s crowd-sourced constitution killed by parliament VerfassungsBlog (Deontos)

    Does the article explain that it was a back door deal between Iceland’s four largest political parties? The constitution would have made MPs accountable to the citizens. The deal was exposed by Birgitta writing about it on her facebook page.

  9. JGordon

    Pretty interesting that you all keep linking to stories that are little more than easily debunked wishful thinking and lies on some subjects.

    For example, “peak oil”.

    I tell you every single time I see an article you post on the subject here that the article is seriously misrepresenting what peak oil is, but it seems like you all have a case of invincible ignorance going. Anyway, I’ll try again to remedy your the ignorance:

    Peak oil is not about running out of oil. It is about energy extracted versus energy input. I know a lot of people here are extremely ignorant about the laws of thermodynamics, and science in general, which seems to be incredibly common among people who fancy themselves economists, but lets hope something as basic as this can eventually penetrate the fog of confusion you all are under.

    1. Yves Smith Post author

      I’ve put up plenty of pro peak oil links. I’m putting up Hamilton simply because he’s taken seriously in econ circles as a commentator on oil, specifically. I also sometime link to certain articles I disagree with because they are getting a lot of news traction.

      If you want to argue with Hamilton, you need to do so on his site. Carrying on here is not productive.

      1. JGordon

        I see–I’m sorry. I must have missed the pro-peak oil articles. Althogh to be perfectly clear, this is not an article about peak oil despite the title since peak oil and what the author of that article are talking about are two different things.

        1. Max424

          It ain’t all bad, JG. Jeffrey J. Brown darts around the comment section using FACTS to blow holes through the … um … well, it wasn’t exactly an intelligible argument, was it.

          And I don’t think you could even give it the dignity of calling it a non-researched, sloppily presented theorem, either. It was more like Hamilton lazily turned a well worn nob and produced some very welcome investor static.

          Basically, Brown blew gaping fact based holes through a monotonous buzzing sound, is what it comes down to.

          So, if you you look at the blog post in total, which I believe should always be thought of as, article plus comments, then I think it would be fair to say that on the whole the post was, at least, 99.999% pro-Peak Oil.

    1. MyLessThanPrimeBeef

      At our Urasenke school of chado, or sado, if you prefer that pronouciation, we like organic matcha.

      It has always been that way since the days of Sen no Rikyu, before he was ordered to kill himself by the Shogun, because it was next to impossible to get toxic, sorry, non-organic matcha.

      So, it’s always been organic tea parties (i.e. organic chakai) for us.

    1. MyLessThanPrimeBeef

      This will become increasingly common in the next few hundred years until the complete takeover, make it, until we complete the transition: “I hope my kid will grow up to become a robot!”

  10. MyLessThanPrimeBeef

    NY fast-food staff on strike.

    Another way to protest, possibly lasting longer and less costly to the workers, is to engage in work slowdown for fast-food workers.

    Cook that burger in 5 minutes in slow fire instead of 3 seconds. Make it slow-food.

  11. Zachary Smith

    *** Obama Avoids Trading Threats With North Korea’s Kim ***

    After reading the link story I was relieved to learn the new missile test is of one with a very short range. If NK sends up another satellite any time soon, IMO some serious consideration ought to be given to causing it to collide with some “space debris” somewhere around the South Pole portion of its orbit.

    1. MyLessThanPrimeBeef

      He also avoids trading threats with Republicans, except seniors living on Social Security.

  12. brian

    Can you address the This American Life/Planet Money disability story? To me it just revealed the crushing depravation of entire communities. I found it very sympathetic. It alos revealed how the government stats are fudged.
    Look at the unemployment stats for today today. The media is reporting a 88,000 drop in unemployment, but they aren’t reporting a 150,000 increase in the disability rolls (IIRC from the story that is the increase in disability enrollment per month).
    It seems pretty obvious that Reagan/Bush/Clinton/Bush/Obama have used disability to hide the overall increase in unemployment over the last thirty years. This is the message i got out of the This American Life story.
    The critique in the link above is not very good. It attacks the story by providing links to other websites and then through an ad hominem on the reporters (although I have never liked Adam Davidson after his infamous interview of Elizabeth Warren).
    Any thoughts?

    1. nobody

      Here’s another critique of the Planet Money piece on disability.

      Joffee-Walt fails to address the biggest fact in the room, that disability is a social construction even more than a medical category, and in turn the artificial architectural and physical constraints marshaled against people with disabilities are both products of history and the industrial revolution. One wishes she had bothered to read Lennard J. Davis’ essay “Constructing Normalcy: The Bell Curve, the Novel, and the Invention of the Disabled Body in the Nineteenth Century”. Disability is entirely economic and has been so since the move to industrial models of labor. Those who cannot work in the factory were labeled “disabled” and that model of human economic utility largely continues to this day. Reasonable accommodations are the solution for workers whose physical capacities decline but as any seasoned person with a disability who has managed to remain in the workforce knows, obtaining accommodations is often so difficult, so humiliating, so Kafka-esque, most people give up. 70% of the blind remain unemployed in the United States, many of whom might well be able to work with the proper accommodations but employers don’t want to provide accommodations fearing the expense, though in point of fact most workplace accommodations are relatively inexpensive.

  13. Valissa

    A interesting review of the movie “The Gatekeepers”

    Israel: Gatekeepers of Self-Destruction?
    When six former heads of Shin Bet, Israel’s secretive internal security service, make themselves available for extensive on-the-record, on-camera interviews, it is clear that something major is afoot. After all, the individuals interviewed served different political masters, and it is certainly not part of their professional tradition to be talkative. …

    What prompted the six Shin Bet heads to talk and talk so loudly and clearly about their past activities and the evident lack of a proper strategy on the part of their nation’s politicians?

    It stands to reason that it was sheer frustration. If they had not seen Israel as potentially on the road to self-destruction, they would be unlikely to have chosen to speak out at this juncture.

    The Gatekeepers – US screenings
    The Gatekeepers – Int’l screenings

    1. Inverness (@Inverness)

      I’m with you. “The Gatekeepers” is required viewing. If only all Israelis, Americans, and Stephen Harper saw it. There’s nothing like seeing members of Israeli intelligence exposing the futility and cruelty of occupation.

      1. Valissa

        Have you seen it yet? It’s playing several places in the Boston area and I’m planning on seeing it next weekend.

  14. Valissa

    First American Laughing Championship Guffaws April 6 In San Diego
    The Association for Applied and Therapeutic Humor

    The Pixar Sequel No One Wants

    The latest in kayfabe… T-Shirt Of The Day

    Thousands Of Eggs Pushed Out Of Nests After Birds Legalize Abortion,31951/

  15. mookie

    I noticed that the Mark Ames story unlock has expired, so I unlocked it through my nsfwcorp account. This link will be good for the next 48 hours:
    Unfit To Report Mark Ames, NSFW

    …So, as the financial lobby and the DC political class close in for the kill on your Social Security, you should be aware that Planet Money, This American Life and NPR are key players on the left flank of the bankers’ propaganda war. If you’re one of their listeners or donors, you’re a target. Welcome to what passes for the “liberal” media.

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