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“When a woman thinks that her house is on fire, her instinct is at once to rush to the thing which she values most. It is a perfectly overpowering impulse, and I have more than once taken advantage of it... A married woman grabs at her baby; an unmarried one reaches for her jewel-box.”

When a central bank thinks its house is on fire, it too will rush to save the thing valued most. In the United States, the central bank has rushed to save the bonuses and dividends of its Wall Street clientele by hiding away the bad assets that can no longer be foisted on gullible investors. In Europe too the response of central banks has been to save the wholesale banking and securities industry rather than the consumers and businesses underlying the real economy’s longer term productive strength.

For a comparative of what is valued elsewhere, it is worthwhile to look at what is being saved. I received in my inbox yesterday documents outlining the efforts being taken by the Hong Kong and Chinese authorities to address the liquidity crisis in their respective jurisdictions. They are available online here (Hong Kong) and here (PRC). The contrasts with the West are striking, and humbling.

Hong Kong is swiftly introducing a scheme to guarantee credit to SMEs (small and medium enterprises) and exporters. China is introducing controls to limit bank credit to over-extended speculative sectors, accelerate rebuilding in the regions affected by the earthquake earlier this year, and promote improvements in local infrastructure, education and economic adjustment.

Holmes would have been disgusted by a married woman who grabbed her jewel-box in preference to her baby. In the same way, I am disgusted by the central banks preserving the privileges of the financial elite in preference to the jobs, incomes and businesses powering the real economy. The US and UK authorities may criticise the banks for their inaction in freeing up lending to commercial businesses constrained by the credit crunch. The Hong Kong and Chinese authorities are implementing guarantee schemes and innovating initiatives to rapidly address the problem.

As Holmes would have considered a child’s life worth more than jewels, I consider the workers and businesses in the real economy as meriting greater protection than the financial elite. It is not merely that I think the financial elite little better than criminals for their irresponsible excesses of recent years, but that I fear long term harm and political instability will come from neglecting the needs of the real economy.

As one who holds rather radical views on health and illness, the only surprise to me is that this wasn't 'discovered' years earlier...

Cancer researchers have known for years that it was possible in rare cases for some cancers to go away on their own. There were occasional instances of melanomas and kidney cancers that just vanished. And neuroblastoma, a very rare childhood tumor, can go away without treatment.

But these were mostly seen as oddities — an unusual pediatric cancer that might not bear on common cancers of adults, a smattering of case reports of spontaneous cures. And since almost every cancer that is detected is treated, it seemed impossible even to ask what would happen if cancers were left alone.

Now, though, researchers say they have found a situation in Norway that has let them ask that question about breast cancer. And their new study, to be published Tuesday in The Archives of Internal Medicine, suggests that even invasive cancers may sometimes go away without treatment and in larger numbers than anyone ever believed.

Gee, who could have possibly imagined that blasting people with highly toxic treatments as soon as possible might not always be the best approach to treating cancer?

LONDON (Reuters) - The global financial crisis could have been avoided if every country had had a banking system like Canada's, the governor of the Bank of Canada said on Saturday.

Asked in a BBC interview if the world could have been spared the crisis if everyone had had a banking system "as sober and sensible" as Canada's, Mark Carney said: "Yes, I think, is the short answer."

"What we did was that we had an absolute restriction on how much leverage, how much borrowing our banks could do," he said.

"They didn't like that and they would come in and complain about it regularly because it was stopping them from doing some of the sexier things that their international competitors were doing. But it turns out some of the sexier things that they were doing were quite foolish," he told the BBC World Service.

Canada has the soundest banking system in the world, according to the World Economic Forum.

In even simpler terms, Canada was one of the few countries around the world which resisted pressure to allow its banks to lend (and risk) significantly more capital than they had in reserve. And the fact is that the banks themselves were not the only ones exerting pressure on the government to ease restrictions...

According to Paul Martin (Canadian P.M. and former finance minister), the banks were not the only ones complaining. At every G8 and Finance Minister's meeting the U.S. and British would push strongly for Canada to open (i.e. de-regulate) it's financial and banking systems so as to be more in line with theirs. Martin's (and the governments) resistance to these pressures along with their no-deficit policy is why we're in relatively good financial shape.

You are what you eat, and so are your progeny and, perhaps, your progeny's progeny — at least, if you're a mouse.

According to research presented at the Society for Neuroscience's 38th annual meeting in Washington DC held from 15–19 November, mice fed on a high-fat diet throughout their pregnancies and suckling had offspring that were larger than normal — a trait that was also passed on to their offspring's offspring.

It is the first time that a gestating mother's diet has been shown to confer this trait on to two consecutive generations.

The work is part of a larger study being conducted by neuroscientist Tracy Bale and her colleagues at the University of Pennsylvania in Philadelphia. "We wanted to know if the current increase in rates of obesity we are seeing all over the United States could have a longer-term impact," says Bale.

The mice descended from mothers on the high-fat diet were about 20% heavier than those descended from mothers kept on normal food. They were not much fatter, but they were significantly longer. They also tended to overeat, whether or not they themselves were on a high-fat or normal diet. And they were insulin-insensitive, a feature of diabetes that frequently leads to obesity.

Their own offspring — the second generation after the mothers on a fatty diet — did not overeat, but were large and insulin-insensitive. These traits were not just inherited through the female line: male pups born to mothers on a high-fat diet also transmitted them to their own offspring.

The key...which is critical to understanding the deflationary liquidity trap, is that it is created by massive debt and overleverage in the economy, something that is only possible under a fiat currency fractional reserve monetary system, and only existed really in the late 1920's and from 1998-2007. When overleverage turns to deleveraging and deleveraging is not stopped to the point that deflation becomes entrenched, it is nearly impossible to stop a global depression from emerging. There is no incidence of a deflationary liquidity trap under a gold standard, or even under a fiat system in the absence of massive overleverage and debt. Positive deflation, the kind where productivity is exploding faster than money creation like when the computer price plummets, is a mainstay of a gold standard, and is most common in the fastest growth periods in history. Negative deflation can only happen when a bubble of debt unwinds. A deflationary liquidity trap is a government construct therefore - it happens when a fiat currency produces long-term debt/GDP levels that are unsustainable and then something triggers asset price declines that knock the house of cards down.

Charlie Rose interviews Bill Ackman of Pershing Square Capital Management, who artliculates some of what has happened in the economy very well, and even provides a (relative) dose of optimism towards the end

To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.

I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.

When I sat down to write my account of the experience in 1989—Liar’s Poker, it was called—it was in the spirit of a young man who thought he was getting out while the getting was good. I was merely scribbling down a message on my way out and stuffing it into a bottle for those who would pass through these parts in the far distant future.

Unless some insider got all of this down on paper, I figured, no future human would believe that it happened.

I have a strong sensitivity to certain aromachemicals, like musk," says Christopher Brosius. "The aldehydes in Chanel No. 5 make me puke." And that is unfortunate, he continues, because the Polish ladies here in Williamsburg wear so much of it.

Christopher is the perfumer behind CB I Hate Perfume Gallery, a small shop on a street that runs parallel to New York's East River. I've visited often in the years since I first wandered in and overheard the owner describing his philosophy: that great fragrances are unimposing and genderless, and they should harmonise with a person's natural odour. Christopher ("Never call him 'Chris'", his assistant once whispered) is a theatrical presence, possessing a wry wit and a spring-loaded arch to his brow. He speaks to me between sips from a container labelled Muscle Milk, as Zephyr, his mastiff, rests his enormous head on my knee.

The shop's exposed wooden beams and minimalist decor give it the air of an austere cabin. Three hundred miniature laboratory vials populate white shelves. Inside the bottles are accords, the aromatic building-blocks with which one can--for $125 to upwards of $1,200--collaborate with Christopher to construct one's own custom scent. The vials of single notes, which can be had individually for around $25, carry hand-scrawled names like "Rhubarb Leaf", "Papaya Seed", "Celo Tape" and "Crayon".
The inventory is huge, partly because Christopher is compulsive about bottling pleasant aromas, and partly because his clients have such varied and specific tastes. But people often have trouble articulating what smells they like. "It's an extraordinarily revealing thing to admit," he explains. "They tend to say, 'Oh... flowers.'"

Gorgeous fragrances often contain notes of something nasty, it turns out. Even the daintiest jasmine perfumes contain indole, which Christopher likens to the smell of dead mice. (Indole is "probably the most unfairly maligned molecule on earth", writes Luca Turin in "The Secret of Scent".)

A client once told Christopher how she loved the scent that wafted from her summer home's air conditioner after it had been out of use all winter. After some experimenting, Christopher hit upon what the woman found so appealing: mildew. Now that scent lends a fusty bite to his otherwise bright-smelling Locker-room accord.

Pure amber, which is distilled from tree resin, can smell "almost slightly pissy", in Christopher's words--but he insists that when it's used correctly it is quite alluring. "Americans have this idea that everything needs to smell clean, clean, clean", he laments, with a shake of his head. He counters the trend for sanitised fragrances with creations like Wild Hunt, which is full of delightful earthy notes, including (according to his literature) "torn leaves, crushed twigs, flowing sap, fallen branches, old leaves, green moss, fir, pine and tiny mushrooms".

The most honest rejection letter I ever received for a piece of writing was from Oregon Coast Magazine, to which I had sent a piece that was half bucolic travelogue and half blistering attack on the tendencies of hamlets along the coast to seek the ugliest and most lurid neon signage for their bumper-car emporia, myrtlewood lawn-ornament shops, used-car lots, auto-wrecking concerns, terra-cotta nightmares, and sad moist flyblown restaurants.

“Thanks for your submission,” came the handwritten reply from the managing editor. “But if we published it we would be sued by half our advertisers.”

This was a straightforward remark and I admire it, partly for its honesty, a rare shout in a world of whispers, and partly because I have, in thirty years as a writer and editor, become a close student of the rejection note. The shape, the color, the prose, the tone, the subtext, the speed or lack thereof with which it arrives, even the typeface or scrawl used to stomp gently on the writer’s heart—of these things I sing.

One of the very best: a rejection note sent by the writer Stefan Merken to an editor who had rejected one of his short stories. “Please forgive me for not accepting your rejection letter,” wrote Merken. “At this time I cannot accept a rejection of my short story. I accept more than 99 percent of the rejections I receive. Many I don’t agree with, but I realize that accepting a piece of fiction for publication is a very subjective judgment call. My acceptance of your rejection letter is also a subjective process and therefore I am returning your letter to you. I did read your letter. I read every letter I receive. Your letter was well-written, but due to time constraints from my own writing schedule, I am unable to make editorial comments. I do make mistakes. Don’t you, as an editor, be disheartened by this role reversal. The road of publishing is long and tedious. You need successful publications and I need for successful publications to print my stories. I will expect to see my story in your next publication. Good luck in the future.”

Nourial Roubini, who, in recent years, has been devastatingly prescient in his economic prognostications, had this to say recently:

The latest U.S. macro news have been worse than awful: collapsing retail sales and consumption, free fall in capex spending by the corporate sector, sharply falling industrial production, sharply falling employment, housing still in free fall and home prices bound to fall 40% from the peak, collapsing auto sales, forward looking indicators of business (ISM) and consumer confidence dropping to multi-decade lows, sharp surge in corporate defaults, a wrecked banking system and financial system that will have to be partially nationalized. This is the most daunting set of economic and financial challenges that any president has had to face since FDR during the Great Depression. And in the meanwhile in the rest of the world things are as bad: a severe recession in Europe, Japan and other advanced economies; the risk of a hard landing in many emerging markets including China; an almost certain global recession; a severe global financial crisis.

So let us not delude each other: the U.S. and global recession train has left the station; the financial and banking crisis train has left the station. This will be a long and severe and protracted two year recession regardless of the best intentions and good policies of the new U.S. administration. It will take a lot of hard work and sound policies to clean up this mess and reduce the length and severity of this economic contraction.

And in the meanwhile the brief bear market sucker’s rally in the equity market has lost its steam and U.S. and global equities are starting to plunge again. As I argued for the last few weeks this was a bear market rally and markets could not defy the laws of gravity: a slew of ugly and worse than expected macro news, earnings news and financial news was bound to take a toll on equities and other risky assets. And now, after a brief rally markets are starting to plunge again. For 2009 the consensus estimates for earnings are delusional: current consensus estimates are that S&P 500 earnings per share (EPS) will be $90 in 2009 up 15% from 2008. Such estimates are outright silly and delusional. If EPS fall – as most likely – to a level of $60 then with a multiple (P/E ratio) of 12 the S&P500 index could fall to 720, i.e. 20% below current levels; if the P/E falls to 10 – as possible in a severe recession, the S&P could be down to 600 or 35% below current levels. And in a very severe recession one cannot exclude that the EPS could fall as low as $50 in 2009 dragging the S&P500 index to as low as 500. So, even based on fundamentals and valuations, there are significant downside risks to U.S. equities.

So the brief sucker’s rally is over and a reality check is now dawning on markets and investors. Expect this financial crisis and economic recession to get much worse in the next 12 months before it gets any better. We are nowhere near a bottom for housing, the U.S, economy, the global economy and financial markets. The worst is ahead of us rather than behind us.

A tree fungus could provide green fuel that can be pumped directly into tanks, scientists say. The organism, found in the Patagonian rainforest, naturally produces a mixture of chemicals that is remarkably similar to diesel.

"This is the only organism that has ever been shown to produce such an important combination of fuel substances," said Gary Strobel, a plant scientist from Montana State University who led the work. "We were totally surprised to learn that it was making a plethora of hydrocarbons."

In principle, biofuels are attractive replacements for liquid fossil fuels used in transport that generate greenhouse gases. The European Union has set biofuel targets of 5.75% by 2010 and 10% by 2020. But critics say current biofuels scarcely reduce greenhouse gas emissions and cause food price rises and deforestation. Producing biofuels sustainably is now a target and this latest work has been greeted by experts as an encouraging step.

The fungus, called Gliocladium roseum and discovered growing inside the ulmo tree (Eucryphia cordifolia) in northern Patagonia, produces a range of long-chain hydrocarbon molecules that are virtually identical to the fuel-grade compounds in existing fossil fuels.

Details of the concoction, which Strobel calls "mycodiesel", will be published in the November issue of the journal Microbiology. "The results were totally unexpected and very exciting and almost every hair on my arms stood on end," said Strobel.

This is extremely exciting news, and while practical applications are obviously not imminent, this is pricisely the sort of creative approach to problem solving needed most in these difficult times. And the discovery underscores just how decrepit the "Drill Baby, Drill!" McCain strategy was.

Here is another irony in this whole mess... In the very near future, companies that were bailed out by taxpayer funds in order to avoid bankruptcy will be denying loans to taxpayers who declared bankruptcy.

As some of you will recall, I posted a number of warnings from NYU economist Nouriel Roubini in the years and months leading up to the current crisis. He was remarkably prescient, and there are some very sophisticated people who contribute comments to his site on a regular basis. One if those is a man who goes by the screen name "London Banker", and he has just written a very interesting essay on Roubini's site RGE Monitor. As you probably won't be able to access it directly, I'm reprinting it below in its entirety.

I have been indulging in leisure again. For nine days I backpacked along the ancient Ridgeway, the superhighway of Neolithic Britain and a trade route into the modern era. Starting about 6,000 years ago, (roughly the time Sarah Palin imagines Adam and Eve holding hands in a newly wrought Eden) the Britons occupying the plains either side of the Ridgeway were settling the river valleys to raise crops and herd animals. As the crops and herds increased, and the Iron Age and Bronze Age opened trading opportunities in new technologies, these Britons took strides that set them and their heirs on the road to market capitalism.

The Ridgeway is a geographic feature of Jurassic and Corallian limestone, an 87 mile long spine of rocky downs running through Southern England from Ivinghoe Beacon in Buckinghamshire to Overton Hill, near Avebury in Wiltshire. It was linked by other routes to ports in the South and on the Channel. The Ridgeway was admirably suited as a commercial highway in early times because the limestone was porous, draining rain away from the high pathway to the plains below. When the tracks below were impassable mires of mud for man and beast, the Ridgeway remained a quick and easy road from one region to another. Being high, with excellent views down the slopes and over the plains, it was also possible to detect and defend against brigands who might beset unwary travellers, with ring forts provided to secure travellers and goods along the route.

Neolithic Britons were secure enough to form large agrarian tribes, planting and harvesting grains and herding sheep. They were prosperous enough to have excess grain and sheep to trade for iron and bronze tools and gold jewellery and other valuable trade goods. They were economically advanced enough to have specialisation, with certain tribes and regions known for their skill in producing iron or bronze or pottery. They were politically advanced enough to have organised militias, with a ‘warrior aristocracy’. They were wise enough to promote collective security and agree byways for safe passage with neighbouring tribes to enable commerce along the Ridgeway.

The Ridgeway reminded me every day we walked along that it is infrastructure, transparency and mutually-enforced rules which secure and grow markets for productive capitalism. Infrastructure provides a common framework for trade to take place. Transparency allows those trading in markets to evaluate each other’s wares and defend against brigands who might wish to ambush the unwary. Rules of safe conduct and fair dealing promote the confidence which encourages those with excess production to bring it to market to trade for their present and future needs. Mutual enforcement ensures that the temptation of any tribe to loot its neighbours is curbed by the risk of finding itself precluded from the trade routes and from access to markets.

I imagine that like many small, agrarian, tribal states, England of the pre-Roman period was organised into settlements relying on militias with only small dedicated military elites. This arrangement, as exists in modern Switzerland, allows the civilian militia to contribute most of its energies under secure conditions to increasing production, growing the surplus which sustains collective prosperity. Although a professional military or ‘warrior aristocracy’ can be useful in providing skilled leadership, if that military gets too large, or the aristocrats too greedy, the incentive to produce a surplus is removed and tribes tend to weaken, grow poor and fail. Prosperity and security require a delicate balance in the social contract.

The Ridgeway also reminded me that prosperity invites looting by aggressors. By the Roman era, England was producing a large enough surplus to be exporting across the Channel, with trade goods from as far afield as the Mediterranean. This has been substantiated by findings of pottery, jewellery, coins and other goods in early Celtic settlements.

It was the prosperity of England as a grain exporter that led Julius Ceasar to covet it for the Roman Empire.

A professional military demands a large production surplus from the civilian population to sustain it. The state expropriates the surplus production and provides it to the military. If the military can secure more resources and more production to the state, the expropriation can increase prosperity of its tribe – or at least the elite that commands it. But if the military fails to secure more resources, then the expropriation from those producing a surplus will gradually erode the incentive to produce a surplus – leading to decline and increasing poverty and political strife.

Ceasar understood that securing the large agricultural surplus of England to finance and feed his armies would help underpin the military strength of the Roman Empire. Naturally, the Romans secured and settled the most prosperous agricultural regions. As a result, there are Roman traces along the Ridgeway – improvements to the roads, the forts, and the commercial links to market towns and ports on the coasts. We walked Roman roads last week too - straight, raised and solid even 2,000 years later.

Following the Romans, the Danes, the Angles, the Saxons and the Normans invaded and occupied the same lands. Throughout the changing political and ethnic mix of tribes and elites, the Ridgeway continued to function as a trade route through prosperous middle England.

Modern markets could usefully reflect on the durable Ridgeway model of market infrastructure. Transparency of assets – whether sheep or shares or CDOs – is critical to the effective function of markets for price discovery and investment. Those who have secured a surplus are unlikely to risk taking their wealth to a market where assets are not open to inspection and proper valuation. Security of trade routes and market towns for merchants and traders is essential to encourage those with a surplus to bring it forward, promoting effective allocation of assets and underpinning growth in production. Mutually-enforced rules of conduct, fair dealing and safe passage are key to building a reputation that attracts both buyers and sellers and ensures a sustained market prosperity.

The modern ‘warrior aristocracy’ could usefully reflect on the fate of societies that deplete the incentives to surplus production and fail to secure commensurate returns from a costly military. Whether a Neolithic tribe, a Celtic settlement, the mighty Roman Empire or the Soviet Union, history proves that a tendency to excess expropriation by the state undermines any incentive to investment and surplus production. Excess expropriation will ultimately weaken the economy supporting the elites and the professional military that secures their privileges and interests.

As the global elites meet in the coming weeks to address the current economic crisis, they could do worse than contemplate the lessons I gleaned from the Ridgeway. Those who provided poor transparency, promoted dishonest market practices, looked the other way or collaborated in the robbing of passing merchants and investors, and otherwise violated the precepts embodied in the Ridgeway model should be held accountable for their failings. The global model going forward must return to the principles embodied in the ancient stone backbone of English commerce.

From Eric Alterman's mention of the release of The James Bond Blu-Ray collection:

007 walks into a bar and takes a seat next to a very attractive woman. He gives her a quick glance, then casually looks at his watch for a moment.

"No", he replies, "I am here alone. Q has just given me this state-of-the-art watch and I was just testing it."

The intrigued woman says, "A state-of-the-art watch? What's so special about it?"

The woman giggles and replies, "Well, it must be broken because I am wearing panties!"

Andrew Lahde, who ran a small hedge fund in California, racked up huge profits betting against the sub-prime mortgage markets. Now he's getting out of the industry, and wrote a rather interesting good-bye letter to his clients. Here it is in its entirety:

Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, "What I have learned about the hedge fund business is that I hate it." I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

There are far too many people for me to sincerely thank for my success. However, I do not want to sound like a Hollywood actor accepting an award. The money was reward enough. Furthermore, the endless list those deserving thanks know who they are.

I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.

So this is it. With all due respect, I am dropping out. Please do not expect any type of reply to emails or voicemails within normal time frames or at all. Andy Springer and his company will be handling the dissolution of the fund. And don't worry about my employees, they were always employed by Mr. Springer's company and only one (who has been well-rewarded) will lose his job.

I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life -- where I had to compete for spaces in universities and graduate schools, jobs and assets under management -- with those who had all the advantages (rich parents) that I did not. May meritocracy be part of a new form of government, which needs to be established.

On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government. Capitalism worked for two hundred years, but times change, and systems become corrupt. George Soros, a man of staggering wealth, has stated that he would like to be remembered as a philosopher. My suggestion is that this great man start and sponsor a forum for great minds to come together to create a new system of government that truly represents the common man's interest, while at the same time creating rewards great enough to attract the best and brightest minds to serve in government roles without having to rely on corruption to further their interests or lifestyles. This forum could be similar to the one used to create the operating system, Linux, which competes with Microsoft's near monopoly. I believe there is an answer, but for now the system is clearly broken.

Lastly, while I still have an audience, I would like to bring attention to an alternative food and energy source. You won't see it included in BP's, "Feel good. We are working on sustainable solutions," television commercials, nor is it mentioned in ADM's similar commercials. But hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term. The original American flag was made of hemp fiber and our Constitution was printed on paper made of hemp. It was used as recently as World War II by the U.S. Government, and then promptly made illegal after the war was won. At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country? Ah, the female. The evil female plant -- marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers. This policy is ludicrous. It has surely contributed to our dependency on foreign energy sources. Our policies have other countries literally laughing at our stupidity, most notably Canada, as well as several European nations (both Eastern and Western). You would not know this by paying attention to U.S. media sources though, as they tend not to elaborate on who is laughing at the United States this week. Please people, let's stop the rhetoric and start thinking about how we can truly become self-sufficient.

In today's excerpt--writer and director Rob Reiner (Stand By Me, The Princess Bride, This is Spinal Tap) films a scene for his movie When Harry Met Sally where Meg Ryan's character Sally loudly demonstrates a fake orgasm for her friend Harry, played by Billy Crystal. This scene demonstrates the often collaborative nature of movie-making:

"Perhaps the most famous restaurant scene in the movie--maybe in any movie--is when Harry and Sally go to lunch at Katz's Deli. [Screenwriter Nora] Ephron was the inadvertent source for the scene. The premise of the movie is that, as Harry puts it, 'Men and women can't be friends because the sex part always gets in the way.' ...

"Much of Ephron's script was based on what she had learned from Reiner and producer Andrew Scheinman about how men think. Out of those conversations came such things as Harry explaining that after sex men began worrying about how long they have to hold their partner before they can leave (and whether thirty seconds is enough) while women want to be held all night. So they put it to Ephron to start offering up some of the things women think about and usually don't discuss with men, since if the film was going to work it had to have honesty from both sides. Ephron asked how men could be so selfish as to want to run right out the door after sex, and Reiner replied it wasn't really selfish. After all, the women had had a good time too. Ephron asked Reiner how he knew that.

" 'I told Rob he couldn't be sure about a woman's satisfaction because women fake orgasms,' she said.

"Reiner was surprised. He didn't believe anything like that had ever happened to him, or that this was something most women did. So he started asking the women in his office. More than half told him that, of course, at some time they had done just that. Reiner was shocked, but he realized that not only had Ephron told him the truth, but now they had to work that into the movie. Thus the genesis of the famous 'fake orgasm' scene.

"By the time the script was being read through by the cast--Reiner likes to give the actors plenty of rehearsal time--Ryan suggested that the scene would be even funnier if she demonstrated Sally's acting abilities in counterfeiting the throes of passion. This was immediately added in, but it was left to Billy Crystal to come up with the famous capper. He suggested that another patron of the restaurant who witnessed the scene tell her waiter, 'I'll have what she's having.' In passing out credit for what Reiner would call 'the funniest line in any movie I've ever done,' one can spot the fingerprints of the director, the screenwriter, and both the stars."

more images of Yulgilbar, the adorable Tasmanian Devil pup in – where else? – the Sunday Tasmanian

Aping urbanity
Oozing with vanity
Plump as a manatee
Faking humanity
Journalistic calamity
Intellectual inanity
Fox Noise insanity
You’re a profanity
Hannity

The general bafflement about remedies is puzzling. If the core problem is highly evolved methods of deceit, the societal countermeasure is broadly mandated institutional transparency. Remove concealment from institutional actors and you suppress false dealing of all kinds.

Every public company should be required to stand naked with regard to its financial operations, with all internal management accounting publicly available. Every government institution should be similarly visible in its financial and decision making operations.

This open governance model will be at the core of the next wave of real political reform. Anything less invites the next mega-scam. The technology of organized deceit, the “spin” industry, has grown so powerful that it cannot be countered by the patchwork of laws and customs we have relied upon for centuries. A quantum leap in institutional transparency will be required to protect society from the highly evolved methods of fraud that have produced the current disaster.

In today's excerpt – in 1859, in the obscure town of Titusville in northwestern Pennsylvania, "Colonel" E.L. Drake and "Uncle Billy" Smith successfully drilled the first oil well, and ushered in the titanic booms and busts of the oil era. In one town, a parcel of land once worth $2 million was soon thereafter worth only $4.37:

"Nothing revealed the feverish pitch of [oil] speculation better than the strange story of Pithole, on Pithole Creek, some fifteen miles from Titusville. A first well was struck in the dense forest land there in January 1865; by June, there were four flowing wells, producing two thousand barrels a day--one third of the total output of the Oil Regions--and people fought their way in on the roads already clogged with the barrel-laden wagons. 'The whole place,' said one visitor, 'smells like a corps of soldiers when they have the diarrhea.' The land speculation seemed to know no bounds. One farm that had been virtually worthless a few months earlier was sold for $1.3 million in July 1865, and the resold for two million dollars in September.

"In that same month, production around Pithole Creek reached six thousand barrels per day--two-thirds of all the production in the Oil Regions. And, by that same September, what had once been an unidentifiable spot in the wilderness had become a town of fifteen thousand people. The New York Herald reported that the principal businesses of Pithole were 'liquor and leases'; and The Nation added, 'It is safe to assert that there is more vile liquor drunk in this town than in any of its size in the world.' Yet Pithole was already on the road to respectability, with two banks, two telegraph offices, a newspaper, a waterworks, a fire company, scores of boarding houses and businesses, more than fifty hotels--at least three of which were up to elegant metropolitan standards--and a post office that handled more than five thousand letters a day.

"But then, a couple of months later, the oil production abruptly gave out – just as quickly as it had begun.

Banking was conceived in iniquity and was born in sin. The bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create deposits.

– Sir Josiah Stamp, (President of the Bank of England in the 1920's, and second richest man in Britain at the time)

This Paul Grignon video runs 47 minutes, but is well-worth watching if you'd like to learn how money is created by banks, and why they are (therefore) so disproportionately powerful.

When I was studying control theory at the USAF Academy (it was my focus as part of an Astronautical Engineering degree -- yes, you could say I am a rocket scientist ;-> to the extent that means anything), we learned the difference between dynamically stable and unstable systems. Dynamically stable systems are, by design, built with intrinsic dampening forces that return them to a steady state. For example, aircraft of the classic design like to fly. You actually have to work hard to get them to do something uncontrollable.

However, this stability costs you a measure of performance. To increase performance (of a system) you have to ADD instability to the system's design. Unfortunately, this means that a high performance aircraft with a large percentage of instability built into its design occasionally wants to careen into oblivion -- the feedback from the system's interaction with the environment can create feedback loops that tend towards infinity (which of course means catastrophic failure). To compensate for this, dynamically unstable systems have computer augmented control systems that dampen these feedback loops. For example, a plane of this type of design has computers (with double back-up) that constantly compensate for instability by moving control surfaces (at a much faster rate than the pilot can). Without compensation, a plane like the F-16 will go catastrophic in 3 seconds. With some of the forward swept wing designs, the time to instability is measured in fractions of seconds...
If we look at today's global environment we see a relatively high performance system driven by real-time global markets and rapid technological progress. Its performance explains why it is spreading so quickly. However, it is also moderately unstable. In our drive towards higher levels of performance we pursued a path of rampant global interconnectivity that has quickly outpaced our ability to dampen excess. The old dampening functions of borders, distance, government, etc are quickly fading. The result is a system vulnerable to rogue feedback. Even a small amount of it can cause global reverberations....

This conclusion also calls into question the efficacy of the idea that merely increasing connectivity is an answer to our problems. Increasing connectivity too fast, in a system without intrinsic dampening or control systems that work, will only accelerate the chaos (human nature doesn't change as fast as technology).... Also, the complexity of this system puts the lie to the idea that we know how to actively dampen its behavior through centralized systems of control. We neither have the scale nor the collective intelligence to pull it off. The only real solution rests on redesigning the system itself, to enable it to become more tolerant of rogue feedback...

Gregory (Scotland Yard detective): "Is there any other point to which you would wish to draw my attention?"

If the Wall Street crisis is as serious as some people say - especially regarding the ability of companies to borrow - why haven't we heard significant noises from Home Depot, McDonald's, Kraft Foods, Merck, et al?

LONDON (Reuters) - A study has for the first time linked a common chemical used in everyday products such as plastic drink containers and baby bottles to health problems, specifically heart disease and diabetes.

Until now, environmental and consumer activists who have questioned the safety of bisphenol A, or BPA, have relied on studies showing harm from exposure in laboratory animals.

But British researchers, who published their findings on Tuesday in the Journal of the American Medical Association, analyzed urine and blood samples from 1,455 U.S. adults aged 18 to 74 who were representative of the general population.

Using government health data, they found that the 25 percent of people with the highest levels of bisphenol A in their bodies were more than twice as likely to have heart disease and, or diabetes compared to the 25 percent of with the lowest levels.

"Most of these findings are in keeping with what has been found in animal models," Iain Lang, a researcher at the University of Exeter in Britain who worked on the study, told a news conference.

My bet is that this – much like the mounting evidence that cell phone radiation is dangerous – is yet another glimpse at the terrible, predictable consequence of the excessive power wielded by corporations in our society. Their lobbies are so strong, and politicians are so corrupted, that most major industries are able to bring unsafe products to market and sell them for years – if not decades – before their true risks are exposed.

The skill of the athletes, the technical quality of the video, the borderline insanity of the project – all amazing. Jump to the 2:20 mark where the action begins. Oh, and don't try this at home.

I've chosen not to embed the video, as it can only be veiwed in HD by using this link: