Archive: OTHER

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The Power to Bring a Subject Alive

Almost everyone recalls a certain teacher who, through a combination of passion for their subject, and a creative approach to their challenging vocation, inspired them to learn, excel, and in many cases, develop a new passion of their own. V.S. Ramachandran clearly falls into that special category, though he is a scientist first and foremost.

I urge you to watch this whole, nearly two hour interview, and guarantee that you will be enriched, entertained, and quite possibly inspired. Here's a brief excerpt:

BINGHAM: You’ve also written about the important contribution of India, in terms of mathematicians and scientists, and so on. Before we get into your own career, could you just give us some sort of sense of the background of this, the…

RAMACHANDRAN: Sure, At the risk of sounding a bit jingoistic, what I would say is that people throughout the world, even Indians, settled abroad. When you think of India you think of curry, and you think of cows, holy cows and you sometimes think of yoga, which is a positive thing, or meditation, things of that nature. What people overlook is the fact that a great deal of science originally comes from India.

For example, geometry is mainly Greek, so we don’t deserve the credit for that. On the other hand, a great deal of arithmetic and number theory comes from India. For example, as everybody knows, the idea of zero, comes from India, not just the symbol zero, this is a mistake commonly made by people who don’t know. Not just the symbol, but the notion of zero as a place marker and the use of what we call the positional coding in the number system. So if you have 453, it is 4 multiplied by 100, 5 multiplied by 10, and 3 by 1. multiplied by 100, 5 multiplied by 10, and 3 by 1.

So at a time, a Roman soldier, you asked him…or a Roman king, if you asked him to multiply 25 by 22, it would take an entire wall and about half an hour. The average Indian peasant could do it in about 10 seconds using the number system. This then spread from India to the Caliph of Baghdad around the 7th or 8th century AD. From there it went to Europe. It is not just…it is place value, plus zero, plus the actual numbers which we call Arabic numbers, but in fact came from India. 1,2,3,4, the symbols. You need the combined, the combination of zero and place values and the actual compact system of ten numbers, to get mathematics off the ground. Then it went via the Arabs, to the moors, via the moors, to Spain, where the monks and the clergy kept it going. Initially there was great reluctance to accept it. That’s where the word cipher comes from. Cipher in Indian means zero, in Arabic means zero. But Cipher also means a mysterious code. So they regarded this as an example of oriental treachery, using magic to conceal some information. But eventually, after another 300 years, Fibonacci came along and accepted this, and then it spread throughout Europe, and hence modern mathematics, and hence computers.

via the indispensible 3 Quarks Daily

Big Oil? Don't believe a Word

You've probably heard the soothing voice-overs in their television adverts, reassuring us of their commitments to help the world move away from fossil fuels, etc, etc.

Buttressing those reassurances, here's what Royal Dutch Shell proclaims on its website (as of March 21, 2009):

It will be some time before fossil fuels stop being our main energy source, but as energy demand rises along with the need to reduce carbon dioxide emissions, creative scientific solutions are required more urgently than ever. A wealth of activity is taking place to harness the power of nature - from sunlight to wind and from water to plant life. Each great idea, however, comes with technical obstacles. Shell Global Solutions is seeking the solutions, such as the development of second-generation biofuels, that will be a significant part of our business in the coming years.

then (surprise, surprise), from an article dated March 17th:

Shell will no longer invest in renewable technologies such as wind, solar and hydro power because they are not economic, the Anglo-Dutch oil company said today. It plans to invest more in biofuels which environmental groups blame for driving up food prices and deforestation.

Executives at its annual strategy presentation said Shell, already the world's largest buyer and blender of crop-based biofuels, would also invest an unspecified amount in developing a new generat ion of biofuels which do not use food-based crops and are less harmful to the environment.

The company said it would concentrate on developing other cleaner ways of using fossil fuels, such as carbon capture and sequestration (CCS) technology. It hoped to use CCS to reduce emissions from Shell's controversial and energy-intensive oil sands projects in northern Canada.

The company said that many alternative technologies did not offer attractive investment opportunities. Linda Cook, Shell's executive director of gas and power, said: "If there aren't investment opportunities which compete with other projects we won't put money into it. We are businessmen and women. If there were renewables [which made money] we would put money into it."

more from The Guardian (U.K.)

via Chris Floyd


A far cry from the little nerf basketball I played with as a kid. And what a sadly eloquent reflection of the times.


Rebecca Hosking: Transforming Farms for the Future

Anyone interesting in the need to create a healthier, sustainable future of food production, should take the time to watch this excellent (48 minute) BBC program.

Cool Cats

As some readers may know, the video hosting site Vimeo offers a high-definition section, which includes some very artistic and interesting short films. Stefan Sobotta provides some lovely footage of Lynx in their natural habitat here. Obviously a fast connection and high quality monitor are ideal for viewing.

The Wisdom of CNBC

It's a cliché at this point, but the irony that Jon Stewart – a faux newscaster – provides more penetrating and honest insights into major issues on the Comedy Central network than most so-called serious journalists in mainstream television news, is fantastically rich.

Far From Normal

Nothing we do for banks is for banks. It’s all for the benefit of the people who depend on banks.

– Treasury Secretary Timothy Geithner on PBS Jim Lehrer News Hour

This isn’t a normal recession. In a normal recession aggregate demand declines, economic activity slows, and GDP shrinks. While those things are taking place now, the reasons are quite different. The present slump wasn’t brought on by a downturn in the business cycle or a mismatch in supply and demand. It was caused by a meltdown in the credit system’s central core. That’s the main difference. Wall Street’s credit-generating mechanism, securitization, has broken down cutting off roughly 40 percent of the credit that had been flowing into the economy. As a result, consumer demand has collapsed, inventories are growing, and manufacturing has contracted for the 13th consecutive month. The equities markets are in freefall and all the economic indicators are pointed south. The so called “shadow banking system” which provided wholesale funding for mortgages, car loans, student loans, and credit card debt, has stopped functioning entirely.

Mike Whitney continues his fine work and provides further insights into the roots of the debacle, focusing specifically on "securitization", at Dissident Voice

Iceland: What Happened?

Iceland’s de facto bankruptcy — its currency (the krona) is kaput, its debt is 850 percent of G.D.P., its people are hoarding food and cash and blowing up their new Range Rovers for the insurance — resulted from a stunning collective madness. What led a tiny fishing nation, population 300,000, to decide, around 2003, to re-invent itself as a global financial power? In Reykjavík, where men are men, and the women seem to have completely given up on them, the author follows the peculiarly Icelandic logic behind the meltdown.

read Michael Lewis' excellent article in Vanity Fair

Big Numbers

As most of us watch, stunned, at the crumbling economy, it's useful to put some of the numbers being tossed around into perspective. Here's a good example, courtesy of Bill Kidder:

A trillion Is an unimaginably large amount.

It would take almost 12 days to count to 1 million at the rate of one number per second.

It would take almost 32 years to count to 1 billion at the same rate.

A trillion would take 31,720 years.


If you happen to enjoy food as much as I do, which is to say a lot, then you should visit this excellent site called LUNCH. The authors are "Architects by profession, [and] also ladies who lunch." And they regularly photograph (well) and describe a terrific array of metro NYC offerings.

An Apt Metaphor

James Lovelock's latest musings on the fate of our planet are blessed with a chilling subtitle: "A Final Warning" is scrawled across the cover. Civilisation is hovering on the brink of destruction, the author claims.

Fans of Lovelock will not be particularly surprised by this latest outburst. The great environmentalist has become increasingly apocalyptic in his predictions over the years as our climate has warmed, ice-caps have melted and the carbon content of our atmosphere has soared. A "pitiless" change in our environment is now inevitable, he states in The Vanishing Face of Gaia

Lovelock's chief claim to fame is his concept of Gaia: the idea that Earth's bountiful living forms act as regulators that control conditions on the planet - by a series of chemical feedbacks - in order to keep our world at its ecological best. When first proposed in the Sixties, the notion delighted hippies but enraged scientists, the latter describing it as unscientific and "untestable" as well as being "anti-human polemics", industrial apologetics and even as non-Christian ecological "satanism". A nice variety of insults when you think about them.

However, the concept of Gaia has slowly gained popularity over the decades and is now grudgingly accepted by many biologists and physicists as a true vision of our planet, a place that has been kept in decent ecological nick by the behaviour and variety of its many lifeforms.

Unfortunately, Gaia is in trouble today, says Lovelock. It is infected by a virus called Homo sapiens. Humans are destroying ecosystems, killing off species in their thousands and destabilising climates. "We became the Earth's infection a long and uncertain time ago, but it was not until about 200 years ago that the Industrial Revolution began: then the infection of the Earth became irreversible," he says.

more from The Guardian (U.K.)

The Main Problem, Elegantly Defined

James K. Galbraith, Professor of Economics, University of Texas, commenting on Obama's speech:

A remarkable speech, full of good sense and pragmatic determination. But the analysis of the banking crisis relies on a defective metaphor - restoring the "flow of credit." Credit is not a flow. Banks are not short of funds. (They never are.) They are not blocked up. Adding funds to banks does not make them more willing to lend.

Credit is a contract. The collapse of values has left the banks short of good borrowers. There are not enough customers with profitable projects. There are not enough customers with stable incomes. There are not enough customers with adequate collateral. Banks will not lend until there is profit in it. And customers will not borrow, until they see more opportunity than risk, and until they have assets they can borrow against.

Guaranteeing bad assets will not stabilize the price of housing. It will not stabilize incomes and profit opportunities in the economy. Therefore it will not solve the credit problem.

Meanwhile the guarantees will support incumbent management and shareholders. They will add vast sums to the public debt - directly or contingently - making achievement of the president's other priorities more difficult. And they will distort the distribution of wealth, by guaranteeing the financial position of an elite group while that of so many others is collapsing.

Keeping the existing management in place means that we will not arrive at clean and trustworthy audits of the banks. Therefore no one will know to what degree they actually are, or actually are not insolvent. No one will know just how bad the bad assets are, and most will (prudently) suspect the worst. This collapse of trust means that lending to the banks, including by other banks, will continue to be impaired.

As of tonight, the president and his team are committed to finding an actual solution to the banking crisis. To get to that solution, they need to come to grips with the problem. And for that, they need, first of all, to escape from the prison of a facile metaphor.

via The Washington Note

Thank You

You can always identify a "marvelous market" by the presence of mutual "thank-yous" from both the buyer and seller. For example, yesterday I went to Panda Express to buy some Chinese food for my lunch. When the cashier handed me my order, I said, "Thank you." And when I paid him for my order, he said, "Thank you," right back to me. It made sense for both of us to say "thank you" to one another because the exchange was voluntary and to mutual advantage as determined by our independent judgment. Indeed, the presence of mutual "thank yous" reflects and reveals the very essence of mutual advantage in concrete action. We don't often step back and appreciate how beautiful such a moment is, and how many have suffered and died over centuries so that it may exist. It is a moment of mutual civility, cooperation, and respect in which each person is granted his or her full dignity as a human being, and neither is treated as master or servant of the other. And that is exactly why marvelous markets are the only ethical economic systems that have ever existed, and why we should fight with everything we have to prevent them from disappearing from the earth.

In the current financial crisis, you will note a distinct absence of mutual "thank yous." Indeed, everyone is furious with everyone else. Homeowners, mortgage lenders, appraisers, regulators, politicians, investors, Wall Street, municipalities, states, nations, and citizens are all pointing fingers at each other and cursing under their breadth with blame, hatred, and rage. That is exactly what happens when theft, fraud, deception, and dishonesty are allowed to seep into an economy and people end up feeling defrauded in their purchases or sales. Such animosity is a telltale sign that the underlying market is most decidedly not free. It is a market that is truly un-marvelous.

I am amazed at how strange the underlying market transactions that led to this crisis really were. Lenders gave loans to people even though the lenders didn't care if they ever got paid back (because the loans were immediately sold to Wall Street). The lenders didn't care about the quality of the product they were selling to Wall Street because Wall Street, the buyer, didn't care about the quality of the product they were buying (because Wall Street securitized the loans, got them stamped with a AAA rating, and sold them overseas). The overseas buyers bought the defective securities because many of them didn't really understand what they were buying, the truth wasn't presented to them in a way they could understand, and they ultimately relied on the AAA ratings and the represented "good name" of the rating agencies and Wall Street firms. The ratings agencies also didn't care about the quality of the product they were selling because their customers weren't the people who were relying on accuracy of the ratings, but rather the people who wanted a AAA rating stamped on their product even if it wasn't merited. Such transactions are quite at odds with the idealized image of a traditional free market in which honest and upstanding individuals trade things of value for mutual advantage, and care about such mundane things as price, quality, the repayment of loans, risk management, and the reputations of their companies. The traditional free market idea that the people who get rich are the ones who provide the most value simply didn't hold up in this crazy environment. Whether one looks at this as a market failure or a market rife with fraud and misrepresentation, it is clear that something went terribly awry.

from The Patriot in the high-quality comments section of Nouriel Roubini's blog (subscription required)

Crop Yield / Nutritional Values: An Inverse Relationship

Research by Donald R. Davis who retired from Biochemical Institute at The University of Texas (in my hometown of Austin) and in conjunction with the Bio-Communications Research Institute in Wichita Kansas, has summarized three kinds of evidence that points towards the decline in the nutrient value of fruits and vegetables in the US and UK over the last 50 to 100 years.

They found, among other things...

apparent median declines of 5% to 40% or more in some minerals in groups of vegetables and perhaps fruits; one study also evaluated vitamins and protein with similar results.

and that...

plantings of low- and high-yield cultivars of broccoli and grains found consistently negative correlations between yield and concentrations of minerals and protein, a newly recognized genetic dilution effect.

read on at the U.S. Food Policy blog

America's Self-absorption in a Nutshell

The headline alone exudes the typical arrogance: "America's Scorecard In Iraq." The story, written by Steven Lee Meyers, builds upon this rotten premise, showing once again, as if anyone awake needs reminding, our utter contempt for those we choose to "liberate":

"The overthrow of Saddam Hussein, whatever the underlying motivation, certainly removed a potential threat to American interests, but a bird’s-eye view as the sixth anniversary of the war approaches shows that the Middle East remains as troubling and turbulent as ever."

Whatever the underlying motivation. Massive lies. Ceaseless propaganda. Widespread destruction. Countless deaths. Ho hum. What-ever. All that matters is our sacred interests. And empathetic people that they are, I'm sure the Iraqis are comforted to know that "a potential threat" to us has been removed, though we still face a few troublemakers who have yet to appreciate our sacrifice. Why won't they simply dye their fingers purple and move on? Haven't we suffered enough?

Of course, The New York Times is hardly the lone sociopathic voice on this front. But it does help set the overall tone. Naturally, were we on the business end of a foreign invasion and occupation, millions dead, towns destroyed, elections administered under barbed wire and snipers, Americans not only would be grateful, but would understand the existential struggle of our liberators, as their elites and press outlets wrestled with how the invasion affected them. More, we would swoon in awe of their sexy, newly-elected leader who told us to "step up" and take responsibility for our condition, so that his military could focus on "liberating" another lucky country.

We know this to be true. Why can't everyone else see it?

reprinted in its entirety from Dennis Perrin's blog

Jumbo Jet Conversion

A creative Swedish entrepreneur has turned an otherwise useless Boeing 747 into a hostel!

more images and details at the Jumbo Hostel site

F-16 Fighters, Jazz, and Righteous Indignation

Pierre Sprey is a former Pentagon official, one of Defense Secretary Robert McNamara's famous "whiz kids" who helped design and develop two of the military's most successful airplanes, the F-16 Falcon Fighter and the A-10 Warthog Tankbuster. But in the late 1970s, with a handful of Pentagon and congressional insiders, Sprey helped found the military reform movement. They risked their careers taking issue with a defense bureaucracy spending more and more money for fewer and fewer, often ineffective weapons.

Sprey appeared recently on Bill Moyer's PBS program (which is the best news interview program on American television), from which the above paragraph was excerpted. He was an unusual and impressive guest, which motivated me to research him further. As it turns out, he is also the force behind the very interesting independent recording label Mapleshade. For those who would like to learn more about this remarkable man, the Moyer's interview transcript can be read here, and can be seen and heard for as long as it remains active here. Sprey's involvement with music can be illuminated both here and at Mapleshade Records.

Bill Lind on Bringing 4GW Home

Some time ago, I wrote a column warning that our involvement in Fourth Generation wars overseas would spur 4GW here at home. One way it would do so is by introducing soldiers to statelessness.

I do not see e-mail, but I was told that column generated lots of it. Many e-diots howled that I had somehow “attacked the troops.”

Well, guess what? It’s starting to happen. A reader sent me a copy of a story from The Oklahoman dated December 25, 2008. The title is, “Police Say Vet Made, Sold IEDs to Gangs.” It reads in part:

Police spent the day searching the house of a decorated, two-tour Iraq war veteran on Tuesday, one day after he was arrested and charged with making explosive devises and attempting to sell them…

Steven Andrew Jordal, 24, was an infantry tank (sic) specialist in the U.S. Army from 2002 to 2007. He received the Army’s Good Conduct medal, along with several other medals, badges and ribbons, the military confirmed.

Oklahoma City police took interest in Jordal when they received a tip he was selling IEDs to criminals. IEDs have emerged in Iraq as the weapon of choice for insurgents against U.S. forces.

For as little as $100, Jordal was making the same kinds of weapons he saw used against his fellow soldiers in Iraq and selling them on the streets of Oklahoma City to gang members…

Surprise, surprise. This is not the first such report I have seen. Shortly after my initial column ran, I received a letter from a reader in Poland with a news story that Polish police were being attacked and killed with IEDs.

If we read these stories merely as accounts of the spread of a technology, IEDs, we read them too narrowly. American and other foreign troops in places such as Iraq and Afghanistan are learning more than how to make IEDs and how effective they can be. They are learning by direct observation how a place works when the state disappears.

To the large majority of American and European soldiers, this is a lesson in horror. They return home thankful they live in a place where the state endures. The last thing they want is to see their native country turn into another Iraq or Afghanistan.

But a minority will learn a different lesson. They will see statelessness as a field of opportunity where people who are clever and ruthless can rise fast and far. They look upon themselves as that kind of people. They will also have learned it is possible to fight the state, and how to do so. The effectiveness of IEDs is part of that lesson; so are the power and rewards that come to members of militias and gangs. In their own minds, and perhaps in reality, they will have found a new world in which they can hope to thrive.

There is a parallel here with what the men who fought in the trenches on the Western Front in World War I learned. For most, it was the worst time in their lives. Their experience is captured by All Quiet on the Western Front. But a minority found it the best time of their lives. Their book is Ernst Junger’s Storm of Steel. It was these men, looking to re-create that tremendous experience, who made up the Brownshirts of the S. A. Their very name, Storm Troopers, originated in what they had done during the war. They came home determined to create a different Germany, and they did.

more from Lind at his blog

Australia's Dirty Land Grab

With its banks secured in the warmth of the southern spring, Australia is not news. It ought to be. An epic scandal of racism, injustice and brutality is being covered up in the manner of apartheid South Africa. Many Australians conspire in this silence, wishing never to reflect upon the truth about their society’s untermenschen, the Aboriginal people.

The facts are not in dispute. Thousands of black Australians never reach the age of 40. An entirely preventable disease, trachoma, blinds black children as epidemics of rheumatic fever ravage their communities. Suicide among the despairing young is common. No other developed country has such a record. A pervasive white myth, that Aborigines leach off the state, serves to conceal the disgrace that money the federal government says it spends on indigenous affairs actually goes towards opposing native land rights. In 2006, some A$3billion was underspent “or the result of creative accounting,” reported the Sydney Morning Herald. Like the children of apartheid, the Aboriginal children of Thamarrurr in the Northern Territory receive less than half the educational resources allotted to white children.

In 2005, the United Nations Committee on the Elimination of Racial Discrimination described the racism of the Australian state, AGAIN a distinction afforded no other developed country. This was during the decade-long rule of the conservative coalition of John Howard, whose coterie of white supremacist academics and journalists assaulted the truth of recorded genocide in Australia, especially the horrific separations of Aboriginal children from their families. They deployed arguments not dissimilar to those used by David Irving to promote Holocaust denial.

the rest of John Pilger's piece can be read at Dissident Voice

How Porsche Hacked the Financial System

Adolf Merckle, one of the world’s richest men, committed suicide [on January 6th] by throwing himself under a train, Bloomberg reports. Financial difficulties, and particularly great losses he suffered on Volkswagen stock, are being cited as the key reason he ended his life:

[Merckle's company] VEM was caught in a so-called short squeeze after betting Wolfsburg, Germany-based Volkswagen’s stock would fall. Merckle lost at least 500 million euros on the bets on VW stock, people familiar said on Nov. 18. VEM lost “low three-digit million euros” on VW stock, the company said in November.

A “short squeeze” sounds inconspicuous enough; you wouldn’t tell it by Bloomberg’s language, but Merckle’s Volkswagen bet lost out to one of the most masterful hacks of the financial system in history.

For those of us who don’t live and breathe finance, this is that story.

In 1931, Austro-Hungarian engineer Ferdinand Porsche started a German company in his own name. It offered car design consulting services, and was not a car manufacturer itself until it produced the Type 64 in 1939. But things got interesting for Porsche long before then.

In 1933, he was approached by none other than Adolf Hitler, who commissioned a car designed for the German masses. Porsche accepted, and the result was the iconic Beetle, manufactured under the Volkswagen (lit. “people’s car”) brand. Today, Porsche’s company is one of the world’s premier luxury car brands, while Volkswagen (VW) is itself the world’s third-largest auto maker after General Motors and Toyota.

Three years ago, Volkswagen found itself fearing a foreign takeover. Porsche, the company, decided to step in and start buying VW stock ostensibly to protect the landmark brand, widely fueling market expectations that it would eventually buy Volkswagen outright. Of course, this isn’t quite what came to pass.

For three years, Porsche kept accumulating VW stock without telling anyone how much it owned. Every time it purchased more, the amount of free-floating VW stock would decrease, driving the stock price up slightly; your basic supply and demand at work. Eventually the share price became high enough that, to outside observers, it wouldn’t have made any sense for Porsche to buy Volkswagen. It would simply have cost too much.

To explain what happened next, I’m going to first tell you about a financial maneuver called shorting.

read the rest of this fascinating tale at Ivan Krstic's blog

Let Them Eat Dirt

Since all instinctive behaviors have an evolutionary advantage or they would not have been retained for millions of years, chances are that this one too has helped us survive as a species. And, indeed, accumulating evidence strongly suggests that eating dirt is good for you.

In studies of what is called the hygiene hypothesis, researchers are concluding that organisms like the millions of bacteria, viruses and especially worms that enter the body along with “dirt” spur the development of a healthy immune system. Several continuing studies suggest that worms may help to redirect an immune system that has gone awry and resulted in autoimmune disorders, allergies and asthma.

These studies, along with epidemiological observations, seem to explain why immune system disorders like multiple sclerosis, Type 1 diabetes, inflammatory bowel disease, asthma and allergies have risen significantly in the United States and other developed countries.

“What a child is doing when he puts things in his mouth is allowing his immune response to explore his environment,” Mary Ruebush, a microbiology and immunology instructor, wrote in her new book, “Why Dirt Is Good” (Kaplan). “Not only does this allow for ‘practice’ of immune responses, which will be necessary for protection, but it also plays a critical role in teaching the immature immune response what is best ignored.”

One leading researcher, Dr. Joel V. Weinstock, the director of gastroenterology and hepatology at Tufts Medical Center in Boston, said in an interview that the immune system at birth “is like an unprogrammed computer. It needs instruction.”

He said that public health measures like cleaning up contaminated water and food have saved the lives of countless children, but they “also eliminated exposure to many organisms that are probably good for us.”

“Children raised in an ultraclean environment,” he added, “are not being exposed to organisms that help them develop appropriate immune regulatory circuits.”

more from the NY Times

As a general rule, meetings make individuals perform below their capacity and skill levels. This doesn't mean we should always avoid face-to-face meetings - but it is certain that every organization has too many meetings, and far too many poorly designed ones.

– Reid Hastie, behavioral scientist

via Jason Kottke

Some Badly Needed Levity


Tectonic Shift

As both large and small corporations lay workers off in increasing numbers, Mike Shedlock has this to say:

In the ConocoPhillips report note the key phrase “We are positioning ourselves in the current business environment to live within our means in order to maintain financial strength.”

Frugality is the new reality, and that applies to businesses and consumers alike. Those not living within their means will be in for a quite a shock if frugality is forced upon them via unemployment.

Social Mood, Not Fed Bureaucrats, Will Define The Future. That mood pendulum has barely begun to shift from consumption to savings. Pendulums do not stop at equilibrium, they always overshoot.

Mike's blog

Airport Car Parking? Z$400bn

That's correct – the cost of parking at the Harare [Zimbabwe] airport is now commonly used as an indicator of the US dollar exchange rate. The charge at the carpark is Z$400bn [that's 400 BILLION dollars] or US$1.

more on Zimbabwe's hyper-inflation in The Independent (U.K.)

Cool...and warm!

DARMSTADT, Germany — From the outside, there is nothing unusual about the stylish new gray and orange row houses in the Kranichstein District, with wreaths on the doors and Christmas lights twinkling through a freezing drizzle. But these houses are part of a revolution in building design: There are no drafts, no cold tile floors, no snuggling under blankets until the furnace kicks in. There is, in fact, no furnace.

In Berthold Kaufmann’s home, there is, to be fair, one radiator for emergency backup in the living room — but it is not in use. Even on the coldest nights in central Germany, Mr. Kaufmann’s new “passive house” and others of this design get all the heat and hot water they need from the amount of energy that would be needed to run a hair dryer.

“You don’t think about temperature — the house just adjusts,” said Mr. Kaufmann, watching his 2-year-old daughter, dressed in a T-shirt, tuck into her sausage in the spacious living room, whose glass doors open to a patio. His new home uses about one-twentieth the heating energy of his parents’ home of roughly the same size, he said.

Architects in many countries, in attempts to meet new energy efficiency standards like the Leadership in Environmental and Energy Design standard in the United States, are designing homes with better insulation and high-efficiency appliances, as well as tapping into alternative sources of power, like solar panels and wind turbines.

The concept of the passive house, pioneered in this city of 140,000 outside Frankfurt, approaches the challenge from a different angle. Using ultrathick insulation and complex doors and windows, the architect engineers a home encased in an airtight shell, so that barely any heat escapes and barely any cold seeps in. That means a passive house can be warmed not only by the sun, but also by the heat from appliances and even from occupants’ bodies.

And in Germany, passive houses cost only about 5 to 7 percent more to build than conventional houses.

more on this great approach in the NY Times


"...we don’t just need a bailout. We need a reboot." Thomas Friedman got it right in that it's : "Time to Reboot America". Unfortunately, everything else prescriptive in the article is garbage.

America does need a reboot but it can't be achieved through top-down stimulus or reconstruction. It has to start at the bottom and grow organically.

NOTE: A reboot begins when simple core process is started which in turn starts another process and so on in series until the entire complex edifice of fully functional system is reconstructed.

So, what does this new, better core process look like? It starts at the community level with a wholesale reinvention that makes networked communities:

Resilient to rapidly propagating global shocks (an inevitable outcome of a global system that is too large, fast, and complex to control).

Highly productive in their ability to produce everything from food to products to energy (they produce wealth). Networked innovation.

Extremely efficient and low cost. This stems from: shorter distances, less energy, less space, less time, less mass, and less information (as in, less management overhead required).

more from cutting-edge thinker John Robb


Taxpayers to be screwed yet again? Muhammad Rafeeq makes an interesting case...

At first sight it was extremely refreshing. A white-collar financial crook raising his hands and pleading guilty to his financial crime. Th is has to be almost a first. Usually financial criminals when caught in the most obvious of wrong-doing plead 'not guilty'. The criminal can be caught boarding the plane, with a suitcase containing US$100mn of someone elses cash, with his mistress holding on to his arm, he will look into the camera with his most genuine 'Tony Blair look of sincerity' and say "What we have here is a misunderstanding.... " You make up the rest of the excuse, there is a million of them.

So yes, an outright confession, "It was me, I chopped down the apple tree" is so against the current socio-political culture it was almost too good to be true. Especially given the pedigree of this perp, the CEO of one of the busiest and most prominent financial exchanges in the world. After his confession the world goes into shock, especially the Jewish world, since affluent members of this community had previously flocked to his door, seeking his world famous high returns. Since his arrest the press is full of people extolling his virtues as a decent human-being and "who would ever of believed it?". It would be so easy for this man to deny any wrongdoing because he could bring out an army of good character witnesses and he could just point at some suspect-looking goy in his hedge fund organisation to lay the blame on.

So a truly heartwarming confession. And it was apparently made to his 2 sons, both of whom who worked for the fund and who had absolutely no idea that this fraud was being perpetrated, until such time as this astounding confession.

But then I started to look more closely at the mix of investors who have lost money. About half of them are professional investing institutions. Look at this quote from the UK's Daily Mail newspaper:

"Full details of the exact losses are yet to emerge. Hedge funds and banks have so far admitted to having around £16billion with Madoff - only half of the total that is reckone d to have been lost. Some of the biggest casualties are Swiss private banks, which have taken hits amounting to about £2.5billion. Spanish bank Santander had £2.1billion of client money with Madoff. HSBC has admitted to lending about £600million to funds who wanted to use debt to gear up their positions with Madoff. RAB capital, the hedge fund that lost huge sums on investing in Northern Rock, has revealed that it is exposed to Madoff to the tune of around £6million."

Now the confession does not look right at all.

It is possible to accept the idea of a Ponzi scheme be played on members of the public, who are ignorant of how such schemes are worked, in fact the schemes are targetted specifica lly at such people. Yet Madoff would have us believe that he managed to convince professional investment companies to put their funds with him without any due diligence being performed. This is clearly nonsense.

I have acted as a professional consultant to major EC and US financial institutions on corporate and institutional credit risk and the idea that anyone in HSBC or Santander could authorise large investment without the internal checks and controls being employed is almost impossible. To try and believe that EVERY institution that invested in Madoff circumvented their internal control procedures IS impossible.

Why is this important? Simple. If someone approaches the HSBC credit risk team, for instance, with a view to making a loan or investing a sum as large as £600m to what is ultimately a single institution (therefore a single counterparty credit exposure) a significant number hoops would have to be jumped through. Firstly there is the credit officer competence limit, which is the maximum amount that a single credit officer may be allowed to authorise. More than his/her limit must be referred up the credit approval food chain. In an institution like HSBC or Santander etc, £600bn or US$1bn will have been referred to the very top of the food chain, the banks' credit committees at the board level. This is an enormous sum and no lacky is going to be able to approve this by themselves, ever.

read the rest of Rafeeq's piece here

and some interesting follo-up thoughts here

It's Your Money

As a commercial real estate attorney, I'm deeply involved with the current complete freeze-up of the commercial lending markets. I have many clients who have sound business practices in the development of commercial real estate.

Suddenly, and coinciding with the Lehman/Goldman fiasco, the commercial lending markets completely disappeared. Not just a slow down, but a complete and total shut down. Loans for which there were commitments were suddenly pulled. Term loans (most in the development world are for 1-2 years at a time) were suddenly not available for renewal putting borrowers in immediate default, or the lender required severe principal reductions in order to for the borrower to renew - severe to the point of not possible.

I'm not talking about over-speculative developers here asking for a bail-out. I'm talking about fiscally responsible developers, on-time payors with pared down staffs, who wrongly believed that the TARP funds going to the major banks would be put into circulation in the credit markets for new loans and renewals, which are the life-blood of the real estate industry. One bank had the temerity to tell me on a conference call that they were using the TARP funds for acquiring other banks, not for new loans or renewals.

And here lies the problem with the Paulson/Bernacke/Frank plan...they once again trusted the banks "to do the right thing", (a la Greenspan), without requiring that the TARP funds go right back into the lending stream through the conduit of the banks. I'm not socialist, but I sure would agree for a Bank of US to come out of this mess. This is happening today, and the warnings are clear, and the results will be catastrophic.

the above was written by a contributor to Josh Marshall's TPM. It dovetails nicely with this AP story on the outrageous stonewalling by U.S. banks which have received billions in TARP funds.

Local Platforms

We are in the midst of radical social and economic change brought on by the emergence of a global system that is completely and utterly uncontrollable -- it is too big, too fast, and too complex to control. Unfortunately, the lack of a global control system means that we face a long series of increasingly severe shocks (due to the system’s tight coupling, each new shock will sweep the world in months), wrecking long standing and established structures with ease. The first shocks, a bubble in energy and a financial crisis, have already done significant damage. More are on the way as the global system moves ever farther from normal patterns of operation.

So, how does this impact the future of architecture and design?

In general, this means that designers will need to focus less on macro or global level needs and much, much more on the needs of the local. Why? The solutions to macro level instability will be found in the development of local community’s that build systems and organizations that enable them to both withstand systemic shocks and prosper based on internal dynamics. This is nearly inevitable since architecture and design flow to sources of growth, and we will only see prolonged growth at the local and not the macro level.

The first change will require architecture and design that transforms previously unproductive spaces – most residences and communities are black holes of productivity – into spaces that can produce value, from food to energy. A home, whether it is an apartment building or suburban residence, in 2025 will gain its value from its ability to efficiently produce necessities, and even income (as measured by the value of the output in local trade), for the owner.

Community design will in turn focus on the creation of platforms that support and catalyze increases in production for the community as a whole.

more from the important, forward thinking John Robb at archinect

If ever there were a man who be-bopped through life with the Theme from Rocky on endless loop in his brain, that man is Tom Friedman. Here's a guy who'd go out to the desert to eat peyote and have a vision of the inside of Best Buy.


Now Do You Understand?

I like to think that this blog attracts a rather sophisticated crowd, so I feel little need to speak directly about the profound importance of the Internet. However, just in case there are a few of your who aren't yet aware of it, I present the following as Exhibit A.

Microwave ovens, collected and programmed (using their simple timers) to play Jingle Bells! (What would we do without the Internet?)


I've avoided using this word for many years, given that its original meaning has been badly degraded, but this...

more from doubleA at the excellent Vimeo video site

A Revealing Glimpse

About five years ago, as I recall, I had an interesting conversation with my friend and Harvard classmate Bill Strauss, who had heard some interesting gossip about our alma mater. It concerned the management of the Harvard endowment. Because the endowment managers--most of them, anyway--were employees of a non-profit, Harvard had to disclose their compensation. Their compensation, like that of most fund managers, was based upon the performance of the part of the multi-billion dollar endowment which they controlled. Putting all that together with the easy money of the first half of this decade had produced striking results. Inidividual managers were receiving bonuses of up to $30 million in a single year. Bill Straus, who sadly died of cancer about a year ago, had an odd mixture of views: he was a social conservative but an economic liberal who believed that the endowment of a university was supposed to benefit the university community, not the men and women who managed it. He was particularly outraged because these bonuses--which, he calculated, would have paid the tuition and fees of an entire Harvard class for one year--were being paid while tuition consistently increased an annual 3-4%. He suggested that we start a protest, and we did. Initially a total of seven classmates joined in: a writer and entertainer (Strauss) two attorneys (both of whom worked thousands of miles from Wall Street), a journalist, a freelance writer who was in the process of becoming a clergyman, and two academics (including myself.) In a series of letters addressed to Harvard President Larry Summers, we made a number of suggestions: that the compensation of any Harvard employee be limited to what the President of the University made (about $750,000); that tuition be frozen and eventually cut back, so that today's students (who were paying more than three times as much for their education, adjusted for inflation, as we did) would not have to begin their careers with a large burden of debt; and that Harvard establish a program of loan forgiveness for students who went into some form of public service. Our campaign immediately attracted significant publicity, and the reaction we received was quite revealing.

continue reading David Kaiser's piece at his blog


Let The Auto Industry Go Bankrupt

The very best thing that can happen to GM and Ford is they go bankrupt. The sooner the better. Congress will then see that the world will not end. Both companies will reorganize. Both companies will keep making cars.

The airline industry did not stop flying when it went bankrupt and the auto companies will not stop producing cars if they go bankrupt. In fact, bankruptcies will eliminate the debt on the books decrease interest payments and make the companies more competitive, if and when they ever get around to producing autos that consumers want instead of what the manufactures want to produce.

Coming out of bankruptcy debt levels and interest on debt will be lower. GM and Ford will be more cost competitive.

Not a single job will be saved by propping up GM. In fact, jobs will be lost and money will be wasted if money is thrown at the problem. GM and Ford are suffering under a burden of debt and interest on debt with no conceivable way of paying that debt back.

Bankruptcy Is The Best Option

Bankruptcy is the best option for the Auto industry. If the union disagrees, let it pledge its pension money as collateral, and let Wagoner pledge his personal wealth as collateral for a loan.

Remember ...
In one year's time, short term borrowing and interest on long term debt has gone up by $2 billion per quarter, $8 billion per year!

In addition, GM's burn rate is $2 billion per month. GM loses money on every car and truck it makes.

more on the auto industry issue from Mike "Mish" Shedlock at his blog

A Video Game?

No, it's actually a Neutrophil (white blood cell) chasing and devouring a Bacterium. Who'd have thought that our immune systems are also a template for rudimentary video games?

Leverage: A Key?

It is worth noting explicitly that WW1 was triggered by an act of terrorism at the end of an era of globalization and strong interdependancy between nations in many ways very similar in flavor to our own.

I think the only real solution to this conundrum is for us to find ways to tone down the ultra-nationalism in target countries. Invoking the proverbial metaphor about applying a match to a keg of gunpowder, I think it is instructive to think about the physics of what happens – the match contains very little in the way of thermal energy, instead it does damage by releasing latent energy stored in the gunpowder. Terrorists are a match, our nationalistic societies are the gunpowder. Rather than trying to find and destroy all the world’s matches, we should be dosing our gunpowder with cold water, thus depriving the terrorists of the leverage they need.

In many ways that one word: Leverage, is the key to many of the problems at this moment in time, from the financial crisis on Wall St. and in the global markets, to the very high degree of specialization of production which comparative advantage has created across our globalized economy (leading to local vulnerability to swings in global markets in the production of something as essential as food), to the ability of small groups of violent non-state actors to cause larger and powerful nations to become temporarily unhinged and act in ways that are both destructive and self-defeating, to the very physical mechanism of architectonic collapse which on 9-11 multiplied the damage and the number of victims in the Twin Towers far beyond what just a normal plane crash would do by releasing the potential energy stored in the structures of the Towers. Energy which we put there in the course of building them up so high.

Our civilization is overly leveraged – much of our recently constructed wealth and power derives from the use it, and that makes us vulnerable to both systemic instability and to external shocks (both natural and man-made). Now we are entering the age of the unwinding of that leverage, which can be either orderly or chaotic. Our task is to try to make it more orderly and less chaotic insofar as we can do so, and to find a way to share out the reduction in wealth which is the downside of this unwinding process in ways which are fair and promote stability rather than inciting violence and greater instability.

In other words, I think the collapse of the Twin Towers on 9-11 is a broad metaphor for many of the challenges we face – to convert a highly leveraged vertical civilization into a more horizontal and less vulnerable way of living. And finding a way to defuse potentially explosive nationalism is one part of this challenge.

the above thought-provoking comment was authored by ThatLeftTurnInABQ from this thread at Obsidian Wings

More other? click here!





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