Articles by Noureil Roubini and Robert Gottliebsen point to further financial turmoil.

Nouriel Roubini's Global EconoMonitor

Super-Senior Tranches of CDOs are Worth Much Less than 22 Cents on the Dollar: Another Ponzi Scheme of "Selling" Toxic Garbage with More Leverage

 Nouriel Roubini | Jul 29, 2008

Merrill Lynch decision to "sell" a good chunk of its remaining CDOs at 22 cents to the dollar has been widely praised as the firm finally recognizing the full extent of its losses on these toxic instruments. This batch of $30.6 billion of CDOs was already marked down to $11.1 billion. Now with the "sale" of it to Lone Star at a price of 6.7 billion Merrill Lynch is taking another $4.4 billion writedown and "selling" it at 22% of the original face value.

But is this a market-based "sale"? No way as calling this transaction a "sale" is a joke.

Roubini describes a transaction in which Merril provides the financing for the sale, as the secondary market for these CDOs is "illiquid."  I would describe it as paying the undertaker to dispose of the body.  

Below the fold Robert Gottliebsen of Business Spectator describes the thunder from down under that will waft its way to Wall Street.  No happy talk here.

The US Senate has passed a housing bill Saturday which now will go to the White House. It could have passed Thursday, but Senators refused to accept loss of a favorite feeding trough.  Senator Jim DeMint plays hero.

Sen. Jim DeMint, R-S.C., delayed the final vote because Democrats refused to allow him a vote on a proposal to ban the companies from lobbying or making political donations to lawmakers.

"We can't have the people who are supposed to watch over these organizations getting money from these organizations," DeMint said. "At least if we're going to ask the American taxpayer to be on the hook for billions, possibly trillions of dollars, let's stop this."

Shining light into the heart of darkness!  Every dog shall have his day!

Two recent events brightly illuminate the scope of the problem in Washington.  Former Sen. Fritz Hollings (D-S.C.) has a new book called MAKING GOVERNMENT WORK, and Nicole Sexton, a longtime Republican fundraiser and former Director of Finance for the National Republican Senatorial Committee, has published a fictionalized account of political fundraising, Party Favors.

   This diary is the result of a diary posted by TBG on July 10. I received George Lakoff's latest book, The Political Mind , on Bastille Day, appropriately enough. Lakoff's subtitle is: Why You Can't Understand 21st-Century American Politics with an 18th-Century Brain His thesis is that Progressives still operate with 18th Century Enlightenment views, which do not account for findings from brain science over the last forty years. These findings show the importance of brain structure and function to language use and typical thought patterns we all employ. Few are aware of these findings and their implications.
   Unfortunately, the few that do include Radical Conservative Republican politicians and their strategists, who have digested these findings and learned brilliantly to exploit them to convince the majority of the voting public to support their candidates to the detriment of the self interest of the vast majority of that public. The book is a manual for understanding the way people think so progressives can counter the effects of these Radical Conservatives' tactics, wrest control of government back from them and save the Constitution, Government and society of the United States from their anti-democratic agenda.
   The book is highly readable and I strongly recommend it to everyone who wishes to effectively engage in the current political dialog.  It is compelling and can be followed by anyone with a high school education and an open mind.  While it is written with respect to the American political system and population, I believe it is equally applicable to Europe. Judge for yourselves.

I have found no source from which to "Lazy Quote," so follow me below the fold for selected excerpts and summaries of the main points set forth in the introduction to the book.

The old man who farms with the sea (Click for full story.)

Carl Hodges is growing salicornia, a crop nourished by ocean water that holds the potential to provide food and fuel to millions.

By Marla Dickerson, Los Angeles Times Staff Writer
July 10, 2008
Tastiota, Mexico

A few miles inland from the Sea of Cortez, amid cracked earth and mesquite and sun-bleached cactus, neat rows of emerald plants are sprouting from the desert floor.
The crop is salicornia. It is nourished by seawater flowing from a man-made canal. And if you believe the American who is farming it, this incongruous swath of green has the potential to feed the world, fuel our vehicles and slow global warming.

He is Carl Hodges, a Tucson-based atmospheric physicist who has spent most of his 71 years figuring out how humans can feed themselves in places where good soil and fresh water are in short supply.

The founding director of the University of Arizona's highly regarded Environmental Research Lab, his work has attracted an eclectic band of admirers. They include heads of state, corporate chieftains and Hollywood stars, among them Martin Sheen and the late Marlon Brando.

Some, if not all, of this could be valuable. More below the fold.

Honey bee colonies are collapsing in the United States.  The reasons are unclear. But the Agricultural Research Service of the U.S. Department of Agriculture is on the case.

Colony Collapse Disorder: Researchers Work To Control Varroa Mites, Increase Longevity Of Queen Bees
ScienceDaily (Feb. 16, 2008) -- In response to a fast-spreading syndrome called colony collapse disorder (CCD) that's striking honey bees nationwide, scientists at Agricultural Research Service (ARS) bee laboratories across the country are pooling their expertise. They want to learn what's causing the disappearance of the honey bees that add about $15 billion a year to the value of U.S. crops by pollinating fruit, vegetable, tree nut and berry crops. Some beekeepers have already lost one-half to two-thirds of their colonies to CCD.

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Jeff Pettis, research leader at the ARS Bee Research Laboratory in Beltsville, Md., is a coordinator of the newly established five-year Areawide Program to Improve Honey Bee Health, Survivorship and Pollination Availability. Entomologist John Adamczyk at the ARS Beneficial Insects Research Unit in Weslaco, Texas, helps Pettis coordinate the program, along with Gloria DeGrandi-Hoffman at Tucson, Ariz., and Tom Rinderer at Baton Rouge, La. This is the first such initiative to bring various components of all of the federal bee laboratories together to solve a single problem.

Researchers at Beltsville are attempting to improve the longevity of honey bee queens, find effective controls for Nosema protozoa and varroa mites, and reduce migratory colony stress. In Weslaco, work also focuses on controlling varroa mites and Nosema, reducing migratory stress and developing disease-control measures.

At the ARS Honey Bee Breeding, Genetics and Physiology Research Laboratory in Baton Rouge, Rinderer and colleagues are looking into bee stock evaluation and improvement, with a view toward using genetic selection and colony size to improve early spring buildup.

In Tucson, Degrandi-Hoffman is leading scientists at the ARS Carl Hayden Bee Research Center in studying carbohydrate and protein supplements, Africanized bee stock improvements and varroa mite controls.

The new bee-focused areawide program will also incorporate university partners, apiculturists and many others. By the end of this coordinated five-year effort, researchers hope to have specific recommendations ready for beekeepers to use to manage their bees more efficiently and improve colony survival, especially during long-range transport.

 

Reminds me of reading 1950's apocalyptic British fiction - Promoted by Migeru

From the April, 2008 issue of Scientific American

The Economist Has No Clothes
Unscientific assumptions in economic theory are undermining efforts to solve environmental problems
By Robert Nadeau

Photograph courtesy of Robert Nadeau; Illustration by Matt Collins

The 19th-century creators of neoclassical economics--the theory that now serves as the basis for coordinating activities in the global market system--are credited with transforming their field into a scientific discipline. But what is not widely known is that these now legendary economists--William Stanley Jevons, Léon Walras, Maria Edgeworth and Vilfredo Pareto--developed their theories by adapting equations from 19th-century physics that eventually became obsolete. Unfortunately, it is clear that neoclassical economics has also become outdated. The theory is based on unscientific assumptions that are hindering the implementation of viable economic solutions for global warming and other menacing environmental problems.

The physical theory that the creators of neoclassical economics used as a template was conceived in response to the inability of Newtonian physics to account for the phenomena of heat, light and electricity. In 1847 German physicist Hermann von Helmholtz formulated the conservation of energy principle and postulated the existence of a field of conserved energy that fills all space and unifies these phenomena. Later in the century James Maxwell, Ludwig Boltzmann and other physicists devised better explanations for electromagnetism and thermodynamics, but in the meantime, the economists had borrowed and altered Helmholtz's equations.

Economics is not physics - Diary rescue by Migeru

    * Posted on Wednesday, June 18, 2008
Easing of laws that led to detainee abuse hatched in secret

By Tom Lasseter | McClatchy Newspapers

WASHINGTON -- The framework under which detainees were imprisoned for years without charges at Guantanamo and in many cases abused in Afghanistan wasn't the product of American military policy or the fault of a few rogue soldiers.

It was largely the work of five White House, Pentagon and Justice Department lawyers who, following the orders of President Bush and Vice President Dick Cheney, reinterpreted or tossed out the U.S. and international laws that govern the treatment of prisoners in wartime, according to former U.S. defense and Bush administration officials.

The Supreme Court now has struck down many of their legal interpretations. It ruled last Thursday that preventing detainees from challenging their detention in federal courts was unconstitutional.

The quintet of lawyers, who called themselves the "War Council," drafted legal opinions that circumvented the military's code of justice, the federal court system and America's international treaties in order to prevent anyone -- from soldiers on the ground to the president -- from being held accountable for activities that at other times have been considered war crimes.

McLachy has a series of quality medium sized newspapers .  They appear to have ownership that remains concerned with traditional print journalism standards and they have a history of being right on stories, but only getting recognized for their coverage after the fact. This is thought to be due to the fact that they do not have papers in the largest markets: NYC, LA etc.  They do not get sucked in to MSM "fashion of the day" coverage, but no one notices. They do have a Washington Bureau however, and through it one can access articles in any of their papers. (They have great cartoons!)
Much more below the fold

A large sinkhole sinkhole has formed in East Texas over an apparently collapsing salt dome in a turn of the 20th century oil field. This prompted a cartoon in the Houston Chronicle.  The fact that newspaper running the cartoon is the Houston Chronicle is of at least as much interest as the content of the cartoon. Also of interest to ET members is the label on the cartoon.

NYT arcticle NYT arcticle about sinkhole