Wednesday, October 29, 2008

An exchange in 'Follow the money'

blog of Brad Setser:

"October 28th, 2008 at 10:44 pm
Twofish Says:

Where’s the money now?

It was never there.

October 29th, 2008 at 12:05 am
bsetser Says:

2fish — i lack your training in detecting anti-matter, but i would second your thought that “it was never there” … of course, lots of the street got paid as if what wasn’t there was, but that is a different story."

Some effects of the financial crisis on me

My pension is down and expected to go down further. Luckily, Jhansi has a small home run electronics business which mostly caters schools. During labor governments, funds to public schools increse here and the business seems to be doing ok. The funding will be reduced next year due to the crisis. There are other benefits that I have not been using; one can get some money from the government for babysitting for grandchildren. It seems that we will be ok for a while. I have been contributing a bit to charities here and in India. The instinct is to get rid of the money while I still have it since the poorer may be suffering more. Growing vegetables is an option but there are water restrictions. May have to spend more money to save rain water.
P.S. May be Obama will win and things will improve. But one had such hopes before with Nehru, Indira Gandhi, Rajiv Gandhi and others. there were changes but not as much improvement as one hoped.
P.P.S. Felix Salmon has a post The Financial Crisis Hits the World's Hungry.

From the comments

Derek Wall in the comments to an earlier post on 'Curbing Growth' links to this very readable post of his Growth is madness!. The post also has a link to a longer article of his broaching on possible solutions.

Tuesday, October 28, 2008

Normalization of US-Cuba relations

at least in science can benefit both countries say scientists in Science Magazine:
"Restrictions on U.S.-Cuba scientific cooperation deprive both research communities of opportunities that could benefit our societies, as well as others in the hemisphere, particularly in the Caribbean. Cuba is scientifically proficient in disaster management and mitigation, vaccine production, and epidemiology. Cuban scientists could benefit from access to research facilities that are beyond the capabilities of any developing country, and the U.S. scientific community could benefit from high-quality science being done in Cuba. For example, Cuba typically sits in the path of hurricanes bound for the U.S. mainland that create great destruction, as was the case with Hurricane Katrina and again last month with Hurricane Ike. Cuban scientists and engineers have learned how to protect threatened populations and minimize damage. Despite the category 3 rating of Hurricane Ike when it struck Cuba, there was less loss of life after a 3-day pounding than that which occurred when it later struck Texas as a category 2 hurricane. Sharing knowledge in this area would benefit everybody."

Monday, October 27, 2008

Why Oh Why Can't We Have Better Economics Blogs?

Echoes of Dean Baker's post from
David Warsh's What Just Happened:
"But you would never have a clue that any of this had happened from three of the most widely-read economists’ blogs, the Freakonomics site, J. Bradford Delong’s Semi-Daily Journal, or N. Gregory Mankiw’s blog. Why? Because they are economists, and not committed to “without fear or favor” news, though they deliver plenty of interesting tidbits over the course of a week. Besides, Shleifer is on the board of directors of the Becker Center on Price, where Freakonomics’ Steven Levitt teaches. DeLong, who worked under Summers at the Treasury Department, has been Shleifer’s friend since the two were college roommates. Mankiw regularly touts his colleague for a Nobel Prize.
But neither would you have known much about it from coverage in The New York Times, at least not until the bitter end; or from the Washington Post (except for a column by David Ignatius in 1999); and just barely from the Financial Times, where Summers now a star columnist; or, for that matter, would you have learned of it from Paul Krugman’s twice-weekly columns in the Times. Why the lack of interest in what was, after all, a pretty interesting story? Perhaps because newspapers are run at least partly for the benefit of their sources; editors are reluctant to bite the hand that feeds. (In contrast, The Wall Street Journal, which broke story, did an excellent job.)"

FT endorses Obama

Obama is the better choice:
"The challenges facing the next president will be extraordinary. We hesitate to wish it on anyone, but we hope that Mr Obama gets the job."

Curbing growth

at least in 'developed' countries. From Special report: Nothing to fear from curbing growth (via EconoSpeak):
"The absurdity of our situation is illustrated by the way our economy profits from selling back to us the pleasures that we have lost through overwork: the leisure and tourist companies that sell us "quality time"; the catering services that provide "home cooking"; the dating and care agencies that see to personal relations; the gyms where people pay to walk on treadmills because the car culture has made it unsafe or unpleasant to walk outside. As the economy continues to expand, consumer culture becomes ever more reliant on our willingness to accept this."
This article from New Scientist has links to several articles on sustainable growth one of which is Why politicians dare not limit economic growth:
"If we do not go out shopping, then factories stop producing, and if factories stop producing then people get laid off. If people get laid off, then they do not have any money. And if they don't have any money they cannot go shopping. A falling economy has no money in the public purse and no way to service public debt. It struggles to maintain competitiveness and it puts people's jobs at risk. A government that fails to respond appropriately will soon find itself out of office.

This is the logic of free-market capitalism: the economy must grow continuously or face an unpalatable collapse. With the environmental situation reaching crisis point, however, it is time to stop pretending that mindlessly chasing economic growth is compatible with sustainability. We need something more robust than a comfort blanket to protect us from the damage we are wreaking on the planet. Figuring out an alternative to this doomed model is now a priority before a global recession, an unstable climate, or a combination of the two forces itself upon us."
All this may be afterGathering Storm which is drawing a lot of comments in Naked Capitalism.
See also Is a Currency Crisis Next? in Economist's View.

Saturday, October 25, 2008

Comments from two who predicted the crisis

Roubini says:
"... if - as likely - the capitulation panic continues today and in the next few days authorities may be forced - as I argued yesterday - to close down financial markets for a week or more in the next few days. We have reached the scary point where the dysfunctional behavior of financial markets has destructive effects on the financial system and - much worse - on the real economies. So it is time to think about more radical policy actions and government interventions of the type I discussed in my London talk yesterday."
Dean Baker says:
"In fact, the problem is not that "we" cannot see events that far in advance. The problem is that the Federal Reserve Board and the economics profession as a whole functions more like a fraternity than a real forum for debate and truth seeking. Those whose views are taken seriously mimic the views of those with status and power within the profession, they do not think independently.
The failure of the economics profession to recognize the bubble and the harm that it would cause was due to the sociology of the profession. For any competent economist, the bubble was easy to see and the damage that its collapse would cause was entirely predictable."

Friday, October 24, 2008

A thoughtful article about blogging

by Andrew Sullivan Why I Blog (via Chris Blattman). One aspect of blogging:

"A good blog is your own private Wikipedia."

A recent entry in Andrew Sullivan's Blog:
Why He's Winning.

Thursday, October 23, 2008 summary of three articles on looming food crisis

Answers to the food crisis:
"Joachim von Braun, director-general of IFPRI, discusses high priority policy responses including: expanding emergency responses and humanitarian aid; freezing biofuel production; eradicating export bans and investing in rural infrastructure and agricultural research. These changes must be incorporated on a global scale, von Braun says, possibly led by the UN and major groups of developing country players.

Josette Sheeran, executive director of the World Food Programme (WFP), discusses WFP activities, including their food-for-assets programme used to train local populations, school feeding for around 20 million children and disaster-preparedness activities including canal-building and river bed restoration. Sheeran calls for more agricultural research and higher investment across the value chain.

Namanga Ngongi, president of the Alliance for a Green Revolution in Africa, discusses the policy implications of high food prices for Africa. Policies are needed, he says, to create sustainable food production driven by advances in productivity rather than by expansion of cultivated area.

He calls for focused plant-breeding efforts on staple food crops that include training for plant breeders. He highlights the need for better fertiliser procurement practices and increased African fertiliser production, and calls for an improvement in both financial services and infrastructure."
Link to the articles.

Some links to questions I had

except that I do not understand the answers well.

'Keep things in cash' says Roubini in Roubini on CNBC .

It is more Minsky than Marx says a Marxist in Marx: less relevant.

Brad Setser in The end of Bretton Woods 2?:
"...Bretton Woods 2, as it evolved, hinged both on the willingness of foreign central banks to take the currency risk associated with lending to the US at low rates in dollars despite the United States large current account deficit AND the willingness of private financial intermediaries to take the credit risk associated with lending at low rates to highly-indebted US households.
The second leg of the chain collapsed before the first. And it collapse looks set to deliver a nasty shock to everyone – including the countries that supply the US with vendor financing."
And Yves Smith develops that theme in Bretton Woods 2, R.I.P.

Dani Rodrik goes back to Tobin Some old wisdom from Jim Tobin:
"The proposal is an internationally uniform tax on all spot conversions of one currency into another, proportional to the size of the transaction." and asks "How about generalizing this idea to all securities transactions, domestic as well as international? If leverage--short-term debt--is a big part of the problem, isn't taxing it an important part of the solution?"

And finally New York Times has a special section Credit Crisis — The Essentials.
P.S. In the comments section of Chris Dillow's post "Marx:Less Relevant", Noah disagrees taking his cue from this quote of Marx:
"The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit."

Recent letter from a cousin

"Recently we entertained Dr. Narisetti Innaiah, a writer and humanist from Andhra, at our house. We met him a few years ago in Washington D.C.

During our conversation he mentioned that he knew uncle VeeraRaghavayya (your father) well and inquired if any one has copies of his speeches and writings. If you have any, he would like copies of them."
It seems that I have some backgound. Unfortunately I do not have any of the copies.
P.S. Wikipedia entry on Narisetti Innaiah.
He blogs at
Narla V.R. in English, and
నా ప్రపంచం in Telugu.

Monday, October 20, 2008

What if he is a muslim?

says Colin Powell:
"Mr. Powell mentioned Mr. Khan’s death to underscore why he was deeply troubled by Republican personal attacks on Mr. Obama, especially false intimations that he was Muslim.
Mr. Obama is a lifelong Christian, not a Muslim, he said. But, he added, “The really right answer is, what if he is?”
“Is there something wrong with being Muslim in this country? No, that’s not America,” he said."
And from The Huffington Post:
"Powell also spoke passionately against the insinuations by some Republicans that Obama is a Muslim.

"Well, the correct answer is, he is not a Muslim, he's a Christian. He's always been a Christian," he said. "But the really right answer is, what if he is? Is there something wrong with being a Muslim in this country? The answer's no, that's not America. Is there something wrong with some seven-year-old Muslim-American kid believing that he or she could be president? Yet, I have heard senior members of my own party drop the suggestion, 'He's a Muslim and he might be associated terrorists.' This is not the way we should be doing it in America.""

Saturday, October 18, 2008

Home miscellany

I used to blow the dust away from the sides of my house thanks to a blower given by one of daughters as a birthday present. Today I found that I was out of potting mix and decided to collect as a substitute the dirt and leaves from one side of the house. It filled about seven medium size pots. I started wondering about the depletion of topsoil if this much cams from a small portion of an enclosed garden. There seem to be many warnings about the dangers of the depletion starting of with
with this one from Wikipedia.
Meanwhile my son bought a flat and moved out. He always seemed phlegmatic but my wife said that he was excited when he entered his own flat. He is the first one in our family without a degree so far. In class 7, he found that the mathes teacher was making mistakes and when he pointed them out, they were given lots of home work. Since I myself fought with my father to study what I wanted, I did not try to guide him. Very early he decided that degrees were not needed to make money and started making money on ebay and poker. He gives money when I ask for charities.I hope that he will find some thing more interesting than making money. One more child to go and grand children started arriving and there does not seem to be any respite from cleaning and cooking.

Friday, October 17, 2008

Razib says

in comment 34 of Communal Violence in Orissa: Trying to Get a Balanced PictureNews:
"the proper response to evangelical obnoxiousness coupled with material inducements is to offer mainstream hindu outreach with material inducements."
Sounds sensible to me. He also says in comment 71 "btw, you do know that muslims in indonesia can convert to christianity and hinduism, right? hundreds of thousands of javanese muslims converted to hinduism afte 1965." A quick google check confirms that conversion to Hinduism have been taking place in Indonesia.
Razib Khan blogs at Gene Expression and Gene Expression Classic on Evolution and Genetics. I occasionally read the posts like his recent rebuttal of Steve Jones view that evolution has stopped in humans. If he has any views on fast evolution views of John Hawkes of which there is a recent exposition in the Seed Magazine article How we evolve,I missed them. He seems to be one of the most erudite bloggers to come out of the subcontinent.

Memo to self

Papers to read (non-technical parts):
1) George A. Akerlof and Paul M.Romer: Looting:The Economy of Bankruptcy for Profit, Brooking Papers on Economic Activity, 1993
2)T.F. Hellmann, K.C. Murdoch,and J.E.Stiglitz: Liberalization, Moral Hazard in Banking, and Prudential Regulation: Are Capital Requirements Enough?, The American Economic Review, 2000
3) M.Bordo and others: Is Crisis Problem Growing?. Economic Policy 2001
4)M. Gianeetti: Bank-Firm Relationships and Contagious Banking Crises, Journal of Money, Credit and Banking, 2003

Thursday, October 16, 2008

Charles Dickens of the call-centre generation

says The Economist about Aravind Adiga after just one book 'The White Tiger'.
Interview with the author as well as links to excerpts from the book here.
His website. Excerpts from an interview
with Stuart Jeffries of The Guardian:
"Well, this is the reality for a lot of Indian people and it's important that it gets written about, rather than just hearing about the 5% of people in my country who are doing well. In somewhere like Bihar there will be no doctors in the hospital. In northern India politics is so corrupt that it makes a mockery of democracy. This is a country where the poor fear tuberculosis, which kills 1,000 Indians a day, but people like me - middle-class people with access to health services that are probably better than England's - don't fear it at all. It's an unglamorous disease, like so much of the things that the poor of India endure.

"At a time when India is going through great changes and, with China, is likely to inherit the world from the west, it is important that writers like me try to highlight the brutal injustices of society. That's what writers like Flaubert, Balzac and Dickens did in the 19th century and, as a result, England and France are better societies. That's what I'm trying to do - it's not an attack on the country, it's about the greater process of self-examination."
P.S. (Nov. 1) I finally read the book. It is readable but his interviews and articles are more interesting than the novel.

Wednesday, October 15, 2008

John Kay on Taleb distributions

In 2003 A strategy for hedge funds and dangerous drivers :
"The practice of bad driving has what I call a Taleb distribution, after one of the themes in Nassim Nicholas Taleb's brilliant Fooled by Randomness. A Taleb distribution has the property that many small profits are mixed with occasional large losses. Overtaking on the inside is an activity with a Taleb distribution....
Many apparently successful traders and business people are still on the upside of their Taleb distribution. They are accidents waiting to happen. It puzzled me for years that so many organisations believed they were making money out of proprietary trading in securities markets. These businesses were trading mostly with each other: since there is no perpetual motion, where did the money to fuel the system come from? From Taleb distributions.

Arbitrage in financial markets generates a continuing stream of small profits. Large losses are exceptional items. They are the product of misjudgments, rogue traders, unpredictable events and the failures of risk control. The same misjudgments, rogue drivers, unpredictable events and system failures that lead to crashes on the French motorways.

We find Taleb distributions not only on the road and in financial institutions. Hedge funds make them accessible to a general public. Business people learnt centuries ago that you can water the milk again and again and again. Until Taleb strikes back: people notice and take their custom elsewhere. Marks and Spencer, the UK retailer, pushed to the limit of what its customers could stand until it discovered that it had crossed that limit. Banks have treated their account holders the same way. Eventually, you pass on the inside once too often.

Evolution favours Taleb distributions. The gene pool of dreadful French drivers is depleted by road accidents - but only at the rate of 8,000 a year. Most young Frenchmen make it to their dates. Evolution within organisations has a similar bias. Someone who makes steady, small gains ranks as a safe pair of hands and is promoted until he meets his apotheosis."

and yesterday Banks got burned by their own ‘innocent fraud’:
"I have several times in this column described the Taleb distribution of regular small profits interspersed by large losses. Taleb distributions are the basis of the carry trade – which exploits interest rate differentials – and many types of statistical arbitrage. Taleb distributions are exploited by traders in hedge funds and at proprietary trading desks.......
Ponzi schemes, Taleb distributions and martingales, revenue recognition and mark-to-market accounting: these are the means by which successive generations of financial hotshots perpetrate what John Kenneth Galbraith described as innocent fraud. This is the process that systematically benefits one group at the expense of another but generally falls short of outright criminality.

But to benefit from the innocent fraud, you must be organiser rather than participant. In the New Economy, banks collected commissions on transactions but limited their own direct involvement. The participation of banks in the recent round of follies brought humiliation. Is the deception of others more or less venal when one has also deceived oneself? That question must be left for moral philosophers – and historians of our era – to answer."
P.S. From today's Bloomberg Taleb's `Black Swan' Investors Post Gains as Markets Take Dive ( via a comment in "Taleb vs Economists")
P.P.S. Yves Smith's reaction to "Innocent Fraud":
"I much prefer the terminology and analysis of George Akelof and Paul Romer. From the abstract of their paper, "Looting: The Economic Underworld of Bankruptcy for Profit""

A Ph.D at the age of 91

The story of a scholar, at 91:
"The Italian immigrant has been awarded a PhD in Spanish literature — at the age of 91. His dissertation — written in Spanish — explored the work of the "esoteric theorist" Spanish writer Carmen Martin Gaite, and her experiments with the art of storytelling."
With longer working lives, I hope that there will be less emphasis on training from cradle to get in to the work force and more emphasis for a broader and longer education.

Tuesday, October 14, 2008


Using expertise:
"FORMER Foreign Minister Alexander Downer has joined Kevin Rudd's infrastructure chief, businessman Sir Rod Eddington, in advising a secretive British firm that sells intelligence on government policy intentions - including those in Australia - to big business."
And a data base to save souls. May be useful to intelligence organizations and NGOs. Clicking on 'start here' takes you to reached and unreached territories.
P.S. Eddington quits British intelligence firm over 'conflict'.

Grain filling

Researchers pinpoint gene that 'improves rice yields':
""By selectively growing only those strains of rice with heavier grains, humans for thousands of years unknowingly have been increasing the frequency of rice populations that had modifications in the GIF1 gene," says co-author Ma Hong, a professor of biology at the US-based Pennsylvania State University.

The clear molecular mechanism can now be further used in cultivation. "Many rice varieties with high yield potential — including 'super-rice', usually with big panicles [large number of grains] — often suffer from bad grain filling. We believe that improvement of grain-filling, and hence grain weight, will greatly increase yield potential," He told SciDev.Net.

Separately, in the same issue of Nature Genetics, a team of Chinese scientists at the Beijing-based China Agricultural and Tsinghua universities report the molecular mechanism behind the ancient rice domestication practice of transforming limp growth of ancestral wild rice to erect growth, a critical event in rice domestication that improved plant architecture and increased grain yield.

They found that limp growth of wild rice is controlled by a gene called PROG1 (Prostrate Growth 1) and many modern rice cultivars disrupt PROG1 function and inactivate its expression, leading to erect growth, greater grain number and higher grain yield in cultivated rice."

Description of Krugman's work

and links from Tyler Cowen and Alex Tabarrok in the posts Paul Krugman wins Nobel Prize and What is New Trade Theory?.
And lot of venom from some of the loyal readers of MR. Probably in other countries most would be pleased with one of their countrymen winning a Nobel prize.
P.S. Brad DeLong has a post Crooked Timber Is Having a Contest! on such comments.
P.P.S. Krugman himself
on his work.
Jonathan Dingel of Trade Division is upset (I guess that strong democracies lead to polarization and distortions)and has three posts:
In defence of Krugman
More Krugman
Krugman, international trade, and facts
P.S. I was wrong about reaction in other countries. Aravind Adiga's Booker prize seems to be drawing similar reactions in India.

Dalit shot for entering temple

Manoj Chaurasia in The Statesman (via Shiva Shankar):
PATNA, Oct. 11: A different face of fanatism comes to fore when Dalits in Bihar are being killed and brutally tortured for entering temples and offering prasad.
Despite various claims by the NDA government, Dalits continue to be on the receiving ends when we talk of human rights and liberties. The just-concluded navratra did nothing less than adding fuel to the fire. While others were engrossed in festivities, at least three incidents of violence took place where people belonging to Dalit community were kicked, punched and prohibited from entering temples. Those who dared to defy this “unwritten law” were shot. Incidentally, the downtrodden class that constitutes nearly 15 percent of Bihar’s total population of 90.2 millions, has always been used as a key vote-bank by almost every political parties during the elections.
The latest incident of atrocities was reported from Nalanda ~ the home district of Bihar chief minister Mr Nitish Kumar ~ where a Dalit youth was shot because he had entered a temple and offered prasad there. The incident took place last night in Giyar village of Nalanda, the district where Buddha and Mahavira had preached the message of “social harmony” and “breaking of caste barriers”.
Police said a fight broke out after a few people belonging to a Dalit community offered Prasad to the Durga idol without waiting for the upper-class people do it first.
The clash left many injured from both the communities. Eventually, some upper caste men opened fire on the dalits, killing one Kalu Paswan and injuring a few others. The local superintendent of police, Mr Vineet Vinayak, said police had arrested two of the four persons who were named in the FIR. He said that land dispute between the two community could also be the reason behind this murder.
Similarly, in Indrath Khurd village under Bikramganj block of Rohtas district, the dalits were prohibited from entering a Kali temple and worship there by the upper caste villagers during the puja. The so-called ban was imposed on 7 October. The level of the discrimination could be figured out from the fact that drum-beaters passed through the streets of the village to inform the dalit villagers of the ban imposed on their entry into the temple. However, they were permitted to pay obeisance to the Goddess from outside the temple boundary. The ban on the entry of dalits inside the temples is very common in Rohtas, according to reports.
The same day, about a dozen houses belonging to dalit villagers were set on fire by the upper caste people at Mushari-Navtolia village in Khagaria district.

P.S. Professor Shiva Shankar is a mathematician and works on a program "Scholarships for Children from Scavenging families” . A flavour of the scavenger problems:
The Big Necessity: Latrine Rights in India

Monday, October 13, 2008

We are not supposed to be talking about this

In discussions with Indians or people of Indian origin, I find that mention of caste is often frowned upon unless the group consists of people of one caste. I am not sure whether this is fruitful. Recently, there has been resentment from Hindus about conversions to other religions. It seems to me there were a lot of conversions to Hinduism within India and South East Asia in the old days, and conversions to both Islam and Hinduism in East Bengal until 18th century (Richard Eaton's book on Bengal frontier). For some reason or other, Hindus have not been trying to convert others on a large scale in recent times. In any case, the discussion of the role of caste in the conversions and the opinion of Dalits about Hinduism or conversions have not been prominent in the discussions that I have seen. Similar problems with respect to black white differences have been studied by some scientists. Recent experiments from Norton, Sommers and others have been reported in Sciencemagazine and discussed in 3quarksdaily. Similar research goes back to Color Blindness and Interracial Interaction by Michael I. Norton, Samuel R. Sommers, Evan P. Apfelbaum, Natassia Pura, and Dan Ariely, and earlier papers.
Samuel Sommers reports these results off and on in his blog at Psychology Today. Here is a recent post ''I don't think we're supposed to be talking about this...'' . Excerpt:

"So efforts at strategic colorblindness, attempts to claim that one literally doesn't see race, are suspect for a number of reasons. First, they're clearly disingenuous, as we know from brain imaging studies that race is one of the very first characteristics we notice when we see a face, sometimes in only 150 miliseconds. Second, they come at the expense of communication clarity and efficiency. And third, they don't even work as intended, as they often contribute to making a lousy impression on others as you stumble through an interaction too distracted to let your real personality show.

Of course, none of this means we should talk about race all the time or always use race in describing other people. As I'll discuss in another post soon, sometimes mentioning race in a description of someone provides a clue that you are indeed biased by race. But as our research illustrates, pretending that we don't notice race is not only silly, it's also counterproductive. We do notice race. Nobody, Dr. King included, ever asked us not to. He just dreamed that one day we wouldn't judge each other on the basis of it."

Are Americans different from the rest?

I guess that most nations have some national characteristics but as Roubini says when U.S. sneezes Rest of the World Gets the Cold and we have to pay attention to U.S. The following article Hockey moms and capital markets by Spengler seems to explain a bit. Excerpts:
"What does America have that Asia doesn't have? The answer is, Sarah Palin - not Sarah Palin the vice presidential candidate, but Sarah Palin the "hockey mom" turned small-town mayor and reforming Alaska governor. All the PhDs and MBAs in the world can't make a capital market work, but ordinary people like Sarah Palin can. Laws depend on the will of the people to enforce them. It is the initiative of ordinary people that makes America's political system the world's most reliable......
Provincial America depends on the initiative of ordinary people to get through the day. America has something like an Education Ministry, but it has little money to dispense. Americans pay for most of their school costs out of local taxes, and levy those taxes on themselves. In small towns, many public agencies, including fire protection and emergency medical assistance, depend almost entirely on volunteers. People who tax themselves, and give their own time and money for services on which communities depend, are not easily cowed by the federal government or by large corporations. .........
The fact that ordinary people safeguard their rights and have the means to challenge established interests does not exclude the possibility of fraud on a grand scale.

Asian investors were cheated by a conspiracy of the financial industry and the ratings agencies, which sold them ostensibly low-risk securities that turned out to be toxic. The just-approved US$700 billion support package for American banks sets America back to a regime of oligarchy, according to New York Times columnist David Brooks. Despite this fraud and its attendant humiliation, and despite the deterioration of governance in American markets, Asian investors are putting more rather than less money into America, judging from the decline of Asian currencies against the dollar in the course of the crisis.
It is true that Asian economies depend on American consumers and an American recession is bad for Asian currencies. But why don't Asians consume what they produce at home? The trouble is that rich Asians don't lend to poor Asians in their own countries. Capital markets don't work in the developing world because it is too easy to steal money. Subprime mortgages in the US have suffered from poor documentation. What kind of documentation does one encounter in countries where everyone from the clerk at the records office to the secretary who hands you a form requires a small bribe? America is litigious to a fault, but its courts are fair and hard to corrupt."
See also Rahul Sidhardhan's response in the comments section.
More about the cheating from Kyle Bass who made billions betting on housing downturn:
"He told me that the “real money” (US insurance companies, pension funds, etc) accounts had stopped purchasing mezzanine tranches of US Subprime debt in late 2003 and that they needed a mechanism that could enable them to “mark up” these loans, package them opaquely, and EXPORT THE NEWLY PACKAGED RISK TO UNWITTING BUYERS IN ASIA AND CENTRAL EUROPE!!!! He told me with a straight face that these CDOs were the only way to get rid of the riskiest tranches of Subprime debt."

Sunday, October 12, 2008

Shuttle driver who missed a Nobel prize

From The Huntsville Times:
"The Huntsville resident devoted his early career to studying the mysterious Aequoria Victoria jellyfish, correctly theorizing the green fluorescent protein that gives the jellyfish its glow could be used to highlight molecular functions that would otherwise be invisible to scientists. In 1988, the American Cancer Society gave Prasher a $220,000 grant to try to isolate and copy the gene responsible for the jellyfish's glow.

He eventually succeeded, but the grant money ran out.

When fellow scientist Martin Chalfie of Columbia University called in the early 1990s looking for a copy of the gene, Prasher gave it to him. He also gave a copy to Roger Tsien, a researcher at the University of California, San Diego.

"I could have hung onto the gene," Prasher said during his lunch break Thursday. "But when you're in that environment and losing public funds, you've got an obligation to share. I gave it away, and they took it and ran with it."

Did they ever. On Wednesday, Chalfie, Tsien and the man who discovered green fluorescent protein in the early 1960s, Osamu Shimomura, won the Nobel Prize in chemistry for helping turn the substance into a vital biotechnology tool. They will split $1.4 million in prize money."
More information in ScienceNews.

A recent letter from Pen India

Bhaskar and Space Bar carry a letter from Pen India. Here it is:

Dear Colleagues,

We write to express our anguish and outrage at the continuing brutalities visited upon Christian communities and places of worship in Orissa and Karnataka, and elsewhere, as well as at the pusillanimous attitude of our political leaders towards the perpetrators of these atrocities.

While the police have stood by and watched churches being desecrated and acts of assault and rape carried out, the Central Government has reacted vigorously only after representatives of the European Union expressed their concern. The perceived damage to India's international image should not be a greater concern than the actual damage that such violence causes to the inclusive, multi-religious and multi-ethnic character of Indian society.

This violence is a failure of our political institutions and of civil society. It is a consequence of our failure to uphold the principles of the rule of law, mutual understanding, and civil dialogue. Eventually, such violence does not remain confined to a few clearly targeted victims. Rather, it spreads to engulf and destroy the entire society that spawns it, as is evident in neighbouring Pakistan and Sri Lanka, for instance.

The worst contributors to this scenario are politicians who dream of electoral victory at the cost of social catastrophe. The powerful ideal of 'unity in diversity', which has held this country together for six decades, has been seriously imperilled by the use of religious and ethnic prejudice as a political weapon. Intolerance of those different from ourselves, and the abandoning of reasoned discussion to deal with differences, spells the end of the India for which the freedom struggle was waged.

More and more of us must come out and say clearly that we do not share the dreams of these cynical opportunists. Their India is not the India we dream of. The India we dream of is a just society, not an aggressive power.

We call upon the Indian Government to ensure that hate speech is outlawed from the domain of public discourse. We also call upon the Indian Government to outlaw those political parties which, directly or through their cohorts, promote communal discord and encourage violence. The rule of law implies that every citizen's life is sacred. Let the law act decisively to punish those who perpetrate the appalling crimes of pogrom and murder.

Girish Karnad

Salman Rushdie

Amitav Ghosh

Vikram Seth

Ramachandra Guha

Kiran Nagarkar

Amit Chaudhuri

Mukul Kesavan

Suketu Mehta

Ranjit Hoskote

Arundhathi Subramaniam

Sampurna Chattarji

Nancy Adajania

Shobhana Bhattacharji

Romesh Bhattacharji


The PEN All-India Centre

Theosophy Hall

40 New Marine Lines


Bombay 400 020

Saturday, October 11, 2008

Old Telugu songs on youtube are disappearing

Some time ago I wrote about old Telugu songs on youtube:
that "have been recently uploaded on YouTube. Search under VSVutukuri, Mukkamala2020, MadhuraGeetalu, TeluguBoss, vjdnld etc"
All have disappeared. It seems that youtube has a three strikes rule and there were complaints about copy right violations. Those gentlemen have taken a lot of trouble to compile the collections. Sometimes seeing the sceneries, background adds to the attraction of the song. (I was using 'Edukondalavda venkataramana sadduseyaka neevu nidura povayya' from 'Pelli chesi chudu' as a lullaby for my grand daughter. She liked the video more than the song.). I hope that those videos can be resurrected in some site taking due care of the copy right rules.
Some like telugutunnel are still working though erratically. Palleturu has some nice songs, two on 'samkranti', Vemulapalli Srikrishna's 'Cheyeyyi jaikottu telugoda' and Srisri's 'polalananni halaladunni'.

Friday, October 10, 2008

Sepoy gives details of his dissertation

Wherein I Give Deets. Excerpts:
" This dissertation began with the question, Why Muhammad b. Qasim?
Paul Ricoeur offers a way, for the historian, to deal with the methodological challenge of how to study “memory” by focusing on, what he terms, “trace, document and question”. Briefly,

1. to inscribe historical processes into the construction of documentary proof itself (that is the text or artifact that is the object of our historical attention);
2. to investigate the distance between the event, the testimony of the event and the narration of the fact. That is, to explicate ‘what happened’ along with ‘what is said to have happened’
The focus then, is not on some elusive and contestable category of ‘memory’ - whether social, cultural or political - but on the production of text, its relationship to other texts, and to the uses of these texts in remembering and forgetting a particular social past.
Unlike Bhattacharya, it isn’t the “threat” that interests me in these other histories, rather the questions of how and why they are produced, at all. And what they tell us about our presents. Consider this dissertation, a first step."

Reminder about Ramanaidu Institute

With the financial crisis, food problems seem to be forgotten. It is time for appications for free training at the DRNVJIRD (Dr. Rama Naidu Vignana Jyothi Institute of Rural Development). My impression from last year is that thy are not getting as many students as they can train. Here is part of my post from January:

"DRNVJIRD (Dr. Rama Naidu Vignana Jyothi Institute of Rural Development) is located near Tuniki vilage, Kowdipally Mandal, Narsapur, Medak District, It is about 70 kilometers from Hyderbad, has an office in Hyderabad: 209, Sree Ramakrishna Towers, Nagarjuna Nagar, Ameerpet, Hyderabad-500 073, Phone:(040)23740933.
One of their programmes is an yearly course and a three monthly course to train young farmers who have finished 10th grade in modern mehods of farming. Both courses start on January 17th but the director Dr. K.N. Rao informed me that they allow a few days of delay. It seems that there were more than 120 students two years ago. The original idea was that they would go back to villages and implement modern methods of farming. But all of them got jobs with agricultural and other firms. Last year, due to lack of publicity and recruting staff, there were less than 30 students. Both courses carry a stipend. Lodging and boarding are provided. It seems a good opportunity and not too late, particularly for Telangana students. There are also some programmes in colloboration with Acharya Ranga Agriculural University."

Thursday, October 09, 2008

Effects of the financial crisis on micro finance

Center for Global Development has several articles on the possible effects of the financial crisis on developing countries which I am just beginning to catch up.
An encouraging one by David Roodman says that the effects on micro finance may be minor:
"If the worst happens, all bets are off; otherwise I expect the "macrofinance" convulsions will have minimal repercussions for microfinance. In Indonesia during its crisis in 1997, while large companies and rich people defaulted left and right, the 2.6 million microcredit borrowers of the Bank Rakyat Indonesia hardly skipped a beat. And few at this point are predicting that the U.S. seize-up will trigger a recurrence of such severe economic trauma for developing countries. This time around, many developing countries have a lot of money in the bank, in the form foreign currency reserves.
Meanwhile, most foreign investment in microcredit still comes from people and institutions motivated by charity and already primed to accept great risk -- government aid agencies, the Gates Foundation, wealthy individuals, the $100 million Tufts University fund endowed by eBay founder Pierre Omidyar. I doubt they will suddenly get cold feet. That said, rising skittishness among conventional investors might delay a shift some had foreseen toward commercialization in microfinance."
Mead Over thinks that foreign aid may contract but AIDS Treatment Jobs are a Safe Bet ;
"The U.S. government and other donors are likely to respond to this reality by preserving AIDS treatment funding while cutting other parts of the assistance budget. Other donors will do the same. The result will be that while the number of patients receiving AIDS treatment stalls at close to current levels, funding for HIV prevention and for other parts of the health sector will fall by more than 10% and AIDS treatment expenditure will become an even larger portion of the total assistance budget in 2012 than it is today.

Just as financiers are diverting their resources to U.S. Treasury bills as a "safe haven" in this time of financial uncertainty, those working in HIV prevention or other non-AIDS treatment jobs dependent on foreign assistance may want to think about switching into AIDS treatment jobs as a labor market "safe haven."

Chandan Sapotka consistently updates development news in his blog. Here is a fairly recent post on The impact of financial meltdown in the West on the developing nations .

Two from VoxEu

Nicholas Bloom in The credit crunch may cause another great depression:
"It seems ironic that the greed of Wall Street may have inadvertently achieved what millions of well intentioned scientists, activists and politicians have failed to achieve – a slowdown in global warming."
Esther Duflo in Too many bankers?:
"One must hope that the bail-out packages in Wall Street and in Europe do not convince the best and brightest that the financial sector is still their best option."

Wednesday, October 08, 2008

"Roubini was right" says Felix Salmon

Roubini was Right.
If the link does not work, the substance of the post is in:
Roubini right, kind of a jerk.
P.S.Arvind Subramanyan has A master plan for China to bail out America.
Yves Smith thinks This proposal by Arvind Subramanian in the Financial Times makes quite a lot of sense.

Interesting Telugu Blogs-4

on Dalit related problems.
దార్ల, Darla has several other blogs.
I am more familiar with Untouchable Spring .... అంటరాని వసంతం which is in English but has discussions on Telugu writers and Dalit issues from A.P.
Both the authors are teachers, the first teaches in Hyderabad and the second in Pondicherry.

Nobel omissions in science

In the list from Scientific American, No Nobel for You: Top 10 Nobel Snubs , one of my favourite scientists Lise Meitner leads the list. (via 3quarksdaily)

Tuesday, October 07, 2008

Long-Term Persistence of Extractive Institutions

From Ethnic Cleansing and the Long-Term Persistenceof Extractive Institutions: Evidence from the Expulsion of the Moriscos (via
"The case of Valencia holds important insights into the long-term implications of exploitation for both the exploited and for those who hold power. The economic exploitation of Valencian Muslims for over 300 years suggests that those who benefit from this exploitation may be dooming their descendants to poverty. While the Muslims of Valencia suffered under exploitative institutions for hundreds of years, these exploitative arrangements persisted even after their expulsion. The remaining Christian population remained poorer and less developed over 150 years after the expulsion due to the persistence of these extractive arrangements."

May be time for earth boxes

Water problems in Melbourne and we can only water plants twice a week. May be time for earth boxes Farmer's invention helps UN fight against hunger or this .

Monday, October 06, 2008

mrajshekhar's tihi memories

After more than one and half years mrajshekhar posts again:so long, and thanks for all the visits . Read and despair.
Correction: Rajshekhar's last post was in february this year

Interesting Telugu blogs-3

చైతన్యం : Very few posts but has one of the clearest expositions of religious strife in India.
(Added on 8th October:In the comments section, the blogger says (rough translation)that instead of depending on a list of dos and don'ts, one should look to the context in which such are done. And he goes on to say Hinduism provides opportunities and freedom for such. I wonder what Dalits think of this. It is probably time to look at Dalit blogs. Here is one from a Telugu person but the artcles are mostly in English:
Untouchable Spring .... అంటరాని వసంతం )
సమకాలీన సంగతులపై ఓ తెలుగోడి గోడు
:contemporary issues, some of them cross-national.
శ్రీనివాసం : Traditional songs, sometimes with explanations and links to recordings.

Talking of religion, a review article The Origin and Evolution of Religious Prosociality by Ara Norenzayan* and Azim F. Shariff (needs subscrption) "examines empirical evidence for religious prosociality, the hypothesis that religions facilitate costly behaviors that benefit other people."
Among the conclusions:
"The preponderance of the evidence points to religious prosociality being a bounded phenomenon. Religion's association with prosociality is most evident when the situation calls for maintaining a favorable social reputation within the ingroup."
"Although religions continue to be powerful facilitators of prosociality in large groups, they are not the only ones. The cultural spread of reliable secular institutions, such as courts, policing authorities, and effective contract-enforcing mechanisms, although historically recent, has changed the course of human prosociality. Consequently, active members of modern secular organizations are at least as likely to report donating to charity as active members of religious ones (42). "
Somewhat related discussion on gossip in an article on gossip in Scientic American Mind. This particular issue has several free articles (both links via Evo.psychology group).
P.S. From Solving the puzzle of prosociality , I take 'prosociality' to mean 'behaviour which is group-beneficial but personally costly'. Gintis seems to have slowly abondoned the term but it is common in literature and I cannot find the meaning in dictionaries or defined in the papers that I have seen.

Friday, October 03, 2008

An economist wins the 2008 'Ig Nobel' for medicine

Ig Nobel prizes celebrate a different kind of science:

" Over the 18 years, the Ig Nobel award has even become something to covet.

I've won quite a lot of academic awards; I can't think of one that makes me happier than this one," said Dan Ariely , a Duke University economist and author of the book "Predictably Irrational: The Hidden Forces that Shape our Decisions," who said his deserving work has been passed over year after year and is elated to finally get an Ig Nobel.
Ariely's Ig Nobel-winning work demonstrates the secret behind many of the Ig Nobel-winning scientists: that hidden in the humorous work is a legitimate scientific point.

Using Craigslist, Ariely recruited volunteers for a study, and printed fake brochures describing an invented pain-killer that was actually just a placebo pill. Some were told the drug was expensive; others were told it was cheap. The subjects were given electric shocks before and after they took the pill. Those who got the pricey fake medicine reported a bigger reduction in pain than those with the cheaper fake.

The experiment, published in the prestigious Journal of the American Medical Association, suggested that marketing and packaging of a drug may play a role in its effects.

Others noted that while their work may seem wacky to outsiders, it isn't all that different from normal work in their field."
P.S. See also

Ken Rogoff on the wisdom of the bail-out

posted in Ecnomist's View. This is a debate which I have difficulty following.But it affects all and we do vote. I think that one has to make an effort to follow and get some feel for the 'main' inicators in the debate. More technical discussions are in blogs like 'Naked Capitalism' linked earlier. At the moment, the feel I get for the debate is similar to the one expressed by Ken Rogoff in the above article which Dani rodrik also approvingly mentions. Here is a passage from the article:
"Does such nitpicking fail to recognize the urgency of fixing the financial system? Isn’t any plan better than none? I, for one, am not convinced. Efficient financial systems are supposed to promote growth in the real economy, not impose a huge tax burden. And the US financial sector, in greasing the wheels of the real economy, has been soaking up an astounding 30% of corporate profits and 10% of wages. ... Isn’t it possible, then, that rather than causing a Great Depression, significant shrinkage of the financial sector, particularly if facilitated by an improved regulatory structure, might actually enhance efficiency and growth?"
The full article is linked in Mark Thoma's post. A passage from the original article:
"This brings us back to the US treasury’s plan to spend hundreds of billions of dollars to unclog the subprime mortgage market. The idea is that the US government will serve as buyer of last resort for the junk debt that the private sector has not been able to price. Who, exactly, does the treasury plan to employ to figure all this out? Why, unemployed investment bankers, of course!"

Thursday, October 02, 2008

Interesting Telugu Blogs-2

Contemporary issues and politics: Chaduvari and hridayam. More from links there.
Earlier post here.
P.S. I think that the second blogger is the same Dilip that I met a few years ago. Recently, I wrote to him enquiring about the progress of The System of Rice Intensification in A.P. and he has kindly provided the details.

Yves Smith at bloggingheads

with Megan McArdle .
At her blog 'Naked Capitalism', Yves Smith says in Wealthy Investors Hoarding Bullion :
"And in a real meltdown, stores of value are limited. If society is reduced to barter, food, medicine, ammo, and cigarettes get a lot more in exchange than gold."
P.S. I hardly follow the discussion, but I get the feeling that the people here may be coming to grips with the problems of the Paulson plan More Discussion of Why the Bailout Bill Will Not Help Money Markets, Commercial Lending.

Perceptions from Europe?

From remarks by Horace Engdahl , permanent secretary of the Swedish Academy, who will announce this year's Nobel Prize in literature:
"The U.S. is too isolated, too insular. They don't translate enough and don't really participate in the big dialogue of literature. That ignorance is restraining."
(via 3quarksdaily)

Wednesday, October 01, 2008

More from Nouriel Roubini

My daughter Shanti directed me to this post of Nouriel Roubini. She also said that I should read the IMF report mentined in the post, but I have not read it so far. Shanti worked in IT for five years and is now taking courses in economics.

Another cool one from Sudhir Venkatesh

Quote from a comfort worker from How the financial crisis affects the oldest profession (via 3quqrksdaily):
"They are going to come back. I mean, c'mon, it's Wall Street! These guys are never out of the game for that long. That's what's so great about what I do. If you can keep your cool, it's pretty rare that you lose money. Just make sure you keep the man happy."

A Sehwag anecdote from Warne

From The Age:
"WARNE also tells a funny story about Indian batsman Virender Sehwag, one told to him by Englishman Jeremy Snape while Warne and Snape were working together in the IPL. Warne said Sehwag and Snape were batting for Leicestershire against Middlesex when Abdul Razzaq started reverse-swinging the ball in the way that the Pakistan bowlers do. Writes Warne: "Sehwag came up to Snape and said, 'We must lose this ball. I have a plan'. Next over, he whacked that ball clean out of the ground, forcing the umpires to pick another from the box that would obviously not reverse straight away. To which Sehwag said, 'We are all right for one hour'." Noted Warne: "Smart, I say.""