Volume 13, Number 13 – 7/15/10

Volume 13, Number 13 – 7/15/10


  • Finland has become the first country in the world to make broadband a legal right for every citizen.
  • Scientists have found the “genetic signatures of exceptional longevity” by studying more than 1,000 people who have reached 100 and comparing them with the general population.
  • An ACLU report documents that law enforcement agencies across America continue to monitor and harass groups and individuals for doing little more than peacefully exercising their First Amendment rights.
  • Blood drawn with a simple needle stick can be coaxed into producing stem cells that may have the ability to form any type of tissue in the body.

by John L. Petersen

KRYON in Berkeley Springs

We’re very excited about Lee Carroll and KRYON coming to Berkeley Springs this weekend. Looks like almost 100 will be attending, but there’s still room for you. It will be a very timely and fascinating event that is sure to provide unusual enlightenment about what might be on our horizon. I’m personally going to be looking for what KRYON has to say about the gulf oil spill and what the potential implications might be from that. Click on the banner to the right and you’ll go straight to all of the information you need to make sure that we reserve a seat for you. Hope you can make it.

The Government and the Gulf

When I last wrote in this space I made mention in passing to the terrorist no-fly list that is maintained by our federal government. It is reported that more than a million names are on this list that restricts who will be allowed to board an airplane within or coming to this country.

While waiting to get a haircut last week I was reminded of this when I came across a piece by Pulitzer Prize winning columnist Leonard Pitts, Jr. Pitts was writing about a class-action lawsuit that has been brought against the government relative to this list by ten very diverse individuals who can’t fly anywhere because their names are erroneously on the list.

These are people “the government deems too dangerous to fly, but too harmless to arrest,” he explains. This is “more than a clever turn of phrase. It is also an apt description of the legal limbo to which the government has consigned an untold number of innocent people in the name of fighting terror.
“Here’s how it is when your name is on the no-fly list:
“They won’t let you fly.
“They won’t tell you why.
“They won’t show you the list.
“They won’t take your name off the list.
“They won’t give you any way to appeal.
“The list, then, is a purgatory to which one can be consigned in perpetuity with neither due process nor judicial review, because one’s name happened to that of some bad person. And there is no form you fill out or person you can talk to to have the error corrected. You’ve simply got to live with it.”

Read the whole piece here . . . and then tell me: Is this fair? Is this right? Is the government really helping us by doing this? It makes me wonder who these rule makers think they are representing or working for. If they really thought that they were responsible to the citizens of this country, would they do things like this?

The question I’m raising is one of motivation and perspective – that lens through which the world is seen which defines and circumscribes the options one believes are available to him or herself. The bigger issue is whether this orientation will allow us to effectively deal with the other, much larger issues that are on our horizon. It does not look encouraging to me. Let me tell you why.

I read the above piece after coming from a community meeting where our mayor (remember the town has 600 residents) was lamenting the fact that the Environmental Protection Agency (the federal government, I presume) had a team in town telling her that a goodly percentage of the town was out of bounds for badly needed economic development because the theoretical 100-year floodplain of the stream going through town would not allow any buildings on the empty downtown land that we’d like converted into economic and community building facilities.

I wondered out loud in the meeting, why, in the face of the gulf oil catastrophe – and many other major environmental problems in our country – our government had nothing better to do than work its way through tiny little towns like ours telling officials how they couldn’t be creative in shaping their future.

Their perspective was not congruent with the scale of the problem.

I had not read Pitts before, so I looked into some of the other things he was writing for the Miami Herald relative to the Gulf oil spill. It was interesting. He said:

An oil rig operated by British Petroleum explodes in the Gulf of Mexico. Eleven people die. As much as 2.5 million gallons of BP oil gushes into the Gulf every day. Fragile eco-systems are wrecked, sea life is slimed, fishermen and boaters who make their living from the Gulf are facing ruin and BP, we discover, had no real plan for handling a catastrophe of this magnitude.

Every election cycle, the people and the politicians join in an act of willful self-deception, a ritualized charade in which everybody knows the truth, but nobody speaks it. Politicians flood the airwaves with commercials which show them walking and talking with the common folk who listen with rapt attention. The final shot frames the candidate with a flag in the background as he or she gazes soulfully into the middle distance and promises to work on our behalf, to always be on our side.

They pretend to mean it and we pretend to believe it.

There it was again. A basic mismatch between the stated function and the actual way the system works.

Now stay with me here. Although it may sound like it, this is not just ranting about the ineffectiveness of government and the need to get those bureaucrats off our backs and out of our lives.

I’m instead thinking here about the extraordinary things that appear to be coming our way in the months ahead and seriously wondering if there is any chance that the institutions that we have developed to deal with issues of this significance are even close to being capable to do so. Are they able to even begin to be effective in this unprecedented environment? Are the coming events going to highlight the fundamental mismatch between government’s abilities and people’s needs? Are we watching the beginning of the end of government as we know it?

Let’s take the oil spill again and I’ll try to build a picture for you of what seems to be happening.

Here is a blog entry by a medical doctor detailing the mental, emotional and spiritual effects of the Gulf disaster. Among other things it says: ‘People are starting to grieve over what they see as the end of their lifestyle and work. Realities are setting in and there is a definite threat of people moving from sad to hopeless.’ The mass public media though is not representing the reality of the mega-disaster; it is instead promoting government and corporate agendas.” (There’s that mismatch again between responsibility and action.)

Think about this. We’re not talking about Haiti here. When was the last time you read anything about an important percentage of the U.S. population “grieving over the end of their lifestyle and work” because of a natural disaster? This is qualitatively different than any other non-human based disaster – even hurricane Katrina – where damage is done, but one can rebuild and continue. Here the impact is such that people are starting to lose hope.

Is that realistic?

Well, in the last two weeks my friend DK Matai started to shine a new light on the situation in a piece he wrote for Huffington Post that laid out a new scenario relative to the disaster. DK tries to get your attention right from the beginning:

As much as one million times the normal level of methane is showing up near the Gulf of Mexico oil gusher, enough potentially to create dead zones in the water. “These are higher levels than we have ever seen at any other location in the ocean itself,” according to sources cited by Reuters. The “flow team” of the US Geological Survey estimates that 2,900 cubic feet of natural gas, which primarily contains methane, is being released into the Gulf waters with every barrel of oil. The constant flow of around 65,000 barrels of crude oil places the total daily amount of natural gas at over 188 million cubic feet. So far, over 13 billion cubic feet may have been released, making it one of the most vigorous methane eruptions in modern human history.uch as one million times the normal level of methane is showing up near the Gulf of Mexico oil gusher, enough potentially to create dead zones in the water. “These are higher levels than we have ever seen at any other location in the ocean itself,” according to sources cited by Reuters. The “flow team” of the US Geological Survey estimates that 2,900 cubic feet of natural gas, which primarily contains methane, is being released into the Gulf waters with every barrel of oil. The constant flow of around 65,000 barrels of crude oil places the total daily amount of natural gas at over 188 million cubic feet. So far, over 13 billion cubic feet may have been released, making it one of the most vigorous methane eruptions in modern human history. (You can read more of DK and his team’s insightful analysis at

So now you’ve got the picture of humans having punctured the surface of an underwater methane bomb, the likes of which no one has ever seen before.

Let me see. Is that what the government is telling us? Is that the analysis that we’re getting from all of these people that we pay to “protect” us?

About the time that DK’s article was published CNN reported that our government essentially shut off freedom of the press as it is associated with the Gulf event. No reporter can now get closer than 20 meters from any activity or installation related to the oil spill. This, even though just a couple of weeks earlier the Coast Guard admiral in charge of the whole affair had reassured everyone that the press would have unfettered access to any location within the operation. And now, BP is apparently colluding with local law enforcement to intimidate journalists.

What happened? Why the change in attitude? Are they trying to cover something up? Have they learned something that they don’t want us to know? In the face of large, rapid change, government’s first (and often only) response is to control. As the level of disruptiveness and significance of an event increases, the trend in policy approaches is clear: provide fewer and fewer options. The no-fly list is a great example of this: constrain everyone. Never illuminate. Don’t incentivize. No innovation. Just control the information and restrain the public. Can you visualize this approach being successful with any really huge disaster? Or a series of disasters? Did it work well with Katrina?

There is a fundamental mismatch between the way government sees the world and the world that is emerging. We have entered an era where the events and potential events are fundamentally such that it is impossible that government as it is presently constituted could ever provide effective solutions. We’re therefore looking into a future that is mismatched with our capabilities and will almost certainly force a redesign of the system and encourage the emergence of something that WILL work – a new world.

We see the indicators of this all around us. In the face of large natural disasters (think Katrina) it is never the authorities who solve the immediate problems of lack of supplies, order and utilities. In fact, as often as not, the folks we pay to provide solve these problems add significantly to the initial post-event crisis.

It is groups of citizens, self-organizing and coming together in ad hoc configurations that put things together initially and get them going again. Corporations step in with supplies. Nongovernmental organizations leap into the vacuum. What is it that allows those kinds of networks to be effective? Communications – telephones and the Internet.

I’m not just picking on the government (although that’s easy to do) – the problem is universal and is reflected in almost every sector of our human systems. The financial system isn’t working, the global economic system may be having a near death experience, the energy sector is seeing major change. We’re seeing the beginning of a new era that is signaled by any of a number of fundamental mismatches between capability and context, but one of the big ones will be the end of government as we have known it.

What comes next? Big punctuations in the status quo set up the distinct ability of the system to reconfigure itself. I certainly don’t know for sure, but think for a minute of the role that the Internet could play in allowing emergent, dynamic, rapidly reconfigurable, relatively transparent “government”. Certainly we’re evolving the capability to field these capabilities in the business area – responding quickly with resources of all kinds to rapidly changing situations.

Also, consider what the response might be to a significant failure of the current system. I could see groups of enlightened individuals vowing never to “do that” again and developing a new framework of values and principles that would underpin the emergence of a new world – a new form of government, new economy, new energy, new agriculture, etc.

These kinds of situations will provide the necessity that is required for humans to reinvent themselves in very basic ways. We will become effective operators (and creators) in the new environment by learning from the past and evolving new capabilities. It could be very profound.

How long will it be before we decide that the old government model is obsolete? May be sooner than you think.


Finland Makes Broadband a Legal Right – (BBC News – July 1, 2010)
Finland has become the first country in the world to make broadband a legal right for every citizen. From 1 July every Finn will have the right to access to a 1Mbps (megabit per second) broadband connection. Finland has vowed to connect everyone to a 100Mbps connection by 2015. It is believed up to 96% of the population are already online and that only about 4,000 homes still need connecting to comply with the law.


NIST Team Advances in Translating Language of Nanopores – (PhysOrg – June 24, 2010)
National Institute of Standards and Technology scientists have moved a step closer to developing the means for a rapid diagnostic blood test that can scan for thousands of disease markers and other chemical indicators of health. The team reports it has learned how to decode the electrical signals generated by a nanopore — a “gate” less than 2 nanometers wide in an artificial cell membrane. For more than a decade, scientists have sought to use a nanopore-based electrical detector to characterize single-stranded DNA for genetic sequencing applications. Now they are being used to identify, quantify and characterize each of the more than 20,000 proteins the body produces-a capability that would provide a snapshot of a patient’s overall health at a given moment.

Surgeons Carry Out World’s First Full Face Transplant – (Telegraph – July 8, 2010)
Surgeons in Paris have completed the world’s first full face transplant including eyelids, facial muscles and even the lachrymal canals which will allow Jerome to cry “naturally”, said Professor Laurent Lantieri, the surgeon who led the operation. Although Spanish medics claimed to have carried out a full transplant in April, Prof Lantieri claimed his was definitely the first, because lips and a full lachrymal system had been swapped – something which was once considered impossible.

Scientists Create 3D Models of Whole Mouse Organs – (Yale University – June 23, 2010)
Yale University engineers have for the first time created 3D models of whole intact mouse organs using fluorescence microscopy. Combining an imaging technique called multiphoton microscopy with “optical clearing,” which uses a solution that renders tissue transparent, the researchers were able to scan mouse organs and create high-resolution images of the brain, small intestine, large intestine, kidney, lung and testicles. They then created 3D models of the complete organs-a feat that, until now, was only possible by slicing the organs into thin sections or destroying them in the process, a disadvantage if more information about the sample is needed after the fact.

Vision Improves with the Right Outlook – (Discovery – April 29, 2010)
According to research by Harvard University psychologist Ellen Langer and colleagues, the placebo effect has astonishing power. New research shows that eyesight markedly improves when people are experimentally induced to believe that they can see especially well. Their expectations actually enhanced visual clarity, rather than simply increasing alertness. The findings add to the evidence that visual perception depends not just on relaying information from your eyes to your brain, but also on experience-based assumptions about what you can see. Those expectations can lead people to ignore unusual objects and events.

Genes That Mean You Will Live to 100 Discovered by Scientists – (Telegraph – July 1, 2010)
A team of researchers at Boston University found the “genetic signatures of exceptional longevity” by studying more than 1,000 people who have reached 100 and comparing them with the general population. While environment and family history are factors in healthy ageing, these genetic variants play a critical and complex role in conferring exceptional longevity they found. The team identified a group of genetic variants that can predict exceptional longevity in humans with 77% accuracy – a breakthrough in understanding the role of genes in determining human lifespan.

Stem Cells from Blood a ‘Huge’ Milestone – (Science News – July 1, 2010)
Blood drawn with a simple needle stick can be coaxed into producing stem cells that may have the ability to form any type of tissue in the body, according to three independent research groups. The new technique will allow scientists to tap a large, readily available source of personalized stem cells. The groups used similar methods to prod certain immune cells in human blood to become induced pluripotent stem cells. The new studies accomplished the reprogramming feat by using viruses to deliver a four-gene cocktail that reverts the cells to a naïve state in which any developmental path is open.


A New Way to Find Earths – (PhysOrg – July 9, 2010)
A team of astronomers from Germany, Bulgaria and Poland have used a completely new technique to find an exotic extrasolar planet. The same approach is sensitive enough to find planets as small as the Earth in orbit around other stars. The group used Transit Timing Variation to detect a planet with 15 times the mass of the Earth in the system WASP-3, 700 light-years from the Sun in the constellation of Lyra. This newly discovered planet is among the least massive planets known to date and also the least massive planet known orbiting a star which is more massive than our Sun.

Ancient Legends Once Walked Among Early Humans? – (USA Today – June 28, 2010)
Siberia’s Denisova cave held the pinky bone of an unknown early human species, a genetics team reported in March. Johannes Krause of the Max Planck Institute for Evolutionary Anthropology, who led the study offered no answer for what happened to this “archaic” human species, more than one million years old and living near their human and Neanderthal cousins as recently as 30,000 years ago. But at least one scholar has an intriguing answer: “The discovery of material evidence of a distinct hominin (human) lineage in Central Asia as recently as 30,000 years ago does not come as a surprise to those who have looked at the historical and anecdotal evidence of ‘wild people’ inhabiting the region,” wrote folklorist Michael Heaney of the UK’s Bodleian Library Oxford.


Large Hadron Collider Rival Tevatron May Have Found Higgs Boson – (Telegraph – July 12, 2010)
The Tevatron, the huge particle accelerator at the Fermi National Accelerator Laboratory in Batavia, Illinois – the most powerful in the world after the Large Hadron Collider – is expected to be retired when the CERN accelerator becomes fully operational, but may have struck a final blow before it becomes obsolete. If the rumors are correct, physicists at Fermi have found the Higgs boson. That is the last of the particles posited by the standard model of particle physics still to be found. It is said to explain why other particles have mass, and its discovery would confirm the standard model.


Methane in Gulf “Astonishingly High” – (Reuters – June 22, 2010)
As much as 100,000 times the normal level of methane gas has been found in some regions near the Gulf of Mexico oil spill, enough to potentially deplete oxygen and create a dead zone. Texas A&M University oceanography professor John Kessler and his crew took measurements of both surface and deep water within a 5-mile radius of BP’s broken wellhead. “There is an incredible amount of methane in there. We need to determine why that is,” he said. Methane occurs naturally in sea water, but high concentrations encourage the growth of microbes that gobble up oxygen needed by marine life. Kessler said oxygen depletions have not reached a critical level yet.

Oil Spread Leaves Horror in its Wake – (MSNBC – June 30, 2010)
This independent footage of the extent of the oil spill, subsequent fires in the water and death of marine life in Gulf of Mexico was taken by conservationist John Wathen. There seems to be no way to get around a 10 second commercial paid for by BP preceding the video clip. However, given what follows, it’s difficult to imagine that this BP public relations effort is going to provide the company with any benefit. See also:

The Gulf Oil Spill as the Unfolding of Prophecy – (Reality Sandwich – June 30, 2010)
Recent articles reveal that there is a gigantic bubble of methane gas underneath the Gulf of Mexico, which has helped to create the enormous pressure that makes it unlikely, if not impossible, that the Deepwater Horizon oil spill can be stopped by human means. Video taken by undersea robots show oil and gas leaking from many fissures in the earth, far beyond the range of the well hole. This suggests that the underground containment structure is cracking apart. If the current effort to build relief wells fails or is ineffective, there are no more known technological fixes available. The article goes on to project various possible subsequent scenarios.

How BP Gulf Disaster May Have Tiggered a ‘World-killing’ Event – (Helium – July 9, 2010)
This article covers much of the same information about the methane bubble and its possible consequences as others in this section, however it also adds some bits. The media has been kept away from the emergency salvage measures being taken to forestall the biggest catastrophe in human history. The federal government has warned them away from the epicenter of operations with the threat of a $40,000 fine for each infraction and the possibility of felony arrests. Why is the press being kept away? Word is that the disaster is escalating. Reports, filtering through from oceanologists and salvage workers in the region, state that the upper level strata of the ocean floor is succumbing to greater and greater pressure. That pressure is causing a huge expanse of the seabed-estimated by some as spreading over thousands of square miles surrounding the BP wellhead-to bulge. Some claim the seabed in the region has risen an astounding 30 feet.

Truth and Consequences – (New Earth News – June 26, 2010)
In this 15-page .pdf file, you may wish to start on page 6, with the first of five scenarios which this author sees as possible outcomes of the Deepwater Horizon disaster.

China Fears Consumer Impact on Global Warming – (New York Times – July 4, 2010)
Even as Beijing imposes the world’s most rigorous national energy campaign, the effort is being overwhelmed by the billionfold demands of Chinese consumers. For example, while China has imposed lighting efficiency standards on new buildings and is drafting similar standards for household appliances, construction of apartment and office buildings proceeds at a frenzied pace. And rural sales of refrigerators, washing machines and other large household appliances more than doubled in the past year in response to government subsidies aimed at helping 700 million peasants afford modern amenities.

Debate on Geoengineering – (Democracy Now – July 8, 2010)
Supporters of geoengineering have proposed radical ways to alter the planet to decrease the level of greenhouse gas emissions. Proposals include creating artificial volcanoes to pollute the atmosphere with sulfur particles, fertilizing the oceans and placing sun-deflecting aluminum foil in the sky. But opposition is growing to geoengineering. This video clip features Indian environmentalist, scientist, philosopher and eco-feminist, Vandana Shiva, and geopolitical analyst and columnist, Gwynne Dyer.


Wolfram/Alpha Computational Knowledge Engine – (Wolfram/Alpha website – no date)
This is an exceptionally fine web resource that can provide computational answers for a remarkable breadth of questions. From the website’s homepage: Wolfram|Alpha’s long-term goal is to make all systematic knowledge immediately computable and accessible to everyone. We aim to collect and curate all objective data; implement every known model, method, and algorithm; and make it possible to compute whatever can be computed about anything.” Listen to the introduction (here) to understand the scope of the site.


Computers Learn to Listen, and Some Talk Back – (June 24, 2010 – New York Times)
The artificial intelligence technology that has moved furthest into the mainstream is computer understanding of what humans are saying. People increasingly talk to their cellphones to find things, instead of typing. Both Google’s and Microsoft’s search services now respond to voice commands. More drivers are asking their cars to do things like find directions or play music. The number of American doctors using speech software to record and transcribe accounts of patient visits and treatments has more than tripled in the past three years to 150,000. Translation software being tested by DARPA is fast enough to keep up with some simple conversations: with some troops in Iraq, English is translated to Arabic and Arabic to English. Later this summer, a new model of the Ford Edge will recognize complete addresses, including city and state spoken in a single phrase.


Guide to Recent Battery Advances – (Technology Review – June 29, 2010)
Electric vehicles, hybrids, and renewable energy have at least one thing in common: if they’re ever going to be more widely used, representing the majority of cars on the road or a large share of electricity supply, batteries need to get significantly better. Batteries will need to store more energy, deliver it faster and more reliably, and ultimately, cost far less. The specific ways batteries need to improve vary by the application, but in all these areas, researchers have been making significant headway.

Blimps Could Replace Aircraft in Freight Transport – (Guardian – June 30, 2010)
Despite languishing in sci-fi B-movies for most of the last 70 years, the British government’s former chief scientific adviser, Professor Sir David King, now director of the Smith School of Enterprise and Environment at the University of Oxford, said several major air and defence companies, including Boeing and Lockheed Martin, were working on designs, and the US defence department had recently made a large grant to help develop the technology.Helium-powered ships could be carrying freight – and even passengers – in as little as a decade’s time.


Scientists Invent First Male Contraceptive Pill – (Telegraph – June 28, 2010)
Researchers in Israel have finally been able to create a oral pill that deactivates sperm before they reach the womb and only needs to be to be taken once every three months. The breakthrough pill could be available in as little as three years, according to the scientist behind the discovery. The pill removes a vital protein in sperm that is required for a woman to conceive. So while sperm still get through to the uterus they are unable to fertilize an egg.

Advance in Quest for HIV Vaccine – (Wall St. Journal – July 9, 2010)
U.S. government scientists say they have discovered three powerful antibodies, the strongest of which neutralizes 91% of HIV strains, more than any AIDS antibody yet discovered. They are now deploying the technique used to find those antibodies to identify antibodies to influenza viruses. The HIV antibodies were discovered in the cells of a 60-year-old African-American gay man, known in the scientific literature as Donor 45, whose body made the antibodies naturally. The trick for scientists now is to develop a vaccine or other methods to make anyone’s body produce them as well.


Researchers Develop Drug Delivery System Using Nanoparticles Triggered by Electromagnetic Field – (PhysOrg – July 8, 2010)
A new system for the controlled delivery of pharmaceutical drugs has been developed by a team of University of Rhode Island chemical engineers using nanoparticles embedded in a liposome that can be triggered by non-invasive electromagnetic fields. liposomes are tiny nanoscale spherical structures made of lipids that can trap different drug molecules inside them for use in delivering those drugs to targeted locations in the body. The superparamagnetic iron oxide nanoparticles the researchers embed in the shell of the liposome release the drug by making the shell leaky when heat-activated in an alternating current electromagnetic field operating at radio frequencies.


U.S. Plans Cyber Shield for Utilities, Companies – (Wall St. Journal – July 8, 2010)
The federal government is launching an expansive program dubbed “Perfect Citizen” to detect cyber assaults on private companies and government agencies running such critical infrastructure as the electricity grid and nuclear-power plants, according to people familiar with the program. The surveillance by the National Security Agency, the government’s chief eavesdropping agency, would rely on a set of sensors deployed in computer networks for critical infrastructure that would be triggered by unusual activity suggesting an impending cyber attack, though it wouldn’t persistently monitor the whole system, these people said. Defense contractor Raytheon Corp. recently won a classified contract for the initial phase of the surveillance effort valued at up to $100 million. Some industry and government officials familiar with the program see Perfect Citizen as an intrusion by the NSA into domestic affairs, while others say it is an important program to combat an emerging security threat that only the NSA is equipped to provide.


Wall St. Congratulates Washington – (TruthOut – June 28, 2010)
This editorial – satire structured as a letter of appreciation from Wall St. CEOs to Washington – contains enough grains of truth that it is worth overlooking the tone.

7 Outrageous Examples of Police Spying and Harassment of Peaceful Activists – (AlterNet – July 3, 2010)
According to a new report by the American Civil Liberties Union (ACLU), law enforcement agencies around the country have acted as diligent Thought Police, relying on dubious justifications to spy on Americans based on little more than their political beliefs. After Cold War, federal agencies enacted new rules against spying on people for their politics. But in 2002, then-Attorney General John Ashcroft, leaning heavily on the attacks of 9/11, suspended those restrictions. Here are 7 examples of what that suspension has encouraged.

Guide to the Sovereign Debt Crisis – (Business Insider – May 13, 2010)
Niall Ferguson of Harvard University provides a perspective on sovereign debt using 41 PowerPoint slides. These slides accompanied his lecture titled “Fiscal Crises and Imperial Collapses: Historical Perspectives on Current Predicaments” at the Peterson Institute for International Economics in Washington. Even without the text of Ferguson’s lecture, the slides are fairly self-explanatory.

States: The New Strategic Defaulters – (Real Clear Markets – July 6, 2010)
As the bond yields of certain US states rise, especially Illinois and California, the comparisons to Greece have been obvious. But there is a key difference: state debt crises are almost entirely a matter of solvency. Because of the long-term nature of most state debts, states face little rollover risk and could even weather a complete loss of access to debt markets – so long as they act to get their books into balance going forward. If the federal government will bail out a state that defaults on its bonds, then default may be a good fiscal strategy: it allows the state to engage in spending that will ultimately be paid for by taxpayers elsewhere.


Death by Gadget – (New York Times – June 26, 2010)
“Blood diamonds” have faded away, but we may now be carrying “blood phones.” An ugly paradox of the 21st century is that some of our elegant symbols of modernity – smartphones, laptops and digital cameras – are built from minerals that seem to be fueling mass slaughter and rape in Congo. Warlords finance their predations in part through the sale of mineral ore containing tantalum, tungsten, tin and gold. For example, tantalum from Congo is used to make electrical capacitors that go into phones, computers and gaming devices. Electronics manufacturers want you to look at a gadget and think “sleek,” not “blood.” Yet now there’s a grass-roots movement pressuring companies to keep these “conflict minerals” out of high-tech supply chains. Using Facebook and YouTube, activists are harassing companies like Apple, Intel and Research in Motion (which makes the BlackBerry) to get them to lean on their suppliers and ensure the use of, say, Australian tantalum rather than tantalum peddled by a Congolese militia.


Aliens Found by Radio Signal? – (NPR – May 26, 2010)
In August, Jerry Ehman, a professor at Ohio State University volunteering with SETI, the Search for Extra Terrestrial Intelligence, saw six numbers and letters on the computer printout in front of him – six symbols that have become one of the grandest riddles in modern science. SETI scientists traced it back to the constellation Sagittarius, just to the northwest of the globular cluster M55. But when they looked for the source, there was nothing there, no planet, no star. Still, the shape of the signal, its narrow AM/FM-like focus, not to mention its surprisingly tantalizing frequency suggested intentionality. For scientists, a big puzzle still is: Why only one signal? If an alien intelligence is trying to send a message somewhere, wouldn’t it make sense to send the message a few times? The signal landed once on Aug. 15, 1977. It never repeated.

UFO Shuts Down Chinese Airport, Military Link? – (OAL News- July 9, 2010)
A Chinese airport was dramatically closed after an unidentified craft was detected by baffled air traffic controllers. They spotted the UFO on radar screens forcing bosses to ground flights and divert planes away from Xiaoshan airport in the eastern city of Hangzhou. The mysterious object glowed on monitoring instruments late on Wednesday night and was photographed by a local resident. China Daily reported that authorities may know more about the UFO than they are acknowledging and hinted that there may be a military connection.


Arkansas, Texas and Arizona Lead the Nation in Child Food Insecurity – (PR Newswire – July 1, 2010)
New state-level data on child food insecurity was announced today by Feeding America, revealing that Arkansas, Texas and Arizona have the highest rates of child food insecurity in the country at nearly 25%. In addition, the study includes regional data on food insecurity for children under the age of 5. In the South, more than one in five children or nearly 22% of young children are food insecure – the highest rate in the nation. The Western region of the country has the second highest rate of young child food insecurity at nearly one in five, or 19.6%. The Midwest has a rate of more than one in six, or 18.6%; and the Northeast has a rate of nearly one in seven, or 13.7%.


In Face of Worker Unrest, Chinese Regime Launches ‘Strike-Hard’ Campaign – (Epoch Times – June 26, 2010)
Among the several-dozen Chinese plants where strikes took place in May, two serve as examples of the very different outcomes: the Japanese-owned Honda factory in Foshan, Guangdong Province, and a Chinese-owned and operated cotton mill in Pingdingshan City, Henan Province. Honda workers eventually claimed victory and received pay raises, while striking workers at the Pingdingshan cotton mill were brutally cracked down on by 2,000 to 3,000 police on June 1. However, experts say that responding to the workers demands with brute force will not work. Dr. Showing Young, an Associate Professor of the Department of Business Administration at National Sun Yat-Sen University in Taiwan, said, “With the proliferation of cheap modern communication technologies, the regime will find it increasing difficult to suppress Chinese workers from organizing protests and strikes.”

The Three Biggest Lies about the Economy – (Market Watch – June 29, 2010)
Here are three economic “truths” that deserve further consideration. For example, Unemployment is below 10%. An analysis of data at the U.S. Labor Department shows that there are 79 million men in America between the ages of 25 and 65. And nearly 18 million of them, or 22%, are out of work completely. (The percentage of employable women who are out of work is lower.) Or this one: The U.S. is sliding into “socialism”. For a system allegedly being strangled in its bed, U.S. capitalism seems to be in astonishingly robust shape. Numbers published by the Federal Reserve a few weeks ago show that corporate profit margins have just hit record levels. Meanwhile, federal spending, about 25% of the economy this year, is expected to fall to about 23% by 2013. In 1983, under Ronald Reagan, it hit 23.5%. In the early 1990s it was around 22%.

Secret Gold Swap Has Spooked The Market – (The Telegraph – July 11, 2010)
When it emerged last week that one or more banks had lent 380 tons of gold to the Bank of International Settlements (BIS) in return for foreign currencies, initially analysts were pointing fingers at Greece, Spain, Portugal, or a combination of the three. However, the day after original reports about the swaps, BIS emailed a statement saying that the swaps had not been conducted with monetary authorities but purely with commercial banks. But it is almost inconceivable that a single commercial bank could have accumulated so much gold alone. In this case, one or more of the so-called bullion banks would have agreed to act on behalf of a monetary authority. The swap generated about $14B – not enough really to make much of a splash. But the question remains: who needed the liquidity?

FOR WHAT IT’S WORTH – articles off the beaten track which may – or may not – have predictive value.

Too Rich to Live? – (Wall St. Journal – July 10, 2010)
It has come to this: Congress, quite by accident, is incentivizing death. When the Senate allowed the estate tax to lapse at the end of last year, it encouraged wealthy people near death’s door to stay alive until Jan. 1 so they could spare their heirs a 45% tax hit. Now the situation has reversed: If Congress doesn’t change the law soon-and many experts think it won’t-the estate tax will come roaring back in 2011. The math is ugly: On a $5 million estate, the tax consequence of dying a minute after midnight on Jan. 1, 2011 rather than two minutes earlier could be more than $2 million; on a $15 million estate, the difference could be about $8 million.

Counter-drug Policies, Security and Governance in Afghanistan – (New York University – June , 2010)
This is a thought-provoking contrarian study of counter-narcotics strategy in Afghanistan just released by the New York University’s Center on International Cooperation. Among other things, it suggests that “all feasible attempts at suppression or reduction of the opiates industry in Afghanistan under present conditions will result, other things being equal, in increasing the economic size of the industry, and therefore increasing the rents and taxes accruing to insurgents and corrupt officials. This applies equally to crop eradication, interdiction, and alternative livelihood programs. Therefore counternarcotics programming increases rather than decreases both violent insurgency and official corruption. If counternarcotics policies are effectively targeted at pro-insurgency traffickers, they may be able to reduce insurgency by enabling pro-government traffickers and corrupt officials to enjoy a monopoly.”

Energy Department Lags in Saving Energy – (New York Times – July 7, 2010)
Like flossing or losing weight, saving energy is easier to promise than to actually do – even if you are the Department of Energy. Its website advises that choosing new lighting technologies can slash energy use by 50 – 75%, but the department is having trouble taking its own advice. According to an internal audit just recentlyreleased, many of its offices are still installing obsolete fluorescent bulbs. In one case, the Department of Energy made most of the investment by installing timers to shut off lights at night when it moved into a new building in 1997. But it got no benefit: as of March of this year, it had not bought the central control unit needed to run the system.


Sucker for Soccer: Octopus Predicts World Cup Finalist – (Guardian – July 8, 2010)
Dubbed the psychic octopus, the English-born Paul (hatched at the Sea Life Park in Weymouth) has correctly predicted all of Germany’s World Cup results including the recent 1-0 defeat. He predicted Germany’s wins against England and Argentina, and even Serbia’s defeat of Germany in the group stage. Paul’s handlers at Aquarium Sea Life in the western city of Oberhausen have turned him into a betting phenomenon by putting mussels into two glass boxes, with one box having Germany’s flag while the other carries the flag of their opponents. Paul is then left to choose one box to open to retrieve the mussel. Bookmaker William Hill is so impressed by Paul’s predictive powers that he was offering even odds that he will pick the winner of the final on Sunday, between Spain and Holland. But that’s not all: Mani is a psychic parrot (click here) from Singapore belonging to a roadside astrologer Muniyappa. Till now the parrot has predicted correctly all the quarter final matches as well as the semi final match between Spain and Germany. But this time both these animals have contrasting views when the final world cup match is concerned. And one of them will be right.


“There is a theory which states that if ever for any reason anyone discovers what exactly the Universe is for and why it is here it will instantly disappear and be replaced by something even more bizarre and inexplicable. There is another that states that this has already happened.”
– Douglas Adams

A special thanks to: Bernard Calil, Kevin Clark, Ellen Crockett, Ken Dabkowski, Eric Davis, Kevin Foley, Chas Freeman, Ursula Freer, Kurzweil AI, Diane Petersen, John Rolls, Bobbie Rohn, Stu Rose, Cory Schreckengost, Sonia Tarrish, Jessica Utts, Heidi Waltos and all of you who have sent us interesting links in the past. If you see something we should know about, do send it along – thanks.


Edited by John L. Petersen

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