Paul Krugman, "Kick That Can": No Longer "Yes We Can"

You want a poignant indication of the severity and danger of America's debt problem? You need look no further than measures being taken by the State of Virginia to issue its own currency (see: http://www.washingtonpost.com/business/economy/virginia-coin-moves-closer-to-reality/2013/02/05/9bcdd532-6fa4-11e2-ac36-3d8d9dcaa2e2_story.html?hpid=z4).

You want another indication? Even Paul Krugman is now acknowledging that the US economy is in a shambles and that debt needs to be brought under control.

In his latest New York Times op-ed entitled "Kick That Can" (http://www.nytimes.com/2013/02/08/opinion/krugman-kick-that-can.html), Krugman grudgingly admits that "we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt." Krugman, however, claims that this is not the time for the federal government to swallow its medicine:

"Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road.

Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.

. . . .

[F]iscal austerity should wait until the economy has recovered, and the Fed can once again cushion the impact."

But has spending by the Obama administration over the past four years created jobs? Are there signs of an economic recovery anywhere in sight? Is it possible that short-term, or even medium-term, the economy is not going to recover?

"Given the state we're in," some sort of economic plan is necessary, but meanwhile, Obama is surrounding himself with a cabinet of the worst and dumbest, a harbinger of further intellectual and economic stagnation.

New York Times Editorial, "Mary Jo White at the S.E.C.": Where Does She Stand Regarding the Uptick Rule?

In an editorial entitled "Mary Jo White at the S.E.C." (http://www.nytimes.com/2013/02/08/opinion/mary-jo-white-at-the-sec.html?_r=0), The New York Times supports the president's nomination of Mary Jo White as the next chairperson of the Securities and Exchange Commission. According to the editorial:

"[White's] résumé in the past decade has understandably alarmed advocates of financial reform, who fear that her work as a defender of Wall Street means that she is dangerously biased in favor of the banks and their deregulatory agenda. Her lack of a deep regulatory background is also a worry at a time when the agency’s top priority is to finish overdue rules to carry out the Dodd-Frank financial reform and other securities laws. Complicating matters further, her husband, John White, is also a corporate lawyer, at Cravath, Swaine & Moore, with his own long list of Wall Street clients.

We understand these concerns but do not believe they are disqualifying."

The editorial makes no mention of the Uptick Rule or White's position in respect thereto. Cancellation of the Uptick Rule in 2007 was thought to have contributed to the 2008 economic debacle and continues to shackle the US economy (see: http://jgcaesarea.blogspot.co.il/2013/02/paul-krugman-friends-of-fraud-do-you.html). The Uptick Rule urgently needs to be reinstated.

The Times editorial concludes:

"[White's] qualities of toughness, tenacity and aggressiveness are just what the S.E.C. needs in a leader. The overarching question she must be asked — and that she must answer — is how she will use those qualities to advance the S.E.C.’s mission, which is to protect individual investors by ensuring that markets are transparent, well regulated and vigorously policed."

The Times wishes to "protect individual investors"? Nothing is more urgent than reinstatement of the Uptick Rule. Without it, Wall Street is a casino with the odds dangerously stacked against individual investors and in favor of voracious hedge funds, which are busy manipulating the activity of American financial markets.

Where does White stand regarding the Uptick Rule? An answer is needed.

Gail Collins, "My Kingdom for a Corpse": Bored to Tears, Collins Rekindles War of the Reeking Roses with Donald Trump

Based upon the discovery of a skeleton with a deformed spinal column coupled with sophisticated DNA analysis, archaeologists have conclusively determined that they have unearthed the remains of England's King Richard III ("My kingdom for a horse") under a Leicester parking lot.

With nothing better to write about, Gail Collins, in her latest New York Times op-ed entitled "My Kingdom for a Corpse" (http://www.nytimes.com/2013/02/07/opinion/collins-my-kingdom-for-a-corpse.html?_r=0), has seized upon this memorable occasion to rekindle her war of words with Donald Trump. You will recall that Trump once circled a picture of Collins, wrote "The Face of a Dog!" over it, and sent it over to Gail (see: http://www.huffingtonpost.com/2011/04/09/donald-trump-gail-collins-new-york-times_n_847015.html).

In her opinion piece of today's date, Collins writes:

"In 2313, maybe the Donald Trump Society will dig up the real estate developer and discover that he had a really terrific head of hair. There’s hope for us all. We may be wrinkling now, but we’ll look great in a few more millennia."

Well, let's fast forward ten more years:

Manhattan, 2323 - Archaeologists, digging under the ruins of the New York Times Building in Manhattan, have discovered the well-preserved bodies of Andrew Rosenthal, Thomas Friedman and Gail Collins, surrounded by a mountain of mildewing bonbons. It is believed that the combined weight of Rosenthal, Friedman and Collins caused the collapse of the skyscraper, owing to its decaying infrastructure.

The discovery of the bodies in the proximity of the bonbons laid to rest speculation, set in motion by Times columnist Nicholas Kristof, that the corpulence of Rosenthal, Friedman and Collins had resulted from lounging on sofas suffused with endocrine-disrupting chemicals.

C'est tout.

Thomas Friedman, "India vs. China vs. Egypt": King Kong vs. Godzilla vs. Mothra

Consider: The United States, with more than $16.4 trillion in debt, continues to borrow from a repressive regime in China, while funding Egypt's military to the tune of $1.3 billion each year. The US, of course, is attempting to isolate Iran as it proceeds pell-mell with its nuclear weapons development program, so it should come as no surprise that yesterday, Egyptian president Morsi ("the Jews are descendants of apes and pigs") hosted Iranian president Ahmadinejad ("Israel must be wiped off the map") in Cairo, representing the first visit by an Iranian leader to Egypt in decades. In parallel, Obama is attempting to paint the transition of Egypt from the Mubarak regime to a government headed by the extremist Muslim Brotherhood as a success: "You know, when it comes to Egypt, I think, had it not been for the leadership we showed, you might have seen a different outcome there" (http://www.cbsnews.com/8301-18560_162-57565734/obama-and-clinton-the-60-minutes-interview/?pageNum=5).

What does any of the above have to do with the price of tea in China?

In his latest New York Times op-ed entitled "India vs. China vs. Egypt" (http://www.nytimes.com/2013/02/06/opinion/friedman-india-vs-china-vs-egypt.html?_r=0), Thomas Friedman, still dilly-dallying in New Delhi, would compare the futures of India, China and Egypt. In this regard, Friedman writes:

"'India today has 560 million young people under the age of 25 and 225 million between the ages of 10 and 19,' explained Shashi Tharoor, India’s minister of state for human resource development. 'So for the next 40 years we should have a youthful working-age population' at a time when China and the broad industrialized world is aging. According to Tharoor, the average age in China today is around 38, whereas in India it’s around 28. In 20 years, that gap will be much larger. So this could be a huge demographic dividend — 'provided that we can educate our youth — offering vocational training to some and university to others to equip them to take advantage of what the 21st-century global economy offers,' said Tharoor. 'If we get it right, India becomes the workhorse of the world. If we get it wrong, there is nothing worse than unemployable, frustrated' youth."

Indeed, China is headed for an iceberg. China has sought to check population growth with its one-child per family policy; however, will China's youth ultimately be able to support a growing percentage of seniors? And then there is also the question concerning the ultimate value of the debt denominated in dollars owed to China by the US, should America's budget deficit continue to go unchecked in the decades to come.

Egypt, now with less than $15 billion in foreign reserves, poverty, illiteracy, daily rioting, discrimination against women most of whom have had their genitals mutilated, oppression of its Christian Coptic minority, and a population that is growing beyond the country's means, is headed for disaster.

"India vs. China vs. Egypt"? My bet is on India, but I am far more concerned with events in the US and the absence of a cogent economic policy.

Meanwhile, this has given me the inspiration to begin writing yet another failed screenplay: "King Kong vs. Godzilla vs. Mothra." Who do you think wins in the end? Yeah, I know, who cares? I also have more pressing problems at home.

Ahmadinejad and Morsi: Two Jew-Haters Meet in Cairo

Currently, the US is attempting to isolate Iran as it proceeds pell-mell with its nuclear weapons development program. In parallel, Obama is attempting to paint the transition of Egypt from the Mubarak regime to a government headed by the extremist Muslim Brotherhood as a success ("You know, when it comes to Egypt, I think, had it not been for the leadership we showed, you might have seen a different outcome there," http://www.cbsnews.com/8301-18560_162-57565734/obama-and-clinton-the-60-minutes-interview/?pageNum=5).

So, it should come as no surprise that Egyptian president Morsi ("the Jews are descendants of apes and pigs") yesterday hosted Iranian president Ahmadinejad ("Israel must be wiped off the map") in Cairo, representing the first visit by an Iranian leader to Egypt in decades.

Meanwhile, the US continues to provide Egypt with more than a billion dollars of military aid annually (see: http://www.haaretz.com/news/diplomacy-defense/u-s-approves-1-3-billion-dollars-in-military-aid-to-egypt-1.420447).

Will the Obama administration continue to fund the Egyptian army as Egypt draws nearer to Iran? Was there ever any doubt?

David Brooks, "The Philosophy of Data": Ignoring Life Sciences, Brooks Is at Sea in an Ocean of Data

In his latest New York Times op-ed entitled "The Philosophy of Data" (http://www.nytimes.com/2013/02/05/opinion/brooks-the-philosophy-of-data.html?_r=0), David Brooks describes what he labels "data-ism," which, he says, is "the rising philosophy of the day." Brooks writes:

"We now have the ability to gather huge amounts of data. This ability seems to carry with it certain cultural assumptions — that everything that can be measured should be measured; that data is a transparent and reliable lens that allows us to filter out emotionalism and ideology; that data will help us do remarkable things — like foretell the future."

Brooks goes on to show how data can be used to show that "our intuitive view of reality is wrong," for example, with regard to basketball foul shooting, the effectiveness of political campaign spending, and the relationship between the use of the world "I" and self-confidence.

However, Brooks nowhere mentions the vast amounts of data being accumulated by the life sciences.

I am privileged to work as an outside consultant to Compugen, which is revolutionizing the manner in which new drugs and diagnostics are discovered, and which has spent the past decade building an infrastructure of proprietary scientific understandings, predictive platforms, algorithms, and machine learning systems for the in silico (by computer) prediction and selection of product candidates.

In a recent press release (http://cgen.com/press-releases/189-compugen-announces-development-of-nexgen-infrastructure-platform-for-analysis-of-next-generation-sequencing-data), Compugen described a new infrastructure platform that it had created for the analysis of massive quantities of next generation sequencing data to enhance the company's infrastructure for predictive drug and drug target discovery:

"The high demand for low-cost sequencing has provided strong incentives to develop 'next generation sequencing' technologies. These technologies rely on various methods to parallelize the sequencing process, thus producing millions of sequences simultaneously, with exceptional speed, yield and specificity. Such high-throughput sequencing technologies, known as parallel deep sequencing technologies, are lowering the cost and increasing the output of DNA and RNA sequencing (RNA-Seq) by orders of magnitude beyond what is possible with standard dye-terminator methods. Furthermore, these technologies in theory should facilitate various types of analysis, such as transcriptome analyses, de-novo assembly of genomes, identification of single nucleotide DNA mutations, and more. However, the massive amount of raw data generated in this form also imposes huge analytical challenges to obtain meaningful and accurate information."

In short, the life sciences are creating oceans of data, and the primary challenge is no longer collection, but rather analysis.

New insights regarding foul shooting percentages? Quite honestly, I don't particularly care. Of far greater significance is our proximity to deciphering billions of years of evolution and the complexity of life, resulting in new medicines and diagnostics for unmet medical needs.

Now if we can only prevent ourselves from destroying the planet as this revolution in life sciences, premised upon unprecedented data collection and analytical capabilities, unfolds.

[As noted in prior blog entries, I am a Compugen shareholder, this blog entry is not a recommendation to buy or sell Compugen shares, and in September 2009 I began work as a part-time external consultant to Compugen. The opinions expressed herein are mine and are based on publicly available information. This blog entry has not been authorized, approved or reviewed prior to posting by Compugen.]

You Want to Know More About the Middle East Than John Kerry? Easy!

So, you want to know more about recent events in the Middle East than John Kerry, America's new secretary of state, who once referred to Syrian mass murderer Bashar al-Assad as his "dear friend"? What could possibly be easier?

Tomorrow, over cocktails in Foggy Bottom, you can regale your friends and befuddle your enemies with the following information:

• The Iranian rial in reality (not according to government fixed rates) is hitting new lows against the US dollar (see: http://jgcaesarea.blogspot.co.il/search/label/rial).
• The Egyptian pound is being pounded and is also being traded at record lows against the US dollar (see: http://www.dailystar.com.lb/Business/Middle-East/2013/Feb-04/205016-egypt-central-bank-moves-to-curb-pounds-decline.ashx#axzz2Jy4m1enk).
• Turkey has been at violent odds with the Assad regime in Syria; however, Turkey's foreign minister is asking "Why didn't [Bashar] al-Assad even throw a pebble when Israeli jets were flying over his palace and playing with the dignity of his country?" (see: http://www.hurriyetdailynews.com/why-didnt-al-assad-even-throw-a-pebble-at-israel-turkish-fm.aspx?pageID=238&nID=40360&NewsCatID=352).
• Saudi Arabia, which has also been sending arms to the rebels fighting to overthrow Assad, is also furious that Israel, last Wednesday, destroyed a convoy conveying advanced surface-to-air missiles to Hezbollah and a military complex outside of Damascus housing chemical weapons agents (see: http://www.dailystar.com.lb/News/Middle-East/2013/Feb-04/205003-saudi-arabia-slams-israel-air-strike-against-syria.ashx#axzz2Jy4m1enk). Those confounded Jews!
• Syria's Kurdish minority is seeking autonomy, much akin to what their brothers and sisters achieved in northern Iraq, and is engaged in an armed struggle with Syrian rebels (see: http://www.jpost.com/Features/FrontLines/Article.aspx?id=301735). Do the Middle East's 30 million Kurds in Syria, Turkey, Iran and Iraq deserve a state of their own? You're darned right they do!
• Chief PLO negotiator Saeb Erekat has declared that the Palestinians will not “repeat the lunacy of returning to the negotiations while Israel is not fulfilling its obligations” (see: http://www.jpost.com/MiddleEast/Article.aspx?id=302019). This is a bit peculiar: Even when Israel halted West Bank construction at Obama's request, the Palestinians refused to negotiate. Or in other words, the Palestinians also will not "repeat the lunacy of returning to the negotiations while Israel is fulfilling its obligations.”

Let me know if that doesn't have them agog. No cocktails for me. It's my wedding anniversary, and I need to be reminded of what I did wrong this past year. A bit like a second day of atonement. Think of me kindly as you sip your Manhattans.

"Yes, dear. Coming, dear."