Some reading from Naked Capitalism/ Yves Smith (hat tip) Exxon Mobil says oil leaked into Yellowstone River Reuters (hat tip Ed Harrison) Greens Warn against Dangerous Dildos Der Spiegel (hat tip reader Robert M) Bionic body parts offer hope to the disabled DeviceGuru Princess Charlene of Monaco ‘tried to flee three times Telegraph (hat tip reader Swedish Lex) Studies: Autism may be triggered in the womb Raw Story Portugal drug law show results ten years on, experts say AFP (hat tip reader May S) Scare tactics lift prices for smokers Financial Times Murdoch tabloid accused of hacking dead girl’s phone Financial Times or the non-paywall version ‘News of the World’ hacked Milly Dowler’s phone when Rebekah Brooks was editor Independent (hat tip Buzz Potamkin The Mosler Plan for Greece Warren Mosler ECB will continue to accept Greek debt Financial Times Fear of Credit Default Swaps Used to Protect Stupid Banks masaccio, FireDogLake Strauss-Kahn Sex Case Appears Headed to Dismissal Wall Street Journal Brazil risks tumbling from boom to bust Financial Times Pay Frozen, More New York Judges Leave Bench New York Times How Not to Play the Game The Archdruid Report (hat tip Lambert Strether) Post credit bubble fiscal austerity leads to depression Ed Harrison Bank Regulation’s Capital Mistake Amar Bhidé, Project Syndicate Antidote du jour:

Ron Paul Suggests Using Fed to End Run Debt Ceiling Impasse Posted: 04 Jul 2011 10:01 PM PDT The only reason to think Republicans are serious about their threat to have the Federal government default rather than raise the debt ceiling is that they have an undue fondness for apocalyptic outcomes. I suppose I should actually favor this sort of thing; I’ve long thought the only hope for getting the US freed from rule by financiers was another financial crisis, provided it came soon enough and it was big enough. This one might fit the bill on those scores. However, with the immediate trigger being pigheaded Congressmen, the banks might look like innocent victims, when the ballooning of public debt around the world was the direct result of their recklessness and the resultant global economy near-death experience. So a debt-ceiling-row-induced great big financial dislocation would probably not produce the opportunity to break the power of banks that yours truly and many others are looking for. As the hour of reckoning approaches, more and more creative ideas to disarm the Republican weapon are being put forward, and an intriguing one comes from, of all places, a Republican, Ron Paul. As described by Dean Baker in the New Republic last week, Paul’s plan is simple – have the Fed cancel some or all of the Treasuries it got via its quantitative easing programs: Unlike the debt held by Social Security, the debt held by the Fed is not tied to any specific obligations. The bonds held by the Fed are assets of the Fed. It has no obligations that it must use these assets to meet. There is no one who loses their retirement income if the Fed doesn’t have its bonds. In fact, there is no direct loss of income to anyone associated with the Fed’s destruction of its bonds. This means that if Congress told the Fed to burn the bonds, it would in effect just be destroying a liability that the government had to itself, but it would still reduce the debt subject to the debt ceiling by $1.6 trillion. This would buy the country considerable breathing room before the debt ceiling had to be raised again. President Obama and the Republican congressional leadership could have close to two years to talk about potential spending cuts or tax increases. Maybe they could even talk a little about jobs. Baker points out a second benefit. Canceling the bonds The only use the Fed had for those bonds was to eventually sell them back to the public to soak up liquidity when it started worrying about inflation. But the Fed can achieve that end the old fashioned way, by raising reserve requirements. So getting rid of the bonds formally in one stroke really would reduce the debt level, because it saves the interest payments that would have been made to investors after the Fed’s Treasury bonds were sold back in the open market. The Baker discussion says Congress would have to approve this maneuver, and that would seem to put everything back at square zero. But perhaps not. I’m not terribly conversant with the fault lines within the Republican camp, but Ron Paul has a great deal of appeal with voters. The fact that he’s willing to put out a clean, viable third option may suggest that he is not alone in recognizing that his fellow party members are playing Russia roulette with all chambers loaded. And as one of the Fed’s longest-standing critics, for him to say, effectively, that some of the Federal debt has effectively been monetized, why not quit pretending otherwise, is close to a Nixon comes to China moment. Paul’s gambit is also a clever way to hoist the banks on their own petard. The deficit hysteria has in no small measure been driven by the banks as part of a desire to enforce their new program of insulating bondholders from losses, including those of inflation. State support for policies like that amounts to socialism for rentiers, since the reason bonds pay more interest that Treasury bills is interest rate risk and credit risk. If investors want a premium yield, they should expect to bear the hazards which go with them. I hope Paul prevails. When a Congressman who has often been depicted as a wingnut has the best idea in the room, you know a serious house cleaning is in order.

Guest Post: Fukushima Cover Up Unravels Posted: 04 Jul 2011 03:15 PM PDT → Washington’s Blog As I’ve repeatedly noted, the Japanese government, other governments and nuclear companies have covered up the extent of the Fukushima crisis. Asia Pacific Journal reports: Japan’s leading business journal Toyo Keizai has published an article by Hokkaido Cancer Center director Nishio Masamichi, a radiation treatment specialist. *** Nishio originally called for “calm” in the days after the accident. Now, he argues, that as the gravity of the situation at the plant has become more clear, the specter of long-term radiation exposure must be reckoned with. *** Former Minister for Internal Affairs Haraguchi Kazuhiro has alleged that radiation monitoring station data was actually three decimal places greater than the numbers released to the public. If this is true, it constitutes a “national crime”, in Nishio’s words. The Atlantic points out: The reason for official reluctance to admit that the earthquake did direct structural damage to reactor one is obvious. Katsunobu Onda, author of TEPCO: The Dark Empire … who sounded the alarm about the firm in his 2007 book explains it this way: “If TEPCO and the government of Japan admit an earthquake can do direct damage to the reactor, this raises suspicions about the safety of every reactor they run. They are using a number of antiquated reactors that have the same systematic problems, the same wear and tear on the piping.” *** Oddly enough, while TEPCO later insisted that the cause of the meltdown was the tsunami knocking out emergency power systems, at the 7:47 p.m. TEPCO press conference the same day, the spokesman in response to questions from the press about the cooling systems stated that the emergency water circulation equipment and reactor core isolation time cooling systems would work even without electricity. *** On May 15, TEPCO went some way toward admitting at least some of these claims in a report called “Reactor Core Status of Fukushima Daiichi Nuclear Power Station Unit One.” The report said there might have been pre-tsunami damage to key facilities including pipes. “This means that assurances from the industry in Japan and overseas that the reactors were robust is now blown apart,” said Shaun Burnie, an independent nuclear waste consultant. “It raises fundamental questions on all reactors in high seismic risk areas.” *** Eyewitness testimony and TEPCO’S own data indicates that the damage [done to the plant by the quake] was significant. All of this despite the fact that shaking experienced at the plant during the quake was within it’s approved design specifications. The Wall Street Journal writes: A former nuclear adviser to Japanese Prime Minister Naoto Kan blasted the government’s continuing handling of the crisis, and predicted further revelations of radiation threats to the public in the coming months. In his first media interview since resigning his post in protest in April, Toshiso Kosako, one of the country’s leading experts on radiation safety, said Mr. Kan’s government has been slow to test for possible dangers in the sea and to fish and has understated certain radiation dangers to minimize what it will have to spend to clean up contamination. And while there have been scattered reports already of food contamination—of tea leaves and spinach, for example—Mr. Kosako said there will be broader, more disturbing discoveries later this year, especially as rice, Japan’s staple, is harvested. “Come the harvest season in the fall, there will be a chaos,” Mr. Kosako said. “Among the rice harvested, there will certainly be some radiation contamination—though I don’t know at what levels—setting off a scandal. If people stop buying rice from Tohoku, . . . we’ll have a tricky problem.” British Shenanigans It’s not just the Japanese. As the Guardian notes: British government officials approached nuclear companies to draw up a co-ordinated public relations strategy to play down the Fukushima nuclear accident just two days after the earthquake and tsunami in Japan and before the extent of the radiation leak was known. Internal emails seen by the Guardian show how the business and energy departments worked closely behind the scenes with the multinational companies EDF Energy, Areva and Westinghouse… Officials stressed the importance of preventing the incident from undermining public support for nuclear power. *** The Conservative MP Zac Goldsmith, who sits on the Commons environmental audit committee, condemned the extent of co-ordination between the government and nuclear companies that the emails appear to reveal. *** The official suggested that if companies sent in their comments, they could be incorporated into briefs to ministers and government statements. “We need to all be working from the same material to get the message through to the media and the public. *** The office for nuclear development invited companies to attend a meeting at the NIA’s headquarters in London. The aim was “to discuss a joint communications and engagement strategy aimed at ensuring we maintain confidence among the British public on the safety of nuclear power stations and nuclear new-build policy in light of recent events at the Fukushima nuclear power plant”. Other documents released by the government’s safety watchdog, the office for nuclear regulation, reveal that the text of an announcement on 5 April about the impact of Fukushima on the new nuclear programme was privately cleared with nuclear industry representatives at a meeting the previous week. According to one former regulator, who preferred not to be named, the degree of collusion was “truly shocking”. The Guardian reports in a second article: The release of 80 emails showing that in the days after the Fukushima accident not one but two government departments were working with nuclear companies to spin one of the biggest industrial catastrophes of the last 50 years, even as people were dying and a vast area was being made uninhabitable, is shocking. *** What the emails shows is a weak government, captured by a powerful industry colluding to at least misinform and very probably lie to the public and the media. *** To argue that the radiation was being released deliberately and was “all part of the safety systems to control and manage a situation” is Orwellian. And – as the Guardian notes in a third article – the collusion between the British government and nuclear companies is leading to political fallout: “This deliberate and (sadly) very effective attempt to ‘calm’ the reporting of the true story of Fukushima is a terrible betrayal of liberal values. In my view it is not acceptable that a Liberal Democrat cabinet minister presides over a department deeply involved in a blatant conspiracy designed to manipulate the truth in order to protect corporate interests”. -Andy Myles, Liberal Democrat party’s former chief executive in Scotland “These emails corroborate my own impression that there has been a strange silence in the UK following the Fukushima disaster … in the UK, new nuclear sites have been announced before the results of the Europe-wide review of nuclear safety has been completed. Today’s news strengthens the case for the government to halt new nuclear plans until an independent and transparent review has been conducted.” -Fiona Hall, leader of the Liberal Democrats in the European parliament