Author Archives: Lila

New Findings About Race in India..

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This news item republished at the genetics blog, Gene Expression, is likely to have some impact in India, where there’s been a long-standing debate about the North Indian-South Indian divide, also known as the Aryan-Dravidian divide.

There are several theories about the origin of the different peoples of India. The most popular one and the one that’s favored by the most prominent historians is the Aryan invasion theory.This theory suggests that there was a substantial difference between a preexisting population of shorter, darker people in South India (called Dravidians) and an invading bronze- age culture of taller, fairer people (Aryans) that brought in Vedic or Hindu culture.

This theory, of course, has had a lot of repercussions not only for history and anthropology, but also for politics. The Aryan invasion theory depicts Hindu culture as having a foreign origin, so it was considered colonial, if not racist, by many Indian scholars.

Anthropologists consider Indians to be a branch of a widely dispersed Indo-European group that sent out branches to Persia (Indo-Iranian), Europe (Indo-European) and India (Indo-European). Race theories that developed in the 19th century tended to use this Aryan theory as their foundation (if I’m not mistaken).

However, many Hindu nationalists have considered the Aryan invasion theory a colonial distortion and have argued instead that the movement of people was in the opposite direction. In other words, the Aryans moved outward from India. This would make India the mother culture of the Aryans

Critics of this Indian origin theory call it an outgrowth of Hindu chauvinism. The debate has been a pretty heated one, as a consequence.

Now comes new research.

The Times of India notes:

“The great Indian divide along north-south lines now stands blurred. A pathbreaking study by Harvard and indigenous researchers on ancestral Indian populations says there is a genetic relationship between all Indians and more importantly, the hitherto believed “fact” that Aryans and Dravidians signify the ancestry of north and south Indians might after all, be a myth.

“This paper rewrites history... there is no north-south divide,” Lalji Singh, former director of the Centre for Cellular and Molecular Biology (CCMB) and a co-author of the study, said at a press conference here on Thursday.

Senior CCMB scientist Kumarasamy Thangarajan said there was no truth to the Aryan-Dravidian theory as they came hundreds or thousands of years after the ancestral north and south Indians had settled in India.

The study analysed 500,000 genetic markers across the genomes of 132 individuals from 25 diverse groups from 13 states. All the individuals were from six-language families and traditionally “upper” and “lower” castes and tribal groups. “The genetics proves that castes grew directly out of tribe-like organizations during the formation of the Indian society,” the study said. Thangarajan noted that it was impossible to distinguish between castes and tribes since their genetics proved they were not systematically different.

The study was conducted by CCMB scientists in collaboration with researchers at Harvard Medical School, Harvard School of Public Health and the Broad Institute of Harvard and MIT. It reveals that the present-day Indian population is a mix of ancient north and south bearing the genomic contributions from two distinct ancestral populations – the Ancestral North Indian (ANI) and the Ancestral South Indian (ASI). ”

Weak Housing Figures Hit Gold, Boost Dollar

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“Resales of U.S. homes dropped 2.7% in August to a seasonally adjusted annual rate of 5.1 million, the first decline in five months, prompting the National Association of Realtors to again plead for more taxpayer subsidies for their business.”

That’s sent spot gold below $1000 and pushed the dollar higher.

Aha. So Ben Bernanke finishes his little piece of quackery yesterday, delivering it in the best bedside manner (the patient is doing so much better etc. etc..), and the silly patient refuses to cooperate and slides right back into his coma…

Read the whole piece at Market Watch, if you can do it without popping a blood vessel.

Here’s Lawrence Yun, chief economist of the National Association of Realtors (which is the lobby for the real estate agents) “pleading” for more tax payer moolah in order to have a “self-sustaining” recovery.

How does a recovery based on taxing people amount to a “self-sustaining” recovery?
Huh?

Slap on the forehead. Silly me. Subsidized self-sustaining recovery is exactly the right phrase. Goes right along with war is peace, strength is ignorance and the rest of the Orwelliana lining the cabinets of US Govt. Incorp.

And how about this gem:

“Most economists had not been anticipating a decline in sales.”

Oh really? Most economists hadn’t? And why hadn’t they?

After all, IO loans (interest only loans) are waiting to be reset, the tax payer rebates from April have been used up, commercial real estate is collapsing, foreclosures are spreading to the higher end of the market, the impact of the first wave of government finance and mortgage subsidies is about to run out, so why in the world (heavy sarcasm alert) would economists worry about anything, right? Why in the world would they anticipate anything?


Thinking bad, evil thoughts about the economy is the job of us bloggers. It’s our unpatriotic, unprofessional duty to tell you what’s really going on instead of the moonshine being handed out.

Professional economists it seems are too busy professing economics to actually tell you anything marginally helpful about the economy.

Obama Heads UN Security Council..

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“Barack Obama will cement the new co-operative relationship between the US and the United Nations this month when he becomes the first American president to chair its 15-member Security Council.

The topic for the summit-level session of the council on September 24 is nuclear non-proliferation and nuclear disarmament – one of several global challenges that the US now wants to see addressed at a multinational level.

“The council has a very important role to play in preventing the spread and use of nuclear weapons, and it’s the world’s principal body for dealing with global security cooperation,” Susan Rice, US envoy to the UN, said last week.

Her remarks were the latest by the Obama administration to emphasise a shift from the strategy of the previous Bush administration, sometimes criticised by its UN partners for seeking to use the world body principally to endorse its own unilateral policies. The US currently holds the month-long rotating presidency of the Security Council…”

More at the Financial Times.

My Comment:

Did I read that right? The way to shift away from the Bush administration’s tendency to use the UN to endorse its own unilateral policies is to put Obama at the head of the UN Security Council??
Am I missing something here? How does this represent a shift away? Isn’t it more like coming out of the closet on it?

Spring In the South

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Spring is here. I walked the four miles or so to the Old Town (Ciudad Vieja) and renewed my visa. The office is at Misiones 1513, a few blocks from the sea. In Plaza Libertad there were people strolling around sight-seeing and buying food, though street food isn’t the way of life it is in India or Malaysia or Morocco.

Actually, you don’t need a visa with a US passport. But I was told I’d have to leave the country and reenter after 90 days, so I’d been planning on making the boat trip back to Buenos Aires. That would have been about $70. Fortunately, I googled and found that all you need to do is show up at Immigration and ask to extend your stay. That cost was roughly $15.

Moral of the story: Sometimes the information on the web is wrong and you need to talk to people to find out the real deal, Other times, people are repeating misinformation and you need to verify from the web.

The whole thing took about an hour, mainly because I had to go out and change money. The Uruguayan peso has strengthened a bit recently, trading at 21 and 22 (compra and venta). So I didn’t want to change any more than I absolutely had to. The man at the cambio seemed to understand my cheese-paring mentality. No problem, he said in good English, as I handed him a hundred. I’ll change twenty for you.

It’s what I like about people here. They seem to understand the notion of “making do.” It’s not a shame. In the US, at least until the market-crash wised people up, a lot of my friends would consider this unseemly haggling.

So far, things have turned out much as I expected, except for rent (higher than expected) and food (much higher than expected). The weather really is temperate. The environment really is pristine. The people really are easy-going. The roads really are safe and good. And it’s not crowded or scruffy or polluted or noisy, as parts of Buenos Aires are. (It’s also not as much of a party scene).
Electronics are expensive – but I expected that. Few places in the world are as cheap as the US for electronics.

My one gripe is keeping in touch with everyone. Skype is relatively inexpensive but the sound isn’t great. I keep calling landlines in the US and in India and getting all sorts of background noise and distractions. The connection disappears. And sometimes it takes ages to get through. If this is the replacement for telephones, I’m not impressed.

The Indian government and a number of private companies have got around to Latin America and are investing in land here. The idea is to produce food more cheaply than can be done in India, even after adding shipping costs.

So maybe Indian pensioners and retirees won’t have to spend their entire savings on food and water in the future, as I’ve been afraid they might.

Maybe also, India won’t be destabilized by the bombing in Afghanistan…

Maybe China and India will be able to see eye to eye on their riparian disagreements…maybe…
Maybe…

But I’m not holding my breath.

India’s Man at the IMF: Arvind Virmani

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The global crisis has had the effect of making over the IMF and giving it renewed power.

Until recently, the Fund had lost its international reputation for  what was seen as mishandling of the debt crises in Argentina, Asia, and Russia in the 1990s.

Now, however, with a universal cry of “do something” going up, it’s the IMF to the rescue. The Fund has had its monies tripled, and is at the center of a new global regulatory regime, ostensibly working with the G20 (the Group of Twenty, a forum that includes the twenty countries with the greatest GDPs).

The idea is that the G20, which has room for countries like Argentina, Brazil, China, India, and Indonesia, among others, will be more inclusive than forums limited to the developed nations. To check if this is actually the case, I’ve been looking at the structure and organization of the IMF and its affiliated groups, and will be posting what I find as I go along.

Exhibit A is India’s representative to the IMF. That’s Arvind Virmani, Chief Economic Advisor in the Ministry of Finance. Virmani, according to this article in the Indian Express, was educated at Harvard (PhD in Economics), was the Principal Adviser to the Planning Commission, and was also a contender for Vice President of the Reserve Bank of India. Before joining the government, he was a Senior Economist at the World Bank research department.

It’s always the case. The people who end up representing countries like India are all trained in the elite schools in the West, where the faculties are drawn from the US government, as well as the very corporations and international institutions that the representatives will interact with, and often be responsible for monitoring or regulating.

How independent can they be? And even if they’re personally ethical people, how easy will it be for them to even think outside the parameters set by the institutions in which they’ve trained and operated all their lives? Not easy at all. In fact, impossible.

Let’s see if we can trace some of the connections:

Virmani is an alum of Harvard.

It so happens that Larry Summers, current head economic adviser of President Obama, was the 27th President of Harvard (2001-2006).

Summers is said to have been behind Harvard’s investment in interest rate swaps that eventually lost the university over a billion dollars.

Before that, Summers was Chief Economist of the World Bank (1991-1993) – where Virmani worked before 1987- and then Undersecretary and Deputy Secretary of the US Treasury, before becoming Secretary in 1999..

Summers’ long-time mentor is Robert Rubin, whom he succeeded at Treasury Secretary.

In the 1990s Summers was a leading advocate of the Washington consensus–the proposition that free financial markets, “free” trade and fiscal discipline would bring prosperity to the world.

I put “free” in quotes because what it really amounted to was managed trade, manipulated by the US government with carrots and sticks of sorts…from nuclear weaponry to aid to penalties to sabre rattling  

While Summers was pushing the Washington Consensus, his mentor Robert Rubin, a former Goldman co-chair, was US Treasury Secretary, where he was instrumental in blocking legislation to regulative the derivative market.

Rubin also pushed through the repeal of the 1933 Glass-Steagall Act (keeping apart merchant banking and commercial banking), which enabled the consolidation of the banking industry.

Then, Rubin became the  director of Citigroup, one of the banks whose consolidation was made possible by that repeal. Citi shareholders have filed a lawsuit against Citi executives including Rubin charging that they sold shares at inflated prices, hiding the risks. Shareholders are said to have suffered losses over 70% since Rubin joined Citi.

Meanwhile, Rubin also has a Harvard connection, being a member of the executive governing board of the university, a position he landed a year after getting an honorary doctorate from Harvard.

Importantly, Virmani also shares his Harvard ties with current World Bank president, Robert Zoellick. Zoellick is also an alum of Goldman Sachs, a former US State and Treasury official, a Presidential assistant and US Trade Representative, and a double graduate of Harvard (JD and MPP).

Finally, the IMF position is known to be a sinecure for retiring Indian government economists, who can earn some hard currency for their retirement. 

Question: Even if Virmani were scrupulously honest himself (and he might be), how easy would it be for him to be able to stand up to policies carrying the imprimatur of some one like Rubin or Summers or Zoellick? Not easy at all. In fact, impossible…

The Carbon Credit Scam – Another Public-Private Boondoggle

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“Dr Alison Doig, senior climate-change advisor at Christian Aid, says, ‘Live’s investigation highlights exactly what’s wrong with this flawed system, which is focused only on exchanging carbon credit globally, with no accounting for other environmental or social damage. All carbon credits are doing is making some companies rich, while doing nothing to prevent global pollution. It needs either abolition or total reform.’”

That’s a quote from a piece on how the much-touted carbon-credit trading scheme actually works on the ground in combating pollution. The idea of the scheme is to give industries a cap below which they have to operate. To exceed the cap, they have to purchase carbon credits from manufacturers in the developing world, who receive them in exchange for every cut in emissions they make.

The credits trade in private and international exchanges like any security, one ton of CO2 emission being equivalent to one Certified Emission Reduction (CER).

Carbon trading was one of the fastest growing sectors in 2006 and 2007, doubling in value, but like everything else, when the market took a hit, it took one too. With manufacturing output falling, emissions also fell, and with them carbon, making it more profitable for companies to pollute and buy the credits rather than cut back on emissions from fossil fuels.

And how does the scheme work on the ground? As Carbon Trade Watch documents in this revealing account by Nadene Ghouri, a company can actually be receiving tax-payer funded “green reward points” from the UN, and using the money for operations that are highly polluting – which is  what GFL (Gujarat Fluorochemicals) was doing.

Government to Introduce Biometric ID in India

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“While Brits are longing for less surveillance in their electronic snoop state, the government in India seems to want to take Bharat Mata farther down that road. Nandan Nilekani, co-chairman of India’s tech giant, Infosys, and now the head of the Government’s Unique ID project, is proposing an
Indian biometric ID.

What’s incredible is he thinks it’s feasible to extend this to the whole population. Apart from the logistics, the level of technology, and the cost (1.5 lakh crores – a number I’ll translate later), there’s the vulnerability to abuse, considerations which deterred Britain from going ahead with its own biometric ID scheme.

They don’t seem to bother Nikelani – one of “Flat Earth” globalist Tom Friedman’s favorite people. He discussed the objections in an interview with CNN-IBN’s Karan Thapar, published in the Hindu.

Here’s a short excerpt:

“Karan Thapar: You said a moment ago that you would create checks and balances. I put it to you that you can never create sufficient and the reason say is this — In the UK, in the US and in Australia, because the authorities couldn’t respond to public concerns about misuse, they have effectively put on the backburner consideration of similar schemes for those countries. Now if developed countries cannot tackle the problem of misuse, then how can India, where 35 per cent of the people are illiterate and 22 per cent live below the poverty line? How can India claim that we can tackle these problems?

Nandan Nilekani: What these developed countries have put on hold is giving national ID cards to people. But both the countries, US and UK have a number. For example in the US, you have the social security number, in the UK there is the national insurance number. They already have a numbering system, which is what we are going to propose.

Karan Thapar: Except for the fact that is is nowhere near as extensive or as complete in terms of the biometeric details as what you are proposing in India. The national insurance in Britain has been around and developing slowly but it doesn’t have any details that could lead to an invasion of privacy. It doesn’t have any details that can be misused for profiling. Yours could have both?

Nandan Nilekani: As I said, these are legitimate concerns and I think we have to address them in the public as well as in the laws and so on. But notwithstanding these concerns, the social benefit, the inclusivity that this project will provide for the 700 million people in this country who are outside the system is immense enough to justify doing this project…”

My Comment

Notice, once more, that’s it’s “social uplift” that’s the excuse for the expansion of the state, the same reasoning given for the sale of IMF gold. And as suspect in this case as it is in that. It seems as if public officials hardly get a wink of sleep cooking up schemes to help the poor.

Consider that the British biometric scheme was put on the backburner because it cost too much. The London School of Economics calculated that it would cost between 10 and 20 billion pounds, and Britian is about 1/20 the size of India. Now figure how mind-boggling the Indian scheme is likely to be be…..in every respect.

New Labor Turns Brits into Libertarians?

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From The Guardian:

“A poll run by PoliticsHome this week revealed a fascinating result to the question: “Do you think in general, the state has too much or too little of a say in what people can and cannot do?” Nearly four-fifths of the sample (79%) answered that the state had too much of a say, while only 8% believe the state has too little say.
If the poll is an accurate reflection of the nation’s mood this is an important finding. For some time I have been aware of sharp change in the public’s attitudes to surveillance, as well as a general feeling that the government is too quick to seize personal data and tell people how to lead their lives.”

China’s Gold Rush..

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From Adrian Ash at Bullion Vault, via goldseek:

“The International Monetary Fund confirmed on Friday that it will sell 403 tonnes from its hoard to finance development projects in poorer countries, offering gold to central banks before considering steady, pre-announced open-market sales.
“China has no need at all to Buy Gold from the international markets,” counters Lila Lu, chief precious metals trader at Minsheng Bank Corp. in Beijing, speaking to Reuters.
“Because China is a large gold producer, it can source gold directly from its domestic makers, most of which are state-run enterprises.”
Off-market purchases direct from domestic Gold Mining firms enabled South Africa – then the world’s No.1 producer – to double its gold reserves during the late 1960s.
“Why should we use US Dollars to Buy Gold?” Lu added today. “We can use Yuan instead to purchase gold from domestic producers.”
Early Tuesday the state-owned China Investment Corp. announced taking a 15% stake in Singapore-listed commodities trading house Noble Group at a cost of $850 million.
Physical gold demand from private Chinese households rose 9% in the first half of this year, trade marketing-group the World Gold Council said today, announcing an “unprecedented” sales push across rural China.”

My Comment

There are several terribly important things going on in the capital markets and in international politics.

I’ll start with what most investors are probably watching anxiously – the teetering of the dollar at the lower end of the long term band of support (76-80), below which it plunged only a year ago. After showing some strength yesterday, the dollar is down again and gold is back up strongly over 1010. The reason seems to be the whispering in the markets that China will be buying IMF gold to supplement what are said to be meager reserves.

Rumors like these could be seen as a threat by the Chinese, for they expose China’s weakness in relation to other countries, especially those that possess better gold reserves. I suspect the comments by Lu are intended to diffuse that threat.

Another reason for dollar weakness is that the relative strengths of currencies are on the table at the G20 meeting, which is scheduled to take place in Thursday in Pittburgh, Pennsylvania and trade deficits are going to be considered – which is likely to be dollar negative.

The IMF sales are pretty interesting, although it’s hard to tell exactly what’s involved. It seems the gold will be sold to central banks (which ones?) and the proceeds will go to supplement and improve the financing now available to low-income countries (how?).

Question: Why should these professed good intentions be taken at face value, given all we know about the IMF?

At present, the IMF also allocates SDRs (or Special Drawing Rights) to each member country based on its contribution to the IMF (this is supposed to be a way to improve members’ liquidity in the international markets).

The SDR’s are based on a basket of currencies – currently, the US dollar, the euro, the sterling, and the yen – that can be traded for other currencies or used directly.

The IMF will use the gold sale proceeds to invest in other things. The interest from those investments will then benefit low-income countries. At least, that’s what I took away from my reading.

It all sounds suspiciously convoluted and opaque. My fear is that this is all an elaborate charade to leave some countries/institutions holding the “paper” bag, while real value is siphoned off by other countries/institutions.

I’ll leave you to decide who the winners and the losers will be….

Meanwhile, this is only my suspicion. I’ll need to go and do some more digging. But I’m putting my suspicions out here to fuel some leg work in the blogosphere.

Here’s a link to some relevant information on gold market manipulation at the website of the Gold Anti-Trust Action Committee (GATA), the leading activist group on gold price manipulation.

Especially read through the events surrounding the sale of Britain’s gold by then Chancellor of the Exchequer, Gordon Brown. Unlike other countries, UK gold sales are under the authority of the politicians. Brown sold British gold at a price lower than the market price at the time. The timing was extremely suspicious and followed on Robert Rubin’s unsuccessful attempts to get the IMF to sell its gold. The ostensible reason was to “help poor countries” – the same reason being given now. But the actual reason was a simpler one and one I’ve discussed a number of times. It was to keep the gold price low to support the dollar, disguise the rate of monetary debasement, and pump up the stock market. That in turn helped the derivative market, which Rubin and Greenspan had also helped to keep out of regulation. This was in the late 1990s….

Now, a decade later, the IMF hasn’t been weakened by the revelations of its sins. Instead, it’s been strengthened. And now, again, the IMF is selling gold – and again, the excuse is “helping the poor.”