Seriously, folks, get your shotguns. Chimpanzees, which are like humans but way more willing to rip out your throat, reportedly have the ability to create and stockpile weapons. It's only a matter of time until Dr. Zaius rules us all.

Chimps have long been known to stockpile food, but a 30-year-old chimp named Santino is making news because he does far more: he finds stones in his Swedish zoo home, smashes them into throwable size, and then stores them in caches that face the viewing area on the edge of his enclosure. When tourists show up, he lets fly, throwing up to 20 rocks in rapid succession and sometimes hitting visitors standing 30 feet away across a water-filled moat. When no rocks are available for his villainy, Santino hacks chunks of concrete off the artificial boulders in his pen and assaults humans using those.

We have a super-ape on our hands, people. And frankly, I don't think this is going to help:

In order to decrease his agitation, which was fueled in part by high testosterone levels characteristic of dominant males, the animal was castrated last fall.

No video of Santino's (premeditated) war on mankind appears to be available, despite the fact that it would be the most successful YouTube video of all time.

Army Times, always a fascinating read, has a beguiling little item today on face transplants, a medical procedure well on its way to becoming military sci-fact. This quote's from Col. Robert Vandre, project director at the Armed Forces Institute for Regenerative Medicine:
"You wouldn’t want like a black person to have a white person's hands, that would look weird. You wouldn’t want really hairy hands on a non-hairy person or vice versa. I guess you could wear long sleeves. The face, if you just get the skin and muscles you won’t look like the person who donated, but if you get the bones and the muscles and the skin, essentially you’re going to look like the donor," Vandre said.

Kudos for candor, but how many face and hand donors are they expecting to choose from, exactly?

Read the article, then read this one, then go here for a creepy robot video chaser.

The Fine Print

Is AHIP, a health insurance trade group, really in favor of universal healthcare?  They say they've had a change of heart and now support the idea, but Michael Hiltzik is skeptical:

As a connoisseur of health insurance lobbying practices, however, I withheld judgment until I could scan the fine print. What I found by reading AHIP’s 16-page policy brochure was that its position hadn't changed at all. Its version of "reform" comprises the same wish list that the industry has been pushing for decades.

Briefly, the industry wants the government to assume the cost of treating the sickest, and therefore most expensive, Americans. It wants the government to clamp down hard on doctors' and hospitals' fees. And it wants permission to offer stripped-down, low-benefit policies freed from pesky state regulations limiting their premiums.

As for universal coverage, which is the goal of many reformers (if not yet the Obama administration), the industry will accept a government mandate to take on all customers, as long as all Americans are required by law to buy coverage.

Who wouldn't love a deal like that?  Just like Coca-Cola would be delighted with a government mandate that it sell cans of Coke to all comers in return for a government law requiring everyone to buy cans of Coke.  Ka-ching!

But Ron Brownstein says that AHIP's members might be willing to compromise here, promising not only to insure all comers, but to do it at a fair price.  Not the exact same price for everyone, but close:

[AHIP's Karen Ignani] suggested an arrangement in which insurers and the government in effect would divide the cost of insuring the biggest risks through a combination of rating reform and public subsidies. "You have to think about the ratings and the subsidy in tandem," she argued. For instance, she noted, a pure form of community rating — in which everyone is charged the same premium regardless of their age or health status — would substantially increase rates on young healthy families (while reducing them on older or sicker people). In that instance, "you might decide well then we could subsidize those [young] individuals to cushion that," she said. Alternately, she said, you might allow insurers to vary rates somewhat based on age, but use subsidies to ensure that say, "nobody over 55 would have to pay more than 10 per cent of income" for premiums — as California did in its reform. More details on the issue are coming: "You will hear a great deal from us soon about rating," she said.

This all comes via Ezra Klein, who thinks it's quite possible that insurers are serious about this.  Unfortunately, he also argues that this is the easy part of a healthcare deal: the hard part is dealing with pharma, doctors, and hospitals.  Details here.

Atheists Rising?

An interesting paragraph from a USA Today article on the declining number of self-identifying Christians in America:

So many Americans claim no religion at all (15%, up from 8% in 1990), that this category now outranks every other major U.S. religious group except Catholics and Baptists. In a nation that has long been mostly Christian, "the challenge to Christianity … does not come from other religions but from a rejection of all forms of organized religion," the [American Religious Identification Survey] report concludes.

Time for the atheists lobby to issue a press release. Thing is, no matter how numerous atheists get in this country, they will never match the Religious Right. The members of the evangelical community believe passionately in their faith, and want to see it flourish in America. Some atheists are equally passionate about their non-belief, but I think it's the nature of atheism that many of its adherents simply say "meh" when it comes to religion. Not the attitude you need if you want to be a political power.

The Great Recession

From the World Bank:

The global economy is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential. World Bank forecasts show that global industrial production by the middle of 2009 could be as much as 15 percent lower than levels in 2008. World trade is on track in 2009 to record its largest decline in 80 years, with the sharpest losses in East Asia.

The Republican response to this, apparently, is that the U.S. government should "go on a diet."  Words fail.

The Contagion Effect

One of Ezra Klein's readers argues that there are some practical problems to nationalization that its supporters haven't addressed.  One of them is the contagion effect:

Take JPMorgan Chase, for example....It continues to operate from a position of relative strength, meeting capital requirements, and it still has a significant market capitalization. Yet it has also taken TARP money. Should JPMorgan Chase be nationalized in this scenario? If you say yes, why?....And what do you do when you seize JPMorgan Chase? Do you keep management, which did better than just about anybody else? Or get rid of them? Do you really think you’re going to find a better CEO than Jamie Dimon?

....And if you say no, let them stay private, consider the fate of this bank if other large banks are nationalized. Investors would flee the stock, fearing it was next. Short sellers would pummel the stock. The company would face a difficult time raising capital. Business customers would flee to government-owned banks. It would be, as Blinder argues, just a matter of time.

This is a real issue, but there's also a fairly straightforward answer: do all the nationalizations at once.  The Treasury Department is already moving ahead with its "stress tests" of large banks, and if they chose to, these tests could be used to decide which banks need to be nationalized and which ones don't.  Then, once the tests are done, the findings are announced at a stroke.  Banks A, B, and C are being taken over.  Everyone else gets a clean bill of health.

If anything, this would help banks like JPMorgan (assuming they passed the stress test, of course).  After all, investors are fleeing bank stocks already, and a firm statement of who's healthy and who's not would give investors some basis for thinking that the healthy banks really are healthy and aren't going to be taken over.  Business customers would also be reassured, and the Fed has made money so cheap, and set up so many term lending facilities in the past year, that non-nationalized banks would almost certainly compete on an equal footing with the banks that are government owned.  That's how it worked in Sweden, where two banks were nationalized during their banking crisis without bringing down the others.

There are plenty of technical and operational issues with nationalizing gigantic banks, but the contagion argument strikes me as one that can be addressed fairly effectively.  If the tests are seen as fair, and the results are announced all at once, the system will not only survive, it's likely to be strengthened.

David Addington, former lawyer for then-Vice President Cheney and the brains behind many of the Bush Administration's most horrifying executive power grabs and war on terror policies, is having trouble finding a job. Perhaps he should write a book, like the similarly employment-challenged Alberto Gonzales. Unlike Gonzales, Addington stands strongly and unabashedly behind the work he did. Unlike Gonzales, Addington would probably write a compelling and interesting book.

Would it suck that Addington would make money off a book deal? Yes. Would the book likely be valuable to researchers and historians for years to come? Also yes.

Withdrawing from Iraq

We are finally starting to get out of Iraq:

The U.S. will reduce its military presence in Iraq by 12,000 troops over the next six months as part of the first major drawdown since President Obama announced his plan to end combat operations in the country next year, U.S. military officials in Baghdad said Sunday.

....The plan calls for the number of U.S. Brigade Combat Teams to drop from 14 to 12. Two brigade teams that had been scheduled to redeploy in the next six months will not be replaced. A British brigade will also leave Iraq without being replaced, taking the final British combat troops out of Iraq.

When the American move is completed, it would reduce the U.S. military presence in Iraq to about 128,000 troops, dipping for the first time below the number of troops in the country before then-President Bush ordered the buildup he referred to as the "surge" in 2007.

It's only a start.  And it's not a big one.  But it's still an important milestone as well as the partial fulfillment of a campaign promise, and I didn't want it to pass without at least noting it.

Atrios sez:

I know I'll make this point a billion times before this is all over, but there's a difference between thinking that well run financial intermediaries (which, in theory, competition will create) are necessary for a modern economy and believing that the semi-oligopolistic system of financial intermediaries which have demonstrated beyond all reasonable doubt that they're at best incompetent and most likely some combination of incompetent and incredibly corrupt should be maintained at a cost of hundreds of billions of dollars (optimistically) in taxpayer money.

I don't really get this.  Aside from the nitpicky point that the United States actually has one of the least oligopolistic banking sectors in the developed world, what's being argued here?  That we should let the existing banks fail?  That we should temporarily nationalize them?  Which ones?  And if we do, how should we treat all their creditors and counterparties?  That's the big question (not whether shareholders should get wiped out — of course they should, but they're mostly wiped out already), and it doesn't go away just because we nationalize TitanoBank instead of shoveling cash down its gaping maw in return for preferred shares.  In fact, it makes the question even more salient, since in a post-nationalization world Uncle Sam would be legally on the hook for all those claims.

As for the cost of all this, we might as well suck it up.  We're way beyond the point of thinking we'll get out of this mess without spending a trainload of taxpayer dough one way or another.  This debacle is going to cost us hundreds of billions of dollars no matter what we do.

And when it's over, guess what?  Pretty much all the same people will be in charge.  A few senior executives will be out of jobs, but that's about it.  And the ones who replace them won't be much different.  The fact is that these people did what they did not because they're stupid, but because the system practically begged them to act the way they did.  That's what's broken, and fixing it depends mostly on what kind of new financial regulations we put in place going forward.  I guess we're still in firefighting mode and don't have time to address that right at the moment, but I'd sure like to start hearing more about it sometime soon.  In the long run, figuring out an effective way to regulate leverage, wherever and however it appears, is probably a lot more important than deciding which bureaucratic solution we should use to clean up the corpses currently littering the battlefield.

Let God Sort 'Em Out

Richard Shelby (R–AL), the ranking minority member of the Senate Banking Committee, doesn't want to nationalize ailing big banks like Citigroup.  He thinks we should just shut them down, like we do with smaller banks.  Josh Marshall comments:

Something like this is both heartening and insanely distressing at the same time because what exactly does he think people are talking about when people talk about nationalization? They're talking about some form of FDIC-like takeover, though probably one that would take longer and be much more complicated since you simply can't find another bank that is going to buy or most of its assets at some knock-down price over the weekend — certainly not in the present climate. You either clean the bank up (which would require what amounts to a de facto bankruptcy proceeding) and sell it back into private hands or break it up and sell it off in individual pieces — likely some combination of the two.

This is worth unpacking a little bit.  The FDIC is not set up to run distressed banks.  It's set up to either (a) sell them off immediately to another bank or (b) hold onto them just long enough to liquidate everything.  And the FDIC is really, really not set up to run a big money center bank like Citigroup, which is both a normal depository institution plus a fantastic agglomeration of other financial entities, including derivatives underwriting, asset management, private equity portfolios, a staggering variety of trading operations spread all over the world, and one of the world’s biggest insurance companies.  This is not FDIC territory.

Selling off Citigroup is also not an option.  Who's big enough to buy them?  Nobody.  What's more, their stock is currently selling for about buck a share.  There are thousands of rich investors who could buy the whole place, lock stock and barrel, anytime they wanted to.  But no one wants to.  There's a reason, after all, that huge chunks of the stuff on Citi's balance sheet is called toxic waste.

So: the FDIC can't run Citigroup and nobody in their right mind wants to buy them.  On the other hand, with Citi's stock hovering around a dollar, their shareholders have already lost nearly their entire investment.  Allowing Citi to fail would hardly cause them any more damage than they've already suffered.  So why not just let them go under, as Shelby wants?

The answer is that we could do this.  This was the gamble Ben Bernanke and Henry Paulson took last September when they allowed Lehman Brothers to fail — dammit, it's time to enforce some market discipline on these guys! — and their gamble failed spectacularly.  The global financial system nearly collapsed even though Lehman wasn't all that big.

But hey — maybe Lehman taught everyone a lesson.  Maybe all of Citgroup's creditors and counterparties have already priced in the possibility of default.  You never know.  And maybe if Citigroup fails, and they all end up with a bunch of worthless notes, they'll just shrug and go about their business.

Then again, maybe not.  Maybe Citigroup really is too big to fail.  And maybe if they fail, and all their creditors and noteholders and counterparties are stiffed, maybe they'll all fail too.  And then all of their creditors and noteholders and counterparties will also fail.  Etc.  And then it's back to the dark ages for all of us.

Which is it?  I don't know.  All I can say is: Richard Shelby has way bigger balls than I do.  Call me a wuss if you must, but I'm really not willing to gamble on nuclear meltdown, especially since I think the odds are pretty strongly in favor of Citigroup having the ability to take all the rest of us down with them if they collapse.  Shelby, however, the ranking Republican member of the Senate Banking Committee, guardian of the nation's financial health, is apparently willing to just say "fuck it," roll the dice, and hope against hope for snake eyes.

Of course, this is precisely the kind of imbecilic, high-stakes gambling that got us into this mess in the first place.  Maybe Shelby ought to think twice before deciding that the hair of the dog might get us out.