Monday Reads

Good Morning!!!

Breaking NEWS update:

Rep. Jane Harman of California to resign

Democrat Jane Harman, who represents a Los Angeles-area district, is expected to leave Congress to lead the Woodrow Wilson International Center for Scholars, a congressional source says.

U.S. Rep. Jane Harman (D-Venice), a leading congressional voice on anti-terrorism issues, plans to resign from Congress to head up the Woodrow Wilson International Center for Scholars, a senior congressional source confirmed Monday, setting up a special election to choose her successor in a coastal district that stretches from Venice into the South Bay.

There’s plenty of news to share today so grab a big mug of whatever it is that you drink and join in!!

First, some big news in business and the blogosphere.  AOL Is Buying The Huffington Post.

The two companies completed the sale Sunday evening and announced the deal just after midnight on Monday. AOL will pay $315 million, $300 million of it in cash and the rest in stock. It will be the company’s largest acquisition since it was separated from Time Warner in 2009.

The deal will allow AOL to greatly expand its news gathering and original content creation, areas that its chief executive, Tim Armstrong, views as vital to reversing a decade-long decline.

Arianna Huffington, the cable talk show pundit, author and doyenne of the political left, will take control of all of AOL’s editorial content as president and editor in chief of a newly created Huffington Post Media Group. The arrangement will give her oversight not only of AOL’s national, local and financial news operations, but also of the company’s other media enterprises like MapQuest and Moviefone.

I’m not sure if any of you caught the O’Reilly interview of Obama, but President Obama is insisting that he’s not moving to the center.  The one thing I keep hearing about this interview is that O’Reilly couldn’t stop interrupting the President.  I can only imagine how large that studio had to be to contain those big heads.

President Obama on Sunday dismissed the notion that his administration in recent weeks has pivoted toward the political center to raise his approval ratings as the 2012 campaign nears.

After ushering through Congress measures to throw a lifeline to troubled U.S. corporations, stimulate the economy and dramatically overhaul the nation’s healthcare system, Obama has since cut a deal with congressional Republicans on taxes and called for a freeze on most federal spending.

But when pressed Sunday during a live interview with Fox’s Bill O’Reilly on what political analysts say is a clear sprint toward the center, Obama dismissed the notion with a “no.”

“I haven’t — I didn’t move to… I’m the same guy,” he said.

When O’Reilly said the president’s critics call him “a big government liberal,” Obama replied that he inherited a nation on the brink of an economic crisis. That situation required his administration to take a number of “extraordinary steps” to avoid a severe economic depression, Obama said.

I wrote on the role of speculation in high food prices a few days ago .  Paul Krugman believes it’s a supply problem and wrote about it Sunday on the NYT.   He also considers climate change to be a factor. You may want to check it out.

Overall grain production is down — and it’s down substantially more when you take account of a growing world population. Wheat production (this time not per capita) is way down.

You might ask why a production shortfall of 5 percent leads to a doubling of prices. Part of the answer is that some kinds of demand are growing faster than population — in particular, China is becoming a growing importer of feed to meet the demand for meat. But the main point is that the demand for grain is highly price-inelastic: it takes big price rises to induce people to consume less, yet collectively that’s what they must do given the shortfall in production.

Why is production down? Most of the decline in world wheat production, and about half of the total decline in grain production, has taken place in the former Soviet Union — mainly Russia, Ukraine, and Kazakhstan. And we know what that’s about: an incredible, unprecedented heat wave.

Here‘s a wonky link to VOXEU that discusses financial contagion. It’s pretty interesting.  The article deals with contagion in the market for European Sovereign bonds but you can extrapolate the basic intuition to other assets.  Here’s one surprising insight.  It seems that many stocks that performed well during the financial crisis were frequently the one’s most likely to be subjected to ‘fire sales’ later on. That’s a tidbit worth remembering.

First, the fire sale discount is most pronounced for stocks which performed best during the crisis. Figure 2 illustrates this aspect by depicting the relative performance of non-exposed and exposed stocks as a function of the stocks overall return from July 2007 to July 2008. Most of the return shortfall of exposed stocks is concentrated among the stocks with the highest returns. This somewhat counterintuitive result can be explained by fund discretion about which asset positions to liquidate. Faced with funding constraints and investor redemption requests, distressed equity funds liquidated the best performing stocks rather than stocks with recent large capital losses. Thus, fire sales were more pronounced for stocks among the 10% best performing stocks. For these stocks we find average fire sale discounts above 75%.

President Obama addresses the US Chamber of Commerce today.  You can watch it on CSpan.

Picking up on the themes expressed in his State of the Union Address, President Obama will reaffirm his commitment to invest in rebuilding the nation’s infrastructure during a speech at the U.S. Chamber of Commerce today.

During that address before Congress, the President identified innovation, education, and infrastructure as the keys to stimulate the economy by increasing job growth and entrepreneurial opportunities.

Here’s a post for our BostonBoomer from Psychology today. Okay, it’s also for me. It’s called  Buddhism and Neuroscience: Neuroscience finds a friend in Buddhism. Here’s an interesting scientific view of a practice we Buddhists do to realize that there is no “soul”.

When a Buddhist applies the idea of constant change to the self and the soul, he gains an insight that other religions lack.  What we call a mind (or a self, or a soul) is actually something that changes so much and is so uncertain, that our terms for it do not find meaning.  The Buddhist word for self is anatta and it means ‘no self.’   It is used to refer to oneself, while cleverly reminding the user of the word that there is such thing.

Within this framework, one is immediately struck by the disconnect between perception and religious teaching.  All is endlessly changing, but I feel unified and unchanged from moment to moment, year to year.  The way things feel becomes suspect, just as it does in modern neuroscience.  Broadly, both Buddhism and neuroscience converge on similar points of view: the way it feels to be you isn’t how it is, that even our language about ourselves is to be distrusted (witness the tortured negation of anatta), and there is no permanent, constant soul in the background.

Despite saying there is no self, Buddhism does posit an immaterial thing that survives the brain’s death.  Through life there is a consciousness, always changing like the world, one mental state rising like a wave to crash on the beach, then another and another.  After a person’s death, the consciousness re-incarnates.  This isn’t much of a trick, since even during a Buddhist life, each moment can be considered a re-incarnation from the moment before.  The waves still lap, the beach shifted.  If you’re good, they might lap at a higher organism.  If you’re not, well, insects clearly have consciousness and someone’s waves need to supply it.

So how does Buddhism do?  Pretty well.  Buddhism lays out the concept that there is no mind the way we tend to consider them (as we consider our self).  In broad strokes, neuroscience and neurology agree.

Kinda cool hmm?

So, what’s on you reading and blogging list today?