The Big Picture

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• Wednesday AM Reading List
• New, Inexpensive Blood Test Tells You “How Long You Will Live” … But You Can Cheat and Live Longer
• Open Thread: Market Comeback?
• Votes on Measures to Adjust the StatutoryDebt Limit, 1978 to Present
• Tuesday Afternoon Reads
• Japan shows up in April IP
• Guide To the Greek Crisis
• Long Island Index
• In an Undercollateralized World
• The Long Island Index: The Clock is Ticking

Wednesday AM Reading List Posted: 18 May 2011 01:30 AM PDT Here are the latest adds to my Instpaper: • Death Derivatives Emerge From Longevity Risks (Bloomberg) • Health vs. Pork: Congress Debates the Farm Bill (PCRM) • Abolish the Debt Ceiling! (Slate) • China Home Buyers Make Vancouver Pricier Than NYC (BB) • What Journalism Is Like Now: Working With 2,000 Sources (GigaOM) • Iain Sinclair on London (The Browser) • Thin-skinned bloggers (II) (The Star) • Rosanne Barr on Charlie Sheen: And I Should Know (NY Magazine) • Live from New York, It’s Anthony Weiner (Moment Magazine) • “We're On A Fucking Roll, Dude”: The 1993 Profile Of Lenny Dykstra That Warned Us What Was Coming (Dead Spin) What are you reading?

New, Inexpensive Blood Test Tells You “How Long You Will Live” … But You Can Cheat and Live Longer Posted: 17 May 2011 11:30 PM PDT Washington's Blog strives to provide real-time, well-researched and actionable information.  George – the head writer at Washington's Blog – is a busy professional and a former adjunct professor. ~~~ Scientists have developed a simple blood test to determine how long you will live. How? By measuring the length of your “telomeres”, the ends of chromosome. Basically, telomeres allow our cells to divide. When we’re young, our telomeres are long, and we can produce new cells with ease. As we age, our telomeres shorten, and it is harder to produce new cells. With fewer new cells to replace the older ones, we age. As the New York Times’ Gretchen Reynolds explained last year: Telomeres are tiny caps on the end of DNA strands — the discovery of their function won several scientists the 2009 Nobel Prize in medicine. When cells divide and replicate these long strands of DNA, the telomere cap is snipped, a process that is believed to protect the rest of the DNA but leaves an increasingly abbreviated telomere. Eventually, if a cell's telomeres become too short, the cell ''either dies or enters a kind of suspended state,'' says Stephen Roth, an associate professor of kinesiology at the University of Maryland who is studying exercise and telomeres. Most researchers now accept telomere length as a reliable marker of cell age. In general, the shorter the telomere, the functionally older and more tired the cell. The University of Texas Southwestern Medical Center at Dallas, Department of Cell Biology and Neurosciences proved in 1996 the basic hypothesis using cell cultures: We … test[ed] the hypothesis that elongation of telomeres would extend the lifespan of cells in culture… The lifespan of these hybrid cells was longer than that of the hybrids in which telomeres had not been elongated. These observations provide the first direct evidence supporting the hypothesis that telomere length determines proliferative capacity of human cells. Ethics Mark my words, a tidal wave of ethical issues has been released by the new, inexpensive (around $700 U.S. dollars) blood test for telomere length. Initially, every life insurer in the world will demand that all applicants get the test, for obvious reasons. If you’re telomeres are really short, you won’t live as long … which radically shifts the actuarial data. Indeed, as shown below, short telomeres might even outweigh risk factors such as smoking. While life insurance will be the area most directly impacted by the new blood test, many other areas of life could be affected as well. For example, health insurers may want their insureds to get tests as well, on the theory that people with shorter telomeres will need more medical care … and should thus pay higher premiums. As the Independent notes: The results of the tests might … be of interest to companies offering life-insurance policies or medical cover that depend on a person’s lifetime risk of falling seriously ill or dying prematurely. Employers may want their candidates to take the blood test. After all, why spend years training someone who might soon kick the bucket? Even lovers might insist their would-be spouses get a test before saying I do. It’s no fun to have kids with someone who won’t be there to raise them. How to cheat Exercise lengthens telomeres. As the Post-Gazette writes: People who exercise regularly are up to nine years younger, biologically, than sedentary people of the same chronological age, according to a new study by a team of British researchers. You already knew that people who keep fit live longer than people who don’t. Studies have shown they’re less likely to have heart attacks, or to suffer from diabetes, cancer and other degenerative diseases. What makes this study by a team from Kings College in London different from all others that have come before it is that it may explain why. *** “Exercise helps protect against the slowing-down mechanism.” The British researchers studied 2,400 twins. Their research focused on telomeres, the caps at the end of chromosomes, the structures that carry genes. When we’re young, our telomeres are long. But every time a cell divides, telomeres get shorter. When telomeres get too short, the cell can no longer divide. Cells die. Muscles weaken, skin wrinkles, eyesight and hearing fade. Prof. Tim Spector and Dr. Lynn Cherkas of Kings College, and Prof. Abraham Aviv of the New Jersey Medical School found the telomeres in those who exercised vigorously were significantly longer than those in their twins who didn’t. The difference was still significant even if the twin who exercised smoked or was overweight. “These data suggest that the act of exercising may actually protect the body against the aging process,” said Mr. Spector, who is a professor of genetic epidemiology. The study was published last month in the Archives of Internal Medicine. “Overall, the difference in telomere length between the most active subjects and the inactive subjects corresponds to around nine years of aging,” Dr. Cherkas said. To maximize the anti-aging effect of exercise, you need to work out vigorously for at least three hours a week, the researchers said. “It is not just walking around the block,” said Prof. Spector. “It’s really working up a sweat.” But people who work out at a moderate pace for an hour to an hour and a half a week can still reduce their biological age by as much as four years, the researchers said. The study indicates that exercise “is actually a buffer against oxidative stress,” said Dr. Moira Davenport, director of sports and emergency medicine for Allegheny General Hospital. Oxidative stress is what damages and kills cells. “Oxygen is essential to life itself. But it is also inherently dangerous to our existence. The same process that causes a cut apple to turn brown or iron to rust is the cause of all the chronic degenerative diseases we fear and even the aging process itself,” said Dr. Ray Strand, a specialist in nutritional medicine. “As oxygen is utilized within the furnace of the cell to create energy, occasionally a charged oxygen molecule is created, called a free radical,” Dr. Strand said on his Web site, nutritional-medicine.net. “If this free radical is not readily neutralized by an antioxidant, it can go on to create more volatile free radicals, damage the cell wall, vessel wall, proteins, fats, and even the DNA nucleus of our cells.” And the New York Times’ reported last year: It ''was striking,'' recalls Dr. Christian Werner, an internal-medicine resident at Saarland University Clinic in Homburg, ''to see in our study that many of the middle-aged athletes looked much younger than sedentary control subjects of the same age.'' *** In Mr. LaRocca's work, people were tested both for their V02max — or maximum aerobic capacity, a widely accepted measure of physical fitness — and their white blood cells' telomere length. In subjects 55 to 72, a higher V02max correlated closely with longer telomeres. The fitter a person was in middle age or onward, the younger their cells. *** ''one could speculate,'' he concludes, ''that any form of intense exercise that is regularly performed over a long period of time'' will improve ''telomere biology,'' meaning that with enough activity, each of us could outpace the passing years. An extract of the Chinese herb astragalus has been engineered by a large California biotech company to produce a supplement which helps protect telomeres. But many otherwise healthy and reasonably-priced foods and supplements can also protect your telomeres as well. As Dr. Andrew Weil notes: A study in Hong Kong suggest[ed] that people who drink green tea regularly may be younger, biologically, than those who don’t drink green tea or consume only small amounts. The science here is somewhat complex, so bear with me while I summarize this fascinating new study. The researchers looked at the length of telomeres, repeating DNA sequences at the ends of chromosomes. (One expert suggests thinking about telomeres as the caps on the ends of shoelaces that prevent the laces from unraveling.) In cells, telomeres prevent chromosomes from fusing with one another or rearranging – undesirable changes that could lead to cancer and other life-threatening diseases. *** Researchers looked at telomere lengths of 976 Chinese men and 1,030 Chinese women, all over the age of 65. All the study participants completed a food frequency questionnaire. *** The researchers reported that telomere length was associated only with tea drinking – participants with the highest intake, three cups per day of tea, had longer telomeres than participants who drank an average of only one quarter of a cup of tea daily. Most participants drank green tea while a few drank black tea. The investigators reported that the average difference in telomere length corresponded to “approximately a difference of five years of life” and that the “antioxidative properties of tea and its constituent nutrients may protect telomeres from oxidative damage in the normal aging process.” In the same article, Weil notes that vitamins C and E also lengthen telomeres: A recent U.S. study found that telomere length was longer in women who took multivitamins regularly. Here, researchers looked at multivitamin use in a group of 586 women between the ages of 35 and 74. They found that higher intakes of the antioxidant vitamins C and E from food were associated with longer telomere length. The findings were published in the June 2009 issue of the American Journal of Clinical Nutrition. Here’s Weil on Omega 3s: Researchers at the University of California, San Francisco, have found another action of omega-3s that may help explain why they offer benefits for the heart. The investigators found that the more omega-3 consumed by patients with coronary heart disease, the slower the structures called telomeres at the ends of chromosomes shrank. And see this. Vitamin D helps to protect telomeres. Vitamin B6, B9 (called “folate”) and B12 help protect telomeres by reducing the amount of homocysteine in the body. As the Harvard School of Public Health notes: Folate, vitamin B6, and vitamin B12 play key roles in converting homocysteine into methionine, one of the 20 or so building blocks from which the body builds new proteins. Without enough folate, vitamin B6, and vitamin B12, this conversion process becomes inefficient and homocysteine levels increase. In turn, increasing intake of folate, vitamin B6, and vitamin B12 decreases homocysteine levels. Why is this important? Because high levels of homocysteine can greatly increase the rate at which your telomeres are shortened (trimethylglycine also significantly lowers homocysteine levels). Indeed, antioxidants in general helped protect telomeres. As the journal Circulation Research noted in 2004 (please excuse the hyper-technical language): Aging is associated with a rise in intracellular reactive oxygen species (ROS) and a loss of telomerase reverse transcriptase activity. Incubation with H2O2 induced the nuclear export of telomerase reverse transcriptase (TERT) into the cytosol in a Src-family kinase–dependent manner. Therefore, we investigated the hypothesis that age-related increase in reactive oxygen species (ROS) may induce the nuclear export of TERT and contribute to endothelial cell senescence. Continuous cultivation of endothelial cells resulted in an increased endogenous formation of ROS starting after 29 population doublings (PDL). This increase was accompanied by mitochondrial DNA damage and preceded the onset of replicative senescence at PDL 37. Along with the enhanced formation of ROS, we detected an export of nuclear TERT protein from the nucleus into the cytoplasm and an activation of the Src-kinase. Moreover, the induction of premature senescence by low concentrations of H2O2 was completely blocked with the Src-family kinase inhibitor PP2, suggesting a crucial role for Src-family kinases in the induction of endothelial cell aging. Incubation with the antioxidant N-acetylcysteine, from PDL 26, reduced the intracellular ROS formation and prevented mitochondrial DNA damage. Likewise, nuclear export of TERT protein, loss in the overall TERT activity, and the onset of replicative senescence were delayed by incubation with N-acetylcysteine. Low doses of the statin, atorvastatin (0.1 µmol/L), had also effects similar to those of N-acetylcysteine. We conclude that both antioxidants and statins can delay the onset of replicative senescence by counteracting the increased ROS production linked to aging of endothelial cells. For plain English information on antioxidant protection, see this, this, this, this and this. And yes, foodies are in luck: resveratrol from red wine also helps protect telomeres and dark chocolate helps to protect DNA from oxidative damage. Finally, a positive mindset and relaxation protect telomeres. As Bill Andrews – Ph.D. in Molecular and Population Genetics, former Director of Molecular Biology at biotech giant Geron from 1992 to 1997, one of the principal discoverers of the components of human telomerase, an enzyme that makes telomeres grow, inventor on 35 U.S. issued patents related to telomerase, awarded 2nd place as “National Inventor of the Year” – says: But then on the mental side it has been shown that people who have a lot of mental stress have shorter telomeres. Elizabether Blackburn has published some great papers finding people who are caregivers for Alzheimer’s patients have shorter telomeres because they are clearly under a lot of stress. So meditation might be something that can prevent telomere shortening. Even pessimism, people who are pessimistic have been shown to have shorter telomeres. If you ask a person a question like do you think you will live to be 100 and they say “no” they probably won’t because thier telomeres are going to be shorter. But if they answer “yes” the probably will because their telomeres are going to be longer. So, I try to be very opltimistic, not pessimistic. I try to cause everybody else to have stress, not me. For more on the benefits of mediation on health and brain functions, see this, this and this.

Open Thread: Market Comeback? Posted: 17 May 2011 04:00 PM PDT It looked pretty ugly today, but the markets made up much of their losses — the Nasdaq  flipped into the green, and the SPX and Dow made up more than half their losses. So what was this today? Beginning of a turn? Dead cat bounce? What say ye?

Votes on Measures to Adjust the StatutoryDebt Limit, 1978 to Present Posted: 17 May 2011 03:00 PM PDT CRS Report for Congress Prepared for Members and Committees of Congress Votes on Measures to Adjust the StatutoryDebt Limit, 1978 to Present Justin Murray Information Research Specialist May 10, 2011 Votes on Measures to Adjust the Statutory Debt Limit, 1978 to Present

Tuesday Afternoon Reads Posted: 17 May 2011 01:30 PM PDT The latest adds to my Instapaper: • The Invisible Stock Bubble (Smart Money) • Soros Sells Gold ETPs as Paulson Keeps Bet on Bullion Extending Record Run (Bloomberg) • 15 ways both bulls and bears can stay happy (Market Watch) • Sweden Wants Bail-In Model to Target Senior Bank Creditors (Bloomberg) • Bill Ford looks ahead (CNN Money) • Benmosche Getting 9% Yields Means AIG Playing with Junk/RMBS (Bloomberg) • The Real Social Security and Medicare Problem (and a Doable Fix) (NYT) • Sources: Seal Team 6 knew mission was a one-shot deal (Navy Times) • Netflix Now The Largest Single Source of Internet Traffic In North America (Tech Crunch) • Digital Images of Yale's Vast Cultural Collections Now Available for Free (Yale) What are you reading ?

Japan shows up in April IP Posted: 17 May 2011 12:45 PM PDT In what seems to be a key look at the impact of the Japanese disaster on US Industrial Production, the Fed said motor vehicle/parts production fell a sharp 8.9% in April m/o/m as the delivery of key parts from captive suppliers in Japan were halted. Capacity Utilization in the auto sector fell sharply to 61.9% from 68% and it also helped to drag down overall Utilization to 76.9% from 77.6%. Taking out the influence of auto’s, IP rose .2% led by electric utility output, computer/electronics production, machinery and mining. ~~~ April Housing Starts totaled 523k annualized, 46k below expectations but March was revised up by 36k to 585k so taken together its about a wash relative to forecasts. Both single and multi family starts were down. Permits were well below forecasts at 551k vs the consensus of 590k and March was revised lower by 20k, also in both single and multi family categories. I’ve been making the argument for a while now but I repeat that lower starts are needed with a market that still has way too many homes relative to the demand for them and therefore lower permits and starts are good for the long term at the expense of the short term growth impact. The obvious impact of punk starts is the hit to the GDP component of residential construction but we still need the short term pain in order to further cleanse this economy of its previous excess.

Guide To the Greek Crisis Posted: 17 May 2011 12:08 PM PDT Ralp Preusser and Sphia Salim at Bank of America Merrill Lynch look at various options in the Greek Tragedy > click for ginormous table Hat tip FT Alphaville

Long Island Index Posted: 17 May 2011 11:00 AM PDT > Be sure to check out the LI Index video here

In an Undercollateralized World Posted: 17 May 2011 10:30 AM PDT Frederick Sheehan is the co-author of Greenspan’s Bubbles: The Age of Ignorance at the Federal Reserve. His new book, Panderer for Power: The True Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession, was published by McGraw-Hill in November 2009. He was Director of Asset Allocation Services at John Hancock Financial Services in Boston. In this capacity, he set investment policy and asset allocation for institutional pension plans. ~~~ The world is undercollateralized. This is the single most important feature of the 2011 economy. Sixty years ago, if assets were worth less than loans, it was possible to work our way into the black. In 1950, 59% of U.S. corporate profits were from manufacturing; 9% were from finance. The roles of manufacturing and finance have reversed. Thus, we witness the desperate attempts to forestall what cannot be prevented. Yet, the world must deleverage. Banks must write off loans. Loans to bankrupt developers and companies must be called. Living standards must fall. The authorities are doing all they can to prevent the necessary deleveraging. That is the context in which Michael A.J. Farrell, CEO of Annaly Capital Management (NLY- NYSE), spoke to investors during his company’s first quarter 2011 conference call: “[T]he change that is happening in the financial markets is a chaotic mess. I believe the simultaneous execution of radical monetary policy, fiscal policy, and financial regulatory reform is introducing rather than reducing systemic risk in the global financial system by ignoring the simplest lesson of the scientific method. Rather than change one variable in a complex system and test the outcome, regulators and policymakers are changing virtually all of them at the same time: QRM [quantitative risk management], risk retention, the Volcker Rule, Basel III capital rules, derivatives clearing and related margin requirements. GSE reform. FAS 166 and 167. Zero-bound fed funds policy and QE2. Deficit financing, structural budgetary imbalances, and debt limit debate.” Where will this end? Michael Lewitt, proprietor of Harch Capital Management in Boca Raton, Florida, discussed the consequences of our leaders’ catastrophic policies in the May issue of his monthly letter, The Credit Strategist: “Rather than confronting sources of volatility, policymakers have sought to smooth out volatility at all costs. Unfortunately, these costs are proving to be very high and will ultimately prove prohibitive. Pressures build inside complex systems until they can no longer be suppressed. When these pressures can no longer be contained, they tend to erupt with far greater violence than had they been allowed to adjust earlier. Lewitt continued. Federal Reserve Chairman Greenspan and Bernanke “convinced investors the Fed would bail them out if the economy or markets got into serious trouble. As a result, investors engaged in increasingly reckless behavior…” The result: “Rather than saving the markets, Mr. Greenspan’s philosophy and approach guaranteed their failure.” One of the consequences is “the build-up of unsustainable debt levels.” We are overleveraged, undercollateralized, and accentuating these unsustainable imbalances. Lewitt notes, “the Federal Reserve has accounted for 101 percent of the net Treasury bond issuance during the first four months of 2011.” He goes on: “The U.S. government has been the largest purchaser of Treasuries, promulgating a Ponzi scheme of unprecedented scale.” The U.S. Treasury issues debt and QE2 buys it. Lewitt notes that 10-year Treasury yields have fallen from 3.59% on April, 11 2011, to 3.15% on May 6, 2011. Since the Fed is the sole net buyer, the 10-year-yield is not a real interest rate. (It has not been a true market for years, but never more so than now.) This is also true of the zero-percent short-term yield, one of the trial balloons listed by Michael Farrell. Interest rates are integral to the pricing of assets. A country without an interest rate has a stock market with a price, but not a value. The future-focused investor should estimate the value of stocks, commodities, and bonds as if interest rates were 5% higher. That day will come to pass: when assets seek the price of their true collateral. This is not widely appreciated. For instance, the recent dive in silver prices has been acclaimed as a bubble that popped. That might be true, if paper contracts were worth the value they purport to represent. There is not enough silver in the world to meet derivative claims – of ETFs, forward contracts, and so on. When this misrepresentation is widely recognized, physical silver will attract panic buying. Silver is a fairly small market, so this may go unnoticed. That will be a shame for the majority since everyone holds a paper claim that is not worth the money it is written on. Dollar bills, still flowing forth from the Federal Reserve (more exactly: from the U.S. Treasury’s Bureau of Printing and Engraving), are losing value every minute. Treasury securities are undercollateralized: the Treasury spends $3 for every $2 it receives in tax payments. What to do? One idea comes by way of footnote #8 in this month’s The Credit Strategist: “Readers interested in owning the Chinese currency can walk into the Bank of China in New York or Los Angeles and open a remnimbi-denominated account. While these accounts originally had limits on size, The Credit Strategist understands that these limits have now been lifted and meaningful amounts of money can be invested. These accounts are insured up to $250,000 by the FDIC (there must be some irony in that.)”

The Long Island Index: The Clock is Ticking Posted: 17 May 2011 09:28 AM PDT The Long Island Index is a project that gathers and publishes data on the Long Island region. The Index does not advocate specific policies. Instead, our goal is to be a catalyst for action, by engaging the community in thinking about our region and its future. Specifically, the Index seeks to: -Measure where we are and show trends over time -Encourage regional thinking -Compare our situation with other similar regions -Increase awareness of issues and an understanding of their interrelatedness -Inspire Long Islanders to work together in new ways to achieve shared goals > The Clock is Still Ticking The Clock is Still Ticking from Long Island Index on Vimeo. Video created for the Long Island Index 2011 report showing the key problems facing the region. The Rauch Foundation funded the Long Island Index to gather data on the Long Island region. Hat tip Simple Complexity

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