How the Fed secretly bailed out American and foreign banks

Thanks to reader Mark, I came across this report by US Senator Bernie Sanders about a GAO audit of the Federal Reserve that reveals that it secretly loaned out over $16 trillion dollars to American banks and businesses all over the world. The audit also revealed that there were people on the board of the Fed who seemed to be benefiting from the Fed’s actions.

Such audits of the Fed are a new thing this year, thanks to legislation sponsored by Sanders. It is ridiculous that such secrecy has been allowed for so long to institutions that are publicly funded and use public money.

Relativity-8: General relativity

(For previous posts in this series, see here.)

To understand the role of Einstein’s general theory of relativity, recall that the original OPERA experiment claimed that they had detected neutrinos traveling faster than the speed of light. This posed a challenge to what is known as Einstein’s theory of special relativity, proposed in 1905, which said that the relationship between the clock and ruler readings for two observers moving relative to one another would be different from the ones given by the seemingly obvious relationships derived by Galileo centuries earlier. According to Einstein’s theory, it is the speed of light that would be the same for all observers, while clock readings could differ, and that Einstein causality (the temporal ordering of any two events that are causally connected by a signal traveling from one to another) would be preserved for all observers. One inference that followed from Einstein causality is that no causal signal can travel faster than the speed of light, and this was what was seemingly violated by the OPERA experiment.

But Einstein had a later and more general theory that he proposed in 1915, called the general theory of relativity, that included the effects of gravity. He showed that clock readings were not only affected by the speed with which the clock was moving, they were also affected by the size of the gravitational field in which the clock found itself. This is the source of what is referred to as the ‘gravitational red shift’ that enters into cosmology that causes the light emitted by distant stars and galaxies to be shifted towards larger wavelengths as they escape the gravitational field of those objects on their journey to us.

To understand what is going on, recall that when we measure the elapsed time between two events, what we are really doing is measuring the number of clock ticks that occur between the events. According to general relativity, the stronger the gravitational field, the slower the rate at which a clock ticks. The slower the rate at which a clock ticks, the less time that it records as having elapsed between two events.

So, for example, since we know that the Earth’s gravitational field decreases as we go up, this means that if we take two identical clocks, one on the floor and the other on the ceiling, the one on the floor would have fewer ticks between two events than the one on the ceiling, even if both are stationary. So the clock on the floor would ‘run slower’ than the one on the ceiling and hence the time interval measured between two events measured by clocks on the floor will be less than that measured by clocks on the ceiling.

In the OPERA experiment, the time measurements were made using GPS satellites. These are whizzing by at both high speeds (about 4 km/s) and high altitudes (about four Earth radii). Typically, the signals are handed off from one satellite to another as they appear and disappear over the horizon and the transition is almost seamless and produces such small errors that we do not notice it. But the OPERA experiment requires such high precision that they arranged to do the experiment during the transit time of just a single satellite so that even that source of error was eliminated.

Because the rate at which clocks run depends upon the size of the gravitational field, one has to make corrections to allow for the fact that the time readings given by clock readings of the satellites will be different from the time readings given by clocks on the Earth, and so one needs to make extremely subtle corrections to the GPS time stamp to get the correct clock readings on the Earth. This is why much of the attention has focused on this aspect. It is not that the OPERA experimenters overlooked this obvious feature (such general relativistic corrections are routinely made by GPS software in order to make the GPS system function with sufficient accuracy) but whether they have made all the necessary corrections to the extremely high level of precision required by this experiment.

Carlo Contaldi at Imperial College, London has suggested that the clocks at CERN and Gran Sasso were not synchronized properly due to three effects, one of which is the fact that the gravitational field experienced by the satellite is not the same at all points on its path since the Earth is not a perfect sphere. He says that the errors that would be introduced are of the size that could produce the OPERA effect. (You can read Contaldi’s paper here.)

Ronald A. J. van Elburg at the University of Groningen has argued that subtle effects due to the motion of the detectors with respect to the satellite could have shifted the time measurements at each clock on the ground by 32 nanoseconds in the directions required to explain the 60 nanosecond discrepancy. (You can read van Elburg’s paper here and reader Evan sent me a link to a nice explanation of this work.)

The OPERA researchers (and some others) have challenged some of these explanations and said that they will provide a revised paper that explains more clearly all the things they did.

There have been no shortage of ideas and papers pointing out problems and possible alternative explanations for the OPERA results. Sorting and sifting through them all before we arrive at a consensus conclusion will take some time.

The Occupy Wall Street movement gains allies

The Occupy Wall Street movement is broadening its base and gaining more allies every day. Now a group called Occupy Writers has joined in that contains such famous names as Salman Rushdie, Neil Gaiman, Margaret Atwood, Alice Walker, Lemony Snicket, Barbara Ehrenreich, Naomi Klein, and Ann Patchett, some of whom have contributed original writings, such as the thirteen observations by Lemony Snicket, a few of which are given here:

  • People who say money doesn’t matter are like people who say cake doesn’t matter—it’s probably because they’ve already had a few slices.
  • There may not be a reason to share your cake. It is, after all, yours. You probably baked it yourself, in an oven of your own construction with ingredients you harvested yourself. It may be possible to keep your entire cake while explaining to any nearby hungry people just how reasonable you are.
  • Historically, a story about people inside impressive buildings ignoring or even taunting people standing outside shouting at them turns out to be a story with an unhappy ending.

Meanwhile Saturday Night Live broadcasts a press conference by New York City mayor Michael Bloomberg.

Siri and the Turing test

I don’t have an iPhone of any kind but was intrigued by the reports of the latest one that had the voice recognition software known as Siri that seems to have a conversational ability reminiscent of HAL in 2001: A Space Odyssey, as can be seen from this compilation of a conversation.

I am not sure if this is a hoax but the person who put up the video assures skeptics that this is real and says that anyone can test it by getting hold of a Siri-enabled iPhone. I am curious if any blog reader who has it can confirm.

As an aside, I am a bit bothered by Siri referring to the user as ‘Master’. I know it is not a real person but the feudal overtone is jarring.

Taking his claims at face, it seems as if Siri is able to pass at least a low-level Turing test.

The case against circumcision

PZ Myers makes the strong argument that this practice is nothing but ritualized child abuse.

It is quite amazing how we accept as normal long-standing practices that, if they were not covered by the protective umbrella of old religions, we would reject with horror otherwise as the actions of cults or barbarians.

The Daily Show has more on the bizarre things that religious people believe and do.

What’s the one after 9-0-9?

Herman Cain took a beating for the fact that his 9-9-9 tax plan would raise taxes on low and middle income people while giving rich people a huge tax break.

So he has tweaked it and now says that for the poor it will be a 9-0-9 plan. You can be sure that such ad-hoc lurches due to pressure has produced another half-baked plan that will also be roundly attacked. So what’s next?

This gives me an excuse to cue up the Beatles.

Five bank behemoths that hold the political system hostage

Sarah Jaffe and Joshua Holland list them (Bank of America, JP Morgan Chase, Citigroup, Wells Fargo, and Goldman Sachs) and explain why they are so bad and how they get their way.

Currently, Bank of America is engaged in yet another effort to swindle the taxpayers. When it took over Merrill Lynch it also acquired all the toxic derivatives the latter owned. Bank of America is an FDIC-insured institution, which means that its deposits are taxpayer-insured, while Merrill Lynch is not. Now Bank of America is apparently trying to quietly shift the Merrill Lynch liabilities over to Bank of America so that the taxpayers will bear whatever loss occurs,

Of course the Federal Reserve, which has already used enormous amounts of taxpayer funds to bail out the banks, supports the move but the FDIC is balking, fearing getting stuck with a huge bill.

When did humans arrive in the Americas?

It used to be thought that they came 13,000 years ago across the then-existing land bridge connecting Siberia and Alaska, during what is known as the ‘Clovis’ period.

A paper published today in the journal Science has measured with high precision (with new techniques) the age of a mastodon fossil bone with a weapon point embedded in it that was found in 1970. It found that it is 13,800 years ago, with an uncertainty of only 20 years, suggesting that humans were here earlier than thought, supporting other evidence that there was human hunter activity here as early as 15,000-16,000 years ago.

A large number of mammals (mastodons, woolly mammoths, sabre-toothed cats, giant sloths, camels) disappeared rapidly around 12,700 years ago and it was thought that this must have been due to rapid climate change as the Ice Age ended, since Clovis hunters were not thought to have been around for that long.

But the new earlier date for humans in the Americas suggests that mammal extinction may have been accelerated by humans hunting them with weapons.