Best... Day... Ever

Yes, the Dow Jones average had its largest single-day point gain yesterday, with news of a “new bailout” that involves the government directly investing in various troubled banks. The Bush administration announced the plan yesterday, which involves $250 billion on top of the $700 billion already funneled to financial firms, as well as additional guarantees of bank transactions from the FDIC. Bush himself argued that the move is “essential so that the free market can continue to function,” though grumbling from some conservative allies suggested that the government might essentially be destroying the free market in order to save it. The markets gained back about a third of what they lost last week.

Of course, the untold story if you read US newspapers and websites is that the markets weren’t necessarily reacting to something the US government did… the markets these days are global, and the huge groundswell was already building through the day around the world. It began because European leaders agreed on their own bank protection plan, which the US plan basically copied. The Europeans had no compunctions on what they were doing, calling this a “re-nationalization.” The big winner appeared to be French President Nicolas Sarkozy, who managed to get the various interested parties to stop yelling at each other long enough to broker a deal.

The European leaders emphasized that “no bank will be allowed to fail,” and vaguely implied criticisms that the expensive US bailout was both late-arriving and ineffective. The French Financial Minister basically said that she would never have let Lehman Brothers fail on her watch. If you take a look at the history of the past couple decades, European nations have a varied history with nationalized banks, ranging from the catastrophe that was France’s governmental involvement with Credit Lyonnais to the unqualified success of the Swedish nationalization of its financial industry. However, this is different from those past experiences because it involves every EU nation rather than individual nations acting on their own. It seems to be what many economists were calling for all along and has certainly had the success in drawing a market reaction that the initial reveal of the so-called “Paulson Plan” did not.

One interesting aspect of this crisis may be the continued emergence of the EU as a modern superpower. Many in the United States still think of ourselves as the world’s only superpower, but that’s certainly not the case in an economic sense, and that may be the most important one. The EU and China have made massive strides in recent years, to the point where the EU economy may be smaller but better managed, and the Chinese economy is large enough for that nation to start running foreign policy based on monetary aide. I asked a week or so ago what the big change that comes out of the current financial crisis will be, and it may end up being American recognition of the EU as a collective power on the world stage.

Meet the New Nobility

The Nobel prizes, perhaps the greatest honors given out by mankind, have been announced, and there are some surprises and some interesting stories. Here’s who’s getting them this year:

Physics: Yoichiro Nambu (b. Tokyo, currently at the Fermi Institute in Chicago), for the discovery of the mechanism of spontaneous broken symmetry in subatomic physics. Also, Makoto Kobayashi & Toshihide Maskawa (KEK in Kyoto), for the discovery of the origin of the broken symmetry which predicts the existence of at least three families of quarks in nature. The Irish news service RTE reported that “They laid the theoretical foundations for modern understanding of how the laws of physics differ for matter and anti-matter.”

Medicine: The prize went to three researchers crediting with discovering important viruses, this allowing for their effective treatment. The honorees are Harald zur Hausen (German Cancer Research Centre, Heidelberg) for his discovery of human papilloma viruses causing cervical cancer, and Francoise Barre-Sinoussi & Luc Montaignier (Institut Pasteur, Paris) for their discovery of human immunodeficiency virus. Definitely deserved all around.

Chemistry: Three Americans: Osamu Shimomura (born in Japan), Martin Chalfie, & Roger Tsien, received the prize for the discovery and development of the green fluorescent protein, GFP. Remember those pictures of the glowing cats? Yeah, that was these guys. I want a glowing cat. It was reportedly discovered in jellyfish, then researchers discovered they could use it as a study marker.

Literature: I personally think the literature branch is completely out of touch with reality. I’m not usually nationalist, but the head of the committee said the other day that there’s “nothing of value” coming out of America right now. Uh-huh. The prize this year went to a French writer I’ve never heard of, Jean Marie Le-Clezio, "author of new departures, poetic adventure and sensual ecstasy, explorer of a humanity beyond and below the reigning civilization."

Peace: Probably the most prestigious prize goes this year to the former President of Finland, Martti Ahtisaari. He has apparently been a peace moderator everywhere from Kosovo to Indonesia’s Aceh Province, though I had never heard of his laudable efforts before now. Most Americans have only heard of the current Finnish president, a woman who Conan O’Brien supported because he thought she looked like him. Um…

The Economics prize will be announced Monday. Of course, the Nobel prizes were started by Alfred Nobel, the inventor of dynamite. He decided that his invention was too violent and decided to do something positive with his fortune in his will. In addition to the prestige, winners get oodles of cash. The prizes are awarded in Stockholm, except for Peace, which is awarded separately in Oslo, for whatever reason.

Movie Reviews for People Who Go to the Dollar Movies After Work: Babylon A.D.

Our movie reviews here at the WalrusFile are going to be a little bit different. It’s so expensive to go to a first-run movie these days that I know that there are a lot of people like me who decide to wait, either to rent the DVD or order it from Netflix or, like I usually do, go see the movies once they arrive at the discount theater down the street. But there’s a lot of choices, so we’ll try and weed out the duds.

Babylon A.D. is the most completely nonsensical movie I’ve seen in a long time. I don’t mean it’s weird, though it is, or that it’s brainless, though it’s usually that too. I mean it literally makes no sense. I could use words to describe the plot to you, but they would be meaningless. We are given a series of vaguely interesting pieces here, but there is little to no explanation of how they fit together. That said, there are redeeming qualities here. The movie is entertaining. We’re given a halfway interesting vision of a sort of coherent future (well, visually coherent, anyway). And Vin Diesel is always good for a laugh.

We are shown a brutal mercenary. A girl with the brain of a computer (which somehow means she’s psychic) who may be carrying a “viral bomb.” A nun who knows kung fu. An insane cage fighter (“He is a lost soul”). A crazy scarred boss guy (Gerard Depardieu!) in a tank limousine. Televisions that “you can’t turn off, but you can change the channel.” A vaguely creepy religion. Biker gangs with heat-seeking missiles. Drone aircraft set to blow up refugees. A virgin pregnancy (with multiracial twins!). Computer systems that read your memories by temporarily killing you. Moving robotic walls. “Double Clone” Siberian Tigers. Bombs going off with zero explanation (more than one!). Sexual tension out of absolutely nowhere. And, most especially, Vin Diesel doing a back flip over a missile with a snowmobile. I’m forgetting a lot here.

The basic story is that Vin Diesel (whose character, I think, is named “Toorop”) has to transport this girl named Aurora who has supposedly spent her entire life at a convent in Kyrgyzstan to New York, along with a nun played by Taiwanese actress Michelle Yeoh. This is a fairly standard Sci-Fi plot, actually. But the explanations of the hows and whys that we’re given are what make this all extra trippy. It’s set in a sort of “this goes on” future, chaotic and overpopulated, overrun with refugees, with video screens and advertisements on every available surface. Global warming is mentioned but we don’t really see the effects. The special effects are convincing, especially the gleaming ultra-city of New York. There’s a nice joke when they’re flying on an airliner and we pull back to see “Coke Zero” written on the side in huge letters. At least I think it’s a joke. It could be extremely ham-fisted product placement. And no, the title has no relation that I can see to anything in the movie… except, I suppose, that it does theoretically take place after the birth of Christ.

This movie’s pedigree is, somewhat randomly, mostly French. It has a French director, Mathieu Kassovitz, a French actress playing Aurora (meaning her dialogue often slips into incomprehensibility), and it’s based on a French Sci-Fi novel called Babylon Babies. In a few places it’s reminiscent of that far superior, far more joyous French Sci-Fi classic in English, The Fifth Element. A few places. But in place of garish color everywhere we have black and metal gray, and in place of plucky Bruce Willis we have Vin Diesel, who is not asked to show a single emotion for the entire film. And that’s why this is definitely a dollar movie.

Irish Pockets Are Deep

If you thought we had it bad here in the US with the money possibly being given to shore up our own financial system, check out what the government of Ireland just did. That nation has guaranteed 400 Billion euros worth of assets in six of the nation's largest banks. To put that in perspective, that is several times Ireland's GNP.

Now, to be fair, this is not quite the same thing as is being proposed in America. For one thing, it's not actual money at this point. Irish Prime Minister Brian Cowen said "I have not given any money to any bank." This essentially seems to me to be the Irish creating their own emergency version of the Federal Deposit Insurance Commission (FDIC), in case one or more of the banks ends up failing. Ireland, by the way, is already officially in a recession, though the fact that we're not here in the USA points to the problems one gets when one starts using semantics that were made up a century ago.

Still, considering how much money this involves, it strikes me that basically the Irish financial system will be still be very messed up if a major bank fails, just in a different way. Yes, the depositors at the bank will get to keep their savings, but the Irish public will then be left with a heckuva bill. And what if it's more than one?

This brings me to a point I have been wanting to make about the situation here in the States. One of the reasons I have trouble buying this idea that we're on the verge of "another Great Depression" is because of the FDIC, which was made in response to the last Great Depression. What happened in 1929 was that, when the banks failed, people who had their money in those banks lost everything they had. Now, if a bank fails, as happened this week with Washington Mutual, the depositors don't lose their money because it's backed up (up to $100,000 per account) by the FDIC.

So even if banks start failing left and right, it won't hit the average Oklahoman the way it did in the Great Depression because they won't suddenly have "zero dollars," as Mastecard might say. The way it will affect everyone comes in terms of a lack of credit available, which may in turn lead to job losses. However, this is a definite step down in terms of degree.

As for Ireland, good luck with all that. The move has actually caused some controversy already within the EU. The French Finance Minister has said other member states should have had advance notice. After all, if you're going to do something with huge amounts of a currency, it's going to affect everyone who uses said currency. The European Union Competition Commissioner (I wonder what the equivalent USA job title would be?) basically said the same thing. In the meantime, President Sarkozy of France invited EU members to Paris this weekend for talks on the continuing world financial crisis.