The Stalwart

Glitches at the Amex, Who Knew?

NakedShorts Reports:

The World’s Most Unnecessary Securities Exchange™ certainly earned its title Friday, when, a technical glitch—the third in less than two weeks—delayed opening equities and ETF trading by 45 minutes. While still listing more ETFs than any other US exchange, the Amex captures barely 5 percent of daily ETF volume, and a significantly lower share of the most heavily traded instruments.

Michael Pollan on the Farm Bill

From today's NYT Sunday Magazine:

This perverse state of affairs is not, as you might think, the inevitable result of the free market. Compared with a bunch of carrots, a package of Twinkies, to take one iconic processed foodlike substance as an example, is a highly complicated, high-tech piece of manufacture, involving no fewer than 39 ingredients, many themselves elaborately manufactured, as well as the packaging and a hefty marketing budget. So how can the supermarket possibly sell a pair of these synthetic cream-filled pseudocakes for less than a bunch of roots?

For the answer, you need look no farther than the farm bill. This resolutely unglamorous and head-hurtingly complicated piece of legislation, which comes around roughly every five years and is about to do so again, sets the rules for the American food system — indeed, to a considerable extent, for the world’s food system.

Michael Pollan (author of the widely praised The Omnivore's Dilemma) starts out promisingly enough in making the connection between the Farm Bill and the bulging waste line of so many Americans.   It's a surprisingly solid, free market argument in the Times.   So you'd think that his conclusion would be to, you know, scrap the damn bill:

The devil is in the details, no doubt. Simply eliminating support for farmers won’t solve these problems; overproduction has afflicted agriculture since long before modern subsidies. It will take some imaginative policy making to figure out how to encourage farmers to focus on taking care of the land rather than all-out production, on growing real food for eaters rather than industrial raw materials for food processors and on rebuilding local food economies, which the current farm bill hobbles. But the guiding principle behind an eater’s farm bill could not be more straightforward: it’s one that changes the rules of the game so as to promote the quality of our food (and farming) over and above its quantity.

Such changes are radical only by the standards of past farm bills, which have faithfully reflected the priorities of the agribusiness interests that wrote them. One of these years, the eaters of America are going to demand a place at the table, and we will have the political debate over food policy we need and deserve. This could prove to be that year: the year when the farm bill became a food bill, and the eaters at last had their say.

Ah nevermind.  The solution to bad legislation is just more legislation.  He didn't actually say it, but I think I faintly heard the phrase "eater's bill of rights" somewhere in there.

Explaining The Poor/Fat "Paradox"

Chris Dillow points to an economic study that attempts to explain the phenomenon of the "poor fat":

This new paper (pdf) explains this paradox. Economic insecurity, it says, causes weight gain for men. In the US in 2000, each one percentage point higher probability of becoming unemployed is associated with a one pound gain in weight; figures refer to the year 2000.

This suggests a basic evolutionary (subconscious) mechanism is still at work - animals store up fat as a larder against future bad times.

That's a tantalizing theory, but let me object.  First of all, I don't think the "poor fat" is actually the paradox it's made out to be.   In most developed countries, there's a large gap between those who are poor and those who actually go hungry.   If we found a high incidence of obesity among homeless panhandlers that rarely got access to food, a serious analysis might be in order.

The bigger flaw, though, is in the evolutionary mechanism that's being ascribed.   While it might sound logical that humans (or other animals) would store up a bunch of fat during the lean times, the idea doesn't make much sense.   Body fat isn't a substitute for food.  An obese individual isn't going to fare for much longer than a lean person if both were on a deserted island bereft of food.   Considering this, what reason would we have to "pack on the pounds" in anticipation of a long spell without food?

The answer to the "paradox" can almost certainly be explained by the less sexy fact that poor people have worse diets, which is almost certainly true.

Meanwhile, for some interesting analysis of fat and why people get fat, you should definitely check out Art De Vany's work.  Here's a paper (.pdf) on why we get fat, and here's an interesting theory on fat cells as a disposal site for toxic elements (like sugar):

Now let’s consider fat. For years we believed fat was nothing more than nature’s way of storing extra calories for some future famine. That would be a handy little adaptation in and of itself if that’s all it was. But when you do the math, you see that it doesn’t require a lot of fat to survive or even migrate for long periods. A 165-pound person with only 13% body fat has 21.45 pounds of fat. Being generous and assuming that you need a minimum 3% just to carry on basic survival functions, that leaves 10% or 16.5 pounds of fat to live off. At 3500 calories per pound of fat and 100 calories per mile walking, you’d theoretically have enough fat to survive weeks and migrate several hundred miles. So maybe fat has another purpose, and this is where Art’s description of fat as a toxic waste site (my words) comes in. Modern man has so thoroughly altered his foods to focus on simple carbohydrates (sugars) that we now consume hundreds of excess grams of it every day.

As Art has explained, the body recognizes excess sugar (glucose) as a toxic load – and remember, it doesn’t take a whole lot of it to be excessive – and the body starts the adaptive process of secreting insulin to take sugar out of the bloodstream and deposit it into the muscles. Two problems arise immediately: first, there’s not a lot of room in those muscles. Ask any athlete who’s ever tried to carbo load for an event. Secondly, most people aren’t athletes and have lost significant utility of their muscle through atrophy, further diminishing storage. Furthermore, they don’t burn off the already-stored glycogen because they don’t exercise. But here’s where the body has become so elegantly adaptive once again. It creates little storage facilities in the form of additional fat cells. Not because it’s trying to store calories for some future famine, as modern medicine might have you believe, but because it’s trying to find novel and effective ways to rid the body of this very toxic glucose excess. And it’s a pretty good solution. Insulin allows glucose access to these fat cells which grow larger and more numerous over time. Problem is, it’s always one step behind, so the fat cells fill up just as the muscle filled up, leaving excess glucose in the bloodstream after the next high carb or high calorie meal until more fat cells can be made. And so the spiral continues as 40 million Americans are headed towards type 2 diabetes.