Science Forums: CaptainPanic - Viewing Profile - Science Forums

Credit rating agencies have been hot news since the economic crisis hit. Three agencies in particular seem very influential: Standard & Poor's, Moody's and Fitch, sometimes called the Big Three.

Some days, it seems that they practically rule the world.

Influencing the short-term political agenda
There are plenty of examples where a warning from one of the agencies triggered responses from the highest politicians in EU countries. (Links in Dutch (1, 2), and in English (3, 4)). Each article starts with a warning (not a real downgrade), followed by politicians who say something along the lines of "this shows that we need to take action", or "this shows how urgently we need to change our economy".

The articles all say the same: the credit rating agencies warn countries to change, or else. And because a downgrade costs billions (the interest rate will shoot up instantly), the credit agencies have countries by the balls... and this way they can set the agendas of governments.

Influencing the long-term political agenda
Even more worrying is that lately, the agencies have been influencing the democratic processes of countries in Europe (elections). In the Netherlands, our government collapsed rather unexpectedly. In the same week, S&P had warned us that our AAA-status could be downgraded (article in Dutch) if the government couldn't reach an agreement on budget cuts, or if the political differences would obstruct a healthy economic policy. In response to these warnings, our interest rate shot up. And although I cannot prove it, I have a feeling that this bullied some politicians into agreeing with new cuts... because our parliament reached an agreement very soon. And that's surprising given the fact that the government had just collapsed, and a new majority had to be found among parties, including the opposition.

They also responded to the French elections of last weekend, saying:

Quote

I'll summarize that for you:
They say that they take no position regarding individual candidates, but the results matter for the rating. In even simpler words, they say: "We don't care what you vote, but some votes may cost you your status, and therefore many billions of euros".

At least they have the decency not to be actively against socialist leaders (like France's new president)... but they already gave their warning. And the markets responded. It seems that the agencies accept higher taxes in combination with higher expenses... they still actively speak out against anti-cyclic spending.

The big worry
There are many different economic schools of thought. Differences between for example Europe and the US show that there is not a single perfect system. Europeans tend to be far more socialist, with a larger government, higher taxes, and larger government expenses... But we're equally rich as the US. It worries me that three American agencies can influence our economies so much, and apparently decided for us which economic school of thought is the correct one.

They seem to actively discourage anti-cyclic government spending. They simply say that they will lower the rating if the debt increases in the relatively short term... which is a clear message. The Dutch debt is only 66% of our GDP (compared for example to the USA's 103%). What do they care if our government decided to spend a bit more, to achieve some long-term goals, which is typically what anti-cyclic spending is meant to do?

Also, I seriously doubt that they have complete models for their predictions. Our governments might for example be encouraged to privatise some parts of the government. Do the analyses of the agencies take into account that this might not always be effective? Or are they only happy with the short-term inflow of cash into the national treasuries? And do they rate a euro spent on education the same as a euro spent on the military? After all, education can be called an investment, with (hopefully) a kind of payback time. The military, while necessary, is an expense. It's not gonna generate more money in the future.

In short: how do we know that the agencies are right?

The even bigger worry
The rating agencies are companies. They make a profit. How objective are they? What are their economic interests? Can they be corrupted? Can someone influence them to give a warning? Some prior knowledge of a press release by one of the agencies can be used to earn millions.

In short: can we trust them?

So...
I just wonder how it could happen that these three agencies can set the agendas of nations, influence elections, and make a nice profit at the same time?

I just made a small error, and I wanted to erase some of my writing on paper. I took the eraser I have, and removed the pencil writing. Then I realized that I have no idea how that works!

First of all, when I write, the friction between the (soft) graphite and the paper causes some graphite to stay behind in and around the fibres of the paper. That part I understand (although it's a bit crude). But how the hell can an eraser get that graphite off the paper again? Does it have such affinity for graphite? Is it just an interfacial phenomenon, or is there a reaction?

Wikipedia does not explain how it works. This website says that the graphite "sticks" to the rubber (not a very scientific explanation).

For something so common, I feel ridiculous that I don't know it.

First a quick question: How do gut bacteria end up in your gut? Sounds maybe like a silly question, but I always learned that your stomach (or rather the acid in it) is able to sterilize a lot of food, isn't it? So, how do these bacteria get in your gut? Wikipedia suggests it's (also?) orally.

Since up to 60% (wt) of the dry mass of feces (*) can be made up of these gut bacteria, which suggests that they grow rather quickly, and therefore must consume quite a bit of food, what do humans have to gain from it? Wikipedia suggests a whole list of useful functions... but somehow it still seems like the bacteria get the better deal here. It reads like a hijack: without the bacteria, we get sick, develop allergies and possibly even starve. They hold us hostage! So, yeah, they've got some enzymes we don't have. But how difficult can it be to evolve some additional enzymes? The only reason we don't have them, is that we've been hijacked by gut bacteria for so long (since literally forever?) that we never had to evolve them.

Somehow, as a chemical engineer, it seems awfully inefficient. You have bacteria to do some work, but then you put them into a plugflow reactor, and you discard the bacteria when they're at the end. It's crap (crappy pun definitely intended). That means you must continuously grow new ones at a high cost. I mean, there's a reason that many processes try to immobilize the microorganisms: that is so you can operate the process with a minimum growth of the microorganisms, and optimize the useful functions of the microorganisms.

Has anyone done any research on the energy balance? What percentage of the food we take in is used by the bacteria, and what percentage by "ourselves" (with ourselves defined as that part of our body that has the DNA we call human)? I never really thought of gut bacteria until quite recently... you never realize that I am an ecosystem. But everything I eat is automatically shared. And that ecosystem I carry in me grows a hell of a lot faster than myself.

So, the way I see it (and I am not an expert, I'm a chemical engineer, not a biologist!), we're hijacked by bacteria. We can't live without them. And to make matters worse, we work with a suboptimal reactor design that is not capable of immobilizing these bacteria, so we must continuously grow new ones.

Is it me, or are humans the losers here?

(*) feces is a word scientists developed so they could still swear, but nobody else would be offended by it. If you listen carefully in many labs around the world, you can often hear scientists whisper "feces!", when they make a mistake.

Intro
While most people posting on this forum describe themselves as atheists, determinists or some other form of non-believer, I would be surprised if many don't have some secret superstitions. Personally, I wrote my exams with a lucky pen. I know others think they can influence the outcome of a football game by either watching or not watching.

I want to talk about any possible scientific explanation why superstition might work - or why it can be proven to be bogus.
Obviously, since this is posted in The Lounge, if you just want to tell us your silly superstition, or a funny anecdote, that's welcome too.

The lucky pen
I believe that my lucky pen must have boosted my confidence and reduced my nervousness... but I am not sure I have enough data points to make a good correlation (with small enough error) to say it actually worked. But it might have actually improved my results at exams.

All superstition regarding sports
This one annoys me. Since the butterfly effect is sort-of accepted science, any action at any distance from the actual stadium can influence the game, although probably very marginally. So, yes, I really think you can influence the game. But by how much? And can you change it in favor of your team? I don't see how.
But if you reverse it: can I prove that it does not work? I don't see how.

Does anyone have any other silly superstitions, or do you want to explain why it's all bogus? This is the thread.

Just out of curiosity, how do you go about calculating how much electric power is consumed by an electromagnet made of superconducting material? Since the resistance is zero, it would suggest that the current can be (nearly?) infinite.

Wikipedia tells me that the only power consumed in a DC electromagnet is due to the ohmic resistance.
Another wikipedia site tells me that superconducting magnets can maintain a current with no voltage applied whatsoever, a property which is used in MRI machines.

But what if a magnet does work? What if a charged particle comes near, and the magnetic force acts on it? Shouldn't that alter the current in the superconducting magnet through induction? But getting the current back up to the old level would then again require no power?

And is there a practical upper limit to how much current you can push through a superconducting magnet? (Is there even a theoretical limit?)