The Telegraph
May 26, 2010
It’s Lehman the sequel, with Merkel as Bush
The big lesson of the financial crisis was that no bank must be allowed to fail. The same applies now to Greece. As the Queen’s Speech yesterday was overshadowed by yet another meltdown in global financial markets, I was reminded of Her Majesty’s faux-naif remark to the learned professors of the London School of Economics shortly after the failure of Lehman Brothers in the autumn of 2008: why did no one see this crisis coming?
The economists’ official answer, conveyed after another six months of deep cogitation in a three-page letter to Buckingham Palace, was that the economics profession did, of course, see it coming and had warned all along about global imbalances, excessive borrowing and so on. The problem was that politicians, bankers and overpaid financiers did not pay enough attention to the professional economists’ warnings.
The reason I have disinterred this episode is that the learned professors were wrong in their diagnosis of the disaster. The Queen’s question, taken in the context, was not about long-term issues such as mortgage debts and risk-management models. It was about the failure of politicians and economists to foresee the catastrophic consequences of allowing the failure of this one middle-sized bank.
The question of how the failure of Lehman turned a more-or-less normal boom-bust cycle into the greatest financial crisis of all has still not been satisfactorily answered by politicians, establishment economists and central bankers. And now, almost unbelievably, there is a serious risk that the world’s failure to understand the true lessons of Lehman will precipitate another financial disaster.
The key lesson from the failure of Lehman was that, in the midst of a systemic financial crisis, no significant bank should ever be allowed to fail. When an entire financial system is in peril, the cost of offering unlimited government guarantees and taxpayer bailouts will always be much smaller than the losses from allowing any significant bank to collapse. Such bailouts and guarantees may, in the long run, encourage excessive lending and other irresponsible behaviour, but that is an issue to be addressed by regulation after the crisis is over. In dealing with systemic financial crises, the risks of increasing moral hazard are irrelevant in comparison with the certainty of disaster triggered by the failure of any significant bank.
Today exactly the same analysis has to be applied to the risk of Greece or any other European government defaulting on its debts or dropping out of the eurozone. If any such default were to occur, it could trigger a global financial catastrophe even larger than Lehman. Yet the possibility of a Greek debt default or restructuring is being positively promoted by many of the world’s most respected economic and financial commentators. The German Finance Minister has repeatedly suggested temporary suspension from the eurozone as a punishment for the Greek Government’s transgressions. The German representative on the European Central Bank has stated publicly that he voted against the bank buying Greek government bonds. And the leader column of the Financial Times demanded yesterday that Greece must be made “safe to fail”, by preparing the ground for orderly restructuring. Such a restructuring, the FT went on to argue, would punish the German and French banks that were imprudent enough to lend Greece too much money and “whose governments inexcusably prefer to bail them out on the sly via Greece”.
These were exactly the sort of veiled threats, in some cases from the same authorities, heard before Lehman was allowed to collapse. It is hardly surprising that investors are starting to question the solidity of the guarantees against any kind of default that were supposedly provided two weeks ago by eurozone governments and the European Central Bank.
What is truly alarming about the present situation is that the world has so recently seen the catastrophic consequences of using debt defaults in the midst of a financial crisis to punish imprudent lenders. Yet some of the key policymakers and opinion formers seem, like the Bourbons, to have learnt nothing from the Lehman experience and to have forgotten none of their prejudices.
The fact is that if Greece were allowed to renege on its debts, the foreign banks that held €338 billion of Greek debt at the end of 2009 would immediately move to dump their additional €333 billion of Portuguese debt and probably their €1,500 billion of Spanish debt. And who knows how well over two trillion euros of Italian debt would be treated? The plunging value of Greek and Iberian bonds would immediately threaten several of the main French and German banks with insolvency, requiring government guarantees that would run into trillions of euros.
If Greece or any other member of the eurozone were temporarily suspended, as suggested by the German Finance Minister, the consequences would probably be even more catastrophic. The euro would immediately be revealed not as a genuine single currency but merely as a foreign exchange arrangement of the kind that has frequently collapsed under market pressures, for example in Argentina, Thailand and, not least, in the British experience of the ERM.
The citizens of Southern European countries would quickly understand this and would transfer their savings to banks in Germany and the Netherlands, leading to a collapse of the euro project within weeks and the probable failure of every Southern European bank.
Any such upheavals would dash hopes of global recovery from the 2008 crisis and would cause irreparable damage to public finances already on the brink of catastrophe. It is obvious that such calamities must be avoided, almost regardless of cost or whether it sets a bad example to improvident governments or bankers.
Astonishingly, however, the Greek tragedy in Europe is looking more and more like a revival of the Lehman drama. The €750 billion bailout package announced two weeks ago by EU governments is being hedged about with so many conditions and qualifications that it resembles the original $700 billion Bush bailout plan. The 16 bickering leaders of the eurozone seem to be emulating the confusion of the US political establishment and multiplying it by 16. And the starring role of the ideologically blinkered and incompetent President Bush, out of his depth and flailing helplessly in matters of high finance, is played by Angela Merkel.
Even as a long-time sceptic about the euro project, I find it almost impossible to believe that, just two years after Lehman, Europe would make the same blunders as the Bush Administration. But, as we have learnt again and again in this long period of turmoil, the impossible can become inevitable without even passing through improbable.
Thursday, June 10, 2010
Tuesday, June 8, 2010
In defence of WORDS
History for Dollars
By DAVID BROOKS
When the going gets tough, the tough take accounting. When the job market worsens, many students figure they can’t indulge in an English or a history major. They have to study something that will lead directly to a job.
So it is almost inevitable that over the next few years, as labor markets struggle, the humanities will continue their long slide. There already has been a nearly 50 percent drop in the portion of liberal arts majors over the past generation, and that trend is bound to accelerate. Once the stars of university life, humanities now play bit roles when prospective students take their college tours. The labs are more glamorous than the libraries.
But allow me to pause for a moment and throw another sandbag on the levy of those trying to resist this tide. Let me stand up for the history, English and art classes, even in the face of today’s economic realities.
Studying the humanities improves your ability to read and write. No matter what you do in life, you will have a huge advantage if you can read a paragraph and discern its meaning (a rarer talent than you might suppose). You will have enormous power if you are the person in the office who can write a clear and concise memo.
Studying the humanities will give you a familiarity with the language of emotion. In an information economy, many people have the ability to produce a technical innovation: a new MP3 player. Very few people have the ability to create a great brand: the iPod. Branding involves the location and arousal of affection, and you can’t do it unless you are conversant in the language of romance.
Studying the humanities will give you a wealth of analogies. People think by comparison — Iraq is either like Vietnam or Bosnia; your boss is like Narcissus or Solon. People who have a wealth of analogies in their minds can think more precisely than those with few analogies. If you go through college without reading Thucydides, Herodotus and Gibbon, you’ll have been cheated out of a great repertoire of comparisons.
Finally, and most importantly, studying the humanities helps you befriend The Big Shaggy.
Let me try to explain. Over the past century or so, people have built various systems to help them understand human behavior: economics, political science, game theory and evolutionary psychology. These systems are useful in many circumstances. But none completely explain behavior because deep down people have passions and drives that don’t lend themselves to systemic modeling. They have yearnings and fears that reside in an inner beast you could call The Big Shaggy.
You can see The Big Shaggy at work when a governor of South Carolina suddenly chucks it all for a love voyage south of the equator, or when a smart, philosophical congressman from Indiana risks everything for an in-office affair.
You can see The Big Shaggy at work when self-destructive overconfidence overtakes oil engineers in the gulf, when go-go enthusiasm intoxicates investment bankers or when bone-chilling distrust grips politics.
Those are the destructive sides of The Big Shaggy. But this tender beast is also responsible for the mysterious but fierce determination that drives Kobe Bryant, the graceful bemusement the Detroit Tigers pitcher Armando Galarraga showed when his perfect game slipped away, the selfless courage soldiers in Afghanistan show when they risk death for buddies or a family they may never see again.
The observant person goes through life asking: Where did that come from? Why did he or she act that way? The answers are hard to come by because the behavior emanates from somewhere deep inside The Big Shaggy.
Technical knowledge stops at the outer edge. If you spend your life riding the links of the Internet, you probably won’t get too far into The Big Shaggy either, because the fast, effortless prose of blogging (and journalism) lacks the heft to get you deep below.
But over the centuries, there have been rare and strange people who possessed the skill of taking the upheavals of thought that emanate from The Big Shaggy and representing them in the form of story, music, myth, painting, liturgy, architecture, sculpture, landscape and speech. These men and women developed languages that help us understand these yearnings and also educate and mold them. They left rich veins of emotional knowledge that are the subjects of the humanities.
It’s probably dangerous to enter exclusively into this realm and risk being caught in a cloister, removed from the market and its accountability. But doesn’t it make sense to spend some time in the company of these languages — learning to feel different emotions, rehearsing different passions, experiencing different sacred rituals and learning to see in different ways?
Few of us are hewers of wood. We navigate social environments. If you’re dumb about The Big Shaggy, you’ll probably get eaten by it.
By DAVID BROOKS
When the going gets tough, the tough take accounting. When the job market worsens, many students figure they can’t indulge in an English or a history major. They have to study something that will lead directly to a job.
So it is almost inevitable that over the next few years, as labor markets struggle, the humanities will continue their long slide. There already has been a nearly 50 percent drop in the portion of liberal arts majors over the past generation, and that trend is bound to accelerate. Once the stars of university life, humanities now play bit roles when prospective students take their college tours. The labs are more glamorous than the libraries.
But allow me to pause for a moment and throw another sandbag on the levy of those trying to resist this tide. Let me stand up for the history, English and art classes, even in the face of today’s economic realities.
Studying the humanities improves your ability to read and write. No matter what you do in life, you will have a huge advantage if you can read a paragraph and discern its meaning (a rarer talent than you might suppose). You will have enormous power if you are the person in the office who can write a clear and concise memo.
Studying the humanities will give you a familiarity with the language of emotion. In an information economy, many people have the ability to produce a technical innovation: a new MP3 player. Very few people have the ability to create a great brand: the iPod. Branding involves the location and arousal of affection, and you can’t do it unless you are conversant in the language of romance.
Studying the humanities will give you a wealth of analogies. People think by comparison — Iraq is either like Vietnam or Bosnia; your boss is like Narcissus or Solon. People who have a wealth of analogies in their minds can think more precisely than those with few analogies. If you go through college without reading Thucydides, Herodotus and Gibbon, you’ll have been cheated out of a great repertoire of comparisons.
Finally, and most importantly, studying the humanities helps you befriend The Big Shaggy.
Let me try to explain. Over the past century or so, people have built various systems to help them understand human behavior: economics, political science, game theory and evolutionary psychology. These systems are useful in many circumstances. But none completely explain behavior because deep down people have passions and drives that don’t lend themselves to systemic modeling. They have yearnings and fears that reside in an inner beast you could call The Big Shaggy.
You can see The Big Shaggy at work when a governor of South Carolina suddenly chucks it all for a love voyage south of the equator, or when a smart, philosophical congressman from Indiana risks everything for an in-office affair.
You can see The Big Shaggy at work when self-destructive overconfidence overtakes oil engineers in the gulf, when go-go enthusiasm intoxicates investment bankers or when bone-chilling distrust grips politics.
Those are the destructive sides of The Big Shaggy. But this tender beast is also responsible for the mysterious but fierce determination that drives Kobe Bryant, the graceful bemusement the Detroit Tigers pitcher Armando Galarraga showed when his perfect game slipped away, the selfless courage soldiers in Afghanistan show when they risk death for buddies or a family they may never see again.
The observant person goes through life asking: Where did that come from? Why did he or she act that way? The answers are hard to come by because the behavior emanates from somewhere deep inside The Big Shaggy.
Technical knowledge stops at the outer edge. If you spend your life riding the links of the Internet, you probably won’t get too far into The Big Shaggy either, because the fast, effortless prose of blogging (and journalism) lacks the heft to get you deep below.
But over the centuries, there have been rare and strange people who possessed the skill of taking the upheavals of thought that emanate from The Big Shaggy and representing them in the form of story, music, myth, painting, liturgy, architecture, sculpture, landscape and speech. These men and women developed languages that help us understand these yearnings and also educate and mold them. They left rich veins of emotional knowledge that are the subjects of the humanities.
It’s probably dangerous to enter exclusively into this realm and risk being caught in a cloister, removed from the market and its accountability. But doesn’t it make sense to spend some time in the company of these languages — learning to feel different emotions, rehearsing different passions, experiencing different sacred rituals and learning to see in different ways?
Few of us are hewers of wood. We navigate social environments. If you’re dumb about The Big Shaggy, you’ll probably get eaten by it.
Saturday, June 5, 2010
Family gets back tom
There is no need to provide updates, no need to evaluate life on the basis of some shallow criteria. Just some moments spent in quite contemplation, a mind focused on larger goals in life (which I hope is free of sickness and pain) are for me happiness and joy. There will be episodes of misery, of suffering losses, seeing our loved ones unhappy but at such times I will do all I can to reach out, to help out those who I can help and that's about it. After that when I can once again retreat to my inner courtyard where a comfy chair awaits with me ,so does a good book, I will curl up to experience the joy that only a tranquil solitude can offer.
So the family gets back tomorrow and very productive period of introspection has come to an end. But no problem. I look forward to the shrieks and laughter of my children, the loving and thoughtful caresses of my wife and in the background the dim but uninterrupted humming of the rhythm of my life.
So the family gets back tomorrow and very productive period of introspection has come to an end. But no problem. I look forward to the shrieks and laughter of my children, the loving and thoughtful caresses of my wife and in the background the dim but uninterrupted humming of the rhythm of my life.
Friday, June 4, 2010
Computers taking over everything
JUNE 4, 2010.Fast Traders' New Edge
Investment Firms Grab Stock Data First, and Use It Seconds Before Others.
By SCOTT PATTERSON
Some fast-moving computer-driven investment firms are getting an edge by trading on market data before it gets to other investors, according to market players and researchers who have studied the trading.
The firms gain that advantage by buying data from stock exchanges and feeding it into supercomputers that calculate stock prices a fraction of a second before most other investors see the numbers. That lets these traders shave pennies per share from trades, which when multiplied by thousands of trades can earn the firms big profits.
Critics call the practice the modern day equivalent of looking at share prices listed in tomorrow's newspaper stock tables today.
"It is a rigged game," Sal Arnuk, co-founder of brokerage firm Themis Trading, said Wednesday at a Securities and Exchange Commission roundtable discussion in Washington, D.C., referring to the trading activity, which some call "latency arbitrage."
While legal, the practice pushes the envelope of what is fair, critics say, and raises questions about the advantages some fast-moving traders are gaining in the market.
The SEC roundtable convened executives from trading centers and firms across Wall Street as the agency continues to probe high-frequency trading and the growth of dark pools, trading venues where trades take place away from the main exchanges.
High-frequency trading has come under greater scrutiny since the May 6 "flash crash," when some high-frequency firms along with a number of other active traders withdrew from the market, arguably exacerbating the stocks' swift downdraft that day.
High-speed trading, now estimated to account for about two-thirds of U.S. stock market volume, takes many forms, some entirely proper. Defenders say it reduces trading costs for all investors by adding volume to the market. Latency arbitrage is a type of trading that relies on ultrahigh speeds; it's not clear which firms engage in it or how pervasive it is.
Some firms pay tens of thousands of dollars a year to individual exchanges for premium access to their price feeds, industry players and exchanges say.
The SEC, in a broad review of market structure earlier this year, said information from trading-center data feeds "can reach end-users faster than the consolidated data feeds."
The latency arbitrage trade aims to game the so-called national best bid and offer price on a stock, which sets the price most investors use to trade.
The ability to estimate price moves ahead of the national best bid and offer price, which is consolidated electronically from exchanges, can give traders an advantage of about 100 to 200 milliseconds over investors who use standard market tools, according to a November 2009 report on such trading activities by Jefferies & Co.
An advanced look at exchange data and order flow can provide firms "the ability to forecast future prices" and "make adjustments to their orders in the market or send new orders which are based on this information," the report found.
Some investors are searching for ways to protect themselves. Rich Gates, co-founder of TFS Capital LLC, started becoming concerned about latency arbitrage in early 2009 after a Wall Street bank pitched the trade to his firm.
In hundreds of tests, TFS has found that some of its trades were getting picked off by firms exploiting the time-delay wrinkle. That was costing the firm money.
To learn more, TFS, which manages about $1.1 billion in mutual funds and hedge funds, devised a method to essentially bait firms into engaging in the trade. In effect, TFS proved that some traders were wise to a movement in a stock's price before it happened.
On a March afternoon, a TFS trader sent an order to a broker to buy shares of Nordson Corp., a maker of fluid dispensing equipment. The trader sent an instant message to the broker: "please route to broker pool #2," a request to send the order to a specific dark pool.
The trader told the broker not to pay a price higher than the midpoint between what buyers and sellers were offering, which at the time was $70.49.
Several seconds after the dark pool order was placed, the market price didn't change. Then the TFS trader set a trap: he sent a separate order into the broader market to sell Nordson for a price that pushed the midpoint price down to $70.47.
Almost immediately, TFS was sold Nordson for $70.49—the old, higher midpoint—in broker pool No. 2, which didn't reflect the new sell order. TFS got stuck paying two cents more than it should have, suggesting that some seller knew the higher price was a good deal to nab quickly.
Such trades are "unusually suspicious," said Mr. Gates.
Most dark pool operators say they police investors for improper activities. Liquidnet, which runs a dark pool, had suspended 125 members through 2009 for suspicious trading since its launch in April 2001, the firm says.
Investment Firms Grab Stock Data First, and Use It Seconds Before Others.
By SCOTT PATTERSON
Some fast-moving computer-driven investment firms are getting an edge by trading on market data before it gets to other investors, according to market players and researchers who have studied the trading.
The firms gain that advantage by buying data from stock exchanges and feeding it into supercomputers that calculate stock prices a fraction of a second before most other investors see the numbers. That lets these traders shave pennies per share from trades, which when multiplied by thousands of trades can earn the firms big profits.
Critics call the practice the modern day equivalent of looking at share prices listed in tomorrow's newspaper stock tables today.
"It is a rigged game," Sal Arnuk, co-founder of brokerage firm Themis Trading, said Wednesday at a Securities and Exchange Commission roundtable discussion in Washington, D.C., referring to the trading activity, which some call "latency arbitrage."
While legal, the practice pushes the envelope of what is fair, critics say, and raises questions about the advantages some fast-moving traders are gaining in the market.
The SEC roundtable convened executives from trading centers and firms across Wall Street as the agency continues to probe high-frequency trading and the growth of dark pools, trading venues where trades take place away from the main exchanges.
High-frequency trading has come under greater scrutiny since the May 6 "flash crash," when some high-frequency firms along with a number of other active traders withdrew from the market, arguably exacerbating the stocks' swift downdraft that day.
High-speed trading, now estimated to account for about two-thirds of U.S. stock market volume, takes many forms, some entirely proper. Defenders say it reduces trading costs for all investors by adding volume to the market. Latency arbitrage is a type of trading that relies on ultrahigh speeds; it's not clear which firms engage in it or how pervasive it is.
Some firms pay tens of thousands of dollars a year to individual exchanges for premium access to their price feeds, industry players and exchanges say.
The SEC, in a broad review of market structure earlier this year, said information from trading-center data feeds "can reach end-users faster than the consolidated data feeds."
The latency arbitrage trade aims to game the so-called national best bid and offer price on a stock, which sets the price most investors use to trade.
The ability to estimate price moves ahead of the national best bid and offer price, which is consolidated electronically from exchanges, can give traders an advantage of about 100 to 200 milliseconds over investors who use standard market tools, according to a November 2009 report on such trading activities by Jefferies & Co.
An advanced look at exchange data and order flow can provide firms "the ability to forecast future prices" and "make adjustments to their orders in the market or send new orders which are based on this information," the report found.
Some investors are searching for ways to protect themselves. Rich Gates, co-founder of TFS Capital LLC, started becoming concerned about latency arbitrage in early 2009 after a Wall Street bank pitched the trade to his firm.
In hundreds of tests, TFS has found that some of its trades were getting picked off by firms exploiting the time-delay wrinkle. That was costing the firm money.
To learn more, TFS, which manages about $1.1 billion in mutual funds and hedge funds, devised a method to essentially bait firms into engaging in the trade. In effect, TFS proved that some traders were wise to a movement in a stock's price before it happened.
On a March afternoon, a TFS trader sent an order to a broker to buy shares of Nordson Corp., a maker of fluid dispensing equipment. The trader sent an instant message to the broker: "please route to broker pool #2," a request to send the order to a specific dark pool.
The trader told the broker not to pay a price higher than the midpoint between what buyers and sellers were offering, which at the time was $70.49.
Several seconds after the dark pool order was placed, the market price didn't change. Then the TFS trader set a trap: he sent a separate order into the broader market to sell Nordson for a price that pushed the midpoint price down to $70.47.
Almost immediately, TFS was sold Nordson for $70.49—the old, higher midpoint—in broker pool No. 2, which didn't reflect the new sell order. TFS got stuck paying two cents more than it should have, suggesting that some seller knew the higher price was a good deal to nab quickly.
Such trades are "unusually suspicious," said Mr. Gates.
Most dark pool operators say they police investors for improper activities. Liquidnet, which runs a dark pool, had suspended 125 members through 2009 for suspicious trading since its launch in April 2001, the firm says.
Music, Brain and Language
May 31, 2010
Exploring Music’s Hold on the MindBy CLAUDIA DREIFUS
Three years ago, when Oxford University Press published “Music, Language, and the Brain,” Oliver Sacks described it as “a major synthesis that will be indispensable to neuroscientists.” The author of that volume, Aniruddh D. Patel, a 44-year-old senior fellow at the Neurosciences Institute in San Diego, was in New York City in May. We spoke over coffee for more than an hour and later by telephone. An edited and condensed version of the conversations follows.
Q. YOU DESCRIBE YOURSELF AS A NEUROSCIENTIST OF MUSIC. THIS HAS TO BE A NEW PROFESSION. HOW DID YOU COME TO IT?
A. I’ve been passionate about two things since childhood — science and music. At graduate school, Harvard, I hoped to combine the two.
But studying with E.O. Wilson, I quite naturally got caught up with ants. In 1990, I found myself in Australia doing fieldwork on ants for a Ph.D. thesis. And there, I had this epiphany: the only thing I really wanted to do was study the biology of how humans make and process music.
I wondered if the drive to make it was innate, a product of our evolution, as Darwin had speculated. Did we have a special neurobiological capacity for music, as we do for language and grammar? So from Australia, I wrote Wilson that there was no way I could continue with ants. Amazingly, he wrote: “You must follow your passion. Come back to Harvard, and we’ll give it a shot.”
Wilson and Evan Balaban, a birdsong biologist who taught me about the neurobiology of auditory communication, mentored me through my thesis, which was called “A Biological Study of the Relationship Between Language and Music.” When I defended it in 1996, this was unusual scholarship. The neurobiology of music wasn’t yet a recognized field.
Q. WHEN DID IT GO MAINSTREAM?
A. Not too long after that. By the late 1990s, all of neuroscience was being transformed by the widespread use of imaging technologies.
Because it became possible to learn how the brain was affected when people engaged in certain activities, it became acceptable to study things previously considered fringy. Today you have the neuroscience of economics, of music, of everything.
I published a paper in 1998 that really surprised people. It was the first imaging study showing what happens when the brain processes musical grammar as compared with what happens when it processes language. From what we learned, this was occurring in an overlapping way within the brain. And this was a clue that the neurobiology of music could give us a new path to access and perhaps even heal some language disabilities.
Q. HOW WOULD THAT WORK?
A. One example. There’s a neurologist in Boston, Gottfried Schlaug, who uses music therapy to return some language to stroke victims. He has them learn simple phrases by singing them. This has proved more effective than having them repeat spoken phrases, the traditional therapy. Schlaug’s work suggests that when the language part of the brain has been damaged, you can sometimes recruit the part that processes music to take over.
Music neuroscience is also helping us understand Alzheimer’s. There are Alzheimer’s patients who cannot remember their spouse. But they can remember every word of a song they learned as a kid. By studying this, we’re learning about how memory works.
Q. RECENTLY, YOU’VE BEEN WORKING WITH A SULFUR-CRESTED COCKATOO NAMED SNOWBALL. WHAT PROMPTED THE COLLABORATION?
A. Before I encountered Snowball, I wondered whether human music had been shaped for our brains by evolution — meaning, it helped us survive at some point. Well, in 2008, a colleague asked me to view a YouTube video of a cockatoo who appeared to be dancing to the beat of “Everybody” by the Backstreet Boys!
My jaw hit the floor. If you saw a video of a dog reading a newspaper out loud, you’d be pretty impressed, right? To people in the music community, a cockatoo dancing to a beat was like that. This was supposed to be, some said, a uniquely human behavior! If this was real, it meant that the bird might have circuits in its brain for processing beat similar to ours.
Q. WHAT DID YOU DO WITH THIS INSIGHT?
A. I phoned up the bird shelter in Indiana where Snowball lived and talked to the director who told me his story. A man had dropped him off with a CD and the comment, “Snowball likes to dance to this.” One day, Irena Schulz, the proprietor, played “Everybody” to amuse the abandoned creature. And Snowball began to move. Irena then made the YouTube video, which immediately went viral. Millions saw it.
“Let’s design an experiment to see if this is real,” I proposed to Irena, who had a science background herself. We took the Backstreet Boys song, sped it up and slowed it down at 11 different tempos, then videoed what Snowball did to each. For 9 out of the 11 variations, the bird moved to the beat, which meant that he’d processed the music in his brain and his muscles had responded. So now we had the first documented case of a nonhuman animal who, without training, could sense a beat out of music and move to it.
Q. YOU SAY THAT SNOWBALL CHANGED YOUR THINKING. HOW?
A. Before Snowball, I wondered if moving to a musical beat was uniquely human. Snowball doesn’t need to dance to survive, and yet, he did. Perhaps, this was true of humans, too?
Since working with Snowball, I’ve come to think we could learn more music neuroscience by studying the behaviors of not just parrots, but perhaps dolphins, seals, songbirds — also vocal learners.
We eventually published the Snowball research in Current Biology. A group at Harvard published a paper right alongside ours in which they surveyed thousands of YouTube videos to see if there were other animals spontaneously moving to a beat. They found about 12 or 13 parrots. No dogs. No cats. No horses.
What do humans have in common with parrots? Both species are vocal learners, with the ability to imitate sounds. We share that rare skill with parrots. In that one respect, our brains are more like those of parrots than chimpanzees. Since vocal learning creates links between the hearing and movement centers of the brain, I hypothesized that this is what you need to be able to move to beat of music.
Q. IS IT DIFFICULT TO FIND MONEY FOR THIS TYPE OF RESEARCH?
A. It easier than it used to be. One of the founders of this field, Dr. Robert Zatorre, before 2000, he never used the word music in a grant application. He knew it would get turned down automatically because people thought this was not scientific. Instead, he used terms like “complex nonlinguistic auditory processing.”
But in recent years, it’s become O.K. to say: I study music and the brain.
Exploring Music’s Hold on the MindBy CLAUDIA DREIFUS
Three years ago, when Oxford University Press published “Music, Language, and the Brain,” Oliver Sacks described it as “a major synthesis that will be indispensable to neuroscientists.” The author of that volume, Aniruddh D. Patel, a 44-year-old senior fellow at the Neurosciences Institute in San Diego, was in New York City in May. We spoke over coffee for more than an hour and later by telephone. An edited and condensed version of the conversations follows.
Q. YOU DESCRIBE YOURSELF AS A NEUROSCIENTIST OF MUSIC. THIS HAS TO BE A NEW PROFESSION. HOW DID YOU COME TO IT?
A. I’ve been passionate about two things since childhood — science and music. At graduate school, Harvard, I hoped to combine the two.
But studying with E.O. Wilson, I quite naturally got caught up with ants. In 1990, I found myself in Australia doing fieldwork on ants for a Ph.D. thesis. And there, I had this epiphany: the only thing I really wanted to do was study the biology of how humans make and process music.
I wondered if the drive to make it was innate, a product of our evolution, as Darwin had speculated. Did we have a special neurobiological capacity for music, as we do for language and grammar? So from Australia, I wrote Wilson that there was no way I could continue with ants. Amazingly, he wrote: “You must follow your passion. Come back to Harvard, and we’ll give it a shot.”
Wilson and Evan Balaban, a birdsong biologist who taught me about the neurobiology of auditory communication, mentored me through my thesis, which was called “A Biological Study of the Relationship Between Language and Music.” When I defended it in 1996, this was unusual scholarship. The neurobiology of music wasn’t yet a recognized field.
Q. WHEN DID IT GO MAINSTREAM?
A. Not too long after that. By the late 1990s, all of neuroscience was being transformed by the widespread use of imaging technologies.
Because it became possible to learn how the brain was affected when people engaged in certain activities, it became acceptable to study things previously considered fringy. Today you have the neuroscience of economics, of music, of everything.
I published a paper in 1998 that really surprised people. It was the first imaging study showing what happens when the brain processes musical grammar as compared with what happens when it processes language. From what we learned, this was occurring in an overlapping way within the brain. And this was a clue that the neurobiology of music could give us a new path to access and perhaps even heal some language disabilities.
Q. HOW WOULD THAT WORK?
A. One example. There’s a neurologist in Boston, Gottfried Schlaug, who uses music therapy to return some language to stroke victims. He has them learn simple phrases by singing them. This has proved more effective than having them repeat spoken phrases, the traditional therapy. Schlaug’s work suggests that when the language part of the brain has been damaged, you can sometimes recruit the part that processes music to take over.
Music neuroscience is also helping us understand Alzheimer’s. There are Alzheimer’s patients who cannot remember their spouse. But they can remember every word of a song they learned as a kid. By studying this, we’re learning about how memory works.
Q. RECENTLY, YOU’VE BEEN WORKING WITH A SULFUR-CRESTED COCKATOO NAMED SNOWBALL. WHAT PROMPTED THE COLLABORATION?
A. Before I encountered Snowball, I wondered whether human music had been shaped for our brains by evolution — meaning, it helped us survive at some point. Well, in 2008, a colleague asked me to view a YouTube video of a cockatoo who appeared to be dancing to the beat of “Everybody” by the Backstreet Boys!
My jaw hit the floor. If you saw a video of a dog reading a newspaper out loud, you’d be pretty impressed, right? To people in the music community, a cockatoo dancing to a beat was like that. This was supposed to be, some said, a uniquely human behavior! If this was real, it meant that the bird might have circuits in its brain for processing beat similar to ours.
Q. WHAT DID YOU DO WITH THIS INSIGHT?
A. I phoned up the bird shelter in Indiana where Snowball lived and talked to the director who told me his story. A man had dropped him off with a CD and the comment, “Snowball likes to dance to this.” One day, Irena Schulz, the proprietor, played “Everybody” to amuse the abandoned creature. And Snowball began to move. Irena then made the YouTube video, which immediately went viral. Millions saw it.
“Let’s design an experiment to see if this is real,” I proposed to Irena, who had a science background herself. We took the Backstreet Boys song, sped it up and slowed it down at 11 different tempos, then videoed what Snowball did to each. For 9 out of the 11 variations, the bird moved to the beat, which meant that he’d processed the music in his brain and his muscles had responded. So now we had the first documented case of a nonhuman animal who, without training, could sense a beat out of music and move to it.
Q. YOU SAY THAT SNOWBALL CHANGED YOUR THINKING. HOW?
A. Before Snowball, I wondered if moving to a musical beat was uniquely human. Snowball doesn’t need to dance to survive, and yet, he did. Perhaps, this was true of humans, too?
Since working with Snowball, I’ve come to think we could learn more music neuroscience by studying the behaviors of not just parrots, but perhaps dolphins, seals, songbirds — also vocal learners.
We eventually published the Snowball research in Current Biology. A group at Harvard published a paper right alongside ours in which they surveyed thousands of YouTube videos to see if there were other animals spontaneously moving to a beat. They found about 12 or 13 parrots. No dogs. No cats. No horses.
What do humans have in common with parrots? Both species are vocal learners, with the ability to imitate sounds. We share that rare skill with parrots. In that one respect, our brains are more like those of parrots than chimpanzees. Since vocal learning creates links between the hearing and movement centers of the brain, I hypothesized that this is what you need to be able to move to beat of music.
Q. IS IT DIFFICULT TO FIND MONEY FOR THIS TYPE OF RESEARCH?
A. It easier than it used to be. One of the founders of this field, Dr. Robert Zatorre, before 2000, he never used the word music in a grant application. He knew it would get turned down automatically because people thought this was not scientific. Instead, he used terms like “complex nonlinguistic auditory processing.”
But in recent years, it’s become O.K. to say: I study music and the brain.
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