Monday, March 25, 2013

BusFin II

I've decided to look at the situation in Cyprus and of course the rest of the banking world and how it may be pushing the use of alternative currencies. I'm guessing you don't have much idea of what money is or where it comes from so please take a few minutes to watch this before Thursday:

http://www.youtube.com/watch?v=W3hLKpKv3ME

If you prefer cartoons, this one is ok, too:

http://www.youtube.com/watch?v=W3hLKpKv3ME

Anyway, here's an article to get you started on the situation in Cyprus:

http://www.economist.com/news/leaders/21573972-bailing-out-cyprus-was-always-going-be-tricky-it-didnt-have-be-just-when-you



The euro-zone crisis

Just when you thought it was safe…

Bailing out Cyprus was always going to be tricky. But it didn’t have to be like this


 
EVEN by the standards of European policymaking, the past week has been a disaster. In the early hours of March 16th, nine months after Cyprus first requested a bail-out, euro-zone finance ministers, led by the Germans, offered a €10 billion ($13 billion) deal, well short of the €17 billion needed. Who ordered whom to do precisely what is not clear, but the Cypriots then said they would raise a further €5.8 billion by imposing a levy on depositors—of 9.9% on savings above the €100,000 insurance-guarantee limit, and 6.75% for deposits below it. Chaos ensued, not least among the many Russians (reputable or not) who have parked their money in the lightly regulated island. On March 19th, with crowds in the streets and all the banks firmly shut, the Cypriot parliament rejected the bail-out package (see article). As The Economist went to press, the scene had shifted to Moscow, where the Cypriots were trying to persuade Vladimir Putin and his cronies to contribute some money in exchange, perhaps, for future gas revenues.

Cyprus is a Mediterranean midget, with a GDP of only $23 billion. But this crisis could have poisonous long-term consequences. Eight months after the European Central Bank appeared to have restored stability by promising to do whatever it took to save the currency, the risk of a euro member being thrown out has returned. It has increased the chances of deposit runs (if Cyprus can grab your money, why not Italy or Spain?). And it has revealed the lack of progress towards a durable solution to the euro’s troubles. Ideally, all this will prompt the Europeans to push ahead with reforms, but with a German election in the autumn that seems unlikely.

Towards Cyprussia?

Cyprus is broke. Its debt, if it took on its banks’ liabilities, would hit 145% of GDP. This newspaper suggested recapitalising Cypriot banks, on a case-by-case basis, directly through the European Stability Mechanism (ESM), thus breaking the vicious circle where weak sovereigns bail out weak banks. We also argued for depositors and senior bondholders to be spared—not out of any particular love for rich Russians, but because of the fear of bank runs in larger weak euro economies. The Europeans instead decided to lend the money directly to the Cypriot government; and the Cypriots, perhaps bullied by some creditors, then decided to clobber all the banks’ depositors, even the insured ones.

This was ingeniously loopy. Cyprus is odd, because virtually all its banks’ liabilities are deposits (as opposed to longer-term bonds). Yet, of the 147 banking crises since 1970 tracked by the IMF, none inflicted losses on all depositors, irrespective of the amounts they held and the banks they were with. Now depositors in weak banks in weak countries have every reason to worry about sudden raids on their savings. Depositors in places like Italy have not panicked yet. But they will if the euro zone tries to “rescue” them too.

The blame for this should be shared between Cyprus and its creditors. Cyprus is guilty of a lot. It welcomed in the Russians and allowed its banks to get far too big: their assets reached 800% of GDP in 2011. The banks were in trouble even before the restructuring of Greek government bonds opened up a €4 billion hole in their accounts last year. As for the creditors, Angela Merkel’s priority seems to have been to appear stern before the German election, and the European Central Bank, whose job it is to protect financial stability, was party to a scheme that ended up jeopardising it.

What should Europe’s leaders do now? The worst outcome would be to allow the Cypriots to slide towards the exit. That would be disastrous for the island. And the euro zone would be wrong to imagine that Cyprus is tiny enough to let go safely. The currency’s credibility rests on the idea that it is irreversible.
Leaving it to the Russians to save Cyprus, by letting them recapitalise its banks and grab a slice of its gas, is an answer, but not the best one. However tricky the politics of using German taxpayers’ money to bail out Russian depositors, a deal that ends up entrenching Cyprus’s status as an offshore Russian satrapy would be a perverse outcome. A revised deal with the euro zone would be better.

The yoke of union
This newspaper would still prefer to recapitalise Cyprus’s banks directly through the ESM. That option is plainly not on the table. The best that can probably be done now is to spare the insured depositors, bail in other bank creditors and, given the economic damage caused in the past week, increase the amount of the bail-out. The financial assumptions in the rejected deal are already out of date. There will be capital flight when the shuttered banks eventually open; the island’s offshore-finance business plan is now bust. It needs to find new sources of prosperity, including faster exploitation of its recent Mediterranean gas finds—although these can be overplayed (see article). The best long-term plan for its economy would be a deal with the Turkish-Cypriots to reunify the island, which would boost tourism and GDP.

More broadly, Cyprus’s tragicomedy should prompt Europe’s leaders to get a move on. Even if only uninsured deposits are hit, a line has been crossed. A formal European bail-in regime is needed as soon as possible, one that requires banks to hold a layer of loss-absorbing senior debt designed to spare depositors, both insured and uninsured, in all but the last resort. That promises a more predictable environment, but it will also entrench fragmentation, with borrowers in weak countries finding it harder and more expensive to gain access to credit. The only solution to such fragmentation is a proper banking union and limited mutualisation of sovereign debt.

The political consequences are toxic. Cyprus is the latest peripheral country to feel mistreated by creditor countries. For their part creditors resent the fact that their financial support is summarily discounted. The euro-zone economy is stagnant. Protest parties are gaining popularity. The euro was supposed to be the manifestation of a grand political project. It feels more like a loveless marriage, in which the cost of breaking up is the only thing keeping the partners together.

Tuesday, March 19, 2013

Business & Finance

Hey. So, here's an article to get you started on the theme for this week:
http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105





I still don't know if I'm going to be able to get a projector and the technical stuff figured out yet, so check back here before Thursday, I might post a couple short videos for you to watch.

If you're completely financially and economically illiterate, first off, congratulations, you've avoided the indoctrination. However, your ignorance is the weapon the elite use to make things worse for the rest of us. It would be helpful if you knew what the sequester is, here's a relatively good article about it that you could read:
http://www.motherjones.com/kevin-drum/2013/03/the-sequester-explained

Of course I've written something about it, though it was called the 'fiscal cliff' at the time:
http://theendisalwaysnear.blogspot.com/2012/12/its-not-end-of-world.html

If you feel you need a little lesson in economics, this post I wrote isn't too bad if I do say so myself:
http://theendisalwaysnear.blogspot.com/2011/11/crack-in-curtain.html

I've also written quite extensively about inequality, how it came about and where it's heading. If you've got the time you could browse some of these:
http://theendisalwaysnear.blogspot.com/2010/09/lessons-on-killing-golden-goose.html
http://theendisalwaysnear.blogspot.com/2011/09/let-them-eat-ipads.html
http://theendisalwaysnear.blogspot.com/2010/12/bah-humbug.html
http://theendisalwaysnear.blogspot.com/2010/12/fix-needs-leak.html


Of the 1%, by the 1%, for the 1%

Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

THE FAT AND THE FURIOUS The top 1 percent may have the best houses, educations, and lifestyles, says the author, but “their fate is bound up with how the other 99 percent live.”
It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequalities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.

Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul. There are several reasons for this.

First, growing inequality is the flip side of something else: shrinking opportunity. Whenever we diminish equality of opportunity, it means that we are not using some of our most valuable assets—our people—in the most productive way possible. Second, many of the distortions that lead to inequality—such as those associated with monopoly power and preferential tax treatment for special interests—undermine the efficiency of the economy. This new inequality goes on to create new distortions, undermining efficiency even further. To give just one example, far too many of our most talented young people, seeing the astronomical rewards, have gone into finance rather than into fields that would lead to a more productive and healthy economy.

Third, and perhaps most important, a modern economy requires “collective action”—it needs government to invest in infrastructure, education, and technology. The United States and the world have benefited greatly from government-sponsored research that led to the Internet, to advances in public health, and so on. But America has long suffered from an under-investment in infrastructure (look at the condition of our highways and bridges, our railroads and airports), in basic research, and in education at all levels. Further cutbacks in these areas lie ahead.

None of this should come as a surprise—it is simply what happens when a society’s wealth distribution becomes lopsided. The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs. The rich don’t need to rely on government for parks or education or medical care or personal security—they can buy all these things for themselves. In the process, they become more distant from ordinary people, losing whatever empathy they may once have had. They also worry about strong government—one that could use its powers to adjust the balance, take some of their wealth, and invest it for the common good. The top 1 percent may complain about the kind of government we have in America, but in truth they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes.

Economists are not sure how to fully explain the growing inequality in America. The ordinary dynamics of supply and demand have certainly played a role: laborsaving technologies have reduced the demand for many “good” middle-class, blue-collar jobs. Globalization has created a worldwide marketplace, pitting expensive unskilled workers in America against cheap unskilled workers overseas. Social changes have also played a role—for instance, the decline of unions, which once represented a third of American workers and now represent about 12 percent.

But one big part of the reason we have so much inequality is that the top 1 percent want it that way. The most obvious example involves tax policy. Lowering tax rates on capital gains, which is how the rich receive a large portion of their income, has given the wealthiest Americans close to a free ride. Monopolies and near monopolies have always been a source of economic power—from John D. Rockefeller at the beginning of the last century to Bill Gates at the end. Lax enforcement of anti-trust laws, especially during Republican administrations, has been a godsend to the top 1 percent. Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to 0 percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest.

When you look at the sheer volume of wealth controlled by the top 1 percent in this country, it’s tempting to see our growing inequality as a quintessentially American achievement—we started way behind the pack, but now we’re doing inequality on a world-class level. And it looks as if we’ll be building on this achievement for years to come, because what made it possible is self-reinforcing. Wealth begets power, which begets more wealth. During the savings-and-loan scandal of the 1980s—a scandal whose dimensions, by today’s standards, seem almost quaint—the banker Charles Keating was asked by a congressional committee whether the $1.5 million he had spread among a few key elected officials could actually buy influence. “I certainly hope so,” he replied. The Supreme Court, in its recent Citizens United case, has enshrined the right of corporations to buy government, by removing limitations on campaign spending. The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent. When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.

America’s inequality distorts our society in every conceivable way. There is, for one thing, a well-documented lifestyle effect—people outside the top 1 percent increasingly live beyond their means. Trickle-down economics may be a chimera, but trickle-down behaviorism is very real. Inequality massively distorts our foreign policy. The top 1 percent rarely serve in the military—the reality is that the “all-volunteer” army does not pay enough to attract their sons and daughters, and patriotism goes only so far. Plus, the wealthiest class feels no pinch from higher taxes when the nation goes to war: borrowed money will pay for all that. Foreign policy, by definition, is about the balancing of national interests and national resources. With the top 1 percent in charge, and paying no price, the notion of balance and restraint goes out the window. There is no limit to the adventures we can undertake; corporations and contractors stand only to gain. The rules of economic globalization are likewise designed to benefit the rich: they encourage competition among countries for business, which drives down taxes on corporations, weakens health and environmental protections, and undermines what used to be viewed as the “core” labor rights, which include the right to collective bargaining. Imagine what the world might look like if the rules were designed instead to encourage competition among countries for workers. Governments would compete in providing economic security, low taxes on ordinary wage earners, good education, and a clean environment—things workers care about. But the top 1 percent don’t need to care.
 
Or, more accurately, they think they don’t. Of all the costs imposed on our society by the top 1 percent, perhaps the greatest is this: the erosion of our sense of identity, in which fair play, equality of opportunity, and a sense of community are so important. America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead, but the statistics suggest otherwise: the chances of a poor citizen, or even a middle-class citizen, making it to the top in America are smaller than in many countries of Europe. The cards are stacked against them. It is this sense of an unjust system without opportunity that has given rise to the conflagrations in the Middle East: rising food prices and growing and persistent youth unemployment simply served as kindling. With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that); with one out of six Americans desiring a full-time job not able to get one; with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”)—given all this, there is ample evidence that something has blocked the vaunted “trickling down” from the top 1 percent to everyone else. All of this is having the predictable effect of creating alienation—voter turnout among those in their 20s in the last election stood at 21 percent, comparable to the unemployment rate.

In recent weeks we have watched people taking to the streets by the millions to protest political, economic, and social conditions in the oppressive societies they inhabit. Governments have been toppled in Egypt and Tunisia. Protests have erupted in Libya, Yemen, and Bahrain. The ruling families elsewhere in the region look on nervously from their air-conditioned penthouses—will they be next? They are right to worry. These are societies where a minuscule fraction of the population—less than 1 percent—controls the lion’s share of the wealth; where wealth is a main determinant of power; where entrenched corruption of one sort or another is a way of life; and where the wealthiest often stand actively in the way of policies that would improve life for people in general.

As we gaze out at the popular fervor in the streets, one question to ask ourselves is this: When will it come to America? In important ways, our own country has become like one of these distant, troubled places.
Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.

The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

Tuesday, March 12, 2013

Media Presentation

Hey guys. Here's the article for the presentation Thursday!

How Viewers Grow Addicted To Television

By DANIEL GOLEMAN
Published: October 16, 1990

THE proposition that television can be addictive is proving to be more than a glib metaphor. The most intensive scientific studies of people's viewing habits are finding that for the most frequent viewers, watching television has many of the marks of a dependency like alcoholism or other addictions.

For instance, compulsive viewers turn to television for solace when they feel distressed, rather than only watching favorite programs for pleasure. And though they get temporary emotional relief while watching, they end up feeling worse afterward.

For a decade or more, researchers have pursued the hypothesis that some television viewers are addicted to watching. But only this year have a handful of studies produced the strongest evidence yet that some compulsive viewers are indeed addicted under standard diagnostic criteria.

There is no definition of television addiction on which all researchers agree. But people who call themselves ''television addicts,'' studies find, watch television twice as much as the average viewer. One study found that self-described addicts watched an average of 56 hours a week; the A. C. Nielsen Company reports the average for adults is just above 30 hours a week.
Recent studies have found that 2 to 12 percent of viewers see themselves as addicted to television: they feel unhappy watching as much as they do, yet seem powerless to stop themselves.

Portraits of those who admit to being television addicts are emerging from the research. For instance, a study of 491 men and women reported this year by Robin Smith Jacobvitz of the University of New Mexico offers these character sketches:
A 32-year-old police officer has three sets in his home. Although he is married with two children and has a full-time job, he manages to watch 71 hours of television a week. He says, ''I rarely go out anymore.''
A 33-year-old woman who has three children, is divorced and has no job reports watching television 69 hours a week. She says, ''Television can easily become like a companion if you're not careful.''
A housewife who is 50, with no children, watches 90 hours of television a week. She says, ''I'm home almost every day and my TV is my way of enjoying my day.''

Insights on Normal Viewing

The studies also shed new light on more ordinary viewing habits, showing that people who are emotionally dependent on television simply represent extremes of behavior seen from time to time in most viewers.
In a study comparing television viewing with leisure activities like sports, reading or gardening, television fared poorly as a diversion. While ordinary viewers say television relaxes them while they watch, afterward they feel far less relaxed, less happy and less able to concentrate than after participating in sports or other leisure activities.

To be sure, many people in the television industry, as well as some researchers, object to the idea that the medium can be addictive.

''People may watch to kill time or for escapism, but I've never seen anything conclusive that shows television to be psychologically addictive,'' said Richard Ducey, senior vice president of research and planning with the National Association of Broadcasters in Washington. ''It's a proposition with no support, except in some metaphorical sense, the same way you might be addicted to dessert.''

The issue of whether the most frequent viewers of television are addicted to it is being argued against the backdrop of a larger debate within psychiatry on the nature of addiction itself. For the most part, psychiatry has held to a strict definition of ''addiction,'' restricting its use to describe dependence on a substance like heroin to which the body develops a tolerance and shows withdrawal symptoms when deprived of it.

But in the current version of the psychiatric diagnostic manual, issued in 1983, the category of addiction was redefined and broadened to include compulsive behaviors that people turned to for relief from distress, and continued to rely on despite negative effects on their emotional or social functioning.

''Under the broader definition, many kinds of compulsive behavior could be considered addictive, including obsessive sex or compulsive television viewing,'' said Dr. Allen Frances, a psychiatrist at Cornell University Medical School, who is overseeing the revision of the diagnostic manual.

Watering Down of Concept

''However, the broad definition is under debate,'' he said. ''Many of us think it has become too vague, watering down the concept of addiction.''

The most commonly used scale to measure television addiction includes using television as a sedative, even though it does not bring satisfaction; lacking selectivity in viewing; feeling a loss of control while viewing; feeling angry with oneself for watching so much, not being able to quit watching and feeling miserable when kept from watching it.

''They turn on the TV when they feel sad, lonely, upset or worried, and they need to distract themselves from their troubles,'' said Robert McIlwraith, a psychologist at the University of Manitoba. Dr. McIlwraith reported his findings on television addiction at the annual meeting of the American Psychological Association in Boston last August.

The most exhaustive data on television watching data is from studies done between 1976 and 1988 on several different groups involving close to 1,200 men and women who volunteered to fill out questionnaires about their activities and moods whenever they were alerted by beepers they carried.

In analyzing the data for people's television-watching habits, Robert Kubey, a psychologist now at the School of Communications at Rutgers University, worked with Mihaly Csikszentmihalyi, a psychologist at the University of Chicago.

Their findings are reported in ''Television and the Quality of Life,'' published this year by Lawrence Erlbaum Associates. While their conclusions are drawn from the studies involving more than a thousand people, the most detailed results come from a study in which 107 men and women reported on their experiences at randomly selected moments throughout the day for a week.

The third of the men and women in the smaller study who watched television the most were markedly different from the rest of those studied. As a group, the compulsive watchers were more irritable, tense and sad than the others, and felt they had little control over their lives.

For most people, there was a strong relationship between being in a bad mood and watching television to get out of it. The strongest pattern predicting that people would watch television in the evening was that in the morning they felt the day was going badly, and by the afternoon they were in a bad mood.

Lowered Brain Activity

For all viewers, researchers have found, television tends to elicit a state of ''attentional inertia,'' marked by lowered activity in the part of the brain that processes complex information. That inertia, said Dr. Kubey, may explain why a mediocre television show can have high ratings if it follows a popular one.

''It's common for people to say they are selective television watchers,'' said Dr. Kubey. ''They'll say they sat down just to watch 'L.A. Law,' but they're still watching three hours later. A great many people feel powerless to get up and turn it off.''

For compulsive viewers, that inertia becomes extreme, so that the longer they watch, the more passive and less discriminating they become, Dr. Kubey found.

Oddly, while most people said they were more relaxed while watching television than they had been before starting, they ended up feeling far less relaxed once they stopped. ''We found no evidence that television offers emotional rewards that extend beyond viewing,'' Dr. Kubey said. Moreover, the longer people watch television, the less rewarding they find it, the intensive study of 107 people showed.

These experiences with television were strongest among the compulsive viewers. Not only did they report feeling worse than most people as they watched television, but their spirits drooped all the more once they stopped watching. What little lift they get from television, though, is enough in many cases for most frequent viewers to become dependent on it, Dr. Kubey said.

An additional pressure to watch television for the compulsive viewers arises from feeling uncomfortable when they are alone with nothing to do, the study showed. For such people, idle time is unpleasant, making them all the more ready to seek solace from television.

Testing Addiction Theories

In other recent research, Dr. McIlwraith tested several theories of television addiction in a study of 135 students at the University of Toronto. In his study, the one in eight students who said they were addicted to television watched twice as much as the others: 21 hours a week instead of 10.

One prominnent theory of television addiction, proposed by Jerome Singer, a psychologist at Yale University, holds that people who watch too much television from childhood grow up with a deprived fantasy life. For them, watching television substitutes for their own imagination. But Dr. McIlwraith found no difference between the television addicts and other students in their abilities to have pleasant, vivid fantasies on their own.

Another theory, proposed by psychoanalytic theorists, is that television addicts have an ''addictive'' personality, which makes them vulnerable to dependencies of all kinds. But Dr. McIlwraith found no evidence for that view. ''Television addicts don't eat more junk food, or smoke or drink more alcohol than other groups,'' Dr. McIlwraith said.

Instead, his study supported the findings of Dr. Kubey. The addicts were far more likely than other students to say they watched TV when feeling lonely, sad, anxious or angry, and to use it to distract themselves from things that bothered them or when they were bored. 3 Patterns Identified From this study and another of 476 men and women done with John Schallow, a psychologist at the University of Manitoba, Dr. McIlwraith has identified three main patterns of television use. ''One common use is to alter mood,'' Dr. McIlwraith said. ''These people turn on the television when distressed. Another is to fill time when you are bored. People who feel they are addicted fall into extremes of these types.''

On the other hand, he said, ''there is a rarer group who use television selectively. They tend to watch only a few favorite shows.''

Tuesday, March 5, 2013

Media II

Hey guys. Really wanted to give you something about the US media manipulation but instead I've gone for something much lighter, you have my wife to thank. Anyway, here's your article for Thursday:
http://www.buzzfeed.com/chrisstokelwalker/how-golden-eagle-snatches-kid-ruled-the-internet

How “Golden Eagle Snatches Kid” Ruled The Internet

Four Canadian film students were assigned a project: Create a YouTube hoax video that gets 100,000 views. They got nearly 42 million instead. Here’s the definitive behind-the-meme look at how — and why — their homework snowballed into one of the most popular and rapidly spread videos ever.


It's one depressingly typical minute of the 6.2 million uploaded to YouTube every day: In a Montreal park, nothing much is happening. The camera pans around a clear blue sky, tracing the arc of a golden eagle as it twists and turns through the air. The bird pulls a generous sweep around a large tree, 30 feet or more, shorn of its branches by the bitter frost that hits the Quebec city this time of year. And then things turn from dull nature documentary into snuff film.

The eagle doesn't continue its elegant acrobatics. Instead, it suddenly picks up pace. The sweep becomes a swoop, and it's dropping altitude. Eleven seconds into the video, a small boy in a warm insulated jacket comes into frame. He's sitting faced away, staring into space.

Eleven seconds into the video, you realize what's going to happen. Eleven seconds into the video, the eagle is 10 feet behind the little boy, and you're damned if the way the bird's wings are drawn up doesn't remind you an awful lot of the way Dracula wraps himself in his cloak before biting. It's horror-movie stuff.

A second later, the eagle's talons have latched on and the boy's taken up off the ground; he's dead weight. A guy in a black-and-white striped sweater rooting around in a bag nearby runs over as the boy takes flight. He's in mid-air, and when the talons release, he's flying for a split second before hitting the ground.

We hear an appropriately startled "Oh, shit!" and the cameraman sprints over, the grass speeding past as the lens points down. The little boy is crying. He's wearing a bright red hat with big googly eyes, and his face is that emotionless expression small humans get when they just don't have an appropriate response to what's gone on. The boy is alright, and the horror you felt gives way to relief. Thirty-five seconds in, the video replays the moment in slow motion because that's what happens at the end of every dunk on SportsCenter. The screen fades to black.

And then you copy the video URL, go to your Facebook account, and paste it in the status box, add a "what the fuck!" or something equally trite, and share.

You've just done precisely what Professor Robin Tremblay wanted you to do.
Robin Tremblay of Centre NAD


Tremblay is a lecturer at Centre NAD, a technology university in Montreal, where he's been teaching a video-effects class since 1992. In October, he challenged his students — as he did the previous two semesters — to make a viral hoax video. If it got more than 100,000 views, then congratulations, you got an A.

"The students have to shoot live-action, integrate 3-D effects, and make it so believable that it can look real," he explains in a thick French-Canadian accent. That's the core component of the VFX course and has been for years. "But I was always trying to think of new ways to teach it. New ideas. I think, 'Oh, maybe I should try a prank film.'"

Though the primary aim of Tremblay's class was to teach his students how best to use software to create 3-D visual effects, the assignment became an object lesson in what we find interesting, why we find it interesting, and how we disseminate things we find interesting. What do we believe, and why? And unlike 2009's Balloon Boy debacle, which smacked of opportunism and exploitation, this was the rare public hoax that remains victimless and good-natured and unmotivated by malice or greed — one that could actually be a teachable moment, not just for the perpetrators, but for all of us who participated by clicking, or by telling others to. And these moments are worth examining closely because they're the ones in which we're all watching, and wondering, together, in real time, if only for a short time.

Four of Tremblay's most industrious students, Normand Archambault, Félix Marquis-Poulin, Loïc Mireault, and Antoine Seigle, created a video called "Golden Eagle Snatches Kid" — 17 million views within a day, just shy of 42 million views in total, 14 million minutes in viewing time in the U.S. alone, embedded on major news websites worldwide, broadcast on morning talk shows, and linked from countless message boards — which proved this in historically impressive style."I still don't understand how it went that big," says Marquis-Poulin, 23. "I go from step one to the final result. I see all the work we did. I can't comprehend somebody on their phone, watching the video, saying, 'Look at this! An eagle catches a baby! That's awesome.' I can't imagine how many people had this moment. It's weird."
They got an A.



1. Thunderbirds Are Go

Tremblay wants his students to be at least as adept as the major professional movie studios they will hopefully end up working for. He also knows that the way visual effects are being deployed is changing — they're no longer used only to portray the incredible; often they're used in place of the mundane. If a director doesn't want to deal with 4,000 extras cheering in a football stadium, he'll populate the stands with computer-generated fans waving banners. Tremblay also knows how much video content we watch and share (4 billion hours a month on YouTube alone), and that if you can separate yourself from the dross, there is a potentially huge audience out there.

Tremblay's 25 students were separated into teams of two to five, and let loose. "Babies and animal videos were very much popular," explains Mireault, 21. "We started brainstorming how we could mix those two ideas."

"We didn't have the idea right away," explains Archambault, 22, who seems the natural leader of the group, comfortable explaining the process behind the creation of the video and the least fazed of the four by the attention the runaway success of the video eventually garnered. In November, he says, the four began batting around potential concepts for the project, including exploding pigeons and a plane landing on a busy Montreal street."But we decided an eagle would be more..." — there's a slight pause to find the right word — "subtle than a plane," adds Marquis-Poulin. Montrealers would be more likely to question why they didn't hear the sound of a 747 touching down on Saint Catherine Street; they could feasibly miss a bird snatching a child in a park. And while the students' reasoning may have ultimately boiled down to a simple tenet that serves to remind how much W.C. Fields would have loathed the internet, there is much historical precedent to suggest that the concept of a bird attack had the potential to be shared widely.

Enough people saw Alfred Hitchcock's The Birds 50 years ago for it to earn more than $11 million at the box office — nearly four times its $3.3 million budget. French avant-garde filmmaker François Truffaut was "convinced that cinema was invented so that such a film could be made." Certainly it got people's attention, and it hardened the primal premise in our minds that birds are considered potential human predators.

Indeed a whole academic field is devoted to such events. Some cryptozoologists spend their life's work trying to piece together historical references to (often giant) birds snatching babies and adults from their comfortable lives and flying them away. One of the most respected in this field is Mark A. Hall, 66, who worked for the USDA after gathering intelligence in West Berlin during the Cold War. He isn't coming up with these theories off the top of his head: There are firsthand historical written accounts testifying that bird attacks are real.


Roc from Arabian Nights
Though some might question whether birds with a 25-foot wingspan ever existed (Hall believes they could have), there are certainly stories, apocryphal or not, that nod to their existence. Early Native Americans told stories around campfires of attacks by birds, including those of the Piasa, or "Bird that Devours Man." In One Thousand and One Nights (also known as Arabian Nights), the giant bird Roc features heavily in the narrative. Like stories of gorgons, mermaids, and Cyclopes, historical, scientific, or factual evidence is scant, but the looming shadow of birds has hung over humanity for thousands of years.One such report was contained in the May 17, 1888, edition of The Equity newspaper out of Bryson, Quebec, a three-hour drive from Montreal. Seven-year old Georgie Richards of Brier Hill, New York, repelled "a very large bald eagle" with "as large a club as he could wield." The paper said it was "the first instance in which one of these voracious birds has attempted to carry off a child in St. Lawrence County."

"Looking back over the century and a half of reports," Hall wrote in his 2004 book Thunderbirds: America's Living Legends of Giant Birds, "it would seem encounters in which a person is harmed occur every 30 to 40 years. At that pace, it's about time for another incident of such a dangerous and dramatic nature."
The students figured that if they could present footage that backed up
thousands of years of apocryphal written evidence, that video could be huge. Their research uncovered a series of reported bird attacks throughout history — mostly based in northern Europe, says Archambault — and knew they could tap into that fear for their viral video.

"We had to do two kinds of research: one about the anatomy and the feathers, and the other was how the eagle flies," Marquis-Poulin explains. "How he moves, how he attacks his prey."

The video-effects course aims to accurately mimic the process of producing a real movie, says Professor Tremblay. That meant the students had to scout out locations, storyboard the action, and find some leading players.


Original storyboards for "Golden Eagle Snatches Kid"
"When we got the idea, we wanted to make sure it was possible to see an eagle in that region of the province," adds Archambault." We saw it could be in Montreal — but it's rare. It's possible."

The students had their arch villain, but now they needed their ingenue to be swept away. Seigle, the oldest of the group at 24, seemed the most likely to know someone who had a child willing to take part. Eventually, a friend's 18-month old son, Jacob, was cast. "It was the only available baby we had access to," Seigle admits, laughing.

The choice of location seemed obvious to the group: It had to be Mount Royal Park. The 500-acre expanse of greenery is pretty much the only place in the city you might see a rare golden eagle and a happy, innocent child in the same space. It had some name recognition, and the right kind of surroundings to correctly frame and track the shot so that the 3-D smoothly integrated with the real-life footage.

A group of eight, including their teacher, young Jacob, and Jacob's parents, gathered near the 155-year-old stone-built Smith House inside the park and shot their footage on Nov. 18. On arrival, the group made a crucial executive decision: Initially, the bird was going to fly away with the child. "We decided on a happy ending," says Mireault.The crew spent two hours filming four or five takes in the park. In one, explains Archambault, "the baby actually cried for real. We really liked that, so we put it in."

Over the next month, they ran their footage through three different programs: Autodesk Softimage (a 3-D-modeling app where they created the eagle and the computer-generated baby), Autodesk Maya (a program used to texture the eagle's feathers), and NUKE, a post-production program that digitally composited the different source material and gave the studio-quality footage a believable rough quality.

All told, from being given the assignment on Oct. 29 to turning it in on Dec. 18, the four estimate they worked some 400 hours on the project. "We did a couple of all-nighters," adds Mireault, during which the group would act as a tag team: One person would take a much-needed nap while the others worked. When refreshed, they'd swap roles.

How “Golden Eagle Snatches Kid” Ruled The Internet


With weary eyes, the 25 or so students in the course gathered in the Blinn/Phong screening room on campus at 4:00 p.m. EST on Dec. 18. People sat on the floor and propped themselves up against the walls: This was the conclusion of their class, and everyone wanted to see what everyone else had produced. One team made an infomercial for an alarm clock (402 views to date), another for an iPhone app that punches people in the face (2,634 views). "We still had our doubts, right until the end," says Seigle. But the video was well-received.

"Everyone applauded, everyone laughed at the little slow motion at the end," says Archambault. "There are more things to improve, but we had to hand it in." He pauses. "We thought it looked pretty good."

As soon as the class screening was over, all four quickly made their way to a computer. Seigle pushed the big red upload button on YouTube at around 7:00 p.m., surrounded by his three classmates. An innocuous username — MrNuclearCat — was chosen for the account. (The name was a breadcrumb for those on the trail of unveiling it as a hoax; the students had created a video earlier in the semester called "Nuclear Cats," which they had submitted to the Montreal International Game Summit.) Within 30 minutes, the first post on Reddit appeared. Within an hour, the first user tweeted out the video. Major sites were picking up on the story by midnight.The four students, meanwhile, were with their classmates in Le Pourvoyeur, a red brick building on Rue Jean Talon Est, a 15-minute walk from the Centre NAD campus. It's the students' regular haunt, bustling, even on a Tuesday night —upwards of 60 students and their teachers, powered by adrenaline, relief, and 5.0% ABV beer.
Tremblay was proud of his students' work, and told them so. "It was kind of a big endeavor to animate a bird and everything," says Marquis-Poulin. "He was very proud of us for succeeding on something he himself was calling very difficult."
The teachers had taken the students out to decompress, but easier said than done: They were all on their phones. "We checked how it was going, and it was around 1,000 views. We were already very happy with that," says Archambault.

"The first comments on the video were very positive. Everybody was fooled, and that was kind of a good sign," adds Marquis-Poulin, who had managed to sneak in a power nap before presenting to the class at 4:00 p.m. "We were expecting to have at least 10,000 views in the morning. We weren't expecting 1.2 million."

Not everyone was fooled, though.

How “Golden Eagle Snatches Kid” Ruled The Internet
2. Outbreak

Mark Twain once said, "A lie can travel halfway around the world while the truth is still putting on its shoes." Except that he didn't, because C.H. Spurgeon said it first — in 1859 — and said it a little differently: "A lie will go round the world while truth is pulling its boots on." Even that is an adaptation of a Jonathan Swift quote first penned 150 years earlier. The major aphorism people use to warn about the spread of falsehoods is itself based on a lie so widely spread that it has turned into one of those common cultural constants everyone knows and parrots back to each other.

"Golden Eagle Snatches Kid" didn't just pull on a pair of jackboots; it slipped itself into Nike running shoes, did some stretches, and set off at a sprint. The race to debunk the video was on.
Cyatek, real name Tiago Duarte, lives in Barcarena, Portugal, less than 10 miles west of Lisbon. Like a lot of teenage boys, when not on YouTube he spends a lot of time playing hyperrealistic video games like Call of Duty: Black Ops II, and he's a whiz at Photoshop. And to him, watching the video 20 minutes after it was uploaded, the whole thing just didn't sit right.
"It looked so fake to me," he explains. "The main thing that gave it away was the baby falling down." When the eagle snatches the child in its talons, it drags along the ground. As the bird gains a little altitude, the child slips. "It really looked like a 3-D model to me," the kind of models that populate Call of Duty, says Duarte. This was a worry of the students too: "Making a realistic human in 3-D is very hard. When it looks fake, it's very unconvincing," explains Archambault.

But others were less skeptical than Duarte. "Every single person was believing it, and the top comment at the time was something like, 'If you want to say this is fake, you better provide some proof.' So I did."

Duarte downloaded the video from YouTube and opened his copy of Sony Vegas Pro 11, a video editing package. He ran the file through some manual stabilization filters and corrected the color to make his proof more vivid. A frame-by-frame analysis found that at one stage of the video, the shadow of the bird disappears, and when the little boy slips from the eagle's talons, he in fact still travels upward for a fraction of a second. All in all, it took the 17-year-old less than five hours to debunk a month-and-a-half's worth of work.

Duarte used his video editing skills to put together a short video. "If I just commented [on the original YouTube video], people would just call me names," he says, so he uploaded his version to YouTube at 5:20 a.m. Western European Time (12:20 a.m. EST), a couple of hours before the four students headed home from the bar.

At that point everything "happened so fast," he says. Duarte's first move was to go to the original video and link to his response. People still didn't believe him; two users ganged up in a chain of comments, one asking, "How is this proof?" The other said it was "proof Cyatek is retarted [sic]."

Duarte didn't mind: That's the internet, after all, and people "really believed it was legit." Rather than deal with YouTube commenters, he thought he'd post the rejoinder to the Centre NAD video to Reddit, where he'd first seen the original.

He was too late. He tried to upload his clip, "Golden Eagle Snatches Kid — Fake," but the site threw up an error page — someone had already put his clip up. It had been only five minutes, max. Now there were two videos in circulation, one countering the other. Both were racking up views, comments, and coverage at a prodigious rate, and neither creator had control over their spread.

How “Golden Eagle Snatches Kid” Ruled The Internet
3. Moon Unicorns and Space Monkeys
The person who oversees YouTube's vision of what will become viral is Kevin Allocca. He's the company's trends manager, a buzzy title that essentially means he is ahead of the curve when it comes to babies on Roombas and cute dogs burping the alphabet. Allocca has identified three pillars of virality: tastemakers (those who decide what is cool, and spread it), communities (such as Reddit), and unexpectedness (which a bird-brained kidnapping has in droves).
"If there's anything we like more than watching outrageous footage of the impossible, it's discussing and reacting to outrageous footage of the impossible," he says. The video lingered, even after its debunking, because it gave people, he continues, "a topic for us to engage on and debate with each other about. We know that videos depicting the seemingly implausible — especially in nature — can become very popular. Add in the fact that there's just a lot to react to and that tons of blogs and news sites were embedding the video, and you've got a recipe for viral success."

Ryan Cordell, a lecturer at Northeastern University specializing in 19th-century periodical literature, analyzes how newspapers and other mass media of the time disseminated news, and perhaps unsurprisingly, the criteria for what makes a story spread haven't changed much. "It needs to be easily shared; have some level of cuteness — or," he explains, "in this case be something horrifying; and have some kind of challenge, or puzzle, or mystery." "Golden Eagle Snatches Kid" has all three.

One of the most outlandish hoaxes in history was gently ushered into the world via the pages of the New York Sun in August 1835. A supposed friend of famous astrologer Sir John Herschel wrote in the paper that he had been pointing his telescope (one made "of an entirely new principle") at the surface of the moon one night and saw — amongst other things — unicorns, goats, and men with wings building giant temples to their gods. The story is, of course, baloney, but no more so, certainly in 1835, than the notion a bird could swoop down and snatch a child from a Montreal park.

Eventually the hoax was uncovered — but not before it got the Sun an awful lot of new readers handing over their one cent each day to see what new miracles would happen. This was one of the first big hoaxes that fooled people in great numbers. After it, says Cordell, "lots of others came along and tried to mimic it, but lots failed. People had become attuned to be skeptical of similar things." That skepticism has continued ever since.

For some hoax creators, the goal is monetary gain and notoriety. Smart advertising companies have co-opted the popularity of the viral video to get their clients' products in front of millions of eyeballs. Some work, some don't. Some wear their branding on their sleeve, while others (such as this video of a Fiat attempting a U-turn in Naples, Italy) don't seem that blatant. Yet a lot of the people behind these hoaxes aren't necessarily trying to probe a boundary: They're simply responding to a common human impulse to fuck with our fellow man. And they find a receptive audience, because despite our pessimism, we're drawn to the extraordinary.

"Then, as now, we like to share things that resonate with our cultural ideas or values," Cordell says. "That gives us this sense that we are participating in and creating a community." And from time immemorial, one of our main cultural experiences is that we will do anything we can to make sure our young come to no harm.

Whereas previous bird snatchings in a pre-internet age still linger with uncertainty as to whether they're true or not, this one was categorically debunked — and quickly. "We're more and more on the lookout for a con," posits Cordell. One need only look at the skepticism in the initial online response to last week's footage of the Russian meteor shower; and when Iran's state news agency released photographs of the monkey it sent into space earlier this month, an online brouhaha broke out over its legitimacy. People believed it was fake based on, of all things, a mole on the animal's forehead. (The news agency wasn't trying to fool anyone: It simply used an archive photo of another space-bound monkey to illustrate the story.) If something seems remotely out of the realm of possibility — and we're presented with a lot of things that seem questionable on the internet — then our first response nowadays is to be circumspect.

Some believe what they see. Some don't. In a way, it doesn't matter.

From left: Mireault, Seigle, Marquis-Poulin and Archambault
4. The Morning After

More than 1 million people had seen the original video by the morning of Dec. 19. Everyone, from Professor Tremblay to the students, couldn't quite believe it. Being that kind of success was a crapshoot, believes Tremblay. "There's a lot of things we can't control. You can do the best thing," have the best and slickest 3-D effects, "but you need the spark," he says, when 72 hours worth of video are uploaded to YouTube each minute. "There's an undefinable quality to what makes a hoax a success. There's an X factor, which is kind of elusive."

Claude Arsenault, Centre NAD's public relations director, began getting press calls early on the morning of Dec. 19. "What happened was," says Arsenault, "we confirmed very quickly it was a hoax. It was not generally accepted that it was a hoax. There was a 12-hour window where no one claimed it. We claimed it very fast."
"Well, that's a lie," Tiago Duarte replies when this is quoted to him. He links me to a screenshot of his YouTube analytics screen for the video, and seems to have a point; around three quarters of a million people had seen "Golden Eagle Snatches Kid — Fake" by Dec. 19, around the time Centre NAD was releasing its admission — and getting its star pupils ready to meet the swarming press.
"We had to call the students to wake them up because camera crews were showing up" at the college, Arsenault explains.
There was one problem: Marquis-Poulin's cell phone was dead. Archambault was dispatched to bang on his front door. "I knew it was kind of a special situation then," Marquis-Poulin sheepishly explains.

All present and correct and groggy, the four students underwent a crash course in media training — the main tenet of which was breathe and think before you answer a question, but also to, for some reason, drink a lot of water and eat a lot of fruit — before being coaxed and cajoled from one TV studio to another.
"From noon until 9:00 p.m. they barely had time to eat," says Arsenault of the full press blitz. "It was interview after interview after interview." The students were caught off guard by the response, and found it challenging traversing the world's media in English and their native French. Not one of them was an eager interview subject. "They really just wanted to get back to their projects," Arsenault explains.

Amid the chaos of television, print, and radio interviews, the students still had term papers to hand in. (They were eventually given an extension for their essays into the holidays.) By the second day — and following a good night's sleep — the group were alternating interviews in groups of two and four with a little downtime to tend to their essays and play Ping-Pong in the student lounge downstairs from the press office.

The students were happy with one aspect of their fame, though. It allowed their family members to better understand what their degree involved beyond playing about on computers. "My family was treating me a little bit like a star," says Marquis-Poulin. "For them to be proud was the best feeling."
As people panicked and freaked out, the school had to admit the video was a hoax, and the second phase of the viral half-life of a YouTube video kicked into action. Now that people knew it was smoke and mirrors, they wanted to learn more about how it was done.

One fear — that potentially killer birds were on the loose — was replaced with another: If a bunch of students can make something so convincing, what's to say that CCTV footage, or news footage, couldn't be forged? That week before Christmas saw the students everywhere, on every channel, in every language.

Two months on and inevitably the number of views has slowed on the video. The graph's leveled out; in truth, it'd been inching toward a plateau 24 hours after it was first uploaded. Such is the supersonic speed of the internet, chewing trends up and spitting them out, before moving down the road and onto the next phenomenon. "Golden Eagle Snatches Kid" did better than most, though. "There aren't a ton of videos so far that have been able to pick up over 15 million views in a single day," says Allocca. Centre NAD and Tremblay took some flack from veterinarians and wildlife rehabilitators. Their video — though meant in jest — gave a species struggling to survive around the world bad press. (It also freaked out a few kids.) Though largely, people were simply impressed by the quality of the fake.

Because the Centre NAD students made their video with educationally licensed versions of Autodesk Softimage, Autodesk Maya, and NUKE, they weren't entitled to make money from the video — and with nearly 42 million views, a potentially significant amount of revenue was about to go unclaimed. However, the school could take the money, which will be used to help fund a scholarship for students who ordinarily might not be able to afford Centre NAD's tuition.

The four students are happy with the impact their work will have on future students at the school. For now they're being coy about what'll happen when they graduate, though some already have work experience with professional studios. Archambault has won an individual VFX competition and will visit Pixar's studios in Emeryville, California this summer.

Tiago Duarte won't be making quite as much as Centre NAD from his video, though he was as quick off the mark. His debunking of the hoax, despite passing in front of more than 4 million pairs of eyeballs, has earned $94.77 as of Feb. 2. YouTube keeps $8.78 of that, and the remaining amount is split 40/60 between Duarte and a network called Maker Studios he joined months before coming across "Golden Eagle Snatches Kid." For a 17-year-old, that's not an inconsiderate amount of money — it'll keep him in games for a month or so — but it's not the amount it could've been. "Honestly, I don't really care much," he says. "I didn't want to have the video monetized in the first place…so I'll get whatever I get and I'm OK with it."

I mention to him that the profit from the original video will go toward scholarships.

"That's really awesome!" he responds. "Can't wait to see what they produce this year."

How “Golden Eagle Snatches Kid” Ruled The Internet


5. "We're Under Scrutiny"

A good portion of the nearly 42 million people (as many people as the entire population of Argentina) who have watched "Golden Eagle Snatches Kid" will be waiting for this year's hoaxes too. The next crop of students are already planning their hoax videos. Archambault, Marquis-Poulin, Mireault, and Seigle are still at the school, jokingly goading their peers to top them. They hope their success motivates those who come next, and by all accounts they're already impressing. Robin Tremblay knows people are now on the lookout, and he also knows how difficult it will be to follow up on this year's success.

Tremblay began working on Hollywood movies in 1995 with work for the schlocky Witchboard III: The Possession and Screamers. Since then he's contributed to 30 or so films since as a matte painter and digital effects artist. (The movies have stepped up in quality: Tremblay has since worked on 300 and Brokeback Mountain.) In his years in the business, he's seen a change in the way special effects are produced, and a way in which his work is distributed and received.

In the two months since "Golden Eagle Snatches Kid," the school has fielded calls from people who have seen natural disasters and wondered whether they had something to do with it. They even took queries over the Russian meteorites, Arsenault says.

That people are linking such events to Centre NAD shows both how impressive 3-D computer-generated animation has become — even outside of professional Hollywood studios — and how suspicious people have grown. The balance of power has shifted: Hearsay was once the preserve of the people, while the media were detached and coolheaded. "Golden Eagle Snatches Kid" inverted those roles. "The press is now less skeptical than many of the citizens they purport to serve," believes Clay Shirky, one of the foremost thinkers on the social impact of the internet.

Truthers, conspiracy theorists, and cranks are no longer out on a limb in distrusting everything they see. Given that undergraduates have the computing power and the tools to distort reality, there's no telling what more power and higher investment can do. Tricks that were once Stalinist methods of rewriting history are now within the reach of anyone with a copy of Photoshop.

Tremblay, forever the wide-eyed youngster watching Hollywood's finest effects — one of his first works as a child auteur was to make his brother, playing a wizard, appear and disappear in a short film called The Evil Witchcraft — prefers to look at the positive reasoning behind why the video spread so quickly. "We crave the unexpected, the crazy, the impossible," he says. "Like the poster in Mulder's office in The X-Files, 'We Want To Believe.'"

That's going to be harder and harder to do. "A lot of people are now familiar with VFX techniques," says Tremblay. "They know what to look for to detect computer imagery. People are now used to seeing great VFX and they know it is not real. We're under scrutiny."

But Centre NAD will continue to try to push the boundaries of computer-generated effects while fooling the general populace. It'll be difficult, Tremblay points out, but don't worry.

"I have a few more tricks up my sleeve."