Bank of Spain data showed a net 66.2 billion euros ($82.0 billion) was sent abroad last month, the most since records began in 1990. The figure compares to a 5.4 billion net entry of funds during the same month one year ago.
Spaniards are worried about the health of their banks, hit by their exposure to a 2008 property crash, and have been sending money to deposit accounts in stronger economies of northern Europe.
The capital flight data predates the nationalization of Spain's fourth biggest lender Bankia (BKIA.MC) in May when it became clear the bank could not handle losses from bad real estate investments, compounded by a recession.
Thursday, May 31, 2012
Actually, it looks like it may be accelerating. From Reuters:
A 'supervolcano' eruption is the most catastrophic natural disaster that can hit our planet, short of an asteroid impact - and now scientists believe they may build up a deadly head of steam far faster than we thought.
Instead of the process taking hundreds of thousands of years, it could take just hundreds.
The news could be bad for the US, where a supervolcano is said to be simmering beneath Yellowstone National Park. If it erupted, two thirds of the country could be rendered uninhabitable.
* * *
The new study was based on analysis of a super-eruption that occurred in eastern California 760,000 years ago.As I've noted before, we don't need a super-volcano to cause problems, just an eruption big enough to lower global temperatures by a degree or two for a year or two.
Several independent lines of evidence indicated that the magma pool erupted within a few thousand years, perhaps within a few hundred years, covering half the North American continent with smouldering ash.
The scientists based their estimate on quartz crystallisation rates. Previous studies have relied on the growth of zircon crystals, which is said to be a less accurate method.
The research is published in the online journal Public Library of Science ONE.
Lead scientist Dr Guilherme Gualda, from Vanderbilt University in Nashville, Tennessee, said: ‘Our study suggests that when these exceptionally large magma pools form they are ephemeral and cannot exist very long without erupting.
‘The fact that the process of magma body formation occurs in historical time, instead of geological time, completely changes the nature of the problem.’
He said regions such as Yellowstone should be monitored regularly to provide advance warning of a catastrophic super-eruption.
Monday, May 28, 2012
China is now engaged in bitter disputes with the Philippines over Scarborough Shoal and Japan over the Senkaku Islands, both located far beyond China’s 200-mile-wide territorial waters in the South China Sea. Indeed, so expansive are China’s claims nowadays that many Asians are wondering what will satisfy China’s desire to secure its “core interests.” Are there no limits, or does today’s China conceive of itself as a restored Middle Kingdom, to whom the entire world must kowtow?
So far, China has formally referred to Taiwan, Tibet, and Xinjiang province as “core interests,” a phrase that connotes an assertion of national sovereignty and territorial integrity that will brook no compromise. Now China is attempting to apply the same term to the Senkaku Islands in its dispute with Japan, and is perilously close to making the same claim for the entire South China Sea; indeed, some Chinese military officers already have.
. . . [A]t a meeting in Beijing earlier this month between Japanese Prime Minister Yoshihiko Noda and Chinese Premier Wen Jiabao during a trilateral summit with South Korea, Wen mentioned the independence movement in the Xinjiang Uyghur Autonomous Region and the Senkaku Islands in the same breath. “It is important to respect China’s core interests and issues of major concern,” he emphasized.
Until that moment, the Chinese government had never applied the term “core interest” to the Senkaku Islands. Following Wen’s statement, the trilateral summit deteriorated. While South Korean President Lee Myung-bak held bilateral talks with Chinese President Hu Jintao, talks between Noda and Hu, and a scheduled meeting between Keidanren Chairman Hiromasa Yonekura and Chinese Foreign Minister Yang Jiechi, were also canceled. The joint declaration issued at the summit was delayed a day, and omitted all references to North Korea – a prime concern of both Japan and South Korea.
. . . If gruff diplomacy was the only manifestation of China’s expansive territorial claims, Asian leaders could sleep more peacefully. But the fact is that China’s navy is becoming increasingly active in the South China Sea, at the Senkaku Islands and Scarborough Shoal in particular, but also around the Spratly Islands claimed by Vietnam. Given China’s mushrooming military budget and secretiveness, that assertiveness has set off alarm bells among the other countries bordering the South China Sea.
Moreover, China’s bullying of the Philippines included not only the dispatch of warships to Scarborough Shoals, but also the sudden imposition of import restrictions on Filipino produce. And China’s reactions toward Japan are far more paranoid since a non-LDP government took power.
The struggles for power within China’s ruling Communist Party over the purge of Bo Xilai, and the blind activist Chen Guangcheng’s escape from detention during economic talks with the US, have made Chinese leaders’ nationalist assertions even more strident than usual. No official wants to appear soft where China’s supposed “core interests” are concerned.
Greece will leave the euro zone on June 18 if the populist government wins the country’s elections on the 17 as the rest of the euro zone rounds on "cheaters," Nick Dewhirst, director at wealth management firm Integral Asset Management, told CNBC.com Monday.I don't think that "cheating" is the right word. "Mooching" is the better term.
* * *
He said suggestions of a bank run and contagion have been overplayed by some quarters.
“Yes, the banks would run dry but it can be done, there is a lot more money electronically than there is cash. In Argentina they closed everyone’s bank account and then they were reopened using Pesos. The club would rally round the rest so the weaker members - Spain, Italy, Ireland and Portugal -would receive a massive support mechanism. The Germans would provide support to the rest of the euro but not to the Greeks,” he said.
Kit Juckes, global head of foreign exchange at Societe Generale, told CNBC’s “Worldwide Exchange” that the best outcome was “the status quo.” “A Greek economy in depression, austerity that guarantees they’ll stay in depression and living on life support from the rest of Europe is the best,” he said.
There is also this:
British electrical retailer Dixons has spent the last few weeks stockpiling security shutters to protect its nearly 100 stores across Greece in case of riot.
The planning, says Dixons chief Sebastian James, may look alarmist but it's good to be prepared.
Company bosses around Europe agree.
As the financial crisis in Greece worsens, companies are getting ready for everything from social unrest to a complete meltdown of the financial system.
Those preparations include sweeping cash out of Greece every night, cutting debts, weeding out badly paying customers and readying for a switch to a new Greek drachma if the country is forced to abandon the euro.
"Most companies are getting ready and preparing for a Greek exit and have looked at cash, treasury and currency issues," said Roger Bayly, a partner at advisory and accountancy firm KPMG.
Der Speigel has an article on modern ghost town,s including what can create one:
The Japanese island of Hashima was once among the most densely populated areas in the world. But with the decline of the coal industry, the island was deserted in the 1970s. Now history enthusiasts like to explore it in hopes of discovering remnants of the mining town it once was. The desolate ruins of the settlement also inspire filmmakers to replicate the haunting setting in their movies.
Hashima is just one example of a number of modern "ghost towns" around the world that has drawn the attention of urban researchers, who opened an exhibition on the topic on Thursday in the German capital of Berlin.
Neft Dashlari is another. An artificial settlement off the coast of Azerbaijan, it was constructed by the Soviets after World War II, when the state was facing a major oil shortage. Having found a large oil deposit 42 kilometers off the Azeri coast, officials decided to build a town to accommodate the rig workers, erecting motorways and housing on top of huge steel posts. But now, as reserves near depletion, the settlement is beginning to resemble a deserted scene from a science fiction film.
Ghost towns are not only the result of deindustrialization, though. Human error and conflict can also rob a community of life. Former Cypriot beach resort Varosha lies abandoned as a result of the Turkish invasion in 1974, which led its entire population to flee the area. Tables in deserted homes remain set for a meal and laundry still hangs on lines near the long stretches of abandoned beach.
Accidents and natural disasters also cause people to desert their homes. An underground mine fire still burning after it began in Centralia, Pennsylvania in the early 1960s has forced all but a handful of residents out. Just seven resolute inhabitants remain living there today without infrastructure and electricity.
Ghost cities are certainly not a new phenomenon, though. In just one of many such occurences, a change of climate around 1400 is believed to have led to the abandonment of the prosperous ancient city of Angkor in Cambodia, which boasted an advanced water system and sophisticated international relations.
But perhaps even more striking are the existence of newly constructed cities that sit nearly empty, like Ordos in China, which has been described as the "best kept ghost town in the world." A modern city designed for 300,000, with street lamps run by wind turbines and freshly-laid asphalt, it now houses no more than 5,600 people, predominantly gardeners and builders who came for well-paid seasonal work.
Sunday, May 27, 2012
Zero Hedge has an interesting article on low-tech methods to counter-act high tech surveillance and tracking devices. The author uses fictional examples of how or when to use the examples, but links to specific products or articles. He writes:
Technological weaponry and surveillance should never be underestimated. Today’s advancements are terrifying, devastating, and were designed after decades of trial and error in peripheral wars and burgeoning dictatorships around the world. A technology cannot be defeated by someone who does not respect its capability. That said, in the end, wars are not won with fancy gadgets alone. All conflicts are decided by a primary driver; force of will.Read the whole thing.
Who has the strength of spirit to endure the longest? Who has the intelligence to outwit the technology? Who knows exactly what they are fighting for and why? These questions decide victory, not unmanned aircraft and computers.
In the introduction, I joke a little about the state of our Republic, but sadly, the fictional accounts above represent realities that Americans today must consider as practical and possible in the near future. “The Swedes” are not illusion, but a parable of the kind of totalitarianism that arises in the midst of any culture dominated by elitism and collectivism. Whether you believe this is realistic or not in our nation today I suppose is dependent on your level of awareness surrounding current events. My goal in covering the information above is not to convince you one way or the other of the dangers ahead. The point is to redistribute the knowledge so that one day, in the event that the stories portrayed turn out to be more true than you realize, you may have the ability to do something about those troubled times as an effective champion, rather than a helpless victim…
Detroit, whose 139 square miles contain 60 percent fewer residents than in 1950, will try to nudge them into a smaller living space by eliminating almost half its streetlights.This is essentially a continued example of the decline of the city, and the resulting ruralfication of Detroit. Frankly, it would probably just be easer if Detroit relinquished control over much of the land. Freed of the city's oversight, they might be able to more rapidly heal.
As it is, 40 percent of the 88,000 streetlights are broken and the city, whose finances are to be overseen by an appointed board, can’t afford to fix them. Mayor Dave Bing’s plan would create an authority to borrow $160 million to upgrade and reduce the number of streetlights to 46,000. Maintenance would be contracted out, saving the city $10 million a year.
Other U.S. cities have gone partially dark to save money, among them Colorado Springs; Santa Rosa, California; and Rockford, Illinois. Detroit’s plan goes further: It would leave sparsely populated swaths unlit in a community of 713,000 that covers more area than Boston, Buffalo and San Francisco combined. Vacant property and parks account for 37 square miles (96 square kilometers), according to city planners.
“You have to identify those neighborhoods where you want to concentrate your population,” said Chris Brown, Detroit’s chief operating officer. “We’re not going to light distressed areas like we light other areas.”
This op-ed from National Post describes the overall issues of decline:
The sad story of Detroit, which not all that long ago was one of America’s great cities, gets sadder still. Having lost 60% of its population since 1950, the one-time industrial giant is now a hollowed-out shell of its former self. According to the city’s estimates, over a quarter of its land area is abandoned — and Detroit is a geographically large city, so that’s a hell of a lot of uninhabited space. My last visit to the city a few years ago had me zipping around on various freeways that run through it, looking around in amazement as I passed from a clean, beautiful downtown through what looked like a bombed-out war zone before suddenly finding myself in attractive suburbs. It’s surreal.Here is a photo-essay from Time Magazine about the decline of Detroit.
As the people have fled, abandoning whole tracts of Detroit to nature and the criminal element, the city’s tax base has vapourized. Empty houses contribute no property taxes to city coffers, and depress land values among the homes still holding families in the area. A new plan to save the city, down to barely 700,000 residents (from a height of 2,000,000), will see large areas of Detroit effectively officially abandoned. And a part of that plan will be turning out the street lights.
As it is, many of the lights have gone out on their own. An estimated 40% of the street lights in Detroit are already broken, and the city doesn’t have the money to repair them even if there was any public demand for them to be in working order. Seventeen percent of the street lights date back to the 1920s and would cost hundreds of millions to repair or replace. Many others have long been stripped for their metal wiring. The city hopes to borrow enough money to replace and upgrade roughly half of the lights operating in the city, but will only do so in certain areas. It hopes this will encourage Detroit’s existing population to concentrate itself in a more economically viable, smaller core.
And this effective shuttering of whole swaths of the city won’t be done through flicking off the lights alone. The city also intends to halt road and sidewalk maintenance in “distressed” (read: abandoned) areas, concentrating available resources on those parts of the city deemed viable. State approval will be needed for some of the changes, but that’s unlikely to be a problem. What to do with Detroit is a problem for all of Michigan, which has half of its population living in or around Detroit, and frankly doesn’t have a whole lot of cash to throw at the dying city.
The Home Secretary says that the Government is already “looking at the trends” to determine whether immigration from beleaguered European countries is increasing. While there is no evidence of increased migration at present, she adds that it is “difficult to say how it is going to develop in coming weeks”.
On the subject of whether emergency immigration controls are under consideration, Mrs May says: “It is right that we do some contingency planning on this [and] that is work that is ongoing.”
The introduction of immigration controls within the EU would undermine a key part of the single market. However, it is allowed in “exceptional” circumstances under European law.
Controls are most likely to include restrictions on people seeking to work in Britain, who could be made to apply for visas.
Several European governments introduced temporary immigration controls when countries such as Poland and the Czech Republic joined the EU, to stop an influx of workers. France also threatened to reintroduce passport controls at the Italian border following an influx of Libyan and Tunisian refugees during the Arab Spring.
David Cameron has already said that Britain has made contingency plans to deal with the break-up of the single currency.
They involve preparations to evacuate Britons from Greece if civil disobedience spirals out of control....
I read somewhere recently that "bank run" is one of the top search queries on Google. So, I did some looking on Google to see what was happening in Spain, given the announcement of a bailout of the one of the major Spanish banks.
The LA Times has this to say today:
Investors are holding their breath for a run on Spanish banks, as depositors quietly worry whether their money is safe. Electronic transactions are up slightly, with money flowing from smaller Spanish banks to larger ones, and even to accounts outside the country, though the volume is far less than in more deeply troubled Greece.The problem is that bank runs are harder to see today than in the past. Rather than long lines of people queuing up to withdraw cash, its easy to transfer the money electronically to different banks, or even different nations. Particularly so, because of the common currency.
. . . On May 17, Bankia's shares temporarily lost nearly a third of their value after a Spanish newspaper reported that more than $1 billion had been withdrawn from the bank in the previous week. In a hastily called news conference, the government denied that there had been a run on the bank, and shares recovered some, but not all, of their losses.
. . . The Standard & Poor's ratings agency also announced downgrades late Friday of five Spanish banks, dropping the credit ratings of three, including Bankia, to junk status. All five are cajas, community banks, which are required to invest depositors' money in local development projects with supervision of local politicians.
When Spain's housing and job markets collapsed, the cajas were hit hardest because they specialized in construction and real estate lending, and their investments were not as diversified as those of national or global banks. The previous Socialist government's strategy was to force mergers of small cajas, combining their assets to try to strengthen them against losses. Instead, the result in most cases was simply bigger banks with bigger debts.
Bailing out Spain's entire banking sector, and the cost of insuring its $1.25 trillion in deposits, would far exceed the price tag for rescuing smaller Greece. Spain would almost certainly need international aid to do so. The question is how many banks — what proportion of the entire banking system — Madrid could manage to prop up on its own.
Markets probably will deliver their verdict on Bankia's bailout when trading resumes Monday in Europe, and a day later in the United States, after the Memorial Day holiday.
The New York Times discussed this issue a couple of days ago in this article. It reported:
Ángel de la Peña, a Spanish government worker, is seriously considering the once unthinkable: converting some of his savings from euros to British pounds.
Alvaro Saavedra Lopez, a senior executive for I.B.M. in Spain, says many of his corporate counterparts across the country are similarly looking for safer havens by transferring their spare cash to stronger euro zone countries like Germany “on a daily basis.”
It is only a trickle so far, and not nearly enough to constitute a classic bank run. But these growing transfers of deposits out of troubled Spanish banks reflect a broader fear that the country’s problems could make it hard for Spaniards to get to their money if banks fail and cannot be supported by the government. In a worst case, some even worry their money will be worth substantially less if Spain is forced to leave the euro currency zone and re-adopt its old currency, the peseta.
Money already has been pouring out of banks in Greece, where many citizens believe it is increasingly likely that their country will be forced to leave the euro zone. But for European policy makers and economists, the possibility of mini-runs on banks spreading from Greece to other, bigger countries like Spain — with 1 trillion euros, or $1.25 trillion, in bank deposits — poses a much more serious risk. Indeed, the outflow of money from Spanish banks could increase if the ratings agency Standard & Poor’s, as expected, downgrades Spanish banks, in effect saying that their weakened state makes them riskier.
The havoc that a stampede might cause to the Continent’s financial system would greatly complicate efforts by European Union officials to fashion a longer-term plan to ease the debt crisis and revive Europe’s economy, because authorities would have to cope with the staggering added costs of shoring up banks.
“A bank run can happen very quickly,” said Matt King, an expert on international fund flows in London for Citigroup. “You are fine the night before, but on the morning after it’s too late.” It was a similar liquidity crisis on Wall Street in September 2008 — which started with nervous investors pulling money from troubled institutions, then quickly from healthier ones — that set off the financial crisis.
The article goes on to note:
In Greece, more than two years into its financial crisis, nearly one-third of the country’s bank deposits have already left the country.As you probably heard, Jim Cramer appeared on Meet the Press last Sunday, and stated: "I'm predicting bank runs in Spain and Italy in the next few weeks. Without coordinated policy there will be financial anarchy." (Source, with video, here).
There has been no such exodus in Spain so far, where over the last year about 4.3 percent of bank deposits, or 41 billion euros, the equivalent of about $51 billion, has been transferred out of the country. But that amount is in addition to a decline of 140 billion euros in foreign-owned financial assets in the last year, like the sale by foreigners of Spanish government bonds.
The real information you would need is unavailable. That would be watching what the people in the know--top bankers and politicians--do with their money. However, unlike Argentina, you won't see people flying out of the country with suitcases crammed with foreign currency. As I indicated, it will be subtle--electronic transfers, mostly. And, of course, the banks and the government will say everything is fine right up until the point that they freeze the accounts.
Saturday, May 26, 2012
The Department of Homeland Security has been forced to release a list of keywords and phrases it uses to monitor social networking sites and online media for signs of terrorist or other threats against the U.S.
The intriguing the list includes obvious choices such as 'attack', 'Al Qaeda', 'terrorism' and 'dirty bomb' alongside dozens of seemingly innocent words like 'pork', 'cloud', 'team' and 'Mexico'.
Released under a freedom of information request, the information sheds new light on how government analysts are instructed to patrol the internet searching for domestic and external threats.
The words are included in the department's 2011 'Analyst's Desktop Binder' used by workers at their National Operations Center which instructs workers to identify 'media reports that reflect adversely on DHS and response activities'.
Department chiefs were forced to release the manual following a House hearing over documents obtained through a Freedom of Information Act lawsuit which revealed how analysts monitor social networks and media organisations for comments that 'reflect adversely' on the government.
However they insisted the practice was aimed not at policing the internet for disparaging remarks about the government and signs of general dissent, but to provide awareness of any potential threats.
The storm clouds hanging over the global economy darkened yesterday as a raft of data showed output slowing around the world.
Bleak news from the United States and China added to the gloom in Britain and the eurozone as confidence drained away.
‘The world economy is in the intensive care unit now,’ said Chilean finance minister Felipe Larrain in a sign that the pain is being felt around the globe.
* * *The problem, as I see it, is that right now most every nation's economy is limping along. If everything else goes right, things will hang on, or perhaps even improve, given time. However, a black swan event, such as one or two major volcanic eruptions (we don't need a super-volcano, just something that will pump enough dust and SO2 into the atmosphere to lower temperatures a degree or two), a Middle-Eastern war, a sudden spread of wheat rust or some other similar event that would suddenly drive up food and/or fuel prices, and things would begin to tip over the edge in many areas.
In the eurozone, business suffered its steepest decline for nearly three years in May as the malaise spread from the periphery to Germany and France.
Research group Markit said its index of private sector activity – where anything below 50 signals decline – fell from 46.7 in April to 45.9 this month.
Chris Williamson, chief economist at Markit, said it was the weakest reading for 35 months and pointed towards a 0.5 per cent slump in economic output across the eurozone in the second quarter of the year.
Manufacturing growth in the US also slowed, with the index down from 56 in April to a three-month low of 53.9 in May.
Recession in parts of Europe and the slowdown in China hurt American exports.
China’s once booming factories suffered a seventh straight month of decline.
The US and China are the world’s two biggest economies. ‘We are very much in a period of weakening global growth,’ said Peter Dixon, an economist at Commerzbank. ‘It doesn’t quite feel like 2008 yet but the danger is we could get there quicker than we think.’
From the New York Times (H/t Instapundit):
With the election of the Socialist François Hollande as president this month, the wealthy in France are suddenly scrambling for places to stash their money for a while.Maybe they can start local real estate bubbles and still lose their money.
Well-heeled French citizens are scouring real estate opportunities in neighboring countries like Britain and Switzerland. The United States — particularly New York and Miami — is also drawing French investors looking to pick up rental properties or pieds-à-terre, brokers say.
In recent months, as Mr. Hollande’s victory appeared more possible, the French stepped up their house-hunting visits to New York, several brokers said.
These are not billionaire Russian oligarchs with blank-check budgets on the hunt for trophy properties. The French buyers most active in recent months are generally looking at properties between $500,000 and $5 million, brokers say.
What the French are so concerned about is Mr. Hollande’s campaign vow to tax income over 1 million euros at a 75 percent rate. The Socialist government, trying to put a dent in France’s $1.3 trillion euro debt, has said it will also raise the tax rate on capital gains to the same level as the tax on ordinary income.
“So there would not be any kind of advantage to invest in something in France, in the stock market or real estate,” said Mr. Pous-Bertran de Balanda, who runs Black Tulip Capital, a New York-based real estate asset management company he started last August that helps clients find properties and manages them.
To Mr. Pous-Bertran de Balanda and other wealthy French people, the news feels like a rerun of 1981, when President François Mitterrand decided to nationalize several big companies and raised taxes (though both moves were later reversed). And after the tax policy flip-flops by President Nicolas Sarkozy over the past five years — he gave the wealthy tax breaks only to raise taxes two years later — many in France see their own market is too volatile, and are searching for a safe haven.
The flagging euro and the economic struggles in Greece, Italy and Spain have only further shaken their confidence in investing at home. Last month, a Parisian couple in their 50s decided to buy a $4 million waterfront house in Miami after first considering Cannes, said Christophe Bourreau, a French broker with Barnes International who is now based in New York.
“They feel like the new president is hunting the wealthy,” Mr. Bourreau said, “and that the sooner their money is out of France the better.” The window may close soon: Mr. Hollande has said he will look to put his tax plans in place this summer, after parliamentary elections next month.
Scientists in Cameroon have warned that eating monkeys and apes could cause the next HIV.
They are already tracking a HIV-like virus called simian foamy virus, and fear more viruses could spread and lead to a global health crisis.
80 per cent of the meat eaten in Cameroon is killed in the wild and is known as ‘bushmeat’,with gorilla, chimpanzee or monkey favourites.
According to one estimate, up to 3,000 gorillas are slaughtered in southern Cameroon every year.
Elsewhere, the Washington-based Bush Meat Crisis Task Force estimates that up to five million tons of wild animals are being ‘harvested’ in the Congo Basin every year – the equivalent of 10 million cattle.
A study earlier this year by the U.S. Centers for Disease Control and Prevention (CDC), identified evidence of viruses,including simian foamy virus, in illegally imported wildlife products confiscated at several U.S. international airports, including John F. Kennedy International Airport, George Bush Intercontinental-Houston and Atlanta Hartsfield-Jackson International.
* * *
‘A recent survey confirmed this is now in humans, especially in some of those who are hunters and cutting up the apes in the south-east of the country,’ he said.
He also believes that ebola may be present, and caused a recent mass death in a nearby village.
‘In the village of Bakaklion our brothers found a dead gorilla in the forest,’ said Felix Biango,a village elder.
‘They took it back to the village and ate the meat. Almost immediately, everyone died – 25 men, women and children – the only person who didn't was a woman who didn't eat the meat.’
Friday, May 25, 2012
A nationwide real estate downturn, stalling exports and declining consumer confidence have produced what a Chinese cabinet adviser, quoted on the official government Web site on Thursday, characterized as a “sharp slowdown in the economy.”Read the whole thing.
Though the Chinese economy continues to expand, construction workers are losing jobs in droves and retail sales grew last month at the slowest pace in more than three years. Investments in fixed assets have increased more slowly this year than in any year since 2001.
The most striking feature of the slowdown is that it extends beyond the coastal provinces, which depend on exports and are closely linked to the global economy, to the country’s far more insular interior, including cities like Xi’an here in northwestern China.
China’s unexpected economic difficulties are starting to unnerve investors in world markets, especially commodity markets, as China is the world’s largest consumer of most raw materials and the second-largest consumer of oil.
A deepening slowdown would ripple across the world economy. Until now, China’s economy barreled ahead mostly unhindered as the main engine of global growth, even as Europe struggled with its government debt crisis and the United States limped along with a crippled housing market.
Thursday, May 24, 2012
China has acknowledged sending additional ships to the territory it disputes with the Philippines in the South China Sea but is blaming Manila for the escalation.
Thursday, China on called the Philippines "insincere" in wanting to resolve a two-month standoff about a disputed island in the South China Sea.
China’s Foreign Ministry cited unspecified provocative actions by Manila around the Scarborough Shoal.
At the same time, spokesman Hong Lei acknowledged sending more ships to the rocky islands, known as Huangyan in China, to strengthen its control.
China has indisputable sovereignty over Huangyan Island, he said. Ships there are government vessels and conduct maritime surveillance and provide some guarantee to the fishing boats. By providing such assurance, Hong said Chinese fishermen can operate freely there.
The Scarborough Shoal has been the site of a standoff since April when a Philippine warship tried to stop Chinese fishing boats.
Chinese surveillance ships blacked them from being detained and the two sides have since engaged in a war of words.
The arrival of more Chinese ships demonstrates how Beijing’s naval capabilities compare to the Philippines, said Carl Thayer, professor at the Australian Defense Force Academy.
“The arrival of other ships puts enormous pressure on the Philippines which, in the best of times, its coast guard is lucky to have one ship in good repair out at sea," he said. "But to station a boat up at the Scarborough Shoal, far removed from the Spratly islands and other areas where it should be patrolling, puts a strain on the resources and also on the capability. So, it looks like China is supplying extraordinary pressure --a ll non-violent, not threatening -- to demonstrate its sovereignty,” said Thayer.
Chinese authorities acknowledged about 20 fishing boats are in the area, despite a temporary self-imposed fishing ban. The Philippines say the Chinese fishermen are violating the ban.
Sometimes as we contemplate the evil in the world, it is easy to become discouraged. However, at recent commencement addresses, the apostles have counseled young people to take heart.
This article reports:
At BYU–Idaho on April 7, 2012, Elder M. Russell Ballard of the Quorum of the Twelve Apostles counseled students to “replace fear with faith.”And this article notes:
“I believe we are standing on the threshold of a new era of growth, prosperity, and abundance,” he said. “I urge you to make a commitment to yourself and to Heavenly Father to dedicate your life and consecrate your time and talents to the building up of the Church of Jesus Christ in anticipation of the Savior’s Second Coming.”
Speaking of the challenges faced by the world—wars, natural and financial disasters, and the regression of moral standards, Elder Dallin H. Oaks of the Quorum of the Twelve Apostles told graduates [at BYU] to look to the future with faith.
“Though men’s hearts are failing them, you should take heart. There have always been challenging times,” Elder Oaks said. “We, the generations of your predecessors, have survived daunting challenges and so will you. The answer to all of these challenges is the same is it has always been. We have a Savior, and He has taught us what we should do.”
Quoting the second President of the Church, Brigham Young (1801-1877), Elder Oaks focused on principles of self-reliance. “Instead of searching after what the Lord is going to do for us, let us inquire what we can do for ourselves. While we can help ourselves, it is our duty to do so.”
I came across this article from Pres. Ezra Taft Benson on preparation written in 1974. Some highlights:
In section 1 of the great Doctrine and Covenants, a volume of modern scripture, we read these words: “Prepare ye, prepare ye for that which is to come. …” (D&C 1:12.) Further in this same revelation are these warning words: “… I the Lord, knowing the calamity which should come upon the inhabitants of the earth . …” (D&C 1:17.)
What are some of the calamities for which we are to prepare? In section 29 the Lord warns us of “a great hailstorm sent forth to destroy the crops of the earth.” (D&C 29:16.) In section 45 we read of “an overflowing scourge; for a desolating sickness shall cover the land.” (D&C 45:31.) In section 63 the Lord declares he has “decreed wars upon the face of the earth. …” (D&C 63:33.)
In Matthew, chapter 24, we learn of “famines, and pestilences, and earthquakes. …” (Matt. 24:7.) The Lord declared that these and other calamities shall occur. These particular prophecies seem not to be conditional. The Lord, with his foreknowledge, knows that they will happen. Some will come about through man’s manipulations; others through the forces of nature and nature’s God, but that they will come seems certain. Prophecy is but history in reverse—a divine disclosure of future events.
Yet, through all of this, the Lord Jesus Christ has said: “… if ye are prepared ye shall not fear.” (D&C 38:30.)
What, then, is the Lord’s way to help us prepare for these calamities? The answer is also found in section 1 of the Doctrine and Covenants, wherein he says:
“Wherefore, I the Lord, knowing the calamity which should come upon the inhabitants of the earth, called upon my servant Joseph Smith, Jun., and spake unto him from heaven, and gave him commandments;
“And also gave commandments to others. …” (D&C 1:17–18.) He has also said: “Search these commandments, for they are true and faithful, and the prophecies and promises which are in them shall all be fulfilled.” (D&C 1:37.)
Here then is the key—look to the prophets for the words of God, that will show us how to prepare for the calamities which are to come. For the Lord, in that same section, states: “What I the Lord have spoken, I have spoken, and I excuse not myself; and though the heavens and the earth pass away, my word shall not pass away, but shall all be fulfilled, whether by mine own voice or by the voice of my servants, it is the same.” (D&C 1:38.)
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At the April 1937 general conference of the Church, President J. Reuben Clark, Jr., of the First Presidency, asked: “What may we as a people and as individuals do for ourselves to prepare to meet this oncoming disaster, which God in his wisdom may not turn aside from us?” President Clark then set forth these inspired basic principles of the Church welfare program:
“First, and above and beyond everything else, let us live righteously. …
“Let us avoid debt as we would avoid a plague; where we are now in debt, let us get out of debt; if not today, then tomorrow.
“Let us straitly and strictly live within our incomes, and save a little.
“Let every head of every household see to it that he has on hand enough food and clothing, and, where possible, fuel also, for at least a year ahead. You of small means put your money in foodstuffs and wearing apparel, not in stocks and bonds; you of large means will think you know how to care for yourselves, but I may venture to suggest that you do not speculate. Let every head of every household aim to own his own home, free from mortgage. Let every man who has a garden spot, garden it; every man who owns a farm, farm it.” (Conference Report, April 1937, p. 26.)
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Concerning clothing, we should anticipate future needs, such as extra work clothes and clothes that would supply warmth during winter months when there may be shortages or lack of heating fuel. Leather and bolts of cloth could be stored, particularly for families with younger children who will outgrow and perhaps outwear their present clothes.
“The day will come,” said President Wilford Woodruff, “when, as we have been told, we shall all see the necessity of making our own shoes and clothing and raising our own food. …” (Discourses of Wilford Woodruff, p. 166.)
In a message to the Saints in July of 1970, President Joseph Fielding Smith stated that the pioneers “were taught by their leaders to produce, as far as possible, all that they consumed … This is still excellent counsel.” (Improvement Era, vol. 73 , p. 3.)
Wood, coal, gas, oil, kerosene, and even candles are among those items which could be reserved as fuel for warmth, cooking, and light or power. Some may be used for all of these purposes and certain ones would have to be stored and handled cautiously. It would also be well to have on hand some basic medical supplies to last for at least a year.
Men should seek honorable employment and do their work well in order to provide for their own. Men who can perform useful skills with their hands will be in increasing demand. Handymen, farmers, builders, tailors, gardeners, and mechanics can and will prove a real blessing to their families and their fellowmen.
The Saints have been advised to pay their own way and maintain a cash reserve. Recent history has demonstrated that in difficult days it is reserves with intrinsic value that are of most worth, rather than reserves, the value of which may be destroyed through inflation. It is well to remember that continued government deficits cause inflation; inflation is used as an excuse for ineffective price controls; price controls lead to shortages; artificial shortages inevitably are used as an excuse to implement rationing.
When will we learn these basic economic principles? However, “… when we really get into hard times,” said President Clark, “where food is scarce or there is none at all, and so with clothing and shelter, money may be no good for there may be nothing to buy, and you cannot eat money, you cannot get enough of it together to burn to keep warm, and you cannot wear it.” (Church News, November 21, 1953, p. 4.)
Read the whole thing.
Just for something a little different, here is an interesting article from Fox News about the aircraft lost over the Himalayas during WWII, and the search for a specific aircraft.
Nothing James Browne learned in flight school prepared him for “The Hump,” a perilous, Himalayan no-man’s land that became a graveyard for hundreds of fearless WWII-era fliers who battled Japanese fighters, impossible weather and a supply route from hell.
Just 21 years old on Nov. 17, 1942, when he took the co-pilot’s seat of a C-47 bound for Dinjan, India, from Kunming, China, Browne was one of hundreds of fearless American fliers who took the infamous supply route over the Himalayas, ferrying supplies to China as it battled Imperial Japan. Browne, like many others, had signed on before the U.S. entered the war that was rapidly engulfing the globe.
“He was deeply aware of the threat to this country even though we were yet to declare war,” recalled Browne’s cousin, Bob Willett, now 85 and retired in Florida. “He said to himself, they need fliers and I’m a good one.”
Somewhere high above the Himalayas, the aircraft’s wings iced over. The best guess is that it stalled out and dropped like a rock, landing in the rugged mountain jungle, its location a mystery that would endure for more than 70 years. Browne, who grew up in the Chicago suburb of Winnetka, Capt. John Dean, the pilot and a veteran of the legendary Flying Tigers, and a Chinese crewman were listed as missing in action.
The plane was one of hundreds to go down in the rugged and remote mountain region fliers dubbed “The Hump” by American fliers who dodged Japanese fighter planes, steering their unarmed and rickety aircraft for 20-hour stretches with unreliable instruments in winds that could reach 200 mph. Experts believe more than 700 planes crashed trying to surmount the Hump, making the Himalayan region an inaccessible tomb of legendary fliers and rusted fuselages.
* * *Read the whole thing. It would make a great book.
Working off the last transmission from the plane, Kuhles eventually zeroed in on the summit ridge of Cangshan Mountain in Burma as the likely site of the crash. But it would take three trips, over five years, before he hacked through bamboo and high-altitude grass to finally lay his eyes on the plane he’d promised to find.
After climbing 14,000 feet, and being abandoned by all his guides and porters except a 17-year-old boy who spoke no English, “the impenetrable wall of bamboo, as tough as iron and sharp as razor-blades” yielded to Kuhles' machete. Gleaming in the sun was the wreckage of the C-47 transport plane in which Dean and his crew had been entombed.
“It was like stepping into an ancient Egyptian (pyramid),” recalled Kuhles. “I knew it was the plane I was looking for. Finally, Dean and the others would have a chance to come home.”
Looking at some other underlying statistics, China's demand for iron ore has declined, leading to an overall decline in prices. From a May 21 Reuters report:
Sellers of imported iron ore in China slashed price offers further on Monday as weak demand continued to weigh on spot steel prices, opening more downside room for iron ore after a fall of nearly 5 percent last week. Some steel mills in China, the world's biggest buyers of iron ore, have delayed delivery of shipments from miners on thin demand and expectations prices, already at five-month lows, could fall some more. Price offers for cargoes from Australia, Brazil, India and other origins fell for the fourth time in five days on Monday, slipping by as much as $2 per tonne, according to Chinese consultancy Umetal. "There's an oversupply of iron ore, and on the other side you have very weak demand. It's very ugly out there," said a Singapore-based physical iron ore trader. Supplies of iron ore from top exporters Australia and Brazil are bouncing back after disruptions due to bad weather in the first quarter. But the increased supply is coming at a time when Chinese demand is slowing along with its overall economy. Prices could eventually be at risk of falling below $100 a tonne, traders say, a level last seen in late 2009.And this Reuters report from today underscores the continued decline in international trade evidenced by China's slowing economy:
The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell amid weak preliminary manufacturing data from China, and a decline in demand for larger freight vessels, panamaxes and capesizes.
The index - which gauges the cost of shipping commodities including iron ore, cement, grain, coal and fertiliser - fell 42 points, or 3.81 percent, to 1058 points.
The Baltic's Capesize index lost 5.32 percent, with average earnings down 13.62 percent to $6,847. Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal.
Poor preliminary manufacturing data from the world's top consumer of iron ore and coal, China, didn't bode well for shipping, analysts said.
China's factories faltered in May as export orders fell to two month lows, a private sector survey showed on Thursday, suggesting surprise weakness in April's hard economic data persists even as policymakers seek to shore up growth.
The HSBC Flash Purchasing Managers Index, the earliest indicator of China's industrial sector, retreated to 48.7 in May from a final reading of 49.3 in April.
"Given the data out of China, which continues to stay depressed to say the least, the shipping markets would continue to struggle to find a stable footing anytime soon," RS Platou analyst Rahul Kapoor said in a note.
On Thursday, the Baltic's panamax index fell 4.72 percent, with average daily earnings down at $9,010.
In the past week, I've seen a couple articles on the fall-off in tourism in certain troubled countries.
First up is Greece, which has seen a steep decline in tourism and even airlines cutting back on routes to Greece. Some is due to the economic situation and rioting, and some is to increased taxes. From the Independent:
... nearly a fifth of Greece's 11 million population is trying to make a living through tourism. The sector accounts for 18 per cent of Greece's GDP, and employs more than 900,000 people. The country hosts 9,600 hotels, 764,000 beds ready for tourist heads, 2,300 car hire firms, and 500 yacht companies. Yet where visitor numbers rose nearly 10 per cent to 16.4 million last year, bookings were down 20 per cent up until the recent election, and plunged 50 per cent in the week after the vote that saw 7 per cent of Greek citizens backing the neo-Nazi Golden Dawn party.Egypt is not doing so hot either, and I don't expect it get any better once it has fully adopted sharia law:
* * *
Evidence of the bloodshed from that stuttering tourism is all over Athens. Shops are shuttered, cafes closed and vandalised. VAT on restaurant meals rose from 13 per cent to 23 per cent last September. The boarded-up Athenian cafes were clearly a victim, but so too was the government.
While the VAT almost doubled, tax receipts from restaurants are down over the past six months. "When a small taverna has to pay VAT at 23 per cent plus all the other taxes and can't raise prices because demand is already down, they either don't survive, or they cheat," says Andreas Andreadis, SETE's chairman. "The tax hike is ridiculous. It destroyed 50,000 jobs of young, non-educated kids who were working in bars and cafes in Athens alone. This is what happens when you're bean-counting and don't look at growth."
* * *
Alongside the VAT hike, aviation taxes in the country are far higher than the rest of southern Europe. "Athens airport is the most expensive in the region," says Eftichios Vassilakis, the vice-chairman of Aegean Airlines, the country's biggest carrier. "We're lobbying to make it more reasonable." But the government is not looking to cut taxes in any area.
Athens airport saw passenger numbers drop 12 per cent to 564,000 in the four months to May.
* * *
"Because of the state of the economy airlines have not been able to provide direct, long-haul connections," Mr Vassilakis says. "we're losing carriers. United Airlines, US Airways, Singapore Airlines, and Delta have all cut routes. Greece needs to strengthen its aviation market to reconnect long-haul areas to Athens to access the new markets of India and China."
Egypt has a problem with foreigners. More accurately, Egypt has a problem because there aren’t enough foreigners investing or traveling in Egypt anymore.I'm sure it not all about the troubles in those countries, but also due to more people taking "stay-cations."
After the revolution began last year, foreign investment dried up, fast. Tourists disappeared and haven’t really come back. The two groups—investors and travelers—are extremely important sources of money for the Egyptian government and the entire economy itself.
* * *
It’s not just foreign investors who have moved money out of Egypt. The Coptic minority and Egyptian businesses with links to the old regime have also seen the wisdom of stashing their money overseas until things settle down in Cairo.
Tuesday, May 22, 2012
Fitch Ratings has downgraded Japan two notches to A+, citing a surge in public debt since the Lehman crisis and the lack of any plan to restore fiscal probity.It should also be a warning to China, which is where Japan was in the late 1980s.
Key indicators are deteriorating on almost every front, raising concerns that the world's third largest economy is running aground after two "Lost Decades".
Japan's debt has jumped by 61 percentage points of GDP since 2008, compared to eight points for the AAA bloc. Public debt is expected to reach 239pc of GDP this year, uncharted levels for a major economy in peace-time. `Net debt' – subtracting Japan's vast holdings of foreign bonds – is nearer 137pc but this is rising at an even steeper trajectory.
* * *
Previous downgrades a decade ago were shrugged off by the markets. Yields on 10-year bonds kept falling as the economy slid deeper into deflation. They are now 0.85pc, the world's lowest. There was no flicker of change after Fitch's announcement. There is a graveyard full of `Japan bears' who warned of a debt debacle too early.
It may prove different this time. Japan has exhausted its buffers. The savings rate has collapsed to 2pc of GDP from 16pc when the bubble burst in 1990. This has vastly reduced the pool of captive savings that can be tapped by the state.
Taxes cover half total spending. The rest is borrowed. Japanese banks and life insurers are still buying the bonds, but Jonathan Tepper from Variant Securities doubts that they can do so much beyond 2014. The Government Investment Pension Fund – the biggest holder of debt – became a net seller last year to cover redemption claims.
The historic current account surplus of 3pc of GDP has evaporated. Last year's Fukushima disaster was the coup de grace. Japan will switch off its last nuclear reactor in May, leaving the country dependent on oil and gas imports to power its industry.
David Rea from Capital Economics said Japan will run a trade deficit this year. It may also tip back into contraction soon after bumper growth in the first quarter driven by the one-off effects of eco-car subsidies and post-Fukushima reconstruction. Retail sales fell 1.2pc in March. Core machinery orders fell 2.8pc. Export orders have withered, reflecting the sharp slowdown in China.
Monetarists say that Japan's 20-year battle with stagnation is a warning to the West. The country failed to purge its banks swiftly and relied on Keynesian fiscal projects to prime pump the economy each time growth stalled. The result was a string of false dawns, with public debt ratcheting ever upwards.
You may have noticed that as more facts in the Trevyn Martin/George Zimmerman come to light to the public (the prosecutors have long been privy to all of this), they support Zimmerman's account:
1. Medical reports that Zimmerman's injuries were more severe than previously reported:
Zimmerman was diagnosed with a "closed fracture" of his nose, a pair of black eyes, two lacerations to the back of his head and a minor back injury the day after he fatally shot Martin during an alleged altercation.2. Martin had bloody knuckles and drugs in his system.
3. Witnesses confirm Zimmerman's account, and even Martin's father told investigators that it was not his son's (i.e., Martin's) voice calling for help on the 911 tape.
Two police reports written the night that George Zimmerman shot Trayvon Martin said that Zimmerman had a bloody face and nose, according to police reports made public today.This includes one witness, who told police "that he saw Trayvon Martin straddling George Zimmerman and pummeling the neighborhood watch captain 'MMA style' shortly before the unarmed teen was felled by a gunshot to the chest."
The reports also note that two witness accounts appear to back up Zimmerman's version of what happened when they describe a man on his back with another person wearing a hoodie straddling him and throwing punches.
It has been such a contentious case that even the evidence is being disputed.
The police report states that Trayvon Martin's father told an investigator after listening to 911 tapes that captured a man's voice frantically callling for help that it was not his son calling for help.
In short, as one commentator noted, the evidence is such that "[n]o jury – except one frightened that the New Black Panthers might kill them if they vote for an acquittal or that they might cause race riots – no fair jury would find anyone guiltily here of second degree murder."
I think it is almost certain that we will see an increase in racially motivated black-on-white violence and, perhaps, even riots because of the Martin/Zimmerman matter. Unfortunately, it will be hard to track the trend because the media and police actively suppress reporting of black-on-white hate crimes. As Thomas Sowall writes in the National Review:
When two white newspaper reporters for the Virginian-Pilot were driving through Norfolk, and were set upon and beaten by a mob of young blacks — beaten so badly that they had to take a week off from work — that might sound like news that should have been reported, at least by their own newspaper. But it wasn’t.Sowell's concern is that, at some point, there will be a violent backlash from Whites. But it could just as well come from other minority groups. Certainly the Hispanic community cannot be too thrilled with what is happening to Zimmerman.
The O’Reilly Factor on Fox News Channel was the first major television program to report this incident. Yet this story is not just a Norfolk story, either in what happened or in how the media and the authorities have tried to sweep it under the rug.
Similar episodes of unprovoked violence by young black gangs against white people chosen at random on beaches, in shopping malls, or in other public places have occurred in Philadelphia, New York, Denver, Chicago, Cleveland, Washington, Los Angeles, and other places across the country. Both the authorities and the media tend to try to sweep these episodes under the rug.
In Milwaukee, for example, an attack on whites at a public park a few years ago left many of the victims battered to the ground and bloody. But when the police arrived on the scene, it became clear that the authorities wanted to keep this quiet.
One 22-year-old woman, who had been robbed of her cell phone and debit card, and had blood streaming down her face, said, “About 20 of us stayed to give statements and make sure everyone was accounted for. The police wouldn’t listen to us, they wouldn’t take our names or statements. They told us to leave. It was completely infuriating.”
The police chief seemed determined to head off any suggestion that this was a racially motivated attack by saying that crime is color-blind. Officials elsewhere have said similar things.
A wave of such attacks in Chicago were reported, but not the race of the attackers or victims. Media outlets that do not report the race of people committing crimes nevertheless report racial disparities in imprisonment and write heated editorials blaming the criminal-justice system.
What the authorities and the media seem determined to suppress is that the hoodlum elements in many ghettoes launch coordinated attacks on whites in public places. If there is anything worse than a one-sided race war, it is a two-sided race war, especially when one of the races outnumbers the other several times over.
Just be aware that there are black leaders that really hate whites, and will attempt to stir up trouble if Zimmerman is acquitted. You may want to reconsider travel to high density urban areas if and when Zimmerman goes to trial--especially once the matter is submitted to the jury and a verdict is imminent.
Sunday, May 20, 2012
Hundreds of Italians were spending Sunday night in tents and temporary shelters after an earthquake early in the day struck in the north of their country, killing at least four people, injuring dozens and sending parts of historic castles, clock towers and churches tumbling down.Just another reminder to know what to do in the event of a disaster, and have a 72-hour kit ready, or at least have emergency supplies on hand.
Italian authorities said the earthquake in the area of Modena and Ferrara in the Emilia Romagna region registered a 6.0 magnitude. At least one tremor was felt by residents around 1 a.m., but the fatal quake hit shortly after 4 a.m.
Four men working the night shift in factories in the Ferrara area were killed, two of them when the roof of a ceramics factory caved in. In addition, Italian news reports cited the quake in the deaths of two women apparently due to heart attacks.
The quake left hundreds of people homeless. Some were expected to seek shelter in tents set up by the Civil Protection Agency, others in sports arenas and others in homes of relatives and neighbors. Rain in the area made the situation all the more difficult.
CBS News reports on the protests on the NATO summit:
Thousands of protesters walked the sweltering streets of Chicago on Sunday to vent their opposition to NATO and the government leaders meeting just a few hundred yards away.
* * *
CBS News correspondent Dean Reynolds reports that as their chants echoed off the facades of downtown skyscrapers, a massive cordon of police - including SWAT teams - marked their every footstep and led them along their approved path.
The ranks of the more violence-prone participants had been thoroughly infiltrated by undercover officers days ago, including three arrested last week who prosecutors accused of conspiracy to commit terrorism.
There was also a cyber attack on the city of Chicago's website that lasted several hours. The hacker group which calls itself Anonymous claimed responsibility.It's not really clear what they are protesting, however. This article from the Associated Press states:
"We are actively engaged in actions against the Chicago police department and encourage anyone to take up the cause," the hacker group said in a statement.
But while some demonstrators were looking for trouble, for the most part the protests have been peaceful - something the city police superintendent noted amid the crowds along Chicago's lakefront.
"You're seeing us facilitating peaceful protests, protecting people, providing for the public safety, while at the same time being intolerant of crimes being committed," said Chicago Police Superintendent Garry McCarthy.
Thousands of protesters marched through downtown Chicago on Sunday in one of the city's largest demonstrations in years, airing grievances about war, climate change and a wide range of other complaints as world leaders assembled for a NATO summit.
The protest, which stirred worries about violence in the streets, was largely peaceful until the end, when a small group of demonstrators briefly clashed with a line of police who tried to keep them from the lakeside convention center where President Barack Obama is hosting the gathering.
* * *
Some participants called for the dissolution of NATO, the 63-year-old military alliance that is holding its 25th formal meeting in Chicago.
* * *
"Basically NATO is used to keep the poor poor and the rich rich," said John Schraufnagel, who traveled from Minneapolis to Chicago for the march. Since the end of the Cold War, he said, the alliance has become "the enforcement arm of the ruling 1 percent, of the capitalist 1 percent."
Peace activists joined with war veterans and people more focused on the economy. Marchers assembled at Grant Park with signs denouncing NATO, including ones that read: "War(equals)Debt" and "NATO, Go Home."
But the crowd was mostly filled with protesters whose primary concerns had little to do with the discussions at the summit.
I've referenced numerous articles concerning the standoff between China and the Philippines over the Scarborough Shoal, including that this is part of a bigger picture of China flexing its muscles to gain more control over the natural resources (primarily oil) that underlay the South China Sea and the vital sea lanes. Today, the Philippine Star reports that 5 Chinese ships have been deployed near the shoals, although they are still in international waters. The article suggests, however, that they may be there to support the Chinese ships actually in the shoal.
This article from the Diplomat discusses the larger picture, including that the dispute over the Scarborough Shoal is merely the prelude to further conflicts in the region. It notes:
The active flashpoint today is in the Scarborough Shoal, located in the South China Sea or West Philippine Sea. It’s a chain of reefs and rocks claimed by China, the Philippines, and Taiwan. China is accused of using its superior force to assert ownership of the territory. Its decision to dispatch oversized quasi-civilian boats near the shoal is interpreted by many Filipinos as an act of bullying and aggression.Whether it was planned, or just an opportunity that presented itself, I think the Scarborough Shoal was, or became, both a matter of China flexing its muscles in order to intimidate its weaker neighbors, and a test to see how the U.S. would react. Unfortunately, we do not know the full reaction from the U.S. Certainly, the incident did not cause the U.S. to back down on going ahead with previously scheduled joint military exercises with the Philippines, and appears to have strengthened military ties between the U.S. and the Philippines. As the article from the Philippine Star noted, American submarines were patrolling in Philippine waters.
But the main conflict in the region involves the resource rich Spratly Islands, which are being claimed by six countries: China, Vietnam, Taiwan, Malaysia, Brunei, and the Philippines. Tension is permanently high in the area because of the military posts established by the claimants. If the dispute isn’t resolved diplomatically today or in the near future, it could potentially trigger a broader conflict in the Asia-Pacific.
Saturday, May 19, 2012
For the past several days, the technocrats of Europe have been swearing on a stack of Bibles (figuratively, they don't actually believe what the Bible teaches) that there were no plans on Greece exiting the Euro, and the idea was unthinkable. Well, like most of their pronouncements, this also was false.
This article reports that, in fact, the EU has been preparing for a Greek exit:
European Union trade commissioner Karel De Gucht said that both the European Commission and the European Central Bank (ECB) were working behind the scenes on contingency plans for a break-up.
“Today there are in the European Central Bank, as well as in the Commission, services working on emergency scenarios if Greece shouldn’t make it. A Greek exit does not mean the end of the euro, as some claim,” he said.
The first public declaration that preparations are in place came as economists at UBS said European taxpayers would have to swallow losses on Greece, whether or not it remains a member of the currency union.
Under a best case scenario, which would see Greece remain inside the euro but its colossal €274bn of outstanding debt put on a more sustainable path, UBS said European taxpayers would have to write-off €60bn of the €182bn of rescue loans they have provided.
If Greece was to leave the euro, however, the bill would jump to at least €225bn as the new currency would halve in value and €104bn of additional emergency funding by the ECB would be wiped out.
Contagion to the banking sector and across the eurozone, coupled with the economic damage that would cause, would lead to further unquantifiable costs. Other economists have estimated the final bill at nearly €800bn. UBS said the losses would cripple the ECB, which would need to be recapitalised.
The International Monetary Fund, which has contributed €22bn to the Greek rescue so far, would probably be treated as a preferential creditor and be protected, the analysts said, so UK taxpayers would not lose out directly.
However, the economic spill-over would plunge Britain into a deep recession from which it might never fully recover.
This article states that the G-8 Summit leaders have stated that Greece must stay part of the European monetary union. However, it also notes:
In the end, the gods of the copybook headings must be appeased:
Jose Manuel Barroso, President of the European Commission, said he would not entertain a “Plan B” for Greece, and that the focus remained on a “Plan A” with Greece part of the eurozone.Ironically, however, banks foresee that a Greek exit would actually boost the value of the Euro.
Attempts to move the debate to how Greece might be able to remain a member of the eurozone follow a terrible week for the region which made a Greek exit seem more likely than ever.
Germany was left isolated after Angela Merkel spoke for the first time about a possible Greek exit early in the week. She was also under increasing pressure to ease her demands for austerity, after Mr Obama joined France and Italy in a pro-growth stance.
A draft of the G8 communique last night showed leaders stressed an “imperative to create growth and jobs.”
On Tuesday Greek politicians said they had failed to agree to a new Coalition Government, paving the way for a second election on June 17.
Two polls on Saturday suggested Greece’s anti-bailout leftist Syriza party is neck-and-neck with the pro-bailout New Democracy party.
The fear among policymakers, investors, and economists alike is that the Greek banking system will not be able to survive as long as the election, as people have already withdrawn hundreds of millions of euros in deposits from Greek banks.
In the end, the gods of the copybook headings must be appeased:
AS I PASS through my incarnations in every age and race,--Kipling
I make my proper prostrations to the Gods of the Market Place.
Peering through reverent fingers I watch them flourish and fall,
And the Gods of the Copybook Headings, I notice, outlast them all.
We were living in trees when they met us. They showed us each in turn
That Water would certainly wet us, as Fire would certainly burn:
But we found them lacking in Uplift, Vision and Breadth of Mind,
So we left them to teach the Gorillas while we followed the March of Mankind.
We moved as the Spirit listed. They never altered their pace,
Being neither cloud nor wind-borne like the Gods of the Market Place,
But they always caught up with our progress, and presently word would come
That a tribe had been wiped off its icefield, or the lights had gone out in Rome.
With the Hopes that our World is built on they were utterly out of touch,
They denied that the Moon was Stilton; they denied she was even Dutch;
They denied that Wishes were Horses; they denied that a Pig had Wings;
So we worshipped the Gods of the Market Who promised these beautiful things.
When the Cambrian measures were forming, They promised perpetual peace.
They swore, if we gave them our weapons, that the wars of the tribes would cease.
But when we disarmed They sold us and delivered us bound to our foe,
And the Gods of the Copybook Headings said: "Stick to the Devil you know."
On the first Feminian Sandstones we were promised the Fuller Life
(Which started by loving our neighbour and ended by loving his wife)
Till our women had no more children and the men lost reason and faith,
And the Gods of the Copybook Headings said: "The Wages of Sin is Death."
In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."
Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings limped up to explain it once more.
As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
Last Tuesday I wrote about the developing crisis around the Chinese real estate development and investment firm, Evergrande , and the risk i...