Wind farms put on heightened alert after Boston bombings

by Jerome a Paris Tue Apr 16th, 2013 at 02:14:26 AM EST

Oh wait...

Nuclear power plants in Oswego County on heightened awareness after Boston explosions

OSWEGO COUNTY -- In response to the Boston Marathon explosions, the nuclear power plants at Nine Mile in Scriba in Oswego County have been put on a status called heightened awareness.

Although there are no additional security measures being put in place right now, nuclear power plants in Massachusetts and New Hampshire have increased security after the bombings at the finish line of the Boston Marathon.

Of course, we can't put a cost on this.

Carbon markets don't work

by DoDo Sat Apr 13th, 2013 at 07:14:31 AM EST

[Hoisted from the Weekend Newsroom]

Europe's carbon market EU-ETS, as well as the UN's CDM, are currently hampered by low carbon prices due to an over-abundance of free carbon credits. However, in an op-ed in The Guardian, University of Essex professor Steffen Böhm argues that the market-fundamentalist approach to managing carbon emissions is doomed to fail even if carbon prices would be high.

Carbon markets have lost us more than 15 years in the battle against climate change yet we continue to plough forward with scaling them up. Why?

Some hope that this global expansion of carbon markets will revive their fortunes, helping to raise billions for investments in low-carbon and climate change mitigation technologies. Others, including myself, take a more evidence based approach, arguing that this hope of the pro-market lobby is unfounded, given the inefficient and even corrupt nature of carbon markets so far.

Böhm sees the following three systemic failures:

1. You can earn money off the carbon market without actually reducing emissions. One way is to apply with a project that would have been built anyway, another is to build a plant to eliminate specific greenhouse gases and then produce that greenhouse gas just to be able to benefit from carbon credits (see HFC-23 scam).
2. As in other recent bubble markets, there is lack of oversight and transparency.
3. Carbon credits fuel unsustainable practices, primarily through the conflict between biofuels and food production.

Böhm give examples for each and points out that they are endemic, not the exception.

Concrete, Stakes and Garlic Open Thread

by afew Mon Apr 8th, 2013 at 11:17:10 AM EST

The death of this great lady was a merciful release. Would that we had another Margaret Thatcher to lead us now! - Norman Tebbit - Telegraph Blogs

I have just heard the news of Lady Thatcher's death. It is a sadness that such an immense figure of the late 20th century should have gone – but perhaps a merciful release for her, from a life which must have been increasingly empty in recent years. She did indeed change Britain for the better – would that there was somebody like her to lead us again now!

The free market is a myth

by DoDo Sat Apr 6th, 2013 at 05:46:13 AM EST

[Hoisted from the weekend Newsroom]

The title is from the sub-title of an op-ed by Cambridge economist Ha-Joon Chang in The Guardian, titled Company profits depend on the 'welfare payments' they get from society. Chang mentions the recent case when Indian courts rejected a drug patent lawsuit brought by Swiss pharmaceutical Novartis, and points out that the company's two predecessors grew big in the first place because for long, Switzerland didn't recognise chemical patents. After listing some other examples, he arrives at a conclusion picking apart the 'free-market' notion of the relationship between private profits and the state. This is nothing new for ET readers, but nice to read in a clear and concise form in a mainstream news source:

the point is that all businesses make what profits they make only because the government, and the electorate as the ultimate sovereign (at least in theory), helps them in all sorts of ways – free money (banks), free workers (Poundland), monopoly rights (pharmaceutical companies), implicit permission for substandard products (supermarkets).

Once we accept that the amounts of profit companies make are ultimately determined by these "welfare payments" society decides to confer upon them, we begin to see the problem with the free-market view that has dominated the world for the last few decades.

The Politics of Competitive Austerity and Class War

by Frank Schnittger Wed Apr 3rd, 2013 at 02:17:46 AM EST

Paul Krugman keeps writing piece after piece lamenting how stupid politicians are to be heaping austerity policies onto already depressed economies and then wondering why the outcome is ever more depression. He heaps scorn on discredited theories of "expansionary austerity" or that excessive public borrowing might "crowd out" private investment pointing out that all the macro-economic evidence is to the contrary.

Absent from his analyses, however, is any theory as to why political leaders (and many of their economic advisers) might be following such counter-intuitive policies, other than the implied or explicit notion that these people must be really stupid. I want to begin the process of offering a more rigorous theory here, and it is in two parts:

Part 1 is a variant of our old friend competitive devaluations: In the days of floating currencies many countries sought to improve their short run competitive position by allowing or encouraging their currency to devalue relative to their trading partners. In the longer run of course, this resulted in inflation which tended to erode this advantage, and it only works in the short term if your country manages to devalue more than your trading partners.

Of course in a currency union this is no longer possible relative to your fellow currency members, and so the only way to improve your relative competitive position is to deflate your economy more than your "partners". This leads to two problems: Deflation is much more economically damaging than external currency devaluation, and if every country in a currency Union deflates at the same time, they achieve no competitive advantage relative to each other, but manage to massively deflate the currency area as a whole. Indeed one country's deflationary policies exacerbates deflation in their neighbours. This is what is currently happening in the Eurozone with record unemployment and forward economic indicators sufficiently bad to strike terror into the hearts of anyone likely to be looking for a job in the future - itself a cause of further depression.

But part 2 of the explanation is perhaps more insidious still, and it is to Marx rather than Keynes that we have to look for inspiration: What if the current depression is also being caused by an inter-generational and class war - currently really only being effectively fought and won by the older and wealthier classes? Not all older people are wealthier, I know, but there are inter-generational as well as class aspects to this divide. Follow me below the fold if you feel this hypothesis merits further exploration and elucidation.

front-paged by afew

Seeking the New Normal

by dvx Mon Apr 1st, 2013 at 04:39:07 PM EST

[Hoisted from today's Newsroom]

Today's bit of conventional climate wisdom:

A glorious winter, but the Alps face a warmer world – bringing huge change | Environment | The Observer

From his office in the alpine ski resort of Chamonix-Mont-Blanc, meteorologist Gilles Brunot is looking out at snow-capped peaks washed with spring sunshine, resplendent under a pale blue sky.

Much of northern Europe is pining for spring, but nobody here is complaining about the weather. Why would they? First, a surprisingly clement autumn brought the hikers and climbers in droves. Then, seamlessly, winter arrived with early snowfall in November that has been topped up regularly until last week, delighting the skiers.

Fabulous for the tourist industry, of course. And as the snow accumulates on the ski slopes, 2013 hardly seems to be adding to the body of evidence of global warming. Deep in the Alps, however, scientists are observing, monitoring and reporting the effects of changing climate patterns: there may not be many more golden years like this.

Brunot has only to click on his computer to generate the information that gives cause for concern. Up springs a graph that charts average temperatures in the alpine town of Annecy since the late 19th century. Since 1987 there has been no average annual temperature below 9.6C. Today the average is around 10.8C. A yellow line showing the rise in average temperatures rises as steeply as one of the Mont Blanc peaks outside the scientist's window.

But if that's so, how does this fit in:

Luxembourg next?

by DoDo Sun Mar 31st, 2013 at 01:04:22 PM EST

[Hoisted from the weekend Newsroom]

In the Troika narrative about the crisis in Greece and other bail-out victims, all talk was about the responsibility of the state in paying its debts (including ones taken over from the provate sector). The same applied when Iceland was expected to adopt Icesave. In the Cyprus crisis however, they suddenly discovered investor responsibility. This could happen because (1) Cyprus was a tax haven, and (2) a lot of those investors weren't "ours", but included easily demonisable Russian investors.

However, once investor responsibility is on the table against a tax haven, it could be against other tax havens. So it's noteworthy that, according to the Cypriot government, the only fellow member state which spoke up in their favout at the Eurogroup meeting was Luxembourg (a country with even more Russian capital than Cyprus, according to the former governor of the Central Bank of Cyprus). And when Dutch finance minister Jeroen Dijsselbloem threatened to use the Cyprus bail-in as model in future crises, it was his Luxembourgese counterpart who warned against an investor flight from Europe. Concerned?

All of Draghi's Horses

by Migeru Sat Mar 30th, 2013 at 11:36:43 AM EST

I have an analysis piece up on Eurointelligence: thoughts on banking union and the Cyprus 'solution' (28.03.2013)

"The central bank defends the payment system every day, every hour, every minute." Scott Fullwiler calls this "the fundamental truth of central bank operations" and I will call it the essence of monetary union.

...

In sum, the case seems compelling for a Eurozone-wide clearing system, liquidity provision, deposit insurance, banking regulation and supervision, and a special resolution scheme for banks. The case is underpinned by the necessity to provide a unified and efficient payments system for the currency area, and the need to ensure its safety and defend its integrity. Arguments against joint supervision hinder the Central bank in distinguishing between illiquid and insolvent institutions. Polemics against joint deposit insurance actually foster cross-border deposit runs. And rhetoric against Target2 undermines the integrity of the payments and clearing system itself.

...

In conclusion, even if an immediate bank run due to Cyprus is avoided in the rest of the Eurozone, will all of Draghi's horses and all of Draghi's men be able to put together the broken egg of public confidence in deposit insurance, and more generally in the Eurozone's commitment to the integrity of its payments system?

front-paged by afew

Giant Leap Back (Cyprus Bailout Thread No. 7)

by afew Thu Mar 28th, 2013 at 03:01:23 AM EST

BBC News - Cyprus banks to reopen under tight security

Security is tight in Cyprus as banks prepare to reopen nearly two weeks after closing while a controversial bailout was negotiated.

Armed police were on guard as lorries said to be loaded with cash arrived at the central bank on Wednesday night.

Small countries feel the onset of poverty quickly. In Cyprus, now poised to become one of the biggest experiments in global financial history, people know that penury is just around the corner.

Waiting for poverty to strike is no game. It makes ordinary men and women helpless, desperate and scared. "If you look at it mathematically, there is no way out: we will just never be able to repay our bills to the EU and IMF," said Haris Christou, one young Cypriot speaking for his compatriots. "Am I afraid? Of course I am afraid. Everybody knows everything in Cyprus is going to get bad, really bad. And nobody knows where exactly we are headed." (...) "Countries don't normally go backwards," said Leda Georgiadou, a woman in her 50s. "With this rescue we have taken a giant leap back into the dark."

Press Ethics

by ceebs Wed Mar 27th, 2013 at 06:35:16 AM EST

Over the past several months we have had the [UK] press complaining bitterly about the introduction of new regulation. This is both unnecessary and unwanted in their eyes. Depending on the argument deployed, either an outrageous attack on investigative journalism to hide the crimes and misdemeanours of the rich and powerful (which several investigative journalists have said is untrue); or, if you follow their other line of reasoning, entirely unnecessary because due to the loss of readership, there will be no papers in ten years. So any legislation will be a waste of time, and we may as well not bother.

This second argument has a particular, painful moral flaw. As the readership numbers have been falling, the tabloid press has slowly shifted its story-generated attack from those with cash and and expensive publicity machine to those without. Simply put it is easier and cheaper to train their sights on those unable, unwilling, or too far out of their depth to fight back.

Rail News Blogging #22

by DoDo Tue Mar 26th, 2013 at 09:54:09 AM EST

Concluding the round-up of news since December, this time, the themes are financing, new rolling stock with technological novelties, the use of renewables, and various conflicts and problems.

Let's start with financing. London is currently building Crossrail, a new rapid transit system with an east-west tunnelled central artery which shall create a faster connection between suburban networks into various terminus stations and relieve parallel Underground lines (comparable to Paris's RER but integrated with existing services with less consequence). Crossrail services are to be operated with new trains, altogether 600 cars. The sizeable price tag of £1 billion was seen as an opportunity to launch another experiment into the involvement of private capital: last year the UK government initiated a procurement scheme in which train manufacturers were to finance the trains themselves and then let operator Transport for London lease them. But, as was often the case with PPP infrastructure projects, private investors faced risk premiums and had greater difficulty gathering capital on financial markets, leading to delays. Then on 1 March, amazingly, the government pulled the plug on the idea and reverted to procurement from public sources only, openly admitting that this method ensures speedier delivery (my emphasis):

The Government, the Mayor of London and Transport for London have today announced a move to a fully publicly funded procurement for the delivery of the new fleet of trains and maintenance facilities for Crossrail thereby helping to ensure that passenger services can open as scheduled in late 2018. This change was proposed by the Mayor of London and agreed by the Secretary of State, Patrick McLoughlin.

Sometimes Boris Johnson makes sense.

The new economics of the power sector

by Jerome a Paris Mon Mar 25th, 2013 at 10:12:17 AM EST

A lot of strange things have been happening in the power sector lately, from negative prices, to utilities closing down brand new power plants and, naturally, action in various places to cut support for renewable energy (done in Spain and even mooted in Germany).

I've long described renewable energy producers as a price takers (i.e., they don't influence market prices in the short term and have to "take" market prices as set by other factors), but we are getting to the point, in a number of places, where the penetration of renewable energy is such that it has a real macroeconomic impact on the prices of electricity, and thus on the way power markets run. There's also been a big political battle brewing, as renewables "subsidies" are targeted by governments at a time of austerity in Europe, egged on by hardly disinterested utilities.

It is worth deconstructing what's been happening.

Saved By The Bell? (Cyprus Bail-in thread No. 6)

by afew Mon Mar 25th, 2013 at 04:51:31 AM EST

Last-minute Cyprus deal to close bank, force losses | Reuters

(Reuters) - Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout.

The agreement came hours before a deadline to avert a collapse of the banking system in fraught negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund.

Freedom of press

by DoDo Fri Mar 22nd, 2013 at 04:59:57 PM EST

[Hoisted from the weekend Newsroom]

As regular ET readers will remember, last year, independent Greek journalist Kostas Vaxevanis was arrested for publishing a list of tax dodgers which the Greek government got from IMF boss Lagarde but hid. The journalist was acquitted in the outrageous trial for telling the truth, but the higher instance ordered a re-trial. The verdict in this is due in a few months. Vaxevanis now has an op-ed in The Guardian, in which he emphasizes that Greece's mainstream media is not functioning as a check on the powers-that-be while those who publish actual facts are persecuted. He closes with a bold announcement regarding his trial:

On 6 June I will stand trial again for the disclosure of the Lagarde list. I don't know what the outcome of the trial will be. I want to state that if I am going to be convicted I will not appeal but I will ask to be put in jail. I want to be a journalist in a country that is not afraid of the truth. I care for the truth of the people not that of a caste of corrupted politicians and businessmen. I do not want the people of my country to read foreign newspapers to learn what happened in their own country, as it was happening during the junta. I don't want myself or any other journalist to [be] in danger, because of what I reveal. I don't want to be in danger of being presented as a "suspicious" journalist, just for stating self-evident facts, by the very propagandists of the power structure that brought my country on the edge. I want to be able to say what I think without the risk of my physical or psychological damage.

Meanwhile, at the other end of the EU, in the UK, where a sizeable segment of the mainstream press was caught red-handed in employing criminal information-gathering methods, a Conservative MEP blogging for The Daily Telegraph is moaning about planned press regulation supposedly killing the freedom to incite hatred against immigrants and Europe and taxes on the rich – by comparison to French media. A French journalist hit back also on the pages of The Guardian.

Establishing Credibility (Cyprus bail-in thread no. 5)

by Migeru Fri Mar 22nd, 2013 at 06:02:39 AM EST

eKathimerini: Merkel rejects use of pension funds for Cyprus solidarity fund (March 22, 2013)

Merkel was also quoted by two MPs from her centre-right coalition as saying that debt sustainability and the restructuring of its banks must be core elements of any new Cyprus deal, which she called a matter of «credibility», Reuters reported.

The point that they reiterate over and over is that it is necessary to establish the credibility of NATO. Now, all we have to do is translate from Newspeak. What does "credibility of NATO" mean? Are they concerned with the credibility of Italy or the credibility of Belgium? Obviously not. They are concerned with the credibility of the United States. Now, what does the "credibility of the United States" mean? Well, you can ask any Mafia don, and he'll explain it. So, suppose some Mafia don is running some area in Chicago, what does he mean by "credibility"? He means that you have got to show people that they better be obedient or else. That's credibility.

• Annoyed Cyprus has not contacted Troika for days
• It’s not acceptable Cyprus testing Europe

Projection? (Cyprus bail-in thread no. 4)

by Migeru Thu Mar 21st, 2013 at 04:41:03 AM EST

Eurointelligence: More Cyprus commentary (March 21, 2013)

The usually moderate Günther Nonnenmacher of Frankfurter Allgemeine says Cyprus’ recourse to Moscow constituted an unprecedented act of a lack of solidarity. The whole eurozone rescue strategy has now reached a breaking point, he writes in a front-page editorial. The issue is not financial, but political. The government and parliament of Cyprus are engaging in an act of blackmail, the kind of which was also discussed, and rejected, by Greece. If Cyprus got away with this, the certain outcome would be a domino effect. But the single most appalling aspect of the Cypriot strategy is the government’s decision to go to Moscow, cap in hand. This constitutes an aggressive lack of solidarity with the rest of Europe.

IOKIYAR - But Is That All Bad?

by dvx Wed Mar 20th, 2013 at 08:33:01 PM EST

[Hoisted from today's Newsroom]

For those of you who enjoy hypocrisy as much as I do:

Conservatives Outraged About Mountaintop Removal in Tennessee... By Chinese Company | Mother Jones

What's it take to get conservatives in Tennessee fired up about blowing up mountains? China, apparently.

On Tuesday, the Tennessee Conservative Union, which bills itself as the state's "largest and oldest conservative group," started running anti-mountaintop removal coal mining ads on television throughout the state. Their complaint? The Chinese company Guizhou Guochuang Energy Holding Group announced last year that it is acquiring Triple H Coal Mining, which does mountaintop removal. The Tennessee Conservative Union ad warns that they will become "the first state in our great nation to permit the red Chinese to destroy our mountains and take our coal."

"We're proud that Tennessee is a red state," the ad concludes. "But just how red are we willing to go?"

The ad comes off as anti-China, but it also offers a critique of mountaintop removal coal mining in general, which is the big news here. The ad comes just a day before committees in both the state Senate and House are expected to vote on the Scenic Vistas Protection Act, a bill activists have been trying to get passed in the state for six years. The measure would make it illegal to blow up mountaintops to mine coal. Supporters are taking TCU's support for the bill as a sign that it might gain more traction this year.

Obviously, mining-top removal is OK if you're a Republican (IOKIYAR), but not if you're a fellow traveler from, say China.

But if blatant, racially-driven hypocrisy is what it takes to make people notice that the environment is worth preserving, is that all bad?

Or is it just another indication that we're going to hell in a handbasket?

An ill wind in Budapest

by DoDo Wed Mar 20th, 2013 at 05:37:28 AM EST

15 March is the day of the 1848 Revolution in Hungary, and (along with 23 October, day of the 1956 Revolution) a day of political rallies in recent years. On 15 March this year, however, a brutal cold spell with strong winds led to the cancellation of all protests. Only the main opposition event was then held two days later (yesterday on Sunday), with at most 20% of the attendance in October.

The topic du jour was the latest modification of the constitution, which made even Barroso's European Commission and fellow EPP national governments (whose only true bother a year ago was the threat to central bank independence) realise that Hungary's right-populist government's aim is to eliminate all checks & balances (now done) and cement its power permanently. The situation aint' rosy on other fronts, either: austerity measures spread misery while recession is deepening, and the democratic opposition is a mess. But I wonder how long it will take for government propaganda to produce blowback, especially considering the latest gaffes in connection with the cold spell.

[editor's note, by Migeru] Bumped ahead of Cyprus 3

But they are mad!? (Cyprus bail-in thread no. 3)

by Migeru Wed Mar 20th, 2013 at 05:32:06 AM EST

Eurointelligence: European Commission redefines deposit insurance (March 20, 2013)

This is hugely damaging. According to eKathimerini, a European Commission spokesman explained on Tuesday that deposit guarantees are only operative "in the event of a bank failure" and that a deposit levy is "a fiscal measure applied to all bank accounts", not to those in failing banks. Reuters quotes Klaas Knots, president of the Dutch central bank, as saying that bank customers should get used to the idea of this type of bail-in, at least for as long as the eurozone has no common bank resolution policies.

Since they are now using the levies as a protection against bankruptcy, the result is that banks do not go bankrupt because the insured depositors pay through a levy. Through this legalistic reasoning, the Commission has single-handedly voided all deposit insurance through the EU, or rather rendered it pointless. It means that all deposits, in all EU states, should be considered uninsured.

Cyprus bail-in thread (2)

by Jerome a Paris Tue Mar 19th, 2013 at 04:55:46 AM EST

Writing in El Pais, economist Jose Carlos Diez calls the Cyprus bail-in "an economic aberration" which "confirms there's no intelligent life in Europe". Paraphrasing Einstein, Diez says "two things are infinite: the cost of corralito and human stupidity”. The expression Corralito comes from Argentin[]a, where the government imposed Draconian measures in 2001 to stop a bank run. He also makes the point that the only country that put bondholders ahead of depositors in the 1980s was Romania, and Ceausescu ended up before a firing squad.

News and Views

 19 Jun 2013

by ceebs - Jun 18, 57 comments

Your take on today's news media

 18 June 2013

by afew - Jun 17, 129 comments

Your take on today's news media

More news roundups

 Wednesday Open Thread

by afew - Jun 19, 3 comments

Hang out here

 Tuesday Open Thread

by afew - Jun 18, 23 comments

Roll up, roll up

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 The Curious Case of Crafty Keg

by Helen - May 20, 15 comments

The Campaign for Real Ale (CAMRA) is one of the most successful consumer organisations in the world.

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