'Golden goodbye' package after just four years for new Business Secretary as questions hang over relationship with Russian oligarch

Peter Mandelson will pick up a £1m "golden goodbye" package following his departure from Brussels, despite walking out after serving only four years as Britain's European Commissioner.

The new Business Secretary will receive a £104,000 salary as a minister in the House of Lords, and qualifies for a total of £234,000 in "transitional payments" over the next three years to help him readjust to life outside the European Commission.

But he is also guaranteed an EU pension when he reaches 65 - in 2018 - starting at £31,000 a year and rising in line with the cost of living. The overall cost of funding such a pension is put at £750,000.

While most Britons prepare to tighten their belts as the credit crunch continues to bite, the new Cabinet minister - who will become Lord Mandelson of Foy and Hartlepool next week - can look forward to an additional annual payment of £78,000 for the next three years.

A meeting of ex-Soviet states was finalized in Kyrgyzstan on Friday as Russian President Dmitry Medvedev assailed critics of Russia's pullout from Georgia and endorsed an expanded G8 summit to include developing nations.

Medvedev also used the two-day summit to argue for an EU-style platform of cooperation within the Commonwealth of Independent States (CIS), whose members are all ex-USSR satellites.

"Considering the crisis the international financial system is going through, it's necessary to take really effective measures to protect markets and ensure their future stability," Medvedev said Thursday, praising the example of European Union cooperation in the face of financial crisis.

"We need such coordination if we want to stay competitive and overcome the consequences of the financial crisis with minimal losses," he told journalists alongside the summit host, Kyrgyz President Kurmanbek Bakiyev.

European Union officials, Euro-MPs and high-level diplomatic contacts are stepping up the pressure on an increasingly isolated Ireland to hold a second referendum on the Lisbon Treaty.

Brian Cowen, Ireland's Prime Minister, must explain to a summit of Europe's leaders next Wednesday how he is planning to resuscitate the EU Treaty, which was rejected by Irish voters in June.

While the final decision will be taken in December, Mr Cowen will hear demands from France and Germany that a second referendum take place as early as March 2009, before European elections.

Brussels diplomats have warned Ireland that it is isolated after angering other EU countries, such as Britain, by taking controversial financial crisis measures that benefited Irish banks while "dumping on others".

"The economy might be going into freefall and the Irish really did not help things. Sympathy for their difficulties is running out," said a diplomat.

MOSCOW: LAST weekend, Moscow blocked off two streets to make way for a small Communist demonstration. It was a march in memory of about 150 people who were killed in October 1993, when hard-line deputies in the Parliament tried to wrest power from Boris Yeltsin and halt the lurching course he was steering toward constitutional democracy and capitalism.

The whole, vast mass of Russia seemed to teeter for a few days. Sympathizers flocked to Moscow's White House, where the deputies were barricaded, and sat watch around bonfires, full of passion for the Soviet Union and the Communist Party. It didn't seem impossible that the gains of five years would vanish overnight.

As the world's financial markets continue to struggle amid huge losses and emergency measures, Malta has been graded as having the world's 10th soundest banking system, a survey by the World Economic Forum has found.

Canada was rated first closely followed by Sweden, Luxembourg and Australia.

But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a £50 billion ($86.5 billion) pledge last week by the UK government to bolster bank balance sheets.

The United States, where some of Wall Street's biggest financial names have collapsed in recent weeks, rated only 40, just behind Germany at 39, and smaller States such as Barbados, Estonia and even Namibia, in southern Africa.

Russia has test-fired another three intercontinental ballistic missiles, a day after claiming a distance record for a missile fired from a submarine.

President Dmitri Medvedev, who watched two of the launches, said they proved Russia's missile defences were strong.

Two new systems were being developed, he added, giving no details.

Two of the latest launches took place at either end of the country, one from the Barents Sea, east of Norway, and the other from north of Japan.

A third was watched on land in north-west Russia by Mr Medvedev, who promised further launches in future.

BUDAPEST, Oct 11 (Reuters) - Hungarian Prime Minister Ferenc Gyurcsany proposed on Saturday freezing real wages until the middle of next year due to risks posed by the global financial crisis. "Let's consider that we go along with the current wages from Jan. 1 (2009), maintaining real wages, and there will be a wage hike only from July 1," he told an extraordinary congress of his Socialist Party. The congress met to discuss the political situation as the Socialists have been ruling in minority since April and seek parliament support for the key tax and budget bills amid the global crisis which is seen cutting economic growth. The government announced measures on Friday to shore up steep price falls in the country's financial markets, including cuts in state debt issuance and the redrafting of the 2008 and 2009 budgets, aiming at lower than earlier planned deficits. Gyurcsany said deep cuts in the deficit since 2006 reduced Hungary's vulnerability to the global crisis and the banking system was strong, but further measures were needed to fend off the financial and real economic impacts of the crisis. "In the past days, an attack hit Hungary (markets)," he said. "In these days we are taking concrete measures, we strengthen Hungary's defence ability with a series of measures."

Austria's right-wing populist Alliance for the Future of Austria party named a new head. But experts say the change in leadership probably won't lead to a political shake-up in the Austrian right in the near future.

The Alliance for the Future of Austria named Stefan Petzner as it new leader on Sunday, Oct. 12, following the death of Joerg Haider on Saturday, the Austrian news agency (APA) reported. Petzner, 27, had been Haider's spokesman since 2004.

 

Haider died in a car accident early on Saturday near Klagenfurt, capital of Carinthia, when the car he was driving veered off the road after passing another vehicle at 142 km per hour (88 mph), twice the legal speed limit, and hit a number of obstacles, including a fence's concrete foundation, state prosecutors said Sunday.

 

Hundreds of people held prayers, lit candles and placed wreaths on Sunday at government headquarters in the regional capital of Klagenfurt, where Haider had been governor, and at the accident site.

 

The Government will do "anything it takes" to prevent the financial system collapsing, including taking more than 50 per cent stakes in banks, sources said.

The radical proposals go significantly further than Gordon Brown's original bail-out unveiled last week. It will spark suspicions that the Prime Minister may have to take more drastic action, even going so far as to nationalise the entire banking system.

The development came after the Group of Seven (G7) leading finance ministers pledged to follow Britain's lead and part-nationalise vast sections of the Western banking system in their latest effort to bring the crisis to a close.

At their summit in Washington the G7 promised to buy shares in struggling banks if necessary in the coming months. With shares in major markets plunging by a fifth last week, ministers hope that the commitment will boost confidence in the coming week.

Germany is preparing a bail-out that permits the recapitalization of banks with billions of euros in cash injections, according to news reports. The IMF warned of the growing possibility of a global finance "meltdown."

Germany is expected to guarantee interbank loans for up to several hundred billion euros and bail out banks in exchange for shares in the institution, similar to the partial nationalization plan announced in Britain this week.

 

"This is about providing the banks with sufficient capital," Merkel told reporters. "I don't rule out that there will be capital injections."

 

Chancellor Angela Merkel has said on Saturday, Oct. 11, that she will sign off with fellow euro zone leaders Sunday before going into the rescue plan's details. Merkel's Cabinet is set to approve the plan on Monday, the Web site of the German business daily Handelsblatt reported.

German Chancellor Merkel and French President Sarkozy discussed the option of partially nationalizing European banks ahead of a meeting of euro zone leaders. Berlin is also reportedly set to present its own rescue deal.

The pair met at the home village and final resting place of General Charles de Gaulle on Saturday, Oct. 11, one day before a Paris summit on the global credit crisis of the leaders of all 15 members of the euro zone.

 

France and Germany have "exactly the same view" on the financial crisis, Sarkozy told reporters.

 

"We have prepared a certain number of decisions that we will submit to our partners in the presence of the president of the European Commission and the governor of the (European) central bank," he said.  "All decisions, all preparations and all analyses, we're making together."

Members of the IMF have backed a promise by the world's seven leading economies to do all they can to curb the raging global market turmoil as Euro zone countries meet Sunday to announce new rescue plans for banks.

At a meeting on Saturday in Washington, the IMF's 185 member countries also pushed for more coordination with developing nations which are beginning to feel the effects of the global credit crunch.

 

With global stock markets plunging and access to credit severely curbed across the globe, tackling the crisis required "exceptional vigilance, coordination and readiness to take bold action," a statement from the International Monetary and Financial Committee (IMFC), the IMF's policy-guiding body, read.

Chancellor Angela Merkel sought backing Sunday from skeptical Germans for a costly bank rescue plan. Berlin's bail-out package could cost German taxpayers billions of euros.

In remarks to a Sunday newspaper, Bild am Sonntag, Merkel said, "Only action by the state can restore necessary confidence now."

 

Before a meeting Sunday, Oct. 12, in Paris of the 15 euro zone leaders, she said that the intervention had to be internationally coordinated.

 

"We are not doing this for the sake of the banks but in the interests of the people," she told the mass-market Bild.

 

As in the United States, the German left has grumbled at a rescue likely to cost tens of billions of euros, saying it comes only a few years after a reduction in the scale of welfare handouts to the German poor.

 

PARIS: European financial and political leaders agreed late Sunday to a plan that would inject billions of euros into their banks in a bid to restore confidence to the teetering financial system.

Following the British rescue package announced last week, the countries pledged to take equity stakes in distressed banks and vowed to guarantee bank lending for periods up to five years.

"We are committed in all European states to recapitalize banks if we establish a threat to solvency and a risk to the economy," the Belgian finance minister, Didier Reynders, said after the leaders met. "The goal is to kick-start the interbank lending market."

Reynders said the European Central Bank had also committed to helping to unfreeze the commercial paper market, where companies conduct short-term borrowing.

Gordon Brown arrived at the Elysee Palace in Paris today for the latest international leg of his campaign to promote a British bank bailout plan among world leaders.

Despite the UK not being part of the euro, the Prime Minister met President Nicolas Sarkozy of France ahead of a summit of the 15 eurozone members and will brief them on the plan in which the Government will inject billions of pounds into struggling banks in return for preferential shares.

The plan is being looked upon favourably by Western leaders - including the Bush Administration - as a way of injecting confidence and liquidity into the financial system whilst retaining a politically favourable stake for the taxpayer. Europe also looks set to follow suit.

This weekend exact details began to emerge about how much the British Government will inject into the top UK banks.

Europe's leaders meeting at an economic crisis summit in Paris have pledged that no major financial institution will be allowed to collapse.

They also pledged to guarantee loans between banks on a temporary basis, in order to address the liquidity crisis.

The reluctance of banks to lend to one another has been a key problem of the financial crisis sweeping the globe.

World governments have been racing this weekend to throw banks a lifeline before markets reopen on Monday.

French President Nicolas Sarkozy - the current European Union head - said leaders had agreed a framework in which individual countries would be able to inject capital into their own banks by means of preference shares.

Brazilian President Lula da Silva said that emerging market nations like Brazil must have a strong say in developing strict international rules for financial institutions which will help control the anarchy hitting the world economy.

Brazil and other developing countries "need to learn from this crisis to construct a new world economic order" Lula da Silva said in a speech to Brazilian and US trade investment forum attended by US Commerce Secretary Carlos Gutierrez.

Lula da Silva demanded tighter regulations for high risk investments in rich nations that he and many other leaders of developing market nations blame for eroding their economies after they spent decades adopting US backed reforms.

New rules are crucial to "control the anarchy that is hitting the world economy" said the Brazilian president, laying out harsh criticism for bankers who made risky bets on mortgage-backed securities that went bad.

"What happened is that some people acted like they were teenagers with failing grades on their report cards, wanting to hide them from their parents" he underlined.

Central banks around the planet must adopt new rules, and governments must make sure financial institutions comply or are punished to prevent another debacle like the US born crisis, said Lula da Silva.

The market is not self-correcting, it's self-serving.

From FundaMental Transformation

In the long run, we're all dead. John Maynard Keynes

Baltic Index Collapsing?
I believe many of my readers especially those in the industry are seeing a slide off never before experienced in current times. From a high of 11,000 to the Baltic Dry Index trying to hang on to 2200.

Obviously the bigger picture of economic crisis is the big picture, yet the speed of the decline is extremely disturbing to say the least. The last time the Baltic was at this levels, Oil was not at USD 80 per barrel.

(...)

Now the one big real fear is that the Baltic is getting squeeze even further is that Traders are increasing finding it tougher to trade commodities and goods because of the increasing reluctance by banks to issue Letters of Credit. Of course, if they decide not to honor existing letters of credit, then all hell breaks loose.

President Bush is down to his final 100 days in office as of Sunday. Don't expect a quiet fade into the Texas night. The bleakest economic downturn in decades has changed the dynamic drastically, keeping Bush and his financial team in activist mode to the end.

While the powerful heads of the Treasury Department and the Federal Reserve keep making radical moves, no one elected them. Bush is the one charged with reassuring the nation that an abysmal economic period will give way to better days, even if he is long gone from Washington by the time that happens. ...

"It looks like I'm going to have a lot of work to do between today and when the new president takes office," Bush said this past week. ...

 "There will be a desire to work every day on this bailout, because they will want to have everything set before the next guy comes in," said Grover Norquist, president of Americans for Tax Reform. A conservative friend of the administration but a critic of the taxpayer-funded $700 billion plan, Norquist said: "If you chose to give the treasury secretary billions of dollars to play with, why would you want to hand it over to the next guy?"

As more countries become enveloped by the financial pandemic that began in the United States, some in the Southeast Asian nation of Malaysia are warily watching the events with a dose of schadenfreude.

After all, it was just a decade ago that the commodities-rich exporter was lambasted for ignoring the blueprint world leaders and the International Monetary Fund had urged.

Instead of taking tens of billions of dollars in aid from the IMF, Malaysia did what was viewed then as a radical move: it self-prescribed its recovery. It stopped outflows of capital for one year, stabilized its volatile currency rate by fixing it to the U.S. dollar and refused to rein in spending.

"We were criticized by everybody but we believed strongly we only had the people of Malaysia to answer to," said former Finance Minister Daim Zainuddin yesterday in a phone interview from Kuala Lumpur. "We had seen what had happened with African nations that had taken aid from the IMF; they never are freed."

CAIRO, Egypt - America's opponents in the Middle East are gloating over the financial meltdown in the United States, painting it as divine retribution for past misdeeds against Muslims and the last gasps of a dying empire.

Hardline clerics across the region and groups like Hamas and al-Qaida took delight in America's financial woes even though it has not left the region unscathed, with stock markets across the Middle East dropping more than 10 percent last week.

"We are witnessing the collapse of the American Empire," Hamas prime minister in the Gaza Strip, Ismail Haniyeh, told worshippers during Friday prayers. "What's going on in America is a result of the violation of the rights of people in Palestine, Somalia, Iraq, Afghanistan and Muslims around the world."

Iranian President Mahmoud Ahmadinejad said Tuesday that America was paying the price for exporting inflation and deficits to the rest of the world.

AT the turn of the 20th century, toward the end of a brutal and surprisingly difficult victory in the Second Boer War, the people of Britain began to contemplate the possibility that theirs was a nation in decline. They worried that London's big financial sector was draining resources from the industrial economy and wondered whether Britain's schools were inadequate. In 1905, a new book -- a fictional history, set in the year 2005 -- appeared under the title, "The Decline and Fall of the British Empire."

The crisis of confidence led to a sharp political reaction. In the 1906 election, the Liberals ousted the Conservatives in a landslide and ushered in an era of reform. But it did not stave off a slide from economic or political prominence. Within four decades, a much larger country, across an ocean to the west, would clearly supplant Britain as the world's dominant power.

The United States of today and Britain of 1905 are certainly more different than they are similar. Yet the financial shocks of the past several weeks -- coming on top of an already weak economy and an unpopular war -- have created their own crisis of national confidence.

On Friday, as the stock market finished one of its worst weeks by falling yet again, to roughly half of its level just one year ago, the Gallup Poll reported that Americans were substantially more pessimistic about the economy than they have been in more than two decades of polling. Nearly 60 percent say the economy is in poor shape, and 90 percent say it's still getting worse.

UNITED NATIONS: "Icelandic Pancakes Folded with Jam of Mixed Berries and Whipped Cream" read the stylish calligraphy on a little white card atop the dessert buffet in the UN Delegates Dining Room.

Iceland is locked in a tight race with Austria and Turkey for two rotating seats on the Security Council that are reserved for the mostly European bloc, and the luncheon spread last week was part of its charm offensive. The lobbying effort gained added urgency in tandem with daily headlines trumpeting Iceland's bankruptcy.

Would two buffet tables groaning with delicacies exclusively from Iceland persuade any of the 192 member states that can vote this Friday that Iceland deserves their support? "Well, they have to try to convince people with pancakes, because they don't have any money left," said one European diplomat.

Electric moments have become rarer around the UN Secretariat in recent years, but a hotly contested Security Council vote still creates buzz. Even as members grumble about the declining relevancy of a Security Council designed circa World War II, more and more nations seek to wield the influence gained by winning a seat at the council's iconic horseshoe-shaped table.

U.S. nuked Iraq during Gulf War - report
An American war veteran has claimed that the U.S. dropped a nuclear bomb during the last days of the first Gulf War in Iraq in 1991.

Jim Brown, a mechanic in the U.S. Army's 10th Mountain Division at the time, told Italian channel RaiNews24 that coalition forces dropped a 5-kilotonne nuclear bomb in a deserted area near the city of Basra.

A TALE of skulduggery and intrigue has emerged in France, where the former intelligence chief is suspected of spying on President Nicolas Sarkozy's wives and lovers as part of an effort to smear him.

Evidence that the telephone of Marie-Dominique Culioli, Sarkozy's first wife, had been bugged even after their separation was one of the secrets leaked last week from the private notebooks of Yves Bertrand, head of the Renseignements Généraux, or secret police, for 12 years until 2004.

The revelations have cast an unusual light on the grubby underbelly of French politics and the extent to which the intelligence service has been used as a tool for settling personal vendettas instead of defending state interests.

In January 2003, Bertrand filled two pages of his notebook with an account of how "Sarko", as he called the then interior minister, had left Culioli in the late 1980s for Cécilia, who became his second wife in 1996.

Austrian far-right politician Joerg Haider was driving at twice the speed limit when he died in a crash early on Saturday, court officials have said.

Mr Haider, 58, was travelling alone at 142km/h (88mph) in a 70km/h zone when his Volkswagen Phaeton V6 crashed.

The accident occurred south of Klagenfurt, the capital of Carinthia, where he was the provincial governor.

He was leader of the Alliance for Austria's Future, and was known for his anti-immigration and anti-EU policies.

Mr Haider had crashed shortly after leaving a nightclub.

However, prosecutor Gottfried Kranza would not say whether Mr Haider's body had tested positive for alcohol.

The European Commission's decision to change the name of the EU's Global Monitoring for Environment and Security (GMES) program to reflect the German spelling of "Copernicus" has angered Poles.

The move to change the spelling of the name, which reads as "Kopernik" in Polish and "Kopernikus" in German, reportedly came at the insistence of European Commission Vice President Guenter Verheugen, a German.

Poles have consequently accused the commission of Germanizing the name of the father of astronomy, Nicolas Copernicus.

But there is more to the matter than simply a few letters. Copernicus' nationality has since long been a source of argument between Germans and Poles. Viewed in Poland as one of the nation's greatest figures, Germans also consider the man to be one of their own.

Belgian Luc Costermans has broken the world blind road speed record, on an airstrip in France.

Mr Costermans topped 308.78km/h (192 mph) while driving a Lamborghini Gallardo supercar at Istres, near Marseille, in southern France.

Mr Costermans thanked his co-pilot Guillaume Roman, saying: ""I'm very, very happy. It's a team effort."

Mr Costermans took the record from Briton Mike Newman, whose BMW M5 reached 268km/h three years ago.

MANILA, Philippines--Homes that consume a mere 15 kilowatt-hours per square meter per year, a car-less area that gives priority to bicycles and pedestrians and a green kindergarten school have made the German city of Freiburg an exceptional model for sustainable development.

While many countries merely aspire for developing sustainable projects, Freiburg leads the way as it shows the world what can be done to mitigate climate change while improving the quality of life in an urban setting.

Freiburg, like many other European cities, suffered during the Second World War when it was heavily damaged by Allied bombers. It had no industry and its biggest employer was the university, which accounted for its highly educated populace. It had very limited financial resources and as a result, the city was determined to use these resources wisely. Its goal was to make Freiburg one of the greenest cities in the world.

A Frenchman at the helm of a "flying yacht" and a kite surfer are locked in a race to become the fastest through the "wind barrier" of 50 knots - nearly 60mph.

Alex Caizergues, 29, from Marseilles, made nautical history off the coast of Namibia last week when he broke the record for wind-powered craft by keeping up a speed of 50.57 knots (about 58mph) over 500m with his kite surfboard.

A few days before that, Alain Thébault, 45, had reached 52 knots in southern France, albeit over a shorter distance that did not qualify for a record.

His craft, the Hydroptère, is a trimaran whose unusual design, he claims, gives it the acceleration of a sports car.

The destruction of the "mythical wall" of 50 knots, which Thébault compared to the sound barrier in flying, has been hailed as a great French accomplishment.

Rain storms have cost a few lives and many accidents, mainly in Andalucia and the Mediterranean coast, where they are new records ´400 liters/sq.m. in 48 hours´ in some parts.  There is flooding and property losses reported continually.

Two more tankers (Liberian, but no mention if double-hulled) are leaking fuel in Algeciras due to the weather; crews are safe.  The Tawe anchored off Gibraltar (saves docking fees), had to raise anchors in the storm due to the wind gusts and run aground 50 meters off the beach, leaking its own fuel.  I heard a reporter say it was ´not a problem because the fuel was volatile´!!!!

The Fedra, an empty 35,000 ton tanker,  lost its anchor Friday and was smashed sideways against Punta Europa, Gib, which broke it in two and has nested it on the rocks.  Its fuel is spreading to 12-14 km., unfortunately.  It seems very symbolic at this time of crisis, that it made a clean break at the towering ´command bridge´ and separated it from its ´cargo´.  Ships of state wrecks, mission acc...
http://tinyurl.com/4f3pvn  

The Earth is Unhappy for Good Reason:  This seems like the millionth reminder that if we don´t see the forest for the crisis, that if we don´t learn something now, it will chew up and spit out more than tankers, FUVs and cheap housing.  

How else do we want to be told?  


Our knowledge has surpassed our wisdom. --Charu Saxena.

The American economist Paul Krugman won the 2008 Nobel prize for economics for bringing together analysis of trade patterns and where economic activity takes place, the prize committee said on Monday.

The Royal Swedish Academy of Sciences said the prestigious 10 million crown ($1.4 million) prize recognized Mr. Krugman's formulation of a new theory to answer questions driving world-wide urbanization.

"He has thereby integrated the previously disparate research fields of international trade and economic geography," the committee said in its statement.