The association made between Romania's decision to offer citizenship for Moldovans and illegal immigration in the EU is an artifical problem, Romania's Foreign Affairs minister Teodor Baconschi declared. He said that even though the international press wrote about this issue, he prefers not to consider it a press campaign on this matter. 

Speaking unguardedly at a lunch with ex-colleagues, senior Tory backbencher David Davis repeated a jibe that the David Cameron-Nick Clegg partnership was the "Brokeback coalition".

He said Lord Ashcroft had first suggested the comparison with the Oscar-winning film, Brokeback Mountain, about a gay relationship.

He also said the Big Society plans were "Blairite dressing", and added that the government "has a mechanism for dealing with the Liberal party, most of whom are inside the coalition. It does not have a mechanism for dealing with the Conservative party, most of whom are outside the coalition."

Financial Times  journalists overheard the exchange at the Boot and Flogger pub in London's Southwark.

A new Gallup poll shows that 62 percent of Danes want an exit date to be set for a Danish withdrawal from Afghanistan, irrespective of the situation on the ground in the country, according to Berlingske Tidende.

The poll also shows that almost 50 percent want Danish soldiers out of Afghanistan by 2014, with 20 percent accepting the end of 2014 as an exit date. Only seven percent are prepared to leave Danish soldiers in Afghanistan after 2014.

One person was killed and at least 42 others injured when a tourist train derailed in the Swiss Alps, police say.

At least 12 of the injured were said to be in a serious condition.

Most of the passengers on the Glacier Express were Japanese tourists, police said.

Three carriages came off the tracks and two tipped over in the accident, which occurred on a panoramic route between Zermatt and St Moritz.

A court in Turkey ordered on Friday the arrest, or in many cases rearrest, of 102 people, including retired military commanders suspected of plotting to overthrow Prime Minister Tayyip Erdogan's government in 2003.

This year's investigations into the alleged plot code-named Sledgehammer shocked Turkey and aggravated tensions between the AK Party government and the secularist armed forces.
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The arrests highlight a social transition in EU-membership candidate Turkey, as power shifts from traditional secular elites such as the armed forces to a new political class of conservative Muslims, epitomised by Mr Erdogan's AK Party.

The victims will sue Prime Minister Benjamin Netanyahu and Minister of Defense Ehud Barak, Minister of Foreign Affairs Abigdor Lieberman, Minister of Intelligence and Atomic Energy Dan Meridor, Minister of Strategic Affairs Moshe Yaalon, Interior Minister Eli Yishai, Minister without portfolio Benny Bergin and Israeli Navy Commander Vice Admiral Eliezer Marom.

Due to a legal reform which limited Spanish authority to cases in which the victims are nationals, the lawsuit focuses on three Spanish citizens, the plaintiffs said.

Read more...

Even Moody's downgrade of Irish government bonds on 22 July, which came hot on the heels of a 14-July downgrade of Portuguese debt, has failed to reignite the flames.

On Monday, the New York Times published a long article, which documents "how quickly investor psychology has changed." Not only are investors not withdrawing from the eurozone, it appears they are returning - a fact reflected by Greece's successful re-emergence on the debt markets with a 1.65 billion auction of six-month bonds on 13 July. The 4.65% rate of interest the Greek government will have to pay remains high, but it is barely more than the rate it had to offer two months ago, before the announcement of the country's austerity package.

Spain, which had been threatened by contagion, also staged three well-subscribed bond sales in July. Bond auctions in Portugal and Italy were equally successful. As a consequence, the European Central Bank (ECB) has been able to cut back on its government bond purchases, after having mopped up 60 billion euros of sovereign debt: a sign that the situation is returning to normal.

July 23 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said extending at least some of the tax cuts set to expire this year would help strengthen a U.S. economy still in need of stimulus and urged offsetting the move with increased revenue or lower spending.

"In the short term I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy," Bernanke said yesterday under questioning from the House Financial Services Committee's senior Republican. "There are many ways to do that. This is one way."

(Reuters) - Investors are finding themselves with a new kind of balancing act -- one in which they have to juggle with three major regions posing three significantly different circumstances.

Europe's bank stress testing, the focus of much of the past week's market debate, may have some impact on Monday but may well pale into insignificance given the most recent numbers on the broader economy.

First there is the United States, which is believed to be facing another slowdown, if not a double-dip recession.

Then there is Europe, suffering a debt crisis and austerity-bound, yet suddenly surprising everyone with an unexpected burst of economic vigor.

Thirdly, comes Asia, growing away so merrily that investors are beginning to be concerned that too much zeal will be exercised in trying to slow things down.

So where are the trillions of dollars of bad loans that the banks had on their books? They are still there. The Federal Reserve took possession temporarily of some of them as collateral for lending to the banks in an attempt to clean up the banks for their supposed" stress tests". But as of now, the trillions of dollars of underwater mortgages, CDO's and worthless credit default swaps are still on the banks books. Geithner is going to the familiar "bank in crisis" playbook and hoping that the banks can earn their way out of their solvency problems over time so the banks are continuing to slowly write off their problem loans but at a rate that will take years, if not decades, to clean up the problem.

And this is where defeat of the nomination of Elizabeth Warren becomes critical for Geithner. For Geithner's strategy to work, the banks have to find increasing sources of profitability in their business segments to balance out their annual loan loss recognition from their existing bad loans in an environment in which they continue to recognize new losses in prime residential mortgages, commercial real estate lending, sovereign debt investments, bridge loans to private equity groups, leverage buyout lending and credit card defaults.

The banks have made no secret as to where they will find this increase in cash flow. They intend to soak their small retail customers, their consumer and small business borrowers, their credit card holders and their small depositors with increased costs and fees and are continuing many of the bad mortgage practices that led to the crisis (ARM's, option pay deals, zero down payments, second mortgages, teaser rates, etc). American and Banking Market News reports this week that the rule changes in the financial reform bill may lead banks to start implementing fees that had essentially disappeared from the industry early in the new millennium, such as fees for not meeting minimum balance requirements on a checking account, or reinstituting fees for certain online banking transactions that are currently free or charging to receive a paper statement or to talk to a live teller as Bank of America's CEO has recently proposed.

Citigroup, Bank of America and 15 other bailed-out financial services companies overpaid their top executives by $1.6bn during the height of the financial ­crisis, according to a review by the White House's ­special master on Wall Street compensation.

Kenneth Feinberg, who was appointed last year by Barack Obama, president, to oversee the pay policies at the companies that received the greatest government support, began in March his latest inquiry into top executives' compensation from late 2008 to early 2009.

While the payments were legal at the time, Mr Feinberg said on Friday, they would have fallen foul of restrictions the government set for participants in its troubled asset relief programme (Tarp).

In the figure below, I show an index of eurozone real GDP, from Eurostat, with 2007 fourth quarter -- a quarter in which Europe was doing OK, but certainly not experiencing inflationary overheating -- set at 100. And I compared it with a trend assuming 2 percent annual growth in potential output, a fairly conservative assumption even for Europe. Here's what it looks like:

Eurostat, author's estimate

So a huge gap has opened up between a reasonable estimate of potential output and actual output. Even if you believe that growth in Europe has picked up since the first quarter -- and that the pickup will continue -- it will take years to close that gap.

CR Note: This series is from reader "some investor guy".

Part 1: How Large is the Outstanding Value of Sovereign Bonds?

Part 2. How Often Have Sovereign Countries Defaulted in the Past?

Part 2B: More on Historic Sovereign Default Research

Part 3. What are the Market Estimates of the Probabilities of Default?

Part 4. What are Total Estimated Losses on Sovereign Bonds Due to Default?

Part 5A. What Happens If Things Go Really Badly? $15 Trillion of Sovereign Debt in Default

In Part 5A, I showed a Really Bad scenario consistent with some very bad historic default rates for sovereign debt. That produced an estimate of $15.3 trillion of defaulted sovereign debt, with $7.5 to $10.5 trillion of losses.

In today's post, we look at the effects of sovereign default on credit default swaps, interest rate swaps and options, and currency exchange contracts.

North Korea has said it would begin a "sacred war" against the United States and South Korea at "any time necessary" in response to "reckless" military exercises by the allies.

The threat on Saturday came a day ahead of joint naval and air drills planned by the US and South Korea.

"All these war manoeuvres are nothing but outright provocations aimed to stifle the Democratic People's Republic of Korea [DPRK] by force of arms to all intents and purposes," the National Defence Commission (NDC) chaired by Kim Jong-Il, the country's leader, said in a statement.

Civil society groups based in India sent a letter to Prime Minister Manmohan Singh on Friday to  protest an upcoming state visit to the country by the head of Burma's ruling junta, Snr-Gen Than Shwe.

The letter, submitted by the Burma Center Delhi (BCD) and signed by 38 civil society organizations and 71 individuals, says that "Than Shwe does not represent the people of Burma but only the military regime. India should not work freely with the military regime."

The French Defense Ministry confirmed on Friday that it provided logistical and technical support to a Mauritanian military operation to rescue a French citizen held captive by militants linked to Al Qaeda.

US military chief Admiral Mike Mullen has arrived in Pakistan. Before his arrival, a US drone killed at least 16 people in an attack on an alleged armed Islamist camp in the South Waziristan tribal area.

The dead in the drone attack were all Islamist fighters, according to military official. South Waziristan, which is on the border with Afghanistan, was the scene of an anti-Taliban offensive last year.

Mullen is to meet Pakistan's military head General Ashfaq Kayani - the 19th time the two have met, according to Mullen's aides - as well as US officers overseeing military work with the Pakistanis.

RAMALLAH, Jul 24, 2010 (IPS) - Anger has arisen in Palestinian areas over reports that millions of tax-exempt dollars from the U.S. are being funneled towards Israel's illegal settlement building in the Palestinian West Bank -- in flagrant violation of international law.

This is happening under the nose of the U.S. administration despite its claims of support for a two-state solution and criticism of Israel's continued settlement building.

The Palestinian Authority (PA) based in Ramallah has expressed outrage. "Adhering to international law is a big step towards holding Israel accountable for its actions," PA spokesman Ghassan Khatib told IPS from the Muqata (government) headquarters in Ramallah.

"Settlements violate international law, and the United States is supposed to be sponsoring a two-state solution, yet it gives deductions for donation to the settlements," said Saeb Erekat the PA's chief negotiator.

According to a recent report in The New York Times 40 U.S. groups have raised more than 200 million dollars in tax-deductable donations for Jewish settlements in the West Bank and East Jerusalem during the last ten years. U.S. tax rules prohibit the use of charitable funds for political purposes at home or abroad.

Beijing municipal people's congress revealed this week that the Chinese capital now has 19.72 million inhabitants, growing by over 3% in the past 2 years.

Previous estimates had predicted that the city's population would swell to that level a decade later than it has. According to the guidelines regarding Beijing's development between 2004 and 2020 set by the State Council, the number of permanent residents living in capital should have been capped below 18 million until the end of 2020.

However, a recently released report from the population investigation and research team within the people's congress shows that by the end of 2009, approximately 12.46 million people in the capital held a Beijing "hukou" (permanent residence). An additional 7.26 million inhabitants were migrant workers who had been living in the city for more than half a year and who are therefore also classified as permanent residents.
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Natural birth contributed 482,000 extra people during the past four years while the jump in the floating population accounted for 1.52 million additional inhabitants.

Agencias Bogotá- The Colombian Minister of Defense, Gabriel Silva, assured Saturday that the number of FARC guerillas has been reduced to 8,000 members from the 20,000 it had in the year 2002.

Venezuela - On Saturday President Hugo Chavez read a letter from a highly credible source within his government which warns that "events were about to unfold" within the country. The missive, which contained some encrypted details, speaks of initial plans of execution together with a military operation that has accelerated. "Mauricio is the  objective, and the other is the defeat of the government." They will pursue this from the north in a combined operation with two objectives but they have been unable to enter Caracas, hence they are hunting outside of Caracas. They are trying to neutralize the Armed Forces and are incorporating retired military people within their ranks.  Tell Mauricio to take this information seriously, read Chavez.

From his prison cell in Bizerte (65km north of Tunis), The Tunisian prisoner Ramzi Bettibi managed to smuggle a very alarming letter that found its way on to the Internet (available in French). Ramzi is serving a four-year sentence at Bizerte for copying, onto a forum board he moderated, an online statement from a group threatening terror attacks if former Israeli prime minister Ariel Sharon attended the World Summit on the Information Society (WSIS) that was held in Tunisia in 2005. Ramzi Bettibi was arrested on 15 March 2005 at the internet café where he worked. In prison he is frequently subjected to torture, which the authorities hope will make him collaborate with the State Security services. "Bettibi should be freed because the government never proved that he had a criminal intent to threaten others or to incite violence," said Sarah Leah Whitson, director of the Middle East and North Africa division at Human Rights Watch in a statement published last year. "Under these circumstances, cutting and pasting on the Internet should not be a crime," she added.

The destruction of crops has always been a considerable problem. In particular, rice farmers of South East Asia are directly affected by heavy floods and damaging salt contamination every year, losing large amounts of harvest. Floods in this region are a direct result of torrential rains and overflowing rivers.

At the forefront of research and development into newer, stronger crops that might resist such damage are the CGI (Clinton Global Initiative) and the IRRI (International Rice Research Institute) - the duo plans to provide a more sustainable crop, that would be unaffected by such flooding.

In a news release entitled "IRRI-bred rice varieties for the Philippines," the IRRI demonstrates three innovative newly tested (yet to be distributed) rice crops: salt-tolerant rice, flood-tolerant rice, and drought tolerant rice.

BARCELONA, Jul 22, 2010 (Tierramérica) - Plagued by Spain's economic recession and subsidy cuts, renewable energy businesses are following the sun and wind to Latin America in search of profits.

In 2009, the wind energy companies of the Madrid-based AEE (Asociación Empresarial Eólica) reached 1,274 megawatts installed capacity in Latin America. At the head of the list was Mexico (650 MW), followed by Brazil and Chile.

The plan is to expand to Argentina (700 MW), Peru (110 MW) and Venezuela (100 MW), with additional investments in Mexico and Brazil.

"A recent study shows that by 2025 the investments could reach 46,000 installed MW" in Latin America, the Association's energy policy director Heikki Willstedt Mesa told Tierramérica.

Providence, R.I. (UPI) Jul 21, 2010
Africa's Lake Tanganyika, the second-oldest and second-deepest lake on Earth, is warmer now than it has been in 1,500 years, scientists say.

Experiencing unprecedented warming during the last century, the lake's surface waters are the warmest on record, LiveScience.com reported Wednesday.

The warmer waters are linked to a decrease in the lake's productivity, affecting fish stocks depended upon by millions of people in the region, researchers say.

Rift lakes like Tanganyika are created when two of Earth's continental plates move apart, expand and eventually become ocean basins over millions of years.

Munich, Germany (SPX) Jul 23, 2010
Sites of origin and regions of domestication of many of our most important cultivated plants are still unknown. The botanical genus Cucumis, to which both the cucumber (Cucumis sativus) and the honeydew melon (C. melo) belong, was long thought to have originated and diversified in Africa, because many wild species of Cucumis are found there.

"A molecular genetic analysis has now shown that the wild populations that gave rise to melons and cucumbers originated in Asia", says LMU botanist Professor Susanne Renner.

"In addition, we have found that 25 related species which have never been formally described are found in Asia, Australia and regions around the Indian Ocean."

Cambridge MA (SPX) Jul 22, 2010
The tropics owe their stunning biodiversity to consistent year-round temperatures, not higher temperatures or more sunlight, according to a novel survey of insect diversity at different latitudes and at different points in the planet's history.

The finding, presented this week in the journal Paleobiology by researchers from Harvard University, Simon Fraser University, and Brandon University, may finally answer a question that has dogged scientists for centuries.

It also suggests, intriguingly, that the world is likely far less diverse today than it was tens of millions of years ago, when the entire Earth had consistent year-round temperatures, much like the modern tropics.

The Catholic church, already reeling from a string of clerical sex abuse scandals, is facing new embarrassment after an Italian magazine published an investigation into what it termed the double life of gay priests in Rome.

Using hidden cameras, the weekly Panorama, owned by Italy's prime minister, Silvio Berlusconi, captured priests visiting gay clubs and bars and having sex. The Vatican does not condemn homosexuals, but it teaches that gay sex is "intrinsically disordered". In one of his earliest moves, pope Benedict barred actively gay men from studying for the priesthood.

The diocese of Rome lashed out at the prime minister's magazine, saying its aim was "to create scandal [and] defame all priests". But it also urged gay clerics to leave both the closet and the priesthood.

It said, "Consistency would require that they come into the open", but that they "ought not to have become priests".

The semi-official papal daily, L'Osservatore Romano, made no reference to the affair. Vatican Radio reported it briefly.

A tool fashioned from a stag's antler and believed to be a Stone Age dildo has caused a global sensation since its discovery in Sweden earlier this month.

San Francisco, Usa (AFP) July 21, 2010
US state attorneys on Wednesday pressed Google to name workers who wrote "snooping" code that captured personal data from wireless networks while Street View cars mapped streets.

"Google's responses continue to generate more questions than they answer," said Connecticut Attorney General Richard Blumenthal, part of a 38-state coalition investigating whether the search giant broke US law.

Blumenthal in June launched the probe of "Google's deeply disturbing invasion of personal privacy," which has drawn ire and scrutiny in an array of countries.

Adding tons of Facebook friends doesn't necessarily make you popular; it may actually put you and the Defense Department (DoD)'s information security at risk--especially when you have friends you don't even know.

Provide Security, a cyber security company, illustrated this danger with the Robin Sage Experiment. The experiment created fake Facebook, Twitter and LinkedIn profiles under the alias, "Robin Sage." A photo of a cute girl (borrowed from an adult website) and the job title "Cyber Threat Analyst" completed the fake profiles.

From there, Thomas Ryan, co-founder & managing partner at Provide Security, posing as Robin, sent requests and established social network connections with more than 300 professionals in the National Security Agency, DoD, and Global 500 corporations.

Robin's new friends revealed information to Ryan that violated military operational security and personal security restrictions.

Russian Prime Minister Vladimir Putin arrived to the bike show in the Ukrainian port of Sevastopol, riding three-wheeled Harley Davidson "tricked out piece of iron".

The bikers, gathered at the 14th International annual bike show, welcomed premier who headed the line of bikers. He was riding posh Harley Davidson trike decorated with Russian and Ukrainian flags.

"Bike is the most democratic transport vehicle. Bike is the most daring, challenging as it gives its owner the tempting feeling of freedom, that is why one can say without any exaggeration, bike is a symbol of freedom," Putin said.

The image of the premier was totally matching the biker's one. He was wearing black jeans, black shirt, sunglasses and biker gloves.