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European Salon de News, Discussion et Klatsch - 9 October

by Fran Wed Oct 8th, 2008 at 02:49:32 PM EST

On this date in history:

1892 - Marina Tsvetaeva, a Russian and Soviet poet and writer, was born.(d. 1941)

More here and here


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by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:50:15 PM EST
Industry gains slight reprieve on 'Green Super Tuesday' - EUobserver

EUOBSERVER / BRUSSELS - EU lawmakers have voted to give a break to industries that use large amounts of energy to make their products by letting them receive most of their carbon emissions permits for free, instead of having to purchase them like other sectors of the European economy.

MEPs took the step during a marathon session in the European Parliament's environment committee - a day dubbed "Green Super Tuesday" by environmental groups - ploughing through discussion of three major laws that make up part of the EU's overall climate package aimed at tackling global warming.

MEPs want ETS money ring-fenced for climate-related purposes

Out of fear that energy-intensive industries such as cement, paper, steel and chemicals would no longer be competitive against companies producing the same items outside the EU emissions trading scheme - the so called "carbon leakage" effect - the environment committee voted to back a phase-in of auctions for pollution permits.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:53:20 PM EST
[ Parent ]
Ha. Just goes to show how retarded the entire emission trading scheme is.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Oct 8th, 2008 at 05:08:11 PM EST
[ Parent ]
It is a great scheme, when all of the world agrees to it. It is a dumb scheme, when only a couple of countries take part.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Thu Oct 9th, 2008 at 03:06:21 PM EST
[ Parent ]
MEPs back subsidies for 'clean' coal - EUobserver

EUOBSERVER / BRUSSELS - The building of new coal-fired power stations in the European Union would soon be outlawed under legislation approved by the European Parliament's environment committee on Tuesday (7 October), unless firms attach technology said to scrub coal clean of carbon emissions.

The committee yesterday voted to back an emissions limit of 500 grammes of carbon dioxide per kilowatt-hour on all new coal plants built after 2015. Because most coal plants cannot meat such a standard, the move would in effect prevent traditional power stations from being built.

Coal - will it be killed off, or get a new lease on life?

The days of coal in Europe are very far from being numbered, however. Indeed, the legislation gives coal a new lease on life by pushing the adoption of a controversial and unproven technology known as "carbon capture and storage" (CCS), which captures the carbon from emissions and stores it in geological formations underground or under the ocean.

"[The vote] will force utilities to invest in CO2 capture and storage if they want to build new coal-fired power plants," said Eivind Hoff of Bellona Europa, a Norway-based environmental group that has been the experimental technology's biggest champion.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:53:56 PM EST
[ Parent ]


Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Wed Oct 8th, 2008 at 05:03:50 PM EST
[ Parent ]
I don't think so. It effectively bans new constrution of coal plants (CSS is to the power companies what the hydrogen fuel-cell scam is to the car makers).

And with that single simple decision, human induced climate change ceases to be a problem or responsibility for Europe.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Oct 8th, 2008 at 05:11:01 PM EST
[ Parent ]
In official EU scenarios, coal is the biggest gainer on gas as gas competitiveness declines and nuclear power is phased-out/not being rebuilt [especially in Germany].

It would have been weird if they had legislated that option away. But then again, business as usual scenarios are never worth much.

Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine

by UnEstranAvecVueSurMer (holopherne ahem gmail) on Wed Oct 8th, 2008 at 05:17:07 PM EST
[ Parent ]
Yes, I realise that after reading the piece. At first I just read the title. And there you seem to agree, that clean coal will never really work.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Wed Oct 8th, 2008 at 07:25:46 PM EST
[ Parent ]
Portugal becomes 22nd EU state to recognise Kosovo - EUobserver

Portugal on Tuesday (7 October) afternoon announced its official recognition of Kosovo as an independent state, becoming the 22nd EU country to make the move.

"It is in the interests of the Portuguese state to proceed today to the formal recognition of Kosovo," the country's foreign minister Luis Amado told the national assembly's foreign affairs committee, AFP reports.

Kosovo declared independence from Serbia on 17 February

"We are convinced that the independence of Kosovo has become irreversible," he added.

An autonomous Serbian province within the former Yugoslavia, Kosovo fell under UN governance in 1999 when NATO troops intervened to stop a crackdown by the then president of Serbia Slobodan Milosevic's forces on the majority ethnic-Albanian population.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:56:00 PM EST
[ Parent ]
Detroit's car giants General Motors and Ford cut European output - Times Online

Collapsing demand for new cars across Europe is to cost skilled workers at General Motors and Ford hundreds of shifts as the car giants try to reduce supply.

General Motors plans to cut production by 40,000 vehicles across Europe as a whole by the end of the year. It is closing its factories in Luton and Ellesmere Port, Merseyside, temporarily this month to try to avert flooding the market with unsold cars.

The Ellesmere Port factory, which makes Vauxhall Astra vans and Vauxhall Astra five-door cars, is halting production for 14 days to cut the number of cars it makes by 9,000. It normally makes about 120,000 vehicles a year, about 46 per cent of which are exported to Spain, Italy and Germany.

The company, which has its headquarters in Detroit, Michigan, will also close its Luton plant for ten days this month, making 4,000 fewer vehicles. It normally makes 90,000 a year. That factory, which makes the mid-sized Vivaro van, exports about 62 per cent of its cars to the Continent.

[Murdoch Alert]
by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:57:02 PM EST
[ Parent ]
I learned this evening (actually just now) that a colleague of mine was on the radio in Denmark today announcing an new gov plan to introduce smart charging stations for electric cars.  I have no details on the program yet, but Denmark will be a pioneer in setting up nationwide charging stations to take advantage of off-peak windpower.

Such a program will make it technologically easier for far greater penetrations of windpower in the grid, though i don't know the details (or have a cite.)  If i got it right, a Danish utility, DONG, together with IBM and Siemens are developing the program.

There is a future for automakers, but it ain't just the old assembly line.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Wed Oct 8th, 2008 at 03:24:55 PM EST
[ Parent ]
Al Jazeera English - Americas - Guantanamo release angers Bush

A US judge has ordered the release of 17 Chinese Muslim detainees from the US detention facility in Guantanamo Bay, Cuba, in what has been seen as a rebuke to the Bush administration.

US district judge Ricardo Urbina said there was no evidence the men were a security risk and that the US constitution prohibits indefinite detention without cause.

Local Uighur residents and human rights activists cheered as he told a Washington courtroom the men, who have been in custody for almost seven years, should be freed.

The ruling is the first court-ordered release of Guantanamo detainees since the facility opened in 2002.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:58:48 PM EST
[ Parent ]
The administration has already appealed. What did you expect?
by gk (gk (gk quattro due due sette @gmail.com)) on Wed Oct 8th, 2008 at 04:49:10 PM EST
[ Parent ]
Germany a Step Closer to Ratifying Lisbon Treaty | Europe | Deutsche Welle | 08.10.2008
Germany has moved a step closer to ratifying the Lisbon Treaty, which would reshape the European Union, with German President Horst Koehler saying through a spokesman Wednesday he has approved the document.

Berlin and other major EU members have pushed ahead with their own ratification work, despite the treaty's ratification being stalled by Ireland, where a referendum last summer rejected it.

Ireland's rejection of the treaty, which is designed to make the EU more efficient and comprehensible to voters, meant the treaty could not come into effect, even though the parliaments in 18 member states had already voted to ratify it.

The Irish result sparked debate across Europe on how the 27-member bloc would proceed, with European heavyweights such as Germany's Chancellor Angela Merkel and France's President Nicolas Sarkozy urging the remaining member states who had not yet ratified it to do so.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:59:23 PM EST
[ Parent ]
Whistle-blower's death undermines Albanian confidence - International Herald Tribune

BERLIN: The investigation into the suspicious death of a whistle-blower in Albania appears to be nearing its conclusion, but with little hope of quelling the doubts and speculation surrounding the case.

Kosta Trebicka uncovered evidence of public corruption in the export of ammunition from the Communist era. His accusations were followed by arrests in Albania and charges against the employees of an arms-dealing company in the United States, but only after the deadly explosion at a munitions facility in the town of Gerdec that claimed the lives of 26 people, including small children.

Trebicka, 48, a witness in the ensuing investigation, was found dead last month near his car on a rural roadside in the province of Korce. The inquiry into his death has been anything but routine, causing thousands to rally in the streets as part of an opposition-party demonstration for a fair investigation and turning a car-accident expert from the Virginia State Police, Kevin Teter, into a household name in Albania.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 03:00:31 PM EST
[ Parent ]
Italy flouting bluefin tuna rules, WWF says - International Herald Tribune

ROME: Italy is greatly overshooting fishing quotas for bluefin tuna, flouting international agreements and further threatening the endangered species, the World Wildlife Fund said Tuesday.

A report commissioned by WWF says Italian fishermen overran their quota in 2008 and 2007, are using a banned method to track tuna, and are underreporting the size of their fleets.

The Agriculture Ministry, which is responsible for fisheries, said Italy respects the rules designed to protect the overfished species and insisted the country had not met its quota this year. But Rome has been feuding with the European Union since June, when Brussels shut down the fishing season two weeks early because by its own count the year's quotas had been met.

Bluefin tuna is under particular strain in the Mediterranean, where it is hunted for its fatty meat, which fetches top prices on the Japanese market as an ingredient for sushi and sashimi.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 03:00:50 PM EST
[ Parent ]
Ukrainian President dissolves Parliament - International Herald Tribune

KIEV, Ukraine: Ukrainian President Viktor Yushchenko dissolved Parliament Wednesday and called a snap election, dashing hopes for the revival of a pro-Western coalition and throwing this politically volatile ex-Soviet nation into further turmoil.

The vote will be the third parliamentary election in less than three years and deal a severe blow to an economy already battered by the global financial crisis. The date of the election has not yet been announced.

Speaking in a televised address to the nation aired late Wednesday, Yushchenko accused his Orange Revolution partner Prime Minister Yulia Tymoshenko of ignoring national interests for the sake of acquiring power.

"I am deeply convinced that the democratic coalition was ruined by one thing -- the ambition of one person, the hunger for power ... and the dominance of personal interests over national ones," Yushchenko said.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 03:04:34 PM EST
[ Parent ]
Sarkozy, Medvedev Call for New European Security Pact | Europe | Deutsche Welle | 08.10.2008
The European Union and Russia formally got their relations back on track Wednesday when French President Nicolas Sarkozy and his Russian counterpart, Dmitry Medvedev, met for talks on a common future.

At an international conference in the south-eastern French resort of Evian, Sarkozy called for a total reconstruction of the European security structure.

Sarkozy also proposed a summit meeting of the Organization for Security and Cooperation in Europe to be held at the end of 2009 "to discuss (Russian) proposals and those of the European Union for new concepts of a pan-European defence."

For his part, Medvedev urged the convening of a "special forum" at which "the leaders of all European states and the leaders of key organisations in the Euro-Atlantic area could take part."

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 11:29:44 PM EST
[ Parent ]
Russia seeks security pact - World Politics, World - The Independent

America's self-styled role as the world's dominant power is undermining global security, the Russian President has claimed.

"A desire by the United States to consolidate its global domination led to it missing a historical chance... to build a truly democratic world order," Dmitry Medvedev said of US actions since the attacks of 11 September 2001.

Mr Medvedev also suggested that US economic dominance had added to turmoil on financial markets around the world. Russia's war with Georgia in August showed the security mechanism in Europe, based around Nato and the US, needed a major overhaul, he added. He proposed a new security pact to ban the use of force or the threat of its use, and would make clear that no single country, including Russia, would have a monopoly on providing security for the continent.

In an unusually emotional speech, Mr Medvedev said Washington passed up a historic chance for a new partnership after the 9/11 attacks, when Moscow offered to join Washington in fighting terrorism. The invasion of Iraq and Washington's plans to station elements of a missile defence shield in eastern Europe scotched that partnership.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 11:44:00 PM EST
[ Parent ]
says this:


Do not let Russia `Finlandise' western Europe

When I first published The New Cold War last February, many contested my title. But what once seemed eccentric now looks mainstream. Relations between the west and Russia have entered a period of extraordinary mistrust and mutual disdain. Indeed, after the conflict in Georgia, the description "cold war" risks looking like an understatement. Russia has shown that it is prepared to use military force against another country; the west has shown that it will not fight and will merely respond with a token protest. Some in the European Union, such as Nicolas Sarkozy, president of France, may see the Kremlin-dictated truce that stopped the fighting (though not the ethnic cleansing, which continues apace) as a triumph. From Russia's point of view, the lesson of the Georgian adventure is simple: we got away with it.

Interestingly enough, his conclusions make sense (if you just ignore that he only wants to apply them to Russian bankers...


The same goes for bankers. If they conceal the beneficial ownership of these phoney companies they are an accomplice to theft. Perhaps one of the benefits of the credit crunch will be a more sceptical response to financiers who maintain that their critics are Luddites. The west has done well to impede the crudest kind of money-laundering. It is no longer possible to turn up at an Austrian bank with a suitcase full of cash, open an account, and make some transfers. We should apply the same principle to asset-laundering: using western capital markets to sell shares and bonds in phoney companies.

(...)

We need to hurry. It will not be too long before financial centres such as Dubai, Shanghai and Mumbai are competing so effectively with London that clients that we find too dodgy will go elsewhere. What our financial centres sell, above all, is respectability. We have priced it too cheaply in the past few years. It is time to be choosier, while we still have some left in stock.



In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 03:26:53 AM EST
[ Parent ]
It will not be too long before financial centres such as Dubai, Shanghai and Mumbai are competing so effectively with London that clients that we find too dodgy will go elsewhere. What our financial centres sell, above all, is respectability.

Interesting. I heard that London's costs were higher than NYC's because our reputation for dealing in dodgy money and stock made the back office securities and insurance rates more expensive. So people preferred to trade in NYC if they had clean stuff cos it was cheaper, but traded in London if it was a bit "spotty".

So Dubain etc will be expensive if they trade in bad stuff.

Leastways that's what I understood.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Thu Oct 9th, 2008 at 08:42:58 AM EST
[ Parent ]
SPECIAL FOCUS - More on Financial Crisis
by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:51:08 PM EST
Stock Markets Slump Despite Cash Infusions | Business | Deutsche Welle | 08.10.2008
Central banks are pumping billions into markets, but that hasn't steadied investors' nerves. Germany's benchmark DAX plunged below the psychologically important 5,000 mark in early trading Wednesday.

In an attempt to calm tensions and keep cash flowing into banks, the European Central Bank on Wednesday, Oct. 8, put an additional $20 billion (14.7 billion euros) back into interbank money markets in one-day loans, bringing the total to $70 billion.

 

The ECB's move is just one in a series of central banks' attempts to shore up the banking sector. Britain announced a 50 billion pound ($87 billion, 64 billion euro) partial nationalization of the country's eight main banks. The measure comes in addition to a 200 billion pound credit line extended to banks.

 

The US Federal Reserve said Tuesday it would buy up short-term debt -- extending its move into the economy -- and central bank chairman Ben Bernanke strongly hinted that a US interest rate cut was likely.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:52:53 PM EST
[ Parent ]
Risky Times in Moscow: The Credit Crisis Hits Russia - SPIEGEL ONLINE - News - International

Foreign investors are fleeing, bank lending is down, and growth is slowing in Russia.

Two shoppers check out the display at the annual Millionaire Fair in Moscow. But economic troubles may lurk just under Russia's glossy surface. Take a stroll through central Moscow, and you'd be hard-pressed to find evidence of the global economic turmoil. Shiny new malls are packed with shoppers. The streets are filled with Mercedes, BMWs and Land Rovers. On the Presnenskaya Embankment, overlooking the Moskva River, a half-dozen skyscrapers are nearing completion at the Moscow International Business Centre, a $12 billion development intended to become the city's new financial hub. The world credit crisis "doesn't affect us at all," says Tatiana Ilyinishna, a pensioner hauling bags of groceries outside a supermarket near the city's Kiev Railway Station. "Everything here is splendid."

But scratch the surface a bit, and things are less splendid than they appear. As the financial crisis spreads, Russians are suddenly discovering that their economy is shakier than many had cared to believe. Credit is increasingly tight, economic growth is slowing, and Russia's fragile financial markets have taken a beating. On Oct. 6 the benchmark RTS index plunged 19 percent, to its lowest level since August 2005. "The current situation is very serious," says Evgeny Nadorshin, chief economist at Trust Investment Bank in Moscow. "A few months ago we thought that we could look forward to a calm life, but now we've lost our advantage and are in the same boat as everybody else."

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:54:33 PM EST
[ Parent ]
World's major central banks announce coordinated rate cuts - International Herald Tribune

PARIS: Global central banks moved together Wednesday to ease the credit squeeze with coordinated rate cuts, reducing borrowing costs for troubled banks and arresting a decline in stock markets after a dismal showing in world equity markets.

The European Central Bank, the U.S. Federal Reserve and the Bank of England, were joined by the central banks of Canada, Sweden, China and Switzerland in cutting their benchmark overnight rates.

The rare joint action helped European stocks, which had been down as much as 5 percent, to pare their losses. Trading in index futures suggested the Dow Jones industrial average would rise slightly at the start of trading New York.

"The recent intensification of the financial crisis has augmented the downside risks to growth," the Fed said in a statement announcing the action. Credit had worsened considerably Wednesday, with the cost of borrowing dollars overnight in London, known as Libor, rising by 1.44 points to 5.38 percent, according to the British Bankers' Association.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:55:23 PM EST
[ Parent ]
Forget logic; fear appears to have edge - International Herald Tribune

The technical term for it is "negative feedback loop." The rest of us just call it a panic.

How else to explain yet another plunge in the stock market Tuesday that sent the Standard & Poor's 500-stock index to its lowest level in five years -- particularly in the absence of another nasty surprise?

If anything, the markets should have been buoyed by the Federal Reserve saying it would shore up another troubled corner of finance by lending money directly to companies. Stocks did open higher, but then quickly tumbled as rumors swirled about the viability of big financial firms like Morgan Stanley and the Royal Bank of Scotland.

Anybody searching for cause-and-effect logic in the daily gyrations of the market will be disappointed -- even if the overarching problem of a crisis of confidence in the global economy is now becoming clear.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:56:32 PM EST
[ Parent ]
The technical term for it is "negative feedback loop." The rest of us just call it a panic.
Eh? That'd surely be a positive feedback loop. As in, one where each action reinforces the trend.
by someone (s0me1smail(a)gmail(d)com) on Thu Oct 9th, 2008 at 02:58:09 AM EST
[ Parent ]
No, no, it's having a negative effect so it must be a negative feedback loop.

<sigh>

This is why "the rest of us" should stop writing crap about what's going on and pretending they understand it at all.

by Colman (colman at eurotrib.com) on Thu Oct 9th, 2008 at 03:12:03 AM EST
[ Parent ]
"L*west common denominator" anyone?

(Sorry, I can't type those words without cringing).

"The womb that spawned that thing is fertile yet"

by Cyrille (cyrillev domain yahoo.fr) on Thu Oct 9th, 2008 at 03:17:45 AM EST
[ Parent ]
...behind our commas!

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 03:29:43 AM EST
[ Parent ]
How are we going to get people to think in systems terms if they think a fedback loop is positive or negative according to the quality of its effects?

As for metaphors, vicious circle is better.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 03:42:21 AM EST
[ Parent ]
a fedup loop rather than "fedback"...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 04:17:37 AM EST
[ Parent ]
Trichet's Trials: Why the ECB Can't Solve Europe's Financial Crisis - SPIEGEL ONLINE - News - International

The European Central Bank has done its bit to fight the financial crisis by keeping the money market afloat and cutting interest rates. But its powers are limited, and its efforts risk being undermined by the chaotic, confused response of EU governments to the turmoil over the last week.

European Central Bank President Jean-Claude Trichet can dictate monetary policy, but he cannot control the disposal of taypayers' money needed to solve the financial crisis.

The European Central Bank joined the United States Federal Reserve and other major central banks in cutting key interest rates by half a point on Wednesday in a concerted move to stabilize financial markets and avert recession, but the ECB's power to stem the financial crisis in Europe is limited, economists say.

The cut brought key interest rates down to 3.75 percent in the euro zone and to 1.5 percent in the United States, the banks said in a surprise announcement that followed a dramatic slump in world financial markets this week. The Bank of England also cut its key rate by half a point.

It was the ECB's first rate cut in more than five years and the move echoed the coordinated rate cuts on Sept. 17, 2001 in the aftermath of the 9/11 attacks.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:57:32 PM EST
[ Parent ]
So the solution is to give the ECB more power so it can solve the crisis like the Fed has done.
by generic on Thu Oct 9th, 2008 at 11:04:25 AM EST
[ Parent ]
The European System of Central banks is composed of the ECB and the National Central banks which do have banking regulation and could "control the dispersal of taxpayesrs' money" if that were not the province of the Ministers of Finance...

It's not for lack of institutions and ways to coordinate them that the EU hasn't "solved the crisis like the Fed has done" (LOL!)

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 11:12:43 AM EST
[ Parent ]
Forgot my snark tags
by generic on Thu Oct 9th, 2008 at 01:07:31 PM EST
[ Parent ]
Capitalism in Crisis: The Broken Pact with the People - SPIEGEL ONLINE - News - International

Trust capitalism and shun government interference we were told. But irresponsible bankers saw a chance to get rich quick and went for it. Their failure has become ours -- and the promise of a common good has evaporated along with faith in democratic capitalism.

Germany has taken to the skies. It is 9:00 a.m. on Thursday, Oct. 2 and the Luftwaffe Airbus A310 -- Germany's equivalent of Air Force One -- took off half an hour ago from Berlin's Tegel Airport. The plane is heading east, destination Saint Petersburg, Russia. Crew members are serving the usual copious breakfast, including omelets, meat, cold cuts, cheese and honey.

 The gamblers have eroded confidence in both capitalism and democracy. On board are many of the people who determine Germany's position in the world: the German chancellor and six ministers, the heads of major German corporations like Siemens, Deutsche Bahn and E.on, and a number of journalists. There are no bankers on the plane, but they play the leading role in everyone's mind and in the discussions taking place.

After breakfast, German Chancellor Angela Merkel invites the journalists up to the front of the aircraft for an off-the-record chat with the press. Everyone squeezes into a small room, 25 people in all, standing, sitting cramped together, some of them even on the floor. "The microphone isn't working again," says the chancellor to start things off.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 03:00:09 PM EST
[ Parent ]
Off-the-record chat? Is there any conceivable reason for journalists and politicians to have amiable off-the-record chats?
by generic on Thu Oct 9th, 2008 at 11:10:27 AM EST
[ Parent ]
They really like it. It gives the politicians a chance to blow off steam and say what they really think without suffering media onslaught and it makes the journalists feel important.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Oct 9th, 2008 at 11:37:44 AM EST
[ Parent ]
I.M.F. Calls for Aggressive Response to Crisis - NYTimes.com

WASHINGTON -- If governments do not forge a coordinated response to the financial crisis, it could spill over to emerging markets, the International Monetary Fund said on Wednesday in warning that the world's "mature" markets" face their biggest challenge since the Depression.

"The world economy is entering a major downturn in the face of the most dangerous financial shock in mature financial markets since the 1930s," the I.M.F. said in its Global Financial Stability Report, which represented the fund's gloomiest forecast in years.

<...>

" The I.M.F. estimates that all told, the amount lost by banks because of mortgage-related assets could rise to $1.4 trillion, an increase from $945 billion in its last report in April. The banks have already taken account of $560 billion of the losses in markdowns, the report estimates, but the recent collapse in share prices and the freezing of the credit market have made it difficult for the banks to raise fresh capital.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Oct 8th, 2008 at 04:19:32 PM EST
[ Parent ]
U.S. May Take Ownership Stake in Banks | New York Times:

Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.

Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks' balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

Thank God who someone who knew what they were doing managed to sneak in the necessary language in time.

Truth unfolds in time through a communal process.

by marco on Wed Oct 8th, 2008 at 09:52:52 PM EST
[ Parent ]
Incidentally, this is obviously a subversion of democracy.  How may members of Congress knew that the bail-out bill contained an option to nationalize banks?  If they had known, the bill would have been rejected, or it would have taken much longer to bully/bribe enough of them to pass it.

In fact, who knows, Paulson may have had this in mind from the beginning, and wanted "non-reviewable" decision-making power precisely in order to do something like this -- nationalization of the banks -- over the dead bodies of die-hard Republican Congressmen, bankers, and conservative pundits.  At least by asking for this power outright, he was honest and open about it.  He either decided not to use or simply not did not know that in Washington, he had to resort to such underhanded means of obtaining power beyond the ken and reach of legislators, much less the people.

Normally, I detest sneaking language into bills in such a manner that it is impossible to know that language even exists, much less to review it.  It is clear subversion of democracy, and is an essential flaw in how legislation is done.  But in this case, well, the ends may justify the means -- a principle that I detest even more.

Truth unfolds in time through a communal process.

by marco on Wed Oct 8th, 2008 at 10:06:43 PM EST
[ Parent ]
I disagree.
Nothing in Paulson's past decisions or remarks suggests such an intent would be likely for him. I speculate that the language was added by members of congress who recognized what he did not- that the plan was dead on arrival as he conceived it- and that draconian action would eventually be necessary. They just gave him the tools to do it, when, not if, circumstances forced his hand.

--The US financial community is being dragged kicking and screaming into the 21st century.


Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Thu Oct 9th, 2008 at 03:38:38 AM EST
[ Parent ]
Indeed; 'our owning something for our money' was one of the several points that were forced into the bailout by the congress critters who condescended to the whiney masses who called and wrote complaining of the bailout. The last point that 'we' wanted (as long as 'we' were going to do this thing at all) of allowing judges to make changes to mortgages in threat of foreclosure, didn't make it.

You'll have noticed that McLame pitched a variation of this as as his idea in the debate the other night, making him the leader of the common man. One presumes that he didn't want it bad enough to twist the arms of those who prevented it, his 'afraid of socialism' rat-bastards.

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Thu Oct 9th, 2008 at 07:10:42 AM EST
[ Parent ]
Bloomberg.com: Paulson Signals U.S. May Invest in Banks to Shore Up Confidence
Treasury Secretary Henry Paulson signaled the government may invest in banks as the next step in trying to resolve the deepening credit crisis.

Paulson told reporters in Washington yesterday that legislation Congress passed last week to rescue financial institutions gave him broad authority that he intends to use, beyond just buying mortgage-related assets on banks' balance sheets. He indicated that an option available may be boosting companies' capital with cash infusions.

``It is the policy of the federal government to use all resources at its disposal to make our financial system stronger,'' Paulson said. ``We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size.''

Banks worldwide aren't raising enough capital to offset losses: while posting $592 billion of writedowns and losses during the crisis, they have added just $442.5 billion of new capital, according to data compiled by Bloomberg. The International Monetary Fund anticipates losses will more than double to $1.4 trillion.



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu Oct 9th, 2008 at 02:44:08 AM EST
[ Parent ]
Countdown to nationalisation...

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 03:43:18 AM EST
[ Parent ]
Navigating Through the Financial Crisis

A note from Shumeet Banerji to Booz & Company clients

...My observations are backed with a particular form of data--the recent views of business leaders in some of the most important places in the world. For I am writing this on a flight back to London from Beijing, having just attended the World Economic Forum's Tianjin summer conference--and having spent the previous two weeks visiting Booz & Company clients in Asia, Europe, and the Americas.

So. Is this the end of Capitalism? What caused this? When will it end?

This downturn originated almost entirely in the U.S. financial markets. Essentially, cheap credit from the U.S. Federal Reserve fuelled an extraordinary leveraging of the U.S. economy over the past six years. Its locus is in consumer debt, especially mortgage debt. The original sin was not in (the lack of) regulation, but in the expansion of credit with outrageous terms to un-credit-worthy people--for example, 105% "Loan to Value" loans with no credit checks. ...

The second victim of cheap debt was the bank balance sheet. Many financial services institutions have imploded because their asset purchases were fuelled by leverage, raising debt/equity rations of some banks to 30: or 40:1. I strongly believe that, once again, the culprit was not the lack of regulation, nor the "complexity" of risk. The job of financial institutions is to collect, price, disaggregate, de-correlate, re-aggregate, and price risk. To blame complexity is to seek a barter economy. The culprits are bad incentive systems and poor risk management at several major banks. Our financial services practice is working on these issues right now.

The impact of all of this on the "real economy" is fairly clear. Foreclosures and tough credit don't ease spending, and the U.S. economy is heavily dependent on credit-based consumer spending. (This comprised 72% of the U.S. economy last year). Demand and growth will be slow, with most commentators expecting a recession by 4th Quarter this year. I expect this will be painful, but it won't lead to another Great Depression. Swift macroeconomic action will soften the blow, and growth will probably return late next year. <...>

While some commentators argue that decoupling does not exist, I think we have genuine duality in the world today. Countries with big demographic or resource dividends will follow a very different trajectory through this downturn than the U.S. and Western Europe. And I think they will pull us out. Having heard the Chairman of the China Banking Regulatory Commission (CBRC) and Premier Wen Jiabao speak this week at the World Economic Forum, I must say that the world has something to learn from Chinese leadership in terms of their steady hand on the tiller.

In the end, there will be a tough adjustment in the U.S. and the U.K., a mixed story in Western Europe, and some anxiety in the rest of the world. I expect the U.S. correction will take time. Sovereign wealth funds will own big chunks of Western assets and we will end up with a saner financial system--until the next leap off the cliff.

What does "countries with big demographic or resource dividends" mean in non-strategic consultant speak?

Also, is there any other way of interpreting "a steady hand on the tiller" except as a metaphor for government regulation?

Truth unfolds in time through a communal process.

by marco on Wed Oct 8th, 2008 at 10:33:57 PM EST
[ Parent ]
Shumeet Banerji: "Navigating Through the Financial Crisis"
Having heard the Chairman of the China Banking Regulatory Commission (CBRC) and Premier Wen Jiabao speak this week at the World Economic Forum, I must say that the world has something to learn from Chinese leadership in terms of their steady hand on the tiller.

Here is what Mr. Liu Mingkang, the Chairman of the China Banking Regulatory Commission, whose speech Mr. Banerji references, had to say:

"When U.S. regulators were reducing the down payment to zero, or they created so-called `reverse mortgages,' we thought that was ridiculous," Liu said at the World Economic Forum in this eastern Chinese city. He said debt in the United States and elsewhere rose to "dangerous and indefensible" levels.

Liu's comments were unusually pointed criticism of U.S. financial regulation for a Chinese official. They added to suggestions by countries that are under U.S. pressure to liberalize their financial markets that Washington's model might not be ideal.

But then, Mr. Banerji said that "The original sin was not in (the lack of) regulation."  He is clearly an extremely smart man.  So I would be curious to hear how he reconciles these two (what seem to me) contradictory positions.

Truth unfolds in time through a communal process.

by marco on Thu Oct 9th, 2008 at 12:27:23 AM EST
[ Parent ]

I strongly believe that, once again, the culprit was not the lack of regulation, nor the "complexity" of risk. The job of financial institutions is to collect, price, disaggregate, de-correlate, re-aggregate, and price risk. To blame complexity is to seek a barter economy. The culprits are bad incentive systems and poor risk management at several major banks.

What is regulation but an "incentive system"?


the culprit was not the lack of regulation,

(...)

the world has something to learn from Chinese leadership in terms of their steady hand on the tiller.

What is regulation but a "hand on the tiller"?

Why do we even pretend to listen to these wankers????


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

by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 03:33:56 AM EST
[ Parent ]
Bad incentive systems play a role but it is too easy to see the ulterior motives behind all these opinion pieces.

Now, are we aware of our own ulterior motives?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 03:38:12 AM EST
[ Parent ]
explicitly what you see as their ulterior motives? and what you think ours might be?

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 04:19:24 AM EST
[ Parent ]
Their motive is damage limitation to the Friedman/Reagan/Thatcher ideological model. "It's not the deregulation, it's the principal-agent problem". If this gets serious enough their ideology runs the risk of going the way of Socialism post-1989, or another 50 years (1929-1979?) of strong regulation and some sort of post-keynesian paradigm, which they would loathe.

Spelling out one's own hidden biases is a bit harder :-)

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 05:05:32 AM EST
[ Parent ]
It would be interesting, though. My view is that ET is in general doing reasonably well in its attempt to have a free spirit, but I still reckon that there are some general biases and in fact some may come from this very attempt to keep a free spirit.

So, our bias may be correlated to the bias in the general media. If the main winds were to change, we may change in the opposite direction. Or maybe not, we can't know because it hasn't happened. Yet I remember your warning that we should not try to find confirmation of what we were saying in each and every item of the current crisis -confirmation bias.

I tend to see ET as having different standards for some countries (Russia and China come to mind) -being ready to defend things that would be slammed in many other ones. That's an example of appearing to overshoot in opposing the mainstream bias.
Similarly, and I say that as an ardent supporter of wind power, I have the impression that some graphs are explained with enthusiasm trumping a purely neutral analysis -again, the barrage of bad faith from the mainstream may explain some of that.

As for myself, I know that the French right has been so awful for so long that I have to fight deep scepticism if something they say seems to make sense. I'm always looking for the catch (there very often is one. Is there always one? Maybe not).

"The womb that spawned that thing is fertile yet"

by Cyrille (cyrillev domain yahoo.fr) on Thu Oct 9th, 2008 at 05:52:54 AM EST
[ Parent ]
Jerome a Paris:Why do we even pretend to listen to these wankers????

Well, I personally wouldn't call him a wanker.  But I think we need to listen to people like him if only because they have enormous influence, and if we disagree with them, then we need to provide arguments that are persuasive to people who are uninformed or undecided.

Your two points --

What is regulation but an "incentive system"?

What is regulation but a "hand on the tiller"?

-- are examples of such argumentation that will help in convincing people that the "de-regulation was not the problem" meme is wrong.

Truth unfolds in time through a communal process.

by marco on Thu Oct 9th, 2008 at 04:48:24 AM EST
[ Parent ]
Ah yes, they annoy me ever so much, they give consulting a bad name with people who have some sense.

And they bug me also when they pick all the contracts thanks to their absolute absence of shame in talking complete bullshit. Then they leave with nothing done and we have to pick up the pieces and actually do the work, except there is only 20% of the budget left.

For instance, I'm working on some improvement projects that used to be the tiny brother to a major program.
Well, now it's part of the major program, and in fact pretty much ALL of the major program. Said major program included it because, well, it had not delivered anything and needed to actually show some results, which is what we were getting.

Now, prior to that, the major program (I can't tell you which consulting company did it of course, but you just know it was 'strategic consulting' of course) had communicated quite a lot on what they had done. Guess what was the main metric in their communication?

The length of the process maps they had produced (we're talking post-its on flipcharts there). They were bragging about how many meters they had.
[Cyrille's Jawdrop™ Technology] there. Of course they got a lot (A LOT) more money than we'll get for actually finding the problems and fixing the main ones. Oh, and in passing, their process maps were unusable and we has to redo the ones we needed. Silly us, we failed to measure them and use that as proof of our action.

That was my rant for the day. Mmm, maybe that's why Mig thought I was a lot older than I actually was.

(and I can just picture a ((*rant Cyrille)) popping up next now, silly me)

"The womb that spawned that thing is fertile yet"

by Cyrille (cyrillev domain yahoo.fr) on Thu Oct 9th, 2008 at 05:21:27 AM EST
[ Parent ]
The New York Times has a long and fairly devastating article on Greenspan and its thrust is that Greenspan's philosophy, advocacy and policies are in large part to blame for the crisis.

"Mr. Greenspan declined requests for an interview."

The Reckoning - Taking Hard New Look at a Greenspan Legacy - Series - NYTimes.com

"In a market system based on trust, reputation has a significant economic value," Mr. Greenspan told the audience. "I am therefore distressed at how far we have let concerns for reputation slip in recent years."

<...>

In 1992, Edward J. Markey, a Democrat from Massachusetts who led the House subcommittee on telecommunications and finance, asked what was then the General Accounting Office to study derivatives risks.

Two years later, the office released its report, identifying "significant gaps and weaknesses" in the regulatory oversight of derivatives.

"The sudden failure or abrupt withdrawal from trading of any of these large U.S. dealers could cause liquidity problems in the markets and could also pose risks to others, including federally insured banks and the financial system as a whole," Charles A. Bowsher, head of the accounting office, said when he testified before Mr. Markey's committee in 1994. "In some cases intervention has and could result in a financial bailout paid for or guaranteed by taxpayers."

In his testimony at the time, Mr. Greenspan was reassuring. "Risks in financial markets, including derivatives markets, are being regulated by private parties," he said.

"There is nothing involved in federal regulation per se which makes it superior to market regulation."



Truth unfolds in time through a communal process.
by marco on Wed Oct 8th, 2008 at 11:27:39 PM EST
[ Parent ]
That mechanism works - Greenspan will never be asked to be chairman of the Fed, given the mess he's created.
But that's a bit too late for the rest of us.

Just like food safety regulation: sure, a company that sells deadly products might not satay in the market very long, but it's going to be a small comfort for those that die from its products before its reputation is touched...

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

by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 03:35:37 AM EST
[ Parent ]
What do you say to those who reply that while his anti-regulation/pro-free market opinions and testimony as a subject matter expert in hearings and private conversations were unfortunate, as chairman of the Fed Greenspan did not have any formal authority or responsibility in law-making, rule-making, or policy-making with respect to regulation, other than setting monetary policy, and that the real responsibility lies with Congress for failing in their oversight?

Truth unfolds in time through a communal process.
by marco on Thu Oct 9th, 2008 at 04:35:46 AM EST
[ Parent ]
I'll note that Greenspan put his weight (and back in 2001, it was considerable) behind the Bush tax cuts that year - after years of pushing Clinton to reduce deficits, he effectively changed tack and said that deficits were okay.

His support was instrumental in getting Congress to approve cuts thaty many of them were wary about.

And his responsibility in propping up the bubbles in the late 90s and then throughout the noughties (denying that there even was a bubble, and keeping Fed rates absurdly low for way too long) cannot be overstated.

Quite simply, he behaved like a hawk, and used his "credibility" on the markets (earned thanks to his frequent use of the "Greenspan put", ie using monetary policy to prop up markets when they went down) for narrow political goals.

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

by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 05:12:57 AM EST
[ Parent ]
Finally, belatedly, the Times says it.

Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Thu Oct 9th, 2008 at 03:51:41 AM EST
[ Parent ]
The current crisis was predicted by many - many! - knowledgeable people. They were wilfully ignored then, and are still erased people as those in charge keep on repeating that "nobody could have predicted..." or "it's an incredible  once-in-a-hundred-years-event" to deflect blame.

So, read it again:


"The sudden failure or abrupt withdrawal from trading of any of these large U.S. dealers could cause liquidity problems in the markets and could also pose risks to others, including federally insured banks and the financial system as a whole," Charles A. Bowsher, head of the accounting office, said when he testified before Mr. Markey's committee in 1994. "In some cases intervention has and could result in a financial bailout paid for or guaranteed by taxpayers."

Systemic risk, counterparty risk, moral hazard. All known, and wilfully ignored.


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

by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 04:23:04 AM EST
[ Parent ]
Bloomberg.com: Icelandic Regulator to Take Control of Kaupthing Bank
Iceland's Financial Supervisory Authority will take control of Kaupthing Bank hf, the nation's biggest bank and the third lender to be seized by the government since the financial crisis escalated.

Kaupthing's domestic deposits are fully guaranteed, and the aim of the takeover is to provide a ``functioning domestic banking system,'' the FSA said in a statement on its Web site today.

Iceland's banking system has buckled under the weight of debts equal to 12 times the size of the economy, with financial regulators already in charge of the second and third largest lenders, Glitnir Bank hf and Landsbanki Islands hf. Prime Minster Geir Haarde indicated yesterday he may be forced to seek aid from the International Monetary Fund after failing to secure loans from European governments and central banks.

The central bank yesterday abandoned an attempt to fix the exchange rate, indicating it is powerless to halt the slump in the krona. Iceland will start talks with Russia on Tuesday to secure a loan of as much as 4 billion euros ($5.46 billion), Haarde said yesterday.

Iceland's oversized bank industry put it ``probably in the worst position in the developed world to cope with the ongoing credit crisis,'' Deutsche Bank AB economist Henrik Gullberg said on Oct. 7.



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu Oct 9th, 2008 at 02:40:40 AM EST
[ Parent ]
The latest volley of shrapnel to hit from this particular implosion is the news that numerous local authorities in the UK had funds on deposit with Icelandic banks.

Ooops.

As of this morning it was unclear how much is in play (a tory was on the Today show speculating that it was at least a billion UKP), but various local govt lobby groups are bending the treasury's ear about getting these deposits guaranteed along the same lines as the private depositors guarantee that Darling announced earlier in the week.

Regards
Luke

-- #include witty_sig.h

by silburnl on Thu Oct 9th, 2008 at 06:15:35 AM EST
[ Parent ]
BBC News: Councils seeking Darling meeting
Local authority leaders are seeking an urgent meeting with the chancellor after it emerged at least 20 councils have cash in troubled Icelandic banks.

Their overall investment is hundreds of millions of pounds and they are asking the UK government for the protection it has promised to personal savers.

The Conservatives have warned that up to £1bn in council funding could potentially be in danger.

The Tories talking up the figures at risk is rich since of the top five institutions
Kent County Council, £50m
Transport for London, £40m
Westminster City Council, £17m
Hertfordshire County Council, £17m
Havering Council, £12.5m
all but TfL are Tory-controlled local authorities. Three of these are part of London.

Up to £1bn comes out of the largest pot of money, £50M by Kent County Council, times 10 institutions. The Tories don't even know how to do this properly.

But £200M sounds about okay.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 06:23:59 AM EST
[ Parent ]
times 10 institutions

I mean times 20.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 10:35:38 AM EST
[ Parent ]
A really sad story on those lines surfaced recently in Sweden.

The city of Oskarshamn has lost something like €30-35 million on some supposedly safe real interest bonds, except for a clause that said that if the seller of said bonds fell onto hard times they would lose all value.

It's even sadder because Oskarshamn is not a wealthy place, but the city government is wealthy (they still have like €130 million in financial assets). That's because they, that's right, sold all their city owned hydro electric power plants 15 years ago. They were initially paid with shares from the company that bought the plants (Sydkraft, later bought by Eon), so not too horribly bad...

But some idiot official who misunderstood what diversification is about and what it's good (and not good) for sold those shares and bought a diversified portfolio. And here we are. </head explodes>

Lessons: city governments should not own shares and bonds. If they have more money than they can spend they should cut taxes. If the citizens feel like specualting on the markets they can now do it with their own money.

And if city governments really do own anything, it should be strategic assests with stable cashflows and without any kind of surprises... like hydroplants.

Grrrr!

 

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Oct 9th, 2008 at 10:22:56 AM EST
[ Parent ]
FT.com / World - Iceland suspends trading after bank seizures
Iceland's stock exchange on Thursday suspended trading in all shares citing unusual market conditions after the country's largest lender, Kaupthing Bank, followed domestic peers into state ownership.

The nationalisation of Kaupthing followed that of Landsbanki, owner of the Icesave savings business popular in the UK, and Glitnir earlier this week and pushed the island economy to the verge of collapse.

Sigurdur Einarsson, Kaupthing's executive chairman, said the bank had asked Iceland's Financial Supervisory Authority (FME) to take control after Kaupthing Singer & Friedlander, its UK subsidiary, was placed into administration on Wednesday by the UK government, putting the parent company in technical default.

"It did not matter that the parent company had sufficient liquidity and its position was solid," he added.

Mr Einarsson also said Kaupthing Edge, Kaupthing's online saving bank, had been hit by a wave of withdrawals by UK depositors in the wake of the run on Icesave, in spite of its deposits directly benefiting from a UK guarantee, whereas Icesave's were backed by an Icelandic protection scheme in the first instance. Kaupthing agreed to sell Kaupthing Edge deposit business to ING, the Dutch bank, on Wednesday.



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu Oct 9th, 2008 at 09:18:36 AM EST
[ Parent ]

AIG gets another Fed lifeline

The Federal Reserve on Wednesday threw another financial lifeline to AIG, agreeing to provide up to $37.8bn in additional liquidity to the stricken insurer.

The move, which comes on top of the $85bn rescue loan that gave the government control of the company last month, is designed to help AIG fund its troubled securities lending operations.

Before its collapse, AIG had used the programme - which lent securities to fund managers and other financial institutions for a few days in exchange for a fee and cash collateral - as a source of liquidity.

AIG reinvested the collateral in longer-dated instruments, including troubled mortgage assets. The plunge in the value of those assets made it impossible for AIG to repay its counterparties once they returned the securities and demanded the collateral back.

Is that what one calls "throwing good money after bad"? Sure looks like it...

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

by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 05:15:08 AM EST
[ Parent ]
Given the indebtedness of the US govt, can we even categorise the money being thrown as "good" ?

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Oct 9th, 2008 at 09:27:09 AM EST
[ Parent ]

Problem loans nearly triple in US

The percentage of large syndicated US loans rated as problematic has nearly tripled in the last year, highlighting the damage done by the lax underwriting standards of the private equity boom, a report by US regulators showed on Wednesday.

During 2006 and early 2007, leading banks competed fiercely to lend to private equity groups, often dispensing with the usual covenants meant to secure such credits in a development that led to the so-called "cov-light loan".

The annual federal "shared national credits" survey - which examines credit committments of more than $20m held by three or more banks - found that $373.4bn of such loans faced actual or potential difficulties at the end of the second quarter.

That was an increase of $259.3bn from the total of "criticised" loans during the previous year. Such problem credits accounted for 13.4 per cent of the total held by lenders in the US, up from 5 per cent the previous year, the survey showed.

The snowball is still rolling.

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

by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 05:55:11 AM EST
[ Parent ]

Debt-holders

Bears are on top over bulls in the stock market. And the reason is that debt-holders seem to be in the ascendancy over shareholders.

Each hour on Tuesday brought a new attempt to avert disaster somewhere in the banking world: a state loan to Russia's banks, a Spanish scheme to buy distressed securities, the US Federal Reserve's move to buy commercial paper from issuers (or lend directly to non-financial companies) and the UK decision to inject capital into banks.

The effects on credit and stock markets were divergent. For stock markets, it became ever more apparent that the ultimate resolution for the crisis would be the nationalisation of banks in some form.

Injections of capital into banks will horribly dilute the existing shareholders' holdings. This was reason to sell financials. (...)

However, governments' scramble to act did have an effect where it was most needed. Credit markets suggest that the risk of default by financials remains far below its highs for the crisis. The cost of insuring against that risk barely rose. Money markets calmed slightly.

So Tuesday's sell-off is a bet that creditors (and depositors) will be spared, and that taxpayers and shareholders will share the cost of saving them from a banking collapse.



In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 05:58:08 AM EST
[ Parent ]

Rising CDS action increases the strain

The failures of Glitnir and Landsbanki not only add to the grim international roll-call of banks burnt out by the wild bushfire of the global liquidity crisis, they also lengthen the list of costly and complex tasks facing the derivatives markets.

The two leading Icelandic banks bring to six the number of finance companies that have triggered credit default swap contracts, which provide a kind of insurance against non-payment of corporate debt, in little more than a month.

The first effect of these financial failures is that those who sold protection (in simple terms, insurance) through CDS contracts must pay those who bought protection.

And as a side note:


LCH.Clearnet has completed the wind-down of $9,000bn worth of overthecounter interest rate derivatives held by Lehman Brothers when it collapsed, the London-based independent central clearing house, said on Wednesday.

The cleanup of the Lehman Brothers Special Financing Inc portfolio, which involved hedging and auctioning off of 66,390 trades across five leading currencies, was achieved without any of the SwapClear members involved seeing any losses, although many banks put up traders and risk and operations people to help.

"The default was managed well within Lehman margin held and LCH.Clearnet will not be using the default fund in the management of the Lehman default," LCH said.

That last bit is rather good news altogether.


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

by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 06:00:13 AM EST
[ Parent ]
$9,000bn?  

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Thu Oct 9th, 2008 at 06:28:36 AM EST
[ Parent ]
Big numbers are fun!
by Colman (colman at eurotrib.com) on Thu Oct 9th, 2008 at 06:29:56 AM EST
[ Parent ]
Bloomberg.com: Libor Dollar Rate Jumps to Highest in Year; Credit Stays Frozen
The cost of borrowing in dollars for three months in London soared to the highest level this year as coordinated interest-rate reductions worldwide failed to revive lending among banks for any longer than a day.

Attempts by policy makers to restore confidence to money markets are being stymied by almost daily crises among financial institutions. Iceland's government took over the nation's biggest lender today to keep the country's banking system working. American International Group Inc., the insurer taken over by the U.S. government, may need $37.8 billion of extra funds, the Federal Reserve Bank of New York said yesterday.

``To see little or no reaction in the fixings is very disappointing and reinforces the fact that Libor is broken and the transmission mechanism from central banks isn't working,'' said Barry Moran, a currency trader in Dublin at Bank of Ireland, the country's second-biggest bank. ``Things are still very stressed and we don't know what's going to fix it.''

The London interbank offered rate, or Libor, for three-month loans rose to 4.75 percent today, the highest level since Dec. 28. The Libor-OIS spread, a measure of cash scarcity, widened to a record. The overnight rate fell to 5.09 percent, still 359 basis points more than the Fed's 1.5 percent target rate.

The European Central Bank today offered banks as much cash as they need for six days at its benchmark rate of 3.75 percent, bringing forward new measures to soothe money markets. It also loaned banks a record $100 billion in overnight dollar funds, allotting most of the cash at 5 percent, down from 9.5 percent yesterday.



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu Oct 9th, 2008 at 09:12:45 AM EST
[ Parent ]
WORLD
by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:51:27 PM EST
Brazil Rising: Emergence on Global Stage Leaves Brazilians Divided - SPIEGEL ONLINE - News - International

Brazil's very recent emergence on the global stage has fueled debate in the country between those advocating adaptation to international norms and those who view Brazil's real interests as conflicting with the current world order.

Brazilian capital Brasilia: Finding its role in a new world order

The key aim of Brazilian foreign policy has long been to achieve international recognition as a major player in international affairs. This aim stemmed from its belief that it should assume its "natural" role as a "big country" in the world arena. Now, as a result of the concurrence of a changing international environment and an altered domestic polity, Brazil seems closer than ever before to achieving this aim. It is gaining increasing international recognition and is poised to emerge as a "big power." However, there remain several challenges that need to be addressed in order for Brazil to meaningfully participate in global governance. This article outlines the factors that have led to Brazil's rise, the conceptual basis of Brazilian foreign policy, and the challenges ahead.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:55:02 PM EST
[ Parent ]
Al Jazeera English - Americas - Guantanamo release angers Bush

A US judge has ordered the release of 17 Chinese Muslim detainees from the US detention facility in Guantanamo Bay, Cuba, in what has been seen as a rebuke to the Bush administration.

US district judge Ricardo Urbina said there was no evidence the men were a security risk and that the US constitution prohibits indefinite detention without cause.

Local Uighur residents and human rights activists cheered as he told a Washington courtroom the men, who have been in custody for almost seven years, should be freed.

The ruling is the first court-ordered release of Guantanamo detainees since the facility opened in 2002.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:58:27 PM EST
[ Parent ]
GOP's latest ugly fable, by Gene Lyons AR Dem. Gazette, 10 8 '08 (behind subscription wall)

-Skip-

While you fretted over Bush screw-ups in Iraq, Afganistan and New Orleans, a sinister, dusky cabal built a speculative bubble in ghetto real estate.  Overpriced luxury condos were constructed with borrowed money in fashionable Harlem, Watts and the south side of Chicago; also downtown Atlanta, Newark, St.Louis, Detroit, Memphis and Philidelphia.  In Monopoly terms, the entire U.S. economy drained into a black hole of defaulted loans on Baltic and Mediterranean.

So how come you haven't heard this before?  Maybe because you don't spend enough time watching Fox News or listening to GOP talk radio.  In those precincts, the real cause of the national (and world financial crisis turns out to be an obscure 1977 law known as the Community Reinvestment Act or CRA.  Intended to end the practice of "redlining," i.e., refusing to make credit worthy loans in "bad" neighborhoods, the CRA was enacted under President Carter.  To conservative pundits such as Charles Krauthammer, Jeff Jacoby and Laura Ingraham, that's where all the trouble started.

-Skip-

The brutality of this argument is matched only by its stupidity.  An alert child would wonder why a 31 year old law suddenly started causing trouble in 2008.  Wouldn't a lot of those loans already be paid off?  Wouldn't the same apply to actions Clinton supposedly took 13 years ago?  Besides, with the Republicans controlling govennment for the last eight years, how come they didn't fix it?  

Mainly because it's utter nonsense.  CRA regulations apply only to FDIC-insured banks, not the mortgage companies and investment banks which made 83.4% of sub-prime loans responsible for the crisis.  The 1977 law also has nothing whatsoever to do with fruadulent packages of "securitized: mortgage debt taking down investors worldwide.  Those are a Bush-era innovation.

Rick Pearlstein, author of the brilliant history Nixonland, calls this ugly fable "a modern-day equivalent of the 'Protocols of the Elders of Zion,' a Big Lie narrative that blames a despised, outcast social group for problems they had nothing to do with."

A naive person might imagine that these people would have some shame.



"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Oct 8th, 2008 at 05:05:59 PM EST
[ Parent ]
FijiLive: Fiji High Court dismisses Qarase case
Fiji's High Court has dismissed the case brought by deposed Prime Minister Laisenia Qarase that questioned the legality of the 2006 military takeover.

The ruling on notice comes seven months after arguments on the case ended in the High Court.

A ruling handed down by acting Chief Justice Anthony Gates - as head of a three judge panel including Justices Devendra Pathik and John Byrne - said they found that the President Ratu Josefa Iloilo's actions during the period in question were lawful and valid.

So, in Fiji you can now stick a gun to the President's head, have him sack the elected PM in direct contravention of the Constitution, dissolve Parliament, and (eventually) declare you PM, and its all legal.

Fiji's judges have betrayed it.  And their constitution is dead.

by IdiotSavant on Thu Oct 9th, 2008 at 12:14:18 AM EST
[ Parent ]
http://www.b92.net/eng/news/politics-article.php?yyyy=2008&mm=10&dd=08&nav_id=54059

Serbian resolution wins UN GA backing
8 October 2008 | 09:16 -> 23:07 | Source: B92, FoNet, Beta, Tanjug
NEW YORK -- With 77 votes in favor and six against, the UN General Assembly on Wednesday accepted Serbia's draft ICJ resolution.

Jeremić addresses the UN GA on Wednesday (FoNet)
Jeremić addresses the UN GA on Wednesday (FoNet)

The document requests an advisory opinion of the International Court of Justice (ICJ) about the legality of the unilaterally declared independence of Kosovo.

74 countries abstained, Tanjug news agency reports from New York this afternoon.
 The European Union member countries, according to a Beta news agency report, did not have a united stand on the issue, with the UK and France abstaining, while Slovakia, Greece, Cyprus, Spain and Romania voted in favor.

In the discussion that preceded the voting, Serbia was supported by Panama, Cuba, Mexico, Indonesia, Costa Rica, Algeria, Egypt, South Africa.

The United States and Albania voted against the adoption of the resolution.  They were joined by the Marshall Islands, the Federated States of Micronesia, Nauru, and Palau.

British Ambassador to the UN John Sawers reacted to the result by saying that he was surprised by the outcome.

In the debate before the voting, Sawers said Belgrade's resolution was "politically motivated".

U.S. representative Rosemary DiCarlo said she would vote against, since Washington considers Kosovo Albanians' declaration to have been in line with international law, and added that her country "firmly believes in Serbia's and Kosovo's European future".


Hahaha..."political reasons"...incredible...

Science without religion is lame, religion without science is blind...Albert Einstein
by vbo on Thu Oct 9th, 2008 at 12:38:05 AM EST
[ Parent ]
States' Actions to Block Voters Appear Illegal    
Published: October 8, 2008
New York Times

Tens of thousands of eligible voters in at least six swing states have been removed from the rolls or have been blocked from registering in ways that appear to violate federal law, according to a review of state records and Social Security data by The New York Times.
-----
Although much attention this year has been focused on the millions of new voters being added to the rolls by the candidacy of Senator Barack Obama, there has been far less notice given to the number of voters being dropped from those same rolls.

States have been trying to follow the Help America Vote Act of 2002 and remove the names of voters who should no longer be listed; but for every voter added to the rolls in the past two months in some states, election officials have removed two, a review of the records shows.
-----
In addition to the six swing states, three more states appear to be violating federal law. Alabama and Georgia seem to be improperly using Social Security information to screen registration applications from new voters. And Louisiana appears to have removed thousands of voters after the federal deadline for taking such action.
-----
The requirement exists because using the federal database is less reliable than the state lists, and is more likely to incorrectly flag applications as invalid. Many state officials seem to be using the Social Security lists first.

In the year ending Sept. 30, election officials in Nevada, for example, used the Social Security database more than 740,000 times to check voter files or registration applications and found more than 715,000 nonmatches, federal records show. Election officials in Georgia ran more than 1.9 million checks on voter files or voter registration applications and found more than 260,000 nonmatches.
-----
"Just as voting machines were the major issue that came out of the 2000 presidential election and provisional ballots were the big issue from 2004, voter registration and these statewide lists will be the top concern this year," said Daniel P. Tokaji, a law professor at Ohio State University.



Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Thu Oct 9th, 2008 at 02:14:53 AM EST
[ Parent ]
Link to NY Times story above

It is incredible to me that the Times has to be the one to bust this open. You'd think the Democratic Party and/or the Obama campaign would be all over it.
I've assumed that since Sen. John Conyers' report, the Dems would have a detailed, agressive plan to avoid a repeat of the Ohio debacle in 2004- silly me.

Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Thu Oct 9th, 2008 at 03:24:31 AM EST
[ Parent ]
Me too, I've never understood the Dems complacency over this. I guess fixing it is one of the obring committee jobs with neither profile nor credit, so it's seen as getting in the way of seeking campaign contributions. Plus there's the "I got in so the system ain't too broke" attitude.

But there's just been too much of this in the last two years to excuse as incompetence. I'm beginning to wonder if there isn't a little bit of "bi-partizan" cross party collusion going on at senior levels. Lieberman isn't the only blue dog to have gone native.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Thu Oct 9th, 2008 at 09:38:46 AM EST
[ Parent ]
US national debt clock runs out of digits

The Durst Organisation says it plans to update the sign next year by adding two digits. That will make it capable of tracking debt up to a quadrillion dollars.
by det on Thu Oct 9th, 2008 at 02:41:03 AM EST
[ Parent ]
George F. Will - McCain in a Bear Market - washingtonpost.com

Time was, the Baltimore Orioles' manager was Earl Weaver, a short, irascible, Napoleonic figure who, when cranky, as he frequently was, would shout at an umpire, "Are you going to get any better or is this it?" With, mercifully, only one debate to go, that is the question about John McCain's campaign.

In the closing days of his 10-year quest for the presidency, McCain finds it galling that Barack Obama is winning the first serious campaign he has ever run against a Republican. Before Tuesday night's uneventful event, gall was fueling what might be the McCain-Palin campaign's closing argument. It is less that Obama has bad ideas than that Obama is a bad person.

This, McCain and his female Sancho Panza say, is demonstrated by bad associations Obama had in Chicago, such as with William Ayers, the unrepentant terrorist. But the McCain-Palin charges have come just as the Obama campaign is benefiting from a mass mailing it is not paying for. Many millions of American households are gingerly opening envelopes containing reports of the third-quarter losses in their 401(k) and other retirement accounts -- telling each household its portion of the nearly $2 trillion that Americans' accounts have recently shed. In this context, the McCain-Palin campaign's attempt to get Americans to focus on Obama's Chicago associations seems surreal -- or, as a British politician once said about criticism he was receiving, "like being savaged by a dead sheep."

Recently Obama noted -- perhaps to torment and provoke conservatives -- that McCain's rhetoric about Wall Street's "greed" and "casino culture" amounted to "talking like Jesse Jackson." What fun: one African American Chicago politician distancing himself from another African American Chicago politician by associating McCain with him.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Oct 9th, 2008 at 04:09:41 AM EST
[ Parent ]
"Are you going to get any better or is this it?"

Aha hah ha ha

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Thu Oct 9th, 2008 at 09:42:17 AM EST
[ Parent ]
McCain's rhetoric about Wall Street's "greed" and "casino culture" amounted to "talking like Jesse Jackson."

It also sounds like Keynes in The General Theory.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 09:44:37 AM EST
[ Parent ]
Well, it's too much to expect Will to mention the name of the Antichrist.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Oct 9th, 2008 at 11:49:46 AM EST
[ Parent ]
G.O.P. Facing Tougher Battle for Congress - NYTimes.com

WASHINGTON -- The economic upheaval is threatening to topple Republican Congressional candidates, putting more Senate and House seats within Democratic reach less than a month before the elections, lawmakers and campaign strategists say.

Top campaign officials for both parties, pollsters and independent experts say the intense focus on the economic turmoil and last week's bailout vote have combined to rapidly expand a Democratic advantage in Congressional contests. Analysts now predict a Democratic surge on a scale that seemed unlikely just weeks ago, with even some Republicans in traditional strongholds fighting for their political careers, and Democratic leaders dreaming of ironclad majorities.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Oct 9th, 2008 at 04:14:52 AM EST
[ Parent ]
U.S. Study Is Said to Warn of Crisis in Afghanistan - NYTimes.com

WASHINGTON -- A draft report by American intelligence agencies concludes that Afghanistan is in a "downward spiral" and casts serious doubt on the ability of the Afghan government to stem the rise in the Taliban's influence there, according to American officials familiar with the document.

The classified report finds that the breakdown in central authority in Afghanistan has been accelerated by rampant corruption within the government of President Hamid Karzai and by an increase in violence by militants who have launched increasingly sophisticated attacks from havens in Pakistan.

The report, a nearly completed version of a National Intelligence Estimate, is set to be finished after the November elections and will be the most comprehensive American assessment in years on the situation in Afghanistan. Its conclusions represent a harsh verdict on decision-making in the Bush administration, which in the months after the Sept. 11, 2001, attacks made Afghanistan the central focus of a global campaign against terrorism.

Beyond the cross-border attacks launched by militants in neighboring Pakistan, the intelligence report asserts that many of Afghanistan's most vexing problems are of the country's own making, the officials said.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Oct 9th, 2008 at 04:16:53 AM EST
[ Parent ]
Somali Pirates Said to Be Near Arms Cargo Deal - NYTimes.com

NAIROBI, Kenya -- There were mixed signals on Wednesday about the progress of the ransom negotiations for the arms-laden Ukrainian freighter that Somali pirates hijacked nearly two weeks ago.

Business associates of the pirates said that a deal to pay the pirates millions of dollars was close and that the freighter would be freed.

"The pirates and the shipowners have agreed on around $8 million," said Ahmed Omar, a businessman in Xarardheere, the notorious pirate den near the location where the hijacked ship is anchored. "The ship may be freed today or tomorrow."

Maritime officials in Kenya were a bit more cautious, saying crucial details had yet to be worked out. For starters, the pirates were asking for guarantees that they would not be captured after releasing the freighter or blown out of the water by the armada of American warships circling them.

[...]

In this instance, the pirates started by asking for $35 million and then dropped their demand to $20 million, saying all along that they were ready to entertain discounts. More than 25 ships have been hijacked this year off Somalia's craggy coastline; the going ransom is usually $1 million to $2 million.

They have said that after the money is paid -- preferably in American $100 bills -- they will release the ship, the arms and the 20 sailors on board.

"Tanks a lot guys!"

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt ät gmail dotcom) on Thu Oct 9th, 2008 at 04:20:55 AM EST
[ Parent ]
THIS, THAT, AND THE OTHER
by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:52:01 PM EST
World's first double arm transplant patient delighted - Telegraph
The world's only transplant recipient of two full arms said the feeling of being whole again was "indescribable".

Karl Merk, a German dairy farmer whose arms had been amputated after an accident, said he felt like a "whole man" again as he spoke for the first time since the operation in July.

"The feeling is indescribable. Every day I gain more mobility," said Mr Merk as he showed off the arms, which are being supported by a special "corset" while the healing continues.

Six years ago Mr Merk lost his arms in a farm maize threshing machine. Found by a colleague as he lay bleeding to death, he screamed: "Kill me, kill me!" But the man saved his life instead.

Doctors at the teaching hospital of the Technical University in Munich then planned a world first: to transplant two arms at once. The procedure was conducted over two days in July.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:58:10 PM EST
[ Parent ]
Arctic Soil May Contain Nearly Twice Greenhouse-Gas Producing Material Than Previously Estimated

ScienceDaily (Oct. 8, 2008) -- Frozen arctic soil contains nearly twice the greenhouse-gas-producing organic material as was previously estimated, according to recently published research by University of Alaska Fairbanks scientists.

School of Natural Resources & Agricultural Sciences professor Chien-Lu Ping published his latest findings in Nature Geoscience. Wielding jackhammers, Ping and a team of scientists dug down more than one meter into the permafrost to take soil samples from more than 100 sites throughout Alaska. Previous research had sampled to about 40 centimeters deep.

After analyzing the samples, the research team discovered a previously undocumented layer of organic matter on top of and in the upper part of permafrost, ranging from 60 to 120 centimeters deep. This deep layer of organic matter first accumulates on the tundra surface and is buried during the churning freeze and thaw cycles that characterize the turbulent arctic landscape.

The resulting patterned ground plays a key role in the dynamics of carbon storage and release, Ping found. When temperatures warm and the arctic soil churns, less carbon from the surface gets to the deeper part of the soil. The carbon already stored in the deeper part of the soil is released into the atmosphere as carbon dioxide, methane and other gases.

Ping predicted that a two- to three-degree rise in air temperatures could cause the arctic tundra to switch from a carbon sink--an area that absorbs more carbon dioxide than it produces--to a carbon source--an area that produces more carbon dioxide than it absorbs. The more organic material stored in the tundra, the greater the potential effect of future releases, Ping stated.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Oct 9th, 2008 at 04:07:18 AM EST
[ Parent ]
On Parched Farms, Using Intuition to Find Water - NYTimes.com

WATERFORD, Calif. -- Phil Stine is not crazy, or possessed, or even that special, he says. He has no idea how he does what he does. From most accounts, he does it very well.<

"Phil finds the water," said Frank Assali, an almond farmer and convert. "No doubt about it."

Mr. Stine, you see, is a "water witch," one of a small band of believers for whom the ancient art of dowsing is alive and well.

Emphasis, of course, on well. Using nothing more than a Y-shaped willow stick, Mr. Stine has as his primary function determining where farmers should drill to slake their crops' thirst, adding an element of the mystical to a business where the day-to-day can often be painfully plain.

[...]

Scientists pooh-pooh dowsers like Mr. Stine, saying their abilities are roughly on par with a roll of the dice. But witches have been much in demand of late in rural California, the nation's biggest agricultural engine, struggling through its second year of drought.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Oct 9th, 2008 at 04:13:15 AM EST
[ Parent ]
Anyone can dowse, you just have to accept that you can.

I'll swap lessons for beer

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Thu Oct 9th, 2008 at 09:57:49 AM EST
[ Parent ]
Not sure that it's teachable.

Back in '91 my wife and I went exploring in the then just recently former GDR for 2 weeks. In one place we came across a gang of workers who were assigned to repair a water main, which they didn't know where it was.

So one of the guys was quartering the area holding two pieces of coathanger bent at right angles loosely in his fists so that they pointed ahead of him. Whenever he walked over the pipe (or at least some underground water) the pieces of coathanger would cross.

It never works for me but it does for my wife. Go figure.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt ät gmail dotcom) on Thu Oct 9th, 2008 at 12:00:36 PM EST
[ Parent ]
You were supposed to have taught Barbara and I a loooong time ago...

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 12:10:34 PM EST
[ Parent ]
Yea, and one day we will. I don't remember you offering beer, that's possibly the problem. Tho' right now I'll forgoe that part...

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Oct 9th, 2008 at 12:57:31 PM EST
[ Parent ]
I'll offer you beer if that's the limiting factor.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 01:00:45 PM EST
[ Parent ]
BBC NEWS | Health | Testicle stem cell harvest plan
A man's testicles might be a source of stem cells to help him fight serious diseases, US scientists have shown.

They extracted early-stage sperm cells from mice, then turned them into cells capable of becoming different tissues.

Writing in Nature, the Weill Cornell Medical College team said their work might lead to treatments for illnesses such as Alzheimer's and diabetes.

However, some doubt has been expressed on the willingness of men to undergo the procedure to extract the cells.



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu Oct 9th, 2008 at 07:29:49 AM EST
[ Parent ]
KLATSCH
by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:52:23 PM EST
Brigitte Bardot calls Sarah Palin a 'disgrace to women' - Telegraph

The sixties sex symbol said that Republican John McCain's running mate was "disconcertingly stupid" and that she hoped she would lose the November 4 presidential elections.

Referring to Mrs Palin's now famous self-portrait as a "pitbull with lipstick", Mrs Bardot - who runs an animal rights foundation - said: "I know dogs well and I can assure you that no pitbull, no dog, nor any other animal is as dangerous as you are."

"I hope you lose these elections because that would be a victory for the world," she went on.

"By denying the responsibility of man in global warming, by advocating gun rights and making statements that are disconcertingly stupid, you are a disgrace to women and you alone represent a terrible threat, a true environmental catastrophe," wrote the one-time screen legend.

by Fran (fran at eurotrib dot com) on Wed Oct 8th, 2008 at 02:57:51 PM EST
[ Parent ]
Ah, one of my favorite "sex kittens" from my youth.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Wed Oct 8th, 2008 at 04:39:24 PM EST
[ Parent ]
apart from her work to support animal rights (whic, while worthy in principle, can become ridiculous when it becomes exclusionary of anytinhg else), she's become a racist, hateful extreme right harpy.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 03:37:52 AM EST
[ Parent ]
she's become a racist, hateful extreme right harpy.

True. However, given that, she's still to the left of Sarah Palin...

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Thu Oct 9th, 2008 at 03:56:35 AM EST
[ Parent ]
Still, even a stopped clock...

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Thu Oct 9th, 2008 at 04:05:17 AM EST
[ Parent ]
Who had a beautiful face and a GREAT body!  Ah me, the testicles never lie.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Thu Oct 9th, 2008 at 07:23:42 AM EST
[ Parent ]
Thats quite a sexist comment even in quotes. :-)
by Fran (fran at eurotrib dot com) on Thu Oct 9th, 2008 at 05:07:16 AM EST
[ Parent ]
Pick you word: surrealistic, hilarious, deeply worrying...


Job Creators Prefer John McCain 4-to-1 Over Barack Obama

Over 70 percent of CEOs fear an Obama presidency will be a disaster

Chief Executive magazine's most recent polling of 751 CEOs shows that GOP presidential candidate John McCain is the preferred choice for CEOs.  According to the poll, which is featured on the cover of Chief Executive's most recent issue, by a four-to-one margin, CEOs support Senator John McCain over Senator Barack Obama.  Moreover, 74 percent of the executives say they fear that an Obama presidency would be disastrous for the country.

"The stakes for this presidential election are higher than they've ever been in recent memory," said Edward M. Kopko, CEO and Publisher of Chief Executive magazine. "We've been experiencing consecutive job losses for nine months now. There's no doubt that reviving the job market will be a top priority for the incoming president. And job creating CEOs repeatedly tell us that McCain's policies are far more conducive to a more positive employment environment than Obama's."

[Cyrille's Jawdrop™ Technology]


In expressing their rejection of Senator Obama, some CEOs who responded to the survey went as far as to say that "some of his programs would bankrupt the country within three years, if implemented."  In fact, the poll highlights that Obama's tax policies, which scored the lowest grade in the poll, are particularly unpopular among CEOs.

[Jerome's WEEEEEE™ Technology]

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

by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 07:10:39 AM EST
[ Parent ]
Good God. Yeah, let's refer to CEOs as job creators, why not? These would be the same outsourcing, off-shoring, cost cutting CEOs, would it? The ones who's primary interest is self enrichment, followed some way behind by 'shareholder value'? Where exactly in their priority list is job creation? And would this be job creation at the cheapest rate they can get away with while engaging in union destruction and suppression to ensure a cheap and pliable, eh, I mean flexible, workforce? Of course they don't like the tax policies that would have them less favoured than now. Bankrupt the country? Hardly! Forcing a few top people to live in not-quite-as-great affluence? Possibly. If we are lucky.
by someone (s0me1smail(a)gmail(d)com) on Thu Oct 9th, 2008 at 07:56:13 AM EST
[ Parent ]
Actually, my jaw just broke my desk. It fell that hard.

So, let me see if I get this right (as a scientist, as you know):

"We've been experiencing consecutive job losses for nine months now."

Exhibit A presents a prolonged episode of job losses in a country seeing a 1% yearly increase of the workforce. This came on the back of the most disappointing business cycle ever.

Exhibit A, coincidentally, has been for 8 years run by a Republican administration, and for all but 2 of the last 14 years a Republican congress. Those 2 years off the trend were marked by a record level of filibuster and vetoes, so that there could not be a significant deviation from Republican policies.

Exhibit A also presents significant traces of out of control trade deficits, budgetary deficits, fiscal evasion, state agency dereliction and crumbling infrastructure...

There can only be one conclusion: it needs more Republican policies. Hey, it's all there in a nutshell:

"'some of his programs would bankrupt the country within three years, if implemented.'  In fact, the poll highlights that Obama's tax policies, which scored the lowest grade in the poll, are particularly unpopular among CEOs"

As we know, our scientific (I would produce the figures but it's way too wonkish for you clever executives) research conclusively proves that more taxes bring instant country bankrupcy, as shown by all those other OECD countries which have higher taxes.

"The womb that spawned that thing is fertile yet"

by Cyrille (cyrillev domain yahoo.fr) on Thu Oct 9th, 2008 at 09:37:02 AM EST
[ Parent ]
So where is everybody this morning? You all still have a lot of work?

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 07:11:21 AM EST
[ Parent ]
Sorry, my mother handed me the hedge trimmers and bade me work off my housekeeping.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Oct 9th, 2008 at 10:02:46 AM EST
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