CoV BBS

Re:2010: The year of the global insurrection?

heroldwa@storm.ca (Fritz) — Mon, 15 Mar 2010 14:32:57 +0100

The symbolic spilling of real blood is an interesting twist. I wonder if there are any precedence for this approach ?

Cheers

Fritz

Source: BBC News
Author: n/a
Date: Monday, 15 March 2010

Thai Prime Minister Abhisit Vejjajiva has rejected a demand from protesters to resign and call elections.

He spoke on national TV as tens of thousands of demonstrators gathered outside the barracks where he is based.

The rally, led by red-shirted supporters of ousted PM Thaksin Shinawatra, was one of the largest in recent years.
It passed off peacefully, but two soldiers were hurt when grenades exploded inside another army base.
An army spokesman said the grenades appeared to have been fired into the compound, but said it was not clear who was responsible.
Early in the day, crowds of demonstrators gathered outside the headquarters of the 11th Infantry Battalion barracks in the north of the Thai capital.
Several thousand extra soldiers were sent to reinforce security at the barracks - to which the prime minister had moved after the demonstrators set up camp around Government House.
As the protesters' deadline for him to step down passed, Mr Abhisit appeared on national television flanked by ministers and coalition allies.
"The protesters have demanded that I dissolve the house before midday (0500 GMT) today, but the coalition parties agree the demand cannot be met," he said.
"Elections must be held under common rules and genuine calm. We have to listen to other people's voices, not just the protesters."
Mr Abhisit then left the army base by helicopter, saying he wanted to inspect the traffic.
The BBC's Rachel Harvey, who was outside the barracks, says it is not clear where he is now.
The protest passed off in a peaceful and good-humoured manner, our reporter adds, but there was no sign of compromise from either side.
The protesters have now returned from the barracks to their base camp at Government House. Red-shirt leaders said they would meet to discuss their next move.
One protest leader said the demonstrators would each contribute a small amount of blood to be thrown on the gates of Government House on Tuesday, as a symbol of their determination.
Thaksin legacy
About 100,000 demonstrators held rallies in Bangkok on Sunday.
Political speeches culminated in a video address by Mr Thaksin, who told the crowd they were bringing democracy to Thailand.
Mr Thaksin is living in self-imposed overseas exile after receiving a two-year sentence in absentia for abuse of power; his supporters say that case was politically motivated.
The protesters say the present government was installed illegally after Mr Thaksin was ousted in a military coup in 2006, and two subsequent allied governments were deposed by court action.
The red-shirt protest leaders insist their movement is non-violent.
They say they are prepared to stay in the capital for five days, to pressure the government into calling new elections.
The military has been given extra powers to impose curfews and restrict numbers at gatherings if necessary.
The last major protests, in April 2009, turned violent, with two deaths and dozens of people injured.

James Brown's body has been stolen

heroldwa@storm.ca (Fritz) — Mon, 15 Mar 2010 03:26:32 +0100

[Fritz]All I can think is WTF and clearly not a Man's World

James Brown's body goes missing, according to his daughter

Source: NME
Author: n/a
Date: March 12, 2010

James Brown's body has been stolen, according to his reported love child LaRhonda Pettit.

The soul legend's body was put in a crypt after his death on Christmas Day in 2006. Since then it has been kept at his daughter Deanna's house in South Carolina while a public mausoleum was being prepared.

Pettit has now claimed the body has gone missing. Consequently, she says she is being denied the opportunity to carry out an autopsy to determine Brown's true cause of death, reports the Daily Mirror.

"My daddy's body has disappeared. I have no clue where it was taken, but I need to know where," Pettit explained.

She added: "I'm convinced his death was suspicious and I want the people responsible brought to justice. The only way to do that is to exhume his body and have an autopsy. I cannot understand why one was never conducted."

Brown died in Emory Crawford Long Hospital in Atlanta, Georgia of congestive heart failure and pneumonia.

Pettit is one of several people to come forward after his death claiming to be his love child. She was not named as a beneficiary in his will.

Re:We're Fucked - The Coming Economic Crisis

heroldwa@storm.ca (Fritz) — Mon, 15 Mar 2010 03:16:30 +0100

It starts with a thud and ends with a slap on the wrist and a whimper.

Cheers

Fritz

A postmortem on Lehman Brothers
Oh, brother
Shining a harsh light on Lehman�s bankruptcy

Source: The Economist online
Author: n/a
Date: Mar 12th 2010

IT SOUNDS distinctly unpromising. A nine-volume, 2,200-page report by a court-appointed examiner into the causes of Lehman Brothers� bankruptcy, published on Thursday March 11th, has a table of contents that lasts for 38 pages. Its most exciting finding relates to an off-balance-sheet accounting gimmick. But the work of Anton Valukas, the chairman of Jenner & Block, a law firm, is crisp, clear and explosive.

Mr Valukas and his team took more than a year to research their report. They collected more than 5m documents and reviewed an estimated 34m pages of information. Looking at Lehman�s IT systems was a particular challenge. The firm had a rat�s nest of more than 2,600 systems and applications at the time it went bust; Mr Valukas boiled that down to the 96 most relevant ones, some of which are now operated by Barclays (the buyer of Lehman�s American arm after the holding company failed). He also conducted more than 250 informal interviews, many of them with Lehman�s directors and most senior executives.

The report�s juiciest finding relates to Lehman�s use of an accounting device called Repo 105, which allowed the bank to bring down its quarter-end leverage temporarily. Repurchase (�repo�) agreements, whereby borrowers swap collateral for cash and agree to buy the collateral back later at a small premium, are a very common form of short-term financing. They normally have no effect on a firm�s overall leverage: the borrowed cash and the obligation to repurchase the collateral balance each other out.

But Repo 105 took advantage of an accounting rule called SFAS 140, which enabled Lehman to reclassify such borrowing as a sale. Lehman would give collateral to its counterparty and receive cash in return. Because the deal was being recorded as a sale, the collateral disappeared from Lehman�s balance-sheet and the bank used the cash it generated to pay down debt. To outsiders, it looked as though Lehman had reduced its leverage. In fact, the obligation to buy back the collateral remained. Once the quarter-end had come and gone, Lehman borrowed money to repay the cash and buy back the collateral, and its leverage spiked back up again.

Mr Valukas marshals plenty of evidence to back up his claim that �Lehman painted a misleading picture of its financial condition�. The effect of Repo 105 was material: the firm temporarily removed around $50 billion-worth of assets at the end of the first and second quarters of 2008, a time when market jitters about its leverage were pervasive (see table below). Mr Valukas can see no legitimate business reason to undertake the transaction, which was more expensive than a normal repo financing and had to be done through its London-based arm because Lehman was unable to get an American lawyer to agree that Repo 105 involved a true sale of assets.

He also uncovers all sorts of unguarded e-mail traffic about the practice, which employees variously described as �window-dressing� and an �accounting gimmick�. Bart McDade, who became president of Lehman in June 2008 and tried to stop the bank from being so aggressive in its use of Repo 105, described it in April of that year as �another drug we r [sic] on�. Mr Valukas believes that �colourable claims��meaning a plausible legal claim for damages�could be brought against Dick Fuld, the firm�s boss, and three of Lehman�s chief financial officers for filing �materially misleading� quarterly reports. He also thinks that Ernst & Young, Lehman�s auditor, has a case to answer for allowing these reports to go unchallenged.

Whether the report will actually lead to lawsuits remains to be seen. Mr Fuld says he did not know about the Repo 105 transactions; Ernst & Young says that Lehman�s reporting was in line with accounting principles. But even if executives were not breaching their fiduciary duties, the examiner�s report gives Lehman�s creditors and shareholders an awful lot of other reasons to feel aggrieved.
Lehman's liquidity pool was not that liquid, after all

As well as his findings on Repo 105, Mr Valukas describes how Lehman�s liquidity pool, which was designed to allow the bank to survive in stressed financial conditions for 12 months, contained cash and securities that had been assigned as collateral to its clearing banks, which grew increasingly nervous about doing business with Lehman. On September 10th 2008, just five days before it filed for bankruptcy, Ian Lowitt, the bank�s chief financial officer at the time, told investors that its liquidity pool remained strong at $42 billion. Yet an internal document from September 9th showed that it had a �low ability to monetise� almost 40% of the assets involved. The liquidity pool was not that liquid, after all.

Mr Valukas also draws back the curtain on the decisions that led Lehman into trouble in the first place. Lehman�s chiefs signally failed to see the potential contagion from the subprime implosion. In its pursuit of growth, the firm�s overall risk appetite was repeatedly increased and limits on the size of single leveraged-loan transactions were routinely ignored. Incredibly, stress tests failed to include many of Lehman�s most illiquid assets. Even when executives began to understand the scale of the risks they were taking, they kept taking on business rather than walk away from deals. Board directors were unaware for several months in 2007 that Lehman had breached its risk-appetite limit. They also did not know that executives had used a new methodology, based on aggressive revenue projections, to increase that risk-appetite threshold again in January 2008. And so on, for page after damning page.

Mr Valukas�s conclusion is that Lehman�s aggressive growth strategy and its approach to risk reflected �serious but non-culpable errors of business judgment� rather than any breach of fiduciary duties. But the stain on the reputation of the bank�s executives and directors has grown even larger.

Re:It's official - cheap oil era is over

heroldwa@storm.ca (Fritz) — Mon, 15 Mar 2010 03:09:17 +0100

We are forever hopeful with are heads in the sand ... here is the current view ... seems only yesterday we were all going to have small nuclear reactors in our basements providing virtually free energy to meet all our household needs.

Cheers

Fritz

Natural gas An unconventional glut
Newly economic, widely distributed sources are shifting the balance of power in the world�s gas markets

Source: The Economist print edition
Author : n/a
Date: Mar 11th 2010

SOME time in 2014 natural gas will be condensed into liquid and loaded onto a tanker docked in Kitimat, on Canada�s Pacific coast, about 650km (400 miles) north-west of Vancouver. The ship will probably take its cargo to Asia. This proposed liquefied natural gas (LNG) plant, to be built by Apache Corporation, an American energy company, will not be North America�s first. Gas has been shipped from Alaska to Japan since 1969. But if it makes it past the planning stages, Kitimat LNG will be one of the continent�s most significant energy developments in decades.

Five years ago Kitimat was intended to be a point of import, not export, one of many terminals that would dot the coast of North America. There was good economic sense behind the rush. Local production of natural gas was waning, prices were surging and an energy-hungry America was worried about the lights going out.

Now North America has an unforeseen surfeit of natural gas. The United States� purchases of LNG have dwindled. It has enough gas under its soil to inspire dreams of self-sufficiency. Other parts of the world may also be sitting on lots of gas. Those in the vanguard of this global gas revolution say it will transform the battle against carbon, threaten coal�s domination of electricity generation and, by dramatically reducing the power of exporters of oil and conventional gas, turn the geopolitics of energy on its head.
Deep in the heart of Texas

The source of America�s transformation lies in the Barnett Shale, an underground geological structure near Fort Worth, Texas. It was there that a small firm of wildcat drillers, Mitchell Energy, pioneered the application of two oilfield techniques, hydraulic fracturing (�fracing�, pronounced �fracking�) and horizontal drilling, to release natural gas trapped in hardy shale-rock formations. Fracing involves blasting a cocktail of chemicals and other materials into the rock to shatter it into thousands of pieces, creating cracks that allow the gas to seep to the well for extraction. A �proppant�, such as sand, stops the gas from escaping. Horizontal drilling allows the drill bit to penetrate the earth vertically before moving sideways for hundreds or thousands of metres.

These techniques have unlocked vast tracts of gas-bearing shale in America (see map). Geologists had always known of it, and Mitchell had been working on exploiting it since the early 1990s. But only as prices surged in recent years did such drilling become commercially viable. Since then, economies of scale and improvements in techniques have halved the production costs of shale gas, making it cheaper even than some conventional sources.

The Barnett Shale alone accounts for 7% of American gas supplies. Shale and other reservoirs once considered unexploitable (coal-bed methane and �tight gas�) now meet half the country�s demand. New shale prospects are sprinkled across North America, from Texas to British Columbia. One authority says supplies will last 100 years; many think that is conservative. In 2008 Russia was the world�s biggest gas producer (see chart 1); last year, with output of more than 600 billion cubic metres, America probably overhauled it. North American gas prices have slumped from more than $13 per million British thermal units in mid-2008 to less than $5. The �unconventional��tricky and expensive, in the language of the oil industry�has become conventional.

The availability of abundant reserves in North America contrasts with the narrowing of Western firms� oil opportunities elsewhere in recent years. Politics was largely to blame, as surging commodity prices emboldened resource-rich countries such as Russia and Venezuela to restrict foreign access to their hydrocarbons. �Everyone would like to find more oil,� says Richard Herbert, an executive at Talisman Energy, a Canadian firm using a conventional North Sea oil business to finance heavy investment in North American shale. �The problem is, where do you go? It�s either in deep water or in countries that aren�t accessible.� This is forcing big oil companies to get gassier.

The oil majors watched from the sidelines as more entrepreneurial drillers proved shale�s viability. Now they want to join in. In December Exxon Mobil paid $41 billion for XTO, a �pure-play� gas firm with a large shale business. BP, Statoil, Total and others are sniffing around the North American gas patch, signing joint ventures with producers such as Chesapeake Energy. A wave of consolidation is likely in the coming months, as gas prices remain low, the drillers seek capital and the majors hunt for the choicest acreage.

Shale is almost ubiquitous, so in theory North America�s success can be repeated elsewhere. How plentiful unconventional resources might be in other regions, however, is far from established. The International Energy Agency (IEA) estimates the global total to be 921 trillion cubic metres (see chart 2), more than five times proven conventional reserves. Some think there is far more. No one will really know until companies explore and drill.

The drillers are already arriving in Europe and China, which are both expected to import increasing amounts of gas�and are therefore keen to produce their own. China has set its companies a target of producing 30 billion cubic metres a year from shale, equivalent to almost half the country�s demand in 2008. Several foreign firms, including Shell, are already scouring Chinese shales. After a meeting between the American and Chinese presidents last November, the White House announced a �US-China shale gas initiative�: American knowledge in exchange for investment opportunities. The IEA says China and India could have �large� reserves, far greater than the conventional resource.

Exploration is also under way in Austria, Germany, Hungary, Poland and other European countries. The oil industry�s minnows led this scramble, but now the big firms are arriving too. Austria�s OMV is working on a promising basin near Vienna. Exxon Mobil is drilling in Germany. Talisman recently signed a deal to explore for shale in Poland. ConocoPhillips is already there. The first results from wells being drilled in Poland, in what some analysts believe is a shale formation similar to Barnett, should be released this year.

No one expects production of shale gas in Europe to make a material difference to the continent�s supply for at least a decade. But the explorers in China and Europe present a long-term worry for those who have bet on exporting to these markets. Gazprom, Russia�s gas giant, is the company most exposed to this threat, because its strategy relies on developing large�and costly�gasfields in inhospitable places. But Australia, Qatar and other exporters also face a shift in the basics of their business.
Choked

These producers are already getting a taste of the global gas glut. Almost in tandem with the surge in American production, recession brought a slump in world demand. The IEA says consumption in 2009 fell by 3%. In Europe, the drop was 7%. Consumption in the European Union will grow marginally if at all this year and will not be sufficient to clear an overhang of supplies, contracted through take-or-pay agreements signed in the dash for gas of the past decade. IHS Global Insight, a consultancy, reckons that the excess could amount to 110 billion cubic metres this year, almost a quarter of the EU�s demand in 2008.

The glut has been exacerbated by the suddenly greater availability of LNG. Importers with the infrastructure to receive and regasify LNG can now easily tap the global market for spot cargoes. This is partly a product of the recession, which dampened demand from Japan and South Korea, the leading LNG buyers. But another cause is that many exporters, not least Qatar, the world�s LNG powerhouse, spent the past decade ramping up supplies aimed at the American market. That now looks like a blunder.

America is still taking some of this LNG, but the exporters� bonanza is over before it ever really began. �You�ll always find a buyer in North America,� says Frank Harris, an analyst at Wood Mackenzie, a consultancy, �but you might not like the price.� And LNG will grow increasingly abundant as new projects due to come on stream this year add another 80m tonnes to annual supply, almost 50% more than in 2008.
Gas out, money in

Qatar�s low production costs mean it can still make money, even in North America. Others cannot. In February, for example, Gazprom postponed its Shtokman gasfield project by three years because of the change in the market. Some of the gas from that field, in the Barents Sea, was to be exported to America. But Shtokman�s gas will be costly, because the field is complex and its location makes it one of the world�s most difficult energy projects to execute. Some analysts now wonder whether gas will ever flow from Shtokman.

China offers some hope for ambitious exporters, but even there the outlook has become cloudier. The Chinese authorities want natural gas to account for at least 10% of the country�s energy mix by 2020 and are building LNG import terminals. With that target in mind, Australia, which has its own burgeoning conventional and unconventional gas supplies, has been busily building an LNG export business. But warning lights are coming on. In January, PetroChina let a deal to buy gas from Australia�s Browse LNG project expire. The original agreement was made in 2007, when LNG prices were soaring in Asia, but China can afford to be picky now. �Too many Australian LNG plants are chasing too little demand,� says Mr Harris.

The shift in the global market has left China well-placed to dictate prices. This will be another blow to Gazprom, which has long talked of exporting gas to the country. Indeed, while the Chinese and the Russians have squabbled over the terms, Turkmenistan has quietly built its own export route to China. Even if Beijing�s shale-gas plans come to nothing, supplies from Central Asia and new regasification terminals along its coast may allow China to reach its natural-gas consumption targets without pricey Siberian supplies.

The glut has weakened Gazprom�s position in Europe, too. It has been losing market share to cheaper Norwegian and spot-market supplies. In 2007 Gazprom talked of increasing its annual exports to the EU to 250 billion cubic metres. Now, says Jonathan Stern, of the Oxford Institute for Energy Studies, Gazprom will probably only ever supply the EU with 200 billion cubic metres a year (it shipped about 130 billion in 2008). The company forecast in 2008 that its gas prices in Europe would triple, to around $1,500 per 1,000 cubic metres, on the back of rising oil prices, which help set prices in long-term contracts. But the price dropped to about $350 last year and is expected to fall again in 2010. The weak market could last for another five years, believes Wood Mackenzie. Gazprom has been renegotiating with leading customers, injecting elements of spot pricing into contracts to make them more attractive.
Shtokman shtymied

Moreover, Europe�s need for new pipelines to guarantee supplies suddenly looks less pressing. Construction of Nord Stream, Gazprom�s flagship project to export gas directly to Germany through the Baltic Sea, will begin next month. It is due to come on stream in 2011. The scheduled doubling of its capacity to 55 billion cubic metres a year is in doubt, says Mr Stern, because Shtokman was to have supplied the gas for it.

Demand is a bigger problem. Even without recession or European shale, the assumption that Europe�s consumption will keep growing is looking shaky, because the EU�s efforts to boost efficiency and reduce carbon emissions are making gradual headway. Edward Christie, an economist at the Vienna Institute for International Economic Studies, says the EU could be importing a third less natural gas in 2030 than the European Commission forecast in 2005. That makes the case for additional supply lines much less compelling. The IEA expects rich European countries� demand to grow by only 0.8% a year in the next two decades, against 1.5% for the world as a whole (see chart 3).

An age of plenty for gas consumers and of worry for conventional-gas producers thus seems to be dawning. But two factors could reverse the picture again. The first surrounds the uncertainty about how fruitful shale exploration will be outside North America. A clearer understanding of the geology will emerge from pilot wells in the coming months. Second, there are reasons for caution above ground, too. Despite natural gas�s greener credentials than oil�s or coal�s, shale drilling has critics among environmentalists, who worry that water sources will be poisoned and landscapes despoiled.

The industry says cement casing of wells and the depth to which they are drilled make the practice safe and relatively unobtrusive. But so far it has been drilling mainly in North America, where land is plentiful and people are accustomed to the sight of oilmen�s detritus. In densely populated Europe, the rapacious rate at which shale plays must be drilled to sustain production is less likely to be tolerated.

Even in America, opposition to shale gas is rising. New York state has imposed a moratorium on drilling in its portion of the Marcellus Shale, which it shares with Pennsylvania. Lawmakers in Congress want to study the ecological impact of fracing. The Environmental Protection Agency, a federal body, also raised concerns about �potential risks� to the watershed.

The path of demand in gas�s new age is hard to predict, but abundant new sources could bring about profound change in patterns of energy consumption. Some of the downward pressure on price will ease: despite sedate growth, the LNG glut should dissipate, probably by 2014, says Mr Harris; and low prices will kill more projects, clearing the inventory. France�s Total thinks global demand will recover strongly enough to require another 100m tonnes a year of LNG by 2020, on top of plants already planned. However, the Energy Information Administration, the statistical arm of America�s Department of Energy, predicts decades of relatively weak prices.

If this is correct, it makes sense, for both environmental and economic reasons, for the country to gasify its power generation, half of which comes from coal-fired plants. This could be done cheaply and quickly, because America�s total gas-fired capacity (as opposed to production) already exceeds that for coal. Put a price of only $30 a tonne on carbon, say supporters, and natural gas would quickly displace coal, because gas-fired power stations emit about half as much carbon as the cleanest coal plants. The IEA agrees that penalising carbon emissions would benefit natural gas at the expense of dirtier fuels.

There would be political obstacles. The coal lobby remains strong in Washington, DC. Climate legislation struggling through Congress even includes provisions to protect �clean coal�, a term covering an array of measures, so far uncommercial, to reduce emissions from burning the black stuff. Ironically, oil companies that were once suspicious of proposals to control carbon now regard a carbon price or even a carbon tax as a potential boon to their new gas businesses.

A more radical idea, and one that would have ramifications for the global oil sector, is to gasify transport. T. Boone Pickens, a corporate raider turned energy speculator, has launched a campaign to promote this, and has support from the gas industry. By converting North America�s fleet of 18-wheeled trucks to natural gas, says Randy Eresman, boss of EnCana, a Canadian gas company, America could halve its imports of Middle Eastern oil. EnCana is promoting �natural gas transportation corridors�: highways served by filling stations offering natural gas.

All this is some way off. The coal industry will not surrender the power sector without a fight. The gasification of transport, if it happens, could also take a less direct form, with cars fuelled by electricity generated from gas.

A gasified American economy would have profound effects on both international politics and the battle against climate change. Displacement of oil by natural gas would strengthen a trend away from crude in rich countries, where the IEA believes demand has already peaked as a result of the recent spike in oil prices. Another consequence of the energy market�s bull run, the unearthing of vast new supplies of gas, could bring further upheaval. If the past decade was characterised by the energy-security concerns of consumers, the coming years could give even the world�s powerful oil producers reason to worry, as a subterranean revolution shifts the geopolitics of global energy supply again.

Re:2010: The year of the global insurrection?

heroldwa@storm.ca (Fritz) — Mon, 15 Mar 2010 02:53:13 +0100

Another take from the main stream on this topic ... yet all this alleged recover seems suspect to me. The point is still well taken on who is really hurting.

Cheers

Fritz

Europe's hypochondriacs
Most Europeans are doing better than they think, and can take more fiscal austerity

Source: The Economist print edition
Author: Charlemagne
Date: Mar 4th 2010

IMAGINE two cousins. One comes from continental Europe, France, perhaps. A hypochondriac, his life is filled with vague complaints�stress, fatigue and mysterious aches�for which he takes fistfuls of pills. He is sure that strenuous exercise is a menace to his fragile health. The other cousin is American (or British, take your pick), a risk-taker devoted to extreme sports. Shunning doctors, he feels as strong as an ox, although he has been drinking and overeating for years. Eventually, in 2008, he succumbs to a massive heart attack while out jogging. As far as his French cousin is concerned, a deep truth has thus been confirmed: that exercise is bad for you.

Substitute free-market competition for exercise, and you have the European debate over the financial crisis. Sober discussion about how to manage the instability of markets is giving way to a simpler fable. Too many voters now believe that the credit crunch has proved that globalisation is bad for you. And too many politicians are happy to endorse such views. In a televised meeting with voters in January the French president, Nicolas Sarkozy, denounced Renault for planning to build a new car in Turkey, saying �I do not accept that cars sold in France should be manufactured abroad.�

More recently, politicians have condemned speculators for picking on weak links in the euro-area. Jean-Claude Juncker, the prime minister of Luxembourg and president of the Eurogroup of finance ministers, has declared that governments must show �the primacy of politics� over markets. In an unexpected Bela Lugosi moment, Mr Juncker said governments had �instruments of torture in the basement�, and would readily �display� them.

In a more thoughtful speech, the new president of the European Council, Herman Van Rompuy, noted that Europeans were �anxious�, as they watched the economic strength of emerging countries like China, India or Brazil turning into political power. As long as globalisation was seen mainly as economic, Europeans felt as if everyone could win from it, argued Mr Van Rompuy. But now that other world powers are rising, Europeans fear that unstoppable competition may take away their jobs and undermine their welfare states.

In a new paper a French academic from SciencesPo, Zaki La�di, pulls together data to demonstrate that Europe is risk-averse (�Europe as a Risk Averse Power�, Garnet). Most Europeans dispute the idea of just war, he notes. Many fear genetically modified crops. They are less likely to own stocks and shares than Americans, even though some are assiduous savers against a rainy day (three-quarters of all French household financial assets are free from capital risk). Mr La�di cites a �job protection index� drawn up by the OECD club of rich countries. On average, this shows, it is 12 times harder to lay off permanent workers in Europe than it is in America.

The French are outliers in western Europe, marked by unusual pessimism and hostility to free markets. Jean-Paul Delevoye, France�s m�diateur de la R�publique, a sort of national ombudsman, made front-page news in February by declaring that French society was �psychologically exhausted�. In a poll by the CSA institute 56% of French respondents said it was somewhat or very possible that they could end up homeless (despite living in one of the world�s most generous welfare states).

French politicians play up to this national hypochondria. Like a cynical quack, Mr Sarkozy prescribes homeopathic cures in which policies like protectionism are so much diluted that they cease to function. Elsewhere EU governments have surrendered to the first sign of protests by reversing austerity measures almost as soon as they announce them. The Spanish have proved especially feeble, with ministers twice proposing and then swiftly backtracking on reforms, once over a rise in the legal pension age, and once over public-sector pay cuts.
Perks and privileges

Even in the worst-hit countries, protests rarely come from the main victims of the crisis: the young, immigrants and temporary workers. Unemployment in Spain is close to 20%, but the loudest squeals have come from full-time workers arguing against raising the pension age to 67. Greek civil servants are mobilising to defend generous pensions that most of their countrymen will never enjoy. Other strikers include Greek tax collectors (whose bribe-taking is one reason why the country is broke) and taxi drivers furious over plans to make them issue receipts, keep accounts and pay taxes on their full incomes. Elsewhere, strikers have included French air-traffic controllers, said in a recent study by French state auditors to work fewer than 100 days a year�though nobody knows for sure, as their perks include shift patterns kept secret from senior management.

It is perhaps no surprise to find that organised workers in positions of privilege, including many in the public sector, fight the hardest and squeal the most in defence of their benefits. But European governments know that they have been living beyond their means�and so, deep down, do most voters. Besides, hypochondriac Europe is stronger than it thinks. German manufacturing has weathered the crisis quite well, partly because Germany�s economy has become more Anglo-Saxon in recent years than its political leaders care to admit. Poland avoided recession altogether. Italy has escaped any upsurge in its deficit. France�s companies are in better shape than its public opinion. Just look at Renault: despite being hauled over the coals, it continues to make more cars abroad than at home. Politicians need to hold their nerve and make cuts. They should also remember what doctors have always known: those who shout loudest are not always the ones in the most pain.

For once, the anniversary of a wartime battle in Latvia should pass off peaceful

heroldwa@storm.ca (Fritz) — Mon, 15 Mar 2010 02:45:20 +0100

History is never quite as straight forward as Fox News would have us 'believe'.

Cheers

Fritz

Harmony in Riga

Source: The Economist online
Author: n/a
Date: Mar 11th 2010

THAT March follows February is not a state secret, but it sometimes seems to come as a surprise to Latvian officials. Sometime in February, they notice that March 16th is approaching and start worrying, belatedly, about what outsiders will think.

That date is the anniversary of a battle in 1944, when two Latvian units raised by the Nazis fought against the Soviets side by side, under Latvian command, for the only time during the war. The commemoration highlights a sharp historical controversy in the ex-communist region. On one side are those who regard those Estonians, Latvians and others who fought on the Nazi side as wilful collaborators with the genocidal regime of Adolf Hitler. That they bore the uniforms of the SS�the epitome of Nazi brutality�is a key incriminating fact. Given the slaughter of Jews in the Baltic states during the war, the only defensible position is to accept that the Soviet forces were liberators. Any form of commemoration of their opponents, such as the Latvian SS, is tantamount to nostalgia for the Nazis.

Not this year

In the middle are those that see mitigating circumstances. By this late stage in the war the �SS� label was used for all conscripted non-Germans, who were not allowed to join the Wehrmacht. The label �volunteer� was a Nazi propaganda trick: the vast majority of soldiers in these units were conscripts. Though many war criminals did join the new units, fighting in the Third Reich�s military forces was not in itself a war crime. The Soviet claim that the Estonian and Latvian SS were �traitors� is based on the idea that the 1940 annexation of the Baltic states into the Soviet Union was legal. That is not an approach that any civilised country accepted then, or believes today.

On the other side are those who think that Latvians and others who fought against the Red Army were fighting in a just cause: to defend their countries against a return to the horrors of Soviet rule they had experienced in 1940-41. Their military prowess and bravery in a doomed fight deserves recognition, particularly given the huge casualties and persecution they experienced after the end of the war. It is this last group that most wants to mark March 16th.

The anniversary is marked not by a march or parade. Instead, veterans of the Latvian units, in civilian attire, lay flowers at the Freedom Monument in Riga, in memory of their fallen comrades. The event attracts unpleasant attention from neo-Nazi and skinhead groups on one side, and self-proclaimed anti-fascists on the other.

Russia usually makes a big deal of this. Tarring Latvia (and Estonia) as �fascist� is a big theme of Kremlin propaganda. Claiming that the authorities honour �SS veterans� (or at least permit them to meet in public) adds an extra twist. By skilful manoeuvring and news management, Estonia has managed to defuse the issue. But in Latvia, the authorities have found it a perennial and perplexing headache.

This year, the pot is, for once, off the boil. Regnum, a normally polemical Russian news website, published a remarkably balanced commentary here (in Russian). Riga city council has banned the veterans� wreath-laying.

This reflects Latvia�s changing politics. Riga is run by a coalition led by the Harmony Centre party, which has good chances in the October parliamentary elections. The party is mainly Russian-led, but its pro-welfare policies attract Latvian voters too. A big row over March 16th would polarise opinion, driving Latvian voters to support the mainstream parties that thrive on fears of Kremlin mischief-making. The leaders of Harmony Centre don�t want that. Neither do their friends in Russia.

Re:The American Ruins

heroldwa@storm.ca (Fritz) — Mon, 15 Mar 2010 02:39:05 +0100

And look where it is being spent ...

Sigh

Fritz

Source: The Economist print edition
Author: n/a
Date: Feb 18th 2010

Missile defence in Europe

The next salvo : America�s reconfigured anti-missile shield still irks Russia

READ the small print. That would have been good advice for foes and allies alike when America announced in September last year that it would abandon its plans for anti-missile defences in Poland and the Czech Republic, in favour of a new system initially based on ships.

Some saw that as a sell-out. Russia was being appeased as part of President Barack Obama�s �reset� of relations with the Kremlin, and the ex-communist countries were being punished for supporting the Bush administration. Five months later, that reading of events looks mistaken.

The new system, the Obama administration officials said at the time, will be more flexible and will have a land component from 2015. Poland will eventually host one base. And earlier this month Romania�after the briefest of talks�announced that it would be the site for interceptors. American officials are trying to find a consolation prize for Bulgaria, the runner-up, which says it would like a base too.

This has annoyed Russia. Its foreign minister, Sergei Lavrov, said the Kremlin had complained to America about the Romanian �surprise� followed by a Bulgarian one. In fact, America itself seems to have been caught unprepared by the enthusiasm of its allies. It had expected protracted negotiations, of the kind it had pursued with Poland. This would have provided a chance to soothe Russian feelings at a time when America is seeking its help to impose sanctions against Iran.

Echoing earlier Russian threats (now rescinded) to deploy nuclear missiles in the Kaliningrad enclave, a Russian-backed separatist enclave in Moldova has offered to host Russian Iskander short-range rockets in response to the planned base in Romania. That may have more to do with wrong-footing the new pro-western, pro-Romanian government in Moldova than pleasing Russia, which declined the offer.

If American technology develops as expected, by 2018 the new shield would cover almost all of NATO�s European members against an Iranian attack�only a small part of Turkey would be exposed. That is a big change from the previous scheme, which was intended mainly to protect America from an intercontinental threat, leaving chunks of Europe unprotected. The new system poses even less of a threat to Russia�s nuclear arsenal (the Americans say neither ever did). The SM-3 interceptors now planned have a shorter range and fly less quickly than the rockets proposed by the Bush administration. Moreover, much of the system�the tracking radars and the Romania-based interceptors�will be deployed further south, unable to interfere with Russian missiles heading for America over the Arctic.

The main basis for the Kremlin�s complaint is political. Though Russia grudgingly accepted that ex-communist countries could join NATO, it sees the creation of American bases there as a breach of a promise made when the Soviet Union consented to German reunification. (American officials insist no such promise was ever given.)

Regardless, America is making other security arrangements. It is placing Patriot anti-aircraft missiles in Poland. More significantly, it has pushed NATO into agreeing to draw up military contingency plans to defend the Baltic states. It will hold drills there later this year. Russia�s growling may have brought results�but probably not the ones that Moscow wanted.

Re:Analysis: Gas crisis forced a reluctant European Union to act

heroldwa@storm.ca (Fritz) — Mon, 15 Mar 2010 02:33:07 +0100

Another sign of the energy squabbles yet to come ....

Cheers

Fritz

Source: The Economist print edition
Author N/A
Date: Mar 4th 2010

Energy security in Europe Central questions

United in the cause of undermining Russian pipeline monopolies

BUDAPEST AND WARSAW

DOES �Central Europe� exist? It depends on the political climate. Amid worries that France and Germany are stitching up the European Union�s decision-making, the Czech Republic, Hungary, Poland and Slovakia are reviving their ties and pushing shared ideas on energy security and relations with the east.

The alliance began in Visegrad, a Hungarian town, in 1991, when even the EU�s waiting-room seemed distant. Once dreams of joining Western clubs became reality, co-operation all but dissolved. New members shunned anything that made them seem different from the rest. Squabbles, most recently over the treatment of ethnic Hungarians in Slovakia, dominated Visegrad meetings. Some even suggested winding the club up.

Not any more. At a summit in Budapest on February 24th Visegrad showed signs of renewed life. The big shift is in Poland, where go-it-alone policies have given way to enthusiasm for working with the neighbours. Under the voting rules of the Nice treaty, in force until 2014, Visegrad countries have as many votes in the EU as France and Germany combined.

Next year Hungary and Poland will each have six months in the EU�s rotating presidency. Eurocrats in Brussels like to portray the rotating presidency as largely redundant now there is a permanent European Council president. The Poles and Hungarians are working closely together to disprove this. Hungary wants a �Danube strategy� to divert EU money and attention to the river basin. Poland supports this, in return for Hungarian backing for more EU aid to countries such as Georgia, Moldova and Belarus.

The group is gaining allies. �Visegrad-Plus� adds some neighbours, largely from the former Austro-Hungarian empire. Most of these (especially the core four) depend heavily on Russian gas and oil. These are typically costly and come from clapped-out fields along ageing pipelines through unreliable transit countries, with unwelcome political conditions attached.

One way to change this would be to turn the east-west gas pipelines into a grid, with interconnectors running north to south. New Hungarian pipelines to Romania and Croatia will be finished this year. A Czech-Polish connector will open in the summer of 2011. An EU-financed Bosnian-Serbian link will be announced on March 5th. A second idea is coastal terminals in Poland and Croatia to import liquefied natural gas by tanker from countries such as Qatar. The third plan is Nabucco, an ambitious pipeline to connect Caspian and Iraqi gasfields to Europe via Turkey.

Visegrad is also pushing for EU rules on mutual help in energy crises. These could offer the region greater security. But big obstacles remain. One is Russia, which is intensifying its co-operation with friendly energy companies in France, Germany and Italy. On a trip to France, Russia�s president, Dmitry Medvedev, started formal talks on the sale of up to four Mistral-class warships, while France�s GDF Suez gained a 9% stake in the Nord Stream pipeline.

Russia also continues to push South Stream, a Russian-backed Black Sea pipeline. But it now has less backing than Nabucco. The new Croatian prime minister, Jadranka Kosor, visited Moscow this week and signed up to receive gas from South Stream. But Hungary and other countries have stiffened Croatian resistance to other Russian plans, such as the attempt to gain control of an oil pipeline from the Croatian coast to Hungary. That is a lifeline for Hungary�s energy company, MOL, which otherwise depends solely on oil from the east and is fighting attempts by a Russian company, Surgutneftegaz, to gain control.

The biggest problem is that energy security costs money. Gas interconnectors, for example, sound fine. But the extra competition they bring hits market share for companies used to cosy national monopolies. The Visegrad governments may gripe about west Europeans. But they have plenty to do on the home front.

Re:Obama - Put to the test fails dismally.

heroldwa@storm.ca (Fritz) — Mon, 15 Mar 2010 02:14:50 +0100

Still nothing seems to be what it is and this can't be going anywhere good, none the less interesting to see how the 'Empire' views US politics.

Cheers

Frtz

Source: Economist Print Edition
Author: Lexington
Date: Mar 4th 2010

Angry white men

Will piqued pale males hand the Republicans a victory in November?

RACISM explains a lot of white opposition to Barack Obama, say some Democrats. It would be foolish to dismiss this argument out of hand. Lexington walked into a shop in Millington, Tennessee last week and asked the white gentleman behind the counter what he thought of the 44th president. �He�s a fucking nigger,� came the reply. The shopkeeper then helpfully explained that he was �not bashful� about expressing his opinions.

Bigotry cannot explain, however, why Mr Obama�s approval rating among white Americans has fallen since he took office, from roughly 60% to 40%. As the president pointed out in September: �I was actually black before the election.� White voters have changed their view of Mr Obama not because of his skin colour, but because of what he has done�and what he has failed to do�since he took office. And although he is not on the ballot this year, this matters. The less people admire the president, the less likely they are to vote for his party in the mid-terms.

Consider David Peel, another white Tennessean whom Lexington met outside a hardware store in Millington. He had just bought some spare wheels for his trailer, which he planned to use for his weekend mission work: helping to rebuild a school playing field in a poor, black district of nearby Memphis. As a Christian, he says, he does not believe in race: �We are all brothers and sisters.� He thinks Mr Obama is a nice guy, but naive. He thinks it is a lousy idea to try terrorists in civilian courts, where a judge could �release them with a stroke of a pen�. He is appalled that the Obama administration wants terrorists to be swiftly informed of their right to remain silent. �If we Mirandise these guys, we aren�t going to get anything out of them,� he says.

In 2008 Mr Peel voted for John Tanner, a Democrat, for the House of Representatives. Mr Tanner is the kind of Democrat who does best in the South: pro-gun, pro-life, fiscally hawkish and a co-founder of the moderate-to-conservative caucus of �Blue Dog� Democrats. But he is retiring this year. Mr Peel is thinking of voting for a Republican, any Republican, to replace him. Since Mr Peel is a trial lawyer, this would be against his economic interests, but moral issues matter more, he says. And top Democrats �are not remotely in touch with any of the people walking out of this store,� he adds, gesturing at the hardware shop behind him. He is not alone: although most of the counties that make up Mr Tanner�s district have been Democratic since the 19th century, the smart money says the seat will go red this year.

Democrats have a Caucasian problem. It is not new: no Democratic presidential candidate has won the white vote since Lyndon Johnson. Mr Obama actually did better among whites than John Kerry did. But in the past year white voters have become grumpier, and this is especially true of white males. There is even talk of a repeat of 1994, when a surge of �angry white men� helped Republicans take over both chambers of Congress.

Sixteen years ago, it was blue-collar white men who were the angriest. This year, too, they are smarting. The recession has hit hardest the most macho trades, such as building and manufacturing. Two-thirds of the jobs destroyed since it began belonged to blue-collar men. Black men have been worse affected than whites, but their loyalty to Mr Obama and his party is unshakeable. Not so for white men, whose unemployment rate was a comfortable 3.9% in 2006 and still only 6.8% when Mr Obama was elected, but is now a painful 10.3%. Those who can no longer provide for their families feel emasculated. Those who still have jobs fear losing them. Since Democrats now run Washington, Democrats get most of the blame. And white men are disproportionately sceptical of Mr Obama�s proposed solutions. Seven out of ten prefer small government to big government. �I don�t like the way they�re giving away all that money,� says Steve Roberts, a welder in Arkansas. �I think you should work for your money.�
Neglected and frustrated

Cultural issues add to Democrats� woes with whites. Mr Obama�s first pick for the Supreme Court, Sonia Sotomayor, is best known for backing a plan to deny promotion to white firefighters because of their race. (That is not how she phrased it, but it is what happened.) On another occasion, the president accused the police of acting �stupidly� when they briefly arrested a friend of his, a black Harvard professor who was locked out of, and broke into, his own house. Many blacks sympathised with the professor because they, too, have been presumed criminal. But many whites sympathised with the cops because they, too, have been presumed racist, says David Paul Kuhn, author of �The Neglected Voter�, a fine book about white men and politics. Both episodes reinforced the stereotype that the Democratic Party favours everyone except white males.

Perhaps in reaction to unified Democratic control in Washington, white men (among others) have grown more conservative in the past year. Support for gun rights rose from 51% to 64% between 2008 and 2009. Ballot initiatives to protect �hunters� rights� will pull deer-shooters to the polls. All this spells trouble for Democrats in swing states and districts. Because the party did so well in 2006 and 2008, it is defending a lot of seats in �enemy territory�. Because incumbent Democrats in such seats are nervous, many are reluctant to support Mr Obama�s most ambitious reforms. And a slew of Democratic retirements is tilting the field yet further towards the Grand Old Party.

It will take more than a posse of piqued pale males to hand the Republicans control of Congress in November. White men are a shrinking share of the electorate: 36% in 2008, down from 43% in 1994. But still, the Democrats can hardly afford to alienate the nation�s largest ethnic group. And with the economy in the doldrums, it is not only white men who are angry.