John Vachon Gas station in Minneapolis Dec 1937
It’s a new day. The masks come off, along with all the emperors’ clothes.
Growth in emerging markets is slowing to its lowest ebb since the aftermath of the financial crisis due to a combination of China’s fading dynamism, a sputtering performance in eastern Europe and Latin America’s slowdown. Evidence that emerging economies are entering a new era of slower growth will fuel concerns for the global outlook as western countries continue to struggle, the oil price lurches towards a four-year low and eurozone stalwart Germany suffers from declining growth. Data from 19 large emerging economies collated by research firm Capital Economics show that industrial output in August and consumer spending in the second quarter fell to their lowest levels since 2009. Export growth in August also plunged. These trends are contributing to a sense that slower growth is becoming a permanent fixture among the world’s most dynamic group of economies. “This is the new normal,” said Neil Shearing, chief emerging markets economist at Capital Economics. “For the rest of the decade this is it. This is as good as it gets.”
Speaking at the annual meetings of the International Monetary Fund last week, Olivier Blanchard, the fund’s chief economist, said there had been “a fairly major change in the landscape” for emerging markets in the medium term. Christine Lagarde, the IMF’s managing director, said there was “clearly a major slowdown in countries like Brazil and Russia”, pointing out that the end of quantitative easing would send shockwaves to emerging economies. “We’re going to continue to caution a lot of the emerging market economies … to just prepare themselves for a bit more volatility than we have observed over the last few months,” she said. George Magnus, senior adviser to UBS, said: “It is now clear that the exceptional acceleration in emerging market growth between 2006 and 2012 is over,” he said, noting that the IMF has revised downward its forecasts for EM growth on six occasions since late 2011.
Although official gross domestic product statistics for the third quarter have not yet been published, projections are bleak. China’s GDP annual growth rate in the quarter – due to be announced next week – is set to plunge to 6.8%, down from 7.5% in the second quarter, according to Jasper McMahon of Now-Casting Economics in London. Brazil is on track to report GDP growth of 0.3% this year, down from an official 2.5% in 2013, according to Now-Casting’s model. Capital Economics’ model, which makes projections for overall EM GDP growth based on published official and private data, shows an aggregate growth rate of 4.3% in July, down from 4.5% in June and preliminary numbers for August suggest a further slowdown. “It looks like August is going to be the weakest month in terms of emerging markets’ GDP growth since October 2009,” Mr Shearing said.
Debt stimulus is on its last legs.
Gathering signs of a slowdown across many parts of the world are roiling financial markets and confounding policy makers, who after years of battling anemic economic growth have limited tools left to jump-start a recovery. Slumping exports in Germany are adding fuel to worries about a third recession in the eurozone in six years. China is slowing in the wake of its credit boom, weighing on countries throughout the region. Japan’s economy has recently contracted despite a policy offensive to lift it from years of stagnation. Other onetime powerhouses, from Brazil to South Africa, also are struggling. The pullback is sending tremors through global markets, hammering equities after years of steady gains and knocking down commodity prices. The Dow Jones Industrial Average on Friday turned negative for the year. A recent drop in oil prices—a decline of about 20% in four months—reflects the downward pressure on global growth.
The U.S. remains a relative bright spot in an otherwise gloomy picture, particularly its job market, which is gaining traction after years of fitful growth. But doubts are building over the U.S. economy’s ability to accelerate as some of its biggest trading partners struggle. Top Federal Reserve officials are already voicing concern about sagging growth overseas and its drag on the world’s largest economy. Fed officials in recent days noted they are watching how weakness abroad has boosted the dollar, which could keep inflation below the Fed’s target and hurt U.S. growth by restraining its exports. That could mean a longer wait to start raising interest rates. “If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to [begin increasing rates] more slowly than otherwise,” Fed Vice Chairman Stanley Fischer said during weekend meetings of the International Monetary Fund, which drew urgent pleas for action from top policy makers.
“All seemed serene, but only because of an unsustainable build-up in debt. There was a structural shift in power and income share from labour to capital. Rising asset prices compensated for real income growth. Then came the crisis, which was long and costly. ”
Press the uniform. Check the battle plans. Call up the reservists. Arm the bombers and refuel the tanks. Field Marshal George Osborne is going on manoeuvres. On Monday in Washington, the chancellor of the exchequer will see if Britain is ready for war. A financial war that is. Along with his allies from the United States, he will play out a war game designed to show whether lessons have been learned from the last show, the slump of 2008. Like all commanding officers, Osborne thinks he is ready. He will have general Mark Carney at his side. He has studied the terrain. He has a plan that he insists will work. Let’s hope so. Because the evidence from last week’s meeting of the International Monetary Fund in Washington was that it won’t be long before the real shooting starts. The Fund’s annual meeting was like a gathering of international diplomats at the League of Nations in the 1930s. Those attending were desperate to avoid another war but were unsure how to do so.
They can see dark forces gathering but lack the weapons or the will to tackle them effectively. There is an uneasy, brooding peace as the world waits to see whether lessons really have been learnt or whether the central bankers, the finance ministers and the international bureaucrats are fighting the last war. Here’s the situation. The years leading up to the start of the financial crisis in August 2007 were like the Edwardian summer in advance of the first world war. All seemed serene, but only because of an unsustainable build-up in debt. There was a structural shift in power and income share from labour to capital. Rising asset prices compensated for real income growth. Then came the crisis, which was long and costly. Once it was over, there was a strong urge to return to the world as it was. Countries wanted to return to balanced budgets and normal levels of interest rates, just as they had once hankered after going back on the Gold Standard.
Again, part of a carefully planned series of Fed bosses giving their ‘opinions’. This one: a rate hike won’t hurt anyone at all. An absurd statement, but important to make. Now, when the victims start dropping post-hike, Fisher can claim that’s not what his models predicted.
The Federal Reserve’s eventual rate increase, the first since 2006, will not damage the global economy, Federal Reserve Vice Chairman Stanley Fischer said on Saturday. While there could be “trigger further bouts of volatility” in international markets when the Fed first hikes, “the normalization of our policy should prove manageable for the emerging market economies,” Fischer said in a speech at the International Monetary Fund’s annual meeting. Fischer also played down concern about the recent fall of the euro, which has fallen more than 8% against the dollar since the beginning of the year. “We were all surprised for how long the euro stayed as high as it did, so to turn around and say that terrible things are likely to happen — I think, what is happening now is reflective of the underlying strengths of the economy,” Fischer said.
There was a sharp selloff of emerging market currencies and assets last year after the Fed first publicly discussed the possibility of ending its bond-buying program, otherwise known as quantitative easing. Some experts, notably Reserve Bank of India Governor Raghuram Rajan, have worried publicly that the Fed could derail the global economy if it doesn’t look outward before it raises domestic interest rates. Since last year, Fischer said, the Fed has “done everything we can, within limits of forecast uncertainty, to prepare market participants for what lies ahead.” The Fed has been as clear as it can be about the future course of its policy course, and markets understand, Fischer said. “We think, looking at market interest rates, that their understanding of what we intend to do is roughly correct,” Fischer said.
The Saudis are increasing their exports at a time when prices are plummeting. The end of OPEC?
Days after slashing prices in Asia, Saudi Arabia is now making an aggressive push in the European oil market, traders say. The kingdom is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude. “The Saudi push is not just in Asia. It’s a global phenomenon,” one oil trader said. “They are using very aggressive tactics” in Europe too, the trader added. This month, state-owned Saudi Aramco stunned the rest of the Organization of the Petroleum Exporting Countries by slashing its November prices to defend its market share in Asia’s growing market. The move, setting a price war in the oil-production group, was combined with a boost in the kingdom’s output in September.
But Riyadh is also moving to protect its sales to Europe, a declining market where it is facing rivalry from returning Libyan production. After cutting its November prices there, Saudi Aramco is also asking refiners to commit to full, fixed deliveries in talks to renew contracts for next year, the traders say. They say the Saudi oil company had previously offered a formula allowing flexibility of more or less 10% of contracted volumes, the most commonly used in the industry. “They are threatening buyers” to discontinue sales if they don’t agree with the fixed deliveries, another trader said.
OPEC continues to exist in name only. Like the EU, it has served its purpose but now members’ interests have become too different from each other.
A rift between OPEC members deepened over the weekend, as producers in the cartel moved in different directions amid falling oil prices. Venezuela, which has been one of the most outspoken proponents of a production cut by the Organization of the Petroleum Exporting Countries, called over the weekend for an emergency meeting of the group to respond to falling prices. But Kuwait said Sunday that OPEC was unlikely to act to rein in output. Saudi Arabia, meanwhile, appeared to expand on its recent move to defend its market share at the expense of other members by aggressively courting customers in Europe. Traders said Saudi Arabia is now asking for stronger commitments from some of its buyers in Europe, a move that would lock in those customers, including any new ones it would gain with recent price reductions.
Also on Sunday, Iraq’s State Oil Marketing Company cut the price of Basrah Light crude in November for Asian and European buyers by 65 cents to a discount of $3.15 a barrel below the Oman/Dubai benchmark for Asian customers and $5.40 below the Brent benchmark for European customers, according to official selling prices published by the company. The moves and countermoves are the latest in a time of particular discord in OPEC. The organization was founded to leverage members collective output to help influence global prices. In recent periods of low prices, Saudi Arabia OPEC s top producer and de facto leader has managed to cobble together some level of consensus. But even modest cooperation between many members has broken down, and Saudi Arabia, in particular, has moved to act on its own. While it cut output earlier this summer, other members didn’t go along. Since then, it has dropped its prices.
Each member has a different tolerance for lower prices. Kuwait, the United Arab Emirates and Saudi Arabia generally don t need prices quite as high as Iran and Venezuela to keep their budgets in the black. Late Friday, Venezuelan Foreign Minister Rafael Ramirez, who represents Caracas in the group, called for an urgent meeting to tackle falling prices. The group’s next regular meeting is set for late next month. But on Sunday, Ali al-Omair, Kuwait’s oil minister, said there had been no invitation for such a meeting, suggesting the group would need to stomach lower prices. He said there was a natural floor to how low prices could fall at about $76 to $77 per barrel, near what he said was the average production costs per barrel in Russia and the U.S.
Well, that’s too bad then, isn’t it?
President Mario Draghi said expanding the European Central Bank’s balance sheet is the last monetary tool left to revive inflation although there is no target for how much it might be increased. “It’s very difficult for me to give you an exact figure at this point in time,” Draghi told reporters in Washington today during the annual meeting of the International Monetary Fund. “I gave you a kind of ballpark figure, say about the size the balance sheet had at the start of 2012.”
The ECB is trying to spur inflation from its lowest in almost five years as its economy risks sliding into its third recession since 2008. The central bank’s balance sheet, which can be boosted by buying assets or accepting collateral in return for loans, now stands at €2.1 trillion ($2.7 trillion) compared with a 2012 peak of €3.1 trillion. Recent interest rate cuts, the offering of cheap loans to banks and the forthcoming purchase of private-sector assets should have a sizable impact on the balance sheet, Draghi said. He denied the ECB is purposefully trying to weaken the euro, saying it has no target for its value and that its recent decline reflects international differences in monetary policy. Draghi also said the ECB sees no serious risk of a bubble in the sovereign debt market.
For Merkel and the Bundesbank to give in now would seem to risk political suicide.
Mario Draghi and Jens Weidmann are clashing anew over how much more stimulus the ailing euro-area economy needs from the European Central Bank. As Europe’s woes again proved the chief concern at weekend meetings of the International Monetary Fund in Washington, President Draghi repeated he’s ready to expand the ECB’s balance sheet by as much as €1 trillion ($1.3 trillion) to beat back the threat of deflation. Bundesbank head Weidmann responded by saying that a target value isn’t set in stone. The differences at the heart of policy making risk leaving the ECB hamstrung as the region’s economy stalls and inflation fades further from the central bank’s target of just below 2%. History suggests Draghi will ultimately prevail over his German colleague.
“There’s an enormous conflict within the Governing Council on what the ECB should do,” said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. “Clearly, it’s Draghi against Weidmann once again. In the end, Draghi will get his way and we will see quantitative easing next year.” The ECB is swelling its balance sheet as it seeks to revive inflation of 0.3%, the lowest in almost five years. By buying private-sector assets, as it plans to do from this month, or continuing to accept collateral from banks in return for cheap loans, it is pushing liquidity into the economy. Still unresolved is if it will ultimately buy sovereign debt, a taboo subject in Germany where politicians worry it amounts to financing governments and removing pressure on them to act.
Building up assets is the last monetary tool the ECB has left after it cut interest rates to a record low, Draghi said on Oct. 11 in Washington. Action taken so far pushed the euro as low as $1.2501 this month, the least since 2012. The ECB’s balance sheet now stands at €2.05 trillion, below the 2012 peak of €3.1 trillion and €2.7 trillion at the start of that year. “I gave you a kind of ballpark figure, say about the size the balance sheet had at the start of 2012,” Draghi told reporters. Weidmann responded within minutes. “I don’t need to explain to you that there has been communicated a certain target value for the balance sheet,” he said. “How formal this target value is, that’s a different question.”
This is what Beppe Grillo is fighting to prevent. Wholesale dumping of national assets. Why should any nation want that?
Clotilde Narzisi and Luca Soliman have run the Caffe Orefici, 200 feet from Milan’s iconic Duomo Cathedral, for 10 years. Forced to sell their business because of high taxes, they say their only hope now is to leave it in Chinese hands. “They are the only ones who are buying,” said 43-year-old Narzisi during a break after the lunch-time rush of businessmen and shoppers in the heart of Italy’s financial capital. “We want to sell, taxes are too high; we work eight hours a day for the state and one hour for us.” Caffe Orefici is among the 18,000 advertisements from businesses and individuals that have been published since February last year on Vendereaicinesi.it — sell to the Chinese — a website that helps Italians, stricken by the third recession in six years, attract bids for properties, products and services from Chinese suitors. While Italian stores turn to the local Chinese community, the country’s largest companies are seeking investments directly from the Asian giant.
Italy has been China’s biggest target in Europe after the U.K. this year, with cross-border acquisitions for $3.43 billion, according to Bloomberg available data. Prime Minister Matteo Renzi, who’s struggling to cut Europe’s second-biggest debt of more than €2 trillion ($2.53 trillion), urged Chinese investors in June during a Beijing visit to buy stakes in Italian companies, following his counterparts in Greece and Portugal who tapped Chinese money to raise revenue and exit bailout programs.[..] While unemployment near a record of 12.7% and fiscal burden at an all-time high make it difficult for Italians to access credit, the 321,000 Chinese living in the country are better positioned as they can count on family networks rather than banks for financing, said Toppino, who’s from the northwestern town of Alba. Renzi flew to China in June with a delegation of dozens of Italian companies to help broker deals. A few weeks later, Italy’s state lender announced the sale of a stake in energy grids holding company CDP Reti to State Grid of China for €2.1 billion.
The technocrats are trying to take over. Hollande starts to look like Tony Blair without the charisma.
Two of Francois Hollande’s top ministers sent differing signals on how quickly to revamp the unemployment-benefits system, keeping alive a debate the French president sought to suppress. For Finance Minister Michel Sapin, the matter can wait until the scheduled talks between labor unions and business in mid-2016. Economy Minister Emmanuel Macron indicated more urgency, saying the government can move faster. The issue was raised last week by Prime Minister Manuel Valls, who said the wasteful system needs to be fixed in the “short term.” Hours later, Hollande shot down the suggestion, saying the government “has enough on its plate.” Sapin is siding with the president.
“The year 2015 should be used to think about an improvement of the unemployment insurance mechanism that would increase the incentive to resume work,” Sapin said in an interview with Bloomberg Television in Washington. Asked about the same issue in an interview yesterday in the newspaper Le Journal du Dimanche, Macron was more strident. “There shouldn’t be any taboo or posturing,” he said. “The unemployment insurance system has a €4 billion ($5.1 billion) deficit. What politician can be satisfied with that? There was reform but not enough. We cannot leave it at that.” Macron also said “we have six months to create a new reality in France and Europe.”
Bye bye suppliers.
As global steel prices face downward pressure from falling demand, the situation in China is making the problem all the more intractable, as overcapacity is prompting Chinese steel enterprises to cut their prices in order to boost exports. Data from the China Iron & Steel Association (CISA) showed Monday that domestic steel prices have been falling for 12 straight weeks, with the Steel Composite Price Index down more than 13% compared since the end of last year, even as the nation’s construction activity and real-estate market are cooling significantly. The average price for the range of steel products on offer has fallen to 3,212 yuan ($520) per metric ton for the first half of the year, down 28% from the average price in 2012, CISA data showed.
And as a People’s Daily report said Monday, the price level means the steel is now almost as cheap by weight as Chinese cabbage. “Sharply slowing steel demand growth in an oversupplied sector is the key reason for China’s currently low steel prices,” CIMB analysts said in a recent note. Standard & Poor’s also cited Chinese oversupply as the largest headache for steel makers in the rest of Asia, and is likely to remain so. A recent survey by CISA said the steel-billet inventory of key enterprises was up 36% in July, compared to a year earlier, steel-product inventory climbed 21.3%. Pressures arising from expanding inventories and sluggish domestic demand have made for cut-throat competition among China’s steel mills, resulting in meager profits. The margin for China’s large and medium-sized steel companies was 0.54% for the first seven months of 2014, CISA said.
Not one single digit coming out of China can be trusted. Every bracket, semi-colon and comma has a political agenda behind them. Not saying it’s different in the US. Just that the discrepancy between official numbers and alternative data is growing. Today’s 15.3% YoY export increase report looks very suspicious.
The chief economist at China’s central bank said Saturday that he doesn’t see any reason for large-scale fiscal or monetary stimulus “in the foreseeable future” despite slowing growth in the world’s second-largest economy and disagreements about the depth and timing of economic overhauls. Speaking in Washington at a meeting of the Institute of International Finance, a financial-industry group, Ma Jun said the Chinese job market “looks pretty stable” despite wobbly economic growth. And, he said, leverage in certain sectors – including real estate, certain state-owned enterprises and local-government financing vehicles – was already too high, and that further lending to these areas should be avoided. In Beijing, debate about how to manage the country’s slowdown has been intense.
The People’s Bank of China so far has bolstered the economy using narrow stimulus measures, including targeted lending in sectors like agriculture and public housing. But The Wall Street Journal reported last month that Chinese leaders are considering replacing the central bank’s governor, Zhou Xiaochuan, as part of internal battles over whether larger-scale expansion of credit should be used to spur economic growth. Mr. Ma on Saturday instead emphasized the importance of reforms to prevent slower growth from turning into a broader crisis. The government is working on improving the productivity of state-owned companies and better controlling their spending, he said. Beijing also is endeavoring to allow more companies both public and private to go bankrupt, which is “warranted,” he added.
“Market action is narrowing in a classic pattern that reflects the effort of investors to reduce risk around the edges of their portfolios, in what typically proves an ill-founded belief that a falling tide will not lower all ships.”
In recent weeks, the market has transitioned to the most hostile return/risk profile we identify: the pairing of overvalued, overbought, overbullish conditions with deterioration in market internals and price cointegration – what we call “trend uniformity” – across a wide range of stocks, sectors, and security types (see my September 29, 2014 comment Ingredients of a Market Crash). As in 2007 and 2000, we’re observing characteristic features of that shift. One of those features is that early selling from overvalued bull market peaks tends to be indiscriminate, as deterioration in market internals and the “average stock” often precedes substantial losses in the major indices. As of Friday, only 28% of NYSE stocks are above their respective 200-day moving averages. In the current cycle, both the Russell 2000 small-cap index, and the capitalization-weighted NYSE Composite set their recent highs on July 3, 2014, failing to confirm the later high in the S&P 500 on September 18, 2014.
Through Friday, the NYSE Composite is down -7.3% from its July 3rd peak, and the Russell 2000 is down -12.8%, while the S&P 500 is down only -4.0% over the same period. What’s happening here is that selling is being partitioned in secondary stocks, and more recently high-beta stocks (those with greatest sensitivity to market fluctuations). Market action is narrowing in a classic pattern that reflects the effort of investors to reduce risk around the edges of their portfolios, in what typically proves an ill-founded belief that a falling tide will not lower all ships. Abrupt market losses are typically not responses to obvious “catalysts” but instead reflect a shift in investor preferences toward risk aversion, at a point where risk premiums are quite thin and prone to an upward spike to normalize them. That’s essentially what’s captured by the combination of overvalued, overbought, overbullish coupled with deteriorating internals.
Another characteristic of these shifts is increasing volatility at short intervals – what I described at the 2007 peak and in early-2008 by analogy to “phase transitions” in particle physics. The extreme daily and intra-day market volatility in recent sessions is typical of that dynamic. [..] No doubt – this pile of zero-interest hot potatoes has helped to compress risk premiums across the entire range of risky assets toward zero (and we estimate, in some cases, below zero). But understand that the bulk of the advance in financial assets in recent years has not been a reasonable response to the level of interest rates, but instead reflects a dangerous compression of risk premiums.
Farage has 25% of the votes in recent polls. He can allow Cameron to stay in power in exchange for an early referendum on Britain’s EU membership. In one place – region or nation – or another in Europe, people will vote to leave.
Britain’s anti-EU UK Independence Party said on Sunday it would use its growing success to try to secure an early referendum on leaving the European Union, after its support hit a record high of 25% in an opinion poll. The poll, published days after UKIP won its first elected seat in Britain’s parliament at the expense of Prime Minister David Cameron’s Conservative Party, suggested it could pick up more seats than previously thought in a national election in May. UKIP favours a British exit from the European Union, known as a ‘Brexit’, and tighter immigration controls. It has shaken up the British political landscape, challenging its traditional two-party system and piling pressure on Cameron to tack further to the right.
UKIP leader Nigel Farage said he would demand that Cameron bring forward a planned referendum on EU membership from 2017 to next year if UKIP polled strongly and the prime minister needed its support to stay in office. “I’m not prepared to wait for three years. I want us to have a referendum on this great question next year and if UKIP can maintain its momentum and get enough seats in Westminster we might just be able to achieve that,” Farage told the BBC. UKIP’s rise threatens Cameron’s re-election drive by splitting the right-wing vote, increases the likelihood of another coalition government, and poses a challenge to the left-leaning opposition Labour party in northern England too.
It also adds to pressure on Cameron from within parts of his own party to become more Eurosceptic. Cameron has promised to try to renegotiate Britain’s EU relations if re-elected next year, before offering Britons a membership referendum in 2017. But some of his own lawmakers want him to take a tougher line and to bring forward the vote. UKIP won European elections in Britain in May, has poached two of Cameron’s lawmakers since late August, and will try to win a second seat in parliament in a by-election next month. Before Sunday, most polling experts had forecast it could win only a handful of the 650 seats in parliament in 2015. But based on the result of a Survation poll for The Mail on Sunday, the party could win more than 100 seats in 2015.
” … there is exclusivity even around the use of violence. The state can legitimately use force to impose its will and, increasingly, so can the rich. Take away that facility and societies will begin to equalise.”
“The definition of being rich means having more stuff than other people. In order to have more stuff, you need to protect that stuff with surveillance systems, guards, police, court systems and so forth. All of those sombre-looking men in robes who call themselves judges are just sentinels whose job it is to convince you that this very silly system in which we give Paris Hilton as much as she wants while others go hungry is good and natural and right.” This idea is extremely clever and highlights the fact that there is exclusivity even around the use of violence. The state can legitimately use force to impose its will and, increasingly, so can the rich. Take away that facility and societies will begin to equalise. If that hotel in India was stripped of its security, they’d have to address the complex issues that led to them requiring it.
“These systems can be very expensive. America employs more private security guards than high-school teachers. States and countries with high inequality tend to hire proportionally more guard labour. If you’ve ever spent time in a radically unequal city in South Africa, you’ll see that both the rich and the poor live surrounded by private security contractors, barbed wire and electrified fencing. Some people have nice prison cages, and others have not so nice ones.” Matt here, metaphorically, broaches the notion that the rich, too, are impeded by inequality, imprisoned in their own way. Much like with my earlier plea for you to bypass the charge of hypocrisy, I now find myself in the unenviable position of urging you, like some weird, bizarro Jesus, to take pity on the rich. It’s not an easy concept to grasp, and I’m not suggesting it’s a priority. Faced with a choice between empathising with the rich or the homeless, by all means go with the homeless.
The consequences of the choices you make, or let others make for you. Australia seems to think this is alright.
One in seven Australians live below the poverty line, even after more than two decades of economic growth, an Australian Council of Social Service report showed. The poverty rate in Australia climbed to 14% in 2012, or 2.55 million people, from 13% in 2010, the council said yesterday in a report. This included 603,000 children, or 18% of the total. The poverty line is defined as 50% of median disposable income, a standard measure of financial hardship in wealthy countries, it said. “The child poverty rate should be of deep concern to us all, with over a third of children in sole-parent families” falling into this category, Cassandra Goldie, chief executive officer of Acoss, said in a statement. “This is due to the lower levels of employment among sole-parent households, especially those with very young children, and the low level of social security payments for these families.”
While a mining-investment boom sustained growth and employment in Australia’s economy, which has avoided recession since 1991, increasing numbers of people have missed out and instead seen their finances stretched by high housing costs. People in Sydney, with a population of 4.4 million Australia’s biggest city, are more likely to be in poverty than those in any other state capital, mainly because of high housing costs, the report showed. 15% of Sydneysiders fall into this category. New South Wales is the only state where a higher proportion of city residents than those in non-metropolitan areas live in poverty. “The humiliation, deprivation and depth of despair some people feel is all too often either unknown or forgotten in the public stories and discourse about people living on welfare benefits,” David Thompson, chief executive officer of Jobs Australia, a body for nonprofit organizations that assist the unemployed, said in the statement. “It is not them or us, they are us. And we would all do well to remember that, in a blink of an eye, it could be us.”
Not a new issue, but awfully hard to prove. And until we can, it will simply continue. The precautionary principle is always trumped by the dollar.
Potent pharmaceuticals flushed into the environment via human and animal sewage could be a hidden cause of the global wildlife crisis, according to new research. The scientists warn that worldwide use of the drugs, which are designed to be biologically active at low concentrations, is rising rapidly but that too little is currently known about their effect on the natural world. Studies of the effect of pharmaceutical contamination on wildlife are rare but new work published on Monday reveals that an anti-depressant reduces feeding in starlings and that a contraceptive drug slashes fish populations in lakes. “With thousands of pharmaceuticals in use globally, they have the potential to have potent effects on wildlife and ecosystems,” said Kathryn Arnold, at the University of York, who edited a special issue of the journal Philosophical Transactions of the Royal Society B. ”Given the many benefits of pharmaceuticals, there is a need for science to deliver better estimates of the environmental risks they pose.”
She said: “Given that populations of many species living in human-altered landscapes are declining for reasons that cannot be fully explained, we believe that it is time to explore emerging challenges,” such as pharmaceutical pollution. Research published in September revealed half of the planet’s wild animals had been wiped out in the last 40 years. In freshwater habitats, where drug residues are most commonly found, the research found 75% of fish and amphibians had been lost. A few dramatic examples of wildlife harmed by drug contamination have been discovered previously, including male fish being feminised by the synthetic hormones used in birth-control pills and vultures in India being virtually wiped out by an anti-inflammatory drug given to the cattle on whose carcasses they feed. Inter-sex frogs have also recently been found in urban ponds contaminated with wastewater.
Not so sure about this, but let’s hear the arguments.
The European economy may be limping along, but Americans living there say there are other reasons why they call Europe home — or maison, casa or zuhause. More Americans are moving overseas. The Social Security Administration currently sends 613,650 retirement-benefit payments outside the U.S., more than double the 242,128 benefit payments sent abroad in 2002. The number of Americans who actually gave up their citizenship rose to 3,000 in 2013, three times as many as in 2012. Others — like Richard Wise, 54, who moved to London in 2012 — took their passports. Contrary to popular opinion on food in Britain, famous for bangers and mash, Wise says, “the food stopped sucking a long, long time ago.” Some Americans left for a quieter life. Sarah McCullough Canty, 47, moved to the west of Ireland in 2002. “My husband is from Ballydehob, West Cork, so the choice to go to his homeland was easy,” she says. “It’s one of the most beautiful places on earth.”
She doesn’t have to worry about shootings and gun crime. “My children are free to roam the streets of the village with no fear,” she says. “They are not exposed to hard drugs.” (Of course, that’s certainly not the case in larger Irish cities like Limerick and Dublin.) Older people, in particular, seem to fare well in Europe — a potential draw for America’s aging boomers. Norway is the best place to live for over-60s, according to the “Global AgeWatch Index,” released this week by HelpAge International, a London-based nonprofit group. Norway replaced Sweden as the No. 1 place to live, as measured by four key issues: income security, health, personal capability and an enabling environment. Sweden was No. 2, followed by Switzerland, Canada, Germany, The Netherlands and Iceland. The U.S. came in at No. 7. Japan, New Zealand and the U.K. completed the Top 10.
“The economy will grow at half last year’s pace, the World Bank forecast, even before the volatility in the global commodity markets threatened more upheaval in a country that’s had to rebuild itself since the end of a twelve-year civil war in 2002.”
In Sierra Leone, one of the poorest countries in Africa, the hardships of Ebola hit at victims and non-victims alike. Sulaiman Kamara, a handcart pusher in Freetown before the outbreak began in May, used to earn 50,000 Leones ($11) a day, before a shriveling economy took away his job. The 42-year-old father of three now hawks cigarettes and candy on streets with shuttered shops and restaurants, empty hotels and idling taxis. Some days, he’s lucky to make a quarter of his former earnings. Things are about to get worse again. Iron ore, the biggest export earner, is in a major tailspin, leaving Sierra Leone’s two miners on the verge of collapse and jeopardizing 16% of GDP in a country where output per person was just $809 last year. Used in steelmaking, iron ore has slumped 39% this year as the world’s largest miners spend billions of dollars expanding giant pits in Australia and Brazil.
Digging up ore that’s less rich in iron and operating with restrictions imposed to stop the disease’s spread, local producers can’t compete. “The impact of Ebola in terms of iron ore revenue is huge,” said Lansana Fofanah, a senior economist in Sierra Leone’s Ministry of Finance and Economic Development. “Iron ore is responsible for the country’s double digit growth since 2011 until the Ebola outbreak.” Iron ore contributes more in mining royalties than any other mineral to government revenue, which has plunged since the outbreak began, and as the budget deficit worsens, the International Monetary Fund has agreed to step in. The economy will grow at half last year’s pace, the World Bank forecast, even before the volatility in the global commodity markets threatened more upheaval in a country that’s had to rebuild itself since the end of a twelve-year civil war in 2002.
Full protective gear works great. Until you have to take it off. And: “We know that Mr. Duncan got dialysis. He also got a breathing tube inserted into his lungs. And those are procedures in which there is a danger of contamination of health care workers. ‘Those high-risk procedures were undertaken “as a desperate measure to try to save [Duncan’s] life,’ Frieden said, adding that he was unaware of any prior Ebola patient receiving either of those treatments.”
When the first U.S. Ebola patient turned up at a Dallas hospital late last month, public health officials were quick to reassure the public that the health care system was prepared to handle it and prevent the deadly disease from spreading. “We are stopping Ebola in its tracks in this country,” Dr. Tom Frieden, director of the Centers for Disease Control and Prevention, said on Sept. 30, after Dallas patient Thomas Eric Duncan’s Ebola test came back positive. “We can do that because of two things: strong infection control that stops the spread of Ebola in health care; and strong core public health functions.” But news that a nurse who treated Duncan became infected in the process has cast doubt on whether those safety precautions were good enough or were properly followed. The nurse at Texas Health Presbyterian Hospital was wearing full protective gear when she treated Duncan, but somehow got infected anyway. Frieden said Sunday that the CDC was conducting an investigation into what went wrong, to try to prevent it from happening again.
“It is deeply concerning that this infection occurred,” Frieden acknowledged. “We don’t know what occurred… but at some point there was a breach in protocol and that breach in protocol resulted in this infection.” The reality is, even when health care workers know the proper steps, small – but potentially deadly – lapses can still happen. “It’s hard to stick to the protocol 100% of the time when you’re responding to emergencies; you get lax,” Dr. Dalilah Restrepo, an infectious diseases specialist at Mount Sinai Roosevelt and Mount Sinai St. Luke’s in New York City, told CBS News in an interview last week. The protocol for dealing with Ebola governs the steps hospitals and health care workers take to isolate an Ebola patient and the protective gear they wear to avoid infection. Personal protective equipment – the head to toe “spacesuit” gear – is impervious to the infectious bodily fluids that can spread Ebola from person to person. But for health care workers, taking off contaminated gear without infecting themselves is tricky and requires training and practice.
“In taking off equipment, we identify this as a major area for risk,” Frieden said. “When you have gone into contaminated gloves, masks or other things, to remove those without risk of contaminated material touching you and being then on your clothes or face or skin and leading to an infection is critically important and not easy to do right.” Restrepo echoed concern about the hazards involved in safely removing protective gear. “We’ve seen in the removal process there’s always a risk for infection,” she said. The best practice, she explained, is to have someone trained in infectious disease control responsible for helping a doctor or nurse remove their protective gear every time they leave a patient’s room. “It’s pretty much from the ground up. Booties come off first,” she said. The priority is to keep contamination away from the eyes, nose and mouth, the primary means of transmission.