Marjory Collins Third Avenue elevated railway at 18th Street, NYC Sep 1942
Seventeen years after their first jobs summit European Union leaders are divided on how to create employment and a fifth of young people are still out of work. At a meeting in Milan today Italian Prime Minister Matteo Renzi plans to tout the new labor laws he’s pushing through. French President Francois Hollande will argue for more spending, a proposal German Chancellor Angela Merkel intends to reject. Britain’s prime minister David Cameron isn’t coming. Their lack of progress may increase the frustration of European Central Bank President Mario Draghi who has faced down internal dissent to deploy unprecedented monetary easing. He’s calling on the politicians to do their bit now and loosen the continent’s rigid labor markets even if that means facing the ire of protected workers. “An entire generation is being sacrificed in countries such as Spain,” Ludovic Subran, chief economist at credit insurer Euler Hermes said in an interview. “That has a real impact on productivity in the long run.”
The 18-nation euro area is still struggling to heal its debt-crisis scars, five years after Greece revealed that its deficit was more than twice its forecast, forcing it into two bailouts. Across the bloc, growth has ground to a halt and inflation is at its lowest for five years. When EU leaders met in Luxembourg in November 1997, the soon-to-be-born euro zone’s unemployment rate was about 11%. Jean-Claude Juncker, then prime minister of the host country, now president designate of the European Commission, promised a mix of free-market solutions and government plans would mean a “new start” for young people. Today the jobless rate is 11.5%. The Milan summit will focus on youth unemployment, which afflicts 21.6% of people under 25 across Europe, according to Eurostat. Even this number is almost identical to 1997, when it stood at 21.7%.
Earnings season can be a lot like Fashion Week, in that there are often common trends wherever one looks. For example, skipper hats, Members Only jackets and plaid Mighty Mighty Bosstones-style suits are destined to be all over the runways in Istanbul and Tokyo this month. OK fine, that one is made up, but here’s an earnings season trend you can count on: the phrase “unfavorable currency exchange rates” or something similar will show up in a lot of press releases over the next month or so. How unfavorable? The U.S. dollar surged more than 8% versus the euro in the quarter. That made American skipper hats a lot more expensive in comparison to equally fashionable and timeless French berets (excluding the cost of having your name stenciled on the front.) And it wasn’t just the euro. The Bloomberg Dollar Spot Index, a measure of the currency against 10 major peers, jumped 6.7% in the quarter for its biggest advance in six years.
Bank of America Corp. strategist Savita Subramanian estimates that a 5% rise in the dollar versus the euro results in a drop of about $1 for full-year Standard & Poor’s 500 Index per-share earnings, which she projects at $118. Partly because of the dollar and the related decline in oil prices, earnings estimates have seen “one of the largest downward revisions over the last few years” aside from the weather-beaten first quarter of this year, according to Subramanian. Earnings-per-share are projected to have grown 4.9% in the third quarter, according to analyst estimates compiled by Bloomberg. At the beginning of the quarter, they were estimated to increase 7.8%. At the end of March, they were forecast to grow 9%. And in January…well, you get the picture. The strong dollar may have an even greater impact on guidance for the fourth quarter, Subramanian said.
Forget about the truth. Debt will set you free.
And now for something funny. Earlier today, credit agency Equifax piggybacked on Experian’s auto loan data, and reported the following:
• The total balance of auto loans outstanding in August is $924.2 billion, an all-time high and an increase of 10.8% from same time a year ago
• The total number of auto loans outstanding stands at more than 65 million, a record high and an increase of more than 6% from the same time last year;
• The total number of new loans originated year-to-date through June for subprime borrowers, defined as consumers with Equifax Risk Scores of 640 or lower, is 3.9 million, representing 31.2% of all auto loans originated this year.
• Similarly, the total balance of newly originated subprime auto loans is $70.7 billion, an eight-year high and representing 27.8% of the total balance of new auto loans
At least we now know, definitively, what the reason for the US manufacturing surge in the late spring early summer was: a subprime credit-driven car buying binge. But wait, there’s more: because here is Equifax’ “conclusion” based on the above bullets:
“Auto sales continue to soar, crossing the 17.4 million mark on an annualized basis for new cars and light trucks in August,” said Amy Crews Cutts, Senior Vice President and Chief Economist at Equifax. “The abundance of high-quality vehicles for sale, the attractive financing options available, and the ever-increasing age of cars on the road today have created an environment that makes it easy for consumers to say ‘yes’ when it comes to purchasing a new or used car. Importantly, auto loan originations to borrowers with subprime credit scores remain stable, providing additional evidence that a bubble is not occurring in that space.”
To summarize: to Equifax a record car loan bubble with an 8 year high in subprime origination is “evidence” that there is no bubble.
It’s their job?!
In what has become a seasonal ritual, the International Monetary Fund said today that it had been too optimistic about the global growth outlook and revised downward its forecast for 2015. This time, it included a five-page explanation of why it has kept overestimating the strength of the recovery. Bad guesses on growth in the BRIC countries—Brazil, Russia, India, and China—accounted for about half the error, even though their share of the global economy is only about 28%, the IMF said. In addition, “Four stressed economies in the Middle East account for another 20% of the global forecast error,” it said. Those four are Egypt, Iran, Iraq, and Libya. In the case of the BRICs, the IMF said it has been gradually revising down not only the countries’ near-term growth, but their long-term growth potential.
“After a sharp rebound following the global financial crisis, global growth declined every year between 2010 and 2013—from 5.4% to 3.3%,” the IMF said. Even taking into account unanticipated “shocks” such as the euro debt crisis, “global growth outturns have still surprised on the downside relative to each successive WEO forecast since 2011,” the IMF economists admit in the latest edition of the World Economic Outlook. The IMF now expects global growth to reach 3.3% in 2014 and 3.8% in 2015, down from estimates it made in April (3.6% and 3.9%, respectively) and July (3.4% and 4.0%, respectively). From 2011 through 2014, the average miss on the year-ahead forecasts was 0.6% percentage point, the IMF said in its post mortem.
It just figured that out now?
The IMF has cut its global growth forecasts for 2014 and 2015 and warned that the world economy may never return to the pace of expansion seen before the financial crisis. In its flagship half-yearly world economic outlook (WEO), the IMF said the failure of countries to recover strongly from the worst recession of the postwar era meant there was a risk of stagnation or persistently weak activity. The IMF said it expected global growth to be 3.3% in 2014, 0.4 points lower than it was predicting in the April WEO and 0.1 points down on interim forecasts made in July. A pick-up in the rate of expansion to 3.8% is forecast for 2015, down from 3.9% in the April WEO and 4% in July. But the IMF highlighted the risk that its predictions would once again be too optimistic. “The pace of global recovery has disappointed in recent years”, the IMF said, noting that since 2010 it had been consistently forced to revise down its forecasts.
“With weaker-than-expected global growth for the first half of 2014 and increased downside risks, the projected pickup in growth may again fail to materialise or fall short of expectation.” The IMF’s economic counsellor, Olivier Blanchard, said the three main short-term risks were that financial markets were too complacent about the future; tensions between Russia and Ukraine and in the Middle East; and that a triple-dip recession in the eurozone could lead to deflation. Although the IMF believes the US Federal Reserve and the Bank of England will be the first two major central banks to start raising interest rates by the middle of 2015, it advised that official borrowing costs should be kept low so long as demand remained weak. It added that countries with healthy public finances, such as Germany, should spend more on infrastructure in order to boost growth and cautioned against over-aggressive attempts to reduce budget deficits.
From a medium-term perspective, low potential output growth and “secular stagnation” are still important risks, given that robust demand growth has not yet emerged. “In particular, despite continued very low interest rates and increased risk appetite in financial markets, a pick-up in investment has not yet materialised, possibly reflecting concerns about low medium-term potential growth rates and subdued private consumption (in a context of weak growth in median incomes).”
There you go: we need more optimism no matter what happens.
You’ll never have it so good again. That’s the message for the rich western economies from the IMF after yet another downgrade to its growth forecasts. For a quarter of a century Japan’s once-booming economy has struggled; now Europe is heading in the same direction. The IMF thinks there is a 40% chance of a recession in the eurozone over the next year and a 30% risk of deflation. Before the slump of 2008, the IMF boasted of how the global economy was enjoying its fastest period of sustained growth since the early 1970s. Now it talks openly of the possibility of secular stagnation: the notion that there has been a permanent downward shift in the potential growth rates of advanced economies. Olivier Blanchard, the IMF’s economic counsellor, said there had been a structural slowdown in the west, which was why the global economy was unlikely to return to the pace of expansion seen before the financial crisis.
But the IMF also believes these lower levels of potential growth will be achievable only if interest rates are kept very low. Returning monetary policy to the settings in place before the collapse of Lehman Brothers in September 2008 – with a bank rate of about 5% in the UK – would lead to even lower levels of activity and high unemployment. This is the scenario described by Alvin Hansen, the economist who coined the phrase “secular stagnation” in 1938. The date is important because despite a recovery from the great depression in the early 1930s, there was a relapse in 1937. Pessimism about the future was as strong then as it is now, yet during the next three decades the global economy expanded at rates not seen before – or since. It is possible, therefore, that the experience of the recent past skews forecasts of the future. When the world economy was humming along, the IMF expected the boom to be everlasting. Now it can see nothing other than a continuation of the sluggish performance of recent years.
Insane. What other words are there?
When it comes to the Federal deficit, reliable numbers are as elusive as unicorns. Not that there aren’t plenty of numbers out there, but they don’t match reality. And reality is ultimately the change in the gross national debt which shows in its unvarnished manner just how much money the federal government actually had to borrow to fill the fiscal holes. Regardless of what has been proffered by the White House, the Congressional Budget Office, and others, the total gross national debt outstanding of the US of A hit $17.824 trillion in fiscal 2014 ended September 30. A jump for the fiscal year of $1.086 trillion. It could have been worse: note how it jumped on October 1, the first day of fiscal 2015, by another $51 billion. That’s certainly one elegant way of putting some lipstick on the debt in fiscal 2014 – by kicking part of it into the next fiscal year. But hey, we all do that.
The fact that the total debt taxpayers will have to deal with in the future soared by $1.1 trillion in fiscal 2014 is in part due to last year’s debt ceiling charade in Congress. Starting in March 2013, when Treasury debt outstanding hit the debt ceiling, the Treasury Department couldn’t sell additional debt to bring in the money that the government continued to spend. So it borrowed that money via “extraordinary measures” from other accounts, to be repaid later. Then on October 16 last year, so in fiscal 2014, President Obama signed a deal into law that avoided default. The next day, the gross national debt jumped $328 billion to $17.075 trillion. Most of the $328 billion should have fallen into fiscal 2013. If subtracted from the $1.086 trillion by which the debt ballooned in fiscal 2014, it reduces the increase in the debt to $758 billion.
Very one-sided piece.
Imagine you have a friend who drinks a lot and often. Until now, they always seem to have a good time. He tells the best stories, gets all the girls. He’s the life of the party. Then, one day, he wrecks his car. And you and some buddies, who happened to be in the neighborhood, see your pal trapped. Of course, you rush to the rescue. You try to break open the door with a tire iron. Ultimately, you smash the window and pull the poor fellow out. And just when you’d think this guy would sober up and see the recklessness of his ways, he looks you in the eye and says without blinking: “You need to pay for my door and windshield.” This is the story of AIG and its longtime leader, Maurice “Hank” Greenberg. Greenberg, as I mentioned last week, is suing the U.S. government over the $180 billion bailout given to AIG in 2008. Up until then, AIG was the life of the party. Huge profits. Strong growth. AIG was an ATM. It earned $14 billion in 2006, $10.5 billion in 2005 and $11.05 billion in 2004.
But it was lubricated with risk. Oops. The insurer reported $99 billion in losses in 2008 and lost $3.37 billion through the first nine months of 2009. Greenberg and his companies (notably Starr International Co.) were the biggest AIG investors at the time, and the government’s bailout effectively crushed their shares. In August 2007, an AIG share was worth $1,320. Today, it’s $52.65. That’s a 96% drop. Maybe, if you’re “Hank” Greenberg, that doesn’t seem fair. On the other hand, it’s better than being dead. And that’s exactly where AIG shares would be without taxpayers’ aid. Yes, taxpayers. You. You’re the one who smashed the window and pulled AIG out of the burning car. And guess what? You’re the one who’s on trial now. Your buddy wants you to pay to fix his car. As your counsel, I have some good news and bad news. The good news is you have a great case. There is no legal precedent that suggests you’re at fault. It was the heat of the moment. You did what you had to do.
Even looking for guilty pleas. Jail time?
U.S. prosecutors are pressing to bring charges against a bank for currency-rate rigging by the end of the year, and actions against individuals will probably follow in 2015, according to people familiar with the probe. The Justice Department may seek guilty pleas from several firms, including at least one in the U.S., said one of the people, asking not to be named because details of the investigation aren’t public. While federal prosecutors have wrested convictions from foreign banks this year for wrongdoing, they’ve yet to win a guilty plea from a U.S. lender in that push, and they’re preparing for strong resistance if they attempt to do so. Justice Department officials have vowed to hold more institutions and individuals accountable for criminal conduct amid public frustration over the lack of prosecutions against top Wall Street executives for the worst financial crisis since the Great Depression. Starting currency-rigging prosecutions this year would help the Justice Department keep pace with regulators.
The U.K. Financial Conduct Authority, the U.S. Federal Reserve, and the Office of the Comptroller of the Currency are already in settlement talks with several banks with a goal of reaching some agreements next month, people familiar with the cases have said. The U.S. criminal investigation has moved quicker than U.K. prosecutors. The Serious Fraud Office opened an investigation in July and will announce any charges next year at the earliest, according to David Green, the London agency’s director. Attorney General Eric Holder, in his final speech about financial crime before announcing plans last month to step down, said the currency probe was advancing quickly thanks to undercover cooperators and would probably result in charges against bankers in the coming months. Investigators are looking into allegations that traders shared data about orders with people at other firms using instant-message groups with names such as “The Cartel” and “The Bandits’ Club.”
She’ll sell the bad data as a one-off, and spend only at home, damn the rest of the EU. And then say: you’ll al do better once we do.
Chancellor Angela Merkel’s government is flirting with measures to stimulate growth, reviewing its options amid evidence that Europe’s largest economy risks plunging into recession. Among plans being discussed is lowering the mandatory pension contribution by 0.6 percentage point, which would funnel €6 billion ($7.6 billion) into the economy, said Michael Fuchs, deputy parliamentary leader of Merkel’s Christian Democratic Union in the lower house. “There is some leeway for measures to help growth,” Fuchs said in a telephone interview. Germany’s economy is losing steam as sluggish growth in the euro area and political tension with Russia weigh on demand. With next year’s target to balance the budget looming, Merkel’s coalition has resisted calls to boost spending to foster growth. “The government has been very reluctant, very often just pointing to an accountant’s point of view, saying everything is fine and we have our debt brake coming up and we can’t use this for more investment,” said Carsten Brzeski, chief economist at ING-DiBa in Frankfurt.
“This position is clearly changing now and the economic data is pushing the government to change.” German industrial production fell more than economists forecast in August, down a seasonally adjusted 4% from July, the Economy Ministry said yesterday. That was the steepest decline since January 2009, when the euro area was sliding into its debt crisis. The drop adds to a broader picture of Germany’s $3.6 trillion economy grinding to a halt. Factory orders slid 5.7% in August — also the most since 2009 — as manufacturing shrank in September. New orders fell at the fastest pace since 2012, a purchasing managers survey showed. Business confidence has also taken a hit, with the Ifo research institute showing it plummeting to the lowest level in almost a year and a half. Unemployment rose for a second month in September. The downward trend in economic data follows a 0.2% decline in gross domestic product in the second quarter.
They say it’s due to competition. But how about that drop in spending, because people have less money and more debt?
Prices in UK shops fell at an accelerated rate in September as supermarkets and other retailers slashed prices amid fierce competition in the retail sector. Shop prices were down for a seventh month, falling by 1.8% compared with September 2013, and at a faster rate than August, when prices were 1.6% lower, according to the British Retail Consortium (BRC) and Nielsen. Consumers are expected to benefit from the competitive price environment as retailers battle for customers in the runup to Christmas. Helen Dickinson, director general at the BRC, said: “Retailers are turning their attention to Christmas by reading current conditions and matching consumer sentiment well with their promotions and offers. Falling commodity prices, the strengthening of sterling, benign pressure in the supply chain and, critically, fierce competition across the retail industry suggests lower shop prices for consumers will continue.
Zombies and empty apartments.
It’s time to keep a close eye on China’s banks. As Beijing scrambles to prop up a slowing economy and cooling real estate market, the government last week announced measures to make it easier for households and developers to borrow more money. That may help in the short run. But the cure, say some observers, will do little to address the growing pile of bad loans that has left China’s financial system with deepening debt hangover. “In the overall level of debt, they can still push it without creating immediate problems,” said Diana Choyleva, head of Macroeconomic Research at Lombard Street Research. “But if you look at the rate of increase in debt since the global financial crisis it’s extremely alarming.” China’s debt has been piling up for years. To offset the financial collapse of 2008, Beijing borrowed and spent heavily on an epic building spree of roads, airports, rail lines and water projects. Now, to keep growing, China has to keep spending: More than half of gross domestic product comes from investment. (Consumer spending, while rising, makes up about a third of growth.)
Much of China’s borrowing and spending fueled an historic run-up in property prices that has recently stalled, raising fears that a wider, deeper slump could weaken China’s already slowing economy. In response to slumping property prices, China last week cut mortgage rates and down payment requirements for some homebuyers for the first time since the 2008 global financial crisis. The government’s latest effort to prop up a sagging real estate market also included steps to boost credit for cash-strapped developers, who risk getting stuck with too much debt if the slump deepens. China’s real estate market has survived similar slumps since 2008. But some economists warn the risks of a full-blown Chinese banking crisis are rising. If it happened, the reverberations would be felt around the world, according to a report this week from economists at Oxford Economics, who ran numbers through their computer models and came up with a scenario worthy of a Hollywood disaster movie.
Crude-oil futures sank to new lows for this year in Asian trade Wednesday, extending the recent selloff in oil markets and pushing the Brent crude benchmark below $91 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $87.77 a barrel, down $1.08 in the Globex electronic session. November Brent crude on London’s ICE Futures exchange fell $1.22 to $90.89 a barrel. Markets were still spooked by the International Monetary Fund’s dim global economic growth forecasts and cuts in the U.S. Energy Information Administration’s oil demand forecasts announced yesterday, Singapore-based traders said. The U.S. crude benchmark traded near its lowest since April 2013, while Brent crude was at its lowest since June 2012.
Damage control wherever you look.
The US shale boom is producing record amounts of new oil as demand weakens, pushing prices down toward levels that threaten to reduce future drilling. Domestic fields will add an unprecedented 1.1 million barrels a day of output this year and another 963,000 in 2015, raising production to the most since 1970, according to the U.S. Energy Information Administration. The Energy Department’s statistical arm forecasts consumption will shrink 0.2% to 18.9 million barrels a day this year, the lowest since 2012. More supply from hydraulic fracturing and horizontal drilling, and less demand, are contributing to the tumble in West Texas Intermediate crude. The U.S. benchmark is down 18% since June 20 and fell below $90 a barrel on Oct. 2 for the first time in 17 months. “If prices go to $80 or lower, which I think is possible, then we are going to see a reduction in drilling activity,”
Ralph Eads, vice chairman and global head of energy investment banking at Jefferies, which advised 38% of U.S. energy mergers and acquisitions this year, said. “It will be uncharted territory.” WTI declined to as low as $87.39 a barrel today on the New York Mercantile Exchange, heading for the the lowest close since April 17, 2013. It traded at $87.75 a barrel in London. Prices in domestic fields such as North Dakota’s Bakken shale are several dollars lower because transportation bottlenecks raise the cost of reaching refiners. Shale oil is expensive to extract by historical standards and only viable at high-enough prices, Ed Morse, Citigroup’s head of global commodities research in New York, said by phone Sept. 23. Oil from shale formations costs $50 to $100 a barrel to produce, compared with $10 to $25 a barrel for conventional supplies from the Middle East and North Africa, the Paris-based IEA estimates. “There is probably something to the notion that if prices fell suddenly to $60 a barrel, the production growth would turn negative,” he said.
Across the whole country. And Canada is huge!
So you’re the Canadian oil industry and you do what you think is a great thing by developing a mother lode of heavy crude beneath the forests and muskeg of northern Alberta. The plan is to send it clear to refineries on the U.S. Gulf Coast via a pipeline called Keystone XL. Just a few years back, America desperately wanted that oil. Then one day the politics get sticky. In Nebraska, farmers don’t want the pipeline running through their fields or over their water source. U.S. environmentalists invoke global warming in protesting the project. President Barack Obama keeps siding with them, delaying and delaying approval. From the Canadian perspective, Keystone has become a tractor mired in an interminably muddy field. In this period of national gloom comes an idea — a crazy-sounding notion, or maybe, actually, an epiphany. How about an all-Canadian route to liberate that oil sands crude from Alberta’s isolation and America’s fickleness?
Canada’s own environmental and aboriginal politics are holding up a shorter and cheaper pipeline to the Pacific that would supply a shipping portal to oil-thirsty Asia. Instead, go east, all the way to the Atlantic. Thus was born Energy East, an improbable pipeline that its backers say has a high probability of being built. It will cost C$12 billion ($10.7 billion) and could be up and running by 2018. Its 4,600-kilometer (2,858-mile) path, taking advantage of a vast length of existing and underused natural gas pipeline, would wend through six provinces and four time zones. It would be Keystone on steroids, more than twice as long and carrying a third more crude. Its end point, a refinery in the blue-collar city of Saint John, New Brunswick, operated by a reclusive Canadian billionaire family, would give Canada’s oil-sands crude supertanker access to the same Louisiana and Texas refineries Keystone was meant to supply.
Lovely. And that’s in ‘good’ times.
Despite consistent stock market highs this year, most large-cap fund managers in the U.S. have been unable to match the returns of the S&P 500 – and now it seems Australian fund managers are facing the same fate. Over five years, the majority of actively managed Australian equity funds in most categories failed to beat their comparable benchmark indices as of the end of June, according to data from S&P Dow Jones Indices. Some 75% of Australian large-cap equity funds have underperformed Australia’s main index the S&P/ASX 200 over the last five years and over three years, 66% of funds failed to match the returns of the market. Equity funds were not the only culprit, with 80% of bond funds also underperforming the S&P/ASX Australian Fixed Interest Index. The figures are similar to those released by S&P Capital IQ Fund Research in August on U.S. funds, which showed about 80% of large-cap mutual funds underperformed the S&P 500, which most analysts put down to a persistent lack of volatility in markets.
It’s teh people the system selects for, as much as the system itself.
The more power you possess, the more insecure you feel. The paranoia of power drives people towards absolutism. But it doesn’t work. Far from curing them of the conviction that they are threatened and beleaguered, greater control breeds greater paranoia. On Friday, the chancellor of the exchequer, George Osborne, claimed that business is under political attack on a scale it has not faced since the fall of the Berlin Wall. He was speaking at the Institute of Directors, where he was introduced with the claim that “we are in a generational struggle to defend the principles of the free market against people who want to undermine it or strip it away”. A few days before, while introducing Osborne at the Conservative party conference, Digby Jones, former head of the Confederation of British Industry, warned that companies are at risk of being killed by “regulation from ‘big government’” and of drowning “in the mire of anti-business mood music encouraged by vote-seekers”.
Where is that government and who are these vote-seekers? They are a figment of his imagination. Where, with the exception of the Greens and Plaid Cymru – who have four MPs between them – are the political parties calling for greater restraints on corporate power? When David Cameron boasts that he is “rolling out the red carpet” for multinational corporations, “cutting their red tape, cutting their taxes”, promising always to set “the most competitive corporate taxes in the G20: lower than Germany, lower than Japan, lower than the United States”, all Labour can say is “us too”. Its shadow business secretary, Chuka Umunna, once a fierce campaigner against tax avoidance, accepted a donation by a company which delivers “tailored tax solutions to individuals and organisations internationally”. The shadow chancellor, Ed Balls, cannot open his lips without clamping them around the big business boot. There’s no better illustration of the cross-party corporate consensus than the platform the Tories gave to Jones to voice his paranoia.
Jones was ennobled by Tony Blair and appointed as a minister in the Labour government. Now he rolls up at the Conservative conference to applaud Osborne as the man who “did what was right for our country. A personal pat on the back for that.” A pat on the head would have been more appropriate – you can see which way power flows. The corporate consensus is enforced not only by the lack of political choice, but by an assault on democracy itself. Steered by business lobbyists, the EU and the US are negotiating a Transatlantic Trade and Investment Partnership. This would suppress the ability of governments to put public interest ahead of profit. It could expose Britain to cases like El Salvador’s, where an Australian company is suing the government before a closed tribunal of corporate lawyers for $300m (nearly half the country’s annual budget) in potential profits foregone. Why? Because El Salvador refused permission for a gold mine that would poison people’s drinking water.
I’m afraid Paul Farrell is largely right.
GOP conservatives, Big Oil, Exxon Mobil, Koch billionaires, and every other hard-right climate-science denier must love Naomi Klein’s new book, “This Changes Everything: Capitalism vs. The Climate.” Why? The book’s old news, the title should be: “This Changes Nothing: Capitalism Still Wins, Climate Still Loses.” Yes, the future looks brighter than ever for capitalism. This is the real WWIII. Klein has known the world was sinking deep into a “Capitalism vs. The Climate” global war since well before her last book, “The Shock Doctrine: Rise of Disaster Capitalism,” a historical survey of the conservative revolution launched after WWII by Nobel Economist Milton Friedman and “Atlas Shrugged” author Ayn Rand. That revolution sunk its roots deeper into American history under the leadership of President Ronald Reagan and Fed Chairman Alan Greenspan. Back in 2007 we were early fans. In our review of “Shock Doctrine” we called it one of the best economics book of the new 21st century. At the time, it was.
But in the past seven years the global zeitgeist moved past “Shock Doctrine,” while America got worse, sinking deeper into chaos — politically, economically, militarily, culturally. By detailing how conservatives emerged so successful in their power grab in the generation since the Reagan revolution, “Shock Doctrine” has actually motivated conservatives to keep grabbing more and more power. Yes, conservative strategies are working. And Klein’s new book is guaranteed to further emboldened conservatives to build on their power base … further accelerating America’s downward spiral … as capitalism keeps widening the global inequality gap … as the 67 billionaires who now own half the world will keep grabbing more … as Credit Suisse Bank’s prediction that by 2100 11 trillionaires will rule the planet seems more credible … as economist Tom Piketty’s warning that capitalism has become so powerful it is unstoppable, that it will continue widening the inequality gap, even though Pope Francis warns that inequality as the “root cause of all the world’s problems.”
Yes, it’s too late. Klein’s new book was to be a game-changer. Now it’s old news. Changed nothing. Capitalism keeps winning. Planet Earth keeps losing. The global capitalist ideology truly is the global zeitgeist, pouring more fuel on the fire, further accelerating the downward spiral.
Undoubtedly. When will borders start closing?
The World Health Organization said on Tuesday that Europe would almost certainly see more cases of Ebola after a nurse in Spain became the first person known to have caught the virus outside Africa. With concerns growing globally that the worst Ebola outbreak on record could spread beyond West Africa, where it has killed more than 3,400 people in three impoverished countries, Spanish officials tried to reassure the public they were tackling the threat. Health experts said the chances were slim of a full-blown outbreak outside Africa. Rafael Perez-Santamaria, head of the Carlos III Hospital in Madrid, where the infected nurse, Teresa Romero, had treated two Spanish missionaries who had contracted the disease in West Africa, said medical staff were “revising our protocols”. Four people including the nurse’s husband were admitted to hospital for observation. One of the four, another nurse, who had diarrhea but no fever, tested negative for the virus, a Spanish health source said.
Madrid’s regional government said it had ordered a dog belonging to Romero and her husband put down, despite the husband’s opposition. “The existence of this pet which has been in the home and in close contact with the patient affected by the Ebola virus … presents a possible transmission risk to humans,” a statement said. It would be killed in such way as to spare it any suffering and then be incinerated, the authorities said. Even though western European hospitals, unlike most of those in the affected parts of Africa, have the facilities to isolate an infected patient, WHO European director Zsuzsanna Jakab said it was “quite unavoidable … that such incidents will happen in the future because of the extensive travel from Europe to the affected countries and the other way around”. Nevertheless, she said that “the most important thing in our view is that Europe is still at low risk, and that the western part of the European region particularly is the best prepared in the world to respond to viral haemorrhagic fevers including Ebola”.
Death is a depressingly inevitable consequence of life, but now scientists believe they may have found some light at the end of the tunnel. The largest ever medical study into near-death and out-of-body experiences has discovered that some awareness may continue even after the brain has shut down completely. It is a controversial subject which has, until recently, been treated with widespread scepticism. But scientists at the University of Southampton have spent four years examining more than 2,000 people who suffered cardiac arrests at 15 hospitals in the UK, US and Austria. And they found that nearly 40% of people who survived described some kind of ‘awareness’ during the time when they were clinically dead before their hearts were restarted.
One man even recalled leaving his body entirely and watching his resuscitation from the corner of the room. Despite being unconscious and ‘dead’ for three minutes, the 57-year-old social worker from Southampton, recounted the actions of the nursing staff in detail and described the sound of the machines. “We know the brain can’t function when the heart has stopped beating,” said Dr Sam Parnia, a former research fellow at Southampton University, now at the State University of New York, who led the study. “But in this case, conscious awareness appears to have continued for up to three minutes into the period when the heart wasn’t beating, even though the brain typically shuts down within 20-30 seconds after the heart has stopped. “The man described everything that had happened in the room, but importantly, he heard two bleeps from a machine that makes a noise at three minute intervals. So we could time how long the experienced lasted for. “He seemed very credible and everything that he said had happened to him had actually happened.”