Gottscho-Schleisner Fishing boat at Fulton Market Pier, NY 1933
In just 15 years! Wrap your head around that!
As the global economy grows, the world is going to get a lot more thirsty in 2030 if steps aren’t taken to cut back on fresh water use now, the United Nations says. At current usage rates, the world will have 40% less fresh water than it needs in 15 years, according to the United Nations World Water Assessment Program in its 2015 report, which came out ahead of the U.N.’s World Water Day on Sunday. “Strong income growth and rising living standards of a growing middle class have led to sharp increases in water use, which can be unsustainable, especially where supplies are vulnerable or scarce and where its use, distribution, price, consumption and management are poorly managed or regulated,” the report said.
Factors driving up demand for water include increased meat consumption, larger homes, more cars and trucks on the road, more appliances and energy-consuming devices, all staples of middle -class life, the report noted. Population growth and increased urbanization also contribute to the problem. Water demand tends to grow at double the rate of population growth, the report said. The global population is expected to grow to 9.1 billion people by 2050, up from the current 7.2 billion. More people living in cities also put strain on water supplies.
The report estimates that 6.3 billion people, or about 69% of the world’s population, will be living in urban areas by 2050, up from the current 50%. The biggest drain on water resources is agriculture, which uses about 70% of the world’s fresh water supplies. Tapping into groundwater supplies to make up for surface-water deficits strains resources. The report said that 50% of the world relies solely on groundwater to meet basic daily needs and that 20% of the world’s aquifers are already over-exploited.
“..liquidity in the US credit markets has dropped by about 90% since 2006..”
[..].. it is the corporate bond market where worries about trading conditions are most acute. The ultra-loose monetary policies pursued by the Fed, the Bank of England and the European Central Bank has resulted in a torrent of bond issuance in recent years from companies seeking to capitalise on rock bottom interest rates. “Now is the perfect time to borrow if you’re a company,” says Gary Jenkins, a credit strategist at LNG Capital. European and British companies, excluding banks, sold a combined $435.3bn of investment-grade debt last year, and $458.5bn in 2013, according to Dealogic. The level of issuance is much greater than before the financial crisis. In 2005, for example, $155.7bn was raised from corporate bond sales and $139.8bn the year before that.
Companies issuing riskier, high-yield debt have been similarly prolific. Last year, European businesses sold $131.6bn of so-called junk bonds, up from $104.4bn in 2013, the Dealogic data show. In 2005, they issued $20.4bn. At the same time that issuance in the primary market has grown, trading of company bonds by investors in the secondary market has dried up, a liquidity shortage that ironically has been caused by regulators’ attempts to avert a repeat of the crisis that shook the financial system in 2008. “Bank regulation is generally a good thing, but one of the unintended consequences has been the reduction in market liquidity,” says John Stopford, co-head of multi-asset investing at Investec Asset Management.
“And that could come back to haunt us. People need to be aware of that risk and be prepared for it.” Unlike shares, which are traded on exchanges, bonds are typically traded over-the-counter and investment banks traditionally played a key role in facilitating the buying and selling of bonds issued by companies. But the regulatory crackdown on proprietary trading and increasingly stringent capital requirements, which have hit market-making activities, have forced banks to retreat from the market. “Tighter bank regulation makes it more expensive for banks to hold bond inventories, which reduces their desire to provide liquidity to the market,” says Stopford. As a result, it has become much harder for investors to trade corporate debt.
“If you’re working a €50m block of bonds, there’s no way you’re going to get a price. So instead you have to chip away and sell €2m to €3m per day,” according to Andy Hill, ICMA’s director of market practice and regulatory policy. “A few years ago, you would go to your favoured bank with a large block, they would show you a price, they would take it onto their balance sheet, hedge it and then trade out of it. Banks can’t do that any more.” The impact of the fall-back by banks on trading has been dramatic. According to the Royal Bank of Scotland, liquidity in the US credit markets has dropped by about 90pc since 2006. Jenkins at LNG Capital says that the poor liquidity has prompted some fund managers to alter their investment behaviour altogether and buy and hold bonds until maturity, rather than selling them on and booking the gains.
“..companies that generate more than 50% of sales outside the U.S. are expected to post an earnings decline of 11.6% in the first quarter..”
The soaring dollar is crunching profits at giant U.S. multinationals, prompting Wall Street analysts to make their deepest cuts to earnings forecasts since the financial crisis and boosting the appeal of smaller, domestically focused companies. The dollar has jumped 12% in 2015 against the euro and is up 27% from a year ago. The WSJ Dollar Index, which measures the dollar against a basket of currencies, is up 5.3% this year. The dollar’s surge against the euro has been driven by an aggressive ECB monetary-easing program that has come as the U.S. central bank is preparing to raise interest rates. Analysts, citing the dollar’s strength as a key factor, are predicting that profits at S&P 500 firms for the first quarter will show their biggest annual decline since the third quarter of 2009.
As a result, investors are keeping a continued bias toward U.S.-based stocks that do less business abroad, such as shares of small companies that tend to be more domestically focused, and on companies outside the U.S. that stand to benefit from a weakening of their home currency as the dollar strengthens, particularly European manufacturers. “What is remarkable is the speed with which the dollar has accelerated, and that speed brings with it some complications,” said Anwiti Bahuguna, senior portfolio manager on Columbia Management’s global asset allocation team, which oversees $68 billion. “The dollar strength is moving at a much, much faster pace than you’ve seen in history.”
Many investors say the dollar’s rise is behind the relatively strong performance of smaller-company stocks, which are often more domestically focused than large-company stocks. The Russell 2000 index of small-capitalization shares is up 5.1% this year and 10% in the last six months. That compares with gains in the S&P 500 index of 2.4% in 2015 and 4.9% over six months. The dollar’s jump has come as the ECB embarked on a new, aggressive easing of monetary policy. Investors expect the Fed to respond to a healthier U.S. economy by raising rates later this year, though many analysts are expecting later, slower increases following Wednesday’s dovish Fed policy statement. [..]
Goldman Sachs expects the euro to fall another 12% against the dollar over the next 12 months. [..] According to FactSet, companies that generate more than 50% of sales outside the U.S. are expected to post an earnings decline of 11.6% in the first quarter when results start rolling in next month. Companies that generate less than half of sales outside the U.S. are expected to post flat earnings for the quarter. Companies in the S&P earned 46% of their sales outside the U.S. in 2014, according to S&P Dow Jones Indexes. By contrast, 19% of sales for Russell 2000 companies comes from outside the U.S., according to Bank of America Merrill Lynch.
“Sour grapes over the AIIB makes America look isolated and hypocritical..”
Sometimes geopolitical shifts happen by accident rather than design. Historians may record March 2015 as the moment when China’s checkbook diplomacy came of age, giving the world’s number two economy a greater role in shaping global economic governance at the expense of the United States and the international financial institutions it has dominated since WWII. This month European governments chose, in an ill-coordinated scramble for advantage, to join a nascent, Chinese-led Asian Infrastructure Investment Bank (AIIB) in defiance of Washington’s misgivings. British finance minister George Osborne, gleeful at having seized first-mover advantage, stressed the opportunities for British business in a pre-election budget speech to parliament last week.
“We have decided to become the first major western nation to be a prospective founding member of the new Asian Infrastructure Investment Bank, because we think you should be present at the creation of these new international institutions,” he said after rebuffing a telephone plea from U.S. Treasury Secretary Jack Lew to hold off. The move by Washington’s close ally set off an avalanche. Irked that London had stolen a march, Germany, France and Italy announced that they too would participate. Luxembourg and Switzerland quickly followed suit. The trail of transatlantic and intra-European diplomatic exchanges points to fumbling, mixed signals and tactical differences rather than to any grand plan by Europe to tilt to Asia.
That is nevertheless the way it is seen by some in Washington and Beijing. As recounted to Reuters by officials in Europe, the United States and China who spoke on condition of anonymity because of the sensitivity of the subject, the episode reveals the paucity of strategic dialogue among what used to be called “the West”. It also highlights how the main European Union powers sideline their common foreign and security policy when national commercial interests are at stake. China’s official Xinhua news agency reflected Beijing’s delight. “The joining of Germany, France, Italy as well as Britain, the AIIB’s maiden G7 member and a seasoned ally, has opened a decisive crack in the anti-AIIB front forged by America,” it said in a commentary. “Sour grapes over the AIIB makes America look isolated and hypocritical,” it said.
Thrilled, I tell ya… Couldn’t be happier!
International Monetary Fund chief Christine Lagarde has said the IMF would be “delighted” to co-operate with the China-led Asian Infrastructure Investment Bank (AIIB). The AIIB has more than 30 members and is envisaged as a development bank similar to the World Bank. Mrs Lagarde said there was “massive” room for IMF co-operation with the AIIB on infrastructure financing. The US has criticised the UK and other allies for supporting the bank. The US sees the AIIB as a rival to the World Bank, and as a lever for Beijing to extend its influence in the region.
The White House has also said it hopes the UK will use “its voice to push for adoption of high standards”. Countries have until 31 March to decide whether to seek membership of the AIIB. As well as the UK, other nations backing the venture include New Zealand, Germany, Italy and France. Mrs Lagarde, speaking at the opening of the China Development Forum in Beijing, also said she believed that the World Bank would co-operate with the AIIB, China established the Asian lending institution in 2014 and has put up most of its initial $50bn (£33.5bn) in capital.
Wankers ‘R ‘Us: “Co-financing projects with existing institutions like the World Bank or the Asian Development Bank will help ensure that high quality, time-tested standards are maintained.”
The Obama administration, facing defiance by allies that have signed up to support a new Chinese-led infrastructure fund, is proposing the bank work in a partnership with Washington-backed development institutions such as the World Bank. The collaborative approach is designed to steer the new bank toward economic aims of the world’s leading economies and away from becoming an instrument of Beijing’s foreign policy. The bank’s potential to promote new alliances and sidestep existing institutions has been one of the Obama administration’s chief concerns as key allies including the U.K., Germany and France lined up in recent days to become founding members of the new Asian Infrastructure Investment Bank.
The Obama administration wants to use existing development banks to co-finance projects with Beijing’s new organization. Indirect support would help the U.S. address another long-standing goal: ensuring the new institution’s standards are designed to prevent unhealthy debt buildups, human-rights abuses and environmental risks. U.S. support could also pave the way for American companies to bid on the new bank’s projects. “The U.S. would welcome new multilateral institutions that strengthen the international financial architecture,” said Nathan Sheets, U.S. Treasury Under Secretary for International Affairs. “Co-financing projects with existing institutions like the World Bank or the Asian Development Bank will help ensure that high quality, time-tested standards are maintained.”
Mr. Sheets argues that co-financed projects would ensure the bank complements rather than competes with existing institutions. If the new bank were to adopt the same governance and operational standards, he said, it could both bolster the international financial system and help meet major infrastructure-investment gaps. No decision has been made by the new Chinese-led bank about whether it will partner with existing multilateral development banks, as the facility is still being formed, though co-financing is unlikely to face opposition from U.S. allies.
“We’ve seen that the strong axis is no longer so strong.”
France has become Europe’s “big problem”, according to the former prime minister of Italy, who warned that anti-Brussels sentiment and the rise of populist parties in the Gallic nation threatened to blow the bloc’s Franco-German axis apart. Mario Monti – who was dubbed “Super Mario” for saving the country from collapse at the height of the eurozone debt crisis – said France’s “unease” with the single currency had already created tensions between Europe’s two largest economies. “In the last few years we have seen France receding in terms of actual economic performance, in terms of complying with all the European rules, and above all in terms of its domestic public opinion – which is turning more and more against Europe,” he told The Telegraph.
France’s strained relationship with Brussels has been borne out through its persistent defiance of EU budget targets and the rise of Marine Le Pen’s far-right Front National party, “France is the big problem of the European Union because the whole construct has been leveraged on the foundation of a solid Franco-German entente. If it isn’t there then there is a poor destiny for Europe,” said Mr Monti. “We’ve seen that the strong axis is no longer so strong.” Jens Weidmann, the president of Germany’s Bundesbank, recently attacked the EU’s decision to give France extra time to sort out its budget. Mr Weidmann said countries such as France, which has failed to meet a 3pc deficit target for several years, should not be allowed to “perpetually put off” belt-tightening.
Mr Monti said Germany’s willingness “to exercise certain responsibilities” as the bloc’s hegemon had eased the eurozone’s problems. The respected economist, whose technocratic government was swept into power in 2011, also said the anti-Brussels sentiment in France was greater than many believed. “I’m always struck when I participate in debates in France – even the elite is so uneasy about the governance of the eurozone. “I would not be surprised to hear this tone in Athens or in Lisbon, but I’m very surprised to hear this in Paris.” France will vote in local elections on Sunday. A recent poll conducted by Le Figaro newspaper put Ms Le Pen’s party out in the lead, with 30pc of the vote.
In a warning to France, Mr Monti said: “Maybe you forgot, but we all remember that France was the country that wanted the euro, not Germany. “Germany reluctantly accepted the euro to get approval of the other countries for its reunification process. It would have much rather kept to the Deutsche Mark. It was France who insisted to have the single currency and now it’s so uneasy with it.” Mr Monti, a Brussels veteran who is currently president of Bocconi University, also said the “humiliating” diktats of the so-called “troika” had caused more damage to the Greek economy and should not continue.
Draghi is an ancient Bulgarian word for spin doctor. Which was old-Hungarian for BS.
Mario Draghi can gauge this week whether his optimism in the economy is well-founded. From business confidence in Germany to manufacturing in France and consumer spending in Italy, a smattering of data from across the 19-nation euro area will provide a glimpse at the state of the recovery. The ECB president, who has become more upbeat on the economy since announcing his quantitative-easing program two months ago, will get a chance to present his view on Monday when he addresses the European Parliament in Brussels. His words will come only days after protesters vented their anger outside the ECB’s new headquarters in Frankfurt over the institution’s perceived role in imposing fiscal austerity and economic hardship throughout Europe.
With unemployment still near record highs and strong support for populist parties like Greece’s Syriza threatening to tear apart the currency bloc, pressure is building on Draghi to ensure that monetary stimulus reaches beyond banks’ balance sheets. “Draghi will continue to cheerlead the effects of the ECB’s QE but warn that you need reforms to make the recovery extended and long-lasting,” said Thomas Harjes, senior European economist at Barclays Plc in Frankfurt. “There is still a significant amount of discontent in states that saw a surge in unemployment, and for this to change you really need a turn in employment dynamics.”
Helena Smith is quite good from Athens.
When the red carpet is rolled out for Alexis Tsipras in Berlin on Monday, the euro debt drama will come to a potentially decisive turning point. His host will be none other than Angela Merkel, Europe’s mother, its powerbroker par excellence and the queen of austerity, defender of the very policies the left-wing firebrand has vowed to dismantle. For many, it will be the long anticipated moment of truth. There has been much that is familiar on the great Greek crisis train. For those on board, it has been a rollercoaster ride, one that seems to have arrived at the place it began. In five years of recession and austerity, seeing their country argue with creditors and bargain over reforms, Greeks have had an added sense of deja vu. Athens, in many ways, is still where it was when the crisis exploded in late 2009.
Merkel’s olive branch could change that. European solidarity is on the line but so, too, is the future of Greece and the single currency bloc to which it belongs. Historians will see a meeting of minds or deduce that the euro crisis ultimately crashed on the buffers of immovable object meeting irresistible force. The stakes could not be higher. Speculation of a Greek default and exit from the eurozone has resurfaced with a vengeance. And in Greek-German relations – amid renewed talk of war reparations and Nazi crimes – the climate couldn’t be worse. So bad have bilateral ties become that, on Sunday, Manolis Glezos, the second world war hero and symbol of national resistance, appealed to both countries for calm and logic to prevail.
Toxic nationalism – the affliction the European Union was created to quell – was, he said, at risk of once again rearing its ugly head. “I am worried by the climate of division, intolerance and hostility that some are seeking to create between,” said the 92-year-old adding that Greeks in no way blamed today’s Germans for the atrocities of the Third Reich. As an icon of the left – and leading Euro MP of Tsipras’ radical left Syriza party – the plea was seen as a direct message to the Greek premier.
The anti-austerity leader flies into Berlin as the crisis moves from the chronic stage back into the acute. Money and time for Athens is running out. Greece is faced with some €1.6 billion in debt repayments by the end of March with another €2 billion maturing next month. There are real – and growing concerns – that with cash reserves drying up, the government will have to issue IOUs to pay pensions and public sector salaries next week. The euro zone’s weakest link has never been more dependent on Teutonic goodwill.
“He blames ECB limits on Greece’s ability to issue short-term debt as well as eurozone bailout authorities refusal to disburse any aid before Athens adopts a new round of economic reforms.”
Alexis Tsipras, the Greek prime minister, has warned Angela Merkel that it will be “impossible” for Athens to service its debt obligations if the EU fails to distribute any short-term financial assistance to the country. The warning, contained in a letter sent by Mr Tsipras to the German chancellor and obtained by the Financial Times, comes as concerns mount that Athens will struggle to make pension and wage payments at the end of this month and could run out of cash before the end of April. The letter, dated March 15, came just before Ms Merkel agreed to meet Mr Tsipras on the sidelines of an EU summit last Thursday and invited him for a one-on-one session in Berlin, scheduled for Monday evening. In the letter, Mr Tsipras warns that his government will be forced to choose between paying off loans, owed primarily to the IMF, or continue social spending.
He blames ECB limits on Greece’s ability to issue short-term debt as well as eurozone bailout authorities refusal to disburse any aid before Athens adopts a new round of economic reforms. Given that Greece has no access to money markets, and also in view of the spikes in our debt repayment obligations during the spring and summer…it ought to be clear that the ECB’s special restrictions when combined with disbursement delays would make it impossible for any government to service its debt, Mr Tsipras wrote. He said servicing the debts would lead to a sharp deterioration in the already depressed Greek social economy a prospect that I will not countenance. With this letter, I am urging you not to allow a small cash flow issue, and a certain institutional inertia, to not turn into a large problem for Greece and for Europe, he wrote. [..]
Mr Tsipras’s five-page letter is particularly critical of the ECB, which he said had forbidden Greek banks from holding more short-term government debt than they did when they requested an extension of the current bailout last month — a cap that has prevented Athens from relying on Treasury bills to fill its urgent cash needs because Greek banks have become nearly the only buyer of such debt. The Greek prime minister insisted the ECB should have returned to “the terms of finance of the Greek banks” that existed immediately following his government’s election — when ECB rules were more lenient — once the deal to extend Athens’ €172bn bailout through June was agreed last month.
When I read this, I’m thinking: why bother any longer?
The letter starts off by referring to a February 20 agreement by the eurogroup – the committee of all 19 eurozone finance ministers which is responsible for overseeing the EU’s portion of Greece’s €172bn bailout. That was the meeting where ministers ultimately agreed to extend the Greek bailout into June; it was originally to run out at the end of February, and the prospect of Greece going without an EU safety net had spurred massive withdrawals from Greek bank deposits, which many feared was the start of a bank run. The letter’s first paragraph also refers to a February 18 letter sent by Yanis Varoufakis, the Greek finance minister, to Jeroen Dijsselbloem, the Dutch finance minister who chairs the eurogroup. A copy of that letter can be found here. Its purpose was to formally request an extension of the existing bailout, something Tsipras had resisted since coming into office.
Dear Chancellor, I am writing to you to express my deep concern about developments since the 20th February 2015 Eurogroup agreement, which was preceded two days earlier by a letter from our Minister of Finance outlining a number of issues that the Eurogroup ought to resolve, issues which I consider to be important, including the need:
(a) To agree the mutually acceptable financial and administrative terms the implementation of which, in collaboration with the institutions, will stabilise Greece’s financial position, attain appropriate fiscal surpluses, guarantee debt stability and assist in the attainment of fiscal targets for 2015 that take into account the present economic situation.
This is a fancy way of saying that the two sides can’t agree on what reform measures must be adopted before Greece can get some of the €7.2bn remaining in the existing bailout and Tsipras wants the terms clarified quickly.
(b) To allow the European Central Bank to re-introduce the waiver in accordance with its procedures and regulations.
Given the economic climate, Greek banks have needed to borrow from the ECB at extremely cheap rates since they frequently can’t raise money for their day-to-day operations on the open market. But the ECB needs collateral for these loans, and one of the forms of collateral has always been government bonds owned by the banks. Well, as Greece’s fiscal situation deteriorates, those bonds are worth less and less – until, in the view of many central bankers, they’re too risky to accept as collateral at all. That’s been the situation for Greek bonds for a while, but up until Tsipras was elected, the ECB had a waiver in place allowing the central bank to accept the bonds as collateral since Athens was part of a bailout that was aimed at getting its finances back on track. Within days of Tsipras forming a government, the ECB withdrew the waiver, arguing that Athens was no longer committed to completing the bailout. Tsipras wants the wavier reinstated, since Greek banks are now relying on more expensive emergency loans from the Greek central bank instead of the ECB’s normal lending window.
(c) To commence work between technical teams on a possible new Contract for Recovery and Development that the Greek authorities envisage between Greece, Europe and the International Monetary Fund, to follow the current Agreement.
Greece will need a third bailout once the current programme ends in June, and here Tsipras is asking for talks on a new rescue to begin.
(d) To discuss means of enacting the November 2012 Eurogroup decision regarding possible further debt measures and assistance for implementation after the completion of the extended Agreement and as a part of the follow-up Contract.
Seemingly forgotten by everyone but the Greek government (and a few pesky reporters), in November 2012 eurozone finance ministers agreed to grant Athens additional debt relief if the government achieved a primary budget surplus (meaning that it takes in more than it spends, when interest on debt is not counted). Well, Greece reached a primary surplus in 2013. And no debt relief has been agreed. Tsipras is asking for this to happen in the third bailout programme.
Based on the in-principle acceptance of this letter and its content, the President of the Eurogroup convened the 20th February meeting which reached a unanimous decision expressed in a communiqué. The latter constitutes a new framework for the relationship between Greece, its partners, and its institutions.
This may appear a rhetorical flourish, but it gets to something deeper that continues to plague the relationship: Tsipras regards the February 20 agreement as a break from what came before; other eurozone leaders, particularly in Germany, regard it as simply an extension of the existing bailout programme.
Sell your physical assets to Moscow and Beijing? You’d be crazy to do that.
The government is said to be trying to bring Moscow and Beijing to the negotiation table for the privatization of Piraeus and Thessaloniki ports, the Thrassio transit center and rail service operator TRAINOSE in order to secure financial support. These are projects of high added value for the Greek economy and will be at the focus of top-level visits to Russia and China by Greek officials in the coming weeks. What is at issue is whether they will be conceded via international tender – as the government has said they will – or through bilateral agreements, which are allowed between European Union members and third countries but are subject to EU competition rules. Prime Minister Alexis Tsipras is due to visit Moscow on April 8 escorted by National Defense Minister Panos Kammenos, who will return to the Russian capital nine days later.
Their agenda, besides energy and defense issues, will include Russian interest in the port of Thessaloniki and in TRAINOSE. Meanwhile, while Beijing has repeatedly stated its desire for a strong and united eurozone, with Greece obviously a member, sources say that it is reluctant to risk harming ties with the EU by intervening in the Greek-European discourse. Deputy Prime Minister Yiannis Dragasakis, Foreign Minister Nikos Kotzias and State Minister Nikos Pappas will be visiting China with his in mind. The Greek mission is departing for Beijing on Tuesday on a five-day visit, but it is not yet known whether the Greek ministers will be able to meet with Chinese Premier Li Keqiang, in a rapidly deteriorating international climate for Greece.
“It would involve national governments and banks bypassing the ECB’s undemocratic, supra-national stranglehold and so the ECB wants nothing to hear of it. Sadly, it appears that Greece’s new top finance ministers are willing to comply with the ECB’s dominance..”
In this battle, as Berlin-based Greek blogger “Techiechan” observes, the Alexis Tsipras administration with the aid of Finance Minister Yanis Varoufakis so far succeeded on two points: they have introduced a slither of transparency to the notoriously opaque European way of doing political business and have exposed to an international public the dominance of the German government in European affairs, as an account of a meeting of top euro area officials by US economist James Galbraith proves. But this, in turn, has led to a stronger backlash against Greece with most Germans for the first time wanting it to leave the euro area. Surprisingly, on the extremely sensitive subject of Nazi-era war reparations, which Schauble dismisses as a ploy, certain German politicians have broken rank and want to come to an agreement with Greece.
The Greek government is less keen on making as concrete calculations when it comes to solving its side of the crisis and Tsipras’s brave rhetoric of refusing to succumb to what he calls “blackmail” is not enough. Unless the government finds ways around the ECB’s “nein” stance towards lending to Greece’s main banks and at the same time miraculously kick-starts income collection (taxes and social security contributions from those who so far have were not paying, from so-called oligarchs to professional and regional pressure groups), it might run out of money in the coming weeks. Greece might not leave the euro zone but default inside it, given its obligations, foreign and domestic.
Is there a way out? On the level of unconventional but common sense solutions to get Greece’s economy going, Richard Werner, a German academic with immense private-sector experience who has lived through Japan’s withering and South East Asia’s blooming, has proposed what he calls “Enhanced Debt Management”. There is a hitch, though. It would involve national governments and banks bypassing the ECB’s undemocratic, supra-national stranglehold and so the ECB wants nothing to hear of it. Sadly, it appears that Greece’s new top finance ministers are willing to comply with the ECB’s dominance, as an editorial they co-authored for the Financial Times illustrates.
They should refuse.
The agreement reached at a mini EU summit with Greek Prime Minister Alexis Tsipras and other high-level EU officials, could mark the beginning of a more constructive engagement between the government and official lenders. This should become obvious in the next 10 days or so because failure to do so may bring about unpleasant consequences, including a credit crunch. Greece bought some time at the recent meeting but the clock is ticking. The government has to present a full list of structural reforms to the lenders in the next few days, something that could have been done in previous weeks. The reforms will be evaluated and hopefully approved by the Eurogroup so that a portion of the €7.2 billion earmarked for Greece under the second adjustment program can be disbursed.
Government officials are hopeful of smoother cooperation with the technocrats of the so-called Brussels Group, comprised of senior officials from the European Commission, the IMF, the ECB and the ESM (European Stability Fund), who are on a fact-finding mission in Athens. However, third-party observers who are aware of the review process and the fundamental weaknesses of the Greek civil service are not that optimistic. Although communication between the two sides may be restored, helping reduce the frustration of the technical teams of the Brussels Group, the speed with which ministry officials and others can respond to queries about data remain a big question mark. Unless the Greek side has done some homework and is ready to deliver the figures requested, the observers say they would be surprised by a response in such a short period of time.
If they are right, the review process will not be completed before we get well into April and Greece will not even be able to get the €1.9 billion it is hoping for from the return of income from bonds held by the ECB by then. Politics aside, the observers also point out that the Greek side has underestimated the role of the technocrats involved in the review process. According to them, their role is not limited to mere fact-finding but extends to producing policy proposals sent to their superiors for approval or modifications if the Greek side objects. As far as we know, such engagement between the two sides has not taken place yet for fiscal and other data.
“We tried, we held meetings and we did not succeed because countries (outside OPEC) were insisting that OPEC carry the burden and we refuse that OPEC bears the responsibility..”
OPEC will not take sole responsibility for propping up the oil price, Saudi Arabia’s oil minister said on Sunday, signalling the world’s top petroleum exporter is determined to ride out a market slump that has roughly halved prices since last June. Last November, Organization of the Petroleum Exporting Countries kingpin Saudi Arabia persuaded members to keep production unchanged to defend market share. The move accelerated an already sharp oil price drop from peaks last year of more than $100 per barrel that was precipitated by an oversupply of crude and weakening demand. Since the oil price collapse, top OPEC exporter Saudi Arabia has said it wants non-OPEC producers to cooperate with the group. But Saudi oil minister Ali al-Naimi said on Sunday that plan had so far not worked.
“Today the situation is hard. We tried, we held meetings and we did not succeed because countries (outside OPEC) were insisting that OPEC carry the burden and we refuse that OPEC bears the responsibility,” Naimi told reporters on the sidelines of an energy conference in Riyadh. “The production of OPEC is 30% of the market, 70% from non-OPEC…everybody is supposed to participate if we want to improve prices.” Earlier, OPEC governor Mohammed al-Madi said it would be hard for oil to reach $100-$120 per barrel. Oil prices recovered since January to over $60 a barrel, but have fallen again in recent days following a bigger than expected crude stock build in the United States that fueled concerns of an oversupply in the world’s largest oil consumer.
Benchmark Brent crude settled at $55.32 a barrel on Friday. Oil companies, including U.S. shale producers, have slashed spending and jobs since the price of oil fell, and may face another round of spending cuts to conserve cash and survive the downturn. Naimi repeated on Sunday that politics played no role in the kingdom’s oil policy. Some producers such as Iran, a political regional rival of Saudi Arabia, have criticised Riyadh for its stance on maintaining steady production. “There is no conspiracy and we tried to correct all the things that have been said but nobody listens,” Naimi said. “We are not against anybody, we are with whoever wants to maintain market stability and the balance between supply and demand, and (with regards to) price the market decides it.”
The US government is expected this week to give the go-ahead to a controversial plan by Shell to restart drilling for oil in the Arctic. The green light from Sally Jewell, the interior secretary, will spark protests from environmentalists who have campaigned against proposed exploration by the Anglo-Dutch group in the Chukchi and Beaufort seas off Alaska. Jewell will make a formal statement backing the decision as soon as Wednesday, the earliest point at which her department can rubber-stamp an approval given last month given by the Bureau of Ocean Energy Management (BOEM).
The US Interior Department had been forced to replay the decision-making process after a US federal court ruled last year, in a case brought by environmental groups, that the government had made mistakes in assessing the environmental risks in the drilling programme. However, the BOEM, an arm of Jewell’s department, has backed the drilling after going through the process again, despite revealing in its Environmental Impact Statement “there is a 75% chance of one or more large spills” occurring. A leading academic, Prof Robert Bea, from the engineering faculty at the University of California in Berkeley, who made a special study of the Deepwater Horizon accident, has raised new concerns that the recent slump in oil prices could compromise safety across the industry as oil producers strive to cut costs.
And just about anywhere else too.
US spies operate in Switzerland without much fear of being unmasked, because Swiss intelligence, though knowledgeable and very professional, poses no threat to them, former NSA contributor Edward Snowden told Swiss TV. “The reason that made Switzerland so interesting as the capital of espionage – particularly Geneva – has not changed,” Snowden said in an interview to Darius Rochebin on RTS, a Swiss broadcaster. The two spoke at the International Film Festival and Forum on Human Rights on March 5. The transcript of the interview waspublished in le Temps, a Swiss French-language newspaper, this Saturday.
“There have always been international headquarters, the United Nations, WTO, WHO, ICRC [in Geneva]. There are representations of foreign governments, embassies, international organizations, NGOs … A number of organizations, and all of them are in one city [Geneva]!” According to Snowden, other Swiss cities have also been “affected” by US spies. “You have exceptional flows of capital and money in Zurich. You have bilateral agreements and international trade in Bern,” he said. The ex-NSA man recalled the time he was working in Geneva as an undercover US agent. He said the Americans weren’t afraid of Swiss intelligence. “Swiss services were not considered as a threat. [They] are also very knowledgeable and very professional. But they are small in numbers.”
Snowden compared Swiss intelligence to spying agencies in France, saying they respected French spies who are known to be “sophisticated and aggressive.” He drew examples of CIA operations concerning weapons of mass destruction, adding that people “involved in nuclear proliferation” were violating the law in Switzerland, Germany and neighboring countries. And unfortunately, “political influence” was seen in these cases, which “rose to the highest level in the government.” “That’s why representatives of the US government, even when they violate the Swiss laws, have a certain level of comfort, knowing that there will be no consequences,” Snowden concluded.
WIth the present OZ gov in charge, forget it.
Australia’s leading coral reef scientists have called for huge coalmining and port developments in Queensland to be scrapped in order to avoid “permanent damage” to the Great Barrier Reef. The Australian Coral Reef Society (ACRS) report, compiled by experts from five Australian universities and submitted to the United Nations, warns that “industrialising the Great Barrier Reef coastline will cause further stress to what is already a fragile ecosystem.” The report notes that nine proposed mines in the Galilee Basin, in central Queensland, will produce coal that will emit an estimated 705m tonnes of carbon dioxide at capacity – making the Galilee Basin region the seventh largest source of emissions in the world when compared to countries.
Climate change, driven by excess emissions, has been cited as the leading long-term threat to the Great Barrier Reef. Corals bleach and die as water warms and struggle to grow as oceans acidify. “ACRS believe that a broad range of policies should be urgently put in place as quickly as possible to reduce Australia’s record high per capita carbon emissions to a much lower level,” the report states. “Such policies are inconsistent with opening new fossil fuel industries like the mega coalmines of the Galilee Basin. Doing so would generate significant climate change that will permanently damage the outstanding universal value of the Great Barrier Reef.”
As well as calling for a halt to the Galilee Basin mines, which have broad support from the Queensland and federal governments, the scientists urge a rethink on associated plans to expand the Abbot Point port, near the town of Bowen. The expansion would make Abbot Point one of the largest coal ports in the world, requiring the dredging of 5m tonnes of seabed to facilitate a significant increase in shipping through the reef. The report warns dredging will have “substantial negative impacts on surrounding seagrass, soft corals and other macroinvertebrates, as well as turtles, dugongs and other megafauna.” Research has shown that coral disease can double in areas close to dredging activity.
Luckily the US has Sen. Imhofe…
By the end of our century, climate change could have many detrimental effects – including reduced agricultural output, prolonging droughts and damaging major infrastructure projects in China alone, according to Zheng Guogang, the country’s top weather scientist. Guogang made his statement to the Xinhua News Agency. While China has decided to cut emissions of greenhouse gasses and has also promoted an app exposing factories that are the biggest causes of air pollution, the government has abstained from discussions on the causes and effects of climate change. A documentary about the nation’s pollution problem called “Under the Dome,” was banned in China this week.
While Guogang’s statements indicate that the nation is willing to admit it has a problem, they have shied away from allowing the public to participate in the debate of what’s to be done about it. “To face the challenges from past and future climate change, we must respect nature and live in harmony with it. We must promote the idea of nature and emphasize climate security,” read the statement. Guogang maintained that global warming is a threat for major Chinese infrastructures, like their power station, the Three Gorges Dam, also the world’s largest.
As they have in the past, Chinese weather officials provided weather-related educational materials for schoolchildren, with supplements on how to plan for natural disasters. However, they have become more vocal about the impact of global warming and its impact on China. The country is publicly acknowledging that its rapidly moving economy is greatly affecting the environment. “By the end of the 21st century, there will be higher risks of extreme high temperatures, floods and droughts in China,” the China Meteorological Administration said last week in a statement. “The population growth and wealth accumulation in the 21st century is projected to have superposition and amplification effects on the risks of weather and climate disasters.”
China leads the world in its emissions of greenhouse gasses, overtaking the U.S. in 2006, and currently expects that its rate of carbon emissions will peak by the year 2030. It still has yet to reveal its goals for reducing greenhouse gases. Along with the U.S., it resolved to set carbon-emission limits this November. Like many other countries, however, China’s government said it needs to maintain its own economic development, that moving to alternative energy may impact the jobs of many of its citizens: “It is the basic right of the people to pursue a moderately comfortable life and improve their living standards. We need to balance many factors and move on step by step.”
A fantastically fascinating story, set against the pillaging of ancient sites by IS.
Two of the ancient cities now being destroyed by Islamic State lay buried for 2,500 years, it was only 170 years ago that they began to be dug up and stripped of their treasures. The excavations arguably paved the way for IS to smash what remained – but also ensured that some of the riches of a lost civilisation were saved. In 1872, in a backroom of the British Museum, a man called George Smith spent the darkening days of November bent over a broken clay tablet. It was one of thousands of fragments from recent excavations in northern Iraq, and was covered in the intricate cuneiform script that had been used across ancient Mesopotamia and deciphered in Smith’s own lifetime.
Some of the tablets set out the day-to-day business of accountants and administrators – a chariot wheel broken, a shipment of wine delayed, the prices of cedar or bitumen. Others recorded the triumphs of the Assyrian king’s armies, or the omens that had been divined by his priests in the entrails of sacrificial sheep. Smith’s tablet, though, told a story. A story about a world drowned by a flood, about a man who builds a boat, about a dove released in search of dry land. Smith realised that he was looking at a version of Noah’s Ark. But the book was not Genesis.
It was Gilgamesh, an epic poem that had first been inscribed into damp clay in about 1800BC, roughly 1,000 years before the composition of the Hebrew Bible (the Christian Old Testament). Even Smith’s tablet, which had been dated to some point in the 7th Century BC, was far older than the earliest manuscript of Genesis. A month or so later, on 3 December, Smith read out his translation of the tablet to the Society for Biblical Archaeology in London. The Prime Minister, William Gladstone, was among those who came to listen. It was the first time an audience had heard the Epic of Gilgamesh for more than 2,000 years.