DPC League Island Navy Yard, Philadelphia. USS Brooklyn spar deck 1898
As rate hikes come.
• Fed to Markets: Brace for Volatility (WSJ)
Federal Reserve officials are warning investors and foreign central bankers to brace for market turbulence as the Fed prepares to raise short-term interest rates next year. In a speech to central bankers Friday in Paris, Fed Chairwoman Janet Yellen said rate increases, when they materialize in advanced economies, “could lead to some heightened financial volatility.” New York Fed President William Dudley, at the same conference, issued a more detailed alert. “This shift in policy will undoubtedly be accompanied by some degree of market turbulence,” he said of future rate increases in the U.S. “Moreover, it could create significant challenges for those emerging market economies that have been the beneficiaries of large capital inflows in recent years.”
They offered their warnings as the Labor Department released new data showing the U.S. job market is improving faster than the Fed expects. The unemployment rate, at 5.8% in October, was below the 6.3% to 6.6% range the Fed projected last December for the end of 2014. In September, the Fed revised that projection to 5.9%-6.0%, still higher than the October rate. Other metrics being watched closely by the Fed showed continued gains. For instance, the percentage of the U.S. population that is employed rose to 59.2%, its highest level since July 2009. This employment-to-population ratio increased one percentage point from a year earlier, its largest one-year gain since March 1995. The Fed is eyeing rate increases as unemployment declines and slack in the economy slowly diminishes. Higher rates will be aimed at preventing the economy from overheating.
“Normalization could lead to some heightened financial volatility .. ”
• Central Banks Warn of Possible Bumpy Ride for Markets (Bloomberg)
Global central bankers said financial markets could suffer a bout of turbulence – again – when they begin to withdraw monetary stimulus. Janet Yellen and William Dudley of the Fed, Mexico’s Agustin Carstens and Bank of England Governor Mark Carney were among those to use a Paris conference of policy makers yesterday to talk about potential fallout from the eventual shift from record-low interest rates used to revive growth since the global financial crisis in 2008. “Normalization could lead to some heightened financial volatility,” Yellen told the gathering convened by the Bank of France. Carney said “the transition could be bumpy.” The comments suggest central bankers are trying to prepare better for the global effects of any withdrawal than in 2013, when then-Chairman Ben S. Bernanke unexpectedly signaled the Fed could soon start reducing bond purchases. That pushed up yields and rattled investors worldwide in the so-called taper tantrum.
Fed Chair Yellen and Dudley, president of the Fed Bank of New York, recognized the importance of U.S. officials being clear in their plans. “The Federal Reserve will strive to clearly and transparently communicate its monetary policy strategy in order to minimize the likelihood of surprises that could disrupt financial markets,” Yellen said. [..] Given a likely increase in U.S. rates next year will “undoubtedly be accompanied by some degree of market turbulence,” Dudley said the central bank has an obligation to provide global stability. “It is clear in retrospect that our attempts in the spring of 2013 to provide guidance about the potential timing and pace of tapering confused market participants,” Dudley said. With that episode in mind, Carstens said there is a “potential for financial market disruption” amid the unwinding of unconventional monetary policy.
They’re hot air.
• US Earnings Outlook Might Be Less Rosy Than Investors Think (Reuters)
With the U.S. Q3 earnings season almost at an end, many investors are breathing a sigh of relief as more companies surpassed profit expectations than in any quarter since 2010. But some analysts say investors may be brushing off their worries about corporate profits a little too soon. While most S&P 500 companies beat analysts’ expectations for third-quarter earnings, many just barely topped estimates, said Pankaj Patel at Evercore ISI in New York. Of the S&P 500 companies that had reported results as of early this week, 66% exceeded expectations, according to Evercore’s data analysis. But that figure falls to just 43% after stripping away companies that beat expectations by 5% or less, Patel’s research shows. The figure excluding beats of 5% or less is also well below the%age of beats according to data based on Thomson Reuters polls of analysts. On that data, 74% of S&P 500 companies so far have exceeded analysts’ expectations, which is the highest for any quarter since the second quarter of 2010.
Results have come in from 88% of the S&P 500. The results could mean that an increasing number of companies are trying to “manage their beat rate,” possibly to mask profit weakness, Patel said, noting that companies that exceed expectations by 5% or less typically see their share prices decline in the three days following results. “The beat rate is artificially high, but people still watch that %,” Patel said. “They keep buying and the market goes higher.” The S&P 500 has risen more than 3% since Oct. 8, roughly when this earnings season began. The index is up 9.1% from its Oct. 15 low. In addition, analysts’ keep trimming their profit forecasts. Estimates for fourth-quarter earnings are down from the start of the quarter, along with estimates for the first part of 2015. Earnings growth for the fourth quarter now is estimated at 7.6% compared with an Oct. 1 forecast for 11.1% growth, Thomson Reuters data showed. For the 2015 first quarter, profit growth is seen at 8.8%, down from an Oct. 1 forecast for 11.5% growth.
Moreover, the magnitude by which Q4 estimates are falling has increased compared with the previous quarter, said Nick Raich, chief executive officer of The Earnings Scout, a research firm specializing in earnings trends. In outlooks given by companies themselves – done by only a minority of companies – the news is not good. Negative outlooks outnumber positive ones for Q4 so far by a ratio of 3.9 to 1, up from the third quarter’s ratio of 3.3 to 1, Thomson Reuters data showed. “That’s a worsening trend,” Raich said. “The outlooks have gotten a little bit worse this quarter.” Outlooks could become even dimmer if lackluster demand overseas translates into weak results for the fourth quarter. “The United States clearly is the bright spot in the world,” said Uri Landesman, president of Platinum Partners in New York. “The rest of the world isn’t nearly as strong, so demand coming from certain places is weaker, and the currency is going to have an enormous impact going forward.”
How many western officials have you seen trying to address Gorby’s accusations?
• Gorbachev Warns US, Allies Put World On ‘The Brink Of A New Cold War’ (FT)
Former Soviet Union leader Mikhail Gorbachev warned on Saturday that the Ukraine crisis had brought the world to “the brink of a new Cold War”. “The world is on the brink of a new Cold War. Some say it has already begun, ” said the 83-year-old former Kremlin chief in a sombre speech delivered in Berlin at an event to mark the 25th anniversary of the fall of the Berlin Wall this weekend. He was speaking as reports from eastern Ukraine suggested that Kiev’s troops and the Russia-backed rebels may be preparing for renewed fighting. Agency reporters in eastern Ukraine said they saw more than 80 unmarked military vehicles on the move on Saturday in rebel-controlled areas of eastern Ukraine. The apparent escalation threatens the fragile ceasefire agreed in Minsk in early September and increases the danger of further pressure on east-west relations.
Speaking at a conference within a few metres of the iconic Brandenburg Gate, Mr Gorbachev accused the west, led by the US, of “triumphalism” after the fall of the Berlin Wall ended Soviet dominance in eastern Europe. Trust between Russia and the west had “collapsed” in the last few months, he said, highlighting the damage done by the Ukraine crisis. He called for new initiatives to restore trust, including a lifting of personal sanctions imposed by the US and the EU on top Russian officials in response to Moscow’s actions in Ukraine. Mr Gorbachev clearly sees the west as the culprit in the crisis, having given his unequivocal backing to Mr Putin last week. He said, before arriving in Germany, that he was “absolutely convinced that Putin protects Russia’s interests better than anyone else.”
Hungary PM Orban is an interesting man. The country is doing quite well, relatively.
• Hungary Under ‘Great Pressure’ From US Over Its Energy Deals With Russia (RT)
Washington is exerting heavy pressure on Hungary over the country’s decision to give a green light for the construction of the South Stream gas pipeline and expedite the construction by allowing companies without licenses to participate in the project. “The US is putting Hungary under great pressure fearing Moscow’s rapprochement with Budapest,”Hungarian media cited Prime Minister Viktor Orban saying in Munich, Germany after a meeting with Bavarian state premier Horst Seehofer. Orban said that Hungary’s relations with Russia have become “entangled in geopolitical and military and security policy issues,” AFP reports. The PM said that US is retaliating for Budapest’s willingness to endorse the South Stream gas pipeline development as well as a deal that would see Russia’s Rosatom expand Hungary’s nuclear power.
Under a deal worth up to €10 billion Rosatom will build a 2,000 megawatt addition to Hungary’s state-owned nuclear power plant MVM Paksi Atomeromu. Russia is Hungary’s largest trade partner outside of the EU, with exports worth $3.4 billion in 2013. Also it is highly dependent on Russian energy. “We don’t want to get close to anyone, and we don’t intend to move away from anybody,” Orban said.“We are not pursuing a pro-Russian policy but a pro-Hungarian policy,” as expansion of the nuclear plant was the “only possible means” to lower dependence on external energy resources. The PM remained firm that “cheap energy is key in strengthening Hungary’s competitiveness” as he also defended the law which gave a green light for the construction of the South Stream pipeline that would bypass Ukraine as a transit nation in EU gas supply chain. It “ensures Hungary gas supplies by eliminating risks posed by situation in Ukraine,” Orban said.“Even if South Stream does not diversify gas sources, it diversifies delivery routes.”
A forecast based on slumping oil prices.
• Kuroda Sprang Easing Surprise To Head Off Damaging Inflation Forecast (Reuters)
The Bank of Japan Governor not only surprised the markets with his latest splurge of monetary easing. He sprang it on his own board members just two days earlier, jolted into action to stop them making a low-ball forecast that might have sunk his flagship inflation target. To achieve maximum effect for the shock decision, Haruhiko Kuroda and right-hand man Masayoshi Amamiya kept only a handful of elite central bank bureaucrats in the loop as they laid the ground for the expansion of their quantitative and qualitative easing (QQE) program. They didn’t even give the usual forewarning to senior bureaucrats at the Ministry of Finance, according to interviews with nearly a dozen insiders and government sources with knowledge of the bank’s deliberations.
No leaks reached the media, and the announcement at the Oct. 31 policy meeting pushed the Nikkei stock average to seven-year highs and the yen to seven-year lows against the dollar. The market reaction will have been welcome news to Kuroda, but the impact he wanted above all was to alter inflation expectations in a country that has struggled with crippling deflation for two decades. Timing was critical – and not of his choosing. At the policy meeting the board would also issue a new consumer inflation forecast for the next fiscal year, based on the median estimate from the nine members. But two days before publication, the preliminary estimate was only around 1.5%, three of the sources said. That was well below the 1.9% forecast made in July, and if published could have been fatal to his key goal of hitting 2% from April next year.
Since price expectations play a key role in the consumer behaviours that ultimately determine prices, doubts about the target could be self-fulfilling. There were other triggers for action, including October’s plunge in oil prices and the fact that an easing burst would have more market impact in the week the U.S. Federal Reserve decided to turn its own liquidity taps off. But it was the inflation forecast that convinced Kuroda and his aides to go for another burst of stimulus, three sources said. Board members would then have to revisit their estimates in light of the new action.
“If you’re a central bank, it’s not a good sign when institutions actively seek to deter customers from owning your currency.”
• It’s a Bad Time to Be a Saver in Europe (Bloomberg)
In the post-crisis economic environment, with record-low interest rates in many countries, it’s better to be a borrower than a lender, despite Shakespeare’s admonition to be neither. These days, however, it’s even worse to be a saver. Since the European Central Bank in June sought to prod banks to lend more – by imposing negative interest rates on banks’ ECB deposits – savers are discovering that banks aren’t the only ones paying for the privilege of having cash on hand. At least three banks – State Street Corp., Bank of New York Mellon, and Deutsche Skatbank – have introduced negative rates for large euro deposits. It makes financial sense for the banks: If the ECB is charging them 0.2% for holding their cash, banks have a fiduciary duty to try to recoup that cost.
The result is that depositors suffer the consequences of the ECB’s interest-rate tyranny. They would do better to stash their money in mattresses. The ECB addressed the implications of its monetary-policy shift on its website after it cut its deposit rate below zero. It asked the question: “Do I now have to pay my bank to keep my savings for me? What is the effect of this negative deposit rate on my savings?” And then it answered itself:
There will be no direct impact on your savings. Only banks that deposit money in certain accounts at the ECB have to pay. Commercial banks may of course choose to lower interest rates for savers. The ECB’s interest rate decisions will in fact benefit savers in the end because they support growth and thus create a climate in which interest rates can gradually return to higher levels.
So the first sentence turned out to be incorrect. And the final sentence provides scant comfort to a depositor whose hard-earned cash is dribbling away and is too pessimistic about the future of the European economy to find more productive uses for the money, such as spending it or investing it. We’ve been here before, including in 2012 when depositors fled the euro and piled into other currencies. Credit Suisse imposed negative rates on Swiss franc cash balances, for example, and said it would “invite our customers to keep cash balances as low as possible to avoid negative credit charges.” State Street also imposed negative rates on Danish kroner deposits. If you’re a central bank, it’s not a good sign when institutions actively seek to deter customers from owning your currency.
Sure.
• We Can Control Risks Facing The Economy, Says China’s Xi Jinping (Reuters)
The risks faced by China’s economy are “not so scary” and the government is confident it can head off the dangers, president Xi Jinping told global business leaders on Sunday to dispel worries about the world’s second-largest economy. In a speech to chief executives at the Asia Pacific Economic Cooperation (Apec) CEO summit, Xi said even if China’s economy were to grow 7%, that would still rank it at the forefront of the world’s economies. China’s economy, the world’s second-largest, has had a rocky year. Growth slid to a low not seen since the 2008/09 global financial crisis in the third quarter dragged by a housing slowdown, softening domestic demand and unsteady exports. “Some people worry that China’s economic growth will fall further, can it climb over the ridge?” Xi said. “There are indeed risks, but it’s not so scary.
“Even at growth of around 7%, regardless of speed or volume, (we) are among the best in the world,” he said, noting that China’s economy remained “stable”. The remarks from Xi came a day after data showed annual growth in Chinese exports and imports cooled in October, in another sign of fragility in the economy that could prompt policymakers to take further action to stoke growth. To shore up activity, policymakers have loosened monetary and fiscal policies since April to ensure that the economy can grow by around 7.5% this year. A marked slowdown in growth would hit countries all over the world, but especially commodity producers such as Australia, Indonesia and Brazil that have benefited from strong Chinese demand.
This will not end well. There are limits.
• Sweden Grapples With Massive Household Debt As Rates Hit Zero (Reuters)
Sweden’s new center-left government and its financial authorities are under huge pressure when they meet on Tuesday to tackle a mountain of household debt that is casting a long shadow over one of Europe’s few economic bright spots. Having slashed rates to zero to fight the risk of deflation, top Swedish officials are now in a quandary over how to rein in borrowing and house price rises without sending the real estate market into a downward spiral. The country’s AAA-rated economy is still one of Europe’s strongest, with low public debt, sound state finances and banks among the best capitalized and most profitable in Europe. But consumers, barely touched by the financial crisis, have loaded up on cheap mortgages and caused Swedish property prices to triple over the last 20 years, prompting a warning from the IMF that the market is 20% overvalued. Adding to the problem: Sweden has built too few houses for the last 20 years and its capital Stockholm is one of Europe’s fastest growing cities.
Critics say the former center-right government added fuel to the fire by slashing real estate taxes and leaving 30% mortgage tax relief untouched. Meanwhile, Sweden’s household debt-to-income ratio has risen to above 170% – among Europe’s highest. The worry is that private consumption, nearly half of GDP, would suffer if rates rose or property prices fell. “The longer we wait, the bigger the imbalances are,” said Bengt Hansson, analyst at the Swedish National Board of Housing Planning and Building. “We already have a bubble, but we will avoid an even bigger bubble.” It will be hard to dissuade bullish Swedish consumers. In Stockholm’s frenzied housing market, buyers make multi-million crown offers to snap up flats they may only have seen in photographs. And cranes and scaffolding are common sights in suburbia as householders take advantage of generous tax breaks for home improvements.
“We don’t think it will crash badly,” said Peter, a 47 year-old investment advisor, who with his wife Maria has just bought a house in Stockholm for around 12 million Swedish crowns ($1.62 million). “It might stop going up for a while, but over the longer term we expect it to go up,” he added, suggesting the lack of housing and population growth in Stockholm would support prices. Attempts by regulators so far to slow credit growth – squeezing banks by making them put aside more capital and draw up voluntary mortgage pay-down plans – have not worked because interest rates have continued to fall. Last week the central bank cut rates to zero in an attempt to answer criticism that it is not doing enough to tackle another economic risk – deflation – even while it acknowledged the problem that would create in containing household debt. “There is a fairly large consensus that household debt is a concern,” Swedish central bank chairman Stefan Ingves said after the cut. “If households continue to borrow, we could end up with very big problems later on, and this is what we want to avoid.”
They all do it. We have no morals left.
• UK Condemned Over Arms Sales To Repressive States (Observer)
The government has been accused of dishonesty over arms sales as new figures reveal that the value of British weapons sales to “countries of concern” has already hit £60m this year. Former Tory defence minister Sir John Stanley, who chairs the Commons committees on arms export controls, says ministers failed to come clean on a “significant change in policy” that makes it easier to export arms to countries with a poor human rights record. He said in a recent parliamentary debate that the government has not acknowledged that such a change has taken place, and it “should consider most carefully whether they should now offer an apology to the committees”.
The government used to reject arms export licences where there was concern they might be used for “internal repression”, but now a licence will be refused only if there is a “clear risk” that military equipment might be used in violation of international law. Former Foreign Office minister Peter Hain, who established the strict criteria on arms sales, last night demanded that the government be transparent about the change and called for parliament to be allowed a vote. He said: “The present government has run a coach and horses through our arms export controls, circumventing the legislation we put in place by putting a particular spin on it. It has enabled them to sell arms to countries and for purposes that should not be allowed under the legislation.
“There is a clear policy in the legislation that arms should only be sold to countries for defensive purposes and not for internal suppression or external aggression. In the case of Gaza over the summer, that has clearly been flouted. Bahrain is another example.” Data from the Department for Business, Innovation and Skills reveals that in the first six months of 2014 the UK granted licences worth £63.2m of arms sales to 18 of the 28 states on its official blacklist, countries about which the Foreign Office has the “most serious wide-ranging human rights concerns”. Israel, Saudi Arabia, the Central African Republic, Sri Lanka and Russia were among the countries that Britain approved military equipment for.
How much corruption can one government shake off?
• It’s Official: Spain is Unraveling (Don Quijones)
Since taking office in late 2011, Rajoy’s government has been embroiled in one sordid political scandal after another. In the latest episode, the Punica Affair, more than 100 politicians have been arrested and charged with varying acts of white collar crime, including taking kick backs from private sector companies. Payment often came in the form of cash-stuffed envelopes although, as El Confidencial reports, it could also include completely free-of-charge construction work on a politicians’ property, luxury holidays, hunting trips and even an intimate evening or two with a high-class prostitute. Most of the politicians involved in the scandal are – or at least were – members of the governing Popular Party. The rest belong – or at least belonged – to the other partner in Spain’s (until now) two-party system, the not-really-socialist-at-all party, the PSOE.
The good news is that some of Spain’s corrupt politicians and business figures are finally seeing the sharp (or at least not entirely blunt) end of the law. Scores have been arrested and some are even going down. The bad news is that Rajoy’s scandal-tarnished government of self.serving mediocrities still stands, albeit more precariously than ever. In El Pais‘ latest poll of voters’ intentions in next year’s general election, the Popular Party (PP) was, for the first time in decades, relegated to third place. Indeed, the two incumbent parties – the PP and PSOE – were unable to muster 50% of the vote between them. The most popular party in the poll was Podemos, a stridently left-wing political movement founded just at the beginning of this year. In May’s European elections the party picked up five seats; now, six months later, it is apparently the hottest contender for the spoils in next year’s general election, picking up 27% of the votes polled – 6%% more than PP and one more than PSOE.
Lead by Pablo Iglesias, a firebrand (or as the right-wing media like to call him “demagogic”) 35-year-old professor of political science, Podemos has masterfully exploited the general public’s disaffection with a political establishment that serves no one’s interests but its own – and, of course, those of the country’s biggest businesses and banks. The political establishment is quite rightly blamed for stoking and feeding the country’s biggest ever real estate bubble. Thanks to a change in the property laws enacted in 1997 by the Aznar government, local and regional administrations were encouraged to part-finance themselves through granting authorization for ever larger public and private construction projects, many of which turned out to be white elephants (empty toll roads, high-speed train stations planted slap bang in the middle of nowhere, ghost airports…).
That same corrupt government demands the moral high road when it comes to Catalunya.
• Catalans Prepare to Open the Polls in Defiance of Spain (Bloomberg)
In more than 900 towns across Catalonia, an army of volunteers is preparing to open polling stations today and offer compatriots a vote on independence in defiance of Spain’s central government and its highest court. The informal ballot, stripped of legal validity by a Constitutional Court ruling in September, poses two questions: Do you want Catalonia to be a state? And should that state be independent? Separatists led by regional president Artur Mas aim to win a majority in favor of breaking up Spain and use that mandate to force Prime Minister Mariano Rajoy to negotiate. The runup to the vote has been marked by legal salvos: Rajoy’s government reminded public officials in Catalonia of their obligation to respect the Constitutional Court ban as Mas had an appeal to that ruling thrown out by the Supreme Court.
The Catalan government talked of filing a lawsuit against Spain in an international court while an activist group in Madrid responded with its own suit to state prosecutors demanding police halt the balloting. “The Spanish government is being really short-sighted,” said Alex Quiroga, a lecturer in Spanish history at Newcastle University in England. “Continually saying ‘no’ and appealing to the Constitutional Court doesn’t help. It’s clear that only through negotiation can they solve the problem.” Spain’s prosecutor’s office in Catalonia asked regional police to report on any public-sector premises such as schools being used for the vote and to gather information about the persons responsible for allowing their use, according to an e-mailed statement from the prosecutor. It also requested Catalonia’s Education Department to explain whether it asked principals to allow the schools to be used for the vote.
Great story. “All three keys needed to access the vault were kept in his personal safe.”
• The Albanian World Cup Gambler Who Robbed The National Vault (Reuters)
In the end, it wasn’t the security cameras or the audit inspections in the vault of Albania’s central bank that brought down Ardian Bitraj. It was the high blood pressure and lack of sleep, the burden of a multi-million-dollar secret. Sitting down with his boss this July, Bitraj confessed his deception: over a four-year period he had stolen the equivalent of $6.5 million from the vault, covering his tracks by stuffing the empty cash boxes with books and balls of string. The revelation brought down the central bank governor, led to the arrest of 18 employees and tarnished the reputation of an institution once lauded for its professionalism. And all for the sake of a gambling habit that led to massive losses, culminating in a series of fatal bets on the soccer World Cup.
The full story of the Balkan bank heist is only just emerging, gleaned by Reuters in interviews with bankers, investigators and others involved, and from legal documents including a transcript of Bitraj’s confession. It started in May 2010, when Bitraj, who had risen to become head of the cash processing department at the bank, first opened the metal and plastic clasps to the wooden boxes that hold its cash reserves in the cryptically named X Building on the outskirts of the capital Tirana. Bitraj, 45, had a penchant for placing bets on soccer matches, so roughly once a month he would wait for his co-workers to leave the room and swipe up to 2 million leks, roughly $18,000, according to the confession.
Choosing carefully how he returned the boxes, Bitraj would make sure those he had tampered with were not in line for delivery to Albania’s commercial banks, nor likely to be picked on in the regular random audit of the vault. As the thefts mounted, he would stuff the boxes with packaging, balls of string and books to replace the weight of the cash. All three keys needed to access the vault were kept in his personal safe. In statements to police, bank employees said they had not received any directive on how or where to store the keys. Bitraj says auditors checked only 2% of the cash boxes in the vault. Fired governor Ardian Fullani says it was 5%, maintaining that checks in the former communist country were comparable with other central banks in Europe.
Beware the US economy, or rather the reports and excuses that will be written on the cold.
• Prepare For An Invasion From The North: “Polar Vortex, The Sequel” (CBS)
Prepare yourself for an invasion from the north. A blast of polar air is about to send temperatures plunging in the heart of America. It’s the return of the polar vortex that brought misery a year ago. A mass of whirling cold air will dip southward this weekend, sending the mercury plunging. As the cold air moves south and east, it has the potential to affect as many as 243 million people with wind chills in the single digits in some places and snow. It’s all triggered by a Super Typhoon named Nuri. Images from the European Space Station show that Nuri is a growing meteorological bomb blanketing the Bering Sea. The 50-foot waves and 100 mile-an-hour winds will make conditions similar to those we had two years ago, and could make Nuri the biggest storm of the year.
But it would be wrong to think that it will affect only Alaska’s far-flung Aleutian Islands or those famous fishermen who work in the North Pacific. WBBM’s meteorologist Megan Glaros in Chicago explains. “The remnants of Super Typhoon Nuri will create a big buckle in the jet stream,” Glaros says. “And in several days time, it’s going to mean a big dip in the jet which will connect us with a big mass of Arctic air – taking temperatures east of the Rockies down to 10 to 30 degrees below average.” Say “a big mass of arctic air” to anyone who lives in the Midwest and it conjures painful memories of the dreaded polar vortex that hit the region last winter.
“A rapid advance of Eurasian snow cover during the month of October favors that the upcoming winter will be cold across the Northern Hemisphere …”
• Harsh Winter Outlook Made More Dire by Siberia Snow (Bloomberg)
Remember how evidence was mounting last month that early snowfall was accumulating across Siberia? And remember how there’s a theory that says this snowfall signals a cold winter? So in the two and a half weeks since, the news for the winter-haters has, unfortunately, only gotten worse. About 14.1 million square kilometers of snow blanketed Siberia at the end of October, the second most in records going back to 1967, according to Rutgers University’s Global Snow Lab. The record was in 1976, which broke a streak of mild winters in the eastern U.S. In addition, the speed at which snow has covered the region is the fastest since at least 1998. Taken together they signal greater chances for frigid air to spill out of the Arctic into more temperate regions of North America, Europe and Asia, said Judah Cohen, director of seasonal forecasting at Atmospheric and Environmental Research in Lexington, Massachusetts, who developed the theory linking Siberian snow with winter weather.
“A rapid advance of Eurasian snow cover during the month of October favors that the upcoming winter will be cold across the Northern Hemisphere,” Cohen said in an interview yesterday. “This past October the signal was quite robust.” There are a few steps to get from the snows of Siberia to the chills in New York City. Cold air builds over the expanse of snow, strengthening the pressure system known as a Siberian high. The high weakens the winds that circle the North Pole, allowing the cold air to leak into the lower latitudes. The term Polar Vortex actually refers to those winds, not the frigid weather.
The connection between our souls and our living world was lost in our heads long ago. 147 million fewer sparrows, a drop of 62% of their total population, since 1980; starling numbers have fallen by 45 million or 53%; skylarks are down by 37 million (46%).
• Bird Decline Poses Loss Not Just For Environment, But Human Soul (Guardian)
‘That’s a buzzard!” says Richard Gregory, gesturing at a tall birch tree stump 50 metres or so away, from which a flapping streak of brown and white has just disappeared. “That was a buzzard. That’s one of the ones I was telling you about. It’s back.” When Gregory was a young child, toddling around the green bits of Cheshire with a monocular, a glimpse of a buzzard made for a thrilling day out – though he was mad about birds by the age of four, he was in his teens before he ticked the large raptor off his list. Now, though, thanks to reintroduction projects and legal protections, its number and that of several other birds of prey is on the up in Britain.
We glimpse another one, as it happens, a few minutes later, and while I suppose there is just a possibility it was the same bird on a second swoop, I’m counting that as a double sighting. The recovery in recent decades of Britain’s raptor population is welcome for a number of reasons. Firstly, it means I was right after all that time I spotted a red kite while driving up the A1 and everyone else in the car said I was talking rubbish. Secondly, it’s a snatch of good news in what could otherwise seem an unrelentingly grim picture. These are bad days to be a bird. A study released this week found that the most common birds in Europe are declining at an alarming rate, and that is not an idle term.
By studying 30 years of data across 25 countries, conservationists estimated that there are now a brain-boggling 421 million fewer birds flapping across the continent’s skies than were around in 1980. House sparrows alone account for a third of that decline, with 147 million fewer birds, a drop of 62% of their total population; starling numbers have fallen by 45 million or 53%; skylarks are down by 37 million (46%). Yes, the marsh harrier has recovered a bit, and feral pigeons and ring necked parakeets are doing well in cities, but overall, concluded the report, “global biodiversity is undergoing unprecedented decline”, and some of the species taking the hardest hit are birds which were once, not so long ago, abundant in our skies.
