Wednesday, December 28, 2011
Friday, December 16, 2011
Thursday, December 15, 2011
Crude oil's slow motion
By BusinessNews Staff In the midst of the news about the EU crisis, it’s worth pointing out that oil prices have quietly crept back over $100 a barrel. West Texas Intermediate is $102 as I write. Brent crude, which many argue is the more important figure, is $111. This is remarkable given how weak the global economic recovery has been. Also of interest is the fact that the price of crude oil has been trending higher, even while the prices of most other commodities have been drifting lower. The US is the world’s largest consumer of oil. It’s not growing much. Yet there oil sits, with a three- figured handle. I think it is a sign that challenges on the energy front will prove more stubborn than in the past. One day last week, I found it interesting that the main two financial dailies I read every morning both featured special pullouts on energy. The Financial Times report had a number of good nuggets: This is the first year the average oil price is $100 a barrel. In real terms, it’s the highest oil price since 1984. US consumers are on track to spend $200 billion more on oil this year than in 2010. Exxon Mobil’s capital spending budget for the first 9 months — $26.7 billion — was a record. Supply is tight; production from non-OPEC countries (such as Russia) has been disappointing. The US is an exception. It is reversing a four- decade decline in production and imports are down to 50% of consumption, instead of 60% as recently as 2005. (Canada is increasing production, too.) Tight government budgets are leading to lower subsidies for alternative energy. The brunt of this will be felt most acutely in Europe. China is the exception; subsidies for alternative energy have actually increased there. The nuclear renaissance is still a long way off. One article discussed the various phase-outs going on around the world. There is a new enthusiasm for LNG tankers. Consider the portrait these bullets paint. To me, they speak to the challenge in producing enough energy to make a dent in prices. There are also some opportunities in these bullets — producing good old-fashioned oil still looks to be a good business. The Wall Street Journal called its report “Big Oil Heads Back Home.” Some main points: Oil is shifting its attention from the Middle East to the West — oil sands in Canada, deep-water oil in Brazil and the Gulf of Mexico and shale oil in the US. By 2020, shale oil and gas will make up a third of US production, which could shift power away from OPEC. (The Saudis are worried.) Smart grids are coming. There was an article about energy-monitoring devices and other means to increase efficiency and save money. Interesting article on Churchill County in Nevada, which is enjoying a boom in geothermal energy. Biofuel companies are getting into other markets, selling stuff for skin care and beauty products. (Biofuels, like other renewables, are in trouble.) US battery companies are having a hard time trying to survive as they get strong competition from overseas and the adoption of electric vehicles remains slow. Townsville, Australia, plans to lay a cable to take hydropower from Papua New Guinea, some 600 miles away. How China slowing its nuclear program over safety worries is creating opportunities for some firms. How “clean coal” is a boon to companies selling filters and other means to reduce emissions. This report was more focused on the ways in which people are changing their behavior, about how people are figuring out new ways to create energy and to get it where it needs to go. It’s also more about the frontiers of energy and how they will contribute meaningful slices to the pie. It also makes me think about how energy is as much about place as it is about any particular source. In Nevada, they can tap geothermal. In Australia, they are trying an innovative way to tap a river in Papua New Guinea for hydro-power. You can’t really say geothermal is a great energy source. It is in some places, yet it won’t work in others. Ditto, hydro-power. But these stories show you how innovative people can be. And they show you how things can happen that no one would’ve guessed even a handful of years ago. I mean, US oil and gas production up enough to threaten the Saudis? That would’ve been a surprising prediction not too long ago. Yet it’s happening. These stories also show how political energy is. Everywhere. Government policy has a big impact on the energy mix pursued. Big subsidies for solar, particularly in Europe, essentially built that industry to a point it would never have reached without the help. But now, with austerity measures and tight budgets, a shift in policy can destroy it. An energy investor has to keep an eye on a lot of things. Technologies change. Consumer patterns change. Government policies change. But the overall backdrop is pretty strong for the producers of energy. The most powerful evidence is the most obvious: Amidst all the turmoil and slow growth in the big markets of the US and the EU, oil is over $100 a barrel. via Chris Mayer/ dailyreckoning.com
Ikeja City Mall opens
By BusinessNews Staff Over a thousand people witnessed the grand opening of the $100 million Ikeja City Mall today, one of the biggest malls in the West African sub- region. The mall, located in Alausa, Lagos, southwest Nigeria is built by Actis, a leading private equity investor alongside its project partners, Paragon Holdings and RMB Investment and Advisory. Governor Babatunde Fashola of Lagos State declared the Mall opened. The mall is a world class retail and leisure development initiated by Actis three years ago, comprising 27,000 square metres of gross built area and 23,000 square metres of lettable area. The space accommodates nearly 100 shops, including Shoprite’s latest generation store of over 4,400 square metres, KFC, Mr. Price, Twice as Nice and Aldo. The design of the mall incorporates informal meeting places, a food hall and five screen Silverbird Cinema. Bounded by access roads on three sides, the five-hectare site is ideally positioned for convenient parking and shopping. Declaring the mall open, Fashola said the building of the mall in Ikeja represented a milestone and restored Ikeja to its rightful place as the retail hub of Lagos. “Actis has shown tremendous leadership and delivered this mall on plan, on time and on budget; following the footsteps of their other successful real estate projects in West Africa. “This development provides an inspiring vision of what can be achieved through collaboration between the development partners, regulators, government officials and tenants. “Ikeja City Mall brings world class retail and leisure facilities to Lagos. I am excited to see my fellow citizens in the mall today, relaxing and having fun,” Fashola stated. Actis Real Estate Director, Michael Ejekam said, “Actis is proud to unveil Ikeja City Mall. This is a project that demonstrates Actis’ proven track record of delivering equity real estate for Nigeria. “We believe that Actis’s real estate developments can have a profoundly positive impact in sub- Saharan Africa. Ikeja City Mall opens up space for Nigerians to work and relax and follows in the footsteps of Actis’ successful development of the Palms. We believe that Nigeria and Ghana alone have the potential for at least 20 more similar scale malls.” Head of West Africa, Actis, Ngozi Edozien said, “Ikeja City Mall seals Actis’ reputation as the West African investor of choice. Our local team in Lagos has unrivalled access to investment opportunities in real estate, financial services, industrials and consumer businesses and a network that reaches across the region.”
Wednesday, December 14, 2011
Fuel Subsidy
By ABDULWAHAB ABDULAH Mr. Muhammed Adesegun Ajibola (SAN), son of the eminent jurist and a former Justice of the world court, Justice Bola Ajibola, in this interview with Law and Human Rights, spoke on the passage of anti same sex marriage Bill by the Senate. He argued that the Senate’s decision was in line with the yearnings of majority of Nigerians. He said it was time for Africa nations to tackle what he called neo-colonialism on how western nations intervene in affairs of the Africa countries . He also urged the federal Government to put on hold the implementation of its decision on the removal of fuel subsidy pending sufficient consultations. He also spoke on the controversies trailing a uniform national minimum wage for the country, especially its legality. Excerpts: What is your overview of the recent Bill on same sex marriage passed by the Senate? It is a reflection of the cultural values of our people. It is in line with the yearnings and aspirations of the majority of Nigerians, who have spoken on the issue, who the lawmakers are representing in the Senate embolden by law to pass the Bill. They have carried out the process and concluded it. It is commendable whether anybody is happy with it or not. What is important is that, it has gone through a due process and it is concluded in accordance with our laws in this country. There are some diplomatic threats from some countries in the West, especially, USA, U.K. and Canada on the passage of the bill, stressing that it encroached on some individual rights. There are arguments here and there but at the end of the day only one argument will win the day, as long as it has gone through the process made by law. Yes, I am aware that some Western countries predominantly UK and US expressed their misgivings in the constitutional act just carried out in passing the law and there have been threats of withdrawing their supports of grants or aids. I think it is time for African countries to wake up and fight the scourge of neo- colonialism with Western powers wanting to impose their laws on us. It looks like an effort to control virtually every aspects of our lives where possible because they give us aids and grants. It is because of our inability to effectively explore and exploit our resources and the mismanagement of the resources we have that has kept us as beggar nation in this continent. I think it is a wake up call for us all to stand up for what we believe in, to fight for it at any cost. Otherwise, we will remain in perpetual economic slavery and political dominance. Look at UK for instance, it’s a member of EU, but it recently opposed all the positions and all the directions in respect of the Euro. They said they were doing so for national interest. Interest is the common language to the Western world when they want to do what suits them. They do not seem to consider that same expression dwells with African nations when they feel they want to do what is right for them. I think it is unfair and I think it is inequitable circumstance that they are trying to foster. What is good for the goose is good for the gander. As a sovereign nation, it is our national interest to pass a bill which outlaws same sex marriages, it is a bastardization of the process and the challenge to the sovereignty of this country, for us to be threatened by aids and grants as means of pushing their own will on us as a people. To some, the issue concern is religious, to some it is spiritual, to some it is moral, while it is cultural to others. So, it transcends what we want to put in our mouth on daily basis. So, we find some diverse minds that have come together to achieve common purpose. There is no divergence over the issue. The two main religious groups in the country spoke in one voice over the passing of the Bill. So, it is absurd and almost upsetting to hear western world threatening Nigeria for taken a decision that suit them. So, they can passed the law in their own country, but they should leave us alone to do what suit us as a country
Singaporian Coy invests In Nigeria
By Olasunkanmi Akoni As part of bilateral relationship to boost agriculture, a Singaporean company has recently signed an agreement on rice production and processing in Nassarawa State with an investment worth about $50 million. This came as Governor Babatunde Fashola of Lagos State advocated a further nurturing of the business relationship between Nigeria and Singapore through visits by Singaporean entrepreneurs to Lagos and Nigeria. The Singaporean High Commissioner to Nigeria, Mr. Shabbir Hassanbhai disclosed this during a courtesy call to the governor at the Lagos House, Ikeja. Hassanbhai, who said he was in Lagos to acquaint himself with the Governor and people of Lagos State as well as see how he could strengthen the already existing relationship between Lagos and his country, noted that in the last three years, the Government of Singapore has been very focused in wanting to create a larger economic footprint in Africa adding that the political relations Singapore has enjoyed particularly with Nigeria has been a great fortune for his country in building this economic footprint in Africa. Recalling that Singapore has many on-going economic activities in Nigeria at the moment, the High Commissioner cited as the most important, the inauguration of the first cargo flight of the Singaporean Airline to Nigeria on December 5, 2011. Areas Singapore is seeking further investment opportunities and partnership with Nigeria and Lagos, according to the High Commissioner, include Technical Education and Skill Acquisition for youth empowerment.
Recycling plant in Otta Ogun state
Shongai Packaging Industry Limited has commissioned a state-of-the-art plastics re- cycling plant in Otta, Ogun State as part of its eco-friendly manufacturing process. The Shongai plant is capable of treating and converting 24 tonnes of waste plastics to re- usable materials per day. Speaking on his company’s eco-friendly manufacturing programme, Mr. Geoffrey Anyaso, Executive Director, Operations, Shongai Packaging Industry, said, “We are leveraging on our expertise to support the global effort to protect the environment. “Plastic wastes constitute a very high percentage of both domestic and industrial wastes in Nigeria. We believe that these waste products can be converted to re- usable material which would help in reducing the quantity that is dumped at various landfills and ultimately ensuring a better environment.” Mr. Anyaso disclosed that the recycled plastics materials are treated, ground, and polished before being used to make plastics pallets that can be used in stacking up crates and cartons by manufacturers across various sectors. He said that the plastic pallets which come in three sizesare a direct replacement for wooden pallets that is still very commonly used in Nigeria. “Its advantages are it preserves forests, reduces manufacturers’ long term cost while also improving hygienic conditions within breweries and food industries.” Shongai Packaging Industry Limited started operations in Nigeria in 1981 as a plastic crates manufacturer. The company has four manufacturing divisions, the injection moulding division, the blow moulding division, the Label Printing Division and the Crate/ Container Printing Division.
Aviation fraud
By JIMOH BABATUNDE IKEJA—The Aviation Ministry has confirmed receiving the report of the alleged N13 billion fraud on the Total Radar Coverage of Nigeria Project of the Nigerian Airspace Management Agency, NAMA. This is coming on the heels of denial by the agency that the alleged N13bn fraud discovered in the TRACON project was a scam. Vanguard learnt, yesterday, that the ministry had received the alleged N13bn fraud on the TRACON project and was still studying the documents. The minister’s Special Assistant, Media, Mr. Joe Obi, told Vanguard that the report had been submitted to the ministry, but denied the summoning of NAMA Managing Director, Mr. Nnamdi Udoh, to Abuja by the ministry. Obi, however, declined to comment on steps the ministry would take if Udoh was found wanting on the contract award. He said: “We can’t pre-empt the action of the ministry until after our own investigation.” Meanwhile, the General Manager, Public Affairs, NAMA, Mr. Supo Atobatele, insisted that the report was a technical one, adding that the managing director was not summoned to Abuja. He said: “It’ s a technical report on TRACON project and it’s a technical issue. I can tell you that there is no fraud in it. The amount mentioned is almost the entire amount dedicated for the project and if there was such fraud, it means the project was never executed. “Nobody summoned our MD to Abuja on the report. He only went to Abuja for an official assignment and he’s due back today (yesterday) .” A newspaper had reported on Monday that vital components of the €66,500 ,870 (N13.99 bn) TRACON, were not supplied at the time of installation of the equipment and that many other components installed had never worked since the project started in 2003. The report also purported that N4bn worth of the components for the project were not supplied, and that those installed never worked, thus flouting the terms of the contract and technical support services agreement (TSSA) . The primary objective of TRACON is to improve surveillance of aircraft in Nigeria’s airspace, and by so doing, improve safety and security of air transport. The project consists of the provision of the state-of-the-art surveillance systems, including Monopulse Secondary Surveillance Radar (MSSR) , RSM970, Integrated Flight and Radar Data Process System, Eurocat 2000-C and other associated equipment for four major airports – Lagos, Abuja, Kano and Port Harcourt, as well as stand alone MSSR RSM 970 in five other locations: Talata-Mafara, Maiduguri, Numan, Obubra and Ilorin. The contract for TRACON was awarded by the Federal Government to Thales S.A of France, in 2003, with a completion period of 36 months, but due to inconsistent government policies, the project was dragged till October 2010. The project was commissioned October 18, 2010, by President Gooodluck Jonathan in Abuja when it was still under installation.
Supreme Court and Jonathan
CPC VS Jonathan - Supreme Court Fixes Dec 28 for Ruling Middle East North Africa Financial Network - 9 hours ago Dec 14, 2011 (Daily Trust/All Africa Global Media via COMTEX) -- The Supreme Court yesterday fixed December 28 for judgment in an appeal filed by the Congress for Progressive Change (CPC) challenging the election of President Goodluck Jonathan
Same sex Marriage Issue with Nigeria and World body.
EU Envoy says Same-sex Marriage Bill contravenes international conventions NEXT - 8 hours ago The Head of the EU Delegation to Nigeria, Amb. David MacRae, on Tuesday, said some of the clauses in the Same Sex Marriage Prohibition Bill contravened certain international conventions to which Nigeria is a signatory.
Akala in trouble
New judge to try Akala's corruption case Vanguard - 11 hours ago IBADAN - THE corruption charges levelled against the former Governor Adebayo Alao-Akala of Oyo State, and two of his aides by the Economic and Financial Crimes Commission, has been transferred to another judge for a fresh trial
Germany Leading Europe
Chancellor Angela Merkel tells German MPs the UK will remain a strong EU partner, despite its decision not to sign up to an EU summit deal. Merkel says UK a key part of EU Merkel: UK role secure PM 'must get better deal for UK' Europe anger over UK veto Euro hits new 11-month dollar low
visit www.bbc.co.uk
visit www.bbc.co.uk
Live in Iraq
Obama to draw line under Iraq war NEW US President Barack Obama is about to mark the end of the Iraq war with a speech honouring soldiers at Fort Bragg in North Carolina. Obama speech on Iraq
visit www.bbc.co.uk for more
visit www.bbc.co.uk for more
Syria
Apparently, there is a large group of defectors from the Syrian army, which are now leading the fight against the Assad Regime. So far, they have attacked a Syrian military base which had aerial intelligence facilities. In many regards this is good, because it means the Assad regime cannot use that information and intelligence to attack their own people and civilians.
As you probably know, the United Nations has already as of November 2011 counted the civilian death toll at 4000, meanwhile the Syrian government says they have lost 1100 security force members, which of course is unconfirmed. So the question might be; is this Syrian opposition hurting or helping the situation? Perhaps, it depends on which side of the fence you are on.
There was an interesting article in the Wall Street Journal on December 2, 2011 titled "Syria Would Cut Iran Military Tie, Opposition Head Says," by Jay Solomon and Nour Malas, which stated that the group would end arms supplied to militant groups such as Hamas and Hezbollah. Well, those sure sound like "magic words" to me, but are they legitimate, and if they are how can we know that?
Then again if the Assad Regime is to fall anyway due to UN, Arab League, and Turkey economic sanctions, then it would make sense to assist the opposition in Syria through the back door, with perhaps night time drone or stealth strikes to assist the opposition; perhaps soon or even right now. Yes, lots of "Ifs" there, but "IF" they'd make good on such a promise, then isn't that in the United States' best interest, and doesn't that alleviate a whole lot of problems moving forward "IF" there was a true meeting of the minds and that agreement would be honored in the future?
Still, I would submit to you that it is not necessarily a good deal for the Syrian government to fall, as it will put in jeopardy Israel, the Arab League, and even the United States and our interests in the region. If Syria falls it might be taken over by groups of extreme religious viewpoints and that can't be good for anyone in the region.
Worse, Syria has all sorts of weapon caches owned by the military, and there are something like 10 international terrorist groups which are headquartered or call Syria their home. It could be a literal nightmare and a slaughter for the citizens of Syria if things don't go right. This is very serious business, and things are changing very rapidly. Oh, by the way, Merry Christmas?
As you probably know, the United Nations has already as of November 2011 counted the civilian death toll at 4000, meanwhile the Syrian government says they have lost 1100 security force members, which of course is unconfirmed. So the question might be; is this Syrian opposition hurting or helping the situation? Perhaps, it depends on which side of the fence you are on.
There was an interesting article in the Wall Street Journal on December 2, 2011 titled "Syria Would Cut Iran Military Tie, Opposition Head Says," by Jay Solomon and Nour Malas, which stated that the group would end arms supplied to militant groups such as Hamas and Hezbollah. Well, those sure sound like "magic words" to me, but are they legitimate, and if they are how can we know that?
Then again if the Assad Regime is to fall anyway due to UN, Arab League, and Turkey economic sanctions, then it would make sense to assist the opposition in Syria through the back door, with perhaps night time drone or stealth strikes to assist the opposition; perhaps soon or even right now. Yes, lots of "Ifs" there, but "IF" they'd make good on such a promise, then isn't that in the United States' best interest, and doesn't that alleviate a whole lot of problems moving forward "IF" there was a true meeting of the minds and that agreement would be honored in the future?
Still, I would submit to you that it is not necessarily a good deal for the Syrian government to fall, as it will put in jeopardy Israel, the Arab League, and even the United States and our interests in the region. If Syria falls it might be taken over by groups of extreme religious viewpoints and that can't be good for anyone in the region.
Worse, Syria has all sorts of weapon caches owned by the military, and there are something like 10 international terrorist groups which are headquartered or call Syria their home. It could be a literal nightmare and a slaughter for the citizens of Syria if things don't go right. This is very serious business, and things are changing very rapidly. Oh, by the way, Merry Christmas?
What is Europe Turning into
Europe's debt crisis is the official topic of the latest continental summit meeting, scheduled to conclude today in Brussels. But the real issue Europeans are discussing is a deeper question: What, exactly, is Europe?
Is it still what American children were taught in grade school - a continent consisting of about 50 independent states, which range from tiny places like Vatican City and San Marino to global powers like the United Kingdom, Germany and Russia?
Is it a cultural ideal of multi-party democracy, collective decision-making, and private enterprise that supports expansive government employment and social programs?
Is it a federation of 27 European Union member states whose ultimate goal is to collectively attain the scale and global influence that larger nations like China and the United States can achieve alone?
Is it a core of 17 nations using the euro currency, who must now either establish a more powerful centralized government at the cost of their own sovereignty, as the American states did in 1789, or find themselves inevitably pulled apart by their differing circumstances and divergent cultures?
It took Americans more than 75 years and a bloody civil war to determine that we are "one nation, indivisible." Although the EU and its predecessor, the European Economic Community, have been around since 1958, the continent is only being forced to address these fundamental questions now, as the 13-year-old euro currency teeters, along with the solvency of at least a half-dozen countries that use it.
The world is understandably impatient for Europe's leaders to resolve the crisis that has festered for two years, but if you consider that the very futures of centuries-old nation-states are at stake, change is actually happening at breakneck speed. It is difficult to see exactly how the landscape is changing around you when you are in the middle of a landslide. But you know that it certainly is changing.
The quick fix, which is what a lot of people seem to want, would be for the European Central Bank to pledge to print and lend as much money as necessary to keep major debtors like Italy and Spain from running out of cash. This would reduce the risk of those countries defaulting on their euro-denominated debt to virtually zero, since the ECB would simply supply enough euros to let those countries make their payments.
This is basically the system we enjoy in the United States. Although the Federal Reserve has long insisted that it will not "monetize the debt" of the U.S. Treasury, that is exactly what the Fed would do if there were a chance that the Treasury could not otherwise repay its outstanding obligations. The Fed, after all, has a mandate to provide full employment as well as a sound currency, and a federal debt default would send the global economy into a nosedive.
Yet even though a technical default by our Treasury is all-but-impossible if the Fed obliges, Standard & Poor's downgraded our national credit rating this summer, and other agencies may follow. Why? Because avoiding technical default hardly matters to lenders if you repay them with currency that you have debased beyond recognition.
Not coincidentally, S&P warned this week that it might downgrade the credit ratings of virtually the entire eurozone, including financial powerhouse Germany, as well as the ratings of the continent's financial emergency fund, which is backed by euro governments.
German Chancellor Angela Merkel has been the strongest bulwark, albeit not the only one, against the easy-money approach to solve Europe's debt problem. She and French President Nicolas Sarkozy have pushed at the summit for a so-called fiscal union that would require all countries using the euro to enact balanced-budget laws, have their national budgets reviewed by European monetary authorities, and face mandatory penalties for violating spending rules. In this plan, the price for keeping the euro would be the sacrifice of national sovereignty in favor of a union in which everyone is treated equally; some nations, especially Germany and other financial powerhouses in northern Europe that set the rules, would be a little more equal than others.
Merkel knows something about long-term financial repair projects. Raised in East Germany, she witnessed the enormous costs that the much more prosperous West Germans incurred to bring her former region up to speed after reunification in 1989. The Ossies, as former Easterners were known, suffered years of austerity in the form of high unemployment and lower wages as they tried to catch up to their more productive countrymen. That process probably has still not run its full course, though the differences between eastern and western Germany are nowhere near what they were.
So Merkel is not inclined to be too sympathetic to Greeks, Portuguese, Italians or others who want to use German money to sustain lifestyles beyond their own economic means. She is trying to set people in Athens on the same course that people in Dresden recently followed. Of course, Greeks are not Germans, and whether the rest of Europe is prepared to follow Merkel's path remains to be seen.
I think Merkel generally has the right idea. This does not mean she has been perfect in implementing it. Notably, she did a lot of damage this summer by insisting that private bondholders, mainly European banks, take a large "haircut" on Greek debt in order to get the country's burden down to manageable levels. This not only sent the value of Greek bonds plunging, but it infected the credits of every other struggling euro nation, particularly Italy, which almost instantly found itself in crisis. Usefully, for Merkel at least, this disposed of Silvio Berlusconi's unhelpful government in Rome, but it also helped send the continent's economies into a likely recession as banks dumped bonds and cut back on lending.
Interestingly, some have painted Britain as a loser in the current situation in some corners. As an EU member that does not use the euro, the United Kingdom is being "marginalized," this reasoning goes, by the German and French leadership amid the crisis. This sounds to me like being marginalized by the local fire department when your neighbor's house is burning down.
But the British too will have to find a place for themselves in the evolving Europe. For that matter, so will prosperous but non-EU Switzerland, economically rising Poland, struggling Hungary, and the once-and-future Russia of Vladimir Putin, which is not going to be on anyone's candidate list for EU membership any time soon, but which remains a major trading partner and geopolitical rival.
As financial crises go, this one is taking forever to resolve. But we are watching, if not the birth of a nation (to borrow the title of D.W. Griffith's dreadfully racist yet classic silent film), then the birth of something equally big. On that scale, this process is moving right along.
Article Source: http://EzineArticles.com/6746657
Is it still what American children were taught in grade school - a continent consisting of about 50 independent states, which range from tiny places like Vatican City and San Marino to global powers like the United Kingdom, Germany and Russia?
Is it a cultural ideal of multi-party democracy, collective decision-making, and private enterprise that supports expansive government employment and social programs?
Is it a federation of 27 European Union member states whose ultimate goal is to collectively attain the scale and global influence that larger nations like China and the United States can achieve alone?
Is it a core of 17 nations using the euro currency, who must now either establish a more powerful centralized government at the cost of their own sovereignty, as the American states did in 1789, or find themselves inevitably pulled apart by their differing circumstances and divergent cultures?
It took Americans more than 75 years and a bloody civil war to determine that we are "one nation, indivisible." Although the EU and its predecessor, the European Economic Community, have been around since 1958, the continent is only being forced to address these fundamental questions now, as the 13-year-old euro currency teeters, along with the solvency of at least a half-dozen countries that use it.
The world is understandably impatient for Europe's leaders to resolve the crisis that has festered for two years, but if you consider that the very futures of centuries-old nation-states are at stake, change is actually happening at breakneck speed. It is difficult to see exactly how the landscape is changing around you when you are in the middle of a landslide. But you know that it certainly is changing.
The quick fix, which is what a lot of people seem to want, would be for the European Central Bank to pledge to print and lend as much money as necessary to keep major debtors like Italy and Spain from running out of cash. This would reduce the risk of those countries defaulting on their euro-denominated debt to virtually zero, since the ECB would simply supply enough euros to let those countries make their payments.
This is basically the system we enjoy in the United States. Although the Federal Reserve has long insisted that it will not "monetize the debt" of the U.S. Treasury, that is exactly what the Fed would do if there were a chance that the Treasury could not otherwise repay its outstanding obligations. The Fed, after all, has a mandate to provide full employment as well as a sound currency, and a federal debt default would send the global economy into a nosedive.
Yet even though a technical default by our Treasury is all-but-impossible if the Fed obliges, Standard & Poor's downgraded our national credit rating this summer, and other agencies may follow. Why? Because avoiding technical default hardly matters to lenders if you repay them with currency that you have debased beyond recognition.
Not coincidentally, S&P warned this week that it might downgrade the credit ratings of virtually the entire eurozone, including financial powerhouse Germany, as well as the ratings of the continent's financial emergency fund, which is backed by euro governments.
German Chancellor Angela Merkel has been the strongest bulwark, albeit not the only one, against the easy-money approach to solve Europe's debt problem. She and French President Nicolas Sarkozy have pushed at the summit for a so-called fiscal union that would require all countries using the euro to enact balanced-budget laws, have their national budgets reviewed by European monetary authorities, and face mandatory penalties for violating spending rules. In this plan, the price for keeping the euro would be the sacrifice of national sovereignty in favor of a union in which everyone is treated equally; some nations, especially Germany and other financial powerhouses in northern Europe that set the rules, would be a little more equal than others.
Merkel knows something about long-term financial repair projects. Raised in East Germany, she witnessed the enormous costs that the much more prosperous West Germans incurred to bring her former region up to speed after reunification in 1989. The Ossies, as former Easterners were known, suffered years of austerity in the form of high unemployment and lower wages as they tried to catch up to their more productive countrymen. That process probably has still not run its full course, though the differences between eastern and western Germany are nowhere near what they were.
So Merkel is not inclined to be too sympathetic to Greeks, Portuguese, Italians or others who want to use German money to sustain lifestyles beyond their own economic means. She is trying to set people in Athens on the same course that people in Dresden recently followed. Of course, Greeks are not Germans, and whether the rest of Europe is prepared to follow Merkel's path remains to be seen.
I think Merkel generally has the right idea. This does not mean she has been perfect in implementing it. Notably, she did a lot of damage this summer by insisting that private bondholders, mainly European banks, take a large "haircut" on Greek debt in order to get the country's burden down to manageable levels. This not only sent the value of Greek bonds plunging, but it infected the credits of every other struggling euro nation, particularly Italy, which almost instantly found itself in crisis. Usefully, for Merkel at least, this disposed of Silvio Berlusconi's unhelpful government in Rome, but it also helped send the continent's economies into a likely recession as banks dumped bonds and cut back on lending.
Interestingly, some have painted Britain as a loser in the current situation in some corners. As an EU member that does not use the euro, the United Kingdom is being "marginalized," this reasoning goes, by the German and French leadership amid the crisis. This sounds to me like being marginalized by the local fire department when your neighbor's house is burning down.
But the British too will have to find a place for themselves in the evolving Europe. For that matter, so will prosperous but non-EU Switzerland, economically rising Poland, struggling Hungary, and the once-and-future Russia of Vladimir Putin, which is not going to be on anyone's candidate list for EU membership any time soon, but which remains a major trading partner and geopolitical rival.
As financial crises go, this one is taking forever to resolve. But we are watching, if not the birth of a nation (to borrow the title of D.W. Griffith's dreadfully racist yet classic silent film), then the birth of something equally big. On that scale, this process is moving right along.
Article Source: http://EzineArticles.com/6746657
Russia
Putin Is the New Premier - But Some Say, Not So Fast
by Lance Winslow
It seems regardless of the country - anytime there are elections the opposing party claims voter fraud, or voting irregularities these days. It's happened on nearly every continent in the last year or so. Thus, it should not surprise us that folks are claiming that Putin's Party in Russia played with the election results.
by Lance Winslow
It seems regardless of the country - anytime there are elections the opposing party claims voter fraud, or voting irregularities these days. It's happened on nearly every continent in the last year or so. Thus, it should not surprise us that folks are claiming that Putin's Party in Russia played with the election results.
Instant News Around The World: Euro Talks
Instant News Around The World: Euro Talks: It seems like nothing matters away from Europe as investors are fixated on the Eurozone debt problems like they are a celebrity sex scandal....
Euro Talks
It seems like nothing matters away from Europe as investors are fixated on the Eurozone debt problems like they are a celebrity sex scandal.
Even though the US market has had a pretty good rally, it is nowhere near what it should have been given the steady better than expected US economic news. However, if Germany gets its way and splits the EU in two, essentially getting rid of the Euro-Trash, stocks would likely soar. That is a long shot however as the easiest course of action is for them to finally allow the ECB (European Central Bank - their version of the Federal Reserve) to print money like our Fed does and backstop the death spiral many of the over-indebted European nations are in.
Even if the ECB is allowed to print money, the respite will only be short term as the answer to the developed world's debt problems is not more debt. For years, the demographics of the developed world (US included) have been pointing to a slowdown in spending and therefore growth. Basically, the world had a baby boom at the same time. We know that people spend the most in their 30's and 40's, with the peak in spending occurring at about age 48. After that people just save more and spend less.
Therefore all these baby-boomers have been steadily passing their peak spending years for over a decade now. To make up for this loss of demand, we came up with all kinds of fancy tricks to allow people to borrow more. (My favorite was the nothing down 110% home loan). This simply created a second problem on top of the inevitable natural demographic slowdown due to occur anyway: a massively over-leveraged/over-indebted world which borrowed more than it could ever pay back.
Considering that the demographics of the world's population will only get worse over the next decade, before it gets better with the echo-boomers who won't approach their major spending years for about 5-7 years, the addition of more debt only adds fuel to the fire or should I say like more uranium to the atom bomb.
Investors must realize that we are in the middle of a cyclical bear market and big rallies are very common within this trend. Since 1940, there have been forty seven-day huge rallies of 4% or more. Of these, seven occurred immediately after major market bottoms -- May 1970, Aug. 1982, Twice in Oct. 1987, Jan. 1991 and Twice in Mar. 2009. Two others occurred immediately after big one-day declines, in November 1963 and October 1997. The remaining 37, 4% one-day gains all occurred in bear markets with just one exception.
I share these figures not to scare you but to simply keep you aware of the reality of the situation and invest accordingly. You can't sit in cash and earn nothing on your money. There are plenty of places to make money in this market if you know where to look. While some nimble traders might attempt to time the short-term swings in the market, investors should remain alert to the primary trend and focus on investments that get the best returns with the least risk possible.
Article Source: http://EzineArticles.com/6746818
Even though the US market has had a pretty good rally, it is nowhere near what it should have been given the steady better than expected US economic news. However, if Germany gets its way and splits the EU in two, essentially getting rid of the Euro-Trash, stocks would likely soar. That is a long shot however as the easiest course of action is for them to finally allow the ECB (European Central Bank - their version of the Federal Reserve) to print money like our Fed does and backstop the death spiral many of the over-indebted European nations are in.
Even if the ECB is allowed to print money, the respite will only be short term as the answer to the developed world's debt problems is not more debt. For years, the demographics of the developed world (US included) have been pointing to a slowdown in spending and therefore growth. Basically, the world had a baby boom at the same time. We know that people spend the most in their 30's and 40's, with the peak in spending occurring at about age 48. After that people just save more and spend less.
Therefore all these baby-boomers have been steadily passing their peak spending years for over a decade now. To make up for this loss of demand, we came up with all kinds of fancy tricks to allow people to borrow more. (My favorite was the nothing down 110% home loan). This simply created a second problem on top of the inevitable natural demographic slowdown due to occur anyway: a massively over-leveraged/over-indebted world which borrowed more than it could ever pay back.
Considering that the demographics of the world's population will only get worse over the next decade, before it gets better with the echo-boomers who won't approach their major spending years for about 5-7 years, the addition of more debt only adds fuel to the fire or should I say like more uranium to the atom bomb.
Investors must realize that we are in the middle of a cyclical bear market and big rallies are very common within this trend. Since 1940, there have been forty seven-day huge rallies of 4% or more. Of these, seven occurred immediately after major market bottoms -- May 1970, Aug. 1982, Twice in Oct. 1987, Jan. 1991 and Twice in Mar. 2009. Two others occurred immediately after big one-day declines, in November 1963 and October 1997. The remaining 37, 4% one-day gains all occurred in bear markets with just one exception.
I share these figures not to scare you but to simply keep you aware of the reality of the situation and invest accordingly. You can't sit in cash and earn nothing on your money. There are plenty of places to make money in this market if you know where to look. While some nimble traders might attempt to time the short-term swings in the market, investors should remain alert to the primary trend and focus on investments that get the best returns with the least risk possible.
Article Source: http://EzineArticles.com/6746818
Europe Crisis
The Euro: Who wants what
The groups Who they are What they want What they don't want
The Drivers
France and Germany
Chancellor Angela Merkel and President Nicolas Sarkozy joined forces to call for treaty changes to be signed by all 17 eurozone (at least) by March. They want a balanced budget "golden rule" adopted by all; automatic sanctions if deficits exceed 3% gross domestic product; harmonisation of eurozone corporation taxes and a tax on financial transactions.
France averse to Brussels having greater power over national budgets - ruling out any veto by European Court of Justice. Germany against European Central Bank intervention to buy up errant countries' debts in the form of bonds. Mr Sarkozy, initially in favour, decided against eurozone bonds.
The Piigs - the eurozone's most indebted nations
Portugal, Italy, Ireland Spain and Greece
Desperate for deal to convince markets to cut national borrowing costs. The EU/IMF bailouts of Greece, Ireland and Portugal were all conditional on stringent austerity measures. Dublin, Athens and Lisbon have all responded to pressure to slash their deficits with recent austerity budgets. Italy's new technocratic government has too while Spain's new centre-right leaders are urged to follow suit.
All five against surrendering budget decisions to Brussels and adamant about staying in the euro. Ireland will not allow any change to its 12.5% corporation tax rate which it sees as its main source of growth; fears loss of sovereignty. Spain backs treaty reform but Irish government opposed.
Out of the zone - for now
Poland, Sweden, Latvia, Lithuania, Czech Republic, Hungary Romania, Bulgaria
All eight want to avoid a two-tier EU as they are obliged to join the euro, eventually. Poland wants say in eurozone decisions. Latvia, recipient of 2008 EU/IMF bailout, expects other countries to endure similar fiscal discipline. Lithuania avoided bailout but shares Latvia's position. Czechs are in no rush to join. Hungary, latest victim of the debt crisis, has sought IMF/EU funding. Romania wants to stay on course to join in 2015; says huge efforts made to meet deficit targets after 2009 EU/IMF bailout. Romania and Bulgaria anxious to join passport-free Schengen zone soon.
Although not part of the eurozone, Bulgaria will be deeply opposed to the threat to its 10% corporate tax - the EU's lowest - from the Franco-German proposals. Sofia was eyeing up 2015 as entry date. Most Swedes do not want to join the euro (voted against it in 2003) but have no opt-out. All but Sweden and the Czechs have agreed to limits on the scale of their debts. Latvia and Lithuania aim to join in 2014 and Warsaw sees euro entry as a "strategic objective". Czechs wary of Franco-German plan for centralised budget control.
Staying out - for good
UK and Denmark
UK and Denmark secured euro opt-outs but want a say in decisions about it. UK says the more it is asked for, the more it will ask in return - and any treaty agreed by the UK would have to go through parliament. Denmark wants speedy resolution to crisis with minimum treaty change.
UK PM David Cameron, under political pressure for a referendum on the EU and for repatriation of powers from Brussels, wants to avoid major treaty change and a tax on financial transactions that would affect the City of London. Denmark, taking over rotating EU presidency on 1 Jan 2012, wants to avoid change that would trigger referendum.
The other triple-A euro states
Austria, Netherlands, Finland, Luxembourg
All four alarmed by warnings of possible credit-rating downgrade that would affect cost of borrowing. Austria wants decisions with quick impact involving all 27 EU members voluntarily signing up to agreed debt and deficit limits. The Dutch and Finnish want tighter controls on rule-breaking states. The Netherlands argued for a Brussels commissioner to have power to expel member states from the eurozone.
Austria reluctant to have treaty change, complains fiscal union a "long-term process" of 3-4 years. Luxembourg also very wary. Dutch adamant they want no referendum and no loss of sovereignty to Brussels. Helsinki opposed to Franco-German plan to stop smaller EU countries (eg Finland) blocking permanent eurozone bailout fund decisions.
Smaller eurozone economies
Belgium, Estonia, Cyprus, Malta, Slovakia, Slovenia
Belgium's new government, faced with high public sector debt, needs low borrowing costs. Estonia, in the euro since Jan 2011, wants to be among the decision-makers. Cyprus, buckling under the EU's biggest public sector spending bill (15.4% of GDP) promises austerity measures but needs help to tackle spiralling deficit. Malta, with 2% growth, backs strong action for rule-breakers. Slovakia wants strong, automatic, enforceable rules to ensure fiscal discipline. Slovenian aims are unclear as the country has just chosen a new government.
Belgium against major treaty change - approval required by 9 parliamentary chambers. Estonia, against new EU institutions to tackle crisis, prefers to focus on Commission and ECB. Cyprus anxious to avoid "endless discussions" on automatic sanctions. Slovakia ready to see other states leave euro to protect eurozone. Malta against long treaty change process but will accept the Merkel/Sarkozy plan if no alternative.
The groups Who they are What they want What they don't want
The Drivers
France and Germany
Chancellor Angela Merkel and President Nicolas Sarkozy joined forces to call for treaty changes to be signed by all 17 eurozone (at least) by March. They want a balanced budget "golden rule" adopted by all; automatic sanctions if deficits exceed 3% gross domestic product; harmonisation of eurozone corporation taxes and a tax on financial transactions.
France averse to Brussels having greater power over national budgets - ruling out any veto by European Court of Justice. Germany against European Central Bank intervention to buy up errant countries' debts in the form of bonds. Mr Sarkozy, initially in favour, decided against eurozone bonds.
The Piigs - the eurozone's most indebted nations
Portugal, Italy, Ireland Spain and Greece
Desperate for deal to convince markets to cut national borrowing costs. The EU/IMF bailouts of Greece, Ireland and Portugal were all conditional on stringent austerity measures. Dublin, Athens and Lisbon have all responded to pressure to slash their deficits with recent austerity budgets. Italy's new technocratic government has too while Spain's new centre-right leaders are urged to follow suit.
All five against surrendering budget decisions to Brussels and adamant about staying in the euro. Ireland will not allow any change to its 12.5% corporation tax rate which it sees as its main source of growth; fears loss of sovereignty. Spain backs treaty reform but Irish government opposed.
Out of the zone - for now
Poland, Sweden, Latvia, Lithuania, Czech Republic, Hungary Romania, Bulgaria
All eight want to avoid a two-tier EU as they are obliged to join the euro, eventually. Poland wants say in eurozone decisions. Latvia, recipient of 2008 EU/IMF bailout, expects other countries to endure similar fiscal discipline. Lithuania avoided bailout but shares Latvia's position. Czechs are in no rush to join. Hungary, latest victim of the debt crisis, has sought IMF/EU funding. Romania wants to stay on course to join in 2015; says huge efforts made to meet deficit targets after 2009 EU/IMF bailout. Romania and Bulgaria anxious to join passport-free Schengen zone soon.
Although not part of the eurozone, Bulgaria will be deeply opposed to the threat to its 10% corporate tax - the EU's lowest - from the Franco-German proposals. Sofia was eyeing up 2015 as entry date. Most Swedes do not want to join the euro (voted against it in 2003) but have no opt-out. All but Sweden and the Czechs have agreed to limits on the scale of their debts. Latvia and Lithuania aim to join in 2014 and Warsaw sees euro entry as a "strategic objective". Czechs wary of Franco-German plan for centralised budget control.
Staying out - for good
UK and Denmark
UK and Denmark secured euro opt-outs but want a say in decisions about it. UK says the more it is asked for, the more it will ask in return - and any treaty agreed by the UK would have to go through parliament. Denmark wants speedy resolution to crisis with minimum treaty change.
UK PM David Cameron, under political pressure for a referendum on the EU and for repatriation of powers from Brussels, wants to avoid major treaty change and a tax on financial transactions that would affect the City of London. Denmark, taking over rotating EU presidency on 1 Jan 2012, wants to avoid change that would trigger referendum.
The other triple-A euro states
Austria, Netherlands, Finland, Luxembourg
All four alarmed by warnings of possible credit-rating downgrade that would affect cost of borrowing. Austria wants decisions with quick impact involving all 27 EU members voluntarily signing up to agreed debt and deficit limits. The Dutch and Finnish want tighter controls on rule-breaking states. The Netherlands argued for a Brussels commissioner to have power to expel member states from the eurozone.
Austria reluctant to have treaty change, complains fiscal union a "long-term process" of 3-4 years. Luxembourg also very wary. Dutch adamant they want no referendum and no loss of sovereignty to Brussels. Helsinki opposed to Franco-German plan to stop smaller EU countries (eg Finland) blocking permanent eurozone bailout fund decisions.
Smaller eurozone economies
Belgium, Estonia, Cyprus, Malta, Slovakia, Slovenia
Belgium's new government, faced with high public sector debt, needs low borrowing costs. Estonia, in the euro since Jan 2011, wants to be among the decision-makers. Cyprus, buckling under the EU's biggest public sector spending bill (15.4% of GDP) promises austerity measures but needs help to tackle spiralling deficit. Malta, with 2% growth, backs strong action for rule-breakers. Slovakia wants strong, automatic, enforceable rules to ensure fiscal discipline. Slovenian aims are unclear as the country has just chosen a new government.
Belgium against major treaty change - approval required by 9 parliamentary chambers. Estonia, against new EU institutions to tackle crisis, prefers to focus on Commission and ECB. Cyprus anxious to avoid "endless discussions" on automatic sanctions. Slovakia ready to see other states leave euro to protect eurozone. Malta against long treaty change process but will accept the Merkel/Sarkozy plan if no alternative.
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