Thursday, October 29, 2009


Slowly Breaking Free

Saudi Arabia on Wednesday decided to drop the widely used West Texas Intermediate oil contract as the benchmark for pricing its oil, dealing a serious blow to the New York Mercantile Exchange.

The decision by the world’s biggest oil exporter could encourage other producers to abandon the benchmark and threatens the dominance of the world’s most heavily traded oil futures contract. It is the main contract traded on Nymex.

The move reveals the growing discontent of Riyadh and its US refinery customers with WTI after the price of the price of the benchmark became separated from the global oil market this year.

The surge in oil inventories in Cushing, Oklahoma, where WTI is delivered into America’s pipeline system, depressed the value of the WTI against other global benchmarks, throwing the global oil market into disarray.

In January, WTI, which usually trades at a premium of $1-$2 a barrel to Brent, fell sharply, leaving it at a discount of almost $12 – a record gap. This dislocation in the market continued well into the summer.

From January, Saudi Arabia will base the price of oil for its US customers on a new index developed by Argus, the London-based oil pricing company.

The Argus Sour Crude Index will track the price in the physical market of a basket of US Gulf Coast crudes, including Mars, Poseidon and Southern Green Canyon.

Argus said the change in policy reflected the “increased importance of the US Gulf coast sour crude market, in which both production and trading activity was rising sharply”.

Paul Horsnell, head of commodities research at Barclays Capital in London, said Saudi Arabia’s decision was likely to reflect a “wider discontent” from its customers in the US about WTI performance.

ExxonMobil, Marathon and Valero are among the US’s biggest buyers of Saudi crude oil.

Edward Morse, chief economist at LCM Commodities in New York, said: “It is a recognition by large players that WTI sometimes does not reflect the true value of crude oil in the waterborne market.”

Saudi Arabia has priced its oil using WTI since 1994.

The price was based on quotes from the physical market which were compiled by Platt’s, a unit of McGraw-Hill.

Oil companies then covered their exposure to WTI using the futures market on Nymex.

Bob Levin, managing director of market research at the CME Group-owned Nymex, said the exchange was ready to move with the market.

“We plan to introduce a cash-settled futures contract tracking the new Argus index,” he said.

Mike Vinciquerra, equity research analyst at BMO Capital Markets, said the new Argus index would not replace WTI. “It’s more a supplement,” he said.

Source - Financial Times


Turkey - Non-Dollar Trading With Russia/China/Iran

Turkey is switching to national currencies in trade with Iran and China, ending dependence on the U.S. dollar and the euro for about 20% of its commodity turnover, local media reported on Wednesday.

Turkey has already switched to settlements in national currencies with Russia amid weakening confidence in the greenback as the world's major reserve currency. The move was initiated by Turkish President Abdullah Gul during his visit to Moscow in February.

Turkey's decision to make settlements with Iran and China in national currencies was announced during a visit to Iran by Turkish Prime Minister Recep Tayyip Erdogan. The Turkish premier told a Turkish-Iranian business forum on Tuesday that the countries had prepared a legal framework for transition to settlements in national currencies.

"We have adopted a necessary legislative act and are prepared for the transition," the Turkish newspaper Milliyet quoted Erdogan as saying.

According to the paper, Turkey's trade with Russia, Iran and China exceeds $65 billion a year. Russia is Turkey's largest trade partner, with $37.8 billion commodity turnover registered last year.

Russian Prime Minister Vladimir Putin said on October 14 that Russia was ready to consider using the Russian and Chinese national currencies instead of the dollar in bilateral oil and gas dealings.

"We are ready to examine the possibility of selling energy resources for rubles, but our Chinese partners need rubles for that. We are also ready to sell for yuans," Putin said.

Britain's Independent newspaper reported in early October that Russian officials had held "secret meetings" with Arab states, China and France on ending the use of the U.S. dollar in international oil trade.

The countries are reportedly seeking to switch from the dollar to a basket of currencies including the euro, Japanese yen, Chinese yuan, gold, and a new unified currency of leading Arab oil producing countries.

The Independent said the meetings have been confirmed by Chinese and Arab banking sources, although Russian officials said they had no knowledge of the talks.

Source - RIA Novosti

Wednesday, October 28, 2009


Iran Oil Bourse

Iran, OPEC's second-biggest oil producer, launched its international oil exchange on Monday to buy and sell crude, oil products and petrochemical products, Iran's student news agency ISNA reported.

"The international exchange hall of crude, oil products and petrochemical goods of Iran was inaugurated. Our aim is to shift oil market trade focus in the region to the Kish Island," said Economy Minister Shamseddin Hosseini at the inauguration ceremony, ISNA reported.

The bourse, based on the Gulf economic free zone island of Kish, has been planned for years but had faced repeated delays. The first phase of the exchange for trading oil products was inaugurated in February.

When plans were first mooted, some analysts speculated Iran might use it to undermine the importance of the U.S. dollar by pricing crude in euros or other currencies.

The report did not specify the currency in which trading would take place.

Iran wants to deregulate prices of petrochemicals and other oil products and create more transparency as part of a privatisation drive, aimed at attracting more foreign investment into the country's oil industry.

But investors have shown limited interest mainly because of international sanctions imposed against Iran over its disputed nuclear programme, which the West fears is a cover to build nuclear arms, Iran denies this.

Iran is under U.S. and U.N. sanctions over its nuclear row with the West.

Oil Minister Masoud Mirkazemi, a close ally of hardline President Mahmoud Ahmadinejad, has promised to reinvigorate the Iranian hydrocarbon sector.

He has also signified Iran's need for foreign investment to develop its oil and gas industry. Iran lacks technical capabilities or funds to proceed with its energy projects.

Iran has struggled for years to develop its energy sector and now has to contend with an international lack of credit, as well as the sanctions.

Iran's petrochemical capacity expansion is likely to mainly focus on the rapid expansion programme of the country's refining capacity.

The Islamic state lacks sufficient refining capacity to meet its gasoline needs, leaving it potentially vulnerable to any Western sanctions targeting such trade.

Source - Reuters

Sunday, October 25, 2009


Asian Union

Asian nations discussed plans at a major summit Saturday to "lead the world" by boosting economic and political cooperation and possibly forming an EU-style community.

The prime ministers of regional giants China and India also looked to foster unity on the sidelines of the summit in Thailand after months of trading barbs over long-standing territorial issues.

But nuclear-armed North Korea and military-ruled Myanmar were also set to top the agenda in the royal beach resort of Hua Hin, underscoring the challenges still facing the region.

The summit groups the 10-member Association of Southeast Asian Nations (ASEAN) with regional partners China, Japan, South Korea, India, Australia and New Zealand.

Japan's new Prime Minister Yukio Hatoyama said a proposed East Asian community involving all 16 countries should aspire to take a leading role as the region makes an early rebound from the global economic crisis.

"It would be meaningful for us to have the aspiration that East Asia is going to lead the world and with the various countries with different regimes cooperating with each other towards that perspective," Hatoyama, who took office last month, told the Bangkok Post newspaper.

He described Japan's alliance with the United States as the cornerstone of its foreign policy, but said the region should "try to reduce as much as possible the gaps, the disparities that exist amongst the Asian countries".

China would "doubtless" grow further, particularly economically, "but I do not necessarily regard that as a threat," Hatoyama said.

Officials said separately that East Asian nations would carry out a feasibility study for a huge free trade zone covering ASEAN, China, Japan and South Korea and a larger group involving India, Australia and New Zealand.

Increased integration has been a recurring theme of the meetings in Thailand, as the rapidly changing region seeks to capitalise on the fact that it has recovered more quickly from the recession than the West.

ASEAN leaders have been discussing plans to create their own political and economic community by 2015.

But cross-border spats have continued to dog the summit, with host nation Thailand dragged into a war of words with Cambodia and India and China seeking to resolve their differences.

Chinese Premier Wen Jiabao and his Indian counterpart Manmohan Singh held "productive" talks on the sidelines of the summit Saturday but did not discuss their spat over territorial issues, officials said.

"We have reached important consensus on promoting bilateral ties," Wen was quoted as saying by the Chinese state news agency Xinhua as the talks opened.

Beijing has voiced its opposition to a recent visit by Singh to Arunachal Pradesh, an Indian border state at the core of the dispute, and to a planned visit there next month by the Dalai Lama, the exiled Tibetan spiritual leader.

Arunachal Pradesh and the Dalai Lama were not discussed at Saturday's meeting, an Indian delegation official said. The two nations fought a border war in 1962.

Human rights issues have also marred the summit. A widely criticised rights body officially launched by ASEAN on Friday was due to have its first ever meeting on Saturday.

The bloc was caught up in a row on Friday when leaders barred several activists from meeting them as previously arranged.

Meanwhile Thailand and Cambodia remained at loggerheads over the fate of fugitive former Thai premier Thaksin Shinawatra, after Cambodian Prime Minister Hun Sen bizarrely offered him a job as his economic adviser.

Around 18,000 troops and dozens of armoured vehicles have been deployed in Hua Hin after it was twice postponed by anti-government protests, with another 18,000 on standby or on duty in Bangkok.

The leaders are expected to sign a host of agreements this weekend on economic and other issues including climate change, disaster management, communications and food security in the rapidly changing region.

Source - AFP

Friday, October 23, 2009


New Push For Vaccines

There's a new vaccine for nicotine addiction, and another one for drug addiction. There's an AIDS vaccines (which doesn't work) and a vaccine for cervical cancer that's been approved for use on boys (boys don't have a cervix). Through the pharmaceutical industry, the big push for vaccines is on!

But why, exactly? Is there suddenly a new rash of epidemic disease requiring vaccine treatments? No, not really. What's new is the way Big Pharma is latching on to these diseases as new opportunities to sell more drugs.

There's a huge shift underway from drugs designed for sick people to a whole new class of drugs manufactured for healthy people. The new paradigm is that people need drugs before they get sick, as a sort of "protection" against sickness. Drugs, in essence, are being positioned as nutrients -- things the human body needs in order to be healthy. And from the moment you're born, you're considered deficient in these drugs. That's why babies are injected with vaccines within minutes after being born. There's a strong belief in the medical industry that babies are born deficient in vaccines and that such deficiencies must be "corrected" as soon as possible.

This simple but powerful shift in the marketing strategy of Big Pharma has expanded the potential customer based from a subset of the population (people who are sick) to the entire world population. Now, everybody needs a vaccine for something say the drug companies. All that's necessary for the financial success of these scheme is to convince sick people that they need more drugs (or vaccines), and that's easily accomplished through disease mongering campaigns (like the current fear push over H1N1 swine flu).

Bypassing the need for scientific evidence

There's another important shift taking place alongside the big vaccine push: A shift away from "evidence-based medicine" to a new medical paradigm of "dogmatic belief."

Medicines that treat sick people, you see, have to be proven to work. There have to be clinical trials, and some percentage of those sick people (only 5% or so, typically) have to show some sort of improved response after taking the medicine. This is the so-called "gold standard" of modern medicine. But with vaccines, no proof of efficacy is required. No placebo-controlled studies need to be conducted at all. Vaccines can be openly marketed and prescribed without any evidence that they actually work.

This is the new "free pass" for Big Pharma -- a class of medicine that requires no proof! They merely need to be injected into a few hundred people who are observed for as little as two weeks to see if anybody died or collapses into a coma. That's all the testing that's required (and sometimes even less). No long-term safety tests are required or pursued, and, importantly, there is no requirement that the vaccine proves it actually works to reduce flu infections (or HPV infections, etc.).

In essence, by pushing for a vaccine approach to virtually everything, including nicotine addictions, the pharmaceutical industry has transformed itself from a small industry that only served sick people with scientifically-proven medicines to a huge global industry that sells vaccines to everyone and needs no proof that they even work. By any assessment, it's a brilliant strategy for increasing pharmaceutical profits.

Source - Natural News

Sunday, October 18, 2009


Human Trafficking

Human trafficking is the practice of people being tricked or otherwise lured to travel to another country, who are then compelled to work with no or low payment or on terms which are highly exploitative. The practice is considered to be an illegal commerce and trade of people. It is essentially the facet of slavery which relies on direct purchase, in contrast to the "natural increase" from enslaving the children of slaves. The victims of human trafficking are used for prostitution, forced labor (including bonded labor or debt bondage) and other forms of involuntary servitude.

Human trafficking is the fastest-growing criminal industry in the world, with the total annual revenue for trafficking in persons estimated to be between USD$5 billion and $9 billion. The Council of Europe states, "People trafficking has reached epidemic proportions over the past decade, with a global annual market of about $42.5 billion." Trafficking victims typically are recruited using coercion, deception, fraud, the abuse of power, or outright abduction.

The United Nations Convention against Transnational Organized Crime includes a protocol which addresses human trafficking, defined as the "recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation." The United Nations Office on Drugs and Crime is responsible for implementing this protocol. It offers practical help to states with drafting laws, creating comprehensive national anti-trafficking strategies, and assisting with resources to implement them. In March 2009, UNODC launched the Blue Heart Campaign to fight human trafficking, to raise awareness, and to encourage involvement and inspire action.

Human trafficking across international borders requires cooperation and collaboration between states if it is to be tackled effectively. The OSCE (Organization for Security and Co-operation in Europe), an ad hoc intergovernmental organization under the United Nations Charter, is one of the leading agencies fighting the problem of human trafficking, with an area of operation that includes North America, Europe, Russia, and Central Asia.

Human trafficking differs from people smuggling. In the latter, people voluntarily request the smuggler's service for a fee, and there may be no deception involved in the (illegal) agreement. On arrival at the destination, the smuggled person is usually free to find their own way.

The trafficking victim, on the other hand, is not permitted to leave, and is required to work with no or low payment or on terms which are highly exploitative. The trafficker takes away the basic human rights of the victim. Sometimes the arrangement is structured as debt bondage, on highly exploitative terms, with the victim not being permitted or able to pay off.

Victims are sometimes tricked and lured by false promises or are physically forced. Some traffickers use coercive and manipulative tactics including deception, intimidation, feigned love, isolation, threat and use of physical force, and debt bondage. People who are seeking entry to other countries may be picked up by traffickers and misled into thinking that they will be free after being smuggled across the border. In some cases, they are captured through slave raiding, although this is increasingly rare.

Trafficking is a fairly lucrative industry. In some areas, like Russia, Eastern Europe, Hong Kong, Japan, and Colombia, trafficking is controlled by large criminal organizations. However, the majority of trafficking is done by networks of smaller groups that each specialize in a certain area, like recruitment, transportation, advertising, or retail. This is very profitable because little start-up capital is needed, and prosecution is relatively rare.

Trafficked people are usually the most vulnerable and powerless minorities in a region. They often come from the poorer areas where opportunities are limited, they often are ethnic minorities, and they often are displaced persons such as runaways or refugees, though they may come from any social background, class or race.

Women are particularly at risk from sex trafficking. Criminals exploit lack of opportunities, promise good jobs or opportunities for study, and then force the victims to become prostitutes. Through agents and brokers who arrange the travel and job placements, women are escorted to their destinations and delivered to the employers. Upon reaching their destinations, some women learn that they have been deceived about the nature of the work they will do; most have been lied to about the financial arrangements and conditions of their employment and find themselves in coercive or abusive situations from which escape is both difficult and dangerous.

Trafficking of children often involves exploitation of the parents' extreme poverty. Parents may sell children to traffickers in order to pay off debts or gain income, or they may be deceived concerning the prospects of training and a better life for their children. In West Africa, trafficked children have often lost one or both parents to the African AIDS crisis. Thousands of male (and sometimes female) children have been forced to be child soldiers.

The adoption process, legal and illegal, results in cases of trafficking of babies and pregnant women between the West and the developing world. In David M. Smolin’s papers on child trafficking and adoption scandals between India and the United States, he cites there are systemic vulnerabilities in the inter-country adoption system that makes adoption scandals predictable.

Thousands of children from Asia, Africa, and South America are sold into the global sex trade every year. Often they are kidnapped or orphaned, and sometimes they are actually sold by their own families.

Men are also at risk of being trafficked for unskilled work predominantly involving forced labor which globally generates $31bn according to the International Labor Organization. Other forms of trafficking include forced marriage and domestic servitude.

Due to the illegal nature of trafficking and differences in methodology, the exact extent is unknown. According to United States State Department data, an "estimated 600,000 to 820,000 men, women, and children [are] trafficked across international borders each year, approximately 70 percent are women and girls and up to 50 percent are minors. The data also illustrates that the majority of transnational victims are trafficked into commercial sexual exploitation." However, they go on to say that "the alarming enslavement of people for purposes of labor exploitation, often in their own countries, is a form of human trafficking that can be hard to track from afar." Thus the figures for persons trafficked for labor exploitation are likely to be greatly underestimated.

Reporters have witnessed a rapid increase in prostitution in Cambodia, Bosnia, and Kosovo after UN and, in the case of the latter two, NATO peacekeeping forces moved in. Peacekeeping forces have been linked to trafficking and forced prostitution. Proponents of peacekeeping argue that the actions of a few should not incriminate the many participants in the mission, yet NATO and the UN have come under criticism for not taking the issue of forced prostitution linked to peacekeeping missions seriously enough.

Destination, transit and source countries

A common misconception is that trafficking only occurs in poor countries. But every country in the world is involved in the underground, lucrative system. A “source country” is a country from which people are trafficked. Usually, these countries are destitute and may have been further weakened by war, corruption, natural disasters or climate. Some source countries are Nepal, Guatemala, the former Soviet territories, and Nigeria, but there are many more. A “transit country”, like Mexico or Israel, is a temporary stop on trafficked victims’ journey to the country where they will be enslaved. A “destination country” is where trafficked persons end up. These countries are generally affluent, since they must have citizens with enough disposable income to "buy" the traffickers' "products". Japan, India, much of Western Europe, and the United States are all destination countries.

The most common destinations for victims of human trafficking are Thailand, Japan, Israel, Belgium, the Netherlands, Germany, Italy, Turkey and the US, according to a report by the UNODC (United Nations Office on Drugs and Crime).

Other major sources of trafficked persons include Thailand, China, Nigeria, Albania, Bulgaria, Belarus, Moldova, and Ukraine.

Source - Wikipedia


Sucre Over Dollar

Leftist Latin American leaders have agreed on the creation of a regional currency to scale back on the use of the US dollar as well as economic sanctions against Honduran coup leaders.

Nine countries of ALBA, a leftist bloc conceived by Venezuelan President Hugo Chavez, met Friday in Bolivia where they vowed to press ahead with a new currency for intra-regional trade to replace the US dollar.

"The document is approved," said Bolivia's President Evo Morales, who is hosting the summit.

The new currency, named the Sucre after Jose Antonio de Sucre, who fought for independence from Spain alongside Venezuelan hero Simon Bolivar in the early 19th century, will be rolled out beginning in 2010 in a non-paper form.

That move echoes the European Union's introduction of the euro precursor, the ECU, an account unit designed to tie down stable exchange rates between member states before the national currencies were scraped.

ALBA's member states are Venezuela, Bolivia, Cuba, Ecuador, Nicaragua, Honduras, Dominica, Saint Vincent and Antigua and Barbuda.

In a resolution on Honduras, members of the group agreed "to apply economic and commercial sanctions against the regime that came to power as a result of a coup."

They also urged the United Nations to send a representative to Honduras to ensure "the inviolability of the Brazilian diplomatic mission as well as security and adequate humanitarian conditions for the stay there of president Manuel Zelaya."

Zelaya was overthrown in a June 28 coup backed by the military, the Supreme Court and the Honduran Congress over his attempt to hold a referendum to change the constitution.

His opponents charged that he was seeking to lift constitutional limits on his term in office so that he could run for re-election.

After sneaking back into the country about three weeks ago, Zelaya has been hiding at the Brazilian Embassy in Tegucigalpa, which has been cordoned off the Honduran security forces.

The two sides are now negotiating a political settlement.

The bloc also called for the replacement of the World Bank's International Centre for Settlement of Investment Disputes which has probed a slew of rows between ALBA members and western energy firms.

Most ALBA members have already withdrawn from the organization, with Ecuador announcing last July that it would pull out of the group.

On Friday, Bolivian media reported the country intents to nationalize a electricity distribution firm owned by Spain's Red de Electrica de Espana.

It is just the latest in a series of nationalizations in Venezuela, Ecuador and Bolivia.

In May, Venezuela nationalized 74 energy services firms operating in the oil-rich Maracaibo Lake region.

Bolivia's Evo Morales has indicated that parts for his country's energy and rail sectors will be nationalized.

Source - AFP

Friday, October 16, 2009

Jantar Mantar

Dollar Fizz

The dollar may drop to 50 yen next year and eventually lose its role as the global reserve currency, Sumitomo Mitsui Banking Corp.’s chief strategist said, citing trading patterns and a likely double dip in the U.S. economy.

“The U.S. economy will deteriorate into 2011 as the effects of excess consumption and the financial bubble linger,” said Daisuke Uno at Sumitomo Mitsui, a unit of Japan’s third- biggest bank. “The dollar’s fall won’t stop until there’s a change to the global currency system.”

The dollar last week dropped to the lowest in almost a year against the yen as record U.S. government borrowings and interest rates near zero sapped demand for the U.S. currency. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, has fallen 15 percent from its peak this year to as low as 75.211 today, the lowest since August 2008.

The gauge is about five points away from its record low in March 2008, and the dollar is 2.5 percent away from a 14-year low against the yen.

“We can no longer stop the big wave of dollar weakness,” said Uno, who correctly predicted the dollar would fall under 100 yen and the Dow Jones Industrial Average would sink below 7,000 after the bankruptcy of Lehman Brothers Holdings Inc. last year. If the U.S. currency breaks through record levels, “there will be no downside limit, and even coordinated intervention won’t work,” he said.

China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency. Hossein Ghazavi, Iran’s deputy central bank chief, said on Sept. 13 the euro has overtaken the dollar as the main currency of Iran’s foreign reserves.

Elliott Wave

The greenback is heading for the trough of a super-cycle that started in August 1971, Uno said, referring to the Elliot Wave theory, which holds that market swings follow a predictable five-stage pattern of three steps forward, two steps back.

The dollar is now at wave five of the 40-year cycle, Uno said. It dropped to 92 yen during wave one that ended in March 1973. The dollar will target 50 yen during the current wave, based on multiplying 92 with 0.764, a number in the Fibonacci sequence, and subtracting from the 123.17 yen level seen in the second quarter of 2007, according to Uno.

The Elliot Wave was developed by accountant Ralph Nelson Elliott during the Great Depression. Wave sizes are often related by a series of numbers known as the Fibonacci sequence, pioneered by 13th century mathematician Leonardo Pisano, who discerned them from proportions found in nature.

Uno said after the dollar loses its reserve currency status, the U.S., Europe and Asia will form separate economic blocs. The International Monetary Fund’s special drawing rights may be used as a temporary measure, and global currency trading will shrink in the long run, he said.

Source - Bloomberg

Thursday, October 15, 2009


What's In Store?

Aided by a bleak job market, the U.S. military met all of its recruitment goals in the past year for the first time since it became an all-volunteer force in 1973, the Pentagon said on Tuesday.

Military services have been stretched thin by conflicts in Afghanistan and Iraq, giving added weight to recruitment efforts as President Barack Obama considers sending another 40,000 U.S. troops to Afghanistan next year.

The United States already has 67,000 troops in Afghanistan and about 119,000 in Iraq.

Pentagon officials said recruitment gains were fueled by the deepest U.S. recession since the Great Depression and an unemployment rate nearing 10 percent.

"For the first time since the advent of the all-volunteer force, all of the military components, active and reserve, met their number as well as their quality goals," said Bill Carr, deputy undersecretary of defense for military personnel policy.

The U.S. Army, Navy, Marine Corps and Air Force sent a total of about 169,000 active duty recruits to training in the 2009 fiscal year that ended on September 30, beating their 164,000-member goal, the Pentagon said.

National guard and reserve forces sent about 128,000 recruits to training, beating their goal.

Carr said rising private sector unemployment was a force behind the increase in military recruitment but was not the only factor that "allowed us to be, for much of the year, in a very favorable position."

Curtis Gilroy, a senior Pentagon official, said a 10 percent increase in the national unemployment rate generally translates into a 4 percent to 6 percent "improvement in high-quality Army enlistments."

Recruitment does not come cheap. On average, the military spends between $9,000 and $10,000 per recruit, a figure that includes the high cost of advertising and of employing thousands of recruiters across the country, Carr said.

The Army spends far more, about $22,000 per recruit.

Source - Reuters

Sunday, October 11, 2009



I've said it here before: Obama is the new Gorbachev, the smiling face behind the crumbling imperial façade, the personable, non-threatening loser. Gorbachev got his Nobel Consolation Prize in October 1990; a little less than a year later the USSR was no more and he was unemployed.

In awarding him the Peace Prize, the Nobel committee actually did some good: by reaffirming his legitimacy as a leader, it helped to weaken the hand of the conservative forces within Russia, which later staged an unsuccessful coup in an effort to reclaim control of the dissolving empire.

Gorbachev certainly deserves credit for making sure that the USSR disintegrated with a whimper and not a bang. May Barak Obama be just as successful in completing the dissolution of the USA, quietly and without any undue bloodshed. Moving forward, I wish him a long and happy unemployment.


Gorbachev wins Nobel peace prize

By Jonathan Steele in Moscow
Tuesday 16 October 1990

"President Gorbachev yesterday won the world's biggest consolation prize. He took the Nobel peace award for losing the Cold War, becoming the first communist leader to win the trophy worth £360,000 after dismantling the system his party spent 70 years creating.

"The Nobel prize committee in Oslo did not quite put it that way. It cited Mr Gorbachev for "his leading role in the peace process" which today characterises parts of the world....

"In Moscow, hit by shortages of basic foods and consumer goods, the mood was more reserved. When the president of the Supreme Soviet, Anatoly Lukyanov, announced the news to MPs, they applauded for barely five seconds. Gennady Gerasimov, the foreign ministry spokesman, said: "We must remember, this certainly was not the prize for economics..."


...Nor is it the prize for economics this time around! If anything, the financial hole the USSR left behind was a whole lot smaller.

Now, some people think that Obama isn't doing a good job. He isn't. That's because it's not a good job. It's not even a bad job. It's a downright terrible job. But somebody's got to do it, and that somebody just won a Nobel prize, so he must be doing something right.

Source - Dmitry Orlov

Thursday, October 08, 2009



In addition to assorted bad breaks and pleasant surprises, opportunities and insults, life serves up the occasional pink unicorn. The three-dollar bill; the nun with a beard; the sentence, to borrow from the Lewis Carroll poem, that gyres and gimbles in the wabe.

An experience, in short, that violates all logic and expectation. The philosopher Soren Kierkegaard wrote that such anomalies produced a profound “sensation of the absurd,” and he wasn’t the only one who took them seriously. Freud, in an essay called “The Uncanny,” traced the sensation to a fear of death, of castration or of “something that ought to have remained hidden but has come to light.”

At best, the feeling is disorienting. At worst, it’s creepy.

Now a study suggests that, paradoxically, this same sensation may prime the brain to sense patterns it would otherwise miss — in mathematical equations, in language, in the world at large.

“We’re so motivated to get rid of that feeling that we look for meaning and coherence elsewhere,” said Travis Proulx, a postdoctoral researcher at the University of California, Santa Barbara, and lead author of the paper appearing in the journal Psychological Science. “We channel the feeling into some other project, and it appears to improve some kinds of learning.”

Researchers have long known that people cling to their personal biases more tightly when feeling threatened. After thinking about their own inevitable death, they become more patriotic, more religious and less tolerant of outsiders, studies find. When insulted, they profess more loyalty to friends — and when told they’ve done poorly on a trivia test, they even identify more strongly with their school’s winning teams.

In a series of new papers, Dr. Proulx and Steven J. Heine, a professor of psychology at the University of British Columbia, argue that these findings are variations on the same process: maintaining meaning, or coherence. The brain evolved to predict, and it does so by identifying patterns.

When those patterns break down — as when a hiker stumbles across an easy chair sitting deep in the woods, as if dropped from the sky — the brain gropes for something, anything that makes sense. It may retreat to a familiar ritual, like checking equipment. But it may also turn its attention outward, the researchers argue, and notice, say, a pattern in animal tracks that was previously hidden. The urge to find a coherent pattern makes it more likely that the brain will find one.

“There’s more research to be done on the theory,” said Michael Inzlicht, an assistant professor of psychology at the University of Toronto, because it may be that nervousness, not a search for meaning, leads to heightened vigilance. But he added that the new theory was “plausible, and it certainly affirms my own meaning system; I think they’re onto something.”

In the most recent paper, published last month, Dr. Proulx and Dr. Heine described having 20 college students read an absurd short story based on “The Country Doctor,” by Franz Kafka. The doctor of the title has to make a house call on a boy with a terrible toothache. He makes the journey and finds that the boy has no teeth at all. The horses who have pulled his carriage begin to act up; the boy’s family becomes annoyed; then the doctor discovers the boy has teeth after all. And so on. The story is urgent, vivid and nonsensical — Kafkaesque.

After the story, the students studied a series of 45 strings of 6 to 9 letters, like “X, M, X, R, T, V.” They later took a test on the letter strings, choosing those they thought they had seen before from a list of 60 such strings. In fact the letters were related, in a very subtle way, with some more likely to appear before or after others.

The test is a standard measure of what researchers call implicit learning: knowledge gained without awareness. The students had no idea what patterns their brain was sensing or how well they were performing.

But perform they did. They chose about 30 percent more of the letter strings, and were almost twice as accurate in their choices, than a comparison group of 20 students who had read a different short story, a coherent one.

“The fact that the group who read the absurd story identified more letter strings suggests that they were more motivated to look for patterns than the others,” Dr. Heine said. “And the fact that they were more accurate means, we think, that they’re forming new patterns they wouldn’t be able to form otherwise.”

Brain-imaging studies of people evaluating anomalies, or working out unsettling dilemmas, show that activity in an area called the anterior cingulate cortex spikes significantly. The more activation is recorded, the greater the motivation or ability to seek and correct errors in the real world, a recent study suggests. “The idea that we may be able to increase that motivation,” said Dr. Inzlicht, a co-author, “is very much worth investigating.”

Researchers familiar with the new work say it would be premature to incorporate film shorts by David Lynch, say, or compositions by John Cage into school curriculums. For one thing, no one knows whether exposure to the absurd can help people with explicit learning, like memorizing French. For another, studies have found that people in the grip of the uncanny tend to see patterns where none exist — becoming more prone to conspiracy theories, for example. The urge for order satisfies itself, it seems, regardless of the quality of the evidence.

Still, the new research supports what many experimental artists, habitual travelers and other novel seekers have always insisted: at least some of the time, disorientation begets creative thinking.

Source - New York Times

Tuesday, October 06, 2009


Strategic Currency Shifts

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

Source - Independent

Monday, October 05, 2009


Sunday, October 04, 2009


India's growing status as an economic superpower is masking a failure to stem a shocking rate of infant deaths among its poorest people.

Nearly two million children under five die every year in India – one every 15 seconds – the highest number anywhere in the world. More than half die in the month after birth and 400,000 in their first 24 hours.

A devastating report by Save the Children, due out on Monday, reveals that the poor are disproportionately affected and the charity accuses the country of failing to provide adequate healthcare for the impoverished majority of its one billion people. While the World Bank predicts that India's economy will be the fastest-growing by next year and the country is an influential force within the G20, World Health Organisation figures show it ranks 171st out of 175 countries for public health spending.

Malnutrition, neonatal diseases, diarrhoea and pneumonia are the major causes of death. Poor rural states are particularly affected by a dearth of health resources. But even in the capital, Delhi, where an estimated 20% of people live in slums, the infant mortality rate is reported to have doubled in a year, though city authorities dispute this.

In the Bhagwanpura slum on the north-west fringes of the capital, numerous mothers have lost one or more infants in their first years of life through want of basic medical attention.

Akila Anees's son, Mohammed Armann, who was almost three, died in her arms three weeks ago. A torrential downpour had flooded the slum, rainwater mixing with the raw sewage which fills the ink-black drains bisecting the narrow lanes. It rose to a depth of 2ft. Within days, Armann had fallen ill and died soon afterwards.

Save the Children says millions of mothers and their babies are simply not getting the skilled medical care they need, and the poor, in particular, have been left behind. "For many poor parents and their children, seeking medical help is a luxury and health services are often too far away," said Shireen Miller, its head of policy and advocacy in India.

"The difference between rich and poor is huge. In a city like Delhi it is more stark because we have got state-of-the-art hospitals and women giving birth under flyovers. The health service has failed to deliver. They are supposed to reach the poorest, but they have not."

India's state healthcare system is supposed to be open to all, offering access to government-run hospitals. The reality is that, while government hospitals often offer high standards of care, they can be overcrowded, and if they are short of the required medicines patients are asked to pay for them themselves. In the meantime, private health care has surged and now accounts for the majority of India's medical provision, giving access to world-class facilities for those who can pay or who can afford private insurance premiums.

According to the UK India Business Council, about 50 million middle-class Indians can afford private healthcare – a growing number but still a tiny fraction of the overall population – while the country still lags behind other developed countries, with only 0.7 hospital beds per 1,000 people compared with a global average of 4.

Many slum-dwellers are too far from hospitals to make use of their facilities, because they cannot afford to use private auto-rickshaws to reach them and there is no public transport. Instead they turn to quack doctors – a slightly cheaper option, but because they are unregulated and notoriously unreliable, one fraught with dangers.

According to the report, the national mortality rate for under-fives in the poorest fifth of the population is 92 in 1,000 compared with 33 for the highest fifth. The national average is 72.

A couple of hundred yards from Anees's shack in Bhagwanpura, Gudiya, 22, sat holding her surviving daughter, Priya, two, amid scenes of abject squalor. Almost every square inch of the slum is covered in a layer of rubbish and human and animal waste. She has lost three children in four years.

Her most recent child, a boy, died two days after she gave birth at home, she said. "He cried, but it was feeble and he gradually turned cold. We wrapped him in blankets and took him to the hospital but I could feel he was getting weaker, and then I could see he was not breathing and there was no heartbeat and then the doctor said he was dead." Three years ago her three-month-old son, Ahmit, died from pneumonia. A year earlier her five-month-old daughter, Kumkum, died after developing a fever.

Delhi's health minister, Kiran Walia, has blamed migration into the city for its problems, but many poorer families simply feel that they are shut out by the system. Selma Shakil's son, Muzzamil, died in July after she was turned away from a government hospital. He was a year old. She sat on the hard wooden bed in the tiny room in Bhagwanpura that is home to her two surviving children and her crippled husband and dabbed at her eyes with her headscarf.

"It was shattering for us. We were so happy when he was born, he was so happy and playful. I would give everything to get him back, but we can't," said Shakil, 27.

Muzzamil had been ill for months. Shakil had taken him to a government hospital three times; the first time they gave him medicine and sent her home, the second time he was admitted for a few days and then discharged, and the third time they turned her away. "They said they would not take him; they said, 'You can't keep coming here, the child will be fine'."

The day he died the doctors told her he was sleepy because of the medicines he was taking. She went home, but then he started groaning. "His breath was shallow, and that was when I realised it was too late. I took him in my arms. He opened his eyes once and said 'Ammi' [mummy] and that was it. He died in my arms." They buried him the same evening.

The Save the Children report says nearly nine million children die worldwide every year before the age of five. India has the highest number of deaths, with China fifth. Afghanistan has the dubious distinction of featuring in the top 10 of total child deaths and of child deaths per head of population, a list topped by Sierra Leone.

The charity accuses the world's leaders of a scandalous failure to meet the Millennium Development Goals, agreed in 2000, to cut child mortality by two- thirds between 1990 and 2015 and calls for a sharp increase in health spending.

Source - Guardian