Vectors

Elevate

2011-12-07T20:55:00.000+05:30

New research provides the first evidence that depression can be treated by only targeting an individual's style of thinking through repeated mental exercises in an approach called cognitive bias modification.

Led by the University of Exeter and funded by the Medical Research Council, the research shows how this new treatment could help some of the 3.5 million people in the UK living with depression.The study suggests an innovative psychological treatment called 'concreteness training' can reduce depression in just two months and could work as a self-help therapy for depression in primary care.

People suffering from depression have a tendency towards unhelpful abstract thinking and over-general negative thoughts, such as viewing a single mistake as evidence that they are useless at everything. Concreteness training (CNT) is a novel and unique treatment approach that attempts to directly target this tendency. Repeated practice of CNT exercises can help people to shift their thinking style.

CNT teaches people how to be more specific when reflecting on problems. This can help them to keep difficulties in perspective, improve problem-solving and reduce worry, brooding, and depressed mood. This study provided the first formal test of this treatment for depression in the NHS.

121 individuals who were currently experiencing an episode of depression were recruited from GP practices. They took part in the clinical trial and were randomly allocated into three groups. A third received their usual treatment from their GP, plus CNT, while some were offered relaxation training in addition to their usual treatment and the remainder simply continued their usual treatment. All participants were assessed by the research team after two months and then three and six months later to see what progress they had made.

The CNT involved the participants undertaking a daily exercise in which they focused on a recent event that they had found mildly to moderately upsetting. They did this initially with a therapist and then alone using an audio CD that provided guided instructions. They worked through standardised steps and a series of exercises to focus on the specific details of that event and to identify how they might have influenced the outcome.

CNT significantly reduced symptoms of depression and anxiety, on average reducing symptoms from severe depression to mild depression during the first two months and maintaining this effect over the following three and six months. On average, those individuals who simply continued with their usual treatment remained severely depressed.

Although concreteness training and relaxation training both significantly reduced depression and anxiety, only concreteness training reduced the negative thinking typically found in depression. Moreover, for those participants who practised it enough to ensure it became a habit, CNT reduced symptoms of depression more than relaxation training.

Professor Edward Watkins of the University of Exeter said: "This is the first demonstration that just targeting thinking style can be an effective means of tackling depression. Concreteness training can be delivered with minimal face-to-face contact with a therapist and training could be accessed online, through CDs or through smartphone apps. This has the advantage of making it a relatively cheap form of treatment that could be accessed by large numbers of people. This is a major priority in depression treatment and research, because of the high prevalence and global burden of depression, for which we need widely available cost-effective interventions."

The researchers are now calling for larger effectiveness clinical trials so that the feasibility of CNT as part of the NHS's treatment for depression can be assessed.

Published in the journal Psychological Medicine, this study was carried out by a team from the Mood Disorders Centre, which is a partnership between the NHS and the University of Exeter and the Peninsula College of Medicine and Dentistry, a joint entity of the Universities of Exeter and Plymouth and the NHS in the South West.

Trapeze

2010-08-26T10:52:00.000+05:30

What Your Hospital Does Not Want You To Know

2010-07-25T05:45:00.000+05:30

Mainstreet.com offers a few essential facts about hospitals that you should know before you check in:

Stay Healthy in July
July is the most dangerous month to visit a hospital. That's the month when students graduate from medical school and start doing residencies at teaching hospitals. Deaths due to hospital medication errors spike by 10 percent in July.

Hospital Wait Times
Hospitals have terrible wait times, which may actually be endangering patients. Patients who need to be seen within 14 minutes of arriving ended up having to wait more than twice as long.

The Rise of Bedsores
In recent years, the number of hospital patients suffering from bedsores has increased significantly. In order to prevent them, ask your doctor or whoever is accompanying you to make sure that you change positions every couple hours, keep your skin clean and prop yourself up with pillows to relieve the pressure.

Risk of Infections
There are 1.7 million cases of hospital infections every year, and 99,000 deaths that are related to these infections.

Medical Identity Theft
To date, 1.5 million Americans have had their personal information stolen so that someone else can use your health care to cover their costs. At the moment, hospitals are struggling to deal with this problem.

Bills May Be Negotiable
Most Americans have been the victim of hospital bill shock at one point or another, but it's important to remember that sometimes these bills are negotiable. Some hospitals have been known to drop the price by a third or more.

Hospitals Scan Your Credit Reports
Some hospitals have taken up the controversial practice of looking at patient credit scores, credit card limits and even 401(k) information. The issue has raised privacy concerns among consumer advocacy groups.

Get to Know Your Anesthesiologist
An inept anesthesiologist can cause serious harm to a patient, including death in the worst case scenario. It's best that you request to interview anesthesiologists before your procedure so that you can feel confident you're getting the best care.

Dr. Mercola's Comments:

One of the reasons I am so passionate about sharing information about healthful eating, exercise, and stress management is because these basic strategies can help keep you out of the hospital.

There are plenty of reasons – health related or otherwise -- for wanting to avoid hospitals, and several valid ones are listed in the Main Street article above, from having your identity stolen to getting killed...

Over the past decade, health care settings have become increasingly dangerous, mainly because hospitals are prime breeding grounds for newer, deadly superbugs like MRSA and other serious infections. Other reasons include understaffing and human mistakes.

The Frightening Statistics of Hospital Infection Rates

According to CDC statistics, approximately 1.7 million Americans contract infections during hospital stays, and 99,000 deaths are attributed to these infections each year! And that's just ONE cause of death directly attributable to the medical system you entrust with your health care needs.

Most of these hospital acquired infections could be avoided if hospitals maintained stricter infection control measures; simple strategies such as washing hands before touching each patient, and making sure bedding is cleaned, for example, go a long way to ensure a safer environment.

As I've mentioned many times before, the modern health care system as a whole is the leading cause of death in the US. And well intentioned but ill-informed US doctors are the third leading cause of death. Their mistakes claim some 225,000 lives every year.

Knowing what we know about infection rates in hospitals, I strongly recommend checking yours out. In the above article, Main Street provides a helpful link to Consumer Reports' listing of infection rates at major hospitals across the US.

You can review this list and see how the hospitals in your area fare before you plan an elective surgery, for example.

Should you fall ill, either ask to be taken to another hospital, or ask a friend or family member to stay with you to ensure proper hygiene measures are employed.

Americans Pay TWICE as Much for Health Care, but Receive the WORST Quality of Care
This was true in 2008, and over the past two years absolutely nothing has changed.

American medical care is still the most expensive in the world. We spend twice as much for health care, per person, than other industrialized countries. And we're still in last place among seven countries surveyed, when it comes to preventing avoidable deaths and providing quality care.

The US also has a drastically different range of life expectancy between people living in richer or poorer states. A 30- year gap now exists in the average life expectancy between Mississippi, in the Deep South, and Connecticut, in prosperous New England.

Sadly, the decline in life expectancy in these worst-off areas are primarily caused by a rise in a number of preventable diseases, such as lung cancer, chronic lung disease, and diabetes, highlighting the dire need for proper health education and preventive measures.

The latest Commonwealth Fund report -- which used data from "nationally representative patient and physician surveys in seven countries in 2007, 2008, and 2009" -- again ranked the United States dead last, compared to Britain, Canada, Germany, Netherlands, Australia and New Zealand.

According to Reuters:

"The report looks at five measures of healthcare -- quality, efficiency, access to care, equity and the ability to lead long, healthy, productive lives.

Britain, whose nationalized healthcare system was widely derided by opponents of U.S. healthcare reform, ranks first in quality while the Netherlands ranked first overall on all scores, the Commonwealth team found."

Ironically, researchers are also finding that Americans are increasingly being over-treated to death. Treatments that buy only weeks of time are frequently employed when patients are terminally ill, or dying from old age. Meanwhile, medical bills are a leading cause of family bankruptcies.

Again, most diseases and health conditions in the US are treated incorrectly and inefficiently, at extremely high cost, and I believe a major part of this problem is lack of prevention.

Focusing our efforts on educating about healthful lifestyle strategies could make all the difference, along with reducing our knee-jerk inclination to treat every symptom with toxic drugs.

BEWARE of July – The Most Dangerous Month for Any Hospital Stay

If you live near a teaching hospital, you'll want to pay attention to these stats.
In the US, medical students graduate and begin their residences in July each year, and as a result of inexperience combined with the sleep deprivation, medication- and other medical errors in teaching hospitals spike upward. Additionally many inexperienced interns and residents join the staff.

Nationally, error rates go up by 10 percent in July in teaching hospitals, a recent study shows, while non-teaching hospital error rates stay more or less fixed.

I agree with Main Street's advice to investigate whether your local hospital is a teaching hospital or not, and if you do get sick, either request another hospital, or at least be prepared to ask more questions to make sure you're getting appropriate care.

How to Survive in a Diseased Health Paradigm

In January of this year, Reuters reported that the U.S. spent $2.3 trillion dollars on health care in 2008. But although this was slightly less than projected, showing the slowest rise in health care costs in nearly 50 years, it's still dramatically disproportionate compared to what other nations are capable of accomplishing with less than half of what the US spends.

By 2017, health care spending is projected to exceed $4 trillion. This is largely due to the reliance on a medical system that treats only symptoms and never the cause of disease. The US also tends to over-test and over-treat, and I think it's obvious by now that most Americans are grossly over-medicated.

Still, every available index shows that this multitrillion dollar investment is a miserable failure.

More drugs, more surgeries, and more medical tests do not equal better health. All it does is bankrupt individuals, and the nation as a whole.

Will anything change as the US health care reform takes effect?

I sincerely doubt it, because the attitude toward health care is not being properly addressed. The reform is simply trying to figure out how to keep paying these exorbitant prices.
Preventive measures are still largely ignored.

I still believe you can influence this negative trend, however, by changing your own attitude toward health by realizing that some of the best ways to improve your health are very inexpensive. Some are even free.

Folks, you CAN Take Control of Your Health. You don't have to be just another sad statistic.

Dancer

2010-07-03T03:59:00.003+05:30

Banking & The Drug Trade

2010-06-30T05:31:00.002+05:30

Just before sunset on April 10, 2006, a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City. As soldiers on the ground approached the plane, the crew tried to shoo them away, saying there was a dangerous oil leak. So the troops grew suspicious and searched the jet.

They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp., Bloomberg Markets reports in its August 2010 issue.

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers — including the cash used to buy four planes that shipped a total of 22 tons of cocaine.

The admission came in an agreement that Charlotte, North Carolina-based Wachovia struck with federal prosecutors in March, and it sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years.

‘Blatant Disregard’

Wachovia admitted it didn’t do enough to spot illicit funds in handling $378.4 billion for Mexican-currency-exchange houses from 2004 to 2007. That’s the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history — a sum equal to one-third of Mexico’s current gross domestic product.

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” says Jeffrey Sloman, the federal prosecutor who handled the case.

Since 2006, more than 22,000 people have been killed in drug-related battles that have raged mostly along the 2,000-mile (3,200-kilometer) border that Mexico shares with the U.S. In the Mexican city of Ciudad Juarez, just across the border from El Paso, Texas, 700 people had been murdered this year as of mid- June. Six Juarez police officers were slaughtered by automatic weapons fire in a midday ambush in April.

Rondolfo Torre, the leading candidate for governor in the Mexican border state of Tamaulipas, was gunned down yesterday, less than a week before elections in which violence related to drug trafficking was a central issue.

45,000 Troops

Mexican President Felipe Calderon vowed to crush the drug cartels when he took office in December 2006, and he’s since deployed 45,000 troops to fight the cartels. They’ve had little success.

Among the dead are police, soldiers, journalists and ordinary citizens. The U.S. has pledged Mexico $1.1 billion in the past two years to aid in the fight against narcotics cartels.

In May, President Barack Obama said he’d send 1,200 National Guard troops, adding to the 17,400 agents on the U.S. side of the border to help stem drug traffic and illegal immigration.

Behind the carnage in Mexico is an industry that supplies hundreds of tons of cocaine, heroin, marijuana and methamphetamines to Americans. The cartels have built a network of dealers in 231 U.S. cities from coast to coast, taking in about $39 billion in sales annually, according to the Justice Department.

‘You’re Missing the Point’

Twenty million people in the U.S. regularly use illegal drugs, spurring street crime and wrecking families. Narcotics cost the U.S. economy $215 billion a year — enough to cover health care for 30.9 million Americans — in overburdened courts, prisons and hospitals and lost productivity, the department says.

“It’s the banks laundering money for the cartels that finances the tragedy,” says Martin Woods, director of Wachovia’s anti-money-laundering unit in London from 2006 to 2009. Woods says he quit the bank in disgust after executives ignored his documentation that drug dealers were funneling money through Wachovia’s branch network.

“If you don’t see the correlation between the money laundering by banks and the 22,000 people killed in Mexico, you’re missing the point,” Woods says.

Cleansing Dirty Cash

Wachovia is just one of the U.S. and European banks that have been used for drug money laundering. For the past two decades, Latin American drug traffickers have gone to U.S. banks to cleanse their dirty cash, says Paul Campo, head of the U.S. Drug Enforcement Administration’s financial crimes unit.

Miami-based American Express Bank International paid fines in both 1994 and 2007 after admitting it had failed to spot and report drug dealers laundering money through its accounts. Drug traffickers used accounts at Bank of America in Oklahoma City to buy three planes that carried 10 tons of cocaine, according to Mexican court filings.

Federal agents caught people who work for Mexican cartels depositing illicit funds in Bank of America accounts in Atlanta, Chicago and Brownsville, Texas, from 2002 to 2009. Mexican drug dealers used shell companies to open accounts at London-based HSBC Holdings Plc, Europe’s biggest bank by assets, an investigation by the Mexican Finance Ministry found.

Following Rules

Those two banks weren’t accused of wrongdoing. Bank of America spokeswoman Shirley Norton and HSBC spokesman Roy Caple say laws bar them from discussing specific clients. They say their banks strictly follow the government rules.

“Bank of America takes its anti-money-laundering responsibilities very seriously,” Norton says.

A Mexican judge on Jan. 22 accused the owners of six centros cambiarios, or money changers, in Culiacan and Tijuana of laundering drug funds through their accounts at the Mexican units of Banco Santander SA, Citigroup Inc. and HSBC, according to court documents filed in the case.

The money changers are in jail while being tried. Citigroup, HSBC and Santander, which is the largest Spanish bank by assets, weren’t accused of any wrongdoing. The three banks say Mexican law bars them from commenting on the case, adding that they each carefully enforce anti-money-laundering programs.

HSBC has stopped accepting dollar deposits in Mexico, and Citigroup no longer allows noncustomers to change dollars there. Citigroup detected suspicious activity in the Tijuana accounts, reported it to regulators and closed the accounts, Citigroup spokesman Paulo Carreno says.

Criminal Empires

On June 15, the Mexican Finance Ministry announced it would set limits for banks on cash deposits in dollars.

Mexico’s drug cartels have become multinational criminal enterprises.
Some of the gangs have delved into other illegal activities such as gunrunning, kidnapping and smuggling people across the border, as well as into seemingly legitimate areas such as trucking, travel services and air cargo transport, according to the Justice Department’s National Drug Intelligence Center.

These criminal empires have no choice but to use the global banking system to finance their businesses, Mexican Senator Felipe Gonzalez says.

“With so much cash, the only way to move this money is through the banks,” says Gonzalez, who represents a central Mexican state and chairs the senate public safety committee.

Gonzalez, a member of Calderon’s National Action Party, carries a .38 revolver for personal protection.

“I know this won’t stop the narcos when they come through that door with machine guns,” he says, pointing to the entrance to his office. “But at least I’ll take one with me.”

Subprime Losses

No bank has been more closely connected with Mexican money laundering than Wachovia. Founded in 1879, Wachovia became the largest bank by assets in the southeastern U.S. by 1900. After the Great Depression, some people in North Carolina called the bank “Walk-Over-Ya” because it had foreclosed on farms in the region.

By 2008, Wachovia was the sixth-largest U.S. lender, and it faced $26 billion in losses from subprime mortgage loans. That cost Wachovia Chief Executive Officer Kennedy Thompson his job in June 2008.

Six months later, San Francisco-based Wells Fargo, which dates from 1852, bought Wachovia for $12.7 billion, creating the largest network of bank branches in the U.S. Thompson, who now works for private-equity firm Aquiline Capital Partners LLC in New York, declined to comment.

As Wachovia’s balance sheet was bleeding, its legal woes were mounting. In the three years leading up to Wachovia’s agreement with the Justice Department, grand juries served the bank with 6,700 subpoenas requesting information.

Not Quick Enough

The bank didn’t react quickly enough to the prosecutors’ requests and failed to hire enough investigators, the U.S. Treasury Department said in March. After a 22-month investigation, the Justice Department on March 12 charged Wachovia with violating the Bank Secrecy Act by failing to run an effective anti-money-laundering program.
Five days later, Wells Fargo promised in a Miami federal courtroom to revamp its detection systems. Wachovia’s new owner paid $160 million in fines and penalties, less than 2 percent of its $12.3 billion profit in 2009.

If Wells Fargo keeps its pledge, the U.S. government will, according to the agreement, drop all charges against the bank in March 2011.

Wells Fargo regrets that some of Wachovia’s former anti- money-laundering efforts fell short, spokeswoman Mary Eshet says. Wells Fargo has invested $42 million in the past three years to improve its anti-money-laundering program and has been working with regulators, she says.

‘Significantly Upgraded’

“We have substantially increased the caliber and number of staff in our international investigations group, and we also significantly upgraded the monitoring software,” Eshet says. The agreement bars the bank from contesting or contradicting the facts in its admission.

The bank declined to answer specific questions, including how much it made by handling $378.4 billion — including $4 billion of cash-from Mexican exchange companies.

The 1970 Bank Secrecy Act requires banks to report all cash transactions above $10,000 to regulators and to tell the government about other suspected money-laundering activity. Big banks employ hundreds of investigators and spend millions of dollars on software programs to scour accounts.

No big U.S. bank — Wells Fargo included — has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again.

‘No Capacity to Regulate’

Large banks are protected from indictments by a variant of the too-big-to-fail theory.

Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets, says Jack Blum, a U.S. Senate investigator for 14 years and a consultant to international banks and brokerage firms on money laundering.

The theory is like a get-out-of-jail-free card for big banks, Blum says.

“There’s no capacity to regulate or punish them because they’re too big to be threatened with failure,” Blum says. “They seem to be willing to do anything that improves their bottom line, until they’re caught.”

Wachovia’s run-in with federal prosecutors hasn’t troubled investors. Wells Fargo’s stock traded at $30.86 on March 24, up 1 percent in the week after the March 17 agreement was announced.

Moving money is central to the drug trade — from the cash that people tape to their bodies as they cross the U.S.-Mexican border to the $100,000 wire transfers they send from Mexican exchange houses to big U.S. banks.

‘Doesn’t Stop Anyone’

In Tijuana, 15 miles south of San Diego, Gustavo Rojas has lived for a quarter of a century in a shack in the shadow of the 10-foot-high (3-meter-high) steel border fence that separates the U.S. and Mexico there. He points to holes burrowed under the barrier.

“They go across with drugs and come back with cash,” Rojas, 75, says. “This fence doesn’t stop anyone.”

Drug money moves back and forth across the border in an endless cycle. In the U.S., couriers take the cash from drug sales to Mexico — as much as $29 billion a year, according to U.S. Immigration and Customs Enforcement. That would be about 319 tons of $100 bills.

They hide it in cars and trucks to smuggle into Mexico. There, cartels pay people to deposit some of the cash into Mexican banks and branches of international banks. The narcos launder much of what’s left through money changers.

The Money Changers

Anyone who has been to Mexico is familiar with these street-corner money changers; Mexican regulators say there are at least 3,000 of them from Tijuana to Cancun, usually displaying large signs advertising the day’s dollar-peso exchange rate.
Mexican banks are regulated by the National Banking and Securities Commission, which has an anti-money-laundering unit; the money changers are policed by Mexico’s Tax Service Administration, which has no such unit.

By law, the money changers have to demand identification from anyone exchanging more than $500. They also have to report transactions higher than $5,000 to regulators.
The cartels get around these requirements by employing legions of individuals — including relatives, maids and gardeners — to convert small amounts of dollars into pesos or to make deposits in local banks. After that, cartels wire the money to a multinational bank.

The Smurfs

The people making the small money exchanges are known as Smurfs, after the cartoon characters.

“They can use an army of people like Smurfs and go through $1 million before lunchtime,” says Jerry Robinette, who oversees U.S. Immigration and Customs Enforcement operations along the border in east Texas.

The U.S. Treasury has been warning banks about big Mexican- currency-exchange firms laundering drug money since 1996. By 2004, many U.S. banks had closed their accounts with these companies, which are known as casas de cambio.

Wachovia ignored warnings by regulators and police, according to the deferred-prosecution agreement.

“As early as 2004, Wachovia understood the risk,” the bank admitted in court. “Despite these warnings, Wachovia remained in the business.”

One customer that Wachovia took on in 2004 was Casa de Cambio Puebla SA, a Puebla, Mexico-based currency-exchange company. Pedro Alatorre, who ran a Puebla branch in Mexico City, had created front companies for cartels, according to a pending Mexican criminal case against him.

Federal Indictment

A federal grand jury in Miami indicted Puebla, Alatorre and three other executives in February 2008 for drug trafficking and money laundering. In May 2008, the Justice Department sought extradition of the suspects, saying they used shell firms to launder $720 million through U.S. banks.

Alatorre has been in a Mexican jail for 2 1/2 years. He denies any wrongdoing, his lawyer Mauricio Moreno says. Alatorre has made no court-filed responses in the U.S.
During the period in which Wachovia admitted to moving money out of Mexico for Puebla, couriers carrying clear plastic bags stuffed with cash went to the branch Alatorre ran at the Mexico City airport, according to surveillance reports by Mexican police.

Alatorre opened accounts at HSBC on behalf of front companies, Mexican investigators found.

Puebla executives used the stolen identities of 74 people to launder money through Wachovia accounts, Mexican prosecutors say in court-filed reports.

‘Never Reported’

“Wachovia handled all the transfers, and they never reported any as suspicious,” says Jose Luis Marmolejo, a former head of the Mexican attorney general’s financial crimes unit who is now in private practice.

In November 2005 and January 2006, Wachovia transferred a total of $300,000 from Puebla to a Bank of America account in Oklahoma City, according to information in the Alatorre cases in the U.S. and Mexico.

Drug smugglers used the funds to buy the DC-9 through Oklahoma City aircraft broker U.S. Aircraft Titles Inc., according to financial records cited in the Mexican criminal case. U.S. Aircraft Titles President Sue White declined to comment.

On April 5, 2006, a pilot flew the plane from St. Petersburg, Florida, to Caracas to pick up the cocaine, according to the DEA. Five days later, troops seized the plane in Ciudad del Carmen and burned the drugs at a nearby army base.

‘Wachovia Knew’

“I am sure Wachovia knew what was going on,” says Marmolejo, who oversaw the criminal investigation into Wachovia’s customers. “It went on too long and they made too much money not to have known.”

At Wachovia’s anti-money-laundering unit in London, Woods and his colleague Jim DeFazio, in Charlotte, say they suspected that drug dealers were using the bank to move funds.

Woods, a former Scotland Yard investigator, spotted illegible signatures and other suspicious markings on traveler’s checks from Mexican exchange companies, he said in a September 2008 letter to the U.K. Financial Services Authority. He sent copies of the letter to the DEA and Treasury Department in the U.S.

Woods, 45, says his bosses instructed him to keep quiet and tried to have him fired, according to his letter to the FSA. In one meeting, a bank official insisted Woods shouldn’t have filed suspicious activity reports to the government, as both U.S. and
U.K. laws require.

‘I Was Shocked’

“I was shocked by the content and outcome of the meeting and genuinely traumatized,” Woods wrote.

In the U.S., DeFazio, who had been a Federal Bureau of Investigation agent for 21 years, says he told bank executives in 2005 that the DEA was probing the transfers through Wachovia to buy the planes.

Bank executives spurned recommendations to close suspicious accounts, DeFazio, 63, says.

“I think they looked at the money and said, ‘The hell with it. We’re going to bring it in, and look at all the money we’ll make,’” DeFazio says.

DeFazio retired in 2008.

“I didn’t want anything from them,” he says. “I just wanted to get out.”

Woods, who resigned from Wachovia in May 2009, now advises banks on how to combat money laundering. He declined to discuss details of Wachovia’s actions.

U.S. Comptroller of the Currency John Dugan told Woods in a March 19 letter his efforts had helped the U.S. build its case against Wachovia.

‘Great Courage’

“You demonstrated great courage and integrity by speaking up when you saw problems,” Dugan wrote.

It was the Puebla investigation that led U.S. authorities to the broader probe of Wachovia. On May 16, 2007, DEA agents conducted a raid of Wachovia’s international banking offices in Miami. They had a court order to seize Puebla’s accounts.

U.S. prosecutors and investigators then scrutinized the bank’s dealings with Mexican-currency-exchange firms. That led to the March deferred-prosecution agreement.
With Puebla’s Wachovia accounts seized, Alatorre and his partners shifted their laundering scheme to HSBC, according to financial documents cited in the Mexican criminal case against Alatorre.

In the three weeks after the DEA raided Wachovia, two of Alatorre’s front companies, Grupo ETPB SA and Grupo Rahero SC, made 12 cash deposits totaling $1 million at an HSBC Mexican branch, Mexican investigators found.

Another Drug Plane

The funds financed a Beechcraft King Air 200 plane that police seized on Dec. 29, 2007, in Cuernavaca, 50 miles south of Mexico City, according to information in the case against Alatorre.

For years, federal authorities watched as the wife and daughter of Oscar Oropeza, a drug smuggler working for the Matamoros-based Gulf Cartel, deposited stacks of cash at a Bank of America branch on Boca Chica Boulevard in Brownsville, Texas, less than 3 miles from the border.

Investigator Robinette sits in his pickup truck across the street from that branch. It’s a one-story, tan stucco building next to a Kentucky Fried Chicken outlet. Robinette discusses the Oropeza case with Tom Salazar, an agent who investigated the family.

“Everybody in there knew who they were — the tellers, everyone,” Salazar says. “The bank never came to us, though.”

New Meaning

The Oropeza case gives a new, literal meaning to the term money laundering. Oropeza’s wife, Tina Marie, and daughter Paulina Marie deposited stashes of $20 bills several times a day into Bank of America accounts, Salazar says. Bank employees got to know the Oropezas by the smell of their money.

“I asked the tellers what they were talking about, and they said the money had this sweet smell like Bounce, those sheets you throw into the dryer,” Salazar says. “They told me that when they opened the vault, the smell of Bounce just poured out.”
Oropeza, 48, was arrested 820 miles from Brownsville. On May 31, 2007, police in Saraland, Alabama, stopped him on a traffic violation. Checking his record, they learned of the investigation in Texas.

They searched the van and discovered 84 kilograms (185 pounds) of cocaine hidden under a false floor. That allowed federal agents to freeze Oropeza’s bank accounts and search his marble-floored home in Brownsville, Robinette says. Inside, investigators found a supply of Bounce alongside the clothes dryer.

Guilty Pleas

All three Oropezas pleaded guilty in U.S. District Court in Brownsville to drug and money-laundering charges in March and April 2008. Oscar Oropeza was sentenced to 15 years in prison; his wife was ordered to serve 10 months and his daughter got 6 months.

Bank of America’s Norton says, “We not only fulfilled our regulatory obligation, but we proactively worked with law enforcement on these matters.”

Prosecutors have tried to halt money laundering at American Express Bank International twice. In 1994, the bank, then a subsidiary of New York-based American Express Co., pledged not to allow money laundering again after two employees were convicted in a criminal case involving drug trafficker Juan Garcia Abrego.
In 1994, the bank paid $14 million to settle. Five years later, drug money again flowed through American Express Bank. Between 1999 and 2004, the bank failed to stop clients from laundering $55 million of narcotics funds, the bank admitted in a deferred-prosecution agreement in August 2007.

Western Union

It paid $65 million to the U.S. and promised not to break the law again. The government dismissed the criminal charge a year later. American Express sold the bank to London-based Standard Chartered PLC in February 2008 for $823 million.

Banks aren’t the only financial institutions that have turned a blind eye to drug cartels in moving illicit funds. Western Union Co., the world’s largest money transfer firm, agreed to pay $94 million in February 2010 to settle civil and criminal investigations by the Arizona attorney general’s office.

Undercover state police posing as drug dealers bribed Western Union employees to illegally transfer money, says Cameron Holmes, an assistant attorney general.
“Their allegiance was to the smugglers,” Holmes says. “What they thought about during work was ‘How may I please my highest- spending customers the most?’”

Smudged Fingerprints

Workers in more than 20 Western Union offices allowed the customers to use multiple names, pass fictitious identifications and smudge their fingerprints on documents, investigators say in court records.

“In all the time we did undercover operations, we never once had a bribe turned down,” says Holmes, citing court affidavits.

Western Union has made significant improvements, it complies with anti-money-laundering laws and works closely with regulators and police, spokesman Tom Fitzgerald says.

For four years, Mexican authorities have been fighting a losing battle against the cartels. The police are often two steps behind the criminals. Near the southeastern corner of Texas, in Matamoros, more than 50 combat troops surround a police station.
Officers take two suspected drug traffickers inside for questioning. Nearby, two young men wearing white T-shirts and baggy pants watch and whisper into radios. These are los halcones (the falcons), whose job is to let the cartel bosses know what the police are doing.

‘Only Way’

While the police are outmaneuvered and outgunned, ordinary Mexicans live in fear. Rojas, the man who lives in the Tijuana slum near the border fence, recalls cowering in his home as smugglers shot it out with the police.

“The only way to survive is to stay out of the way and hope the violence, the bullets, don’t come for you,” Rojas says.

To make their criminal enterprises work, the drug cartels of Mexico need to move billions of dollars across borders. That’s how they finance the purchase of drugs, planes, weapons and safe houses, Senator Gonzalez says.

“They are multinational businesses, after all,” says Gonzalez, as he slowly loads his revolver at his desk in his Mexico City office. “And they cannot work without a bank.”

Source - Bloomberg

Tree Kangaroo

2010-04-16T13:35:00.002+05:30

Unbridled Militarism

2010-04-15T07:44:00.001+05:30

As a visitor to our nation's capital, I cannot tell you how disconcerting it is to step off the metro and find yourself face to face with a F-35 fighter jet. Where you would normally expect to find ads for cell phones or museum exhibitions, Washington's subway, the second busiest in the country, instead displays full color backlit billboards for some of the most deadly – and expensive – weapons systems ever produced.

The ads for such companies as Lockheed Martin, the world's largest weapons producer, Goodrich, KBR, AGI, BAE Systems and Northrop Grumman can be found in many of the metro stations in the Washington metropolitan area. Not surprisingly, the heaviest concentration is at Pentagon City and near government offices at the Federal Center and Capitol South stations. Undoubtedly, the ads aim to influence key decision-makers, but they also serve the purpose of selling to the general public the concept that only our superior military prowess can protect us from a hostile world.

The billboards range from explicit ads for attack helicopters and combat vehicles to more subtle billboards for companies such as little-known DRS, owned by Italian weapons maker Finmeccanica and 26th among the top 100 Pentagon contractors, or for "rugged" Dell computers designed to meet Defense Department specifications for military-use.

Far from subtle is Northrop Grumman's marketing approach in the Capitol South metro station, the closest to Congress. In an all out assault on the visual senses, the station has been literally festooned by the country's third largest military contractor. Apparently considering the usual ad space along the tracks to be insufficient, Northrop Grumman ads can also be found on all four sides of columns installed near the turnstiles, on banners strung up along the railings upstairs and even on the floor just before the escalators. CBS Outdoor, responsible for the ad space in DC metro stations, claims that "Capitol Hill Station Domination is an impactful way to get your message in front of the Congress and decision-makers in DC."

An estimated 17,000 Capitol South metro passengers are confronted daily with Northrop Grumman Global Hawks and X-47 Unmanned Combat Aerial Vehicles, which boast a 4500-pound weapons bay, E-2D Advanced Hawkeyes, Viper Strike-armed Fire Scout unmanned helicopters and E-8C Joint Surveillance Target Attack Radar Systems (STARS), all designed "for an unsafe world." According to the centrist Brookings Institute, 90% of drone casualties in "targeted" strikes in Pakistan have been innocent civilians. Yet ads for these systems, which carry price tags ranging hundreds of millions of dollars when factoring in development costs, are on full display.

Perhaps most startling of all the Capitol South billboards is the ominous scene of a bombed out apartment building above the slogan "By the time you find the threat, we've already taken it out of the picture." Northrop Grumman fails to fill us in on what happened to the people living in those apartments.

Following the trend of major defense companies wishing to cozy up to powerbrokers in Congress and at the Pentagon, Northrop Grumman recently announced plans to relocate its California headquarters to the DC area. Officials from Washington, Virginia and Maryland have been falling over themselves trying to influence the decision of the $34 billion company. The District of Columbia has gone as far as offering a $25 billion incentive package for what Northrop Grumman estimates to be a measly 300 jobs, which will be filled primarily by company executives moving from Los Angeles!

The defense contractor presence on the DC metro is but one example of the ubiquitous signs of militarism in Washington. Standing out like sore thumbs, military personnel dressed in camouflage can be seen everywhere from the food court at the shopping mall to the line at the bank. Combat fatigues were ordered everyday wear for all service members, including those with desk jobs, following the September 11, 2001 attacks. I asked several camouflaged service members the reason behind the combat uniforms and all sheepishly replied that is was in support of the "troops in the field." One woman told me, "That's a good question. You feel kind of funny wearing this." Looking down at her desert boots, she said, "It's not exactly office wear." But it is a clear and constant reminder that the nation continues to be on a war footing.

Signs calling for support of the troops can be found on everything from restaurant walls to dump trucks. Cheering on the "troops in the field" is also the Liberty gas station on Columbia Pike in Arlington. Directly above the gas pumps is a red, white and blue sign that reads "Support Our Troops." This is either the result of disturbingly twisted logic or an astonishingly candid call for protecting U.S. access to Middle East oil reserves.

Walking the halls of Congress, you will find memorials at the offices of many representative and senators for the fallen troops from their district or state. What you will not find are any memorials for the 2,200 veterans who died in 2008 as a result of a lack of health insurance.

At Union Station, Amtrak passengers should not be surprised if a soldier or two cut in line. Signs in the station invite uniformed military personnel to skip to the head of the ticket line. According to Amtrak, which is the only Department of Defense approved rail passenger carrier in the US, it is a way for the company to "extend their thanks." That's all and good but why wouldn't Amtrak want to do the same for teachers, healthcare professionals, firefighters, librarians or non-profit volunteers?

Much of this is not necessarily new; the militarization of our society has been progressing for decades, permeating our schools, research and development programs, law enforcement and culture. And despite the heavy concentration in Washington DC, the phenomenon is certainly not limited to the nation's capital. The signs of militarism in our country are ever-present to the point of becoming virtually invisible, while subconsciously persuading us to accept violence and war as not only a suitable solution to conflict, but the only one.

Source - After Downing Street

Doon

2010-04-13T17:04:00.000+05:30

Peak Oil Warning From US Military

2010-04-13T16:59:00.000+05:30

The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report, which has a foreword by a senior commander, General James N Mattis.

It adds: "While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India."

The US military says its views cannot be taken as US government policy but admits they are meant to provide the Joint Forces with "an intellectual foundation upon which we will construct the concept to guide out future force developments."

The warning is the latest in a series from around the world that has turned peak oil – the moment when demand exceeds supply – from a distant threat to a more immediate risk.

The Wicks Review on UK energy policy published last summer effectively dismissed fears but Lord Hunt, the British energy minister, met concerned industrialists two weeks ago in a sign that it is rapidly changing its mind on the seriousness of the issue.

The Paris-based International Energy Agency remains confident that there is no short-term risk of oil shortages but privately some senior officials have admitted there is considerable disagreement internally about this upbeat stance.

Future fuel supplies are of acute importance to the US army because it is believed to be the biggest single user of petrol in the world. BP chief executive, Tony Hayward, said recently that there was little chance of crude from the carbon-heavy Canadian tar sands being banned in America because the US military like to have local supplies rather than rely on the politically unstable Middle East.

But there are signs that the US Department of Energy might also be changing its stance on peak oil. In a recent interview with French newspaper, Le Monde, Glen Sweetnam, main oil adviser to the Obama administration, admitted that "a chance exists that we may experience a decline" of world liquid fuels production between 2011 and 2015 if the investment was not forthcoming.

Lionel Badal, a post-graduate student at Kings College, London, who has been researching peak oil theories, said the review by the American military moves the debate on.

"It's surprising to see that the US Army, unlike the US Department of Energy, publicly warns of major oil shortages in the near-term. Now it could be interesting to know on which study the information is based on," he said.

"The Energy Information Administration (of the department of energy) has been saying for years that Peak Oil was "decades away". In light of the report from the US Joint Forces Command, is the EIA still confident of its previous highly optimistic conclusions?"

The Joint Operating Environment report paints a bleak picture of what can happen on occasions when there is serious economic upheaval. "One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest," it points out.

Source - Guardian

Alon e

2010-04-10T20:04:00.002+05:30

American Ethics

2010-04-10T19:31:00.001+05:30

George W. Bush, Dick Cheney and Donald Rumsfeld covered up that hundreds of innocent men were sent to the Guantánamo Bay prison camp because they feared that releasing them would harm the push for war in Iraq and the broader War on Terror, according to a new document obtained by The Times.

The accusations were made by Lawrence Wilkerson, a top aide to Colin Powell, the former Republican Secretary of State, in a signed declaration to support a lawsuit filed by a Guantánamo detainee. It is the first time that such allegations have been made by a senior member of the Bush Administration.

Colonel Wilkerson, who was General Powell’s chief of staff when he ran the State Department, was most critical of Mr Cheney and Mr Rumsfeld. He claimed that the former Vice-President and Defence Secretary knew that the majority of the initial 742 detainees sent to Guantánamo in 2002 were innocent but believed that it was “politically impossible to release them”.

General Powell, who left the Bush Administration in 2005, angry about the misinformation that he unwittingly gave the world when he made the case for the invasion of Iraq at the UN, is understood to have backed Colonel Wilkerson’s declaration.

Colonel Wilkerson, a long-time critic of the Bush Administration’s approach to counter-terrorism and the war in Iraq, claimed that the majority of detainees — children as young as 12 and men as old as 93, he said — never saw a US soldier when they were captured. He said that many were turned over by Afghans and Pakistanis for up to $5,000. Little or no evidence was produced as to why they had been taken.

He also claimed that one reason Mr Cheney and Mr Rumsfeld did not want the innocent detainees released was because “the detention efforts would be revealed as the incredibly confused operation that they were”. This was “not acceptable to the Administration and would have been severely detrimental to the leadership at DoD [Mr Rumsfeld at the Defence Department]”.

Referring to Mr Cheney, Colonel Wilkerson, who served 31 years in the US Army, asserted: “He had absolutely no concern that the vast majority of Guantánamo detainees were innocent ... If hundreds of innocent individuals had to suffer in order to detain a handful of hardcore terrorists, so be it.”

He alleged that for Mr Cheney and Mr Rumsfeld “innocent people languishing in Guantánamo for years was justified by the broader War on Terror and the small number of terrorists who were responsible for the September 11 attacks”.

He added: “I discussed the issue of the Guantánamo detainees with Secretary Powell. I learnt that it was his view that it was not just Vice-President Cheney and Secretary Rumsfeld, but also President Bush who was involved in all of the Guantánamo decision making.”

Mr Cheney and Mr Rumsfeld, Colonel Wilkerson said, deemed the incarceration of innocent men acceptable if some genuine militants were captured, leading to a better intelligence picture of Iraq at a time when the Bush Administration was desperate to find a link between Saddam Hussein and 9/11, “thus justifying the Administration’s plans for war with that country”.

He signed the declaration in support of Adel Hassan Hamad, a Sudanese man who was held at Guantánamo Bay from March 2003 until December 2007. Mr Hamad claims that he was tortured by US agents while in custody and yesterday filed a damages action against a list of American officials.

Defenders of Guantánamo said that detainees began to be released as early as September 2002, nine months after the first prisoners were sent to the jail at the US naval base in Cuba. By the time Mr Bush left office more than 530 detainees had been freed.

A spokesman for Mr Bush said of Colonel Wilkerson’s allegations: “We are not going to have any comment on that.” A former associate to Mr Rumsfeld said that Mr Wilkerson's assertions were completely untrue.

The associate said the former Defence Secretary had worked harder than anyone to get detainees released and worked assiduously to keep the prison population as small as possible. Mr Cheney’s office did not respond.

There are currently about 180 detainees left in the facility.

Source - Times Online

Peepo

2010-03-25T20:49:00.001+05:30

A Russian In America Writes His Impressions

2010-03-18T09:36:00.001+05:30

Dear Dmitry,

I hope you don't mind that this is in Russian. I think that this way I can be more completely honest. I am a relatively recent graduate of one of the many faceless post-Soviet institutions of higher learning, with a degree in philosophy. Last year I moved to the USA and married an American woman.

The question of when the modern capitalist system is going to collapse has interested me since my student years, and I have approached it from various directions: from the commonplace conspiracy theories to the serious works of Oswald Spengler and Noam Chomsky. Unfortunately, I still can't fathom what it is that is keeping this system going.

My wife is a very pleasant woman, but a typical white conservative American. Whenever any political question comes up, she starts ranting about the Constitution and calling herself a libertarian conservative and a constitutionalist. I used to think that she is well-educated and understands what she is talking about. In fact, she is the one who introduced me to the US, and I once believed everything she told me about it. But as I found out later, she understands nothing about politics, and just repeats various bits of populist nonsense spouted by Severin, O'Reilly, Limbaugh and other mass media clowns. Well, I am not going to try to prove to my wife that she is wrong on a subject that I don't quite understand myself. After all, she is a good wife. And so I try to steer clear of any political questions when I am with the family, although I do not always succeed. Perhaps if I had a copy of your book, it would help me explain myself to her better, but our family was one of the first to be flattened by the real estate market collapse. My wife went bankrupt, lost her bank account, house, job and the rest a while before I came here, and so we can't buy anything online.

In the talk you gave at the conference in Ireland you mentioned that there are certain regions of the US where the common people only eat garbage food from places like Walmart, which consists of artificial colors and flavors and corn, and that such a diet makes them "a little bit crazy." To my utter disappointment, I have to entirely agree with you. Various witty Russian commentators love to heap ridicule on the "dumb Americans" and on the USA as a generally stupid country. But if they spent a bit of time living here and paid closer attention, they would realize that it is not the low cultural level that distinguishes Americans from, say, Russians: both are, on average, quite beastly. But even when I've visited here before, as a student, my first impression was of a country that is full of madmen, ranging from somewhat mentally competent to total lunatics. And the further south I traveled, the more obvious this became. At first I even marveled at this, thinking, look at how intoxicating the spirit of liberty can be! But now I understand that this is a catastrophe, that American society is brainwashed and alienated in the extreme, and that all that's left for Americans to do is to play each other for the suckers that they have become.

Unfortunately, I feel the pernicious influence of all this on my own family right here and now. You don't have to be a brilliant visionary to realize that in the current situation all these endless suburbs, built on the North American model, are slowly but surely turning into mass graves for the millions of former members of the middle class. Those that do not turn into mass graves will become nature preserves - stocked with wild animals that were once human. My family is turning feral under my very eyes. Lack of resources has forced us to live according to the Soviet model - three generations under one roof. There are six of us, of which only one works, who is, consequently, exasperated and embittered. The rest of the household is gradually going insane from idleness and boredom. The television is never turned off. The female side of the family has been sucked into social networks and associated toys. Everyone is cultivating their own special psychosis, and periodically turns vicious. In these suburbs, a person without a car is as if without legs, and joblessness does not allow any of us to earn money for gas, and so the house is almost completely isolated from the outside world. The only information that seeps in comes from the lying mass media. And I understand that millions of families throughout America live this way! This is how people turn into "teabaggers," while their children join street gangs.

For me, as for you, this is the second collapse. You had left USSR before it happened, while I was there to observe it as a child. I saw what happened when people were finally told that they were being had for seventy-odd years, and were offered a candy bar as consolation. Now, after all this, Russian society is finished. It grieves me to see the faces of Americans, who still believe something and wave their Constitution about, and to know that the same thing is about to happen to them. I think that the model which you have proposed will allow us to confront and to survive this collapse with dignity.

Yevgeny
New Hamshire

Source - Dmitry Orlov

Connexions

2010-03-15T10:25:00.000+05:30

Surge Capacity

2010-03-15T10:22:00.000+05:30

In large law firms, there is a significant overhead associated with each attorney--office space, IT infrastructure, secretarial and paralegal support, salary, etc. As a result, the firm has a structural incentive to get as many hours as possible out of each attorney, and to do so consistently. In other words, attorneys should be billing 40+ hours per week. Of course, the nature of legal work very rarely provides a steady flow of 40 billable hours per week.

One common, but I think problematic solution is to take on as much work as possible, ensuring enough to fill 40 hours even during slow times. The problem, of course, is that when cases take off, and work demands rise, this additional work needs to be crammed in to the available time. Attorneys may be able to bill 60 or 70 hours a week for brief periods, but even then the quality of each hour of work naturally drops off. Some people will claim to bill 80 or even 100 hours per week, but I seriously doubt that hours 90-100 provide any real value to the client, especially if this is continued for more than a few weeks.

The alternative solution is to aim to work an average of about 30 hours per week, which will result in some weeks of 15-20 hours and other weeks of 40-50 hours. I think this is preferable in almost every way: it leads to better quality of life for the attorney, it leads to better quality of each hour of work performed, and it facilitates the incorporation of outside interests and continued learning that further enhances the value of each hour "billed." The key weakness to this lower workload is that it may not generate enough revenue to accommodate the high overhead costs associated with many top-tier firms. However, I'd argue that attorneys should be able to bill more per hour if they're averaging 30 hours per week than if they're averaging 60 hours per week--after all, do you think you'll get the same value from one hour out of someone's 60 hour work week as one hour out out of someone elses' 30 hour work week?

Of course, this same phenomenon applies similarly outside the legal world--most businesses and careers experience similar flux. And--perhaps most importantly--this dilemma highlights the problem with seeking to maximize output. When a system seeks to maximize output, it reduces its resiliency to perform and to adapt to stresses--it reduces its capacity to surge when it's really necessary. Additionally, output maximization tends to also reveal a short-term focus: there is little room to incorporate long term needs such as training, innovation, networking, business development, and sustainability of work demands on our lives outside of work. These same symptoms of output maximization, of course, apply equally to law firms (and other professions) and to modern industrial civilization writ large.

What am I doing about it? To start with, I'm focusing on reducing my own workload to about 80% of "full-time." I plan to use this additional time to focus on legal systems innovation (in part through a discussion here of the use of checklists in litigation, coming soon, as well as other blog posts that I hope will continue to improve my own understanding of our world and my role in it), to ensure that I'm ready and able to "surge" when necessary, and to keep improving my own legal and non-legal skills. If we all find ways to reduce how much we have to do on a regular basis, we'll all 1) have an improved ability to surge and rise to the challenge when necessary, and 2) consume and demand less in the interim. Not to mention enjoying our lives, friends, and families a bit more. That can't be a bad thing...

Source - Jeff Vail

Lattice

2010-03-14T00:13:00.001+05:30

Film Review - "Seamstresses"

2010-03-13T18:09:00.001+05:30

So it is possible after all - a Bulgarian film that neither tries to fill cinema halls with outrage and cheap humour nor aims solely at the festival snobs with muddled pretenses. If audiences had every right to be skeptical about Bulgarian productions hitting the screen over many a year, this time around they are in for a sweet little surprise. Shivachki (Seamstresses) is no masterpiece that is going to place Bulgarian cinema on the world map with a loud bang, yet its simple and sincere charm is a small yet heartfelt step in the direction of finding what Bulgarian films keep forgetting they need - an audience.

This is a story of three young girls fleeing the depressing hopelessness as underpaid tailors for a foreigner boss. Katya (Violeta Markovska), Dora (Alexandra Surchadjieva), and Elena (Elen Koleva) come to Sofia with the shy hope of a better life only for the big city to try and take advantage of their naivete. Katya takes up a job as a waitress and ends up as the mistress of a pimp. The volatile Dora's disillusionment and bitterness takes aim at everyone and everything, including herself, while Elena does her best to pick up the pieces and keep their friendship together. Events flow with an unexpected ease and the audience can recognise and nod in agreement with the observant, if somewhat heightened, depiction of three possible ways to deal with the hardship in the big and hostile city.

The film does try to tell a story that does not aim to depress or elate, but which is simply based on life. The particularly refreshing thing is that writer and director Lyudmil Todorov goes about this task with certain humility - he seems to subscribe to the theory that one must first master the simple things in order to then be able to then stop using them. There are no attempts at bravura shots or stylistic pirouettes; the framing is straightforward and unobtrusive. For once the dialogue does not describe things the audience is already seeing; it is tight and evocative. The same goes for the performances; for once they are free from that irritating theatrical exuberance, which often adds insult to injury when recent Bulgarian films are concerned.

In view of this, it is not surprising that of the three young leads, the one faring worst is Surchadjieva, whom the script affords the most emotionally intense moments as the spiteful and feisty Dora. While nominally with the best pedigree among her young colleagues (she is familiar to the audience as the daughter of actors Yosif Sarchadjiev and Pepa Nikolova), she only skids on the surface of an admittedly difficult character despite her energetic approach. With Dora, the shadow of the actor is always on the character, which makes the performance of Koleva all the more startling. She is a gem of an actress turning in a gem of role as the quiet and forgiving Elena. Koleva is one of those rare actors who can express an emotion by simply thinking about it and the image of her strolling along in that blue hat and red jacket would probably by the lasting image that one would take home from this movie.

Her Elena comes about as a thoughtful counterpart to Audrey Tautou's Amelie, albeit living in a colder, dirtier and yet altogether more familiar world. It remains to be seen whether Shivachki will serve as a springboard for bigger and better things for her, but on this, evidence she is both capable and deserving of such. In fact, her persona and performance trace a conceivable path which Bulgarian films should take in order to make its piece with the audience - one of quiet charm, humility and awareness of one's identity.

Source - Sofia Echo

Unexpected

2010-03-13T18:08:00.002+05:30

The Savanna Principle

2010-03-13T05:36:00.002+05:30

One of the fundamental assumptions of evolutionary psychology is that there is nothing special about the human brain. It is an evolved organ, just like the hand or the pancreas or any other part of the human body.

Just like all the other parts of the human body, the brain – and all the evolved psychological mechanisms in it – are designed for and adapted to the conditions of the ancestral environment in which they evolved, not necessarily to the current environment. This principle holds for both psychological adaptations, like evolved psychological mechanisms, and physical adaptations, like the eye, the vision, and the color recognition system.

What color is a banana? A banana is yellow in the sunlight and in the moonlight. It is yellow on a sunny day, on a cloudy day, on a rainy day. It is yellow at dawn and at dusk. The color of the banana appears constant to the human eye under all these conditions, despite the fact that the actual wavelengths of the light reflected by the surface of the banana under these varied conditions are different. Objectively, they are not the same color all the time. However, the human eye and color recognition system can compensate for these varied conditions because they all occurred during the course of the evolution of the human vision system, and can perceive the objectively varied colors as constantly yellow.

So a banana looks yellow under all conditions, except in a parking lot at night. Under the sodium vapor lights commonly used to illuminate parking lots, a banana does not appear natural yellow. This is because the sodium vapor lights did not exist in the ancestral environment, during the course of the evolution of the human vision system, and the visual cortex is therefore incapable of compensating for them.

Fans of the 1989 James Cameron movie The Abyss may recall a scene toward the end of the movie, where it is impossible for a diver to distinguish colors under artificial lighting in the otherwise total darkness of the deep oceanic basin. Regular viewers of the TV program Forensic Files and other real-life crime shows may further recall that eyewitnesses often misidentify the colors of cars on freeways, leading the police either to rule in or rule out potential suspects incorrectly. Highways and freeways are often lit with sodium vapor lights and other evolutionarily novel sources of illumination.

The same principle that holds for physical adaptations like the color recognition system also holds for psychological adaptations. Pioneers of evolutionary psychology all recognized that the psychological adaptations are designed for and adapted to the conditions of the ancestral environment, not necessarily to the conditions of the current environment. I call these observations the Savanna Principle: The human brain has difficulty comprehending and dealing with entities and situations that did not exist in the ancestral environment. Other evolutionary psychologists call the same observation the evolutionary legacy hypothesis or the mismatch hypothesis.

One example of the Savanna Principle in action is the fact that individuals who watch certain types of TV shows are more satisfied with their friendships, just as they are if they had more friends or socialized with them more frequently. It makes perfect sense that people who have more friends and socialize with them more frequently are more satisfied with their friendships than those who don’t have as many friends or socialize with them as frequently. And they are. What’s interesting is that the same thing happens if they watch more TV. From the perspective of the Savanna Principle, this is probably because realistic images of other humans, such as television, movies, videos, DVDs, and photographs, did not exist in the ancestral environment, where all realistic images of other humans were other humans. As a result, the Savanna Principle suggests that the human brain may have implicit difficulty distinguishing their “TV friends” – the characters they repeatedly see on TV shows – and their real friends.

Another example, discussed extensively in a previous post, is the fact that, when experimental psychologists deliberately create a situation where people earn money when they are ostracized and lose money when they are included, people still feel happy when they are included (and lose money) and hurt when they are excluded (and make money). While this makes no sense from a purely economic perspective, it is perfectly consistent with the Savanna Principle. Throughout the course of human evolution, exclusion from a group was always costly and inclusion was always beneficial. These two factors always covaried throughout evolutionary history, because there were no evil experimental psychologists in the ancestral environment to manipulate them independently. There were no such things as beneficial exclusion or costly inclusion, and the human brain cannot therefore comprehend them. It implicitly assumes that all inclusion is beneficial and all exclusion is costly.

So it appears that the human brain indeed has difficulty comprehending and dealing with entities and situations that did not exist in the ancestral environment, as the Savanna Principle suggests. If you look around, you will realize that virtually nothing in your current environment existed in the ancestral environment. In fact, I believe there are only four entities in our current environment that existed in the ancestral environment: men, women, boys, and girls. If you are outside, you may be tempted to include such natural features as trees, mountains, and rivers, but unless you are on the African savanna, they are not the same trees, mountains, and rivers that existed in the ancestral environment. There are more situations and relationships in your current environment that still existed in the ancestral environment, such as friendships, alliances, and pair-bonding (“marriage”). But many of these situations and relationships today involve evolutionarily novel components (Facebook, written contracts enforceable by government, marriage certificates).

The key word in the Savanna Principle – The human brain has difficulty comprehending and dealing with entities and situations that did not exist in the ancestral environment – is difficulty, not impossibility. It is sometimes possible to overcome the limitations of the human brain consciously – it is possible for us to remember that the characters we see on TV are professional actors who are paid millions of dollars to play scripted roles – but it is often difficult. Even when we are aware of something at the conscious level, we still act as if we weren’t, as when we become more satisfied with our friendships when we watch more TV. The observation captured in the Savanna Principle has very powerful and profound implications for evolutionary psychology and how the human brain functions.

Source - Psychology Today

Darling Wife

2010-03-08T00:09:00.002+05:30

African Land Grab

2010-03-07T23:38:00.000+05:30

We turned off the main road to Awassa, talked our way past security guards and drove a mile across empty land before we found what will soon be Ethiopia's largest greenhouse. Nestling below an escarpment of the Rift Valley, the development is far from finished, but the plastic and steel structure already stretches over 20 hectares – the size of 20 football pitches.

The farm manager shows us millions of tomatoes, peppers and other vegetables being grown in 500m rows in computer controlled conditions. Spanish engineers are building the steel structure, Dutch technology minimises water use from two bore-holes and 1,000 women pick and pack 50 tonnes of food a day. Within 24 hours, it has been driven 200 miles to Addis Ababa and flown 1,000 miles to the shops and restaurants of Dubai, Jeddah and elsewhere in the Middle East.

Ethiopia is one of the hungriest countries in the world with more than 13 million people needing food aid, but paradoxically the government is offering at least 3m hectares of its most fertile land to rich countries and some of the world's most wealthy individuals to export food for their own populations.

The 1,000 hectares of land which contain the Awassa greenhouses are leased for 99 years to a Saudi billionaire businessman, Ethiopian-born Sheikh Mohammed al-Amoudi, one of the 50 richest men in the world. His Saudi Star company plans to spend up to $2bn acquiring and developing 500,000 hectares of land in Ethiopia in the next few years. So far, it has bought four farms and is already growing wheat, rice, vegetables and flowers for the Saudi market. It expects eventually to employ more than 10,000 people.

But Ethiopia is only one of 20 or more African countries where land is being bought or leased for intensive agriculture on an immense scale in what may be the greatest change of ownership since the colonial era.

An Observer investigation estimates that up to 50m hectares of land – an area more than double the size of the UK – has been acquired in the last few years or is in the process of being negotiated by governments and wealthy investors working with state subsidies. The data used was collected by Grain, the International Institute for Environment and Development, the International Land Coalition, ActionAid and other non-governmental groups.

The land rush, which is still accelerating, has been triggered by the worldwide food shortages which followed the sharp oil price rises in 2008, growing water shortages and the European Union's insistence that 10% of all transport fuel must come from plant-based biofuels by 2015.

In many areas the deals have led to evictions, civil unrest and complaints of "land grabbing".

The experience of Nyikaw Ochalla, an indigenous Anuak from the Gambella region of Ethiopia now living in Britain but who is in regular contact with farmers in his region, is typical. He said: "All of the land in the Gambella region is utilised. Each community has and looks after its own territory and the rivers and farmlands within it. It is a myth propagated by the government and investors to say that there is waste land or land that is not utilised in Gambella.

"The foreign companies are arriving in large numbers, depriving people of land they have used for centuries. There is no consultation with the indigenous population. The deals are done secretly. The only thing the local people see is people coming with lots of tractors to invade their lands.

"All the land round my family village of Illia has been taken over and is being cleared. People now have to work for an Indian company. Their land has been compulsorily taken and they have been given no compensation. People cannot believe what is happening. Thousands of people will be affected and people will go hungry."

It is not known if the acquisitions will improve or worsen food security in Africa, or if they will stimulate separatist conflicts, but a major World Bank report due to be published this month is expected to warn of both the potential benefits and the immense dangers they represent to people and nature.

Leading the rush are international agribusinesses, investment banks, hedge funds, commodity traders, sovereign wealth funds as well as UK pension funds, foundations and individuals attracted by some of the world's cheapest land.

Together they are scouring Sudan, Kenya, Nigeria, Tanzania, Malawi, Ethiopia, Congo, Zambia, Uganda, Madagascar, Zimbabwe, Mali, Sierra Leone, Ghana and elsewhere. Ethiopia alone has approved 815 foreign-financed agricultural projects since 2007. Any land there, which investors have not been able to buy, is being leased for approximately $1 per year per hectare.

Saudi Arabia, along with other Middle Eastern emirate states such as Qatar, Kuwait and Abu Dhabi, is thought to be the biggest buyer. In 2008 the Saudi government, which was one of the Middle East's largest wheat-growers, announced it was to reduce its domestic cereal production by 12% a year to conserve its water. It earmarked $5bn to provide loans at preferential rates to Saudi companies which wanted to invest in countries with strong agricultural potential .

Meanwhile, the Saudi investment company Foras, backed by the Islamic Development Bank and wealthy Saudi investors, plans to spend $1bn buying land and growing 7m tonnes of rice for the Saudi market within seven years. The company says it is investigating buying land in Mali, Senegal, Sudan and Uganda. By turning to Africa to grow its staple crops, Saudi Arabia is not just acquiring Africa's land but is securing itself the equivalent of hundreds of millions of gallons of scarce water a year. Water, says the UN, will be the defining resource of the next 100 years.

Since 2008 Saudi investors have bought heavily in Sudan, Egypt, Ethiopia and Kenya. Last year the first sacks of wheat grown in Ethiopia for the Saudi market were presented by al-Amoudi to King Abdullah.

Some of the African deals lined up are eye-wateringly large: China has signed a contract with the Democratic Republic of Congo to grow 2.8m hectares of palm oil for biofuels. Before it fell apart after riots, a proposed 1.2m hectares deal between Madagascar and the South Korean company Daewoo would have included nearly half of the country's arable land.

Land to grow biofuel crops is also in demand. "European biofuel companies have acquired or requested about 3.9m hectares in Africa. This has led to displacement of people, lack of consultation and compensation, broken promises about wages and job opportunities," said Tim Rice, author of an ActionAid report which estimates that the EU needs to grow crops on 17.5m hectares, well over half the size of Italy, if it is to meet its 10% biofuel target by 2015.

"The biofuel land grab in Africa is already displacing farmers and food production. The number of people going hungry will increase," he said. British firms have secured tracts of land in Angola, Ethiopia, Mozambique, Nigeria and Tanzania to grow flowers and vegetables.

Indian companies, backed by government loans, have bought or leased hundreds of thousands of hectares in Ethiopia, Kenya, Madagascar, Senegal and Mozambique, where they are growing rice, sugar cane, maize and lentils to feed their domestic market.

Nowhere is now out of bounds. Sudan, emerging from civil war and mostly bereft of development for a generation, is one of the new hot spots. South Korean companies last year bought 700,000 hectares of northern Sudan for wheat cultivation; the United Arab Emirates have acquired 750,000 hectares and Saudi Arabia last month concluded a 42,000-hectare deal in Nile province.

The government of southern Sudan says many companies are now trying to acquire land. "We have had many requests from many developers. Negotiations are going on," said Peter Chooli, director of water resources and irrigation, in Juba last week. "A Danish group is in discussions with the state and another wants to use land near the Nile."

In one of the most extraordinary deals, buccaneering New York investment firm Jarch Capital, run by a former commodities trader, Philip Heilberg, has leased 800,000 hectares in southern Sudan near Darfur. Heilberg has promised not only to create jobs but also to put 10% or more of his profits back into the local community. But he has been accused by Sudanese of "grabbing" communal land and leading an American attempt to fragment Sudan and exploit its resources.

Devlin Kuyek, a Montreal-based researcher with Grain, said investing in Africa was now seen as a new food supply strategy by many governments. "Rich countries are eyeing Africa not just for a healthy return on capital, but also as an insurance policy. Food shortages and riots in 28 countries in 2008, declining water supplies, climate change and huge population growth have together made land attractive. Africa has the most land and, compared with other continents, is cheap," he said.

"Farmland in sub-Saharan Africa is giving 25% returns a year and new technology can treble crop yields in short time frames," said Susan Payne, chief executive of Emergent Asset Management, a UK investment fund seeking to spend $50m on African land, which, she said, was attracting governments, corporations, multinationals and other investors. "Agricultural development is not only sustainable, it is our future. If we do not pay great care and attention now to increase food production by over 50% before 2050, we will face serious food shortages globally," she said.

But many of the deals are widely condemned by both western non-government groups and nationals as "new colonialism", driving people off the land and taking scarce resources away from people.

We met Tegenu Morku, a land agent, in a roadside cafe on his way to the region of Oromia in Ethiopia to find 500 hectares of land for a group of Egyptian investors. They planned to fatten cattle, grow cereals and spices and export as much as possible to Egypt. There had to be water available and he expected the price to be about 15 birr (75p) per hectare per year – less than a quarter of the cost of land in Egypt and a tenth of the price of land in Asia.

"The land and labour is cheap and the climate is good here. Everyone – Saudis, Turks, Chinese, Egyptians – is looking. The farmers do not like it because they get displaced, but they can find land elsewhere and, besides, they get compensation, equivalent to about 10 years' crop yield," he said.

Oromia is one of the centres of the African land rush. Haile Hirpa, president of the Oromia studies' association, said last week in a letter of protest to UN secretary-general Ban Ki-moon that India had acquired 1m hectares, Djibouti 10,000 hectares, Saudi Arabia 100,000 hectares, and that Egyptian, South Korean, Chinese, Nigerian and other Arab investors were all active in the state.

"This is the new, 21st-century colonisation. The Saudis are enjoying the rice harvest, while the Oromos are dying from man-made famine as we speak," he said.

The Ethiopian government denied the deals were causing hunger and said that the land deals were attracting hundreds of millions of dollars of foreign investments and tens of thousands of jobs. A spokesman said: "Ethiopia has 74m hectares of fertile land, of which only 15% is currently in use – mainly by subsistence farmers. Of the remaining land, only a small percentage – 3 to 4% – is offered to foreign investors. Investors are never given land that belongs to Ethiopian farmers. The government also encourages Ethiopians in the diaspora to invest in their homeland. They bring badly needed technology, they offer jobs and training to Ethiopians, they operate in areas where there is suitable land and access to water."

The reality on the ground is different, according to Michael Taylor, a policy specialist at the International Land Coalition. "If land in Africa hasn't been planted, it's probably for a reason. Maybe it's used to graze livestock or deliberately left fallow to prevent nutrient depletion and erosion. Anybody who has seen these areas identified as unused understands that there is no land in Ethiopia that has no owners and users."

Development experts are divided on the benefits of large-scale, intensive farming. Indian ecologist Vandana Shiva said in London last week that large-scale industrial agriculture not only threw people off the land but also required chemicals, pesticides, herbicides, fertilisers, intensive water use, and large-scale transport, storage and distribution which together turned landscapes into enormous mono-cultural plantations.

"We are seeing dispossession on a massive scale. It means less food is available and local people will have less. There will be more conflict and political instability and cultures will be uprooted. The small farmers of Africa are the basis of food security. The food availability of the planet will decline," she says. But Rodney Cooke, director at the UN's International Fund for Agricultural Development, sees potential benefits. "I would avoid the blanket term 'land-grabbing'. Done the right way, these deals can bring benefits for all parties and be a tool for development."

Lorenzo Cotula, senior researcher with the International Institute for Environment and Development, who co-authored a report on African land exchanges with the UN fund last year, found that well-structured deals could guarantee employment, better infrastructures and better crop yields. But badly handled they could cause great harm, especially if local people were excluded from decisions about allocating land and if their land rights were not protected.

Water is also controversial. Local government officers in Ethiopia told the Observer that foreign companies that set up flower farms and other large intensive farms were not being charged for water. "We would like to, but the deal is made by central government," said one. In Awassa, the al-Amouni farm uses as much water a year as 100,000 Ethiopians.

Source - Guardian

Tini

2010-03-04T22:16:00.001+05:30

Film Review - "The Band's Visit"

2010-03-04T22:08:00.001+05:30

Thea Jarvis writes: "Hospitality may be a familiar, old-fashioned virtue, but it hasn't gone out of style. In our homes and communities, schools and churches, families and neighborhoods, hospitality remains the glorious centerpiece of the human dinner table. It's the flag we rally around to remind ourselves that we're all in this together. It's the sturdy thread that binds us gently to each other."

We agree, but in many communities, there is still an omnipresent fear of the stranger, an attitude that has been given credence by the culture wars, real wars, and the so-called war on terrorism. An outsider could be the evil-doer bent on our death and destruction. And so millions of people around the world shy away from the natural impulse of hospitality; instead of building a house of love, they construct a house of fear. This is the backdrop to Eran Kolirin's spiritual film The Band's Visit about the challenges faced by an Egyptian police band when they arrive in Israel to play at the opening of an Arab Cultural Center. They are strangers in a strange land.

Tewfiq (Sasson Gabai) is the conductor of the Alexander Ceremonial Police Orchestra. He is very worried about the group's future given budget cuts and other factors threatening its existence. When he and the band members arrive at the airport in Israel, no one is there to meet them. Tewfiq dispatches Khaled (Saleh Bakri) to get directions to the town where they are to play. But instead of concentrating on the details, he tries to romance the female clerk with his rendition of a favorite love song. The band takes a bus to a small, out-of-the-way desert town and once again, there is no one there to meet them.

Dina (Ronit Elkabetz), a vivacious manager of a café, gives them some food. Tewfiq is quite distressed to find out that there are no hotels or inns in the town and no bus until the next morning. Dina invites Tewfiq and Khaled to stay with her and convinces a regular at her café to take a few band members to his home. The rest stay in the café overnight.

Dina invites Tewfiq to go out with her. He is definitely not used to being with a woman who exudes sexual allure and takes charge of everything. She queries him about his life, and it takes the reticent band conductor a long time to reveal the source of his melancholy: the suicide of a son he pushed too hard and the death of his wife. Although Tewfiq loves music, he is more enamored of fishing.

Khaled, meanwhile, goes along with Papi (Shlomi Avraham) and his date to a roller disco. There the Arab ladies man tutors the socially awkward Papi in the art of seducing a shy young woman. Simon (Khalifa Natour), Tewfiq's assistant, spends some time with an Israeli family. Itzik (Rubi Moscovich), the host, hasn't worked for some time, and there is tension in the home about that. He remembers being impressed when Simon played part of an unfinished composition on his clarinet at the café. In a bedroom, Itzik suggests that his new friend shouldn't end the piece with fanfare but with something like what's there — "not sad, not happy, a small room, a lamp, a bed, a child sleeping, and tons of loneliness."

Novice director Erna Kolirin has fashioned a deeply spiritual drama about the bridge-making capacities of hospitality and the way music serves as universal language that draws people together. Instead of making a message film about Arabs and Jews, Kolirin has made a comedy filled with lovable characters struggling to communicate with those from a different culture and religion. They reach out to each other in simple ways: singing "Summertime" around a kitchen table, listening to the cadences in the Arabic language, and sharing a moment on a park bench. The cause of peace is nurtured in such soulful moments, and our hearts are lifted as we watch them unfold.

Source - Spirituality & Practice

BT

2010-02-27T20:12:00.002+05:30

Who Is Greenspan?

2010-02-27T20:04:00.000+05:30

Secretary of State Hillary Clinton on Thursday said "outrageous" advice from former Federal Reserve Chairman Alan Greenspan helped create record U.S. budget deficits that put national security at risk.

Appearing before congressional panels to defend the State Department's $52.8 billion budget request for 2011, Clinton said the massive U.S. foreign debt had sapped U.S. strength around the world.

"It breaks my heart that 10 years ago we had a balanced budget, that we were on the way of paying down the debt of the United States of America," Clinton said.

"I served on the budget committee in the Senate, and I remember as vividly as if it were yesterday when we had a hearing in which Alan Greenspan came and justified increasing spending and cutting taxes, saying that we didn't really need to pay down the debt -- outrageous in my view," she said.

Though she did not give a date, that hearing must have taken place during the presidency of George W. Bush, who authored a massive tax cut while spending billions on wars in Iraq and Afghanistan and sponsoring a major expansion of the Medicare health program for seniors.

Clinton urged lawmakers to tackle the federal budget deficit, which reached a record $1.4 trillion for the fiscal year that ended last September.

"We have to address this deficit and the debt of the United States as a matter of national security not only as a matter of economics," Clinton said. "I do not like to be in a position where the United States is a debtor nation to the extent that we are."

Having to rely on foreign creditors hit "our ability to protect our security, to manage difficult problems and to show the leadership that we deserve," she said.

"The moment of reckoning cannot be put off forever," she said. "I really honestly wish I could turn the clock back."

Though she did not mention it, China's portfolio of some $755 billion in U.S. Treasury bonds has become a concern for some U.S. policymakers. They worry that Beijing's creditor status could create leverage to influence U.S. policy.

FALL OF THE ORACLE

Clinton's swipe at Greenspan symbolized the way the former central bank chief's reputation has fallen since he left the job in 2006.

First named to the office by President Ronald Reagan in 1987, Greenspan served throughout the presidency of Clinton's husband, former President Bill Clinton. He was regarded as economic oracle whose cryptic pronouncements were searched for inner meaning and regularly moved financial markets.

Now, he has become a handy whipping boy blamed for helping inflate a housing bubble that eventually burst, setting off a grave financial crisis and plunging the economy into the worst recession in decades.

Greenspan, known as a deficit hawk, late last year endorsed a proposed bipartisan commission to help make tough calls needed to bring U.S. debt under control.

Clinton noted that the 2011 budget request for the State Department and the U.S. Agency for International Development represented a $4.9 billion increase over 2010, most of which would fund work in the "frontline states" of Iraq, Pakistan and Afghanistan.

"We are now assuming so many of the post-conflict responsibilities, and that is the bulk of our increase," Clinton said.

Republican Representative Ron Paul, who has helped lead congressional efforts to rein in the deficit, pressed Clinton on U.S. diplomatic spending including a plan for an expensive new U.S. embassy building in London

Clinton said the costs of the proposed modernist glass cube would be offset by savings on rent for satellite offices that embassy personnel must now use. "I believe I can make the case that we're not asking for new money," she said.

Source - Reuters

Together

2010-02-20T20:51:00.002+05:30

The Empathic Civilization

2010-02-20T20:33:00.003+05:30

Q - What is the premise of The Empathic Civilization?

My sense is that we're nearing an endgame for the modern age. I think we had two singular events in the last 18 months that signal the end. First, in July 2008 the price of oil hit $147/barrel. Food riots broke out in 30 countries, the price of basic items shot up and purchasing power plummeted. That was the earthquake; the market crash 60 days later was the aftershock. It signaled the beginning of the endgame of a great industrial era based on fossil fuels. The second event, in December 2009, was the breakdown in Copenhagen, when world leaders tried to deal with our entropy problem and failed.

That's the context of the book. Why couldn't our world leaders anticipate or respond to the global meltdown of the industrial revolution? And why can't they deal with climate change when scientists have been telling us that it may be the greatest threat our species has ever faced?

Q - What do you think the problem is?

My sense is that the failure runs very deep. The problem is that those leaders are using 18th century Enlightenment ideas to address 20th century challenges. I advise a number of heads of state in Europe and over and over again I see how these old ideas about human nature and the meaning of life continue to cloak public policy. The Enlightenment view is that human beings are rational, detached agents that pursue our own self-interests and our nation states reflect that view. How are we going to address the needs of 7 billion people and heal the biosphere if we really are dispassionate, disinterested agents pursuing our own self-interest?

A lot of interesting new discoveries in evolutionary biology, neuroscience, child development, anthropology and more suggest that human nature might not be what Enlightenment philosophers suggested. For instance, the discovery of mirror neurons suggests that we are not wired for autonomy or utility but for empathic distress; we are a social species.

Q - If we begin to change our ideas about human nature and, as you say in the book, view history through an empathic lens, what new things do we discover?

We can see how consciousness, which is wired for empathy and social engagement, changes over history. Obviously consciousness has changed over history--a Paleolithic hunter is wired differently than a medieval serf or a modern human. My belief is that when energy and communications revolutions converge it creates new economic eras and changes consciousness dramatically by shifting our temporal and spatial boundaries, causing empathy to expand.

For instance, wherever there were hydraulic agricultural societies based on large-scale irrigation systems, humans independently created writing. That's fascinating to me. Writing made it possible to manage a complex energy regime. It also changed consciousness--transforming the mythological consciousness of oral cultures into a theological one. In the process, empathy evolves. The range of oral communication is limited--you can't extend empathy beyond kin and blood ties. With script you could empathize further with associational ties, you broaden your frame of reference.

In the 19th century the printing press communications revolution converged with new energies: coal and steam. This led to the introduction of public schools and mass literacy across Europe and America. Theological consciousness became ideological consciousness. The same shift occurred in the 20th century with the Second Industrial Revolution, the electronics revolution, which gave rise to psychological consciousness.

Each convergence of energy and communications technology changed our consciousness, extended our social networks and in turn expanded our empathy.

Q - But all of that happens at the expense of the environment?

It's the conundrum of history that these more complex civilizations that use greater energy flow-through allow us to bring more people together, but they create more entropy in the process. If we are going to ward off the extreme dangers posed by climate change we need to find a way to increase empathy while decreasing entropy. The question is, how do you do that? How do you break the paradox?

Q - In the book you argue that we can break the paradox by shifting from geopolitical consciousness to biosphere consciousness.

We need to implement reglobalization from the bottom-up in order to achieve a more sustainable global economy. Geopolitics is an extension of the Enlightenment view of human nature, the idea that we pursue our utilitarian pleasures and individual self-interests. In geopolitics, the nation-state becomes a macro view of that. Nations deal with nations by being rational, detached and calculating, pursuing self-interests, excercising power and acquiring more capital and wealth. That's why Copenhagen failed. The world leaders weren't thinking biosphere, they were thinking geopolitics. Everyone was looking out for their nation's self-interest.

What we need to do is attempt biosphere politics. Governing units are going to change--I think there's going to be a shift toward continentalization. The EU is a first attempt at organizing a new frame of reference across continents, but it's a transitional governing form. The Asian Union, African Union and South American Union are in their early stages.

Q - Why "re-globalization"?

The global economy didn't work in its first stage. And that's because the economics and the technology raced ahead of our changing consciousness. A global economy requires social trust; you need biosphere consciousness, not geopolitics. You're never going to get globalization until empathy extends to the whole species.

As I said in the book, I think we need to rethink economic policies and make thermodynamics the basis of economic theory. The price of energy is embedded in every product we make. At the same time, the effects of climate change are already eroding economies in many parts of the world as extreme weather events destroy ecosystems and agricultural infrastructure. The Third Industrial Revolution will be driven in part by the need to mitigate the entropic impact of the first two industrial revolutions.

A lot of business people would say that you can't be empathic in the market. But the market is a secondary institution--it's an extension of culture. The real invisible hand of the market is trust, which is the result of empathic engagement. The only way you can have a market is if you have a shared narrative. The market is not a utilitarian frame of reference, it only exists by the social trust that allows people to engage in anonymous settings and believe that their engagements will be honored. When that trust fails, markets collapse and that's what is happening now.

Q - What will the Third Industrial Revolution look like? When will it happen?

I think we're on the verge. I had the privilege to help design the European Union's Third Industrial Revolution economic stability game plan, which was endorsed by the European Parliament in 2007. What we noticed is that in the last 10 or 15 years we've had a very powerful communication revolution with the internet, and the key word is that it's distributed. What's beginning to happen now is that the distributed ICT [information and communication technologies] revolution is beginning to converge with a new energy regime: distributed renewable energy. When they do converge, it's likely to change consciousness once again.

Distributed ICT will organize distributed energies. Renewables like wind, solar, geothermal and biomass are found in some proportion everywhere, in people's backyards. As people begin to harvest these renewable energies they can share electricity peer-to-peer across an internet-like smart energy grid that extends across nations and even continents. We see buildings as the new power plants. Buildings are the number one source of C02 emmissions, but they might also be the solution if they can harness renewables to produce their own energy on site. People will also need new energy storage technologies like hydrogen. The EU has committed 8 billion Euros to hydrogen storage technologies. Those technologies will give us dependable distributed energy.

I founded the Third Industrial Revolution Global CEO Business Roundtable, which is comprised of 100 leading companies from renewable energy to utilities to architectural firms. We're starting to lay out plans.

Q - How will the Third Industrial Revolution change our consciousness?

It extends it in a distributed fashion, with everyone taking responsibility for their swath of the biosphere and then sharing their energy across continents. We have to take responsibility where we are but we have to share across the world for it to work. That would allow us to think biosphere politics not geopolitics and extend empathy in that regard. That gives us a possibility of breaking the empathy/entropy paradox. Will we actually do it? If I were a betting person...well, I wouldn't even want to make a bet. But it's our best shot.

It's a tough challenge. What I'm saying is so difficult. But what
encourages me is the empathy we are already seeing resulting from technology.
After the Iranian elections a young college student was gunned down in the street by an Iranian militiaman for protesting, and someone took a cell phone video. The world instantly empathized. Then there was the earthquake in Haiti. There was an immediate response. That's new--we're thinking as a human race. We still have our xenophobia and our prejudices but I think we're catching a glimpse of something new, and we're going to have to if the possibility of our own extinction depends on it.

I think the question hasn't been asked yet, what is the point of this exercise in connecting the human race in this way? Up to now, most people's reasons for supporting it is more information, quicker information, better entertainment, improved commerce and trade, etc. What I'm suggesting is that that is not enough. When Henry David Thoreau saw the telegraph, he said, "Well, now Maine can talk to Texas, but does Maine really have anything to say to Texas?" If we can't have a global discussion of the transcendent purpose of this connectivity, I don't think entertainment and information are going to be enough to justify the Third Industrial revolution. We have to think deeper, to think as a human family, to take responsibility for the biosphere and our fellow creatures.

If human nature is Homo empathicus, as scientists are suggesting, if that's our true nature, then we can begin to create new institutions--parenting styles, education, business models--that reflect our core nature. Then I can see how this Third Industrial Revolution will happen.

Q - Perhaps we are too cynical for these ideas. Do some people see an empathic global society as an idealistic dream?

If you know my past work you know I'm not utopian. But empathy isn't about utopia. It's about knowing how damn tough it is to be alive. We empathize with others because we smell the whiff of death in their vulnerabilities and so we celebrate their life. There's no such thing as empathy in heaven because there's no mortality, no suffering. Empathy is about encouraging another person's struggle to be. It's a tough feeling to have. In utopia there's no struggle, there's nothing to empathize with. Empathy is more than just, "I feel your pain". We root for each other's struggle to live out this mystery of life.

Q - I was struck by the vast number of fields you explore in your book. Do you think there's a need for more cross-disciplinary scholarship?

Absolutely. Education is a total mess. Our educational model is based on Enlightenment ideas and progressive ideas of the 20th century--if human nature is autonomous, calculating and self-interested and if the market is the way we fulfill those interests, our education reflects that. We are taught that knowledge is a personal asset to achieve one's aims in the world--knowledge is power. If you share your knowledge, that's cheating.

It limits us to a more vocational idea of what life is about. We all become little drones. And as we go through education it grows narrower and narrower. But what's happening with the internet is that young folks are growing up believing that information is something you share, not hoard. That thinking is a collaborative exercise, not an autonomous one, and that spaces ought to be commons. That's completely alien to the Enlightenment ideas I grew up on.

I'm a big fan of interdisciplinary and collaborative teaching. If you're studying evolutionary biology, let a philosopher come in and talk about the way our concept of nature has changed over history. Allow young people to have so many frames of reference so they can be more open and more synthetic in their thinking. If we are a social animal and we live by our stories, then our stories are only made richer with more points of view.

Sharing knowledge is considered cheating, yet collaboration has been shown to improve critical thinking if it's done in a disciplined way. There was a doctor at UCL medical college in the 1950s who realized that if he brought all of his interns to a patient's bedside at the same time, the collaborative response got to a diagnosis quicker than if only one intern was there.

Education has to be completely reformed to reflect the new era of distributed knowledge. I'm currently in deep private discussions with some major educational associations in the US who want to put together a team of people to begin rethinking this.

We still don't know how to grade people in a collaborative model. But if we're moving from Homo sapien to Homo empathicus, we have to rethink all of this.

Q - You've also said we need to rethink the scientific method.

The scientific method reflects Enlightenment thinking. You have to be detached, rational and value-free; you can't be connected or use empathic imagination. But we're seeing that you need both. If the scientific method is the way kids learn, how do they grow up to form an empathic connection to the world?

There are scientists who are practicing a different kind of science, a not-too-close, not-too-far empathic engagement. Jane Goodall is a great example. I told Jane, what you did was so amazing because it's a new approach to science, and she said she had never thought about it that way. She began to empathize with the chimpanzees she was studying, imagining their experience as if it were her own. What she learned about chimpanzee behaviour was massively more than what people had previously learned by studying them in a completely detached way.

Goethe understood this a couple hundred years ago--he disagreed with Francis Bacon's approach. He argued that we understand nature by participating, not by standing back and observing with dispassionate neutrality. Especially in the ecological sciences and climate science, you need to be engaged, interactive and interdisciplinary, because you're dealing with systems thinking.

Empathic science is a good balance between the traditional scientific method on the one hand and something that wouldn't be science at all on the other. Empathy requires that you not be too close or too far away. You have to be close enough to feel the experiences biologically as if they are your own but far enough to use your cognitive abilities to rationally respond.

I hope scholars will take these ideas much further. I'm hoping a younger generation can do that.

Q - I found it interesting that you correlate the expansion of empathy throughout human history with a growing sense of self. I would naively think that they would have an inverse relationship.

Empathy goes hand-in-hand with selfhood; if you know you're a self you can see yourself in relation to the other. People hear "empathy" and they think socialism or something--that's completely missing the point. Increasing individuation and selfhood is critical to increasing empathy.

We are wired for empathic distress. If you put a bunch of babies in a nursery and one starts crying, the others start crying but they don't know why. Real empathy - empathic expression--doesn't occur until children develop a sense of self and recognize themselves as being separate from others; when they can recognize themselves in a mirror, for instance. When kids learn about birth and death they think, uh oh, now I know I have a history, I'm finite. Realizing their own vulnerability allows them to feel another's vulnerability. The more advanced your selfhood, the more you can feel another's fragility and empathize. Empathy is the invisible social glue that allows a complex individuated society to remain integrated.

Q - You said that people hear "empathy" and think "socialism". How does capitalism survive an empathic society?

Market capitalism will be transformed into "distributed capitalism". Just as the internet led to the democratization of information, the Third Industrial Revolution will lead to the democratization of energy. The required changes to infrastructure are going to create massive amounts of jobs and a whole new economy. But when you have peer-to-peer sharing of energy across an intelligent grid system, you no longer have the top-down, centralized economic system. Distributed energy requires distributed capitalism, and that relies on the opposite view of human nature than that of market capitalism. But the politics isn't right or left--its centralized, top-down versus collaborative commons. You don't hear people say, I'm going onto a social networking space because I'm a socialist--it's just a different frame of reference.

Q - At over 600 pages, The Empathic Civilization is a long book! How long did it take you to write it?

I didn't mean for it to be a long book, but my wife says the older I get, the longer my books get. It took over five years. I got so deep into the research; I read about 400 books and maybe 3,000 articles. The actual writing took about a year and a half. My wife has made me promise no more books!

Source - New Scientist

Cinnamon

2010-02-20T07:38:00.002+05:30

USA = Waiting To Be Third World

2010-02-18T18:47:00.002+05:30

In the course of writing last week’s Archdruid Report post, I belatedly realized that there’s a very simple way to talk about the scope of the brutal economic contraction now sweeping through American society – a way, furthermore, that might just be able to sidestep both the obsessive belief in progress and the equally obsessive fascination with apocalyptic fantasy that, between them, make up much of what passes for thinking about the future these days. It’s to point out that, over the next decade or so, the United States is going to finish the process of becoming a Third World country.

I say “finish the process,” because we are already most of the way there. What distinguishes the Third World from the privileged industrial minority of the world’s nations? Third World nations import most of their manufactured goods from abroad, while exporting mostly raw materials; that’s been true of the United States for decades now. Third World economies have inadequate domestic capital, and are dependent on loans from abroad; that’s been true of the United States for just about as long. Third World societies are economically burdened by severe problems with public health; the United States ranks dead last for life expectancy among industrial nations, and its rates of infant mortality are on a par with those in Indonesia, so that’s covered. Third World nation are very often governed by kleptocracies – well, let’s not even go there, shall we?

There are, in fact, precisely two things left that differentiate the United States from any other large, overpopulated, impoverished Third World nation. The first is that the average standard of living here, measured either in money or in terms of energy and resource consumption, stands well above Third World levels – in fact, it’s well above the levels of most industrial nations. The second is that the United States has the world’s most expensive and technologically complex military. Those two factors are closely related, and understanding their relationship is crucial in making sense of the end of the “American century” and the decline of the United States to Third World status.

The US has the world’s most expensive military because, just now, it has the world’s largest empire. Now of course it’s not polite to talk about that in precisely those terms, but let’s be frank – the US does not keep its troops garrisoned in more than a hundred countries around the world for the sake of their health, you know. That empire functions, as empires always do, as a way of tilting the economic relationships between nations in a way that pumps wealth out of the rest of the world and into the coffers of the imperial nation. It may never have occurred to you to wonder why it is that the 5% of the world’s population who live in the US get to use around a third of the world’s production of natural resources and industrial products – certainly it never seems to occur to most Americans to wonder about that – but the economics of empire are the reason.

A century ago, in 1910, it was Britain that had the global empire, the worldwide garrisons, and the torrents of wealth flowing from around the world to boost the British standard of living at the expense of everyone else’s. A century from now, in 2110, if the technology to maintain any kind of worldwide empire still exists – and it can be done with wooden sailing ships and crude cannon, remember; Spain managed that feat very effectively in its day – somebody else will be in that position. It won’t be America, because empire is the methamphetamine of nations; in the short term, the effects feel great, but in the long term they’re very often lethal. Britain managed to walk away from its empire without total catastrophe because the United States was ready, willing, and able to take over, and give Britain a place in the inner circle of US allies into the bargain; most other nations have paid for their imperial overshoot with a century or two of economic collapse, political chaos, and social disintegration.

That’s the corner into which the United States is backing itself right now. The flood of lightly disguised tribute from overseas, while it made Americans fantastically wealthy by the standards of the rest of the world, also gutted America’s domestic economy – the same economic imbalances that funnel wealth here also make it nearly impossible to produce goods or provide services at home at a cost that can compete with overseas producers – and created a culture of entitlement that includes all classes from the bottom of the social pyramid right up to the top. As always happens, in turn, the benefits of empire are failing to keep pace with its rapidly rising costs, and in addition, rising demands for imperial largesse from all parts of society are drawing down an increasingly straitened supply of wealth. Meanwhile other nations with imperial ambitions are circling like sharks; the wisest among them know that time is on their side, and that any additional burden that can be loaded onto a drowning empire will hasten the day when it goes under for the third time and they can close for the kill.

This view of the world situation is not one that you’ll find in the cultural mainstream, or for that matter any of its self-proclaimed alternatives. The contrast with a century ago is instructive. A great many people in late imperial Britain knew perfectly well that the empire on which the sun famously never set – critics suggested that this was because God Himself wouldn’t trust an Englishman in the dark – had had its day and was itself setting; the lines of Rudyard Kipling’s poem “Recessional” –

Far-called, our navies melt away;
On dune and headland sinks the fire.
Lo! All our pomp of yesterday
Is one with Nineveh and Tyre.

– simply put in powerful imagery what many were thinking at that time. You won’t find the same sort of historical sense nowadays, though, and I suspect the role of the myth of progress as the secular religion of the modern world has a lot to do with it. In 1910, the concept of historical decline was on a great many minds; these days you’ll hardly hear it mentioned, because the belief in history as perpetual progress has become all the more deeply entrenched as the foundations that made the progress of recent centuries possible have rotted away.

The resulting insistence on seeing all social changes through onward-and-upward colored spectacles has imposed huge distortions on our perceptions of recent events. One good example is the rise and fall of the so-called “global economy” in recent decades. Its proponents portrayed it as the triumphant wave of a Utopian future that would enable everybody to live like middle-class Americans; its critics portrayed it as the equally triumphant metastasis of a monolithic corporate power out to enslave the world. Very few people saw it as the desperate gambit of a faltering imperial society that could no longer even afford to run its own economy, and was forced to outsource even its most basic economic functions to other countries. Nonetheless, this is what it has turned out to be, and it had the predictable result that several other nations used the influx of capital and technology to build their own industrial sectors, bide their time, and then enter the market themselves and outcompete the very companies and countries that gave them a foot in the door.

More broadly, it seems to have escaped the attention of a great many observers that the day of the multinational corporations is drawing to an end. The struggle over Russia’s energy resources was the decisive battle there, and when Putin crushed the Western-funded oligarchs and retook control of his country’s energy supply, that battle was settled with a typically Russian sense of drama. The elegance with which China has turned international trade law against its putative beneficiaries is in its own way just as typical; a flurry of corporations owned by the Chinese government have spread operations throughout the world, using the mechanisms of global trade to lay the foundations of a future Chinese global empire, while the Chinese government efficiently stonewalled any further trade negotiations that would have put Chinese economic interests at home in jeopardy. More recently, China has begun buying sizable stakes in the multinational corporations that so many well-meaning people in the West once thought would reduce the world to vassalage; the day when ExxonMobil is a wholly-owned subsidiary of CNOOC may be closer than it looks.

The same biases that make such global changes invisible have impacts at least as sweeping here at home. Faith in progress, coupled with the tribute economy’s culture of entitlement I mentioned earlier, have made it nearly impossible for anybody in American public life to talk about the hard fact that America can no longer afford most of the social habits it adopted during its age of empire. It’s almost impossible to think of an aspect of daily life in America today that will not change drastically as a result. We will have to give up the notion, for example, that most Americans ought to go to college and get a “meaningful and fulfilling” job of the sort that can be done sitting at a desk. We will have to abandon the idea that it makes any sense to spend a quarter of a million dollars giving an elderly person with an incurable illness six more months of life. We will have to relearn the old distinction between the deserving poor – those who are willing to work and simply need the opportunity, or who have fallen into destitution through circumstances outside their control – and those who are simply trying to game the system. The great majority of us will get to find out what it’s like to make things instead of buying them, even when that means a sharp reduction in quality; to skip meals, or make do with very little, because the money to pay for anything more simply isn’t there; to treat serious illnesses at home because care from a doctor costs too much; I could go on for paragraphs, but I trust you get the idea.

All these changes, it needs to be said, would be inevitable at this point even if the industrial world depended on renewable resources and had a stable, sustainable relationship with the planetary biosphere that supports all our lives. The United States has played its recent hands in the game of empire very badly indeed, and responded to each loss by doubling down and raising the stakes even higher. If, as a growing number of perceptive commentators have suggested, the US government has been reduced to borrowing money from itself in order to pay its bills – the theme of last week’s Archdruid Report post – the end of that road is in sight. It’s hard to see this as anything but a desperation move on the part of a political and economic establishment that sees no other options for short-term survival and thinks it has nothing left to lose. It’s the exact equivalent of paying household bills by running up debt on credit cards; it can buy a little time, but at the cost of making bankruptcy a certainty once that time runs out.

The global context of the crisis, though, also needs to be kept in mind. The industrial world does not depend on renewable resources, and its relationship with the biosphere is leading it straight down the well-worn path of overshoot and collapse; the endgame of American empire, while it would be taking place anyway, has the additional factor of the limits to growth in play. In an alternate world where energy and resource flows could be counted on to remain stable for the foreseeable future, it’s quite possible that one of the rising powers might offer America the same devil’s bargain we offered Britain in 1942, and prop up the husk of our empire just long enough to take it over for themselves.

As it is, it cannot have escaped the attention of any other nation on the planet that something like a quarter of the world’s dwindling resource production could be made available for other countries, if only the United States were to lose the ability to purchase energy and other resources from outside its own borders. It’s not hard to think of nations that would be in a position to profit mightily from such a readjustment, and nothing so unseemly as a global war would necessarily be required to make it happen; to name only one possibility, it’s by no means unthinkable that the United States, having manufactured “color revolutions” to order in countries around the world, might turn out to be vulnerable to the same sort of well-organized mob action here at home.

Exactly how things will play out in the months and years to come is anybody’s guess. One of the consequences of America’s descent into Third World status, though, is that a great many of us may have scant leisure to contemplate global and national issues amid the struggle to keep food on the table and a roof over our heads. In the long run, this shift in focus may have certain advantages; I have argued in previous posts that those nations that undergo the deindustrial transition soonest, and are thus forced to learn how to get by on the very modest energy and resource flows available in the absence of fossil fuels, may find that this gives them a head start in making changes that everyone else will have to make in due time. Still, making the most of those advantages will require a very different approach to economics, among other things, than most of us have pursued (or imagined pursuing) so far.

Source - Archdruid Report

Bliss

2010-02-07T17:52:00.002+05:30

China or USA

2010-02-07T17:36:00.001+05:30

Silly me. Here I had thought that world leaders would want to keep their nations from collapsing. They must be working hard to prevent currency collapse, financial system collapse, food system collapse, social collapse, environmental collapse, and the onset of general, overwhelming misery—right? But no, that's not what the evidence suggests. Increasingly I am forced to conclude that the object of the game that world leaders are actually playing is not to avoid collapse; it's simply to postpone it a while so as to be the last nation to go down, so yours can have the chance to pick the others' carcasses before it meets the same fate.

I know, that sounds unbearably cynical. And in fact it may not accurately describe the conscious attitudes of leaders of some smaller nations. But for the U.S. and China, arguably the countries most likely to lead the way for the rest of the world, actions speak louder than words. (Mental health advisory: readers with a low tolerance for bad news should turn back now; there are lots of cheerier articles on the Internet and this might be a good time to find and enjoy one.)

For these two nations, avoiding collapse would require solving a range of enormous problems, of which at least four are non-negotiable: climate change; peak fossil fuels (in effect, stagnating and, soon, declining energy supplies); the inherent instability of growth-based financial systems; and the vulnerability of food systems to factors like fresh water scarcity and soil erosion (in addition to global warming and fuel scarcity). If they fail to address any one of these, societal collapse is inevitable—in a few decades certainly, but perhaps in just the next few years.

So how are our contestants doing? There's not much to report on the climate score—just vague promises for future action. So their apparent strategy in this case is to delay (not to delay the impacts, mind you, but to delay efforts to address the problem).

Likewise, there is little positive action occurring regarding food systems: the assumption appears to be that conventional industrial agriculture—which is responsible for most of the global food system's enormous and growing vulnerabilities—will somehow shoulder the task of feeding seven to nine billion humans. We just need to continue with what we are already doing, but on a larger scale and using more gene-engineered crop varieties.

Officially, peak energy is not even a concern, so evidently the strategy being adopted here is denial. We'll see how that works out.

How about the financial mess? Here the U.S. and China are in situations so different that a more extended discussion seems justified.

China Surges to the Lead!

The U.S. is in debt up to its eyeballs and has mortgaged the paychecks of every generation approximately until hell freezes over in order to bail out its "too-big-to-fail" banks. In contrast, China has piles of cash (resulting from its enormous trade surpluses) and has bought a mountain of U.S. debt in order to keep its main customer's currency from losing value. It would seem that, in this department, one nation is set to flag while the other is poised to leap into first place as world economic superpower.

And that happens to be the conventional wisdom on the subject. It's not hard to find commentators who say the United States is a has-been for a variety of reasons. In addition to its huge debt burden, the U.S. also suffers from a shrinking manufacturing base, a big trade deficit, eroding quality of education, and a foreign policy that serves the interests of arms manufacturers while undermining the long-term interests of the nation. Regarding the last of these items, a 2006 World Public Opinion poll showed large majorities in four leading ally nations (Egypt, Morocco, Pakistan, and Indonesia), together accounting for a third of the Muslim world's population, believe the U.S. is determined to destroy or undermine Islam. Within those countries, most people surveyed support attacks on American targets. And it just so happens that most of the world's future oil supplies will be coming from Muslim nations. Brilliant.

By contrast, China is enjoying springtime on amphetamines. It now has the biggest car market in the world. And, according to Stuart Staniford in a recent fact-filled article, "if present trends continue, the Chinese expressway system will likely grow larger than the U.S. interstate highway system within the next couple of years, and Chinese car ownership will exceed U.S. car ownership by somewhere in the neighborhood of 2017." As of 2010 China is the leading producer of hydroelectric and solar power and by 2011 will be the top producer of wind power. China's smart grid investments dwarf those of the U.S. by 200 to one. The Chinese are also investing heavily in nuclear energy. Staniford goes on: "Oversimplifying greatly, it's as though the U.S. borrowed a pile of money from China in order to fight a war to free up oil supply in Iraq in order that China could become the greatest industrial power the world has ever seen."

China's foreign policy consists largely of buying friends by purchasing rights to oil, gas, coal, and other resources (in Canada, Australia, Venezuela, Iraq, Kazakhstan, and throughout Africa), while the U.S. spends money it doesn't have rooting out bad guys and making more enemies in the process.

In an October, 2009 lecture, George Soros showed refreshing candor about the seriousness of the continuing global financial crisis: "What differentiated [the recent economic crisis] from the Great Depression is that this time the financial system was not allowed to collapse, but was put on artificial life support. In fact [however], the magnitude of the credit and leverage problem we have today is even greater than the 1930s." Soros then went on to discuss the relative positions of the U.S. and China:

In the short term, all countries were negatively affected. But in the long term, there will be winners and losers. . . . To put it bluntly, the U.S. stands to lose the most, and China is poised to emerge as the greatest winner. . . . China has been the primary beneficiary of globalization, and it has been largely insulated from the financial crisis. For the West, and the U.S. in particular, the crisis was an internally-generated event [that] led to the collapse of the financial system. For China, it was an external shock [that] has hurt exports, but left the financial, political, and economic system unscathed.

China Stumbles!

But remember: without solutions to climate change, peak energy, and the looming food crisis, winning the financial contest is only temporary solace. Consider just the energy conundrum: China may be building nukes and windmills, but there's no way it can maintain 8 percent annual growth for long with flat or declining energy from coal. China and India, between them, are currently planning to build 800 new coal-fired power plants by 2020. Where will the coal come from? Both countries are already experiencing domestic production shortfalls and are starting to import the fuel. But coal-exporting countries will be unable to keep up with their growing combined demand.

Moreover, there is a school of thought that says China's apparently unstoppable economic miracle is a bubble waiting to burst. Beijing's housing market is overheated, like that of Las Vegas circa 2006. Last year, the Chinese economy enjoyed 9 percent GDP growth—on paper. But in order to achieve that goal, the government and banks had to loan out 30 percent of China's GDP (the rate of growth in loans accelerated during the latter part of the year; at year-end rates, banks were on track to loan out an amount equal to the nation's entire GDP in 2010). In any case, much of that growth probably occurred through speculation on real estate and questionable stocks.

Generally, China is at a Wild West stage of economic development: it is a collection of powerful local capitalist power bases unaccountable to anyone, all jockeying to create and inflate assets and credit. While the central government has recently exerted control over the banks, its ability to halt regional Ponzi schemes is still limited.

In January the Chinese banking regulatory commission attempted to rein in lending in order to slow the rapid increase in real estate and stock market values. (On the other hand, during the same month, China's cabinet agreed to permit margin trading and short selling of stocks and to launch a stock futures index.) Significantly, there is evidence that China's central bank's attempts to harmlessly deflate the housing and stock market bubbles may be going badly. The sudden suspension in lending has, according to Joe Weisenthal in Business Insider, "caught importers, along with many other companies, by surprise and could cause turbulence in China's import orders. Letters of credit (LoC) suddenly became unavailable, despite previous agreements. We believe that this will inevitably lead to delays or cancellations in China's imports. Import orders for commodities and machineries could be affected most." Translation: the government was faced with the options of letting a rapidly growing bubble burst, taking the economy down; or deliberately deflating the bubble, risking taking the economy down by another route. The central bank chose the latter, and the risked takedown may be unfolding.

Meanwhile Google and the Obama Administration have been exerting external pressure on China to relax its censorship of electronic communications—moves that some see as reducing the central government's options for controlling both information flow and the economy.

In a recent op-ed, New York Times columnist Tom Friedman countered worries about a bursting of the China bubble with a robust display of confidence in Beijing's unstoppable expansionary momentum. Given Friedman's record (remember his columns in 2003 extolling the benefits that would flow to America from an invasion of Iraq?), this alone should be cause to doubt whether the Chinese locomotive can stay on its tracks much longer.

What Does It Mean to "Win"?

In his book Reinventing Collapse: The Soviet Example and American Prospects, Dmitry Orlov discusses the "collapse gap" between the United States and the old Soviet Union: the latter, he argues, was in effect much better prepared for economic crisis and the fall of its central government; when the U.S. eventually goes the way of the U.S.S.R., the pain and suffering of its citizens will be much greater. (I can't adequately summarize Orlov's evidence and reasoning here, but they are persuasive; if you haven't read the book, do yourself a favor.)

So: How is the U.S. doing today in terms of collapse preparedness as compared to China?

After six decades of nearly uninterrupted economic growth, Americans have developed unrealistic expectations about the future. They are urbanized consumers whose manufacturing capability has shriveled and whose practical survival skills are in most cases vestigial. The Chinese, in contrast, have less of a steep fall ahead of them. Most still dwell in the countryside, and many who live in the cities are only one generation removed from subsistence agriculture and can still draw on their own, or their parents', practical skills learned during decades of poverty and immersion in a traditional farming culture.

Both nations face fierce political challenges. In the U.S., the central government has reached nearly complete paralysis: it is evidently incapable of solving even relatively minor problems, and confidence in it among the citizenry has largely evaporated. Political leaders have succeeded in polarizing the people geographically with "hot-button" issues, few of which have anything to do with the factors currently undermining the nation's ability to survive. The Chinese central government appears far more capable of acting decisively and strategically, but it is confronted with nasty facts of geography and history: there is an extreme and growing economic and social division between the wealthy coastal cities and the poor, rural interior; and a demographic schism between those 40 years old or younger who have high economic expectations, and the older generation who grew up under Mao, with an ethic of collectivism and self-sacrifice. The young, especially, have accepted a trade-off between civil freedoms and economic prosperity. If the latter is not delivered, there will be shrill demands for the former. These divisions are so deep and profound that they could tear society apart if expectations are dashed—and the leaders know this.

Thus, in the event of collapse, both nations face the possibility of a breakdown in their political systems, entailing widespread violence (uprisings and crackdowns).

China still maintains a crucial advantage in one key area: its food system. Far more of its citizens still grow food, even taking into account recent trends toward rapid urbanization (in the U.S., full-time farmers make up only about two percent of the population and the average farmer is approaching retirement age). This is not to say that China will have the capacity to feed all its people; it is already moving in the direction of being a major net food importer. Meanwhile, the U.S. remains a significant food exporter. The key difference has to do with the resiliency of the two nations' respective food systems: that of the United States is more centralized, more highly fuel dependent, and therefore probably more vulnerable.

The Geopolitics of Collapse

It's easy to see the advantage of collapse preparedness for the citizenry—with better preparation, more will survive. But does a higher survival rate during and after collapse translate to some sort of geopolitical advantage?

The process of collapse will be determined by many factors, some hard to predict, and so it is difficult to know the size or scope of the political power structure that might re-emerge in either country. It's possible that one nation, or both, could devolve into smaller political units squabbling among themselves and unable to engage much in global jockeying for resources. All new political units emerging within the present territories of China or the U.S. would be immediately beset with enormous practical problems, including poverty, hunger, environmental disasters, and mass migrations.

Presumably some potent weaponry from the age of global warfare would remain intact and usable, so it is possible in principle that one or another of these smaller political entities could assert itself on the world stage as a short-lived, bargain-basement empire of limited geographic scope. But even in that case "winning" the collapse race would be small comfort.

The possibility of armed conflict between the two powers prior to mutual collapse is not to be entirely excluded if, for example, U.S. efforts to contain Iran's nuclear ambitions were to set off a deadly chain reaction of attacks and counter-attacks possibly involving Israel, with world powers being forced to choose sides; or if the U.S. were to persist in arming Taiwan. But neither the U.S. nor China wants a direct mutual military confrontation, and both nations are highly motivated to avoid one. Thus all-out nuclear war—still the worst-case imaginable scenario for homo sapiens and planet Earth—seems thankfully unlikely, though in the few decades ahead the use of some of these weapons, on some occasions, by one nation or another, is probable.

Trade wars are another matter, and we might even see one this year, according to Michael Pettis at Financial Times, who notes that

. . . trade imbalances are more necessary than ever to justify increased investment in surplus countries [i.e., China], but rising unemployment makes them politically and economically unacceptable in deficit countries [i.e., the U.S.]. Rising savings in the U.S. will collide with stubbornly high savings in China. Unless a long-term solution is jointly worked out immediately, trade conflict will worsen and it will become increasingly hard to reverse offensive policies. Most importantly, if deficit countries demand structural change faster than surplus countries can manage, we will almost certainly finish with a nasty trade dispute that will . . . poison relationships for years.

How likely is the prospect for the last nation standing to be able to, as I put it in the first paragraph above, "pick the carcasses" of its competitors? Such a scenario presupposes that one nation will be able to stay on its feet for at least a few years after others fall. But this may not be possible. Recall the prophetic words of Joseph Tainter in The Collapse of Complex Societies (1988):

"A nation today can no longer unilaterally collapse, for if any national government disintegrates, its population and territory will be absorbed by some other [or bailed out by international agencies]. . . . Collapse, if and when it comes again, will this time be global. No longer can any individual nation collapse."

When the U.S.S.R. crashed, the U.S. and various multinational corporations were able to sweep in and gobble up some of the treasure left lying around. One example: U.S. nuclear power plants have for many years been using uranium fuel cannibalized from old Soviet missile warheads. Soon, international institutions such as the World Bank and IMF helped organize new financial structures for Russia, Ukraine, Belarus, Lithuania, Estonia, and the other nations born from Soviet political and economic disintegration, so as to limit and reverse the process of social disintegration that had already passed beyond its early stages.

But now the game has changed. A collapse of the U.S. would leave China devastated. Not only would Beijing lose its main customer, but the hundreds of billions of dollars' worth of treasury notes it has accumulated would be rendered worthless. If China were internally stable, such impacts could be absorbed with difficulty. But in light of China's own simmering social and financial predicaments, a U.S. collapse would almost certainly be enough to tip Beijing's economy into a tailspin, resulting in both social and political crises.

A collapse of China would similarly devastate the U.S. Obviously, the loss of a source of cheap consumer products would discomfit WalMart shoppers, but the shock soon would go much deeper. The Treasury would lose its main foreign buyer of government debt, which means that the Fed would be forced to step in and monetize that debt (in common parlance, "turn on the printing presses"), undermining the dollar's value. The result: a hyperinflationary economic crash. Such a crash is probably inevitable at some point anyway, but a collapse of the Chinese system would hasten and worsen it.

In neither instance would international institutions be capable of preventing substantial social and political fall-out. The last nation standing would not stand for long. We have reached the stage where, as Tainter says, "World civilization will disintegrate as a whole."

The Transition Marathon

Okay, so there is no serious effort on the part of U.S. or Chinese leaders to avoid collapse in the long run (say, over the next 10 to 20 years). Perhaps this is because they have concluded that it is impossible to do so—there are just too many trends leading in the same direction, and actually dealing with any of those trends head-on would entail huge, immediate political risks. In reality, however, it is much more likely that they simply refuse seriously to think about these trends and their implications, because they do have another option—to postpone collapse through deficit spending, bailouts, and more financial bubbles, while enacting their parts in a climate-policy kabuki play and engaging in resource geopolitics. This way blame will at least fall on the next set of leaders. Postponing collapse is itself a big job, enough so as to take all of one's attention away from having to contemplate the awfulness and inevitability of what is being postponed.

Do these short-term efforts in any way reduce the risk of dissolution? Hardly. In fact, the longer the reckoning is delayed, the worse it will be.

What would make more sense than just trying to put off the inevitable is quite simply to build resilience throughout society, re-localizing basic social systems involving food, manufacture, and finance. There is no need to rehearse the existing discourse about this strategy: readers who are not familiar with it can find plenty of useful pointers at www.transitiontowns.org, or in the books and articles of authors such as Rob Hopkins, Albert Bates, David Holmgren, Pat Murphy, and Sharon Astyk (and in some of my own writings, including Museletter #192).

It is understandably hard for national politicians to think along those lines. Building societal resilience means disregarding the dictates of economic efficiency; it means systematically reducing the power of the central government and national/global commercial institutions (banks and corporations). It also means questioning the central dogma of our modern world: the efficacy and possibility of unending economic growth.

So if the best outcome lies in a strategy of resilience and re-localization, and our national leaders can't even contemplate such a strategy, that means those leaders are, in one sense at least, irrelevant to our future.

Some blog readers are so in tune with this line of thinking that they no longer see any point in paying attention to the global scene. They may even think this article is a waste of time (and I expect to get an email or two to that effect). But following world events is more than a matter of infotainment: when and how China and the U.S. come apart at the seams is a question of far greater consequence than that of whether the New Orleans Saints or the Indianapolis Colts will win the Superbowl. The reality is that no nation, and no community will be able to completely protect itself from the sudden, harsh winds that will rush to fill the vacuum left by an implosion of either superpower.

By the way, my apologies to the other 190 or so nations of the world, large and small: my singling out of the U.S. and China for discussion does not signify that other countries are unimportant, or that their destinies will not be as unique as their cultures and geographies; merely that those destinies will probably unfold in the context of a global collapse spreading from the two nations we have been discussing. For any nation—India, Bolivia, Russia, Brazil, South Africa—and for any community or family, survival will require some comprehension of the direction of large events, so as to get out of the way when debris is flying and to anticipate opportunities to regroup.

So: Pay attention to the weather reports from Washington and Beijing, but meanwhile build local resilience wherever you are. If the roof needs mending, don't dawdle.

Meanwhile, after a long day of organizing neighborhood Transition gardens, you may want to get a foretaste of post-collapse America by reading James Howard Kunstler's A World Made by Hand; or savor an entertainingly erudite discussion of collapse as an extended process (which it will likely be), rather than as a sudden, all-out event, by reading John Michael Greer's books The Long Descent and The Ecotechnic Future.

Just because the sky is falling, that doesn't mean it's time to stop thinking.

Source - Richard Heinberg

Switch

2010-01-31T14:05:00.002+05:30

On Seeing Like A Cat

2010-01-31T13:08:00.002+05:30

Cats and dogs are the most familiar among the animal archetypes inhabiting the human imagination. They are to popular modern culture what the fox and the hedgehog are to high culture, and what farm animals like cows and sheep were to agrarian cultures. They also differ from foxes, hedgehogs, sheep and cows in an important way: nearly all of us have directly interacted with real cats and dogs.

The Truth about Cats and Dogs

I am a cat person, not in the sense of liking cats more (though I do), but actually being more catlike than doglike. Humans are more complex than either species; we are the products of the tension between our dog-like and cat-like instincts. We do both sociability and individualism in more complicated ways than our two friends; call it hyper-dogginess plus hyper-cattiness. That is why reductively mapping yourself exclusively to one or the other is such a useful exercise. You develop a more focused self-awareness about who you really are.

Our language is full of dog and cat references. Dogs populate our understanding of social dynamics: conflict, competition, dominance, slavery, mastery, belonging and otherness:

Finance is a dog-eat-dog world
He’s the alpha-dog/underdog around here
He’s a pit bull
Dhobi ka kutta, na ghar ka, na ghat ka (trans: “the washerman’s dog belongs neither at the riverbank, nor at the house;” i.e. a social misfit everywhere)
He follows her around like a dog
He looks at his boss with dog-like devotion

Cat references speak to individualism, play, opportunism, risk, comfort, mystery, luck and curiosity

A cat may look at a king
She curled up like a cat
A cat has nine lives
Managing this team is like herding cats
Look what the cat dragged in
It’s a cat-and-mouse game
Curiosity killed the cat

There is a dark side to each: viciousness and deliberate cruelty (dogs), coldness and lack of empathy (cats). We also like to use the idealized cat-dog polarity to illuminate our understanding of deep conflicts: they are going at it like cats and dogs. Curiously, though the domestic cat is a far less threatening animal than the domestic dog (wolf vs. tiger is a different story), we are able to develop contempt for certain dog-archetypes, but not for cat-archetypes. You can’t really insult someone in any culture by calling him/her a cat (to my knowledge). But there is fear associated with cats (witches, black cats for bad luck) in every culture. Much of this fear, I believe, arises from the cat’s clear indifference to our assumptions about our own species-superiority and intra-species status.

That point is clearly illustrated in the pair of opposites he looks at his boss with dog-like devotion/a cat may look at a king. The latter is my favorite cat-proverb. It gets to the heart of what is special about the cat as an archetype: being not oblivious, but indifferent to ascriptive authority and social status. You can wear fancy robes and a crown and be declared King by all the dogs, but a cat will still look quizzically at you, trying to assess whether the intrinsic you, as opposed to the socially situated, extrinsic you, is interesting. Like the child, the cat sees through the Emperor’s lack of clothes.

Our ability to impress and intimidate is mostly inherited from ascriptive social status rather than actual competence or power. Cats call our bluff, and scare us psychologically. Dogs validate what cats ignore. But it is this very act of validating the unreal that actually creates an economy of dog-power, expressed outside the dog society as the power of collective, coordinated action. Dogs create society by believing it exists.

In the Canine-Feline Mirror

We map ourselves to these two species by picking out, exaggerating and idealizing certain real cat and dog behaviors. In the process, we reveal more about ourselves than either cats or dogs. Cats are loyal to places, dogs to people is an observation that is more true of people than either dogs or cats. Just substitute interest in the limited human sphere (the globalized world of gossipy, politicky, watercoolerized, historicized and CNNized human society; feebly ennobled as “humanism”) versus the entire universe (physical reality, quarks, ketchup, ideas, garbage, container ships, art, history, humans-drawn-to-scale). There are plenty of such dichotomous observations. A particularly perceptive one is this: dog-people think dogs are smarter than cats because they learn to obey commands and do tricks; cat-people think cats are smarter for the exact same reason. Substitute interest in degrees, medals, awards, brands and titles versus interest in snowflakes and Saturn’s rings. I don’t mean to be derisive here: medals and titles are only unreal to cats. Remember, dogs make them real by believing they are real. They lend substance to the ephemeral through belief.

Cat-people, incidentally, can develop a pragmatic understanding of the value of dog-society things even if deep down they are puzzled by them. You can get that degree and title while being ironic about it. Of course, if you never break out and go cat-like at some point, you will be a de facto dog (check out the hilarious Onion piece a commenter on this blog pointed out a while back: Why can’t anyone tell I am wearing this suit ironically?).

But let’s get to the most interesting thing about cats, an observation that led to the title of this article. My copy of the The Encyclopedia of the Cat says:

It is not entirely frivolous to suggest that whereas pet dogs tend to regard themselves as humans and part of the human pack, the owner being the pack leader, cats regard the humans in the household as other cats. In many ways they behave towards people as they would towards other kittens in the nest, ‘grooming’ them, snuggling up with them, and communicating with them in the ways that they would use with other cats.

There is in fact an evolutionary theory that while humans deliberately domesticated wild dogs, cats self-domesticated by figuring out that hanging around humans led to safety and plenty.

I want to point out one implication of these two observations: cats aren’t unsociable. They just use lazy mental models for the species-society they find themselves in: projecting themselves onto every other being they relate to, rather than obsessing over distinctions. They only devote as much brain power to social thinking as is necessary to get what they want. The rest of their attention is free to look, with characteristic curiosity, at the rest of the universe.

To summarize, dog identities are largely socially constructed, in-species (actual or adopted, which is why the reverse-pet “raised by wolves” sort of story makes sense). Cat identities are universe-constructed. Which brings us to a quote from Kant (I think).

Personal History, Identity and Perception

It was Kant, I believe, who said, we see not what is, but who we are. We don’t start out this way, but as our world-views form by accretion, each new layer is constructed out of new perceptions filtered and distorted by existing layers. As we mature, we get to the state Kant describes, where identity overwhelms perception altogether, and everything we see reinforces the inertia of who we are, sometimes leading to complete philosophical blindness. Neither cats, nor dogs can resist this inevitability, this brain-entropy, but our personalities drive us to seek different kinds of perceptions to fuel our identity-construction.

Dogs, and dog-like people end up with socially-constructed, largely extrinsic identities because that’s what they pay attention to as they mature: other individuals. People to be like, people to avoid being like. It is at once a homogenizing and stratifying kind of focus; it creates out of self-fulfilling beliefs an identity mountain capped by Ken and Barbie dolls, with foothills populated by hopeless, upward-gazing peripheral Others, who must either continue the climb or mutiny.

Cats and cat-like people though, simply aren’t autocentric/species-centeric (anthropomorphic, canino-morphic and felino-morphic). Wherever they are on the identity mountain believed into existence by dogs, they are looking outwards, not at the mountain itself. They are driven to look at everything from quarks to black holes. In this broad engagement of reality, there isn’t a whole lot of room for detailed mental models of just one species. In fact, the ideal cat uses exactly one space-saving mental (and, to dogs, “wrong”) model: everyone is basically kinda like me. Appropriate, considering we are one species on one insignificant speck of dust circling an average star in a humdrum galaxy. The Hitchhiker’s Guide to the Galaxy, remember, has a two-word entry for Earth: Mostly Harmless. This indiscriminate, non-autocentric curiosity is dangerous though: curiosity does kill the cat. Often, it is dogs that do the killing. We may be mostly harmless to Vogons and Zaphod Beeblebrox, but not to ourselves.

Paradoxically, this leads cat-people, through the Kantian dynamic, to develop identities with vastly more diversity than dog-people. It is quite logical though: random-sampling a broader universe of available perceptions must inevitably lead to path-dependent divergence, while imitative-selective-sampling of a subset of the universe must lead to some convergence. By looking inward at species-level interpersonal differences, dog-people become more alike. By caricaturing themselves and everybody else to indistinguishable stick-figure levels, cats become more individualized and unique. The more self-aware among the cats realize that who I am and what I see are two aspects of the same reality: the sum total of their experiences. Their identities are at once intrinsic and universal.

That’s why the title of the article is Seeing Like a Cat. We see not what is, but who we are. Cats become unique by feeding on a unique history of perceptions. And that makes their perspectives unique. To see the world like a cat is to see it from a unique angle. Equally, it is the inability to see it from the collective perspective of dogs.

If you are a lucky cat, your unique cat perspective has value in dog society. That brings us to Darwin.

Dogs, Cats and Darwin

To intellectualize something as colloquial as the cat-dog discourse might seem like a pointless exercise to some. And yes, as the hilariously mischievous parody of solemn analysis, Why Cats Paint: A Theory of Feline Aesthetics demonstrates, it is easy to get carried away.

Yet I think there is something here as fundamental as the fox/hedgehog argument. As I said when I started, we have both cat-like and dog-like tendencies within us, and the two are not compatible. Both sorts of personalities are necessary for the world to function, but you can really only be like one or the other, and the course is set in childhood, long before we are mature enough to consciously choose.

Where does this dichotomy come from though? Darwin, I think.

When we think in Darwinist terms, we usually pay the most attention to the natural selection and survival of the fittest bits, which dog-belief societies replicate as artificial selection and social competition. But there’s the other side of Darwin: variation. It is variation and natural selection. Variation is the effect of being influenced by randomness. Without it, there is no selection.

Cats create the variation, and mostly die for their efforts. The successful (mostly by accident) cats spawn dog societies. That’s why, at the very top of the identity pyramids constructed by dog-beliefs, even above the prototypical Barbie/Ken abstractions, you will find cats. Cats who didn’t climb the mountain, but under whom the mountain grew. Those unsociable messed-up-perspective neurotics who are as puzzled by their position as the dogs who actually want it.

Source - Ribbonfarm

Nature

2010-01-21T22:39:00.002+05:30

Medical Ethics - Johnson & Johnson

2010-01-21T20:18:00.002+05:30

Drug maker Johnson & Johnson paid tens of millions of dollars in kickbacks to nursing home pharmacies in order to boost the sale of its drugs, says a Justice Department lawsuit.

The payments were often disguised as grants or "educational funding," says the lawsuit, and they were directed to Omnicare, a prominent nursing home pharmacy company.

The elaborate kickback scheme caused sales of Johnson & Johnson drugs to skyrocket. Sales of the antipsychotic drug Risperdal, for example, helped J&J drug purchases from Omnicare nearly triple from $100 million to $280 million a year.

An email released by the Justice Department shows an Omnicare executive writing:

"WE ARE SELLING MORE HIGH PRICED DRUGS (read Risperdal here) FOR THE PHARMACEUTICAL INDUSTRY!!"

Omnicare is already steeped in other accusations of fraud. The company agreed to pay the U.S. government $98 million in a settlement reached a few months ago (while admitting no guilt, of course).

Drugging the seniors

Today's nursing home patients are often treated much like prisoners, mentally shackled with chemical restraints known as pharmaceuticals. The mass-drugging of senior citizens in nursing homes has now reached criminal proportions. Rather than actually treating patients in ways that make them healthy, nursing home staff in some facilities have discovered it's much easier to just drug patients into a zombie-like state where they don't ask questions or cause trouble.

Johnson & Johnson medications are used as part of this "chemical restraint" recipe, which is actually a form of chemical abuse of senior citizens. J&J and Omnicare, of course, are far more concerned with selling medications than actually improving the quality of life for nursing home patients, so the more drugs are sold and consumed, the more "success" these companies think they have.

But what's the cost in human lives? What is the real human impact of drugging our senior citizens to the point where they're barely human?

Companies like Johnson & Johnson only seem to care about their own profits. They appear to have no compassion whatsoever for the lives of the people impacted by their patented chemical pharmaceuticals. They also appear to have no respect for the law: Bribing Omnicare with kickbacks, if proven by the Justice Department, is a felony crime.

But as usually happens in these cases, Johnson & Johnson will probably get off with a slap on the wrist: An affordable fine and a bit of bad press. Then, like most other pharmaceutical companies, they'll likely go right back to violating the law in order to sell more high-profit medications. Why? Because it works.

Pharmaceutical companies rarely face any real consequences for their crimes, even when they're caught red-handed. It's a curious thing, really. In any other industry, companies engaged in such blatant fraud would be shut down, their CEOs arrested and prosecuted in federal court. But when it comes to Big Pharma, all they have to do is pay a small fine, after which they're free to continue committing crimes.

It's nice to see the Justice Department finally going after these corporate crooks. Just last year, Pfizer was hit with a record $1 billion settlement with the Justice Department for engaging in fraudulent drug advertising.

It was a rare victory, however. Most of the time, drug companies get away with their crimes and face no real consequences for bribery, corruption, marketing fraud, scientific fraud, intimidation of scientists or elaborate financial kickback schemes that put extra dollars into the hands of doctors or pharmacies that push their drugs.

The pharmaceutical industry, in case you haven't noticed, is a criminal world where those who commit the boldest and most egregious crimes generate the highest profits. The risk of getting caught is so low -- and the financial rewards for committing crimes are so great -- that drug companies fully realize it pays to break the law.

That's why they'll keep breaking the law until something changes. As I've said before, I think it's time the Justice Department marched into the offices of these drug companies with pistols drawn and arrested the top CEOs for their crimes against humanity. Only by showing these drug companies that their executives are going to be prosecuted for their crimes can we hope to put an end to the criminal activities that have now become routine across the pharmaceutical industry.

Source - Natural News

Eclipse

2010-01-09T10:17:00.002+05:30

China ~ Enron

2010-01-09T10:08:00.001+05:30

James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true.

Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.

As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.

“Bubbles are best identified by credit excesses, not valuation excesses,” he said in a recent appearance on CNBC. “And there’s no bigger credit excess than in China.” He is planning a speech later this month at the University of Oxford to drive home his point.

As America’s pre-eminent short-seller — he bets big money that companies’ strategies will fail — Mr. Chanos’s narrative runs counter to the prevailing wisdom on China. Most economists and governments expect Chinese growth momentum to continue this year, buoyed by what remains of a $586 billion government stimulus program that began last year, meant to lift exports and consumption among Chinese consumers.

Still, betting against China will not be easy. Because foreigners are restricted from investing in stocks listed inside China, Mr. Chanos has said he is searching for other ways to make his bets, including focusing on construction- and infrastructure-related companies that sell cement, coal, steel and iron ore.

Mr. Chanos, 51, whose hedge fund, Kynikos Associates, based in New York, has $6 billion under management, is hardly the only skeptic on China. But he is certainly the most prominent and vocal.

For all his record of prescience — in addition to predicting Enron’s demise, he also spotted the looming problems of Tyco International, the Boston Market restaurant chain and, more recently, home builders and some of the world’s biggest banks — his detractors say that he knows little or nothing about China or its economy and that his bearish calls should be ignored.

“I find it interesting that people who couldn’t spell China 10 years ago are now experts on China,” said Jim Rogers, who co-founded the Quantum Fund with George Soros and now lives in Singapore. “China is not in a bubble.”

Colleagues acknowledge that Mr. Chanos began studying China’s economy in earnest only last summer and sent out e-mail messages seeking expert opinion.

But he is tagging along with the bears, who see mounting evidence that China’s stimulus package and aggressive bank lending are creating artificial demand, raising the risk of a wave of nonperforming loans.

“In China, he seems to see the excesses, to the third and fourth power, that he’s been tilting against all these decades,” said Jim Grant, a longtime friend and the editor of Grant’s Interest Rate Observer, who is also bearish on China. “He homes in on the excesses of the markets and profits from them. That’s been his stock and trade.”

Mr. Chanos declined to be interviewed, citing his continuing research on China. But he has already been spreading the view that the China miracle is blinding investors to the risk that the country is producing far too much.

“The Chinese,” he warned in an interview in November with Politico.com, “are in danger of producing huge quantities of goods and products that they will be unable to sell.”

In December, he appeared on CNBC to discuss how he had already begun taking short positions, hoping to profit from a China collapse.

In recent months, a growing number of analysts, and some Chinese officials, have also warned that asset bubbles might emerge in China.

The nation’s huge stimulus program and record bank lending, estimated to have doubled last year from 2008, pumped billions of dollars into the economy, reigniting growth.

But many analysts now say that money, along with huge foreign inflows of “speculative capital,” has been funneled into the stock and real estate markets.

A result, they say, has been soaring prices and a resumption of the building boom that was under way in early 2008 — one that Mr. Chanos and others have called wasteful and overdone.

“It’s going to be a bust,” said Gordon G. Chang, whose book, “The Coming Collapse of China” (Random House), warned in 2001 of such a crash.

Friends and colleagues say Mr. Chanos is comfortable betting against the crowd — even if that crowd includes the likes of Warren E. Buffett and Wilbur L. Ross Jr., two other towering figures of the investment world.

A contrarian by nature, Mr. Chanos researches companies, pores over public filings to sift out clues to fraud and deceptive accounting, and then decides whether a stock is overvalued and ready for a fall. He has a staff of 26 in the firm’s offices in New York and London, searching for other China-related information.

“His record is impressive,” said Byron R. Wien, vice chairman of Blackstone Advisory Services. “He’s no fly-by-night charlatan. And I’m bullish on China.”

Mr. Chanos grew up in Milwaukee, one of three sons born to the owners of a chain of dry cleaners. At Yale, he was a pre-med student before switching to economics because of what he described as a passionate interest in the way markets operate.

His guiding philosophy was discovered in a book called “The Contrarian Investor,” according to an account of his life in “The Smartest Guys in the Room,” a book that chronicled Enron’s rise and downfall.

After college, he went to Wall Street, where he worked at a series of brokerage houses before starting his own firm in 1985, out of what he later said was frustration with the way Wall Street brokers promoted stocks.

At Kynikos Associates, he created a firm focused on betting on falling stock prices. His theories are summed up in testimony he gave to the House Committee on Energy and Commerce in 2002, after the Enron debacle. His firm, he said, looks for companies that appear to have overstated earnings, like Enron; were victims of a flawed business plan, like many Internet firms; or have been engaged in “outright fraud.”

That short-sellers are held in low regard by some on Wall Street, as well as Main Street, has long troubled him.

Short-sellers were blamed for intensifying market sell-offs in the fall 2008, before the practice was temporarily banned. Regulators are now trying to decide whether to restrict the practice.

Mr. Chanos often responds to critics of short-selling by pointing to the critical role they played in identifying problems at Enron, Boston Market and other “financial disasters” over the years.

“They are often the ones wearing the white hats when it comes to looking for and identifying the bad guys,” he has said.

Source - New York Times

Dear

2009-12-30T18:50:00.000+05:30

Pharmaceuticals For All

2009-12-30T18:42:00.000+05:30

Big Pharma has been trending this direction for a long time: marketing medicines to people who don't need them and who have nothing wrong with their health. It's all part of a ploy to position prescription drugs as nutrients -- things you need to take on a regular basis in order to prevent disease.

The FDA recently gave its nod of approval on the matter, announcing that Crestor can now be advertised and prescribed as a "preventive" medicine. No longer does a patient need to have anything wrong with them to warrant this expensive prescription medication: They only need to remember the brand name of the drug from television ads.

This FDA approval for the marketing of Crestor to healthy people is a breakthrough for wealthy drug companies. Selling drugs only to people who are sick is, by definition, a limited market. Expanding drug revenues requires reaching people who have nothing wrong with them and convincing them that taking a cocktail of daily pharmaceuticals will somehow keep them healthy.

All this is, of course, the greatest quackery we've yet seen from Big Pharma, because once this floodgate of "preventive pharmaceuticals" is unleashed, the drug companies will be positioned to promote a bewildering array of other preventive chemicals you're supposed to take at the same time. Did you take your anti-cancer pill today? How about your anti-diabetes pill? Anti-cholesterol pill? Don't forget your anti-Alzheimer's pill, too.

Medications are not vitamins

The very idea that these drugs can somehow prevent a person from becoming sick in the future strains the boundaries of scientific credibility. Only natural therapies like nutrition can prevent the onset of disease, not patented chemicals that don't belong in the human body in the first place.

The logical argument of the drug companies who push these "preventive" prescriptions is essentially that the human body is deficient in pharmaceuticals, and that deficiency can only be corrected by taking whatever brand-name drugs they show you on television. Forget about deficiencies in zinc, or vitamin D, or living enzymes; what your body really needs is more synthetic chemicals!

The FDA agrees with this loopy logic. And why wouldn't it? Subscribing to this pharmaceutical delusion is an easy way to instantly expand Big Pharma's customer base by tens of millions. Overnight, the market for Crestor ballooned from a few million people with high cholesterol to the entire U.S. population of 300 million people.

If Crestor can help healthy people be healthier (which it can't, but let's play along with this delusion for the sake of argument), then it's only a matter of time before they start adding Crestor to infant formula. I mean, why not? If it's so good for healthy people, then it must make babies healthier, too, right?

So let's add Crestor to sports drinks. Let's sprinkle it into the iodized salt supply. Let's drip it into the municipal water! (Don't laugh: This idea of dripping cholesterol drugs into the water supply has already been suggested by more than one doctor.) Let's merge the pharmaceutical supply with the food supply and charge people prescription drugs prices for "functional" foods laced with these chemicals!

Pharmaceutical deficiency

That's really where all this is headed. When medicines are approved as preventive "nutrients" for the human body, it's only a matter of time before the industry starts talking about your "pharmaceutical deficiency."

Not taking any medications? You have a pharmaceutical deficiency, and it needs to be corrected by taking more prescription drugs. But don't bother with actual nutrition, because nutrients have absolutely no role in preventing disease, the FDA claims. No nutrient has ever been approved by the FDA for the prevention or treatment of any disease whatsoever.

The message from the FDA is quite clear on this: Nutrients are useless, and you should eat medications as if they were vitamins.

Patented Big Pharma chemicals, after all, provide all the nutrition you'll ever need!

Source - Natural News

Exposed

2009-12-19T12:52:00.001+05:30

Medical Journalism Suspect

2009-12-19T12:16:00.000+05:30

Doctors and researchers are beginning to question the outlandish claims being made by the media in response to alleged breakthroughs in cancer research. In an editorial published in the Journal of the National Cancer Institute (JNCI), several doctors expressed concern that news pieces fail to accurately reflect the truth concerning drugs and scientific studies.

Drs. Lisa Schwartz and Steven Woloshin from the Center for Medicine and the Media at the Dartmouth Institute for Health Policy and Clinical Practice in New Hampshire, along with Dr. Barnett Kramer from JNCI, examined media claims about a new anti-cancer drug called olaparib that was reported on in the acclaimed New England Journal of Medicine (NEJM). Though the study was uncontrolled and preliminary, some sources were claiming it as the most important cancer breakthrough in ten years.

Another report exaggerated study findings concerning alcohol and cancer risk. In response to a study that showed a two-percent increase in breast cancer risk from drinking one alcoholic beverage a day versus not drinking at all, one media source produced a headline that said, "A drink a day raises a women's risk of cancer", with no mention of the important details in the article. Perhaps a simple oversight, the coverage failed to accurately assess the truth and may have needlessly scared readers concerning alcohol consumption.

Coverage concerning pharmaceutical drugs is often the most inaccurate. Aside from the fact that many drug studies are corrupted from the start because of who is bankrolling them, negative findings are often omitted from the results while miniscule benefits are highlighted as breakthroughs. The intensity and rate of severe negative side effects from pharmaceutical drugs is routinely left out of mainstream reports concerning drug study results.

Some of the most common drugs for which exaggerated and inaccurate claims are made include antidepressant medications, statin drugs, and vaccines. Not only are they typically ineffective at performing the task for which they are prescribed, they are highly dangerous and come with significant side effects.

Since many medical journals themselves omit important study details, it is no wonder that coverage problems are occurring. Editorialists at JNCI are encouraging editors of medical journals and journalists to utilize a tip sheet they created that will assist in gathering accurate, thorough information concerning study findings. It offers assistance in knowing what questions to ask, interpreting data and statistics, and indicating the existence of study flaws and limitations in reports. They hope that improvements in the way journalists research information will lead to more accurate reporting.

Source - Natural News

My Way

2009-12-07T18:55:00.002+05:30

Mexico's Upcoming Collapse?

2009-12-07T18:46:00.001+05:30

I’ve been predicting the collapse of the Mexican Nation-State since 2006. It turns out that was a bit premature. But with violence flaring, the potential for collapse in Mexico is once again in the headlines. Oil production continues to fall, border violence is up, and the government is preparing for a showdown with the drug cartels. I’ll argue below that the government will keep the wheels on through 2009, but that the Mexican state will collapse shortly thereafter, ushering in the beginning of the end of the Nation-State.

It’s been difficult to read a paper or watch the news recently without hearing about the growing troubles in Mexico. The US military’s Joint Forces Command issued their Joint Operating Environment 2008 report recently that listed Mexico and Pakistan as the most likely states to collapse in the immediate future (PDF, see p.35 for analysis of Mexico). Even 60 minutes ran a segment about the rising drug violence.

Of course, readers are probably already aware that a root cause of the problems in Mexico is the precipitous decline of Mexican oil production and an even faster decline in the level of oil exports. Add to that declining remittance incomes being sent home by migrant workers in America, declining tourist revenues, and lower revenue per barrel of oil exported, and the Mexican state is experiencing a severe financial crunch.

While the fiscal stability of the Mexican state is impacted by continually declining oil production and oil exports that are declining even faster, this impact is mitigated to some extent because PEMEX hedged the majority of its oil production through 2009 at roughly $70/barrel. Depending on the price of oil in 2010, Mexican oil revenues stand to drop off a cliff as PEMEX loses hedge coverage.

Does this mean the Mexican state is finished? The current crack-down by the Mexican military and federal police is, I think, best seen as a last-ditch effort to save the state. But it is also evidence that, by the very existence of this pitched battle, the state retains enough viability to pose a threat, and therefore to be targeted.

In military theory, pitched battles are only consciously joined by both sides when both have an incentive to risk the main body of their force—-either because they think they can win a decisive victory or because they are running out of the political, logistical, or economic ability to sustain their army in the field and must seek a decisive action while they can.

Clearly the drug cartels smell blood—-and tactics like forcing the resignation of the Juarez police chief by killing one or more police officers every 48 hours demonstrate their desire for a decisive engagement. Additionally, the motivation behind a recent truce among rival drug cartels may be to facilitate a joint offensive against the government.

In my opinion, the Mexican government is seeking a pitched battle for the second reason—with their oil hedges only in place through 2009, and with oil production, remittance income, and tourism dollars poised to continue a sharp decline, the state may not have much more than a year of financial viability in which to cripple the drug cartels.

While a pitched battle may be politically expedient for the state, I think the cartels are too widespread and deeply ingrained to be defeated militarily. Salvation for the Mexican state will require regaining the long-term ability to compete with the cartels as a provider of social order and economic activity—-something that cannot be gained on the battlefield. At a minimum, in order to finance its ongoing viability, the state needs significantly higher oil prices to increase export revenue or a rapid recovery in the US to generate an increase in remittance income. Given the current economic climate, the occurrence of both of these seems highly unlikely—-there is simply no way of knowing where the tipping point lies, whether either one of these factors, or both, can save the Mexican state from eventual collapse. And without a renewed fiscal foundation, the eventual collapse of the Mexican state seems inevitable…

Impacts of Increasing Instability in Mexico

First, the increasing instability in Mexico will have a significant impact on PEMEX’s ability to maintain the necessary levels of investment to minimize production declines. This creates a positive feedback-loop: faster declines mean more financial difficulties, more instability, and less investment, precipitating even faster declines. In 2009, PEMEX plans capital expenditures of roughly $20 Billion. Traditionally, due to laws that prevent foreign ownership of many categories of natural resources, PEMEX has relied on debt to finance capital expenditures. More recently, PEMEX has also been pushing for a reform to the Mexican oil law that would allow foreign companies an ownership stake in Mexican projects in exchange for investment. Regardless of whether PEMEX pursues debt or equity financing, instability in Mexico’s property rights regime—-certainly including the potential for governmental collapse—-will seriously hamper these efforts.

Certainly the impact of disintegration in Mexico will have an impact north of the border. There is already a clear spill-over in criminal activity in border states. At some point, the national security threat to the United States will bring calls for intervention—but are there any effective options? The sprawling yet dense cities and mountainous rural terrain of Northern Mexico should give any military planners pause, especially in light of recent American experiences in Afghanistan and Iraq. Some commentators have even suggested that Mexico, not Iraq or Russia or Afghanistan, will be the defining national security challenge of the Obama administration.

The potential impact on Mexican oil production seems clear. More superficially, the situation in Mexico gives commentators of all stripes something to worry about. The spill-over of drug violence seems to preoccupy most mainstream talking-heads, but a few commentators have traced these problems back to their roots—and see a much more troubling threat. Specifically, the troubles in Mexico are an early sign of the failure of the Nation-State model. I’ve written about this extensively, and my intent here is not to re-hash my critique of the Nation-State system: if you’re interested, here’s an academic paper on the topic. The key is that the trends pulling Mexico apart at the seams are ubiquitous—-Mexico is merely facing this perfect storm first. As the Nation-State dominos begin to tumble next--Pakistan perhaps, then Iraq, then Russia, then Italy, then China, then Indonesia, etc.—-the pressure on the rest will grow. And many of the most threatened states are also the most critical to global oil exports.

While I don’t think Mexico—in its current form—has many years left, I hope I’m wrong. It’s a beautiful country (especially if you can get outside the Americanized hotel zones), with a vibrant culture. It may even prosper in a post-peak world under some different form of social and political organization. And a token state-shell may last for decades (another global trend, I suspect)—after all, the cartels will probably be happy to delegate parts of the social contract to the “sovereign.” But, for all practical purposes, the Mexican state won’t survive to see 2012.

Source - Jeff Vail

Poised

2009-11-30T12:38:00.002+05:30

Film Review - "L'Esquive"

2009-11-30T12:23:00.002+05:30

L'Esquive (Games of Love and Chance) shocked audiences when it won the César for Best Film, but what were people reacting to exactly: the fact that Abdellatif Kechiche had made a better film than Les Choristes and A Very Long Engagement, or that L'Esquive was earning comparisons to a certain Larry Clark provocation? The teens in the film—most of whom are North African and Muslim—live somewhere in the slums of Paris and their parents are conspicuous by their absence, which means they're allowed to do just about anything they want with very little interference, and though the worst thing a kid does here is steal someone's cell phone, L'Esquive scarcely starves for intensity.

Krimo (Osman Elkharraz) has broken up (again) with his girlfriend Magalie (Aurélie Ganito) and has set his sights on a lifelong friend, Lydia (Sara Forestier), who is playing the lead character in their high school class's adaptation of Marivaux's A Game of Love and Chance. An enigma wrapped in a riddle, Krimo bribes his friend Rachid (Rachid Hami) for his role in the play, just so he can act alongside Lydia, which perpetuates all sorts of melodramas, not least of which is the boy's embarrassment in front of his classmates during a rehearsal.

These hysterically fickle teens seem to speak their own language (they're always threatening to "waste" their "homies" and use weird clicking sounds as punctuation), and sometimes it's difficult to tell when they're acting out or simply acting. Epic stretches of the film are devoted to characters going at each other's throats, and as tedious and irritating as this may sound (and often is), it's never less than compelling in its genuineness: These kids are insufferable and they're more than happy to make everyone around them feel their wrath. Not only is the play the thing here, so are the rituals of adolescent behavior, with the world, naturally, as their stage. Kechiche even parallels the theatricality of Marivaux's play with the artifice of the teenage experience, but as for a social context, the events and themes from Marivaux's play more subtly and cunningly address issues of class than the characters in the film sometimes do, like when the teacher in charge of the Marivaux production discusses how behavior is inextricably bound to social status.

Like Tim Blake Nelson's O, the film plays out like a teen version of a Shakespeare play (it isn't, but it's almost best to enjoy it as such), you half expect the constant swirl of shifting alliances, betrayals, and chance run-ins to be capped with a bloodbath of some kind. Kechiche seems to understand this level of expectation, and it's something he toys with, which is probably why the film's coda is at once refreshing and frustrating. L'Esquive consistently teeters on the brink of tragedy (a confrontation between the kids and a group of thuggish cops is chilling) but dares to end on a chipper note, a slap in the face to viewers who aren't content with the tragedy inherent in the bad behavior of these children: They love and hate like Romeo and Juliet, even if they don't die like them. Why shouldn't that be enough?

Source - Slant Magazine

Rising

2009-11-30T11:16:00.001+05:30

Dubai Sinks

2009-11-30T11:01:00.001+05:30

The United Arab Emirates (UAE) has total debt amounting to $184 billion at the end of 2009, according to estimates by Bank of America-Merrill Lynch, which said the region faces a heavy redemption schedule until 2013. Dubai's shock announcement this week that it is seeking to suspend payments on debt of its state-owned conglomerate Dubai World and property subsidiary Nakheel has roiled global markets, raising fears that the emirate which funded a spectacular building boom on a mountain of debt could default.

BofA-Merrill Lynch said in a report that the restructuring undertaken by Dubai would be a serious blow to the Gulf region's economic recovery prospects, adding that the scale of the region's debt was now the issue.

"The lack of official debt data may add up to uncertainty and cause higher risk premiums," it said.

Of the $184 billion UAE debt, Dubai holds $88 billion while Abu Dhabi accounts for $90 billion. BofA-Merrill Lynch said the debt servicing cost will be higher than these estimates as their numbers only include the principal payments.

The bank said Dubai faces almost $50 billion of debt amortization in the next three years: $12 billion in 2010, $19 billion in 2011 and $18 billion in 2012.

"We estimate the total debt for Dubai World as $26.5 billion, 80 percent of which needs to be paid back in the next three years," added BofA-Merrill.

Source - Reuters

Bejewelled

2009-11-23T17:47:00.001+05:30

Green Tea Stress Management

2009-11-23T17:29:00.001+05:30

Green tea has an impressive of list of health benefits. Studies have reported that green tea can help prevent Alzheimer's, certain cancers, and improve cardiovascular health. Some health experts have asserted that green tea can help alleviate stress as well.

But until recently there has not been a large scale study on stress reduction with green tea. A large scale study in Japan linking green tea with stress reduction was recently published online in the American Journal of Clinical Nutrition.

The research team from the Tohoku University Graduate School of Medicine was led by Atsushi Hosawa. The study included 42,093 Japanese individuals. Just under seven percent of the study population, 2,774, suffered from psychological stress. The research team determined that consuming sufficient quantities of green tea improved their psychological well-being.

Those who drank five cups of green tea per day showed considerably less psychological distress than those who drank less than a cup a day. These results were calculated after making adjustments for variables such as age, diet, cigarette smoking, alcohol consumption, and disease histories.

The benefits of polyphenols

Because this was strictly an epidemiological study, no effort was made to determine the bioactive components that achieved the observed results. Green tea leaves contain polyphenols. Polyphenols are a type of antioxidant that combats the oxidative stress associated with neurodegenerative and cardiovascular diseases.

The four primary polyphenols found in fresh green tea leaves are: epigallocatechin (EGC), epicatechin gallate (ECG), epicatechin (EC), and epigallocatechin gallate (EGCG).

An earlier Japanese animal model study uncovered a link between EGCG and recovery from stress-induced fatigue. The researchers subjected rats to physical stress trials. They administered EGCG orally to the rats and discovered a significant reduction of liver oxidative damage, which stress and fatigue create. The research results were published in the journal Nutrition.

Stress and workaholic fatigue have been increasing worldwide. Consuming more green tea daily may offer a low-cost solution for stress management.

Source - Natural News

Honest

2009-11-23T16:12:00.002+05:30

Taxation & Globalization

2009-11-23T15:41:00.001+05:30

Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007.

The company’s effective income tax rate dropped to 1 percent from 34.1 percent, New York-based Goldman Sachs said today in a statement. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits.

Goldman Sachs, which today reported its first quarterly loss since going public in 1999, lowered its rate with more tax credits as a percentage of earnings and because of “changes in geographic earnings mix,” the company said.

The rate decline looks “a little extreme,” said Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC.

“I was definitely taken aback,” Willens said. “Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions.”

U.S. Representative Lloyd Doggett, a Texas Democrat who serves on the tax-writing House Ways and Means Committee, said steps by Goldman Sachs and other banks shifting income to countries with lower taxes is cause for concern.

“This problem is larger than Goldman Sachs,” Doggett said. “With the right hand out begging for bailout money, the left is hiding it offshore.”

In the first nine months of the fiscal year, Goldman had planned to pay taxes at a 25.1 percent rate, the company said today. A fourth-quarter tax credit of $1.48 billion was 41 percent of the company’s pretax loss in the period, higher than many analysts expected. David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller, expected the fourth-quarter tax credit to be 28 percent.

The tax-rate decline may raise some eyebrows because of the support the U.S. government has provided to Goldman Sachs and other companies this year, Willens said.

“It’s not very good public relations,” he said.

Source - Bloomberg

Cosmetics

2009-11-22T12:56:00.002+05:30

The Cosmetics Industry Targets Women

2009-11-22T12:52:00.002+05:30

Women and beauty products - it's a love affair that's been going on for centuries. And no wonder. There's nothing like a new lipstick or favourite perfume to make us look and feel good. Or so we thought...

In fact, according to a new report, most of our favourite cosmetics are cocktails of industrially produced and potentially dangerous chemicals that could damage our health and, in some cases, rather than delivering on their potent 'anti-ageing' promise, are causing us to age faster.

Research by Bionsen, a natural deodorant company, found that the average woman's daily grooming and make-up routine means she 'hosts' a staggering 515 different synthetic chemicals on her body every single day.

Many of those are also used in products such as household cleaners, and have been linked to a number of health problems from allergies and skin sensitivity to more serious hormonal disturbances, fertility problems and even cancer.

Parabens, for example, which are designed to preserve the shelf-life of your cosmetics, are one of the most widely used preservatives in the world, and are found in shampoos, hair gels, shaving gels and body lotions. But their use is becoming increasingly controversial - a range of different studies has linked them to serious health problems including breast cancer, as well as fertility issues in men.

Research from the Kyoto Prefectural University of Medicine suggests that some parabens we had previously presumed to be safe, such as Methylparaben, may mutate and become toxic when exposed to sunlight, causing premature skin ageing and an increased risk of skin cancer.

Methylparabens are found in more than 16,000 products, including moisturisers and toothpastes. Cosmetic producers have always defended their use of parabens on the grounds that they can't be absorbed into the body.

But many leading researchers disagree, including Dr Barbara Olioso, an independent professional chemist, who says: 'Research shows that between 20 and 60 per cent of parabens may be absorbed into the body.'

There are a number of laws designed to protect us from dangerous chemicals in cosmetics, but researchers worry that they don't go far enough. For example, cosmetic manufacturers are required to list their ingredients, but they don't have to tell us about any impurities found in the raw materials or used in the manufacturing process, so long as they don't end up in the finished product.

The industry insists that our cosmetics are safe. The Cosmetic Toiletries and Perfumery Association said last night: 'Stringent laws require all cosmetics to be safe, and each product undergoes a rigorous safety assessment. The number of ingredients in a product, or whether it is natural or man-made, has no bearing on how safe it is.'

They also say that any chemicals are present in safe doses that can't harm us. While that may be true, there is some disagreement over what constitutes a 'safe' level - for young people and children, or sensitive adults, these levels may not be so safe at all.

And even if the relatively small amounts in individual products don't hurt us, there is growing concern over the number of products women use daily, and the cumulative effect of so many chemicals being used all over our bodies every day, for many years.

As Charlotte Smith, spokesperson for Bionsen, says: 'Women have never been more image-conscious and their beauty regimes have changed over the years, from a simple "wash & go" attitude, to daily fake-tan applications, regular manicures, false lashes and hair extensions.

'Lots of the high-tech, new generation cosmetics and beauty "wonder" treatments naturally contain more chemicals to achieve even better results, which, of course, means women apply more chemicals than ever before.'

If you want to protect yourself from chemical overload, reduce your overall cosmetics usage; switch to natural or organic products, and read the labels on your beauty and grooming products with care.

* The Women's Environmental network has more detailed information and advice about ingredients contained in beauty products: www.wen.org. uk; The Cosmetics Database, a website which gives a 'hazard rating' for products: cosmeticsdatabase.com. Or read Skin Deep: The Essential Guide To What's In The Toiletries And Cosmetics You Use (Rodale), by Pat Thomas.

Source - Daily Mail

Paris

2009-11-22T11:53:00.002+05:30

Eugene Atget [1857-1927]

2009-11-22T11:38:00.003+05:30

Eugène Atget (February 12, 1857 – August 4, 1927) was a French photographer noted for his photographs documenting the architecture and street scenes of Paris.

Personal life

Born outside the French city of Bordeaux, he was orphaned at seven and raised by his uncle. In the 1870s, after finishing his education, Atget briefly became a sailor and cabin boy on liners in the Transatlantic. After shipping on several voyages, Atget became an actor, more specifically, a bit player, for a second-rate repertory company, but without much success. He met and eventually married Valentine DeLafosse, an actress, with whom he spent the rest of his life.

He retained his bohemian affection for the working person and worried about the petty tradespeople and merchants threatened by modernization and the rise of big Paris department stores. He was said to be short-tempered and eccentric and in his 50s stopped eating anything except bread, milk and sugar. He and his wife associated with some of Paris' leading dramatists—though he left behind no known portraits of friends or associates.

His death went largely unnoticed at the time outside the circle of curators who had bought his albums and kept them interred, mostly unseen. Atget would likely have been indifferent to his relative obscurity, given his preference for work over fame. "This enormous artistic and documentary collection is now finished," he wrote of his life's work in 1920, though he kept on shooting photographs for years after.
[edit] Photography career

Atget finally settled in Paris in the 1890s. Despite his limited background in the visual arts, he saw photography as a source of income, selling his photographs to artists in the nearby town of Montparnasse. He advertised his photographs as "documents for artists." It was common practice at the time for painters to paint scenes from photographs. By the mid-1890s, Atget bought his first camera and began to photograph more than 10,000 images of the people and sights of the French capital. By 1899, he had moved to Montparnasse, where he lived and earned a modest income until his death in 1927.

Atget photographed Paris with a large-format wooden bellows camera with a rapid rectilinear lens. The images were exposed and developed as 18x24cm glass dry plates. Besides supplying fellow artists, architects, publishers and interior decorators with his photographs of a dream-like Paris, he was also commissioned by city Bureaus and the Carnavalet Museum to preserve and record landmarks in France's capital city.

Between 1897 and 1927 Atget captured the old Paris in his pictures. His photographs show the city in its various facets: narrow lanes and courtyards in the historic city center with its old buildings, of which some were soon to be demolished, magnificent palaces from the period before the French Revolution, bridges and quays on the banks of the Seine, and shops with their window displays. He photographed stairwells and architectural details on the façades and took pictures of the interiors of apartments. His interest also extended to the environs of Paris.

He produced timeless views of the parks of Versailles, Saint-Cloud and Sceaux. In addition to architecture and the urban environment, he also photographed street-hawkers, small tradesmen, rag collectors and prostitutes, as well as fairs and popular amusements in the various districts. The outlying districts and peripheral areas, in which the poor and homeless sought shelter, also furnished him with pictorial subjects.

Distinguishing characteristics of Atget's photography include a wispy, drawn-out sense of light due to his long exposures, a fairly wide view that suggested space and ambiance more than surface detail, and an intentionally limited range of scenes avoiding the bustling modern Paris that was often around the corner from the nostalgia-steeped nooks he preferred. The emptiness of most of his streets and the sometimes blurred figures in those with people are partly due to his already antiquated technique, including extended exposure times which required that many of his images be made in the early morning hours before pedestrians and traffic appeared.

The mechanical vignetting often seen at some corners of his photographs is due to his having repositioned the lens relative to the plate on the camera—exploiting one of the features of bellows view cameras as a way to correct perspective and control the image. Under the dark cloth, Atget surely knew the effect of these corners and accepted or preferred them. In fact, one of the key qualities of Atget's work compared to that of many other similar documentary photographers of that city, is his savvy avoidance of perfection, that cold symmetry and clear stasis that photography is so naturally good at. He approaches his subjects with a humanism that is palpable once noticed, and you become an observer and appreciator with him in his meanderings. He often said, "I have done little justice to the Great City of Paris," as a comment on his career.

Atget's photographs attracted the attention of well-known painters such as Man Ray, Andre Derain, Henri Matisse and Picasso in the 1920s.

Berenice Abbott was the key that unlocked Atget's Paris for the rest of the world. She got to know him in the 1920s, when she was an assistant to Atget's Montparnasse neighbor Man Ray. She attempted to help Atget achieve greater recognition during his lifetime by sending friends to purchase his work and by making a celebrity-style photographic portrait of him. After Atget's death in 1927, she acquired a large part of his archive and exhibited, printed and wrote about his work, as well as assembled a substantial archive of writings about his portfolio by herself and others. In 1968, Abbott arranged for New York's Museum of Modern Art to buy this archive, and through a series of MoMA exhibitions and publications Atget finally entered the pantheon of "Masters" of photography.

Abbott, as a result of all this, is given much credit for the recognition that Atget's photographs have received in the contemporary photographic world. Abbott partnered with the American Julien Levy to raise the money to acquire 1,500 of Atget's negatives and 8,000 of his prints. As noted above, she spent the 40 years promoting his work in America, elevating it to recognition as art, beyond its original reputation as documentation.

Legacy

The Museum of Modern Art purchased Abbott's collection of Atget's work in 1968, and now has some 5,000 of his prints and negatives in its possession. Abbott wrote of Atget: "He was an urbanist historian, a Balzac of the camera, from whose work we can weave a large tapestry of French civilization." In 1981, MoMA completed publication of a four-volume series of books based on its four successive exhibitions about Atget's life and work.

'Atget, a Retrospective' was presented at the Bibliotheque Nationale in 2007.

Source - Wikipedia

Lace

2009-11-18T17:25:00.002+05:30

Ecuador Sues Chevron

2009-11-18T17:20:00.001+05:30

Tens of thousands of Amazonians are suing Chevron, the American oil company, for poisoning their waterways in what is billed as one of the biggest environmental cases in history.

The Ecuadorean claimants said the company illegally dumped toxic waste from its oil production, which filtered into the lakes used by thousands of people for washing and drinking.

The result, they claimed, was one of the worst environmental disasters in history, which led to a public health crisis with rising levels of cancer, birth defects and miscarriages.

Some 30,000 Amazonians are behind a case to be heard by an Ecuadorean judge. Experts said the company might have to pay damages of up to $US27 billion.

The company said there was no proof that any illnesses were caused by its operations. It said the responsibility for cleaning the area lay with the Ecuadorean government and Petroecuador, the state oil company.

The court case is the result of the exploitation of the indigenous population by US trial lawyers and a corrupt government, according to Chevron.

The Amazon campaign has attracted high-profile supporters including actor Daryl Hannah. Chevron's reputation for corporate social responsibility has already taken a blow.

The issue is the subject of Crude, a critically acclaimed documentary. The rags-to-riches tale of the most senior Ecuadorean lawyer fighting the case has earnt it a place on the front cover of Vanity Fair.

Texaco, which is owned by Chevron, started operating in Sucumbios, Ecuador, in 1964. Over 26 years it made more than $500 million, producing 1.7 billion barrels of oil. As the operator of a consortium with Petroecuador, it drilled hundreds of wells.

Pits were created for each well in which to put the water produced as a byproduct of the oil. Those fighting Chevron claimed that the 68 billion litres of water in the pits were toxic and were allowed to overflow into nearby rivers. They also claimed that Texaco spilt an additional 64 million litres of crude oil.

The contamination allegedly increased cancer rates in the area threefold, and led directly to 1400 deaths.

"Texaco treated Ecuador's Amazon like a garbage dump," said Douglas Beltman, a former official at the US Environmental Protection Agency who is a scientific consultant to the indigenous groups.

Source - Telegraph

Eden

2009-11-16T19:08:00.002+05:30

USA; Bringing Freedom To The Afghans

2009-11-16T18:55:00.001+05:30

Journalists have been allowed to inspect refurbished facilities at Bagram airbase in Afghanistan, the largest US military hub in the region and home to a controversial prison.

Al Jazeera's correspondent James Bays, who was among those who inspected the facilities on Sunday, said Bagram, unlike its Guantanamo counterpart, was clearly not going to be shut down soon.

"The new prison wing cost some $60 million to build ... and is meant to be part of a new era of openness and transparency," Bays said.

"But we were not shown the detainees. Human-rights lawyers say that, while the environment for the prisoners may be changing, their legal situation is not ... not having been charged. Nor has any civilian lawyer ever been allowed inside."

Bays said the extended prison could hold up to 1,000 detainees, but was at present holding around 700 inmates, including 30 foreign prisoners.

Detainees 'beaten'

Omar Dighayes, a former detainee at Bagram and Guantanamo Bay, said the Bagram prison resembled a concentration camp.

"People were beaten, dragged, tortured in it. There were high places where guards stood with guns. It was a hard, difficult place," he told Al Jazeera.

But he said he doubts the newly refurbished Bagram prison will improve conditions for its detainees, one of which includes his brother-in-law, whom Dighayes says was recently "badly beaten" inside Bagram.

"I don't think it's the facilities which make the difference, it's the treatment of people inside.

"Everybody who worked in Bagram - from the American side - will tell you that the things I'm describing did happen. People from the military intelligence [and] people from the FBI have spoken about the barbaric treatment at this facility."

But General Mark Martins, who runs detention operations at the airbase, said the US military was improving its treatment of detainees and had learnt many lessons since occupying the country in 2001.

"Detention, if not done properly, can actually harm the effort. We are a learning organisation ... we believe transparency is certainly going to help the effort, and increase the credibility of the whole process," Martins said.

'Guantanamo's evil twin'

However, Clara Gutteridge, an investigator of secret prisons and renditions from the human rights organisation, Reprieve, said Bagram is seen as "Guantanamo's lesser-known evil twin".

"All this talk about transparency, and the US government still won't release a simple list of names of prisoners who are in Bagram," she told Al Jazeera.

"None of them have had access to a lawyer ... and that just seems very unfair.

"We at Reprieve see this as the next big fight after Guantanamo Bay.

"But one thing that the US government is saying is that Afghan prisoners in Afghanistan have less rights than any other prisoner which just seems absurd."

Bagram Air Field is the largest US military hub in Afghanistan and is home to about 24,000 military personnel and civilian contractors.

Tens of millions of dollars continue to be spent on expanding and upgrading facilities - turning Bagram into a town spread over about 5,000 acres.

Base expansion

The air field part of the complex is already handling 400 tonnes of cargo and 1,000 passengers daily, according to Air Force spokesman Captain David Faggard.

It is continuing to grow to keep up with the requirements of an escalating war and troop increases.

Among new options being considered in Washington is regional commander General Stanley McChrystal's request to bring an additional 40,000 troops to Afghanistan.

But even with current troop levels - 65,000 US troops and about 40,000 from allied countries - Bagram already is bursting at the seams, our correspondent reported.

Plans are under way to build a new, $22m passenger terminal and a cargo yard costing $9m. To increase cargo capacity, a parking ramp supporting the world's largest aircraft is to be completed in early 2010.

Bagram was previously a major Soviet base during Moscow's 1979-89 occupation of Afghanistan, providing air support to Soviet and Afghan forces fighting the mujahidin.

Bagram lies in Parwan, a relatively quiet province. The Taliban is not believed to have a significant presence in the province.

But the base is susceptible to rocket and mortar attacks. In 2009, the Taliban launched more than a dozen attacks on the base, killing four and wounding at least 12, according to Colonel Mike Brady, a military spokesman.

Source - Al Jazeera

Reaching

2009-11-16T12:37:00.001+05:30

American Democracy At Work

2009-11-16T12:06:00.001+05:30

In the official record of the historic House debate on overhauling health care, the speeches of many lawmakers echo with similarities. Often, that was no accident.

Statements by more than a dozen lawmakers were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech, one of the world’s largest biotechnology companies.

E-mail messages obtained by The New York Times show that the lobbyists drafted one statement for Democrats and another for Republicans.

The lobbyists, employed by Genentech and by two Washington law firms, were remarkably successful in getting the statements printed in the Congressional Record under the names of different members of Congress.

Genentech, a subsidiary of the Swiss drug giant Roche, estimates that 42 House members picked up some of its talking points — 22 Republicans and 20 Democrats, an unusual bipartisan coup for lobbyists.

In an interview, Representative Bill Pascrell Jr., Democrat of New Jersey, said: “I regret that the language was the same. I did not know it was.” He said he got his statement from his staff and “did not know where they got the information from.”

Members of Congress submit statements for publication in the Congressional Record all the time, often with a decorous request to “revise and extend my remarks.” It is unusual for so many revisions and extensions to match up word for word. It is even more unusual to find clear evidence that the statements originated with lobbyists.

The e-mail messages and their attached documents indicate that the statements were based on information supplied by Genentech employees to one of its lobbyists, Matthew L. Berzok, a lawyer at Ryan, MacKinnon, Vasapoli & Berzok who is identified as the “author” of the documents. The statements were disseminated by lobbyists at a big law firm, Sonnenschein Nath & Rosenthal.

In an e-mail message to fellow lobbyists on Nov. 5, two days before the House vote, Todd M. Weiss, senior managing director of Sonnenschein, said, “We are trying to secure as many House R’s and D’s to offer this/these statements for the record as humanly possible.”

He told the lobbyists to “conduct aggressive outreach to your contacts on the Hill to see if their bosses would offer the attached statements (or an edited version) for the record.”

In recent years, Genentech’s political action committee and lobbyists for Roche and Genentech have made campaign contributions to many House members, including some who filed statements in the Congressional Record. And company employees have been among the hosts at fund-raisers for some of those lawmakers. But Evan L. Morris, head of Genentech’s Washington office, said, “There was no connection between the contributions and the statements.”

Mr. Morris said Republicans and Democrats, concerned about the unemployment rate, were receptive to the company’s arguments about the need to keep research jobs in the United States.

The statements were not intended to change the bill, which was not open for much amendment during the debate. They were meant to show bipartisan support for certain provisions, even though the vote on passage generally followed party lines.

Democrats emphasized the bill’s potential to create jobs in health care, health information technology and clinical research on new drugs.

Republicans opposed the bill, but praised a provision that would give the Food and Drug Administration the authority to approve generic versions of expensive biotechnology drugs, along the lines favored by brand-name companies like Genentech.

Lawmakers from both parties said it was important to conduct research on such “biosimilar” products in the United States. Several took a swipe at aggressive Indian competitors.

Asked about the Congressional statements, a lobbyist close to Genentech said: “This happens all the time. There was nothing nefarious about it.”

In separate statements using language suggested by the lobbyists, Representatives Blaine Luetkemeyer of Missouri and Joe Wilson of South Carolina, both Republicans, said: “One of the reasons I have long supported the U.S. biotechnology industry is that it is a homegrown success story that has been an engine of job creation in this country. Unfortunately, many of the largest companies that would seek to enter the biosimilar market have made their money by outsourcing their research to foreign countries like India.”

In remarks on the House floor, Representative Phil Hare, Democrat of Illinois, recalled that his family had faced eviction when his father was sick and could not make payments on their home. He said the House bill would save others from such hardship.

In a written addendum in the Congressional Record, Mr. Hare said the bill would also create high-paying jobs. Timothy Schlittner, a spokesman for Mr. Hare, said: “That part of his statement was drafted for us by Roche pharmaceutical company. It is something he agrees with.”

The boilerplate in the Congressional Record included some conversational touches, as if actually delivered on the House floor.

In the standard Democratic statement, Representative Robert A. Brady of Pennsylvania said: “Let me repeat that for some of my friends on the other side of the aisle. This bill will create high-paying, high-quality jobs in health care delivery, technology and research in the United States.”

Mr. Brady’s chief of staff, Stanley V. White, said he had received the draft statement from a lobbyist for Genentech’s parent company, Roche.

“We were approached by the lobbyist, who asked if we would be willing to enter a statement in the Congressional Record,” Mr. White said. “I asked him for a draft. I tweaked a couple of words. There’s not much reason to reinvent the wheel on a Congressional Record entry.”

Some differences were just a matter of style. Representative Yvette D. Clarke, Democrat of New York, said, “I see this bill as an exciting opportunity to create the kind of jobs we so desperately need in this country, while at the same time improving the lives of all Americans.”

Representative Donald M. Payne, Democrat of New Jersey, used the same words, but said the bill would improve the lives of “ALL Americans.”

Mr. Payne and Mr. Brady said the bill would “create new opportunities and markets for our brightest technology minds.” Mr. Pascrell said the bill would “create new opportunities and markets for our brightest minds in technology.”

In nearly identical words, three Republicans — Representatives K. Michael Conaway of Texas, Lynn Jenkins of Kansas and Lee Terry of Nebraska — said they had criticized many provisions of the bill, and “rightfully so.”

But, each said, “I do believe the sections relating to the creation of a market for biosimilar products is one area of the bill that strikes the appropriate balance in providing lower cost options.”

Source - New York Times

V

2009-11-15T15:30:00.002+05:30

Ikea

2009-11-15T12:43:00.000+05:30

The wholesome Scandinavian image of furniture and lifestyle giant Ikea has been rudely shaken by a new book which claims the company is hostile to foreign employees and uses Stasi-style secret police methods to spy on its thousands of staff worldwide.

The explosive charges are made by a former senior Ikea executive Johan Stenebo, a Swede who started working for the company at one of its German outlets outside Hamburg over 20 years ago and rose to a senior management position. He resigned last year.

His book, entitled Sanningen om Ikea (The Truth about Ikea), contains wide-ranging allegations about a company which has become a global household name. Justifying the book to Gemany's Der Spiegel magazine, he said: "I did not want to go along with it any more, but I could not stay silent."

Mr Stenebo claims that Ikea, which employs 135,000 staff in 44 countries, is run with an iron fist by founder Ingvar Kamprad and his two sons Mathias and Peter, who were promoted to top management five years ago.

He describes Ikea as "one of the most secretive companies in the world" and claims that senior management were expected to show fanatical loyalty and devotion to Mr Kamprad. "There was an unwritten law for Ikea upper management: loyalty to Ingvar unto death," he writes.

He alleges that Ikea used methods normally associated with former Communist East Germany's hated Stasi secret police to spy on its staff and keep them in line. He claims that a close-knit network of company informers kept Mr Kamprad constantly updated on personal gossip about employees and the prevailing atmosphere in each office.

Foreigners who work for Ikea have been referred to by Swedish executives as "niggers", he writes, and have no chance of being promoted to senior positions. In fact, most of the top Ikea jobs, he claims, go to employees from the town of Älmhult, in the Samaland region of Sweden, where Mr Kamprad grew up. Mr Stenebo claims Ikea has elaborately manipulated the image of its 83-year-old founder, now the world's fifth-richest man, portraying him as "an ascetic, slightly dim geriatric" with alcohol problems and dyslexia, and confecting for him a typical Ikea lifestyle of modest, affordable simplicity, with a Klippan range sofa and the bog-standard Billy bookcase.

In reality, he writes, these stories were made up by Mr Kamprad (who actually drove a Porsche), then disseminated by media which fell for their quaint charm. There was good business sense to the strategy, he says: the company's homely image "helped to push down prices with suppliers".

His book also alleges that the company makes claims to being an eco-friendly concern, while in reality its huge market share means that it can dictate the lowest prices to its suppliers. "The key to Ikea's low prices is the supply of cheap raw materials," Mr Stenebo writes. "Instead of using the best they use the cheapest."

Mr Stenebo insists that he chose to write his open denunciation of Ikea after a furious row with Mr Kamprad's son Peter. "Economic power means a responsibility towards people and the environment, but Peter does not understand that," he claimed.

The book has attracted enormous media attention in Sweden, with its unprecedented attack on a national institution by one of its former senior executives. The last time the furniture giant came in for such negative publicity was more than a decade ago when Mr Kamprad senior was unmasked as having been a wartime member of a Swedish pro-Nazi organisation.

He managed to survive that stain on his reputation by publicly apologising and writing personally to all of Ikea's Jewish staff. This time around, Ikea has dismissed the book as "the author's personal opinion on Ikea and the Kamprad family. Ikea sees no reason to make a comment on someone's personal view on the company."

Yet despite Mr Stenebo's destructive criticisms, it is clear he has not entirely escaped entanglement with the old man's charisma. He has no doubt his denunciations have come to the attention of the man who matters. "Ingvar will be reading the book with his chameleon eyes," he told Der Spiegel with an unmistakable note of pride. "He hates me and he loves me."

Ikea in numbers

565 million Number of visitors to Ikea worldwide in 2008

9,500 Items of furniture available in the catalogue

135,000 Employees in 44 countries

€21.2bn Sales in 2008

594,000sq ft Size of largest branch of Ikea, outside Stockholm

Source - The Independent

Om

2009-11-10T19:41:00.002+05:30

God's Work - Goldman Sachs!!!!!!

2009-11-10T19:14:00.002+05:30

Number 85 Broad Street, a dull, rust-coloured office block in lower Manhattan, doesn’t look like a place to stop and stare, and that’s just the way the people who work there like it. The men and women who arrive in the watery dawn sunshine, dressed in Wall Street black, clutching black briefcases and BlackBerrys, are very, very private. They walk quickly from their black Lincoln town cars to the lobby, past, well, nothing, really. There’s no name plate on the building, no sign on the front desk and the armed policeman stationed outside isn’t saying who works there. There’s a good reason for the secrecy. Number 85 Broad Street, New York, NY 10004, is where the money is. All of it.

It’s the site of the best cash-making machine that global capitalism has ever produced, and, some say, a political force more powerful than governments. The people who work behind the brass-trim glass doors make more money than some countries do. They are the rainmakers’ rainmakers, the biggest swinging dicks in the financial jungle. Their assets total $1 trillion, their annual revenues run into the tens of billions, and their profits are in the billions, which they distribute liberally among themselves. Average pay this recessionary year for the 30,000 staff is expected to be a record $700,000. Top earners will get tens of millions, several hundred thousand times more than a cleaner at the firm. When they have finished getting "filthy rich by 40", as the company saying goes, these alpha dogs don’t put their feet up. They parachute into some of the most senior political posts in the US and beyond, prompting accusations that they "rule the world". Number 85 Broad Street is the home of Goldman Sachs.

The world’s most successful investment bank likes to hide behind the tidal wave of money that it generates and sends crashing over Manhattan, the City of London and most of the world’s other financial capitals. But now the dark knights of banking are being forced, blinking, into the cold light of day. The public, politicians and the press blame bankers’ reckless trading for the credit crunch and, as the most successful bank still standing, Goldman is their prime target. Here, politicians and commentators compete to denounce Goldman in ever more robust terms — "robber barons", "economic vandals", "vulture capitalists". Vince Cable, the Lib Dem Treasury spokesman, contrasts the bank’s recent record results — profits of $3.2 billion in the last quarter alone — and its planned bumper bonus payments with what has happened to ordinary people’s jobs and incomes in 2009.

It’s even worse in the US. There, Rolling Stone magazine ran a story that described Goldman as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". In his latest documentary, Capitalism: A Love Story, Michael Moore drives up to 85 Broad Street in an armoured Brinks money van, leaps out carrying a sack with a giant dollar sign on it, looks up at the building and yells: "We’re here to get the money back for the American people!"

Goldman’s reputation is suddenly as toxic as the credit default swaps and other inexplicably exotic financial instruments it used to buy with glee. That’s bad for the one thing it values more than anything else: business. Being the prime target for popular and political outrage could put Goldman first in line for draconian new regulation. So it has, reluctantly, decided that the time has come to speak out, to fight its corner. That’s how, on one of those bright autumnal New York mornings when anything seems possible — even an invitation to break bread with the masters of the universe — I find myself walking past the security guard who held up Michael Moore and into the building with no name.

"Aha! You catch us plotting in real time," says Lloyd Blankfein, breaking away from a cabal of senior executives discussing his trip to Washington the previous day. Blankfein, 55, Goldman’s chairman and chief executive, is wearing a grey suit with a jaunty Hermès tie with little red bicycles on it. In his hand, he’s carrying one of those cups of coffee that look bigger than the human stomach. Maybe it’s the caffeine, maybe it’s the tie — a birthday present from his daughter — but he’s in a remarkably jolly mood for a man everyone seems to hate. "It’s like a safari here," he jokes. "You’ve come in to look at the animals."

Blankfein may be Wall Street’s Sun God, but, with the economic outlook stormy, he doesn’t want to advertise it, so the merest hint of a status symbol or — horror! — ostentation is airbrushed out of his life, publicly, at least. Take his office on the 30th floor. The chairs are the same ones that were there when he became CEO three years ago. There are none of the $87,000 handmade rugs or $5,000 wastepaper baskets of Wall Street lore. There’s no sign of irrational exuberance. Only coffee, which arrives cold. It sets just the right tone for the job in hand. The grand wizard of Wall Street is steeling himself for the hardest sell of his life: he’s here to argue for good ol’ capitalism, for investment banks and for Goldman Sachs.

Luckily for him and his firm, he’s a damn good salesman. He starts with a little humility. He understands that "people are pissed off, mad, and bent out of shape" at bankers’ actions. Goldman played its part in the meltdown that almost destroyed the global financial system. It, like most other banks, lent too much money, made its first quarterly loss for more than a decade last year and ended up taking bail-out cash from Washington. "I know I could slit my wrists and people would cheer," he says. But then, he slowly begins to argue the case for modern banking. "We’re very important," he says, abandoning self-flagellation. "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle." To drive home his point, he makes a remarkably bold claim. "We have a social purpose."

Social purpose? Those who have lost their jobs or seen their pay slashed thanks to bankers who flogged dodgy mortgages and dreamt up investments so complex not even they understood them, would gladly tell him where to stick his social purpose. But the problem is, Blankfein is a good advertisement for wealth creation. His own. He is no scion of privilege, dispensing plummy-voiced homilies to raw capitalism from his 30th-floor eyrie. Born in a tough neighbourhood in the Bronx, the son of a postal worker and a receptionist, he was the first in his family to go to college and used financial aid to go to Harvard.

Even though he proudly pays himself more in a year than most of us could ever dream of — $68m in 2007 alone, a record for any Wall Street CEO, to add to the more than $500m of Goldman stock he owns — he insists he’s still "a blue-collar guy".

But what about the charge sheet? Bankers brought the world to the brink of bankruptcy and instead of doing the decent thing and jumping out of the nearest window, they turned up cap in hand to governments to hoover up taxpayers’ money to save their skin. Now, just one year on, they are carrying on as if nothing has happened, gambling, and winning, handsomely, with our cash. Goldman’s profits in the second quarter were a record $3.4 billion. Most of the money is being made in trading in bonds, currencies and commodities.

Goldman is coining it again for two reasons. First, global markets are booming — up 50% from the credit-crunch lows, as new money, much of it from governments, has gushed into the financial system. Second, with Lehman Brothers and Bear Stearns off the street, Merrill Lynch a crippled shadow of its former self, and neither Citigroup nor UBS the forces of old, Goldman has a bigger slice of a growing pie. "We didn’t f*** up like the other guys. We’ve still got a balance sheet. So, now we’ve got a bigger and richer pot to piss in," is how one Goldman banker puts it. Small wonder the bank is on course to set aside over $20 billion for salaries and bonuses.

So far, so lucrative. But isn’t it simply unfair? Isn’t Goldman acting as the modern equivalent of war-time profiteer, taking advantage of global crisis and emergency government action to mint millions? Even the veteran financier George Soros says the big profits made by Wall Street banks are "hidden gifts" from the state.

Blankfein dismisses any suggestion that Gold-man needed to be bailed out, and, by extension, rejects any notion that the firm is now profiting from public support. Sure, he took $10 billion from Washington’s Troubled Asset Relief Program (Tarp). But the bank has since repaid the cash, with healthy interest — 23%. Goldman also bene-fited from the federal bail-out of the huge US insurance firm AIG. Goldman had bought $20 billion worth of insurance from AIG and received billions of dollars — perhaps as much as $13 billion — when Washington pumped $90 billion into the stricken giant. But Blankfein insists Goldman was "hedged" against any AIG losses, in the best possible way — with cash. So even if AIG had gone under, Goldman would not have suffered. Critics say that had AIG gone bust, the entire financial system could have collapsed, taking Goldman with it. What’s more, at the height of the crisis, the Federal Reserve broke with an 80-year-old tradition and let Goldman turn itself from a pure investment bank into a bank holding company. This meant it could borrow funds at the same cheap rate as commercial banks for as long as it wanted. Blankfein says Goldman changed status not for the money, but because it had become clear, following the collapse of Bear Stearns and Lehman, that the market had lost faith in the ability of the US Securities and Exchange Commission to regulate investment banks. Being regulated by the central bank, the Federal Reserve, would help to restore confidence in the financial system as a whole.

Whatever the truth behind the bail-out, not even the smartest Goldmanite can deny that it is only thanks to government aid that the bank still has a financial system to work with. Washington has bolstered the US economy and banks to the tune of $12 trillion. Does Blankfein not acknowledge that it is maddening for most of us to watch Goldman gobble up so much cash while we struggle? Quite the opposite. He insists we should be celebrating his bank’s success, not condemning it. "Everybody should be, frankly, happy," he says. Can he be serious? Deadly. Goldman’s performance, he argues, is the firmest indication of a nascent economic recovery that will benefit not just him and his firm but all of us. "The financial system led us into the crisis and it will lead us out."

Blankfein goes on to say something equally audacious. We should welcome the return of titanic paydays at Goldman. Goldman is exempt from President Barack Obama’s cap on bonuses because it has paid back bail-out cash. Paying top dollar to recruit and retain the best bankers won’t sink the system, he claims, but save it. Performance-related pay is a guarantee of high-quality responsible banking. "If you examine our practices on compensation, you will see a complete correlation throughout our history of having remuneration match performance over the long term. Others made no money and still paid large bonuses. Some are not around any more. I wonder why."

Many disagree, arguing that in the new, flatter economic landscape, megabucks pay is no longer necessary. Lucian Bebchuk, professor of law, economics and finance at Harvard Law School, says: "These days, it’s easier for banks to keep their employees from being raided. The outside opportunities are less attractive now than in 2007."

Okay, forget bail-outs, forget bonuses, forget all the money stuff, if you can. Surely Blankfein cannot dodge the playwright David Hare? Through his latest work, The Power of Yes, which tackles the issue of the credit crunch, Hare argues that it is "blackmail" to say that there cannot be a recovery unless we let bankers get on with what they have always done and pay themselves squillions. It’s like what the miners did in the 1970s, only this time the National Union of Mineworkers is the City and Wall Street. Blankfein has no time for such soft talk. Bankers are not miners. "I’ve got news for you," he shoots back, eyes narrowing. "If the financial system goes down, our business is going down and, trust me, yours and everyone else’s is going down, too."

Like a patient who has survived a near-death experience, for Blankfein the credit crunch has rekindled his innate passion for moneymaking. Talking to him is like talking to a man who has greenbacks, not blood, running through his veins. He believes he’s good at what he does and what he does is good. He has his supporters. Vanity Fair awarded him the coveted No 1 spot in its 2009 New Establishment list, its league table of the 100 top power players in the information age, above such luminaries as the Apple boss, Steve Jobs, and the Google founders, Sergey Brin and Larry Page. Others, such as the New York Times columnist Andrew Ross Sorkin, argue that the public "cannot have it both ways". At the height of the crisis last year, Sorkin recalls, "many crossed their fingers, hoping Goldman and the rest of Wall Street would be saved to halt the downward spiral. But now when the banks finally get back on their feet, we want them to fall flat again".

Like it or loathe it, one thing is unarguable: "Tenacious G" does seem to draw the winning hand in good times and, as we have seen recently, in bad. It begs one simple question. How? What’s in the special sauce? To try to find the answer, you have to leave Blankfein’s office and take the lift to the 17th floor. On the way, you hear investment bankers, traders, "strats" — strategists — and "quants", the mathematical lizard brains who dream up whizzy trading formulae, discussing "interest rate swaps", "no credit defaults", "exotic and vanilla options", "bid-ask spreads", "bunds", "bobls" and goodness knows what else. You can’t see the cash whizzing around 85 Broad Street as you walk through the place, but you can feel it being shuffled 24 hours a day between central, commercial and investment banks, vast companies, Russian oligarchs, Middle Eastern movers and sheikhers, Texas oilmen and secretive billionaires in Bermuda and the Cayman Islands.

In an office with an ink stain on the carpet, sits Liz Beshel. She’s the first ingredient of Goldman’s witches’ brew. The firm only hires the very, very brightest and they don’t come much sparkier than Beshel. The 40-year-old single mother talks so fast, and with such insight into financial markets, you practically need a degree from Harvard Business School to keep up. She was snapped up by Goldman straight from college and managed to get an executive MBA from Columbia University, New York, "on Fridays". As you do. She rose quickly though investment banking to become the firm’s youngest-ever global treasurer, the keeper of the cash. Today, every pound the firm invests, every yen it borrows, every dollar that flows on and off its balance sheet, is under her watchful eye, all $1 trillion a day of it. How much cash does the bank have right now? I ask. "$164.2 billion in cash or cash equivalents," she replies without pausing for thought or breath.

It is thanks to rat-tat-tat intellects like Beshel that Goldman Sachs not only has so much money, but tends to be good at hanging onto it. Staff rigorously price — "mark to market", in the jargon — the bank’s assets every day, down to the last cent, and forensically examine daily profit and loss. This helps the bank to see market trends clearly and early and, it believes, to manage risk better than most other banks. "We think we make better decisions," says Beshel. There’s evidence to support the claim. Take the sub-prime mortgage sector, the ticking toxic debt bomb that detonated the economic crisis. One year before bad home loans brought down Lehman and Bear Stearns, forced shotgun marriages of Merrill Lynch to Bank of America and HBOS to Lloyds, and made Royal Bank of Scotland a national joke, Goldman’s daily valuations revealed it had suffered modest losses in its mortgage holdings for just over a week. At most banks, the losses might have gone unnoticed or been dismissed as a rounding error, but Goldman convened a meeting of senior bankers to try to find out what was going on. Even though the housing and mortgage markets were still buoyant, the bank did not like what it saw and began reducing its exposure. When the credit crunch hit, its losses in the mortgage sector were only $1.7 billion, lower than any other big investment bank. UBS lost $58 billion.

Being smarter than the average bear is one thing, but to be a Goldmanite you have to work harder than the average bear too. Ask Sarah Smith, 50, a former convent schoolgirl from Bromley in Kent who left Britain to become Goldman’s chief accountant. "It’s a 24/7 culture," she says. "When you’re needed, you’re here. And if you’re needed and you’re not answering your phone, you won’t be needed very long."

Smith, whose office is a BlackBerry throw away from the Embassy Suites hotel where Goldman staff go for an hour or two’s sleep when they have been up so long that they start sleepwalking along the hallways, only had a few days’ holiday last year. How many weeks off does she get a year?

"I don’t know. No one really knows how much holiday you get because nobody ever takes it all."

The big brains and brutal work ethic help to give Goldman the edge when it comes to snagging the best, and richest, clients. One veteran Goldman banker explains: "You are programmed at an early stage to go out more than the other guy, to see more people — clients, hedge funds or private equity guys."

Goldman staffers are also trained to "brain pick" contacts and clients harder than the other guy. "You ask what’s their best trade. How do they see the market," says one. "You offer something in return, but you always come back with something. Then you feed it to colleagues who go to work trying to use the information to make money." Other banks do not get such good information, and what information individual bankers do get, they tend not to share because they regard it as power they can use to benefit individually. "Goldman is not like that," the veteran banker says. "It’s a team effort." Or, as one rival banker puts it, "They’re a clever gang — of thugs."

Dane Holmes, 39, Goldman’s head of investor relations, is a 6ft 8in tall, 260lb former college basketball player. He looks like he could run straight through opponents — hell, through brick walls! — if he wanted to. But, he says: "That’s not the way Goldman works. You can have a great career in banking as an individual, but it won’t be here. The system weeds out those who can’t play nicely with others."

When Goldman gets behind something, everyone in the giant hive wants a piece of the action. Take this article. Once the bank had agreed to talk, it was hard to get senior executives to shut up. One, Michael Sherwood, 44, co-boss of Europe, flew back to the firm’s London headquarters from the IMF meeting in Istanbul, via Moscow, for a 40-minute interview, before jetting off again straight away to see clients in the Gulf.

The idea of teamwork goes right to the top. Goldman may not be a private partnership any more — it went public a decade ago — but the bosses work hard to foster a "we’re in this together", family-style approach. Others say it feels more like a cult, but they mean it as a compliment. Some of its practices make perfect sense. Bonuses, for example, are not based on personal performance, as they are at many banks, but on the performance of the firm as a whole, and partners receive a sizable chunk of their remuneration in stock that they cannot sell until they leave the firm. It weeds out what Dina Powell, 36, the firecracker Egyptian-American boss of Goldman’s philanthropic arm, calls "egomaniac jerks" who might be tempted to bet the farm on red in the hope of skewering a bigger bonus.

Other practices are distinctly creepy. Goldman-ites are forced to check their secure voicemail morning, noon and night for the latest bon mots of Blankfein and Eileen Dillon, 48, who is officially head of operations for the executive office but unofficially camp counsellor. Goldman is the biggest user of voicemail in the world. The "mind bullets" consist of anything from the latest profit and loss figures, to reports of what the chief executives of key clients have told Blankfein and his top team over lunch, to instructions to "switch off on holiday, for goodness sake".

No calls to meet in the basement to club baby seals to death first thing in the morning to get in the mood for a hard day’s banking? "God, no," one staffer says wryly. "We don’t club baby seals. We club babies."

What makes people who are bright enough to do anything they want put up with the days-into-nights-into-days working and the dorkish corporate groupthink? There’s the money, of course. Goldman Sachs isn’t nicknamed "Goldmine Sachs" for nothing. There’s so much of the stuff sloshing around that in an average year a good investment banking partner will make $3.5m, a good trading partner $7-10m and a management committee member $15-25m. Some 953 employees got bonuses of at least $1m in 2008. Blankfein may insist he is still a blue-collar guy, but he manages to have a $30m apartment on Central Park West and a 6,500-square-foot home in the Hamptons, the summer playground of New York’s elite. One former Goldman banker describes the culture as "completely money-obsessed. I was like a donkey driven forward by the biggest, juiciest carrot I could imagine. Money is the way you define your success. There’s always room — need — for more. If you are not getting a bigger house or a bigger boat, you’re falling behind. It’s an addiction." Addiction is a word Sherwood uses, too. He should know. He’s on his second multi-million-pound super-yacht. "I like boats," he says. Not sailing, but boats. It’s his way of keeping up with, and in with, his friend the BHS billionaire, Sir Philip Green, who lives for part of the year on his 208ft, £32m yacht, Lionheart, which is moored in Monaco. "How many boats have I bought?" Sherwood says. "It’s not a good time to answer that. I’ll take the Fifth."

But there’s another powerful motivator: doubt. There may be arrogance at 85 Broad Street — behind closed doors, Blankfein likes to joke (but not really) that he has "attained perfection" — but behind the bravado, Goldmanites, curiously, question their ability. "There is a deep and constant paranoia about everything we do," says Sherwood. It applies to an individual’s performance and the prospects for the firm as a whole.

Insecurity is hard-wired into the system. You feel it even before you are hired. Most applicants are interviewed at least 20 times before they are made an offer and some more than 30 times. Once hired, each staff member is constantly and confidentially reviewed by those they work with. There’s a metric for every aspect of performance and each staffer is measured against their department and the firm as a whole. Every year, staff are put into one of four quartiles by the Human Capital Management department. Note the "Capital". At Goldman, people are money. The top are richly rewarded, while the fourth quartilers? Who cares? They won’t be around much longer. It’s up, or out. "We say goodbye to the bottom 3-5% every year [about 1,500 people]," says Richard Gnodde, 49, co-boss of the European operation, based in London.

Taking type-A people, making them feel like type-B people and moulding them into kick-ass teams that work every hour God — sorry, Goldman — sends, is important, no doubt. But it’s not Goldman’s killer app. That is its extraordinary networking ability. The firm is the greatest talent network in the world. Unlike at other banks, top performers are encouraged to get on, make all the money they will ever need in their thirties, then get out to "do good". The average tenure of a partner is eight years. "You don’t join for the retirement programme," says one staffer. "You have your phase of the moon to make money and then f*** off." But doing good does not mean running an HIV clinic in Kinshasa, it means getting top jobs in treasuries, central banks and stock exchanges around the world. The list of former Goldman executives who have held key posts in the US administration and vital global institutions in New York and Washington alone is mind-boggling. It includes: the treasury secretary under Bill Clinton (Robert Rubin); the treasury secretary under George Bush (Hank Paulson); the current president and former chairman of the New York Federal Reserve (William Dudley and Stephen Friedman); the chief of staff to the treasury secretary Timothy Geithner (Mark Patterson); the chief of staff under President Bush (Joshua Bolten); the economic adviser to the secretary of state, Hillary Clinton (Robert Hormats); the chairman of the US Commodity Futures Trading Commission (Gary Gensler); the under-secretary of state for economic, business, and agricultural affairs under President Bush (Reuben Jeffery); the past and current heads of the New York Stock Exchange (John Thain and Duncan Niederauer); the chief operating officer of the Securities and Exchange Commission’s enforcement division (Adam Storch). Moreover, Goldman’s new top lobbyist in Washington, Michael Paese, used to work for Barney Frank, the congressman who chairs the House Financial Services Committee. To put this in perspective, imagine that Alistair Darling, the chancellor, and his key advisers, Mervyn King, governor of the Bank of England, Xavier Rolet, the boss of the London Stock Exchange, and Hector Sants, head of the Financial Services Authority, all used to work at the same City firm before moving into government. Small wonder that another of Goldman’s nicknames is "Government Sachs".

Critics say having friends in high places gives the firm the vital edge. Key government officials, they argue, discuss policy — privately — with Goldman chiefs more than executives from other banks. In his new book, Too Big to Fail, Andrew Ross Sorkin reports one meeting. Blankfein’s predecessor, Paulson, had promised not to talk to Goldman when he moved from the bank to the US treasury, but last June he happened to be in Moscow at the same time that Goldman’s board of directors was having dinner there with Mikhail Gorbachev. Paulson got approval from treasury lawyers to meet his old chums, since it would be a "social event". Paulson proceeded to regale them with stories about his time in the treasury and his predictions for the global economy. Goldman’s board questioned him about the possibility of another bank blowing up, like Bear Stearns. Recently released documents reveal that a few months later, at the height of the crisis when Paulson was working on the bail-out of AIG, Blankfein’s name appeared on his call sheet 24 times in six days. Big banks that held AIG insurance contracts, including Goldman, were paid off in full, rather than at the 60 cents on the dollar that AIG negotiators had been pressing for, prompting allegations of a "sweetheart deal" between Paulson and Blankfein.

Goldman vigorously denies that having so many former staffers in top political posts means it receives special treatment. "These people are highly principled," says Sherwood. The Moscow meeting and the AIG deal call into question Sherwood’s claim, to put it mildly.

The more time you spend in 85 Broad Street, the more you get the feeling that Goldman is the overachieving child of globalisation. It has the best, brightest and hardest-working in global finance and government in its pocket. Even the critics agree. But they add that the well-greased machine does other things that ensure its success, things that the bank is less keen to talk about. While the whizzo teams might manage risk well and get out of bull markets at just the right time, they play their part in inflating the bubbles in the first place — and pocket a fortune doing so. Goldman has benefited from the upside of all the recent booms — dot.com, commodities, housing — and, critics say, was involved in stoking them by handling share offerings for big clients and by trading securities and debt before pulling back.

Detractors also accuse the bank’s trading and investment-banking arms of "playing both sides" of the market. Goldman trades securities for big firms and pension funds. It also acts as adviser to many of the companies whose securities it trades. This means the firm has a view on what everyone in the market is doing. Say an investor approaches Goldman and says it wants to buy into the oil market. Goldman can offer an accurate view of what is likely to happen in that market because it knows what its own corporate energy clients are doing on its advice and what other big investors are trading. This also means the bank can do well on its own oil trades. Critics liken this to a huge casino in which the house knows every hand at the table and uses that information to enrich itself at the expense of everyone else. Goldman dismisses charges of "casino capitalism". The more market information it has, it argues, the better it can advise companies and the better it can match buyers with sellers and get the best prices in the markets. It emphatically denies it misuses information or acts unethically. Strict "Chinese walls" between traders and advisers prevent any conflicts of interest. Regulations are so tight that if an investment banker so much as tries to enter a trading floor using their electronic office pass, not only will the pass not work, but he or she will be hauled in for questioning.

Whatever alchemy it uses, one thing is certain: Goldman has dodged the credit-crunch bullet and is emerging from the crisis stronger than ever. To the victor, the spoils. But the patient might find cheating death easier than pacifying the public. Many remain unconvinced that, while Goldman may be big and clever, it is a force for good. Vince Cable warns: "If we’ve learnt anything, it’s that banks have too much power over consumers and governments. Goldman Sachs has never been more powerful. That should alarm all of us."

World leaders and financial regulators are trying to draw up plans to limit what bank like Goldman can do and how they can pay their staff. With his bulldog-like belief in the purity and efficiency of the free market, you would not imagine this would be a fight Blankfein would relish. But the funny thing is, he’s up for it because he thinks it will make banking safer and enable Goldman to make even more money in future.

"Those government pronouncements that have come out so far are on the right track," he says. Paying staff for performance, and paying in deferred stock awards as well as cash to ensure long-term success, is "desirable and something we already do". "Greedy, but long-term greedy," is how Goldmanites describe the bank’s investment and payment policies. Blankfein backs proposals to ensure banks are better capitalised. "If we didn’t understand the limits of unfettered capitalism before, we sure do now. Anything that makes the system better, safer, is good for us." He might have added: just don’t impose any windfall tax on pay.

For Blankfein, in the end, it all comes down to one thing: finding the best, fastest, and safest way to make money with money, then make some more money, with money on top. He’s not interested in a reality check, just a bumper pay cheque for his clients, for his firm, for his staff, for his shareholders and, eventually, he believes, for us. His almost religious devotion to the dogma of finance is thrown into stark relief just before I walk out of the building with no name and find myself back in the autumn sunshine. I ask him the question that, in these troubled times, you’d think anyone — from the guy outside 85 Broad selling 99-cent chilli dogs to the gazillionaire King of Wall Street sitting 30 storeys above — would pause before answering. And then, perhaps, offer an equivocal, on-the-one-hand, on-the-other-hand answer, whether he means it or not. Is it possible to make too much money?

"Is it possible to have too much ambition? Is it possible to be too successful?" Blankfein shoots back. "I don’t want people in this firm to think that they have accomplished as much for themselves as they can and go on vacation. As the guardian of the interests of the shareholders and, by the way, for the purposes of society, I’d like them to continue to do what they are doing. I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation."

So, it’s business as usual, then, regardless of whether it makes most people howl at the moon with rage? Goldman Sachs, this pillar of the free market, breeder of super-citizens, object of envy and awe will go on raking it in, getting richer than God? An impish grin spreads across Blankfein’s face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker "doing God’s work"

How they make their money

Goldman Sachs’s name may not be on the high street, but if you bank with HSBC, cook with gas, shop with Ocado, watch Big Brother, buy clothes at Gap, use a TomTom satellite navigation system or simply enjoy the odd cheese-and-pickle sandwich, Goldman is part of your life.

The company is split into three divisions. It’s an investment bank that raises money for clients and sometimes invests its own money in businesses. In the UK, it has raised capital for HSBC, Centrica (owners of British Gas), and Ocado, the online grocery business backed by Waitrose that sells more than £400m-worth of food a year.

It helped to fund Endemol, makers of Big Brother, and is the biggest single investor in Eurotunnel. It has handled share issues for TomTom and J Crew. It is banker to Gap. It restructured Premier Foods, one of whose brands is Branston pickle. Goldman is also a trading house. It trades commodities, such as oil and gold, equities (shares in companies) and company debt. It raises money for governments by selling interest-bearing bonds to investors. The bank’s third division is asset management. It manages money on behalf of pension funds, insurance companies and wealthy individuals.

It makes money by charging hefty fees to the companies and clients it advises and whose assets it manages — typically 2-4%. It also makes profits from trading using its own cash, as it has done since its inauspicious beginnings.

The bank was founded in New York in 1869 by a Jewish immigrant from Bavaria, Marcus Goldman. His son-in-law, Samuel Sachs, later joined him. Shut out of the clubby, largely Protestant world of stock and bond trading, Goldman established a profitable, if unglamorous, niche buying and selling short-term corporate IOUs, known as commercial paper. By the turn of the century, the firm was pioneering the market for initial public offerings, handling the stock-market debuts of blue-chip companies such as Sears and Ford.

As Goldman started outside the cosy Wall Street establishment, it hired the smartest, most driven people it could find, who learnt to exploit market loopholes, snatch business from rivals and win favours from friends in high places. Under Sidney Weinberg, chief executive from 1930 to 1969, the bank forged top business graduates into ad-hoc teams that would work around the clock for clients

Overworked, overpaid, over here

Goldman Sachs may be a Wall Street bank, but its role and influence in London is huge. Around 5,500 people work in its Fleet Street office, which is, in fact, two former newspaper offices joined together. Traders sit where hot-metal printers used to lay out The Daily and Sunday Telegraph and The Daily and Sunday Express.

It is the most profitable bank in the City. Profits per employee averaged £181,000 a year between 2000 and 2008. Average pay this year is expected to be £458,000.

It is one of the top tax-payers in the City.

The Chancellor, Alistair Darling, stands to receive more than £2 billion in corporation tax, VAT and income tax this year.

Staffers enjoy lavish perks. The firm has its own chefs to make sure visiting guests can eat and drink with Goldman partners in style — and away from envious eyes. There is a company gym, a doctor’s surgery and a crèche. Every staffer gets private health insurance as standard. Staff can take a taxi on the firm pretty much whenever they want. Lines of black cabs snake around the back of the building at night.

The London office is run by Michael Sherwood (above) and Richard Gnodde. Sherwood, known as Woody, is the hard man. The former trader seems to model himself on his good friend, the BHS billionaire Sir Philip Green. He talks fast, in a no-bullshit style.

Like Sir Philip, his brash deal-making can get the better of him. In 2006, British Airports Authority asked Goldman to pitch for the brief to fend off a hostile takeover bid from Ferrovial, Spain’s construction giant. Goldman, whose team included Sherwood, said one tactic would be for Goldman itself to buy BAA. The move outraged BAA and prompted Goldman’s then CEO, Hank Paulson, to send a stern message upbraiding the executives involved. The note became known as ‘the spank from Hank’.

By contrast, Gnodde is a suave investment banker. He looks, and talks, like he has stepped out of a 1970s men’s knitwear catalogue. He is the velvet — or should that be cashmere? — glove to Woody’s iron fist. He is best known for advising the Indian steel tycoon Lakshmi Mittal in his £17-billion bid for the European producer Arcelor.

Sherwood and Gnodde are advised by part-time eminences grises, such as Lord (Brian) Griffiths, one-time special adviser to Margaret Thatcher who ran the prime minister’s policy unit from 1985 to 1990 and is a former director of the Bank of England. He is one of the bank’s international advisers and also acts as company pastor. ‘I had one guy who came to see me — I thought about his career — but he wanted to talk about the morality of banking. That was a long conversation,’ Griffiths recalls.

As a committed Christian and a trustee of the Archbishop of Canterbury’s Lambeth Fund, Griffiths is a useful PR tool. It was he, for instance, who spoke out last month to defend big bonuses. ‘If we said we’re not going to have as big bonuses or the same bonuses as last year, I think you’d find that lots of City firms could easily hive off their operations to Switzerland or the Far East,’ he told an audience at St Paul’s Cathedral.

Every year, at bonus time, Sherwood and Gnodde remind staff to keep a low profile, not to advertise their wealth. Most do. They invest their millions in property, mostly in secluded parts of Kensington, Regent’s Park, Fulham, Notting Hill Gate, Chelsea, Highgate and Hampstead. For many years, one partner, Julian Metherell, proudly drove around in a beaten-up red Nissan Sunny.

Not all Goldmanites avoid the headlines. An abiding tale of the boom years is how three London executives, Jennifer Moses and her husband, Ron Beller, and Scott Mead, had so much cash they did not notice when an assistant, Joyti De-Laurey, stole more than £4m from their accounts.

Goldmanites send their children to the same private schools and if they don’t like the ones in their area, they set up their own. Mead co-founded a prep school in Notting Hill, with 200 students from ages 4-14. The wives of Goldman Sachs employees also try to keep a low profile, devoting themselves to charity work and competitive grooming.

As in the US, the bank is closely linked to the government. Its former chief economist and partner, Gavyn Davies, is married to Gordon Brown’s special adviser Sue Nye. Under Tony Blair, Davies became chairman of the BBC. His successor as chief economist at Goldman, the late David Walton, was handed a seat on the Bank of England’s interest-rate setting Monetary Policy Committee. Paul Deighton, who is running the London Olympic Games organising committee, used to be Goldman’s chief operating officer.

Goldman is a key banking adviser to the government. Brown hired the bank to advise him on the sale of Northern Rock last year.

Friends in high places. Goldman's political web

US treasury secretaries, heads of the New York Stock Exchange, White House and Downing Street advisers — you name it, they’ve worked for Goldman Sachs. Here are just some of the Goldmanites with their fingers in the worldwide political pie

Sue Nye/Gordon Brown

Gordon Brown’s special adviser, Nye is married to Goldman’s former chief economist and partner Gavyn Davies. Under Tony Blair, Davies became chairman of the BBC. He resigned in 2004 after the Hutton Report

Robert Rubin/Bill Clinton

Rubin spent 26 years at Goldman before joining the Clinton administration as an economic adviser. He served as treasury secretary for four years from 1995, and remains an adviser to President Barack Obama

Hank Paulson/George Bush

Paulson was CEO of Goldman before becoming the US treasury secretary. At the height of the credit crunch, when Paulson was working on the AIG bail-out, Blankfein’s name appeared on Paulson’s call sheet 24 times in six days

Larry Summers/Barack Obama

Obama’s economic adviser Summers never worked directly for Goldman, but served in Clinton’s government under his mentor, Robert Rubin. Goldman paid Summers $135,000 to appear at a one-day speaking event in 2008 before Barack Obama came to power

Sachs in the City

Michael Sherwood: The vice chairman and co-chief executive of Goldman Sachs International. Known as Woody, he is renowned for his trading skills. His basic salary in 2008 was £415,000.

In a good year, he can expect a bonus to take his package to around £6m. He is one of two head honchos in London.

Richard Gnodde: The co-chief executive of Goldman Sachs International, Gnodde’s 2008 salary was £1.3m. A large chunk of this may have been a bonus. He is believed to have been the highest-paid director in London in 2007, taking home £11.7m. He took a 90% pay cut last year.

Matthew Westerman: The global head of equity capital markets. He should take home up to £5m with a bonus in 2009. A former Rothschild banker who cut his teeth in his thirties on stock-market flotations around Europe, he was lured to Goldman Sachs in 2000 to lead the European new issues division. He has been involved in company fundraisings this year, where Goldman has reaped huge profits, so is in line for a bumper bonus.

Yoel Zaoui: The head of European investment banking. He is likely to receive up to £5m in 2009.

An employee since 1988, Zaoui has had a meteoric rise. He achieved coveted partnership in just 10 years. He has often locked swords in European takeover battles with his older brother Michael, who had the same role at the rival bank Morgan Stanley.

Karen Cook: An MD of Goldman Sachs International and president of Goldman Sachs, Europe, Cook’s salary with bonus in 2009 could be up to £5m. A mother of six, she was co-head of UK corporate finance at the blue-chip bank Schroders before moving to Goldman in 1999. She has been involved in multi-billion-pound takeovers, such as Kraft’s £10.2 billion tilt at Cadbury.

Strenth in numbers

In 2007, the Goldman Sachs boss Lloyd Blankfein earned $68m, a record for any Wall Street CEO. A good investment banking partner at Goldman will make $3.5m a year, a good trading partner $7-10m a year, and a management committee member $15-25m.

Goldman is not the biggest bank in the world. ICBC, the Industrial and Commercial Bank of China, has 11 times the number of employees. Nor is it the richest. HSBC has assets of $2.4 trillion, against Goldman’s $1 trillion. And it’s not the biggest by market capitalisation. It’s worth $95 billion, compared with $201 billion for HSBC. But it is the most profitable.

Goldman makes more money per employee than any other bank — $222,000 a year on average between 2000 and 2008. JP Morgan Chase, its nearest rival, made annual profits of $133,000 per employee in the same period.

Goldman’s profits in the second quarter of this year were a record $3.4 billion.

Source - Times Online

Cuba

2009-11-09T21:10:00.003+05:30

American Diplomacy

2009-11-09T20:55:00.001+05:30

After the US Congress agreed a $7.5bn aid package for Pakistan this autumn, the Obama administration was taken aback by the seemingly ungrateful reaction of its intended recipients. Pakistani opposition politicians fumed about "colonialism" and "imperialism". Military men spoke angrily of insults to national sovereignty implied in conditions attached to the aid.

But particular hostility was directed at US plans to spend over $800m on building a new, heavily fortified embassy in Islamabad, to be protected by the private security contractor, DynCorp. The activities of contractors in Iraq, notably Blackwater, have become notorious in the Muslim world. In addition, expanded US "bunker consulates" were announced for Lahore and Peshawar.

"Just the other day we had a television debate on America wanting to colonise us," one Pakistani said. "How easy it was for us to believe this when we hear of Blackwater setting up camp in our cities, buying hundreds of homes, not being accountable to the laws of our country, of hundreds of US marines on our soil, being allowed to enter without visas, of the enormous new US embassy being built which is like a mini-Pentagon."

Despite such complaints, US plans are going ahead. They include a $405m replacement embassy building in Islamabad, the construction of a $111m office annexe to accommodate 330 workers, and new housing units costing $197m. In Peshawar, scene of a devastating Taliban car bomb attack on Wednesday, the US plans to buy the city's only five-star hotel and turn it into a sort of diplomatic Martello tower.

The US says the new facilities are needed because old premises are insecure and it must accommodate the "civilian surge" of diplomats and officials into Pakistan and Afghanistan ordered by Barack Obama. But the American expansion in Islamabad mirrors similar developments in other Muslim and foreign capitals that are focal points for the Pentagon's "long war" against Islamist extremism.

Shocked by the 1998 al-Qaida attacks on its Nairobi and Dar es Salaam embassies, the US has opened 68 new embassies and overseas facilities since 2001 and has 29 under design and construction, the state department's bureau of overseas buildings operations says. Total worldwide spending on embassy replacement has been put at $17.5bn.

In Kabul, Baghdad, Jakarta, Cairo and beyond, in "allied" cities such as London and Berlin, Washington is building, reinforcing or expanding slab-walled, fortress-like embassies that act as regional overseas HQs, centres of influence and intelligence-gathering, and problematic symbols of superpower.

Historically speaking, these formidable outposts are the 21st century equivalent of crusader castles, rising out of the plain, projecting superior force, and grimly dominating all they behold.

As in Pakistan, the new strongholds attract plenty of criticism, acting almost as magnets for trouble. The massively fortified $700m Baghdad embassy, the biggest US mission in the world with 1,200 employees, was dogged by construction delays and militant attacks before it finally opened in January this year. Now even the state department's own inspector-general has ruled that the 21-building, 104-acre encampment is too big. "The time has come for a significant right-sizing," a July report said.

The Kabul embassy, which is negotiating an $87m purchase of 30 to 40 additional acres, encountered a different kind of trouble last month after photographs emerged of embassy guards engaging in sex acts, pouring vodka on each other, and dancing naked round a fire. The guards were employed by another private security firm, ArmorGroup North America. The revelations underscored existing concerns about security contractors. Investigators concluded the embassy's safety had been seriously compromised.

Away from the frontline of America's wars, the unveiling last year of the new US embassy in Berlin, close by the Brandenburg Gate, brought strong objections of an aesthetic nature. Architectural experts queued up to lambast the squat, custard-coloured but bomber-proof building, deriding it as a "klotz" (lump) built by barbarians.

One newspaper compared the offending edifice to a maximum security prison, another to a council house, while Frankfurter Allgemeine Zeitung fumed: "There is hardly a modern building in existence, with the exception of nuclear bunkers and pesticide-testing centres, that is so hysterically closed off from public spaces as this embassy."

On present trends, Londoners face being similarly shut-out as the US embassy currently centrally located in Grosvenor Square, Mayfair, prepares to move to a brand new concrete citadel in wild, far-off but hopefully al-Qaida-free Wandsworth.

The way the new embassies tend to physically cut off America's diplomats from the countries they are supposed to connect with is one good reason, among many, why Washington might want to rethink its laager policy. While effective security is obviously important, the worldwide rise of America's diplomatic fortresses undermines the kind of "soft power" outreach and public diplomacy that the Obama administration earnestly espouses.

In a policy-setting speech in July, secretary of state Hillary Clinton stressed the US need to communicate directly with other countries from the bottom up. "Reaching out directly to people will encourage them to embrace cooperation with us, making our partnerships with their governments and with them stronger and more durable," she said.

That makes sense. But it's not the message citizens of Islamabad are hearing. When America speaks to Pakistanis and other Muslim countries, it too often sounds like it's shouting down from the battlements.

Source - Guardian

Vulnerable

2009-11-08T19:25:00.001+05:30

Human Resources Of America

2009-11-08T19:22:00.000+05:30

More than a third of American youth of military age are unfit for service, mainly because they are too fat or sickly, the Army Times reports, quoting the latest Pentagon figures.

Most of the rest are too dumb or have used too many drugs to qualify, the study shows.

The report says 35% of the 31 million Americans aged 17 to 24 are unqualified because of physical and medical issues.

"The major component of this is obesity," Curt Gilroy, the Pentagon's director of accessions, tells the Times. "We have an obesity crisis in the country. There's no question about it."

He also said young people, by and large, can't do push-ups.

"And they can't do pull-ups," Gilroy says. " And they can't run."

The Times says the Pentagon gets its data from the Centers for Disease Control, which has found that the percentage of youth 18 to 34 who are considered obese has jumped from 6% in 1987 to 23% now.

Here's the Pentagon's breakdown of the ineligible population, according to the Times:

* Medical/physical problems, 35%.
* Illegal drug use, 18%.
* Mental Category V (the lowest 10% of the population), 9%.
* Too many dependents under age 18, 6%.
* Criminal record, 5%.

The Times reports that Education Secretary Arne Duncan and a group of retired military officers will issue a report on Thursday warning that the situation is so dire it amounts to a threat to national security.

That study will show that when all factors are considered, 75% of military-age youth are not eligible to serve.

Source - USA Today

Shade

2009-11-01T22:25:00.002+05:30

Swiss Banking Under Threat?

2009-11-01T22:21:00.000+05:30

WHILE the spotlight has been on the aggressive drive by the US government to flush tax dodgers out of Switzerland, bankers there are instead grappling with the loss of a much richer clientele: Europeans.

Americans have made up no more than 5 per cent of Switzerland's $US1.8 trillion ($1.97 trillion) offshore-banking business. But European clients are steadily coming clean, spooked by threats of a crackdown by their own governments.

Non-resident, or offshore, clients make up about a third of Switzerland's private-banking business, with just more than half of those coming from other European countries. According to KPMG, as much as 80 per cent of the Europeans' money in Switzerland is undeclared. In all, KPMG reckons that tax evasion could represent up to 25 per cent of Switzerland's total private-banking market.

This weekend, Swiss banking giant UBS will hand over the names of 500 suspected American tax dodgers to the Internal Revenue Service, the first of 4450 names it will turn over as part of an August agreement between the US and Swiss governments. That accord marked a historic breach of Switzerland's cherished bank secrecy, and prodded many Swiss banks to refuse to take American clients for fear of falling foul of US laws.

Now, in the wake of the American crackdown, and Switzerland's co-operation, an exodus of European money is under way. According to consulting group McKinsey & Co, Western European money makes up 51 per cent of legacy assets in Switzerland, but only about a third of new money.

"It's a big mistake to say this is an American issue," says Philip Marcovici, a Zurich partner at law firm Baker & McKenzie. "The Europeans are right around the corner."

To be sure, the demise of the tax-dodging business is akin to a melting ice cube, and the speed at which it dissolves will depend on how aggressive European governments - whose rhetoric in clamping down on tax deadbeats has exceeded real action - will be. No other government has been as aggressive as the US has in putting up demands that the Swiss hand over names of suspected tax dodgers.

But there are signs of pressure. This past week, Italian tax authorities raided local offices of Swiss banks, in what Swiss bankers regard as an attempt to scare tax dodgers. And new treaties Switzerland has signed with France and the UK make it easier for those countries to pursue information on suspected tax dodgers.

The tax crackdown isn't the only factor driving European money away. Many European baby boomers are also anxious to bring money home to recapitalise sagging businesses or pass the money on to their children.

For Swiss banks, a fat business is slipping away. Citizens in Italy, Germany and France - the big three tax-dodging nations - stashed their money in Switzerland because of political unrest at home, high inflation and sky-high tax rates. They weren't always after high returns, and they complained little about performance and rarely visited their bankers, who typically had them sign discretionary mandates allowing the bank to act on their behalf. Higher fees on discretionary mandates mean such clients are twice as profitable as those who directly manage their accounts. Some bankers privately admit that the fees on undeclared money can be several times those on declared money.

Since around 2000, the bigger Swiss banks such as Credit Suisse, UBS, Julius Baer Group and Pictet & Cie have tried to diversify away from tax dodgers by opening branches in Italy, Germany and France and building big onshore businesses with these clients. They are also targeting new millionaires in Russia, the Middle East and Asia. With taxes low at home, investors in these countries are instead fleeing political instability. Indeed, Singapore, also courting these emerging-market millionaires, is now Switzerland's main offshore rival.

But the switch isn't painless. A recent presentation by Credit Suisse gave a rare peek into just how rich the undeclared business was. The bank expanded aggressively abroad over the past decade; between 2006 and the first half of this year, just 4 per cent of its net new money came from Western European clients bringing their money into Switzerland; 59 per cent flowed into its booking centres outside the country.

"Bank secrecy in itself cannot be a value proposition," said Walter Berchtold, head of private banking at Credit Suisse, at a presentation recently. "It is important to clients, but the tax angle of it cannot be the driver."

Dirk Hoffmann-Becking, an analyst at Sanford Bernstein reckons that Credit Suisse's operating profit margin on its business managing non-compliant money in Switzerland is 75 per cent - double the margin on its onshore business. The tax-avoidance business could account for 12 per cent to 15 per cent of the operating profit of Credit Suisse's private bank, according to Mr Hoffmann-Becking. As that business melts away, Credit Suisse could have trouble hitting its target of 40 per cent operating margin on the private bank, he says.

A spokesman for Credit Suisse said that the bank contests Mr Hoffmann-Becking's analysis, saying Mr Hoffmann-Becking incorrectly interpreted figures from a recent presentation to analysts. Mr Hoffmann-Becking stands by his report.

The low valuations for a raft of recent private-banking acquisitions also show the poor prospects for undeclared money. In October, Julius Baer paid just 2.3 per cent of managed assets for the Swiss portfolio of ING - far off the 5 per cent paid just a few years ago - in part because the book contains a large chunk of European clients.

According to analysts, the biggest losers will be the smaller banks, which don't have the resources to bulk up in the areas tax-compliant clients need. They will also struggle to open overseas offices to lure the new rich of the emerging markets.

Source - The Australian

Focus

2009-10-29T17:21:00.001+05:30

Slowly Breaking Free

2009-10-29T17:02:00.000+05:30

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

Flowering

2009-10-29T16:58:00.002+05:30

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

2009-10-29T16:44:00.001+05:30

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

Forest

2009-10-28T10:55:00.002+05:30

Iran Oil Bourse

2009-10-28T10:07:00.000+05:30

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

Bold

2009-10-25T08:44:00.002+05:30

Asian Union

2009-10-25T08:40:00.000+05:30

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

Revealed

2009-10-23T21:01:00.001+05:30

New Push For Vaccines

2009-10-23T17:40:00.001+05:30

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

Blues

2009-10-18T18:23:00.001+05:30

Human Trafficking

2009-10-18T18:07:00.002+05:30

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

Lines

2009-10-18T14:15:00.002+05:30

Sucre Over Dollar

2009-10-18T14:06:00.002+05:30

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

Jantar Mantar

2009-10-16T11:21:00.004+05:30

Dollar Fizz

2009-10-16T11:15:00.000+05:30

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

Splash

2009-10-15T18:42:00.002+05:30

What's In Store?

2009-10-15T18:38:00.001+05:30

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

Cuba

2009-10-11T12:07:00.002+05:30

Peace

2009-10-11T12:00:00.001+05:30

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
guardian.co.uk

"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

Thoughts

2009-10-08T15:35:00.003+05:30

Nonsense?

2009-10-08T15:27:00.001+05:30

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

Eden

2009-10-06T10:44:00.002+05:30