CNN) -- It is a criticism frequently leveled at those promoting wind or solar power as an alternative to fossil fuels: what happens when the wind doesn't blow or the sun doesn't shine?
Well, now there is a smart answer, at least in Europe -- we'll simply and instantly switch to another source of clean, green power.
Plans for a massive electricity grid dedicated to uniting the varied sources of renewable energy available in northern Europe have taken a step forward in January as nine countries formally agreed to work together on the project.
Using thousands of miles of high-tech undersea cables the 'supergrid' will unite wind farms on blustery British coasts with Dutch and Belgian tidal power, the vast hydroelectric potential of Norway fjords and Germany's massive solar arrays.
The gird should mean that when one source falls short, another takes up the slack to ensure continuity of supply.
"A North Sea grid will connect offshore wind to our electricity supply, enabling Europe to exploit its largest untapped energy source," Justin Wilkes, policy director, European Wind Energy Association (EWEA), told CNN.
"It will connect grids across northern Europe -- bringing more competition into the market and reducing electricity prices. Europe's dependence and spending on imported fossil fuels will be reduced."
The countries signed up -- Germany, France, Belgium, the Netherlands, Luxembourg, Denmark, Sweden, Ireland and the UK -- hope to have the grid working within the next decade. It is seen as an essential step towards the European Union's pledge to source 20 percent of its electricity from renewables by 2020.
"Without extending and upgrading the grid Europe will not be able to make the emissions reductions it wants, or achieve the level of renewable energy it has set as a target," says Wilkes.
There are currently around 100 gigawatts of offshore wind projects being developed in Europe, which could meet 10 percent of the EU's electricity needs. But existing grids aren't capable of fully taking advantage of this potential.
"Europe's grids are built around large fossil-fuel plants near large urban areas and nuclear power stations," says Wilkes.
"Wind and other renewable sources of energy are often best tapped in other places -- so the grid needs to be extended and upgraded to deliver electricity from where the renewable energy sources are to be found -- where the wind is blowing, where the sun is shining and so on."
Advocates of renewable energy believe that moving away from fossil fuels will create thousands of high-quality "green jobs" and provide a boost to the European economy.
"A North Sea Grid would be a boost for the wind energy business -- it would enable Europe to build a new multi-billion Euro offshore wind industry -- and provide new markets for on-shore wind too," says Wilkes.
"[But] a North Sea Grid would not just be a boost for the wind industry but for all renewable energy sources, including wave and tidal power, and for consumers. It would be good news all round."
Of course, none of this will come cheap. The EWEA estimates the cost for building a grid connecting countries across the North Sea region including the Baltic Sea, Irish Sea and English Channel would cost in the region of $40 billion. A report by Greenpeace in 2008 came in lower, putting the price of building a similar grid at $20-30 billion.
"Transmission of energy from wind and other marine resources that are a long way offshore is expensive," Tim Russell, grid expert for the Renewable Energy Association, told CNN.
"Interconnectors between different power systems separated by long distances and water are also expensive -- but can have considerable advantages in terms of increased trade thereby providing economic benefits.
"It is anticipated that increased wind power will increase the benefits of greater interconnection between power systems."
Any investment would certainly be a step closer to the idea of a pan-European "supergrid", a scheme that would unite renewable power across the continent with proposed African and Middle Eastern solar farms, and already has political support from UK Prime Minister Gordon Brown and French President Nicolas Sarkozy.
"The North Sea region grid would be a very important first part of an eventual European supergrid," says Wilkes.
"But such a supergrid would also require better connections across the borders of France, Germany, Sweden, Greece and across southern Europe and the Mediterranean in general."
None of this will happen overnight, but EWEA believe it is feasible for 100 percent of Europe's electricity to come from renewable sources by 2050.
"There are technological barriers for some renewables, but in wind we have proven technology that delivers competitively," says Wilkes.
"Other obstacles for wind are administrative in getting planning permissions and grid access. There is also currently a financial obstacle caused by the lack of credit following the financial crisis, but EWEA is optimistic that this should not be a long-term problem."
Whatever the future holds, for the moment green campaigners are delighted.
"International support for a supergrid is fantastic -- it will secure plentiful, clean and reliable sources of energy such as offshore wind, and help slash carbon emissions," Friends of the Earth's energy campaigner Nick Rau told CNN.
"Now we need the funding and industrial strategy to put words into action."
Sunday, January 31, 2010
US speeds up its own and Gulf allies' preparations for clash with Iran
The Obama administration took the unusual step Saturday night, Jan. 30, of leaking word to major US media that the United States, Saudi Arabia and Gulf allies - the United Arab Emirates, Kuwait and Bahrain - have accelerated the deployment of new defenses against possible Iranian missile attacks. They are preparing for Iran, or its surrogate Hizballah, to hit back for a possible US or strikes on Tehran's nuclear facilities.
debkafile's US military sources confirm that Washington plans to treble the 10,000-strong US troop contingent, already present in Saudi Arabia for guarding its oil fields and port facilities against medium or short-range Iranian missile attack, or sabotage by Hizballah marine units trained for their mission by Iran's Revolutionary Guards Corps.
Additional US Aegis missile interceptor cruisers with advanced radar and anti-missile systems were also reported to be heading for round-the-clock patrol around Iranian shores, with more Patriot anti-missile missiles to reinforce the eight batteries already deployed in the four emirates.
The Obama administration set these exceptional steps in motion, debkafile reports, in anticipation of nuclear provocations from Tehran while the regime celebrates the 31st anniversary of the Islamic revolution from Feb.1-11.
President Mahmoud Ahmadinejad has promised to announce Iran's attainment of a 20 percent uranium enrichment capability, a short step to weapons grade material.
Some high-ranking Revolutionary Guards officers have also said that Iran will parade a new type of surface missile during the celebrations, without revealing its features, while Iranian space scientists predicted the launch of a new spy satellite of the Toloo series.
All this was taken in Washington as a challenge that could not be left without an appropriate response. Administration officials also feared that Israel might be goaded into going forward with a military operation against Iran's nuclear facilities. The Gulf Arab states were in need of reassurance too.
The White House's decision to deploy additional defenses in the Gulf came only a day after National Security Adviser James Jones warned that Iran was liable to react to pressure by having its proxies Hizballah and Hamas attack Israel. The abruptness of this step pointed to the administration having woken up to the realization that its diplomatic and military position in the region was in grave jeopardy and in dire need of shoring up without delay.
debkafile's US military sources confirm that Washington plans to treble the 10,000-strong US troop contingent, already present in Saudi Arabia for guarding its oil fields and port facilities against medium or short-range Iranian missile attack, or sabotage by Hizballah marine units trained for their mission by Iran's Revolutionary Guards Corps.
Additional US Aegis missile interceptor cruisers with advanced radar and anti-missile systems were also reported to be heading for round-the-clock patrol around Iranian shores, with more Patriot anti-missile missiles to reinforce the eight batteries already deployed in the four emirates.
The Obama administration set these exceptional steps in motion, debkafile reports, in anticipation of nuclear provocations from Tehran while the regime celebrates the 31st anniversary of the Islamic revolution from Feb.1-11.
President Mahmoud Ahmadinejad has promised to announce Iran's attainment of a 20 percent uranium enrichment capability, a short step to weapons grade material.
Some high-ranking Revolutionary Guards officers have also said that Iran will parade a new type of surface missile during the celebrations, without revealing its features, while Iranian space scientists predicted the launch of a new spy satellite of the Toloo series.
All this was taken in Washington as a challenge that could not be left without an appropriate response. Administration officials also feared that Israel might be goaded into going forward with a military operation against Iran's nuclear facilities. The Gulf Arab states were in need of reassurance too.
The White House's decision to deploy additional defenses in the Gulf came only a day after National Security Adviser James Jones warned that Iran was liable to react to pressure by having its proxies Hizballah and Hamas attack Israel. The abruptness of this step pointed to the administration having woken up to the realization that its diplomatic and military position in the region was in grave jeopardy and in dire need of shoring up without delay.
Does Apple Have an iDud on Its Hands?
(Jan. 29) -- Normally, when Steve Jobs appears on stage, techies swoon. And there was certainly some of that when Jobs unveiled the iPad on Wednesday.
"I'm positively giddy," says Slate writer Farhad Manjoo. And Gizmodo tech editor Joel Johnson enthused that "Only way to interpret the launch of the iPad? Apple has declared the PC dead."
But something unusual has emerged in what has been called the Jobs Reality Distortion Field. Tech writers are starting to rebel against the iPad -- a sign that one of the most-loved consumer technology brands may have a significant iDud on its hands.
As New York magazine notes in its roundup of coverage: "the iPad backlash is in full swing," and "it seems everyone's eager to toss a little haterade Apple's way."
From Engadget: Apple iPad: The Definitive Guide
From DailyFinance: Will iPad be the death of the PC?
Frankly, it does seem unclear just how many people really want (let alone need) a phone-laptop hybrid without the advantages of either.
Start with its size. It's 9.7 inches diagonally and weighs 1.5 pounds. That's light by laptop standards, but much more cumbersome than a mobile phone. But it's not a phone; you can't make calls on it unless you use an Internet service such as Skype. And you can't stick it in your pocket or take it jogging. So, like a laptop or e-reader device like the Kindle, it'll require a case. But since there's no conventional keyboard attached -- what you get is a larger version of the iPhone's onscreen interface -- it's unlikely anyone will type reports or anything of length on the device.
Then there's the lack of what have become widely accepted features.
There's no multitasking. "Are you saying I can't listen to Pandora while writing a document? I can't have my Twitter app open at the same time as my browser? I can't have AIM open at the same time as my email? Are you kidding me? This alone guarantees that I will not buy this product," Gizmodo's Adam Frucci writes.
There's also no Adobe Flash support, so the only way to watch streaming movies is on YouTube, not on Hulu or Netflix. And there are no ports to hook up other devices.
There's no camera. No GPS on the base model. It's not compatible with wide-screen movies. It only runs optimally using AT&T.
"With only one connector port and a headphone jack, the iPad is a connectivity nightmare, since you'll have to buy adapters for everything from USB to SD cards. Not to mention that you're restricted to a wireless-only connection without an Ethernet port," Geeksugar complains.
All in all, that's a lot of deficiencies for a toy that costs at least $499 and as much as $829, not including a data plan that can run an additional $360 per year.
Which may explain why estimates for first-year sales of the iPad range widely, from 1 million to 5 million -- in other words, anything from a bust to a great success.
Of course, there are no shortage of Apple defenders. "[R]emember how silly you all looked when you all predicted the iPhone's demise in that period before it went on sale," The New York Times' David Pogue writes. "Like the iPhone, the iPad is really a vessel, a tool, a 1.5-pound sack of potential. It may become many things."
As Slate's media critic Jack Shafer points out, Apple has had its share of flops in the past. "If the press corps possessed any institutional memory, it would recall the introduction of the Apple III+, the Lisa, the Macintosh Portable, the Mac TV, the Newton, the Apple G4 Cube, and eWorld. All were greeted with great press fanfare before falling off the edge of the world."
Shafer is right, except for the fact that few companies have had as long a winning streak as Apple has in recent years, which would make the iPad a bigger problem for Apple should it flop.
Of course, the jury is out on that until April, then the iPad actually hits the stores. At which point Jobs had better hope consumers haven't fallen out of love with Apple, too.
Filed under: Nation, Money, Tech, Only On AOL News
"I'm positively giddy," says Slate writer Farhad Manjoo. And Gizmodo tech editor Joel Johnson enthused that "Only way to interpret the launch of the iPad? Apple has declared the PC dead."
But something unusual has emerged in what has been called the Jobs Reality Distortion Field. Tech writers are starting to rebel against the iPad -- a sign that one of the most-loved consumer technology brands may have a significant iDud on its hands.
As New York magazine notes in its roundup of coverage: "the iPad backlash is in full swing," and "it seems everyone's eager to toss a little haterade Apple's way."
From Engadget: Apple iPad: The Definitive Guide
From DailyFinance: Will iPad be the death of the PC?
Frankly, it does seem unclear just how many people really want (let alone need) a phone-laptop hybrid without the advantages of either.
Start with its size. It's 9.7 inches diagonally and weighs 1.5 pounds. That's light by laptop standards, but much more cumbersome than a mobile phone. But it's not a phone; you can't make calls on it unless you use an Internet service such as Skype. And you can't stick it in your pocket or take it jogging. So, like a laptop or e-reader device like the Kindle, it'll require a case. But since there's no conventional keyboard attached -- what you get is a larger version of the iPhone's onscreen interface -- it's unlikely anyone will type reports or anything of length on the device.
Then there's the lack of what have become widely accepted features.
There's no multitasking. "Are you saying I can't listen to Pandora while writing a document? I can't have my Twitter app open at the same time as my browser? I can't have AIM open at the same time as my email? Are you kidding me? This alone guarantees that I will not buy this product," Gizmodo's Adam Frucci writes.
There's also no Adobe Flash support, so the only way to watch streaming movies is on YouTube, not on Hulu or Netflix. And there are no ports to hook up other devices.
There's no camera. No GPS on the base model. It's not compatible with wide-screen movies. It only runs optimally using AT&T.
"With only one connector port and a headphone jack, the iPad is a connectivity nightmare, since you'll have to buy adapters for everything from USB to SD cards. Not to mention that you're restricted to a wireless-only connection without an Ethernet port," Geeksugar complains.
All in all, that's a lot of deficiencies for a toy that costs at least $499 and as much as $829, not including a data plan that can run an additional $360 per year.
Which may explain why estimates for first-year sales of the iPad range widely, from 1 million to 5 million -- in other words, anything from a bust to a great success.
Of course, there are no shortage of Apple defenders. "[R]emember how silly you all looked when you all predicted the iPhone's demise in that period before it went on sale," The New York Times' David Pogue writes. "Like the iPhone, the iPad is really a vessel, a tool, a 1.5-pound sack of potential. It may become many things."
As Slate's media critic Jack Shafer points out, Apple has had its share of flops in the past. "If the press corps possessed any institutional memory, it would recall the introduction of the Apple III+, the Lisa, the Macintosh Portable, the Mac TV, the Newton, the Apple G4 Cube, and eWorld. All were greeted with great press fanfare before falling off the edge of the world."
Shafer is right, except for the fact that few companies have had as long a winning streak as Apple has in recent years, which would make the iPad a bigger problem for Apple should it flop.
Of course, the jury is out on that until April, then the iPad actually hits the stores. At which point Jobs had better hope consumers haven't fallen out of love with Apple, too.
Filed under: Nation, Money, Tech, Only On AOL News
Thursday, January 28, 2010
Republicans Gloat as First Lady Glowers
John Boehner rolled his eyes repeatedly and laughed. Michelle Obama glowered at Republicans. A Supreme Court justice shook his head in disagreement with the president.
The House chamber was a study in contrasts and reactions Wednesday night during President Obama’s State of the Union address.
Republicans appeared far more buoyant than Democrats, feeling a sense of renewal after the Democrats defeat in Massachusetts. Almost to a man, the GOP lawmakers were standing in anticipation of Obama’s entrance into the hall. They joked, they laughed. Almost all of the Senate Democrats were seated. Senate Majority Leader Harry Reid saw a House lawmaker walk past with his suit jacket pocket askew. Reid reached up from his seat and pulled the pocket flap out.
Many of the Democrats looked shell-shocked, still, after Massachusetts, and the near demise of health-care reform. (After the speech Sen. Sherrod Brown, Ohio Democrat, went so far as to say that his party “really didn’t have all the votes we needed” over the past year, despite having a filibuster-proof 60-seat majority from July until earlier this month).
The most animated of the Republicans was the House leadership: Boehner, Eric Cantor, Thad McCotter and Paul Ryan. Their emotions and opinions were on full display throughout the president’s speech. They looked cocky and eager for a fight, in contrast to the more reserved Senate Republicans.
The House GOP leaders reacted to the president’s words with a mixture of disbelief and barely disguised scorn. Their first applause came several minutes into the speech, when the president mentioned jobs. They rose as a group and roared in quasi-mocking approval, appearing to taunt the president and Democratic lawmakers for spending the last year on health care reform.
Moments earlier, Obama acted surprised that Republicans had not applauded his talk of tax cuts.
“I thought I’d get some applause,” Obama said.
Boehner lifted up his hands palms up, raised his eyebrows, and shrugged, as if to say, “Better luck next time.”
When the president came to health care, he said he was open to ideas other than those that have so far been on the table.
“If anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know,” Obama said.
Boehner raised his right hand above his shoulder.
“Whoa,” he said. “That’s our plan.”
First Lady Michelle Obama did not look pleased. She gestured toward the Republicans as she spoke to the woman to her right.
But House Democrats directed their anger at members of their own party in the Senate. They cheered several times when Obama mentioned bills passed by the House that have stalled in the Senate, on health care, climate change, and a jobs bill.
“Republicans are the opposition but the Senate is the enemy,” said Rep. Anthony Weiner, the liberal firebrand from New York, after the speech.
“The Senate I think was properly chided. They’re not the cooling saucer of our democracy, they’re like the meat locker at this point. I think it was important that the president held that up,” Weiner said.
When Obama called on the Senate to pass the jobs bill already approved by the House, a House lawmaker called out, “Do something!”
The first lady and House Democrats were not the only ones whose discontent was obvious. Supreme Court Justice Samuel Alito reacted visibly to the president’s criticism of the court’s decision last week remove barriers to large-scale political donations from corporations and unions.
When Obama said the decision will “open the floodgates for special interests,” Alito scowled and shook his head several times. The president’s criticism of the justices was surprising enough, but such a reaction from a justice in the chamber was even more of a shock.
The president scored his first solid punches of the night against his opposition when he whacked Republicans for leaving him with a huge deficit and an economy in tatters. The smirks disappeared from Republican faces. House Majority Leader Steny Hoyer stood, clapping loudly and laughing as he looked over the chamber at his GOP colleagues.
But afterward, Rep. Tom Price, the chairman of the Republican Study Committee, said he thought Democrats were “a little more subdued” than last year.
“I think we’re confident that where we stand is with the American people,” Price said.
The House chamber was a study in contrasts and reactions Wednesday night during President Obama’s State of the Union address.
Republicans appeared far more buoyant than Democrats, feeling a sense of renewal after the Democrats defeat in Massachusetts. Almost to a man, the GOP lawmakers were standing in anticipation of Obama’s entrance into the hall. They joked, they laughed. Almost all of the Senate Democrats were seated. Senate Majority Leader Harry Reid saw a House lawmaker walk past with his suit jacket pocket askew. Reid reached up from his seat and pulled the pocket flap out.
Many of the Democrats looked shell-shocked, still, after Massachusetts, and the near demise of health-care reform. (After the speech Sen. Sherrod Brown, Ohio Democrat, went so far as to say that his party “really didn’t have all the votes we needed” over the past year, despite having a filibuster-proof 60-seat majority from July until earlier this month).
The most animated of the Republicans was the House leadership: Boehner, Eric Cantor, Thad McCotter and Paul Ryan. Their emotions and opinions were on full display throughout the president’s speech. They looked cocky and eager for a fight, in contrast to the more reserved Senate Republicans.
The House GOP leaders reacted to the president’s words with a mixture of disbelief and barely disguised scorn. Their first applause came several minutes into the speech, when the president mentioned jobs. They rose as a group and roared in quasi-mocking approval, appearing to taunt the president and Democratic lawmakers for spending the last year on health care reform.
Moments earlier, Obama acted surprised that Republicans had not applauded his talk of tax cuts.
“I thought I’d get some applause,” Obama said.
Boehner lifted up his hands palms up, raised his eyebrows, and shrugged, as if to say, “Better luck next time.”
When the president came to health care, he said he was open to ideas other than those that have so far been on the table.
“If anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know,” Obama said.
Boehner raised his right hand above his shoulder.
“Whoa,” he said. “That’s our plan.”
First Lady Michelle Obama did not look pleased. She gestured toward the Republicans as she spoke to the woman to her right.
But House Democrats directed their anger at members of their own party in the Senate. They cheered several times when Obama mentioned bills passed by the House that have stalled in the Senate, on health care, climate change, and a jobs bill.
“Republicans are the opposition but the Senate is the enemy,” said Rep. Anthony Weiner, the liberal firebrand from New York, after the speech.
“The Senate I think was properly chided. They’re not the cooling saucer of our democracy, they’re like the meat locker at this point. I think it was important that the president held that up,” Weiner said.
When Obama called on the Senate to pass the jobs bill already approved by the House, a House lawmaker called out, “Do something!”
The first lady and House Democrats were not the only ones whose discontent was obvious. Supreme Court Justice Samuel Alito reacted visibly to the president’s criticism of the court’s decision last week remove barriers to large-scale political donations from corporations and unions.
When Obama said the decision will “open the floodgates for special interests,” Alito scowled and shook his head several times. The president’s criticism of the justices was surprising enough, but such a reaction from a justice in the chamber was even more of a shock.
The president scored his first solid punches of the night against his opposition when he whacked Republicans for leaving him with a huge deficit and an economy in tatters. The smirks disappeared from Republican faces. House Majority Leader Steny Hoyer stood, clapping loudly and laughing as he looked over the chamber at his GOP colleagues.
But afterward, Rep. Tom Price, the chairman of the Republican Study Committee, said he thought Democrats were “a little more subdued” than last year.
“I think we’re confident that where we stand is with the American people,” Price said.
“Pretty Much Everyone Hates Obama.”
After a year in which his administration’s policies helped produce some of the best years on record for Wall Street firms, President Barack Obama has been struggling to recast himself as an adversary of the banks.
He seems to have succeeded in taking on this role with one important group—the bankers themselves.
“Pretty much everyone hates Obama,” a senior trader at a major Wall Street firm told us.
"He's never been popular but this is a whole new level," he said.
The trader explained that the thought the Obama administration’s plans were worse than unworkable.
“It’s one thing if he proposes something we don’t like, that we disagree with. But when he puts forth this thing, none of it backed with any thoughtfulness about how things work…it really pisses people off,” he said.
The trader was referring to the so-called Volcker Rule, which would ban banks from engaging in proprietary trading or owning hedge funds. He explained that the way banks carry out proprietary trading makes the ban unworkable.
“Every single trading desk that is engaged in market making also does proprietary trading, taking a position on the market. You cannot unscramble the egg,” he said.
He also said that the ban on hedge fund investing by banks was impractical.
“No institutional investor will ever go into an alternative investment product if the bank doesn’t also have skin the in game,” he said. “The whole concept doesn’t work.”
He critiqued the rule as misdirected, arguing that the problem at banks wasn’t prop trading and the crisis didn’t originate solely in commercial banks. What’s more, he explained that he thinks it is unwise to allow Goldman or Morgan Stanley to remain outside the rules if they choose to reject the bank label and cut themselves off from access to the discount window.
“Look at Bear, Lehman. They weren’t banks. But it was their collapse that bought everything to the edge,” he said. “And now the new rules may wind up exempting Goldman and Morgan Stanley? How does that make sense?”
He expects the final version of the rules will be very “watered-down.”
“London isn’t on board with the Volcker Rule. There’s no way they are going to put us at such a competitive disadvantage,” he said.
He seems to have succeeded in taking on this role with one important group—the bankers themselves.
“Pretty much everyone hates Obama,” a senior trader at a major Wall Street firm told us.
"He's never been popular but this is a whole new level," he said.
The trader explained that the thought the Obama administration’s plans were worse than unworkable.
“It’s one thing if he proposes something we don’t like, that we disagree with. But when he puts forth this thing, none of it backed with any thoughtfulness about how things work…it really pisses people off,” he said.
The trader was referring to the so-called Volcker Rule, which would ban banks from engaging in proprietary trading or owning hedge funds. He explained that the way banks carry out proprietary trading makes the ban unworkable.
“Every single trading desk that is engaged in market making also does proprietary trading, taking a position on the market. You cannot unscramble the egg,” he said.
He also said that the ban on hedge fund investing by banks was impractical.
“No institutional investor will ever go into an alternative investment product if the bank doesn’t also have skin the in game,” he said. “The whole concept doesn’t work.”
He critiqued the rule as misdirected, arguing that the problem at banks wasn’t prop trading and the crisis didn’t originate solely in commercial banks. What’s more, he explained that he thinks it is unwise to allow Goldman or Morgan Stanley to remain outside the rules if they choose to reject the bank label and cut themselves off from access to the discount window.
“Look at Bear, Lehman. They weren’t banks. But it was their collapse that bought everything to the edge,” he said. “And now the new rules may wind up exempting Goldman and Morgan Stanley? How does that make sense?”
He expects the final version of the rules will be very “watered-down.”
“London isn’t on board with the Volcker Rule. There’s no way they are going to put us at such a competitive disadvantage,” he said.
Wednesday, January 27, 2010
Oregon's Death Spiral; Business Owners Say "I'm moving out"
On Tuesday, unions in Oregon won a charred earth victory that will drive already troubled Oregon, straight off the cliff.Oregon voters passed Measure 66 which raises tax rates on individuals who earn more than $125,000 and couples with incomes greater than $250,000. Voters also passed Measure 67 which increases business taxes.Please consider Oregon voters pass both tax measures.
Oregon voters on Tuesday approved tax hikes on businesses and the wealthy, allowing legislators to avert budget cuts they said would have affected schools and services for the poor and elderly.The most recent reports had labor outspending business in one of the state's most expensive issue campaigns. Common Cause of Oregon said Guiney's group raised $6.85 million to the $4.55 million raised by Oregonians Against Job-Killing Taxes."The bottom line is the unions bought the election," said State Republican Chairman Bob Tiernan. "It's going to be a sadder day as more businesses leave the state and more don't want to come here."Passage of the measures spares the Legislature a month of budget-cutting when it starts a four-week session Monday."I'm moving out"Please consider an email from one business owner in response. "C.S." Writes ....
Mish:Don't know if you noticed but Oregon narrowly passed another tax increase today. As a business owner for 25 years in Oregon, I'm moving out, going to Washington. Many other business owners I talk to are saying the same thing. They are all getting out. One of them refused to renew his commercial lease until seeing the results of 66/67 tax measures. He'll be moving out also.Tektronix last year decided to get out as well, and they are moving 80% of what is left to Shanghi China. Many other companies have also left in the last couple years. Oregon will now be tied with Hawaii at 11% income tax, the highest in the US.Moreover, they have added a tax now on gross revenue. It doesn't make any difference if you are losing money and trying to survive. They want to skim the top. Wasn't this the technique used by the Mafia?If that's not bad enough already, the City of Portland is talking about massive tax increases. If you're a business in the city limits, the tax/business license fee has been 2.2%. They now want to increase it to 8%, a 400% increase. In that case, a business in the city limits of Portland will pay 11% income tax to the state and 8% income tax to the city: 19% city/state income tax, on top of the Federal 35% income tax.Last year Oregon's unemployment was 12.5%, one of the very highest in the US. Two large Malls went bust in 2009 and there are entire blocks of empty retail locations. There is so much commercial space up for lease the FOR LEASE signs run up and down the streets everywhere.One major decided he didn't like the number of signs and tried to pass an ordinance to restrict the signs. He said "It looks bad, like the city is going broke." His remedy: hide the problem.One small company said it would have to terminate 2 more of their employees if 66/67 passed. That's just a sample. Oregon unemployment is headed much higher.
Oregon voters on Tuesday approved tax hikes on businesses and the wealthy, allowing legislators to avert budget cuts they said would have affected schools and services for the poor and elderly.The most recent reports had labor outspending business in one of the state's most expensive issue campaigns. Common Cause of Oregon said Guiney's group raised $6.85 million to the $4.55 million raised by Oregonians Against Job-Killing Taxes."The bottom line is the unions bought the election," said State Republican Chairman Bob Tiernan. "It's going to be a sadder day as more businesses leave the state and more don't want to come here."Passage of the measures spares the Legislature a month of budget-cutting when it starts a four-week session Monday."I'm moving out"Please consider an email from one business owner in response. "C.S." Writes ....
Mish:Don't know if you noticed but Oregon narrowly passed another tax increase today. As a business owner for 25 years in Oregon, I'm moving out, going to Washington. Many other business owners I talk to are saying the same thing. They are all getting out. One of them refused to renew his commercial lease until seeing the results of 66/67 tax measures. He'll be moving out also.Tektronix last year decided to get out as well, and they are moving 80% of what is left to Shanghi China. Many other companies have also left in the last couple years. Oregon will now be tied with Hawaii at 11% income tax, the highest in the US.Moreover, they have added a tax now on gross revenue. It doesn't make any difference if you are losing money and trying to survive. They want to skim the top. Wasn't this the technique used by the Mafia?If that's not bad enough already, the City of Portland is talking about massive tax increases. If you're a business in the city limits, the tax/business license fee has been 2.2%. They now want to increase it to 8%, a 400% increase. In that case, a business in the city limits of Portland will pay 11% income tax to the state and 8% income tax to the city: 19% city/state income tax, on top of the Federal 35% income tax.Last year Oregon's unemployment was 12.5%, one of the very highest in the US. Two large Malls went bust in 2009 and there are entire blocks of empty retail locations. There is so much commercial space up for lease the FOR LEASE signs run up and down the streets everywhere.One major decided he didn't like the number of signs and tried to pass an ordinance to restrict the signs. He said "It looks bad, like the city is going broke." His remedy: hide the problem.One small company said it would have to terminate 2 more of their employees if 66/67 passed. That's just a sample. Oregon unemployment is headed much higher.
Toyota halts sales of eight recalled models
Toyota said on Tuesday that it was temporarily halting sales of eight models in North America, including some of its most popular vehicles, involved in a wide-ranging recall related to jammed accelerator pedals.
Five assembly plants in the US and Canada will shut next week “to assess and co-ordinate activities”, the Japanese carmaker said.
The recall, involving 2.3m vehicles, has become a major embarrassment for Toyota, threatening its reputation for quality and reliability in the US market, which accounts for about a quarter of its sales.
Bob Carter, head of the Toyota brand in the US, said that “this action is necessary until a remedy is finalised. Helping ensure the safety of our customers and restoring confidence in Toyota are very important to our company.”
The vehicles in question include some versions of the Camry, the US’s top-selling sedan; the smaller Corolla; the RAV4 sport-utility vehicle; and the Tundra pick-up truck.
Toyota first acknowledged a problem with accelerators in September following the death of a California highway patrol officer and three family members in a high-speed crash. It initially blamed out-of-position floor mats.
Two months later, it said that it would replace accelerator pedals on 4.2m vehicles.
But in issuing the vehicle recall last week, it said that the problem appeared to be the result of condensation build-up in some accelerator mechanisms, which could cause sliding parts to expand and jam.
It added on Tuesday that further investigation had revealed that “there is a possibility that certain accelerator pedal mechanisms may, in rare instances, mechanically stick in a partially depressed position or return slowly to the idle position”.
The company has separately recalled some Toyota and Lexus models to correct the out-of-place floor-mat issue. About 1.7m vehicles are subject to both recalls.
Jeremy Anwyl, chief executive of Edmunds.com, an online car-pricing service, said that “Toyota needed to send a clear message they care more about their customers than monthly profits”.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Five assembly plants in the US and Canada will shut next week “to assess and co-ordinate activities”, the Japanese carmaker said.
The recall, involving 2.3m vehicles, has become a major embarrassment for Toyota, threatening its reputation for quality and reliability in the US market, which accounts for about a quarter of its sales.
Bob Carter, head of the Toyota brand in the US, said that “this action is necessary until a remedy is finalised. Helping ensure the safety of our customers and restoring confidence in Toyota are very important to our company.”
The vehicles in question include some versions of the Camry, the US’s top-selling sedan; the smaller Corolla; the RAV4 sport-utility vehicle; and the Tundra pick-up truck.
Toyota first acknowledged a problem with accelerators in September following the death of a California highway patrol officer and three family members in a high-speed crash. It initially blamed out-of-position floor mats.
Two months later, it said that it would replace accelerator pedals on 4.2m vehicles.
But in issuing the vehicle recall last week, it said that the problem appeared to be the result of condensation build-up in some accelerator mechanisms, which could cause sliding parts to expand and jam.
It added on Tuesday that further investigation had revealed that “there is a possibility that certain accelerator pedal mechanisms may, in rare instances, mechanically stick in a partially depressed position or return slowly to the idle position”.
The company has separately recalled some Toyota and Lexus models to correct the out-of-place floor-mat issue. About 1.7m vehicles are subject to both recalls.
Jeremy Anwyl, chief executive of Edmunds.com, an online car-pricing service, said that “Toyota needed to send a clear message they care more about their customers than monthly profits”.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Bill Gross: Slow Growth in the 'Ring of Fire'
In PIMCO Managing Director Bill Gross's investment outlook for February 2010, the Bond King tackles sovereign issues by drawing a "ring of fire" around countries at risk of having their public debt exceed 90% of GDP in the next few years, which he says would slow GDP by 1% or more. He recommends putting fixed-income money into Canada and Germany - and staying far away from the U.K. Excerpts:
Now that a semblance of stability has been imparted to the economy and its markets, the attempted detoxification and deleveraging of the private sector is underway. Having survived due to a steady two-trillion-dollar-plus dose of government “Red Bull,” Adderall, or simply strong black coffee, the global private sector is now expected by some to detox and resume a normal cyclical schedule where animal spirits and the willingness to take risk move front and center. But there is a problem. While corporations may be heading in that direction due to steep yield curves and government check writing that have partially repaired their balance sheets, their consumer customers remain fully levered and undercapitalized with little hope of escaping rehab as long as unemployment and underemployment remain at 10-20% levels worldwide. “Build it and they will come” is an old saw more applicable to Kevin Costner’s Field of Dreams than to today’s economy.
Banking crises are followed by a deleveraging of the private sector accompanied by a substitution and escalation of government debt, which in turn slows economic growth and (PIMCO’s thesis) lowers returns on investment and financial assets. The most vulnerable countries in 2010 are shown in PIMCO’s chart “The Ring of Fire.” These red zone countries are ones with the potential for public debt to exceed 90% of GDP within a few years’ time, which would slow GDP by 1% or more. The yellow and green areas are considered to be the most conservative and potentially most solvent, with the potential for higher growth.
Now that a semblance of stability has been imparted to the economy and its markets, the attempted detoxification and deleveraging of the private sector is underway. Having survived due to a steady two-trillion-dollar-plus dose of government “Red Bull,” Adderall, or simply strong black coffee, the global private sector is now expected by some to detox and resume a normal cyclical schedule where animal spirits and the willingness to take risk move front and center. But there is a problem. While corporations may be heading in that direction due to steep yield curves and government check writing that have partially repaired their balance sheets, their consumer customers remain fully levered and undercapitalized with little hope of escaping rehab as long as unemployment and underemployment remain at 10-20% levels worldwide. “Build it and they will come” is an old saw more applicable to Kevin Costner’s Field of Dreams than to today’s economy.
Banking crises are followed by a deleveraging of the private sector accompanied by a substitution and escalation of government debt, which in turn slows economic growth and (PIMCO’s thesis) lowers returns on investment and financial assets. The most vulnerable countries in 2010 are shown in PIMCO’s chart “The Ring of Fire.” These red zone countries are ones with the potential for public debt to exceed 90% of GDP within a few years’ time, which would slow GDP by 1% or more. The yellow and green areas are considered to be the most conservative and potentially most solvent, with the potential for higher growth.
Where's the Growth? Not in Top-Line Sales
Bloomberg released some very revealing stats yesterday showing little growth in top-line revenue growth over the past year outside financials and tech.
According to Bloomberg, year-over-year sales growth among companies within the S&P 500 has averaged 15.7%, but exclude financials and that number collapses to 2.2%. Take out Apple (AAPL) (even leaving out the rest of the tech group) and that number shrivels to 0.5%.
Those last two numbers are below the 12-month rate of inflation (according to the consumer price index). That means the corporate sector represented by the S&P has actually shrunk. Given that small businesses have clearly fared even worse, the entire U.S. economy has clearly shrunk in real terms over the past year.
Recovery hype, inventory corrections, great drama over the coming Apple tablet and somersaults at CNBC notwithstanding, there's no growth in the U.S. economy outside government-supported finance and tech (read: Apple).
Earnings growth within the S&P over the past year has been driven primarily by cost cutting, growth outside the U.S. and DC's gigantic subsidies of the financial sector.
The bottom line is that there hasn't been much of a top line over the past year.
According to Bloomberg, year-over-year sales growth among companies within the S&P 500 has averaged 15.7%, but exclude financials and that number collapses to 2.2%. Take out Apple (AAPL) (even leaving out the rest of the tech group) and that number shrivels to 0.5%.
Those last two numbers are below the 12-month rate of inflation (according to the consumer price index). That means the corporate sector represented by the S&P has actually shrunk. Given that small businesses have clearly fared even worse, the entire U.S. economy has clearly shrunk in real terms over the past year.
Recovery hype, inventory corrections, great drama over the coming Apple tablet and somersaults at CNBC notwithstanding, there's no growth in the U.S. economy outside government-supported finance and tech (read: Apple).
Earnings growth within the S&P over the past year has been driven primarily by cost cutting, growth outside the U.S. and DC's gigantic subsidies of the financial sector.
The bottom line is that there hasn't been much of a top line over the past year.
Blacks Held to Lower Standards in Perpetuity
One idea that transcends political lines is that blacks are inferior and should be held to lower standards in perpetuity.
In 2007, the Department of Justice (DOJ) under George W. Bush filed suit against the New York City Fire Department (FDNY) for violating the Civil Rights Act. The Vulcan Society, a fraternal organization of black firefighters, joined the lawsuit. Did the department hire and fire based on race? Did it deny promotions based on race? No. The department requires all candidates seeking employment, regardless of race, to take an exam that assesses "reading comprehension, problem solving, spatial recognition and applying rules to general concepts." For reasons that will be discussed and debated until the end of time, blacks as a group don't score as well as whites on such tests.
Last summer, a federal judge ruled that FDNY discriminated against blacks and Hispanics with an exam used in 1999 and 2002. Two weeks ago, the same judge ruled that New York City intentionally discriminated against minorities by continuing to use the exam.
Earlier this month, Barack Obama's DOJ filed suit against New Jersey and its Civil Service Commission for using an exam that "discriminates" against blacks and Hispanics, because these groups scored "statistically significantly lower" than whites.
"This complaint should send a clear message to all public employers that employment practices with unlawful discriminatory impact on account of race or national origin will not be tolerated," Assistant Attorney General Thomas Perez told The Star-Ledger. "The Justice Department will take all necessary action to ensure that such discriminatory practices are eliminated and that the victims of such practices are made whole."
As head of DOJ's Civil Rights Division, Perez is only getting started. He's promised to bring more disparate impact lawsuits. In December, he told a left-leaning audience at the leftist American Constitution Society (oh, the irony!) that his department has "dusted off the disparate impact theory. If the fact support the use of disparate impact theory, whether it’s in the housing context, the voting context, the employment context, we will use the disparate impact theory because every court that has ruled on this has said that it is permissible to do so."
The disparate impact theory of liability was articulated in Griggs v. Duke Power Co. (1971). The Supreme Court held that for purposes of hiring, an employer's use of a high school diploma requirement and aptitude tests violated the Civil Rights Act. Black applicants disproportionately lacked diplomas and/or scored low on the tests. Under the disparate impact analysis, discrimination need not be intentional. Even if an employment practice is "facially neutral," it's suspect if it has an adverse impact on members of a protected class. To avoid liability, businesses would have to demonstrate that such tests are a business necessity or related to job performance.
Racial minorities, especially blacks, should feel highly insulted by the entrenched assumption that they should not be expected to compete against whites on pencil-and-paper multiple choice civil service tests. Not only should they speak out against such condescending assumptions, they should refuse any and all special treatment, and demand to be treated as capable and responsible individuals. Such attitudes may be the impetus needed to put an end to these ridiculous and embarrassing lawsuits.
Remember the whole point of the civil rights movement: to be treated equally as individuals by the government, without regard to race. Every lawsuit and complaint that cites "disparate impact" confirms that our government believes blacks and other preferred minorities should be held to lower standards in perpetuity.
In 2007, the Department of Justice (DOJ) under George W. Bush filed suit against the New York City Fire Department (FDNY) for violating the Civil Rights Act. The Vulcan Society, a fraternal organization of black firefighters, joined the lawsuit. Did the department hire and fire based on race? Did it deny promotions based on race? No. The department requires all candidates seeking employment, regardless of race, to take an exam that assesses "reading comprehension, problem solving, spatial recognition and applying rules to general concepts." For reasons that will be discussed and debated until the end of time, blacks as a group don't score as well as whites on such tests.
Last summer, a federal judge ruled that FDNY discriminated against blacks and Hispanics with an exam used in 1999 and 2002. Two weeks ago, the same judge ruled that New York City intentionally discriminated against minorities by continuing to use the exam.
Earlier this month, Barack Obama's DOJ filed suit against New Jersey and its Civil Service Commission for using an exam that "discriminates" against blacks and Hispanics, because these groups scored "statistically significantly lower" than whites.
"This complaint should send a clear message to all public employers that employment practices with unlawful discriminatory impact on account of race or national origin will not be tolerated," Assistant Attorney General Thomas Perez told The Star-Ledger. "The Justice Department will take all necessary action to ensure that such discriminatory practices are eliminated and that the victims of such practices are made whole."
As head of DOJ's Civil Rights Division, Perez is only getting started. He's promised to bring more disparate impact lawsuits. In December, he told a left-leaning audience at the leftist American Constitution Society (oh, the irony!) that his department has "dusted off the disparate impact theory. If the fact support the use of disparate impact theory, whether it’s in the housing context, the voting context, the employment context, we will use the disparate impact theory because every court that has ruled on this has said that it is permissible to do so."
The disparate impact theory of liability was articulated in Griggs v. Duke Power Co. (1971). The Supreme Court held that for purposes of hiring, an employer's use of a high school diploma requirement and aptitude tests violated the Civil Rights Act. Black applicants disproportionately lacked diplomas and/or scored low on the tests. Under the disparate impact analysis, discrimination need not be intentional. Even if an employment practice is "facially neutral," it's suspect if it has an adverse impact on members of a protected class. To avoid liability, businesses would have to demonstrate that such tests are a business necessity or related to job performance.
Racial minorities, especially blacks, should feel highly insulted by the entrenched assumption that they should not be expected to compete against whites on pencil-and-paper multiple choice civil service tests. Not only should they speak out against such condescending assumptions, they should refuse any and all special treatment, and demand to be treated as capable and responsible individuals. Such attitudes may be the impetus needed to put an end to these ridiculous and embarrassing lawsuits.
Remember the whole point of the civil rights movement: to be treated equally as individuals by the government, without regard to race. Every lawsuit and complaint that cites "disparate impact" confirms that our government believes blacks and other preferred minorities should be held to lower standards in perpetuity.
Great Scott! by Thomas Sowell
Some of the most melancholy letters and e-mails that are sent to me are from people who lament that there is nothing they can do about the bad policies that they see ruining this country. They don't have any media outlet for their opinions and the letters they send to their Congressmen are either ignored or are answered by form letters with weasel words. They feel powerless.
Sometimes I remind them that the whole political establishment -- both Democrats and Republicans, as well as the mainstream media -- were behind amnesty for illegal immigrants, until the public opinion polls showed that the voters were not buying it. If politicians can't do anything elseIt was the same story with the government's health care takeover legislation. The Democrats have such huge majorities in both houses of Congress that they could literally lock the Republicans out of the room where they were deciding what to do, set arbitrary deadlines for votes, and cut off debate in the Senate. The mainstream media was on board with this bill too. To hear the talking heads on TV, you would think it was a done deal.
Then Scott Brown got elected to the "Kennedy seat" in the Senate, showing that that seat was not the inheritance of any dynasty to pass on. Moreover, it showed that the voters were already fed up with the Obama administration, even in liberal Massachusetts, as well as in Virginia and New Jersey. The backtracking on health care began immediately. Politicians can count votes. Once again, the public was not helpless.
One seat did not deprive the Democrats of big majorities in Congress. But one seat was the difference between being able to shut off debate in the Senate and having to allow debate on what was in this massive legislation. From day one it was clear that concealing what was in this bill was the key to getting it passed.
That is why there had to be arbitrary deadlines-- first to get it passed before the August 2009 recess, then before Labor Day, then before the Christmas recess.
The President could wait months before deciding to give a general the troops he asked for to fight the war in Afghanistan but there was never to be enough time for the health care bill to be exposed in the light of day to the usual Congressional hearings and debate. Moreover, despite all the haste, the health care program would not actually go into effect until after the 2012 presidential election. In other words, the public was not supposed to find out whether the government's takeover of medical care actually made things better or worse until after it was too late.
Although even the members of Congress who voted on this massive legislation did not have time to read its thousands of pages, just the way it was being rushed through in the dark should have told us all we needed to know. For many voters, that turned out to be enough.
Even after Scott Brown came out of nowhere to make a stunning upset election victory, there were still some cute political tricks that could have been pulled to save the health care bill. But enough Democrats saw the handwriting on the wall that they were not going to risk their own re-election to save this bill that Barack Obama has been hell-bent to pass, even when polls showed repeatedly that the public didn't want it.
President Obama's desire to do something "historic" by succeeding, where previous presidents had failed, was perfectly consistent for a man consumed with his own ego satisfaction, rather than the welfare of the country or even of his own political party.
As for the public, it doesn't matter if your Congressman answers your letter with a form letter, or doesn't answer at all. What matters is that you let him know what you are for or against and, when enough people do that-- whether in letters, in polls or in an election, politicians get the message, because they know their jobs depend on it.
As for what is likely to happen to health care, neither the bill passed by the House of Representatives nor the Senate bill can be expected to be enacted into law. Meanwhile, Obama's reaction to his political setback has been to respond rhetorically and to call on the political operatives who helped engineer his successful election campaign in 2008. But the public did not know him then, and his rhetoric may not fool them again, now that they do.
right, they can count votes.
Sometimes I remind them that the whole political establishment -- both Democrats and Republicans, as well as the mainstream media -- were behind amnesty for illegal immigrants, until the public opinion polls showed that the voters were not buying it. If politicians can't do anything elseIt was the same story with the government's health care takeover legislation. The Democrats have such huge majorities in both houses of Congress that they could literally lock the Republicans out of the room where they were deciding what to do, set arbitrary deadlines for votes, and cut off debate in the Senate. The mainstream media was on board with this bill too. To hear the talking heads on TV, you would think it was a done deal.
Then Scott Brown got elected to the "Kennedy seat" in the Senate, showing that that seat was not the inheritance of any dynasty to pass on. Moreover, it showed that the voters were already fed up with the Obama administration, even in liberal Massachusetts, as well as in Virginia and New Jersey. The backtracking on health care began immediately. Politicians can count votes. Once again, the public was not helpless.
One seat did not deprive the Democrats of big majorities in Congress. But one seat was the difference between being able to shut off debate in the Senate and having to allow debate on what was in this massive legislation. From day one it was clear that concealing what was in this bill was the key to getting it passed.
That is why there had to be arbitrary deadlines-- first to get it passed before the August 2009 recess, then before Labor Day, then before the Christmas recess.
The President could wait months before deciding to give a general the troops he asked for to fight the war in Afghanistan but there was never to be enough time for the health care bill to be exposed in the light of day to the usual Congressional hearings and debate. Moreover, despite all the haste, the health care program would not actually go into effect until after the 2012 presidential election. In other words, the public was not supposed to find out whether the government's takeover of medical care actually made things better or worse until after it was too late.
Although even the members of Congress who voted on this massive legislation did not have time to read its thousands of pages, just the way it was being rushed through in the dark should have told us all we needed to know. For many voters, that turned out to be enough.
Even after Scott Brown came out of nowhere to make a stunning upset election victory, there were still some cute political tricks that could have been pulled to save the health care bill. But enough Democrats saw the handwriting on the wall that they were not going to risk their own re-election to save this bill that Barack Obama has been hell-bent to pass, even when polls showed repeatedly that the public didn't want it.
President Obama's desire to do something "historic" by succeeding, where previous presidents had failed, was perfectly consistent for a man consumed with his own ego satisfaction, rather than the welfare of the country or even of his own political party.
As for the public, it doesn't matter if your Congressman answers your letter with a form letter, or doesn't answer at all. What matters is that you let him know what you are for or against and, when enough people do that-- whether in letters, in polls or in an election, politicians get the message, because they know their jobs depend on it.
As for what is likely to happen to health care, neither the bill passed by the House of Representatives nor the Senate bill can be expected to be enacted into law. Meanwhile, Obama's reaction to his political setback has been to respond rhetorically and to call on the political operatives who helped engineer his successful election campaign in 2008. But the public did not know him then, and his rhetoric may not fool them again, now that they do.
right, they can count votes.
Apple's Tablet: A Big Opportunity For Advertisers
The gadget may change the way marketers engage consumerApple's new tablet computer, to be unveiled by Steve Jobs Wednesday, holds a lot of promise for advertisers.
The Cupertino computer maker has kept the new gadget under wraps, leaving consumers and marketers to speculate how they'll use it. But one thing is certain: The Apple tablet will offer a new way for marketers to reach consumers. But how?
The tablet--which might be called the iPad or the iSlate--is expected to have a 10- to 11-inch touch screen that will not only display movies, TV shows, games and publications, but also let consumers interact with them. That has big implications for advertising as an educational tool and as a sales channel, says Jeremy Lockhorn, director of emerging media at digital agency Razorfish, a unit of Publicis Group. It means that when consumers watch TV shows and movies, they could potentially be able to do more than just play, pause and stop. When viewing an episode of TV's Mad Men, for example, consumers could tap on objects, such as Don Draper's hat, to get more information about the items and where to buy them.
The iPhone inspired creative new features from companies, starting with useful applications such as Bank of America's online banking app and FedEx's package tracker, but the bigger size of the Apple tablet will allow marketers to introduce more browser and video functions. There will be opportunity to layer entertainment content, including newspapers and magazines, with educational facts and marketing pitches. "And it'll be easy to get consumers excited about all the new ways that advertisers are reaching out to them," says Lockhorn.
For the new Apple product, companies will turn back to sponsorships they've cut from tight marketing budgets, says Lincoln Bjorkman, executive vice president and executive creative director of New York region at Publicis' Digitas. "They'll all want to be a part of this and will work with providers to get their names on the tablet," Bjorkman says.
That means that money-conscious marketers that slashed their broad branding and newspaper ads to save money in the downturn will splurge this time around. Some will sponsor educational content; others will focus on entertainment.
The Cupertino computer maker has kept the new gadget under wraps, leaving consumers and marketers to speculate how they'll use it. But one thing is certain: The Apple tablet will offer a new way for marketers to reach consumers. But how?
The tablet--which might be called the iPad or the iSlate--is expected to have a 10- to 11-inch touch screen that will not only display movies, TV shows, games and publications, but also let consumers interact with them. That has big implications for advertising as an educational tool and as a sales channel, says Jeremy Lockhorn, director of emerging media at digital agency Razorfish, a unit of Publicis Group. It means that when consumers watch TV shows and movies, they could potentially be able to do more than just play, pause and stop. When viewing an episode of TV's Mad Men, for example, consumers could tap on objects, such as Don Draper's hat, to get more information about the items and where to buy them.
The iPhone inspired creative new features from companies, starting with useful applications such as Bank of America's online banking app and FedEx's package tracker, but the bigger size of the Apple tablet will allow marketers to introduce more browser and video functions. There will be opportunity to layer entertainment content, including newspapers and magazines, with educational facts and marketing pitches. "And it'll be easy to get consumers excited about all the new ways that advertisers are reaching out to them," says Lockhorn.
For the new Apple product, companies will turn back to sponsorships they've cut from tight marketing budgets, says Lincoln Bjorkman, executive vice president and executive creative director of New York region at Publicis' Digitas. "They'll all want to be a part of this and will work with providers to get their names on the tablet," Bjorkman says.
That means that money-conscious marketers that slashed their broad branding and newspaper ads to save money in the downturn will splurge this time around. Some will sponsor educational content; others will focus on entertainment.
Monday, January 25, 2010
Schwarzenegger's budget plan puts unions in the cross-hairs
His proposals to privatize prisons, curtail teachers' seniority protections and reduce the number of in-home care workers would be major blows to powerful labor interests. They're girding for a fight.Reporting from Sacramento - Gov. Arnold Schwarzenegger has put organized labor squarely in his cross-hairs in 2010, opening a fight that will largely determine the shape of his final year in office.Schwarzenegger's proposals would cut the size of the union workforce, reduce pay, shrink future pensions and roll back job protections won through collective bargaining.Labor and the unions' Democratic allies are already girding for battle."It's a continuing jihad against organized labor," said Steve Maviglio, a Sacramento-based Democratic strategist. "The governor thinks public employee unions are Enemy No. 1."Among the plans in the governor's budget: privatize prisons, which would strip members from the influential guards union; curtail seniority protections for teachers, a key union-won protection; and reduce the number of sick, disabled and elderly Californians cared for through the state's In-Home Supportive Services program -- almost all union jobs -- while cutting what their caregivers are paid.Schwarzenegger also wants to permanently lower state workforce salaries by 5% without returning to the bargaining table with public-sector unions. And he would require state workers to chip 5% more into their retirement plans."The public sector also has to take a haircut," Schwarzenegger said, arguing his policies would save California billions of dollars, now and in the future.Matt David, Schwarzenegger's communications director, says the governor's proposed budget makes hard but necessary choices, given a $20-billion deficit."This budget wasn't about attacking any specific group," he said. "It was about trying to fix what's broken in this state and prioritize the funding we have so we can protect education."Yet even in nonbudget proposals, union leaders see an antilabor agenda. For example, Schwarzenegger has pushed to limit seniority protections for teachers and expand charter schools, which are largely staffed by nonunion teachers. He argues both moves would improve the quality of schools.Union leaders see their members as the targets. "That seems to be his goal, to basically change a unionized sector of the economy to a nonunion sector," said Marty Hittelman, president of the California Federation of Teachers.The unions have spent millions to thwart some of the governor's past initiatives and hope to do so again."To go after unions means tearing down the middle class," said Laphonza Butler, head of United Long Term Care Workers, a branch of the giant Service Employees International Union that represents 180,000 in-home services workers.Democratic lawmakers, who hold the majority in the Legislature and are the largest recipients of union campaign money, thus far have given the governor's plans a chilly reception."I did take note that in his State of the State address [the governor] said that we had only Sophie's choices," said Sen. Mark Leno (D-San Francisco). "Do we harm seniors, do we harm the disabled, do we harm the poor? But you didn't hear him suggest there were tax loopholes we could close to pinch corporations."State Treasurer Bill Lockyer, a Democrat, explained the legislative balance of power during impassioned legislative testimony last fall: "It's impossible for this Legislature to reform the pension system," he said. "I don't think anybody can do it here -- because of who elected you," he added, making a barely veiled reference to labor's power.Top Democratic lawmakers have suggested Schwarzenegger is driven by a corporate special interest agenda.Assembly Speaker Karen Bass (D-Los Angeles) dismissed the governor's prison privatization plan as a sop to "another special interest, and that's the private prisons industry." One company that operates private prisons, the Corrections Corp. of America, donated $100,000 to the budget ballot measure campaign championed by the governor last year.From his earliest days as a candidate, Schwarzenegger has railed against the grip of "special interests" on Sacramento. More often than not, he has defined them as organized labor.Joel Fox, a business advocate who worked closely with the governor during his last big union battle in 2005, said that agenda "goes back to his election in the recall.""He had a mind to fix the problem and restructure the way government operates," Fox said. "The structure right now is heavily controlled by the unions."In 2005, Schwarzenegger went to the ballot with four measures that would have rolled back pensions, unions' abilities to collect dues and job protections.The unions fought back with a $100-million campaign and defeated all four of the governor's proposals. Schwarzenegger vowed a more contrite approach en route to his reelection in 2006.But 2010 has seen a return to confrontation. In part, that's driven by the state's huge deficit. In some state programs, particularly healthcare, most of the money pays directly for services. But in most other parts of the state budget -- schools, prisons, parks -- cutting spending mostly means tackling payroll.One notable shift from the 2005 battle is that Schwarzenegger has moderated his tone. This year he justified privatizing prisons because it would "save us billions of dollars." In 2005 he vowed to put "the corrupt people in our prisons on the same side of the bars."The strategy of softening rhetoric while still pressing severe proposals dovetails closely with the negotiating philosophy of his influential chief of staff, Susan Kennedy: Always leave interest groups with something to lose.The California Correctional Peace Officers Assn. has responded to the governor's plans with a TV ad declaring itself part of the solution for "real reform" in the state's beleaguered prison system. The union stopped short of attacking Schwarzenegger directly."It's politically smart not to scream bloody murder for your own pet cause when everyone is being slashed," said Maviglio, the Democratic strategist. But he predicted that Schwarzenegger's "divide and conquer" strategy -- forcing each union to defend its turf simultaneously -- could result in a reprise of labor's united, multimillion-dollar political fight of five years ago."It wouldn't surprise me," he said, "to see the same 2005 coalition resurrected."shane.goldmacher @latimes.com
.
.
Iran crosses red line, can enrich uranium up to 20pc grade
Attaining the ability to enrich uranium up to 20 percent grade brings Iran dangerously close to "break-out" point for a nuclear weapon capability, DEBKAfile's intelligence sources report. President Mahmoud Ahmadinejad promised the "good news" would be announced during the Feb. 1-11 celebrations of the Islamic Revolution. The "news" also prompted an urgent cabinet meeting in Jerusalem last week.
Ahmadinejad's announcement is a provocative demonstration of contempt for the six world powers and their offer to trade Iran's low-grade uranium for 20 pc enriched product overseas. By going public on the banned process and abandoning concealment, Iran's rulers are throwing down the gauntlet to them and Israel.
DEBKAfile's Iranian sources report that the hawks of the Islamic regime led by Ahmadinejad and spiritual ruler Ayatollah Ali Khamenei have won the day for their tactics of jumping ahead of any possible US-led or Israel steps against their nuclear program with its own aggressive initiatives.
The Iranian president's enrichment announcement at a time that the Obama administration is pondering tough sanctions against the Revolutionary Guards was part of this policy; so were the Syrian and Hizballah declarations of military preparedness for a purported Israeli attack last week, taking advantage of an IDF war game to raise the alarm.
Our political sources predict that Tehran's provocative move will be met with more of the five months of foot-dragging with which Washington and Jerusalem have met Iran's contempt for one deadline after another for ending nuclear enrichment.
Both will continue to dither and pretend that stiff sanctions can scotch the Iranian nuclear threat. Tehran has meanwhile made good use of those five months to go forward and achieve a 20 pc enrichment capability.
The only straight talk from any Western leader has come from French president Nicolas Sarkozy.
Saturday, Jan. 23, he told visiting Lebanese prime minister Saad Hariri that France has evidence Iran is developing nuclear weapons contrary to its claims. He warned that Israel "would not stand by while Iran develops nuclear weapons."
Ahmadinejad's announcement is a provocative demonstration of contempt for the six world powers and their offer to trade Iran's low-grade uranium for 20 pc enriched product overseas. By going public on the banned process and abandoning concealment, Iran's rulers are throwing down the gauntlet to them and Israel.
DEBKAfile's Iranian sources report that the hawks of the Islamic regime led by Ahmadinejad and spiritual ruler Ayatollah Ali Khamenei have won the day for their tactics of jumping ahead of any possible US-led or Israel steps against their nuclear program with its own aggressive initiatives.
The Iranian president's enrichment announcement at a time that the Obama administration is pondering tough sanctions against the Revolutionary Guards was part of this policy; so were the Syrian and Hizballah declarations of military preparedness for a purported Israeli attack last week, taking advantage of an IDF war game to raise the alarm.
Our political sources predict that Tehran's provocative move will be met with more of the five months of foot-dragging with which Washington and Jerusalem have met Iran's contempt for one deadline after another for ending nuclear enrichment.
Both will continue to dither and pretend that stiff sanctions can scotch the Iranian nuclear threat. Tehran has meanwhile made good use of those five months to go forward and achieve a 20 pc enrichment capability.
The only straight talk from any Western leader has come from French president Nicolas Sarkozy.
Saturday, Jan. 23, he told visiting Lebanese prime minister Saad Hariri that France has evidence Iran is developing nuclear weapons contrary to its claims. He warned that Israel "would not stand by while Iran develops nuclear weapons."
Monday, January 18, 2010
THIS WEEK'S TIP JANUARY 10, 2010 For Many Entrepreneurs, Running the Show is Stressful
Adapted from THE WALL STREET JOURNAL COMPLETE SMALL BUSINESS GUIDEBOOK (Three Rivers Press).
Running a business isn't easy. Work-related pressure can lead to a host of stress-induced problems: headaches, sleepless nights, irritability, weight gain and lost productivity, among others.
Business owners often cite the following as their most common sources of stress:
• Excessive workloads
• Concerns about making enough money
• Fears (when employees are involved) about making payroll
• Underperforming when it comes to meeting customers' expectations
• Feeling increased pressure to succeed when many things (such as personal savings, a corporate career and time away from family) have been sacrificed
The statistics on survival only underscore the stress placed on small business owners. About one-third of new businesses don't make it past two years, and almost 60 percent fold within four years, according to the Small Business Administration's Office of Advocacy. Causes of failure range from lack of capital to inexperience.
Give Yourself Direction
It's clear from numerous interviews of entrepreneurs that the best method of combating business-related stress is to plan. Entrepreneurs who haven't updated or assembled their business plan (for more on business plans, click here) can feel directionless, inefficient and overwhelmed— all of which contribute to stress. Writing out even a simple plan can prevent overload while also providing a viable road map to success.
See related story
Firms Reflect and Look Ahead
Too many business owners make the mistake of working in the business and not on it. While it's easy to get caught up in the daily grind, you'll ultimately reduce your stress by taking a step back to focus on your business in the long-term scheme of things. Essentially, you want to anticipate everything that might happen, and everything that's in your control to make happen. The best time to do that is often during quiet periods, or, as some business owners prefer, on a mini-retreat away from the office. During this time, your goal is to take a look at how the business has been performing— what's worked, what hasn't— and to come up with a plan for the year ahead. If you need more clients, target specific areas where you think you can drum up business. Come up with a marketing plan. Develop a budget by figuring out how much you need to set aside for quarterly tax payments, capital expenditures, your retirement plan, employee salaries and other areas. All of this advance planning will allow you to spend less time putting out fires and more time meeting the business goals you've outlined. As a result, you will feel more in control and less vulnerable to stress.
Write to Colleen DeBaise at colleen.debaise@wsj.com
Running a business isn't easy. Work-related pressure can lead to a host of stress-induced problems: headaches, sleepless nights, irritability, weight gain and lost productivity, among others.
Business owners often cite the following as their most common sources of stress:
• Excessive workloads
• Concerns about making enough money
• Fears (when employees are involved) about making payroll
• Underperforming when it comes to meeting customers' expectations
• Feeling increased pressure to succeed when many things (such as personal savings, a corporate career and time away from family) have been sacrificed
The statistics on survival only underscore the stress placed on small business owners. About one-third of new businesses don't make it past two years, and almost 60 percent fold within four years, according to the Small Business Administration's Office of Advocacy. Causes of failure range from lack of capital to inexperience.
Give Yourself Direction
It's clear from numerous interviews of entrepreneurs that the best method of combating business-related stress is to plan. Entrepreneurs who haven't updated or assembled their business plan (for more on business plans, click here) can feel directionless, inefficient and overwhelmed— all of which contribute to stress. Writing out even a simple plan can prevent overload while also providing a viable road map to success.
See related story
Firms Reflect and Look Ahead
Too many business owners make the mistake of working in the business and not on it. While it's easy to get caught up in the daily grind, you'll ultimately reduce your stress by taking a step back to focus on your business in the long-term scheme of things. Essentially, you want to anticipate everything that might happen, and everything that's in your control to make happen. The best time to do that is often during quiet periods, or, as some business owners prefer, on a mini-retreat away from the office. During this time, your goal is to take a look at how the business has been performing— what's worked, what hasn't— and to come up with a plan for the year ahead. If you need more clients, target specific areas where you think you can drum up business. Come up with a marketing plan. Develop a budget by figuring out how much you need to set aside for quarterly tax payments, capital expenditures, your retirement plan, employee salaries and other areas. All of this advance planning will allow you to spend less time putting out fires and more time meeting the business goals you've outlined. As a result, you will feel more in control and less vulnerable to stress.
Write to Colleen DeBaise at colleen.debaise@wsj.com
Sunday, January 17, 2010
Food Shortages Coming, Buy Commodities: Jim Rogers
The financial crisis is likely to lead to food shortages in a few years because the agriculture sector is in dire need of funds, legendary investor Jim Rogers told CNBC Friday.
Buying distressed commodities is a better way to make money than investing in stocks, according to Rogers.
"The fundamentals (for agriculture) have gotten better," he said. "The inventories are now at the lowest they've been in decades, not in years."
"Sometimes in the next few years we're going to have very serious shortages of food everywhere in the world and prices are going to go through the roof."
Cotton and coffee are good buys because they are very distressed, while sugar, despite the fact that it has gone up a lot, is still down 70 percent from its all-time high, according to Rogers.
"I don't think that the problems of the world are behind us yet," he said.
Investors shouldn't bother with stocks because commodities are likely to win in both the optimistic and the pessimistic scenario, Rogers said.
If the economy rebounds, commodities prices will rise because of increased demand, while if the economy continues to be weak, central banks will keep printing money and commodities will be used as a hedge against inflation, he explained.
Rogers is holding on to oil and he is also holding on to gold, saying they are too expensive to buy but not worth selling.
"If you want to buy precious metals I'd rather buy silver and palladium, just because they're cheaper," he said.
http://www.cnbc.com/id/34874608
click link to see whole interview
Buying distressed commodities is a better way to make money than investing in stocks, according to Rogers.
"The fundamentals (for agriculture) have gotten better," he said. "The inventories are now at the lowest they've been in decades, not in years."
"Sometimes in the next few years we're going to have very serious shortages of food everywhere in the world and prices are going to go through the roof."
Cotton and coffee are good buys because they are very distressed, while sugar, despite the fact that it has gone up a lot, is still down 70 percent from its all-time high, according to Rogers.
"I don't think that the problems of the world are behind us yet," he said.
Investors shouldn't bother with stocks because commodities are likely to win in both the optimistic and the pessimistic scenario, Rogers said.
If the economy rebounds, commodities prices will rise because of increased demand, while if the economy continues to be weak, central banks will keep printing money and commodities will be used as a hedge against inflation, he explained.
Rogers is holding on to oil and he is also holding on to gold, saying they are too expensive to buy but not worth selling.
"If you want to buy precious metals I'd rather buy silver and palladium, just because they're cheaper," he said.
http://www.cnbc.com/id/34874608
click link to see whole interview
Saturday, January 16, 2010
"Mossad Superman Meir Dagan" slowed Iran's nuclear plans
The Egyptian media rarely have a good word to say about Israel or Israelis, but Saturday, Jan. 16, the semi-official Al Ahram, glowingly profiled the director of the Mossad external intelligence agency, Meir Dagan, in epic terms as a hero who singlehandedly delayed Iran's advance on a nuclear weapon by "several years," scaled down "Syria's military capabilities" and may have been behind last week's assassination of Iranian nuclear scientist Mehsud Ali-Mohammadi in North Tehran.
DEBKAfile's Middle East sources report: This commentary, which would necessarily have been approved at the top level of Egyptian government, by President Hosni Mubarak or intelligence minister Gen. Omar Suleiman, appeared the day after Mubarak deliberately absented himself from a summit meeting with Syrian president Bashar Assad in Riyadh called by King Abdullah.
By failing to turn up for the meeting of Friday, Jan. 15, and running al Ahram's Dagan commentary the next day, the Egyptian ruler signaled his refusal to be a part of the Saudi monarch's policy of surrendering to Iran's hegemonic role in regional affairs, and his belief that Israel and its Mossad were still capable of putting a spoke in Iran's nuclear aspirations.
By his actions, Mubarak also distanced himself from Abdullah's plan to apply the Lebanese national unity formula to a joint Arab initiative for mending the Palestinian Hamas-Fatah feud. Assad's endorsement was seen by the Saudi monarch as attaching the Syrian-Iranian stamp of approval to a Palestinian power-sharing accord still to be negotiated. For DEBKAfile's Special Report on the Riyadh fiasco, click
HERE
The Egyptian al-Ahram explains that Dagan earned the epithet "Superman of the Jewish state" by shunning media exposure and by virtue of the painful blows his covert operations inflicted on Iran. He is credited with putting its Iran's nuclear program well behind schedule by several years.
The paper assigns him a possible role in stirring up opposition unrest in Tehran in the six months since Iran's dubious presidential election, as well in the Iranian nuclear scientist's assassination on Jan. 11. Dagan is also described as aiding the international campaign against Tehran by damaging leaks to world media for blackening the Islamic regime, its leaders and its methods.
In Syria, says al-Ahram, Dagan succeeded in scaling down Syria's military capabilities, notably by masterminding the destruction in Sept. 2007 of the North Korean plutonium plant under construction at Deir ez-Zor in northern Syria.
In other words, were it not for Dagan and his audacious exploits, the Middle East might be a different place today with Iran and Syria the unchallenged regional superpowers, says the Egyptian newspaper.
Meir Dagan, 65, was first appointed Mossad director in 2002 by Ariel Sharon. His term of office has been extended twice by Ehud Olmert and Binyamin Netanyahu, Sharon's two successors as prime minister.
DEBKAfile's Middle East sources report: This commentary, which would necessarily have been approved at the top level of Egyptian government, by President Hosni Mubarak or intelligence minister Gen. Omar Suleiman, appeared the day after Mubarak deliberately absented himself from a summit meeting with Syrian president Bashar Assad in Riyadh called by King Abdullah.
By failing to turn up for the meeting of Friday, Jan. 15, and running al Ahram's Dagan commentary the next day, the Egyptian ruler signaled his refusal to be a part of the Saudi monarch's policy of surrendering to Iran's hegemonic role in regional affairs, and his belief that Israel and its Mossad were still capable of putting a spoke in Iran's nuclear aspirations.
By his actions, Mubarak also distanced himself from Abdullah's plan to apply the Lebanese national unity formula to a joint Arab initiative for mending the Palestinian Hamas-Fatah feud. Assad's endorsement was seen by the Saudi monarch as attaching the Syrian-Iranian stamp of approval to a Palestinian power-sharing accord still to be negotiated. For DEBKAfile's Special Report on the Riyadh fiasco, click
HERE
The Egyptian al-Ahram explains that Dagan earned the epithet "Superman of the Jewish state" by shunning media exposure and by virtue of the painful blows his covert operations inflicted on Iran. He is credited with putting its Iran's nuclear program well behind schedule by several years.
The paper assigns him a possible role in stirring up opposition unrest in Tehran in the six months since Iran's dubious presidential election, as well in the Iranian nuclear scientist's assassination on Jan. 11. Dagan is also described as aiding the international campaign against Tehran by damaging leaks to world media for blackening the Islamic regime, its leaders and its methods.
In Syria, says al-Ahram, Dagan succeeded in scaling down Syria's military capabilities, notably by masterminding the destruction in Sept. 2007 of the North Korean plutonium plant under construction at Deir ez-Zor in northern Syria.
In other words, were it not for Dagan and his audacious exploits, the Middle East might be a different place today with Iran and Syria the unchallenged regional superpowers, says the Egyptian newspaper.
Meir Dagan, 65, was first appointed Mossad director in 2002 by Ariel Sharon. His term of office has been extended twice by Ehud Olmert and Binyamin Netanyahu, Sharon's two successors as prime minister.
Tuesday, January 12, 2010
Turkey demands Israel apology, threatens 'steps'
The Turkish government communicated a blunt message Tuesday demanding an official apology from Deputy Foreign Minister Danny Ayalon for his televised castigation of Ankara's ambassador to Tel Aviv. Turkey said that Israel's refusal to apologize posthaste would prompt retaliatory "diplomatic steps." Israeli officials said that, in the worst case scenario, Turkey could recall its ambassador as a sign of protest. Turkish officials made the demand during a meeting Tuesday to which they summoned Israel's ambassador to Ankara, Gabi Levy.
Advertisement
The Israeli ambassador was asked to clarify a Foreign Ministry statement in response to Turkish Prime Minister Reccep Tayip Erdogan's criticism of Operation Cast Lead. "The Turks are the last ones who can preach morality to Israel," the statement read. "We're waiting for an apology from the Israeli side very soon," a Turkish official told Levy. "If there won't be an apology, we will respond with diplomatic steps of our own." A Turkish official denounced Ayalon and Foreign Minister Avigdor Lieberman on Tuesday as "adolescent youths" for deliberately seating Ankara's envoy on a lower chair during than that of Deputy Foreign Minister Danny Ayalon during a consultation on Monday. Israeli officials were angered by statements made Monday by Turkish Prime Minister Reccep Tayip Erdogan, who accused Jerusalem of using "disproportionate power ... while refusing to abide by UN resolutions" relating to its policy toward the Palestinians. In addition, Israeli officials were furious over a recently aired Turkish television program, "Valley of the Wolves," which portrays Shin Bet security service agents as child kidnappers. In response, Ayalon summoned the Turkish ambassador to Israel, Ahmet Oguz Celikkol, for consultations. During the meeting, Celikkol was seated in a low sofa, and facing him, in higher chairs, were Ayalon and two other officials - an arrangement carried out on the orders of Ayalon's superior, Foreign Minister Avigdor Lieberman. A photo-op was held at the start of the meeting, during which Ayalon told the photographers in Hebrew: "Pay attention that he is sitting in a lower chair and we are in the higher ones, that there is only an Israeli flag on the table and that we are not smiling." Celikkol's associates told Army Radio on Tuesday, that the meeting with Ayalon was the most shameful display he had seen in 35 years as a diplomat. According to the associates, Celikkol had no idea what the topic of conversation was to be when first seated. When the cameras left the room, the sources said, the meeting was normal and professional. "Had the ambassador understood Ayalon's intentions, which were only expressed in Hebrew, he would have responded in kind," the source told Army Radio. Celikkol told Army Radio that the episode was the most shameful experience of his 35-year career. Israel's Foreign Ministry said on Tuesday that Ayalon did not intend to humiliate Celikkol by seating him in a lower chair without flag representation during their meeting. Celikkol was called in regarding a recent Turkish television drama depicting actors dressed as Shin Bet officers who kidnap babies. In response to the incident, the Turkish Foreign Ministry on Tuesday summoned Israeli Ambassador Gaby Levy for clarification. "It would be worthwhile for Israel to know its boundaries and to not dare cross them," a Turkish official said. He added that Ankara knows to differentiate between the various constituent elements of the Israeli government, and that it would prefer to deal only with ministers and leaders who assume a more moderate line. Ankara on Tuesday rejected Israel's criticism of Turkey's past while accusing Lieberman and Ayalon of staging the incident to enhance their domestic political standing. "Turkey has always been a friend to Jews," the Turkish Foreign Ministry said in a statement. "Deep-rooted relations between Turks and Jews that precede the establishment of the Israeli state and the general structure of our relations give us the responsibility to make such warnings and criticism," the statement read. "We expect an explanation and apologies from Israeli authorities for the attitude against our Tel Aviv ambassador Oguz Celikkol, and the way this attitude was reflected," the Turkish foreign ministry said in a statement. "We call on the Israeli Foreign Ministry, whose behavior and attitude towards our Tel Aviv ambassador did not comply with diplomacy, to obey courtesy rules," it said. The Foreign Ministry stressed that it had summoned the envoy and ordered the seating arrangment to make clear that it would respond to any insult made by the Turkish leadership. Meanwhile, Turkey's Minister of Foreign Affairs Ahmet Davutoğlu spoke on Tuesday during a press conference in London following his meeting U.K. Foreign Secretary David Miliband regarding his country's ties with Israel. "Relations between Turkey and Israel will go back to normal once Israel returns to a pro-peace policy," he said, adding that "the Turkish government made great efforts to advance the peace process between Israel and Syria, but Israel's attack on Gaza harmed our efforts and has become an obstacle in our country's relations," he added. Just three months ago, a similar diplomatic instance occurred between the two countries after Turkey aired the controversial television drama Ayrilik ("Separation") which featured actors dressed as Israeli soldiers killing Palestinian children. Israeli officials: Liberman wants to keep tense ties with Turkey Meanwhile, ministry sources said Monday that Foreign Minister Avigdor Lieberman was trying to stop Defense Minister Ehud Barak from visiting to Turkey next week, in order to keep up the recent tensions between the two allied countries. Barak was scheduled to leave for Turkey on Sunday to meet with his counterpart and the foreign minister there, in an attempt to improve deteriorating relations. Tensions were renewed on Monday, after Turkish Prime Minister Recep Tayyip Erdogan declared that Israel was endangering world peace by using exaggerated force against the Palestinians, breaching Lebanon's air space and waters and for not revealing the details of its nuclear program. According to Foreign Ministry sources, Lieberman is now looking to "heat things up" before Barak's trip, so as to torpedo attempts to mend the tensions. "We get the sense that Lieberman wants to heat things up before Barak's visit," a senior Foreign Ministry source said. "All of the recent activities were part of Lieberman's political agenda." The Turkish government was expected to give a warm welcome to Barak, who alongside Labor Minister Benjamin Ben-Eliezer was looking to bring the allies' relations back to stability. The Foreign Ministry sources surmised that Lieberman's efforts were aimed at preventing Turkey from resuming its role as mediator in Israel's peace talks with Syria
PROMOTION: Mamilla Hotel
Advertisement
The Israeli ambassador was asked to clarify a Foreign Ministry statement in response to Turkish Prime Minister Reccep Tayip Erdogan's criticism of Operation Cast Lead. "The Turks are the last ones who can preach morality to Israel," the statement read. "We're waiting for an apology from the Israeli side very soon," a Turkish official told Levy. "If there won't be an apology, we will respond with diplomatic steps of our own." A Turkish official denounced Ayalon and Foreign Minister Avigdor Lieberman on Tuesday as "adolescent youths" for deliberately seating Ankara's envoy on a lower chair during than that of Deputy Foreign Minister Danny Ayalon during a consultation on Monday. Israeli officials were angered by statements made Monday by Turkish Prime Minister Reccep Tayip Erdogan, who accused Jerusalem of using "disproportionate power ... while refusing to abide by UN resolutions" relating to its policy toward the Palestinians. In addition, Israeli officials were furious over a recently aired Turkish television program, "Valley of the Wolves," which portrays Shin Bet security service agents as child kidnappers. In response, Ayalon summoned the Turkish ambassador to Israel, Ahmet Oguz Celikkol, for consultations. During the meeting, Celikkol was seated in a low sofa, and facing him, in higher chairs, were Ayalon and two other officials - an arrangement carried out on the orders of Ayalon's superior, Foreign Minister Avigdor Lieberman. A photo-op was held at the start of the meeting, during which Ayalon told the photographers in Hebrew: "Pay attention that he is sitting in a lower chair and we are in the higher ones, that there is only an Israeli flag on the table and that we are not smiling." Celikkol's associates told Army Radio on Tuesday, that the meeting with Ayalon was the most shameful display he had seen in 35 years as a diplomat. According to the associates, Celikkol had no idea what the topic of conversation was to be when first seated. When the cameras left the room, the sources said, the meeting was normal and professional. "Had the ambassador understood Ayalon's intentions, which were only expressed in Hebrew, he would have responded in kind," the source told Army Radio. Celikkol told Army Radio that the episode was the most shameful experience of his 35-year career. Israel's Foreign Ministry said on Tuesday that Ayalon did not intend to humiliate Celikkol by seating him in a lower chair without flag representation during their meeting. Celikkol was called in regarding a recent Turkish television drama depicting actors dressed as Shin Bet officers who kidnap babies. In response to the incident, the Turkish Foreign Ministry on Tuesday summoned Israeli Ambassador Gaby Levy for clarification. "It would be worthwhile for Israel to know its boundaries and to not dare cross them," a Turkish official said. He added that Ankara knows to differentiate between the various constituent elements of the Israeli government, and that it would prefer to deal only with ministers and leaders who assume a more moderate line. Ankara on Tuesday rejected Israel's criticism of Turkey's past while accusing Lieberman and Ayalon of staging the incident to enhance their domestic political standing. "Turkey has always been a friend to Jews," the Turkish Foreign Ministry said in a statement. "Deep-rooted relations between Turks and Jews that precede the establishment of the Israeli state and the general structure of our relations give us the responsibility to make such warnings and criticism," the statement read. "We expect an explanation and apologies from Israeli authorities for the attitude against our Tel Aviv ambassador Oguz Celikkol, and the way this attitude was reflected," the Turkish foreign ministry said in a statement. "We call on the Israeli Foreign Ministry, whose behavior and attitude towards our Tel Aviv ambassador did not comply with diplomacy, to obey courtesy rules," it said. The Foreign Ministry stressed that it had summoned the envoy and ordered the seating arrangment to make clear that it would respond to any insult made by the Turkish leadership. Meanwhile, Turkey's Minister of Foreign Affairs Ahmet Davutoğlu spoke on Tuesday during a press conference in London following his meeting U.K. Foreign Secretary David Miliband regarding his country's ties with Israel. "Relations between Turkey and Israel will go back to normal once Israel returns to a pro-peace policy," he said, adding that "the Turkish government made great efforts to advance the peace process between Israel and Syria, but Israel's attack on Gaza harmed our efforts and has become an obstacle in our country's relations," he added. Just three months ago, a similar diplomatic instance occurred between the two countries after Turkey aired the controversial television drama Ayrilik ("Separation") which featured actors dressed as Israeli soldiers killing Palestinian children. Israeli officials: Liberman wants to keep tense ties with Turkey Meanwhile, ministry sources said Monday that Foreign Minister Avigdor Lieberman was trying to stop Defense Minister Ehud Barak from visiting to Turkey next week, in order to keep up the recent tensions between the two allied countries. Barak was scheduled to leave for Turkey on Sunday to meet with his counterpart and the foreign minister there, in an attempt to improve deteriorating relations. Tensions were renewed on Monday, after Turkish Prime Minister Recep Tayyip Erdogan declared that Israel was endangering world peace by using exaggerated force against the Palestinians, breaching Lebanon's air space and waters and for not revealing the details of its nuclear program. According to Foreign Ministry sources, Lieberman is now looking to "heat things up" before Barak's trip, so as to torpedo attempts to mend the tensions. "We get the sense that Lieberman wants to heat things up before Barak's visit," a senior Foreign Ministry source said. "All of the recent activities were part of Lieberman's political agenda." The Turkish government was expected to give a warm welcome to Barak, who alongside Labor Minister Benjamin Ben-Eliezer was looking to bring the allies' relations back to stability. The Foreign Ministry sources surmised that Lieberman's efforts were aimed at preventing Turkey from resuming its role as mediator in Israel's peace talks with Syria
PROMOTION: Mamilla Hotel
Senior Iranian nuclear physicist killed by remote-controlled bomb-bike
Announcing the death of Tehran University nuclear physics professor Masoud Ali Mohammadi Tuesday, Jan. 12, by a remote-controlled explosive motorbike as he was leaving home, Tehran does not say he was employed by its disputed nuclear program, although this is suggested by other sources. DEBKAfile's Iranian sources do not expect his death to slow the program down, but report that Iranian authorities are treating it as a new escalation of the Western effort to recruit, intimidate or liquidate the brains behind Iran's nuclear progress and a signal that the controversy has now being fought inside the Islamic Republic. Before launching their investigation, they lay the incident at the door of Israel or the exiled Mujaheddin Khalq dissidents.
Tehran has complained recently that experts associated with nuclear projects are being closely stalked.
They are already tightly quarantined and forbidden to travel overseas, their correspondence closely monitored since last year, when one of their number was apparently abducted while on a pilgrimage Saudi Arabia, a second defected to the West, a third choked to death and one or two others died in mysterious road accidents.
The Iranian Press TV announcement described Mohammadi, a senior Tehran University lecturer as a "staunch supporter" of the 1979 revolution that established the Iranian theocracy.
Police have sealed off the area for their investigation.
Tehran has complained recently that experts associated with nuclear projects are being closely stalked.
They are already tightly quarantined and forbidden to travel overseas, their correspondence closely monitored since last year, when one of their number was apparently abducted while on a pilgrimage Saudi Arabia, a second defected to the West, a third choked to death and one or two others died in mysterious road accidents.
The Iranian Press TV announcement described Mohammadi, a senior Tehran University lecturer as a "staunch supporter" of the 1979 revolution that established the Iranian theocracy.
Police have sealed off the area for their investigation.
Monday, January 11, 2010
Israeli Robots Remake Battlefield
Nation Forges Ahead in Deploying Unmanned Military Vehicles by Air, Sea and Land
TEL AVIV, Israel – Israel is developing an army of robotic fighting machines that offers a window onto the potential future of warfare.
Sixty years of near-constant war, a low tolerance for enduring casualties in conflict, and its high-tech industry have long made Israel one of the world's leading innovators of military robotics.
View Full ImageDavid Furst/AFP for The Wall Street Journal.
Israel pioneered the use of aerial drones like the Heron, under construction, above, at Israeli Aerospace Industries.
"We're trying to get to unmanned vehicles everywhere on the battlefield for each platoon in the field," says Lt. Col. Oren Berebbi, head of the Israel Defense Forces' technology branch. "We can do more and more missions without putting a soldier at risk."
In 10 to 15 years, one-third of Israel's military machines will be unmanned, predicts Giora Katz, vice president of Rafael Advanced Defense Systems Ltd., one of Israel's leading weapons manufacturers.
"We are moving into the robotic era," says Mr. Katz.
Over 40 countries have military-robotics programs today. The U.S. and much of the rest of the world is betting big on the role of aerial drones: Even Hezbollah, the Iranian-backed Shiite guerrilla force in Lebanon, flew four Iranian-made drones against Israel during the 2006 Lebanon War.
When the U.S. invaded Iraq in 2003, it had just a handful of drones. Today, U.S. forces have around 7,000 unmanned vehicles in the air and an additional 12,000 on the ground, used for tasks including reconnaissance, airstrikes and bomb disposal.
In 2009, for the first time, the U.S. Air Force trained more "pilots" for unmanned aircraft than for manned fighters and bombers.
U.S. and Japanese robotics programs rival Israel's technological know-how, but Israel has shown it can move quickly to develop and deploy new devices, to meet battlefield needs, military officials say.
"The Israelis do it differently, not because they're more clever than we are, but because they live in a tough neighborhood and need to respond fast to operational issues," says Thomas Tate, a former U.S. Army lieutenant colonel who now oversees defense cooperation between the U.S. and Israel.
Among the recently deployed technologies that set Israel ahead of the curve is the Guardium unmanned ground vehicle, which now drives itself along the Gaza and Lebanese borders. The Guardium was deployed to patrol for infiltrators in the wake of the abduction of soldiers doing the same job in 2006. The Guardium, developed by G-nius Ltd., is essentially an armored off-road golf cart with a suite of optical sensors and surveillance gear. It was put into the field for the first time 10 months ago.
In the 2006 Lebanon War, Israeli soldiers took a beating opening supply routes and ferrying food and ammunition through hostile territory to the front lines. In the Gaza conflict in January 2009, Israel unveiled remote-controlled bulldozers to help address that issue.
Within the next year, Israeli engineers expect to deploy the voice-commanded, six-wheeled Rex robot, capable of carrying 550 pounds of gear alongside advancing infantry.
After bomb-laden fishing boats tried to take out an Israeli Navy frigate off the coast off Gaza in 2002, Rafael designed the Protector SV, an unmanned, heavily armed speedboat that today makes up a growing part of the Israeli naval fleet. The Singapore Navy has also purchased the boat and is using it in patrols in the Persian Gulf.
After Syrian missile batteries in Lebanon took a heavy toll on Israeli fighter jets in the 1973 war, Israel developed the first modern unmanned aerial vehicle, or UAV.
When Israel next invaded Lebanon in 1981, the real-time images provided by those unmanned aircraft helped Israel wipe out Syrian air defenses, without a single downed pilot. The world, including the U.S., took notice.
The Pentagon set aside its long-held skepticism about the advantages of unmanned aircraft and, in the early 1980s, bought a prototype designed by former Israeli Air Force engineer Abraham Karem. That prototype morphed into the modern-day Predator, which is made by General Dynamics Corp.
Unlike the U.S. and other militaries, where UAVs are flown by certified, costly-to-train fighter pilots, Israeli defense companies have recently built their UAVs to allow an average 18-year-old recruit with just a few months' training to pilot them.
Military analysts say unmanned fighting vehicles could have a far-reaching strategic impact on the sort of asymmetrical conflicts the U.S. is fighting in Iraq and Afghanistan and that Israel faces against enemies such as Hezbollah and Hamas.
In such conflicts, robotic vehicles will allow modern conventional armies to minimize the advantages guerrilla opponents gain by their increased willingness to sacrifice their lives in order to inflict casualties on the enemy.
However, there are also fears that when countries no longer fear losing soldiers' lives in combat thanks to the ability to wage war with unmanned vehicles, they may prove more willing to initiate conflict.
In coming years, engineers say unmanned air, sea and ground vehicles will increasingly work together without any human involvement. Israel and the U.S. have already faced backlash over civilian deaths caused by drone-fired missiles in Gaza, Pakistan and Afghanistan. Those ethical dilemmas could increase as robots become more independent of their human masters.
Write to Charles Levinson at charles.levinson@wsj.com
TEL AVIV, Israel – Israel is developing an army of robotic fighting machines that offers a window onto the potential future of warfare.
Sixty years of near-constant war, a low tolerance for enduring casualties in conflict, and its high-tech industry have long made Israel one of the world's leading innovators of military robotics.
View Full ImageDavid Furst/AFP for The Wall Street Journal.
Israel pioneered the use of aerial drones like the Heron, under construction, above, at Israeli Aerospace Industries.
"We're trying to get to unmanned vehicles everywhere on the battlefield for each platoon in the field," says Lt. Col. Oren Berebbi, head of the Israel Defense Forces' technology branch. "We can do more and more missions without putting a soldier at risk."
In 10 to 15 years, one-third of Israel's military machines will be unmanned, predicts Giora Katz, vice president of Rafael Advanced Defense Systems Ltd., one of Israel's leading weapons manufacturers.
"We are moving into the robotic era," says Mr. Katz.
Over 40 countries have military-robotics programs today. The U.S. and much of the rest of the world is betting big on the role of aerial drones: Even Hezbollah, the Iranian-backed Shiite guerrilla force in Lebanon, flew four Iranian-made drones against Israel during the 2006 Lebanon War.
When the U.S. invaded Iraq in 2003, it had just a handful of drones. Today, U.S. forces have around 7,000 unmanned vehicles in the air and an additional 12,000 on the ground, used for tasks including reconnaissance, airstrikes and bomb disposal.
In 2009, for the first time, the U.S. Air Force trained more "pilots" for unmanned aircraft than for manned fighters and bombers.
U.S. and Japanese robotics programs rival Israel's technological know-how, but Israel has shown it can move quickly to develop and deploy new devices, to meet battlefield needs, military officials say.
"The Israelis do it differently, not because they're more clever than we are, but because they live in a tough neighborhood and need to respond fast to operational issues," says Thomas Tate, a former U.S. Army lieutenant colonel who now oversees defense cooperation between the U.S. and Israel.
Among the recently deployed technologies that set Israel ahead of the curve is the Guardium unmanned ground vehicle, which now drives itself along the Gaza and Lebanese borders. The Guardium was deployed to patrol for infiltrators in the wake of the abduction of soldiers doing the same job in 2006. The Guardium, developed by G-nius Ltd., is essentially an armored off-road golf cart with a suite of optical sensors and surveillance gear. It was put into the field for the first time 10 months ago.
In the 2006 Lebanon War, Israeli soldiers took a beating opening supply routes and ferrying food and ammunition through hostile territory to the front lines. In the Gaza conflict in January 2009, Israel unveiled remote-controlled bulldozers to help address that issue.
Within the next year, Israeli engineers expect to deploy the voice-commanded, six-wheeled Rex robot, capable of carrying 550 pounds of gear alongside advancing infantry.
After bomb-laden fishing boats tried to take out an Israeli Navy frigate off the coast off Gaza in 2002, Rafael designed the Protector SV, an unmanned, heavily armed speedboat that today makes up a growing part of the Israeli naval fleet. The Singapore Navy has also purchased the boat and is using it in patrols in the Persian Gulf.
After Syrian missile batteries in Lebanon took a heavy toll on Israeli fighter jets in the 1973 war, Israel developed the first modern unmanned aerial vehicle, or UAV.
When Israel next invaded Lebanon in 1981, the real-time images provided by those unmanned aircraft helped Israel wipe out Syrian air defenses, without a single downed pilot. The world, including the U.S., took notice.
The Pentagon set aside its long-held skepticism about the advantages of unmanned aircraft and, in the early 1980s, bought a prototype designed by former Israeli Air Force engineer Abraham Karem. That prototype morphed into the modern-day Predator, which is made by General Dynamics Corp.
Unlike the U.S. and other militaries, where UAVs are flown by certified, costly-to-train fighter pilots, Israeli defense companies have recently built their UAVs to allow an average 18-year-old recruit with just a few months' training to pilot them.
Military analysts say unmanned fighting vehicles could have a far-reaching strategic impact on the sort of asymmetrical conflicts the U.S. is fighting in Iraq and Afghanistan and that Israel faces against enemies such as Hezbollah and Hamas.
In such conflicts, robotic vehicles will allow modern conventional armies to minimize the advantages guerrilla opponents gain by their increased willingness to sacrifice their lives in order to inflict casualties on the enemy.
However, there are also fears that when countries no longer fear losing soldiers' lives in combat thanks to the ability to wage war with unmanned vehicles, they may prove more willing to initiate conflict.
In coming years, engineers say unmanned air, sea and ground vehicles will increasingly work together without any human involvement. Israel and the U.S. have already faced backlash over civilian deaths caused by drone-fired missiles in Gaza, Pakistan and Afghanistan. Those ethical dilemmas could increase as robots become more independent of their human masters.
Write to Charles Levinson at charles.levinson@wsj.com
Walk Away From Your Mortgage!
The Sunday Times magazine has an interesting look at underwater home-owers by Roger Lowenstein.
He asks:
“Why should underwater homeowners behave any differently from banks?”
John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the “message” they will send to “their family and their kids and their friends.” Courson was implying that homeowners — record numbers of whom continue to default — have a responsibility to make good. He wasn’t referring to the people who have no choice, who can’t afford their payments. He was speaking about the rising number of folks who are voluntarily choosing not to pay.
Such voluntary defaults are a new phenomenon . . . The housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?
Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry…
That is a good question. Perhaps the better way to phrase it, is as follows:
The decision to walk away from an home worth considerably less than its mortgage should be made strictly as a business decision; It should be devoid of emotion, sentimentality, and other non-monetary factors. There should be a fair and honest assessments of the gains (lowered cost of living expenses, less stress) and the downside (damage to credit score, possible litigation).
It should be a calcualted business decision — just like the banks make.
>
He asks:
“Why should underwater homeowners behave any differently from banks?”
John Courson, president and C.E.O. of the Mortgage Bankers Association, recently told The Wall Street Journal that homeowners who default on their mortgages should think about the “message” they will send to “their family and their kids and their friends.” Courson was implying that homeowners — record numbers of whom continue to default — have a responsibility to make good. He wasn’t referring to the people who have no choice, who can’t afford their payments. He was speaking about the rising number of folks who are voluntarily choosing not to pay.
Such voluntary defaults are a new phenomenon . . . The housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?
Businesses — in particular Wall Street banks — make such calculations routinely. Morgan Stanley recently decided to stop making payments on five San Francisco office buildings. A Morgan Stanley fund purchased the buildings at the height of the boom, and their value has plunged. Nobody has said Morgan Stanley is immoral — perhaps because no one assumed it was moral to begin with. But the average American, as if sprung from some Franklinesque mythology, is supposed to honor his debts, or so says the mortgage industry…
That is a good question. Perhaps the better way to phrase it, is as follows:
The decision to walk away from an home worth considerably less than its mortgage should be made strictly as a business decision; It should be devoid of emotion, sentimentality, and other non-monetary factors. There should be a fair and honest assessments of the gains (lowered cost of living expenses, less stress) and the downside (damage to credit score, possible litigation).
It should be a calcualted business decision — just like the banks make.
>
America slides deeper into depression as Wall Street revels
December was the worst month for US unemployment since the Great Recession began.
The labour force contracted by 661,000. This did not show up in the headline jobless rate because so many Americans dropped out of the system. The broad U6 category of unemployment rose to 17.3pc. That is the one that matters.
Wall Street rallied. Bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism.
The home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. The local sheriff will escort them out of the door, often with some sympathy –– just like the police in 1932, mostly Irish Catholics who tithed 1pc of their pay for soup kitchens.
Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath.
Judges are finding ways to block evictions. One magistrate in Minnesota halted a case calling the creditor "harsh, repugnant, shocking and repulsive". We are not far from a de facto moratorium in some areas.
This is how it ended between 1932 and 1934, when half the US states declared moratoria or "Farm Holidays". Such flexibility innoculated America's democracy against the appeal of Red Unions and Coughlin Fascists. The home siezures are occurring despite frantic efforts by the Obama administration to delay the process.
This policy is entirely justified given the scale of the social crisis. But it also masks the continued rot in the housing market, allows lenders to hide losses, and stores up an ever larger overhang of unsold properties. It takes heroic naivety to think the US housing market has turned the corner (apologies to Goldman Sachs, as always). The fuse has yet to detonate on the next mortgage bomb, $134bn (£83bn) of "option ARM" contracts due to reset violently upwards this year and next.
US house prices have eked out five months of gains on the Case-Shiller index, but momentum stalled in October in half the cities even before the latest surge of 40 basis points in mortgage rates. Karl Case (of the index) says prices may sink another 15pc. "If the 2008 and 2009 loans go bad, then we're back where we were before – in a nightmare."
David Rosenberg from Gluskin Sheff said it is remarkable how little traction has been achieved by zero rates and the greatest fiscal blitz of all time. The US economy grew at a 2.2pc rate in the third quarter (entirely due to Obama stimulus). This compares to an average of 7.3pc in the first quarter of every recovery since the Second World War.
Fed hawks are playing with fire by talking up about exit strategies, not for the first time. This is what they did in June 2008. We know what happened three months later. For the record, manufacturing capacity use at 67.2pc, and "auto-buying intentions" are the lowest ever.
The Fed's own Monetary Multiplier crashed to an all-time low of 0.809 in mid-December. Commercial paper has shrunk by $280bn ($175bn) in since October. Bank credit has been racing down a hair-raising black run since June. It has dropped from $10.844 trillion to $9.013 trillion since November 25. The MZM money supply is contracting at a 3pc annual rate. Broad M3 money is contracting at over 5pc.
Professor Tim Congdon from International Monetary Research said the Fed is baking deflation into the pie later this year, and perhaps a double-dip recession. Europe is even worse.
This has not stopped an army of commentators is trying to bounce the Fed into early rate rises. They accuse Ben Bernanke of repeating the error of 2004 when the Fed waited too long. Sometimes you just want to scream. In 2004 there was no housing collapse, unemployment was 5.5pc, banks were in rude good health, and the Fed Multiplier was 1.73.
How anybody can see imminent inflation in the dying embers of core PCE, just 0.1pc in November, is beyond me.
Mr Rosenberg is asked by clients why Wall Street does not seem to agree with his grim analysis.
His answer is that this is the same Mr Market that bought stocks in October 1987 when they were 25pc overvalued on Shiller "10-year normalized earnings basis" – exactly as they are today – and bought them at even more overvalued prices in 2007, long after the property crash had begun, Bear Stearns funds had imploded, and credit had its August heart attack. The stock market has become a lagging indicator. Tear up the textbooks.
The labour force contracted by 661,000. This did not show up in the headline jobless rate because so many Americans dropped out of the system. The broad U6 category of unemployment rose to 17.3pc. That is the one that matters.
Wall Street rallied. Bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism.
The home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. The local sheriff will escort them out of the door, often with some sympathy –– just like the police in 1932, mostly Irish Catholics who tithed 1pc of their pay for soup kitchens.
Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath.
Judges are finding ways to block evictions. One magistrate in Minnesota halted a case calling the creditor "harsh, repugnant, shocking and repulsive". We are not far from a de facto moratorium in some areas.
This is how it ended between 1932 and 1934, when half the US states declared moratoria or "Farm Holidays". Such flexibility innoculated America's democracy against the appeal of Red Unions and Coughlin Fascists. The home siezures are occurring despite frantic efforts by the Obama administration to delay the process.
This policy is entirely justified given the scale of the social crisis. But it also masks the continued rot in the housing market, allows lenders to hide losses, and stores up an ever larger overhang of unsold properties. It takes heroic naivety to think the US housing market has turned the corner (apologies to Goldman Sachs, as always). The fuse has yet to detonate on the next mortgage bomb, $134bn (£83bn) of "option ARM" contracts due to reset violently upwards this year and next.
US house prices have eked out five months of gains on the Case-Shiller index, but momentum stalled in October in half the cities even before the latest surge of 40 basis points in mortgage rates. Karl Case (of the index) says prices may sink another 15pc. "If the 2008 and 2009 loans go bad, then we're back where we were before – in a nightmare."
David Rosenberg from Gluskin Sheff said it is remarkable how little traction has been achieved by zero rates and the greatest fiscal blitz of all time. The US economy grew at a 2.2pc rate in the third quarter (entirely due to Obama stimulus). This compares to an average of 7.3pc in the first quarter of every recovery since the Second World War.
Fed hawks are playing with fire by talking up about exit strategies, not for the first time. This is what they did in June 2008. We know what happened three months later. For the record, manufacturing capacity use at 67.2pc, and "auto-buying intentions" are the lowest ever.
The Fed's own Monetary Multiplier crashed to an all-time low of 0.809 in mid-December. Commercial paper has shrunk by $280bn ($175bn) in since October. Bank credit has been racing down a hair-raising black run since June. It has dropped from $10.844 trillion to $9.013 trillion since November 25. The MZM money supply is contracting at a 3pc annual rate. Broad M3 money is contracting at over 5pc.
Professor Tim Congdon from International Monetary Research said the Fed is baking deflation into the pie later this year, and perhaps a double-dip recession. Europe is even worse.
This has not stopped an army of commentators is trying to bounce the Fed into early rate rises. They accuse Ben Bernanke of repeating the error of 2004 when the Fed waited too long. Sometimes you just want to scream. In 2004 there was no housing collapse, unemployment was 5.5pc, banks were in rude good health, and the Fed Multiplier was 1.73.
How anybody can see imminent inflation in the dying embers of core PCE, just 0.1pc in November, is beyond me.
Mr Rosenberg is asked by clients why Wall Street does not seem to agree with his grim analysis.
His answer is that this is the same Mr Market that bought stocks in October 1987 when they were 25pc overvalued on Shiller "10-year normalized earnings basis" – exactly as they are today – and bought them at even more overvalued prices in 2007, long after the property crash had begun, Bear Stearns funds had imploded, and credit had its August heart attack. The stock market has become a lagging indicator. Tear up the textbooks.
Wednesday, January 6, 2010
Emanuel: U.S. is fed up with Israel, Palestinians
White House Chief of Staff Rahm Emanuel recently told the Israeli consul in Los Angeles that the Obama administration is fed up with both Israel and the Palestinians, Army Radio reported on Wednesday. Emanuel met with Jacob Dayan, consul general of Israel in Los Angeles, about two weeks ago, after which Dayan briefed the Foreign Ministry. Emanuel told Dayan the U.S. is sick of the Israelis, who adopt suitable ideas months too late, when they are no longer effective, according to Army Radio.
Advertisement
The U.S. is also sick of the Palestinians who never miss an opportunity to miss an opportunity, Emanuel reportedly said. Emanuel added that if there is no progress in the peace process, the Obama administration will reduce its involvement in the conflict, because, as he reportedly said, the U.S. has other matters to deal with. Emanuel reportedly said that Prime Minister Benjamin Netanyahu publicly acknowledged the two-state solution too late, and that the freeze on settlement construction in the West Bank came only after months of U.S. pressure. The report added that both sides reportedly rejected the peace plan proposed by former Prime Minister Ehud Olmert, but that if there is progress in peace talks, Obama might visit Israel and the region
Advertisement
The U.S. is also sick of the Palestinians who never miss an opportunity to miss an opportunity, Emanuel reportedly said. Emanuel added that if there is no progress in the peace process, the Obama administration will reduce its involvement in the conflict, because, as he reportedly said, the U.S. has other matters to deal with. Emanuel reportedly said that Prime Minister Benjamin Netanyahu publicly acknowledged the two-state solution too late, and that the freeze on settlement construction in the West Bank came only after months of U.S. pressure. The report added that both sides reportedly rejected the peace plan proposed by former Prime Minister Ehud Olmert, but that if there is progress in peace talks, Obama might visit Israel and the region
Subscribe to:
Posts (Atom)