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ECUADOR FIRMA CONTRATO CON PETROBRAS Y ROMPE CON REPSOL YPF

Posted by Gilmour Poincaree on October 31, 2008

La Habana, viernes 31 de octubre de 2008. Año 12 / Número 303

Actualizado 5:45 p.m. hora local

QUITO, 31 de octubre (PL).— El gobierno ecuatoriano firmó hoy un acuerdo con la petrolera brasileña PETROBRAS que garantiza mayores ingresos al país y terminó su relación con la compañía española Repsol YPF.

El presidente ejecutivo de la estatal PETROECUADOR, Luis Jaramillo, destacó la rubrica del convenio con PETROBRAS, el cual despeja el camino para modificar los actuales convenios de participación por otros de prestación de servicios.

Jaramillo y el gerente general de PETROBRAS en Ecuador, Dirceu Abrahao, firmaron el acuerdo, que establece un incremento de la renta petrolera para Ecuador del 67 al 81 por ciento por la explotación de crudo en el Bloque 18 y el Convenio de Explotación Unificada del campo Palo Azul.

PETROBRAS produce unos 32 mil barriles diarios de petróleo en este territorio andino.

El nuevo contrato tendrá una vigencia de un año mientras se negocia otro para cambiar a la modalidad de prestación de servicios, en el que el Estado será el dueño del crudo y sólo pagará por su extracción.

El ministro ecuatoriano de Minas y Petróleo, Derlis Palacio, saludó este convenio y señaló que evidencia la buena voluntad y seriedad del gobierno del presidente Rafael Correa para dialogar con las compañías.

Palacio anunció, asimismo, que el gobierno resolvió concluir la relación laboral con Repsol YPF y ordenó a PETROECUADOR iniciar la terminación anticipada de los contratos con esa empresa española.

Repsol tendrá que salir del país “apenas se cumplan los procesos legales que se establecen”, recalcó al reiterar que “la decisión está tomada”.

El titular indicó que “lastimosamente con Repsol no hemos podido llegar a un acuerdo” para la modificación de los acuerdos de explotación petrolera y enfatizó en que “ellos han cambiado constantemente de criterio y no nos han permitido llegar a una negociación”.

Finalmente, reiteró la decisión del Ejecutivo de cambiar los actuales acuerdos por otros de prestación de servicios y no le temblará la mano para adoptar medidas similares con otras petroleras si fracasan las pláticas.

Repsol opera los bloques 14 y 16 y en 2007 reportó una producción de 6,6 millones de barriles.

Al momento Ecuador modificó sus acuerdos con las empresas Andes Petroleum y PETROBRAS, mientras ha terminado por mutuo acuerdo el contrato con City Oriente y avanza en negociaciones con otras compañías petroleras.

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Posted in A QUESTÃO ENERGÉTICA, BRASIL, ECONOMIA - BRASIL, ECONOMIC CONJUNCTURE, ECONOMY, ECUADOR, ENERGY, EUROPE, EXPANSÃO ECONÔMICA, EXPANSÃO INDUSTRIAL, FLUXO DE CAPITAIS, INDÚSTRIAS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, PETRÓLEO, PETROL, RELAÇÕES INTERNACIONAIS - BRASIL, SOUTH AMERICA, SPAIN, THE FLOW OF INVESTMENTS | Leave a Comment »

REFINAN PETRÓLEO EN CUBA

Posted by Gilmour Poincaree on October 31, 2008

30/10/2008

Por William Fernández Jiménez

Cuba trabaja de manera intensamente en la creación de nuevas capacidades de refinación de petróleo REFINERIA CAMILO CIENFUEGOS - CUBAcomo resultado de los diferentes mecanismos de solidaridad, integración y cooperación con la República Bolivariana de Venezuela.

Esas acciones posibilitarán ampliar las producciones en las refinerías de Cienfuegos, recién reinaugurada y modernizar la existente en Santiago de Cuba, donde también se proyecta construir una con capacidad para procesar 150 000 barriles anuales.

El descubrimiento de nuevos pozos y la continua exploración para hallar otros, permiten incrementar las reservas del país y mantener niveles de producción similares a los actuales e incluso, pudieran ampliarse.

Antes había que contratar las máquinas para perforar, reparar y cementar; hoy el país cuenta con el equipamiento necesario para asumir los pozos de la Empresa Cubana del Petróleo.

Unido a esto, se impulsa el aprovechamiento del gas acompañante en la generación de combustible doméstico y el correcto manejo del agua, partes de la mezcla triflujo que emana de los pozos.

A eso se suma que de conjunto con el Ministerio de Ciencia, Tecnología y Medio Ambiente la mayor de Las Antillas desarrolla acciones encaminadas a minimizar las afectaciones al entorno.

Fuente AIN

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Posted in CENTRAL AMERICA, CUBA, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, PETROL, REFINERIES - PETROL/BIOFUELS, THE FLOW OF INVESTMENTS, VENEZUELA | Leave a Comment »

EL MUNDO SE CANSA DEL DOMINIO DEL DÓLAR

Posted by Gilmour Poincaree on October 31, 2008

[31.10.2008]- Actualización 9:40 am de Cuba

por Paul Craig Roberts *

Traducido del inglés para Rebelión por Germán Leyens

¿Qué explica la paradoja de la fuerte subida del valor del dólar contra otras monedas (excepto el yen japonés) a pesar de la desproporcionada vulnerabilidad de EE.UU. a la peor crisis financiera desde la Gran Depresión?

La respuesta no yace en la mejora de los fundamentos de la economía de EE.UU. o en mejores perspectivas para que el dólar mantenga su papel de moneda de reserva.

El aumento del valor de cambio del dólar se debe a dos factores:

Un factor es la huída tradicional hacia la moneda de reserva resultante del pánico. La gente hace simplemente lo que ha hecho siempre. Pam Martens predijo correctamente que la demanda de notas del Tesoro de EE.UU. provocada por el pánico fortalecería el dólar de EE.UU.

El otro factor es el desdoble del carry trade [financiarse en una divisa para invertir en otra]. El carry trade se originó en los tipos de interés extremadamente bajos en Japón. Inversionistas y especuladores pidieron prestados yenes japoneses a una tasa de interés de un medio por ciento, convirtieron los yenes en otras monedas, y compraron instrumentos de deuda de otros países que pagan tasas de interés mucho más elevadas. En efecto, estaban obteniendo fondos prácticamente gratuitos de Japón para prestarlos a otros que pagaban intereses más altos.

La crisis financiera ha revertido este proceso. Los tóxicos derivados estadounidenses fueron vendidos en todo el mundo por Wall Street. Han puesto en peligro los balances y la solvencia de instituciones financieras en todo el mundo, incluyendo a gobiernos nacionales como Islandia y Hungría. Bancos y gobiernos que invirtieron en los atribulados instrumentos financieros estadounidenses vieron que sus propios instrumentos de la deuda estaban en peligro.

Los que usaron préstamos en yen para comprar, por ejemplo, instrumentos de deuda de bancos europeos o bonos islandeses, enfrentaron pérdidas potencialmente catastróficas. Inversionistas y especuladores vendieron sus instrumentos financieros de mayor rendimiento en una lucha por conseguir dólares y yenes para pagar sus préstamos japoneses. Este hizo subir los valores del yen y del dólar de EE.UU., la moneda de reserva que puede ser utilizada para pagar deudas, e hizo bajar los valores de otras monedas.

La subida del dólar es temporal, y sus perspectivas son poco prometedoras. El déficit comercial de EE.UU. disminuirá por los menores gastos de los consumidores durante la recesión, pero seguirá siendo el mayor del mundo y EE.UU. no lo puede reducir exportando más.

La manera como se financia el déficit comercial de EE.UU. es que extranjeros compran más activos en dólares, que ya pesan demasiado en sus portafolios.

El déficit presupuestario de EE.UU. es grande y crece, agregando cientos de miles de millones de dólares más a una deuda nacional que ya es muy grande. Ya que los inversionistas huyen de las acciones hacia notas del gobierno de EE.UU., el mercado de bonos del Tesoro de EE.UU. dependerá temporalmente menos de gobiernos extranjeros. No obstante, la carga sobre los extranjeros y sobre los ahorros del mundo de tener que financiar el consumo estadounidense, las guerras del gobierno de EE.UU. y su presupuesto militar, y el rescate financiero de EE.UU. es resentida cada vez más.

Este resentimiento, combinado con el daño hecho a la reputación de EE.UU. por la crisis financiera, ha llevado a numerosos llamados a favor de un nuevo orden financiero en el que EE.UU. juegue un papel de importancia sustancialmente menor. “Superar la crisis financiera” son las palabras clave para el resto de la intención del mundo de derrocar la hegemonía financiera de EE.UU.

Brasil, Rusia, India y China han formado un nuevo grupo (BRIC) para coordinar sus intereses en la cumbre financiera de noviembre en Washington, D.C.

El 28 de octubre, RIA Novosti informó que el primer ministro ruso, Vladimir Putin, sugirió a China que los dos países utilicen sus propias divisas en su comercio bilateral, evitando así el uso del dólar. El primer ministro de China, Wen Jiabao, respondió que el fortalecimiento de las relaciones bilaterales es estratégico.

Europa también ha notificado que se propone ejercer un nuevo papel de liderazgo. Cuatro miembros del Grupo de Siete naciones industriales: Francia, Gran Bretaña, Alemania e Italia, utilizaron la crisis financiera para pedir reformas globales del sistema financiero mundial. Jose Manual Barroso, presidente de la Comisión Europea, dijo que un nuevo sistema financiero mundial es posible sólo “si Europa tiene un rol de liderazgo.”

El presidente ruso, Dmitry Medvedev, dijo que el “egoísmo económico” de la “visión unipolar del mundo” de EE.UU. es una “política sin porvenir.”

Las masivas reservas de divisas extranjeras de China y su fuerte posición en la manufactura han dado a China el papel dirigente en Asia. El primer ministro adjunto de Tailandia, llamó recientemente al yuan chino “la legítima y ungida moneda convertible del mundo.”

Normalmente, los chinos se muestran muy circunspectos en lo que dicen, pero el 24 de octubre, Reuters informó que el People’s Daily, el periódico oficial del gobierno, en un comentario en primera plana, acusó a EE.UU. de saquear “la riqueza global mediante la explotación de la dominación del dólar.” Para corregir esta situación inaceptable, el comentario llamaba a que los países asiáticos y europeos “proscribieran el dólar de sus relaciones comerciales directas, basándose sólo en sus propias monedas.” Y este paso, dijo el comentario, es sólo un primer paso para el derrocamiento de la dominación del dólar.

Los chinos están expresando otros pensamientos que merecerían la atención de un gobierno estadounidense menos iluso y arrogante. Zhou Jiangong, editor de la publicación en línea, Chinastates.com, preguntó recientemente: “¿Por qué debiera China ayudar interminablemente a EE.UU. a hacer deudas en la creencia de que el crédito nacional de EE.UU. puede expandir sin límite?”

La solución de Zhou Jiangong para los excesos estadounidenses es que China se haga cargo de Wall Street.

China tiene el dinero para hacerlo, y los prudentes chinos harían un mejor trabajo que la multitud de ladrones que han destruido la reputación financiera de EE.UU. mientras explotaban al mundo a la busca de bonificaciones multimillonarias en dólares.

* Paul Craig Roberts fue secretario adjunto del Tesoro en el gobierno de Ronald Reagan. Asimismo, fue redactor jefe asociado del Wall Street Journal, en su sección de editoriales, durante 16 años columnista de Business Week, y columnista de Scripps Howard News Service and Creator’s Syndicate en Los Angeles. Ha ocupado numerosas cátedras universitarias, incluyendo la Cátedra William E. Simon Chair en Economía Política, Centro de Estudios Estratégicos e Internacionales, Universidad de Georgetown e Investigador Invitado Sénior, Hoover Institution, Universidad Stanford. Fue condecorado con la Legión de Honor por el Presidente de Francia y con la Medalla de Plata del Tesoro de EE.UU. por “sobresalientes contribuciones a la formulación de la política económica de EE.UU.” Es co-autor de “The Tyranny of Good Intentions.” Para contactos, escriba a: PaulCraigRoberts@yahoo.com

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Posted in ASIA, BANKING SYSTEMS, BRASIL, CENTRAL BANKS, CHINA, COMMONWEALTH OF INDEPENDENT STATES, ECONOMIC CONJUNCTURE, ECONOMY, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDIA, INTERNATIONAL, RUSSIA, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

IPEA: CRISE PÕE EM XEQUE PADRÃO DE AVANÇO DO SÉCULO 20 (Brasil)

Posted by Gilmour Poincaree on October 31, 2008

31/10/2008

O presidente do Instituto de Pesquisa Econômica Aplicada (Ipea), Marcio Pochmann, disse, nesta quinta-feira (30), que é difícil avaliar se o pior da crise financeira internacional já passou porque a situação indica ser de longa duração. “Está em xeque o padrão de crescimento do século 20, que aliás é fortemente degradante do meio ambiente”, afirmou o presidente da instituição, que é uma fundação pública vinculada ao Núcleo de Assuntos Estratégicos da Presidência da República.

Pochmann destacou ser necessária a reconstrução da regulação do sistema financeiro internacional. “As ações até agora são contra os efeitos da crise, e não sobre as causas da crise”, disse. Para ele, as causas estão ligadas à descrença na moeda de curso internacional, o dólar, e à necessidade de refundação das regras e das instituições do sistema financeiro internacional.

Segundo Pochmann, instituições multilaterais como o Fundo Monetário Internacional (FMI) e o Banco Mundial ficaram à margem do enfrentamento da crise e as decisões estão sendo tomadas pelos bancos centrais dos países. Ele declarou que os derivativos no mundo são mais de US$ 600 trilhões, enquanto o orçamento do FMI é de US$ 400 bilhões. “É uma desproporção enorme”, disse. Pochmann considera necessário ter autoridades multilaterais renovadas, com capacidade de intervenção. “Isso significa acordo entre países.” Com a eleição nos Estados Unidos este ano, ele avalia que decisões sobre o que considera as causas da crise devem ser tomadas no médio prazo e a partir do ano que vem.

Brasil

O presidente do Ipea disse também que “não é irreal imaginar uma expansão ao redor de 4%” para o Produto Interno Bruto (PIB) brasileiro em 2009. Ele explicou que, por um efeito estatístico, se este ano o PIB crescer 5%, o PIB do ano que vem terá aumento entre 2,8% e 3%, “a não ser que haja recessão, o que a gente não espera”.

Pochmann afirmou ainda que no seu modo de ver “seria interessante” a redução ou uma parada com viés de baixa da taxa básica de juros, a Selic, que foi mantida ontem sem viés pelo Banco Central em 13,75% ao ano. Ele comentou que “dentro da visão ortodoxa do Banco Central, é interessante destacar que estancaram a subida dos juros”.

Para Pochmann, a desaceleração da atividade econômica em função da crise internacional faz com que haja uma tendência de queda no “núcleo duro” da inflação. Ele comentou ainda que há uma convergência de queda nas taxas de juros no mundo devido à crise e que a taxa brasileira é das mais altas. As declarações foram feitas em entrevista coletiva ao chegar para a 4ª Jornada de Estudos de Regulação, no Ipea.

Fonte: Agência Estado

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Posted in BANCO CENTRAL - BRASIL, BANKING SYSTEM - USA, BANKING SYSTEMS, BRASIL, ECONOMIA - BRASIL, ECONOMIC CONJUNCTURE, ELECTIONS 2008 - USA, EXPANSÃO ECONÔMICA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, IMF, O SISTEMA BANCÁRIO - BRASIL, PRODUTO INTERNO BRUTO, THE FLOW OF INVESTMENTS, USA, WORLD BANK | Leave a Comment »

JOINT SCO EFFORTS URGED TO BEAT FINANCIAL WOES – Ensuring the security of China’s economy would be the country’s most important contribution toward global financial stability, Premier Wen Jiabao said

Posted by Gilmour Poincaree on October 31, 2008

UPDATED: October-31-2008

Ensuring the security of China’s economy would be the country’s most important contribution toward Prime ministers representing the Shanghai Cooperation Organization (SCO) member countries poses for a group photo in Astana, October 30, 2008 - Xinhuaglobal financial stability, Premier Wen Jiabao told prime ministers from the Shanghai Cooperation Organization (SCO) Thursday.

“It is necessary to have greater interaction between our financial and business communities,” Wen said. “SCO members must work … to enhance the coordination of monetary policies and improve financial controls to prevent and neutralize financial risks.”

Wen said China would consider issuing loans to members of the organization to ensure food security and support joint projects in the region.

“Because of the increasing relevance of food security, China stands ready to assist SCO member organizations in the establishment of technical facilities for agriculture,” he said.

Food prices have soared across the region over the past year as a result of increasing energy costs and disappointing harvests.

The SCO, an inter-governmental organization founded in Shanghai in 2001, groups China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Pakistan, India, Iran and Mongolia are observer nations.

Wen arrived here Wednesday evening on a three-day official visit to Kazakhstan, the second leg of his two-nation tour after Russia.

(China Daily via Agencies/Xinhua October 31, 2008)

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PUBLISHED BY ‘BEIJING REVIEW’ (China)

Posted in AGRICULTURE, ASIA, BANKING SYSTEMS, CENTRAL BANKS, CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAN, MACROECONOMY, PAKISTAN, THE FLOW OF INVESTMENTS | 1 Comment »

EARNINGS FROM POTASH EXPORTS SURGE TO JD301.4M (Jordan)

Posted by Gilmour Poincaree on October 31, 2008

31 October 2008

AMMAN (Petra) – Earnings from potash exports rose to JD301.4 million during the first eight months of this year, according to the website of the Central Bank of Jordan. Exports during the January–August period of last year amounted to JD148.2 million. Potash ranked second among the country’s exports, after garments. The increase in earnings were attributed to higher potash prices and a slight rise in exported quantities. India, Malaysia and China were the principal importers of Jordan’s potash as they accounted for two-thirds of the exports.

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Posted in ASIA, CHEMICALS (crude components), CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JORDAN, MALAYSIA, MIDDLE EAST | Leave a Comment »

TIME FOR A RETHINK – The UAE’s banks are being forced to re-examine systems and processes in the aftermath of a major ATM fraud

Posted by Gilmour Poincaree on October 31, 2008

Wednesday, 08 October 2008

by ArabianBusiness.com staff writer

The UAE’s banks are now assessing the lessons learned from one of the country’s worst ATM frauds. Last month, thousands of dollars allegedly disappeared from accounts across some of the UAE’s biggest banks, prompting calls for a radical rethink of security procedures and practices.

Details of credit and debit cards, including PINs and replica cards have allegedly been used internationally during the incident. The specific and accurate data required to commit fraud of this magnitude could only have been acquired through a significant breach of bank security.

The apparent theft of information has prompted alerts from some of the country’s major banks, for customers to change their PINs post haste, in an attempt to prevent theft from continuing.

Lloyds Bank, HSBC, Dubai Bank, Visa and CBI, are among those financial institutions who have issued statements on the matter, while many other affected organisations appear to have gone to ground over the issue.

Some banking security experts have put the incident down to a trusting mentality in the UAE that has transferred itself to the banking security sector, where historically, cases of fraud have been extremely rare. One expert commented that because banks have never had to worry about this issue previously, they have become overwhelmed to find their current security systems are inadequate.

The incident has left ATM and card security specialists scratching their heads, perplexed by the conundrum of exactly how the fraud was perpetrated. At this stage all that is known is that important customer data was accessed through UAE banks, and distributed for use internationally.

Very little is known about how this important and supposedly secure data was accessed, leading to much speculation within the finance community. It is clear that the fraudsters accessed a variety of accounts across many different banks within the UAE, and the fraudulent transactions did not take place within the country.

General manager of security firm Scanit, David Michaux, says there are two major theories as to how the fraudsters acquired the information needed to access accounts and replicate credit and debit cards.

“One is the fact that it was a skimming exercise, and there was a team that worked here by attaching a card reader to the ATM and found a way to read the PIN. If that’s the case it would be a good day. A bad day would be if it was a data breach, that would be very serious,” says Michaux.

The second theory is that the attack was too well-planned to have been a skimming exercise, and must have been a calculated data breach. “What we saw was definitely a planned attack, it was not an accident, or something where somebody stumbled across information on Tuesday and used it on Wednesday. They would have been storing the information and setting this up days or weeks in advance,” says Trend Micro’s Middle East director, Justin Doo.

“We have a very, very trusting society in this area. We haven’t managed to get the message out into the market about what the threats are. And the same goes for the high level security. If you look at what happened here, it was a fairly major network compromise,” says Doo.

Most of the effected banks have declined to provide detailed comment on the incident, with some releasing brief written statements on the theft, and most issuing alerts to customers to change their PIN.

Credit card company Visa released the following statement after they became aware of the KESHEK - UAE's banks have been lax about upgrading security software.matter: “Visa is aware of a possible network intrusion in UAE and will participate in any investigation as appropriate. In the meantime, the company is working with all banks in the country to ensure that appropriate security measures are being taken to prevent any potential breaches.”

With the majority of financial institutions providing statements much akin to this, it is difficult to gauge the magnitude of the situation at this point in time. But whether it was the case of one person’s details being taken, or several thousand customer accounts being accessed, the fact still remains that any breach of bank security is a serious issue for local financial institutions.

A myriad of suggestions have emerged from international banking experts following the intrusion with many commenting that drastic changes are needed in the country’s financial security sector, if it is to be recognised as a world class financial hub.

Cambridge professor of security engineering Ross Anderson says the magnetic stripe technology currently used in the UAE, is particularly vulnerable to fraud.

“It is entirely trivial for anyone to attach a skimmer to an ATM and pick up card and PIN data to be used at some other ATM in Dubai, America, Thailand or anywhere,” says Anderson.

One of the major suggestions from security experts is for card companies in the region to make the switch from magnetic stripe cards, to chip card, or Chip and PIN technology. This system requires both the customer’s personal details and a microchip contained within the card to be present at any particular time for a transaction to be processed. But the question still begs to be answered: would this technology really prevent future cases of fraud?

“Well it certainly would prevent some types of fraud. It depends on whether it is card-present fraud. But I think in this case a lot of the focus will be around having good detection software and also having the analytics to identify potential fraud that might be going on,” says Datamonitor’s director of analysis for financial services and technology, Daniel Mayo.

“What they should be doing is using analytical software, or fraud prevention software that can look at suspicious transactions and patterns. The other thing they should be doing is trying to work more internationally so they can see cards that may have been flagged in other markets, and are known to be fraudulent,” says Mayo.

“The problem of fraud is one that doesn’t really go away. You tend to find that fraud moves across countries, so as one country strengthens fraud protection you will find that fraudsters start to attack other emerging markets,” he claims.

Regional director of Level Four Software, Issa Keshek, agrees that fraud cases of this magnitude tend to occur in countries where the economy is expanding and new banks are constantly opening, creating a more attractive target for hackers. “This is something that we have been talking to banks about because it is a mirror image of what took place in Europe and is taking place in Australia right now,” says Keshek.

He also says the banks have become lax in updating their security applications because of the climate of safety that appears present in the UAE. He says they need to switch from manually updating these programs, to automatic updates in order to stave off future attacks on banking networks.

“Banks in the UAE have been testing these applications manually. The downside to this method is that this is such a time consuming process and you wouldn’t do as thorough testing as required to ensure that no hacking is possible.

The only way to circumvent that is to have EMV or chip-based cards and to do your testing as frequently as required, making sure you use automated testing to remain compliant with the latest EMV mandate,” adds Keshek.

But not everyone agrees that a migration to EMV technology will dramatically add to card security in MAYO - Chip and PIN would prevent 'some' types of fraud.the Middle East. According to Cambridge University professor, Ross Anderson, the Chip and PIN system is only slightly more resistant to fraud than the magnetic stripe system.

“It’s slightly harder to commit fraud with Chip and PIN but not that much harder, because people can sabotage the Chip and PIN terminals in order to get the terminal to automatically collect card and PIN data. Those cards are used very widely in retail now in Europe as well as in ATMs so there are millions of opportunities to collect card data,” says Anderson.

He says the best way for the UAE to move forward in the area of card security is to adopt a system akin to the US regulatory scheme, which was introduced after an elderly woman successfully sued Citibank over a number of disputed ATM transactions involving a relatively small amount of money.

“In America, if there is a dispute, the consumer is right. In Britain the first ATM cases went the other way because the banks used legal tactics and weighted money arguments to prevent the cases ever being heard. So in the UK, the banks can tell you that you must be mistaken or lying,” Anderson says.

“The curious thing here is that the American banks spend less money on security and have less fraud than UK banks, because UK banks are into liability management rather than risk management and they know the customer complaints won’t be properly investigated. If the UAE is contemplating which system to use to resolve these disputes, the American system is the only answer. Only if the customer is shielded from fraud, and the bank has to [absorb] the cost, will the bank then have the proper economic incentives to invest in system security,” explains Anderson.

“If the UAE wants to safeguard its position as the financial hub of the Gulf, then one of the things it has to be paying attention to at this time is bank regulation. The regulation of computer security is not the big ticket item. Consumer protection is a part of the security mix that cannot be ignored,” he adds.

With the burgeoning economy across the UAE, especially in the emirates of Dubai and Abu Dhabi, the nation’s banks are becoming increasingly attractive targets for hackers and fraudsters.

The vast majority of the security community has struck a harmonious chord with their call for an upgrade of banking security systems; however, the dispute lies in deciding the best method of doing so.

Whether this upgrade takes place at a regulatory level, an IT systems level, or at a customer education level, the recent incident has made it painfully obvious that the security of electronic banking in the country is in dire need of an overhaul.

Preventing fraud

• Upgrade cardholder base to Chip and PIN: Both the PIN and the chip in the card must be present for the transaction to be processed.

• Better regulations: Rules need to be in place to establish liability in fraud cases.

• Update to automated security testing: Tests and upgrades of security software should be conducted more frequently.

• Increase bank disclosure: Banks should discuss these issues more openly with the public and increase accountability.

• Improve customer education on how to avoid fraud.

• Stricter monitoring and flagging of fraudulent cards globally: Local banks require improved tracking of international fraud scams.

• Biometric readers: Install fingerprint readers or retinal scanners on ATMs.

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ABU DHABI, QATAR BUY STAKE IN BARCLAYS BANK

Posted by Gilmour Poincaree on October 31, 2008

Friday, 31 October 2008

by Steve Slater

GULF INVESTORS - Barclays Bank to raise $12 billion from Abu Dhabi and Qatar - Getty Images - British British bank Barclays Plc is to raise 7.3 billion pounds ($12.1 billion) from investors from Qatar and Abu Dhabi and others to allow it to avoid taking government rescue cash, it said on Friday.

Britain’s second biggest bank said it is raising up to 3.5 billion pounds from Sheikh Mansour Bin Zayed Al Nahyan, a member of Abu Dhabi’s royal family. That could give him a 16.3 percent stake in the bank.

It is raising up to 2 billion pounds from Qatar Holding and 300 million from Challenger, an investment vehicle of a member of Qatar’s royal family.

That could leave Qatar Holding with a 12.7 percent stake and Challenger with 2.8 percent.

Barclays shares initially jumped after the news as investors welcomed the bank’s ability to raise cash in tough markets and an adequate trading update, but later eased back. At 1.30pm Dubai time they were unchanged at just over 205 pence after touching 228p.

The bank said group profit in the first nine months of this year was “slightly ahead” of the same level a year earlier.

It took a net writedown of 129 million pounds from credit market writedowns for the third quarter, but said 1 billion pounds of gains on debt it carries were reversed in October.

Barclays’ investor base has been transformed in the past two years, as it has raised funds from investors in China, Singapore and Japan as well as the Middle East and the bank expects to benefit commercially from the links as well as getting cash.

“There has been a significant shift in the availability of capital and economic power in the world over the last five years and we’re ensuring we’re aligned with those changes,” said John Varley, Barclays chief executive.

The bank is seeking to raise up to a further 1.5 billion pounds from the sale of MCNs (mandatorily convertible notes) with existing and other investors.

Asked on a conference call whether Barclays has enough capital to avoid more fundraising, Varley said: “Yes, we have what we need.”

Barclays earlier this month turned down an offer of government funds under Britain’s 400 billion bailout package and said it would raise capital privately.

Rivals Royal Bank of Scotland, Lloyds TSB and HBOS have agreed to take up to 37 billion pounds of taxpayers’ funds to help rebuild balance sheets hit by the credit crisis and prepare for possible recession.

Barclays said when the government’s recapitalisation plan was announced that it planned to raise about 6.5 billion pounds, with 3 billion from the sale of preference shares and the rest from selling ordinary shares. It had until the end of March to raise funds.

Those sales were expected to increase the bank’s core tier 1 capital ratio to about 8 percent, analysts estimated, up from 6.3 percent after a 4.5 billion pounds fundraising in July. It will lift its overall tier 1 ratio to above 11 percent from July’s 9.1 percent.

Barclays has lost billions of pounds from credit-related asset writedowns and is faced with a sharply slowing UK housing market and economy, but it has fared better than many rivals.

It has raised funds from investors in China, Singapore and Japan as well as Qatar.

The bank expects to gain a competitive advantage by raising capital privately, while RBS and others will have the government as a major shareholder. (Reuters)

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EUROPE SHARES FALL; BARCLAYS, HSBC LEAD BANKS LOWER

Posted by Gilmour Poincaree on October 31, 2008

October 31, 2008 – Reuters

European stocks fell in midmorning trade on Friday, snapping a three-day rally, as HSBC and Barclays led banks lower, while BT Group dived after warning it would miss earnings forecasts.

At 1122 GMT, the FTSEurofirst 300 index of leading European companies was down 0.9 percent at 895.82 points after gaining 0.7 percent in the previous session. The index is down nearly 16 percent in October, on course for its worst month on record.

Barclays slumped 9.1 percent after the British bank said it is raising $12.1 billion from investors from Qatar, Abu Dhabi and elsewhere to allow it to avoid taking UK government rescue cash, while HSBC sank 7.3 percent after Goldman Sachs downgraded the stock to “sell” from “neutral”.

“The road ahead still looks long and steep. A relatively deep global recession could require further capital raising, with banks on this occasion going into a downturn in relatively poor shape,” said Keith Bowman, equity analyst at Hargreaves Lansdown in London.

“For now, market consensus opinion denotes a weak hold.”

Japan’s Nikkei average closed 5 percent lower despite the Bank of Japan trimming its key interest rate to 0.3 percent from a decade-high 0.5 percent.

BT DIVES

The telecoms sector was another standout loser, led by Britain’s BT, which plunged 24 percent after the company said it would miss earnings forecasts for its second quarter due to a poor performance at its Global Services unit.

Within the sector, Cable & Wireless slipped 2.8 percent and France Telecom lost 2.6 percent.

Weaker crude prices hurt the oil and gas sector, with Total easing 0.9 percent and Royal Dutch Shell dipping 0.6 percent.

Auto shares were once again propped up by Volkswagen, which bucked the downward trend, adding 7.6 percent.

Renault, however, fell 5 percent, making it the biggest loser in the European autos sector, after its 44 percent subsidiary Nissan Motor Co said it was undecided on its dividend payout after a near 48 percent fall in first-half operating profit.

Drugmakers were in demand for their defensive quality, with GlaxoSmithKline adding 2.9 percent, Roche up 3.7 percent and Novartis putting on 1.1 percent.

Also on the upside, German chemicals group BASF advanced 4.9 percent.

The FTSEurofirst 300 has fallen more than 40 percent in 2008, battered by the global credit crisis and the resulting economic slowdown. Across Europe, Britain’s FTSE 100 dropped 1.8 percent, France’s CAC-40 lost 1.9 percent and Germany’s DAX was down 0.2 percent.

Investors will keep an eye on a slew of U.S. economic data later in the day, including the Reuters/University of Michigan consumer sentiment survey, a key gauge of consumer inflation and the Chicago PMI survey which tracks Midwest business activity.

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RATE CUT FROM JAPAN, BARCLAYS SEEKS FUNDING

Posted by Gilmour Poincaree on October 31, 2008

October 31, 2008 – Reuters

Japan cut interest rates for the first time in seven years on Friday, expecting severe stress in the global economy to persist, while UK banking giant Barclays said it was raising $12 billion in capital.

Interbank lending rates fell sharply, suggesting that the moves taken by central banks and others to remove blockages in the credit system were working to some extent.

The Bank of Japan’s move followed a rate cut from the U.S. Federal Reserve earlier in the week and likely presaged the same from the European Central Bank and Bank of England next week.

Inflation in the euro zone fell to 3.2 percent year-on-year in October, the European Union’s statistics office said, data likely to ease any concerns at the ECB about rising prices.

Policymakers have been struggling to find the right response to a rapid global slowdown that has hammered corporate profits and sparked a record freefall in stock markets in October.

Fallout from the crunch continued to spread on Friday with Barclays Plc saying it planned to raise 7.3 billion pounds ($12.06 billion) in additional capital from outside investors including Gulf states Qatar and Abu Dhabi.

Earlier this month, Barclays said it wanted to raise capital but would raise it privately rather than take UK government cash, as rivals Royal Bank of Scotland, Lloyds and HBOS are.

“There has been a significant shift in the availability of capital and economic power in the world over the last five years and we’re ensuring we’re aligned with those changes,” said John Varley, Barclays’ chief executive.

Mizuho Financial Group became the second major Japanese bank this week to cut its full-year net profit forecast by more than half because of bad loans and losses in its equity portfolio.

The global downturn has come hard on the heels of the credit crunch, the worst financial crisis since the Great Depression, with investors facing what Japanese Prime Minister Tara Aso called “a harsh storm seen only once in 100 years”.

There were mixed signs about the credit crunch. Interbank rates — the cost banks charge to lend to each other — fell.

But at the ECB, overnight deposits from banks soared to a new record, suggesting banks still preferred to deposit money with the central bank than lend to each other.

Equity markets fell again, with Japan’s Nikkei closing down 5 percent on disappointment at the size of the interest rate cut.

European shares were off 0.9 percent and Wall Street looked set for a similarly weak start.

RATE CUTS

The Bank of Japan cut its benchmark overnight call rate to 0.30 percent from 0.50 percent, a slightly smaller reduction that the quarter point many had expected.

A 4-4 vote on the policy board meant the central bank governor had to cast the deciding vote.

“At a time of extreme financial uncertainty and volatility, to have a policy board so evenly split is hardly reassuring,” said Glenn Maguire, Asia Pacific chief economist with Societe Generale in Hong Kong. “Whatever the desired outcome, the fact that the board was so evenly split jeopardises that outcome.”

The rate reduction was the latest in a series globally as central banks move rapidly to try to cushion growth now that interbank lending rates have started falling.

The average benchmark interest rate in the Group of Seven countries has dropped to 2.36 percent, the lowest since April 2005, from 4 percent in August 2007 when credit markets began imploding because of mounting subprime mortgage defaults.

Economists widely expected Australia, Britain and the euro zone to cut rates next week.

CONTRACTION

The economies of Britain, Europe, Japan and the United States are contracting. The latest growth data showed the U.S. economy shrank in the third quarter, three months that included the dismantling of the Wall Street investment bank model.

After Thursday’s data showed the U.S. economy shrank at a 0.3 percent annual rate in the third quarter, investors will look to consumption and inflation data later for more evidence of decline.

Companies are also being to feel the pain.

A deal to merge General Motors Corp and Chrysler LLC has hit an impasse after the Bush administration ruled out funding for it, according to Reuters sources.

The car giants are seeking to merge as they struggle with the economic slump.

In Japan, Nissan Motor and Suzuki Motor issued profit warnings.

Along with central banks, governments around the world were waging an all-out battle to contain the fallout from the financial crisis, including by cutting taxes, taking equity stakes in banks and backing bank deposits.

The South Korean government is considering $7.3 billion in additional spending to support domestic demand, according to a local business paper, as the worst fears appeared to have dissipated about a meltdown in Asia’s fourth-largest economy.

On Thursday, Japan also unveiled a $50 billion economic stimulus package and German cabinet minister Michael Glos said Europe’s largest economy planned to introduce a range of steps worth up to $39 billion.

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DESRESPEITOSA INVASÃO DE MINHA PRIVACIDADE (Brasil)

Posted by Gilmour Poincaree on October 31, 2008

30 de Outubro de 2008

por Zé Dirceu

Em artigo com o título “O Rio resgatou o direito de sonhar” publicado no Jornal do Brasil na 2ª feira (20.10) e na Gazeta Mercantil na 4ª feira (22.10), o jornalista Augusto Nunes abandona a sempre sóbria, providencial e oportuna argumentação política e desfecha uma série de ataques pessoais contra mim. Vai mais longe: invade a privacidade de família e atinge, também, a intimidade de minha ex-mulher, Clara Becker, com quem tenho um filho, Zeca Dirceu, hoje prefeito de Cruzeiro do Oeste (PR).

O artigo – o título já não deixa dúvidas – é um aberto e inconteste manifesto de engajamento do jornalista em defesa do deputado Fernando Gabeira, seu candidato e do PV-PSDB a prefeito do Rio no 2º turno da eleição desse ano. Até aí, nada demais, eu mesmo reconheci, já de público, e por mais de uma oportunidade, o direito do articulista e de quaisquer outras pessoas de optarem por um candidato e o defenderem, engajados em sua campanha, inclusive.

Mas no texto, o autor extravasa toda a sua revolta por eu ter contestado, em e-mails publicados nas seções de cartas do Jornal do Brasil e da Gazeta Mercantil, versão publicada por ele e por outros sobre encontro meu com o deputado Gabeira, ocorrido há já longínquos 5 anos.

Contestei porque a versão publicada é distorcida em tudo sobre essa reunião – seus motivos, quem participou, como ela se deu etc. O jornalista se irritou por eu ter reposto a verdade dos fatos e os dois jornais terem publicado os meus esclarecimentos.

Não vejo razão para isso porque em todas as minhas manifestações a respeito, inclusive nessa carta em que corrijo a versão difundida, eu tenho destacado que a ex-ministra do Meio Ambiente, senadora Marina Silva (PT-AC), e o ex-presidente nacional do PT, deputado José Genoino, testemunharam e podem ser ouvidos sobre o que ocorreu naquela ocasião. Augusto Nunes preferiu não ouvi-los.

Ao invés de fazê-lo, não só ele, mas toda a mídia, têm, sistematicamente, insistido na divulgação da versão errada do fato. No entanto, mais grave que a série de ataques pessoais desfechada contra mim no artigo publicado no Jornal do Brasil e na Gazeta Mercantil, é a invasão da privacidade da senhora Clara Becker.

Até porque ela é uma cidadã que não se envolve, e jamais se envolveu em sua vida, em questões públicas. “Não sou militante política e nunca fui”, é uma definição dela em carta que escreveu em outubro do ano passado a um autor de novelas da Rede Globo que anunciou ter criado um personagem (de novela) inspirado em mim e no meu casamento com Clara Becker.

Não é minha intenção entrar em reminiscências e tratar nesse artigo que escrevo do fim do meu relacionamento com Clara Becker, porque estaria incursionando em seara familiar. Mas o próprio autor do artigo o fez no seu texto ao registrar que eu teria me levantado de uma mesa e partido, encerrado meu casamento com uma sintética frase: “Volto já”.

Declinou, assim, um assunto que nem deveria ter entrado no texto, mas que entrou de forma distorcida. É Clara que, com sua carta, de novo repõe os fatos nos seus devidos lugares: “(…) Não fui abandonada por José Dirceu. Com a anistia, ele pediu que eu e meu filho fossemos com ele para São Paulo. Chegamos a viver algum tempo juntos na capital paulista, mas eu tinha aqui em Cruzeiro do Oeste uma família que dependia de mim (pai, mãe, duas irmãs e meu filho) e a vida em São Paulo era muito dura. Eu tomei a iniciativa de voltar para Cruzeiro do Oeste”.

Clara, aliás, conforme registra nessa sua carta, supunha estar sendo obrigada a tratar do assunto publicamente uma única vez: “Pela primeira e última vez, quero falar sobre detalhes de minha vida com José Dirceu, expondo minha intimidade em público, à minha revelia. É que não suporto mais ver repetidas as mentiras, as distorções, as agressões relativas a algo sobre o qual somente eu e ele podemos dizer, com clareza, o que aconteceu.”

Encerro nesse ponto rememorações e contestações de natureza familiar e pessoal. Assuntos privativos da intimidade das pessoas podem até ser mais contundentes num processo desses, mas em 40 anos de vida pública, jamais incursionei nesse campo e não seria agora que começaria a fazê-lo. Todos nós sabemos que uma polêmica travada nos níveis pessoal e familiar pode até se mostrar mais apaixonante para o público, mas pode ser facilmente reduzida a pó na medida em que descamba para o desrespeito e o irracional.

(Gazeta Mercantil/Caderno A – Pág. 6)

(José Dirceu – Ex-ministro chefe da Casa Civil)

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HEDGE FUND MARKET ABUSE CONTROLS RAISE CONCERN-FSA (UK)

Posted by Gilmour Poincaree on October 31, 2008

October 31, 2008 – Reuters

Hedge funds are relying too heavily on their open-plan office arrangements to overhear and prevent illegal trading activities, Britain’s financial watchdog has warned.

Following its latest programme of visits to assess UK-based hedge funds’ controls for monitoring staff trading activity and preventing market abuse, the Financial Services Authority said there is “scope for improvement”.

In its Market Watch newsletter for October, the regulator said: “Of particular concern was an over reliance on an open-plan office setting for overhearing suspicious activity and a reliance on counterparties or other staff to detect irregular trading behaviour.”

“There was little monitoring of potential manipulation around valuation dates, and insufficient review of ‘day trades’ around announcements, with management concentrating on monitoring end of day positions,” it added.

Hedge funds are regarded with suspicion in some quarters due to the opacity of their trading strategies. Some have blamed the industry for exacerbating the market volatility during the credit crisis as hedge funds sought to make a profit while stocks fell.

SHORTING BAN

In March this year they were accused of spreading rumours about HBOS in order to profit from short-selling shares in the mortgage lender. As similar rumours surfaced again last month, the FSA led a global move to ban short-selling on financial companies.

In its newsletter, published late Thursday, the regulator also raised concern that the use of long-term remuneration structures has led to an “overly sanguine” attitude towards market abuse risk among hedge funds.

Firms believe that by rewarding managers for long-term performance they remove the incentive to engage in market abuse in order to pursue short-term gains.

However, the regulator said that although this can mitigate the risk, managers concerned about losing their job due to underperformance would still have an incentive to focus on short-term returns.

The regulator said the use of “reason for trading” records was a good initiative especially as the size of many hedge funds argues against sophisticated detection systems and places greater reliance on management information and compliance overview.

The FSA said its observations will inform future risk assessments as it continues to monitor the issue.

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U.S. BANKS OWE BILLIONS IN PAY, PENSIONS TO EXECUTIVES: REPORT (USA)

Posted by Gilmour Poincaree on October 31, 2008

October 31, 2008 – Reuters

Troubled financial giants getting cash infusions from the U.S. Federal Reserve owe their executives more than $40 billion for past year’s pay and pensions as of the end of 2007, the Wall Street Journal said in an analysis.

The sums owed are mostly for special executive pensions and deferred compensation, including bonuses, for prior years, said the paper.

The Journal also cited investment banks Goldman Sachs Group Inc, which owes its executives $11.8 billion; JPMorgan Chase & Co, which has a payment of $8.5 billion pending; and Morgan Stanley, which owes between $10 billion and $12 billion to executives.

Criticism of executive pay has gained momentum this election year with presidential candidates from both major parties lashing out over rich payouts for CEOs of companies that have suffered big losses in the U.S. housing market bust and ensuing credit crisis.

As a result, the government has sought to rein in executive pay at banks getting federal money as part of the Bush administration’s $700 billion bailout program.

But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces, the Journal said.

For instance, nine banks paid out an estimated $50 billion of bonuses in 2007, based on the total compensation expense for the companies and assuming that for investment banks about 60 percent of total compensation was allocated for bonuses, and for commercial banks about 20 percent went to bonuses.

Goldman Sachs, Morgan Stanley and JP Morgan Chase did not immediately return calls seeking comment.

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WE HAVE THE WAY – WE ONLY NEED THE WILL (Cyprus)

Posted by Gilmour Poincaree on October 31, 2008

Friday, October 31, 2008

WORLD leaders have shown impressive and unprecedented determination and co-ordination to battle the global financial crisis. Within the space of a few weeks, the purse strings have opened to release staggering amounts of money, so dizzyingly large that few of us can even begin to comprehend them.

Political and financial leaders have criss-crossed the globe to co-ordinate their response, slashing interest rates and pouring liquidity into the system to stem the loss of confidence created by this first true crisis of the globalised era.

They have shown that where there is a will (and where there is a very present threat), there is a way. It does not always work – confidence is by definition irrational – but it is not for want of trying.

How depressing then that when it comes to a far greater looming threat to our current way of life, our leaders are unable to react, paralysed by short-term vested interests and capable of little more than pious declarations of intent.

A report this week warned that humans were heading headlong into an ‘ecological credit crunch’ whose impact would dwarf that of the current financial crisis, with demands on natural resources outstripping what the Earth can sustain by almost a third. If current trends continued, leading environmental groups warned, by 2030 we would need two planets to maintain our lifestyles.

Yet not only is no government willing to unlock the hundreds of billions of dollars injected into financial systems around the world this past month, in order to cut emissions and develop new sustainable technologies, but the immediate impact of the mounting economic recession is likely to put on the back burner desperately needed investments into clean energies and the introduction of deterrent carbon taxes.

Yet the alarm bells are ringing furiously. We here in Cyprus are feeling the direct effect of global warming through rising temperatures and dramatic water shortages and yet still, neither government nor public are willing to do anything to tackle emissions. And we are not unusual: melting ice caps and increasingly unpredictable weather patterns (much of northern Europe was blanketed in snow this week… in October) are there constantly to remind everyone, yet governments have repeatedly failed to agree emission targets and have dragged their feet in spending on renewables, seeking instead ways to cushion the impact of oil prices on consumers (read: voters).

When the ecological credit crunch really bites, it will be too late to spend our way out of trouble – these are long term problems that we have delayed in addressing. We need to act now to limit the impact of trends that are already irreversible, showing the same commitment, determination and co-ordination that governments have shown in battling the financial crisis.

Copyright © Cyprus Mail 2008

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WHY BARACK OBAMA?

Posted by Gilmour Poincaree on October 31, 2008

Friday, October 31, 2008

by Richard Holbrooke *

THE WINNER of America’s presidential election will inherit a perfect storm of problems, both economic and international.

He will face the most difficult opening-day agenda of any president since – and I say this in all seriousness – the man who saved the Union, Abraham Lincoln. But a more instructive precedent is 1933, when Franklin Roosevelt offered inspiring rhetoric and “bold experimentation” to a nation facing economic meltdown and a breakdown in public confidence.

For me, the choice is simple – and not only because I am, by temperament and history, a Democrat. The long and intense political campaign has revealed huge differences in the two candidates’ positions, style, and personal qualities. And the conclusion seems clear.

Judgment: John McCain has shown throughout his career a penchant for risk-taking; in his memoirs, he proudly calls himself a gambler. His selection of Sarah Palin, a charismatic but spectacularly unqualified candidate, as his running mate, is just the most glaring of many examples of the real McCain. His bravery in combat attests to his patriotism, courage, and toughness, but his judgment has been found sorely lacking time and time again over his career.

Barack Obama is tough, too, but in a different way. No one should underestimate how difficult it was to travel his road, against incredible odds, to the cusp of the presidency. But where McCain is impulsive and emotional, Obama is low-key and unemotional. He makes his judgments in a calm and methodical manner; McCain’s impulsiveness is anathema to Obama, and rightly so – one cannot play craps with history. Having seen so many political leaders falter under pressure, I prize this ability above most others. And Barack Obama has it.

The economy: The first priority of the new president will be the economy and the financial crisis. Since the crisis hit, Obama has been calm and, indeed, presidential. He consulted the best advisory team in the nation, weighed each course of action carefully, and then issued a series of precise, calm statements. Meanwhile, McCain has veered bizarrely, issuing contradictory statements, “suspending” his campaign (while continuing to campaign), and urging that the first debate be cancelled (when it was all the more needed). Advantage Obama.

Foreign policy: The most explicit disagreements between the candidates are over Iraq, Iran, and Russia. But there are deeper differences. McCain’s positions, with the notable exception of climate change, suggest that he would simply try to carry out George W. Bush’s policies more effectively. Obama offers a different approach to foreign policy.

By starting to draw down combat troops in Iraq, Obama would change the image and policies of America immediately. By engaging Iran in talks that would cover not only the nuclear issue but other aspects of Iran’s destabilising role in the region, he would either reach agreements that lowered the dangers from Iran, or he would mobilise a stronger international coalition to isolate Iran. Either way, engaging Iran is the right policy, and it is hard to understand why Bush and McCain have continued to hold out against such an obvious change of course, which, if carried out with firmness, will not compromise American or Israeli national security.

On Russia since its invasion of Georgia, Obama and his running mate, Joe Biden (who was the first member of Congress to visit Georgia after the invasion), emphasise helping Georgia rebuild its economy and maintain its independence in the face of a continuing Russian campaign against it. McCain, on the other hand, wants to punish Russia by such actions as expelling it from the G8.

Such measures may ultimately be necessary, but they will not help Georgia survive as an independent democracy. Moreover, even after the outrage in Georgia, there are issues of common interest – such as energy, climate change, and Iran – on which the West and the Kremlin must cooperate. This was true even during the Cold War, and remains true today, yet McCain seems not to recognise it.

Leadership: In the end, all presidential elections come down to the intangibles of leadership. The vote for a president is a sort of private contract directly between each voter and his or her preferred choice. Who do you want to see on your television screen for the next four years? To whom do you wish to entrust the nation’s fate?

Here again, the contrasting styles of Obama and McCain offer a clear choice between a calm and confident man and a highly emotional one, between a major change in the nation’s direction and a minor one, between a conciliatory style and a more combative one.

Effectiveness: Finally, in a year in which the Democrats are certain to increase their majority in both houses of Congress, an Obama victory would offer the Democrats control of both the legislative and executive branches for the first time since 1994, and with it the possibility of legislative achievement after years of stalemate. After so many years of polarisation at home and unilateralism abroad, the choice for president seems clear.

* Richard Holbrooke is a former US ambassador to the United Nations and the chief architect of the 1995 Dayton Peace Agreement that ended the war in Bosnia.

© Project Syndicate, 2008

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CYPRIOTS VIEW RENEWED EFFORTS TO REACH AN AGREEMENT WITH CAUTION

Posted by Gilmour Poincaree on October 31, 2008

Friday, October 31, 2008

by Jean Christou

ONLY 18 per cent of Greek Cypriots and 13 per cent of Turkish Cypriots are hopeful for a Cyprus solution through the current peace process, a study by the Centre for European Policy Studies said yesterday.

The Brussels-based organisation worked with analysts Alexandros Lordos, Erol Kaymak and Nathalie Tocci to compile the 90-page report, which was presented yesterday.

“Beyond their perceptions and (mis)trust of each other, both communities are pessimistic regarding the peace process,” said the report.

This pessimism is particularly acute amongst Turkish Cypriots, who following the Annan Plan precedent have little faith in the peace process and Greek Cypriot willingness to deliver a compromise solution. Greek Cypriots, emboldened by their new president, appear somewhat more hopeful of the ongoing negotiations.”

It said that after decades of failed negotiations and the ultimate failure of the Annan Plan, Cypriots viewed renewed efforts to reach an agreement with some caution.

Lack of trust was a major factor according to the findings.

Two out of three Greek Cypriots, “possibly influenced by their long-standing political narrative that ‘our problem is not with the Turkish Cypriots but with Turkey’, say they trust ordinary Turkish Cypriots, while 99 per cent do not trust the Turkish Cypriot leadership nor Turkey.

However nearly three out of four Turkish Cypriots say they mistrust Greek Cypriots, and 74 per cent say they mistrusted President Demetris Christofias and political party leaders.

Still, while differences are large Cypriots were open to compromise, ready to revisit their official historical narratives and abhor a resort to violence, the report said.

“This sets Cyprus apart from other conflicts in the European neighbourhood,” it added.

“Cypriots are not fundamentally hostile towards each other and both communities have reached a level of political maturity necessary to re-evaluate their conflict-ridden pasts.”

It said 85 per cent off Greek Cypriots and 50 per cent of Turkish Cypriots were able to acknowledge the mistakes committed by their own community in the conflict.

Nearly 90 per cent on each side are “absolutely opposed to the idea of ‘solving’ the conflict through armed struggle”.

Only 15 per cent on the Greek Cypriot side say they are satisfied with the status quo, and even fewer Turkish Cypriots, less than ten per cent.

“A possible explanation of these differences may be that whereas 51 per cent of Greek Cypriots are on the whole satisfied with their personal lives, only 29 per cent of Turkish Cypriots are, not least because they are more directly affected by the consequences of the conflict,” said the report, adding that they blamed Greek Cypriots and the EU for their current situation due to the ban on direct flights to the north, and the lack of direct trade for the ‘TRNC’.

“It is of paramount importance for these issues to be debated openly and creatively in the south and for political and official actors to diffuse and repackage the divisive and polarising language used to discuss these issues in recent years,” said the report.

On the positive side, large majorities of each community view themselves as being both Greek Cypriot and Turkish Cypriot rather than merely Greek or Turkish.

“In other words, Greek and Turkish Cypriots tend not to identify themselves as Greeks or Turks exclusively, and both communities share an affinity to Cyprus,” the report said.

It suggests a number of confidence building measures to run parallel to the new negotiating process “to engender public confidence” and to ensure that when an agreement is reached, Cypriots will go along with it.

A list of ‘easily-agreed measures’ could include jointly fighting organised crime, joint participation in international sporting events, joint protection of cultural heritage, supporting Turkish-Cypriot-EU harmonisation and renovating and making joint use of buildings in the Green Line.

Other confidence-building steps could be taken to facilitate negotiations on the more contested issues such as conducting an analysis of threats and threat perceptions and producing an economic development plan for post-settlement.

These fact-finding activities would both increase public confidence in the peace process – which will be viewed as a result of such efforts as more participatory, inclusive and grounded on the needs of the people – and at the same time may help bridge the gaps dividing the two communities on some of the most contested dossiers of the conflict settlement agenda,” said the CEPS report.

It also listed a number of more contentious proposals such as including the north in the EU customs union and including Turkish Cypriot higher education institutions in the European higher education system, direct trade and direct flights, and the resolution of the Varosha issue.

Copyright © Cyprus Mail 2008

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Posted in CYPRUS, EUROPE, GREECE, INTERNATIONAL, WARS AND ARMED CONFLICTS | Leave a Comment »

IRAN CUTS OIL PRODUCTION AS PRICES CONTINUE PLUMMETING

Posted by Gilmour Poincaree on October 31, 2008

date: 31 10, 2008

TEHRAN, OCT. 31 (BNA) — IRANS OIL MINISTER GHULAM HOSSEIN SAID, IN LINE WITH A RECENT DECISION TAKEN BY THE ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES (OPEC) TO REDUCE OIL SUPPLY, IRAN WILL START CUTTING 199000 BARRELS A DAY OF ITS OIL PRODUCTION AS OF TOMORROW, NOVEMBER 1, 2008.

IN ADDITION, TEHRAN, IN ITS CAPACITY AS MEMBER OF THE OPEC OIL PRICES CONTROL COMMITTEE, WILL MONITOR OPECS MEMBER-STATES COMMITMENT TO THEIR STAKES, THE MINISTER ADDED. REGARDING A PROPOSAL BY OPEC SECRETARY GENERAL TO HOLD AN EMERGENCY MEETING BEFORE DECEMBER GATHERING, THE MINISTER SAID SUCH PROPOSAL WOULD BE PUT IN EFFECT IN CASE PRICES CONTINUE SLIDING.

MTQ 31-OCT-2008 16:10

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Posted in ASIA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INTERNATIONAL, IRAN, OPEC, PETROL | Leave a Comment »

GADHAFI VISITS MOSCOW TODAY

Posted by Gilmour Poincaree on October 31, 2008

GADHAFI VISITS MOSCOW TODAY

date: 31 10, 2008

MOSCOW, OCT 31 (BNA) THE LIBYAN LEADER MOAMMAR GADHAFI IS SET TO ARRIVE IN RUSSIA FOR Mu'ammer Muhammad al QaddafiTALKS EXPECTED TO FOCUS ON BOOSTING ENERGY TIES AND THE ARMS TRADE BETWEEN THE TWO COLD WAR ALLIES REVEALED AP TODAY.

THE KREMLIN SAYS GADHAFI WILL ARRIVE ON A THREE-DAY VISIT TODAY.

RUSSIA HAS MOVED EARLIER THIS YEAR TO BOLSTER RELATIONS WITH LIBYA, AGREEING TO WRITE OFF 4.5 BILLION IN LIBYA’S DEBT FOR SOVIET-ERA ARMS SUPPLIES IN EXCHANGE FOR LUCRATIVE BUSINESS DEALS.

VLADIMIR PUTIN VISITED LIBYA IN APRIL WHEN HE WAS STILL RUSSIAS PRESIDENT.

PUTIN, NOW PRIME MINISTER, PRESIDED OVER THE SIGNING OF A 2.2 BILLION EURO CONTRACT FOR STATE-OWNED RUSSIAN RAILWAYS IN LIBYA.

RUSSIAS STATE GAS MONOPOLY GAZPROM HAS ALSO STRUCK A DEAL TO DEVELOP SIX OIL AND GAS FIELDS IN LIBYA.

HS/ 31-OCT-2008 12:26

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Posted in COMMERCE, COMMODITIES MARKET, COMMONWEALTH OF INDEPENDENT STATES, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, INDUSTRIAL PRODUCTION, INTERNATIONAL RELATIONS, LYBIA, MILITARY CONTRACTS, NATURAL GAS, PETROL, RUSSIA, THE ARMS INDUSTRY, THE FLOW OF INVESTMENTS | Leave a Comment »

CRISE GERA INCERTEZA PARA O MERCADO DE TRABALHO (Brasil)

Posted by Gilmour Poincaree on October 31, 2008

30/10/2008

A insegurança que paralisa os mercados financeiros e concentra a liquidez dos recursos no sistema bancário nacional nas grandes instituições do setor está provocando um cenário totalmente incerto para as perspectivas do mercado de trabalho nas principais regiões metropolitanas do País para os próximos meses. Os economistas responsáveis pela Pesquisa de Emprego e Desemprego (PED) realizada pela Fundação Seade em convênio com o Dieese ponderam, contudo, que há uma tendência dos resultados de outubro ainda registrarem uma pequena melhora na redução do patamar de desocupados e até de aumento de renda média dos trabalhadores em São Paulo, Belo Horizonte, Porto Alegre, Recife, Salvador e Distrito Federal.

“Os resultados relativos a este mês ainda podem acompanhar o quadro favorável de expansão da economia nacional. Mas daí em diante é bem provável que já registraremos os efeitos da crise global sobre o nível de atividade no País, o que certamente deve afetar o patamar de geração de empregos e de renda”, comentou Clemente Ganz Lúcio, diretor-técnico do Dieese.

O coordenador de análise da PED da Fundação Seade, Alexandre Loloian, destacou que o fator que causa grande apreensão e dificuldades para avaliar os rumos do mercado de trabalho nas seis regiões metropolitanas para um curto horizonte de tempo, inferior a seis meses, é que houve uma brusca queda da concessão de crédito na economia. Em setembro, o desemprego na região metropolitana de São Paulo atingiu 13,5%, a menor taxa para o mês desde 1996. Para as seis regiões metropolitanas a taxa chegou a 14,1%, abaixo dos 14,5% registrados em agosto.

“Qual cenário é possível traçar quando não se sabe quando o crédito será restabelecido?”, comentou Loloian. Segundo ele, é compreensível que os empresários fiquem mais cuidadosos para expandir suas fábricas, pois não há condições razoáveis de financiamento disponíveis no mercado, dado que boa parte dos recursos em poder dos bancos está aplicada cautelosamente em títulos públicos, aguardando um momento mais claro da conjuntura. “A verdade é que ninguém sabe, hoje, para onde vai a crise. Ela pode começar a perder força, mas se piorar o que poderá ocorrer?”, questiona Clemente Ganz Lúcio, diretor-técnico do Dieese.

Ele ressaltou que é possível que em abril comece a ficar mais evidente a magnitude dos impactos da crise financeira sobre os empregos e rendimentos dos ocupados no Brasil. Segundo ele, é no começo do segundo trimestre que sazonalmente pode ser delineada a tendência do mercado de trabalho para o ano, pois já teriam passado as férias de verão e o carnaval. “Contudo, se já registrarmos no próximo mês efeitos expressivos sobre a capacidade do País de criar postos de trabalho, surgir uma redução da massa real dos salários e diminuição do consumo das famílias, é porque a situação é mais grave do que imaginamos”, opinou.

Fonte: Agência Estado

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PUBLISHED BY ‘PORTAL DO CONSUMIDOR’ (Brasil)

Posted in BRASIL, ECONOMIA - BRASIL, O MERCADO DE TRABALHO - BRASIL | Leave a Comment »

ALUNOS BENEFICIADOS PELO BOLSA FAMÍLIA MANTÊM ALTOS ÍNDICES DE PRESENÇA NA ESCOLA (Brasil)

Posted by Gilmour Poincaree on October 31, 2008

28/10/2008

O governo federal monitorou a freqüência escolar de 14,3 milhões de alunos beneficiados pelo Bolsa Família, em junho. Do universo de 13 milhões de crianças e adolescentes dos seis aos 15 anos, com informação registrada no sistema do Ministério da educação, 98,2% cumpriram a exigência de presença a pelo menos 85% das aulas. Os adolescentes de 16 e 17 anos acompanhados também estão com altos índices de atendimento à contrapartida: 97,3% foram à escola em junho.

Os resultados do bimestre de junho e julho mostram que a grande maioria dos alunos cumpre a contrapartida do programa de transferência de renda executado pelo Ministério do Desenvolvimento Social e Combate à Fome (MDS). Mesmo durante o período da eleição municipal, os índices de monitoramento da freqüência escolar foram mantidos nos mesmos níveis do bimestre anterior.

O município de São Paulo e o Distrito Federal superaram a média nacional, registrando informações de 91% do total de alunos beneficiados. O MDS e o Ministério da Educação vão continuar trabalhando em parceria com Estados e municípios para ampliar ainda mais o número de crianças e adolescentes com informação de freqüência no próximo período de acompanhamento. Os técnicos municipais têm até dia 10 de novembro para registrar as informações de presença às aulas nos meses de agosto e setembro.

Os altos percentuais de comparecimento às aulas indicam que o Bolsa Família está cumprindo um dos seus objetivos, que é contribuir para aumentar o nível educacional dos filhos dos beneficiários, para que eles tenham maiores oportunidades no futuro e, assim, quebrar o ciclo de pobreza entre as gerações. Por esse motivo, o programa brasileiro alia transferência de renda às famílias pobres às contrapartidas nas áreas de educação e de saúde. Além da freqüência à escola, os beneficiários precisam manter em dia a agenda de saúde de crianças de até seis anos, como também a realização do pré-natal.

O descumprimento das contrapartidas por cinco períodos consecutivos leva ao cancelamento do benefício. Para evitar que isso ocorra, o município precisa ficar atento às famílias que não cumprem as condicionalidades. O Programa Bolsa Família transfere mensalmente mais de R$ 900 milhões para 11 milhões de famílias com renda per capita de até R$ 120,00.

Assessoria de Comunicação – MDS

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Posted in BRASIL, CIDADANIA, COMBATE À DESIGUALDADE E À EXCLUSÃO - BRASIL, EDUCAÇÃO - BRASIL, MINISTÉRIO DA EDUCAÇÃO, MINISTÉRIO DO DESENVOLVIMENTO SOCIAL E COMBATE À FOME, O PODER EXECUTIVO FEDERAL | Leave a Comment »

PROGRAMA BENEFICIA UM MILHÃO DE PESSOAS EM SALVADOR (BRASIL)

Posted by Gilmour Poincaree on October 31, 2008

28 de Outubro de 2008

Parceria entre os setores público e privado contribuirá para a despoluição da Baía de Todos os Santos, em Salvador (BA). A iniciativa conta com financiamento de R$ 173,8 milhões do governo federal, por meio do programa Saneamento para Todos, e vai beneficiar 1,1 milhão de pessoas. Nesta terça-feira (28), o presidente Luiz Inácio Lula da Silva e o ministro das Cidades, Marcio Fortes, participaram da cerimônia de assinatura de contrato para a construção do Sistema de Disposição Oceânica do Jaguaribe, na capital baiana. A Parceria Público-Privada (PPP) envolve a Jaguaribe Construção S.A., a Caixa Econômica Federal e o Ministério das Cidades, que financiará as obras com recursos do FGTS.

O Sistema de Disposição Oceânica do Jaguaribe faz parte do projeto de despoluição da Baía de Todos os Santos, que prevê investimento de mais R$ 349,6 milhões – entre recursos do Orçamento Geral da União e de financiamentos federais – em obras em 12 municípios da região. O projeto prevê a adaptação da Estação Elevatória do Saboeiro (localizada nas intermediações da Estação de Tratamento de Água de Bolandeira), que reverte os esgotos do subsistema de Jaguaribe para o de Camarogibe, tendo como destino final o emissário do Rio Vermelho.

Será construída, ainda, uma nova linha de recalque com extensão de 1,1 quilômetro e de uma estação de condicionamento prévio, que vai tratar os esgotos de parte do sistema de Salvador e de Lauro de Freitas para lançar no mar o efluente, livre de sólidos e partículas em suspensão, através do emissário submarino da Boca do Rio. O emissário terá 5,1 quilômetros de extensão. O emissário terrestre, com 1,5 quilômetro de extensão, será implantado ao longo da avenida Jorge Amado através de túneis, para evitar transtornos aos moradores e comerciantes locais.

Dos 3,6 quilômetros de emissário submarino, 400 metros serão subterrâneos, na área próxima à praia. O restante será assentado no fundo do mar e fixado por peças de concreto para que a tubulação não se desloque. Difusores, instalados no final desta tubulação, dispersarão o esgoto processado a uma profundidade de 45 metros, sem dano ambiental para o ecossistema marinho e a balneabilidade da praia da Boca do Rio.

Editado pela Secretaria de Comunicação Social da Presidência da República
Nº 718 – Brasília

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Posted in A PRESIDÊNCIA, BA, BRASIL, DEFESA DO MEIO AMBIENTE - BRASIL, LUIS INÁCIO LULA DA SILVA, MINISTÉRIO DAS CIDADES, O PODER EXECUTIVO ESTADUAL, O PODER EXECUTIVO FEDERAL, O PODER EXECUTIVO MUNICIPAL, OS GOVERNADORES, OS PREFEITOS, POLÍTICA REGIONAL | Leave a Comment »

BENEFÍCIO PREVIDENCIÁRIO RETIRA 22 MILHÕES DA POBREZA (Brasil)

Posted by Gilmour Poincaree on October 31, 2008

28 de Outubro de 2008

O pagamento de benefícios da Previdência Social impede que 22,2 milhões de brasileiros, de todas as faixas etárias, fiquem abaixo da linha da pobreza. Essa distribuição de renda também evita que o percentual de idosos pobres, na faixa dos 80 anos, atinja a 60% deles, ou, no caso de brasileiros acima de 50 anos, 40% destes.

A importância da proteção previdenciária para os mais pobres, especialmente os idosos, foi revelada por estudo da Secretaria de Políticas de Previdência Social com os dados da PNAD 2007 – a Pesquisa Nacional por Amostra de Domicílios.

Segundo o estudo, se não houvesse pagamento de benefícios previdenciários ou assistenciais, 42,4% da população, ou 79 milhões de pessoas, estariam abaixo da linha da pobreza, independente da idade. Já com os benefícios previdenciários, o percentual cai para 30,3%, garantindo melhor renda a 56 milhões de brasileiros. É considerado abaixo da linha de pobreza quem tem renda domiciliar per capita inferior a meio salário mínimo.

Da mesma forma, a análise dos dados por faixa etária mostra que o pagamento dos benefícios garante a manutenção do percentual de idosos mais pobres abaixo de 20%, a partir dos 60 anos, e em 10%, em idades próximas dos 80 anos.

O estudo revela ainda o impacto dos benefícios da previdência social para a redução da pobreza nos estados, mostrando que a média nacional de resgate da linha de pobreza, de 12 pontos percentuais, é superada em vários pontos do País. A Paraíba apresenta a melhor taxa – 14,9% -, seguida por outros 11 estados que superam os 12%, sendo oito deles do Nordeste. O menor índice de resgate da linha da pobreza foi registrado no Amazonas, com 5,2%.

Cobertura – O estudo também revelou a quantidade de idosos que têm proteção social no Brasil. O percentual de cobertura é de 80,6%, o que representa 16 milhões de pessoas com 60 anos ou mais. No caso dos homens dessa faixa, a proteção chega a 85,6% da população, ou 7,5 milhões de pessoas. Para as mulheres idosas, o percentual de cobertura chega a 76,6%, beneficiando 8,5 milhões de brasileiras.

Na distribuição regional, 15 estados mantêm índice de cobertura maior que a média nacional de 80,6% para os idosos. O Piauí lidera com taxa de 89%, índice que resulta do impacto dos benefícios para aposentados da área rural. O mesmo ocorre no Rio Grande do Norte, segundo estado com maior taxa de proteção social – 87,7%. Os estados com terceira e quarta maiores taxas, respectivamente, são Santa Catarina (86,8%) e Rio Grande do Sul (86,5%). O estado com menor cobertura previdenciária para idosos é o Amazonas, com taxa de 57,7%.

Garantias – A Constituição de 1988 foi responsável por consolidar a Previdência Social como um sistema de direitos da cidadania baseado na solidariedade e exigindo como contrapartida um esforço de cada um dos membros da sociedade em seu financiamento. Os principais impactos na legislação decorrentes de sua promulgação foram a universalidade da cobertura e a noção de eqüidade no financiamento do sistema e na distribuição dos benefícios.

Os constituintes deram atenção especial ao tema Previdência Social. Cerca de 10% de seu conteúdo estão relacionados às normas sobre previdência. Um dos princípios básicos da Carta de 1988 é o de que a previdência solidária deve assegurar o sustento do trabalhador e de sua família quando ele não puder se manter, seja por doença, acidente, gravidez, prisão, morte ou velhice. Outra inovação foi a de tornar a Previdência Social um direito no âmbito da seguridade social junto com a saúde e a assistência.

A universalidade da cobertura permitiu trazer para o sistema milhões de trabalhadores rurais que antes tinham cobertura apenas do Funrural, um modelo assistencialista de previdência.

Editado pela Secretaria de Comunicação Social da Presidência da República
Nº 718 – Brasília

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CUBA USA TECNOLOGIA DA EMBRAPA NO CULTIVO DA SOJA (Brasil)

Posted by Gilmour Poincaree on October 31, 2008

28/10/2008

Os cubanos vão aplicar tecnologias da Empresa Brasileira de Pesquisa Agropecuária (Embrapa). A ação faz parte do projeto Cubasoy, que substitui uma área tradicional de cultivo cana-de-açúcar pelo da soja. A parceria da Agência Brasileira de Cooperação (ABC), Embrapa com os ministérios das Forças Armadas Revolucionárias e da Indústria Alimentícia de Cuba vai permitir que 20 variedades da oleaginosa entrem em fase de testes daqui 30 dias.

O projeto será testado em 2 mil hectares, na província de Ciego de Ávila, com meta de chegar a 40,5 mil hectares a longo prazo. A expectativa é obter uma produtividade média entre 1 e 3 toneladas do grão por hectares.

O governo de Cuba aposta também na capacitação do pessoal envolvido no projeto. Segundo o pesquisador, Antônio Garcia, o aprendizado nos laboratórios permitirá aos parceiros cubanos mais precisão ao lidar com a qualidade de sementes – experiência que eles não contam pois, até agora, trabalhavam apenas com cana-de-açúcar. Além disso, é necessário introduzir diferentes variedades da soja e analisar quais se adaptam melhor ao clima e solo da região de Ciego de Ávila.

Assessoria Comunicação do MAPA

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IMF OFFICIALS CONCLUDE FIRST ROUND OF TALKS TO BAIL OUT PAKISTAN

Posted by Gilmour Poincaree on October 31, 2008

Islamabad, October 30, SPA

The International Monetary Fund (IMF) on Thursday concluded the first round of technical talks in Dubai with Pakistani officials about creating a system to save the south Asian nation from economic collapse, officials said according to dpa. Pakistan’s government is facing a tightening balance of payments. Its financing gap stands at around 7 billion dollars for the current fiscal year, which ends June 30, 2009.

“There are one or two points on which both sides could not evolve consensus,” said a senior official, who was part of the returning Pakistani delegation on Thursday. The official, who refused to be named, said to dpa that the IMF was insisting on raising discount rates by 3 to 4 per cent above the existing 13 per cent, in order to curtail inflation, which currently stands at over 30 per cent.

SPA

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INTERVIEW: “ALBANIA HAS PASSED A SUCCESSFUL TRANSITION”

Posted by Gilmour Poincaree on October 31, 2008

October 29, 2008

Filed Under Economy, General News, Invest-Inform

INTERVIEW: “ALBANIA HAS PASSED A SUCCESSFUL TRANSITION”

Interview

Tirana, Oct. 29, 2008 (AENews) – IMF permanent representative in Tirana Ann-Margaret Westin commented in an interview for AENews the 17 year-long agreement with Albania. The last agreement will expire in the January of the next year.

AENews – How do you evaluate the 17 years long cooperation of the IMF with Albania?

Westin – After some 16 years of IMF programs and even more years of transition, Albania now has macroeconomic stability firmly entrenched. Growth has been stable and high, with per capita income more than doubling in the last decade, and inflation has been well contained, reflecting prudent fiscal and monetary policies. This is an achievement of the Albanian authorities, the current government as well as previous governments, and we are happy to have been partners of this successful transition.

Macroeconomic stability has also been retained under the current program, which happens to coincide with my tenure here and with the current government’s mandate. The overall public debt burden has continued to decline, from 58 percent of GDP in 2005 to a currently projected 52 percent this year; and inflation has been contained within the Bank of Albania’s 2–4 percent target range, despite external shocks in food and fuel prices.

The relationship with the Albanian authorities remains excellent and we have an open and productive dialogue. Although there can be differences of opinion, we have managed to agree on key policies and all reviews so far under the current program have been concluded on time.

AENews – Do you think that the Albanian politics has reached the necessary maturity to maintain macroeconomic stability without the need of IMF monitoring?

Westin – There are various reasons why countries might chose to have an IMF arrangement. There is the access to Fund financing. Apart from the financing, some countries have chosen to have a Fund program to maintain the close policy dialogue and to signal to the rest of the world that policies are on track. This signaling effect might be particularly important for international observers and investors when official statistics are still not up to international standards or in an election year.

If the Albanian authorities are interested, the IMF would be ready to discuss a new arrangement. This program could focus on maintaining macroeconomic stability, but could contain less conditionality on structural reforms and possibly access to IMF financing. It could take the form of a regular or precautionary Stand-By Arrangement (SBA).

Irrespective of whether Albania has a program with the Fund or not, prudent macroeconomic policies will need to be maintained to lay the foundation for continued poverty reduction and sustained high economic growth. The Albanian authorities, both this government and previous governments, have a very good track record as to maintaining macroeconomic stability. However, with the expiry of the IMF arrangement, they will need some other type of fiscal rule to anchor policies, such as an expenditure, deficit, or debt ceiling. This will be all the more important as Albania plans to access global financial markets.

Lastly just to note that Albania will continue to have access to technical assistance and undertake annual Article IV Consultations after the conclusion of the program, as is the case with all IMF member countries. The Article IV Consultation is at the heart of our surveillance activities, where we provide an assessment of economic and financial developments, and advise on risks to stability and growth and if policy adjustments are warranted.

AENews – There is one theory that says that the IMF leaves a country generally before a crisis. Is there a real risk for crisis in Albania in the next 3 years?

Westin – Definitively not. The current three-year IMF arrangement with Albania, which is supported by a combined Poverty Reduction and Growth Facility (PRGF) and Extended Fund Facility (EFF), was approved in January 2006 and is set to expire according to schedule in January 2009, under the assumption that its sixth and final review will be concluded on time. The current arrangement is the sixth program that Albania has had with the IMF. Since its inception, it was expected that this would be Albania’s last PRGF arrangement, an IMF lending facility designed for low-income countries.

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Posted in ALBANIA, ECONOMIC CONJUNCTURE, ECONOMY, EUROPE, IMF, INTERNATIONAL, MACROECONOMY | Leave a Comment »

EU REBUKES JUDICIARY SYSTEM OF ALBANIA

Posted by Gilmour Poincaree on October 31, 2008

October 30, 2008 ·

Filed Under Economy, General News

Tirana, 30 Oct. 2008 (AENews) – The European Commission acknowledges that the country has continued to make progress in democracy and rule of law. However, it is criticized for lacking dialogue between political parties. The proper functioning of state institutions also requires consolidation.

“Despite some progress, the fight against corruption and organized crime remains a major challenge”, report says. It says an overall anti-corruption strategy has not started, and emphasizes that corruption “remains widespread and serious problem”.

The report adds: “Fighting corruption in the judiciary remains a key issue”, and it urges a thorough investigation of the Gerdec explosion case. “Much work is needed on all aspects of the issue, including judicial accountability and transparency of political party founding,” the paper notes.

The report notes only limited progress in preventing money laundering, as well as the fight against drug trafficking, which “remains serious concern”. Albania is lacking an adequate court infrastructure, the report says, stressing a “comprehensive reform strategy for the judiciary is missing”.

According to the paper, Albania needs to undertake greater efforts to establish an independent, efficient, and merit-based civil service.

Albania has made progress in aligning its legislation, policies, and capacities with European standards and in implementing Interim agreement commitments. However, in the field of justice, freedom, and security, country has progressed “unevenly”; therefore, the Commission considers there is a need for overall improvement.

In addition, although Albania is participating in dialogue over the liberalization of the visa regime, the report says it has not yet met the EU’s standards regarding the visa regime. In this regard, the report recommends Albania to start issuing biometric passports.

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Posted in ALBANIA, CORRUPTION, CRIMINAL ACTIVITIES, EUROPE, INTERNATIONAL, JUDICIARY SYSTEMS, THE EUROPEAN UNION | Leave a Comment »

ZAGREB 1 DRILLING FOR PEMEX

Posted by Gilmour Poincaree on October 30, 2008

10/29/2008 6:11:13 PM GMT

Filed from Houston

MEXICO: Crosco Integrated Drilling & Well Services semisubmersible Zagreb 1 is drilling for Mexican Zagreb 1, a Pentagone design semi built in 1977national oil company Pemex in the Gulf of Mexico. Services for Pemex are being provided in cooperation with the Croatian drilling contractor’s local Mexican partner, GOIMAR.

Zagreb 1 is testing and completing the well Pox-1 as part of an 18-month drilling and services contract, which began in early June.

Zagreb 1 underwent an upgrade and refurbishment prior to commencement of the Pemex contract. The rig is capable of drilling in water depths of up to 1,500 feet (457.2 m).

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Posted in COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ENERGY, INDUSTRIAL PRODUCTION, INTERNATIONAL, MEXICO, NATURAL GAS, NORTH AMERICA | Leave a Comment »

SOUTH FLORIDA COMMUTER TRAINS SWITCH TO BIODIESEL

Posted by Gilmour Poincaree on October 30, 2008

October 29, 2008

South Florida’s inter-county Tri-Rail system is to start operating on bio-diesel, the South Florida Regional Transportation Authority has announced today.

Eight of 10 Tri-Rail locomotives, which run between Miami, Fort Lauderdale and Palm Beach, will use a 99% blend of either palm or soy oil, official say. The other two locomotives will continue to use regular diesel.

Because of Miami’s warm climate, the Tri-Rail is one of the few commuter rail systems in the country that can tolerate such a high blend of bio-fuel (biodiesel will congeal at cold temperatures).

While the Tri-Rail locomotives use 7 percent more fuel when operating on biodiesel, the fuel costs approximately 30 cents per gallon less than diesel, according to the South Florida RTA.

– David Adams, Times Staff Writer

Posted by Times Editor at 12:57:42 PM on October 29, 2008

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PUBLISHED BY ‘THE FUELLING STATION’

Posted in AGRICULTURE, BIODIESEL, BIOFUELS, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENVIRONMENT, O BIODIESEL, THE FLOW OF INVESTMENTS, USA, VEGETABLE OILS | Leave a Comment »

PARA HISTORIADOR, FUTURO POLÍTICO DE LHS ESTÁ LIGADO SOMENTE A JOINVILLE – Segundo especialista, a vitória de Carlito alavanca candidatura de Ideli em 2010 (SC)

Posted by Gilmour Poincaree on October 30, 2008

Segunda-feira, 27 de Outubro de 2008

O resultado da disputa pela prefeitura em Joinville (SC) pode indicar tendências para o cenário político CARLITO MERS catarinense. A derrota de Darci de Matos (DEM), nas urnas nesse domingo, significa uma derrota pessoal do governador, Luiz Henrique da Silveira (PMDB). É o que avalia o historiador da Universidade Federal de Santa Catarina (UFSC), Waldir Rampinelli.

“O Luiz Henrique é de lá [Joinville], foi prefeito de lá e apostou muito na cidade. O resultado das urnas é uma derrota acachapante para o governador, analisou Rampinelli. Por outro lado, a vitória do petista Carlito Mers representa uma vitória também da senadora Ideli Salvati, que apoiou o candidato e quer ser governadora, aponta o historiador.

Joinville tem hoje 487 mil habitantes mais do que a capital Florianópolis e 340 mil eleitores. A partir da década de 1950 viveu um período de grande expansão da atividade industrial, chegando a ser chamada de a Manchester Catarinense, uma alusão cidade inglesa, que foi um dos berços da revolução industrial.

Mas, de acordo com Rampinelli, hoje a cidade vive outra realidade. Joinville foi muito importante em Santa Catarina nos anos 1960 e 1970 por causa da industrialização. As pessoas vinham muito do interior para trabalhar em Joinville e havia emprego para todo mundo. Hoje, a cidade não tem mais esse surto industrial e já há pessoas fazendo o contrário, voltando para o interior. Joinville não abriga mais tanta mão-de-obra, apontou.

No primeiro turno, Darci de Matos teve 23,96% dos votos contra 36,14% de Carlito, da coligação Joinville de Toda Sua Gente (PT-PR). Rampinelli destacou que os processos de cassação que Luiz Henrique enfrenta atualmente na Justiça, contribuíram para o desgaste da imagem dele e, conseqüentemente, de Darci.
Postado por Antônio Anacleto às 09:00

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PUBLISHED BY ‘GAZETA DE JOINVILLE’

Posted in BRASIL, CIDADES, O PODER EXECUTIVO ESTADUAL, O PODER EXECUTIVO MUNICIPAL, OS GOVERNADORES, OS PREFEITOS, PARTIDO DO MOVIMENTO DEMOCRÁTICO BRASILEIRO (PMDB), PARTIDO DOS DEMOCRATAS (PD), PARTIDO DOS TRABALHADORES (PT), PARTIDOS POLÍTICOS - BRASIL, POLÍTICA - BRASIL, POLÍTICA REGIONAL, SC | Leave a Comment »

METAL PRODUCTION DECLINES AS PRICES DIP

Posted by Gilmour Poincaree on October 30, 2008

30 Oct, 2008, 0533 hrs IST,MV Ramsurya, ET Bureau

MUMBAI: The slowdown in global economy due to the liquidity crisis has affected among all sectors, the metals industry such as steel plants-an integral part of the metals sector-are currently mulling production cutbacks and price cuts, a reminder of the situation way back in 2000 when the industry faced its worst crisis ever. The impact isn’t limited to steel alone; the non-ferrous industry including aluminium and copper has also seen a sharp reduction in prices although this industry hasn’t so far indicated any move toward a cut in production.

While it is reliably learnt that primary steel producers such as JSW Steel, Essar Steel and Ispat Industries have been exploring product rationalisation options, they haven’t commented on the issue officially so far. The companies however have gone ahead with production cuts in their overseas units as the situation is more grim in the US and Europe where the liquidity crisis has squeezed out demand. Locally the companies are learnt to be actively exploring options to cut production by about 10% to 20%.

Although the slowdown has affected most companies, those making commercial grade were more affected compared to those that have a ‘versatile’ product basket. This is because prices of the base-grade steel like hot rolled coils, has come down sharply by almost $350 per tonne in the past 45 days. The volatility is less in higher value products made by larger companies such as Tata Steel.

The fall in prices has been attributed to both the credit squeeze and a fall in Chinese demand. “In China, production has fallen drastically because of slowing demand,” said JSW Steel finance director M V S Seshagiri Rao. For example, China used to make 45 million tonnes of steel every month till July, which is equal to about 10 months of total production in India.

“That has come down to 41 million tonnes in China and is likely to fall further,” added Mr Rao. Tight cost-control measures has tightened corporate spending on fixed assets and metal consumption in China, say international reports. According to Indian steel industry executives, some Chinese steel mills are cutting output. It is estimated that 1.25 million to 1.3 million tonnes of hot rolled coil production will be lost because of current out-ages at large steel mills. Some companies have stopped production of low-value-added products such as slab, rebar and wire.

The state-run NMDC, which supplies most of the iron ore requirements to Indian steel companies, is likely to meet Japanese steel buyers. “We will take a decision on fixing ore prices anytime, it could be after the meet in Japan or before that also,” said chairman Rana Som. The state-run ore supplier is likely to revise price upward as “long-term contract prices are lower than spot prices,” said Mr Som.

In the non-ferrous sector also, the situation is not very different. The Anil Agarwal-controlled Vedanta Resources on Tuesday said that its copper cathode production at Tuticorin has fallen by 13.4% to 149,000 tonnes. Although this is due to a planned 26-day maintenance shutdown in the first quarter and stabilisation issues in the second quarter, the slowdown in demand could have some impact in the near term. “There is a slowdown for sure,” says Vedanta finance director Tarun Jain. “All asset classes, including metals, have gone in for a de-rating and the liquidity crisis is affecting everybody.”

In aluminium, last week there was a steep price fall leading to most aluminum smelters in the world operating at a loss. A recent Macquarie Research report says that most base metals prices fell sharply last week – nickel was down 28.7%, copper fell by 28.5%, zinc was down 18.6% and aluminum by 11.5% as “the market is factoring in a sharp downturn in global demand for the next 12-18 months. “The recent fall in Index of Industrial Production numbers shows an output contraction. Mr Rao said that the government should take measures to address the issue.

“It is majorly caused by the liquidity issue…so this needs to be sorted out first. Industry should be given assistance on working capital and on letters of credit. Trade is dying out and that is dangerous for the industry,” he added.

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Posted in COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, METALS, METALS INDUSTRY, THE FLOW OF INVESTMENTS | Leave a Comment »

ABORIGINAL JOB PLAN LAUNCHED TODAY (Australia)

Posted by Gilmour Poincaree on October 30, 2008

AM – Thursday, 30 October , 2008 08:12:00

Reporter: Sara Everingham

PETER CAVE: Corporate Australia is pledging to provide almost 5000 jobs for Indigenous people as part of the most ambitious Indigenous employment scheme to date.

The Australian Employment Covenant is being launched in Sydney today by its founder mining magnate Andrew Forrest and the Prime Minister Kevin Rudd.

The plan is to get 50,000 Indigenous people into meaningful work in the private sector in the next two years.

Sara Everingham reports.

SARA EVERINGHAM: It’s an ambitious plan but the Indigenous leader Warren Mundine is confident the Australian Employment Covenant will succeed. He’s helping drive the program founded by Fortescue Metals chief executive Andrew Forrest in August.

Warren Mundine says already almost 5000 jobs are being offered by the corporate sector.

WARREN MUNDINE: Corporate Australia is right onside. Now we need to drill down into the rest of the industries across Australia such as small business and so on.

SARA EVERINGHAM: The plan is to get companies to agree to employ a certain number of Indigenous people with the Government to provide training. The workers in the scheme will be matched up with buddies or mentors to help them stay in the jobs.

Warren Mundine says most of the positions will be in New South Wales, Queensland and Western Australia where most Indigenous people live and he says the positions will cover many fields.

WARREN MUNDINE: Retail, hospitality and tourism, the mining industry, of course. They have a very successful record already, but we’ll break into IT and the law and so on.

SARA EVERINGHAM: But the scheme has its critics. Some argue it’s overly ambitious and others wonder whether Indigenous people will be willing to leave their country to work away from home.

WARREN MUNDINE: You have to overly ambitious. Look at the statistics in regard to Aboriginal employment in Australia. They’re dreadful.

SARA EVERINGHAM: The Indigenous leader Noel Pearson is a strong supporter of the scheme but he says the Government needs to go further in its support.

He wants legislation exempting school leavers from the 90-minute rule that sees people only obliged to take jobs within a 90-minute commuting time, and Warren Mundine agrees.

WARREN MUNDINE: Having to travel and having to move from your community does not isolate you from your country. It does not isolate you from your culture.

PETER CAVE: The Indigenous leader, Warren Mundine ending Sara Everingham’s report.

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Posted in AUSTRALIA, INTERNATIONAL, NATIONAL WORK FORCES, NATIVE PEOPLES, OCEANIA | Leave a Comment »

THE $58 TRILLION ELEPHANT IN THE ROOM – The roots of this year’s financial crisis go back to a small team of bankers at J.P. Morgan in New York. Now, their invention—credit derivatives—has helped bring down Wall Street and has left Morgan with its biggest exposure of all

Posted by Gilmour Poincaree on October 29, 2008

 

Jesse Eisinger by Jesse Eisinger

At a time when the reputation of bankers has been shredded, Bill Demchak is a throwback. The day I meet him, the financial world is once again poised on the brink of destruction. The Dow Jones Industrial Average lost 358 points the day before and is already down another 150 this morning. Yet Elephant and man in office setting - Photograph by Phillip Toledanothe green-eyed Demchak, in pleated khakis hiked up unfashionably high on his waist, seems preternaturally calm—especially for a man who, unwittingly, has had a hand in bringing Wall Street to its knees.

Demchak, now the vice chairman of PNC Financial in Pittsburgh, returned to his hometown in 2002 to help rescue the bank after it became mired in an accounting scandal. Under Demchak and the rest of its new management team, PNC has avoided most of the terrible mistakes of its Wall Street peers by spurning bad mortgages, dubious off-balance-sheet deals, and questionable corporate loans. It’s now one of the best-performing banks in the country.

But before he had this life, Demchak had another, as the leader of a small group at J.P. Morgan in New York that pioneered the kind of financial instruments that eventually led to this autumn’s wreckage on Wall Street. The J.P. Morgan team created and then industrialized credit derivatives, which have enveloped the global markets, growing to a mind-numbing $58 trillion worth of credit contracts. They have spread and morphed in ways that Demchak never intended but always feared.

Long celebrated as a way for banks to diffuse their risks, the credit derivatives invented by Demchak’s team have instead multiplied them. The new credit vehicles encouraged banks and other financial firms to take on riskier loans than they should have; helped increase leverage in the global financial system; and exposed a much wider array of financial firms to the risk of default. (View an interactive timeline of derivatives.)

Credit derivatives aren’t, of course, solely to blame for the pandemic that has helped bring down Wall Street. They didn’t single-handedly force Bear Stearns and Lehman Brothers to bulk up on toxic debt, dooming them to collapse. But they made the financial world more complex and more opaque. Ultimately, they have exacerbated the market panic, as financial firms and regulators have belatedly come to grips with the enormity of the problems. Merrill Lynch ultimately capitulated to a sale because investors had no confidence that the firm had a handle on what its problems were. When the federal government took over A.I.G. in September, it was largely because of the insurance behemoth’s exposure to credit-default swaps, a type of derivative that flourished in the wake of Demchak and his team’s creations. By mid-September, Treasury Secretary Hank Paulson was forced into proposing the largest bailout in U.S. history. Securities and Exchange Commission chairman Christopher Cox (S.E.C. No Evil, October) called for regulating credit derivatives.

Morgan’s derivatives project began in the wake of the Asian financial crisis in 1997 as an attempt to protect the bank from bad loans. Demchak’s innovations worked—for his bank. Morgan came to dominate this corner of the financial world while preserving a culture of prudence. Morgan—deemed to be so safe that it snagged two of the victims of the financial-system collapse, Bear Stearns and Washington Mutual—is still swimming in credit derivatives, far more than any other firm on Wall Street, though the bank says it’s hedged. As of the second quarter of 2008, the bank had written derivatives contracts backing credit valued at $10.2 trillion, roughly three-quarters the size of the U.S. economy.

But Demchak’s innovation has a more troubling legacy. J.P. Morgan, rather than being inoculated, was actually becoming the Patient Zero of Wall Street, eventually carrying the credit virus to the far corners of the global financial system. The structure of the first derivatives deal wasn’t as solid as Demchak’s team had intended. That initial, flawed financial instrument was later replicated thousands of times by J.P. Morgan and other banks, with the same defects repeated and magnified over and over again.

The creation of credit derivatives, only a decade ago, is more responsible than anything else for binding the global financial world together more closely. Now some of the trailblazers are puzzling over what has been wrought. “How can we have a financial system so precariously balanced after such an extraordinarily profitable period?” asks Andrew Donaldson, a former colleague of Demchak’s who runs an asset management firm in London.

Demchak spends his days in an unassuming office in PNC’s headquarters, situated amid a slightly seedy collection of streets in downtown Pittsburgh. Demchak warned for years about excesses in lending and is now baffled by, and even somewhat contemptuous of, his peers’ disastrous mistakes: “At the end of the day, I’m never going to be—knock on wood—a guy you see in the paper and say, ‘Look at this stupid, self-serving decision.’ ”

Later, as he thinks back to 1997 and the days in New York when his team helped get the derivatives market off the ground, he lights up. “Oh, God,” Demchak says. “It was absolutely the best time ever in my life.”

In the mid-1990s, Demchak, along with his boss, Peter Hancock, an effervescent Briton, became converts to the closest thing the banking industry has had to a religious reformation. Back then, relationships drove the commercial-banking business. Glad-handing bankers with tight connections to corporate boardrooms made the rain.

These guys never met a loan from a corporate client they would turn down, even if they weren’t sure it would be profitable in the long run.

Hancock and Demchak’s creed was simple: Banks should know whether their loans were going to make money. The pair insisted that loans be priced to their current value in the market. Because of the legacy of the old relationship bankers, J.P. Morgan was struggling. The problem, in the view of the stock market, was that the bank had the wrong clients. They were sleepy American icons, some of whom John Pierpont Morgan himself had lent to and even helped build. Though bank officials were promising Wall Street that it could generate returns of 20 percent, the return on many of its loans was much lower, forcing the bank to run the race while dragging lead weights on its ankles.

The Asian financial crisis highlighted the problem. Morgan lost money on loans to Asian companies. That prompted the bank to take a look at all of its corporate lending practices, abroad as well as at home. When it did, top executives came to a sobering realization: Not only was J.P. Morgan not making nearly enough profit on these blue-chip corporate loans, the bank had also made far too many of them. Most weren’t loans at all but lines of credit promising funds at some later date. Hancock and Demchak realized that in a crisis, many of these companies would probably ask J.P. Morgan for access to the money they were promised. Worse, they wouldn’t do it unless they were on the brink of collapse—exactly the wrong time for a banker to make a loan. The bankers who made those loans thought the odds of that happening were too small to even consider. “The old banking mentality viewed them as riskless,” Demchak says. But the mentality was wrong.

Morgan realized it needed to act quickly to reduce its exposure. It had to free up capital for more profitable business. But it couldn’t sell the loans without alienating its longtime, blue-chip customers.

Demchak put the new religion into action. “Demchak was the first person I know of who had the vision that the credit-derivatives market could be anything like it is today,” says Charles Pardue, who worked for Demchak at J.P. Morgan before moving to a hedge fund in London.

Over the coming months, Demchak would put his assault team of math whizzes and marketers to work on fixing the problem. Within the bank, the project was called the Credit Transformation.

Demchak received crucial help from his lieutenant, Blythe Masters, a rising star and formidable presence at the bank. She interned at Morgan while still in college at Cambridge, in Britain, and joined the bank after graduating. Ultracompetitive and driven with a passion for debate, she would give talks and seminars proselytizing about the promise and power of credit derivatives, ultimately becoming their “poster child,” according to credit-­markets consultant Eileen Murphy.

“When you are doing something new, it gets done only by imposing your force of will,” says a former colleague of Masters’. “She was that person.”

Wall Street likes to call its innovations “technologies” to convey a weighty sense of importance. What Demchak and Masters did was combine two of these technologies—securitization and credit derivatives—for the first time.

Securitization has been around since the 1970s. In such a transaction, a group of loans—for example, mortgage, credit card, or corporate loans—is bundled together and sliced up into pieces called tranches. The lowest portion, called the equity, is exposed to the first losses. The next slice up is exposed to the following losses, and so on, until you get to the top. The slices are usually rated by the rating agencies. (Often, the media and even some on Wall Street colloquially refer to tranches of securitizations as derivatives; they aren’t. Tranches are securities backed by a pool of cash-producing assets.)

The Demchak group’s breakthrough was to inject a little magic into standard securitizations. Instead of putting a particular loan into the sliced-up instrument—say, a 30-year loan to I.B.M.—it put a piece of J.P. Morgan’s exposure to I.B.M. into it. For this, the team used credit-default swaps, a burgeoning form of credit derivative. In a C.D.S. transaction, the buyer is protected against a default. These contracts had been floating around in small, experimental form for several years, having been created by Bankers Trust, a scrappy cowboy investment bank.

Demchak’s team was the first to take them wholesale, using credit-default swaps in a huge deal. They mashed up J.P. Morgan’s exposure to more than 300 giant corporations, created an off-balance-sheet vehicle, then sold slices of that to investors. The vehicle then protected J.P. Morgan from defaults. In effect, Morgan was paying insurance premiums to investors who now were on the hook if one of Morgan’s clients went belly-up. “The innovation of not being tied to specific loans or bonds is what made the credit-derivatives market what it is today,” says Romita Shetty, who was part of Demchak’s team at J.P. Morgan.

Development on the project continued slowly through the second half of 1997, involving painstaking and tedious legal and accounting work, quantitative analysis, and hand-holding and persuasion of banking regulators and credit-rating agencies. Demchak and Masters wanted their first deal to hit the market by the end of the year so that Morgan could get credit for it when the bank reported its earnings. The period was so intense that Masters, an avid equestrienne, at one point took a conference call from atop her horse.

Finally, in December 1997, Demchak’s team closed on this first big credit-derivatives deal, the Broad Indexed Secured Trust Offering, or Bistro for short. Insurance companies and banks, the initial customers, were enthusiastic, snapping it up in just two weeks. The deal was enormous for the time, off-loading more than $9.7 billion of J.P. Morgan’s exposure. Morgan had succeeded in reducing its balance-sheet risk and was able to free up capital to buy its stock back.

J.P. Morgan would go on to launch a credit-­derivatives assembly line, becoming the Henry Ford of the new financial market. Throughout the 1990s, the bank was a major player in persuading lawmakers to allow the derivatives markets to remain unregulated—a move regulators are now reevaluating. Bistro helped J.P. Morgan traders in London kick-start the expansion of the “single-name” C.D.S. market, where individual contracts that cover just one company or entity trade hands. This market became liquid and deep by the early 2000s. “We had 100 people,” Demchak recalls. “We helped create the regulatory framework, the legal and accounting framework, and we did billions. We industrialized the product.”

J.P. Morgan continues to dominate the world of derivatives. It has derivatives contracts tied to $90 trillion of underlying securities. Of that, $10.2 trillion are credit-derivatives contracts. Those mind-boggling totals are somewhat misleading. They reflect what is called the “notional” amount in the world of derivatives, based on the underlying amount of the contract, not its current value. When offsetting contracts are taken into account, that figure is whittled down to a much smaller—though still enormous—$109 billion of derivatives, of which $26 billion are credit derivatives. That’s the amount the bank could lose if all its trading partners went out of business, an extremely remote event. But the exposure is climbing, up 17.4 percent from the end of 2007. That’s equal to 20 percent of the bank’s net worth.

Bistro “was the most sublime piece of financial engineering that was ever developed. It was breathtaking in terms of beauty and elegance,” says Satyajit Das, a risk consultant and the author of Traders, Guns, and Money, a financial history. But “in many ways,” Das adds, “J.P. Morgan created Frankenstein’s monster.”

For J.P. Morgan, Bistro worked wonderfully. But even in that first deal, the weaknesses in structured finance and credit derivatives that would come to the fore in the 2007 credit-market crash were already there.

Despite its blue-chip assets, Bistro didn’t perform pristinely. The initial slice, the equity layer that Morgan retained as a cushion against trouble, was so thin that it couldn’t weather even one default from one of the bigger companies in the bundle. That ultimately happened, wiping the slice out entirely. The investors who were one notch up, in what’s called the mezzanine layer, lost money as well. Even the buyers of the top-rated tranches, which were thought to be rock solid, had to endure bumpy periods before they got their money back.

During that first major deal, the credit-rating agencies, which were supposed to be impartial, were already deeply enmeshed in the give-and-take of the process. A former Morgan banker who helped create Bistro recalls that Standard & Poor’s was giving the bank a tough time. The rating firm would run the deal through its models, and “each time, it came up with disastrous results. We did some tinkering and all of a sudden, it could rate the deal,” the banker says.

The pattern was set. The rating agencies would become integral to the creation of the structures. Standard & Poor’s says questioning that first deal was appropriate and stands by its original rating. It further says it doesn’t get involved in structuring deals. But the close relationships between the rating agencies and the Wall Street firms were heavily criticized following widespread mortgage-related securities failures after the housing bubble burst.

After Bistro, investors and regulators embraced derivatives as ways to free up capital to make more loans. Banks around the world used the structures to off-load their own credit risk. Competitors rushed to copy Morgan and Bistro.

The knockoffs and followups were even more flawed than the original model. The second Bistro deal, in 1998, suffered credit downgrades. One of the big deals that followed fast on Bistro’s heels was York Funding, a Credit Suisse structure. “They stuffed it with the worst possible credits,” recalls a former rating-agency employee who examined the deal.

One major problem was that banks had the ability to substitute loans in and out of the structure, as long as the loans had the same credit rating. This allowed managers to scour their books for a loan that looked shaky but still retained a good credit rating and swap it in for a healthier one. The tranche’s credit rating would remain the same, making the whole deal look better on paper than it actually was.

Ultimately, the game became less about reducing risk and more about fooling regulators and the rating agencies. “From 1999 to 2000, there was a lot of innovation for innovation’s sake. A lot of products game the rating agencies and game the regulatory capital requirements,” says a former J.P. Morgan banker who was involved with Bistro.

Warning signs piled up. After the tech bubble burst in 2000, myriad similar deals performed terribly. Some were backed by corporate loans. Many were Bistro-like constructs with credit derivatives. As a class, they hadn’t made it through a cycle of corporate defaults profitably, the acid test of any stable credit product. In his recounting of the period, Das writes, “The credit models failed miserably.”

Despite the obvious failure of the first round of this wizardry, Wall Street was at it again by 2003, this time with mortgages. Investment banks sold billions of structured securities, made up mostly of housing loans to subprime customers with shaky credit. As the market got going, Wall Street bundled leveraged loans made to companies that had junk ratings from the credit-rating agencies. At the peak in 2006, Wall Street issued $89 billion worth of Bistro-like structures called synthetic collateralized-debt obligations. Many of the $415 billion worth of the main type of C.D.O. carried embedded credit derivatives as well.

It’s not surprising that they failed again. Investors and financial firms lost hundreds of billions of dollars as part of the housing and corporate loan meltdown. Only then did the credit-rating agencies come under assault for being too closely involved in helping Wall Street create the complex structures. It took until this year for the structured-finance market to come to a screeching halt.

Today, the financial markets are living in the slipstream of the Bistro deal. “People like to talk about what a shambles the banking system is. But it’s a shambles by design. You are taking on capital, reserving some of it, and lending it out. The whole system is levered,” says a former J.P. Morgan banker. After Bistro, it became more so.

The practice of crafting loans that banks had no intention of keeping on their own balance sheets wasn’t invented by J.P. Morgan, nor was the credit-derivatives market solely responsible for making it possible. Certainly, not all the lending excesses, especially in mortgages, can be laid at the feet of the complex Wall Street structures that used derivatives. But Bistro spread the popularity of this “originate and distribute” model. This experience taught the banking industry that loans designed to be sold to investors for a quick profit performed much more poorly than loans that banks had to keep.

In addition to keeping the very small piece of Bistro’s first-loss equity slice, J.P. Morgan retained part of the very top slice. Demchak’s team christened it “super­senior.” His group knew that there were risks, though slight, in keeping exposure to these slices. A.I.G., Merrill Lynch, and bond insurers MBIA and Ambac ignored them. Knowingly or not, these firms followed the Bistro deal, retaining super­senior exposure on their books to billions of dollars’ worth of structures in recent years. These companies thought—erroneously—that the slices were so unlikely to default that they needn’t set aside much capital for that eventuality.

The problem was that the underlying assets propping these slices up weren’t blue-chip loans but rather loans to subprime borrowers and junk companies. The supersenior slices turned out to be enormously risky, exposing these companies to huge losses.

Bankers have lost their heads in the past several years. The financial system has run amok. When the federal government took control of mortgage giants Fannie Mae and Freddie Mac, the takeover was deemed a “credit event,” triggering the credit-default swaps that other companies held as insurance against such an event. A week later, Lehman filed for bankruptcy, shrouding the market in an even greater fog. And then, investors in A.I.G. panicked. The insurance giant had written hundreds of billions of dollars’ worth of protection on the supersenior slices of mortgage-backed securities. Because of its high credit rating, A.I.G. hadn’t needed to post any initial collateral. But as the market sent the cost of default protection soaring, A.I.G.’s trading partners demanded collateral from the insurer. A.I.G. didn’t have it. Credit-rating agencies downgraded the insurance company, requiring that it post even more collateral. This left A.I.G. teetering on the edge of bankruptcy, and in an unprecedented intervention, it had to be nationalized by the federal government. For the first time, the C.D.S. market shrank in the first half of the year, after doubling every year since 2001.

Bistro had tied the world together, taking credit risk from the banks and passing it on to anyone who wanted it. For years, proponents of credit derivatives, including then-Federal Reserve chairman Alan Greenspan and current chair Ben Bernanke, had celebrated the way they spread risk. Everyone might share a little bit of risk, but no firm would collapse from it. Yet in this credit crisis, everyone has become infected.

You can almost detect a crisis of faith in Demchak. In the past eight years, he’s seen one market failure after another. First came the Chase takeover of J.P. Morgan. Chase’s stock soared in the ’90s as investors credulously rewarded its growth. Although it was able to take over the languishing J.P. Morgan, Chase had exposure to almost every big blowup in the wake of the bursting of the 1990s stock market bubble. Much of Demchak’s good work to off-load risk was for naught. (After Demchak left J.P. Morgan in 2002, almost every member of his team followed except Masters, who now runs the bank’s commodities businesses and is regarded as a possible C.E.O. candidate one day.)

Then the credit markets ran wild, with bankers handing out loans that Demchak knew could never be profitable. Today, the markets are gripped with what he sees as an oft-irrational panic, driving prices to fluctuate wildly.

Since Ronald Reagan’s presidency, the dominant ideology governing the financial world has been what George Soros calls “market fundamentalism”—the belief that we should trust the market when deciding how to allocate our resources. We’ll all be better off, the argument goes, if capital is allowed to flow wherever the prices call for it, with as little central planning and governmental interference as possible.

But we have had two great investment bubbles, first in the stock market and now in the credit markets. For the first time in a generation, even some bankers question whether the markets know anything. If they can’t be trusted, what’s going to replace them?

“I used to be the biggest advocate of marking everything to market at all times, because it keeps everyone honest,” Demchak says, referring to the practice of recording the value on the books at the current value. But he saw markets overreacting, swinging from euphoria to pessimism. Now he thinks the fates of great companies are in the hands of inexperienced traders speculating in thin markets. A colleague com­plained to Demchak recently that “some 24-year-old kid is going to mark me down or up 100 million bucks today. How is that?”

Demchak understands his colleague’s frustration. “He is right.”

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PUBLISHED BY ‘PortFolio.com’

Posted in BANKING SYSTEM - USA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, THE FLOW OF INVESTMENTS, USA | 2 Comments »

MIAMI CENTER BUILDING ACQUIRED BY SUMITOMO CORPORATION OF AMERICA

Posted by Gilmour Poincaree on October 29, 2008

NEW YORK, Oct. 28 /PRNewswire/ — Sumitomo Corporation of America (SCOA) recently closed on the purchase of Miami Center building, at 201 South Biscayne Boulevard, in the Central Business district of Miami, Florida. The building, with spectacular views of Biscayne Bay and the city skyline has immediate access to Bayside Marketplace shopping & restaurant complex and the adjoining Inter-Continental Hotel Miami. Negotiations with the selling group, Crescent Real Estate Equities Limited Partnership and institutional investors advised by J.P. Morgan Asset Management – Global Real Assets, concluded on September 30, 2008 with a purchase price of $260 million.

Robert Obringer, general manager of SCOA’s Real Estate Unit, sees solid value in this latest acquisition. “We are excited to add Miami Center to our portfolio of commercial properties here in the U.S.,” explains Mr. Obringer.

“As part of our constant management of assets, we are always looking for opportunities that will maximize return on investment, and this property offers a strong upside potential for steady cash flow growth and long-term value appreciation,” adds Mr. Obringer. The building is 96% leased to multiple tenants, including major tenant, Citi Group.

Miami Center contains 782,210 square feet of rentable space on 34 floors. Designed by internationally-acclaimed architect Pietro Belluschi, and clad in Italian travertine marble, Miami Center has been a striking figure in the downtown Miami skyline since 1983. Besides its breathtaking views of Biscayne Bay and the city skyline, Interstates 95 and 395 and other major expressways are easily accessible to tenants and visitors of the complex.

Miami Center is SCOA’s third commercial real estate purchase this year. Earlier in the year, the Company acquired a 156,000 square foot, 12 story office building located at 1750 K Street, in the heart of the central business district of Washington, D.C. and a 299,540 square foot, 12 story office building in an emerging commercial area in Tempe, Arizona. SCOA also has assigned RYAN COMPANIES US, INC. as a management company of all its office buildings so that due diligence, property management, tenant leasing and other daily operations are consolidated by them.

About Sumitomo Corporation of America

Sumitomo Corporation of America (SCOA) is an integrated trading and investment enterprise with offices in 11 major U.S. cities. Established in 1952 and headquartered in New York City, SCOA is the largest wholly owned subsidiary of Sumitomo Corporation, Japan (SC), an integrated global trading firm. SCOA has diversified investments and trading businesses involved in manufacturing and marketing of consumer products, providing financing for customers and suppliers, coordination and operation of urban and industrial infrastructure products, providing logistics and transportation services, developing natural resources, distribution of steel and other products and developing and managing commercial and residential real estate. The Company has a portfolio of commercial properties with a combined market value in excess of $600 million. For more information about SCOA, visit http://www.sumitomocorp.com.

About J.P. Morgan Asset Management

J.P. Morgan Asset Management is a global asset management leader providing world-class investment solutions to institutions, individuals and financial intermediaries. The firm is responsible for approximately $1.2 trillion in assets under management (based on assets under management for the Asset Management division of JPMorgan Chase & Co. as of June 30, 2008), including more than $58.4 billion in real estate managed by J.P. Morgan Asset Management – Global Real Assets. With a 38-year history of successful investing and a staff of approximately 379 professionals, J.P. Morgan Asset Management – Global Real Assets identifies, analyzes, negotiates, acquires, develops, redevelops, renovates, operates, maintains, finances and sells assets, on behalf of its clients. J.P. Morgan Asset Management’s broad investment capabilities and framework for analyzing opportunities in today’s complex real estate and infrastructure markets provide critical insights for its institutional clients in both the public and private markets.

SOURCE:Sumitomo Corporation of America

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PUBLISHED BY ‘PR NEWSWIRE’

Posted in ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, JAPAN, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

US WILLING TO HOLD TALKS WITH TALIBAN, SAYS REPORT

Posted by Gilmour Poincaree on October 29, 2008

October 29, 2008

by Anwar Iqbal and Masood Haider

WASHINGTON/NEW YORK, Oct 28: The US is willing to hold direct talks with elements of the Taliban in an effort to quell unrest in Afghanistan, the Wall Street Journal reported on Tuesday, citing unidentified Bush administration officials.

The Washington Post reported that Taliban leader Mullah Omar had shown openness to the idea of repudiating Al Qaeda, which encouraged the Bush administration to explore the possibility of holding direct talks with the militia.

Jane’s Defence Weekly reported that the Taliban had conveyed this message to representatives of the Afghan government during a meeting in Saudi Arabia last month.

Amid these reports of a possible breakthrough in the search for a peaceful solution to the Afghan conflict, Christian Science Monitor noted that on Monday the Taliban militia showed “a new potency” in the fight against coalition forces, bringing down a US military helicopter near Kabul, while a suicide bomber struck and killed two Americans in northern Afghanistan.

The Los Angeles Times on Tuesday highlighted the significance of the attack, noting that “choppers are a crucial mode of transport for troops and supplies” in Afghanistan.

Speculations about a possible breakthrough in the talks with the Taliban follow a series of meetings last month in Saudi Arabia between representatives of the Afghan government and the militia.

But even before the Saudis initiated the talks, the Karzai government had been putting out feelers to the Taliban for negotiating an end to its insurgency in exchange for some sort of power-sharing deal.

Though the US has so far been on the sidelines but at a recent news conference Gen David McKiernan, the commander of US troops in Afghanistan, grudgingly said he would support the Afghan government if it chose to go down the path of negotiations.

And now the Wall Street Journal is reporting that the US might get involved in those negotiations directly. “Senior White House and military officials believe that engaging some levels of the Taliban — while excluding top leaders — could help reverse a pronounced downward spiral in Afghanistan and neighbouring Pakistan,” the report said.

Both countries have been destabilised by a recent wave of violence.

Senior Bush administration officials told the Journal that the outreach was a draft recommendation in a classified White House assessment of US strategy in Afghanistan. The officials said that the recommendation called for the talks to be led by the Afghan central government, but with the active participation of the US.

The US would be willing to pay moderate Taliban members to lay down their weapons and join the political process, the Journal cited an unidentified US official as saying. The Central Intelligence Agency has been mapping Afghanistan’s tribal areas in an attempt to understand the allegiances of clans and tribes, the report said.

WSJ noted that joining the talks would only be a first step as the Bush administration was still in the process of determining what substantial offer it could make to persuade the Taliban to abandon violence. “How much should (we) be willing to offer guys like this?” asked a senior Bush official while talking to the Journal.

Gen David Petraeus, who will assume responsibility this week for US military operations in Afghanistan and Pakistan as head of the Central Command, supports the proposed direct talks between the Taliban and the US, the WSJ said.

Gen Petraeus used a similar approach in Iraq where a US push to enlist Sunni tribes in the fight against Al Qaeda helped sharply reduce the country’s violence. Gen Petraeus earlier this month publicly endorsed talks with less extreme Taliban elements.

Gen Petraeus also indicated that he believed insurgencies rarely ended with complete victory by one or the other side.

“You have to talk to enemies,” said Gen Petraeus while pointing to Kabul’s efforts to negotiate a deal with the Taliban that would potentially bring some Taliban members back to power, saying that if they were “willing to reconcile” it would be “a positive step”.

US Afghan experts outside the Bush administration have also been urging the White House to try to end violence “by co-optation, integration and appeasement”, as one of them said.

They urge the Bush administration to give the Taliban a positive reason to stop fighting. This, they argue, would allow Washington to separate hardcore militants from others within the Taliban and would also expose the extremists before the Afghan people.

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PUBLISHED BY ‘DAWN’ (Pakistan)

Posted in AFGHANISTAN, ASIA, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

BRENCO ACERTA VENDA DE ETANOL PARA EUA (Brazil)

Posted by Gilmour Poincaree on October 29, 2008

Terça-feira, Outubro 28, 2008

Canal, em 28/10/2008.

A Companhia Brasileira de Energia Renovável (Brenco), associada à União da Indústria de Cana-de-Açúcar (Unica), fechou, em Houston (EUA), um contrato de venda de etanol para a LyondellBasell Industries, uma das maiores companhias do nos Estados Unidos. O biocombustível será produzido nas duas primeiras unidades bioenergéticas da Brenco, em Morro Vermelho (GO) e Alto Taquari (MT). O início da operação está previsto para o segundo trimestre de 2009. ´Acreditamos na construção de relacionamentos de longo prazo com nossos clientes, e o negócio fechado com a Lyondell confirma nossa estratégia´, afirmou o presidente da Brenco, Philippe Reichstul. O etanol de cana será utilizado na composição de ETBE (éter etílico ter butílico), aditivo que contém etanol misturado a derivados de petróleo, que após a industrialização será exportado para o Japão.

A LyondellBasell produzia anteriormente MTBE (éter metil terc butílico), mas está mudando sua planta industrial para produzir a substância a partir do etanol de cana, que não agride o meio ambiente. As usinas Morro Vermelho e Alto Taquari deverão produzir juntas 320 milhões de litros de etanol somente em 2009. Em 2010, as unidades aumentarão sua capacidade de produção para 1 bilhão de litros, e até 25% desse total serão destinados à empresa americana. Além disso, em 2010, três novas unidades da empresa entrarão em operação: uma em Goiás e outras duas no Mato Grosso do Sul, que também fornecerão parte da produção para a Lyondell. O etanol será escoado por meio de estratégia logística desenvolvida pela Brenco. A empresa investirá US$ 1 bilhão na construção de um duto que interligará o Alto Taquari ao Porto de Santos, em São Paulo.

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PUBLISHED BY ‘ETHANOL BRASIL’

Posted in A QUESTÃO ENERGÉTICA, AGRONEGÓCIOS, BIOCOMBUSTÍVEIS, BRASIL, ECONOMIA - BRASIL, ETANOL, EXPANSÃO AGRÍCOLA, EXPANSÃO ECONÔMICA, EXPANSÃO INDUSTRIAL, INDÚSTRIAS, SETOR EXPORTADOR | Leave a Comment »

TOUGH IMF CONDITIONS DIFFICULT TO ACCEPT: ASIF (Pakistan)

Posted by Gilmour Poincaree on October 29, 2008

October 29, 2008

by our Staff Reporter

ISLAMABAD, Oct 28: President Asif Ali Zardari said on Tuesday the government could ‘ill-afford’ President Asif Ali Zardari - PakistanInternational Monetary Fund’s financial assistance with tough conditions.

“Time is running out and there is an urgent need for the ‘Friends of Pakistan’ to extend a helping hand,” he told Adviser to the British Prime Minister Simon McDonald who had called on him at the President’s House.

Mr Zardari, however, made it clear that Pakistan was not looking for aid, but needed friends’ help to enhance trade and economic and investment opportunities.

According to a Foreign Office news release, the discussion focussed on Friends of Democratic Pakistan Initiative, measures and options being considered by the government to address the economic difficulties, Doha Process, situation in the border region, Afghanistan and bilateral cooperation. The president highlighted the government strategy to handle economic issues, socio-economic initiatives to settle tribal areas, including the Benazir Card for every household, and negotiations with the IMF.

He stressed that the war on terror, which had its roots in other regional events, had now become Pakistan’s war and the country and its people were paying a heavy price that needed to be acknowledged by the international community.

Mr Zardari quantified how one incident of terrorism impacted the already turbulent economy. He stressed the need to identify the forces that were funding militants in this expensive war. He was not convinced that drug money could be the only source of funding.

The president informed the British official about the state of relations with Afghanistan and termed recent exchanges and developments such as mini-jirga a manifestation of growing understanding and forward movement in relations.

Mr McDonald conveyed greetings from Prime Minister Gordon Brown and said that he fondly recalled the president’s visit to the UK in September when they had a fruitful and candid exchange.

The British adviser was highly appreciative of the unanimous resolution adopted by parliament on government’s policy for tackling terrorism.

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PUBLISHED BY ‘DAWN’ (Pakistan)

Posted in ASIA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, IMF, INTERNATIONAL, PAKISTAN | Leave a Comment »

TSUNAMI AND ITS WIDE-RANGING RIPPLE EFFECT

Posted by Gilmour Poincaree on October 29, 2008

29 Oct, 2008, 0126 hrs

IST,Sangita Mehta, ET Bureau

The stock market has fallen around 60% from its peak level in January. Given that foreign institutional investors who hold 35% ($71 bn) of Indian stocks are still in a flight-to-safety mode, there is scope for the market to fall some more.

Although the market crash is not unique to India, there are key differences between India and other markets which have declined. In the US and most of the West, there is a problem in the real sector. The economies are slowing, the financial sector is in a mess because of bad loans and the financial sector crisis has passed on to the stock markets.

In India, it is the other way round. The economy is the second-fastest growing among all reasonably-sized markets and bank balance sheets are sound, but stock markets have collapsed because of the flight of foreign funds to perceived safer havens. But even this flight of capital has not thrown the economy out of kilter.

Reserve Bank of India has over $280 bn of foreign exchange reserves in liquid assets. Bankers say that more money will go out and point to the $89 bn of short-term debt to be repaid. But nearly half the debt is non-resident deposits, which in all likelihood will stay. The only problem is the $40 bn short-term debt that may be too expensive too renew. But the economy seems to be in a position to absorb the impact of these outflows.

There are mixed opinions on the extent to which the US slowdown would hurt service exports — the growth driver and the largest forex earner for the country. But given the weakening of the rupee, it is almost widely expected that the West would continue to depend on India for IT and ITES. However, it would be foolhardy to assume that a 60% crash in the markets would not have an impact on the real sector. The crash has been so swift that its impact is yet to be transmitted to the real sector.

From financial to real

According to bankers, the first casualty will be projects in the pipeline. “Some promoters have pledged shares with lenders when prices were high to raise money to fund their projects. Now that prices have fallen, either the promoter has to top it up with more securities or the lenders will be forced to sell shares.

Also, banks may put further lending on hold, affecting the project. If lenders do sell shares pledged to them, promoters’ holding in the company will come down, making them vulnerable for takeovers,” says Jitendra Balakrishnan, deputy managing director, IDBI Bank.

According to Mr Balakrishnan, those corporates who were looking at private equity route will find it difficult raising them. This, in turn, would affect their projects. Rights issues which have been launched in the midst of the crisis have bombed. Others planning rights issues may be forced to shelve them. “Those who were looking at acquisition of companies through share swaps will have to rethink,” he adds.

In the last two months, two sources of funds — foreign borrowing and capital markets — have completely dried up. This has forced companies to rush to banks. But going forward, getting money from banks will also prove to be tough. “Companies which are dependent on the equity market to adhere to the debt-equity ratio will be affected. A bank can lend only when the company brings equity to the table.

If a part of the equity funding is coming from the capital market, promoters may rethink lending, considering low valuations, affecting the project,” says MV Nair, chairman, Union Bank of India. He adds that existing businesses would be hurt to the extent that there will be a decline in consumption, as the wealth effect caused by rising markets had boosted consumption so far.

According to AC Mahajan, chairman, Canara Bank, not a single sector is unaffected. “Even sectors that are not linked to markets have started getting affected. For instance, a person may resist buying a house or consumer durables on hopes that prices will fall further; this, in turn, slows down the pace of growth. Similarly, the service sector would also be affected, as demand may come down due to the slowdown.”

The central bank, which has its ear to the ground as far as the performance of corporate India is concerned, is quite optimistic on this front. In a recent interview to Financial Times, RBI governor D Subbarao had said: “This is not like the 1990s for India. It has changed. In the 1990s, our growth resilience arose from debt-financed growth. Today, it is private sector-driven productively-financed growth and there is resilience. And even in the rural sector, I’m told there is a vibrant economy growing there. There’s improvement in the social sector, education and health. So there is a spin-off effect of all this.”

RBI continues to bet on 7.5-8% growth, expecting services, which contribute 65% to GDP to grow by at least 10%. “We are better off this time. In the past, even in the best of time, the economy saw a growth of 4-5% and now, in the worst of times, we are talking of 7-8% growth,” says Mr Mahajan. Some like Balakrishnan feel that at present levels, share prices are reflecting the true value of the real economy.

A fall in asset prices, particularly real estate assets, will make houses more affordable. Fortunately for India, its leading banks have raised over $10 bn in equity capital when markets where at their peak level last year. This places them in a stronger position in the event of a slowdown.

The impact of the slowdown on asset quality of the banking sector will be felt only in a couple of quarters from now. Lenders and policymakers can apply learnings from the slowdown in the 1990s and in other countries to alleviate the pain of the slowdown.

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PUBLISHED BY ‘INDIA TIMES’

Posted in ASIA, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDIA, INDUSTRIAL PRODUCTION, INTERNATIONAL, THE FLOW OF INVESTMENTS | Leave a Comment »

BOEING SAYS CHINA NEEDS 3,710 PLANES OVER 20 YRS

Posted by Gilmour Poincaree on October 29, 2008

29 Oct, 2008, 1206 hrs IST, REUTERS

BEIJING: Boeing Co said on Wednesday that China will need 3,710 new commercial airplanes worth BOEING 747$390 billion over the next 20 years, maintaining its position as the world’s fastest growing aviation market.

China will account for 41 percent of the Asia-Pacific region’s airplane demand, Randy Tinseth, a Boeing vice president for marketing, said in a statement.

The mainland’s air travel and air cargo market growth will more than triple the country’s fleet to 4,560 airplanes by 2027, about the number of airplanes flying in Europe today, according to the statement.

The company said global demand for new commercial airplanes over the next two decades will total $3.2 trillion, or about 29,400 aircraft.

Single-aisle and intermediate twin-aisle planes will make up 91 per cent of China’s total demand in terms of value, while only a limited number of large airplanes (747-size and larger) will be needed.

China is the focus for Boeing and rival EADS’ Airbus unit, which has equally rosy forecasts for the mainland market as its booming economy demands more long-haul planes.

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PUBLISHED BY ‘INDIA TIMES’

Posted in AIR TRANSPORT INDUSTRY, ASIA, CHINA, COMMERCE, ECONOMY, INDUSTRIES, INTERNATIONAL | Leave a Comment »

LIMITLESS INVITES PHASE TWO BIDS (Dubai)

Posted by Gilmour Poincaree on October 29, 2008

Staff Report

Published: October 28, 2008, 23:32

Dubai: Limitless, Dubai-based master developer with Dh367 billion development portfolio, on Tuesday said it has invited construction firms to bid for the second phase of earthworks on Arabian Canal, its $11 billion (Dh41 billion) waterway that will reshape part of New Dubai and add a 75-kilometre long waterfront for real estate development.

The contract will involve the excavation of around 300 million cubic metres of earth along an 8.5 kilometre stretch of the canal’s route.

It follows the appointment last month of Abu Dhabi-based Tristar for phase one, where 100,000 cubic metres of earth is being moved each day and more than 200 million cubic metres will be excavated in total.

Ian Raine, who is the Project Director for Arabian Canal, said: “This is the second of around 10 packages that will be awarded for the excavation of our 75 kilometre waterway. Work is well underway on phase one.”

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PUBLISHED BY ‘GULFNEWS.COM’ (Dubai)

Posted in CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, INDUSTRIES, INTERNATIONAL, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS, UNITED ARAB EMIRATES | Leave a Comment »

THE ‘INDIAN POLITICAL BUSINESS COMPLEX’

Posted by Gilmour Poincaree on October 29, 2008

October 16, 2008

by Arjun Swarup @ – 10:32 pm

An article of mine got published on TCS Daily on the evolving political and business landscape in India. The article can be found here. The article is reproduced below as well –

The decade and a half following India’s economic reforms of 1990-91 has been an exciting and transformational one for India and its people, and has also had a significant impact on the entire world. Much good has happened, with increasing growth and prosperity benefiting millions. The world has observed the rise of a large and vibrant middle-class, an aggressive and innovative private sector, and the growth of a soft culture. It is true that severe challenges still remain, caused mainly by massive disparities in income and access to resources, which mean that over 300 million people remain desperately poor, and large parts of the country not benefiting from growth.

A lot of India’s growth and stability today has been credited to its overall political structure and institutions. This is what has kept the nation united through the numerous challenges it has faced, and continues to face. The federal nature of the government, coupled with the presence of an independent judiciary and a powerful media have all combined to create the unique phenomenon that is Indian democracy. There are notable flaws, such as weak law enforcement, and an excessive bureaucracy, but, for better or for worse, Indian democracy has worked.

However, over the past few years, a major development has occurred in India, almost silently, which illustrates the uglier side of this system. While the growth rates clocked by the economy over the years have been impressive, most of the major policy changes benefited big established business houses. This has resulted in the India of today being a highly oligarchic economy, with a relatively small population enjoying disproportionate power, wealth and influence (four of the world’s ten wealthiest individuals are from India). Actual market friendly policies, which would help the middle-class and poor by boosting entrepreneurship would often be to the detriment of this group, and are often inhibited. In the 1950’s, Eisenhower warned the Americans of a “military-industrial” complex which could skew American priorities. His fears might have been unfounded, or at the very least, quite exaggerated. However, India today does the face the danger of a political ? big business complex distorting its priorities.

This phenomenon was partly displayed during the debate over the Indo-US nuclear deal. A seemingly innocuous bilateral treaty, it created frenzied debate, polarized the polity and the nation, and forced the government through a no-confidence motion. To a complete outsider, it all seemed a lot of action for something which appeared quite routine. To Indians though, it all seemed wearingly familiar.

The nuclear deal holds many ramifications for India, and the general consensus amongst the scientific, business and intellectual community is that it would be beneficial, if negotiated properly. Power generation is one area where the deal is said to have probable benefits. India remains critically deficient in power generation, with large parts of the country, including metros, suffering from severe power shortages. This has had a major impact on the growth of small business units, especially in manufacturing.

Since nuclear energy can be used to generate power, it appears that the deal could help meet the shortage, and thus, presents a huge opportunity for big business houses. Each major political alliance in India has its support base comprised of various business houses, and each alliance feels the pressure to make sure the deal goes through when it is in power, to ensure the maximum benefit for its support base. Simultaneously, policy changes such as decentralizing power production, removing subsidies or limiting power theft are often prevented, as those would enable the entry of other players into the sectors. It is like a double whammy effect.

Two other areas where the impact of the political-business nexus can be seen are agriculture and retail. Organized retail presents a massive opportunity for India to broad base its growth, and help kick start the agriculture sector, with estimates ranging from $ 500 billion to over $ 1 trillion. A large amount of agricultural produce in India is wasted each year due to the lack of cold storage, to the tune of $ 7 billion. Investments, both foreign and domestic, should be welcomed in this sector, as well as initiatives to promote local small businesses. Yet, the whole sector has been dominated by big players, who would rather establish consolidated supply chain which would squeeze prices all along the retail chain.

On a broader governance level, the negative impact of the political business nexus can be observed. Running for public office in India is an incredibly expensive proposition and campaign financing remains murky, with virtually no accountability. This works perfectly to the advantage of the business lobbies, in exercising control over political parties. The labor market also remains highly informal and unorganized, as this keeps labor prices cheap. Another good example is the real estate sector, where acquisition of land for commercial or private purposes remains incredibly difficult, for businesses which want to establish themselves. It needs to be pointed out that these phenomena were not the creation of the big players today, but it works to their benefit today to ensure that the status quo remains.

It is entirely likely that the influence of this group would diminish with the passage of time, and that fears about it would prove unfounded (as some of Eisenhower’s were, in the case of the US). Yet, in the Indian context, there needs to be a greater awareness of the dangers posed by such developments, and how they could impact the overall growth story.

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PUBLISHED BY ‘THE INDIAN ECONOMY BLOG’ (INDIA)

Posted in ASIA, ECONOMY, INDIA, INTERNATIONAL | Leave a Comment »

SPEAKING FREELY – FORGET BUSH’S WARS AND WORK WITH ASIA

Posted by Gilmour Poincaree on October 29, 2008

Oct 24, 2008

by Zhiqun Zhu

John Hay, the 37th United States secretary of state, said in 1889, “The Mediterranean is the ocean of the past, the Atlantic, the ocean of the present, and the Pacific, the ocean of the future.”

The future is now. The “Asia-Pacific century” is not a prediction any more; it’s reality. Based on purchasing power parity, three of the four largest economies in the world are in Asia – China, Japan and India. And if the United States is included, then all the top four economies are in the Asia-Pacific region.

The United States has longstanding interests in Asia. Two of the world’s potentially most explosive places are located in East Asia: the Korean Peninsula and the Taiwan Strait, where the United States has significant economic, geopolitical and strategic interests. Since the end of World War II, the US has had extensive economic interactions with Asian nations. It played an instrumental role in Japan’s post-war recovery and the economic takeoff of the four Asian “tigers” – South Korea, Hong Kong, Singapore, and Taiwan. Since the early 1980s, China has also benefited enormously from America’s huge investment and its insatiable consumer market. It is not an exaggeration that East Asia is of critical importance to America’s future.

One wonders whether the fact that Asia has not been a major foreign policy issue in the 2008 US presidential election is good news or bad news. The new US president must move beyond President George W Bush’s preoccupation with the “war on terror” and pay more attention to Asia.

Mixed legacy

On the positive side, US alliances with Japan, South Korea and Australia remain strong. In the past eight years, Japan, South Korea and Australia all had leadership changes, and in Japan’s case there have been four different prime ministers. All these Asian leaders have firmly supported America’s “war on terror”. They have all visited Washington to show solidarity with Bush.

One of the rare bright spots in Bush’s foreign policy is China. A stable and strong relationship between the United States and China is probably Bush’s greatest foreign policy achievement. Bush and his family are now considered “friends” by the Chinese government and Bush’s decision to attend the Summer Olympic Games in Beijing, though controversial at home, was welcomed by China where members of the Bush family were warmly received.

Prodded by the United States, the new Kuomintang (KMT) government in Taiwan headed by Ma Ying-jeou has abandoned the pro-independence policies of his predecessor Chen Shui-bian and has endeavored to improve cross-strait relations. As a result, military conflict in the Taiwan Strait is becoming much less likely now.

However, Bush has also failed miserably in East Asia overall, most notably with regard to the unresolved issue of North Korea’s nuclear program. Opportunities to denuclearize North Korea have come and gone during the eight years of the Bush administration.

An agreed framework was reached between the US and North Korea in 1994. Denuclearization of the Korean Peninsula seemed to be within reach. President Bill Clinton sent his secretary of state Madeline Albright to North Korea in October 2000 to talk to North Korean leader Kim Jong-il directly. Clinton was even prepared to visit North Korea himself to improve relations.

After Bush came to office in January 2001, he refused to honor the 1994 agreement and rejected direct talks with North Korea directly. After the September 11, 2001, bombings he labeled North Korea as part of the “axis of evil”. North Korea was outraged and felt cornered; it hardened its position on the nuclear issue and decided to proceed with nuclear technology. Even many South Koreans felt offended: North Korea is poor, but it is not evil.

Eventually China launched the six-party talks in 2003. The US accepted this multilateral forum for discussion but still refused to deal with North Korea directly. After tough negotiations, North Korea finally agreed, in February 2007, to shut down its main nuclear reactor in exchange for food and aid from the other five parties.

In June 2008, North Korea blew up the cooling tower of its Yongbyon nuclear reactor and handed over to the US a declaration of its nuclear activities. However, by August, the US had not removed North Korea from the state sponsors of terrorism list, as it had promised earlier, while insisting that it wanted independent verification of North Korea’s nuclear disarmament. Accusing the US of breaking its promise, North Korea then announced it had suspended disabling its nuclear facilities.

In a dramatic development, on October 11, Bush decided to remove North Korea from the list of states that sponsor terrorism. This was an encouraging step, but it may have come too late.

As a result of Bush’s policies, the new US president will face several serious challenges in East Asia.

The immediate security challenge is a nuclear-capable North Korea. Recent reports about Kim Jong-il’s poor health added complexity and uncertainty to the nuclear issue and security in East Asia.

For Washington, the shortest diplomatic route to Pyongyang is through Beijing. China has a strong interest in preventing the nuclearization of the Korean Peninsula, in part because it does not want to give Japan an excuse to go nuclear.

North Korea has not accounted for dozens of Japanese citizens abducted by North Korean agents in the 1970s and 1980s, and the new US president needs to explain to Tokyo that as important as the matter is, it should not be linked to North Korea’s denuclearization. Japan can seek to resolve the abduction issue through other channels, preferably by engaging with North Korea directly. The United States must coordinate its policy closely with China and other nations in the region in order to break North Korea’s nuclear stalemate.

Asia also poses tough economic challenges to the new president. The US must become actively involved in economic integration with Asian nations, otherwise it risks being marginalized in Asia. It cannot afford to continue to stand on the sidelines as the 10-member Association of Southeast Asian Nations and northeast Asian nations discus a regional free-trade zone.

The United States had been the dominant economic power in Asia, but now China has become the largest trading partner of almost every country in Asia. Economically, the US is already playing second fiddle. Asian economies are some of the biggest holders of US Treasury bonds with Japan and China together holding about half of all Treasury bonds sold abroad.

China has become America’s third-largest export market after Canada and Mexico, and its foreign exchange reserve is quickly approaching US$2 trillion. The recent financial crisis in the US makes it imperative for the new president to work more closely with East Asian nations. Shortly after the US Congress passed the $700 billion financial rescue package in September, the People’s Bank of China (central bank) reportedly expressed interest in purchasing $200 billion worth of US Treasury bonds. Undoubtedly, East Asia will be part of the solution to the current financial problems in America.

The biggest challenge for the US and its new president is China. The challenge from the re-emerging power of the Middle Kingdom is on all fronts. China’s economy continues to gallop forward, despite the impact of the financial crisis in the West. For many developing countries, China’s development model, the so-called “Beijing Consensus” of economic liberalization under tight political control, offers an attractive alternative to the “Washington Consensus” of the US.

After Beijing passed the Olympic test with flying colors, and after Chinese astronauts successfully conducted their first space walk, the Chinese people have every reason to celebrate. As a result, nationalism has grown even stronger in China. Dealing with this increasingly powerful and proud nation of over 1.3 billion people is no easy task – and China-US relations have become increasingly complex.

From issues ranging from trade imbalances to independence protests in Tibet, the two countries have many differences. The recent US sale of $6.5 billion worth of weapons to Taiwan certainly does not bode well for bilateral ties. The rise of China – a nation that does not share core values with the United States – will be the most pressing foreign policy challenge for the next American president.

Bush has preferred unilateralism in foreign policy, and in Asia he has preferred strong bilateral alliances built upon historical ties with key allies. But this bilateral alliance structure is rooted in Cold War ideology and is outdated today. The new American president must go beyond unilateralism and bilateralism and move towards multilateralism on a wide range of issues.

In Asia, the new American president must be a uniter, not a divider. In addition to resolving North Korea’s nuclear dilemma, fighting infectious diseases, piracy on the high seas, global warming, and financial crises all require multilateral cooperation between the United States and the nations of Asia and the world.

Zhiqun Zhu, PhD, is MacArthur Chair in East Asian Politics and associate professor of political science and international relations at Bucknell University in Pennsylvania. He can be reached at zhiqun.zhu@bucknell.edu

(Copyright 2008 Zhiqun Zhu.)

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say.

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GUNFIRE BRINGS DOWN U.S. HELICOPTER IN AFGHANISTAN – Chopper crew rescued. Elsewhere, bomber kills two Americans

Posted by Gilmour Poincaree on October 28, 2008

Published on Tuesday, Oct 28, 2008

by Fisnik Abrashi – Associated Press

KABUL, AFGHANISTAN: Insurgents exchanged fire with U.S. troops aboard a Black Hawk helicopter in central Afghanistan on Monday before the aircraft was hit and forced to land. The crew was rescued, but in the north, a suicide bomber killed two U.S. soldiers.

Lt. Cmdr. Walter Matthews, a U.S. military spokesman, said there were no U.S. casualties as a result of the crash in a province neighboring Kabul.

“The helicopter crew exchanged fire with the enemy before the damage brought the helicopter down,” Matthews said.

At least four militants were killed in the exchange, said Fazel Karim Muslim, the chief of Sayed Abad district.

Another helicopter hovered as the U.S. troops secured the area around the downed chopper, which didn’t appear to sustain major damage, Muslim said.

The U.S. and other foreign forces rely heavily on helicopters for transportation around Afghanistan, which is covered by rough mountains and long stretches of desert and has few decent roads. Insurgents rarely bring down military helicopters, though they have hit several in recent years.

Wardak province has seen an increase in insurgent activity the last two years, and its main highway is now extremely risky to travel on, particularly at night. In mid-October, a U.S. Special Forces raid freed a kidnapped American working for the Army Corps of Engineers who had been held captive in Wardak for two months.

Also Monday, a suicide bomber wearing a police uniform blew himself up at a police station in northern Afghanistan, killing two American soldiers and wounding five other people, including an American, officials said.

The bomber entered a police station in Pul-e-Khumri, capital of Baghlan province, while Afghan officials were meeting with U.S. troops advising a police training program, provincial police chief Gen. Abdul Rahman Sayed Kheil said.

Meanwhile, the number of Afghans who think they are more prosperous today than under the Taliban regime has dropped significantly over the last two years, a U.S.-funded survey released today found.

More than half the Afghans surveyed in 2006 believed they were more prosperous than at any time under the hard-line Islamic regime’s rule in the late 1990s. But only 36 percent of 6,600 Afghans surveyed this year felt the same way.

The results mirror the deteriorating security and economic situation in the country.

KABUL, AFGHANISTAN: Insurgents exchanged fire with U.S. troops aboard a Black Hawk helicopter in central Afghanistan on Monday before the aircraft was hit and forced to land. The crew was rescued, but in the north, a suicide bomber killed two U.S. soldiers.

Lt. Cmdr. Walter Matthews, a U.S. military spokesman, said there were no U.S. casualties as a result of the crash in a province neighboring Kabul.

“The helicopter crew exchanged fire with the enemy before the damage brought the helicopter down,” Matthews said.

At least four militants were killed in the exchange, said Fazel Karim Muslim, the chief of Sayed Abad district.

Another helicopter hovered as the U.S. troops secured the area around the downed chopper, which didn’t appear to sustain major damage, Muslim said.

The U.S. and other foreign forces rely heavily on helicopters for transportation around Afghanistan, which is covered by rough mountains and long stretches of desert and has few decent roads. Insurgents rarely bring down military helicopters, though they have hit several in recent years.

Wardak province has seen an increase in insurgent activity the last two years, and its main highway is now extremely risky to travel on, particularly at night. In mid-October, a U.S. Special Forces raid freed a kidnapped American working for the Army Corps of Engineers who had been held captive in Wardak for two months.

Also Monday, a suicide bomber wearing a police uniform blew himself up at a police station in northern Afghanistan, killing two American soldiers and wounding five other people, including an American, officials said.

The bomber entered a police station in Pul-e-Khumri, capital of Baghlan province, while Afghan officials were meeting with U.S. troops advising a police training program, provincial police chief Gen. Abdul Rahman Sayed Kheil said.

Meanwhile, the number of Afghans who think they are more prosperous today than under the Taliban regime has dropped significantly over the last two years, a U.S.-funded survey released today found.

More than half the Afghans surveyed in 2006 believed they were more prosperous than at any time under the hard-line Islamic regime’s rule in the late 1990s. But only 36 percent of 6,600 Afghans surveyed this year felt the same way.

The results mirror the deteriorating security and economic situation in the country.

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ENVIRONMENTAL FAILURE: A CASE FOR A NEW GREEN POLITICS – A spectre is haunting American environmentalism, says James Gustave Speth, the spectre of failure. From Yale Environment360*

Posted by Gilmour Poincaree on October 28, 2008

Tuesday October 21 2008 17.46 BST

The US environmental movement is failing – by any measure, the state of the earth has never been more dire. What’s needed, a leading environmentalist writes, is a new, inclusive green politics that challenges basic assumptions about consumerism and unlimited growth.

All of us who have been part of the environmental movement in the United States must now face up to a deeply troubling paradox: Our environmental organizations have grown in strength and sophistication, but the environment has continued to go downhill, to the point that the prospect of a ruined planet is now very real. How could this have happened?

Before addressing this question and what can be done to correct it, two points must be made. First, one shudders to think what the world would look like today without the efforts of environmental groups and their hard-won victories in recent decades. However serious our environmental challenges, they would be much more so had not these people taken a stand in countless ways. And second, despite their limitations, the approaches of modern-day environmentalism remain essential: Right now, they are the tools readily at hand with which to address many pressing problems, including global warming and climate disruption. Despite the critique of American environmentalism that follows, these points remain valid.

Lost ground

The need for appraisal would not be so urgent if environmental conditions were not so dire. The mounting threats point to an emerging environmental tragedy of unprecedented proportions.

Half the world’s tropical and temperate forests are now gone. The rate of deforestation in the tropics continues at about an acre a second, and has for decades. Half the planet’s wetlands are gone. An estimated 90 percent of the large predator fish are gone, and 75 percent of marine fisheries are now overfished or fished to capacity. Almost half of the corals are gone or are seriously threatened. Species are disappearing at rates about 1,000 times faster than normal. The planet has not seen such a spasm of extinction in 65 million years, since the dinosaurs disappeared. Desertification claims a Nebraska-sized area of productive capacity each year globally. Persistent toxic chemicals can now be found by the dozens in essentially each and every one of us.

The earth’s stratospheric ozone layer was severely depleted before its loss was discovered. Human activities have pushed atmospheric carbon dioxide up by more than a third and have started in earnest the most dangerous change of all — planetary warming and climate disruption. Everywhere, earth’s ice fields are melting. Industrial processes are fixing nitrogen, making it biologically active, at a rate equal to nature’s; one result is the development of hundreds of documented dead zones in the oceans due to overfertilization. Freshwater withdrawals are now over half of accessible runoff, and water shortages are multiplying here and abroad.

The United States, of course, is deeply complicit in these global trends, including our responsibility for about 30 percent of the carbon dioxide added thus far to the atmosphere. But even within the United States itself, four decades of environmental effort have not stemmed the tide of environmental decline. The country is losing 6,000 acres of open space every day, and 100,000 acres of wetlands every year. About a third of U.S. plant and animal species are threatened with extinction. Half of U.S. lakes and a third of its rivers still fail to meet the standards that by law should have been met by 1983. And we have done little to curb our wasteful energy habits or our huge population growth.

Here is one measure of the problem: All we have to do to destroy the planet’s climate and biota and leave a ruined world to our children and grandchildren is to keep doing exactly what we are doing today, with no growth in human population or the world economy. Just continue to generate greenhouse gases at current rates, just continue to impoverish ecosystems and release toxic chemicals at current rates, and the world in the latter part of this century won’t be fit to live in. But human activities are not holding at current levels – they are accelerating, dramatically.

The size of the world economy has more than quadrupled since 1960 and is projected to quadruple again by mid-century. It took all of human history to grow the $7 trillion world economy of 1950. We now grow by that amount in a decade.

The escalating processes of climate disruption, biotic impoverishment, and toxification, which continue despite decades of warnings and earnest effort, constitute a severe indictment of the system of political economy in which we live and work. The pillars of today’s capitalism, as they are now constituted, work together to produce an economic and political reality that is highly destructive environmentally.

Powerful corporate interests whose overriding objective is to grow by generating profit (including profit from avoiding the environmental costs their companies create, amassing deep subsidies and benefits from government, and continued deployment of technologies originally designed with little or no regard for the environment); markets that systematically fail to recognize environmental costs unless corrected by government; government that is subservient to corporate interests and the growth imperative; rampant consumerism spurred by sophisticated advertising and marketing; economic activity now so large in scale that its impacts alter the fundamental biophysical operations of the planet — all combine to deliver an ever-growing world economy that is undermining the ability of the earth to sustain life.

Are environmentalists to blame?

In assigning responsibility for environmental failure, there are many places to lay blame: the rise of the modern, anti-government right in American politics; a negligent media; the deadening complexity of today’s environmental issues and programs, to mention the most notable. But a number of observers have placed much of the blame for failure on the leading environmental organizations themselves.

For example, Mark Dowie in his 1995 book Losing Ground notes that the national environmental organizations crafted an agenda and pursued a strategy based on the civil authority and good faith of the federal government. “Therein,” he believes, “lies the inherent weakness and vulnerability of the environmental movement. Civil authority and good faith regarding the environment have proven to be chimeras in Washington.” Dowie argues that the national environmental groups also “misread and underestimate[d] the fury of their antagonists.”

The mainstream environmental organizations were challenged again in 2004 in the now-famous The Death of Environmentalism. In it, Michael Shellenberger and Ted Nordhaus write that America’s mainstream environmentalists are not “articulating a vision of the future commensurate with the magnitude of the crisis. Instead they are promoting technical policy fixes like pollution controls and higher vehicle mileage standards — proposals that provide neither the popular inspiration nor the political alliances the community needs to deal with the problem.”

Shellenberger and Nordhaus believe environmentalists don’t recognize that they are in a culture war — a war over core values and a vision for the future.

These criticisms and others stem from the fundamental decision of today’s environmentalism to work within the system. This core decision grew out of the successes of the environmental community in the 1970s, which seemed to confirm the correctness of that approach. Our failure to execute a dramatic mid-course correction when circumstances changed can be seen in hindsight as a major blunder.

Here is what I mean by working within the system. When today’s environmentalism recognizes a problem, it believes it can solve that problem by calling public attention to it, framing policy and program responses for government and industry, lobbying for those actions, and litigating for their enforcement. It believes in the efficacy of environmental advocacy and government action. It believes that good-faith compliance with the law will be the norm, and that corporations can be made to behave and will increasingly weave environmental objectives into their business strategies.

Today’s environmentalism tends to be pragmatic and incrementalist — its actions are aimed at solving problems and often doing so one at a time. It is more comfortable proposing innovative policy solutions than framing inspirational messages. These characteristics are closely allied to a tendency to deal with effects rather than underlying causes. Most of our major environmental laws and treaties, for example, address the resulting environmental ills much more than their causes. In the end, environmentalism accepts compromises as part of the process. It takes what it can get.

Today’s environmentalism also believes that problems can be solved at acceptable economic costs — and often with net economic benefit — without significant lifestyle changes or threats to economic growth. It will not hesitate to strike out at an environmentally damaging facility or development, but it sees itself, on balance, as a positive economic force.

Environmentalists see solutions coming largely from within the environmental sector. They may worry about the flaws in and corruption of our politics, for example, but that is not their professional concern. That’s what Common Cause or other groups do. Similarly, environmentalists know that the prices for many things need to be higher, and they are aware that environmentally honest prices would create a huge burden on the half of American families that just get by. But universal health care and other government action needed to address America’s gaping economic injustices are not seen as part of the environmental agenda.

Today’s environmentalism is also not focused strongly on political activity or organizing a grassroots movement. Electoral politics and mobilizing a green political movement have played second fiddle to lobbying, litigating, and working with government agencies and corporations.

A central precept, in short, is that the system can be made to work for the environment. In this frame of action, scant attention is paid to the corporate dominance of economic and political life, to transcending our growth fetish, to promoting major lifestyle changes and challenging the materialistic values that dominate our society, to addressing the constraints on environmental action stemming from America’s vast social insecurity and hobbled democracy, to framing a new American story, or to building a new environmental politics.

Not everything, of course, fits within these patterns. There have been exceptions from the start, and recent trends reflect a broadening in approaches. Greenpeace has certainly worked outside the system, the League of Conservation Voters and the Sierra Club have had a sustained political presence, groups like the Natural Resources Defense Council and the Environmental Defense Fund have developed effective networks of activists around the country, the World Resources Institute has augmented its policy work with on-the-ground sustainable development projects, and environmental justice concerns and the emerging climate crisis have spurred the proliferation of grassroots efforts, student organizing, and community and state initiatives.

But organizations that were built to litigate and lobby for environmental causes or to do sophisticated policy studies are not necessarily the best ones to mobilize a grassroots movement or build a force for electoral politics or motivate the public with social marketing campaigns. These things need to be done, and to get them done it may be necessary to launch new organizations and initiatives with special strengths in these areas.

The methods and style of today’s environmentalism are not wrongheaded, just far, far too restricted as an overall approach. The problem has been the absence of a huge, complementary investment of time, energy, and money in other, deeper approaches to change. And here, the leading environmental organizations must be faulted for not doing nearly enough to ensure these investments were made.

America has run a 40-year experiment on whether this mainstream environmentalism can succeed, and the results are now in. The full burden of managing accumulating environmental threats has fallen to the environmental community, both those in government and outside. But that burden is too great. The system of modern capitalism as it operates today will continue to grow in size and complexity and will generate ever-larger environmental consequences, outstripping efforts to cope with them. Indeed, the system will seek to undermine those efforts and constrain them within narrow limits. Working only within the system will, in the end, not succeed — what is needed is transformative change in the system itself.

Environmental protection requires a new politics

This new politics must, first of all, ensure that environmental concern and advocacy extend to the full range of relevant issues. The environmental agenda should expand to embrace a profound challenge to consumerism and commercialism and the lifestyles they offer, a healthy skepticism of growthmania and a redefinition of what society should be striving to grow, a challenge to corporate dominance and a redefinition of the corporation and its goals, a commitment to deep change in both the functioning and the reach of the market, and a powerful assault on the anthropocentric and contempocentric values that currently dominate.

Environmentalists must also join with social progressives in addressing the crisis of inequality now unraveling America’s social fabric and undermining its democracy. It is a crisis of soaring executive pay, huge incomes, and increasingly concentrated wealth for a small minority, occurring simultaneously with poverty near a 30-year high, stagnant wages despite rising productivity, declining social mobility and opportunity, record levels of people without health insurance, failing schools, increased job insecurity, swelling jails, shrinking safety nets, and the longest work hours among the rich countries. In an America with such vast social insecurity, economic arguments, even misleading ones, will routinely trump environmental goals.

Similarly, environmentalists must join with those seeking to reform politics and strengthen democracy. What we are seeing in the United States is the emergence of a vicious circle: income disparities and influence to wealthy constituencies and large businesses, which further imperils the potential of the democratic process to act to correct the growing income disparities. Corporations have been the principal economic actors for a long time; now they are the principal political actors as well. Neither environment nor society fares well under corporatocracy. Environmentalists need to embrace public financing of elections, regulation of lobbying, nonpartisan Congressional redistricting, and other political reform measures as core to their agenda. Today’s politics will never deliver environmental sustainability.

The current financial crisis and, at this writing, the response to it, reveal a system of political economy that is profoundly committed to profits and growth and profoundly indifferent to people and society. This system is at least as indifferent to its impacts on nature. Left uncorrected, it is inherently ruthless and rapacious, and it is up to citizens, acting mainly through government, to inject values of fairness and sustainability into the system. But this effort commonly fails because progressive politics are too enfeebled and Washington is increasingly in the hands of powerful corporate interests and concentrations of great wealth. The best hope for real change in America is a fusion of those concerned about environment, social justice, and strong democracy into one powerful progressive force.

The new environmentalism must work with this progressive coalition to build a mighty force in electoral politics. This will require major efforts at grassroots organizing; strengthening groups working at the state and community levels; and developing motivational messages and appeals — indeed, writing a new American story, as Bill Moyers has urged. Our environmental discourse has thus far been dominated by lawyers, scientists, and economists. Now, we need to hear a lot more from the poets, preachers, philosophers, and psychologists.

James Gustave Speth is author of The Bridge at the End of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability and dean of the Yale University School of Forestry & Environmental Studies. He co-founded the Natural Resources Defense Council in 1970, served as chair of the Council on Environmental Quality in the Carter Administration, and in 1982 founded the World Resources Institute, where he served as president until 1992.

* (environment360 part of the Guardian Environmental Network guardian.co.uk)

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SARAH PALIN’S ALASKAN WASTELAND – The New Republic: A Look At Governor Palin’s Environmental Record

Posted by Gilmour Poincaree on October 28, 2008

Oct. 10, 2008

(The New Republic) This column was written by Sheila Kaplan and Marilyn Berlin Snell.

There’s no reason to doubt Sarah Palin’s sincerity when she talks about her commitment to family In this undated photo provided by Coeur Alaska, shown is the entrance tunnel and water treatment facility for the Kensington Gold Mine against Lion Head Mountain near Juneau, Alaska. Seven Alaska Native village corporations have signed a resolution supporting the Southeast Alaska Conservation Council, one of three environmental groups who sued the U.S. Army Corps of Engineers over permits issued to the mine, which is slated to begin operations in late 2007 - AP Photo and -more specifically -special-needs kids. When she introduced her son, who has Down syndrome, to the audience at the Republican convention, the family tableau drew cheers. And she issued a promise. “To the families of special-needs children all across this country, I have a message for you,” she told the crowd. “For years, you’ve sought to make America a more welcoming place for your sons and daughters, and I pledge to you that, if we are elected, you will have a friend and advocate in the White House.”

Unfortunately, as governor of a state with a birth-defect rate that’s twice the national average, and which has the gloomy status as repository of toxic chemicals from around the world, Palin has pursued environmental policies that seem perfectly crafted to swell the ranks of special-needs kids. It’s true that Alaska’s top leaders have placed industry wishes over environmental protection for years. But, instead of correcting this problem, she’s compounded it. Peer into her environmental record, and Palin ends up looking a lot like George W. Bush.

In the past 20 years, research has shown that exposure to some metals and to chemicals such as pesticides, flame retardants, and polychlorinated biphenyls (PCBs) can cause birth defects and permanent developmental disorders both prenatally and in the first years of childhood. And Alaska is vulnerable to some of the worst environmental pollutants out there. In a state whose wealth depends on the exploitation of its natural resources, the toxic byproducts of mining and energy development, such as arsenic, mercury, and lead, are particular problems. Alaska Natives, such as the Inuit people, ANCHORAGE, Alaska - Reuters - Alaskan beluga whales listed as endangered, Sarah Palin disagrees. The depleted population of beluga whales that swim off the coast of Alaska's largest city was listed as endangered on Friday by the federal government. Alaska Gov. Sarah Palin, the Republican vice-presidential candidate, called the listing 'premature' after she had pressed for more time to make beluga population counts - CLICK ON THE PHOTO FOR THE FULL ARTICLEeat a diet that is heavy in fish, seals, and whales – animals that are high on the food chain and therefore more likely to be contaminated with high doses of PCBs and mercury. And the state is vulnerable not only to homegrown pollution, but also to industrial pollution: Trace gases and tiny airborne particles are contaminating the polar regions, carried there on atmospheric and oceanic currents, according to the National Oceanic and Atmospheric Administration.

The mess of pollutants in Alaska has clearly taken its toll. In general, the state has double the national average of birth defects. While the causes are unknown, environmentalists point to the region that includes the North Slope, an area slightly larger than Minnesota, where most of Alaska’s oil is produced. The byproducts of oil production can cause serious nervous system disorders, and the North Slope and its environs, home to Alaska Natives and itinerant oil workers, has the highest prevalence of birth defects in the state – 11 percent – compared with 6 percent statewide and 3 percent nationwide.

Palin, however, has not addressed these concerns. Her administration irked environmentalists in February 2008, when it opposed legislation that would have given parents at least 48 hours’ notice before schools were to be sprayed with pesticides and other toxic chemicals. Currently, parents get 24 hours, which the bill’s proponents say is not sufficient for parents who want to arrange to keep kids SARAH PALINout of school for a few days after the chemicals are applied. Palin’s administration argued that the bill was too restrictive and would force schools to notify parents before cleaning toilets with disinfectant – which, supporters say, is not true. In the same month, members of Palin’s administration testified against language in legislation that would have banned polybrominated diphenyl ethers – a flame retardant that, studies show, harms the developing brain.

Then, in the summer of 2007, Palin allowed oil companies to move forward with a toxic-dumping plan in Alaska’s Cook Inlet, the only coastal fishery in the nation where toxic dumping is permitted. The Bush administration initially OK’d the companies’ request to increase toxic releases, but the permits could not be issued without Alaska’s certification that the discharges met the state’s water-quality standards, says Bob Shavelson, executive director of Cook Inletkeeper, an organization founded to protect the area’s watershed. Palin complied. “Palin’s Department of Environmental Conservation issued that certification [based on] the long-discounted notion that ‘dilution is the solution to pollution’ – turning the federal Clean Water Act on its head and actually increasing toxic pollution,” Shavelson says.

Palin next took on the Clean Water Initiative, also known as Proposition 4, which appeared on the Alaska ballot on August 26. The measure would have limited the runoff of toxic metals – known to cause developmental and birth defects, according to the Centers for Disease Control and Prevention – from all mining operations, but it was aimed at stopping the proposed Pebble Mine, a huge mining proposal that was controversial for its potential impact on Bristol Bay, the world’s largest commercial wild salmon fishery (for which Palin’s oldest daughter was named). The project had been in the works for years, and, when she ran for governor in 2006, Palin told the Alaska Journal of Commerce that, if the mine was green-lighted, “there will be remediation from now to eternity.” Once in office, though, environmental concerns took a backseat. In a TV interview six days before the vote, Palin said, “Let me take my governor’s hat off for just a minute, and tell you personally, Prop 4 – I vote no on that.” Alaska’s mining industry parlayed Palin’s face and words into an advertising blitz – and came from behind to defeat it.

Palin’s latest anti-environmental effort also came in August, when she attempted to block California’s plan to curb its air pollution. The Golden State is trying to reduce its toxic emissions with a port fee that would pay for pollution-reduction projects around the state. Arguing that it would hurt Alaska’s economy, Palin asked California Governor Arnold Schwarzenegger to veto the proposed legislation.

Finally, Palin was pushed by environmental activists and Alaska Natives to pressure the military in its cleanup of one of the most contaminated sites in Alaska–but the state didn’t act. This was on the old Northeast Cape Air Force base on remote St. Lawrence Island in the Bering Sea – one of the state’s closest spots to Russia. When the military closed its operations in the 1970s, it left thousands of barrels of toxic waste, containing solvents, fuels, heavy metals, pesticides, and PCBs, a group of toxic organic chemicals that have persisted in the environment. For the past few years, the Army Corps of Engineers has been slowly cleaning up parts of the site and claims it will leave it safe. (One federally funded study still in progress by the state’s premier watchdog on chemical pollutants, Alaska Community Action on Toxics (ACAT), tested the local water and got a reading that was more than one thousand times the level that the EPA considers safe. “If the Corps of Engineers want to fill up their canteens in there, they are welcome to it,” says Kathrine Springman, the toxicologist who did that study. “Actually, I wouldn’t want them to drink it … anymore than I would ask them to drink Drano.”)

But critics say the Army is taking too long, and that its plan will leave too many untreated chemicals, PCBs in particular, at the site. According to Pamela Miller, ACAT’s executive director, Palin should have used her powers as governor to forge a better cleanup plan. “Certainly this was also a pattern in the Murkowski administration, but, under Palin, it’s gotten worse,” she said. “Her administration has done nothing to work with the military to avoid possible contamination.” Scientists have also opposed the Army’s plan, saying it will leave the area dangerous.

Supporters note that Palin did boost school spending for children with the most severe disabilities, but, in general, the Alaskan government under Palin has done nothing to protect those children and future generations from the toxic stew that the state has become. “She doesn’t have a good understanding of the science,” says Ruth Etzel, who until recently was research director at the Alaska Native Medical Program in Anchorage. “What she tends to do is talk about personal responsibility as the key to good health.”

Andrea Doll, a Democratic state representative from Juneau, says she tried to get Palin interested in her bill on flame retardants early on: “I told her about the bill. She totally was not interested in any way, shape, or form. It was that look on her face – that ‘don’t even go there’ look.

by Sheila Kaplan and Marilyn Berlin Snell

Reprinted with permission from The New Republic.

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PUBLISHED BY ‘CBS NEWS’ (USA)

Posted in ELECTIONS 2008 - USA, ENVIRONMENT, USA | Leave a Comment »

ESPECTACULAR CRECIMIENTO DEL SECTOR DE LOS ACEITES VEGETALES PARA LA PRÓXIMA DÉCADA, SEGÚN ESTIMACIONES COMUNITARIAS

Posted by Gilmour Poincaree on October 28, 2008

28/10/2008

El sector de los aceites vegetales es el que puede tener un mayor crecimiento en la próxima década dentro de todos los sectores agrarios, de acuerdo con las estimaciones OECD-FAO y FAPRI, recogidas en la última actualización del informe las previsiones de los mercados agrarios hasta el 2017 publicadas por la Comisión Europea. Las estimaciones de consumo son optimistas, con un crecimiento esperado del 56-62% en 2008-2017 en relación con la década precedente. Este aumento se debe a una mayor demanda de alimentos, especialmente creciente en los países en desarrollo. La demanda de biodiésel supone un tercio de este crecimiento.

Las previsiones de precio apuntan a un crecimiento entre 87-132% en el período de estudio. Según FAPRI, habría un importante aumento del valor de los aceites comparado con el de las tortas, alcanzando un factor de 4,5 en 2017. OECD-FAO prevé un crecimiento más moderado, en línea con el ratio de la década anterior.

Argentina se consolida como exportador líder de aceite de soja, con un 30% de las exportaciones netas, a expensas de Brasil y de EEUU, según FAPRI. El aceite de palma seguirá siendo el aceite más consumido a nivel mundial. Malasia e Indonesia podrían aumentar sus exportaciones en un tercio, hasta los 5 millones de toneladas cada uno, de 2008 a 2017.

La UE rebasará a China como primer consumidor e importador de aceites. Para 2017 es previsible que la UE casi doble sus importaciones de 9 a 15 millones de toneladas (estimaciones OECD-FAO).

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Posted in AGRICULTURE, ARGENTINA, ASIA, CHINA, COMMERCE, COMMODITIES MARKET, ECONOMY, EUROPE, INTERNATIONAL, SOUTH AMERICA, SPAIN, VEGETABLE OILS | Leave a Comment »

MEGABANKS TO RAISE CAPITAL AMID STOCK PLUNGE (Japan)

Posted by Gilmour Poincaree on October 28, 2008

The Asahi Shimbun – 2008/10/28

Once seen as the saviors of struggling foreign financial institutions, Japanese megabanks now plan to prop up their own financial bases to avoid disaster from the recent plunges of stock prices.

Mitsubishi UFJ Financial Group Inc. (MUFG) on Monday announced plans to increase its capital by 990 billion yen through measures including the issuing of new shares. Sumitomo Mitsui Financial Group Inc. (SMFG) is mulling a maximum 500-billion-yen increase.

Mizuho Financial Group Inc. is likely to follow suit.

Until recently, Japanese megabanks were believed to have staved off serious damage from the U.S. subprime loan crisis and were in a position to provide capital for their less-fortunate counterparts in the United States and Europe.

Earlier this year, Mizuho Corporate Bank invested $1.2 billion (about 113 billion yen) in Merrill Lynch of the United States, while Sumitomo Mitsui Banking Corp. injected 500 million pounds (about 75 billion yen) to Barclays plc of Britain.

However, the fallout from the financial crisis has hit home, as the Nikkei 225 index continues to fall to its lowest level in years, greatly reducing the value of the stocks these banks own.

MUFG had already seen its capital-to-asset ratio drop from 11.19 percent at the end of March to 10.73 percent at the end of June.

The group also expects to suffer from increased costs to write off bad loans for the current fiscal year ending in March 2009, while its latent losses are expanding because of the declining value of the stocks it holds.

MUFG’s $9 billion investment in Morgan Stanley this month also made it necessary for the group to strengthen its financial base.

The group plans to issue new common shares worth up to 600 billion yen and allocate noncovertible preferred shares worth 390 billion yen to designated domestic institutional investors.

If 990 billion yen is raised, the group’s capital-adequacy ratio will rise by 0.9 percentage point.

Likewise, SMFG faces the risk of its capital-to-asset ratio falling sharply. At the end of June, the ratio was 10.35 percent.

The financial group is also expected to suffer from higher costs to write off bad loans for smaller companies, to which the group had loaned heavily, and a decreased value of its shareholdings.

As SMFG’s own share price has fallen below half of this year’s peak, the group will likely combine the issue of preferred shares to life insurance companies with other measures.

The Mizuho Financial Group had originally planned to buy back about 400 billion yen worth of its own shares by March 2009. Now, it is considering postponing the buyback of about 250 billion yen of those shares.

Buying back its own shares would benefit shareholders because it helps raise the stock price. But the measure would also lead to a decrease in the group’s own capital.(IHT/Asahi: October 28,2008)

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PUBLISHED BY ‘THE ASAHI SHIMBUN’ (Japan)

Posted in ASIA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, JAPAN, THE FLOW OF INVESTMENTS | Leave a Comment »

US TROOPS ENTER SYRIA, KILL 8 CIVILIANS

Posted by Gilmour Poincaree on October 28, 2008

Number 3255 – Tue, Oct 28, 2008 – Aban 07 1387- Shavval 28 1429

American helicopter-borne troops from Iraq launched an assault on Sunday on a building in a Syrian A survivor of the US military attack on the Syrian village of Al-Sukkiraya on Oct. 26border village, killing eight civilians, official Syrian media reported.
“Four American helicopters violated Syrian airspace around 16:45 local time (1345 GMT) on Sunday. They penetrated eight kilometers (into Syria,“ official Syrian media said, AFP reported.
“American soldiers“ who had emerged from helicopters “attacked a civilian building under construction and fired at workmen inside, causing eight deaths,“ reports said. SANA named the dead and said they were a father and his four children, a couple and another man.
“The helicopters then left Syrian territory towards Iraqi territory,“ it said.
The news agency said one person was also wounded in the attack on the village of Al-Sukkiraya, around 550 kilometers northeast of the capital in the Abu Kamal area.
Earlier, the private television channel Al-Dunia said nine civilians had been killed in the attack. The raid appears to have been the first of its type into Syrian territory.
A US military official in Washington confirmed Sunday that special forces had conducted a raid in Syria that targeted the network of Al-Qaeda-linked foreign fighters moving through Syria into Iraq.
“We are taking matters into our own hands,“ the official told The Associated Press, speaking on condition of anonymity because of the political sensitivity of cross-border raids.

Envoys Summoned

Syria summoned the US and Iraqi envoys to Damascus to protest against what it called a US military attack and to demand that Iraq prevent US forces from “launching aggression against Syria“ from its territory, official media said.
“Syria condemns and denounces this act of aggression and US forces will bear the responsibility for any consequences,“ SANA quoted an unidentified official as saying.
“Syria also demands that the Iraqi government accept its responsibilities and launch an immediate inquiry following this dangerous violation and forbids the use of Iraqi territory to launch attacks on Syria,“ it said. “We are in the process of investigating this“ reported attack, Sergeant Brooke Murphy, a US military spokeswoman, told AFP in Baghdad.
In Washington, a Pentagon spokesman declined to comment. Commander Darryn James told AFP that there was “no response“ from the US Department of Defense about the Syrian reports.
The Iraqi Defense Ministry also refused to comment, on the grounds the incident took place inside Syria.
Syria’s first ambassador to Iraq in 26 years took up his post in Baghdad this month, marking the official end of more than two decades of icy relations.

In Desperation

Syria called the raid a “serious aggression,“ and its Foreign Ministry summoned the charges d’affaires Syrians mourn next the bodies of their relatives who were killed in a deadly US military attack on the village of Sukkiraya, on the Syria-Iraq border, Oct. 27of the United States and Iraq in protest.
Syrian parliament member Suleiman Hadad called the raid “a last-ditch hit by the defeated and desperate“ Bush administration, which is trying to “restore some of its lost dignity in the region.“
Government newspapers also published scathing criticisms in Monday’s editions. Tishrin splashed its front pages with a headline denouncing the raid as a “US war crime,“ while the Al-Baath newspaper described the attack in an editorial as a “stunning, shocking and unprecedented adventure.“
“Even while it’s preparing itself to leave the White House, the Bush administration seems determined to demonstrate its foolishness, and this is a dangerous indication of political madness and stupid arrogance,“ Al-Baath said.
Iran also condemned the attack, while Iraqi officials said they hoped the raid would not harm their relations with Syria.
“We are trying to contain the fallout from the incident,“ Iraqi Foreign Ministry undersecretary Labib Abbawi said. “It is regrettable and we are sorry it happened.“
Some Iraqi officials warned that the US military raid into Syria could be used by opponents of a security pact under negotiation with the United States.
“Now neighboring countries have a good reason to be concerned about the continued US presence in Iraq,“ prominent Kurdish politician Mahmoud Othman said.

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PUBLISHED BY ‘IRAN DAILY’

Posted in INTERNATIONAL, IRAN, MIDDLE EAST, SYRIA, USA, WARS AND ARMED CONFLICTS | Leave a Comment »

IRAN CONDEMNS US ATTACK ON SYRIA

Posted by Gilmour Poincaree on October 28, 2008

News numbre: 8708061469 19:01 | 2008-10-27

TEHRAN (FNA) – Iranian Foreign Ministry Spokesman Hassan Qashqavi condemned a recent US attack Iranian Foreign Ministry Spokesman Hassan Qashqavion Syria which killed nine civilians and injured 19 others.

“During the US choppers attacks on civilian Syrian people on Sunday, a lot of innocent people were killed, again so many of them were children and also a large number of the member of one family,” Qashqavi told reporters at his weekly press conference in Tehran Monday.

Qashqavi told reporters on Monday that a violation of the territorial integrity of any sovereign state is unacceptable.

“We actually condemn any attack which violates national sovereignty of countries and leads to the killing of innocent people. Such invasions are unacceptable.”

US commandoes in four helicopters on Sunday attacked a civilian building under construction shortly before sundown in al-Sukkariya farm near the town of Abu Kamal, some eight kilometers from the Iraqi border.

The attacks killed nine civilians including four children and their parents and wounded 19 others.

The helicopters reportedly left Syrian space with all the troops again on board.

A US military official earlier admitted to the raid in Syria, but alleged that special forces conducted a raid targeting the network of al-Qaida-linked foreign fighters moving through Syria into Iraq.

Local witnesses said they believed the blast was caused by American shelling.

Syria’s deputy foreign minister has summoned the chargé d’affaires from the American and Iraqi Embassies in protest.

Syria’s state-run media intensified its criticism of the United States on Monday, with the government newspaper Tishrin accusing American forces of committing “a war crime”.

The United States is trying to negotiate a strategic agreement with Iraq that would allow American troops to remain in the country and carry out military operations.

If ratified by the Iraqi government, the Status of Forces Agreements (SOFA) would also grant US forces in Iraq immunity from prosecution.

It also gives the occupation forces a free rein to stage military operations wherever and whenever they deem necessary, without consulting the Iraqi government.

The pact faces strenuous opposition from neighboring countries, especially Syria and Iran, because of fears that the United States might use Iraqi territory to carry out attacks on them.

The United States has no diplomatic relations with Iran and has withdrawn its ambassador to Syria.

The proposed pact is also facing widespread opposition among Iraqi people and politicians.

Many fear Washington has plans to keep permanent bases, despite a denial of any such plan written into the proposal. Iraqis say the drafts submitted by the Americans thus far would infringe on Iraq’s sovereignty by giving US forces too much freedom to operate.

The security pact also faces strong criticism from members of al-Maliki’s own coalition. Two Iraqi officials familiar with the negotiations have warned that a deal is unlikely to be reached before the end of President Bush’s term in January unless Washington backs off some demands seen as giving American forces too much freedom to operate in Iraq and infringing on Iraqi sovereignty.

Iraq’s parliament must approve the deal, and the two officials said opposition in the legislature was so widespread that it stood no chance of winning approval without significant changes in the US position. The officials spoke on condition of anonymity because of the secrecy surrounding the negotiations.

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PUBLISHED BY ‘FARS NEWS AGENCY’ (Iran)

Posted in IRAN, SYRIA, USA, WARS AND ARMED CONFLICTS | Leave a Comment »

KOREAN BANK CUTS RATES AGAIN AS SHAREMARKET SHEDS VALUE

Posted by Gilmour Poincaree on October 28, 2008

4:00AM Tuesday Oct 28, 2008

SEOUL – South Korea’s central bank slashed its key interest rate yesterday for the second time this BANK OF KOREA IN SEOULmonth in a bid to boost the economy and stock market amid the global financial crisis.

The Bank of Korea said it had lowered its benchmark seven-day repurchase rate from 5 per cent to 4.25 per cent.

The decision came as South Korean markets suffer due to the world financial turmoil. The country’s benchmark stock index lost one-fifth of its value last week, its worst weekly performance on record. The won currency has fallen sharply.

The Korea Composite Stock Price Index, which had fallen in early trading, rose as much as 2.9 per cent after the decision was announced.

Yesterday’s decision came at a rare interim policy meeting and follows acut of a quarter percentage point at a regular policy meeting this month.

It was the second unscheduled meeting for the bank since its current policy was established in 1998. The previous one came after the 9/11 terrorist attacks in the United States when the bank cut its key rate by half a percentage point.

The bank announced on Friday that South Korean economic growth slowed in the third quarter to 3.9 per cent, as construction contracted and the global slowdown hit manufacturing and exports. It was the worst performance by Asia’s fourth-largest economy since the second quarter of 2005, when it expanded 3.4 per cent.

The slowdown comes as the global financial crisis sends shockwaves through world markets and threatens to drag major economies into recession.

– AP

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PUBLISHED BY ‘THE NEW ZEALAND HERALD’

Posted in ASIA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, SOUTH KOREA, THE FLOW OF INVESTMENTS | Leave a Comment »

FPL GROUP REPORTS HIGHER PROFITS (USA)

Posted by Gilmour Poincaree on October 27, 2008

Monday, October 27, 2008 – 9:11 AM – Modified: 12:42 PM

South Florida Business Journal

FPL Group on Monday reported higher third quarter next income, along with plans to reduce capital expenditures by $1.7 billion next year, a result of the economic downturn.

About $1.3 billion of the reduction involves the deferral of new project development including wind energy projects.

The company’s (NYSE: FPL) third quarter net income was $774 million, or $1.92 a share, up from $533 million, or $1.33 a share, in the same quarter last year.

The Juno Beach-based company’s adjusted earnings were $506 million, or $1.25 a share, for the third quarter, up from $494 million, or $1.23 a share, for the same quarter of 2007.

FPL Group’s Florida Power & Light Co. utility reported third quarter net income of $314 million, or 78 cents a share, down from $326 million, or 81 cents a share, for the prior-year quarter, which the company said reflected “the impact of the economic downturn in the state.”

Retail sales of electricity dropped by 4.3 percent from the prior year, with weather-related electricity use down by 1.5 percent.

FPL Energy, the competitive subsidiary of FPL Group, reported third quarter net income of $483 million, or $1.20 a share, up from $220 million, or 55 cents a share, in the prior-year quarter.

Adjusted earnings for FPL Energy were $215 million, or 53 cents a share, up from $181 million, or 45 cents a share, in the same quarter last year.

FPL Group shares were down $2 in afternoon trading at $41.20. The 52-week high was $73.75 on Jan. 7. The 52-week low was $33.81 on Oct. 10.

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Posted in ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, USA | Leave a Comment »

SYRIA HITS OUT AT ‘TERRORIST’ US

Posted by Gilmour Poincaree on October 27, 2008

Last updated at 16:30 GMT, Monday, 27 October 2008

Syria’s foreign minister has accused the US of an act of “criminal and terrorist aggression” over what it Walid Muallem - We put the responsibility on the American government says was a helicopter raid on its territory.

Walid Muallem said Sunday’s attack saw four US aircraft travel eight miles inside Syrian airspace from Iraq and kill eight unarmed civilians on a farm.

He said those who died were a father and his three children, a farm guard and his wife, and a fisherman.

The US has not confirmed or denied the alleged raid.

However, a unnamed US official was quoted by the AFP news agency as saying that its forces had mounted a “successful” raid against foreign fighters threatening US forces in Iraq.

The US has previously accused Syria of allowing militants into Iraq, but Mr Muallem insisted his country was trying to tighten border controls.

‘An opportunity’

Speaking at a news conference in London, Mr Muallem said the raid on the town of Abu Kamal was “not a mistake” and that he had urged the Iraqi government to investigate.

“We consider this criminal and terrorist aggression. We put the responsibility on the American In pictures - Grief and anger in Syria - CLICK ON THE PHOTO TO VIEW PICTURES OF THIS EVENT government,” he told reporters following talks with UK Foreign Secretary David Miliband.

He added: “All of them [the victims] are civilians, Syrian, unarmed and they are on the Syrian territories.

“Killing civilians in international law means a terrorist aggression.”

Asked if Syria would use force if a similar operation was mounted, he said: “As long as you are saying if, I tell you, if they do it again, we will defend our terrorities.”

Referring to the US presidential election, he said: “We hope the coming administration will learn the mistakes of this administration.”

Three children and a married couple were said to be among the dead

Mr Muallem and Mr Miliband were scheduled to hold a joint press conference, but Mr Miliband withdrew. The UK government has declined to comment on the raid.

The US official quoted by AFP said: “Look when you’ve got an opportunity, an important one, you take it.

“That’s what the American people would expect, particularly when it comes to foreign fighters going into Iraq, threatening our forces.”

 

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PUBLISHED BY ‘BBC NEWS’ (UK)

Posted in INTERNATIONAL, MIDDLE EAST, SYRIA, USA, WARS AND ARMED CONFLICTS | Leave a Comment »

FOREIGN MINISTRY SUMMONS US CHARGE D’AFFAIRES IN DAMASCUS, HOLDS US ADMINISTRATION RESPONSIBLE FOR THE DANGEROUS AGGRESSION IN ABU KAMAL

Posted by Gilmour Poincaree on October 27, 2008

Sunday, October 26, 2008 – 09:45 PM

DAMASCUS, (SANA) – An official source on Sunday announced that four US helicopters coming from Iraq violated the Syrian airspaces over Abu Kamal area (al-Sukkariah Farm) targeting a civilian building, killing eight citizens.

The source identified the civilians killed in the aggression as Daoud Mohammad al-Abdullah and his four sons, in addition to Ahmad Khalifa, Ali Abbas Al-Hassan and his wife. Another citizen was also wounded, the source added. Later, the US helicopters flew back to the Iraqi airspace.

Syria, while condemning this act of aggression, holds the US forces responsible for this aggression and all of its repercussions, calls on the Iraqi government to shoulder its responsibilities and open an immediate investigation into this dangerous violation and prevent using the Iraqi territories for launching aggression on Syria.

The Deputy Foreign Minister summoned the Charge d ‘Affairs at the US Embassy in Damascus, informing her of Syria’s protest and condemnation of this dangerous aggression, holding the US administration full responsibility for it. The Iraqi Charge d’affaires has also been summoned to the Foreign Ministry for the same purpose.

Earlier, a media source said that four US military helicopters had violated the Syrian airspaces eight km over al-Sukkariah Farm, in Abu Kamal area at 4.45 P.M Sunday.

The US helicopters launched an aggression on a civilian building under construction and opened fire at the workers inside the building, killing eight civilians, including the wife of the building guard, and wounding another. The helicopters then left towards the Iraqi territories.

Mazen

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KAGARA REVIEWS SPENDING ON FALLING METALS PRICES – prompted by a sharp drop in metals prices

Posted by Gilmour Poincaree on October 27, 2008

October 27, 2008

by Alex Wilson

KAGARA is reviewing its spending and operations, prompted by a sharp drop in metals prices.

The Perth-based miner said that even at current metals prices its copper and zinc operations continue to be cash flow positive.

“However, in view of the significant deterioration in metal prices since the end of the quarter, the company is now conducting a review of capital, operations, development and exploration expenditure aimed at optimising cash flows and profits,” Kagara said.

The company said it will release the results of the review with its quarterly production report, due Thursday.

Dow Jones Newswires

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PUBLISHED BY ‘THE AUSTRALIAN’

Posted in AUSTRALIA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, OCEANIA | Leave a Comment »