Saturday, 31 January 2009

Protectionism: the Growing Pandemic that Will Kill Off Globalisation

TELEGRAPH BLOGS: "British jobs for British workers," the man said - the man in question being Gordon Brown. Those words have now returned to haunt him, on placards brandished by picketing workers at the Lindsey oil refinery in Lincolnshire and the growing number of similar sites to which the protests against the oil company Total's hiring of foreign contractors have spread.

Anyone who tries to dismiss these strikers and protesters as local Luddites, out of touch with the realities of globalisation, should think again. When the slogans being chanted at an industrial plant in Lincolnshire are echoed even more loudly in the US House of Representatives, the Senate and the Oval Office, then we know that protectionism is not a bush fire but a global inferno.

Protectionism is rapidly replacing free trade as the political, if not the economic, orthodoxy. Lord George Bentinck would have loved it (Dizzy was only along for the ride during the Corn Laws debacle, as his subsequent embrace of free trade demonstrated). Globalisation is in retreat. Recessions do funny things like that; and it gets worse as it deepens into full-blown depression, as this crisis will do.

Memo to Gordon: if you want to save the world, do not utter populist protectionist slogans for temporary electoral effect. The United States is returning to its protectionist roots (it never entirely abandoned them) with a vengeance. Not only all iron and steel used in Barack Obama's 1930s re-enactment spectacle is required to be of American provenance, but the Senate has now extended the restriction to virtually all equipment and goods.

The rest of the world will follow suit. It will be an easy transition for France which, behind a cynical rhetoric of free trade, has quietly been implementing Napoleon Bonaparte's Continental System within the framework of EU membership for decades. Once a trading partner espouses protection, one has to reciprocate or be the loser. It becomes a pandemic. Comment here >>> Geraald Warner | Friday, January 30, 2009

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Interest Rates Could Hit 1 Per Cent Next Week, in Another Blow to Savers

THE TELEGRAPH: Interest rates, already at their lowest level in history, are expected to fall yet further next week to 1 per cent, hitting hard pressed savers.

The Bank of England's monetary policy committee is meeting on Wednesday and Thursday to decide on whether to cut interest rates once again, to stave off the worst of the mounting recession.

If it does so, it will be the fifth month in a row it has cut rates. It has already slashed them from 5 per cent at the start of October to 1.5 per cent, the lowest they have been since the Bank was founded in 1694.

In recent weeks the economic data has worsened, with more and more businesses forced to axe staff, shut down factories and delay investment.

However, a further cut would be a severe blow to savers, who are already suffering from a dearth of good savings accounts. >>> By Harry Wallop, Consumer Affairs Editor | Friday, January 30, 2009

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Schwarzenegger espère sauver la Californie de la faillite

Photo d’Arnold Schwarzenegger, gouverneur de la Californie, grâce au Figaro

LE FIGARO: La justice a accepté le décret d'Arnold Schwarzenegger visant à enrayer le déficit de 40 milliards de dollars de l'Etat, en réduisant notamment le salaire des fonctionnaires.

Un déficit qui augmente de 500 dollars chaque seconde. Face à l'urgence de la situation, la justice californienne a donné jeudi son feu vert au décret signé par le gouverneur Arnold Schwarzenegger visant à réduire le déficit budgétaire de l'Etat, estimé à 40 milliards de dollars. Car la Californie, jusqu'ici considérée comme l'Etat le plus riche de tous les Etats-Unis, est durement frappée par la récession, à tel point qu'elle pourrait se retrouver en cessation de paiements dès le 1er février. Le gouverneur espère que ce nouveau décret, qui vise principalement les fonctionnaires- va pouvoir freiner ce déficit abyssal. >>> Par Flore Galaud ( avec AFP | Vendredi 30 Janvier 2009

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Friday, 30 January 2009

Obama Calls Recession a Disaster

BBC: President Obama has called the contraction of the US economy in the final quarter of 2008 a "continuing disaster" for the US.

Speaking at the White House, he also announced a new task force to help middle-class working families.

US economic output fell 3.8%, the worst quarterly contraction in more than 26 years, official figures have shown.

It is the first time the United States has seen consecutive quarterly declines since 1991.

The rate is annualised, which means that if the economy were to shrink at the same rate for a whole year as it did in the final quarter, it would shrink by 3.8%.

Task Force

President Obama said the task force, to be headed by Vice President Joe Biden, would focus on creating well-paid jobs for middle-class working families.

He also said he wanted to "level the playing field" for labour unions, saying that strong unions needed to work "side by side" with strong businesses.

"I do not view the labour movement as part of the problem. To me, it's part of the solution," he added.

The president said he had signed three executive orders to help workers, ensuring - among other things - that federal contractors offer jobs to existing workers when contracts change.

Vice President Biden said: "America's middle class is hurting. Trillions of dollars in home equity and retirement savings and college savings are gone.

"A strong middle class equals a strong America. We can't have one without the other."

The announcement went down well with union leaders.

General president of the Teamsters union said: "It is a new day for workers. Hope for the American Dream is being restored." >>> | Friday, January 30, 2009

Watch BBC video: President Obama announcing a new task force for middle-class working families >>>

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US Economy Shrinks at Fastest Rate Since 1982

TIMES ONLINE: Americans stop spending on all but essential items and world's biggest economy contracts at 3.8% in final quarter

The US economy shrank at its fastest rate since 1982 in the final quarter of 2008 as Americans stopped spending on all but essential items, such as food and petrol.

The world's biggest economy contracted at an annual rate of 3.8 per cent between October and December, according to official data published today by the US Commerce Department.

Consumer spending, which measures how much Americans purchase on everything from household goods to services, dropped by an annual rate of 3.5 per cent between October and December. >>> Suzy Jagger in New York | Friday, January 30, 2009

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Davos 2009: Joaquín Almunia

Watch New York Times video: Joaquín Almunia, Commissioner for Economic and Monetary Affairs at the European Commission in Brussels, talks about economic affairs in Europe. >>>

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Obama Calls Wall Street Bonuses ‘Shameful’

THE NEW YORK TIMES: WASHINGTON — President Obama branded Wall Street bankers “shameful” on Thursday for giving themselves nearly $20 billion in bonuses as the economy was deteriorating and the government was spending billions to bail out some of the nation’s most prominent financial institutions.

“There will be time for them to make profits, and there will be time for them to get bonuses,” Mr. Obama said during an appearance in the Oval Office with Treasury Secretary Timothy F. Geithner. “Now’s not that time. And that’s a message that I intend to send directly to them, I expect Secretary Geithner to send to them.”

It was a pointed — if calculated — flash of anger from the president, who frequently railed against excesses in executive compensation on the campaign trail. He struck his populist tone as he confronted the possibility of having to ask Congress for additional large sums of money, beyond the $700 billion already authorized, to prop up the financial system, even as he pushes Congress to move quickly on a separate economic stimulus package that could cost taxpayers as much as $900 billion.

This week alone, American companies reported as many as 65,000 job cuts, and public anger is rising over reports of profligate spending by banks and investment firms that are receiving help from the $700 billion bailout fund. About half of that money is still available, but the new administration has yet to announce how it will use it, and many analysts think it will take far more to stabilize the banking system. >>> By SHERYL GAY STOLBERG and STEPHEN LABATON | Thursday, January 29, 2009 Wall Street: Obama voit rouge

Rien ne va plus entre Wall Street et Barack Obama. Le 44e président des Etats-Unis a jugé tout simplement "honteux" les bonus versés par les groupes financiers à leurs salariés en 2008: 18,4 milliards de dollars. "C'est le comble de l'irresponsabilité", a-t-il insisté, appelant les "gens de Wall Street" à faire "preuve de retenue, de discipline et de davantage de sens des responsabilités".

18,4 milliards de dollars. C'est la somme de la discorde entre Barack Obama et Wall Street. Mercredi, les autorités de l'Etat de New York ont indiqué que les établissements de Wall Street avaient versé 18,4 milliards de dollars de primes à leurs salariés en 2008. Un chiffre certes en recul de 44% par rapport à 2007 - 32,9 milliards de dollars - mais qui reste le sixième record de l'histoire de Wall Street en valeur absolue. Le montant a de quoi surprendre en pleine crise économique et alors que l'administration Bush a lancé à l'automne un vaste plan de soutien au secteur financier d'une valeur totale de 700 milliards de dollars.

Selon le Wall Street Journal, l'équipe Obama envisage même de rajouter 1000 à 2000 milliards de dollars au plan Paulson. Dans ce contexte, on comprend bien pourquoi à la Maison blanche, ces primes ont dû mal à passer. Son nouveau pensionnaire a tout simplement jugé "honteux" le niveau des bonus en 2008. "Au moment où la plupart de ces institutions étaient près de s'effondrer et où elles demandent l'aide des contribuables pour les soutenir, et où les contribuables eux-mêmes sont dans une situation difficile parce que le système tout entier pourrait leur tomber sur la tête s'ils ne leur venaient pas en aide, c'est le comble de l'irresponsabilité, c'est honteux", a-t-il asséné. >>> Par Marianne ENAULT, | Vendredi 30 Janvier 2009

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Oil Workers Protest Against Jobs for Foreigners

THE TELEGRAPH: Hundreds of factory workers protested outside one of the country's largest oil refineries against the use of foreign workers on a multi million pound construction project.

Humberside Police said around 800 people took part in the demonstration outside the giant Lindsey Oil Refinery at North Killingholme, Lincs.

The actions of the workers could spark more protests around the country as the jobless total rises towards two million during the economic downturn and anger mounts against the Government.

Some protesters carried placards repeating Gordon Brown's slogan 'British jobs for British workers'.

Derek Simpson, joint leader of Unite, called for urgent meetings with the Government and employers to discuss the "exclusion" of UK workers from some of Britain's major engineering and construction projects.

"We have a growing problem in the engineering and construction industry where UK workers are being excluded from important projects.

The Government must take urgent action to deal with this situation as tensions are reaching boiling point. >>> By Nick Britten | Friday, January, 2009

TIMES ONLINE: Wildcat Strikes Over Foreign Workers Spread Across Britain

Wildcat strikes spread to oil refineries across Britain this morning as workers walked out in sympathy with industrial action taken against the arrival of hundreds of foreign contractors.

Around 700 staff walked out of the Grangemouth oil refinery in Scotland and 400 more staged an unofficial strike at a refinery in Wilton, Teesside as workers lent their support to a three-day strike at the Lindsey oil refinery in North Lincolnshire.

Staff at the refinery in North Killingholme began their wildcat strike on Wednesday in protest at the arrival of 200 Italian and Portuguese staff who were awarded a large construction contract.

There were also signs of the protest spreading to Wales this morning, police were called to Aberthaw power station near Barry after a protest was staged there.

Hundreds of angry protesters are calling on the government to intervene to guarantee jobs for British workers. One of the men on the picket line outside the Lindsey refinery told BBC television this morning that local families were struggling to feed their families while work was given to European workers. >>> Nico Hines and Christine Buckley, Industrial Editor | Friday, January 30, 2009

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Iceland to Be Fast-tracked into the EU

Plan for cash-strapped state to become member by 2011

Iceland will be put on a fast track to joining the European Union to rescue the small Arctic state from financial collapse amid rising expectations that it will apply for membership within months, senior policy-makers in Brussels and Reykjavik have told the Guardian.

The European commission is preparing itself for a membership bid, depending on the outcome of a snap general election expected in May. An application would be viewed very favourably in Brussels and the negotiations, which normally take many years, would be fast-forwarded to make Iceland the EU's 29th member in record time, probably in 2011.

Olli Rehn, the European commissioner in charge of enlargement, said: "The EU prefers two countries joining at the same time rather than individually. If Iceland applies shortly and the negotiations are rapid, Croatia and Iceland could join the EU in parallel. On Iceland, I hope I will be busier. It is one of the oldest democracies in the world and its strategic and economic positions would be an asset to the EU."

Rehn's support for swift Icelandic membership was echoed by senior European diplomats in Brussels. "We would like to see Iceland join the EU," said one. The current and next holders of the EU presidency, the Czechs and then the Swedes, are also strong supporters of EU enlargement and will deploy their agenda-setting powers to help Iceland. >>> Ian Traynor in Brussels, additional reporting by Valur Gunnarsson in Reykjavik | Friday, January 30, 2009

Listen to audio: Iceland into EU: 'A society that has hit the rails and the currency has been wrecked' – Ian Traynor on fast-tracking Iceland into the EU and the euro >>>

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Thursday, 29 January 2009

US-EU Trade War Looms as Barack Obama Bill Urges 'Buy American'

Presdident Barack Hussein Obama. Photo courtesy of The Telegraph

THE TELEGRAPH: The prospect of a trade war between the US and Europe is looming after "Buy American" provisions were added to President Barack Obama's $820 billion (£573 billion) stimulus package.

The EU trade commissioner vowed to fight back after the bill passed in the house of representatives late on Wednesday included a ban on most purchases of foreign steel and iron used in infrastructure projects.

The senate's version of the legislation, which will be debated early next week, goes even further, requiring that any projects related to the stimulus use only American-made equipment and goods.

The inclusion of protectionist measures has quickly raised hackles in Europe. >>> By Alex Spillius in Washington | Thursday, January 29, 2009

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Surge in Number of Fake Pound Coins

THE INDEPENDENT: Alarm at the Royal Mint as one in every 40 is found to be counterfeit

Photo showing how to spot a fake pound coin courtesy of the The Independent

Criminal gangs have dramatically increased their output of counterfeit £1 coins in the past year, pumping millions of fakes into the economy and threatening to undermine public confidence in the money supply.

Sampling by the Royal Mint of coins in circulation across Britain has found that the number in circulation rose by 27 per cent during 2008, raising the amount of sham coinage to £37.5m – or one £1 coin in every 40 – the highest since the coin was introduced in 1983.

In 2002, one in 100 £1 coins was a worthless fake and in 2007 one in 50. Royal Mint officials are considering launching a public information campaign to warn the public how to spot the fakes.

Technically any person handing one over is breaking the law, meaning that millions of people are unwittingly committing a crime every year, but many of the fakes closely reproduce the metallic compound used by the Royal Mint, making them hard to detect by bank counting machines.

The rise in forgeries, revealed in documents obtained by The Independent, prompted a warning from an expert that their prevalence could undermine confidence in the money supply. >>> By Martin Hickman, Consumer Affairs Correspondent, The Independent | Thursday, January 29, 2009

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Generalstreik gegen Sarkozys Krisenpolitik: Erhebliche Verkehrsbehinderungen am «schwarzen Donnerstag»

NZZ Online: In Frankreich ist der erste Generalstreik gegen die Krisenpolitik von Staatspräsident Nicolas Sarkozy angelaufen. Am Morgen kam es bereits zu erheblichen Behinderungen im Nahverkehr von Paris und Marseille. Zu rund hundert Demonstrationen im ganzen Land werden Millionen Menschen erwartet. >>> ap | Donnerstag, 29. Januar 2009

THE TELEGRAPH: France Hit by National Strike on 'Black Thursday'

France woke up to a day of nationwide strikes in both the public and private sector on what has been billed as 'Black Thursday'.

However, disruption to transport networks appeared to less than expected.

Hundreds of thousands of workers are expected at more than 200 rallies to call on President Nicolas Sarkozy to do more to protect jobs and wages.

Three-quarters of people and all the main trade unions support the day of industrial action.

The protesters are demonstrating against the worsening economic climate and rising unemployment in France and at what they believe to be the government's poor handling of the crisis.

The main bulk of protesters will come from across the public sector, from postal workers to court officials and a huge contingent of teachers marching against Mr Sarkozy's plan not to replace 13,500 jobs in education this year when staff retire or quit the profession.

But employees from the private sector, from car plant workers but also helicopter pilots, supermarket cashiers and even ski lift operators, will also take part.

All major cities were experiencing transport delays, but slightly less than expected, particularly in Paris. >>> By Henry Samuel in Paris | Thursday, January 29, 2009 Grève: Le point à la mi-journée

Annoncée dans la perspective d'un "jeudi noir", la mobilisation sociale à travers tout le pays à l'appel de huit syndicats semble moins massivement suivie que prévue. Si le débrayage est bien réel et concerne de nombreux secteurs de la fonction publique et du secteur privé, les perturbations et le nombre de grévistes sont pour l'heure relativement limités. >>> Par le service Société, | Jeudi 29 Janvier 2009

”Jeudi noir” en images >>>

LE FIGARO: Une journée de grève coûte 300 à 400 millions d'euros

En Ile-de-France, une journée de grève équivaudrait à 50 millions de perte de chiffre d'affaires.

Transports paralysés, salariés coincés, journées de RTT posées, production qui prend du retard, livraisons non acheminées… La facture d'une journée de grève comme celle de jeudi peut potentiellement coûter cher aux entreprises. >>> M. Vt | Jeudi 29 Janvier 2009

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Europa: "Märkte wetten auf Explosion des Euro"

DIE PRESSE: Erstmals scheint die europäische Währung wirklich in Gefahr. Der Bankrott eines Euro-Landes könnte den Kollaps der europäischen Währungsunion zur Folge haben.

Die Kreditwürdigkeit von Spanien und Griechenland wurde bereits in den vergangenen Wochen herabgestuft. Aber auch Anleihen aus Irland, Italien und Portugal werden - erstmals seit der Euro-Einführung - mit massiven Risikoaufschlägen belastet. Mittlerweile fragen sich auch renommierte Ökonomen, wann das erste Euro-Land bankrott geht. Die Konsequenzen könnten folgenreich sein und im Zerfall des Währungsblocks münden.
>>> | Donnerstag, 29. Januar 2009

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Putin und China: USA schuld an Wirtschaftskrise

DIE PRESSE: Kritik an den USA kommt anlässlich des Welt-Wirtschaftsforums in Davos aus Russland und China. Das "blinde Profitstreben" der USA habe zur schlimmsten Krise seit der großen Depression von 1929 geführt. >>> | Donnerstag, 29. Januar 2009

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Sunday, 25 January 2009

Toxic Debt Bank Plan Means End of Big Bonuses

THE TELEGRAPH: The treasury is planning to control of [sic] banking bonuses as the price for the insurance scheme for bad debts unveiled last week.

Banks that ask the taxpayer to insure their “toxic” assets will have to sign legal documents committing them to introducing “long-term” pay structures that may signal a halt to the bonus culture.

Details of the agreements that banks, including Barclays and Royal Bank of Scotland, will be asked to sign are still being drawn up, but sources close to the Treasury said the terms were likely to be stringent.

The Government has come in for embarrassing criticism over its decision to prefer the complex insurance scheme over setting up a “toxic bank”. The decision, which was announced on Monday, was made following advice from Credit Suisse, the investment bank, but The Sunday Telegraph can disclose that, just two days later, analysts from the same bank told their clients that their “preferred solution” was a government-funded “bad bank”. >>> By Mark Kleinman and Patrick Hennessy | Saturday, January 24, 2009

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Saturday, 24 January 2009

’Denis Tax-Them-Till-the Pips-Squeak Healey’ Does a U-Turn

THE TELEGRAPH: Gordon Brown is only proposing to raise taxes for the better-paid to appeal to Labour's core voters, a former Labour Chancellor warns today.

In an interview with the Daily Telegraph, Denis Healey says that the new higher rate of tax is likely to have little financial benefit as the wealthy will simply avoid the extra levy.

Mr Healey, 92, was Labour Chancellor during the economic crisis of the 1970s when the top-rate of tax was 83 per cent. Mr Brown has proposed introducing a new 45 percent top-rate of income tax in 2011 to help fund the cost of the cut in Vat.

However, when asked last week whether he believed the tax increase was designed to appeal to Labour's core voters, Mr Healey said: "I think probably so. Because what I learned as Chancellor were that the rich can nearly always find ways of avoiding tax that are legal, and in any case the amount raised is very small. And it does encourage people to leave the country." Gordon Brown Is Using Tax on Wealthy for Purely Political Reasons, Says Denis Healey >>> | Saturday, January 24, 2009

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Once a Boon, Euro Now Burdens Some Nations

THE NEW YORK TIMES: ATHENS — “The Italians, the Spaniards, the Greeks, we all have been living in happy land, spending what we did not have,” said George Economou, a Greek shipping magnate, contemplating his country’s economic troubles and others’ from his spacious boardroom. “It was a fantasy world.”

For some of the countries on the periphery of the 16-member euro currency zone — Greece, Ireland, Italy, Portugal and Spain — this debt-fired dream of endless consumption has turned into the rudest of nightmares, raising the risk that a euro country may be forced to declare bankruptcy or abandon the currency.

The prospect, however unlikely, is a humbling one. The adoption of the euro just a decade ago was meant to pull Europe together economically and politically, ending the sometimes furious battles over who could devalue their currency the fastest and beggar their neighbor.

For the Continent, the currency signaled the potential to one day rival the United States. For its poorer countries, winning admission to the euro zone was a point of pride, showing that they had tamed their budget deficits and set their financial houses in order.

Now, in the middle of the worst economic downturn since the euro’s birth, a new view is emerging — especially as the creditworthiness of Greece, Spain and Portugal, one after the other, has been downgraded. The view is that the balm of euro membership allowed these countries to gloss over serious economic problems that have now roared to the fore.

“Membership is not a panacea for a country’s social and economic problems,” said Simon Tilford, the chief economist at the Center for European Reform in London. >>> By Landon Thomas Jr. | Friday, January 23, 2009

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World Economic Forum: Davos 2009

TIME: Stormy Weather

It was, for a few years in the middle of this decade, the trope that you heard all the time. The global economy, it was said, was a "Goldilocks" one. Just like the bowl of porridge that the child in the fairy tale sampled, it was neither too hot, nor too cold. It was — wonderfully, warmly — just right.

It's worth thinking how that analogy might be extended into our times. The global economy, you might say, now resembles the sort of congealed, cold, gray, glutinous bowl of oatmeal, curling up at the edges, that was once to be found in the lesser sort of Scottish boarding houses, with a couple of flies dancing a lazy highland reel on its surface. (See pictures of the global financial crisis.)

It is, in short, not an appetizing sight.

Since the summer of 2007, when nonexperts started to understand that subprime refers not to a U.S. Department of Agriculture grade of steak but a mortgage whose originator had no real prospect of recovering its debt, the world's economic and financial systems have lurched from one astonishing event to another. The mayhem among U.S. commercial and investment banks in the fall of 2007, the Fed's panicky 75-basis-point interest-rate cut of January 2008, the fraud at SocGen, the fire sale of Bear Stearns, the bankruptcy of Lehman Brothers, the rescue of AIG, CDOs, TARP, recapitalization, Madoff, Satyam, Citi, RBS ... and so it goes, until even the most diligent of chroniclers runs out of acronyms and polysyllables and ceases to believe that the story they are telling can possibly have happened. Goldilocks? To describe the travails of the global economy in the past 18 months would require an imagination darker than that of the Brothers Grimm.

But this is a not a fairy tale. It is a story in which figures and financial flows (or rather, the lack of them) translate into reductions in life chances for millions, as jobs, household incomes and retirement savings accounts all disappear. This year, says Stephen Roach, chairman of Morgan Stanley Asia (and one of a handful of economists who can legitimately claim that they had long predicted that an economy built on debt and asset-price bubbles would one day collapse), will be "the worst recession year since 1982," with global growth of just 1%. Roach adds: "The risk is it could be worse." Jim Walker, from the research firm Asianomics, chooses a different comparator as he looks to the global economy this year. "We haven't seen anything like this since the 1930s," he says, guessing that the U.S. economy will contract by anything between 2.5% and 5% of GDP. Matthew Sharratt, an economist at Bank of America in London, predicts a 2.9% drop in GDP for the U.K., "the worst recessionary experience since the 1970s." >>> By Michael Elliott | Friday, January 23, 2009

TIME: Rethinking Marx

The book has been on the best-seller lists in Germany for nine weeks, and in the provincial town of Trier it has special resonance, especially in tough economic times. It's Marx's Das Kapital, and dozens of copies of it are laid out in the bookshop in Trier's pedestrian-only town center. But no, this is not the seminal 19th century work on political economy by Karl Marx, who was born in Trier in 1818. It's a book by Reinhard Marx, the former Roman Catholic Bishop of Trier who is now Archbishop of Munich and Freising. He cheekily borrowed the title for his own thesis, namely that today's troubled economy needs to reconnect with fundamental Christian values if it is to be restored to health. The book's introduction is a letter to Reinhard's celebrated namesake in which he rejects revolutionary Marxist solutions. Nonetheless, as he surveys the wreckage of the global financial system and the growing insecurity of ordinary people, the Archbishop wonders: Was Marx's critique of capitalism right after all? "It lasted longer than you expected back in the 19th century," he writes, "but could it be that capitalism is just an episode of history that will end at some point because the system will collapse as a result of its internal contradictions?" (See pictures of the Bolshevik October Revolution.)

The Archbishop is not alone. From Washington to Vladivostok, the task of warding off financial collapse and economic depression is now the overwhelming priority for government leaders, central bankers and regulators everywhere. Solutions differ, but all agree that the current situation is both dire and extremely perplexing: nobody younger than 80 has experienced such a rapid decline in global confidence and economic activity. Markets have failed, and in so doing they have destroyed the conventional wisdom about how to run an efficient economy. It's as if an intellectual fog has descended, and the global positioning system has broken down, leaving the world to grope its way out as best it can. "Ask the experts what to do," says Tony Blair, the former British Prime Minister, "and the most honest reply is 'I don't know.' "

Searching the library for ideas, many have rediscovered the 1930s policy prescriptions of John Maynard Keynes, who advocated massive government spending programs of the type now being promoted by U.S. President Barack Obama, British Prime Minister Gordon Brown and others. Other great thinkers of the past are also being rediscovered, from Adam Smith to John Kenneth Galbraith. But hovering out there in the fog, unavoidably, is the towering specter of Karl Marx, the grandfather of political economists, whose damning critique of capitalism's inadequacies played an outsized role in world history for a century after his death in 1883. (Read a TIME cover story on Marx.)

Marx's utopian predictions about revolution and the triumph of socialism were dead wrong; indeed, many of the policies carried out in his name in the 20th century brought misery to millions in countries ranging from Russia to China, and including large chunks of Africa. Yet 20 years after the fall of the Berlin Wall and Soviet-style socialism, it's still instructive to take the Karl Marx road trip around Europe, starting in Trier and ending up where he ended, in London. It's instructive because if you leave aside the prophetic, prescriptive parts of Marx's writings, there's a trenchant diagnosis of the underlying problems of a market economy that is surprisingly relevant even today. Marx, too, lived through an era of rapid globalization. (A famous passage in The Communist Manifesto, which he wrote with Friedrich Engels in 1848, is almost uncannily prescient about globalization's costs and benefits.) He was moved by glaring inequalities between rich and poor that are more topical than ever today. He thought work should bring personal fulfillment, and that labor should not be treated as a simple commodity — foreshadowing today's controversies over outsourcing and poor working conditions in developing countries. He wondered whether the middle class would be squeezed out of existence. And he identified how profits were taking an ever bigger share of the economy at the expense of wages, just as they are once again today. >>> By Peter Gumbel | Friday, January 23, 2009

TIME: Potholes On the Path to Prosperity

Hoang Van Ti was one of the winners when Vietnam ended its long period of isolation and joined the global economy. Foreign investors flocked to the communist country, new factories making computers, clothing and other goods for export rose from the country's rice paddies, and suddenly jobs were no longer in short supply. In 2007, Ti landed work near Hanoi at a South Korean – owned kitchenware manufacturer, where he attached handles to pots on an assembly line. The pay, at $105 a month, was much more than the 22-year-old could ever earn back in his farming village of Hau Loc in central Vietnam. But two months ago, the world's severe economic slowdown hit home. Orders at Ti's factory dried up; his manager furloughed him indefinitely. Ti can no longer help his family in Hau Loc by sending them extra cash. As he chain-smokes at a makeshift tea stall near Hanoi, he longs to get back on the road to prosperity. "I'm trying to stay here to find another [factory] job," he says, "because life is even more difficult back home." >>> By Michael Schuman | Friday, January 23, 2009

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La faillite de l'Islande provoque à Reykjavik les premiers heurts avec la police depuis 60 ans

LE MONDE: Depuis mardi 20 janvier, des milliers d'Islandais se relaient chaque après-midi devant le Parlement (Althing) et le bureau du premier ministre pour demander la démission du gouvernement. Ces manifestations se sont transformées en émeutes deux nuits de suite, mardi et mercredi. Jeudi matin, pour la première fois en un demi-siècle, la police de la pacifique Islande, pays sans armée de 300 000 habitants qui n'avait connu, depuis son indépendance, qu'une seule manifestation violente, en 1949, lors de l'adhésion à l'OTAN, a fait usage de gaz lacrymogènes pour disperser les contestataires.

A l'origine de ces événements, la situation économique dramatique de l'île : les banques toutes nationalisées après leur faillite en octobre 2008, l'affaissement de la monnaie, des dettes abyssales, la morue qui se vend mal et les investissements dans l'aluminium au point mort après l'effondrement des cours. Le chômage, inconnu jusqu'ici, devrait atteindre 7,8 % de la population active, selon les prévisions officielles. Après une décennie d'une croissance moyenne de 4 %, le produit intérieur brut (PIB) devrait se replier de 9,6 % en 2009 et l'endettement des ménages augmente tandis que leurs revenus baissent. >>> REYKJAVIK (Islande) CORRESPONDANCE | Vendredi 23 Janvier 2009

NZZ Online: Islands Regierungschef tritt zurück: Vorgezogene Neuwahlen im Mai

Geir Haarde hat aus gesundheitlichen Gründen den Rücktritt als Regierungschef und als Chef der Konservativen ankündigt. Islands Bevölkerung forderte in wochenlangen Protesten vorgezogene Neuwahlen als Reaktion auf die tiefe Finanzkrise, in der die Insel steckt. >>> NZZ Online | Freitag, 23. Januar 2009

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Contre le chômage, Madrid encourage les Espagnols à préférer le "made in Spain"

LE MONDE: En pleine "Obamania", le ministre l'industrie et du tourisme espagnol, Miguel Sebastian, a choisi d'emprunter au registre de John Fitzgerald Kennedy pour demander à chaque consommateur espagnol "ce qu'il peut faire pour son pays".

La réponse ? Acheter "made in Spain". Devant une poignée de journalistes économiques, ce proche de José Luis Rodriguez Zapatero, connu pour ses convictions libérales et européennes, s'est défendu, mercredi 21 janvier, de toute tentation protectionniste. Mais au prix de savants calculs, il est arrivé à la conclusion que, si la baisse de la consommation des ménages, estimée à 1,5 % en 2009 en Espagne, ne devait affecter que des produits espagnols, cela détruirait 120 000 emplois supplémentaires dans un pays qui se dirige tout droit vers les quatre millions de chômeurs. >>> | Vendredi 23 Janvier 2009

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Barack Obama Faces Republican Opposition to £600bn Stimulus Plan

THE TELEGRAPH: President Barack Obama's hopes of a new dawn of bipartisan co-operation in Washington have been shaken by fierce Republican opposition to his £600 billion economic stimulus plan.

Senior Republicans attacked the $825 billion package as too big and laden with pet projects that will do nothing to lift the US out of recession in the short term.

Hovering over their discontent is a growing feeling among conservatives that Mr Obama's inauguration speech, a strong disavowal of the outgoing President George W. Bush as he sat listening, was unnecessarily harsh on his predecessor.

Representative John Boehner, the Republican leader in the House, is understood to be one of those most upset about the tone of the speech.

Having previously vouched for Mr Obama's desire to reach across the aisle, the Republican has adopted a harsher tone since Tuesday's inauguration.

"We believe that spending nearly a trillion dollars is really more than what we ought to be putting on the backs of our kids and their kids, because at the end of the day, this is not our money to spend. We're borrowing this money from our kids," Mr Boehner said after a meeting with Mr Obama.

He added: "How you can spend hundreds of millions of dollars on contraceptives. How does that stimulate the economy? You can go through a whole host of issues in this bill that have nothing to do with growing jobs in America and helping people keep their jobs." >>> By Toby Harnden in Washington | Friday, January 23, 2009

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Britain on the Brink of an Economic Depression, Say Experts

THE TELEGRAPH: Britain is heading for economic depression for the first time since the 1930s, economists have warned.

Families must brace themselves for a slump of far greater severity and longevity than the recessions of the 1980s and 1990s, they warned. They said the current crisis will be of a scale to rival the biggest peace-time crisis in modern history — the Great Depression.

The warning was delivered by economists and politicians after the Office for National Statistics revealed that the economy shrank by 1.5 per cent in the final three months of 2008 alone.

The contraction follows a 0.6 per cent fall in gross domestic product (GDP) — the most comprehensive measure of Britain’s wealth generation — during the previous three months. This means Britain fulfils the criteria for a technical recession — two successive quarters of negative output.

The news sent the pound sliding to its lowest level since 1985. Sterling dropped more than three quarters of a cent to $1.3688 as investors speculated that the Bank of England may be forced to cut interest rates towards zero in response to the recession. >>> By Edmund Conway, Economics Editor | Friday, January 23, 2009

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Thursday, 22 January 2009

Microsoft Axes 5,000 Jobs as Recession Hits Software Giant

THE TELEGRAPH: Microsoft plans to axe 5,000 jobs as a result of weakness in the global personal computer market and forecast that profits will fall this year.

The software giant said it planned to make the job cuts - which amount to more than 5 per cent of the firm's global workforce - over the next 18 months.

Around 1,400 are expected to be informed of their departure on Thursday. It is understood around 60 of the cuts will be in the UK.

Microsoft blamed the “deterioration of global economic conditions” for cuts, which left shares in Microsoft down by 6.4pc in early trading in New York. >>> By James Quinn, Wall Street Correspondent | Thursday, January 22, 2009

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Gordon Brown Brings Britain to the Edge of Bankruptcy

Photo of Gordon Brown, the then incompetent Chancellor and the now incompetent Prime Minister, courtesy of The Telegraph

THE TELEGRAPH: Iain Martin says the Prime Minister hasn't 'saved the world' and now faces disgrace in the history books

They don't know what they're doing, do they? With every step taken by the Government as it tries frantically to prop up the British banking system, this central truth becomes ever more obvious.

Yesterday marked a new low for all involved, even by the standards of this crisis. Britons woke to news of the enormity of the fresh horrors in store. Despite all the sophistry and outdated boom-era terminology from experts, I think a far greater number of people than is imagined grasp at root what is happening here.

The country stands on the precipice. We are at risk of utter humiliation, of London becoming a Reykjavik on Thames and Britain going under. Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic. >>> By Iain Martin | Wednesday, January 21, 2009

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France Targets Coca-Cola in Escalating 'Cheese Wars'

Photo courtesy of Google Images

THE TELEGRAPH: The French government is facing calls to slap a massive import tax on Coca-Cola in retaliation for punitive American duties levelled on the salty, blue-veined, sheep cheese roquefort.

The American measures were taken as part of a trade dispute, now known as "cheese wars", in which the Bush administration took action against the European Union's ban on imports of US hormone-treated beef.

Last week, America imposed a 100 per cent import duty on a long list of EU products, but singled roquefort out for a 300 per cent tariff.

"Symbol versus symbol," said Philippe Folliot, a French member of parliament whose Tarn constituency contains many roquefort producers. "Since the United States has decided to surtax one of the most ancient (cheese) appellations, I think that the French government, with the European Union, must think about a heavy specific tax on imports of Coca-Cola concentrates produced in the US." >>> By Henry Samuel in Paris | Wednesday, January 21, 2009

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Pound Slumps Ever Closer to Parity with the Dollar

THE GUARDIAN: Sterling falls to $1.36, its lowest level for 25 years / Government debt rises to 47.5% of national income

Sterling slumped to its lowest level against the dollar for nearly a quarter of a century today on persistent fears about the health of Britain's banks and worries that the cost of bailing them out could be a millstone round the economy's neck for many years to come.
The pound fell as low as $1.362 during a hectic trading day, pressured also by bad public finance figures and a speech by Bank of England governor Mervyn King on Tuesday night that indicated that further action would be needed to prevent the economy melting down. >>> Ashley Seager and Kathryn Hopkins | Wednesday, January 21, 2009

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Konjunktur: Asiatische Volkswirtschaften stürzen ab

WELT ONLINE: Die Wirtschaftskrise hat Asien voll erfasst: Die wichtigsten Volkswirtschaften melden desaströse Zahlen. In Japan ist der Export um 35 Prozent eingebrochen, die südkoreanische Wirtschaft ist erstmals seit zehn Jahren geschrumpft. Und auch das erfolgsverwöhnte China verbucht einen herben Rückgang. >>> Donnerstag, 22. Januar 2009

BBC: East Asia Nations Hit by Downturn

China and South Korea have announced sharp falls in economic growth, in a further sign of the financial crisis sweeping through east Asia.

China said its GDP fell to 6.8% in the final three months of 2008, from 9% in the previous quarter.

South Korea said its economy shrank by 3.4% in the last quarter of 2008 compared with the year before.

Meanwhile, Japan reported that its exports plummeted 35% last month - the sharpest fall on record. >>> | Thursday, 22. January 2009

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Wednesday, 21 January 2009

America: From Freedom to Fascism*

Part 1:

Part 2

Part 3

Part 4

Part 5

Part 6

Part 7

Part 8

Part 9

Part 10

*Viewpoints expressed in these videos are the viewpoints of the the maker of the videos and the people interviewed therein.

The Dawning of a New Dark Age (Paperback – USA)
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Disturbing News about Banking from Across the Pond

ISLAM IN ACTION: Michigan Bank Falls to Islam – This is a very disturbing article about the University Bank in Ann Arbor Michigan. The bank has recently implemented sharia banking, but to make matters worse they have even canceled their annual Christmas party and have stated that no alcohol will be served at after work gatherings. Several employees have quit the bank and hopefully they will sue the bank for religious discrimination. – Christopher Logan
ASSOCIATED PRESS: Michigan Bank Operates by Islamic Law

Big financial institutions have been battered by mortgages gone bad. But a tiny Michigan bank is getting attention in the industry by turning a profit on loans without even charging interest.

It also rules out some of the activity that got Western finance in trouble - subprime mortgages, credit default swaps and the like.

"When you look at the economic crisis we're in, if you were to follow Islamic or Sharia financing, you couldn't have this crisis," said John Sickler, corporate director for the bank, University Islamic Financial Corp. in Ann Arbor. >>> Jeff Karoub,Sebastian Abbot, Associated Press | Tuesday, January 20, 2009
Hat tip: Always On Watch

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We Have Every Right to Be Angry with the Bankers

Fred Goodwin, the son of an electrician, is the former chief executive of the Royal Bank of Scotland. Photo courtesy of Google Images

THE TELEGRAPH: Bosses who wrecked rock-solid institutions walked away with millions - leaving us to pay for their folly.

Before the internet age, it was a rite of passage, a feeling that you had finally grown up and were considered responsible and trustworthy. As children, many of us might have had savings accounts or a few pounds in a building society deposited by an ageing aunt.

But to get one's first cheque book was something special. Mine had the words National Westminster Bank written on the front, an imprimatur that could hardly have sounded more rock solid and British to the core, a guarantee of probity and quiet competence.

In those days, banks were forbidding places; there were no open plan offices. A visit to the bank manager, especially for an impecunious student trying to explain a £20 overdraft, was a terrifying experience conducted in a sternly avuncular manner from behind a large desk.

We all knew that such a world had disappeared. But it was none the less astonishing to wake on Monday morning to discover that the Royal Bank of Scotland – my bank, or at least the NatWest bit of it – had posted the biggest loss in British corporate history. >>> By Philip Johnston | Wednesday, January 21, 2009

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’A New Dark Age Is Dawning’ Is Back!

Visitors to my website will know that it was ‘locked’ for a period of over two weeks.

I am pleased to be able to report today that the website has now been ‘unlocked’. I am therefore now able to resume blogging on it.

No explanation has been given as to why the blogspot was locked in the first place; so the reason for the problem will remain a mystery.

I should like to thank all of you who took the trouble to email Blogger / Google in support of me and the blogspot. I would like you all to know how much I appreciate your loyalty and support.

My thanks go to Blogger / Google for restoring this blogspot to full functionality.

So now it’s back to business as usual. This website will revert to its more appropriate subject matter: economics and finance.

Thank you again for your assistance.

Walid bin Talal Company Reports Huge Losses

AL BAWABA: The Kingdom Holding Company, owned by the Saudi tycoon Prince Walid bin Talal, reported a $8.26 billion net loss in the fourth quarter of 2008 after a decline in the value of its assets, including a substantial stake in Citigroup. Kingdom Holding said it lost 30.98 billion riyals ($8.26 billion) in the fourth quarter of 2008. That compares with a gain of 255.6 million riyals ($68.2 million) in the same period a year earlier. >>> © 2009 Mena Report ( | Wednesday, January 21, 2009

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Obama Offers ”New Way Forward” to Muslims

AL BAWABA: U.S. President Barack Obama promised a new start with the Muslim world in his inauguration address on Tuesday. "To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect," said Obama.

Under President George W. Bush, U.S. relations with Muslim nations have often been tense, mainly in the aftermath of the September 11, 2001 attacks.

In his speech, Obama said his policy will include forging peace in Afghanistan, leaving Iraq "responsibly," and working against the threats of nuclear power and global warming. Meanwhile, he said, "we can no longer afford indifference to suffering outside our borders." Instead, he pledged to work with poor nations to help them develop and flourish. [Source: Al Bawaba] © 2009 Al Bawaba ( | Tuesday, January 20, 2009

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Tuesday, 20 January 2009

Obama’s Inauguration

Watch BBC coverage of Barack Hussein Obama’s inauguration: The inauguration live >>> | Tuesday, January 20, 2009

Obama’s speech in full >>>

NZZ Online:
Obama macht den Amerikanern Mut: Neuer Präsident vereidigt – «Wir müssen uns selbst einen Ruck geben» >>> spi | Dienstag, 20. Januar 2009

«Wir haben Hoffnung gewählt – nicht Furcht» >>> | Dienstag, 20. Januar 2009

Erste Rede als Präsident: Obama will die Ideale Amerikas nicht aufgeben >>> | Dienstag, 20. Januar 2009

"So mir Gott helfe": Obama ist Präsident >>> | Dienstag, 20. Januar 2009

Obama : «L'Amérique a choisi l'espoir plutôt que la peur» >>> La rédaction du | Mardi 20 Janvier 2009
Président Obama >>> Par la rédaction, | Mardi 20 Janvier 2009

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The Changing Face of Britain

Watch BBC programme: New Nation: White, Welsh and Muslim >>>

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Crisis-hit Russians Tighten Their Belts

BBC: What would you do if your income was slashed by 80% because of the continuing downturn?

What choice would you make if your bosses asked you and your colleagues to agree either to a 50% salary cut or to reducing the firm's workforce by half?

Such a choice might seem unreal to a lot of professionals in the West, whose rights are protected by laws and unions, as well as by history itself, as these rights have been in place for decades or even centuries.

But these questions are now a reality for some people in crisis-hit Russia as it comes to the end of a decade-long boom, the first time in its existence that this has happened in a free-market economy.

The problem is that many Russians still get the bigger part of their salaries "in envelopes", even despite a flat 13% rate of income tax. Their official salaries may be no more than a couple of hundred dollars.

It all seemed fine to them when they did not have to worry about their jobs. But now it leaves them unprotected.

Their bosses do not need to fear the cost of making them redundant, as the severance money, calculated as the sum of several official monthly salaries, would be tiny in comparison even with an employee's real one-month salary.

That is why many professionals, who have had to agree to a 30% salary cut, consider themselves relatively lucky. >>> By Konstantin Rozhnov, Business reporter, BBC News | Tuesday, January 20, 2009

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Viewpoint: Optimism Is the Cure for the Downturn

BBC: Pessimism is the most serious cause for the global economic tsunami.

There is an ocean of people who are now feeling so depressed that not only have they become resigned to the fact that they are in deep trouble, but they have told everybody else that they are also in deep trouble.

Pessimism has an uncanny knack of being self-fulfilling.

No wonder almost every single quoted share in the world has gone down significantly, mostly by half, if not much more.

Even the most solid companies, such as HSBC, which has no real exposure; or BP, which has significant oil reserves; or a company like Dell, which has an enormous amount of cash - the shares of these companies have traded down considerably.

That is the barometer of our general pessimism. >>> By Sir David Tang, Entrepreneur | Wednesday, December 31, 2009

*Sir David Tang is the Hong Kong-born, English-educated entrepreneur who founded the clothing chain Shanghai Tang

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Sterling Slumps to Eight-year Low After Second Bank Bail-out

THE TELEGRAPH: Sterling tumbled below the $1.40 mark against the dollar for the first time in almost a decade and fell against the rest of the world's major currencies as the UK Government's second bail-out of the country's banks underlined the dangers facing the economy.

The pound, which was trading above the $2 mark less than 12 months ago, slumped to below the $1.40 mark for the first time since June 2001 in morning trading in London after registering a fall of more than three cents yesterday.

Currency traders have been aggressively selling the pound as the depth of the recession facing the UK becomes clearer. Interest rates are now at 2pc and most analysts expect the Bank of England to continue cutting close to zero in an effort to get money moving around the economy again.

"Sterling has struggled due to the announcement of the new policy measures, in addition to reports of big losses in the UK banking sector," analysts at UBS said this morning. >>> By Angela Monaghan | Tuesday, January 20, 2009

Bail-out Part II: Millions of Private Shareholders Could See Stakes Wiped Out: Millions of private shareholders could see a substantial part of their investments wiped out as a result of the "creeping nationalisation of the banking system", stock market investors warned last night. >>> By Harry Wallop, Consumer Affairs Editor | Tuesday, January 20, 2009

THE TELEGRAPH: Banking bailout: The Big Question

On a day that brought with it the worst corporate loss in British history, a vertiginous slide in banking shares and news of yet another financial bail-out package, it might seem perverse to focus on a mere rumour.

But as the market closed with experts facing the fact that the majority of the UK banking system is one step closer to nationalisation, the rumour hitting the floor was of a scale that was even more terrifying.

The word was that a leading agency was about to cut its rating on Britain's sovereign debt. Esoteric as it sounds, it is difficult to overstate the significance - if true - of such a situation. For it underlines the growing weight of opinion that Britain is inching ever closer to insolvency. >>> By Edmund Conway, Economics Editor | Monday, January 19, 2009

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Amtseinführung: Der Tag des ganz großen Obama-Wahnsinns

WELT ONLINE: Am Dienstag um 18 Uhr (MEZ) wird Barack Obama US-Präsident werden – an einem Tag des Wahnsinns. Bis zu einer Milliarde Dollar Gewinn sollen die Feierlichkeiten zur Amtseinführung abwerfen. Noch einmal wird der neue Präsident in Überlebensgröße inszeniert. Dann beginnt endlich sein Job.

Barack Obama erreichte Überlebensgröße in Wachstumsschüben. Von seiner ersten aufsehenerregenden Rede beim Parteitag John Kerrys 2004 über seine Ansprachen zu „Rasse“ und auf seinem Parteitag in Denver überragte die neue Gestalt ein ums andere Mal ihre alte Form. Das heroische Antlitz mit dem Blick in die ferne Zukunft aber gab dem Riesen ein Grafiker namens Shepard Fairey. Seine Poster, die klug mit „Hoffnung“ und „Wandel“ gezeichnet waren, nicht etwa mit dem Namen des Helden, sind in Amerikas Nationalfarben weiß-blau-rot gehalten und spielen so schamlos wie unschuldig mit Agitpropvorbildern aus dem sowjetisch-faschistischen Arsenal. >>> Von Uwe Schmitt | Montag, 19. Januar 2009

WELT ONLINE: Obamas Kabinett: Joe Bidens Frau verplappert sich bei Oprah Winfrey

Kurz vor seiner Vereidigung als Vizepräsident der USA bekommt Barack Obamas Stellvertreter Ärger: Seine Ehefrau Jill plauderte in einer Talkshow offen über die Verschiebung von Ämtern in Washington. Biden hätte offenbar auch Hillary Clintons Job haben können. Der Demokrat versuchte die Plauderei seiner Frau zu stoppen. >>> | Dienstag, 20. Januar 2009

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Obama: Sécurité maximale Plus que ses prédécesseurs, Barack Obama bénéficiera d'une sécurité maximale, ce mardi, tout au long de la cérémonie d'investiture qui doit l'installer à la Maison Blanche. Premier président américain noir, l'ancien sénateur de l'Illinois a fait l'objet de nombreuses menaces. Même si le département de la Sécurité intérieure a fait savoir qu'aucune menace "crédible" ne pesait sur lui.

Plus de 10 000 militaires, des avions de combat au dessus de Washington, ville décrétée en état d'urgence par George Bush, des vedettes de gardes-côtes sur le Potomac, sans oublier une limousine blindée, l'investiture de Barack Obama, attendue par le monde entier sur les coups de 17 heures (heure française), promet d'être ultra-sécurisée. Entre un et deux millions de personnes sont attendues sur le parcours du nouveau président des Etats-Unis, sur le National Mall, entre le Capitole et la Maison blanche [sic], et la crainte d'un geste fou contre le premier président noir des Etats-Unis hante les esprits. >>> Par | Mardi 20 Janvier 2009

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Public Anger Growing at 'Irresponsible' Banks

THE TELEGRAPH: Public anger over the "irresponsible" lending of Britain's banks intensified as MPs and unions criticised their conduct and even Gordon Brown felt compelled to express his anger as the latest bail-out package was announced.

Mr Brown admitted that taxpayers were justified at feeling angry that billions of pounds worth of their cash was being used to support the banks as a result of their behaviour.

As the rescue package was unveiled in the Commons, MPs from across the House condemned their excesses and called for greater constraints in future in return for the Government’s help.

Frank Dobson, a former Health Minister, said these "severe constraints" should encompass the pay and bonuses of bank bosses, adding that the measures unveiled by Alistair Darling would be acceptable to the public only if they were accompanied by "strict national and international regulation" to prevent further economic catastrophes. >>> By Rosa Prince, Political Correspondent | Monday, January 19, 2009

DAILY EXPRESS: Taxpayers Facing £1 Trillion Bill as Darling Bails Out the Banks…Again

ALISTAIR Darling unveiled another massive banking bail-out today, insisting it was “essential” to prop up the struggling economy.

The Chancellor and Prime Minister Gordon Brown staked hundreds of billions more of pounds of taxpayers’ money on a second bank bail-out in a bid to free up “blocked” credit markets and head off a worsening recession.

Among a series of measures, Mr Darling set out plans for a new insurance scheme to protect banks from so-called toxic assets, a move it is hoped will encourage institutions to restart lending to businesses and households.

It is the second bail-out for the banks in the space of just three months and could take the amount of taxpayers cash spent - or promised - to financial institutions to nearly £1trillion, or £1,000 billion. >>> By Geoff Marsh | Monday, January 19, 2009

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Monday, 19 January 2009

Trevor Phillips Warns that Britain Could Return to Racism as Recession Bites

THE TELEGRAPH: Britain risks becoming more racist as the recession increases resentment and division, the head of the equalities watchdog has warned.

Trevor Phillips claimed race relations have improved in the last 15 years and said we should no longer use the phrase "institutionally racist" to describe companies and public services.

However, the chairman of the Equality and Human Rights Commission added that this progress could be wiped out by the worsening economic crisis if, for example, poor Britons lose out to better qualified immigrants in the battle for scarce jobs. >>> By Martin Beckford, Social Affairs Correspondent | Monday, January 19, 2009

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Hamas Declares Victory in Gaza But Vows to Rearm against Israel

THE TELEGRAPH: Hamas declared victory over Israel on Monday but the Islamic group vowed to replenish its arms stockpiles in the wake of the 22-day onslaught on Gaza.

Ismail Haniya, the deposed Palestinian prime minister and political leader in Gaza, said the "armed resistance" had triumphed by surviving the Israeli operation.

A masked gunman from the Islamic group's armed wing said it would rearm in defiance of efforts to stop weapons smuggling into Gaza, a key aim of the war. "Do whatever you want," said Abu Obeida, spokesman for the Izzadin al-Qassam Brigades. "Manufacturing the holy weapons is our mission and we know how to acquire weapons." >>> By Damien McElroy in Jerusalem | Monday, January 19, 2009

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Australian Novelist Harry Nicolaides Jailed for Insulting Thai King

Photo of Harry Nicolaides courtesy of The Times

TIMES ONLINE: An Australian novelist was jailed for three years by a Bangkok court today, the latest in a growing number of Thais and foreigners prosecuted for the crime of “insulting” the family of King Bhumibol Adulyadej.

Harry Nicolaides, a 41-year old teacher and part time writer was convicted on the basis of a 103 word paragraph about the alleged sexual peccadilloes of the royal family, particularly Crown Prince Maha Vajiralongkorn.

He could have received a sentence of as much as twelve years and his decision to reverse an earlier plea of not guilty persuaded the judge to hand down the minimum sentence possible for the crime of lese majeste, or insulting the monarchy.

“He has written a book that slandered the king, the crown prince of Thailand and the monarchy,” the judge told the court. >>> Richard Lloyd Parry | Monday, January 19, 2009

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Weiße Südstaatler trauen Obama noch immer nicht

WELT ONLINE: Die Kandidatur von Obama hat viele schwarze und junge Wähler mobilisiert, vor allem in den Südstaaten. Doch zugleich zeigt sich auch das verstörte, das reaktionäre Gesicht des amerikanischen Südens. WELT ONLINE besuchte einen republikanischen Wähler, dem selbst John McCain noch zu "liberal" war.

Ed Buren hat Angst vorm schwarzen Mann. Vor dem, der am 20.Januar ins Weiße Haus einziehen wird, und auch sonst. „Ich will nicht, dass so einer über mich und mein Leben entscheidet“, sagt er. Und setzt hinzu, drohend beinahe: „So einfach ist das.“ Den Namen des gewählten US-Präsidenten Barack Obama nimmt er nicht in den Mund, nur dessen Mittelnamen wiederholt er gerne: Hussein, wie Saddam. 

Ed Buren lebt in Stone Mountain, einem kleinen Dorf östlich von Atlanta im Bundesstaat Georgia. Er wirkt wie ein Abziehbild aus dem Buch der Klischees, ein Redneck, so heißen hier die weißen, reaktionären Hinterwäldler. An seinem Pick-up-Truck weht eine zerrissene Konföderiertenflagge, die Flagge der Südstaaten, die den Sezessionskrieg 1865 verloren. Vom Rückspiegel baumelt ein Kreuz aus weißem Plastik. Er ist um die 50, vielleicht auch jünger, mit schlechten Zähnen und schütterem Haar; so unauffällig sieht er aus, dass man ihn schnell vergisst. Ihn selbst vielleicht, aber nicht seine Worte. Die mögen dumpf klingen, bizarr und von der Zeit überholt, doch Stimmen wie die von Ed Buren sind häufiger zu hören seit den Wahlen vom 4. November, meist hinter vorgehaltener Hand.

Vor allem im amerikanischen Süden, jener Region, die immer wieder daran erinnert, wie tief die Wunden waren, die der Bürgerkrieg schlug. Die daran erinnert, dass die Zeit der Rassentrennung in Amerika nicht einmal 50 Jahre zurückliegt und dass der Boden noch immer fruchtbar ist. >>> Von Katja Ridderbusch | Montag, 19. Januar 2009

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