"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Tuesday, May 31, 2011

World News!

  • In "well, it guess things could be worse" news, the central bank of Belarus has raised its main interest rate from 14% to 16% in an effort to fight inflation (which is projected to hit 39% by year end), and is also negotiating a $3 billion bailout with Moscow.
  • In "OMG!!! A/S/L??? how I mine for fish?!?!" news, Chinese prisoners are claiming that Chinese prisons have found a unique way to raise money:  gold farming.  Well, one prisoner is claiming that.  An official at the central office for labor camps in Heilongjiang denies this claim, pointing out "We do not have large numbers of computers.  And we do not allow our prisoners to have any contact with the outside world.  If they were playing these online games they could easily communicate with other people.  We would never allow that."[1]
  • In an effort to prevent some 2 trillion yuan worth of municipal debt defaults, Chinese regulators have unveiled a plan to have the Chinese government buy the bad debt, eat some of it, and shift some of it on to newly created companies.
  • China's Foreign Ministry says that the protests that have erupted in Inner Mongolia after two Mongolians were killed by an ethnic Chinese, are the result of foreigners stirring up trouble.  Which foreigners, or what the alleged foreigners hope to achieve, has not been announced.
  • Look for the price of a cup of coffee to go up over the year.  Due to a combination of storms in Colombia (which reduced the harvest by about 10%) and increasing global demand, the cost of arabica coffee will most likely remain in the range of $2 to $3 per pound for at least a year.  Starbucks has already responded by raising the price of bagged coffee by an average of 17%.
  • "Who didn't see this coming" news:  If you recall from last week, South African President Jacob Zuma was going to travel to Tripoli and try to negotiate Muammar Gaddafi into voluntarily stepping down and leaving Libya.  Well, he has done so.  President Zuma's office issued a statement stating that "Col. Gaddafi called for an end to the bombings to enable a Libyan dialogue.  He emphasized that he was not prepared to leave his country, despite the difficulties."
New Zealand
  • In 'just... ow" news, Steven McCormack survived being blown up "like a football" after falling on a compressed air hose that pierced his buttock and literally inflated him.  Mr. McCormack is currently hospitalized and doctors are surprised that a) his skin didn't rupture as the compressed air separated fat from muscle and b) he is still alive.
  • Senior EU finance officials are meeting today to consider options for a second bailout package for Greece, which faces a funding gap of over 60 billion euros for 2012 and 2013.  Some options include a debt rollover (in which existing bond holders voluntary agree to reinvest all of the maturing capital into new Greek debt) and either a partial or full restructuring of Greek debt[2]. 
  • Outgoing ECB Executive Board member Gertrude Tumpel-Gugerell said that the ECB would be unwilling to accept either full or partial restructuring[2] of Greek debt, but declined to comment on whether or not the ECB would accept a debt rollover.
  • Ratko Mladic's appeal to not be extradited to The Hague on medical grounds has been rejected by Serbia's war crimes tribunal.  Doctors that examined him said he was well enough to travel, and he is likely to be extradited some time today.
South Africa
  • The emerging nations, largely headed by the non-Russia part of the BRICS, are still deciding whether to nominate their own candidate for head of the IMF.  Right now, Brazil is debating between Christine Lagarde and Agustin Carstens, and South Africa is considering naming its own candidate.
  • In "expect to see mass firings in 2013 news", Wal-Mart has been given the go-ahead to buy local retail chain Massmart on the condition that it not fire workers in the first two years of ownership, it give preference to re-hiring 500 staff that were laid off in 2010, and it have a program for developing local suppliers.
  • Syrian troops, supported by tanks and helicopters, have pursued "armed terrorist gangs" in Rastan and Talbisa by doing a door-to-door search of the two cities.  The "armed terror gangs", which strongly resemble and behave like ordinary civilians (up to and including not actually being armed or moving in gangs) have not been positively identified, but the Syrian government insists that the more than 1000 people killed by Syrian forces since March were both "armed"[3] and involved in "gangs of terror"[4].  In a nod to international concerns about human rights abuses, the tanks did not actually open fire.
United Kingdom
  • In "I am intrigued by your ideas and wish to subscribe to your newsletter" news, Lord Taylor of Warwick, a former Conservative peer of the House of Lords, has been sentenced to 12 months in jail for falsely claiming £11,277 in parliamentary expenses.  He had pled not guilty on the grounds that he claimed that he was told by senior peers that it was normal practice to make false expense claims, and then argued that he should not face prison because, as a peer, his crimes were less serious than those of MPs[5] who committed similar crimes.  The court was unimpressed by the argument, calling his actions "a breach of a high degree of trust".
  • Oxfam International, whose website is currently offline, has released a report ("Growing a Better Future").  The report indicates that the cost of staple crops could increase by between 120% and 150% by 2030 as population growth accelerates and crop yield growth declines.
United Nations
  • According to an estimate by the International Energy Agency, worldwide CO2 emissions reached 30.6 gigatons in 2010, 5% above the previous record in 2008.  10 tons come from the OECD nations, China emitted 5.8 tons, and India emitted 1.5 tons.
United States:
  • In "amazing perks of the job" news, I think this headline sums it all up:  "FBI seizes Ferrari, takes joy ride, crashes and then refuses to pay".
  • Are you married?  Congratulations.  According to findings of the US Census, you are now part of a minority group among US households.  Only 48% of all American households are married couples, and only 20% are "traditional" families (married couple with one or more children).
  • Governor Pete Shumlin of Vermont has signed the nation's first single-payer health care system into law.  The law authorizes the creation of the Green Mountain Care Board, which will "first aim to rein in the rising cost of healthcare in the state - a rate that is 12 times faster than the state's economy.  The five-member board will be charged with creating a reimbursement system for doctors and hospitals, a benefits package and the method for financing the system."  It is anticipated that it may take up to five years to fully implement the plan.
  • In "broker and dictator fail" news, internal Goldman Sachs documents show that the firm invested more than $1.3 billion of Libya's sovereign-wealth fund[6] and lost 98% of the value of the investments in 2008.  Goldman then offered to recoup the losses for Libya, including one offer to sell $5 billion in preferred Goldman shares to the sovereign-wealth fund for $3.7 billion.
  • Army Chief of Staff Martin Dempsey has been nominated as the new Chairman of the Joint Cheifs of Staff.
  • Lockheed Martin's computer systems were accessed by hackers on May 21.  The defense contractor says the attack was detected quickly and that "no customer, program or employee personal data has been compromised".  No information about the source of the attack was released.
[1]  Which is a pretty compelling argument.  For once, China's human rights record is helping support their claims about their treatment of prisoners.
[2]  A process known as "defaulting" when corporations do it.
[3]  And probably "legged" as well.
[4]  Large groups of people, huddled together in terror, could be - through some perversion of English - called "terror gangs".  Or, at least, "terrified gangs".
{5]  Who are members of the House of Commons, and who do not have titles of nobility.
[6]  The investments were a basket of currently options and six stocks:  Citigroup, UniCredit SpA, Banco Santander, Allianz, Electricite de France, and Eni SpA.

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