NEWS,19.11.2012

Global shadow banking hits $67 trillion

The system of so-called shadow banking blamed for aggravating the global financial crisis grew to $67 trillion globally last year, a new high, amid calls from the world's top policymakers for greater control of the sector.A report by the Financial Stability Board (FSB) on Sunday appeared to confirm fears among policy makers that shadow banking is set to thrive, beyond the reach of a regulatory net tightening around traditional banks and their activities.Officials at the European Commission in Brussels see closer control of the sector as important in preventing a repeat of the financial crisis that toppled banks over the past five years and rocked the euro zone.The study by the FSB, set up by the world's top economies (G20) to police global finance, said shadow banking around the world more than doubled to £62 trillion in the five years to 2007 before the crisis struck.But the size of the total system had risen to $67 trillion in 2011, more than the total economic output of all the countries in the study.The multi-trillion dollar activities of hedge funds and private equity companies are often cited as examples of shadow banking.But the term also covers investment funds, money-market funds and even cash-rich firms that lend government bonds to banks, and which in turn use them as security when taking credit from the European Central Bank Even the man credited with coining the term, former investment executive Paul McCulley, gave a catch-all definition.McCulley said he understood shadow banking to mean "the whole alphabet soup of levered up non-bank investment conduits, vehicles and structures", such as the special investment vehicles that many blamed for the financial crisis.The United States had the largest shadow banking system, said the FSB, with assets of $23 trillion in 2011, followed by the euro area with $22 trillion and the United Kingdom at $9 trillion.The US share of the global shadow banking system has declined in recent years, the FSB said, while the shares of the United Kingdom and the euro area have increased.The FSB warned that tighter rules that force banks to hoard more capital reserves to cover losses could bolster shadow banking.It advocates better controls, although cautions that shadow banking reforms should be dealt with carefully because the sector can also be a source of credit for business and consumers.Forms of shadow banking can include securitisation, which can transform bank loans into a tradeable instrument that can then be used to refinance credit, making it easier to lend.In the run-up to the crisis, however, banks such as Germany's IKB stored billions of euros of such instruments in off-balance sheet vehicles, which later unravelled. Another example is a repurchasing agreement, or repo, where a player such as a hedge fund could sell government bonds it owns to a bank, agreeing to repurchase them later.The bank may then lend those bonds onto another hedge fund, taking a position on the government debt. Such agreements are used by banks to lend and borrow. A risk could arise if one of the parties in the chain collapses.The European Commission is expected to propose EU-wide rules for shadow banking next year.

 

Stocks, commodities rise on fiscal cliff hopes

World share markets and commodities surged yesterday as traders focused on politicians' indications that they are ready to compromise to avoid the US "fiscal cliff".Wall Street stocks climbed more than 1%, extending a rally that began on Friday, while crude oil was up more than 2%.US lawmakers indicated compromises were possible in negotiations to avert US$600 billion in tax increases and spending cuts due to start in January - the "fiscal cliff" that threatens to send the US economy back into recession.Democratic Senator Dick Durbin said on CNN: "What I hear is a perceptible change in rhetoric from the other side."Also appearing on CNN, Republican Representative Tom Price said: "Every member of our caucus appreciates that this fiscal crisis, this challenge that we have, is ever closer."Opinion polls show that Republicans would shoulder more of the blame if the country goes over the fiscal cliff.MSCI's world equity index jumped 1.8%, in one session erasing the 1.8% drop it posted last week. Monday was the best day for the index since September 14."Stocks could rise substantially if US policymakers can negotiate a 'grand bargain' that credibly addresses long-term tax, spending, and entitlement reforms," said Jonathan Golub, strategist at UBS in New York.The Dow Jones industrial average was up 160.54 points, or 1.28% , at 12,748.85. The Standard and Poor's 500 Index was up 21.22 points, or 1.56%, at 1,381.10. The Nasdaq Composite Index was up 46.39 points, or 1.63%, at 2,899.52.Optimism in Europe over the prospects of a deal this week to release much-needed aid for Greece also lent support.European officials are expected to discuss a two-year funding plan for Athens at a meeting on Tuesday, which would postpone any longer-term solution until after a September 2013 German general election.European Central Bank policymaker Joerg Asmussen said last weekend that the ministers were likely to agree to the deal and leave resolution of a longer-term debt stabilisation plan for Greece, at the heart of a disagreement with the IMF, until later.The euro rose 0.56% to $1.281, well above the two-month low of $1.2661 hit last week and near the top end of its recent range, suggesting the foreign exchange market expects an agreement on Greece."This message from the ECB would tell me that, yes, what we are heading to this week is an agreement that would keep Greece out of trouble for the next year or so," said Gilles Moec, senior European economist at Deutsche Bank.European share markets rebounded from last week's lows, mainly on the growing optimism over the US political negotiations.The FTSE Eurofirst 300 index of top European shares closed 2.3% higher, led by sectors tied to the pace of economic growth. Banks climbed 3.6% , with US shares of Barclays up 5.6% to $15.82.In the region's main centres, London's FTSE 100, was up 2.4%, while Frankfurt's DAX and Paris' CAC-40 rose more than 2%.Safe-haven bond markets reflected the stronger risk appetite, with the 10-year US Treasury down 10/32 to yield 1.6165%.The 10-year German government bond fell and its yield rose to 1.362% from 1.326% on Friday. Traders said there was room for yields to rise if euro zone policymakers reached an agreement at their meeting on Tuesday.In the currency markets, the dollar briefly extended its gains against the yen on expectations a new Japanese government will push the central bank to taking aggressive monetary stimulus measures to boost growth after next month's elections.The greenback was slightly lower against the yen at 81.24. Earlier, it rose to its highest level since April 25.The Bank of Japan began a two-day meeting on Monday but was not expected to take any new policy steps before the December 16 vote.The rising hopes of a deal on closing the US budget gap, which has clouded the outlook for global growth, spread through commodity markets, lifting oil, copper and gold.Copper rallied 2.6% to $7,803.5 a ton on the London Metal Exchange, and gold rose $19.52 to $1,733.2 an ounce.A 0.5% drop in the dollar index, which had eased from a two-month high hit on Friday, added to demand by making commodities priced in the greenback more affordable for buyers holding other currencies.Brent crude rose above $110 a barrel as the escalating violence between Israel and the Palestinians fuelled concern about supplies from the Middle East.Investors fear the conflict may draw in other countries and possibly disrupt energy exports from the region, which supplies more than a third of the world's crude.Brent crude for January delivery was up 2.5% and U.S. crude futures added 2.8%.

 

European stocks make biggest rebound in 10 weeks

European equities have rebounded from multi-month lows to post their biggest daily gain in 10 weeks, thanks to signs of progress in US talks to avoid a budget crisis.Leading Democratic and Republican lawmakers voiced confidence over the weekend that a deal would be reached to avoid the so-called "fiscal cliff" of some US$600 billion of tax hikes and spending cuts which threatens to plunge the United States into recession in 2013.An unexpected rise in US existing home sales for October added to the brighter sentiment towards the world's biggest economy on Monday, which has become a significant source of growth for European companies as their domestic region stagnates."The news about the fiscal cliff over the past few days has been much more positive," said Donald Huber, portfolio manager at Franklin Templeton Investments, which has about US$750 billion in assets under management.The FTSEurofirst 300 index provisionally closed up 2.3% to 1,091.50 points, while the EuroSTOXX 50 rose 2.8% to 2,495.19 points -- both posting their biggest one-day gain since early September and rebounding from multi-month lows.The rebound comes after EuroSTOXX 50 dipped into technically oversold territory on the seven-day relative strength index (RSI) on Friday for the first time in nearly two months.Then, a big rally followed but ran out of steam after two sessions, and this time too analysts were doubtful about the sustainability of the gains unless the fiscal cliff problem is actually resolved rather than just postponed."We had the lows and the market is oversold... so it is just short-covering," said Vincent Guenzi, chief strategist at Cholet Dupont."That [progress in negotiations] was the catalyst for the short-term gain of the market. That could help the market maybe gain 1% or 2% more, but to really have the end of the downtrend of the last weeks we need something real."Monday's broad-based rally took all the STOXX 600 sector indexes into positive territory, led by economically sensitive ones like autos, banks, construction, technology and basic resources.Healthcare, which is less dependent on economic cycles for demand, lagged with a rise of 1%.Nokia was a top gainer among individual stocks, with reports of its Lumia 920 selling out in Germany fuelling hopes of strong demand for the new smartphone.Shares in the Finnish cellphone maker added 9% on Monday, but are still down 39% since the start of 2012.Nokia is the most shorted company in EuroSTOXX 50, with 19.7% of outstanding shares on loan according to data from Markit, potentially making it vulnerable to sharp short-covering rallies on any sentiment improvement or positive news.That gives Nokia a utilisation rate - shares borrowed versus the total number available for loan - of 93.5%, against just 6.2% for EuroSTOXX 50 as a whole.

NEWS,21.08.2012

Israel's Posturing: Behind Netanyahu and Barak's Threats to Attack Iran

Successive Israeli governments have consistently inhibited in the past any public discussion about Iran's nuclear program and what Israel might do to prevent Iran from acquiring nuclear weapons. In recent weeks however, Prime Minister Netanyahu and Defense Minister Barak have been openly discussing the issue while intimating their readiness to take whatever actions necessary to eliminate the Iranian threat. The question is why Netanyahu and Barak have chosen to "advertise" their deep concerns now and why they have such an urgency to act at this particular juncture, both of which have prompted newspaper reporters and bandits to speculate about what the real intentions are behind this public exposure and what is to be expected. Meanwhile, former and current officials, including President Peres, have expressed pointed objections to taking any unilateral military strikes against Iran, insisting that if such action became necessary, it must certainly be led by the U.S. to shield Israel from being singled out and blamed for the potentially disastrous regional consequences.Having concluded that sanctions and diplomacy have failed as Iran is either technologically nearing the point of no return or achieving a zone of immunity that will make their most advanced nuclear plants at Fordo (near Qom) impregnable to air attack, the Netanyahu government has decided on a new strategy designed to achieve multiple purposes. While Israel's determination to prevent Iran from acquiring nuclear weapons has not changed, the new strategy is meant to strongly convey that Israel is not bluffing. Israel's groundwork for the new strategy is as follows: Israel will alert its closest ally, the U.S., alarm its European friends, credibly threaten Iran and gather more information, warn other enemies such as Hezbollah and Hamas, test the private sentiments and public reactions of the Sunni Arab states, and will finally prepare the Israeli public while laying in wait for the right moment to strike, should everything else fail.The Netanyahu government has already expressed its displeasure with the strategy the Obama administration has adopted to prevent Iran from obtaining nuclear weapons. Whereas many Israelis believe that President Obama's credibility is on the line and he will act militarily should it become necessary, others, including Netanyahu and Barak, are not so sure. They are concerned that Obama may eventually have to choose between preventing or containing Iran and will settle on the latter by providing Israel and other Arab allies in the region with some kind of security umbrella.Netanyahu and Barak are troubled by the fact that Obama has relied excessively on a diplomatic solution knowing full well that the Iranians are masters of playing for time. Moreover, he chose to impose gradual sanctions to which the Iranian government was able to adjust instead of inflicting real, crippling sanctions, especially after the failure of the first few sets of negotiations, which could have forced Tehran to change course. This approach, from the Israeli perspective, played into Iran's hand while engaging the P5+1 (the U.S., the United Kingdom, France, Russia and China plus Germany) in futile negotiations that have never stood a chance of success.By asking the P5+1 to declare that the talks with Iran have failed, Netanyahu is alerting the U.S. that time is of the essence and challenging Obama to take more decisive actions against Iran. Netanyahu's rationale is that since Obama seeks to prevent an Israeli attack in an election year, he will be under immense pressure from his presidential rival, Mitt Romney, not only to adopt a final set of truly crippling sanctions but tobe clear about his willingness to use force against Iran before it reaches the point of no return or enters the zone of immunity.Netanyahu's message of alarm is directed against the EU, Turkey and China, which will be the most affected by the potential disruption of oil supplies should the Strait of Hormuz become imperiled. Netanyahu and Barak are convinced that the EU in particular is engaged in wishful thinking, believing that continuing diplomatic efforts coupled with stiffer sanctions will force the Mullahs to come to their senses. The EU clearly view Netanyahu as overzealous about Israel's national security, are extremely worried about an Israeli attack and are convinced that the repercussions will be catastrophic. Thus, for them, no attack should be contemplated as long as Iran is willing to continue to talk.Using the repeated Iranian existential threat against Israel, and while observing the Western powers' ineptitude in the past in dealing with the genocide in Bosnia, Sudan and now the wholesale slaughter in Syria, Netanyahu has little faith in what the EU can, or will, do to bring Iran to a halt. The EU, from Netanyahu's perspective, could have done a great deal more to cripple Iran economically but it still has yet to do so. At the same time, the EU refuses to declare Hezbollah, Iran's prime surrogate but Israel's staunchest enemy, as a terrorist organization while it continues to allow Hezbollah to freely raise tens of millions of dollars in Europe, when much of it is used for buying armaments to target Israel.The direct threat against Iran is based on Netanyahu and Barak's calculation that although public discussion about the potential attack on Iran provides Tehran more time to prepare for the worst, it will provide Israel with certain advantages. Fear of an imminent Israeli attack will force the Iranian authorities to take additional security measures to protect their nuclear facilities, which will reveal Iran's preparedness and capabilities, and expose its weaknesses and how much of its boastings of a damaging counter-attack against Israel are in fact accurate. Importantly, Israel will also be in a position to better assess the Iranian public's reaction and whether the rumors of an imminent attack will precipitate panic, which may reveal how the Iranian authorities react and pacify the public. More than anything, Israel wants Iran to take its threats seriously, which explains why Netanyahu and Barak openly stated that when it comes to Israel's national security, Israel must, in the final analysis, rely only on itself. Netanyahu's and Barak's exposé is also intended to warn all those who might think of coming to Iran's aid by engaging Israel on another front (in particular with groups such as Hezbollah and Hamas) that they should think twice before they dare to provoke Israel. By openly discussing their intentions, Netanyahu and Barak want these groups or states to assume that Israel would not have discussed such a sensitive national security matter had it not taken into full consideration their potential involvements. The message to Hezbollah is clear: there will not be a repeat of the 2006 war, Israel will break its back and that this time around no one will come to its aid considering Syria is in shambles and Iran is under intense economic pressure and too busy to deal with the potentially catastrophic effects of an Israeli attack.The other target of Israel's open discourse on attacking Iran is to test the Sunni Arabs, especially the Gulf States led by Saudi Arabia. There have been ongoing tacit discussions between Israel and the Gulf States about the potential Israeli strike and how that might affect both their public reactions and their private interests and concerns. There is no doubt that all Sunni Arab states would prefer to prevent Iran from attaining nuclear weapons peacefully. But after failing to do so by diplomatic means, they would support an attack on Iran's nuclear facilities, whether the attack is carried out by Israel, the U.S. or through a joint effort. Saudi Arabia in particular sees the conflict between Shiites verses Sunnis in terms of regional domination with a focus on the Gulf, and views Iran with nuclear weapons as a nightmarish scenario that must be prevented at all costs. Finally, Netanyahu's and Barak's message was intended for the Israeli public not only to prepare them for a potential Iranian counter-attack but to begin psychological and logistical preparations ( including the distributions of gas masks, stocking underground shelters with food and water) to avoid public panic and rally the nation around the government's prospective actions. Although the Netanyahu government is not dismissive of the voices of the Israelis who consider a unilateral attack as ill-conceived and extremely risky, Netanyahu and Barak want to demonstrate unshakable resolve in the face of an existential threat and that the public can ultimately trust their judgment. Moreover, such an exercise, even if a strike is avoided either because of the United States or because of Netanyahu's/Barak's readiness to act, will be good for Israel and good for the entire region as long as Iran never acquires nuclear weapons.Israel has time and again stated in the past that it will not allow Iran to acquire nuclear weapons or the technology to quickly assemble such arsenals. The Israelis insist that whatever repercussions arise from attacking Iran's nuclear facilities will be far less ominous than allowing Iran to obtain nuclear capabilities, which will have far more reaching geopolitical and security implications that will adversely affect every state in the region.In the final analysis, an Israeli strike on Iran's nuclear facilities may not come as soon as many predict. The strike can and may well happen but it is very unlikely that such an incredibly ominous undertaking will occur without a minimum of U.S. acquiescence, if not outright support and direct involvement. Regardless of how much Netanyahu and Barak may be sure of themselves and Israel's military capabilities, they cannot afford to make any mistakes or miscalculations because Israel's future is on the line.Yet, exactly because of that, no one should think for a moment that Israel is bluffing. Netanyahu and Barak have concluded that diplomacy has run its course and only extraordinary, crippling and immediate sanctions may still have a slim chance of success. Once Israel determines that Iran has either achieved the point of no return or is about to reach the zone of immunity and the U.S. is not prepared to take military action, Israel will attack Iran singlehandedly and no consequences of such an attack, from the Israeli perspective, will fare against such an existential threat.

China's scramble for patents

China's ambitious drive to produce millions of new patents in the next few years as part of a switch from a "made in China" to "designed in China" economic model will curtail innovation standards, a European study warned today.China is seeking to transform itself from being the world's factory floor into a global pioneer by setting ambitious state-mandated patent targets -- a goal that has already resulted in it surpassing the United States last year in patent filings.The European Union Chamber of Commerce said in a report that China filed more than 1.6 million patent applications in 2011, but only 32% met the highest threshold for patent quality - new inventions.The study noted that while China's innovation potential is "impressive", its actual innovation is "overhyped"."This explosion (of patent applications) has come with a price in terms of the quality and mix of patents. This is not in the right direction," European Chamber Secretary General Dirk Moens said.In some cases, financial incentives and performance evaluations for state-owned firms, officials and academics drive the filing of low-quality patents as they seek to meet quotas - 2 million annually by 2015 under one national plan.In addition to inventions, China also gives patents for designs and "utility models", incremental developments that can advance an existing product but rarely result in technological breakthroughs.The United States does not use utility model patents, though some developed countries, such as Germany, do.Sixty-five percent of patent applications filed by medium and large-sized Chinese state-owned enterprises in recent years have been for the lower end design or utility model patents, making them among the country's least effective innovators, the study said."One cannot drive or 'force' creativity, but only nurture it, whereas creativity leading to breakthroughs of the type that typically produce the highest quality patents at best comes in spurts," it said, noting that at least 20 countries have greater innovation potential than the world's second largest economy.But Elliot Papageorgiou, an intellectual property expert at Rouse Legal in Shanghai, said utility model patents are good for China."In developing economies, you're not going to get a new wheel, you're going to get an improved or cheaper wheel," Papageorgiou.Indigenous rules rile foreigners Experts say weak intellectual property rights (IPR) have scared off some foreign firms from transferring technology or filing patents in China. Last year, U.S. Treasury Secretary Timothy Geithner lamented Beijing's lax controls that made possible the "systematic stealing" of American innovations.China has said it would drop some of its "indigenous innovation" rules that have riled foreign companies who say access to government equipment and technology orders hinge on their transferring patents and other intellectual property to Chinese firms or partners.But the EU Chamber study said indigenous intellectual property ownership was still a requirement for firms to access some Chinese government financing and subsidies, with the language writ large into many of the country's more than 10 national and 150 sub-national patents target plans."The essence of the IIP (indigenous innovation policy) system, in terms of setting forth controversial IPR requirements with financial incentives, appears very much still in force," the study said.

NEWS,15.08.2012

U.K. Recession Drives More Than 1,000 To Suicide: Study

 

A painful British economic recession, rising unemployment and biting austerity measures may have driven more than 1,000 people in England to commit suicide, according to a scientific study published on Wednesday.The study, a so-called time-trend analysis which compared the actual number of suicides with those expected if pre-recession trends had continued, reflects findings elsewhere in Europe where suicides are also on the rise."This is a grim reminder after the euphoria of the Olympics of the challenges we face and those that lie ahead," said David Stuckler, a sociologist at Cambridge University who co-led the study, published in the British Medical Journal (BMJ).The analysis found that between 2008 and 2010 there were 846 more suicides among men in England than would have been expected if previous trends continued, and 155 more among women.Between 2000 and 2010 each annual 10 percent increase in the number of unemployed people was associated with a 1.4 percent increase in the number of male suicides, the study found.The analysis used data from the National Clinical and Health Outcomes Database and the Office of National Statistics.Keith Hawton, a professor at the Centre for Suicide Research at Oxford University who was not involved in the study, said its findings were "of considerable interest and certainly raise concerns", but that they must be interpreted carefully."It is also important that they are not over-dramatised in a way that might increase thoughts of suicide in those affected by the recession," he said in an emailed comment.Stuckler, who worked with researchers from Liverpool University and the London School of Hygiene and Tropical Medicine, stressed while this kind of statistical study could not establish a causal link, the power of the associations was strong. Its conclusions were strengthened by other indicators of rising mental health problems, stress and anxiety, he added.He also pointed out the study showed a small reduction in the number of suicides in 2010 which coincided with a slight recovery in male employment.A survey of 300 family doctors published by the Insight Research Group on Tuesday found that 76 percent of those questioned about the effects of the economic crisis said they thought it was making people unhealthier, leading to more anxiety, abortions and alcohol abuse.Data this month from the government's Health and Social Care Information Centre showed the number of prescriptions dispensed in England for antidepressants rose 9.1 percent in 2010.A study published last July, also by Stuckler, found that across Europe, suicide rates rose sharply from 2007 to 2009 as the financial crisis drove unemployment up and squeezed incomes.The countries worst hit by severe economic downturns, such as Greece and Ireland, saw the most dramatic increases in suicides.In Britain, there's little doubt times have been getting harder. The economy has shrunk for the last nine months and now produces 4.5 percent less than before the economic crisis.Many Britons have had the worst squeeze in living standards for 40 years and the crisis has hit young people hard, with youth unemployment soaring above 20 percent.Stuckler's BMJ study found that the number of unemployed men rose on average across Britain by 25.6 percent each year from 2008 to 2010, a rise associated with a yearly increase in male suicides of 3.6 percent."Much of men's identity and sense of purpose is tied up with having a job. It brings income, status, importance..." Stuckler said in a telephone interview."And there's also a pattern in the UK where men are three times more likely to commit suicide than women, while women are much more likely to report being depressed and seek help."Hawton noted that increases in suicides at times of economic recession had been reported before - for example in the Great Depression of the 1930s and in the economic downturn in South-east Asia during the 1990s.The World Health Organisation estimates that every year, almost a million people die from suicide - a rate of 16 per 100,000, or one every 40 seconds. It also estimates that for every suicide, there are up to 20 attempted ones.

HSBC gives US staff details for tax probe

Global bank HSBC has handed over details of current and former employees to the US authorities, it confirmed today, as part of a tax probe that almost sank rival bank UBS in 2009.As a result the bank could now face legal action from individuals whose details have been revealed, lawyers representing them said.In a letter to them seen by Reuters, the bank said it had passed on documents, in which their names appear, on the request of US authorities looking to hunt down US citizens with untaxed money held in Swiss accounts.After passing on a first set of documents earlier this year, HSBC has sent the new batch to the US Department of Justice and the Securities and Exchange Commission in an effort to reach a settlement over the investigation.HSBC lawyer Lenz & Staehelin has told lawyers acting for these employees that the documents included the minutes of executive, board and audit committee meetings, client visit reports, emails and other correspondence "We have submitted further information to the US authorities but it concerns the initial enquiry from December 2011. Client information has clearly not been submitted," HSBC Private Bank spokesman Medard Schoenmaeckers said by telephone.Banks including HSBC, Credit Suisse and Julius Baer have already passed on about 10,000 employee names in an attempt to avoid the fate of private bank Wegelin, which broke up in January under threat of indictment, bank employees and lawyers said.Credit Suisse said its cooperation with the US authorities was also in the interests of the bank and its employees. Baer declined to comment.Lawyer Douglas Hornung, who has filed a complaint against HSBC on behalf of its former chief legal counsel, said banks who handed employee names to US authorities infringed the criminal code and Swiss privacy laws.HSBC has avoided breaching strict Swiss banking secrecy laws by redacting from the documents any information that could lead to the identification of clients, said Lenz & Staehelin in a letter to lawyers acting for current and former employees of the bank.In 2009 the Swiss authorities reached a deal for UBS to pay a fine of $780 million to avert criminal charges, and ultimately agreed to allow the bank to reveal details of around 4,450 clients.Hornung said banks that hand over employee data to US officials are hoping to reduce the potentially huge fines they might face if they are found to have helped US clients avoid tax."HSBC could face a much higher fine than UBS, $1.3 to 1.4 billion would be logical. In cooperating HSBC can expect the fine to be lowered significantly," said Hornung.The benefit of such a reduction for cooperating would far outweigh anything the banks would have to pay for breaching obligations to employees in Switzerland, where the maximum fine is 5 million Swiss francs ($5.15 mln) and there are no punitive damages, Hornung said.A spokeswoman for the Swiss Attorney General confirmed that a legal complaint against HSBC had been received and said it was considering whether to open an investigation.A former HSBC employee, who asked not to be named, told Reuters he had never dealt with US clients and only realised US officials had his name during a background check when he was shortlisted for a new banking job.He was not offered the job."It can be difficult to inform former employees because as a company we don't keep records of their whereabouts. If they contact us, then we do inform them," Schoenmaeckers said.But Hornung, a partner at Geneva-based Hornung Avocats, said allegations of professional damage might be hard to prove."I have spoken to five or six people in the same situation, which means there is some chance of demonstrating a direct link between being on the list and difficulties in finding further employment," said Hornung.Bruno Seeman, a lawyer from small but locally renowned Zurich law firm Anwaltsbuero Landmann who is representing another former HSBC employee, said those wishing to sue the bank were unlikely to get any help from the largest law firms."The big five in Switzerland are all employed by the large banks, all the big commercial law firms with the capacity and know-how to act against big Swiss organisations cannot do so because it would be a conflict of interest," Seemann said."The effect is to prevent employees from approaching them because these law firms can't act against existing clients."

NEWS,08.08.2012

Will Manufacturing Make China a Democracy?

 

The other day, I had lunch with an economist I respect and admire. I asked him, what would it take for China to become a modern democracy and build a strong middle class? OK. I didn't ask him that. I told him that China would need strong institutions of civil society, and a deeper sense of Social Contract to become a stable modern democracy with a dynamic middle class.In America's early history, we had strong institutions of civil society, such as free press, good education, and strong national identity. We wrote individual freedoms into our Constitution. We had respect for the rule of law, not much bribery, respect for science, and technical progress. We had social and economic mobility, opportunity and fairness. Well, at least for white males who owned property. But you see where I'm going with this. A robust civil society gives voice to workers, families and communities. It serves as a counter-balance to wealthy and powerful economic interests.China has a rich culture and strong national identity, but income inequality is growing in China, no free press, no unions, no environmental groups, and no real political system to make tough tradeoffs between wealthy powerful economic interests and the public good. Workers have no economic bargaining power. China's leaders have limited respect for the rule of law, and little willingness to enforce rule of law. China has done an exceptional job of acquiring the means of production. Not so much for human rights, labor rights, public health, or environmental protections. My economist friend told me, "No! Not buying it." China will modernize simply through economic transformation. I'm not sure what he meant, exactly. Maybe he meant that industrialization and democracy were the same thing, more or less. You get one with the other. My point was that you don't get one with the other. You might get a banana republic. You might get Egypt or something like Egypt, or Victorian England without a history of individual freedoms. Russians got plutocracy, corruption, murdered journalists, and a political system with zero credibility. You might get a lot of things, depending on what kind of civil society you have. National politics is really a contest between short-term investor interests and long-term public interests. Investors will act in their short-term interest. Public good often works in the long term. Market forces will not protect public good. For that, you need an effective political system. Colombia is a poster child for dysfunctional political and economic systems. Their culture and national identity are proud enough, but working Colombians are kidnapped, intimidated and killed routinely, as punishment for political involvement. Prosecutors, judges and justice ministers live in the shadow of violence. The last thing Colombia needed was a so-called Free Trade Agreement, which increases rights and powers for global businesses and weakens rights and powers for civil society. Now, Colombia faces worsening inequality and more social disruption. Japan, Germany, Korea, Singapore, Taiwan, and other modern democracies have strong social cohesion, strong institutions of civil society and strong middle classes. These outcomes are not accidental. They are the result of deliberate political choices these countries made. I asked my friend about China becoming a modern democracy. My real question wasn't about China, or Colombia, for that matter. I was really asking about America. What happens to our prosperity, our middle class, and our institutions of civil society? In the last 30 years, our civil society has weakened. Political and economic power are concentrating in the hands of the top 1%. Our respect for science has been replaced with ideology and denial. We disparage public education, and public employees. Our social cohesion is so weak that we envy our neighbors who still have pensions. Rule of law is becoming situational - it doesn'treally apply to big banks or foreclosure robo-signers. Political campaigns are so expensive that elected officials literally cannot afford to govern for the public good. They can only govern for the wealthy and powerful. Within this 30-year decline for civil society, our so-called free trade policy steadily lowers the bar for democratic political process, substituting global business interests for public interest.In his new book, Nobel laureate economist, Joseph Stiglitz, calls globalization, as we've managed it, "global governance without global government." In Western democracies, we solve tough social and political problems through a political process. However, in so-called free trade agreements, global businesses write the rules, then we send disputes to anonymous tribunals. Democratic problem-solving does not happen in the trade agreements. It won't happen in Colombia. I don't see how it will happen in China. It's becoming more difficult in America. This is really about political and economic power. In the conclusion to his book, Stiglitz offers two possibilities. One is that we in the 99%, can recognize our predicament and reclaim our political birthright. Alternatively, the 1% can recognize their "self-interest, properly understood," and lead the way back to a sustainable democracy. Stiglitz traces this back to Alexis de Tocqueville in 1835. Americans understood a basic fact: looking out for the other guy isn't just good for the soul - it's good for business. The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn't seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn.Yeah. That would be good.

 

Blair concerned about UK exit from the EU

Former British Prime Minister Tony Blair told a German newspaper he was "deeply worried" Britain might opt to leave the European Union in a referendum, particularly if too many powers were transferred to Brussels without democratic legitimacy.Talk of Britain leaving the EU was once far fetched, but the euro zone debt crisis and the prospect of the currency bloc forging a closer political union have convinced some senior UK politicians it is time to demand a new relationship with Brussels.Current Prime Minister David Cameron said last month it was a "perfectly honourable position" to call for an immediate referendum on Britain's EU membership - something polls show a majority of British people would vote to reject - but that he would never campaign for an "out" vote because leaving the EU would not serve British interests.Blair told Die Zeit it was clear that the euro zone crisis would lead to a "powerful political change of the EU", adding: "And on this point, I am deeply worried that Britain could decide by referendum to leave the whole process.""If more competences are transferred to the EU, then its democratic legitimacy must be built up too," he said, according to a German transcript of the interview which is due to be published on Thursday. "Britain must play a strong role in this. Because we need a balance between European institutions and the nation states.""If this is done wrongly, we could create a political crisis that could become just as a big as the euro crisis. People will not go along with the abolishment of the nation state."Cameron has tried to stave off demands for an immediate vote on Britain's EU membership by holding out the prospect of a referendum some time in the future and by promising a new relationship with the EU.He vetoed a new EU fiscal treaty in December, forcing euro zone states to set their new rules outside the formal EU structure, while using its institutions.Sceptics say EU regulations shackle Britain's $2.5 trillion economy and that leaving the 27-nation bloc would allow London to restore its sovereignty while saving billions of dollars in membership dues.However, supporters of membership argue Britain would lose influence if it left the EU, its biggest trading partner, and that its economy would still be influenced by rules made in Brussels anyway.

HK Airlines to quit London service

 

Hong Kong Airlines will end its service between Hong Kong and London due to poor demand, reports said on Wednesday, another blow to the carrier after authorities banned its expansion. "The last flight from London to Hong Kong will be on September 10," Hong Kong Airlines General Manager Albert Chan told Dow Jones Newswires, meaning the service will have run for just seven months. The airline uses three Airbus 330-200 planes for the flights which are fitted exclusively with business-class seats. The service costs around HK$10m ($1.3m) a month to run, the South China Morning Post newspaper reported. The airline did not immediately respond to requests for comment.The move followed an unprecedented aviation authority ban last month on the airline's expansion, limiting the types of aircraft the company can operate until the airline meets all safety requirements for operating a larger fleet.The airline said it supported the conditions, adding they were sensible for a company at their stage of growth."Given the profitability of our regional routes, we believe that we now have the optimal fleet to continue to build a business... focused on Asia Pacific," an HKA spokesperson told AFP on Monday.Hong Kong Airlines was established in 2006 and operates 21 aircraft flying to locations in mainland China and international destinations ranging from Tokyo to Bangkok.HKA flights were severely delayed and cancelled when a typhoon lashed Hong Kong last month, leaving hundreds of passengers stranded.

NEWS,29.07.2012

The Countries That Will Win the Most Olympic Medals

 

According to a newly released report, the United States is predicted to win the most medals at the London 2012 Olympics. For a country with less than 5% of the world’s population, the U.S. is expected to win 103 medals at the XXX Olympiad, 10% more than the runner up China. This may come as no surprise to some, considering that it has won the most medals in 14 of the 25 Summer Games that it has participated in,including the past five Games.However, based on a report, published by the Tuck School of Business at Dartmouth, the number of medals a country wins supports the probability that it will win medals in subsequent Olympics. The report’s model predicted the medal count in Beijing in 2008 with 95% accuracy and has been the most accurate predictor of medal distribution among countries since it was unveiled for the Sydney Games in 2000. Based on the report, 24/7 Wall St. identified the ten countries that will win the most Olympics Medals at the London Summer Games.The accuracy of the formula is impressive, given that it only considers four main factors. It includes two economic measures population and gross domestic product (GDP) per capita which it assigns equal weight. The other two factors that it considers are unique to the Olympics and include total medals won, which it accords the most weight, and whether a country is hosting the Olympics, which has been assigned a different weight with each game.According to Emily Williams, author of the report and PhD candidate at London Business School and a recent graduate of Tuck School of Business at Dartmouth, when looking at the results “the lagged medal share has the biggest impact and the hosting effect is also pretty substantial.” The model takes into account the total number of medals won by each country in every Olympiad since 1960. China and the U.S. have dominated in recent years, which was factored into their 2012 estimate. Meanwhile, Russia, Australia, and Germany, fell below expectations last year, which has hurt their projections for this year as well.The host effect is considerable and should be a boon to the United Kingdom this summer. “The U.K. stands ready to greatly benefit in terms of its overall medal count and especially its coveted gold medal total,” Williams observes in the report. For the United Kingdom, the model predicts that this advantage will assure third place this summer with 25 golds, up from fourth place in 2008 when it was awarded only 19. It will also increase its total medals won from 47 in 2008 to 62 in 2012.In the 2004 study which the Williams’ report is based on, the authors suggest that the host effect could be the result of diminished costs for athletes from the host nation to participate, the benefit of participating in a home facility or the motivational force of competing before family, friends and fellow countrymen.A look at the countries with the most medals demonstrates the impact that a country’s population can have on the eventual medal count. According to the report, “The larger the population a country has, the more chance it will have an athlete with the extraordinary natural ability necessary to become an Olympic champion.” Of the top ten countries that are predicted to win the most medals this year, seven of the 10 are among the 10 most populous countries in the world. The exceptions are Pakistan, Nigeria and Bangladesh.Neither the population size nor the GDP per capita can be considered in isolation of the other. The U.S. and Germany both do well because they have large populations and considerable wealth. But having an edge in one of these factors can help compensate for a weakness in the other. For instance, China, with its large population, wins more medals than many countries with a higher GDP per capita. Although Australia’s population size ranks just 51st in the world, its GDP per capita ranks seventh, and its standing in the medal count for 2012 is predicted to be seventh.Based on the report, “Jolly Good Show: Who Will Win the 2012 Olympic Games in London?,” by Emily Williams, which relies on the model developed by Dartmouth professors Andrew Bernard and Meghan Busse, 24/7 Wall St. reviewed the countries that are likely to win the most medals at the 2012 London Games. To approximate the data which was used to calculate the projections, we considered 2011 GDP and population data from the World Bank for the 28 countries that the model predicts will win 6 or more gold medals. We obtained total Summer Olympics medal counts from the NBC website, also to approximate the data used for the formula. For countries that have not consistently had the same borders, including Germany and Russia, the medal counts for the entire area were included. For example, all medals won by the former USSR were included in Russia’s count.These are the ten countries that will win the most medals in the London Olympic Games.

Aurora Shooting: Mall's Troubled History Of Racism, Crime

Until last week, the Town Center at Aurora seemed like a typical mall.But the 37-year-old shopping center had problems even before July 20, when a gunman opened fire at a midnight screening of "The Dark Knight Rises" in the movie theater that sits adjacent to the mall in its parking lot.In recent years, shoppers have fled the aging mall for fancier centers like nearby Cherry Creek. Management, seeking to weed out what it perceived as undesirable customers, set a curfew for minors and enforced a dress code for shoppers. In 2004, a mall leasing agent was caught on audio tape explaining that the mall wanted to attract more whites and "reduce negative aspects" like "young, black customer(s)." "This is why we don't hang around aurora mall/Century 16," one resident tweeted hours after the shooting. "Aurora mall has always been ghetto, tho" said another.In some ways, Town Center's history follows the same rise and stumble as many American malls. When it opened in 1975, J.C. Penney and Sears fed the shopping appetite of new middle class fleeing Denver for cul-de-sacs and spotless mailboxes. In 1998, Simon Property Group, the largest mall owner in America with 221 U.S. properties and an annual revenue of $4.3 billion in 2011, acquired the mall. Simon rechristened the structure in 2005, calling it Town Center, an appropriate name in Aurora; the sprawling suburb of 325,000 had built its own municipal campus across the highway from the mall in 2003 -- an attempt to manufacture a downtown.When malls were first conceived, they were meant to be utopias. Early mall developer Victor Gruen called them "crystallization points for suburbia's community life." But these days, the rise of online shopping and a lingering economic crisis have sucked away malls' reverie. Many are abandoned, attracting crime and draining municipal budgets; others are losing shops. The average vacancy rate for regional malls is currently at 8.9 percent, according to Reis Inc., a real estate data and analysis firm. Once hovering around 5 or 6 percent in the mid 2000s, the rate nearly doubled over the course of the recession.While Town Center hasn't suffered from fleeing stores, it has coped with crime before. Gang activity surfaced at the mall in the early 2000s and was one factor that led Simon to announce it planned to spruce up the center with a $100 million renovation. In 2005, during the renovations, a woman was shot and killed outside the Champs store. The city of Aurora contributed $15 million in tax incentives to the renovations.At the time, the mall also faced accusations of racism. Before the shooting, a leasing agent was caught on audio tape by one of the mall's tenants saying the planned renovations were in part to attract more white people. After local television station 7NEWS aired the comments in August 2004, Simon suspended the agent, promising to hire more black staff and begin a parental patrol program that paid adults to supervise youth. Three months after the shooting in 2005, Simon also established a curfew for teens. The movie theater, where the shooting occurred Friday, was built in 1998 by Century Theaters now a part of Cinemark in the southeast parking lot of the oval-shaped mall complex. Though unattached, the Century 16 theater has always been considered part of the mall. The theater sits on land registered to Simon Debartolo Group, the former name of Simon Property Group, according to the Arapahoe County assessor database. The theater is owned by Century Theatres.Up until this week, the theater was also listed as a business on Simon's official website for the mall alongside the rest of the stores. But in the days following the shooting, Town Center removed Century 16 from its online directory. A cache of the old listing from July 7 is still available.In a written statement sent to The Huffington Post on Thursday, Simon said, "There is no connection between our operation of the mall and the terrible tragedy which occurred at the theater last Friday morning. Since 2004, we have invested nearly $60 million in Town Center at Aurora and have made it a great shopping venue for our tenants and customers." Les Morris, a spokesman for Simon, refused to answer questions or confirm facts about the mall. Since the shooting, store employees have been told by management not to talk to press, according to a cashier at the mall boutique Luxie.In a statement released on Friday, Cinemark said that it was "deeply saddened about this tragic incident."Locally, there is a history of complaints about racial profiling at the mall. In 1990, the NAACP spoke out about the mall's security guards, provoking then owner Corporate Property Investors to retrain staff and hire more minority guards.In wake of the scandal over the leasing agent's comments, residents hoped the mall's policies might change for good. Alvertis Simmons, 55, a community organizer in Aurora, flew to Simon's headquarters in Indianapolis that year to discuss how the mall could improve its relationship with minorities. He worked with the company to implement its parental patrol program.But Simon never followed through on its promise to hire more black staff, according to Simmons, even though it hired a few contractors during the renovations. "They could do better," he said this week. "Aurora mall would have never changed their culture had they not been taped."The leasing agent is no longer employed at Simon, the company said in its statement Thursday.In 2006, the local chapter of the Association of Community Organizations for Reform Now (ACORN) conducted a survey of 1,000 mall shoppers on discrimination and identified about 50 minority youth who said they were were profiled by mall security, mostly because of their clothing. "There was no clear demarcation [in the dress code] of what was gang attire and what was urban culture," said Ben Hanna, 31, who worked as head organizer for ACORN at the time. The Simon Property Group code of conduct posted on the websites and in the hallways of many of its malls does not mention "gang apparel" but requires shoppers to wear"appropriate" clothing. "Apparel that may provoke a disturbance or incite violence is prohibited," it states.Cinemark never adopted any of the mall's policies such as the dress code or parental patrol, according to Simmons. Still, the theater's clientele was affected as they also patronized the mall, he said. Freddie Hanns, 60, visits the mall almost every week and worked briefly as a contractor there during the renovations. Hanns, like Simmons, is black. "I think the mall has gotten better," he said. "It couldn't get any worse."But Aurora's racial tensions have mounted in the past decade as downtown Denver gentrifies and minorities move to the suburbs, according to Jeremy Nemeth, chair and professor of urban planning at the University of Colorado Denver. In 2000, Aurora was 13.4 percent black, 19.8 percent Hispanic and 68.9 percent white. In 2010, it was 15.7 percent black, 28.7 Hispanic and 61.1 percent white.Massacres like the one on July 20, however, are generally not caused by shifting demographics. Law enforcement officials call people like Aurora suspect James Holmes "active shooters," individuals who open fire in crowded areas and kill at random. Active shooter incidents are on the rise in shopping centers; besides the one in Aurora, there have been at least nine mall shooting sprees in the United States unrelated to gang or personal disputes since 2005."The mall is a victim of individuals who want to inflict as much carnage and get as much publicity as possible," said Malachy Cavanagh, a spokesman for the International Council of Shopping Centers. Like schools and churches, malls become targets because they draw large crowds and are publicly accessible, he said.In Aurora and many other suburbs, malls are also among the few public places teens can congregate. "Libraries close early. Recreation centers, they don't have them in the vicinity. And it's hot, hot, hot," said Simmons. "All they got is the mall."In the past decade, the Department of Homeland Security has partnered with the retail industry to develop training programs for dealing with active shooters, said Cavanagh.One way to deal with recurring crime like gang violence is to make malls more restrictive, as Town Center attempted to do. Unlike true public spaces, privately owned malls for the most part can expel anyone who looks suspicious; they aren't obliged to give patrons a right to free speech. There are a few exceptions: In five states, one of which is Colorado, courts have established rulings requiring mall owners to permit certain political activities like protesting and collecting ballot signatures."Malls are repressive spaces," said Michael Sorkin, an architect and critic who has written on malls and public space. "They have distorted the nature of the way in which one is able to participate in the life of a city as a citizen." This could make malls a target for violence on the part of those disenfranchised by consumer culture, Sorkin says.Yet few mall policies could have helped catch James Holmes. The 24-year-old graduate student at the University of Colorado grew up in a white, upper middle class family in San Diego as close as it gets to one of Town Center's target customers."It doesn't matter if you have 100 parent patrols at the mall or at the movies," said Simmons. "That guy was going to do what he did."

NEWS,28.07.2012

Olympics open with pageant for next generation

Queen Elizabeth declared the London Olympics open after playing a cameo role in a dizzying ceremony designed to highlight the grandeur and eccentricities of the nation that invented modern sport.Children's voices intertwining from the four corners of her United Kingdom ushered in an exuberant historical pageant of meadows, smokestacks and digital wizardry before an audience of 60,000 in the Olympic Stadium and a probable billion television viewers around the globe.Many of them gasped at the sight of the 86-year-old queen, marking her Diamond Jubilee this year, putting aside royal reserve in a video where she stepped onto a helicopter with James Bond actor Daniel Craig to be carried aloft from Buckingham Palace.A film clip showed doubles of her and Bond skydiving towards the stadium and, moments later, she made her entrance in person."In a sense, the Olympic Games are coming home tonight," IOC President Jacques Rogge told the crowd."This great, sports-loving country is widely recognised as the birthplace of modern sport."To underline the point, Bradley Wiggins, crowned five days earlier as Britain's first winner of the Tour de France and hoping to add more road cycling gold in London, tolled the world's largest tuned bell to begin the ceremony.In one moment of simple drama, the stadium fell silent as five giant, incandescent Olympic rings, symbolically forged from British steel mills, were lifted serenely out of the stadium by weather balloons, destined for the stratosphere.And at the climax of an evening that had children centre-stage, seven teenage athletes were given the honour of lighting the Olympic cauldron that will burn for the duration of the Games, in keeping with the theme of "Inspire a Generation".More than 10,000 athletes from 204 countries will compete in 26 sports over 17 days of competition in the only city to have staged the modern Games three times.Most of them were there for the traditional alphabetical parade of the national teams, not least the athletes from Egypt, Tunisia, Libya and Yemen competing in their first Olympics since their peoples overthrew autocrats in Arab Spring revolutions.Brunei and Qatar were led in by their countries' first ever female Olympians and so, along with Saudi Arabia, ended their status as the only countries to exclude women from their teams.At a reception, the queen spelled out the role played by her family after the Olympics were revived in Athens in 1896."This will be the third London Olympiad. My great grandfather opened the 1908 Games at White City. My father opened the 1948 Games at Wembley Stadium. And, later this evening, I will take pleasure in declaring open the 2012 London Olympic Games at Stratford in the east of London," she said."Over recent months, many in these islands have watched with growing excitement the journey of the Olympic torch around the United Kingdom. As the torch has passed through villages and towns, it has drawn people together as families and communities."To me, this spirit of togetherness is a most important part of the Olympic ideal. And the British people can be proud of the part they have played in keeping the spirit alive."The opening show, costing an estimated 27 million pounds, was inspired by William Shakespeare's play The Tempest, his late-life meditation on age and mortality.But it was children who set the tone, starting from the moment when live pictures of junior choirs singing in the landscapes of England, Scotland, Wales and Northern Ireland were beamed into the stadium's giant screens, four traditional songs woven together into a musical tapestry of Britain.Oscar-winning film director Danny Boyle began his sweep through British history by grassing over the arena in a depiction of the pastoral idyll mythologised by the romantic poet William Blake as "England's green and pleasant land".Idyll turned swiftly to inferno as the Industrial Revolution's "dark Satanic mills" burst from the ground, before those same mills forged the last of five giant Olympic rings that rose into the sky.At the end of a three-hour extravaganza, David Beckham, the English soccer icon who had helped convince the IOC to grant London the Games, stepped off a speedboat carrying the Olympic flame at the end of a torch relay that inspired many ordinary people around Britain.Past Olympic heroes including Muhammad Ali, who lit the cauldron at the 1996 Atlanta Games, and British rower Steve Redgrave, the only person to win gold at five successive games, welcomed the flame into the stadium.Yet it was not a celebrity but seven teenage athletes who lit a spectacular arrangement of over 200 copper 'petals' representing the participating countries, which rose up in the centre of the stadium to converge into a single cauldron.Moments later, a balloon-borne camera relayed live pictures of the earlier-released interlocked rings gliding through the stratosphere against the curved horizon of the planet below.The performance included surreal and often witty references to British achievements, especially in social reform and the arts, and ended with former Beatle Paul McCartney singing Hey Jude.Many sequences turned the entire stadium into a vast video screen made up of tens of thousands of "pixels" attached to the seats. One giant message, unveiled by Tim Berners-Lee, British inventor of the world wide web, read "This is for Everyone".Until the last few days, media coverage had been dominated by the security firm G4S's admission that it could not provide enough guards for Olympic venues. Thousands of extra soldiers had to be deployed at the last minute, despite the company's multi-million-dollar contract from the government.Suicide attacks that killed 52 people in London in July 2005, the day after it was awarded the Games, ensured that security would remain a worry. And this year the Games mark the 40th anniversary of the 1972 Munich massacre, when 11 Israeli Olympic team members were killed by Palestinian militants.Although no medals will be awarded until Saturday, the women's soccer tournament started on Wednesday, and on Friday South Korean archers set the first world records of the Games.Im Dong-hyun, who suffers from severe myopia and just aims at "a blob of yellow colour", broke his own 72-arrow world record with a score of 699 out of a possible 720, leading his two colleagues to a record combined score as well.The Games' first medals will be decided in the women's 10 metres air rifle final on Saturday, with the big action coming in the men's cycling road race, where world champion Mark Cavendish is favourite to become Britain's first gold medallist.In the evening, Americans Michael Phelps and Ryan Lochte are scheduled to line up for a classic confrontation in the men's 400 metres individual medley final.Phelps, competing in seven events after winning a record eight gold medals four years ago in Beijing, is bidding to become the first swimmer to win gold in the same discipline three times in a row."This is going to be a special race," said Gregg Troy, head coach of the American men's team. "I can't imagine a better way to promote our sport than a race like this on the first day."

 

Iran expands oil tanker insurance

Iran is expanding its insurance on its fleet of 47 oil tankers through a multi-billion-dollar line of credit as it seeks to get around EU sanctions crimping its crude exports, reports said on Saturday."Iran is ready to give total insurance for the transport of its oil... and the commitments by Iranian insurers are no different from those by Western insurers and therefore all risks and dangers are insured," Iran's Opec representative, Mohammad Ali Khatibi, was quoted as saying by the state-run newspaper Iran.The Fars news agency cited an "informed source" it did not identify as saying that the government had given the central state insurance agency, Bimeh Markazi, a line of credit worth several billion dollars to insure the tankers. It said 10% of the money had already been transferred.The measure, apparently aimed at any buyer of Iranian crude worldwide, expands on a promise of insurance for deliveries of its oil using Iranian tankers to major customers China and India. South Korea is also mulling joining the offer.Iran is suffering a cut in oil sales abroad of up to 40%, according to the International Energy Agency (IEA), because of an EU embargo on Iranian crude imports and a related ban on European insurers providing cover for deliveries of Iranian oil anywhere in the world.European insurers accounted for 90% of coverage for Iran before the EU sanctions took effect on 1 July.Iran, which is striving to maintain a semblance of business as usual over its oil exports, is attempting to fill the insurance gap itself, but it faces several obstacles.US sanctions targeting Iranian financial transactions make it unclear how Iran could pay out any claims arising from accidents involving its tankers.Oil tankers are typically insured for up to $1bn because of the risk of oil spills.A European analyst in Tehran noted that the 40 tankers in Iran's fleet owned by the NITC, formerly known as the National Iranian Tanker Company, each had a long-distance capacity of up to two million barrels of oil.Iran, before the EU sanctions, exported around 2.5 million barrels of oil per day. The IEA estimates that has now been cut to around 1.5 million barrels per day.Several of the NITC vessels were being used in June to store Iranian offshore crude that Tehran has not been able to sell because of the sanctions, according to industry specialists.Iran has announced plans to quickly expand its onshore storage capacity, which has been saturated, including by subcontracting to private firms. Tehran has also ordered 12 new supertankers from China and should receive the first in December.

Pass tax proposal - Obama urges

US President Barack Obama urged Republicans in the House of Representatives on Saturday to pass his proposal calling for extending tax cuts for everybody but the richest Americans."Now it comes down to this," Obama said in his weekly radio and Internet address. "If 218 Members of the House vote the right way, 98% of American families and 97% of small business owners will have the certainty of knowing that their income taxes will not go up next year."On 1 January, a tax cut adopted under former president George W Bush and extended under Obama is set to expire. But Democrats and Republicans strongly disagree over how to extend it.While Obama favours higher taxes for the rich, Republicans argue it would undercut the nation's fragile economic recovery.This past week, the Democratic-controlled Senate passed a tax cut extension for American families earning less than $250 000 a year, but Republicans in the House are staunchly opposed to this bill, arguing that all Americans, including the wealthy ones, should benefit from the extension.The president noted that he fundamentally disagreed with those who believed that the best way to create prosperity in America was to let it trickle down from the top."I know they're wrong because we already tried it that way for most of the last decade. It didn't work," Obama said."We're still paying for trillions of dollars in tax cuts that benefited the wealthiest Americans more than anyone else; tax cuts that didn't lead to the middle class jobs or higher wages we were promised and that helped take us from record surpluses to record deficits."The president said the country could not afford more of top-down economics. He said America needed policies that would grow and strengthen the middle class, help create jobs and make education and training more affordable.