NEWS,12.11.2012

Brazil Violence: At Least 140 Murdered In Sao Paulo Over Past Two Weeks

 

At least 140 people have been murdered in South America's biggest city over the past two weeks in a rising wave of violence, Sao Paulo's Public Safety Department says.Killings in Sao Paulo began sharply increasing in September, a month in which 144 people were killed, the department's website says. It says a total of 982 homicides took place in the city during the first nine months of the year.The victims included 90 police officers, most of them gunned down while off duty.A Public Safety Department official said Saturday that the killings of police have been ordered by imprisoned leaders of an organized crime group called the First Capital Command in reprisal for a crackdown on the drug trade. The official spoke on condition of anonymity because he was not authorized to speak to the press.The First Capital Command is one of Brazil's most notorious organized crime groups. Based in Sao Paulo state prisons, the group allegedly was behind several waves of attacks on police, government buildings, banks and public buses in 2006. Those assaults and counterattacks by police in the slums killed more than 200 people.With the latest violence, shops and schools in some Sao Paulo districts closed early this past week as rumors of gang-imposed curfews spread. "In view of the wave of violence in the city's south zone, the school's directors decided to send staff and students home early so as to assure their safety," Eliane Valerio de Souza, administrative assistant at a professional training school, told the newspaper Folha de S. Paulo.Sao Paulo state authorities last week said incarcerated leaders of the First Capital Command suspected of using smuggled cellphones to order attacks and coordinate drug sales, murders of rival gang members and the purchase of weapons, would be transferred to a maximum security federal prison outside the state.On Thursday, one of the gang's lower echelon leaders was sent go a federal penitentiary in northern Brazil. Others are expected be transferred by the end of the month.

Greece Racist Attacks Increase Amid Financial Crisis

 

The attack came seemingly out of nowhere. As the 28-year-old Bangladeshi man dug around trash bins one recent afternoon for scrap metal, two women and a man set upon him with a knife. He screamed as he fell. Rushed to the hospital, he was treated for a gash to the back of his thigh.Police are investigating the assault as yet another in a rising wave of extreme-right rage against foreigners as Greece sinks further into economic misery. The details vary, but the cold brutality of each attack is the same: Dark-skinned migrants confronted by thugs, attacked with knives and broken bottles, wooden bats and iron rods.Rights groups warn of an explosion in racist violence over the past year, with a notable surge since national elections in May and June that saw dramatic gains by the far-right Golden Dawn party. The severity of the attacks has increased too, they say. What started as simple fist beatings has now escalated to assaults with metal bars, bats and knives. Another new element: ferocious dogs used to terrorize the victims."Violence is getting wilder and wilder and we still have the same pattern of attacks ... committed by groups of people in quite an organized way," said Kostis Papaioannou, former head of the Greek National Commission for Human Rights.As Greece's financial crisis drags on for a third year, living standards for the average Greek have plummeted. A quarter of the labor force is out of work, with more than 50 percent of young people unemployed. An increasing number of Greeks can't afford basic necessities and healthcare. Robberies and burglaries are never out of the news for long.With Greece a major entry point for hundreds of thousands of illegal migrants seeking a better life in the European Union, foreigners have become a convenient scapegoat.Some victims turn up at clinics run by charities, recounting experiences of near lynching. Others are afraid to give doctors the details of what happened and even more afraid of going to the police. The more seriously hurt end up in hospitals, white bandages around their heads or plaster casts around broken limbs."Every day we see someone who complained of (some form) of racist violence," said Nikitas Kanakis, president of the Greek section of Doctors of the World, which runs a drop-in clinic and pharmacy in central Athens that treats the uninsured.Racist attacks are not officially recorded, so statistics are hard to come by. In an effort to plug that gap and sensitize a population numbed by three years of financial crisis, a group of rights groups and charities banded together to document the violence.They registered 87 cases of racist attacks between January and September, but say the true number runs into the hundreds."Most of the time the victims, they don't want to talk about this, they don't feel safe," Kanakis said. "The fear is present and this is the bigger problem."Frances William, who heads the tiny Tanzanian community of about 250 people, knows the feeling well."People are very, very much afraid," he said, adding that even going next door to buy bread, "I'm not sure I'll be safe to come back home."The community's cultural center was attacked several weeks ago, with amateur video shot from across the street showing a group of muscled men in black T-shirts smashing the entrance. Earlier that day, children standing outside during a birthday party were threatened by a man brandishing a pistol, William said.The recent elections showed a meteoric rise in popularity of the formerly marginalized Golden Dawn, which went from less than half a percent in 2009 elections to nearly 7 percent of the vote and 18 seats in the country's 300-member parliament in June.Campaigning on a promise to "clean up the stench" in Greece, the party whose slogan is "blood, honor, Golden Dawn" has made no secret of its views on migrants: All are in the country illegally and must be deported. Greece's borders must be sealed with landmines and military patrols, and any Greeks employing or renting property to migrants should face punishment.The party vehemently denies it is involved in racist attacks."The only racist attacks that exist in Greece for the last years are the attacks that illegal immigrants are doing against Greeks," said Ilias Panagiotaros, a burly Golden Dawn lawmaker who divides his working time between Parliament and his sports shop, which also sells military and police paraphernalia.His party is carrying out a "very legitimate, political fight . through parliament and through the neighborhoods of Athens and of Greece," he said.The party's tactics handing out food to poor Greeks, pledging to protect those who feel unprotected by the police are working. Recent opinion polls have shown Golden Dawn's support rising to between 9 and 12 percent.In late August, the conservative-led coalition government began addressing the issue of illegal immigration by rounding up migrants. By early November, they had detained more than 48,480 people, arresting 3,672 of them for being in the country illegally.Rights groups also warn that what started as xenophobic attacks is now spreading to include anyone who might disagree with the hard-right view. Greek society must understand that the far-right rise doesn't just concern migrants, said Kanakis."It has to do with all of us," he said. "It's a problem of everyday democracy."

U.S. To Become World's Largest Oil Producer, Exceeding Saudi Arabia, By 2020: International Energy Agency

 

The United States will become the world's largest oil producer by around 2020, temporarily overtaking Saudi Arabia, as new exploration technologies help find more resources, the International Energy Agency forecast on Monday.In its World Energy Outlook, the energy watchdog also predicted that greater oil and natural gas production thanks partly to a boom in shale gas output as well as more efficient use of energy will allow the U.S., which now imports around 20 percent of its energy needs, to become nearly self-sufficient around 2035. That is "a dramatic reversal of the trend seen in most other energy-importing countries," the Paris-based IEA said in its report. "Energy developments in the United States are profound and their effect will be felt well beyond North America and the energy sector."Rebounding U.S. oil and gas production is "steadily changing the role of North America in global energy trade," the IEA said.For example, oil exports out of the Mideast will increasingly go to Asia as the U.S. becomes more self-sufficient. That will increase the global focus on the security of strategic routes that bring Middle East oil to Asian markets. Tensions between Iran and Western powers have raised concerns that oil exports from the Persian Gulf could be blocked in a potential conflict over Tehran's alleged plan to develop nuclear weapons.The IEA added that global trends in the energy markets will be influenced by some countries' retreat from nuclear power, the fast spread of wind and solar technologies and a rise in unconventional gas production.The agency concluded that despite the rising use of low carbon energy sources, huge subsidies will keep fossil fuels "dominant in the global energy mix.""Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable path," the IEA said.Global energy needs are forecast to increase by a third by 2035, with 60 percent of the additional demand coming from China, India and the Middle East.

NEWS,03.08.2012

Argentina shows Europe how it's done

Bond payoffs are supposed to be boring, but Argentina's president is celebrating Friday's final $2.3bn payment on a bond given to people whose savings were confiscated a decade ago, calling it a lesson for European countries now mired in foreign debt. The nation's economic disaster left thousands with a grim choice after the government seized their dollar-denominated deposits to stop bank runs in 2002. They could switch to devalued pesos and regain access to what was left of their savings, or accept a piece of paper promising to repay the money in dollars over the next 10 years. Few had any faith in the government's promises back then. Argentina had just defaulted on more than $100bn in foreign debt, banks were shuttered, the economy was in ruins and streets were filled with pot-banging protesters whose chants of "throw them all out" would send five presidents packing. But Argentina has mostly paid up after all, making good on 92.4% of that defaulted debt so far, including $19.6bn in US currency over the years to cancel the Boden 2012 bond. Most of the hard-luck account-holders later sold the bonds at a loss, but as the government makes its last $2.3bn payment on Friday, the few stalwarts who kept the faith have been made whole, while earning a modest 28% profit over the years. "It was good business" for anyone who got the bonds early and held them, said Jorge Oteiza, a bond trader with Banco Comafi in Argentina. "To have the same buying power you had back then isn't bad." President Cristina Fernandez praised her government for meeting its commitments and blamed multinational financial institutions for the debt crises that afflicted Argentina back then and threaten Europe today. "This is the money that the banks should have returned to the Argentine citizens," she said during a national address from the Buenos Aires stock exchange Thursday night. Showing charts and rattling off numbers, she argued that her government has shown the world how to emerge from default without imposing austerity measures, growing its economy and strengthening the social safety net. This debt relief "has given us an immense independence from the activity of the market," she said to applause from the hundreds of guests she had invited onto the exchange floor. Argentina's foreign-currency debt has dropped from a daunting 166% of GDP at the end of 2002 to a more manageable 42% of GDP at the end of 2011, said Ramiro Castineira of the Econometrica consulting firm. "If before it was a burden to shoulder, now it's just a handbag. It doesn't restrict the economy as it did in the past," he said. However, the debt has grown in nominal terms during the same period, from $137bn to $179bn. Many economists suggest the official story is misleading at best, since the government has refused to pay billions of dollars in other bad debts while borrowing freely within Argentina, taking money from pension funds, provinces, state-owned banks and the central reserve to stimulate the economy and reduce its foreign debt exposure. In her determination to make Argentina financially independent, critics say Fernandez has only shifted the debt burden onto her citizens, imposing terms that could stunt the country's future growth. For example, the government promised to pay negative 0.25% interest over ten years for the $27.9bn it took from the treasury for debt relief, the central bank said. "It's wonderful to see Argentina pay down debt, but for every dollar they're paying down, they're borrowing two or three through the other window, and increasingly from their own people," said Arturo Porzecanski, an expert on emerging markets at American University in Washington. Economy Minister Hernan Lorenzino proudly described the Argentine recipe in a column Wednesday published by Telam, the government news agency: Spurn the requirements of the International Monetary Fund and World Bank. Strong-arm the so-called "vulture funds" into accepting lower returns on their risky bets. Nationalise private pension plans, the airline and now the YPF oil company, putting their assets to use creating jobs. And tap central bank reserves to pay down international debts. Frozen out of international markets as a consequence of the 2002 default, this government made breaking their rules a point of pride, Lorenzino suggested. "At first, they called us heretics and the international community turned its back on us," he recalled. But "this government makes policies today without conceding to international pressure, thinking first of those on the inside, and later on those outside." Lorenzino has said this government will not take on more international debts. Not that it could: Friday's payoff still doesn't resolve nearly $7.5bn it owes the US and other Paris Club nations, or the $11.2bn claimed in US courts by bond holdouts. Argentina also owes millions in court judgments to US companies, and Spain's Repsol Group wants $10.5bn for its shares in YPF that Fernandez expropriated this year. Many of these investors would try to seize any newly borrowed money before it reaches Buenos Aires. Lorenzino suggested that Argentina's renegade approach makes it better prepared to confront global crises because the portion of its debt held by the private sector has dropped from 124% of GDP a decade ago to 14% last year. "This was possible only under the concept of economic independence, political sovereignty and social justice," Lorenzino wrote. But this shift from private to public debt means that the government is essentially borrowing from Argentine taxpayers and bank account holders to stimulate its economy, at rates far below inflation, which is estimated at 25% a year or more. Unless this changes soon, the money could run out and there will be few other places to turn for help. "This is no longer an 'us-versus-them' problem," Porzecanski said. "At first they went after the big multinationals, then the 'filthy-rich bondholders,' then powerful institutions like the IMF. Now it has become a fight for financial resources within Argentina. That's why I think the end is coming."

 

A Better Job Report But Challenges Remain

 

When it comes to economic data, I have been dreading the employment report issued on the first Friday of every month. And I am not the only one.For the last few years, this release from the Department of Labor has signaled insufficient job creation. It has also pointed to an increasingly segmented labor market, where the highly educated and affluent do well while vulnerable segments of society see little improvement. In the process, the unemployment crisis has gotten more embedded into the structure of the American economy.So it was a major relief this morning that the July report was a lot better than prior ones.At 163,000, job creation came in ahead of consensus expectations of 100,000. Long-term joblessness fell from 5.4 million to 5.2 million. The employment gains were broad based in terms of sectors. And average weekly earnings rose slightly.This is all good news... and especially after way too many months of disappointments. Yet, and unfortunately, it is too early to relax.The report still contains flashing yellow lights; and the future is still too uncertain with respect to both domestic and international conditions.In July, the unemployment rate edged up slightly to 8.3% despite more Americans falling out of the labor force. In fact, the participation rate declined from 64.0% to 63.7%; and the employment-population ratio, which is the most comprehensive measure out there, slipped from 58.6% to 58.4%.Then there are the compositional issues. There was little relief for those who need it most, including too many Americans who risk slipping from being unemployed to being unemployable.For example, teenage unemployment rose from 23.7% to 23.8% while joblessness among those with less than a high school diploma increased from 12.6% to 12.7% (compared to a stable 4.1% for those with bachelor degrees and higher).Put these numbers together and what you get is a picture of an economy that is healing, but doing so gradually and unevenly.So much for the past and present; how about the future?Left to its own devices, the economy would continue to heal and, concurrently, job creation would accelerate. But will they?For the improvement in the labor market to continue and broaden, America needs to minimize the risk of derailment by three clear and present dangers: the reluctance of Congress to deal with the fiscal cliff, Europe's inability to get ahead of its crisis, and a possible geo-political shock emanating from Iran.In such circumstances, it would be reasonable to expect Congress to be giving the unemployment crisis the attention it needs and deserves. Our elected representatives should be working hard on ways to accelerate the economic healing and also minimize vulnerability to these potential shocks.Unfortunately they are too polarized to do so; and it looks like they won't until the November elections are behind them, at the earliest.So despite the latest monthly improvement, America's unemployment situation will remain a challenge. And many of us will continue to nervously await the monthly data releases.

NEWS,08.03.2012..

Greece seals bond swap deal

Greece closed a bond swap offer to private creditors today after clearing the minimum threshold of acceptance to push the deal through, moving closer to unlocking funds it needs to avoid a dangerous debt default. Government officials said before the final deadline for declaring interest passed that more than 75% of eligible bonds had already been committed. The biggest sovereign debt restructuring in history will see bond holders accept losses of some 74% on the value of their investments in a deal that will cut more than 100 billion euros from Greece's crippling public debt. Preliminary results from the offer are expected to be announced officially at the weekend before a conference call with euro zone finance ministers in the afternoon. One of the chief negotiators for the bondholders, Charles Dallara, forecast a "very high" final take-up, though he was unsure if it would hit the 90% Greece is aiming for. Athens had said that it would abandon the deal if it did not receive at least 75% participation in the offer and it required two-thirds take-up to deploy a legal device to force recalcitrant creditors to accept the terms. The private sector involvement (PSI) deal is a key element in a broader international bailout aimed at averting a chaotic default by Greece and a potentially disastrous banking crisis across the euro zone. The European Union and International Monetary Fund have made a successful bond swap a pre-condition for final approval of the 130 billion euros ($170 billion) bailout agreed last month.” If all goes well, tomorrow we will be able to announce that a debt burden of 105 billion euros has been lifted from the Greek people," Venizelos told parliament earlier in the day. "For the first time we are cutting debt instead of adding to it.” Despite the optimism, the deal will not solve Greece's deep-seated problems and at best it may buy time for a country facing its biggest economic crisis since World War Two and staggering under debt equal to 160% of its gross domestic product. However financial markets rose strongly as the threat of an immediate and uncontrolled default receded. Bank stocks rose sharply and the risk premium on Italian and Spanish government bonds fell as investors hoped a Greek deal would curb the likelihood of any contagion spreading to other weaker euro zone economies. Euro zone ministers could decide whether to clear the overall bailout package in a conference call this weekend although they may leave the final decision until a face-to-face meeting on Tuesday. Greece must have the funds in place by March 20 when some 14.5 billion euros of bonds are due, which it cannot hope to repay alone. With over 75% take-up secured, well above the required two thirds threshold, Athens should be able to apply collective action clauses (CAC) imposing the deal on all holders of 177 billion euros in bonds regulated by Greek law.Venizelos is expected to discuss that option on the euro zone ministerial call over the weekend. Athens faces a more complex problem with some 18 billion euros in bonds regulated under international law with a number of hedge funds expected to try to fight a deal in the courts. It also remains to be seen whether credit default swaps (CDS) which some investors have taken as insurance against a forced restructuring of the debt will be paid out. Greece has staggered from deadline to deadline since the crisis broke two years ago and several of its international partners have expressed open doubts about whether its second major bailout in two years will be the last. Underlining the severe problems facing Greece after five years of deep recession, data on Friday showed unemployment running at a record 21% in December, twice the euro zone average, with 51% of young people without a job. There has been growing resentment over the austerity medicine ordered by international creditors which has compounded the pain from a slump which has seen the economy shrink by a fifth since 2008.But Greece, totally reliant on international support to stave off bankruptcy, has also infuriated both the EU and the IMF with its repeated failure to push through promised reforms.” We have shown a lot of solidarity with Greece," German Finance Minister Wolfgang Schaeuble said late on Wednesday. "Everyone knows that the real problems of Greek society are in Greece and not abroad."