NEWS,03.06.2013

Apple e-book price-fixing trial opens

The US government's trial against Apple, accused of leading a conspiracy to fix prices of electronic books, opened in the US on Monday.
The California technology giant is on its own in its fight against the US Justice Department, after five of the world's biggest book publishers named in the suit settled the charges and paid fines.
US antitrust watchdogs say Apple orchestrated a collusive shakeup of the electronic book business in early 2010 that resulted in higher prices.
Attorneys for both sides appeared in the courtroom of Judge Denise Cote, discussing procedural matters ahead of opening arguments.
The civil trial is expected to last three weeks and comes with Apple under pressure for its slumping share price, eroding market share for its iPhones and iPads and accusations in congress it avoided billions in taxes.
Apple chief executive Tim Cook has rejected the idea of a settlement because it would call for the company to sign an admission of wrongdoing.
"We didn't do anything wrong there," Cook told a recent California conference.
"We're going to fight."
Commission
The government's case centres on a period when Amazon dominated the e-book business, offering most bestseller titles for $9.99.
Leaders of the major publishing houses held "CEOs dinners" in "private rooms at upscale restaurants" at which they discussed the threat from Amazon.
Into this environment stepped Apple, which was readying the launch of its iPad.
Rather than following the Amazon "wholesale" pricing model in which the retailer sets the price, Apple favoured the so-called "agency model" where the publishers set the price and the seller - in this case Apple - received a 30% commission.
The result was an increase in price to $12.99 or $14.99 for most books.
Apple throughout the negotiations informed the publishers of the status of its dealings with other publishers. Apple was the "ringmaster" of the "conspiracy," the complaint alleges.
The government is expected to use emails and comments from the late Apple CEO Steve Jobs, which indicated that as part of a deal to force a new pricing model, publishers should "hold back your books from Amazon."
Apple dismisses the "conspiracy" charge and said its negotiations with the publishers were "difficult and contentious."
Among the publishers named in the lawsuit last year, Penguin settled for $75m, while Hachette, Harper Collins and Simon & Schuster created a $69m fund for refunds to consumers and Macmillan settled for $26m.

Global airline profits under pressure

In 2012 the profits made by airlines around the world amounted to $2.54 per passenger. That means airlines make only about R40 profit on every air ticket they sell.

"The global aviation industry registered a combined net post-tax profit of $7.6bn. This was generated on the back of revenues of $680bn globally," said Brian Pearce, chief economist at the International Air Transport Association (Iata).

"The profits are thin and fragile. The numbers seem high but the reality is that the margins are incredibly thin."

Iata has released its latest set of financial forecasts for the industry. The outlook for Africa for 2013 is a profit of $100m for the year.

"The aviation industry is linked to global economic growth. It's clear that the global economy is still under severe pressure," said John Slosar, CEO of Hong Kong-based carrier Cathay Pacific.

Slosar said cargo is still under great pressure, especially in regions such as Europe. "I suppose this is indicative of the economic state of some areas."

Iata is hosting its 69th annual general meeting in Cape Town.

N Korea surrenders to foreign currencies

Chinese currency and US dollars are being used more widely than ever in North Korea instead of the country's own money, a stark illustration of the extent to which the leadership under Kim Jung-un has lost control over the economy.
The use of dollars and Chinese yuan, or renminbi, has accelerated since a disastrous revaluation of the North Korean won in 2009 wiped out the savings of millions of people, said experts on the country, defectors and Chinese border traders.
On the black market the won has shed more than 99% of its value against the dollar since the revaluation, according to exchange rates tracked by Daily NK, a Seoul-based news and information website about North Korea.
North Korea is one of the most closed countries in the world, so it is difficult to determine what impact this could ultimately have on Kim's regime.
But experts said the growing use of foreign currency is making it increasingly difficult for Pyongyang to implement economic policy, resulting in the creation of a private economy outside the reach of the state that only draconian measures could rein in.
For now Pyongyang appeared to be capitulating, rather than trying to stamp out foreign currency use, they said.
Estimates of how much hard currency is in circulation vary, but an analyst at the Samsung Economic Research Institute in Seoul put it at $2bn in an April study, out of an economy worth $21.5bn, according to some assessments. Pyongyang doesn't publish economic data.
The use of dollars and yuan is now so pervasive there is little Pyongyang can do about it, said Marcus Noland, a North Korea expert at the Peterson Institute for International Economics in Washington.
The government would increasingly have to force people to provide goods and services to the state and get paid in won, added Noland, who closely studies the North Korean economy.
"It's been a tug of war for 20 years where the state would like to get control of the economy, to quash the market and to get everyone to use the North Korean won, but it just doesn't have the capacity to do any of those things," he said.
"It just makes it harder and harder for them to govern. Nobody wants what they're selling."
Secret video
In the Chinese town of Changbai in Jilin province, just across the border from the hardscrabble North Korean city of Hyesan, one Chinese trader said North Korean officials he dealt with wanted yuan more than anything else, even food.
The yuan they earned from doing business quickly gets circulated into Hyesan, a city of roughly 190 000 people whose industry-based economy has slumped since the 1990s.
"The only thing they want is foreign currency," said the trader, who sells products including medicine and tea in Changbai. He declined to be identified because he did not want to jeopardise his business or endanger his North Korean partners.
In April, Daily NK posted video it said was shot secretly in February at an open-air market in Hyesan. The shaky footage showed vendors openly quoting prices in yuan for products like gloves and jackets, and one accepting payment in yuan.
Pyongyang has waged periodic campaigns to try to stop the use of foreign currency but with no success.
North Korea made circulating foreign currency a crime punishable by death in September 2012, the Paris-based International Federation for Human Rights said in a report last month.
Another group, Human Rights Watch, recently interviewed more than 90 defectors who had fled North Korea in the past two years about punishment they had received for economic crimes. None said they were penalised for using or holding hard currency.
Nevertheless, ordinary North Koreans are very careful.
"I have heard multiple stories of people hiding foreign money under the floorboards in the house, or burying it up the hill in the woods out back," said one person in northeastern China who has lived in Pyongyang and regularly interacts with North Koreans.
"Nobody puts it in the bank because nobody trusts the government."
The worthless won
Faith in the North Korean won crumbled when Kim's father, Kim Jong-il, ordered the sudden revaluation of the currency in November 2009.
The government chopped two zeroes off banknotes and limited the amount of old money that could be exchanged for new cash. The move, seen as an attack on private market activity at the time, spurred a rush to hold hard currency.
It also quickened inflation and according to South Korea's spy agency, sparked rare civil unrest in one of the world's most entrenched authoritarian states after North Koreans realised the won was not a safe store of value.
The government is widely believed to have executed the economic official who oversaw the revaluation.
Dollars have circulated in North Korea for decades, partly because of the cash siphoned off from official foreign trade.
The rise in the use of yuan is a more recent phenomenon and reflects a surge in trade and smuggling between North Korea and China along their 1,400 km (875 mile) land border, where a lot of the currency changes hands. Official trade with China is worth $6bn annually.
Black market rates illustrate how far the won has fallen since the revaluation. It has plunged from $30 to one US dollar to about 8 500, according to exchange rates tracked by Daily NK. The current official exchange rate is about 130 won per dollar.
Daily NK has sources in North Korea who report every fortnight on rates in Hyesan, the city of Sinuiju opposite the Chinese border city of Dandong and also the capital Pyongyang.
In border areas some 90 percent of transactions occur in hard currency, said Christopher Green, Daily NK's manager of international affairs. Elsewhere, foreign cash accounts for 50 to 80 percent transactions in private markets, he estimated.
North Koreans increasingly did not refer to prices in won, Dong Yong-Sueng, senior fellow at the Samsung Economic Research Institute in Seoul, wrote in the April study on the use of foreign currency in the country.
Prices were marked in US dollars for beer, university preparation courses and apartments, Dong wrote.
South Korea's central bank estimated foreign currency in circulation at $1bn in 2000. Dong reckoned $2bn in foreign cash was now sloshing around the economy. Around half was in US dollars, 40% in yuan and 10% in euros, he told Reuters.
Dollars seeped into the market because trading firms exploited government quotas for exports and imports, making profits when prices diverged from those set by the state, Dong said.
It was not possible to estimate the amount of North Korean won in circulation, Dong added.
He said the North Korean informal economy was now bigger than the formal, state-led economy.
"Without foreign exchange, the economy would stop functioning," Dong said.
US officials have previously accused North Korea of making extremely high-quality counterfeit $100 notes. This money is believed to have been used to raise real cash for the regime abroad rather than get cycled into the economy.
"Juche" in name only
Despite purporting to follow an ideology of "juche", or self-reliance, Pyongyang did not have the will to stop the circulation of hard currency even if it had the means to do so, said Yang Moon-soo, an expert on the North's economy at the University of North Korean Studies in Seoul.
Ordinary North Koreans wanted yuan while the elite preferred dollars, said Yang, who has carried out a study on the use of both currencies based on interviews with North Korean defectors.
One official at a European embassy in Pyongyang, who has been visiting North Korea for more than a decade, said the most noticeable change had been the increased use of yuan. Most shops carried prices in dollars, yuan or euros, said the official.
"People ... pay in yuan at the market for rice and other daily necessities," said Ji Seong-ho, a defector living in South Korea who stays in touch with friends in the North.
An estimated 70% of defectors in South Korea also send cash back to family in North Korea, according to the Organization for One Korea, a South Korean support and research institute on North Korean defectors.
A Reuters report last year showed how this money was getting to North Korea via underground agents in China, mostly Chinese of Korean descent. They use ties on both sides of the border to funnel around $10m into the North each year, usually in yuan given the defectors send money to banks in China where it is collected by agents.
Use of the South Korean won is unheard of in North Korea. Even in the recently closed Kaesong industrial zone between the two Koreas, which employed 53 000 workers from the North, wages were made to a North Korean management committee in US dollars, not the South's legal tender.
There are small signs some in the North Korean government may be coming to grips with the hard currency reality.
In the Rason special economic zone in the far northeast of the country on the border with China, the government-run Golden Triangle Exchange Bank changes yuan into North Korean won.
The rate - according to people who visited the bank recently - was 1 200 won per yuan, or 7 350 won per dollar. That's a long way from the official rate of 130 won for one dollar. 

Australia's minimum wage rises

The minimum wage in Australia was raised 2.6% Monday, pushing the lowest weekly wage to AU$622 ($597)
The decision by The Fair Work Commission affects 1.5 million people and will take effect July 1.
It was half the increase unions wanted but three times higher than the level employers wanted.
Commission president Iain Ross said an expected increase in unemployment and a steady inflation rate led to the decision.
"If not addressed these trends may have broader implications both for our economy and for the maintenance of social cohesion in Australia," Ross said.
Australian Chamber of Commerce and Industry chief executive Peter Anderson called it a blow for small businesses.
"This is $1.5bn of increased wages that have to be funded by Australia's small and medium business community," Anderson told the Australian Broadcasting Corporation.

US shale poses challenge to Opec output

The Organisation of the Petroleum Exporting Countries' (Opec's) halcyon days of high prices and high production may be drawing to a close as soaring US output opens a new era for world oil markets.
After a comfortable ride since the 2008 price crash and record revenue of $1 trillion last year, it may have to be more proactive on output policy.
The rise of US shale oil and slack demand will eventually force Opec either to support oil at $100 a barrel by cutting output - offering higher price support to rival producers - or protect market share by keeping the taps open and allowing prices to fall.
Opec's Friday meeting was content to simply agree, as expected, to retain the group's 30 million barrels per day (bpd) output target for the rest of the year.
It will meet again on December 4. Ministers also agreed to set up a committee to investigate the impact of shale.
Oil is just above the $100 level favoured by the group that pumps a third of the world's oil. Opec's leading producer Saudi Arabia says the world oil market is in "good shape".
For now, maybe. But Opec has little room to pump more due to the US oil boom that has shifted the existing competition for marketshare once and for all to Asia, and intensified a rivalry between Opec's top two producers Saudi Arabia and Iraq there.
Core Gulf producers think Opec will still be able to pump at least 30 million bpd, provided US shale grows at a moderate pace. While that does not leave much room for growth, it implies that Opec will not need to scale back significantly.
"This is not the first time new sources of oil are discovered, don't forget history," said the influential Saudi Oil Minister Ali al-Naimi. "There was oil from the North Sea and Brazil, so why is there so much talk about shale oil now?"
There has not been such a surge in flows from outside Opec in decades and that has rung the alarm with some members - particularly Nigeria and Algeria - that feel squeezed.
"The rapid ramp up in US shale bears a striking resemblance to the situation in the early 1980s when North Sea oil production from the UK and Norway was rising very quickly," said Neil Atkinson, director of energy research at Datamonitor.
"This presented Opec with an enormous challenge because at the time demand growth was very weak. Nobody's saying that will happen again, but all the ingredients in that brew are starting to come into place."
Oil above $100 has freed vast quantities of US shale oil in North Dakota and Texas that helped boost US output by 850 000 bpd by the end of 2012.
That is more than each of Opec's two smallest producers, Qatar and Ecuador, pump in total. Light, low sulphur shale poses no threat to Opec's Gulf members that sell heavier crude - but is a headache for Nigeria and Algeria, which produce oil of similar quality.
The surge may even push the United States closer to the Saudi mindset, thinking more like a producer than a consumer keen to keep oil cheap.
Levels of price pain
Last year's surge in US output came with a hefty price tag as the rush to produce drove the cost of pumping marginal crude to $114 a barrel, according to a Bernstein Research report.
While Riyadh welcomes the rise of US shale, the Saudi oil minister himself has said the kingdom would be lucky to go beyond current production rates of about 9 million bpd by 2020 due to new global supplies.
But during that period, Iraq's production will have doubled from current rates of around 3 million bpd, if all goes to plan - a concern for Riyadh.
At some stage, Saudi Arabia may decide to open the taps to shut in the marginal barrel and make Iraq feel some pain, said analysts. The kingdom has done this before - early last decade it let the price fall to punish non-Opec producers. There are no signs of that now.
Oil at $70-$80 could start to impact the economics of some shale oil plays. Iraq's breakeven budget price is well above $100 a barrel.
With no pressure on its budget, analysts say Saudi Arabia could easily pump 8 million bpd at $80 without breaking sweat. After pumping 10 million bpd with oil at $110 last year and 9 million bpd with oil at $110 this year, it has built up formidable financial reserves.
Analysts' estimates for Saudi Arabia's break-even oil price this year vary from around $65 a barrel to $85, depending on projections for its spending.
"For Saudi Arabia, there's plenty of room on the downside in terms of price and quantity before they start to panic," said Yasser Elguindi of Medley Global Advisors.
"North Dakota will cut before anyone in Opec if oil falls to $70."
Others in Opec - including Iran, whose revenue has been sunk by Western sanctions directed against its nuclear programme, Iraq and Algeria - need oil well into triple digits to balance budgets.
This may lead them to call on Saudi Arabia to cut supply in order to support prices. But Riyadh may be thinking counter-intuitively.
"Saudi Arabia's challenge will be to convince Nigeria and Algeria that higher prices will encourage the economics (of US shale) that are their undoing," said Elguindi.
The group will choose its next secretary general when it meets again in December, said the Saudi oil minister. The issue has stalled on competing candidates from Iran, Iraq and Saudi Arabia.
Friday's meeting continued to adjust the criteria for prospective candidates to come forward.

Indian banks to get tough on defaulters

Fed up with a profitable textile company's failure to repay its loan, India's UCO Bank has taken its grievance public, placing newspaper ads last month that brand the industrialist owner of S Kumar's Nationwide Ltd a defaulter.
State Bank of India (SBI), Bank of India  and Bank of Baroda are also preparing to name and shame corporate borrowers which are not paying them back, bank executives told Reuters.
This aggressive tactic for dealing with bad debt marks a major departure from the traditional laid-back approach of Indian state lenders.
Weighed down by stressed loans of nearly $150bn equivalent to more than 10% of bank assets in the country and against a backdrop of the slowest economic growth in a decade, Indian banks are bringing an unprecedented intensity to their recovery efforts.
"We are going hammer and tongs to recover loans," said M S Raghavan, executive director at Bank of India, which last year began opening debt recovery branches to pursue defaulting borrowers.
In the banks' arsenal of debt recovery tools are the power to seize and sell assets, take deadbeat borrowers to court, sell loans to investors, and beef up debt recovery teams, although a slow-moving legal system and the lack of a bankruptcy process limit their effectiveness.
Officials at state banks, which account for about three-quarters of lending in India, expect the push will cut bad loan ratios by at least 1 percentage point.
Bank of India's non-performing loan (NPL) ratio improved slightly to 2.99% of total assets at end-March from 3.08% at end-December.
"If we don't intensify, nothing is going to come to us," Raghavan said.
Traditionally Indian lenders, especially those controlled by the government, have tried to nurse customers through tough times by easing terms or "evergreening" loans - giving new loans to pay old ones  an unlawful practice that many in the industry say is common.
In a country where businesses thrive on personal relationships, Indian banks have typically avoided involving the courts or liquidating assets - time-consuming efforts which often yield only minor results.
Even the so-called fast-track courts for banks, formed in the last decade, can take more than two years to resolve a case.
The central bank has called for better management of bad debts, and wants to strengthen oversight by lenders.
Indian banks tried to recover on $10.9bn in bad loans but managed just a quarter of that through liquidation and lawsuits in the year ended March 2012, the latest data from the central bank shows.
Banks are particularly needled by business chiefs who sit on huge personal fortunes, but whose companies fail to repay loans.
In March, Finance Minister P Chidambaram asked state banks to move against rich "promoters" to recover loans from failing companies after a $1.4bn default by Kingfisher Airlines, controlled by liquor baron Vijay Mallya.
Targets and texts
S Kumars and its Reid & Taylor clothing brand, well-known in India thanks to its endorsement by Bollywood superstar Amitabh Bachchan, owes $19m to UCO Bank, according to the Kolkata-based lender's newspaper ad.
Another lender, SBI, in May sent a liquidation notice to S Kumars and Reid & Taylor, said Soundara Kumar, head of the bank's stressed assets management division.
S. Kumars and Reid & Taylor founder Nitin Kasliwal did not respond to several phone calls from Reuters.
S Kumars earned net profit of 865m rupees ($15.47m) in the nine months to December, according to a stock exchange filing.
"What we are now beginning to see is incidents of such prosperous promoters and sick companies are increasing.
"What we have tried to do is simply send a message across," said a senior executive at UCO in Mumbai, speaking on condition of anonymity because they were not permitted to talk to the media.
There is some evidence that public outing as debt dodgers can goad a company into action.
United Bank of India took out a newspaper ad in April to say pharmaceutical packaging firm Bilcare's outstanding 515m rupees loan was in default. Bilcare later said in a stock exchange statement that it was in touch with lenders and was trying to restructure its loan.
Such methods are likely to become more popular, given the absence of a formal bankruptcy law, and the great time and cost of pursuing collection in court.
"Our legal systems move very slowly. We have such a huge number of pending cases in the courts that we are unable to lay our hands on assets that we can recover from," said Shubhalakshmi Panse, chairperson of state-run Allahabad Bank .
Bankers say errant borrowers often manage to get stay orders from various courts, slowing down the recovery process, and most cases take over two years to be resolved.
Panse said she has given daily loan recovery targets to bank officers and branch managers across India. They send her a text message each day apprising her of the status of those targets.
If borrowers want to stay out of court, they can try the Corporate Debt Restructuring (CDR) Cell, where banks sought to restructure a record $16.6bn in loans in the year that ended in March 2013, an increase of 38% year-on-year.
Worried that CDR enables both borrowers and banks to escape from bad loans too lightly, the central bank has asked lenders to set aside more money in reserve against restructured loans and begin classifying them as bad, starting in 2015.
In a rare case, lenders recently rejected a proposal by outsourcing firm Spanco to restructure a 13bn rupee loan through CDR.
Even the powerful Vijay Mallya could not hold Kingfisher's creditors at bay forever. After threatening to do so for months, banks began liquidating collateral for the airline's loans in March, more than a year after its initial default.
"Trying to be tough is a good step given that whatever they have been doing in the past has not been working," said Ismael Pili, banking analyst at Macquarie Securities in Hong Kong. ($1 = 55.9250 Indian rupees)

NEWS,02.06.2013

Police fire tear gas as protests spread

Turkish police fired tear gas at protesters in Ankara on Sunday while thousands of people occupied Istanbul's main Taksim Square on the third day of mass demonstrations against Turkey's Islamist-rooted government.

Interior Minister Muammer Guler said more than 1 700 people had been arrested in the unrest that has spread to 67 cities nationwide, though most have since been released.

In Istanbul, a sea of protesters from across Turkey's political spectrum flooded Taksim a day after police pulled out of the area, waving flags and chanting "Government, Resign!" and "Istanbul is ours, Taksim is ours!"

From a nearby rooftop, a banner with the words: "Do not surrender" was unfurled.

Taksim has been at the heart of a wave of protests that have spread across the country in the biggest public outcry against Prime Minister Recep Tayyip Erdogan's government since it took power in 2002.

Rights groups have complained about what they said were a "disgraceful" heavy-handed response by police to the demonstrations while Turkey's Western allies appealed for restraint.

The unrest began as a local outcry against plans to redevelop Gezi Park near Taksim, but after a heavy-handed police response quickly snowballed into broader protests against what critics say is the government's increasingly conservative and authoritarian agenda.

Routine

After two days of violence, the situation appeared to have calmed in Istanbul on Sunday after police pulled out of Taksim and officials adopted a more conciliatory tone.

But in Ankara police fired tear gas and used water cannon to disperse about 1 000 protesters who were attempting to march on the prime minister's high-security office, images that were shown live on a television network.

Amnesty International said some protesters had been left blinded by the massive quantities of tear gas and pepper spray used by police.

Amnesty's Europe director John Dalhuisen said police excesses had become routine in Turkey "but the excessively heavy-handed response to the entirely peaceful protests in Taksim has been truly disgraceful."

Human Rights Watch said the number of injured was higher than official figures suggested and that one protester had lost an eye.

Turkey's Nato allies Britain, France and the United States have all urged the Erdogan government to exercise restraint.

German protesters clash with cops

German police used pepper spray and batons against thousands of anti-capitalist demonstrators from the Blockupy movement on Saturday during a second day of protests in Frankfurt against Europe's austerity policies.
Planned rallies in struggling euro zone members Spain and Portugal drew fewer people than expected, but in Germany's financial capital around 7 000 protesters marched with signs reading "Make love, not war" and "IMF - get out of Greece".
The protest was initially peaceful but small groups of masked protesters then hurled stones and smoke bombs at the police who responded with force.
Several protesters and police officers were hurt before the action died down later in the evening. Police at the scene said several arrests had been made, but could not say how many.
A first day of protests on Friday in Frankfurt succeeded in paralysing some of the city's financial institutions, cutting off access to the ECB's iconic tower office building and Deutsche Bank's headquarters.
Police anger
Police angered marchers on Saturday by halting them before they could pass close to the ECB building after protesters let off firecrackers.
In a statement, Blockupy accused the police of wanting to "escalate" tensions and of blocking a legitimate protest.
"This is scandalous," spokesperson Ani Diesselmann said. "The (original) route was approved by several legal institutions."
Police said officers had been repeatedly attacked by the small group of demonstrators, making it necessary for them to use force and pepper spray.
Protests against the "troika" of international lenders that has bailed out struggling euro zone states - the International Monetary Fund, the European Central Bank (ECB) and the European Union - were planned in several countries on Saturday.
Europe's Blockupy movement was formed after the Occupy Wall Street movement in 2011. They blame the budget cuts and labour market reforms supported by the ECB, the IMF and European financial and political leaders for driving the continent into a recession that has left more than a quarter of Greeks and Spaniards out of work and millions of Europe's poor worse off.
Germany's own economy has been fairly resilient to the crisis and many in Europe's struggling southern states blame Chancellor Angela Merkel for enforcing the painful policies in exchange for EU funds which largely come from Germany.
As well as the ECB, on Friday the Blockupy demonstrators targeted several large commercial banks, stores and Frankfurt airport.

Central Europe hit by floods

Authorities in parts of central Europe issued disaster warnings and scrambled to reinforce flood defences on Sunday as rivers swollen by by days of heavy rain threatened to burst their banks.

Several people have died or are missing in the floods in Germany, the Czech Republic and Switzerland.
Czech officials warned that the waters of the Vltava river could reach critical levels in Prague late on Sunday.
Interim mayor Tomas Hudecek said authorities were considering whether to shut down parts of the capital's subway network and called on people not to travel to the city.
In the nearby city of Trebenice a woman was found dead in the rubble after a summer cottage collapsed due to the raging water, Czech public television reported.
Czech Prime Minister Petr Necas said 200 soldiers had been deployed so far to help local authorities.
In Germany, where at least four people have died or are missing, Chancellor Angela Merkel promised federal support for affected areas and said the army would be deployed if necessary.
Several cities, including Chemnitz in the east and Passau and Rosenheim in the south issued disaster warnings.
Passau, which is located at the confluence of three rivers, could see waters rise above record levels of 2002, said mayor Juergen Dupper.
A German news agency reported that large stretches of the Rhine, Main and Neckar rivers have been closed to shipping.
Evacuations are also taking place in neighbouring Austria and Switzerland.
Meteorologists are predicting the rainfall will ease in the coming days.

14 die in US storms

Tornadoes and floods in the United States killed at least 14 people, including two children, officials said on Saturday, with most of the fatalities in Oklahoma where a monster twister struck last month.
Friday night's storms battered areas in and around Oklahoma City with high winds, heavy rain and hail, much of it near where 24 people were killed in the 20 May tornado.
The Oklahoma Medical Examiner's Office announced nine fatalities in the state and said five of the victims have not been identified, while the sheriffs' offices in towns east of Oklahoma City confirmed two other people had died.
In Missouri, authorities said three people died from severe flooding in the wake of the storms.
Streets turned into rivers, with stranded cars submerged in water as high as their door handles in some places. CNN said a massive sink hole off a major road developed due to the deluge, halting traffic.
The National Weather Service's Storm Prediction Centre in Norman, Oklahoma, warned that the severe weather was shifting eastward again Sunday, with damaging winds and heavy downpours and possibly small hail and isolated tornadoes expected to threaten northern Virginia through Maine.
And northern Mexico was also bracing for severe thunderstorms, strong winds, and possibly hail and tornadoes.
Local broadcaster KOCO reported that 77 people had been admitted to hospitals with storm-related injuries.
Power company OG&E, meanwhile, reported 65 000 outages by late on Saturday, down from a high of 120 000, and the American Red Cross has opened shelters for those in affected areas.

Southern California's wildfire explodes

A fire that destroyed at least five structures and threatened hundreds of others exploded in size overnight, burning dangerously close to two communities north of Los Angeles.

Erratic wind spread the blaze in the Angeles National Forest to nearly 106km² on Sunday, triggering the evacuation of nearly 1 000 homes.

Matt Corelli of the Forest Service said that five structures had been razed by the fire and at least 10 other structures were damaged.

Crews working in steep terrain expected cooler weather after temperatures above 38ºC on Saturday.

The wind pushed the fire up and down steep slopes, creating embers that sparked spot fires in different directions.

The fire was about 20% contained.

A huge plume of smoke could be seen from various parts of northern Los Angeles county and air-quality officials warned against strenuous outdoor activity.

The blaze broke out near a hydro-electric plant near the Los Angeles aqueduct on Thursday, forcing about 200 evacuations in the mountain community of Green Valley.

Evacuations remained in effect for the Cottonwood campground and two youth probation camps along Lake Hughes Canyon Road.

The flames were chewing thick, dry brush that hasn't been burned in about a dozen years.

The cause of the fire was under investigation.

NEWS,01.06.2013

Turkey Protests: Erdogan Calls For Immediate End To Demonstrations As Clashes Flare

Turkish Prime Minister Tayyip Erdogan made a defiant call for an end to the fiercest anti-government demonstrations in years on Saturday, as thousands of protesters clashed with riot police in Istanbul and Ankara for a second day.

The unrest was triggered by government plans for a replica Ottoman-era barracks housing shops or apartments in Istanbul's Taksim Square, long a venue for political protest, but has widened into a broader show of defiance against Erdogan and his Islamist-rooted Justice and Development Party (AKP).

Police fired teargas and water cannon down a major shopping street as crowds of protesters chanting "shoulder to shoulder against fascism" and "government resign" marched towards Taksim, where hundreds were injured in clashes on Friday.

A police helicopter buzzed overhead as groups of mostly young men and women, bandanas or surgical masks tied around their mouths, used Facebook and Twitter on mobile phones to try to organise and regroup in side streets.

"If this is about holding meetings, if this is a social movement, where they gather 20, I will get up and gather 200,000 people. Where they gather 100,000, I will bring together one million from my party," Erdogan said in a televised speech.

"Every four years we hold elections and this nation makes its choice ... Those who have a problem with government's policies can express their opinions within the framework of law and democracy," he said.

Police later pulled back from Gezi Park in Taksim, where the demonstration started peacefully on Monday with people pitching tents in protest at trees being torn up for the redevelopment.

Waiters scurried out of luxury hotels lining the square, on what should be a busy weekend for tourists in one of the world's most visited cities, ferrying lemons to protesters, who squirted the juice in their eyes to mitigate the effects of tear gas.

"People from different backgrounds are coming together. This has become a protest against the government, against Erdogan taking decisions like a king," said Oral Goktas, a 31-year old architect among a peaceful crowd walking towards Taksim.


MODERN-DAY SULTAN

Stone-throwing protesters also clashed with police in the Kizilay district of central Ankara as a helicopter fired tear gas into the crowds. Riot police with electric shock batons chased demonstrators into side streets and shops.

Protests also broke out in the Aegean coastal city of Izmir late on Friday.

Erdogan said the redevelopment of Gezi Park was being used as an excuse for the unrest and warned the main opposition Republican People's Party (CHP), which had been given permission to hold a rally in Istanbul, against stoking tensions.

But the protests included a broad spectrum of people opposed to Erdogan and were not organised by any political party.

CHP officials called on its members not to take party flags with them to the protests, apparently concerned they would be held responsible for the violence, and party leader Kemal Kilicdaroglu accused Erdogan of behaving like a dictator.

"Tens of thousands are saying no, they are opposing the dictator ... The fact that you are the ruling party doesn't mean you can do whatever you want," he said.

Erdogan has overseen a transformation in Turkey during his decade in power, turning its once crisis-prone economy into the fastest-growing in Europe.

He remains by far the country's most popular politician, but critics point to what they see as his authoritarianism and the religiously conservative government's meddling in private life in the secular republic, accusing him of behaving like a modern-day sultan.

Tighter restrictions on alcohol sales and warnings against public displays of affection in recent weeks have also led to protests. Concern that government policy is allowing Turkey to be dragged into the conflict in neighbouring Syria by the West has also sparked peaceful demonstrations.


REASONABLE FORCE

Residents hung out of windows and balconies banging pots and pans in support of the protesters in the streets below.

Medics said around 1,000 people had been injured in the clashes in Istanbul. At least four lost their eyesight after being hit by gas canisters, while four more were being treated for fractured skulls, the Turkish Doctors' Association said.

The U.S. State Department said it was concerned by the number of injuries while Amnesty International and the European parliament raised concern about excessive use of police force.

Erdogan acknowledged mistakes had been made in the use of tear gas and said the government was investigating, but said the police reserved the right to use reasonable force and vowed that the redevelopment plans for Taksim would go ahead.

"Taksim Square can't be a place where extremist groups hang around," Erdogan said of a location which has long been a venue for mass demonstrations.

First-Ever Study of Global Economic Inequality: Richest 8% Earn 50% of Earth's Incomes

The lead research economist at the World Bank, Branko Milanovic, will be reporting soon, in the journal Global Policy, the first calculation of global income-inequality, and he has found that the top 8% of global earners are drawing 50% of all of this planet's income. He notes: "Global inequality is much greater than inequality within any individual country," because the stark inequality between countries adds to the inequality within any one of them, and because most people live in extremely poor countries, largely the nations within three thousand miles of the Equator, where it's already too hot, even without the global warming that scientists say will heat the world much more from now on.
For example, the World Bank's list of "GDP per capita (current US$)" shows that in 2011 this annual-income figure ranged from $231 in Democratic Republic of Congo at the Equator, to $171,465 in Monaco within Europe. The second-poorest and second-richest countries respectively were $271 in Burundi at the Equator, and $114,232 in Luxembourg within Europe. For comparisons, the U.S. was $48,112, and China was $5,445. Those few examples indicate how widely per-capita income ranges between nations, and how more heat means more poverty.
Wealth-inequality is always far higher than income-inequality, and therefore a reasonable estimate of personal wealth throughout the world would probably be somewhere on the order of the wealthiest 1% of people owning roughly half of all personal assets. These individuals might be considered the current aristocracy, insofar as their economic clout is about equal to that of all of the remaining 99% of the world's population.
Milanovich says: "Among the global top 1 per cent, we find the richest 12 per cent of Americans, ... and between 3 and 6 per cent of the richest Britons, Japanese, Germans and French. It is a 'club' that is still overwhelmingly composed of the 'old rich'," who pass on to their children (tax-free in the many countries that have no estate-taxes) the fortunes that they have accumulated, and who help set them up in businesses of their own - often after having sent them first to the most prestigious universities (many in the United States), where those children meet and make friends of others who are similarly situated as themselves.
For example, on 22 April 2004, The New York Times headlined "As Wealthy Fill Top Colleges, Concerns Grow Over Fairness," and reported that 55% of freshman students at the nation's 250 most selective colleges and universities came from parents in the top 25% of this nation's income. Only 12% of students had parents in the bottom 25% of income. Even at an elite public, state, college, the University of Michigan, "more members of this year's freshman class ... have parents making at least $200,000 a year [then America's top 2%] than have parents making less than the national median of about $53,000 [America's bottom 50%].'"
Most of the redistribution that favors more than just the top 1% has occurred in the "developing" countries, such as China. However, a larger proportion of the world's population live in nations of Central and South America, Africa, etc., where today's leading families tend overwhelmingly to be the same as in the previous generation. They, too, near the Equator, are members of the "club," but there are fewer of them.
Milanovic finds that globally, "The top 1 per cent has seen its real income rise by more than 60 per cent over those two decades [1988-2008]," while "the poorest 5 per cent" have received incomes which "have remained the same" - the desperately poor are simply remaining desperately poor. Maybe there's too much heat where they live.
This study, in Global Policy, to be titled "Global Income Inequality in Numbers: In History and Now," reports that economic developments of the past twenty years have caused "the top 1 per cent to pull ahead of the other rich and to reaffirm in fact - and even more so in public perception - its preponderant role as a winner of globalization."

Europe: A Leaning Tower of Babel

The eurozone today has become a leaning Tower of Babel. The sovereign debt crisis and the high social costs of austerity have severely weakened its foundation. Whether this tottering edifice designed to thread diversity through the needle eye of a single currency finally collapses and falls, or is able to right itself, will depend on re-founding a European narrative for the 21st century.
The project of European unity was born out of the fear of war, which devastated the continent twice in the 20th century, and the promise of prosperity. Precisely because of the last few decades of step-by-step integration, war is no longer a danger -- and thus has lost its force as the compelling raison d'etre of unity. On the other hand, if, as the current situation suggests, integration means more pain than gain, the "lost generation" of youth facing a jobless future can be forgiven for asking, "why Europe?"
At the recent town hall meeting organized in Paris by the Berggruen Institute, French President Francois Hollande called for a "new narrative" for Europe that would appeal to the "post-crisis" generation of today as the "post-war" narrative appealed to the generation that founded the European Union. Jacques Attali, the former top aide to Francois Mitterrand and mentor to Hollande, told the students of Sciences Po, where the town hall meeting was held: "Young people today are faced with three options if the current eurocrisis is not resolved -- leaving Europe, staying in Europe without hope or going into politics and starting a revolution."
As Attali's comment suggests, the despair of youth today is destroying their faith in the promise of Europe, as we see with the success of the left-populist blogger-comedian Beppe Grillo in Italy. Right-wing movements across Europe from the True Finns to the neo-fascist Golden Dawn in Greece yearn for the days before globalization, Muslim immigration, gay marriage and the Growth and Stability Pact.
The great danger is that the despair and alienation over the failure of Europe to deliver a future for its next generation will conjoin with the backward-looking, reactionary right in one great anti-European eruption. That would finally bring the historical project of European integration crashing to the ground.
In this context, pro-Europeans need to heed a truth of the human condition that Charles de Gaulle fully understood: Identity is rooted in the nation that is, belonging to a unique way of life; what Johann Gottfried Herder called "volksgeist." Papering over this truth with a currency managed (or mismanaged) by distant bureaucrats with functional acronyms in Brussels only suppressed this reality, not diminished it.
Unless de Gaulle's "certain idea of France" and its equivalent in other nations is replaced with an "a certain idea of Europe," the whole thing will shatter into shards of a once-vibrant dream.
The challenge for pro-Europeans is not to dismiss national sentiment, but seek to forge a common identity that leaves plenty of room for diversity while delivering opportunity and security through a strong but limited European government.
At the Berggruen Institute meeting in Paris, students from Sciences Po, the London School of Economics and the Hertie School of Governance in Berlin proposed a narrative for their post-crisis generation founded in "freedom and solidarity." The European identity for their generation, they argued, would be bound up with the founding idea of European civilization -- the universality of reason and the free individual combined with a social model that doesn't let fellow citizens fall into the cracks as Europe faces the competitive winds of globalization.
It remains to be seen if such a narrative is convincing. Many fear that the 2014 European Parliament elections will become a platform that will give full voice to the nationalist and populist anti-European backlash. Perhaps such an eventuality ought to be welcomed, not feared, because it would force a strong redefinition of the pro-European identity in the face of an existential challenge.
When al-Qaeda took down the Twin Towers in New York in 2001, Samuel Huntington, the Harvard theorist who wrote "The Clash of Civilizations," argued that the attacks had "given back to the West its common identity." The same dynamic will take place if the European idea is thoroughly challenged in 2014.
Whether or not "a certain idea of Europe" triumphs, however, will be determined by how quickly and effectively the present European leaders and institutions stem the current crisis. The announcement in Paris of a concerted "offensive" against youth unemployment by the French, German, Spanish and Italian governments is a propitious start.
What matters now is whether they will deliver hope through concrete action instead of more empty promises between now and the 2014 election. The fate of Europe is in their hands.

 

Facing the Climate Crisis

On May 9th, NOAA reported a significant milestone: CO2 emissions had crossed 400 parts per million (ppm), a level not seen for three million years. Although this figure has since been revised to 399.89 ppm, even this lower number paints a grim picture. Heat-trapping greenhouse gas emissions are projected to increase 50 percent by 2050, primarily due to a 70 percent growth in energy-related CO2 emissions. Average global temperature is expected to rise by 3-6 °C by the end of the century, exceeding the internationally agreed upon goal of limiting it to 2 °C above preindustrial levels. The Global Warming Potential of methane, the second most prevalent greenhouse gas after CO2, is expected to be more than 50 times greater than that of carbon dioxide over the next 20 years. The primary source of methane is industrial animal agriculture, which supports global meat consumption. Meat production has tripled during the last 40 years, up by 20 percent in the last decade alone.
Scientists warn that if current patterns of energy use continue, planetary biophysical systems could be destabilized, triggering "abrupt or irreversible environmental changes that would be deleterious or even catastrophic for human well-being." Yet even as the climate crisis intensifies, minimal efforts to address climate change through the Kyoto Protocol the United Nations Framework Convention on Climate Change have been derailed by international economic competition. The United Nations Climate Change Conference in Copenhagen in 2009 failed to extract a binding agreement to limit emissions of greenhouse gases from even a single country. The 117 countries that endorsed the target of 350 ppm were the poorest and most vulnerable countries, not rapidly industrializing countries like India and China or the "rich, powerful, and deeply fossil-fuel addicted" countries of the Global North. Developing countries want these industrial juggernauts to take the lead in sharply reducing emissions. Conversely, fearing the erosion of their competitive advantage, developed countries are retreating from earlier targets and obligations. The United States has never been a member to the Kyoto Protocol. Canada, Japan, and Russia will not take part in the second commitment period of the Protocol starting in 2013. Australia and New Zealand also remain uncommitted.
About 80 percent of the world's environmental damage is attributed to the wealthiest 20 percent of the world's population the "overconsumers" of the industrialized North, whose lives are "organized around [individually owned] cars, meat-based diets, use of packaged and disposable products." At the bottom is the poorest 20 percent, who live predominantly in the Global South in "absolute deprivation," travelling mostly by foot, eating nutritionally poor diets, drinking contaminated water, using local biomass, and producing negligible wastes. The overconsumption of the top rung and the under consumption of the bottom are both unsustainable. The middle rung, the 60 percent also living mostly in the Global South -- who travel mostly by bicycle and public surface transportation, eat healthy diets of grains, vegetables and some meat, use unpackaged goods, and recycle wastes -- represent a balanced middle that should become the global norm. Unfortunately, however, more and more countries are adopting the Western model of development and its accordant hyperconsumerism.
Renewable, clean sources of energy and solar, wind, and biomass technologies must become the means for economic growth. The average person in the developed world must "cut meat consumption in half by the year 2050" to meet the emissions reduction targets set by the IPCC (Intergovernmental Panel on Climate Change). Political will is necessary to effect such sweeping changes in production and consumption. However, as Dr. James Hansen, the NASA scientist who is leading the effort to reverse climate change states, "greenwash" is a "near universal response of politicians to the climate change issue." As he goes on to point out, energy lobbyists in Washington receive handsome payouts from energy companies.
At the crux of the problem is the dualism of self and other. Ultimately, all of us, self-absorbed individuals pursuing narrow self-interest over environmental sustainability and human well-being are accountable for the climate crisis to varying degrees. If we are seriously concerned about planetary survival, and thus human survival, we need to reflect more deeply on our uncritical internalization of dominant values and worldview.
Although current environmental and social collapse are attributable largely to the excesses of modern technology and economic growth, the roots of these crises go all the way back to the pre-capitalist era and the psychological and social evolution of hierarchy and domination. Over the course of history, a way of viewing reality and guiding social action defined by human domination of nature and each other has intensified; in fact, it is now being realized on a global scale. Sustainability and well-being require a shift from the prevailing system of domination and extremism to a global consciousness and a socioeconomic system based on interdependence and partnership. Adoption of appropriate technology, rational allocation of resources, and balanced and equitable consumption require a partnership ethic based on cultivating the values of moderation, tolerance, nonviolence, and compassion.