Opinion: How real is voter fraud?

Opinion: How real is voter fraud?: In the space of two weeks, two different courts have come to two different results in evaluating the legality of two similar voter identification laws.

Proibição de lâmpadas incandescentes na UE preocupa alemães

Proibição de lâmpadas incandescentes na UE preocupa alemães: A Europa sela o fim da clássica lâmpada incandescente a fim de melhorar a eficiência energética. Mas muitos alemães se negam a adotar as novas lâmpadas econômicas, com receio do mercúrio encontrado dentro delas.

Bin Laden book: Pentagon may go after publisher, warns legal expert

The publishers of a book that gives a first-hand account of the raid that killed Osama bin Laden could face legal action over the publication, along with the Navy SEAL author, according to lawyer Mark Zaid,
"If this Navy SEAL has within his secrecy agreements, and this may be subject to dispute, a requirement for prepublication review the mere fact that he did not subject the book would be a persay breach of contract violation and in that sense it would be a slam dunk.

Three bailed over murder of Polish street cleaner in west London

A 30-year-old man remains in custody on suspicion of murder along with two others on suspicion of assisting an offender
Three people arrested over the murder of a street cleaner stabbed to death as he tried to stop a burglar, have been released on bail.
Piotr Mikewicz, 40, was attacked on Wednesday afternoon in Shepherds Bush, west London, and was taken to hospital by air ambulance but died the next day.
Scotland Yard said six people were arrested in connection with Mikewicz's death on Thursday. A 30-year-old man arrested on suspicion of murder remains in custody at a central London police station.
Two other men and three women were all detained on suspicion of assisting an offender, with the two men and one of the women having now been bailed pending further inquiries.
Police are continuing to appeal for witnesses to the attack, while tributes have been paid to Polish national Mikewicz, who was described as "a friend to everyone with a colourful and friendly personality" by his employer, private contractor Serco.
Deputy leader of Hammersmith & Fulham council Greg Smith said Mikewicz had "courageously tried to intervene" when he saw a crime being committed.
He added: "Everyone at the council is deeply saddened by the tragic news that Piotr Mikewicz, who was one of the borough's dedicated street cleaners, has died after being stabbed by some scum of the earth who obviously has no regard for human life.
"Piotr was a hard-working man who was a friendly face to all who knew him on his regular beat."
Acting chief superintendent Peter Clilverd said in a blog that police were using "all of our available resources" to catch the killer.
Police said they did not yet have the result of a post-mortem examination, which was due to be carried out on Friday.
The local authority has opened a book of condolence and is flying the flag at Hammersmith town hall at half mast.

Atirador de Nova Jersey postou no Twitter sobre matar colegas

Atirador de Nova Jersey postou no Twitter sobre matar colegas:
OLD BRIDGE, Nova Jersey - Terence Tyler, o atirador que matou dois colegas de trabalho e, em seguida, se suicidou, nos Estados Unidos, postou a seguinte pergunta no Twitter, em 2009: “É normal você querer matar TODOS os seus colegas de trabalho?”.
O incidente aconteceu na manhã da última sexta-feira (31), dentro de um supermercado Pathmark, onde o rapaz de 23 anos trabalhava há duas semanas, na cidade de Old Bridge, no estado de Nova Jersey.
O atirador era um ex-fuzileiro naval, que lutava contra a depressão. O comentário foi postado na rede social quando o americano ainda trabalhava na Marinha e estava alocado na Califórnia.
Os motivos do crime ainda estão sendo investigados pela polícia americana, mas, segundo o jornal “New York Daily News”, membros da família dizem que Tyler foi dispensado do serviço militar há dois anos, após ser diagnosticado com depressão e nunca ter se recuperado totalmente pela morte da mãe, cinco anos atrás.
Autoridades disseram que Tyler deixou seu posto no supermercado às 3h30, de carro, e retornou à loja com um fuzil AK-47 e uma pistola automática. Cerca de doze funcionários estavam no estabelecimento, fechado, inserindo novos preços de produtos no computador.
O jovem fez mais de 16 disparos, atirando num funcionário que estava do lado de fora da loja e quebrando janelas. Ele ainda atirou em outros cinco colegas, matando Christina LoBrutto, de 18 anos, e Bryan Breen, 24.

Iran to hold major air defence drill: commander

Iran to hold major air defence drill: commander: DUBAI (Reuters) - Iran will hold a large-scale military drill involving all its air defence systems next month, an Iranian commander was quoted as saying on Saturday, one of a number of military simulations it has carried out this year.

Alemanha assume presidência do Conselho de Segurança

Alemanha assume presidência do Conselho de Segurança: Durante mandato de um mês, governo em Berlim pretende aumentar isolamento sírio. ONU também passa a contar com novo enviado especial à Síria, o diplomata argelino Lakhdar Brahimi, que substitui Kofi Annan.

Birds hold 'funerals' for dead

Birds hold 'funerals' for dead: When they encounter a fallen bird, western scrub jays call out and gather around the body, scientists discover.

Mexican TV crew's 'frontline' despatch : 'Sorry, we've been arrested for drug trafficking'

A group of suspected drug dealers who posed as roving foreign correspondents for a Mexican television station have been arrested after police found $9.2 million in cash in their vans.
Claiming to be reporters from Televisa, the world's largest Spanish-language television network, the 18-strong group spared no effort in maintaining their disguise as they drove in a six-vehicle convoy through Nicaragua. Their vans were all emblazoned with the Televisa logo, while the television "crews" inside carried press badges, high-definition cameras, microphones and a satellite dish. In the end, though, it was Nicaraguan police who got the "scoop". Acting on a tip-off, they pulled the vans over on a mountain road and discovered black gym bags stuffed with cash. More

Why Are Trace Chemicals Showing Up in Umbilical Cord Blood?

Why Are Trace Chemicals Showing Up in Umbilical Cord Blood?:
Dear EarthTalk : A few years back a study found over 200 chemicals in the umbilical cords of newborns, particularly African-American, Asian and Hispanic babies. What are the causes of this phenomenon and what can be done about it? --Bettina Olsen, New York City [More]

Ataques suicidas matam 12 pessoas em base da Otan no Afeganistão

Ataques suicidas matam 12 pessoas em base da Otan no Afeganistão:
CABUL, Afeganistão - Pelo menos treze pessoas morreram e cerca de 50 ficaram feridas em dois atentados suicidas a uma base da Otan (Organização do Tratado do Atlântico Norte), no leste do Afeganistão, na manhã deste sábado (1), de acordo com a rede “BBC”. As vítimas são nove civis e quatro policiais afegãos. Um porta-voz da Força Internacional de Assistência para Segurança da Otan (Isaf) disse que nenhum membro da organização foi morto no ataque, que aconteceu no distrito Sayed Abad, dentro da província de Wardak.
- O carro-bomba era enorme, matando doze e ferindo mais 50 - disse o porta-voz do governo da província, Sahidullah Shahid.
O Talibã, que assumiu a responsabilidade pelo atentado, disse que enviou dois homens-bomba, um a pé e outro em um caminhão com explosivos. A base da Otan também foi alvo de um ataque no ano passado, na véspera do décimo aniversário do atentado de 11 de Setembro, quando um homem-bomba, a bordo de um carro, entrou no local, matando quatro civis e ferindo 77 soldados americanos.
A província de Wardak testemunhou o pior incidente isolado sofrido por forças estrangeiras dos últimos 10 anos de guerra, quando o Talibã derrubou a tiros um helicóptero, em 2011, deixando 38 soldados mortos, sendo 30 deles americanos.
Dois soldados americanos foram mortos no sábado em um outro ataque no leste na província de Ghazni, disse a Isaf em comunicado. A violência tem aumentado no Afeganistão por conta do prazo, que vence em 2014, dado à Otan para a retirada da maior parte das tropas do país. Há temores de que os 350 mil soldados afegãos treinados pela Otan não sejam capazes de conter os rebeldes depois da saída da organização do local.
Essa semana, 19 afegãos, incluindo um garoto adolescente e uma jovem, foram mortos em três atentados diferentes. Ataques internos, quando forças afegãs se voltam contra tropas estrangeiras, têm aumentado. Três soldados australianos foram mortos a tiros por um homem que usava o uniforme do exército afegão esta semana, elevando para 15 o número de soldados estrangeiros mortos este mês em ataques internos. No total, 45 soldados liderados pela Otan já morreram em 2012 nesse tipo de ataque.

Inmates hacked prison's record system

Inmates hacked prison's record system: In a major security breach that caught the attention of the FBI, New Hampshire inmates gained entry to the Corrections Information System (CORIS) and may have had access to personal information and the ability to amend sentencing, parole and release dates. That's according to Mark Jordan, a former union president for prison guards in his area who also told The Union Leader that inmates using the computers are minimally supervised by just one guard and a civilian.

'German minister should address human rights'

'German minister should address human rights': Soy farming in Argentina is often linked to land-grabbing and displacement of small-scale farmers. Aid organizations are demanding action from German Agriculture Minister Ilse Aigner during her trip to South America.

U.S. drone strike kills 8 suspected militants: Yemeni officials

U.S. drone strike kills 8 suspected militants: Yemeni officials: ADEN/SANAA (Reuters) - Eight Islamist militants were killed by a U.S. drone strike on Friday in a remote part of Hadramout, a Yemeni official said, the third such strike in the eastern Yemeni province this week.

Canada hunts maple syrup thieves

Canada hunts maple syrup thieves: Thieves in Canada steal millions of dollars worth of highly prized maple syrup from a warehouse, Quebec police say.

Argentina strikes back at U.S. in WTO beef row

GENEVA (Reuters) - Argentina on Friday accused the United States of unfairly blocking imports of Argentine beef, ratcheting up trade tensions with its large neighbor to the north.

Greek police protest at pay cut plans

Greek police protest at pay cut plans: The military and other uniformed workers are also targeted in the new €11.9bn austerity package to be presented to international lenders

Brazil second-quarter growth underwhelms

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Spain gives Bankia urgent cash boost

Spain gives Bankia urgent cash boost: Madrid has been forced to inject emergency liquidity into Bankia after the nationalised lender announced a €4.4bn loss for the first half of the year

Mexico's Pena Nieto confirmed president-elect, rival defiant

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Germany -- Insane Or Just Plain Stupid?

Germany -- Insane Or Just Plain Stupid?: After the tsunami destroyed the Fukushima plants, Germany moved quickly to shut eight nuclear power plants, and made plans do away completely with their nuclear capability. Despite the best safety record of any industry in the country, and the critical role nuclear plays in fueling German industry, Germany?s past experience with large tsunamis was just too horrific to ignore. And Germany?s strong economy and commitment to protect the environment were small prices to pay for Chancellor Merkel to shore up her weak coalition with the Greens. Maybe she can ask Greece for help later.

Swedish Spy Agency Criticized for James Bond Party

Swedish Spy Agency Criticized for James Bond Party:

A replica gun from the 1974 James Bond movie, 'The Man with the Golden Gun', autographed by Roger Moore June 28, in London, England. (Bethany Clarke/Getty Images)

The Swedish intelligence agency is under fire for hosting a lavish James Bond-themed party that cost around $800,000.
The party had a guest list of around 1,000 people, celebrity entertainers, and a band playing James Bond themes, according to the Dagens Nyheter newspaper, which first broke the story.
Prime Minister Fredrik Reinfeldt said that agency heads “are well paid, they should know better” than to hold such parties, according to The Associated Press.

The intelligence agency, SAPO, said that the party was held after one day of educational activities following a year of a heavy workload.
“In this case, the agency set aside a large amount of money so that our roughly 1,000 employees stationed across Sweden could gather, something that is necessary for us to carry out our mission,” SAPO chief Anders Thornberg was quoted by the news agency as saying.
Thornberg said the agency was “under pressure” after reorganization and a suicide bombing in Stockholm carried out by an Islamist militant in 2010, Reuters reported.

Celebrated Italian Botanical Garden Villa Taranto Ravaged by Storm

Celebrated Italian Botanical Garden Villa Taranto Ravaged by Storm:

An uprooted tree at the Villa Taranto botanical garden in Italy after last Saturday's storm. (Matteo Marcovicchio_Assessore all'Ambiente Comune di Verbania)

Ten minutes was enough to wipe out one of the most prized botanical gardens in Europe. The park of Villa Taranto, the pride of Italy’s Lake Maggiore, has been devastated by a storm that destroyed nearly 100 years of work and a priceless heritage of ancient trees and rare species.
Heavy rain accompanied by winds of 62 mph (100 km per hour) crossed the hill of the park and gusts uprooted 300 of the 1,000 large plants in the garden, which struck the vegetation below. Sixteen hectares of terraces, hatcheries, floral architecture, and a rich collection of 20,000 plant species of particular importance were devastated in last Saturday night’s storm.

The authorities immediately declared a state of emergency, but the massive and sudden destruction took everyone by surprise, making it difficult to even assess the damage.
“Our intention is to reason calmly in a few days, because even I, who has been the director for 34 years, I have not metabolized it,” said Roberto Ferrari, director of the Villa Taranto. “And then figure out what to start doing.”
The gardens of Villa Taranto were designed and made by Scottish Capt. Neil McEacharn. He loved Italy and botany, and in 1931 he bought a property on Lake Maggiore to make an exemplary park with rare species, fountains, and terraced gardens.
Each plant has its own story. For example, the Emmonopterys henryi, a plant native to China, was introduced to Europe in 1907. It was planted in these gardens in 1947, but they had to wait until July 1971 for its first flowering, an extraordinary event that had never occurred before in Europe.
It was the idea of the Infante of Spain, Don Jaime in 1938 to plant the Davidia invulcrata, also from China, known for its spectacular flowering, hence the name “handkerchief tree.”
The botanical value of the park, its history, and the beauty of its spaces have made it an important tourist destination. Donated by Capt. McEacharn to the Italian State in 1939 and opened to the public since 1952, it hosts 150,000 visitors a year from around the world.
The damage is a substantial loss for Italian tourism, which is centered on culture. Its traditional landscape is as significant as the artistic work and the atmosphere of its cities.
Despite encouragement and requests from the authorities to reopen next season, not to interrupt the flow of tourism, no one at the garden dares predict when it will be possible to do so.
Funding is certainly a major difficulty. But the challenge is also in rethinking the entire park and the decades of work and passion that created it.
“A garden is born and dies, it is a living being, then you can not expect to see a garden as it was before,” said the director of Ferrari, sadly.

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The nursuries of the park that were not destroyed contain specimens of botanical heritage, but it’s still a process of starting again. “Of course these species are 50 cm (19.68 inches) high. Here we talk about fallen plants between 25 and 30 meters (82 and 98 feet), ancient trees,” explains the director.
“The next generations [...] will see the garden of Villa Taranto in a few years. They will see the plants grow; they will realize what it means to see it with its leaves, without leaves, in spring in autumn. But that’s part of the game of life,” he said.

Mystery virus attack blows Qatari gas giant RasGas offline

Mystery virus attack blows Qatari gas giant RasGas offline:
Stop the fuel pumps too? Ha ha ha! No. A mystery virus has infected the network of Qatar's natural gas pumper RasGas, prompting bosses to pull the plug on the biz's internet connection. Office systems have been unusable since the malware struck on 27 August, according to local reports.…

Genetic Engineering: A Food Fix?

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Abortion law may put in vitro in danger

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Marseille calls for army as drug killings escalate

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Cutting Food Waste Increases Corporate Profits & Consumer Savings, Says Report

Cutting Food Waste Increases Corporate Profits & Consumer Savings, Says Report: How often do you find yourself throwing away wilted greens or leftovers that have sat too long in your refrigerator? Probably a lot, according to a new report by the Natural Resources Defense Council (NRDC) entitled "Wasted: How America Is Losing Up to 40 Percent of Its Food from Farm to Fork to Landfill." On average, people in the U.S. throw away 20 pounds of food each month, which amounts to an annual loss of $1,350 and $2,275 for the average family of four.

Venezuela to Investigate Report That Miners Massacred Indians

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Iran doubles underground nuclear capacity: IAEA

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Ryan accused over speech 'errors'

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Would You Infect Yourself With Worms For Better Health?

Would You Infect Yourself With Worms For Better Health?:
By Peter Smith ,Peter Smith
Jim Lahey, founder of Sullivan Street Bakery in New York, fosters an obsession with microorganisms. Yeasts and bacteria give rise to his leavened sourdough breads--and he recently infected himself with intestinal worms to stave off a wheat sensitivity he attributes to working around flour dust. "These worms are meant to be in our bodies as part of human evolution."
Lahey may be taking the experiments further than most, but he is not alone in thinking that a modern, industrialized world may be making us sick because our good, clean standard of living is too easy on the body. Hygiene is a mixed blessing: Washing your hands, drinking clean water, and eating safe, refrigerated foods comes with vast reductions in childhood mortality. Yet, the hygiene hypothesis--an idea first put forward by epidemiologist David Strachan in 1989--suggests that chronic underexposure to germs and pathogens also corresponds with the rise of allergies and chronic inflammatory diseases.
[More]

Dique ameaça romper e Louisiana ordena a retirada de mais de 60 mil pessoas

Dique ameaça romper e Louisiana ordena a retirada de mais de 60 mil pessoas:
WASHINGTON - Isaac pode ter deixado de ser furacão para se transformar em tempestade tropical, mas a elevação do nível das águas por ele causada ameaça romper um dique nesta quinta-feira e levou as autoridades da Louisiana a ordenarem uma ampla retirada de moradores ao longo do rio Tangipahoa, entre as cidades de Kentwood e Robert.

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O dique fica numa represa no Parque Estadual Percy Quinn, no estado do Mississippi, e seu rompimento afetaria também o estado vizinho, levando à necessidade de retirar imediatamente 60 mil pessoas do lado da Louisiana, informou o administrador do distrito de Tangipahoa, Gordon Burgess, à rede de TV WWLTV.
O governador Bob Jindal enviou ônibus à área para ajudar na retirada da população. O local está a 160 quilômetros ao norte de Nova Orleans, que não sofre risco iminente, segundo as autoridades.
Na noite de ontem, o presidente Barack Obama declarou estado de emergência em áreas afetadas pelo furacão Issac, nos estados da Louisiana e do Mississippi. A medida tem como objetivo agilizar a entrega de ajuda federal e os esforços de recuperação na costa do Golfo do México.
Obama assinou o decreto para 35 distritos da Louisiana e 35 condados no Mississippi. A medida põe fundos federais à disposição de governos estatais e locais e certas organizações sem fins lucrativos para trabalhos de emergência.
Enquanto isso, Isaac - que deixou de ser considerado um furacão na quarta-feira, sendo rebaixado novamente à categoria de tempestade tropical - se move lentamente para o norte, após causar significantes estragos no sul do país. O fenômeno ainda pode causar enchentes e alagamentos nos próximos dias, mas deve se enfraquecer ainda mais nesta quinta-feira e pode se tornar uma depressão tropical, disse o Centro Nacional de Furacões dos Estados Unidos (CNH, na sigla em inglês).
Apesar dos estragos, Isaac não teve a mesma dimensão destrutiva do Katrina, que devastou Nova Orleans, há sete anos. O prefeito da cidade em Louisiana, Mitch Landrieu, disse que o sistema contra enchentes construído após a tragédia de 2005 funcionou “exatamente como deveria”. Foi a primeira vez que a bilionária rede de diques foi testada diante de um furacão. Mais de 840 mil moradores de Lousiana, Mississippi, Arkansas, Texas e Alabama continuam sem luz nesta manhã, e um homem, de 36 anos, morreu no distrito de Vermilon, em Louisiana.
Por causa das enchentes, muitas pessoas estão abrigadas em sótãos e lajes. O Serviço de clima americana acredita que três tornados atingiram Louisiana e o Alabama nesta madrugada, destruindo pelo menos uma casa e interrompendo o fornecimento de energia elétrica. Em algumas cidades, a população foi instruída a ferver a água antes de usá-la.
Com o Isaac recuando, estados mais ao norte esperam desesperadamente que a tempestade traga chuva. A região vive uma das secas mais duras dos últimos tempos nos EUA.

Yasser Arafat 'murder investigation launched'

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US soldiers 'plotted to overthrow government'

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British couples flying to US for banned baby sex selection

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Two dead in US Hantavirus outbreak

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Lexmark to quit inkjet printers

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King of Spain's scandal-hit son-in-law steps down at Telefonica

King of Spain's scandal-hit son-in-law steps down at Telefonica: MADRID (Reuters) - The King of Spain's son-in-law, under investigation over allegations that his sports charity was used to embezzle public funds, has stepped down from a lucrative U.S. post at telecoms giant Telefonica to distance the company from the scandal.

Brazil judges uphold Chevron, Transocean operating ban

Brazil judges uphold Chevron, Transocean operating ban: RIO DE JANEIRO (Reuters) - An injunction banning No. 2 U.S. oil company Chevron Corp and its drilling contractor Transocean Ltd from operating in Brazil was upheld by a panel of three Brazilian federal judges on Tuesday while charges over a November oil spill are being considered.

Robots 'repair' Scotland's corals

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Desmond Tutu boicota conferência com Tony Blair

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An ECB Member Gave A Speech In German That Laid Out The Plan To Save Europe

An ECB Member Gave A Speech In German That Laid Out The Plan To Save Europe:

What will happen next in Europe? We just asked that question to analyst Lorcan Roche Kelly of Trend Macrolytics.
His answer: Check out the latest speech from ECB executive board member Jörg Asmussen, who hails from Germany.
The speech is in German, but Google Translate does a good job with it, and indeed it spells out the latest path forward.
There are really three parts:
The first is the reminder that the ECB has a mandate to preserve stability and to not bail out states.
The second part is an explanation of how the ECB can stay within its mandate, while also doing something to alleviate the current crisis.
According to Asmussen, disruptions in the sovereign debt market are hampering the transmission of monetary policy and warrant action.
Says Amussen:

...the ECB has announced the beginning of August, a new bond purchase program, which will ensure better transmission. Compared to the old bond purchase program SMP will include the following improvements:

• The ECB will only act in parallel with the EFSF and the ESM later. For this purpose, a State must submit an alternative claim and extensive economic support fulfillment. Hinaussollte In my opinion, the EFSF and the ESM at the request of the country concerned to intervene in the primary market before the ECB intervenes. Such a request is only the necessary condition for action by the ECB. The Governing Council will continue shall act independently of whether, when and how the ECB's bond purchases on the secondary market. With this method, to ensure that the affected country also implements all necessary and agreed reform measures. The error with Italy in the summer of last year, as the ECB has bought Italian government bonds and the time was unfortunately not used for necessary adaptation measures may not be repeated.
• In addition, the new program will be set up so that the problem of the perception of a preferred creditor status of the ECB will be addressed. Because this perception complicates the countries concerned to return to the capital market, because their status as private investors feel insecure and turn away from the country concerned.
• Finally, the ECB will buy under the new program, only bonds with short maturities. The control of short-term Geldmärkt is the classic job of monetary policy. In addition, the distortions in the short end of the yield curve in times of crisis are particularly strong.

The technical and operational details of the program are currently being developed. The Governing Council will deal extensively with all these aspects of the program at its meeting in a few days. The whole discussion is led by the proviso that any concerns of a non-conforming state funding be withdrawn. We will act only within our mandate.

Because let me emphasize this: the central bank can and can not pay for the mistakes of the fiscal and financial market policies. Governments through a resolute reforms restore its credibility. The former president of the Bundesbank, Karl Otto Pohl summed up the task briefly and concisely: "It is not natural, that we can live on an island of stability. That has to be earned through a consistent policy of stability. "

So this scheme to depress short interest rates is happening, but the technical details haven't been worked out yet (which explains why Mario Draghi had to cancel his plan to speak at Jackson Hole this Saturday. It's clear we'll get something at the September 6 meeting.
And though Asmussen makes a point to say that depressing short interest rates is not the same as financing governments, it's also true that short-term borrowing does the 'heavy lifting' for European sovereign borrowing needs, so this is a de facto form of central bank debt monetization.
Finally, Asmussen lays out the real long game, which involves financial, fiscal, economic, and political union. The EMU is not complete yet, and has serious flaws, but there is a path involving work on all these areas.
A key point that Asmussen makes, which is very in keeping with the German stance, is that he's more concern with the quality of reforms than the speed. This may be frustrating to investors, or politicians on electoral timetables, but if the Euro is going to last lifetimes, decisions can't be made in a rush to respond to market reactions.
And of course, just talking about all this doesn't mean it will work. There's still the problem of Spain (or Italy or anyone else) requesting the help necessary to trigger the bond buying. And the ECB has to buy with commitment. And a Greece exit if it happens could ruin confidence in the whole thing. But at least the roadmap has been spelled out (by a German no less!).
Read the whole Google Translate version of the speech below
---------------

Speech by Jörg Asmussen, a member of the Executive Board,
Parliamentary Evening of the Bundesbank headquarters in Hamburg, Mecklenburg-Vorpommern and Schleswig-Holstein,
Free and Hanseatic City of Hamburg, 27 August 2012

Dear Madam President,
Dear Senator Tschentscher,
Ladies and Gentlemen,
"Helps even more Europe?" Headlined Time in its edition of 21 June. That was the exact day a week before the heads of state and head of government of the EU took a first step toward financial union. They ordered also the President of the European Council, Herman van Rompuy - and I quote the summit conclusions literally - "in close cooperation with the President of the Commission, the President of the Euro Group and the President of the ECB, a specific timetable with deadlines for achieving real economic and monetary union work out. "
At first glance it seems that the question of time has already been answered 7 days later. But it is not so simple. If "more Europe," the response to the crisis, then that automatically raises new questions: for example, how new integration steps should be constructed politically and institutionally. The debate on this has just begun. And the discussion in this country about possible referendums show that there must be a broad debate. Many thanks to the colleagues of the Bundesbank for the opportunity to discuss this important issue with you here. On three main areas I want to focus on:

• First, the current situation on the financial markets and the state of the economy in the euro zone in general, and in selected countries;
• Second, the monetary policy of the ECB;
• Third, the steps necessary to develop the monetary union, with a special focus on financial Union and the future role of the ECB in a common banking supervision.

First Economic situation

1.1. The situation in financial markets

The situation in the financial markets in the euro area has deteriorated since the middle of last year again. The risk premiums demanded by investors in government bonds reflect since been proved not only the risk of insolvency of individual states, but also an exchange rate risk, which it theoretically should not exist in the monetary union. That is, the markets pricing in a breakup of the euro area. Such doubts are systemic dramatically - and not for the European Central Bank acceptable. Only one currency, to their constituents, there is no doubt, is a stable currency.
No less disturbing is the increasing fragmentation of the European financial market. While in the early years of monetary union, financial markets of the Member States together grew more and more, have been in the wake of the crisis - metaphorically speaking - the barriers rebuilt. For example, the share of cross-border loans in the money markets between mid-2011 and plummeted from 60 percent to 40 percent. In several countries, foreign bank deposits have reached their lowest level since early 2008. Banks are increasingly using domestic security in access to ECB facilities.
This has serious consequences for the common monetary policy: a monetary policy signal, as we have set, for example, with the rate cut in July comes, inconsistent or in some cases not at all to the real economy. The fed funds rate, the "lead" is actually supposed to do, this is only limited.

1.2. The general economic situation

The outlook for the euro area point to a weak economic development in the coming months. The IMF predicts a slightly negative growth (-0.3%) for this year, and a moderate recovery of 0.7% for the next. Accompanying a moderate inflation, a weakening of the high rate of inflation this year, and an inflation rate in the coming year is less than 2%. The key for our policy inflation expectations are firmly anchored. The just mentioned tensions in financial markets - including various disaster scenarios - have a negative impact on morale and confidence in the economy.
In this total, some might not exactly rosy outlook an observer, and perhaps one or two of you who may feel the euro as a currency is in crisis. And that monetary union has strayed from the fundamental price.
The euro itself is not in a crisis: We are currently experiencing a sequence of different crises in Europe: Some countries have to deal with the national debt, is in others it primarily a crisis in the banking sector and in some is more the private sector debt, the most pressing problem . In some states, the most serious problem the year-long loss of competitiveness and, in some occur simultaneously on the aforementioned causes, such as in Ireland, where we are experiencing a banking crisis at a high personal debt. Overall, it is now a major crisis of confidence has become. This is why we try - together in Europe - to tackle this crisis. Adjustment programs, bailouts, deeper integration, ECB's Special Measures. The list of important strategic position, taken within the past two years is long. Certainly not always the process was effectively and quickly. But whenever decisions were needed, they were also taken.
The bottom line is there is a fear that more new bailouts are just waste of money, that the problem countries are manifestly incapable of reform or reform reluctantly. I'm always amazed at how lightly spoken about other inhabitants of the common European home. Here is the game with national stereotypes of the complexity of the situation is not just.
The facts say otherwise. Even in Greece - probably the most difficult case - there has been progress. Despite a weak economic development, the primary deficit of -10.4 per cent of GDP in 2009 to -2.2 percent in 2011 to be reduced. Painful adjustment processes, such as wages and salaries, were begun.
These findings should not, however, mask the reform process in India has come because of the elections in the spring to a halt and that what has been achieved so far, is far from sufficient. It is also clear that any delays in reforms, every aspect of the adaptation period, costs money. Money that can be saved either elsewhere, or will be provided by the partners must be available.
However, the public perception of the adjustment programs in general is dominated by the very slow progress in Greece. Take the example of Ireland: In early July, the country the first time three-month government bonds worth 500 million euros and an interest rate of 1.8 percent in the market place. For Portugal, the yield on government bonds is the end of August at levels, as it was achieved before jumping in the bailout package for the last time. ^{[ 1 ]} These are the first tentative steps on the road back to normality. In relation to the core objectives of the adjustment programs - the reduction of government deficits and to restore access to the market - that initial success can be reported.
In the short-termism of the financial markets is always forgotten that profound structural changes require a lot of patience. We know also from the German experience, either. With reunification or the conversion of the labor market These days the media are full of "10 years Hartz laws." Their positive effects we feel really only recently. The "overhaul" of the economies of the countries in crisis or breakdown of internal and external economic imbalances - that no matter of two or three years. Patience and perseverance are also required.
Results when the analysis is more inclusive, and not just the problem countries are considered, for the euro area as a whole a much more nuanced reviewed in terms of fiscal policy key figures of other major economies, is the euro area as relatively good. The fiscal deficits in the euro countries, taken together, make about 4% of gross domestic product. That is much less than in the U.S. or Japan, where budget deficits are at 9 ½%, or 10% of GDP even higher than that of Greece (9.1%). Even with the sovereign debt in the euro area is around 87% of GDP in the U.S. (around 103%). And Japan's debt surpasses almost 230% of GDP even significantly by Greece (165%). ^{[ 2 ]} By this I do not gloss over the situation in the euro zone, but it must also be seen in an international context. The problems in the euro area are concentrating on individual countries, and must be solved primarily by those countries.
Nevertheless, market uncertainty and a feeling of disorientation among the citizens. Some wonder whether the economic and monetary union has a fundamental design flaw. This is first of all to the complexity of the issue itself. Columns of newspaper publishers and online bloggers, open letters from professors, in their own interest-based analysis of market participants in Germany and around the world: there is no shortage of studies, reviews, scenarios of seemingly inevitable disasters, and suggestions on what "politics", or more simply yet, "the Central Bank" but please do, or have to leave. This brings me to the second part of my remarks - the role of the ECB.

Second Role of the ECB

Europe has a very successful monetary order. The German Bundesbank was to model. The four key pillars to achieve:

• First, price stability as the primary objective of monetary policy;
• Second, the independence of the ECB and the national central banks
• Third, the ban on state funding through the Federal Reserve
• Fourth, the prohibition on the assumption of liabilities of other Member States (the so-called 'bail-out' clause)

I am aware that some people ask, quietly or publicly, whether for these pillars are still standing. These concerns we must take seriously and respond to them. Let me do so now.
First of all, the ECB remains committed to price stability, no ifs or buts. The facts speak for themselves for the first 13 years of the monetary union, the euro area average inflation stood at 2 percent, Germany at 1.6 percent. This good result is not obvious, because the challenges for monetary policy - the bursting of the dotcom bubble, the 11th September 2001, the sharp fluctuations in oil prices and the current crisis - were and are significant.
We must recognize that some of the standard tools of monetary policy in these turbulent waters no longer apply. The uniform transmission of monetary policy of the Eurosystem is increasingly hindered - with obvious consequences for the real economy. In program countries since the end of 2010 interest rates rise for corporate loans, although the interest of the central bank facilities have remained low.
Than the standard tools were no longer sufficient, they were accompanied by specific measures. For example, the long-term refinancing operations of up to 3 years duration. For this purpose we had in the fall of 2011 decided in a critical situation, to avert a panic situation in the financial markets and a credit crunch. Both would have incalculable consequences for the real economy, and thus for growth and jobs.
In both 3-year operations granted to banks secured loans totaling around 1,000 billion euros. The net cash flow amounted to only half. The participating banks were not only large banks, but also many smaller institutions, such as community banks and savings banks. Exactly those institutions loans primarily awarded to SMEs, which form the backbone of the economy in the euro area. So it was about ensuring that banks are able, their primary function - to lend to firms and households - can meet. And thus able to pass on the central bank's monetary policy impulse.
The uniform transmission of monetary policy of the ECB is still hampered by the severe disruption in the government bond market. Particularly speculation about a single outlet crisis states - coupled with a devaluation - impair the functioning of the interbank market massively.
Therefore, the ECB has announced the beginning of August, a new bond purchase program, which will ensure better transmission. Compared to the old bond purchase program SMP will include the following improvements:

• The ECB will only act in parallel with the EFSF and the ESM later. For this purpose, a State must submit an alternative claim and extensive economic support fulfillment. Hinaussollte In my opinion, the EFSF and the ESM at the request of the country concerned to intervene in the primary market before the ECB intervenes. Such a request is only the necessary condition for action by the ECB. The Governing Council will continue shall act independently of whether, when and how the ECB's bond purchases on the secondary market. With this method, to ensure that the affected country also implements all necessary and agreed reform measures. The error with Italy in the summer of last year, as the ECB has bought Italian government bonds and the time was unfortunately not used for necessary adaptation measures may not be repeated.
• In addition, the new program will be set up so that the problem of the perception of a preferred creditor status of the ECB will be addressed. Because this perception complicates the countries concerned to return to the capital market, because their status as private investors feel insecure and turn away from the country concerned.
• Finally, the ECB will buy under the new program, only bonds with short maturities. The control of short-term Geldmärkt is the classic job of monetary policy. In addition, the distortions in the short end of the yield curve in times of crisis are particularly strong.

The technical and operational details of the program are currently being developed. The Governing Council will deal extensively with all these aspects of the program at its meeting in a few days. The whole discussion is led by the proviso that any concerns of a non-conforming state funding withdrawn. We will act only within our mandate.
Because let me emphasize this: the central bank can and can not pay for the mistakes of the fiscal and financial market policies. Governments through a resolute reforms restore its credibility. The former president of the Bundesbank, Karl Otto Pohl summed up the task briefly and concisely: "It is not natural, that we can live on an island of stability. That has to be earned through a consistent policy of stability. "

Third The evolution of the monetary union

Ladies and gentlemen,
The crisis has shown that a true "culture of stability" in the framework of the monetary union has not yet sufficiently anchored. The original architecture was incomplete. A working stability policy is not just from the monetary policy, but also needs the fiscal policy, economic policy, and above all a clear democratic mandate.
Europe is now at a crossroads. Either we complete the integration of the euro area, by also fiscal policy, economic policy and democratic control, sharing sovereignty in Europe. Or we choose the other way, a decentralized Europe. This then also the dismantling of the monetary union, and probably also of significant parts of the internal market.
Both ways are possible and ultimately lead to a stable equilibrium, as we call economists. The balance of disintegration, however at a lower level of prosperity. For this reason I believe we should not turn back the clock. Rather, we should complete the Economic and Monetary Union.
The decisions of the European Council of the end of June they represent an caesura, as the leaders of the EU have the President of the European Council, Commission, euro group and the ECB issued a mandate to make proposals for the completion of economic and monetary union. The four presidents will submit to the European Council in October, an interim report. This will propose measures in the short term - can be implemented - and especially without the EU Treaty change. In December, the European Council expects a final report. This will include proposals, such as the euro area might look like in ten years, and what changes in the European treaties would be required to do so.
Before I get to talk to potential content blocks, two constraints:

• First, the deepening of economic and monetary union is primarily a matter of the 17 euro countries. These 17 states have chosen the single currency to a deeper integration, which now needs to be consolidated. At the same time it must not be forgotten that 8 of the 10 non-euro countries have committed to joining the EU to adopt the single currency in the foreseeable future and to meet the convergence criteria as well. Therefore, they must be in the upcoming process of change EMU also closely involved.
• Second, quality counts and not the speed of change. The euro countries should take the time that is needed to create a sophisticated product. But it is important that we create a vision as early as possible, an endpoint such as the euro zone will look like in 10 years. This builds trust between the citizens and the financial markets. Positive expectations for tomorrow in turn affect calming effect on the present.

Now to the content itself: The June report of the four presidents has already outlined four building blocks for the upcoming reforms. They provide a good basis for discussion represent the four elements are:

1. A financial Union
2. A fiscal union
3. A genuine economic union
4. A political union

These four blocks go together and are interdependent.

First Financial Union

First Union on financial market. Due to the acute situation in some Member States there is priority action here. The strong financial entanglement between the banking sector and public finances in some Member States has resulted in a weak economic environment to a downward spiral. As soon as the budget situation worsens a state does that on government bonds in banks' balance sheets. The banks have problems refinance themselves adequately. Device a large, systemically important bank to falter, the government has to step in again. And thus the downward spiral continues.
This spiral must be broken as soon as possible. The longer we wait the more expensive it will end. For this, the architecture of financial supervision in the euro area be re-examined. At the end of this process, the new architecture should have the following features:

• First, a European Banking Supervisors, which has adequate policies and penetration skills to provide a uniform implementation of European regulation safely. These banking supervision must also be able to close non-viable institutions.
• Second, a fund financed by the financial services industry, which stands in an emergency to handle systemic banks available without that national budgets and taxpayers will be charged. This exercise must be a single European rulebook for handling systemically important banks.
• Thirdly, the deposit guarantee will be organized at European level. Could serve as an example here, the U.S. Federal Deposit Insurance Corporation (FDIC). The lack of a deposit insurance system has exacerbated the crisis in some euro area countries also. Doubts about the safety of the deposits could attract strong capital flows by itself. The euro has facilitated the transfer of deposits within the euro area even as then no exchange rate risk arises.

All three elements are interdependent, with the first step, the efficiency of the European banking supervision must be ensured. Banking supervision can only act effectively and useful if they also have complete information as to the deposit insurance has and they can also only show teeth when they can order such as the settlement of an institution.
The Commission on 11 September to present their proposals to move the transfer of supervisory tasks to the European Central Bank (based on Article 127 (6) of the Treaty on the Functioning of the European Union).
The ECB, together with the national central banks willing to take on responsibility in this regard, but only under certain conditions:

• First, the primary mandate of price stability will remain untouched. Therefore, the monetary policy of the bank supervision outward and inward organizational and personnel are also strictly separated. Some feel that a central bank should always stay out of institutional supervision. But the fact is that today 14 of the 17 national central banks of the euro area have supervisory responsibilities. This rich knowledge must be part of the European supervision. Because it is clear that many supervisory tasks can only be performed tomorrow on site.
• Second, the ECB will ensure that their independence in monetary policy can hamper in any way. At the same time it is clear that functions of banking supervision must be under a parliamentary and judicial control, for banking supervision is sovereign act by which can intervene in fundamental rights of the persons concerned. We stand to greater parliamentary scrutiny of European Banking Supervision at the ECB with an open mind.
• Third, the law must provide the ECB with all the instruments that are necessary to perform the tasks of a bank supervision effectively. This means in particular access to all necessary information, intervention and, as mentioned, the right not to close viable banks. Without this minimum configuration, the ECB is not responsible, the risk to the reputation of the institution would be too great.

Until the implementation of the Commission's proposals must include these aspects that are especially close to heart, yet another important design issues to be addressed, such as the exact split between the ECB and other European regulators.
The leaders of the euro area to see the creation of a single banking supervision for the euro area as a prerequisite for direct recapitalization of the banks by the European Stability Mechanism (ESM). This linkage between the funds and control is essential. Responsibilities for solidity and solidarity are inseparable and should be exercised at European level.
The coming months will be of great importance in this respect, and it will be a key concern for the ECB to provide an incentive compatible regulatory structure.

Second Fiscal union

This brings me to the second block, the fiscal union. The aim of the fiscal union is to prevent domestic policy failures in individual Member States stress the other Member States or the monetary union as a whole. With the reform of the Stability and Growth Pact and the so-called fiscal pact an elaborate set of rules with different limits for national fiscal policy was developed. There is also an application of the excessive deficit or debt. However, it is still unclear how to deal with the euro area Member States that do not comply with the requirements of the regulations. Figuratively speaking: The house rules in the European house is. But what to do if in an apartment still violate the house rules and the halfway house is under water? So far, we are then faced with a more or less closed doors.
In an emergency that threatens the fabric of the whole House, the international community must intervene. There are several considerations. In a first step could be to issue public debt securities are subordinated beyond the agreed limits of a European licensing. In particularly serious cases, "Brussels" may, subject to strict criteria impose an output stop.
These interventions involve a strong engagement in national sovereignty. Therefore need to be democratically legitimized. Furthermore, all interventions are designed so that the principle of national ownership is not undermined.

Third Economic Union

The third component - the true economic union - is aimed towards further integration of the European market. For monetary union for better integration is particularly urgent. Because since 1999, the competitiveness of the euro countries have developed very differently. In consequence incurred serious imbalances in trade and capital flows.
To prevent such undesirable development, there is now the so-called "process by macroeconomic imbalances". I also feel better coordination of national tax systems is particularly important. To do business in other Member States must be fiscally simpler. The Commission's proposals for a common consolidated tax base for the corporate round are a step in the right direction. Furthermore, Member States could benefit if it employees would still be easier to find a job in another EU country. But the mobility of workers has other important aspects that need to be rules to get here to improvements. For example, must also pension and retirement claims are becoming more mobile. When a change of job in another European country should also be a transfer of claims to another social security system should be possible.

4th Political Union

So I have arrived at the fourth block: the political union. The debate about the political union is as old as the monetary union, or even older. But what exactly does the term "political union"? For me it is a fundamental principle that where the European level to create new skills, to take place also in an appropriate decision-making and a full democratic control. We need therefore institutions, the legal and technical competence have to perform these functions of decision-making and control.
Many wonder how democracy can be strengthened at the European level. The only answer is the full involvement of the European Parliament in the legislative, personnel order and control? What role remains for national parliaments? Is the involvement of the European Parliament in the euro-zone format imaginable? These are complex issues that need to be discussed in the coming months and years. The important, deep integration steps that are before us, without the serious discussion by all of us, the citizens of Europe. Here, too, and right now in Hamburg. Sure am glad.
Thank you for your attention.

Commodity Prices Could Get Halved In The Next Two Years

Commodity Prices Could Get Halved In The Next Two Years:

For the past two years, as regular readers know, I have been bearish on hard commodities. Prices may have dropped substantially from their peaks during this time, but I don’t think the bear market is over. I think we still have a very long way to go.
There are four reasons why I expect prices to drop a lot more. First, during the last decade commodity producers were caught by surprise by the surge in demand. Their belated response was to ramp up production dramatically, but since there is a long lead-time between intention and supply, for the next several years we will continue to experience rapid growth in supply. As an aside, in my many talks to different groups of investors and boards of directors it has been my impression that commodity producers have been the slowest at understanding the full implications of a Chinese rebalancing, and I would suggest that in many cases they still have not caught on.
Second, almost all the increase in demand in the past twenty years, which in practice occurred mostly in the past decade, can be explained as the consequence of the incredibly unbalanced growth process in China. But as even the most exuberant of China bulls now recognize, China’s economic growth is slowing and I expect it to decline a lot more in the next few years.
Third, and more importantly, as China’s economy rebalances towards a much more sustainable form of growth, this will automatically make Chinese growth much less commodity intensive. It doesn’t matter whether you agree or disagree with my expectations of further economic slowing. Even if China is miraculously able to regain growth rates of 10-11% annually, a rebalancing economy will demand much less in the way of hard commodities.

And fourth, surging Chinese hard commodity purchases in the past few years supplied not just growing domestic needs but also rapidly growing inventory. The result is that inventory levels in China are much too high to support what growth in demand there will be over the next few years, and I expect Chinese in some cases to be net sellers, not net buyers, of a number of commodities.
This combination of factors – rising supply, dropping demand, and lots of inventory to work off – all but guarantee that the prices of hard commodities will collapse.  I expect that certain commodities, like copper, will drop by 50% or more in the next two to three years.
Not everyone agrees.  In the July 2 issue of this newsletter I made a reference to a book by Dambisa Moyo, a former investment banker turned economic writer, called Winner Take All, in which the author argues that the world is facing a crisis in the form of a commodity shortage.  According to a recent review in the Guardian,
If Moyo’s calculations are correct, we are in big trouble – which makes the central premise of her book, Winner Takes All, all the more arresting. Governments across the world, she writes, have singularly failed to grasp what’s coming – with one sensational exception. “Simply put, the Chinese are on a global shopping spree.” State-sponsored Chinese corporations are busy buying up commodities across Africa, North America, the Middle East, South America – anywhere they can – in a concerted strategy to seize control of resources before the rest of the world wakes up to the looming crisis.
They’re striking deals with what she calls the “axis of the unloved” – developing countries rich in commodities but poor in political and economic capital – in return for much needed investment, employment and infrastructure. Extravagant shoppers, the Chinese are happy to pay over the odds, treating their trading partners not as poverty-ridden charity cases nor political pariahs but valued commercial equals.
But when the resources begin to run dry, the consequences will be catastrophic. Already, since 1990 at least 18 violent conflicts worldwide have been triggered by competition for resources. If nothing is done now, warns Moyo, commodity wars on a terrifying scale are all but inevitable.
As I have written before, whatever you might think about the argument that commodity prices are headed up, stockpiling commodities and buying commodity-production facilities abroad is nonetheless a poor liability management strategy for China. Chinese growth and global commodity prices are driven by the same set of factors – high commodity prices are the result primarily of high levels of Chinese investment, which have also been the source of high Chinese growth – and when China stockpiles commodities it automatically exacerbates volatility in an already-very-volatile economy.
When China is doing well and growing quickly, commodity prices are likely to rise on surging Chinese demand, and so the value of long commodity positions will rise.  This will reinforce an already strong domestic economy by giving Chinese manufacturers relatively “cheap” commodities.  When China slows down, however, commodity prices will tend to drop, forcing losses onto manufacturers and speculators just when the country has less ability to absorb them.

Large-scale Chinese stockpiling, in other words, is highly pro-cyclical, and in my reading of economic history (I discuss this extensively in my book, The Volatility Machine) it is high debt and highly pro-cyclical mechanisms embedded into a developing country’s balance sheet that condemn most developing countries to long-term poverty.  They do better than expected during the boom, of course, thanks to these pro-cyclical mechanisms, but when the inevitable slow-down occurs, the economy necessarily does much worse than expected, and financial distress costs typically soar. These financial distress costs can affect the economy for years after the crisis has resolved itself.
Are rising commodity prices inevitable?
If Moyo is right, however, and the world over the next few decades is characterized by steadily rising commodity prices and geopolitical maneuvering to gain greater access to production, the liability management issues will be viewed by most analysts as irrelevant (it is hard to tell someone who has won the lottery, after all, that buying lottery tickets is a bad investment). It is only if commodity prices are uncertain that the structure of the balance sheet matters – which means that it always matters, but during the global growth periods it often seems not to matter.
On the other hand if commodity prices are expected to drop, China’s stockpiling of commodities is then not only a risky balance sheet strategy, it is also a bad speculative bet, and here is where I differ sharply with Moyo.  Unlike her, I expect the price of hard commodities and certain industry-related soft commodities (like rubber) to drop, not rise, in the next three years, and to stay low for many years thereafter.
I should point out that my argument relates mainly to hard commodities. I am less certain about energy-related commodities, because the dynamics there are complex and include political considerations that are hard to predict, but – especially given the potential energy explosion in the US – if I had to bet I would bet that energy prices, too, will drop sharply in the coming years.
On the other hand agricultural commodities, or more specifically food commodities, may buck the trend. If China is able to rebalance its economy in an orderly way, investment growth will slow sharply, but still-high household income and consumption growth should drop only a little. If we combine this with household income growth in other poor Asian countries, especially in India, I expect demand for food might grow for many years.
Which way can prices go?
For these reasons I am very pessimistic about hard commodity prices and expect them to drop substantially further in the next two to three years.
1. Production capacity for hard commodities is rising much too quickly, in a belated response to the unexpected surge in demand just under a decade ago.
2. Expected economic growth rates in the country that has been biggest source of new demand – virtually the only source – have fallen sharply and commodity prices have fallen with them. Historical precedents and the arithmetic of rebalancing suggest, however, that the current consensus for medium-term Chinese growth is still too optimistic. Expected growth rates will almost certainly fall further in the next two years.
3. Beijing has finally become serious about rebalancing China’s economy, and rebalancing means shifting Chinese growth away from being disproportionately commodity intensive. Instead of representing 30-60% of global demand for most hard commodities, Chinese demand will shift to a more “normal” level. Remember that even a very limited shift – from 50% of global demand, for example, to a still high 40% of global demand – represents a sharp drop in global demand.
4. There has been so much stockpiling of commodities and finished goods with implicit commodity content in China that the country could well become a net seller, and not net a buyer, of a wide variety of commodities in the next few years.
This is going to come as a shock to many people. In my discussions with senior officials in the commodity sectors in Brazil, Australia, Peru, Chile and even Indonesia, it seems to me that many analysts have been insufficiently skeptical about the Chinese growth model and are unaware of how dramatically the consensus has changed in the past two years. They have failed to understand how deep China’s structural problems are and how worried Beijing has become (this worry may be best exemplified by the extraordinary growth in flight capital from China since early 2010).
Under these conditions I don’t see how we can avoid a very nasty two or three years ahead for commodity producers. This isn’t all bad news, of course.  What will be a disaster for hard commodity producers will be great news for companies and countries that are commodity users or importers. One way or the other, however, we are going see a big change in the distribution of winners and losers.

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Methane Making An Appearance In Pa. Water Supplies: Mike and Nancy Leighton's problems began on May 19, just as Mike was settling in to watch the Preakness Stakes. A neighbor in Leroy Township, Pa., called Mike and told him to check the water well located just outside his front door. Typically, there's between 80 to 100 feet of headspace between the top of the well and its water supply. But when Leighton went outside, the water was bubbling over the top.

More Bad News for Young Smokers: Arterial Damage

More Bad News for Young Smokers: Arterial Damage: Teen smokers have thicker artery walls, indicating the early development of atherosclerosis, which is a chronic condition that remains asymptomatic for decades. Advanced atherosclerosis can lead to catastrophic events such as the slowing or stopping of blood flow, which then leads to the death of whatever body tissue that artery is feeding. If that artery is feeding the heart, it will result in myocardial infarction (heart attack), and if it is feeding the brain, the result is a stroke. As an adolescent, catastrophes like these are highly unlikely. But if that individual is a smoker, they may have inadvertently put their arteries on the path that can lead to disaster in the future.

Law Professor Says One Of Romney's Tax-Avoidance Schemes Is Illegal

Law Professor Says One Of Romney's Tax-Avoidance Schemes Is Illegal:

Legal experts continue to crawl through the massive cache of Mitt Romney's Bain fund documents that Gawker published on Thursday.
And one law professor, Victor Fleischer of the University of Colorado, believes he has found a tax-avoidance trick used by the funds that is illegal.
As expected, the Bain funds appear to have employed pretty much every sophisticated tax-dodging scheme in the book, including:

• creating "blocker" corporations that allow the funds to avoid business taxes,
• entering into credit-default swaps that allow the funds to avoid dividend taxes, and, of course,
• taking advantage of the ludicrous "carried interest" tax loophole that allows private-equity and hedge-fund managers to treat their performance fees as capital gains instead of ordinary income and thus pay a tiny fraction of the taxes on them that normal professionals would pay

All of these tricks rely on legal technicalities and sophisticated techniques to avoid taxes.  For practical purposes, none of them are available to average taxpayers, because they require considerable sophistication and expense to set up and maintain. But they're common in the fund-management industry. And, for now, they are considered legal.
One of the tax-avoidance tricks that Romney's funds employ, however, is not legal, according to Fleischer.
This trick involves treating not just "performance-based fees" but management fees as capital gains rather than ordinary income.
Private-equity firms, like other fund management firms, generally charge two kinds of fees on each fund:

• Performance-based fees, which pay the firm ~20% of any gains
• Management fees, which assess an annual ~2% fee on all invested capital

Both of these fees are standard professional fees, so they both should be taxed at ordinary income rates.
In one of the most outrageous loopholes in the tax code, however, the fund-management industry has bamboozled (or simply bribed) Congress into treating "performance-based" fees as capital gains rather than income. So, unlike lawyers, doctors, architects, mechanics, and hundreds of other service professionals, fund managers get the privilege of having their fees accrue tax-free in their funds. And, if they structure the funds well enough, they can avoid ever having to pay ordinary income taxes on their fees. This is likely the primary means by which Mitt Romney has managed to pay such a low tax rate for so long.
But Bain went further than claiming the common "carried interest" treatment on its performance fees, says Fleischer.
In a much more controversial move, Bain also claimed capital gains treatment for its management fees. This allowed the funds (and Romney) to avoid paying ordinary income taxes on all of its fees, not just its performance fees.
How did Bain claim that its management fees were capital gains?
By "waiving" its management fees in some years in exchange for receiving a priority payment of "profit" in future years.
In other words, instead of taking a $20,000 cash payment for each $1 million under management in a particular year, Bain opted to take the $20,000 payment in a later year, as the first portion of any profit distributed from one of the fund's investments.
The theoretical basis for this tax treatment is presumably the same as the one used to justify the regular "carried interest" exemption, which is that by keeping its fees in the funds, the Bain partners are subjecting them to some risk: If the particular investment ends up losing money, the partners won't get paid.
For two reasons, though, this justification is weak.
First, for normal Americans, investment capital is eligible for capital-gains treatment only after it has been assessed with ordinary income taxes. A doctor who makes $1 million for rendering medical services would pay his ~35% tax rate, and then whatever he has left over would be available as investment capital. If the doctor put this capital at risk, he would then be entitled to capital-gains treatment. Thanks to the "carried interest" loophole, however, fund managers can put the whole $1 million of fees at risk simply by keeping it in their funds. Thus, they can let all of their fee-income compound tax free and never pay ordinary income taxes on it. Over decades, this generates vast wealth above and beyond what they would have earned if they had had to pay ordinary income taxes before they invested like everyone else.
Second, as Fleischer explains, Bain had extraordinary flexibility in choosing which investments to take its guaranteed share of "future profits" out of, in addition to when.
Basically, all Bain had to do to ensure that it would get its management fees was to choose one investment in each fund that would appreciate in value at some point in the future.  And given that Bain also had lots of control over the "carrying values" of these investments, it had superior knowledge of which investments would be the most likely to gain value. Thus, Fleischer argues, although there might have technically been some modest risk that Bain would never get paid its fees, this risk was extremely low.
Fleischer says this trick, treating management fees as capital gains, is "not legal." He also believes it would not stand up in court.
To be fair, it appears that, legally, this particular tax-avoidance scheme is still in the "not yet settled" phase as opposed to the "established law" phase. At some point, if the IRS concludes that the capital gains treatment is bogus, it will likely challenge it in court. And Bain and other private-equity firms will defend it. And, years later, a judge or jury will issue a ruling that can be used to set future precedent. Or, alternatively, the IRS and/or Congress could issue a clarification that either explicitly allows this treatment or explicitly disavows it.
But what appears clear is that this aggressive interpretation and use of tax law has likely saved Bain and Mitt Romney millions of dollars in taxes over the years.
Read Fleischer's post here >
SEE ALSO: Many Romney Supporters Appear To Be Delusional About A Key Reason For His 13% Tax Rate

Google again faces Swedish criticism

Google again faces Swedish criticism: Internet giant Google has once again been criticized by the Swedish Data Inspection Board for not deleting personal information it gathered while taking photographs for its Street View feature.The company unintentionally collected information from private wi-fi networks while roaming the streets of Sweden taking the photos. Two years ago Google promised to erase the information, but according to the Data Inspection Board they still have not had any confirmation that this has actually happened.

Past tropical climate change linked to ocean circulation

Past tropical climate change linked to ocean circulation: College Station TX (SPX) Aug 27, 2012



A new record of past temperature change in the tropical Atlantic Ocean's subsurface provides clues as to why the Earth's climate is so sensitive to ocean circulation patterns, according to climate scientists at Texas A and M University.

Geological oceanographer Matthew Schmidt and two of his graduate students teamed up with Ping Chang, a physical oceanographer and climate modeler, to help

Circumcision benefits outweigh risks, say doctors

Circumcision benefits outweigh risks, say doctors:

Influential pediatricians' group falls short of complete support for procedure, saying parents should make final decision
The American Academy of Pediatrics (AAP) has issued guidelines saying the health benefits of infant circumcision outweigh the risks of the surgery, but the influential physicians' group has fallen short of a universal recommendation of the procedure for all infants, saying parents should make the final call.
The change was prompted by scientific evidence that suggests circumcision can reduce the risk of urinary tract infections in infants and cut the risk of penile cancer and sexually transmitted diseases, including HIV and the human papillomavirus, or HPV, which causes cervical and other cancers.
The AAP's guidance, published on Monday in the journal Pediatrics comes down in favour of the procedure, saying the health benefits of newborn male circumcision "justify access to this procedure for families who choose it".
"We're not saying you have to have it," said Dr Andrew Freedman, a pediatric urologist at Cedars-Sinai medical centre in Los Angeles, who chaired the AAP's circumcision taskforce. "We're saying if a family thinks it is in the child's best interests, the benefits are enough to help them do that," he said.
Circumcision, the surgical removal of the foreskin of the penis, is a ritual obligation for infant Jewish boys and is also a common rite among Muslims, who account for the largest share of circumcised men worldwide. Other populations, including wider US society, adopted the practice due to potential health benefits but those advantages have become the subject of debate, including recent efforts to ban circumcision in San Francisco and Germany.
Based on a review of more than 1,000 scientific articles, the taskforce said male circumcision does not appear to adversely affect penile sexual function, sensitivity of the penis or sexual satisfaction.
The AAP said parents should be given unbiased information about the procedure and be allowed to make their own decision.
But the group did say it was imperative that those performing circumcision were adequately trained, used sterile techniques and offered effective pain relief.
Last week, an unnamed doctor in Germany filed charges against a rabbi for performing ritual circumcisions on infant boys, two months after a court in Cologne angered Jews and Muslims by banning the practice.
Rabbi Shmuel Goldin, president of the Rabbinical Council of America, said circumcisions done for religious purposes did not typically involve pain medication but he noted that the procedure was quick and had a long tradition of success.
"We've performed it for centuries with no adverse effects to our children," he said. "For us, it is such a critical component of our religious life that an attempt to eradicate it is an attempt to eradicate our religion. To have this happening in Germany, given our history, is particularly saddening to us."
In the US, the guidelines may begin to turn the tide on infant circumcision, which has begun to fall in recent years as insurers have balked at paying for a procedure without a strong medical justification.
In as many as 18 states the public Medicaid programme has stopped paying for the procedure, a trend some doctors fear could significantly increase US health costs because of a rise in cases of urinary tract and HIV infections.
In a statement issued on Friday in anticipation of the guidelines, the anti-circumcision group Intact America said most of the studies underlying the guidelines were based on research done on adult men in Africa.
"The taskforce has failed to consider the large body of evidence from the developed world that shows no medical benefits for the practice, and has given short shrift, if not dismissed out of hand, the serious ethical problems inherent in doctors removing healthy body parts from children who cannot consent," said Georganne Chapin, the group's executive director.
Dr Douglas Diekema, a pediatric bioethicist from the Seattle Children's Research Institute and the University of Washington who served on the taskforce, said the group considered a wide range of ethical issues, including pain experienced by the child and whether parents have the right to make the decision without the child's consent.
"There is no decision you can make that doesn't potentially put a child at risk. If you choose to circumcise, there is a risk he'll grow up to be a man who wishes he wasn't circumcised," Diekema said.
Waiting until the child was older to make the choice about circumcision would lose much of the early benefits, and because the foreskin was thicker in teenagers the procedure carried more risks, he said.
"I really don't think there is an easy answer … [but] we were unanimously agreed that it's inappropriate to do this procedure without adequate pain control. That, in many ways, is one of the biggest ethical issues."

Taiwan braces for return of Typhoon Tembin

Taiwan braces for return of Typhoon Tembin: Taipei (AFP) Aug 26, 2012



Taiwan warned Sunday that Typhoon Tembin was likely to return as people struggled to clear mud-filled homes after the storm pounded the south of the island with the heaviest rains in more than a century.

The storm appeared to be heading back towards Pingtung county where people were still reeling from the flooding sparked by Tembin when it swept across the southern tip of the island Friday.

Paternal Mutations

Paternal Mutations: Mutation is simply defined as "random changes in genetic material". Without mutations and there would be very little change in species or evolution. Humans inherit more than three times as many mutations from their fathers as from their mothers, and mutation rates increase with the father’s age but not the mother’s, researchers have recently found in the largest study of human genetic mutations to date. The study, based on the DNA of around 85,000 Icelanders, also calculates the rate of human mutation at high resolution, providing estimates of when human ancestors diverged from nonhuman primates. It is one of two papers published this week by the journal Nature Genetics as well as one published at Nature that shed dramatic new light on human evolution.