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An independent view of the world seen from Tokelau

The Independent New York Times

Tokelau, Saturday, November 15, 2008 Weekend Edition, editor - contact sumpinein@gmail.com

US AUTOMAKERS SEEK BAIL OUT TO AVOID BANKRUPTCY
Automakers try to avert disaster, but it is reported by the The New York Times that the prospects of a government rescue for the foundering American automakers dwindled as Democratic Congressional leaders conceded that they would face potentially insurmountable Republican opposition during a lame-duck session next week. At the same time, hope among many Democrats on Capitol Hill for an aggressive economic stimulus measure all but evaporated. Democratic leaders have been calling for a package that would include help for the auto companies as well as new spending on public works projects, an extension of jobless benefits, increased food stamps and aid to states for rising Medicaid expenses. But while Democrats said the stimulus measure would wait until President-elect Barack Obama takes office in January, some industry experts fear that one of the Big Three automakers will collapse before then, with potentially devastating consequences. Despite hardening opposition at the White House and among Republicans on Capitol Hill, the Democrats said they would press ahead with efforts to provide $25 billion in emergency aid for the automakers. But they said the bill would need to be approved first in the Senate, which some Democrats said was highly unlikely.
Conservationists are excited about the arrival, which is the first birth of a pygmy hippo at Taronga zoo in Sydney, Australia, in 23 years.

At the same time
A UN study says that in financial terms currently the loss of forest equals some US$2 to US$5 trillion every year. Who is going to do something about all this? Indonesian authorities have pledged to stop the loss of forests and species in Sumatra, one of the world's most ecologically important islands. Representatives of the island's 10 provinces, national government and the environment group WWF launched the deal at the World Conservation Congress. Sumatra has lost about half of its forest cover in the last 20 years. It is home to a number of important and iconic species such as the tiger, orangutan, rhinoceros and elephant. The island has suffered floods and forest fires in recent years that have been widely attributed to illegal forest clearance. Two years ago, President Susilo Bambang Yudhoyono was forced to apologise to Singapore and Malaysia when smog from burning Sumatran forest covered the neighbouring countries. The need to deal with these issues appears to have played a big part in persuading the authorities to act. "In the rainy months, we are seeing landslides and flooding more often, and it is time to make a real change," said Indonesia's deputy environment minister Hermien Roosita at a news briefing here. "Every governor from the 10 provinces and four (national) ministries have signed this monumental commitment to ecosystem restoration of the island and protecting the remaining natural forest." More than 13% of the island's forests lie on peat, which contain vast amounts of carbon that would be lost to the atmosphere if the trees were removed, accelerating climate change. "When you look at the flora and fauna in this area and the rate of loss that's going on, this is a substantial commitment to protect and restore forests," said Gordon Shepherd, WWF's director of global policy. The government has already regulated to stop clearance of virgin forest for palm oil plantations - grown for food, industry and biofuels - but the government acknowledges the ban may not be completely effective.

Read DEATH OF A FINANCIER by JOHN FRANCIS KINSELLA

Tom Barton, a City mortgage broker, decides to quit his business in the wake of the subprime crisis and arrives in Kovalam, in the south of India. In the Maharaja Palace he finds himself in the company of holiday makers from the UK, Scandinavia and Russia. Stephen Parkly, the CEO of a successful City bank, and his young wife Emma are taking a well earned year end break. Parkly falls gravely ill with a mysterious infection, whilst back in the City, unknown to him his mortgage and investment bank, West Mercian Finance is in grave difficulties. Ryan Kavanagh, a doctor, comes to Emma’s aid with the help of Barton, after an attempted cover-up by the Indian authorities, who fear for their tourist industry and more especially medical tourism, as the disease threatens the resort with the tourist season in full swing. Thousands of British tourists enjoying the sun are unaware of the pending disaster, many are equally unaware their savings about are to be wiped out in the West Mercian collapse.
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GETTING READY FOR A NEW LIFE
Life for the newly chosen president and his family has changed forever. Even the constraints and security of the campaign trail do not compare to the bubble that has enveloped him in the 10 days since his election. Renegade, as the Secret Service calls him, now lives within the strict limits that come with the most powerful office on the planet. He has chosen to spend this interval before his Jan. 20 inauguration at his home in Hyde Park, which has in some ways been transformed into a secure fortress for his protection. After two years of daily speeches and rallies, he has retreated into an almost hermitlike seclusion, largely hidden from public view and spotted only when he drops his two daughters off for school or goes for a workout at the gymnasium in a friend’s apartment building.

BALI BOMBERS EXECUTED

Indonesian security forces are on high alert after the state execution of three Islamic militants for the 2002 Bali bombings that killed 202 people. There were reports of clashes as hundreds of supporters attended burials in the men's home villages in Java. Imam Samudra, Amrozi Nurhasyim and Ali Ghufron (Mukhlas) were killed by firing squad at 0015 (1715 GMT on Saturday). They were found guilty of planning twin attacks on nightclubs at the resort of Kuta, popular with Western tourists. Security forces are on alert across the country amid fears of reprisal attacks. Australia, which lost 88 of its citizens in the attacks, has issued a warning against travel to the country. Britain and the US have done likewise.

DUBAI - NO SEX PLEASE
One of Dubai’s most popular beach hotels has issued guests with an “etiquette guide” after two Britons were convicted for having sex on the beach near the hotel. The etiquette guides, which suggest the hotel’s guests could be arrested for inappropriate public displays, are left on tables during the weekly brunch event at the Madinat Jumeirah hotel. The guests should "employ discretion" in expressing affection publicly, says the hotel, with "anything more than a peck on the cheek" likely to result in police involvement. The two Britons convicted last month of having sexual intercourse outside marriage and offending public decency, were Michelle Palmer and Vince Acors. They were arrested after attending brunch at a hotel near Dubai airport. They were received three-month jail sentences, were fined £200 for drunkenness and ordered to be deported from Dubai on their release. More than 230 other Britons were arrested in the UAE last year. Brunches take place across Dubai every Friday, the first day of the Dubai weekend, and are heavily promoted in Dubai's Time Out and enjoyed to the full by expatriates. The lavish affairs last from late morning into the early evening when diners can enjoy unlimited food and alcohol for a fixed entry fee. In the case of the Madinat Jumeirah the charge is £88, which includes bottomless champagne, cocktails and wine between 12:30pm and 4:30pm. On the subject of drunkenness, the hotel’s etiquette guide warns: “Drinking is not a part of Muslim culture and alcohol is not served openly. Drunken behaviour, especially outside licensed premises in the hotel, is severely punished.” On the subject of public displays off affection it says: “It is strongly recommended that you employ discretion when expressing affection in public. Anything more than a peck on the cheek could offend those around you and even possibly lead to police involvement.” More than one million Britons visited Dubai last year, with twice as many expatriates now living in the Emirate. The Madinah Jumeirah is one of Dubai's biggest and most popular beach hotels, next to the iconic seven-star Burj Al-Arab. More Britons visit than any other nationality - the hotel has 584 rooms in total, split between the Mina A'Salam and Al Qasr brands. A spokeswoman for the hotel told Times Online: "Following the recent media attention surrounding etiquette in the Emirate, we have received additional enquiries from our guests. As a result, we have taken the initiative to produce information cards to inform our guests about local culture and customs here in Dubai. “These cards are distributed throughout and advise our guests about driving around the Emirate, acceptable dress codes, public displays of affection, drinking and other responsible and respectful behaviour.”

NUKE SUB FIRE

20 people died in an incident involving the failure of a fire extinguishing system on a Russian nuclear submarine, local media report. Russian Pacific Fleet spokesman Igor Dygalo said both sailors and shipyard workers died in the incident, which occurred during sea trials. He said the submarine itself had not been damaged and there had been no radiation leaks. Military prosecutors are investigating the incident. The submarine, whose name and class have not been officially revealed, has been ordered to suspend sea trials and return to port in the far eastern Primorskiy territory, Capt Dygalo said. "I declare with full responsibility that the reactor compartment on the nuclear-powered submarine is working normally and the radiation background is normal," he said, quoted by Itar-Tass news agency.

CLOUDS OVER GULF

Is the fun over? Saudi Arabia and Dubai are now down by around 50% this year, Kuwait down 20% and the MSCI index tracking the Gulf's key markets has lost 43%. Last week, Kuwait became the third Gulf state to prop up its banking system, guaranteeing deposits after bailing out the country's fifth-biggest lender, Gulf Bank, whose corporate clients had defaulted on currency bets. The United Arab Emirates, of which Dubai is the second-largest member, has guaranteed local bank accounts for three years and made $33bn available to the banking system amid a squeeze in local money markets. Saudi Arabia has put $5bn into commercial banks and set aside $2.7bn for no-fee loans to low-income citizens. Central banks across the region have also cut benchmark interest rates. The main worry now is the real-estate market, where credit conditions are tightening – HSBC will now only lend up to 70% of the value of a property, down from 85% – and the property boom is rapidly cooling. Cairo-based EFG-Hermes reckons property values could slide by 20% in the next three years. "I see the risk of a real-estate bust throughout the Gulf" amid sliding oil prices and a liquidity and credit crunch, says Nouriel Roubini of New York University. And "there's a huge amount of excess capacity being built": Dubai and Saudi billionaire Prince Alwaleed are currently racing to build the world's first kilometre-tall tower. Dubai can tap another emirate, Abu Dhabi, for cash, while the region as a whole boasts a projected $150bn in budget surpluses for 2008. The IMF thinks most Gulf states should be able to balance their budgets unless oil slides below $30 a barrel, says Andrew Crichlow on WSJ.com. With large current-account surpluses and relatively low external financing needs, the region looks more resilient than other emerging markets, says Merrill Lynch, which has lowered its regional 2009 GDP forecast to 4.5% from 6.2%. But while the Gulf may not fall victim to an emerging-market crisis, the notion that it is a safe haven from global turmoil has been well and truly shattered.

 The map shows hectares' worth consumed in goods and services

The planet is headed for an ecological "credit crunch", according to a report issued by conservation groups. The document contends that our demands on natural resources overreach what the Earth can sustain by almost a third. The Living Planet Report is the work of WWF, the Zoological Society of London and the Global Footprint Network. It says that more than three quarters of the world's population lives in countries where consumption levels are outstripping environmental renewal. This makes them "ecological debtors", meaning that they are drawing - and often overdrawing - on the agricultural land, forests, seas and resources of other countries to sustain them. The report concludes that the reckless consumption of "natural capital" is endangering the world's future prosperity, with clear economic impacts including high costs for food, water and energy. "If our demands on the planet continue to increase at the same rate, by the mid-2030s we would need the equivalent of two planets to maintain our lifestyles," said WWF International director-general James Leape. Dr Dan Barlow, head of policy at the conservation group's Scotland arm, added: "While the media headlines continue to be dominated by the economic turmoil, the world is hurtling further into an ecological credit crunch." The countries with the biggest impact on the planet are the US and China, together accounting for some 40% of the global footprint. The report shows the US and United Arab Emirates have the largest ecological footprint per person, while Malawi and Afghanistan have the smallest. "The events in the last few months have served to show us how it's foolish in the extreme to live beyond our means," said WWF's international president, Chief Emeka Anyaoku. "Devastating though the financial credit crunch has been, it's nothing as compared to the ecological recession that we are facing." He said the more than $2 trillion (£1.2 trillion) lost on stocks and shares was dwarfed by the up to $4.5 trillion worth of resources destroyed forever each year. The report's Living Planet Index, which is an attempt to measure the health of worldwide biodiversity, showed an average decline of about 30% from 1970 to 2005 in 3,309 populations of 1,235 species. An index for the tropics shows an average 51% decline over the same period in 1,333 populations of 585 species.

 

MICEX FALLS 75% SINCE MAY

The Russian President Medvedev continues to scold the world as the MICEX, the Moscow stock exchange,  collapses and Russian oil changes hands for as little as $10 a barrel inside the country suffering from a glut of over production. This is a demonstration of the dangers of too much government intervention. The Russian MICEX market has been the worst performing in the second half of this year so far, reports The Telegraph. Stocks have fallen by 75% since May. A key problem for Russia is that it is massively dependent on oil. Its 2009 budget only balances if oil is trading at an average $95 a barrel. I can't see that happening. So its markets and the rouble have come under pressure with falling oil prices. And of course, as an emerging market, it has taken a hit as investors pull their money out and repatriate it to the 'safe haven' of the US. But the state's attempts to prevent the crisis with brute force, have only made things worse. The central bank has already had to spend $120bn of its reserves on defending the rouble, which analysts reckon is now 30% over-valued. This is just a waste of money. When a country, particularly a politically risky country like Russia, starts defending its currency, it's a sure sign to the market that said currency is over-valued. No central bank in the world has enough reserves to defend against a forex market set on helping a currency to find its "real" worth.

THE STATE OF WORLD ECONOMY RESEMBLES THIS DRIED OUT MUMMY BELIEVED TO BE THE SON OF RAMESES III

UNEMPLOYMENT IN CHINA

POUND STERLING PLUNGES AS BANK OF ENGLAND MAKES GRIME ECONOMIC FORECAST FOR UK

Whilst others enjoyed yachts Champagne and holidays at YOUR expense...

David Cameron was labelled "Three Yachts" after it emerged that he spent a second summer holiday boat hopping in the lap of luxury. At the same time John Prescott rejected claims that he led a lavish lifestyle in Government, insisting he did not enjoy the wining and dining of high office. The Conservatives slammed Mr Prescott for living the “high life”, raking in thousands on food, drink and travel expenses heading the “non-job” Deputy Prime Minister’s Office. Mr Prescott, who has been fronting a BBC series on class, denied he had benefited from the cash and insisted he was only doing the bidding of former Prime Minister Tony Blair.

READING DEATH OF A FINANCIER

THE CREDIT CRUNCH SONG

Since food prices began to rise 100 million more people have been pushed into poverty, according to the World Bank, with as many as two billion on the verge of disaster. Almost half the world's population, let's remember, live on less than $2.50 per day. Millions die annually of hunger and starvation, and more than a billion do not have access to fresh water. With the world financial crisis these numbers are poised to rise dramatically with population growth, dwindling natural resources and higher consumer prices across all goods and services. So as the stock market tumbles and the world economy falters, it's important to remember that it's more than financial losses we are talking about, it's the loss of life.