Wednesday, December 30, 2009

The last 10 years in one word

IMO the word that best describes the last 10 years (decade) is:

uncertainty (in all areas of life).

This decade, uncertainty in all areas of life (economy, jobs, security, securities, health, etc etc) has IMO thrown world systemics off balance resulting inter alia in the current economic crisis and globalization fatigue.

Make Love not CO2?

Philosophical (applied):

Make Love not CO2: I wonder what is the carbon footprint of each (safe) act of intercourse!

My actual point
is that IMO too many people engage in personally and collectively "eco-damaging" activities, many times substitutes of the joy of sex (and the joy of thinking - conversation).

My point re sex is part of a philosophy against materialism and material capitalism and for intellectual and physical satisfaction/joys as opposed to the joys derived by status symbols and other materialist activities and ways of life. Against materialist capitalism and for "intellectual" capitalism (as in production and consumption of intellectual/non-tangible products as opposed to material ones, including many "eco-hostile" culinary pleasures).

And a radical rethink of the pros and cons of the 200 years of the industrial era.

Can the EU lead humankind in sustainability (eco etc)?

Prompted by global warming, humanity must, anyway, revise its ways of life towards simpler, healthier, less materialist, carbon and nuclear free ways of life - lifestyles.

The EU could lead the way in climate change by leaving the WTO + using its internal market to "convince" others to cut CO2 w/o nukes

Humankind's wisdom today


Is humankind today, Dec 29, 2009, wiser than on Jan 1, 2000?

Than Dec 29, 1909?

Towards more sustainable "American way(s) of life"

Philosophy (applied):

IMO, the challenge for the average American is to cut his/her carbon footprint while maintaining the roots of the American "way of life"

But that bring up a very interesting philosophical, sociological etc question:
What are the essential - genuine rather than the superficial elements of the so called American way of life today?

Tuesday, December 29, 2009

Echoes of the constitutional rejection of the French carbon tax

The French Constitutional Council's decision regarding the French carbon tax that was going to enter into force Jan 1 now forces the French government to introduce new carbon tax bill on Jan 20.

The decision is not against a carbon tax. It points out the inconsistencies and selective targeting and rejects the rationale for most exemptions to the tax. Also argued that inequalities re the tax existed in the law. It particularly pointed out, inter alia, that the emissions of 1018 most polluting sites were exempt from the tax (refineries, cement companies, etc), the emissions of air transportation plus those of public passenger transportation.

IMO, the French Constitutional Council's carbon tax decision serve as a reminder to policy - law makers everywhere that policies (no matter what policy area), laws and taxes have to have consistency and "regulatory quality".

Thursday, December 24, 2009

US Senate's version of the healthcare bill (finally) passes

After 24 days (!!) of "debate" and delay tactics by many of it members, the US Senate's version of the healthcare reform bill was adopted by 60 votes (58 Dems and 2 independents) to 39.

Now the Senate's bill and the House's bill must be reconciled, in mid-January. Notably, the House bill does include a public option, unlike the Senate's.
Under the Senate's bill, private insurers are not allowed to refuse to provide insurance because of an applicant's "pre-existing medical conditions" and makes insurance mandatory for almost all Americans, yet without a public option or at extension of Medicare to 55-64 year olds, not even via a pay-in scheme.

Wednesday, December 23, 2009

Echoes of the Copenhagen COP15 - Echo 2: "Nuclear generates 2/3 of EU "carbon free electricity""!!!

Following the "minimalist" (!) "Copenhagen Accord" of which the members of COP15 "took note" of anyway, many commentators have wondered whether the absence of a non legally binding agreement on CO2 emissions, the effects on the price of carbon in the European "markets" for trading schemes, etc, were/are actually going to play in the hand of the nuclear energy option, instead of wind, solar and other alter sources of energy.

Yesterday's (Dec 22, 2009) press communique by the European Commission of the EU is quite telling (pls note the parts I have made bold):

Brussels, 22 December 2009

Green light from the Council for the Commission to negotiate a broad Nuclear Partnership Agreement with Russia.

The Council of the European Union adopted today a mandate authorising the Commission to negotiate a partnership agreement for the peaceful uses of nuclear energy between the European Atomic Energy Community (Euratom) and the Russian Federation. Russia is one of the main global suppliers of nuclear materials and equipment. It is also a key supplier of nuclear fuel and related nuclear fuel cycle services to nuclear power plant operators in the EU.

"This is an important step, which will give a new impetus to EU-Russia relations in the energy sector. It is in the interest of both sides to reach a comprehensive agreement on nuclear cooperation, and I am pleased that these negotiations can now start. Such an agreement creates a stable and predictable legal framework both for the governments and the industrial operators, aims at corresponding levels of safety and security standards, and facilitates legitimate nuclear trade between the Parties ", said Energy Commissioner Andris Piebalgs.

Several EU Member States are operating reactors of Russian design and further reactors are planned. Besides the importance of Russia as a nuclear supplier to the EU, nuclear safety, nuclear liability and non-proliferation are also important aspects of our bilateral relations."

The next part of the communique is even more interesting, IMHO:

"Recent developments, such as the latest EU enlargements and the renewed interest in nuclear energy as a way to reduce CO 2 emissions from energy generation, have made it necessary to negotiate a broad partnership agreement with Russia in the peaceful uses of nuclear energy."

Note the excerpt:
"...the renewed interest in nuclear energy as a way to reduce CO 2 emissions from energy generation..."

Whose is this "renewed interest", I ponder!

The communique's next sentence says:
"...Nuclear energy is an important component of the EU energy mix, generating almost one third of the electricity in the EU and two thirds of EU carbon free electricity. .."

Nuclear energy generates almost 1/3 of the electricity in the EU and 2/3 of "EU carbon free electricity".
Ponder on this rationale again: nuclear generates "carbon free electricity" (2/3 of it in the EU)


"...Many countries both within and outside the EU are currently developing this source of energy. Currently, 146 nuclear power plants are operating in the EU. In Russia, there are 40 nuclear power plants operating or under construction; furthermore, 44 installations are planned up to the year 2030. ...."

No comment!!

And the press communique concludes:

"To date the Community has concluded nuclear co-operation agreements with four major suppliers of nuclear material, the United States, Canada, Australia, and Kazakhstan. Co-operation agreements were also signed with Uzbekistan, Ukraine and Japan (a major EU client). Recently the Community concluded an agreement, limited to research and development, with China. Agreements with Canada and Australia are in a process to be renegotiated."

Oh my!

EU Environment Council agreed on the need for further work on the combined effects of chemicals,

The Commission welcomed the conclusions of today' EU Environment Ministers Council that agreed on the need for further work to be carried out on the combined effects of chemicals, in particular on endocrine disruptors ─ chemicals that interfere with development, reproduction and hormonal functions.

Recent studies in Denmark have highlighted the potential dangers related to the impact of several chemicals acting together.

These studies have shown that children, particularly toddlers, may be exposed to potentially harmful levels of endocrine disrupting substances present in food, food wrappings, toys, articles of clothing and healthcare products.

Commissioner Dimas said that many studies indicated that a combination of chemicals can cause serious effects and that this was a matter that needed to be addressed.

The Commission would look at the issue of 'combined effects' in its fourth report on the implementation of the Community strategy on endocrine disruptors next year, according to Commissioner Dimas.

The Commission will also complete a report on how combined effects of chemicals are dealt with across different pieces of EU legislation and how they could better be addressed.

US vs EU comparisons (Pop and Internal Market)

The EU is 66% bigger (in population) than US, 500 vs 300 million.
Even just rhe Eurozone, 328 million, is 9-10% bigger in population than the US.

Yet crucial difference in the socio-economic systemics and the "power" of the US economy in the world is, IMO, that the US has a well functioning Internal Market, in spite of the efforts of 17 years in the EU for the creation of a single market for capital, goods, services and, yes, jobs.

That is one of the reasons a "deeper" EU is IMO needed in order to raise the collective power of the EU members and citizens in a volatile world.

Read more on this in future posts.

EU population approx 500 million on 1.1.2009

According to Eurostat first 2008 demographic estimate for 2008 (published: Dec. 15, 2009)

EU pop 1.1. 2008: 497,455,000
Natural Change 555,800
Net Immigration 1,662,5000
499,673,300 on 1.1.2009

The corresponding numbers for the Eurozone (16 of the 27 member states of the EU)

1.1.2008 326,921,100
Natural Change 378,200
Net Immigration 1,298,100

(Note for comparisons: The US population is around 300,000,000)

Sales of new US homes down 11.3% in November says US Commerce Dept

According to US Commerce Department stats, sales of new homes in the US were -11.3% in November (seasonally-adjusted annual rate of 355,000 homes, 45,000 down from a revised stat of 400,000 for October).

Note: The +7.4% rise is home sales published yesterday refers to existing-home sales and most of the November sales reported by the Realtors are based on decisions buyers made in September or October (before the government incentives were extended to April 2010).

US consumer spending in November

According to Commerce Department stats, US consumer spending was +0.5% up in November, following a rise of +0.6% in October.

Q3 US growth rate revised downwards again, to 2.2%

Statistics is not by its nature a natural science, it tries to account with socio-economic behavior, at least in the case of Gross Domestic Product and related statistics (some economists, eg Stiglitz, even question the utility of GDP/GNP as a prosperity measure/index). Thus the statistics agencies that collect, calculate and publish GDP and related economic and social data (eg ONS in the UK, Eurostat in the EU, the agencies under the Dept of Commerce in the US, the Economics and Statistics Administration, and specifically the "Bureau of Economic Analysis" etc) usually do it in 3 steps: initial, advance or flash, plus 2 revisions.

It was only yesterday that the UK's ONS published its second revision of Q3 UK GDP. Initially estimated at -0.4% compared to Q2, then it was revised to -0.3% and yesterday to -0.2%, ie upwards.

Today, the Bureau of Economic Analysis published the second revision of the US Q3 GDP compared to Q2. From the initial 3.5%, and after a first revision down to 2.8%, this revision brings the Q3 GDP growth to 2.2%!

The press release states: "Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.2 percent in the third quarter of 2009, (that is, from the second quarter to the third quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 0.7 percent."

It goes on to say that the "GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 2.8 percent (see "Revisions" on page 3)"

Note that Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and are annualized. “Real” estimates are in chained (2005) dollars. Price indexes are chain-type measures.

Real exports of goods and services increased 17.8% in the third quarter, in contrast to a
decrease of 4.1% in the second. Real imports of goods and services increased 21.3%, in contrast to a decrease of 14.7% in Q2.

Gross domestic purchases: Real gross domestic purchases - purchases by U.S. residents of goods and services wherever produced - increased 3.0% in the third quarter, in contrast to a decrease of 2.3% in the second.

Gross national product: Real gross national product -- the goods and services produced by the labor and property supplied by U.S. residents -- increased 3.0% in the third quarter, in contrast to a decrease of 1.0% in the second.
GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $25.7 billion in the third quarter after decreasing $7.4 billion in the second; in
the third quarter, receipts increased $15.7 billion, and payments decreased $10.0 billion.

The "third" estimate of the third-quarter increase in real GDP is 0.6 percentage point, or $17.3 billion, lower than the second estimate issued last month, primarily reflecting downward revisions to nonresidential fixed investment, to private inventory investment, and to personal consumption expenditures.

Advance Estimate to Second Estimate to Third Estimate (Percent change from preceding quarter)

Real GDP....................................................... 3.5 2.8 2.2
Current-dollar GDP..................................... 4.3 3.3 2.6
Gross domestic purchases price index...... 1.6 1.4 1.3

Note that the next release is scheduled for January 29, 2010, at 8:30 A.M. EST for:
Gross Domestic Product: Fourth Quarter 2009 (the "Advance Estimate") and that release dates in 2010 are:

Gross Domestic Product

2009: Q4 and 2009 annual 2010: I 2010: II 2010: III

Advance…… January 29 April 30 July 30 October 29
Second…….. February 26 May 27 August 27 November 23
Third………. March 26 June 25 September 30 December 22

US existing home sales in November

According to the US National Association of Realtors, existing-home sales were +7.4% in November to an annual rate of 6.5 million.

Most of the November sales reported by the Realtors are based on decisions buyers made in September or October, when many buyers were rushing to buy homes in time to qualify for a tax credit that was due to expire November 30 (but was later extended to April 2010.)

That is the highest figure in more than two years.

Tuesday, December 22, 2009

UK house prices to end the year approx. +7% compared to January 2009

In 2008, UK house prices fell 15%. According to the Nationwide Index they reached their low point in February 2009. Yet, due to positive developments, prices have been rising since then, and according to a Daily Mail (Mail Online) article, they are expected to end 2009 around 7% higher than January 2009.

As per 2010 and beyond, the article contains some pessimistic as well as other, less pessimistic, analyses and predictions by market analysts and experts. But, IMO, predictions are ... predictions, so I am not mentioning them or commenting on them.

"On other news" Prince William slept a night in -4C temps near Blackfriars Bridge in the City in homeless person's gear in order to gain even a little, after only 1 night, understanding of the POV of a homeless person as well as raise awareness. He did so after an idea of the chief executive of Centerpoint, a charity that helps the young homeless. The Prince did not sleep in the open alone, of course, for security purposes, he was accompanied by the chief exec of the charity, which celebrates its 40th year, as well as 2 men responsible for is security. IMO this was a worthy project.

On a more philosophical note regarding home ownership, home, mobility, homelessness, etc, read my post from 14 December 2009 "Home ownership - The core of our stability?"

UK Q3 2009 GDP revised upwards

According to the Office of National Statistics (December 22), the Gross Domestic Product for Q3 has been revised upwards to -0.2%.

The previous estimate was -0.3%, whereas the initial estimate had been -0.4%. In spite this improvement, which is due to better than previously measured growth in the construction sector (partly offset by downward revisions to production and services), this means that the UK economy remained in recession in Q3 after all. It has been in recession (negative GDP growth), since Q2 of 2008.

Q3 2009 GDP remains at -5.1% compared to Q3 2008.

According to the ONS, construction output rose by 1.9% over the quarter, revised up from a fall of 1.1% reported in the previous estimate.

Output of the production industries fell by 0.9% compared with a fall of 0.6% in the previous quarter, with output of mining, oil and gas falling by 5.7%. GVA excluding oil and gas extraction was flat over the quarter.

Output in the service industries fell by 0.2% in the third quarter, compared with a fall of 0.8% in Q2.

Household expenditure growth rose 0.1%, although remains 3.3% lower than the third quarter of 2008.

General government final consumption expenditure rose by 0.3% and is now 2.1% higher than the third quarter of 2008.

Gross fixed capital formation rose by 2.2% although it remains 13.3% lower than the third quarter of 2008.

Inventories continued to be reduced, down £4.6 billion on the quarter.

The trade deficit in real terms rose to £7.1 billion in the third quarter of 2009. Exports of goods and services rose 0.8% while imports rose 1.5 per cent.

The GDP expenditure deflator rose by 2.1% compared with the third quarter of 2008, up from 1.1% in the previous quarter.

Compensation of employees at current prices fell by 0.1% and is now 1.0% below the level seen a year ago.

Total gross operating surplus of corporations rose by 2.7% and is now 2.7% lower than a year ago.


How many of the ideologies, theories and axioms (philosophical, economic, political, societal, etc, of past centuries, even the 20th, are still valid in 2009?

Elements of my philosophy

IMO, philosophy is for people what strategy is for companies.

The following are some of the elements of my philosophy, which I sat down and formulated in 2003, after 41 years of living, a degree in decision sciences from MIT, an MBA from Europe's top business school, life in 3 European countries and 3 US states, military service (obligatory) and 14 years of working in various fields, for or in small, medium and large firms, private, state and quasi, etc etc etc.

* A philosopher seeks wisdom and enlightenment; a wise person has achieved them
(reminder: I am a philosopher)

* Life is to be lived

* Life is to be felt and thought, both in good measure, then it is well lived

* I think AND feel, therefore I am (only robots do not feel)

* Do not borrow someone else's goals in life, it is like borrowing a suit or dress, in any case, dress casually, to be happy

* Fame should never be an end, sometimes fame can be a means to an end, sometimes

* Learn the difference between causality and correlation

* Most events in life were not caused by a single factor

* Can future winners (in anything) really be picked based on past performance?

* Rethink and challenge all the concepts and notions of the industrial age

* Utilize the competitive advantage of being human; do not compete with machines and animals

* Having a philosophy in life is more effective than having plans!!!

* We have been programmed to live goal oriented lives! Un-program yourself

* Do not make your happiness depend on what you cannot control

* Survival of the a) cheapest b) fittest c) smartest d) wisest e) laziest f) happiest? (1)

* Dare to be "lazy"

Plus: Simplify, Rationalise, Economise (I did not come up with this one, I saw it in a ... movie)

(1) IMO, the answer is (f). (d) and (e) can contribute to survival too.

More elements of my philosophy in forthcoming posts (and tweets: @npanayotopoulos)

Monday, December 21, 2009

The Trade War Chronicles: USA vs China

"Trade Wars" (a better word is "disputes") are handled mostly via the refereeing of the World Trade Organisation (WTO).

But let's look at the current situation:

USA vs China: 8
(+1 new re alleged "unfair" curbing exports of raw materials such as coke, zinc and magnesium)

China vs USA: 5

Echoes of the Copenhagen COP15 - Echo 1

The following post is rather philosophical and "brainstormish" in kind, but hey, it deals with ... echoes.

Both the UK's PM Gordon Brown, who attended 4 of the 11 days of COP15 in Copenhagen, and Ed Miliband, UK Secretary of State for energy and climate change, have been quite outpoken regarding the results of the Conference that brought together delegates from 193 UN member countries (including some 120 country leaders).

In an opinion article in the, Sunday 20 December 2009 20.30 GMT, Ed Miliband, UK Secretary of State for energy and climate change, attributes the failure of COP15 to agree a) on 50% reductions in global emissions by 2050 or b) on 80% reductions by developed countries on vetos by China. He acknowledges what he considers the achievements of the Conference and argues that "... we should also mobilise all the countries that want a legal treaty to campaign for it".

Now, he adds that there is a wider question, too: ".. about the structures and nature of the negotiations."

And he asserts,, echoing the views of his PM, said to be expressed in a video at the 10 Downing Street's site tomorrow, that: "We cannot again allow negotiations on real points of substance to be hijacked in this way. We will need to have major reform of the UN body overseeing the negotiations and of the way the negotiations are conducted."

Now here are my comments:

1) Whereas I "hear" Mr. Miliband's point re COP15 blockers, IMO there are alas inevitable comparisons with those who block a deeper EU.

2) I am not sure what structure or choice of structures Mr. Miliband has in mind. It has come to my attention that some are speaking of a separate body, to the UN, that deals speficially with Climate Change issues, independent of the UN. I am thus tempted to be reminded of the World Trade Organisation (153 members) and the alleged by many inability of the Plenary meetings in the Ministerial Conferences of WTO on Doha or the periodical meeetings of permanent delegates or experts or national delegates in specific committees in Geneva to make the WTO "work" towards a result on Doha.

Towards a Global Government:

Many conspiracy theorists argue that Global Warming is used as an excuse to set up the body and instruments (eg the aid to be given to less developed and developig countries to adapt to a reduction in CO2 emissions) that will lead to, in effect, a Global Government (or governance).

Well, I do not know whether such "conspiracy" exists or not, but IMO, the time is coming if not having come already, for a World Democratic Body (eg in the form of a World Parliament of elected members, plus a Senate (a la USA) or Council (a la EU) and a President (a la USA or a la EU) and cabinet (maybe a la European Commission) to be responsible not binding instruments for one specific area where global (Global Warming) or near global (world trade) but in all those where "subsidiarity" dictates that solutions/laws/agreements are best not at the national or regional (eg EU, African Union, Mercosur, etc) level, but the World level.

IMO these areas are many, they have become many due to the developments around the world in recent decades (developments of various kinds, political, technological, cultural, economic, social, general systemic, etc) and the existing systemics.

Many, very many, will disagree, speak of national sovereignty, national interests, some may even say that this should be needed in the future but not now. Well, IMO a world government will be needed at some point or another. Either now, to deal with avoiding the effects of global warming and creating a level playing field for businesses (especially small ones) and people around the world, or later, but in order to deal with the crisis and the effects on the global warming or other problems of global dimension.

Some may be even tempted to argue that the next Mayflower(s) will not be ships but spaceships, taking people to a New World outside this planet. But more on such futurist (?) considerations in Echo 2 or 3.

Echo 1, Version 1: December 21, 23:30 pm CET

About aphorisms

Philosophically speaking, how many aphorisms are in line with a comprehensive philosophy on life?

How many are generally applicable (for all seasons)?

Outcomes, IMO, are usually a result of the interplay of many causal factors (like a multi-variable function).

Sunday, December 20, 2009

The text of the "Copenhagen Accord"

Draft decision -/CP.15

Proposal by the President

Copenhagen Accord

The Heads of State, Heads of Government, Ministers, and other heads of delegation present at the United Nations Climate Change Conference 2009 in Copenhagen,
In pursuit of the ultimate objective of the Convention as stated in its Article 2,
Being guided by the principles and provisions of the Convention,
Noting the results of work done by the two Ad hoc Working Groups,
Endorsing decision x/CP.15 on the Ad hoc Working Group on Long-term Cooperative Action
and decision x/CMP.5 that requests the Ad hoc Working Group on Further Commitments of Annex I Parties under the Kyoto Protocol to continue its work,
Have agreed on this Copenhagen Accord which is operational immediately.

1. We underline that climate change is one of the greatest challenges of our time. We
emphasise our strong political will to urgently combat climate change in accordance with the principle of common but differentiated responsibilities and respective capabilities. To achieve the ultimate objective of the Convention to stabilize greenhouse gas concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system, we shall, recognizing the scientific view that the increase in global temperature should be below 2 degrees Celsius, on the basis of equity and in the context of sustainable development, enhance our long-term cooperative action to combat climate change. We recognize the critical impacts of climate change and the potential impacts of response measures on countries particularly vulnerable to its adverse effects and stress the need to establish a comprehensive adaptation programme including international support.

2. We agree that deep cuts in global emissions are required according to science, and as
documented by the IPCC Fourth Assessment Report with a view to reduce global emissions so as to hold the increase in global temperature below 2 degrees Celsius, and take action to meet this objective consistent with science and on the basis of equity. We should cooperate in achieving the peaking of global and national emissions as soon as possible, recognizing that the time frame for peaking will be longer in developing countries and bearing in mind that social and economic development and poverty eradication are the first and overriding priorities of developing countries and that a low-emission development strategy is indispensable to sustainable development.

3. Adaptation to the adverse effects of climate change and the potential impacts of response
measures is a challenge faced by all countries. Enhanced action and international cooperation on adaptation is urgently required to ensure the implementation of the Convention by enabling and supporting the implementation of adaptation actions aimed at reducing vulnerability and building resilience in developing countries, especially in those that are particularly vulnerable, especially least developed countries, small island developing States and Africa. We agree that developed countries shall provide adequate, predictable and sustainable financial resources, technology and capacity-building to support the implementation of adaptation action in developing countries.

4. Annex I Parties commit to implement individually or jointly the quantified economywide
emissions targets for 2020, to be submitted in the format given in Appendix I by Annex I Parties to the secretariat by 31 January 2010 for compilation in an INF document. Annex I Parties that are Party to the Kyoto Protocol will thereby further strengthen the emissions reductions initiated by the Kyoto Protocol. Delivery of reductions and financing by developed countries will be measured, reported and verified in accordance with existing and any further guidelines adopted by the Conference of the Parties, and will ensure that accounting of such targets and finance is rigorous, robust and transparent.

5. Non-Annex I Parties to the Convention will implement mitigation actions, including
those to be submitted to the secretariat by non-Annex I Parties in the format given in Appendix II by 31 January 2010, for compilation in an INF document, consistent with Article 4.1 and Article 4.7 and in the context of sustainable development. Least developed countries and small island developing States may undertake actions voluntarily and on the basis of support. Mitigation actions subsequently taken and envisaged by Non-Annex I Parties, including national inventory reports, shall be communicated through national communications consistent with Article 12.1(b) every two years on the basis of guidelines to be adopted by the Conference of the Parties. Those mitigation actions in national communications or otherwise communicated to the Secretariat will be added to the list in appendix II. Mitigation actions taken by Non-Annex I Parties will be subject to their domestic measurement, reporting and verification the result of which will be reported through their national communications every two years. Non-Annex I Parties will communicate information on the implementation of their actions through National
Communications, with provisions for international consultations and analysis under clearly defined guidelines that will ensure that national sovereignty is respected. Nationally appropriate mitigation actions seeking international support will be recorded in a registry along with relevant technology, finance and capacity building support. Those actions supported will be added to the list in appendix II. These supported nationally appropriate mitigation actions will be subject to international measurement , reporting and verification in accordance with guidelines adopted by the Conference of the Parties.

6. We recognize the crucial role of reducing emission from deforestation and forest
degradation and the need to enhance removals of greenhouse gas emission by forests and agree on the need to provide positive incentives to such actions through the immediate establishment of a mechanism including REDD-plus, to enable the mobilization of financial resources from developed countries.

7. We decide to pursue various approaches, including opportunities to use markets, to
enhance the cost-effectiveness of, and to promote mitigation actions. Developing countries, especially those with low emitting economies should be provided incentives to continue to develop on a low emission pathway.

8. Scaled up, new and additional, predictable and adequate funding as well as improved
access shall be provided to developing countries, in accordance with the relevant provisions of the Convention, to enable and support enhanced action on mitigation, including substantial finance to reduce emissions from deforestation and forest degradation (REDD-plus), adaptation, technology development and transfer and capacity-building, for enhanced implementation of the Convention. The collective commitment by developed countries is to provide new and additional resources, including forestry and investments through international institutions, approaching USD 30 billion for the period 2010 . 2012 with balanced allocation between adaptation and mitigation. Funding for adaptation will be prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa. In the context of meaningful mitigation actions and transparency on implementation, developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries. This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance. New multilateral funding for adaptation will be delivered through effective and efficient fund arrangements, with a governance structure providing for equal representation of developed and developing countries. A significant portion of such funding should flow through the Copenhagen Green Climate Fund.

9. To this end, a High Level Panel will be established under the guidance of and
accountable to the Conference of the Parties to study the contribution of the potential sources of revenue, including alternative sources of finance, towards meeting this goal.

10. We decide that the Copenhagen Green Climate Fund shall be established as an operating
entity of the financial mechanism of the Convention to support projects, programme, policies and other activities in developing countries related to mitigation including REDD-plus, adaptation, capacity building, technology development and transfer.

11. In order to enhance action on development and transfer of technology we decide to
establish a Technology Mechanism to accelerate technology development and transfer in support of action on adaptation and mitigation that will be guided by a country-driven approach and be based on national circumstances and priorities.

12. We call for an assessment of the implementation of this Accord to be completed by
2015, including in light of the Convention.s ultimate objective. This would include consideration of strengthening the long-term goal referencing various matters presented by the science, including in relation to temperature rises of 1.5 degrees Celsius.

EU trade balance for January-September 2009

EU trade stats for January-September 2009, detailed resultsm by Eurostat (released December 18):


The EU trade deficit decreased for energy (-172.4 bn euro in January-September 2009 compared with -293.7 bn in January-September 2008) and for raw materials (-14.1 bn compared with -31.8 bn).

The surplus fell for machinery and vehicles (+77.0 bn compared with +115.3 bn), but rose for chemicals (+58.8 bn compared with +56.8 bn).

Trade Partners:

EU trade flows with all of its major partners fell.

The largest decreases were recorded for exports to Russia (-40% in January-September 2009 compared with January-September 2008), Turkey (-27%), Brazil (-23%), South Korea (-22%) and the USA (-20%), and for imports from Russia (-42%), Norway (-30%), Japan and Brazil (both -28%) and Turkey (-26%). The smallest falls were observed for exports to China (-1%) and imports from Switzerland (-8%).

The EU trade surplus fell with the USA (+30.7 bn euro in January-September 2009 compared with +48.9 bn in January-September 2008) and Switzerland (+10.1 bn compared with +13.6 bn).

The EU trade deficit decreased with China (-99.1 bn compared with -120.4 bn), Russia (-34.6 bn compared with -61.2 bn), Norway (-24.6 bn compared with -40.5 bn) and Japan (-14.9 bn compared with -25.8 bn).

Concerning the total trade of Member States:
The largest surplus was observed in Germany (+91.7 bn euro in January-September 2009), followed by Ireland (+29.7 bn), the Netherlands (+27.9 bn) and Belgium (+11.0 bn).

The United Kingdom (-69.9 bn) registered the largest deficit, followed by France (-38.6 bn), Spain (-36.8 bn), Greece (-21.6 bn) and Portugal (-13.5 bn).

EU and Eurozone trade balances in October 2009 (1st estimate)

A) Eurozone: + 8.8 bn Euro

The first estimate by Eurostat, the Statistical Office of the European Communities (released on Friday December 18) for the Eurozone trade balance with the rest of the world in October 2009 show a 8.8 bn euro surplus, compared with -1.2 bn in October 2008.

The September 2009 balance had been +0.9 bn, compared with -6.0 bn in September 2008.

In October 2009, compared with September 2009, seasonally adjusted exports fell by 0.2% and imports by 2.2%.

B) EU: -3.8 bn Euro

The first Eurostat estimate for the October 2009 extra-EU trade balance was a 3.8 bn euro deficit, compared with -18.3 bn in October 2008.

In September 2009 the balance was -11.1 bn, compared with -24.5 bn in September 2008.

In October 2009 compared with September 2009, seasonally adjusted exports rose by 0.2%, while imports fell by 1.0%.

Construction output in the EU and its Eurozone in October 2009

These are first estimates released on December 17 by Eurostat, the Statistical Office of the European Communities re output in the construction sector in the EU and the Eurozone,

1) Seasonally adjusted production decreased by 0.6% in the Eurozone and by 0.4% in the EU in October 2009, compared with September 2009. In September 2009, production had fallen by 0.8% and 0.5% respectively.

2) Compared with a year ago, ie October 2008, output in October 2009 dropped by 7.7% in the Eurozone and by 6.9% in the EU.

Member States:

1) Monthly comparison
Among the Member States for which data are available for October 2009, construction output fell in nine, rose in Slovenia (+3.7%) and Sweden (+0.4%), and remained stable in France. The largest decreases were recorded in Slovakia (-7.3%), Bulgaria and Romania (both -4.4%).

Building construction dropped by 1.0% in the Eurozone and by 0.7% in the EU, after -0.7% and -0.6% respectively in September.
Civil engineering
increased by 0.8% in the Eurozne and by 1.4% in the EU, after -2.2% and -0.8% respectively in the previous month.

2) Annual comparison
Among the Member States for which data are available for October 2009, construction output fell in nine and rose in Poland (+3.3%), the Czech Republic (+1.5%) and Germany (+0.2%). The largest decreases were registered in Slovenia (-28.2%), Bulgaria (-25.1%), Romania (-24.7%) and Slovakia (-21.2%).

Building construction fell by 10.1% in the Eurozone and by 9.9% in the EU, after -10.3% in both zones in September.
Civil engineering increased by 1.0% in the Eurozone and by 5.5% in the EU, after -0.9% and +2.5% respectively in the previous month.

(The EU has 27 member states, 16 of which are in the Eurozone)

EU and Eurozone inflation in November 2009

Last Wednesday, December 16, Eurostat announced the inflation rates for the EU and its Eurozone for November 2009.

Eurozone's annual inflation rate was +0.5% in November 2009, up from -0.1% in October. A year earlier the rate was 2.1%. Monthly inflation was 0.1% in November 2009.

The EU's annual inflation was 1.0% in November 2009, up from 0.5% in October. A year earlier the rate was 2.8%. Monthly inflation was 0.2% in November 2009.

Member States:

In November 2009:
The lowest annual rates were observed in Ireland (-2.8%), Estonia (-2.1%) and Latvia (-1.4%),

The highest in Hungary (5.2%), Romania (4.6%) and Poland (3.8%).

Compared with October 2009, annual inflation fell in one Member State, remained stable in three and rose in twenty-three.

The lowest 12-month averages up to November 2009 were registered in Ireland (-1.4%), Portugal (-0.8%) and Spain (-0.2%), and the highest in Romania (5.7%), Lithuania (4.8%) and Latvia (4.2%).

Euro area - inflation parameters:

The main components with the highest annual rates in November 2009 were alcohol & tobacco (4.5%), miscellaneous goods & services (2.2%) and education (1.6%), while the lowest annual rates were observed for food (-1.2%), housing (-1.0%) and communications (-0.7%).

Concerning the detailed sub-indices, tobacco (+0.13 percentage points), fuels for transport (+0.12) and rents (+0.08) had the largest upward impacts on the headline rate, while gas (-0.30), heating oil (-0.11), milk, cheese & eggs and cars (-0.09 each) had the biggest downward impacts.

The main components with the highest monthly rates were transport (0.7%), alcohol & tobacco (0.5%) and clothing (0.4%), while the lowest were communications (-0.5%), recreation & culture and hotels & restaurants (-0.4% each). In particular, fuels for transport (+0.12 percentage points), heating oil, tobacco and vegetables (+0.02 each) had the largest upward impacts, while accommodation services (-0.05), package holidays (-0.04), air transport (-0.03) and telecommunications (-0.02) had the biggest downward impacts.

Saturday, December 19, 2009

COP15 fail: BUSINESSEUROPE in favor of legally binding agreement because companies need predictability

European business is disappointed by the limited outcome of Copenhagen summit, according to BUSINESSEUROPE (*) which points out that companies need predictability to develop the new green solutions on which a future low-carbon economy will depend.

BUSINESSEUROPE welcomes that the Copenhagen Accord reinforces the political commitment by international leaders to limit global warming to 2 degrees Celsius and, what is IMO very noteworthy, believes that it now has to "quickly lead to a legally binding agreement because companies need predictability to develop the new green solutions on which a future low-carbon economy will depend"

It strongly regrets, however, that the EU's major economic partners only repeated their limited mitigation commitments.

It notes that "therefore the Copenhagen Accord has not brightened the prospect for a global level-playing field in the future. On the contrary, European companies have to pay for their emissions under the EU Emission Trading Scheme and are as exposed to carbon leakage as they were before Copenhagen. More predictability should have been given on the future of private financing schemes like the Clean Development Mechanism"

(*) BUSINESSEUROPE (formerly UNICE: Union of Industrial and Employers Confederations of Europe) has 40 member federations from 34 countries, including the European Union countries, the European Economic Area countries, and some central end Eastern European countries.

Note: The author was a permanent delegate at BUSINESSEUROPE (then UNICE) from 1991-1994, representing (and employed by) its member from Greece.

Was Athens or Sparta more influential in the making of the US?

Since there is a lot of talk these days about the role of the US Senate in the US political systemics, consider this:

Which political system, the Athenian or the Spartan, was more influential to the US Constitution and the making of the US in general?

And since we are on the topic:

a) Who was the "father" of Democracy: a) Cleisthenes b) Pericles or c) Leonidas?

b) Why did Sparta beat Athens in the Peloponnesian War (431-404 B.C)? Why did Sparta lose to Thebes at Leuctra (371 B.C.)?

Feel free to tweet me your replies @npanayotopoulos (via Twitter of course).

The 4 priorities of the Spanish presidency of the EU

The Spanish presidency of the EU (Jan-June 2010) has the following 4 priorities:

1) Implementing the changes introduced by the Lisbon Treaty
2) following up on the EU’s response to the crisis – especially the EU 2020 strategy and on financial supervision,
3) strengthening citizens’ involvement
4) the role of the EU as a global player

Breakthrough in the Senate Healthcare reform bill?

It appears that a 60th member of the US Senate has agreed to support the Senate's version of the bill and that thus debate will finally end on Monday and the bill will pass after a vote.

This is because it seems that an agreement was reached late on Friday on language that resolves Senator Ben Nelson's concerns that federal funds will not be used to fund abortions under the Senate bill.

The House of Reps has already passed its own bill, on November 7, that that version included stricter anti-abortion language favored by Senator Nelson, yet, last week the Senate (somehow?) rejected an amendment that would have incorporating the same language as in the House's version in the Senate bill!!!!!

Anyway, the Senate's bill extends coverage to 30 million uninsured Americans by providing subsidies to help them pay for the health coverage and by stopping refusals to insure people with pre-existing medical conditions. The "collateral damage" of the bill is a) the removal of plans for a government-run insurance option and b) the removal of an expansion of the Medicare government health program for the elderly to 55-64 year olds (even of a pay-in option).

Notably, President Obama's "Weekly Address: The Patient's Bill of Rights and Health Reform" video had been posted on the White House's website (White House Blog)on December 19, at 12:00 AM EST!

In his address, President Obama looks back to the bipartisan Patient's Bill of Rights, a bill that was defeated in Congress, according to the Pres., at the hands of special interests and their supporters, and notes that health insurance reform covers the same ground and much more in terms of giving the consumers the upper hand over their insurance companies. He then calls on the Senate to allow an up-or-down vote, and for those opposing reform to stop using parliamentary maneuvers to drag it out.

Part of the $636 billion military spending bill that the US Senate just approved are

Extended through February 28, 2010, of the following:

* Jobless benefits and health-insurance subsidies for the jobless

* Current reimbursement rates for doctors under the national Medicare health insurance program for the elderly, thus averting a 21% pay cut

* Loosening of regulations to encourage small business lending. so that The Small Business Administration will continue to waive or reduce its loan fees and back 90% of the loans it oversees


* A law that allows satellite television providers to retransmit broadcast-TV signals

It took strong words by Dan Pfeiffer, White House Communications Director, posted a post titled "The Time for Political Games is Over" at The White House Blog. December 18, 2009 at 12:10 PM EST, to get the Senate moving on the military spending bill per se.

Trying to put together the pieces of the Climate Change "Accord" 4:20 am CET Dec. 19

Below is my attempt to compile as many of the elements and parameters of the so called "Copenhagen Accord" (sic), approved by about 20+ countries out of the 193 present in the COP15 UN Climate Change Conference in Copenhagen. None of the elements are necessarily accurate, alas.

* 120 countries leaders attended the COP15 (a record for COPs) even for a few hours (eg Obama)
* It appears that Pres. Obama reached a deal, initially, with China, India, South Africa and Brazil. It is not legally binding.
* The EU is not satisfied with the "accord", not sure whether it was present when it was drafted. It seems that after the initial agreement between Obama and the other 4, a group of 20+ countries, including the EU, worked on it.
* It seems that the EU is going to go for its existing target (I think -20% compared to 1990 levels) by 2020 w/o an accord, and is willing to go deeper (I think to -30% of 1990 levels) by 2020 provided there is an agreement.
* The "accord" sets an upper temperature limit of 2 degrees Celsius.
* A +2 degrees over pre-industrial era limit does not solve the problem for the small island country of Tuvalu and some more such countries which are said to sink below sea level should temperature reach +1.5 degrees.
* The US pledges 100 bn USD by developing countries to others but starting from 2020.

* The fast start aid, 30 bn for 3 years, 2010-12, has so far contribution pldges from:
1) The EU, around 10 billion (athough I have read a report that the European Parliament in adopting the EU budget for 2010 noticed that European Commission and Council have not budgeted this money and it may have to come from extra contributions by EU member states)
2) China about 11 billion
3) The US only 3-4 billion (!!)

* China broke with its allies in the developing nations' group of "77 and China" by embracing the accord with the US.
* Obama's ability to commit is said to be partly blocked by the fact that carbon capping US legislation is "stalled" in the US Senate
* A target that mentioned in some draft texts of reducing world greenhouse gas emissions by 50% by 2050 seemed not to be in the accord.
* Many of the delegations that were not part of the drafting of the "accord" are crying "foul".

* Another meeting is planned for 6 months from now in Bonn, Germany.
* It seems that the "accord" envisages countries submitting targets next month
* It seems that there is an end-2010 date for turning this non legally binding "accord" into a legally binding one and, if I understood N. Sarkozy's statements correctly, the President of Mexico has been mandated to try to draft such a document.

This for now, 4:40 am CET, Dec. 19, 2009.

5 am CET/Copenhagen time (11 pm EST), the Plenary seems back in session.

UK car production in November (10% of total UK exports)

The automotive industry has £51 billion turnover and £10 billion value added. Over 800,000 jobs are dependent on the industry which accounts for 10% of total UK exports and invests £1 billion each year in R&D.

According to The Society of Motor Manufacturers and Traders (SMMT) car output was 112,948 in November, up 15.7% compared to November 2008. This is the first rise since September 2008, reflecting the positive impact of the UK scrappage schemes and economic stability in a number of major European markets. Yet production from Jan-Nov 2009 was 914,117 cars, -34.4% compared to Jan-Nov. 2008.

Commercial vehicle output was 9,186 in November, -16.2% compared to November 2008. It continues to fall, although the pace of decline has slowed. Production volumes have fallen in every month since September 2008. In the first 11 months of the year, production was 83,408, -57.6% compared to Jan-Nov 2008.

Thus, production is still well below previous levels,997,525 units from Jan-November, which is -37.2% compared to same period in 2008, and 2010 is set to be another tough year with considerable uncertainty at home and abroad. "It is essential that governments continue to sustain and strengthen economic recovery, improving access to credit and encouraging investment in new technologies and products” said Paul Everitt, SMMT chief executive. “Whilst the November figures represent the smallest recorded fall in the past 14 months, the sector is still down almost 60% on the year-to-date.”

The SMMT supports the interests of the UK automotive industry at home and abroad, promoting a united position to government, stakeholders and the media.

Improvements in production processes mean energy used to produce cars is down 24%, water use is down 45% and 57% less waste enters landfill sites. Average car tailpipe CO2 emissions have also been slashed and are down 20% compared to 1999 levels.

Friday, December 18, 2009

"If the climate was a bank they would already have saved it."

I do not agree with the ideology, policies and politics of Venezuela's old style Socialist President Hugo Chavez but I have to say that his comment at the COP15 Copenhagen UN Climate Change Conference holds, alas, water: "If the climate was a bank they would already have saved it."

According to The Economist, bank bailouts around the world have cost the equivalent of 5% of world GDP.
According to a study conducted for the UK government, Climate Change financing would cost 1% of world GDP per year.

The greatest shortcoming of the human race is ...

According to Dr. Albert A. Bartlett, professor Emeritus of Physics at the University of Colorado at Boulder and his 8 part video lecture (YouTube videos) "the greatest shortcoming of the human race is our inability to understand the exponential function". For example a 5% stable per annum increase figure says nothing or little to him/her, whereas it leads to a doubling (+100%) in 14 years.

This may help explain, IMO, among other things our inability to realise the effects of population growth, global warming and other dynamics that have a vital effect on us.

But I dare say, with my background in Operations Research and an MBA, that IMO an ever greater shortcoming of the human race is our inability to understand or perceive multi-variable functions, in plainer words, the fact that most outcomes do not have a single causal factor but are a result of many and, often, the interplay between them. As well as the ability to understand the distinction between correlation and causality.

This inability manifests itself in all aspects of our lives, from understanding the Universe to daily economics. And forces many people, from attorneys in trials to politicians to marketers to journalists etc, to try to often satisfy our need for mono-factor causality and inability to deal with a variety of causes to one outcome by simplifying and thus distorting reality as they present it to us. It also leads us, IMO, to a propensity for believing conspiracy theories rather than understanding that it was a variety of non-conspiring factors that led to an outcome.

Another major shortcoming of our human race is the inability of most of us to deal with uncertainty which is the way of the Nature. And our quest for certainty or security (be it in investing, etc) often leads to avenues that cost us a lot and still not provide but the feeling rather a reality of security.

Do you agree with Dr. Bartlett's choice or any of my two choices of the "greatest shortcoming"? Feel free to comment or offer your own choice.

Banking in post-industrial economies

In recent months I have blogged and tweeted the question: Do London and NYC over rely on financial services for activities, growth and jobs?
And does the crisis show that NYC and London need a new model for activities, growth and jobs?

Thus it does not surprise me to read, today, in an article at the Guardian that, in view of the recent decisions by the British and French governments to highly tax large bankers' bonuses and the arguments that they could lead to an exodus of bankers from London, Andy Haldane, the head of financial stability at the Bank of England (Britain's central bank) has argued during an interview with BBC World Service that bankers moving overseas to avoid the bonus supertax could be price worth paying to achieve lasting reform of the sector! Plus he also poses some very insightful food for thought re the structure of commercial and investment banking these days and arguing for a potential separation of commercial banking and investment banking activities (and thus benefits and risks).

I am in no way antithetical to the financial services and banking industries. They always had and still have a role to play in an economy. What I am skeptical about though is the weigh that has been placed on this industry or sector. Especially by London and NYC.

In my theory about the causes of the current crisis, I propose that in recent decades, financial services did not adapt to the shrinking of manufacturing in the US and Europe (based on an assumption of mine that it is large manufacturing companies that have high needs for banking and investment banking due to the high fixed costs and capital intensity of manufacturing). The rapid shrinking of the manufacturing base in the US and much of Europe should IMO have led to some shrinking of the financial services and investment banking, which do not seem to have happened before the crisis. The alleged trend for high level bankers to move to Asia, where manufacturing strives in recent years, proves to some extent the validity of my claim that high level banking needs manufacturing (and vice-versa), whereas Services based economies of our times, such as the US, the UK, etc, do not the same volume and type of banking needs that manufacturing did in the peak days of the US and European industrial era.

In addition, it does make sense IMO to pose the question whether it makes more sense for commercial and investment banking to co-exist in an entity and hedge each other or to be separate? Not that the answer is easy. We do after all live in interesting times and to wish someone to live in such times was not a wish but, allegedly, an Ancient Chinese curse.

Listen to an audio presentation, about 10 minutes) of my theory on the causes of the crisis: (October 2008)

Does Obama need to toughen up?

IMO Barack Obama is an amazing person. Among other things, he is very well educated and an international and multi-culti experience unparalleled by any other US President, rare even among past and present country leaders around the world.

He is part of a generation and type of leaders who can inspire and communicate and seek consensus rather than play political hardball. Yet, 11 months after his inauguration with a clear mandate by the US voters for Change, in a phase of US and world challenges that are, each, a Gordian Cord, and following the troubles of his healthcare reform in Congress, is it not maybe time for Obama to toughen up, politically, to get a significant US healthcare reform past the dire straits of especially the Senate and then finally move on to other crucial dossiers?

Recent polls indicate that his approval ratings have gone below 50%, but that is not IMO the point. The point is that the people voted him in with a clear mandate for Chnage and that a significant change in healthcare is a core part of that. Does he need to take his case to the people and use his skills and knowledge to convince them that real reform in healthcare is the only solution consistent with Change? And that all members of Congress, and especially the Senate, who are standing in the way are responsible for failing them, the people?

Is it Democrats who are willing to vote for healthcare reform who should be worrying about the re-election chances or Republicans who are standing in the way of Change?

Time for Obama to toughen up and call and spade a spade?


PS. December 18, 2009 at 12:10 PM EST, Dan Pfeiffer, White House Communications Director, posted a post titled "The Time for Political Games is Over" at The White House Blog.

Inter alia he writes: "We've been talking about fixing the broken health care system in this country for decades. Each day reform was delayed this year, an average of 15,000 Americans lost insurance. Since the last time heath reform failed, premiums have doubled and national health care expenditures have nearly tripled."! Wow. And he asserts that "The time for political games is over. Now it’s time to act." I so agree with Dan Pfeiffer.

US Healthcare: Reform, what reform?

What it is a major breakthough, is forcing insurance companies not to deny coverage to individuals due to pre-existing health conditions enough of a healthcare reform?

Howard Dean, former governor of Vermont, chairman of DNC and a doctor, had led in recent day a group of liberal Democrats that argue that the Senate healthcare bill (that now needs 60 votes to pass out of 100 instead of 51 under conciliation process) that Obama supports and which is moving toward a possible vote in coming days should be killed, in favor on relaunching a new, more ambitious healthcare reform initiative that would require 51 votes to pass in the Senate rather than 60.

In an ABC News interview on Wednesday, Obama claimed the legislation at hand
a) will reduce the budget deficit over the long term,
b) will help reduce insurance premiums for families,
c) will force companies not to deny coverage to individuals due to pre-existing health conditions, and
d) permit 30 million uninsured to get coverage.

But are those elements enough of a US healthcare reform?

Maybe a US referendum would be a solution, let the people decide?

Bank of England: the financial system has been significantly more stable over the past six months

The Bank of England is today, October 18, publishing its bi-annual Financial Stability Report (PDF, 74 pages). The Report provides the Bank’s current assessment of conditions affecting financial stability and discusses ways to strengthen the financial system in the future.

Inter alia, the Report identifies that the financial system has been significantly more stable over the past six months.

This was underpinned by the authorities’ sustained support for the banking system and monetary policy measures.

Low risk-free interest rates and reduced uncertainty have led to a rebound in a range of asset prices.

Primary issuance in many capital markets has resumed, reducing financing risks for some borrowers.

The market rally has boosted bank profits, lowered concerns about potential future losses, and has enabled banks to raise further external capital.

Banks have also been able to issue unguaranteed term debt, helping them to reduce their reliance on short-term funding.

At the same time, the Report notes that after such a prolonged period of exuberance earlier in the decade, it is inevitable that some banks around the world have overstretched balance sheets. They will take time to adjust, and in the meantime remain vulnerable to the risk of less rapid than expected economic recovery.

Around the world, a number of borrowers, including in the commercial property sector, have large refinancing needs in the coming years. And while funding costs remain low, there is some risk of market participants accumulating excessively risky positions, which could unwind abruptly when yield curves eventually rise.

Over time, and consistent with maintaining lending into the real economy, many banks will need to reduce leverage further, extend the maturity of their funding and refinance substantial amounts of funding as official sector support is withdrawn.

While their profitability is relatively buoyant and market conditions broadly favourable, banks should take opportunities to strengthen their balance sheets, including by not distributing an excessive amount of profit. That will reduce the risk of disruption to the flow of credit in the future.

In relation to safeguarding financial stability in the future, the Report says that, in the medium term, the root causes of this and previous systemic crises must be tackled – excessive risk-taking in the upswing of the credit cycle and insufficient resilience in the subsequent downturn.

It also says that: An expectation that ‘too important to fail’ firms will receive public assistance, and that unsecured, unsecured wholesale creditors will not share losses, has exacerbated both the boom and the bust.

That calls for a robust, multi-faceted policy response. Regulatory policies should give greater emphasis to systemic risks across the cycle and across institutions, as set out in a recent Bank discussion paper (The role of macroprudential policy, November 2009). They should be complemented by structural measures to contain the spread of risk across the system. And because failures of financial institutions cannot and should not be prevented, the resolution framework will need to be extended to limit the impact on the wider economy.

Technically demanding but interesting read, huh!

Irish economy +0.3% in Q3 2009

Ireland's GDP (gross domestic product) +0.3% in Q3 compared to Q2 (but -7.4% compared to Q3 2008).

This means that the Irish economy, until recently considered a "tiger" due to its dynamism in recent years, is now technically out of recession.

ALDE strategic priorities for the new European Commissioners

Guy Verhofstadt, the group leader of ALDE (Alliance of Liberals and Democrats for Europe, the 3rd largest group in the European Parliament, (*)) presented the strategic priorities of the Liberals and Democrats for the incoming members of the European Commission who face a series of hearings by the European Parliament in January before being approved (the new Commission would then take office February 1st, 2010)).

The ALDE group believes the EU should focus its efforts on five broad priorities:
1. tackling the economic and financial crisis,
2. tackling climate change,
3. fighting for freedom and fundamental rights,
4. rethinking the EU budget and system of own resources
5. promoting a coherent strategy in foreign affairs.

An ALDE strategy document addresses specific policy priorities towards each new commissioner as they prepare for the parliamentary approval process (PDF file)

(*) Note for my American readers: In Europe, Liberal Democrat has no correlation to US type of liberalism or The Democratic Party, UK and European Liberal Democrats are rather "centrist" in their political views (middle of the road or centrist in US terms).

Thursday, December 17, 2009

WTO Doha Round "stocktaking" in late March 2010

In his report to the General Council on 17 December 2009 in his capacity as chair of the Trade Negotiations Committee, the Director-General of the World Trade Organisation Pascal Lamy, said members should reserve the last week of March next year for stocktaking to assess whether concluding the Doha Round in 2010 “is doable” (

Wednesday, December 16, 2009

Philosophy: "Lifestyling"

Know thyself, manage your household and be aware of the dynamics (socio-econ, policy, etc) that affect your life, work - career, business, household = Lifestyling

How "philosophised" are you? Know thyself and be aware of the dynamics (socio-econ, policy, etc) that affect your life, work, household, etc.

US Fed keeps its interest rates unchanged

The US Federal Reserve Bank has decided to continue holding its US interest rates unchanged at between 0% and 0.25% for yet another month.

Trade in Goods and Services and other US international transactions in Q3 of 2009

According to the Bureau of Economic Analysis of the US Department of Commerce, these are the the stats re U.S. International Transactions in the 3rd Quarter of 2009 (July-September 2009):

Current Account

The U.S. current-account deficit—the combined balances on trade in goods and services, income, and net unilateral current transfers—increased to $108.0 billion (preliminary) in the third quarter of 2009 from $98.0 billion (revised) in the second quarter. The increase was more than accounted for by an increase in the deficit on goods. A small increase in net unilateral current transfers to foreigners also contributed to the higher current-account deficit, while increases in
the surpluses on income and on services were partly offsetting.


Goods and services

The deficit on goods and services increased to $97.4 billion in the third quarter from $81.2 billion in the second.


The deficit on goods increased to $132.1 billion in the third quarter from $115.5 billion in the second.

Goods exports increased to $263.9 billion from $246.1 billion. The increase was largely accounted for by increases in industrial supplies and materials and in automotive products. Capital goods and consumer goods also increased.

Goods imports increased to $396.1 billion from $361.6 billion. The increase was largely accounted for by increases in industrial supplies and materials, mostly in petroleum and products, and in automotive products. Capital goods and consumer goods also increased.


The surplus on services increased to $34.8 billion in the third quarter from $34.2 billion in the second.

Services exports increased to $128.6 billion from $125.3 billion. The increase was mostly accounted for by increases in travel, in “other” private services (such as business, professional, and technical services, insurance services, and financial services), in “other” transportation (such as freight and port services), and in royalties and license fees.

Services imports increased to $93.9 billion from $91.0 billion. The increase was mostly accounted for by increases in “other” private services, in travel, in “other” transportation, and in direct defense expenditures.


The surplus on income increased to $23.7 billion in the third quarter from $16.7 billion in the second.

Investment income. Income receipts on U.S.-owned assets abroad increased to $139.7 billion from $134.3 billion. An increase in direct investment receipts was partly offset by decreases in “other” private receipts (which consists of interest and dividends) and in U.S. government receipts.

Income payments on foreign-owned assets in the United States decreased to $114.2 billion from $115.9 billion. Decreases in “other” private payments (which consists of interest and dividends) and in U.S. government payments were largely offset by an increase in direct investment payments.

Compensation of employees

Receipts for compensation of U.S. workers abroad were virtually unchanged at $0.7 billion, and payments for compensation of foreign workers in the United States were virtually unchanged at $2.5 billion.

Unilateral current transfers

Net unilateral current transfers to foreigners were $34.4 billion in the third quarter, up from $33.4 billion in the second. The increase was more than accounted for by an increase in U.S. government grants.

Capital Account

Net capital account payments (outflows) were virtually unchanged at $0.7 billion in the third quarter.

Financial Account

Net financial inflows were $38.3 billion in the third quarter, down from $63.3 billion in the second. The slowdown resulted from a shift to an increase from a decrease in U.S.-owned assets abroad (a shift to outflows from inflows) that was mostly offset by a larger increase in foreign-owned assets in the United States in the third quarter than in the second quarter (larger inflows).

U.S.-owned assets abroad

U.S.-owned assets abroad increased $294.1 billion in the third quarter, following a decrease of $37.4 billion in the second.

U.S. claims on foreigners reported by U.S. banks and securities brokers increased $240.1 billion in the third quarter, following an increase of $27.2 billion in the second. (Examples of these claims are U.S. residents’ deposits at banks abroad and loans by U.S. banks and securities brokers to foreigners.)

Net U.S. purchases of foreign securities were $47.8 billion in the third quarter, down from $92.6 billion in the second. Net U.S. purchases of foreign stocks were $26.8 billion, down from $37.7 billion. Net U.S. purchases of foreign bonds were $21.0 billion, down from $54.9 billion.

U.S. direct investment abroad increased $62.7 billion in the third quarter, following an increase of $47.4 billion in the second. Shifts to increases from decreases in net equity capital investment and in net intercompany debt investment abroad were partly offset by a small reduction in reinvested earnings.

U.S. official reserve assets increased $49.0 billion in the third quarter, following an increase of $3.6 billion in the second. The pickup resulted from the allocation of $47.6 billion in special drawing rights (SDRs) to the United States as part of two new allocations of SDRs by the International Monetary Fund to its member countries.

U.S. government assets other than official reserve assets decreased $57.9 billion in the third quarter, following a decrease of $193.8 billion in the second. The decreases in each of the last three quarters resulted from the reversal of swaps initiated under temporary reciprocal currency arrangements between the U.S. Federal Reserve System and foreign central banks.

Foreign-owned assets in the United States

Foreign-owned assets in the United States increased $332.4 billion in the third quarter, following an increase of $14.6 billion in the second.

U.S. liabilities to foreigners reported by U.S. banks and securities brokers increased $127.0 billion in the third quarter, following a decrease of $178.9 billion in the second. (Examples of these liabilities are deposits of foreign residents at banks in the United States and loans by banks abroad to banks and securities brokers in the United States.)

Net sales of U.S. Treasury securities by private foreigners were $9.2 billion in the third quarter, down from $22.8 billion in the second.

Net purchases of U.S. securities other than U.S. Treasury securities by private foreigners were $24.7 billion in the third quarter, up from $13.9 billion in the second. Net foreign purchases of U.S. stocks were $48.6 billion, up from $35.6 billion. Net foreign purchases of U.S. federally sponsored agency bonds were $6.6 billion, up from $0.3 billion. Net foreign sales of U.S. corporate bonds were $30.4 billion, up from $22.0 billion.

Foreign direct investment in the United States increased $40.0 billion in the third quarter, following an increase of $37.0 billion in the second. The pickup was more than accounted for by larger increases in reinvested earnings and, to a much lesser extent, in net equity capital investment in the United States. In contrast, net intercompany debt investment in the United States slowed.

Foreign official assets in the United States increased $123.6 billion in the third quarter, following an increase of $124.3 billion in the second. The third-quarter increase includes, as part of “other” U.S. government liabilities, a $47.6 billion increase associated with the allocation of SDRs to the United States.

Transactions in U.S. currency shifted to net shipments to foreign countries of $4.2 billion in the third quarter from net shipments to the United States of $1.9 billion in the second.

The statistical discrepancy—errors and omissions in recorded transactions—was $70.4 billion in the third quarter, compared with $35.4 billion in the second.

In the third quarter, the U.S. dollar depreciated 5 percent on a trade-weighted quarterly average basis against a group of 7 major currencies.


The second-quarter international transactions are revised from previously published statistics. The current-account deficit was revised to $98.0 billion from $98.8 billion. The goods deficit was unrevised at $115.5 billion; the services surplus was revised to $34.2 billion from $32.5 billion; the income surplus was revised to $16.7 billion from $16.4 billion; and unilateral current transfers were revised to net outflows of $33.4 billion from $32.2 billion. Net financial inflows were revised to $63.3 billion from $58.3 billion.

Data Release dates in 2010:

Fourth quarter and year 2009...................March 18, 2010 (Thursday)
First quarter 2010..............................June 17, 2010 (Thursday)
Second quarter 2010........................September 16, 2010 (Thursday)
Third quarter 2010..........................December 16, 2010 (Thursday)

US building permits, housing starts and completions up in November

In the US, November building permits, housing starts and housing completions all up compared to October (+6%, +8.9%, +8.7% respectively)

According to the U.S. Census Bureau and the Department of Housing and Urban Development new residential construction statistics for November 2009 are as follows:

Building Permits:
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 584,000. This is 6.0 percent (±1.6%) above the revised October rate of 551,000, but is 7.3 percent (±1.8%) below the November 2008 estimate of 630,000.
Of which:
a) Single-family authorizations in November were at a rate of 473,000; this is 5.3 percent (±1.1%) above the revised October figure of 449,000.
b) Authorizations of units in buildings with five units or more were at a rate of 86,000 in November.

Housing Starts:
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 574,000. This is 8.9 percent (±10.2%) above the revised October estimate of 527,000, but is 12.4 percent (±9.1%) below the November 2008 rate of 655,000.
Of which:
a) Single-family housing starts in November were at a rate of 482,000; this is 2.1 percent (±9.2%)* above the revised October figure of 472,000.
b) The November rate for units in buildings with five units or more was 83,000.

Housing Completions:
Privately-owned housing completions in November were at a seasonally adjusted annual rate of 810,000. This is 8.7 percent (±13.7%) above the revised October estimate of 745,000, but is 25.3 percent (±10.1%) below the November 2008 rate of 1,084,000.
Of which:
a) Single-family housing completions in November were at a rate of 524,000; this is unchanged (±11.7%) compared with the revised October figure.
b) The November rate for units in buildings with five units or more was 270,000.

Note: New Residential Construction data for December 2009 will be released on Wednesday, January

UK's CPI up in November

According to the UK's Office of National Statistics, the CPI annual inflation was 1.9% in November, up from 1.5% n October.

By far the largest upward pressure affecting the change in the CPI annual rate came from transport. Within the transport category the largest upward effect came from fuels and lubricants, where prices rose by 2.8 per cent between October and November this year but fell by a record 8.3 per cent a year ago. The large fall in 2008 was due to sharp falls in petrol and diesel prices, reflecting the falling price of crude oil in the latter half of 2008.

There were small upward pressures from:

* Clothing and footwear - with the main effects coming from men’s and women’s outerwear

* Housing and household services - where the price of heating oil rose this year but fell a year ago, again reflecting movements in crude oil prices

The largest downward pressure affecting the change in the CPI annual rate came from food and non-alcoholic beverages. Overall prices in this category rose by 0.6 per cent between October and November this year compared with 1.4 per cent a year ago.

The main downward pressure came from vegetables and, to a lesser extent, coffee, tea and cocoa. Prices for a wide range of these products fell this year but rose a year ago. Partially offsetting these was a large upward effect from fruit, with this year’s prices rising by 11.7 per cent between October and November, compared with a 6.0 per cent rise a year ago.

Smaller downward pressures came from:

* Miscellaneous goods and services - due to appliances and products for personal care and financial services, where mortgage arrangement fees rose by less than a year ago

* Communication - where mobile phone charges fell this year but rose a year ago

* Health - with prices of pharmaceutical products falling this year but rising a year ago

In the year to November, RPI annual inflation was 0.3%, compared with a fall of 0.8 per cent in October. The last time there was an increase in the annual inflation rate greater than 1.1 per cent was between March and April 1990, when the rate increased from 8.1 per cent to 9.4 per cent.

In November 2009, the main factors affecting the CPI also affected the RPI.

Additionally, there was upward pressure from housing, mainly from mortgage interest payments which rose this year but fell a year ago. Overall, lenders passed on October’s half point decrease in the Bank rate.

RPIX inflation – the all items RPI excluding mortgage interest payments – was 2.7 per cent in November, up from 1.9 per cent in October.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate in October, was above the provisional figure for the European Union. The UK rate was 1.5 per cent whereas the EU’s as a whole was 0.5 per cent.

The next publication date for CPI stats is 19 January 2010.

UK unemployment stats for August-October 2009

According to the UK's ONS (Office of National Statistics), in the August to October 2009 trimester the unemployment rate was 7.9% and there were 2.49 million unemployed (28.93 million employed, 72.5%).

The inactivity rate was 21.0 per cent ie there were 7.99 million working age inactive people.

The Average Earnings Index, including bonuses, rose by 1.5 per cent on a year earlier. Excluding bonuses, it rose by 1.7% compared to a year before.


The quarterly increase in unemployment is the smallest since Spring 2008, while the number of people claiming Jobseeker’s Allowance has fallen on the month and there has been a slight increase in the number of vacancies.
The number of people in employment increased by 53,000 on the quarter to reach 28.93 million.

The number of women in part-time employment increased by 122,000 on the quarter to reach a
record high of 5.84 million, but the number of men in part-time employment was unchanged and
there were quarterly falls in the numbers of both men and women in full-time employment.

There were just over one million employees and self-employed people working part-time because they could not find a full-time job. This is the highest figure since records for this series began in 1992 and it is up 34,000 on the quarter.

The unemployment rate for August to October 2009 was 7.9 per cent, unchanged on the quarter. The number of unemployed people increased by 21,000 over the quarter to reach 2.49 million, the highest figure since the three months to March 1995. However, this is the smallest quarterly increase in the number of unemployed people since March-May 2008. The number of people unemployed for up to six months fell by 98,000 on the quarter to reach 1.31 million. The number of people unemployed for more than 12 months increased by 49,000 over the quarter to reach 620,000, the highest figure since the three months to November 1997.

The unemployment rate for 18 to 24 year olds increased by 0.9 percentage points on the quarter to reach 18.4 per cent, the highest figure since records for this series began in 1992.

The number of people claiming Jobseeker’s Allowance (the claimant count) in November 2009 decreased by 6,300 on the month to reach 1.63 million. This is the first monthly fall in the claimant count since February 2008.

The number of vacancies in the three months to November 2009 was 432,000, up slightly
compared with the previous quarter.

Average earnings, excluding bonuses, for August to October 2009 were 1.7 per cent higher than a year previously. The annual growth rate, excluding bonuses, for the public sector was 2.7 per cent, while the corresponding figure for the private sector was 1.4 per cent.

Tuesday, December 15, 2009

The Group of the Progressive Alliance of Socialists and Democrats in the European Parliament

The Group of the Progressive Alliance of Socialists and Democrats in the European Parliament (S&D) is the group that evolved out of the incorporation of members of European Parliament (MEPs) from the The Democratic Party (Partito Democratico, PD) of Italy in the Socialist Group in the European Parliament (ex "PES") after the June 2009 elections. It has the second highest number of members in the 2009-2014 European Parliament.

The European Parliament approves Euro 25 million for 2010 for Microfinance

A "European Progress Microfinance Facility" is to make available (via private amd public bodies) "micro-credits" (up to €25,000) to people within the European Union who want loans to start or grow very small firms (10 people or less and a turnover of less than €2 million), but are unable to obtain them on conventional credit markets.

To ensure that the Facility can start promptly in early 2010, the European Parliament Plenary on December 15 agreed via a vote to release 25 million Euro from the EU's 2010 budget (the 210 EU budget which will be put to a vote on Thursday, with the EP's extra powers following the Lisbon Treaty's entry into force Dec. 1).

For the three remaining years, there is, for the moment, no agreement between Parliament and Council on the resources for the Facility. The MEPs agreed to make €100 million available for the Facility over four years - as proposed by the European Commission, but stressed during the debate that these funds do not have to come from the "Progress" programme, which was set up to help vulnerable groups of people. The Commission had proposed that the Microfinance Facility be funded from this programme, as it already had received an additional €114 million, at Parliament's request.


The Facility is to be open to public and private bodies in the Member States that provide micro-finance to persons and micro-enterprises. It is to make the €100 million available to them over 4 years through joint management arrangements with the EIB group (European Investment Bank and European Investment Fund).

EU leaders' letter to the G20 leaders on Climate Change

President Barroso of the European Commission and the Prime Minister of Sweden, Reinfeldt, which holds the rotating Presidency of the EU Council, wrote today to the leaders of the G20 regarding the decisions that the European Council took last week in order to add momentum to a deal on climate change in the in-going Copenhagen UN Climate Change Conference (which concludes in 3 days).

It was alsi announced that the European Commission President will go to Copenhagen earlier than planned to meet key players and push for an ambitious deal on Climate Change.

Monday, December 14, 2009

Copenhagen - Climate Change: the advantages of a political agreement over a legally binding one

An ambitious political agreement re Climate Change would probably be better than a less ambitious legally binding one, the latter would be "policed quite effectively by world public opinion". I fully agree with this point of view, as expressed by Graham Watson, Member of European Parliament (Liberal Democrats, ALDE) in "Graham Reports from Copenhagen;
Update Monday 4th December PM".
in his blog

Inter alia, Mr. Watson writes:

"...This must be the first time world public opinion has mobilised so effectively, putting pressure on the government leaders to act ....

... Will the commitments be legally binding? It may be better if they are not, since in that case they will be less ambitious. A political agreement would probably be policed quite effectively by world public opinion."

I believe that Mr. Watson's rationale is right on the mark.

Home ownership - The core of our stability?

I wrote the following in my diary way before the subprime crisis:

George W. Bush Jr once said that owning a home is the center of the American Dream.

Not only of the American! Many Europeans, eg my parents, have home ownership at the center of their "living philosophy".

I do not. Am I "heretical"? Am I wrong? Is selling my flat a "stupid move", an irreversible stupid move?

Many own their home. It gives them and all other homeowners around the world a stable place to "stand", that I do appreciate and I can empathise with.

But in these global, interesting, volatile times, is building a tangible "fortress" ("my home is my fortress") the way to best deal with the dynamics - challenges of the times? Or is it a "life strategy" defensive measure which is not in line with the dynamics of the times?

For one, owning a home ties you down, reduces your mobility. Not only do the things we own wind up owning us (a quote from "The Fight Club") and a home is indeed "a thing" (rather than an intangible or mobile asset). Real estate property, along with alcohol, cigarettes and cars (another key symbol of "having") are the core taxable and red taped things in most systems. For obvious reasons.

But when one moves from state to state (eg USA) or country to country (eg EU) or region to region (eg Canada), does it make sense to have "property" and "taxable assets etc" in more than one locations? Who has time for dealing with more than one tax authorities? Or fees to spend for inter-national tax expertise?

Is relocation a privilege for the very rich (who can afford all the experts) and the have-nothings (who relocate with nothing, thus do not have issues of double taxation avoidance and do not need to file in more than one admins)?

In the EU, owning a car is a barrier to mobility too. For tax revenue related reasons, as well.

Does owning a home or car today make economic or strategic sense for anyone who wants to be "light" enough to be able to deal with the winds of globalisation?

Mobility of social security rights is another major issue. Eg how does a not impoverished old person get hospital insurance is he/she moves to the US or within the US? Can one take one's social security scheme with him/her (not to the after life, but to a new location), be it state or private or a mix?

Capital is mobile these global days. Products too. Services, as well, to some extent. Jobs too. But does one have to be desperate enough to liquidate everything in order to relocate or willing to spend a lot of time in red tape activities. Kind of defeats the relocation rationale, does it not?

What is more core then these days to any modern living strategy? Home ownership or a geo mobile health plan?

Health vs. Strength - Good vs. Evil

How on earth did a nice young man like Anakin Walker turn into Darth Vader? Sad!

The wise Yoda character said: "The fear of loss is a path to the dark side". He also added that Anakin should overcome the fear of losing what was dear to him!

So, to quote Janice Joplin's classic song is "freedom just another word for nothing else to lose"? Or is the key to have and to love but to be prepared at all times to lose what/who we love or is dear to us? Quite a demand on someone's emotions. With that kind of mentality, how can one commit one's self to anything?

All times are interesting. But some are more interesting than others. Who are most prone to stability and a sense of safety for a) themselves or b) their loved ones? How many bad deeds are committed in the name of protecting or serving one's own interests but rather the safety and interests of his/her loved ones? Many, way too many, it seems!

"I can feel your anger: It gives you focus, it makes you stronger" said the bad guy (to Anakin, aspiring Darth).

Wow! What a load of BS! Anger makes one "feel" stronger? By giving him/her an "unhealthy" type of focus.

On the other hand, focus does indeed help people streamline their energy and through that, they become "stronger" on what they focus on. Mothers do it, for example. People "committed" to an ideal, a theory, an emotion, a goal, do gain the focus which channels/streamlines their energy into so kind of strength. But this strength is not a general one! It applies to the field of focus!

Negative energy of all kinds does not lead to healthy outcomes. Not only for the subjects of the actions of "strong" ones, but for the strong ones themselves. Negative energy (anger, hatred, etc) it is like a "cancer" which infects its carrier, first of all. Then it also spreads like a "virus".

Anger makes someone stronger but not happier nor healthier. It is a "drug" with multiple negative side effects.

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