from the hip

While the economic downswing is still making itself felt in the US, it is now also hitting several European countries hard. And inflation is soaring, and hit a record high of 4.1 percent last month.

“There’s no obvious trigger for strong economic growth in Europe until the end of 2009,” says David Owen, chief European economist at Dresdner Kleinwort in London. “Massive [financial] imbalances need to be worked out, and the corporate sectors in many countries remain in a substantial deficit.”

Consumer confidence for the euro area has fallen to negative 29.7, the lowest it has been since 1993. And the news about the plunge in factory orders in Germany, led to the following comment, reported in the New York Times:

“It now looks likely that the euro zone will be the first major economy to fall into recession,” Jonathan Loynes, the chief European economist for Capital Economics, wrote after the report of sagging orders in Germany.

Great Britain

Royal Bank of Scotland, Britain’s second-largest bank, recently posted its first loss in 40 years after taking a £5.9bn hit from the credit crunch. And Barclays, the third-biggest bank, took a fresh £2.8bn write-down. Also, the price of houses are dropping rapidly, according to Guardian

the Halifax said house prices last month were 11% down on a year earlier - the first double-digit decline since its monthly healthcheck of the market was first published 25 years ago.

House prices back to 2006 and still falling, says Times. And new housing orders are down 33%. And, of course, home repossessions surge.

Business groups and City analysts warned that deep and rapid cuts in the cost of borrowing would be needed next year to pull Britain out of its first recession in more than 15 years. House prices are falling more rapidly than they were in the property crash of the late 1980s and early 1990s

It would seem a possible recovery in Britain will not be aided by increased consumer spending in the short term!

Recession in Germany?

Spiegel online writes that the German economy may have shrunk in the second quarter, according to early reports, and that the outlook for industrial production isn’t lively. Germany could slide into recession, and the German economy may have shrunk by around one percent. They also note that:

German factory orders were down by 2.9 percent in June from May, and orders from abroad for German goods plunged by 5.1 percent. Production at German factories rose by 0.2 percent in June — less than expected

Spain in deep trouble

Portugal, Italy, Greece, and Spain all face severe challenges. In Spain, the imploding domestic housing market has pushed the unemployment rate to 10.7 percent. The number of bankruptcies in the building sector is exploding, and one third of the job losses stems from the construction sector. As well, the housing market is stalling. The inflation is about 5 per cent.

The US

The credit cruch is still being felt, and so is the reversal of the wealth effect and high oil prices. In addition to bad news from the banking sector, Fannie Mae, Freddie Mac, Indy Mac, and so, in the latest sign of the deepening troubles, G.M. recently reported a second-quarter loss of $15.5 billionfollowing a loss of $8.7 billion reported earlier by Ford. Car sales are dropping, especially sales of American cars.

Guardian notes that:

The US mortgage finance empire Freddie Mac yesterday predicted the worst housing slump since the Great Depression as it set aside $2.5bn (£1.28bn) to cover credit liabilities caused by delinquent loans and foreclosures.

And in New York Times, Peter S. Goodman recently wrote (August 1) that “More Arrows Seen Pointing to a Recession”.

Overall

Pretty gloomy still. The most positive piece of news is the slight drop in oil prices. But still serious signals of a slowdown of growth and possibly recession both in Europe and the US.

There has been inrest between the two “independent” republics in Georgia - Abkhazia and South Ossetia - for some time.  The conflict, says New York Times, has tensed considerably recently:

The recent violence has been the worst in the region since June 2004, shortly after President Mikheil Saakashvili of Georgia came to power vowing to reassert the country’s control over South Ossetia and another rebel region, Abkhazia.

Also a part of the bigger context of this conflict is that Georgia has expressed a wish to become a part of NATO. A move that is not very popular in Russia and it’s premier, Putin.

Now Russia has sent troops and dozens of tanks and armoured vehicles into the breakaway Georgian province of South Ossetia. Also, Russian fighter jets have been shot down by Georgia. Russia is claiming that it is protecting its citizens. However, Tbilisi’s pro-Western Government describes it as an act of war.

More than 1.000 people have so far been killed. This is a very serious conflict. The US is currently sending an envoy to the area. Der Spiegel writes:

European diplomats have been trying to maintain peace in Georgia with financial incentives and promises of partnership. But now that bombs have started to fall, no one in Brussels, Berlin or Paris quite knows what to do.

The Georigian President calls it a perfectly timed attack, and refers to the fact that the eyes of the world are on Beijing and the Olympic Games.

I have a bad taste in my mouth about this. To some extent it reminds me of Hitler’s Germany attacking Poland and excusing the attack with reference to unrest in the border area and transgressions by Poland. I guess we will shortly learn more about what exactly Putin’s reorientation of Russia entails.

I hope the continuation will not be the case as it was in the case of the Germany-Poland conflict!

See also:

• Der Spiegel: Is this the First War between Russia and a Former Soviet State?
• Times (London): Georgia says Russian tanks mean ‘war’ in South Ossetia
• Guardian: Georgia accuses Russia after jets bomb South Ossetia border area
• Der Spiegel: How the Caucasus Erupted
• Politiken (Danmark): En frossen konflikt

Biofuels have been hailed as a major solution to the challenge posed by high and rising oil prices. However, lately there have been more and more indications that this may not be the case.

Rising food prices (and rising futures prices on food as well) is one such indication. A rise in demand for food, resulting from among other economic growth in some rising economies, such as China, is another.

Now a World Bank report has been leaked (to the Guardian) that indicates that

biofuels have driven up global food prices by 75 percent, according to the Guardian report, accounting for more than half of the 140 percent jump in price since 2002 of the food examined by the study. The paper claims that the report, completed in April, was not made public in order to avoid embarrassing US President George W. Bush.

This is somewhat at odds with an US analysis recently that came to the conclusion that just 3 percent of the food price increases could be attributed to biofuels. The World Bank numbers seem high, but even so I have more confidence in them.

No doubt we will much more on this issue in the coming month. To me, however, it seems pretty clear that using land that could have been used for food to instead grow biofuels must be wrong. Thus, only to the extent that biofuels can be grown elsewhere, do I think they should be permitted. Also, seems to me, we need new types of plants that are much more effective than the ones currently used.

To me, this is a field that requires much more pondering as well as more research. Far too many politicians around the world have jumped on this train much too fast!

See also: Secret report: biofuel caused food crisis and
Poverty: 260m driven into hunger by push for biofuel

Some time ago, after the election in Zimbabwe, I wrote that anything could happen there. And a lot has happened. Terror with beatings, arrests, and police raids of the oppositions’ headquarters, and so on. And alongside that, everything is slowed down and postponed. Elected results took ages to make official, then recounts took even more time, and so on.

Robert Mugabe has turned into a despot. He is very bad for the country, as we all know. But he is also very, very smart. He ignores the UN. He knows he can use the forces of government to slowly wear the opposition down. He knows he can terrorize voters and make many of them either vote for him or at least not vote. He knows guns are stronger than pens, and that he controls the guns.

By conducting the coup d’état in slow motion and surrounding parts of what he is doing with clouds of legalese, he also know that he is making it difficult for the rest of the world to react in the only way that matters to him – by military intervention. There have already been boycotts. I don’t think he cares too much, one way or the other, about a new one. Protests? Sure, and so what?

It is hard to see how a military intervention can be justified. And it is hard to see who would want to do it and finance it. But at the same time, seeing the Western world sitting there, watching, doing nothing, taking the role of the voyeur, also feels wrong. Human rights are being ignored, people’s votes are being ignored, freedom of speech is suppressed, ordinary people in Zimbabwe suffer and the sea of poverty widens.

It is an ugly picture for the moment. It may get even worse.

See also:

• Zimbabwe’s opposition leader to leave Dutch protection
• Mugabes dager er talte
• Zimbabwe: More beatings, more abductions
• Zimbabwe: Military intervention could be justified
• FN ber Mugabe avlyse valget
• Mandela: Vil ikke kritisere Mugabe

Many things may be said about Italy’s Prime Minister, Silvio Berlusconi (71), and, indeed, much has been said. But one thing is for sure: He likes beautiful women! An apppreciation of beauty he shares with most of his countrymen, I am sure (and a few others, as well).

Now he has appointed the very beautiful, conservative and talented Mara Carfagna (32) as his minister for equality. But not only that - at a dinner party he also said that if he had been single, he would have like to marry her. That’s a slightly unusual way for a prime minister to speak of his ministers, I would say. And, clearly also a statement his wife was not to pleased with, and made quite a lot of noise about.

Beautiful Mara Carfagna has a future, like most people. She has been a TV-hostess and a top-less model. And now she is, I would think, the most beautiful minister in any government in OECD. That really has to count for something in Italy?!?

And there is no rule anywhere stating that ministers of equality must be ugly, is there?

Mara Carfagna……Italy’s next Minister for something or other.

Rightwingers and ex-model in Italian cabinet

The Austrain Incest Case

Father Confesses to Horrific Crime. He held his daughter prisoner and abused her for decades. In the most spectacular kidnapping and incest case in Austrian history, a man has confessed to having held his daughter hostage for 24 years and siring seven children with her. (Der Spiegel)

Austria Stunned by Case of Imprisoned Woman. With his Mercedes-Benz and his fine clothes, Josef Fritzl looked every inch a property owner, neighbors in this tidy Austrian town said Monday. Even when running errands, they said, he wore a natty jacket, crisp shirt and tie. (New York Times)

The Family Man of Amstetten: Double life of a pillar of Austrian society. How did the perpetrator of one of modern Europe’s most horrific crimes convince his neighbours he was a respectable man? (The Independent)

Josef Fritzl: a shrewd liar and an obsessive tyrant. Casual acquaintances knew Josef Fritzl as a jovial fellow who liked to drink beer and enjoyed a bawdy joke.

But former neighbors say the man accused of imprisoning his daughter and fathering her seven children ran his household like a dictator. Piece by piece, a picture is emerging of a shrewd liar and an obsessive tyrant. (International Herald Tribune/AP)
(more…)

The case about Josef Fritzl, the Austrian that kidnapped his own daughter and kept her in a small underground apartment, behind seven locked doors, for 24 years while he abused her both sexually and in other ways, represents, to me, evil in a pure, undiluted form. Not only bad, evil acts, but systematic, organized evil.

As the full extent of his actions has been revealed - the torment to which he exposed his daughter for almost a quarter of a century, raping her and fathering her seven children in that little cave - I have become more and more perplexed. How can this be? How is such behavior possible in our time and age? How can a man become such a monster? And at a more practical level - how could a thing like this go on in a civilized, well-regulated society for 24 years?

A man claiming to be protecting his family, but obviously also a man who knew this his style of protection was more than a little at odds with socially accepted forms of protection. While his lawyer may be able to see good things in Fitzl, I really do not.

We are starting to learn a little bit about his past. It sheds considerable light on the question of how he became the monster. It offers, possibly, at least the beginnings of a seemingly plausible psychological explanation for his monstrous crimes. The Independent writes:

In an interview, the sister of Fritzl’s wife, Rosemarie, a woman identified as 56-year-old Christine R said that Fritzl had been brought up by a single mother with an explosive temper who resorted to violence to control her child.

“Josef grew up without a father. His mother raised him with her fists,” Mrs R said. “She used to beat him black and blue almost every day. Something must have been broken in him because of that. He was unable to feel any kind of sympathy for other people. He humiliated my sister for most of her life.”

He grew up being systematically subjected to and controlled by violence. But even so, the case still makes me perplex. The reason is that Josef F. at the same time was so much more than a monster, in other settings, with other people. He was evil incarnate, but also a smiling, respected, and somewhat successful businessman who amassed a fortune of 4 million dollars or so.

Over the years, more than 100 people have rented rooms and apartments from him. Seemingly without having much of a clue as to what went on. Apart from one person, that is, who has admitted to knowing about sexual abuse. But he was scared of Josef F. and did not dare to report it to anyone. Also, it has become known that Josef’s brother had a key to the basement.

Lately, after the case has become public, we have also seen a number of old, unsolved crimes resurfacing. An unsolved murder, several unsolved rapes. So far, the ties to Josef F. are speculative. But it would not, I guess, be very surprising if they turned out to be real. According to Der Spiegel, he raped his own daughter in front of her his and her children. So why should anything be a surprise?

So there was Josef F. the beast, and there was Josef F. the family man, and Josef F. the businessman. Possibly Josef F. the murderer and rapist. The multiple faces of Josef F. And the smiling face with the evil behind.

The little we know about his background, so far, may perhaps begin to explain, partly at least, the monster. However, explaining how the monster could coexist, seemingly with easy, with the other faces of Josef Fritzl, is a bigger challenge.

More about this case:

The Independent: The Making of a Monster

No need to be surprised when a house of horrors turns up on a quiet provincial street

Josef Fritz in the news

New York Times: Austria Stunned by Case of Imprisoned Woman

Painting a portait of Austrian incest suspect Josef Fritzl

Guardian (UK): How many more of our missing are stuck in some underground prison? (Expert view)

‘Every little thing she did, her father would hit her’

I always get very suspicious when governments, at whichever level, are eager to block, halt or close down fraud investigations. Now Gordon Brown is eager to close down the fraud investigation against BAE Systems.

It is a strange case. Tony Blair pressed Robert Wardle, the director of the Serious Fraud Office, to drop the investigation into secret payments by the arms company to Saudi Arabia. Then the case was brought before the high court. On Thursday, the high court, according to Guardian, 

rejected claims that the inquiry had had to be closed down for security reasons because “lives were at risk” if Britain no longer received intelligence on national security from Saudi Arabia.
…  Lord Justice Moses, .. with Lord Justice Sullivan attacked the government’s interference as unlawful.
In their ruling, the judges said: “We fear for the reputation of the administration of justice if it can be perverted by a threat … No one, whether within this country or outside, is entitled to interfere with the course of our justice. The rule of law is nothing if it fails to constrain overweening power.”

Gordon Brown and the Conservatives in England are trying to hide something. For the moment it is difficult to know exactly what. But that it is something that would be hard to defend publicly is clear.

I don’t think Gordon Brown will be able to stop the investigation. I don’t like it when politicians place themselves above the law and above the high court.

From freeinternetpress.com:

The court said that the Saudis should have been made to understand “the enormity of the interference with the U.K.’s sovereignty, when a foreign power seeks to interfere with the internal administration of the criminal law. It is not difficult to imagine what they would think if we attempted to interfere with their criminal justice system”.

The high court will reconvene in a fortnight to decide what remedy to award the two groups of anti-corruption activists who brought the judicial review of the Serious Fraud Office (SFO) decision to end the inquiry.

The UK activist groups Campaign Against Arms Trade (CAAT) and The Corner House have done a great job in bringing this before the high court and winning. They deserve support in the continuation of this story as well.

I certainly will support them!

_____________________________

Here is a little background on the case:

The arms company BAE secretly paid Prince Bandar of Saudi Arabia more than £1bn in connection with Britain’s biggest ever weapons contract, it is alleged today.

A series of payments from the British firm was allegedly channelled through a US bank in Washington to an account controlled by one of the most colourful members of the Saudi ruling clan, who spent 20 years as their ambassador in the US.

It is claimed that payments of £30m were paid to Prince Bandar every quarter for at least 10 years.

No, even that doesn’t bother me very much. Until recently, under UK law, even this was legal. Indeed, it was tax deductible, so legal was it.

This is the bit that does worry me though:

It is alleged by insider legal sources that the money was paid to Prince Bandar with the knowledge and authorisation of Ministry of Defence officials under the Blair government and its predecessors. For more than 20 years, ministers have claimed they knew nothing of secret commissions, which were outlawed by Britain in 2002.

See also: BAE corruption investigation switches to Tanzania

Princess Diana is one of the biggest mythical figures of recent times. From the day it became public knowledge that she was dating Charles, Prince of Wales, everything she did or said was major news more or less all over the world.

People loved her. She was royal, she was a kind person, she was engaged in social problems and health problems, and she was beautiful. So, of course, the media loved her as well. Hardly anything or anybody sold stories like Princess Diana. Nothing or nobody could outshine her as a media story seller.

And the paparazzi loved her as well. A picture of Diana, at just the right time and from the right angle, was literally gold. It could be sold all over the world in no time. And so they followed her. Everywhere, always. In huge packs, like hungry wolves chasing for food.

There was a whole industry around Diana. Paparazzi, journalists, newspapers, magazines, radio stations, TV-stations, journals, charities, celebrities - they all wanted her and fed off her immense popularity. Naturally. That’s how the world works in our day and age. And all because people all over the world were interested in her, liked her, sympathized with her, wanted to learn more and more about her.

Any problem she had - in the relationship to Charles, with the emergence of Camilla, with men she met, lovers - also fed into the media madness that was the modern myth of Diana. And made it grow even bigger.

She was a myth. She to some extent became the myth. She was consumed by the myth, in the end. That’s what the jury in London, and the judge, really said.

And now the new inquest about how Princess Diana died is over. It has been huge. Here are some figures highlighting the scale of the Diana inquest:

2,931,300 - estimated number of words spoken in open court during the inquest - almost four times as many as there are in the Bible.

£10 million - the likely combined cost to the taxpayer of the inquest and the preceding Scotland Yard investigation.

20,000 to 66,000 - the number of landmines which could potentially have been cleared for £10 million. (Based on an estimate of between 300 US dollars and 1,000 US dollars per device used by the Mines Advisory Group).

This whole thing reminds me a lot about another powerful myth, that of President John F. Kennedy. That too is a myth still alive and going strong.

As with John F. Kennedy, I suspect Princess Diana will be a mythical figure for a long time to come. It doesn’t really matter what the inquiry concluded. There are still more conspiracy theories to be constructed, I am sure. More elements in the myth to be spun. More articles that will be written, about her, her relationships, what she did, and so on. And more books, more TV-shows, more movies.

Princess Diana is, for good or bad, a powerful modern myth that will be with us for a long, long time to come.

I think.

More stuff about Princess Diana:
An article from The Guardian on the multiple conspiracy theories.

As more and more facts and numbers about the current crisis in the US emerge, I find myself wondering just how deep this recession is and how long it is going to last. A number of people, among them Stiglitz, have indicated that it is deep and severe. But still the question remains: How severe?

This is what The Guardian (UK) writes:

America looks like it is already in recession, one that threatens rapidly to become the biggest slump since the 1920s. The collapse a week ago of the country’s fifth-largest investment bank, Bear Stearns, signalled that the crisis sweeping the world’s credit markets had taken a decisive turn for the worse.

Maybe it is a sign on the depth of the crisis that The Independent (UK) today brings an article entiteled:

USA 2008: The Great Depression

Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world’s richest country faces economic crisis

.. Forty states are reporting increases in applications for the stamps, actually electronic cards that are filled automatically once a month by the government and are swiped by shoppers at the till, in the 12 months from December 2006. At least six states, including Florida, Arizona and Maryland, have had a 10 per cent increase in the past year.

So, an inreasing number of American families have problems putting food on the table. Meanwhile, in Washington the republican government is concerned about proposing a plan for regulating the financial institutions, and launches a plan many commentators (Wall Street Journal) say is mostly “dead on arrival” (New York Times). And, one might add, a plan that will only, at best, be relevant to the next crisis - the current one is here and regulation is not going to make it disappear.

Wall Street regulation is not going to solve it. Not now.