In German Suburb, Life Goes On Without Cars

May 12, 2009
In German Suburb, Life Goes On Without Cars
By ELISABETH ROSENTHAL
VAUBAN, Germany — Residents of this upscale community are suburban pioneers, going where few soccer moms or commuting executives have ever gone before: they have given up their cars.
Street parking, driveways and home garages are generally forbidden in this experimental new district on the outskirts of Freiburg, near the French and Swiss borders. Vauban’s streets are completely “car-free” — except the main thoroughfare, where the tram to downtown Freiburg runs, and a few streets on one edge of the community. Car ownership is allowed, but there are only two places to park — large garages at the edge of the development, where a car-owner buys a space, for $40,000, along with a home.
As a result, 70 percent of Vauban’s families do not own cars, and 57 percent sold a car to move here. “When I had a car I was always tense. I’m much happier this way,” said Heidrun Walter, a media trainer and mother of two, as she walked verdant streets where the swish of bicycles and the chatter of wandering children drown out the occasional distant motor.
Vauban, completed in 2006, is an example of a growing trend in Europe, the United States and elsewhere to separate suburban life from auto use, as a component of a movement called “smart planning.”
Automobiles are the linchpin of suburbs, where middle-class families from Chicago to Shanghai tend to make their homes. And that, experts say, is a huge impediment to current efforts to drastically reduce greenhouse gas emissions from tailpipes, and thus to reduce global warming. Passenger cars are responsible for 12 percent of greenhouse gas emissions in Europe — a proportion that is growing, according to the European Environment Agency — and up to 50 percent in some car-intensive areas in the United States.
While there have been efforts in the past two decades to make cities denser, and better for walking, planners are now taking the concept to the suburbs and focusing specifically on environmental benefits like reducing emissions. Vauban, home to 5,500 residents within a rectangular square mile, may be the most advanced experiment in low-car suburban life. But its basic precepts are being adopted around the world in attempts to make suburbs more compact and more accessible to public transportation, with less space for parking. In this new approach, stores are placed a walk away, on a main street, rather than in malls along some distant highway.
“All of our development since World War II has been centered on the car, and that will have to change,” said David Goldberg, an official of Transportation for America, a fast-growing coalition of hundreds of groups in the United States — including environmental groups, mayors’ offices and the American Association of Retired People — who are promoting new communities that are less dependent on cars. Mr. Goldberg added: “How much you drive is as important as whether you have a hybrid.”
Levittown and Scarsdale, New York suburbs with spread-out homes and private garages, were the dream towns of the 1950s and still exert a strong appeal. But some new suburbs may well look more Vauban-like, not only in developed countries but also in the developing world, where emissions from an increasing number of private cars owned by the burgeoning middle class are choking cities.
In the United States, the Environmental Protection Agency is promoting “car reduced” communities, and legislators are starting to act, if cautiously. Many experts expect public transport serving suburbs to play a much larger role in a new six-year federal transportation bill to be approved this year, Mr. Goldberg said. In previous bills, 80 percent of appropriations have by law gone to highways and only 20 percent to other transport.
In California, the Hayward Area Planning Association is developing a Vauban-like community called Quarry Village on the outskirts of Oakland, accessible without a car to the Bay Area Rapid Transit system and to the California State University’s campus in Hayward.
Sherman Lewis, a professor emeritus at Cal State and a leader of the association, says he “can’t wait to move in” and hopes that Quarry Village will allow his family to reduce its car ownership from two to one, and potentially to zero. But the current system is still stacked against the project, he said, noting that mortgage lenders worry about resale value of half-million-dollar homes that have no place for cars, and most zoning laws in the United States still require two parking spaces per residential unit. Quarry Village has obtained an exception from Hayward.
Besides, convincing people to give up their cars is often an uphill run. “People in the U.S. are incredibly suspicious of any idea where people are not going to own cars, or are going to own fewer,” said David Ceaser, co-founder of CarFree City USA, who said no car-free suburban project the size of Vauban had been successful in the United States.
In Europe, some governments are thinking on a national scale. In 2000, Britain began a comprehensive effort to reform planning, to discourage car use by requiring that new development be accessible by public transit.
“Development comprising jobs, shopping, leisure and services should not be designed and located on the assumption that the car will represent the only realistic means of access for the vast majority of people,” said PPG 13, the British government’s revolutionary 2001 planning document. Dozens of shopping malls, fast-food restaurants and housing compounds have been refused planning permits based on the new British regulations.
In Germany, a country that is home to Mercedes-Benz and the autobahn, life in a car-reduced place like Vauban has its own unusual gestalt. The town is long and relatively narrow, so that the tram into Freiburg is an easy walk from every home. Stores, restaurants, banks and schools are more interspersed among homes than they are in a typical suburb. Most residents, like Ms. Walter, have carts that they haul behind bicycles for shopping trips or children’s play dates.
For trips to stores like IKEA or the ski slopes, families buy cars together or use communal cars rented out by Vauban’s car-sharing club. Ms. Walter had previously lived — with a private car — in Freiburg as well as the United States.
“If you have one, you tend to use it,” she said. “Some people move in here and move out rather quickly — they miss the car next door.”
Vauban, the site of a former Nazi army base, was occupied by the French Army from the end of World War II until the reunification of Germany two decades ago. Because it was planned as a base, the grid was never meant to accommodate private car use: the “roads” were narrow passageways between barracks.
The original buildings have long since been torn down. The stylish row houses that replaced them are buildings of four or five stories, designed to reduce heat loss and maximize energy efficiency, and trimmed with exotic woods and elaborate balconies; free-standing homes are forbidden.
By nature, people who buy homes in Vauban are inclined to be green guinea pigs — indeed, more than half vote for the German Green Party. Still, many say it is the quality of life that keeps them here.
Henk Schulz, a scientist who on one afternoon last month was watching his three young children wander around Vauban, remembers his excitement at buying his first car. Now, he said, he is glad to be raising his children away from cars; he does not worry much about their safety in the street.
In the past few years, Vauban has become a well-known niche community, even if it has spawned few imitators in Germany. But whether the concept will work in California is an open question.
More than 100 would-be owners have signed up to buy in the Bay Area’s “car-reduced” Quarry Village, and Mr. Lewis is still looking for about $2 million in seed financing to get the project off the ground.
But if it doesn’t work, his backup proposal is to build a development on the same plot that permits unfettered car use. It would be called Village d’Italia.
http://www.nytimes.com/2009/05/12/science/earth/12suburb.html?_r=1&th&emc=th

Невидимка

Сергей Голубицкий , опубликовано в журнале "Бизнес-журнал" №4 от 07 Апреля 2009 года.

Слово meltdown¹, прибереженное в английском словаре на случай самых крайних неприятностей, сегодня как нельзя лучше описывает ситуацию, сложившуюся на финансовых и экономических рынках мира. Нет нужды живописать ужасы крушений паевых фондов и страдания банков, чьи логотипы еще недавно конкурировали по популярности с брэндами модных шмоток: Citigroup, Bank of America, Lehman Brothers — звездные имена, годами пребывавшие на устах даже самых молодых рекрутов общества тотального потребления. Гораздо интереснее окинуть взглядом экономические горизонты в поисках тех, кто плывет против течения, — компаний, которым удалось устоять под натиском беспощадного экономического meltdown.

Представьте себе, такие счастливчики в природе есть, причем их достаточно, чтобы говорить не только о гипотетическом, но и о вполне реальном противостоянии всеобщей экономической катастрофе. Сегодня мы познакомимся едва ли не с самым главным бенефициаром мирового кризиса, причем не периферийным, а самым, что называется, центровым.
Знакомьтесь — банк HSBC. Признайтесь теперь, положа руку на сердце: много слышали о таком? Конечно, если вы профессионал финансового рынка, то имя Гонконгско-Шанхайской банковской корпорации (именно так расшифровывается HSBC) звучит для вас весьма внушительно. Однако остальным нашим соотечественникам, далеким от финансов, это название говорит мало. А если уж быть до конца искренним — не говорит вообще ничего.
Это тем более удивительно, что HSBC — не просто еще один банк, не просто очередная британская корпорация, но еще и самый большой банк в мире, самая крупная в мире компания и самый дорогостоящий брэнд на финансовом рынке! 10 тысяч офисов в 86 странах мира, 210 тысяч акционеров, 330 тысяч сотрудников, 128 миллионов клиентов (!). Каково? Сегодня, когда практически все крупнейшие мировые банки уверенно впадают в кому, балансируют на грани банкротства и понуро бредут к властям с протянутой рукой, HSBC демонстрирует 2,35 триллиона долларов активов, 88 миллиардов дохода, 9,3 миллиарда долларов прибыли и, по словам генерального директора Майка Гейгана, еще и тенденцию к устойчивому росту.
Характерно, что поднялся HSBC отнюдь не на кризисе. Еще до кризиса на его фоне Citigroup смотрелся карликом: чистая доходность Citigroup (отчет за 2007 год, обнародованный в апреле 2008-го) — 3,62 млрд долларов, тогда как HSBC заработал 19,13 млрд. Теперь же сравнение проводить и вовсе бессмысленно. Убытки Citigroup в четвертом квартале 2008-го финансового года составили 8 млрд долларов, тогда как HSBC получил за тот же период 10 млрд прибыли.
Но даже при таком раскладе Citigroup знают все, а HSBC — лишь посвященные. Главная причина подобной застенчивости британского банка кроется в его генеалогии. А также географической ориентации бизнеса. Львиная доля операций осуществляется в странах Третьего мира — от Южной Америки до Юго-Восточной Азии (на эти регионы приходится более трех четвертей прибыли HSBC). Вопреки тому, что банк — британский, все его операционные центры находятся за пределами Туманного Альбиона и даже Европы.
Центр обработки данных, центр по обслуживанию клиентов, центр по разработке программного обеспечения (software engeneering) и прочее хозяйство HSBC разместил в индийских Хайдерабаде и Пуне, в китайском Гуаньчжоу и бразильском Куритибе. Остальные подразделения, ведающие клиентским обслуживанием (т. н. group service centers), квартируют в различных городах Индии, Китая, Малайзии, Шри-Ланки и на Филиппинах.
Логика, на которую делает ставку HSBC, очевидна. Перенося операционные центры в страны Третьего мира, банк радикально снижает свои расходы, что позволяет ему предоставлять финансовые услуги высшего качества по предельно конкурентным ценам. Доходит до смешного. Планируя экспансию на французском рынке розничных банковских услуг, HSBC готовит к открытию операционный центр… во Вьетнаме! Почему там? Да потому, что вьетнамцы отлично говорят по-французски (как-никак, бывшая колония) и при этом не требуют зарплат французского уровня. Вот он, шотландский деловой дух в действии!
Платой за столь расчетливую экономическую политику служит стойкая неприязнь, с которой к HSBC относятся на родине. Журналисты банк не любят. Будто чувствуют его инородность, а главное, загадочную непонятность. Потому-то при каждом удобном случае о нем и пишут всякие гадости. В течение всего 2006 года, пока HSBC находился на пике финансового успеха, общественность Англии смаковала историю Питера Льюиса, пожаловавшегося в британский трибунал по трудоустройству на HSBC за то, что банк якобы выгнал его с работы за гомосексуализм. Суд не обнаружил связи между увольнением и нездоровыми привычками истца, но все-таки констатировал sexual harassment, сексуальное притеснение, которому Льюиса якобы подвергали на рабочем месте.
С наступлением финансового кризиса обвинения в адрес HSBC приняли форму подозрительных намеков. Каким это образом банку удается оставаться на плаву, когда все прочие ускоренно идут ко дну (в первую очередь, конечно, имелся в виду королевский банк Шотландии²)? По всему видать, дело не чисто! Стоило HSBC заявить о сокращении доходности, как общественность сразу же заговорила о грядущем крахе, сокращении ликвидности и страшных потерях, которые не сегодня-завтра HSBC придется придать огласке. Стоит ли удивляться, что за такое отношение к себе HSBC платит в меру сил и возможностей: не создает рабочих мест на родине, разворачивая весь бизнес в странах Третьего мира?
А впрочем, не такая уж Британия и родина для HSBC. Да и само название банка — хорошее тому подтверждение. Полагаю, краткий экскурс в историю загадочного банка не только поможет разобраться в его «национальности», но и прояснит многие моменты в своеобразии деловой этики и принципов, которые HSBC неизменно исповедует вот уже 144 года.
Нетрудно догадаться по названию, что Гонконгско-Шанхайская банковская корпорация появилась на свет вдали от Туманного Альбиона. Однако же при самом прямом и непосредственном участии Империи, над которой никогда не заходит солнце. Шотландский суперинтендант компании The Peninsular and Oriental Steam Navigation Company Томас Сазерленд основал HSBC в Гонконге в 1865 году. Легенда гласит, что Сазерленду, который никогда в жизни не имел даже своего банковского счета, однажды на глаза попалась статья двадцатилетней давности об особенностях шотландского подхода к бизнесу: thrift, hard-work and a canny eye for business and investment³. 31-летнему Сазерленду показалось rather simple⁴ создать банк именно на таких принципах. Чем он, собственно, и занялся.
Роль Сазерленда в HSBC, по вполне понятным причинам, свелась к деятельности координатора. И случилось так, что деятельность эта оказалась тем бесценным звеном, которого давно не хватало для создания первого местного банка.

Всеми делами в Гонконге в период опиумных войн и непосредственно после их окончания заправляли так называемые «хонги» — торговые дома, стоявшие у истоков наркотического процветания Британской империи. Таковых было три — Jardine, Dent’s и Russell. По странному стечению обстоятельств, хонги находились под мощнейшим шотландским влиянием, что объяснялось не только происхождением их учредителей, но и всесилием Великой Материнской Ложи Шотландии (масонской). Шотландцем был и наместник главного морского перевозчика эпохи P&O Томас Сазерленд. Именно через Сазерленда проходили основные потоки товарооборота: оружие и амуниция с матушки-родины, чай, шелк и фарфор — в обратную сторону.
Фасадный этот товарооборот на деле являлся лишь прикрытием, потому что львиная доля всей деловой активности приходилась на опиум. Читатели «Бизнес-журнала» со стажем наверняка помнят о «Великой китайской торговой схеме», выпестованной в недрах Ост-индской компании: мак выращивали бенгальские крестьяне и сдавали коллекторам. Затем опиум перерабатывали в Индии и продавали частным предпринимателям, обладавшим специальным патентом. Предприниматели доставляли товар к китайскому побережью и складировали в плавучих пакгаузах, а затем тайно реализовывали китайским контрабандистам в обмен на серебро, которое частично использовалось для легальных закупок шелка, чая и фарфора. Кстати, Томас Сазерленд по совместительству являлся еще и соучредителем крупнейшего дока в Гонконге — Hong Kong and Whampoa Dock Company, на котором все это добро как раз и складировалось.
Слово «частично» применительно к серебру я употребил не случайно. Деньги не только шли на закупку товаров, но и просто аккумулировались. В колоссальных объемах. При этом хранились они в домашних «кубышках», поскольку никаких банков, которым можно было бы довериться, в округе не наблюдалось. Желание создать местный банк было огромным, однако внутренние противоречия и подозрительность, разделявшие троицу «хонгов» и предпринимателей из других весей (в первую очередь — американцев, немцев и голландцев), не позволяли добиться желаемого результата. Каждому казалось, что любая исходящая от конкурента инициатива закончится тем, что будущий банк станет обслуживать в первую очередь его собственные интересы.
Потому-то Томас Сазерленд и стал гениальным связующим звеном. Ведь он в силу своей должности стоял как бы в стороне и даже слегка над местными наркоторговцами: компания P&O обслуживала всех желающих без дискриминации, а значит, по сути своей уже выступала координатором. Складские помещения, корабли, фрахт, доставка груза «на большую землю» и обратно — сами понимаете. Кроме того, Томас был исключительно порядочным человеком, пользовался всеобщим доверием и безупречной репутацией. Поэтому ему не составило труда примирить враждующие кланы и создать первый местный банк, в совет учредителей которого вошли представители всех крупнейших торговых домов Гонконга и Шанхая.
HBSC явился на свет более чем вовремя: Томас Сазерленд в прямом смысле на несколько дней опередил Нила Портера, эмиссара могучего бомбейского Bank Of China⁵, вскоре прибывшего в Гонконг для учреждения местного филиала. Сазерленд грамотно апеллировал к смекалке гонконгских аборигенов: неужели вы хотите, чтобы вашими деньгами распоряжались какие-то дельцы из Индии? К тому же есть альтернатива — местный банк, созданный местными предпринимателями в интересах местного же бизнеса. Таковым и стал HSBC, поныне сохранивший провозглашенный тогда принцип «The World’s Local Bank»⁶. Эта надпись до сих пор украшает логотип компании.

Надеюсь, что экскурс в историю многое прояснил в корпоративной этике HSBC. Учрежденный вдали от метрополии банк хотя и сохранял самые тесные связи с центром, с первых же дней апеллировал исключительно к интересам своих местных учредителей. Причем делал это, свято соблюдая пресловутые «шотландские принципы»: осторожность, бережливость, осмотрительность, а также приоритет безопасности акционеров и учредителей над прибылью. Удивляться не приходится: задача выживания в опиумном бизнесе гораздо важнее лишней пригоршни долларов!
Если все же сохранились среди наших читателей скептики по отношению к теории «корпоративной генетики», определяющей судьбу компании, попробую еще раз склонить их на свою сторону с помощью весьма выразительной иллюстрации. Давайте посмотрим, как HSBC сумел уберечься от нынешней финансовой и экономической катастрофы, которая обожгла почти все мировые банки.
Обстоятельство это тем более поразительно, что HSBC в 2002 году купил Household International, крупнейшего в Америке торговца «мусорными кредитами» — нашими старыми знакомыми sub-prime loans. Мало того что Household был по уши загружен абсолютным неликвидом в виде долговой ипотеки клиентов, которым ранее было отказано в кредите в остальных банках, так он еще и снискал чудовищную репутацию кредитора-хищника! На Household International были поданы тысячи исков с обвинениями в predatory lending самого разнообразного характера. Эта одиозная компания была столь изобретательна в облапошивании и охмурении доверчивых обывателей, что я не удержался и подготовил для читателей отдельную статью из чисто дидактических побуждений. Надеюсь, опыт борьбы американской общественности с Household International убережет соотечественников от обмана при общении с нашими доморощенными адептами «нетрадиционных методов банковского кредитования» (об этом читайте на с. 60).
Критики и злопыхатели обвиняли HSBC: банк приобретает одиозный Household, чтобы адаптировать тактику охмурения клиентов в собственных филиалах, открытых в странах Третьего мира, прежде всего в Индии, Бразилии и Индонезии. Все это, разумеется, глупости завистников. HSBC купил американский Household International потому, что безупречное китайско-шотландское чутье подсказывало серьезные барыши. А дальше произошло вот что.
После приобретения Household International HSBC стал крупнейшим в мире держателем кредитов sub-prime. Первым делом HSBC добился прекращения судебных разбирательств, уплатив всем обиженным и недовольным отступные в размере 484 млн долларов. Следующий шаг: активы Household International были очищены от всех хитроумных форм кредитования (типа ставок с амортизацией). Осталась только традиционная ипотека с фиксированной ставкой кредита. Затем банк по мере сил и возможностей полностью избавился от «нью-йоркской ереси», то есть производных ценных бумаг, выписанных на ипотечные sub-prime, — всех этих MBS, CDO и CDS, которые в 2008 году переломили хребет Citigroup, Bank of America, Wachovia и Lehman Brothers. А скажите на милость: откуда HSBC знал о грядущем ужасе деривативного meltdown в 2006 году? То есть получается, что HSBC знал. А нью-йоркские банкиры — не знали. Или знали, но не испугались, а шотландский нюх подсказал Гонконгско-Шанхайской банковской корпорации необходимость сворачивать удочки?
Как бы то ни было, HSBC сумел вывести операции своего нового подразделения Household International на новые рубежи прибыльности таким образом, что еще до наступления первой волны массовых неплатежей по кредитам sub-prime удалось и покрыть судебные издержки, и заработать немножко на будущее.
Сегодня HSBC выглядит несопоставимо выигрышнее на фоне остальных банков. И в первую очередь потому, что над ним не висит Дамоклов меч срочности — неотъемлемой части любых деривативов.
«Плохие кредиты» на балансе HSBC не экспирируют, как экспирируют Collateralized Debt Obligations, выписанные на эти самые «плохие кредиты» и повисшие теперь на балансе Citigroup со товарищи! С самого начала HSBC сторонился всей этой нью-йоркской ереси с производными ценными бумагами, выписанными на ипотечный сабпрайм. Ереси, на которой поскользнулись Citigroup, Wachovia, Bank of America и все остальные нью-йоркские банкиры. А поскольку у HSBC нет деривативов, то нет и авральной спешки. Ведь только деривативы обладают срочностью, в отличие от самих кредитов, на которые эти деривативы были выписаны. Кредиты могут и подождать. Так что у HSBC нет нужды разорять своих горемычных клиентов и выставлять их дома на продажу по бросовым ценам.
В ситуации, когда банк не испытывает кризиса наличных денег и его — главное! — не поджимает время, можно просто подождать, переждать кризис, после чего либо восстановить поток кредитных платежей от должников, которые снова обрели платежеспособность, либо продать заложенные дома, но уже по нормальным рыночным ценам. Аналогичная логика лежит и в основании идеи «плохого банка», которую сегодня американские власти пытаются (весьма, надо сказать, своеобразно!) адаптировать из «шведской модели».
Сняв сливки на пике доходности в 2006 году, HSBC начал планомерно сворачивать весь бизнес sub-prime кредитования. На сегодня закрыто уже 1 400 филиалов Household International, на подходе еще 900. Оставшиеся на балансе «плохие кредиты» обошлись HSBC в 20 млрд долларов. При наихудшем раскладе придется потерять еще столько же. А теперь давайте вспомним, что HSBC даже в условиях кризиса сохраняет доходность, объявив на днях о годовой прибыли в 9,3 млрд долларов. Потому максимум, что грозит HSBC в случае, если придется объявить дефолт по всем американским «плохим кредитам» на балансе, так это лишиться дивидендов в ближайшие год-полтора.
На десерт — самое интересное. Накануне объявления в начале марта 2009-го результатов финансового года HSBC намекнула на возможность дополнительной эмиссии собственных долговых обязательств на сумму в 17 млрд долларов. Что тут началось! Британская и американская пресса дружно и радостно принялась потирать ладони: ну, наконец-то! Накрылся наш непотопляемый банк! Вот и его достал кризис! Выбросил, красавец, белый флаг! И он пошел с протянутой рукой. Чай, не лучше остальных!
Что тут скажешь? Sancta simpicitas! Достаточно беглого взгляда на годовую отчетность HSBC, чтобы удостовериться: лишние деньги для латания дыр и спасения самого себя банку не требуются. HSBC был и остался непотопляемым линкором в полном шоколаде. Для чего тогда допэмиссия? Так ведь очевидно же: деньги нужны HSBC для продолжения начавшейся еще несколько лет назад тотальной экспансии и поглощений привлекательнейших финансовых учреждений, которые разоряются на кризисе и выставляются на продажу в геометрической прогрессии! HSBC скупает все это добро в бешеном темпе и с колоссальным размахом. Вот и не хватает свободной наличности. На эти-то поглощения и пойдут 17 миллиардов, полученные по облигациям, которые инвесторы всего мира сочтут за честь скупить на корню в первый же день.
Не знаю, как вам, но мне доставляет удовольствие наблюдать за компанией, которая принадлежит к скромной и неприметной когорте, сумевшей не только уберечься от кризиса, но и извлечь из него колоссальную выгоду. Это обстоятельство лишний раз демонстрирует если уж не рукотворность, то, по крайней мере, избирательность этого самого кризиса, который официальные власти изо всех сил пытаются представить в виде системной катастрофы, а не тонкого расчета умных людей и примкнувшего к ним «шотландского духа»!

---

1 (англ.) «расплавление ядерных топливных элементов реактора, авария на АЭС». В переносном смысле — катастрофа, провал, полнейший облом.
2 Забавно, что в 1980 году HSBC предпринял попытку насильственного поглощения Royal Bank of Scotland, но британское правительство ему этого не позволило.
3 (англ.) «Бережливость, трудолюбие и осмотрительность при делах и вложениях».
4 (англ.) «В общем-то не сложно».
5 Да не смутит читателей причудливое сочетание — «Китайский Банк из Бомбея»: все это птенцы одного гнезда — Британской империи.
6 (англ.) «Местный банк для всего мира».

Swine Flu Was “Cultured In A Laboratory”

Editor’s note: On Friday, NPR reported that the deadly swine flu “combines genetic material from pigs, birds and humans in a way researchers have not seen before,” thus leading us to suspect it was cooked up in a lab.

Swine flu panic is spreading in Mexico and soldiers are patrolling the streets after it was confirmed that human to human transmission is occurring and that the virus is a brand new strain which is seemingly affecting young, healthy people the worst. Questions about the source of the outbreak are also being asked after a public health official said that the virus was “cultured in a laboratory”.

“This strain of swine influenza that’s been cultured in a laboratoryis something that’s not been seen anywhere actually in the United States and the world, so this is actually a new strain of influenza that’s been identified,” said Dr. John Carlo, Dallas Co. Medical Director (video clip here).

Was this a slip-up or an admission that this new super-strain of swine influenza was deliberately cultured in a laboratory and released?

Alarming reports are now filtering in about people catching the illness who have had no contact with pigs whatsoever. These include a man and his daughter in San Diego County, a 41-year-old woman in Imperial County and two teenagers in San Antonio, Texas. In fact, in all U.S. cases, the victims had no contact with any pigs.

Dr. Wilma Wooten, San Diego County’s public health officer, told KPBS “We have had person-to-person spread with the father and the daughter,” says Wooten, “And also with the two teenagers in Texas, they were in the same school. So that also indicates person-to-person transfer.”

“Dr. Wooten says it’s unclear how people were exposed to swine flu. She says none of the patients have had any contact with pigs,” according to the report.

Although the situation in the U.S. looks under control, panic is spreading in Mexico, where 800 cases of pneumonia in the capital alone are suspected to be related to the swine flu and the virus has hit young and healthy people, which is very rare with an flu outbreak. Despite the danger of a pandemic, the U.S. border with Mexico remains open.

“Mexico has shut schools and museums and canceled hundreds of public events in its sprawling, overcrowded capital of 20 million people to try to prevent further infections,” reports Reuters.

“My level of concern is significant,” said Dr. Martin Fenstersheib, the health officer for Santa Clara County. “We have a novel virus, a brand-new strain that’s spreading human to human, and we are also seeing a virulent strain in Mexico that seems to be related. We certainly have concerns for this escalating.”

The WHO insists that the outbreak has “pandemic potential” and has been stockpiling supplies of Tamiflu, known generically as oseltamivir, a pill that can both treat flu and prevent infection, according to officials.

As we previously highlighted, those that have a stake in the Tamiflu vaccine include top globalists and BIlderberg members like George Shultz, Lodewijk J.R. de Vink and former Secretary of Defense Donald Rumsfeld.

Indeed, Rumsfeld himself played a key role in hyping an outbreak of swine flu back in the 1976 when he urged the entire country to get vaccinated. Many batches of the vaccine were contaminated, resulting in hundreds of sick people and 52 fatalities.

The fact that the properties of the strain are completely new, that the virus is spreading from people to people, and that the young and healthy are being hit worst, has disturbing parallels to the deadly 1918 pandemic that killed millions.

It is unclear as to why, if the virus is a brand new strain, that public health officials are so confident programs of mass vaccination, which are already being prepared, would necessarily be effective.

It certainly wouldn’t be the first time that deadly flu viruses have been concocted in labs and then dispatched with the intention of creating a pandemic.

When the story first broke last month, Czech newspapers questioned if the shocking discovery of vaccines contaminated with the deadly avian flu virus which were distributed to 18 countries by the American company Baxter were part of a conspiracy to provoke a pandemic.

Since the probability of mixing a live virus biological weapon with vaccine material by accident is virtually impossible, this leaves no other explanation than that the contamination was a deliberate attempt to weaponize the H5N1 virus to its most potent extreme and distribute it via conventional flu vaccines to the population who would then infect others to a devastating degree as the disease went airborne.

However, this is not the first time that vaccine companies have been caught distributing vaccines contaminated with deadly viruses.

In 2006 it was revealed that Bayer Corporation had discovered that their injection drug, which was used by hemophiliacs, was contaminated with the HIV virus. Internal documents prove that after they positively knew that the drug was contaminated, they took it off the U.S. market only to dump it on the European, Asian and Latin American markets, knowingly exposing thousands, most of them children, to the live HIV virus. Government officials in France went to prison for allowing the drug to be distributed. The documents show that the FDA colluded with Bayer to cover-up the scandal and allowed the deadly drug to be distributed globally. No Bayer executives ever faced arrest or prosecution in the United States.

In the UK, a 2007 outbreak of foot and mouth disease that put Britain on high alert has been originated from a government laboratory which is shared with an American pharmaceutical company, mirroring the deadly outbreak of 2001, which was also deliberately released.

As we reported yesterday, last time there was a significant outbreak of a new form of swine flu in the U.S. it originated at the army base at Fort Dix, New Jersey.

Paul Joseph Watson is a frequent contributor to Global Research. Global Research Articles by Paul Joseph Watson

handbook 2009

Health:
1. Drink plenty of water.
2. Eat breakfast like a king, lunch like a prince and dinner like a beggar.
3. Eat more foods that grow on trees and plants and eat less food that is manufactured in plants.
4. Live with the 3 E's -- Energy, Enthusiasm, and Empathy.
5. Make time to practice meditation, yoga, and prayer.
6. Play more games.
7. Read more books than you did in 2008.
8. Sit in silence for at least 10 minutes each day.
9. Sleep for 7 hours.
10. Take a 10-30 minutes walk every day. And while you walk, smile.

Personality:
11. Don't compare your life to others'. You have no idea what their journey is all about.
12. Don't have negative thoughts or things you cannot control. Instead invest your energy in the positive present moment.
13. Don't over do. Keep your limits.
14. Don't take yourself so seriously. No one else does.
15. Don't waste your precious energy on gossip.
16. Dream more while you are awake.
17. Envy is a waste of time. You already have all you need.
18. Forget issues of the past. Don't remind your partner with his/ her mistakes of the past. That will ruin your present appiness.
19. Life is too short to waste time hating anyone. Don't hate others.
20.. Make peace with your past so it won't spoil the present.
21. No one is in charge of your happiness except you.
22. Realize that life is a school and you are here to learn. Problems are simply part of the curriculum that appear and fade away like algebra class but the lessons you learn will last a lifetime.
23. Smile and laugh more.
24. You don't have to win every argument. Agree to disagree.

Society:
25. Call your family often.
26. Each day give something good to others.
27. Forgive everyone for everything.
28. Spend time with people over the age of 70 & under the age of 6.
29. Try to make at least three people smile each day.
30. What other people think of you is none of your business.
31. Your job won't take care of you when you are sick. Your friends will. Stay in touch.

Life:
32. Do the right thing!
33. Get rid of anything that isn't useful, beautiful or joyful.
34. GOD heals everything.
35. However good or bad a situation is, it will change.
36. No matter how you feel, get up, dress up and show up.
37. The best is yet to come.
38. When you awake alive in the morning, thank GOD for it.
39. Your Inner most is always happy. So, be happy.

tankists march

1939 Red Army march

China Needs U.S. Guarantees for Treasuries

By Belinda Cao and Judy Chen

Feb. 11 (Bloomberg) -- China should seek guarantees that its $682 billion holdings of U.S. government debt won’t be eroded by “reckless policies,” said Yu Yongding, a former adviser to the central bank.
The U.S. “should make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way,” Yu, who now heads the World Economics and Politics Institute at the Chinese Academy of Social Sciences, said in response to e-mailed questions yesterday from Beijing. He declined to elaborate on the assurances needed by China, the biggest foreign holder of U.S. government debt.
Benchmark 10-year Treasury yields climbed above 3 percent this week on speculation the government will increase borrowing as President Barack Obama pushes his $838 billion stimulus package through Congress. Premier Wen Jiabao said last month his government’s strategy for investing would focus on safeguarding the value of China’s $1.95 trillion foreign reserves.
China may voice its concerns over U.S. government finances and the potential for a weaker dollar when Secretary of State Hillary Clinton visits China on Feb. 20, according to He Zhicheng, an economist at Agricultural Bank of China, the nation’s third-largest lender by assets. A People’s Bank of China official, who didn’t wish to be identified, declined to comment on the telephone.
Clinton Talks
“In talks with Clinton, China will ask for a guarantee that the U.S. will support the dollar’s exchange rate and make sure China’s dollar-denominated assets are safe,” said He in Beijing. “That would be one of the prerequisites for more purchases.”
Chinese Foreign Ministry Spokeswoman Jiang Yu said yesterday that talks with Clinton would cover bilateral relations, the financial crisis and international affairs, according to the Xinhua news agency.
U.S. government bonds returned 14 percent last year including price gains and reinvested interest, the most since rallying 18.5 percent in 1995, according to indexes compiled by Merrill Lynch & Co. Concern that the flood of bonds would overwhelm demand caused Treasuries to lose 3.08 percent in January, the steepest drop in almost five years, Merrill data show. The yield on the benchmark 10-year U.S. Treasury has risen to 2.80 percent from 2.21 percent at the end of last year.
Blackstone Loss
China’s loss of more than $5 billion from investing $10.5 billion of its reserves in New York-based Blackstone Group LP, Morgan Stanley and TPG Inc. since mid-2007 may increase its demand for the relative safety of Treasuries.
“The government will be a net buyer of Treasuries in the short term because there’s no sign they have changed their strategy,” said Zhang Ming, secretary general of international finance research center at the Chinese Academy of Social Sciences in Beijing. “But personally, I don’t think we should increase holdings because the medium- and long-term risks are quite high.”
Bill Gross, co-chief investment officer of Pacific Investment Management Co., said on Feb. 5 the Federal Reserve will have to buy Treasuries to curb yields as debt sales increase. U.S. central bank officials said Jan. 28 they were “prepared” to buy longer-term Treasuries.
“The biggest concern for China to continue buying U.S. Treasuries is that if Obama’s stimulus doesn’t work out as expected, the Fed may have to print money to cover the deficit,” said Shen Jianguang, a Hong Kong-based economist at China International Capital Corp., partly owned by Morgan Stanley. “That will cause a dollar slump and the U.S. government debt will lose its allure for being a safe haven for international investors.”
Currency Rese
rvesChina’s foreign-exchange reserves, the world’s biggest, grew about $40 billion in the fourth quarter, the smallest expansion since mid-2004 as an end to yuan appreciation since July prompted investors to pull money out.
The world’s third-biggest economy grew 6.8 percent in the fourth quarter, the slowest pace in seven years. Policy makers cut interest rates by the most in 11 years and announced a 4 trillion yuan ($585 billion) economic stimulus plan in November to spur domestic demand.
Yu said China won’t channel its reserves toward stimulating the economy because its trade surplus is sufficient to fund any import needs. China’s trade surplus was $39 billion in December, the second-largest on record.
A decline in reserves “isn’t likely because of China’s huge twin surpluses,” Yu said. China “should diversify its reserves away from U.S. Treasuries if the value of China’s foreign-exchange reserves is in danger of being inflated away by the U.S. government’s pump-priming,” he said.
Linking Disputes
China may try to link trade and currency policy disputes to its future investment in Treasuries, said Lu Zhengwei, an economist in Shanghai at Industrial Bank Co., a Chinese lender partly owned by a unit of HSBC Holdings Plc.
U.S. Treasury Secretary Timothy Geithner accused China on Jan. 22 of “manipulating” the yuan to give an unfair advantage to its exporters in the global market. The currency has dropped 0.16 percent since the start of this year to 6.8342 per dollar, following a 21 percent gain since a peg against the dollar was abandoned in July 2005.
“China can also use this opportunity to get a promise from the U.S. not to make inappropriate requests on bilateral trade and the Chinese yuan,” Lu said. “We can’t afford more yuan appreciation as the economy is facing a serious slowdown.”

The Ship of Death

David Herbert Lawrence (1885-1930)

Version 1

I

1Now it is autumn and the falling fruit

2and the long journey towards oblivion.

3The apples falling like great drops of dew

4to bruise themselves an exit from themselves.

5And it is time to go, to bid farewell

6to one's own self, and find an exit

7from the fallen self.

II

8Have you built your ship of death, O have you?

9O build your ship of death, for you will need it.

10The grim frost is at hand, when the apples will fall

11thick, almost thundrous, on the hardened earth.

12And death is on the air like a smell of ashes!

13Ah! can't you smell it?

14And in the bruised body, the frightened soul

15finds itself shrinking, wincing from the cold

16that blows upon it through the orifices.

III

17And can a man his own quietus make

18with a bare bodkin?

19With daggers, bodkins, bullets, man can make

20a bruise or break of exit for his life;

21but is that a quietus, O tell me, is it quietus?

22Surely not so! for how could murder, even self-murder

23ever a quietus make?

IV

24O let us talk of quiet that we know,

25that we can know, the deep and lovely quiet

26of a strong heart at peace!

27How can we this, our own quietus, make?

V

28Build then the ship of death, for you must take

29the longest journey, to oblivion.

30And die the death, the long and painful death

31that lies between the old self and the new.

32Already our bodies are fallen, bruised, badly bruised,

33already our souls are oozing through the exit

34of the cruel bruise.

35Already the dark and endless ocean of the end

36is washing in through the breaches of our wounds,

37Already the flood is upon us.

38Oh build your ship of death, your little ark

39and furnish it with food, with little cakes, and wine

40for the dark flight down oblivion.

VI

41Piecemeal the body dies, and the timid soul

42has her footing washed away, as the dark flood rises.

43We are dying, we are dying, we are all of us dying

44and nothing will stay the death-flood rising within us

45and soon it will rise on the world, on the outside world.

46We are dying, we are dying, piecemeal our bodies are dying

47and our strength leaves us,

48and our soul cowers naked in the dark rain over the flood,

49cowering in the last branches of the tree of our life.

VII

50We are dying, we are dying, so all we can do

51is now to be willing to die, and to build the ship

52of death to carry the soul on the longest journey.

53A little ship, with oars and food

54and little dishes, and all accoutrements

55fitting and ready for the departing soul.

56Now launch the small ship, now as the body dies

57and life departs, launch out, the fragile soul

58in the fragile ship of courage, the ark of faith

59with its store of food and little cooking pans

60and change of clothes,

61upon the flood's black waste

62upon the waters of the end

63upon the sea of death, where still we sail

64darkly, for we cannot steer, and have no port.

65There is no port, there is nowhere to go

66only the deepening blackness darkening still

67blacker upon the soundless, ungurgling flood

68darkness at one with darkness, up and down

69and sideways utterly dark, so there is no direction any more

70and the little ship is there; yet she is gone.

71She is not seen, for there is nothing to see her by.

72She is gone! gone! and yet

73somewhere she is there.

74Nowhere!

VIII

75And everything is gone, the body is gone

76completely under, gone, entirely gone.

77The upper darkness is heavy as the lower,

78between them the little ship

79is gone

80It is the end, it is oblivion.

IX

81And yet out of eternity a thread

82separates itself on the blackness,

83a horizontal thread

84that fumes a little with pallor upon the dark.

85Is it illusion? or does the pallor fume

86A little higher?

87Ah wait, wait, for there's the dawn

88the cruel dawn of coming back to life

89out of oblivion

90Wait, wait, the little ship

91drifting, beneath the deathly ashy grey

92of a flood-dawn.

93Wait, wait! even so, a flush of yellow

94and strangely, O chilled wan soul, a flush of rose.

95A flush of rose, and the whole thing starts again.

X

96The flood subsides, and the body, like a worn sea-shell

97emerges strange and lovely.

98And the little ship wings home, faltering and lapsing

99on the pink flood,

100and the frail soul steps out, into the house again

101filling the heart with peace.

102Swings the heart renewed with peace

103even of oblivion.

104Oh build your ship of death. Oh build it!

105for you will need it.

106For the voyage of oblivion awaits you.

Version 2 ('Ship of Death')

1I sing of autumn and the falling fruit

2and the long journey towards oblivion.

3The apples falling like great drops of dew

4to bruise themselves an exit from themselves.

5Have you built your ship of death, oh, have you?

6Build then your ship of death, for you will need it!

7Can man his own quietus make

8with a bare bodkin?

9With daggers, bodkins, bullets, man can make

10a bruise or break of exit for his life

11but is that a quietus, oh tell me, is it quietus?

12Quietus is the goal of the long journey

13the longest journey towards oblivion.

14Slips out the soul, invisible one, wrapped still

15in the white shirt of the mind's experiences

16and folded in the dark-red, unseen

17mantle of the boays still mortal memories.

18Frightened and alone, the soul slips out of the house

19or is pushed out

20to find himself on the crowded, and margins of existence.

21Oh, it is not so easy, I tell you it is not so easy

22to set softly forth on the longest journey, the longest journey.

23The margins, the grey beaches of shadow

24strewn with dim wreckage, and crowded with crying souls

25that lie outside the silvery walls of our body's builded city.

26It is easy to be pushed out of the silvery city of the body

27through any breach in the wall,

28thrust out on to the grey grey beaches of shadow

29the long marginal stretches of existence, crowded with lost souls

30that intervene between tower and the shaking sea of the beyond.

31Oh build your ship of death, oh build it in time

32and build it lovingly, and put it between the hands of your soul.

33Once outside the gate of the walled silvery life of days

34once outside, upon the grey marsh beaches, where lost souls moan

35in millions, unable to depart

36having no boat to launch upon the shaken, soundless

37deepest and longest of seas,

38once outside the gate

39what will you do, if you have no ship of the soul?

40Oh pity the dead that are dead, but cannot take

41the journey, still they moan and beat

42against the silvery adamant walls of this our exclusive existence.

43They moan and beat, they gnash, they rage

44they fall upon the new outcoming souls with rage

45and they send arrows of anger, bullets and bombs of frustration

46over the adamant walls of this, our by-no-means impregnable existence.

47Pity, oh pity the poor dead that are only ousted from life

48and crowd there on the grey mud beaches of the margins

49gaunt and horrible

50waiting, waiting till at last the ancient boatman with the common barge

51shall take them aboard, towards the great goal of oblivion.

52Pity the poor gaunt dead that cannot die

53into the distance with receding oars

54but must roam like outcast dogs on the margins of life,

55and think of them, and with the soul's deep sigh

56waft nearer to them the bark of delivery.

57But for myself, but for my soul, dear soul

58let me build a little ship with oars and food

59and little dishes, and all accoutrements

60dainty and ready for the departing soul.

61And put it between the hands of the trembling soul.

62So that when the hour comes, and the last door closes behind him

63he shall slip down the shores invisible

64between the half-visible hordes

65to where the furthest and the longest sea

66touches the margins of our life's existence

67with wincing unwilling waves.

68And launching there his little ship,

69wrapped in the dark-red mantle of the body's memories

70the little, slender soul sits swiftly down, and takes the oars

71and draws away, away, away, towards the dark depths

72fathomless deep ahead, far, far from the grey shores

73that fringe with shadow all this world's existence.

74Over the sea, over the farthest sea

75on the longest journey

76past the jutting rocks of shadow

77past the lurking, octopus arms of agonised memory

78past the strange whirlpools of remembered greed

79through the dead weed of a life-time's falsity,

80slow, slow my soul, in his little ship

81on the most soundless of all seas

82taking the longest journey.

83Pulling the long oars of a life-time's courage

84drinking the confident water from the little jug

85and eating the brave bread of a wholesome knowledge

86row, little soul, row on

87on the longest journey, towards the greatest goal

88Neither straight nor crooked, neither here nor there

89but shadows folded on deeper shadows

90and deeper, to a core of sheer oblivion

91like the convolutions of shadow-shell

92or deeper, like the foldings and involvings of a womb.

93Drift on, drift on, my soul, towards the most pure

94most dark oblivion.

95And at the penultimate porches, the dark-red mantle

96of the body's memories slips and is absorbed

97into the shell-like, womb-like convoluted shadow.

98And round the great final bend of unbroken dark

99the skirt of the spirit's experience has melted away

100the oars have gone from the boat, and the little dishes

101gone, gone, and the boat dissolves like pearl

102as the soul at last slips perfect into the goal, the core

103of sheer oblivion and of utter peace,

104the womb of silence in the living night.

105Ah peace, ah lovely peace, most lovely lapsing

106of this my soul into the plasm of peace.

107Oh lovely last, last lapse of death, into pure oblivion

108at the end of the longest journey

109peace, complete peace!

110But can it be that also it is procreation?

111Oh build your ship of death

112oh build it!

113Oh, nothing matters but the longest journey.

Notes

1.17] See Shakespeare's Hamlet III.i.69-32):

For who would bear the whips and scorns of time,
Th' oppressor's wrong, the proud man's contumely,
The pangs of despis'd love, the law's delay,
The insolence of office, and the spurns
That patient merit of th' unworthy takes,
When he himself might his quietus make
With a bare bodkin ...

2.23] Lines omitted in Last Poems and inserted by Vivian de Sola Pinto and F. Warren Roberts in their definitive Complete Poems (Penguin, 1993): 961, note on 1042. In doing so, they emend "that" (line 23) to "the".

---

Online text copyright © 2009, Ian Lancashire (the Department of English) and the University of Toronto.
Published by the Web Development Group, Information Technology Services, University of Toronto Libraries.

Original text: D. H. Lawrence, Last Poems, ed. Richard Aldington (London: Martin Secker, 1933): 60-64 (MS "A"), 173-77 (MS "B," dated Nov. 23, 1928). PR 6023 A93 A17 Robarts Library
First publication date: 1933
Publication date note: See Roberts A62
RPO poem editor: Ian Lancashire
RP edition: RPO 2000.
Recent editing: 4:2002/1/12

Composition date: 26 August 1929 - November 1929
Composition date note: See Ellis, 603

P.S. this was writtenby lawrence on his death bed,and its interesting to see the different takes taken by him between this poem and bavarian gentians which was written a year before.
in this particular poem he looks at death up close and personal and tries to make out what exactly it is that happens to you when you die.where is it that you go.the interesting aspect of the poem is that it deals with a topic that we all think about at some point,difference being that he is actually facing death when he questions it.
in part one he compare death to dew..implying that it happens to everyone but its very different when your the one facing it.he questions whether killing ones self could be a better way then facing this painful death when he says 'quietus'.but wonders whether that could actually give you peace.he plans not to fight death anymore but to prepare for all that lies ahead...
he tells himself and us that the body is a mere armour to the soul.we cannot contol our fate as we do not know what lies ahead.
in bavarian gentians again death is seen as the unknown darkness by him.he feels that the darkness that he is in has made him loose his was and control over life.he reaches a point where he is ready to die..however this does not happen...the moment passes him by and he has come 'out of oblivion',though he continues to drift towards death.
till the last line he pleads his reader to build there ship of death and be prepared for this inevitable that will come there way.
i myself feel (through personal experience)you can try to do this...but when you lose someone,no matter who...i don't think that death is something you can be ready for.it comes when it does...

A parrot's dance

Backstreet Boys - Everybody

A man who barely made it through a particularly brutal day in the market called his financial advisor the next day and asked: "May I please speak to Artie, my advisor?" The operator replied: "I'm sorry. Artie is deceased. Can anyone else help you?" The man said no and hung up.
Ten minutes later he called again and asked for Artie, his advisor. The operator said: "You just called a few minutes ago, didn't you? Artie died. I'm not making this up." The man hung up again.
Fifteen minutes later he called a third time and asked for Artie. By this time, the operator was fuming. "I've told you twice already. Artie is dead. He's not here! Why do you keep asking for him when I say he's dead?"
The man replied: "I just like hearing it."

THE STREETS OF REYKJAVIK HOT UP AS FINANCIAL MELTDOWN HITS ICELAND

“Even on TV and radio phone-ins callers are saying that maybe anarchy isn’t such a bad idea after all,” Siggi Pönk, lead vocalist of Icelandic punk band Dís explains, “people are saying capitalism in Iceland is dead, kill capitalism.”
The crisis facing the global economy is particularly acute in Iceland. Before the credit crunch Icelanders were, per capita, the world’s fifth richest population. According to the UN Iceland is the most developed country in the world (whatever that means). Unemployment and homelessness was virtually unknown; the island of just over 300,000 people was one of the greatest success stories of neo-liberalism. Now, precisely because of the Thatcher inspired ‘good years’, the odds are strong on it being the first ‘developed’ country to collapse into full economic depression.
So it’s fair to say that Icelanders are mildly angry. There’s been an upsurge in grassroots mobilisation as the scale of the damage to the economy has become apparent. Approximately 9,000 people (3% of the population) hit the streets in the last weekly anti-government-bank-billionaire demonstration. Open forums discussing the current situation are packed out - and politicians aren’t allowed through the door - unless they’re ordered to attend. New political groups are everywhere - 500 people even physically attacked Reykjavik’s main Police station and broke out a political prisoner. The collapse of capitalism in Iceland seems to have re-awakened the island’s traditional spirit of independence.
Precisely who caused this crash is the main unanswered question. What is perfectly clear is that it was the governments free market economic policy in the 80’s and 90’s which caused the nosedive. The Independence Party has ruled in every government since Iceland won it’s sovereignty in 1944. Now, for the first time, it has had to hire private bodyguards for it’s members, not least for Davíð Oddson (Mayor of Reykjavik 1982-1991; Prime Minister 1991-2005; Governor of Central Bank 2005-present), its most vigorous exponent of neo-liberal policies.
Unlike other Scandinavian countries, Iceland closely followed a Thatcherite route of privatising all its major industries and banks; slashing or abolishing corporate, inheritance, net wealth, income and company turnover taxes; signing National Accords (suicide pacts) with trade unions. The right-wing thinktank Economic Freedom of the World's annual survey rated Iceland 53rd of the 72 'free-est' (read deregulated) economies in 1975, while it was one of the poorest countries in Western Europe; by 2006 it had risen to be the 12th out of 141 and was amongst the richest on the planet. (Britain went from 23rd to 5th in the same period).
How does being 'economically free' translate into being ridiculously rich? Any fishmonger will tell you that no matter how many tax cuts you get, selling fish, Iceland’s main export, hardly makes you a millionaire. Instead their wealth came from debt. Icelandic bankers stuck their interest rates high so that foreign investors would leave their money with them. They then went on spending sprees across the world, especially in the UK and Denmark. Amongst the UK companies bought by the Icelandic Baugur group were Topshop, Debenhams, Iceland (the supermarket, for novelty value) and the biggest toy shop in Europe - Hamleys (well if you’re a billionaire you can’t just buy your kid an action man). Iceland’s glorious wealth however, was based on borrowed money.
Then the credit crunch bit the world, investors wanted their money back and it became blindingly obvious that the Icelandic bankers couldn’t pay. When all three of its main banks collapsed and were nationalised in the beginning of October (keeping most of the same management, of course), it was revealed that Iceland owed foreign investors $60 billion, 12 times their GDP! But, as these banks were now owned by the nation, it fell on the population as a whole, not the bankers and billionaires who’d taken out these loans, to repay. That’s a debt of about $100,000 per person! And of course, with foreign debts there’s interest and exchange rates to add on. The children of todays Icelanders will still be facing the hangover of the Good Years.
SLUMS GONE TO ICELAND

Out of the $11 billion package to ‘rescue’ its banks, the Icelandic government signed a $2.1 billion “International Monetary Foundation (IMF) conditionality agreement”. In Godfather like tones the IMF once described themselves as “the credit community’s enforcer.” Whereas the logic of investment is usually based on getting money for the risks you take, just like betting on Kazakhstan winning the World Cup would make you rich if they came through but would hit you in the face if they didn’t; the IMF guarantees that it will get its investment back regardless, like someone who bets on Kazakhstan and then points a gun at the bookie to demand their ‘winnings’ when they lose.
The IMF has ruined countless poorer countries with its debt-enforcement, forcing countries to repay loans by raising interest rates; increasing tax whilst reducing public spending; selling off public industries and property; removing restrictions on the movement of money; taking out more loans...and so on. In short it’ll be business as usual for the current Icelandic government, which is probably why their only comments on the conditions for the loan (there are always conditions to IMF loans) were that they wouldn’t have to do anything they wouldn’t have needed to do anyway. Meanwhile they raised interest rates to 18% - step one of the programme. With billions of pounds of British cash nestling in the now decimated Icelandic banks the government has frozen assets using anti-terrorism laws. The Icelandic government was distinctly unimpressed, but has bigger issues to deal with on the home front.
ICE BREAKER

The movement that’s erupted in response to all of this has some unifying demands. 1) Immediate elections - for individuals instead of parties. 2) The entire Icelandic elite be jailed and forced to pay their debts themselves. 3) The entire finance regulatory organisation be replaced, including Davið Oddson, now the most hated man in over a millennium of history. 4) That nobody should lose their home - after Christmas unemployment is predicted to jump to 7% and you can bet that under the gaze of the IMF the already inadequate benefits will be cut.
One shred of good news is that the last 15 years of ecological devastation on the island is grinding to a halt. There’s simply no money to build more mega-dams, geothermal energy plants and aluminum smelters, especially as the aluminum industry itself has gone belly up from the credit crisis.
On a recent demonstration someone climbed on top of the Icelandic parliament and hoisted the symbolic flag of the billionaire Baugur Group, a grinning fat pink piggybank - the logo of their supermarket Bónus. The idea being that Iceland’s recent and hard won parliament was nothing more than an office for the arrogant super-rich and so it should fly its own flag. But while on a university trip to Parliament two weeks later, the same protester was spotted by an MP who got him nicked and locked up for an action against the aluminum industry that he participated in two years ago.
Word spread and 500 people turned up outside the police station, at first demanding his release and then forcing their way in, lobbing stones at the building’s windows and ramming its doors down with poles. Police responded with teargas. Someone paid for his release because a giant group of riot cops were forming behind the station to attack supporters. Once out of nick, the protester gave a speech to the cheering crowd, shouting “Such unity and power that you were upholding in front of this station should not be focused on getting some punk out of a prison cell. I’d rather you used this energy to bring the government to their knees. Launch a complete and general and immediate revolution!”
All this, and yet, the effects of the crisis have yet to even set in…
link

The Upcoming Hedge Funds Crisis

Up to a fifth of managers in the $1.6 trillion (1.1 trillion pound) hedge fund industry are at risk of going out of business in the next two years, a Man Group strategist said on Wednesday.
Thomas Della Casa, head of the research, analysis & strategy group at Man Investments, told a briefing in Frankfurt one in 10 hedge funds tended to fold after a few years even in favourable market conditions.
"The number will go down from 10,000. In the next two years 2,000 (hedge funds) could perhaps disappear," he said.
Overall, hedge funds are on track for their third ever year of losses, based on industry data going back 18 years, Della Casa noted. Hedge funds last failed to earn money for their investors in 1998 and before that in 1994.
"Assets under management will remain relatively unchanged, we don't expect net inflows," Della Casa said about prospects for 2009. Many investors are likely to go on shunning risky assets, preferring to hoard cash for quite some time, he said.
"Every dollar parked on the sidelines and held as cash usually stays away from markets for about 12 months. We don't expect this liquidity to return any time soon.
"The beginning of 2009 will be hard. We will still see liquidations and fire sales," Della Casa said, referring to hedge funds and their assets, such as corporate bonds.
Yet such conditions could create buying opportunities, he said.
Credit was trading at $0.67-$0.68 to the dollar compared with a "normal" recovery value of $0.70, he said, adding Man Group saw "enormous opportunities here."
Man Group sees the global economic recession lasting at least between four and six quarters. With history as a yardstick, equity markets tend to bottom out half-way through a recession, Della Casa said.
Globally, investors withdrew $40 billion from hedge funds in October, leaving $1.56 trillion in assets under management, Chicago-based tracking firm Hedge Fund Research said on November 20.
October's redemptions exceeded the third quarter's net outflow of $31 billion as retail and institutional investors alike fled to the safety of cash after the collapse of U.S. investment bank Lehman Brothers Holding Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz).
London-based Man Group, the world's largest listed hedge fund group, said recently its assets under management dwindled to $61 billion by early November from $67.6 billion at the end of September, mainly due to the strengthening of the U.S. dollar.
Reuters

Could Tsys Be the Next Bubble?

By Dan Burrows

We may be through the looking glass here, people. Treasurys, the world's invincible vault of wealth and stability, are acting pretty weird these days. They're behaving like stocks, or at least how stocks used to behave.
Remember, Treasurys are debt instruments, not equities. They're supposed to be kind of boring and not terribly rewarding. But then what do you expect from Uncle Sam's big snuggly security blanket? After all, Treasurys are "riskless," right?
Well, yes and no. They simply can't default, the thinking goes, because the government actually owns the machine that prints money. So you lend the feds some cash, they guarantee your money back, and they throw in a little vigorish for your trouble. (Although those meager yields won't help much later when all this fed paper eventually fuels inflation.)
But we digress. No risk, no reward, whatever. When stocks go down, bonds go up. This time it's different. So much cash has poured into Treasurys that yields are scraping the deck. And bond prices? They're up, up and away. (Remember, when bonds trade, their prices and yields move in opposite directions.)
Which brings us to this: Has the world's panicked flight to safety become a mass exodus to insanity? Could Treasurys (gulp!) be the next bubble?
No doubt it has been a strong and long bull run for Treasurys. The total return generated by the Treasury market was 5.1% in November, making it the best month since 1981. Back then the yield on the 10-year note was 15%, wrote David Rosenberg, Merrill Lynch's North American economist. Ahem, but today the yield on the 10-year note is dabbling with, uh, 2.7%.
"What a great time it has been to have been long the Treasury market as we head into the home stretch of this massive bull market," Rosenberg wrote Nov. 28. "And to think that the asset class most despised and the most underowned in pension fund, household, commercial bank and mutual fund portfolios is the one generating the greatest returns."
It gets weirder. For the first time in 50 years the dividend yield on the S&P 500 index (it's 3.7%) rose above the interest rate on the 10-year note. Historically this ain't how it's supposed to go. Over the long haul stocks generate better returns than bonds, but bonds are less risky and supply a steady stream of fixed income. As one goes up, the other goes down, but to this degree, and in Treasurys, no less?
Here's some data that will make equity investors throw up in their mouths a little bit. The Dow Jones Industrial Average, S&P 500 index and Nasdaq Composite index have bled out 35%, 40% and 45%, respectively, year-to-date. Now take a look at the total returns generated by various U.S. Treasury indexes.
It's almost too good to be true, as Merrill Lynch's Rosenberg was careful to point out. "Investors should understand that while we maintain a constructive posture, Treasurys have moved into overvalued territory," he wrote.
Not that it has to end anytime to soon. Helicopter Ben is circling his Huey, firing cash down around the perimeter of a hot LZ. Meanwhile, down on the ground, sheer and ongoing financial terror is enveloping the globe.
Almost perversely, that's great news. It means this overvalued condition is likely to persist, Rosenberg says, "as the Fed, households and institutional investors emerge as large-scale buyers, even as foreign central banks pull back."
Ugh. This scenario seems spooky and familiar. Are Treasurys setting up for that classic mania-turn-to-bubble phase we've seen too often and too recently? Tech stocks in 2000. Real estate in 2006. Once the general public crowds itself 10 deep at the craps table, it might be time to take some winnings off the table.
SMARTMONEY.COM