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Wednesday, October 26, 2011

Mount Hermon - Roswell connection

The 18 Cities Where Home Prices Continue To Fall

The Case-Shiller housing price numbers for August came in worse than expected but still better than last month's spiraling decline.
Detroit has emerged as the sole winner in this grim housing report, and Washington, D.C. barely made it over the flatline.
See individual charts:
The Case-Shiller Index is the leading measure of the U.S. residential housing market, tracking changes in the value of residential real estate nationally as well as in 20 individual cities. It is calculated from data on repeat sales of single-family homes and is released on the last Tuesday of the month.

Read more: http://www.businessinsider.com/case-shiller-charts-august-2011-10?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheMoneyGame+%28The+Money+Game%29&utm_content=Google+Reader#ixzz1bu4VFXjM

Experts Call Attention to Possible Solar Katrina

Picture the devastation wrought by Hurricane Katrina. Now imagine that simultaneously hitting 100 American cities. That’s the threat severe solar weather poses to the United States, according to Dr. Richard Andres, a senior fellow at the Institute for National Strategic Studies at the National Defense University (NDU)

Andres joined a diverse mix of scientists, engineers, and politicians on Capitol Hill on Thursday to warn the public that the United States is woefully unprepared for the possibility that an electromagnetic pulse (EMP) triggered by a solar storm could knock down the national electrical grid with potentially catastrophic cascading effects.

The conference, hosted by NDU and the Maryland Emergency Management Agency, came at the tail end of table-top exercises organized in Maryland and Washington, D.C., to determine how first responders would react to a catastrophic solar storm that fried the electrical grid. The idea behind the conference and table-top exercises, said Andres, was to get solar experts, utility representatives, and first responders in the same room to understand the problem and begin to prepare and hopefully mitigate the threat before a solar storm occurs.

The threat arises from solar flares that erupt on the sun when it is facing the Earth. The resulting blast of energy can disrupt our planet’s magnetic field, which, if large enough, could overwhelm high-voltage transformers and cause them to fail.

Ironically, it’s the sun, not rogue nations detonating nuclear devices over the United States, that is the greatest EMP threat to plunging the United States back into the 19th century, according to Dr. Alenka Brown, senior research fellow at NDU’s Center for Technology and National Security Policy, who moderated the conference and sat in on the week’s table-top exercises.

(For more information on space weather, visit the National Weather Service's Space Weather Prediction Center.)

The biggest debate continues to be the probability of the “big one,” Brown said. But she stressed that the debate isn’t if it will happen but when and how bad it will be, she told Security Management. It’s that certainty that separates the solar threat from the rogue nuclear device threat, she said, which is why the conference limited its attention to solar weather.

Over the last 150 years, two large solar storms have struck the United States in 1859 and 1921. But that was before the country became “electrified,” and no one really knows what damage a solar superstorm like 1859 would cause among the U.S.’s interdependent and complex critical infrastructure systems, which have a single point of failure: electricity.

“We have done nothing but change the physics to greatly escalate our vulnerability unknowingly and I would argue that we are facing an unrecognized systemic risk, an engineering disaster in the making,” said John Kappenman, owner of Storm Analysis Consultants and an investigator for the Congressional Commission to Assess the Threat to the United States from Electromagnetic Pulse.

(In an interview with Wired.com in 2009, Kappenman discussed cost-effective solutions to protect high-voltage transfomers from soalr EMPs.)

Regardless of whether a geomagnetic storm hits two years from now or 20 years from now, speakers stressed that the United States should have already begun preparing for its likelihood.

“My concern is that the nation has not begun to respond to such an event,” said Dave Hunt, director of CRA, Inc., which specializes in emergency management and homeland security consulting. “The capacity for our response system nationally is not able to support the nation’s needs. Additionally our levels of personal preparedness are not adequate to keep us from quickly turning to the government as the solution.”

Security Management

Berlusconi's coalition closer to breaking point

Berlusconi's coalition government edged closer to breaking up, as the Italian prime minister struggled to draw up a list of economic reforms he hopes will satisfy EU leaders tackling the continent's debt crisis.

The list of planned measures – details of which were under wraps on Tuesday evening – falls short of the government decree packed with economic stimulus measures that Berlusconi has tried in vain to pass over recent weeks in the face of an increasingly fractious cabinet.

Berlusconi is expected to present the list in Brussels on Wednesday as markets increasingly focus on debt ridden Italy as the next weak link in the eurozone.

The prime minister spent Monday night and Tuesday wrangling with the Northern League party, on which his slim parliamentary majority depends, over its refusal to back a key plan: raising Italy's pension age from 65 to 67.

Cabinet members suggested on Monday that League leader Umberto Bossi had been coaxed into a compromised deal, but Bossi said the division between the League and Berlusconi had left him "pessimistic" about the government's chances of surviving.

"You cannot touch pensions to please the Germans," he said.

Should the government now fall, Bossi said he would not accept a temporary technical government made up of experts and appointed by the Italian president, which many have predicted. "We don't do technical governments," he said. "If the government falls you have definitely got to have elections."

Bossi has hitherto stayed loyal to Berlusconi, despite the prime minister's sex scandals, trials and sagging popularity, but his proximity to the premier has lost him credibility among northern Italian voters who support the devolutionist League.

As League officials held hurried meetings on Tuesday to decide whether to back Berlusconi or not, observers recalled how it was Bossi who walked out of Berlusconi's first government in 1994, leaving it to collapse.

In Brussels Berlusconi can expect a tough reception from EU leaders who have demanded he show up with real reforms able to kickstart the moribund Italian economy and help bring down Italy's €1.8tn debt.

The Guardian

'US of Europe total disgrace, collapsing as we speak'

All eyes on expansion of European bailout

The financial world is today holding its breath as Europe's attempt to avoid a full-blown economic crisis reaches a crunch point.

After repeatedly failing to address debt woes, European leaders will gather in Brussels to finalise a ''comprehensive strategy'' for containing the crisis.

Markets are desperately hoping the 17 leaders of euro-zone nations can put their squabbling to one side, amid a damaging plunge in confidence that threatens to derail the global economy.

Investors want the leaders to announce a deal between Greece and its bankers and to expand the region's €440 billion bailout fund so it can handle far more distressed debt.

But success is far from certain and the stakes could hardly be higher. Failure to reach a credible agreement is likely to spark further volatility on markets, and could ultimately threaten the future of the euro zone.

A sudden turn for the worse in Europe also threatens economies in Australia's region.

The Minister for Foreign Affairs, Kevin Rudd, yesterday said the crisis had reached a ''critical stage'', and any fallout could have ''major global repercussions from which few economies would be immune''.

''What Europe does now affects not just its 27 member states. It affects all 193 member states of the global economy,'' Mr Rudd said in Perth.

''And it affects us in the Asia-Pacific region, where continued economic growth and stability go hand in hand.''

Earlier this week, the French President, Nicolas Sarkozy, reportedly told the British Prime Minister, David Cameron: ''We're sick of you criticising us and telling us what to do.''

Mr Sarkozy and Germany's Chancellor, Angela Merkel, have also attacked the Italian Prime Minister, Silvio Berlusconi, over his efforts to get debt under control.

Amid these tensions, the deputy governor of the Reserve Bank, Ric Battellino, yesterday said the situation in Europe was ''particularly disturbing''.

It had helped lower world economic growth this year, taking the edge off inflation, he said.

In a sign the slowdown could result in a Melbourne Cup day rate cut, Mr Battellino said there was ''scope for monetary policy to be supportive of economic activity, if needed''.

But although many households would welcome a rate cut, the consequences of a severe crisis in Europe could overshadow the ''good news'' of lower rates.

The chief currency strategist at Westpac, Robert Rennie, said failure to reassure financial markets would almost certainly plunge Europe into recession, with ''very uncomfortable'' consequences for the world economy.

Read more: http://www.smh.com.au/business/all-eyes-on-expansion-of-european-bailout-20111025-1mi93.html#ixzz1bu203OtY

EU rescue plans hostage to raw politics

Italy's coalition was scrambling to head off collapse late on Tuesday after deep rifts on austerity measures dictated by Brussels for a Wednesday deadline, when EU leaders reconvene for yet another crisis summit.

"I remain pessimistic," said Umberto Bossi, Northern League leader and key ally of premier Silvio Berlusconi, who had warned earlier in the day that the government was in danger of collapse.

Mr Bossi said his party had offered a compromise on fresh austerity but could not accept EU demands for a rapid rise in the retirement age to 67. "The people would kill us," he said. The pension reform is the EU's tacit condition for intervention to shore up Italy's bond markets.

Silvio Peruzzo from RBS said the Italian government is likely to "implode" before its mandate ends, risking "an ever more severe deterioration of the crisis in Europe".

The warning came as French President Nicolas Sarkozy told an Élysée breakfast meeting held behind closed doors that "Europe has never been so close to explosion".

MORE: http://www.telegraph.co.uk/finance/financialcrisis/8849328/EU-rescue-plans-hostage-to-raw-politics.html

The Telegraph

HSBC: Euro Meltdown to Spark Another Great Depression

Northern Europe must share the burden with southern Europe or face a "monumental economic failure," writes Stephen King, global chief economist for HSBC in The Independent.

They should share the burden because they are partly to blame for the crisis for lending so much to southern countries. If they don't, a euro meltdown will pave the way for another Great Depression.

"The creditors chose to blame those in the south for having borrowed too much," King writes. "Yet, it was at least as much a story about the creditors having lent too much."

Past interest rate trends prove this point, he argues. If borrowers wanted to persuade lenders to lend them more money, interest rates would have increased. However, if lenders wanted to convince borrowers to borrow more money rates would have fallen.

Interest rates fell lower and lower until the 2008 financial crises, King notes. "For much of the euro's life, the story has been much more about the generosity of lenders than the desperation of borrowers."

If the euro disintegrates, massive financial anarchy could throw the world into another Great Depression, he warns. The northern creditors will suffer as much as anyone else. So Germany and France must take political risk to find a solution rather than risk a complete economic failure.

Besides being unfair, austerity measures are not working, King argues.

Economist Paul Krugman, writing in his column for The New York Times, agreed that austerity measures are a mistake. Instead of helping countries like Greece repay their debts, cutting public spending increases unemployment and makes their economies worse.

A better solution is to stoke inflation in Germany and other stronger countries, Krugman argues. That would help debtor countries cut their prices and costs relative to strong nations with higher inflation.

After the euro was introduced, German exports went through the roof, King writes. Germans happened to make goods that others wanted and they controlled their labor costs. Instead of buying goods from other countries, which would have controlled their trade balance, Germans saved the income, causing their trade surplus to soar. Those savings needed some where to go, and much of it was lent to southern European countries.

Many Germans think everything would be fine if others should follow their example.

"While it's a familiar lament, it is also economically illiterate," King explains. "For every German trade surplus, there has to be an offsetting deficit elsewhere in the world."

Contrary to common belief, trade surpluses don't necessarily indicate competiveness, he asserts. Actually, trade surpluses are created by an imbalance between savings and investment.

Read more: HSBC: Euro Meltdown to Spark Another Great Depression
Important: Can you afford to Retire? Shocking Poll Results

Barack Obama vows to bypass congress over economy

BARACK Obama has vowed to issue executive orders from the White House bypassing congress wherever possible as he tries to kick-start the ailing US economy.
The US President's threat yesterday marks a new phase in his stand-off with Republican opponents in the Senate, who have so far blocked his $US447 billion ($427bn) jobs revival plan.

The Australian

Eurozone debt crisis: Angela Merkel rejects rescue deal

As Germany raised fresh objections to the proposed rescue deal for indebted eurozone countries, the International Monetary Fund signalled it was considering stepping in - a move that could lead to British taxpayers paying to support the single currency.

Amid mounting Coalition tensions over Europe between the Conservatives and Liberal Democrats, David Cameron will today travel to Brussels, where European Union leaders have promised to hammer out a deal to resolve Europe’s debt crisis.

But officials admitted last night that many of the details of any deal will not be resolved tonight and will have to wait for another meeting of EUfinance ministers at the weekend.

The gloomy outlook worried financial markets. The FTSE 100 index closed down at 5525, and shares in Germany, France and the US all fell.

The single currency rescue effort was left hanging in the balance last night as Germany and Italy both challenged aspects of the likely deal.

EU leaders have said a summit tonight will outline plans to cut Greece’s crippling debt burden and expand a bail-out fund meant to support larger EU economies such as Italy and Spain.

Yet leaders last night appeared to be little closer to settling their long-standing differences on those issues.

The biggest row centres on the role of the European Central Bank in bailing out struggling eurozone economies.

A draft agreement circulated among leaders yesterday suggested that the ECB should go on buying the bonds of troubled members, effectively lending money to them directly.

The ECB’s bond-buying programme is unpopular in Germany, where critics fear it will compromise the central bank’s independence and its ability to control inflation.

Angela Merkel, the German chancellor who is facing fierce domestic opposition to the rescue deal, yesterday publicly rejected the draft as “not acceptable to Germany”.

The German parliament will today vote on a motion that would tell the ECB to stop its bond-buying programme.

Meanwhile, there were fears that the Italian government of Silvio Berlusconi could collapse over a dispute about austerity measures demanded by other EU governments.

In exchange for supporting Italy’s bonds, the EU has told Italy to increase its retirement age.

The Northern League, Mr Berlusconi’s junior coalition partners, oppose the plan. The party’s leader, Umberto Bossi, yesterday suggested the government could fall over issue and said he was “pessimistic” about its survival.

In Brussels, the European Commission insisted that Mr Berlusconi must do more to balance his country’s budget. Italy still needs to back up Mr Berlusconi’s promises with “specific actions” taken with “clear timing,” the commission said.

The summit tonight is also intended to agree on ways to boost the financial power of bail-out funds meant to underwrite governments in Italy and Spain if they struggle to raise money on international markets. One option is a Special Investment Vehicle, a fund that raises money from investors including wealthy governments and the IMF.

Eurozone attempts to cut the Greek debt burden also appeared to be making little progress, though the Greek government expressed hopes that the summit will announce that bond-holders will lose 50 per cent of their stakes.

Sir Mervyn King, the Governor of the Bank of England, suggested the EU leaders’ emergency measures can buy time but cannot resolve the fundamental threats to European economic stability.

The telegraph

Occupy Oakland Crackdown

Cameron Arrives For Key Euro Debt Summit

Sky's business correspondent Alistair Bunkall said: "The postponement of the EU Finance Ministers' meeting is being downplayed by governments.
"But it doesn't look good when you consider that it was the meeting intended to thrash out the detail to leave the leaders free to concentrate on the broader aspects.
"It puts into serious doubt, the potential for an agreement today."
This year alone, EU heads of government have met 20 times as countries like Greece, Italy and Spain struggle with huge debt and low growth.
The leaders of the richest countries in the 17-member eurozone, France and Germany, are still arguing over how best to calm jittery markets and ensure the contagion does not spread to the banking sector.
Protesters hold a banner in front of the Parthenonon, Athens
Greek debt was the catalyst for wider eurozone problems
Banks hold billions in government bonds, and there are concerns that a default by a country such as Greece could trigger a financial crisis similar to that which followed the collapse of Lehman Brothers in September 2008.
The European Council summit will focus on three main pillars: reducing the amount Greece owes to banks and investors, beefing up the bailout fund and pumping more cash into the banks to give them a cushion of capital.
France and Germany disagree over how the bailout fund, called the European Financial Stability Facility (EFSF) should be given more firepower.
Paris wanted to leverage the 440bn euro in the fund by harnessing it to the firepower of the European Central Bank(ECB), but Germany wants the Frankfurt-based ECB to remain independent.
The banks are saying: 'If you do this it is going to be a formal default and the contagion effects will be felt around the eurozone.
Wall Street Journal's Stephen Fiddler
It is likely the leaders will explore ways of allowing the EFSF to insure bondholders from some losses, while creating a "fund within a fund" to allow foreign investors to dabble in the so-called secondary bond markets.
As for Greek debts, banks and investors could be asked to swallow write-downs of up to 60%, much larger than the 21% deemed sufficient in July.
"The banks are saying: 'That's too much. If you do this it is going to be a formal default and the contagion effects will be felt around the eurozone'," the Wall Street Journal's Stephen Fidler said.
But the banks may have little choice, nor will they be able to resist demands to raise more capital to increase security in the system; a total of 108bn euro is being mooted.
Silvio Berlusconi
Italy's Silvio Berlusconi is under immense pressure from the markets
A draft statement which will feed into Wednesday's meeting states the importance of bank recapitalisation.
It says "There is broad agreement on requiring a significantly higher capital ratio of 9% of highest quality capital and after accounting for market valuation of sovereign debt exposures..to create a temporary buffer."
German Chancellor Angela Merkel tested her plans for the EFSF at the Bundestag before the full summit, securing parliament's backing to strengthen the fund.
The vote will potentially give her more sway in the summit negotiations.
Mrs Merkel and French President Nicolas Sarkozy had also demanded that Silvio Berlusconi present firm plans to promote growth and reduce Italy's massive debt in time for Wednesday's meeting.
However, Sky Italia are reporting that its package of austerity measures has been rejected as insufficient by European leaders.
But it appears the broad structure of the rescue package is in place, as separate meetings of foreign ministers from the eurozone countries and from the entire union have been delayed until after the summit.
That could mean more flesh will be put on the bones of any subsequent statement later in the week, perhaps staggering the effects on the markets.