A statement of reality from Quartz:
This land is not your land
- Pete Seeger died in an America with record inequality
BBC News sounds a belated theme:
State of the Union: Obama promises action on inequality
- US President Barack Obama: “Whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do”
US President Barack Obama has promised to bypass a fractured Congress to tackle economic inequality in his annual State of the Union address.
He pledged to “take steps without legislation” wherever possible, announcing a rise in the minimum wage for new federal contract staff.
On Iran, he said he would veto any new sanctions that risked derailing talks.
Bloomberg Businessweek chills out:
Frozen Northeast Getting Gouged by Natural Gas Prices
As temperatures plunge anew into single digits across much of the U.S. Northeast, natural gas prices have been going in the opposite direction. On Jan. 22, thermostats in New York City bottomed out at 7 degrees, a day after the price to deliver natural gas into the city spiked to a record $120 per million British Thermal Units in the spot market on the outskirts of town. That’s about 30 times more expensive than what the equivalent amount of gas cost a hundred miles away in Pennsylvania’s Marcellus Shale, the biggest natural gas field in the U.S. and home to some of the lowest gas prices in the world. And you thought this was the age of cheap energy.
Most of the natural gas that gets used in the U.S. is contracted on a long-term basis and bought with futures and forward contracts, meaning that many consumers in the Northeast won’t feel the full brunt of that price spike. They’re not entirely insulated though. The spot market is there for a reason. Essentially, it’s a refuge for the desperate and unprepared—for those who need to buy or sell immediately. And when a natural gas-fired power plant or a big utility finds itself short, having underestimated the amount of demand it has to fill, its traders and schedulers have to jump into the spot market and pay whatever the going price is. For those buying in parts of the Northeast, it’s been reaching new highs.
PandoDaily exerts plutocratic pressure:
The Techtopus: How Silicon Valley’s most celebrated CEOs conspired to drive down 100,000 tech engineers’ wages
In early 2005, as demand for Silicon Valley engineers began booming, Apple’s Steve Jobs sealed a secret and illegal pact with Google’s Eric Schmidt to artificially push their workers wages lower by agreeing not to recruit each other’s employees, sharing wage scale information, and punishing violators. On February 27, 2005, Bill Campbell, a member of Apple’s board of directors and senior advisor to Google, emailed Jobs to confirm that Eric Schmidt “got directly involved and firmly stopped all efforts to recruit anyone from Apple.”
Later that year, Schmidt instructed his Sr VP for Business Operation Shona Brown to keep the pact a secret and only share information “verbally, since I don’t want to create a paper trail over which we can be sued later?”
These secret conversations and agreements between some of the biggest names in Silicon Valley were first exposed in a Department of Justice antitrust investigation launched by the Obama Administration in 2010. That DOJ suit became the basis of a class action lawsuit filed on behalf of over 100,000 tech employees whose wages were artificially lowered — an estimated $9 billion effectively stolen by the high-flying companies from their workers to pad company earnings — in the second half of the 2000s. Last week, the 9th Circuit Court of Appeals denied attempts by Apple, Google, Intel, and Adobe to have the lawsuit tossed, and gave final approval for the class action suit to go forward. A jury trial date has been set for May 27 in San Jose, before US District Court judge Lucy Koh, who presided over the Samsung-Apple patent suit.
The London Telegraph constricts:
Emerging markets forced to tighten by US and Chinese monetary superpowers
- The global chain reaction resembles what happened in the East Asia crisis in 1997-1998 when domino effects swept the region
Turkey, India, Brazil and a string of emerging market countries are being forced tighten monetary policy to halt capital flight despite crumbling growth, raising the risk of a vicious circle as debt problems mount.
Turkey’s central bank on Tuesday night hiked interest rates to 12pc from 7.75pc at an emergency meeting in a bid to defend its currency. The lira strengthened to 2.18 against the dollar after the decision, from 2.25.
The move came as India raised rates a quarter-point to 8pc to choke off inflation and shore up confidence in the battered rupee, the third rate rise since Raghuram Rajan took off in September. South Africa’s central bank is meeting on Wednesday as the rand hovers near a record low at 11.06 to the dollar.
More from Nikkei Asian Review:
Inflation-wary emerging economies go for rate hikes
Fighting inflation has become a new mantra for emerging economies like India, Brazil, Turkey and Indonesia as U.S. moves to curtail quantitative easing help weaken their currencies, pushing up the cost of imported goods in these countries. . .
Weak local currencies are setting off inflation. Drops in currency value translate to costlier imports, driving consumer prices in general higher. Speculation that the U.S. would scale down its ultra-easy monetary policy triggered an exodus of money from emerging economies. In particular, currencies of nations with current-account deficits came under selling pressure in the market. The Brazilian real, the Indian rupee, the Indonesian rupiah, the South African rand and the Turkish lira are dubbed the Fragile Five.
Xinhua charts an uptick with mixed results:
Global foreign direct investment rises to pre-crisis levels, UN reports
Global foreign direct investment (FDI) rose to levels not seen since the start of the global economic crisis in 2008, increasing by 11 percent in 2013 to an estimated 1.46 trillion U.S. dollars, with the lion’s share going to developing countries, said a UN report released on Tuesday.
FDI flows to developing economies reached a new high of 759 billion dollars, accounting for 52 percent, and transition economies also recorded a new high of 126 billion dollars, 45 percent up from the previous year and accounting for 9 percent of the global total, showed the figures provided by the UN Conference on Trade and Development.
But developed countries remained at a historical low, or 39 percent, for the second consecutive year. They increased by 12 percent to 576 billion dollars, but only to 44 percent of their peak value in 2007, with FDI to the European Union (EU) increasing, while flows to the United States continued their decline.
Global unemployment is about to get worse
While the rich countries were most affected by the global economic crisis, there are signs of recovery. Although India and China won’t go back to the days of double-digit growth, other emerging countries, especially in Sub-Saharan Africa, paint a more hopeful picture. But the scale of the recovery won’t help the unemployed much, whose numbers are only set to be growing.
In 2013, the unemployed grew by 5 million to 202 million people globally. According to a new report published by the International Labour Organisation (ILO), this number is set to grow by a further 13 million by 2018, even if the rate of underemployment remains same. In countries such as Greece and Spain, the average duration of unemployment has reached nearly nine months.
The ILO’s worries are threefold. First, the recovery is not strong enough to reduce the growing number of unemployed. Second, the fundamental causes of the global economic crisis are yet to be properly tackled. Third, the crisis has forced even those employed into more vulnerable jobs.
ANSAmed has numbers:
Crisis, Lagarde sounds the alarm: 20 mln unemployed in EU
- IMF director, in Italy and Portugal 1/3 under 25 jobless
The managing director of the International Monetary Fund (IMF) Christine Lagarde has sounded the alarm on record unemployment levels in Europe where almost 20 million are jobless.
‘We cannot say the crisis is over until its impact on the labor market has not reversed’, said Lagarde. When unemployment is high, growth is slow because people spend less and companies invest and hire less, Lagarde also noted, stressing that the most effective way to boost employment is growth.
According to a number of estimates, a growth increase by one percentage point in advanced economies would cut unemployment levels by half a percentage point, giving work to 4 million people.
More from Bloomberg:
Euro Jobless Record Not Whole Story as Italians Give Up
Euro-area data this week will probably show the region ended 2013 with a record jobless rate that reveals only part of the social legacy of the debt crisis.
While economists predict unemployment in December stayed at an all-time high of 12.1 percent, with about 19 million jobless, that tally excludes legions of adults who would also work if they could. Bloomberg calculations for the third quarter show a wider total of 31.2 million people of all ages are either looking for jobs, willing to do so though unavailable, or else have given up.
Giuseppe Di Gilio, 30, is one of 4.2 million such people who don’t appear in Italy’s unemployment statistics. The most recent so-called labor underutilization rate in the third-biggest economy in the euro area was 24 percent, more than double the official jobless rate.
And still more from New Europe:
Growth in the EU: the IMF warns against unemployment, German Fin Min against social spending
“I am convinced that the real problem in the economy is the human being”. That is how Wolfgang Schaeuble, the German finance minister opened his speech at the presentation of the IMF’s new publication, “Growth and Jobs: Supporting the European Recovery”. . .
German Finance Minister actually warned against “excessive social spending” in euro area countries and “endless regulation” from Brussels. As the EU makes an effort to recover from years of recession, we have to be “frank” he insisted. “Europe on average spends twice as much as other parts of the world in social security. You can see where some of the problems lie,” he said. Moreover, asked whether investments in green economy can offer a sustainable solution to the problem of unemployment, creating an important number of jobs, he answered that what actually happens is the contrary, because the EU’s environmental regulation has gone a bit too far. “We have increasing energy costs which will harm jobs. We have to rebalance.”
Schäuble advocates separate eurozone parliament
Germany’s finance minister Wolfgang Schäuble said yesterday (27 January) he was open to the creation of a separate European parliament for countries using the euro, a step that could deepen divisions within the European Union.
Schäuble’s comments, made during a visit to Brussels, challenge the very foundations of the European Union where lawmaking for all 28 nations is by the bloc’s current parliament.
Splitting that body, critics believe, would represent a dismantling of one of Europe’s biggest symbols of unity.
And then there’s that key piece of the neoliberal agenda, via EurActiv:
Brussels sets advisory group on EU-US trade deal
The European Commission launched on Monday (27 January) a special advisory group of experts to give fresh input on all issues being discussed at the EU-US negotiating table for a Transatlantic Trade and Investment Partnership (TTIP).
“The creation of this group confirms the Commission’s commitment to close dialogue and exchange with all stakeholders in the TTIP talks, in order to achieve the best result for European citizens,” read a Commission press release.
The group, composed of 14 advisors from different consumer, labour and business groups, will help the EU executive to frame the discussion at the negotiating table so that Europe’s high standards of consumer and environmental protection are fully respected.
On to Britain by way of the Irish Times:
No longer flush: Queen down to her last million
- British monarch’s reserve fund has fallen from £35 million in 2001 to £1 millon now
British members of parliament criticised Queen Elizabeth’s royal household for blowing its annual budget while neglecting repairs at Buckingham Palace, which two MPs suggested was falling apart.
The royal household’s latest accounts showed it had exceeded its 2012-13 budget of £31 million by £2.3 million , the report said.
To plug the gap, it had to dip into a reserve fund.
BBC News booms:
UK economy growing at fastest rate since 2007
- Chancellor George Osborne: “I am the first to say the job isn’t done”
The UK economy grew by 1.9% in 2013, its strongest rate since 2007, according to the Office for National Statistics (ONS).
But growth in gross domestic product (GDP) for the fourth quarter slipped to 0.7%, down from 0.8% in the previous quarter, it said.
And economic output is still 1.3% below its 2008 first quarter level.
“There’s plenty more to do but we’re heading in the right direction,” Chancellor George Osborne told the BBC.
Sky News adds nuance:
Cable Warns About Wrong Type Of Recovery
The Business Secretary stresses Britain must avoid past mistakes and ensure the property market does not overheat.
Business Secretary Vince Cable has warned that Britain’s economic recovery could prove to be a “short-term bounce” if it is based on a housing boom.
He made the comments on the eve of the publication of the latest GDP figures, which have shown the country’s strongest growth since the financial crisis began in 2007.
But the senior Liberal Democrat expressed concern that the recovery is too heavily based on housing prices and consumer spending.
Denmark next and strange bankster dealings from the Copenhagen Post:
Leaked document: Goldman Sachs wasn’t highest DONG bidder
- As the finance minister faces parliamentary hearing today, a leaked document contradicts his previous claims
New information has changed the agenda ahead of today’s parliamentary hearing in which Finance Minister Bjarne Corydon (S) will explain the details of the controversial partial sale of DONG Energy to US investment bank Goldman Sachs.
Despite what the government claims, pension fund PensionDanmark’s bid for partial ownership of the state-owned energy company was higher than the bid Goldman Sachs offered, TV2 News reports.
A leaked note revealed that PensionDanmark estimated the stock capital of DONG shares to be 46 billion kroner, a 40 percent higher rate than the 32 billion kroner Goldman Sachs offered.
On Thursday, parliament will vote on allowing Goldman Sachs to invest eight billion kroner in 19 percent of DONG shares. Critics of the sale are concerned with the investment bank’s plans to establish its DONG Energy partial ownership in global tax havens, as well as conditions of the deal that give Goldman Sachs veto rights over the energy company’s future direction and leadership.
Germany next, and mimesis in action form TheLocal.de:
‘Gate’ named Germany’s English word of the year
The English suffix “gate” has been named Germany’s Anglicism of the Year. The quirky, linguistic award honours the positive contributions English had made to the German lexicon.
Gate is no newbie on German turf, having arrived in 1972 with the reporting of the Watergate scandal.
But Germans were slow to take it into their own language and it wasn’t until many years later that gate gained widespread acceptance as a bona fide suffix.
The London Telegraph drops a bombshell:
Rising risk that German court will block Bundesbank rescue for Southern Europe
- Court can force German institutions to withdraw support for EU operations, wrecking market credibility for the ECB’s rescue policies
The risk is rising that the German constitutional court will severely restrict the eurozone bond rescue scheme for Italy and Spain, and may reignite the euro debt crisis by prohibiting the German Bundesbank from taking part.
The Frankfurter Rundschau newspaper reports that the verdict has been delayed until April due to the complexity of the case and “intense differences of opinion” among the eight judges.
The longer the case goes on the less likely it is that the court – or Verfassungsgericht – will rubber stamp requests from the German government for a ruling that underpins the agreed bail-out machinery.
On to France and legalized hard times intolerance from TheLocal.fr:
France blocks return of Roma schoolgirl’s family
A French court Tuesday rejected an appeal for residency for the family of a Roma schoolgirl whose deportation sparked outrage and student protests in the country.
A court in the eastern city of Besancon ruled that the public magistrate handling the case had been right in upholding the October 9 expulsion of 15-year-old Leonarda Dibriani, her parents and six siblings to Kosovo.
The Dibriani family can appeal the latest ruling.
The case triggered outrage as Leonarda was taken by the authorities while she was on a school trip. The public magistrate had on January 7 said the decision by local authorities to deport Dibrianis was justified as they had made no attempt to integrate into French mainstream society.
Spain next, and fundamentalist politics from GlobalPost:
Spain’s prime minister pushes ahead with anti-abortion legislation despite almost no popular support
In the midst of a jobs crisis and economic dysfunction, Spain now must face a bitter debate over government plans to radically restrict women’s rights.
Spanish Prime Minister Mariano Rajoy has a lot to worry about.
Despite tentative signs of economic recovery, more than a quarter of the workforce is still looking for a job. The legacy of a burst property bubble has saddled the country with around a million unsold homes and much of the banking sector remains crippled by debt.
In politics, Spain’s most populous and richest region — Catalonia — is threatening to break away after an independence referendum this year while the ruling conservative party reels from graft allegations and another fraud scandal is sapping respect for the monarchy.
Not the best time, then, to launch a bitterly divisive new policy initiative opposed by more than 80 percent of the population, including a significant slice of his own party.
Spain to grow ‘nearly one percent’ in 2014: minister
Spain’s economy is set to grow by “nearly 1.0 percent” in 2014, Economy Minister Luis de Guindos said on Tuesday as the euro nation’s struggling recovery gains traction.
The official government prediction for the year is 0.7 percent growth, following a contraction of 1.2 percent in 2013, according to estimates by the Bank of Spain.
“Growth in 2014 will be nearly 1.0 percent but the revision will be included in our stability programme when it is released before the end of April,” de Guindos told reporters ahead of a meeting of EU finance ministers in Brussels.
El País retreats:
Madrid abruptly cancels plans to outsource management at public hospitals
- Regional health commissioner Javier Fernández-Lasquetty, the architect of the proposal, resigns
- Move comes after court rejects petition to lift a cautionary injunction against PP government
Madrid’s Popular Party (PP) regional government on Monday took a U-turn and canceled its planned outsourcing of management and services at six local hospitals – a move that thousands of health professionals had mobilized against.
At the same time, the region’s health chief, Javier Fernández-Lasquetty, who had been pushing the privatization efforts and outsourcing of services, announced he was stepping down from his post.
The developments came just hours after the Madrid regional High Court, which has been studying a lawsuit, denied the regional government’s petition to lift a cautionary injunction it issued last September against the efforts.
ANSAmed moves out, forcibly:
Evictions of mortgage defaulters rise in Spain
- Almost double those in 2012, reports central bank
The number of evictions due to an inability to meet mortgage payments rose in Spain last year as a result of the economic crisis, and may double the number of those in 2012, reported the country’s central bank on Tuesday.
Some 19,567 evictions were carried out in the first quarter of 2013 compared with 23,774 in the entire year of 2012, the bank said. However, a sharp decline was seen in the number of cases (88) in which the police intervened to carry out the eviction. Over the past few years forced evictions by police had led to over 20 suicides.
Italy next and a new low from TheLocal.it:
Italian wages rise at lowest rate since 1982
Hourly salaries in Italy rose just 1.4 percent on average in 2013 – the lowest rate since 1982 – the national statistics agency, Istat, said on Tuesday.
However, wages increased more than the level of inflation – 1.2 percent – meaning real incomes nudged up by 0.2 percent last year, Istat said.
Italy’s economy stopped contracting in the third quarter of 2013, technically bringing to an end its longest post-war recession, but it is still struggling with an unemployment crisis and rising debt and deficit levels.
Figures released by the Bank of Italy on Monday revealed that the rate of poverty rose from 12 percent to 14 percent between 2010 and 2012, while half of Italian families live on less than €2,000 a month.
Europe Online covers the retreat of the retreat of the founder of the corporate owner of the neighborhood horse racing venue, Golden Gate Fields and a subject of our own frequent stories at the Berkeley Daily Planet:
Billionaire party founder withdraws from Austrian parliament
Austrian-Canadian billionaire Frank Stronach said Tuesday that he would give up his parliamentary seat, as the party he founded ahead of last year’s elections loses popularity amid internal conflicts.
The 81-year-old automotive parts entrepreneur said that, for the time being, he would remain the nominal head of the eurosceptic and pro-business Team Stronach, which he founded in 2012.
Team Stronach initially received high poll ratings, but the party only won 5.7 per cent of the votes in September’s election.
Following the election, a series of party officials were kicked out of Team Stronach amid a debate about Stronach’s authoritarian leadership style.
After the jump, the ongoing and never-ending Greek meltdown, Ukrainian proscription and a pledge, ruble anxieties, interest ramp-ups in Turkey and India, calls for Latin unity and a tegime extension enabled, Thai troubles, Chinese crises averted and anticipated, Abe road platitudes, environmental woes, and Fukushimapocalypse Now!. . . Continue reading