Craig Eisele on …..

March 5, 2012

Why Georgia Gets More Republican Delegates Than Ohio?

Filed under: Uncategorized — Mr. Craig @ 10:14 pm

Mitt Romney made a beeline for Ohio after winning the Michigan and Arizona primaries to kick off his campaign for the most populous state that votes on Super Tuesday, when 10 states will participate in the Republican Party’s presidential nominating process.

With 18 electoral votes, Ohio is a big battleground in the general election, when the number of Electoral College votes are proportional to a state’s population. But on Super Tuesday, Georgia–which has only 16 electoral votes in November–is an even bigger prize. Georgia will send 76 delegates to the Republican nominating convention in November, while Ohio will send 66.

Why does Georgia, a smaller state, get more delegates than Ohio?

In the Republican Party, delegates are awarded based only partly on a state’s population. The Republican Party gives extra delegates to states where a majority voted for the Republican presidential candidate, John McCain, in 2008. A bonus delegate goes to each Republican senator a state has elected since 2008, and another bonus delegate is awarded if 50 percent or more of the state’s U.S. representatives are Republican. Electing a Republican governor and a majority-Republican state senate or house since 2008 also gets states extra delegates.

That’s why Ohio, with a population of 11.5 million, has 10 fewer delegates than Georgia, with a population of 9.8 million. Ohio has a Republican governor, state legislature, and Congressional delegation, but it went for Barack Obama in 2008.

Georgia picked up 14 extra delegates for voting for John McCain in 2008, according to an analysis by delegate scholar without portfolio Richard E. Berg-Andersson at the Green Papers. These presidential delegates are counted by adding 4.5 to 6/10ths of the state’s total electoral vote in 2012.

Other states’ delegates-to-population ratio are even more lopsided. Alaska has 27 delegates even though the state’s population breaks just 700,000. South Carolina, with a population six times that, gets only 25 delegates. That’s because of another wrinkle affecting delegate counts: The Republican Party recently changed its rules so that most states were not allowed to hold their primaries before March 6.

New Hampshire, Florida, South Carolina, Michigan and Arizona each lost half their delegates because they ignored this rule.

All told, Tuesday’s contests in Ohio, Massachusetts, Virginia, Georgia, Tennessee, Oklahoma, Vermont, North Dakota, Alaska and Idaho will award 437 delegates–almost 40 percent of the 1,144 needed for a candidate to win the nomination.

The delegate counts for each state on Super Tuesday:

Georgia: 76

Ohio: 66

Tennessee: 58

Virginia: 49

Oklahoma: 43

Massachusetts: 41

Idaho: 32

Wyoming: 29

Alaska: 27

Vermont: 17

Romney Would Lose Massachusetts in November

Filed under: Uncategorized — Mr. Craig @ 10:00 pm

Two weeks ago, we unveiled our model of presidential elections based on data from the past ten election cycles, which currently predicts that President Obama has a fragile advantage over his eventual opponent. We currently project that the president will win 303 electoral votes in November. But if the economic or job approval numbers slide backward even a few ticks, he loses the election by a hair.

Today we’d like to examine one rather glaring error in the model and explain why we’re not going to fix it: Massachusetts stands at 74.4 percent likely to go to Obama, while all external signs dictate that it is a much safer bet for the Democrats. This is because we currently assume Mitt Romney will win the nomination, as the prediction markets suggest.

There is overwhelming empirical evidence that presidential candidates get abnormal returns in their home state. In 1984, for example, Walter Mondale still won Minnesota even though the other 49 states all went to Ronald Reagan. (Mondale also held down Washington, D.C.) So Yahoo! Labs’ Patrick Hummel and I tested this theory with data from the last ten election cycles. We determined the size of that abnormal return, calibrated on those past races. This boost shifts Massachusetts from a Democratic lock to a Democratic-leaning state. It currently flips for Romney if Obama’s approval rating falls to 41 percent, well before similar states.

Not only has Massachusetts voted Democratic in the last six presidential elections, but it has also done so overwhelmingly. The state’s House delegation is all Democratic. Scott Brown, who won a special election for Ted Kennedy’s former Senate seat, is the only Republican representing the state on the federal level, and Elizabeth Warren is 68.6 percent likely to take that seat off his hands this fall. George McGovern even won the state in 1972, another year when the Republican incumbent (Richard Nixon) won 49 states.

Furthermore, Romney has widely distanced himself from Massachusetts’ liberal image, especially when health care comes up. The health care law that Romney signed as governor, which bears many similarities to Obama’s national initiative, is widely popular in Massachusetts. But Romney has declared that his first act as president would be to toss out the so-called “Obamacare” legislation.

Here we have an empirical study of the data clashing with anecdotal political wisdom, and it’s tempting, of course, to work in some fudge factor, or arbitrarily decide that Romney’s real home state is Utah, the nexus of his Mormon faith. But our model will be judged by academia on its statistical significance, not on what it predicts in 2012, with a twofold goal. First, we want to create the most accurate forecast possible several months before there is enough accuracy in polls and prediction markets to use that data for predictions. Second, we want to provide a data-driven look at the real correlation between all the data points–economic growth, incumbency, regional affiliation, and so forth–that are constantly debated in the press and academia.

As the election season progresses, we will incorporate more polling and prediction market data into our state-by-state presidential predictions. These data points will help correct any 2012 anomalies that cannot be observed by historical data. At present, historical data is the most accurate predictor of the election–regardless of any temptation to tamper with its findings when it conflicts with our human instincts.

RE-BLOGGED: Snow Monkeys of Jigokudani Park

Filed under: Uncategorized — Mr. Craig @ 9:56 pm

Snow Monkeys of Jigokudani Park, Yamanouchi, Nagano

Visit the original site for a funny commentary from the Monkey’s perspective and many more great photos like the ones below.

Here is the link: http://lifetoreset.wordpress.com/2012/03/05/snow-monkeys-of-jigokudani-park-yamanouchi-nagano/

“It’s hard to be part of the famous snow monkeys of Jigokudani Park. Just imagine the pressure when people from all over the world including media outlets like CNN or National Geographic annually visits you for a feature story. Obviously, they expect you on your cutest mood and if you are covered in snow, then its just perfect television”.

 

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Virginia’s Economic recovery May Sway November election

Filed under: Uncategorized — Mr. Craig @ 9:30 pm

NEW YORK (CNNMoney) — They might not be the hottest commodity on Super Tuesday, but Virginia voters are set to become one of the most sought-after prizes of the upcoming general election.

In 2008, Obama carried the state in one of the cycle’s biggest surprises. Before that, Virginia had gone to the Republicans in every presidential contest since 1964.

This year, the Obama campaign’s efforts to hold Virginia will be complicated by the divergent strength of the economic recovery in the state. While some rural counties are still struggling to recover from the recession, the suburbs that surround the Washington, D.C. area are flourishing from their proximity to the federal government.

“I think we weren’t hit quite as hard because we have a pretty diverse economy,” said Ann Macheras, head of regional research at the Richmond Fed. “We’re not as dependent on manufacturing as some of the states in the Midwest.”

Even with pockets of very high unemployment, Virginia’s economy is doing quite well compared to most states. Overall unemployment is 6.2%, far better than the national average.

In Northern Virginia, unemployment is particularly low compared to both the state and national averages.

Places like Fairfax County, heavily dependent on government spending and defense contracting, are doing just fine. The county’s unemployment rate was 4.2% in December.

The Washington metro area added 49,200 jobs — the most of any large market — in the year ended November 2010, according to the George Mason Center for Regional Analysis.

Growth dropped off in 2011 to 8,800 jobs gained as losses hit the federal government, manufacturing, retail and construction.

Macheras said some of the momentum loss can be attributed to uncertainty over federal government spending levels, which caused some firms to hold back on hiring.

But Northern Virginia is still doing quite well compared to many other metropolitan areas.

And that’s good news for Obama, who crushed John McCain in the suburban counties around Washington D.C. in 2008, capturing 60% of the vote in populous Fairfax County and 72% in Arlington and Alexandria Counties.

It’s still uncertain who his opponent will be this year, but Mitt Romney is the presumed victor in the state on Tuesday. Newt Gingrich and Rick Santorum aren’t even on the ballot after failing to get enough signatures.

Obama is likely to do well in Northern Virginia again — as federal dollars have buoyed the region.

Swing state economies complicate 2012 picture

Federal funds accounted for almost 40% of spending in the greater Washington area in 2010, according to data from GMU. That money has brought new, high-paying jobs to the region.

In 2012, federal spending is projected to increase another 1%, while economic growth in the region is expected to hit 2.7%.

“Virginia would practically close up shop if not for the federal government,” said Larry Sabato, director of the University of Virginia Center for Politics.

High levels of military spending have provided a boost to Hampton Roads, an outpost in the southeast corner of the state home to a natural harbor and several large military installations.

However, the sunny story of economic prosperity and a robust recovery falls apart in the southern and western parts of the state, where unemployment remains high.

Southern counties like Henry and Halifax, along with Smyth and Grayson in the West, all have unemployment rates near 10%.

A third-party deficit hawk for president?

“Those are the areas where they have been more dependent on manufacturing,” Macheras said. “They continue to have unemployment rates that are much higher than the state average as they transition away from the manufacturing of textiles and furniture.”

Those are also the areas that — by and large — favored John McCain in 2008.

Adding to the good news for the White House, recent polling shows the president’s approval ratings moving higher in Virginia. Obama edged ahead of Mitt Romney in a hypothetical state-wide matchup for the first time earlier in February, according to a poll from Quinnipiac University.

Forty-seven percent of respondents said they would vote for Obama, while 43% said they would choose Romney.

But the same poll also showed Obama’s approval rating is underwater in the state, as 46% of Virginians approve of the job he is doing, while 49% do not.

If the general election turns out to be, as most observers anticipate, a referendum on the economy, and those concerns stay localized, Obama could fare quite well. 

Greece Ready to Strong Arm on Debt Swap

Filed under: Uncategorized — Mr. Craig @ 9:15 pm

Greece expects bondholders to accept a one-time offer to write off about 100 billion euros ($140 billion) of Greek debt and is ready to force them to participate if necessary, Finance Minister Evangelos Venizelos said.

“This is the best offer,” Venizelos said in a Bloomberg Television interview with Nicole Itano in Athens today. “This is the best offer because this is the only one, the only existing offer.”

The European Union is facing its first test in its attempt to turn the page on the two-year debt crisis as Greece’s private creditors decide whether to sign off on the biggest sovereign- debt restructuring in history. The success of the 106 billion- euro swap, confirmed on the eve of last week’s European Union summit, depends on how many investors agree to the writedown by the March 8 deadline.

“This is the critical week,” Venizelos said.

Twelve banks and investors, including National Bank of Greece SA (ETE), BNP Paribas (BNP), Commerzbank AG (CBK) and Deutsche Bank AG, said today they planned to take up the offer, according to an e- mailed statement from the Institute of International Finance. At the same time, Germany’s DSW investor protection group advised private sector bondholders to reject the Greek bond offer.

Participation Rate

The Greek government has set a 75 percent participation rate as a threshold for proceeding with the transaction, in which investors will forgive 53.5 percent of their principal and exchange their remaining holdings for new Greek government bonds and notes from the European Financial Stability Facility. Euro- area finance ministers last week authorized the EFSF to issue bonds for the swap.

Erik Nielsen, chief global economist at UniCredit SpA in London, said enough creditors will probably participate in the writedown to avoid triggering so-called collective action clauses, which could be used by Greece to compel investors to participate and roil markets by triggering credit-default swap insurance contracts.

“If we can avoid the triggering of CDSs this is the best solution,” said Venizelos. “With a near universal participation it’s not necessary to activate CACs. But this clause exists in our legal order and we are ready to implement the legislation if necessary.”

Euro-area finance ministers will hold a teleconference on March 9 to review the deal’s outcome.

Europen Leaders Have No Confidence in Their Own Citizens… Deny them Vote

Filed under: Uncategorized — Mr. Craig @ 9:00 pm

Damn the Voters, Full Bailouts (and Existing Policies) Ahead

 What’s “too complicated” for France is not “too complicated” for Ireland. The Financial Times reports Ireland calls vote on European treaty

Dublin will hold a referendum on the eurozone fiscal treaty, plunging Europe into months of uncertainty and potentially placing a question mark over Ireland’s future membership of the euro.

Enda Kenny, Ireland’s prime minister, said on Tuesday that the government had decided to hold a referendum following advice supplied by the attorney-general that “on balance” the Irish constitution required the treaty to be put to a vote.

He said he would sign the treaty at a European Union summit on Friday and within a matter of weeks the government would organise a referendum commission – an independent body appointed to explain the subject matter of a referendum to the public. 

An opinion poll last month found 73 per cent of the public felt a vote should be held on the treaty, which would tighten budget rules for the 17 countries sharing the euro. Some 40 per cent of the 1,000 people questioned in the Sunday Business Post/Red C poll said they would support the treaty, 36 per cent were opposed and 24 per cent were undecided.

The government’s decision to hold a referendum follows a threat by the Sinn Féin party to challenge in the Supreme Court any decision not to give the public a say. Irish officials have privately acknowledged it would be more difficult to win a referendum if the government was seen to have been forced to hold a vote by the Irish courts.

The Irish public have twice rejected EU treaties, only to approve them in second referendums. In 2008 the Lisbon treaty was rejected only to be approved in a second referendum held 18 months later.

Logic of Signing a Treaty then Voting on It

In the real world it makes no sense to sign a treaty then vote on it. In the political world it is a way of telling voters their wishes do not matter, that politicians will hold a referendum as many times as it takes to get a treaty signed.

In a massive landslide, Irish voters swept out Ireland’s previous prime minister, only to have Enda Kenny come along and do the exact same things as the politician he replaced.

US Budgets and Bailouts

That is exactly what happened in the US 2008 presidential elections as well. Obama carried out the same bailout policies and the same war mongering policies as Bush.

There is plenty of rhetoric for change, just no real change that anyone can see. Both sides want to do something about the budget, neither side does.

Obama wants to close corporate tax loopholes, then just a few days ago proposed a new set of loopholes for manufacturing, just as Santorum and Romney have proposed. The net result would be an increase in the budget deficit.

There are differences between the parties on social issues, but nothing happens there but hot air.

Romney vs. Obama What’s the Difference?

Not your grandfather’s Republican Party; President Obama and Mitt Romney are Nearly One and the Same!

Obama Seeks to Prove He is More Like Romney; Obama vs. Romney – What’s the Difference?

Germany Bailouts

Voter sentiment in Germany is overwhelmingly against giving more money to Greece. So why did Chancellor Angela Merkel ram through more aid for Greece?

The answer as explained many times is all Merkel cares about is her legacy, and that legacy says no country can leave the eurozone. Merkel does not give a damn about what is good for Greece, or what her own constituents want either.

French Promises

French President Nicolas Sarkozy will not hold a referendum claiming it’s “too complicated”. In reality, Sarkozy knows the referendum would be about him (See Referendum on a Person or on a Treaty?).

Everywhere you look, it’s a case of “Damn the Voters, Full Bailouts (and Existing Policies) Ahead”. Politicians have decided, things are “too complicated to change”. Expect a cornucopia of promises from politicians, just don’t expect any real change.

Greece, Italy and Portugal See Huge Exits of Capital… Is Spain Next?

Filed under: Uncategorized — Mr. Craig @ 8:00 pm

Capital Flight From Italy, Greece, Portugal Accelerates; Two Trillion Fantasy; Merkel Weaker Every Week; Crude and Geopolitical Risks

 Via Email, here is a nice summary of European events from Steen Jakobsen at Saxo Bank in Denmark. Topics include the G20 Summit, Extend-and-Pretend Dogma, Capital Flight , and Geopolitical Risks.
Steen Writes …

Two Trillion Fantasy

This week-end’s G-20 came and went without any real new information. Yes, the policy makers wants us to believe ultimately IMF will have 2 trillion US dollars at its disposal.

No, the US, UK and rest of non-Europe is not really interested before we all get more clarification on how Europe will ring fence the debt crisis.

This is more and more Wall Street vs. Main Street: Underfunded banks buys underfunded government bonds and underfunded governments guarantees underfunded banks. 

The real loser being the unemployed – Edward Heath put it more elegantly: Unemployment is of vital importance, particularly to the unemployed. 

Meanwhile the real economy and unemployment is exploding higher adding further burdens to already stretched government deficits.

The new EU forecast for GDP growth in 2012 of minus .3% from this past Friday down from plus .05% is great example of how EU and the debt crisis non-solutions continues to lack behind fundamentals. Soon the rising disconnect will hit the politicians games of buying time.

Capital Flight

Merkel Weaker Every Week

Chancellor Merkel is weaker, week after week. She soon will have to rely on SPD votes if she continues down this path. 62 percent polled over weekend are against giving more money to Greece and 2/3 don’t believe Greece can be saved according to German newspaper Bild

Finland will have an interesting vote this week. Follow it closely.

The G20 did not give more credibility to more funds but they sure talked the talk of extend-and-pretend dogma.

Geopolitical Risks

Crude: We are potentially a few weeks from some sort of confrontation unfortunately. IEA report from Iran is due this week. Israel’s time window is closing if you believe the media coming out of Israel. Iran’s finances are running out of time as well. Iran failed to pay for Indian rice last week.

High energy prices will soon spill-over into gasoline and survey data and will start to impact data and sentiment negatively.

Greece Controlled Default: Greece will have a controlled default and a vacation from Europe. 

Portugal CDS Spreads: Portugal is the real issue and containment is almost impossible. CDS spreads suggest the probability of default within five years is about 65 percent.

The Greek Crises and Euro Zone Problems Continue

Filed under: Uncategorized — Mr. Craig @ 7:30 pm

Money for Debt Swaps but No Money for Greece; Eurozone Delays Rescue Funds on Failure to Meet Conditions

 The Financial Times reports Eurozone delays Athens rescue funds

Eurozone members have delayed approval of more than half of the €130bn bail-out for Greece after deeming that Athens has yet to meet all the terms set as the price of a second rescue.

However, finance ministers from the 17-country currency bloc meeting in Brussels signed off on funds to underpin a €206bn debt swap to cut the value of the Greek bonds held by private investors.

Jean-Claude Juncker, the Luxembourg prime minister who chairs the eurogroup, said Greece’s official creditors would “finalise in the next few days” an assessment of Greece’s steps to enshrine the bail-out conditions into law.

But he added that the full bail-out would only be completed on a successful completion of the debt swap with private bondholders.

The ministers decided that Athens had yet to meet all the conditions to secure the €71.5bn portion of the bail-out destined for the Greek government. The balance of the rescue funds – which, when combined with other incentives and instruments to be used in the debt swap comes to some €93bn – was agreed.

There is not much new information here actually. Greece was supposed to have met conditions at the end of October, then November, then January, then February.

Every time Greece failed and it did not matter. The EMU granted extension after extension. 

However, with the debt swap and protection of the ECB, and with a bond payment due on March 20, time has run out for extensions. The sane thing to do would be for the EMU, IMF, and ECB to accept the very simple fact that Greece is bankrupt and there is no point in giving Greece another nickel, thereby forcing Greece out of the Eurozone.

All parties should have recognized that years ago actually, but stubborn ideology got in the way.

 
Meanwhile:

German Interior Minister Says EU “Should Create Incentives for Exit That Greece Cannot Turn Down”; Greece Delays Swap Until March 8

 It is possible if not likely we have to suffer through at least 11 more Groundhog days as Greece sets March 8 deadline for investors in bond swap.

Greece has set a March 8 deadline for investors to participate in its unprecedented bond swap aimed at sharply reducing its debt burden, according to a document outlining the offer.

Greece formally launched the bond swap offer to private holders of its bonds on Friday, setting in motion the largest-ever sovereign debt restructuring in the hope of getting its finances back on track.

In the document, Greece said the March 8 deadline could be extended if needed. Athens in the past has said it wants to conclude the transaction by March 12.

Interior Minister Says Greece Should Exit Eurozone

In yet another break in Merkel’s ranks, German interior minister Hans-Peter Friedrich says Greece should exit eurozone.

With German Chancellor Angela Merkel facing a parliamentary vote Monday on a second Greek bailout, her interior minister, Hans-Peter Friedrich came out over the weekend in favour of Greece leaving the eurozone.

Friedrich told the news magazine Der Spiegel, “I do not mean that Greece should be kicked out of” the 17-nation eurozone, but he said the bloc should “create incentives for an exit that they cannot turn down.”

Merkel is opposed to Greece leaving the eurozone, and agreed in January with French President Nicolas Sarkozy that Greece should be kept in the monetary union, as long as its government imposes strict budgetary reforms. She expects the Bundestag to approve the second bailout package in a vote Monday.

Friedrich, of the CSU, the Bavarian sister party to Merkel’s Christian Democrats, is the first member of the federal government to have spoken out suggesting a radical change of course in euro crisis policy.

“Outside European monetary union, Greece’s chances of regenerating itself and becoming competitive are definitely better than if it remained inside the eurozone,” Friedrich told Der Spiegel.

Meanwhile, at a meeting of G20 finance ministers and central bankers in Mexico City, German Finance Minister Wolfgang Schäuble said it made “no economic sense” to be “endlessly” pumping money into eurozone rescue funds.

It should have been obvious Germany wanted Greece out of the Eurozone no later than January 27 when Merkel demanded Greece to Cede Sovereignty to Eurozone “Budget Commissioner”.

Merkel’s Official Denial “I will have no part in forcing Greece out of the euro” Should have made it all the more clear on February 7. 

At the same time Schäuble started “Salami Tactics” on German participation (see above link). On February 23, came the Pact With the Devil Over Gold. 

Then on February 23 Troika Demands 38 New Changes in Greek Tax, Spending and Wage Policies in Next 6 Days.

Finally, at long last, the German Interior Minister came flat out and stated what previously Finance Minister Wolfgang Schäuble only hinted at, and Merkel herself “officially denied”. As I have said many times, Merkel’s denial is not plausible. She just not does to be on record as the person causing any country to exit the Eurozone.

Merkel is to be pitied for one of two reasons.

  1. She is so amazingly dense that she cannot see that Greece needs to leave the Eurozone
  2. She is so concerned about her legacy that she does not have the honesty and decency to say what she knows is true, and she is willing to further destroy Greece in the process.

I vote for door number 2.

Bank of America (BofA) Clash With Fannie Mae Intensifies.

Filed under: Uncategorized — Mr. Craig @ 7:00 pm

Bank of America Clash with Fannie Mae Intensifies; Insurance Disputes Put Taxpayers On the Hook For Still More Losses

 

Taxpayers are already on the hook for $180 billion in losses at Fannie Mae and Freddie Mac. That number is going to rise, perhaps significantly. 

The clever synonym for more taxpayer losses is “treasury Advance”. With that understanding, please consider Fannie Mae’s Losses Narrow but Treasury Advance Requested. 

Fannie Mae is reporting a net loss of $2.4 billion for the fourth quarter of 2011 compared to a net loss of $5.1 billion in the third Quarter. For the entire 2011 year it reports a net loss of $16.9 billion compared to $14.0 billion in 2010. 

The net worth of the company had a net deficit of $4.6 billion as of December 31 reflecting the $1.9 billion loss and its payment to Treasury of $2.6 billion in senior preferred stock dividends during the fourth quarter compared to $2.5 billion in Quarter Three. The Federal Home Mortgage Finance Agency (FNFA), conservator of Fannie Mae, will submit a request to the Treasury Department for a draw of $4.57 billion to eliminate the net worth deficit.

Bank of America Clash with Fannie Mae Intensifies

In simple terms, Fannie Mae will cost taxpayers another $4.6 billion. That’s not the worst of it.

Taxpayers may be on the hook for still more losses as BofA Clash With Fannie Intensifies.

Bank of America Corp. said it’s facing more demands by Fannie Mae for refunds on flawed home loans because mortgage insurers who cover defaults rejected 25 percent more claims last year.

Unresolved insurance rejections rose to 90,000 at the end of 2011 from 72,000 the year earlier, Bank of America said last week in its annual filing with regulators. Last year’s denials equal $1.2 billion in unpaid loan balances, according to a note yesterday by Compass Point Research and Trading LLC. 

The rejections heighten tension between Brian T. Moynihan, the bank’s chief executive officer, and U.S.-owned Fannie Mae in their disputes over who must pay for billions of dollars in failed loans made during the housing boom. When mortgage insurers deny claims, the two firms are left to squabble over whether losses will be borne by bank shareholders or the taxpayers who bailed out Fannie Mae. 

Shorter Deadline

Pressure on Bank of America, the second-biggest U.S. lender by assets, may rise in July when Fannie Mae shrinks the amount of time it gives a bank to appeal an insurer’s denial to 30 days from 90 days before pressing for a refund. Repurchase costs probably would rise if the firm is forced to adhere to Fannie Mae’s policy, Bank of America has said.

Fannie Mae and Freddie Mac buy mortgages from lenders and package them into securities for sale to investors. Both firms were seized by the U.S. in 2008 to stave off collapse, and have collectively drawn more than $180 billion in taxpayer funds. The bill is likely to rise — Fannie Mae this week requested $4.6 billion more from the U.S. Treasury Department — and the firms’ regulator is pressing banks for refunds on bad loans to limit the bailout’s cost to the public.

Insurance Disputes 

Bank of America is involved in legal disputes with mortgage insurers, including MGIC, saying the firms are denying valid claims. 

In the second half of last year, Bank of America has “materially increased” the percentage of denials it argues are improper, Milwaukee-based MGIC said this week in a filing. AIG’s mortgage guarantor said last week that lenders were devoting more resources to reversing rejections.

Bank of America has committed about $42 billion to deal with flawed mortgages, foreclosures and writedowns since the start of 2007. The lender accounts for half of Fannie Mae’s pending repurchase demands after insurance denials, the Washington-based firm said this week in an annual filing.

Outstanding repurchase claims against Bank of America from all sources jumped 22 percent to a record $14.3 billion as of Dec. 31, the lender said in January. That increase was fueled in part by other demands from Fannie Mae. The mortgage financing firm has started asking for refunds on loans that have performed for 2 years or more before defaulting, requests Bank of America has deemed invalid. 

More Public Money 

Fannie Mae faces its own squeeze and asked for more public funds this week after posting a $2.4 billion loss in the fourth quarter. The company said that while Bank of America has failed to “honor repurchase obligations in a timely manner,” it still expects to get reimbursed.

“If we collect less than the amount we expect from Bank of America, we may be required to seek additional funds from Treasury,” the company said in the Feb. 29 filing.

By the way, look at the potential losses mounting up at Bank of America if Fannie Mae does succeed on those push-backs. Think Bank of America has sufficient reserves for credit losses? I don’t.

A Brokered Convention For Republicans or the Least Worst Candidate??

Filed under: Uncategorized — Mr. Craig @ 6:30 pm

Super Tuesday Delegate Rules and Preview; Brokered Convention Revised Math

HOWEVER… no matter how we cut it The Republican Party has very slim chance of winning in November with ANY of these candidates

 On Monday February 27, this case  for a brokered convention was originally laid out. Since then, Michigan, Wyoming, and Washington have posted results. The table below reflects those results.

Additional changes to That Super Tuesday estimates based on new information regarding delegate rules. For example, many states have minimum percentages to receive any delegates and this favors Mitt Romney and Rick Santorum except in Georgia where rules heavily favor Gingrich.

Finally, the LA times and Krem have posted different explanations for how the Idaho caucus works. There are now three possible scenarios for Idaho in play (depending on which explanation is correct).

Totals through March 3 in the table below are from Real Clear Politics 2012 Republican Delegates.

March 6 Super Tuesday numbers are my estimates.

State Primary Count Romney Santorum Gingrich Paul
Total to Date - 374 166 72 33 29
Iowa Jan 3 28 6 7 0 0
New Hampshire Jan 10 12* 7 0 0 3
South Carolina Jan 21 25 2 0 23 0
Florida Jan 31 50* 50 0 0 0
Nevada Feb 4 28 14 3 6 5
Minnesota ** Feb 7 40 2 17 1 4
Colorado ** Feb 7 36 9 17 2 1
Maine ** Feb 11 24 9 3 0 7
Michigan Feb 28 30* 16 14 0 0
Arizona Feb 28 29 29 0 0 0
Wyoming ** Feb 29 29 10 8 1 6
Washington ** Mar 3 43 12 3 0 3
Georgia Mar 6 76 24 6 46 0
Ohio Mar 6 66 36 30 0 0
Tennessee Mar 6 58 20 38 0 0
Virginia Mar 6 49 49 0 0 0
Oklahoma Mar 6 43 12 21 10 0
Massachusetts Mar 6 41 38 3 0 0
Idaho ** Mar 6 32 18 0 0 14
North Dakota Mar 6 28 8 7 6 7
Alaska Mar 6 27 10 11 3 3
Vermont Mar 6 17 15 2 0 0
Super Tuesday Est Mar 6 811 396 190 131 53

* States penalized half of their delegates.
** Not all delegates assigned, or assigned to candidates who have dropped out
*** Idaho Rules are in Question. See explanation below. 

Thru Super-Tuesday (If Idaho Splits)
Romney: 396
Santorum + Gingrich + Paul: 374
Other:  41

Thru Super-Tuesday (If Idaho Goes to Paul)
Romney: 378 
Santorum + Gingrich + Paul: 392
Other:  41

Thru Super-Tuesday (If Idaho Goes to Romney)
Romney: 410
Santorum + Gingrich + Paul: 360
Other:  41

As you can see there is a decent-sized swing in play for Idaho, depending on the exact caucus rules. Even assuming Romney wins 100% of the Idaho delegates, he would still have barely over 50% of the delegates to date. However, that would probably, but not necessarily be enough as he would pick up some of those 41 and he rates to do reasonably well in California.

Nonetheless, even if Romney does as outlined above, the possibility for a brokered convention still exists. If Romney does worse than expected on Super Tuesday, it’s a whole new ball game. It would also be a whole new ballgame if Romney were to do poorly in California, or split the delegates three ways here on out.

Super Tuesday Delegate Rules, Preview, Estimates

The rules for each primary are from the LA Times article Super Tuesday 2012: What’s at stake and who’s in the lead

Except where noted, polls are from Real Clear Politics Super Tuesday Poll.

GEORGIA PRIMARY
Delegates at stake: 76
How it works: 34 delegates will be awarded proportionally to any candidate receiving more than 20% of the statewide vote. The winner in each of the state’s 14 congressional districts will earn another two delegates, and the second-place finisher will win one, unless one candidate wins more than 50% in a district. 

Georgia Predictions 
Gingrich wins all 14 districts for 28
Romney comes in second in all 14 districts for 14
Gingrich gets 52% of 34 for 18
Romney gets 28% of 34 for 10
Santorum gets 20% of 34 for 6

Totals
Gingrich: 46
Romney: 24
Santorum: 6
Paul: 0 

OHIO PRIMARY
Delegates at stake: 66
How it works: 15 delegates will be awarded on a proportional basis to any candidate receiving more than 20% of the statewide vote. If a candidate has more than 50%, though, he wins all 15. Another three delegates will be awarded to the winner in each of the state’s 16 congressional districts.
In both cases, voters are electing delegates who have pledged to vote for a presidential nominee. Santorum, it should be noted, did not file delegate lists in all of the congressional districts.
The final three delegates are the elected state party leaders.

Santorum is not on the ballot in 3 of 13 districts.
See Family of three GOP delegates gets Santorum on ballot in an Ohio district for an explanation.

Ohio Predictions
Of the 15 at-large

Romney: 7
Santorum: 8 

Of 16 Districts
Romney wins 3 by default and 6 contested for 27 delegates
Santorum wins 7 contested for 21 delegates

State Party Leaders give Romney 2, Santorum 1 

Totals
Romney: 36
Santorum: 30

TENNESSEE PRIMARY
Delegates at stake: 58
How it works: 28 delegates will be awarded on a proportional basis to any candidate receiving more than 20% of the statewide vote. If one candidate has more than 66% of the vote, he wins all 28. In the nine congressional districts, a candidate will win all three delegates if he wins 66% of the vote. If the winner and runner-up both have between 20% and 66% of the vote, the winner receives two delegates and the runner-up gets one. The other three delegates are the elected state party leaders.

A more recent MTSU Poll show those percentages are holding.

Tennessee Predictions
Of the 28 at-large Santorum wins 18
Of the 28 at-large Romney wins 10

In the 9 Congressional Districts Santorum wins all 9 for 18
Romney come in second in all 9 for 9

State party leaders give 2 to Santorum, 1 to Romney 

Totals
Romney: 20
Santorum: 38

VIRGINIA PRIMARY
Delegates at stake: 49
How it works: 13 delegates will be awarded proportionally to any candidate receiving 15% of the vote. But because there are only two candidates on the ballot — Romney and Paul — it will likely be winner-take-all. Three delegates will also be awarded to the winner in each of the 11 congressional districts.

Prediction
Romney wins all 49 

OKLAHOMA PRIMARY
Delegates at stake: 43
How it works: 25 delegates will be awarded on a proportional basis to any candidate receiving more than 15% of the statewide vote, unless one candidate has more than 50%, in which case he wins all 25. In each of the state’s five congressional districts, three delegates will be awarded proportionally to candidates with 15% of the vote, unless, again, one had more than 50% of the vote in that district. The other three delegates are the elected state party leaders.

Oklahoma Predictions
Santorum wins 48% of 25 for 12
Romney wins 28% of 25 for 7
Gingrich wins 24% of 25 for 6

15 district Delegates
Santorum wins 7
Romney wins 4
Gingrich wins 4

Santorum wins 2 party leader votes, Romney 1

Totals
Romney: 12
Santorum: 21
Gingrich: 10

MASSACHUSETTS PRIMARY
Delegates at stake: 41
How it works: 11 delegates will be awarded proportionally to any candidate receiving more than 15% of the statewide vote. Another three delegates will be awarded based on the vote in each of the state’s nine congressional districts, again proportionally to any candidate receiving more than 15% of the vote. The other three delegates are the elected state party leaders.

Based on the rules it appears Santorum will be lucky to win even a handful. 
Totals
Romney 38
Santorum 3

IDAHO CAUCUSES
Delegates at stake: 32
How it works: According to the Idaho Republican Party, a secret vote will be held at each county caucus, lasting several rounds. In each round, the candidate with the least number of votes is eliminated until one reaches 50%. County results will then be tabulated statewide, with 29 delegates awarded proportionally based on the final tallies. The other three delegates are the elected state party leaders.

Note: That description from the LA Times differs considerably from this 
Idaho Caucus Explanation:

Voters will go to locations for their county and use ballots or tokens to support a candidate on Tuesday, March 6th. There are five candidates for Idaho voters to choose from and they will keep voting until a winner is selected.

In each round the candidate with the fewest votes or anyone with less than 15% is out of the race. The voting ends at the county level when there is a final vote for two candidates or one has more than 50% of the vote for that county.

The delegates assigned for that county will then represent the winning candidate. Counties will report their winner to the state office in Boise. If one candidate has more than 50% of the vote for all of Idaho, they get all 32 delegates. Otherwise, the candidates split delegates they won in each county

Predictions 
Assuming the LA Times is correct, the delegate totals will be split between Mitt Romney and Ron Paul. Otherwise Paul or Romney will win them all.

Scenario 1: Mitt Romney: 18 Ron Paul: 14
Scenario 2: Mitt Romney 32
Scenario 3: Ron Paul 32

NORTH DAKOTA CAUCUSES
Delegates at stake: 28
How it works: The caucuses will begin the process of allocating delegates to the national convention, but all 28 will remain unbound, meaning they can ultimately vote for whichever candidate they choose.

Predictions
This is somewhat of a crapshoot but no one is likely to dominate and Paul’s organization in caucus states should help.

Romney: 8
Santorum: 7
Paul: 7
Gingrich: 6 

ALASKA DISTRICT CONVENTIONS
Delegates at stake: 27
How it works: 24 delegates will be awarded on a proportional basis to candidates, based on the statewide vote, at individual district conventions. The other three delegates are the elected state party leaders.

Predictions
This is another crapshoot but one that favors Santorum and Romney
Totals
Romney: 10
Santorum: 11
Paul: 3
Gingrich: 3 

VERMONT PRIMARY
Delegates at stake: 17
How they’re awarded: 11 delegates will be awarded on a proportional basis to any candidate receiving more than 20% of the statewide vote, unless one candidate received a majority. Another three delegates will be allocated to the overall statewide winner. The final three delegates are the elected state party leaders.

Rules are such that Romney will walk away with the lion’s share
Predictions
Romney: 15
Santorum: 2

Denying Greece Citizens Their Democratic Rights Sarkosy Now Does Same to the French

Filed under: Uncategorized — Mr. Craig @ 6:00 pm

Sarkozy Breaks Campaign Pledge, Says Treaty Too Complicated For A Vote

 French president Nicolas Sarkozy is campaigning on a pledge to consult people directly on “significant issues”. However, despite trailing in polls, Sarkozy refuses to agree to referendum on EU fiscal treaty.

Mr Sarkozy, who is trailing the socialist François Hollande in opinion polls seven weeks before the presidential election, came under pressure to promise a referendum on the pact after he pledged to consult the people directly on significant issues if re-elected.

“No,” he replied when asked on French radio yesterday if he would put the treaty to a public ballot. “If you’re dealing with a treaty with 200 articles, 250 articles, I can’t see how you’d formulate a clear question.”

The French electoral calendar means the treaty cannot be passed by parliament until after the election. Mr Hollande has said he will seek to renegotiate parts of the deal if he wins, a move that has been criticised by Mr Sarkozy and German Chancellor Angela Merkel.

Arnaud Montebourg, a prominent party figure who came third in the presidential primary last autumn and has been campaigning for Mr Hollande, went further than the candidate by predicting the treaty “will never be ratified”.

Mr Montebourg said a left-wing majority in France would never vote for the pact, while there was “not a majority” in favour of it in Ireland, the UK or other European countries. “The ‘Merkozy’ treaty would inflict austerity on all of Europe and plunge us dangerously into recession,” he said.

Too Complicated To Form a Clear Question?Sarkozy says “I can’t see how you’d formulate a clear question.

So WHY would Sarkosy say this… 
Sarkozy started his presidential campaign pledging to be the “president of the people” and saying he wants to give to the people the power to decide about some issues: particularly he said he is going to propose a referendum about a couple of issues, immigration laws and unemployement benefits. As you can easily imagine, these are “minor” subjects for a referendum, normally dealt by executive power.So, it is very contradictory that he does not want a referendum about the European Treaty, even more in the light of the fact that in recent years France held two referendums about Europe: one about Euro introduction and another about approval of the European treaty signed in 2006 (possibly as complicated as this one). Clearly he knows the topic is a referendum on his own policies and he wants to avoid this.

Spain Following Greece as A Fast Pace DOWN.

Filed under: Uncategorized — Mr. Craig @ 5:30 pm

Sharpen the Mower: Spain Needs Triple the Budget Cuts and Tax Hikes to Meet EMU Imposed Budget Targets

 Conditions in Spain have deteriorated at a rapid pace. As little as a few months ago the Spanish economy was foolishly projected to grow at .7%. Now it expected to contract 1%.
Likewise, Spain’s budget deficit was supposed to shrink to 6% in 2011 and 4.4% in 2012. Instead it rose to 8.51 percent in 2011, up from a revised estimate of 8.2% which was up from a revised estimate of 6.5%.

I think you can see a clear pattern here and as a result, the EU Commission Pressures Spain for Explanations.

Spain must explain soon to the European Commission why its 2011 budget deficit was substantially higher than expected and deliver clear future budget plans, the Commission said on Tuesday.

Spain’s 2011 budget deficit came to 8.51 percent of GDP, the finance minister said on Monday, up from early estimates of 8.2 percent and far above forecasts from the Commission for something nearer 6.5 percent.

“We need to understand the causes of this significant slippage,” Commission spokesman Olivier Bailly told a regular briefing in Brussels.

Spain will have to come up with more than 40 billion euros in savings to meet that target, implying spending cuts that most economists see as impossible given that the economy is already slipping into recession and the jobless rate is the highest in the European Union at 23 percent.

Bailly said Spain also needed to deliver its 2012 budget estimates in the coming weeks, not at the end of March, saying the task in hand was so great it could not be delayed.

Sharpen the Mower

My friend Bran notes that Spain now needs to come up with another 30 billion Euros in budget cuts on top of the 15 billion promised. Moreover, those cuts need to be spread out over 9 months, not 12. 

This set of facts prompted the Spanish Gurus Blog to write Sharpen the mower. Spain’s deficit exceeds 90 billion euros.

Specifically, Spain’s budget deficit is 91.3 billion euros, 8.51% of GDP. So it should not take a wizard to realize the simple mathematical fact that team Rajoy has not yet begun with budget cuts and tax increases, if by 2012 Spain is to meet the 4.4% of GDP deficit target set by creditors. 

The measures announced in December were only an appetizer. Instead of sharpening the blades, I think a good lawn mower would be more practical.

The announced cuts and tax increases of last December (income tax, capital gains), are expected to generate about 14,900 million. 

To meet the objective of a 4.4% deficit, in 2012 the government deficit should not exceed 46,500 million euros.

To do so requires a nearly 30 billion euros hole to be filled, with the aggravating circumstance that it’s now March and those 30 billion euros need to come in the next 9 months.

This figure is double the cuts and tax increases approved last December. So Rajoy has quite imagination if he expects this to happen.

I modified that translation substantially, but I am pretty sure I have it accurate. Spain’s unemployment is already 22.9%. What pray tell would another 30 billion in cuts or tax hikes do to that number?

By the way, to go from 15 to 45 is tripling (not doubling) the tax hikes and cuts. 

Many structural reforms pertaining to jobs and work rules are quite necessary. The accompanying tax hikes are not and the Spanish economy is poised to implode as a result. 

Global Economy Sparks Currency Wars

Filed under: Uncategorized — Mr. Craig @ 4:03 pm

Brazil Declares New Currency War on US and Europe; Japan Losing Balance of Trade Battle

 In hope-against-hope scenario, countries with balance-of-trade surpluses struggle to maintain it. Put Japan, Germany, Brazil, and China in that group. 
In that group, Japan is losing the Balance of Trade Battle.

Japan’s trade deficit widened to a record level in January, as falling exports combined with surging imports of energy. 

Imports rose 9.8 per cent from a year earlier, while exports were down 9.3 per cent, resulting in a record monthly deficit of Y1.48tn ($19bn).

Last year Japan’s trade balance fell into an annual deficit for the first time since 1980, driven by subdued global demand and soaring fossil fuel imports in the wake of the Fukushima nuclear power crisis.

Japan reported a trade deficit equivalent to 1475 Million JPY in January of 2012. Exports have been the main engine of Japan’s economic growth in the past six years. Japan imports raw materials and processes them into high technology products. Japan’s major exports are: consumer electronics, automobiles, semiconductors, optical fibers, optoelectronics, optical media, facsimile and copy machines. Its main trading partners are The United States, China and European Union.

Brazil Declares New Currency War on US and Europe

The Financial Times reports Brazil declares new ‘currency war’

Brazil has declared a fresh “currency war” on the US and Europe, extending a tax on foreign borrowings and threatening further capital controls in an effort to protect the country’s struggling manufacturers.

Guido Mantega, the finance minister who was the first to use the controversial term in 2010, said the government would not “sit by passively” as developed nations continue to pursue expansionary monetary policies at the expense of Brazil.

“When the real appreciates, it reduces our competitiveness. Exports are more expensive, imports are cheaper and it creates unfair competition for businesses in Brazil,” he said on Thursday after announcing changes to the so-called IOF tax.

In a presidential decree, the government extended the existing 6 per cent financial transactions tax on overseas loans maturing in up to three years. Previously, the levy was applied only to loans with maturities of under two years.

President Dilma Rousseff later weighed in on the debate, vowing to defend Brazilian industry and stop developed countries’ policies from causing the “cannibalisation” of emerging markets.

The move comes as Brazil’s central bank also steps up direct intervention in the market, selling dollars and offering derivatives called reverse currency swaps to curb the real’s near 9 per cent surge against the US dollar this year.

Brazilian Real vs. US Dollar 

The chart shows the Brazilian Real has pretty much been on a tear vs. the US dollar since 2003. Now Brazil is concerned about loss of exports, just as Japan is concerned about loss of exports. 

Mathematically speaking, the desire for every country to be net exporters is impossible. Massive trade wars are on the horizon  as a result.

France and Germany: A Tale of Two States Not Equal

Filed under: Uncategorized — Mr. Craig @ 3:55 pm

French-German Border Shapes More Than Territory

By STEVEN ERLANGER
SÉLESTAT, France — This ancient town in the center of Alsace boasts the extraordinary Humanist Library, dating from the 15th century. But less proudly, Sélestat also has an unemployment rate of about 8 percent, much higher than towns just across the border in Germany.
In Sélestat, France, the unemployment rate among those under 25 years of age is 23 percent. 

Emmendingen, a German town of 27,000 that is only slightly larger than Sélestat and barely 20 miles away, has an unemployment rate of under 3 percent. Among those under 25 years of age, the unemployment rate in Sélestat is 23 percent; in Emmendingen, it is 7 percent.

The divergent economic circumstances of these two towns are striking, particularly given the cross-border cultural ties in the region. The reasons for the disparities, much debated, have emerged as a focal point of the French presidential campaign.

Fighting for his re-election, President Nicolas Sarkozy of France has said with characteristic bluntness that the French should become more like the Germans. In a recent joint television interview with Chancellor Angela Merkel of Germany, he raised Gallic eyebrows by mentioning the word Germany or German at least 15 times, or about once a minute.

But the issue for Mr. Sarkozy is job creation. Unemployment in France is at a 12-year high and rising. Germany’s unemployment rate, at 7.4 percent, is at its lowest point since reunification in 1991.

If re-elected, Mr. Sarkozy proposes a national referendum to approve a more flexible labor market, featuring a German-style apprenticeship. He wants to allow more part-time work, like the Germans, and to subsidize more jobs for youth and raise the value-added tax to reduce the cost of social-welfare charges for employers, as the Germans do, too.

His Socialist opponent, François Hollande, rejects most of those ideas, preferring more traditional Socialist responses like more state spending on education and job creation. Many French admire the Germans but do not want to emulate them.

“We appreciate their rigor and discipline, but that’s not all there is in life,” said Alexandre Boer, 52, who works here in Sélestat with young people facing long-term unemployment. “We’re not in 1945 anymore. That was also the German model.”

Mr. Sarkozy and Mrs. Merkel have had a strained relationship, but it has improved markedly in the pressure cooker of the euro crisis, and Mrs. Merkel once had plans to campaign for him. But she appeared to back off recently when it seemed that her open support might hurt Mr. Sarkozy more than help, by wounding French pride and making him look like a supplicant.

Nevertheless, Mr. Sarkozy is betting that the problems in the French economy, where youth unemployment is 23 percent nationwide and exports are declining, are so profound that voters will overcome their deep-seated reluctance and be more receptive to at least a variation on the German model. But it is not always clear what that would entail, and whether the French would ever stand for it.

One thing is abundantly clear, however. The German economy has powered far ahead of France’s, and the gap is widening every year. Germany has maintained its industrial base and competitive edge, both technologically and in terms of cost, while France lacks a large sector of medium-size industrial enterprises and depends much more on services. The French share of global exports has steadily fallen, while the German share has steadily risen.

French salaries have increased in real terms while German salaries have fallen, making French workers more expensive and thus less productive and competitive. French social protections for the unemployed are also much more lavish, especially after the Germans pushed through the so-called Hartz reforms, which largely limited unemployment benefits to 12 months. In France, the duration is 23 months for those under 50 and three years for those over 50, many of whom never work again.

In part to pay for those benefits, the cost to business of an hour’s labor is 11 percent higher in France. But there is less job security in Germany, and more Germans do part-time work. The Germans do not have a centrally fixed minimum wage, as the French do.

The practical results of these trends are visible in these border towns, where the shape of industry — largely small- to medium-size metal-working companies or factories — is similar. For example, there are 10 times as many job offers a month on the German side as on the French one, said Norbert Mattusch, who works on cross-border cooperation for the German Federal Employment Agency in Freiburg.

While some Germans cross the border to work in France, few French do the same, except for seasonal labor at the large amusement park nearby, Europa-Park, the largest in Germany and the third-largest in Europe, which draws many French-speaking customers.

“We have job openings right now for 70 drivers of heavy trucks,” Mr. Mattusch said. “But the big problem is that the French don’t speak German,” so they cannot qualify for the jobs, and young people here no longer speak the Alsatian dialect, once used on both sides of the border. The mayor of Emmendingen, Stefan Schlatterer, says that “there is a job here for anyone who can count to ten,” but one needs to count in German.

Salaries on the German side are higher for similar work, goods are cheaper, the cost of hiring a full-time employee is lower and the relationship between German workers and their bosses is more supple and flexible, freer of the centralized regulations, ministries and unions characteristic of France.

Emmendingen, a German town of 27,000 that is only slightly larger than Sélestat and barely 20 miles away, has an unemployment rate of under 3 percent. 

But while the French may admire German rigor, they are reluctant to make some of the same sacrifices, including longer hours and less job security.

Boris Gourdial, director of the Freiburg branch of the German Federal Employment Agency, said that mentalities were different, despite shared history and proximity. “The French work to live and the Germans live to work,” he said, a cliché that still resonates.

His French colleague, Roxane Pierrel, who runs the employment office in Sélestat, smiles politely. She points out that the French have more children than the Germans and more women are in the work force, which swells the numbers looking for work. But she acknowledges that the Germans are doing better at job training for young people, especially with a nationwide apprenticeship system that Mr. Sarkozy wants to introduce more widely in France. “The systems may be different,” she said. “But all the enterprises on both sides of the border are looking for competence.”

Many labor experts single out the German apprenticeship system as a major competitive advantage. It takes young people out of the university track at 16 and trains them in industrial skills, as they simultaneously study for a technical degree and work for a salary. They often get full-time jobs with companies that have invested in training.

Unlike in the rest of France, there is a vestigial apprenticeship system in Alsace, which was at different times a part of Germany. But it is closer to a French “alternance” model of vocational training, which also combines education and work, but is less widespread among companies and less popular.

Many French parents and their children still regard a vocational degree or apprenticeship — instead of a university degree — as a sign of stupidity or failure, Ms. Pierrel said. “We have to convince young people, since it’s not well accepted in the family,” she said. In France, “it means being a bad student. In Germany, it doesn’t devalue someone.”

But she is beginning to see a change, she said. “Companies here are working with schools to promote apprenticeships,” and more young people see the advantage of a salary at a decent job as preferable to unemployment.

Marcel Bauer, the mayor of Sélestat and its 21,000 people, also sees a change. He says he is proud of the local apprenticeship system, which he thinks should be developed in the rest of France. But unlike in Germany, where the states and localities can set many of their own rules, in France, he said, “the national Education Ministry wants to keep all control.”

Mr. Bauer also bemoans the constant labor warfare in France. “German workers accept that they must make efforts in a crisis, and work less and earn less to keep their jobs.” But “with us,” he said, “it’s an immediate battle and a strike and people in the streets.”

Mr. Bauer, mayor since 2001, has also been promoting more bilingual classes, so local students will learn some German. He has been trying to promote more regional partnership with the Germans, including with Emmendingen’s mayor, Mr. Schlatterer.

Both mayors speak emotionally of the importance of French-German cooperation. “I feel the center of the European idea is the really close partnership between France and Germany,” Mr. Schlatterer said. “When France and Germany are close to one another, Europe works.”

EuroZone Struggles with Sever Unemployment and Recession Possible Deflation

Filed under: Uncategorized — Mr. Craig @ 3:30 pm

Eurozone Wrapup: Unemployment Rate 10.7%, Highest Since 1999; Manufacturing PMI Contracts 7th Month; German Retail Sales Unexpectedly Fall.

There was lots of Eurozone news this week outside of the typical Greek default fodder. Nearly all of that news was not pretty. Let’s take a look at the key stories.

Eurozone Unemployment Rate 10.7%, Highest Since 1999

The Telegraph reports Eurozone unemployment hits record high of 10.7pc

Data from Eurostat showed that the region lost 185,000 jobs in one month, with the vast gap between North and South growing ever wider. The figures for the previous four months were also revised upwards sharply. There are now more than 450,000 more people without jobs than assumed a month ago.

Klaus Baader from Societe Generale said the outlook was “deteriorating drastically” in the region. “Economic slowdown and fiscal austerity has hit the labour market much harder than previously thought.”

Eurozone inflation nudged up to 2.7pc, while the latest PMI data for February confirmed that Euroland’s manufacturing is still contracting, though the index rose slighty to 49. The “misery mix” of rising unemployment and inflation is a nasty headache for policymakers, threatening incipient stagflation.

Spain’s jobless rate continued its relentless climb to 23.2pc, rising to 49.9pc for youths.

The jobless toll rose to 14.8pc in both Ireland and Portugal, though the latter began its austerity drive later. Dimitris Drakopoulos from Nomura said Portugal’s economy is likely to contract by 4.4pc this year and another 2.7pc next year, a slightly milder version of the fiscal asphyxiation that brought Greece to its knees.

Eurostat’s 19.9pc rate for Greece is already out of date. The Hellenic Statistical Authority said the country lost 126,000 jobs in November alone, pushing the rate to 20.9pc.

At the other extreme, Austria’s jobless rate fell to 4pc. Germany’s unemployment is at a 20-year low of 5.8pc, and some regions are crying out for skilled workers.

Italian Unemployment Hits Record

Please consider Italian unemployment hits record

The unemployment rate in the eurozone continued to rise in January, hitting another record high. There are now 16.9 million people out of work in the bloc, Eurostat said.

In Italy, the unemployment rate rose to 9.2% in January, the highest since monthly records began, the national statistics agency Istat said.

Italian unemployment had stood at 8.9% in December, but it is now at the highest rate since the first quarter of 2001, as the country finds itself in a second recession in four years.

‘Double whammy’

Meanwhile, separate data from Eurostat showed that inflation in the euro area rose to 2.7% in February, rising slightly from 2.6% in January. It marks the 15th month in a row that inflation has been above the ECB’s target of just below 2%.

Howard Archer, chief European economist at IHS Global Insight, said it amounted to a “double whammy of bad news” for the eurozone. “This is particularly bad news for consumers, as they are not only facing high and rising unemployment, but also still squeezed purchasing power,” he said.

French Unemployment Rate Hits 9.4 Percent 

Please note French unemployment up to 9.4 per cent in Q4 of 2011

France’s unemployment rate rose by 0.1 per cent in the fourth quarter of 2011 to 9.4 per cent of the active population, state statistics agency INSEE said on Thursday.

The 0.1 per cent rise applied to both the increase from the third quarter of 2011 and the year-on-year increase from the fourth quarter of 2010.

France’s growing joblessness is a major issue as President Nicolas Sarkozy bids for re-election in an April-May two-round presidential election.

Eurozone Unemployment Rates at a Glance

  • Eurozone Average 10.7%
  • Spain 23.2%
  • Greece 20.9%
  • Ireland 14.8%
  • Portugal 14.8% 
  • Latvia 14.7%
  • Lithuania 14.3%
  • Estonia 11.7%
  • Cyprus 9.6%
  • Italy 9.2%
  • France 9.4%
  • Germany 5.8%
  • Luxembourg  5.1%
  • Netherlands 5.0%
  • Austria 4.0%

Take a look at those varying unemployment rates. That is what a “one size fits Germany” interest rate policy and misguided currency union will do.

About that 5.8% German Unemployment Rate

Is Germany’s unemployment rate really 5.8%? I think not. Wolf Richter comments on the German Unemployment Obfuscation.

Richter counts up all the groups that don’t count and comes up with 1,701,534. That number is a bit off the mark given the officially unemployed number is 3,081,706 but 5,394,064 people actually received unemployment compensation.

There’s still more obfuscation as shown in the following snip.

People 58 and older are excluded from the official unemployment numbers, even if they’re desperately looking for a job. They don’t receive unemployment compensation but, conveniently, pre-retirement compensation. So they don’t count for the simple reason that they’re too old to count. That’s the German baby-boom generation. They’re turning 58 in massive numbers and fall unceremoniously off the unemployment lists. In September 2011, the last month for which official numbers were available: 374,592.

Add them to the 5,394,064 official recipients of unemployment compensation to obtain 5,768,656.

And what about those who aren’t eligible for unemployment compensation? While they receive “social aid” and other forms of support, they don’t count as unemployed.

So, like in the US, the actual number of unemployed people and the actual unemployment rate remain a mystery, despite the confidence-inducing but false sense of accuracy that these grotesquely unrounded numbers provide. And in the end, unemployment in Germany is probably close to double the official headline number.

So what’s the real German unemployment rate?

German Retail Sales Unexpectedly Fall

Bloomberg reports German Retail Sales Unexpectedly Fall

German retail sales unexpectedly declined in January as rising oil prices fueled inflation.

Sales, adjusted for inflation and seasonal swings, fell 1.6 percent from December, when they increased 0.1 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a gain of 0.5 percent, the median of 22 estimates in a Bloomberg News survey showed

Europe’s debt crisis is curbing growth across the euro area, Germany’s largest export market, and higher energy costs pushed inflation to 2.5 percent last month. Still, unemployment is running at a two-decade low and recent data suggest the country may avoid a recession. Consumer confidence will increase to a 12-month high in March, [consumer research group] GfK SE (GFK) predicted this week. 

German companies may create as many as 250,000 new jobs this year, the DIHK national industry and trade chambers said on Feb. 17, citing a survey.

Avoid a Recession?

What the hell is Bloomberg writer Jeff Black smoking? The recession is right here, right now. As for jobs creation, forget about it. The European-wide recession is going to be long and deep, so who pray tell is Germany going to be exporting to?

By the way, why was this drop unexpected? I have been calling for it for some time, and it’s going to get worse, much worse.

Eurozone Manufacturing PMI® Contracts 7th Consecutive Month

Inquiring minds are reading the Markit Eurozone Manufacturing PMI® Report.

The Eurozone manufacturing sector showed further signs of stabilisation in February. The seasonally adjusted Markit Eurozone Manufacturing PMI® rose to a six-month high of 49.0, unchanged from the earlier flash estimate and above January’s 48.8.

New Orders Fell 9th Month  

New orders fell for the ninth month running (though slightly less than indicated by the flash release), with the downturn in demand generally remaining broad-based by nation as only Austria and the Netherlands reported increases. Greece saw record falls in both output and new orders.


Export Orders Fall 8th Month

The level of new export orders fell for the eighth month running, albeit at the weakest pace since last July. The drop in foreign demand was led by a steep reduction in Greece and marked falls in Spain and Germany, the region’s largest exporter.


Muted pricing power resulting from weak demand and strong competition meant that the rise in costs was largely absorbed by manufacturers.

German job creation slowed sharply

Job losses were reported for the third time in the past four months in February. The steepest falls in employment were seen in Greece and Spain, though further marginal cuts in staffing levels were also signalled in Italy, the Netherlands, Austria and Ireland.

Stabilization? Really? No, Not Really!

Given the drop in  new orders, export orders, and German employment, coupled with rising input prices and a huge profit squeeze, it takes a real stretch of the imagination to even hint at stabilization. Moreover, austerity measures in Spain, Portugal, Greece, France, and Ireland suggest things are going to get much worse. 

There is no way the vaunted German export machine stays intact in the face of those facts.

Within two months, and probably next month, the bottom will fall out of numerous eurozone production and retail sales numbers. Moreover, the lid will blow off the top of numerous eurozone unemployment numbers.

In both cases, the biggest “unexpected” downward surprises will be in Germany, even though it should be perfectly obvious what is going to happen.

The Underground Railroad Exists in North Korea

Filed under: Uncategorized — Mr. Craig @ 3:00 pm

BANGKOK, Thailand — In the beginning, they arrived in ones and twos across the Mekong River. They were dirty, skeleton-thin and scared to death.

Sugint Dechkul, a small-town lawyer in Thailand’s far-northern Chiang Rai province, had no idea what to make of them. They’d wander up the riverside country road near his home, sometimes begging for food or shelter in an alien tongue.

“We’d ask, ‘Where are you from?’ They couldn’t answer,” Sugint said.

Finally, through painstaking pantomime, one of the stragglers conveyed his origins. North Korea. Nearly 3,000 miles away.

That was nine years ago. Today, the so-called “underground railroad” traveled by North Korean defectors increasingly terminates in Thailand.

“The first ones looked like they hadn’t showered in a month. Now they come in big groups. They know their way and they know what they’re doing.”

~Sugint Dechkul, a small-town lawyer in northern Thailand

In recent years, North Korean defectors’ network has discovered Thailand is the gateway to their dreams: resettlement in Seoul, South Korean citizenship and thousands in cash to start life a new life. Though this tropical nation is distant from the often chilly Korean peninsula, it is the nearest reachable ally of South Korea, which maintains a policy of financially aiding and patriating its divided kin.

“The first ones looked like they hadn’t showered in a month,” Sugint said. “My children begged us, saying ‘Mommy, Daddy, you have to help them.’ Now they come in big groups with kids on their back. They know their way and they know what they’re doing.”

The journey to Thailand can take months and the path is lined with informants and extortionists. Capture in neighboring China means certain deportation and quite possibly execution. If not killed, those returned to North Korea can expect slave labor in a string of camps believed to hold 200,000 prisoners.

But for North Korean defectors such as Joseph, who grew up starving under dictator Kim Jong Il’s regime, the alternative was slowly wasting away on a family farm.

“We were starving,” said Joseph, using his English-language pseudonym. “So many people back home had died.”

Fleeing famine

Many escapees flee when the Yalu River, dividing China and North Korea, freezes over in winter. But Joseph’s family simply found a shallow bend to swim across. They hoped that border guards would not spot them and fire their Kalashnikov rifles.

Against the odds, they linked up with an underground Christian network managed in part by former defectors. Joseph, then 13, was taken aback by his first spoonfuls of pork and chicken while he was hiding out at a Chinese safe house.

“I had never really heard of these animals,” he said. A Chinese couple who sheltered his family at the risk of long prison terms also offered him a slice of birthday cake. It was spongy, sweet and somewhat repellant. “I didn’t like it at all. I had only eaten rice and vegetables that my parents grew.”

Along with cake, the family who housed them introduced Joseph and his family to another foreign concept: Jesus.

“No one in North Korea knows about Christianity,” he said. “But they told me about it and I was saved. I know now that God had helped us many times.”

Christianity, practiced by roughly one-third of South Koreans, is the de facto faith of the so-called “underground railroad” network, said a long-time activist with more than a decade’s experience on the circuit.

Despite several stints in Chinese prison, a U.S.—based South Korean native — who wished to remain anonymous due to fear of punishment by the Chinese government — said he still helps with escapes funded by donations raised in America. He also claims to have branded these routes the “underground railroad,” a nod to escape trails used by American slaves in the 1800s.

“When they first get out of North Korea, they look really shabby and skinny,” he said. “We make them stay at a church member’s house for a month, just to eat.” It usually takes a month’s worth of steady meals, he said, to put meat on their bones.

“After eating, they look more or less Chinese and we can put them on public transportation,” he said. ““We give them new clothes, new shoes, sometimes fake Chinese IDs.”

The mission, he said, is to slip them out of China, where agents actively pursue escapees and their guides. “Phone calls? 100 percent, they’re listening. Emails? 100 percent, they’re reading,” he said. “Nothing is safe in China.”

The second escape

In the 1990s, the network had luck shuttling North Koreans along a 15-hour bus route to Mongolia. This method was cheap, he said, costing the network only about $500 per refugee.

But the Chinese clamped down and fortified the border with guards and spies. Networks have since shifted towards southwest China, where state control is a bit looser, and into bordering nations such as Vietnam, Laos and Burma. From there, many hope to reach Thailand.

These routes expose escapees to more than a week’s worth of bus and train rides riddled with random checkpoints. The totalitarian regime in Burma, and communist-ruled Laos and Vietnam, have proven largely unsympathetic to North Korean refugees.

“My family made it to Laos, but we were caught,” Joseph said. “We tried to say we were South Korean missionaries, but they didn’t believe us. We had no passports or South Korean money.”

Mercifully, they were only bounced back to China. The family was later spirited into Burma near treacherous jungles controlled by the United Wa State Army, a heavily armed ethnic militia funded largely by methamphetamine production.

Again, Joseph and his family were caught by police. But somehow, he said, a South Korean diplomat found them in a Burmese prison, paid for their release and brought the family to Thailand under the South Korean government’s care.

Joseph is now 24 and working for a Seoul-based network, Durihana, that aids fellow North Korean defectors. Born into severe malnutrition, he stands only 4’11.” “I’m still pretty skinny,” he said.

“Thailand is different from the other countries,” said the veteran U.S.-based activist. “They don’t exactly welcome them because they’re illegal entrants. But the refugees know if they surrender, they’ll be safe in a detention center and handed over to the South Korean embassy.”

 The final destination

According to figures obtained by the Bangkok Post newspaper, Thailand’s immigration police detained only 46 North Korean illegal migrants in 2004. But last year, according to their figures, police processed nearly 2,500.

“I know it’s a human rights issue and, in my heart, I like to see them get help,” said Gen. Pansak Khasemasanda, a senior-ranking member of Thailand’s immigration police. “But whoever comes illegally, even if they’re North Korean, has to follow the law.”

“The burden lands on us,” he said, “because they sleep right in this cell over here.”

North Koreans who reach Thailand, however, are almost guaranteed support from South Korea. Once vetted, they’re released at a less intimidating Thai border — Bangkok’s chief international airport — with a light fine and a plane ticket to Seoul purchased by the South Korean government.

What follows is interrogation by South Korea’s CIA equivalent, months of rehabilitation and release into society with an initial payment of roughly $3,000, according to sources in the defectors’ network. About half of that payment is often owed to the network that funded their months-long escape.

Despite repeated enquiries, South Korea’s Bangkok embassy would not discuss their system of aiding North Koreans caught in Thailand. At Bangkok’s North Korean embassy, a man who answered the main line became irate when the subject was raised.

“Maybe you should just talk to these brokers because they’re the ones who allow these actions,” he said before hanging up.

These days, many escapees reach Thailand’s far north by hitching a ride on Chinese cargo ships that travel several hundred miles down the Mekong River, said Sugint, the lawyer in Thailand’s Chiang Rai province.

“For a little money, I think, a Chinese border guard might close one eye,” he said. The less fortunate have to take the old-school route: plodding the jungles of Laos undetected.

As they did nearly one decade ago, refugees continue to drift across the Mekong River at a port near Sugint’s home office, he said. But they are seldom as panicked and ragged as they once were.

He recalled a refugee years ago who was held at a police station for several hours until a bewildered cop, unable to communicate with the detainee, rolled back the cell doors and signaled for him to walk out. The frightened man gripped his seat and refused to budge.

“Now, they seem more relaxed, look clean and can even speak a little Chinese,” said Sugint, who has made a hobby of helping them fall into police custody safely. He’s even prodded his son to learn Korean and serve as the family’s pro bono translator.

“They’ve actually have money on them now,” Sugint said. “The first thing they want are cigarettes and a phone card to start making calls.”

Republican Primary… It Ain’t Over Till It’s Over… The Never Ending Saga

Filed under: Uncategorized — Mr. Craig @ 2:35 pm

Mitt Romney avoided a major political nightmare last night, narrowly edging out Rick Santorum in Michigan’s critical Republican primary. 

 “We didn’t win by a lot,” Romney told supporters in Michigan Tuesday night. “But we won by enough and that’s what counts.”  (A fallacy in real life ) 

But while Tuesday was undoubtedly a victory for Romney, it will do little to quell doubts about the viability of his candidacy. Even with home-state advantage, Romney had to spend millions to defeat Santorum in Michigan, and still only managed to eke out a 3-point lead.

The Santorum campaign is now declaring the race a “tie,” noting that it looks like the two candidates will split the state’s 30 delegates.  

“I don’t know how you look at that as anything besides this being a strong showing for Rick Santorum and anything short of a disaster for Mitt Romney,” Santorum advisor John Brabender told reporters Monday. ““If we can do this well in Romney’s home state, this bodes well for Super Tuesday.”

The pressure is now on Romney to translate momentum from last night into a string of decisive victories this month. But there is every indication that the problems Romney faced in Michigan will continue to plague his campaign as the race heads into next week’s 10 Super Tuesday contests.

Here’s a quick look at where the races stand: 

Ohio (66 Delegates):

If you thought Michigan was bad, get ready for Act II of the Mitt-Rick death match. Both campaigns view Ohio as a “must-win” state on Super Tuesday, and the candidates will arrive in the state this week battle-tested and ready for a rematch.

Santorum is currently leading the state by between 7% and 11%, according to the latest polls. The former Pennsylvania Senator has a natural affinity with Ohio’s blue-collar voters, as well as with religious conservatives in the southwestern part of the state. Romney, who struggled with blue-collar voters in Michigan, is going to have to maintain focus on economic issues — and keep his rich-guy gaffes to a minimum — if he wants to win this bellwether swing state. 

Negative attacks and political trickery are also bound reach new heights in the Buckeye primary, as SuperPACs supporting Santorum, Romney, Newt Gingrich, and even Barack Obama pour money into the state. Bottom Line: This is where the 2012 race could start to get really dirty and really crazy. 

The South — Georgia (76), Tennessee (58), Oklahoma (43): 

Michigan exit polls show that Romney is still not connecting with the GOP’s right-wing base, including evangelicals, Tea Party supporters, and voters who identify as “very conservative.” These voters make up a substantial proportion of the Republican electorate in the three Southern Super Tuesday states, making them unfriendly territory for the Mormon Northerner. 

The numbers bear this out. In Georgia and Oklahoma, Romney is polling in third place behind Gingrich and Santorum. Polls in Tennessee are inconclusive, but both Gingrich and Santorum have campaigned there this month, while Romney has been largely MIA. 

In the end, it looks like the only hope for Romney in the South is a Gingrich-Santorum murder-suicide. Santorum has indicated that he aims to knock Gingrich out of the running. But the former House Speaker warned Tuesday that he plans to fight back, specifically by highlighting Santorum’s labor record, a hot-button issue in the Right to Work South.

The Caucus States — Idaho (32), North Dakota (28)*: 

Although Santorum has won the popular vote in three of the four Republican caucuses, his lack of campaign infrastructure probably means that most of those delegates will go to either Romney or Ron Paul, the only candidates with strong caucus field organizations. 

The situation will likely be similar in North Dakota, where delegate commitments to specific candidates are voluntary. Idaho’s caucus is binding, with delegates allocated proportionally by county. Romney, Santorum, and Paul appeal to very different constituencies here — Mormon, evangelical, and student/Western libertarian, respectively — so all three have a chance of picking up delegates. 

*Alaska will also start its caucuses on March 6, but results aren’t expected until later in the month

The Romney States — Virginia (49), Massachusetts (41), Vermont (17):

These states represent Romney’s best guarantee for picking up delegates on Super Tuesday. Unsurprisingly, none of Romney’s rivals plan to compete in Massachusetts. In Virginia, Romney and Paul are the only two candidates on the ballot, with the former holding a strong lead. Paul might pick up a few delegates in Vermont, but Romney is likely to take that state as well. But Virginia SHOULD NOT COUNT  Because there is no real choice… and I still Belive Massachusetts may not go to Romney.. especially in the November election. 

GM Electric Car Not Selling Well… Why Are We Surprised?

Filed under: Uncategorized — Mr. Craig @ 2:00 pm

“A General Motors spokesman announced today the plug-in hybrid electric Chevy Volt would stop production for five weeks and 1,300 employees would be temporarily laid off, according to a report in the Detroit Free Press.”

Now why would anyone be surprised about this… less than 30% of all automobile owners have a secure spot at home to “plug-in” and charge up…  and the amount of time to charge is long.. and the total range of travel is very limited…. so who in their right minds thought the electric are would be the end all and beat all….

Hydrogen  … in MY opinion… Was .. and still is… the best choice overall for us to use  … Fuel Cell Technology is  far more advanced than the battery technology… and besides, electric costs to plug-in are still higher than hydrogen…

COMMENTARY | General Motors, the recipient of so much government largess that it has been called “Government Motors” by critics of automobile company bailouts, as temporarily suspended production of the Chevy Volt.

Citing slow sales and what it called “exaggerated” media reports of the Volt’s problems such as the reported tendency of its batteries to catch on fire, GM has laid off 1,300 workers. It promises to hire them back and resume production in late April.

GM’s decision comes with it considerable embarrassment to President Barack Obama, who boasted at a GM plant in Detroit that he would personally buy a Chevy Volt when his presidency ends “in five years,” according to the CBS News affiliate in Philadelphia. The Wall Street Journal suggests this development imperils Obama’s goal of seeing a million electric cars on the road by 2015.

The production halt of the Chevy Volt is the latest example of the perils of Obama’s green industrial policy. Obama believes the government can drag the U.S. kicking and screaming into a green economy in which everyone tools around in electric cars and lights and air conditioners are powered by wind mills and solar panels. As William Tucker of the American Spectator points out, green energy technology is not only unready for the marketplace, but trying to force it into the market leads to scandals like Solyndra and howlers like Obama’s touting of “green slime” fuel.

Economists have known since Adam Smith and most likely even before that the aggregate wisdom of the marketplace, of millions of people making decisions based on their self interest, is far more adroit at driving an economy than the lofty dictates of politicians and bureaucrats. If people want electric cars they will buy them and there will be plenty of businesses willing to sell them. If they do not want electric cars, not even the mighty federal government can make them want them.

Obama can ruminate about people clinging bitterly to their God, their guns and their gas guzzlers all he wants. But he can no more make people cling to government and green energy than King Knut could cause the tides to roll out at his command. Government is limited in the United States by the Constitution. It is also limited by objective reality. Only God can work miracles and Obama is decidedly not God.

Why More People Do Not Leave North Korea

Filed under: Uncategorized — Mr. Craig @ 1:47 pm

Anyone Caught Defecting From North Korea Will See Three Generations Of Their Family Executed

On a grey afternoon in Seoul, in the shadow of the mountains that surround the city, North Korean defectors stood behind a police cordon and struggled to raise their voices above the sound of late-afternoon traffic.

 The defectors and their supporters have been gathering daily in front of the Chinese embassy in the South Korean capital in order to draw attention to a group of North Koreans currently being held in China.

While precise number of defectors being held in China is not known, there are believed to be between 30 and 40 of them. They are likely to be repatriated by the Chinese government and could face death or torture in their homeland. Reports last week said that a small group of them had already been deported.

“We can’t storm the Chinese embassy and force them to do anything, so we’re left to raise our voices in this way,” said Lee Seung Joo, one of the defectors attending the demonstration.

“We need to come together and let people in South Korea and around the world know about the tragic situation in North Korea,” he said.

While all defectors sent back from China are believed to face harsh punishment upon their return to North Korea, the group now in China is particularly at risk: the North Korean government has said that anyone caught defecting during the period of mourning for Kim Jong Il’s death would have three generations of family members executed.

International pressure on China not to repatriate the North Koreans is building, and defectors in South Korea are becoming increasingly involved.

“We’re trying to make this like the Arab Spring,” said one teenage defector, who asked to be referred to only by his surname, Kang. While that goal may be ambitious, this case has brought what appears to be a new level of engagement by defectors.

One defector, writing on the popular web portal Daum, wrote, “How can we urge the world and the South Korean government to rescue North Korean defectors if we ourselves don’t take action?”

Defectors are typically intimidated by South Korea’s advanced technology when they arrive here, but they are now taking advantage of social-networking tools to draw attention to the plight of those being held in China and the general human-rights problem in the North. Organizing online, the movement’s SaveMyFriend campaign has gathered more than 130,000 signatures.

Pressure is also coming from the South Korean government. Seoul is asking Beijing, its second-largest trading partner, to send the defectors to South Korea.

On Feb. 28, South Korea’s parliament passed a resolution demanding that China not repatriate the North Koreans to their country of origin. South Korea also raised the issue through the United Nations Refugee Agency, who has called on a humanitarian solution to the issue from China.

“We repeatedly stress that this issue must be dealt with from a humanitarian standpoint. China holds onto the belief that the defectors are illegal economic migrants,” Lee Kyu Hyung, South Korean ambassador to China, told reporters in Seoul on Feb. 20.

China doesn’t consider the North Koreans to be refugees fleeing a repressive regime. Under the terms of a deal with North Korea, China deports defectors as economic migrants lacking official permission to enter China.

This stance is at odds with China’s obligations as a signatory to the UN Convention Relating to the Status of Refugees. The convention states: “No contracting state shall expel or return a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social or political opinion.”

Cha In Pyo, a South Korean film star who starred in “Crossing,” a 2008 film about defectors, is attempting to recruit South Korean celebrities to help him appeal to the Chinese government to show compassion towards the predicament of defectors.

“They defected because they had nothing to eat. Punishing them with the death penalty is something that no human being should do,” said Cha in an interview. “I know there are more people who are interested, it’s just a matter of bringing everyone together.”

Kim Il Sim defected to South Korea via China in 2009. Her younger brother remained behind, and is now being held in China.

In an open letter to Chinese President Hu Jintao, she wrote, “Everything, my life and school, becomes meaningless when I think of my brother, who faces death if he is sent back to North Korea. Do you, Mr. President, have beloved children? I beg you to spare my brother’s life with a heart of a parent.”

Defectors have regrouped since the summer of 2011 when the North Korean human-rights bill failed to pass in South Korea’s National Assembly. If it had been passed, the bill would have provided support to North Korean human-rights groups and established a body in South Korea to catalogue human-rights abuses in the North.

Opposition lawmakers blocked its passage for fear of antagonizing North Korea. It was being pushed by defector groups, who were stung by that failure but appear to have come back stronger to face this issue.

But those most active in this situation insist on leaving political concerns aside. “More people are realizing that this isn’t a political issue,” said Kim Eun Young, program officer with Citizens’ Alliance for North Korean Human Rights.

“More defectors are paying attention because they understand what people in North Korea are going through,” she said. “They can hear their relatives’ voices.”

Fracking Deemed Safe in Poland… But is it Really??

Filed under: Uncategorized — Mr. Craig @ 1:32 pm

WARSAW, Poland (AP) — A scientific study in Poland has found that shale gas extraction at one site produced some toxic refuse but that the waste was reused and didn’t harm the environment.

The report was presented Friday by the Polish Geological Institute, which carried out its study last year when a company, Canadian Lane Energy, began test drilling near Lebien, in northern Poland.

Poland has some deposits of shale gas and is hoping to exploit them to cut its dependence on Russian natural gas. It hopes to repeat what has happened in the United States, where large shale gas discoveries in the past 10 years have given the country independence in the gas sector.

It is still unclear, however, how much shale gas there is in Poland, and the process of extracting it has come under fire by environmentalists.

In hydraulic fracturing, or fracking, a technology developed in the United States, large quantities of pressurized water and some chemicals are used to break underground rocks and release gas trapped in them. Most of the water remains underground, but some returns to the surface and is toxic.

“Cases of leakage and water contamination in the U.S. show that this is not a safe technology,”Katarzyna Guzek of Greenpeace told The Associated Press.

The report said the procedure at the site it studied produced some highly toxic liquid and some solid refuse, but that it was all either reused or utilized. Laboratory studies found no pollution to surface or ground water, soil or air, it said.

“Soil, air, water — the studies show that all these elements of the environment are safe if exploration of shale gas is conducted in accordance with legal regulations,” the study said.

Guzek said the study was carried out at the start of exploration in Poland and does not reflect dangers from a long-term activity.

Lane Energy is among more than a dozen international companies that have obtained licenses to explore for shale gas in northern and eastern Poland.

Advantage Romney in Washington State But Still Fails to Get Over 50%

Filed under: Uncategorized — Mr. Craig @ 1:30 pm

Mitt Romney won the Republican caucuses Saturday in Washington state. But that is not the actual VOTING only a caucus…. and failed to even break over 40% . There has not been a single republican Primary Event that Romney has collected over 50% so far. Not only that but Voter Turnout has been almost historically low.  Apathy over the entire field of Candidates for Republican does not bode well for November.

With 100 percent of precincts reporting, Romney captured 38 percent of the vote, followed by Ron Paul with 25 percent, Rick Santorum–about 500 votes behind Paul–with 24 percent, and Newt Gingrich with 10 percent.

None of the state’s 43 delegates were awarded Saturday, but the victory gives a sense of momentum to Romney’s candidacy, three days before the 10-state election on Super Tuesday. Washington is the fifth state in a row that Romney has won in the Republican Party’s presidential nominating process.

All of the candidates spent time campaigning in Washington, but Romney and Paul invested the most organizational effort. Neither Romney nor Santorum spent caucus night in Washington, choosing to campaign in Ohio instead, where 66 delegates are up for grabs on Tuesday. Only Paul is scheduled to be in the state when the results were announced. He was also the only candidate to buy air time in the state, spending $40,000 on television ads. He is planning to campaign in Alaska on Sunday.

In a speech in Blue Ash, Ohio earlier Saturday morning, Santorum downplayed his chances in Washington, saying it would be a “surprise” if he won there and emphasizing that his campaign was outspent in the state.

“We’re trailing in the polls out there, but we feel like we might do pretty well,” he said. “It would be a nice surprise heading into Super Tuesday’s events here to have a good lift out of the state of Washington.”

The campaigns will now turn their attention to the 10-state contest on Tuesday, when 419 delegates–nearly 40 percent of the number required to win the Republican Party’s presidential nomination–are at stake.

LONELINESS CAN KILL

Filed under: Uncategorized — Mr. Craig @ 1:30 am

Loneliness can send a person down a path toward bad health, and even more intense loneliness, studies have shown. But while some have assumed the culprit was a dearth of others to remind a person to take care of himself or herself, new research suggests there’s a direct biological link between being lonely and ill health.

Loneliness can set into a motion a barrage of negative impacts inside the human body — but with additional social contact, some of the ill effects can be stopped.

John Cacioppo, a University of Chicago social psychologist who studies the biological effects of loneliness, presented some of his latest research at the Social Psychology and Perception meeting in San Diego in February.

He has found, for instance, loneliness is tied to hardening of the arteries (which leads to high blood pressure), inflammation in the body, and even problems with learning and memory. Even fruit flies that are isolated have worse health and die sooner than those that interact with others, showing that social engagement may be hard-wired, Cacioppo said.

In one study, Cacioppo and Steve Cole of UCLA examined how the immune system changed over time in people who were socially isolated. They observed a change in the kinds of genes that lonely people’s immune systems were expressing. Genes overexpressed in the loneliest individuals included many involved in immune system activation and inflammation. In addition, several key gene sets were underexpressed, including those involved in antiviral responses and antibody production. The result is that a lonely person’s body has let its defenses down to viral and other invaders. [7 Personality Traits That Are Bad For You]

“What we see is a consistent pattern where it looks like human immune cells are programmed with a defensive strategy that gets activated in lonely people,” Cole told LiveScience.

Here’s why: The immune system has to make a decision between fighting viral threats and protecting against bacterial invasions because it has a fixed fighting capability. In lonely people who see the world as a threatening place, their immune systems choose to focus on bacteria rather than viral threats. Without the antiviral protection and the body’s antibodies produced against various ills, the result means a person has less ability to fight cancers and other illnesses. Those who are socially isolated suffer from higher all-cause mortality, and higher rates of cancer, infection and heart disease.

In addition, loneliness raises levels of the circulating stress hormone cortisol and blood pressure, with one study showing that social isolation can push blood pressure up into the danger zone for heart attacks and strokes. It undermines regulation of the circulatory system so that the heart muscle works harder and the blood vessels are subject to damage by blood flow turbulence. Loneliness can destroy the quality of sleep, so that a person’s sleep is less restorative, both physically and psychologically. Socially isolated people wake up more at night and spend less time in bed actually sleeping, according to Cole and Cacioppo’s research.

The cycle created by loneliness can be a downward spiral. Studies by Cacioppo and others before him have found that lonely people tend to rate their own social interactions more negatively and form worse impressions of people they meet.

“Much like the threat of physical pain, loneliness protects your social body. It lets you know when social connections start to fray, and causes the brain to go on alert for social threats,” Cacioppo told LiveScience. “Being lonely can produce hyper-reactivity to negative behaviors in other people, so lonely people see those maltreatments as heavier. That makes it possible to fall more deeply into loneliness.”

The reasons trace back to humanity’s evolutionary history, when people needed each other to stay alive. Loneliness doesn’t just make people feel unhappy, it actually makes them feel unsafe — mentally and physically. This powerful evolutionary force bound prehistoric people to those they relied on for food, shelter and protection, to help them raise their young and carry on their genetic legacy. Cacioppo surmises that the distress people feel when they drift toward the edges of a group serves as a warning — like physical pain — that they need to reengage or face danger.

Everyone feels left out for some period of time, be it moving to a new city or starting college. Typically the feelings subside by themselves within six months. But when it comes to treating chronically isolated people, some interventions work better than others. In a large meta-analysisdone last year, Cacioppo and colleagues found that two of the best ways to treat loneliness are to train people for the social skills they need to view the world in a more positive light, and to bring people together to share good times.

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