Monday, September 29, 2008

Uncertainty as financial crisis deepens

US Treasury Secretary Henry Paulson has made a brief statement in which he emphasised the effort to construct a workable plan would not cease. “We need to get something done and were working on it”, Paulson told reporters saying that they possessed the “right tools” to do the job. “We need a plan that works, and we need it as soon as possible” the Treasury Secretary declared. He went on to say the banking system was “holding up very well”, though this seemed incongruous given that across the pond the UK bank Bradford and Bingley was partly nationalised with its other assets sold off to other institutions [BBC].

Paulson went on to say the crisis was beginning to affect ordinary people, referred to as Main Street in US media. “People can’t get loans for a car, or student loans” said Paulson.
The plan could take a long time to come together. An impasse seems to have developed on both political sides. In fact it even appears to have divided the parties themselves. McCain delivered a short statement and asked that all sides come together to solve the problem. And yet it was mostly Republicans that had voted against a bill, which McCain himself appeared happy with. Looking very gloomy and uncomfortable British Prime Minister Gordon Brown said tonight he was “disappointed” and said he and his chancellor would “take whatever action is necessary to maintain financial security for everyone in this country [UK]”.

Today the NYSE felt very uncomfortable at the whole saga and saw massive losses. The Dow closed at 10365.45 down -777 [CNN]. “This will continue until somebody does something” said CNN’s Maggie Lake. Richard Quest was also pessimistic saying that the market had seized up and only “liquidity would get it moving again and that’s oil”. He said the plan failed partly because of a lack of trust. “Who’s going to trust Henry Paulson?” Quest asked rhetorically, “He was a guy who was a CEO at Goldman Sachs one of the companies who have much of this toxic debt” he explained. Becky Anderson pulls him up as Quest edges further towards libellous statements. “What I’m saying is, some of those trying to bail us out from the sinking boat put some of the holes in it” he said.

Stocks fall after bail out plan fails

Stocks have plummeted following the rejection by the House of Representatives of a proposed bail out plan of US financial institutions [BBC / CNN]. The rescue plan, a result of tense talks between the government and lawmakers, was rejected by 228 to 205 votes. A White House spokesman was said to be “very disappointed. The Dow Jones index fell by more than 700 points ending at nearly 7% down on the day, the biggest fall since 9/11.

Typhoon Jangmi kills 4 in Taiwan

At least four people have died across Taiwan in the wake of typhoon Jangmi. One boat has been reported missing and there are many reports of damage across the small island. At least 86,000 homes have lost power and mud slides, caused by more than 100 cm of rain in some parts, have cut off many routes Many residents have been evacuated. Winds have exceeded 230 km/h and TV footage showed many resident being literally blown from their feet. The island also suffered widespread damage when typhoon Hagupit swept across south Asia and dozens were killed across the region [BBC / CNN].
China is already preparing for the onslaught of typhoon Jangmi with hundreds of thousands being evacuated from its projected path. The north-west Pacific experiences an average of 27 tropical cyclones every year. Taiwan itself is hit by around 3 or 4 typhoons in the same time period, however in 1914 a record eight typhoons made landfall.

Cadbury latest victim of milk scandal

Further concerns over Chinese products emerged today after Cadbury said it was removing dozens of chocolate products from sale. The items listed in the recall only affected those manufactured at its Beijing plant, however many of the chocolate bars have already been exported to Taiwan, Hong Kong and Australia [CNN / BBC]. It is not clear if tests recently conducted on the products revealed any traces of melamine, the industrial chemical responsible for the deaths of four babies and the sickening of 53,000 others. In New Zealand one news channel has claimed that White Rabbit candy had been responsible for at least one case of gall stones. 3 News talked to Oliver Li who used to eat a great deal of the Chinese confectionary and had later fallen sick.

Choi Sung-Rak, Koea’s Food Safety Bureau Chief said of 120 products that had been tested, melamine had only been found in two products. But his statement has done nothing to reassure thousands of consumers who have expressed increasing distrust in Chinese made products. Such items have been pulled from shelves across the region from India to Indonesia. “I think if this keeps up I will stop eating anything made in China” one concerned Seoul resident told CNN.

Frenchman fails in cross channel flight

Stéphane Rousson makes ready for his cross channel attempt

The French were at it again this weekend with another record breaking attempt. But where Fusion Man succeeded in his channel crossing using a wing equipped with rockets, Stéphane Rousson failed in his second attempt at crossing the 34 km channel on a pedal-powered airship. The 39 year old Frenchman covered a little over half the distance before strong winds began to blow him off course. He had left the Kent coast at around 07:00 GMT but after five hours Rousson was forced to ditch his craft into the sea. "I'm not disappointed. I feel happy because it had nothing to do with any technical failure" told reporters after his failed attempt.
Rousson is not the only Frenchman to take on bizarre, and some might say crazy, stunts. In 1998 Frenchman Ben Lecomte, swam a colossal 5,980 km [3,716 miles] across the Atlantic Ocean. However he did take rests on his support boat which prompted much criticism [BBC]. In 1994 Guy Delage made the claim of being the first man to swim across the ocean with only a kick-board to aid him. Frenchman Alain Bombard made the first crossing in a rubber dingy in 1952. And in 1988, another Frenchman, Remy Bricka, took 64 days to "ski" across the Atlantic on polyester floats.

Earlier this year Frenchman Michel Fournier was set to leap from a helium balloon as it neared the edge of space IHT. But his attempt to break the world free fall record failed after his balloon left without him [BBC].

Perhaps the most famous Frenchman known for his death defying stunts is Alain Robert who has climbed countless high rise buildings throughout the world unaided. But the prize for the most daring stunt should go to Philippe Petit who in 1974 walked between the two World Trade Center towers on a tight rope. And before anyone writes in, Yves Rossy, or Fusion Man as he calls himself, is actually Swiss. Maybe that French eccentrity is catching.

7.3 quake hits near New Zealand

A 7.3 magnitude earthquake has hit near the Kermadec Islands some 1000 km from New Zealand [29.897S, 177.780W]. The earthquake struck at a depth of 35 km at 03:19 local time on the 30th September [15:19 GMT 29th September]. Initial reports on CNN suggested a tsunami warning had been issued following the tremor. However New Zealand authorities say no such warning has been issued. The Kermadec Islands have a population of 6 according to official statistics.

Sunday, September 28, 2008

Shenzhou-7 - mission accomplished

China has successfully completed its third manned mission into space. During the mission one of the astronauts, or taikonauts as they are known, took part in China’s first walk in space. On Saturday at around 16:00 Beijing time Zhai Zhigang emerged from the hatch of the Shenzhou-7 spacecraft for a 13-minute excursion outside. No experiments were conducted during the short venture outside the craft and after waving the Chinese flag and waving to the camera, Zhai re-entered the spaceship. Today the Shenzhou-7 re-entry capsule parachuted down to Earth at around 17:39 local time [09:39 GMT].

Coverage on television has been minimal. The lift-off was covered Live by the main three Western news broadcasters, CNN, Sky News and the BBC. However there has only been sporadic coverage throughout other mission highlights. CCTV coverage on the other hand has been extensive and many Chinese newspapers have also given over much space to the story [BBC / Sky News / CNN / Xinhua].

Saturday, September 27, 2008

Presidential debate fails to inspire

Americans were perhaps glued to there television sets as the two presidential candidates began their battle on the first of three debates. But around the would there was perhaps much less interest. US Election fatigue has already set in throughout the United Kingdom, and few were going to sit up until 4 a.m to watch the rather dry debate that ensued. Following the 90 minute tête à tête there followed the endless analysis by television pundits. Sky’s correspondent rattled off more words in a minute than a speed typist. Perhaps he’d been hitting the coffee a bit hard.
The BBC brought in correspondents from around the world to give their view of what viewers might have thought of the speeches. Hugh Sykes in Baghdad said few would have been watching across Iraq. Well, after all it was dawn and the cock was crowing throughout his report as he fought off swarms of flies. Then to Kabul with correspondent Alastair Leithead. What kind of pointless exercise was this that the BBC were attempting to deliver? Of course, the reporter standing in an army base somewhere in the Agfhani capital may have imparted interesting speculation as to how the country might see changes depending upon which candidate won. But there would have been few interested in the US election throughout Afghanistan and even fewer watching the debate, if indeed it was possible to do. After Kabul the BBC switched their Russia correspondent Richard Glapin. He said the government there might be concerned over McCains forceful words over the recent hostile action in Georgia. Finally to Beijing where there was also little interest from the man in the street. The BBC reporter, James Reynolds, said most Chinese were more interested in China’s current space mission or worrying about the safety of the milk in the shops. Maybe a few officials were paying close attention, but they will only be concerned of issues directly affecting themselves. The fact that China was barely mentioned throughout will be pleasing to the Chinese leadership.

The issues that dominated the first 35 minutes related to the economy. Barack Obama said, “We are at a defining moment in history, our nation is involved in two wars and a financial crisis”. It was a crisis that demanded everyone working together. “We have to move swiftly and wisely” Obama added. But any pan should have “oversight” and the “possibility of taxpayers getting their money back or profit from it” Obama insisted. He then turned the tables on his opponent saying, “This is a result of 8 years” failed policies of the Republican party and George Bush.
McCain also acknowledged the severity of the economic crisis. “Have no doubt about the magnitude of this crisis, the worst such crisis probably in our time. But the point is the Democrats and Republicans are sitting down together” McCain said. “This isn’t the beginning of the end it’s the end of the beginning if we don’t sort out a plan” McCain warned, “But it must have transparency”. On the plan involving $700 billion, Obama said “We haven’t seen the language yet, but I’m optimistic”. But he went onto criticise the “sub-prime lending and the shredding of regulations which got us into this mess”.

McCain interjected, “I also warned about the upcoming problems”.

The two candidates berated eachoyther over their respective tax plans. Obama said that health care systems and energy policies were not working and that corporate tax loopholes should be closes. He said that government spending should also be reviewed and said he would go through it “line by line”. McCain slated Obama’s increasing tax on higher earners and large corporations. McCain said that business tax should be cut to increase competitively and went on to praise the average worker. “I believe in the American worker” McCain said, “Our best days are ahead of us”.

Then it moved onto the war. Again it was all the usual arguments of who said what and when. This was peppered throughout the dialogue with accusations by Obama of bad predictions, a failure to see the outcome, and a lack of planning. McCain defended the move to war and gave a short history of terrorism targeted against the US from the Beirut bombings in the 1980s to the war in Kosovo and the first Gulf conflict.

With regards Iran McCain said the country was a serious threat. “we cannot allow another holocaust” McCain said. “I’ve proposed a league of democracies ... To effect change on the Iranian regime” he continued. Obama’s approach was one of blame. Iran’s strength has grown from the war in Iraq. But he said tougher sanctions were needed but China and Russia stood in the way. Talking, he said, was the way forward. “Senator McCain mentioned Henry Kissinger, who's one of his advisers, who, along with five recent secretaries of state, just said that we should meet with Iran - guess what - without precondition. This is one of your own advisors”.
McCain got quite angry at this point, “I’ve known Henry Kissinger for 50 years and he would not say that the president of the United States would meet with the president of Iran”. Obama retorted that he hadn’t asserted Mr Kissinger had imparted such thoughts. But talks have to starts somewhere he insisted.

In many respects the debate was very dull and dreary. Both candidates looked more than just a little weary, perhaps it was all those flights back and forth from Washington. Throughout many parts of the debate the candidates rambled, stuttered and even fumbled over there words. McCain had trouble with the pronunciation of ‘Ahmadinejad’ and ‘naive’ as at one point there was a definite stutter of nervousness from Obama.

The debate was watch by many people online. Twitter was alive with comments flooding in. Others took part in online chats organised by broadcasters such as the BBC. But the majority of the planet slept through it. They didn’t miss much [ CNN / BBC / Sky News].

Fusion Man rockets across the Channel

Yves Rossy after his successful flight across the English Channel

Is it a bird, is it a plane? No, it’s Rocket Man! Or Fusion Man or even the Human Jet. Countless names have been attributed to Yves Rossy least of all crazy. The 49 year old flew across the channel on Friday equipped with a set of fibre-glass wings and four rockets strapped to his back. After a delay of 24 hours the Swiss pilot finally completed his channel crossing. Weather had stopped his record breaking attempt on Thursday, but Friday’s blue skies were perfect. Launching himself from a plane 3,000 metres above France, Fusion Man roared off at 200 km/h towards the English coast a little over 30 km away.

Following him across the channel were several news helicopters and a plane flown by National Geographic bringing Live pictures to viewers around the world via the Internet and on TV broadcasts. CNN cut into programming to bring a few seconds flight but cut away soon after. Sky brought viewers the entire journey but CNN and the BBC both returned to the spectacle shortly before Rossy cut his engines and deployed his parachute as he soared over the white cliffs of Dover. The journey took only 9 minutes and 32 seconds. The Swiss dare-devil, as CNN described him, made a perfect touch down. He was quickly surrounded by spectators, photographers and news crews all clamouring for interviews and pictures of the stuntman labelled by some as a real Buzz Lightyear. Next week he returns to his regular job as an airline pilot for Swiss International [BBC].

Friday, September 26, 2008

US - No deals on bail out plan

Bush Discussions in Washington between George Bush and top representatives from both political divides have failed to come to an agreement of a rescue plan for America’s financial institutions. Many republicans couldn’t agree with George Bush’s proposals to bail out financial institutions to the tune of $700 billion. It was, according to some reports, a fiery meeting with heated exchanges from all sides. Speaking after the meeting, President Bush said “the legislative process is sometimes not very pretty”. But he spoke optimistically of achieving a result. “We shall rise to the occasion” he added. Barack Obama was also upbeat. “I am optimistic”, he said, “There is real progress”. He went on to claim the “markets appear to be calm at this point”, but on the street traders were less positive. One trader told the BBC that there was still concern on Wall Street with many “sitting on the sidelines to see what happens” [BBC / Sky News].

Gordon Brown, who flew into Washington to talk with President Bush, told reporters he was in favour of a rescue plan, “in principle”. But then anything that would relieve pressure on UK markets would be welcome for the beleaguered PM who has faced much pressure at home. Britain has seen countless jobs lost as a result of the collapse of Lehman Bros. and today HSBC announced that it was laying off over 1000 staff [Sky News].

Back in the US, many ordinary taxpayers across the country are unhappy that their tax dollars are going to be used to bail out people they see as gamblers, speculators and city slickers. “If they go under because they make the wrong decisions and lend money to someone who can’t pay it back that’s fine, that’s capitalism” one member of the public told a BBC new crew.
But Vincent Reinhart says “there is no choice”. The former director of the federal reserve told the BBC “The taxpayer will have to bear the burden” because, he said bluntly, “the financial firms are holding the US to ransom”. The bail out plan was needed he insisted; “It’s trying to jump start the financial market”. It is a market that saw another collapse today as Washington Mutual went under its being bought up by JP Morgan [BBC].

Tonight both Presidential candidates were on their way to Oxford, Mississippi for the first of three debate. Less than 24 hours ago it was unclear whether McCain would even attend. He had previously said he wouldn’t attend unless a deal had been struck in Washington. But since his rival would have perhaps gone ahead without him he was forced into it. The debate will not be a pleasing one for McCain who himself has admitted is no great economist [BBC].

Thursday, September 25, 2008

Successful launch for Shenzhou-7

Shenzhou-7 has successfully launched from the Jiuquan Satellite Launch Centre in northwest China. The space craft lifted off at 21:10 local time [13:10 GMT]. CCTV-9 provided the most extensive coverage of the space mission and continues to bring Live pictures to viewers around the world. The BBC and Sky cut into programming to bring Live pictures about 5 minutes before launch but soon after cut away to regular programmes. CNN almost missed the take-off as they started coverage less than 30 seconds from launch. The taikonauts will spend 70 hours in space during which Zhai Zhigang will conduct China’s first space walk. The launch was watched by millions across China and by government representatives including Hu Jintao who made the journey to Gansu province. Within twenty minutes the craft was in orbit about the Earth and the announcement of its successful launch brought a round of applause from the control centre. President Hu Jintao praised the success of the mission thus far and congratulated all those who had made the mission possible. He also hailed it a milestone in Chinese space exploration.

China prepares for space mission

Three Chinese taikonauts are ready to launch into space on board Shenzhou-7. Chinese Foreign Ministry spokesman Liu Jianchao said on Thursday that the mission was part an effort to "explore and make peaceful use of outer space". The taikonauts, Zhai Zhigang, Liu Boming and Jing Haipeng, are due to lift off from the Jiuquan Satellite Launch Centre in northwest China. The launch window was set between 21:07 and 22:27 Beijing time [13:07 GMT to 14:27 GMT). As part of the mission 42-year-old fighter pilot Zhai Zhigang will conduct China’s first space walk
[Xinhua / BBC / CNN].

Wednesday, September 24, 2008

Obama 'initiated plan' to stop campaign

Barack Obama has made a statement on the heels of John McCain’s announcement of suspending his campaign. “There’s obviously a great deal of uncertainty over the economy” he said in his opening words. “There’s much blame being passed around but we’re here now and we have to solve it” he said. “The clock is ticking and we have to get it right”, and by ‘we’ he meant all parties. Both the Democrats and Republicans need to work together” he said, and went on to tell reporters that he initiated the telephone call to John McCain. “I called him this morning with the suggestion of joint statement” Barack Obama told reporters. He said that at 14:30 local time the Republican camp returned his call and both parties agreed it was critical for them all to return to Washington.

Both agreed to work together and release a joint statement but, as Obama returned to his hotel, McCain put out his own unilateral statement. Obama seemed un-rattled by McCain’s attempt to upstage his rival. “I think the only miscommunication was over whether a joint statement might be put out before any separate ones” he said with a smile [BBC]

Obama said McCain had mentioned the issue of postponing an upcoming debate. But Obama said he thought it was something McCain was “mulling over“ and it was not something he‘d made any agreement on. “I believe we should continue and have the debate” he stated later in a question and answer session.

“There are times for politics and there are times to rise above politics” Obama said, “It is an American problem and it requires an American solution”

McCain stops campaign

Republican presidential candidate John McCain has announced that he is suspending his campaign to return to Washington and focus on the "historic" crisis facing the U.S. economy. Bill Schneider, CNN’s political correspondent, said he had never seen anything like it before.
Obama had apparently spoken at 09:00 ET to John McCain about making a statement and possible suspension of the political campaign. However Schneider speculated that McCain made the move to suspend his campaign unilaterally. During McCains short address he called on Obama to suspend his campaign. “I am calling on the president to convene a meeting with the leadership from both houses of Congress, including Senator Obama and myself," McCain told reporters in New York. "It is time for both parties to come together to solve this problem." Senator Obama is set to make a short statement at around 20:30 GMT [16:30 ET].

Miracle escape as taxi hits house

A family had a narrow escape after a taxi crashed into their living room early Wednesday. The family, who were sleeping upstairs, were woken up at around 04:00 GMT [05:00 local] as the silver Ford Galaxy crashed through the perimeter wall and through the front window into their lounge. Fortunately the taxi had just dropped its passenger at Wickford Station in Essex. The driver, a 49 year old man, was uninjured but was hospitalised suffering from shock. The family were also unhurt but had to be re-housed after surveyors declared the structure unsafe. It took salvage crews nearly 10 hours to make the property safe and remove the vehicle [Basildon Echo / BBC]

UK store withdraws Chinese sweets

Poison candy - the latest product found to contain melanin

White Rabbit Milk Candy, which was banned from sale in Singapore after tests showed the product contained melamine, has now been withdrawn from shelves at Tesco stores in the UK. A spokesman for Tesco said the sweets were being removed from sale as a “precaution” [Independent / The Guardian / CNN].

However, the withdrawal comes soon after New Zealand authorities found "unacceptably high levels" of melamine in the confectionary [New Zealand Herald]. Those tests were prompted by reports and requests by the Herald Newspaper on Monday [New Zealand Herald]. A New Zealand Food Safety spokesperson initially said that removing the sweets from sale would be “a knee-jerk reaction”. But when Sandra Daly, Deputy Chief Executive of New Zealand’s Food Safety Authority, was told White Rabbit candy in Singapore had been contaminated, her reaction was one of concern. "Oh, good grief” she exclaimed, “We've gone through as many things that contained dairy significant components as we can from items we took from the Asian supermarkets, but I don't think anyone has picked this one up”.

No public statement from UK authorities has been issued as to whether tests have been carried out on products imported from China. As yet there have been no reports of illness associated with milk products outside of China but concern is increasing following reports in several Asian countries that products tested positive for melamine [BBC]. Products have already been removed from shops across Asia including Thailand, Malaysia and the Philippines and now New Zealand and the UK are beginning to react. Milk products are also being pulled from shelves in Australia after “significantly high levels” of melamine was found in milk based ice-lollies [The Age].
Blame is also beginning to mount on companies at the centre of the crisis as well as the Chinese government [New zealand Herald]. The Ministry of Foreign Affairs and Trade released an official timeline at the weekend revealing Fonterra China "gave an informal indication" on August 14 to an embassy official that its 43% owned joint venture was "receiving milk contaminated with melamine". The Chinese government was not formally alerted until the New Zealand Government ordered its foreign affairs officials to warn Chinese food safety authorities in Beijing on the 9th September.

The bad publicity for China will no doubt compound problems for a country which relies heavily on exports. A chief food inspection official told reporters yesterday that things were getting better. "As far as I know, there will be no more bad news," Xiang Yuzhang said [BBC]. He couldn’t be any more wrong.

Tuesday, September 23, 2008

"This is war" gunman warned on YouTube

Matti Juhani Saari, 22, the gunman responsible for the shooting at a Finnish college has died from self inflicted wounds to the head. Reports vary with some saying he killed 10 fellow pupils at the Palvelualojen Oppilaitos vocational college in Kauhajoki. Police in the town interviewed Saari on Monday after he had posted several videos of the internet in which he is seen firing a gun. However despite a number of ranting posts it was decided there was not enough evidence to charge him nor to revoke his gun licence.
In part of a rambling post he wrote “For revenge and reprisals for another war, and suddenly, there was war with spoiling and death. And you fight alone if there’s another war. Whole life is war and whole life is pain. And you will fight alone in your personal war. War, this is War”. In one of his videos he is seen firing a pistol directly at the camera after exclaiming “you will die next”. Finland’s interior minister Anne Holmlund has said an investigation would look into whether mistakes had been made. Prime Minister Matti Vanhanen said it was a "tragic day" for Finland [BBC / CNN / Sky News]

Finnish gunman named by authorities

Matti Saari, 22, named as suspect in Finnish school massacre

The gunman who killed at least 9 students at a Finnish college has been identified as Matti Saari. The man posted several videos on You Tube under the pseudonym Wumpscut86. The postings have been deleted from the website as have repostings of the videos. Most showed Saari firing a Walther P22 pistol. On another website Saari displayed a number of photographs including several of him posing with the handgun [screengrab]. Following the 2007 shooting laws were introduced to prohibit the ownership of weapons for those aged under 18 years.

'9 killed' in Finnish shooting

The Kauhajoki Palvelualojen Oppilaitos school and the alleged gunman

At least 9 people are dead following the shooting by a gunman at a Finnish college. Pictures have already emerged of the alleged gunman who posted several videos on YouTube. The Mayor of Kauhajoki told CNN that the gunman was still alive but had been wounded. Antti Rantakokko confirmed that a fire had occurred at the college but it had been extinguished. He added that many students had been injured and were being treated at hospital.

Finland - college shooting leaves 'many dead'

A 22 year old student has gone on the rampage at a college in Finland shooting dead several students. Police have only said there maybe many dead and others have been wounded.
According to a BBC correspondent in Helsinki, the gunman is alleged to have posted a video on You Tube in which he warned of his intended attack.

Jarkko Sipila journalist in Helsinki told CNN that a fire had broken out at the college and police have said the incident is ongoing. One worker at the college said the man was wearing a ski mask when he entered the building opening fire on other students. The incident occurred in the small city of Kauhajoki in a rural area 290 km north of Helsinki. There are conflicting reports as to the fate of the gunman. The city Mayor has apparently reported the gunman shot himself, however other reports suggested the man had been arrested [Sky News].
Finland has the third highest gun ownership in the world primarily for hunting. Last November 8 students were killed in a school shooting in Tuusula, around 40km north of Helskinki [BBC]. Following that incident the Finnish government moved to tighten gun laws [BBC]. The gunman, Pekka-Eric Auvinen, who was a student at Jokela school had also posted footage foreshadowing the massacre on the video-sharing website YouTube.

Monday, September 22, 2008

Chinese milk candy also tainted

White Rabbit Milk Candy has been banned from sale in Singapore after tests showed the product contained melamine. Dozens of Chinese milk products have been found to contain the industrial chemical and thousands of babies and young children have been admitted to hospital. Four babies have so far died after consuming tainted baby formula. White Rabbit candy, manufactured by Shanghai Guanshengyuan Food Ltd., is widely still available outside China and remains on sale in Chinese stores in the UK. Over 50,000 babies and young children have so far been treated in hospital across China and more than 100 are in a serious condition after consuming products containing melamine. Chinese Premier Wen Jiabao has visited a number of hospitals and spoke of government efforts to deal with the problem. "The most crucial point is that after a clean-up there can be no problems at all with newly produced milk products," he said. "If there are fresh problems, they must be even more sternly punished under the law."

Fresh allegations emerged in reports today that the authorities may have known about the contamination earlier than previously thought. One province is said to have notified the health ministry of children suffering kidney stones in mid-July. This was two months before the New Zealand government, acting on information provided by New Zealand company Fonterra, contacted the Chinese government. Fonterra has a 43% shareholding in the most seriously affected Chinese dairy, Sanlu. The boss of Sanlu has been sacked and detained, but her daughter claimed in a blog post that she had reported the contamination to the city authorities in Shijiazhuang, the city south of Beijing where the company was based, in early August. Unfortunately, that coincided with the arrival of the Olympic torch in the city - and to the local government, "the torch came first, and nothing else mattered". "Everyone was weak and powerless in the face of the Olympics," she said [Daily Telegraph].

The banning of Chinese milk based products has widened with Singapore suspending the sale and import of milk, ice-cream, yoghurt, chocolate, biscuits and confectionary, as well as any other products containing milk from China as an ingredient. Japan, Malaysia and Brunei have also recalled or banned Chinese-made dairy products. But the testing of such products such as White Rabbit candy will have wide ranging implications. The product has a long shelf life and as yet there has been no word of such products being banned from sale in the UK [Australian Herald Sun / Asia One / BBC].

Saturday, September 20, 2008

Over 40 dead in Pakistan blast

At least 40 people have died in a deadly blast in Pakistan. The attack struck the Marriott Hotel in the capital Islamabad at 19:30 local time [12:30 GMT] according to CNN’s website, though TV news broadcasts have said the blast occurred at 20:15 [13:15 GMT]. More than a tonne of explosives is believed to have been used by a suicide bomber. A massive crater was left and the explosion also caused a natural gas explosion. There are conflicting numbers of people both killed and injured but many reports say two hundred people were injured. Several foreign nationals are amongst the dead according to reports. One American has died and four British nationals are believed to be amongst the injured [BBC]. The hotel is situated close to the Prime Minister’s home and parliament building and has been the target of several attacks in the past [CNN / BBC / Sky News / al Jazeera].
Today’s blast came shortly after the newly elected Pakistani President had addressed parliament. During his speech before the assembly, President Asif Ali Zardari declared, “I have a dream for Pakistan”. But like his predecessor he is already experiencing a nightmare as extremism attempts to tear the fragile country apart. Following the attack President Zardarwi released a statement in which he said, “Terrorism is a cancer & we will eliminate it”. President George W Bush also spoke on the subject saying, “I strongly condemn the attack” and vowed to “assist Pakistan in defeating terrorism”.

Friday, September 19, 2008

Tony Blair encounters satirical Daily Show

The Daily Show had perhaps its most important guest today. Well actually it was yesterday since British viewers aren’t able to enjoy Jon Stewart’s political satire until some hours later. The regular programme, which airs daily in the United States, is available on the UK satellite or cable channel More 4. CNN International also broadcasts an edited version of the programme billed as the Daily Show Global Edition but is occasionally dropped from the schedule.

On Blair’s arrival he received a rapturous applause, and once setting in set about a serious but candid discussion on the global war on terror, Iraq and the current financial crisis.
In the wake of the current financial crisis he was asked his opinions on globalisation. “I think globalisation is pushing people together and there is a danger religious faith pulls them apart; and that’s why it’s important to get religious faiths talking and understanding each other”.
On religion Blair revealed that his recent conversion to Catholicism would have been difficult during his time in office, perhaps since the British state religion is that of Protestantism.
Moving on to war the ex-British Prime Minister asserted that no two democracies had fought each other. Stewart attempted to catch out Blair by mentioning that Britain had gone to with war with Argentina. “Didn’t you guys fight, I’m talking about the Falklands,” said Stewart. “Actually at the time Argentina was not a democracy” the former PM responded.

In the latter half of the programme he talked about his relationship with President Bush. “I like him” he said simply. But he added, “It depends whether you agree with him or not on the security threat which I happen to do , but if you don’t then obviously you’re less likely to like him”. He continued with his usual mantra that the two counties whatever their differences “should stick together”. He made a quip about Britain’s elections lasting four weeks “while American elections last four years” to which he provoked a laugh.
He stayed generally relaxed even when asked awkward questions about the war on Iraq. The decision to go to war was one of conviction he said. He laughed as Stewart suggested there was an old fashioned English phrase from the time of Lloyd George that went “Don’t invade Iraq, it’s a nightmare”. But Blair kept his focus saying that the same forces that the coalition was trying to defeat in Iraq, persist across the globe in different forms and that the fight against them must be maintained. “That would be one way of looking at it” Tony Blair smiled. “But the forces we are fighting in Iraq at the moment, al-Qaeda on the one hand, are precisely those forces of terrorism based on a perversion of Islam, and Iranian backed militia. And they’re the people fighting in Afghanistan, and whether it’s in the Yemen, Algeria or Palestine or Pakistan there’s a struggle going on”. Jon Stewart then quipped in, “er what was that list again?” Tony laughed, “no, I didn’t say we had to take military action”. After a few more laughs he made the serious point that force was not the only weapon against extremism. “Military is not the only answer, you actually need a combination of a push to eradicate the conditions in which this terrorism breeds, that’s why the Middle East peace process is so important” Blair continued.
But as with the nature of television time, ran out. “Hey, I'm sorry this is gonna take us all night” Stewart interjected, “I’m delighted to even get an opportunity to talk to you and thank you for your patience even discussing all this with me”. But before the show ended Tony Blair was asked to put in a good word to George Bush to get him on the show. Despite their friendship it’s unlikely Tony will be able to persuade his friend George to appear on the Daily Show. It would be a great show if it ever happened though.

War on Terror - convictions, arrests and warnings

Hammaad Munshi, Britain's youngest convicted terrorist

Britain’s youngest terrorist has been jailed for two years. Hammaad Munshi, who was just 15 when he downloaded terror manuals and other items said to be useful to a terrorist, was sentenced at the Old Bailey in London after a two year investigation. Two others, Aabid Khan and Sultan Muhammad, were jailed last month. Khan was sentenced in August to 12 years for possessing or making documents promoting terrorism. His cousin Muhammad, 23, also from Bradford, was sentenced to 10 years for similar offences under the Terrorism Act. Munshi is said to have been groomed by Khan and Muhammad. Now 18, he was convicted of making a record of information likely to be used for terrorist purposes [BBC].
Meanwhile two people have been arrested in Germany for their part in an alleged terror plot. A German and a Turkish citizen are said to have collaborated with a terrorist group whose plans for attacks on U.S. targets in Germany were foiled last year. Both men, aged 27 years, are believed to have links with the Islamic Jihad Union, an offshoot of the Islamic Movement of Uzbekistan, a jihadist group with ties to al-Qaeda [CNN].
The threat from terrorism became all the more stark this week when 11 people died in an attack at the US Embassy in the Yemen capital. Following the attack, which killed one American [CNN], the US State Dept has issued a statement recommending that all non-emergency staff and their families at the U.S. Embassy in Yemen leave the country.

Markets rally after US treasury steps in

World stocks have rallied after the US followed Britain’s lead in the banning of short selling [BBC / CNN video]. The ban may stop the practice of creating false rumours which has led to uncertainty in otherwise stable markets [BBC]. A bail out by the US treasury has also helped put financial market in a positive mood [BBC / CNN]. Shares soared on European markets and in Russia the stock exchange was suspended after shares rose too steeply [BBC / CNN]. Trading was halted on the RTS and Micex indexes within an hour of opening. They then reopened only to close again after rising to 25.4% and 20.2% respectively. It is the second time the Russian exchange has been halted this week. On Thursday trading was halted after huge falls, prompting the state to pump billions of dollars into banks. Asian markets also partially recovered on Friday [CNN].
The crisis may not however be ended. On BBC’s Question Time the Labour MP Harriet Harman was unable come up with any clear solution except to look into the matter of regulation. But regulations are too inflexible and may not address the constantly changing global financial situation. Simon Wolfson said there needed to be more supervision and oversight. The son of Lord Wolfson, he is a former Next chairman and chief of staff to Margaret Thatcher. Recently he described the current economic climate as "gloomy" and predicted that UK businesses faced "another tough year". Indeed if as suggested the ban on short selling is temporary, the problems existing in the financial markets may well return. Of course, it is not just the gambling and speculation that has rocked world markets. Some firms are in crisis due to many bad debts. The issuing of so called NINJA mortgages where individuals in the US had been lent vast sums of money to purchase property despite having 'no income, no jobs or asset.' Many analysts have said the US interventions are only a stop-gap. The ban on short-selling only applies to 799 financial firms and is only temporary. Ralph Sylva, a CNN analyst, says, “Until there is a period of calm no-one is going to lend to anyone else...and banks are not lending to each other they are buying bonds”.
But others have questioned the stability of global capitalism. Writing on the BBC website Noam Chomsky says “The unprecedented intervention of the Fed may be justified or not in narrow terms, but it reveals, once again, the profoundly undemocratic character of state capitalist institutions, designed in large measure to socialise cost and risk and privatize profit, without a public voice. That is, of course, not limited to financial markets. The advanced economy as a whole relies heavily on the dynamic state sector, with much the same consequences with regard to risk, cost, profit, and decisions, crucial features of the economy and political system”.
Others are far more concerned. Tony Benn a former Labour MP warns of the risks that might come with a financial crash. “This economic crisis is a global crisis. It is more serious than the crisis in 1929. In this climate, people get very frightened and, when they are frightened, their fear can be exploited just like Hitler did in the 1930s to get to power”. He questioned the apparent inconsistency of government spending. “They will say there seems to be plenty of money for war. We are bombing in Iraq and we are bombing in Afghanistan and, if we can do that, why don't we have enough money to meet our own need?” Tony Benn said that the good times had ended and the outlook was now much bleaker. “It's the end of an era when we were told to borrow and spend and keep government out. Many people will now lose their jobs, lose their houses, lose their livelihoods. This is a failure of a system where we relied on the markets and excluded government. And the markets failed.”

The US Treasury Secretary Henry Paulson said today that a “prompt bipartisan effort was needed” to help “stabilize the system and get at the root cause”. He added that more action and “hundreds of billions of dollars are needed to resolve US financial crisis” [BBC].
Soon after Paulson had made a statement, President Bush spoke about the crisis and justified the government intervention which he said was “not only warranted but necessary”. He too said the root causes needed to be addressed. One of the reasons he said he had implemented a ban on short-selling was to stop investors upsetting financial markets for their own personal gain.

At the close of European markets on Friday the picture was far more optimistic. The FTSE 100 had risen by 9.33% while major banks too regained some of the value lost in the last week. HBOS rose by 31%, Lloyds TSB gained 24% & Barclays stocks rose by 29%.

Wednesday, September 17, 2008

Four babies dead in China milk crisis

Concern over the global financial crisis may be spreading across Asia, but for many parents there is a far more worrisome issue on the minds of many as the scandal of poisoned milk claims another young victim. Melamine has been found in at least 22 companies’ products and more than 6,000 babies are said to have fallen ill [Channel Four News].
The concern now is that some of the contaminated milk products may have been exported to several other countries outside the Chinese mainland. Last night Sky News reported that Denmark had reportedly removed some products from shelves after a number of products manufactured by the Danish company Arla were found to be tainted. In Hong Kong the Yili Industrial Group Co have also withdrawn milk, yoghurt and ice cream from sale [Sky News / BBC].

As concern over the milk products increases it has left many parents in China with a dilemma. Many cannot afford the more expensive imported products and many feel they may not be safe despite assurances from the authorities [Xinhua]. Although breast feeding is widespread in China, it has dwindled in recent years as parents become busier and with increased promotion of baby formula. In the population as a whole, China's consumption of milk products has soared from 8.5 kilograms per person in 2000 to 25 kilograms in 2007. China's health minister, Chen Zhu, and its top quality chief, Li Changjiang, said 6244 babies, five times more than previously announced, had fallen ill after being fed melamine-laced infant formula. Of those, 1327 babies remained in hospital, 158 with acute renal failure. But despite the large number of products affected he insisted all Olympic foods were "absolutely safe".

In the US the FDA has warned consumers not to buy milk products imported from China. Importing Chinese-manufactured baby formula into the U.S. is illegal, but federal officials say they know of at least one case in which a Chinese brand was found in a New York store in 2004. "We're concerned that there may be some formula that has come in illegally and could potentially be in the ethnic Chinese markets," said Janice Oliver, a deputy director at the U.S. Food and Drug Administration's Center for Food Safety and Applied Nutrition in College Park, Md. [LA Times].

Many parents are not only angry with the manufacturers but also with the government for not regulating the quality strictly enough. Premier Wen Jiabao held a special cabinet meeting on Wednesday to address the crisis and authorities have said they will tighten up regulation in the dairy industry [Chinese govt]. The State Council has admitted that regulations had failed to improve food standards saying the “Sanlu infant milk powder incident reflects chaos in the dairy products market and loopholes in supervision, and administration which has not been vigorous”. Consumer confidence will be difficult to heal especially after so many babies have fallen ill. The issue highlights yet another area where government regulation has failed. Last month authorities admitted that school buildings which crumbled following the Sichuan earthquake may not have been built to required standards. Hundreds of children died and many of their grieving parents have called for answers. With regards the current scandal over milk contamination some have accused the government of a cover up until after the Olympics. Chinese authorities were informed at least 6 weeks ago that there might be a problem with some products but failed to inform the public until this week [Daily Telegraph].

Uncertainty continues despite takeovers

Prime Minister Gordon Brown has said the Lloyds TSB take over of HBOS was necessary to “protect the banking sector”. He said that “decisive and quick action was needed” but failed to make any clear statement about the uncertainty over the HBOS staff, 40,000 of whom may find themselves out of work. The merger of the two banking sectors means Lloyds TSB now hold a vast proportion of mortgages and bank accounts in the UK. But the 3000 branches that the company now own may well be reduced as will the number of staff standing at 150,000. On both sides of the Atlantic there have been accusations that much of the current financial crisis was brought about by bad government regulation and the fault of “fat cats and city slickers”. But leaders on either side of the pond are unclear in their proposed solution. Gordon Brown told Sky News that he would look into ways of “cleaning up the financial system” but did not make clear what the problems might be [BBC].

There was some signs of recovery on the FTSE 100 following the news of the Lloyds/HBOS merger, but the international financial crisis is far from over. On Wall Street yesterday two major institutions nose dived. Morgan Stanley dropped 20% of its value in the day while Goldman Sachs saw a fall of 30%. American financial investor Jim Rogers told CNN, "It's going to get worse. There are going to be more bankruptcies. There's going to be a big cleanout in the financial system."

There are concerns too that the current crisis may end the boom in China. Many in the West are worried about the consequences of globalisation; spiralling trade deficits with China, jobs lost to low cost producers in Asia, questionable labour practices in Third World countries, and unsafe imports. Until now it's been unusual to hear any criticism of globalisation emanating from China. But with 40% of the country's GDP coming from exports the situation for China is very tenuous.
And China is clearly pointing the finger of blame at the US. The People’s Daily, in an editorial published on Thursday, said “investors from all over the world have been deceived”. US financial institutions had “spread their risk with the rest of the world, and as a result, other nations lost trillions of US dollars, while America has protected itself” the paper said. As for a solution the paper went on to say “'a fair, just financial order that does not rely upon the United States” was needed [Sky News].

Cash injections and take-overs may only be a stop gap. The underlying problems with the markets will take a long time to address. And there is no-one with a clear solution. While many blame the ‘fat cats’ at the top of the ladder, there are evidently more fundamental problems, not only in the US but across the world. It may well be one of the pitfalls of globalisation. No investment appears to be safe during this current turmoil. Many have shifted their money into gold, up 10% yesterday - its highest ever daily rise. King Midas soon found gold a curse and later discarded his wealth and splendour, moved to the country and became a worshipper of Pan, the god of the fields and satyr. Perhaps a simpler way of life and economy is the answer.

al-Qaeda blamed for Yemen terror blast

Al Qaeda has been blamed for the attack Wednesday at the US Embassy in Sanaa Yemen. At least 16 died in the attack the news of which broke on BBC News at around 10:11 GMT, some 4 hours after the attack. "We heard the sounds of a heavy gun battle going on," one British national, Trev Mason told CNN. "I looked out my window, and we saw the first explosion going off -- a massive fireball very close to the U.S. Embassy. The gun battle went on for a further 10 to 15 minutes, followed by two further loud explosions" he added.
The first explosion happened about 09:15 local time Wednesday [06:15 GMT] and was followed by several secondary blasts, said U.S. Embassy spokesman Ryan Gliha [CNN / BBC].
Security sources said six members of the Yemeni security forces, six attackers, and four bystanders were killed in the attack. According to reports the attackers were dressed in Yemeni army or police uniforms, reports differ, as they launched their assault at the gates of the US Embassy in the Yemini capital. Two car bombs were detonated followed by an assault with automatic weapons. But the attackers failed to breach the main gates and did not enter the inner compound. No US citizens were killed, however the incident highlights the continued threat that exists from al Qaeda and associated groups.

In October 2000 the USS Cole was damaged in a suicide attack in Aden which was subsequently blamed on al-Qaeda. Seventeen US personnel were killed. The British embassy was also bombed the same month but gained little coverage at the time. Since 9/11, attacks have increased significantly, and some have clearly been targeted at the flow of oil to the West. In October 2002 the Supertanker Limburg badly was damaged in attack [BBC]. Later, tourists were also in the firing line. A suicide bomber killed eight Spaniards and two Yemenis in the province of Marib in July 2007 [BBC] and attacks against tourists also occurred in 2008 [BBC].
US State Department spokesman Sean McCormack said today's explosions "bear the hallmarks of an al-Qaeda attack." Earlier CNN said that Islamic Jihaad in Yemen had claimed responsibility but could not verify the reports. But whatever name they take, the attacks are just as deadly. And with four attacks on the US Embassy in recent months, it won’t make America feel any more comfortable. The effects may also be felt far wider if there is a perceived threat to the oil industry in the Gulf. The timing of the attack certainly seems to have been intended to coincide with the recent turmoil on the financial markets; perhaps in an attempt to rock the market a little more.

Paralympics ends in Beijing

The Beijing Paralympics has come to an end with another handover ceremony. Boris Johnson, London’s Mayor, was once again in the Chinese capital to receive the flag from Beijing’s Mayor Guo Jinlong. The ceremony did not exude the pomp and circumstance as that of the Beijing games, but the 92,000 people in the Bird’s Nest watched and cheered with great enthusiasm. London 2012's double-decker bus made a second appearance alongside wheelchair basketball star Ade Adepitan. The entire closing ceremony lasted a little under 2 hours and was broadcast on the BBC.

China secured the most medals during the Paralympics with Britain coming second with 42 gold medals under its belt. Britain won 102 medals overall, but came nowhere near China's 87 golds and total of 207, but ahead of the US, Ukraine and Australia. Besides the success, the Paralympics did not secure the large audiences that the main games saw. Most coverage was only viewable via interactive services or the internet leading to some criticism of the the BBC [DigitalSpy]

AIG bailed out, but crisis continues

The US government has stepped in to save the insurance giant AIG, propping it up to the tune of $85 billion [CNN]. However the rescue effort has done little to affect confidence in the financial markets. The price of AIG stocks continue to fall adding to an already troublesome month for the company. In the last two weeks alone the value of AIG stocks has dropped over 83%. The Dow Jones also fell sharply on Wednesday following a slight recovery on Tuesday. On Monday it dropped by some 500 points and today it dropped a further 250 points in the first half of the day. In other world markets uncertainty remains. In Russia trading was halted after stocks plunged. Russia's Micex Stock Exchange and RTS Exchange halted trading for a second day as the Finance Ministry rushed to provide loans to the country's banking system and a Moscow brokerage sought to sell a stake to meet its financial commitments. Some stocks fell below levels not seen for nearly three years [BBC / Bloomberg].

In the UK the Halifax Bank of Scotland confirmed it was in talks with Lloyds TSB. And the British government has said it may overrule any concerns the completion authorities may raise [BBC].

The international financial crisis will also affect the average citizen as banks and building societies become more reticent to lending money. Mortgages will be more difficult to secure and loans too will also become harder to obtain.
[Market Data]

Tuesday, September 16, 2008

China's baby milk crisis worsens

Authorities in China has said that tests on more than 100 baby milk products have found 22 contaminated with melamine. So far at least two babies have died and hundreds have been hospitalised after they consumed products tainted with the chemical. Two people have so far been arrested and four senior staff working for one of the companies singled out in the scare, have been fired [CNN].
There has been much concern about the quality of Chinese products over the last few years. And it is not the first time Sanlu has been connected to a scandal involving tainted milk powder. In 2004, at least 13 infants in the eastern Anhui province died of malnutrition after drinking milk powder that had little nutritional content [BBC]. The China Daily reported that the illegally manufactured milk was falsely labelled with the Sanlu brand.

However, not all such cases of contamination originate in China. In 2004 some brands of baby formula manufactured by Nestle were found tainted with the bacteria E. Sukiyaki which can cause meningitis or severe gut infections [BBC]. In 2001 there were concerns over another baby milk powder after it was found to contain traces of bacteria. SMA Nutrition agreed to issue a recall after learning that a bacterium, which causes botulism, had been found in two of its brands [BBC].

The scale of the scandal that has hit China is however on a far bigger scale. The number of babies that have become ill stands at 1,253 according to officials [BBC]. And parents will once again be asking questions of authorities. There may also be concerns abroad. Many food products originate from China and authorities may well be looking to see if any of the 22 contaminated baby milk brands were exported. Taiwan said late on Sunday it was banning all imports of Sanlu dairy products immediately. However, it is not believed that the milk powder was exported to any other country.

Last year melamine contamination resulted in the recall of more than 150 brands of cat and dog food in the US. Several pets across the US died after eating the tainted food. Two Chinese businesses, a U.S. company and top executives of each were indicted by a federal grand jury in February in connection with the pet food, which resulted in deaths and serious illnesses in up to thousands of U.S. pets, according to federal prosecutors . The number of people involved in China’s latest story of corruption and industrial neglect may run into hundreds. Authorities insist that they will pursue all those involved though it will be of little consolation to the grieving mothers [Xinhua].

Press blamed for adding to Wall Street woes

With headlines like “Nightmare on Wall Street”, “Meltdown Monday” and “Terrible Tuesday”, the press has come under fire for increasing the panic on the financial markets. CNN’s Richard Quest in his flamboyant style brushed such accusations aside. “That’s right, shoot the messenger” he said, “what language should we use”. The fact is, the situation is extremely serious and strong language was needed to describe the story, Quest insisted. In a faux BBC voice, Quest imitates a toned down newscast. “Today on Wall Street shares fell moderately as investors had a mild reaction to what one person called ‘the worst financial crisis of the century’” Quest said. Back to his usual excitable chant, he continued, “It doesn’t wash, you use the language that’s fitting for the moment. When people like Alan Greenspan says it’s a once in a century confluence of perfect storm, what else are you going to use?”

The press could be criticised for some of the lurid headlines and speculation of another 1930s type depression; but the seriousness of the current situation cannot be under-estimated.
The collapse of Lehman Bros is not only being felt in the US but in other financial markets. Stocks were down across the board in Europe and when Asian markets finally opened on Tuesday, after the weekend’s mid-Autumn festival, they too saw a massive slide. The bad news continued on Tuesday with increased concern that AIG, America’s largest insurer, might be the next to go under. The Federal Reserve opted to leave interest rates at 2%, a decision that left some investors unhappy as many believed the government might step in [CNN / BBC].
In figures the picture appears very gloomy. In Europe the FTSE 100 fell by 3.36% while the CAC, in Paris, dropped by 1.96%. The Asian markets dropped sharply with the HK Hang Seng falling by 5.44% the Nikkei 225 dropping 4.95%, the lowest in three years. Even the Middle East was badly hit. The Cairo stock exchange dropped 5.77% and in Dubai the market fell by a little over 2%.

As Richard Roth took his camera team around the NYSE most traders appeared to be selling. Nobody was buying on the floor. “This is monumental; historical” said one trader, “I never thought I’d see both Lehman Bros and Merryll Lynch disappear in one weekend”. But it was AIG that everyone was watching with bated breath. “There maybe other skeletons in the graveyard”, suggested Roth. “There maybe, this ain’t ended yet” the trader said. And no-one knows how big that graveyard is. Uncertainty over the fate of AIG and the speculated collapse of Washington Mutual may indeed be just the beginning. As Richard Quest so elegantly put it, “It’s like someone snagging a woolly jumper on a nail, and it’s all becoming unravelled”. This was the price of globalisation, but “there’s no point in worrying about it” Quest added, “since there’s little you can do but watch” [CNN / BBC]

Monday, September 15, 2008

Meltdown Monday as financial markets fall

News that the banking giant Lehman Bros had filed for bankruptcy has rocked financial markets across the world. Listing debts of more than $600 billion, resulting partly from huge losses in the US mortgage market, the company has gone to the wall after more than 158 years on Wall Street. Last year the company was valued at over $41 billion but its share price has plunged over the last 12 months losing 93% of its value. News of its demise broke in the early hours of Monday and as London’s stock exchange opened shares soon began to slide. Already the FTSE has lost 4.5% in the first half of trading in the UK with the banking sector feeling the worst. At least 5000 staff in London and 25,000 staff worldwide risk are likely to lose their jobs [BBC / Sky News / CNN / Bloomberg].

In another major financial upheaval it was announced that the Bank of America had bought up Merrill Lynch. Earlier the BoA and Barclays dropped their bids for Lehman Bros. Although there remains much uncertainty in financial markets across the world, some investors and experts have expressed a certain amount of relief that the US government did not step in the prop up the companies as has been seen with Bear Stearns financial institution and more recently with Fannie mae and Freddie mac.

American economist and former US Federal Reserver boss, Alan Greenspan has expressed his view that more companies may go under. He may be right as there are also worries about America’s big insurance company AIG which may also be suffering financial difficulties. Washington Mutual is another company being mentioned. But Greenspan said that while the worst may not be over, one should not panic. “We will see other major financial firms fail, but this does not need to be a problem” he said today. “It depends on how it is handled and how the liquidations take place. And indeed we shouldn't try to protect every single institution. The ordinary course of financial change has winners and losers." But he conceded the situate was extremely bad adding, “It’s the worst I’ve ever seen”.

Sunday, September 14, 2008

Ike sweeps away other news coverage

Hurricane Ike is continuing to dominate news bulletins; but there have been several other major stories over the last 48 hours that have only made a few seconds airtime.

There have been bombs in India, typhoons in Taipei, a plane crash, a train crash and sinking boats. Even increased tensions between the US and Russia have failed to make major headlines.
The political row that is building between the US and the South American countries of Venezuela and Bolivia has also drawn Russia into the tense diplomatic fight. The US Ambassador in Bolivia was expelled following riots that the ruling party says were instigated by the United States. At least 16 have died in the disturbances. The US retaliated by expelling the Bolivian Ambassador, but now the dispute has widened with Hugo Chavez expelling the US Ambassador from Venezuela [CNN].

“This reflects the weakness and desperation of these leaders as they face internal challenges and an inability to communicate effectively internationally in order to build international support” Sean McCormack, the US State Dept spokesman said. He added that charges against the US Ambassadors were false and that “leaders of both those countries know it”. It has long been suggested that the US has attempted to destabilize the two socialist allies of Venezuela and Bolivia. Both countries supply the US with oil and it is this issue that may drive a deeper wedge between the two continents. The situation has been made more difficult for the US as Russia sends in a small defence force of warships. President Bush and President Putin have already been at loggerheads over the conflict in Georgia. And with only a few months left in office, President Bush, who has already been called a ‘lame-duck president’, will find any decision all the more difficult [BBC / CNN].

The United States was not the only country being hit by storms this weekend. As Texas began to sift through the destruction brought by hurricane Ike, halfway round the world another storm was slamming into Taiwan. Severe damage was reported after the category 3 storm swept across the island on Saturday. Typhoon Sinlaku brought down trees and brought mud slides as it hit the capital Taipei packing winds of 200 km/h. It is the fourth typhoon to hit the country this year. The typhoon is expected to head north towards Japan [Al Jazeera / CNN].

But Japan was already in the news before the typhoon arrived. A Japanese news agency reported that a man had gone on the rampage with a knife killing at least one person and injuring several others. The attack took place during a festival at a shrine in Ishikawa Prefecture. Toshiaki Arai, a 42-year-old vendor, was seen indiscriminately slashing people with a sickle, the Kyodo news agency reported [CNN].

More violence was seen once again in India with another series of bombings, the fourth in the last 5 months. A shopping district in New Delhi was struck on Saturday by several low intensity blasts leaving 21 dead and over 100 injured. Eight bombs had been placed around the area, though only five exploded. The BBC described it as another front in the global war on terror with the Islamic Mujahadeen promising yet more attacks. The same group is believed to be responsible for bomb blasts on 13th May which left 80 dead and on the 26th July which killed 45 [BBC / CNN].

There were also several other disasters around the world. In Russia a Boeing 737 crashed late Saturday killing all 87 passengers on board. The Russian Tass News Agency said the plane came down near the city of Perm in central Russia. Seven children are thought to be amongst the dead. The Aeroflot plane was on a scheduled flight from Moscow. Contact with the aircraft was apparently lost as the plane came into land at an altitude of 1,800 metres according to Russia Today quoting emergency service sources [BBC / CNN].

A tourist boat sank in Paris resulting in two deaths. Ten people jumped into the river Seine to escape the sinking vessel. But two people, including a six year old child, were said to be in a serious condition following the incident which happened late Saturday. Authorities said that the two died in the night from their injuries [BBC / CNN].

Back in the US and investigations are continuing following a train crash which left 25 dead. A commuter train struck a freight train late afternoon on Friday in Los Angeles. Some 200 people were on board the train and at least half were injured [CNN].

Investigations are also underway in China after milk contamination scare. The government inquiry came after several babies fell ill. A baby milk formula said to be tainted with melamine has killed at least one child according to reports. But there is further concern after warnings, sent out by a partner company over a month ago, were not heeded [BBC]. Tragedy also continues in Shaanxi province where the death toll continues to rise at an unlicensed mine where a mud slide buried hundreds. The number killed in the incident which occurred last week has now risen to 254 [CNN].