Sunday, August 31, 2014
Eurozone inflation near five-year low; The mystery of Britain's falling crime rate; Being fair to grads and non-grads
1 Eurozone inflation near five-year low (BBC) he eurozone inflation rate has fallen to 0.3% in August, near a five-year low, adding to fears of a deflationary spiral, according to Eurostat figures. That compares with a rate of 0.4% in July. The drop, driven by lower food and energy prices, will add to pressure on the European Central Bank (ECB) to take action to stimulate the economy.
Separate figures showed the unemployment rate remained near a record high at 11.5% in July. Most analysts are not expecting any action yet, but speculation is growing that in the coming months it may inject money into the system, a practice called quantitative easing, in the hope of stimulating growth and pushing up prices.
Mario Draghi, head of the ECB, has previously described inflation at below 1% to be in a "danger zone".
"There is plenty of ammunition here... to argue for more policy support," wrote Jennifer McKeown from Capital Economics in a research note. "While the Bank is unlikely to act at its meeting next week, it is likely to hint that quantitative easing is firmly on the table," she added.
2 The mystery of Britain’s falling crime rate (Ian Cobain in The Guardian) According to the official statistics, crime is falling across Britain. It has been falling steadily for almost 20 years, despite the occasional spike in the statistics for some forms of crime. And over the past 12 months, the sharpest fall – 19% – has been recorded in Northampton.
But it is not just the people of Northampton who are perplexed by crime trends. Surveys have shown that while most people in England and Wales believe lawlessness to be falling in the area where they live, the overwhelming majority believe it to be rising nationally, when it has actually fallen to its lowest level in decades. The Office for National Statistics (ONS) believes this may be explained by the way some crimes are reported in the media.
The experts are just as baffled as the public: like the economists who failed to foresee the global financial crisis, criminologists were taken by surprise by what happened during the years of recession that followed the crash. Public spending was cut, unemployment rose, incomes were squeezed, families resorted to food banks. And yet, against all expectations, the number of recorded offences fell.
This phenomenon is not unique to Britain: crime has been falling steadily across much of the western world. But while most senior police officers, social scientists and Home Office officials accept that crime is falling across Britain, they rarely agree on the cause. Some highly respected criminologists believe so-called acquisitive crime must have risen during the recession, and argue that the surveys are asking the wrong questions: that new forms of crime – often perpetrated online – are not being acknowledged.
3 Being fair to grads and non-grads (Straits Times) The promise made by Singapore Prime Minister Lee Hsien Loong in his National Day Rally speech earlier this month, that the public service could and would do more to support the aspirations of non-graduates, is taking shape. The Public Service Division (PSD) has announced that management support officers - most non-graduates in the civil service are hired under the management support scheme - who perform well and are able to take on larger responsibilities could expect faster career progression.
This is not only equitable but reflects also the need to give better career opportunities to a segment of the population that does not possess a degree but is equipped with the right aptitude, skills and attitude to contribute to an efficient and motivated civil service. It is the end product that matters.
So long as high standards are maintained, the educational starting points of civil servants should count less than the contributions that they make at work. This consideration enjoys particular weight in the case of teachers, whose academic proficiency, whether they are graduates or not, must be complemented by a genuine desire to nurture the next generation. That non-graduate teachers who perform well can now be placed on the graduate salary scale recognises their role in a profession that is second to none in moulding the future.
Graduates will have to justify the higher expectations that society generally has of them; non-graduates will be spurred into proving that they deserve no less. In the process, the best performers in either group will shine, and be rewarded correspondingly. The sense of a gulf between the two groups should narrow.
Brazil economy in recession; A third of young workers on low pay; Google's fleet of package-delivery drones
1 Brazil economy in recession (BBC) Brazil has fallen into recession, just a month before the general election, latest figures show. Economic output, GDP, fell by 0.6% in the three months to June, worse than analysts had predicted, and revised figures for the first quarter of the year also showed a fall of 0.2%. A recession is usually defined as two consecutive quarters of contraction.
The news will be damaging for the government of President Dilma Rousseff. According to the most recent poll, Ms Rousseff would lose to a rival candidate, environmentalist Marina Silva, if October's election went to a second round. The data showed that civil construction, manufacturing and investment especially suffered during the second quarter.
"This recession shows the exhaustion of a growth model that has been centred on internal consumption," said Eduardo Velho, chief economist at investment firm INVX Global in Sao Paulo. "It is a good picture of what the economy is suffering - a slowdown in industry, a fall in investment, rising inventories. The recovery from here will be slight," he continued, saying that deep reforms would be needed whoever wins the next election.
2 A third of young workers on low pay (Toby Helm in The Guardian) The proportion of workers aged 21 to 30 who are now classed as low paid has more than tripled over the past four decades, according to new research that helps to explain why many young people are locked out of the housing market.
Analysis to be released next month by the independent thinktank the Resolution Foundation will show that among this age group almost three in 10 (29%) are now low paid – equating to almost 1.5 million young workers. In 1975, the proportion earning low pay was less than one in 10 (8%). Over the same period, however, the proportion of low-paid older workers – those aged 51 to 60 – has dropped sharply, highlighting a pronounced divide between the generations.
The report comes amid growing concern that Britain's economic recovery is not translating into wage growth and higher living standards for large sections of society. Low pay is defined as earning less than two-thirds of the hourly median wage – which currently stands at £11.56. A low-paid person therefore earns less than £7.71 an hour. The fortunes of the two age groups have diverged sharply since 2002, when the proportion in low pay was 21% in both groups.
Matthew Whittaker, chief economist at the Resolution Foundation, said the trend towards a low-wage economy for the young threw up big policy challenges. "We know that younger workers have been hit hardest in recent years – this shows that it's part of an even longer-term trend." The share of young people buying homes fell to one of its lowest levels in June this year because of a combination of high prices relative to incomes and shortage of supply.
3 Google’s fleet of package-delivery drones (San Francisco Chronicle) Google's secretive research laboratory is trying to build a fleet of drones designed to bypass earthbound traffic so packages can be delivered to people more quickly. The ambitious program escalates Google's technological arms race with rival Amazon.com Inc., which also is experimenting with self-flying vehicles to carry merchandise bought by customers of its online store.
Amazon is mounting its own challenges to Google in online video, digital advertising and mobile computing in a battle that also involves Apple Inc. Google Inc. calls its foray into drones "Project Wing."
Although Google expects it to take several more years before its fleet of drones is fully operational, the company says test flights in Australia delivered a first aid kit, candy bars, dog treats and water to two farmers after traveling a distance of roughly one kilometer, or just over a half mile, two weeks ago..
Besides perfecting their aerial technology, Google and Amazon still need to gain government approval to fly commercial drones in many countries, including the US. Amazon last month asked the Federal Aviation Administration for permission to expand its drone testing. The FAA currently allows hobbyists and model aircraft makers to fly drones, but commercial use is mostly banned.
Google seems to see its drones as something more than another step in e-commerce delivery. The aerial vehicles also could make it easier for people to share certain items, such as a power drill, that they may only need periodically and carry emergency supplies to areas damaged by earthquakes, hurricanes and other natural catastrophes, according to Google's Project Wing pamphlet.
Friday, August 29, 2014
Pessimism reigns about US economic 'recovery'; UK retailers most optimistic in 12 years; Attenborough's gift to India
1 Pessimism reigns about US economic ‘recovery’ (Andrew S Ross in San Francisco Chronicle) Perhaps the most telling finding in the latest survey of America's post-Great Recession mood is this: Seven in 10 believe the US economy has changed permanently - for the worse. That comes from the John J. Heldrich Center for Workforce Development at Rutgers University in a survey, titled "Unhappy, worried and pessimistic." Indeed, it makes for depressing - but not really surprising - reading.
Five years into the economic "recovery" the vast majority don't believe the economy has gotten any better, despite reassurances to the contrary. They believe their children are going to have it even harder - and think there's nothing the federal government can do about it. Sorry to be a drag on the eve of Labor Day weekend, but other reports this month tell much the same story, in contrast to the roaring stock market and growth in employment and gross domestic product.
The Economic Policy Institute finds that hourly wages in real terms in the first half of 2014 were lower than in the same period last year, "even for those with a bachelor's or advanced degree." A major reason, says the institute: Economic growth is not being reflected in higher wages. "Most striking to me is how there's this consensus among Americans about this diminished economy," said Carl Van Horn, director of the Heldrich Center and co-author of the center's report. "It's upset their expectations about how working life and the American life should be."
2 UK retailers most optimistic in 12 years (Angela Monaghan in The Guardian) Retailers are ending the summer on a high and are feeling more confident than at any time in the last 12 years following a sales surge in August. Optimism within the industry about business prospects for the coming three months was the strongest since May 2002, the CBI said in its latest snapshot of the retail sector.
Katja Hall, the business lobby group's deputy director general, said: "The high streets have been bustling with shoppers this summer and it is good to see firms so optimistic about their business prospects for the next three months – higher than at any time since 2002. Retailers looking forward to stronger growth in September are keeping their shelves well stocked in anticipation."
Strong high-street sales were matched by an increase in consumer confidence in August, with market research group GfK's monthly tracker of the nation's mood taking it back into positive territory for only the second time since March 2005. The index rose by three points to 1 from -2 in July, matching June's level.
3 Attenborough’s gift to India (Rahul Singh in Khaleej Times) Filmmaker and actor Sir Richard Attenborough, who died recently at the age of 90, has received glowing accolades in the British media. However, India, too, has good reason to remember and thank him. Though Mohandas Karamchand (“Mahatma”) Gandhi was an international icon much before Attenborough came on the scene, it was Attenborough’s epic film on the Mahatma, Gandhi, that brought Gandhi and his philosophy alive to a new generation, worldwide. Gandhi was a huge, incalculable gift to India, for which Indians should be eternally grateful to Attenborough.
The film was an unlikely box-office hit. When Attenborough was trying to raise funds for his venture, he couldn’t find any takers. He was told by an American producer that there would be no audience for “a little brown man with a sheet, carrying a beanstalk”. So, Attenborough had to mortgage his house and sell some of his art collection to raise money. To its credit, the Indian government also came to his assistance. India’s first Prime Minister, Jawaharlal Nehru, a renaissance man who admired Attenborough, gave his moral support.
Then, Nehru’s daughter, Indira Gandhi, pitched in with funds from her administration, in the teeth of bitter opposition. “How can a foreigner make a film on the Father of the Indian nation?” they asked indignantly. But Attenborough was on a mission and was undeterred. Yet, nobody expected him to recoup the $22 million it cost him to produce Gandhi. He proved his critics wrong. He earned 20 times that amount.
For the main role, that of the Mahatma, Attenborough chose a little-known actor, Ben Kingsley. It was an inspired choice. Kingsley gave the performance of his life – he won an Oscar for it – bringing out the essence of the man, including his quirks. What many people do not know is that Kingsley is half-Indian and that his real name is Krishna Pandit Bhanji – a name that would not have taken him anywhere on the stage or screen, hence the name-change.
Rohini Hattangadi, as Kasturba, Gandhi’s wife, was another wonderful selection, with stage actor and advertising “guru” Alyque Padamsee, and Roshan Seth being effective as Jinnah and Nehru, respectively. Bhanu Athaiya was chosen by Attenborough to design the costumes for the Indian sets. She did such a great job that she became the first Indian to win an Oscar in that category. Jack Briley, also relatively unknown, did the screenplay for which he got an Oscar as well.
Running seamlessly through the film is Gandhi’s uplifting philosophy and his message of love and non-violence. But for me at least, it has an additional value: It is great propaganda for India. I am sure a great many non-Indians who saw the film came to India as tourists, just to see the “land of Gandhi”. And to think that if some important Indians had had their way – and Attenborough had not been so persevering – the film might never have been made!
Wednesday, August 27, 2014
Insurance industry covers $21bn losses for natural disasters this year; Religion, power and the Arab revolution; Five skills for a great boss
1 Insurance industry covers $21bn losses for natural disasters this year (Sean Farrell in The Guardian) The global insurance industry covered $21bn of losses from disasters in the first half of 2014 as fewer natural catastrophes kept claims below their long-term average.
The total economic cost of disasters in the first six months was $44bn of which natural events made up $41bn, figures from Swiss Re, the world's second-biggest reinsurer, showed. More than 4,700 people were killed by natural disasters during the period. The figure for overall economic costs was down from $59bn a year ago and was less than half the first-half average of $94bn in the last decade.
The $21bn total bill for insurance companies fell from $25bn in the first half of last year and a 10-year average of $27bn. Natural disasters made up $19bn of costs in the first six months of 2014 with manmade events accounting for another $2bn. Insurance losses hit a record of $116bn in 2011 with most of the losses in the first half when the Japanese earthquake cost the industry $35bn.
2 Religion, power and the Arab revolution (Mustafa Al Zarooni in Khaleej Times) Radical thought and extremist actions have plunged some nations and people into the abyss and are an impediment to their progress. The trend doesn’t confine itself to religion. This ‘thoughtful backwardness’ is repugnant and makes society stuck where it is. It rejects the views of others, something that the West too has suffered and has tried to eliminate so it can live in peace.
History takes us back to the authoritarian control of the Church on all aspects of life in Europe: waging wars and killing the innocent in the name of religion. This caused European nations to grope in the darkness of backwardness. Eventually, the suppressed people revolted against the domination of the Church and shunned it.
Hitler’ racist ideas also sparked worldwide revulsion; alliances were forged to unseat him and eradicate his Nazi regime during the Second World War, after which the new world map as it appears now was drawn. The current Muslim World is in the same boat of that of the Europe of yore. It also suffers in its efforts to convey tolerance that enshrines Islam, which is now being viewed as a religion that glorifies war, killing and extremism.
Muslims, who constitute 23 per cent of the world population, are perceived in negative light, their backwardness showcased and their achievements not getting pride of place in societies. Extremist groups have lured and dragged many youth into their cobweb of narrow thinking. Taboos and bigotry are the norm. Their science and knowledge is only what they write and preach.
Despite their despicable actions, religion and doctrine should remain solid-rock in our hearts. We should live by the complete code of life and shun repression and violence, which they use in their train of thought. Power can be usurped from the naïveté of a few using religion as a garb. Faith in religion is infinite; it preaches and calls for tolerance, love and ethics.
The new Arab revolution of hearts and minds will be against all forms of extremism preached and practised by the likes of ISIS and the Muslim Brotherhood. Peace will get its chance; it will prevail.
3 Five skills for a great boss (Belo Cipriani in San Francisco Chronicle) While some people are natural leaders, without self-reflection and practicing good supervision techniques, their innate abilities may never blossom into great managerial traits. Here are five tips to being an effective, amazing boss.
Get to know your team. Don’t pry into your staff’s personal lives. Do let them voice their opinions on projects or process. Whether they share their creative ideas or vent about a client, giving them the space to be open will help you identify strengths and weaknesses.
Give feedback. While it’s not always possible to give someone feedback on every project they complete, the more you do it, the more consistent the employee will become. Even if it’s tips for improvement, employees would rather know if something was done poorly right away than to wait months to hear about it during a review.
Reward great work. People love to be praised and the more we get it, the more we want it. So if someone on your team does a stellar job, try buying their next cup of coffee or treating them to lunch. The more you reward great work, the more you will get it.
Build trust. It’s important for employees to feel like they can trust their boss. So, aside from having an open door policy and reminding your team they can speak with you about anything at any time, try giving your team company updates as they become available. By being completely transparent with them, you will gain their trust.
Create synergy within your team. It may not be possible for everyone on your team to be buddies, but it is important to create positive experiences among them to help build synergy. A happy team is a productive one. Addressing misunderstandings or tension immediately will help you earn your team’s respect.
Tuesday, August 26, 2014
Global warming likely irreversible, says UN panel; The US in black and white; Mozilla's $33 smartphone for India
1 Global warming likely irreversible, says UN panel (Seth Borenstein in San Francisco Chronicle) Global warming is here, human-caused and probably already dangerous — and it's increasingly likely that the heating trend could be irreversible, a draft of a new international science report says.
The United Nations' Intergovernmental Panel on Climate Change has sent governments a final draft of its synthesis report, which combines three earlier, gigantic documents by the Nobel Prize-winning group. The 127-page draft paints a harsh warning of what's causing global warming and what it will do to humans and the environment. It also describes what can be done about it.
"Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems," the report says.
Depending on circumstances and values, "currently observed impacts might already be considered dangerous," the report says. It mentions extreme weather and rising sea levels, such as heat waves, flooding and droughts. It even raises the idea that climate change will worsen violent conflicts and refugee problems and could hinder efforts to grow more food. And ocean acidification, which comes from the added carbon absorbed by oceans, will harm marine life, it says.
The report says if the world continues to spew greenhouse gases at its accelerating rate, it's likely that by mid-century temperatures will increase by about another 3.6 degrees Fahrenheit (2 degrees Celsius) compared to temperatures from 1986 to 2005. And by the end of the century, that scenario will bring temperatures that are about 6.7 degrees warmer (3.7 degrees Celsius).
2 The US in black and white (Mahir Ali in Khaleej Times) There was no doubt a considerable degree of schadenfreude in social media activity from official sources in nations such as Egypt and Iran in reaction to the events of recent weeks in Ferguson, Missouri. The US, after all, is seldom backward in offering condescending advice in relation to how other governments deal with dissidence (inevitably with some notable exceptions, particularly in the case of Israel).
What is far more embarrassing for the American authorities is the fact that domestic confrontations reflect its overseas military interventions, given that police forces across the country have been equipped with army surplus gear. Sadly, it wasn’t an exceptional incident, which was another reason why Ferguson exploded. Fatal consequences are relatively rare, but who can seriously deny that they proceed from the same mindset that leads the forces of the law to stop and search African Americans far more frequently than whites?
And here’s one more interesting statistic: north of a Ferguson dividing line called Delmar Boulevard, 98 per cent of the population is black (with an average annual income of $18,000); south of it, 73 per cent people are white (and the median income in $50,000). The renowned former basketballer Kareem Abdul-Jabbar recently commented in Time magazine that in the context of Ferguson “we have to address the situation not just as another act of systemic racism, but as what else it is: class warfare”.
However, given the political will, a determined effort to tackle institutionalised racism would surely yield some positive results. At Michael Brown’s funeral, the Reverend Al Sharpton made an impassioned call for action on policing — which would arguably be the obvious place to start in terms of policies, attitudes, recruitment, training and, not least, equipment. Sadly, a post-racial society — prematurely posited as a possibility in the wake of Barack Obama’s election to the White House — remains something of a dream deferred.
3 Mozilla’s $33 smartphone for India (BBC) Mozilla, a company best known for its Firefox browser, has launched a new low-cost smartphone in India that will retail for 1,999 rupees ($33). The phone is only for sale on India's online shopping site, Snapdeal. The Intex Cloud FX runs on Mozilla's Firefox operating system and as such it will be the first low-cost device running that system available in Asia.
India's emerging market is regarded as the world's fastest growing for low-cost smartphones. Various emerging markets across Asia are seen by mobile device manufacturers as the key remaining areas for massive growth. Analysts expect these types of low-cost smartphones to give users in emerging markets an affordable opportunity to upgrade from so-called feature phones - or phones that do not easily access the internet.
"The price point is what will grab the market's attention," said Bryan Ma of research firm IDC, "but that's just one factor in all this.It's the ecosystem we look at - or what kind of applications are available on the phone. That is more worth talking about. That's an example of what we might call an 'app-gap' - or the lack of applications on cheaper smartphones compared to those available on phones that use Android and other such operating systems," he explained.
Growth is no longer the enemy of the planet; In tech, Asians are left out at the top; Why Gen Y finds it tough to be hired
1 Growth is no more the enemy of the planet (Chris Huhne in The Guardian) Until now the story of human prosperity has been all about cheap, abundant energy. However, something big has been happening. For the first time in history, we are growing richer while using less energy. That is unalloyed good news for budgets, incomes and the planet. We have reached a technological tipping point.
From the middle ages, living standards just edged up at a snail’s pace, and we did little damage to the planet, because growing forests absorbed carbon from wood burning. The population was small. We led lives that were, in Hobbes’ phrase, “nasty, brutish and short”. Then we started burning coal on a large scale in the 18th century, and the industrial revolution made the graph look like a hockey stick: suddenly incomes were doubling in decades, following centuries of stability.
After allowing for inflation, real GDP in England and Wales doubled from 1830 to 1864, again by 1898, and again by 1951, despite two world wars. This unprecedented prosperity and welfare was inextricably linked to the burning of fossil fuels, and therefore to the beginning of carbon emissions and global warming. And we are paying with the steady rise in carbon and temperatures compared with pre-industrial levels.
The good news is that we can increasingly see a future where technology does most of the change for us. Readers of the Digest of United Kingdom energy statistics will find an extraordinary table in the new edition: the two-century link between growth and energy has broken. The UK economy has doubled in real terms since 1985, but total energy consumption is exactly the same as it was in that year. Indeed, energy consumption has fallen since 1970 while the economy has nearly trebled in size.
2 In tech, Asians are left out at the top (Kristen V Brown in San Francisco Chronicle) When Buck Gee was a vice president at Cisco Systems, he one day looked around his desk and noticed that he stood out in one key way: Gee was the only Chinese American executive in Cisco's US product development group. In fact, there were very few Asian American executives at all.
Since then, Gee, who retired from Cisco in 2008, has been a man on a mission. Asians are generally well-represented in technology companies among the rank and file, but few ascend the corporate ladder to the top. Gee wants to change that. The recent release of data on the diversity of employees by more than a dozen tech companies has lent new vigor to Gee's campaign to shatter what he calls the "bamboo ceiling."
He points to Yahoo, where Asians hold 17 percent of leadership positions while making up 39 percent of its US workforce. That pattern persists across most tech companies. "A long time ago, Asians were considered the model minority," Gee said. "But certainly, at least in business, we're now the missing minority."
In a paper Gee published this year, he noted that factors preventing more Asian Americans from moving up the ranks include a traditional deference to authority, ineffective communication skills and an aversion to risk taking. Many Asians, he said, are brought up with an emphasis on acquiring skills and achievements, but not on the "soft skills" necessary for managing people at a high level. But the biggest problem may be that no one seems interested in talking about the lack of Asians at the top.
3 Why Gen Y finds it hard to be hired (Sylvia Pennington in Sydney Morning Herald) While over-50s say the odds are stacked against them when it comes to getting a job, the going is equally tough for those at the other end of the age spectrum - school leavers and young people with minimal work experience.
Older Aussies believe ageism and a risk-averse labour market are some of the reasons they're out of favour with employers. But why are Australian businesses also saying no to the notion of taking on and training up a young 'un? Too expensive and too much aggro, says the founder of the MiniMovers removalist chain, Mike O'Hagan, who used to pride himself on giving a couple of school leavers a go each year.
“When you have a downturn in the market . . . hiring young people is going to be one of the first things you stop,” he says. The lacklustre work ethic and entitlement mentality of the latest Me Generation have also soured his attitude in recent years. Many youngsters have had their sights set too high, both at school and at home, and view a good job as their right, regardless of their ability, O'Hagan says.
Latest jobless figures from the Australian Bureau of Statistics suggest plenty of employers share O'Hagan's views, given the growing number of youngsters languishing in the job queue. The national youth unemployment rate for 15 to 24 year olds looking for work has risen to a 12 year high of 13.1 per cent, more than double the general unemployment rate of 5.8 per cent.
Kids who've seen their parents on Struggle Street are often the best bet, agrees Peter Coronica, the former long-time owner of Melbourne's Café Florentine. “If they're from too affluent a family, you know they won't work hard,” he says. “They think they're too good to be a waiter. They treat work like a game of hopscotch . . . they're often searching for something that doesn't exist.”
Sunday, August 24, 2014
Libya capital under Islamist control; India's Modi struggles to deliver reforms; As transfusions decline, blood industry shrinks
1 Libya capital under Islamist control (Chris Stephen & Anne Penketh in The Guardian) Libya has lurched ever closer to fragmentation and civil war after Islamist-led militias seized the airport in the capital, Tripoli, proclaimed their own government, and presented the world with yet another crisis. Operation Dawn, a coalition of Islamist and Misrata forces, captured the airport on Saturday in fierce fighting against pro-government militias after a five-week siege that battered parts of the capital.
The victory, which secures Islamist control over Tripoli, was a culmination of weeks of fighting triggered by elections in July, lost by Islamist parties. Rather than accept the elections result Islamist leaders in Libya accused the new parliament of being dominated by supporters of the former dictator Muammar Gaddafi, and have sought to restore the old national congress.
Libya's official parliament, the house of representatives, in the eastern city of Tobruk, denounced the attack as illegal, branding Dawn a "terrorist organisation" and announcing a state of war against the group. The move leaves Libya with two governments, one in Tripoli, and one in the east of the country, each battling for the hearts and minds of the country's myriad militias.
The weekend's developments threaten to tilt the country across the line from troubled post-Arab spring democracy to outright failed state. Egypt and Sudan are known to be watching developments closely, and last week the French president, François Hollande, said that despite the crises in Iraq, Syria, Ukraine and Gaza, his "biggest concern at the moment is Libya".
The security situation has become so parlous in Libya that the nation has been forced to withdraw as host for the African Cup of Nations in 2017. Many Libyans think fragmentation is now inevitable, with Islamist-led forces strong in Tripoli, and tribal and nationalists dominant in the east of the country. The key to victory could be as much economic as military. Libya's government might have lost control of the capital but for the moment it has international recognition, ensuring access to the country's rich oil reserves and foreign assets, worth an estimated £80bn.
2 India’s Modi struggles to deliver reforms (Khaleej Times) Prime Minister Narendra Modi has shaken up India’s ruling elite in his first 100 days since taking power, but has so far struggled to deliver the bold reforms needed to kick-start the economy. Modi swept to power in May on a tide of hope after years of political stagnation and slowing economic growth in the world’s largest democracy.
His Hindu nationalist Bharatiya Janata party (BJP)’s landslide election win gave them the strongest mandate in a generation. But the new government’s first budget was short on big-ticket reforms, and it ended its first parliamentary session in power this month without managing to push through even modest legislative changes.
Modi’s bold election promise to lift millions of Indians out of poverty through market forces took a further bashing when his government’s refusal to compromise over its food subsidies threatened a trade pact agreed by all 160 World Trade Organisation members. Inflation remains high at nearly 8.0 per cent, while industrial output expanded by an unexpectedly slow 3.4 percent in June, dimming prospects of a quick economic recovery.
Economist Bibek Debroy of the Delhi-based Centre for Policy Research says Modi’s ambitious targets will take time to fulfil. “Some things that need to be done for change require institutions and mechanisms that haven’t yet fallen in place.” When it comes to cleaning up those institutions, few fault Modi’s efforts.
Modi has refocused India’s diplomatic efforts on neighbouring countries after years of neglect and amid growing Chinese influence in the region. But early indications of warmer ties with Pakistan were dashed on Monday when India cancelled high-level diplomatic talks after Islamabad’s envoy held a meeting with Kashmiri separatists.
Sadanand Dhume of Washington-based think tank the American Enterprise Institute believes the positives outweigh the negatives. “Modi has started more slowly than expected, but most early signs are encouraging,” Dhume said. “As decisions pick up steam, this government may well fulfil its potential to transform India.”
3 As transfusions decline, blood industry shrinks (Matthew L Wald in The New York Times) Changes in medicine have eliminated the need for millions of blood transfusions, which is good news for patients getting procedures like coronary bypasses and other procedures that once required a lot of blood. But the trend is wreaking havoc in the blood bank business, forcing a wave of mergers and job cutbacks unlike anything the industry, which became large scale after World War II, has ever seen.
Transfusions are down almost one-third over the last five years, to about 11 million units last year from about 15 million units, according to the American Red Cross, which has about 40 percent of the market. With “minimally invasive” techniques like laparoscopic surgery and other shifts in medicine, demand for blood continues to drop despite population growth and a soaring number of people over 65, who have the most surgeries requiring blood.
Blood bank revenue is falling, and the decline may reach $1.5 billion a year this year from a high of $5 billion in 2008. As fewer units of blood are used, hospitals, seeing strong supply and weak demand, are asking for a lower price per unit.
As a result, the blood bank business has already lost some jobs, and the losses will reach as high as 12,000 within the next three to five years, roughly a quarter of the total in the industry, according to the Red Cross. Officials expressed some concern that the decline could reduce the system’s ability to respond to crises or to invest in new products or research.
From time to time since 2008, the Red Cross operated at a deficit. But it balanced its budget partly by cutting 1,500 jobs. Shaun Gilmore, president of Biomedical Services at the American Red Cross, said the organization was also looking to give up some real estate as it shrinks its operations to an appropriate size.
Blood services amount to $1.8 billion to $1.9 billion of the group’s budget, which this year is about $3 billion, executives said. Of the organization’s 26,500 employees, 17,000 work in the blood program. The Red Cross wants the blood program to cover its own costs, or perhaps achieve a small surplus for reinvestment. One reason for declining demand is that recent studies have found many transfusions unnecessary, so patients are no longer getting expensive services that did them no good.
Saturday, August 23, 2014
Wanted – A US job market fix; A start-up seeks to crowd fund Ebola cure; Music, math and the school curriculum
1 Wanted – A US job market fix (Khaleej Times) US labour markets remain hampered by the effects of the Great Recession and the Federal Reserve should move cautiously in determining when interest rates should rise, Fed Chair Janet Yellen has said. Yellen said she felt the unemployment rate alone was inadequate to evaluate the strength of the US job market.
The jobless rate has fallen faster than expected, but Yellen said the economic disruption of the last five years has left millions of workers sidelined, discouraged, or stuck in part time jobs — facts that are not captured in the unemployment rate alone.
Judging whether the economy is close to full employment is “complicated by ongoing shifts in the structure of the labour market and the possibility that the severe recession caused persistent changes in the labour market’s functioning”, Yellen said.
The Fed has held benchmark rates near zero since December 2008, and has said it would wait a “considerable time” after winding down a stimulative bond-buying programme in October before raising them. Financial markets currently expect rates to raise around the middle of next year.
2 A start-up seeks to crowd fund Ebola cure (Stephanie M Lee in San Francisco Chronicle) With the death toll from the Ebola outbreak at 1,350, one biotechnology company after another is jumping into the fray to develop drugs for the fatal, infectious disease. Now add to the list a tiny, seed-stage startup spun out of UCSF, which has said it wants to crowdfund cash to turn its experimental cancer drug into an Ebola treatment.
OncoSynergy is headquartered in San Francisco’s Mission Bay neighborhood, in one of the life science incubators that make up the California Institute for Quantitative Biosciences (QB3). Founded in 2011, the six-employee company has an experimental drug, OS2966, that’s designed to attack highly aggressive cancers. The Food and Drug Administration has recognized it as an “orphan drug” that could treat glioblastoma, a coveted designation that earns drug makers some tax credits and other incentives.
So what could cancer have to do with Ebola? OS266 apparently inhibits a cell adhesion molecule, CD29, that plays a major role in cancer progression. And scientists also think that CD29 is hijacked by the Ebola virus during infection (and blocking CD29 with monoclonal antibodies similar to OncoSynergy’s drug has been shown in some studies to inhibit Ebola infections).
So on the science crowdfunding site Experiment, the privately held company wants to raise $10,000 in 30 days for a study that will examine if OS2966 can block Ebola infection in human vascular cells. But the company is so small, it can’t actually do the work itself. It’ll hand off the project to scientists across the country through The Science Exchange, an online marketplace that allows researchers to outsource experiments for a fee.
3 Music, math and the school curriculum (Namita Devidayal in The Times of India) As math wizard Manjul Bhargava points out there is an organic link between music and maths. Is it time schools rethink their curriculum? When musician Taufiq Qureshi was a little boy, he was perenially paranoid about his school maths until, one day, his father, the tabla master Alla Rakha said, "Why are you so fearful? We do maths all the time in our music.We are adding, subtracting, multiplying..." And he proceeded to show his son, through a series of tabla compositions, how maths was actually their second language - after music.
There is an organic connection between maths and music - contrary to the perception that one is a cold rational subject and the other a soft emotional one. Just as music is more than a collection of notes, mathematics is more than numbers. Both are about structure, pattern, abstractions and about connecting with the nature - the rhythmic movement of the tides, of our breath, or that there being exactly the same number of petals in daisies sprinkled across a field, which also corresponds to the Fibonacci numbers in mathematics.
This is why Manjul Bhargava, the Princeton-base mathematician, says he keeps a photograph of a field of daisies in his office. Bhargava, who just won the world' most prestigious math prize, the Field Medal, is a concert-level tabla player trained by Zakir Hussain. In his interviews, he talks about the connection between math, music and poetry which, if taught well, could produce an entirely different generation of creative thinkers.
"Why are people who are into exact sciences like math and physics, also into music?" asks Suvarnalata Rao, a musicologist with a background in physics "Because both require abstract thinking - to be able to fathom that abstraction and its organization. That's why children who trained in music will be able to organize thoughts much more logically."
Why do our schools classify math in the core curriculum and music as `extra-curricular'? Math, music, the study of daisies - they all have to somehow filter into our classrooms and imagination.
Fed chief sees slack staying in US jobs market; Europe's existential question; The clout of online ratings
1 Fed chief sees slack staying in US jobs market (BBC) US Federal Reserve chair Janet Yellen has said there is still "remaining slack in the labour market". It was understated by the unemployment rate, at 6%, she said. Ms Yellen said the "underutilisation of labour resources" still "remained significant" to the US economy.
If inflation went up more rapidly than expected, she said, increases in the federal funds rate target could "come sooner" than expected and "could be more rapid thereafter". But she added: "Of course, if economic performance turns out to be disappointing and progress toward our goals proceeds more slowly than we expect, then the future path of interest rates likely would be more accommodative than we currently anticipate."
Luke Bartholomew, manager at Aberdeen Asset Management Investment, said Ms Yellen was being "deliberately vague" by telling the market "nothing to see here". He said there was "some hint" she was still concerned about the labour market. "Which is good because one of the biggest questions about the US economy is just how many of the long term unemployed will ever return to the labour market. "The fear is that no one, least of all Janet Yellen, knows the answer," he added.
2 Europe’s existential question (Khaleej Times) The EU’s latest slip back into contraction is raising near-existential questions among observers of the continent. At an immediate level, Europe’s woes — of Germany and Italy contracting 0.2 per cent for the second quarter — are disheartening, particularly since they are the consequences of failed policies.
The public’s response has been growing cynicism and xenophobia, with radical parties gaining popularity and calling for the dissolution of the union. Rectifying the mistakes requires overcoming substantial political inertia. There is reason to be disillusioned; and yet, it almost unthinkable that borders will once again be closed and currencies split along national lines. It is also worth noting how strong the symbolism of Europe remains to emerging states such as Romania and Ukraine, which have demonstrated strong public enthusiasm for the EU project.
At a broader scale, the EU is currently still the world’s largest economy, worth more than $17 trillion in GDP, more than the US; or even China, Japan and South Korea combined. The continent also boasts the world’s best economies by living standards and quality of life.
The standard cautionary tale is to warn that Europe could become another Japan, stuck helplessly in “lost decades” of stagnation. Since its bubble burst in the early 1990s, Japan’s economy has grown roughly one per cent a year, with recurring periods of contraction. So if Europe were to become Japan… is it only a matter of wounded pride and investors’ profits?
The difference between the EU’s brightest — such as Norway and the Netherlands — and its most troubled is too multi-faceted to fit a simple narrative of a failed idea. The best of Europe remains in many ways the best in the world, and is likely to remain that way for some time.
3 The clout of online ratings (Carlo Ratti & Matthew Claudel in Straits Times) Travel websites have been around since the 1990s, when Expedia, Travelocity and other holiday booking sites were launched, allowing travellers to compare flight and hotel prices with the click of a mouse. Today, the industry is in the throes of a new revolution - this time, transforming service quality. Online rating platforms - specialising in hotels (TripAdvisor), restaurants (Zagat), apartments (Airbnb), and taxis (Uber) - allow travellers to exchange reviews and experiences for all to see.
Hospitality businesses are now ranked, analysed and compared not by industry professionals, but by the very people for whom the service is intended - the customer. This has forged a new relationship between buyer and seller. Customers have always voted with their feet; they can now explain their decision to anyone who is interested. As a result, businesses are much more accountable, often in very specific ways, which creates powerful incentives to improve service.
The impact cannot be overstated. Businesses that attract top ratings can enjoy exponential growth, as new customers are attracted by good overall reviews and subsequently provide yet more (positive) feedback. So great is the influence of online ratings that many companies now hire digital reputation managers to ensure a favourable online identity.
Fortunately, technology is also countering this misuse of ratings. Algorithms can already detect fake reviews by identifying consistently positive or negative opinions from the same reviewer. Geolocation tracking can ensure that only customers who have actually used a service can express an opinion, as is the case with Airbnb.
Not every service, however, has been touched by online ratings. The impact of ratings depends on whether the typical consumer actually reads online reviews before making a decision. While it is increasingly common to do so when, say, booking a hotel room, it is much less so when deciding among, say, bars on a busy street. Needless to say, many developed economies lag behind, at least for now. But the writing is, literally, on the wall - or at least on the screen. Indeed, if you are reading this online and disagree with me, you can explain why in the comments section accompanying this commentary.
Thursday, August 21, 2014
Eurozone slowdown cools hopes of bounce back; Bank of America in $17bn mortgage settlement; Ferguson and the militarization of US police
1 Eurozone slowdown cools bounce back hopes (Graeme Wearden in The Guardian) Private sector growth across the eurozone has slowed this month, bringing job creation to a standstill and dampening hopes that Europe's weak economy will rebound robustly from its recent stagnation.
The latest monthly index of purchasing managers (PMI) found that France's economy continues to struggle. French manufacturing activity is falling at its fastest rate in 15 months. The composite PMI for the eurozone fell to a two-month low of 52.8 this month, down from 53.8 in July. Factory output weakened, with the eurozone manufacturing PMI falling to a 13-month low of 50.8, closer to the 50-point mark that separates expansion from contraction.
Firms also reported that job creation had slowed to near-stagnation in August, suggesting that progress in cutting eurozone unemployment is stalling. Concerns over the eurozone have risen, after figures last week showed that the economy stagnated in the April to June quarter, with German GDP shrinking by 0.2%. August's PMIs suggest that the eurozone will only manage modest growth in the third quarter of 2014.
America's factory sector appears to be growing strongly this month: the US manufacturing PMI jumped to 58.0, the highest reading since April 2010, as companies put last winter's slowdown behind them.
2 Bank of America in $17bn mortgage settlement (BBC) Bank of America has agreed to pay a record $16.7bn to US authorities for misleading investors about the quality of loans it sold. The loans were sold by Countrywide Financial and Merrill Lynch before Bank of America bought them in 2008, at the height of the financial crisis. The associate attorney general said "no institution is either too big or too powerful to escape" punishment.
The settlement will cut the bank's third-quarter profits by $5.3bn. Bank of America will pay a total of $9.65bn in cash and provide consumer relief worth about $7bn, much of which will go towards homeowners struggling with their mortgages. The case centred on Countrywide Financial, the biggest lender at the time of the crisis, and Merrill Lynch selling mortgage loans to investors but not explaining the full extent of the risk involved.
3 Ferguson and the militarization of US police (Khaleej Times) The death of teenager Michael Brown in a suburb of the city of St Louis, in the state of Missouri, US, on August 9 has shone a harsh spotlight on a development that has taken place beyond public scrutiny. That development is the astonishing and dangerous level of the militarisation of local police forces in the US.
“The St. Louis County Police Department’s annual budget is around US$160 million,” Newsweek had reported. “By providing law enforcement agencies with surplus military equipment free of charge, the National Defense Authorization Act encourages police to employ military weapons and military tactics.” The disastrous result of such a piece of legislation can be seen in local American communities which have unknowingly inherited the spoils of foreign wars — from Iraq to Afghanistan. It is the stockpiling of uncounted tonnes of military hardware, the samples of which have appeared on the streets of Ferguson amid increasing street protests.
Only this June, the American Civil Liberties Union released a report that pointed to the acquisition of military equipment by local police as proof that police forces in the US are being transformed into something potentially dangerous.
If there is a small hope to seize upon in the tale of Ferguson, Missouri, it is that the public protests there and all over the US, in solidarity, may coalesce into a movement that reacts to why Americans have been shocked. The message of the protestors is that a violent state response against communities will not be tolerated, and that ordinary Americans cannot rely on the political system alone to address such a problem. Perhaps Ferguson will prove to be the spark of the peace movement that America so desperately needs.