Procione mozza il pene di un uomo

Un procione ha mozzato il pisello di un pervertito che stava tentando di stuprarlo. Alexander Kirilov, 44 anni, era in un fine settimana alcolico con gli amici quando "ho visto il procione e ho pensato di divertirmi", ha detto agli sbalorditi chirurghi d'emergenza moscoviti che stanno cercando di restituirgli la sua mutilata virilità. "Gli hanno detto che possono farlo funzionare ancora ma non possono ricucire quello che il procione ha staccato con un morso" - ha detto un suo amico - "quello è andato per sempre e a loro non è rimasto molto su cui lavorare".
Uomo smerda avvocato in tribunale

Weusi McGowan, 37 anni, si è adirato perché il giudice del tribunale di San Diego, Jeffrey Fraser, ha rifiutato di ricusare l'avvocato d'ufficio Jeffrey Martin, ha detto il pubblico ministero Christopher Lawson. Durante l'intervallo del mattino McGowan ha estratto una borsettina di plastica contenente feci umane e le ha spalmate su viso e capelli di Martin, per poi lanciare gli escrementi verso la giuria, colpendo la valigetta di un giurato. Dopo l'incidente il giudice Fraser ha dismesso la giuria, aggiornato il processo e aumentato a un milione di dollari la cauzione di McGowan, definendolo un pericolo pubblico.
Lo "scroto da violoncello" non esiste

Un'affermata dottoressa ha ammesso 34 anni dopo di avere ingannato una prestigiosa pubblicazione medica inventando una malattia chiamata "scroto del violoncellista". Elaine Murphy - ora baronessa Murphy - si è sognata il doloroso disturbo negli anni 70 ispirandosi ad un'altra burla dell'epoca - il fenomeno di irritazione noto come "capezzolo del chitarrista" - e spedito un rapporto al British Medical Journal, vedendolo con stupore pubblicato. Un portavoce del BMJ ha detto che l'inclusione tra le patologie e il successivo "sgonfiamento" dello scroto del violoncellista hanno "contribuito alla gaiezza della vita".

Attenzione alle palle del pesce palla

Sette persone si sono sentite male dopo avere mangiato testicoli di pesce palla (fugu) preparati in un ristorante non autorizzato a servire la velenosa delicatezza. Il proprietario e cuoco del ristorante a Tsuruoka city non possiede la licenza per servire pesce palla ed è stato interrogato per negligenza professionale dopo che i sette uomini hanno ordinato testicoli di pesce palla alla griglia e si sono sentiti male con i tipici sintomi di avvelenamento - paralisi agli arti, difficoltà respiratorie e perdita di conoscenza - per essere condotti d'urgenza all'ospedale. Il veleno del pesce palla, tetradotossina, è molto potente e porta rapidamente alla morte.
Non insultate i poliziotti di Montreal

La polizia di Montreal ha chiesto alla municipalità di rendere illegale l'essere fatti bersaglio dai cittadini di insulti quali "maiale" e "mangia-ciambelle". Il maggiore Gerald Tremblay ha detto che il suo Comitato per la sicurezza pubblica sta rimuginando la richiesta degli agenti di multare gli insultatori irriverenti: "E' qualcosa che verrà affrontato, sappiamo che altre città hanno approvato decreti circa la materia", ma Montreal non ancora. L'ispettore capo Paul Chablo, direttore delle comunicazioni della polizia, ha detto che gli avvocati stanno esaminando la praticabilità dell'eventuale provvedimento: "Il fattore chiave è di assicurare che diventi uno strumento utile per gli agenti coinvolti, ma senza ledere i diritti di nessuno".
Uomo intrappolato sotto il divano sopravvive a whisky

Il terrorizzato Joe Galliott è rimasto incastrato sotto il suo divano per due giorni e mezzo ed è sopravvissuto sorseggiando una bottiglia di whisky. Il 65-enne divorziato Joe di Yeovil, nel Somerset, che ha gravi problemi alla schiena, è inciampato su un cavo del telefono mentre mancava la luce, atterrando sul divano che si è capovolto su di lui. E' rimasto così senza acqua né cibo per oltre 60 ore fino a quando le sue grida di aiuto sono state udite dal nipote di un vicino, sopravvivendo solo grazie a una bottiglia di whisky che aveva fatto cadere inciampando.
Millionaire's Crisis Plan: Return to Bartering

The Moscow Times, 27 January 2009
By Nadia Popova / Staff Writer

To help pull the world out of economic crisis, German Sterligov, one of Russia's first multimillionaires, has swapped his valenki for polished office boots.

After spending four years in a wooden hut in a forest outside Moscow, Sterligov has leased out almost an entire floor atop a skyscraper in the Moskva-City business district to launch a global barter system.

Sterligov, who doesn't watch television and rarely uses the Internet because of his Orthodox religious principles, plans to start facilitating the barter of debt and goods with his company, the Anti-Crisis Settlement and Accounting Center, by early March.

While the global economic crisis didn't sweep into Russia until September, Sterligov said he sensed that trouble was looming in August and got to work.

"I decided that barter trade would be the right choice for the world in times of liquidity problems and payment delays," he said in a recent interview.

So from August to November, computer programmers hired by Sterligov created an interactive database allowing the barter of debt and goods worldwide.

Sterligov illustrated a possible barter deal with a real-life example: Magnitogorsk Iron & Steel Works' estimated debt of 1 billion rubles ($30.4 million) to Mechel for coal supplies.

"Mechel could put information about MMK's nonpayment in our system and then add which products it needs itself," Sterligov said.

MMK, in turn, would put 1 billion rubles of steel into the system, he said. At some point, a company would surface that wanted steel and had a product needed by Mechel, and the deal would be completed.

"For this to work, you have to have thousands of bids in the system," Sterligov said, adding that debt would probably become the most popular item for barter.

Mechel and MMK declined to comment about their possible participation in such a system.

Barter trade was widespread in Russia in the 1990s, when economic turmoil following the Soviet collapse prompted companies to pay employees and creditors with the products they produced — anything from bricks to vegetable oil.

Sterligov built his fortune through one of Russia's first mercantile exchanges, which he launched in 1990, and subsequently got involved in businesses, "ranging from fish processing to metals trade," he said.

Sterligov said he had invested "several million euros" into the Anti-Crisis Settlement and Accounting Center. "I have no business plan — it's my money — and I spend as much as I want and is reasonable," he said.

Sterligov said he has opened offices through joint ventures in New York, London, Brussels, Hong Kong, Paris and Sydney and plans to open three more soon — in Istanbul, Berlin and Milan. He said his company owns 51 percent in each joint venture.

He declined to disclose the firms' names before an official presentation of his company in late February.

The company currently has 13 regional offices across Russia and plans to boost the number to 1,000 — mostly small offices in towns and villages — by March, when the whole system is to be launched.

Sterligov plans to hire around 15,000 people in Russia, mainly workers who have been laid off in recent months as companies scaled back production and axed investment plans.

Sitting in his office on the 26th floor of the Moskva-City skyscraper, Sterligov said it takes him two hours to get to work from his hut in a forest of the Mozhaisky district of the Moscow region, 100 kilometers northwest of Moscow, where he lives with his wife and five children.

"I still have sheep, chickens, goats and cows, but now they are mainly my wife and children's responsibility," said Sterligov, 42.

He said he would return to the woods as soon as the world gets out of the economic crisis.

Sterligov moved to the forest in 2004 after selling all of his holdings, including "several luxurious houses" in the prestigious neighborhood along the Rublyovo-Uspenskoye Shosse and some property abroad. "I had to pay back huge debts from my election campaigns," Sterligov said.

Sterligov unsuccessfully ran for Krasnoyarsk governor and Moscow mayor before then-President Vladimir Putin ended popular elections for the positions. He also tried to run for president in 2004 but was denied registration because of his failure to get notary certification for the signatures of support that he had submitted. Sterligov says he followed all the proper legal procedures.

He refused to say how he had earned the money for the Anti-Crisis Settlement and Accounting Center.

Several companies contacted by The Moscow Times expressed an interest in using barter trade during the crisis. "We could use barter trade to pay our contractors with the square meters that we build," said Yevgeny Plaksenkov, chief executive of Miel, a leading real estate company. "We know how it all works through our experience in the 1990s."

The crisis of liquidity logically leads to barter trade, he said. "However, barter is like a drug for the economy," he said. "It may give a temporary effect, but if you continue playing with barter it throws the economy backward."

Sergei Ryabov, head of regional and strategy development at Titan-Agro, an agro-business holding, said Sterligov's plans had potential. "In times of crisis, all means are good," he said.

Economists and legal experts, however, were highly skeptical about Sterligov's initiative. "The price of money is not high enough yet to return to the underdeveloped economy of the 1990s," said Natalya Orlova, chief economist at Alfa Bank. "The state was weak then, and taxes were barely paid. It is all different now."

Sergei Voitishkin, a corporate partner at Baker & McKenzie, said barter would not work because of hassles involving taxes and property rights. "The crisis is an opportunity to make economies more efficient, whereas barter schemes throw us back into the Dark Ages, which is definitely not what modern economy needs," he said.
Uomo licenziato per lavarsi il culo
Un uomo di Townsville è stato licenziato per abitudini "non-australiane" nel cesso. Amador Bernabe, 43 anni, per pulirsi il culo usa acqua invece della carta igienica. Mr Bernabe, un operaio filippino con un visto di lavoro, dice che fa parte della sua cultura. Ma giovedì è rimasto choccato quando il suo caporeparto l'ha seguito nel cesso contestando la sua igiene. Mr Bernabe dice che il suo datore di lavoro Townsville Engineering Industries (TEI) lo ha licenziato per non cagare all'australiana.
Uomo con 14 kg di pelle in eccesso

Un uomo che ha perso 178 kg in due anni di esercizi ha dovuto farsi rimuovere dal corpo 14 kg di pelle in eccesso. David Smith pesava 285 kg, come un orso bruno o un giovane bisonte, ed era pericolosamente prossimo a mangiarsi a morte. Ma ha cercato l'aiuto da un istruttore locale di forma fisica che ha contribuito a tagliare il suo peso di quasi due terzi. Tuttavia rimuovere i lembi di pelle attaccati al suo corpo ha richiesto quattro interventi nell'arco di un anno. Mr Smith è ora diventato egli stesso un istruttore di fitness e si è trovato la sua prima ragazza.

NdMW: e così ho accontentato chi lamentava non pubblicassi mai uomini nudi. eccone uno, e per quest'anno siamo a posto.

Le famiglie devono smetterla di disperdere ceneri

Così tanta gente vuole disperdere le ceneri di amici e parenti in luoghi speciali che il governo è stato costretto a emanare regole anti-inquinamento. Il mese scorso lo staff al museo di Jane Austen nel Hampshire ha scoperto mucchi di ceneri umane disperse attorno alla casa della romanziera, e sono diventati popolari luoghi di ricordo anche giardini pubblici, campi di calcio e di golf, fiumi, parchi, laghi e montagne. Fino al 1960 solo un britannico su tre sceglieva la cremazione ed era inusuale che qualcuno chiedesse le sue ceneri fossero disperse. Ma oggi, dice l'Associazione per la cremazione, ci sono più di 420.000 cremazioni all'anno, il 70% di tutte le morti.

La gran parte delle famiglie vuole spargere le ceneri in luoghi significativi per il deceduto. Negli anni '70 solo il 12% delle ceneri veniva portato via dai crematori, adesso sono quasi i due terzi. Gli ambientalisti del Consiglio montano di Scozia e Galles hanno chiesto ai parenti di evitare le cime delle montagne perché il fosfato aggiunto al suolo sovra-stimola la crescita delle piante. Società calcistiche come il Manchester United non permettono più che i resti dei tifosi siano dispersi sui loro campi. Il Manchester City, oltre ad altri club europei, hanno creto degli giardini della rimembranza per preservare la loro erba.

I sikh tradizionalmente disperdono le ceneri lungo i fiumi, ma questa pratica sta diventando comune nella società britannica anche tra hindu, cristiani, atei e pagani. Questa tendenza ha condotto a un nuovo business: una compagnia di navigazione turistica del Leicestershire si è associata a un'impresa di onoranze funebri asiatica e noleggia fino a 12 mini-crociere alla settimana alle famiglie hindu e sikh per disperdere le ceneri dei loro amati nel fiume Soar. "Vengono principalmente da Leicester e abbiamo un tratto di fiume approvato dall'Agenzia ambientale. La cerimonia dura circa un'ora e non abbiamo mai avuto lamentele sull'inquinamento" ha detto Frank Reeves della Barrow Boating.

Il volontariato migliora la vita sessuale dei giovani...

... o almeno così ha commentato il deputato conservatore Tim Loughton in parlamento in una seduta sul finanziamento ai gruppi di volontari: "Siamo tutti a conoscenza del lavoro eccellente che i gruppi di volontariato per la coesione sociale e per impegnare i giovani nelle loro comunità locali, e delle eccellenti qualità che il volontariato porta con sé. Promuove l'autostima e un'inchiesta ha mostrato come il 17% di coloro tra i 18 e i 24 anni migliora la propria vita sessuale". Ma Mr Loughton, deputato per East Worthing and Shoreham, ha minimizzato il commento dicendo di avere menzionato il sesso per attirare l'attenzione perché la Camera era molto rumorosa.
Pappagallo bandito da campo di calcio per imitare il fischio dell'arbitro

Qui nel Hertfordshire lo spareggio con sette goal tra Hatfield Town ed Hertford Heath si è trasformato in un casino quando un pappagallo verde brillante ha cominciato a distrarre i giocatori, causando più volte l'interruzione della partita. L'uccello si è comportato bene durante il primo tempo, osservando attentamente il gioco, ma al decimo del secondo tempo ha cominciato a imitare il fischietto dell'arbitro, causando confusione dentro e fuori dal campo, dal quale è stato allontanato con la signora che lo accompagnava. L'arbitro Gary Bailey ha detto di non essergli mai capitato niente di simile nella sua carriera. Hatfield Town ha vinto 5-2 dopo i supplementari.

Photo courtsey of Cairns Unlimited www.cairnsunlimited.com


I cani pedigree diventano sempre più stupidi

I cani di pedigree stanno diventando sempre più stupidi a causa del fatto che vengono ora incrociati per il loro aspetto e non l'intelligenza, dice una nuova ricerca. L'agilità fisica e mentale di molte razze si sta erodendo perché i proprietari cercano animaletti docili e carini. Nel XIX secolo i cani venivano selezionati per le loro forza e abilità per fare la guardia alla casa e al bestiame, ma ora un grosso cambiamento nella riproduzione significa che i discendenti di quegli orgogliosi cani lavoratori sono meno attenti e reattivi agli ordini. Scienziati svedesi hanno trovato forti prove che la riproduzione per l'aspetto ha condotto a un declino nell'intelligenza. L'autore del rapporto, l'etologo Kenth Svartberg dell'università di Stoccolma, dice che i cambiamenti sono avvenuti nell'arco di poche generazioni: "Le moderne pratiche di riproduzione incidono sul comportamento e le abilità mentali delle razze pedigree, oltre che sulle loro caratteristiche fisiche".

Quarta puntata dell'intervista a Londradical sulla rehab nella Clinica del Parco, al quale Londradical devo muovere un appunto: alcuni lettori hanno notato che tutti questi tuoi bei dipinti sono in realtà le stesse immagini trattate al PhotoShop...

PhotoImpact. Se volevi un Canaletto intervista Claude Monet.

Vabbè, comunque in tema dovevamo parlare dell'arteterapia: in che cosa consiste?

Ognuno del gruppo dipinge il suo stato d'animo in 45 minuti e in altri 45 lo psichiatra lo commenta.

Dei tuoi disegni cos'ha detto?

Del primo ha detto: "Ecco, qui abbiamo un... un logo??" Cazzo, era la rosa nel pugno, la disegno benissimo. "A dotto', è il simbolo dell'internazionale socialista!" "Ah ecco, mi pareva". Fine del commento. La seconda volta gli ho fatto una mappa d'Europa con tutti i confini al posto giusto e le capitali e città dove ho vissuto, e lui a tutti: "Uhm, ci sono anche gli stati baltici, vedete, quello al centro è la Bulgaria ma manca la capitale Bucarest, forse perché non c'è mai stato?" "Sì, ci sono stato, e anche a Sofia per 6 anni, ma evidentemente l'ho rimossa", al che lui per cambiare discorso indica l'isola in alto a sinistra e fa: "Come mai ha messo Londra come capitale del Madagascar?", "Perché Antananarivo è troppo lunga e non ci stava", che altro potevo rispondere a cotanto psico-geografo? La terza volta spende mezz'ora a commentare un disegno con solo un puntino in mezzo, poi passa al mio che è di un culo perfetto troneggiante su due gambe inguainate in calze di seta con la riga e sandali rossi coi tacchi a spillo...

Vedo che frequenti spesso questo blog.

... e lui non sa come commentare: "Uhm... uhm... e questo cosa rappresenta?" "A dotto', VOGLIA DI SESSO! qui dentro non si scopa!" "Uhm... già, come vede c'è scritto anche qui sul cartello che tra i pazienti non è consentito la promiscuità"

Non è consentito? Guarda che poi i miei lettori pensano a un mio errore di stompa.

No, no, nel regolamento c'è proprio scritto che non è consentito la promiscuità, anche se...

Anche se?

Anche se la promiscuità non è consentito tra pazienti, ma non fa menzione del personale, e certe infermiere erano notevoli...

Mi sento ingelosire.

Non devi, io per il gusto di trasgredire il proibito ho puntato sulle pazienti e ce n'erano alcune mica male...

Strano, solitamente le alcoliste sono post-menopausa, gonfie e diroccate.

Per fortuna per le giovani esiste la cocaina e lì alla Clinica del Parco hanno tutte le dipendenze, per cui avevo per le mani due 23-enni fisicamente non ancora rovinate, tutt'altro...

Sgrunt, te le sei trombate?

No, non me la davano e le ho scambiate con una 46-enne istruttrice di psicomotricità...

Doppio sgrunt, te la sei trombata?

No, era incinta di otto mesi per cui quando ci esemplificava gli esercizi le uscivano spesso i gemelli, non ti dico che macello per rimetterglieli dentro.

Insomma non hai trombato.

Solo l'orso bianco di peluche di un avvocato di Chioggia di cui si serviva anche un architetto di Bergamo...

Anche l'architetto sodomizzava l'orsetto?

No, l'avvocato.

Parliamo di più di questi pazienti: quali sono i casi più gravi?

Quelli dei loro parenti. Ce ne sono alcuni da interdire e internare. Allora, c'è questo vecchietto in pensione dopo una vita di turni massacranti nelle cave, bello rubizzo e rotondo perché la sera si spara una bottiglia di rosso e anche qualche grappino, da buon ex alpino. Quella vacca della moglie e quei bastardi dei figli lo ricoverano perché "il problema è che da pensionato si annoia, ma invece di bere potrebbe badare ai nipotini e potarci gli alberi e altri lavori di manutenzione domestica". Cazzo, ma questi vogliono baby sitter e giardiniere gratis dopo che lui per 50 anni si è spaccato la schiena, sempre sobrio sul lavoro, a mantenere queste serpi! Figa, ma alla sua età lascialo bere, Dio gatto! Dio gatto si può dire?

In effetti a rifletterci non suona tanto blasfemo quanto altri animali. Per adesso te lo lascio passare, poi mi raccoglierò in preghiera per chiedere lumi alla Madonna pecora. Come si è risolto il problema del vecchietto?

Gli ho sterminato la famiglia, compresi quei mocciosi dei nipotini viziati. Certe buone azioni socialmente utili un sicario umano le fa gratis. Poi per tirargli su il morale e il pisello una notte l'abbiamo imbottito di Viagra e infilato nella camera delle due ragazzine cocainomani, che non si sono mai divertite tanto.

Questa clinica mi sembra roba da film di Pierino.

Non offendiamo, siamo al ben più alto livello di Totò medico dei pazzi.

Adesso basta, voglio divertirmi anch'io: piglia 'sta pastiglia di Viagra e succhiami la pesca
Nei post precedenti avevamo lasciato Londradical con un bacio alla pesca, oggi riprendiamo il resoconto della sua esperienza di disintossicazione nella Clinica del Parco. Ci hai già raccontato dei farmaci e degli esami psicometrici, ma com'erano strutturate le giornate e com'erano gli altri pazienti?

Impazienti. Di andarsene. Normalmente il percorso di disintossicazione dura un mese, ma anche due come nel caso di una suora. Vestiva laicamente e nessuno si era accorto che fosse una suora fino al giorno della sua dimissione, quando invece dei parenti è venuta a prenderla un'arcigna madre superiora. E pensare che con lei scherzavo a scombinare il presepe, voltando le pecorelle verso il corridoio a guardare i pazienti invece del bambin Gesù, che tra l'altro era grasso come un maiale...

Londradical, ti prego, stai divagando e pericolosamente scivolando nel blasfemo.

Non c'era l'intenzione, ma insomma, uno si pone delle domande: non bastasse che uno fa già un po' fatica a convincersi che la mamma fosse vergine, ma addirittura partorire un bebè grosso come un porcello, lì in mezzo tra un asino e un bue... e tutte quelle pecore sdegnate che si voltano dall'altra parte a guardare noi pazienti... una cosa imbarazzante quando passavi in corridoio...

Ma se le giravate tu e la suora!


E cosa pensi che potessimo fare in una clinica psichiatrica? Lì dentro se non ti comporti come un pazzo pensano che sei anormale. Perciò con la suora scombinavamo anche i cartelli direzionali per mandare gli alcolisti al bar e i cocainomaini in geriatria, tanto per tirare su i vecchietti con qualche pista, finché uno è schiattato di overdose: era il vecchio 84-enne che scatarrava sempre sul balcone e ha tirato le cuoia nel suo stile scatarrando su un re magio del presepe un cubo verde-giallo-marrone sanguinolento che la suora ha identificato come la sua anima, così abbiamo avuto un'interpretazione di cosa cazzo sia 'sto schifo di mirra. Credi a me: meglio la birra.

Vi sono stati altri incidenti durante la tua permanenza?

Certamente, non dimentichiamo che sono un sicario complusivo e ne ho eliminati parecchi. Alla prima riunione del mattino si raccoglievano i nomi di quelli che in giornata avevano programmate visite mediche personali. Questi non tornavano mai, ma sospetto anche medici e infermieri per fare posto a nuovi pazienti in quanto io ne ho fatti fuori solo un paio di dozzine.

Come li hai tratti in salvo dalla miseria della loro sub-esistenza terrena?


Senza armi convenzionali permesse, non restava che indurli all'impiccagione con le cinture degli accappatoi. Così ho fatto fuori i due più simpatici, mentre a quelli antipatici non insaponavo il cappio che perciò funzionava male e così invece di schiattare sono rimasti a vita con emiparesi tipo ictus e adesso si aggirano nel Parco zoppicando, con la faccia tutta storta, eh eh!

Ma cosa c'è da ridere? Che sadico!

Sei tu che insisti per un blog politicamente scorretto: tengo su il tono...

Sopra le righe, fuori dal vaso...

Ecco, appunto il vaso. Ce ne fosse stato uno dei miei compagni di stanza che non giocasse al pompiere col WC...

Non si dice di far centro, ma di farla almeno dentro.

Perciò li ho evirati tutti e poi andavano molto più precisi col catetere...

Evirati? ma se dici che non sono consentite armi, nemmeno limette per unghie e bottiglie e bicchieri di vetro.

Gli specchi: i progettisti del manicomio si sono dimenticati di cosa sono fatti gli specchi. Ne ho rotti un bel po' perché quando sono entrato ci vedevo il ritratto di Dorian Gray. Infatti quando sono entrato avevo anche un'età cerebrale di 80 anni secondo il Brain Training del Nintendo DS, ma durante la degenza mi sono allenato con gli esercizi quotidiani del Dr Kawashima.

E adesso?

Adesso ho un'età mentale di otto anni. Ho tolto il Brain Training dal Nintendo per metterci SuperMarioKart. Però Yoshi con l'Ovomobile e Luigi con l'aspirapolvere Poltergust sono più veloci di Mario, e la più figa è Peach, che ti assomiglia ma è bionda, con la Turboreale rosa: ogni tanto me la presta per lasciarmi sfoderare il 49% di componente femminile della mia sessualità automobilistica.

E di questo gli psichiatri cosa ne pensano?

E' sopravvissuto solo quello che fa arteterapia...

Interessante, la prossima volta ci parlerai dell'arteterapia

If the state can't save us, we need a licence to print our own money. It bypasses greedy banks. It recharges local economies. It's time to think seriously about an alternative currency

George Monbiot, The Guardian, Tuesday 20 January 2009

In Russell Hoban's novel Riddley Walker, the descendants of nuclear holocaust survivors seek amid the rubble the key to recovering their lost civilisation. They end up believing that the answer is to re-invent the atom bomb. I was reminded of this when I read the government's new plans to save us from the credit crunch. It intends - at gobsmacking public expense - to persuade the banks to start lending again, at levels similar to those of 2007. Isn't this what caused the problem in the first place? Are insane levels of lending really the solution to a crisis caused by insane levels of lending?

Yes, I know that without money there's no business, and without business there are no jobs. I also know that most of the money in circulation is issued, through fractional reserve banking, in the form of debt. This means that you can't solve one problem (a lack of money) without causing another (a mountain of debt). There must be a better way than this.

This isn't my subject and I am venturing way beyond my pay grade. But I want to introduce you to another way of negotiating a credit crunch, which requires no moral hazard, no hair of the dog and no public spending. I'm relying, in explaining it, on the former currency trader and central banker Bernard Lietaer.

In his book The Future of Money, Lietaer points out - as the government did yesterday - that in situations like ours everything grinds to a halt for want of money. But he also explains that there is no reason why this money should take the form of sterling or be issued by the banks. Money consists only of "an agreement within a community to use something as a medium of exchange". The medium of exchange could be anything, as long as everyone who uses it trusts that everyone else will recognise its value. During the Great Depression, businesses in the United States issued rabbit tails, seashells and wooden discs as currency, as well as all manner of papers and metal tokens. In 1971, Jaime Lerner, the mayor of Curitiba in Brazil, kick-started the economy of the city and solved two major social problems by issuing currency in the form of bus tokens. People earned them by picking and sorting litter: thus cleaning the streets and acquiring the means to commute to work. Schemes like this helped Curitiba become one of the most prosperous cities in Brazil.

But the projects that have proved most effective were those inspired by the German economist Silvio Gessell, who became finance minister in Gustav Landauer's doomed Bavarian republic. He proposed that communities seeking to rescue themselves from economic collapse should issue their own currency. To discourage people from hoarding it, they should impose a fee (called demurrage), which has the same effect as negative interest. The back of each banknote would contain 12 boxes. For the note to remain valid, the owner had to buy a stamp every month and stick it in one of the boxes. It would be withdrawn from circulation after a year. Money of this kind is called stamp scrip: a privately issued currency that becomes less valuable the longer you hold on to it.

One of the first places to experiment with this scheme was the small German town of Schwanenkirchen. In 1923, hyperinflation had caused a credit crunch of a different kind. A Dr Hebecker, owner of a coalmine in Schwanenkirchen, told his workers that if they wouldn't accept the coal-backed stamp scrip he had invented - the Wara - he would have to close the mine. He promised to exchange it, in the first instance, for food. The scheme immediately took off. It saved both the mine and the town. It was soon adopted by 2,000 corporations across Germany. But in 1931, under pressure from the central bank, the ministry of finance closed the project down, with catastrophic consequences for the communities that had come to depend on it. Lietaer points out that the only remaining option for the German economy was ruthless centralised economic planning. Would Hitler have come to power if the Wara and similar schemes had been allowed to survive?

The Austrian town of Wörgl also tried out Gessell's idea, in 1932. Like most communities in Europe at the time, it suffered from mass unemployment and a shortage of money for public works. Instead of spending the town's meagre funds on new works, the mayor put them on deposit as a guarantee for the stamp scrip he issued. By paying workers in the new currency, he paved the streets, restored the water system and built a bridge, new houses and a ski jump. Because they would soon lose their value, Wörgl's own schillings circulated much faster than the official money, with the result that each unit of currency generated 12 to 14 times more employment. Scores of other towns sought to copy the scheme, at which point - in 1933 - the central bank stamped it out. Wörgl's workers were thrown out of work again.

Similar projects took off at the same time in dozens of countries. Almost all of them were closed down (just one, Switzerland's WIR system, still exists) as the central banks panicked about losing their monopoly over the control of money. Roosevelt prohibited complementary currencies by executive decree, though they might have offered a faster, cheaper and more effective means of pulling the US out of the Depression than his New Deal.

No one is suggesting that we replace official currencies with local scrip: this is a complementary system, not an alternative. Nor does Lietaer propose this as a solution to all economic ills. But even before you consider how it could be improved through modern information technology, several features of Gessell's system grab your attention. We need not wait for the government or the central bank to save us: we can set this system up ourselves. It costs taxpayers nothing. It bypasses the greedy banks. It recharges local economies and gives local businesses an advantage over multinationals. It can be tailored to the needs of the community. It does not require - as Eddie George, the former governor of the Bank of England, insisted - that one part of the country be squeezed so that another can prosper.

Perhaps most importantly, a demurrage system reverses the ecological problem of discount rates. If you have to pay to keep your money, the later you receive your income, the more valuable it will be. So it makes economic sense, under this system, to invest long term. As resources in the ground are a better store of value than money in the bank, the system encourages their conservation.

I make no claim to expertise. I'm not qualified to identify the flaws in this scheme, nor am I confident that I have made the best case for it. All I ask is that, if you haven't come across it before, you don't dismiss it before learning more. As we confront the failure of the government's first bailout and the astonishing costs of the second, isn't it time we considered the alternatives?
Roubini Predicts U.S. Losses May Reach $3.6 Trillion

By Henry Meyer and Ayesha Daya

Jan. 20 (Bloomberg) -- U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.

“I’ve found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. “If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”

Losses and writedowns at financial companies worldwide have risen to more than $1 trillion since the U.S. subprime mortgage market collapsed in 2007, according to data compiled by Bloomberg.

President Barack Obama will have to use as much as $1 trillion of public funds to shore up the capitalization of the banking sector, following the $350 billion injection by the Bush administration, Roubini told Bloomberg News. Congress last year approved a $700 billion rescue fund, of which half remains to be disbursed.

Bank of America Corp., the largest U.S. bank by assets, posted a quarterly loss of $1.79 billion last week, its first since 1991, and received $138 billion in emergency government funds. Citigroup Inc. posted an $8.29 billion fourth-quarter loss, completing its worst year, and plans to split in two under Chief Executive Officer Vikram Pandit’s plan to rebuild a capital base eroded by the credit crisis.

‘Bankrupt’ System

“The problems of Citi, Bank of America and others suggest the system is bankrupt,” Roubini said. “In Europe, it’s the same thing.”

Stocks in Europe, Canada and Brazil dropped yesterday on speculation government efforts to shore up the financial industry will fail to stem the deepening global recession. The U.K.’s Royal Bank of Scotland Group Plc said it expects to post a loss of as much as 28 billion pounds ($41 billion) for 2008 and the government got ready to raise its stake in the lender.

Oil prices will trade between $30 and $40 a barrel all year, Roubini predicted.

“I see commodities falling overall another 15-20 percent,” Roubini said. “This outlook for commodity prices is beneficial for oil importers, it’s going to imply that economic recovery might occur faster, but from the point of view of oil exporters, this will be very negative.”

Oil has tumbled 77 percent from its July high of $147.27 as the global economy sinks into recession, straining the budgets of crude exporters. Saudi Arabia, Oman and Dubai, the second- largest sheikdom in the United Arab Emirates, have said they will post budget deficits this year.

Crude oil for February delivery fell to $32.70, down 10.4 percent from last week’s close and the lowest since Dec. 19, on the New York Mercantile Exchange today. The contract traded at $33.37 a barrel at 10:45 a.m. London time.

To contact the reporters on this story:
Henry Meyer in Dubai at hmeyer4@bloomberg.net
Ayesha Daya in Dubai adaya1@bloomberg.net
Kigali-Kinshasa: Ennemi commun
Par Gaël VAILLANT, leJDD.fr, Mardi 20 Janvier 2009

Les armées congolaise et rwandaise interviennent conjointement depuis mardi dans l'Est de la République démocratique du Congo. Les autorités veulent mettre un terme à la rébellion hutue, alors que les tutsis de Laurent Nkunda ont annoncé "la fin de la guerre". Kigali et Kinshasa font un pied de nez à Nicolas Sarkozy, qui a émis plusieurs idées sur le conflit du Nord-Kivu vendredi dernier.

Selon des sources militaires, l'armée rwandaise est entrée mardi matin dans la région de Goma, la capitale du Nord-Kivu, dans l'est de la République démocratique du Congo (RDC). Elle aurait pour objectif de pourchasser les rebelles hutus, rassemblés au sein des Forces démocratiques de libération du Rwanda (FDLR). Cette intervention de l'infanterie rwandaise, et ses 1500 à 2000 hommes, se fait en collaboration avec Kinshasa, selon un accord défini le 5 décembre dernier. "La Monuc prend note de ce dernier développement et surveille très attentivement la situation", a déclaré un porte-parole de la force de l'ONU, déployée en RDC mais qui ne participe pas à l'opération.

Combattre les groupuscules hutus, c'est favoriser indirectement les autres rebelles, tutsis, rassemblés dans le Congrès national pour la défense du peuple (CNDP) de Laurent Nkunda. Une organisation combattue pendant trois mois par l'Etat congolais. Mais le CNDP a annoncé vendredi soir dernière la fin des hostilités avec les forces gouvernementales, envisageant même la signature d'un traité. Alors que les rebelles hutus sont de plus en plus isolés, le conflit dans l'est congolais semble en voie de résolution.

Un interventionnisme déprécié?

Vendredi dernier, Nicolas Sarkozy a dévoilé, lors de ses voeux au corps diplomatique, ses idées sur le conflit dans l'Est congolais. Pour ramener la paix dans cette région, le chef d'Etat est resté très évasif. Il a prôné "un dialogue non seulement conjoncturel mais aussi structurel", qui inclurait la question du "partage de l'espace et des richesses". Il a décrit le Rwanda comme un "pays à la démographie dynamique et à la superficie petite", et la RDC comme "un pays à la superficie immense" avec une "organisation étrange des richesses frontalières".

Résultat, les trois propositions françaises -l'exploitation commune des ressources minières frontalières, une réforme foncière et une réflexion approfondie sur le problème des minorités- n'ont pas été prises en compte par les autorités congolaises ou rwandaises. Plusieurs députés des deux pays se sont même indignés contre l'interventionnisme français. Mboso N'Kodia Pwanga, élu dans la province de Bandundu, s'est ainsi ému dans le quotidien congolais Le Phare: "A quel titre nous allons cogérer nos richesses nationales, inaliénables donc, avec un pays voisin?" Face à cette levée de boucliers, Pierre Jacquemot, ambassadeur de France en RDC, a dû démentir dans le quotidien L'Avenir "l'existence d'un plan français": "Nicolas Sarkozy a seulement lancé des idées pour sortir de cette crise", a-t-il justifié, après une réunion d'urgence avec le ministre de la communication congolais. Mais, au vu des derniers événements, les autorités ne semblent pas avoir besoin de Nicolas Sarkozy, en voyage officiel en RDC début mars prochain, pour régler le conflit.

Vieux démons

Toutefois, il est peu probable que les propositions de l'Elysée aient provoqué la décision du CNDP, dont l'un des dirigeants, Bosco Ntangada, a annoncé vendredi soir "la fin de la guerre" contre les forces régulières de RDC. Laurent Nkunda, à la tête du mouvement, a dû confirmer l'information lundi matin: "Puisque nous allons désormais tous [avec l'armée congolaise] tirer dans la même direction, la guerre est terminée", a-t-il déclaré sur RFI. C'est plutôt l'union des forces rwandaises et congolaises, actées le 5 décembre dernier, qui a convaincu les rebelles tutsis d'arrêter les combats. Le CNDP, fragilisé par des luttes internes entre Bosco "Terminator" Ntangada et Laurent Nkunda, préfère la négociation, plutôt qu'être pris entre deux feux.

Le CNDP se mettant à disposition de la RDC, les armées officielles vont concentrer leurs efforts sur les rebelles hutus du FDLR. La présence de ces derniers est la principale source de tension entre la RDC et le Rwanda. Ils sont, pour la plupart, des anciens membres des milices considérées comme les responsables du génocide de 1994. Pris en étau, les rebelles hutus ne devraient pas tenir longtemps face au nombre écrasant de combattants issus du CNDP ou des troupes régulières de RDC et du Rwanda. Ce règlement de crise mettrait fin aux négociations de paix de Nairobi, qui resteront ainsi en échec. Les tutsis emmenés par Laurent Nkunda devraient même sortir grand gagnants du conflit: en échange de la paix, ils devraient obtenir, selon Radio Okapi, une amnistie totale couvrant tous les "faits de guerre" depuis 1994, massacres compris...
Sarkozy veut dépecer la RDC

20 janvier 2009, Kinshasa

Le président français a jeté un pavé dans la mare en proposant une restructuration de la région des Grands Lacs en faveur du Rwanda et au détriment de la république démocratique du Congo. Celle-ci n'apprécie guère.

Lors de son message de vœux au corps diplomatique, le président français a fait un tour d'horizon général des grandes questions internationales. Abordant le chapitre de l'Afrique, et plus particulièrement de la région des Grands Lacs, Nicolas Sarkozy a tenu exactement ces propos : "Quant à la région des Grands Lacs, la violence s'est une nouvelle fois déchaînée. L'option militaire n'apportera aucune solution aux problèmes de fond qui se posent de façon récurrente depuis dix ans. Cela met en cause la place, la question de l'avenir du Rwanda, avec lequel la France a repris son dialogue, pays à la démographie dynamique et à la superficie petite. Cela pose la question de la république démocratique du Congo, pays à la superficie immense et à l'organisation étrange des richesses frontalières. Il faudra bien qu'à un moment ou un autre il y ait un dialogue qui ne soit pas simplement un dialogue conjoncturel mais un dialogue structurel : comment, dans cette région du monde, on partage l'espace, on partage les richesses et on accepte de comprendre que la géographie a ses lois, que les pays changent rarement d'adresse et qu'il faut apprendre à vivre les uns à côté des autres ?"

Le journal Le Monde, dans son édition du 18 janvier 2009, reprend ce discours en allant en profondeur pour confirmer l'existence du plan Sarkozy comme initiative de paix qu'il compte discuter avec les autorités de Kinshasa lorsqu'il s'y rendra, au mois de mars. Il propose "l'exploitation en commun par la RDC et le Rwanda des richesses du Nord-Kivu". Sarkozy va plus loin en proposant le "partage" de l'espace et des "richesses naturelles". Quel espace doit-on partager ? Le Kivu ? Pourquoi ? Pourquoi seulement les richesses du Kivu ? Qu'est-ce que le Rwanda donne en échange pour partager avec la RDC ?

Si les choses traînent, c'est parce que le Rwanda brandit toujours la question sécuritaire. Or le président français ne devrait pas oublier que la république démocratique du Congo compte près de 450 ethnies qui ne se sont jamais fait la guerre. Mais depuis des décennies, le Rwanda, qui ne compte que DEUX ethnies, est toujours en guerre et a connu le génocide de 1994 – où la France est intervenue avec l'opération Turquoise –, qui a exporté la rivalité interethnique au Congo.

Ce plan Sarkozy viserait-il à dédouaner la France de son dialogue avec le Rwanda ? C'est une affaire franco-rwandaise qui ne concerne nullement la RDC. Elle ne peut servir de voie de sortie. Pire, le président français qualifie d'"organisation étrange" les institutions et les dirigeants de la RDC. Ces propos sont pour le moins étonnants quand on sait que des "conseillers occidentaux" sont à la base de cette organisation étrange. A quoi servent alors tous ces appuis et encouragements des ambassadeurs français accrédités en RDC ? De la poudre aux yeux ?

Encore un "faux pas de Sarkozy" après celui de Dakar [le discours de Dakar, en juillet 2007, avait suscité un tollé en Afrique – il parlait notamment de "l'homme africain [qui n'était pas] entré dans l'Histoire"] ? Que ce plan soit publié quatre jours avant l'entrée en fonction de Barack Obama, cela suscite des interrogations et n'est pas gratuit. La RDC considère la France comme un "Etat partenaire naturel". Depuis de Gaulle jusqu'à Chirac, en passant par Giscard d'Estaing et Mitterrand, la France a toujours été aux côtés des opprimés, et particulièrement avec la RDC, en se distinguant par une coopération dynamique et multisectorielle. Si la France de Sarkozy veut "changer" le monde, il ne lui appartient pas de transformer le Kivu en Proche-Orient.

Le Potentiel, http://www.lepotentiel.com/
Hyperinflation Will begin In China And It Will Destroy The Dollar

Eric deCarbonnel, www.marketskeptics.com, 20 January 20

The conventional wisdom on China is dead wrong. Specifically, there is a widespread belief, as expressed by Goldman Sachs, that "China will keep the yuan trading within a narrow range in 2009 due concerns about exporters." Worse still, others are even predicting that China will devalue its currency! The sheer wishful thinking is astounding! The idea that "China will keep the dollar peg to help its exporters" ranks all the way up there with "Housing prices always go up" and "You can spend your way to prosperity".

THERE ARE NO FREE LUNCHES

If you have learned nothing else in the last year and a half, you should have learned that if something sounds too good to be true, that is because it IS too good to be true. The media overwhelmingly presents China's dollar peg as a win-win situation: Americans get cheap imports and low interest rates while China gets a strong manufacturing sector. While commentators do sometimes debates whether China will keep lending us money forever, they never talk about the REAL problem with the dollar peg.

The little discussed downside of the dollar peg is all the money China has to print to maintain it. China's Central Bank puts the extra dollars it receives from its trade surplus into its growing foreign reserves and then prints yuan to pay Chinese exporters. This results in an increase in China's base money supply by an amount equal to the increase in its foreign exchange reserves. While China's ability to keep accumulating US reserves is endless, its ability to keep its money supply under control is not.

The true threat to the dollar peg

If there is one development which could force China to drop its dollar peg, it is out of control inflation. Rampant inflation would result in millions of citizens starving and would create widespread social unrest. Keeping food prices low is a matter of political survival for Chinese authorities. So, facing the choice between losing their grip on power and losing the dollar peg, they will not hesitate for a second to sacrifice the dollar to save their own skin.

So far China been able to contain inflation, but… In recent years, China has been able to contain the inflationary effects of its trade surplus by soaking up or "sterilizing" all the extra liquidity (printed yuan). These sterilization efforts mostly involved:

A) Raising the reserve requirements of commercial banks. In essence, the PBOC (People's Bank of China) prints money to fund its trade surplus and then increases the amount of yuan banks have to keep as reserves at the Central bank, preventing the printed cash from reaching the economy. As of May of last year, commercial banks' reserve requirements were at 16.5 percent

B) Selling RMB-denominated sterilization bills. The state owned and controlled banking system has been forced to absorb the majority of these bills. As of May of last year, the value of sterilization bills reached 10 percent of bank deposits.

Taken together, these two steps have immobilized roughly 26.5 percent of Chinese commercial banks' deposits. This shows the magnitude China has had to intervene so far, as the value of sterilization instruments outstanding has been increasing at roughly the same rate as its foreign reserves.

While China has been able to contain inflation to single digits for the last decade, that is about to change. All economic forces are aligning in China for a surge in inflation.

1) China has abandoned its sterilization operations

Currently, the PBOC has abandoned its sterilization efforts all together:

A) The PBOC has lowered reserve requirements by 2 percentage point for China's big banks and by 4 percentage point for all other banks.

B) The PBOC has scaled back sterilization efforts by reducing liquidity-draining three-month and 52-week bill sales from once a week to once every two weeks. As a result of these decreasing sales, the clearing house for China's interbank bond market expects PBOC's 2009 bill issues to be down over 70%, which will increase the Chinese base money supply by 2 trillion yuan.

These actions signify that the PBOC has ceased sterilizing its currency interventions and is focusing on (imaginary) deflation risks. A flood of cash has been unleashed, and a tsunami of pent-up inflation will soon hit China.

2) China is running record trade surpluses

China's imports are crashing much faster than its exports. In December, Chinese imports fell 21.3% while exports fell only 2.8%. As a result, China has been running record trade surpluses these last three months: $35 billion, $40 billion, and 39 billion.

The reason for China's surplus is obvious when you think about it. Consider the following list of goods a country can exports and ask yourself what would hold up best during a severe global economic downturn.

*** Commodities (Oil, gas, steel, etc)
*** Capital goods (Airplanes, Caterpillars, Machinery for new factories, Machinery for new mining/oil exploration projects, etc)
*** Durable goods (SUVs, CARs, appliances, business equipment, electronic equipment, home furnishings, etc)
*** Luxury goods (brand name products, designer clothing, artwork, etc...)
*** Cheap consumer goods (everything you buy at Wal-Mart)

The answer is that the demand for cheap consumer goods will hold up better than anything else. This can easily be seen in the retail sales this holiday shopping season. Wal-Mart, which imports 70% of its products from China, was the only retail to post a year-on-year increase in sales. So while the world economy might be imploding spectacularly, demand for Wal-Mart's cheap Chinese goods is holding up quite well. The implications of this is that while China's exports will fall, they will fall less than those of any other country.

The current trade surplus is still completely unsustainable. If China's continues running a 40 billion dollar trade surplus all year, its base money supply will double by the end of 2009. Also, since China has halted the appreciation of the yuan, its trade surplus is unlikely to shrink as demand for cheap consumer goods is set to remain strong.

3) The Chinese economy will shrink in 2009

Consistently amazing economic growth is the biggest factor which has helped China contain inflation. Inflation happens when the money supply is growing faster than the economy, and china's economy has been growing fast. This economic growth has helped absorb the enormous quantities of yuan that have been printed to support the dollar. However, this will change in 2009. Due to falling global demand, China's economy is set for zero, if not negative, growth which will remove a significant mitigating force against inflation and amplify the inflationary impact of China's printing press.

Side note: China's economic strength is underestimated

It is important to note that, while economic growth will go probably go negative, China's economy will not crash. The strength of the Chinese economy is widely underestimate in the media today. In addition to the resilient worldwide demand for its cheap consumer goods, China is also benefiting for import substitution at home. This is why imports to China are falling so fast: Chinese are switching to cheap domestic product instead of expensive foreign imports. So while there has been a sharp drop in Chinese demand for big-ticket brands (Dior, Chanel, Hermes, etc…) and others luxury items, knock-offs and other cheap goods are still flying off the shelves. Chinese consumers are downshifting, but they are still spending strong, as reflected by the 21% year-over-year growth in 2008.

However, despite China's strong fundamentals, the current worldwide downturn is too strong for it to escape. The worldwide financial carnage is so severe that even the demand for cheap consumer goods will decrease. As a result, while China may outperform every country on Earth, its economy will still suffer in 2009.

4) Deflation in China would be too good to be true

China has been in a constant war with the inflation caused by the dollar peg. Economic growth and sterilization operations alone have not been enough to absorb the growing liquidity, and China has been forced to turn to ever more drastic steps in its efforts to contain inflation. These stifling policy measures together with its sterilization efforts have enormously suppressed domestic demand and have distracting the government from developing key services enjoyed by other developed nations. This suppressed domestic demand has also distorted China's economy, as reflected by the undersized service sector, and has lowered the quality of life for Chinese citizens.

Chinese financial repression and market socialism

In its losing battle with inflation, China has adopted stifling policy measures to suppress domestic demand and keep prices down:

(these are only a few of the anti-inflation measures China has adopted)

A) Strict price controls. (ie: Large wholesalers must seek central government approval if they want to raise prices by 6 percent within the space of 10 days or by 10 percent within a month.)
B) Credit ceilings. (limits on how much commercial banks can lend)
C) Floors on lending rates and ceilings on deposit rates
D) Strict rules governing lending decisions
E) Tight land purchase and lending requirements
F) Direct government intervention to limited expansion in certain industries (ie: aluminum, steel, autos and textiles sectors in 2004)
G) Penalty taxes on anyone buying and selling real estate in a short period of time.
H) Forcing local government to cut back spending by delaying approval of their investment projects
I) High sales taxes.
J) Etc...

Suppressed domestic demand has distorted China's economy

The distortions caused by sterilization operations and stifling policy measures are best seen when comparing China's and the US's economy:

A) US home buyers get tax incentives VS Chinese home buyers get tax penalties
B) US gets artificially low interest rates VS China's artificially high interest rates
C) US's "service economy" VS China's "service-less economy"
D) Etc…

In the US, the overvalued dollar and easy credit environment have caused the service sector to become oversized, artificially raising America's standard of living. In contrast, China's suppressed domestic demand has led its service sector to become undersized, artificially decreasing its standard of living.

Focus on inflation has lead to a lack of key government services

With Chinese authorities sidetracked by their export oriented focus and battle with overheating, the development of key government services enjoyed by other developed nations has been neglected. As a result, Chinese citizens' lack of social security, free education, and available consumer credit, which has forced them to save far more than their Western counterparts, leaving them with less disposable income.

Deflation would be a godsend to China

Chinese authorities must be thrilled about the prospect of fighting deflation instead of inflation. Fighting deflation would allow China to:

A) Scale back its increasingly costly sterilization efforts.
B) Lower interest rates.
C) Get rid of all the controls which are distorting domestic property markets.
D) Promote consumer spending without worrying about the inflationary impact.
E) Develop a comprehensive social security net.
F) Increase funding of public education.
E) Accelerate the development of a system to rate people's credit.
F) Encourage growth in underdeveloped domestic sectors (housing, health care, education, entertainment, etc)
G) Etc…

Most of the steps above are already being taken by Chinese authorities. Unfortunately, there are no free lunches. The possibility that China can maintain a highly inflationary currency peg, reverse years of anti-inflation policies, release a flood of sterilized yuan back into circulation, and go on a Western-style stimulus/bailout binge without experiencing double digit inflation is zero.

5) No deleveraging

There is no chance of real deflation happening in China. None. The Strength of China's Banking System makes it impossible.

A) Apart from Bank of China, Chinese banks have little exposure to overseas debt. So, although toxic US securities were sold to banks around the world, China's capital controls protected its banking system from America's bad debt

B) As a side effect of the country's sterilization operations, 26.5 percent of Chinese commercial banks' deposits were placed with the central bank last year (reserve requirements and forced underwriting of PBOC bills).

C) Unlike Western banks, who have been enjoying a credit bonanza for decades, Chinese banks have only recently gotten into the credit game, after years of being ridiculed for being overly cash-centric. Because of this late entry, Chinese banks completely missed the subprime party.

D) China is also in the enviable position of being one of the few countries which doesn't need to deleverage. While Western banks were going insane with high leverage and off-balance sheet financial vehicles, Chinese banks were doing the opposite.

E) China has been waging a war against NPLs (non-performing loans) in the last few years. For example, with heavy penalties having been imposed on bank managers responsible for new NPLs, Chinese banks have become much more concerned about the loan safety than profitability. This battle again NPLs has paid off. As of September 30, 2008, nonperforming loans totaled only 2 percent for Chinese banks, compared to the 2.3 percent for FDIC-insured banks in the US. Loan loss provisions have also improved substantially, with provisions of Chinese banks amounting to an impressive 123 percent of their NPLs.

F) Finally, China's money supply itself is underleveraged when compared to the rest of the world. For example, the US's M2 to M1 ratio is 65% higher than China's. The Chinese M2 to GDP ratio is also more 160 percent, perhaps, the highest in the world.

When considering the strength of Chinese Banks and underlying strength of China's economy, no debt deflation is possible.

If there is no chance of deflation, then why is China's cpi slowing down?

There are three main reasons for the slowdown in China's cpi:

A) The bursting of the commodity bubble. Because of speculator dominated futures markets in the US, commodity prices were boosted to artificial level going into the summer of 2008. As these inflated commodity prices fell back down to Earth, they caused a temporary worldwide slowdown in inflation.

B) In the second half of the year, deleveraging and hedge fund redemption caused the outflow of a large amount of hot money from China. This outflow temporary depressed asset prices.

C) The unwinding of the commodity bubble spread deflation fears worldwide and caused the velocity of money to drop.

6) Deflation fears are paralyzing China's money supply

"deflation fears" have slowed the Chinese money supply to a crawl. While they are still spending, Chinese consumers are delaying big purchases and downshifting to discount stores. Businesses are strapped for cash, and scared Chinese banks are dumping riskier borrowers, like credit-card holders. China is experiencing one of the brief deflationary periods which typically precede hyperinflation.

Deflation fears in China also provide the perfect example of how a slowdown in the "velocity of money" and makes prices fall. Right now, Chinese banks are hoarding cash and delaying payments on personal credit cards. Only a year ago, most banks paid credit-card transactions in 14 days, but now merchants are having to have to wait 20, 40 or even 90 days to get paid. With lenders making credit-card transactions as unattractive as possible, many merchants are refusing to take credit cards from Chinese consumers. Think about that for a second, all that purchasing power from Chinese credit cards wiped out due to nothing but fear itself.

The important point to note about the price deflation caused by the deflation fears is that it will reverse sharply once inflation picks up. Banks will begin paying credit cards normally, and merchants will start accepting them again. The enormous amount of purchasing power which disappeared will reappear just as suddenly, causing a wild jump in inflation.

7) Sterilization operations have become a loss generating ventures

Until last year, China's sterilization operations had been profitable, since the rate of interest that Beijing earned on foreign exchange reserves (mainly US Treasuries) had been higher than the rates it was paying on its yuan-denominated sterilization bills at home. However, now that the fed has lowered US interest rates to zero for the foreseeable future, China's dollar peg has become a loss-making policy. When inflation hits china and interest rates rise again, China's losses from its currency sterilization will become staggering.

8) China likely to attract a flood of hot money in 2009

China has had a problem with hot money inflows in the past, and those problems are likely to get worse this year. Hot money refers to the money that flows regularly between financial markets in search for the highest short term interest rates possible. This hot money has found ways around China's capital controls and flows freely in and out of China to the authorities great frustration.

When hot money flows into china, it forces the PBOC to print money the same way as the trade surplus does. At the beginning of last year, these hot money inflows were one of China's biggest problems, bringing inflation up to 8.6 despite the authorities best efforts. The country's hot money problem ended temporarily with the bursting of the commodity bubble.

In the second half of last year, deflation fears and hedge fund deleveraging cause much of this hot money to leave China and seek the "safety" of US treasuries. This small exodus is what is responsible for the brief fall in China's foreign reserves. However, the outflow of hot money from China has ended, and it now looks set to reverse.

In the next month or so, rising inflation will start pushing up Chinese interest rates at a time when central banks around the world have set their rates at or near zero. Since the entire world knows that the yuan is undervalued, these higher rates will make China the most attractive destination on Earth for those seeking safe high yielding interest rates, and the hot money problem will return with a vengeance.

9) Chinese authorities are pulling out all the stops

Chinese authorities are pulling out all the stops to get the country back on track. In order to prop up economic growth, Chinese authorities have:

A) Raised tax rebates for exporters of everything from high-tech and electronic products (motorcycles, sewing machines and robots, etc) to some rubber and wood products.
B) scraped export taxes for some steel products, aluminum, rice, wheat, flour and fertilizers
C) Cut the lock-up period beyond which people can resell their property without paying a business tax from five years to two years.
D) scraped the urban property tax for foreign firms and individuals
E) Allowed people to buy second homes on the same preferential terms normally reserved for first time buyers.
F) Announced plan to spend 900 billion yuan over three years to build affordable housing
G) Cut the deed tax payable by first-time buyers of homes smaller than 90 sq m is to 1 percent.
H) Announced measures such as cash subsidies and tax cuts to encourage home purchases
I) Announced plans for a 4 trillion yuan (586 billion) stimulus package to boost domestic demand through 2010.
J) Announced plans to invest 5 trillion yuan roads, waterways and ports in the next three to five years (over 2 trillion yuan more than originally planned).
K) Approved 2 trillion yuan for railway investment
M) Announced a tax break for public infrastructure projects.
N) Abolished the 5 percent withholding tax on interest income.
O) Scraped the 0.1 percent tax on purchases of equities.
P) Instructed Central Huijin (a government investment arm) to buy shares of listed Chinese firms.
Q) Encouraged state-owned firms to buy back shares.
R) Raised minimum grain purchase prices by 15 percent
S) Approved landmark reforms that give peasants the right to lease or transfer their land-use rights
T) Issued a stimulus package for its auto sector, including a tax cut
U) Set a price floor for air tickets
V) Handed out cash gifts to brighten their mood before the Chinese New Year
W) Etc...

10) Banks are flooding the economy with new loans

Chinese authorities are pushing banks to extend credit and help fight "deflation". To encourage this money supply growth and new lending, the PBOC (the People's Bank Of China) has halted sterilization operations and has cut the benchmark one-year lending rate by 2.16 percent and the deposit rate by 1.89 percent. Also, as part of these efforts, Chinese officials are reversing decades of financial repression and freeing up their banking system.

As China lifts restrictions on lending, banks are flooding the economy with new loans. Credit ceilings under which commercial banks have been operating have now been removed, and credit controls have been relaxed to give banks more leeway in making lending decisions. Chinese lenders will now be able to restructure loans and adjust the types and maturities of debt. Banks are being pressured to use this new financial freedom to "promote and consolidate the expansion of consumer credit".

In addition to stimulating consumption, credit constraints are being relaxed to give loan access to small and medium privately owned businesses, which have until now been mostly shut out of credit by the state-owned financial system. As part of this effort and in order to help banks overcome their deflation fears, China has said it will tolerate more bad debt. This step is particularly significant, as the heavy penalties imposed for the creation of new non-performing loans has been a big restraint on credit expansion.

Finally, the commitment of Chinese authorities to fight deflation is so great that regulators have stated they will support the sale and securitization of loans. I repeat, China is moving towards securitization of loans! The adoption of securitization holds the potential to enormously accelerate money supply growth.

Conclusion

I view hyperinflation in China as absolutely guaranteed. Zero doubt. China is dismantling all the measures it has put in place over the years to fight inflation. It is dropping restrictions on purchasing property, eliminating price controls, getting rid of loan quotas, lowering interest rates, ceasing its sterilization efforts, etc… It is also pulling out all the stops to boost government spending and new loan creation.

Meanwhile, China's 40 billion dollar trade surplus means that its base money supply looks set to double in 2009. There is also the fact that China's money supply is frozen due to cash hoarding and will cause inflation to increase when it accelerates. Finally, the commodity bubble has finished bursting, and China's economy looks set to shrink.

Every economic factor in China suggests an enormous wave of hyperinflation will begin early this year. While I have written about the threats facing the dollar, this will be the event that finally ends the US's borrowing binge and destroys our currency.

Hyperinflation in China will be a monumental event

Because China makes most of the world cheap consumer goods, it will export its hyperinflation around the world. This means that no fiat/paper currencies will survive this with its purchasing power intact. Some will lose all value (dollar) while others will survive while experiencing a loss of purchasing power (yuan, euro, yen, etc...). The only money that will retain its full value in the face of Chinese hyperinflation is gold.

China will sink the dollar to save the yuan

Once hyperinflation kicks into gear, Chinese authorities will find it impossible to bring it under control without sacrificing the dollar. Since hyperinflation would hurt Chinese exporters as much as losing their US exports, China will face a clear cut decision. By dumping the dollar peg and selling its USD holdings, China will help contain domestic inflation in many ways:

1) China will no longer be printing massive quantities of yuan to support the dollar.
2) By selling dollars in exchange for yuan, China will be able to take those yuan out of circulation, shrinking its monetary base.
3) Since the yuan will strengthen enormously again foreign currencies, Chinese exports will fall and that means there will be a lot more goods available for domestic consumption.
4) Since the yuan will be stronger against foreign currencies like the dollar, Chinese imports will rise. That means cheaper commodity prices across the board.
5) Dropping the dollar peg will make the yuan a major reserve currency. That means lower interests rates in China as foreign central banks build up yuan reserves.

Those expecting deflation are in for a surprise

Western nations who are lowering interest rate very sharply, without fearing inflation, are mainly concentrating on the domestic dynamics of their economies and the value of their currency. My bet is that no one is even considering the possibility that inflation could be imported from China, and, when cheap Chinese imports stop being cheap anymore, it will catch everybody completely by surprise.

source: http://www.gold-eagle.com/editorials_08/decarbonnel012009.html
Alba sul Parco il giorno di uscita, by Londradical, January 2009

Nel post precedente avevamo lasciato Londradical ad aspettarmi alle 7 al binario 7 per continuare a raccontarmi la sua esperienza di ricovero per dipendenze nella Clinica del Parco: come ne sei uscito, mio tesoroncio?

Con un quintalata di farmaci che causano, in ordine alfabetico: affaticamento; aggressività; allucinazioni; alterazione della libido e della sfera intellettiva; agitazione; amnesia anterograda; annebbiamento della vista; anoressia; ansia pronunciata; atassia; attacchi di panico; aumento della pressione intraoculare; cadute e capogiri; cefalea; collera; debolezza muscolare; delirio; depressione; dermatiti; diarrea; difficoltà di concentrazione e di linguaggio; diminuzione del desiderio sessuale...

Questo non mi piace.

Sapessi a me. Proseguiamo: diplopia; discrasie ematiche; dispnea; distonia; disturbi della coordinazione, della memoria e del sistema immunitario; dolori addominali; eccitazione; enzimi epatici elevati; ginocchio della lavandaia e gomito del tennista...

Cooosa???

No, questi due no, era solo per vedere se ascoltavi con attenzione. Proseguiamo: incontinenza; incubi; inquietudine; insonnia; iperattività; iperidrosi; ipertensione e ipotensione...

Sempre per vedere se ascolto attentamente?

No, davvero: uno causa ipotensione e un altro ipertensione, tanto per andare sul sicuro. Proseguiamo: irregolarità mestruali...

Sì, a me nell'ascoltarti. Vai avanti.

...irrequietezza...

Che differenza c'è con l'inquietudine?

Uno causa inquietudine e un altro irrequietezza, tanto per stare tranquilli. Proseguiamo: irritabilità; itterizia; nausea; nervosismo; neuropatie periferiche e del nervo ottico; orticaria; palpitazioni; prurito; psicosi; reazioni cutanee; retrogusto metallico o agliaceo ed alito cattivo; riduzione delle risposte emotive e della vigilanza; ritenzione urinaria...

Ma non c'era l'incontinenza?

Uno causa incontinenza e un altro ritenzione, tanto per non sbagliare. Proseguiamo: senso di testa vuota...

...Vabbè, questo non lo possiamo imputare ai farmaci...

Grazie tante, proseguiamo: sintomi gastrointestinali, sonnolenza...

Ma non causavano insonnia?

Uno causa insonnia e un'altro sonnolenza...

Tanto per non sbagliare, ho capito, continua.

Stanchezza...

Ma non c'era già l'affaticamento?

... uno causa stanchezza e un altro affaticamento, è per questo che il mattino dormo e il pomeriggio riposo. Proseguiamo: stati confusionali; tachicardia; tossicità epatica; tremori; variazioni ponderali; vertigini e vomito copioso. Tutto qui.

Ma allora non faceva meno male continuare a bere?

Sarebbe rimasto il problema dell'alito cattivo.

Ma per quello basta una pesca. Eccola qui, mordi.

Una pesca?!?

Sono buonissimi i baci al sapore di pesca. Smack!
Tramonto sul Parco il giorno di ingresso, by Londradical, December 2008

Finalmente è arrivato il momento che tutti aspettavamo, il giorno in cui questo blog raggiunge vette di profondità inarrivabile e fondali di altezza inenarrabile, se a narrarceli non fosse quel genio della letteratura che è il mio amato Londradical, oggi dimesso dalla Clinica del Parco dopo oltre un mese di disintossicazione dalle sue numerose dipendenze, e pronto a raccontarci la sua esperienza, per cui gli cedo la tastiera a beneficio della di noi tutti insalubrità mentale.

Mia adorabile Miss Welby, hai ben ragione a dire che mi sono disintossicato dalle dipendenze, tranne quella dalla tua umida e profumata fritolina di peluche nella quale posso finalmente re-immergere il naso...

Amatissimo Londradical, sii più serio in questo resoconto della tua esperienza a beneficio della di noi tutti insalubrità mentale.

Mia umida e profumata Miss Welby, sono entrato nella Clinica del Parco con lo stato d'animo del mio dipinto qui sopra (Tramonto sul Parco il giorno d'ingresso) e ne esco con l'umore dipinto nel prossimo post (Alba sul Parco il giorno di uscita), lasciandovi ansie e portando via farmaci più una inquietante relazione psicologica dello psichiatra, di cui non posso fare il nome che fa rima con -ano, né il cognome che fa rima con -fica. Cominciamo da quest'ultima, piuttosto pelosa...

No, basta per favore...

Intendevo la relazione psicologica, che ti riporto in sintesi con traduzione in parentesi quadre per i non adepti ai lavori: "Il pz [=paziente] dimostra difficoltà nell'interagire a causa di una rigida selettività radicale che gli impedisce di aprirsi in modo autentico [=come quando Pannella parla per ore e non si capisce di cosa]. Le problematiche principali emerse fanno riferimento ad una dipendenza da cannabinoidi a cui successivamente si è aggiunta una dipendenza alcolica [=non si è fatto mancare quasi niente]. Entrambe le dipendenze si sono consolidate come espressione di un piacere alternativo [=non fuma e beve per traumi o dispiaceri ma perché je piace la goduria] e parallelo che garantisse, di fatto, un mondo diverso dalla quotidianità comunemente condivisa, quotidianità che il pz, pur essendo in grado di relazionarsi, non riesce a percepire in modo realistico e concreto [=il pz è fuori di testa]. Il pz durante il ricovero è stato sottoposto ad approfondimenti diagnostici attraverso l'uso di test psicologici: ASI, AUDIT, SCL-90, SCID e SCID I [=c'ha fregato alla grande con le macchie di Rorschach trovandole sul web e facendole pubblicare sul blog di una sua amica immaginaria]..."

Ma questa sono io! Non sono affatto immaginaria: guarda qui che fritolina umida e profumata...

Sì, la vedo, te l'inspiro e m'ispira, ma torniamo al Dr Ficano: "Durante questi colloqui è emersa con evidenza una strutturazione della personalità con difese rigide volte a preservare l'immagine di sé e difficoltà ad uscire dai propri schemi [=il pz ha la testa più dura del cazzo e nun me riesce de spersonalizzàllo], l'uscire dai quali comporta un senso di disagio e irritazione che il pz tende a compensare con un ritiro dal contatto umano attraverso l'uso del computer [=sta sempre attaccato ar laptoppe sur blogghe d'una sua amica immaginaria]..."

Ma questa sono sempre io! Altro che immaginaria: guarda qui che fritolina morbida come un peluche...

Sì, l'annuso e sbaciccio, ma torniamo al Dr Anofica: "Nel corso degli incontri il pz ha manifestato una motivazione al cambiamento che risente notevolmente delle proprie convinzioni radicali secondo le quali è possibile controllare l'assunzione di cannabinoidi a cui il pz non intende rinunciare [=er pz vole smette de'bbeve ma nun de fumasse 'e canne]. In conclusione si consiglia il proseguimento della terapia con un approccio psicoterapico individuale per poter elaborare le proprie convinzioni attraverso la relazione con una figura professionale riconosciuta come autorità competente con cui è accettato il confronto [=si faccia curare da una bella fica, possibilmente non immaginaria, 'che io nun lo reggo cchiù]"

Ma questa sono ancora io! guarda qui che bella fica...

... Sì, te la strizzo e supersucchio, ma veniamo alla diagnosi: un tuo secondo parere, possibilmente in italiano...

Volentieri: il pz è erroneamente convinto di essere un paranoico maniaco-depressivo per gli sbalzi d'umore tra la sofferenza per il disagio esistenziale e i momenti di gioia per la mia bellissima fritolina, mentre si tratta semplicemente di un disturbo della personalità classificabile nel cluster B narcisistico [=gli altri due cluster B sono l'antisociale e il borderline, ma tutt'e tre insieme ce li ha solo Pannella]. Il pz tende all'onanismo incestuoso [=vede in me la sua sorellina di vent'anni più giovane] e nei tratti personologici presenta un dualismo di matrice reichiana accompagnato da una pulsione autodistruttiva, hegeliano-taoista sul piano filosofico. In conclusione non si ravvisano elementi psicopatologici tali da comportare un qualsivoglia approccio farmacologico [=ti amo per come sei, ci vediamo stasera alle 7 al binario 7, il fumo lo porto io]
Brown's fury at Royal Bank of Scotland's £2.5bn loan to Russian oligarch
By Simon Walters and Glen Olwen, Daily Mail, 18th January 2009

Former Royal Bank of Scotland boss Sir Fred Goodwin, branded ‘the world’s worst banker’, was blamed last night for forcing taxpayers to write off a £2.5billion loan to a Russian oligarch.

The money was lent by the bank, which is now controlled by the Government, to Leonid Blavatnik, 51, a London-based billionaire who owns chemical giant LyondellBasell, which is on the verge of collapse.

Treasury officials examining RBS’s books were horrified to learn that they included the sum to Mr Blavatnik, which has now been written off.

A senior official said the loan was more evidence that the recklessness of banks was a major factor in the credit crunch.

JOHN REDWOOD: The problem is our banks are bigger than we are Taxpayers poised to take on 'toxic' debts as Government throws another £200bn lifeline to High Street banks

The bank of the British taxpayer: RBS on verge of nationalisation

‘These bankers doled out ridiculously large sums to foreign investors to finance deals which had nothing to do with Britain,’ said the official.

‘It is only now that we are going through the banks’ accounts that we can see the true scale of their irresponsibility. Some of it is every bit as crazy as the American sub-prime loans scandal.’

The money was lent to Mr Blavatnik by Dutch bank ABN Amro, which was later taken over by RBS when Sir Fred was chief executive.

He was forced to quit in October after claims that his reckless expansion strategy was responsible for bringing RBS to its knees.

He was initially dubbed ‘Fred the Shred’ by City financiers because of his reputation for arrogance and ruthless savings.

But he was called ‘the world’s worst banker’ when the credit crunch started to bite.
RBS found it was hopelessly over-extended and forced to look to the Government for a bailout.

When Sir Fred resigned on October 13, RBS shares stood at 65p – down from 442p when he became chief executive officer.

He quadrupled the bank’s assets during his seven years in charge with purchases such as NatWest and ABN Amro – but was later accused of paying far too much for some of his deals.

He was awarded a knighthood in 2004 and rewarded with an £8million cash and shares bonus pot in 2006.
Mr Blavatnik is a Russian-born Jew who emigrated to America with his family in 1978.
He now splits his time between New York and his £41million home in Kensington, West London.

Earlier this month, it was announced that one of his companies, LyondellBasell, was teetering on the edge of bankruptcy, with £18billion debts.

The collapse in demand for chemicals over the past three months has left the company struggling to service loans from banks like Merrill Lynch, Goldman Sachs, ABN Amro and UBS.

The most recent rich list – compiled early last year, before the worst effects of the economic slump – rated Mr Blavatnik Britain’s 11th richest person, with a £3.9billion fortune.
Like his fellow oligarchs, he made his money in the free-for-all of post-communist Russia.

Access Industries, the US-based group he formed in 1986, holds large debt-fuelled investments in oil, coal, chemicals, telecommunications and real estate.

In 2003, he sold a 50 per cent stake in Russian oil company TNK to British Petroleum and is on the board of directors of the resulting company, TNK-BP.

Mr Blavatnik’s spokesman refused to comment on the £2.5billion RBS loan.
He said: ‘LyondellBasell is working with its lenders, including RBS, to improve the company’s liquidity and financial position. Access, as LyondellBasell’s owner, believes the restructuring will allow the company to reposition itself for long-term success.’

source: http://www.dailymail.co.uk/news/article-1120772/Browns-fury-Royal-Bank-Scotlands-2-5bn-loan-Russian-oligarch.html#
Gli uomini ricchi danno più orgasmi alle donne?

Gli scienziati hanno trovato che il piacere che le donne ottengono dal trombare è direttamente collegato all'entità del conto bancario dei loro partner. Hanno trovato che più ricco è un uomo, più frequentemente la sua partner gode orgasmi. "La frequenza di orgasmo delle donne aumenta con il reddito del loro partner" ha detto il Dr Thomas Pollet, lo psicologo dell'università di Newcastle dietro la ricerca. Egli è convinto che il fenomeno sia "un adattamento evolutivo" ben radicato nelle donne, che le conduce a selezionare gli uomini prescelti in base alla loro qualità percepita. Lo studio è destinato a provarsi controverso, suggerendo che le donne siano programmate a zappare l'oro. Tuttavia lo studio si inserisce in un volume più largo di ricerca conosciuto come psicologia evolutiva che suggerisce che sia gli uomini che le donne siano geneticamente predisposti per sfruttarsi crudelmente per realizzare le migliori possibilità di sopravvivenza dei loro geni.

AGGIORNAMENTO: vedo che questa stupidaggine pubblicata sul Times è ripresa anche dal Corriere