Free counter and web stats


..There's a little Samuel Pepys in all of us..

Monday, August 08, 2011

Thoughts to close the day.. and what tomorrow might bring..
The situation in London serious.. this makes three days of riots in the City.. The violence is skipping through the Borough, with cars set alight in Lewisham.. and a bus and shop were set ablaze in Peckham.. A large furniture shop in Croydon is also burning fiercely..
In Hackney, police sealed off an area after police car windows were smashed..
The Prime Minister has cut short his holiday.. and is due to land this evening.. He'll be having immediate talks with Home Secretary Theresa May and Acting Metropolitan Police Commissioner Tim Godwin..
We've mentioned the spark which ignited this inferno earlier.. But it must be noted that this is no longer a protest for a Police bungling the treatment of the man they shot last Friday.. This is an expression of fear and despair..
Those who vandalize.. those who attack police lines.. those who toss bricks at policemen.. are there for two reasons..
One, which should be addressed by the government regardless of the cost as quickly as possible.. is because they're utterly fed up with their representatives in Government..
They're fed up with promises of 'outreach programs'.. as Community Centers close in their scores..
They're fed up with an educational system which prepares them for nothing..
They're fed up to the point that the typical British 'stiff upper lip' is risible..
And two.. of course there is that element bent soley on chaos and anarchy.. those who's prime objective is the diversion a riot affords for theft.. As of late this afternoon and early this evening.. Police have been deployed in force in Hackney.. Peckham.. and Lewisham..
And this sentiment is not confined to the City.. there were fears trouble may spread further afield.. as police in riot gear were deployed in Birmingham City Centre after scores of youths rampaged through the shopping area, smashing windows..
London Mayor Boris Johnson has cancelled his holidays.. as mentioned earlier, Home Secretary Theresa May returned, and is holding talks with senior officers at the Met..

An update on the markets..
A terrible day in New York.. as the Dow dropped 600 points in selloffs through the session.. its biggest point loss in a single day since December, 1 2008.. Obama spoke this afternoon.. saying the United States knew well before the S&P downgrade that it had a debt problem..
He said "The U.S. will always be a triple-A country despite what rating agencies say," .. Brave talk from a man who's floundering.. reminiscent of Pierre Trueau's comment when asked by a repoerter what he thought of his drop in the polls.. Trudeau turned, and answered "Polls are for dogs.."
The good news, according to the President, is the debt is a "solvable" problem that can be addressed through tax reform and spending cuts..
But not the one he recently signed into Law..
Investors don't seem to agree. The Dow plunged another 100 points to hover around 500 after the president's speech..
As stocks reeled, gold surged today by $68 to a record $1,720/troy ounce..

Global markets are reflecting international sentiments on the state of the American and European 'recoveries'..
When trading started this new week in the Far East.. Japan's Nikkei and Hong Kong's Hang Seng indexes lost 2.2%... while South Korea's Kospi dropped 3.8%..
Last week saw trillions of dollars wiped from the value of global markets, with the Dax losing about 13% of its value, the FTSE 100 dropping almost 10% and the Dow ending the week 5.8% lower.. This morning in London and Paris the FTSE 100 and Cac 40 indexes lost more than 2%, while Frankfurt's Dax was down almost 3%.. The Dow Jones was down 1.6% in early trading..
Yesterday, the European Central Bank announced it would be buying up Italian and Spanish bonds, in an effort to shore up those flagging economies and lower the yield rates.. and indeed Yields on Spanish and Italian bonds fell sharply after the bank's move..
The yield on Spanish 10-year bonds.. an indication of the risk associated with lending Spain money.. fell from more than 6% to about 5.2%.. Yields on Italian bonds fell by a similar amount..
However, investors seem underwhelmed by this move from the ECB.. Confidence in this 'recovery' is fading fast, and it would appear the smart money's being put into commodities, much to the dismay of industrialists..
Essentially, bonds are essentially IOUs issued by governments or companies, to raise cash.. Governments issue new bonds to help pay maturing bonds.. which is why it is so important that investors continue to buy them.. If demand falls off.. governments are unable to pay their outstanding debts..
This may seem to any normal person, to be an exceedingly tenuous manner in which to run a country's economy.. being dependant on future sales to pay the interest on that bought in the past.. But it's this system which has allowed the US, and Eurozone countries, to amass trillions of dollars in debt..
The figures themselves.. the likes of $14.2 trillion.. are incomprehensible not only to the man on the street, but to traders, industrialists.. and Finance Ministers alike.. It's all 'electronic money'.. never seen.. rarely backed by tangible assets..
What a way to run a 'global economy'..
This intervention by the ECB is seen as a short-term measure to help calm stock markets.. but what investors want to see most of all is highly-indebted countries reducing their levels of debt, by spending less and raising more in revenues..
And in this economic climate and social condition.. that is impossible..
Other debt crises over the past three decades have typically involved smaller countries.. including Canada in the early-to-mid-1990s.. that were able to lean on the larger economies of the world to drive growth while they took steps to clean up their own books..
But unlike earlier predicaments, this one is not borne of a normal, cyclical recession, where the economy expands and then contracts when supply exceeds demand and business inventories get too high..
Rather, the U.S. and Europe.. still by far the world’s two most important economic blocs.. are mired in a so-called balance-sheet recession, where the combination of too much debt and too little confidence suppresses demand for a long period of time. These kinds of recessions are much harder to pull out of, as Japan has discovered since its real-estate crash two decades ago..
Finance Minister Jim Flaherty says the recent stock market turmoil may cause some turbulence for the Canadian economy..
But Flaherty says Canada is well-positioned to withstand the “global headwinds.”..
He says Canada is “not an island” and may eventually be affected by the uncertainty about U.S. growth and Europe's continuing debt problems..
But Flaherty notes that Canada's budgetary position is among the strongest in the world and its financial systems remain strong..
Mind you.. Canada has, to a large extent, a 'work ethic'.. and it's education policies lead students into subjects they have a talent for..
It's a country which should get more attention than it does.. but perhaps it is to Canadians advantage.. to be nothing more than a substantial shadow in this global Panto..
Lets them get on with dealing with their own problems..

For three nights running, there have been crowds rioting in the streets of London's poorer boroughs.. They've started early this afternoon, with Hackney High Street in north London seeing running confrontations between the police and crowds of youths.. Since Saturday night, more than 215 people have been arrested in Tottenham, with some 30 facing charges related to the Riot Act and looting..
Just to remind us of what began this civil disobedience.. a Tottenham man, Mark Duggan, was shot and killed by police when he was stopped to answer for weapons charges.. The family and all the uncles and aunts appeared at the main police station asking questions concerning this killing.. When this began, it was a peaceful request for information.. but the police did not appear to talk to the original group.. and this was the spark that ignited a plethora of issues, leading to this violence..
As mentioned, these riots are taking place in the poorest sections of the City.. Unemployment is rife.. education levels are low.. and the prospects for many in those affected boroughs are realistically nil..
It is to be noted, that the population of the areas destroyed, is mainly black.. They feel, perhaps with some justification, that they are not being protected by the police, but are rather targets for police abuse of powers..
We'll see if this escalates again this evening, but realistically, while the underlying problems remain, so will those disenchanted continue to vent their frustrations..
And unfortunately, in this economic situation.. there is little the government can afford to do to relieve the basic causes of this unrest..

No comments:

Search This Blog

Blog Archive