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

Tuesday, September 06, 2011

A brief note to start the day..
Europe’s austerity initiatives are beginning to show signs of backfiring, even as governments prepare to tighten their belts further..
Waning growth in two key sectors of the European economy.. another poor election showing by German Chancellor Angela Merkel’s pro-bailout party and plunging bank shares heightened fears that a new recession cannot be avoided.. Those fears gained momentum when Christine Lagarde, the new head of the IMF, warned that the global economy is on the brink of a fresh crisis..
Efforts to rein in spending are hurting growth just when it is needed most to shake off the debt crisis, boost employment and restore consumer and business confidence.. High growth rates allowed Canada to overcome its 1990s debt crisis relatively quickly.. In contrast, European deficit-busting efforts are coming when growth is low to non-existent, implying there will be no quick fix to the debt problems..
“We see that there has been, particularly over the summer, a clear crisis of confidence that has seriously aggravated the situation,” Largarde, France’s former Finance Minister, said in an interview published Sunday in the German newsmagazine Der Spiegel.. “Measures need to be taken to ensure that this vicious circle is broken.”..

Our Justice Secretary, Ken Clarke, has laid the blame for last months riots on a 'broken penal system'.. Apparently three quarters of those either convicted of riot related offences, or are awaiting trial, have existing criminal records, some of those for 'serious crimes'..
He said the "hardcore" of those involved were known criminals whose behaviour had not been changed by previous punishments..
Clarke lays the blame for such recidivism on the penal system, saying there was not nearly enough emphasis put on rehabilitation..
Clarke argued that this made his efforts to reform the penal system and cut reoffending even more important..
The government is piloting payment-by-results schemes for private firms who successfully rehabilitate offenders.. an incentive program, so to speak..
Clarke has argued that fewer criminals should be sent to prison, suggesting that tough community punishments would be more effective at reducing reoffending..
And this is a stance that we have taken for years.. that those convicted of minor infractions who are given custodial sentences are merely being enrolled in a 'school for scoundrels'..

With Colonel Muammar Gaddafi all but gone, Libya's prospects can be summed up in one word.. oil..
Far different from the revolutions in Tunisia or Egypt, or the rebellions in Yemen, Bahrain or Syria, the possibilities of Libya's new leaders either forging a new democracy or being forced to fight a lingering insurgency could depend heavily on how they kick-start the oil sector, which accounts for about 95% of Libya's earnings and which will finance virtually every penny of Libyans' public services..
How easily the oil industry can piece itself together is unclear, however. Listening to Ali Tarhouni, the Oil and Finance Minister for the rebels' National Transitional Council, it sounds simple enough.. That the six-month war appeared to have damaged only "about 10%" of the oil infrastructure, and also said he was astonished to discover that Gaddafi's forces had not blown up or burnt key facilities.. the likes of the oil refinery in Zawiyah, 30 miles west of Tripoli.. as they faced a devastating defeat.. Libya's oil production has plummeted since the revolt erupted in February to an all-time low last month of about 60,000 barrels a day.. That's a trickle compared to the production of 1.6 million barrels a day last January.. Tarhouni claims that gas pipelines will reopen almost immediately.. which is good news for Italians, who import 25% of their gas from Libya, and that his country could pump about 500,000 barrels of oil a day within four months and return to prewar levels within a year..
With the NTC overwhelmed with securing the country, defeating the last Gaddafi holdouts and hunting down the colonel himself, Tarhouni's team could delay renegotiating oil contracts for years..
Take Iraq, for example.. there, the government waited six years after Saddam Hussein's regime collapsed in 2003 before signing its first new oil contract.. The Libyan council has said it will honor the current contracts signed with big oil companies, including deals with BP, ConocoPhillips, Marathon Oil and many others.. But they also insist Libya's oil industry will work very differently once a new government is in place, and that they could open up bids to new players like China and Malaysia..

Asian stocks fell but Europe regained its balance this morning after several tumultuous sessions of trading sparked by the bleak U.S. jobs picture.. Swiss shares soared after the country's central bank moved to control the strong franc..
Oil slid below $84/barrel amid expectations that continued weakness in developed economies will crimp demand for crude.. The greenback gained against the Euro but was lower against the Yen..
European shares headed higher in early trading after a steep sell-off..
Worrisome American employment figures and the possible spread of Europe's sovereign debt crisis from small economies like Greece to major ones like Italy are stoking investor fears.. Greece, Ireland and Portugal have already needed to be rescued with loans from the IMF and Europe, but Italy is regarded as too large to bail out..
Gold shares were among the gainers this morning.. as prices for the precious metal hovered near record highs.. Hong Kong-listed Zijin Mining Group, China's largest gold miner, rose 2.3%.. Newcrest Mining Ltd., Australia's No.1 gold miner, rose 0.9%..

We'll see what develops as the day goes on..

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