Soon to Come–NUCLEAR War in the Middle East?
The German mass tabloid, Bild, published two articles on its Website on July 20 and 22, discussing the possibility of a NUCLEAR WAR in the Middle East.
The first article quoted Benny Morris, author and professor at the Ben Gurion University in Israel, saying that “it is virtually certain that Israel will attack the Iranian nuclear facilities within the next four to six months.” He continued that the attack had better be successful, because if it was not, a NUCLEAR WAR IN THE MIDDLE EAST would be the likely consequence. His rationale: If Israel’s attack fails, then Iran will retaliate, forcing Israel to respond with nuclear weapons. Morris is also quoted as saying: “Israel has the choice between the Black Death and Cholera. In either case, a nuclear Holocaust looms over the Middle East.”
The second article quoted U.S. Major-General Henry Obering as saying that Iran possesses missiles which could reach a very large part of Europe, including Great Britain. Although not expressly stated in the article, the implication was given, of course, that Iran might strike Europe with missiles if it was attacked by European ally Israel.
In addition, Reuters reported on July 29:
“The United States will soon link Israel up to two advanced missile detection systems as a precaution against any future attack by a nuclear-armed Iran, Israeli Defence Minister Ehud Barak said on Tuesday… Barak declined to give details on whether Israel, which is believed to have the Middle East’s only nuclear arsenal, would be prepared to take on Iran alone. Iran denies seeking atomic weapons and has vowed to retaliate for any attack… Israeli and U.S. officials this month voiced differing assessments on when Iran might acquire advanced S-300 anti-aircraft systems from Russia. The S-300s would complicate any pre-emptive air strikes on Iran’s nuclear sites… Israeli Defence officials, speaking to Reuters on condition of anonymity, predicted first delivery of the systems as early as September.”
ABC reported on July 30:
“Sen. Barack Obama, D-Illinois, met with House Democrats yesterday [and] told the caucus, according to an attendee, ‘Nobody said this to me directly but I get the feeling from my talks [in the Middle East] that if the sanctions don’t work Israel is going to strike Iran.’ Others in the room recall this as well.
“The notion that Israel is preparing for such an action against Iran’s myriad nuclear facilities is not new, with conjecture heating up in May after an Israeli military exercise featuring 150 aircraft flying almost a thousand miles over the Mediterranean Sea in what was seen as a dress rehearsal for an air strike. Now that the Bush administration is engaged in diplomatic efforts with Iran, many Israeli officials are worried the US is getting soft on Iran, prompting Israeli Defense Minister Ehud Barak to travel to the US this week to meet with Defense Secretary Robert Gates, Secretary of State Condoleezza Rice, and National Security Adviser Stephen Hadley. Barak’s office released a statement saying ‘a policy that consists of keeping all options on the table must be maintained.'”
Israel’s Olmert Announces Intent to Resign
The Jerusalem Post reported on July 30:
“Prime Minister Ehud Olmert intends to hand his resignation letter to President Shimon Peres the day after the September 17 Kadima primary and ask him to entrust the new party leader with forming a new government, Olmert’s associates said Wednesday night… By law, Olmert will remain prime minister until a new government is formed. If the new Kadima leader forms a government soon after the primary, Olmert will then leave office. But if no new government is established, Olmert, despite having formally tendered his resignation, could remain prime minister until after a general election that would likely be held in spring 2009.”
Der Spiegel Online wrote on July 31:
“When Israeli Prime Minister Ehud Olmert stepped in front of the camera and spoke to the nation on Wednesday evening, it is not hard to imagine millions of his countrymen united in a deep sigh of relief. Olmert, plagued by accusations of corruption, finally did that which the country of Israel had been awaiting for months: He said he would resign…
“For months, his countrymen have followed every new piece in an ever-growing mosaic of corruption allegations. The most recent low point was reached two weeks ago when the Israeli police indicated they suspected Olmert of having double- or even triple-billed for trips abroad and pocketing the profit. Olmert also stands accused of having accepted envelopes stuffed with cash from a Jewish-American businessman to fund his luxurious lifestyle and propensity for fat cigars. Dubious real-estate deals and sketchy political appointments made before he became prime minister round out the dossier against him…
“Israelis are sure to welcome the news of Olmert’s resignation. A huge percentage of the country’s voters have been unhappy with the prime minister for months and almost 60 percent of those in his own party were in favor of his stepping down. A survey carried out on Wednesday evening found that over 77 percent of Israelis think that Olmert did a poor job as head of Israel’s government. Even worse, many Israelis fear that Olmert has inflicted lasting damage on the office of prime minister. Olmert’s zigzag policies of the past few months have had just one aim: his own political survival…
“On Wednesday night, he also pledged to prove his innocence, saying that ‘those preaching to me today will one day have to contend with the truth.’ That, though, seems unlikely given the mountains of material state prosecutors have gathered to use against him. Few in Israel believe that his name will ever be cleared. The Israelis are sorely afflicted when it comes to scandals involving politicians. The then Chief of Staff Dan Halutz sold off his Israeli share package just before the war with Lebanon in 2006, fearing a stock market dip. Olmert’s predecessor Ariel Sharon had to defend himself on several occasions against corruption allegations. One of his sons even ended up in jail.
“Once the initial relief about Olmert’s resignation fades, the debate will begin about who will succeed him… Whoever follows in Olmert’s footsteps will face a huge task. Alongside all the other problems, he or she will have to re-establish a basic level of trust among Israelis in the integrity of their politicians.”
White House Sees Record Budget Gap of $482 Billion in 2009
Reuters reported on July 28:
“The Bush administration on Monday projected the U.S. budget deficit will soar to a record of nearly half a trillion dollars in fiscal 2009 as a housing-led economic slowdown cuts into government revenues. The economic and fiscal deterioration will complicate efforts to bring the budget to balance and pose challenges for whoever takes over the White House in January, either Republican Sen. John McCain or Democratic Sen. Barack Obama…
“Reacting to the White House’s new prediction that the budget deficit will hit $482 billion in the fiscal year that starts October 1, [Senate Budget Committee Chairman Kent] Conrad said that number easily could rise by an additional $80 billion when the full costs of the Iraq war are tallied next year.”
New Bill INCREASES U.S. Debt Limit by Almost 1 Trillion Dollars
Bloomberg reported on July 30:
“President George W. Bush signed into law legislation that helps 400,000 homeowners facing foreclosure and extends a lifeline to Fannie Mae and Freddie Mac… The measure passed the Senate July 26 and the House three days earlier… [Treasury Secretary Henry Paulson] who was the lead lobbyist for the White House, persuaded Bush to back off a threatened veto over a section of the legislation that provides $3.9 billion in grants to states to buy and repair foreclosed properties. Bush said he regarded it as a bailout of lenders. Democrats said it would stabilize neighborhoods…
“Under the law, the Federal Housing Administration can now insure higher loan limits, up to $625,500 from $417,000 in high- cost areas. The law also raises the nation’s debt limit to $10.6 trillion from $9.816 trillion to accommodate the Paulson plan.”
The Associated Press added on July 31:
“The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it… Democratic leaders, recognizing that the measure could be one of the last items to become law during what’s left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt… Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.”
“Ford Posts $8.7 Billion Loss”
The Associated Press reported the following on July 24:
“Ford Motor Co. posted the worst quarterly performance in its history Thursday, losing $8.67 billion in the second quarter… Ford shares dropped 58 cents, or 9.6 percent, to $5.45 in morning trading… Ford’s capital expenditures will reach $6 billion annually between now and 2010 because of the cost of revamping plants and introducing new products and engines. Ford plans to upgrade or replace all of its engines by 2010… Cost cuts also will come from employee layoffs. Ford said 4,000 U.S. hourly workers took buyouts in the second quarter, and the company will continue offering buyouts at targeted U.S. plants. Ford also has announced plans to cut its salaried costs by Aug. 1 through voluntary and involuntary layoffs…
“Ford reported a pretax loss of $1.3 billion in North America because of the deteriorating U.S. market and the shift away from trucks. U.S. sales overall were down 10 percent in the first half of the year, with Ford’s sales down 14 percent.
“The company, though, continued to be profitable overseas, posting a $582 million profit in Europe and $388 million in South America. The company also made $50 million at its Asia-Pacific-Africa division… Ford said it does not expect a U.S. economic recovery to start until early 2010.”
The Latest U.S. Bank Failures
The Wall Street Journal wrote on July 28:
“The latest bank failures… came late Friday, when federal regulators shut down First National Bank of Nevada, based in Reno, and First Heritage Bank of Newport Beach, Calif. The $3.2 billion in deposits of the closed banks were acquired by Mutual of Omaha Bank, a unit of insurer Mutual of Omaha. The branches are reopening Monday.
“The two failed banks were units of closely held First National Bank Holding Co., based in Scottsdale, Ariz. Both had been grappling with problem loans and had a combined first-quarter loss of about $140 million. First National Bank of Arizona, which was absorbed into First National Bank of Nevada in June, had a first-quarter loan-loss provision of $95.9 million…
“They are the sixth and seventh banks to have been shut by regulators so far this year, though they are far smaller than IndyMac Bank, the Pasadena, Calif., lender that collapsed earlier this month. IndyMac was a nationwide powerhouse in mortgage lending, while First National Bank of Arizona relied on brokers to generate loan volume from much of the U.S. Regulators are anticipating more closures as banks are overwhelmed by bad loans.”
“Is Your Bank Safe?”
Business Week wrote on July 28:
“Nothing says hard times like people standing outside a bank demanding their money. IndyMac Bancorp’s failure and the resulting chaos were reminiscent of Depression-era bank runs… the FDIC compiles a quarterly watch list of troubled banks; there are 90… That list ‘is going to grow longer, given the stresses we have in the marketplace, given the housing correction,’ Paulson said on July 20 in an interview with CBS’s Face the Nation. Just don’t ask for the names of any banks on the list. The FDIC cannot discuss which firms are in danger of failing, given that the agency collects proprietary data from each bank and says it would be unfair to use the information to expose them publicly…
“Many more people now have deposits that are above FDIC-insured limits, meaning that if their bank failed they might get only a portion of that money back… Today, only about 62% are insured…
“Wachovia’s new president and CEO, Robert Steel, is featured in a video on the company’s Web site aimed at bank customers. ‘Although the nation’s financial news lately has been a bit troubling and Wachovia certainly isn’t immune, I want you to know that our company is on exceptionally sound footing,’ he says. Steel goes on to list the bank’s capital ($50 billion), liquid funding capability ($150 billion), and says the bank has enough cash to meet its current long-term debt obligations for three and a half years… Associated Banc-Corp, a regional bank based in Green Bay, Wis., issued talking points to tellers and other bank employees the week after IndyMac’s demise. It wanted customers to know, among other things, that it was well-capitalized and had issued dividends for 154 consecutive quarters…
“But even as banks try to reassure their customers, they are competing with increasingly vocal skeptics. Lists of troubled institutions continue to proliferate on the Internet…”
Who Wins in Today’s Economy
CNN reported on July 31 that “Exxon Mobil [the world’s largest publicly traded oil firm] once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter. That profit works out to $1,485.55 a second.”
In addition, as the International Herald Tribune wrote, “Royal Dutch Shell, Europe’s largest oil company, reported a 33 percent increase in second-quarter profit Thursday, helped by a higher oil price even as production declined. Like smaller rival BP earlier this week, Shell profited from an oil price that almost doubled in the second quarter from the year earlier…”
The Current (and Future) State of Affairs of the US Economy
The Associated Press wrote on July 31:
“The country didn’t get the energetic rebound in economic growth hoped for from the government’s tax rebates in the second quarter, and the economy jolted into reverse at the end of 2007, raising new recession fears.
“The Commerce Department reported Thursday that gross domestic product, or GDP, increased at an annual rate of 1.9 percent in the April-to-June period. That marked an improvement over the feeble 0.9 percent growth logged in the first quarter of this year…
“Still, the second-quarter rebound wasn’t as robust as economists had hoped; they were forecasting growth at a 2.4 percent pace. The pickup, while welcome, isn’t likely to be seen as a signal that the fragile economy is growing healthier. There are fears that as the bracing tonic of the tax rebates fades, the economy could be in for another rough patch later this year…
“A trio of crises — housing, credit and financial — have badly bruised the economy. In response, employers have cut jobs for six months in a row, bringing total losses this year close to a staggering half-million — 438,000. The Labor Department reported Thursday that layoffs rose sharply last week. New claims filed for unemployment insurance jumped to 448,000, the highest in five years… With more job cuts expected for July and in coming months, there’s growing concern that many people will pull back on their spending… dealing a blow to the shaky economy. These worries — along with the negative GDP in the fourth quarter of last year — may rekindle recession fears.”
“Obama Will Be Costly and Difficult for Germany”
Der Spiegel Online reported on July 25 on the German reaction to Barack Obama’s speech in Berlin:
“Barack Obama conjured up Berlin’s Cold War past in his speech on Thursday, urging Germany to strengthen the trans-Atlantic relationship. The German press on Friday regards the plea as a prelude to demands for more Bundeswehr soldiers in Afghanistan… Most hear one essential message loud and clear: If Obama ends up in the White House, then Europeans — and Germans in particular — will be called upon to play a greater role in the war on terror — and that means contributing more troops to the war in Afghanistan.
“The center-left Süddeutsche Zeitung writes: ‘There is no doubt that Obama will demand more from the Europeans to ensure success in Afghanistan and Iraq. … And the Germans in particular should prepare themselves for those demands. Obama will be costly for Germany. The haggling over sending more troops to Afghanistan will continue. And a President Obama will demand help in winding up the Iraq adventure in the name of strengthened trans-Atlantic solidarity…’
“Conservative daily Die Welt writes: ‘… if he were to become president, he would demand that Germany and the EU play a much stronger role than they have been up to now in the war against terror and against the other evils in the world… Someone who dares to claim that now is the moment of great change should have very good arguments to back up that claim. And he should make it clear that he knows something about those tragedies where goodwill often creates nothing good. Unfortunately there was little trace of this in Barack Obama’s otherwise pleasant speech.’
“The Financial Times Deutschland writes: ‘… It is now finally clear to the German government that more involvement — and particularly in Afghanistan — will be expected from Berlin. The US doesn’t see why they should grind away at fighting the Taliban while the Germans play the nice reconstruction aid workers…. Obama will ask for more. He’ll ask the Germans to deploy troops in the dangerous south. Although this has long been clear to the German government, Obama was still treated like a teddy bear. Politicians from almost every party projected the feeling that the trans-Atlantic partnership would automatically blossom with the Democratic politician (as president).
“‘While the government already knows what awaits it, the voters for the parties in Berlin’s grand coalition could soon experience a rude awakening once they see that Obama’s new America is pursuing the same old goals. Until now, the Germans have always been able to reject a more robust mandate for Afghanistan with the unspoken knowledge that there was no need to run after someone like George W. Bush. But it will be much tougher to reject any urgent requests from a President Obama, who has just been so widely celebrated here.’
“The left-leaning Berliner Zeitung writes: ‘Obama’s agenda seems to contradict George W. Bush’s foreign policy on nearly every point. … His agenda is well thought through and could easily have been drafted by political thinkers in Europe. However, it is very abstract on many points. When he eventually gives them substance, then these differences with the Bush administration’s policies fall away. For Obama, as for John McCain, a militarily strong America forms the basis of all their foreign policy concepts… Obama makes no mention of fewer troops, agents or weapons. On the contrary… The Europeans must renew their efforts to formulate their own common security and foreign policy…’
“The left-leaning Die Tageszeitung writes: ‘… When you take away the Obama feel-good factor, what remains is a crystal clear demand: More European soldiers for Afghanistan. If he wins, Obama will also be a difficult US president for Germany…’
“The business daily Handelsblatt writes: ‘… He did not spare the Germans and the Europeans the bitter truth that a change of administration in Washington will not change anything in the difficult task that faces the alliance. That was a friendly way of saying that the Europeans should not be under the illusion that the departure of George W. Bush will mark the beginning of paradise…'”
The Bible reveals that the relationship between the USA and Europe will not substantially improve. For more information, please read our free booklet, “The Great Tribulation and the Day of the Lord.”
Google Under Attack in Italy
Times Online wrote on July 25:
“Italian prosecutors have indicated that they will press charges against four Google executives over a video which was posted on one of the search giant’s Italian sites in 2006, which showed four youths making fun of a disabled teenager in a classroom in the northern city of Turin… A spokesman for Google was quoted by the Wall Street Journal as saying that the company co-operated with Italian prosecutors throughout their investigation and that the video was removed from the site in question within hours of administrators being notified of its existence in September, 2006…
“A Google spokesman was quoted as saying that there was no basis for the legal action because under EU legislation – which has been incorporated into Italian law – Google isn’t required to monitor third-party content on its sites. It must only take down offending content when it is notified.”
National State of Emergency in Italy
On July 28, the EUObserver wrote the following:
“The Italian government of Silvio Berlusconi is facing strong criticism from the country’s opposition over the declaration of a national state of emergency to deal with the ‘exceptional and persistent influx’ of irregular immigrants… The decision came shortly after Italy passed another controversial piece of law that would make undocumented migration a criminal offence punishable by six months to four years in prison. The law also allows that property rented to such an immigrant can be confiscated…
“In June, the Berlusconi government also found itself under heavy criticism… for plans to conduct a census, under which all Roma people, including children, would be fingerprinted. Left critics of the move compared it to the policies of Benito Mussolini, the country’s fascist leader during the second world war.”
European Double-Standards Policy
The following article was originally published by Adevarul, Bucharest, in Romanian, on July 24, 2008, and published in English by the BBC:
“Corruption is deeply rooted in Bulgarian society and the European Union is naive to think that several rules or highways will change the situation. However, corruption is an issue for new EU member Bulgaria (also Romania), so that it is no surprise that Brussels is threatening to suspend financial aid and retain travel restrictions for work- seekers should Sofia not crack down on organized crime and other forms of corruption. Bulgaria, the poorest EU member, is hoping to get 7m euros for structural reforms over the next five years… the EU threat shows a recurrent habit – the European Commission bullies smaller member states but is often soft on the important ones.
“Do you remember the agitation caused by Joerg Haider’s party getting good results in Austria? Fourteen countries, although they were not officially part of the EU, condemned Austrians as if Haider had set the Reichstag on fire. Portugal and Ireland were criticized for having infringed the euro zone debt rules and the Danish and the Irish were threatened in various ways for the ‘wrong’ results of their respective referendums.
“I do not recall, however, when the French or the German governments were last threatened or when the Italians were seriously warned about their own corruption, which swallowed a large slice of the EU aid intended for southern Italy. One can see those highways suddenly end in the middle of some Sicilian plain. In short, if Brussels often lacks courage in front of the EU ‘big guys,’ the fact that it pompously and severely points at the ‘little ones’ can only highlight its double-standards policy.”
“Two-Speed Europe May Emerge Over Divorce Rules”
The EUObserver wrote on July 25:
“In the face of long-lasting deadlock, a group of nine EU states have decided to take the unprecedented path of closer co-operation and apply common rules for divorce between couples of different European nationality… Austria, France, Greece, Hungary, Italy, Luxembourg, Romania, Slovenia and Spain have teamed up in order to formally request the European Commission launch the so-called enhanced co-operation mechanism – allowing a group of countries to move ahead in one particular area, even though other states are opposed…
“A controversial and politically sensitive issue anyway, this route for dealing with the divorce question has further irked some capitals because, under normal procedures, a decision in this area would have to be taken by unanimity… Under the foreseen rules, if a Czech-German couple living in Belgium decide to divorce, spouses would be allowed to choose the competent court and the law to apply to their case. Should they fail to agree, the couple would be automatically referred to a court in Belgium, their place of residence.
“Malta and Sweden are widely considered the most reluctant to give the go-ahead to a EU-wide divorce scheme. Strongly Catholic Malta does not recognise divorce, while Stockholm fears that EU harmonisation in the area could threaten its liberal family law…
“Germany, Belgium, Portugal and Lithuania are also believed to be considering joining the initiative.”
“Multi-Speed Europe” On Defense
The EUObserver wrote on July 29, 2008:
“Europeans are a heterogeneous lot, and efforts to develop European defence need to recognise and accommodate this diversity. This last point is especially relevant in the aftermath of the Irish ‘No’ to the Lisbon Treaty. For some, this latest failure to get 27 runners and riders into the starting gates at the same time has only confirmed the need to accept a ‘multi-speed’ Europe. Whether or not this is true for the future of the Union as a whole, there is no room for dispute in defence – multi-speed is the reality, and will remain so as long as 27 Member States reserve the right to set their own defence policies, and take their own decisions about sending their young men and women into danger…
“This approach – the concept of the ‘pioneer group’ – appears in the Lisbon Treaty in the provisions on ‘permanent structured cooperation’. But, with Lisbon in baulk for the foreseeable future, the principles should be introduced as far and as fast as possible into the existing practices and institutions of European defence – most obviously, into the workings of the European Defence Agency.”
Deutsche Welle reported on July 29:
“Former German Foreign Minister Joschka Fischer has called for a group of EU states to develop a military force capable of reacting to crises around the world. He said the bloc needs a flexible defense policy. A group [of] EU nations should form a ‘pioneering group’ to deal with issues of European security and defense, Fischer said Tuesday, July 28, at the presentation of a European Council on Foreign Relations study. ‘We must recognize the reality of a “multi-speed Europe” on defense,’ said Fischer, one of the council’s co-chairs. ‘The reluctant should not be bullied, but neither must they hold the others back.’ Fischer added that the bloc needed to take a ‘flexible approach’ to cooperation between states on key issues in order to move forward after the Irish rejection of the Lisbon Treaty, which foresees creating a new post to steer European foreign and security policy…
“A former leader of the German Greens party, Fischer was instrumental in convincing his fellow party members to turn away from the party’s pacifist roots and to support NATO efforts in the Balkans in the late 1990s. It represented the first time German soldiers conducted military operations since World War II. Though he opposed sending troops to Iraq, Fischer lent his support to the Bundeswehr’s mission in Afghanistan.
“If such a European reaction force were created it would be able to react to violence around the globe such as in Chad and Congo, more effectively than allowed by current policies, according to the council’s report. ‘Europe’s security is being jeopardized by the reluctance of defense ministries to change and to work together,’ said Lord George Robertson, former NATO Secretary General, and one of council’s members. ‘Stronger European defense cooperation will only strengthen NATO.’ ‘A large part of the 200 billion euros that Europe spends on defense every year is simply wasted,’ the study says.”
A two-speed Europe–with a core Europe leading the continent–is inevitable. For more information, please read our free booklet, “Europe in Prophecy.”
No Second Vote in Ireland?
The EUObserver wrote on July 28:
“Almost three quarters of Irish voters are opposed to the idea of a second vote on the EU’s Lisbon treaty…The leader of France, which currently [holds] the EU’s six-month rotating presidency, last week proposed to the Irish prime minister, Brian Cowen, that a second referendum on the Lisbon Treaty be held on the same day as elections to the European Parliament next June…
“The survey also suggested that in the case of a repeated referendum, even more people would vote No than the first time around…
“Twenty out of 27 EU states have definitively ratified the EU treaty. Spain, Germany and Poland’s parliaments have approved the text but the respective heads of state must still sign off on the document, with the German constitutional court still considering a legal challenge.
“The Italian lower house is expected to back the text this week. Swedish MPs are set to pass the treaty without serious opposition when they begin their autumn session in September. And Czech deputies are planning to hold a vote in autumn, after the verdict of the country’s constitutional court on a legal appeal.”
New Sunday Law in Croatia
The Associated Press reported on July 26:
“The Croatian parliament has passed a law forcing shops to close on Sundays in a concession to the Roman Catholic church… The church has campaigned for years for Sundays to be devoted to family or Mass in Croatia, which is almost 90 percent Roman Catholic. But Croatians have begun spending weekends in shopping malls that have flourished across the country in the past few years and remain open seven days a week.
“The law [was] adopted Tuesday and goes into effect Jan. 1. It allows Sunday shopping over the summer and Christmas holidays. The law also allows stores in gas, bus and train stations to open on Sundays year-round, along with those in hospitals. Bakeries, newsstands and flower shops are also exempt from the ban.”
First Ever Recession in Eurozone?
The EUObserver wrote on July 25:
“The eurozone is facing the threat of the first ever recession in its brief history since 1999, according to the latest business data on the 15-country single currency bloc. A survey issued on Thursday (24 July) of some 5,000 companies showed both manufacturing and services activity declining rapidly in July, after data for March to June suggest that the second quarter may have experienced economic contraction. If the July to September period continues on its downward trajectory, the eurozone will meet the technical definition of a recession: two consecutive quarters of contraction…
“Employment in the service sector also shrank in July, the first time the number of services jobs has not grown in four years. And Employment in manufacturing dropped to a three-year low. Manufacturing output is at its lowest rate since the attacks on New York and Washington in September 2001 and new orders are at their lowest level in seven years.
“A slew of other surveys of the French, German and Italian economies also backed up the PMI data. A key survey of German business sentiment… showed the business climate in Europe’s largest economy at a three-year low. In France, business confidence fell this month for the sixth month in a row, and slipped to its lowest level since May 2005… In Italy, business sentiment plunged to its lowest levels for almost seven years… For its part, the Spanish government, struggling with a collapse in the housing market, has cut its growth forecast for 2008 to 1.6 percent, down from 2.3 percent.
“‘Economic growth in the eurozone is coming almost to a halt,’ said Bank of America economist Holger Schmieding, according to AFP.”
AFP also reported on July 31 that “Deutsche Bank [the biggest German bank] posted on Thursday a 63.0-percent slump in second-quarter net profit… the bank has suffered from the global credit crisis that broke a year ago, and was obliged to write down the value of its assets by 2.3 billion euros in the second quarter, following a markdown of 2.7 billion in the first three months of the year.”
WTO Talks Collapse With Gloomy Consequences
Der Spiegel Online wrote on July 30:
“The WTO [World Trade Organization] efforts to strike a new global trade pact ended in failure on Tuesday, after the US resisted what [it] saw as protectionism from China and India. German papers on Wednesday are gloomy about the impact on the global economy.
“The negotiations had already dragged on for seven years but nine days of marathon talks in Geneva could not bridge the gap. On Tuesday the current round of World Trade Organization talks… collapsed in failure. The result is no trade deal and no good news in a time of increasing economic uncertainty.
“In the end, the deal hit a fatal snag when the United States refused to allow China and India a loophole which would have protected farmers from a sudden surge in imports. The recriminations started almost immediately, with each side blaming the other for what has been widely regarded as a disaster. On Wednesday China blamed ‘selfish’ wealthy Western nations for the failure to free up global trade, while Japan pointed the finger at China and India for focusing on their own interests instead of considering the global economy…
“The disappointment was all the more crushing because a compromise which had been painstakingly negotiated was so close to being accepted by all 153 WTO member states. The deal would have allowed poorer countries to sell more produce to rich countries while Western nations would have had access to emerging markets for their industrial goods and services. US officials were reported to be particularly bitter because they had made significant concessions by agreeing to limit US farm subsidies…
“Business daily Handelsblatt writes: ‘In the long term the debacle in Geneva marks a break of immense importance… Above all the failure of the WTO talks reflects the changing power relations in the world. Gone are the days when the US and Europe could set the tone and largely draw up the world trade agreements amongst themselves. China and India took a tough stance. They fight hard for their interests and only support free trade when it suits them. The old industrial powers will slowly realize the bitter truth of this. Geneva was just a foretaste.’
“The center-left Süddeutsche Zeitung writes: ‘On Tuesday in Geneva the hope died that the powerful WTO would be capable of at least getting close to solving the most urgent problems facing people across the world. These are: rising food prices, declining natural resources, the crisis in the financial markets and the economic downturn in the Western industrial countries. A flourishing world trade, according to the WTO, could lead to a greater availability of food, which would decrease the prices of bread, rice and corn, make cars cheap and make it easier for people to make a living.'”
Earthquake in Southern California–A Drill for the “Big One”
The Associated Press reported on July 29:
“The strongest earthquake to strike a populated area of Southern California in more than a decade rattled windows and chandeliers, made buildings sway and sent people running into the streets on Tuesday… The 5.4-magnitude quake — considered moderate — was felt from Los Angeles to San Diego, and as far east as Las Vegas, 230 miles away. Nearly 30 aftershocks quickly followed, the largest estimated at 3.8. The quake was centered 29 miles southeast of downtown Los Angeles near Chino Hills, a San Bernardino County city of 80,000 built mostly in the early 1990s with the latest in earthquake-resistant technology…
“As strong as it felt, Tuesday’s quake was far less powerful than the deadly magnitude-6.7 Northridge earthquake that toppled bridges and buildings on Jan. 17, 1994. That was the last damaging temblor in Southern California, though not the biggest. A 7.1 quake struck the desert in 1999.
“The earthquake had about 1 percent of the energy of the Northridge quake, said Thomas Heaton, director of the earthquake engineering and research laboratory at the California Institute of Technology. ‘People have forgotten, I think, what earthquakes feel like,’ said Kate Hutton, a seismologist at Caltech. ‘So I think we should probably look at it as an earthquake drill. … It’s a drill for the “Big One” that will be coming some day.'”
LifeScience wrote on July 29:
“As if the San Andreas Fault weren’t long and menacing enough, newly found mud pots and mud volcanoes now suggest it extends another 18 miles, going under the Salton Sea and beyond, in the desert southeast of Palm Springs… Geologists had suspected that the San Andreas Fault extended beyond its agreed-upon terminal point near Bombay Beach, a location about midway along the eastern shore of the Salton Sea… The Salton Sea is an extremely salty, below-sea-level lake and the largest lake in California. It formed starting in 1905 when rainfall forced the Colorado River to swell and breach a nearby dike. The town of Salton and some Indian land was submerged by the time the flooding was controlled, two years later…
“The San Andreas Fault is a 700-mile plate boundary in California, separating the Pacific and North American plates. Seismologists say that enough stress has accumulated at the fault to generate the next ‘Big One,’ an earthquake of magnitude 7.0 or greater, any day now or 10 years or more from now. Southern California is at greatest risk…”
What About Cell Phones and Cancer?
LifeScience wrote on July 29:
“Ronald Herberman, director of the University of Pittsburgh Cancer Institute, shocked just about all law-abiding scientists (abiding by laws of physics, that is) with his warning last week to his faculty and staff that cell phones might pose a cancer risk. This is troublesome because this time a really smart person is saying it, not just another nutcase. The basics still ring true, and Herberman admitted as much: There’s no convincing evidence that cell phone radiation causes cancer. Nor is there plausible biological or physical reasoning for why it would cause cancer.
“Herberman said his warning is based on early, unpublished data from a 13-country study on cell phone use. Scientists tend to be wary of preliminary results, and many are scratching their heads over why Herberman would make such a stern and public warning now. Herberman countered that until there’s definitive proof that cell phones are harmless, users should practice some caution…
“Yet Einstein, in a way, disproved the notion that cell phone radiation causes cancer. It’s called the photoelectric effect: Light is composed of photons which, when above a threshold energy, can dislodge electrons from atoms – for example, break chemical bonds in DNA and cause cancerous mutations. That threshold energy is near the ultraviolet part of the electromagnetic spectrum, thousands of times more energetic than cell phone radio waves. UV, X-rays and gamma rays cause cancer. These photons are like golf balls, whereas radio photons are like cotton balls. You can throw millions of cotton balls against a window; it just won’t break…
“Despite myriad studies showing no increased cancer risk from up to 20 years of cell phone use, some scientists continue to probe – as they should, given the omnipresence of cell phones.
“One alternate theory is that heat generated by cell phones can cook brain cells… One problem with the heat theory is that the sun can heat your head far more efficiently than a cell phone. And your body does a rather decent job at regulating heat, anyway… Each type of living tissue absorbs radiation at a different frequency. So it is plausible that cell phone radiation bypasses the skin and skull and is absorbed selectively by brain tissue. But scientists see only marginal evidence for changes at the cellular level induced by cell phone radiation in Petri dishes, fruit flies and mice. Similarly in human studies, such as the 13-country study Herberman was privy to, called INTERPHONE, there is at best only an inkling of evidence that cell phones might cause cancer if you use them long enough, for 30 or more years.”