Archive for October, 2011

DOE IG – The Department’s Unclassified Cyber Security Program – 2011

Monday, October 31st, 2011

 

DOE IG Evaluation Report – The Department’s Unclassified Cyber Security Program – 2011, DOE/IG-0856 October 2011 http://energy.gov/sites/prod/files/IG-0856_0.pdf

"The Department had taken steps over the past year to address previously identified cyber security weaknesses and enhance its unclassified cyber security program. While these were positive steps, additional action is needed to further strengthen the Department’s unclassified cyber security program and help address threats to its information and systems. For example, our FY 2011 evaluation disclosed that corrective actions had been completed for only 11 of the 35 cyber security weaknesses identified in our FY 2010 review. In addition, we identified numerous weaknesses in the areas of access controls, vulnerability management, web application integrity, contingency planning, change control management, and cyber security training. While many of the same or similar issues had been noted in prior FISMA reports, the number of weaknesses identified represented a 60 percent increase over our FY 2010 review."

 

Tracking the Trackers: Where Everybody Knows Your Username

Monday, October 31st, 2011

 

Tracking the Trackers: Where Everybody Knows Your Username by Jonathan Mayer, posted on October 11, 2011 http://cyberlaw.stanford.edu/node/6740

Click the local Home Depot ad and your email address gets handed to a dozen companies monitoring you. Your web browsing, past, present, and future, is now associated with your identity. Swap photos with friends on Photobucket and clue a couple dozen more into your username. Keep tabs on your favorite teams with Bleacher Report and you pass your full name to a dozen again. This isn’t a 1984-esque scaremongering hypothetical. This is what’s happening today."

 

Album: American Dreams by Laurie Antonioli

Monday, October 31st, 2011

 

Description Laurie Antonioli’s smooth vocal stylings leap, soar, and play in her new album, American Dreams. A strikingly original singer who is carving new frontiers in contemporary vocal jazz, Antonioli delivers consistently engaging performances whether she’s rippling through a scat solo or uncovering the emotional depths of a ballad. The songs in American Dreams range from fresh takes on American Songbook standards and traditional American songs to contemporary melodies that she brings to life with her original lyrics — some wistful, some exuberant, and some with a satirical wink. But she also makes the music her own with inspired arrangements influenced by folk, pop, and even country music. This accessible collection of songs is fun and easy to listen to repeatedly, with tunes that can easily stick in your head, but it also offers multiple layers of interest to jazz and other music aficionados.

The rich alto of Antonioli’s voice is beautifully balanced in her seamless collaboration with her band, musicians who are all stellar performers in their own right: Matt Clark on piano, John Shifflett on bass, Jason Lewis on drums, Dave MacNab on guitar, and Sheldon Brown on soprano and tenor saxes, bass clarinet, and harmonica. Her luscious voice combines with deft instrumental solos and beautifully mixed ensemble segments to weave a gorgeous, distinctive sound for each song.

"Samba Nada Brahma" is a sparkling tune written by Austrian pianist Fritz Pauer, featuring Antonioli’s lyrics. The song gives her voice free reign to dart in a playful interchange with the exotic lines from Brown’s soprano sax and defines a model for the rest of the album by edging familiar elements into new, intriguing territory. "Vienna Blues," another Pauer/Antonioli collaboration, slides into a deeper mood as Antonioli’s voice curls around the corners of a painful disappointment in love.

The mood brightens with "Moonlight in Vermont," happily transformed with an elegant reharmonization by Richie Beirach and an upbeat swing arrangement. "How Long," likely to be the surprise hit of the album, moves a Pauer/Antonioli standard into the sweetly mournful territory of a country ballad, complete with slide guitar licks and the hint of a cry in her vocal delivery. The Pauer/Antonioli song "Sweet Sound of Spring" follows, expressing thoughts of love with a light touch yet deeply lyrical performances by Antonioli and her band.

Drummer Jason Lewis wrote the music for "Under Consideration," another ballad made memorable with Antonioli’s thoughtful lyrics and tender delivery. "Stimulus Plan" follows with a playful take on an Ornette Coleman-style free jazz approach to Paul Nagel’s music — a perfect complement to Antonioli’s hilarious lyrics riffing on thoughts of prosperity after finding a penny on the street.

Antonioli’s haunting version of "America the Beautiful" in a slow waltz tempo turns the album back in a country-inflected direction, with a hint of folk as well. "Dreary Black Hills/Get Up and Go" is a playful juxtaposition of a traditional cowboy song with a contemporary tune written by bassist John Shifflett, again with her lyrics. "Just a Dream," the fifth Pauer/Antonioli song included in the album, has an exotic appeal with the deep colors of bass clarinet enlivened by MacNab’s solo on electric guitar and Balkan-like vocal solos.

"Oh What a Beautiful Morning" is stunningly re-imagined as a quiet ballad with an accompaniment that is as delicate as a dream. Finally, the album is brought to a satisfying conclusion with "Long Way from Home," a poignant ballad with a Balkan feel written by pianist Richie Beirach with lyrics by Antonioli. The song ends with Antonioli’s voice overdubbed in Balkan harmonies — a shimmering finale for an unforgettable album.

Tracks

  • 1. Samba Nada Brahma
  • 2. Vienna Blues
  • 3. Moonlight in Vermont
  • 4. How Long
  • 5. Sweet Sound of Spring
  • 6. Under Consideration
  • 7. Stimulus Plan
  • 8. America the Beautiful
  • 9. Dreary Black Hills/Get Up & Go
  • 10. Just a Dream
  • 11. Oh, What a Beautiful Morning
  • 12. Long Way From Home

http://www.laurieantonioli.com/

 

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Borowitz Report – A letter from Goldman Sachs

Monday, October 31st, 2011

 

October 18, 2011

A Letter from Goldman Sachs

Concerning Occupy Wall Street

NEW YORK (The Borowitz Report)– The following is a letter released today by Lloyd Blankfein, the chairman of banking giant Goldman Sachs:

Dear Investor:

Up until now, Goldman Sachs has been silent on the subject of the protest movement known as Occupy Wall Street. That does not mean, however, that it has not been very much on our minds. As thousands have gathered in Lower Manhattan, passionately expressing their deep discontent with the status quo, we have taken note of these protests. And we have asked ourselves this question:

How can we make money off them?

The answer is the newly launched Goldman Sachs Global Rage Fund, whose investment objective is to monetize the Occupy Wall Street protests as they spread around the world. At Goldman, we recognize that the capitalist system as we know it is circling the drain – but there’s plenty of money to be made on the way down.

The Rage Fund will seek out opportunities to invest in products that are poised to benefit from the spreading protests, from police batons and barricades to stun guns and forehead bandages. Furthermore, as clashes between police and protesters turn ever more violent, we are making significant bets on companies that manufacture replacements for broken windows and overturned cars, as well as the raw materials necessary for the construction and incineration of effigies.

It would be tempting, at a time like this, to say “Let them eat cake.” But at Goldman, we are actively seeking to corner the market in cake futures. We project that through our aggressive market manipulation, the price of a piece of cake will quadruple by the end of 2011.

Please contact your Goldman representative for a full prospectus. As the world descends into a Darwinian free-for-all, the Goldman Sachs Rage Fund is a great way to tell the protesters, “Occupy this.” We haven’t felt so good about something we’ve sold since our souls.

Sincerely,
Lloyd Blankfein
Chairman, Goldman Sachs

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Andy's Upcoming Events

Upcoming Events

October 19, 2011 at 08:00 PM

New York!

Andy celebrates the publication of The 50 Funniest American Writers with Nora Ephron, Calvin Trillin, Jenny Allen and more. Book signing to follow.

Location:
92nd and Lexington
For tickets go to Borowitz in NYC

October 22, 2011 at 04:15 PM

Austin!

Andy performs at the Texas Book Festival and signs copies of his new book, The 50 Funniest American Writers. For more information, click here.

Location:
First United Methodist Church, 1201 Lavaca St.

November 19, 2011 at

Miami!

Andy will do a free show at the Miami Book Fair and sign copies of his new book, The 50 Funniest American Writers.

Location:
TBA

December 03, 2011 at 07:30 PM

Rhinebeck, NY!

Andy will perform and sign copies of his new book, The 50 Funniest American Writers. RSVP is required for this free event. RSVP to rsvp@oblongbooks.com or call 845-876-0500.

Location:
Oblong Books & Music, 6422 Montgomery, Rhinebeck, NY
For tickets go to Oblong Books

April 03, 2012 at 06:00 PM

Mark Twain’s House!

Andy will perform a special show at the Mark Twain Boyhood Home and Museum in Hannibal, MO. Afterwards he’ll be signing copies of his new book, The 50 Funniest American Writers.

Location:
120 N. Main St., Hannibal, MO 63401
For tickets go to Andy Borowitz at Mark Twain’s House

http://www.borowitzreport.com/

three thousand words – Rick McKee; Walking Dead GOP; Tom Tomorrow: Breaking news! Poverty eliminated; Tom The Dancing Bug: In Which Lucky Ducky and the Houndsville 99% Declare Class Warfare!!

Monday, October 31st, 2011

 

Rick McKee
Augusta Chronicle
Oct 30, 2011

 

Tom Tomorrow cartoon

 

Tom Tomorrow: Breaking news! Poverty eliminated (credoaction.com)

 

Tom The Dancing Bug cartoon

 

Tom The Dancing Bug: In Which Lucky Ducky and the Houndsville 99% Declare Class Warfare!! (boingboing.net)

 

 

Wednesday October 19 – Sunday October 23, 2011

Wednesday, October 19th, 2011

 

"The right to be let alone is indeed the beginning of all freedom." Justice William O. Douglass

 

Arguing With A Theist Is Like Arguing With A Child by Al Stefanelli

“It is far better to grasp the Universe as it really is than to persist in delusion, however satisfying and reassuring.- Carl Sagan

Palms, they are everywhere, waiting to slap the faces of reasoned individuals all over the world. Rising out of the these situations are those that elicit a most painful hand print. Blatant cases of pots meeting kettles. The plethora of emotions and speed at which they pass through my consciousness is unequaled in the world of facepalming. First there is shock, then amusement, then understanding, then ire and finally the almost uncontrollable urge to bitch-slap someone naked into next week and hide their clothes before they get there.

By now, you have probably guessed that I am referring to those fundamentalists who hurl projected accusations at Atheists. Think of all the characteristics of the fundamentalist and try to recall a time or two when you, an Atheist, have been labeled as such.

Here is a short list of some of the things we have been called:

  • Religious
  • Faithful
  • Ignorant
  • Close Minded
  • Fool
  • Tyrant
  • Indoctrinated
  • Intolerant
  • Exclusionist
  • Fundamentalist
  • Confused
  • Delusional
  • Insane
  • Satan’s Footsoldier
  • Satanist
  • Devil Worshiper
  • Mentally Ill
  • Dogmatic
  • Congregationalist
  • Preacher

These are but a few… One of the main qualifiers for religious belief is the refusal to actually question what one is told. We call this “Blind Faith“, and it is apparent when you consider that there exist actual church signs that read “Reason is the enemy of faith“. When blind faith is combined with a lack of real knowledge in an arena of debate, argument or discussion, the result is not what you would call an intelligent discourse. You end up with the fundamentalist replying like a child in a schoolyard scrap instead of an intelligent adult, mainly because they don’t know any better. I enjoy a healthy debate with a person of faith, because as wrong as I believe them to be, they present their arguments in a format that engenders the desire to represent in as an intelligent fashion as possible. I call this “adult conversation”

Arguing with a fundamentalist is like arguing with a child. The Atheist will usually make a statement, back it up with reason and offer a couple of examples and empirical evidence. This is an “Argument From Reality“. The fundamentalist will usually reply with a straw man, red herring or some other logical fallacy, which I call an “Argument From Delusion.

They can’t help it, people. They don’t know any better. their indoctrination has generally stifled a proper education and the inevitable lack of a healthy sense of skepticism has retarded their intellectual growth to the point where they are little more than petulant children, which I call “Chewtoys.“ There is no debating these people. There’s no possibility of diplomacy. They have no desire to illicit an intelligent conversation. They exist primarily to spew forth their vomitous condemnations in all their willfully ignorant glory. They have poor communication skills and are left only with a child-like projection of their own shortcomings, which they hurl all willy-nilly at their opponents which result in the ensuing facepalms performed by the reasoned of the world, as stated above.

So, while I will continue to engage in intelligent discourse with people of faith, I will also continue to chew up and spit out religious fundamentalists like the polemic pit bull that I am. Why? Because it’s fun, and besides, we don’t do it in order to make ourselves look superior, but because exposing fundamental religionists as the ignorant, childish, intellectually retarded, mentally deficient tyrants that many of them are is also a public service, and we are all about public service…

(This is an excerpt from my book, “A Voice Of Reason In An Unreasonable World – The Rise Of Atheism On Planet Earth.“)

 

Al Stefanelli – Georgia State Director, American Atheists, Inc.

 

A Voice Of Reason In An Unreasonable World: The Rise Of Atheism On Planet Earth by Al Stefanelli

Description

Publication Date: March 26, 2011

If you enjoyed reading Al Stefanelli’s articles, investigative journalism and blistering editorials, then you are in for a treat. The no-holds-barred Prince of Polemic leaves no sacred stone unturned. It is said our species is separate from all others by our ability to reason. Then why are there so many unreasonable people in the world who stubbornly cling to outdated, irrelevant, disproven and often dangerous superstitious beleifs? For the last several thousand years the world was controlled by powerful and corrupt religions. Anyone who questioned their doctrine, dogma or superstition was routinely dispatched with extreme prejudice. But the tides are turning. Organized religion is losing it’s credibility to the groundbreaking discoveries made by the scientific community which is continually providing empirical evidence for what was once held sacred. With the advent of the World Wide Web and through the tireless efforts of civil rights organizations and advocates of reason, our species advances further into the post-modern world. This is positive growth, but the growing pains are giving the earth and many of it’s inhabitants some very ugly battle scars. The steady and dramatic rise of dangerous, militant, fundamentally extremist terror cults are filling our streets with blood and infecting the minds our youth with poison. Al Stefanelli offers insight as to why this will get a lot worse and how important it is to the survival of our species that we do not give up and go quietly into that good night. Other topics in this book include how the fundamental extremists in the United States are affecting the quality and content of public education, race relations, the first amendment violations being committed by politicians from the office of the President all the way down to local town councils and the growing problem of sectarianism within the United States Armed Forces. Al Stefanelli also examines how the memetics of religious belief can cause othewise intelligent, well adjusted and sane people people to hold beliefs and act out in ways that can only be described as delusional, sometimes bordering on psychotic. You will also enjoy Al’s "Greatest Hits." A large collection of the most requested articles and commentaries, refreshed and updated.

http://www.alstefanelli.com/

 

Petroleum Supply Monthly Friday, October 28, 2011

The October Petroleum Supply Monthly with August data has been released to the EIA website on Friday, October 28, 2011.

http://www.eia.gov/ …

Congressional Record Latest Daily Digest for Tuesday, October 25, 2011

 http://thomas.loc.gov/cgi-bin/query/B?r112:@FIELD(FLD003+d)+@FIELD(DDATE+20111025)

Latest update was Tuesday, October 25, 2011

CRS – Pakistan-U.S. Relations: A Summary

Pakistan-U.S. Relations: A Summary https://www.fas.org/sgp/crs/row/R41832.pdf . Alan Kronstadt, Specialist in South Asian Affairs, October 20, 2011 "This report summarizes important recent developments in Pakistan and in Pakistan-U.S. relations. Obama Administration engagement with Pakistan has been seriously disrupted by recent events. A brief analysis of the current state of Pakistan-U.S. relations illuminates the main areas of contention and uncertainty. Vital U.S. interests related to links between Pakistan and indigenous American terrorism, Islamist militancy in Pakistan and Islamabad’s policies toward the Afghan insurgency, Pakistan’s relations with historic rival India, nuclear weapons proliferation and security, and the troubled status of Pakistan’s domestic setting are reviewed. Ongoing human rights concerns and U.S. foreign assistance programs for Pakistan are briefly summarized, and the report closes with an analysis of current U.S.-Pakistan relations."

Borowitz Report – Breaking news from the White House

October 21, 2011

Obama Says US Not Deserting Iraq: ‘We Will Continue to Follow You on Twitter’

Promises Strong Social Networking Ties with Iraqi People

WASHINGTON (The Borowitz Report) Announcing that it would completely withdraw its troops from Iraq by the end of the year, President Barack Obama today maintained that the United States was not deserting Iraq, promising the Iraqi people, “We will continue to follow you on Twitter.”
Mr. Obama indicated that the United States’ relationship with Iraq would soon transition from a military one to a social networking one, with the United States promising to “Like” Iraq’s Facebook page and share contact information on LinkedIn.
He added, however, that the United States would not have a presence on Google+ "because no one else does."
In summing up the United States’ eight-year military mission in Iraq, Mr. Obama said, “We have done everything we set out to do in this mission, except figure out what the mission was.”
Turning to Libya, Mr. Obama expressed pride in the successful NATO effort to topple dictator Muammar Gaddafi: "It is my hope that Libya will soon have a functioning democracy, and that someday the United States will, too."
Former Vice-President Dick Cheney also congratulated the Libyan people, releasing the following official statement: "With Gaddafi gone, Libya’s right to determine its future is now safely in the hands of multinational oil companies."
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Andy's Upcoming Events

Upcoming Events

October 22, 2011 at 04:15 PM

Austin!

Andy performs at the Texas Book Festival and signs copies of his new book, The 50 Funniest American Writers. For more information, click here.

Location:
First United Methodist Church, 1201 Lavaca St.

November 19, 2011 at

Miami!

Andy will do a free show at the Miami Book Fair and sign copies of his new book, The 50 Funniest American Writers.

Location:
TBA

December 03, 2011 at 07:30 PM

Rhinebeck, NY!

Andy will perform and sign copies of his new book, The 50 Funniest American Writers. RSVP is required for this free event. RSVP to rsvp@oblongbooks.com or call 845-876-0500.

Location:
Oblong Books & Music, 6422 Montgomery, Rhinebeck, NY
For tickets go to Oblong Books

April 03, 2012 at 06:00 PM

Mark Twain’s House!

Andy will perform a special show at the Mark Twain Boyhood Home and Museum in Hannibal, MO. Afterwards he’ll be signing copies of his new book, The 50 Funniest American Writers.

Location:
120 N. Main St., Hannibal, MO 63401
For tickets go to Andy Borowitz at Mark Twain’s House

Special Series (Part 1): Assessing the Damage of the European Banking Crisis

October 20, 2011

 

Special Series (Part 1): Assessing the Damage of the European Banking Crisis

STRATFOR

Editor’s Note: This is the first installment in a two-part series on the European banking crisis.

Related Links

Europe faces a banking crisis it has not wanted to admit even exists.

The formal authority on financial stability, International Monetary Fund (IMF) chief Christine Lagarde, made her institution’s opinion on European banking known back in August when she prompted the European Union to engage in an immediate 200 billion-euro bank recapitalization effort. The response was broad-based derision from Europeans at the local, national and EU bureaucratic levels. The vehemence directed at Lagarde was particularly notable as Lagarde is certainly in a position to know what she was talking about: Until July 5, her title was not IMF chief, but French finance minister. She has seen the books, and the books are bad. Due to European inaction, the IMF on Oct. 18 raised its estimate for recapitalization needs from 200 billion euros to 300 billion euros ($274 billion to $410 billion).

Sovereign Debt: The Expected Problem

The collapse in early October of Franco-Belgian bank Dexia, a large Northern European institution whose demise necessitated a state rescue, shattered European confidence. Now, Europeans are discussing their banking sector. A meeting of eurozone ministers Oct. 21 is largely dedicated to the topic, as is the Oct. 23 summit of EU heads of government. Yet European governments continue to consider the banking sector largely only within the context of the ongoing sovereign debt crisis.

This is exemplified in Europeans’ handling of the Greek situation. The primary reason Greece has not defaulted on its nearly 400-billion euro sovereign debt is that the rest of the eurozone is not forcing Greece to fully implement its agreed-upon austerity measures. Withholding bailout funds as punishment would trigger an immediate default and a cascade of disastrous effects across Europe. Loudly condemning Greek inaction while still slipping Athens bailout checks keeps that aspect of Europe’s crisis in a holding pattern. In the European mind — especially the Northern European mind — a handful of small countries that made poor decisions are responsible for the European debt crisis, and while the ensuing crisis may spread to the banks as a consequence, the banks themselves would be fine if only the sovereigns could get their acts together.

This is an incorrect assumption. If anything, Europe’s banks are as damaged as the governments that regulate them.

When evaluating a problem of such magnitude, one might as well begin with the problem as the Europeans see it — namely, that their banks’ biggest problem is rooted in their sovereign debt exposure.

Special Series (Part 1): Assessing the Damage of the European Banking Crisis

STRATFOR

(click here to enlarge image)

The state-bank contagion problem is fairly straightforward within national borders. As a rule the largest purchaser of the debt of any particular European government will be banks located in the particular country. If a government goes bankrupt or is forced to partially default on its debt, its failure will trigger the failure of most of its banks. Greece does indeed provide a useful example. Until Greece joined the European Union in 1981, state-controlled institutions dominated its banking sector. These institutions’ primary reason for being was to support government financing, regardless of whether there was a political or economic rationale justifying that financing. The Greeks, however, have no monopoly on the practice of leaning on the banking sector to support state spending. In fact, this practice is the norm across Europe.

Spain’s regional banks, the cajas, have become infamous for serving as slush funds for regional governments, regardless of the government in question’s political affiliation. Were the cajas assets held to U.S. standards of what qualifies as a good or bad loan, half the cajas would be closed immediately and another third would be placed in receivership. Italian banks hold half of Italy’s 1.9 trillion euros in outstanding state debt. And lest anyone attempt to lay all the blame on Southern Europe, French and Belgian municipalities as well as the Belgian national government regularly used the aforementioned Dexia in a somewhat similar manner.

Yet much debt remains for outsiders to own, so when states crack, the damage will not be held internally. Half or more of the debt of Greece, Ireland, Portugal, Italy and Belgium is in foreign hands, but like everything else in Europe the exposure is not balanced evenly — and this time, it is Northern Europe, not Southern Europe, that is exposed. French banks are more exposed than any other national sector, holding an amount equivalent to 8.5 percent of French gross domestic product (GDP) in the debt of the most financially distressed states (Greece, Ireland, Portugal, Italy, Belgium and Spain). Belgium comes in second with an exposure of roughly 5.5 percent of GDP, although that number excludes the roughly 45 percent of GDP Belgium’s banks hold in Belgian state debt.

Special Series (Part 1): Assessing the Damage of the European Banking Crisis

When Europeans speak of the need to recapitalize their banks, creating firebreaks between cross-border sovereign debt exposure dominates their thoughts — which explains why the Europeans belatedly have seized upon the IMF’s original 200 billion-euro figure. The Europeans are hoping that if they can strike a series of deals that restructure a percentage of the debt owed by the Continent’s most financially strapped states, they will be able to halt the sovereign debt crisis in its tracks.

This plan is flawed. The figure, 200 billion euros, will not cover reasonable restructurings. The 50 percent writedowns or “haircuts” for Greece under discussion as part of a revised Greek bailout — likely to be announced at the end of the upcoming Oct. 23 EU summit — would absorb more than half of that 200 billion euros. A mere 8 percent haircut on Italian debt would absorb the remainder.

Moreover, Europe’s banking problems stretch far beyond sovereign debt. Before one can understand just how deep those problems go, we must examine the role European banks play in European society.

The Centrality of European Banking

Several differences between the European and American banking sectors exist. By far the most critical difference is that European banks are much more central to the functioning of European economies than American banks are to the U.S. economy. The reason is rooted in the geography of capital.

Maritime transport is cheaper than land transport by at least an order of magnitude once the costs of constructing road and rail infrastructure is factored in. Therefore, maritime economies will always have surplus capital compared to their land transport-based equivalents. Managing such excess capital requires banks, and so nearly all of the world’s banking centers form at points on navigable rivers where capital richness is at its most extreme. For example, New York is where the Hudson meets the Atlantic Octen, Chicago is at the southernmost extremity of the Great Lakes network, Geneva is near the head of navigation of the Rhone, and Vienna is located where the Danube breaks through the Alps-Carpathian gap.

Unity differentiates the U.S. and European banking system. The American maritime network comprises the interconnected rivers of the Greater Mississippi Basin linked into the Intracoastal Waterway, which allows for easy transport from the U.S.-Mexico border on the Gulf of Mexico all the way to the Chesapeake Bay. Europe’s maritime network is neither interlinked nor evenly shared. Northern Europe is blessed with a dozen easily navigable rivers, but none of the major rivers interconnect; each river, and thus each nation, has its own financial capital. The Danube, Europe’s longest river, drains in the opposite direction but cuts through mountains twice in doing so. Some European states have multiple navigable rivers: France and Germany each have three major ones. Arid and rugged Spain and Greece, in contrast, have none.

The unity of the American transport system means that all of its banks are interlinked, and so there is a need for a single regulatory structure. The disunity of European geography generates not only competing nationalities but also competing banking systems.

Moreover, Americans are used to far-flung and impersonal capital funding their activities (such as a bank in New York funding a project in Nebraska) because of the network’s large and singular nature. Not so in Europe. There, regional competition has enshrined banks as tools of state planning. French capital is used for French projects and other sources of capital are viewed with suspicion. Consequently, Americans only use bank loans to fund 31 percent of total private credit, with bond issuances (18 percent) and stock markets (51 percent) making up the balance. In the eurozone roughly 80 percent of private credit is bank-sourced. And instead of the United States’ single central bank, single bank guarantor and fiscal authority, Europe has dozens. Banking regulation has been expressly omitted from all European treaties to this point, instead remaining a national prerogative.

As a starting point, therefore, it must be understood that European banks are more central to the functioning of the European system than American banks are to the American system. And any problems that might erupt in the world of European banks will face a far more complicated restitution effort cluttered with overlapping, conflicting authorities colored by national biases.

Demographic Limitations

European banks also face less long-term growth. The largest piece of consumer spending in any economy is done by people in their 20s and 30s. This cohort is going to college, raising children and buying houses and cars. Yet people in their 20s and 30s are the weakest in terms of earning potential. High consumption plus low earning leads invariably to borrowing, and borrowing is banks’ mainstay. In the 1990s and 2000s much of Europe enjoyed a bulge in its population structure in precisely this young demographic — particularly in Southern European states — generating a great deal of economic activity, and from it a great deal of business for Europe’s banks.

But now, this demographic has grown up. Their earning potential has increased, while their big surge of demand is largely over, sharply curtailing their need for borrowing. In Spain and Greece, the younger end of population bulge is now 30; in Italy and France it is now 35; in Austria, Germany and the Netherlands it is 40; and in Belgium it is 45. Consumer borrowing in general and mortgage activity in particular probably have peaked. The small sizes of the replacement generations suggests there will be no recoveries within the next few decades. (Children born today will not hit their prime consumptive age for another 20 to 30 years.) With the total value of new consumer loans likely to stagnate (and more likely, decline) moving forward, if anything there are now too many European banks competing for a shrinking pool of consumer loans. Europe is thus not likely to be able to grow out of any banking problems it experiences. The one potential exception is in Central Europe, where the population bulges are on average 15 years younger than in Western Europe. The younger edge of the Polish bulge, for example, is only 25. In time, these states may be able to grow out of their problems. Either way, the most lucrative years for Western European banking are over.

Special Series (Part 1): Assessing the Damage of the European Banking Crisis

(click here to enlarge image)

Too Much Credit

Germany has extremely high capital accumulation and extremely competent economic management. One of the many results of this pairing is extremely inexpensive capital costs. When Germans — governments, corporations or individuals — borrow money, it is accepted as a near-fact that they will pay back what they owe, on time and in full. Reflecting the high supply and low risk, German borrowing rates for governments and corporations have long been in the low to mid single digits.

The further you move from Germany the less this pattern holds. Capital availability shrivels, management falters and the attitude toward contract law (or at least as defined by the Germans) becomes far less respectful. As such, Europe’s peripheral economies — most notably its smaller peripheral economies — have normally faced higher borrowing costs. Mortgage rates in Ireland stood near 20 percent less than a generation ago. Government borrowing rates in Greece have in the past topped 30 percent.

With that sort of difference, it is not difficult to see why many European states have striven for inclusion in first, the European Union, and second, the eurozone. Each step of the European integration process has brought them closer in financial terms to the ultra-low credit costs of Germany. The closer the German association, the greater the implicit belief that German financial resources would help them in a crisis (despite the fact that EU treaties explicitly rejected this).

The dawn of the eurozone era prompted lenders and investors to take this association to an extreme. Association with Germany shifted from lower lending rates to identical lending rates. The Greek government could borrow at rates that only Germany could demand in the past. Irish borrowers were able to qualify for 130 percent mortgages at 4 percent. Compounding matters, the collapse of borrowing costs and the explosion of loan activity occurred at the same time as Southern Europe’s demographic-driven consumption boom. It was the perfect storm for explosive banking growth, and it laid the groundwork for a financial collapse of unprecedented proportions.

Drastic increases in government debt are the most publicly visible outcome, but it is far from the only one. The least visible outcome is that extraordinarily cheap credit to consumers triggers an explosion in demand that local businesses cannot hope to fill. The result is unprecedented trade deficits as money borrowed from foreigners is used to purchase foreign goods. Cyprus, Greece, Portugal, Bulgaria, Romania, Lithuania, Estonia and Spain — all states whose cheap labor when compared to the Western European core should encourage them to be massive exporters — instead have run chronic trade deficits in excess of 7 percent of GDP. Most routinely broke 10 percent. Such developments do not directly harm the banks, but as credit costs return to more rational levels — and in the ongoing debt crisis borrowing costs for most of the younger EU members have tripled and more — consumption is coming to a halt. In the few European markets that demographically may be able to generate consumption-based growth in the years ahead, credit is drying up.

Foreign Currency Risk

Much of this lending into weaker locations was carried out in foreign currencies. For the three states that successfully made the early sprint into the eurozone — Estonia, Slovenia and Slovakia — this was a nonfactor. For those that did not make the early leap into the eurozone it was a wonderful way to get something for nothing. Their association with the European Union resulted in the steady strengthening of their currencies. Since 2004, the Polish, Czech, Romanian and Hungarian currencies gained roughly one-third versus the euro, driving down the monthly payments on any euro-denominated loan. That inverted, however, in the 2008 financial crisis. Then, every regional currency but the Czech koruna (and Bulgarian lev, which is pegged to the euro) gave back their gains. For Central Europeans who had taken out loans when their currencies were at their highs, payments ballooned. More than 10 percent of Polish and Hungarian mortgages are now delinquent, largely because of currency movements.

Special Series (Part 1): Assessing the Damage of the European Banking Crisis

New Banking ‘Empires’

The cheap credit of the eurozone’s first decade allowed several peripheral European states a rare opportunity to expand their network of influence, even if they were not in the eurozone themselves. They could borrow money from core European banking centers like Germany, France, Switzerland and the Netherlands and pass that money on to previously credit-starved markets. In most cases, such credit was offered without the full cost-increase that these states’ poorer and smaller statures would have justified. After all, these would-be financial centers had to undercut the more established European financial centers if they were to gain meaningful market share. This pushed far more credit into Central Europe than the region otherwise would have attracted, speeding up the development process at the cost of poor underwriting and a proliferation of questionable lending practices. The most enthusiastic crafters of new banking empires have been Sweden, Austria, Spain and Greece.

Special Series (Part 1): Assessing the Damage of the European Banking Crisis

STRATFOR

(click here to enlarge image)

  • Sweden has the happiest record of any of the states that engaged in such expansionary lending. Being one of the richest countries in Europe and yet not being a member of the eurozone, Sweden did not experience a credit expansion nearly as much as other states, instead it served as a conduit for that credit — augmented by its own — to its former imperial territories. Alone among the forgers of new banking empires, Sweden’s superior financial stability has allowed it (so far) to continue financial activities in its target markets — Estonia, Latvia, Lithuania and Denmark — despite the ongoing financial crisis. But instead of lending, Swedish banks are now purchasing regional banks outright. Swedish command of the Danish banking sector, for example, has increased by 80 percent since the crisis. Through its new local subsidiaries, Swedish banks now lend more in per capita terms to Danes than they do to their own citizens, and there is no longer a domestic Estonian banking sector — it is 97 percent Swedish-owned. Such expansionary activity is likely to continue so long as Sweden can sustain it, as there is a geopolitical angle to Sweden’s effort: It is seeking to deepen its regional influence not only for economic purposes, but also to mitigate the rising role of its longtime competitor, Russia.
  • Austria has tapped not only eurozone credit but also taken advantage of favorable carry trades to serve as a conduit for Swiss franc credit into Central Europe. Just as Sweden is using foreign capital to re-create its historic sphere of influence in the Baltic, Austria is doing the same in the lands of the former Austro-Hungarian Empire. Now, the majority of all mortgages in Poland, Hungary, Croatia and Romania — and a sizable minority in Austria — are denominated in foreign currencies, courtesy of Austrian banking activity. With the Swiss franc now locked in at record highs, many of these mortgages are not serviceable. The Hungarian government has felt forced to abrogate the terms of many of these loans, knowing that the Austrian banks are now so overexposed to Central Europe that they have no choice but to take the losses. As the financial crisis has continued apace, Austria has found itself with more exposure, fewer domestic resources and greater vulnerability to external forces than Sweden. So instead of being able to take advantage of regional weakness, it is finding itself losing market share both at home and in its would-be financial empire to Russia.
  • Spain’s banking empire isn’t even in Europe. Spanish firms BBVA-Compass and Santander have used the cheap euro credit to massively expand credit to Latin America. And Spain’s expansion took a somewhat novel route: The combination of cheap lending at home and in Latin America encouraged more than a million Latin American Spanish speakers to relocate to Spain and gain citizenship. To smooth the naturalization process, Madrid mandated that the new Spaniards be granted top-notch credit, a factor that only added to an already hyperactive construction sector. Spanish banks’ nearly 500 billion-euro exposure to Latin America is, for now, holding; only time will tell its impact to Spain’s bottom line.
  • The Greek government used its access to cheap credit to build up debt levels that are now the subject of much discussion across Europe. But much less is made of its banks, who encouraged consumers both at home and across the southern Balkans to increase their own debt levels. Being the least experienced of the four would-be financial centers, Greek banks offered the steepest credit breaks to the countries with the weakest repayment potential. Like Spain, Greece also did not make EU membership a condition for lending; vast volumes accordingly were fed into Macedonia, Serbia and even Albania.
Housing Bubbles

Large volumes of suddenly cheap credit made available to eager consumers obviously generated a series of sizable housing bubbles.

Spain’s tapping of European credit markets also underwrote the largest housing boom in Europe. More construction projects have been completed in Spain in recent years than in Germany, France, Italy and the United Kingdom combined. The construction sector — both commercial and residential — has now collapsed and there are about 1 million homes now sitting vacant in a country with just 16.5 million families. Outstanding loans to various real estate interests total some 400 billion euros, all backed by collateral that has lost 20 percent of its value since the housing market peaked.

In relative terms, Ireland actually did more than Spain. At its peak, nearly 10 percent of Irish gross national product was dependent upon construction, with 70 percent of that purely from residences. Half of the mortgages extended during the Irish real estate boom were made at the peak of the market between 2006 and 2008. That sector remains in the midst of a fairly rapid collapse. Residential home prices have reduced by half since their peak in 2007 and are showing few signs of stabilizing. The Irish government hopes that with their eurozone bailout package, their banking sector will become functional again by 2020. Until then, Ireland in effect has no banking sector and has been financially sequestered from the rest of the eurozone.

Two other European states — the United Kingdom and Sweden — have both experienced massive increases in home price growth, and both suffered from price corrections due to the 2008 financial crisis. But prices in both markets have recovered smartly, with Sweden even bouncing back above its pre-crisis highs. Sweden, in fact, is still experiencing a massive housing boom, with annual mortgage credit still expanding at a 30 percent annualized rate.

Next: Looking Ahead in the European Banking Crisis

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Read more: Special Series (Part 1): Assessing the Damage of the European Banking Crisis | STRATFOR

Gadhafi’s Death in Perspective

October 20, 2011

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Gadhafi Coverage

Rebel fighters killed former Libyan leader Moammar Gadhafi on Oct. 20 outside the town of Sirte. His body was then brought back to Misurata, where it was filmed being dragged through the streets. Several close aides, including family members, have been reported killed or captured as well.
Gadhafi’s death is symbolically important for the rebels, but the fall of Sirte is even more significant for the effect it will have on the future stability of Libya. With the final holdout of the pro-Gadhafi resistance overtaken, the National Transitional Council (NTC) can now move to form a transitional government. But multiple armed groups across the country will demand a significant stake in that government, which will have serious implications for the future unity of the people who heretofore were referred as the Libyan opposition.
Though the Benghazi-based NTC has been widely recognized in the international community as the sole legitimate representative of the Libyan people, this has long since ceased to be the case in the eyes of many Libyans. The NTC is one of several political forces in the country. Since the rebel forces entered Tripoli on Aug. 21, there has been a steady increase of armed groups hailing from places such as Misurata, Zentan, Tripoli and even eastern Libya itself that have questioned the authority of leading NTC members.
These groups have been occupying different parts of the capital for two months now, despite calls by the NTC (and some of the groups themselves) to vacate. They also have been participating in the sieges of cities in which pro-Gadhafi remnants continued to hold out after the fall of Tripoli. Throughout this period, the NTC has repeatedly delayed the formation of a transitional government, in recent weeks citing the ongoing fight against Gadhafi as the reason. NTC leaders said that once the war was finally over, the official “liberation” of Libya would be declared and a transitional government would be formed. The fall of Sirte means this moment is at hand.
With so many armed groups operating in Tripoli and elsewhere in Libya, a peaceful resolution to the question of who should take power is unlikely. The main groupings come from Benghazi, Misurata, Zentan and Tripoli, but there are other, smaller militias as well that will want to ensure they are represented in the new Libya. The divide is not simply geographic but also exists between Islamists and secularists as well as between Berbers and Arabs.
The shape of the new Libya is highly uncertain, but what is clear is that the NTC is not going to simply take control where Gadhafi left off. Certain members of its leadership may play a key role in any transitional government, but not without serious compromises or, even more likely, violence occurring in the process. Pro-Gadhafi tribal elements in the last region to fall to rebel fighters also will be a potential source of violence in the coming months, as they will fight to make sure they are not left out of the future power structure.

View more of our coverage on Gadhafi »

 

Borowitz Report – Breaking News: Gaddafi Killed

October 20, 2011

Gaddafi Killed; Mauled by Tiger in Ohio

Cat to Receive Presidential Medal of Freedom

ZANESVILLE (The Borowitz Report) – A grim chapter in the history of Libya came to a close today when fugitive dictator Muammar Gaddafi was mauled to death by an escaped tiger in Zanesville, Ohio.
At the Central Intelligence Agency, a spokesman stopped short of speculating how the Libyan strongman somehow made his way to the remote Ohio town, saying only, “We didn’t plan on Gaddafi being taken out this way, but a win’s a win.”
The tiger, a longtime Zanesville resident, is being flown to the White House where she will receive the Presidential Medal of Honor.
In a brief statement, President Barack Obama said, “Under my watch, we’ve killed both Osama bin Laden and Muammar Gaddafi. That really should be enough to reelect me, especially if I’m running against a pizza man.”
Meanwhile, on the campaign trail, Rep. Michele Bachmann (R-Minn) offered this comment on Gaddafi’s death: “Muammar Gaddafi will no longer live to terrorize Asia.” Read More Here
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Andy's Upcoming Events

Upcoming Events

October 22, 2011 at 04:15 PM

Austin!

Andy performs at the Texas Book Festival and signs copies of his new book, The 50 Funniest American Writers. For more information, click here.

Location:
First United Methodist Church, 1201 Lavaca St.

November 19, 2011 at

Miami!

Andy will do a free show at the Miami Book Fair and sign copies of his new book, The 50 Funniest American Writers.

Location:
TBA

December 03, 2011 at 07:30 PM

Rhinebeck, NY!

Andy will perform and sign copies of his new book, The 50 Funniest American Writers. RSVP is required for this free event. RSVP to rsvp@oblongbooks.com or call 845-876-0500.

Location:
Oblong Books & Music, 6422 Montgomery, Rhinebeck, NY
For tickets go to Oblong Books

April 03, 2012 at 06:00 PM

Mark Twain’s House!

Andy will perform a special show at the Mark Twain Boyhood Home and Museum in Hannibal, MO. Afterwards he’ll be signing copies of his new book, The 50 Funniest American Writers.

Location:
120 N. Main St., Hannibal, MO 63401
For tickets go to Andy Borowitz at Mark Twain’s House

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