Countries which have said they cannot reach such deep 2020 goals, led by the United States, could contribute to a new pact in other ways

TO BE NOTED: From Reuters:

"France, Germany urge more flexible climate pact

Mon May 25, 2009 1:36pm EDT

By Alister Doyle, Environment Correspondent

PARIS (Reuters) - France and Germany suggested on Monday that rich nations should collectively guarantee deep cuts in greenhouse gases by 2020 while giving flexibility to laggards such as the United States to catch up later.

France said the idea, floated at talks among 17 top greenhouse gas emitters including China, United States, Russia and India, could help toward a new U.N. climate treaty due to be agreed at a meeting in Copenhagen in December.

"There can be more flexibility among us," French Environment Minister Jean-Louis Borloo told a news conference on the first day of the two-day talks among ministers, called by U.S. President Barack Obama to help work out a new climate treaty.

He said France and Germany reckoned that developed nations could collectively sign up to cut their overall emissions by 25 to 40 percent below 1990 levels by 2020 -- the level outlined by a panel of U.N. scientists to avoid the worst of global warming.

"There may be some who act faster and others who do more later," he said. A collective goal would undercut criticisms by developing nations, led by China and India, that the rich are not serious in fighting climate change.

Countries which have said they cannot reach such deep 2020 goals, led by the United States, could contribute to a new pact in other ways, for instance via a bigger share of financing or green technologies for developing nations, Borloo said.

"There may be constraints on such and such a developed nation -- but we must reach this 2020 objective of 25 to 40 percent," he said. Nations meeting in Paris emit 80 percent of world greenhouse gases, mainly from burning fossil fuels.

HEATWAVES

"We have to find a compromise," he said, noting scientists' forecasts that global warming would bring more heatwaves, rising sea levels, extinctions, floods and droughts. Rich nations might need a meeting to discuss the idea, he said.

Obama has promised to cut U.S. emissions back to 1990 levels by 2020, a cut of 14 percent from 2007 levels. A bill approved by a key congressional panel last week would cut U.S. emissions by 17 percent from 2005 levels by 2020.

By contrast, the European Union has promised deeper cuts, of 20 percent below 1990 levels by 2020, and by 30 percent if other rich nations follow suit

U.N. Secretary-General Ban Ki-moon said on Sunday that he wanted Washington to do more, saying it was lagging the European Union in promises to fight global warming. Obama's plan are for far tougher curbs than by his predecessor, George W. Bush.

"I don't think it's correct to say that Europe is proposing a lot and the United States little," Todd Stern, U.S. Special Envoy for Climate Change, told Tuesday's edition of the French daily Le Monde.

"If you look at things from the point of view of the progress that each nation will have to make to reach its objectives, the U.S. level of effort is probably equal, or superior, to that of Europe," Stern said.

Analysts say the Major Economies Forum (MEF) talks at the French Foreign Ministry, the second of three preparatory meetings before a summit in Italy in July, are a chance to air differences away from the public gaze.

"The U.N. negotiations have somewhat fallen back to North-South finger-pointing," said Jake Schmidt of the Natural Resources Defense Council in Washington. "The MEF is a crucial place where you can make progress on some of the difficult issues out of the limelight."

(Editing by Charles Dick)"

"Our country must avoid entering a spiral of violence," he said in reaction to the opinion poll, adding that bossnappings "cannot be tolerated."

TO BE NOTED: From Reuters:

"Almost half of French approve of locking up bosses

Tue Apr 7, 2009 10:47am EDT

PARIS (Reuters) - Almost half of French people believe it is acceptable for workers facing layoffs to lock up their bosses, according to an opinion poll published on Tuesday.

Staff at French plants run by Sony, 3M and Caterpillar have held managers inside the factories overnight, in three separate incidents, to demand better layoff terms -- a new form of labor action dubbed "bossnapping" by the media.

A poll by the CSA institute for Le Parisien newspaper found 50 percent of French people surveyed disapproved of such acts, but 45 percent thought they were acceptable.

"They are not in the majority ... but 45 percent is an enormous percentage and it demonstrates the extent of exasperation among the public at this time of economic crisis," Le Parisien said.

On March 31, billionaire Francois-Henri Pinault was trapped in a taxi in Paris for an hour by staff from his PPR luxury and retail group who were angry about layoffs. Riot police intervened to free him.

Le Parisien found that 56 percent of blue-collar workers polled approved of bossnappings while 41 percent disapproved. Among white-collar workers, 59 percent were against the practice while 40 percent thought it was acceptable.

"These hostage takings, we know how it starts but no one knows how far it can go," said Xavier Bertrand, a former labor minister now secretary-general of the ruling UMP party.

"Our country must avoid entering a spiral of violence," he said in reaction to the opinion poll, adding that bossnappings "cannot be tolerated."

(Reporting by Estelle Shirbon; Editing by Farah Master)"

such as frequent coups and hyperactive volcanoes -- add secession and, um, war with France?

TO BE NOTED: From the UN:

"War in the Northern Mozambique Channel? John Boonstra - March 30, 2009 - 10:31am

• Africa
• Diplomacy

To the list of major concerns for the 798,000 inhabitants of the small Indian Ocean archipelago of Comoros -- such as frequent coups and hyperactive volcanoes -- add secession and, um, war with France? An independent country since 1975, Comoros has co-existed awkwardly with a couple of islands in the chain, together known as Mayotte, which has been "politically separate" since independence. Now, as of yesterday, with the endorsement of 95% of Mayotte voters, the islands officially constitute a departement outre-mer of France. In response, Comoros' vice president has, naturally, suggested that this is tantamount to a declaration of war.

While France is probably not about to send its destroyers down into the Indian Ocean, it is interesting to note that, in the past, UN attempts to grant sovereignty of Mayotte to Comoros were stymied by the French Security Council veto. This is not necessarily neo-colonialism, though, as indicated by the heavy support by Mayotte's population for incorporation into the metropole. Economic benefits abound, but there also seems to be a somewhat odd sense of national belonging, somewhat disturbingly expressed by this Mayotte legislator quoted by Reuters: "We may be black, poor and Muslim, but we have been French longer than Nice." Interesting what the island assumes that the French think of "Frenchness."

(image of a Mayotte sunset, from flickr user gunner.romain under a Creative Commons license)"

“In the end, either banks will have to be nationalized or have their bad loans split off into another institution."

From the NY Times:

"In Europe, New Efforts to Bolster Lending

By DAVID JOLLY

PARIS — After a first round of costly bank bailouts and stimulus programs came up short, governments in Europe and the United States are moving more forcefully to assure that bailed-out banks lend more money( MORE LIKE DON'T NEED TO HOARD MONEY ) to offset the recession that has engulfed both continents.

On Monday, a day after officials of the incoming Obama administration promised to take steps to force banks to lend, Britain outlined details of a new £100 billion, or $147.5 billion, plan to limit banks’ losses from troubled assets in exchange for their pledge to increase the flow of credit.

“In return for access to any government support, there will have to be an increase in lending, and that will be legally binding,” Gordon Brown, the British prime minister, said.

As if to illustrate the depths of the problem, the Royal Bank of Scotland warned on Monday that it faced losses of up to £28 billion or $41 billion for 2008, a record for any British company. The bank’s already depressed shares fell nearly 67 percent, touching off a rout in European financial stocks that could extend to United States markets when they reopen on Tuesday.

The second round of efforts in Britain and Europe to jump-start lending comes as the region girds for a more painful recession than expected. The European Commission warned on Monday that the 27-nation European Union faced a “deep and protracted recession” that would shrink the economy by 1.8 percent in 2009 and cut 3.5 million jobs across the bloc.

Adding to the sense of urgency, Standard and Poor’s ratings agency downgraded Spain’s sovereign debt from its AAA rating. Greece’s sovereign debt was cut on Wednesday, rekindling worries about what might happen to the euro zone as a whole if a member were to default on its public debt.

The bleak prospects have prompted leaders to try other ways of urging banks to lend as it becomes more clear that the bailout measures pledged by governments at the height of the financial crisis in autumn have not flushed away the bad loans that still clog the system( THEY ARE STILL BEING CALLED ). If anything, the problems are set to worsen as the downturn accelerates( YES ).

President Nicolas Sarkozy of France is to meet on Tuesday evening with French bankers to press them to lend more money to French businesses. “The banks must understand that the times have changed,” Christine Lagarde, the finance minister, told a business daily, Les Échos, on Monday. The French plan would require banks receiving new capital injections to make “precise commitments,” including giving up bonuses this year, she said.

Late Sunday, Denmark announced an $18 billion aid plan for its banks, saying it would inject the funds on the condition that the recipients increase lending.

In Germany, Deutsche Bank’s chief executive, Josef Ackermann, who is also chairman of the Institute of International Finance, an organization of the world’s largest financial institutions, suggested last week that the creation of so-called bad banks might be the way forward( A POOR WAY, BUT IT IS A WAY. ).

In a bad-bank arrangement, governments would buy up scorched( ANOTHER NEW TERM? ) assets, said George Magnus, senior economic adviser at UBS Investment Bank in London. That contrasts with the method now being used in the United States and Britain, where troubled assets remain on the balance sheet, but losses beyond some limit are insured by the government.( COULD ALSO WORK. THE GUARANTEE IS THE IMPORTANT THING TO ENDING THE CALLING RUN. )

“There is no ‘right’ way and both schemes have their merits and drawbacks( A FAIR POINT ) under given and local circumstances,” Mr. Magnus wrote in a research note. He said the bad-bank plan might be more suited to the United States, while Britain might be able to manage with its plan for an insurance program because it has far fewer banks.

Members of the incoming Obama administration are considering proposals that include buying up bad assets, a return to the original vision of the $700 billion Troubled Asset Relief Program.

“The focus isn’t going to be on the needs of banks,” Mr. Obama’s chief economic adviser, Lawrence H. Summers, said on the CBS program “Face the Nation.” “It’s going to be on the needs of the economy for credit.”

Simon Adamson, a banking analyst at CreditSights, an independent research firm in London, said he thought that Europe was also “edging toward the creation of bad banks.”

Under Britain’s latest bank bailout, its Treasury will “protect financial institutions against exposure to exceptional future credit losses on certain portfolios of assets” in return for a fee. Participating institutions will take the initial losses, with the Treasury bearing about 90 percent of the rest( YIKES ).

Britain’s central bank could buy up to £50 billion worth of “high-quality assets” from banks, giving it more monetary policy tools after it cut its benchmark interest rate to a record of 1.5 percent this month. The government is also extending measures to increase liquidity, including a £250 billion program to let banks to issue government-backed( THE GUARANTEE IS THE IMPORTANT THING ) bonds. The latest steps would cost taxpayers an additional £100 billion on top of the £37 billion plan announced in October and a £20 billion stimulus plan announced in November.

Mr. Brown said he was angry at Royal Bank, whose losses include as much as £20 billion of good-will write-downs from the acquisition of a portion of another bank. “Almost all their losses are in the subprime markets in America and related to the acquisition of the bank ABN Amro,” he said. “And these are irresponsible( NEGLIGENT ) risks, which were taken by a bank with people’s money in the United Kingdom.”

European bank stocks fell sharply on Monday on fears that more pain, including the wiping out of some shareholders, might lie ahead( TRUE ). Last week, the Irish government nationalized the Anglo Irish Bank, rendering equity stakes worthless.

Peter Dixon, a global equities economist in London for Commerzbank, said the latest British rescue plans were “a step in the right direction.” But, he added, “In the end, either banks will have to be nationalized or have their bad loans split off into another institution. That’s the only way they will be clear( GUARANTEED. ONLY THE GOVERNMENT CAN DO THIS. ) about their capital positions( YEP ).”

Carter Dougherty contributed reporting from Frankfurt."

"assaults against Jews and arson attacks on Jewish congregations in France, Sweden and Britain."

Jew Hatred doesn't really need an excuse, but this is a consequence of the Jew Hatred spread by Hamas and similar groups, and why I believe that it needs to stop, and that the world should condemn it and all Jew Hatred. I also believe that Jew Hatred is a reason that the Israeli-Palestinian conflict generates world interest, while the Congo generates world indifference. People who hate Jews love to express their feelings through criticism of Israel. This is just a fact. It doesn't make all criticism of Israel Jew Hatred, but it is a factor in many people's motives, and this should be acknowledged:

"Gaza Conflict Spreads to Europe With Jews Attacked

By THE ASSOCIATED PRESS

Filed at 9:51 a.m. ET

PARIS (AP) -- Signs are mounting that the conflict in Gaza is starting to spill over into violence in Europe's towns and cities, with assaults against Jews and arson attacks on Jewish congregations in France, Sweden and Britain.

Assailants rammed a burning car into the gates of a synagogue in Toulouse, in southwest France, on Monday night. A Jewish congregation in Helsingborg, in southern Sweden, also was attacked Monday night by someone who ''broke a window and threw in something that was burning,'' said police spokesman Leif Nilsson. Neighbors alerted rescue services before the fire took hold.

Someone also started a blaze outside the premises last week. And on Sunday slogans including ''murderers ... You broke the cease-fire'' and ''don't subject Palestine to ethnic cleansing'' were daubed on Israel's embassy in Stockholm.

In Denmark, a 27-year-old Dane born in Lebanon of Palestinian parents is alleged to have injured two young Israelis last week, opening fire with a handgun in a shooting that police suspect could be linked to the Gaza crisis.

France has Western Europe's largest Jewish and Muslim communities and a history of anti-Semitic violence flaring when tensions in the Middle East are high. In 2002, some 2,300 Jews left France for Israel because they felt unsafe.

President Nicolas Sarkozy warned in a statement Tuesday that France would not tolerate violence linked to the Gaza crisis. A day earlier, his interior minister said she was concerned about the prospect of contagion and met with the heads of the two main Muslim and Jewish groups and police officials to stress the need to ''preserve national unity.''

Damage to the synagogue in Toulouse was limited to a blackened gate, and there were no injuries even though a rabbi was giving a course to adults inside, authorities said. They said unlighted gasoline bombs were also found in a car nearby and in the synagogue's yard. A local Jewish leader, Armand Partouche, said he believed the assailants had planned to torch the synagogue, but fled when the building's alarm went off.

''It could have been very, very serious,'' Partouche said in a telephone interview. ''There were people inside; there could have been deaths.''

He said Jewish leaders are asking Toulouse authorities for reinforced security for the city's synagogues.

''We really fear that anti-Semitism will spring up again( IT DOESN'T TAKE MUCH ) and that the current conflict will be transposed to our beautiful French republic,'' he said.

In Britain, the Community Security Trust, a Jewish defense group, said it had seen a rise in anti-Semitic incidents since the start of Israel's offensive against Gaza. The group said it had recorded 20-25 incidents across the country in the past week that it believed were connected with Gaza, including an arson attempt on a synagogue in north London on Sunday.

London police are investigating the attack, in which suspects splashed flammable liquid on the door and set it on fire.

Community Security Trust spokesman Mark Gardner said that in another incident last week a gang of 15-20 youths walked along the main street in Golders Green, a largely Jewish neighborhood in north London, shouting ''Jew'' and ''Free Palestine'' at passers-by.

''It could get worse,'' Gardner said. ''We tend to see these things happen in waves.''

The government in Belgium on Tuesday ordered police in Antwerp and Brussels to be on increased alert after recent pro-Palestinian protests ended in violence and dozens of arrests. Police said burning rags were shoved through the mailbox of a Jewish home in Antwerp last weekend. Damage was limited and no arrests were made.

In the Danish shooting, one Israeli man was shot in the arm and another in the leg as they were selling hair care products in a shopping mall. Eli Ruvio, who owns the company that operated the stands, said his employees have been harassed by Muslim youths since they set up three kiosks in the shopping center in August.

''They kept cursing and shouting at us,'' Ruvio told The Associated Press. He added that the Muslim youths also threw mud and firecrackers at the employees and spat at them.

Ruvio recalled an episode Dec. 27 when some of the youths shouted ''slaughter all the Jews.''

''I told my employees not to speak in Hebrew and lie about where they come from, they should say there were from Spain or somewhere else. If people ask you where you are from, never say you're from Israel,'' he said."

Enough said.

Without steadfast support from France, which armed the genocidal regime and helped train its killers, the slaughter would have been impossible.

A good post on the Guardian:

"Stephen Kinzer

• 
  
• guardian.co.uk, Friday 2 January 2009 19.00 GMT
• Article history

An international tribunal has sentenced the mastermind of the 1994 Rwandan genocide, Colonel Theoneste Bagosora, to life imprisonment after convicting him of "genocide and crimes against humanity and war crimes". The verdict, though, is at best a mixed victory for the cause of global justice.

Bagosora richly deserves his sentence. Rwandans themselves bear the central guilt for their tragedy, and he was among the guiltiest. Shortly before the slaughter began, he announced that he was preparing a "second apocalypse". Tutsi-led rebels were close to overthrowing the regime he helped run, and along with a couple of dozen like-minded comrades, he decided that its best hope was to kill every Tutsi in the country. They almost succeeded, organising the murder of as many as one million people or more in a 100-day period.

As punishment, Bagosora will likely spend the rest of his days in material conditions far better than those enjoyed by 95% of Rwandans. He will be deprived of his freedom, but the world's taxpayers, through the UN, will assure that he has a comfortable cell, three meals a day and the world's finest medical care.

One thing will be missing, though. In the modern age, prisons that hold war criminals, political murderers and other terrorists are populated mostly by brutes like Bagosora – people easily portrayed as thugs from thuggish places. So the newly convicted genocide mastermind will not have the chance to exchange thoughts with his more genteel enablers.

In a just world, Bagosora might have French company in his cell block. Without steadfast support from France, which armed the genocidal regime and helped train its killers, the slaughter would have been impossible. So it seems only fair that a few French aristocrats be held responsible. One candidate would be former foreign minister Alain Juppe, who built a framework within which the slaughter could be carried out by telling the world that it was not genocide but "tribal war" in which opposing groups were equally guilty. There could also be room in the block for others who shielded the Rwandan regime as it killed, among them Edouard Balladur, Dominique de Villepin and Hubert Vedrine.( A GOOD POINT )

No one ever took more delight in these men's company than the lifelong Francophone Boutros Boutros-Ghali, so it would be a shame to leave him off the cellblock. As UN secretary-general in 1994, Boutros-Ghali made sure no security council members ever saw the anguished cables that were pouring into New York from the desperate UN commander in Rwanda, General Romeo Dallaire. Those cables made clear that the killing was no eruption of "tribal war", but the work of Bagosora and a clique of other fanatics who might easily have been intimidated with even a modest show of force.

While the genocide unfolded, Boutros-Ghali was on an extended tour of Europe. To make sure Dallaire's damning cables remained hidden, he relied on his trusted deputy, Kofi Annan, who was then head of UN peacekeeping operations. If there is room for Boutros-Ghali and his French friends on Bagosora's block, there should also be room for Annan.( WOW )

No international gathering these days is complete without Bill Clinton, and by some standards he too could qualify for a cell on Bagosora's block. During the 100 days of genocide in Rwanda, Clinton never even convened a meeting to discuss it because he knew that the facts were so awful that if he confronted them, he would be compelled to act. Later he said he had not known what was happening in Rwanda. General Dallaire called him a liar, and Philippe Galliard, who ran Red Cross operations in Rwanda during the genocide, agreed. "Everybody knew, every day, live, what was happening," he said after Clinton's whopper.( A DISGRACE )

Just as Boutros-Ghali had an ambitious underling who was salivating for the big job, and who knew that demanding action to stop genocide in Rwanda would ruin his chances, so did Clinton. His was Madeleine Albright. As America's ambassador to the UN, she worked tirelessly to assure that the peacekeeping force was kept too small and toothless to stop the killing. Later she helped block a plan to send UN police to disarm the hundreds of thousands of Rwandan genocidaires who had fled to camps in eastern Congo – a piece of work that helped create today's Congolese hell.( DISGRACEFUL )

Justice works slowly, and none more slowly than the international kind. The International Criminal Tribunal for Rwanda has spent more than a billion dollars since its creation in 1995, but has completed only 40 cases. All the defendants have been Rwandans, as undoubtedly will be all those convicted in the future. The tribunal's motto is "never again". A better one would from an old Bob Dylan song: The executioner's face is always well hidden."

And this has led to the Congo.

"It is becoming easier and easier to find signs of trade tensions and potential for friction."

Now Pettis:

"The Ox approaches( WHOSE WILL GET GORED?) January 2nd, 2009 by Michael | Filed under Exports and imports, Trade protection.

It is becoming easier and easier to find signs of trade tensions and potential for friction( UNWINDING THE SAVER/SPENDER SYMBIOSIS WILL INEVITABLY CREATE BOTH ). On Tuesday’s post I already mentioned the fact that South Korea had shifted from deficits to surpluses, and that Vietnam had devalued the dong as a reaction to falling exports. Yesterday’s Financial Times has the kind of article I expect to see a lot more of in the coming months:

Western countries should close their markets to sales of Chinese trains because China’s domestic market is closing to outside suppliers, says the head of one of the world’s largest rolling stock builders. In a Financial Times interview, Philippe Mellier, chief executive of Paris-based Alstom Transport, also claimed that Chinese companies were offering trains for export using technology derived from western suppliers. Such technology is usually supplied on condition it not be used outside China. The comments by Mr Mellier, whose company is the world’s number two trainmaker, underline the growing tension in the world’s train-building industry over China’s role.

A recent Washington Post article listed a number of trade-related measures:

Only a few weeks after world leaders vowed at a Washington summit to reject trade protectionism and adhere to free-market principles( THEY HAVEN'T BEEN FROM THE BEGINNING ) as they combat the global financial crisis, a host of nations are already breaking that promise.

Moving to shield battered domestic manufacturers from foreign imports, Indonesia is slapping restrictions on at least 500 products this month, demanding special licenses and new fees on imports. Russia is hiking tariffs on imported cars, poultry and pork. France is launching a state fund to protect French companies from foreign takeovers. Officials in Argentina and Brazil are seeking to raise tariffs on products from imported wine and textiles to leather goods and peaches, according to the World Trade organization.

At the same time The Wall Street Journal had a related article with a conflicting message:

The U.S. current account deficit narrowed more than expected in the third quarter as a broad gain in exports outstripped the rise in imports. The current account deficit decreased to $174.1 billion during the July through September period, from a downwardly revised $180.9 billion in the second quarter, the Commerce Department said Wednesday. The second-quarter deficit was originally reported as $183.1 billion.

Obviously enough if the US current account deficit decline – about 90% of which is the trade in goods and services – other countries current account surpluses must also decline( THAT'S IT ). Continuing on that subject Brad Setser has a post( I JUST POSTED ON IT ) today in his blog on the subject:

China’s export sector hasn’t experienced a sharp cyclical downturn in a long time. In 2001 global trade did contract. But that contraction didn’t hit China all that hard. It came at a time when the electronics industry was migrating to China, allowing China to increase its share of a shrinking global market. Year-over-year export growth slowed from 25% at the peak of the .com boom in 2000 to 5% — but it didn’t turn negative. In dollar terms, the y/y increase in a rolling 12m sum of China’s exports went from $50b to $15-20b. But y/y exports never fell in dollar terms.

But China now is a much much bigger share of global trade. China’s 2008 exports — in dollar terms — will be more than five times large than its 2000 exports. That means that China is now far more exposed to the global economic cycle than it was. And this cycle looks brutal.

Korea is reporting its biggest drop in industrial production in twenty-one years. That is the kind of data point that gets my attention. I was a bit surprised to hear that the current fall is sharper than the fall that accompanied Korea’s own crisis in 97/98.

The whole Korean story has been an interesting one which I have been watching peripherally with great interest. The collapse in Korean export was a real warning signal for China because one of the few export areas for China that held up until recently had been sales of machinery and capital goods, but those have always been important areas for Korean exports and the very weak demand for Korean machinery boded ill for China.

There is not much else to report since today most things in China were closed, including the stock market. The last time I mentioned the stock market was on December 9, when the SSE Composite had traded up sharply the day before to close at 2091. Since then it has declined pretty steadily, with only five up days, to close yesterday at 1821, down 12.9% albeit on very thin volume. We are racing towards Chinese New Year and I suspect everyone is eager to put the Year of the Rat behind them. It is the first year in the cycle and is supposed to be a time of hard work and renewal. It ends in three weeks and will be followed by the Year of the Ox, which symbolizes prosperity through fortitude. We’ll see — fortitude will probably be necessary."

Since I found the use of Terrorism Laws to skewer Iceland so offensive, even as Gordon Brown was telling everyone not to beggar your neighbor, I'm going to say that the skewering of Iceland was an example to other countries that not beggaring your neighbor is a farce. After all, what do you call the current situation in Iceland?

''For the person who embezzles money, there won't be a trial. They'll be killed,''

I bet Madoff and the other financial criminals are glad that they don't live in Guinea. From the NY times:

"Guinea Coup Leader Vows to Fight Corruption( YOU JUST LED A COUP )

By THE ASSOCIATED PRESS

Filed at 4:17 p.m. ET

CONAKRY, Guinea (AP) -- Guinea's coup leader declared a zero tolerance policy on corruption Saturday, vowing to renegotiate the country's numerous mining contracts( GOOD LUCK. CHECK OUT COMMODITY PRICES ) and warning that anyone who embezzles state funds will be executed( I DON'T LIKE EMBEZZLEMENT, BUT THIS IS INTOLERABLE ).

Capt. Moussa Camara also extended an apparent concession to Guinea's opposition, telling them they could help choose a prime minister( HOW NICE ) following international criticism that elections are not planned for two more years.

On a concrete stage inside the barracks from where he launched his rebellion Tuesday, Camara jabbed his finger at the sky as he swore to do away with the corruption that has drained the mineral-rich state's coffers and impoverished the West African nation's 10 million people.

''For the person who embezzles money, there won't be a trial( THAT'S NOT ACCEPTABLE ). They'll be killed,'' he said as the crowd went wild. ''I was born in a hut. I walked to school. ... Money means nothing to me.''

Guinea is the world's largest producer of bauxite, the raw material used to make aluminum, and also produces diamonds and gold. Yet its mineral wealth was siphoned off to enrich the country's longtime ruling family and its collaborators( THIS IS A DISGRACE ).

Guinea has been ruled by only two people since gaining independence from France half century ago. The late dictator Lansana Conte died on Monday and the military junta led by Camara declared the coup a day later.

He said the country's ruling clique ''spit on the faces of the poor,'' enriching themselves at the population's expense( HE'S PROBABLY RIGHT ).

One of the remedies he proposed was reviewing the country's mining contracts and renegotiating them if the terms are unfavorable. He did not name any specific companies whose contracts might be affected( WE'LL SEE ).

Even as the crowd of thousands cheered him, the international community continued its condemnation of the coup( SEE, IT'S A COUP ). South African President Kgalema Motlanthe condemned it ''an affront to peace, stability and democracy.''

The United States has called for the immediate restoration of civilian rule, while the European Union said the junta needs to hold elections by next year, not two years from now as Camara has promised( WHAT'S WRONG WITH THREE MONTHS? ).

But Senegalese President Abdoulaye Wade -- a key player in the region's politics -- urged other countries to leave the new junta alone. ''I call on all countries, notably France, to not throw stones at them and to take them at their word,'' Wade said during a trip to Paris.

In a move appeared calculated to address the international community's concerns, Camara said he is calling on Guinea's opposition, including its powerful unions, to propose the name of a prime minister( WE'LL SEE ).

Rabiatou Serah Diallo, head of one of Guinea's largest unions, welcomed the move. She added the unions were keeping an eye on the coup leaders: ''If they deviate from the road they promise to take us on, then they'll find us blocking their path( GOOD ).''

Camara was largely unknown to most Guineans before his group seized public airwaves and declared the coup. On Saturday, he invited civilian community leaders -- including union leaders, religious heads, politicians and human rights workers -- to meet him at his barracks.

He arrived surrounded by a cordon of soldiers armed with machine guns. They hollered at the crowd to move back. Many wore fetishes tied around their arms and necks intended to protect them from harm( GET ME ONE OF THOSE ). Camara, a short man with a taut face, took the microphone, electrifying the crowd with one pronouncement after another.

A generation of Guineans have known only Lansana Conte as their ruler and even though the coup leader appears to enjoy broad support( PROBABLY TRUE ), tens of thousands turned out for the dictator's funeral on Friday. Too many people tried to enter parliament to see the president's coffin, causing security forces beat them back with rubber belts.

When the coffin wound its way to the capital's 25,000-seat stadium, so many people had crowded inside that spectators began suffocating and ambulances rushed half a dozen unconscious people away.

The funeral ended on the manicured grounds of the ex-president's estate in his village located around 40 miles (70 kilometers) northwest of the capital. With state funds, Conte built himself a house the size of a hotel fronting a lake. His family -- including two of his three wives and an estimated 20 children -- showed up in Hummers, stretch limousines and flashy SUVs.

As they put his body to rest, the sun went down over the village of his birth. Most of the country -- including much of the capital -- has no electricity. But as the darkness fell, the homes in the village shone with light."

I CAN'T HELP WISHING THE COUNTRY LUCK. I DON'T LIKE COUPS, BUT OPPOSITION TO THIS REGIME WAS SURELY JUSTIFIED. HOWEVER, THE COUP COULD ENHANCE ITS, REPUTATION, I GUESS, BY OBSERVING THE RULE OF LAW AND HAVING IMMEDIATE ELECTIONS. THAT WOULD IMPRESS ME.

------

Associated Press writers Sadibou Marone in Dakar, Senegal, and Maseco Conde in Conakry, Guinea contributed to this report.

"almost four times the first one that was much derided by Germany's EU partners, including Britain."

I predicted that Merkel would eventually be for a bigger stimulus, which is why I'm bringing this post up. From the Guardian:

• David Gow in Brussels
• guardian.co.uk, Friday 19 December 2008 11.26 GMT
• Article history

Germany and France, the eurozone's two biggest economies, are sinking deeper into recession and preparing to adopt further stimulus packages.

Chancellor Angela Merkel announced that Germany would pump more into the struggling economy and signalled a supplementary budget for 2009. ( AS I PREDICTED )

Spiegel-Online reported that her government's second package would amount to €40bn (£37.31bn) or almost four times the first one that was much derided by Germany's EU partners, including Britain. ( BINGO! )

The magazine said the new package, far bigger than even the UK's, would give a fiscal stimulus of up to 2% of GDP compared with the average of 1.5% sought under the EU's €200bn total package endorsed at last week's summit. ( YOU DON'T SAY )

It said the bulk of the package would be spent on roads, schools, universities and sports facilities as well as internet networks. But it would also comprise lower income tax bands and bigger federal contributions to sickness insurance. ( ESSENTIALLY WHAT I RECOMMEND: TAX CUTS, INFRASTRUCTURE INVESTMENT, AND SOCIAL SAFETY NET SPENDING )

In France fresh evidence also emerged today from Insee, the national statistics agency, that the economy will shrink this quarter by 0.8% and by another 0.4% in the first three months of next year – a genuine recession.

With German business confidence at a 25-year low and the economics ministry predicting a 3% contraction in 2009, Merkel admitted her government would be forced to borrow more money to meet "extraordinary challenges". ( YEP )

Her finance minister, Peer Steinbrueck, the fiercest opponent of increased spending to reboot the economy ("crass Keynesianism"), acknowledged that the country's economy would sink deeper into the mire this quarter. ( DID HE NOW ? )

Both have come under exceptional pressure from other EU governments to adopt more drastic measures than foreseen so far under the €12bn stimulus package as exports wilt and unemployment is set to rise.

Merkel said in a newspaper interview that any extra spending would be destined for infrastructure projects. Her grand coalition government is expected to announce the scale of its second package late in January but is under pressure to act earlier.

Current budget planning envisages net borrowing of €18.5bn in 2009, assuming growth of 0.2%. But media reports suggest the borrowing could be as high as €40bn as the economy deteriorates rapidly.

The federal government is expected to borrow up to €323bn next year to finance its expanded budget and the bank rescue scheme as reduced tax yields and higher spending on the jobless alone cost it €9bn. Federal debt, already at €1.5tn or more than 60% of GDP, will rise.

With French business confidence at a 15-year low, according to Insee today, the government is under pressure to pump in more than the €26bn programme announced by President Nicolas Sarkozy last month. France is among several eurozone countries demanding that the EU limit of 3% on budget deficits be formally suspended. ( WISE MOVE )

Insee said the business climate had clearly worsened again and the outlook remained below its historic minimum, with order books emptying and considered very thin.

The latest surveys, against a background of a soaring euro, put renewed pressure on the European Central Bank to slash interest rates in line with its US, UK and Japanese counterparts. But hawks, led by Germans, are demanding a return to fiscal discipline and warning that excessive spending threatens the single currency's stability. ( A WARNING IS PRUDENT )

" Now how do you organise a new French Revolution? "

Bronte Capital and John Hempton also get it:

"Credit Agricole SA is a bank which obsesses me – and on which I have lost some loot.

The problem is that it is a bank with very good bits and very bad bits. And the good bits are excellent (and mostly outside Paris) – and the bad bits are atrocious.

Charlie Munger observed that if you mix turds with raisins you still have turds. Charlie was right and it shows in Credit Agricole SA’s stock price.

The bank is controlled by a bunch of regional mutual banks who – for reasons that are not apparent to me – have never got around to closing the bad bits. Those regional mutuals are in turn controlled by five million voting mutual certificate holders – a reasonable proportion of French households.

The super-bad bit is their investment bank. It’s a mathematical finance type investment bank in the French mould. As has been noticed by more than a few people – the market recently has not been too kind to mathematical finance.

I just want to extract the results – quarterly – for just investment banking business. Please click for detail...

These numbers really deserve looking at. The first observation is that revenue can go very strongly negative at an investment bank. That is nothing that Lehman et al have not discovered before – but the trading revenue was negative for several quarters in a row. You might conclude the traders were not much better as traders than say the average French farmer.

The second thing is that the costs line doesn’t seem to move much. Now when I was young and naïve – say 2006 – I thought the investment banks would have a very rough trot – but that the staff would take a fair bit of it in the hip-pocket. The argument being that the very high salaries were at risk – and you could at least assume that when time got rough for an investment bank the staff would be paid salary without bonus. Capital risks were lower than it would appear because at least variable expense would go close to zero.

Now I read lots of stories about how children are getting less allowance due to the credit crisis. Such stories always seem to wind up high in big-media’s “most read” and “most emailed” lists. And that is only because we – dear readers – are doing it to our own kids.

And if it is good enough for our kids it is surely good enough for our investment banker!

Anyway – it is noted that Wall Street bonuses remain stubbornly high – but this is France with all its equality and fraternity. And they can’t control this crap either.

But with numbers like these – if the investment bank were not owned by the rich French parent (Credit Agricole SA) then it would be bust – and the children (sorry investment bankers) would be out on the street.

But bust is better than it would have been in 1792. In those days – faced with a class as egregiously and hypocritically greedy as investment bankers they would have set up the guillotine in the Place de la Concorde and we would be treated to the public spectacle of mass beheadings.

These days of course it is easier. The French farmers and middle class all have a vote – its their mutual share. Executing a vote may be less grizzly than executing investment bankers – but it might be just as effective (though somewhat less theatrical).

Now how do you organise a new French Revolution?"

Hempton's not far wrong. Now you know why I sound like a certain Whig who's trying to prevent himself from having to write a book about Major Social And Economic Changes wrought by this crisis. Only, in this case, I'm getting more help from my own party than the opposition. This need not happen. It's a remote possibility as of now.

A True Burkean would be thinking about the Pragmatic and Effective Policy Decisions that will allow us to keep our system intact, and yet deal with the crisis before us. Paradoxically, we need more government intervention in the short run to prepare the possibility of less government intervention in the future. We also, and I know I'm sounding Quixotic here, need to root out Fraud, Negligence, Fiduciary Mismanagement, and Collusion, and deal with it strictly and publicly, in order to forestall a collapse in the belief among many voters that this system is worth preserving, and that this presevation will not come at their expense.

Do I agree with everything Burke says? No. I see him as a Whig with a distaste for Radical Change, which often strays very far from its stated goals. So say I. Political Economy and Politics dictate that we deal with this crisis in a way that both appears and is benefitial to all parts of the citizenry. I'm fine with looking towards Keynes for help, but a quick but focused glance towards Burke is seldom, if ever, amiss.