Wednesday, 31 August 2011

Homelessness could spread to middle class, Crisis study warns

Homelessness charity points to direct link between economic downturn and welfare cuts, and rising numbers living on streets

Wednesday 31 August 2011

The economic downturn and the government's deep cuts to welfare will drive up homelessness over the next few years, raising the spectre of middle class people living on the streets, a major study warns.

The report by the homelessness charity Crisis, seen by the Guardian, says there is a direct link between the downturn and rising homelessness as cuts to services and draconian changes to benefits shred the traditional welfare safety net.

In the 120-page study, co-authored by academics at the University of York and Heriot-Watt University, Crisis highlights figures released over the summer that show councils have reported 44,160 people accepted as homeless and placed in social housing, an increase of 10% on the previous year and the first increase in almost a decade
Last year another 189,000 people were also placed in temporary accommodation – such as small hotels and B&Bs – to prevent them from becoming homeless, an increase of 14% on the previous year.

Crisis says that with no sign of economic recovery in sight, there are already signs that homelessness is returning to British streets. In London, rough sleeping, the most visible form of homelessness, rose by 8% last year. Strikingly, more than half of the capital's 3,600 rough sleepers are now not British citizens: most are migrants from eastern Europe who cannot find work and, unable to get benefits or return home, are left to fend for themselves on the streets.

The charity says the evidence is that the current recession has seen the poor suffer the most, but other parts of society may be in jeopardy if the government's radical welfare agenda is acted on as the economy stutters.

For article GO HERE

Rescuers race against time, floodwaters to save families

Christchurch quake

Economy in danger and Govt must act

At last we have a sober article coming out of the New Zealand media that goes beyond the pathetic “we’ll be right Jack” mentality.

5:30 AM Wednesday Aug 31, 2011

Why hasn't the National Government urgently launched a three-point action programme to deal with the serious risks to the economy resulting from the major earthquakes in Canterbury?

The Canterbury quakes are proving to have a much more significant impact on this country than the global financial crisis which sparked the Key Government's launch of a "rolling maul" of initiatives.

How hard would it be for the Government to:

* Immediately impose a special tax aimed at higher income earners to start replenishing the Natural Disaster Fund which has been exhausted by the impact of the Christchurch quakes.

* Commandeer large amounts of stable land on the outskirts of Christchurch and launch a big state-led building programme to get people safely rehoused quickly. Do this instead of allowing developers to book obscene profits at the expense of fellow citizens who have already lost enough of their equity through the quakes.

* Tell New Zealanders - including the business community - the truth about just what it will cost in future to insure residential and commercial buildings in this seismically challenged land.

Gerry Brownlee's announcement that he will lead a mission to Europe to try to placate the international reinsurers and school them up on the steps the Canterbury Earthquake Recovery Authority (Cera) is undertaking to "de-risk" Christchurch (and for that matter the rest of New Zealand) is rather surreal.

For months now private insurers based here have been quietly warning that New Zealand faced a big problem on the reinsurance score.

There have been suggestions that one reinsurer has been preparing to sue the Christchurch City Council for allowing major developments to go ahead on areas which the geotechnical reports said wouldn't stand up to significant earthquakes.

Since the February 22 quake there has been considerable - if intermittent - focus on previous geotechnical reports that indicated that far from being a "quake safe" area as many of the public had thought, Christchurch was in fact vulnerable.

That was because of the underlying seismicity, the result of the many hidden faultlines, and also because the soft soil was prone to liquefaction. No suit has emerged. But it is instructive that some major reinsurers are not yet issuing new cover for Christchurch.

Marsh NZ's Nathan Richmond estimates the "estimated insured losses" from these quakes sits at around $25.5 billion. The EQC's exposure was yesterday put at $7.07 billion.

The $25.5 billion estimated figure for insured losses from the Canterbury quakes compares to the US$8.5 billion from the January 2010 Chilean earthquake and the US$35 billion estimated insured losses for the Japan tsunami.

The relative size of the exposures indicates just why the insurance industry is taking a very hard look - not just at Christchurch - but the rest of the country.

Brownlee's challenge will be to convince the reinsurers to deploy additional capital to Christchurch. As Richmond told the infrastructure industry recently, the "New Zealand insurance market has taken a step change".

Businesses had to be prepared for increases in premiums and deductibles to provide a return on capital to ensure continued operation, and a longer lead in time for insurance marketing and placement.

Examples provided by Marsh NZ suggest a building owner in Wellington might face having to stump up the first 5 per cent of the site value.

Thus if a building on a site that was insured for $5 million suffered $1 million of damage, the owner would have to stump up $250,000 towards repairs. For a Christchurch building the relative percentage might be 2.5 of the loss value. Where a building was built before 1936, the relative percentage could be as high as 10 per cent.

These are sobering figures which indicate why the Government, local authorities and building owners need to get on with ensuring New Zealand's buildings are strengthened to higher resilience standards.

For months also, private construction leaders have been quietly warning that estimates made by the EQC and the Treasury over how much it will cost to rebuild Christchurch's residential and commercial buildings and its underlying infrastructure were lamentably on the low side.

Look back to April, when Wayne Brown - the well-known businessman and engineer who went to Christchurch as a member of Operation Suburb - made an urgent plea that the Government review the extent to which the taxpayer might end up footing the bill for unnecessary costs in repairing quake-damaged Christchurch suburban residences.

Brown's warnings were panned by the politicians.

Fletcher Building's Mark Binns has repeatedly pointed out that the EQC's estimates have consistently been on the low side. Fletcher Building - which was appointed EQC's Christchurch-based project manager after the September 4 earthquake - will not be in a position to start the major rebuild until the shaking stops.

Binns this year also questioned the Treasury's earthquake damage estimates, arguing that the repairs could hit $20 billion in costs, outstripping the Government's $15 billion figure. He subsequently upped the estimate.

But it's taken till now for the Government to get its act together.

So it's hardly a surprise that the EQC's $6 billion fund will be wiped out through the escalating costs of meeting claims resulting from the major series of earthquakes that have seriously damaged New Zealand's second major city.

As the fund's guarantor the Government will have to write a cheque for the estimated shortfall of $829 million (the timing of claims assessments and payments are expected to reduce the final figure to no more than $500 million).

But even though Bill English said the Natural Disaster Fund (which is administered by the EQC) has reinsurance for another two events the size of the September 4 earthquake, it stands to reason the Government will be writing some very big cheques indeed if New Zealand has more large disasters before the fund's equity is rebuilt.

In fact, the Government is also 'tailend Charlie' for the costs of repairing Christchurch's underlying infrastructure. Local body cover does not meet the full cost of this.

After the February 22 earthquake I reprised English's December 14 warning that "we've got to be in a position where we can handle another recession and another earthquake and frankly we won't be there until 2020".

With what's happening on the global front - and the EQC's relative insolvency - let's all hope that we don't get another "big one" for years to come. 

We just can't afford it.

And on Radio New Zealand there was this this morning...

Earthquake Funding Shock

Principal of Banks Ave School, Murray Edlin, and Canterbury Primary Principals Association president, John Bangma, discuss the issue of earthquake-damaged schools in property repairs funding shock.

Tar sands protests

Top NASA climate scientist arrested at White House
August 30, 2011
One of the nation’s foremost experts on climate change was arrested outside the White House on Monday morning after he joined a protest against a planned Canadian tar sands pipeline, The Raw Story reports. 

Dr. James Hansen (pictured), who runs NASA’s Goddard Institute for Space Studies, was arrested along with 139 other protesters taking part in a series of demonstrations against the planned $7-billion Keystone XL pipeline, which would transport 500,000 barrels of crude per day from America’s neighbor to the north all the way to the Gulf coast of Texas.

So far, 521 activists have been arrested since their first protest on Saturday, Aug. 21. Also included in Monday’s arrests were Greenpeace Executive Director Phil Radford, president of CREDO Mobile Michael Kieschnick, Executive Director May Boeve and many others.

Hansen, a 44-year veteran of the nation’s space agency, is perhaps the best-known climate scientist in the world. He was the center of a years-long controversy in the last decade, after he claimed that NASA had tried to censor his findings about earth’s climate on behalf of the Bush administration. He’s also the author of “Storms of My Grandchildren,” a book that calls for radical action to combat climate change. He’s also been arrested before, protesting against mountaintop mining.

For full article GO HERE

ExxonMobil clinches Arctic oil deal with Rosneft

Under the deal, Exxon and Rosneft will invest $3.2bn (£1.9bn) in developing the Arctic Kara Sea

Tuesday 30 August 2011 20.10 BST

Exxon, the world's largest company, and Rosneft signed a deal to develop oil and gas reserves in the Russian Arctic, opening up one of the last unconquered drilling frontiers.

The deal, signed in the presence of Russian prime minister Vladimir Putin, dashes any hopes that BP had of reviving its own deal with Rosneft that was blocked in May by its billionaire partners in an existing Russian venture.

Exxon boss Rex Tillerson and Russia's top energy official deputy prime minister Igor Sechin were with Putin at the signing ceremony in the Black Sea resort of Sochi.

Calling the deal a "truly strategic partnership" and hailing Exxon's experience in exploiting Arctic reserves in Canada, Putin said: "New horizons are opening up. One of the world's leading companies, ExxonMobil, is starting to work on Russia's strategic shelf and deepwater continental shelf," Putin said.

Under the deal, Exxon and Rosneft will invest $3.2bn (£1.9bn) in developing East Prinovozemelsky Blocks 1, 2, and 3 in the Arctic Kara Sea and the Tuapse licensing block in the Black Sea.

Those regions "are among the most promising and least explored offshore areas globally, with high potential for liquids and gas," Exxon said in a statement. Rosneft, meanwhile, will be offered an equity interest in a number of Exxon exploration projects in North America, including deep-water Gulf of Mexico and tight oil fields in Texas, as well as in other countries.

"The fact that after the BP-Rosneft deal collapsed a new partner was found so quickly is a very positive signal," said Denis Borisov, energy analyst at Bank of Moscow.

The deal would help Rosneft share the risks of developing the Arctic, which could run into the hundreds of billions of dollars, and contrasts with the BP-Rosneft deal in that it does not include a share swap.
"If this is essentially the BP deal it is exposure to a pretty significant resource base. There's a lot of risk that's involved in it," said Jason Gammel, energy analyst at MacQuarie Research.

"Rosneft had been pretty clear that they were still looking to get a deal done up there," Gammel added. "It's a pretty big win for them if they were able to gain access up there, clearly dependent on what type of terms they got."

Mid-week stories

Wall Street stocks drop after figures show fall in US consumer confidence

FTSE closes 138 points up but European markets are hit by eurozone worries

Tuesday 30 August 2011 17.53 BST

Shares in Wall Street plunged on Tuesday afternoon after figures showed that US consumer confidence had fallen to a two-year low.

The benchmark Dow Jones industrial average dropped 71 points after the figures showed that consumers were more pessimistic than at any time since April 2009 as they grappled with rising inflation and uncertainty over jobs. By lunchtime the Dow had recovered some losses and was down 25 points.

For article GO HERE

Companies Stop Selling Bonds as Costs Jump by 40%: Euro Credit

Aug. 30 (Bloomberg) -- Company bond sales have ground to a halt in Europe, with August poised to end without a single offering as the sovereign debt crisis drives borrowing costs up by 40 percent.

For article GO HERE

Thieves Steal 175,000 Feet Of Copper Wire From Overhead Lights On I-95

Rising copper prices and a bad economy are giving thieves reason to rob Interstate-95 of its copper wiring, used in overhead lights.

According to CBS Miami, the larceny of over 175,000 feet of copper wire has rendered useless the lighting over a 33-mile stretch of Palm Beach County. The thievery has taken place over the last six months in 18 separate locations.

"Obviously, the economy has driven this," Florida Highway Patrol spokesman Tim Frith said, referring to the recent increase in this criminal activity. "It does present itself as a kind of crime of convenience."

Rescuers brave rising water to save families

August 30, 2011

At least 38 deaths in 11 states have been blamed on Hurricane -- and later, Tropical Storm -- Irene, and authorities warn more deaths could be discovered.

About 3.3 million customers were still without electricity Tuesday morning, the Department of Energy said. That included more than half a million each in Connecticut and New York; more than 400,000 in Virginia, more than 350,000 in both Massachusetts and New Jersey, and nearly 300,000 in Pennsylvania.

For article GO HERE

Deadliest Month Ever For U.S. Troops In Afghanistan

Talk of winding down U.S. forces in Afghanistan has done little to decrease American combat deaths in the decade long war.

According to a CNN poll, August 2011 has proven the deadliest month on record for U.S. soldiers with 66 fatalities -- nearly half of which came when insurgents took down a helicopter carrying Special Forces August 6.

The U.S. has spent more than $1 trillion in Afghanistan over the past 10 years and as troop drawdowns begin, many are saying the scheduled removal is too slow.

Senator Jeff Merkley spent three days in the war-torn country. "We are on a vast nation-building mission and every aspect of that mission is problematic," he told the Oregonian.

Merkeley says the corruption is too rampant. Only 16 percent of the police force can read and following the disappearance of $1 billion in U.S. cash we should get out as quickly as possible.

Fighting in Afghanistan has claimed 1,678 U.S. soldiers since it began in October 2001.

Avian flu's back, warns UN – and new strain is resistant to vaccines

30 August 2011

Fears of a fresh outbreak of bird flu this winter have been raised by the United Nations, after an increase in the number of deaths and, crucially, the emergence of a new, mutated strain of the disease.

At least eight people have died of bird flu in Cambodia this year, the most recent being a six-year-old girl earlier this month, and the virus has reached countries that had been free of it for several years.

Existing vaccines appear to be powerless against the new strain of the H5N1 virus which, the UN's Food and Agriculture Organisation (FAO) said, has now spread across much of Vietnam and China. It remains uncertain whether the mutant virus can be transmitted to humans, and if so how dangerous it potentially is.

For article GO HERE

The Asian Power Squeeze

By Gareth Evans
Former Australian foreign minister

CANBERRA – As China gets closer to overtaking the United States as the world’s largest economic power, and its disinclination to accept US military dominance of the Western Pacific grows more obvious, America’s Asia/Pacific allies and friends are becoming increasingly anxious about their longer-term strategic environment. The nightmare scenario for policymakers from Seoul to Canberra is a zero-sum game in which they are forced to choose between their great economic dependence on China and their still-enormous military reliance on the US.

No one believes that the US-China relationship will end in tears any time soon, not least because of the mutually dependent credit and consumption embrace in which the two countries are currently locked. But the outlook a decade or two from now  is already generating a mass of analysis and commentary,  focusing on the tensions that have long festered in the South China Sea, bubble up from time to time in the East China Sea, and are forever lurking in the Taiwan Strait. What, if anything, can those regional countries with competing interests and loyalties do to avoid the pain that they would certainly face if US-China competition turned violent?

For article GO HERE

Another hurricane forming

Hurricane Katia Could Be A Category 3 Storm By Sunday

Aug. 30, 2011, 6:35 AM 

Forming in the same general weather patterns that guided Irene's course up the U.S. Eastern seaboard, Tropical Storm Katia was officially named Tuesday and looks to be headed toward Puerto Rico.

According to the National Weather Service Katia's path is slightly north of Irene's and should put it northeast of Puerto Rico by Sunday.

Currently about 535 miles southwest of the Cape Verde Islands Katia's moving quickly with sustained 40 mph winds and according to the National Hurricane Center could be a powerful Category 3 hurricane by this weekend (via CBS Tampa).

The Center reports Katia will have hurricane intensity by late Wednesday or early Thursday.

Tuesday, 30 August 2011

US Floods

Irene 'just devastating' in Vermont, governor says
August 30, 2011

Floodwaters brought by Tropical Storm Irene began to recede Monday in parts of Vermont, but the governor warned that further flooding and loss of life are likely ahead for the small, rural state.

"It's just devastating," Gov. Peter Shumlin said Monday. "Whole communities under water, businesses, homes, obviously roads and bridges, rail transportation infrastructure. We've lost farmers' crops," he said. "We're tough folks up here but Irene ... really hit us hard."

Hundreds of people remained trapped Monday in communities cut off by raging floodwaters that washed out or otherwise damaged 263 roads and bridges, Shumlin said. Exactly how many were stranded remained unclear, he said.

For article and videos GO HERE

USA: 14 Of The Biggest Mass Layoffs In 2011

The looming standstill in the U.S. economy has intimidated private sectors into cutting operating costs by handing out pink slips -- thousands of them.

In July, the number of job cuts increased by 60.3% -- approximately 66,414 jobs -- compared to the previous month, according to a report from consultants Challenger, Gray & Christmas, Inc.

Many of the massive workforce downsizing came from sectors who endured fairly well in the past. 

Here are 14 companies contributing the most to the unemployment rate.

To see the companies downsizing GO HERE

Russia and China's Energy Dispute and the Struggle for Eurasian Dominance

Written by John Daly
China’s voracious appetite for energy from anywhere has led most oil-producing nations to attempt to feed the dragon, including Russia.

But a curious situation has developed as regards Russian oil exports to the Celestial Kingdom, underlining that the two nations, which fought for global supremacy over the Communist movement for four decades, remain at best, “frenemies.”

According to Chinese customs reports, last month oil imports from Russia fell by nearly half.

Not so, Rosneft says, stating that deliveries are proceeding through the Eastern Siberia-Pacific Ocean (ESPO) oil pipeline at their normal levels.

Russia is now China’s ninth largest source of oil imports, with Saudi Arabia first, Iran second and Angola third.

In trying to read the tea leaves in the contradictory statements emanating from Beijing and Rosneft, Russian analysts believe that China is sending Moscow a not so subtle signal that it can do without Russian imports.

The Eastern Siberia-Pacific Ocean oil pipeline began deliveries to China last January, at a volume of 300,000 barrels a day. Last month China imported 4.58 million barrels per day, with Russian imports making up a mere 6.5 percent of the total.

So, where’s the beef?

Money, apparently.

According to the 2009 Russian-Chinese intergovernmental agreement, oil deliveries to China through the Eastern Siberia-Pacific Ocean pipeline are made under contracts among Russian oil company Rosneft, Russian state-owned pipeline monopoly Transneft, and the China National Petroleum Corporation (CNPC) for 15 million tons a year over two decades. In exchange for guarantees of long-term oil deliveries China provided Transneft and Rosneft with loans of $10 billion and $15 billion respectively.

But at the beginning of 2011 the CNPC started underpaying for Russian oil, as China demanded a revision of the price formula. It currently includes the price of transporting oil along ESPO’s entire route to the port terminal in Kozmino. But as the branch to China begins at the point of Skovorodino, 1,271 miles from Kozmino, China is insisting that the pricing formula must be revised and that the cost of transportation from Skovorodino to Kozmino must be subtracted from it, with Beijing originally estimating the difference at $12 a barrel, underpaying accordingly.

Accordingly, China’s debt as calculated by Moscow is now approximately $85 million. In a telling comment on the validity of both Russia and China’s court systems, Rosneft and Transneft have begun consulting with lawyers about the possibility of initiating a lawsuit against the CNPC at the London Court of Arbitration. Earlier this month Transneft sniffed that if the case goes to court, it is prepared to return to China the $10 billion received in 2009 and to stop transporting Russian oil to China, unilaterally abrogating the 20-year contract.

Switching gears, China is upping the stakes to begin discussions at the governmental level to resolve the impasse. Chinese negotiators have invited Russian Energy Minister Sergei Shmatko to participate in the next round of talks, which is to take place in Beijing starting at the end of August, when it was originally assumed that only Rosneft and Transneft representatives would be participating in the discussions.

Konstantin Simonov, general director of the National Energy Security Foundation, is convinced that China is indulging in a bit of good old fashioned “provokatsiia,” to use a Soviet word, telling reporters, "The statement by the Chinese customs is of a provocative nature: The Chinese are endeavoring to show that Russia is not fulfilling its contract obligations and is casting doubt on the development of energy relations with China as a whole."

The reality is that Russia and China’s struggle for Eurasian dominance did not end with the 1991 collapse of Communism. The implosion of the Soviet system left many Russians feeling disoriented and it is worth remembering that the USSR was a continuation of the Russian Empire, which began to expand eastwards into Siberia in the later part of the 16th century.

Many Russian intellectuals bemoan the fact that Gorbachev liberalized the political system but not the economy, leading to the Soviet Union’s demise as China liberalized the economy while keeping tight Communist Party control, leading to the country’s dazzling economic achievements of the last decade.

The rivalry is evident in Moscow and Beijing’s contrasting visions of the Shanghai Cooperation Organization, which Russia sees primarily as a military structure, while Beijing favors increased economic integration. Both nations are engaged in an ongoing “Great Game” for the hearts, minds and economies of the former Soviet Central Asian states, with their rich energy assets. Beijing is making serious inroads there, not least of because of their deep pockets and the locals’ bitter memories of seven decades of Soviet domination.

Last but not least are Russian atavistic fears of the “yellow peril” and its threat to eastern Siberia, still largely devoid of population, large swathes which Russia acquired by the 1858 Aigun Treaty, which ceded the left bank of the Amur River to Russia and the 1860 Convention of Beijing, under which Russia gained control of Outer Mongolia. Both the Chinese Empire and subsequently the People’s Republic of China referred to them as “unequal treaties” until Prime Minister Zhou Enlai acknowledged them in 1969 in an effort to improve Soviet-Chinese relations in the wake of a series of violent frontier clashes along the Amur River earlier that year.

The struggle between the two nations is a fascinating study in opacity. Russia, the energy superpower versus China, the economic superpower. Amidst the energy pricing squabbles and ongoing covert struggle for influence in Eurasia, Beijing and Moscow nevertheless find common ground on one topic – limiting the influence of the United States. If 42 years ago Soviet and Communist Chinese politicians could hammer out a border agreement, what’s a mere $85 million among friends?

By. John C.K. Daly of

Joke of the day

NZ Govt Believes NZ Possibly A Net Exporter Of Oil By 2030

AUGUST 29, 2011, 5:33 P.M. ET

WELLINGTON (Dow Jones)--The New Zealand government believes oil and gas production in the island nation could substantially increase with New Zealand possibly becoming a net exporter of oil by 2030, the government's energy-strategy report said Tuesday.

The document, New Zealand Energy Strategy 2011-2021, said the government wants New Zealand to be a highly attractive global destination for petroleum exploration and production investment so that it can develop the full potential of its petroleum resources.

"Significant discoveries of oil and gas resources will help boost New Zealand's foreign earnings and domestic gas supplies," the document said. It added the government's immediate focus is on increasing exploration activity and improving the knowledge of our petroleum basins.

In the year to December 2010, crude oil was the country's fourth-largest overseas merchandise export and the government wants to develop this further.

"We also can't ignore the major economic opportunity that continuing global oil demand could provide New Zealand," said Acting Minister of Energy and Resources Hekia Parata.

However, oil drilling has garnered negative attention in New Zealand, with protests against oil companies looking to drill in deep water off New Zealand's coast.

Christchurch earthquake

While we are talking about expenses for major disasters....

Quake costs jump to $7.1 billion

NZ Herald
10:25 AM Tuesday Aug 30, 2011

The estimated Government bill for repairing Canterbury earthquake damage has more than doubled since the devastating February 22 aftershock, new figures reveal.

Finance Minister Bill English this morning announced the Earthquake Commission has increased its estimated Canterbury earthquake liability by $4 billion to $7.1 billion.

For article GO HERE

Quote of the day

Max Keiser's tweet:
"America is a nation of virgins: no torture in Iraq, no fraud on Wall St. Just sunshine and lollipops emanating from each and every asshole".

UK: Number of long-term unemployed doubles

Unemployment map: The darker areas on this graphic show the regions with the largest unemployment growth

The number of long-term unemployed has more than doubled since the financial crisis struck in 2008, leaving tens of thousands of people with little chance of ever working again, according to the Institute of Public Policy Research.

For article GO HERE

Economic effects of Hurricane Irene

Well, there had better not be any more natural disasters!
According to Michael Ruppert Gen Russell Honore said on CNN that 40% of small businesses between the Carolinas and Vermont might fail.
It is possible that this might still prove to have a similar effect on America’s economy; it may well turn out that this will break the ability of the US government to respond to future disasters.
Just look at the effect of the Christchurch earthquake on local councils - they are simply unable to find insurance in Canterbury

FEMA almost out of disaster funds

NEW YORK (CNNMoney) -- The Federal Disaster Relief Fund, the pot of money used to help communities and individuals hit by disasters, is nearly depleted.

That's bad news for victims of both Hurricane Irene and other disasters like the tornadoes that hit earlier this year.

Federal Emergency Management Agency Administrator Craig Fugate said Monday that the agency's fund has fallen to less than $800 million. With less that $1 billion on hand, the agency is only authorized to pay for emergency repairs. That means that long-term projects, like rebuilding roads, schools and other damaged structures in the tornado-ravaged southeastern states and Joplin, Mo., will have to wait.

For article GO HERE

How A Hedge Fund Reacts To A Hurricane: Trade Weather Derivatives!

The obvious response to climate change (from the point-of-view of a Wall Street investor)!

While others were stockpiling water, flashlights, and board games in preparation for Hurricane Irene, the hedge fund Tudor Investment was crunching numbers.

Paul Tudor Jones' investment firm employs a weather derivatives analyst.

Weather derivatives are fairly new, the first one traded in 1997 and the CME introduced the first exchange-traded weather futures contracts in 1999.

The main buyers aren't hedge funds, they are insurance companies, farming conglomerates looking to insure against freezes and bad crops, electric companies, etc.

To see article GO HERE


Why the Fukushima disaster is worse than Chernobyl

Japan has been slow to admit the scale of the meltdown. But now the truth is coming out. David McNeill reports from Soma City

Monday, 29 August 2011
Yoshio Ichida is recalling the worst day of his 53 years: 11 March, when the sea swallowed up his home and killed his friends. The Fukushima fisherman was in the bath when the huge quake hit and barely made it to the open sea in his boat in the 40 minutes before the 15-metre tsunami that followed. When he got back to port, his neighbourhood and nearly everything else was gone. "Nobody can remember anything like this," he says.

Now living in a refugee centre in the ruined coastal city of Soma, Mr Ichida has mourned the 100 local fishermen killed in the disaster and is trying to rebuild his life with his colleagues. Every morning, they arrive at the ruined fisheries co-operative building in Soma port and prepare for work. Then they stare out at the irradiated sea, and wait. "Some day we know we'll be allowed to fish again. We all want to believe that."

This nation has recovered from worse natural – and manmade – catastrophes. But it is the triple meltdown and its aftermath at the Fukushima nuclear power plant 40km down the coast from Soma that has elevated Japan into unknown, and unknowable, terrain. Across the northeast, millions of people are living with its consequences and searching for a consensus on a safe radiation level that does not exist. Experts give bewilderingly different assessments of its dangers.

Some scientists say Fukushima is worse than the 1986 Chernobyl accident, with which it shares a maximum level-7 rating on the sliding scale of nuclear disasters. One of the most prominent of them is Dr Helen Caldicott, an Australian physician and long time anti-nuclear activist who warns of "horrors to come" in Fukushima.

Chris Busby, a professor at the University of Ulster known for his alarmist views, generated controversy during a Japan visit last month when he said the disaster would result in more than 1 million deaths. "Fukushima is still boiling its radionuclides all over Japan," he said. "Chernobyl went up in one go. So Fukushima is worse."

On the other side of the nuclear fence are the industry friendly scientists who insist that the crisis is under control and radiation levels are mostly safe. "I believe the government and Tokyo Electric Power [Tepco, the plant's operator] are doing their best," said Naoto Sekimura, vice-dean of the Graduate School of Engineering at the University of Tokyo. Mr Sekimura initially advised residents near the plant that a radioactive disaster was "unlikely" and that they should stay "calm", an assessment he has since had to reverse.

Slowly, steadily, and often well behind the curve, the government has worsened its prognosis of the disaster. Last Friday, scientists affiliated with the Nuclear and Industrial Safety Agency said the plant had released 15,000 terabecquerels of cancer-causing Cesium, equivalent to about 168 times the 1945 atomic bombing of Hiroshima, the event that ushered in the nuclear age. (Professor Busby says the release is at least 72,000 times worse than Hiroshima).

Caught in a blizzard of often conflicting information, many Japanese instinctively grope for the beacons they know. Mr Ichida and his colleagues say they no longer trust the nuclear industry or the officials who assured them the Fukushima plant was safe. But they have faith in government radiation testing and believe they will soon be allowed back to sea.

That's a mistake, say sceptics, who note a consistent pattern of official lying, foot-dragging and concealment. Last week, officials finally admitted something long argued by its critics: that thousands of people with homes near the crippled nuclear plant may not be able to return for a generation or more. "We can't rule out the possibility that there will be some areas where it will be hard for residents to return to their homes for a long time," said Yukio Edano, the government's top government spokesman. "We are very sorry."

Last Friday, hundreds of former residents from Futaba and Okuma, the towns nearest the plant, were allowed to visit their homes – perhaps for the last time – to pick up belongings. Wearing masks and radiation suits, they drove through the 20km contaminated zone around the plant, where hundreds of animals have died and rotted in the sun, to find kitchens and living rooms partly reclaimed by nature. "It's hard to believe we ever lived here," one former resident told NHK.

Several other areas northwest of the plant have become atomic ghost towns after being ordered to evacuate – too late, say many residents, who believe they absorbed dangerous quantities of radiation in the weeks after the accident. "We've no idea when we can come back," says Katsuzo Shoji, who farmed rice and cabbages and kept a small herd of cattle near Iitate, a picturesque village about 40km from the plant.

Although it is outside the exclusion zone, the village's mountainous topography meant radiation, carried by wind and rain, lingered, poisoning crops, water and school playgrounds.

The young, the wealthy, mothers and pregnant women left for Tokyo or elsewhere. Most of the remaining 6000 people have since evacuated, after the government accepted that safe radiation limits had been exceeded.

Mr Shoji, 75, went from shock to rage, then despair when the government told him he would have to destroy his vegetables, kill his six cows and move with his wife Fumi, 73, to an apartment in Koriyama, about 20km away. "We've heard five, maybe 10 years but some say that's far too optimistic," he says, crying. "Maybe I'll be able to come home to die." He was given initial compensation of one million yen (£7,900) by Tepco, topped up with 350,000 yen from the government.

It is the fate of people outside the evacuation zones, however, that causes the most bitter controversy. Parents in Fukushima City, 63km from the plant, have banded together to demand that the government do more to protect about 100,000 children. Schools have banned soccer and other outdoor sports. Windows are kept closed. "We've just been left to fend for ourselves," says Machiko Sato, a grandmother who lives in the city. "It makes me so angry."

Many parents have already sent their children to live with relatives or friends hundreds of kilometres away. Some want the government to evacuate the entire two million population of Fukushima Prefecture. "They're demanding the right to be able to evacuate," says anti-nuclear activist Aileen Mioko Smith, who works with the parents. "In other words, if they evacuate they want the government to support them."

So far, at least, the authorities say that is not necessary. The official line is that the accident at the plant is winding down and radiation levels outside of the exclusion zone and designated "hot spots" are safe.

But many experts warn that the crisis is just beginning. Professor Tim Mousseau, a biological scientist who has spent more than a decade researching the genetic impact of radiation around Chernobyl, says he worries that many people in Fukushima are "burying their heads in the sand." His Chernobyl research concluded that biodiversity and the numbers of insects and spiders had shrunk inside the irradiated zone, and the bird population showed evidence of genetic defects, including smaller brain sizes.

"The truth is that we don't have sufficient data to provide accurate information on the long-term impact," he says. "What we can say, though, is that there are very likely to be very significant long-term health impact from prolonged exposure."

In Soma, Mr Ichida says all the talk about radiation is confusing. "All we want to do is get back to work. There are many different ways to die, and having nothing to do is one of them."

Economic cost
Fukushima: Japan has estimated it will cost as much as £188bn to rebuild following the earthquake, tsunami and nuclear crisis.
Chernobyl There are a number of estimates of the economic impact, but thetotal cost is thought to be about £144bn.

Fukushima: workers are allowed to operate in the crippled plant up to a dose of 250mSv (millisieverts). 
Chernobyl: People exposed to 350mSv were relocated. In most countries the maximum annual dosage for a worker is 20mSv. The allowed dose for someone living close to a nuclear plant is 1mSv a year.

Death toll
Fukushima: Two workers died inside the plant. Some scientists predict that one million lives will be lost to cancer.
Chernobyl: It is difficult to say how many people died on the day of the disaster because of state security, but Greenpeace estimates that 200,000 have died from radiation-linked cancers in the 25 years since the accident.

Exclusion zone
Fukushima: Tokyo initially ordered a 20km radius exclusion zone around the plant
Chernobyl: The initial radius of the Chernobyl zone was set at 30km – 25 years later it is still largely in place.

Fukushima: Tepco's share price has collapsed since the disaster largely because of the amount it will need to pay out, about £10,000 a person
Chernobyl: Not a lot. It has been reported that Armenian victims of the disaster were offered about £6 each in 1986

Fukushima: The UN's Office for the Co-ordination of Humanitarian Affairs reported bilateral aid worth $95m
Chernobyl: 12 years after the disaster, the then Ukrainian president, Leonid Kuchma, complained that his country was still waiting for international help.