Dithering?

Euro-region central bank governors will hold emergency talks today intended to stop Spain and Italy from becoming the next victims of the sovereign-debt crisis and limit fallout from the first U.S. credit-rating cut in history.


The central bank chiefs will convene by conference call at 6 p.m. Paris time, said a euro-area central bank official who declined to be identified because the talks are confidential. A spokesman for the European Central Bank declined to comment. Finance ministry officials of the Group of Seven countries were due to hold a conference call starting at 6 p.m. in New York yesterday to discuss the crisis.

The flurry of talks comes as the U.S. downgrade by Standard & Poor’s threatens to further derail efforts to stop the debt crisis from engulfing the euro-area’s third and fourth-largest economies.

“Europe is in an incredibly dangerous situation,” Nick Kounis, head of macroeconomic research at ABN Amro in Amsterdam, said in an interview by telephone yesterday. “The risk is that the U.S. downgrade is just going to unsettle everyone even more. It’s a unique situation in that we are essentially in the heart of a European sovereign debt crisis, which has reached its meltdown phase.”

US Secretary of Defense Donald Rumsfeld WAS honored with the “Defender of the Constitution Award”….(whose constitution?)

A federal judge in the US has ruled that Donald Rumsfeld, the former defence secretary, can be sued by a former military contractor who was allegedly tortured and "unjustly" imprisoned in Iraq.

Lawyers for the man, who is in his 50s, said on Thursday that their client was preparing to come home to the United States on annual leave when he was abducted by the US military and kept in detention for nine months.

Court papers filed on his behalf said he was repeatedly abused, and then suddenly released without explanation in August 2006, The Associated Press news agency reported.

Two years later, he filed suit in a US district court in Washington arguing that Rumsfeld personally approved torturous interrogation techniques on a case-by-case basis and controlled his detention without access to courts, in violation of his constitutional rights.

The lawsuit said the then civilian contractor was held without justification while his family knew nothing about his whereabouts or even whether he was still alive.

Court papers filed on his behalf said he was repeatedly abused while being held at Camp Cropper, a US military facility near the Baghdad airport dedicated to holding "high-value" detainees.

Chicago attorney Mike Kanovitz, who is representing the plaintiff, said it appeared that the military wanted to keep his client behind bars so he would not tell anyone about an important contact he made with a leading religious official while helping collect intelligence in Iraq.

"The US government was not ready for the rest of the world to know about it, so they basically put him on ice,'' Kanovitz said in a telephone interview with the AP.

The government has said he was suspected of helping pass classified information to the enemy and helping anti-coalition forces get into Iraq.

But he was never charged with a crime, and he said he never broke the law and was risking his life to help his country.

Rumsfeld being shielded

The Obama administration has represented Rumsfeld through the justice department and argued that the former defence secretary cannot be sued personally for official conduct, AP reported.

The justice department also argued that a judge cannot review wartime decisions that are the constitutional responsibility of congress and the president.

And the department said the case could disclose sensitive information and distract from the war effort, and that the threat of liability would impede future military decisions.

But US District Judge James Gwin rejected those arguments and said US citizens are protected by the Constitution at home or abroad during wartime.

"The court finds no convincing reason that United States citizens in Iraq should or must lose previously-declared substantive due process protections during prolonged detention in a conflict zone abroad,'' Gwin wrote in a ruling issued on Tuesday.

Rumsfeld is appealing that ruling, which Gwin cited.

In many other cases brought by foreign detainees, judges have dismissed torture claims made against US officials for their personal involvement in decisions over prisoner treatment.

But this is the second time a federal judge has allowed US citizens to sue Rumsfeld personally.

Wayne R Andersen, US District Judge, said in the central US state of Illinois last year that two other Americans who worked in Iraq as contractors and were held at Camp Cropper, can pursue claims that they were tortured using Rumsfeld-approved methods.

Allende’s Ghost Strikes Back!

Riot police have battled high school and university students in the streets of Chile's capital, firing water cannons and tear gas and using officers on horseback to break up flaming barricades.
Police detained 235 students and at least two police officers were injured during Thursday's rallies, which Interior Minister Rodrigo Hinzpeter and other Chilean authorities said were illegal.

The students, pressing for major changes to Chile's underfunded and unequal public education system, set up barricades of burning tires at a dozen points around the city and paralyzing traffic.

While many tried to peacefully hold their ground, some hooded demonstrators threw rocks at police cars and passing buses.

"Everything has its limit," President Sebastian Pinera said, warning against the demonstrations.

Hinzpeter added that "the time for marching has run out."

"This seems like a state of siege. I imagine it must have been like this 30 years ago," responded Camila Vallejos, a spokeswoman for the striking university students, referring to Chile's 1973-90 military dictatorship.

"Even the right to congregate in public places isn't assured."

'Fight against the repression'

Despite the crackdown, Vallejos called for protesters to keep up the demonstration and bang pots "against the repression" through Thursday night.

Students, teachers and other education workers have participated in huge street demonstrations in recent weeks, with as many as 100,000 people joining their call for more government funding and a fundamental change in a system set up under the dictatorship of General.

Augusto Pinochet that largely left public schools at the mercy of underfunded municipalities.

Pinera offered a 21-point package of reforms on Monday and invited center-left lawmakers to sit down with him in the presidential palace to resolve the strikes.

About 1,300 police officers prevented the marchers from reaching the presidential palace. Hundreds of young people tried to break through barriers to converge on Santiago's Plaza Italia, a traditional gathering place. Other large groups came together at other points in the capital.

Each time police dispersed a large mass of demonstrators, they would regroup, only to be struck with water or tear gas again.

In various parts of the city, people could hardly breathe from the tear gas. Metro stations and were closed and public transportation paralyzed.
While many of the demonstrators tried to remain peaceful, other covered their faces in hoods and threw rocks at buses and police cars.

"I think the government has committed a grave mistake," Vallejos said. "They wanted to wipe out and make invisible this demonstration. With this the people will only come out in greater force because there's huge discontent."

Yield History

The yield is below the 4.05 percent average over the past decade and the average of 5.48 percent when the U.S. was running a budget surplus from 1998 through 2001.

Treasuries yield about 0.7 percentage point less than the rest of the world’s sovereign debt markets, Bank of America Merrill Lynch indexes show. The difference has expanded from 0.15 percentage point in January and is the most since 1993, when the data began. July’s returns for Treasuries compare with 0.62 percent for the rest of the world.

In auctions of two-, five- and seven-year notes last week totaling $99 billion, indirect bidders, a class of investors that includes international central banks, bought 35 percent of the bonds, up from 30 percent in the June sales. Saudi Arabia is pumping oil profits into U.S. bonds even as China, the biggest foreign holder of Treasuries, slows purchases.
The Saudi Arabian Monetary Agency’s holdings of foreign securities rose 12 percent this year to a record 1.32 trillion riyals ($350 billion) as of June 30, central bank data show. HSBC Holdings Plc estimates a “large proportion” of those investments are in Treasuries. China’s ownership was $1.16 trillion as of May 31, unchanged from the end of 2010, U.S. government data show.

“The bond market wasn’t viewing this as that big of an issue and the Treasury is still the highest quality asset on the globe,” said Hank Smith, the chief investment officer in Philadelphia at Haverford Trust Co., which oversees $6.5 billion.

The bond market has a long history of accurately predicting the future. Economists use the relationship between short- and long-term yields to forecast the nation’s growth. Three-month bill rates have topped 10-year note yields eight times since 1960, with recessions following in six of those cases. There hasn’t been a recession that wasn’t preceded by an inverted yield curve in that period.

Fortune Cookie reads : “Every excess becomes a vice.”

Investors have alleged widespread accounting irregularities and other problems at dozens of the Chinese companies that reverse-listed in the U.S., causing share prices to nosedive. Since March, some 30 Chinese firms have seen their auditors resign and at least 25 have been delisted from U.S. exchanges.
$18 BILLION GONE

A Reuters examination of a cross-section of 122 Chinese reverse mergers on U.S. markets found that between each stock's peak trading price and July 10, 2011, those companies saw a total of $18 billion of their market capitalization vanish.

Reuters interviewed nearly 100 industry participants and examined financial records of dozens of Chinese companies to paint the most detailed picture yet of the network of dozens of players involved in the reverse-mergers boom.

That industry hinges on a handful of leading "shell brokers" such as Halter who purvey paper companies; investment banks who specialize in financing a firm after a reverse merger; and auditors, usually small shops, who are lightly regulated in the U.S.--and not at all in China and Hong Kong. The controversy has stirred up new tensions between Washington and Beijing, which held talks on the matter in July. The Public Company Accounting Oversight Board, the U.S. auditing watchdog, issued a report in March about potential problems with the audits of Chinese companies formed through reverse mergers. The Securities and Exchange Commission has set up a working group to examine Chinese reverse mergers, and the Federal Bureau of Investigation has opened its own broad investigation, say people familiar with the situation.

The Chinese reverse-merger boom and bust offer insight into a little-understood corner of American business: the widespread use of shell companies, which can offer their owners a way to minimize regulatory scrutiny. The U.S. in recent years has called for much greater transparency in global business transactions. But on American shores, opaque shell companies are rife.

"It appears that some Chinese firms have seen a way to access the strongest public markets in the world, but through the weakest area of enforcement," says Republican Rep. Patrick McHenry, a member of the House Committee on Oversight and Government Reform.

REVERSE GEAR

A reverse merger hinges on a shell company-a firm without meaningful assets or operations, used as a vehicle for transactions-that's already listed on a stock exchange.

A deal typically starts with a so-called shell broker, anyone from a small shop to a larger firm such as Halter's. Brokers acquire shells, often domiciled in a secrecy-friendly state such as Delaware, Utah or Nevada. The broker then sells the U.S. shell to an operating company seeking to trade on a U.S. exchange-a transaction which, unlike an initial public offering, isn't overseen by regulators.

The acquiring firm thus becomes a publicly-traded company, with access to U.S. investors - but without the time, expense and scrutiny of a traditional initial public offering. Companies are incorporated under state rather than federal law, and so the federal overseer of stock flotations, the Securities and Exchange Commission, doesn't as a matter of course review reverse mergers until after the deal is done.

In Chinese deals, the buyer is often a holding company based in Delaware, the British Virgin Islands or other tax haven, which in turn controls the actual operations on mainland China. This structure complicates the ability of U.S. regulators to dig into the accounts of the resulting firms.

In recent years, one in three U.S. reverse mergers involved a Chinese operating company. In 2010, 260 reverse mergers were completed, according to deal tracker PrivateRaise. Of those, 83 deals involved operating companies in mainland China.

There are more than 1,200 dormant public companies in the U.S., PrivateRaise says. They can be purchased for as little as $30,000, then sold by shell brokers for as much as 10 times that amount or more. Brokers say that in 2007 and 2008, the peak of the market, Chinese firms would pay up to $800,000 for a high-quality shell, one with no lingering liabilities. Reverse mergers, to be sure, are a legitimate way to gain access to capital for smaller companies that can't afford a full-fledged initial public offering or don't need to raise large sums. The problem isn't the technique, defenders argue, but rather people who misuse it.

Invented in California and brought to you in Europe!

The first electric car battery swapping station in Europe opened here last month, the initial site in a network of 24/7 fully automated drive-through stations. There, the lithium-ion battery packs, which weigh about 600 pounds, will be removed from specially designed cars and replaced with a fully charged pack. The swap takes five minutes.
Is this plan — a solution that could make E.V’s practical for long trips — some sort of utopian E.V. fantasy? I thought so until I experienced the process myself.

I was in the second car to do a battery swap after the ribbon was cut on June 28. Passengers in the first car included Lykke Friis, Denmark’s minister of climate and energy, and Johnny Hansen, chief executive of Better Place Denmark, the local branch of the Silicon Valley company. It is building the swap stations and related businesses in Australia, China, Denmark, Israel (where the world’s first swap station is) and eventually, the United States.

Better Place has 19 more battery swap stations in the works for Denmark. “By the first of April, we will cover the whole country,” Mr. Hansen said, referring to 2012, with stations no more than 40 miles apart.

At this point, only Renault is making cars designed for quick battery swaps. The company stretched the gasoline-powered version of its Fluence, a Corolla-like sedan, by five inches to accommodate the suitcase-size 24-kilowatt-hour battery pack. The resulting Fluence Z.E., for zero emissions, goes into full production later this year, available in either swappable or fixed-battery versions.

My 20-minute drive in the Fluence Z.E. from the Better Place offices in Copenhagen to the swap station in the suburb of Gladsaxe, was pleasingly uneventful. The swap station adjoins a filling station, where a gallon of gasoline was priced at the equivalent of $9.15 and diesel was $8.40.

The battery swap was also uneventful. Swipe a membership card at the entrance and the garage door to the battery-change track, similar to a carwash tunnel, opens. Pull forward and the robot takes over — the driver simply shifts into neutral and lets go.

As the car is guided forward, it’s lifted a few inches. Inside the car, you hear buzzes and hums and feel vibrations, but there’s no view of what is happening below. About a minute into the experience, the dashboard message indicates empty battery — meaning it’s gone — after which there’s no air-conditioning, although music and other functions continue. During most of Denmark’s year, the brief lack of climate control would not be a problem, but during my trip, on a hot summer day, the sealed cabin quickly became steamy.

That small discomfort did not mar the significance of the occasion: four and a half minutes after entering the station, the car had a fresh battery. The sedan was lowered and we pulled out of the tunnel ready to drive another 100 miles or so, according to Renault’s range estimate. The Better Place robot worked.

Better Place subscribers purchase their cars, but not the expensive battery packs. For a fixed fee of about $350 a month, they will lease access to the batteries, swap stations and charge points.

Renault says it intends to produce more than 100,000 Fluence Z.E. sedans through 2015, although availability in Denmark will be limited. Another battery-swappable model from Renault, the Zoe Z.E. — a smaller hatchback more suited to Danish tastes — is expected next year. But it could be a number of years before other carmakers produce models that work with the Better Place stations.

The economics are challenging. Each station costs “a couple of million Euros” — about $3 million — to build, Mr. Hansen said. That is a big investment for stations that might barely be used in the next couple of years.

The Better Place business model is a top-down, central-office approach to electric car charging infrastructure. Whether that plan will work may be uncertain, but its Danish swap station does deliver as promised.

When E.V.’s finally arrive here, Denmark could be one of a few places in the world to have eliminated limited driving range and insufficient charging spots as potential obstacles to the adoption of electric cars.

The rules will also save consumers more than $8,000 a vehicle, on average, in fuel costs, the EPA said.

Automakers agreed to double the fuel economy of the vehicles they sell in the U.S. to a fleetwide average of 54.5 miles per gallon by 2025, President Barack Obama said.
A separate rule issued in 2009 takes effect next year, and requires automakers to increase average fuel economy to 35.5 mpg by 2016.

The White House negotiated the proposal, which will take effect in 2017, with automakers including General Motors Co. (GM), Ford Motor Co. (F) and Toyota Motor Corp. (7203) The administration proposed a 56.2 mpg requirement last month, up from a fleetwide average of 27 mpg today for cars and light trucks.

“This agreement on fuel standards represents the single most important step we’ve ever taken to reduce our dependence on foreign oil,” Obama said today at an event in Washington with auto executives.

Obama is seeking to limit the amount of fuel used by U.S. vehicles as part of a pledge to reduce oil imports by a third by 2025. The agreement with automakers, which also curbs greenhouse-gas emissions, comes as his administration negotiates with Congress on raising the U.S. debt ceiling to avoid default.

Obama used the event to promote his energy priorities and to highlight some of the issues being weighed in the standoff over raising the federal debt ceiling.

The agreement on higher standards “is only possible because we made investments in technology,” Obama said. A “sensible and balanced approach” is needed to make sure the U.S. is able to sustain economic growth in the future, he said.

A kangaroo court or kangaroo trial is a colloquial term for a sham legal proceeding or court

The United Arab Emirates will re-open a federal court hearing of five pro-democracy activists charged with insulting the Gulf country’s rulers in September, a lawyer for the defendants said.
The supreme federal court in Abu Dhabi, the UAE capital, heard from two out of eight witnesses on Monday and others will be heard when the case re-starts on September 26, lawyer Abdulhameed Alkumity said in an e-mailed statement. The court in Abu Dhabi was guarded by police who prevented journalists from entering the closed session.

Nasser bin Ghaith, a financial commentator who has taught at the Abu Dhabi campus of the Sorbonne, and Ahmed Mansoor, a blogger, are accused of seeking to undermine state security “in association with foreign powers.” They and three other men are also accused of insulting the UAE’s rulers. The men deny the charges.

The authorities clamped down on calls for reform after a petition signed by more than 100 people, including the five men on trial, was circulated in April. Shortly afterwards, the government also disbanded the elected boards of the Jurists’ Association and the Teachers’ Association, two civil society organisations which took part in the petition.

Monday’s proceedings were immediately criticised by a human rights group. “Whether they [the activists] are found innocent or guilty is one thing but the fact that they’re held in detention even though they don’t pose a threat to anyone while this trial continues is a travesty,” said Samer Muscati, a Middle East researcher with Human Rights Watch.

“I’m not sure what the point is of having this government show of force – except to intimidate the judiciary and strengthen the government’s hand,” Mr Muscati of Human Rights Watch said.