"There in the back of the fridge lies the US PGA Championship, pumped full of water and vitamins and preservatives, but still rotting away.

Nearly everyone in golf knows that the fourth major is past its sell by date.

So will someone please get off their vast, corporate behind and bin the mouldy old tournament.

That man is unlikely to be Allen Wronowski, the current president of the PGA of America. Mr Wronowski's waist band may well be large enough to circle the earth which is more than the occupant looks capable of doing.

The president is likely a very agreeable fellow - the US PGA has always been the most hospitable of the majors - but Wronowski's days as a man of action look behind him.

What a strange tableau it was at the denouement of golf's fourth major. There was the vasty Wronowski presenting the oversized Wanamaker trophy to the slender Keegan Bradley, a man who seemed to have been born without buttocks.

Was this a sports broadcast or some weird diet plan commercial?

The undernourished Bradley cried after holing the winning putt, as seems almost de rigueur for young America these days, and the TV audience was also overcome by emotion.

"Why, oh why," we sobbed, "have we spent the last three hours of our lives watching a barely mobile dumpling called Jason Dufner blow a five shot lead to a man with two surnames?"

It's the sort of question that has become commonplace in the recent history of the US PGA, or "glory's last shot" as it likes to style itself.

As one scribe noted, the PGA seems to have morphed into a competition to find "the world's khakiest man."

It is not as if golf's majors have a long and 'storied history', as TV America likes to dub it, or 'history' as we say in the English speaking world.

The initial Grand Slam of golf consisted of the Open Championship, the Amateur Championship, the US Open and the US Amateur.

Many of the previous winners of the US PGA Championship - first played in the middle of World War I and therefore not open to the thousands of golfers who were dying on the Somme - had no idea that they would subsequently be granted a 'major' victory.

Although the International Lawn Tennis Federation came up with the idea of an official Grand Slam in 1925, the modern quartet of golf majors is uncertain in its history.

Certainly the American pros once considered the Western Open a far more significant and lucrative event than the Open Championship.

The idea that the US PGA Championship is part of golf's grand history is just poppycock. It initially began as a matchplay championship, sponsored by the owner of a big department store, to enrich the likes of Walter Hagen and only switched to its current 72 hole strokeplay format in 1958.

The US PGA has largely ignored history. It kept going through all but one of the years of the Second World War. Defeating Naziism at that time was a major victory. Winning a restricted golf tournament on the other side of the Atlantic was not.

Let's see the US PGA for what it is, another American golf jamboree founded on the whim of a very rich man and shoehorned into history by a self-interested group of equipment salesmen, professional golfers and American media.

We can do so much better than that. If a combination of Asian TV networks and corporate interests like HSBC and Sony could come up with enough dosh, surely a new Oriental Open could replace the moribund US PGA.

America's influence is waning on and off the course as Tiger and Wall Street crash together.

Yes, Asia would be buying a major, but that is the way of professional sport. It is how the US PGA started and the Ryder Cup and many of golf's premier events.

And as Asia is already joined with New Zealand, Australia and South Africa in the President's Cup, maybe the fourth major could also come to these shores every now and again.

It is anachronistic for America still to stage three of the game's majors. We could build a statue to the 'unknown golfer' and place it in a square in Middle America to commemorate the passing of the US PGA and American heroes like David Toms, Larry Nelson and Keegan Bradley, khaki Confederates who all won glory's last shot in Atlanta.

This year's US PGA was the first major to be won by a belly putter. Uggh.

It's time to move on. It's time to make golf the global game it pretends to be.
 

Thaksin's travels are bad luck for Yingluck

17 August 2011

The Thai newspapers are full of news about Thaksin Shinawatra starting to travel again....and whether the Thai government is assisting his travel.

All this does is give Thaksin the attention he craves, rather than allowing Yingluck to start doing the job for which she was elected.

As for his Japan trip this month, Foreign Minister Surapong says it was the Japanese who requested the meeting with him. The Japanese then wanted to sound out the new government on what their view on Thaksin traveling to Japan was and whether their position had changed from the Abhisit government.

Once Surapong gave the all-clear and asked the Japanese help, the Japanese issued a visa in Dubai - apparently in Thaksin's Montenegren passport.

William Pesek at Bloomberg interprets Thaksin’s Japanese trip to signal that the new Yingluck government will look at bringing Thaksin home sooner than expected.

We don’t know the real reason why Thaksin went to Japan, but Japan is not the only country that Thaksin has gone to recently. He also went to Germany. In doing so Thaksin gave a message to Abhisit and Kasit saying I can now visit theses countries; which may also send a message (whether accurate or just perceived) on how outsiders view Thaksin and his conviction.

The trouble is that Thaksin has created an awkward position for the Yingluck government, in particular for Surapong who is facing enough problems because of his lack of direct experience in foreign affairs.

Thaksin wants to travel to say that he is not a criminal. This is his doing it is not Puea Thai who I suspect would prefer Thaksin to take a lower profile for some time.

A year of campaigning

13 August 2011

And so it starts. 15 months of expensive, wasteful campaigning until the November 2012 Presidential election.

If feels like only months since Obama's January 2009 inauguration. Maybe it only feels like months because so little has been achieved; and hope has turned to stagnation.

I always thought Obama was a shoe-in for a two term presidency. Sadly the Republican forces are massing; and they are invigorated by mid term elections that gave them control of the lower house and by Obama's perceived failure to deliver. This of course fails to acknowledge the lousy hand that he inherited from eight years of George Bush.

Now it looks increasingly likely that the Texas Governor, Rick Perry, will go head to head with Mitt Romney, former Massachusetts Governor, in seeking the Republican nomination to take on Barack Obama. The only unknown is whether the divisive Sarah Palin will join the race.

Perry, who has been labelled "Bush on steroids", is to formally announce that he is standing on Saturday at a conservative conference in Charleston, while Romney emerged unscathed from a debate of the presidential candidates in Iowa on Thursday night.

The two are likely to leave the rest of the crowded field behind.

Palin kept speculation alive by putting in an appearance at the Iowa state fair, an agricultural show where the candidates were scheduled to make stump speeches throughout Friday.

Head to head (from the Guardian)

Mitt Romney

Born: 12 March 1947
Background: privileged. He was brought up in Michigan, where his father was governor.
Religion: Mormon. May be a problem for him with some Christian evangelicals suspicious of his beliefs.
Political experience: Governor of Massachusetts from 2003.
Political beliefs: In order to get elected and to govern Massachusetts, one of the most liberal states in America, he moved to the centre, and introduced health reforms similar to those later brought in by Barack Obama. He has since shifted to the right.
Strengths: He has a large personal fortune that he can tap. He will also benefit from the tendency in the Republican party to give the top spot to previous runners-up - he lost out to John McCain in the 2008 election.
Weaknesses: Poor speaker, lifeless, with one cliche followed quickly by another. Seen as "flip-flopper", switching beliefs for electoral convenience.

Rick Perry

Born: 4 March 1950
Background: Son of relatively poor ranchers in Paint Creek, near Abilene, Texas. Served as captain in the air force.
Religion: Methodist and part-time preacher who organised 30,0000-strong prayer rally in Houston, Texas, last weekend. Can expect support of large bloc of Christian evangelicals, who have a lot of sway in Republican politics.
Political experience: In third term as governor of Texas.
Political beliefs: Began as a Democrat but quit in 1989 and is now a solid Republican rightwinger.
Strengths: Unemployment is the number one issue in America and, while he has been governor, Texas has accounted for at least a quarter of all job growth in the US. He is a good, natural speaker and has a rough-hewn charisma.
Weaknesses: The Texas job growth has been partly because of strong anti-union laws that encouraged companies to move from elsewhere in US. His views on social issues such as opposition to same-sex marriages, while appealing to some Christian evangelicals, will alienate some. One of his biggest drawbacks is whether American voters, just four years after the Bush presidency, are ready for another rightwing Texan.
 

Cameron's idiotic position on social networks

13 August 2011

How sad is this: China's official Xinhua newswire has used the British PM's remarks to justify China's own web censorship. The Xinhua headline was "Britain's U-turn over web-monitoring."

And this is some of the Xinhua article:

"BEIJING, Aug. 12 (Xinhua) -- Following days of violent riots in Britain, speculation has grown as to why and how the trouble spread so rapidly.

Apparently the rioters used social media, like Twitter, Facebook and the Blackberry messenger system and Prime Minister David Cameron said Thursday he's looking at banning potential troublemakers from using the online services.

The British government, once an ardent advocate of absolute Internet freedom, has thus made a U-turn over its stance towards web-monitoring.

Learning a hard lesson from bitter experience, the British government eventually recognized that a balance needs to be struck between freedom and the monitoring of social media tools.

Cameron himself admitted that the "free flow of information can be used for good. But it can also be used for ill."

For the benefit of the general public, proper web-monitoring is legitimate and necessary."

Oh dear. People are rioting; lets cut off all freedom of speech and expression. Better still; lets shut down government. Mr Cameron’s high-profile backbencher Louise Mensch instead advocates simply pulling the plug on Facebook, Twitter and BBM when trouble strikes. Aside from the uncomfortable comparisons with Hosni Mubarak’s Egypt that this invites, it brings its own technical and legal challenges.

Sorry but any attempt to exert state control over social media will fail. Bad things happen when governments take advantage of fear and instability to restrict freedom of speech.

Social media tools don't cause, fuel or incite rioting. They're neither a force for good nor a force for evil. They are simply communication tools.

Replace "social media" with "telephone" to get a sense of how ridiculous these statements will seem in 20 years. "How the telephone fuelled Britain's first 21st century riot." "Rioting thugs call each other on the telephone to boost their number in thieving store raids." "When people are using the telephone for violence we need to stop them."

To be fair, (and the Chinese did warp his words) Cameron didn't suggest a total web and social media blackout, like the one imposed on Egypt during the recent revolution. What he's considering is putting a stop to "people communicating via these websites and services when we know they are plotting violence, disorder and criminality."

But even a total web blackout wouldn't necessarily stop the rioting, just like it didn't stop the revolution in Egypt. Spot-blocking suspected rioters would also eliminate a crucial form of evidence.

If Cameron follows through on his proposal, it may prove totally ineffective, even counterproductive. What he would certainly accomplish is a serious and frightening erosion of free speech. In the long run, that's even more disturbing than the riots.

Blowing a good career

13 August 2011

Cathay Pacific has confirmed that the two employees caught in a set of Internet photos apparently engaging in oral sex on board an aircraft have left the company.

The Hong Kong carrier launched an investigation last week after photos emerged of a woman in a Cathay cabin crew uniform performing oral sex on a man, reportedly her boyfriend, on board an aircraft.

"I can confirm that two members of our crew shown in compromising situations in photographs published recently in Chinese-language daily newspapers are no longer employees of the company," Cathay chief executive John Slosar said in a statement released late on Friday.

"I know that many people were disturbed by the damage this incident caused to the reputation of our cockpit and cabin crews."

It was not clear whether the pair were sacked or resigned voluntarily, as the airline said it would not disclose details.

The airline also refused to say whether the incident took place in the plane's cockpit, but said the investigation found no evidence to suggest the act happened on any of its flights while airborne. Really? We are supposed to swallow that ?

Cathay said the findings of the investigation would be submitted to the city's aviation authorities.

The photos prompted action from the Hong Kong flag carrier after they were circulated on an online forum for pilots and later attracted the attention of local media.

The pilot told Apple Daily that the pictures were stolen from his computer.

'Strategic partnership' or monopoly?

12 August 2011

I doubt Tony Fernandes at Air Asia truly saw the irony of his twitter message last night. He was complaining about the Malaysian Airport Authority monopoly that allows them to increase car parking charges by 67%.

Odd really, as he had only the previous day signed a so called strategic agreement that will create a near monopoly in the Malaysian skies.

Malaysian Airways, Firefly, Air Asia and Air Asia X control between them 78% of all air traffic movements at Kuala Lumpur's international airport. No one else even comes close.

The airlines, Malaysia Airlines, budget carrier Air Asia and long-haul, low-cost operator AirAsia X have entered into a comprehensive collaboration agreement. In many countries this would fall foul of competition laws.

As part of the deal Tune Air and Khazanah Nasional Berhad, the major shareholders of AirAsia and Malaysia Airlines respectively, have agreed to acquire from each other existing shares of both companies. As a result, Tune will hold 20.5 per cent of shares in Malaysia Airlines and Khazanah will hold ten per cent of shares in AirAsia with a proposal to double this stake to 20 per cent in the future.

“Broadly, the Collaboration Agreement enables Malaysia Airlines, AirAsia and AirAsia X to respectively focus on business segments in which they are capable of developing the most value,” say the carriers in a joint statement.

What this means is that competitive routes will be cut and fares increased. There is also talk of interlining.

The Collaboration Agreement will come into effect immediately upon its execution and will remain in effect for a period of five years from the date of signing with an option for a further five-year renewal.

Executives at the airlines have denied their new agreement will lead to major network changes, but there must be some level of rationalisation, especially in the domestic market.

According to the latest schedule data, the airlines’ networks overlap directly on 38 routes, while there are some indirect synergies in some markets. These include London, where Malaysia Airlines serves Heathrow and Air Asia X flies to Stansted (Gatwick from the end of October) and Paris where Malaysia Airlines flies to CDG and Air Asia X to Orly airports.

So where there used to be fierce competitors MAS and Air Asia have chosen to collaborate instead. Consumers will be the losers.

Expect higher ticket prices, less frequent flights, poorer service levels and reduced job prospects.

The growth of Air Asia which broke MAS’ dominance of Malaysian air travel gave millions of Malaysians the opportunity to fly. The competition introduced by Air Asia resulted in in more connectivity, choice and jobs for Malaysians.

As the airlines competed, Malaysians got the opportunity to fly to more destinations, more frequently and at cheaper prices.

In the process, MAS itself introduced yet another new airline – community carrier Firefly, whose turbo-prop planes opened up yet more destinations and more choice at reasonable prices.

It is not just consumers who benefited. Working Malaysians also benefited. Those in the airline industry – whether flight crew, or cabin crew or ground services and other support personnel – now had a choice of employers. And the millions of new passengers flying around also contributed to economic growth across the country as they consumed other goods and services during their travels.

The new collaboration will end much of this.

Maybe all this is aimed at saving the national carrier, MAS. But it is bad news for Malaysian consumers and I think damages Fernandes who has long portrayed himself as a champion of the consumer. Everyone can fly will be Some can fly at a price.

The moral decay of our society is as bad at the top as the bottom

12 August 2011By Peter Oborne The Daily Telegraph

(This is a first - in ten years this is the first time I have referenced an article from the UK's telegraph newspaper - it is known as the Torygraph for a reason....but this article from their senior political editor is unusual. Ok it continues to trumpet the Telegraph's ground breaking work on government expense scandals - but it does go to the heart of what is rotten in the state of England.)

David Cameron, Ed Miliband and the entire British political class came together yesterday to denounce the rioters. They were of course right to say that the actions of these looters, arsonists and muggers were abhorrent and criminal, and that the police should be given more support.

But there was also something very phony and hypocritical about all the shock and outrage expressed in parliament. MPs spoke about the week’s dreadful events as if they were nothing to do with them.

I cannot accept that this is the case. Indeed, I believe that the criminality in our streets cannot be dissociated from the moral disintegration in the highest ranks of modern British society. The last two decades have seen a terrifying decline in standards among the British governing elite. It has become acceptable for our politicians to lie and to cheat. An almost universal culture of selfishness and greed has grown up.

It is not just the feral youth of Tottenham who have forgotten they have duties as well as rights. So have the feral rich of Chelsea and Kensington. A few years ago, my wife and I went to a dinner party in a large house in west London. A security guard prowled along the street outside, and there was much talk of the “north-south divide”, which I took literally for a while until I realised that my hosts were facetiously referring to the difference between those who lived north and south of Kensington High Street.

Most of the people in this very expensive street were every bit as deracinated and cut off from the rest of Britain as the young, unemployed men and women who have caused such terrible damage over the last few days. For them, the repellent Financial Times magazine How to Spend It is a bible. I’d guess that few of them bother to pay British tax if they can avoid it, and that fewer still feel the sense of obligation to society that only a few decades ago came naturally to the wealthy and better off.

Yet we celebrate people who live empty lives like this. A few weeks ago, I noticed an item in a newspaper saying that the business tycoon Sir Richard Branson was thinking of moving his headquarters to Switzerland. This move was represented as a potential blow to the Chancellor of the Exchequer, George Osborne, because it meant less tax revenue.

I couldn’t help thinking that in a sane and decent world such a move would be a blow to Sir Richard, not the Chancellor. People would note that a prominent and wealthy businessman was avoiding British tax and think less of him. Instead, he has a knighthood and is widely feted. The same is true of the brilliant retailer Sir Philip Green. Sir Philip’s businesses could never survive but for Britain’s famous social and political stability, our transport system to shift his goods and our schools to educate his workers.

Yet Sir Philip, who a few years ago sent an extraordinary Ł1 billion dividend offshore, seems to have little intention of paying for much of this. Why does nobody get angry or hold him culpable? I know that he employs expensive tax lawyers and that everything he does is legal, but he surely faces ethical and moral questions just as much as does a young thug who breaks into one of Sir Philip’s shops and steals from it?

Our politicians – standing sanctimoniously on their hind legs in the Commons yesterday – are just as bad. They have shown themselves prepared to ignore common decency and, in some cases, to break the law. David Cameron is happy to have some of the worst offenders in his Cabinet. Take the example of Francis Maude, who is charged with tackling public sector waste – which trade unions say is a euphemism for waging war on low‑paid workers. Yet Mr Maude made tens of thousands of pounds by breaching the spirit, though not the law, surrounding MPs’ allowances.

A great deal has been made over the past few days of the greed of the rioters for consumer goods, not least by Rotherham MP Denis MacShane who accurately remarked, “What the looters wanted was for a few minutes to enter the world of Sloane Street consumption.” This from a man who notoriously claimed Ł5,900 for eight laptops. Of course, as an MP he obtained these laptops legally through his expenses.

Yesterday, the veteran Labour MP Gerald Kaufman asked the Prime Minister to consider how these rioters can be “reclaimed” by society. Yes, this is indeed the same Gerald Kaufman who submitted a claim for three months’ expenses totalling Ł14,301.60, which included Ł8,865 for a Bang & Olufsen television.

Or take the Salford MP Hazel Blears, who has been loudly calling for draconian action against the looters. I find it very hard to make any kind of ethical distinction between Blears’s expense cheating and tax avoidance, and the straight robbery carried out by the looters.

The Prime Minister showed no sign that he understood that something stank about yesterday’s Commons debate. He spoke of morality, but only as something which applies to the very poor: “We will restore a stronger sense of morality and responsibility – in every town, in every street and in every estate.” He appeared not to grasp that this should apply to the rich and powerful as well.

The tragic truth is that Mr Cameron is himself guilty of failing this test. It is scarcely six weeks since he jauntily turned up at the News International summer party, even though the media group was at the time subject to not one but two police investigations. Even more notoriously, he awarded a senior Downing Street job to the former News of the World editor Andy Coulson, even though he knew at the time that Coulson had resigned after criminal acts were committed under his editorship. The Prime Minister excused his wretched judgment by proclaiming that “everybody deserves a second chance”. It was very telling yesterday that he did not talk of second chances as he pledged exemplary punishment for the rioters and looters.

These double standards from Downing Street are symptomatic of widespread double standards at the very top of our society. It should be stressed that most people (including, I know, Telegraph readers) continue to believe in honesty, decency, hard work, and putting back into society at least as much as they take out.

But there are those who do not. Certainly, the so-called feral youth seem oblivious to decency and morality. But so are the venal rich and powerful – too many of our bankers, footballers, wealthy businessmen and politicians.

Of course, most of them are smart and wealthy enough to make sure that they obey the law. That cannot be said of the sad young men and women, without hope or aspiration, who have caused such mayhem and chaos over the past few days. But the rioters have this defence: they are just following the example set by senior and respected figures in society. Let’s bear in mind that many of the youths in our inner cities have never been trained in decent values. All they have ever known is barbarism. Our politicians and bankers, in sharp contrast, tend to have been to good schools and universities and to have been given every opportunity in life.

Something has gone horribly wrong in Britain. If we are ever to confront the problems which have been exposed in the past week, it is essential to bear in mind that they do not only exist in inner-city housing estates.

The culture of greed and impunity we are witnessing on our TV screens stretches right up into corporate boardrooms and the Cabinet. It embraces the police and large parts of our media. It is not just its damaged youth, but Britain itself that needs a moral reformation.

Another rake on the problems facing Britain from Russell Brand in the Guardian.

EK updates

12 August 2011

Tokyo Narita Increase from 5 weekly to Daily from 30OCT11. 77W operating. No more two or three day layovers in Tokyo; this will now be a stay one night and come back the next day flight. Not sufficient time to enjoy Tokyo.

The new Singapore flight (EK 354) will only be five weekly at first, increasing to daily in February. Singapore service increases from 14 to 19 weekly (excluding the 1-stop via CMB) from 30OCT11, and then increase to 21 from 01FEB12. EK354/355 is the new flight, there is still no tag-on flight despite the airplane sitting at SIN for a lengthy period of time. I still think this flight will continue to Bali.

Is EK missing out on China?

11 August 2011

Qatar Airways has announced that on 28 November 2011it will become the First Middle-Eastern carrier to launch service to Western China. Qatar will offer 3 weekly Doha – Chongqing service, on board 2-class Airbus A330-200 aircraft.

The schedule:

QR848 DOH0115 – 1305CKG 332 135
QR849 CKG0100 – 0500DOH 332 246

Etihad has already announced flights to Chengdu.

Emirates used to be the pioneer and other airlines would follow. But EK appears focused on adding capacity to existing routes and maybe opening new routes to the USA. But I am surprised that they are not taking the initiative on Chengdu, Chongqing and Kunming.

Emirates' message to Airbus

11 August 2011

Air Transport World reports that Emirates Airline President Tim Clark remains skeptical about the Airbus A350's operating performance, and is particularly concerned about the A350-1000.

Clark has previously said that, according to the airline's calculations, the -1000 needs a 105,000 lb. thrust engine to truly leapfrog the Boeing 777-300ER, which means a new fan and significant wing pylon and undercarriage modifications. In an interview last week in Vienna, he told ATW that the A350-900, which will be deployed on 85% of the routes EK plans to utilize the A350, "will be a fine aircraft."

But he does not shy away from expressing his displeasure with the A350-1000 performance parameters outlined by Airbus at the Paris Air Show in June, when it was revealed that Rolls-Royce is developing a higher thrust variant of the Trent XWB engine that will power the aircraft. "In our view, the aircraft is heavy and to deal with the extra weight, you've got increase the thrust," he elaborated. "We believe that the specific fuel consumption gain Rolls-Royce says the [-1000 will] have will be lost because of the extra weight."

EK has 50 A350-900s and 20 -1000s on order, but Clark is concerned that the -1000 won't meet the airline's needs. EK has not decided if it will still take delivery of the aircraft or perhaps convert its A350-1000 orders to -900s—or, worse from Airbus's perspective, cancel the orders in favor of a potential next generation Boeing 777-300ER.

"I told Airbus I really want to see the aircraft flying," Clark said. "Let's certify the A350-900 and then we'll decide what we are going to do. [Airbus] still has to do work on [the -1000]."

Though he is more satisfied with the A350-900, Clark noted the aircraft is heavy as well. But he said, "I think it will be okay. The aircraft will replace all of our A330s, 777-200s and A340s. The only [concern] on the -900 is that it gives us just 274 seats in a three-class configuration. It will be too small. We need 340 seats."

That us a pretty big concern for an aircraft that seems critical to Emirates' future plans and that incidentally has still not flown.

Why?

11 August 2011

The big question of the week. And one that has no simple answer.

Thirty years on from the Brixton and Toxteth riots of 1981, England's inner cities erupted this week in violence and looting.

There is always a catalyst for this sort on unrest. Something that releases all the built up indignation and hatred. Once again it was an allegation of police brutality. The Metropolitan Police has improved significantly since the 1980s but its response to the shooting of Mark Duggan in Tottenham by its Operation Trident team was inept. It was wrong that Mr Duggan's family had to wait 36 hours to see his body and that confusion over whether the suspect had fired at police was allowed to spread.

The riot that exploded in Tottenham in response at the weekend took place in an area with the highest unemployment in London, whose youth clubs have been closed to meet a 75% cut in its youth services budget.

But that catalyst does not explain why the riots moved so quickly from Tottenham to other London suburbs and then to other cities across the UK. This suggests a far more complex and profound sense of social alienation.

The reaction of the British media, government and middle England were fearfully predictable. Birching. Corporal punishment. Vigilante groups. Newspaper headlines crying out "scum." Ministers calling for social networks, used to organise and move protestors, to be closed down. Freedom of speech and movement under assault. The mistake here is to blame the medium and ignore the motive.

Prime Minister Cameron describes the behaviour of the youths as "criminality, pure and simple" failing to consider "why?"

So what is going on? The riots are an uprising against the coalition's spending cuts. Many of the cuts deemed responsible for the violence have not even taken effect. They may in time make matters worse. The answers are deep rooted in decades of history that have caused social and economic deformities.

Simple view; education ends at 16; and for too many young people education gives them nothing that they can use when they leave school too early at 16. After school activities no longer exists. After school facilities are in disrepair. Trades and apprenticeships that used to be the back bone of British industry have been dramatically eroded.

Schools close their doors at mid-afternoon, Monday to Friday. Extra-curricular activities are out the window.

And forget university places: these are being cut back under the weight of a tripling of tuition fees. For richer kids or foreign students only.

Worse with both parents working, or single parent families, kids are left to look after themselves, to roam with their mates looking for the thrills that come from the protection of a pack.

Too many young people feel that have no stake in their locality or their country. Youth crime is a problem for all developed countries but, and inevitably the problem is worst in those societies in which the gap between rich and poor is greatest.

There is universal condemnation of the looters. Businesses have been abused; homes burned; lives terrorised. Desperately needed jobs have gone. 

It is even admirable that people are ready to defend their neighbourhoods. But it is too easy for these vigilante groups to be taken over by racist and hate groups. Anarchy. There are good reasons why security is done by the state. The police need the means and the public support to enable them, and them alone, to do their job.

But to refuse to recognise the causes of the unrest is to make it more likely to recur. Some of the media will not accept this. But one trip through some of London's poorer suburbs or through the old industrial cities of northern England reveal far too much about urban deprivation.

Simple statistic; in the UK black people are 26 times more likely to be stopped and searched by police than their white counterparts.

And just who are the country's real hooligans; government support for Britain's banks has reached a staggering Ł850bn and the eventual cost to taxpayers will not be known for years. Worse still, despite salvaging the banks they are still issuing massive redundancy notices.

The National Audit Office (NAO) even revealed in 2009 that Ł107m will be paid to City advisers called in to work on the rescue because the Treasury was too "stretched" to cope with the sudden financial crisis which broke in the autumn of last year. So the financial crisis really just lined the pockets of the lawyers and bankers.

And what drove the banking crisis; massive cheap credit fuelling greed and crazy consumerism. It is hardly a great surprise that the people left out by that capitalist boom are the ones who now loot a phone or a tv.

The demise of British industry and traditional trades is not helped by government sponsored decision making; controversy is raging over the government's decision to appoint Siemens as the preferred bidder for the Thameslink Rolling Stock Programme. The reserve bidder is Bombardier, based in Derby, which is the last train manufacturer in Britain.

Bombardier's 3,000-strong workforce should now be celebrating the award of this Ł1.4 billion contract guaranteeing work in Derby for the next four years. Instead the government's apparent preference for German-built trains has already resulted in Bombardier announcing nearly 1,500 job losses, with more likely later this year.

For every job at Bombardier there are at least four more in its supply chain companies, so these 1,500 job losses at Bombardier actually equate to 7,500.

That would be bad enough, but beyond the autumn, Bombardier only has enough work for a few hundred people delivering a contract for London Underground.

The total impact on employment in the Derby area could ultimately be closer to 14,000 job losses in the railway industry.

What can and should the government do - simple - invest and employ people.

The government has cited commercial confidentiality as the reason for refusing to give details about its claims that Siemens offered better value for money.

The future of the British train-building industry with a proud tradition stretching back more than 170 years hangs in the balance, as do the livelihoods of thousands of Derby families.

Meanwhile, the latest phase of the economic crisis lurching back and forth between the United States and Europe risks tipping austerity Britain into slump or prolonged stagnation. So the spending cuts will be here to stay. And too many young people will still be given no hope.

I am not arguing that economic hardship justifies looting -- to say that it does is to insult the many young people and community leaders who strive to overcome that hardship without resorting to crime. But it is also a mistake to think that condemning the rioters is an alternative to trying to understand them.

Understanding the cause is a complex task involving psychological, social, and cultural factors. Take something as mundane as boredom: clearly it has to be a factor? Many of the rioters are far younger than their counterparts in the 1980s. Surveys of young people find 8 in 10 saying they have little to do outside school, and no one is surprised when youth anti-social behaviour and petty crime increase during the long summer holidays; this is not a new problem but it is likely to get worse with the cuts to youth services.

It is economic factors, however, which are the most significant. Again, youth unemployment is not an excuse for criminality but does anyone believe it is not a factor? Youth unemployment remains historically high at around 20 per cent and of course unemployment was even higher among young black people, close to 50 per cent.

IPPR's research suggests that around ten years ago, roughly one in ten of 18-24 year olds had been unemployed for a year; according to the latest figures it is now one in four, and higher still among young men.

For maybe the first time in British history there is a generation growing up that will suffer for the rest of their working lives from poor job prospects, low skills and repeated spells out of work.

The government's talks of tackling youth unemployment through private sector economic growth. But that growth looks ever more fragile. At the same time tuition fees are being increased, funding for colleges and skills training has been cut, and the Education Maintenance Allowance has been abolished. The young person's job guarantee, a temporary measure aimed at mitigating the scarring effects of long term unemployment, has also been scrapped.

Unemployment is not an excuse. But what if government could announce a guaranteed job at the minimum wage for all young people who have been out of work for a year.

I was wondering why there have not been similar riots in the economically depressed inner cities of the USA. One reason; most kids are afforded the chance to join all manner of clubs and sports teams. Staying behind after school isn’t abnormal or uncool, because peer pressure works in that direction. Hours of evening and weekend activity keep school students physically active and mentally stimulated. Granted, there are schools that fail and pupils that fail – just like anywhere.

But in US cities you will not find bored teenagers habitually roaming the streets. You are unlikely to hear this in the US: “Nobody is doing nothing for us - not the politicians, not the cops, no one,” a 19-year-old who lives near Tottenham, the blighted London neighbourhood where the riots started.

In 2008, there were more than 1 million reported cases of violent crimes in England and Wales alone. By comparison, there were 331,778 reported incidents in France and some 210,885 incidents in Germany. Violent crime carried out by children and teenagers is also among the highest in Europe.

While business and families do not deserve their losses or to be live in fear the reality is that the the UK deserves these riots; they are the result of decades of complacency; of preserving the status quo and of bailing out the undeserving.

Murdoch's headline writers call the rioters and looters "morons", "thugs" and "idiots." I doubt they see the irony. Sadly.

"SWEEP SCUM OFF OUR STREETS" thundered the Express front page confirming the Express as the lowest of the low.

Mall shambles

11 August 2011

Retailers in Dubai Mall's gold souk have been given just over three weeks to close up their shops for renovations. The notice, which was delivered a week ago has informed outlets in certain areas of the gold souk that they have until September 4 to leave.

The Gulf News say that according to Chetan Dhakan, owner of National Jewellery and two other shops in the gold souk, the renovations have been in discussions for about a year now. This is the first time, however, that they have received an official notice.

"We are not sure if this will happen for sure. They are always changing their minds and there is talk that it might be delayed," said Dhakan.

He added that around 30 shops situated in certain areas of the gold souk, such as Caravan Court, have been given notices.

The notices are unclear as to what kind of renovation will take place and retailers have not yet been told what will happen to their shops after the renovation and how long the work is expected to take.

"We have heard from others that they are going to break down the walls and open up the entrances so it's more accessible, but we don't know exactly what is happening," said Affan, a showroom manager at Mahallati Jewellery.

When contacted, Emaar, the developer behind Dubai Mall, was not available for comment. I never understand this. You have issued the notice; you must have a plan; what is wrong with being transparent and honest. Oops, my mistake, we are talking about a Dubai developer. Transparancy and honestly are not words they seem to understand.

Affan said this closure comes at an unfortunate time.

"Sales right now are slow, as they usually are at around this time of the year. Our high season is after Eid and until December and we will lose those months due to this renovation," he said.

To be fair to Emaar the Dubai Mall gold souk is a bit of a disaster. A walk through the souq show many stores have already closed; and have left with rent unpaid. 

A retailer, who did not want to be named told the Gulf News that a reason for the souk not doing well was its structure. "It's like a maze and in a space with 270 outlets, there's not a single rest room. It's a really bad design," he said.

At its launch, the gold souq was highlighted as one of the key attractions of Dubai Mall.

Worse still for retailers is that they will face higher rent levels if they are looking to renew their contracts. According to the retailer Gulf News spoke to, shop owners have been informed contract renewals for another year will entail hikes in rent and they will have to take up bigger retail spaces than the smaller ones that are available now.

None of this sounds very promising for the retailers; the souk or this part of the mall.

Anything for a dollar

9 August 2011

Bahrain has called in a Washington PR firm to tackle the portrayal of this year's anti-government protests by foreign media

Qorvis Communications has been appointed; they list the Kingdom of Saudi Arabia and Amazon.com among their clients.

Qorvis has already issued its first statement to the press on behalf of Bahrain’s Ministry of Health, condemning a report from charity Medecins Sans Frontieres that claimed its Bahrain office had been raided and one employee arrested.

Qorvis Communications will be paid $40,000 per month in addition to expenses for travel, production and accommodation, a contract signed by managing partner, Michael Petruzzello and Bahrain’s Minister of Foreign Affairs, Sheikh Khalid Bin Ahmed Bin Mohamed Al Khalifa.

Bahrain has repeatedly blames the unrest on outside forces seeking to destabilise the country. The Gulf state this week accused Doha-based Al Jazeera of “slander and lies” after it aired a documentary purporting to show human rights abuses by government forces against activists.

In March, Bahrain's rulers imposed martial law and called in troops from fellow Sunni-ruled Gulf neighbours to quell weeks of unrest led by mostly Shi'ite protesters.

Sometimes people should simply turn down work. Earlier this year Huffington Post reported that several Qorvis partners had departed the firm because, in the words of one unnamed insider, "I just have trouble working with despotic dictators killing their own people." Qorvis had previously worked for Bahrain through another PR firm, Bell Pottinger.

Sad what some people will do for a lucrative contract.

Germany 'releases royal jet'

9 August 2011

The Bangkok Post reports that a court in Germany has released the Boeing 737 seized from HRH Crown Prince Maha Vajiralongkorn, according to former prime minister Abhisit Vejjajiva.

Mr Abhisit told reporters the government has posted the full 38 million euros bond demanded by Walter Bau company in an account to be controlled by the German court.

As a result, the court released the jet.

Terms of the agreement were unclear, as was the role of Mr Abhisit.

The government used public money for the deal. The Crown Prince had earlier offered to pay expenses of the legal fight, but Mr Abhisit told him it was a civil matter and the government would cover the expenses.

Panic on the streets of London

9 August 2011 - PennyRed

One of the best attempts to explain events from last night in London and now across the UK - and an article that should be widely read:

"I’m huddled in the front room with some shell-shocked friends, watching my city burn. The BBC is interchanging footage of blazing cars and running street battles in Hackney, of police horses lining up in Lewisham, of roiling infernos that were once shops and houses in Croydon and in Peckham. Last night, Enfield, Walthamstow, Brixton and Wood Green were looted; there have been hundreds of arrests and dozens of serious injuries, and it will be a miracle if nobody dies tonight. This is the third consecutive night of rioting in London, and the disorder has now spread to Leeds, Liverpool, Bristol and Birmingham. Politicians and police officers who only hours ago were making stony-faced statements about criminality are now simply begging the young people of Britain’s inner cities to go home. Britain is a tinderbox, and on Friday, somebody lit a match. How the hell did this happen? And what are we going to do now?

In the scramble to comprehend the riots, every single commentator has opened with a ritual condemnation of the violence, as if it were in any doubt that arson, muggings and lootings are ugly occurrences. That much should be obvious to anyone who is watching Croydon burn down on the BBC right now. David Lammy, MP for Tottenham, called the disorder 'mindless, mindless'. Nick Clegg denounced it as 'needless, opportunistic theft and violence'. Speaking from his Tuscan holiday villa, Prime Minister David Cameron – who has finally decided to return home to take charge - declared simply that the social unrest searing through the poorest boroughs in the country was "utterly unacceptable." The violence on the streets is being dismissed as ‘pure criminality,’ as the work of a ‘violent minority’, as ‘opportunism.’ This is madly insufficient. It is no way to talk about viral civil unrest. Angry young people with nothing to do and little to lose are turning on their own communities, and they cannot be stopped, and they know it. Tonight, in one of the greatest cities in the world, society is ripping itself apart.

Violence is rarely mindless. The politics of a burning building, a smashed-in shop or a young man shot by police may be obscured even to those who lit the rags or fired the gun, but the politics are there. Unquestionably there is far, far more to these riots than the death of Mark Duggan, whose shooting sparked off the unrest on Saturday, when two police cars were set alight after a five-hour vigil at Tottenham police station. A peaceful protest over the death of a man at police hands, in a community where locals have been given every reason to mistrust the forces of law and order, is one sort of political statement. Raiding shops for technology and trainers that cost ten times as much as the benefits you’re no longer entitled to is another. A co-ordinated, viral wave of civil unrest across the poorest boroughs of Britain, with young people coming from across the capital and the country to battle the police, is another.

Months of conjecture will follow these riots. Already, the internet is teeming with racist vitriol and wild speculation. The truth is that very few people know why this is happening. They don’t know, because they were not watching these communities. Nobody has been watching Tottenham since the television cameras drifted away after the Broadwater Farm riots of 1985. Most of the people who will be writing, speaking and pontificating about the disorder this weekend have absolutely no idea what it is like to grow up in a community where there are no jobs, no space to live or move, and the police are on the streets stopping-and-searching you as you come home from school. The people who do will be waking up this week in the sure and certain knowledge that after decades of being ignored and marginalised and harassed by the police, after months of seeing any conceivable hope of a better future confiscated, they are finally on the news. In one NBC report, a young man in Tottenham was asked if rioting really achieved anything:

"Yes," said the young man. "You wouldn't be talking to me now if we didn't riot, would you?"

"Two months ago we marched to Scotland Yard, more than 2,000 of us, all blacks, and it was peaceful and calm and you know what? Not a word in the press. Last night a bit of rioting and looting and look around you."

Eavesdropping from among the onlookers, I looked around. A dozen TV crews and newspaper reporters interviewing the young men everywhere ‘’’

There are communities all over the country that nobody paid attention to unless there had recently been a riot or a murdered child. Well, they’re paying attention now.

Tonight in London, social order and the rule of law have broken down entirely. The city has been brought to a standstill; it is not safe to go out onto the streets, and where I am in Holloway, the violence is coming closer. As I write, the looting and arson attacks have spread to at least fifty different areas across the UK, including dozens in London, and communities are now turning on each other, with the Guardian reporting on rival gangs forming battle lines. It has become clear to the disenfranchised young people of Britain, who feel that they have no stake in society and nothing to lose, that they can do what they like tonight, and the police are utterly unable to stop them. That is what riots are all about.

Riots are about power, and they are about catharsis. They are not about poor parenting, or youth services being cut, or any of the other snap explanations that media pundits have been trotting out: structural inequalities, as a friend of mine remarked today, are not solved by a few pool tables. People riot because it makes them feel powerful, even if only for a night. People riot because they have spent their whole lives being told that they are good for nothing, and they realise that together they can do anything – literally, anything at all. People to whom respect has never been shown riot because they feel they have little reason to show respect themselves, and it spreads like fire on a warm summer night. And now people have lost their homes, and the country is tearing itself apart.

Noone expected this. The so-called leaders who have taken three solid days to return from their foreign holidays to a country in flames did not anticipate this. The people running Britain had absolutely no clue how desperate things had become. They thought that after thirty years of soaring inequality, in the middle of a recession, they could take away the last little things that gave people hope, the benefits, the jobs, the possibility of higher education, the support structures, and nothing would happen. They were wrong. And now my city is burning, and it will continue to burn until we stop the blanket condemnations and blind conjecture and try to understand just what has brought viral civil unrest to Britain. Let me give you a hint: it ain’t Twitter.

I’m stuck in the house, now, with rioting going on just down the road in Chalk Farm. Ealing and Clapham and Dalston are being trashed. Journalists are being mugged and beaten in the streets, and the riot cops are in retreat where they have appeared at all. Police stations are being set alight all over the country. This morning, as the smoke begins to clear, those of us who can sleep will wake up to a country in chaos. We will wake up to fear, and to racism, and to condemnation on left and right, none of which will stop this happening again, as the prospect of a second stock market clash teeters terrifyingly at the bottom of the news reports. Now is the time when we make our choices. Now is the time when we decide whether to descend into hate, or to put prejudice aside and work together. Now is the time when we decide what sort of country it is that we want to live in. Follow the #riotcleanup hashtag on Twitter. And take care of one another."

Also worth reading - a surprisingly sensible analysis from The Telegraph

China China China

8 August 2011 The East African

An interesting article in The East African asks simply: Why are the Chinese taking over the whole of Kenya?

Here is the article:

"We certainly need development but we very certainly need to be careful too! Why am I saying that? Because China has a great reputation for ripping places off for their products and natural resources. They have become known as just another capitalist oppressive developer! Without any of the hassles of actually running a country! That’s why.

Oh — they are building a port in Lamu, bigger than Mombasa. They will use all local labour and companies… BUT they have a reputation for bringing, with them, everyone they need.

A well-known international development consultant, James Tomeko, tells me that when they built the railway from Tanzania to Zambia, they even brought all their own coolies, general workers and carriers, with them, too.

They built the roads through Nairobi and, almost the first thing they did, was to demolish the brand new and very beautiful archway at the National Museum. They could have gone around it! They could have negotiated and informed the Museum early enough.

But NO! And that’s how they are. Just bulldoze through everything to get where they want and think others should go too. Bulldoze!

They are even planning to build their own cement factory for the projects they are building!  Their own cement factory, for goodness sakes! Why? So they can increase their profits and not have to deal with anyone local. Any local company like Portland or Rhino could easily satisfy their needs.

They should be made to support local companies...

They have taken over the local news input! Can you believe that? Jeeez! What about the Standard and the Nation?

Ever heard of them Mr President?"

The point is that this is not just happening in Kenya but is happening across Africa. And it wont stop at Africa.

The race to the Antarctic

8 August 2011

100 years ago Robert Scott (Robert Falcon Scott) was hauling his way to the South Pole - Scott led a party of five which reached the South Pole on 17 January 1912, only to find that they had been preceded by Roald Amundsen's Norwegian expedition. On their return journey, Scott and his four comrades all perished from a combination of exhaustion, starvation and extreme cold.

Now it is the Chinese that look most likely to colonise the Antartic. Drawn to it by the frozen continent's potentially vast mineral and energy resources.

Australia currently has the largest land claim in the Antarctic which covers 42 percent of Antarctica, an area roughly three-quarters the size of Australia. The country positions its policy in terms of science and environmental management rather than national security.

For now a global treaty bans resource exploitation in Antarctica but the prohibition becomes reviewable in 2048, and some states may then decide to withdraw from it given the continent's mineral deposits.

These include coal seams, manganese, iron and uranium, while Antarctica's forecast oil reserves are estimated as among the largest in the world after Saudi Arabia and Venezuela.

The British, Americans and New Zealanders also have claims on parts of the Antartic.

Other nations such as Russia and China are unapologetically increasing their efforts in Antarctica, including in the 5,800,000 square kilometre Australian Antarctic Territory (AAT).

There are even reports that Kunlun Station, established on the AAT's Dome Argus, features a sign stating 'Welcome to China,' implying Chinese territoriality and denial of Australia's claim," according to the Lowy Institute.

China's insatiable demand for mineral and energy resources means their ambitions have to extend to the Antarctic and do not be surprised to see a rapid build up of Chinese military and operational resources there over the next decade.

Air Asia's strange MAS deal

8 August 2011

In the rather strange world of SE Asian aviation Tony Fernandes, the entrepreneur behind AirAsia, is poised to take a significant minority shareholding in Malaysian Airline System, the loss-making state-controlled carrier.

Shares in both airlines were suspended from trading on today to allow executives to conclude talks that are understood to centre on a proposed share exchange between Khazanah Nasional, the Malaysian sovereign wealth fund (the Malaysian equivalent on Temasek) that owns 69.3 per cent of MAS, and Tune Air. Fernandes is part-owner, with his long-time business partner Kamarudin Meranun and others, of the privately held Tune Group, which runs substantial hotel, financial services and mobile phone businesses. Tune Group owns 23.6 per cent of AirAsia.

The airlines have refused to comment but both have asked Bursa Malaysia, the Kuala Lumpur stock exchange, to suspend trading in their shares until 5pm on Tuesday in order to prepare for a material announcement.

The biggest losers here could be the traveling public; it wont be a full merger but the idea of the two airlines working together suggests that Air Asia focuses on the domestic and regional business and MAS on full fare long haul.

Malaysia only has two major airlines - AirAsia and Malaysia Airlines. In many other countries, the prospect of two carriers coming together would set off alarm bells among competition authorities. However, in Malaysia, there appears to be no such regulatory hurdle. As long as the government is happy with the deal, it will go through.

The government already controls MAS and controls access to landing rights for Air Asia - in particular Air Asia X.

The analysts probably have called this correctly recognising that the deal could lead to reduced competition through the rationalisation of routes and higher fares to raise yields. Part of the deal will see MAS' low cost subsidiary reduced to turboprop operations from Subang.

Air Asia has been one of Malaysia's rare and most significant regional success stories.

It is hard to understand the position of Fernandes; he has long promoted competition and decried government intervention; but now he is taking part in an exercise that appears to have the opposite effect.

Is it a shotgun marriage; and if so who holds the shotgun?

Apparently the two sides are discussing an exchange of shares of equal financial value, which would give Tune a holding in MAS of about 20 per cent, double the size of Khazanah’s holding in Malaysia-based AirAsia.

MAS has been restructured twice since 2002 and slumped to a net loss of $79m in the quarter ended in March 2011. Maybe Khazanah are hoping that bringing Mr Fernandes on to the airline’s shareholders’ register would help to overcome resistance to radical change among the existing management.

More after tomorrow's announcement.

Flydubai launches flight(s) to Ahmedabad

8 August 2011

Dubai-based budget carrier Flydubai has announced plans to launch flights to the Indian city of Ahmedabad; but dont get too excited; this will be just one flight a week. Unusual for a low cost carrier which usually wants to establish a regular schedule to make the investment worthwhile.

The once weekly flight will start on August 27, and is Flydubai’s third Indian destination, after Lucknow and Hyderabad. The flight departs every Saturday from Dubai at 10:10pm and reach Ahmedabad on Sunday morning at 2:50 am.

The same aircraft will depart for Dubai on Sunday at 3:35am and will reach Dubai at 5:05am.

The crew will love this; another nice overnight turn to India.

Flydubai says that it has no plans to announce any more routes to India this year, although there will be other new routes.

Flydubai have also said that there  are no plans to order more aircraft, with deliveries of its 18th aircraft taken last week; this was the latest in an investment of $80 million of the order of 50 placed by Flydubai at the 2008 Farnborough Airshow.

China's debt message - 2

8 August 2011

China's rhetoric about the US debt misses the point on just how linked the US and Chinese economies are.

After Standard & Poor’s downgraded the U.S.’s credit rating, the Xinhua news wire said on Saturday that Beijing, as “the largest creditor of the world’s sole superpower,” had “every right” to demand that Washington “address its structural debt problems and ensure the safety of China’s dollar assets.” China holds an estimated $1.5-trillion worth of U.S. government debt.

“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” Xinhua lectured.

So what is China proposing; well not much I suspect.

Despite talk that China and its Asian neighbours would “decouple” their economies from the U.S. and the West after the 2008 financial crisis, the U.S. trade deficit with China hit a record $273-billion last year. The last thing the Chinese government needs is for US consumers to stop spending. Less US spending means fewer Chinese exports, which means factory shutdowns and the spectre of social unrest.

The Xinhua solution was for the US to curb its deficit by chopping military spending and social programs. That would certainly suit the Chinese as they rapidly modernise their own military. Raising taxes, which could affect consumption of Chinese goods, was noticeably left out as a possible remedy.

This would be a difficult moment for China to see any kind of decline in demand for its products. The Communist Party is about to begin a sensitive transition at the very top, with President Hu Jintao and Premier Wen Jiabao set to give way next year to a new Politburo likely led by current Vice-President Xi Jinping. Chinese authorities are already struggling to control stubborn and rising inflation in the cost of foods and other basic goods. As are the rest of the world.

China holds and continues to buy so many US dollar assets primarily because it props up the value of its currency, the yuan. A cheap yuan has been crucial to China’s export-led growth, and the social stability it has created here. Which is why the US continues to push for the Yuan to be revalue.

The important note in the Xinhua editorial was not the threat to find another international reserve currency (really, the euro? the yen? the yuan?), but its worried forecast about what might happen if the U.S. credit rating is downgraded again in the future. “The spluttering world economic recovery would be very likely to be undermined and fresh rounds of financial turmoil could come back to haunt us all.”

The Chinese may even recognise this - on Sunday there was an analysis in the People’s Daily newspaper that was written by respected economist Sun Lijian.

“The lowering of the United States’ long-term sovereign credit rating has sounded a warning bell for the international currency system dominated by the U.S. dollar,” Mr. Sun wrote in the Communist Party mouthpiece. “Yet the biggest victims may not be the United States itself, but other countries that have depended on external demand to amass national wealth.” Exactly.

Sacked stewardess stranded in UAE

7 August 2011

Albayan newspaper is reporting today that a former stewardess who had lost a court case against her employers is still stranded in Abu Dhabi after failing to pay Dh20,000 in court fees in return for the return of her impounded passport.

The unidentified ex-stewardess had sued her former employing airlines for Dh600,000, accusing the company of delaying her treatment of allergic rash and ensuing swelling she had suffered during work when she used air freshening spray inside the aircraft. She said the delay had resulted in permanent marks on her hand and demanded damages from the company.

“When the stewardess lost the court case, the airlines decided to sack her…she tried to travel back to her home country but could net get back her passport from court after failing to pay Dh20,000 in court fees,” Albayan newspaper said.

“She then filed a petition to the court chairman asking for exempting her from fees so she can go back home…the court has not yet taken a decision, leaving the former stewardess stranded in the country without home after she was kicked out of her apartment,” the paper added, without identifying the airlines or saying how long the ex-stewardess has been stranded in the UAE.

China's debt message

7 August 2011

Note from China to the USA: “China, the largest creditor of the world’s sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China’s dollar assets.”

The world has changed. The USA may have been the most powerful nation in the world in the 20th century; but the Chinese media recognise the alarming state of American financial health and the historic reshuffling of power on the planet.

But there is also a growing desperation in China to insulate itself from American political and economic disarray.

Some notes from the Chinese media commentary:

"…the credit rating cut is an overdue bill that America has to pay for its own debt addition [sic] and the short-sighted political wrangling in Washington."

"…mounting debts and ridiculous political wrestling in Washington have damaged America’s image abroad…"

"All Americans, both beltway politicians and those on Main Street, have to do some serious soul-searching to bring their country back from a potential financial abyss."

OK - it is all a bit sanctimonious - but why not; China has the USA by the financial testicles.

But, and the Chinese media do not address this, America’s peril will force China to confront its own years of delayed maintenance. Beijing’s dollar investments are estimated to account for about two-thirds of its $3.2 trillion in foreign-currency reserves; it also holds about $1.2 trillion in treasuries. For years it has known that it is overly reliant on the dollar, but it delayed diversifying in order to sustain its export economy.

Now the value of China’s dollar investments will fall and it will be forced to seek alternatives at a moment when there are vanishingly few.

It is fair to acknowledge that the world has changed

Fun in a Cathay cockpit?

7 August 2011

Cathay Pacific airline said Saturday it is investigating photographs that appear to show one of its stewardesses giving oral sex to a pilot in the cockpit of an aircraft, accordiing to the SCMP.

The existence of the photos was first reported in Chinese blogs on Saturday. Industry sources said they suspected the photos were a malicious stunt designed to hurt the company. Apple Daily has a video on the subject.

The paper reported that a video was also rumored to have been posted online, but it was not clear where the sex act had taken place nor if any airline staff were involved.

"One of the photos appears to have been taken inside an aircraft cockpit," an airline spokesman said, according to Deutsche Presse-Agentur quoting the SCMP.

"There is no way to tell conclusively whether the photo was taken while the aircraft was on the ground or airborne."

The woman in the photograph was wearing what appeared to be a Cathay Pacific stewardess uniform but her identify had yet to be confirmed, the spokesman said. The male was "not identifiable as the face is not shown."

"There is no evidence whatsoever that he is a pilot on duty. His clothing does not appear to be a Cathay Pacific pilot uniform,' the spokesman said.

The airline said it had more than 8,000 cabin crew, mostly based in Hong Kong.

Cathay Pacific Flight Attendants Union former chief Becky Kwan Siu-wa said she believed the photos were fakes.

"It is just someone trying to be malicious who has sent these photographs around out of spite," she said.

"These photographs could have been taken anywhere and people can dress up to look like a flight attendant.

"This has happened before where photographs of this kind have been circulated like this, but they have always been discredited."

Of course this is getting lots of comments on pprune - including one saying that: news from the front is that they are bf and gf, and she leaked the pic.

The pprune messages have now been deleted apparently because legal action is being taken. This is confirmed by the Chinese-language Apple Daily, which reported that the pilot has issued a legal letter to the newspaper saying the photos had been stolen from his personal computer and that he had lodged a police report.

The implications of all this is that the pictures are probably legitimate; that Cathay Pacific will be taking action and that a lovers' tiff got out of hand (no pun intended!).

And bigger problems for the dollar

6 August 2011

Standard and Poors statement on their downgrade of the US debt rating.

The United States lost its top-tier AAA credit rating from Standard & Poor's on Friday in an unprecedented blow to the world's largest economy in the wake of a political battle that took the country to the brink of default.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government's budget deficit and rising debt burden. The action is likely to eventually raise borrowing costs for the American government, companies and consumers.

"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement.

The outlook on the new U.S. credit rating is "negative," S&P said in a statement, indicating another downgrade was possible in the next 12 to 18 months.

The move reflects the deterioration in the global economic standing of the United States, which has had a AAA credit rating from S&P since 1941, and it could have implications for the U.S. dollar's reserve currency status.

"The global system must now adjust to the many implications and uncertainties of the once-unthinkable loss of America's AAA," said Mohamed El-Erian, co-chief investment officer at Pacific Investment Management Co which oversees $1.2 trillion in assets.

The outlook on the new U.S. credit rating is "negative," S&P said in a statement, indicating another downgrade was possible in the next 12 to 18 months.

The decision follows a fierce political battle in Congress over cutting spending and raising taxes to reduce the government's debt burden and allow its statutory borrowing limit to be raised.

On August 2, President Barack Obama signed legislation designed to reduce the fiscal deficit by $2.1 trillion over 10 years. But that was well short of the $4 trillion in savings S&P had called for as a good "down payment" on fixing America's finances.

The political gridlock in Washington over addressing the long-term fiscal problems facing the United States came against the backdrop of slowing U.S. economic growth and led to the worst week in the U.S. stock market in two years.

The S&P 500 stock index fell 10.8 percent in the past 10 trading days on concerns that the U.S. economy may be heading into another recession and because the European debt crisis has worsened.

Treasury bonds, once indisputably seen as the safest security in the world, are now rated lower than bonds issued by countries such as Britain, Germany, France or Canada.

U.S. TREASURY QUESTIONS CALCULATION

Obama was briefed earlier in the day regarding S&P's intentions, but discussions only took place with Treasury officials and did not include the White House, a source familiar with the discussions told Reuters.

Late on Friday, the Treasury said the rating agency's debt calculations were wrong by some $2 trillion.

S&P confirmed it changed its economic assumptions after discussion with the Treasury Department but said it did not affect its decision to downgrade.

"We take our responsibilities very seriously, and if at the end of our analysis the committee concludes that a rating isn't where we believe it should be, it's our duty to make that call," David Beers, head of sovereign ratings at S&P, told Reuters.

The theme running throughout S&P's analysis is the breakdown in the ability of the Democratic and Republican parties to govern effectively.

The agency said that policymaking and political institutions had weakened in the past few months "to a degree more than we envisioned." This has major implications for the nation's budget and debt problems.

For example, S&P now assumes that tax cuts brought in under President George W. Bush in 2001 and 2003 would not, as planned, expire by 2012 because of staunch Republican opposition to any measure that would raise revenues.

The compromise reached by Republicans and Democrats this week calls for creation of a bipartisan congressional committee to find $1.5 trillion of deficit cuts by late November, beyond the $917 billion already identified.

'DAUNTING' IMPLICATIONS

While the downgrade is a blow to U.S. prestige, it was largely expected and may not have a big impact on trading of U.S. Treasuries and other assets when markets reopen in Asia on Monday.

In fact, Treasuries have rallied this week, driving the yield on the benchmark 10-year note to 2.34 percent, its lowest level in about 10 months. This reflects a belief among investors that U.S. government debt is still a safe bet at a time when prices of stocks and commodities are falling on concern about slowing global economic growth.

"To some extent, I would expect when Tokyo opens on Sunday, that we will see an initial knee-jerk sell-off (in Treasuries) followed by a rally," said Ian Lyngen, senior government bond strategist at CRT Capital Group in Stamford, Connecticut.

But the downgrade has implications for the country's financial sector, ranging from insurance companies to government-related firms such as housing financiers Fannie Mae and Freddie Mac.

"At least initially, the impact on the market will be negative because there will some forced liquidation of U.S. assets," said Boris Schlossberg, GFT director of currency research.

The downgrade could add up to 0.7 of a percentage point to Treasuries' yields over time, increasing funding costs for public debt by some $100 billion, according to SIFMA, a U.S. securities industry trade group.

The Federal Reserve and other bank regulators moved on Friday to reassure global markets that the downgrade would not mean that additional capital would be needed by banks and other institutions holding Treasury securities.

The Fed also said the cut would not impact the operation of its emergency lending window for banks, nor its buying and selling of Treasury securities to conduct monetary policy.

The impact of S&P's move was tempered by Moody's Investors Service's decision earlier this week confirming, for now, the U.S. Aaa rating. Fitch Ratings said it was still reviewing its AAA rating and would issue its opinion by the end of the month.

S&P's move is also likely to concern foreign creditors especially China, which holds more than $1 trillion of U.S. debt. Beijing has repeatedly urged Washington to protect its U.S. dollar investments by addressing its budget problems.

"China will be forced to consider other investments for its reserves. U.S. Treasuries aren't as safe anymore," said Li Jie, a director at the reserves research institute at the Central University of Finance and Economics.

One currency strategist, however, did not think there would be wholesale selling by foreigners.

"One of the reasons we don't really think foreign investors will start selling U.S. Treasuries aggressively is because there are still few alternatives to the Treasury market in terms of depth and liquidity," said Vassili Serebriakov, currency strategist at Wells Fargo in New York.

He said there was likely to be weakness in the U.S. dollar but a sharp sell-off was unlikely.

S&P had already placed the U.S. credit rating on review for a possible downgrade on July 14 on concerns that Congress was not adequately addressing the fiscal deficit of about $1.4 trillion this year, about 9.0 percent of gross domestic product, one of the highest since World War II.

But Obama administration officials grew increasingly frustrated with the rating agency during the debt limit debate and accused S&P of moving the goal posts in its downgrade warnings, sources familiar with talks between the administration and the agency have said.

The downgrade was immediately pounced on by candidates vying for the Republican presidential nomination. Mitt Romney said the move was "a deeply troubling indicator of our country's decline under President Obama," while Jon Huntsman said it was due to spreading of a "cancerous debt afflicting our nation."

The downgrade, 15 months before the next presidential election, and debt will be top campaign issues.

The problem with the Swiss Franc

4 August 2011

The Swiss National Bank intervened yesterday to try and weaken the red-hot Swiss franc despite big losses it sustained in earlier interventions.

Sadly this looks like throwing good money away.

In a surprise move, the SNB cut interest rates to zero and said it will boost liquidity to fight a "massively overvalued" franc.

The Swiss franc initially weakened after the announcement but then clawed back those losses, with most analysts saying the SNB was unlikely to succeed in weakening the franc for more than a short period of time.

The bank will be cautious about any further interventions after it suffered a 9.9 billion franc first-half loss on its foreign exchange holdings, following a record loss in 2010.

The strength of the franc and the SNB's response has become a hot political issue ahead of national polls on October 23, especially as the SNB losses mean it may not be able to make its annual payment to Switzerland's 26 cantons (states).

The problem faced by the Swiss is that debt fears in Europe and the United States will keep investors on the hunt for a safe haven.

The franc has surged 42 percent since the start of 2008 against a basket of currencies of Switzerland’s main trading partners, after remaining little changed over the previous decade. The Organization for Economic Cooperation and Development now calculates that the franc is the world’s most overvalued currency.

As investors seek safe havens they are left with the Swiss franc and gold. There is not an endless list of options. 

For anyone with costs in Swiss francs the situation is not going to improve soon or substantially.

Thailand's PM elect

2 August 2011

Yingluck Shinawatra; due to be voted in as Thailand's new PM on Friday. Pictures from Reuters and AP.