Saturday, October 3, 2009

507 carat white diamond discovered in SA's Cullinan mine

Diamond 
Mining group Petra Diamonds has discovered a 507.55 carat white diamond at South Africa’s Cullinan mine, one of the largest high-quality rough diamonds ever found, the firm said on Tuesday.
“This spectacular gemstone was recovered on Thursday and is currently with experts for analysis,” said a statement released by the London-listed company which operates mainly in Africa.
Initial examinations of the diamond which weighs just over 100 grams (3.5 ounces), have shown it to be of exceptional colour and clarity.
The diamond is undergoing colour grading, but is believed to be a rare Type II diamond, with very low traces of nitrogen -- considered an impurity - making them among the most transparent and colourless of the gems.
“The Cullinan mine has again given the world a spectacularly beautiful and important diamond... we now eagerly await the findings of the expert analysis,” said Johan Dippenaar, Petra’s chief executive.

3 more U.S. banks close, nearly 100 for year

Three U.S. banks failed on Friday, bringing the total to 98 this year, as regulators continue to shutter financial institutions that are overwhelmed by bad loans and liquidity problems.
Three U.S. banks failed on Friday, bringing the total to 98 this year, as regulators continue to shutter financial institutions that are overwhelmed by bad loans and liquidity problems.
Photo Credit: Michael Brown/Getty Images, Michael Brown/Getty Images
WASHINGTON - Three U.S. banks failed on Friday, bringing the total to 98 this year, as regulators continue to shutter financial institutions that are overwhelmed by bad loans and liquidity problems.
The Federal Deposit Insurance Corp. said that Warren Bank in Michigan was closed, with Huntington National Bank of Ohio taking over its deposits. It had $538 million in assets and $501 million in deposits.

Banks and traders threatened by new international tax plan drawn up by IMF

Banks and traders may face an unprecedented new international tax on finance under radical new plans being drawn up by the International Monetary Fund.

 
IMF managing director, Dominique Strauss-Kahn, said banks will be forced to pay into a new insurance fund. Mr Strauss-Kahn before addressing students at Istanbul's Bilgi University.
IMF managing director, Dominique Strauss-Kahn, said banks will be forced to pay into a new insurance fund. Photo: EPA
IMF managing director, Dominique Strauss-Kahn, has revealed that the Fund is constructing plans to create an insurance fund into which banks around the world may be forced to pay, to help “mitigate the risks they are creating”.
The plans echo a recent suggestion by Financial Services Authority chairman Lord Turner that he may consider levying a so-called Tobin tax on financial transactions in order to rid the system of excessive speculation. Although Mr Strauss-Kahn said a simple Tobin tax, which its creator, Nobel laureate James Tobin, proposed should be charged on all foreign exchange transactions, would “not work for many technical reasons”, he said the Fund was now working on alternative models.

More immigrants dying crossing U.S.-Mexico border

More immigrants dying crossing U.S.-Mexico border

By JACQUES BILLEAUD, Associated Press

PHOENIX (AP) — The number of immigrants who died while sneaking across America's southern border in the last 12 months is expected to surpass the previous year's total, even as fewer people are getting caught entering the country illegally.

The U.S. Border Patrol says 378 people perished near the border during the 11-month period that ended Aug. 31. The death toll is likely to rise in the coming days as the government finishes its tally for the fiscal year that ended Sept. 30.

Civilians Killed in Dutch Air Raid

By NRC Handelsblad Staff
NATO troops in Afghanistan have tried to limit the number of civilians who come to harm -- with limited success.
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AP

NATO troops in Afghanistan have tried to limit the number of civilians who come to harm -- with limited success.

A Dutch F-16 fighter plane made a number of civilian casualties during an air raid in the Afghan province of Helmand on Wednesday.

The Dutch Defense Ministry said it is still unclear how many people died in the air raid, but it confirmed that a woman and several children were wounded. The French press agency AFP quoted a local authority saying nine people died, including six children.

China's symbolic celebrations



pictures from China's ceremony
Clockwise l to r: Float depicting Communist heroes; President Hu wearing a "Mao" suit stands in an iconic 6.4m Hongqi HQE, or Red-Flag limousine, similar to one Mao used in 1949; Float depicting modes of transport; Military planes fly in formation.

What message is the Chinese Communist Party trying to convey through its elaborate 60th anniversary celebrations? Here Dr Steve Tsang of St Antony's College, Oxford University, gives his interpretation of a selection of images from the parades.
1 We are modern, we are beautiful, and we don't forget who makes us so. We stand united. We march proudly forward to defend steadfastly the Party's leadership. We uphold the red flag and the Leninist heritage carved in stone.

Thursday, October 1, 2009

Answers awaited to high-speed rail funding questions


Tom Tobin – Staff writer
Business – September 30, 2009 - 3:00am

The Associated Press file photo 2000
America 2050 ranks the upstate corridor near the back of the top 50 of 27,000 routes examined for high-speed rail value. New York to Rochester was 50
New York’s entrance into the $8 billion high-speed rail sweepstakes began with a flourish last March, as Gov. David Paterson laid out a vision for a new, fast passenger train network connecting Rochester to Buffalo, Syracuse, Albany and New York City.
Since then, more questions than answers have arisen about the state’s — and America’s — rail future.
As in: When will the federal government decide on New York’s application — a $564 million request covering 38 separate projects, including $48 million for new platforms and track alignment at the Rochester station? How will New York’s plan translate into business growth and local jobs? How much more beyond the $8 billion is required to finish the job?
Some answers to the first question may come as soon as next month. That’s when the Federal Railroad Administration may start awarding grants from the $8 billion pot, which is part of the economic stimulus package that Congress approved last winter. New York’s bid for about a half-billion dollars comes out of that appropriation, which President Barack Obama has called a “down payment.”
Another deadline looms even as the FRA considers first-round grants. States have until Friday to apply for the next round, and according to U.S. Rep. Louise Slaughter, New York’s request may hit $5 billion. State officials wouldn’t confirm that number but said the proposal would be enough to complete the high-speed line from New York City to Buffalo.
That application would appear to exceed by far what the president has planned for high-speed rail. Obama’s budget proposes only $5 billion in non-stimulus funds over five years.
The FRA was deluged with applications for high-speed-rail stimulus money last summer, with requests totaling $108 billion, far above the $8 billion available.
“It was more than we expected,” said Rob Kulat, an FRA spokesman. “We went back to help states fine-tune their applications.” Kulat wouldn’t say if New York’s was one of those subjected to a tune-up.
Paterson, in announcing New York’s ambitious rail plan, lauded the potential economic development impact upstate. The state’s application says that upstate has 3,500 workers in 30 rail-related businesses that could benefit from high-speed rail contracts.
Some of the rail firms in the Buffalo and Rochester region said they weren’t banking at this point on much business from high-speed rail and expected a lot of the bids to go out of state. Paterson’s office said there were many New York companies capable of handling the infrastructure work and that keeping the jobs in the state is achievable.
New York is home for one major train builder: Alstom Transportation Inc. in Hornell, which manufactures and refurbishes train engines and cars. Alstom, an international firm, also has a signaling division in Henrietta and other offices in New York.
Because the Hornell plant does rail work for customers around the country, one scenario, spokeswoman Isabelle DeFleurac said, might be that Alstom gets major high-speed rail contracts, adding upstate workers, but for projects in other parts of the country.
New York has an important high-speed rail champion in Slaughter, the Democratic chair of the powerful Rules Committee. “I’m calling the secretary of transportation all the time to make the case,” Slaughter said. “I think we’re going to get what we’re looking for.”
Slaughter’s case got a minor boost recently when a Washington-based think tank, America 2050, included the Buffalo-New York and Rochester-New York corridor in the top 50 of 27,000 routes examined for their high-speed-rail value. But neither city was high on the list —Buffalo was 43rd and Rochester just made it in 50th place. Heading the list were the routes from New York City to Washington and Los Angeles to San Francisco.
“California is far ahead in its planning, and the New York to Washington is a natural. A lot of the other applications don’t make sense at this point,” said Andy Kunz, CEO of the new pro-high-speed rail lobby, US High Speed Rail Association.
Kunz said New York shouldn’t expect much in the first round of funding, and the lobby’s own assessment has the upstate New York corridor developed a decade or more from now.
As to how far the amount set aside will go toward building a high-speed rail network, Kunz said that China is projecting a $700 billion system. “I don’t know how much it will take,” Slaughter said. “But I stress all the time how important this boost will be to upstate New York.”
TTOBIN@DemocratandChronicle.com

Live: China 60th anniversary celebrations

Our correspondent reports on all the action in Tiananmen Square as China celebrates 60 years with a spectacle of power

Tanks roll past Tiananmen Gate at the start of the military parade to mark the 60th China anniversary in Beijing, China
(Ng Han Guan/AP)
Tanks roll past Tiananmen Gate at the start of the military parade to mark the 60th China anniversary in Beijing
And in a blaze of colour, it’s over. At 12.30 on the dot. What organisation.
More than 5,000 children filled the final float, each carrying red balloons and tinsel hoops. With a shout they let go the balloons into the sky – now a deep deep blue – over the square. The balloons were joined by 60,000 doves released from their cages.
The children, clearly one of the few groups not regarded as a security threat, raced up to the foot of the podium to wave their hoops in a rainbow array of colours to the Communist Party leaders. Adorable. It’s becoming something of a tradition at these parades.

The leaders even seemed to show a little animation. They achieved a few smiles. But it would have been fun to seem them digging each other in the ribs and giggling over the floats. In the grainy footage from 60 years ago, that can be found on this China Heritage project site, there is a clear sense of excitement as the leaders of that era chat and point and show their evident delight at the moment of that day.
These days it’s all a lot more serious. The spontaneity has been lost as China takes itself ever more seriously. It is a nation that knows it is hovering on the brink if not of great power status, then of regaining greatness.
12.25 (05.25 BST):
Perhaps the most important floats were at the front. These showed China’s leaders. Behind-the-scenes fighting had been fierce in the secret conclaves at which Communist Party leaders make their decisions. Just which leaders should be represented?
Now we see that everyone got a look-in. The quick and the dead.
First came Chairman Mao in portrait showing him announcing the founding of Communist rule 60 years ago today. Unsurprisingly, he was followed by Deng Xiaoping, the leader who oversaw the 1984 parade and is credited with the sweeping and daring reforms that transformed China from a backward nation mired in poverty, a state-planned economy and held back by socialist dogma into the third-biggest economy in the world.
The arguments were over whether to include the living. In the end, they did. We had Jiang Zemin, the previous president, who did his best not to smirk as he watched from the podium as his own portrait paraded in front of him. He was followed by a picture of Hu Jintao. A compromise must have been reached in those secret meetings. You couldn’t have Jiang Zemin without his successor, after all. So they both appeared

Second earthquake hits stricken Sumatra

467 confirmed dead and thousands feared trapped in rubble in western Indonesia as second quake strikes 180 miles from first
Wreckage after an earthquake in Indonesia
A video grab shows a foot among the wreckage of a building following an earthquake in Padang in Indonesia Photograph: REUTERS TV/Reuters
A second powerful earthquake has hit the Indonesian island of Sumatra, a day after the first devastating quake that left 467 confirmed dead, thousands of people buried in rubble and a major city cut off from the outside world.
Today's quake, of magnitude 6.9, struck in the early hours about 180 miles from the epicentre of yesterday's more powerful tremor out at sea.
There are 467 confirmed deaths, according to disaster relief officials, but they warned that the figure was now likely to rise. The head of the country's crisis centre said at least 1,000 may have been killed.
Indonesia's government dispatched teams of rescue workers to the stricken region. International aid agencies were preparing to launch a major relief effort as tens of thousands of people spent a night in the open in pouring rain after their homes were damaged.
Health minister Siti Fadilah Supari said it was a "high-scale disaster", and that he believed it was more powerful than the Yogyakarta earthquake. In 2006, 3,000 people were killed in the Javan city.
Yesterday's 7.6-magnitude quake, which came less than 24 hours after another deadly quake off the South Pacific island of Samoa, struck at 5.16pm. Its epicentre was reported to be around 30 miles offshore from Padang, a city of 900,000, at a depth of around 53 miles.
There was immediate widespread panic in the city. "The earthquake was very strong," said a woman called Kasmiati, who lives on the coast. "People ran to high ground. Houses and buildings were badly damaged. I was outside, so I am safe, but my children at home were injured," she said, before her mobile phone went dead.
Fears about the scale of the disaster were raised after Indonesia's vice-president, Jusuf Kalla, told a news conference in Jakarta that homes, hotels, mosques, schools, shops and other buildings had been destroyed in Padang, the largest city in western Sumatra.
"We have received a report from the mayor of Padang that the death toll is 75. But many others are trapped in collapsed shops, building and hotels. It is definitely higher than that. It's hard to tell because there is heavy rain and a blackout."
Television footage showed scenes of devastation, including the foot of a buried body sticking from rubble.
Officials with Indonesia's National Search and Rescue Agency, who were attempting to reach the scene last night, said they had also received reports that many homes had been destroyed, with early reports suggesting that between 500 and 1,000 houses had collapsed.
Priyadi Kardono, a spokesman for Indonesia's National Disaster Management Agency, said it had received eyewitness accounts of destruction in the nearby town of Pariaman, to the north of Padang, as well as in Padang itself.
Fears that the death toll could rise rapidly were raised by Rustam Pakaya, head of the health ministry's crisis centre, who said that in addition to known fatalities, thousands more people could be buried in the rubble, though officials later suggested the number still trapped in the city was as low as 100.
Rustam said two hospitals in Padang were reported to be among the collapsed buildings and a field hospital was being prepared to help survivors. Several hotels were said to have been seriously damaged, while a shopping mall was badly hit.
The first emergency medical relief – a team of 40 doctors from Jakarta – was expected to reach the area today.
Rescue efforts have been hampered by the disruption of electricity and telecommunication lines, which have thrown Padang into darkness. All roads into the city were also reported to have been blocked by landslides.
Padang's airport was described as "inaccessible" by a pilot from the state airline who was forced to turn back. According to one report, the roof of the airport had collapsed.
While most of the early attention has focused on the large, sprawling city of Padang, concern was mounting over the fate of towns and villages in the surrounding countryside. In the town of Maninjau, further inland, a resident, Hafiz, told local media he had watched houses being buried in a landslide when a hill collapsed.
The earthquake in Sumatra came 24 hours after a huge tsunami struck Samoa at dawn on Tuesday – triggered by an earthquake measuring between 8.0 and 8.3 – which also flattened villages and swept cars and people out to sea, killing at least 100 people and leaving dozens missing. Survivors fled the churning water for higher ground on the South Pacific islands.
Shocks from the Sumatran earthquake could be felt in high buildings in Jakarta, several hundred miles away. It was also felt in neighbouring Singapore and Malaysia.
An eyewitness to the destruction in Sumatra was Malaysian student Fashareena Nazir, who is studying at the Universitas Andalas medical faculty, which was damaged in the earthquake.
"There were rumbles and a loud noise, like a bang," she told Malaysia's Bernama news agency after walking three miles to safety. The 23-year old described seeing neighbours' houses on fire and ground caving in or disappearing before her eyes.
Another severely damaged location was reported to be Padang's Industrial Technic Academy. A lecturer there, Erwinsyah Sipahutar, told local television that hundreds of students evacuated the campus as the quake broke most of the windows.
"We were shaken like matchsticks," Erwinsyah said.
Another resident of Padang, called Adi, later told Metro Television there was devastation all around him. "For now I can't see dead bodies, just collapsed houses. Some half-destroyed, others completely. People are standing around too scared to go back inside. They fear a tsunami," said Adi. "No help has arrived yet. I can see small children standing around carrying blankets. Some people are looking for relatives but all the lights have gone out completely."
In Pariaman – closer to the centre – one resident, Yuliarni, told TV One news: "The shaking was the worst I had ever felt. Houses have collapsed, the lights and electricity were cut off … People were fleeing to higher ground and some were hurt."
Padang lies on one of the world's most active faultlines, where the Indo-Australian and Eurasian plates are colliding, and had been named by geologists in Indonesia as the most likely location to fall victim to a major earthquake or tsunami. It is the same faultline that was responsible for the devastating Indian Ocean tsunami that killed more than 220,000 people on Boxing Day 2004.
The zone's other segments have already cracked, including a large portion off Aceh, at the northern tip of Sumatra, which triggered the 2004 tsunami.
"Padang sits right in front of the area with the greatest potential for an 8.9 magnitude earthquake," Danny Hilman Natawidjaja, a geologist at the Indonesian Science Institute, warned in February. "The entire city could drown" in a tsunami triggered by such a quake, he warned then.
Backpackers' gateway
Padang is a sprawling city of 900,000 residents on the west coast of Sumatra. Described as friendly, noisy, bustling and dirty, Padang is a popular jumping-off point for backpackers and surfers hoping to reach the Indian Ocean islands of Mentawai, the hills and national parks beyond the city, and other destinations in Indonesia and Malaysia. The city itself has few attractions besides Taplau beach, with its beautiful sunsets and hundreds of food stalls, and Bungus bay, popular with swimmers and locals in the evenings.
Arriving from the relative comfort of the mainland makes for a rough landing, writes the Lonely Planet. "Despite the urge to hide from the smell of kerosene and diesel exhaust, you'll find that the locals are genuinely friendly and curious about the few foreigners who find their way into town … a sprawling, noisy place circumnavigated by tripped-out opelet [minibus] blasting squeaks-and-beeps techno music."
Jo Adetunji

Wednesday, September 30, 2009

IMF: UK faces credit rationing or higher interest rates unless Bank prints more money

International Monetary Fund comments provide clear support for the Bank of England's programme of quantitative easing
The International Monetary Fund headquarters in Washington
The International Monetary Fund has warned that the UK's economic recovery will be muted. Photograph: Matthew Cavanaugh/EPA
Britain will face credit rationing or higher interest rates unless the Bank of England continues its emergency money creation programme to support growth, the International Monetary Fund warned today.
Highlighting the risk of a £180bn funding gap in 2010, the Fund said there was a "significant tension" between the supply of finance from a weakened banking sector and rising demands for funds, primarily caused by the soaring government deficit.
Jose Vinals, the IMF's financial counsellor, said that despite avoiding a global meltdown, the shortage of credit and the pressures on government finances posed risks to recovery.
Launching the Fund's half-yearly Global Financial Stability Report (GFSR), he said the UK was likely to face "difficulties" in meeting the demand for credit.
"Either there will have to be continuing support on the part of the authorities to underpin the credit process or there will be higher lending interest rates, or credit will be constrained."
The comments provided clear support for the Bank of England's programme of quantitative easing, which is designed to compensate for the inability or unwillingness of banks to lend.
For the first time since the financial crisis began in August 2007, the Fund cut its estimate of the writedowns facing banks and other financial institutions. In the spring it predicted a $4tn bill but has now pared this back to $3.4tn (£2.11tn).
"Over a year has now passed since the Lehman Brothers bankruptcy prompted a potential global financial meltdown", said Vinals. "Fortunately the situation is very different today due to unprecedented policy actions and the overall improvement in economic conditions. We are on the road to recovery, but this does not mean that risks have disappeared."
Vinals added that countries such as Britain, which had high levels of debt in relation to the size of the economy, were particularly vulnerable to higher long-term interest rates because of fears about the sustainability of the public finances.
In August the Bank of England increased the QE budget to £175bn, following a meeting where governor Mervyn King was outvoted in his attempt to raise the ceiling to £200bn. Discussions continue within the Bank on what additional measures - possibly extra quantitative easing or even negative interest rates - it could take in the future.
Although Vinals' comments do not amount to an explicit call for more QE, they do indicate that the IMF would not stand in the way of an enhanced programme by the Bank to increase credit availability.
David Miles, a member of the Bank's monetary policy committee, told a conference in Belfast this morning that QE was having an impact, although it was hard to say how much exactly. Miles added that he saw little reason to proceed particularly cautiously with QE as the policy was "not irreversable".

washingtonpost.com > Nation > Wires Toyota issues huge recall over accelerator risk

FILE - In this Aug. 16, 2009 file photo, the company logo shines off the nose of an unsold 2010 Camry sedan at a Toyota dealership in Centennial, Colo. Toyota Motor Corp. on Tuesday, Sept. 29, 2009 said it will recall 3.8 million vehicles in the United States, the company's largest-ever U.S. recall, to address problems with a removable floor mat that could cause accelerators to get stuck and lead to a crash. (AP Photo/David Zalubowski, file)
By KEN THOMAS
The Associated Press
Wednesday, September 30, 2009; 3:09 AM


WASHINGTON -- The 911 call was from a frantic passenger, trapped with family members in a runaway vehicle barreling down a California highway with a stuck accelerator and no brakes.
The call ended with someone telling people in the car to hold on and pray, followed by a woman's scream.
The high-speed crash near San Diego in August, involving an out-of-control Lexus ES 350 that killed four members of a family, led Toyota Motor Corp. on Tuesday to issue its largest-ever U.S. recall, involving 3.8 million vehicles.
The recall is intended to address problems with a removable floor mat that could cause accelerators to get stuck and lead to a crash.
Toyota and the government warned owners Tuesday to remove the mats from their vehicles until the Japanese automaker could find a way to fix the potential safety hazard. The recall will involve popular models such as the Toyota Camry, the top-selling passenger car in America, and the Toyota Prius, the best-selling gas-electric hybrid.
Toyota said it was still working with officials with the National Highway Traffic Safety Administration to find a remedy and said owners could be notified about the recall as early as next week. Toyota spokesman Irv Miller said until the company finds a fix, owners should simply take out the removable floor mat on the driver's side and not replace it.
"A stuck open accelerator pedal may result in very high vehicle speeds and make it difficult to stop a vehicle, which could cause a crash, serious injury or death," Miller said.
The recall will affect 2007-10 model year Toyota Camry, 2005-10 Toyota Avalon, 2004-09 Toyota Prius, 2005-10 Toyota Tacoma, 2007-10 Toyota Tundra, 2007-10 Lexus ES 350 and 2006-10 Lexus IS 250 and IS 350 vehicles.
Toyota's previously largest U.S. recall was about 900,000 vehicles in 2005 to fix a steering issue. The company declined to say how many complaints it had received about the accelerator issue.
NHTSA said it had received reports of 102 incidents in which the accelerator may have become stuck on the Toyota vehicles involved. It was unclear how many led to crashes.
"This is an urgent matter," Transportation Secretary Ray LaHood said in a statement. "For everyone's sake, we strongly urge owners of these vehicles to remove mats or other obstacles that could lead to unintended acceleration."
Toyota warned owners that if they think their vehicle is accelerating out of control, they should check to see whether their floor mat is under the pedal. If a driver can't remove the floor mat, Toyota advises drivers to step on the brake pedal with both feet until the vehicle slows and then try to put it into neutral and switch the ignition to accessory power.
For vehicles with engine start/stop buttons, Toyota said the engine can be shut off by holding the button down for three seconds.
In the August incident in Santee, Calif., the fiery crash of the Lexus killed California Highway Patrol Officer Mark Saylor, 45, and three family members on State Route 125. The vehicle was traveling at more than 120 mph when it launched off an embankment, rolled several times and burst into flames.
NHTSA investigators determined that a rubber all-weather floor mat found in the wreckage was slightly longer than the mat that belonged in the vehicle, something that could have snared or covered the accelerator pedal.
Toyota spokesman John Hanson said the final report had not yet been submitted in the California case.
"We don't know what the actual cause was of that accident other than preliminary reports that have been published so it's impossible for us to comment on that particular incident," Hanson said.
In mid-September, Toyota ordered 1,400 Toyota and Lexus dealers nationwide to ensure that each new, used and loaner vehicle had the proper floor mats and that the mats were properly secured.
In September 2007, Toyota recalled an accessory all-weather floor mat sold for use in some 2007 and 2008 model year Lexus ES 350 and Toyota Camry vehicles because of similar problems.
For more information, consumers can contact the National Highway Traffic Safety Administration's hot line at (888) 327-4236, Toyota at (800) 331-4331 or Lexus at (800) 255-3987.

EPA seeks to limit plane deicing runoff

Chemicals used turn waterways hazardous

Under an EPA proposal, Logan International is among six of the largest US airports that would have to install deicing “pads’’ or other collection systems to contain 60 percent of fluid sprayed. Under an EPA proposal, Logan International is among six of the largest US airports that would have to install deicing “pads’’ or other collection systems to contain 60 percent of fluid sprayed. (John Tlumacki/Globe Staff)
DES MOINES - Every winter, airports across the country spray millions of gallons of deicing chemicals onto airliners and allow the runoff to trickle away. When the chemicals end up in nearby waterways, the deicing fluid can turn streams bright orange and create dead zones for aquatic life.
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The practice is legal, but environmental officials want it to stop.
“We normally don’t think of airports as one of our major polluting facilities,’’ said Chuck Corell, water quality bureau chief with the Iowa Department of Natural Resources. “I think it’s safe to say that for years it was unchecked.’’
Not every airport lets the chemicals drain off the tarmac uncollected, but those that do range from some of the nation’s largest - including John F. Kennedy in New York and Chicago’s O’Hare - to small regional airports such as the Eastern Iowa Airport in Cedar Rapids. Both activists and federal environmental officials say the chemicals slowly create waterways that won’t support life.
“Here you have millions of gallons a year of this deicing chemical running off untreated directly into that bay,’’ said Larry Levine, an attorney with the Natural Resources Defense Council, which sued New York over deicing chemicals that flow from JFK into the Jamaica Bay Wildlife Refuge. “Anything that can’t swim away is going to die.’’
Proposed US Environmental Protection Agency regulations would require airports to capture at least some of the deicing fluid after it is used to rid planes of ice and snow. The agency says those rules would reduce by 22 percent the discharge of chemicals, which lower oxygen levels in waterways and prevent fish and other aquatic creatures from breathing.
The two main types of deicing fluids - propylene glycol and ethylene glycol - are not generally seen as a threat to human health. Ethylene glycol, which also is used in antifreeze, is generally only toxic in humans if ingested. Propylene glycol is a generally recognized as safe additive for foods and medications, according to the US Food and Drug Administration.
Under the EPA’s proposed regulations, six of the nation’s 14 major airports that are the biggest users of deicing fluid - JKF, O’Hare, Cleveland-Hopkins International, Newark Liberty International in New Jersey, Boston Logan International, and LaGuardia Airport in New York - would have to install deicing “pads’’ or other collection systems to contain 60 percent of fluid sprayed.
The airports would then have to make sure the collected liquid was treated to remove any toxins, the EPA said.
Officials at five of those six airports either said they were meeting all current runoff rules or declined to comment. A spokeswoman for the Cleveland airport said that facility already uses a deicing pad.
Mary Smith, director of engineering and analysis division in the EPA’s Office of Water, said the other eight major airports already have deicing pads and probably won’t have to make changes to comply with the proposed rules.
About 200 smaller airports would be required to collect 20 percent of the fluid by using technologies such as a glycol recovery vehicle, which is basically a vacuum that sucks up the chemical. Airports with less than 1,000 annual jet departures wouldn’t be affected.
Dean Schultz, a spokesman for the American Association of Airport Executives, criticized the proposed rules as unnecessary. He pointed to current regulations in which the EPA or an authorized state agency issues general permits or more detailed individual permits that cover deicing discharges. Schultz said additional rules would be redundant and costly.
“We all don’t have the same issues. We all don’t dump to the same discharge waters,’’ Schultz said. “It’s a bit of a shotgun approach to solving the problem when there’s already a mechanism in place to deal with it in a more case-by-case basis.’’
Under existing rules, adopted in the 1990s, airports are required to minimize contamination of stormwater runoff and must monitor for pollutants, including deicing fluid. Some states have required additional measures when reports showed high levels of the chemicals.
Environmental officials in Iowa discovered the issue after residents complained. At the Eastern Iowa Airport in Cedar Rapids, neighbors living along a creek noticed the water had turned bright orange. At Des Moines International Airport, neighbors reported water that had a green, cloudy tint with a chemical odor.

Evolution of China's revolution: from bloody repression to capitalism red in tooth and claw


As China prepares to mark 60 years of communist rule, George Walden, former diplomat, asks what exactly is the cause for celebration


SHANGHAI: Evolution of China's revolution: from bloody repression to capitalism red in tooth and claw
Young China has never had it so good and is determined to have it better Photo: Getty Images
The communist regime in China established by Mao Zedong's 1949 revolution has succeeded, it is sometimes argued, whereas the Russians failed. That is certainly the impression a Western visitor to China might get today. Unlike in Russia the Communist Party is still in power, yet you sense an unstoppable, unfurling wave of industrial and economic power. The country is the biggest construction site the world has seen, and it has only just begun.
Vibrancy, energy, abundant consumer goods, style and hedonism are not things we associate with communist rule, but in towns you see them everywhere, from the skyscraper forests to the busy restaurants and thronged department stores, bigger and cheaper than our own.
The progress is undeniable, and the Chinese are proud of it. Just don't make the mistake, as I have once or twice, of talking to younger people about the past. Their parents do that, and it bores them.
If they are under 35 they will have no memory of the Cultural Revolution, the last fling of a manic, ageing despot, in which three million died, which I lived through as a diplomat in Beijing in the late Sixties. Still less will they wish to be reminded of the Chairman's earlier bouts of extermination through purges, political campaigns or madcap attempts to defy the laws of bourgeois economics - such as the Great Leap Forward in 1958, which as the Party itself has now admitted, to anyone interested to hear, killed 40 million.
Why is the younger generation so disinclined to look back in anger?
One reason is that Mao's brutality left China a morally eviscerated nation, which cares for little beyond material wellbeing and success. Young China has never had it so good and is determined to have it better.
Another reason is nationalism: for all his officially admitted "mistakes" there is a reluctance, not confined to the Party, to de-throne the man credited with transforming a chaotic, poverty-stricken and abject country, that had undergone a cruel Japanese occupation and horrendous civil war. Mao made China "stand up," as the communist national anthem put it.
And internationally, it did. In the Korean War, at the cost of stupendous losses, it held the Americans at bay, allied itself to Moscow to create the awesome Sino-Soviet bloc, developed its atomic bomb, and pulled enough wool over enough eyes about its often illusory domestic advance to create an influential coterie of apologists in the West.
China under Mao was in fashion with the politically chic in a way Soviet Russia never was. Even President Nixon's daughter wore a Mao badge on her visit.
All this is why many Chinese will accept the roseate account of the country's recent history the Party will present for the anniversary celebrations. For them Mao is indissolubly associated with the birth of the modern nation and the re-claiming of China's rightful place in the world.
The truth will one day emerge, but not yet. The communist anthem's call to "stand up" was directed at "people who no longer wish to be slaves." But under Maoism their lives were more slave-like than before. Schools, health, production and employment improved – until some political campaign set them back - if only because of the Party's dictatorial organisational powers. But the price of progress was not just the surrender of individual freedom, but of the human personality. Once, Mao seriously considered abolishing names and calling people by numbers.
People's lives were regimented and controlled to a degree surpassing anything in human history, in factories, communes, or even their homes, where they were watched over by zealous village or street committees. In its scope and intensity the suffering of the Chinese people in the Fifties and Sixties is unprecedented in history as well.
So to say that the Chinese revolution of 1949 has proved a success, or that it was necessary for 70 million people to die to lay the groundwork for later advances, is moral and historical nonsense.
What has succeeded is not China under Mao, but China after its break with almost everything his revolution stood for: rigid state control of the economy, centralisation, a crazed egalitarianism, closed borders, a Party that enforced its rule by a personality cult and relentless, bloody repression.
No amount of terminological juggling about socialism and Marxism-Leninism to maintain a façade of continuity can disguise the fact that China today is surging forward, thanks to a crude but dynamic mixture of corporate capitalism and uninhibited entrepreneurship. The fact that Chinese capitalism is red in tooth and claw is the only ideologically correct thing about it.
Inevitably there are winners and losers, and vast new disparities of wealth. Everywhere in Chinese cities you see some of the beneficiaries/victims drawn in from the countryside to fuel the urban economy, the hundreds of millions of gong-min - itinerant workers earning maybe £15 for a seven day week on a building site or in a shop or restaurant.
Too poor to rent a flat they often leave their families behind, eat and sleep in on the job, and send money home. Tough as their lives are, they are better off than before. Under Mao millions starved to death. They don't now.
To an outsider the very nature of the Chinese appears to have changed.
To anyone who knew the country before and after the Chairman's death, the differences are also astounding. "My assessment of these people" said Henry Kissinger, "is that they are deeply ideological, close to fanatic in the intensity of their beliefs." So they seemed to me too, as well as being depressingly puritanical and perversely proud of their penury.
Yet in a couple of decades these dogmatists and fanatics and killjoys have produced a generation that sits around in cafes sipping expensive coffee and admiring each other's clothes.
Now that China enjoys a modicum of freedom the awesome talents of its people have begun to flourish, in finance, manufacturing, architecture, design, films and art. For all the corruption and continuing repression, the results have been infinitely more impressive than anything Mao's attempt to engineer his people's souls achieved.
Today there is more personal freedom than at any time in 60 years and the beginnings of a genuine system of law. For the first time you sense a liberation of the human spirit. Joie de vivre is not something anyone ever associated with Maoist China, but you can see it today, in towns at least – an important qualification in a country still over 50 per cent rural, with poverty to match. Given the freedom to do so, the Chinese know how to live: to eat copiously, to dress elegantly, to laugh and let off steam, to pursue energetic love lives. For me the mere absence of the sour, venomous, resentful and xenophobic faces that filled the streets when I lived there is a tonic.
The miracle of China's recovery and the way it came about carries a message for the West. What characterises the two phases of China's history since 1949 are their extreme nature. Under Mao I saw people being forced to confess to imaginary crimes, being beaten up in the streets by hysterical Party thugs, or weeping tears of devotion to the Great Helmsman as they marched in the streets.
Now I see fantastical excesses in other forms – jungle capitalism, obscenely luxurious hotels and houses, some loopy architecture, grotesque contemporary art, ubiquitous prostitution.
Is a tendency to extremes embedded in the Chinese psyche? In their Marxism, the Chinese were even more dogmatic than the Russians in the pursuit of equality, insisting that a peasant might know more about medicine than a doctor. Now, as a convert to capitalism, China's excesses have been caricatural too, a throwback to what we would see as Victorian conditions.
Extremes are there too in the Chinese economy, whether the overnight shift from autarky under Mao to a great trading nation, or in the dizzying fluctuations of stock markets. How can a national temperament change so fast? And if things go wrong, could there be a lurch back into nationalism, which in China can have a distasteful racial flavour?
For the present there are scant signs of this, and we must hope that the more prosperous the Chinese become the more the regime will relax.
Meanwhile what merits celebration is not so much 1949 as 1978, the year that Deng Xiaoping, cruelly persecuted by the Chairman (his son was crippled) took over the reins of the economy after a period of inner-Party struggle following Mao's death two years before. It was in the succeeding years that the country really began to stand up and open up, as a stultified, introverted and poverty-stricken country overcame its calamitous past, reached out to the world - and found a welcome.
George Walden was a diplomat specialising in China and Russia. His book, China: A Wolf in the World? is published by Gibson Square

China's 60th anniversary parade: 'a farewell to poverty'

This is more than a parade - it’s a farewell to poverty and backwardness, says China's First Secretary at the Embassy in London.

60th Anniversary of the Founding of the People?s Republic of China: Wen Jiabao
Paramilitary policemen hold a Chinese national flag during a parade training session at a military base on the outskirts of Beijing Photo: REUTERS
The parade in Beijing marking 60 years of the People’s Republic of China will be watched worldwide. People may ask, what message China is trying to convey to the world?
When Chairman Mao Zedong announced the founding of the PRC, the country was in a state of poverty and dire need. Sixty years on, China has gone through a historic transformation and this has not been an easy journey.
The mood of celebration in China is tinged with nostalgia. One of the hottest topics for the bloggers is stories of changes in the lives of families, housewives comparing photos showing how their kitchens have totally changed, men talking about the experience from trying a new bicycle to buying the first car.
I too remember the handkerchief parcel my mother left me, with food coupons wrapped in it. My mother kept these in case the times of food scarcity were to return. They never did. These small pieces of paper are powerful testimony to the strides China has taken. This is what we are celebrating: farewell to poverty and backwardness.
However, we have no reason to be complacent. Our reforms remain a far and hard journey. We want to build a harmonious and stable society, where every kid is in school, every one has work to do, every one has a roof over the head, every sick is treated and the elderly taken care of.
Today, when the world cheers for China, when we hear praise for President Hu Jintao’s statement on climate change at the UN podium, we are aware that China has emerged on the world stage. We need to learn and fulfill the international responsibilities time has endowed on us and contribute to building harmony and prosperity in the world.
Britain is our important international partner. We are both devoted to closer bilateral cooperation and have been able to handle differences through candid dialogues. Given the new opportunities, the two sides should work together to bring our relations to a new high.

Iran to test fire missile capable of hitting Israel

Iranian short-range missile is test-launched during war games in Qom, 120 kms south of Tehran

Iran announced plans today to test-fire a long-range missile capable of hitting Israel as it adopted a defiant stance over its nuclear capability.
It also fired several short-range missiles using a multiple rocket launching system for the first time during military exercises by the regime's Revolutionary Guards.
General Hossein Salami, head of the Revolutionary Guard Air Force, said that Iran would test medium-range Shahab-1 and Shahab-2 missiles on tonight and long-range Shahab-3 missiles on Monday, during drills set to last several days.
It is thought the Shahab-3 now has a range of up to 1,200 miles.

General Salami said that Fateh, Tondar and Zelzal missiles were test-fired today. All are short-range, surface-to-surface missiles.
The official English-language Press TV showed pictures of at least two missiles being fired simultaneously and said they were from Sunday’s drill in a central Iran desert. In the clip, men could be heard shouting “Allahu Akbar" as the missiles were launched.
“We are going to respond to any military action in a crushing manner and it doesn’t make any difference which country or regime has launched the aggression,” General Salami said.
Iran has had the solid-fuel Fateh missile, with a range of 120 miles, for several years. It also has the solid-fuel, Chinese-made CSS 8, also called the Tondar 69, which has a range of about 93 miles.
The multiple launcher used for the first time today is designed for the Zelzal missile, which has a range of up to 185 miles.
The tests came two days after the US and its allies disclosed that Iran had been secretly developing a previously unknown underground uranium enrichment facility and warned the country it must open the nuclear site to international inspection or face harsher international sanctions.
The newly revealed nuclear site in mountains near the holy city of Qom is believed to be inside a heavily guarded, underground facility belonging to the Revolutionary Guard.
After the strong condemnations from the US and its allies, Iran said yesterday that it would allow UN nuclear inspectors to examine the site.

Samoa tsunami: two-year-old British child missing on Pacific island


Diplomats are assisting a British couple who have reported their infant missing in the Samoan tsunami.


Samoa tsunami: two-year-old British child missing on Pacific island
The scene of devastation in Pago, American Samoa Photo: EPA
The two-year-old British child has been missing since the Tsunami struck.
Searches were under way after a powerful earthquake hit the South Pacific island.
Stephen Rogers, the British honorary consul in Samoa, said the parents of the child were receiving consular assistance.
We are aware of a British couple who are trying to trace their two-year-old child," said Dr Rogers.
"They are staying at the New Zealand High Commission in Samoa. They've made contact with the British High Commission in New Zealand.
"The child has been missing since the tsunami struck."
Dr Rogers said he did not have any further information about the missing child or the parents.
He said there had been no other reports of British casualties in the disaster
At least 82 people were killed after the earthquake triggered a tsunami that swept ashore on Samoa and American Samoa.
Dozens of others were reported missing after the huge waves tore through villages, leaving a trail of devastation.
The tremor, with a magnitude of between 8 and 8.3, struck early yesterday, about 120 miles from American Samoa, a US territory which is home to 65,000 people.

Tuesday, September 29, 2009

SolarCity Raises $100 Million for 2009



SolarCityNoah Berger for The New York Times Lyndon Rive said that thanks to an influx of financing, his solar panel leasing company has hired 112 people.
The credit crunch has walloped the residential solar industry, making it hard for installers like SolarCity to tap investor funds to finance rooftop arrays for their customers.
But in a sign that the recessionary clouds are parting a bit, SolarCity on Tuesday said that U.S. Bancorp has agreed to finance $100 million worth of solar installations in 2009.
That’s double the money the bank committed to provide SolarCity in June when the original deal – but not the financial details – was announced.
SolarCity, based in the Silicon Valley suburb of Foster City, offers customers the option of leasing their rooftop panels and thus avoiding the five-figure cost of buying a solar system.
The company retains ownership of the solar array and thus qualifies for a 30 percent federal tax credit against its cost. Since most startups have no use for such tax credits, they give them to investors in exchange for financing installations.
Still, most such tax equity partnerships have collapsed along with the Wall Street banks that often funded them. In fact, U.S. Bancorp stepped in after Morgan Stanley pulled the plug on a financing arrangement with SolarCity earlier this year.
“For all of this year, tax equity has been the number one constraint in financing for the entire solar industry,” said Lyndon Rive, SolarCity’s chief executive. “In the third quarter of last year there were about 20 active banks and insurance companies making tax equity investments. They all fell off a cliff and now there’s three or four.”

Despite the $100 million infusion, Mr. Rive said raising money for tax equity partnerships remains difficult. “The investors have been more selective and strict and they’re doing a tremendous amount of due diligence,” he said.
Mr. Rive noted, however, that the federal stimulus package has helped lure back some investors by giving them the option of receiving a government cash grant in lieu of the tax credit.
Mr. Rive said the the influx of financing has helped the company to hire 112 people — mainly solar panel installers — over the past four months, and the company now has a workforce of about 450 employees.
Other solar installers have found investors in recent months as well. San Francisco’s SunRun raised $18 million in a round of funding in July, and last week, Sungevity, based in Berkeley, Calif., announced that it had secured $6 million in its latest round of financing.
With solar panel prices plummeting this year due to over production and more attractive federal incentives available to homeowners, financing remains the key hurdle for many customers, said Danny Kennedy, Sungevity’s president.
Mr. Kennedy has recently hired SolarCity’s former chief financial officer to develop a financing program for his company.

Air traffic demand improving, profit far away:IATA

PhotoBy Sven Egenter
ZURICH (Reuters) - Air traffic demand is recovering from the steep slump caused by the global recession but the airline industry remains well away from a return to profit, the International Air Transport Association (IATA) said on Tuesday.
The IATA data added to news which has suggested the global economy was slowly recovering from the deepest recession since World War Two.
"Demand continues to improve, but profitability remains ever distant," said Giovanni Bisignani, IATA's Director General and CEO in a statement. "Fares have stabilised, but at profitless levels. Meanwhile cost pressures are mounting from reduced aircraft utilisation and rising oil prices," he said.
Airlines carried 9.6 percent less cargo in August year-on-year, while passenger demand fell 1.1 percent, said IATA which represents 230 airlines comprising 93 percent of scheduled international air traffic.
Demand was well off the lows hit earlier in the recession, IATA said. Freight levels were 12 percent above the low-point hit in December 2008 and passenger demand was 6 percent higher than the low in March 2009.
Air freight demand was down 18 percent in the first eight months of 2009 compared to the year-ago period, while passenger demand was down 6 percent.
IATA said Latin American and Middle Eastern carriers saw freight demand growing on the year in August and the Middle East was also the only region to record rising passenger demand.
In August, the passenger load factor improved by 1.2 percentage points on the year to 80.9 percent but average fares were 22 percent lower for premium seats and 18 percent down for economy seats.
IATA said earlier this month it expected a loss of $11 billion for the industry in 2009 and a $3.8 billion loss in 2010.

Taxing Banks to Pay for, and Prevent, Future Bailouts


Mary Altaffer/AP
Today's Economist
 Edward L. Glaeser is an economics professor at Harvard.
Financial market regulation seems dauntingly complex, but conceptually it is no different than an efficient highway toll.
Both public interventions are justified by negative  externalities, which occur when one person’s activity adversely impacts other people. On the highways, each driver slows everyone else, and tolls can speed traffic by keeping price-sensitive drivers off the road. In the financial markets, institutional risk-taking creates the risk of failure and federal bailout. The reason to intervene, on either the highways or the Bourse, is to limit the social damage created by people and companies that act without worrying about the costs that they impose upon others.
In the old days, everyone pretended that financial institutions had no federal guarantee other than deposit insurance. Public officials even kept up the fiction that Freddie Mac and Fannie Mae were independent, a pretense belied by the nearly risk-free interest rates that these institutions paid to their lenders. Now we know that Freddie and Fannie and plenty of other institutions were gambling with our money, and that gave them an incentive to take on plenty of extra risk.
The risk of future bailouts makes the case for further regulation, but we can’t design good policies until we know the new rules that will govern those future bailouts. Will the feds backstop everyone or just big banks? Does this guarantee always apply, or just during a downturn big enough so that a bank collapse could destroy the credit system?
In order to make a public case for particular rules, rather than just a vague sense that more regulation is needed, the government itself needs to act first and articulate a more transparent set of rules governing future fights against market meltdown.
Despite a few well-known exceptions, taxes generally beat regulations as a tool for correcting externalities.
For example, some places have tried to regulate their way out of traffic congestion by limiting access to central city roads based on license plate numbers — for example, saying that cars with plates that end in 5 or 6 cannot drive on Wednesday. These policies do nothing to separate drivers who really need to get downtown from unmotivated motorists. The rule does wonders, though, to inefficiently encourage the buying of extra cars. A congestion charge is better. It allocates roads to the people who value them most and generates extra revenue.
The case for taxes, rather than regulation, can also hold in financial markets.
Three years ago, Dwight Jaffee and I argued that the risks that Freddie Mac and Fannie Mae imposed on United States taxpayers could be handled either by limits or taxes on these institutions’ portfolios. Slapping an appropriate tax on these entities would have generated revenue and limited their desire to impose extra risks on the American taxpayer.
In principle, the appropriate systemic-risk tax on a financial institution is the product of two figures: the probability that this entity will receive a bailout, times the expected cost of that bailout. Obviously, that number is impossible to know without better understanding the rules concerning future bailouts.
Calculating such a tax may seem incredibly hard, but well-designed regulations require even more knowledge. Consider the proposal to ban certain firms from trading in derivatives. To determine whether this ban makes sense, we would need to know both the impact of such trading on expected bailout costs and the private benefits that such trading yields for each firm. To micromanage a firm’s trading strategy, a regulator needs to know private benefits and social costs. Designing a sensible tax just requires knowing the costs to the taxpayer.
A tax is also less likely than regulation to stifle innovative activity. Giving a firm the option to act, for a price, is less intrusive than banning actions altogether. Regulations have often served industry insiders by creating barriers that prevent the entry of smaller competitors. An appropriate systemic-risk tax would have no such effect, since new firms would usually be small enough to fail. Since new entrants impose no risks on the rest of us, they wouldn’t need to be taxed.
A tax also generates revenues, which offset the cost of future bailouts. Of course, the fear, which I mentioned last week when writing about soda taxes, is that politicians may find such tax revenue so appealing that that they keep on increasing tax rates.
In the old days, we could pretend that tax dollars weren’t going to bail out banks, but we now know that this is false. The possibility of future bailouts provides a strong rationale for intervention, but before we act, we need to understand the rules concerning future bailouts, and to design policies that make companies pay for the social costs of their actions.
Mary Altaffer/AP
Today's Economist
 Edward L. Glaeser is an economics professor at Harvard.
Financial market regulation seems dauntingly complex, but conceptually it is no different than an efficient highway toll.
Both public interventions are justified by negative  externalities, which occur when one person’s activity adversely impacts other people. On the highways, each driver slows everyone else, and tolls can speed traffic by keeping price-sensitive drivers off the road. In the financial markets, institutional risk-taking creates the risk of failure and federal bailout. The reason to intervene, on either the highways or the Bourse, is to limit the social damage created by people and companies that act without worrying about the costs that they impose upon others.
In the old days, everyone pretended that financial institutions had no federal guarantee other than deposit insurance. Public officials even kept up the fiction that Freddie Mac and Fannie Mae were independent, a pretense belied by the nearly risk-free interest rates that these institutions paid to their lenders. Now we know that Freddie and Fannie and plenty of other institutions were gambling with our money, and that gave them an incentive to take on plenty of extra risk.
The risk of future bailouts makes the case for further regulation, but we can’t design good policies until we know the new rules that will govern those future bailouts. Will the feds backstop everyone or just big banks? Does this guarantee always apply, or just during a downturn big enough so that a bank collapse could destroy the credit system?
In order to make a public case for particular rules, rather than just a vague sense that more regulation is needed, the government itself needs to act first and articulate a more transparent set of rules governing future fights against market meltdown.
Despite a few well-known exceptions, taxes generally beat regulations as a tool for correcting externalities.
For example, some places have tried to regulate their way out of traffic congestion by limiting access to central city roads based on license plate numbers — for example, saying that cars with plates that end in 5 or 6 cannot drive on Wednesday. These policies do nothing to separate drivers who really need to get downtown from unmotivated motorists. The rule does wonders, though, to inefficiently encourage the buying of extra cars. A congestion charge is better. It allocates roads to the people who value them most and generates extra revenue.
The case for taxes, rather than regulation, can also hold in financial markets.
Three years ago, Dwight Jaffee and I argued that the risks that Freddie Mac and Fannie Mae imposed on United States taxpayers could be handled either by limits or taxes on these institutions’ portfolios. Slapping an appropriate tax on these entities would have generated revenue and limited their desire to impose extra risks on the American taxpayer.
In principle, the appropriate systemic-risk tax on a financial institution is the product of two figures: the probability that this entity will receive a bailout, times the expected cost of that bailout. Obviously, that number is impossible to know without better understanding the rules concerning future bailouts.
Calculating such a tax may seem incredibly hard, but well-designed regulations require even more knowledge. Consider the proposal to ban certain firms from trading in derivatives. To determine whether this ban makes sense, we would need to know both the impact of such trading on expected bailout costs and the private benefits that such trading yields for each firm. To micromanage a firm’s trading strategy, a regulator needs to know private benefits and social costs. Designing a sensible tax just requires knowing the costs to the taxpayer.
A tax is also less likely than regulation to stifle innovative activity. Giving a firm the option to act, for a price, is less intrusive than banning actions altogether. Regulations have often served industry insiders by creating barriers that prevent the entry of smaller competitors. An appropriate systemic-risk tax would have no such effect, since new firms would usually be small enough to fail. Since new entrants impose no risks on the rest of us, they wouldn’t need to be taxed.
A tax also generates revenues, which offset the cost of future bailouts. Of course, the fear, which I mentioned last week when writing about soda taxes, is that politicians may find such tax revenue so appealing that that they keep on increasing tax rates.
In the old days, we could pretend that tax dollars weren’t going to bail out banks, but we now know that this is false. The possibility of future bailouts provides a strong rationale for intervention, but before we act, we need to understand the rules concerning future bailouts, and to design policies that make companies pay for the social costs of their actions.

Oil prices dip amid Iran tensions


LONDON — Oil prices fell slightly on Tuesday amid tensions between key crude exporter Iran and the West over the Islamic republic's atomic programme.
New York's main contract, light sweet crude for delivery in November, slipped 27 cents to 66.57 dollars a barrel.
London's Brent North Sea crude for November lost 34 cents to 65.20 dollars a barrel.
"The geopolitical risk premium to oil markets from the rising tensions between Iran and the West is not as high as we have seen in the past due to the large level of inventories and the much larger spare capacity at the moment," said Sucden Financial Research analyst Nimit Khamar.
"So the loss of crude from Iran would not have as large of a price impact."
Iran, the world's third biggest crude exporter, test-fired missiles on Monday it said could reach targets inside Israel and immediately drew swift condemnation from the United States and other Western nations.
Washington said the missile tests were "provocative" and urged the republic to agree to "unfettered access" to its newly revealed enrichment plant.
Washington and regional ally Israel have not ruled out a military option to stop Tehran's nuclear drive, which the West says is aimed at making nuclear weapons while Iran says it is solely for peaceful ends.
"Any consideration of an outbreak of hostilities immediately calls into focus the Strait of Hormuz, adjacent to Iran, through which flows 25 percent of the world's oil supply," said John Kilduff of MF Global.
"The escalation of tensions with Iran underlines how another element, geopolitics, of the many that caused prices to peak in 2008, can resurface suddenly," he warned.
In a move that may placate the West, Iran on Tuesday said it would soon offer a timetable for UN inspection of its controversial second uranium enrichment plant and was ready to discuss world concerns about the previously undisclosed facility.
Six big powers are due to open long-awaited talks with Iran on its nuclear programme in Geneva on Thursday.
Oil prices tumbled last week on concerns about weak energy demand in the United States, which is the world's biggest oil-consuming nation.
Energy demand has plunged after the global economy slipped late last year into its worst recession since the 1930s.
This sent oil prices tumbling from historic highs of more than 147 dollars in July 2008 to around 32 dollars in December.
Prices have since recovered somewhat but investors remain concerned over the pace of the upturn.

NYC terrorism suspect Zazi pleads not guilty

NEW YORK — An Afghan immigrant has pleaded not guilty to plotting a terrorist attack on New York City using common chemicals.
Najibullah Zazi's (nah-jee-BOO'-lah ZAH'-zee) lawyer entered the plea Tuesday in Brooklyn. Zazi was ordered held without bail during the brief hearing.
Defense attorney J. Michael Downing says what he's seen so far "does not amount to a conspiracy."
He says he doesn't know the names of anyone accused of conspiring with his client.
Officials say the 24-year-old Zazi and his co-conspirators bought beauty products in Colorado containing key ingredients for homemade bombs.
Prosecutors believe Zazi received explosives training from al-Qaida in Pakistan and planned to target mass transit in the New York City area.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
NEW YORK (AP) — An Afghan immigrant has pleaded not guilty to plotting a terrorist attack on New York City using common chemicals.
Najibullah Zazi's (nah-jee-BOO'-lah ZAH'-zee) lawyer entered the plea Tuesday in a Brooklyn courtroom. Zazi was ordered held without bail during the brief hearing.
Officials say Zazi and his co-conspirators bought beauty products in Colorado containing hydrogen peroxide and acetone — key ingredients for homemade bombs.
Prosecutors believe Zazi received explosives training from al-Qaida in Pakistan and planned to target mass transit in the New York City area.
The 24-year-old airport van driver and former coffee cart vendor has denied wrongdoing.
Zazi's next court date has been set for Dec. 3.

Washington pitches Boeing for second 787 assembly line

787
Mike Kane/Seattle P-I file
UPDATE: See Boeing, Republican comments added below.
Washington Gov. Chris Gregoire on Monday released the business case it presented to Boeing on Friday to lure a second 787 Dreamliner assembly line.
"We think Washington provides the highest possible quality, lowest possible risk and a competitive cost structure," Bill McSherry, a special adviser to Gregoire, said in an interview Monday. He said Gregoire was not proposing any new incentives to win the second line, adding that the state has taken many steps to improve the business climate for aerospace since 2003 and would continue to talk with Boeing about the company's legislative priorities.
Boeing officials have said they plan to decide by the end of the year whether to put a second 787 assembly line beside the first one, in Everett, Wash., at its newly acquired plant in North Charleston, S.C., or at one of other, unnamed, contending sites. McSherry expects Boeing Commercial Airplanes officials to make a recommendation on a site to Boeing headquarters within the next month or so.
McSherry declined to discuss Boeing Commercial Airplanes President Chief Executive Jim Albaugh's reaction to Gregoire's Friday presentation.
"They both agreed that they would keep the meeting in confidence," he said. "We had a productive conversation."
Reacting to the state's pitch, Boeing spokesman Bernard Choi said via e-mail:
We appreciate Governor Gregoire and her staff for producing a thorough report. While Washington state has made progress, there is still work to do to deal with the high costs of doing business. We look forward to working with state leaders to help all companies compete and grow.
The state's presentation has relatively little to say about what appears to be Boeing's biggest concern -- reaching a deal with unions to avoid work stoppages, such as last year's 57-day machinists strike. Workers at the North Charleston plant recently voted break away from the machinists' union, possibly giving them a leg up in the second-line competition.
The best thing the state can do on the labor front is stay out of the way, said Rogers Weed, director of the state Department of Commerce. "Opining doesn't help."
McSherry called it "good news" that discussions between Boeing and local machinists have so far played out largely in private.
Choi said:
On the labor front, we have always maintained that our world-class workforce in Puget Sound is a major reason for Boeing's success. But repeated work stoppages have clearly damaged our reputation as a reliable supplier. We need to a find way to ensure production stability. We are talking with the IAM to find an alternate dispute resolution mechanism.
Last Thursday, U.S. Rep. Chip Limehouse, R-S.C., told the Charleston (S.C.) Post and Courier that his state is offering Boeing a deal that is too good to pass up. He touted South Carolina's quality of life, business climate, work force training initiatives, right-to-work status and low union presence, and willingness to offer tax incentives, infrastructure improvements and other measures to meet the company's needs.
Regarding new incentives, Gregoire said after an initial meeting with Albaugh early this month that Boeing wasn't seeking anything from the state to get a second 787 Dreamliner production line in Everett.
Boeing spokesman Jim Proulx said at the time that Boeing would "continue to support efforts going forward to make Washington a more business-friendly environment."
Boeing always has a legislative agenda, McSherry said. "We'll continue to work together, as we always have."
What the state's presentation does do is compare Everett and Moses Lake, Wash., to Charleston, S.C., Long Beach, Calif., San Antonio, Texas, Wichita, Kan., and Kinston, S.C., which are all known or rumored to be in contention for the second 787 line, have Boeing facilities or have been aggressively courting aerospace companies. It included Moses Lake, a finalist for the first 787 line, as a second choice to offer Boeing an option that offered many of Everett's advantages, without the risk of having all 787 production in one place, McSherry said.
The presentation lists nine business climate and educational attainment measures that show Washington as first or second among those states. It also says the tax burden on an airframe final assembly plant is lowest in Moses Lake and then in Everett. The state Department of Revenue calculated the burden using data from a study the consulting firm Deloitte did for the Economic Development Council of Snohomish County.
The presentation also says that, while Washington may have higher unemployment insurance rates than some of the other states, its rates have declined 42 percent in the past four years, and Washington has the most-stable unemployment insurance trust fund, with the largest reserves, measured as the number of months funded.
Looking at state tax changes since 2003, the presentation says Washington has:

  • Reduced the Business and Occupation tax on Boeing from 0.484 percent to 0.2904 percent of gross revenues;
  • Exempted machinery and equipment from taxes;
  • Expanded the lower rate to take in Boeing suppliers and subcontractors, design and engineering services and Federal Aviation Administration Part 145 repair stations.
These incentives could save more than $3.4 billion over the life of the 787 program, the presentation says.
Washington also has advantages as a leading center of innovation in general and aerospace in particular, with 650 companies involved in aerospace, more than 200 dedicated solely to the second, more than 100,000 aerospace workers and aerospace employers in 21 counties, the report says.
"You can grow more quickly, as you can hire people on who are on the bench," McSherry said. The experience workers at Boeing's first 787 line have gained from working on the plane also would bring savings a line elsewhere couldn't match, he said.
In writing about Washington's pitch, aerospace analyst Scott Hamilton took the state's argument further.
"While Washington isn't blunt enough to say there is higher risk in locating Line 2 in Charleston because of the lack of an experienced workforce, we've had no need to be politically correct: Everett's experienced (engineering) and (machinist) workers have had to spend the last two years fixing engineering, design and production issues originating in the outsourcing to Japan, Italy and – importantly – Charleston," he wrote. "We believe it would be folly to locate Line 2 anywhere but Everett because of this history and the continuing program risks well into the future. Boeing cannot afford any more risks along these lines."
The new Washington study touches on the biggest elephant in the room without going into another area of intense political sensitivity: the historically poor labor relations between Boeing and the IAM, which struck the company for 57 days last year, disrupting production and delivery of all 7-series lines.
The State report notes that there are improving labor relations and elected officials are committed to helping this process. But in the end, only Boeing management and IAM leadership can solve this issue, and this is why the State doesn't delve into it except superficially.
Looking at education, the presentation says Washington has the best test scores of the six states, top university programs and technology development funding, and the most comprehensive aerospace vocational training network.
"We have a very mature, evolved educational system in this state for aerospace," Weed said.
Washington also ranks highest or second highest among the six states in three broad quality of life measures, the presentation says.
Finally, it notes that the state has, since 2003, dedicated nearly $33 billion to infrastructure improvements, including more than $28 billion in the Puget Sound area.
State Senate Minority Leader Mike Hewitt, R-Walla Walla, put out a statement Monday saying Washington faces spiking unemployment, rising workers' compensation taxes and budget shortfalls that are likely to spawn new tax-hike proposals.
"Tout whatever magazine rankings, studies and figures you want, but those are the realities employers in our state – including Boeing and its in-state suppliers – are facing," said Hewitt, a member of Gregoire's Council on Aerospace. "Instead of issuing reports, we should be taking action like we did in 2003 when we made major reforms to the unemployment insurance system to land the first 787 line."
Hewitt touted the "unmatched skill of our aerospace workers" and jabbed at a competing state, saying: "I'm sure South Carolina doesn't have any hills that compare with Mount Rainier.
"Unfortunately, we don't know how much that really matters to the executive in Chicago," he added. "The only ranking that counts when it comes to Boeing will be the one made in the corporate boardroom."