Stupidity At Moody’s: Get Rid of Debt Ceiling and We Won’t Downgrade Your Debt
July 18, 2011 No Comment
In the midst of staggering illogic surrounding our debt ceiling, ratings agency Moody's just raised the bar. On Monday, it announced that the United States could increase its creditworthiness by – wait for it – eliminating the debt ceiling altogether: The United States is one of the few countries where Congress sets a ceiling on government debt, which creates “periodic uncertainty” over the government's ability to meet its obligations, Moody's [MCO 36.45 0.13 (+0.36%) ] said in a report. “We would reduce our assessment of event risk if the government changed its framework for managing government debt to lessen or eliminate that uncertainty,” Moody's analyst Steven Hess wrote in the report. Consider the illogic on display. An entity's credit rating – whether we're talking about an individual, a household, or a business – is measured by amongst other things the total amount of debt outstanding, the value of the assets owned, and the cash flow generated each year.
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Fire safety experts say modifications by right-to-buy owners have exacerbated problem Three-quarters of all social housing blocks are potentially unsafe in a fire, according to a survey questioning managers responsible for ensuring buildings are properly maintained. A similar proportion of housing managers are not confident that their blocks have had a proper fire risk assessment, according to the study, carried out jointly by the Chief Fire Officers Association and Chartered Institute of Housing. The findings will further raise concerns that fire safety in social housing, particularly in high-rise blocks, remains a significant problem even two years after the Lakanal House tragedy in Camberwell. Six people, including three children, died on 3 July 2009 when a blaze swept though the 14-storey south London block. While an official report into the cause has been delayed pending a still-running police investigation, fire experts who examined Lakanal’s sister block concluded that decades of botched modifications to the 1959-built structure massively compromised its ability to contain fires, allowing the flames to spread at speed vertically and laterally, trapping residents. Following the fire the Chief Fire Officers Association and Chartered Institute of Housing organised a series of safety seminars for professionals in the social housing sector, during which they polled participants about the blocks they managed. A total of 400 people were surveyed at the first three events, all in England, using an anonymous, push-button vote system. Asked before the seminar whether they believed their buildings were “fit for purpose” regarding fire safety, 45% agreed. After the expert briefing this fell to 27%. Similarly, while 40% were initially confident they had carried out proper fire risk assessments on their housing stock, this dropped to 25% afterwards. Both organisations stress the findings do not mean three-quarters of buildings are fire traps or that the occupants should be worried. But Tony Prosser, director of operations for the West Midlands fire service, who led the study for the Chief Fire Officers’ Association, said it showed that many supposed experts in the housing sector did not know as much as they thought. “We were quite surprised by the results, bearing in mind that the people who come to these events tend to be already reasonably aware of the issues,” he said. “It’s a worrying figure. When we go through the various scenarios it made people aware of some things they’d maybe not considered.” A main concern is modifications to buildings, some by residents, for example right-to-buy flat owners who replace the original fireproof doors to their flats with combustible replacements. Similarly, work on communal areas could sometimes cause hazards, he said. “Some of these buildings are 50 years old now. Since then there’s been a lot of work – satellite dishes, additional plumbing, heating systems. You can get heating engineers who bang holes between floors and don’t do anything about filling in the gaps. In some buildings it can be a process of steady degradation.” Debbie Larner, head of practice at the Chartered Institute of Housing, the professional body for social housing groups, said the figures were “quite shocking” but stressed the need for perspective. “There’s much more awareness about what the issues are. We’re getting a sense that people really want to ensure that their assessments are much more robust. It’s less of a tick-box approach,” she said. Some fire safety experts take a more gloomy view, saying that decades of chronic under-investment in social housing stock has left many hundreds of blocks unsafe . Correcting all this would cost hundreds of millions of pounds, a sum which councils and other housing providers simply cannot afford, they say. Housing Communities Firefighters Peter Walker guardian.co.uk
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Exclusive: Chancellor holding back extra funding needed for modernisation, with MoD calling for PM to intervene David Cameron is locked in a standoff with his chancellor over defence spending after a secret study concluded the government will need to find an extra £25bn to pay for its modernisation of the armed forces. The Guardian has learned that a three-month internal analysis of the Ministry of Defence’s chaotic budget has found the department will not be able to pay for the programmes agreed in last year’s strategic defence and security review without a huge injection of cash – or a savage round of fresh cuts. George Osborne has been refusing to give the defence secretary, Liam Fox, any promises about funding beyond 2014/15, even though many programmes need to be signed off in the coming months to have any chance of coming in on time and on budget. From private discussions with the MoD’s most senior officials, the Guardian understands that the prime minister has also dug his heels in. He has refused to sanction any further cuts to defence capabilities before the next election, even though the department is already far over budget. One senior Whitehall official said the Cameron and his chancellor appeared to be in a power struggle – and they needed to resolve the situation quickly. “We are going round in circles,” said the source. The three-month review began in the spring as the MoD tried to tackle an estimated £1bn overspend for last year, as well as determine costs for the contracts that need to be signed for the changes set out in the SDSR. Downing Street has already conceded that if the armed forces are to become Future Force 2020 the MoD will need real-term budget increases from 2014/15 onwards. But defence officials were not sure how much extra money would be needed. In a series of secret meetings with top officials from the Treasury, Cabinet Office and No 10, the MoD argued it will need rises of inflation-plus-3% every year until 2020/21 to meet its targets. The Guardian understands the sums were not disputed. Without them the MoD will be unable to create Future Force 2020 within the timescale. If the MoD’s budget remains constant between 2014/15 and 2020/21 the department will be £20bn short of what it needs – at current prices. Allowing for inflation that rises to £25bn over six years. The MoD believes it has convinced officials across Whitehall that its problems are as great as it says. It does not want to set a precedent that other departments might seek to follow, and it points to the MoD’s well-earned reputation for mismanaging money as another reason not to make any commitments now. “The essential underlying problem remains the same,” said the source. “The chancellor doesn’t want to give defence any more money because if he makes a special case then what will happen next? “Every other department will be asking to be made a special case. But what the prime minister is not prepared to countenance is further cuts. Defence has been on this painful trajectory since the SDSR came out last year. “The only way the Treasury will move is if David Cameron comes down on the side of defence. The prime minister recognises that the MoD will need real term increases to meet the SDSR commitments.” Until then the permanent secretary at the MoD, Ursula Brennan, is stalling on signing contracts until she is sure she will have the money to pay for them. Professor Malcolm Chalmers, from the Royal United Services Institute thinktank, said there were “no easy choices left” and that the MoD needed to make decisions now about new tanks, submarines and aircraft. “Without an explicit commitment soon to significant real terms growth in defence spending between 2014 and 2020, the SDSR vision for UK forces in 2020 is not affordable. “Getting a commitment after the next election is too late unless the MoD is prepared to sign contracts without knowing whether it can afford to fund them. “If the defence budget does not grow significantly in real terms after 2014/15, there could be a six-year funding gap – between what is needed to fund Future Force 2020 and what is available – of around £25bn. “If decisions are not taken soon, either to approve significant real defence spending growth after 2014 or to make further cuts in capabilities, the MoD will become increasingly reluctant to approve new financial commitments.” Chalmers said the government had been “refreshingly frank” about the problems with the defence budget but if it could not commit to new spending “further difficult capability choices cannot be avoided”. The armed forces will have made redundant up to 17,000 servicemen and women by 2015, but further job losses are expected after the British mission in Afghanistan begins to wind down in the next parliament. Defence policy Military David Cameron George Osborne Nick Hopkins guardian.co.uk
Continue reading …MSNBC President Says Fox News Isn’t Always ‘Based in Fact,’ While He Claims ‘We’re Not a Frat House’
July 18, 2011 No Comment
MSNBC president Phil Griffin gave an interview to Jeff Bercovici of Forbes , and said all the usual things about how MSNBC is less ideological than Fox News and Fox is a success despite not always being based in fact. But Griffin claimed no one ever knew what Tim Russert’s politics were and insisted that MSNBC is defined as “very smart progressive politics and information.”
Continue reading …Cryptic message triggers fears over fate of Chinese reporter’s investigative team
July 18, 2011 No Comment
Journalist Wang Keqin causes alarm with blogpost amid claims officials are targeting his China Economic Times newspaper Concerns are growing over the fate of one of China’s most influential investigative journalists amid reports that he and his colleagues are the victims of a backlash by senior Communist party officials. Wang Keqin, a pioneer of in-depth and undercover reporting over the past decade, caused alarm with a cryptic message on his Sina Weibo microblog about taboos and silencing speech. “Where political power burns books, it will also ultimately burn people also,” he wrote. Associates said senior officials were targeting his newspaper – China Economic Times – and its investigative news department was being broken up. “I just received word from a friend at China Economic Times: ‘A ridiculous leader just visited us here, and aside from carrying out political struggle and grinding over people, he understands nothing.’” said a post by Qian Gang, director of the China Media Project at Hong Kong University. Contacted by phone, Wang said he was unable to comment. “Sorry, I have to hang up,” he said. Wang – who grew up in a poor farming family in Gansu province – is among a handful of senior reporters who have pushed back the boundaries of journalism in China, where the media was previously used almost exclusively as a propaganda tool. His reports on child deaths linked to mishandled vaccines, the dire conditions of taxi drivers, and mafia-like “black society” scams have exposed gangsters, extortionists and corrupt officials. This has reportedly led to a price being put on his head. “I had problems with black society [gangs], and problems with red society [officials],” Wang said in a Guardian interview last year. “I heard there was a special investigation team, [with the target of] sending me to prison.” He said his life had been threatened and he had been beaten up on several occasions. Until now, however, it was assumed that his position was safe because he was protected by China’s former premier Zhu Rongji. There is little indication of what may have sparked a bout of pressure from the authorities. At midnight and from 5am to 9am, Wang posted a series of online comments calling for freedom and condemning the corruption of officials. “Thanks for your support … Even if we can only change society a little, that is still progress,” he wrote in one. “Respect everyone’s freedom in order to achieve true freedom,” he noted in another. “Who but a corrupt man would want to become a governor?” read another. Commenting below his post, supporters described Wang as the “backbone of China” and expressed sympathy for his predicament. Ahead of this apparent setback, Wang appeared confident that investigative journalism was growing stronger despite waves of restrictions. “Over a mere 10 years,” he wrote in a recent blogpost , “there were more reporters in the field writing higher quality articles for a growing range of publications.” “Investigative reporters are receiving increasing attention and social respect,” he said. • Additional reporting by Cecily Huang China Press freedom Journalist safety Censorship Newspapers & magazines Newspapers Jonathan Watts guardian.co.uk
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Clerk of parliaments publishes letter on Lords’ site saying peer is not and has ‘never been a member of the House of Lords’ The House of Lords has taken the unprecedented step of publishing a “cease and desist” letter on its website demanding that Lord Christopher Monckton, a prominent climate sceptic and the UK Independence party’s head of research, should stop claiming to be a member of the upper house. The move follows a testy interview given by Monckton to an Australian radio station earlier this month in which he repeated his long-stated belief that he is a member of the House of Lords. When asked by ABC Sydney’s Adam Spencer if he was a member, he said: “Yes, but without the right to sit or vote … [The Lords] have not yet repealed by act of parliament the letters patent creating the peerage and until they do I am a member of the house, as my passport records. It says I am the Right Honourable Viscount Monckton of Brenchley. So get used to it.” The letter, sent by David Beamish, clerk of the parliaments, to Monckton last Friday and now published on the Lords’ website, states: “You are not and have never been a member of the House of Lords. Your assertion that you are a member, but without the right to sit or vote, is a contradiction in terms. No one denies that you are, by virtue of your letters patent, a peer. That is an entirely separate issue to membership of the House. This is borne out by the recent judgement in Baron Mereworth v Ministry of Justice (Crown Office).” In May, Mr Justice Lewison threw out an action at the Royal Courts of Justice brought by Baron Mereworth, who maintains that it his hereditary entitlement to attend the Lords, despite the House of Lords Act 1999 debarring all but 92 of the 650 hereditary peers, including his late father Lord Oranmore and Browne. Mr Justice Lewison ruled : “In my judgement, the reference [in the House of Lords Act 1999] to a ‘member of the House of Lords’ is simply a reference to the right to sit and vote in that house … In a nutshell, membership of the House of Lords means the right to sit and vote in that house.” The letter from Beamish to Monckton continues: “I must therefore again ask that you desist from claiming to be a member of the House of Lords, either directly or by implication, and also that you desist from claiming to be a member ‘without the right to sit or vote’. I am publishing this letter on the parliamentary website so that anybody who wishes to check whether you are a member of the House of Lords can view this official confirmation that you are not.” The Guardian understands that the House of Lords has been consulting with its lawyers on this issue since the ABC radio interview aired. It is not yet clear what form of sanction the Lords has available to it should Monckton persist with his claim. Last year, the then clerk of the parliaments, Michael Pownall, wrote to Monckton stressing that he was not entitled to call himself a member , nor should he use parliament’s famous portcullis symbol on his letterheads or lecture slides, as he has done for a number of years. Monckton wrote back stating that “the House of Lords Act 1999, which purported to exclude hereditary peers from membership of the House of Lords, is defective”. He argued that the act removed the right to sit or vote in the upper house, but did not remove membership because peerages are granted by letters patent, which are a personal gift of the monarch. Monckton claimed in the letter that “only a specific law can annul a grant. The 1999 act was a general law.” Buckingham Palace was drawn into the dispute when it was revealed that Pownall had sought advice from the Lord Chamberlain, a key officer in the royal household, on the potential misuse of the portcullis emblem due to it being the property of the Queen. The Buckingham Palace website states that any misuse of the emblem is prohibited by the Trade Marks Act 1994, meaning Monckton could potentially be liable for fines and a six-month prison term if the palace pursues the matter and successfully prosecutes him. Monckton has since been using a slightly altered portcullis emblem on his lecture slides. The two chains hanging either side of portcullis are now kinked instead of straight. It is not known whether the Lord Chamberlain is content with the change. A spokesperson told the Guardian that the palace was “aware of the issue”, but it had a policy of not commenting on private correspondence between it and an individual. Monckton is currently on a lecture tour of Australia discussing climate change . The tour has been dogged by venue cancellations after he referred to the Australian government’s former climate advisor Prof Ross Garnaut as a fascist during a recent lecture in Los Angeles. Footage of the lecture also showed Monckton displaying a swastika next to one of Garnaut’s quotes. Monckton later apologised for “having made the point I was trying to make in such a catastrophically stupid and offensive way”. Climate change Climate change scepticism House of Lords UK Independence party (Ukip) Leo Hickman guardian.co.uk
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Heathrow owner could seek judicial review if Competition Commission makes it sell Stansted and either Glasgow or Edinburgh BAA could seek a judicial review against the Competition Commission if, as expected, the airport group is ordered on Tuesday to sell Stansted and one of its Scottish airports. The owner of Heathrow is braced for a ruling that it must offload Stansted, Britain’s third largest airport, and either Edinburgh or Glasgow airport. The commission indicated earlier this year in a preliminary review of a 2009 ruling that it was still minded to order the forced divestments in order to increase competition in the airport market in south-east England and Scotland. Tuesday’s final report is expected to give BAA 18 months to arrange an auction that will leave it with a rump of airports at Heathrow, Aberdeen, Southampton and either Glasgow or Edinburgh. However, BAA is adamant that the market for UK airports has changed significantly since the commission gave its initial verdict. One strand of the commission’s argument is that breaking up BAA’s monopoly – it used to own the top three airports in Britain before it sold Gatwick in a £1.5bn deal – will encourage building of new runways. BAA argues that the arrival of a new government in May 2010 has nullified that position, because the Conservative/Lib Dem coalition has ruled out the construction of new landing strips in south-east England, including at Stansted and Gatwick. Nonetheless, the commission has countered that disposals will increase competition by introducing new owners who will improve the customer experience. Gatwick’s new owner, US fund Global Infrastructure Partners, is opening a new security area in its south terminal this year and is luring airlines from Stansted. Although Gatwick’s poaching act confirms a degree of competition with Stansted, BAA believes that Heathrow operates in a completely different market as the UK’s only hub airport and is not constricting growth at Stansted. BAA believes easyJet’s recent move to operate flights from Southend airport underlines the competitive pressures that Stansted faces, with or without new owners. BAA Travel & leisure Airline industry Dan Milmo guardian.co.uk
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Decision to designate national transitional council as legitimate government is taking sides in civil war, says Moscow Russia has criticised the US and other countries for recognising the Libyan rebels’ national transitional council as a legitimate government, saying they are taking sides in the civil war. “Those who declare recognition stand fully on the side of one political force in a civil war,” the Russian foreign minister, Sergei Lavrov, told reporters. The US secretary of state, Hillary Clinton, announced the recognition of the rebels on Friday when she was in Turkey for a meeting of an international contact group on Libya. The major diplomatic step could unblock billions of dollars in frozen Libyan funds for the campaign to end the 41-year rule of Muammar Gaddafi, who has resisted Nato bombing for nearly four months. Russia, along with China, has taken a softer line towards Gaddafi. They were both invited to the Istanbul contact group meeting but did not attend. “Supporters of such a decision are supporters of a policy of isolation, in this case the isolation of those forces that represent Tripoli,” said Lavrov, adding that Moscow was in contact with both Tripoli and the rebels. Russia abstained from voting on a resolution that authorised western force against Gaddafi to protect civilians. It has increasingly criticised the scope of the Nato campaign as well as the role of the Libya contact group. Libya Arab and Middle East unrest Russia Muammar Gaddafi United States Middle East Africa guardian.co.uk
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General John Allen takes over amid further violence including assassination of Karzai aide and death of three Nato troops General David Petraeus has handed over command of American and coalition forces in Afghanistan to another US general, John Allen, who will assume responsibility as Washington and others draw up exit plans from the nearly 10-year conflict. The transfer on Monday came amid further violence: an aide to the Afghan president, Hamid Karzai, and an Afghan MP were assassinated in a Taliban-claimed attack in Kabul, while three Nato troops were killed in eastern Afghanistan. Allen said the reduction in US forces that started this month and the transition of some areas to Afghan control this week did not mean international forces were easing up in their campaign to defeat the Taliban insurgency. “It is my intention to maintain the momentum of the campaign,” the general said at the handover ceremony in Kabul. “There will be tough days ahead. I have no illusions about the challenges ahead.” US officials have heralded successes in reclaiming Taliban strongholds in southern Afghanistan and training Afghan security forces. But violent attacks have continued. On Monday morning, a bomb killed three international service members in eastern Afghanistan. Nato did not provide further details. Most of the troops in the east are American. At least 37 international troops have been killed so far this month in Afghanistan. Allen, who was promoted to a four-star general shortly before the handover ceremony, takes over from Petraeus, who commanded international forces in Afghanistan for one year and is retiring from the military to become the director of the CIA. The ceremony came hours after security forces in the capital killed the final attacker involved in the assassination of Karzai’s adviser Jan Mohammed Khan and a parliamentarian he was meeting in his house. The deaths were announced late on Sunday night, but fighting continued inside the house until early on Monday morning as police tried to take out the remaining assailant who had barricaded himself in. One police officer was killed, the interior ministry said. Afghan officials had originally said the attackers were wearing suicide vests but said on Monday that this was incorrect and they were armed only with guns. David Petraeus Afghanistan US military Nato United States Hamid Karzai Taliban guardian.co.uk
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Friends of the Earth is calling on MPs to block the government’s energy policy statement in parliament on Monday Dozens of new fossil-fuelled power stations are being planned by energy companies, triggering concerns among green campaigners of a new “dash for gas” that could crowd out wind and other cleaner energy projects, the Guardian can reveal. Friends of the Earth is calling on MPs to block the government’s prime energy policy statement, which comes before parliament on Monday amid a deluge of new planning applications or consents. Some plans are already queuing up in the public planning system. Scottish Power wants to construct a 1.2GW station at Avonmouth, near Bristol, while RWE npower is building a 2GW gas plant at Pembroke, south Wales, and a 2.4GW station at Willington in Derbyshire. It is also looking at a smaller facility at Fawley, near Southampton. Smaller schemes include ones by Welsh Power, which wants to construct an 850MW plant at Fleetwood in Lancashire, and Trafford Peaking Power is developing one in Manchester. The Guardian has unearthed as many as 30 potential gas schemes , which are either in late development stage or very early proposals, and which – if built could lock Britain into a higher carbon future at a time when it is trying to promote renewable power to cut emissions. Simon Bullock, a campaigner with FoE, says the national policy statement which will be debated in the Commons today would allow gas projects to be fast-forwarded on the basis that the UK has an “urgent” need for all new capacity to replace old nuclear and coal plants. “Instead of there being an ‘urgent’ need for new gas, there is in fact no need for new gas – beyond the capacity already being built or with planning permission. The new capacity the government says is needed by 2025 is already either under construction or has planning permission,” he argues. London-based consultancy, New Power, argued regulatory and financial uncertainty had slowed a dash for gas but it still believed “interest in new gas-fired plants remains high”. Gas is seen as attractive by developers because plants are relatively cheap and quick to construct but consumer groups are worried about soaring gas prices. A Department of Energy and Climate Change spokesman voting through the national policy statements were a vital part of the move to set Britain on a new course and rebuild out-of-date infrastructure. “The transition to low carbon energy can’t just happen overnight. Gas in particular will be needed to provide vital flexibility to support an increasing amount of low-carbon generation and to maintain security of supply,” he explained. “In the long term there is likely to be a role for gas plant equipped with carbon capture and storage, which is why new gas plants are required to be built carbon capture ready and the carbon capture and storage demonstration competition is open to gas plant as well as coal plant.” RWE npower, which The Guardian calculates could have nearly 9GW of gas-fired plants in action by 2020 and which revealed last week it was in wide-ranging talks with Gazprom of Russia, insists it has made no decisions on facilities such as Willington or Fawley. A spokesman said: “I would not say this a dash for gas as we are progressing renewable and other projects but we do believe in diversity because the future of energy is uncertain.” RWE said talks with Gazprom were at a very early stage but it admitted it could include an equity stake being released to the Russians and combined gas projects in the UK. Gazprom was at one stage linkled with the potential purchase of British Gas, something that caused political concern among some MPs. RWE is also among the companies looking at building nuclear power plants but said there was no question of Gazprom being involved in those schemes. Gas Energy industry Gas Renewable energy Carbon emissions Friends of the Earth Pollution Fossil fuels Energy Terry Macalister guardian.co.uk
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