World’s financial markets closed for business nursing losses of more than $2.5 trillion (£1.53tn) after a week of selling The world’s financial markets closed for business nursing losses of more than $2.5 tn (£1.53tn) after a week of turbulent selling not seen since the dark days of late 2008, when the big beasts of banking were forced to beg for government help and the global economy was gripped by its worst recession since the 1930s. Hundreds of billions of pounds have been wiped off share prices in London. Across the Atlantic, Wall Street alone was staring at losses of $2tn or more after a fortnight of almost incessant selling. Front pages again carried pictures of traders with their heads in their hands looking at a sea of red on their computer screens. The jagged downward lines of share price indices pointed the way in which the world economy seems to have turned after a week that has left the financial system on the brink of another global crisis. It seems that the problems that first emerged at the outset of the credit crunch four years ago almost to this very day – the unofficial anniversary is this coming Tuesday, 9 August – never went away despite billions of taxpayer support for the system. Louise Cooper, an analyst at BGC Partners, said City traders were starting to “feel the fear. The banking industry is yet again facing a crisis – we are not yet at the post-Lehman days, but the system is creaking loudly. The horrible reality is that those leaders in charge of our economy have no answers.” Even a jobs boost for the US was not enough to lift the mood of deep gloom which had descended over financial markets seven days ago. On a sweltering morning in Washington DC last Friday, the latest health check on the US economy was broadcast around the world , and at first glance the prognosis was bad. The US economy, official figures showed, barely grew in the second quarter of 2011. On closer examination, the bulletin was even worse. Revisions to past data showed that the plunge in activity during the recession had been deeper than originally believed and the recovery much weaker. Those US growth figures kicked off a week of mayhem in the world’s financial markets. They were, according to Nick Parsons, head of strategy at National Australia Bank, a real “game changer” because up until last Friday, US policy makers could shrug off poor data as simply a soft patch for the economy. “But, with no momentum in the economy, a recession much deeper than thought and a recovery which hadn’t even regained the lost ground after three and a half years, data disappointments can no longer just be shrugged off,” Parsons said. “They’re the new reality, and the new reality sucks.” Across the Atlantic, a second shoe was about to fall. Barely a week after the leaders of the 17 nations of the eurozone had hailed as historic a package that offered fresh help for Greece and the promise of pre-emptive support for any other member of the single currency that fell foul of jittery bond market investors, the deal was already unravelling. The immediate cause for concern was not one of the usual suspects but Cyprus, one of the smallest members of the euro club and which appeared to be the next country likely to need financial help. But events at the eastern end of the Med were just the sign of worse to come from its bigger partners. Much worse. By the time Wall Street dealers had returned from their weekends in the Hamptons, there was more poor economic data to digest, and not just from the US this time. The first day of each month sees the release of reports on manufacturing from around the world. In the UK, China, the eurozone and the US, the message was the same: activity was slowing, in some cases to the point where industrial output was stalling. Tuesday saw the focus switch back to Europe, where the interest rates on Spanish and Italian bonds rose above the level deemed critical in the financial markets – 6% – and to their highest levels since the creation of the single currency. Spain’s prime minister, José Luis Zapatero, said he was postponing his holiday plans. Italy held an emergency meeting of economic policy makers. In Britain, by contrast, yields on benchmark 10-year gilts fell to their lowest level since 1946. The Treasury said it was a sign of confidence in George Osborne’s decision to take a lead on deficit reduction, a lead that the US was now being forced to follow. But Jonathan Portes, director of the National Institute for Economic and Social Research, said low gilt yields were a sign of economic weakness. In the City, they said the UK was the best-looking horse in the glue factory. Wall Street closed 265 points lower. The economic news from the UK on Wednesday was, for once, better than expected. The barometer of the services sector, which accounts for 75% of national output, showed a rise in July, something that in normal circumstances would have bolstered confidence in the markets. But with Wall Street down heavily overnight and taking another thumping in early New York trading thanks to disappointing news from the US services sector, the FTSE 100 dropped 133 points. A late rally, which saw the Dow break an eight-day losing streak, came too late for London dealers. And so the scene was set for Black Thursday, a day when all the pieces of the jigsaw slotted together. There was a thumping loss for the partly nationalised Lloyds bank. There was criticism from José Manuel Barroso, president of the European commission, of the snail’s pace at which European leaders were responding to the crisis. This from the man who had been insisting Europe was finally on top of its crisis. The European Central Bank appeared to be doing the bare minimum to defuse the tension. Speculation that the single currency could unravel meshed with concern that the US was about to go into a double-dip recession, with knock-on effects for the global economy. The FTSE was down almost 200 points. Oil prices fell by 5%. The Swiss and Japanese central banks intervened. Gold rose to new record levels before falling back amid reports that hedge funds were selling their holdings to cover losses. Washington woke up to another scorching day and some brief respite from better than expected jobs figures. But those market graphs soon turned downwards again. The forecast from traders is for more stormy weather. Stock markets European debt crisis Financial crisis FTSE Dow Jones Global recession Global economy Banking Financial sector European banks Economics United States Larry Elliott guardian.co.uk
Continue reading …World’s financial markets closed for business nursing losses of more than $2.5 trillion (£1.53tn) after a week of selling The world’s financial markets closed for business nursing losses of more than $2.5 tn (£1.53tn) after a week of turbulent selling not seen since the dark days of late 2008, when the big beasts of banking were forced to beg for government help and the global economy was gripped by its worst recession since the 1930s. Hundreds of billions of pounds have been wiped off share prices in London. Across the Atlantic, Wall Street alone was staring at losses of $2tn or more after a fortnight of almost incessant selling. Front pages again carried pictures of traders with their heads in their hands looking at a sea of red on their computer screens. The jagged downward lines of share price indices pointed the way in which the world economy seems to have turned after a week that has left the financial system on the brink of another global crisis. It seems that the problems that first emerged at the outset of the credit crunch four years ago almost to this very day – the unofficial anniversary is this coming Tuesday, 9 August – never went away despite billions of taxpayer support for the system. Louise Cooper, an analyst at BGC Partners, said City traders were starting to “feel the fear. The banking industry is yet again facing a crisis – we are not yet at the post-Lehman days, but the system is creaking loudly. The horrible reality is that those leaders in charge of our economy have no answers.” Even a jobs boost for the US was not enough to lift the mood of deep gloom which had descended over financial markets seven days ago. On a sweltering morning in Washington DC last Friday, the latest health check on the US economy was broadcast around the world , and at first glance the prognosis was bad. The US economy, official figures showed, barely grew in the second quarter of 2011. On closer examination, the bulletin was even worse. Revisions to past data showed that the plunge in activity during the recession had been deeper than originally believed and the recovery much weaker. Those US growth figures kicked off a week of mayhem in the world’s financial markets. They were, according to Nick Parsons, head of strategy at National Australia Bank, a real “game changer” because up until last Friday, US policy makers could shrug off poor data as simply a soft patch for the economy. “But, with no momentum in the economy, a recession much deeper than thought and a recovery which hadn’t even regained the lost ground after three and a half years, data disappointments can no longer just be shrugged off,” Parsons said. “They’re the new reality, and the new reality sucks.” Across the Atlantic, a second shoe was about to fall. Barely a week after the leaders of the 17 nations of the eurozone had hailed as historic a package that offered fresh help for Greece and the promise of pre-emptive support for any other member of the single currency that fell foul of jittery bond market investors, the deal was already unravelling. The immediate cause for concern was not one of the usual suspects but Cyprus, one of the smallest members of the euro club and which appeared to be the next country likely to need financial help. But events at the eastern end of the Med were just the sign of worse to come from its bigger partners. Much worse. By the time Wall Street dealers had returned from their weekends in the Hamptons, there was more poor economic data to digest, and not just from the US this time. The first day of each month sees the release of reports on manufacturing from around the world. In the UK, China, the eurozone and the US, the message was the same: activity was slowing, in some cases to the point where industrial output was stalling. Tuesday saw the focus switch back to Europe, where the interest rates on Spanish and Italian bonds rose above the level deemed critical in the financial markets – 6% – and to their highest levels since the creation of the single currency. Spain’s prime minister, José Luis Zapatero, said he was postponing his holiday plans. Italy held an emergency meeting of economic policy makers. In Britain, by contrast, yields on benchmark 10-year gilts fell to their lowest level since 1946. The Treasury said it was a sign of confidence in George Osborne’s decision to take a lead on deficit reduction, a lead that the US was now being forced to follow. But Jonathan Portes, director of the National Institute for Economic and Social Research, said low gilt yields were a sign of economic weakness. In the City, they said the UK was the best-looking horse in the glue factory. Wall Street closed 265 points lower. The economic news from the UK on Wednesday was, for once, better than expected. The barometer of the services sector, which accounts for 75% of national output, showed a rise in July, something that in normal circumstances would have bolstered confidence in the markets. But with Wall Street down heavily overnight and taking another thumping in early New York trading thanks to disappointing news from the US services sector, the FTSE 100 dropped 133 points. A late rally, which saw the Dow break an eight-day losing streak, came too late for London dealers. And so the scene was set for Black Thursday, a day when all the pieces of the jigsaw slotted together. There was a thumping loss for the partly nationalised Lloyds bank. There was criticism from José Manuel Barroso, president of the European commission, of the snail’s pace at which European leaders were responding to the crisis. This from the man who had been insisting Europe was finally on top of its crisis. The European Central Bank appeared to be doing the bare minimum to defuse the tension. Speculation that the single currency could unravel meshed with concern that the US was about to go into a double-dip recession, with knock-on effects for the global economy. The FTSE was down almost 200 points. Oil prices fell by 5%. The Swiss and Japanese central banks intervened. Gold rose to new record levels before falling back amid reports that hedge funds were selling their holdings to cover losses. Washington woke up to another scorching day and some brief respite from better than expected jobs figures. But those market graphs soon turned downwards again. The forecast from traders is for more stormy weather. Stock markets European debt crisis Financial crisis FTSE Dow Jones Global recession Global economy Banking Financial sector European banks Economics United States Larry Elliott guardian.co.uk
Continue reading …Wikipedia is in danger of wasting away as contributors jump ship and aren’t replaced by new ones, founder Jimmy Wales says. “We are not replenishing our ranks,” he tells the AP . “It is not a crisis, but I consider it to be important.” Wales—who describes the average contributor as…
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Corporal Stephen Curley, 26, died instantly when roadside bomb was detonated by 14-year-old boy in Helmand A 14-year-old boy was promised $80 (£50) by the Taliban to set off a device that killed a British marine in Afghanistan, an inquest has heard. Stephen Curley , 26, was killed instantly when a roadside bomb was detonated in Helmand. A few days after Curley was killed, the boy was handed in by his father and confessed to setting off the IED, the inquest in Exeter was told. The boy, named as Aga Wali, confessed to the Afghan police after the Taliban went back on its deal to pay him and told him he ought to have carried out the attack to help his country. He was not handed over to British security or intelligence officers but was questioned by the local Afghan chief of police. It is believed the boy was sentenced to jail but it is not known how long he will serve or if he is still in custody. Curley’s widow, Kirianne, 28, only learned of the teenager’s apparent involvement shortly before the hearing. Lieutenant Colonel Paul James, who was in charge of operations with 40 Commando Royal Marines at the time, said: “I received a report from the Afghan national police that a 14-year-old boy had been handed in by his father for being the trigger man in an IED attack.” James said the date corresponded to the day Curley was caught in the explosion in May last year. He added: “The father was concerned that his son was embarking upon a life as a fighter with the Taliban and feared for his life. “He said Aga Wali had been told he would be paid 80 US dollars but when he went for payment they said aggressively he should be fighting for ideological reasons and not financial gain. “Aga Wali left angrily and felt betrayed. The boy was detained briefly within the national directorate of security before being processed through the courts and a sentence of imprisonment was imposed of an uncertain period of time.” Another witness, Captain Dom Rogers said he was present when the boy was questioned. “In my presence he admitted activating an IED and acting as the trigger man. He was unable to read a map but was able to describe the ground and it fitted with that where Corporal Curley was wounded fatally,” he said. The fatal patrol was organised as part of an effort to reassure local people concerned about their safety. Curley’s wife had given birth to their son, William, 18 weeks before he was killed. At the time of his death she said: “It is impossible for me to express what my husband meant to me. Daddy to our 18-week-old son William and my partner in crime, Stevie was my purpose, what makes me tick. “A man of few but powerful words when it mattered, he lived by the motto ‘If you’re not living life on the edge, you’re taking up too much room.’” Afghanistan Military Steven Morris guardian.co.uk
Continue reading …Corporal Stephen Curley, 26, died instantly when roadside bomb was detonated by 14-year-old boy in Helmand A 14-year-old boy was promised $80 (£50) by the Taliban to set off a device that killed a British marine in Afghanistan, an inquest has heard. Stephen Curley , 26, was killed instantly when a roadside bomb was detonated in Helmand. A few days after Curley was killed, the boy was handed in by his father and confessed to setting off the IED, the inquest in Exeter was told. The boy, named as Aga Wali, confessed to the Afghan police after the Taliban went back on its deal to pay him and told him he ought to have carried out the attack to help his country. He was not handed over to British security or intelligence officers but was questioned by the local Afghan chief of police. It is believed the boy was sentenced to jail but it is not known how long he will serve or if he is still in custody. Curley’s widow, Kirianne, 28, only learned of the teenager’s apparent involvement shortly before the hearing. Lieutenant Colonel Paul James, who was in charge of operations with 40 Commando Royal Marines at the time, said: “I received a report from the Afghan national police that a 14-year-old boy had been handed in by his father for being the trigger man in an IED attack.” James said the date corresponded to the day Curley was caught in the explosion in May last year. He added: “The father was concerned that his son was embarking upon a life as a fighter with the Taliban and feared for his life. “He said Aga Wali had been told he would be paid 80 US dollars but when he went for payment they said aggressively he should be fighting for ideological reasons and not financial gain. “Aga Wali left angrily and felt betrayed. The boy was detained briefly within the national directorate of security before being processed through the courts and a sentence of imprisonment was imposed of an uncertain period of time.” Another witness, Captain Dom Rogers said he was present when the boy was questioned. “In my presence he admitted activating an IED and acting as the trigger man. He was unable to read a map but was able to describe the ground and it fitted with that where Corporal Curley was wounded fatally,” he said. The fatal patrol was organised as part of an effort to reassure local people concerned about their safety. Curley’s wife had given birth to their son, William, 18 weeks before he was killed. At the time of his death she said: “It is impossible for me to express what my husband meant to me. Daddy to our 18-week-old son William and my partner in crime, Stevie was my purpose, what makes me tick. “A man of few but powerful words when it mattered, he lived by the motto ‘If you’re not living life on the edge, you’re taking up too much room.’” Afghanistan Military Steven Morris guardian.co.uk
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Supporters clash with riot police removing opposition leader from Kiev courtroom on judge’s orders Ukraine’s former prime minister Yulia Tymoshenko has been arrested by police acting on a judge’s orders for violating court procedure during her trial for abuse of office. Her supporters squabbled on Friday with riot police in court, trying to prevent them from driving her away in a prison car and shouting: “Shame! Shame!” Dozens gathered outside court in Kiev and tried to block the road, but were pushed aside. The charismatic Tymoshenko has criticised the trial as a ploy by President Viktor Yanukovych to bar her from elections and mocked the court. She has refused to rise when addressing the court, as required, and routinely insulted the judge. Her supporters have repeatedly disrupted hearings. Complying with the presiding judge’s orders, police surrounded Tymoshenko and escorted her out of the courtroom. The 50-year-old opposition leader is charged with abusing her powers by signing a natural gas import contract with Russia in 2009 that prosecutors claim was disadvantageous to Ukraine. Tymoshenko insists she is innocent, arguing that the contract ended weeks of natural gas disruptions to Ukrainian and European consumers and that she was authorised to sign the deal as prime minister. Experts in Ukraine and abroad believe the trial’s real motive is to disqualify Tymoshenko from upcoming parliamentary and presidential elections by convicting her as a felon. Tymoshenko has a long and bitter history with Yanukovych. She was the central figure in Ukraine’s 2004 Orange Revolution mass protests, which threw out Yanukovych’s fraud-tainted victory in a presidential election and led to another vote that brought a pro-western government to power. Tymoshenko became prime minister, but Ukrainians grew frustrated by economic hardships, slow reforms and endless bickering in the Orange camp. As a result, she lost to Kremlin-friendly Yanukovych in the 2010 presidential election. Ukraine Yulia Tymoshenko Europe guardian.co.uk
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Supporters clash with riot police removing opposition leader from Kiev courtroom on judge’s orders Ukraine’s former prime minister Yulia Tymoshenko has been arrested by police acting on a judge’s orders for violating court procedure during her trial for abuse of office. Her supporters squabbled on Friday with riot police in court, trying to prevent them from driving her away in a prison car and shouting: “Shame! Shame!” Dozens gathered outside court in Kiev and tried to block the road, but were pushed aside. The charismatic Tymoshenko has criticised the trial as a ploy by President Viktor Yanukovych to bar her from elections and mocked the court. She has refused to rise when addressing the court, as required, and routinely insulted the judge. Her supporters have repeatedly disrupted hearings. Complying with the presiding judge’s orders, police surrounded Tymoshenko and escorted her out of the courtroom. The 50-year-old opposition leader is charged with abusing her powers by signing a natural gas import contract with Russia in 2009 that prosecutors claim was disadvantageous to Ukraine. Tymoshenko insists she is innocent, arguing that the contract ended weeks of natural gas disruptions to Ukrainian and European consumers and that she was authorised to sign the deal as prime minister. Experts in Ukraine and abroad believe the trial’s real motive is to disqualify Tymoshenko from upcoming parliamentary and presidential elections by convicting her as a felon. Tymoshenko has a long and bitter history with Yanukovych. She was the central figure in Ukraine’s 2004 Orange Revolution mass protests, which threw out Yanukovych’s fraud-tainted victory in a presidential election and led to another vote that brought a pro-western government to power. Tymoshenko became prime minister, but Ukrainians grew frustrated by economic hardships, slow reforms and endless bickering in the Orange camp. As a result, she lost to Kremlin-friendly Yanukovych in the 2010 presidential election. Ukraine Yulia Tymoshenko Europe guardian.co.uk
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At least 10 people dead after government troops, who witnesses claim also tried to steal food, opened fire at UN distribution site Somali government troops opened fire on famine refugees on Friday, killing at least 10 people, as both groups made a grab for food at a UN distribution site in Mogadishu, witnesses said. Witnesses accused government soldiers of starting the chaos by trying to steal some of the 290 tonnes of dry rations as aid workers tried to hand them out at Badbaado, the biggest camp in the Somali capital for famine victims. Refugees then joined in the scramble, prompting some soldiers to open fire, the witnesses said. “It was carnage. They ruthlessly shot everyone,” said Abdi Awale Nor, who has been living at the camp. “Dead bodies were left on the ground and other wounded bled to death.” David Orr, a spokesman for the World Food Programme, said the food distribution started smoothly at about 6am, but degenerated a couple hours later. “We got reports of trouble, looting. The trucks were overwhelmed by a mob of people. There were reports of some shots fired,” said Orr, who said he could not confirm any death tolls. Another refugee, Muse Sheik Ali, said soldiers tried to steal some of the food aid and refugees began to take the food. “Soldiers opened fire at them. Then soldiers took the food and people fled from the camp,” he said. Thousands of Somalis have flooded into Mogadishu from the drought-stricken south, walking much or all the way and seeing weakened loved ones perish from starvation or complications from malnutrition. The drought and famine in Somalia have killed more than 29,000 children under five in the past 90 days in southern Somalia alone, according to US estimates. The Somalia prime minister, Abdiweli Mohamed Ali, visited the camp after the violence and said he was “deeply sorry”. He said an investigation would be held and promised harsh punishment for anyone found guilty. International groups face huge challenges in distributing food inside Somalia. The worst-hit part of the country is a no-go area for most aid groups because it is controlled by al-Qaida-linked insurgents, who deny there is a famine and who have allowed only the International Committee of the Red Cross to enter. More than 12 million people in the Horn of Africa are in need of immediate food aid. The UN says 640,000 children are acutely malnourished in Somalia, where the UN has declared five famine zones, including the refugee camps of Mogadishu. Witnesses said two WFP trucks were delivering aid when the chaos broke out. WFP often tries to do what it calls “wet feedings” in Somalia – giving out already made food like porridge – to limit the chances that it will be looted. But in this case it was dry rations, Orr said. Somali soldiers control just part of the capital and are poorly trained. “They fired on us as if we were their enemy,” said famine refugee Abidyo Geddi. “When people started to take the food then the gunfire started and everyone was being shot. We cannot stay here much longer. We don’t get much food and the rare food they bring causes death and torture.” Private militias – most of them politically connected – are competing to guard or steal food. At least four competing militias have the run of government-controlled areas of Mogadishu. The gunmen roar around in pickup trucks and wage battle over the wages they hope to be paid to either guard the aid or for the cash it will bring when it is stolen and sold. The insecurity amid the famine echoes the situation in 1992 that prompted deployment of a US-led multinational force to safeguard the delivery of food to Somalia’s starving. That international intervention collapsed in 1993 after two US helicopters were shot down and 18 servicemen were killed in the crashes and subsequent rescue attempt in the streets of Mogadishu. Famine Somalia Africa United Nations guardian.co.uk
Continue reading …At least 10 people dead after government troops, who witnesses claim also tried to steal food, opened fire at UN distribution site Somali government troops opened fire on famine refugees on Friday, killing at least 10 people, as both groups made a grab for food at a UN distribution site in Mogadishu, witnesses said. Witnesses accused government soldiers of starting the chaos by trying to steal some of the 290 tonnes of dry rations as aid workers tried to hand them out at Badbaado, the biggest camp in the Somali capital for famine victims. Refugees then joined in the scramble, prompting some soldiers to open fire, the witnesses said. “It was carnage. They ruthlessly shot everyone,” said Abdi Awale Nor, who has been living at the camp. “Dead bodies were left on the ground and other wounded bled to death.” David Orr, a spokesman for the World Food Programme, said the food distribution started smoothly at about 6am, but degenerated a couple hours later. “We got reports of trouble, looting. The trucks were overwhelmed by a mob of people. There were reports of some shots fired,” said Orr, who said he could not confirm any death tolls. Another refugee, Muse Sheik Ali, said soldiers tried to steal some of the food aid and refugees began to take the food. “Soldiers opened fire at them. Then soldiers took the food and people fled from the camp,” he said. Thousands of Somalis have flooded into Mogadishu from the drought-stricken south, walking much or all the way and seeing weakened loved ones perish from starvation or complications from malnutrition. The drought and famine in Somalia have killed more than 29,000 children under five in the past 90 days in southern Somalia alone, according to US estimates. The Somalia prime minister, Abdiweli Mohamed Ali, visited the camp after the violence and said he was “deeply sorry”. He said an investigation would be held and promised harsh punishment for anyone found guilty. International groups face huge challenges in distributing food inside Somalia. The worst-hit part of the country is a no-go area for most aid groups because it is controlled by al-Qaida-linked insurgents, who deny there is a famine and who have allowed only the International Committee of the Red Cross to enter. More than 12 million people in the Horn of Africa are in need of immediate food aid. The UN says 640,000 children are acutely malnourished in Somalia, where the UN has declared five famine zones, including the refugee camps of Mogadishu. Witnesses said two WFP trucks were delivering aid when the chaos broke out. WFP often tries to do what it calls “wet feedings” in Somalia – giving out already made food like porridge – to limit the chances that it will be looted. But in this case it was dry rations, Orr said. Somali soldiers control just part of the capital and are poorly trained. “They fired on us as if we were their enemy,” said famine refugee Abidyo Geddi. “When people started to take the food then the gunfire started and everyone was being shot. We cannot stay here much longer. We don’t get much food and the rare food they bring causes death and torture.” Private militias – most of them politically connected – are competing to guard or steal food. At least four competing militias have the run of government-controlled areas of Mogadishu. The gunmen roar around in pickup trucks and wage battle over the wages they hope to be paid to either guard the aid or for the cash it will bring when it is stolen and sold. The insecurity amid the famine echoes the situation in 1992 that prompted deployment of a US-led multinational force to safeguard the delivery of food to Somalia’s starving. That international intervention collapsed in 1993 after two US helicopters were shot down and 18 servicemen were killed in the crashes and subsequent rescue attempt in the streets of Mogadishu. Famine Somalia Africa United Nations guardian.co.uk
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