Eeyore's News and View

1930s beggar-thy-neighbour fears as China devalues
China has begun to devalue the yuan for the first time in over a decade, raising fears that it will set off a 1930s-style race to the bottom and tip the global economy into an even deeper slump.
By Ambrose Evans-Pritchard,
The central bank has shifted the central peg of its dollar band twice this week in a calculated move that suggests Beijing aims to offset the precipitous slide in Chinese manufacturing by trying to gain further export share abroad.
The futures markets are pricing in a 6pc devaluation over the next year. "This is clearly a big shift in policy and we are now on alert," said Simon Derrick, currency chief at the Bank of New York Mellon.
The move follows a Politburo speech by President Hu Jintao warning that China is "losing competitive edge in the world market".
China has allowed a crawling 20pc revaluation over the past three years. Any reversal risks setting off conflict with the incoming team of President-Elect Barack Obama in Washington. Mr Obama called China a "currency manipulator" during the campaign, a term that carries penalties under US trade law.
Outgoing US Treasury Secretary Hank Paulson is viewed as a "friend of China". He called for a stronger yuan this week before embarking on a visit to Beijing, but the plea was couched in friendly terms. This soft-peddling may soon change.
Hans Redeker, currency head at BNP Paribas, said China's policy switch could set off a dangerous chain of events. "If they play this beggar-thy-neighbour game, it will cause a deflationary shock for the whole world," he said.
It makes sense for countries with current account deficits such as the UK, US or Turkey to let their currencies fall, but China has the world's biggest trade surplus.
Michael Pettis, a professor at Beijing University, said it was "very worrying" that a pro-devalulation bloc seemed to be gaining the upper hand in the Communist Party. "I really do believe that we are on the brink of a very ugly period for trade relations," he said.
China has relied on exports to North America and Europe as its growth engine, making it acutely vulnerable to the contraction in global demand. Mr Pettis said this recalls the role played by the US in the 1920s, a parallel fraught with danger. "In the 1930s the US foolishly tried to dump capacity abroad, but the furious reaction of trading partners caused the strategy to misfire. China already seems to be in the process of engineering its own Smoot-Hawley," he said, referring to the infamous US Tariff Act in 1930.
China showed restraint during the Asian crisis in 1998, holding the line against domino devaluations across the region. It may yet hold the line this time.
However, this crisis is more serious. The manufacturing sector has seen the steepest decline since the records began, with devastation sweeping the textile, furniture and toy sectors. Civil unrest has begun to rock the Guangdong and Longnan regions.
Beijing has slashed rates and unveiled a fiscal stimulus of 14pc of GDP, but most of the spending comes in the form of instructions to local governments to spend more – but without giving them the money. Does China really intend to step in to prop up global demand? The jury is out.
http://www.telegraph.co.uk/finance/economics/3546471/Chinese-economy-1930s-beggar-thy-neighbour-fears-as-China-devalues.html

"Koobface" virus turns up on Facebook
By Jim Finkle
BOSTON (Reuters) - Facebook's 120 million users are being targeted by a virus dubbed "Koobface" that uses the social network's messaging system to infect PCs, then tries to gather sensitive information such as credit card numbers.
It is the latest attack by hackers increasingly looking to prey on users of social networking sites.
"A few other viruses have tried to use Facebook in similar ways to propagate themselves," Facebook spokesman Barry Schnitt said in an e-mail. He said a "very small percentage of users" had been affected by these viruses.
"It is on the rise, relative to other threats like e-mails," said Craig Schmugar, a researcher with McAfee Inc.
Koobface spreads by sending notes to friends of someone whose PC has been infected. The messages, with subject headers like, "You look just awesome in this new movie," direct recipients to a website where they are asked to download what it claims is an update of Adobe Systems Inc's Flash player.
If they download the software, users end up with an infected computer, which then takes users to contaminated sites when they try to use search engines from Google, Yahoo, MSN and Live.com, according McAfee.
McAfee warned in a blog entry on Wednesday that its researchers had discovered that Koobface was making the rounds on Facebook.
Facebook requires senders of messages within the network to be members and hides user data from people who do not have accounts, said Chris Boyd, a researcher with FaceTime Security Labs. Because of that, users tend to be far less suspicious of messages they receive in the network.
"People tend to let their guard down. They think you've got to log in with an account, so there is no way that worms and other viruses could infect them," Boyd said.
Social network MySpace, owned by News Corp, was hit by a version of Koobface in August and used security technology to eradicate it, according to a company spokeswoman. The virus has not cropped up since then, she said.
Privately held Facebook has told members to delete contaminated e-mails and has posted directions at www.facebook.com/security on how to clean infected computers.
Richard Larmer, chief executive of RLM Public Relations in New York, said he threw out his PC after it became infected by Koobface, which downloaded malicious software onto his PC. It was really bad. It destroyed my computer," he said.
McAfee has not yet identified the perpetrators behind Koobface, who are improving the malicious software behind the virus in a bid to outsmart security at Facebook and MySpace.
"The people behind it are updating it, refining it, adding new functionalities," said McAfee's Schmugar.
http://www.reuters.com/article/technologyNews/idUSTRE4B37LV20081205


The last Thanksgiving before GD2?By David ChuOnline Journal Guest WriterNov 27, 2008, 00:16
Happy Thanksgiving, America!
Enjoy this wonderful family and friends celebration while you still can.
Because around the corner lurks GD2. More about this vile monster later.
Thanksgiving, U.S.A.
I remember fondly the Thanksgivings I used to spend with the Catholic family of my ex-wife in Southern California. I only mentioned that they are Catholic to emphasis that these festive celebrations were large gatherings. They usually took place either in Anaheim where her parents lived or in Orange where her uncle and aunt lived.
Thanksgiving in southern California is a special time. Weather is not cold as it is in most parts of the U.S. There is no snow on the ground. It feels more like a late summer than an early winter.
Usually, there would be almost 40 family members including a lot of grown-up kids and grandkids. The beloved matriarch who held this family together is an incredible lady whose first name is Gloria, having been born on Easter day in 1924. Gloria was one of these rare ladies whose refined manners and compassion could straighten out any delinquent and stray youth, and she did do that during her teaching days at a community college in Anaheim.
Even though I didn’t make it to her funeral (she passed away in 2005 after many years of courageously fighting a rare and painful lung disease), I respect this woman and consider her to be a true saint who touched the lives of many including mine. Because if there was ever an unassuming, flesh-and-blood saint that I have met in this lifetime, Gloria would be that one!
So I dedicate this “prescient” article on this Thanksgiving 2008 to “Lady Gloria.” (I think she would want you to know what is about to happen from her vantage point. She can certainly see it much better from up there!)
What the heck is GD2?
Simply, “Great Depression 2.”
But as the famous physicist, Neil Bohr, once remarked, “Prediction is very difficult, especially about the future.”
However, just because something is difficult does not mean that we shouldn’t try to get a handle on it, especially on something dire that concerns our future, or attempt to read the “handwriting on the wall” to use an old Biblical expression.
Using my long ago analogy by calling the ship of state (financial and economic affairs) of the U.S. as the U.S.S. Titanic, America has already scrapped that massive iceberg: there is a huge gaping hole on the starboard side of the U.S.S. Titanic!
The U.S.S. Titanic encountered this iceberg during the week of October 6, 2008. Everything that happens afterwards and in the immediate days, weeks, months, and even years following is just governments and their corrupt, criminal fiends on Wall Street and elsewhere going through the motions. Like the band that kept playing aboard the real R.M.S. Titanic, the politicians and the “captains of industry” will paint a bright and rosy picture for the third-class passengers aboard the U.S.S. Titanic, while they all don on their financial life jackets and run like hell for the very few financial lifeboats!
What do you think the $850 billion TARP (“Troubled Asset Recovery Program”) was for?
Then visualize life jackets embossed with the letters “TARP” on the back!
Buried in a report from Biz.yahoo.com on November 12 titled “Stocks plunge for third straight session” was the following incredible statement: “According to the Dow Jones Wilshire 5000 index [which reflects the value of almost all U.S. stocks], Wednesday’s [November 12] paper losses amounted to about $600 billion. By that measure, the [U.S.] stock market has shed $9.1 trillion since the index’s Oct. 9, 2007, peak.” The bolded emphasis in mine. The Dow Industrial Average or Dow, which is comprised of 30 “blue chip” stocks, closed out at 8,262 on November 12, and was at 8,046 at the close on November 21, so the estimate of $9.1 trillion of financial losses since October 9 is a pretty close guess, if not a conservative one.
(There is more with charts and other viusual aids, go to read complete article and links for charts)
http://onlinejournal.com/artman/publish/article_4059.shtml

I wish it was our courts in the US doing this, but good for you UK
One million innocent people could have their profiles wiped from Britain's 'Orwellian' DNA database after court ruling
Nearly a million innocent citizens could see their profiles deleted from the DNA database following a landmark court ruling.
European judges said it was unlawful for police to store swabs and fingerprints from suspects later cleared of wrongdoing.
In a damning verdict, the 17-strong panel said keeping the records 'could not be regarded as necessary in a democracy'.
Home Secretary Jacqui Smith said she was disappointed by the decision.
But some campaigners said the future of other Government databases, including the national ID register, was in doubt.
Before 2001, the police had to destroy DNA samples of individuals acquitted or not charged. But a rule change has allowed them to keep profiles of everyone arrested for a recordable offence in England, Wales and Northern Ireland.
The details of about 4.5million people are held on the database yet one in five - including 40,000 children - has never been charged with an offence.
The Home Office says the register has proved a key intelligence tool in solving 3,500 cases - including high-profile rapes and murders.
Yesterday however the European Court of Human Rights ruled against police in a case brought by two British men.
Their profiles were stored by South Yorkshire Police despite neither being convicted of an offence.
The Strasbourg court found the force had violated article 8 of the European Convention on Human Rights - the right to respect for private and family life.
In a strongly-worded attack, it condemned the 'blanket and indiscriminate nature' of the powers.
One of the victors is Michael Marper, 45, the other a 19-year-old named in court only as 'S'.
The judges said that keeping their DNA had left them under a cloud of suspicion because they were 'entitled to the presumption of innocence, yet were treated in the same way as convicted persons'.
Peter Mahy, who represented the men, said: 'The Government should now start destroying the DNA records of those people who are currently on the database and who are innocent of any crime.'
MPs, civil liberty groups, and individual protesters have claimed the DNA database was brought in without proper legislation.
Dominic Grieve, Tory Shadow Home Secretary, said: 'This vindicates all that we have been saying about the Government's wrongheaded approach to this issue which has caused so much resentment amongst the law-abiding majority and done so much to undermine confidence in the criminal justice system.
'That the DNA database has become arbitrary with the profiles of over a million innocent people on it but not the profiles of every serious offender in the country. It should target the guilty, not the innocent.'
Liberal Democrat leader Nick Clegg said: 'This demolishes the Government's view that the way to fight crime is to blur the distinction between innocence and guilt.
'It is a measure of this Government's disregard for civil liberties that a European court has to fight to protect traditional British freedoms from an Orwellian database.'
(you can read the complete article at the following link)
http://www.dailymail.co.uk/news/article-1091880/One-million-innocent-people-profiles-wiped-Britains-DNA-database-court-ruling.html