Eeyore's News and News

Economic clouds gather as Spain faces recession
For years, it has been a staple of daytime television, alongside the inane chat, creaky old movies and decorating do's and don'ts - the “let's-go-live-in-the-sun” show, in which Stoke and Stoke Newington are swapped for, much more often than not, Spain.
But now it has an evil twin. You may have seen it. The we're-not-celebrities-but-please-get-us-out-of-here show, in which the dream has gone horribly wrong. And it is symptomatic of the wider malaise that has gripped what was once a land of boom and money.
After a decade in which per capita income doubled - and household debt tripled - the Spanish economic fiesta is well and truly over. More than 40,000 workers are losing their jobs each week, a far higher rate than elsewhere in Europe. Unemployment is at 2.99 million, a 12-year record of 12.8 per cent of the workforce and the highest unemployment rate in the eurozone.
And there is no respite in sight. According to Pedro Solbes, the Economy Minister: “There is a risk the unemployment rates will be worse next year.”

In November, the grim jobless figures were compounded by a further decline in the services sector as activity, new orders and employment plunged to a record low.
The Markit Purchasing Market Index, which covers service companies ranging from hotels to insurance brokers, dropped to 28.2 in November from 32.2 in October, the sharpest monthly decline since figures were first collected in 1999. The figure is drastically below the 50 level where growth begins.
And underpinning it all is the Spanish construction industry, which accounts for 9 per cent of GDP. It has collapsed. After those years of boom, more than 150 property companies have gone bust so far this year, going into administration as debts mounted and they were unable to pay back creditors.
Metrovacesa, one of Spain's biggest property companies, reached a debt-for-equity deal this week with six creditor banks, which will take a 54 per cent stake in the business.
In doing so, it became the second big property company to fall into the hands of its creditors this year, after Colonial suffered the same fate in April. Martinsa Fadesa, once one of the biggest real estate firms in Spain, went into adminstration in July.
According to Sergio Diaz Valverde, an economist at Caja Madrid: “What started in the construction sector has extended to the entire economy.”
Thus, after more than a decade of the highest growth in the eurozone, Spain's GDP decreased by 0.2 per cent in the third quarter. By the end of the year, it is expected that Spain will officially be in recession.
José Luís Rodríguez Zapatero, the Prime Minister, has budgeted more than €50 billion (£43.5 billion) on stimulus measures to combat what analysts believe will be the country's worst recession in half a century.
The Government announced an €11 billion emergency spending package last month focused on public construction projects, as well as aid for tourism and car manufacturing.
With the country's largest companies struggling to pay their creditors, many are shedding jobs. Consumer confidence is dwindling, with house prices sinking by as much as 10 per cent in big cities such as Madrid and Barcelona.
Car sales, another key indicator of the health of the economy, halved last month. Many manufacturers, including Nissan, Ford and General Motors, are cutting jobs in an increasingly desperate effort to reduce costs.
Yet through the gathering clouds, some see sunlight. Alfredo Pastor, a macroeconomics specialist at the IESE Business School in Barcelona, is more optimistic than many. “I think we will see slow growth of between 0 and 0.1 per cent for the next two or three years,” he said.
Moreover, the country's banking sector has not suffered the same fate as Britain's. There have been no Northern Rocks. Instead, the two main banks, Santander and BBVA, have - so far - remained largely untouched by the present global financial crisis.
The “big two” concentrated on commercial banking, rather than investment banking or derivatives, which have struck down institutions elsewhere.
More strict regulations, introduced by the Bank of Spain after Spain's last slump, also stopped most Spanish banks from lending recklessly.
Francisco González, the chief executive of BBVA, said: “We'll pass through a storm, there will be wounds - but those who emerge will be winners.”
The 45 smaller savings banks, which are more closely involved with mortgages and hence more at risk from the housing slump, may be subject to mergers. Two in the Basque Country have already merged.
Even when Spain begins to emerge from the crisis, deep problems will remain. Productivity grew by an average of only 0.3 per cent a year between 1990 and 1997, according to figures from the Oorganisation for Economic Co-operation and Development. It estimated that between 1998 and 2006, total productivity fell by 0.2 per cent annually.
There are more than one million unsold new homes - enough for four to five years of sales at current levels - and bad loans that could triple to 9 per cent of outstanding debt by 2010, according to Credit Suisse.
Education levels are consistently low. One in three secondary pupils drops out. There has also been a brain-drain as the most talented Spaniards seek higher-paying jobs abroad.
According to Professor Pastor, all this indicates that if the country is to emerge from its slump, it must change: “Spain must improve to get away from its dependence on construction and tourism,” he said.
“We must improve our education, productivity and learn how to keep our most talented people.”
It must, in short, learn to rely far less on the things that attracted all those Britons to the Costas in the first place.
Chill wind blowing
2.99m The present total of unemployed in Spain
40,000 Number of people who are losing their jobs each week
12.8% Proportion of the workforce that is now idle
12 years since the situation was looking so bleak
http://business.timesonline.co.uk/tol/business/economics/article5295565.ece

41 States face failure and are in deep economic trouble
Tax the Rich! State Budget Crisis Deepens: Humanitarian Crisis Emerges
by Shamus Cooke
Social catastrophes are poorly expressed by statistics. A recent study by The Center on Budget and Policy Priorities revealed that 41 states are facing severe budget shortfalls for 2009. Some states are worse off than others, with California ($31.7 billion) and Florida ($5.1 billion) leading the deficit pack. In all, the 41 states are currently facing a $71.9 billion budget shortfall. The key word here is “currently,” since a similar study was conducted by the same group only three months earlier, at which time “only” 29 states were predicted to face shortfalls of a “mere” $48 billion. As the recession deepens, so will the state’s budget problems, turning this “budget crisis” into a humanitarian disaster. Projections have already been made for a $200 billion shortfall by 2010.These deficits have already transcended the computer screen of the statistician into real suffering of the most vulnerable sections of society. In dozens of states across the country, vital services are being cut to the elderly, disabled, the poor, and recently unemployed. Teachers are being cut from schools and tuitions are rising. Workers from state construction sites are being laid off, while social service employees suffer a similar fate. Non profits are closing their doors.
(You can read the rest here if you want)
http://www.globalresearch.ca/index.php?context=viewArticle&code=COO20081206&articleId=11312

Somali pirates fail to seize ship off Tanzania

KUALA LUMPUR, Malaysia (AP) — Somali pirates armed with rocket-propelled grenades and automatic weapons attacked a Dutch-operated container ship off the coast of Tanzania but failed to hijack the vessel, a maritime official said Sunday.
The attack Saturday shows the pirates are becoming bolder and extending their reach further from their base in Somalia, said Noel Choong, who heads the International Maritime Bureau's piracy reporting center in Kuala Lumpur.
Eight pirates in two speedboats chased and opened fire at the ship about 520 miles east of Dar es Salaam in Tanzania, starting a fire on the vessel that was quickly doused by the crew, he said.
"The pirates used RPGs and automatic weapons to attack the ship but it managed to escape after the captain increased vessel speed," Choong said.
The ship, which has 19 crewmembers, flies a Hong Kong flag but is operated out of the Netherlands, he said.
Choong said a white-hulled fishing vessel was spotted nearby and was suspected to be the pirates' mother vessel.
The International Maritime Bureau issued an alert to all ships off the coast of Tanzania to be on a strict anti-piracy watch, he added.
Warships from Denmark, India, Malaysia, Russia, the U.S. and NATO patrol a vast international maritime corridor in the Gulf of Aden near Somalia, escorting some merchant ships and responding to distress calls. But the pirate attacks have not abated.
Some 100 ships have been attacked off the Somali coast this year, of which 40 vessels have been hijacked. Thirteen ships remain in the hands of pirates, including a Saudi supertanker filled with $100 million of crude and a Ukrainian ship loaded with 33 battle tanks.
Choong said his bureau has also warned ships to be on alert for suspected Indonesian pirates in the South China Sea off Malaysia's coast. The group is believed to be responsible for four attacks in recent months, he said.
Since September, pirates armed with guns and machetes have robbed three vessels and hijacked a tug and barge off Tioman island, he said.
http://www.usatoday.com/news/world/2008-12-07-pirates-tanzania_N.htm

WEAPONS OF CHOICERx: Will doctors be writing firearm prescriptions? Company claims federal approval for 9-mm handgun as 'medical device'Posted: December 07, 2008Arthritis? Carpal-tunnel syndrome? A hand injury? If so, a New Jersey company claims it has invented a firearm just for you and that it has received federal approval to market the 9-mm handgun as a "medical device," perhaps even with its cost reimbursable to seniors by Medicare. Matthew Carmel, president of Constitution Arms in Maplewood, N.J., says the Palm Pistol is designed to be fired by people who have disabling conditions that prevent them from holding a normal handgun and pulling the trigger. "It's something that they need to assist them in daily living," Carmel, who hopes to manufacture the device, told New Scientist. Currently the Palm Pistol is just at the patent stage. "The justification for this would be no more or less for a walker or wheelchair, or any number of things that are medical devices," he said. Carmel expects the handgun to become available in 2010. He estimates it will sell for approximately $300. "I've been getting a lot of calls," he said. According to the website: The Palm Pistol is an ergonomically innovative single-shot double-action only defensive firearm chambered in 9mm that may be fired using either hand without regard to orientation of the stock. Suited for home defense, concealed carry or as a backup gun. It is also ideal for seniors, disabled or others who may have limited strength or manual dexterity. Using the thumb instead of the index finger for firing, it significantly reduces muzzle drift, one of the principal causes of inaccurate targeting. Point and shoot couldn't be easier. Constitution Arms reportedly claimed on a medical technology blog to have received U.S. Food and Drug Administration approval for the handgun as a medical device – specifically, a "daily activity assist device." Constitution Arms has said the firm is now attempting to obtain a Durable Medical Code for the pistol which would allow doctors to prescribe it and qualified patients to receive reimbursement through Medicare and, possibly, private insurers. A spokesman for FDA disputed Carmel's claim to New Scientist, saying, "At this time, there have been no formal designations of the Palm Pistol by the FDA as a medical device." Carmel insists he received a notice of registration earlier this week for a Class I medical device, a category that includes walking aids. But Bill Maisel, an expert with Beth Israel Deaconess Medical Center in Boston, said Carmel's documents from FDA fall short of the full approval he claims. Even if the gun is recognized as a legitimate medical device, Carmel has little chance of getting Medicare to pay for it, said Kevin Schulman, an expert on medical device regulation at North Carolina's Duke University Medical Center. "Medicare does not cover everything that FDA approves," said Schulman. "The first question for Medicare is whether this would be potentially beneficial, and the answer seems to be obviously no. It's not implanted in the body, but the obvious result of this thing could be." Carmel is undeterred. Constitution Arms is currently taking refundable $25 deposits from those wishing to be among the first purchasers. Clear confirmation the device has FDA approval, or better yet, Medicare approval, along with a growing escrow account of early buyers' deposits, should attract investors Carmel seeks to the venture.
http://www.worldnetdaily.com/index.php?