8 Reasons Europe’s Crisis is Spreading

By, Ron DeLegge

News Flash: The financial problems in Europe are not contained regionally, nor are they contained globally. 

The behavior of financial markets along with world events indicate that Europe’s financial crisis is (unfortunately) spreading. This is not a scare tactic, but an honest evaluation of the facts. Let’s analyze some of the reasons behind this.

1) Europe’s banks are undercapitalized. Last week European banks in France and elsewhere needed an emergency cash infusion from a coalition of world central banks. The International Monetary Fund (IMF) in its “Global Financial Stability Report” estimates $408 billion in bank’s risk exposure to toxic government debt from countries like Greece, Ireland (NYSEArca: EIRL) and Portugal.  Because Europe’s crisis is moving so rapidly, even IMF is having trouble estimating the true liabilities for European banks. Just last month, IMF said it would take only $272 billion to cover banks’ capital shortfall.

2) Banks still aren’t properly managing risk.The global banking system is a mess because banks are deficient at underwriting and managing financial risk. The fact that European banks are overexposed to toxic sovereign debt is proof enough. Furthermore, UBS AG (NYSE: UBS) is the latest poster child for incompetence when it comes to supervising its traders. It’s never a good time to announce $2.3 billion in losses from bunk trades, but doing it during the middle of a credit crisis is surreal. How many other banks are at jeopardy for this same kind of nonsense?

3) Credit downgrades.We don’t advocate putting implicit faith in credit ratings, because history has taught us they are nothing more than financial opinions and frequently, not very accurate ones. Still, a gander at the latest downgrading trend is troublesome. Intuitive observers will note, this is not an isolated phenomenon, but a global trend. Sovereign debt from Greece and Portugal, after several downgrades, is now rated junk, Ireland has been downgraded, Italy was downgraded this week, and Japanese along with U.S. debt was lowered in August. The pace at which government debt is being downgrade is accelerating and reversing this trend won’t be easy.

4) Too many cooks in the kitchen. One of Europe’s problems in solving its crisis is bureaucracy. Between the Economic and Monetary Union (EMU), European Banking Authority (EBA), and EU finance ministers everyone has an opinion on how to fix things but nobody can execute. Layered on top of this melting pot, are individual countries within the eurozone, each with its own distinct set of financial regulators with their own viewpoints. It’s a conglomeration of confusion.

5) Poor enforcement track record. Financial regulators are prodigious at inventing new rules but much less proficient at enforcing them. In many ways, Europe’s crisis is just like the U.S.’ – a colossal failure by regulators to regulate. Rules are of no protection if they are selectively enforced or not enforced at all.

6) Over-concentration of financial power. The Oscar winning documentary film “Inside Job” was too angry of a film for me and badly missed at articulating the 4th grade antics of Wall Street’s elite. Nonetheless, it explained how U.S. financial services industry (NYSEArca: XLF) became too large too fast. What’s changed since then? More assets and power have been concentrated in fewer surviving firms, which has increased everyone’s risk should one of these institutions fail. The problem of “too big to fail” still hasn’t be solved domestically or internationally.

7) Squandering public funds. Instead of letting troubled financial institutions or governments fail, regulators and quasi-regulators have thrown (and continue to throw) trillions of dollars trying to save them. In the U.S. it was a $700 billion bailout and in Europe it’s already topped $1 trillion. These headline bailout figures, which are being funded largely by taxpayers, are probably much higher than reported. While financial bailouts in the name of saving humanity or even a country are excellent devices for delaying the inevitable reckoning day, they don’t completely stop its arrival. Furthermore, the financial liabilities associated with massive financial bailouts have already begun destabilizing the financial condition of world governments previously determined as “strong.”

8) Global flood into “safe-haven” investments. Regardless of whether you believe in gold as an investment or not, its substantial rise has been fueled, in part, by the failure of governments to prudently manage their finances. As a result, money is flowing out of stocks (NYSEArca: VT) and into assets deemed “safe” like U.S. Treasuries (NYSEArca: TLT), gold (NYSEArca: IAU), precious metals (NYSEArca: GLTR) and Swiss Francs (NYSEArca: FXF). As a side note, I grudgingly use the deceitful phrase “safe-haven” because it suggests a false sense of security. In reality, no single investment security or asset class is technically “safe,” no matter what persuasive marketers argue. Everything is subject to rises and falls at any given moment. Conclusion
ETFguide’s Profit Strategy ETF Newsletter continues to advocate a fiercely independent view of world events, financial markets and the proper allocation of money. Ultimately, building an investment strategy that can perform during any kind of market climate is a good start. 






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The Secret Peace: It's Getting Better All The Time! by Jesse Richards

By Mel Fabrikant

Dr. Adam Schulhof

Even with today’s roller-coaster economic news, it’s not difficult to see that most Americans are still well-off by the standards of history. The bigger news is what’s going on in the rest of the world. Vast swaths of our world have already reached a relative peace. Many developed countries—Australia, Canada, Japan, and European countries, for example—are doing better than the United States in categories such as healthcare and decreasing crime. The rest of the world—the developing world of Africa, Asia, and the Americas—is growing toward peace as well, through fits and starts, but at a remarkable pace. Most amazingly, China and India, which together hold half the world’s people, have lifted millions of their citizens out of the worst poverty.



Let’s step back and look at the big picture of what we have accomplished. Each of the following achievements was inconceivable to our ancestors 200 years ago. Most were unthinkable 100 years ago, and some, such as the fall of communism, would have seemed preposterous even 30 years ago.
1. We have near-eradicated some of the worst plagues in human history: smallpox, leprosy, polio. We now have vaccines, treatments, and cures for hundreds of other diseases and illnesses. Every day, child mortality rates get a little lower and the average life expectancy gets a little higher.

2. Slavery and child labor, though still dire issues, are illegal in every country and universally condemned. Child labor has plummeted worldwide in recent decades.

3. Having once been the system of government for 36 nations, communism completely collapsed in Europe and has declined globally as an influential political theory. North Korea and Cuba remain holdouts, but the more common brand of communism that remains, in China, Vietnam, and Laos, would be barely recognizable to Stalin or Mao because it is so liberalized.

4. Though far from perfect, the equality of women and men is established as the de facto standard in every arena in every developed country: business, society, education, the arts, government. While some parts of the world are far from these goals, barely a handful of countries do not at least pay lip service to gender equality. In some countries, women make up half of the parliament, half of the workforce, and over half of the college graduates.

5. Inter-state conflicts between major global powers remain incredibly unlikely, thanks to both nuclear détente and interconnected world trade.

6. We have seen the collapse of the Austro-Hungarian Empire, the Ottoman Empire, the colonial empires of Britain, France, Spain, Holland, and Belgium, the Napoleonic Empire, Hitler’s Reich, and the Soviet Union.The age of empires and colonialism has ended, and self-determination in forming independent countries is a right achieved, to varying degrees, by most people on Earth.
7. The majority of the world’s countries have some form of democracy, even if it is limited. The remaining true monarchs and dictators can be counted on two hands: Togo, North Korea, Burma, Sudan, Turkmenistan, Zimbabwe, Belarus, and Cuba, to name some. Even countries such as Iran and Saudi Arabia claim democratic trappings, even if these are so far laughable.
8. Basic education and literacy have spread faster than ever expected. The total world literacy rate rose from 63 percent in 1970 to 83 percent in 2005.

9. Technology has brought us all closer together, especially in the fields of transportation and communication. With these innovations, world trade has become increasingly interdependent and dynamic. With the Internet, communication and the arts are reaching heights of creativity and individual empowerment never before seen in history.
10. Not everyone has to be a farmer today. This might seem obvious, but remember that before the twentieth century, the vast majority of humanity labored in the fields. In America today, only three percent of our population is employed in agriculture. Thomas Jefferson envisioned the ideal American citizen as a “gentleman farmer,” but centuries of agricultural advancements allow us to specialize in a million other jobs that are less physically punishing and better-suited to our individuality.
11. The world has drastically reduced its poverty rate, especially in the last few decades, with India, China, and other Asian nations pulling themselves out of poverty at lightning speed. In 1820, less than five percent of the world’s population was in their own time period’s middle class. Today, 50 percent of the world is—even with a population seven times larger.

12. Finally, an accomplishment that we have taken a little more for granted in the last decade is the fact that we haven’t blown up the world in a nuclear holocaust. For a while during the Cold War, no one thought the human race would make it to the twenty-first century. While nuclear terrorism remains a threat, the chances of an all-out nuclear war are slim.
The 12 achievements above are some of the biggest triumphs of humanity’s recent past, but what we are accomplishing today may well dwarf them. The items above aren’t secrets, but that’s the problem: they’re so obvious we take them for granted. It’s easy to get caught up in daily minutiae and forget these big-picture accomplishments. But realizing the positive direction in which society is flowing places everything we do in a brighter context. To say the world is approaching peace is not to encourage us to rest on our laurels. Rather, my hope is that by seeing how much humanity has accomplished, we can be inspired to achieve even more. A global peace is almost upon us—we just need a final effort to reach out and grab it. By studying these under-the-radar trends, and why they are happening, we can discover how to help speed up the process. The areas of the world that have reached relative peace can learn how to spread it. By pointing out the positive interconnectedness of seemingly disparate world events, we can see the bigger picture of the world’s increasing unity, and help guide it along the path to peace.
Jesse Richards has always worked at the intersection of culture, design, writing, and technology. For over a decade, he has examined thousands of sources to research the world's positive trends. Jesse is now the Director of Product for IAC company Proust.com, a place for families to share and preserve their life stories. Prior to Proust, Jesse worked as a Product Manager with Meetup.com, a site that helps millions of people self-organize into local community groups. He is the author of The Secret Peace: Exposing the Positive Trend of World Events, and an experienced public speaker on topics such as critical thinking, democracy, peace, and technology. A member of Mensa and also a professional artist, Jesse is the organizer of the Central Park Sketching Meetup, one of the largest art Meetups in the world. He lives with his wife in Manhattan.
The Secret Peace: Exposing the Positive Trend of World Events is available on Amazon.com in both paperback and e-book formats.
Website: http://www.secretpeace.com
Follow Jesse on Twitter: @JesseKalim

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World Peace Day Event in Gorgas Park

Wednesday is the International Day of Peace and is being celebrated by police districts throughout the city. A total of 40 events city-wide are scheduled.

"Peace Day Philly's message of non-violence is one that every person can embrace because everyone deserves safe schools, a safe community and a safe city," Mayor Michael Nutter said in a release.

To celebrate the day, residents of the 5th district can attend a peace event in Gorgas Park from 4 to 6 p.m. An anti-bullying presentation, a bike safety presentation and child fingerprinting are part of the evening.

September 21 was unanimously adopted by the United Nations as Peace Day in 1981, the release continued, adding that it is internationally accepted as an invitation to all people and nations to cease hostilities for the day. The 2011 Peace Day theme is “Let Your Voice Be Heard.” 

Read More:  http://roxborough.patch.com/articles/world-peace-day-event-in-gorgas-park

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Books events | Thorpe Menn award, poetry event

Thorpe Menn finalists

Three finalists have been announced for the annual Thorpe Menn Literary Excellence Award.

They are Tasha Haas, author of “Certain Dawn, Inevitable Dawn”; Christie Hodgen, author of “Elegies for the Brokenhearted”; and Barbara Stuber, author of “Crossing the Tracks.”

The winner will be announced during the annual Menn luncheon, scheduled for noon Oct. 1 at the Kansas City Central Library, 14 W. 10th St.

Candice Millard, author of “The River of Doubt” and “Destiny of the Republic,” will serve as keynote speaker.

Tickets are $30, and the deadline to reserve seats is Friday. Call 816-728-1304.

‘Largest Poetry Event’

What’s called the “Largest Poetry Event in History” is Saturday.

Kansas City area participation begins at 1 p.m. at the John Brown statue at North 27th Street and Sewell Avenue in Kansas City, Kan.

The gathering is one of an estimated 600 such events in 95 countries, as claimed by a California organization, 100 Thousand Poets for Change. Fred Whitehead, local poet, historian and filmmaker, first heard of the event at the Albuquerque Cultural Conference last month.

“I didn’t want Kansas City to be left out of this,” Whitehead said.

The concept is “to seize and redirect the political and social dialogue of the day and turn the narrative of civilization toward peace and sustainability,” according to a news release from the California organization.

“I think it’s more of a celebration and gathering than anything else,” Whitehead said. “But I am a determined foe of provincialism, and I support breaking down our isolation.

“This is a modest way of doing that.”

Area poets are invited to bring folding chairs and read one or two selections of their work. Whitehead, who often has led tours of the 19th century abolitionist Quindaro townsite at Kansas City, Kan., thought the nearby John Brown statue an appropriate place for an international event.

“John Brown’s name is known around the world,” he said.

Those who want to participate are invited to call Whitehead at 913-342-6379.

For more information about the international event, go to www.100tpc.org.

Read more: http://www.kansascity.com/2011/09/17/3144987/books-events-thorpe-menn-award.html#ixzz1YHlyNRdY

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