Fare Thee Well Bank of Scotland!

The Bank of the Scotland is the latest victim to fall prey to the global credit crunch

It’s the credit crunch that just keeps on crunching. Latest victim – the Bank of Scotland, established in 1695, and the institution that invented banking as we know it in a Western sense.

Got an overdraft? You can thank the Bank of Scotland for that innovation and plenty more. The bank, known as HBOS after its merger with English bank Halifax, is the biggest home lender in the UK. And now, merged with Lloyds TSB, it will become even bigger.

But at what cost, and why? The cost to Scotland at this stage is unknown, though it’s inconceivable that no jobs will be lost. Some say with a Scottish Prime Minister and a Scottish Chancellor, pressure will be brought to bear on Lloyds to ensure there are not major cuts north of the Border.

The Pirates Are Back….but no Johnny Depp this time

Suspected Somali pirates captured by security forces

The popular perception of pirates held by most in the West is a mixture of the funny best exemplified by the movie franchise Pirates of the Caribbean and the downright silly, yet perfectly harmless characters in our literary history. These misconceptions can be forgiven since piracy in the First World has long since disappeared.

However, piracy is experiencing a renaissance in East Africa these days. The Gulf of Aden, the body of water where the Red Sea and the Indian Ocean meet, has become a haven for Somali pirates who prey on the international shipping that passes through the area. Since the collapse of a government in Somalia some 17 years ago, piracy has mostly gone unchecked in the area and has become more lucrative. Only yesterday, Somali pirates hijacked two ships off of the Somali coast, bringing their tally for 2008 to 30 hijacked ships in total.

A multinational naval force headquartered in Djibouti is patrolling the Gulf of Aden to ward off pirates, but the piracy has become very lucrative in recent years as Patrick Barkham explains:

Panic on Wall Street – Is this the end for America’s financial system?

Nervous traders on the trading floor in the midst of one of Wall Street’s most historic weeks

Things are looking grim down on Wall Street. Rather than trying to explain the chaos myself, I’ve chosen two articles that will do it better than I can. Suffice it to say that what is easily noticed is that the credo in American capitalism seems to be “privatize the profits, socialize the losses” as several companies have been rescued by the United States government and more rescues are bound to come.

From The World as we Know it is Going Under:

Things got worse after the markets closed. Washington Mutual, America’s fourth-largest bank, announced that it had started the process of putting itself up for sale. The Wall Street Journal reported that both Wells Fargo and the banking giant Citigroup were interested in taking over the battered American savings bank.

And then came the announcement that would dominate all of Thursday’s market activities: Morgan Stanley — the venerable Wall Street institution and one of the last two US investment banks left standing — had lost massive amounts and was fighting for survival. Media reports were saying that it was even in talks about a possible bail-out or merger. Rumor had it that possible suitors might include Wachovia or China’s Bank Citic.

China?

Africa: Land of Hope and Exploitation

The residents of the Magenge Mapya Charcoal Camp in Tanzania face an uncertain future — the trees they rely on to make charcoal are being cut down to plant oil-producing plants for biofuels

Roughly a century ago, the Ottoman Empire was considered “the sick man of Europe” because of its poor economy, backwardness, and misrule. Today, the continent of Africa and in particular the sub-Saharan part could rightfully be considered the sick man of the world. Disastrous economics, shoddy rule, violent wars, and the plague of HIV have left a once promising continent the failure of the world.

Decade after decade of foreign aid have not been able to lift Africa out of its mire. Even the so-called “benevolence” of wealthier states has left a situation best described in dependency theory as: “the way in which resources flow from a “periphery” of poor and underdeveloped states to a “core” of wealthy states, enriching the latter at the expense of the former”. This exploitation continues today as Africa is now being utilized for the sake of biofuel production at the expense of locals. Der Spiegel reports about this new exploitation in Green Gold Rush: Africa becoming a biofuel battleground. An excerpt:

Manhattan: The Art of the Flip

Manhattan’s Upper West Side

The 1980s was the era of junk bonds and Michael Milken. The 90s saw the dot.com bubble and made investors learn phrases like “e-commerce“. This decade has been the decade of real estate and in particular real estate speculation.

Like the previous two speculatory crazes, the real estate frenzy in the USA has ended and has fallen with a big thud. And like the previous bubbles some individuals have made out quite well in this latest one. New York Magazine takes a look at the 6 Most Impressive Flips in Manhattan. Here’s one of them:

15 Central Park West
How can a list like this not include this megaflip haven? To wit: This spring, a venture capitalist paid $13.8 million for a unit the seller bought just two months previous for $6.9 million, according to trade publication the Real Deal; a 29th-floor apartment — picked up for $7.3 million — went for nearly $14 million; and a cable mogul who bought his 36th-floor spread for $7.34 million is now on contract for somewhere near its $12.5 million price tag.

read the rest of the article here

Sports Fandom Is More Positive Than We Once Thought

Fans of the legendary English soccer team Liverpool FC display their support

Fans of professional sports are a derided bunch. Usually associated with belonging to the lowest common denominator intellectually and culturally, others have gone as far as to claim that they represent the most prevalent form of social conditioning present in our modern society.

An observer in first century Rome coined the phrase bread and circuses to describe how Romans of that era chose food and fun over freedom, thus giving up their civic duty in favour of decadence. To people like Noam Chomsky, little has changed. In Manufacturing Consent Chomsky explains the role of sports in social conditioning:

Take, say, sports — that’s another crucial example of the indoctrination system, in my view. For one thing because it — you know, it offers people something to pay attention to that’s of no importance. [audience laughs] That keeps them from worrying about — [applause] keeps them from worrying about things that matter to their lives that they might have some idea of doing something about. And in fact it’s striking to see the intelligence that’s used by ordinary people in [discussions of] sports [as opposed to political and social issues]. I mean, you listen to radio stations where people call in — they have the most exotic information [more laughter] and understanding about all kind of arcane issues. And the press undoubtedly does a lot with this.

You know, I remember in high school, already I was pretty old. I suddenly asked myself at one point, why do I care if my high school team wins the football game? [laughter] I mean, I don’t know anybody on the team, you know? [audience roars] I mean, they have nothing to do with me, I mean, why I am cheering for my team? It doesn’t mean any — it doesn’t make sense. But the point is, it does make sense: it’s a way of building up irrational attitudes of submission to authority, and group cohesion behind leadership elements — in fact, it’s training in irrational jingoism. That’s also a feature of competitive sports. I think if you look closely at these things, I think, typically, they do have functions, and that’s why energy is devoted to supporting them and creating a basis for them and advertisers are willing to pay for them and so on.

Is being a fan of professional sports all that bad? New research by economists and psychologists suggests that sports fandom actually has some benefits.

How to score a Sicilian villa for only one Euro

Salemi, Sicily – overlooking the Mediterranean

English homes are dropping in value like a rock and the Spanish real estate market has taken a dive. What about Italy? Tuscany is simply too, too expensive for the average or above average investor but there is a place further down south where you can get a villa on the Mediterranean for only one Euro.

Vittorio Sgarbi, the controversial mayor of the Sicilian town of Salemi is offering investors the chance to snap up villas in his town for a single Euro. But there is a catch as Richard Owen explains:

The catch is that you have just two years to restore the homes, which were abandoned after an earthquake 40 years ago.

Vittorio Sgarbi, the colourful Mayor of Salemi – just 72km from Palermo – hopes to attract buyers who had “both the aesthetic sensitivity and the economic resources to take part in this adventure”.But prospective property owners who think the offer is too good to refuse should bear in mind that thhe restorations will have to meet standards laid down by the council and respect the original character of the buildings.

Here is the contact info plus the terms and conditions:

— Salemi does not yet have a website but Vittorio Sgarbi does, at www.vittoriosgarbi.it – e-mails can be sent by clicking on contatti. Inquiries can also be made to the council on (0039) 0924 991 111

— Buyers must use local builders, architects, decorators and plumbers since the aim ofthescheme is to help the local economy

Why Gordon Gekko Got it Wrong: Michael Shermer and Evolutionary Economics

“Greed is Good” – Michael Douglas as the corporate vulture Gordon Gekko in Oliver Stone’s “Wall Street”

The scene is certainly an unforgettable one. Gordon Gekko, the notorious Wall Street corporate vulture, stands in front of a shareholder meeting playing Robin Hood to the unsuspecting people in attendance as he confronts the executives of the company and pulls off a hostile takeover by appealing to peoples’ baser instincts when explaining that “greed is good”.

Although Gekko was meant to represent the cutthroat corporate culture of America in the high-flying 80s, many took his philosophy to heart. The argument went that man’s selfishness is what has propelled human invention and evolution. But is that the case?

Michael Shermer, writer, historian, and founder of The Skeptics Society tells us that this argument is in fact completely wrong. Read the interview with Michael Shermer here. Here’s a sample:

Why, if capitalism is so great, did the Enron scandal occur? Some have suggested that it was a few bad apples in the corporation.

The “bad apples” theory doesn’t explain what really happened at Enron, and it doesn’t explain the nature of corporate evil. Jeff Skilling, the CEO of Enron, set up what he thought was a Darwinian marketing environment. Skilling was a fan of Richard Dawkins’s important book The Selfish Gene, which Skilling misread. He took it to mean that evolution is driven by cutthroat competition and self-centered egotism. He liked the notion of the “survival of the fittest.” Skilling set up a Peer Review Committee, which became known as “rank and yank.” Everybody was ranked on a scale of one to five, and 20 percent of all fives had to be fired. The reviews were posted on a company website with a picture of the employee, increasing the potential for personal humiliation. Good luck being able to go out and have some fun with your teammates. Teammates! These are people who may be taking my job. Once you set up an environment like that, people begin violating rules. Skilling’s evaluation system led to a lot of behind-the-scenes wheeling and back-door dealing between department heads and managers, swapping review evaluation points. In addition to his belief in an outdated and untenable doctrine of social Darwinism, Skilling was a high-risk taker — short on dopamine, we might conjecture. What causes corporate corruption is an environment of evil established by the founders, corporate executives, and managers — a corporate psychology — that creates situations that encourage our hearts of darkness to beat faster.

Is Japan Today the Future of the West?

Tokyo Night 8 – Frank Peter Lohoff (2007)

While the West struggles with its absence of meaningful culture and asks whether hipsters represent the end of western civilization, Japan may already be ahead of the curve in the realm of stagnation and decay.

Feelings of alienation and pessimism abound in Japan in spite of the “cool” cachet the Japanese have in the West thanks to the Harajuku Girls and films like Lost in Translation. The new youth see little hope for a better future and little meaning in the present. As hipsters of the west find irony to be an almost bankrupt currency after two decades of use, the Japanese have already graduated to retreating to virtual reality and suicide pacts.

Roland Kelts takes a deeper look at Japan and its cultural crisis in We Grew Up Too Comfortable to Take Risks:

The combined effect of this assault on the global consciousness is a vision of a contemporary Japan exploding with energy, inventiveness, color and light – qualities we generally ascribe to youthfulness: actually being young, or perpetually feeling that way. Many foreigners see in today’s Japan the face of the future.

But inside the country, specters of darker hues shadow the horizon: an aging population and a declining or stagnant birthrate; an expanding class of young, part-time workers (freeters) with checkered resumes and scant skills; and so-called NEETs (“Not in Employment, Education or Training”), with their CVs and skill sets suspended in mid-youth. Stories of pathological young shut-ins (hikikomori), who withdraw into their bedrooms and virtual worlds to avoid the real one, and internet suicide pacts, through which young loners meet one another online in order to kill themselves in the bricks-and-mortar world, have begun haunting headlines at home and abroad.

“There doesn’t seem to be much optimism,” says literary translator, author and University of Tokyo professor Motoyuki Shibata. Shibata’s current classes are made up of what he calls “the first generation in modern Japan to grow up without the sense that things would get better.”

“We’re the risk-averse generation,” a 20-year-old female student at the University of Tokyo explained to me. “We grew up too comfortable to take risks.”

Read the rest of the article at this link.

Are the Cities of Northern England Doomed?

A UK conservative think-tank suggests that cities in the North of England are declining without a chance of recovery

The conservative UK think-tank Policy Exchange has sent a shockwave through English politics by suggesting that England’s northern cities are declining without hope of recovery. Furthermore, they propose that residents of cities such as Liverpool and Sunderland move to the more prosperous Southeast of England and that government help this internal migration by building three million new homes to house these people.

The outrage is compounded by the fact that Policy Exchange is tied to UK Tory leader David Cameron and will no doubt have an affect on Tory support (what little that they do have) in these post-industrial cities.

As for these northern cities, Nigel Morris reports:

In its report, the think-tank said: “We need to accept above all that we cannot guarantee to regenerate every town and every city in Britain that has fallen behind. Just as we can’t buck the market, so we can’t buck economic geography either.”

Policy Exchange said many large coastal cities had lost their raison d’etre with the decline of shipping and raised the alarm over the future of Liverpool, Sunderland, Hull, Scunthorpe and Blackpool. It said it was unrealistic to expect the prosperous cities of Manchester, Leeds and Newcastle to regenerate less well-off neighbours such as Liverpool, Rochdale, Bradford and Sunderland. It said such places were not “doomed” and could not be abandoned, but people had to face up to the fact that they had “little prospect of offering their residents the standard of living to which they aspire”. The think-tank said all three million new homes earmarked for England by 2020 should be built in the South-east, making it easier for people in less well-off areas to move. It also called for massive building in Oxford and Cambridge, taking advantage of their high skills base and favourable location.

25 Internet Startups that didn’t make it

Big ideas with big money backing them couldn’t turn these sites into winners

It was only a little over a decade ago that we were told the internet would completely revolutionize how we would shop, read, interact, learn, invest, and smell. Maybe the order was a tall one and maybe the internet didn’t replace our traditional methods of doing all of these things, but it certainly has given us more options. The 1990s saw the proliferation of websites devoted to e-commerce of one sort or another as well as e-applications. These resulted in the dot.com boom that became a dot.com fizzle as everyone tried to tap into this new online market for their products and services. From Homer Simpson and his Compuglobalhypermeganet Systems to The Onion’s e-graters.com, everyone was taking a swipe at the hysteria.

Some sites have managed to survive and thrive, ebay.com and amazon.com being the two most notable.

The Business Pundit lists for us the top 25 Internet Startups that didn’t make it. All your favourites are there, including pets.com, etoys.com, and the spam-friendly lycos.com.

Speaking of which, whatever happened to these guys?

Haiti – Land of the Mud Pie Eaters

Mudcakes are inflation-proof

While the UK seems to be leading the way in the credit crunch, Haiti is blazing the trail for everyone else in regards to the inflationary crisis hitting food. Only a few months ago Haitians were rioting to protest (and loot) rising food staple costs. Indicative of the problems of Haiti’s poor is that the ultimate inflationary-proof food is now gaining prominence there: the mud pie.

Rory Carroll takes a look at the Mudcake industry in Port-au-Prince:

At first sight the business resembles a thriving pottery. In a dusty courtyard women mould clay and water into hundreds of little platters and lay them out to harden under the Caribbean sun.

The craftsmanship is rough and the finished products are uneven. But customers do not object. This is Cité Soleil, Haiti’s most notorious slum, and these platters are not to hold food. They are food.

Brittle and gritty – and as revolting as they sound – these are “mud cakes”. For years they have been consumed by impoverished pregnant women seeking calcium, a risky and medically unproven supplement, but now the cakes have become a staple for entire families.

It is not for the taste and nutrition – smidgins of salt and margarine do not disguise what is essentially dirt, and the Guardian can testify that the aftertaste lingers – but because they are the cheapest and increasingly only way to fill bellies.

“It stops the hunger,” said Marie-Carmelle Baptiste, 35, a producer, eyeing up her stock laid out in rows. She did not embroider their appeal. “You eat them when you have to.”