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Gene Ellis

Euro crisis based on 'design flaws' in monetary union, conference told - 0 views

  • Euro crisis based on ‘design flaws’ in monetary union, conference told
  • The European Central Bank’s current status, where it does not act as a ‘lender of last resort’ in a similar method to other central banks, was particularly criticised.
  • He said the current version of the treaty establishing the ESM, the new permanent bailout fund for the eurozone, would also not function as such a lender – and said it was “incapable of ending the crisis”.
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  • “What I am proposing is a guaranteed yet conditional [lender of last resort] which can reconcile moral hazard concerns with the need to protect sovereign borrowers from the kind of solvency issues we have witnessed since the onset of the economic crisis,” he said
  • McDonnell also called for a full banking union within the eurozone, saying a deposit insurance corporation should be established to fill this gap.
Gene Ellis

IBM to Announce More Powerful Watson via the Internet - NYTimes.com - 0 views

  • On Tuesday, a company appearing at the Amazon conference said it had run in 18 hours a project on Amazon’s cloud of computer servers that would have taken 264 years on a single server. The project, related to finding better materials for solar panels, cost $33,000, compared with an estimated $68 million to build and run a similar computer just a few years ago.
  • “It’s now $90 an hour to rent 10,000 computers,” the equivalent of a giant machine that would cost $4.4 million, said Jason Stowe, the chief executive of Cycle Computing, the company that did the Amazon supercomputing exercise, and whose clients include The Hartford, Novartis, and Johnson & Johnson. “Soon smart people will be renting a conference room to do some supercomputing.”
  • This year, Gartner calculated that A.W.S. had five times the computing power of 14 other cloud computing companies, including IBM, combined.
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  • This year, Google and a corporation associated with NASA acquired for study an experimental computer that appears to make use of quantum properties to deliver results sometimes 3,600 times faster than traditional supercomputers. The maker of the quantum computer, D-Wave Systems of Burnaby, British Columbia, counts Mr. Bezos as an investor.
Gene Ellis

European Union Leaders Agree to Slimmer Budget - NYTimes.com - 0 views

  • Galileo, a grossly overbudget and still unfinished satellite navigation project that aims to free Europe from its dependence on the United States’ global positioning system, escaped the cuts and is to receive 6.3 billion euros from 2014 to 2020.
  • But he cheered the preservation of heavy spending on farm subsidies, of which France is the biggest beneficiary.
  • And about 1 billion euros in cuts came from the part of the budget used to employ 55,000 people, including 6,000 translators,
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  • he devoted much of a postsummit news conference to boasting about his steadfast defense of British interests, particularly a multibillion-dollar rebate that Britain receives each year on its payments.
  • In the Baltic nations, for example, farmers are furious that a system of cash payments to support agriculture is skewed in favor of farmers from richer countries like France and the Netherlands. Latvian farmers say they get less than 40 percent of the European Union’s average payment level for each acre of land. Dairy farmers say they fare even worse, getting just 20 percent of what their Dutch counterparts receive.
Gene Ellis

Op-ed: Greece's Exit May Become the Euro's Envy - 0 views

  • The immediate consequences of Greece leaving or being forced out of the euro area would certainly be devastating. Capital flight would intensify, fuelling depreciation and inflation. All existing contracts would need to be redenominated and renegotiated, creating financial chaos. Perhaps most politically devastating, fiscal austerity might actually need to intensify, since Greece still runs a primary deficit, which it would have to correct if EU and International Monetary Fund financing vanished.
  • But this process would also produce a substantially depreciated exchange rate (50 drachmas to the euro, anyone?) And that would set in motion a process of adjustment that would soon reorient the economy and put it on a path of sustainable growth. In fact, Greek growth would probably surge, possibly for a prolonged period, if it adopted sensible policies to rapidly restore and sustain macroeconomic stability.
  • Just look at what happened to the countries that defaulted and devalued during the financial crises of the 1990s. They all initially suffered severe contractions. But the recessions lasted only one or two years. Then came the rebound. South Korea posted nine years of growth averaging nearly 6 percent. Indonesia, which experienced a wave of defaults that toppled nearly every bank in the entire system, registered growth above 5 percent for a similar period; Argentina close to 8 percent; and Russia above 7 percent. The historical record shows clearly that there is life after financial crises.
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  • Today, Germany grudgingly does the minimum needed to keep the euro area intact. If exit to emulate Greece becomes an attractive proposition, Germany will be put on the spot—and the magnanimity it shows in place of its current miserliness will be the ultimate test of how much it values the euro area.
  • The answer might prove surprising. The German public might suddenly realize that the euro area confers on Germany not one but two “exorbitant privileges”: low interest rates as the haven for European capital and a competitive exchange rate by being hitched to weaker partners. In that case, Germany would have to offer its partners a much more attractive deal to keep them in the euro area.
Gene Ellis

Talking Troubled Turkey - NYTimes.com - 0 views

  • Talking Troubled Turkey
  • probably because most countries placed restrictions on cross-border capital flows, so that international borrowing and lending were limited.
  • a bigger version of the same story unfolded in Asia: Huge money inflows followed by a sudden stop and economic implosion.
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  • And the same forces that sent money sloshing into Turkey also make the world economy as a whole highly vulnerable.
  • If this is a good description of our situation, and I believe it is, we now have a world economy destined to seesaw between bubbles and depression
Gene Ellis

How Putin Forged a Pipeline Deal That Derailed - NYTimes.com - 0 views

  • How Putin Forged a Pipeline Deal That Derailed
  • The pipeline, known as South Stream, was Mr. Putin’s most important European project, a tool of economic and geopolitical power critical to twin goals: keeping Europe hooked on Russian gas, and further entrenching Russian influence in fragile former Soviet satellite states as part of a broader effort to undermine European unity.
  • The bill that Parliament took up on April 4 was arcane. But it swept aside a host of European regulations — rules that Mr. Putin did not want to abide by — for a pipeline that would deliver gas throughout southern Europe. Continue reading the main story Related Coverage In Diplomatic Defeat, Putin Diverts Pipeline to TurkeyDEC. 1, 2014
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  • In France, the leader of the far-right National Front, Marine Le Pen, recently acknowledged that her party had received a loan for 9 million euros, or about $11 million, from a Kremlin-linked bank.
  • Faced with punishing sanctions, a petro-economy pushed to the brink by plunging oil prices and the wildly gyrating value of the ruble, Mr. Putin this month halted the project.
  • Geological surveys suggested that Bulgaria could be sitting atop an underground ocean of natural gas, enough to be self-sufficient for years, enough to eclipse the advantages of South Stream.
  • On April 4, 2014, soon after Mr. Putin annexed Crimea, Bulgaria’s Parliament gave initial passage to a bill that effectively exempted South Stream from a number of European Union regulations, most important, the one that would have forced Gazprom to allow non-Russian gas to flow through the pipeline.
  • “If I hear one more word about competition, I’m going to freeze your you-know-whats off,” Mr. Putin reportedly shouted.
  • The anti-fracking movement became so broad that in January 2012, Parliament banned not only the extraction of shale gas, but even exploration that would quantify the country’s reserves.
  • When the Bulgarian government refused, the European Union cut off tens of millions of euros in regional development funds.
  • In desperate need of the European funds, the prime minister announced the next day that South Stream would be halted until it had full European Union approval.
  • While “he overreached, and he underestimated the response” to his intervention in Ukraine, said Mr. Gray, the former American diplomat, the Russian leader has been “quite effective” in countries like Bulgaria.“He won a great deal by getting Nabucco stopped,” Mr. Gray said. “Ultimately, his goal is to keep as much control over the former parts of the Soviet empire as possible.”
Gene Ellis

Why Do Americans Stink at Math? - NYTimes.com - 0 views

  • Why Do Americans Stink at Math?
  • The Americans might have invented the world’s best methods for teaching math to children, but it was difficult to find anyone actually using them.
  • In fact, efforts to introduce a better way of teaching math stretch back to the 1800s. The story is the same every time: a big, excited push, followed by mass confusion and then a return to conventional practices.
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  • Carefully taught, the assignments can help make math more concrete. Students don’t just memorize their times tables and addition facts but also understand how arithmetic works and how to apply it to real-life situations. But in practice, most teachers are unprepared and children are baffled, leaving parents furious.
  • On national tests, nearly two-thirds of fourth graders and eighth graders are not proficient in math. More than half of fourth graders taking the 2013 National Assessment of Educational Progress could not accurately read the temperature on a neatly drawn thermometer.
  • On the same multiple-choice test, three-quarters of fourth graders could not translate a simple word problem about a girl who sold 15 cups of lemonade on Saturday and twice as many on Sunday into the expression “15 + (2×15).” Even in Massachusetts, one of the country’s highest-performing states, math students are more than two years behind their counterparts in Shanghai.
  • A 2012 study comparing 16-to-65-year-olds in 20 countries found that Americans rank in the bottom five in numeracy.
  • On a scale of 1 to 5, 29 percent of them scored at Level 1 or below, meaning they could do basic arithmetic but not computations requiring two or more steps.
  • One study that examined medical prescriptions gone awry found that 17 percent of errors were caused by math mistakes on the part of doctors or pharmacists.
  • “I’m just not a math person,” Lampert says her education students would say with an apologetic shrug.
  • In the 1970s and the 1980s, cognitive scientists studied a population known as the unschooled, people with little or no formal education.
  • For instance, many of the workers charged with loading quarts and gallons of milk into crates had no more than a sixth-grade education. But they were able to do math, in order to assemble their loads efficiently, that was “equivalent to shifting between different base systems of numbers.”
  • Studies of children in Brazil, who helped support their families by roaming the streets selling roasted peanuts and coconuts, showed that the children routinely solved complex problems in their heads to calculate a bill or make change.
  • The cognitive-science research suggested a startling cause of Americans’ innumeracy: school.
  • Only when the company held customer focus groups did it become clear why. The Third Pounder presented the American public with a test in fractions. And we failed. Misunderstanding the value of one-third, customers believed they were being overcharged. Why, they asked the researchers, should they pay the same amount for a third of a pound of meat as they did for a quarter-pound of meat at McDonald’s. The “4” in “¼,” larger than the “3” in “⅓,” led them astray.
  • In the process, she gave them an opportunity to realize, on their own, why their answers were wrong.
  • At most education schools, the professors with the research budgets and deanships have little interest in the science of teaching
  • The answer-getting strategies may serve them well for a class period of practice problems, but after a week, they forget. And students often can’t figure out how to apply the strategy for a particular problem to new problems.
  • Some of the failure could be explained by active resistance.
  • A year after he got to Chicago, he went to a one-day conference of teachers and mathematicians and was perplexed by the fact that the gathering occurred only twice a year.
  • More distressing to Takahashi was that American teachers had almost no opportunities to watch one another teach.
  • In Japan, teachers had always depended on jugyokenkyu, which translates literally as “lesson study,” a set of practices that Japanese teachers use to hone their craft. A teacher first plans lessons, then teaches in front of an audience of students and other teachers along with at least one university observer. Then the observers talk with the teacher about what has just taken place. Each public lesson poses a hypothesis, a new idea about how to help children learn.
  • The research showed that Japanese students initiated the method for solving a problem in 40 percent of the lessons; Americans initiated 9 percent of the time.
  • Similarly, 96 percent of American students’ work fell into the category of “practice,” while Japanese students spent only 41 percent of their time practicing.
  • Finland, meanwhile, made the shift by carving out time for teachers to spend learning. There, as in Japan, teachers teach for 600 or fewer hours each school year, leaving them ample time to prepare, revise and learn. By contrast, American teachers spend nearly 1,100 hours with little feedback.
  • “Sit on a stone for three years to accomplish anything.”
  • In one experiment in which more than 200 American teachers took part in lesson study, student achievement rose, as did teachers’ math knowledge — two rare accomplishments.
  • Examining nearly 3,000 teachers in six school districts, the Bill & Melinda Gates Foundation recently found that nearly two-thirds scored less than “proficient” in the areas of “intellectual challenge” and “classroom discourse.”
Gene Ellis

Ukraine crisis: Russian retaliation could hit Western mulitinationals - 0 views

shared by Gene Ellis on 05 Feb 15 - No Cached
  • "There no doubt would be Russian retaliation," said Justin Logan, director of foreign policy studies at the Cato Institute. "Companies with money tied up in Russia would have a tough time getting it back out."
  • The White House said Friday that President Barack Obama and the leaders of Germany, the United Kingdom, France and Italy agreed after a conference call that they're ready to inflict targeted sanctions against Russia if Moscow es
  • The lion's share of foreign money in Russia is from major energy sector players like Shell, Exxon, and BP, said Fadel Gheit, senior energy analyst at Oppenheimer
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  • Shell is working with Gazprom on natural gas extraction in Russia; Exxon has a multibillion dollar exploration partnership with Rosneft, a major oil producer controlled by the Russian government, and BP owns nearly 20 percent of Rosneft.
  • "Shell and Exxon have physical assets in Russia," said Gheit. "But pound-for-pound, BP has the biggest exposure in Russia." Although BP may have the most to lose from an economic tug-of-war between Moscow and the West, tough lessons that BP learned in Russia—through a defunct partnership with Rosneft called TNK-BP—also make BP best equipped for any future fallout, said Nicholas Spiro, managing director of Spiro Sovereign Strategy.
  • Spiro said that several German firms have also steeled themselves for possible fallout from friction between the Russia and the West. "German companies are huge here," said Spiro, naming BASF, energy firm RWE, and Siemens as companies with operations in Russia. BASF is working to finalize a deal with Gazprom that would give it a stake in Siberian oil fields; RWE has reached a preliminary deal to sell its natural gas subsidiary to Russian billionaires Mikhail Fridman and German Khan, and Siemens has a partnership with state-run railroad monopoly Russian Railways. Late last month, Siemens CEO Joe Kaeser made a trip to Moscow to meet with Russian President Vladimir Putin at his residence and voice support for a "trusting relationship" with Russian companies.
  • We know that if the West's resolve starts to crumble, it will almost certainly start in Germany,
  • "That's the canary in the coal mine."
  • "It starts with Germany and works its way down," said Hogan. "They have the most trade back-and-forth, and Germany gets the highest percentage of its energy from Russia."
  • Alcoa owns aluminum fabrication facilities in Russia, and Boeing has a design center in Moscow, as well as a joint venture with VSMPO-Avisma, the world's largest titanium producer.
  • Members of the Russian parliament have also proposed charging international payments companies like Visa and Mastercard with pre-emptive "security fees," with the stated aim of preparing for future financial disruptions.
Gene Ellis

UAE's Mubadala, Guinea sign $5 billion bauxite, alumina deal | Reuters - 0 views

  • The agreement includes $1 billion for extraction and exports of bauxite to the UAE as well as a $4 billion aluminium refinery and a port, Mohamed Lamine Fofana, Guinea's minister for mines and geology told Reuters at a Guinea investors' conference in Abu Dhabi.The investment forms part of the UAE's expansion plans for its Emirates Global Aluminium business, set to become the world's fifth largest aluminium company by output next year.Emirates Global Aluminium was created from the merger of DUBAL and Emirates Aluminium (EMAL). The merged group has two aluminium plants in the UAE, one in Dubai and a second at Taweelah near Abu Dhabi.
  • In May 2013, Mubadala and DUBAL said they would jointly take over a Guinea Alumina Corp project in Guinea, acquiring 66.6 percent from BHP Billiton (BHP.AX) and Global Alumina.
Gene Ellis

The Economist explains: Why airlines make such meagre profits | The Economist - 0 views

  • Why airlines make such meagre profits
  • In those six decades passenger kilometres (the number of flyers multiplied by the distance they travel) have gone from almost zero to more than 5 trillion a year. But though the industry has done much to connect the world, it has done little to line the pockets of the airlines themselves. Despite incredible growth, airlines have not come close to returning the cost of capital, with profit margins of less than 1% on average over that period. In 2012 they made profits of only $4 for every passenger carried. Why has a booming business failed to prosper?
  • Airlines were state-owned beasts in receipt of juicy handouts from state coffers. These “flag carriers” were regarded as important strategic businesses with monopoly powers that conferred national pride and international prestige. But they rapidly turned into bloated nationalised industries that regarded profit as a dirty word.
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  • Air travel was governed by inter-governmental deals that dictated which airlines could fly where, how many seats they could offer and, in many cases, what fares they could charge. The result was inefficiency and losses.
  • Low-cost carriers, such as SouthWest and Ryanair, introduced cut-throat rivalry on short-haul routes. Former flag-carriers struggled with the legacy of older fleets, large networks, uppity unionised workforces and vast pension liabilities. Low-cost carriers devastated their model of feeding short-haul passengers onto more lucrative long-haul services.
  • As well as stiff competition from their rivals, airlines face the problem that there is little competition in the industries that supply them. Two firms—Airbus and Boeing—provide the majority of the planes, and airports and air-traffic control are monopolies
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