Sugar, sugar

I’ve been monitoring with interest a court case going on in the good old US of A because it could have serious implications for the food we ingest. I am not a fan of genetically-modified (GM) foods due to the unknown long-term effects of gene-mixing, possible creation of super-viruses and antibiotic resistance, potential toxins, allergens and carcinogens. Basically, introducing changes into the DNA of plants and crops and producing transgenic products is an unnatural process IMHO. GM foods (so we’re told) enhance desired traits within crops and plants, such as increased resistance to herbicides, or they offer improved nutritional content. And with an exploding world population, GM crops are designed to be pest and disease-resistant; they can tolerate cold or harsh climates and droughts. So on the surface, GM foods make sense. But scratch beneath the surface and you start to worry.

The court case I’ve had my eye is a cat-fight between Monsanto and the Center for Food Safety, the Organic Seed Alliance, High Mowing Organic Seeds and the Sierra Club, amongst others. The coalition of plaintiffs were seeking a temporary ban on genetically-modified Roundup Ready sugar beets and sugar beet seeds developed by Monsanto. The cat-fight goes like this:

• the coalition argues that the US Department of Agriculture approved the glyphosate-resistant sugar beets (commercially known as “Roundup Ready) without properly determining socioeconomic and environmental impacts. The approval dates back to the Bush administration.
• the coalition is arguing the possibility of genetic contamination of organic and conventional crops such as Swiss chard and red table beets.
• they are asking for a temporary ban on the planting of Roundup Ready sugar beet seeds until the US federal government does an environmental and health impact study.
• and they are arguing that both farmers and consumers will be forced to grow or buy GM sugar beets because of limited choice.

So really the legal argument is that federal regulators wrongly approved the commercialization of GM sugar beets. The US Department of Agriculture deregulated genetically engineered RoundUp Ready sugar beets in 2004. And in September 2009, the federal district court for the Northern District of California ruled that the Bush administration had unlawfully approved the GM sugar beets. You can read the court order here. Naturally, Monsanto wasn’t taking this lying down and appealed.

Federal district Judge, Jeffrey White, has just denied the coalition group’s preliminary injunction but has left the door open for permanent relief when he says:

“The parties should not assume that the court’s decision to deny a preliminary injunction is indicative of its views on a permanent injunction pending the full environmental review that [Animal and Plant Health Inspection Service] is required to do“.

I think the denial of the injunction means that farmers can go ahead in April 2010 and plant sugar beets. The coalition group is seeking a permanent injunction and will be back in court to fight it out with Monsanto in July 2010. To gain perspective as to why this will be a huge cat fight – 1 million acres of Roundup Ready sugar beets have been planted in 10 US States and in two Canadian provinces. That’s a whole lot of sugar beets and they account for more than half of the United States’ sugar production. And of course contamination from GM sugar beet seeds would be devastating for farmers planting organic seeds, making their crops pretty much worthless.

This is an important case because Roundup Ready sugar beets are genetically-engineered to be resistant to Monsanto’s Roundup glyphosate-based herbicide and this results in the creation of Roundup-resistant “super weeds”. To overcome resistance, farmers often resort to nasty, nasty herbicides like 2,4-D, the active ingredient in Agent Orange. Apart from this horror scenario, the sugar produced from Roundup Ready sugar beet crops have greatly elevated levels of the herbicide glyphosphate, which may end up in the products we consume ranging from breakfast cereals to bread.

Americans: ask your doctor

Dear American reader. My sympathies for you as I update you on your Patriot Act. I had hoped to have better news given then-Senator Obama’s distaste for warrantless wiretapping. During his Prez campaign, Obama opined: no warrantless wiretapping if you elect me!

Americans could look forward to leaving the Bush-era behind, along with the snooping and prying into citizens’ phone and internet activities by BIG government for “national security reasons”.

But alas, no. Now that he’s Prez, Obama is sounding more to me like Bush every single day. Why?  Because he has just signed a 1-year extension to three key provisions of the Patriot Act that were due to expire (or “sunset”), namely:

• authorize court-approved roving wiretaps that permit surveillance on multiple phones (aka roving wiretaps provision).
• allow court-approved seizure of records and property in anti-terrorism operations (aka library seizures provision)
• permit surveillance against a so-called lone wolf, a non-U.S. citizen engaged in terrorism who may not be part of a recognized terrorist group (aka lone wolf provision).

These provisions give wide-ranging government powers to snoop on Americans’ private communications and even pry into what library books are being read. Neither the House of Representatives nor the Senate saw fit to include any protections that would prevent abuses against Americans’ Fourth Amendment rights (ie to be protected from unreasonable search and seizure).

I am speechless that the Patriot Act – the only provisions of which that should stand are the ones relating to suspected terrorist activities – has remained intact. There was no debate and I suspect that the Democrats were too chicken to fight it out with the Republicans.

But what was really alarming was how the Patriot Act extension was smuggled through the Medicare Physician Payment Reform Act H.R. 3961 and passed 315-97. Why the subterfuge? Why slip through existing extensions of the Patriot Act as amendments to H.R. 3961 rather than a stand-alone Bill? Guess Americans can ask their doctors to find out why controversial provisions of the Patriot Act were passed unchallenged!!

If you go to the Library of Congress legislative archive and search for what is called the “roll call vote”, you won’t find it for the Patriot Act vote.  You’ll find it in roll call #67 On Motion to Concur in Senate Amendments: H R 3961 Medicare Physician Payment Reform Act.

So folks, if you read somewhere that provisions of the Patriot Act were about to expire and if you knew how to search to find the roll call vote for it – well, you’d be stuffed because it was hidden in the roll call vote for H R 3961. Sneaky. And what I find very disturbing is – if you look at the roll call vote here – you will see that more Democrats than Republicans voted to extend the Patriot Act.

So it seems to me that Obama is continuing the battering of the US Constitution that Prez Bush diligently undertook during his term in office and is surely betraying the very words he spoke in 2005:

“This is legislation [The Patriot Act] that puts our own Justice Department above the law…When National Security Letters are issued, they allow federal agents to conduct any search on any American, no matter how extensive or wide-ranging, without ever going before a judge to prove that the search is necessary. They simply need sign-off from a local FBI official. That’s all.”

…And if someone wants to know why their own government has decided to go on a fishing expedition through every personal record or private document – through library books they’ve read and phone calls they’ve made – this legislation gives people no rights to appeal the need for such a search in a court of law.

No judge will hear their plea, no jury will hear their case. This is just plain wrong.”

Get the kid off the list

What the? The Transport Security Administration (TSA) in the US has clearly lost the plot. Instead of putting effort into sharing intelligence and stopping terrorists before they even get to the airport, they prefer to see an 8-year old cub scout as a potential terrorist.

No joke, this is an excellent example of the stupidity of the climate of fear we are now living in. The young chap in question, Mikey Hicks, shares a name (Michael Hicks) with someone on the TSA no-fly list. Apparently, when Mikey was a little baby, he was denied a seat on a plane to Florida because his name was on the “selectee list” so he was classified as suspicious. And the poor little chap was frisked by airport goons at the age of two. Apparently, the selectee list is not as bad as being on the no-fly list but it still triggers off a round of frisking and grilling for people because they have to go through security screening hoops.

Mikey and his parents were on their way to the Bahamas in the New Year when Mikey was once again hauled aside and frisked. His mother says:

“Up your arms, down your arms, up your crotch — someone is patting your 8-year-old down like he’s a criminal….A terrorist can blow his underwear up and they don’t catch him. But my 8-year-old can’t walk through security without being frisked.”

Mikey’s father is also named Michael Hicks but was only hauled off for questioning for the first time as they were heading off to the Bahamas.

Now, according to the TSA, no kids on are the no-fly or selectee lists. So how are they explaining constantly traumatising an 8-year old cub scout?? For goodness’ sake, the poor kid was born less than a month before 9/11, so logic and sense (what the TSA seems to be missing) would tell you that Mikey is not likely to be a terrorist. So how the hell does he get off THE LIST??

It reminds me of a list I’m on.  Five years ago, I was given a laptop at work to use on the train or when I work from home. But four years ago, I gave up the laptop (never seemed to work remotely) and told the IT dudes to take me off “the list”. But once a year, I get an email from the finance types asking me to declare how I’ve been using the laptop (for tax purposes). My response is always the same “I haven’t been on this list for four years.” This year, I had a hissy fit and emails flew everywhere – I’m hoping I’m off THE LIST.

Why is it that lists are seen as a way of containing, controlling, monitoring? The underwear bomber’s name (Umar Farouk Abdulmutallab) was one of more than 500,000 in a broad terror data base at the National Counterterrorism Centre. Despite being a suss person, neither US Intelligence nor airport security hauled him aside – he waltzed onto a plane. So clearly the list that contained his name was ineffectual.

BTW: notice how in the media Abdulmutallab is referred to as the “underwear bomber” or his exploits are called “The Christmas Day bombing” (albeit with the words “failed” or “attempt” following). But the media hypes up the illusion that there was a bombing when in fact there was not. This herds the populace into believing that they should fear “terrorists”, fear people with foreign (most likely Middle Eastern) names, or fear 8-year olds. And the result of this is what has emerged from a recent Pew Research poll – Americans have been been whipped into a frenzy with 58% believing the government has not gone far enough to protect against terrorist attacks compared to 27% who believe it has gone too far in restricting civil liberties (had I been surveyed, I would have been with the 27%).

This contrasts with an earlier 2009 poll where 40% said the government was not doing enough to protect against terrorists and 36% were more concerned about civil liberties.  Then the underwear bomber comes along (escapes through the clutches of US intelligence yet doesn’t actually bomb anything) and you get a whole heap of sheep willingly giving up constitutionally-guaranteed civil liberties.

What I don’t understand is why people don’t challenge the circus of “watch lists”, “selectee lists”, DNA databases and so on. Why not ask Governments to provide security through means other than lists and databases that haul 8-year old kids aside to be frisked.

I have a suspicion that the notion of “civil liberties” is not understood well. It’s not about your freedom to choose not to eat meat or drink coffee instead of tea. I suspect that people don’t think deeply enough about what civil liberties refer to, so are quite willing to allow the Nanny State to x-ray us at airports, frisk us, place our names on lists, monitor us.  This has me thinking – expect a long post soon!

I dream of GINA

Sorry about the kitsch title of this post – couldn’t think of anything better. I’m pleased to see a new US Federal law – the Genetic Information Non-Discrimination Act or GINA – signed by Dubya in 2008 and taking effect December 7 2009 (Public Law 110-233, HR 493, S 358). We cannot alter our DNA but we certainly don’t want it used against us in some way. GINA limits how much employers can learn about an employee’s genetic history. So, for example, employers will be prohibited from asking employees or job candidates to take genetic tests or to provide their family medical histories. A company cannot deny a promotion to CEO for a 50-year old man based on a family history of heart disease. You cannot be discriminated against because of a hereditary predisposition for depression, schizophrenia, diabetes or bipolar disorder for example. GINA also prohibits health insurers from grilling you about medical histories or using such information to make decisions about insurance coverage or premiums. GINA does not apply to life insurance, the military, independent contractors or companies with less than 15 employees. Every employer covered by Title VII of the Civil Rights Act of 1964 must display a GINA poster prominently in the workplace (Federal posters; State posters).

The law really means that your family medical history will be protected genetic information. An insurance company will be prohibited from denying health insurance because four members of your immediate family have a history of some particular disease. I see this legislation as a major step forward for privacy rights and anti-discrimination by providing basic legal protection.

You might think that your genetic history would not be used against you. Think again. The Burlington Northern and Santa Fe Railway Company was forced to cough up US$2.2 million because it conducted genetic tests on 36 workers without their knowledge. The employees were track maintenance workers, who maintained they had job-related carpel tunnel syndrome, and the company allegedly conducted secret genetic tests to establish a predisposition to carpel tunnel syndrome and reduce its medical and workers’ compensation costs. Read some of these case studies where people were fired from their jobs due to family medical history. And remember the 1997 sci-fi thriller Gattaca, where jobs were filled by candidates with certain genetic makeup?

There’s a handy overview of what GINA does and doesn’t cover in the New England Journal of Medicine. I think there might be some gray areas though.

• Congress carved out exceptions for the “water cooler” conversation, where a manager for example unintentionally overhears a conversation amongst employees concerning family medical history. There’s also an exception for the problem situation of an employer reading an obituary of an employee’s mother or father or if a magazine article profiles an employee living with a particular disease. But I can’t find anything in the Act that covers medical information obtained from personal web sites or social networking sites. Sometimes people create blogs or websites that chronicle their battle with ill-health – can an employer use this information against an employee? Is it public or private information?
• imagine an employee who takes regular absences from work and, following a “water cooler” conversation, it has become well-known that the employee’s father has depression. A manager has to discipline the employee over work absences and the employee turns around and says “you’re discriminating against me because you know about my family history of depression”. How is this situation to be handled? The carve out means that it’s not illegal for the manager to know of this family history (since it was gleaned via a water cooler conversation).

I do think though GINA will lead to more genetic testing. Employees now don’t have to fear being fired from their jobs because of some genetic marker. This is surely a beneficial side effect of GINA. But perhaps there are occasions when you’d want someone to be genetically tested: think of an airline pilot with a family history of chronic heart disease. You wouldn’t want him carking it whilst flying the plane.

2010: gazing into the tea leaves

So from my last post, you know that I’m giving myself ticks for my 2009 predictions. I have now gazed into the crystal ball and here’s what I think could happen in 2010.

Global Financial Crisis: I’ve said I’m no economist, so am happy to be corrected but I don’t think the GFC has finished with us yet. Let’s take the US as an example. With US $787 billion in Government stimulus packages and $700 billion in bank bail outs, I think the financial crisis will be of a different form in 2010. It will be a crisis in public finance. The US Government deficit seems to be spinning out of control. Total US debt is bulging and is now $12.1 trillion (and growing by an average of $3.81 billion per day).  In 2010, Congress will seek to rein it in or at least stabilize it.

Government debt is also known as public debt, national debt or sovereign debt and refers to the money or credit owed by any level of government eg Federal, state, local. It includes any money owed to foreign countries (referred to as individual investors). Public debt soared from $5.8 trillion to $7.6 trillion in 2009 and and is more than half the size of the US economy for the first time since 1956. And annual interest on the public debt will be around $800 billion by 2019.

What does this all mean? Apart from the US needing to go on a serious budget diet, it means that there has been a massive expansion in the scale of public finance in areas such as bank bailouts, mandatory expenditure on unemployment and related social needs, housing, funding the disastrous wars in Iraq and Afghanistan, infrastructure spending and so on. But some states have literally run out of money – California is a good example. And the money being spent is borrowed money. There’s a huge risk here and one that’s not talked about much – Governments are gambling on the stimulus spending creating economic growth and jobs, which then allows Governments to make debt payments and continue spending (hopefully without raising taxes).

The risk I think is that in 2010 a crisis in public finance will start to weigh heavily on all public expenditure and that will affect you and me. Let’s take Japan (the world’s second largest economy) as our example. Big business has been asking Japan’s new Prime Minister, Yukio Hatoyama, to slash social spending and rein in public debt, which is expected to soar above 200% of gross domestic product in 2010. In 2009, Japan scrapped controversial plans to reduce social security spending by 220 billion yen a year – basically, it would have meant putting a cap on social security spending which is higher when there is more unemployment and a large aging population, as in Japan’s case. Malaysia is also cutting its spending in 2010 by 4.4% to rein in its ballooning deficit. So I think we’re going to start to see a public finance crisis. Governments will say they will cut costs not services but cuts or reductions in growth of spending on education, health care and other programs will happen. Or we’ll see tax hikes. Take your pick.

So Federal governments will cut back and then State governments will cut back, leaving local governments screwed. This could mean that local councils will increase property taxes for example. Or you might find garbage/trash services cut back.  Or local area health services are given a haircut. Or it could mean laying off government or local council workers. You get the idea.

Globally, the public debt dilemma is very worrying. Just look at what’s been happening to Dubai – no longer the rich oasis it used to be and needing Abu Dhabi to help bail it out of $59 billion worth of debt and asking for a 6 months’ moratorium. The total global debt in 2010 is predicted to reach at least $49.5 trillion. Even Moody‘s is warning that 2010 will see sovereign debt spiralling and warns of social unrest. And you also get financial markets losing confidence in the ability of countries to cough up what they owe after borrowing vast amounts. From this scenario, it’s not a big leap to imagine financial markets steering clear of official debt instruments—such as treasury bonds—and this would deprive countries of fresh cash.

So my prediction is: 2010 is the year for a crisis of public finance and the year we see government spending pruned. The European Union will lead the way. Look at what’s happening with Greece with its crisis budget.

UPDATE: 16/1/10 I could be tracking well with this prediction already. Marc Faber (Swiss investment analyst) is saying the next crisis will be sovereign debt and he thinks it will particularly affect the “PIIGS”: Portugal, Ireland, Italy, Greece, and Spain. Watch this video of him talking about sovereign debt.

UPDATE: 8/1/10 seems the State is already screwing school districts – the state misses grant payments to all 871 Illinois school districts and leaves a $4.5 billion IOU for services from schools to homeless shelters.

UPDATE: 4/3/10 Federal Reserve Chairman, Ben Bernanke, warns that the United States could soon face a debt crisis like the one in Greece.

UPDATE: 10/3/2010 Financial Times opinion piece on how to handle the sovereign debt explosion.

Climate Change Fatigue: because some scientists behaved badly and emails suggesting that climate change data had been manipulated leaked on the Internet, 2010 will be a battleground for climate change. Public concern and belief in anthropogenic global warming is on the decline already.

A recent Pew Research Center poll (conducted in late 2009) showed that only 57% of Americans think there is solid scientific evidence to support the global warming thesis, compared with 71% in April, 2008. I know in my own area of Australia, a recent radio poll showed that two-thirds of people doubt climate change is caused by human activities.  This green fatigue will lead to confusion over what to believe and cynicism. There are mixed messages: we’re told that the planet is heating up yet we continue to see airplanes flying around, runways being built, coal being mined and so on. I think there will be mounting resistance to any form of “green taxes”.

But if the climate experts are right, in 2010 we’ll really start to see the planet heating up and wild weather patterns will increase.

China crashes or doesn’t. I’m hedging my bets on this as I’m not sure. I think China will continue to flex its muscles (as it did at Copenhagen) and might stop buying up American debt, which of course would plunge the US into crisis. Newsweek is predicting that the China stock and real-estate bubble will collapse, leading to a destabilizing bout of global deflation. I’m inclined to lean in this direction. Certainly, China seemed to navigate through the GFC storm easily, but there are a number of factors at play: property prices are forming a bubble; exports are weak (because the West, which is China’s major market, is curbing spending); the Chinese are dangerously overheating their economy by erecting cities (70 at last count) at a rapid rate; and they boast luxury stores and malls for which there is hardly any demand. So is there an illusion of progress? Is China more a paper tiger than a roaring dragon?

Jim Chanos (the short-seller who was the first to see that the accounting of Enron was dodgy) is saying that China will be “Dubai times 1000, or worse”. I think China is starting to look a lot like Japan in the late 1980s  – and we know how that turned out. So prediction is that China teeters.

Major food shortages. I’ve blogged many times about how I think the future will be one of water and food scarcity. I think we’ll really start to see things happening in 2010. A perfect storm is coming: there are continuing droughts; the world population is growing rapidly; there is a wheat fungus causing problems and there are crippling crop failures – when you put this all together, you get the frightening possibility that global food supplies will be in trouble. Let’s look at some examples, starting with Ug99. This is a wheat fungus (known as stem rust) that I’d never heard of until recently. But crop scientists fear this fungus could wipe out more than 80% of worldwide wheat crops. If the fungus spreads to the US (which is considered inevitable), US $10 billion worth of wheat would be wiped out. And the result would be a ” significant humanitarian crisis” according to Rick Ward, the coordinator of the Durable Rust Resistance in Wheat project at Cornell University in Ithaca, NY.

I think the lack of monsoons in India is also something to be concerned about. In 2009, India’s monsoon season was 29% below average from 1 June –11 August and caused drought in 278 of the country’s 626 districts, damaging crops of sugar cane, wheat, rice and oilseeds. India is an important producer of wheat (number 2 in the world) and it dominates the world’s rice harvest. What happens when there is no bumper wheat harvest in India? There is significant loss in yield, wheat quality is affected, prices go up and civil unrest occurs.

There are many more examples of global food supply concerns I could give you. Just read here and here to start. And make sure you read 2010 Food Crisis for Dummies and all the links in the article. It’s a comprehensive run-down of the crisis we’ll be facing and you will end up being as concerned as I am about global food supplies.

Obama.  IMHO 2009 was an unpromising year for Obama. And I think in 2010, his ratings will take a dive. Mind you, it’s already pretty low with an average 48-50% in the lead up to Christmas 2009 and it’s down 15 points since the start of 2009 (I think this is the worst third quarter decline in public approval ratings for any elected president since World War II). Heck, even Oprah’s ratings have taken a plunge since she openly supported Obama (known as the O2 effect).

Americans will start to blame Obama for worsening conditions in 2010 and Obama will no longer be able to blame Dubya. His approval ratings could sink to 40% or lower in 2010 as Americans (and the world) wonder what Obama actually stands for. His campaign and the massive movement that swept him into office was largely personality, not issues, based.  The Obama campaign raised such enormous hopes and in his first year of governing, the Prez has disappointed many. The bank and auto bailouts have been broadly unpopular during a time of significant unemployment. I don’t see him as decisive – look at how long his deliberations over Afghanistan have taken (a speech in March 2009 announced a new strategy but it was almost eight months later that he announced additional troops would be needed).

Americans have most likely felt betrayed by a Prez who has bailed out banks (close to $1 trillion and used to pay bonuses for senior executives) without demanding significant reforms; failed to close Guantanamo Bay; failed to withdraw US military forces from Iraq; failed to end the conflict in Afghanistan; stuffed up health care reform; and seems to have the same stance on Gaza as Dubya.

I think Americans will fret over the escalating national debt, continuing unemployment problems, Obama’s health-care reform and the decline of the US as the world’s only superpower (watch out for Brazil in 2010 – an economic powerhouse on the rise). And many will question the wisdom of expensive reform during a time of unprecedented economic distress. So prediction is – brand Obama takes a nose dive in 2010 as people realise he’s the consummate campaigner and a masterful orator but an inexperienced politician with an administration that is floundering. The actions sadly don’t match the rhetoric.

Really, I’m hoping I’m wrong and 2010 will be a rosy year but from all I’ve been reading, it’s a Nyet on that.

Did I stuff it up?

Just over a year ago, I walked the plank. Well, not quite. I offered up my predictions for 2009. The first time I’ve done that – so time to look back and see how many predictions I stuffed up. If I managed to get them all right, then I am going to embark on a new career as a psychic. Dress up with wild red hair in ribbons and gaze dreamily into a crystal ball. That should do it.

To refresh our collective memories, here were my predictions for 2009 with a look at how I tracked against them:

• Reinvent yourself as a Chief Financial Officer (or CFO) – due to the global financial crisis, I said that organisations would need a financial wizard to navigate them through the mess.  I may have this one right – the Best of 2009: Careers in CFO.com (possibly a biased publication!) declared 2009 as the Year of the CFO, with the role of strategic CFO being prominent. A quick look at seek.com.au and I found 95 jobs for CFOs or senior corporate accountants. So I’m giving myself a tick for this prediction.

• Formal recognition of global recession: I predicted that the IMF would formally admit the global economy was in recession. Well, that happened in April 2009 with the IMF’s April World Economic Outlook. I thought that despite a new Prez in the White House, Obama’s economic stimulus programme would not put a halt to rising unemployment during 2009 in the US or a deepening recession.  Although hiring is starting to pick up now and jobless figures are dropping, a record 20 million-plus people collected unemployment benefits in 2009 in the US and the unemployment rate hit 10%. In March 2009, Treasury Secretary Timothy Geithner, told the grim tale of a deepening US recession and indeed world recession. Falling US auto sales and increasing home foreclosures signalled a recession that wasn’t going to disappear quickly. Further, I muttered that I wouldn’t be surprised if some US states declared bankruptcy. Well, that happened in California. Arnie ran out of money and basically had a US $12bn deficit on his hands. He ended up giving IOUs to creditors and civil servants. Illinois is in the midst of a financial struggle that could mean tax increases for its citizens. And Business Week laid it all out, highlighting the US states in bad financial shape. Thankfully, hyperinflation didn’t happen. So…basically a tick for these predictions.

• Banks will screw us. What better example can I give than the Westpac (Australia) outrage and its “mortgages are banana smoothies” ill-judged metaphor. And Australian banks certainly tightened credit in 2009. Tick.

• I said that Governments would take increasing control of banks. Well, the Austrian Government had to take control of Bank Medici; Ireland became the first European Union country to take de facto control of all of its most important banks; Obama took over control of the bonus pool by capping executive pay at banks that were bailed out; and the Spanish Government took over the troubled savings bank, Caja de Ahorros de Castilla-La Mancha. Tick.

• Employers could get nasty. I predicted that wages could be cut and more demands made on staff to “do more with less”. This certainly happened – Hewlett-Packard imposed wide-ranging pay cuts including Executive council members who took a 15% haircut on their base pay; Japan slashed wages across the board in an effort to stem job losses; and the recession was putting pressure on some workers to do unpaid overtime so they could keep their jobs. And the global recession witnessed worsening employee morale. Tick.

• Trend towards a simpler life. Really, I think this is an ongoing trend and will continue into 2010. But with many people in the US, for example, out of work – people are learning to be thrifty (and enjoying it). Here’s the story of 37-year old woman leading a simpler life after being laid off; USA Today reported that Americans were paring back their lavish lifestyles because of the financial crisis; the DIY industry exploded in 2009 with people doing their own home improvements, learning how to cook at home or making crafts to sell. The global recession even renewed interest in home vegetable gardening.  Tick.

• Increase in civil unrest and rekindling of socialist ideals. I’m sure you all remember the angry protests against financial institutions in the UK; Greek farmers blocked roads and protested over falling agricultural prices; a million workers in France joined demonstrations to demand greater protection for jobs and wages; Icelandic demonstrators clashed with police in Reykjavik. There was unrest all over Europe; a wave of protests swept across Russia; folks in Connecticut weren’t going to take it anymore and descended on the luxurious homes of bank CEOs and US students at the University of California clashed with police whilst protesting against a hike in tuition fees the university says is needed to raise US$505 million. A Rasmussen poll during April 2009 pointed to a possible shift towards socialism in the US – 53% of American adults believe capitalism is better than socialism and 20% say they prefer socialism (I’m going to bet on the high probability that many young people, who don’t know what socialism is, were in that 20% and the 27% who weren’t sure which is better). So…tick.

• I thought that the cosmetics and entertainment industries would thrive in 2009 – because women won’t give up lipstick (lipstick sales during the Great Depression of the 1930s rose by 25%) and people will want to forget economic doom and gloom for a few hours whilst watching a film. Both are mood enhancers. 2009 saw an increase in Avon representatives (probably as people laid off thought of new career opportunities) and I think there was a trading down to cheaper brands. The so-called “lipstick index” (created by Leonard Lauder, chairman of Estee Lauder) says that when there’s a recession, women buy more lipstick and Forbes reported what women were still buying in 2009, with lipstick high on the list. What I didn’t predict but should have is the rise of natural and organic cosmetics, which increased by 13% to €1.7 billion in Europe in 2009. Although cosmetic companies have taken a bit of a battering, make-up and lipstick is still selling well. Similarly, moviegoers defied the global recession with attendance at US cinemas up 5% during 2009 and box-office revenue up 8.6% in the U.S. and Canada and certain to top $10 billion, an all-time record. Tick.

• Better leadership from our politicians and more cooperation between political parties. The US and China pledged to work more closely together on political, economic and environmental issues; representatives of political parties from Latin America and Asia-Pacific met to strengthen cooperation amid the global financial crisis; and UK Prime Minister, Gordon Brown, urged global cooperation at the World Economic Forum in Davos. So I guess a tick.

• Politically, Afghanistan will start to haunt Obama.  You just have to read the newspapers to know that Obama’s troubles are pretty desperate in Afghanistan and that quite possibly the country will be Obama’s Vietnam. And he’s going to have to spend 2010 explaining to Congress why he needs roughly $100 billion a year and at least 40,000 more troops (surge anyone?) in fighting a war that is increasingly unpopular. Tick.

• Rise in trade protectionism. Tick, this has happened despite the need for a coordinated economic approach to the financial crisis. Global use of trade remedies rose by 18.8% in the first quarter of 2009 – download a report here.

• Wild weather due to climate change and skirmishes over water and food. This is not science to say this but when I was a kid, I don’t remember so many days of 35 or 40 degrees.  We seem to be getting warmer weather during winter (eg in August) and very very hot days in summer followed by a day that is 15 degrees cooler. Read about Australia’s weird weather here. We’ve had severe storms and floods, Perth and Adelaide are on fire, and of course Sydney was hit with a red dust storm during September. Wild weather has wreaked havoc in Indonesia and climate scientists are predicting that the year ahead will see El Niño exacerbating the effects of climate change, bringing with it floods, droughts and the hottest years on record. We’ve also seen snowstorms and sub-zero temperatures in the UK, Europe and the US – which the skeptics use as evidence against global warming – but climate scientists are putting this down to La Niña (cooler than normal water temperatures in the Equatorial Pacific Ocean) and does not detract from the fact that we are seeing thinning ice and retreating glaciers. Climate experts are predicting that the real heat will set in after 2009 with a surge in temperatures. So I’ll give this a tick.  Crop failures saw 1500 farmers commit suicide in the Indian state of Chattisgarh; there were some reports of a catastrophic fall during 2009 in global food production; and I’ve already told you about skirmishes over water. Tick.

Clearly, I should reconsider my career path and become a psychic. I’ll dust off my crystal ball. But frankly, if you follow world events keenly and note the patterns, you don’t need to be Einstein to figure out what will happen. Next post – my predictions for 2010. Given my track record, I know you’ll be excited but try to get some sleep 🙂

Water conflicts

Did you read my post about water barons and how multinational companies or private individuals are spotting the opportunities to make a profit from an increasingly dwindling supply of fresh water?  I told you about how we will be slugged with substantially increased water rates, contaminated water supplies or poor service delivery when water scarcity hits us.

Australia of course is the driest continent on the planet and has one of the highest levels of water use per capita – so what happens when an area or region runs out of water? It’s what I’ve been saying – illegal water carriers swoop like vultures to the carcass. The Upper Hunter region in New South Wales has been in the grip of drought. Dams, tanks, bores and streams have been running dry from Cessnock to Murrurundi and thousands of families in this mainly rural area are being forced to buy water for drinking, washing, bathing and stock such as cattle.  Bores in the village of Wingen are dry for the first time in years and I saw a TV show the other night where the publican was being interviewed – he was saying they fear it when people who come to his pub go to the toilet (because it means litres of water being used to flush the toilet and more expense for him).

Water carters are charging between AU $100 and $160 for residential loads. Water loads vary from 9000 litres up to 28,000 litres but the average load seems to be about 12,000 litres. That sounds a lot but remember these people are farmers mainly, so they have stock and soaring temperatures to contend with. Beef farmers are apparently weaning calves four months early due to the lack of water.

And in the midst of this water crisis, you get the opportunists, the water privateers – who are illegally supplying water and causing damage to water mains and hydrants because they are not licensed and not accessing water supplies in the approved manner (which is via a credit card-like key).

I suspect this is our future – a world that will see increasing skirmishes over water and opportunists who will sell us water (a basic human right) at exorbitant costs.

Since the late 1980s, the Pacific Institute has been studying the connections between water resources, water systems and international security and conflict in an effort to track and categorise events related to water and conflict. Their water conflict chronology will freak you out but it’s a reality we must face.  You can view the chronology in a number of different ways, from a timeline to interactive Google Earth water conflict maps. You can filter the timeline to show when conflicts over water occurred by region, conflict type and date range. There’s also a list of conflicts over water starting in 3000 BC with extensive descriptive notes.

Australia is not the only country facing water scarcity. American readers should read this article on water issues challenging the US, including inter-state water battles. If you live in Oklahoma, might be time to consider getting out before corn and soybean yields decrease by 30 to 46% due to the Ogallala Aquifer under the Great Plains of the United States (including important parts of Oklahoma) experiencing a 20% decrease in recharge. And of course when you get crops failing around the world due to water scarcity…you get food scarcity…you get skirmishes and death.

India has already witnessed deaths and injuries over water shortages and Nigeria has recently seen thousands of people protesting over dwindling water supplies. Water covers three-quarters of the planet’s surface but most of this is undrinkable. Less than 3% of the world’s water is fresh and drinkable. Lloyd‘s are already talking of “water bankruptcy” being our future and pointing out that 55% of the world’s population will be dependent on food imports as a result of insufficient domestic water by 2030. That is just 20 years from now.

Dirty little secrets

I recently read an article that carried comments from Google’s CEO, Eric Schmidt, that frankly I thought were pretty dismissive towards those who are concerned about online privacy. He said: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place“. Mmmm…and this is from the man who whacked CNet over the head and banned them for a year after the site published information about him it had discovered on ahem, Google. (This is a bit like Facebook’s CEO, Mark Zuckerberg, being caught by Facebook’s new privacy settings. Candid shots of him were splashed over the Internet before he locked his profile to allowing access to “friends of friends”. My personal favourite shot is the teddy bear one).

BTW: be aware that the new privacy settings on Facebook mean that the default settings make most of your content accessible to “everyone” (ie the whole planet, the whole universe, EVERYONE).  All your personal information – your name, profile picture, where you live, gender, networks and friends, and the pages that you are a fan of – will be treated as publicly available information. You want that? If so, good luck.

You have to wonder why Zuckerberg suddenly locked down all his personal stuff. Gawker quipped: “Facebook’s own chief executive is illustrating that his privacy settings are so baffling that even he himself doesn’t grasp their full implications“. LOL.

But back to Schmidt. His comment is a bit like saying “you got dirty little secrets? then don’t use any Google applications, because search engines, including Google, retain your info”. So the really important question is: should you choose to use Google Docs or other Google apps that require you to use your Google sign-on, to what extent are you subject to the US Patriot Act? If you’re living in Australia, or Holland, or Canada or South Africa – are you subject to this Act? I started wondering about this when I read Schmidt’s comments and when Facebook tinkered around with its privacy settings yet again. So let’s find out.

Well, there is one glaring case study we can examine. Canada’s LakeHead University decided to replace its ageing infrastructure by adopting Google email and collaboration tools. Good idea you’d think because it saved the Uni hundreds of thousands of dollars. But it meant that emails and documents sent by email to the US from Canadian university staff became subject to the US Patriot Act, which basically gives the US Government the right to access or search virtually any data hosted by US companies (and this of course includes Google, a company based in Mountain View, California). And the U.S. Justice Department can subpoena search records. This is all at odds with Canada’s very strict privacy laws.

Section 215 of the Patriot Act allows the US FBI to issue a national security letter, which compels a third-party, such as ISPs, financial institutions and telecommunications firms, to disclose customer information. And Section 215 includes a “gag order”, meaning the third-party cannot reveal to any other party that it has been served with a national security letter. So if a Canadian company is a subsidiary of a US company and the US parent is whacked with the national security letter, any information held in subsidiary locations would have to be coughed up. No warrant is required. (This is my understanding from reading Section 215). This would apply I presume to firms based in Australia with a US parent. Think of it this way: information crossing the US border in a fiber-optic cable is treated the same way as papers carried in a briefcase. Canada has done a huge amount of work in sorting out the implications of trans-border data flows. Go here for FAQs on the Patriot Act.

And I think the US Patriot Act has tremendous impact on cloud security. So if cloud service providers have data centres in the US, the information is in danger of being exposed. Should you choose to store your personal data in the cloud (business records and sensitive corporate documents, emails etc) then I think you will have inadequate legal protection over your own data.

This prompted me to find out where the heck Google data centres are located and I came across the map below. Also read this Data Center Knowledge FAQ, which covers in detail Google’s servers and data centres.

Australia doesn’t appear to have a data centre or server (although there were rumblings earlier in 2009 that Google would build one in Oz. This seems to be on hold until the Federal Government sorts out the broadband network). So if there’s no local data centre or server, then where is the personal financial document you stored in Google Docs actually held? The Patriot Act makes all data stored on US shores liable to inspection – this would contravene the EU’s Data Protection Act I would think (ie cause a huge cat fight) although I’m presuming the EU-US Safe Harbor program also provides protection. I’m not so sure what protects Australians. I’m looking into it – leave a comment if you know more.

The point is we are increasingly seduced by Google. It’s a clever company with clever apps. Just think about your online privacy protection. I need to come up to speed with the Patriot Act. Several provisions of the Patriot Act are due to expire December 31 2009 unless renewed by Congress but Obama is seeking to extend its spying provisions.

Rusty Soviet-era threat?

In my efforts to bring you news of the myriad ways humanity may snuff it (apart from snuffing it from our own stupidity of course) – you can probably scratch December 21, 2012 out of your diary. This is not the day the world will come to a cataclysmic end. Mayan elder, Apolinario Chile Pixtun, says he’s sick and tired of hearing how the world will be engulfed in a giant hissy fit of volcanoes erupting and comets smacking into us when the Mayan Long Count calendar (which is marked by 394-year periods known as Baktuns) reaches the end of the 13th Baktun on December 21, 2012.  Shame really as I was looking forward to this being my final day at work 🙂

But seems there might be another danger lurking in store for us – the Russian Doomsday Machine. Yep, those Russkies forgot to turn off this machine when the Soviet Union crumbled around their ears. What is this machine I hear you ask? Well, when the former Soviet Union and the USA were in the icy grip of the Cold War, the Russians developed a computerised system that would automatically launch their entire nuclear arsenal in a counter-attack. The Russian armed forces might have been wiped out in some crippling Cold War cat-fight, the Kremlin could be kaput and there might be no military commanders around to bark orders but the “dead hand” (as the system is called or Mertvaya Ruka in Russian) would still operate. Its official name is Perimeter and it came online in 1985.

In an understatement, Robert M. Gates, Director of Central Intelligence during Dubya’s administration, said if this Russian doomsday device actually exists it would be “terribly uncivilized.” Ah yeah! Skeptics are doubting its existence, saying it’s the brainchild of sci-fi enthusiasts and those who still pine for the dark spy dramas of the Cold War period. But Wired had an interview with Valery Yarynich, a 72-year old former Soviet colonel, who claims he helped build the “dead hand”. Gulp.

So where is this machine? Are there any humans watching it to make sure it doesn’t spiral out of control? Is the computer system some ancient relic of the Cold War period likely to suffer a “prone to error” message (just after it launches a nuclear strike I might add)? How many nukes would it take to knock off humanity? Apparently, the Russkies won’t admit it exists and the Americans say nah, it’s all science fiction (well, they would say that wouldn’t they – because if it does exist and the Americans never knew of it, then this was one huge intelligence failure on the part of good old USA).  One former Soviet official, who spoke to American intelligence about Perimeter, died in mysterious circumstances (he fell down some stairs: was he pushed?). Of course, Prez Ronald Reagan and his carry-on about the Star Wars programme probably forced the Russians into developing a defensive system. And the Able-Archer exercise of 1983 wouldn’t have made the Soviets feel warm and fuzzy either.

Fortunately, there seem to be some inbuilt safety mechanisms. Perimeter must be switched on first by a high-ranking military commander during a crisis situation. Until then, it’s designed to lie dormant. Before launching a nuclear strike, the system has to check off four if/then propositions but after this, it’s war conducted by machines and welcome to nuclear holocaust. Yeah, well I’d be worried that some “if/then” proposition is now a missing feature of an ailing computer system or its early warning detection is kaput or gives off a false alert.

It is said that Perimeter lies dormant south of Moscow in deep underground bunkers. Given that Russia is prone to the odd civil war or two, let’s hope the system is constantly being upgraded or better yet, decommissioned. But Dr Bruce Blair, an expert on Russian nuclear weapons, says: “The US and Russia keep thousands of weapons on launch-ready alert…..I think there’s no reason to believe that this system would have been shut down”. Great. That makes me neeeervous. And what made me shiver back in 2007 was the fact that the Yanks “lost” some nuclear missiles. What’s to stop the Russians, after 25 years or so, losing track of Perimeter’s functionality or where its back-up system is located (if there is one)?

One of my fav Star Trek episodes (from the original series) is called “The Doomsday Machine“. Do you remember it? The starship Enterprise receives a distress call and finds several planets in a nearby galaxy destroyed. Intrepid Spock discovers that a giant planet-killing machine breaks planets into rubble and Captain Kirk believes it’s a doomsday machine, built by some long-kaput civilization. Kirk theorises that the machine was built as a deterrent and never meant to be activated but somehow it came online and chk-chk-boom.  The machine lives on, thousands of years later, fueling itself by consuming planets. Sound familiar?

Oh well: maybe thousands of years from now, once Perimeter has knocked us off, some bunch of alien dudes on a joy-ride around our galaxy will find Earth completely devoid of life. Only one thing will be standing – Perimeter – oh and maybe some cockroaches, which are said to be able to withstand a nuclear blast. Perhaps these creatures will inherit the Earth.

APF: WTF?

I’ve been keeping an eye on this – the American Police Force, although it now seems to be known as the American Private Police Force. Heard of it? Does the name sound to you like a bunch of secret squirrel mercenaries who will be hired to….well, who knows what?  It does to me. So off I went to do some snooping around, hoping to find it is an innocent private security firm.

Most references to the APF seem to point to Hardin, Montana and sinister claims that the APF could be the new Blackwater (private military company).  I don’t know too much about Hardin but it sounds like it’s a small, economically depressed town that is struggling to survive. And to survive, the town is looking at the lucrative prison industry.

The Two Rivers Detention Center was built in Hardin in 2007 but has been vacant since then. For some reason I’ve not worked out yet, contracts for housing inmates didn’t happen and the prison could not legally hold out-of-town prisoners. But then along came APF, a California-based company willing to fill up the jail.  And here’s where the mystery begins:

• no-one seems to know who is APF’s parent company;
• its website says it has “virtual offices” in Washington, near the White House, but no-one seems to know where;
• it is alleged that APF’s founder, Captain Michael Hilton, is a convicted criminal;
• the leasing of the facility appears to be costing APF around US$2.1 million and the source of funding is mysterious;
• there are hysterical suggestions that the APF has taken over the town of Hardin, turning it into a privately run police state, and that the force is comprised of foreign mercenaries who are training there;
• there are possible connections between APF, International SOS (a security firm) and Blackwater. This is interesting because International SOS is keeping track of the so-called swine flu pandemic and they are touted as a medical-assistance company (meaning should there ever be forced vaccinations for the swine flu, you know who will come knocking at your door). So is the APF a cover or front for another, larger company?
• apparently the APF dudes rolled into Hardin in sinister-looking black Mercedes SUVs, bearing the words “City of Hardin Police Department”.

You may know more about all this than me. If so, leave a comment. But sifting through the allegations, it seems that:

• the US Government is increasingly outsourcing its military and law enforcement capability. There are many private contractors slugging it out in Iraq and Afghanistan and there are questions about their actions and lack of discipline. Let’s face it, you hire mercenaries, you get no loyalty towards the hiring country or its wartime mission. How and when did the US supplant its traditional military with for-profit, private security firms?
• Blackwater troops were used during Hurricane Katrina.  Heavily-armed “troops” who were more like professional killers than disaster relief personnel caused chaos and alarm (I believe that Blackwater is now known as Xe due to some fancy re-branding exercise);
• private, civilian armies within the borders of the United States is unconstitutional. They are not accountable to the people through their elected Government. They are accountable only to the power of profit;
• mercenary forces operate beyond civilian and military law – what is to stop them from turning on the American people?
• is anyone bothered by this????

I will be looking into this further – is there a link between the FEMA camps, swine flu and APF for example? If you know anything, leave a comment. I’m finding it all pretty sinister.