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7/29/15

US Banking Industry: 'Too Big to Fail' Is Still a Problem. Here's How D.C. Wants to End It. - by Eric Garcia

The scariest thing about addressing "too-big-to-fail" banks is that there's no dress rehearsal. For all the plans, simulations, and preparations, the only way to know that the problem of banks being excessively interconnected in the wider economy has been solved is when one of these banks fails—but doesn't take the rest of the economy with it. Until that happens, elected officials and regulators are left to look back at the 2008 debacle and argue about whether they've put the pieces in place to keep it from happening again.

But in the midst of that argument, this much is clear: These banks are as big, or bigger, than they ever have been.

"They have a potential to have a catastrophic effect," says Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corporation. "They are larger than they were at the last crisis."

That does not mean that there haven't been attempts to mitigate the problem of banks being so large that they require a bailout. In the five years since Congress passed the Dodd-Frank Wall Street reform law, regulators have implemented a suite of measures aimed at ensuring that the nation's largest banks are sound and that, should they wobble, the economy won't go with them. The question of how to handle Wall Street, and what to do about Dodd-Frank, quickly is becoming a prime point of contention early in the 2016 presidential campaign.

To put it mildly, there's no consensus on whether Dodd-Frank has adequately addressed the too-big-to-fail question, or even if regulation is headed in the right direction.

Read more: Too Big to Fail' Is Still a Problem. Here's How D.C. Wants to End It. - NationalJournal.com

Turkish attacks on Kurds muddle Obama's Islamic State fight - by Josh Lederman

President Barack Obama's stepped-up partnership with Turkey in fighting the Islamic State may come at the cost of alienating another key group he's counting on for help in the same conflict: the Kurds.

"Knowingly or not, the U.S. is going to end up having to choose between the Turks and the Kurds," said Blaise Misztal, national security director at the Washington-based Bipartisan Policy Center.

While defending Turkey publicly, the U.S. has been urging Turkey to be "judicious" in its retaliation against the PKK, senior U.S. officials said. But Turkey's air campaign shows few signs of letting up.

Turkish jets hit Kurdish rebel targets in northern Iraq overnight and the government said strikes would continue until the rebels lay down their arms. White House spokesman Eric Schultz called Wednesday for "a return to the peaceful solution process," but Turkey's prime minister shot down that prospect until the PKK withdraws its armed fighters from Turkey.
 
Reqad more: Turkish attacks on Kurds muddle Obama's Islamic State fight

EU - A Euro Visionary at the IMF - by Leonid Bershidsky

Maurice Obstfeld, who's just been appointed chief economist for the International Monetary Fund, has followed the common European currency project for decades -- since it was a relatively loose association -- and warned early on about the problems the euro faces today.

 Perhaps if European politicians listen to him now, they will argue less about how to make the currency union work
.
Obstfeld, a macroeconomist who has co-authored textbooks with both Kenneth Rogoff and Paul Krugman -- economists on opposite sides of a bitter debate over austerity, government debt and economic growth -- is clearly capable of finding a middle ground. In that sense alone, he's a wise choice for the IMF job. His policy recommendations for Europe, however, have been clear and consistent: If the monetary union is to work, the euro zone needs more integration.

"Europe's Gamble" is what Obstfeld called the union in 1997, not long before the introduction of the euro, in a 300-page paper. This includes a highly readable history of the union, beginning with the European Coal and Steel Community that was formed in 1951 to bind Germany closer to the countries it had invaded, notably France. Obstfeld provides plenty of juicy, long-forgotten tidbits about countries scrambling to meet the common currency criteria: a fiscal deficit as close as possible to 3 percent of gross domestic product, inflation close to that of the member nations with the slowest-rising prices, a debt-to-GDP ratio of 60 percent (or at least strong evidence that it was headed that way).

Profligate Germany, for example, tried and failed to revalue its central bank's gold reserves to book the difference as revenue for its budget and cut the deficit -- even as it tried to keep out shakier Italy, Spain and Portugal for fear they would make the new currency much "softer" than the Deutsche mark.

The paper also contains paragraphs that now read as striking predictions:

Because monetary policy will be geared toward price stabilit
Read more: A Euro Visionary at the IMF - Bloomberg View

7/28/15

Failed US Middle East Policies Bearing Fruit - 2,000 migrants tried to enter Eurotunnel overnight

Security crackdowns in the port of Calais have prompted more migrants to attempt the crossing underground through the Eurotunnel. The massive waves of migrants trying to get through has worried the British government.

In a desperate bid to reach England from the French port of Calais, around 2,000 migrants tried to enter the Eurotunnel overnight, according to a statement from a company spokesman on Tuesday. "Between midnight and 6:00 am," the spokesman said, the waves of migrants, many living in despair at a better future after months of living in tents at the French port, attempted the sometimes fatal bid to reach Britain through the tunnel.

"It was the biggest incursion effort in the past month and a half," said the Eurotunnel spokesman, adding that "all our security personnel, that is nearly 200 people, as well as police were called in."

French Interior Minister Bernard Cazeneuve confirmed the numbers to news agency AFP, saying "there were some arrests and it all passed off without a fuss." Local authorities, however, disputed the amount, with police saying that despite "regular incursion attempts" it was incorrect to "say that there were 2,000 migrants at the same time."

Calais officials were unable to say if anyone had been injured in their attempts to access the tunnel.
The incident did cause serious disruptions to train service in the Eurotunnel for much of Tuesday, which passengers held up for around an hour on the British side and half an hour on the French side.

Read more: 2,000 migrants tried to enter Eurotunnel overnight | News | DW.COM | 28.07.2015

Artificial Intelligence: genuine concern, or fearmongering?

Dozens of prominent scientists have put their names to an open letter warning the public about the danger of Artificial Intelligence (AI). They are, specifically, worried about potential developments in autonomous weapons, made possible by the progress of robotics and AI.

Among those endorsing the letter are Stephen Hawking, Noam Chomsky and Elon Musk of Tesla and Space X fame.

In the letter, the signatories claim “the deployment of such systems is – practically if not legally – feasible within years, not decades, and the stakes are high: autonomous weapons have been described as the third revolution in warfare, after gunpowder and nuclear arms.”They highlight a large list of possible drawbacks to consider, should such weapons become reality.

For example, the signatories argue that they are relatively cheap to mass-produce, which could lower the boundaries for going to war, since fewer (if any) human lives would be lost.
The ‘human factor’ is also listed as one of few advantages of autonomous weapons, however, it is followed by:

“There are many ways in which AI can make battlefields safer for humans, especially civilians, without creating new tools for killing people.”

Mass-production could mean the weapons would easily end up on the black market or in the hands of terrorists wishing to destabilise nations, or war lords “wishing to perpetrate ethnic cleansing, etc.”

They write: “the key question for humanity today is whether to start a global AI arms race or to prevent it from starting.”

Their response: “A military AI arms race would not be beneficial for humanity.”

Read more: Artificial Intelligence: genuine concern, or fearmongering? | euronews, world news

Migration: Europeans head to Latin America to escape the economic crisis

As many well-educated people can't find jobs in crisis-stricken Europe, they turn south. More migrants are moving from Europe to Latin America and the Caribbean than the other way round. Jane Chambers reports from Chile.

Originally hailing from Seville in southern Spain, Magdalena Martín Sevilla decided to make Chile her new home after she couldn't find any work for months. In 2012, she packed her bags and left Spain.

"The economic situation has been terrible since 2008," she said. "It's impossible to find work in your area. People just end up doing low-paid jobs that they don't want to do."

Before the crisis hit, Sevilla, who's in her late 20s, studied with the goal of helping low-income families. After she graduated, she spent five months looking for work in Spain. When a foundation in Chile offered her a job, she didn't think twice about taking it. She moved to Chile's capital Santiago to fight poverty in Latin America.

Moving to Chile and fitting in was easy for her since Spanish is her mother tongue, but she says she still struggles as she misses her family and friends. And she feels people in Spain know how to enjoy life a little bit more.

Read more: Europeans head to Latin America to escape the economic crisis | Americas | DW.COM | 28.07.2015

7/27/15

Digital Revolution: What Impact Does The Digital Revolution Have On Work And Inequality? - by Michael A Osborne

The link below will take you to a transcript of a Social Europe podcast in which Social Europe Editor-in-Chief Henning Meyer discusses the impact of the Digital Revolution on the nature of work and inequality with Michael A. Osborne, Associate Professor in Machine Learning and Co-Director of the Oxford Martin Programme on Technology and Employment at the University of Oxford.

Read more: What Impact Does The Digital Revolution Have On Work And Inequality? » Social Europe

Middle East: Turkey denies targeting Syrian Kurdish group

The Syrian Kurdish YPG group on Monday accused Turkey of targeting its positions inside Syria, a charge Ankara denied amid growing tensions between Turkey and Kurdish groups in the region.

In a statement released Monday, the Syrian Kurdish YPG (Kurdish People's Protection Units) said the Turkish army targeted one of the group’s vehicles in the border village of Til Findire, east of the border town of Kobane, where the Kurds handed a major defeat to the Islamic State (IS) group earlier this year.

The YPG, a Syrian group affiliated with the banned Turkish PKK (Kurdistan Workers Party), has been one of the most effective groups battling Islamic State militants in Syria, but Turkey fears they could revive an insurgency against Ankara in pursuit of an independent state.

Read more: france 24 - Turkey denies targeting Syrian Kurdish group - France 24

China: What's fueling the frenzy in China stocks? - by Dhara Ranasinghe

China's benchmark stock market slid 8.5 percent on Monday, suffering its biggest daily loss since 2007, indicating that there is seemingly no reprieve to the violent selling rocking the country's equities.

A sharp fall in commodity prices, weak Chinese economic data and concerns that Beijing may be reluctant to dole out further measures to support beaten-up shares all contributed to the sell-off, analysts said.

Data released earlier on Monday showed China's industrial profits declined 0.3 percent year-on-year in June, compared with a 0.6 percent rise in May.

Read more: What's fueling the frenzy in China stocks?