APRIL 21, 2009 NEWSPAPER GLEANINGS

FEAR OF DEFLATION IN SPAIN

Fear of Deflation in Spain Raises. Prices dipping everywhere in Spain have signaled the possibility of a deflationary spiral..and similarities to the Great Depression and the “Lost 90s Decade” of Japan.

(See: http://www.nytimes.com/2009/04/21/business/global/21deflate.html?em)

Deflation is defined as a general decline in prices of goods and services. Prices of goods and services rise gradually in a normal economy at about 3% annually (more or less). It indicates a healthy demand and a growing economy. Economists begin using the term "deflation" when normal inflation disappears (i.e. when inflation reaches 0% ). A deflationary period may occur when a nation’s weakened economy causes employment to falter, unemployment rises and with (fewer euros or dollars in circulation) the result is a weak demand for goods. This encourages retail companies to lower prices to stimulate sales. When such remediation does not generate results, companies resort to lay-offs of workers and to lowering prices still further. The increased unemployment only intensifies weak demand for goods and services and the process of falling prices, decreased demand for goods and increased lay-offs causes a complex of events that reinforces itself through a feedback loop to produce a vicious cycle. The country may continue into a generalized downward economic spiral.

In Spain, prices are reported to be falling “everywhere”—restaurants, pharmacies, supermarkets, and even fashion retailers. In March, Spain was the first euro-zone nation to report a negative inflation rate (thus meeting the definition of deflation). Inflation in Spain has averaged about 3.5% annually) Though the negative rate for March was small, only -0.1 percent inflation and this was reflected mostly in food (fish was down 6%, and sugar down 6%--these are areas where prices can fluctuate wildly and seasonally), there are concerns among economists since there were as well declines in prices of footwear, electronics, medical treatment and drugs. And with the nation’s jobless rate at nearly 16% (and nearly one third of workers in the under 25 age group unemployed) the falling prices cause economists worry that Spain is at the edge of a deflationary period.

Other nations in the euro-zone such as Portugal, Luxembourg, and Ireland have also reported drops in prices. See Paul Krugman’s piece on Ireland (“Ireland go Broke” in the NY Times and below).

Germany, the big economy of Europe, reported an 8% drop in wholesale price from a year ago, while Japan the Asian economic workhorse posted a 2.2% decline during the same period. Back here in the USA we registered a Consumer Price Index (CPI)fall of 0.1% in March (but if one excludes volatile food and energy prices that value was interpreted as a positive 0.2%). That negative value is the first time since 1955 that that the CPI has gone negative. So we will continue to evaluate these data and see what happens in April. To be continued.

FATTIES CAUSE GLOBAL WARMING!

The UK tabloid "Sun" (http://www.thesun.co.uk/sol/homepage/news/article2387203.ece) featured on its front page a glaring headline "Fatties cause global warming!" and included rear end pictures of several large British bums!

“Are these fatties causing global warming?” the paper asks under these unflattering rear-end pictures. The rise in the number of overweight people—who eat more (and use their cars more than walk)—so they say—is a major cause of added CO2 gas emissions. CO2 is the gas which effectively absorbs earth long-wave radiation..heating the earth's atmosphere and causing global warming. According to the Sun (which quotes the World Health Organization), a billion extra tons of carbon dioxide gas is generated each year by overweight people—thus speeding up global heating, polar ice cap melting and even the death of polar bears. Furthermore the demand for meat-- a particularly high energy food-- is increasing around the world and will soon reach USA standards. That’s not good for the planet. The Sun reports that a “staggering 40% of Americans are obese, among the 300 million world-wide (fatties).” I guess their point is that eating meat to is more likely to make you fat, and production of animal protein consumes more energy and generates more carbon (very much more--to see how much look back on my blog) than vegetable production. But let's not blame the obese when major companies are pumping carbon into the air by the millions of tons, when many of us drive vehicles which get only 12-15 miles per gallon, when we heat empty houses to tropical levels of temperature in winter and cool them till the windows frost on the inside in summer. Fatties are the last place we have to look for improvement on this score. But the bums were eye catching!

PIRACY ON THE HIGH SEAS!

Piracy has been a big topic in the news lately. The Somali teenager, who under a flag of truce went onto the USS Bainbridge to make a deal for the release of Captain Phillips, is now in New York. He and his parents claim he is a juvenile. But that would certainly crimp the style of the elements in our government and judicial system who would like to make a political point. His s captors claim he is over eighteen. From the pictures I have seen of him I would estimate that he is about sixteen or seventeen. But we can be sure that if there is any question...he will be judged an adult and tried accordingly. There are many questions about this case. Was he attempting to make a deal for Phillips by cooperating with the Navy? Was he on board under a flag of truce when his compatriots were shot by the Navy snipers? If so his legal status might be judged very different. Does the USA even have legal jurisdiction over this youngster? In the rush to judgment to characterize the Somali boy as a “pirate” and a killer we may be simply rushing to misjudgement. Hey he's only a scared black kid, facing the US Navy and angry NY crowds.

KRUGMAN'S "ERIN GO BROKE"

Not Erin Go Bragh! (i.e. "Ireland Forever") but, "Erin go Broke" (by Paul Krugman, NY Times) See: http://www.nytimes.com/2009/04/20/opinion/20krugman.html?

The informative and entertaining Mr Krugman, in response to a question regarding the worst case scenario for America’s aling economy retorted: “America can turn Irish!” No, he was not impugning Ireland’s culture, history, beer, or its hardworking friendly people…but their economic plight and Dublin's response to the recession--that's what bothers Mr Krugman.

What troubles him so much about Ireland's response to the recesion? Ireland’s GDP (gross domestic production) will likely soon fall more than 10% from its peak value--according to Krugman and that’s a line that divides a simple recession from a depression. But to add insult to Krugman’s sense of injury, the Irish--to satisfy nervous lenders--are raising taxes and slashing spending. These are policies that Mr. Krugman says will only deepen the slump and make things worse.

Ironically the trouble started when Ireland became too much like America. It jumped wholeheartedly into risky, ungoverned, entrepreneurship. Only last year, the reactionary Heritage Foundation of the USA, darling of the Bush White house, classified Ireland as the "third freest” economy in the world" after Singapore and Hong Kong. They, the Heritage “alternate reality” gang, viewed the lack of banking regulations as “just barmy”. These weak regulations led to Ireland to become, according to Professor Krugman, "a cool, snake-free version of coastal Florida” as regards it ubiquitous and over-zealous housing-construction sector. Then when overbuilding and falling prices burst the housing and construction bubble and, as in the USA, many investors and home buyers were left with negative equity. Only, in a smaller economy and smaller nation the impact was more severe and more widespread. The Irish banks took a heavy hit. But the Dublin government which had expanded with the bubble economy also got burned. Its revenues collapsed with “Mick the carpenter’s” income. As home-mortgage defaults increased to a tidal wave, the banks began to falter. Government had to protect their citizen’s accounts and pledged to purchase the bank's bad assets. This of course with citicen's tax monies to the tune of more than twice the country’s GDP (estimated by this author at $160 billion dollars) according to Krugman. That would be equivalent to about $30 trillion dollars in US terms. The Irish taxpayers are paying for the bad judgment and lack of risk-aversion of the Irish banking class. Does this sound familiar?

To reassure lenders who worried about long term Irish solvency the government was forced (by the threat of increased risk premiums) to raise taxes and cut spending. Bad news for a smooth recovery according to Krugman. But given the circumstances Irish government has few options.

In regard to the US, we haven’t reached the point where our financial solvency is in question, our present national debt is estimated at $11.1 trillion while our GDP (estimated for April 2009) at $14.2 trillion thus: 11.1/14.2 = 0.78, or approximately 78% of GDP. See: http://forecasts.org/gdp.htm. Thus our Debt to GDP ratio is close to 80%, that is considerably higher that what it had been in the past and higher than many western industrialized nations.

A CHANGE OF COURSE ON TORTURE PROSECUTIONS

Today the President has signaled that he is in favor of prosecuting those such as Mr Jay Bybee and Mr Yoo who signed documents which facilitated what some persist in calling enhanced interrogatin (as does Wolf Blitzer on CNN--Come on Wolf!) On the other hand, Congressman Jerry Nadler, knows how to call a spade a spade.

(See:http://www.huffingtonpost.com/2009/04/20/senior-judiciary-committe_n_189026.htmlnot Mr Nadler the senior Democrat on the House Judiciary Committee, called Monday for the impeachment of federal judge Jay Bybee, one of the principal authors of the torture memos which were released last week by the Obama administration.

"He ought to be impeached," Nadler said, in an interview with the Huffington Post (agreeing with the NY Times editorial of the preceeding day). "It was not an honest legal memo. It was an instruction manual on how to break the law." Nadler said it all in a nutshell! Kudos to Mr. Nadler.

Nadler, is a New York congressman, and chairman of Judiciary Committee and member of the Constitution, Civil Rights, and Civil Liberties Subcommittees. Bybee is currently serving a lifetime term on the Ninth Circuit Court of Appeals. He was appointed in 2003 and confirmed before it was publicly known that he had authorized the torture of detainees. This man certainly does not belong in any judicial setting where they read the American Constitution. He had made a mockery of it. Impeach him! Yoo belongs in jail! Once these "fruits on the ground" under the tree are collected. Then we can go for the ones on the lower branches and finally justice should come to those on the top of the tree--especially to Cheney and Bush who directed all this madness from their mad tree house.

WATER CATASTROPHY IN THE WEST BANK

The head of the World Bank has indicated today (April 22, 2009) as reported in Il Manifesto.It that a crisis is brewing in the occupied territories: "Israelis Use of Scarce Water in the Territories leading to a humanitarian crisis" reports Il Manifesto.
See: http://www.abc.net.au/worldtoday/content/2008/s2549566.htm

My translation from the Italin follows:

Israel: the head of the World Bank today indicated that the Israelis (settlers) consume as much water as four Palestinians. It (their action) is called the "thirsty ('sete'=dry or thirsty) torture" for the Palestinians. The distribution of water according to the Israelis and Palestine agreement of Oslo in 1995, must be modified immediately if one wants to put and end to the discrimination that will provoke a castastrphy in the occupied territories."

Other sites: http://washmena.wordpress.com/2009/04/22/palestine-world-bank-reports-assesses-restrictions-on-water-development/

This report was only lightly covered in the western press. Too bad!

ONLY WHEN THE TIDE GOES OUT, CAN YOU SEE THE NUDE BATHERS

So said Warren Buffett..as quoted by Tom Friedman in the NY Times (April 22, 2009) What did he mean? Bubble economies –like our housing embroglio—can hid a lot of rot. “In our case, the excess consumer demand and jobs created by our credit and housing bubbles have masked not only our weaknesses in manufacturing and other economic fundamentals, but something worse: how far we have fallen behind in educaton during the Bush years. Friedman takes up the case of K-12 education and how much its decline is now costing us. Friedman points out that in the 50s and 60s the US dominated the world in education…and the world economy. By the 70s and 80s we still had a slim lead…but today we have fallen way behind in numbers of graduates (per capita) and their quality. Based on data Friedman quotes from a study entitled “Economic Impact of the Achievement Gap in American Schools” ( by McKinsey Consultants) the US ranked 25th (out of 30 countries) in math and 24th in science. Our students are on a par with Portugal and the Slovak Republic. More significantly the longer the students were in school the more they lagged behind, suggesting that they are not stupid but the system is! “They are being prepared for $7-12 dollar an hour jobs not $40 to 50 dollar an hour or more jobs," writes Friedman. This has its economic implications. The report concludes that had the education gap been closed when it was first noted (in 1983, when a study entitled> “A Nation at Risk” was published) the GDP in 2008 would have been $ 1.3 to $2.3 trillion dollars higher than it is now!



RECESSION EXPOSED WEAKNESSES IN JOBLESS BENEFITS
http://finance.yahoo.com/news/Recession-exposes-holes-in-apf-14284950.html

Leaving aside the medical plan that many loose when they leave their jobs and the fact that the USA ranks 44th in the world as to the quality and efficay of its public safety net services, workers here in the US suffer more and longer than other western industrialized nations when the economy falters. Out social security safety-net so maligned by the GOP (not to mention how it was undermined) was designed not only for the welfare of the workers but to help pump money back into an aling economy. Think of social security payments as a bailout for workers. The money paid out goes through the hands of the unemployed and into those of the small businessman and thus help sustain the local economy which depends on worker’s daily and weekly purchases.

But our present system, designed in 1935--that was 74 years ago--and now there are many shortcomings that may not be effective and ironically may be actually helping to fuel the recession. For example, this report points oth there are more part-time workers today, but the 1935 program was designed for full time workers and many of these are shut out of benefits because it serves only those looking for full time work. Unemployment lasts much longer now. Not the six months and 2 weeks (26weeks of help) established in 1935. The recession has been in progress now since 2007! Many workers have run through their 26 week (now it has been extended to 33 weeks) benefits. When that happens these families cut back on expenditures (exacerbating the local economic situatuation—and then dip into their savings. But when saving are gone--or are non-existant--they have no other recourse but penury. Estimates are that some one third of the total unemployed have run through their benefits.

WHY WE CAN'T GO TO DURBAN II

The workings of Mr. Obama's cool and logical mind escapes me. Durban II, the UN-sponsored conference in Geneva on world racism is, according to our President (the great advocate for change), too dangerous a place for the USA to attend. We might be exposed to some bad thoughts and words there---things there about Zionism and Israel. So Mr. Obama has decided (along with Canada, Austrailia and Israel) to boycott Durban II. As a consequence, the USA, the earth's most powerful nation, will have no say regarding the world's dispossesed and marginalized people. We will have no voice regarding the evils of world racism. As former Congresswoman and Green Party Presidential candidate Cythia McKinney stated today in San Francisco's Bayview Newspaper: "We heard the same palaver in 2001 from the same forces inside our country, basically that a discussion of Zionism, in the context of such a conference, would be anti-Semitic; therefore all the world’s dispossessed and marginalized people must continue to suffer and sacrifice while muting their grievances so that no discussion of Israel would take place on the world stage in this context."

In Brooklyn New York where I was raised, youngsters of the fifties, learned to chant that old doggerel: "Sticks and stones will hurt my bones...but names will never harm me." In those halcyon days, those sentiments seemed to fit in well with our sense of entitlement as post-WW II Americans. Our elders fought a great war--one in which many of our dads, friends and neighbor's died, just so we could be "free-speech Americans". We lived at a time when those sun-bleached little war flags still hung in our neighbor's front windows. We knew kids whose fathers or older brothers went to war but never came home...like Pete Franza, my next door neighbor's brother. So that oft-chanted doggerel seemed to fit with our underlying philosophy. It was a child's rendition of our First Amendment Rights. If Congress and the Nazis could not abridge our right to speech--- who would dare? We were raised to think that Free Speech was a good, a God-given right. Furthermore it was guaranteed by our Constitution.

Decades later, that sense of entitlement was further supported in the famous court case, Texas v. Johnson, 491 U.S. 397 (1989). Some of us learned then how the Supreme Court reversed the conviction of Gregory Lee Johnson for burning an American flag by a 5-4 vote. Justice William J. Brennan, Jr. asserted that "if there is a bedrock principle underlying the First Amendment, it is that government may not prohibit the expression of an idea simply because society finds the idea offensive or disagreeable." (See Wikipedia, First Amendment)

We lived by those ideals-- we hoped our new Obama Administration would too.

Apparently not.

The US, led by the nose by our tough little Mid East ally, Israel-- a nation which armed to its teeth, stands up fiercely to a wide array of hostile nations around its borders with no fear, but claims it is too frightened of the possibility of harsh words at Durban II to attend that conference. Just what words are they afraid of? That the rest of the world will focus negatively on Israel's treatment of their Arab-citizen minorities? Or the harsh policies and statements of their new, foreign minister Avigador Lieberman who would have Israeli Arab citizen-rights subject to a loyalty oath? (Does that remind one of 15th Century Spain?) Or perhaps their harsh treatment of Palestinians in the occupied territories? And more recently, and more seriously their over-the-top military action in Gaza?

Perhaps these Israeli actions actually need a good airing in the world press. In the end, after that exposure would they be classified as a racist state? Perhaps not. But why should we in the US, a nation which flies its First Amendment rights with pride, act in a way which shields these issues from open discussion, and in the process deny the truly disposed and ill-treated their fair hearing in the world forum?

HOW DID WE GET HERE BEN?

USA Today’s interview with FED Chairman Ben Bernanke (April 4, 2009) See: http://blogs.usatoday.com/oped/2009/04/4-questions-4-answers-from-ben-bernanke.html


Asked how did we get here Ben? The USA Today piece (April 4, 2009) records Mr Bernanke response in this manner. “At the most basic level, the role of banks and other financial institutions is to take the savings generated by households and businesses and put them to use by making loans and investments. In our global financial system, saving need not be generated in the country in which it is put to work” said Bernanke (according to the USA Today report) Bernanke explained that in our present global system banks need not be limited by American savings alone. In fact much of the funds which entered our nation came from abroad. In the last 10-15 years nearly a trillion dollars entered the USA from abroad. That represented about 6% of our GDP or nearly a trillion dollars worth of potential investment money. The banks were awash in funds and they began to compete aggressively for borrowers.

The result was that “credit to both households and businesses became cheap and easy to obtain”. The result was a mortgage barn sale and a massive housing boom in the US. Mortgages were cheap, auto loans were cheap…money in general was cheap to borrow. People borrowed with abandon. “ Unfortunately much of this lending was poorly done” according the Bernanke. The loans were agreed to with little or no down payment and insufficient oversight on how the borrower could pay for the loan. These were later characterized euphemistically as “sub-prime” loans rather than what we in common parlance might simply call “worthless paper” (my quotes). How did this happen? Regulations were lax. USA Today does not ask Mr. Bernanke how this came about, but it well known that Bernanke and his predecessor Alan Greenspan were partly responsible for this “poor lending” and lax regulations when they looked the other way while Congress and the Clinton and Bush Administrations both sought to limit such regulations.

But it was not simply a boom in bad mortgages that caused the crisis. Bernanke states, “To satisfy the enormous demand for investments both perceived as safe and promising higher returns, the financial industry designed securities that later proved to involve substantial risks — risks that neither the investors nor the firms that designed the securities adequately understood at the outset.” To put it in simpler terms the ‘financial wizards” (my characterization) of Wall Street saw a means of limiting their risks (of these sub-prime loans) by spreading it across the investment spectrum. Such a strategy (bundling high risk securities with lower risk) would limit the lending bank’s exposure and of course increase the lending institution’s profits. And without a regulator in sight and the FED uninterested or unable to warn the consumer and the government of these machinations the proceeded to invent “designer securities” based on these bad mortgaged backed loans to sell world-wide. These “securities” (another euphemism) which according to Bernanke “later proved to involve substantial risk” made enormous profits for the banks and financial institutions who bundled them and sold them as triple “A” paper.

“The credit boom began to unravel in 2007, when problems surfaced with subprime mortgages”states Bernanke. But to my mind what happened was that the great building boom stuttered and faltered just when higher gasoline prices peaked in late 2007 and continued rising to over $4.00 a gallon in 2008 (the Iraq War effect, booming economies in China and India where factories were working overtime to export goods to nations where housing booms were creating rooms to fill with furniture ) and at the same time as the building boom reached a point where the glut of housing simply caused the prices to fall. Thus the Ponzi Scheme of Wall Street (my characterization) began to unravel when in early 2007 the relentless building boom created its own pit-fall. The glut of housing caused house prices to fall. With falling house values, many mortgage holders found themselves with what is termed negative equity. In October of last year 20% of homeowners (or about 7.5 million homes) held mortgages which were higher than the value of the equity they held in their houses. See http://21cvision.blogspot.com/2008/10/20-of-us-homeowners-have-mortgage.html.

A to be nameless person I know, took out a second mortgage on his house. The older house had an original mortgage of two-hundred thousand and since houses in the neighborhood were selling for five-hundred thousand, this person took out a second for three hundred thousand. His total indebetness was now $500,000. His mortgage payment was higher but he had a big bunndle of money in hand. He used the funds to make needed repairs, add a garage and fix up his basement. He also somehow took his family to Disney World that summer. But that was the summer, house prices in the neighborhood hit the skids and his now formerly $500,000 property was assessed at only $350,000. He now owed more ($150,000 more) on his mortgage than his house was worth. Then, disaster struck when gas prices rose to $4.00 a gallon, (he had a long commute) and when he lost his overtime at the plant, and his wife was laid off from her job, he found it impossible to pay his monthly loan. He tried to sell, but there were no buyers. One night a few months back he and his wife packed up a utility trailer he had hidden in the big new garage. I saw it one day when the doors were open. Then they left one night. We heard they went to Florida where they both found work and are renting a house.

When house prices fell, “Mortgage delinquencies and defaults rose.”, states Bernanke. “Then investors began to pull back from a wide range of credit markets, and financial institutions cut back their lending. The crisis deepened last September when the failure or near failure of several major financial firms caused many financial and credit markets to freeze up.” That’s what caused the crisis.

In summary, Ben explains we got here because banks were awash in nearly trillion dollars of foreign money. With little to lose and much profit to make and no one watching them (certainly not Bernanke or the FED) the banks began competition to aggressively to lend money. The result of their endeavors was that credit became easy to get. Too often credit was extened to those not qualified to repay their loans. Banks and financial institutions were making good profits but they wanted more. Greed drove financial institutions to develop myriad forms of designer securities many of which were based on the prommisory notes of the money they had already loaned out (mortgages) and were already producing a profit. That profit was not enough. They designed security products which based on prommisory notes (mortgages) which could be resold or “recycled” as new securities to be sold over and over again. I think my term:“scheme” fits this type of financial transaction quite well. Then disaster struck when the housing boom produced a glut of houses and the demand for housing fell and with it house prices. Mortgage holders defaulted and those holding these worthless papers were left holding the bag. That is until bailed out with government largess.

Unbelieveably after accepting the US bailout some banks, still in their excess spending mode, had the nerve to give annual bonuses to those who had created the crisis. You many read today where the Bank of America gave out $3.5 billion dollars in bonuses to Merrill Lynch employees when B of A took over that company. Yes "b" billion dollars! See: http://www.washingtonpost.com/wp-dyn/content/article/2009/04/13/AR2009041302745.html?hpid=moreheadlines. So the proverbial “house of cards” built by the financiers simply collapsed, but not quite around their own ears….the cards fell around us all--- the not guilty, suffering, homeowner, and taxpayers.

MORE BAD STUFF FROM CHINA

Defective Drywalls and Leaky valve stems. What price global trade with China?
Associated Press Story: April 11. 2009…Parklland, Florida

Brian Skloff and Cain Burdeau report that there may be 100,000 homes recently built in the US that are uninhabitable due to fact that the Chinese-manufactured-wall boards that line their interior walls emit hydrogen sulfide gas, which discolors metal, tarnishes jewelery, smells awful (having the aroma of rotten eggs) generates sore throats and headaches and may be causing a toxic environment for the inhabitants—if they could stand the smell long enough to get really sick.

The authors reveal that over 500 million pounds of cheap Chinese wall board was imported into the USA. This product was manufactured during a four-year period during the last housing boom—a time when American-produced gypsum board was expensive and difficult to get. The Chinese manufacturers apparently used substandard, sulfur-bearing minerals and may have used adulterants such as unrefined fly-ash which is itself a toxic substance. Fly ash is a by-product of coal-fired electric plants. In the prcess of scrubbing the smoke sulfure oxides are released and are combined with a calcium scrubber to produce a dry substance--calciumsulfate which is the mineral gypsum. These materials are used to prepare gypsum board even here in the USA. However it is suspected that the process used in China may have permitted the introduction of other forms of uncombined sulfur within the wall board, which, when exposed to heat and moisture give off the colorless, smelly, flammable and toxic, gas known as hydrogen-sulfide (H2S).

However, according to the AP report, Dr. Patricia Williams, a University of New Orleans toxicologist hired by a Louisiana law firm that represents plaintiffs in some of the cases, said she has identified hydrogen sulfide in the Chinese drywall as well as other highly toxic compounds, including sulfuric acid, sulfur dioxide and carbon disulfide. These other substances may act to increase the toxicity and noxiousness of the gases. The serious complaints including the stench and physical effects seem to suggest that it is H2S that is the main culprit. H2S is indeed toxic and highly objectionable substance.

[Acccording to Wikipedia: Hydrogen sulfide is a highly toxic and flammable gas. Being heavier than air, it tends to accumulate at the bottom of poorly ventilated spaces. Although very pungent at first, it quickly deadens the sense of smell, so potential victims may be unaware of its presence until it is too late.

H2S is considered a broad-spectrum poison, meaning that it can poison several different systems in the body, although the nervous system is most affected. The toxicity of H2S is comparable with that of hydrogen cyanide. It forms a complex bond with iron in the mitochondrial cytochrome enzymes, thereby blocking oxygen from binding and stopping cellular respiration. Since hydrogen sulfide occurs naturally in the environment and the gut, enzymes exist in the body capable of detoxifying it by oxidation to (harmless) sulfate.[4] Hence, low levels of sulfide may be tolerated indefinitely.

At some threshold level, the oxidative enzymes will be overwhelmed. This threshold level is believed to average around 300-350 ppm. Many personal safety gas detectors, such as those used by utility, sewage and petrochemical workers, are set to alarm at as low as 5 to 10 ppm and to go into high alarm at 15 ppm.

An interesting diagnostic clue of extreme poisoning by H2S is the discoloration of copper coins in the pockets of the victim. Treatment involves immediate inhalation of amyl nitrite, injections of sodium nitrite, inhalation of pure oxygen, administration of bronchodilators to overcome eventual bronchospasm, and in some cases hyperbaric oxygen therapy (HBO). HBO therapy has anecdotal support and remains controversial.[5][6][7]

Exposure to lower concentrations can result in eye irritation, a sore throat and cough, nausea, shortness of breath, and fluid in the lungs. These symptoms usually go away in a few weeks. Long-term, low-level exposure may result in fatigue, loss of appetite, headaches, irritability, poor memory, and dizziness. Chronic exposures to low level H2S (around 2 ppm) has been implicated in increased miscarriage and reproductive health issues amongst Russian and Finnish wood pulp workers, but the reports hadn't (as of circa 1995) been replicated. Higher concentrations of 700-800 ppm tend to be fatal.

0.0047 ppm is the recognition threshold, the concentration at which 50% of humans can detect the characteristic odor of hydrogen sulfide [1], normally described as resembling "a rotten egg".

10-20 ppm is the borderline concentration for eye irritation.
50-100 ppm leads to eye damage.
At 150-250 ppm the olfactory nerve is paralyzed after a few inhalations, and the sense of smell disappears, often together with awareness of danger,
320-530 ppm leads to pulmonary edema with the possibility of death.
530-1000 ppm causes strong stimulation of the central nervous system and rapid breathing, leading to loss of breathing;
800 ppm is the lethal concentration for 50% of humans for 5 minutes exposure(LC50).

Concentrations over 1000 ppm cause immediate collapse with loss of breathing, even after inhalation of a single breath.

Hydrogen sulfide was used by the British as a chemical agent during World War One. It was not considered to be an ideal war gas, but while other gasses were in short supply it was used on two occasions in 1916.[8] ]

This "wall board problem" seems to be concentrated in the south and southeast. This is the region of the country which experienced the greatest amount of construction during the latter years of the housing boom (that time was also coincident with the wall-board shortage) and it also has a warm, damp climate in which the problem is most likely to show up. However, other regions of the country where these boards were used may well report similar problems with these defective materials in time. It is unfortunate that this region—the southeast—struggling with falling home prices, faltering banks and mortgage default, should also experience this additonal burden of smelly, toxic Chinese wall boards.

The AP report quotes a member of the Krulic family, who reside in a Florida community where Chinese wall boards were used and who along with their children, have suffered serious health problems over the last three years residing in their affected home. "If a shiny copper coil can turn absolutely black within a matter of months, it certainly can’t be good for human beings. " said Mrs Krulic.

As you might have guessed, the importers and manufacturers have been downplaying the health aspects of this situation and prefer to classify the problem as an aesthetic, simple olfactory issue.
While one of the Chinese manufacturers, Knaupf Plasterboard Tianjin, claims their toxicologist found only "low levels of naturally occurring compounds normally occurring in "ocean water, salt marsh air and in estuaries". Another Chinese manufacturer claims the boards were manufactured to existing US standards. For homeowners suits directed at the home construction companies are of little use since many are either in Chapter 11 or have abandoned the region or are now defunct companies. The homeowners seem to have no recourse. Some must make the choice between theirs and their children’s health and their financial well being. Those who must make these choices invariably decide on the side of their children’s health and choose to abandon their homes (and of course, some simply walk away and quit paying their mortgages). The problem seems to be one that will simply exacerbate the present housing crisis.

WHAT ABOUT DEFECTIVE CHINESE TIRE VALVE STEMS?

I heard an interesting story today (April 11, 2009) on the radio. The broadcast was that of those two amusing brothers--on NPR--who answer caller’s questions on automobile problems. They are very easy, pleasant and informative listening.

A man called in to complain that when he parked his car overnight, all four tires went flat. "You have an angry neighbor," commented one of the brothers. "Well I thought so too," said the caller, "so after refilling the tires that day, I locked the car up in the garage the next night and the same thing happened. All the tires were soft again in the morning." "I’m suspecting a kid with roof nails to spare," said the second brother. "Not according to my garage attendant," replied the caller. "Not one of them had a nail."

"Wait a minute!" said brother one. I seem to remember a story in Consumers Report about a car roll-over. Unfortunately the driver died. It was attributed to defective valves in his tires.

Strange?

Not so strange. The valve stems were all manufactured in China These little rubber based valves installed in the metal of your car's wheel-rims could rupture instantaneously and cause a tire to deflate nearly instantly or simply slowly leak air. The caller's problem was the latter one. See Consumer Report at: http://blogs.consumerreports.org/safety/2008/06/tire-valve-stem.htmlRead: http://jalopnik.com/5045535/chinese-valve-stem-warning-could-affect-everyone-whos-had-tires-replaced-since-2006

A vast valve stem recall is underway.

Apparently anyone who had their tires replaced since September 2006, and who hasn’t? Might have defective valve stems installed. To find out you will have to go through the expense of removing the tire from it rim and looking at the rubber base of the stem.

According to Andrew Stoy in his September 2008 story, (at Jalopnick.com) Consumer Reports warns of a potential problem with as many as 30 million rubber replacement valve stems manufactured in China for NC-based Dill Air Control Products and sold after mid-2006. While a federal recall hasn't yet been issued, NHTSA has opened an investigation after a Florida man died following a blowout and flip allegedly caused by one of the defective valve stems. Yes, it was a Ford Explorer. So, how do you know if you have one of the millions of potentially deadly valve stems on your car?

Identifying a defective valve stem is simple: Dismount each tire from its rim and check. That's right, folks: There's no outward marking to identify the defective valve stems, nor was any tracking system in place to determine who may or may not have received one. So, if you're part of the at-risk group, you probably want to keep both hands on the wheel until NHTSA sorts all this out. [Consumer Reports; Photo and tons of great valve stem info at Techno-Fandom.org]

Just add these two to the other Chinese import scandals--Melamine laced milk powder, baby formula, pet foods and candies; lead painted toys; and now tire-valve stems and sulfur laced wall boards all from our favored nation trading partner China.

My best advice is to keep checking those labels!

AT LAST ONE CORAGEOUS JOURNALIST SPEAKS OUT

READ HIM HERE:

ISRAEL CRIES WOLF
By ROGER COHEN
Published: NYT April 8, 2009

ISTANBUL — “Iran is the center of terrorism, fundamentalism and subversion and is in my view more dangerous than Nazism, because Hitler did not possess a nuclear bomb, whereas the Iranians are trying to perfect a nuclear option.”

Benjamin Netanyahu 2009? Try again. These words were in fact uttered by another Israeli prime minister (and now Israeli president), Shimon Peres, in 1996. Four years earlier, in 1992, he’d predicted that Iran would have a nuclear bomb by 1999.

You can’t accuse the Israelis of not crying wolf. Ehud Barak, now defense minister, said in 1996 that Iran would be producing nuclear weapons by 2004.

Now here comes Netanyahu, in an interview with his faithful stenographer Jeffrey Goldberg of The Atlantic, spinning the latest iteration of Israel’s attempt to frame Iran as some Nazi-like incarnation of evil:

“You don’t want a messianic apocalyptic cult controlling atomic bombs. When the wide-eyed believer gets hold of the reins of power and the weapons of mass death, then the entire world should start worrying, and that is what is happening in Iran.”

I must say when I read those words about “the wide-eyed believer” my mind wandered to a recently departed “decider.” But I’m not going there.

The issue today is Iran and, more precisely, what President Barack Obama will make of Netanyahu’s prescription that, the economy aside, Obama’s great mission is “preventing Iran from gaining nuclear weapons” — an eventuality newly inscribed on Israeli calendars as “months” away.

I’ll return to the ever shifting nuclear doomsday in a moment, but first that Netanyahu interview.

This “messianic apocalyptic cult” in Tehran is, of course, the very same one with which Israel did business during the 1980’s, when its interest was in weakening Saddam Hussein’s Iraq. That business — including sales of weapons and technology — was an extension of Israeli policy toward Iran under the shah.

It’s also the same “messianic apocalyptic cult” that has survived 30 years, ushered the country from the penury of the 1980-88 Iran-Iraq war, shrewdly extended its power and influence, cooperated with America on Afghanistan before being consigned to “the axis of evil,” and kept its country at peace in the 21st century while bloody mayhem engulfed neighbors to east and west and Israel fought two wars.

I don’t buy the view that, as Netanyahu told Goldberg, Iran is “a fanatic regime that might put its zealotry above its self-interest.” Every scrap of evidence suggests that, on the contrary, self-interest and survival drive the mullahs.

Yet Netanyahu insists (too much) that Iran is “a country that glorifies blood and death, including its own self-immolation.” Huh?

On that ocular theme again, Netanyahu says Iran’s “composite leadership” has “elements of wide-eyed fanaticism that do not exist right now in any other would-be nuclear power in the world.” No, they exist in an actual nuclear power, Pakistan. Israel’s nuclear warheads, whose function is presumably deterrence of precisely powers like Iran, go unmentioned, of course.
Netanyahu also makes the grotesque claim that the terrible loss of life in the Iran-Iraq war (started by Iraq) “didn’t sear a terrible wound into the Iranian consciousness.” It did just that, which is why Iran’s younger generation seeks reform but not upheaval; and why the country as a whole prizes stability over military adventure.

Arab states, Netanyahu suggests, “fervently hope” that America will, if necessary, use “military power” to stop Iran going nuclear. My recent conversations, including with senior Saudi officials, suggest that’s wrong and the longstanding Israeli attempt to convince Arab states that Iran, not Israel, is their true enemy will fail again.

What’s going on here? Israel, as it has for nearly two decades, is trying to lock in American support and avoid any disadvantageous change in the Middle Eastern balance of power, now overwhelmingly tilted in Jerusalem’s favor, by portraying Iran as a monstrous pariah state bent on imminent nuclear war.

A semblance of power balance is often the precondition for peace. Iran was left out of the Madrid and Oslo processes, with disastrous results. But that’s a discussion for another day.
What’s critical right now is that Obama view Netanyahu’s fear-mongering with an appropriate skepticism, rein him in, and pursue his regime-recognizing opening toward Tehran. The president should read Trita Parsi’s excellent “Treacherous Alliance” as preparation.
The core strategic shift of Obama’s presidency has been away from the with-us-or-against-us rhetoric of the war on terror toward a rapprochement with the Muslim world as the basis for isolating terrorists.

That’s unsustainable if America or Israel find themselves at war with Muslim Persians as well as Muslim Arabs, and if Netanyahu’s intense-eyed attempt to suck America into a perpetuation of war-on-terror thinking prevails.

The only way to stop Iran going nuclear, and encourage reform of a repressive regime, is to get to the negotiating table. There’s time. Those “months” are still a couple of years. What Iran has accumulated is low-enriched uranium. You need highly-enriched uranium for a bomb. That’s a leap.

Israeli hegemony is proving a kind of slavery. Passage to the Promised Land involves rethinking the Middle East, starting in Iran.

Readers are invited to comment on global.nytimes.com/opinion

ROUBINI SAYS THERE IS MORE PAIN TO COME

“WHEN THE USA SNEEZES THE WORLD GETS A COLD”
Roubini (April 7, 2009).

“But this time around it not just sneezing, it’s a severe case of pneumonia!”
(http://finance.yahoo.com/news/Market-bear-Roubini-sticks-to-rb-14876221.html)

When do we get out of the bear market? According to Dr Nouriel Roubini (NY University Stern School) there will be more bad news ahead in the banking and housing sectors and more pressure on consumers. The recent four week long market up turn was a “bear market ralley and not a change in sentiment”. Roubini expects more bad “macro news, earnings news, and financial shocks are going to be worse than expected”, that’s why the recent rise in the stock market represents only a “bear market rally”. Others have called the rally “ a dead cat bounce”. Even a dead cat will bounce if it falls from a great height, so the analogy goes. The term refers to a stock (or market) which in its precipitous fall makes a brief but temporary rise in price. Then, after that rise it continues on its downward spiral.

The blog "Moderate in the Middle" (moderateinthe middle.wordpress.com) noting on February 24, 2009 that is was Bernankes appearance before the Senate Banking Committee) that the DOW was up 245 points (to DOW at 7360) quotes Tony Crescenzi (Chief Bond Strategist of Miller Tabak) states that it was Bernake’s recent signs of leadership and his belief that the banks will get they need and recover …that’s what caused the rally.

What did Bernake say? Bernanke’s Testimony (http://www.federalreserve.gov/newsevents/testimony/bernanke20090224a.htm)
“The principal cause of the economic slowdown was the collapse of the global credit boom and the ensuing financial crisis, which has affected asset values, credit conditions, and consumer and business confidence around the world. The immediate trigger of the crisis was the end of housing booms in the United States and other countries and the associated problems in mortgage markets, notably the collapse of the U.S. subprime mortgage market. Conditions in housing and mortgage markets have proved a serious drag on the broader economy both directly, through their impact on residential construction and related industries and on household wealth, and indirectly, through the effects of rising mortgage delinquencies on the health of financial institutions. Recent data show that residential construction and sales continue to be very weak, house prices continue to fall, and foreclosure starts remain at very high levels.”

But what caused this global credit boom? And why didn't Bernanke do somthing about it before? And if something must change what is it?

To answer those questions you must read the summary of the problem in Rolling Stone magazine. The interesting cartoon of the fat Wall Street Banker ingesting Uncle Sam’s legs as Sam chews on the banker’s feet …tells it all--- except that there is no Middle Class Everyman, in the picture this gross act and being forced to pay for it. The piece tells it all in earthy language. Read it and learn about what is really going on. http://www.rollingstone.com/politics/story/26793903/the_big_takeover/1

WHAT ANGELA AND NICK WANT FROM THE G20

From: Le Figaro, April 2, 2009
“Sarkozy and Merkel united to impose their priorities at the G 20 Meeting.”

See: http://www.lefigaro.fr/international/2009/04/02/01003-20090402ARTFIG00004-sarkozy-et-merkel-unis-pour-imposer-leurs-priorites-au-g20-.php

Le Figaro reports on the activities at the Group of 20 Finance Ministers and Central Bank Govenors, meeting in London this year. The G 20 is a group of major countries which seek to promote global and financial stability. The group includes nineteen of the worlds largest economies, plus the EU. Attending this year in London are: Argentina, Austrailia, Brazil, China, France, Germany, India, Italy, Japan, Mexico, Russia, Saudia Arabia, South Africa, South Korea, Turkey, UK, USA and the EU. The cumulative GDP of the group represents 85% of the world’s GDP.

This piece in Le Figaro, roughly translated here, underscores the interests and intentions of two atendees: French President Nicholas Sarkozy and Germany’s Chancellor Angela Merkel.

Le Figaro states that these two “have attempted to leave their mark” on the G20, meeting this Wednesday in London. “While President Barack Obama and Michelle met with the Queen at Buckingham palace for tea”.. Nicholas and Angela.. “were meeting at a hotel in central London where they put the final touches to their (joint) negotiations. “We believe that in this crisis, one must attack the roots of the disease,” they were quoted as stating. …”We want concrete decisions. (And) for this, we are obliged to be firm and concrete,” insisted the Chancellor.

“Then at the working-dinner where the heads of state of the G20 at Downing Street were consecrated to the (hoped for) economic revival—a priority of the Americans, Japanese, English and Chinese—while Merkel and Sarkozy have reaffirmed as their prime objectives was “to obtain an ambitious reform of the international financial regulations.”

According the Le Figaro the joing French-German proposal consists of five (5) main points:

(1) Eliminate off shore financial centers. “Paris and Berlin wish to obtain an agreement of the G20 to eradicate the “fiscal paradise” of offshore financial centers "which do not conform to international norms.” They included a list of these centers.

(2) End transformation of obligations of credit. They demand and end to what they termed “titrisation”, defined as a financial technique which consists of transforming obligations of credit then bundling them and reselling them to investors. (Americans will recognize this as acquiring credit instruments then, slicing and dicing these instruments (such as mortgages) and reselling them to investors as a new “bundled” security (An alternate French description suggests: “Titrisation consists of regrouping certain types of securities (actifs) into securities which pay interest. The payment of the interst and of the principal for these securities is transferred to the purchaser of the security (titre)”.

(3) Strictly Control Hedge Funds. Paris and Berlin demand equally a strict control on hedge funds.

(4) Strictly Control Accounting Firms. Strict controls on accounting and other similar firms, the function which the two heads of state judge as “scandalous”.

(5) Modulation and Equalization of Trader Remuneration. And finally, they demand a “moralization” or modulation and equalization of the remuneration of traders to a generalized “world level” so that these functionaries will not be encouraged to take excessive risk.

The two agree that the Americans have made some effort in toward these goals but not enough. Their efforts seem to suggest that the American, British financial practices are the causes of the present crisis. And they rightly indicate what should be done. These are indeed necessary and reasonable requests. I would expect that Obama would agree to help implement them.

I suspect that Mr, Obama might say that these requests are a bit of “closing the barn door, after the horses left”. These goals will certainly help to limit and control future crises, but what about today? Obama goals seems directed toward encouraging both Germany and France to more aggressive monetary support for his plan to recapitalize the world banks. Expect more on this subject as it becomes available.