The AIG case illustrates an important paradox that looms again in today’s European debt crisis. Like regular insurance, credit-default swaps offer a way to spread risks, and standard thinking in economics holds that “risk sharing” of this kind should make individual banks safer, and the entire banking system more stable. It isn’t true, though, at least not always. In fact, too much sharing of risks can actually create bigger problems.
This follows from a recent study by Italian physicist Stefano Battiston and colleagues (one of whom is the Columbia University economist Joseph Stiglitz, winner of the 2001 Nobel Memorial Prize in Economic Sciences). The researchers showed that too much risk sharing can make it easy for distress to spread like a virus.
Monthly Archives: October 2011
Totally Totalitarian Britain: Libyans Can Decide Their Future But Not The Britons :: Hudson New York
If the European Union was created as a counterweight to the United States, the EU looks ever-increasingly as if it was modeled on the Soviet Union.
There is no “inconvenient” opposition party in the EU Parliament, where legislation is drafted and passed into law that must be obeyed by the British people.
Neither the British nor any other people in Europe voted for its President, Herman Van Rompuy. Nor do they –or anyone, for that matter — have the power to vote him or anyone out. Yet at least 75% of laws passed in Britain are currently drafted in the EU. Vladimir Bukovsky, a former jailed dissident who fled the former Soviet Union, calls it, “The EUSSR.” The EU is, fundamentally, totalitarian.
At best, the EU Parliament is a benign oligarchy that controls more and more the affairs of Europe’s nation states and their people. Whether it will be benign in ten or twenty years, or to future generations, is, of course, unknown. History and human nature, however, suggest that a one-party Parliament with an appointed President and an “elite” that drafts legislation in secret is not a recipe for a free and prosperous people.
Polls consistently show that a majority of Britons want to leave. Who can blame them?
Could Occupy Wall Street be America’s Arab Spring? the China Daily asked gleefully before going on to argue the Arab Spring was in fact “objectively non-existent.” (China’s leaders have opposed the uprisings in the Middle East every step of the way, perhaps seeing a little of themselves in Hosni Mubarak, Moammar Gadhafi and Bashar Assad.)
With no apparent sense of irony at all, the state-controlled Chinese press even joined those accusing the mainstream U.S. media counterparts of imposing a blackout on the Occupy Wall Street protests.
But that was back when the “Occupy” protests were safely an ocean and a bit away in New York City. But the movement’s rapid spread across North America and Europe to Asia – Occupy Tokyo, Occupy Seoul and Occupy Taipei protests began on Oct. 15 – has clearly rattled the Communist Party leadership. There’s even a small but ongoing Occupy Hong Kong protest camp in front of the HSBC headquarters in that separate-but-still-part-of-China city’s financial district.
Reporting from Beijing — In a country with zero tolerance for public displays of disaffection, the 77-year-old retired doctor went very public with her anger over the demolition of her property in a booming Shanghai neighborhood: She stripped naked on the steps of a courthouse.
This might well be called the season of discontent in China. People, many of them middle-class homeowners, have been taking to the streets across the country in the last few months to air their grievances. At times, the protesters have turned violent — overturning police cars or smashing windows with baseball bats — but more often, they are engaging in civil disobedience.
11th self-immolation in Tibet; Kardze monk sets fire to himself during religious ceremony | International Campaign for Tibet
Dawa Tsering, a monk in his thirties from Kardze Monastery in Kardze (Chinese: Ganzi) Tibetan Autonomous Prececture in Sichuan, set fire to himself on the morning of October 25, becoming the 11th Tibetan to have self-immolated since March 2009, and the tenth since March of this year.
It looks like the monks are trying to jump-start a revolution in Tibet, but it’s not working. It may be that the Chinese police are doing a good job suppressing any rebellions.
|Fiery deaths in China precede Tibetans‘ global protest …?Philadelphia Inquirer – Jeff Gammage - 1 hour ago
He was the 10th Tibetan to self-immolate since March in protest against Beijing’s repressive policies and to demand the return of the Dalai Lama – an …
Chinese propaganda: Fake films on self-immolation? Phayul
Tibetan Buddhist Monks Set Themselves On Fire To Protest Chinese …?FrontPage Magazine – Stephen Brown - 4 hours ago
Tibet – Mr Patrick Bloche Urges the President of France to Make …? ISRIA (registration)
all 2 news articles »
My point is that when you look back on the history of past civilizations, a striking feature is the speed with which most of them collapsed, regardless of the cause.
The Roman Empire didn’t decline and fall sedately, as historians used to claim. It collapsed within a few decades in the early fifth century, …
The Ming dynasty’s rule in China also fell apart with extraordinary speed in the mid–17th century, …
A more recent and familiar example of precipitous decline is, of course, the collapse of the Soviet Union. …
What all these collapsed powers have in common is that the complex social systems that underpinned them suddenly ceased to function. One minute rulers had legitimacy in the eyes of their people; the next they didn’t.
Despite government budget pressures and international rhetoric about disarmament, evidence points to a new and dangerous “era of nuclear weapons”, the report for the British American Security Information Council (Basic) warns. It says the US will spend $700bn (£434bn) on the nuclear weapons industry over the next decade, while Russia will spend at least $70bn on delivery systems alone. Other countries including China, India, Israel, France and Pakistan are expected to devote formidable sums on tactical and strategic missile systems.
For several countries, including Russia, Pakistan, Israel and France, nuclear weapons are being assigned roles that go well beyond deterrence, says the report. In Russia and Pakistan, it warns, nuclear weapons are assigned “war-fighting roles in military planning”.
Two of the Middle East’s dictators, Iranian Supreme Leader Ayatollah Ali Khamenei and Syrian President Bashar al-Assad, want to form a united front against NATO ally Turkey for what they see as dangerous meddling in regional affairs.
Believing that it has blunted Saudi Arabia’s influence in the Middle East, Iran is now turning its focus on Turkey in an effort to establish Iranian hegemony in the region.
The pressure the United States and the West is bringing to bear on Iran to keep it from acquiring nuclear weapons is all for naught. Not only does the Islamic Republic already have nuclear weapons from the old Soviet Union, but it has enough enriched uranium for more. What’s worse, it has a delivery system.
The West for nearly a decade has worried about Iran’s uranium enhancement, believing Iran is working on a nuclear bomb, though the government maintains its uranium is only for peaceful purposes.
Longstanding tensions over the value of the Chinese currency now seem on the verge of breaking out into action.