Cypus: an example of the cost of (Eurozone) bailouts

Cyprus was the subject of an expensive bailout by the European Union, IMF, European Commission, and European Central Bank.

As part of that bailout, large account holders took a haircut. My memory was it was 40% of all deposits over 200,000 euros. You can google and check me on this. Most of the affected account holders were Russians (possibly hiding funds from taxation at home.)

As with all such bailouts, austerity was enforced. In addition, Russia provided an extra loan with generous provisions.

Cyprus’ embarrassment over this included changing the rules for granting citizenship: from ten million euros’ investment, to three million. In addition, losers of three million or more in the ‘restructuring’ were also able to request Cypriot citizenship.

All of the above, and more, can be found in this Wikipedia page.

It turns out, Cyprus is still fundamentally in trouble. To keep its airline flying, Cyprus provided state aid. It is now hiding its planes. You can read about this here.

My point here is to show that the bailout is, crudely, a failure. Some quotes from the above page:

Under EU rules a company can only receive state assistance once every 10 years, and the airline had already been bailed out in 2007.

Cyprus Airways is 93 per cent owned by the state and employs 550 people. It has a 10 per cent share of flights to the island, down from 30 per cent two years ago. 

EU Competition Commissioner Margrethe Vestager said Cyprus Airways had no chance of becoming viable without continued state subsidies, which means money paid out in 2012 and 2013 as part of a restructuring package would have to be recovered.

Cyprus Airways has reportedly flown its fleet of planes to a remote Welsh airfield in a bid to prevent them being seized over a row about paying back 65 million euros (£51million) in illegal state funding.

As usual, you are allowed to ask, what’s my point?

The European Union overrides sovereign rights. If you screw up, we’ll force your banks to haircut your depositors. We’ll force you into austerity. We’ll make you desperate to keep getting rich immigrants. And, we’ll tell you when you can, and cannot, put money into an airline which you pretty much own outright. You’ll find yourself hiding assets so we can’t seize them.

Perhaps the EU are only friends of themselves.

As usual, I will end with dumb questions.

Given the above, and that Cyprus is a small nation, we can expect them to grovel and toady to the Europeans. Right?

If Russia had the ability to fully bail out Cyprus, would it be putting up with this dreck?

If another EU country, say France or Spain or even Italy, decides it’s had enough, will the EU be able to keep control?

and finally,

is Greece the thin edge of the wedge here?

Coherent answers or comments, that include real (kept secret) eMail addresses, will be accepted here.

Polonium, and Big Tobacco

I’ll give you a pointer later to a National Institutes of Health (USA) web page. This page is about polonium, tobacco, and (mostly lung) cancer.

First, some background on polonium and its dangers.

Polonium was the means used to kill Alexander Litvinenko. It was a case of spy payback. There is a fine Wikipedia article here on this.

Since you are all probably google competent, you can research polonium on your own. It is very radioactive; apparently a gram generates something ridiculous like 140 watts of power. It is weird, evaporating itself into the air well below its melting point. Its radiation cannot penetrate skin from outside, but it can itself be absorbed through skin. Its radiation is alpha particles – easily stopped by living tissue – and thus extremely dangerous if ingested or inhaled. Fatal doses are measured in micrograms.

Polonium was possibly involved in the death of Yasser Arafat. It was on his clothes and toothbrush. Apparently later testing ‘showed’ polonium was not the cause of Arafat’s death. I can be forgiven for stating this as I just did. I have a right to my opinion here.

That’s background so you understand that polonium is extremely dangerous in very small amounts. Now some stuff about polonium, the element, itself.

Virtually all polonium today is manufactured using cyclotrons and the like. Pretty much all of it is made in Russia, some 100 grams a year.

It can be purchased in the USA in a ‘needle source’ form, which is a needle coated with polonium is plated with gold and sealed. It’s used to demonstrate things like cloud chambers to particle physics students. Amounts used are tiny.

It is possible to refine polonium, for example from many tons of the waste left from radium extraction from ore, a few grams of polonium were extracted once – at great effort. It’s easier to make it, and you don’t need much.

Now for the relationship between polonium and tobacco.

Tobacco, to have good flavour, needs lots of fertilizer. The fertiliser used is captured from natural rocks. Those rocks contain other isotopes of lead and uranium which can spontaneously decay to produce polonium. The amounts produced are small, but they adhere to the tobacco leaves’ surfaces and are, to some extent, also taken up by the plants.

The polonium on tobacco plants tends to form an insoluble, very small-grained, solid on the leaves. It turns out that this is the most dangerous, and hardest to filter, form of polonium.

The tobacco companies knew all about this. They denied it extensively, wrote and suppressed reports, and were guided by lawyers and the need to maintain profits.

The NIH article on this can be found here. I will summarize a few key points with quotes (in italics) and my own thoughts (in plain text.)

The major tobacco manufacturers discovered that polonium was part of tobacco and tobacco smoke more than 40 years ago and attempted, but failed, to remove this radioactive substance from their products. Internal tobacco industry documents reveal that the companies suppressed publication of their own internal research to avoid heightening the public’s awareness of radioactivity in cigarettes.

It is estimated that smokers of 1.5 packs of cigarettes a day are exposed to as much radiation as they would receive from 300 chest X-rays a year.

 … the majority of the PO-210 in tobacco plants likely comes from high-phosphate fertilizers applied to the tobacco crop.

Former Philip Morris scientist Farone testified in 2002 that Philip Morris closed its low-level radioactivity facility because of product liability concerns.

I’m sure you get the idea. To summarize:

  • Tobacco firms knew about polonium risks in cigarette smoke some forty years ago.
  • The polonium comes from phosphate fertilizers that come from rocks that contain a small but significant amounts of radioactive precursors of polonium.
  • The polonium ends up in the soil and on the plants as dust etc.
  • Various research was done to mitigate this, including: washing the leaves, selecting out the most radioactive leaves, genetic modification to make washing easier or leaves smoother, and some inquiries into fertilizer sources. (The latter were deemed too difficult to control.)
  • Particulate polonium is delivered, in tobacco smoke, directly to the cell surfaces, including the lungs.
  • Nobody does 300 chest X-rays a year.
  • In-house research indicating public numbers re polonium density were suppressed, even though the in-house numbers were significantly better, because the public seemed to have forgotten the issue and nobody wanted to ‘wake the sleeping giant.’
  • Radiation detection equipment was taken down so as to increase deniability of the polonium cancer risk. This from testimony under oath.

OK, you say, now what’s your point? And what’s the dumb question?

The point: companies will risk their client population if that will increase or extend profits.


Smoking really is dangerous.

What will change? Will ‘This product is radioactive’ be added to cigarette package warnings? Will compensation for lung cancer deaths be easier to obtain? Will smokers quit or cut down?

Those are the dumb questions.


Greece, and the Euro (and Germany, eh?)

The latest BBC news item on Greece can be found here.

Let me give you a few quotes:

Here is the important point: outside of Germany it is almost impossible to find an economist or central banker who believed that the previous reconstruction of Greek debt was ever going to work.

GDP per head, perhaps a better measure of the hardship imposed on Greeks, has fallen 22% since the onset of the 2008 debacle. So austerity has certainly hurt. But has it worked to get Greece’s debts down? To the contrary, Greek debt as a share of GDP has soared to 176% of GDP, as of the end of September 2014.

Little wonder therefore that a party – Syriza – campaigning to end austerity and write off debts, has enjoyed an overwhelming victory in the general election. That it appears to be two seats short of a clear majority in the Athens parliament should not disguise the clear message sent by Greek people to Brussels. Or perhaps it would be more apt to talk of the message being sent to Berlin – since it is Germany which has been the big eurozone country most wedded to the economic orthodoxy that there’s no gain without austerity pain.

So just maybe, after Greeks have made a colossal and some would say pointless economic sacrifice, Germany will allow a rescue that permits the country a fighting chance of crawling out from beneath its colossal debts.

Now for some observations of my own.

Some time ago, when the Canadian dollar (CAD) was equal to or greater than the US dollar (USD) one of the best rates we saw, while travelling, was 1.40 CAD to the Euro. It was at times 1.48 and even higher. Now the CAD is about .80 of a USD and it is predicted to drop further, to .77.

Guess how much a Euro costs in CAD right now? 1.40855, about what it was when the CAD was 5/4 as valuable in USD terms as it is now.

What’s my point, you may ask. I have several:

  • Many Eurozone countries were forced into austerity to get their bailout loans.
  • In general, austerity has worsened the situation in each such country.
  • Not having one’s own currency one can devalue means, a country’s central bank is handcuffed.
  • Eventually, the austerity hardships result in change – riots or new, scary, radical governments that have broad popular support.
  • Paying back the debt, and keeping the austerity, these options are off the table.

In short, the Eurozone is in trouble. A problem of its own making, with Germany firmly in control and clearly, deliberately, responsible.

The value of the Euro reflects this fact. Expect it to tumble farther.

Expect Germany to find some half-way, face-saving offer to sort-of forgive or restructure Greece’s debt.

Expect Greek politicians to reject this offer.

Then the real bargaining will start.

On City Propaganda

My wife’s cousin sent me an eMail with several images attached. They were all of beautiful places in Africa. The force of her message was, imho, ‘what gives? why is this not the Africa we hear about?’

There is both truth and distraction in what we see about Africa. I call this ‘City Propaganda.’

Africa has ruins that indicate a high level of civilization in the deep past. This is seldom mentioned, as if China and Peru etc had the only interesting antiquities.
Africa has modern cities. So do Saudi Arabia, Qatar, Bahrain, just for starters. Canada has modern cities, and we have grovelling poverty at a high rate, generally in those cities.
One thing I learned from Frederick Turner (my wife’s uncle) was how ‘new wealth’ affected a country like Qatar. There were only four jobs a native Qatari could do, and fig trees and goat herding are two that I remember. Frederick told me, ‘they have been dragged out of the stone age in less than twenty years, and the oil wealth has not helped.’

Great cities are a wonder of the world, but they conceal the background facts in at least some cases. Bear with me as I elaborate on this point, eh?

A man freezes to death in Toronto in a bus shelter, said man wearing jeans and a T-shirt. Why do we not simply fix poverty?
Edward Keenan documents the flow of a can of tuna from its donor to the eventual dependent single parent, who needs food bank food in order to pay rent. Why do we not simply fix poverty?
Africa is host to malaria, AIDs and Ebola, and was the crucible for Creutzfeldt-Jakob disease. Ebola response is tragically weak due to astonishingly low doctor/patient ratios. Why do we not simply fix a poverty of health care?

Much of Africa is broken.

Africa is presented to us in the media via the bad stuff, the poverty, disease, suffering, poor health care. That is a biassed view. Africa likely has as many viable tourist cities as any other continent. But we think of Africa as poverty and safaris. Even a safari in Africa brings westerners face to face with bad water and disease risk. (I know this because my current MD has been there, and told me what they risked, and what their native real-work-doers risked. (They all got sick. Very sick.))

The western ‘world’ is presented to us in the media via the good stuff (with the exception of beating the terrorist drum to get more police, imprisonment, and surveillance powers.) There are (or were) Roma camps in France of disgusting, deplorable living conditions. Solution: deport them. There are people sleeping on grates (especially grates over the subway) every night in Toronto. Solution: shelters, if they can get there; apparently one closed and two others opened, and they can find this out on the Internet. (This in last night’s CTV news. Really. As if grate-sleepers have Internet access.)

The forms of poverty here differ somewhat from those in Africa, but they are growing (see ‘Piketty‘ on this website) because that’s how the mathematics of wealth works: Inequality grows itself.

Great governments redistribute wealth; generous, great civilizations accept and want this.

Small-minded governments create tax cuts for the rich, and boondoggles for certain industries ($34 billion per year in hidden subsidies in Canada to  extractors (some foreign) of oil, gas and coal – this number comes from the IMF (International Monetary Fund). I did not make this up.)

Small-minded governments reward huge lobbying businesses, advertise using taxpayer dollars (being done now, here), and mostly get themselves re-elected. Once wealth is unevenly distributed, small-minded governments pay attention to the sources of power and wealth, the keys to continued power.

Yes, we look upon Africa incorrectly. We see some of the sadder parts of the picture.

And, we look upon Canada incorrectly. We brag about the few bright spots, while the whole is headed for catastrophe.
 catastrophe: that’s imho a sensible prediction. When the 99.9% style demonstrations become riots of more poor, unhoused, and unfed, it will be impossible to walk up and down Bay Street safely, even if you are one whose business dominates it.

Anyone who says all is well, is repeating or originating propaganda.

Now for the dumb questions: are we all equally guilty of this? Equally unmoved by inequality? Equally gullible, expecting the good times to continue forever?

Four dumb questions for the Harper Government (Canada, Federal)

Here are the questions:

  1. Is Canada Post smoking cheap dope?
  2. Are tax cuts pretty much all for the rich, and if so, why?
  3. Are aboriginals stalling development of resources, despite law changes gutting conservation and environmental protection? Will they fail?
  4. Do you (Mr. Harper) think we voters are all stupid? or just apathetic?

Canada Post. On TV last night I saw again an advertisement for Canada Post: essentially, go buy stuff online and we’ll deliver it to your door. The ad shows a red cart following a shopper, and delivering a package to the shopper’s front door. (Right away, btw.)

This is not going to be the case for long. Canada Post, after buying a new fleet of neat little delivery trucks, is going to force each and every one of us to walk or trudge to a block of mailboxes. Supposedly parcels will be accessible via a key (in the residents’ envelope slot) that opens a larger box (which will of course be available, even during the Christmas rush, and large enough no matter what is being shipped.)

Once I am forced to pick up my mail from a block of remote mail boxes, I am stopping all junk mail and, more to the point, routing all parcel shipments via competitors to Canada Post. FedEx, UPS, and whatever else is good enough.

They will deliver to my door. They make their living by doing this now.

So, first dumb question: Is Canada Post smoking cheap dope? With this ad in particular?

Tax Cuts.

Tax cuts include income splitting, which only affects high-bracket married-with-children unequal-income families. That’s a tax cut for the rich.

Tax cuts apparently include massive subsidies for oil, gas, and coal extraction companies. See earlier blog entries for more on this ($34 billion annually, according to the IMF, as I recall.)

Tax cuts include refunds for costs such as kids’ sports equipment and disabled-occupant renovations. Such tax cuts assume that a) you paid for the stuff before last December, and b) you will get your refund increase in April or May or so, and c) you need that money but can borrow it for five of six months for free. Not so? Then the refund is a tax cut for the rich.

So second dumb question: are these tax cuts for the rich?

Aboriginals and environmental concerns. In an omnibus budget bill, our government undid some 70 environmental protection laws. This will allow polluting of ‘minor streams and lakes’ to go on without environmental assessments.

However, aboriginal groups (with, apparently, good lobbyists and great lawyers) are finding ways of stalling this, especially with regard to oil and gas extraction and pipelines. Apparently our Supreme Court sometimes agrees with them.

So, the third dumb question, is, will the aboriginal attempt to protect the environment succeed? Although it should, I submit that the Federal Government has the power to change the rules.

((for example, the prostitution law was struck down and Our Government given a specific time limit to put in legally correct legislation. Instead, they installed a law that is different, but does not address the safety issues under which a new law was deemed necessary. This stall tactic will work: it will take a few years for a group of sex workers to create a case and prosecute it, again. After which, Harper’s music sheet probably says, Da Capo al Fine (go back to the start and repeat what we just did.) ))

Given the power to change the rules, will our ruler win in the end?

That’s the third dumb question.

Does our government believe that we voters are stupid or apathetic?

Are they getting away with all of the above?

That’s the fourth dumb question.