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Generational Dynamics Web Log for 22-Apr-2010
22-Apr-10 News -- Controversy over Arizona immigration law

Web Log - April, 2010

22-Apr-10 News -- Controversy over Arizona immigration law

Greece's financial problems are spreading around Europe

Proposed Arizona immigration law sparks international controversity

Arizona Governor Jan Brewer is almost certain to a tough immigration bill, according to the Phoenix Business Journal. The law expands police powers to arrest illegal immigrants, and requires the police to check the papers of any who seems suspicious.

The law is motivated by recent crimes perpetrated by illegal immigrants, including the murder of a rancher. But opponents, including Hispanic groups and the Catholic Church, say that the documentation requirements for immigrants smacks of a police state.

According to the article, Brewer will almost certainly sign the bill because a veto would mean that she would probably lose the Republican primary election.

The controversy is taking on national and even international importance.

Mexico's Foreign Relations Department said that the proposed law "could have potentially serious effects on the civil rights" of Mexican nationals.

If the law is signed, it's possible that either the Obama administration or a federal court will intervene,

From the point of view of Generational Dynamics, this kind of xenophobia is typical of a generational Crisis era. We see it targeting the Muslims in Europe and the Christians in India. During a generational Crisis era, this kind of xenophobia grows until it results in war.

Greece's problems spread to Spain and Portgual

I've noticed that many commentators are talking as if Greece has already been bailed out, and it's just a matter of signing a few papers to give Greece its 45 billion euro bailout package from the EU and the IMF.

However, nothing could be further from the truth. Any proposed aid package would have to be reviewed by the German Bundestag (parliament) and Verfassungsgericht (constitutional court), and will face other legal challenges, before any money can be delivered to Greece, and it's altogether possible that the legal challenges will succeed.

Almost every day, Greece's financial situation plummets deeper and deeper into a hole. On Wednesday, according to Bloomberg, credit default swap (CDS) prices -- the cost of insuring Greek debt -- surged to a fresh record of 495, meaning that it costs 495,000 euros to insure 10 million euros of Greek debt for a year. Typical CDS prices before the financial crisis were around 20-30.

Furthermore the yield (interest rate) on Greek 10-year bonds spiked to 8.29%. It was just a couple of weeks ago that Greek officials were alarmed that it had risen above 6%. Interest rates seem to go up by 20-30 basis points almost every day.

Of even greater concern to officials is that it appears that the Greece problem is spreading to other European banks, according to Bloomberg. European banks in general were affected, but Spanish and Portuguese banks led the way with CDS prices for their banks surging to 265 and 269.5 for the respective countries.

This comes on top of a report that Spanish banks' bad loans rose by $2.8 billion in February, to a 14 year high, according to Reuters.

From the point of view of Generational Dynamics, the global financial system is headed for a deflationary crash and a global crisis with certainty. It's impossible to predict with certainty what will trigger that crisis, but more and more each day it looks like it will begin in Europe.

Additional Links

The Fabulous Fab -- referring to Fabrice Tourre, the Goldman Sachs VP whom the SEC accused of fraud along with Goldman Sachs itself -- has agreed to testify in the Senate. That will be a fun day. Bloomberg

With Japan experiencing deflation almost continuously for 20 years, Japanese politicians are demanding that the Bank of Japan adopt a mandatory inflation target, so that inflation will end. The BOJ says that inflation targeting does not work, which is true. Reuters

Mensa Selects Its Favorite Brainy Games of 2010. Wired

For those who, like me, experience sleep apnea, you might try rebalancing your circadian rhythms. NY Times

News you can use: A survey of 1,500 women by Phone 4u finds that men who have an Apple iPhone are more attractive to women than those who do not. "If he has an iPhone then he's obviously intelligent and well-off." Fox Business

For years I've been writing about how Iraq is in a generational Awakening era, like America in the 1960s. Now here's another sign: The art community is blossoming in Baghdad, just like it did in Greenwich Village and Haight Ashbury. Spiegel

Ukraine's new pro-Russian government has signed a deal with Russia that gives the Russians 25 years of access to the Sevastopol naval base on the Black Sea, in exchange for a 30% discount on natural gas. This appears to end a bitter feud that intensified during the Russian war with Georgia, but opposition pro-Western politicians in Ukraine are accusing the government of treason. CNN

(Comments: For reader comments, questions and discussion, see the 22-Apr-10 News -- Controversy over Arizona immigration law thread of the Generational Dynamics forum. Comments may be posted anonymously.) (22-Apr-2010) Permanent Link
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Generational Dynamics Web Log for 22-Apr-2010 22-Apr-10 News -- Controversy over Arizona immigration law

Proposed Arizona immigration law sparks international controversity

Greece's problems spread to Spain and Portgual

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Generational Dynamics Web Log for 22-Apr-2010
22-Apr-10 News -- Controversy over Arizona immigration law