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Generational Dynamics Web Log for 10-Nov-2011
10-Nov-11 World View -- Pandemonium in Europe shocks world markets

Web Log - November, 2011

10-Nov-11 World View -- Pandemonium in Europe shocks world markets

Protests in Russia unify ethnic Russians against the North Caucasus

This morning's key headlines from GenerationalDynamics.com.

* Greece's Papandreou says his successor will be .........
* Italy unravels in bond panic
* Pandemonium in Europe shocks world markets
* Chaotic European politics raises fears of a collapse of the euro zone
* Xenophobia towards Fulanis in Ghana becomes extreme
* The 'Occupy Wall Street' protests began in Tahrir Square
* Protests in Russia unify ethnic Russians against the North Caucasus

Greece's Papandreou says his successor will be .........

Socialist party leader George Papandreou and conservative New Democracy party leader Antonis Samaras were college roommates, but are now bitter political enemies (EPA)

Socialist party leader George Papandreou and conservative New Democracy party leader Antonis Samaras were college roommates, but are now bitter political enemies (EPA)

As if the European scene needed any more farce, Greece's Prime Minister George Papandreou began what appeared to be a resignation speech to the nation on Wednesday. He signaled the "beginning of a new political mentality, a new political culture":

"Today we leave aside our differences [with] a common effort to ensure the country moves forward, not only to remain part of the eurozone but also to emerge from the crisis. [The interim government would] justify the sacrifices made by the Greek people over the past two years. ...
I never put my position above the national good. For me, Greece is above everything. Wherever I go, I will carry the Greek flag in my heart."

He also said that he would do everything he could to support the new prime minister and the new government. But he didn't resign, and he didn't indicate who his successor will be, because of bitter disagreements with the opposition. Greece still hasn't received the next €8 billion bailout payment, which was to have been provided right about now, in time to make the next debt payment. But European officials have conditioned it on formation of a new government that passes the committed austerity measures, and every day's delay in forming a new government also delays the bailout payment. Kathimerini

Italy unravels in bond panic

What appears to be a full-fledged bond panic began on Wednesday, as yields (interest rates) on Italy's bonds went parabolic, going well above 7% to 7.25%. Italy has €1.9 trillion in debt, with something like €77 billion scheduled to roll over this year, and €200 billion next year. Having to pay 7.25% interest on this new debt would move Italy into a vicious downward spiral. Even worse, the interest rate appears poised to continue increasing, perhaps to 10% and beyond. That's what happened to Greece, Ireland and Portugal. Here's a comparison of what happened to Greece last year with what's happening to Italy right now:

Greece's bond yield went above 7% in April of last year, and kept going up. Now the same thing is happening to Italy's bonds

Greece's bond yield went above 7% in April of last year, and kept going up. Now the same thing is happening to Italy's bonds

When Greece's bond yields began to exceed 7% last year, I wrote that a major panic was in progress. As you can see, Greece's bond yields then ran up above 12%, before they were brought down temporarily by the shock and awe bailout package announced on May 9, after which they continued to rise. Wednesday's surge to 7.25% may indicate that a major new panic is in progress. Bloomberg

Pandemonium in Europe shocks world markets

Wall Street stocks fell 3-4% on Wednesday, as investors realized that Italy is too big to fail but also too big to bail, and yet was failing anyway. There's really only one proposal on the table that following the "Kick the Can Principle," and that's to have the European Central Bank (ECB) "print money" and use it to purchase massive amounts of Italian bonds, enough to bring the yields down. There are just a few problems with this idea -- the Germans are against it, the ECB is against it, and it violates existing eurozone treaties. Even so, it's on the table. Guardian

Chaotic European politics raises fears of a collapse of the euro zone

French and Germany officials have been holding discussions for a split of the eurozone, even though some people believe that this move would bring forward the nationalistic hatreds that led to World War II. Italy's Prime Minister Silvio Berlusconi said he would step down, but he insisted on new elections, leaving both Italy and Greece facing long periods of political instability, at a time when the entire European economy is deteriorating into chaos. Even with Berlusconi gone, there's no credible belief that his replacement, whoever that may be, will be able to solve Italy's problems any better than he did. Reuters

Xenophobia towards Fulanis in Ghana becomes extreme

The Agogo youth protest over the Fulani occupation of their land

The Agogo youth protest over the Fulani occupation of their land

Although they're ethnically similar, and share a common religion (Islam), tension is mounting between the residents of Ghana and the nomadic Fulanis in the city of Agogo. The Fulani culture is one of herding cattle and trading, and this requires cattle herds to travel over residents' land. This was even an issue in America in the 1800s, when the cowboys complained that the farmers were building too many fences, and the farmers were complaining that the cowboys's herds were destroying their crops. This was a theme of the Broadway show Oklahoma!. In Agogo, the Fulanis and their herds are being forced off of the lands in one region, but they have no place to go because no one wants them on their land. This has resulted in extreme xenophobic accusations of murder, rape and inhuman treatment. Joy Online (Agopo) and Citi FM Online

The 'Occupy Wall Street' protests began in Tahrir Square

One effect that has inspired little comment has been the spread of the "Arab spring" protests to the West. Western media largely report the Occupy wall Street protest as the inspiration for other protest across the world. But this new form of protest took the ancient route out of the Arab world, through Spain. Inspiring the young Spanish Indignados to occupy squares in cities across their country, before moving across the Atlantic to America. There is little, if anything, new in the "Occupy" protests that was not already present in Tahrir Square in Cairo. Asia Times

Protests in Russia unify ethnic Russians against the North Caucasus

National Unity Day in Russia, on November 4, brought formerly opposed protest groups together on a single issue: to demand an end to the government’s financing of the North Caucasus. Tens of thousands of protesters from different groups -- the nationalist Just Russia party, democratic activists, the Communist party, and others -- protested in cities across Russia, with slogans such as "Russia for Russians" and "Stop Feeding the Caucasus." The level of xenophobia between ethnic (Orthodox Christian) Russians and (Muslim) Caucasians has been surging. The Russian government has been pouring money into the North Caucasus in an attempt to quell the unrest, as the 2014 Olympics games in Sochi in the North Caucasus approach. Jamestown

(Comments: For reader comments, questions and discussion, see the 10-Nov-11 World View -- Pandemonium in Europe shocks world markets thread of the Generational Dynamics forum. Comments may be posted anonymously.) (10-Nov-2011) Permanent Link
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Generational Dynamics Web Log for 10-Nov-2011 10-Nov-11 World View -- Pandemonium in Europe shocks world markets

Greece's Papandreou says his successor will be .........

Italy unravels in bond panic

Pandemonium in Europe shocks world markets

Chaotic European politics raises fears of a collapse of the euro zone

Xenophobia towards Fulanis in Ghana becomes extreme

The 'Occupy Wall Street' protests began in Tahrir Square

Protests in Russia unify ethnic Russians against the North Caucasus

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Generational Dynamics Web Log for 10-Nov-2011
10-Nov-11 World View -- Pandemonium in Europe shocks world markets