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Generational Dynamics Web Log for 26-Aug-2015
26-Aug-15 World View -- Europe increasingly overwhelmed by tsunami of migrants

Web Log - August, 2015

26-Aug-15 World View -- Europe increasingly overwhelmed by tsunami of migrants

Wall Street turns around on Tuesday, goes from boom to bust in one hour

This morning's key headlines from GenerationalDynamics.com

Europe increasingly overwhelmed by tsunami of migrants
Syrian migrants prepare carefully for trip to Europe
China reduces interest rates after new stock market rout
Wall Street turns around on Tuesday, goes from boom to bust in one hour

Europe increasingly overwhelmed by tsunami of migrants

Hundreds of migrants stand in line on a railway track as uniformed police watch on (Athena Pictures)

Hundreds of migrants stand in line on a railway track as uniformed police watch on (Athena Pictures)

There are about 10,000 migrants on the Greece's Aegean Sea island of Lesbos, having arrived from Turkey. There are also migrants on the islands of Chios and Kos. Greece is running a ferry that's takes 2,000 migrants per day from the islands, in a trip that takes 12 hours at sea. In Athens, Greece provides buses to the Macedonia border.

There are now about 3,000 migrants per day traveling along the route from Greece to Macedonia to Serbia to Hungary, which is a Schengen zone country. From there they can travel to wherever they want, but in most cases the desired destination is through Austria to Germany. Germany processed 173,070 asylum applications in 2014, and expects to process 800,000 in 2015, which would add 1% to Germany's population.

The flow of migrants is so large that Germany decided it had no choice but to suspend the "Dublin rules" for Syrian migrants. Under the Dublin Rules, if a migrant reaches Germany and requests asylum, then Germany would not even process the paperwork. Instead, the migrant would be shipped back to the first EU country that the migrant arrived in, usually Italy, Greece or Hungary. With almost 3,000 migrants arriving every day, that would mean shipping 3,000 migrants per day back to Italy, Greece or Hungary for processing, and those countries are already overwhelmed. Under the new rules, Germany will process the paperwork in Germany.

The tsunami of migrants is overwhelming Europe. Every attempt at a fence or other border control is being swept away, and Europe is showing little sign of finding a way to deal with the situation. Telegraph (London) and Daily Mail (London) and AFP and Guardian (London)

Syrian migrants prepare carefully for trip to Europe

Paul Ronzheimer, a journalist for the German newspaper Bild, was interviewed on al-Jazeera on Tuesday. He joined a group of Syrian migrants from Aleppo as they traveled from Turkey to Germany, and outlined what preparations the migrants make for the trip:

They saved money for years and sold many of their possessions to have enough money to make the trip.

However, they don't take all their money with them, since the smugglers will immediately confiscate all they have. They take a small amount to start, leaving the rest with their families. When they arrive in Athens, they use a special arranged code to receive money sent by their families. When they arrive in Zagreb, they do the same.

They are well-equipped with smart phones, and they're in constant contact, chatting with special groups of activists who can help them. When they have to cross a border, the activists tell exactly where the border is open that day, which way to go, which fields to cross, how to avoid the police, and so forth.

Ronzheimer said that the group he was with were well-prepared, but others just travel without advance preparation, and they usually get into trouble with smugglers or the police.

China reduces interest rates after new stock market rout

The People's Bank of China (PBOC) lowered interest rates by 0.25% on Tuesday, to make it easier to borrow money, after the Shanghai Stock Exchange suffered another rout, falling 7.6%, falling a total of 22% in four days since August 19.

Presumably the purpose of the move was to allow people to borrow money to invest in the stock market, in the hope of pushing up the stock market. However, some analysts criticized the move, because the stock market bubble was caused by stock purchases using borrowed money, and lowering interest rates makes the situation worse.

China's debts have increased by almost $21 trillion since 2007, and total debt is now 282% of GDP. No big country has avoided suffering a big crash, sooner or later, under these conditions. Bloomberg and Bloomberg

Wall Street turns around on Tuesday, goes from boom to bust in one hour

Wall Street stocks seemed finally to be bouncing back upward on Tuesday from the 588-point rout in the Dow Jones Industrial Average on Monday. China's interest rate cut seemed to encourage buyers, and at one point the DJIA was up 442 points.

But starting at 3 pm, in the last hour before close, the stock market plummeted, with the DJIA ending the day losing 205 points. This was the sixth day of a losing streak on Wall Street.

Each day that passes in this way looks more and more of the prelude to a major crash. As I wrote yesterday, I expected Wall Street to bounce up on Tuesday, and I expected it to stay up through the close. ( "25-Aug-15 World View -- What to expect after Monday's global stock selloff")

So I was as surprised as anyone when stock prices plummeted in the final hour.

However, as I wrote yesterday, the overall picture to expect a lot of volatility, with possible huge gains one day and huge losses the next day. With the S&P 500 price/earnings ratio (stock valuations) at historic highs, this will continue until a panic occurs. USA Today

(Comments: For reader comments, questions and discussion, see the 26-Aug-15 World View -- Europe increasingly overwhelmed by tsunami of migrants thread of the Generational Dynamics forum. Comments may be posted anonymously.) (26-Aug-2015) Permanent Link
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Generational Dynamics Web Log for 26-Aug-2015 26-Aug-15 World View -- Europe increasingly overwhelmed by tsunami of migrants

Europe increasingly overwhelmed by tsunami of migrants

Syrian migrants prepare carefully for trip to Europe

China reduces interest rates after new stock market rout

Wall Street turns around on Tuesday, goes from boom to bust in one hour

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Generational Dynamics Web Log for 26-Aug-2015
26-Aug-15 World View -- Europe increasingly overwhelmed by tsunami of migrants