Self-reflection

After having written blogs each week throughout the semester I will now conduct a small self evaluation and critical reflection on what I have learned and liked about blog writing. Self-reflection is a valuable tool for it allows seeing both positive and negative aspects of ones work. It is essential in a day to day basis when confronted with business operations and thus an important aspect of “self-improvement” possibilities.

I found it both interesting and influential to carefully analyse different articles related to a single common news story. It allowed me to differentiate between different language styles and the priorities of content and perspectives. I read financial and political news on a daily basis but the fact that this module pushed us further in analysing details, I now can scan over an article and pick up the most useful information quicker. All in all I believe I have learned a lot from “blogging”.

In the world today, every individual is influenced by the media in a way or another. To say otherwise, is a lie. We have seen that different newspapers and journals use different style and therefore different opinions. Each newspaper has its own beliefs and portrays these in its articles, some are left wing, others right wing, and some just neutral in their approach to bring forward a news story. Is it right and/or ethical to give the media such power? Because that’s what it is. The public is let to believe everything the media tells them. The public has no way of differentiating what’s true from what’s false. On the other hand, the media is needed for news to be spread around the world and therefore we rely on them in a certain way.

Although I have enjoyed going through all of these news stories and articles, I have to say that journalism is nothing for me. Who am I to give my opinion about something in public? Yes, I can have an individual opinion, but one should keep it for oneself and not broadcast it all over the world. As stated before, there is a need for the media to be present but what should its limitations be?

This is a very difficult question to answer. The main reason being that there is no way of deciding whom to empower with the rights to broadcast news. I would’ve suggested a governing body over the media but this bring us back to the same problem of having one set group of people in control of what the public gets to see or not so see.

It is with these words that I leave you. For now, farewell.

The ashes rise again

It is time for a no-fly zone again. The Civil Aviation Authority imposed flight restrictions that will shut Heathrow, Gatwick and London City airports from 0100 BST until at least 0700 BST.

The latest dense patch of ash has already disrupted the travel plans of tens of thousands of people, mainly in northern parts of the UK.
Airspace over Northern Ireland was first to close on Saturday, then as the cloud moved south, Manchester closed at lunchtime on Sunday, with Birmingham following suit by the early afternoon.

An article from BBC states Virgin Atlantic president Sir Richard Branson called the closure of Manchester airport "beyond a joke".
"All the test flights by airlines, aircraft and engine manufacturers have shown no evidence that airlines could not continue to fly completely safety," he said.

In another article from Sky News, CAA chief executive Andrew Haines said: "We are all working flat out to keep flying safe whilst minimising disruption from the volcano.

"We face a massive challenge to do this. Firstly because the standard default procedure for aircraft that encounter ash, to avoid it completely, doesn't work in our congested airspace.

"Secondly, the top scientists tell us that we must not simply assume the effects of this volcano will be the same as others elsewhere.

"Its proximity to the UK, the length of time it is continuously erupting and the weather patterns are all exceptional features.

"The answer can only come, therefore, from aircraft manufacturers establishing what level of ash their products can safely tolerate.

"This was agreed at an international aviation conference we held last Thursday, attended by all the leading airline operators (including Virgin and BA) where this approach was welcomed and supported. The manufacturers are co-operating fully and urgently in this task.

"It's the CAA's job to ensure the public is kept safe by ensuring safety decisions are based on scientific and engineering evidence; we will not listen to those who effectively say 'let's suck it and see'."

These two articles clearly show and discuss completely opposite ideas. The BBC article is straight forward and has an offensive tone to it. It clearly states its dissaproval with the flight restrictions. On the other hand, the Sky news article takes a more restrained approach and gives an impression of approval with the flight restrictions.

All in all, I have discussed already a couple of weeks ago, are these flight restrictions really necessary?

There are pros and cons but the underlying fact remains public safety. The only issue agravating the situation is that cancelling flights and operation for a big airliner like BA, this has economical consequences. Nevertheless, I vote for these flight restrictions if that is what keeps us safe, even if the CAA seems a little overprotective.

War on public sector pay

David Cameron, Prime Minister, said that since taking up their new posts, his ministers had been horrified at the spending decisions taken by their predecessors.

"From the large to the small, we are going to take action to stop the very bad decisions that were taken in the dying days of the last Labour government,” he told on the BBC’s Andrew Marr show.

A source told the telegraph that cancelling the pay-outs should be seen as an “emblem” of the new coalition Government’s desire to get spending within the public sector under control.

In deed, there has been growing anger about the level of remuneration in local government – last month it came out that 31 town hall chiefs were paid more than the Prime Minister. The number picking up six-figure salaries rose by 14 per cent last year.

In the same article, Francis Maude, Cabinet Office Minister said it was right that the most highly paid civil servants "play their part" in reducing the public sector pay bill.
He added: "An effective system will reward the best performers and provide the right incentives for all to get the best for the taxpayer,"

An article in the daily mail reports similar statements.

Mr Cameron said: ‘What we’ve seen so far are just individual examples of very bad practice and frankly quite bad behaviour – spending decisions taken in the last year or so of the Labour government that no rational government would have done.
‘We’re going to take action to stop the very bad decisions that were taken in the dying days of the last Labour government.’

Both styles of language declare the same opinion and show signs of appreciation for David Cameron’s decisions.

However, the Guardian expresses different concerns. The article focuses on the future of the British economy. Indirectly agreeing with public sector pay cuts but for different reasons. The necessity of these pay cuts is clearly shown in the article:

The Bank for International Settlements (BIS) conducted a health check on the sovereign debt of countries in the developed West, it concluded: "Since the start of the financial crisis, industrial country public debt levels have increased dramatically. And they are set to continue rising for the foreseeable future."

The BIS adds: "Our projections of public debt ratios lead us to conclude that the path pursued by fiscal authorities in a number of industrial countries is unsustainable. Drastic measures are necessary to check the rapid growth of current and future liabilities of governments and reduce their adverse consequences for long-term growth and monetary stability."

And when the BIS says unsustainable it means unsustainable. Its projections for the UK, for example, show the stock of gross national debt as a proportion of gross domestic products rising ten fold in the next 30 years, from just over 50% now to 500%. Britain, according to the BIS projections, is sitting on a public debt time bomb.

After reading these articles and looking at the situation from different views, I believe David Cameron is definitely on to something. His strong will to rebalance the UK economy is good and he seems to be following the course of action he promised the public.

Terror at Times Square

“We are very lucky!” these are Mayor Michael R. Bloomberg’s words. New Yorkers avoided what could have been a very deadly event.

A crude car bomb of propane, gasoline and fireworks was discovered in a smoking Nissan Pathfinder in the heart of Times Square on Saturday evening, prompting the evacuation of thousands of tourists and theatergoers on a warm and busy night. Although the device had apparently started to detonate, there was no explosion, and early on Sunday the authorities were still seeking a suspect and motive.

This time around I would like the focus on the fact that all articles I have read about this incident, if it is on BBC, the Telegraph, the Daily Mail or even the Wall Street Journal; all expressed the same tone of language. One can correlate this to the idea that they are sending out a message such as: We are in control.

By giving all the information available for the public to see, is something very unusual for the United States, here again we can detect a subconscious flair of we are in control of the situation and will find those responsible. There is a cool air about the way the articles are written; in a rather calm manner considering that this was in fact a serious bomb threat. This reassures the public.

The federal bureau of investigation quickly followed leads and were able to determine a suspect. Authorities traced the suspect to the airport.

Meanwhile, Homeland Security Secretary Janet Napolitano said Customs and Border Protection officials at the airport ordered that the flight be stopped before takeoff. Napolitano said they were able to arrest Shahzad on the plane and turned him over to the FBI -- though she declined to say how he was able to board the flight if he was on the No Fly list.

At the end of the day, no one was hurt; we can categorize this event as a failed terrorist act because this is indeed what this was: a terrorist act. This time around maybe not by any specific terrorist group but a cruel act of violence from one individual nonetheless.

It is argued that this attempt of bombing might be related to the recent South Park cartoon episode which portrayed Prophet Muhammad. Although this act of violence is in no way forgivable since it was meant to harm many, it has to be said that during the harsh times of today, some sort of censorship or restriction should exist for show such as South Park. Provoking the Muslim society is not something we need at the moment and certainly not through means of a vulgar cartoon show.

The "Robin Hood" Tax

This tax is named after James Tobin who is a Nobel Prize-winning economist, it was originally designed to hinder volatile currency trading and also had the potential to help developing nations, but many supporters now say it is one way to ensure that banks do not take excessive risks that could trigger another financial crisis.

The large amounts of money raised by the “Robin Hood” Tax would help protect public services and jobs, as well as fight poverty and tackle climate change.

The IMF has to back the plans for a “Tobin Tax” on international transactions in order to solidify the scheme within the European Union.

A campaign member said: "This is a tax on speculative banking, the kind of gambling that went on that got us into trouble."

He continues: "The banks have been bailed out to the tune of 9 trillion dollars. It's symmetry that the banks should therefore not only make good the damage caused by the economic crisis but should also perpetually become a useful thing in society."

In recent months, although they have similar plans, governments and bankers have been focusing on insuring against future banking crashes instead.

Just last month, the World Economic Forum (WEF) discussed a levy on financial institutions that would be used to help bail out banks in any future crisis. The call was backed by politicians and the International Monetary Fund (IMF) at the WEF's meeting in Davos.

If the Robin Hood Tax is put into place, the tax would not be levied on banks' transactions with their High Street customers. Instead it would only apply to transactions between financial institutions, with different rates applied to different types of transaction - with an average tariff of five pence for every £1,000 traded.

What the campaign is calling for is for countries that levy the tax to keep half the earnings domestically and for the rest to be split 50-50 between poverty reduction and tackling climate change. According to estimates made by the group, the “Robin Hood” tax could raise tens of billions of pounds for the UK, which it says could be used to help cut the public deficit too.

In a letter addressed to the leaders of the UK's political parties, the campaign says: "We would ask you seriously to consider the Robin Hood Tax as that radical new option - a small tax on bankers that would make a huge difference to the UK, to the poorest countries and to our planet.

"Let's turn the crisis for the banks into an opportunity for Britain and the world."

Nevertheless, it is important to state that any plans to implement an international tax would need international backing. These plans have received a less than positive reaction from both the US and the IMF.

Last year at the G20 meeting, the IMF head Dominique Strauss-Kahn, described a tax on financial transactions as "a very old idea that is not really possible today". The UK's British Bankers' Association also questioned the feasibility of the plan. The BBA’s spokesman, Brian Mairs, said it was fatally flawed, "because it requires all of the world's tax jurisdictions to agree to it, all at once. It's inconceivable and impractical at this stage".

Now, from all the articles I have read about the Tobin Tax in the FT, BBC, Telegraph, etc. I can not help but contemplate how naive some governments really are. We are in this mess today because of the banks, is it then really correct to even think of saving banks from future taxes? I don’t think so. There seems to be an unparalleled point of misunderstanding between political parties as well as financial institutions. I personally fully endorse this campaign as I see it as an ultimate crisis solving scheme. Furthermore, governments would have the additional resources to fund poverty and climate change without having to raise income taxes or any of the sort. All the money generated from this tax can only improve our economical positions of the future and I think it would be wise to start with it soon before it is too late to act.

A Hung Parliament?

The British Pound may see an early boost from a final Greek bailout agreement but the currency looks particularly vulnerable ahead of the UK general elections as traders worry about the future of fiscal policy along with uncertainty at the polls.

The third televised contest between the candidates to take up the post of UK prime minister after the general election has come and gone, and while this final round was broadly given to the Conservatives’ David Cameron, the clear winner of the UK’s first experiment with such debate was clearly the Liberal Democrats’ Nick Clegg. The charismatic leader managed to pull his party out of the shadow of its larger competitors and make the election a proper three-horse race, meaning the seemingly predictable downfall of current Labour PM Gordon Brown will not translate into a Tory victory by default. Indeed, the Lib Dems are all but tied with the Conservatives in the latest opinion polls, hinting the election may produce the first hung parliament since 1974 as neither party is able to secure a clear majority.

A hung parliament (also known as a minority parliament or balanced parliament) is a legislature in which no political party has an absolute majority of seats. This situation is normal in many legislatures with proportional representation such as the parliaments of Germany and the Ireland, or in legislatures with strong regional parties; in such legislatures the term 'hung parliament' is rarely used since this is the typical outcome of an election.

This is a worrying prospect for the British Pound. Markets prefer a Conservative victory, hoping Mr. Cameron and co will make good on their promise to aggressively tackle the UK’s soaring budget deficit. The Lib Dems have not inspired such confidence, offering precious little in the way of details on how they would proceed on the matter. In any case, they too can’t hope for an outright majority and the prospect of a divided government incapable of charting a clear course for fiscal policy may prove bad enough to send Sterling lower in the election’s aftermath.

Elsewhere, the economic calendar seems relatively uneventful but risk sentiment may prove to be a factor early in the week, giving the Pound a boost if EU policymakers announce a finalized and expanded Greek bailout as expected over the weekend.

I respectfully disagree with the view in the Financial Times that gilts (debt securities) are higher on expectations of a Conservative win. I reckon their rise has just been an obvious reaction to falling equity markets. Generally, gilts are priced off German bunds, which have been flying as the safe alternative to most other European bonds. Ten year gilts are currently yielding just above 3.8%; they were over 4% a couple of weeks ago. One is almost inclined to short gilts now, but that would be madness ahead of the election result. A clear Conservative win would allow them to get to work on the deficit and the consequences could be so awful for the economy that even 3.8% for 10-years could look like a bargain. This in turn will keep the pound from dropping.

Greece fails, Europe follows?

Europe’s politicians gather together for a colossal rescue package for Greece. The package is worth €110 billion ($145 billion), this is nearly three times the amount which was discussed only three weeks ago. The results so far: riots in the streets of the capital, where three people lost their lives and no clear response of the markets. Not only have yields on short-term Greek bonds soared once again, but other euro members that the plan was supposed to protect are under pressure, with Portugal and Ireland hit particularly hard. Stock markets around the world have slumped as investors fret about the financial stability of a region that makes up almost a quarter of the world economy.

The fear in Europe for now is the contagion spreading from one indebted country to the next, Europeans also fear the breakdown of social order as public-sector jobs are cut and last but not least they fear the ousting of countries from the euro. Are the legitimate fears? If a bail-out which is worth nearly half of Greek GDP fails to command support on the streets of Athens or in the markets, one will agree it is very normal for Europeans to fear the near future.

Although this all points to a failure of the plan, it is incorrect to say so. Europe faces all sorts of social and political problems and violence and riots in Greece do not suffice to conclude that the Greek rescue and the European’s broader strategy for dealing with their debt crisis have failed. It has to be stated that street riots, even violent ones, are a very frequent part of Greek political life. And financial markets do sometimes react too skeptically to rescue strategies.

As the situation evolves, nothing has thus far been set. But an awful lot depends on what Europe’s leaders do now. The new improved Greek rescue plan has less in common with the Geithner plan than with the first Greek rescue, whose inadequacy started the spiral downwards. There is the same shortage of political courage, not just in Greece and other weak euro-zone members, but also in Germany. These need to be dealt with.

Although this large sum has been gathered, investors are unconvinced by the bail-out strategy for three separate main reasons:

· First, they worry that the promised €110 billion will not materialize because of continued political opposition in Germany or because the Greeks will not live up to the austerity promises they have made.

· Second, investors, like German voters, are nervous that, no matter how hard the Greeks try, their country will still be all but bust in three years’ time: the debts are just too big and will have to be rescheduled.

· Third, and most important, they worry that others, especially Ireland, Portugal and Spain, are in uncomfortably similar boats, facing a future of economic stagnation and spiraling debt.

The main priority today is, I believe, for countries like Portugal, Spain or Ireland to prove that although they suffer from some of the same problems, they are not Greece! Portugal, which has a big deficit and low growth, needs to announce a stronger, bolder fiscal package. Both it and Spain need to speed up competitiveness-enhancing structural reforms, especially freeing up their labour markets. At the same time, the rest of the euro zone must do its part to ensure that this huge internal adjustment succeeds. The ECB must prevent an overall slide into deflation. Germany should cut taxes and do more to boost domestic demand.

Furthermore, it is urgent to put a mechanism in place which could supply the euro-zone’s weaker economies with cash if this panic is accelerated. One way would be for them to apply for precautionary funds from the IMF. Euro-zone governments could create inter-governmental credit lines or the European Central Bank could step in, buying government bonds in the secondary market. None of these solutions are costless but any is preferable to the implosion of the euro zone.