Na Hora
Faltam cinco dias para mais uma grande aventura.
Há para já uma alteração por motivos logisticos no percurso!
No lugar das Virtudes, vamos direitos ao Cartaxo, atravessando a quinta da cerca e retomando a EN3 em Cruz do Campo. Durante a travessia da Quinta da Cerca estaremos acompanhados por elementos da protecção Civil.A comitiva de apoio (logistico, abastecimentos, acompanhantes etc,) estarão nos locais de chegada e partida (em baixo indicados) meia hora antes dos atletas chegarem.
A partida será às 5 horas da manhã do dia 3 de Maio de 2008
1 - Expo - Vialonga
2 - Vialonga - Vila Franca de Xira (a paragem será efectuada no parque ao lado da praça de touros)
3- Vila Franca de Xira - Vila Nova da Rainha (no jardim à entrada de Vila Nova da Rainha)
4- Vila Nova da Rainha - Lugar das Virtudes Acompanhamento dos Bombeiros(junto ao Convento das Virtudes)
5 - Lugar das Virtudes/CartaxoAcompanhamento da Protecção Civil na Quinta da Cerca(jardim do Cartaxo)
6 - Cartaxo - Santarém (largo do Liceu, em direcção da estrada militar, que passa junto à escola prática de infantaria)
7 - Santarém - Monsanto(entrada de Monsanto)
8 - Monsanto - Minde (entrada de Minde)
9 - Minde - Fátima
Monday, April 28, 2008
Food or fuel? The policy choice becomes agonising
In 1959, after years of lobbying from Texas oil men, President Dwight Eisenhower imposed a quota on US crude oil imports. The idea of the world’s biggest oil importer putting up barriers to keep out foreign crude now seems ludicrous. With fuel shortages looming, the quotas were abandoned by Richard Nixon in spring 1973.
Yet the arguments marshalled in support of the quotas are all too familiar. Protecting the domestic industry was vital to national security, the oil men said: America needed to invest in production capacity in case foreign supplies were cut off.
Today, the US ethanol industry is running its campaign out of the same playbook: there is a lot of talk about energy security and producers are protected by a 54 cents a gallon import tariff. In the European Union, the focus is more on the supposed environmental impact, but the results are similar: the industry is also protected by a tariff and further import restrictions are being talked about in Brussels.
The combined crisis of food prices soaring as oil reached almost $120 a barrel this week should be the decisive signal that those policies are no longer tenable.
Biofuels such as ethanol are not the only reason, or even the main reason, that food prices are rising. The International Monetary Fund thinks the use of crops such as corn for biofuels accounts for only about 20 per cent of the rise in prices over the past couple of years; other estimates suggest the effect is even smaller.
But it is clear we have moved into a new era, in which food prices and fuel prices are tied more closely than ever before. That realisation has led some environmental groups – among them those, such as Friends of the Earth, who were among biofuels’ biggest cheerleaders only a few years ago – to urge policymakers to stop the growth of biofuels.
Some politicians, with Gordon Brown, the UK prime minister, in the vanguard, have responded to these concerns by calling for a rethink of biofuels policy. Targets for the EU to meet 10 per cent of its fuel demand from biofuels by 2020 and for the US to have 36bn gallons of “renewable” fuels in its consumption by 2022 now look at risk.
Yet putting a brake on the expansion of biofuels is not an easy way out. At $120, the oil price has almost doubled in the past year. It is an extra problem that a fragile world economy really does not need, and abandoning biofuels would make it worse.
High oil prices are a sign that the balance of supply and demand is very tight. Policymakers can help curb demand: the new fuel economy standards for cars in the US will be a step in the right direction, although their effect is likely to be modest. Higher fuel taxes would be better: the call from John McCain, the Republican presidential candidate, for the federal petrol tax to be suspended over the summer is entirely counterproductive.
Changing demand patterns takes time, however, and while the world gets used to a permanently higher level of energy prices, there is a need for additional supplies.
Biofuels last year contributed about 1.3 per cent of world oil supplies: a small proportion, but still more than Indonesia, one of the earliest members of Opec, the oil producers’ cartel. Over the next few years, their contribution as a share of the increase in oil supplies is expected to be much greater. If that contribution were lost, the supply-demand balance would be even tighter and the oil price even higher.
The effect of cutting biofuels production could be to make food inflation even worse: higher oil prices push up the prices of fertiliser and transport, some of the biggest components of agricultural costs.
It seems policymakers are damned if they do back biofuels, and damned if they do not.
The deus ex machina favoured by many politicians, especially in the US, is “second-generation” biofuels, such as cellulosic ethanol, which can be produced from straw or other plant waste and so do not compete with food supplies.
The pious declarations of support for cellulosic ethanol amount to pure wishful thinking, however: it is nowhere in large-scale production. There is a lot of corporate and government-supported research and development under way, but even supporters of cellulosic ethanol reckon commercial viability could be five years off. Cynics say it always will be.
There is a solution, however: the US and Europe can open their markets to more Brazilian ethanol made from sugar cane. Brazil has the potential for huge growth in ethanol production on land today used as pasture, where the impact of expansion on either food supply or deforestation would be small.
Brazilian ethanol is not the whole answer, but it can help, and other low and middle-income countries could with the right support also develop biofuels industries in ways that need not necessarily compete with food supplies.
Having opened the floodgates to foreign oil, Nixon had a change of heart after the Arab oil embargo. By the end of 1973, he was evoking the spirit of the moon landings and the Manhattan Project as he called for the US to make itself self-sufficient in energy by the end of the decade.
That bold initiative failed, of course; as all attempts at energy independence are doomed. If there is one good thing that can come out of the food and fuel crisis, it should be the recognition of that reality.
Published: April 25 2008
The writer is the FT’s energy editor
Copyright The Financial Times Limited 2008
Yet the arguments marshalled in support of the quotas are all too familiar. Protecting the domestic industry was vital to national security, the oil men said: America needed to invest in production capacity in case foreign supplies were cut off.
Today, the US ethanol industry is running its campaign out of the same playbook: there is a lot of talk about energy security and producers are protected by a 54 cents a gallon import tariff. In the European Union, the focus is more on the supposed environmental impact, but the results are similar: the industry is also protected by a tariff and further import restrictions are being talked about in Brussels.
The combined crisis of food prices soaring as oil reached almost $120 a barrel this week should be the decisive signal that those policies are no longer tenable.
Biofuels such as ethanol are not the only reason, or even the main reason, that food prices are rising. The International Monetary Fund thinks the use of crops such as corn for biofuels accounts for only about 20 per cent of the rise in prices over the past couple of years; other estimates suggest the effect is even smaller.
But it is clear we have moved into a new era, in which food prices and fuel prices are tied more closely than ever before. That realisation has led some environmental groups – among them those, such as Friends of the Earth, who were among biofuels’ biggest cheerleaders only a few years ago – to urge policymakers to stop the growth of biofuels.
Some politicians, with Gordon Brown, the UK prime minister, in the vanguard, have responded to these concerns by calling for a rethink of biofuels policy. Targets for the EU to meet 10 per cent of its fuel demand from biofuels by 2020 and for the US to have 36bn gallons of “renewable” fuels in its consumption by 2022 now look at risk.
Yet putting a brake on the expansion of biofuels is not an easy way out. At $120, the oil price has almost doubled in the past year. It is an extra problem that a fragile world economy really does not need, and abandoning biofuels would make it worse.
High oil prices are a sign that the balance of supply and demand is very tight. Policymakers can help curb demand: the new fuel economy standards for cars in the US will be a step in the right direction, although their effect is likely to be modest. Higher fuel taxes would be better: the call from John McCain, the Republican presidential candidate, for the federal petrol tax to be suspended over the summer is entirely counterproductive.
Changing demand patterns takes time, however, and while the world gets used to a permanently higher level of energy prices, there is a need for additional supplies.
Biofuels last year contributed about 1.3 per cent of world oil supplies: a small proportion, but still more than Indonesia, one of the earliest members of Opec, the oil producers’ cartel. Over the next few years, their contribution as a share of the increase in oil supplies is expected to be much greater. If that contribution were lost, the supply-demand balance would be even tighter and the oil price even higher.
The effect of cutting biofuels production could be to make food inflation even worse: higher oil prices push up the prices of fertiliser and transport, some of the biggest components of agricultural costs.
It seems policymakers are damned if they do back biofuels, and damned if they do not.
The deus ex machina favoured by many politicians, especially in the US, is “second-generation” biofuels, such as cellulosic ethanol, which can be produced from straw or other plant waste and so do not compete with food supplies.
The pious declarations of support for cellulosic ethanol amount to pure wishful thinking, however: it is nowhere in large-scale production. There is a lot of corporate and government-supported research and development under way, but even supporters of cellulosic ethanol reckon commercial viability could be five years off. Cynics say it always will be.
There is a solution, however: the US and Europe can open their markets to more Brazilian ethanol made from sugar cane. Brazil has the potential for huge growth in ethanol production on land today used as pasture, where the impact of expansion on either food supply or deforestation would be small.
Brazilian ethanol is not the whole answer, but it can help, and other low and middle-income countries could with the right support also develop biofuels industries in ways that need not necessarily compete with food supplies.
Having opened the floodgates to foreign oil, Nixon had a change of heart after the Arab oil embargo. By the end of 1973, he was evoking the spirit of the moon landings and the Manhattan Project as he called for the US to make itself self-sufficient in energy by the end of the decade.
That bold initiative failed, of course; as all attempts at energy independence are doomed. If there is one good thing that can come out of the food and fuel crisis, it should be the recognition of that reality.
Published: April 25 2008
The writer is the FT’s energy editor
Copyright The Financial Times Limited 2008
Friday, April 25, 2008
25th April 1974
A day to remember, forever!
This day is so important in my life that I can remember exactly what happened on that day!
What happened after, the excesses, the failures, ..., is another matter!
This day is so important in my life that I can remember exactly what happened on that day!
What happened after, the excesses, the failures, ..., is another matter!
Wednesday, April 23, 2008
World Book Day
Gutenberg´s Bible 
"To a God Unknown"
Ancient pagan beliefs, the great Greek epics, and the Bible all inform this extraordinary novel, which occupied Steinbeck for more than five difficult years. While fulfilling his dead father's dream of creating a prosperous farm in California, Joseph Wayne comes to believe that a magnificent tree on the farm embodies his father's spirit. His brothers and their families share in Joseph's prosperity, and the farm flourishes—until one brother, frightened by Joseph's pagan belief, kills the tree, allowing disease and famine to descend on the farm. Set in familiar Steinbeck country, To a God Unknown is a mystical tale, exploring one man's attempt to control the forces of nature and, ultimately, to understand the ways of God and the forces of the unconscious within.
It was one of the books that left a mark in me! I was thirteen, I think, when I read it. Joseph Wayne, the Tree, the scene with the bull. The relationship that we can find between the man and the land is so rude/violent/tough/cruel in this book, we almost can feel everything. It´s so scary!
The new face of hunger
Global food shortages have taken everyone by surprise. What is to be done?
SAMAKE BAKARY sells rice from wooden basins at Abobote market in the northern suburbs of Abidjan in Côte d'Ivoire. He points to a bowl of broken Thai rice which, at 400 CFA francs (roughly $1) per kilogram, is the most popular variety. On a good day he used to sell 150 kilos. Now he is lucky to sell half that. “People ask the price and go away without buying anything,” he complains. In early April they went away and rioted: two days of violence persuaded the government to postpone planned elections.
“World agriculture has entered a new, unsustainable and politically risky period,” says Joachim von Braun, the head of the International Food Policy Research Institute (IFPRI) in Washington, DC. To prove it, food riots have erupted in countries all along the equator. In Haiti, protesters chanting “We're hungry” forced the prime minister to resign; 24 people were killed in riots in Cameroon; Egypt's president ordered the army to start baking bread; the Philippines made hoarding rice punishable by life imprisonment. “It's an explosive situation and threatens political stability,” worries Jean-Louis Billon, president of Côte d'Ivoire's chamber of commerce.
Last year wheat prices rose 77% and rice 16% (see chart 1). These were some of the sharpest rises in food prices ever. But this year the speed of change has accelerated. Since January, rice prices have soared 141%; the price of one variety of wheat shot up 25% in a day. Some 40km outside Abidjan, Mariam Kone, who grows sweet potatoes, okra and maize but feeds her family on imported rice, laments: “Rice is very expensive, but we don't know why.”
The prices mainly reflect changes in demand—not problems of supply, such as harvest failure. The changes include the gentle upward pressure from people in China and India eating more grain and meat as they grow rich and the sudden, voracious appetites of western biofuels programmes, which convert cereals into fuel. This year the share of the maize (corn) crop going into ethanol in America has risen and the European Union is implementing its own biofuels targets. To make matters worse, more febrile behaviour seems to be influencing markets: export quotas by large grain producers, rumours of panic-buying by grain importers, money from hedge funds looking for new markets.
Such shifts have not been matched by comparable changes on the farm. This is partly because they cannot be: farmers always take a while to respond. It is also because governments have softened the impact of price rises on domestic markets, muffling the signals that would otherwise have encouraged farmers to grow more food. Of 58 countries whose reactions are tracked by the World Bank, 48 have imposed price controls, consumer subsidies, export restrictions or lower tariffs.
But the food scare of 2008, severe as it is, is only a symptom of a broader problem. The surge in food prices has ended 30 years in which food was cheap, farming was subsidised in rich countries and international food markets were wildly distorted. Eventually, no doubt, farmers will respond to higher prices by growing more and a new equilibrium will be established. If all goes well, food will be affordable again without the subsidies, dumping and distortions of the earlier period. But at the moment, agriculture has been caught in limbo. The era of cheap food is over. The transition to a new equilibrium is proving costlier, more prolonged and much more painful than anyone had expected.
“We are the canary in the mine,” says Josette Sheeran, the head of the UN's World Food Programme, the largest distributor of food aid. Usually, a food crisis is clear and localised. The harvest fails, often because of war or strife, and the burden in the affected region falls heavily on the poorest. This crisis is different. It is occurring in many countries simultaneously, the first time that has happened since the early 1970s. And it is affecting people not usually hit by famines. “For the middle classes,” says Ms Sheeran, “it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster.” The poorest are selling their animals, tools, the tin roof over their heads—making recovery, when it comes, much harder.
Because the problem is not yet reflected in national statistics, its scale is hard to judge. The effect on the poor will depend on whether they are net buyers of food or net sellers (see article); for some net buyers, the price rises may be enough to turn them into sellers. But by almost any measure, the human suffering is likely to be vast. In El Salvador the poor are eating only half as much food as they were a year ago. Afghans are now spending half their income on food, up from a tenth in 2006.
On a conservative estimate, food-price rises may reduce the spending power of the urban poor and country people who buy their own food by 20% (in some regions, prices are rising by far more). Just over 1 billion people live on $1 a day, the benchmark of absolute poverty; 1.5 billion live on $1 to $2 a day. Bob Zoellick, the president of the World Bank, reckons that food inflation could push at least 100m people into poverty, wiping out all the gains the poorest billion have made during almost a decade of economic growth.
Small is fairly beautiful
In the short run, humanitarian aid, social-protection programmes and trade policies will determine how well the world copes with these problems. But in the medium term the question is different: where does the world get more food from? If the extra supplies come mainly from large farmers in America, Europe and other big producers, then the new equilibrium may end up looking much like the old one, with world food depending on a small number of suppliers and—possibly—trade distortions and food dumping. So far, farmers in rich countries have indeed responded. America's winter wheat plantings are up 4% and the spring-sown area is likely to rise more. The Food and Agriculture Organisation forecasts that the wheat harvest in the European Union will rise 13%.
Ideally, a big part of the supply response would come from the world's 450m smallholders in developing countries, people who farm just a few acres. There are three reasons why this would be desirable. First, it would reduce poverty: three-quarters of those making do on $1 a day live in the countryside and depend on the health of smallholder farming. Next, it might help the environment: those smallholders manage a disproportionate share of the world's water and vegetation cover, so raising their productivity on existing land would be environmentally friendlier than cutting down the rainforest. And it should be efficient: in terms of returns on investment, it would be easier to boost grain yields in Africa from two tonnes per hectare to four than it would be to raise yields in Europe from eight tonnes to ten. The opportunities are greater and the law of diminishing returns has not set in.
Unfortunately, no smallholder bonanza is yet happening. In parts of east Africa, farmers are cutting back on the area planted, mostly because they cannot afford fertilisers (driven by oil, fertiliser prices have soared, too). This reaction is not universal. India is forecasting a record cereal harvest; South African planting is up 8% this year. Still, some anecdotal evidence, plus the general increase in food prices, suggests that smallholders are not responding enough. “In a perfect world,” says a recent IFPRI report, “the response to higher prices is higher output. In the real world, however, this isn't always the case.” Farming in emerging markets is riddled with market failures and does not react to price signals as other businesses do.
This is true to a certain extent of farming in general. If you own a toy factory, or an oilfield, and the price of toys or oil rises, you run the factory night and day, or turn the taps full on. But it always takes a season to grow more food, which is why farm prices everywhere tend to be “sticky”: a 10% increase in prices leads to a 1% increase in output. But the food crisis of 2008 suggests farm prices in developing countries may be stickier than that.
The quickest way to increase your crop is to plant more. But in the short run there is only a limited amount of fallow land easily available. (The substantial unused acreage in Brazil and Russia will take a decade or so to get ready.) For some crops—notably rice in East Asia—the amount of good, productive land is actually falling, buried under the concrete of expanding cities. In other words, food increases now need to come mainly from higher yields.
Yields cannot be switched on and off like a tap. Spreading extra fertiliser or buying new machinery helps. But higher yields also need better irrigation and fancier seeds. The time lag between dreaming up a new seed and growing it commercially in the field is ten to 15 years, says Bob Zeigler of the International Rice Research Institute (IRRI) in the Philippines. Even if a farmer wanted to plant something more productive this year, and could afford to, he could not—unless research work had been going on for years.
It has not. Most agricultural research in developing countries is financed by governments. In the 1980s, governments started to reduce green-revolutionary spending, either out of complacency (believing the problem of food had been licked), or because they preferred to involve the private sector. But many of the private firms brought in to replace state researchers turned out to be rent-seeking monopolists. And in the 1980s and 1990s huge farm surpluses from the rich world were being dumped on markets, depressing prices and returns on investment. Spending on farming as a share of total public spending in developing countries fell by half between 1980 and 2004.
This decline has had a slow, inevitable impact. Creating a new seed is a bit like designing a flu vaccine: you need to keep updating it, or pests and disease will negate its effectiveness. When the rice variety IR8 was introduced in 1966, it produced almost ten tonnes per hectare; now it yields barely seven. In developing countries between the 1960s and 1980s, yields of the main cereal crops increased by 3-6% a year. Now annual growth is down to 1-2%, below the increase in demand (see chart 2). “We're paying the price for 15 years of neglect,” says Mr Zeigler.
Alterations in the structure of farming have exacerbated the effects of underinvestment. Farming is just one part of a food chain that stretches from fertiliser and seed
companies at one end to supermarkets at the other. In the past, the end of the chain nearest consumers was less important. Food policy meant improving links between farmers and suppliers. The Green Revolution of the 1960s, for example, provided new seeds and subsidised fertilisers. Malawi is doing something similar now. But over the past decade, the other end of the chain has come to matter more. The main reason why Kenyan and Ethiopian farmers planted less this year was not just that fertilisers were expensive, but that farmers could not get credit to finance purchases. Supermarkets are also more important to farmers than they used to be, accounting for half or more of food sales, even in many developing countries.
Success in patches
In theory, the growing importance of traders and supermarkets ought to make farmers more responsive to changes in prices and consumer tastes. In some places, that is the case. But supermarkets need uniform quality, minimum large quantities and high standards of hygiene, which the average smallholder in a poor country is ill equipped to provide. So traders and supermarkets may benefit commercial farmers more than smallholders.
To make matters worse, smallholdings are fragmenting in many countries. Because of population growth and the loss of farmland, the average farm size in China and Bangladesh has fallen from about 1.5 hectares in the 1970s to barely 0.5 hectares now; in Ethiopia and Malawi, it fell from 1.2 hectares to 0.8 in the 1990s. By and large, the smaller the farm, the greater the burden of the cost of doing business with big retailers. Smaller smallholders are also at a disadvantage in getting loans, new seeds and other innovations on which higher yields depend.
Reuters
Such bottlenecks and market failures make it harder for smallholders to respond to higher prices, even without the multiple distortions that governments also introduce into world food markets. They mean the transition to a new equilibrium will be prolonged and painful. But they do not mean it will not happen. Lennart Båge, the head of the International Fund for Agricultural Development, a UN agency in Rome, argues that if farmers can keep the higher prices, they will overcome the problems that beset them. As he points out, India feeds 17% of the world's people on less than 5% of the world's water and 3% of its farmland—and, along with China, is seeing its cereal crop rise this year. Similar success stories are cropping up, in patches.
Despite East Africa's problems, Ethiopia this week opened its own commodity exchange, a rare thing on the continent, in an attempt to improve the markets that connect farmers and traders. The spread of mobile phones also relays market information more widely. In landlocked Malawi, it costs almost as much to ship maize to and from world markets as it does to grow it locally, so Malawian farmers have found it hard to export their surplus even with prices high. But partly because of the political disaster of Zimbabwe, regional markets are now springing up out of nowhere in southern Africa—and Malawi's farmers are selling there.
Moreover, technological improvements are still pushing through the neglected soil. Mr Zeigler reckons IRRI has enough tinkerings in the pipeline to increase yields by one or two tonnes a hectare. And if European countries relax their hostility to genetically modified organisms, crop scientists could do things—such as redesigning photosynthesis in plants—which could boost yields 50% or more. A burden to afford
Between November 2007 and February 2008, rice exports from Thailand (the world's biggest exporter) were running at 1m tonnes a month—an unprecedented bonanza. But for even for producers and traders, the blessing was mixed. Some farmers sold their crop before prices soared. Millers tried to keep supplies back, waiting for higher prices. The government capped exports below last year's levels. The secretary-general of the Thai rice exporters' association told IRRI that “We don't know where the 2007 harvest is.” Vichai Sriprasert, a big exporter, describes the Thai rice market using language that, elsewhere, is literally true. “This is a crucial time,” he says. “It will tell the of who will survive and who will not survive.”
“World agriculture has entered a new, unsustainable and politically risky period,” says Joachim von Braun, the head of the International Food Policy Research Institute (IFPRI) in Washington, DC. To prove it, food riots have erupted in countries all along the equator. In Haiti, protesters chanting “We're hungry” forced the prime minister to resign; 24 people were killed in riots in Cameroon; Egypt's president ordered the army to start baking bread; the Philippines made hoarding rice punishable by life imprisonment. “It's an explosive situation and threatens political stability,” worries Jean-Louis Billon, president of Côte d'Ivoire's chamber of commerce.
Last year wheat prices rose 77% and rice 16% (see chart 1). These were some of the sharpest rises in food prices ever. But this year the speed of change has accelerated. Since January, rice prices have soared 141%; the price of one variety of wheat shot up 25% in a day. Some 40km outside Abidjan, Mariam Kone, who grows sweet potatoes, okra and maize but feeds her family on imported rice, laments: “Rice is very expensive, but we don't know why.”
The prices mainly reflect changes in demand—not problems of supply, such as harvest failure. The changes include the gentle upward pressure from people in China and India eating more grain and meat as they grow rich and the sudden, voracious appetites of western biofuels programmes, which convert cereals into fuel. This year the share of the maize (corn) crop going into ethanol in America has risen and the European Union is implementing its own biofuels targets. To make matters worse, more febrile behaviour seems to be influencing markets: export quotas by large grain producers, rumours of panic-buying by grain importers, money from hedge funds looking for new markets.
Such shifts have not been matched by comparable changes on the farm. This is partly because they cannot be: farmers always take a while to respond. It is also because governments have softened the impact of price rises on domestic markets, muffling the signals that would otherwise have encouraged farmers to grow more food. Of 58 countries whose reactions are tracked by the World Bank, 48 have imposed price controls, consumer subsidies, export restrictions or lower tariffs.
But the food scare of 2008, severe as it is, is only a symptom of a broader problem. The surge in food prices has ended 30 years in which food was cheap, farming was subsidised in rich countries and international food markets were wildly distorted. Eventually, no doubt, farmers will respond to higher prices by growing more and a new equilibrium will be established. If all goes well, food will be affordable again without the subsidies, dumping and distortions of the earlier period. But at the moment, agriculture has been caught in limbo. The era of cheap food is over. The transition to a new equilibrium is proving costlier, more prolonged and much more painful than anyone had expected.
“We are the canary in the mine,” says Josette Sheeran, the head of the UN's World Food Programme, the largest distributor of food aid. Usually, a food crisis is clear and localised. The harvest fails, often because of war or strife, and the burden in the affected region falls heavily on the poorest. This crisis is different. It is occurring in many countries simultaneously, the first time that has happened since the early 1970s. And it is affecting people not usually hit by famines. “For the middle classes,” says Ms Sheeran, “it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster.” The poorest are selling their animals, tools, the tin roof over their heads—making recovery, when it comes, much harder.
Because the problem is not yet reflected in national statistics, its scale is hard to judge. The effect on the poor will depend on whether they are net buyers of food or net sellers (see article); for some net buyers, the price rises may be enough to turn them into sellers. But by almost any measure, the human suffering is likely to be vast. In El Salvador the poor are eating only half as much food as they were a year ago. Afghans are now spending half their income on food, up from a tenth in 2006.
On a conservative estimate, food-price rises may reduce the spending power of the urban poor and country people who buy their own food by 20% (in some regions, prices are rising by far more). Just over 1 billion people live on $1 a day, the benchmark of absolute poverty; 1.5 billion live on $1 to $2 a day. Bob Zoellick, the president of the World Bank, reckons that food inflation could push at least 100m people into poverty, wiping out all the gains the poorest billion have made during almost a decade of economic growth.
Small is fairly beautiful
In the short run, humanitarian aid, social-protection programmes and trade policies will determine how well the world copes with these problems. But in the medium term the question is different: where does the world get more food from? If the extra supplies come mainly from large farmers in America, Europe and other big producers, then the new equilibrium may end up looking much like the old one, with world food depending on a small number of suppliers and—possibly—trade distortions and food dumping. So far, farmers in rich countries have indeed responded. America's winter wheat plantings are up 4% and the spring-sown area is likely to rise more. The Food and Agriculture Organisation forecasts that the wheat harvest in the European Union will rise 13%.
Ideally, a big part of the supply response would come from the world's 450m smallholders in developing countries, people who farm just a few acres. There are three reasons why this would be desirable. First, it would reduce poverty: three-quarters of those making do on $1 a day live in the countryside and depend on the health of smallholder farming. Next, it might help the environment: those smallholders manage a disproportionate share of the world's water and vegetation cover, so raising their productivity on existing land would be environmentally friendlier than cutting down the rainforest. And it should be efficient: in terms of returns on investment, it would be easier to boost grain yields in Africa from two tonnes per hectare to four than it would be to raise yields in Europe from eight tonnes to ten. The opportunities are greater and the law of diminishing returns has not set in.
Unfortunately, no smallholder bonanza is yet happening. In parts of east Africa, farmers are cutting back on the area planted, mostly because they cannot afford fertilisers (driven by oil, fertiliser prices have soared, too). This reaction is not universal. India is forecasting a record cereal harvest; South African planting is up 8% this year. Still, some anecdotal evidence, plus the general increase in food prices, suggests that smallholders are not responding enough. “In a perfect world,” says a recent IFPRI report, “the response to higher prices is higher output. In the real world, however, this isn't always the case.” Farming in emerging markets is riddled with market failures and does not react to price signals as other businesses do.
This is true to a certain extent of farming in general. If you own a toy factory, or an oilfield, and the price of toys or oil rises, you run the factory night and day, or turn the taps full on. But it always takes a season to grow more food, which is why farm prices everywhere tend to be “sticky”: a 10% increase in prices leads to a 1% increase in output. But the food crisis of 2008 suggests farm prices in developing countries may be stickier than that.
The quickest way to increase your crop is to plant more. But in the short run there is only a limited amount of fallow land easily available. (The substantial unused acreage in Brazil and Russia will take a decade or so to get ready.) For some crops—notably rice in East Asia—the amount of good, productive land is actually falling, buried under the concrete of expanding cities. In other words, food increases now need to come mainly from higher yields.
Yields cannot be switched on and off like a tap. Spreading extra fertiliser or buying new machinery helps. But higher yields also need better irrigation and fancier seeds. The time lag between dreaming up a new seed and growing it commercially in the field is ten to 15 years, says Bob Zeigler of the International Rice Research Institute (IRRI) in the Philippines. Even if a farmer wanted to plant something more productive this year, and could afford to, he could not—unless research work had been going on for years.
It has not. Most agricultural research in developing countries is financed by governments. In the 1980s, governments started to reduce green-revolutionary spending, either out of complacency (believing the problem of food had been licked), or because they preferred to involve the private sector. But many of the private firms brought in to replace state researchers turned out to be rent-seeking monopolists. And in the 1980s and 1990s huge farm surpluses from the rich world were being dumped on markets, depressing prices and returns on investment. Spending on farming as a share of total public spending in developing countries fell by half between 1980 and 2004.
This decline has had a slow, inevitable impact. Creating a new seed is a bit like designing a flu vaccine: you need to keep updating it, or pests and disease will negate its effectiveness. When the rice variety IR8 was introduced in 1966, it produced almost ten tonnes per hectare; now it yields barely seven. In developing countries between the 1960s and 1980s, yields of the main cereal crops increased by 3-6% a year. Now annual growth is down to 1-2%, below the increase in demand (see chart 2). “We're paying the price for 15 years of neglect,” says Mr Zeigler.
Alterations in the structure of farming have exacerbated the effects of underinvestment. Farming is just one part of a food chain that stretches from fertiliser and seed
companies at one end to supermarkets at the other. In the past, the end of the chain nearest consumers was less important. Food policy meant improving links between farmers and suppliers. The Green Revolution of the 1960s, for example, provided new seeds and subsidised fertilisers. Malawi is doing something similar now. But over the past decade, the other end of the chain has come to matter more. The main reason why Kenyan and Ethiopian farmers planted less this year was not just that fertilisers were expensive, but that farmers could not get credit to finance purchases. Supermarkets are also more important to farmers than they used to be, accounting for half or more of food sales, even in many developing countries.Success in patches
In theory, the growing importance of traders and supermarkets ought to make farmers more responsive to changes in prices and consumer tastes. In some places, that is the case. But supermarkets need uniform quality, minimum large quantities and high standards of hygiene, which the average smallholder in a poor country is ill equipped to provide. So traders and supermarkets may benefit commercial farmers more than smallholders.
To make matters worse, smallholdings are fragmenting in many countries. Because of population growth and the loss of farmland, the average farm size in China and Bangladesh has fallen from about 1.5 hectares in the 1970s to barely 0.5 hectares now; in Ethiopia and Malawi, it fell from 1.2 hectares to 0.8 in the 1990s. By and large, the smaller the farm, the greater the burden of the cost of doing business with big retailers. Smaller smallholders are also at a disadvantage in getting loans, new seeds and other innovations on which higher yields depend.
Reuters
Such bottlenecks and market failures make it harder for smallholders to respond to higher prices, even without the multiple distortions that governments also introduce into world food markets. They mean the transition to a new equilibrium will be prolonged and painful. But they do not mean it will not happen. Lennart Båge, the head of the International Fund for Agricultural Development, a UN agency in Rome, argues that if farmers can keep the higher prices, they will overcome the problems that beset them. As he points out, India feeds 17% of the world's people on less than 5% of the world's water and 3% of its farmland—and, along with China, is seeing its cereal crop rise this year. Similar success stories are cropping up, in patches.
Despite East Africa's problems, Ethiopia this week opened its own commodity exchange, a rare thing on the continent, in an attempt to improve the markets that connect farmers and traders. The spread of mobile phones also relays market information more widely. In landlocked Malawi, it costs almost as much to ship maize to and from world markets as it does to grow it locally, so Malawian farmers have found it hard to export their surplus even with prices high. But partly because of the political disaster of Zimbabwe, regional markets are now springing up out of nowhere in southern Africa—and Malawi's farmers are selling there.
Moreover, technological improvements are still pushing through the neglected soil. Mr Zeigler reckons IRRI has enough tinkerings in the pipeline to increase yields by one or two tonnes a hectare. And if European countries relax their hostility to genetically modified organisms, crop scientists could do things—such as redesigning photosynthesis in plants—which could boost yields 50% or more. A burden to afford
Between November 2007 and February 2008, rice exports from Thailand (the world's biggest exporter) were running at 1m tonnes a month—an unprecedented bonanza. But for even for producers and traders, the blessing was mixed. Some farmers sold their crop before prices soared. Millers tried to keep supplies back, waiting for higher prices. The government capped exports below last year's levels. The secretary-general of the Thai rice exporters' association told IRRI that “We don't know where the 2007 harvest is.” Vichai Sriprasert, a big exporter, describes the Thai rice market using language that, elsewhere, is literally true. “This is a crucial time,” he says. “It will tell the of who will survive and who will not survive.”
Copyright © 2008 The Economist Newspaper
Tuesday, April 22, 2008
The silent tsunami: Food prices are causing misery and strife around the world. Radical solutions are needed
PICTURES of hunger usually show passive eyes and swollen bellies. The harvest fails because of war or strife; the onset of crisis is sudden and localised. Its burden falls on those already at the margin.
Today's pictures are different. “This is a silent tsunami,” says Josette Sheeran of the World Food Programme, a United Nations agency. A wave of food-price inflation is moving through the world, leaving riots and shaken governments in its wake. For the first time in 30 years, food protests are erupting in many places at once. Bangladesh is in turmoil (see article); even China is worried (see article). Elsewhere, the food crisis of 2008 will test the assertion of Amartya Sen, an Indian economist, that famines do not happen in democracies.
Famine traditionally means mass starvation. The measures of today's crisis are misery and malnutrition. The middle classes in poor countries are giving up health care and cutting out meat so they can eat three meals a day. The middling poor, those on $2 a day, are pulling children from school and cutting back on vegetables so they can still afford rice. Those on $1 a day are cutting back on meat, vegetables and one or two meals, so they can afford one bowl. The desperate—those on 50 cents a day—face disaster.
Roughly a billion people live on $1 a day. If, on a conservative estimate, the cost of their food rises 20% (and in some places, it has risen a lot more), 100m people could be forced back to this level, the common measure of absolute poverty. In some countries, that would undo all the gains in poverty reduction they have made during the past decade of growth. Because food markets are in turmoil, civil strife is growing; and because trade and openness itself could be undermined, the food crisis of 2008 may become a challenge to globalisation.
First find $700m
Rich countries need to take the food problems as seriously as they take the credit crunch. Already bigwigs at the World Bank and the United Nations are calling for a “new deal” for food. Their clamour is justified. But getting the right kind of help is not so easy, partly because food is not a one-solution-fits-all problem and partly because some of the help needed now risks making matters worse in the long run.
The starting-point should be that rising food prices bear more heavily on some places than others. Food exporters, and countries where farmers are self-sufficient, or net sellers, benefit. Some countries—those in West Africa which import their staples, or Bangladesh, with its huge numbers of landless labourers—risk ruin and civil strife. Because of the severity there, the first step must be to mend the holes in the world's safety net. That means financing the World Food Programme properly. The WFP is the world's largest distributor of food aid and its most important barrier between hungry people and starvation. Like a $1-a-day family in a developing country, its purchasing power has been slashed by the rising cost of grain. Merely to distribute the same amount of food as last year, the WFP needs—and should get—an extra $700m.
And because the problems in many places are not like those of a traditional famine, the WFP should be allowed to broaden what it does. At the moment, it mostly buys grain and doles it out in areas where there is little or no food. That is necessary in famine-ravaged places, but it damages local markets. In most places there are no absolute shortages and the task is to lower domestic prices without doing too much harm to farmers. That is best done by distributing cash, not food—by supporting (sometimes inventing) social-protection programmes and food-for-work schemes for the poor. The agency can help here, though the main burden—tens of billions of dollars' worth—will be borne by developing-country governments and lending institutions in the West.
Such actions are palliatives. But the food crisis of 2008 has revealed market failures at every link of the food chain (see article). Any “new deal” ought to try to address the long-term problems that are holding poor farmers back.
Then stop the distortions
In general, governments ought to liberalise markets, not intervene in them further. Food is riddled with state intervention at every turn, from subsidies to millers for cheap bread to bribes for farmers to leave land fallow. The upshot of such quotas, subsidies and controls is to dump all the imbalances that in another business might be smoothed out through small adjustments onto the one unregulated part of the food chain: the international market.
For decades, this produced low world prices and disincentives to poor farmers. Now, the opposite is happening. As a result of yet another government distortion—this time subsidies to biofuels in the rich world—prices have gone through the roof. Governments have further exaggerated the problem by imposing export quotas and trade restrictions, raising prices again. In the past, the main argument for liberalising farming was that it would raise food prices and boost returns to farmers. Now that prices have massively overshot, the argument stands for the opposite reason: liberalisation would reduce prices, while leaving farmers with a decent living.
There is an occasional exception to the rule that governments should keep out of agriculture. They can provide basic technology: executing capital-intensive irrigation projects too large for poor individual farmers to undertake, or paying for basic science that helps produce higher-yielding seeds. But be careful. Too often—as in Europe, where superstitious distrust of genetic modification is slowing take-up of the technology—governments hinder rather than help such advances. Since the way to feed the world is not to bring more land under cultivation, but to increase yields, science is crucial.
Agriculture is now in limbo. The world of cheap food has gone. With luck and good policy, there will be a new equilibrium. The transition from one to the other is proving more costly and painful than anyone had expected. But the change is desirable, and governments should be seeking to ease the pain of transition, not to stop the process itself.
Copyright © 2008 The Economist Newspaper
Rice Shortage in Philippines May Mean More Trouble for Arroyo
The social problems rised by food prices and shortages continue... Who knows where they will take us! Now it is in Philipines.
April 22 (Bloomberg) -- Myrna Lacdao used to eat two meals a day. Now she eats one and gives the rest to her two grandchildren.
Lacdao, 53, shares a 70-square-foot shack in Manila's San Roque shantytown with her husband, two adult children and grandchildren. After the price of rice rose 41 percent in the past year, only the youngsters get three meals a day.
``I just take coffee in the morning and then have lunch at noon,'' said Lacdao, who makes pillow cases for sale to neighbors, contributing to the family's monthly income of 9,000 pesos ($215). ``That's my first and last meal of the day.''
Increasing global demand for food, speculation in commodities and rising fuel prices intersect in San Roque, where 8,000 families live in wooden huts with roofs made of scrap metal and plastic.
Rice futures had their biggest weekly gain in at least seven years last week on concerns export curbs by China and Vietnam will spread as importing nations struggle to feed their people. The Philippines, the biggest rice importer, received offers for only two-thirds of the grain it sought to buy on April 17.
A kilo (2.2 pounds) of rice cost 34 pesos last week on the open market in Manila, up from 24.07 pesos a year ago, according to the Bureau of Agricultural Statistics. While the National Food Authority sells rice to the poor at 18.25 pesos a kilo, that accounts for only 10 percent of consumption, according to an April 15 report by analysts at Royal Bank of Scotland Group Plc.
Empty plates may further undermine President Gloria Arroyo's administration in a country where street protests toppled leaders in 1986 and 2001. Her approval rating dropped to 27 percent in March, the third straight quarterly decline, according to a survey by pollster Social Weather Stations.
`Tipping Point'
``This could be the tipping point,'' said Earl Parreno, an analyst at Manila's Institute for Political and Economic Reforms. ``Her statements must cascade into concrete steps that would put food on a poor man's table.''
The National Bureau of Investigation is pursuing traders suspected of hoarding rice and officials who conspired to repackage subsidized grain for sale on the open market. The administration said this month it would spend 43.7 billion pesos through 2010 to boost rice production.
``The government is sparing no effort to ensure that our supplies of rice get from the source to the tables of Filipinos throughout the nation,'' Arroyo said in an April 15 speech.
San Roque sits on 30 hectares of government property the squatters claimed because they can't afford their own land.
There are no roads or sewage system. More than half the people of working age are unemployed, community leader Ruben Coprado said.
Rice, Vegetables
Coprado, who sells soap, coffee and charcoal to small shops, spends 9,000 pesos a month on food for a family of five, 80 percent more than last year. They subsist on rice, vegetables and fish, eating meat just once a week.
``Most people in the neighborhood only eat rice with instant noodles or sardines just to get by,'' he said.
Magdalena Onia, 27, earns as little as 50 pesos a day scavenging plastic and wire from a nearby dump. She used to have running water and electricity for a single light bulb.
Now, the cost of feeding her five children is so high she fetches water from a common well and uses candles.
``Some days, I can't even send them to school because we have nothing to eat,'' Onia said.
The Philippines imported 1.9 million tons of rice last year, or 16 percent of its needs.
About 15 percent of last year's rice crop was spoiled because of a lack of drying facilities or lost during milling and delivery, said Frisco Malabanan, director of the government's hybrid rice program.
World Bank
The Philippine government shouldn't have followed a World Bank recommendation to stop stockpiling grain in favor of buying it on the world market, said Raj Patel, a visiting scholar at the University of California, Berkeley, and author of ``Stuffed & Starved: The Hidden Battle for the World Food System'' (Melville House, 398 pages, $19.95).
A June 2007 World Bank report said the Philippines should reduce grain stocks and use them for ``disaster mitigation and safety net programs'' instead of ``price stabilization.''
``The Philippines' government had been strong-armed in various ways into adopting the kinds of policies that militated against its being able to stockpile grain,'' Patel said.
National Food Authority Deputy Administrator Vic Jarina dismissed Patel's criticisms, saying the government keeps at least a 15-day supply on hand. The Philippines consumes 33,000 tons of rice daily.
San Roque sits four kilometers (2.5 miles) from a rice warehouse owned by the National Food Authority.
Rice shortages in 1995 prompted some residents to storm the warehouse and demand that officials sell them grain. Tensions are escalating again.
``We never see that National Food rice around here,'' Lacdao said. ``If it reaches a point when I can't even feed my grandchildren, I wouldn't think twice about jumping that high fence and breaking into that warehouse like we did in 1995.''
Luzi Ann Javier in Manila at ljavier@bloomberg.net Last Updated: April 21, 2008 18:22 EDT
April 22 (Bloomberg) -- Myrna Lacdao used to eat two meals a day. Now she eats one and gives the rest to her two grandchildren.
Lacdao, 53, shares a 70-square-foot shack in Manila's San Roque shantytown with her husband, two adult children and grandchildren. After the price of rice rose 41 percent in the past year, only the youngsters get three meals a day.
``I just take coffee in the morning and then have lunch at noon,'' said Lacdao, who makes pillow cases for sale to neighbors, contributing to the family's monthly income of 9,000 pesos ($215). ``That's my first and last meal of the day.''
Increasing global demand for food, speculation in commodities and rising fuel prices intersect in San Roque, where 8,000 families live in wooden huts with roofs made of scrap metal and plastic.
Rice futures had their biggest weekly gain in at least seven years last week on concerns export curbs by China and Vietnam will spread as importing nations struggle to feed their people. The Philippines, the biggest rice importer, received offers for only two-thirds of the grain it sought to buy on April 17.
A kilo (2.2 pounds) of rice cost 34 pesos last week on the open market in Manila, up from 24.07 pesos a year ago, according to the Bureau of Agricultural Statistics. While the National Food Authority sells rice to the poor at 18.25 pesos a kilo, that accounts for only 10 percent of consumption, according to an April 15 report by analysts at Royal Bank of Scotland Group Plc.
Empty plates may further undermine President Gloria Arroyo's administration in a country where street protests toppled leaders in 1986 and 2001. Her approval rating dropped to 27 percent in March, the third straight quarterly decline, according to a survey by pollster Social Weather Stations.
`Tipping Point'
``This could be the tipping point,'' said Earl Parreno, an analyst at Manila's Institute for Political and Economic Reforms. ``Her statements must cascade into concrete steps that would put food on a poor man's table.''
The National Bureau of Investigation is pursuing traders suspected of hoarding rice and officials who conspired to repackage subsidized grain for sale on the open market. The administration said this month it would spend 43.7 billion pesos through 2010 to boost rice production.
``The government is sparing no effort to ensure that our supplies of rice get from the source to the tables of Filipinos throughout the nation,'' Arroyo said in an April 15 speech.
San Roque sits on 30 hectares of government property the squatters claimed because they can't afford their own land.
There are no roads or sewage system. More than half the people of working age are unemployed, community leader Ruben Coprado said.
Rice, Vegetables
Coprado, who sells soap, coffee and charcoal to small shops, spends 9,000 pesos a month on food for a family of five, 80 percent more than last year. They subsist on rice, vegetables and fish, eating meat just once a week.
``Most people in the neighborhood only eat rice with instant noodles or sardines just to get by,'' he said.
Magdalena Onia, 27, earns as little as 50 pesos a day scavenging plastic and wire from a nearby dump. She used to have running water and electricity for a single light bulb.
Now, the cost of feeding her five children is so high she fetches water from a common well and uses candles.
``Some days, I can't even send them to school because we have nothing to eat,'' Onia said.
The Philippines imported 1.9 million tons of rice last year, or 16 percent of its needs.
About 15 percent of last year's rice crop was spoiled because of a lack of drying facilities or lost during milling and delivery, said Frisco Malabanan, director of the government's hybrid rice program.
World Bank
The Philippine government shouldn't have followed a World Bank recommendation to stop stockpiling grain in favor of buying it on the world market, said Raj Patel, a visiting scholar at the University of California, Berkeley, and author of ``Stuffed & Starved: The Hidden Battle for the World Food System'' (Melville House, 398 pages, $19.95).
A June 2007 World Bank report said the Philippines should reduce grain stocks and use them for ``disaster mitigation and safety net programs'' instead of ``price stabilization.''
``The Philippines' government had been strong-armed in various ways into adopting the kinds of policies that militated against its being able to stockpile grain,'' Patel said.
National Food Authority Deputy Administrator Vic Jarina dismissed Patel's criticisms, saying the government keeps at least a 15-day supply on hand. The Philippines consumes 33,000 tons of rice daily.
San Roque sits four kilometers (2.5 miles) from a rice warehouse owned by the National Food Authority.
Rice shortages in 1995 prompted some residents to storm the warehouse and demand that officials sell them grain. Tensions are escalating again.
``We never see that National Food rice around here,'' Lacdao said. ``If it reaches a point when I can't even feed my grandchildren, I wouldn't think twice about jumping that high fence and breaking into that warehouse like we did in 1995.''
Luzi Ann Javier in Manila at ljavier@bloomberg.net Last Updated: April 21, 2008 18:22 EDT
Road to ruin? America ponders the depth of its downturn
What will be the shape of the US economic downturn? In recent months, the debate among economists has shifted from whether the US will have a recession to how deep and how long it will be.
Will it be a V-shaped recession – short, shallow and followed by a rapid return to normal rates of growth? Will it be U-shaped, in which the initial downturn is followed by a protracted period of weak growth and a slow return to the trend rate? Or could it even be an L-shaped recession – with economic weakness lasting for many years, as in the US during the Great Depression or Japan in the 1990s?
The answer will have enormous significance for the world economy and is likely to determine whether the recent improvement in some financial markets marks the beginning of the end of the credit crisis, or simply another false dawn.
The Federal Reserve believes the single most likely outcome is a V-shaped recession, though it sees significant risks of a deeper and more prolonged downturn. Fed staff expect economic activity to contract in the first half of this year, with a pick-up in growth beginning in the second half. They predict growth will be above trend – more rapid than normal – in 2009, when measured from the final quarter of 2008 to the final quarter of 2009.
This month Ben Bernanke, the Fed chairman, told Congress that the US was going through a “very difficult period” but said “much necessary economic and financial adjustment has already taken place” and policies were in train “that should support a return to growth in the second half of this year and next”.
Until recently, this was also the near-unanimous view of private-sector forecasters. These experts highlighted the absence of excesses in the corporate sector outside housing and finance. Most companies did not invest heavily or hire aggressively during the economic upturn, and so are unlikely to cut back deeply on investment and staff as they did in the last recession in 2001.
This theory is consistent with the data so far. Private-sector employment has fallen for the past four months but at a modest rate compared with past recessions, while hours worked have held up quite well.
Miles of unoccupied new homes on the edges of Las Vegas and half-built condominiums in Miami demonstrate that there were big excesses in the building industry. But the adjustment in housing is well under way. Home starts are still falling at a precipitous rate but the Fed expects that the rate of decline of residential investment will slow from the second half onwards, reducing the drag on growth.
Moreover, there is a double boost in the pipeline from the fiscal stimulus and aggressive interest rate cuts by the Fed early this year, which typically effect the economy with a lag. The first tax rebate cheques will be sent out next month.
Brian Sack, chief economist at Macroeconomic Advisers, estimates that consumers will spend about 40 per cent of the rebate cheques of up to $1800 (£907, €1,132) per household. “We expect a sizeable contribution to growth from the fiscal stimulus package in the middle two quarters of this year,” he says. There would be some “payback” later but by the time the stimulus fades, “the economy will be getting itself on a better underlying footing”.
In this scenario, exports continue to be strong, the drag from housing declines and reasonable income growth enables the economy to return to trend growth quite quickly, even allowing for a moderate increase in the household savings rate. The relatively benign forecast assumes that stresses in financial markets gradually ease, reducing pressure on the economy and amplifying the effect of interest rate cuts.
A V-shaped recession is certainly quite possible. But top Fed officials acknowledge that, while we know that the first half of this year will see either a shallow recession or very little growth, and that there should be some support from fiscal and monetary stimulus around the middle of the year, the outlook is quite uncertain from there onwards.
These officials believe that the great unknown is what will happen to the housing sector (see below). As long as house prices show no sign of bottoming out, it will be difficult for financial markets to return to normal and consumer spending will remain under severe pressure.
Other experts – including some top central bankers in Europe – think there is a significant risk of a sharp rather than a gradual increase in the household savings rate in current conditions, even if house prices do begin to bottom out.
In recent weeks a number of private-sector economists have moved to more of a U-shaped outlook, forecasting an extended period of tepid growth and a sluggish recovery. Some believe that tax rebates will be used almost entirely to pay down debt, while others offer the notion of a W-shaped recession in which a bounce from the stimulus is followed by further weakness.
The International Monetary Fund, meanwhile, has gone still further in forecasting an extended period of economic weakness in the US, with growth of minus 0.7 per cent on the Fed’s final-quarter-to-final-quarter measure this year, and only 1.7 per cent next year. The IMF believes that US growth will start to recover only in 2009, not in the second half of this year as the Fed expects, and will only return to at or above trend in 2010. The forecast is an outlier from the consensus but its assumptions are not particularly radical.
Alan Blinder, a professor of economics at Princeton and a former Fed vice-chairman, says the economy will struggle to return to normal growth in the face of “super-headwinds” emanating from the financial sector.
With banks under balance-sheet pressure and the financial system as a whole deleveraging, the credit squeeze on the real economy could continue even after the risk of a systemic crisis in the banking sector recedes.
Moreover, the impact of the tightening to date is only now beginning to be felt in the economy. Richard Berner, chief US economist at Morgan Stanley, who expects a lacklustre recovery, says that “given the time lags between when financial conditions tighten and when it shows up in the economy we still have a long way to go.”
With the markets for housing finance still dysfunctional, the downturn in both construction and home prices could prove more protracted than the Fed expects. Global growth could also weaken as the effects of the credit crisis are felt in Europe and possibly even in emerging markets such as China.
Yet at the centre of the debate is consumer spending, which accounts for about 70 per cent of the US economy. Consumers are grappling with falling net worth, tightening credit conditions, higher energy and food costs, and a softening labour market.
The Fed forecast assumes a flattening out of commodity prices, which would give consumers over time more purchasing power while easing inflation pressure. But commodity prices keep going up, worsening the growth/inflation mix. The longer this persists, the greater the risk that stagflation – low growth and high inflation – becomes embedded in the expectations of workers, companies and investors.
The inflation risk means the Fed will now have to moderate or even soon pause its interest rate cuts. Moreover, while the US corporate sector generally looks in good shape, some analysts see huge excesses in the household sector that need to be worked out, including record levels of debt relative to income and a savings rate that is close to zero.
Others dispute that US households are badly overstretched, noting that household net worth is still close to record levels. Wealth, though, is unevenly distributed, and could fall sharply if the worst-case scenarios for house prices prove correct.
“The trillion-dollar question is what happens to consumption – is the US household going to rein back its spending?” says Raghu Rajan, a professor at the University of Chicago’s Graduate School of Business. As results from US retailers indicate, the consumer is already pulling back. “But the real question is has it got much further to go?”
Mr Rajan says economists do not fully understand why the savings rate collapsed from the early 1980s, making it hard to be sure at what rate it might rise again. Most explanations suggest some combination of increasing wealth (first from equities, then housing) and financial innovation, which made it easier to access the wealth represented, for instance, by home equity.
Kenneth Rogoff, a professor at Harvard, says US consumer spending would have to adjust following the reversal in house prices, even if there had been no accompanying credit crisis. As things stand, “even if we take away the immediate financial crisis, we are still left with a story where the whole credit structure that propagated the housing boom and credit boom has been seriously compromised,” he says.
Most experts believe the US savings rate will rise as households start to repair their balance sheets, but that this will happen gradually, muting rather than derailing economic recovery. There is a risk, however, that under stress this adjustment could be more abrupt.
Moreover, the longer an economic downturn lasts, the greater the strain on the financial system. The IMF already estimates that losses and writedowns on all debt and securities – not just subprime mortgages – could total $945bn.
Nouriel Roubini, a professor at New York University and chairman of RGE Monitor, an economic research firm, argues that underwriting standards deteriorated across a wide range of credit products during the boom, and that economic stress will result in a sharp rise in defaults and delinquencies on non-mortgage debt such as car loans, credit cards and leveraged loans.
The ultimate losses could turn out to be much lower than the IMF and others estimate. But the potential losses in a protracted downturn are of a size that could impair the capital base and functioning of the US financial sector. This could create an L-shaped recession, in which an anaemic economy and a damaged financial sector transmit weakness to each other, resulting in an extended period of stagnation like that of Japan in the 1990s.
Yet while the risk of a U-shaped recession has probably risen in recent weeks, the worst-case scenario is looking less likely thanks to policymakers’ activist response. A number of experts see the rescue of Bear Stearns, the investment bank, by the Fed and JPMorgan Chase as a watershed. The US authorities showed they were willing to deploy public money to prevent a systemically important institution from defaulting on its debts. Congress, meanwhile, is considering plans to provide between $300bn and $400bn in credit guarantees to allow lenders who agree to write down home loans to refinance these mortgages.
Robert DiClemente, chief US economist at Citigroup, says that the problem for the pessimists’ analysis is that “the stark seriousness of where we are” galvanises an aggressive policy response. For this reason, even the arch-bear Mr Roubini says: “This is not going to be like Japan – it will be U-shaped, not L-shaped” – though Mr Roubini’s idea of a U-shaped recession still involves 12 to 18 months of economic contraction.
Policy activism is not a guarantee of success. The US’s large current account deficit increases the risk of a dollar crisis and a sudden pick-up in inflation expectations – a threat that has looked worryingly real at moments in recent months.
Moreover, there are some financial risks – such as multiple ruptures in the credit default swaps market, which banks and other financial institutions use to trade and hedge credit risk with each other – that would be very difficult for the Fed and Treasury to contain even if they wanted to.
The US government is also in a worse fiscal position than it was in 2001, making it harder to sustain an aggressive fiscal policy such as the Bush tax cuts and increased government spending that helped pull the US out of recession last time. Yet the likelihood is that the US – with even its external debts denominated in its own currency – has both the economic capacity and political will to prevent an L-shaped recession taking hold. In an election year, the pressure is for action.
The US should manage to avoid an L-shaped recession – and may even escape with a short V-shaped recession. The danger is that the extreme measures taken – already including the extension of the safety net to investment banks and the loosening of constraints on government-sponsored enterprises to support the housing market – could lay the seeds for the next financial and economic crisis.
Bleak houses in search of equilibrium
In the end, thinks the Federal Reserve and much of Wall Street, it all comes down to the value of bricks and mortar, writes Daniel Pimlott. How much further will American house prices fall and when will they bottom out? Jan Hatzius, chief US economist at Goldman Sachs, says this is “the most important question in the US economic outlook”.
The extent of the decline is critical both for consumer spending and financial stability. The further home prices fall, the more household wealth declines and the greater the pressure on consumers to spend less of their income. Meanwhile, the larger the fall, the bigger the losses in the financial sector and the greater the likelihood of a protracted credit squeeze as banks seek to repair their balance sheets.
The timing of the decline matters too. Until house prices at least begin to bottom out, it will be impossible to put firm values on mortgage-backed securities and resume something resembling normal business in the credit markets.
No one – including the Fed – has a good sense of how far house prices will fall or when they will stabilise. The US central bank’s base case is that the Office of Federal Housing Enterprise Oversight (Ofheo) index of house prices might fall another 6-8 per cent from current levels. This would imply a larger decline – in the region of 10 per cent – in the more volatile S&P/Case-Shiller index, which reflects house prices in 20 US metropolitan markets.
Yet top Fed officials admit that this is only an educated guess. There is no consensus among economists as to what the equilibrium price for US housing – the price that matches demand and supply – might be. Analysts differ as to whether house prices will undershoot fair value on the way down in the same way they overshot on the way up.
Moreover, just as house prices will affect the depth of the downturn, its severity – in particular the rise in unemployment – will affect house prices. “If we have a deep recession, all bets are off,” says Todd Sinai, assistant professor of real estate at Wharton.
US house prices have already fallen by about 10 per cent from their peak in mid-2006 on the Case-Shiller index. This takes them back to levels that last prevailed in 2005, when the subprime mortgage boom was beginning. Some measures of house prices-to-rent ratios suggest that houses remain as much as 60 per cent overvalued. Others, which allow for an increase in the price/rent ratio over time, still suggest that prices in January were about 30 per cent higher than their trend.
However, various housing affordability measures – which take into account the cost of mid-market mortgages – suggest that prices are either at normal levels relative to income or not much more than 10 per cent overvalued. Goldman Sachs estimates that the Case-Shiller index will fall another 15 per cent from its January 2008 level, for a total peak-to-trough decline of 25 per cent.
Lehman Brothers concurs and both firms see house prices bottoming out late in 2009. Michelle Meyer, an economist at Lehman, says: “The most rapid decline was at the beginning of this year. Next year the pace of decline will be much more moderate.” Merrill Lynch economists think house prices will fall another 20 per cent or so on the same measure, for a total decline of 30 per cent. The futures market is pricing in a further 20 per cent or so decline in the narrower but more actively traded Case-Shiller 10-city index. That has already fallen about 15 per cent, for a total predicted decline, peak to trough, of about 35 per cent.
The larger estimated drops generally include some degree of undershoot below fair value. There are a number of reasons why this might happen.
First, excess supply. While the stock of new homes for sale relative to market turnover has stabilised and inched down, the proportion of existing homes for sale is still rising. “Home prices are now falling at a rapid rate because the overhang of vacant homes has surged to historic highs,” says Peter Hooper, chief economist at Deutsche Bank Securities. A wave of home foreclosures and abandonments – in most cases linked to negative equity – could add as many as 5m homes to the market over the next three or four years, Goldman estimates.
Second, credit conditions. Just as an abundant availability of credit helped push house prices above fair value during the housing boom, the credit crunch could push prices below that level now. Borrowers face higher credit scores and lower loan-to-value ratios.
Third, downward momentum. During the boom people bought houses in part because they thought they would appreciate in value. Now they are holding back because they think prices will fall further.
House prices could end up falling by less than the futures market anticipates. But they could also fall considerably more than the Fed is assuming. The only solace is that price falls of anything approaching that magnitude would likely prompt large-scale government intervention to restore credit supply and minimise foreclosures.
The Financial Times Limited 2008
By Krishna Guha in Washington
Published: April 21 2008 18:16
Will it be a V-shaped recession – short, shallow and followed by a rapid return to normal rates of growth? Will it be U-shaped, in which the initial downturn is followed by a protracted period of weak growth and a slow return to the trend rate? Or could it even be an L-shaped recession – with economic weakness lasting for many years, as in the US during the Great Depression or Japan in the 1990s?
The answer will have enormous significance for the world economy and is likely to determine whether the recent improvement in some financial markets marks the beginning of the end of the credit crisis, or simply another false dawn.
The Federal Reserve believes the single most likely outcome is a V-shaped recession, though it sees significant risks of a deeper and more prolonged downturn. Fed staff expect economic activity to contract in the first half of this year, with a pick-up in growth beginning in the second half. They predict growth will be above trend – more rapid than normal – in 2009, when measured from the final quarter of 2008 to the final quarter of 2009.
This month Ben Bernanke, the Fed chairman, told Congress that the US was going through a “very difficult period” but said “much necessary economic and financial adjustment has already taken place” and policies were in train “that should support a return to growth in the second half of this year and next”.
Until recently, this was also the near-unanimous view of private-sector forecasters. These experts highlighted the absence of excesses in the corporate sector outside housing and finance. Most companies did not invest heavily or hire aggressively during the economic upturn, and so are unlikely to cut back deeply on investment and staff as they did in the last recession in 2001.
This theory is consistent with the data so far. Private-sector employment has fallen for the past four months but at a modest rate compared with past recessions, while hours worked have held up quite well.
Miles of unoccupied new homes on the edges of Las Vegas and half-built condominiums in Miami demonstrate that there were big excesses in the building industry. But the adjustment in housing is well under way. Home starts are still falling at a precipitous rate but the Fed expects that the rate of decline of residential investment will slow from the second half onwards, reducing the drag on growth.
Moreover, there is a double boost in the pipeline from the fiscal stimulus and aggressive interest rate cuts by the Fed early this year, which typically effect the economy with a lag. The first tax rebate cheques will be sent out next month.
Brian Sack, chief economist at Macroeconomic Advisers, estimates that consumers will spend about 40 per cent of the rebate cheques of up to $1800 (£907, €1,132) per household. “We expect a sizeable contribution to growth from the fiscal stimulus package in the middle two quarters of this year,” he says. There would be some “payback” later but by the time the stimulus fades, “the economy will be getting itself on a better underlying footing”.
In this scenario, exports continue to be strong, the drag from housing declines and reasonable income growth enables the economy to return to trend growth quite quickly, even allowing for a moderate increase in the household savings rate. The relatively benign forecast assumes that stresses in financial markets gradually ease, reducing pressure on the economy and amplifying the effect of interest rate cuts.
A V-shaped recession is certainly quite possible. But top Fed officials acknowledge that, while we know that the first half of this year will see either a shallow recession or very little growth, and that there should be some support from fiscal and monetary stimulus around the middle of the year, the outlook is quite uncertain from there onwards.
These officials believe that the great unknown is what will happen to the housing sector (see below). As long as house prices show no sign of bottoming out, it will be difficult for financial markets to return to normal and consumer spending will remain under severe pressure.
Other experts – including some top central bankers in Europe – think there is a significant risk of a sharp rather than a gradual increase in the household savings rate in current conditions, even if house prices do begin to bottom out.
In recent weeks a number of private-sector economists have moved to more of a U-shaped outlook, forecasting an extended period of tepid growth and a sluggish recovery. Some believe that tax rebates will be used almost entirely to pay down debt, while others offer the notion of a W-shaped recession in which a bounce from the stimulus is followed by further weakness.
The International Monetary Fund, meanwhile, has gone still further in forecasting an extended period of economic weakness in the US, with growth of minus 0.7 per cent on the Fed’s final-quarter-to-final-quarter measure this year, and only 1.7 per cent next year. The IMF believes that US growth will start to recover only in 2009, not in the second half of this year as the Fed expects, and will only return to at or above trend in 2010. The forecast is an outlier from the consensus but its assumptions are not particularly radical.
Alan Blinder, a professor of economics at Princeton and a former Fed vice-chairman, says the economy will struggle to return to normal growth in the face of “super-headwinds” emanating from the financial sector.
With banks under balance-sheet pressure and the financial system as a whole deleveraging, the credit squeeze on the real economy could continue even after the risk of a systemic crisis in the banking sector recedes.
Moreover, the impact of the tightening to date is only now beginning to be felt in the economy. Richard Berner, chief US economist at Morgan Stanley, who expects a lacklustre recovery, says that “given the time lags between when financial conditions tighten and when it shows up in the economy we still have a long way to go.”
With the markets for housing finance still dysfunctional, the downturn in both construction and home prices could prove more protracted than the Fed expects. Global growth could also weaken as the effects of the credit crisis are felt in Europe and possibly even in emerging markets such as China.
Yet at the centre of the debate is consumer spending, which accounts for about 70 per cent of the US economy. Consumers are grappling with falling net worth, tightening credit conditions, higher energy and food costs, and a softening labour market.
The Fed forecast assumes a flattening out of commodity prices, which would give consumers over time more purchasing power while easing inflation pressure. But commodity prices keep going up, worsening the growth/inflation mix. The longer this persists, the greater the risk that stagflation – low growth and high inflation – becomes embedded in the expectations of workers, companies and investors.
The inflation risk means the Fed will now have to moderate or even soon pause its interest rate cuts. Moreover, while the US corporate sector generally looks in good shape, some analysts see huge excesses in the household sector that need to be worked out, including record levels of debt relative to income and a savings rate that is close to zero.
Others dispute that US households are badly overstretched, noting that household net worth is still close to record levels. Wealth, though, is unevenly distributed, and could fall sharply if the worst-case scenarios for house prices prove correct.
“The trillion-dollar question is what happens to consumption – is the US household going to rein back its spending?” says Raghu Rajan, a professor at the University of Chicago’s Graduate School of Business. As results from US retailers indicate, the consumer is already pulling back. “But the real question is has it got much further to go?”
Mr Rajan says economists do not fully understand why the savings rate collapsed from the early 1980s, making it hard to be sure at what rate it might rise again. Most explanations suggest some combination of increasing wealth (first from equities, then housing) and financial innovation, which made it easier to access the wealth represented, for instance, by home equity.
Kenneth Rogoff, a professor at Harvard, says US consumer spending would have to adjust following the reversal in house prices, even if there had been no accompanying credit crisis. As things stand, “even if we take away the immediate financial crisis, we are still left with a story where the whole credit structure that propagated the housing boom and credit boom has been seriously compromised,” he says.
Most experts believe the US savings rate will rise as households start to repair their balance sheets, but that this will happen gradually, muting rather than derailing economic recovery. There is a risk, however, that under stress this adjustment could be more abrupt.
Moreover, the longer an economic downturn lasts, the greater the strain on the financial system. The IMF already estimates that losses and writedowns on all debt and securities – not just subprime mortgages – could total $945bn.
Nouriel Roubini, a professor at New York University and chairman of RGE Monitor, an economic research firm, argues that underwriting standards deteriorated across a wide range of credit products during the boom, and that economic stress will result in a sharp rise in defaults and delinquencies on non-mortgage debt such as car loans, credit cards and leveraged loans.
The ultimate losses could turn out to be much lower than the IMF and others estimate. But the potential losses in a protracted downturn are of a size that could impair the capital base and functioning of the US financial sector. This could create an L-shaped recession, in which an anaemic economy and a damaged financial sector transmit weakness to each other, resulting in an extended period of stagnation like that of Japan in the 1990s.
Yet while the risk of a U-shaped recession has probably risen in recent weeks, the worst-case scenario is looking less likely thanks to policymakers’ activist response. A number of experts see the rescue of Bear Stearns, the investment bank, by the Fed and JPMorgan Chase as a watershed. The US authorities showed they were willing to deploy public money to prevent a systemically important institution from defaulting on its debts. Congress, meanwhile, is considering plans to provide between $300bn and $400bn in credit guarantees to allow lenders who agree to write down home loans to refinance these mortgages.
Robert DiClemente, chief US economist at Citigroup, says that the problem for the pessimists’ analysis is that “the stark seriousness of where we are” galvanises an aggressive policy response. For this reason, even the arch-bear Mr Roubini says: “This is not going to be like Japan – it will be U-shaped, not L-shaped” – though Mr Roubini’s idea of a U-shaped recession still involves 12 to 18 months of economic contraction.
Policy activism is not a guarantee of success. The US’s large current account deficit increases the risk of a dollar crisis and a sudden pick-up in inflation expectations – a threat that has looked worryingly real at moments in recent months.
Moreover, there are some financial risks – such as multiple ruptures in the credit default swaps market, which banks and other financial institutions use to trade and hedge credit risk with each other – that would be very difficult for the Fed and Treasury to contain even if they wanted to.
The US government is also in a worse fiscal position than it was in 2001, making it harder to sustain an aggressive fiscal policy such as the Bush tax cuts and increased government spending that helped pull the US out of recession last time. Yet the likelihood is that the US – with even its external debts denominated in its own currency – has both the economic capacity and political will to prevent an L-shaped recession taking hold. In an election year, the pressure is for action.
The US should manage to avoid an L-shaped recession – and may even escape with a short V-shaped recession. The danger is that the extreme measures taken – already including the extension of the safety net to investment banks and the loosening of constraints on government-sponsored enterprises to support the housing market – could lay the seeds for the next financial and economic crisis.
Bleak houses in search of equilibrium
In the end, thinks the Federal Reserve and much of Wall Street, it all comes down to the value of bricks and mortar, writes Daniel Pimlott. How much further will American house prices fall and when will they bottom out? Jan Hatzius, chief US economist at Goldman Sachs, says this is “the most important question in the US economic outlook”.
The extent of the decline is critical both for consumer spending and financial stability. The further home prices fall, the more household wealth declines and the greater the pressure on consumers to spend less of their income. Meanwhile, the larger the fall, the bigger the losses in the financial sector and the greater the likelihood of a protracted credit squeeze as banks seek to repair their balance sheets.
The timing of the decline matters too. Until house prices at least begin to bottom out, it will be impossible to put firm values on mortgage-backed securities and resume something resembling normal business in the credit markets.
No one – including the Fed – has a good sense of how far house prices will fall or when they will stabilise. The US central bank’s base case is that the Office of Federal Housing Enterprise Oversight (Ofheo) index of house prices might fall another 6-8 per cent from current levels. This would imply a larger decline – in the region of 10 per cent – in the more volatile S&P/Case-Shiller index, which reflects house prices in 20 US metropolitan markets.
Yet top Fed officials admit that this is only an educated guess. There is no consensus among economists as to what the equilibrium price for US housing – the price that matches demand and supply – might be. Analysts differ as to whether house prices will undershoot fair value on the way down in the same way they overshot on the way up.
Moreover, just as house prices will affect the depth of the downturn, its severity – in particular the rise in unemployment – will affect house prices. “If we have a deep recession, all bets are off,” says Todd Sinai, assistant professor of real estate at Wharton.
US house prices have already fallen by about 10 per cent from their peak in mid-2006 on the Case-Shiller index. This takes them back to levels that last prevailed in 2005, when the subprime mortgage boom was beginning. Some measures of house prices-to-rent ratios suggest that houses remain as much as 60 per cent overvalued. Others, which allow for an increase in the price/rent ratio over time, still suggest that prices in January were about 30 per cent higher than their trend.
However, various housing affordability measures – which take into account the cost of mid-market mortgages – suggest that prices are either at normal levels relative to income or not much more than 10 per cent overvalued. Goldman Sachs estimates that the Case-Shiller index will fall another 15 per cent from its January 2008 level, for a total peak-to-trough decline of 25 per cent.
Lehman Brothers concurs and both firms see house prices bottoming out late in 2009. Michelle Meyer, an economist at Lehman, says: “The most rapid decline was at the beginning of this year. Next year the pace of decline will be much more moderate.” Merrill Lynch economists think house prices will fall another 20 per cent or so on the same measure, for a total decline of 30 per cent. The futures market is pricing in a further 20 per cent or so decline in the narrower but more actively traded Case-Shiller 10-city index. That has already fallen about 15 per cent, for a total predicted decline, peak to trough, of about 35 per cent.
The larger estimated drops generally include some degree of undershoot below fair value. There are a number of reasons why this might happen.
First, excess supply. While the stock of new homes for sale relative to market turnover has stabilised and inched down, the proportion of existing homes for sale is still rising. “Home prices are now falling at a rapid rate because the overhang of vacant homes has surged to historic highs,” says Peter Hooper, chief economist at Deutsche Bank Securities. A wave of home foreclosures and abandonments – in most cases linked to negative equity – could add as many as 5m homes to the market over the next three or four years, Goldman estimates.
Second, credit conditions. Just as an abundant availability of credit helped push house prices above fair value during the housing boom, the credit crunch could push prices below that level now. Borrowers face higher credit scores and lower loan-to-value ratios.
Third, downward momentum. During the boom people bought houses in part because they thought they would appreciate in value. Now they are holding back because they think prices will fall further.
House prices could end up falling by less than the futures market anticipates. But they could also fall considerably more than the Fed is assuming. The only solace is that price falls of anything approaching that magnitude would likely prompt large-scale government intervention to restore credit supply and minimise foreclosures.
The Financial Times Limited 2008
By Krishna Guha in Washington
Published: April 21 2008 18:16
Sunday, April 13, 2008
Objectivo Courmayeur Champex Chamonix
O percurso do The North Face Ultra-Trail Courmayeur (Itália)-Champex (Suiça)-Chamonix (França) [cerca de 100 km e 5200m de desnível positivo] corresponde à segunda parte do The North Face Ultra-Trail du tour du Mont-Blanc. A partida está situada no centro de Courmayeur (Itália), na Praça Brocherel, e será dada na sexta-feira 29 de Agosto de 2008 ao meio-dia. O percurso estará aberto durante 25 horas e existem limites horários parcelares calculados a partir dessa duração.
Saturday, April 12, 2008
PARQUE DAS NAÇÕES - FÁTIMA (164.5 Kms): twenty one days to go ...
ASSOCIAÇÃO DESPORTIVA O MUNDO DA CORRIDA.COM
CAMINHOS DO TEJO
Start: Parque das Nações/Lisbon at 5am (Course/distance/arrival hour for the first...for the others we will see...)
1 – Parque das Nações – Vialonga / 16.8 km / 6h 36m
2 – Vialonga – Vila Franca de Xira / 14.7 km / 8h 08m
3 – Vila Franca de Xira – Vila Nova da Rainha / 14 km / 9h 39m
4 – Vila Nova da Rainha – Lugar das Virtudes / 14.3 km / 11h 13m
5 – Lugar das Virtudes – Reguengo / 21.6 km / 13h 39m
6 – Reguengo – Santarém / 22.8 km / 16h 02m
7 – Santarém – Monsanto / 34.6 km / 19h 26m
8 – Monsanto – Minde / 10.9 km / 20h 35m
9 – Minde – Fátima / 14.8 km / 22h 05m
Start: Parque das Nações/Lisbon at 5am (Course/distance/arrival hour for the first...for the others we will see...)
1 – Parque das Nações – Vialonga / 16.8 km / 6h 36m
2 – Vialonga – Vila Franca de Xira / 14.7 km / 8h 08m
3 – Vila Franca de Xira – Vila Nova da Rainha / 14 km / 9h 39m
4 – Vila Nova da Rainha – Lugar das Virtudes / 14.3 km / 11h 13m
5 – Lugar das Virtudes – Reguengo / 21.6 km / 13h 39m
6 – Reguengo – Santarém / 22.8 km / 16h 02m
7 – Santarém – Monsanto / 34.6 km / 19h 26m
8 – Monsanto – Minde / 10.9 km / 20h 35m
9 – Minde – Fátima / 14.8 km / 22h 05m
For today, starting at 4h30m pm (strange hour for the start of a marathon), just the Carlos Lopes Gold Marathon. For running without any stresses...
Wednesday, April 9, 2008
From telephone to Smellphone!
NTT DoCoMo to test mobile fragrance service
NTT, a unit of NTT DoCoMo, will begin trials of the new service Thursday using 20 volunteers and hopes to commercialize the service later this year, according to a report in the business daily Nikkei.
The handheld device is designed to work together with music and video downloads, whereby scents are combined according to a fragrance playlist linked to audiovisual content.
NTT, a unit of NTT DoCoMo, will begin trials of the new service Thursday using 20 volunteers and hopes to commercialize the service later this year, according to a report in the business daily Nikkei.
The handheld device is designed to work together with music and video downloads, whereby scents are combined according to a fragrance playlist linked to audiovisual content.
Cool under fire: Iceland takes the fight back to finance
On a gloomy North Atlantic evening in January, a group of international hedge fund managers gathered in the stylish bar of 101 Hotel in downtown Reykjavik at 8pm for a drink before dinner.
They had been flown to Iceland by Bear Stearns, the US investment bank that two months later had to be rescued. Bear had organised the excursion to discuss the bizarre state of Iceland’s economy. What transpired at this dinner has entered into legend within Iceland’s close-knit financial community.
An executive who works with a big Icelandic bank recalls: “Upon entering the bar I was approached by one of the hedge fund managers. He informed me that all people in this party – except for him, of course – were shorting Iceland.” The executive says the fund manager described Iceland’s profit-making potential as the “second coming of Christ”.
“As dinner progressed – some people actually decided not to eat at all but just sit at the bar – and more drinks were downed, the conversation and questions started to get more hostile and short positions openly declared,” the executive says.
What started as an alcohol-fuelled evening has become a full-blown investigation by
Iceland’s Financial Supervisory Authority into an alleged speculative attack by hedge funds on Iceland’s currency, banking system and stock market. Jonas Jonsson, director-general of Iceland’s FSA, says the authorities are “searching whether some parties have systematically been distributing negative and false rumours about the Icelandic banks and financial system in order to profit from it”.
Copyright The Financial Times Limited 2008
By David Ibison in Reykjavik
Published: April 8 2008 19:10 | Last updated: April 8 2008 19:10
They had been flown to Iceland by Bear Stearns, the US investment bank that two months later had to be rescued. Bear had organised the excursion to discuss the bizarre state of Iceland’s economy. What transpired at this dinner has entered into legend within Iceland’s close-knit financial community.
An executive who works with a big Icelandic bank recalls: “Upon entering the bar I was approached by one of the hedge fund managers. He informed me that all people in this party – except for him, of course – were shorting Iceland.” The executive says the fund manager described Iceland’s profit-making potential as the “second coming of Christ”.
“As dinner progressed – some people actually decided not to eat at all but just sit at the bar – and more drinks were downed, the conversation and questions started to get more hostile and short positions openly declared,” the executive says.
What started as an alcohol-fuelled evening has become a full-blown investigation by
Iceland’s Financial Supervisory Authority into an alleged speculative attack by hedge funds on Iceland’s currency, banking system and stock market. Jonas Jonsson, director-general of Iceland’s FSA, says the authorities are “searching whether some parties have systematically been distributing negative and false rumours about the Icelandic banks and financial system in order to profit from it”.
Copyright The Financial Times Limited 2008
By David Ibison in Reykjavik
Published: April 8 2008 19:10 | Last updated: April 8 2008 19:10
Egypt's Soaring Food Prices Bring Bread Lines, Deficit Pressure
April 9 (Bloomberg) -- Atyat Musa Bakri, a Cairo mother of nine children, was waiting in line to buy subsidized bread for the third time in one day.
``The more cheap bread I can get, the better,'' she said as a crowd of about 30 women jostled at a bakery in the Boulaq district. ``The price of everything is going up and up, so I save on this. I spend all morning buying cheap bread.''
Bread is just about the only affordable food these days in Egypt, where rising commodity and energy prices have sent unsubsidized food prices up 20 percent or more in the past year. The rising cost of subsidies is damaging the government's efforts to reduce its budget deficit.
About 500 political activists and textile workers at the Mahallah El-Kobra factory in northern Egypt were arrested and dozens were wounded in clashes with police on April 6 as the government clamped down on a one-day national strike to protest food inflation. In Mahallah itself, demonstrators threw stones at police phalanxes and set fire to trash.
The government-owned Egyptian Gazette newspaper said April 1 that seven people have died since the beginning of the year in brawls in bread lines.
Egyptian inflation accelerated to 12.1 percent in February, the fastest pace in 11 months, the Cairo-based Central Agency for Public Mobilization and Statistics reported March 19. Food and beverage prices increased 16.8 percent, while non-subsidized bread and grain prices jumped 27 percent. Dairy products and eggs rose 20.1 percent.
230 Million Loaves
About 85 percent of Egypt's bread -- 230 million loaves a day -- is subsidized, said Himdan Taha, undersecretary of the Ministry of Social Solidarity.
``The bread crisis was aggravated because the non-subsidized bread kept getting smaller and more expensive, so many people just joined the lines of bread, causing pressure on our system,'' Prime Minister Ahmed Nazif told reporters on April 3.
Even before the April 6 protests, the Egyptian workforce was demanding relief. In December, tax collectors walked out and won increases in their minimum wage from about 300 pounds a month to 1,170 pounds. Doctors in state-run hospitals are threatening to strike if the government doesn't increase their minimum wage from about 342 pounds to 980 pounds.
Though strikes by public workers are illegal in Egypt, the government met the tax collectors' demands. The doctors may not get the same treatment. On March 6, Nazif said in a radio broadcast: ``Doctors in particular are prohibited from striking. Those who wish to express themselves have many alternative methods.''
Unproposed
Nazif floated a proposal last fall to replace subsidies on food and fuel with welfare payments to the poor, in effect giving them checks to buy what they need at whatever price they can find. He has yet to propose the plan to the parliament.
Last month, the Egyptian government waived duties on imported rice, dairy goods, food oils, steel and cement to fight inflation, the official MENA news agency reported.
At the bakery, Musa Bakri, 45, rattled off a series of price increases she says have hit the market in just the past few months: ``Meat that cost 8 pounds a kilo now cost 19 pounds. Chicken has doubled to 11 pounds a kilo.''
``How about eggs?'' asked a fellow shopper, Manil Ali Hassan, 35. ``They're twice as much.''
``The more cheap bread I can get, the better,'' she said as a crowd of about 30 women jostled at a bakery in the Boulaq district. ``The price of everything is going up and up, so I save on this. I spend all morning buying cheap bread.''
Bread is just about the only affordable food these days in Egypt, where rising commodity and energy prices have sent unsubsidized food prices up 20 percent or more in the past year. The rising cost of subsidies is damaging the government's efforts to reduce its budget deficit.
About 500 political activists and textile workers at the Mahallah El-Kobra factory in northern Egypt were arrested and dozens were wounded in clashes with police on April 6 as the government clamped down on a one-day national strike to protest food inflation. In Mahallah itself, demonstrators threw stones at police phalanxes and set fire to trash.
The government-owned Egyptian Gazette newspaper said April 1 that seven people have died since the beginning of the year in brawls in bread lines.
Egyptian inflation accelerated to 12.1 percent in February, the fastest pace in 11 months, the Cairo-based Central Agency for Public Mobilization and Statistics reported March 19. Food and beverage prices increased 16.8 percent, while non-subsidized bread and grain prices jumped 27 percent. Dairy products and eggs rose 20.1 percent.
230 Million Loaves
About 85 percent of Egypt's bread -- 230 million loaves a day -- is subsidized, said Himdan Taha, undersecretary of the Ministry of Social Solidarity.
``The bread crisis was aggravated because the non-subsidized bread kept getting smaller and more expensive, so many people just joined the lines of bread, causing pressure on our system,'' Prime Minister Ahmed Nazif told reporters on April 3.
Even before the April 6 protests, the Egyptian workforce was demanding relief. In December, tax collectors walked out and won increases in their minimum wage from about 300 pounds a month to 1,170 pounds. Doctors in state-run hospitals are threatening to strike if the government doesn't increase their minimum wage from about 342 pounds to 980 pounds.
Though strikes by public workers are illegal in Egypt, the government met the tax collectors' demands. The doctors may not get the same treatment. On March 6, Nazif said in a radio broadcast: ``Doctors in particular are prohibited from striking. Those who wish to express themselves have many alternative methods.''
Unproposed
Nazif floated a proposal last fall to replace subsidies on food and fuel with welfare payments to the poor, in effect giving them checks to buy what they need at whatever price they can find. He has yet to propose the plan to the parliament.
Last month, the Egyptian government waived duties on imported rice, dairy goods, food oils, steel and cement to fight inflation, the official MENA news agency reported.
At the bakery, Musa Bakri, 45, rattled off a series of price increases she says have hit the market in just the past few months: ``Meat that cost 8 pounds a kilo now cost 19 pounds. Chicken has doubled to 11 pounds a kilo.''
``How about eggs?'' asked a fellow shopper, Manil Ali Hassan, 35. ``They're twice as much.''
Tuesday, April 8, 2008
Food crisis grows
Rice, the staple food for half the world, gained 2.4 percent to $21.50 per 100 pounds in Chicago, double the price a year ago.
...
China, Egypt, Vietnam and India, accounting for more than a third of global rice exports, curbed sales this year to protect domestic stockpiles. The World Bank in Washington says 33 nations from Mexico to Yemen may face “social unrest'’ after food and energy costs increased for six consecutive years.
...
Four people died in two days of rioting last week over food prices in Haiti, the western hemisphere’s poorest country … Burkina Faso, Cameroon, Egypt, Indonesia, Ivory Coast, Mauritania, Mozambique and Senegal have also experienced unrest in the last several weeks related to food and fuel prices, according to the report.
From Bloomberg, cited by Paul Krigman, NYT, April 8, 2008
...
China, Egypt, Vietnam and India, accounting for more than a third of global rice exports, curbed sales this year to protect domestic stockpiles. The World Bank in Washington says 33 nations from Mexico to Yemen may face “social unrest'’ after food and energy costs increased for six consecutive years.
...
Four people died in two days of rioting last week over food prices in Haiti, the western hemisphere’s poorest country … Burkina Faso, Cameroon, Egypt, Indonesia, Ivory Coast, Mauritania, Mozambique and Senegal have also experienced unrest in the last several weeks related to food and fuel prices, according to the report.
From Bloomberg, cited by Paul Krigman, NYT, April 8, 2008
Sunday, April 6, 2008
I don´t resist...Probably, it won´t be the last time that we speak about FCPorto...
FUTEBOLF.C. Porto-E. Amadora, 6-0
TRIturador!
Num cenário criteriosamente decorado a azul e branco, e envolto num ambiente ensurdecedor, a geração do tricampeonato foi praticamente espontânea, tão natural quanto previsível. Os preparativos, breves, produziram a celebração e o primeiro ensaio de saudável loucura em menos de dez minutos. O golo, que no caso é o mesmo que dizer o título, rebentou no triângulo de puro traço argentino, concluído por Lucho. Para variar, foi Lisandro quem assistiu.
TRIturador!
Num cenário criteriosamente decorado a azul e branco, e envolto num ambiente ensurdecedor, a geração do tricampeonato foi praticamente espontânea, tão natural quanto previsível. Os preparativos, breves, produziram a celebração e o primeiro ensaio de saudável loucura em menos de dez minutos. O golo, que no caso é o mesmo que dizer o título, rebentou no triângulo de puro traço argentino, concluído por Lucho. Para variar, foi Lisandro quem assistiu.
It has nothing to do with Estrela, a great soccer club with the pay checks in delay...and that I respect a lot!, but FCPorto was the best during the championship! I was in Reboleira, when FCPorto got a draw there, after being winning for 85 minutes and for two nil... We suffered lot at that time, but justice was donne! JNPC, you are the greatest President in the world and of all times! Thank you PRESIDENT! But, please, forget the regionalist speaches: I LOVE FCP and I LOVE LISBON!
O banquete do dragão
FC PORTO FESTEJA "TRI" COM GOLEADA POR 6-0
A equipa de Jesualdo Ferreira marcou por 6 vezes, deu espectáculo e assegurou o título nacional (23.º do clube e 3.º consecutivo) perante um Estrela da Amadora que se revelou o adversário "ideal" para a festa http://www.record.pt/
Campeão não, TRICAMPEÃO!
O F.C. Porto é campeão. Tricampeão. A cinco jornadas do fim, com larga vantagem, sem margem para dúvidas. O Dragão voltou a ser o melhor, fortaleceu um estatuto com mais de duas décadas, mostrou argumentos inigualáveis, encantou os seus adeptos, espalhou o seu fogo. A temporada 2007/08 ficará para sempre pintada de azul e branco. http://www.fcporto.pt/Info/Futebol/fcpcampeao0708.asp
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