The Disastrous Death of Common Sense

The unrelenting deconstruction of British values

By Charles Crawford

Over the centuries English property law has invented many ingeniously pragmatic ways in which property can be owned. One key distinction shows itself every time a couple take out a new mortgage. They are offered a choice: a ‘tenancy in common’ or a ‘joint tenancy’.

The difference is as simple as it is profound. Under a tenancy in common, the property is owned by A and B in specific shares (eg half/half, one third/two thirds); A’s share can be sold or bequeathed to someone else, so B now co-owns the property with that new person. By contrast, if A and B own under a joint tenancy there are no identifiable shares: if A dies, A’s share automatically goes to B.

Why Democracies Will Always Go Bankrupt

Bankruptcy is the inevitable, inexorable end

By Gonzalo Lira

When I was growing up, finance was mother’s milk to me, especially as I was a bit of a math geek. But for my formal education, I was trained—rather rigorously, and in spite of my laziness—as a philosopher and a historian. This odd combination is why I have such a jaundiced view of economics: I don’t find economics particularly intimidating, or even particularly challenging—it’s just finance’s snooty but poor (and slightly daft) older cousin. History’s surprisingly ignorant and blinkered accountant. Philosophy and Math’s lightly retarded, Puritanically rigid, and altogether rather embarrassing spawn.

Now, it’s all good and fine for me to rant about how useless economics is—but these aren’t empty complaints on my part: I can point to a single, specific, monumental failing of economics—a failure in the discipline which pretty much proves my point:

The United States is going bankrupt—and economics cannot explain why.

Approaching the Wall

How Long Before America Hits the Wall?

BY TERRY COXON

Decades of manipulation by the Federal Reserve (through its creation of paper money) and by Congress (through its taxing and spending) have pushed the US economy into a circumstance that can't be sustained but from which there is no graceful exit.

With few exceptions, all of the noble souls who chose a career in "public service" and who've advanced to be voting members of Congress are committed to chronic deficits, though they deny it. For political purposes, deficits work. The people whose wishes come true through the spending side of the deficit are happy and vote to reelect. The people on the borrowing side of the deficit aren't complaining, since they willingly buy the Treasury bonds and Treasury bills that fund the deficit. And taxpayers generally tolerate deficits as a lesser evil than a tax hike.

Wal-Mart, The Victim of Extortion

It’s easier and more efficient in Mexico

By Jeffrey Tucker

Over the weekend, we were treated to a preposterous display of hectoring of allegations that Wal-Mart Mexico (prepare yourself for a shock) paid bribes to public officials for the legal right to do business in that country.

You see, to do serious business in America requires vast campaign contributions to several layers of elected politicians, an army of lobbyists in Washington, retired government employees on your board and public devotion to the American civic religion. It goes on every year and restarts every election cycle.

Even then, it is hard to know if you are going to get what you pay for.

It’s easier and more efficient in Mexico. You pay bribes directly. The decision maker gets the money. He or she clears the path for you to do the thing. The facilitator takes a slice. People mostly keep their promises. The deal is done.

Apparently, bribe paying in the United States is a sign of a healthy, functioning democracy; doing the same thing in Mexico in a more streamlined way is a criminal violation of the standards of good corporate governance.

Debt and Drugs. Rock and Roll, not so much

Debt and the Prostitution of America

"The borrower is a slave to the lender." Proverbs 22:7

BY CRIS SHERIDAN

Our entire nation is largely indebted to a single private corporation! Yes, that's right, the Federal Reserve—a privately held bank that is closing in on being the 2nd largest holder of US debt. At the rate its going, the Fed may actually be the number 1 largest holder in just a few months, surpassing that of China and Japan. If the above verse from Proverbs is correct, America is (or is certainly becoming) a slave to both private banks and foreign nations.

Since America is the largest debtor nation in the world, its survival depends on borrowing other people's money in exchange for a temporary service. Really, this is a form of prostitution. You see, when someone lends money to another in exchange for debt, the debtor is now indebted to the lender to continually perform a service until paying them back in full. Since this arrangement carries a considerable amount of risk, the debtor will usually entice the other party to offer their cash with a show of interest. If the deal appears attractive, money is given and the services rendered. Normally, however, with debt-based arrangements, if the one taking the money—the debtor—doesn't pay up in return, the lendor has full rights to their personal property. In the past, this meant you became their slave and performed whatever services they required.

Now, in the case of America, you have one single nation that is servicing so many clients simultaneously that fear is starting to rise over the threat of STDs. These “Sovereign Treasury Defaults”—as we may refer to them—were largely unheard of, however, until America decided to no longer allow the use of protection in all of its service-based relationships. The gold standard, as this protection was known, was put in place to maintain the financial health of the debt-issuer and ensure against the temptation of debasement, or inflating one’s currency.

In transition from the world’s greatest lender to the world’s greatest borrower, the US realized that it could no longer honor its vows and issued, in essence, a bill of divorce to its partners abroad. This was a direct admission that America was no longer financially healthy, i.e. living below its means, and that it was, instead, going to engage in servicing as many people as it needed in order to finance a growing tower of consumption and debt. Thus, the world's most desired bride soon became a harlot.

The world’s fiscal system has been rigged by Europe

Leaving Ponzi In The Dust

“Ideas are indeed the most dangerous weapons in the world.”

                                                         -Justice William O. Douglas

By Mark Grant

I am about to walk into a highly speculative and somewhat dangerous place. I make the journey though because when all the options for explanation are exhausted whatever is left; must be the truth.  There have been a lot comments about Europe indicating various Ponzi schemes and Ponzi bonds but it is now evident to me that we have not looked hard enough; long enough. Our range has been diminished by the sheer size of Europe’s undertaking and we have not dared to regard all of the facts as one all-encompassing plan in the fear of what we might find by doing so. So today I square up and look into the maw of the Beast and describe what I think is staring back at me.

A Sure Thing

Our System Is So Flawed That Fraud Is Mathematically Guaranteed

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it."

                                                          - Frederic Bastiat

Bill Black is a former bank regulator who played a central role in prosecuting the corruption responsible for the S&L crisis of the late 1980s. He is one of America's top experts on financial fraud. And he laments that the US has descended into a type of crony capitalism that makes continued fraud a virtual certainty - while increasingly neutering the safeguards intended to prevent and punish such abuse.

In this extensive interview, Bill explains why financial fraud is the most damaging type of fraud and also the hardest to prosecute. He also details how, through crony capitalism, it has become much more prevalent in our markets and political system. 

A warning: there's much revealed in this interview to make your blood boil. For example: the Office of Thrift Supervision. In the aftermath of the S&L crisis, this office brought 3,000 administration enforcements actions (a.k.a. lawsuits) against identified perpetrators. In a number of cases, they clawed back the funds and profits that the convicted parties had fraudulently obtained.

Phenomenal Gains in Manufacturing Productivity

Today's factory workers produce more output in an hour than workers in the 1940s produced in a day

By Mark Perry

The chart above shows annual real manufacturing output per worker from 1947-2011 using data released today by the BEA for GDP by industry, and data from the BLS on manufacturing employment. In 1950, the average U.S. factory worker produced $19,500 (in 2011 dollars) of output, and by 1976 the amount of output per worker had doubled to $38,500. Output per worker doubled again to $74,400 (in 2011 dollars) by 1997 (21 years later) and then doubled again to $152,800 by 2010, but it only took 13 years for the last doubling because worker productivity has been accelerating.  Last year, manufacturing output per worker increased to a new record high of $156,500 (see chart), and almost ten times the output per worker in 1947.  

In other words, the average American factory worker today produces more output in an hour than his or her counterpart produced working almost a ten hour day in 1947 - and that's why we're producing record levels of output with fewer workers.

Collapse of the EU a “Realistic Scenario”

Germany no longer controls the ECB

By Wolf Richter  

“Over the past months, we experienced a worrisome trend towards re-nationalization and ‘summitization,’” said Martin Schulz, President of the European Parliament and member of the German opposition SPD, to a forum of the European Commission on Wednesday. His complaints went to the heart of democracy at the European level. Government leaders were becoming “more arrogant” and made decisions “behind closed doors, in violation of the community method.” They were attempting “to create a fiscal union outside the control of parliament, bypassing the EU Commission.” Calls for reintroduction of border controls within the Schengen area were “an extremely dangerous development” because “any attack on the freedom of movement is an attack on the foundation of the European Union.” And so, he said, the collapse of the EU was a “realistic scenario.”

The Truth About Oil Subsidies

Class warfare between the producers and the looters

By Jeff Harding

Try this on your friends. Ask them if they think that Congress should eliminate subsidies to oil companies. I would guess that it would be almost unanimous that they should, at least from my experience.

But here is the trick: There are no oil subsidies.

Nothing good goes on in this place

Robert Wenzel's 'David' Speech Crushes Federal Reserve's 'Goliath' Dream

By Tyler Durden

In perhaps the most courageous (and likely must-read for future economists) speech ever given inside the New York Fed's shallowed hallowed walls, Economic Policy Journal's Robert Wenzel delivered the truth, the whole truth, and nothing but the truth to the monetary priesthood. Gracious from the start, Wenzel takes the Keynesian clap-trappers to task on almost every nonsensical and oblivious decision they have made in recent years.

"My views, I suspect, differ from beginning to end... I stand here confused as to how you see the world so differently than I do. I simply do not understand most of the thinking that goes on here at the Fed and I do not understand how this thinking can go on when in my view it smacks up against reality."

and further...

Justice Kennedy's Million Dollar Question

Can you create commerce in order to regulate it?

by Richard A. Epstein

The entire landscape of Congress’s constitutional powers changed on March 27, 2012, when, very early in the argument over the individual mandate, Justice Anthony Kennedy asked a somewhat shaken Solicitor General Donald Verrilli this simple question: “Can you create commerce in order to regulate it?”

Europe has yet to make Europeans

The current crisis is encouraging the citizens of the European Union to fall back on older, more deeply-rooted, national identities

By Gideon Rachman

“We have made Italy, now we must make Italians.” So said Massimo d’Azeglio, an Italian intellectual, just after his country’s unification in 1861. The current generation of EU politicians face a modern version of the d’Azeglio dilemma: They have made a European Union, now they must make Europeans.

The construction of a group identity typically takes generations. But Europe’s politicians no longer have the luxury of time. Unless they can persuade the 500m or so citizens of the EU to feel more attachment to Europe and less to their nations, they may be unable to take the necessary steps to save the euro.

A short history of feminism

Ideas meander for a long time before they reveal their destination

By George Jonas

The women’s movement didn’t start in the 1960s, when protesters set their bras on fire in New York’s Central Park. It’s taking nothing away from them to say that by the time they struck a match, Simone de Beauvoir’s “second sex” was already burning with a bright flame.

Nor did the women’s movement begin 60 years earlier, when the suffragettes started marching for the vote in Western capitals. (Where else? In Eastern capitals, men didn’t have the vote either.) Saying that the women’s movement started when Eve approached Adam with a suggestion about the nutritional value of apples sounds more accurate, but let’s leave it aside. It may never have happened.

War isn’t something to make the chest swell

It’s something to make the stomach sink

War doesn’t determine who is right — only who is left.

                           — Bertrand Russell

By Joel Bowman
Is the world marching off to battle? If history is any guide, the answer would seem to be a categorical, “always.”

“US may have to strike Iran: Republican VP prospect” read a headline from the wires yesterday afternoon.

Apparently Marco Rubio, one of the contenders tipped to fill Romney’s presidential ticket, said a unilateral “military solution” from the United States may be needed to stop Iran acquiring a nuclear bomb.

“America has acted unilaterally in the past,” gloated Rubio, “and I believe it should continue to do so in the future — when necessity requires.”

Greeks fight IMF over minimum wage

The Solidoodle Is A $500 3D Printer

By David Ponce

3D printing at home is a hot segment, but it’s one that’s consistently been light on growth mostly due to the high costs. The MakerBot Replicator we covered during CES was a step in the right direction, cost-wise, but it’s still $2,000 or so. Well it turns out that the company’s COO, Samuel Cervantes, went off on his own and made the Solidoodle you see above. It’s a 3D printer that costs $500. All you need to do is add a computer and you’ll be off printing almost any object that comes to mind. That’s the kind of price point that could see this tech take off. It does its printing much like the MakerBot did: by melting some plastic and extruding a fine line which it then uses to build the object, layer upon layer.

For an extra $50 you can get the Pro model, which allows you to print objects up to 6″ on all sides. It also has an “upgraded power supply, a spool holder to hold filament (which makes unattended printing much easier), and interior lighting.” The resolution of the printed objects depends on the height of each layer. Typical prints have a resolution of 0.3mm, but it’s possible to make 0.1mm layers, resulting in “top-notch looking prints.”

There’s a 6 to 8 week lead time for your orders, which you’re free to place right now.

The divided state of America

When the survival of morality becomes reliant on the findings of geneticists, you know that it is in trouble

Charles Murray’s new book is a valiant effort to explain why America's upper classes are now so hollow and defensive, and incapable of marshalling the moral resources to lead society

by Frank Furedi 

The nineteenth-century British politician Benjamin Disraeli once characterised ‘the rich and the poor’ as ‘two nations between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts and feelings, as if they were dwellers in different zones, or inhabitants of different planets’. It is a description that applies uncannily to contemporary American society.

I recall the first time I travelled to America – back in 1967 – having a discussion with my then girlfriend about how difficult it was to distinguish between the well-off and the not so well-off people on the streets of the places we visited. That was then. When I visit these days, I am struck by the contrast in appearance between rich and poor white citizens. They now look so different. They eat different food; they pursue different cultural interests; they speak differently; and, most important of all, they communicate values and attitudes that are often strikingly at odds with one another. It is all very redolent of the kind of social and cultural polarisation so prevalent during the nineteenth century.

A Caveman’s Account of “Civilized Society”

It’s my way…or I club you to death

By Joel Bowman

Freedom has a thousand charms to show,That slaves, howe’er contented, never know.

                                 — William Cowper, Table Talk

Emblazoned across the lucre-basted exterior of the Internal Revenue Service building in Washington DC, reads one of the most intellectually polluted quotes any free mind is ever likely to encounter:

“Taxes are the price we pay for a civilized society.”

Despertar (Awakening)

Dedicated to all Castro's intellectual collaborators around the world

By Generation Y Blog
He holds the microphone pressed to his mouth and his dreadlocks swing restlessly across his back. Raudel Collazo is on stage: sweating, singing, talking, the whole time a chorus of applause joining the music. After the concert he returns to his house in Guines, to the narrow broken sidewalk along which he walks his daughter to school, to his mother with the white wrap around her head. The documentary Despertar (Awakening), directed by Anthony Bubaire and Ricardo Figueredo, explores the man who gives his body over to banned music. On the screen, it exposes the concerns that he voices in the lyrics of el Escuadron Patriota — the Patriot Squadron. Filling out this exploration, the camera also captures the everyday family and personal images that have been narrated in his songs.

Why José Daniel?

Because that's what dictators do

By Yoani Sánchez 

I knew they would go after him. When I spoke with José Daniel Ferrer for the first time, by phone, I immediately noticed his exceptionality. Shortly after, we talked around the table in our house and this impression was further confirmed. While outside night was coming on, the man from Palmarito de Cauto told us of the years he spent in prison, from the Black Spring of 2003 to mid-2011. The beatings, the denouncing, the inmates who respectfully called him “the politician” and the guards who tried to crush him by force. We spent hours listening to those stories, at times of horror and at others of true miracles. Like when he managed to hide a small radio, his most precious possession, from the searches until he himself smashed it against the floor, seconds before a guard confiscated it.

We deserve to get it good and hard, and we will

H.L. Mencken Was Right

“Democracy is also a form of worship. It is the worship of Jackals by Jackasses. It is the theory that the common people know what they want, and deserve to get it good and hard.”

by Jim Quinn

H.L. Mencken was a renowned newspaper columnist for the Baltimore Sun from 1906 until 1948. His biting sarcasm seems to fit perfectly in today’s world. His acerbic satirical writings on government, democracy, politicians and the ignorant masses are as true today as they were then. I believe the reason his words hit home is because he was writing during the last Unraveling and Crisis periods in America. The similarities cannot be denied. There are no journalists of his stature working in the mainstream media today. His acerbic wit is nowhere to be found among the lightweight shills that parrot their corporate masters’ propaganda on a daily basis and unquestioningly report the fabrications spewed by our government. Mencken’s skepticism of all institutions is an unknown quality in the vapid world of present day journalism.

France: The Coming Waterloo

The growing gulf between the illusions fostered by the ruling class and the world as it actually is

By Fabio Rafael Fiallo

In France, conditions appear to be set for a rout that - relatively speaking - bears a triple similitude with the defeat of Napoleon at Waterloo in 1815. Except that, this time, the scene takes place, not on the military-geopolitical ground, but in the realm of finance, and for that matter of the economy in general.

First similitude: in both cases there exists a gulf between, on the one hand, the illusions fostered by the ruling class and, on the other, the world as it actually is.

Indeed, just as Napoleon's France tried to impose her geopolitical pretensions upon the whole Europe even at the twilight of her power, so too a good tranche of today's political establishment in France keeps the public opinion under the illusion that a France with a shrinking weight in the world economy can maintain alive a profligate Welfare State that is seriously impairing the country's competitiveness and finances.

A manifestation of this Napoleonic rejection of reality relates to the flow of extravagant, capitalism-bashing stances taken during the current electoral campaign. In order to explain why things go bad in France, presidential candidates make believe (some more than others) that the culprit of the country's woes is to be found in the outside world - globalization of the world economy, low wages in emerging economies, "voracity" of financial markets, transnational corporations' search of profit-maximization, immigration flows - rather in France's dispendious "social model" and labor-market rigidities.

Sweden’s secret recipe

Advice from a successful – and tax-cutting – finance minister

By FRASER NELSON

When Europe’s finance ministers meet for a group photo, it’s easy to spot the rebel — Anders Borg has a ponytail and earring. What actually marks him out, though, is how he responded to the crash. While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden’s finance minister, his mission has been to pare back government. His ‘stimulus’ was a permanent tax cut. To critics, this was fiscal lunacy — the so-called ‘punk tax cutting’ agenda. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result.

Three years on, it’s pretty clear who was right. ‘Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus,’ he says. ‘Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.’ Tax-cutting Sweden, by contrast, had the fastest growth in Europe last year, when it also celebrated the abolition of its deficit. The recovery started just in time for the 2010 Swedish election, in which the Conservatives were re-elected for the first time in history.

A New Global Warming Alarmist Tactic

Real Temperature Measurements Don't Matter

By James Taylor

What do you do if you are a global warming alarmist and real-world temperatures do not warm as much as your climate model predicted? Here’s one answer: you claim that your model’s propensity to predict more warming than has actually occurred shouldn’t prejudice your faith in the same model’s future predictions. Thus, anyone who points out the truth that your climate model has failed its real-world test remains a “science denier.”

Climate scientist Roger Pielke Sr. reports on his webpage that he recently reviewed a paper that had the following assertion, “A global climate model that does not simulate current climate accurately does not necessarily imply that it cannot produce accurate projections.” (!)

A Farewell to Factories

Calls to address decline of manufacturing sector in the United States are misguided

By Gary Becker

Manufacturing employment as a fraction of total employment has been declining for the past half century in the United States and the great majority of other developed countries. A 1968 book about developments in the American economy by Victor Fuchs was already entitled "The Service Economy." Although the absolute number of jobs in American manufacturing was rather constant at about 17 million from 1969 to 2002, manufacturing's share of jobs continued to decline from about 28 percent in 1962 to only 9 percent in 2011.

Concern about manufacturing jobs has become magnified as a result of the sharp drop in the absolute number of jobs since 2002. Much of this decline occurred prior to the start of the Great Recession in 2008, but many more manufacturing jobs disappeared rapidly during the recession. Employment in manufacturing has already picked up some from its trough as the American economy experiences modest economic growth, and this employment will pick up more when growth accelerates.

Japan must change

Three Reasons Japan’s Economic Pain Is Getting Worse

By Jared Diamond

Japan’s economic problems are serious and getting worse. Foremost among them is the crushing burden of government debt.

Japan’s ratio of government debt to gross domestic product, currently about 2.28, is by far the highest in the industrial world, almost double that of even Greece and Italy, and steadily growing. Already, the combined costs of interest on that debt and social security are approximately equal to total government tax revenue.

Japan’s trade balance is about to go negative for the first time since 1980. Land values and Nikkei stock values have fallen to about 30 percent of 1989 levels. Now, educated young Japanese women are emigrating, Japanese companies are shifting production overseas (even to the U.S.), national politics are in gridlock (six prime ministers in the past five years), and last year Japan experienced its first mass street protests in decades.

Some Tolstoyan advice for the UK on debt

Unindebted countries are all alike; overindebted countries are overindebted in their own way

By Martin Wolf

The UK’s debt problem has been exaggerated. That was the thesis of a provocative speech on “deleveraging” by Ben Broadbent, a member of the Bank of England’s Monetary Policy Committee, in March. Is this convincing? What does it imply?

Japan shrinks

Japan is now a "net mortality society"

By Nicholas Eberstadt

In 2006, Japan reached a demographic and social turning point. According to Tokyo's official statistics, deaths that year very slightly outnumbered births. Nothing like this had been recorded since 1945, the year of Japan's catastrophic defeat in World War II. But 2006 was not a curious perturbation. Rather, it was the harbinger of a new national norm.

A euro parable

The couple with a joint account

By Kenneth Rogoff
Perhaps the following parable is not entirely fair to the euro, but nevertheless the parallels seem striking.

Consider a young couple who is contemplating marriage, but unsure whether to take the big step. So instead they decide to test things out by opening a joint bank account. At first things go remarkably smoothly. Heady with success, they get the inspiration of extending the arrangement to her brother and his sister. Not only do they hope to show their siblings how well they can cooperate, but with four people, the total size of the account reaches the critical threshold needed to receive exorbitant privileges normally accorded to the bank’s larger customers.

Thanks to a cleverly designed constraint to limit imbalances between each sibling’s contributions and withdrawals, the innovative experiment continues to flourish. There is no real enforcement mechanism, but the two sets of siblings are determined to make the arrangement succeed. Forced to interact routinely, the couple and their siblings start becoming closer. They even start having dinners together on a routine basis.

North Korea redefines 'minimum' wage

North Korea as a Modern Day Nuclear Sparta

By Andrei Lankov 

When one talks about virtually any country, wages and salaries are one of the most important things to be considered. How much does a clerk or a doctor, a builder or a shopkeeper earn there? What is their survival income, and above what level can a person be considered rich? 

Such questions are pertinent to impoverished North Korea, but this is the Hermit Kingdom, so answering such seemingly simple questions creates a whole host of problems. 

We could look first at official salaries but this is not easy since statistics on this are never published in North Korea. Nonetheless, it is known from reports of foreign visitors and sojourners that in the 1970s and 1980s, most North Koreans earned between 50 to 100 won per month, with 70 won being the average salary. 

Vive La Resistance?

France votes to throw down the gauntlet to Europe

By Gideon Rachman

The battle for France has a couple of weeks to run. After that, the battle for Europe will begin. Both Nicolas Sarkozy and his challenger in the French presidential election, François Hollande, are promising to save the “French exception” by radically changing the direction of the European Union.

Most of France’s European partners are inclined to dismiss the two candidates’ rhetoric as cynical sloganeering, as they gear up for the final round of voting on May 6. It is assumed that, at the conference table in Brussels, France will be “reasonable”. But that is complacent. In Sunday’s first round of voting, the far right and far left scooped up about one-third of the votes. This election has already revealed a deep French anxiety about globalisation, austerity and national identity to which all the candidates pandered to. That will be reflected in France’s behaviour in Europe.

Russia's Greek Gambit

Yusufov fights to keep bid for Greek DEPA alive

By Robert M Cutler 

An investment vehicle created by a former Russian energy minister and Gazprom director has appealed against its exclusion from bidding for the Greek public gas utility DEPA. Igor Yusufov's Fund Energy has been suspected of being Gazprom's "Plan B" in the stakes for DEPA, which is being privatized as a result of the crisis in Greek government finances. Yusufov is "part of Russian Prime Minister Vladimir Putin's inner circle, and has already been active in Cyprus", according to the Athens newspaper Kathimerini. 

Gazprom's interest in DEPA stems from the Greek utility's participation in the Interconnector Greece-Italy (IGI) project, a planned natural gas pipeline that has lost out against the Trans-Adriatic Pipeline (TAP) in the competition for candidacy for the "western route" for Azerbaijan's offshore Shah Deniz gas to Europe. 

The French road to perdition

Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back

By Martin Hutchinson 

The French presidential election vote on May 6 is important not only to France; on it rests the future of the euro. Spain, about which the markets have been agonizing for the last few weeks, is merely a sideshow; it has only moderate levels of international debt and could at a pinch be bailed out by its European partners if necessary. 

France is however both considerably larger, and when looked at closely, in poorer shape. If it gets into trouble, it also leaves a rather small group of nations with the "duty" of supporting it. If Nicolas Sarkozy is re-elected, France will probably muddle through, but his opponents' policies are sufficiently bad that if one of them is elected the collapse of both French public finances and the euro system are very likely. 

Feeding Europe's Drug Addiction

Banks Gorging on Sovereign Bonds Shifts Risk

A drug addict lays on the ground in central Athens. Addicts have been a presence in Athens city center for more than 20 years, but with the recent crisis, things are getting worse for them, according to Philippos Dragoumis, president of a municipal center for prevention.

By Yalman Onaran

Spanish, Italian and Portuguese banks are loading up on bonds issued by their own governments, a move that shifts more of the risk of sovereign default to European taxpayers from private creditors.

Holdings of Spanish government debt by lenders based in the country jumped 26 percent in two months, to 220 billion euros ($289 billion) at the end of January, data from Spain’s treasury show. Italian banks increased ownership of their nation’s sovereign bonds by 31 percent to 267 billion euros in the three months ended in February, according to Bank of Italy data.