Porsche in the fast lane?

Automobile


By Julian Sudre

Shifting into high gear is what Porsche excells at; but the recent statement from the luxurious car maker revealed it earned three times as much money from trading derivatives - or share options - as it did from selling cars. The latest news that the Stuttgart-based company made $5.2bn (3.6 bn euros) last year from those shares against just 1bn euros from its so called core carmaking business. As a result a fury of speculation erupted on all sides as Porsche could be more perceived as a hedge fund than a car maker.
But Porsche's stock has gained a hefty 70 per cent this year; with a workforce of only 12000 the volume of the company has reached 29.1 bn euros that is more than twice that of GM Corps, the world's largest automaker.

A sigh of relief was heard a couple of days ago when the company announced that it would not break up Volkswagen. Labour leaders and VW's work force were pleased to hear that their largest shareholder -- 31 per cent stake -- was keeping the current structure of the company.
Such a move could have created more confusion about the stance of Porsche as its recent critics named it a hedge fund that evidently could have taken apart VW.
Chief Executive Wendelin Wiedekin and Chief Financial Officer Holger Haerter also denied rumours of mergers but aknowleged that its stake-building in VW had caused "uncertainties" amongst some Volkswagen employees. Mr Wiedekin was lambasted when it referred to VW as a "goldmine".
Porsche has spent about $7.3bn over the last few years building up its stakes in VW and will stand to benefit heavily in the coming years of VW.
The luxury German automaker raised hackles recently when it confirmed it had set up a holding company for its VW stake that gives VW employees less influence than they are used to.
The company allocates three supervisory-board seats to VW workers and three to Porsche workers, an arrangement that is critised as inappropriate by VW labours leaders.
Shares in Porsche tumbled by 6.5 per cent today amid concern that the US economy is slowing. The company got 35 per cent of its revenue in 2006 from US sales. Operating profit fell to 1bn euros in its fiscal year through July from 1.2 bn euros a year earlier, excluding gains from VW.

MERGER OF NIKANOR AND KATANGA

By Julian Sudre



Mining

Nikanor, the Aim-listed mining group with assets in the heart of the African copperbelt in the Republic Democratic of Congo, had its shares lifted 24p to 644p today when a merger with Mining group, Katanga was announced.

Katanga, the Toronto Stock Exchange-listed company agreed to a $2.1bn to buy Nikanor and the combined firm is expected to generate a $3.3bn market capitalisation along with being the largest copper producer in Africa and the largest cobalt producer in the world.
Such merger will produce an output potential of 400 000 tonnes of copper cathode and 40 000 tonnes of cobalt.

Kantanga will issue 0.613 of a share and pay $2.16 for each share. Nikanor shareholders will hold a 60 per cent of the combines company and Kantaga shareholders will have the other 40 per cent.
Shares in Katanga soared 42 per cent while Nikara's were up 5.4 per cent.

"Transacting the deal now gives us the best opportunity to lower the overall capital spending and deliver maximum benefit from consolidated suite of operations" said Arthur Ditto, the CEO who will lead the merged company.

The merged company will retain the name Katanga Mining Limited and will apply for a primary listing on the main market of the London Stock Exchange and will have therefore have primary listings on the TSX and LSE.

BATTLE FOR CONTROL

By Julian Sudre




Banking


More fuel was added to the banking fire when Merrill Lynch announced 10 days ago that it was taking a $8bn-worth of losses on mortages related securities. The writedown was twice the size of the losses that the bank had forecast a couple of weeks back. But to add insult to injury, some financial analysts expect that the banks may make another $4bn write-off in the coming months.
UBS unveiled $3.4bn of third-quarter mortgage-related losses last week and could be prone to taking up to $8bn more losses in the fourth quater of this year. The lastest blow was taken by Citi when the world biggest bank reported $6.5bn in writedowns and losses from credit markets.
Since the announcement, Citi has lost more than a fifth ot its market value and its shares have plummeted 25 per cent in three weeks.
Evidence has proven that the credit turmoil not only has hit the big US banks but also British bank such as Barclays which triggered concerns for investors when shares at the bank lost nearly 6 per cent of friday and amid unsubtantiated reports that it had been forced to seek emergency funds from the Bank of England.
When bullish american analysts forecast that the the credit crunch was over in September, it seems now that people in the City and Wall Street are getting jittery to open more cupboards and find dead bodies lying there. Such tsunami of red ink has engendered a tremendous amount of anxiety amongst investors as this time the $20bn mortgage holdings-related writedown does not appear to have captured all the potential losses.

Citigroup's chief executive, Charles Prince resigned on sunday as investors hope his departure will lead to a break-up of the company. Meredith Whitney, the CIBC World Markets' financial analyst believes the only way forward for new Chairman Robert Rubin and interim chief executive Sir Win Bischoff is to carve the bank up and sell it off. Nevertheless Prince al-Waleed bin Talal, a long-term investor who owns 3.6 per cent stake in City oppposed any break-up.
Tough times for Prince have hit the headlines in recent days more particulary when back in the summer he was reported saying "as long as the music is playing, you have got to get up and dance." What's more he was branded a deal junkie and appeared to have turned a blind eye to the storm in credit markets. The bank said it faced additional writedowns of between $8 to $11bn with shares falling 4.9 per cent to $35.90 after a slide of 11.5 per cent last week and now lie at their lowest level in more than four years. But investors were stumped to know that the bank has a $55bn in subprime mortgage-related exposure on its balance sheet, a number that was vasly larger than the previous assessment of its position as closer to $13bn.

But yesterday the focus was on UBS, which indicated last week it may be forced to take further writedowns in the fourth quarter which could be up to $8.5bn according to Lehman Brothers.
Shares in Barclays and RBS dropped yesterday -- both banks with substantial fixed-income activities -- as investors fretted over more losses to be disclosed.

Nevertheless, after Merrill Lynch ousted its chief, Stan O'neil and Citi's resignation of Chuck Prince; the latter bank made a firm debut yesterday on the Tokyo Stock Exchange rising a five per cent. Citigroup is in the process of acquiring 100 per cent of Nikkio Cordial, Japan 's third-largest securities group, through a share swap that will give current Nikkio Cordial shareholders, shares in Citigroup.

Superfund... impulsive idea?

By Julian Sudre


When three major US investment banks teamed up to create a superfund of $75bn so as to dampen further catastrophy in the markets, instantly we knew that Armaggeddon will be kept in check -- er, maybe not quite.

As the passengers realised that the ship they were on was scuppered, they compulsively jumped off into cold waters; perhaps the knee-jerk reaction of Bank of America, Citigroup and JP Morgan could do with some restructuring.
The purpose of the fund is to buy assets of ailing so called " Structured Investment Vehicles" in order to prevent a firesale of billion of dollars, thus the prevention of dumping securities or putting them back on to the banks' balance sheets. The problem with SIV is they are unable to sell commercial paper pushing up bonds price and borrowing costs up hence the slowing down of the US and European economy growth.

Recently former Fed Reserves chairman, Alan Greenspan voiced concern about the fund as it may actually hurt jittery financial markets.
In effect, the lower dollar means a reduced trade deficit because the US is exporting more and importing less and more foreign investments are good for the american economy but the flip side of it is that the oil is priced in dollars -- that is, if the dollar keeps falling, the oil will go up.

Not to be oudone, the latest figure to pour scorn on the superfund encouraged by the US Treasury, the renowned investor Warren Buffet, believes those banks should sell 10 per cent of the fund into the open market to ensure it is properly priced.
Paulson, a former CEO of Goldman's Sachs and today US Treasury Secretary, is trying to get european banks into the fund. Deutsche Bank's chief, Josef Ackermann is nonetheless reluctant in joining the fund. Mr Ackermann said it was premature to make a firm judgement about the fund.
Obviously Paulson has been fighting off critics of the master liquidity enhancement conduit or M-LEC but he insists that such fund could accelerate the return of liquidity to parts of the markets; and therefore it should be seen as a complementary to other initiatives. The US Treasury Secretary stresses that the concept for investors working with banks to buy assets that are not credit impaired. Still, it is noteworthy to add that the superfund is a very complex initiative and some investment banks said they did not understand it.

Basically, the superfund is a super conduit or in other words a restructured SIV. Structured Investment Vehicles issue short-term debts to invest in longer-term securities. The fund is designed to hold these assets until investors can better evaluate the difficult rates for the mortgages backing these bonds and other securities. Although, in all fairness, this process could take a year or two to get off the ground.
Today, investors have become sceptical about it as they believe it's primarily another SIV and amounts to a bailout for banks. Would it amount to say that it is a restructuring of previously financed transactions? Well yes, and let us take into account that one bank -- Citi -- has its exposure to SIV's estimated at a stonking $80bn.

The superfund is slated to be launched at the end if the year but its lack of details and the way it will operate seem to be indeed opaque to investors, the reason why one gets to wonder if it is that super a fund.

MARKET REPORT

By Julian Sudre

There was a certain form of optimism in the air that investors have been breathing in lately even though the miasma of turbulence impaired healthy speculations; it has seemed that everyone was oblivious to the long-term repercussions in the markets. A string of banks issued profits warnings while shares were going north.
The latest investment bank Merrill Lynch announced yesterday that its US mortgage-related losses were not $4.5bn but $7.9bn which resulted in an indeed very volatile session for Wall Street stocks.
Now the procrustean bed has to be un-made as it is time people in the financial sector ate humble pie because on the strengh of another set of weak US housing data and a surge in oil prices added fuel to the fire once again.
Meanwhile Industrial and Commercial Bank of China - ICBC - is to aquire a stake of about 20 per cent in Standard Bank, the largest African bank by assets.
The chinese bank is coughing up £2.6bn according to a banker close to the deal.
It will be the largest banking deal in South Africa since Barclays bought Absa Group.
GSK, the second-largest pharmaceuticals company reported third-quarter profits 7 per cent lower at £1.9b is to take a significant charge this year that will depress earnings per share growth below the 2007 guidance it gave in February of 8-10 per cent at constant exchange rates. The £1.5bn "operational excellence" programme will see the closure of factories and several thousand job cuts in the coming months.
RV Capital, a london-based market-maker that trades in futures was the latest casualty of the credit market turmoil after putting itself into administration yesterday facing losses of £10.4m -£14m so far.
Another grim news for BP which reported it will cut about 17 per cent of its onshore workforce for the North Sea with an average of 350 jobs to be slashed as part of plans to downsize from the North Sea, where its production has dropped by more than a third in three years.
In the mining sector, production problems cut Kazakhmys' output in its third quarter, with copper ore extraction down 19 per cent year-on-year. The shares in the Kazakhsran-based company were pushed down 108p or 7.2 per cent to £13.77 yesterday.
The production of cathode, a refined copper, was almost 19 per cent lower in the third quarter.
The reduced output of the company has had a knock-on effect on production of other minerals.
Zinc in concentrate slipped 18 per cent and zinc metal was more than halved.
On the upside, Home Retail showed a 40 per cent rise in first-half profits as it benefited from stronger-than-expected earnings at Argos, its catalogue business. Underlying profits at Argos increased 50 per cent to £99.5m and sales were up 1.4 per cent like-for-like but down 2.5 per cent at Homebase. Overall group sales rose 3 per cent to £2.74bn. Pre-tax profits were £169.3m compared with £59.7m last time.
In the banking sector, JP Morgan is considering acquiring a stake in a chinese brokerage as part of its expansion strategy in the country. But other banks, including Merrill Lynch, Citigroup, Deutshe Bank and Credit Suisse, are believed to be preparing to negotiate deals to set up Chinese brokerage joint ventures.
Mounting concerns about the 787 programme has triggered Boeing to cut its sales forecasts for next year by $3.5bn or 5 per cent as a result of the announced delays to deliveries of the new 787 Dreamliner.

Where are the markets headed?

By julian Sudre

While major investment banks started licking their wounds and faced the rude awakening of issuing profits warnings with a write-down of altogether more than $10bn, caused by the sub-prime and credit woes. The turbulence in the money markets with the aggressive fed rates cut by half a point and a three-month Libor rate hovering at some vertiginous 6 per cent – those were decidedly the anaphylactic shock that has sent the American currency packing.

But to add insult to injury, the Australian dollar could be taking a leaf out of his Canadian counterpart when the “Aussie” yesterday reached its strongest level against the US dollar in nearly a quarter of a century. Worryingly enough, if the Fed would further step in for a cut, the dollar would be once again the one that would carry the can and European economists would be the ones who would try staunchly to dampen the rise of the Euro as a result. The effects could be dramatic, but all things considered that would explain the surge of funds into emerging markets and the outperformance of companies with profits outside the US.

The gymnastics of stocks fluctuations alongside fears of dipping into recession and flying speculations over the malaise in the credit markets have made themselves felt on the European markets – which remain below their highs.

Whereas in the US, The S&P 500 and the Dow Jones Industrial Average have retouched all-time highs perhaps thanks to last week’s US job report that was better than expected. So the American dollar could actually not be headed for the dungeon?

Some insiders have it that the dollar is cyclical not structural and a rally in 2008 could be a possibility. Well, it's noteworthy to take a long-view of factors that could destabilise the dollar. Thus, the real-estate bubble starts collapsing, the continued trade deficit, oil trading in Euro and the Iran oil Bourse; and the Bank of China's decision to to allow investors to buy and sell gold using their USD, and the increasing risk of conflict with China. Syria indeed, rattled the US's cage on February 14 2006 when it switched of all the state's foreign currency transactions to Euro from Dollar and Venezuela's president Hugo Chavez is also trying to get away from the fiat Dollar.

Over, at the other end of the financial spectrum, the steel industry has been on a roll. Over the last five years, demands and profits booms have proven that countries such as China are the main driver of the prosperity of the commodity. The reason behind this has been an increase in car production but also the 2008 Olympic Games. Ergo, prices of raw materials show no sign of easing; iron ore prices are on the increase with a 9.5 per cent rise this year after soaring 19 per cent in 2006 and jumping 71.5 per cent in 2005. It certainly is good news for the mining industry. But also, these are good time to be in aluminium with perhaps not such a dramatic boom as that of copper but it has triggered some of its biggest takeove deals.

Rusal of Russia in April completed a takeover of its smaller compatriot, Sual, and the aluminium assets of Glencore, the Swiss commodities trader, creating a company estimating to be worth in the region of $30bn. Today United Company Rusal has overtaken Alcoa of the US as the world's biggest aluminium producer. So now, where do we get from here?

Is the dollar in the doldrums?

By Julian Sudre

While the recent 50 basis points rate cut by the Federal Reserve to 4.75 per cent has undoubtedly boosted stock markets, the aggressive cut was a single whammy for the greenback and now investors are focusing on concerns over US growth and inflation. The dollar today has reached an all-time low against the euro and speculations that Saudi Arabia might revalue the riyal for the first time in 21 years has exacerbated sentiments – a move that Kuwait took in May when it dropped the long-held dollar peg.

Now, the US dollar is at parity with its Canadian counterpart for the first time since 1976. Analysts have started to wonder how far the impact of the US economy could be affected.

Sources close to the matter have said that the Fed was swapping systematic and liquidity risk for longer-term inflation risk.

Of course a lower currency typically fosters worries for inflation but its yearly continual decline that was too gradual did not trigger the Fed to consider raising interest rates instead.

On one hand, the falling dollar is good news for multinational corporations as American-made goods are more affordable in international markets but on the other hand foreign investors who contribute to finance the country’s debt will be frightened away. The result will aggravate investment in US Treasury securities and the US government will have to pay higher rates at weekly auctions to find buyers for its bills, notes and bonds. The borrowing costs for Americans could be pushed up.

US economic concerns were compounded by a six-month fall in sales of existing homes with a US home prices decline – a steepest drop in 16 years.

Those declines have given food for thought to the Federal Reserve and although it is too early days to lower the benchmark interest rate further, the question is now what will happen at the two remaining meetings this year.

Bank of England Versus FSA and Government

By Julian Sudre

Perhaps the old Victorian approach of the Bank of England after all has been extenuated by the recent bail out of the fourth biggest lender in the UK – Northern Rock. Well not just so. While we have a case of hands-on US intervention versus hands-off UK intervention, the vulture press has seemed to swoop down on Mervyn King.

As usual, someone has to take the rap; the Pavlonian response was Mr King to be blamed for as it was for the McCann’s.

While some say that the Governor of the Bank of England was stitched up by the Clunking Fist of New Labour. By doing a U-turn and injecting liquidity into Northern Rock, the latter will be perceived as nationalised and certainly will undermine Gordon Brown's credibility as he was the one who created a fully independent Bank. So Has Mr King bowed to political pressure to pump £10 bn into the financial markets?. I for one, believe that the BoE shouldn’t have provided funds but instead should have ensured that the financial system runs smoothly.

In any event, we should note that the FSE is responsible for the supervisions of the banks, hence the next in the line of fire: “please step forward Mr Callum McCarthy”.

Mr King had certainly his hands full when it came to gauge how far to extend liquidity against a wider range of collateral on the one hand and the concern of moral hazard on the other – the danger of rewarding banks that had taken a riskier approach than others. But he went on to say that the moral hazard was limited by a cap on the amount the Bank was providing to individual banks and by the penal rate of interest.

He insisted that it would have been irresponsible to have offered a full guarantee on savers’ deposits before the run on Northern Rock since that would have undermined confidence in the banking system. This is seen as yet another indication of how the Bank’s Governor has misjudged the delicate psyche of the markets.

But according to Mervyn King, Northern Rock debacle was blamed of four pieces of legislations: The Takeover Code, the Market Abuse Directive, the Insolvency regime enshrined in Enterprise Act 2002 and the Financial Services Compensation Scheme.

So after feeding Mr Kind to the Lions, in two weeks time FSA officials will appear in Parliament. And since this is the FSA which is supposed to know whether individual banks might face a liquidity squeeze and does routinely deal with asset managers, insurance groups and bankers, this time the FSA did not demonstrate any visible awareness of liquidity challenges before the summer in the banking world. Meanwhile I have come away with the feeling that the Bank's Governor has been used as a scapogoat by the dead hand of the Tresuary.
At any rate, all things being equal, if the Bank had agreed to accept mortgage collateral at its lending window ealier as Mr Darling believes, that is taking a cue from the Feds or the ECB, the damages could have been avoided. This remains to be seen because Northern Rock got itself into trouble through over-reliance on short-term funding from the capital markets.

Of course, we know by now that the FSA was more in favour of relaxing rules but it undeniably was not felt enough to make an impact across the board. Today relations between the BoE and the FSA are poisonous, no less.

Now, let's wait with bated breath if the whole issue revolving around the snap decision to inject money was a pretext from Labour to force a loosening in monetary policy.

MARKET REPORT

By Julian Sudre

The elements have been felt across money markets; European and Asian equities put in mixed performances and the yen lost ground against most major currencies – most notably the high-yielding Australian dollar. Also Canada which has been affected by the commercial paper crisis had to raise its rate in July for the first time in more than a year. The market has remained frozen mostly due from issuers’ inability in mid-August to roll over maturing issues as a result of the credit turmoil in the US sub-prime market. Hence, some of the big issuers of asset-backed paper in Canada are still unable to find buyers, forcing them to warehouse securities and in some cases, draw on bank loans.

The maxim, it never rains but it pours could not be more adequate in these circumstances with the presence of Hurricane Felix lurking about in the Gulf of Mexico. Oil prices were pushed higher amid concerns about potential damages. Meanwhile money-market lending rose to their highest level in more than eight years. The three-month interbank rate or Libor had climbed to 6.7975 per cent more than a percentage point above the 5.75 per cent base rate.

Undeniably, this has had the impact of the domino effect in financial markets with another hedge fund – Synapse Investment Management closing a £135m fund investment in asset-backed securities (ABS) owing to severe illiquidity in the market for investment.

Weather-ravaged Australia and Argentina which represent about 23 per cent of global wheat export have fallen on hard times. Wheat prices last week rose above the $8-a-bushel level for the first time ever in Chicago, soaring in August more than 20 per cent – the steepest monthly increase in more than 30 years.

Although the discount rate used by the Federal Reserve which has been dismissed by many observers as a “symbolic gesture” could actually show that it is a great indicator of the direction of monetary policy. When it changes direction, it signals a shift between expansionary and restrictive monetary policy.

Such sectors as resources, consumer staples, and utilities remain mostly insensitive to the overall economy could be used as defensive stocks when the discount rate goes up – that is the start of restrictive policy. But when the rate is cut, the idea would be to buy cyclical stocks such as consumer discretionary, financials, industrials and technology, ergo signalling easier money.

Be as it may, nevertheless, such crude strategy would have beaten the market by 3. 78 per cent a year between 1973 and 2005.

The discount rate, so far, has shown to be a remarkably powerful signal.

MODAFINIL: IT'S NOT ALL IT'S CRACKED UP TO BE?

With a pill called modafinil, you can go 40 hours without sleep -- and see into the future. (Peter Bennett)

Back in 1970, a group of scientists working with the French pharmaceutical company, Lafon, created a series of benzhydryl sulfinyl compounds including adrafinil.

The latter drug was offered as an experimental treatment for narcoleptic in France in 1986.

Since time immemorial, the interest in portends that could eschew sleep without side effects has proven to be a question of somewhat substantial weight.

As pills go -- Modafinil -- a primary metabolite of adrinil, which has similar activity but much more widely used, has shot to fame lately due to its remarkable effects on users.

It has been prescribed since 1994 in France under the name Modiodal and in the US since 1988 as Provigil. It was approved in the UK in 1992, and even during the Falklands war, the military was plying it to keep its soldiers awake for days on end without having similar side effects as illegal drugs.

I joined all the dots, and with great trepidation I ordered on the internet a box of the soit-disant go-pills.

The first hour after downing the pill could have been like gobbling paracetamol; the expectation of some mechanism being kicked in did not seem to be an ad-hoc modus operandi that could pep my brain up. But slowly, a hum creeped up on me; very slyly though. I felt a mere living beast interfering with my cerebral network. The underlying intensity played with softly manner upon my reckoning and ability to observe with trenchant judgment the results of an altered state of mind.

The drug was about to spread its emery tentacles that would rasp upon my central nervous system. Sleep was about to dwindle down as I donned my Stakhanovite hat.

The concentration was sharp as tack and then I threw myself effortlessly into studious applications of mine.

Perhaps drinking a couple of espressos could have had the same kick, Modafinil should be purposefully consumed when you plan on being active either mentally or physically.

As I was waiting with bated breath for the kick-off of the drug, waves of nervousness splashed relentlessly against my mood. I felt the agitation welling up and pinging me in the side of my head. Its effect starting moaning under the weight of my suppressing it, this is when, I mishandled its function. Ergo, I tensed up and plunged into some fictitious scenarios of mine that spiralled my fear with felocity into a realm of panic.

Your mind needs to be geared up for action or you’ll start fidgeting about with twitchy spurts of anxiety. Once you have the beast unleashed, let it go its own way, and draw on its energy to apply yourself to specific work. The dance macabre is soft and smooth.

Also, it might be so suble to feel at times as it flutters inaudibly within you, it may appear to have no potency. The only way to notice it is through activity. But in most cases, its slight push has proven to keep the brain firing on all cylinders without the side-effects -- well so far.

SHOULD IRAN BE EMANCIPATED FROM WESTERN FEARS

By Julian Sudre

Sanctimonious ballyhoo poured forth; a political stratagem that spouts the equal footing of a nation, which praises to the skies that "sustainable energy that is for the development of Iran and expansion of peace in the world", has extraodinarily pressed for recognition of its production of nuclear fuel on an industrial scale.

But such national declaration, perceived more as a political showmanship than technological progress, has made Iran, since the release of the British Marines, a country, by all accounts, frolicking with the grandees of the West in an attempt to thrust its imminent weight against [sectarian] politics that have been embraced by the Western world.

The riposte voiced by Mr Ahmadinejad on April 9 that the Iranian nation will defend its rights and that its path is irreversible, has exacerbated the United Nations Security Council that passed a resolution on March 24 to expand sanctions on Iran in an effort to curb its nuclear programme.

But so far, journalists who were invited to the main nuclear complex at Natanz were not shown any evidence that enrichment of uranium was under way. Nuclear experts were unclear by what Mr Larijani -- Iran's chief nuclear negotiator -- referred to when he said on Monday, April 9 that Iran injected gas.

According to inspectors, Iran is constructing 3,000 centrifuges as a first step towards 54,000. Although the jury is out when it comes to knowing if Iran has begun enriching uranium at the larger plant due to negotiators - Iranian an European - hammering out ways to resolve the standoff with the Security Council.

Mahmoud Ahmadinejad has thrown a curve ball to western experts, partly because the underlying question is whether the activity at the desert complex is real or a bluff.
It is believed that Iran is more inclined to score diplomatic points for the moment that to make technical advances.
So after so much razzle dazzle on the part of the Iranian President , defying three UN resolutions and setting his country on a collision course with the US, the question remains to be if the Security Council which gave 60 days (May 23) to Iran to comply with or face "further appropriate measures".

Now Iran argues that it needs nuclear power, and the whole process should be dealt only on a national level without the interference of a "tyrannical" United States. The Iranian President underscores the fact that he is hardly toeing the diplomatic line and further pressure from the US or the UK could get Iran marching along North Korea under the banner of nuclear programmes.
This is where the rub comes in, as under the Nuclear Non-Proliferation Treaty (NPT), a country has no rights to enrich its own fuel for civil nuclear power, under IAEA inspectors, and this is what worries the West as Iran could have the option to leave the NPT as North Korea did.

The article 10 gives a member state the right to declare that "extraordinary events" have "jeopardised the supreme interests of the state". It could give then three months notice to quit. This would leave Iran free to do what it wanted.
As a case in point, its parliament threatened to force its government to withdraw if the standoff was not resolved peacefully.

Undeniably the tension, could be cut with an Iranian knife or even anglo-american one in that respect, as critics have condemned the UK and US to have broken the NPT treaty by transferring nuclear technology from one to another. Evidently, both countries snapped back by maintaining that they were not effected by the NPT.

So When Mr Ahmadinejad stated he wanted Israel wiped off the map, and the latter country is known to be not part of the NPT but does have a nuclear bomb and so have India and Pakistan.
I surely can feel the Iranian's President having his blood boil with frustration and unfair treaments and slanted revolts from Western nations.

IS IRAN PLAYING FAST AND LOOSE WITH THE WEST?

By Julian Sudre

A particularly neurotic quid pro quo has triggered international tensions between Iran and Britain but the systematic recrimination has nonetheless added grist for the Iranian government's mill. In what, at root, remains to be an all-round, full-fledged diplomatic issue over the persistent British meddlesome move on Iraqi soil, has categorically infuriated its neighbouring country: Iran.

The captivity of 15 Royal Marines sailors in allegedly Iranian waters perceived as a bold affront to the West shows that nose-thumbing and obstinacy from Iran are only translated into a dish best eaten cold. And for a lack of interpreting Iran's mindset, both Bush and Blair are aptly served some diplomatically cold dishes.
Britain has been denounced for going hurriedly to the UN Security Council for a condemnation of the Iranians, maladroitly reporting the issue with downright boorishness only inflamed diplomatic ties with Tehran.

Iran is cocking a snook at the British government and its tactical propaganda has ridiculed the infantile demeanour of a self-centred, almost immature British Prime Minister.
Blair has reproached Iran of breaking international laws for detaining his sailors but in turn the UK breached the will of the UN when it invaded Iraq. As a result Mr Blair wields very little moral authority when it cites international law and the sabre-rattling of both the US and the UK over Iran's nuclear programme has with no question exacerbated the stakes, too.

The silver line in all of this remains the EU, which has more leverage and diplomatic links with Tehran; the economic leverage is an important asset knowing that the EU is Iran's biggest trading partner accounting for more than 40 per cent of its imports.
Much of this trade is underpinned by export credit gurantees from European governments.

As Robert Frisk put it in The Independent, it is a war of humiliation, Mahmoud Ahmadinejad must be sniggering now with delight over a humiliated Blair that voiced he would move to the "next phase" if the Marines are not released.
The bangs and fizzes of Blair theatrical stage have come home to roost because of soit-disant sailors who pen spurious missives to the British goverment for being spotted in faustian Iranian waters in the Persian Gulf 11 days ago have come to demonstrate a follow-the-leader style that soon may have opened the floogates for further misunderstanding of Iran's hard-lined stance over the West.

That said, the political game has been played to fare-thee-well, and the Iranians must have taken a liking to it. Ten of thousand of Iranians were killed in the clutch of Saddam's regime, so perhaps the captivity of 15 British souls may have rendered Blair hot under the collar for having his plans stymied by a contrarian, holocaust-denying President but he should realise now that it is high time he withdrew his troops from Iraq before he falls from graces good and proper.

Is global warming a lot of hot air?

By Julian Sudre

This time the landing is meant to be unprecedented and not only because terra firma has shown signs of conditional elements that distract the scrutinising eye of scientists but the looming and mostly important report on science of climate change that is released on February 2.

According the the Intergovernmental Panel On Climate Change, temperatures are expected to jump by 2.0 C to 4.5 C by 2100 along with sea-level rise of between 28 and 43 centimetres by the same date.

Similarly, the report will lay stress on the fact that it has been poorly understood the impact pollution has had on the Greenland ice sheet. Considered it would have taken hundred of years for it to melt right the way through, now satellite data suggested the ice sheet was melting three times three times faster than previously thought.

"I hope this report will shock people and governments into taking more serious action as you really can't get a more authentic and more credible piece of scientific work. So I hope this will be taken for what it's worth" said the IPPC chairman, R K Pachauri.

It was also pointed out that food production did as much damage as private transport and housing, Environment minister Ben Bradshaw has warned. The consumption of meat and dairy products does in fact contribute to global warming -- methane gas is emitted by cows and sheep -- because of the energy and land needed to rear animals.

Food production and preparation alongside transport and housing actually account for 25 per cent of global warming. Flying accounts for only 2 per cent.

The weather, appropriately, has turned public opinion with Hurricane Katrina and the heatwave that torched America's west coast last year accompanied by the constant staccato of new research has only strengthened the belief that something must be done.

During the state-of-the-union address, President Bush announced the reduction of America's petrol consumption by 20 per cent by 2017. That is the US will have to rely on a greater use of alternative fuels.

Ethanol stands to be ineffcient due to heavy subsidies and high tariffs on import of foreign ethanol and liquified coal remains filthy because of high carbon emissions.

Mr Bush so far has rejected both clean and efficient solutions to climate change. The first measure is a carbon tax and the second is a cap-and-trade system of the sort Europe introduced to meet the Kyoto targets.

Such measures would limit companies' emissions while allowing them to buy and sell permits to pollute. Either system, should, by setting a price on carbon, discourage its emission; and in doing so, encourage the development and use of cleaner-energy technologies.

America has not taken a green leaf out of the eco- book but has seemed to have closed the book on it.

In due time, world leaders would have to get tearing leaves out of that book and play catch-up before the pollutant wave closes its curl over our dear planet Earth.

Celebrity Big Blogging!

By Julian Sudre


Being a writer evidently bears the brunt of critics; sometimes the latter are positively constructive or challenging but others can be as vacuous and insipid as junk mail shoved down your trash.
But don't writers accept with a degage attitude the dispiteful comments lobbed at them and surmise hypothesises why their pieces would inflame people's mind?

Publishing an article is like throwing a stone in a pond and ripples would come ruffling the thin layer of water. We are not tentatively meaning to get a reaction, although it has a certain flattery in itself to be aware of the fact that we have a readership. That, is ether to writers.

Writing pertains to art of expression; we toss and spin words out, and neatly we select old terms to bring them back to life on the page; a constant reminder that we are the guards that inject life into obscure words. The dancing of our wording becomes in the eye of the beholder.

But writers are not there to flaunt their prose allright; because the interpretation of actual prose indisputably varies according to the individual who is expounding it. Therefore, in my own eyes, prose is no more.
Nevertheless, when it comes to blogging, the average blogger would shoot from the hip by sourcing their inner-self and spurting it out on to a webpage.
Blogging enhances the flux of ideology through the writer without constraining his own freedom of expression . No editor is to be putting a spanner in their works, hence the blogging goes on and eventually will encounter the angry voices of would-be editors who will be more than happy to make a hatchet job of our work.
This is where Celebrity Big Blogging comes in; we become stalked and watched over in our blogging world and the comment of one sparks off the reaction of another. The acorn becomes an oak among people who seem to be barking up the wrong oak tree!

Now if the reader does not sit well with the way I spin my narrative, why as a result would he become a staunch reader of my blog? Perhaps because curiosity has been engendered by the unusual, if yet eccentric patterns of my word-weaving awoke his inner emotions to reveal his true self; his naked intelligence. That is, a sense of jealousy for not being in my shoes.

Objecting my style is rejecting his own existential acceptance to being not as capable as me; otherwise there would be no objection but instead a wittier, more demanding explanation of how I had reached a level of single-handed individuality.

Today, If I get some impetuous comments on my columns, it would only be because I have gained the status of Celebrity Big Blogging!

Saddam Hussein's execution is changing the face of the media

By Julian Sudre

The fall of a dictator made public through a you tube generation has exacerbated many a nation across the globe; and the ignominious broadcasting of the video and the photos published in the newspapers spur me into thinking that humanity retains the stain of sensationalism that degrades journalism and our own self-esteem.

The execution of Saddam Hussein was ill-timed with the holiest day of the Muslim year; many Arab Muslims said that the hanging was provocatively timed with the feast of Eid al-Adha and would elicit increased violence in Iraq.

Obviously the Iraqi Prime Minister, Nouri al-Maliki, is taking a lot of flack for pressuring the White House to give its assent over the hanging of the former dictator. Now he can't wait to finish his tenure at the head of the Iraqi Government.
The result has become a morass of divergent views over the execution -- and the death penalty -- since an across-the-board insurgency may trigger a sweeping pandemonium in the Middle East. Sectarian and ethnic violence will be mostly taking place in doomed Baghdad for some time yet.

The culmination has had a vicious and corrupt flavour due to the arrest of Iraqi guards who used their mobile phones to film the grisly episode.
The question remains how they managed to have their phone on the premises as they were seized by american security prior to entering the gallows room.

As a result, a formidable media wave came crashing down to capture the goverment-approved video clip of the execution and to debate over the mobile phone illegal film that injected much convulsion everywhere.

Should not such pictures simply and squarely be banned for the sake of propriety and civilities until the very end?

I am afraid to observe a deliberate detoriation of the media today as our society is inured to crass reporting and journalism has deviated from the tracks of proper interpretation of current affairs.

Not only democracy should have bounderies to separate how to view the news from a particular angle instead of throwing glaring light on to abominable deeds such as publishing an execution but also impose a more strigent editing before we accept unwittingly the projection of news-writing with increasing greed.

Again decisions we may take attract intense attention from the media but the spiralling descent into misjudgement would prove catastrophic relatively soon if we don't re-establish our standards.
We are shifting our attention towards a form of Hollywoodian reporting and the mediation of such stories ensure that we know in advance when a scoop becomes a blockbuster, bar the moral ethics that we were supposed to appreciate.

In the meantime, when a former dictator fall from graces, we will never forget that Saddam Hussein has gained the status of martyr after his death and will be marked forever with sensationalism and money- grubbing media on his head.