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Economic Crisis: The Sovereign Debt Bubble

Bob Chapman - Global Research, February 19, 2010

When the next census is over America will probably have 320 million people. The number of Americans 50 years ago was about 184 million. Our budget then was about $100 billion. Today it is supposed to be $3.8 trillion. We call that spending gone wild. Government control of the economy has become bigger and all consuming at what will prove to be an unsustainable pace. Markets are telling us the world has serious sovereign debt problems as witnessed recently with the financial debacles in Ireland and now Greece with others to follow. Arrogant government, Fed officials and Wall Street telling us the borrowings are necessary to save our economy, when in fact just the opposite will prove to be true. Chairman Bernanke tells us inflation expectations are stable and will be subdued for some time to come. Our big questions are what is he hiding at the Fed? Why doesn’t he want an audit? What has the Fed been doing that it doesn’t want us to know about? Could it be the funnel of insider information flowing to Wall Street and banking or the operations of the “Presidents Working Group on Financial Markets”? In their minutes it would be found that inflation is recognized as a friend not an enemy. The independence Mr. Bernanke speaks about is a subterfuge to keep what the Fed is doing away from prying eyes. We do not believe this is any way to run a monetary system.

As we forecast Fed Chairman Bernanke was reconfirmed as the Republican National Committee doled out campaign contributions (payoffs) so that Senators could see their way to confirming Ben. Treasury Secretary Geithner and former Secretary Paulson lied before the congressional committee and as usual nothing happened. Again three illuminists waltz free to again rape our financial system. Democrats in scumbag fashion didn’t seat the newly elected Scott Brown and was able to increase short-term government by $1.9 trillion, so they wouldn’t have to increase it before the November elections. What a wonderful government we have. If Americans do not dump the incumbents of both parties our country is doomed.

It should stand foremost in everyone’s mind that we have had zero interest rates for 14 months and there is no end in sight. The Fed in its secrecy, because you do not have a need to know, won’t admit that they paid banks, Wall Street firms, insurance companies, other corporations and foreign banks 100 cents on the dollar for virtually worthless bonds. The Fed saved the financial system and the US taxpayer will pay for it. Incidentally, these recipients are all back doing the same thing they did before, which brought the financial system down. The Fed created more than $2 trillion for this bailout, as well as via the purchase of Treasuries and Agencies.

In this process the Fed lost control of the Fed funds’ rate, a new rate process will probably be interest paid on excess bank reserves. This could lead to a drain in reserves of $1 to $2 trillion. Part of those reserves are toxic garbage that the Fed has to find a way to get rid of at $0.20 to $0.30 on the dollar and in process not let anyone know what the publics’ losses are. Keep in mind that if these securities had not been “purchased many banks, brokerage houses, insurance companies and transnational conglomerates would have been bankrupt by now.

China expanded bank loans in January by a phenomenal $200 billion plus. This is in addition to $1.3 trillion in previous expansions. As a result house prices rose 9.5% year-on-year. Their manufacturing fed giant oil and copper imports rose 33% to 25%, as consumption rose 40%.

As a result the People’s Bank raised reserve requirements by 50 bps, or 1/2%. Whether this becomes an isolated event or whether it is the beginning of real tightening, remains to be seen. If they are serious they will need higher rates than that. This tactic is used rather than raising interest rates, which will attract additional hot money flow. The bank says they are guiding the economy back to normality. They are expecting other countries to follow their lead in ending stimulus. The question now for China and the rest of the world is will world stock and bond markets, as well as asset values fall as the stimulus and quantitative easing ends? Our forecast is a fall in GDP, higher unemployment, an easing to a very small degree in inflation and a big fall in stock, bond and real estate prices. The temporary palliative will not carry their economy ahead on a permanent basis.

China can act aggressively because their enormous Forex position of some $2.4 trillion; a luxury not available to many countries. In addition we now have recognized sovereign debt problems mainly so that the dollar could rally and for other currencies to fall to make them more competitive. That is the price to be paid – recognition. Those conditions were well known long before the open exposure of Greece, Ireland, Portugal, Spain and Italy. The magical exposure was all prearranged. We could tell that was the plan by the long dollar positions of Goldman, Morgan and Citi, and in reverse their massive short positions in gold and silver bullion and shares that still as yet have only been partially covered.

China will tighten up but not in a big way, because others won’t and can’t without there economies coming unglued, especially in the category of unemployment. World monetary authorities are hoping the deflationary underflow will in total or at least in part ward-off the inflation caused by monetized stimulus. That is wishful thinking. What is in motion is very dangerous, especially for the US, where the federal deficit has gone ballistic, probably reaching $1.5 to $2.0 trillion by September 30, 2010, the end of the fiscal year. Then there is the matter of debt that last year saw the Fed service 80% via monetization. This cannot persist indefinitely. As you can see the US and other economies are very vulnerable.

As all attention has been drawn over the past few weeks to Greece, Europe and China, it went almost unnoticed that the US had the largest trade deficit in a year, and that Freddie Mac will purchase hundreds of billions of dollars of toxic waster better known as collateralized debt obligation, in behalf of the American taxpayer. There is no end to America’s financial problems.

This is the result of the market’s reluctance to purchase these securities. These publicly supported bankrupt entities will spend another $200 billion buying these securities. This is an add on to the Fed’s program of purchasing $1.25 trillion of these home loans, a program that is supposed to end next month.

If this is part of the Fed’s exit strategy we are in serious trouble. These purchases are not going to solve the problems. The Fed is just moving these wasteful assets from one place to another. Under these circumstances how can there be a recovery and how can the dollar maintain its current strength? Leverage is still the method of speculators and inflation is still with us.

It looks like global financial and economic problems are not going to disappear anytime soon. Over and over again nations paper over problems never attempting to solve them. The current dilemma in Greece and at the Fed are perfect examples.

Observers are going to be shocked when China’s stock market and real estate bubbles burst. The ramifications of these Chinese failures will resound worldwide. The biggest question is will China have to start selling off its $2 trillion dollar hoard to straighten out its problems? Only time will tell. What is important is that these problems exist. They are not being addressed and in time will resurface in a more virulent manner.

We see Greece as a reflection of where America is headed. Greece and America have many things in common, one of which is their governments consistently lie about everything. The EU and eurozone solution for Greece are budget cuts of 8.7% this year and down to 3% of GDP in three years. Can you imagine the US going through this? Well, get ready for it because this is where the US economy is headed. Instead of $780 billion stimulus plans we will have $780 billion in budget cuts. Not only would government start cutting staff, but also there would be major cuts in Medicare, Medicaid, Social Security, wages, etc. Yes, taxes would rise, as tax cuts would not be renewed.

We hear all about the corruption in Greece, but we are not surprised. They just copy what they see in the US. It is a revelation when we are told 30% of Greece’s economy is underground. It has been a dark secret for many years that 30% of the US economy is underground as well. This began in the Vietnam era, and has gone on ever since. Today people say if illegal aliens do not have to pay taxes why should they. It is a government-sponsored program to do little or nothing about this problem, so what can government expect from the public?

Greece is a basket case, as are many other governments. The more we research the more we are convinced Greece is a setup and trial run to take other governments under, one at a time. This in part was done to boost the dollar’s value versus other currencies. This could be the second inflationary leg of the depression similar to 1933. Again the only safe haven is gold and silver related assets.

As we mentioned before, Greece could well be a distraction so players would lose sight of US problems. A strong dollar does not mean the America’s problems are over. Others’ problems are not worse than ours. By the looks of things the Illuminists are not as yet ready to pull the plug on Europe. If they were they would have already pulled it. The EU, but in particular the eurozone, has become a failed experiment. Greece may be bad but California is going to be much worse. It represents 13% of US GDP and is the 7th largest economy in the world. They owe the federal government $6 billion and have a budget deficit of more than $6 billion. Then there are the $500 billion in municipal bonds they have outstanding, that could go into default. Then there is New Jersey with an $11 billion deficit. Pennsylvania hs talked about bankruptcy. Then come many others. Yes, Greece could be a diversion. If it is it will be a long-term diversion that could last 20 years. For those who do not know Greece has been in default in 105 of the last 200 years.

The bottom line is there is a limit to the amount of debt a sovereign country can handle. The Illuminists are setting the world up for a long string of sovereign defaults. Now you can better understand why you need gold and silver related assets.

The latest G-7 meeting in N. Canada was another non-event. They reaffirmed that stimulus has to keep flowing or the seven major world economies won’t be able to make it. Little of what really went on got into the media, which is usually the case. Governments in recent years have become more and more secretive. Most nations generally want lower deficits, but in reality never practice what they preach. That gives us a bottom line as we are left with little more than blatant hypocrisy. It has simply become a pure political game and as a result there is no path back to economic and financial normality. No one wants to purge a system that no longer functions properly. The looting goes on unabated. They are all a disgrace, but we know exactly what they are up too. Thank goodness for newsletters, talk radio and the Internet, otherwise we’d still have darkness being only able to access the controlled media.

Last week the Dow gained 0.9%, S&P 0.9%, the Russell 2000 3% and the Nasdaq 1001.9%. Banks fell 0.2%, broker/dealers rose 1.3%, cyclicals 2.5%, transports 2.5%, consumers 1.6%, as utilities lost 1.3%. High tech rose 1.8%, semis 4%, Internets 1.8%, as biotechs fell 0.2%. Gold bullion rose $27.00, the HUI gained 3.2%, as the USDX dollar index fell 0.3% to 80.22.

Two-year Treasury bills rose 5 bps to 0.74%, 10-year notes rose 13 bps to 3.70 and 10-year German bunds gained 7 bps to 3.19%.

Freddie Mac 30-year fixed rate mortgage rates declined 4 bps to 4.97%. The 15’s fell 6 bps to 4.34% one-year ARM’s jumped 9 bps to 4.33% and 30-year jumbo’s rose 2 bps to 5.92%.

Fed credit increased $1.8 billion last week. It is up 22% yoy. The Fed foreign holdings of Treasury and Agency debt jumped $9.3 billion to $2.956 trillion. Custody holdings, for foreign central banks yoy are up $395 billion, or 15.4%.

M2 narrow money supply increased $7 billion to $8.471 trillion yoy; it has expanded 1.8%.

Total money market funds assets fell again $6.7 billion to $3.198 trillion. Year-on-year they have fallen $705 billion, or 18.1%.

China’s lending surged to 1.39 trillion yuan ($203 billion) in January and property prices climbed the most in 21 months as banks extended more credit in anticipation the government will tighten monetary policy. Lending was more than in the previous three months combined. Property prices in 70 cities rose 9.5% from a year earlier… China’s 9.35 trillion yuan of loans in the past year has added to the risk that the world’s fastest-growing major economy may overheat.

Fannie Mae and Freddie Mac’s plan to step up purchases of delinquent loans may boost prepayments on their securities. Freddie Mac said yesterday that it would buy ‘substantially all’ loans with payments late by 120 days or more from its securities in the next month. Fannie Mae said later that it will ‘increase significantly’ its buyouts, setting a less aggressive timeline. The value of Freddie Mac’s delinquent loans is $70 billion, while Fannie Mae has $130 billion of the debt. ‘This is going to be a wad of cash coming into the fixed- income markets and it’s not immediately clear where it’s going to be reinvested,’ said Jim Vogel, head of agency-debt research at FTN Financial.

More than a fifth of U.S. homeowners owed more than their properties were worth in the fourth quarter according to Zillow.com. In the fourth quarter, 21.4% of owners of mortgaged homes were underwater, up from 21% in the previous three months.

Like millions of American households, the Mortgage Bankers Association found itself stuck with real estate whose market value has plunged far below the amount it owed its lenders. On Friday, CoStar Inc., a provider of commercial real estate data, said it had agreed to buy the MBA’s 10-story headquarters building in Washington, D.C., for $41.3 million. That is well below the $79 million the trade group agreed to pay for the glass-walled building in 2007.

Senator Evan Bayh of Indiana announced yesterday that he will not seek a third term in November, a decision that, combined with other Democratic departures, could imperil the party’s prospects of retaining control of the Senate.

Bayh cited the lack of bipartisanship on Capitol Hill as his main reason for leaving, adding to skepticism that the fractiousness in Washington can be repaired and undermining President Obama’s efforts to build bridges. [The rats are leaving the sinking ship. As it says in the Bible the writing is on the wall.]

HERE has been no global warming for 15 years, a key scientist admitted yesterday in a major U-turn.

Professor Phil Jones, who is at the centre of the “Climategate” affair, conceded that there has been no “statistically significant” rise in temperatures since 1995.

The admission comes as new research casts serious doubt on temperature records collected around the world and used to support the global warming theory.

Researchers said yesterday that warming recorded by weather stations was often caused by local factors rather than global change.

The revelations will be seized upon by sceptics as fresh evidence that the science of global warming is flawed and climate change is not man-made.

The Daily Express has led the way in exposing flaws in the arguments supporting global warming.

Last month we revealed how the UN’s International Panel on Climate Change was forced to admit its key claim that Himalayan glaciers would melt by 2035 was “speculation” lifted from a 1999 magazine article. The influential IPCC then admitted it had got the key claim wrong and announced a review.

The Daily Express has also published a dossier listing 100 reasons why global warming was part of a natural cycle and not man-made.

Yesterday it emerged that Professor Jones, whose raw data is crucial to the theory of climate change, had admitted he has trouble “keeping track” of the information.

Colleagues have expressed concern that the reason he has refused Freedom of Information requests for the data is that he has lost some of the crucial papers.

Professor Jones also conceded for the first time that the world may have been warmer in medieval times than now. Sceptics have long argued the world was warmer between 800 and 1300AD because of high temperatures in northern countries.

Climate change advocates have always said these temperatures cannot be compared to present day global warming figures because they only apply to one specific zone.

But Professor Jones said: “There is much debate over whether the Medieval Warm Period was global in extent or not. The MWP is most clearly expressed in parts of North America, the North Atlantic and Europe and parts of Asia.

“For it to be global in extent, the MWP would need to be seen clearly in more records from the tropical regions and the southern hemisphere. There are very few climatic records for these latter two regions.

“Of course, if the MWP was shown to be global in extent and as warm or warmer than today, then obviously the late 20th century warmth would not be unprecedented.” Professor Jones first came under scrutiny when he stepped down as director of the University of East Anglia’s Climatic Research Unit in which leaked emails were said to show scientists were manipulating data.

Researchers were accused of deliberately removing a “blip” in findings between 1920 and 1940, which showed an increase in the Earth’s temperature.

John Christy, professor of atmospheric science at the University of Alabama and a former lead author on the IPCC, said: “The apparent temperature rise was actually caused by local factors affecting the weather stations, such as land development.”

Ross McKitrick, of the University of Guelph, Canada, who was invited to review the IPCC’s last report said: “We concluded, with overwhelming statistical significance, that the IPCC’s climate data are contaminated with surface effects from industrialization and data quality problems. These add up to a large warming bias.”

International demand for long-term U.S. stocks, bonds and financial assets grew at a slower pace in December than a month earlier, as China sold U.S. government securities, a U.S. Treasury Department report showed.

Net buying of long-term equities, notes and bonds totaled $63.3 billion for the month, compared with net purchases of $126.4 billion in November, the Treasury said in Washington. Including short-term securities such as stock swaps, foreigners purchased a net $60.9 billion in December, compared with net buying of $30.7 the previous month.

China has questioned the dollar’s dominance as the world’s reserve currency. In the U.S., spending to avert an economic collapse sent the federal budget deficit above $1 trillion for the first time ever in fiscal 2009, and economists said that may deter investment from abroad.

“The U.S. may not be able to get its government spending under control,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, before today’s report. “But it is still seen as an island of relative safety.”

China was a net seller of U.S. Treasuries for a second straight month, after sales of $34.2 billion, the report showed. Japan replaced China as the top foreign holder of U.S. government debt, after net purchases of $11.5 billion raised its total to $768.8 billion.

Economists surveyed by Bloomberg News ahead of today’s survey projected long-term U.S. financial assets would show a net increase of $35.4 billion in December. Estimates ranged from $15 billion to $68.2 billion, according to the seven forecasts compiled in the survey.

Manufacturing in the New York region expanded in February at the fastest pace in four months as companies boosted payrolls in anticipation of accelerating orders and sales.

The Federal Reserve Bank of New York’s general economic index rose to 24.9 this month, higher than anticipated, from 15.9 in January. Readings above zero in the so-called Empire State Index signal growth in the area covering New York and parts of New Jersey and Connecticut.

Manufacturers are increasing output to replenish depleted inventories as business and consumer spending pick up and exports surge. The factory expansion may persist for months, leading to gains in hiring and incomes that will probably also give the rest of world’s largest economy a lift.

JPMorgan Chase & Co., the second- biggest U.S. lender, agreed to buy the non-U.S. units of RBS Sempra Commodities LLP for $1.7 billion to expand its energy- and metals-trading units.

JPMorgan will acquire the firm’s European and Asian global metals and oil units, Edinburgh-based Royal Bank of Scotland Group Plc said in a statement today. RBS was forced to sell its stake in Sempra by the European Union after receiving a 45.5 billion-pound ($71 billion) taxpayer bailout.

The purchase, led by JPMorgan global commodities chief Blythe Masters, expands the bank’s commodities division just as U.S. President Barack Obama tries to curb banks’ trading of securities for their own account. JPMorgan held talks to buy RBS Sempra’s North American gas and power trading units as well, two people with knowledge of the talks said this month.

“This transaction maximizes the market value of our European and Asian businesses and represents a positive first step of an orderly exit by RBS from the joint venture,” Donald E. Felsinger, chairman and chief executive officer of Sempra Energy, said in a statement today.

Sempra will receive about $940 million from the sale, the San Diego-based company said. RBS will receive about $799 million from the deal and expects to make a “small gain” from the sale, the bank said.

The government already has made so many promises to so many expanding "mandatory" programs. Just keeping these commitments, without major changes in taxing and spending, will lead to deficits that cannot be sustained.

It’s time for some perspective.

Greece is in crisis because its budget deficit was thought to be 12.7% of its GDP.

Spain is perceived to be the next crisis because its budget deficit is 11.7% of its GDP.

A proposed bailout condition is Greece must reduce its deficit to the 3% of GDP level mandated by Maastricht.

The US will run a projected $1.6 trillion deficit. Its GDP is $14.2 trillion. This means the US budget deficit is projected, under the rosy economic assumptions of the Obama administration, to be 11.3% of its GDP. To get a budget deficit of 3% of GDP, the US must cut $900B of spending or increase taxes.

Dubai's stock market fell 3.5% after a report said the government's investment vehicle Dubai World may offer only 60 cents on the dollar to creditors. The company denied the Dow Jones report but that did not stop Dubai's index seeing its biggest drop in three weeks.

Volcker says must let big financial firms fail Large financial institutions that engage in speculative activities for profit should be allowed to fail if they get in trouble, White House advisor Paul Volcker said on Sunday.

"If a big non-bank institution gets in trouble and threatens the whole system, there ought to be some authority that can step in, take over that organization and liquidate it or merge it -- not save it," Volcker said on CNN. "It's called euthanasia, not a rescue."

"I don't think there's any question the Federal Reserve and other regulators were not on top of the housing picture," Volcker said.

The next US bank or financial institution that becomes insolvent is likely to be nationalized or merged into another entity with possible covert guarantees. That’s what current politics dictate.

We have been screaming for the past several years that food and energy inflation are boosting retail sales. Also, the government has been reporting higher retail sales than industry sources or sales taxes indicate.

Texas collects $1.66 billion of January Sales, 14% below last year.

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $355.8 billion, an increase of 0.5 percent (±0.5%)* from the previous month and 4.7 percent (±0.5%) above January 2009. Gasoline stations sales were up 29.0 percent (±1.5%) from January 2009 [+0.4% m/m].

Seeking Alpha comments on the ugly 30-year US Treasury auction last week: To see such a MASSIVE drop off in Indirect Buyers (40% down to 28%) is a MAJOR warning sign that Foreign Governments are no longer willing to buy long-term US debt.

This auction was a very small step away from a failed auction. To see Primary Dealers buying so much (remember they HAVE to buy it) and Indirect Buyers so little, only confirms what I’ve been saying for months: that the US is entering a Debt Spiral; a situation in which it must issue more and more debt (while rolling over trillions of old debt) at the very time that fewer and fewer investors are willing to lend to the US for any lengthy period of time (more than ten years).

Gradually we are getting confirmation that Chinese "posturing" about offloading US debt is all too real. The most recent TIC data confirmed the Treasury's greatest nightmare: China is now dumping US bonds. In December China sold $34.2 billion of debt ($38.8 billion in Bills sold offset by $4.6 billion in Bonds purchased), lowering its total holdings $755.4 billion, the lowest since February 2009, and for the first time in many years relinquishing the top US debt holder spot to Japan, which bought $11.5 billion (mostly in Bonds, selling $1.4 billion Bills) bringing its total to $768.8 billion. Also, very oddly, the surge in UK holding continues, providing yet another clue as to the identity if the "direct bidder" - as we first assumed, these are merely UK centers transacting primarily on behalf of China as well as hedge funds, which are accumulating US debt under the radar. UK holdings increased from $230.7 billion to $302.5 billion in December: a stunning $70 billion increase in a two month span. Yet, with the identity of the UK-based buyers a secret, it really could be anyone... Anyone with very deep pockets.

L.A. budget crisis threatens jobs, credit rating

The $212 million budget shortfall, projected to more than double next year, is attributed mainly to plunging tax revenue blamed on the region's sagging economy, falling property values and a 15 percent jobless rate -- one of the highest of any major U.S. city.

"The last time we saw this kind of drop in revenue was the Great Depression," Miguel Santana, the city's chief financial officer, told Reuters. "It speaks to how severe this budget crisis is."

By Opposing Just A 5% Pay Cut, L.A.'s Union Hardliners Show Why California Is Doomed.

The Hill: The risk from the financial crisis was overblown and many of the TARP bailouts were unnecessary, Gov. Tim Pawlenty said in an interview published today. Speaking to Esquire magazine, Pawlenty suggested the bailout was contrived by Goldman Sachs execs for their own self interest. He referred to an unnamed story he read on how the bailout was conceived.

"In this story, Paulson, former Goldman Sachs CEO, was meeting with other Goldman Sachs executives, trying to figure out what to do, and surprise, surprise, they came up with the conclusion that the federal government should bail out Goldman Sachs," Pawlenty said.

"So I don't take as an article of faith that the financial world would have come to an end if we had let more of these institutions fail," he added.


Police in the Greek capital say a bomb has exploded at the offices of American financial services firm JPMorgan Chase & Co., causing no injuries.

The blast occurred early evening Tuesday in an upscale area of central Athens, following a warning telephone call to an Athens newspaper.

The extent of the damage was not immediately clear.

America's fragile high street banks are bracing themselves for a fresh financial crunch as a wave of commercial property mortgages go sour on offices, shops and factories, causing losses of up to $300bn (£192bn) hitting nearly 3,000 small- and medium-sized financial institutions.

A congressional oversight panel charged with scrutinising the Obama administration's bailout efforts has warned that $1.4tn of loans covering commercial premises will reach maturity between 2011 and 2014. After a plunge in property prices, nearly half of these loans are underwater, with borrowers owing more than their underlying property is worth.

An analysis by the panel found that 2,988 of America's 8,100 banks have potentially dangerous exposure to commercial property loans. The impact could damage hopes of a US economic recovery and could cause a further squeeze in the availability of credit to consumers and businesses.

"Are we arguing that this is a serious problem that we need to get in front of? The answer is yes," said Elizabeth Warren, chairman of the oversight panel. "It's like throwing a handful of sand into the economic recovery."

She said that if banks see that their commercial property liabilities are mounting, they will hold back on lending elsewhere: "They'll tend to husband their money so that it's not available for small business loans.

A new report says hotels in Hawaii lost $741 million last year, $1.1 billion since the tourism slump began in 2008.

The report by the industry consulting firm Hospitality Advisors LLC says hotel occupancy throughout the state averaged 66.5 percent in 2009. That's down from 70.5 percent in 2008.

Hospitality Advisors says last year's rate was the lowest since it began reporting hotel data in 1987.

Company President and Chief Executive Officer Joseph Toy says 2009 was a tough year for the visitor industry in Hawaii and across the nation.

He says the speed and depth of the downturn was unprecedented, and the hotel industry has never experienced the level of rate discounting that is continuing.

Hotels have been heavily discounting room rates to generate demand.

The sudden pullout of three corporate giants from a leading alliance of businesses and environmental groups could be the death knell for climate change legislation languishing on Capitol Hill.

ConocoPhillips, BP America and Caterpillar's announced Tuesday they will pull out of the U.S. Climate Action Partnership, citing complaints that the bills now in Congress are unfair to American industry.

Net long-term TIC flows were $63.3 billion. The November total net figure was revised to $30.7 billion: net long-term TIC figures was revised to $126.4 billion from $126.8 billion

The February NAHB housing market index rose to 17, up from January’s 15. Another negative for builders is that lumber prices have increased 32% this year.

Why the Oscars are a con

John Pilger

Why are so many films so bad? This year’s Oscar nominations are a parade of propaganda, stereotypes and downright dishonesty. The dominant theme is as old as Hollywood: America’s divine right to invade other societies, steal their history and occupy our memory. When will directors and writers behave like artists and not pimps for a world view devoted to control and destruction?

I grew up on the movie myth of the Wild West, which was harmless enough unless you happened to be a native American. The formula is unchanged. Self-regarding distortions present the nobility of the American colonial aggressor as a cover for massacre, from the Philippines to Iraq. I only fully understood the power of the con when I was sent to Vietnam as a war reporter. The Vietnamese were “gooks” and “Indians” whose industrial murder was preordained in John Wayne movies and sent back to Hollywood to glamourise or redeem.

I use the word murder advisedly, because what Hollywood does brilliantly is suppress the truth about America’s assaults. These are not wars, but the export of a gun-addicted, homicidal “culture”. And when the notion of psychopaths as heroes wears thin, the bloodbath becomes an “American tragedy” with a soundtrack of pure angst.

Kathryn Bigelow’s The Hurt Locker is in this tradition. A favourite for multiple Oscars, her film is “better than any documentary I’ve seen on the Iraq war. It’s so real it’s scary” (Paul Chambers CNN). Peter Bradshaw in the Guardian reckons it has “unpretentious clarity” and is “about the long and painful endgame in Iraq” that “says more about the agony and wrong and tragedy of war than all those earnest well-meaning movies”.

What nonsense. Her film offers a vicarious thrill via yet another standard-issue psychopath high on violence in somebody else’s country where the deaths of a million people are consigned to cinematic oblivion. The hype around Bigelow is that she may be the first female director to win an Oscar. How insulting that a woman is celebrated for a typically violent all-male war movie.

The accolades echo those for The Deer Hunter (1978) which critics acclaimed as “the film that could purge a nation’s guilt!” The Deer Hunter lauded those who had caused the deaths of more than three million Vietnamese while reducing those who resisted to barbaric commie stick figures. In 2001, Ridley Scott’s Black Hawk Down provided a similar, if less subtle catharsis for another American “noble failure” in Somalia while airbrushing the heroes’ massacre of up to 10,000 Somalis.

By contrast, the fate of an admirable American war film, Redacted, is instructive. Made in 2007 by Brian De Palma, the film is based on the true story of the gang rape of an Iraqi teenager and the murder of her family by American soldiers. There is no heroism, no purgative. The murderers are murderers, and the complicity of Hollywood and the media in the epic crime in Iraq is described ingeniously by De Palma. The film ends with a series of photographs of Iraqi civilians who were killed. When it was ordered that their faces be ordered blacked out “for legal reasons”, De Palma said, “I think that’s terrible because now we have not even given the dignity of faces to this suffering people. The great irony about Redacted is that it was redacted.” After a limited release in the US, this fine film all but vanished.

Non-American (or non-western) humanity is not deemed to have box office appeal, dead or alive. They are the “other” who are allowed, at best, to be saved by “us”. In Avatar, James Cameron’s vast and violent money-printer, 3-D noble savages known as the Na’vi need a good guy American soldier, Sergeant Jake Sully, to save them. This confirms they are “good”. Natch.

My Oscar for the worst of the current nominees goes to Invictus, Clint Eastwood’s unctuous insult to the struggle against apartheid in South Africa. Taken from a hagiography of Nelson Mandela by a British journalist, John Carlin, the film might have been a product of apartheid propaganda. In promoting the racist, thuggish rugby culture as a panacea of the “rainbow nation”, Eastwood gives barely a hint that many black South Africans were deeply embarrassed and hurt by Mandela’s embrace of the hated Springbok symbol of their suffering. He airbrushes white violence – but not black violence, which is ever present as a threat. As for the Boer racists, they have hearts of gold, because “we didn’t really know”. The subliminal theme is all too familiar: colonialism deserves forgiveness and accommodation, never justice.

At first I thought Invictus, could not be taken seriously, then I looked around the cinema at young people and others for whom the horrors of apartheid have no reference, and I understood the damage such a slick travesty does to our memory and its moral lessons. Imagine Eastwood making a happy-Sambo equivalent in the American Deep South. He would not dare.

The film most nominated for an Oscar and promoted by the critics is Up in the Air, which has George Clooney as a man who travels America sacking people and collecting frequent flyer points. Before the triteness dissolves into sentimentality, every stereotype is summoned, especially of women. There is a bitch, a saint and a cheat. However, this is “a movie for our times”, says the director Jason Reitman, who boasts having cast real sacked people. “We interviewed them about what it was like to lose their job in this economy,” said he, “then we’d fire them on camera and ask them to respond the way they did when they lost their job. It was an incredible experience to watch these non-actors with 100 per cent realism.”

Wow, what a winner.


Mounting fiscal crisis of US states and cities

Tom Eley

Despite claims that the “Great Recession” has ended, the fiscal crisis confronting US states and local governments will continue for years to come, according to a number of reports.

State and local governments have seen drastic reductions in tax revenues due to the economic crisis. Unemployed and impoverished workers pay less in income taxes and also purchase less, reducing sales tax receipts. Property and business taxes have also been driven down by the foreclosure and financial crises.

At the same time, the recession has brought demand for social services provided by state and local governments to unprecedented levels. This is especially true for states, which share with the federal government the burden of providing unemployment relief, food stamps, and Medicaid health insurance for low-income households.

But rather than being used as a means of mounting a major relief effort, state and local governments are the front line in the assault on living standards and social programs carried out in the name of “fiscal discipline.”

Almost all US states operate under laws requiring that they balance their budgets; therefore any shortfall in revenue must be met by cuts to services, layoffs, reductions in the pay of state workers, or by imposing “user fees” for services and other regressive forms of taxation targeting the working class. Both Democrat and Republican state politicians have ruled out drastic tax increases on the extremely wealthy and the major finance houses who have enriched themselves before, during, and after the financial crisis that they themselves caused.

President Obama’s stimulus package, the American Recovery and Reinvestment Act, was not nearly enough to meet the states’ budget crises, and was only a tiny fraction of the untold trillions doled out to the biggest US banks. However, in 2009 the stimulus package did allow a number of states to defer some spending cuts for one or two years. In spite of this, 28 states actually reduced the overall size of their government workforces in 2009.

Stimulus money to the states and local governments will peak in 2010, but much of this has already been earmarked for infrastructure and “green economy” projects. At the end of 2010, stimulus funding will fall off sharply, a moment many analysts refer to as “the cliff.” Obama has all but ruled out any further assistance. Last year he used the budget crisis of California, the most populous US state, to send a signal to state and city governments that henceforth the US Treasury and Federal Reserve would be open only to Wall Street.

The drastic cuts looming over the next two years may well make those of 2009 and 2010 seem mild. Kentucky, for example, has already frozen enrollment in its health insurance program that assists low-income families. But the state was spared hundreds of millions in deeper cuts by using up stimulus money and its “rainy day” fund. With these resources largely liquidated, Kentucky will face even larger budget shortfalls over the next two years that will be met through savage cuts to social programs and public education.

It is widely acknowledged, moreover, that the cuts enacted now will never be restored.

An economist with the National Association of Governors, Raymond Scheppach, has said the cuts undertaken now will be part of a “permanent retrenchment” and the revenue shortfalls are only the beginning of what will prove to be a “lost decade.”

“It will take years for the states to return to normal,” the Pew Center on the States writes, “whatever the new normal will be.”

Revenues will not return to pre-crisis levels for years. In New Jersey, tax receipts are not expected to return to their 2008 magnitude for another half decade. Michigan has less revenue this fiscal year than it did in 1997.

The crisis confronting the states has been accentuated by years of “free market” policies designed to benefit the financial elite. A graphic example of this comes from the funding systems used by the states for their workers’ retirement pensions. According to a recent survey by the Pew Center on the States, the combined funding deficit for state pension funds—the shortfall between the amount of money they have and the amount they have promised to workers—was $1 trillion in 2008. Meanwhile, a mere 5 percent of the total health care liability for retired state workers and their dependents, an estimated $587 billion, is funded.

This shortfall was calculated before the full onset of the financial crisis and therefore “does not include the market downturn that devastated many funds’ investment portfolios,” as Reuters points out in a recent article.

State governments diverted mandated revenues from workers’ retirement funds even before the financial crisis struck. Susan Urahn, director of the Pew Center on the States, called the last ten years a “decade of irresponsibility” in relation to the states obligations to their workers, during which “many states have shortchanged pension plans in good times and bad.”

As of 2008, only four states—Florida, New York, Washington, and Wisconsin—had fully funded pension funds. Illinois, home state of Barack Obama, confronts the largest proportional shortfall in its pension system, which stands at a staggering $55 billion, with just over half of outstanding obligations funded. California had the largest unfunded pension system outright midway through 2008, at almost $60 billion.

However, the Pew study did not account for the drastic reduction in the California Public Employees’ Retirement System (CalPERS) that took place at the end of 2008 when it was revealed that the fund was particularly exposed to a toxic admixture of inflated real estate and other assets. (See: “California pension funds paid millions to former insiders working as middlemen investors”.)

As their fiscal situation deteriorates, the states are transmitting the crisis to public schools and colleges, and to cities, towns, and counties, which are already reeling due to sharply declining real estate tax assessments.

Illinois, confronting a nearly $13 billion deficit, has simply ceased making promised payments to state agencies, including the university system. University administrators have responded by ordering furloughs for most university employees. As in California and many other states, drastic tuition increases are in store. (See “Illinois stops payments to university system, mass furloughs result”.)

The state’s delinquency in payments means that an untold number of local organizations that provide important social services have been forced to scale them back or end them completely. The Vermilion County Health Department, which includes the city of Danville, had not received $800,000 in promised funding as of December 1, 2009. In response, public health administrator Stephen Laker “had to cut programs he had built up over a 39-year career,” including maternal and child care programs, Stateline.org reported.

“For the last three recession cycles, it’s been common for states to reduce financial support for local governments during the recession, and once they come out of it, they restore most of what they’ve cut,” said Michael Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago. But, as Stateline notes, “This time is different. Now local officials are wondering whether that money will ever come back.”

These developments are provoking sharp divisions between state and local governments. Across the US, universities, public school districts and cities have made public appeals demanding promised funding and have taken legal actions against state legislatures. In California, municipalities were able to block the legislature’s attempt to cut transportation funding, and in Illinois university administrators recently held a high publicity press conference criticizing state officials for withholding money.

As tensions among federal, state, and local governments mount, press reports from America’s states, cities, and towns are indicative of a country that can no longer properly be called “rich.”

In Pawtucket, Rhode Island, the mayor is considering scaling back public street lighting to confront the state’s decision to cut back on funding to cities and towns. Stateline reports, “Raising property taxes is a difficult proposition in Pawtucket, which has one of the highest foreclosure rates in the state. Coat drives and soup kitchens are drawing more people than in any recent year, and municipal workers, who haven’t seen a raise in four years, are taking furlough days. The senior center and the library are open fewer hours and youth leagues maintain their own athletic fields.”

“Street lighting is something that people take for granted but maybe they shouldn’t,” said Mayor Jim Doyle. “We might have to start reducing the lighting in some areas of the city.”

The state of Michigan has ended its annual State Fair, a carnival and exhibition of agriculture and industry dating back to 1849. It has also scattered its state archives.

Arizona has sold and leased back the office tower in which most of its state offices are located.

And in Colorado Springs, considered to be a rather affluent US city, the Denver Post reports: “More than a third of the streetlights in Colorado Springs will go dark... The police helicopters are for sale on the Internet. The city is dumping firefighting jobs, a vice team, burglary investigators, beat cops — dozens of police and fire positions will go unfilled.

“The parks department removed trash cans last week, replacing them with signs urging users to pack out their own litter. Neighbors are encouraged to bring their own lawn mowers to local green spaces, because parks workers will mow them only once every two weeks. If that.

“Water cutbacks mean most parks will be dead, brown turf by July; the flower and fertilizer budget is zero.

“City recreation centers, indoor and outdoor pools, and a handful of museums will close for good March 31 unless they find private funding to stay open. Buses no longer run on evenings and weekends. The city won’t pay for any street paving, relying instead on a regional authority that can meet only about 10 percent of the need.”


Workers Struggles: Europe, the Middle East and Africa


British power station workers walk out over safety

Up to 300 construction workers at a Staythorpe power station in Nottinghamshire took unofficial strike action February 16 after a health and safety breach involving scaffolding.

Union offers to suspend Welsh port strike

The Unite union says it has offered to suspend a strike by port workers after facing a possible High Court injunction over the industrial action. The walkout involves around 50 port pilots and launch crews staff at Milford Haven, Pembrokeshire. The largest port in Wales, it is the UK’s sixth largest port and home to two terminals that supply natural gas to the UK network after it has been shipped from abroad.

The workers were balloted over a walkout February 11 and 12 in a dispute over the pension scheme, which has an apparent deficit that has grown from £2.5 million to more than £9 million within less than three years. Talks continue between the parties but the port authority said it believed there were “some inconsistencies” when port workers were balloted.

Strike threat at Financial Times

National Union of Journalists (NUJ) members at the Financial Times (FT) have threatened to take industrial action following a proposal by the paper that four journalists working on FT Chinese move to China and work for reduced salaries.

According to the NUJ, the FT journalists have been told they face possible redundancy if they decline to move to China. Two of the four journalists affected are British citizens.

One of the four journalists working on FT Chinese said in a letter to NUJ colleagues, “Last year we finally broke even, which is absolutely an achievement worth celebration. However, just as we were contemplating what to do to further enhance our position, there came this horrible and stunning decision of redundancy from the management. Needless to say, it was a tremendous shock to the entire team. This reminded us of a very old Chinese saying: ‘kill the donkey after it has done its job at the mill’.”

The journalist who wrote the letter said that Chinese law forbids Chinese nationals from working for foreign media inside the country. Journalists working on FT Chinese are reportedly already on less pay than journalists working elsewhere on the FT.

National gallery staff in London to strike over pay

Security staff walked out over two days this week at the National Gallery in London in a dispute over pay. Hundreds of visitors were ushered out of the gallery into Trafalgar Square as workers left their posts on February 16 and 17.

The industrial action, in protest at a 2.5 percent pay award, was organised by the Public and Commercial Services Union (PCSU) after 82 percent of members voted in favour.

The union claims the wages are lower than any other museums and galleries in London. The majority of warders are paid less than £15,000 a year—the recommended London “living wage”—after working 50 to 60 hour weeks. Many have to rely on overtime and weekend working to top up their basic pay, while others have been forced to take up a second job.

Finnish icebreaker crews issue strike notice

The Helsinki Times reported February 15 that the Finnish Seamen’s Union has issued a strike notice to include sailors and crew on icebreakers, multi-purpose vessels and archipelago supply vessels. A pay and conditions agreement covering icebreaker crews will expire at the end of the month.

In accordance with industrial action law the strike has been scheduled to begin in a fortnight’s time. Talks between the union and government-owned Arctia Shipping, which operates icebreakers and supply vessels, have stalled. The Transport Agency said the strike would bring all shipping to a complete standstill.

The Finnish icebreaker fleet has been very actively engaged this winter, with temperatures staying well below zero Celsius even in southern parts of the country. The thickness of sea ice is set to rise further over the next few days. The agency added that in the event of industrial action it could request assistance from Sweden.

Stevedore strike hits Finnish ports

Ports across the country are set to grind to a halt March 4 as a strike involving some 3,100 permanent and 400 temporary stevedores takes place over lack of agreement on a collective labour contract. The port strike was originally scheduled for February 19 before being cancelled following an intervention by the Economic Affairs ministry.

On February 2, wildcat strikes by stevedores at seven Finnish ports brought half of the country’s freight traffic to a standstill. Around 80 percent of all goods transported in and out of export-reliant Finland transit through the country’s ports.

Finnish transport workers strike

Transport workers across the country are set to strike February 21 over a wage dispute. Around 40 divisions of the Finnish Transport Workers’ Union (AKT) are expected to participate in the walkout. The action will severely affect the public transport system, including aircraft refuelling at Helsinki-Vantaa Airport (HEL), which serves the capital Helsinki.

French refinery workers strike over plant closure

Oil refinery workers at Total SA began a 48-hour strike February 17 to protest the planned permanent closure of crude processing operations at an idled plant near Dunkirk in northern France. The industrial action is affecting all six of the Total’s French refineries with a “massive following” and will lead to lower output and shipments, Christian Votte, a representative at the CGT union, said from the Gonfreville refinery.

The affected plants were already at “minimum production levels,” Total spokesman Michael Crochet-Vourey said. On February 16, around 100 workers occupied the administrative offices of the refinery near Dunkirk.

“The management’s offices were invaded this morning,” Maxime Delanoix, head of communication at the Dunkirk refinery told Reuters by telephone. “There are about 30 people occupying the offices at the entrance of the site but they allow workers who are not striking to come and go,” she said.

The Paris-based company lost about 100 million euros ($137 million) a month at its six French plants in the past nine months, Michel Benezit, head of refining, said last week. The refiner, Europe’s largest, plans to reduce global processing capacity by about a fifth, or 500,000 barrels a day, between 2007 and 2011. Total suspended refining at the Dunkirk plant in September after halting a crude-distillation unit at its biggest French refinery at Gonfreville in Normandy a month earlier. Total has about 370 employees at Dunkirk and about 400 sub- contractors.

France: workers at IKEA go on strike

On February 13, hundreds of staff at IKEA, the world’s biggest furniture retailer, went on strike at 23 of its stores to demand better pay and conditions. Reuters reports that up to 1,000 staff supported the action.

The strike is believed to be the biggest to hit the French operations of the Swedish firm, which have traditionally cultivated an “employee-friendly” image. IKEA, which sells low-price, self-assembly furniture in 25 countries, has had to make staff cuts worldwide and slow down expansion in response to the global economic crisis.

Workers want a 4 percent pay rise, compensation for staff working outdoors and more recruitment to tackle staff shortages. The management has proposed only one percent across the board and another one percent on merit. IKEA employs 9,000 workers in France in 26 stores, and 123,000 worldwide in 267 stores in 25 countries, with another 34 operating under franchise. In June, it said it had slashed 5,000 jobs to cope with the drop in demand brought about by the global economic crisis.

Lufthansa pilots vote for strikes

Pilots at the country’s main airline, Lufthansa, voted February 17 to stage their biggest strike action in almost a decade over jobs security. Over 93 percent of the 4,500 pilots at the airline, one of Europe’s “big three” with Air France-KLM and British Airways, opted to stage four days of industrial action starting at midnight on February 22.

Talks collapsed in December, with the Cockpit union demanding a 6.4 percent pay increase and commitments that pilots would keep their jobs as the firm shifts passengers to cheaper foreign affiliates. The airline said that the union was also making a demand for greater say on management decisions, which “cannot be accepted.”

The strikes will also affect Lufthansa Cargo, one of the world’s biggest freight carriers, and Germanwings, which operated around 800,000 flights last year. Britain’s national carrier is currently slashing almost 5,000 jobs. Air France-KLM is cutting 2,700 staff and Lufthansa is cutting costs by a billion euros ($1.4 billion).

Lufthansa, which employs around 100,000 people, was hit by the worst strike in its history in 2001. The Rheinische Post cited an official at Cockpit as saying: “It’s going to be around the same scale this time. Small warning strikes are insufficient. The differences are too fundamental this time.”

Italian fashion workers strike

Workers at the country’s Mariella Burani Fashion Group (MBFG) took industrial action February 12, the deadline for the Burani family to show it could spearhead a financial rescue of the debt-ridden company. The workers demonstrate outside Mariella Burani headquarters.

The strike follows a Milan court ruling February 11 declaring bankruptcy on the family’s Burani Designer Holding (BDH), which indirectly controls MBFG. MBFG employs around 2,200 workers. MBFG, whose shares have been suspended since September, has nearly 500 million euros ($683.6 million) in debt and has been in talks with banks for months to seal a “restructuring” deal.

Spanish workers demonstrate against plan to raise retirement age

In the first real sign of industrial unrest since the government announced austerity measures to rein in its huge budget deficit, nationwide demonstrations have been called against a plan to raise the retirement age from 65 to 67 years. General Workers Union leader Candido Mendez said that the first protests will be held February 23 in about 10 cities including Madrid, Barcelona and Valencia. In most cases, the proposed changes would mean a smaller pension.

Ireland: striking workers to begin hunger strike

Workers at Green Isle Foods in Co Kildare, who have been involved in a strike at the plant for the last six months, are to begin a hunger strike from this week. The Irish Times reported that the Technical, Electrical and Engineering Union (TEEU) said shop steward Jim Wyse would commence a hunger strike February 17 in protest at what it said was the continued refusal of Green Isle Foods to accept Labour Court recommendations for the settlement of the lengthy dispute over the dismissal of union members.

The union said that if the company continued to refuse to accept the court’s recommendations or engage in talks with the TEEU a second member would join the hunger strike on February 24, followed by another worker each Wednesday.

A number of employees were allegedly sacked after a confidential file was sent in error to a staff member. The file contained restructuring proposals, and the employee shared that information with staff.

Irish public service union wants to “re-engage” government

Trade union leaders are to defer any major escalation of industrial action in the public service for up to a month to allow the government to decide if it wants to “re-engage” in talks, reports the Irish Times. The current, month-long, low-level campaign of action in protest at pay cuts introduced in the budget is to continue. This week, lower-paid civil servants put in place a ban on answering phones across all government departments.

Middle East

Egyptian textile strike continues into second week

On February15, sit-in by workers at Tanta Flax and Oils Company in Cairo entered its eighth day. Around 50 women and children joined the roughly 300 men who are demanding that the company either be run properly or that it is closed and they receive their financial entitlements, according to Daily News Egypt.

Workers have criticized the role that the Egyptian Federation of Trade Unions and the manpower ministry have played in the dispute. One worker, Gamal Othman, speaking to Daily News Egypt outside the Cabinet building where the sit-in is taking place, was very critical of statements made by Manpower Minister Aisha Abdel-Hady on “El-Beit Beitak”, a talk show broadcast on state-controlled Channel 2 on Monday.

Abdel-Hady alleged that “outside political forces” are directing the strike and sit-in with “political objectives”. “Political forces didn’t take workers from their homes and bring them here—if there are people helping the workers with food and so on, well that’s because they’re sleeping in the street,” Othman responded, adding that the government wants workers to “get fed up and leave. We won’t leave though. We’re determined. These are all just attempts to break up the sit-in.”

In a statement issued on Sunday the Tanta workers criticized the failure of the minister to mention that the Saudi investor who bought the formerly public sector company in 2005 “failed to respond” to the demands they made during last year’s five-month strike. Workers went on strike over demands that included an annual pay raise amounting to 7 percent and the reinstatement of nine workers, who they say were unfairly dismissed.


Zimbabwean public sector strike

The strike by public workers for a monthly wage of $US600 is now in its second week. Those on strike include teachers, hospital workers and civil servants. Some unions have become concerned over the actions of Zanu PF militia and security staff who have given active support to the strike. According to Progressive Teachers Union of Zimbabwe (PTUZ) leader, Takavafira Zhou, Central Intelligence Officers and other security forces personnel have appeared at some schools and threatened teachers and head teachers not supporting the strike. Zhou has said his union may withdraw support from the strike.

The Zimbabwe Teachers Association (ZIMTA) has also expressed concern at the “politicization” of the strike. Zanu PF would seem to be using the dispute to destabilize Prime Minister Morgan Tsvangirai and the MDC. However, the strike remains solid so far but the government has refused to negotiate with the striking unions.

Nigerian media workers threaten to strike

Workers belonging to the Radio, Television, Theatre and Arts Workers Union of Nigeria (RATTAWU) issued an ultimatum February 3 threatening strike action in 21 days. The union called on the government to set up a negotiating committee charged with producing a new salary structure for its members.

The union said failure to set up such a committee within the 21 days given would result in its members taking all-out strike action. The workers are employed in news agencies such as Voice of Nigeria and News agency of Nigeria as well as other broadcast and news agencies.

Kaduna state medical staff strike

Health care staff including doctors at nearly 1,000 primary healthcare centres and 28 general hospitals in the north-central Nigerian state of Kaduna began strike action Sunday, February 14. The action is over the failure of the state government to implement an improved pay and conditions package agreed last November. Part of the agreement was a 350 percent pay increase to bring healthcare workers in line with that paid in other Nigerian states.

The Kaduna State Health Workers Consultative Forum, representing the unions involved in the strike, say there has been strong support for the action amongst workers. The state government has had to rely on student doctors and medically trained military staff to try and maintain a service.

Nigeria: Non-academic staff launch five-day strike

Workers belonging to the Non-Academic Staff Union of Universities (NASU) began five days of strike action on February 16. The union has called for action to be taken at all tertiary education institutions across Nigeria. The action is over the non-implementation of a new salary structure originally negotiated with the government back in 2008.

The action was agreed at an emergency meeting in Abuja at the weekend at which 80 NASU branches were represented. The union has said if there is no response from the government after the strike, it would initiate indefinite strike action. Other unions including the Academic Staff Union of Research Institutes have said they will join in the strike action.

Ogun state court staff resumes suspended strike action

Court workers in the state of Ogun this week began strike action in pursuit of the implementation of a new salary structure. The workers belong to the Judiciary Staff Union of Nigeria (JUSUN).

The workers suspended previous strike action last November on the basis of an agreement with the state government that the new structure would be implemented from January this year. Following failure of the state government to keep its agreement, the union recommenced the strike action. The union has posted pickets at all courts and according to the union chairman the action has succeeded in bringing the work of the courts to a halt.


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