April Round-up

Happy Earth day! Friday, April 22, 2005:

Top

Geopolitics

Pope JohnPaul II died and was replaced by Benedict XVI.  The common view is that Benedict will be very conservative and his track record endorses that view.  his papacy is expected to continue John Paul II's strongly traditional interpretation of the Catholic faith, including opposition to abortion, homosexuality, priestly marriage and women priests. However, he may be gentler than expected.  He has nothing to prove so will not feel pressure.  He has important objectives: to reinvigorate the catholic church which has a shortage of priests, to make the religion more attractive to people in developed economies, to heal an internal rift between wealthy North and poor South, and bring institutional flexibility in an organisation which is run from the top. Modern psychology (spiral dynamics) describes a natural evolution of thinking from conservative to liberal, and advancement takes place as one assimilates with one approach and then contrasts it, e.g. in this case become very conservative and then build from that to include other views. If Benedict pursues a conservative mandate there will be little change.  If he tackles the challenges of a modern world, which he is well equipped to do being broadly educated, experienced and spiritual, the benefits could be far reaching and felt in his lifetime.

The European Union has been brought under scrutiny as France votes on adoption of the draft constitution in May.  It is emotionally disappointing that a founder of the EU, deeply involved with the drafting of the constitution, seems unlikely to win popular support for it.  Even the neglect of the Stability and Growth Pact will not get a Yes.  And the SGP is more important than pushing the constitution through. If the constitution does not receive support there will be a temporary backlash against integration, but the real effect will only be a slowing down of the process and will allow administrators to focus on implementation of goals already agreed, such as fiscal discipline and cross-border banking transparency, and making the EU administration more efficient.  A constitution that is not understandable by people for whom it is written is worse than none. (The US constitution is a few pages long and though extended by the Bill of Rights and various amendments remains a sensible and simple document.) While the reluctance to endorse the constitution points away from a federal Europe, it may result in a more holonic approach, reflecting federalism but adapting it for use where language and cultures are varied.  The efficiencies of integration are proven.  The challenge is increasingly to cultivate variety and diversity of opportunity while standardising common asset administration. A holonic approach would combine teh benefits of tribal law (eg Irish Celtic custom) and federalism, providing an infrastructure for efficient communication of goods and ideas throughout.

Oxford Analytics published the third and long-delayed Arab Human Development Report (AHDR). The report is so critical of both Western powers and Arab governments that it almost lost its UNDP sponsorship. Its independent approach to its themes of freedom, rights and political stagnation will stir controversy in the Arab and Western media. Coverage of its contents will provide one test of whether reforms in the region are real or cosmetic. In place of familiar and vague labels such as 'authoritarian' and 'repressive', the report talks of the "black-hole state". Adopting an analogy that was deleted from the text and reinstated more than once, it conveys the stultifying political architecture of the modern Arab state by likening it to an extinguished star that has collapsed into a magnetic field where everything is paralysed and from which nothing escapes. Instead of 'democracy', a term defamed in Arab eyes by the war on Iraq, the report describes the ideal scenario for future development using the Arabic term "izdihar", meaning the flourishing of something that has to take root in order to thrive. It states clearly that the first step towards this process is to allow three key freedoms: of opinion, expression and association.

China wooed South America earlier in the year, now is wooing Africa.  President Hu initiated trade and investment development at a 50 year celebration of the Bandung Conference.  China is likely to be successful in building these ties which will help insulate the growing Chinese economy from US and European influences.  China will not harp on about human rights abuses and will gain favoured access to raw materials and nascent markets. Complacency by developed economies would be naive.

Japan and China have experience popular unrest of old, but memorable, indiscretions. It is not as clear cut as one might think. The rewriting of history in Japan means that people are simply unaware of the facts of Japanese occupation of various parts of China. But it is dangerous to throw judgments about.  There is no doubt that all nations have skeletons in the closet.  China has done its part in rewriting history.  The same has happened on our doorstep in Ireland over the past century.  It is certain that the climate must change and that will come through acceptance and recognition of history and a willingness to move on. Learn to respect one another and find common ground or at least avoid destructive behaviour.  Japan and China could come together because of mutual benefits.  The amount of crude oil required to generate $1 of nominal GDP is 800 grammes in China and 130 grammes in Japan.  China can leapfrog development with the application of Japanese technology.  Japan would welcome the market expansion.

In related news, the leaders of China's Communist Party and Taiwan's opposition Nationalist Party have met in Beijing for historic talks. It is the first such meeting since the Nationalists were defeated in the civil war and fled to Taiwan in 1949. Chinese TV showed President Hu Jintao smiling as he shook hands with Nationalist leader Lien Chan who spoke of the need to seek reconciliation between the people of China and Taiwan. China refuses to talk to Taiwan's president, because he does not accept Beijing's precondition for dialogue - acceptance of the One China Principle, which means that Taiwan is part of China. Supporters of independence for the self-governing island would like to call it the Republic of Taiwan, but they know that would be seen as a declaration of formal independence, and might bring a military response from Beijing. The Taiwanese president, despite his party's pro-independence leanings, has pledged he has no intention of taking such a step.

India and Pakistan seemed to make real progress in reducing the Kashmir conflict. Passengers on the first cross-Kashmir bus service in nearly 60 years have crossed the Line of Control that divides the region. Some passengers on the buses between Srinagar in Indian-controlled Kashmir and Muzaffarabad in the Pakistan sector cried with joy as they crossed. Indian Prime Minister Manmohan Singh called the new service "a caravan of peace". Manmohan Singh and Pervez Musharraf said that peace between the two nuclear rivals is "irreversible", speaking after signing a joint statement a day after peace talks in the Indian capital, Delhi. They have agreed to increase trade and transport links between Indian and Pakistani Kashmir to help find a solution to the long-running dispute. If this success continues it will be another sign of the growing attractiveness of doing business in these countries.

The Global Campaign for Education has said that the world's richest countries are failing to provide the funds needed for education in the developing world. The report was published during ministerial meetings of the International Monetary Fund and World Bank in Washington at which delegates are set to discus efforts to achieve universal primary education. The Global Campaign for Education says 100 million children are still not going to school and it blames rich countries for failing to provide the funding necessary. It grades 22 of them in what it calls a school report card in which the US and Austria receive the bottom F grade.

A Texas based newsletter, critical of the US administration has seen its domestic audience evaporate while its international audience balloons. The Iconoclast's poignant views rocked the boat with this article.

The oil for food saga took a not unexpected turn in April as UN chief Kofi Annan pointed out that the US and UK had turned a blind eye to oil smuggling by Saddam Hussein's regime. Mr Annan had suggested the two had inadequately policed UN sanctions against Iraq, enabling the regime to earn huge amounts in illegal deals. "The bulk of the money Saddam Hussein made out of smuggling was on the American and British watch" he noted. The US and UK rejected allegations; British Foreign Secretary Jack Straw said the charges were "inaccurate", while Washington was also dismissive. US Senate investigators have alleged that the Iraqi regime received some $4bn (£2.13bn) in illegal payments from oil companies involved in the programme. But this figure is dwarfed by the $14bn (£7.5bn) that allegedly came from "sanctions-busting" - illegally selling oil to neighbouring states such as Jordan and Turkey. Anan said "Possibly [the US and UK] were the ones who knew exactly what was going on, and that the countries themselves decided to close their eyes to smuggling to Turkey and Jordan because they were allies." This is a realistic expectation in light of the players concerned and the case history. Its principal effect may be to alleviate criticism of the UN briefly.

While South America has the potential to improve the livelihoods of its people quickly, and we have seen growing trade ties which catalyse this process, the endemic political instability is holding it back.  We have seen the deterioration of Venezuela's potential as its dictator Chavez takes control of swathes of the economy and in April Ecuador suffered another change of President.  The adjacent table from the Economist is illustrative of the problem. 

The US pensions system is heading towards bankruptcy, President Bush said in a news conference carried on prime-time television. He proposed curbing the pension growth of wealthier Americans to protect the retirement income of low-wage workers warning that social security would be insolvent by 2041 if it was not reformed. These are strong words which suggest that the US administration might be seeing the situation more clearly. But one should await concrete changes before betting that a viable solution will be pursued - the data are sobering.

Last month we wondered if any shock would be enough to jolt us out of our complacency, noting that it took a halving of the value of the currency to begin the process in Asia in 1996-1998.  But Goldman Sachs has suggested in a recent report that a super spike in the price of oil to $ 100 a barrel may be imminent. Well, if that does happen, it certainly would change our consumption patterns, and then perhaps also the culture of greed.  One should still not hold one's breath.

Top

Risk and Terror

Syria announced that all of its military forces have left Lebanon in line with United Nations demands. It informed the UN of the withdrawal after a parade of about 200 Syrian soldiers in the Bekaa Valley to mark the end of the 29-year deployment. Pressure for Syria to leave grew after the assassination of former Lebanese PM Rafik Hariri in February. Confirmation is still required, but it is encouraging to see the effect of popular peaceful expressions for change.

Gen Richard Myers, chairman of the US joint chiefs of staff, said that militants staging attacks in Iraq are as strong now as they were a year ago making between 50 - 60 attacks daily, the same rate as in 2004. (May 1 is the 2 year anniversary of Bush's statement that the war is won.) He added it was too early to say if a recent surge in violence amounted to a concerted campaign, and insisted that US-backed forces were "winning". A BBC correspondent says US optimism after the Iraqi elections has now gone. Speaking of the insurgents who have waged a campaign of violence since the invasion by coalition forces in 2003, Gen Myers said: "I think their capacity stays about the same. And where they are right now is where they were almost a year ago." The view from Washington, which is fair, is that success in Iraq now depends on the new government in Baghdad and whether or not it can entrench itself and become a cause that Iraqis will deem worth fighting for. The utility of the military engagement is losing some of its raison d'etre, even for the invaders which may accelerate social improvements.

Top

Investment, Finance & V. C.

In April, there seemed to be rather more dire predictions of economic troubles ahead than normal.  The stability of the US economy has been of concern for some time.  Some benchmarks that put us in the frame.  Americans are borrowing at more than 6% of GDP each year, the US savings rate is the lowest for 70 years, the deficit has ballooned, pensions and healthcare need rejuvenation.  There are significant challenges to be addressed.

The US economy expanded at its slowest pace in two years in the first three months of 2005, official figures show. Gross domestic product (GDP) grew at an annual rate of 3.1%, as consumers and businesses tightened their belts in the wake of rising energy prices, the slowest since the first quarter of 2003. The weaker-than-expected growth figures knocked more than 1% off the major US stock indexes on the day of announcement. Many analysts had expected a more robust figure of 3.6% for the first three months of 2005, and the data revealed a sharp slowdown since the final quarter of 2004, when GDP grew by 3.8%. Housing starts also reflected a slowdown: While house prices rose by 11.2% in 2004, the rate of increase slowed markedly in the fourth quarter, to only 1.7%. At the end of April, the Commerce Department announced that housing starts fell by 17.6% in March, the sharpest monthly decline since 1991.

Japan is to press ahead with the sell-off of the multi-trillion dollar postal savings system. Prime Minister Junichiro Koizumi has signed off on a programme starting in 2007 and lasting a decade. Reform of the system will revitalise the Japanese economy, though the plan has been watered down in the hope of calming ardent opposition from his own MPs, who fear mass lay-offs. The system's 350 trillion yen ($3.2 trillion) in assets have provided a source of spare cash for politicians' pet projects. The system has also been popular with Japanese savers, accustomed to rock-bottom rates of interest and suiting the Japanese culture of homogeneous social behaviour, but it has kept savings away from the private sector where they are more efficiently applied.

While the German economy continues to be under pressure we are still optimistic about its outlook. Playing to our bias we note that German unemployment has unexpectedly dropped in April, falling below the five million mark, as warmer weather prompted companies to hire more people. This drop in unemployment cuts the rate to 11.8% from 12%. German unemployment hit a post-war high in March after cold weather deterred many firms from hiring workers. Job creation has become a key political issue as Chancellor Gerhard Schroeder prepares to fight state elections, and he is balancing this against labour law reform which is needed to open opportunities across the economic spectrum.

More fuel was added to the "long term bear" fire by Crestmont Research which published more data and analysis supporting the view that stock markets are in a long term stagnant/downward cycle.  It also suggested that the decline in volatility over the last couple of years is an indicator that the short term outlook is for decline.  The analysis is principally technical and investors selecting companies based on fundamentals will continue to find value.

Many of us find ourselves inundated with information: data overload.  What we need is help choosing!  A reference to the utility of increasing amounts of data in the analysis of economic predictions pointed to a CIA research paper on the subject. Key findings suggest that more data means more careful discretion is required, which is not regularly applied. The findings were:

• Once an experienced analyst has the minimum information necessary to make an informed judgment, obtaining additional information generally does not improve the accuracy of his or her estimates. Additional information does, however, lead the analyst to become more confident in the judgment, to the point of overconfidence.

• Experienced analysts have an imperfect understanding of what information they actually use in making judgments. They are unaware of the extent to which their judgments are determined by a few dominant factors, rather than by the systematic integration of all available information. Analysts actually use much less of the available information than they think they do.

This warning against over-confidence by experienced practitioners is well put by Dr Pratchett in his book Pyramids. In response to a question on "who are the enemies which dog our steps and for whom we are ill-prepared", the protagonist answers: "Ill-preparedness. Carelessness. Lack of concentration. Poor maintenance of tools. Oh, and over-confidence, sir."

Also on this subject, a current recommended read (by The Ecologist as well as The Economist) is "Blink" by Malcolm Gladwell which discusses our snap judgment decision making process. It has a great zen sub-title: "the power of thinking without thinking"!

The concept of consumer as king has been bandied about for several years now. The consumer will of course never be king per se - "king"'s choices are not limited by availability, price etc - but the power of consumers to influence companies and markets has been a principal trend watched by us.  The Economist concludes in its survey of Consumer Power on 2 April that the weight of power does now rest with consumers - information, pricing, distribution chain logistics, product development, market research, advertising are all now being impacted in significant ways by the net.  It appears that this is more so in some markets, like South Korea, thank others.  Certainly any internet development policy of governments should be encouraged if the analysis in the survey is anything to go by.

In a recent paper John Mauldin discussed big changes in the next 40 years.  His principal view is that there are three things that over the next 40 years are not going to change.

1. The innovation cycle is not going to change - it will be with us as it is simply part of our human progression, although it is going to increase in intensity and frequency.

2. The Business Cycle and its cousins, Secular Bull and Bear markets, will not change. As long as the business cycle remains in place, and Congress has yet to find a way to repeal it, this tendency to go from over-valued to under-valued markets, that started when the Medes were trading with the Persians, will persist.

3. Human psychology is not going to change. Human psychology is the reason we get these cycles and the reason we get busts and booms.

This is striking because I agree with much of his other analysis, but not this.   While the main premise is sound, there is a growing body of evidence that human psychology is making a quantum leap from exclusive models to inclusive models (integral systems) which in turn has a profound effect on economics which certainly will remodel business cycles and possibly innovation cycles too.  The likelihood of the change taking place in 40 years is low, but increasing.  And given the rate of natural destruction, necessary.

Responsible Investing

In March we heard of Hank Greenberg stepping back from CEO duties at AIG.  While many fiduciaries felt confident to allow Greenberg wide latitude in his style of management, the risk of inadequate governance has been shown to be worth billions of dollars in enterprise value. In early April it was shown that Greenberg, gave his wife more than $2bn (£1.2bn) of his shares in the company days before stepping down. And this recent quote gives colour to the style of control that allowed Greenberg to run AIG for four decades: "This board is being run by a bunch of lawyers who can't spell the word 'insurance'.  If you get rid of me, you will destroy this company!".  Ahhh, the sound of the City!

New York State Attorney General Eliot Spitzer, championing the role of outside regulation said "A key lesson from the recent scandals is that the checks on the system simply have not worked. The honor code among CEOs didn't work. Board oversight didn't work. Self-regulation was a complete failure. But one thing has worked: law enforcement." .  That of course is not the whole story because AIG had evidently been lapsing in its duties for many years without detection.  Nevertheless, the likelihood of effective enforcement is making the insurance industry, and others, more efficient.

The Economist, the venerable and sober newspaper, covered its front page on April 21 with concerns about the environment.  The cover story lamented the lack of rigorous analysis and tools being applied in this area of management and this article deftly explains the economics of environmental investment and shows how valuable the benefits are.  At the end of the 1990s WRI estimated ecosystem services at twice global GDP (~ $ 33 trillion).  The World Bank sponsored study from October 2004 "How Much is an Ecosystem Worth?" offers a comprehensive analysis.

Venture Capital

A most interesting ripple from the investigations in to AIG and the departure of Hank Greenberg has been the termination of the two heads of AIG Capital Partners, CEO Peter Yu and managing director Bill Jarosz.  A spinoff of the private equity group had been discussed, but this appears unlikely now.  Although the departure of the two bosses was ham-handed - they were marched out of the office by security, it is unlikely to affect the performance of investments to date and may improve the governance profile of the group if their departure is a reflection of collusion, which is likely given the track record of AIG and the nature of infrastructure investment and similar private equity deals in Asia where much of AIG Capital Partners' capital is employed.

US VC disbursements dropped in the first quarter.  Figures  released by MoneyTree (PricewaterhouseCoopers, the National Venture Capital Association and Thomson Venture Economics) show just 674 U.S.-based companies raising approximately $4.63 billion. That represents a 14% deal volume and 15% investment volume decrease from the $5.44 billion raised by 776 U.S.-based companies in Q4 2004. The number of deals was a bit higher than during the first quarter of 2004 (674 vs. 665), while disbursement volume was significantly lower ($4.63 billion vs. $5.03 billion).  Dan Primack of PE Week suggest that this is partly because of the increase in investment in Europe by US VCs.  However, some managers are beginning to turn away new money because they are concerned about deal price inflation fuelled by excess liquidity in the market.  Institutional investors are funding VC because they are seeking higher returns which are not being yielded by public market portfolios.  Their eagerness is exacerbated by the need to fund obligations contracted during more optimistic times.

Uplift Equity, a newly formed team that focuses on wellness private equity deals, has invested in Organic To Go a Seattle food retailer and caterer.

Interest Rates and Currencies

The US Fed funds rate is expected to hit 3% in early May.  The rate of tightening, while still needed, is now complicated by signs of inflation. Greenspan warned that unless lawmakers come to grips with spiraling U.S. deficits, the economy was at risk of stagnation 'or worse.' 'Under existing tax rates and reasonable assumptions about other spending ... projections make clear that the federal budget is on an unsustainable path, in which large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years,' Greenspan said in prepared testimony.

The tensions in currency markets continues.  The US$ weakens as its deficit continues to grow. The Chinese Remnimbi's devaluation would help alot of China's trading partners, but this is not persuasive rationale for China.

Trade and FDI

Trade advocates will enjoy the findings of a recent paper in the Journal of Economic Behaviour and Organisation which shows that trade is a principal characteristics distinguishing Homo sapiens from H. neaderthalensis.

Lifting of quotas has resulted in ballooning of Chinese textile trade.  The EU trade commissioner is planning to investigate the change.  The US government has also accepted a request from the US textile industry to investigate the sharp increase in imports of textiles from China. While it was expected that Chinese trade would increase because they are the low cost producer, there are concerns about environment and social/employment conditions.  If pressure is applied by regulators or consumers it is likely that costs will increase but that China will remain the low cost producer.  The EU's trade commissioner has made a plea for Westerners to avoid protectionist thinking. In contrast to his pronouncements Friends of The Earth invite skepticism of Mandelson's integrity:  Play the Mandy game here.

Supachai Panitchpakdi, head of the WTO is concerned that the current round of talks has stagnated again.  The website for the next Ministerial conference is http://www.wtomc6.gov.hk/.

An illustration of the opportunity to level the playing field through open trade policies is in these numbers by the PPI: U.S. sugar subsidies: $1.2 billion a year.  GDP of Nicaragua, 2003: $3.6 billion  World sugar subsidies, 2003*: $7 billion  (* OECD estimate)

A recent analysis of employment costs indicated that the total employee cost is about $ 90,000 in the UK, $ 70,000 in the US and under $ 30,000 in China.  This indicates a simple correlation with efficiency, productivity and also social equity.

Top

Energy

The EU is upgrading its eco labelling of electrical appliances.  Phased in over the next two years, appliances will now have energy consumption ratings, in particular to raise awareness of energy consumption when appliances are "asleep".  The wasted energy is estimated to consume 1% of production.  Information is accessible via http://europa.eu.int/scadplus/leg/en/lvb/l32037.htm.

For a readable survey of the tensions building in the energy sector The Economist published a survey on oil in its April 28 edition.  The major challenges are rising nationalism of oil reserve nations in the face of rising costs and potential revenues as well as the challenge of dealing with environmental and geopolitical side effects.

Climate Change and Environment

Worldwide production of essential crops such as wheat, rice, maize and soya beans is likely to be hit much harder by global warming than previously predicted, an international conference at the Royal Society in London heard in April. 'Food Crops in a Changing Climate, focused largely on tropical countries where most of the world's food is grown and people are most vulnerable to climate change. The benefits of higher levels of the main greenhouse gas, carbon dioxide (CO), will in fact be outweighed by the downsides of climate change, a Royal Society discussion meeting was told. It had been thought that the gas might act as a fertiliser to increase plant growth. Rising atmospheric temperatures, longer droughts, and side-effects of both, such as higher levels of ground-level ozone gas, are likely to bring about a substantial reduction in crop yields in the coming decades, a series of large-scale experiments have shown. It is yet another sinister sign of trouble in store for the world, as it will mean that future levels of food production are unlikely to meet those anticipated hitherto, especially in the poorer countries. In addition, studies in the UK and Denmark show that just a few days of hot temperatures can severely reduce the yield of major food crops such as wheat, soya beans, rice and groundnuts, if they coincide with the flowering of these crops.

Those of us living in northern Europe enjoy mild winters because of the Gulf Stream which brings warm water across the Atlantic from the Caribbean.  There is a great satellite photo showing the temperature gradients here: http://earthobservatory.nasa.gov/Newsroom/NewImages/images.php3?img_id=16885.

The Sunday Times reported in April that Britain’s police forces are going green by using cooking oil to help run their patrol cars. At least seven forces, including the Metropolitan police in London, have turned to vegetable oil blended with diesel fuel to power their vehicles. The move is part of a drive by the forces to cut emissions of harmful greenhouse gases and comes at a time when volatility in the oil markets has sent conventional fuel prices soaring at the pumps. Ironically, the police’s first contact with this green technology came when they cracked down on motorists in Wales who were avoiding fuel duties by filling up with cooking oil. The gamekeeper has now turned poacher: unlike the criminals, however, the police do pay duty on the fuel. The “biodiesel” available in Britain at the moment is made up of 95% diesel and 5% vegetable or rapeseed oil, or sometimes even animal fat. At these concentrations, it can be used in any diesel engine without the need for modification. The product can cut carbon dioxide emissions by up to 5% — based on the fact that it partly originates from vegetable matter rather than just the ingredients of fossil fuel. Suppliers claim that biodiesel burns better in the engine, providing marginally better fuel efficiency, and the vegetable oil is a superior lubricant. Since biodiesel tends to be more expensive to begin with, police forces are unlikely to enjoy any cost savings from switching to the fuel. “It’s actually costing us 3.5p more than normal diesel,” said Martin Whysall, senior fleet administrator at South Yorkshire police. “But it’s not had any adverse effects on the vehicles and no, it doesn’t smell of chip fat.” Some motorists are believed to be mixing normal diesel with far higher proportions of used cooking oil, often given away by chip shops and other fast-food outlets.

Next year Avon and Somerset police plans to replace petrol in some squad cars with bioethanol — an even greener fuel which comes from the fermentation and distillation of grain or sugar beet. The trial is expected to be backed by Ford, which has already successfully adapted its Focus model to run on bioethanol in Sweden.

The All China Environment Federation (ACEF) has been launched in Beijing amid concerns that China's record-breaking economic growth is imposing a massive cost on the environment The unprecedented backing for the new federation from high-level government officials has suggested that Beijing is becoming increasingly serious about environmental fall-out after a decade of unparalleled economic development.

Top

IT

The VOIP boom continues. Resellers of packages are now emerging and volume appears to be rising. While the portfolio investment economics need rigorous diligence, as a business investment the risk return profile is very attractive.

Top

Integral Systems and LOHAS

The Economist led its 21 April edition with the article "Rescuing Environmentalism (and the planet)".  This leading newspaper presented the case, which our approach reflects, that environmentalism works when linked to capitalism.  "Putting our money where our world is" is certainly the way in which consumers and investors make a difference.  The article reflects the growing awareness among leaders of the need to value ecosystem services but also the opportunity to make a living from doing so.  It also increases the expectation that we can leapfrog to environmentally and socially considerate consumption patterns by switching to more responsible brands - "buy Ecover instead of P&G".

The French senate has approved a law granting terminally ill patients the right to end their life. The bill allows doctors to stop giving medical assistance when it "has no effect other than maintaining life artificially". Supporters of the legislation, including the conservative government, the opposition Socialists and the Roman Catholic Church, say it stops short of permitting euthanasia, because it does not allow the doctor actively to end a patient's life.

Spain is passing a law which legalises homogender marriages.  This in a country which used to be the bastion of the catholic religion, where today less than 20% of young people admit to be practicing Catholicism.

Health experts have begun to destroy samples of a potentially lethal flu strain sent to laboratories around the world by a US testing organisation. The samples are of Asian flu, which killed between one and four million people in 1957 but disappeared by 1968. Testing kits containing the virus were sent to more than 3,700 laboratories in 18 countries from Brazil to Lebanon. The World Health Organization said the virus could "easily cause an influenza epidemic" if not handled properly.

Children in Europe and other parts of the world are entering puberty at an ever younger age. The reasons for this are unknown, and the EU is now financing a major three-year project called PIONEER in a determined effort to get to the root of the problem. Two Swedish research groups are involved in the project, both from Karolinska Institutet.  http://info.ki.se/article_en.html?ID=3353

Primates in Peril claims that the Earth's most successful primates - humans - are on the brink of killing off nearly a quarter of their 625 cousin species - hundreds of species of apes, monkeys and lemurs are at risk of becoming the first primate extinctions in nearly a century. The report received input from 50 top specialists from Conservation International and other organisations. Habitat loss and hunting had bought some species to their knees. The report listed the 25 most critically endangered primates. It said that without swift action, great apes such as the Sumatran orangutan and the Eastern gorilla of central Africa could vanish altogether.

“From Darwin to Dawkins: the science and implications of animal sentience” a conference of more than 600 delegates and speakers from 50 nations – including the world’s leading animal scientists – urged world leaders give animals new status. World leaders have been urged to recognise officially for the first time that animals are thinking, feeling beings that are capable of suffering. They also called for an end to intensive factory farming systems internationally. The call was made in a resolution overwhelmingly passed by the conference, which was organised by the Compassion in World Farming (CIWF) Trust. Dr Jane Goodall gave the keynote address, and further speakers included Tom Regan, Mike Appleby, Marc Bekoff, Vandana Shiva, Professor Tim Lang, Marian Dawkins and Patrick Holden. Keith Kenny of McDonalds also addressed the meeting. The resolution calls on the UN, the World Trade Organisation, the World Animal Health Organisation (OIE) and their member governments to join us in recognising that sentient animals are capable of suffering, and that we all have a duty to preserve the habitat of wild animals and to end cruel farming systems and other trades and practices which inflict suffering on animals. The scientific evidence presented at the conference about the ability of animals to think, feel and experience emotions, has been overwhelming and also humbling. It’s time for animals’ status as sentient beings to be accepted in a declaration by the UN, in national and international laws, and in regulations covering the agricultural and food industries.

The threat of a killer flu pandemic is greater than ever because of the spread of the bird flu virus in south-east Asia, the World Health Organisation warned in April. Avian influenza is still spreading, despite countermeasures, and the possibility of a global epidemic that could kill millions is said to be more likely than not. More than 50 people have died from the H5N1 virus in south-east Asia, most of them in Vietnam, where tens of thousands raise poultry in small back-yard farms. In its current form, the virus is difficult for humans to contract, but if it changes its genetic make-up, it could spread rapidly. If the virus infects a person who has a human flu virus, the two may shuffle their genes to create a deadly mix. A new strain could combine the lethal effects of the bird virus with the ability to spread easily among people supplied by the human virus. The World Health Organisation computer models suggest that a pandemic of H5N1 would kill between 2m and 7.4m within 12 months in a "best case scenario" based on the "mild" pandemic of 1968.

The potential risks to human health from GM food being examined in new research called for by the European Commission (EC).  The aims of the project include: assessment and documenting the adequacy of existing risk assessment methodologies and protocols for judging the impact of GM crops; and to identify any possible gaps in knowledge. The top priority will be the assessment of GM plants already released in the EU. But the EC also wants to develop a system of methodologies to assess the long-term safety of both individual groups of GM crops and for different transgenic phenotypes.   The announcement is seen as evidence of a determination within the EU to act extremely cautiously on GM food. It follows the introduction of tough new regulations on labelling of GM ingredients.

This announcement came just before Greenpeace raised concerns about an illegal strain of GM rice grown in China and not approved for human consumption that could have been imported into the UK and entered the food chain. Greenpeace is now calling for an urgent, international product recall after uncovering the illegal release of the rice in China. The campaign group says that the illegal strain — which has been genetically modified to be pest resistant — may have contaminated Chinese rice exports. A Greenpeace research team has uncovered rice being sold and grown illegally in the central Chinese province of Hubei. The team were first alerted to the scandal after conducting a web-search and discovering the illegal rice for sale on the internet. Greenpeace claims that the Chinese GM rice could potentially cause allergic reactions in humans. Despite inducing allergic responses in mice no human food safety testing of this strain of GM rice has been carried out.

Top

Activities, Books and Gatherings

We made good progress on two initiatives in April building capacity in micro-investment and development of Astraea's transformation retreat. Activity in the garden has also been high as bed preparation and planting is now in full swing.

Reading included Emergence by Barbara Marx Hubbard which is worthwhile for anyone seeking spiritual rejuvenation. Her story and interpretation offer a valuable model for others, though it would be inappropriate to presume that her prescriptions are dogmatic, even if occasionally couched in wording to that effect. She also presents a useful bibliography.

Regular readers will know of my Pratchett bias. Re-reading the Discworld collection this year has brought me so far to the seventh book: Pyramids, which is revealing another sophisticated layer of insight to humanity, with humour.

Two leaflets recently published by Graham Wilson, coordinator of the World Future Society's UK chapter, are of interest because they are short and to the point.  10 ways to get ahead and spirit at work will be interesting to our readers.

Congratulations to friend and associate Rhadames Killy who was published in the LJA, a French law journal.  See the copy here.

BeTheChange.org.uk is from 5 May to 7 May in London - a worthy conference for all because its alternative open approach at the highest level of thinking will invigorate innovation in any vocation or objective.

Top

 

 

 

 

 

This report has been prepared for information purposes and is not an offer, or an invitation or solicitation to make an offer to buy or sell any securities. This report has not been made with regard to the specific investment objectives, financial situation or the particular needs of any specific persons who may receive this report. It does not purport to be a complete description of the securities, markets or developments or any other material referred to herein. The information on which this report is based, has been obtained from publicly available sources and private sources which may have vested interests in the material referred to herein. Although GRI Equity and the distributors have no specific reasons for believing such information to be false, neither GRI Equity nor the distributors have independently verified such information and no representation or warranty is given that it is up-to-date, accurate and complete. GRI Equity, associates of GRI Equity, the distributors, and/or their affiliates and/or their directors, officers and employees may from time to time have a position in the securities mentioned in this report and may buy or sell securities described or recommended in this report. GRI Equity, associates of GRI Equity, the distributors, and/or their affiliates may provide investment banking services, or other services, for any company and/or affiliates or subsidiaries of such company whose securities are described or recommended in this report. Neither GRI Equity nor the distributors nor any of their affiliates and/or directors, officers and employees shall in any way be responsible or liable for any losses or damages whatsoever which any person may suffer or incur as a result of acting or otherwise relying upon anything stated or inferred in or omitted from this report.