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The Coming Collapse of the Modern Day Banking System
Staring Into the Abyss
December 17, 2007
By MIKE WHITNEY

Stocks fell sharply last week on news of accelerating inflation which will limit the Federal Reserves ability to continue cutting interest rates. On Tuesday the Dow Jones Industrials tumbled 294 points following the Fed's announcement of a quarter point cut to the Fed Funds rate. On Friday, the Dow dipped another 178 points when government figures showed consumer prices had risen 0.8 per cent last month after a 0.3 per cent gain in October. The stock market is now lurching downward into a "primary bear market". There has been a steady deterioration in retail sales, commercial real estate, and the transports. The financial industry is going through a major retrenchment, losing more than 25 per cent in aggregate capitalization since July. The real estate market is collapsing. California Gov. Arnold Schwarzenegger announced on Friday that he will declare a "fiscal emergency" in January and ask for more power to deal with the $14 billion budget shortfall from the meltdown in subprime lending.

Economists are beginning to publicly acknowledge what many market analysts have suspected for months; the nation's economy is going into a tailspin.
Morgan Stanley's Asia Chairman, Stephen Roach, made this observation in a New York Times op-ed on Sunday:

This recession will be deeper than the shallow contraction earlier in this decade. The dot-com-led downturn was set off by a collapse in business capital spending, which at its peak in 2000 accounted for only 13 percent of the country's gross domestic product. The current recession is all about the coming capitulation of the American consumer - whose spending now accounts for a record 72 percent of G.D.P.

Most people have no idea how grave the present situation is or the disaster the country will face if trillions of dollars of over-leveraged bonds and equities begin to unwind. There's a widespread belief that the stewards of the system - Bernanke and Paulson - can somehow steer the economy through this "rough patch" into calm waters. But they cannot, and the presumption shows a basic misunderstanding of how markets work. The Fed has no magical powers and will not allow itself to be crushed by standing in the path of a market-avalanche. As foreclosures and bankruptcies increase; stocks will crash and the fed will step aside to safety.

In the last few weeks, Bernanke and Paulson have tried a number of strategies that have failed. Paulson concocted a plan to help the major investment banks consolidate and repackage their nonperforming mortgage-backed junk into a "Super SIV" to give them another chance to unload their bad investments on the public. The plan was nothing more than a public relations ploy which has already been abandoned by most of the key participants. Paulson's involvement is a real black eye for the Dept of the Treasury. It makes it look like he's willing to dupe investors as long as it helps his d Wall Street buddies.

Paulson also put together an "industry friendly" rate freeze that is supposed to help struggling homeowners avoid foreclosure. But the plan falls well short of providing any meaningful aid to the estimated 3.5 million homeowners who are facing the prospect of defaulting on their loans if they don't get government assistance. Recent estimates by industry experts say that Paulson's plan will only help 140,000 mortgage holders, leaving millions of others to fend for themselves. Paulson has proved over and over that he is just not up to the task of confronting an economic challenge of this magnitude head-on.

Fed chief Bernanke hasn't done much better than Paulson. His three-quarter point cut to the Fed's Funds rate hasn't lowered interest rates on mortgages, stimulated greater home sales, stabilized the stock market or helped banks deal with their massive debt-load. It's been a flop from start to finish. All it's done is weaken the dollar and trigger a wave of inflation. In fact, government figures now show energy prices are rising at 18.1 per cent annually. Bernanke is apparently following Lenin's supposed injunction ­ though there's no conclusive evidence he actually said it -- that "the best way to destroy the Capitalist System is to debauch the currency."

On Wednesday, the Federal Reserve initiated a "coordinated effort" with the Bank of Canada, the Bank of England, the European Central Bank, the and the Swiss National Bank to address the "elevated pressures in short-term funding of the markets." The Fed issued a statement that "it will make up to $24 billion available to the European Central Bank (ECB) and Swiss National Bank to increase the supply of dollars in Europe." (Bloomberg) The Fed will also add as much as $40 billion, via auctions, to increase cash in the U.S. Bernanke is trying to loosen the knot that has tightened Libor (London Interbank Offered Rate) rates in England and reduced lending between banks. The slowdown is hobbling growth and could send the world into a recessionary spiral. Bernanke's "master plan" is little more than a cash giveaway to sinking banks. It has scant chance of succeeding. The Fed is offering $.85 on the dollar for mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) that sold last week in the E*Trade liquidation for $.27 on the dollar. At the same time, the Fed has promised to keep the identities of the banks that are borrowing these emergency funds secret from the public. The Fed is conducting its business like a bookie.
Unfortunately, the Fed bailout has achieved nothing. Libor rates---which are presently at seven-year highs---have not come down at all. This is causing growing concern among the leaders of the Central Banks around the world, but there's really nothing they can do about it. The banks are hoarding cash to meet their capital requirements. They are trying to compensate for the loss of value to their (mortgage-backed) assets by increasing their reserves. At the same time, the system is clogged with trillions of dollars of bad paper which has brought lending to a halt. The huge injections of liquidity from the Fed have done nothing to improve lending or lower interbank rates. It's been a flop. The market is driving interest rates now. If the situation persists, the stock market will crash.

Staring Into the Abyss

One of Britain's leading economists, Peter Spencer, issued a warning on Saturday:

The Government must suspend a set of key banking regulations at the heart of the current financial crisis or risk seeing the economy spiral towards a future that could make 1929 look like a walk in the park.

Spencer is right. The banks don't have the money to loan to businesses or consumers because they're trying to raise more cash to meet their capital requirements on assets that continue to be downgraded. (The Fed may pay $.85 on the dollar, but investors are unwilling to pay anything at all.)Spencer correctly assumes that the reason the banks have stopped lending is not because they "distrust" other banks, but because they are capital-strapped from all their "off balance" sheets shenanigans. If the Basel regulations aren't modified, money markets will remain frozen, GDP will shrink, and there'll be a wave of bank closings.

Spencer said:

The Bank is staring into the abyss. The Financial Services Authority must go round and check that all banks are solvent, and then it should cut the Basel capital requirement level from 8pc to about 6pc. ("Call to Relax Basel Banking Rules, UK Telegraph)

Spencer confirms what we already knew; the banks are seriously under-capitalized and will come under growing pressure as hundreds of billions of dollars of mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) continue to lose value and have to be propped up with additional capital. The banks simply don't have the resources and there's going to be a day of reckoning.

Pimco's Bill Gross put it like this: "What we are witnessing is essentially the breakdown of our modern day banking system." Gross is right, but he only covers a small portion of the problem.

The economist Ludwig von Mises is more succinct in his analysis:

There is no means of avoiding the final collapse of a boom brought on by credit expansion. The question is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

The basic problem originated with the Federal Reserve when former Fed chief Alan Greenspan lowered interest rates below the rate of inflation for 31 months straight which pumped trillions of dollars of low interest credit into the financial system and ignited a speculative frenzy in real estate. Greenspan has spent a great deal of time lately trying to avoid any blame for the catastrophe he created. He is a first-rate "buck passer". In Wednesday's Wall Street Journal, Greenspan scribbled out a 1,500-word defense of his actions as head of the Federal Reserve, pointing the finger at everything from China's "low cost workforce" to "the fall of the Berlin Wall". The essay was typical Greenspan gibberish. In his trademark opaque language; Greenspan tiptoes through the well-documented facts of his tenure as Fed chief to absolve himself of any personal responsibility for the ensuing disaster.

Greenspan's apologia is a masterpiece of circuitous logic, deliberate evasion and utter denial of reality. He says:

I do not doubt that a low U.S. federal-funds rate in response to the dot-com crash, and especially the 1 per cent rate set in mid-2003 to counter potential deflation, lowered interest rates on adjustable-rate mortgages (ARMs) and may have contributed to the rise in U.S. home prices. In my judgment, however, the impact on demand for homes financed with ARMs was not major.

"Not major"? 3.5 million potential foreclosures, 11-month inventory backlog, plummeting home prices, an entire industry in terminal distress pulling down the global economy is not major?

But Greenspan is partially correct. The troubles in housing cannot be entirely attributed to the Fed's "cheap credit" monetary policies. They were also nursed along by a Doctrine of Deregulation which has permeated US capital markets since the Reagan era. Greenspan's views on how markets should function were -- to great extent -- shaped by this non-interventionist/non-supervisory ideology which has created enormous equity bubbles and imbalances. The former-Fed chief's support for adjustable-rate mortgages (ARMs) and subprime lending shows that Greenspan thought of himself as more as a cheerleader for the big market-players than an impartial referee whose job was to monitor reckless or unethical behavior.

Greenspan also adds this revealing bit of information in his article:

The value of equities traded on the world's major stock exchanges has risen to more than $50 trillion, double what it was in 2002. Sharply rising home prices erupted into major housing bubbles world-wide, Japan and Germany (for differing reasons) being the only principal exceptions." ("The Roots of the Mortgage Crisis", Alan Greenspan, Wall Street Journal)

This admission proves Greenspan's culpability. If he knew that stock prices had doubled their value in just 3 years, then he also knew that equities had not risen due to increases in productivity or demand.(market forces) The only reasonable explanation for the asset inflation, therefore, was monetary policy. As his own mentor, Milton Friedman famously stated, "Inflation is always and everywhere a monetary phenomenon". Any capable economist would have known that the explosion in housing and equities prices was a sign of uneven inflation. Now that the bubble has popped, inflation is spreading like mad through the entire economy.

Greenspan is a very sharp man. It is crazy to think he didn't know what was going on. This is basic economic theory. Of course he knew why stocks and housing prices were skyrocketing. He was the one who put the dominoes in motion with the help of his printing press.

But Greenspan's low interest credit is only part of the equation. The other part has to do with way that the markets have been transformed by "structured finance".

What's so destructive about structured finance is that it allows the banks to create credit "out of thin air", stripping the Fed of its role as controller of the money supply. David Roache explains how this works in an excerpt from his book "New Monetarism" which appeared in the Wall Street Journal:

The reason for the exponential growth in credit, but not in broad money, was simply that banks didn't keep their loans on their books any more-and only loans on bank balance sheets get counted as money. Now, as soon as banks made a loan, they "securitized" it and moved it off their balance sheet.

There were two ways of doing this. One was to sell the securitized loan as a bond. The other was "synthetic" securitization: for example, using derivatives to get rid of the default risk (with credit default swaps) and lock in the interest rate due on the loan (with interest-rate swaps). Both forms of securitization meant that the lending bank was free to make new loans without using up any of its lending capacity once its existing loans had been "securitized."

So, to redefine liquidity under what I call New Monetarism, one must add, to the traditional definition of broad money, all the credit being created and moved off banks' balance sheets and onto the balance sheets of nonbank financial intermediaries. This new form of liquidity changed the very nature of the credit beast. What now determined credit growth was risk appetite: the readiness of companies and individuals to run their businesses with higher levels of debt. (Wall Street Journal)

The banks have been creating trillions of dollars of credit (by originating mortgage-backed securities, collateralized debt obligations and asset-backed commercial paper) without maintaining the proportional capital reserves to back them up. That explains why the banks were so eager to provide mortgages to millions of loan applicants who had no documentation, no income, no collateral and a bad credit history. They believed there was no risk, because they were making enormous profits without tying up any of their capital. It was, quite literally, money for nothing.

Now, unfortunately, the mechanism for generating new loans (and fees) has broken down. The main sources of bank revenue have either been seriously curtailed or dried up entirely. (Mortgage-backed) Commercial paper (ABCP) one such source of revenue, has decreased by a full-third (or $400 billion) in just 17 weeks. Also, the securitization of mortgage-backed securities is DOA. The market for MBSs and CDOs and other complex bonds has followed the Pterodactyl into the history books. The same is true of structured investment vehicles (SIVs) and other "off balance-sheet" swindles which have either gone under entirely or are presently withering with every savage downgrade in mortgage-backed bonds. The mighty juggernaut that was grinding out the hefty profits ("structured investments") has suddenly reversed and is crushing everything in its path.

The banks don't have the reserves to cover their downgraded assets and the Federal Reserve cannot simply "monetize" their bad bets. There's no way out. There are bound to be bankruptcies and bank runs. "Structured finance" has usurped the Fed's authority to create new credit and handed it over to the banks.

Now everyone will pay the price.

Investors have lost their appetite for risk and are steering clear of anything connected to real estate or mortgage-backed bonds. That means that an estimated $3 trillion of securitized debt (CDOs, MBSs and ASCP) will come crashing to earth delivering a violent blow to the economy.
It's not just the banks that will take a beating. As Professor Nouriel Roubini points out, the broker dealers, the investment banks, money market funds, hedge funds and mortgage lenders are in the crosshairs as well.

Non-bank institutions do not have direct access to the Fed and other central banks liquidity support and they are now at risk of a liquidity run as their liabilities are short term while many of their assets are longer term and illiquid; so the risk of something equivalent to a bank run for non-bank financial institutions is now rising. And there is no chance that depository institutions will re-lend to these to these non-banks the funds borrowed by central banks as these banks have severe liquidity problems themselves and they do not trust their non-bank counterparties. So now monetary policy is totally impotent in dealing with the liquidity problems and the risks of runs on liquid liabilities of a large fraction of the financial system. (Nouriel Roubini's Global EconoMonitor)

As the downgrades on CDOs and MBSs continue to accelerate, there'll likely be a frantic "flight to cash" by investors, just like the recent surge into US Treasuries. This could well be followed by a series of spectacular bank and non-bank defaults. The trillions of dollars of "virtual capital" that were miraculously created through securitzation when the market was buoyed-along by optimism will vanish in a flash when the market is driven by fear. In fact, the equity bubble has already been punctured and the process is well underway.
http://tinyurl.com/2g452g

Bethlehem kicks off Christmas
15/12/2007 22:41 - (SA)

Bethlehem, West Bank - Palestinians lit a four-storey Christmas tree in this biblical town on Saturday, kicking off a holiday season that officials say will bring the most pilgrims in seven years in light of the recent resumption of Israeli-Palestinian peace talks.

Residents of the West Bank town of 307 000 and foreign tourists alike strolled streets Saturday under lights shaped like bells and Santa Claus.

Christians count for only a small percentage of Israelis and Palestinians in the Holy Land, including Bethlehem, but the town believed to be the birthplace of Jesus is one of the few places that Christmas is felt.

"We see encouraging signs with more tourists here," said Hanna Tofian, a university professor, as he emerged from prayers at the Church of the Nativity to a square crowded with tour buses. "It is because of the diplomatic atmosphere and because there is movement in talks with Israel."

Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert agreed in a US-hosted conference last month to renew peace talks. The reconciliation came after Abbas kicked the Islamic Hamas movement out of the government following its violent takeover of the Gaza Strip in June, and installed a moderate administration of his own.

Tourism is integral to efforts to bolster the Palestinian economy, which is tattered from fighting with Israel that broke out in 2000. Mideast envoy Tony Blair visited Bethlehem this month and spent the night in what he said was meant to be a signal to the world that it is safe to visit the town.

Four-fold increase in two years

This season, around 65 000 tourists are expected to visit the traditional site of Jesus's birth, Mayor Victor Batarseh said this month. That's four times the number of visitors who came in Christmas 2005, when only 16 000 tourists trickled into the town.

Israeli and Palestinian forces have cooperated to facilitate the passage of pilgrims from Jerusalem through an Israeli army checkpoint into Bethlehem, said Ahmed al-Haddar, the area's Palestinian security chief. About 1 500 Palestinian police will be deployed during the festivities, he said.

An aide to Abbas, Rafik Husseini, flicked the switch to light the pine tree that was decorated with red and gold balls. Dozens of onlookers cheered and a band of bagpipes played Christmas carols.
http://tinyurl.com/38qhz5

CHINA: Large Reserve of Organs from Living People - ORGAN TOURISM

Jilin Prison Uses 'Death Beds' to Torture Falun Gong Practitioners
By Shen Zhou
The Epoch Times
Dec 17, 2007

The death bed, a torture method originating from Jilin Prison, is frequently used to torture imprisoned Falun Gong practitioners at the Jilin Prison and Jilin Province Women's Prison, also known as Heizuizi Women's Prison, in Changchun City. Similar to the ancient, cruel punishment of being drawn and quartered, many Falun Gong practitioners have been tortured to death this way.



According to a Clearwisdom.net report on December 11, 2007, the death bed involves piecing together two twin-size beds and handcuffing or tying a practitioner's hands and feet onto the four opposite corners of the two beds. After the practitioner is tied up, the beds are moved in opposite directions and bricks are inserted between the two beds. Each brick adds severe pain and injury.

Once tied to the death bed, the victim is unable to move her hands and legs. The beds can be pulled in various directions to cause additional pain and injury throughout the body. Blood circulation from the ankles and wrists are cut off as the muscles tear and bones break. Some practitioners were tortured to the point of dementia while others left handicapped.

Death Beds to Torture Male Falun Gong Practitioners at Jilin Prison

In October 2003, Jilin Prison set up over 10 small dark rooms for solitary confinement, which are referred to as psychological "therapy" centers to outsiders. Each room is equipped with a fixing bed used as a torture device. After the practitioner is tied into position, others torture him with various methods that include, but are not limited to stabbing with needles, burning with hot water, depriving of sleep, kicking, beating, and stepping on the practitioner.

To exacerbate the pain, quilts, water bottles, wooden boards, or other objects are forced between the practitioner's back and the bed, so the body becomes suspended. The arms and legs are stretched even more tightly, leading to torn wrists and ankles. With the back arched and head bent back, breathing is extremely difficult and and the victim turn pale due to lack of oxygen.

Falun Gong practitioners have been fixed to the bed by the police anywhere from ten days to two months. Their bodies were devastated and emaciated. Their muscles atrophied and their limbs lost strength. They need the support of a wall in order to walk. The cold of winter intensifies the injuries to their hands and feet.

Many male practitioners have been left disabled, and at least 10 male Falun Gong practitioners were tortured to death in Jilin Prison, including Liu Chengjun, Zhang Jianhua, Cui Weidong, Wei Xiushan, He Yuanhui, Hao Yingqiang, Lei Ming, Sun Changde, Wang Qibo and Cao Hongyan.

Death Beds in Jilin Province Women's Prison

Female Falun Gong practitioners in Jilin Province Women's Prison are not spared from the same torture. After limbs are secured to four bed corners, the bed board is removed, and only an iron pole half an inch in diameter supports the lower back. The rest of the body is left dangling in the air, and heavy objects are added on the practitioner's legs. The practitioners are tied this way and prohibited from using the toilet around the clock until they are "transformed".

The tortured person is left feeling neither dead nor alive. Falun Gong practitioners who refuse to give up their beliefs have all been tortured with the death bed at least once. Some can't even count how many times they've been put on the death bed.

Ms. Song Yanqun of Shulan City, Jilin Province, is an English teacher at Dade Japanese School in Haerbing. She was sentenced to 12 years in prison for refusing to give up the practice of Falun Dafa. After Ms. Song was tortured on the death bed by the guards at Jilin Province Women's Prison in May 2005, her left leg became cold and numb. Her entire right arm constantly trembles from pain, and she can no longer write.

At least seven female Falun Gong practitioners have been tortured to death in Jilin Women's Prison. They are Yu Lixin, Deng Shiying, Wang Qiuyong, Yang Guiqing, Yang Guijun, Han Chunyuan, and Jiang Chunxian. Those who were tortured to the point of mental breakdown include Yang Mingfang, Ban Huijuan, Wang Guohua, He Shurong and several others. The actual number of deaths and severity of torture is estimated to be much worse as the flow of information is tightly blocked by the prison.

There are still more than a hundred Falun Gong practitioners being detained in Jilin Province Women's Prison. Practitioners who refuse to "transform" are persecuted separately by the prison guards. They are monitored and deprived from sleeping by the other prisoners and tortured on the death bed.
http://tinyurl.com/3ywaal

Bush to visit Israel, West Bank on 9-day trip
President following up Annapolis peace conference with Mideast tour
Dec. 18, 2007



WASHINGTON - President Bush, trying to nurture fragile peace talks between Israelis and Palestinians, will make his first trip to Israel and the West Bank next month as part of a nine-day swing through the Middle East.

Bush also will visit Kuwait, Bahrain, the United Arab Emirates, Saudi Arabia and Egypt. He will leave Washington on Jan. 8 and return on Jan. 16. Egypt is the only country on the itinerary that Bush has visited before.

While Middle East peacemaking has been on the back burner during most of Bush's presidency, his administration hosted a high-stakes conference last month in Annapolis, Md., to encourage talks between Israel and the Palestinians on an independent Palestinian homeland. He left energized about helping the Palestinians and Israelis find a way to live peacefully as neighbors and writing a chapter for himself in the book of Middle East diplomacy.

Asked whether Bush will engage in detailed negotiating during his tour, White House press secretary Dana Perino said: "I do not anticipate — although we can let you know as we get closer — whether there will be detailed discussions about concessions."

She said Bush wants the leaders to keep their eye on finding a way to achieve a long-term, sustainable peace.

Perino said Bush currently is scheduled to have bilateral sessions, not a three-way meeting, with Israeli and Palestinian leaders. She said Bush's role will be to pull the Israeli and Palestinian leaders together, "just like he did in Annapolis."

Israel, Palestinians OK peace path

The White House said the trip also will be an opportunity to reaffirm the United States' commitment to the security of allies in the Middle East, especially with Gulf nations, and work with them to combat terrorism and extremism.

In Jerusalem, Bush will meet with President Shimon Peres and Prime Minister Ehud Olmert, and in the West Bank he will meet with President Mahmoud Abbas and Prime Minister Salam Fayyad. The president will then travel to Kuwait, Bahrain, the United Arab Emirates, Saudi Arabia and Egypt.

Bush: U.S. can step up its role
Bush says these conditions in Israel and the Palestinian territories now are ripe for a more aggressive U.S. role: Abbas and Olmert agreed at their U.S.-sponsored meeting in Annapolis, Md., to renew peace talks, a unifying fight is under way against extremism fed by the Palestinian conflict, and the world understands the urgency of acting now.

Negotiating teams held their first session in the region on Dec. 12, but achieving a peace agreement is far from a reality. Fundamental differences have led to the collapse of previous peace efforts: the borders of a Palestinian state, the status of Jerusalem and the rights of Palestinian refugees and their descendants.

The Islamic militant group Hamas seized the Gaza Strip in elections in June, splitting the Palestinian territory into two territories: Gaza, run by Hamas, and the West Bank, controlled by Abbas and his Fatah movement. This has complicated U.S. interaction with the Palestinians, because the United States and Israel regard Hamas as a terror group and refuse to deal with it.

Since Hamas wrested control from Abbas' Fatah forces, Gaza's 1.5 million residents have been virtually cut off from the world. Unemployment has risen to about 50 percent, forcing poverty up to 75 percent.

In a boost to the Palestinian government, the world on Monday pledged $7.4 billion in aid during the next three years to support Abbas' government. Abbas used the donors' conference in Paris to urge Israel to remove roadblocks quickly, stop building its separation barrier in the West Bank and freeze settlement expansion "without exceptions."

The first round of peace talks had been overshadowed by Israel's decision to expand a Jewish neighborhood, built on war-won land on the outskirts of Jerusalem. That meant the United States scaled back previous aid plans for fear of inadvertently funding Hamas.
http://tinyurl.com/36gs2m

Mystery Mandarin expert is one of a kind
Posted: Tuesday, December 18, 2007 9:46 AM
Filed Under: Beijing, China

By Adrienne Mong, NBC News Producer

EPOCH CITY, Xianghe, China –

Let’s be frank. Covering the prepared remarks of senior officials on the closing day of trade talks isn’t exactly the most scintillating of assignments.

So as China’s top trade negotiator Vice Premier Wu Yi and U.S. Secretary of Treasury Henry Paulson read their statements to a room full of Chinese and western journalists at the end of the China-U.S. Strategic Economic Dialogue, I amused myself by comparing the original comments to the translations that followed.

The English translation of Wu’s Chinese-language speech was more or less on the mark. But as I jotted notes down in my pad, listening to the Chinese translation of Paulson’s remarks, the inflection of a phrase caught my ear and I glanced up to take a look at the interpreter.

Somewhat to my surprise, it was a westerner who was translating Paulson’s speech into fluent Mandarin.

I racked my brain, trying to remember whether I’d ever seen a Caucasian interpret Mandarin at a high-level Chinese diplomatic function.

Now I’m not suggesting fluent Mandarin-speaking westerners are rare. Far from it, I’m repeatedly shamed by all the non-Chinese around me whose Mandarin is so good they can mimic regional accents. But normally interpreters at high-level official events are ethnic Chinese.

Mandarin, after all, is a tough language to master. For one, it’s tonal, not phonetic. (Mandarin – considered China’s national language – has four tones. So each character has four ways to pronounce it and thus at least four different meanings. The popular southern dialect, Cantonese, has nine tones!)

It’s character-based, using ideographs instead of an alphabet. (To be able to read a newspaper you need a command of at least 3,000-4,000 characters.) And the grammar, which appears deceptively simple at first, can actually be quite tricky.

The mystery interpreter
My curiosity piqued, I wondered who the fellow was? Where did he learn his Mandarin? Did he think in Chinese? Was he a part of Paulson’s staff? (Wow, I thought, Paulson really does want to build trust with the Chinese and clarify perceptions and increase understanding.) What did the Chinese officials think of him and his language skills? Was he used to getting, well, the kind of reaction I was having to seeing him translate?

A few days later, after a round robin of e-mails to the U.S. Embassy in Beijing and several State Department bureaus in Washington, I was nowhere closer to answering any of those questions. But I did learn a few things.

The interpreter’s name is Jim Brown.

Apparently Jim is quite shy.

And apparently there aren’t many like him.

There are three levels of expertise for translators, Brenda Sprague, the Director of the Office of Language Services for the Department of State, patiently explained to me over the phone in the early hours of my morning. (The Office of Language Services and its staff, said Sprague, "support the President, the White House, the State Dept, and provide assistance to rest of federal government – just the very highest level of work.")

The first level of skill is "simple consecutive" translation. "Although it’s not that simple," explained Sprague. Interpreters have to be able to translate on the spot after each remark or statement.

The second level of expertise is "simultaneous seminar-level," which, as its name suggests, is simultaneous translation in a less formal environment like lower level meetings or training courses. "And in theory, you can stop to catch up or take notes," said Sprague.

And the third level is "full-blown consecutive" translation, in which interpreters can work in both simple consecutive and simultaneous translation, but at very senior-level meetings or diplomatic functions.

‘Only one Jim’
So presuming Jim Brown falls into the third category, I asked, are there many more like him?

"In Jim’s category, there’s only Jim," replied Sprague.

Is someone like Jim – a white guy speaking fluent Mandarin – rare in her experience?

"I can only think of two or three like Jim," said Sprague. "Most people [who interpret or translate Chinese] are ethnically Chinese or heritage speakers, immigrants who moved to the United States and became bilingual."

Sprague noted that even heritage or naturally bilingual speakers have to train rigorously to become top-tier interpreters. "You rarely find an interpreter who’s any good who’s under 30," she added. (With graying hair and distinguished professorial mien, Jim looked over 30.)

"We have very tough tests and follow strict guidelines for interpreters," continued Sprague. "There aren’t very many of them. Probably 40 staff interpreters at conference-level in all the nine languages we train."

That’s not a very high number, considering that the State Department has a stable of 1,500-1,800 translators and interpreters (both staff and contractors, for written and spoken languages).

Most of these are based in Washington, D.C., but a handful are stationed in Beijing, Moscow, and Tokyo – representing the volume of work and the importance of those countries to the United States, according to Sprague.

So there’s hope. Maybe one day I will run into Jim Brown here and finally get some answers to my questions…in English.
http://tinyurl.com/22gfhp

Got a problem? Blame global warming!
Thursday 2 November 2006
From allergies to maple syrup shortages to yellow fever: apparently every contemporary ill is caused by climate change.
John Brignell

‘It’s all them atom bombs what’s doing it.’ That is what the old dears used to say in the event of unusual weather when I was growing up in the back streets of Tottenham in north London. There is something deep in the human psyche that requires a cause to be identified for every effect. Presumably this has an evolutionary advantage: man the toolmaker was able to turn abstract concepts, such as consequence and purpose, to his benefit.

Mind you, even in those far off innocent days they did not fly into a panic, as now, over a mild October. They just enjoyed it. They even had a term for it – Indian Summer. What a fine example of ratchet reporting we have seen in recent weeks, with almost every British newspaper showing horror pictures of… late flowering gardens. Yet they studiously ignored the fact that this has been the year without a spring, when the tree blossom was a month late (see these pictures from my website, Numberwatch, as illustration).

That instinct has been a gift for the shamans of each age, ours no less than those that went before. Now carbon, the very stuff of life, has been cast in the role of original sin and its dioxide, absolutely essential to the existence of life on earth, condemned as a pollutant. Just as deviation from the strictures of the gods resulted in calamities such as floods and earthquakes in the past, so our new godless religion decrees that every disaster and minor discomfort arises from our engagement in industry, progress and the pursuit of well-being.

When I began to compile the complete list of things caused by global warming (see below), I was only too aware of the facile dismissal that was casually levelled at my complete list of things that give you cancer: ‘He made it all up!’ So, I only included things for which I could provide a link. That list of over three hundred items is still growing daily, thanks to the efforts of number watchers around the world, and contains some remarkable and delightfully contradictory examples. A new raft of entries has now come in from the Stern Report. These include notably an increase in gender inequalities with men migrating and women subject to impoverishment, forced marriage, labour exploitation, trafficking and natural disasters. You could not make that up – it is beyond satire.

What is not a cause for jocularity is the evidence that all this provides for putrefaction in the groves of academe: for most of these excesses emanate from university departments, and are by people rejoicing in the debased title of professor. Not only does it illustrate the pathetic race to grovel before the priesthood of political correctness, who have seized control of research funding all over the world, it also reveals a loss of that sense of proportion that was once the backbone of experimental science.

The telling phrase ‘lost in the noise’ has simply got lost in the noise. Only a quarter of a century ago, if anyone had claimed that a temperature change of 0.6 degrees Celsius would cause such a drastic change in precipitation that it would in turn trigger earthquakes, it would have been met with universal howls of derision. Now it is just par for the course and any derision would be censored by editors of newspapers and even, heaven help us, scientific journals.

What is it about humanity that provokes this addiction to scaremongering? In the seventies, when the scare was global cooling, there was still a residue of that scepticism that was the legacy of British philosophers. From the Bacons, through the likes of Locke, Hume and Russell, to the magnificent climax of Popper’s statement of the principle of falsifiability, the scientific method was painfully established, only to be abandoned in a few short decades. The method was essentially sceptical, as Thomas Huxley put it:

The improver of natural knowledge absolutely refuses to acknowledge authority, as such. For him, scepticism is the highest of duties; blind faith the one unpardonable sin.

All gone, alas!

John Brignell is author of Numberwatch.

A complete list of things caused by global warming:

(Each list item is linked to a news story. However, this list has been compiled over a period of time, so some links may no longer work.)

Agricultural land increase, Africa devastated, African aid threatened, air pressure changes, Alaska reshaped, allergies increase, Alps melting, Amazon a desert, American dream end, amphibians breeding earlier (or not), ancient forests dramatically changed, Antarctic grass flourishes, anxiety, algal blooms, Arctic bogs melt, Asthma, atmospheric defiance, atmospheric circulation modified, avalanches reduced, avalanches increased, bananas destroyed, bananas grow, bet for $10,000, better beer, big melt faster, billion dollar research projects, billions of deaths, bird distributions change, birds return early, blackbirds stop singing, blizzards, blue mussels return, boredom, Britain Siberian, British gardens change, bubonic plague, budget increases, building season extension, bushfires, business opportunities, business risks, butterflies move north, cardiac arrest, caterpillar biomass shift, challenges and opportunities, Cholera, civil unrest, cloud increase, cloud stripping, cod go south, cold climate creatures survive, cold spells (Australia), computer models, conferences, coral bleaching, coral reefs dying, coral reefs grow, coral reefs shrink , cold spells, cost of trillions, crumbling roads, buildings and sewage systems, cyclones (Australia), damages equivalent to $200 billion, Dengue hemorrhagic fever, dermatitis, desert advance, desert life threatened, desert retreat, destruction of the environment, diarrhoea, disappearance of coastal cities, diseases move north, Dolomites collapse, drought, drowning people, ducks and geese decline, dust bowl in the corn belt, early spring, earlier pollen season, Earth biodiversity crisis, Earth dying, Earth even hotter, Earth light dimming, Earth lopsided, Earth melting, Earth morbid fever, Earth on fast track, Earth past point of no return, Earth slowing down, Earth spinning out of control, Earth to explode, earth upside down, Earth wobbling, earthquakes, El Niño intensification, erosion, emerging infections, encephalitis, Europe simultaneously baking and freezing, evolution accelerating, expansion of university climate groups, extinctions (human, civilisation, logic, Inuit, smallest butterfly, cod, ladybirds, bats, pandas, pikas, polar bears, pigmy possums, gorillas, koalas, walrus, whales, frogs, toads, turtles, orang-utan, elephants, tigers, plants, salmon, trout, wild flowers, woodlice, penguins, a million species, half of all animal and plant species, less, not polar bears), experts muzzled, extreme changes to California, famine, farmers go under, figurehead sacked, fish catches drop, fish catches rise, fish stocks decline, five million illnesses, floods, Florida economic decline, food poisoning, food prices rise, food security threat (SA), footpath erosion, forest decline, forest expansion, frosts, fungi invasion, Garden of Eden wilts, genetic diversity decline, gene pools slashed, glacial retreat, glacial growth, glacier wrapped, global cooling, global dimming, glowing clouds, Gore omnipresence, grandstanding, grasslands wetter, Great Barrier Reef 95% dead, Great Lakes drop, greening of the North, Gulf Stream failure, habitat loss, Hantavirus pulmonary syndrome, harvest increase, harvest shrinkage, hay fever epidemic, hazardous waste sites breached, heat waves, hibernation ends too soon, hibernation ends too late, high court debates, human fertility reduced, human health improvement, human health risk, hurricanes, hydropower problems, hyperthermia deaths, ice sheet growth, ice sheet shrinkage, inclement weather, infrastructure failure (Canada), Inuit displacement, Inuit poisoned, Inuit suing, industry threatened, infectious diseases, insurance premium rises, invasion of midges, island disappears, islands sinking, itchier poison ivy, jellyfish explosion, Kew Gardens taxed, krill decline, lake and stream productivity decline, landslides, landslides of ice at 140 mph, lawsuits increase, lawsuit successful, lawyers’ income increased (surprise, surprise!), lightning related insurance claims, little response in the atmosphere, Lyme disease, Malaria, malnutrition, Maple syrup shortage, marine diseases, marine food chain decimated, marine dead zone, Meaching (end of the world), megacryometeors, Melanoma, methane emissions from plants, methane burps, melting permafrost, Middle Kingdom convulses, migration, migration difficult (birds), microbes to decompose soil carbon more rapidly, more bad air days, more research needed, mountain (Everest) shrinking, mountains break up, mountains taller, mudslides, next ice age, Nile delta damaged, no effect in India, nuclear plants bloom, oaks move north, ocean acidification, outdoor hockey threatened, oyster diseases, ozone loss, ozone repair slowed, ozone rise, Pacific dead zone, personal carbon rationing, pest outbreaks, pests increase, phenology shifts, plankton blooms, plankton destabilised, plankton loss, plant viruses, plants march north, polar bears aggressive, polar bears cannibalistic, polar bears drowning, polar bears starve, polar tours scrapped, psychosocial disturbances, railroad tracks deformed, rainfall increase, rainfall reduction, refugees, reindeer larger, release of ancient frozen viruses, resorts disappear, rice yields crash, rift on Capitol Hill, rioting and nuclear war, rivers raised, rivers dry up, rockfalls, rocky peaks crack apart, roof of the world a desert, Ross river disease, salinity reduction, salinity increase, Salmonella, salmon stronger, sea level rise, sea level rise faster, sex change, sharks booming, shrinking ponds, ski resorts threatened, slow death, smog, snowfall increase, snowfall reduction, societal collapse, songbirds change eating habits, sour grapes, spiders invade Scotland, squid population explosion, squirrels reproduce earlier, spectacular orchids, stormwater drains stressed, taxes, tectonic plate movement, terrorism, ticks move northward (Sweden), tides rise, tourism increase, trade winds weakened, tree beetle attacks, tree foliage increase (UK), tree growth slowed, trees could return to Antarctic, trees less colourful, trees more colourful, tropics expansion, tropopause raised, tsunamis, turtles lay earlier, UK Katrina, Venice flooded, volcanic eruptions, walrus pups orphaned, war, wars over water, water bills double, water supply unreliability, water scarcity (20% of increase), water stress, weather out of its mind, weather patterns awry, weeds, Western aid cancelled out, West Nile fever, whales move north, wheat yields crushed in Australia, white Christmas dream ends, wildfires, wind shift, wind reduced, wine - harm to Australian industry, wine industry damage (California), wine industry disaster (US), wine - more English, wine -German boon, wine - no more French , winters in Britain colder, wolves eat more moose, wolves eat less, workers laid off, World bankruptcy, World in crisis, Yellow fever.
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