Roubini predicts eurozone collapse; world markets will follow

Noted American economist Nouriel Roubini says the eurozone is in the midst of crumbling, and with the rest of the world’s future at stake with a potential collapse, they might want to listen up — Roubini has been right before.

Speaking privately at a get-together this week at his apartment, those in attendance have since leaked that Roubini, who manages the Roubini Global Economics firm, has low-expectations for resurgence in the eurozone. According to the economist, a collapse is imminent as the economy overseas gets more chaotic.

There is a “significant risk of a Eurozone breakup,” sources say Roubini told a handful of select party guests recently, reports the Business Insider. Adds the economist, if the Eurozone goes under, “everything around the world goes sour.”

Roubini has claimed that in the past he correctly predicted both the housing market crash and the worldwide recession, the aftermath of both is still evident in the crises across the globe. For his forecasting, Roubini has earned the title “Dr. Doom” from members of the media, who look to him for economic outlook and have been met with not-so-optimistic — and correct — assumptions from the analyst in the past. As the American economy continues to show slumping statistics and the unemployment rate stays at or above a stagnant 9 percent for months, a collapse across the pond could cause a catastrophe for the world economy.

Sources say Roubini announced, "If the Eurozone blows up, it all gets worse."

Less than two weeks ago, Roubini had predicted that the odds of a eurozone collapse were one-in-two.

“Unfortunately, in my view there is a risk, at least a 50 percent probability, that in the U.S., in the eurozone, in the United Kingdom, and in most advanced economies, the future in the next 12 months might suggest a recession, a downturn, rather than reacceleration of growth,” Roubini said on October 24 to Bloomberg.

According to The Jakarta Post, that same day Roubini hypothesized dire conditions for the Chinese economy, noting that most of their gross domestic product is made through exports. Beijing and Washington have been at odds in recent weeks about a tariff that could raise the price of Chinese goods coming into the States and could cause economic woes for both nations.

This week, the Business Insider reports that Roubini remains pessimistic about the future of China and says a build-up of non-performing loans at the banks and a large governmental debt will cause major problem in 2013, if not sooner.

Biggest jump ever seen in global warming gases

http://news.yahoo.com/biggest-jump-ever-seen-global-warming-gases-183955211.html

Israel- increased planning for War with Iran

Just as the United States is preparing to further unwind itself from its military entanglements in the wider Middle East--departing Iraq and transferring lead security responsibilities to Afghans by 2014--a new round of tension appears to be surfacing between Iran and Israel that could force the U.S. military back in.

Reports in the Israeli press indicate that Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak are working to convince other members of Netanyahu's cabinet and Israeli security chiefs that Israel needs to launch a pre-emptive strike on Iran's nuclear program.

Netanyahu and Barak "are trying to muster a majority in the cabinet in favor of military action against Iran, a senior Israeli official has said," Israeli newspaper Haaretz reported Wednesday in a piece co-bylined by four reporters.  The two officials "recently persuaded Foreign Minister Avigdor Lieberman, who previously objected to attacking Iran, to support such a move," according to the Ha'aretz acount, which has garnered an unusual degree of attention from western policymakers.

The Ha'aretz report followed a piece late last week by Israel's leading columnist, Nahum Barnea, on the front page of Israel's largest circulation daily Yediot Ahronoth, titled "Atomic Pressure." It begins: "Have the prime minister and defense minister settled on a decision, just between the two of them, to launch a military attack on the nuclear facilities in Iran?" The piece then continues:

This question preoccupies many people in the defense establishment and high circles of government. It distresses foreign governments, which find it difficult to understand what is happening here: One the one hand, there are mounting rumors of an Israeli move that will change the face of the Middle East and possibly seal Israel's fate for generations to come; on the other hand, there is a total absence of any public debate. The issue of whether to attack Iran is at the bottom of the Israeli discourse.

In the bigger picture, the prospect that Israel might decide to carry out unilateral military action against Iran is not new. Israel has long harbored grave concerns about Iran's developing nuclear capacity--and Netanyahu has joined several preceding Israeli leaders in seeking to rally global opinion behind efforts to thwart Iran's nuclear ambitions. What's striking, however, is that American diplomacy hands are paying exceptionally close attention to these latest reports. 

Washington Middle East analysts note, among other things, that the timing of the reports is significant: Israel has lately found itself isolated in regional diplomatic debates in the wake of the so-called Arab Spring uprisings. What's more, these U.S. experts say, the fact that anxiety over Iran's nuclear ambitions has spread well beyond Israel proper to rival Arab states such as Saudi Arabia has become far more apparent in recent months. And diplomacy watchers in the States also note that the recent Israeli media reports appear to be sourced to members of the Israeli security establishment who apparently oppose such unilateral Israeli action against Iran--in large part on the grounds that such action would blindside Washington.

From Israel's perspective, it may feel "it has little to lose" from carrying out strikes on Iran, in terms of its regional standing, Marc Lynch, a Middle East expert at George Washington University, told Yahoo News Wednesday. "It sees its strategic position [amid the Arab awakening] as deteriorating. There is no peace process."

But Lynch also noted the sense within the Israel press that "Israel might do it" may have another purpose: to push U.S. President Barack Obama to implement tougher sanctions and pressure on Iran--or else.

"I still don't see [an Israeli attack on Iran] as a high probability," Lynch said. "My sense of this is [Israeli leaders may] see this as an opportunity to once again ramp up pressure and containment and sanctions on Iran. I have no sense the United States is ramping up for war. But communications between the U.S. and Israel is not all that it could be. How much of this is gamesmanship to force the U.S. to do tougher sanctions, [and how much of this is] there's a window of opportunity to have a serious discussion they might take a shot."

The media reports also come as the UN atomic watchdog agency, the International Atomic Energy Agency (IAEA), is due to issue a report on Iran's nuclear program Nov. 8.

"The [IAEA] report will almost certainly raise tensions in a region made volatile by this year's Arab revolutions and the turmoil in Syria," the Guardian's diplomatic editor Julian Borger wroteWednesday. "In the absence of a tough new UN security council resolution, the US will face the dilemma of acting militarily without an international mandate, or risk missing Iran's window of vulnerability to attack."

"Britain's armed forces are stepping up their contingency planning for potential military action againstIran amid mounting concern about Tehran's nuclear enrichment programme, the Guardian has learned," a separate Guardian report Wednesday said. The UK Defense Ministry "believes the US may decide to fast-forward plans for targeted missile strikes at some key Iranian facilities. British officials say that if Washington presses ahead it will seek, and receive, UK military help for any mission, despite some deep reservations within the coalition government."

All of these trends are sobering, given an increasingly war-weary climate in the United States. American citizens have lately been looking for the enormous commitment of resources that the United States has undertaken in the past decade of warmaking in the Middle East to be channeled into domestic improvements to the stalled-out U.S. economy--nation-building at home, as Obama recently put it.

Meantime, it's not as though relations between the United States and Iran are exactly placid. The State Department said Tuesday it had received a seven-page "rant" of a letter from Iranian authorities rejecting recent American allegations that members of Iran's elite Revolutionary Guards Corps-Qods Force had conspired in an assassination plot against the Saudi envoy to Washington. Iran state media suggested the Iranian letter was in response to a letter from Obama to Tehran authorities laying out the accusations but also offering the prospect of future U.S.-Iranian dialogue.

American officials also indicated this week that it is with an eye to containing Iran that Washington plans to boost the U.S. troop presence in the Persian Gulf as it withdraws from Iraq by the end of the year.

Huge Crack Discovered in Antarctic Glacier

NASA's DC-8 flew over the Pine Island Glacier Ice Shelf on Oct. 14, 2011. (NASA/GSFC)

A huge, emerging crack has been discovered in one of Antarctica's glaciers, with a NASA plane mission providing the first-ever detailed airborne measurements of a major iceberg breakup in progress.

NASA's Operation Ice Bridge, the largest airborne survey of Earth's polar ice ever flown, is in the midst of its third field campaign from Punta Arenas, Chile. The six-year mission will yield an unprecedented three-dimensional view of Arctic and Antarctic ice sheets, ice shelves and sea ice. The glaciers of the Antarctic, and Greenland, Ice Sheets, commonly birth icebergs that break off from the main ice streams where they flow in to the sea, a process called calving.

The crack was found in c, which last calved a significant iceberg in 2001; some scientists have speculated recently that it was primed to calve again. But until an Oct. 14 IceBridge flight, no one had seen any evidence of the ice shelf beginning to break apart. Since then, a more detailed look back at satellite imagery seems to show the first signs of the crack in early October.

"We are actually now witnessing how it happens and it's very exciting for us," said IceBridge project scientist Michael Studinger of NASA's Goddard Space Flight Center in Greenbelt, Md. "It's part of a natural process, but it’s pretty exciting to be here and actually observe it while it happens."

Gravity pulls the ice in the glacier westward along Antarctica's Hudson Mountains toward the Amundsen Sea. A floating tongue of ice reaches out 30 miles (48 kilometers) into the Amundsen beyond the grounding line, the below-sea-level point where the ice shelf locks onto the continental bedrock. As ice pushes toward the sea from the interior, inevitably the ice shelf will crack and send a large iceberg free. [Photo Album: Antarctica, Iceberg Maker]

Pine Island Glacier is of particular interest to scientists because it is big and unstable and so is one of the largest sources of uncertainty in global sea level rise projections.

A primary goal of Operation IceBridge is to put the same instruments over the exact same flight lines and satellite tracks, year after year, to gather meaningful and accurate data of how ice sheets and glaciers are changing over time. But discovering a developing rift in one of the most significant science targets in the world of glaciology offered a brief change in agenda for the Oct. 26 flight, if only for a 30-minute diversion from the day's prescribed flight lines.

The IceBridge team observed the rift running across the ice shelf for about 18 miles (29 km), using an instrument called the Airborne Topographic Mapper, which uses a technology called lidar (light detection and ranging) that sends out a laser beam that bounces off a surface and back to the device. The lidar instrument measured the rift's shoulders about 820 feet (250 meters) apart at its widest, although the rift stretched about 260 feet (79 meters) wide along most of the crack. The deepest points from the ice shelf surface ranged from 165 to 195 feet (50 to 60 meters).

When the iceberg breaks free, it will cover about 340 square miles (880 square kilometers) of surface area. Radar measurements suggested the ice shelf in the region of the rift is about 1,640 feet (500 meters) feet thick, with only about 160 feet of the shelf floating above water and the rest submerged.

It is likely that once the iceberg floats away, the leading edge of the ice shelf will have receded farther than at any time since its location was first recorded in the 1940s.

Markets plunge on fears Euro plan in Danger

LONDON (AP) -- Markets plunged Tuesday on fears that Europe's plan to save the euro was unraveling after Greece's leader unexpectedly called a referendum on the country's latest rescue package.

Markets are worried Greek Prime Minister George Papandreou wouldn't be able to pull off a victory -- assuming that his government holds together.

Papandreou saw his parliamentary majority cut to 2 seats on Tuesday after one lawmaker quit the ruling party, while another two called for him to resign. At least five other Socialist lawmakers last month called for the formation of a cross-party, national unity government.

The implications for Greece and Europe of a "no" vote in a referendum are massive -- it would imperil Greece's membership of the euro and could cause a messy debt default, which would hurt banks and roil global markets.

"Talk about your all-time bonehead moves," said Benjamin Reitzes, an analyst at BMO Capital Markets. "It would reintroduce the risk that Greece could face a disorderly default and potentially be forced to leave the euro."

Papandreou stunned markets and even his own citizens and fellow eurozone partners by announcing late Monday that a vote will be held. A confidence vote in the Socialist government will also take place at the end of this week.

The news dealt a huge blow to the European debt deal, in which confidence had already been fading.

On Monday, sentiment was already turning sour after U.S. brokerage firm MF Global filed for bankruptcy amid reports that it had bought too much bad European debt and fears over the public finances of Italy, the eurozone's third-largest economy. Italy's debts dwarf the euro1 trillion ($1.4 trillion) that Europe's bailout fund will have at its disposal if last week's commitments are delivered.

"The 6-8 percent falls over two days have now effectively given back all the gains from the post Brussels meeting rally," said Louise Cooper, markets analyst at BGC Partners.

The plan presented last week by eurozone leaders was intended to be Europe's comprehensive solution to a debt crisis that's already seen three countries, including Greece, bailed out.

The three-pronged strategy of boosting the bailout fund, getting private creditors to take a bigger hit on their Greek debt holdings and forcing the banks to raise more capital was largely viewed favorably by the markets, although details need to be ironed out.

In Europe, the FTSE 100 index of leading British shares fell to close 2.2 percent lower at 5,421.57, while Germany's DAX slid 5 percent to 5,834.51. The CAC-40 in France ended 5.4 percent lower at 3,068.33. Unsurprisingly, Greek shares led the retreat with the main exchange in Athens down 6.9 percent.

Italy's stock market fared almost as badly, closing 6.8 percent lower as its borrowing costs spiked in the bond markets. The yield on Italy's 10-year bonds was up another 0.21 of a percentage point to 6.20 percent, having earlier risen to 6.30 percent. Despite the modest retracement from earlier highs, Italy's yield is not far below the 7 percent level many investors think is unsustainable.

The euro fell 1.2 percent lower to $1.3692.

Wall Street suffered a big retreat, too -- the Dow Jones industrial average was down 2.4 percent at 11,665.07 while the broader Standard & Poor's 500 index slid 2.8 percent to 1,218.67.

As well as the events in Europe, investors have a raft of economic news to digest this week, culminating in Friday's monthly U.S. jobs report.

A weak U.S. manufacturing survey from the Institute for Supply Management added to market fears over the state of the U.S. economy. Its main index fell to 50.8 in October from the previous month's 51.6, meaning it's only just above the 50 threshold that indicates expansion.

Alan Ruskin, an analyst at Deutsche Bank, said the survey was consistent with "the slow growth scenario, rather than a recession outlook, but all of this goes with the proviso that there is not a larger external shock."

The Federal Reserve and the European Central Bank also meet to decide on their monetary policies this week. The new ECB chief, Mario Draghi, will hold his first meeting and press conference Thursday. Investors will be looking for signs that the ECB is considering cutting interest rates and that it will continue its program of buying the bonds of troubled eurozone nations, especially Italy and Spain.

Earlier in Asia, stocks fell sharply.

Japan's Nikkei 225 index retreated 1.7 percent to close at 8,835.53. Hong Kong's Hang Seng lost 2.5 percent to 19,369.96 and Australia's S&P/ASX 200 shed 1.5 percent to 4,232.90. Benchmarks in Singapore, India, Indonesia and Thailand were also down.

South Korea's Kospi gained marginally to 1,909.63 and China's Shanghai Composite Index added 0.1 percent to 2,470.02.

Oil prices tracked equities sharply lower. Benchmark crude for December delivery was down $2.68 at $90.51 a barrel in electronic trading on the New York Mercantile Exchange.

Europe may slide into recession, Despite Debt Deal

Despite debt deal, Europe could slide into a recession that would harm US and global economies FRANKFURT, Germany (AP) -- Europe may be able to dodge a financial meltdown. It may not be able to avoid a recession. The deal European leaders reached last week is intended to defuse the continent's debt crisis and avert a panic like the one that nearly toppled the U.S. financial system in 2008. Skeptics caution that the agreement isn't a long-term solution to the debt crisis. Even if it were, the pact did nothing about other threats to Europe's economy: deep cuts by over-indebted governments, high unemployment, stingier bank lending and declining exports.

 Many economists think Europe is nearing a recession that would harm the United States, China and other countries whose economies depend on the continent. The problems are illustrated by The Associated Press' latest quarterly Global Economy Tracker, which monitors data in 30 countries: -- Four nations -- Italy, Spain, Britain and Norway -- reported annualized growth of less 1 percent in the April-June quarter. Economies generally must grow at least 2.5 percent a year just to keep unemployment from rising. --

 Spain had the highest unemployment among countries the AP tracked: 21.2 percent in August. It was followed by Poland's 9.4 percent. --Greece and Italy were buckling under the weight of government debt. In Greece, those debts equaled 161 percent of national output in the January-March quarter, second to Japan's 244 percent. Italy's government debt equaled 113 percent. Financial markets have been spooked by fears that Greece and perhaps larger countries, like Italy, would default on their debts. Banks would be stuck with huge losses on their government bond holdings. European banks agreed last week to take a 50 percent loss on their Greek bonds. They will also set aside more money to cushion against future losses.

In addition, eurozone leaders hope to strengthen their bailout fund to keep the crisis from spreading to bigger countries. Financial markets roared their approval. Jacob Funk Kirkegaard, a research fellow at the Peterson Institute for International Economics, says the deal helped ease fears of a catastrophe. "We're not going to have a disorderly Greek default," he says. "We're also much less likely to have a large European bank suddenly collapse." But analysts noted the paucity of details, wondered how many banks would adopt a voluntary 50 percent write-down on Greek bonds and questioned where the money for the enlarged bailout fund would come from. European leaders last week approached China for financial help.

Kirkegard expects the continent to slip into a mild recession late this year or early next, though its strongest economy, Germany, may escape a downturn. Economic growth in the 17 countries that use the euro will slow to 0.3 percent next year from 1.6 percent this year, the Organization for Economic Cooperation and Development estimated Monday. Some European economies may stop growing altogether, the organization of wealthy nations warned. One reason for the pessimism: Smaller countries, particularly Greece, Ireland and Portugal, are slashing spending. The bigger ones are raising taxes and also cutting spending. Italy, Europe's No. 3 economy, is carrying out a $76 billion package of spending cuts and tax increases to try to convince bond investors it won't default on its debt. Britain has imposed an austerity program that's stalled growth. The debt crisis has shaken the confidence of those whose spending must fuel growth. Business executives and consumers seem less likely to step up purchases for new factories or SUVs. And the prospect of having to absorb huge losses on their bond holdings has caused banks to retrench.

The European Central Bank's October lending survey showed that banks cut net credit to businesses by 16 percent in the July-September quarter. The 124 surveyed banks expected even tighter credit as the year ends. Automaker Daimler AG said last week that it saw little prospect of significant growth in Western Europe. Its French competitor Peugeot Citroen SA said it would cut 6,000 jobs because of flat demand in Europe. The weakness has already caused pain across the Atlantic. Jeff Fettig, CEO of U.S. appliance maker Whirlpool, said Friday that demand is tumbling in parts of Europe. Whirlpool cut its earnings estimates and said it would lay off 5,000 in North America and Europe. The United States exported $240 billion in goods to the European Union last year -- more than twice its export total to China. U.S. companies have also sunk $2.2 trillion into long-term investments in Europe, such as factories and acquired companies.

No other region comes close to drawing so much U.S. investment. Germany has 2,200 American-owned companies. General Motors and Ford Motor Co. have divisions based there. ExxonMobil Corp., ConocoPhillips, GE, IBM, Hewlett-Packard Co., Procter & Gamble Co. and Dow Chemical Co., all generate billions in annual European sales. Exports have accounted for 47 percent of growth since the Great Recession ended in mid-2009. That's more than twice their share after the previous three recessions. "It is the reason Europe matters," says Steve Blitz, senior economist at ITG Investment Research.

Greek referendum call hits markets hard

LONDON (AP) -- Markets plunged Tuesday on fears that Europe's plan to save the euro was already unraveling after the shock decision by Greece's leader to call a referendum on the country's latest rescue. Should the Greek government lose the referendum vote -- and opinion polls say it's going to have real trouble getting enough support -- then the implications for Greece and Europe are massive. The vote could end up deciding whether Greece remains in the 17-nation euro currency union. Markets, it seems, are taking the view that Greek Prime Minister George Papandreou won't be able to pull off a come-from-behind victory. "Talk about your all-time bonehead moves," said Benjamin Reitzes, an analyst at BMO Capital Markets. "It would reintroduce the risk that Greece could face a disorderly default and potentially be forced to leave the euro." Papandreou stunned investors, as well as his own citizens and his partners in the eurozone, by announcing late Monday that a plebiscite will be held in what he called "a supreme act of democracy and of patriotism for the people to make their own decision." A confidence vote in the Socialist government will also take place at the end of this week. The announcement came as the shine from last week's European deal appeared to be wearing off. On Monday, sentiment was already turning sour after U.S. brokerage firm MF Global filed for bankruptcy amid reports that it had bought too much bad European debt and fears over the public finances of Italy, the eurozone's third-largest economy. Italy's debts dwarf the euro1 trillion ($1.4 trillion) that Europe's bailout fund will have at its disposal if last week's commitments are delivered. "The 6-8 percent falls over two days have now effectively given back all the gains from the post Brussels meeting rally," said Louise Cooper, markets analyst at BGC Partners. The plan presented last week by eurozone leaders was intended to be Europe's comprehensive solution to a debt crisis that's already seen three countries, including Greece, bailed out. The three-pronged strategy of boosting the bailout fund, getting private creditors to take a bigger hit on their Greek debt holdings and forcing the banks to raise more capital was largely viewed favorably by the markets, although details need to be ironed out. In Europe, the FTSE 100 index of leading British shares fell 2.9 percent to 5,385 while Germany's DAX slid 4.9 percent to 5,841. The CAC-40 in France was 4 percent lower at 3,114. Greek shares fared much worse, with the main exchange in Athens down 6 percent. The euro was 1.1 percent lower at $1.3700 and the yield on Italy's ten-year yield ratcheted up 0.20 of a percentage point to 6.19 percent. Wall Street was poised for a second day of big falls -- Dow futures were down 1.3 percent at 11,738 while the broader Standard & Poor's 500 futures fell 2 percent to 1,225. As well as the events in Europe, investors have a raft of economic news to digest this week, culminating in Friday's monthly U.S. jobs report. The Federal Reserve and the European Central Bank also meet to decide on their monetary policies this week. The new ECB chief, Mario Draghi, will hold his first meeting and press conference Thursday. Investors will be looking for signs that the ECB is considering cutting interest rates and that it will continue its program of buying the bonds of troubled eurozone nations, especially Italy and Spain. Earlier in Asia, stocks fell sharply. Japan's Nikkei 225 index retreated 1.7 percent to close at 8,835.53. Hong Kong's Hang Seng lost 2.5 percent to 19,369.96 and Australia's S&P/ASX 200 shed 1.5 percent to 4,232.90. Benchmarks in Singapore, India, Indonesia and Thailand were also down. South Korea's Kospi gained marginally to 1,909.63 and China's Shanghai Composite Index added 0.1 percent to 2,470.02. Oil prices tracked equities sharply lower. Benchmark crude for December delivery was down $2.54 at $90.65 a barrel in electronic trading on the New York Mercantile Exchange.