Germany Joins the Club


So in the run up to the weekend's European summit, Germany adopts a new immigration law.

Germany adopted a disputed immigration law Thursday that tightens rules for asylum seekers but aims to attract high-tech foreign workers, putting the issue squarely into September's election campaign.The law grew out of a long-running debate on how to balance anxiety about the growing number of immigrants with Germany's need for skilled foreign workers as the native-born population ages.

Opposition conservatives announced they will challenge the law, saying it flies in the face of efforts by European Union leaders to clamp down on illegal immigration out of concern about anti-immigrant sentiment. The conservatives claim the new law could flood Germany with foreigners.

The bill, which scraped through the upper house of parliament in March, puts more pressure on newcomers to integrate but sets no quotas on the number of immigrants that can be brought in................Schroeder's center-left government drew up the law after an expert commission said last year that Germany needs tens of thousands of new migrants each year to supplement its aging, shrinking population.The government had said its bill would allow Germany to admit workers needed by industry in areas such as the high-tech sector while also tightening asylum laws and requiring foreigners to assimilate.

European Union leaders expect to finalize some 50 proposals to lower the number of illegal immigrants to the 15-nation bloc at a weekend meeting in Seville, Spain — out of alarm at strong electoral scores for France's Jean-Marie Le Pen and other far-right politicians.

Germany's 7.3 million legal foreign residents currently account for about 9 percent of the population.
Source: Yahoo News LINK

If you believe your eyes, even the most cautious proposals are greeted by what by all accounts will be the next German government with cries of social alarm and fears of immigrant flooding! Everyone still convinced Europe will be capable of reform?

Spain Starts Summer Holiday Two Days Early

So today is the 21 July, the summer solstice and the longest day in the year. I'll be celebrating by getting in the car and heading, not for Stonehenge, but for a quiet corner of the Spanish Pyrenees. I'll probably also find myself sitting in some of the years longest traffic jams as hundreds of thousands of other 'Barcelonins' all try to leave town at the same time to celebrate this long holiday weekend - Monday is Sant Joan (or John in English) and one of the highpoints of the festive year, a special and magic day when Catalans light bonfires, make a lot of noise with fireworks, eat a special Coca (or cake) and swill it all down with lashings of the local Cava.

But what makes this year different is that fact that for very many people here the party actually started not today, but on Wednesday night. This is due to the fact that yesterday there was a general strike in Spain. This strike was called by the Spanish Unions to protest at a new law being proposed by Jose Maria Aznar's Partido Popular government to reform the system of unemployment benefits and labour contracts. But for millions of young Spaniards it was the perfect excuse to start the party early, and all the disco's were working overtime. I happen to be able to confirm this personally as I was working into the early hours of Thursday morning trying to learn Blogger pro, and playing around with skins from Blogskins. And the cars kept roaring past my door, just like any other Saturday night. Of course, young people in Spain tend to live at home with their parents till they are nearly thirty these days. This means that they have more money than any previous generation to spend on cars, clothes, music and entertainment generally, and are an important factor behind Spain's consumer driven economic expansion. Of course they are also going to be asked to inter-generationally sacrifice on a big scale to pay for the massive population of old people Spain will have in ten to fifteen years. They are going to pay a lot into the pension funds, but, chances are, they will receive very little. So perhaps it is appropriate that they enjoy themselves now.

I'm not going to comment here on the actual issues behind the strike, except to point out that from the people I have spoken to it's not so much the substance of the reforms that is causing the problem as the way they are being presented. Most people accept the need for change, understand that Spain's future is going to be complicated, and are willing to make some sacrifices. But they don't like receiving orders. It's the governmental style here that is at the heart of the problem, and this is an issue which unites protesters about the proposed national water plan (an explosive issue in the rural areas of North West Spain), university teachers and now workers across Spanish industries. And in particular workers over fifty are nervous about this law. European labour market participation rates are down to about 25% by the time we get up to 60, and the recent Barcelona summit targeted participation rates of up to 75% at 65 (and later extension of working age up to 70) as part of the alternative to increased immigration in the face of population ageing. What this means is that if you have or take early retirement you may be asked to go to work in another occupation, and, of course, for less money. This may well have to happen. But it is important to remember that many who are in this group today started working in the 1960's, often as early as at 13 and 14, and often in physically challenging occupations. These people are tired, and the politicians need to understand that this situation needs to be handled with sympathy and understanding. This is not a circumstance which is present in today's Spain. My feeling is, that just like during the last years of Thatcher Britain, this government is surviving because the electors have no credible and coherent alternative.

On the other hand, most of the debate in Spain focuses on the ability of this society to mature in the way it handles information:

The Spanish government and the unions gave differing versions of the strike's effects.Finance Minister Rodrigo Rato said an average of 17 percent of workers honored the strike. "There has been nothing even approaching a generalized strike," Rato said. Labor federations said the figure of participation during the strike was a whopping 84 percent. They called on Aznar to withdraw his unemployment reforms, passed by decree last week. Source: Yahoo News LINK

These numbers are pathetic on both sides. For a modern society to function well, it's important that its citizens are able to trust the information they receive (Bush administration please note). For this to be the case numbers provided need to be at least half-way realistic. We can all see from Argentina what can happen in a critical situation if confidence in the veracity of a government is lost, even when there's really no money there, the people may still refuse to believe it.

IClone analyst says IDon't

The latest fracas involving Merrill Lynch stock analyst Hecht raises again the paucity of information available to ordinary garden variety investors. Hecht is being accused by some members of the House Energy Committee of using insider info as the basis of a stock recommendation

Merrill Lynch and Co. Inc. on Wednesday rejected suggestions from congressional investigators that its biotechnology analyst received and disseminated inside information when he issued a report on ImClone Systems Inc. a day before negative news sent the company's stock tumbling. Investigators are examining a research note issued by the investment bank's analyst Eric Hecht on Dec. 27, which drew attention to market speculation that the U.S. Food and Drug Administration might decline to review ImClone's experimental cancer drug, Erbitux. A day later the FDA did just that.

Apart from that fact that the so called 'lifestyle diva' Martha Stewart has already been tangled up in insider dealing scandal, what is interesting about what is going on is that it highlights just how important for 'stock analysis' are the internet chat-boards:

In pointing out that investors were speculating approval of Erbitux might be delayed, Hecht was stating the obvious. Investors had been discussing their concerns on Internet chat-boards as early as Dec. 18. They even speculated about possible insider trading as they watched the stock begin to slide two weeks ahead of the FDA's announcement on Dec. 28.

In the days leading up to the announcement, trading volume in ImClone's stock soared. On Dec. 27, more than 7.7 million shares changed hands, more than triple the average and the most in a single day since September 19, 2001, when Bristol-Myers Squibb Co. agreed to pay up to $2 billion for U.S. rights to Erbitux and a 20 percent stake in ImClone. That level of trading activity and a sharp drop in ImClone's stock price prompted questions from Merrill Lynch's trading desk, Merrill Lynch said. Hecht's report came in response to these questions.

Hecht was not the first to point out investor concern over potential negative news from the FDA. A full week before Hecht's note, Cory Kasimov, an analyst at Gruntal & Co., had also noted that some investors were concerned the FDA may request additional data from ImClone, potentially delaying the drug's acceptance. Kasimov's comments were distributed widely via the Dow Jones news agency. One day after Kasimov's comments, the online news organization The Street.com also published a report stating that "fears are rising that the FDA's acceptance of (ImClone's) application, expected by Dec. 31, could be delayed."
Source: Reuters on Yahoo News LINK

The defence seems reasonable given that you don't have to be a genius to fathom that, since the FDA has been tightening up a lot on drug permits lately, any pharma company with a product up for approval could get a negative result. But the more interesting detail is the attention paid to the quantity of information available on the chat boards, and then again just who exactly was doing the posting. It is widely assumed that some Enron employees were in fact using these boards to publicly blow the whistle and call attention to the dangers of the stock months before any 'official' analyst was willing to accept that there might be a problem. So in this environment, just exactly what is insider trading. When the Street's commentator states that 'fears are rising', they are presumably rising and being aired over the internet.

The lesson is clear, if you really could stand to wade your way daily through the type of stuff that's in these posts, then you could probably make yourself a lot of money, but in my book you'd have to do a hell of alot of tedious work to earn it. It wouldn't be my way to spend a nice sunny day.

EUROPE'S ID CRISIS

So the French results are in, and Chirac has a bigger majority than ever. The part I don't get is how this is somehow all going to lead to accelerated reform.

Now it is going to be one of Bonobo's central tenets that we are not political, not in the normal partisan sense at any event. The issues at stake are too important for that. So in one sense a change in the political complexion of Europe's goverrnment seems - at the meta level - perfectly normal and healthy. If you believe in democracy, then democracy needs to be representative, and all the people need to feel represented, at least some of the time, ergo: goverments change hands. This is the bonobo view (which is whats sets us apart from the garden variety chimpanzee).

So on one level everything's fine. But then there's this reform bit, and it's here that I have the problem. If we look at the issues that are moving the European electorate at the moment it's the FEAR of change that is moving people, and not the desire for more. If we begin to think about why the left voters are staying at home, it's got more to do with a lack of enthusiasm for the reform process which the left parties are timidly advancing, than with a desire to accelerate this process, and if the voters of the right are looking to their traditional parties for protection from the processes of globalisation, and in particular from the convulsive movements of peoples that these are producing, it's in order to try to put a BRAKE on these processes. That is, these voters want more protection from their governments, not less.

What we are witnessing is a revival of NATIONALISM in Europe, and all of this is going to make the job of co-ordinating the EU a mighty difficult one. Keep your eyes on the Sevilla summit.

Which makes me a little out of sympathy with AP's Barry Renfrew:

Left-leaning governments across Europe are being kicked out by voters worried about ailing economies, crime, illegal migrants and a fear that traditional policies of state control don't work.Europeans are turning to conservative, and even far-right parties, for tough economic reforms and law-and-order policies. Many see the left as out of step with ordinary people........

This a far cry from the 1990s, when the left swept to office across Europe and ecstatic supporters talked of decades in power. The left believed it had the answers for post-Cold War Europe in a globalized economy - a blend of capitalism and traditional left-wing social policies to protect workers and fund generous welfare programs.There was also a strong belief that the left would speed up integration of the European Union ( news - web sites), turning it into a 15-nation power to rival, even eclipse, the United States.

But perhaps more than any other factor, the left has failed to tackle key law-and-order issues worrying many voters, especially illegal immigration and crime. Rightly or wrong, many voters link the two and feel threatened in their own homes. A growing number of Europeans are worried or feel threatened by the influx of hundreds of thousands of newcomers, legal and illegal, from the Middle East, Asia and Africa. Even in traditionally tolerant nations like the Netherlands and Denmark, populist outsider parties have made strong gains by capitalizing on fear of large ethnic minorities that show little sign of integrating."
Source: Yahoo News LINK

Perhaps the FT is a bit nearer the mark:

As the polls closed the abstention rate stood at a record high of almost 40 per cent among France's 41m electorate - well above the exceptional level in the first round of 35 per cent. The refusal by such a large segment of the electorate to go to the polls underlined French people's weariness with voting after two consecutive rounds of presidential and general elections in two months.
LINK

So come on, which is it, a dynamic and imaginative population, tired of the heavy hand of bureaucracy and chafing at the bit for reform, or an insecure and worried group of voters, locked in the safety of their own homes, and saying, in the immortal words of the Economist: 'if you're one of the planets tired and huddled masses, then clear off'.

Well at least Le Pen didn't get any seats.









MORE BUZZ ON ANDREESSEN

It must be Marc's birthday or something, what with all this attention:

For some reason, popular waves of computer technology tend to be personified. The personal computer era had two faces: Steve Jobs and Bill Gates. In its boom years, the Internet, despite being decentralized technology with countless contributors, had a leading man: Marc Andreessen, co-founder of Netscape Communications, who wrote code and became rich, the first of the young Internet millionaires, smiling from the cover of Time magazine at 24, barefoot and wearing shorts.

What a difference six years make. Last month, Mr. Andreessen, 30, spoke to a group of potential customers at the Four Seasons Hotel in Manhattan. There were all of five people representing four companies: two investment banks, a media company and a consumer product marketer. Outnumbering the potential customers were Mr. Andreessen and his colleagues from Loudcloud Inc., an Internet company based in Sunnyvale, Calif...............
Source: New York Times LINK

It seems to me that someone's tryin to push the idea that Loudcloud's goin to be the 'next new big thing'.....