...whether there be any news in it or not. - Henry Fielding

Just as record numbers of aimless liberal arts majors are getting duped into applying to expensive journalism schools (a year at Columbia will put you back a cool 60k, which is about 60k more than the average j-school graduate’s salary these days), the world of journalism is crumbling. This is not news to anyone, especially to those producing it.

A few weeks ago, CEO’s of major news organizations absconded to a clandestine meeting, the topic of which was kept under an ersatz veil of secrecy. The main issue on the table at this meeting was charging for online content, which is no secret at all.  For those of us who came of age during the golden years of the internet, the inevitable is coming.  Whether it’s subscription or pay-as-you-read, free online news will soon join Napster in the grave of internet things that were just too good to be true.  The real question everyone is asking is: will it work?

To be sure, the gang of major news corporations will carefully plan their coup of free online news.  They all try to make it seem glamorous.  They all try to thwart readers from simply moving to a different news source by cooperatively implementing the fee-based system on the same day, at the same time. They all claim that it’s worth it.  And for some, it will be, but for most, I suspect, it won’t.

The real crux of this issue that the media has not yet grasped is that free online content is simply a scapegoat for a much larger issue.  New as we know it has changed. It’s a model that worked once upon a time, when communication was cumbersome and facts not easily verifiable, but has since become archaic. What we have now, the chaos of cognitive input we are subjected to on a daily basis, is collectively generated information on the one hand and entertainment on the other.

Jefferson is often quoted as saying that between democracy and newspapers he’ll take the latter. What he should have said was that circulating information is necessary for democracy.  We need information to make (not to be circular here) informed decisions as a society,  Merely being printed no longer invokes the authority the written word once had, and the idea of the journalist as an authority on information is at least losing the gravity it once held. Even if a journalist manages to eek out a story that is comprehensive, objective and true, it is no longer relevant in a world where Monday morning is old news by lunchtime.  The incredible machine that is taking the place of the journalist is the continuous, albeit entropic, global information convergence and conversation. Reputable, factual, timely and interesting news is now necessarily participatory. It is gathered by the informal collective of twitterers, bloggers, facebookers, aggregators and you-tubers. It is in a constant state of update, of fact checking, of hyperlinked related information, of relaying first hand accounts, of varying opinion and active discourse. The news is no longer given; the news is simply happening, and it’s happening, unlike traditional reported news, at nearly the same speed as the events themselves.  News as collective information is little more than a conversation.

This is a reclamation of information by the people. Every choice we make from the mundane of what to eat for breakfast to the profound of whom to cast your vote for depends on the information we receive.  A fair and just society founded on equality cannot remain so unless the people have unhindered access to information. Access to information is a right and the blogosphere has emancipated is from the filter of the newspaper.

So when you buy your online articles, if you buy your online articles, know that it’s an expense not far from your monthly Netflix fee. If you want actual information, join the conversation, by adding your comments below. As for the coming deluge of journalism school grads? Well, somebody’s gotta make my coffee.

By Erik Jorgen Jorgensen, Featured Contributor, FICRY.com

Source Article Here.

Crack Down on Tax Incentives for Banking off the shore.

In the last year politicians have increasingly pushed for legislation that would limit off-shore banking. Even UK Prime Minister, Gordon Brown, among others has called for curbs on tax havens despite the fact that a great number of the countries that offer such tax incentives, including the Channel Islands, are British dependencies.  Their rhetoric is simple: off-shore banking provides criminals with the means to conceal money generated by illegal industries, such as drug trafficking and prostitution. As a senator, Obama was one of the signatories of the Stop Tax Haven Abuse Act, legislation put to Congress in 2007, which targeted the practice.  During his first 100 days the President introduced other laws as part of a wide-ranging revenue-raising and tax-reform package.

But what are these so-called “tax havens” and, if they are known hotbeds of illegal activity, why hasn’t the government shut them down?

Eamonn Butler, journalist for TimesOnline, argues tax havens are being targeted not because they allow for the laundering of black market funds, but because increased scrutiny has been placed on tax competition among nations. Tax havens are not seedy breeding grounds of laundered money and prostitution, but rather legitimate banking organizations that offer a legal way for clients to avoid taxes. Whereas tax evasion is illegally concealing income from the government, tax “avoidance” generally involves “claiming the full, legal deductions allowed by the tax authorities and moving money to a place where taxes are lower.”  A tax haven is simply a place where taxes are levied at a low rate or not at all. Bulter writes, “It’s avoiders, not evaders, who are the tax haven’s staple customers.” Because it is simply is too risky to move illegal money overseas, offshore havens do not attract drug lords and pimp kings. It is far easier for organized criminals to launder money domestically than to continuously  risk the making legal transfers with illegal funds.  Click here to read Brown’s Article.

Contributor for the Australian news source The Age.com, Sinclair Davidson, echos Brown’s claim by arguing that although tax competition and tax havens conjure up notions of  illegal activity, even the Australian Tax Office concedes that: “Most transactions between Australia and (other) tax havens are lawful.” To Read this article in full click here.

In The Introduction to Tolley’s International Initiatives Affecting Financial Havens (2001), at para 26.1, the assertion is made that the tax haven is, “a creature of the twentieth century, and began to be used extensively because of the high levels of tax which prevailed after the First World War.”  Off-shore banking was created out of necessity when taxes became so high that people sought out legitimate ways to avoid paying after a devastating war. What resulted was the offshore industry, which spread investments from global, economic, centers to banks around the globe.

As the crisis rages on however, politicians look to end a practice that moves European and American money out of the country. Will they succeed in exterminating the last vestige of a tax free world?

As the old adage goes, are taxes as certain as death?

By Cora Weiss, Editor-in-Chief, FICRY.com

Chad, Africa.

Can the recession save children’s lives? According to economist Michael Greenstone, a decrease in global production due to the current crisis has spared the lives of “…between 257 and 451 British, between 1.104 and 1,933 American, and probably between 58,088 and 101,655 Chinese babies” through the reduction of global emissions (Economist June 2009 issue).  He asserts that from December 1st forward, the recession has reduced infant-mortality rates in and around major cities and “saved” lives all over the world.

He bases this assertion on a study conducted in 1970 with Kenneth Chay, where they attempted to calculate the number of infants’ lives that were saved by the Clean Air Act. They estimated 1,300 more one-year-old Americans survived because they were exposed to less pollution than they would have been if the act had never passed congress.

Greenstone in turn took samples of atmospheric conditions from urban areas in London and Chicago and China, and compared the atmospheric conditions from these regions with their respective infant mortality rates. His findings show that air pollution rates dropped when the economic situation worsened. Similarly, pollution rates rose as the economy grew in the years leading up to the crisis. A decrease in the number of manufacturing jobs translated into a decrease in the number of hazardous “suspended particulates” in the atmosphere, which contributed to greater infant health. He uses this information to assert that a causal relationship exists between the relative success of the economy and air pollution.

Greenstone claims that air quality is the predominant factor effecting infant mortality rates. Then he reduces the complex problems of poverty, globalization and industrial production to a single cause and a single effect and by suggesting that if the child survives infancy then it has been saved. He only acknowledges, as a caveat, that despite these numbers one should be careful not to view the recession as a life-giving force.

Unfortunately, pollution is just one of a myriad of complicated factors that negatively impact the lives of children. Furthermore, the shutting down of industrial facilities, a decrease in the number of cars on their morning commute in cities across the country, does not “save” but threatens the livelihood of millions of families world wide. A decrease in production creates unemployment which will raise infant-mortality rates by straining public resources like access to medical care. Undoubtably, air contamination can cause infant death, but financial instability, poverty and malnutrition can have detrimental effects on child development (click here for more information).

By Cora Weiss, Editor-in-Chief, FICRY.com

Click here for source article.

Carey maintains that, “easy credit is a thing of the past.” The sense of extravagance during the boom was made possible by access to cheap credit and skyrocketing housing prices. This allowed the Americans to leverage their homes and go into debt to buy new cars. A culture of fast-money, where consumers lived on credit, and well above their means, was really good for automakers.

Changing trends in consumerism, increasing gas prices, a decrease in the availability of personal financing, these factors are not the force behind Detroit’s fall, but the nails in the coffin for the Big Three. Those responsible for the death of the auto industry are the car makers themselves who saw evidence of declining profits, consumer dissatisfaction and a decrease in general consumption but continued to increase production year-after-year.

While Carey would blame American consumers for their boom-era folly, the real culprits are the auto execs who knowingly produced their products at an ever-increasing rate that hugely exceeded demand. Ultimately, the auto industry failed because they injected a surplus of cars, and carbon, into the global market and devalued their own brands.

Economist Andy Xie, reporting for the Chinese Journal, Caijin claims that auto makers will need to cut production by one-fourth in order to keep pace with a “normalization” of demand. He writes that “current global auto sales are below the 2004 level, but since that year, the industry has increased annual production capacity by nearly 20 million units.” Currently, their are more cars on the road than registered drivers: the global overcapacity is equal to U.S. sales times two. He writes, “….supply and demand are roughly balanced if two of the three U.S. automakers shut down for good, neither restructured nor revitalized.” Hey, if we got rid of two or thee U.S. automakers, would there be any left Mr. Xie?

Auto executives ignored declining profits and upheld notions of profound distortion in the market. “The credit bubble distorted the market and sales were much higher than they should have been,” said independent auto analyst Erich Merkle. Xie concurs that sales at the rate experienced during the boom were based on a distortion of demand. He argues that, exaggerated demand led to wide-spread overproduction as a kind of business model. This caused a narrowing of income distribution by forcing down the price of manufacturing and labor.

Xie reports that the bubble’s bursting has exposed that some of “the pieces of the global economy don’t fit.”  The the rate of industrial production, was wrongly tied to the supply of raw materials and cheap labor, and not on the consumptive viability of a product. Value was wrongly, and to detrimental effect, hinged on the notion that a heap of raw material will yield profits even before they are processed.  The auto industry managed to stay afloat for so long, or in fact, that they thrived by coveting a monopoly on industrial, raw materials with borrowed funds.

When the well ran-dry and exposed gapping, structural weaknesses in our economic house-of-cards, the auto giants were unable to conduct business. The failures of the automakers’ brands and companies underpinned a greater and more complete failure to respond to the market or to scale-back when no one bought. They had been wallowing, for so long, in a cesspool of credit, to rich to correct their staggering overcapcity until finally the financial rug was pulled out-from-under them.

So, just how much smaller will the American market for automobiles be in the future? Undoubtably, the rate of shrinkage could be swayed by changing consumer trends, interest in smaller fuel-efficient vehicles, disenchantment with American brands, a general ageing of the boomers, etc. But the fact remains: despite demand the auto industry is going to have to cut production by a  significant, portion.

By Cora Weiss, Editor-in-Chief, FICRY.com

Afghan National Police officers, Afghan National Army soldiers and U.S. Army 1st Battalion, 4th Infantry Regiment Soldiers patrol on foot July 27 to speak with village leaders in Deh Chopan district, Zabul province.

Tens of thousands of civilian contractors have aided U.S. war efforts in Iraq and Afghanistan. Civilian contractors perform such indispensable tasks as “delivering fuel to frontline troops, guarding U.S. diplomats and translating for soldiers during dangerous raids.” In the process, many of these contractors have suffered devastating and physical and psychological injuries. However, ProPublica reports as these civilian fighters return home, insurance companies are refusing them medical care, psychological counseling and other health services. The insurers who are responsible for covering civilian contractors, namely AIG, have racked up $1.5 billion in tax payer premiums while denying thousands of insurance claims. Despite AIG’s recent collapse, congressional investigators estimate insurance companies have made a $600 million profit in their coverage of civilian contractors.

ProPublica’s investigation reveals insurers disputed nearly half the cases that caused a contractor to miss at least four days of work. When a contractor died, the company protested over a third of filed claims. In addition, insurance companies denied 44% of claims regarding psychological injury or Post-traumatic Stress Disorder. If these denied individuals can’t afford to pay their medical bills, their only option is to fight their insurers in prolonged and costly court battles. Contractors have seen relatively high success rates in court and have defeated insurance companies in 75% of court battles. However, by the time the case is resolved, proper medical care is often compromised and psychological injury is compounded.

The media has given significant attention to” injured military men and women fighting to get proper health care, but has largely overlooked the struggle of civilian fighters.”  Tim Newman, a sheriff’s deputy from South Carolina had his leg amputated after a roadside bomb exploded in Baghdad. He fought his insurer for a full year before they agreed to cover his prosthetic leg. “It’s almost like we’re this invisible, discardable military,” Newman explained, “once we’ve done our jobs, they can sidetrack us and not worry about us anymore.”

Army Reserve Staff Sgt. Alfredo De, X2 microprocessor knee prosthetic, Walter Reed Army Medical Center on Dec. 8, 2009. DoD photo by U.S. Navy Petty Officer 3rd Class William Selby.

Kevin Smith, a truck driver from Texas, has also battled AIG in court for years without getting proper coverage. Smith experienced severe nightmares and flashbacks after enemy fire shattered his leg. Once back at home, an expert diagnosed him with post-traumatic stress disorder. Soon after his diagnosis, AIG stopped paying all of his disability and medical bills, insisting his “recovery was complete.” It wasn’t until four and a half years after his initial injury that a judge for the Department of Labor ordered AIG to reinstitute Smith’s coverage. AIG appealed the ruling, and, to this day, has refused to pay for Smith’s medical bills. “Anybody, anybody that goes into a war situation and does something for their country deserves some kind of honor, some kind of dignity,” said Smith of his demoralizing struggle to pay for his medical care.

In addition to denying medical claims of thousands of injured contractors, insurance companies have failed to notify individuals who are eligible for benefits. Rita Richardson lost her husband in Iraq last year and had no idea she qualified for compensation. After a year a legal disputes with her husband’s insurer and the Department of Labor, Richardson only recently received her rightful compensation. Richardson bemoans the difficulties civilian contractors face in getting proper medical coverage and benefits: “My husband’s blood is the same as anybody else’s. It didn’t matter that he didn’t have on a uniform. He died serving his country.” The U.S. Department of Labor is having a hard time keeping up with disputed claims and legal battles against insurers. A spokesperson explained the Labor Department is not an enforcement agency: “they can’t tell an insurer you must pay,” he said. “All they can do is try to encourage people to do the right thing.” It would be hard to argue AIG and other insurance companies have done anything resembling the right thing.

By Leah Weiss, Featured Contributor, FICRY.com

Click here for source article.

what's in your wallet?

An investigation authored by the Associated Press has concluded that your personal information is vulnerable and unprotected every time you swipe your credit-card and wait for approval.

Sensitive, financial data, including your name and account number are “ferried” to hacker’s computers while the transactions travels from store to bank on the information superhighway, according to the AP. Even social security numbers are free-for-the-hacking while transactions take place.

The private sector determines the safety of over 50 billion, American transactions, over the course or a single year. “The rules are cursory at best and all but meaningless at worst”, according to the AP’s analysis of data breaches. Most retailers are NOT subject to security audits, but “evaluate themselves.”

Currently, there is zero incentive for credit card providers to enhance security. Fraud is just one of the detracting costs of conducting a business based on speed, low-cost information swapping and a convenient connection. They see fraud as a cost of doing business and say ” stricter security would throw sand into the gears of the payment system.”

In its analysis of credit-card information theft Jordan Robertson asserts that  every time you pay with plastic, you are “gambling” with your financial security. He writes: “Even if your transaction isn’t hacked, you still lose: Merchants pass to all their customers the costs they incur from fraud.” Consumers pay for the “tens-of-millions dollars” lost to fraud every year, according to the Privacy Rights Clearinghouse. In fact,  many breaches go completely undetected: “even the companies that had the payment industry’s top rating for computer security, a seal of approval known as PCI compliance, have fallen victim to huge heists.”

Victims of fraud, like Pamela LaMotte, 46, of Colchester, Vt., who was unemployed when her information was intercepted, report personal upheaval and intense, financial stress, ” had to borrow money from her mother and boyfriend to pay $500 in overdraft and late fees” which were eventually refunded” while the banks investigated,” Robertson writes.

LaMotte described fear and instability during this period of her life. She says that for those living paycheck to paycheck, even if reimbursement eventually follows, fraud can be devestating.

Is the government responsible for regulating and ensuring credit-card-security? Or would it be unlawful for the government to interfere in the security of a private, non-governmental enterprise?

By Cora Weiss, Editor-in-Chief, FICRY.com

Click here for source article.

]]> http://ficry.com/credit-card-companies-play-fast-and-loose-with-your-information/feed/ 0 http://ficry.com/blockbuster-nightmare-wherein-no-one-goes-to-the-movies-ever-again/ http://ficry.com/blockbuster-nightmare-wherein-no-one-goes-to-the-movies-ever-again/#comments Fri, 11 Dec 2009 07:30:11 +0000 Cora Weiss http://ficry.com/?p=3713

Everett Collection: WSJ reports that During the Great Depression, many unemployed workers spent entire afternoons watching films at movie houses like this in Eugene, Ore.

Economic ‘Green Shoots’ in the spring kept moviegoers at the Box office for that old timey recession solution, escapism. But now that Oscar season is in full swing, and the FICRY reality has set-in, movie patrons may be opting for cheaper entertainment, like sitting around their computers.

During the summer season, the bread and butter for the film industry, “ticket sales declined for the fourth week in a row, as compared to sales during the same blockbuster weeks last year”. The Wall Street Journal reports that, “..attendance for the summer season, beginning on May 1, is down by 4.36% compared to the same time last summer, with revenue edging down by 0.77%.”These stats indicate a big shift in consumer tendencies, prompting some to question weather movies are indeed, ‘recession proof.’

Entrance to a movie house, Beale Street, Memphis, Tennessee, October 1939.

Earlier this year, box offices around the country generated record profits, which rose 15% as compared to the previous year. Audiences around the country lined up for the dreck and drivel of ‘Mall Cop’ and ‘Fast & Furious,’ in droves, perhaps in an effort to distract themselves from the daily hardships of newly found unemployment or recession living.

Now that American’s are settling in to their respective FICRY points of view, people are cutting luxury items, and this includes going to the movies.

Industry insiders disagree on the interpretation of the slump, but many feel that the content, that is the movies themselves, may also have something to do with lack luster sales. Last summer, films like  “Iron Man,” and “Wall-E,  and the posthumous performance of former heart-throb Heath Ledger in “The Dark Knight,” were staggeringly well received, both critically and at the cash register.

This summer, however, formulaic films like “Funny People,” a loosely vailed version of the so-called stoner with a heart of gold, have failed to attract loyal legions of fans in the same numbers as previous years. (The film opened to $23.4 million, which is slightly less than Mr. Apatow’s last film, “Knocked Up,” grossed its first weekend). Moreover, “Funny People” cost $70 million to make, while “Knocked Up” cost just $30 million, the Journal reports.

According to Lauren A. E. Schuker of the WSJ, floundering interest in the seasons romatic/comedy offerings has put more pressure on the big films, like Transformers 2, to deliver. Studios are now dependent on huge opening weekends followed by strong continual performance, something studio execs cannot seem to consistently achieve. Increasingly in recent years a film’s opening weekend is the benchmark of its success, regardless of how fast interest peaks and then fall off a cliff. But, “studios are beginning to realize that this is not a business model for success,” Schuker argues. Film makers must generate a sustainable interest in their products and cannot create a summer ‘Blockbuster’ with hype alone.

In fact hype can damage a film’s performance, as was the case with Sacha Baron Cohen’s “Bruno,” for example, which underperformed expectations after a lavish, promotional tour which overexposed the character into ruin. His press tour left to little to the consumer’s imagination (why see a film we can predict). Hopefully, studio execs will take note of Cohen’s flop and think twice before embarking on promotional method of the shock doctrine. Big openings do not always yield dramatic profits.

“The Dark Knight,” which was released on July 18 of last year, “…grossed nearly $400 million domestically after playing just three weekends,’” as compared to the six weekends it took “Transformers” to reap a similar profit, according to the Wall Street Journal.

If the American film industry is going to remain rich amid the economic downturn, consumers need to be seeing movies every weekend of the year. But, “the industry is facing a genuine crisis of consumer interest,” according to some insiders, WSJ reports.  Movie going may not be this generation’s choice for escaping our hard times. Past predilections do NOT predict future consumption. Less than stellar sales should send a clear message to studio execs that they need to invest in better products, and innovate or face their eventual replacement.

After all during the Great Depression folks turned to movies as a cheap form of entertainment: a snack and a film for a frugal date. Today however, going to the movies can be as expensive as a dinner out.

In the closeted world of satin and sequins that is Parisian haute couture, there is uncertainty about the future. Even Christian Lacroix, the incarnation of frivolity and joie de vivre in high fashion, showed his final collection, but only thanks to the benevolence of embroiderers, feather suppliers and shoe makers working for free.

The house that reinvented the pouf skirt in the extravagant 1980s filed in May for protection from its creditors, similar to Chapter 11 bankruptcy protection in the United States. Financial authorities have announced that all but 12 of the 124 staff members will be laid off, unless one of three possible investors comes through. The designer could be left only with his name and a handful of licenses.

Even Christian Dior Couture, part of the mighty LVMH Mo Hennessy Louis Vuitton group, retreated Monday from a grand location to its own house for a show of closeted boudoir glamour” although cutting back did not apply to the floral decoration of more than 4,000 roses.

Sidney Toledano, president and chief executive of Christian Dior Couture, said that, far from being a cost-cutting exercise, it was just as expensive to show in house and that the change was made to express the spirit of couture rather than as a belt-tightening exercise.

Bernard Arnault, chairman and chief executive of LVMH, the parent company of both Dior and Givenchy, insisted that high fashion remained an imperative.

Givenchy

Givenchy also shows a couture collection.

“It is the heart of the house,” Mr. Arnault said of Dior. “And it is good to come back home.”

Although haute couture is about delicate craftsmanship, its current purpose is to create an image as well as to dress clients.

What did the 120 women who are couture regulars make of the show? They may be happy to learn that the outfits will be offered with regular silk-lined skirts and jackets because John Galliano’s seductive collection was based on the fantasy of transparency: clothes so light that black stockings, garters and bared flesh made a shadowy appearance under a pleated orange skirt, and a curvy tailored jacket in bold fuchsia was worn over nothing but seamed stockings and silken panties. To garnish the succulent fashion menu, a corset might be molded on the outside of an outfit.

It was all a riff on the glory days of Christian Dior, when a glimpse of stocking was something shocking and it incorporated the very Parisian lust for luxurious underpinnings as a male and female fantasy.

“I call it ‘cabine fever!’” said Mr. Galliano, referring to the backstage frenzy in a series of 1950s photographs of the Dior dressing rooms that showed the models in girdles and bras dressing for the shows.

There was no new direction here, for we have seen this inside/outside world before from the designer. But never has the delicacy seemed more delicious than as a close up and personal vision of pink flower embroideries on a white skirt worn with a nude-colored bra top. All the work of the Paris embroiderers was exquisite in its artistry and subtlety.

Dior Runway Show, 2009

But this world of shifting chiffon and layered lace, not to mention shoes decorated with jeweled garters, also had a vibrant side. As if giving a second, hyper-colorful life to the pen-and-ink sketches of the illustrator Rene Gruau, Mr. Galliano made the classic Dior rounded jackets in vivid shades or in a zebra pattern of black and white.

“I loved the outside underwear and the black and flesh colors together,” said the petite actress Marion Cotillard, who was perched on Dior platform shoes so high she was on a level with Mr. Arnault.

More from the Dior Runway Collection, 2009

The collection was Dior with attitude, in the sweeping hats, the winged eyeliner and in the posing of the models. But at its heart were conventional Dior clothes of the kind that Carla Sarkozy, the wife of the French president, wears so demurely. Yet this time, instead of imagining what lies beneath a prim exterior, the fantasy of undress was on general view as a sly celebration of haute couture.

Elsewhere, it is the Italians who have come to the rescue of Paris fashion. Giorgio Armani joined the couture calendar with his Private collection four years ago and, on Monday, Roberto Cavalli announced that a high-end collection destined for private clients would be offered in his newly opened Paris boutique.

“We already do it for clients from our studio in Milan,” said Eva Cavalli, the designer’s partner. “But now we will have the workrooms here in Paris.”

Mr. Cavalli showed the special occasion outfits, which included dresses with the designer’s signature serpent snaking through as embroidery and exceptional handwork on a scaly mermaid dress or mother of pearl appliques, “all destined for women with $30,000 or more to invest in a very special dress.”

Campaign images for the Roberto Cavalli for H&M collection. Shot by Terry Richardson

Uncirculated Banknotes from North Korea

Writing for the Washington Post Foreign Service, Blaine Harden reports that for Kim Jong Il’s birthday, North Korean insurance managers delivered “$20 million in cash into two heavy-duty bags and sent them, via Beijing.” The cash was given to Korean insurance managers by their international counterparts. The money is reimbursements for fraudulent claims.

This incident highlights the global insurance scams that keep the North Korean government afloat by providing them with foreign cash. David L. Asher, who supervised a State Department unit that attempted to track various illegal activities by North Korea during the Bush administration says that, foreign money keeps Kim Jong Il in power and reimbursements are paid-out even now, at a time when North Korea has incurred the wrath of the international community for engaging in nuclear brinksmanship.

The mechanisms of fraud, which put hard-currency into the hands of Korea’s despot-in-Chief, are mostly unknown. However, details emerged in London, last year, when lawyers for German Allianz Global Investors, Lloyd’s of London and several insurers received a suspicious claim, filed by Jong Il’s government. According to Harden, international insurers received a request for reimbursement for a 2005 crash of a helicopter into a “government-owned warehouse in Pyongyang.” Insurers argued that the crash was staged. Many international insurers now believe that the North Korean government routinely uses insurance fraud to “raise money for the personal use of Kim Jong Il.”

Despite its economy policy of isolation, Harden maintains, North Korea is not only guilty of insurance fraud but also of illegally “manufacturing and trafficking of drugs ranging from heroin to Viagra, as well as to expert counterfeiting of $100 bills,” and the production of high-quality counterfeit items to be sold on the international market. 

Click Here for source article and more information

Cora Weiss, Editor-in-Chief, FICRY.com

Coal workers in Shizuishan

Production drove the boom. Now that it’s Bust will workers demand their fair share? Reporting from China, Caijin Online correspondent Andy Xie, claims that the financial sector overestimated its worth by more than 100%, and that in light of this realization, the global financial sector will shrink to half its size. This will cause a “scaling-down” of the global economy, with immediate effects in areas of production, and consequently, the catalyst for union organization and large-scale worker unrest.

Xie argues that the current financial crisis, is the beginning of the end for the “the pacification of globalization’s losers.” The industrial workers of China, the literal force behind the boom of the last quarter-century have been left with little residual wealth or evidence of the profitability of their endeavors. They are the first victims of the crisis: those working in export manufacturing, for transnational corporations, in the developing world.

A board member of Rosetta Stone Advisors Ltd., Xie claims that the during the bubble the “bottom half of income earners in developed countries did not experience an increase in income, but grew adjusted to an atmosphere of credit that facilitated an increased standard of living.” Those responsible for an increase in global wealth, the workers, were never directly compensated, but were allowed to borrow above their means. Workers did not earn more, but they were able to leverage their assets and receive financing relatively cheaply, improving their quality of life by taking-on debt.

Lao Ye Temple Mine

While some maintain that full economic recovery is a year or two away, Xie claims that pre-crisis levels of productivity are unattainable because of a global, industrial overcapacity. Inflated prices in the financial sector lead to investment in real industrial production. For example, the price of iron ore, accounts for more than half of the cost production. Equipment, labor and profits all account for small shares of product price. The value of the raw material depends on cheap labor.

If, or when, as Xie would have it, industrial capacity “normalizes,” the price of raw materials, like ore, will fall and the already low-cost of labor will plummet. In Xie’s view, the financial crisis will come to its natural tipping-point. When there are no jobs for those formerly employed in the manufacture of industrial exports, those whose elbow’s greased the wheels of modern progress, the workers will revolt.

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For more information about the source, visit Caijing Magazine Online.

Cora Weiss, Co-Founder, Editor-in-Chief, FICRY.com