iran's two-edged bomb

NYTimes | WITH Iran having notified the United Nations nuclear watchdog agency on Monday that any day now it will begin enriching its stockpile of uranium in order to power a medical reactor, we should admit that Washington’s approach to countering the Islamic Republic is leading nowhere. What’s needed, however, may be less of a change of plan than a change in how we view the threat of a nuclear-armed Iran.

Believe it or not, there are some potential benefits to the United States should Iran build a bomb. (I’m speaking for myself here, and in no way for the Air Force.) Five possibilities come to mind.

First, Iran’s development of nuclear weapons would give the United States an opportunity to finally defeat violent Sunni-Arab terrorist groups like Al Qaeda. Here’s why: a nuclear Iran is primarily a threat to its neighbors, not the United States. Thus Washington could offer regional security — primarily, a Middle East nuclear umbrella — in exchange for economic, political and social reforms in the autocratic Arab regimes responsible for breeding the discontent that led to the attacks of Sept. 11, 2001.

Until now, the Middle East autocracies have refused to change their ways because they were protected by the wealth of their petroleum reserves. A nuclear Iran alters the regional dynamic significantly, and provides some leverage for us to demand reforms.

Second, becoming the primary provider of regional security in a nuclear Middle East would give the United States a way to break the OPEC cartel. Forcing an end to the sorts of monopolistic practices that are illegal in the United States would be the price of that nuclear shield, bringing oil prices down significantly and saving billions of dollars a year at the pump. Or, at a minimum, President Obama could trade security for increased production and a lowering of global petroleum prices.

Third, Israel has made clear that it feels threatened by Iran’s nuclear program. The Palestinians also have a reason for concern, because a nuclear strike against Israel would devastate them as well. This shared danger might serve as a catalyst for reconciliation between the two parties, leading to the peace agreement that has eluded the last five presidents. Paradoxically, any final agreement between Israelis and Palestinians would go a long way to undercutting Tehran’s animosity toward Israel, and would ease longstanding tensions in the region.

Fourth, a growth in exports of weapons systems, training and advice to our Middle Eastern allies would not only strengthen our current partnership efforts but give the American defense industry a needed shot in the arm.

With the likelihood of austere Pentagon budgets in the coming years, Boeing has been making noise about shifting out of the defense industry, which would mean lost American jobs and would also put us in a difficult position should we be threatened by a rising military power like China. A nuclear Iran could forestall such a catastrophe.

one step closer...,

WaPo | Iran's formal notification Monday to a United Nations nuclear watchdog that it will begin producing higher-grade enriched uranium marks a new and potentially dangerous turn in Tehran's confrontation with the West over its nuclear ambitions.

Iran couched its announcement in terms of a pressing need for fuel at a 41-year-old, U.S.-built research reactor that produces medical isotopes for an estimated 850,000 kidney, heart and cancer patients. But in reality it means that Iran will be a significant step closer to possessing the raw material needed to build a nuclear bomb.

Indeed, Iran does not have the expertise to build the specialized fuel rods needed for the research reactor -- only France and Argentina are expert at it -- so the main consequence of Iran's decision appears to be moving up the enrichment ladder. If Iran tried to fuel the reactor itself, absent international assistance, it would be risky to the reactor and for public safety, according to David Albright, president of the Institute for Science and International Security in Washington.

Iranian officials have acknowledged the difficulty of using homemade fuel. In an interview in December, Mohammad Ghannadi, vice president of the Atomic Energy Organization of Iran, said that while Iran could try to produce the fuel itself, "there would be technical problems. Also, we'd never make it on time to help our patients."

Meanwhile, enriching uranium under the guise of medical needs will get Tehran much closer to possessing weapons-grade material. Iran insists it has no interest in nuclear weapons. But Albright said 70 percent of the work toward reaching weapons-grade uranium took place when Iran enriched uranium gas to 3.5 percent. Enriching it further to the 19.75 percent needed for the reactor is an additional "15 to 20 percent of the way there."

Once the uranium is enriched above 20 percent, it is considered highly enriched uranium. The uranium would need to be enriched further, to 60 percent and then to 90 percent, before it could be used for a weapon. "The last two steps are not that big a deal," Albright said. They could be accomplished, he said, at a relatively small facility within months.

brand management - message control

WaPo | Six months ago, network executives were complaining that the White House was costing them tens of millions of dollars by pressing them to carry presidential news conferences in prime time.

Problem solved: President Obama hasn't held a full-scale news conference since July. Instead, he answered a dozen people's questions last week on YouTube, most of them easily finessed and -- extra bonus! -- no annoying follow-ups of the kind posed by real, live journalists.

It would be hard -- impossible, actually -- to argue that Obama hasn't been accessible to the media, not with his constant television interviews. The man has even done color commentary at a Georgetown basketball game. But the decision to bypass the White House press corps is no accident.

"It's a source of great frustration here," says Chip Reid, CBS's White House correspondent. "It's important for us to hold the president's feet to the fire."

NBC White House reporter Chuck Todd calls the situation a "shame," saying the administration is trying to control the message rather than allowing Obama to be seen "unscripted."

naked banksterism

NYTimes | If the Democratic Party has a stronghold on Wall Street, it is JPMorgan Chase. Its chief executive, Jamie Dimon, is a friend of President Obama’s from Chicago, a frequent White House guest and a big Democratic donor. Its vice chairman, William M. Daley, a former Clinton administration cabinet official and Obama transition adviser, comes from Chicago’s Democratic dynasty.

But this year Chase’s political action committee is sending the Democrats a pointed message. While it has contributed to some individual Democrats and state organizations, it has rebuffed solicitations from the national Democratic House and Senate campaign committees. Instead, it gave $30,000 to their Republican counterparts.

The shift reflects the hard political edge to the industry’s campaign to thwart Mr. Obama’s proposals for tighter financial regulations.

Just two years after Mr. Obama helped his party pull in record Wall Street contributions — $89 million from the securities and investment business, according to the nonpartisan Center for Responsive Politics — some of his biggest supporters, like Mr. Dimon, have become the industry’s chief lobbyists against his regulatory agenda.

Republicans are rushing to capitalize on what they call Wall Street’s “buyer’s remorse” with the Democrats. And industry executives and lobbyists are warning Democrats that if Mr. Obama keeps attacking Wall Street “fat cats,” they may fight back by withholding their cash.

“If the president doesn’t become a little more balanced and centrist in his approach, then he will likely lose that support,” said Kelly S. King, the chairman and chief executive of BB&T. Mr. King is a board member of the Financial Services Roundtable, which lobbies for the biggest banks, and last month he helped represent the industry at a private dinner at the Treasury Department.

“I understand the public outcry,” he continued. “We have a 17 percent real unemployment rate, people are hurting, and they want to see punishment. But the political rhetoric just incites more animosity and gets people riled up.”

branson warns of oil crunch in five years

Guardian | Sir Richard Branson, founder of the Virgin Group, will say the coming crisis could be even more serious than the credit crunch. Photograph: Peter Schneider/EPA

Sir Richard Branson and fellow leading businessmen will warn ministers this week that the world is running out of oil and faces an oil crunch within five years.

The founder of the Virgin group, whose rail, airline and travel companies are sensitive to energy prices, will say that the ­coming crisis could be even more serious than the credit crunch.

"The next five years will see us face another crunch – the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well," Branson will say.

"Our message to government and businesses is clear: act," he says in a foreword to a new report on the crisis. "Don't let the oil crunch catch us out in the way that the credit crunch did."

Other British executives who will support the warning include Ian Marchant, chief executive of Scottish and Southern Energy group, and Brian Souter, chief executive of transport operator Stagecoach.

Their call for urgent government action comes amid a wider debate on the issue and follows allegations by insiders at the International Energy Agency that the organisation had deliberately underplayed the threat of so-called "peak oil" to avoid panic on the stock markets.

she dead...,

CNN | The last member of an ancient tribe that has inhabited an Indian island chain for around 65,000 years has died, a group that campaigns for the protection of indigenous peoples has said.

Boa Sr, who was around 85 years of age, died last week in the Andaman islands, about 750 miles off India's eastern coast, Survival International said in a statement.

The London-based group, which works to protect indigenous peoples, said she was the last member of one of ten distinct Great Andamanese tribes, the Bo.

"The Bo are thought to have lived in the Andaman islands for as long as 65,000 years, making them the descendants of one of the oldest human cultures on earth," it noted.

With her passing at a hospital, India also lost one of its most endangered languages, also called Bo, linguists say.

"She was the last speaker of (the) Bo language. It pains to see how one by one we are losing speakers of Great Andamanese and (their) language is getting extinct. (It is) A very fast erosion of (the) indigenous knowledge base, that we all are helplessly witnessing," read an obituary in Boa Sr's honor posted on the Web site of the Vanishing Voices of the Great Andamanese (VOGA) project.
"Boa Sr was the only speaker of Bo and had no one to converse with in that language.
--Anvita Abbi

Project director Anvita Abbi, a professor at New Delhi's Jawaharlal Nehru University, met with Boa as recently as last year. "She was the only member who remembered the old songs," Abbi recounted in her obituary.

"Boa Sr was the only speaker of Bo and had no one to converse with in that language," Abbi told CNN. Her husband and children had already died, the linguist said.

Other than Bo, she also knew local Andaman languages, which she would use to converse, according to Abbi.

Boa Sr was believed to be the oldest of the Great Andamanese, members of ten distinct tribes. Survival International estimates there are now just 52 Great Andamanese left.

fat old sun

a childhood favorite...,

the psychology of power

The Economist | REPORTS of politicians who have extramarital affairs while complaining about the death of family values, or who use public funding for private gain despite condemning government waste, have become so common in recent years that they hardly seem surprising anymore. Anecdotally, at least, the connection between power and hypocrisy looks obvious.

Anecdote is not science, though. And, more subtly, even if anecdote is correct, it does not answer the question of whether power tends to corrupt, as Lord Acton’s dictum has it, or whether it merely attracts the corruptible. To investigate this question Joris Lammers at Tilburg University, in the Netherlands, and Adam Galinsky at Northwestern University, in Illinois, have conducted a series of experiments which attempted to elicit states of powerfulness and powerlessness in the minds of volunteers. Having done so, as they report in Psychological Science, they tested those volunteers’ moral pliability. Lord Acton, they found, was right.

An intriguing characteristic emerged among participants in high-power states who felt they did not deserve their elevated positions. These people showed a similar tendency to that found in low-power individuals—to be harsh on themselves and less harsh on others—but the effect was considerably more dramatic. They felt that others warranted a lenient 6.0 on the morality scale when stealing a bike but assigned a highly immoral 3.9 if they took it themselves. Dr Lammers and Dr Galinsky call this reversal “hypercrisy”.

They argue, therefore, that people with power that they think is justified break rules not only because they can get away with it, but also because they feel at some intuitive level that they are entitled to take what they want. This sense of entitlement is crucial to understanding why people misbehave in high office. In its absence, abuses will be less likely. The word “privilege” translates as “private law”. If Dr Lammers and Dr Galinsky are right, the sense which some powerful people seem to have that different rules apply to them is not just a convenient smoke screen. They genuinely believe it.

What explains hypercrisy is less obvious. It is known, though, from experiments on other species that if those at the bottom of a dominance hierarchy show signs of getting uppity, those at the top react both quickly and aggressively. Hypercrisy might thus be a signal of submissiveness—one that is exaggerated in creatures that feel themselves to be in the wrong place in the hierarchy. By applying reverse privileges to themselves, they hope to escape punishment from the real dominants. Perhaps the lesson, then, is that corruption and hypocrisy are the price that societies pay for being led by alpha males (and, in some cases, alpha females). The alternative, though cleaner, is leadership by wimps.

hunger - a global justice problem?

The Atlantic | A year ago I sat in a room at the Earth Institute at Columbia surrounded by executives from big food companies. One of them, I believe from Unilever, clicked to a slide that read "The solution to global hunger is to turn malnutrition into a market opportunity." The audience—global development practitioners and academics and other executives—nodded and dutifully wrote it down in their notebooks; I shuddered. The experience stayed with me and I haven't gotten over it. Last month, I had a flashback.

On a Tuesday evening I sat in a room on the 44th floor of a building in the financial district of lower Manhattan with representatives from General Mills, Monsanto, Dean Foods, Deutsche Bank, and the Rainforest Alliance. We were there to speak to institutional investors—the hedge fund managers, bankers, and others who invest in big food companies—about sustainability and food. In particular, we were there to talk about how sustainability and hunger issues may give these companies both exposure to risk and access to opportunity.

It was not your average sustainable food panel discussion. Reflecting back on it, three things jump out at me. The first was a false premise that is taken for fact. The false premise:

Both Deutsche Bank and Monsanto made it clear that they are basing their business strategy on answering a simple question: How will we feed the world in 2050, when the population reaches over 9 billion and global warming puts massive strains on our resources? The answer for Deutsche Bank: increase yields by investing in industrial agriculture in the developing world, with an emphasis on technology; put lots of capital into rural land to shift subsistence and local market agricultures to commodity export agriculture. The answer for Monsanto: increase yields by decreasing resource dependence using genetically modified crops.

At first glance, these answers make both Monsanto and Deutsche Bank look virtuous. But they rest on a false premise: "There will be over 9 billion people by 2050. We have less than 7 billion today, and people go hungry. We need to increase food production if we are going to feed them." Indeed, there will be over 9 billion people by 2050, and indeed, with less than 7 billion today, people still go hungry. But we don't need to increase crop yields to feed these people. In 2008, globally, we grew enough food to feed over 11 billion people. We grew 4,000 calories per day per person—roughly twice what people need to eat.

obama levy and volcker rule

FT | Paul Volcker and Barack Obama have either thrown the world into chaos or given the cause of global bank regulation new impetus – it depends on your point of view. But one thing is for certain: the twin US initiatives to derisk banks and tax them according to their size – the Volcker rule and the Obama levy as they have been dubbed – have seized the attention of bankers and regulators around the world.

The US last month first made clear that it wanted to exact a levy of 0.15 per cent on any bank balance sheet over $50bn. Then it said that banks should no longer engage in what it felt were riskier practices – investing in hedge funds, private equity or proprietary trading, the archetypal casino-style betting of bank funds for a quick profit.

As part of that second crackdown, US officials said banks would not be able to grow beyond their current share of the market.

Underpinning both initiatives is a crackdown on institutions deemed “too big to fail” – an area regulators admit had not been settled via the international supervisory authorities, such as the Financial Stability Board and the Basel Committee on Banking Supervision, until the US political intervention.

There are at least four competing ideas under discussion among regulators, politicians and bankers. These include the extension of existing regulatory initiatives; the introduction of contingency capital planning; the rewriting of rules around different capital instruments, such as bank bonds; and a full-scale adoption at the level of the Group of 20 countries of a form of the Obama levy.

dopamine receptor density correlates with social status

Physorg | People have typically viewed the benefits that accrue with social status primarily from the perspective of external rewards. A new paper in the February 1st issue of Biological Psychiatry suggests that there are internal rewards as well.

Dr. Martinez and colleagues found that increased social status and increased social support correlated with the density of dopamine D2/D3 receptors in the striatum, a region of the brain that plays a central role in reward and motivation, where dopamine plays a critical role in both of these behavioral processes.

The researchers looked at social status and social support in normal healthy volunteers who were scanned using positron emission tomography (PET), a technology that allowed them to image dopamine type 2 receptors in the brain.

This data suggests that people who achieve greater social status are more likely to be able to experience life as rewarding and stimulating because they have more targets for dopamine to act upon within the striatum.

Dr. Martinez explains their findings: "We showed that low levels of dopamine receptors were associated with low social status and that high levels of dopamine receptors were associated with higher social status. The same type of association was seen with the volunteer's reports of social support they experience from their friends, family, or significant other."

Dr. John Krystal, Editor of Biological Psychiatry commented, "These data shed interesting light into the drive to achieve social status, a basic social process. It would make sense that people who had higher levels of D2 receptors, i.e., were more highly motivated and engaged by social situations, would be high achievers and would have higher levels of social support."

These data also may have implications for understanding the vulnerability to alcohol and substance abuse, as the work of Dr. Nora Volkow, the Director of the National Institute on Drug Abuse, and colleagues suggests that low levels of D2/D3 receptors may contribute to the risk for alcoholism among individuals who have family members who abuse alcohol. The current data suggest that vulnerable individuals with low D2/D3 receptors may be vulnerable to lower social status and social supports, and these social factors have previously been suggested as contributors to the risk for alcohol and substance use.

These findings are particularly exciting because they put human neurobiology into a social context, and we humans are fundamentally social creatures. It is in these social contexts that the biological effects on behavior obtain their real meaning.

endgame

LATOC | From the early days of the industrial revolution into the early 1970s, the United States possessed the immense economic advantage of sizeable reserves of whatever the cutting-edge energy source happened to be. During what Lewis Mumford called the eotechnic era, when waterwheels were the prime mover for industry and canals were the core transportation technology, the United States prospered because it had an abundance of mill sites and internal waterways. During Mumford’s paleotechnic era, when coal and railways replaced water and canal boats, the United States once again found itself blessed with huge coal reserves, and the arrival of the neotechnic era, when petroleum and highways became the new foundation of power, the United States found that nature had supplied it with so much oil that in 1950, it produced more petroleum than all other countries combined.

That trajectory came to an abrupt end in the 1970s, when nuclear power – expected by nearly everyone to be the next step in the sequence – turned out to be hopelessly uneconomical, and renewables proved unable to take up the slack. The neotechnic age, in effect, turned out to have no successor. Since then, for most of the last thirty years, the United States has been trying to stave off the inevitable – the sharp downward readjustment of our national standard of living and international importance following the peak and decline of our petroleum production and the depletion of most of the other natural resources that once undergirded American economic and political power. We’ve tried accelerating drawdown of natural resources; we’ve tried abandoning our national infrastructure, our industries, and our agricultural hinterlands; we’ve tried building ever more baroque systems of financial gimmickry to prop up our decaying economy with wealth from overseas; over the last decade and a half, we’ve resorted to systematically inflating speculative bubbles – and now, with our backs to the wall, we’re printing money as though there’s no tomorrow.

Now it’s possible that the current US administration will be able to pull one more rabbit out of its hat, and find a new gimmick to keep things going for a while longer. I have to confess that this does not look likely to me. Monetizing the national debt, as economists call the attempt to pay a nation’s bills by means of a hyperactive printing press, is a desperation move; it’s hard to imagine any reason that it would have been chosen if there were any other option in sight.

What this means, if I’m right, is that we may have just moved into the endgame of America’s losing battle with the consequences of its own history. For many years now, people in the peak oil scene – and the wider community of those concerned about the future, to be sure – have had, or thought they had, the luxury of ample time to make plans and take action. Every so often books would be written and speeches made claiming that something had to be done right away, while there was still time, but most people took that as the rhetorical flourish it usually was, and went on with their lives in the confident expectation that the crisis was still a long ways off.

We may no longer have that option. If I read the signs correctly, America has finally reached the point where its economy is so deep into overshoot that catabolic collapse is beginning in earnest. If so, a great many of the things most of us in this country have treated as permanent fixtures are likely to go away over the years immediately before us, as the United States transforms itself into a Third World country. The changes involved won’t be sudden, and it seems unlikely that most of them will get much play in the domestic mass media; a decade from now, let’s say, when half the American workforce has no steady work, decaying suburbs have mutated into squalid shantytowns, and domestic insurgencies flare across the south and the mountain West, those who still have access to cable television will no doubt be able to watch talking heads explain how we’re all better off than we were in 2000. Fist tap Big Don.

moody's says u.s. credit rating's in the crapper

Financial Times | Moody’s Investors Service fired off a warning on Wednesday that the triple A sovereign credit rating of the US would come under pressure unless economic growth was more robust than expected or tougher actions were taken to tackle the country’s budget deficit.

In a move that follows intensifying concern among investors over the US deficit, Moody’s said the country faced a trajectory of debt growth that was “clearly continuously upward”.

Steven Hess, senior credit officer at Moody’s, said the deficits projected in the budget outlook presented by the Obama administration outlook this week did not stabilise debt levels in relation to gross domestic product.

“Unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously than expected, the federal financial picture as presented in the projections for the next decade will at some point put pressure on the triple A government bond rating,” the rating agency added in an issuer note.

This week, the White House forecast a $1,565bn budget deficit for 2010, which represents 10.6 per cent of gross domestic product and is the highest such ratio of debt to GDP since the second world war. Fist Tap Dale.

quantum photosynthesis

The Scientist | Biologists have traditionally left quantum theory to physicists. But the complicated interactions between matter and energy predicted by quantum mechanics appears to play a role in photosynthesis, according to a study published this week in Nature -- affecting how energy from the sun makes its way to a cell's reaction centers before being converted to chemical energy that powers cellular functions.

"The main surprise was that you could actually see" these quantum effects influencing real world biology, said biophysicist Rienk van Grondelle of VU University in Amsterdam, who did not participate in the work, and "that you could observe this phenomenon underlying how [photosynthesis] was working."

Quantum mechanics is a theory that describes the behavior of subatomic particles such as photons and electrons. But scientists have long believed that predictions made by the theory would only be evident in an idealized world that lacks environmental noise of molecules moving around and bumping into one another. People thought that "at room temperature, the noisy environment would kill this kind of quantum interaction," said van Grondelle, who wrote an accompanying review in Nature.

But examining the light-harvesting systems of two species of photosynthetic algae, physical chemist Gregory Scholes of the University of Toronto and his colleagues observed that energy introduced to the system acted in a distinctly quantum manner, even at ambient temperatures.

the target is now iran

Guardian | We were ­supposed to have learned the lessons of the Iraq war. That's what Britain's ­Chilcot inquiry is meant to be all about. But the signs from the Middle East are that it could be happening all over again. The US is ­escalating the military build-up in the Gulf, officials revealed this week, boosting its naval presence and supplying tens of billions of dollars' worth of new weapons systems to allied Arab states.

The target is of course Iran. Kuwait, the United Arab Emirates, Qatar and Bahrain are all taking deliveries of Patriot missile batteries. In Saudi Arabia, Washington is sponsoring a 30,000-strong force to protect oil installations and ports. The UAE alone has bought 80 F16 fighters, and General Petraeus, the US commander, claims it could now "take out the entire Iranian airforce".

The US insists the growing militarisation is defensive, aimed at deterring Iran, calming Israel and reassuring its allies. But the shift of policy is clear enough. Last week Barack Obama warned that Iran would face "growing consequences" for failing to halt its nuclear programme, while linking it with North Korea – as George Bush did, in his "axis of evil" speech in 2002.

When Iran's president, Mahmoud Ahmadinejad this week renewed Iran's earlier agreement to ship most of its enriched uranium abroad to be reprocessed, the US was dismissive. Obama's "outstretched hand", always combined with the threat of sanctions or worse, appears to have been all but withdrawn.

The US vice-president, Joe Biden, underlined that by insisting Iran's leaders were "sowing the seeds of their own destruction". And in Israel, which has vowed to take whatever action is necessary to prevent Iran acquiring nuclear weapons, threats of war against its allies, Lebanon's Hezbollah and the Palestinian Hamas, are growing. "We must recruit the whole world to fight Ahmadinejad," Israeli president Shimon Peres declared on Tuesday.

The echoes of the run-up to the invasion of Iraq are unmistakable. Just as in 2002-3, we are told that a dictatorial Middle Eastern state is secretly ­developing weapons of mass destruction, defying UN resolutions, obstructing inspections, threatening its neighbours and supporting terrorism.

u.s. raising the stakes on iran

Guardian | Tension between the US and Iran heightened dramatically today with the disclosure that Barack Obama is deploying a missile shield to protect American allies in the Gulf from attack by Tehran.

The US is dispatching Patriot defensive missiles to four countries – Qatar, United Arab Emirates, Bahrain and Kuwait – and keeping two ships in the Gulf capable of shooting down Iranian missiles. Washington is also helping Saudi Arabia develop a force to protect its oil installations.

American officials said the move is aimed at deterring an attack by Iran and reassuring Gulf states fearful that Tehran might react to sanctions by striking at US allies in the region. Washington is also seeking to discourage Israel from a strike against Iran by demonstrating that the US is prepared to contain any threat.

am not! are so!

BusinessGreen | We're running out of oil, warns Total boss; no we're not, says Saudi chief exec

Leading figures within the oil industry have clashed this week at the World Economic Forum in Davos over the risk to energy security posed by the "peak oil " phenomenon.

Thierry Desmarest, chief executive at French oil giant Total, yesterday told a meeting on energy supplies at the annual summit that the world's oil supplies were approaching their peak, the point at which many experts fear energy prices will begin to rise exponentially.

He said the industry would struggle to go beyond 95 million barrels per day, about 10 per cent above current levels of supply. "The problem of peak oil remains," he added.

His comments will be seized on by oil industry whistleblowers and environmental groups, who have been warning for years that the world is approaching an energy supply crunch that threatens to cripple the global economy. Experts have argued that the global recession has served to delay oil shortages for several years, noting that prior to the economic downturn, oil prices were running at record levels.

However, the chief executive of the Saudi state oil firm Saudi Aramco, Khalid al-Falih, told the same meeting in Davos that fears over "peak oil" had been hugely exaggerated.

"The concern about peak oil is behind us," he said, adding that "of the four trillion (barrels) of oil the planet is endowed with, only one has been produced ".

He did, however, admit that "most of what remains is more difficult and complex" to extract, but insisted there was "no doubt" the world can produce more than the 95 million to 100 million barrels a day that are projected to be required in the next few decades.

The spat came on the same day as the chief economist of the International Energy Agency, Dr Fatih Birol, cast fresh doubt on the wisdom of many oil firms' long-term investment plans, warning that demand for oil from industrialised nations has already peaked.

new peak in oil production needed

Telegraph | At a meeting of oil leaders at the World Economic Forum at Davos, Tony Hayward, group chief executive of BP, said that there was a “supply challenge” for the industry which would have to increase output to 100mbd - a new peak for oil. Mr Hayward said that at present the world was producing between 83 and 84mbd.

He said he hoped Iraq would become a major oil player, producing up to 10mbd in the next decade if the political situation remains relatively stable.

A need for a new peak in oil production will dismay environmental campaigners who hoped that the West’s declining reliance on oil would mean less CO2 emissions. Instead, demand from the emerging economies, including India and the other BRIC countries, China, Russia and Brazil, will lead to new record levels of consumption.

Mr Hayward’s comments were supported by Peter Voser, the chief executive of Shell, who said that the industry would have to find up to $27trn of investment over the next 20 years to meet demand.

At the session new figures from PriceWaterhouseCoopers revealed that non-OECD countries will account for two-thirds of world consumption by 2030. Mr Hayward said that demand from non-OECD nations would increase by 40pc.

“The obvious thing in the mature markets of Europe and the United States is that demand for oil products is in structural decline,” Mr Hayward said. He argued that demand was now coming from the East, pointing out that China sold 13m cars last year.

“The challenge is how do we meet this growing demand for oil and keep a lid on price?” Hayward said.

quiet as it's kept....,

don't feed those stray animals...,

continuing brand management struggles...,

WaPo | President Obama's 165th flight on Air Force One required all the customary protocols of a presidential trip. He took a helicopter from the White House lawn to Andrews Air Force Base, where seven military officers waited at full attention. He entered his plane through a door decorated by the presidential seal and settled into a suite that includes an office and a conference room. After a short flight, he exited to cheers from a greeting party before disappearing into a limousine that cruised down the barricaded streets of this New Hampshire city.

When Obama arrived here Tuesday afternoon, he stopped at a suburban industrial park to visit a machinery company. Snipers surveyed from the roof. Secret Service agents monitored the warehouse. A 19-car motorcade idled outside. Obama, meanwhile, stood on the gray concrete floor with the company's employees, studying their manufacturing materials and trying to convey his new favorite message: He understands the problems of what he calls "everyday Americans."

It is a tough sell for any president who lives inside what Obama refers to as "the bubble," but tougher still for Obama. His first year in office was defined in part by a paradox. He is a rare president who comes from the middle class, yet people still perceive him as disconnected from it. As he arrived in Nashua, nearly two-thirds of Americans believed that his economic policies had hurt the country or made no difference at all; almost half thought he did not understand their problems.

Obama has made it his goal in the past 10 days to convince them otherwise. In Nashua, he hoped to connect with the unemployed despite holding the country's most prestigious job; to disparage Washington politics despite being a product of them; to have a self-described "direct conversation with the folks of New Hampshire" even as bomb squads, Secret Service officers, political dignitaries and television cameras occupied every corner of the room.

gates sets new global war

Daily Bell | Free-Market Analysis: Wow, this is news. Maybe Gates has said this before, but we're not aware of it, or not like this. His speech seems to be positioning nonstate terrorism as a definitive fulcrum of a new cold war. That's some budget request!

But let us begin at the beginning - especially as we have already analyzed the dominant social theme of terrorism in several recent articles. You can see Scott Smith's analysis here, at the end of the Simon interview, click here.

In fact it is a kind of twofer.

First there is the "uniqueness of state military protection" - one of the longest-lived and most pernicious dominant social themes in the arsenal of the powers-that-be. It makes use of humankind's instinct, millions of years old, to band together to defend against the "other." In fact, it is a tribal instinct that was most useful when there were fewer humans and more lions and tigers. Today, all over the world, especially in the West, power elites (in our opinion) do whatever it takes to frighten their OWN populations in order to provide the necessary military and policing services that then justify their services, privileges and powers.

Then there is the meme of nonstate terrorism - that "terrorism can strike from anywhere." Starting with the "anarchist" promotion of the early 20th century, Western elites have been busily inculcating the meme that terror is entirely unpredictable and that sustained campaigns of violence can be initiated and carried forth by a few dedicated individuals.

For a long time, Israel served as a good example of this promotion. Shadowy bands of terrorists were reported attacking Israeli citizens on a regular basis, yet one was never really given to understand how these terrorists banded together, where they came from or how they received their support. Israel seemed to be afflicted by modern terrorism - by a peculiar aspect of modernity, the "stateless terrorist."

And now here is Gates speaking of a ...

"CONTINUING THREAT OF TERRORISM FROM ‘NONSTATE GROUPS ... [THAT] "TRANSCENDS THE FAMILIAR CONTINGENCIES THAT DOMINATED U.S. PLANNING AFTER THE COLD WAR."'

Do you see? Here is the BIFURCATED meme in its all its glory being trotted out. This is a historical moment folks. You are in on the ground floor. You are looking at liftoff. Right now, just this minute, Gates has declared a NEW GLOBAL COLD WAR. That's right - he's saying that the DANGER posed by the stateless terrorist "transcends" the threats, and therefore the contingencies or solutions, generated by Pentagon Cold War planning. And that the danger of the stateless terrorist is even bigger than the threat of the Soviet Union (and to a lesser extent China), which spawned the last cold war.

From our point of view (humble as it is) this is THE MOTHER OF ALL PROMOTIONS. In fact, a terrorist without a state is as much of a danger, long term, as a toaster without power, a flashlight without a battery or an agenda of religious violence without state backing. We have come to believe this because we are students of free-market economics. Absent the coercion of the state, there is competition - and people are free to choose whether or not to support a "terrorist."

DoD fy 2011 budget request

Overview - FY2011 Defense Budget Program Acquisition Costs by Weapons System

Military Personnel Programs (M-1) Operation and Maintenance Programs (O-1) Revolving and Management Fund (RF-1) Procurement Programs (P-1) Procurement Programs Reserve Components (P-1R) Research, Development, Test & Evaluation Programs (R-1) Military Construction, Family Housing, and Base Realignment and Closure Program (C-1) Other Justification Material

why are u.s. voters stupid?

The Daily Bell | Thomas Frank, the author of the best-selling book What's The Matter with Kansas, is an ... exasperated Democrat. He believes that the voters' preference for emotional engagement over reasonable argument has allowed the Republican Party to blind them to their own real interests.

The Republicans have learnt how to stoke up resentment against the patronizing liberal elite, all those do-gooders who assume they know what poor people ought to be thinking.

Right-wing politics has become a vehicle for channeling this popular anger against intellectual snobs. The result is that many of America's poorest citizens have a deep emotional attachment to a party that serves the interests of its richest. Thomas Frank says that whatever disadvantaged Americans think they are voting for, they get something quite different: "You vote to strike a blow against elitism and you receive a social order in which wealth is more concentrated than ever before in our life times, workers have been stripped of power, and CEOs are rewarded in a manner that is beyond imagining.

Thomas Frank thinks that voters have become blinded to their real interests "It's like a French Revolution in reverse in which the workers come pouring down the street screaming more power to the aristocracy."

As Mr. Frank sees it, authenticity has replaced economics as the driving force of modern politics. The authentic politicians are the ones who sound like they are speaking from the gut, not the cerebral cortex. Of course, they might be faking it, but it is no joke to say that in contemporary politics, if you can fake sincerity, you have got it made.

And the ultimate sin in modern politics is appearing to take the voters for granted. This is a culture war but it is not simply being driven by differences over abortion, or religion, or patriotism. And it is not simply Red states vs. Blue states any more. It is a war on the entire political culture, on the arrogance of politicians, on their slipperiness and lack of principle, on their endless deal making and compromises.

The passage above, coming toward the end of the article is, in our opinion, the real reason the article was written. The BBC generally is not a great fan of the American Republican Party and of "right wing" politics in general. The article's real thesis, from our point of view, is that "Americans are once again being lied to by the fascist right wing - which has learned to adopt an "authentic tone."

Poor BBC. They have got it wrong again. This is important because in the Age of the Internet, such propagandistic handiwork has ramifications. In fact, what is going on in America, thanks in large part to information available on the Internet, is that literally millions of people, many of them youngsters, have rediscovered classical liberalism and real republican values. The Tea Parties are an outgrowth of this discovery, though also of general American voter rage with the continued decline of civil society and living standards.

To answer the BBC's question, American voters ARE NOT voting against their interests, nor are they voting for "authenticity." What American voters are voting for increasingly is more freedom, less government, fewer taxes and a political system that is seen as working for the people rather than against them. President Barack Obama has misread the will of the voters and the "change" he was elected to provide.

The biggest and most powerful movement in the United States, as we have long predicted, is the classical liberal message of Congressman Ron Paul (R-Tex). Eventually, maybe sooner rather than later, his movement (with some 250,000 members) will have signed up one million members, making it the most powerful force for freedom in America since before the Civil War. The British - the BBC and even the Telegraph - are blithely ignoring the convulsive changes that are taking place in American political life.

the okey doke...,

AlterNet | In the following interview Bill Moyers and Thomas Frank, author of "What's the Matter With Kansas" and "The Wrecking Crew," talk about why conservatives can get away with blaming Obama for the past decade of conservative failures.

Bill Moyers: There were hands in the air in Washington this week, but it wasn't a stickup. The new Financial Crisis Inquiry Commission, appointed by Congress to find out how America got rolled, began hearings this week. These four are not the victims of one of the greatest bank heists in history - they're the perpetrators, bankers so sleek and crafty they got off with the loot in broad daylight, and then sweet talked the government into taxing us to pay it back.

Watching that scene on the opening day of the hearings, it was hard enough to believe that almost a year has passed since Barack Obama raised his hand, too -- taking the oath of office to become our 44th President. Even harder to remember what America looked like before Obama, because we've also been robbed of memory, assaulted by what the Nobel laureate Czeslaw Milosz described as a "fantastic proliferation of mass media." We live in a time "characterized by a refusal to remember." Inconvenient facts simply disappear down the memory hole, as in George Orwell's novel, "1984."

President Obama's made plenty of mistakes during his first year, and we've critiqued them frequently here on the JOURNAL, but hardly anyone talks any more about what happened in the years before. He inherited from George W. Bush the biggest financial debacle since the Great Depression, along with two unpopular and costly wars, and a dysfunctional and demoralized government.

It's important to remember those years, a time that has been characterized by the historian Thomas Frank, as "A Low, Dishonest Decade." He's here to talk about them with me. Thomas Frank is editor of the recently relaunched BAFFLER magazine, a literary journal; a contributing editor of HARPER'S; a weekly columnist for THE WALL STREET JOURNAL; and the author of ONE MARKET UNDER GOD, the bestselling WHAT'S THE MATTER WITH KANSAS? and his latest bestseller, THE WRECKING CREW, now out in paperback. Good to have you back.

unapologetic conservative double-standards...,

WaPo | The nation owes a substantial debt to Justice Samuel Alito for his display of unhappiness over President Obama's criticisms of the Supreme Court's recent legislation -- excuse me, decision -- opening our electoral system to a new torrent of corporate money.

Alito's inability to restrain himself during the State of the Union address brought to wide attention a truth that too many have tried to ignore: The Supreme Court is now dominated by a highly politicized conservative majority intent on working its will, even if that means ignoring precedents and the wishes of the elected branches of government.

Obama called the court on this, and Alito shook his head and apparently mouthed "not true." His was the honest reaction of a judicial activist who believes he has the obligation to impose his version of right reason on the rest of us.

The controversy also exposed the impressive capacity of the conservative judicial revolutionaries to live by double standards without apology.

The movement's legal theorists and politicians have spent more than four decades attacking alleged judicial abuses by liberals, cheering on the presidents who joined them in their assaults. But now, they are terribly offended that Obama has straightforwardly challenged the handiwork of their judicial comrades.

There is ample precedent for Obama's firm but respectful rebuke of the court. I know of no one on the right who protested when President Ronald Reagan, in a 1983 article in the Human Life Review, took on the Supreme Court's Roe v. Wade decision of 10 years earlier.

"Make no mistake, abortion-on-demand is not a right granted by the Constitution," Reagan wrote. "No serious scholar, including one disposed to agree with the court's result, has argued that the framers of the Constitution intended to create such a right. . . . Nowhere do the plain words of the Constitution even hint at a 'right' so sweeping as to permit abortion up to the time the child is ready to be born." Reagan cited Justice Byron White's description of Roe as an act of "raw judicial power," which is actually an excellent description of the court's ruling on corporate money in Citizens United v. Federal Election Commission.

Reagan had every right to say what he did. But why do conservatives deny the same right to Obama? Alternatively, why do they think it's persuasive to argue, as Georgetown Law professor Randy Barnett did last week in the Wall Street Journal, that it's fine for a president to take issue with the court, except in a State of the Union speech? Isn't it more honorable to criticize the justices to their faces? Are these jurists so sensitive that they can't take it? Do they expect everyone to submit quietly to whatever they do?

the counter revolution

NYTimes | Now at the remove of 50 years, we can ask how it happened so fast — but not only that. We can also usefully ask how such an idealistic and altruistic movement might fare in today’s media environment. As Jack Bass, a Southern newspaperman turned historian, observed when we talked the other day, it was a time when everybody watched the three network news programs. It was also a time when hysterical jeremiads about the perils of change were not part of the mainstream news flow.

Sure, conservative columnists like Rowland Evans and Robert Novak clucked about Communist influence on the Student Nonviolent Coordinating Committee, and Paul Harvey seemed vaguely disturbed by dark-skinned youngsters who talked back to Southern sheriffs. But straight, eyewitness reporting dominated television news, and Northern print reporters flooding the region quickly shamed Southern newspapers into covering civil rights in a way that began to look, let us say, balanced — or even, in a few cities, fair.

What seems remarkable in retrospect is the factual authority of network news in those days. Dixie’s politicians, of course, accused the national anchors of bias. But the pictures trumped the home-cooked propaganda, as when you put a spittle-spraying Southern governor up against a Greensboro Four leader like Franklin McCain, in his earnest Sunday clothes, offering a cogent critique of Woolworth’s Southern business strategy as it related to black shoppers nationwide. It took only one national telecast of Nashville students being assaulted at the lunch counters to demonstrate that segregation everywhere depended on the unconstitutional application of police brutality.

With such an agenda of real news, how one dreaded seeing some ponderous network commentator interrupt the reporters to claim his 90 seconds of air time. There was simply no need to put a scrim of opinion between the viewer and fresh news film.

Today, however, there’s no denying that traditional reportage of political and social trends seems almost as out of date as segregation. Surely the civil rights movement would have been hampered by the politicized, oppositional journalism that flows from Fox News and the cable talk shows. Luckily for the South, that kind of butchered news was left mostly to a few extremist newspapers in Virginia and Mississippi and to local AM radio talk shows that specialized in segregationist rants.

is there an ecological unconscious?

NYTimes | There are numerous psychological subfields that, to one degree or another, look at the interplay between human beings and their natural environment. But ecopsychology embraces a more revolutionary paradigm: just as Freud believed that neuroses were the consequences of dismissing our deep-rooted sexual and aggressive instincts, ecopsychologists believe that grief, despair and anxiety are the consequences of dismissing equally deep-rooted ecological instincts.

“If you look at the beginnings of clinical psychology,” Patricia Hasbach, a psychotherapist and prominent ecopsychologist based in Eugene, told me, “the focus was on intrapsychic forces” — the mind-bound interplay of ego, id and superego. “Then the field broadened to take into account interpersonal forces such as relationships and interactions between people. Then it took a huge leap to look at whole families and systems of people. Then it broadened even further to take into account social systems” and the importance of social identities like race, gender and class. “Ecopsychology wants to broaden the field again to look at ecological systems,” she said. “It wants to take the entire planet into account.”

The terms in which ecopsychology pursues this admittedly ambitious goal are steeped in the field’s countercultural beginnings. Ecopsychology emerged in the early 1960s, just as the modern environmental movement was gathering strength, when a group of Boston-area graduate students gathered to discuss what they saw as the isolation and malaise infecting modern life. It had another brief period of efflorescence, particularly on the West Coast and among practitioners of alternative therapies, in the early ’90s, when Theodore Roszak, a professor of history (he coined the word “counterculture”) published a manifesto, “The Voice of the Earth,” in which he criticized modern psychology for neglecting the primal bond between man and nature. “Mainstream Western psychology has limited the definition of mental health to the interpersonal context of an urban-industrial society,” he later wrote. “All that lies beyond the citified psyche has seemed of no human relevance — or perhaps too frightening to think about.” Ecopsychology’s eclectic following, which includes therapists, researchers, ecologists and activists, still reflects these earlier foundations. So does its rhetoric. Practitioners are as apt, if not more apt, to cite Native American folk tales as they are empirical data to make their points.

Yet even as it remains committed to its origins, ecopsychology has begun in recent years to enter mainstream academic circles. Last April, Doherty published the first issue of Ecopsychology, the first peer-reviewed journal dedicated to “the relationship between environmental issues and mental health and well-being.” Next year, M.I.T. Press will publish a book of the same name, edited by Hasbach and Peter Kahn, a developmental psychologist, and Jolina Ruckert, a Ph.D. candidate, both at the University of Washington. The volume brings together scholars from a range of disciplines, among them the award-winning biologist Lynn Margulis and the anthropologist Wade Davis, as it delves into such areas as “technological nature” and how the environment affects human perception. Ecopsychology is taught at Oberlin College, Lewis & Clark College and the University of Wisconsin, among other institutions.

jpmorgan vs. goldman sachs

HuffPo | We are witnessing an epic battle between two banking giants, JPMorgan Chase (Paul Volcker) and Goldman Sachs (Geithner/Summers/Rubin). Left strewn on the battleground could be your pension fund and 401K.

The late Libertarian economist, Murray Rothbard, wrote that U.S. politics since 1900, when William Jennings Bryan narrowly lost the presidency, has been a struggle between two competing banking giants, the Morgans and the Rockefellers. The parties would sometimes change hands, but the puppeteers pulling the strings were always one of these two big-money players. No popular third party candidate had a real chance at winning, because the bankers had the exclusive power to create the national money supply and therefore held the winning cards.

In 2000, the Rockefellers and the Morgans joined forces, when JPMorgan and Chase Manhattan merged to become JPMorgan Chase Co. Today the battling banking titans are JPMorgan Chase and Goldman Sachs, an investment bank that gained notoriety for its speculative practices in the 1920s. In 1928, it launched the Goldman Sachs Trading Corp., a closed-end fund similar to a Ponzi scheme. The fund failed in the stock market crash of 1929, marring the firm's reputation for years afterwards. Former Treasury Secretaries Henry Paulson, Robert Rubin, and Larry Summers all came from Goldman, and current Treasury Secretary Timothy Geithner rose through the ranks of government as a Summers/Rubin protégé. One commentator called the U.S. Treasury "Goldman Sachs South."

Goldman's superpower status comes from something more than just access to the money spigots of the banking system. It actually has the ability to manipulate markets. Formerly just an investment bank, in 2008 Goldman magically transformed into a bank holding company. That gave it access to the Federal Reserve's lending window; but at the same time it remained an investment bank, aggressively speculating in the markets. The upshot was that it can now borrow massive amounts of money at virtually 0% interest, and it can use this money not only to speculate for its own account but to bend markets to its will.

But Goldman Sachs has been caught in this blatant market manipulation so often that the JPMorgan faction of the banking empire has finally had enough. The voters too have evidently had enough, as demonstrated in the recent upset in Massachusetts that threw the late Senator Ted Kennedy's Democratic seat to a Republican. That pivotal loss gave Paul Volcker, chairman of President Obama's newly formed Economic Recovery Advisory Board, an opportunity to step up to the plate with some proposals for serious banking reform. Unlike the string of Treasury Secretaries who came to the government through the revolving door of Goldman Sachs, former Federal Reserve Chairman Volcker came up through Chase Manhattan Bank, where he was vice president before joining the Treasury. On January 27, market commentator Bob Chapman wrote in his weekly investment newsletter The International Forecaster:

A split has occurred between the paper forces of Goldman Sachs and JP Morgan Chase. Mr. Volcker represents Morgan interests. Both sides are Illuminists, but the Morgan side is tired of Goldman's greed and arrogance... Not that JP Morgan Chase was blameless, they did their looting and damage to the system as well, but not in the high handed arrogant way the others did. The recall of Volcker is an attempt to reverse the damage as much as possible. That means the influence of Geithner, Summers, Rubin, et al will be put on the back shelf at least for now, as will be the Goldman influence. It will be slowly and subtly phased out... Washington needs a new face on Wall Street, not that of a criminal syndicate.

Goldman's crimes, says Chapman, were that it "got caught stealing. First in naked shorts, then front-running the market, both of which they are still doing, as the SEC looks the other way, and then selling MBS-CDOs to their best clients and simultaneously shorting them."

Volcker's proposal would rein in these abuses, either by ending the risky "proprietary trading" (trading for their own accounts) engaged in by the too-big-to-fail banks, or by forcing them to downsize by selling off those portions of their businesses engaging in it. Until recently, President Obama has declined to support Volcker's plan, but on January 21 he finally endorsed it.

a life well lived...,

i am the price system...,

Bloomberg | The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system -- apart from the matter of AIG’s bailout -- deserves further congressional scrutiny.

The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail.

That move came a few weeks after the Federal Reserve and Treasury Department propped up AIG in the wake of Lehman Brothers Holdings Inc.’s own mid-September bankruptcy filing.

Saving the System
Treasury Secretary Timothy Geithner was head of the New York Fed at the time of the AIG moves. He maintained during Wednesday’s hearing that the New York bank had to buy the insurance contracts, known as credit default swaps, to keep AIG from failing, which would have threatened the financial system.

The hearing before the House Committee on Oversight and Government Reform also focused on what many in Congress believe was the New York Fed’s subsequent attempt to cover up buyout details and who benefited.

By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve.

This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.

look familiar?

the exchange speaks for itself...,

is the imf gonna have to choke a greece?

NYTimes | European leaders are quietly considering whether to come to the aid of their troubled neighbor Greece amid fears that the nation might default on its debts and unleash another round of financial crisis.

Only a month after Dubai was rescued by its neighboring emirate Abu Dhabi, Germany, France and other European powers are discussing whether Greece might need a bailout too.

After a decade of debt-fueled profligacy, Greece is confronting what amounts to a run on the bank. And, despite repeated assurances from Athens, the nation’s strained finances have put already jittery financial markets on edge. On Thursday, the worries stretched all the way to Wall Street, where the stock market sank 1.1 percent.

Some economists worry that Greece’s troubles could have deep and lasting repercussions for Europe. The crisis poses complex challenges for the euro, which Greece adopted in 2001. The currency sank to a six-month low against the dollar and yen on Thursday.

“Greece failing is not an option, and lots of people think that we will have to intervene at some stage,” said one European finance official, who was not permitted to speak publicly on the matter. “It doesn’t have to happen, and we hope it won’t, but it would be better than seeing a default.”

The shape and scale of a bailout package, if any, has yet to be determined, according to officials in several European capitals. Whether the International Monetary Fund might become involved is uncertain. Some European leaders want Europe to fix this problem itself, while others are open to working with the I.M.F.