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Stock markets may have soared after central banks around the world, led by the Fed, got together in a rare coordinated action to provide more dollars to Europe's strained financial sector. But we also got an indication of just how bad things have become. There have been concerns for months that Europe's banks were having difficulty getting dollar financing, which is very important to the operation of banks in France and elsewhere, as financial institutions around the world became nervous about lending money to a sector saddled with large euro zone sovereign debt holdings of dubious quality. The scary thing about that problem is that it could have caused a financial crisis in Europe even without a major new event in the debt crisis (like an Italian default). For central banks to act as they did, the situation must have become extremely severe, or was at least deteriorating badly.
And though that potential danger may have been averted (probably only in the short term), the central bank decision has done nothing to alleviate the underlying sovereign debt crisis in the euro zone. We're about to get some more action on that front as well, however, with yet another summit of European leaders approaching on December 9. The indications are that German Chancellor Angela Merkel and French President Nicolas Sarkozy want to push ahead with some sort of "fiscal union," or at least their vision of one. As I wrote in a recent TIME magazine story, a fiscal union would probably be a real solution to the debt crisis. By coordinating national budgets and centralizing at least some decision making over spending priorities, a fiscal union could start repairing the shattered finances of euro zone countries, provide a backbone of support for weaker members like Italy, and convince investors that Europe will truly do whatever it takes to save the euro. (Read "Is Europe's debt crisis becoming a banking crisis?")
We'll have to wait for the details to get the full picture of what's on the table. But based on the early signs, the version of a fiscal union Merkel & Co. seem to advocate is really just an "austerity union," a way of forcing painful budget cuts, tax hikes and other measures onto euro zone countries through stiffer sanctions and regulations, with very little offered in return. That won't work. The euro can't survive on austerity alone. In fact, austerity, as it is being implemented now, is damaging the euro's prospects. Here's why:
The idea behind the German-backed solution to the debt crisis is to fix the broken countries of the euro zone. That, needless to say, does have to happen. But it can't be the entire focus of the crisis-fighting effort. Yes, some euro zone countries have been given financing (bailouts) to support them during their austerity programs, but now the bigger nations infected by the crisis (Italy and Spain) aren't even being offered that much. Instead, their new Prime Ministers are being placed under more and more pressure to cut, cut, cut, cut -- while the rest of the zone sits back and waits. But as we've witnessed for more than a year, cutting alone won't bolster investor confidence. They simply don't believe that the financial adjustments these countries must make can be achieved in any reasonable period of time. What these countries are being asked to do is reverse years -- in some cases, decades -- of fiscal policy in a matter of months. (France hasn't recorded a budget surplus since 1974.) (Read "Bailouts and Austerity Measures Aren't Working: Is This the Euro's Last Stand?")
Most of all, austerity is killing growth in the euro zone, and without growth, the crisis will be much harder to solve. Just look at some statistics. Spain recently downgraded its 2011 growth estimate by half a percentage point to a mere 0.8%. Portugal's GDP contracted 0.4% in the third quarter from the previous quarter. Greece's third quarter GDP plummeted 5.2% from the previous year -- its best quarterly performance of 2011. The OECD in November forecast that euro zone growth would sink to a pathetic 0.2% in 2012 from 1.6% this year. Without growth, closing deficits and stabilizing debt is much more painful. If GDP is stagnant or contracting, the amount of debt you need to eliminate to bring that crucial government-debt-to-GDP ratio down gets larger, and thus more difficult to achieve. Ditto with budget deficits. So to meet euro zone debt and deficit targets, countries have to cut more and more, further suppressing growth, and moving the target further off yet again. They become like a dog chasing its tail.
Investors know this full well, and that's why they remain wary of the euro zone debt situation even as its political leaders slice away at budgets. So borrowing costs remain lofty, making it harder, once again, for Italy and Spain to meet budget targets, which means they have to cut even more. And the pain inflicted by such severe austerity on populaces already suffering from an economic downturn (Spain's unemployment stands near a staggering 23%) only fuels opposition to reform and ire towards the monetary union. So the sick contradiction facing the euro zone is that austerity is necessary to fix the debt crisis, but at the same time, it also feeds the debt crisis. (Read "How to Know When the Euro Crisis Reaches a Tipping Point.")
How does Europe escape the trap? Austerity has to be balanced with something else to help these countries restore growth while repairing their economies. Yes, structural reforms to free up labor markets and decrease regulation will all help, but not in the short or even medium term. Nouriel Roubini argued in the Financial Times the other day that debt restructuring is the answer, to alleviate the burden on Italy. I'd suggest that the euro zone needs to improve the functioning of the common market by implementing EU-wide incentive programs to get companies in healthier countries, like Germany, to invest in weaker nations and hire the unemployed. Or the proposed fiscal union could be a true fiscal union, more like the United States, in which the center has the ability to tax and thus support member states that are economically struggling.
My sense is that none of the above is actively being considered. It seems to me that the only support being discussed is some form of a bailout -- to find a source of money to provide a financial "shield" for Italy and Spain so they can fund themselves at lower cost while implementing reforms. That may help slow the deterioration of the debt crisis, but it won't necessarily solve the debt problem itself, at least not in any acceptable time frame (as we've seen in Greece). If this is the route Europe takes, the members of the euro zone will have to be prepared to financially support its weaker members for an awfully long time before we see a real improvement in their economic health.
The solution to the debt crisis won't be budget cuts, more taxes, and more rules to force them down the throats of Italians, Spanish and Greeks. Merkel, Sarkozy and their counterparts have to find a broader solution. Otherwise, Europe is facing a race to the bottom.
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Conventional wisdom says that exercise is a key to weight loss ? a no-brainer. But now, Tel Aviv University researchers are revealing that life as a couch potato, stretched out in front of the TV, can actually be "active inactivity" ? and cause you to pack on the pounds.
Such inactivity actually encourages the body to create new fat in fat cells, says Prof. Amit Gefen of TAU's Department of Biomedical Engineering. Along with his Ph.D. student Naama Shoham, Prof. Gefen has shown that preadipocyte cells ? the precursors to fat cells ? turn into fat cells faster and produce even more fat when subject to prolonged periods of "mechanical stretching loads" ? the kind of weight we put on our body tissues when we sit or lie down.
The research, which has been published in the American Journal of Physiology ? Cell Physiology, demonstrates another damaging effect of a modern, sedentary lifestyle, Prof. Gefen notes. "Obesity is more than just an imbalance of calories. Cells themselves are also responsive to their mechanical environment. Fat cells produce more triglycerides, and at a faster rate, when exposed to static stretching."
Stretching the fat
Prof. Gefen, who investigates chronic wounds that plague bed-ridden or wheelchair-bound patients, notes that muscle atrophy is a common side effect of prolonged inactivity. Studying MRI images of the muscle tissue of patients paralyzed by spinal cord injuries, he noticed that, over time, lines of fat cells were invading major muscles in the body. This spurred an investigation into how mechanical load ? the amount of force placed on a particular area occupied by cells ? could be encouraging fat tissue to expand.
In the lab, Prof. Gefen and his fellow researchers stimulated preadipocytes with glucose or insulin to differentiate them into fat cells. Then they placed individual cells in a cell-stretching device, attaching them to a flexible, elastic substrate. The test group of cells were stretched consistently for long periods of time, representing extended periods of sitting or lying down, while a control group of cells was not.
Tracking the cultures over time, the researchers noted the development of lipid droplets in both the test and control groups of cells. However, after just two weeks of consistent stretching, the test group developed significantly more ? and larger ? lipid droplets. By the time the cells reached maturity, the cultures that received mechanical stretching had developed fifty percent more fat than the control culture.
They were, in effect, half-again fatter.
According to Prof. Gefen, this is the first study that looks at fat cells as they develop, taking into account the impact of sustained mechanical loading on cell differentiation. "There are various ways that cells can sense mechanical loading," he explains, which helps them to measure their environment and triggers various chemical processes. "It appears that long periods of static mechanical loading and stretching, due to the weight of the body when sitting or lying, has an impact on increasing lipid production."
Counting more than calories
These findings indicate that we need to take our cells' mechanical environment into account as well as pay attention to calories consumed and burned, believes Prof. Gefen. Although there are extreme cases, such as people confined to wheelchairs or beds due to medical conditions, many of us live a too sedentary lifestyle, spending most of the day behind a desk. Even somebody with healthy diet and exercise habits will be negatively impacted by long periods of inactivity.
Next, Prof. Gefen and his fellow researchers will be investigating how long a period of time a person can sit or lie down without the mechanical load becoming a factor in fat production. But in the meantime, it certainly can't hurt to get up and take an occasional stroll, he suggests.
###
American Friends of Tel Aviv University: http://www.aftau.org
Thanks to American Friends of Tel Aviv University for this article.
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MANCHESTER, N.H. ? You might say Rick Perry courted the youth, but not the whole youth, in a campaign appearance at a New Hampshire college.
Speaking at Saint Anselm on Tuesday, he appealed to students who will be at least 21 before Election Day to vote for him, saying: "Those of you that will be 21 by November the 12th, I ask for your support and your vote."
As for those younger than 21, he merely asked them to work hard on his behalf. Doesn't he want their votes too?
It turns out Perry didn't know or had forgotten that the voting age in America is 18.
Perry made another slip too, referring to "November the 12th" as Election Day. New Hampshire will become the first state in the nation to host a Republican presidential primary on Jan. 10; the general election is scheduled for Nov. 6, 2012.
The flubs caused some whispers in the crowd. He did not address them or take questions from reporters after the event, which was the third of four campaign stops in the state Tuesday.
Campaign spokesman Paul Young says Perry "clearly misspoke."
The Texas governor has become a favorite of late night comedians in recent weeks. During a presidential debate earlier in the month, he couldn't recall a key element of his plan to reform government.
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TOMS RIVER, N.J. ? New Jersey prosecutors have dropped the most serious charges against a man who had been accused of killing a former "American Idol" contestant with his car, agreeing with his lawyer that even though he had confessed, there is no evidence he struck the woman.
Daniel Bark pleaded guilty under a plea agreement Monday to eluding police and drunken driving. Prosecutors dismissed aggravated manslaughter and other charges in the 2009 accident that killed Alexis Cohen of Allentown, Pa. Her profanity-laden rants when she was rejected by the show on two successive seasons were shown repeatedly.
The 25-year-old's body was found on a road in Seaside Heights.
Bark faces probation and nearly a year in jail when he's sentenced. His attorney Michael Nolan told the Asbury Park Press ( http://on.app.com/tjpjiD) there's never been any physical evidence connecting Bark to Cohen's death.
"As we've said all along, there has never been any proof that he did do it," he said. "The sad part is, this girl was killed, and whoever killed that girl is still driving around out there."
Nolan said his client was pressured into confessing to something he didn't do. In court Monday, Bark said he had drunk about six beers at a nightclub before getting into his car and driving early on July 25, 2009. He acknowledged ignoring orders from two bicycle police officers to stop, instead driving away from them. He said he was afraid because of the beers he had consumed, and because he had a marijuana pipe in his car.
Bark acknowledged swerving and nearly striking the police officers before fleeing from them, and driving through several stop signs. He also conceded he was impaired by the beer, though he wouldn't submit to a test to determine his blood-alcohol level when he was pulled over by other police officers.
The suspect denied having anything to do with Cohen's death for the first 40 minutes of his interview with police, but then said he may have hit a woman, and at one point said he did hit her. The investigators continued questioning him for a while before reading him his rights.
A judge threw out that confession because police failed to advise him of his rights, including the right to have an attorney present during questioning.
___
Information from: Asbury Park Press, http://www.app.com
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Continue reading Google offers its own brief history of search (video)
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