Chinese Internet firms have been exploring business opportunities based on big data analytics during the Spring Festival travel rush.

Chinese Internet companies have been exploring business opportunities based on big data analytics during the world's largest human migration.

Baidu, China's top search engine, launched a real-time migration map during the Spring Festival travel rush, which the Ministry of Transport estimates will witness 3.62 billion trips before it ends on Feb. 24.

The "Baidu Migrate" heat map gathers data from smartphones installed with Baidu Maps or other applications using Location Based Service (LBS) platforms, which receive 3.5 billion position requests every day in China, according to Baidu.

By analyzing the mass data, the map depicts the most popular destinations, points of origin and travel routes throughout the country during the Spring Festival.

It shows the trip between Chengdu, capital of southwest China's Sichuan Province, and Beijing has been the most popular travel route, which surprised many Internet users.

Giving the general public such insight on social phenomena is just one of the applications of big data, which refers to collection of enormous sets of data that can not be analyzed using traditional processing. The statistics can also be used by businesses and governments to look at trends and optimize service.

It is hard to put a figure on the estimated value of this emerging market, but online enterprises are eager to harness big data's potential.

Baidu is not the only Internet company in China digging the perceived goldmine. Alipay, the country's largest third-party online payment platform under ecommerce giant Alibaba Group, set up a similar program last month.

Another Alibaba subsidiary, key consumer-to-consumer sales platform Taobao.com, also took a share of the spoils. It released Chinese migration data for the whole of 2013 that was based on analysis of changes to users' default delivery addresses.

POTENTIAL

Nevertheless, it is Baidu's real-time migration map that has really manifested the power and scope of big data analytics, especially for business and social management.

According to the China Internet Network Information Center, the country has about 500 million mobile Internet users, accounting for 81 percent of all its web users as of the end of 2013.

Statistics professor Sun Feng with Tsinghua University said the fact that most Chinese people have mobile phones today makes collecting large and complex data more time-efficient and cost-effective for Internet companies.

As more large-scale data is built up, analyzing it is likely to become more profitable, added big data expert William Huang, who works with a top Chinese firm that he did not wish to be named.

The potential of this market has not gone unnoticed by small Internet enterprises in China.

The owner of one such firm, a man surnamed Yao, told Xinhua he had designed an app on which users can express opinions about popular TV shows. Yao's team can analyze this data and sell the results to interested parties.

"Users expect better experiences now, so we want to know who they are and give them what they need," said Huang.

He explained that after acquiring information about netizens' favorite restaurants, Internet companies could recommend similar places to them through apps or other products and attract restaurants to post adverts.

More opportunity is found in business district management, according to Deng Zhongliang, an expert on LBS at the Beijing University of Post and Telecommunications.

"For example, in a certain business district, if the migration map shows it is crowded in some shopping malls and empty in others, we could optimize resources allocation based on this data analysis," said Deng.

According to Taobao.com, people's online footprints could mirror their movements in the real world.

Its latest data showed that among tens of millions of Chinese migrant workers using Taobao, the growth in those moving to Beijing slowed by two-thirds year on year in 2013.

Meanwhile, last year witnessed nearly 1.53 million Taobao users moving to south China's Guangdong, the most attractive province for migrant workers.

"This data could help government decision making," Deng noted. "Big data analytics also benefits megacities like Beijing in population management, material supply and traffic congestion monitoring."

RISK

But Huang pointed out there are privacy concerns to big data's use.

"Users should have to opt into location services first before their information can be collected. But many worry their private information will be sold on by irresponsible enterprises," he said.

Baidu's response to such criticism is that the big data it collects does not correspond to individuals' true identities. In other words, such systems concentrate on group trends rather than personal behavior, so they will not threaten people's privacy.

Easing privacy concerns nevertheless requires improved laws and regulations as well as self-discipline among enterprises, said Deng.

Source; Xinhua

Xi's cross-Strait speech shows courage to break ground of political issues

Xi Jinping's recent speech on cross-Strait relations showed the courage and commitment to face up to political differences, said the mainland's Taiwan affairs chief here Friday.

When meeting visiting Kuomintang Honorary Chairman Lien Chan in Beijing on Tuesday, Xi, general secretary of the Communist Party of China (CPC) Central Committee, suggested that the two sides talk about political differences on an equal basis under the One-China principle.

Cross-Strait relations have moved into uncharted waters, said Zhang Zhijun, director of the State Council Taiwan Affairs Office, in an interview with Xinhua.

"There will be more difficult problems. Compared with other issues, political differences between the two sides are much harder but can no longer be put aside," Zhang said.

The two sides of the Taiwan Strait will need greater courage and confidence to handle political issues and push the relations further, he said.

Last October, at a meeting with Vincent Siew, honorary chairman of the Taiwan-based Cross-Straits Common Market Foundation, ahead of the 21st informal economic leaders' meeting of the Asia-Pacific Economic Cooperation (APEC) in Bali of Indonesia, Xi said the two sides will have to settle political disputes step by step, instead of delaying it forever.

"Xi showed the courage and sense of responsibility as a statesman," Zhang said.

The Chinese mainland and Taiwan made a breakthrough last week as their chiefs of cross-Strait affairs met formally for the first time since 1949 in Nanjing, capital of east China's Jiangsu Province. Zhang attributed the meeting to a proposal from Xi.

Since 2008 the two sides have improved their relations to an unprecedented degree, particularly in terms of political mutual trust, Zhang said.

"However, such trust is not solid enough and shaken from time to time," he said, adding that this is why Xi stressed adhering to the 1992 Consensus, opposing "Taiwan independence", and fostering the common understanding of One China.

In his speech, Xi showed an open attitude towards what Taiwan people think of and want, as well as the sincerity to work through the historic problems with them, Zhang said.

The major point of his speech is that the two sides of the Strait are family and the mainland will treat Taiwan compatriots as their blood, no matter where they are originated and which ethnic groups they belong to, Zhang said.

Xinhua: Mishandling Taiwan issues won't do Japan any good

 If a government claims to recognize you as the sole legal government of a country, but at the same time allows some of its lawmakers to institute a relationship act with part of your territory, you have good reason to feel cheated and ask why.

The attempt by 70 Japanese lawmakers of the governing Liberal Democratic Party to institute a so-called Japanese version of the Taiwan Relation Act is nothing short of a sheer and senseless provocation, which will further damage Japan's reputation and the stability of the region.

In fact, the 1972 Sino-Japanese Joint Communique, a cornerstone of the China-Japan relationship, states clearly that the Japanese government fully understands and respects the Chinese government's position on Taiwan as an inalienable part of the territory of China.

Let's make it clear: the Taiwan issue concerns China's core interests. It also concerns the political basis of China-Japan relations in handling Japan-Taiwan relations.

A simple assumption could help these lawmakers better understand the bitter irony behind the harebrained act: if lawmakers of a country with diplomatic ties with Japan try to make a relations act with Okinawa, what they will do? Will they also hold it as a challenge to Japan's sovereignty and a diplomatic fraud? The answer would probably be positive.

Meanwhile, given the fact that the lawmakers are led by Nobuo Kishi, senior Vice Foreign Minister and Prime Minister Shinzo Abe's younger brother, we have reason to believe that this is another step taken by Abe's nationalistic cabinet to infuriate China for cheap political gain.

By denying and whitewashing the history of invasion, Abe and his cabinet have launched a political campaign to deviate Japan rightward at the expense of not just relations with neighbors, but regional peace and stability.

What lies behind the campaign is simple -- Abe needs to appeal to right-wing conservative voters so he can remain in the political arena. By pandering to the increasingly radical right-wing elements in Japanese politics, he is chasing his own interests at the expense of the whole nation, leading Japan down a dangerous path of provocation and isolation.

The provocative attempt of these lawmakers further ruins Abe's efforts to present Japan as a responsible and reliable partner in the international community, bringing nothing but doubt and suspicion to an already-volatile East Asia.

If Japan really wants to repair its relations with China, as claimed by Abe, it should immediately stop challenging China's bottom line. After all, leveraging Taiwan cards is simply playing with fire.

China: Former Party official jailed for taking bribes

A former Party official of a city in central China's Henan Province has been sentenced to 14 years in prison for taking bribes, a court statement said on Sunday.

Zhang Yinghuan, 49, former member of the Standing Committee of the Sanmenxia City Committee of the Communist Party of China (CPC), was convicted of taking huge sums of bribes, according to the statement issued by Xuchang Intermediate People's Court.

Zhang accepted bribes of over 7 million yuan (about 1.15 million U.S. dollars), including 5.85 million yuan and 30,000 U.S. dollars in cash, as well as a property worth 1.45 million yuan, when he served as deputy secretary of the CPC's Hubin District Committee in Sanmenxia, secretary of the CPC's Yima City Committee and deputy mayor of Sanmenxia, the statement said.

The court handed down a 14-year jail term to Zhang. Most of the bribes have been turned in by Zhang's family members, according to the statement.

Zhang said after the ruling that he would not appeal.

Source: Xinhua

Xinhua In-Depth: China Focus: What is this "middle way" the Dalai Lama preaches?

A bylined opinion article was published on Saturday to expose the true nature of the "middle way" approach preached by the Dalai Lama.

Following is the translation of the article:

What is this "middle way" the by Dalai Lama preaches?

by Qi Xuan

According to news from the White House, U.S. President Barack Obama met with the Dalai Lama on Friday and expressed his support for the high monk's "middle way" approach.

What on earth is this "middle way"?

Since the 1980s, the Dalai clique has failed in their pursuit of "Tibet independence" by extremist means, under the backdrop of significant changes of international situation and the reform and opening up in China.

To get themselves out of trouble, the Dalai clique changed their approach, playing the "middle way" trump card and attempting to find a new way for the so-called "Tibet cause."

The Dalai clique claim the "middle way" is within the framework of China's constitution, and nothing more than "a high degree of autonomy" over a proposed "Greater Tibet."

Though the "middle way" appears to respect China's sovereignty and territorial integrity, and does not specifically seek "Tibet independence", it is at odds with China's constitution and state system in every conceivable way. It is nothing but smoke and mirrors, camouflage and deceit.

Firstly, "Middle-way" rhetoric has never recognized Tibet as a part of China. The "middle way" calls Tibet an "occupied state". The "middle way" is nothing but a historical and legal means of peddling "Tibet independence" when "conditions are ripe".

Secondly, the rhetoric proposes a "Greater Tibet", -- a region extending to Tibetan areas in the provinces of Qinghai, Gansu, Sichuan and Yunnan -- or roughly one fourth of China.

Thirdly, the "middle way" demands "a high degree of autonomy", leaving all affairs but military and diplomacy under the control of the Dalai Lama. This amounts to the overthrow of China's state system on the Qinghai-Tibet Plateau.

Fourthly, the "middle way" requires the Chinese government to pull out the People's Liberation Army from "Greater Tibet" and turn the area into an "international peace zone."

Fifthly, the "middle way" will drive other ethnic groups out of "Greater Tibet.

The "middle way" means establishing "a state within a state" which rejects the leadership of the Communist Party of China (CPC). It does not adopt socialist system, does not follow national laws and policies, does not allow the presence of the national military, and prevents other "nationalities" from entering.

The "middle way" is nothing more than a political word game to realize "Tibet independence" step by step.

Since the founding of the People's Republic of China, Tibet -- after important developmental stages including peaceful liberation, democratic reform, establishment of an autonomous region, reform and opening up -- has been on a development track in line with the development of modern China and the world. After more than half century of development, Tibet today, compared to the 1950s, has undergone profound changes.

The Tibetan people have gained freedom, equality and dignity. They enjoy the fruits of modern civilization and strive for a new socialist Tibet featuring unity, democracy, prosperity, civilization and harmony.

Over 60 years, in the embrace of the big family of the Chinese nation and with commitment to the socialist path, people of all ethnic groups in Tibet have become masters of the fate of their society and themselves. Tibet has turned from poverty and backwardness to prosperity and civilization.

Only by persisting with the leadership of the CPC, the socialist system and regional ethnic autonomy, can the people remain masters of their land, that all rights of all the people can be realized, and the fundamental interests of Tibetans be defended and developed.

The monk's "middle way" contradicts history and reality. It is against the will and demands of the Chinese people of all ethnic groups including Tibetans. The approach is a dead end.

Relevant country should be able to tell right from wrong and should not make false judgements and bad choices. It should do more deeds that truly benefit all Chinese people, including people in Tibet.

Source: Xinhua

ICBC's Singapore branch makes loan to firms in SH FTZ

The Singapore branch of the Industrial and Commercial Bank of China, or ICBC, says it has made cross-border RMB loans to two state-owned companies in the Shanghai Free Trade Zone.

Thursday’s report came shortly after China’s central bank cleared the way for cross-border RMB transactions. 100 million yuan or about 16 million US dollars was lent to a subsidiary of the Shanghai Baosteel Group. 70 million yuan went to a Sinopharm Group distribution center.

The funds were transferred immediately through ICBC Singapore clearing platform. China’s central bank gave the green light to cross-border RMB transactions on Thursday, but restricted their use to the Shanghai free-trade-zone.

Source: CCTV

China: PBOC issues 2014 loan focus on real economy, agriculture

China’s central bank unveiled its 2014 working focus on bank loans Friday, emphasizing support for the real economy and agriculture.

One of the top goals for China’s banks is to improve financial services in rural areas. That includes experimenting with the usage of farm land as loan collateral. Another key focus is to offer better services to all sectors involved in urbanization, including construction and migration.

China’s central bank is also asking the country’s financial institutions to help promote industrial integration by issuing green loans to sectors such as energy conservation, while reducing loans to over-producing divisions.

Source: CCTV

China: PBOC issues new measures to lift farming sector

The People’s Bank of China has issued new guidelines that urge banks to grant longer term loans at lower interest rates to family farms.

The PBOC wants banks to increase lending support to the agriculture sector, mainly family farms, and streamline their loan approval procedures.

The PBOC also is calling for favorable terms for agriculture loans that include below-average lending rates with maturities of up to 10 years for longer-cultivation-cycle crops.

The PBOC says each family farm is entitled to a loan of as much as 10 million yuan, or about 1.64 million U.S. dollars.

Source: CCTV

London in talks to establish RMB clearance bank

The British and Chinese governments are in talks to establish a clearing bank in London for the RMB.

The move would put London in a leading position to offer yuan trade business in Europe. Hong Kong now is the largest yuan offshore hub and more than 80 percent of yuan trade settlement transactions are handled there. London presently relies mainly on Hong Kong’s offshore yuan infrastructure to obtain yuan liquidity and clearing services. The UK signed a 200 billion yuan three-year bilateral currency swap deal with China last year, and later was further granted an 80 billion yuan quota for a yearly investment plan.

Source:  CCTV

G20 summit had 'excellent spirit', says IMF chief Christine Lagarde

Christine Lagarde, the chief of the International Monetary Fund, says the Sydney meeting of the G20 finance ministers and central bank governors had an ''excellent spirit'' of global co-operation.

There were predictions of a rift between developing economies and advanced nations over the winding back of stimulatory economic policies in the United States and Europe. But Ms Lagarde said the ''difficult debates'' were not forthcoming.

She did warn, however, of the likelihood of global financial instability in future ''because monetary policies will not change as they will have to change without a degree of volatility.''

Ms Lagarde described Australia's presidency of the G20 as ''action-oriented'' following the two-day meeting in which members agreed to boost global growth by 2 per cent above the IMF's current projected levels over the next five years.

Source: The Sydney Morning Herald

WSJ: Russia Stung By Ally Yanukovych's Defeat in Ukraine

               The Wall Street Journal reports,"the dramatic,collapse of the authority of President Viktor Yanukovych in Ukraine looks like a major reversal for the Kremlin, pulling Russia's southern neighbor toward Europe just weeks after it appeared Moscow had succeeded in drawing Kiev back into its embrace".

"This is a major defeat," said a senior Kremlin adviser, adding that the events of the last 24 hours bitterly remind Russian officials of the 2004 Orange Revolution, when Mr. Yanukovych saw his fraud-tainted election victory overturned after massive street protests brought a pro-western government to power".

 "We made the same mistakes again" this time, said the Kremlin adviser, who spoke on condition of anonymity. "For us, the conclusion is that the West succeeded in engineering a coup d'état."

Just what Russia's reaction to this apparent setback would be wasn't immediately clear. Western officials seemed to be going out of their way not to provoke Moscow. Some Kremlin aides in recent weeks had suggested Moscow could intervene to protect pro-Russian regions if Ukraine were to slide into civil war, but there is been no indication of high-level Kremlin support for such a move.

A pro-European government in Kiev, however, could find itself under heavy economic pressure from the Russians, who are a major fuel supplier and trade partner. "They have a lot of economic levers they can pull," said Steven Pifer, a former U.S. ambassador to Kiev.

Russian officials fumed publicly on Saturday, as news of the dramatic reversal in Kiev spilled out, and the Ukrainian parliament, which had swung behind the opposition, voted to remove Mr. Yanukovych from office and call new elections for May.

Even Mr. Yanukovych's political allies voted for the measures, as government authority melted away on the streets and protesters took over. Mr. Yanukovych left the capital for his political heartland in the east of the country and denounced the day's events as a "coup d'état," but he seemed powerless to stop them.

By evening, the political nemesis Mr. Yanukovych had jailed—opposition leader and former Prime Minister Yulia Tymoshenko —had been released from prison and was cheered by thousands of demonstrators on Kiev's main square.

Russian Foreign Minister Sergei Lavrov worked the phones with his European and U.S. counterparts, according to statements from his ministry, telling them that "illegal extremist groups" had taken control over Kiev. He called on his partners to pressure the opposition in Ukraine to return to the terms of the European-brokered political compromise signed on Friday, which called for Mr. Yanukovych to remain in office until new presidential elections late in the year. But western capitals seemed unsympathetic, moving instead to work with the new opposition-led government.

As late as on Thursday, when bloody fighting between police and demonstrators in Kiev had riveted international attention, Russian Prime Minister Dmitry Medvedev warned Ukraine's government against behaving "like a doormat that people wipe their feet on."

Foreign Minister Lavrov blasted the EU for calling on Mr. Yanukovych to agree to early elections. But that is just what Mr. Yanukovych agreed to in Friday's deal, along with constitutional changes that would reduce presidential powers in favor of the parliament. He also agreed to the formation of a new coalition government that would likely to be led by his pro-European opponents.

But protesters proved unwilling to wait for new elections and Mr. Yanukovych fled the capital late on Friday.

Alexei Pushkov, chairman of the International Affairs Committee in Russia's parliament, on Friday called the situation "an ideal scenario for an Orange Revolution." Hours earlier, it had said: "The West is giving Yanukovych a final push. It's not just a matter of Ukraine on its own. The ultimate goal, if you remove all the chaff, is to bring NATO closer to the borders of Russia."

On Saturday, Mr. Pushkov's Twitter feed noted that Mr. Yanukovych had fled the capital and protesters were roaming through his unguarded residence outside the capital. "A pathetic end for a president," it said.

Photography:Paracas,Ica, Peru.

Why hasn’t Japan’s massive government debt wreaked havoc (yet)?

The potential sovereign debt crisis in Japan looks even grimmer than those in the Eurozone economies if one looks only at the gross general government debt-to-GDP ratio. According to the OECD, this ratio ranged from 90 to 166% in some developed economies in 2012 (“only” 166% in Greece, 140% in Italy, 139% in Portugal, 123% in Ireland, and 91% in Spain—collectively referred to as the PIIGS economies) but was a full 219% in Japan in the same year. Thus, Japan’s gross general government debt-to-GDP ratio is more than twice the OECD-wide average (109 percent) and by far the highest in the developed world. Moreover, the OECD projects that Japan’s gross general government debt-to-GDP ratio will increase even further to 231% in 2014.

What makes Japan different?

Why has Japan been able to avoid the fiscal crises of the magnitude faced by the PIIGS economies even though her gross general government debt-to-GDP ratio is much higher? What is different about Japan? The most commonly given answer is that domestic saving is much higher (relative to domestic investment) and home bias is much stronger in Japan, as a result of which a much higher proportion of her massive government debt could be absorbed domestically without having to rely on foreign investors.

However, Reinhart and Rogoff (2008) have argued that domestic sovereign debt is just as important as external sovereign debt and that it is the total amount of sovereign debt that is of paramount importance. Why then has Japan’s massive government debt not wreaked havoc – at least not yet? This column tries to answer to this question.

Trends over time in the share of foreign holdings of Japanese government securities

Horioka, Nomoto, and Terada-Hagiwara (2013) analyse trends over time in holdings of Japanese government securities by sector and find that Japanese government securities were held primarily by domestic savers until recently. The reason is that robust domestic saving, especially household saving (and, in more recent years, corporate saving), combined with strong home bias, made it possible for domestic savers to absorb most of the government debt. Direct holdings of government securities by households remained relatively low, but household savings in the form of bank and postal deposits, insurance policies, and pension funds were funnelled into government securities through government financial institutions, private banks, and insurance companies. As a result, the share of foreign holdings of Japanese government securities was at most 11% until 2006.
Starting in 2007, however, the share of foreign holdings of short-term Japanese government securities skyrocketed to as high as 30% although the share of foreign holdings of medium- and long-term Japanese government securities remained below 7%.

Why the share of foreign holdings of short-term Japanese government securities skyrocketed starting in 2007

In our recent papers we perform an analysis of why the share of foreign holdings of short-term Japanese government securities skyrocketed starting in 2007. We find that it can largely be explained by the fact that:

• Their yields increased relative to the yields on alternative government securities as yields elsewhere – in the US and Eurozone in particular – fell sharply in 2008-09 due to monetary easing in response to the Lehman crisis; and
• The gap between risk levels on Japanese government securities and those on alternative government securities widened dramatically from late 2008 until early 2010 not because risk levels in Japan declined but because risk levels elsewhere increased sharply due to the advent of the Eurozone crisis.

Both factors caused risk-adjusted hedged returns on government securities in the US and the Eurozone to converge to Japanese levels in 2008-09, and remain below Japanese levels thereafter as well in some cases. This induced foreign investors to (at least temporarily) shift their portfolios from government securities of other economies and regions to Japanese government securities and caused foreign holdings of short-term Japanese government securities to increase sharply.

Future prospects

The surge in foreign holdings of Japanese government securities will not continue indefinitely because risk in the rest of the world will eventually decline (in fact, risk levels on government securities in the US and the Eurozone had already declined sharply by early 2010). This is because investors’ appetite for risk will eventually return as the Eurozone crisis subsides, and because bond markets are developing in emerging Asia and creating increasing competition for Japanese bonds (especially since they offer higher yields and the possibility of currency appreciation as their economies grow further). However, there is a possibility that there will be a revival of yen carry trade utilizing the interest rate gap between the US and Japan, as observed around 2007, and this may have the effect of stabilizing foreign holdings of short-term Japanese government securities at a high level; although as of this writing, the share of foreign holdings of short-term Japanese government securities has fallen somewhat since peaking at 30% in September 2012, presumably for all of the aforementioned reasons, and was only 28% in September 2013.

The current situation is even more tenuous than appears at first blush. The increasing share of foreign holdings and the shortening of maturities on Japanese government securities – especially on foreign holdings – increase the difficulty of rollover and the risk of sudden reversals in trends, as we are now observing. Additionally, the household and private saving rates in Japan can be expected to decline even further due to the aging population, meaning that domestic banks and insurance companies will not continue to have sufficient bank and postal deposits, insurance policies, and pension funds from the household sector to invest in Japanese government securities.

Policy implications

The policy implication is that, although Japan was able to ‘buy time’ by inducing foreign investors to invest temporarily in Japanese government securities, the Japanese government faces increasing pressures to reduce its massive government debt-to-GDP ratio. One way of doing so is to increase tax revenues (for example, by raising the consumption tax, which is very low by international standards, as the Japanese government is in the process of doing) and/or by cutting government expenditures (for example, by reforming the public pension system and other social safety nets). The other way of doing so is by stimulating economic growth, which Prime Minister Shinzo Abe is trying to do using the three arrows of ‘Abenomics’ (massive fiscal stimulus, more aggressive monetary easing, and structural reforms to boost Japan’s competitiveness). Prime Minister Abe is trying to use both ways simultaneously, but it is a Herculean task to skilfully combine all of the policy levers at his disposal since the two ways are often conflicting (for example, raising the consumption tax will reduce the government debt but may at the same time put a damper on economic growth).

The answer

To answer the question in the title of this column, Japan’s massive government debt has not wreaked havoc in the past because of robust domestic saving, especially household saving (and, in more recent years, corporate saving) and a temporary inflow of foreign capital caused by the Global Financial Crisis, but it may wreak havoc in the future as both of these factors become less applicable unless the government debt-to-GDP ratio can be brought under control quickly.

Source: Vox, Charles Yuji Horioka, Takaaki Nomoto, Akiko Terada-Hagiwara, 21 January 2014

References:Horioka, Charles Yuji, Takaaki Nomoto, and Akiko Terada-Hagiwara (2013), “Why Has Japan’s Massive Government Debt Not Wreaked Havoc (Yet)?” NBER Working Paper 19596, National Bureau of Economic Research, Inc., Cambridge, Massachusetts, USA.

Oldest known star in the Universe discovered

A team of astronomers at The Australian National University (ANU) working on a five-year project to produce the first comprehensive digital survey of the southern sky has discovered the oldest known star in the Universe. Just a 6,000 light year astronomical hop, skip and jump from Earth, the ancient star formed shortly after the Big Bang 13.7 billion years ago.

Similar to the Sloan Digital Sky Survey (SDSS), which is mapping the Northern Hemisphere sky, the SkyMapper Southern Sky Survey is casting its telescopic eye on the southern sky. In the first year of the five-year project, the ANU SkyMapper telescope at the Siding Spring Observatory about 500 km (310 miles) north west of Sydney has photographed some 60 million stars.

As well as creating a comprehensive census of the stars in the southern sky, SkyMapper is also tasked with mapping dark matter and uncovering the first quasars and stars to form after the birth of the Universe. The SkyMapper telescope is able to find such ancient stars through its ability to detect, through their color, stars with low iron.

"The stars we are finding number one in a million," said team member Professor Mike Bessell, who worked with Dr Stefan Keller of the ANU Research School of Astronomy and Astrophysics on the research.

he researchers say the discovery will provide a better idea of what the Universe was like in its infancy by allowing the study of the chemistry of the first stars. According to the team, the composition of the newly-discovered star shows it formed in the wake of a primordial star, which had a mass 60 times that of our Sun.

"To make a star like our Sun, you take the basic ingredients of hydrogen and helium from the Big Bang and add an enormous amount of iron – the equivalent of about 1,000 times the Earth’s mass,” said Dr Keller. "To make this ancient star, you need no more than an Australia-sized asteroid of iron and lots of carbon. It’s a very different recipe that tells us a lot about the nature of the first stars and how they died."

Although it was previously believed that the death of primordial stars involved extremely violent explosions that spread iron over huge volumes of space, the ancient star shows signs of lighter elements, such as carbon and magnesium, but no sign of iron.

"This indicates the primordial star’s supernova explosion was of surprisingly low energy," said Dr Keller. "Although sufficient to disintegrate the primordial star, almost all of the heavy elements such as iron, were consumed by a black hole that formed at the heart of the explosion."

The ancient star's discovery was confirmed using the Magellan telescope in Chile, and a paper detailing the discovery is published in the journal Nature. Data collected by the survey, which is funded by the Australia Research Council, will also be made freely available on the internet.

Source: Australian Natuional Univeristy

Fed’s Fisher Continues to Support Tapering of Bond Purchases

                 The Wall Street Journal reports, "Federal Reserve Bank of Dallas President Richard Fisher reiterated his support Friday for the central bank’s effort to wind down its bond-buying stimulus program".

“One is hard pressed to argue that there is much efficacy derived from additional expansion of the Fed’s balance sheet,” Mr. Fisher said in the text of a speech prepared for delivery in Austin, Texas. “This is why I’ve been such a strong proponent of dialing back our large-scale asset purchases and will continue advocating that we do so.”

Late last month, the Fed cut the pace of monthly bond buying to $65 billion from $75 billion. It is expected to continue to cut the pace of purchases and end the buying later this year. Mr. Fisher has long opposed the bond-buying program.

“There is abundant liquidity outside the banking system.” “We don’t need to add more to it” at a time where the amount of cash in the system outstrips demand in the form of loans. “I’ll continue to advocate for ending, as soon as practical, the large-scale asset purchases,” he said, although he added the pace of the wind-down would depend on the economy.

Mr. Fisher again blamed much of the current troubles on Congress.

“It is my firm belief that the fault in our economy lies not in monetary policy but in a reckless and feckless federal government that simply cannot get its fiscal and regulatory policy geared so as to encourage business to take the copious amount of money we at the Fed have created and put it to work creating jobs and growing our economy,” Mr. Fisher said. He added, “fiscal policy is not only ‘not an ally of U.S. growth,’ it is its enemy.”

Brazil’s Finance Minister Mantega Faces Skepticism In Bid To Restore Confidence

         The Wall Street Journal reports, "Finance Minister Guido Mantega on Friday reinforced his message that the government wants to rein in spending to help tame inflation. Prices are rising at a pace that is a full percentage point above the official target of 4.5% and in response the central bank has raised its key rate to 10.5% per year. That, however, acts as a further drag on economic growth, which has been unusually weak for the last three years''.

The government has set a target for savings next year of 99 billion reais, compared with 91 billion reais in 2013. That figure is equivalent to 1.9% of projected gross domestic product. A primary surplus is seen by analysts as an indicator of a government’s willingness to live within its means.

But Mr. Mantega has become known for providing rosy forecasts at the beginning of the year. By the end of the year, the government often has to resort to confusing scrambles to meet targets, sometimes by engaging in what economists describe as accounting tricks–albeit entirely legal. That has heavily eroded confidence in the minister.

“The announcement wasn’t enough to restore credibility,” João Augusto de Castro Neves, an analyst with the Eurasia Group consulting firm in Washington, said in an interview. Still, Mr. Neves acknowledged that the goal for 2014 was more realistic and that there had been “some steps towards more transparency.”

Some economists believe the government is simply providing some cover for the central bank to be able to slow or even halt its interest-rate hikes. The economy may have dipped into a technical recession in the second half of 2013, and the outlook for 2014 is growth of around 1.5%, according to current market estimates.

One of the biggest threats to the fiscal target is the possibility that the government may have to provide billions of reais in subsidies for the electric power industry. Severe droughts have hampered Brazil’s production of cheap hydroelectric power, meaning power companies may have to resort to more expensive natural-gas-fired thermoelectric power.

Rather than pass the costs on directly to the consumer, the government last year opted to provide 9 billion reais in subsidies. This year, the figure could be even higher, economists said.

Mr. Mantega on Friday acknowledged the possibility of nasty surprises. He said more spending cuts and more sources of revenue could be found if needed. He didn’t even rule out tax increases.

“The government is prepared to cover additional spending,” Mr. Mantega said

G-20 Leaders Back a Plan to Spur Global Growth

             The Wall Street Journal reports: ''finance leaders from the world's biggest economies called for support from central banks and private-sector infrastructure spending to help spur growth, reverting to the global economy's playbook of recent years in an effort to safeguard a fragile recovery.

Group of 20 officials ended their summit this weekend saying they would look to boost world growth by more than $2 trillion over the next few years under a strategy crafted by the International Monetary Fund.

Under the G-20 plan, advanced economies would continue with their easy-money policies while emerging markets would seek to restructure their economies and tame inflation. In addition, governments everywhere would be expected to channel private-sector finance into new infrastructure projects.

The IMF, which expects growth of 3.7% this year and 3.9% in 2015, says its plan would add half a percentage point to global growth annually over the coming four years. The finer points will be hammered out in the run-up to the G-20 leaders' November summit.

The G-20's final communiqué also highlights agreement among central banks to communicate their stimulus-exit strategies clearly and in a timely fashion. The measure was adopted following a selloff in emerging-market stocks, bonds and currencies after the Federal Reserve signaled it would begin winding down its quantitative-easing program. Another selloff was triggered by several countries, including Ukraine andTurkey, that experienced political upheavals.

The communiqué warned that the global economy faces a period of potential "excessive volatility" harmful to growth as countries adjust their economic policies. "We do not want any surprises," Joe Hockey, Australia's treasurer and G-20 host, told journalists at the conclusion of the summit on Sunday.

During the G-20 meetings, some developing countries had complained the Fed was moving too fast in withdrawing stimulus, but the U.S. also pushed back. "Emerging markets need to take steps on their own to put their fiscal house in order, to put structural reforms in place," Treasury Secretary Jacob Lew said on Friday. He added that governments had to move ahead with unpopular reforms even though they might fear inciting social unrest''.

Mark Zuckerberg goes to Barcelona to make mobile friends

If confirmation was needed that we live in the age of the mobile phone, then the presence of Facebook founder Mark Zuckerberg at the Mobile World Congress gathering next week should underline the ascendancy of the handset. Zuckerberg will deliver the keynote address on Monday, fresh from announcing a $19bn (£11.4bn) deal to buy WhatsApp, the hottest mobile texting app in town.

The presence of this social media superstar at one of the less glamorous trade shows is proof that mobile is now the priority for technology giants such as Facebook and Google. Facebook has shifted its focus from laptops and PCs as it strives to catch up with consumers' changing technological tastes. As a result its mobile site, also accessible via tablets, is now used by 945 million of its 1.23 billion monthly active users.

Facebook will attend the MWC event with every big name in technology, including every global mobile operator and handset maker. In all, 75,000 delegates descend on Barcelona to showcase the next wave of smartphones and gadgets.

Facebook has obviously seen mobile as the key to its future for a while. Its purchase of WhatsApp last week, which added another 450 million monthly active users, is the biggest in a long line of acquisitions that includes Instagram, the mobile-based photosharing site.

The strategic shift to mobile has been driven partly by Facebook users' embrace of mobile technology, but also by the subsequent impact on Facebook's primary revenue source, advertising. As more people migrate to using Facebook on tablets or phones, the number of eyeballs using the desktop version of Facebook shrinks. Facebook, and its advertisers, have to go where the users are.

Beyond existing users in developed countries such as the UK and the US, Facebook also sees mobile as a way of engaging with people in the developing world. Already, around 81% of Facebook's 757 million daily active users are based outside the US and Canada. In the markets where Facebook is not already reaching saturation point, it is the mobile phone that is often the primary computing device – especially in developing nations, where mobile phone coverage far outstrips traditional landline and broadband infrastructure.

The International Telecommunication Union (ITU) estimates that there are at least 6.8 billion mobile subscribers globally, while data from Portio Research suggests that that figure will rise to 8.5 billion by the end of 2016. Of those mobile subscribers, 5.2 billion are based in the developing world, with mobile data available to 1.2 billion of those users, according to data from ITU. By contrast only 357m fixed broadband connections exist in the developing world.

Source: theguardian

U.K.: The Union is crucial for North Sea oil and gas, says David Cameron

    David Cameron,has opened a new front in the increasingly fraught battle to keep Scotland in the UK by warning that the future of the North Sea oiland gas industries depends on the combined strength of the union.

As the prime minister prepared to take almost his entire cabinet for a meeting in Aberdeen on Monday, he said it was the UK government acting together that could best guarantee the long-term job prospects and economic benefits of production and exploration.

Cameron, who is expected to make a series of announcements about the oil and gas industries on his visit, said that he would set out "how the UK government can maximise the benefit of North Sea oil and gas to the UK economy for decades into the future, giving a vital boost to local communities and families across Scotland".

He added: "It is the strength of the UK's broad-based economy which can make the difference and ensure we can invest in our energy for the long-term future. I promise we will continue to use the UK's broad shoulders to invest in this vital industry, so we can attract businesses, create jobs, develop new skills in our young people and ensure we can compete in the global race."

The future of North Sea oil and gas is a central battleground in the debate over independence. Salmond has put North Sea oil at the centre of his economic case to split from the UK, telling Scots the remaining reserves would be worth £300,000 for every one of them.

The Treasury in London has countered the SNP leader's claim that reserves left in the North Sea are worth £1.3 trillion, saying this is the most optimistic assessment of the total wholesale value, not the tax revenue that would accrue to the country.

The gas and oil industries are said to employ 100,000 people off and onshore.

Government sources said Cameron believed that, with gas and oil exploration moving farther offshore and becoming more complex, the kind of tax regime and financial support that a UK government could offer, with Scotland inside the union, was greater than Scotland could offer alone.

During his visit Cameron is expected to give his backing to a new Scottish-based oil and gas regulator which experts say will co-ordinate and oversee collaboration between investors and could boost the industry by £200bn over the next 20 years.

Unionists are also trying to turn the screw on Salmond by warning that his date for declaring independence in the event of a yes vote – 24 March 2016 – is now unrealisable, partly because Scotland will be unable to negotiate separate membership of the European Union by that date.

"A worrying example of the SNP's naivety is its argument about an independent Scotland and the EU. The SNP's claim is that it will negotiate its way into the EU on the same terms as the UK within 18 months. This claim is not feasible, especially in the context of seeing how long it has taken other countries joining from outside, such as Croatia or Cyprus, which both took over a decade. No one has done it in less than two years. The timescale on the EU alone is beyond optimistic."

Source: theguardian

Ukraine crisis: MPs vote in Oleksandr Turchynov as interim president

Following a day of extraordinary drama, Ukraine woke up to a new and uncertain power configuration on Sunday, with the whereabouts of the impeached president, Viktor Yanukovych, still unclear and Yulia Tymoshenko, the former prime minister, already lining up a shot at the presidency.

The Ukrainian parliament held a special session the day after Yanukovych's dismissal to vote its speaker, Oleksandr Turchynov, as interim president. Turchynov, a former head of Ukraine's state security service, is a close confidant of Tymoshenko and deputy leader of her Fatherland party. He will remain in the role until elections on 25 May.

Tymoshenko, who may be eyeing a run for the presidency she last contested in 2010, said in comments on her website that she did not wish to be interim prime minister. "I am grateful for the respect this shows, but I ask not to be considered for this post," she wrote, following her supporters in parliament saying she was one of three favourites to head a government of national unity.

While an interim prime minister is yet to be appointed, MPs meeting in the emergency session set about dismantling Yanukovych's power strucutre.

His foreign minister, Leonid Kozhara, who defended his Yanukovych's swerve away from the European Union in the face of an outcry in the west, was one of the first to go, followed by education minister Dmitry Tabachnik, an unpopular figure accused by many of bringing a pro-Russia interpretation of Ukrainian history to classrooms.

Police and security chiefs addressing parliament announced orders for the detention of Yanukovych's tax minister Oleksander Klimenko - a particularly close ally - and his prosecutor-general, Viktor Pshonka.

Yanukovych, however, was still claiming to be president as of Saturday evening, although those willing to stand by him diminished by the hour as his aides fled Ukraine and the president himself was accused by border officials of a failed attempt to fly out of the country.

The president fled the capital in the early hours of Sunday, and later in the day parliament voted to strip him of his powers, and impeach him. He appeared on television from an undisclosed location on Saturday evening, likening the actions of his opponents to those of the Nazis and saying he would battle to stay in power. However, the army said it would not get involved, and police in key eastern areas said they were "with the people".

In eastern Ukraine and Crimea there was fury at events in Kiev, and all eyes will now be on Russia, where the foreign minister, Sergei Lavrov, labelled the opposition "rampaging hooligans" and called on Europe to rein them in.

There are fears that, with Yanukovych losing control of the west of the country and Kiev, Russia may attempt to promote separatist movements in Crimea, which is largely ethnically Russian. Cities in the region were planning pro-Russian rallies on Sunday.

William Hague, the foreign secretary, said that the UK and its European Union allies would support a new government "as and when it is formed" and urged politicians in Ukraine to work together. He warned Russia against intervening in Ukraine's "complex" crisis, saying London wanted to contribute to an international economic programme aimed at shoring up the "desperately difficult" situation of the Ukrainian economy.

In a dramatic twist, Tymoshenko was set free on Saturday evening, heading straight to Kiev where she hailed the gathered protesters as "heroes" and urged them to continue their fight until change had been secured.

Tymoshenko was jailed in 2011 for "abuse of office", in a trial many said was Yanukovych's revenge against his arch-rival. She spent much of her sentence under armed guard in a hospital in the eastern city of Kharkiv being treated for back problems. however, many of those on Independence Square regard her with suspicion, and want new faces in the next government.

On Friday, three EU foreign ministers met Yanukovych and opposition leaders, and agreed to presidential elections by the end of 2014. Within hours parliament began passing a series of resolutions, stripping Yanukovych of his powers, initiating impeachment proceedings and setting elections for 25 May.

Source: theguardian

NuSTAR gives tantalizing hints about how stars go supernova

NASA's Nuclear Spectroscopic Telescope Array (NuSTAR) is unraveling the mystery of how stars go supernova by mapping the remnants of radioactive material left in the wake of a supernova. The findings go against previous theories to create a more chaotic view of the conditions prevailing directly before a star explodes.

NuSTAR, launched on 13 June, 2012, represents the first telescope capable of imaging radioactive elements left behind after a supernova. This is achieved by focussing its search to the high energy X-ray (6 -79 KeV) area of the electromagnetic spectrum. Previous telescopes, which hosted coded apertures, were found to be insufficient in observing light in this part of the electromagnetic spectrum.

The array gathered the new data by observing the remnants of a supernova designated Cassiopeia A, a star which before it went supernova was roughly eight times as large as our Sun. When mapping Cas A the telescope searched for titanium-44, a radioactive isotope which can only be forged in the final stages of a dying star, and therefore the perfect element with which to detect and map a supernova explosion.

"Previously, it was hard to interpret what was going on in Cas A because the material that we could see only glows in X-rays when it's heated up," said Brian Grefenstette of Caltech. "Now that we can see the radioactive material, which glows in X-rays no matter what, we are getting a more complete picture of what was going on at the core of the explosion."

NuSTAR found that the titanium-44 was primarily found grouped around the center of Cas A. This has led NASA scientists to deduce a possible explanation for the death of these stellar giants.

It appears that the cause of a supernova is a massive shock wave that literally tears the star apart. Sometimes, however, the shock wave fails to reach a critical mass and stalls, preventing the star from shedding its outer layers and effectively preventing the supernova from taking place.

Information gathered from NuSTAR's observation of Cas A suggests that an exploding star sloshes around like a disturbed liquid, with the effect of kick-starting the stalled shock wave, continuing the supernova.

This chaotic new theory shakes off previous symmetrical theories regarding the processes required to create a supernova put forward by running data through powerful supercomputers, the results of which suggested an explosion which was symmetrical in all directions.

The ability to detect elements such as titanium-44 has also cast a level of doubt on some previous models of supernova explosions. One such model involved the dying star spinning at a great speed prior to exploding, however while searching the tell-tale jets ejected by the star during the high velocity spin, NuSTAR detected no signatures of titanium-44, meaning that the jets emitted from the star were not the trigger of the supernova explosion.

The team continues to examine Cas A in an attempt to further understand the dramatic ends of these stellar behemoths. A paper on the findings was recently published in Nature.

Source: NASA

ARCHITECTURE;The XXII Winter Games in Sochi, Russia. The Iceberg Skating Palace

The Iceberg Skating Palace was built by Ingeokom, in cooperation with Mosproekt-4, one of the directing agencies of the Moscow Committee for Architecture. The 12,000-seat venue was designed for training and competition in figure skating and short-track racing, and is one of the more striking buildings of the Sochi games. The building spreads over 20,917 square meters (225,000 square feet) in area.


But it is the sweeping tile-like façade, made from interlocking waves of glass and sandwich panels, that captures one's attention. The solid panels are painted in varying shades of blue, with the shape and color designed to recall the forms of the surrounding Caucasus mountains, as well as the waves of the Black Sea. Although comparisons to a massive wall of ice are also apt. This is a demountable structure, which will most likely be moved to another city after the Olympics.

Source: Gizmag

Architecture. The XXII Winter Games in Sochi, Russia. The Fisht Olympic Stadium

The XXII Winter Games in Sochi, Russia, are said to have cost around US$50 billion, which makes them the most expensive Games to date. The bill includes many new buildings and the first ever Winter Olympic Park, planned by stadium designers Populous, who also created the Fisht stadium, venue for the opening and closing ceremonies. But the lack of big-name architects is noticeable, as is the fact that most of the venues are designed for re-use; some will even be dismantled and moved elsewhere after the Games.

The Fisht Olympic Stadium

The Fisht Olympic stadium, used for the opening and closing ceremonies, is the only structure in the Coastal Cluster (the group of indoor arenas around the Olympic Park and located near the coast) to be completed by an established Western architecture firm, Populous. The company worked with a consortium of Russian design-construction firms including Ingeokom, Mosproekt-4 and Botta Management Group. Named after a nearby mountain peak, the stadium design is a first for such a large-scale building in Russia. The form was meant to resemble the snowy peaks surrounding the Black Sea resort area, but the innovation is in its use of the material EFTE (Ethylene Tetrafluoroethylene)

 ETFE is a lightweight material that is translucent and gives thermal protection, but lets in a sufficient amount and quality of natural light for grass to grow beneath it. Here the architects spent a lot of time in consultation with engineers to achieve a unique effect. They applied inflatable, "pillow-like" material in sections that resemble fish scales, but were carefully designed to give a cloud-like impression when viewed from inside.

The material also helped to enhance those spectacular lighting effects we saw during the opening ceremony. The tripartite roof structure includes a middle section that will only be used for the Olympic ceremonies and will be removed after the Games. The main level of the stadium is elevated on a landscaped mound so spectators, rather than being enveloped by towering walls, have views over the Olympic park.

Populous was also responsible for the master plan of the Olympic park, the first such park built for a Winter Olympics. After the Games, the Fisht Stadium will be used for Russian and FIFA World Cup football matches, and will host other entertainment events. As such, it was designed with a flexible capacity, which means that it can accommodate crowds of up to 45,000 people, but can also be scaled down internally so that smaller crowds of say 25,000 can enjoy a slightly more intimate atmospheric experience.

Source: Gizmag