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Wednesday, 10 March 2010

Why is the EU failing to comply with its international law obligations over Israel?

If you lived on a street where a neighbour frequently and flagrantly broke the law, you would want something done about it, especially if that neighbour took part of your garden, replaced the fence with a 30ft wall, cut down your trees and redirected your water supply.


Suppose the authorities to whom you complained merely denounced the illegalities and took no action? You might think that this situation is inconceivable. But that is precisely what has been happening to the Palestinians for the best part of 60 years.

On July 9, 2004, the International Court of Justice in The Hague (ICJ) produced a strong advisory opinion on the legal consequences of the construction of a wall in the occupied territories.

Fourteen of 15 judges agreed the core findings: that the construction was contrary to international law, both human rights and humanitarian; that it should be dismantled with reparations being made for all damage caused. This was adopted by a UN General Assembly resolution on July 20, 2004.

This resolution, like so many before it concerning violations perpetrated by Israel, was fundamentally ignored. The ICJ had not only specified the obligations owed by Israel under international law but also spelt out very clearly the obligations incumbent on third-party states to ensure that the core values or peremptory norms — such as the right to self-determination — are upheld by those states that break them. This is a matter of common sense and ordinary reason; for, were it to be otherwise, the rule of law and the authority of international justice would be completely undermined.

It was in this context that the Russell Tribunal was reconvened in Barcelona on March 1 to 3 to examine the legal responsibility for violations in the Palestinian Territories. Four more international sessions are planned.

The tribunal has an illustrious history with its origins in the Bertrand Russell Peace Foundation launched in 1963. The first tribunal concerned the war in Vietnam, and led to citizens’ commissions of inquiry held in several American cities. A second tribunal was established to investigate human rights violations in South America in 1974-75.

These are tribunals of conscience, created in response to the demands of citizens in many countries who feel that perpetrators must be held to account and that states cannot be allowed to act with impunity; which is often the result of inaction and complicity by others.

The first session examined the responsibility of the European Union and its member states. The hearings dealt with six topics: self-determination; the annexation of East Jerusalem; settlements and the plundering of natural resources; the EU Israel Association agreement; the Gaza blockade/Operation Cast Lead; and the wall.

Proceedings were opened by Stéphane Hessel, a co-author of the Universal Declaration of Human Rights, followed by 27 witnesses with a range of expertise and experience (lawyers, academics, aid workers, human rights advisers, members of the European and British parliaments and a military adviser).

Israel’s violations are well known and well documented through to the Goldstone report on the invasion of Gaza in early 2009 and were summarised in the tribunal’s report under ten separate headings. The Palestinian Territories determined that a form of apartheid is being practised. The EU and its member states were found to have transgressed the EU Treaty itself as well as international obligations under the UN Charter and the 1966 Covenant on Civil and Political Rights.

The real question, however, is not just inaction but positive action undertaken by Europe that supports the illegality. This can be exemplified by the export of weapons and components; the trade in produce from settlements in the occupied territories and above all the multibillion EU Israel Association agreement that confers benefits on Israel. The EU is the third most important trading partner for Israel and the EU Parliament has passed a resolution requiring the suspension of the association agreement, but like so much else this has not been implemented.


It was obvious to the tribunal, therefore, that the EU may not be prepared to comply with international law. In these circumstances it is necessary for concerned citizens to examine ways in which accountability may be effected. There are a number of legal avenues that can be pursued against individual European governments and their agencies, and individual private companies that maintain the regime of illegality. Additionally Israeli perpetrators of war crimes are susceptible to universal jurisdiction and are liable to be arrested should they
travel to Europe.

So far the exercise of this power has not been overwhelmingly embraced by European states; instead it has been left to the endeavours of committed individuals on behalf of the victims and their families in the Palestinian Territories.



 BY From   March 11, 201, 
The author, a QC, was one of the eight member international jury panel of the RTP. See their full report at www.russelltribunalonpalestine.com

Tuesday, 9 March 2010

Mr. Distress is ready to buy

NEW YORK (Fortune) -- Whether it's steel, textiles, or auto manufacturing, Wilbur Ross has built a lucrative career finding gold in industries left for dead.

He did it first at Rothschild, and since 2000 at his own investment fund, WL Ross & Co. To cite just one example, Ross bought bankrupt steelmaker LTV for $325 million in 2002, and sold it for $4.5 billion two years later.

As the economy continues to struggle, Fortune's Katie Benner sat down with the master of distressed investing to hear where prospects can be found in this turbulent time.

Where do you think the biggest opportunities are now?

There are deep value opportunities in insurance stocks, which were beaten down because of their exposure to the subprime crisis, annuities, and commercial real estate. I won't name names, but some well-managed life insurance and fire and casualty companies will come through this stronger. They used to trade at one or two times book value but now trade at three-quarters book.

Regional and subregional banks still have a lot of issues to resolve, and they have enough commercial real estate assets on their books to make most of them insolvent on a mark-to-market basis. Of course, they won't all mark their assets to market and their loans won't all go bad. But another several hundred banks will fail before we get through this cycle. We just bought Bank United in Florida for $925 million, and the FDIC is providing about $4.9 billion in assistance.

I still like TIPS (Treasury inflation-protected securities), and I think a big opportunity is coming in the municipal bond market. Even if it doesn't default, some state or local government will come close enough to scare everyone to death. That will be a wonderful buying opportunity.

And as one of the public-private investment managers for the Treasury, we have been buying lots of residential mortgage-backed securities. The price often more than discounts the problems that are ahead. After another year or so of property value declines I think that market will stabilize along with the securitization market. Securitization is a fundamentally sound idea, even if it was poorly executed.

How can we fix the securitization market?

No one had skin in the game. That's where things went wrong. My proposal then is that everyone has skin in the game. Ratings agencies' fees and compensation should be paid over time and depend on the enduring quality of the rating. Employees at banks and brokerages should have their compensation tied to the long-term success of their products. If a trader is paid a big bonus for a portfolio that turns out to be a disaster a year later, did he really earn the money he was paid?

What about commercial real estate? There are reports that you want to buy the near-bankrupt apartment complex Peter Cooper Village/Stuyvesant Town in New York City.

At some point commercial real estate will become very interesting, but not yet. The declines in value are not over. Stuyvesant Town is an early indicator of what's to come -- it's a poster child for the mistakes made during the boom -- and we are interested in it.

In the original deal for the complex, the financing was predicated on the idea that the apartments would no longer fall under rent control and that they would start generating a lot more cash. That never happened.

There were also 11 tiers of mezzanine debt on the complex, which probably have no value. The debt was distributed into six or so commercial mortgage-backed securities that were sliced up and sold to investors.
So there's a huge pile of paper out there that is very affected by this deal. At some point these securities will fall in value enough to be attractive. But at the moment the prices don't reflect the problem environment that we see.

What is the investment opportunity at Stuyvesant Town if you can't significantly raise rents?

Eleven thousand middle-class families live in Stuyvesant Town -- more than in a small town. New York City needs affordable, middle-class housing. If the debt put on the complex is the right size for the amount of cash the complex generates it could be a very good investment.

How do you see 2010?

This is going to be a volatile year. It won't be a year of stock markets, but of the individual stock. Some will do very well, despite the environment.

What are the big challenges for investors now?

Government intervention is one. Washington, D.C. is the new Wall Street. No significant financial transaction of any consequence occurs without it. About 90% of all mortgages are granted through Washington.

Health-care reform would mean another 16% of the economy under more government supervision.
But there is no evidence that more regulation makes things better. The most highly regulated industry in America is commercial banking, and that didn't save those institutions from making terrible decisions.

The relationship between information and decision-making is a challenge. Everyone gets the same information at basically the same time, so the value of information has gone to zero. And there has not been proportionate growth in the investment community's ability to sort through it all. People spend so much time absorbing that they don't have time to understand what it means. This creates volatility.

For example, people suddenly decide Greece is the problem, and whack, the market is down 10%. If weeks from now people decide California is the problem, markets will move again. Everyone has known for over a year that both places are troubled. Why do we care now? How do we know that the problems of Greece or rescuing that country will make a difference in the economic landscape one way or the other?

That's why the value of expertise and the ability to interpret information will someday go to infinity. To top of page

By Katie Benner, writer

43% of Americans say they have less than $10k for retirement

By Chavon Sutton, staff reporter

NEW YORK (CNNMoney.com) -- The percentage of American workers with virtually no retirement savings grew for the third straight year, according to a survey released Tuesday.

The percentage of workers who said they have less than $10,000 in savings grew to 43% in 2010 from 39% in 2009, according to the Employee Benefit Research Institute's annual Retirement Confidence Survey. That excludes the value of primary homes and defined-benefit pension plans.

Workers who said they had less than $1,000 jumped to 27% from 20% in 2009.


Confidence in ability to save enough for a comfortable retirement hovered at 16% of respondents, the second lowest point in the 20-year history of the survey.

"Americans' attitudes toward retirement have clearly tracked the economy the last couple of years, and that seems to be the case in 2010," said Jack VanDerhei, EBRI's research director and co-author of the survey, in a statement.

A drop in the bucket

The percentage of workers who said they have saved for retirement fell to 69% from 75% in 2009.
While VanDerhei attributed the decline in current savings rates to job losses, mortgage problems and the suspension of corporate 401(k) matches in 2009, he said the economy isn't entirely to blame.

"In previous years, there were a whole lot of people who had nothing to begin with," said VanDerhei.
The gap between what Americans have saved and what they'd need for retirement is forcing workers to prolong their working years.

According to the survey, 24% of workers said they have postponed their planned retirement age in the past year, up from 14% in 2008.

But even as fears over health care costs and job prospects mount, the survey found that only 46% of workers have tried to calculate what they need for a comfortable standard of living in their golden years.

"People just don't want to think about this," said VanDerhei. "Everybody thinks they're too young to think about it, until suddenly they're too old to do anything about it."


In general, financial planners say that retirement savings, including Social Security benefits and pension, should be large enough to provide about 80% of pre-retirement income.

To reach that target, "most Americans need to be saving within the healthy range of 6% - 10% (of their salary)," said Beth McHugh, vice president of workplace investing for Fidelity Investments.

But the survey found that 54% of the workers with some form of savings said that they have less than $25,000 stowed away.

Delaying retirement, though not ideal, is a good sign that people are finally facing reality.


"People have figured out that they don't have enough money," VanDerhei said. "Still, I'd rather they bite the bullet today, rather than take the chance that they'd have a job when they are 65."

The EBRI surveyed 1,153 U.S. workers and retirees, age 25 and older, in January. To top of page