Operation Twist Won't Be Enough To Save The World Economy

Twist and shout....loudly, for help. The $400bn action taken last night to by the Federal Reserve to boost the US economy backfired, by alarming the markets it was meant to reassure.

Global shares fell sharply this morning with £56bn wiped off the FTSE 100 index - that's our pension money, by the way.

Taken along with the International Monetary Fund's stark warning of a 300bn euros black hole in the eurozone banking system, due to sovereign debt risks, the Fed's move was interpreted, correctly, as an index of just how bad the situation is out there.


















U.S. Federal Reserve Chairman Ben Bernanke hopes that Operation Twist will help boost the U.S. economy.

Operation Twist, as Bernanke's $400bn mission is nicknamed - is so-called either because it has not been attempted for 50 years, when the Chubby Checker song was in the hit parade, or because it is an attempt to twist the 'yield curve' - in simple terms, to bring down long-term interest rates and thereby boost economic growth.

I could explain this in full, but believe me, you wouldn't want me to.

Along with Operation Twist, the Fed issued a gloomy prognosis on the US economy and the risks from the eurozone, echoing the sentiments from the International Monetary Fund that time is running out rapidly to fix the vulnerabilities in the financial system.

The financial crisis that had its genesis in the banking system was always going to spread to sovereign nations.












The financial crisis that had its genesis in the banking system was always going to spread to sovereign nations.

Now we are indeed entering a new and dangerous phase, and the really worrying thing is the utter and abject lack of convincing leadership, the absence of any big world figure with a convincing vision of how to get out of this awful mess, and what the world might look like when we eventually do.

Share markets have been incredibly febrile so the FTSE 100 and other indexes are quite likely to bounce back.

But this is a deep and real crisis.

The eurozone is facing an existential crisis and the US as the world's dominant economy, is staggering under a mountain of debt.

Hang on to your hats.

Britain And US Accused Of Playing Politics With Megrahi's Condition

The British and US governments were last night accused of ignoring the law and engaging in "international politicking" over the Lockerbie bomber, Abdelbaset al-Megrahi.










Alex Salmond said images of Megrahi in a coma and close to death showed why he had been released in the first place.

The Scottish First Minister Alex Salmond turned on the Foreign Secretary William Hague and on US senators who have repeatedly criticised the decision by his Scottish nationalist administration to free Megrahi on compassionate grounds.

He said images from Tripoli showing Megrahi in a coma and close to death underlined why he had been released in the first place and suggested that calls for his return to prison in Scotland had no legal standing.

Privately, government sources admit that they have no interest in pursuing the extradition of Megrahi despite the regime change in Libya. But they are anxious not to be seen as condoning the decision to release him. Macabre as it may be, ministers would like to see Megrahi die quickly and end the two-year controversy over his early release.

In his first public comments on the case since the fall of Tripoli, Mr Salmond welcomed the view of the Libyan transitional council that it would not consider extraditing Megrahi either to the UK or the US. "Perhaps if we all followed due process of law as the Scottish government has done and ceased the international politicking around this, then we could all be in a much better place," he said.

"The only people with any authority in this matter are the Scottish government who have jurisdiction on the matter – he is a Scottish prisoner under licence – and the new Libyan transitional council, who are the new duly constituted legal authority in Libya.

"We have never had and do not have any intention of asking for the extradition of Mr Megrahi. It's quite clear from the Libyan transitional council that following their own laws they had never any intention of agreeing to such extradition."

Mr Salmond dismissed the suggestion that Megrahi could be questioned further about the bombing, saying: "You've seen the CNN pictures as I have. I think the idea that he would be available for interview in any recognisable form is pretty far-fetched ... Mr Megrahi remains a sick man, dying of prostate cancer."

Mr Salmond said that the investigation into the bombing remained open as it had been for the past 20 years and could be helped by the regime change in Libya. "There are matters that still could be progressed on the Lockerbie bombing. The Scottish Crown Office have made it clear that if any other evidence emerges, any other people are available to give evidence, or any other indictments are possible, that they stand ready to follow these leads."

John Bolton, the former US ambassador to the United Nations, persisted with the argument for extraditing Megrahi to the US. "Personally, I think the United States made a mistake in agreeing that he be tried under Scottish law, which doesn't provide for the death penalty," Mr Bolton said.

"I don't much think of what the Scottish government thinks. I think the United States should insist that Megrahi be tried in the United States and face trial here."

Timeline

December 1988

Pan Am Flight 103 from London to New York explodes over Lockerbie. The 259 people on board the Boeing 747 are killed, as well as 11 on the ground.

November 1991

US and British investigators indict Abdelbaset al-Megrahi and Lamin Khalifa Fhimah on 270 counts of murder, accusing them of being Libyan intelligence agents.

April 1992

The UN Security Council imposes sanctions on weapons sales and air travel after Libya refuses to meet a 15 April deadline.

August 1998

Libya agrees to the two facing trial at a court in the Netherlands.

May 2000

The trial of the two begins, amid a large security operation.

January 2001

Megrahi is found guilty and jailed for a minimum of 20 years. Fhimah is found not guilty.

March 2002

Megrahi loses an appeal, heard by five Scottish judges.

August 2003

The families of the victims agree a compensation package with the Libyan government of £1.7bn.

August 2009

Megrahi is released after doctors say he has cancer and has only three months to live.

August 2011

Megrahi's brother is reported as saying that Megrahi is in a coma. Scottish government officials say his "condition is consistent with terminal cancer".

England Riots: David Cameron Returns To Rhetoric Of 'Broken Society'

Prime Minister David Cameron announces his "social fightback" with a series of cliches he has been working on for years.



Speaking at a youth centre in Witney, his Oxfordshire constituency, the Prime Minister repeatly referred to "social fightback" and mending Britain's "broken society" as he struggled to get a hold on one of the biggest crises of his premiership.

"The broken society is back at the top of my political agenda," the Prime Minister said in the speech in which he outlined measures to prevent a repeat of the country's worst riots in decades.

The Government is already under fire for its determination to press ahead with police budget cuts and its decision to recruit US ''Supercop'' William Bratton as an adviser on tackling gang culture in the UK.

In an escalating war of words with the police, one chief constable warned that David Cameron risks losing the support of the police. Three other police chiefs have also openly questioned the Prime Minister’s approach to law and order.