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Triple Crunch Log                                                                                                            

crunch, 2007, the bank's crucial tier one ratio – a measure of its financial health – was 4.7%. Today it is 10%, showing that the bank is holding a larger capital cushion to support its business. In the same period, the bank's leverage has fallen from 33% to 20% of that tier one capital, and the amount of liquid assets it holds – such as government bonds – has jumped from £20bn in the year of the credit crunch to £160bn now.”679


High cost of borrowing is a deadly legacy of the credit crunch for the young. The cost of borrowing for households has soared despite interest rates falling to a record low and the banks returning to bumper profitability. The most common mortgage taken out by its customers took last month had a starting interest rate of 6.49%, almost six percentage points above the Bank of England's historic low rate of 0.5. Rates for personal loans and credit cards are usury personified. Guardian: “The decade of easy money came to an abrupt halt in August 2007 but what has emerged since is a divided Britain in which young adults are paying the price of the credit crunch while their parents have landed a get-out-of-jail-free card.  … Exhortation by the Chancellor to make the banks lend more is also likely to fall on deaf ears. By some estimates the UK banks have to find an astonishing £800bn over the next few years. They owe around £180bn under the emergency Special Liquidity Scheme, introduced in 2008 and designed to run until 2012. There is a further £200bn in another emergency vehicle, the Credit Guarantee Scheme, designed to run until 2014, and as much as £400bn in other securities that will need to be repaid or refinanced. It's not an environment in which retail credit will be eased or extended. …. The slow-burn victims of the credit crunch have been savers, particularly the elderly who rely on deposit accounts to provide an income. Before the credit crunch, savers could find rates as high as 7%, but they went the same way as Icesave. Today, typical rates are closer to 2.5%-3%. … The reality is that many employees will simply not be able to afford to retire. Working into our 70s may be the true legacy of the credit crunch.”680

NOAA’s sanguine assessment of the Macondo spill is questioned by more academics. Thomas Shirley, professor of life sciences at Texas A&M University: “We don’t know where most of the remaining oil is. Some of it will be buried in sediments, some of the denser oil will have combined with organic compounds. Perhaps the very largest proportion of the oil consists of micro-molecules, less than 100 micrometers across.” At that size, the oil could remain in suspension in the sea “for a very long time”, harming fish stocks. Christoph Gertler, of Bangor University: the “dispersed” fraction referred to by NOAA consisted in large part of “compounds that can be easily taken up in the food chain and any living tissue. “When higher organisms are confronted with such unknown chemicals, they try to oxidise them, creating very aggressive, carcinogenic and mutagenic compounds.681

The majority of people in the US believe oil companies should be more regulated in the wake of the Macondo spill, according to a Harris poll carried out for the Financial Times. US respondents to the poll were also the most damning in their opinion of BP, with almost two-thirds saying they thought less of the company.682

The UK energy secretary lifts a ban on councils selling of surplus electricity to the national grid as UK aims to meet EU energy targets. This could raise £100m a year for cash-strapped local authorities in England and Wales. The Local Government Association says council-owned wind turbines and solar panels on town halls, council homes, leisure centres and other municipal buildings could be money spinners.683

Low-carbon investment at risk, CBI warns. John Cridland, deputy director-general of the CBI: “Uncertainty on plans for electricity market reform, slow progress on clean coal and nuclear power, as well as the cost of renewable energy are adding to the mood of caution among investors. We need investment from companies, not delays from government.” FT: The government has said it will abolish the Infrastructure Planning Commission, replacing it with a Major Infrastructure Unit that would ensure ministers would have the final decisions on key infrastructure. But the details of how this will work are still unclear. For instance, it is not known who would have the final say on a large energy project such as a nuclear power station or wind farm.684

China tells companies to close outdated factories in energy drive. FT: “China plans to close outdated factories owned by more than 2,000 companies in heavy industries in the clearest sign yet of Beijing’s determination to meet its low energy targets even at the expense of economic growth. …. Beijing said it would target 18 industries, including steel and cement, and took the unusual step of listing each company affected and the amount of production it must close by the end of September. … China’s previous efforts to reduce energy consumption were thrown off course by the $586bn stimulus package launched in 2008.  … At the end of 2009, China had reduced energy intensity by 15.6 per cent from 2005 levels, but energy intensity increased in the first quarter of this year by 3.2 per cent.”685

Moscow death rate doubles as smoke from wildfires shrouds capital: 700 Muscovites are dying each day. The weak and elderly have struggled to escape the smog and debilitating heat.686

Floods and mudslides on 3 continents, as drought hits Africa. The Met Office says high pressure over Russia has forced the jet stream much further south than usual this year, a pattern that has remained almost stationary over recent weeks, meaning low pressure has been sitting over Pakistan longer than normal, intensifying the monsoon rains. Helen Chivers, a spokeswoman with the Met Office: “The extremes of rainfall are getting heavier and are entirely consistent with climate change predictions.”687

Met Office: human enhancement of the greenhouse effect is becoming clear in current extremes. Peter Stott, head of climate monitoring and attribution at the Met Office: “So are we seeing the effects of climate change in these extreme weather events? Analysing the observational data shows clearly that there has been a rise in the number of extremely warm temperatures recorded worldwide and that there have been increases in the number of heavy rainfall events in many regions over land. Evidence, including in India and China, that periods of heavy rain are getting heavier, is entirely consistent with our understanding of the physics of the atmosphere in which warmer air holds more moisture. Our climate change predictions support the emerging trend in observations and show a clear intensification of extreme rainfall events in a warmer world.”688

Be wary of 'solar for free' offers, consumer groups tell UK householders. Those tempted by a rash of new "solar for free" offers could double their financial savings by paying for the panels themselves, Consumer Focus and Which warn. Guardian: “Under the "rent your roof" model, the companies earn the tariff worth approximately £835 a year and the homeowner benefits from an annual saving of around £110 off their

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