Royal Mail faces new strikes, and begins to earn my sympathy…

For what that’s worth. The latest in the ongoing Royal Mail/strike story…

A two-week campaign of staggered strike action across the UK postal service has been announced by union officials.

The rolling programme of walk-outs, to begin on Wednesday 25 July, will affect every aspect of the Royal Mail. It follows two earlier 24-hour strikes.

Well, shit. I was mightily impressed by the very next line in this story:

“This is designed to hit Royal Mail harder at minimum cost to our members,” the Communication Workers Union said.

Which to me says these guys have as much hope of coming together peaceably as those folks at the WTO. The issues are the same as they’ve been since the beginning: the 2.5% pay offer, working conditions, and this ‘modernisation’ bit – the one that will kill 40,000 jobs. For example:

One of the initiatives it is fiercely opposing is the use of more automation in sorting post, which is currently one of the duties of postal delivery staff before setting off on their rounds.

But I don’t see how Royal Mail can afford not to do this. At the rate they’re losing customers – a rate no doubt picking up, with this level of industrial action – they haven’t a chance of competing. Moreso still, if/once rival TNT gets moving with their plans to have their own postal workers delivering mail to English doors. Royal Mail’s last advantage will disappear with their effective monopoly over mail slots.

I’m sympathetic to picket lines – not for nothing am I Australian, but the CWU needs to get at least a little real on this one, surely. I don’t see Royal Mail giving ground when it’s at the edge of the cliff:

The company said the action amounted to a 24-hour strike each week for two weeks from next Wednesday, hitting different centres at different times. Royal Mail said it had contingency plans in place to deal with the action, adding that it remained willing to meet the union to explain the “realities of the marketplace”.

“Royal Mail is losing business because its costs, and therefore its prices, are too high and our business customers are choosing to go elsewhere,” said the statement.

Another perspective on this, of course, is the one where we mention something about chickens coming home to roost. Where were the modernisation plans when Royal Mail had it all? Why has it suddenly realised it has 40,000 people too many, at just the right time that it cannot afford to pay them off, or even pay those remaining more than 2.5% more? Sadly (Dave), “fair” and “not fair” have no place in this debate. There is only “feasible” and “not feasible”. Royal Mail cannot be made to invent a solution, or buy one with debt, as punishment for the smart things they did not do when they had the chance. Presumably the executives that cocked this up remain executives, if they haven’t already moved on while the getting was good, and the semi-skilled workers at the bottom will have to try like hell to find another secure job or be trapped among the downwardly-socially-mobile. And no, it’s not fair.

Bernanke remembers the importance of housing and inflation, after all..

A few very amusing pieces in, amongst other outlets, today’s Financial Times. First, Fed Chairman Ben Bernanke showed that he is capable of ‘reading’ an economy, after all:

Ben Bernanke acknowledged for the first time on Wednesday that credit concerns were spreading beyond the subprime mortgage market as investors showed their worries with a flight to quality, seeking refuge in government bonds and other safe assets.

…

Testifying before Congress, the Federal Reserve chairman said the US central bank was shaving back its “central tendency” forecasts for growth this year and next, largely because of a more protracted drag from housing investment.

But there was no change to the Fed forecasts for inflation, underlining policymakers’ reluctance to put much store on a recent decline in core inflation.

That bloody core inflation, again! How do we interpret the comments of a man who defines inflation that does not include fuel or food – the two things increasing most in value? Beats me.

So, short version:

• Bernanke accepts that sub-prime problems are bleeding out into the rest of the economy
• He still thinks credit spreads, being reasonable, indicate there’s no real risk of a crunch
• He thinks the decline in economic activity will be met by increases in exports
• He thinks his version of inflation is the best indicator (what households have to actually spend money on is, apparently, not his problem?)*
• He acknowledges that headline inflation, which includes fuel and food, is higher (no!)
• He knows the labour market is tight

I don’t know – does he like his core inflation because it keeps the odds on that the dollar will stay low and lift exports? Because headline inflation and a tight labour market suggest increasing interest rates and an appreciating dollar. I guess that’s why I’m not in charge of the Federal Reserve.

That reference to the credit spread is also popping up all over. It’s basically the difference between Treasury securities – the safest – and non-Treasury securities, of equal type but lesser quality. Right before previous credit crunches this spread was much greater than it currently is. Therefore, we are told, no problem. I’m skeptical. Like much of what’s going on, the circumstances now are not what they were in, say, the late ’80s. The credit spread just is not, to me, the indicator to use when releasing our bulls into the market.

Bernanke also, finally, warns of a too-fast recovery (an indication that he is not suggesting that a rate cut is in the offing, even though the dollar fell, suggesting that was the interpretation anyway).

*I am aware of the difference, yes. Core inflation is a better indicator (we are told) of inflationary pressure: the sort of inflation to which the Fed must respond. Headline inflation is a better indicator of household’s purchasing power. My point is that, if you’re going to be a macroeconomist and talk about consumer spending, ignoring food and fuel inflation seems odd, to say the least.

Bipolar Wall Street – buoyant one day, gloomy the next

The second interesting story is the ‘gloom’ on Wall Street. Only a few days after the run of stories about how great the earnings news has been, and editorials about foolish bears deserving what’s coming to them, suddenly it’s…not?

A combination of disappointing earnings and guidance, renewed worries over financials and cautious remarks on the outlook for the economy from Ben Bernanke, the US Federal Reserve chairman, roiled Wall Street on Wednesday.

Stocks pared some of their earlier losses late in the day, and the S&P 500 index closed 0.2 per cent lower at 1,546.19. Just three of the main 10 sectors in the index rose. Energy stocks were boosted by oil prices to 11-month highs and utilities also rose as Treasury bond yields fell on safe haven buying amid renewed jitters over subprime mortgages and hedge fund exposure.

Add to that regular mortgages (“California Home Sales Hit 12-Year Low“). That oil prices are pushing energy stocks up is fine, if you’re an investor. For the rest of us, it means our wealth will decline, not appreciate.

The reference to the S&P 500, by the by, is another example of awkward statistics. Here is its behaviour today:

And here is the same for the previous 12 months:

I’m sure 0.2% is money for some people, but the wobbliness of the S&P over the last few months is more interesting to me. I’m more interested in how it looks before those rallies – because one of these days that rally just might not come. These follow by the day others about the glory of a 14,000 Dow – which is it, for heaven’s sake? Are weather-reporters in charge of financial reporting now, and employing the “absolutely scare the shit out of everyone” method of broadcast journalism? I can handle a bull market or a bear market just fine. A manic market is something else altogether.

Someone give Putin a copy of Armed Forces

I mentioned, in mere passing, yesterday, that the wellness of Russia’s playing with others leaves something to be desired. This was with regard to the smartness of a move by UK and other European countries to find some sources of energy independent of Russia’s gas reserves. The reserves they have already cut off entirely, once before. That was over a dispute about prices. Imagine a dispute about politics? They are also, speaking of Chavez, no stranger to seizing reserves from foreign companies.

Lately:

• Miliband’s Foreign Office has evicted 4 Russian Embassy staff, in retaliation for the Litvinenko affair
• Apparently, British security people busted a Russian hitman, sent to assassinate Putin Rival Berezovsky
• Etc. Insert generic story about ‘dealing’ with the newly-powerful, newly-pushy Russia

British-Russian relations are said to be the worst since the Cold War. Should come in handy next Winter. Solar heating must be looking like National Security, these days.

“Armed Forces”, by the by, is a reference to the Elvis Costello album that featured the track (What’s So Funny ‘Bout) Peace, Love, and Understanding, originally by Nick Lowe. Take your pick:

Bill Murray in Japan is my favourite:

Low-Frequency Active sonar blows out the brains of whales

I was disappointed (though not surprised) by the email I just received from the Natural Resources Defense Council (“the Earth’s best defense” – give me a job?):

The American people have rejected it. The federal courts have ruled against it. But the U.S. Navy won’t take NO for an answer.

It’s bringing back a sonar system so powerful it can impact whales 300 miles away with its ear-splitting noise. Its effects are so far-reaching — and so unknown — it could threaten the survival of entire populations of marine mammals.

Now the Navy wants to deploy this Low- Frequency Active (LFA) sonar system across a staggering 70 percent of the world’s oceans. And the Bush Administration has given the public only 15 days to register our opposition.

I feel obliged to keep my words civil, given the proximity to semester – I don’t want to telegraph to my new students the fact that any sailors in our classroom will run out, holding their ears (I’m Australian; we swear a lot?). Actually, I should have spotted this story a week ago. Good thing I sign up to mailing-lists.

LFA sonar and the military

For those who came in late: Low-Frequency Active sonar was in the news rather a while ago. The US military is exempt from environmental ‘rules’ that would otherwise prevent this sort of thing, making for fractious debates between the save-the-world-invade-a-country and the save-the-world-plant-a-tree crowds.

Military active sonar works like a floodlight, emitting sound waves that sweep across tens or even hundreds of miles of ocean, revealing objects in their path. But that kind of power requires the use of extremely loud sound. Each loudspeaker in the LFA system’s wide array, for example, can generate 215 decibels’ worth – sound as intense as that produced by a twin-engine fighter jet at takeoff.

Some mid-frequency sonar systems can put out over 235 decibels, as loud as a Saturn V rocket at launch. Even 100 miles from the LFA system, sound levels can approach 160 decibels, well beyond the Navy’s own safety limits for humans.

LFA sonar and marine mammals

Imagine trying to function with a jackhammer thundering on and off outside your window, night and day.

Pierce Brosnan has had a long involvement with environmental concerns. Dismiss this because he is voicing it over and I shall have a very low opinion of you, indeed.

From the Whale and Dolphin Conservation Society:

European veterinary pathologists have recently published an alarming article in the journal Nature that identifies unusual lesions and a possible mechanism for noise-related injury in some of the animals stranded around the UK and those from the Canary Islands, including deep diving beaked whales and Risso’s dolphins as well as common dolphin and a harbour porpoise.

Internal damage – holes in tissues – that can lead to death in cetaceans is reported and appears to be caused by a condition known in humans as decompression sickness or ‘the bends’. It is currently unclear whether this happens as a result of fright response as an individual attempts to swim away from the sound and exceeds its physiological tolerances as it comes to the surface, or as a direct result of the physical impact of the sound.

Whatever the mechanism of injury, the authors of the article show that the damage is caused to vital internal organs, in particular the liver of the animal, and this leads in some cases to death.

From the NRDC:

Evidence of the harm such a barrage of sound can do began to surface in March 2000, when whales of four different species stranded themselves on beaches in the Bahamas after a U.S. Navy battle group used active sonar in the area.

Investigators found that the whales were bleeding internally around their brains and ears. Although the Navy initially denied responsibility, the government’s investigation established with virtual certainty that the strandings were caused by its use of active sonar.

Since the incident, the area’s population of Cuvier’s beaked whales has all but disappeared, leading researchers to conclude that they either abandoned their habitat or died at sea.

A map of the mass stranding of Cuvier’s beaked whales in 1996. The red arrows are the tracklines of the NATO vessel – the orange arrows display areas of beaked whale strandings.

Numerous mass stranding events and whale deaths across the globe have been linked to military sonar use.

October 1989: At least 20 whales of three species strand during naval exercises near the Canary Islands.

December 1991: Two Cuvier’s beaked whales strand during naval exercises near the Canary Islands.

May 1996: Twelve Cuvier’s beaked whales strand on the west coast of Greece as NATO ships sweep the area with low- and mid-frequency active sonar.

October 1999: Four beaked whales strand in the U.S. Virgin Islands during Navy maneuvers offshore.

May 2000: A beaked whale strands in Vieques as naval exercises are about to begin offshore.

May 2000: Three beaked whales strand on the beaches of Madeira during NATO naval exercises near shore.

April 2002: A beaked whale and a humpback whale strand near Vieques during an offshore battle group training exercise.

September 2002: At least 14 beaked whales from three different species strand in the Canary Islands during an anti-submarine warfare exercise in the area. Four additional beaked whales strand over the next several days.

May 2003: As many as 11 harbor porpoises beach along the shores of the Haro Strait, Washington State, as the USS Shoup tests its mid-frequency sonar system.

June 2004: As many as six beaked whales strand during a Navy sonar training exercise off Alaska.

July 2004: Approximately 200 melon-headed whales crowd into the shallow waters of Hanalei Bay in Hawaii as a large Navy sonar exercise takes place nearby. Rescuers succeed in directing all but one of the whales back out to sea.

July 2004: Four beaked whales strand during naval exercises near the Canary Islands.

January 2005: At least 34 whales of three species strand along the Outer Banks of North Carolina as Navy sonar training goes on offshore.