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IPE Journal looks back at the people who, behind the scenes and often without great fanfare, shaped the events that defined 2008.

-Nicolas Sarkozy: Super Sarko got things done in 2008. His leadership (national, European, and international) exceeded that of any other world leader. His hyperactivity, once the subject of ridicule and criticism, drove European action and coordination in response to the financial crisis. His performance as EU president is universally praised, and let us not forget that it was his insistence that pushed Bush to call the G20 meeting in November (although Bush outflanked Sarko by calling a G20, not G8, meeting). Case in point: a critical EU summit, with Lisbon's revival top of the agenda, began on Thursday December 11th with heads of state and ministers hunkering down for marathon, weekend-long negotiations. A "three shirt" summit? Not with Sarko in charge. They were headed home the next night with compromises on everything from Lisbon to climate change to the financial crisis. The French president was big in 2008.

-David Plouffe and Howard Dean: Plouffe, Barack Obama's campaign manager, and Dean, the Democratic National Committee Chairman, orchestrated a 50 state strategy in the 2008 US Election (which Dean laid the groundwork for in 2006) that brought historically Republican states into the Democrat's column. Virginia, North Carolina, Indiana, etc. More importantly, Western states with growing, young and Hispanic populations have swung decidedly democratic. The national political map is now deep blue, and if history is any indication, it will be a generation before Republicans get it back. This strategy is as responsible as any factor for Obama's victory (just look to Iowa, where it all began).

-Lord Peter Mandelson: Mandy returned to Whitehall in 2008, drafted by his old friend turned enemy Gordon Brown (now frenemy?) to join the House of Lords and assume the business portfolio in Brown's cabinet. Mandy's impact on British politics and the government's response to the financial crisis has been substantial: he sits on 31 of 39 Parliamentary committees, has been Brown's point man for negotiations with the banking sector and auto firms and reportedly holds private meetings with the Prime Minister more than once a day. Also, Labour's internal revolt against Brown disappeared at exactly the moment Mandy returned. Coincidence?

-Kamal Nath: The Indian commerce minister/trade negotiator's "destructive intransigence" is blamed by many for Doha's collapse. He is praised by others for defending the interests of Indian farmers. Whatever your opinion of him, he made an inarguable impact on the DDA in 2008.

-Zhang Yimou: The Chinese filmmaker left an indelible impression on the world as choreographer of the Olympic opening ceremonies. The spectacular display marked China's "return" to the global stage and instantly made Yimou a hero in his homeland.

Natural gas negotiations between Russia and Ukraine collapsed Wednesday, with Russia preparing to cut gas deliveries tomorrow. This would be the second time in 3 years that Gazprom has cut deliveries to Ukraine over a price dispute, in turn threatening supplies to the EU. Ukraine is the EU's major transit route for gas deliveries, with over 80% of the bloc's external gas supply traveling over its territory.

The latest Russo-Ukrainian gas row is a reminder that despite the current (low) price levels, energy security remains a major issue, particularly to countries with heavy reliance on external supplies. It may also presage a more aggressive Kremlin in 2009, one that seeks to renegotiate gas contracts (particularly with former Soviet republics paying below market prices) with more frequency and adopts a less compromising position.

As Russia's budget comes under greater pressure, the rouble is devalued further (by as much as 10%, as many economists believe is necessary to account for the loss of petro/gas revenues, a cut the Kremlin has resisted with all of its will) and political unrest rises, the Kremlin will struggle to prop up the Russian economy. It will almost certainly turn to its energy leverage to plug the shortfall and boost spending.

Putin's authoritarian consolidation and economic nationalism have relied on a middle class complacency derived from petro/gas riches. The boom years were financed by the commodity bubble. Over this period the Russian government failed to adequately diversify, liberalize and modernize its economy. This made the Kremlin overly reliant on companies like Gazprom for tax revenues (and spending). Due to excessive state intervention and legal uncertainty, particularly when dealing with foreign investors, Russian industry became overly reliant on the Kremlin for finance and favor. What developed was an economy fundamentally underpined by high commodity prices. This house of cards was always vulnerable to a price collapse. Now that its here, the tight societal weave of Putin's Russia is starting to fray. It is unclear whether Putin/Medvedev are prepared to mend it.

Russia's resurgence has as much to do with oil and gas as it does with Putin. The major question for Russia in 2009 is: how does Putin respond?

In my eyes, 2008 has provided a harsh reminder of a fundamental lesson of political economy: the economy drives politics.

It may seem like an obvious point, but it is often a neglected one. Throughout the year, we've seen fascinating discussions about the rise of authoritarian states as an alternative to Western liberal democracy, the success of political party X or candidate Y, the further integration of global trade, the possibility of more comprehensive environmental treaties, and much more. But the outcome of each of these debates has been changed in important ways by the roller coaster ride that has been the economy in 2008.

Just ask some of the losers: Putin/Medvedev in Russia, government officials in China, Mr. McCain, Mr. Cameron, Mr. Chavez, the governments of Iceland, Belgium, Iran, Greece, and anyone hoping for more stringent carbon emission rules.

Or some of the winners: Messrs. Brown, Obama, Sarkozy and Keynes.

And if the economy driving politics was the big lesson of 2008, the interesting question for 2009 will be: how hard will politics push back?

In keeping with our year-end extravaganza:
Maclean's, a Canadian newsweekly, has compiled an excellent gallery of photographs from the past year. Some of the most powerful:

• Beijing Olympics opening ceremony
• Close call in Afghanistan
• Volcano erupts in Chile
• The true cost in Georgia

IPE Journal looks back at the cultural, sporting and down right random things that diverted our attention from economic Armageddon in 2008. In other words, The Rest...

-The 2008 Olympic Games were much more than China's coming out party. The world stood in awe at the Opening Ceremonies, Michael Phelps became the greatest Olympian of modern times and China's athletes topped the gold medal table. 2008 was a year of stark contrasts for China: the tragedy of the Sichuan earthquake, tainted milk, and exposure of the shortcomings of China's economic miracle v. the scale, triumph and symbolism of the games, land reform and progress with Taiwan. 2009 promises to be an interesting year.

-In the Prem, Arsenal collapsed following a very bad day in Birmingham, throwing away the 07-08 title. They began the 08-09 season in disarray, and placed their future on the young shoulders of Cesc Fabregas, who, naturally, was immediately lost for four months with ruptured knee ligaments. ManU and Chelsea provided a cardiac finish to both the Prem and Champions League final in Moscow, with SAF's men taking the double.

-Rafael Nadal, Roger Federer and an epic Wimbledon final, considered by many the greatest tennis match of all time.

-The Year in Japanese innovation: robots that feed you, bionic legs and a trumpet playing robot joins the Cincinnati Pops. According to the International Federation of Robotics, robot use will increase substantially over the next few years, for combat, labour and personal uses. The Guardian identifies Japan as the world leader in robotic labour density (25 per 10,000 workers).

-In what will surely go down as man's historic victory over the animal kingdom, monkey waiters hit Japan.

-Contemporary art market boom/bust: The contemporary art market is an interesting barometer for investor sentiment (the Mayfair, not main street, investor) and Banksy provides a perfect case study. In October 2007, 10 prints by the London-based street artist sold at auction for a whopping ₤546,000. Fast forward to September 2008, and the five Banksy pieces at auction in London went unsold. In fact, two thirds of the items in the Loyd and Turnbull contemporary art auction were withdrawn. (Editor's note- my two Banksy prints were purchased in Covent Garden for 30 quid. Beat that.)

-Finally, in a year of great You Tube moments (Bush shoe thrower, Brown's messiah slip), this one takes the cake, both for humour and IPE symbolism:

Illinois Governor Rod Blagojevich defied everyone today in announcing his intention to appoint Roland Burris to the Senate seat vacated by the President-elect. Obama quickly released a statement condemning the Governor's move, and reiterated his position that the US Senate leadership should not seat the appointee. The drama over Blagojevich is good television, and his Senate appointment may have very real constitutional questions, but in the end the episode matters little beyond the Land of Lincoln.

Thus, the real significance lies in what Obama did not say today. The fourth day of Israel's bombing of Gaza passed without a single statement by the future US president. The quartet, UN, EU and much of the rest of the world have called for a ceasefire, truce or general humanitarian consideration. As Jonathan Wright reports for Reuters, Obama's silence is disheartening for many, especially in the Arab world, who thought his presidency would bring a renewed American commitment to the peace process. His foreign policy team is stacked with strong supporters of Israel (Rahm Emanuel, Hillary Clinton), and it is unlikely that he will expend the political capital that a serious push towards a Palestinian state would require in his first term. Remember, it's the economy stupid, now more than ever.

I have heard a cynical viewpoint that I find quite interesting. It goes like this: Obama has placed people like Hillary Clinton in key foreign policy positions as cover for a peace settlement, one that would inevitably require large Israeli concessions (1967 borders, Palestinian state capital in East Jerusalem). With big Israel boosters leading the negotiations, Obama would be partially shielded from the Israeli lobby backlash.

Whatever his intentions, Obama should say something. Bush has checked out, and the world can't wait another month for American leadership, especially on Gaza.

IPE Journal looks at the economic events that defined our socio-political landscape in 2008, the year of the subprime.

- In The Beginning there was Northern Rock - nationalized in February by the UK government following a good old fashioned bank run. Following heavy losses in the subprime mortgage market, Bear Stearns was next to go: in March, the once-proud investment bank was sold to JP Morgan for pittance. In July, IndyMac Bank went into receivership.

- September Madness. Over the course of a few short weeks, the magnitude of the crisis hit home (so to speak) as financial giants fell like so many martini-and-oyster fuelled dominos. The highlights:

• Freddie and Fannie are taken over by the US federal government
• Merrill Lynch is sold to Bank of America
• The Federal Reserve offered loans to AIG and took an 80% share in the company
• Washington Mutual is seized by the FDIC
• Morgan Stanley and Goldman Sachs become traditional bank holding companies, bringing the era of independent investment banks to a temporary close.
• And Lehman Brothers - in what now appears to have been a hugely significant decision, Lehman Brothers was allowed to fall into bankruptcy and the credit crunch prompty shifted into a higher gear.

- Keynes returns from the wilderness. The collapse in consumer demand has led governments across the globe to initiate fiscal stimulus programs. The sheer rapidity of this about-face in policymaking is breathtaking. We've come to expect such measures from the likes of France and Sweden, but from the UK, US and (gasp!) Germany? Keynes was wrong on many counts and his proclaimed followers even more so, but Keynes' insights on the role of government during economic downturns have gained a new lease on life. For better or worse, the impact of government spending programs and fiscal guarantees will be a defining feature of 2009.

- Price of oil $140 -> $40. A May 5th Goldman Sachs report predicted oil would break $200 within 24 months. Ok, still possible, but six months later the commodity bubble had burst in spectacular fashion and oil was trading under $40 a barrel. The explanations for the remarkable run up in commodity prices of recent years are manifold: historic emerging market growth, global demand, dollar weakness, financial speculation, etc. The price apex was as much about psychology as it was fundamentals, what Donald Rumsfeld would eloquently call the realization of "known unknowns". The "peak oil" moment came in the minds of consumers, politicians and traders across the world, only to be swiftly disregarded as global demand collapsed. Even repeated OPEC production cuts couldn't halt the slide into 2009. Commodity countries from Russia to Mexico are feeling the pressure, with devaluations and political instability on the way.

- Dollar down, up...down? It is awkward to speak of benificiaries of the financial crisis, but the US dollar was exactly that in 2008. By the end of 2007, there was a growing debate over whether the dollar had entered into a sustained relative decline vis-a-vis the Euro, with many concluding the common currency would soon eclipse the greenback's status as primary global reserve currency. The credit crunch had undermined confidence in the US financial system, and hot money ran wild through commodity currencies and emerging markets. But then financial crisis accelerated, and the commodity bubble burst, and investors sprinted to the safety of US dollar. It hit multiyear highs against sterling, the Euro, and a slew of emerging market currencies. Looking ahead, the outlook for dollar appears decidely weaker in 2009. The massive spending plans of Barack Obama and easy money Fed will weigh on the gains of the past year, especially vis-a-vis the Euro and Yen. But the dollar will likely retain its strenght v. emerging market currencies and sterling, as investors continue to find security in the greenback and the UK falls into the abyss.

Notable economic events which could have shaped the course of our year [Update: for the better], but failed: WTO talks & the G20 meeting in November.

***Co-written by Rory Doyle

IPE Journal looks back at the political events, people and trends that defined our world in 2008.

- The worst financial crisis since the Great Depression sets in motion a paradigm shift in global power and authority. The state reoccupied the commanding heights of the global economy through stimulus packages, banking nationalizations and automotive bailouts. The IMF regained relevance, and political fortunes were turned in response to the crisis. The G20 replaced the G8 (but for how long?), and the WTO sadly threw in the towel for 2008.

- Barack Obama was elected the 44th President of the United States in one of the largest electoral landslides in decades. He is the first African-American elected to the highest office. He quickly established a "team of rivals" cabinet, bringing together the best, brightest and (slightly) bipartisan to implement his foreign policy and economic agenda. This agenda will likely be defined by what has been called a "21st century New Deal".

- Russia invaded and briefly occupied much of Georgia. The conflict reasserted Russian influence in its "near abroad", exposed EU divisions over Russian relations and raised tensions over NATO expansion and US missile defense in Eastern Europe. It also exposed the real power dynamics in Russia, with Putin effectively orchestrating, commanding and negotiating throughout the conflict. However, by the end of 2008, the financial crisis would for the first time raise questions over Putin's rule as the country was forced to devalue the rouble and ripples of unrest began to sprout up.

- Parts of Africa continue their descent into hell. Kenya erupts, Somalia struggles, and Darfur is a humanitarian disaster. Fighting has resumed in the DRC with Rwandan support, and Mugabe has maintained his iron grip on power, squeezing Zimbabwe dry in the process. Mbeki left office in South Africa, paving the way for Zuma in 2009. The world now looks to Ghana in the final days of 2008, and hopes for a victory for African democracy.

- The Treaty of Lisbon, an attempt to streamline and bolster the EU, is rejected by Irish voters, temporarily killing the process. While certainly a setback for further European integration, Europhiles promise to continue holding referendums until the voters get it "right." A December summit laid out the blueprint/compromise for Lisbon's revival in 2009, and, for possibly the first time in EU history, ended with universal praise of a French president.

- Attacks in Mumbai: as of yet, not a defining geopolitical event since Pakistan and India worked hard to prevent the situation from escalating. Nevertheless, this is a potential touching-off point for the nuclear rivals in 2009. It also might (by design??) divert Pakistani attention away from fighting terrorism in the northwest tribal areas, and reignite violence in Kashmir. The implications of Mumbai are vast, and potentially destabilizing for the entire world.

- Israel, in response to repeated rocket attacks, and in advance of national elections, pounds Hamas and infrastructure in Gaza. The year's final week produced one its most explosive events, as the fighting in Gaza risks wider political instability and a humanitarian crisis in the territory. Many analysts believe that Israel's overwhelming aerial assault is an attempt to dictate a new truce with Hamas, but its military establishment is signalling that the shock and awe may be only the first phase in a wider operation aimed at removing Hamas from power.

***Co-written by Dave Hart

First off, read Rory's piece on Fed policy then check out the new Federal Reserve No-Limit Credit Card. We laugh because it's good satire, but how is this really different from what American consumers have been doing for a decade?

Except of course that the interest will be paid, not by the Fed, but by anyone and everyone who holds dollar-denominated assets.

(Map courtesy of BBC News.)

This simple enough map by the BBC News illustrates the spread of cholera in Zimbabwe and, by extension, the years of infrastructural neglect, failed land policies, and a world community too impotent to deal with humanitarian crises. Confirming that no disease cares much for arbitrary lines drawn on pieces of (digital) paper, it also shows the epidemic crossing international borders into South Africa.

The abstraction is powerfully unnerving, for it belies the human tragedies on the ground: barren farms, shuttered schools, empty hospitals. In Harare, “manhole covers in the streets hemorrhage water because underground pipes have burst” only to be mirrored inside homes, during the night, by bodies draining of fluids.

As a review and a prediction, this is the year nearly finished and will be the year nearly here.

This is now and the future, everywhere.

The Opel GT is a two-seat sports car introduced by Opel in 1968. Now in 2007 Opel GT supercars can run under 6 seconds with 118 hp/liter.
The supercars design was inspired by the VX Lightning concept car, which was conceived by the GM Advanced Design Studio in Birmingham, England in May 2003 for the 100th anniversary of the Vauxhall brand.It's so amazing for 2910 lbs supercar. With 2.2 litres engine with ECOTEC turbo aspiration, Opel GT can reach top speed over 142 mph.

Renault Megane is a small family car produced by the French automaker Renault since 1995. It is offered in 3- and 5-door hatchback, sedan, coupé, convertible and station wagon bodystyles. The Renault Scénic is the first modern compact MPV, and is based on the Megane. Megane GT is aimed at customers looking for driving pleasure from a car they can use on a daily basis. Its sports chassis ensures outstanding handling performance without compromizing the balance between comfort and handling.

Tesla Roadster is a fully electric sports car, and is the first car to be produced by electric car firm Tesla Motors. Tesla claims prototypes have been able to accelerate from 0-60 mph (100 km/h) in under 4 seconds, and reach a top speed of over 130 mph (210 km/h).



With Power Electronics Module (PEM), Most of the subsystems in the Tesla Roadster are completely electronic and under direct software control. But unlike all other cars, these systems are not a hodge-podge of independent systems — instead, they are designed as an integrated system, the way complex network and computer systems are designed today.

Dodge Charger SRT8 Super Bee 2007 is capable of 0-60 mph in the low 5 seconds, 0-100-0 in under 17 seconds and 60-0 mph braking in approximately 110 feet. A new 2007 Super Bee model was introduced at the 2006 North American International Auto Show. This model is based on the Dodge Charger SRT-8 and uses special "detonator yellow" paint with flat black hood and fender decals. It is a limited edition car, with only 1000 to be made in 2007. Jada Toys released an SRT-8 version of this car in mid-'06. The Dodge Charger SRT-8 Super Bee has a HEMI 6.1 Liter engine achieving about 425bhp.

The GXP version of the Pontiac Solstice debuted at the Los Angeles Auto Show in January 2006. It is powered by a new 2.0 L Ecotec engine equipped with a dual-scroll turbocharger. The engine's output is 260 hp (193 kW) and 260 ft·lbf (353 N·m). This is the highest specific output of any engine in the history of General Motors at 2.1 hp (1.6 kW) per cubic inch, and it is the first gasoline direct injection engine from an American automaker.

The Volkswagen Passat has been part of Volkswagen for the better part of 35 years. It has undergone six transformations from the time it was first introduced in 1973. However, that number is about to change come to 2011 when Volkswagen releases a new wave of Passat automobiles.



Although the new Volkswagen Passat CC is still in its rendering stages, the initial images released by the company have given us a glimpse of something brimming with potential. Based on its current design, the new Passat still makes use of the tripartite design for its front bumper and has incorporated a sleeker-looking set of headlights. Its current design is pretty much inspired from Audi’s A6 Avant, although it’s said to be slightly bigger. Reports indicate that it will maintain the same engine type but will make use of a more versatile modular platform.

Sources: TopSpeed, Wikipedia, AutoBlog

I've escaped from the children's Christmas party in my office to report on an important statistical indicator:

This year, the traditional Christmas CPI runs about $21,080.10. Or so says PNC Wealth Management, which measures the change in cost of living by indexing the gifts from the seasonal song "The Twelve Days of Christmas." It appears as though, despite bearish commodity markets, trumpeter swans a-swimming and turtledoves would have been excellent investments. The NYT has the rest here.

Happy Christmas!

On the Origin of Species will celebrate its 150th anniversary in 2009. In honour of this, The Economist has devoted part of its Christmas special to reviving the discussion about the relevance of Darwin's insightful thesis in understanding number of fields, including music, shopping, and crime and punishment.

I look forward to these Christmas specials every year, and this one didn't disappoint. The article on murder, justice and wealth is the best one: it is controversial, thought-provoking and even somewhat related to IPE - it cuts to the very core of how we organize our social contract and welfare state.

You may not agree with the deterministic tone of the articles, but it is definitely worth a read.

Not to be outdone by Canada, Belgium goes even further by layering a government collapse onto an economic crisis.

A supposed attempt by members of the government to influence a court decision over the break-up of Fortis, a financial services operator, is the cause of Belgium's latest woes. Given the amount of government tampering in non-traditional areas of influence recently, it is nice to see that at least the Belgians consider the judicial system to be out of bounds.

(Flood markers on the exterior wall of Santa Maria sopra Minerva. Photo by Kyle Williams. Source.)

While writing our earlier post on Rome, we remembered that the city is pockmarked with stone markers accurately recording the dates and high water marks of historic flood events. Most are embedded on the sides of buildings, and their inscriptions read something like this:

ANNO DOMINI MCDXXII IN DIE SANCTI ANDREE CREVIT AQUA TIBERIS USQUE AD SUMITATEM ISTIUS LAPIDIS TEMPORE DOMINI MARTINI PAPE V ANNO VI.

Or:

In the year of the Lord 1422 on the day of Saint Andrew the water of the Tiber rose as far as to top of this stone, in the time of Pope Martin V, his sixth year.

In many markers, a finger, from which a swirl of lovely, frothy curlicues swooshes out, points instead to the upper limit of inundation.

According to Aquae Urbis Romae, “nearly one hundred flood markers still exist,” with the earliest dating to the 13th century. None from earlier eras are extant, but presumably there were many, a collective testament to a watery past.

When it wasn't being ravaged by veritable dry disasters such as barbarian invasions, plagues and fires, Rome drowned.

(Rome's Trevi Fountain. Photo by David Iliff. Source.)

Something about the Tiber River nearly breaching its banks and nearly submerging Rome in torrents and mud earlier this month reminded us of an antipode event last year. It's one of our favorite stories that entire year.

As reported by Reuters, “water supplying Rome's world-famous Trevi Fountain was cut off when a builder across town damaged a 2,000-year-old pipe.” Luckily enough for the carabinieri who might have had a riotous mob of tired, sweat-drenched tourists on their hands, the fountain didn't dry out; it simply recycled the water already in its basin. Unfortunately, “many smaller Rome fountains spluttered to a halt.” Equally unfortunate, we didn't hear too much of pissed-off Germans and English hydro-hooligans ransacking museums and pillaging nearby archaeological sites.

But what could have caused these minor urban disasters?

A search using a waterborne video camera through the ancient pipe tracked the blockage to a house in the high-end Parioli neighborhood on the other side of the Villa Borghese park, where builders were making a private underground car park.

A spokesman for the [local] water company said the builder had broken the pipe, then tried to mend it with concrete, but instead had filled it in.

Interconnected narratives of spaces, infrastructures, people, histories — all of that — all incredibly fascinating.

But we weren't satisfied with how the story ended (the water was temporarily diverted to a “younger pipe” while repairs were being done): so let's concoct some plot points for the pilot episode of, say, CSI: Rome. Let's imagine that a body has been encased in that concrete.

To solve this murder case, an obscenely photogenic forensic cartographer must map out the Eternal City's subterranean trash heap of functioning and disused aqueducts. Is it a simple mafia hit or is it something more deliciously sinister, a more expansive, twist-n-turny mystery that can be story arced through an entire season, even the whole run of the series?

“Follow the flow,” orders his supervisor.

However, he soon realizes that the technology at his disposable can't possibly do such a complex task. He calls 811, but no one answers, and it's not even lunch time. “So Italian,” he grumbles, in Italian.

Desperate, he makes a call to the Italian subsidiary of some leading global research company to see if they can supply him with advance technology. He knows that it'll be tit-for-tat, that at an unannounced later date, they will call in their favor and he will have to oblige them unconditionally, he is still willing to go into a bargain. Primetime televisual exposition requires that the company immediately procures for him exactly the right tools for the job: he is given a batch of RFID-tagged robo-spiders and dedicated access to their private fleet of spy satellites.

The mapping begins. Large sets of numbers are uploaded, downloaded and then crunched by supercomputers. Slowly, Rome's negative voids get digitally unearthed.

So begin as well those disembodied whispers, furtive glances from strangers in the streets, vague feelings that the contents of his office desk have been messed about. Up in those gilded residences of Parioli, a curtain parts slightly each time he comes by to conduct his investigation. There are forces working to derail him, but there are also others who want his map completed. But why?

During one espresso-filled night, he gets his first major break in the case: from out of that rhizomatic mess of ancient and modern hydro-infrastructure, a pattern emerges...

In the Archives:
Ensanguining the Trevi

(A Saudi policeman surveils the crowded landscape of Mecca and Mina during the annual Hajj. Photo by Hassan Ammar/AP Photo.)

Counting Crowds: it's all politics really.

The Parkless Park: the pageantry of mass psychology.

Crowd Dynamics Ltd.: services include crowd control modeling, evacuation planning, traffic management, pedestrian flow engineering, and queuing analysis.

Pedestrian Laboratory: subjecting human test subjects to urban nightmares in order to make public spaces more user-friendly.

Reconfiguring the Jamarat Bridge

The Kumbh Mela Array: people power, Part I.

The Second Great Leap Forward Pamphlet #14: Queuing: “It's civilised to queue, it's glorious to be polite.”

Modeling Urban Panic: can you predict crowd behavior? If so, what would that mean to the built environment?

Crowded: people power, Part II.

Mapping the Inauguration: imagining a multi-touch urban planning orgy.

(Photo by Mark Wilson/Getty Images.)

Today in Washington, D.C., at a meeting of the Armed Forces Inaugural Committee, a 40-by-40-foot map being used to plan out next month's presidential inauguration was revealed to the public.

One can't help but be utterly fascinated by the image of military personnel swarming around this map or looking on from above in the bleachers to play out scenarios of what will happen and what might happen in a sort of cartographic war game. They aren't scheming an invasion of some foreign shore but rather the invasion of the nation's capital by the populace.

Parade routes are highlighted, staging areas parceled out, and observation platforms and giant viewing screens placemarked. Critical to any large events, outflow zones are delineated, first aid stations positioned, and emergency evacuations modeled to determine the best way to control the incoming flood and counteract any disastrous perturbation. Equally important to these security measures, a mobile sewage infrastructure (i.e., porta-potties and pump trucks) to be grafted temporarily onto the grid is also being devised.


(Photo by Mark Wilson/Getty Images.)

But wouldn't it have been incredible to learn that they are using wall-to-wall (or floor-to-floor) touch screens instead? Or how about that gigantic LCD screen used during the Beijing Olympics Opening Ceremonies? And that this “magic floor” is networked to tablet PCs and Blackberries and maybe even to iPhones? In the stands are federal and local officials working collaboratively and interactively at constructing strategies and counter-strategies, all the while seeing their work evolving right before them on the armory floor. While the majority may be participating in the process semi-remotely, others do so by literally standing on the screen: hands, feet and even whole bodies manipulating the digitized city in an orgy of multi-touch urban planning.

Or what about an airplane hangar retrofitted into the world's biggest CAVE™? During the inauguration, it would serve as the tactical command center.

Of course, all of this would be overkill; the analog map is sufficient enough. But what about when, at some future inauguration of an even more grotesquely popular president-elect, tens of millions of people are expected to descend upon the city on that one day?

I have been bullish on the dollar for some time (here and here and here).

As of 3:15pm, I am a dollar bear.

In a unanimous vote, the US Federal Reserve slashed the Fed funds rate from 1% to a range of 0.00-0.25% (apparently they can set a range, something I was admittedly unfamiliar with). This is the lowest range in Fed history, and the statement made it clear that rates would remain near zero for "some time" to come (a "commitment" until the economy reverses). The Fed also indicated that it will take unorthodox measures to combat the deepening recession, throwing out convention and undertaking broad quantitative easing through increasing reserves and expanding its balance sheet. I also believe it signaled a fear that we have entered a liquidity trap (as Krugman explains it, "that awkward condition in which monetary policy loses its grip because the nominal interest rate is essentially zero, in which the quantity of money becomes irrelevant because money and bonds are essentially perfect substitutes"). The Fed will likely purchase mortgage debt to influence their yields (as opposed to directly setting target rates) and T-bills.

If you believe the likes of Keynes, Friedman and Bernanke, the Fed has just prevented a depression.

How you ask? One perspective would argue that the great depression was deepened by the reluctance of monetary policymakers to bring rates to zero. An official attachment to the prevailing gold standard orthodoxy is a common explanation in IPE for this hesitation (see Eichengreen). Bernanke and co. have just squashed that fear (but an argument might be made that it is too much too late, that Bernanke went against his own instinct and balked). A second perspective thinks the effect of the interest rate tool is overstated. It instead focuses on the lack of liquidity provision as the determinant factor in plunging the world into depression. The argument is that by directly expanding the money base the value attached to cash and other short term securities falls to a level at which investors will move into higher yielding assets and consumers/banks will spend again. Well, Bernanke and co. has that base covered as well. Start priming the printing presses, cause we're about to see a whole lot of dollars. What, then, if we are in a liquidity trap, and neither policy option is sufficient alone or in combo? That's where the creativity comes in. It won't be easy, but the Fed is finally saying to the world, "We will do anything it takes to turn this thing around".

In my humble opinion, we should all be thankful that the real Benjamin Shalom Bernanke has finally shown up.

A funny side note- the folks at Fast Money on CNBC (a show I personally find obnoxious, but am sick in bed and dealing with it) recognized that Ben Bernanke's nickname is no longer appropriate. Bernanke is known as "Helicopter Ben". This stems from his scholarship on the depression, and his argument that monetary policymakers should figuratively dump money from a helicopter if necessary to fight deflation (derived from Milton Friedman's 'helicopter money' concept). The Fast Money crew noted that the Fed's actions have gone well beyond a "dump", and that a "Carpet bombing Ben" moniker would be more fitting.

I will be traveling all this week - be good.

The rapid US dollar resurgence of the past couple of months is being felt in a number of very specific ways. Rory has been following this trend closely (see posts on USD resurgence, other currency stuff and the, er, "GreenPack.") so I won't spend too much time on the specifics. What I have been meaning to discuss is the significance of this shift in a broader context.

I'm referring to the issue of "global macroeconomic imbalances." What are these imbalances, you ask? The expression refers to situation that has arisen because A) countries in East Asia and the Middle East have a lot of money they wish to lend somewhere safe and B) the United States has until recently been very willing to borrow.

On the other side of the equation, the American economy has been saving almost nothing and accumulating debt like it's going out of style (this applies to other rich developed economies, but less so). This is partly because there was no need: cheap credit from abroad helped fuel equity bubbles in the late 1990s and the recent housing bubble - people were getting rich. But this system was only sustainable so long as American deficits continued to grow and American consumption continued to hold up the world economy.

Some people have argued that this balancing act is (was) sustainable, but they are wrong. The real question is when and how will things re-balance themselves. There are two worries. First, that US deficits grow to the point where China & co lose faith in the dollar, dump their assets and cause a recession in the United States. I think that fear has always been overstated. To paraphrase the old banking addage: when you owe the Chinese government $100 million, you have a problem. When you owe the Chinese $1.9 trillion, they have a problem. If the US economy drops 10%, say, these Chinese-held assets will suffer enormous losses. So the fear of a "hard landing" caused by foreign investors was always problematic.

The second worry is that of a Sudden Stop: a slowdown in the US economy prevents them from acting as "consumer of last resort" and emerging markets are forced to readjust internally on short notice. This could also result in a "hard landing" for the economies involved - something to be avoided.

However, last week John Kemp pointed out that we no longer need to worry about which outcome it will be since the decision has been made for us:

The unfolding credit crisis is producing a deep recession, cutting U.S. demand for imports, and forcing the long-overdue adjustment in the trade deficit.

He concludes:

With recession taking care of the current account deficit, financial crisis reducing gross capital outflows, and foreign official buyers continuing to support the Treasury market, the U.S. currency has been a strange beneficiary of the crisis. If the dollar’s earlier decline was a symptom of over-fast growth, its rise is a by-product of recession.

That's all fine and good for the dollar, but what about everyone who was relying on US consumers to fuel growth? A hard landing is still a strong possibility in some parts of the world. Over the next few months we're going to find out just how capable some countries are at redirecting investment inwards and stimulating their own demand.

Further Reading: Patrick and I discuss China's counter-move of devaluing the yuan. Checkitout!

(Photo: Daylife)

Great quote from Congressman Barney Frank on 60 Minutes this evening. Frank, responding to the argument that an auto bailout is antithetical to America's Darwinian capitalism, said:

"Darwin was a great biologist, but I don't think he was much of an economist".

Fun facts: Frank doesn't own a computer, and composes letters in his office by Dictaphone. Remember the Dictaphone boys and girls? Yeah, me neither.

Politique
-A cholera outbreak in Zimbabwe worsens as Mugabe stays silent, then denies, then blames the Brits. Meanwhile, Ghana brings some hope to African democracy.
-EU leaders burned the midnight oil to reach consensus on key climate change and fiscal stimulus proposals. Deep divisions remained over the extent of coordinated fiscal measures at the national level. Concessions made to Ireland in return for second Lisbon Treaty referendum, but leaders are careful not to instigate a backlash in the UK.
-US auto bailout dies in the Senate, as Bush is forced to reconsider the dedication of TARP money to the carmakers.
Economia
-Ecuador defaults, as President Correa brands debt "illegitimate" and foreign creditors "monsters".
-How low can Treasuries yields go?
-The WTO admits defeat for 2008.
The Rest
-In the Prem, Arsenal stumble out of the title race, Liverpool and Chelsea underwhelm, and Villa break the top 4.
-Fresh off their hostile takeover of Citi, Somali pirates express interest a certain vacant US Senate seat.
-US film industry awards season kicks off with Golden Globes nominations, New York and L.A. film critics awards.
-Bush gets two "steps" closer to retirement:

Aston Martin Vanquish was designed after the “Project Vantage” concept car and remained unchanged until 2005, when the Aston Martin Vanquish S was launched, which had new wheels and more power. It was sold alongside with the original Vanquish and in 2006 it managed stand-alone sales. Approximately 1500 Aston Martins v12 Vanquish and Aston Martins v12 Vanquish S have been sold since the first launch in 2001. The production stopped in July 2007, moment celebrated by the introduction of the Vanquish Ultimate Edition. This was the only one sold with manual-transmission. Many criticized the Aston Martin Vanquish’s automatic gearbox, especially acclaimed Jeremy Clarkson, from “Top Gear”. This change was estimated at £13,250.


The Vanquish has a V12 engine of 6.0 l that generates 460 horsepower and 400 feet-pound torque. It has 6 speed semi-automatic transmission, with gear that changes under 250 milliseconds. It reaches 100km/hour under 5 seconds, using electronic throttle control and has a top speed of 300km/hour. The body structure is made of aluminum and carbon fiber and composite materials. Superior electronic developments allow the transmission to run automatically for sport modes or difficult weather condition, running on 19-inch wheels. The V12 engine was designed at the Ford Company in USA and shares certain components with the 3.0 l Duratec 30 V6.

The recent kerfuffle in Canadian politics managed to draw the attention of international spectators just long enough for some awkward questions to be raised about the nature of democracy in some of the United Kingdom's former colonies. Who exactly is the head of state in these places? What is their role? What does it mean to "prorogue" parliament? Is Stephen Harper's hair made of plastic?

Question no further, readers. All is explained through these links:

The Daily Show tackles the tough questions here (or here for Canadian readers).

I also enjoyed Dr. Boli's answer.

I have found a solution to the boring old government spending vs. tax cuts stimulus debate: it's QuikCash! Just in time for the holidays.

Part one.

Robert Mugabe proclaimed today that "there is no cholera in Zimbabwe."

Mugabe's comment immediately brought to mind another great linguist: Muhammed Saeed al-Sahaf. Mugabe has clearly studied the public relations work of the former Iraqi Information Minister. Don't remember him? Well, he blessed the world with rhetorical treats like, "There are no American infidels in Baghdad. Never!", or his description of the American and British as "tarteers", which is Iraqi slang for "a guy full of farts". My personal favorite: "they are nowhere near the airport ..they are lost in the desert...they can not read a compass...they are retarded." Well said, sir. Well said.

A Dec 10 report by the World Bank forecasts that real GDP growth in East Asian developing countries will fall by 1.8% from 2008 to 2009, to a rate of 6.7%. When including developed countries, the rates drop by 1.7% to 5.3% over the same period.

This is not too surprising since, as discussed below, the heavily export-oriented economies in the region are seeing the effects of declining demand impact their balance sheets. I wonder, too, about the rapid increase in the relative value of the USD over recent months. Many countries in the region fix their currencies (in varying degrees) to the greenback as a hedge against fluxuations in exchange rates - a resurgent USD means their exports are going to be more expensive just as demand is declining.

The good news from the WB: countries in East Asia are much better prepared for today's turmoil than they were a decade ago. In particular, "the countries which have entered this crisis with low debt burdens, surpluses in their fiscal and external current accounts and large external reserves will have the most room to maneuver as the crisis unfolds."

Sounds like pretty standard WB-fare to me. Part of the point of building up those large external reserves in the first place was to prepare for just such an occassion. I just hope it pays off and the analysts are "more right" than they have been in the past.

Lexus New Luxury Cars and SUVs from Lexus USA.Lexus belongs to the global Toyota family, whose members together constitute the world's third-leading automaker. We and our affiliated companies employ more than 31,000 in the United States, and our Lexus and Toyota dealers and suppliers employ an additional 160,000 persons. Toyota's investments in the United States amount to $12 billion.

The Acura TSX is an automobile manufactured by Honda, introduced in April 2003, it was sold only in the United States and Canada but from the 2009 model year on, will be avalable also in Mexico. Sold in North America under the Acura name, it filled the gap as Acura’s 4-door, entry-level sedan when the Integra sedan was discontinued in 2001. The TSX is badge engineered from the CL-series Honda Accord (or European Accord) sold in Europe, Japan and Australia. However, the TSX had a restyled interior and different suspension tuning when it was introduced. The interior is now standardized for all three markets. In the Australian & New Zealand markets, Honda sells the TSX as the Accord Euro, a smaller mid-size car, where the USDM Accord is sold in the large car category.


As of 2008, the Acura TSX 2008 is the smallest sedan in the Acura model line, other than the Civic-based CSX sold only in Canada.

The 2009 Chevrolet Corvette ZR1 will be one of the best value supercars money can buy when it hits U.S. showrooms in the second half of 2008. It’ll also be the most powerful and fastest production vehicle ever produced by General Motors with an expected top speed of at least 320 km/h (200 mph).

Check out CorvetteGuys.com and their large selection of parts for the 1984 Corvette.

The Cadillac CTS-V, based on Cadillac’s critically acclaimed CTS sports sedan, expresses the full extent of the brand’s dramatic design and technology. Designed to enter the stratosphere of the world’s fastest and most exclusive luxury sedans, CTS-V includes advanced performance technology such as a supercharged 6.2-liter V8 engine and Magnetic Ride Control, the world’s fastest reacting suspension.



The new CTS-V comes standard with a nearly complete collection of features, including a hand-crafted cabin, a 6-speed manual transmission and a Bose surround sound system with a 40-gigabyte hard drive with a USB port. In addition there are a few options available, including a new 6-speed automatic transmission with steering wheel mounted shift buttons, 14-way adjustable Recaro performance seats, microfiber interior accents and a large “Ultra-View” sunroof.

Mazda Taiki, the latest concept car form the Japanese producer, follows the path of Mazda’s “flow” design concept (latest example is what’s probably going to be the next Mazda RX-7) with elements of real-world technologies. The Taiki is equipped with a next-generation RENESIS rotary engine under the hood, and the rear-wheel-drive concept is a two-seater.





The Japanese word “Taiki” roughly translates to atmosphere. Mazda used this name to equate the car’s stretched cabin, short overhangs, and glass canopy with the “protective mantle” around Earth.

Mitsubishi Evolution in the category of Japanese compact sports sedans. And hell yeah, the STi has proved to be a formidable adversary to Evolution for more than a decade now. The two have, in fact, virtually dominated the international rally scene – until Ford came up recently with the Focus WRC – with the Evolution having a slight edge.




The focus, however, is on the dogfight between Evolution and STi, both cheaper than the typical European muscle cars, yet both fairly powerful on the tough road. See how the two matched up well against each other in a recent unofficial face-off.