There have been some rumbles about Italy for a while. Italy's budget deficits are relatively modest compared to, say, Ireland, but their debt is about 120% of GDP. The government has passed a plan that will balance the budget by 2014, but as with most such plans, most of the cutting comes later, while the current cuts are small. This may well be sensible fiscal policy, given the current economic climate, but it is not reassuring to the markets. Mike Shedlock estimates that Italy needs to borrow about €356 billion ($500 billion) in 2011 to cover its deficit, and roll over outstanding debt. Their 10-years are now trading at something north of 5%. Most of the estimates I've seen say that a debt death spiral becomes likely when rates hit somewhere between 6-7%, because the debt service costs start blowing up the budget deficits.
If Italy goes, it's not clear that the rest of Europe can save them. In the FT, Neil Dennis says people are talking about doubling the euro bailout fund to €1.5 trillion--or about three times the size of TARP. And you may have noticed that the bailout fund has not actually stopped Greece's descent into debt madness. Italy's public debt is not much smaller than Germany's, even though the latter obviously has a much bigger (and richer) economy. In the event that things really go south on the Italian peninsula, I don't think there's enough money in the rest of Europe to provide a rescue package.
Meanwhile, conditions in the other PIIGSs are worsening. European leaders seem to be giving up on the notion of some sort of voluntary debt swap after the ratings agencies noted that they would be forced to call this what it is: a default. Since the Greek debt load does not seem to be in any way sustainable, they're going to have to do something. Riots in Athens seem to be making it increasingly clear that over the long term, "something" is not going to be indefinitely decreasing their government consumption in order to make debt service payments. That leaves making bondholders take some sort of a haircut, aka default. It sounds as if the continent's financial leaders are starting to decide that if Greece's only option is some kind of default, they might as well bite the bullet and do the thing.
This will not be pretty. For starters, if they default, but stay in the euro, then unless really considerable aid is forthcoming from the rest of Europe, they're going to lose most of the advantages of the euro (low debt premium) while retaining the disadvantages (excessively tight monetary policy for a country that is going to be experiencing capital flight and even deeper recession). Countries like Argentina got at least some tourism and export boost from very cheap prices after they defaulted and went off their currency peg; Greece won't even get that if the euro remains at an ouchy 1.4 to the dollar. (If it doesn't remain there, but instead sinks . . . well, that means the euro zone will be having all sorts of other problems. More on which in a minute.)
Of course, even defaulting and going off the peg is hardly a gateway to paradise. It is true that after an initial period of horrifying double-digit contraction, Argentina boomed . . . but Argentina was an agricultural commodity exporter in an era when soaring Chinese demand was causing rapidly rising prices in many commodity markets. And after playing hardball with their foreign investors, Argentina has had limited access to global capital markets, which means they've had to resort to some desperate measures, like seizing the Argentinian equivalent of 401ks, and running the printing presses, to keep the government's finances in balance. This weekend, the Wall Street Journal informed me that Argentina has now resorted to filing criminal charges against economic consulting firms whose reports indicate that actual inflation exceeds the officially reported numbers by a factor of two to three.
Either way, what Greece does will have implications for the rest of Europe--and for us. As NPR's Jacob Goldstein says, interbank lending between various European nations, and the US, "looks like a web made by an insane spider".
Once Greece defaults, the immediate outcome is crisis, not calm. Within Greece, they'll need to find some way to close their primary deficit, and stem capital flight, while the economy craters. Outside of Greece, Portugal, Ireland, Spain and Italy will face growing pressure on their debt. The euro may plummet--good for German exports, not so good for attracting the kind of capital needed to keep the banking system solvent. And the rest of us will be scrambling to keep the contagion from taking down our banking systems, or our economies. No one wants another Credit-Anstalt. But I'm not sure anyone feels quite confident we can prevent it. As I tweeted yesterday, if the drama continues on both sides of the Atlantic, we may soon get to witness a paradox: where does a capital "flight to safety" go if America defaults while the euro implodes?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
From the beginning of the project, we've had the fundamental question in mind of what this site is—which is to say, both what it's become (as regular readers know, a lot's changed here over time) and what we want it to be. Is it the website of a magazine? Is it a news site? Is it, as James Franco possibly once suggested, a blog?
The answers, we recognized, are all in one way or another yes. But we figured we'd try a thought experiment: What if we described TheAtlantic.com as a direct, dynamic, digital extension of our core identity in journalism—as a real-time magazine?
That seemed to us both authentic and aspirational: an idea that captured what The Atlantic has been doing in new media for years and a framework that could bring the right focus to rebuilding TheAtlantic.com now.
Mary Hamm was in pain, though it was hard to tell. She bustled around the Starbucks, pouring drinks, restocking pastries, and greeting customers with an unshakable gaze perfected during 25 years of working in hospitality. Her smile said, How can I help you? Her eyes said, I know you’re going to order a caramel Frappuccino, so let’s do this.
Occupying prime space in a Fredericksburg, Virginia, strip mall, beside a Dixie Bones BBQ Post, this Starbucks pulls in about $40,000 a week. Hamm, 49, had been managing Starbucks stores for 12 years. The problem was her feet. After two decades in the food-service business, they had started to wear out. She had two metal plates in the right one, installed over the course of five surgeries. Now her left foot needed surgery too. She doesn’t like to complain, but when I asked her how often she was in pain, she smiled and said quietly, “All the time.”
J.J. Abrams, the director tasked with bringing Star Wars back to the top of the crowded franchise heap, has always been happy to borrow. When he set out to make a new Star Trek and drag that moribund cinematic franchise back into blockbuster territory, he cheerfully swapped in some very familiar visual language to help it over the hill. Early on in the film, James Kirk (Chris Pine), nursing a desire to transcend his farmboy life, rides a motorcycle to see the U.S.S. Enterprise being built at a shipyard, and gazes up at it longingly. Star Wars fans would connect the scene to one at the beginning of the first 1977 film, when Luke Skywalker wistfully watches the dual suns of his home planet set; Star Trek's producers even called the scene "our Tatooine moment." Abrams has never exactly been a visionary artist, but he's a master of elevating the familiar—a fact made clear in the previews of his new Star Wars film, The Force Awakens.
When healthcare is at its best, hospitals are four-star hotels, and nurses, personal butlers at the ready—at least, that’s how many hospitals seem to interpret a government mandate.
When Department of Health and Human Services administrators decided to base 30 percent of hospitals’ Medicare reimbursement on patient satisfaction survey scores, they likely figured that transparency and accountability would improve healthcare. The Centers for Medicare and Medicaid Services (CMS) officials wrote, rather reasonably, “Delivery of high-quality, patient-centered care requires us to carefully consider the patient’s experience in the hospital inpatient setting.” They probably had no idea that their methods could end up indirectly harming patients.
And Americans? The land that gave the world the iPhone, the Declaration of Independence, and the Kinsey Report prefers emoji that depict technology, royalty, and… eggplants.
These preferences were revealed in a new report from SwiftKey, a software company that makes keyboards for iOS and Android phones. The report describes global trends in emoji usage and breaks them out by country and by language. Like nations themselves, it seems, emoji usage is also shaped by culture, climate, and geography.
What else did the report find? According to SwiftKey:
The most-used category of emoji used are “happy faces.” Happy faces, sad faces, and hearts make up more than 70 percent of global emoji usage.
In 1979, almost a year into the papacy of John Paul II, a novel called The Vicar of Christ spent 13 weeks on the New York Times best-seller list. The work of a Princeton legal scholar, Walter F. Murphy, it featured an unlikely papal candidate named Declan Walsh—first a war hero, then a United States Supreme Court justice, and then (after an affair and his wife’s untimely death) a monk—who is summoned to the throne of Saint Peter by a deadlocked, desperate conclave.
Once elevated, Walsh takes the name Francesco—that is, Francis—and sets about using the office in extraordinary ways. He launches a global crusade against hunger, staffed by Catholic youth and funded by the sale of Vatican treasures. He intervenes repeatedly in world conflicts, at one point flying into Tel Aviv during an Arab bombing campaign. He lays plans to gradually reverse the Church’s teachings on contraception and clerical celibacy, and banishes conservative cardinals to monastic life when they plot against him. He flirts with the Arian heresy, which doubted Jesus’s full divinity, and he embraces Quaker-style religious pacifism, arguing that just-war theory is out of date in an age of nuclear arms and total war. (This last move eventually gets him assassinated, probably by one of the governments threatened by his quest for peace.)
The Russian president’s press secretary, Dmitry Peskov, didn’t use that expression when we talked by phone, but that’s what he described to me: a man at the center of an ever-churning machine processing vast amounts of news and data at his command.
“Sometimes we’re wondering what is the limit for a human being for absorbing this huge amount of information,” Peskov told me, “but, well, it’s really a very, very, very heavy job.”
Peskov, speaking fluent English, described the operation. “First of all, the information and press department of the presidential administration prepares digests on print media, on Internet sources, on domestic media—federal and regional.
“We have special people working around the clock, preparing TV digests. We’re recording TV news on the [Russian] federal channels for him during the day. Obviously, it’s very hard for him to watch news so we make digests, let’s say, zip versions of TV news, divided into issues.”
Pope Francis is widely believed to be a cool Pope—a huggable, Upworthyish, meme-ready, self-deprecating leader for a new generation of worshippers. “He has described himself as a sinner,” writes Archbishop Desmond Tutu in Pope Francis’ entry on Time’s list of the 100 most influential people in the world, “and his nonjudgmental views on … issues such as sexual orientation and divorce have brought hope to millions of Roman Catholics around the world.”
But there’s one issue that can make even Cool Pope Francis himself sound a little, well, judgy. “A society with a greedy generation, that doesn’t want to surround itself with children, that considers them above all worrisome, a weight, a risk, is a depressed society,” the pontiff told an audience in St. Peter’s Square earlier this year. “The choice not to have children is selfish. Life rejuvenates and acquires energy when it multiplies: It is enriched, not impoverished.”
In the shower I share with my three roommates in my apartment in Mexico City, there are all the things you’d expect to see: a few bottles of Body Shop-brand shampoos and conditioners, and a bar of soap—the organic-looking brown kind with tiny splinters of unrefined material protruding from the surface. But there are also two bottles of Lactacyd, a brand of feminine wash.
“You should use it,” my roommate tells me. She’s an astute, outspoken woman in her early 30s who works as a journalist for one of Mexico’s most well-known liberal magazines. “It’s meant to get rid of or prevent infections,” she said.
For more than half a century, douches, or feminine washes, have been a staple in pharmacies throughout the world. Yet, here in the Distrito Federal, douching is a trend that seems to have gained serious momentum in the last two years, according to Karla Font, a Distrito Federal-based gynecologist with many patients who actively douche. A worker at Farmacía Paris in the Historic District told me that every day they sell at least 30 bottles.