Not only Design but Physics can also benefit

Is it just me, or does it feel like the “future” we all saw in TV shows and movies is getting closer and closer to reality? A team of researchers at MIT created a small atmosphere, the ZeroN, where you can interact with objects floating in your own space. This could be the potential birth of a live user interface where we can touch, instruct, and play with objects and images in the air.
“Our body and minds have developed great capacities for understand and manipulating physical environments,” said researcher Jihna Lee said in a video about the ZeroN. “The long-term vision is to embed computation and physical materials that can directly interact with us. In this way, we seek to redefine the relationships humans have with materials, space and digital information.”
Lee, who researches with MIT’s Tangible Media Group, created the ZeroN, a small, unenclosed space that uses electromagnets to suspend a ball in mid-air. The ball (and the space holding it) can remember a human’s touch and mimic the movement in space. The ball can also move along per-programmed paths that are fed to the magnet and the machine holding the magnet using software.
“Even if the user moves the ZeroN to a different position, the system can re-stabilize and keep the ZeroN suspended,” said Lee.
It can also act as a camera, recording 3D objects in its space, as well as work with a light source, showing how shadows would exist in real life on small models.
The magnet moves the ball, pulling and repelling it dependent on where it is commanded to go. The whole system exists on an arm that moves the magnet up and down and side by side, increasing the distance able to be traveled. The researchers used a “hall sensor,” which is constantly checking the ball’s position to record its movements.
The design industry could benefit from the technology, being able to build and interact with 3D models that can move and be manipulated without having to program it first into a computer. And as FastCo.Design points out, it could lead to even cooler inventions such as floating holograms that we can wrap around our arms and move in mid-air like Ironman.

In engineering, mathematics, physics, meteorology and computer science, multiscale modeling is the field of solving physical problems which have important features at multiple scales, particularly multiple spatial and(or) temporal scales. Important problems include scale linking (Baeurle 2009[1], de Pablo 2011[2], Knizhnik 2002[3], Adamson 2007[4]). Horstemeyer 2009[5] presented historical review of the different disciplines (solid mechanics, numerical methods, mathematics, physics, and materials science) for solid materials related to multiscale materials modeling.
Multiscale modeling in physics is aimed to calculation of material properties or system behavior on one level using information or models from different levels. On each level particular approaches are used for description of a system. Following levels are usually distinguished: level of quantum mechanical models (information about electrons is included), level of molecular dynamics models (information about individual atoms is included), mesoscale or nano level (information about groups of atoms and molecules is included), level of continuum models, level of device models. Each level addresses a phenomenon over a specific window of length and time. Multiscale modeling is particularly important in integrated computational materials engineering since it allows to predict material properties or system behavior based on knowledge of the atomistic structure and properties of elementary processes.

What Singapore benefits from Big Brother?

By Palash R. Ghosh: Subscribe to Palash’s

May 15, 2012 5:57 PM GMT

While Asian giants China and India rapidly build up their already huge military arsenals, the tiny, prosperous Southeast Asian city-state of Singapore has been quietly ramping up defense expenditures at a rate disproportionate to its size and population.

On a per-capita basis, Singapore’s arms-buying spree is topped only by the U.S., Israel and Kuwait.
Singapore’s Defense Minister Ng Eng Hen told parliament recently that the government may spend up to 6 percent of GDP on defense — overall, military expenditures have climbed 4 percent annually from S$10.7 billion (US$8.6 billion) in 2008 to reach the S$12.3 billion ($US9.7 billion) level in 2012.
“Our overall approach is to maintain a stable defense budget that grows gradually in absolute terms, and to manage that prudently,” Ng told lawmakers.
“Such steady spending is a critical enabler, because it allows [The Ministry of Defense] to take a long-term view and obtain the best value for our defense investments.”
Put another way, almost one-fourth of Singapore’s national budget will be spent on defense this year, making the Defense Ministry the No. 1 recipient of the budget allocation.
(By contrast, Israel, which is surrounded by enemies and lives under the constant threat of military attack, spends about 15 percent of its GDP on defense, andit pays much more in social and health care costs than does Singapore.)
Ng defended Singapore’s military spending, insisting the Ministry of Defense only buys what is required to satisfy its security needs.
“[We are] mindful of our responsibility to spend carefully and wisely,” he said.
“We buy only what we need, scrutinize available options for the most cost-effective solution.”
In fact, Southeast Asia, as a whole, has embarked on a bewildering armament spree in recent years. Singapore’s nearest neighbors, Malaysia and Indonesia, have also been buying guns, tanks and missiles and other expensive toys at a hectic pace.
In 2011, the region’s defense expenditures jumped by 13.5 percent to $24.5 billion, according to IHS Jane. By 2016, that number is expected to reach $40 billion.
Strangely, there have been almost no conflicts between Southeast Asian nations in several decades. Thus, the mania for acquiring weapons appears to be based on some existential worries and has, of course, been financed by rapid economic expansion.
However, Singapore appears to be unique in its paranoia. Not only does Singapore buy arms, but the Borgia-like city-state also sells an array of weapons to other nations (both developed and emerging).
Part of Singapore’s obsession with security lies with the Strait of Malacca, the narrow stretch of water that serves as a crucial link between the Indian and Pacific Oceans and which Singapore heavily depends upon for trade and transport. About 40 percent of global trade passes through this narrow conduit of water.
Duncan Innes-Ker, Asia analyst with the Economist Intelligence Unit (EIU) said Singapore has long been a relatively high spender on defense.
“In the very early years this was probably at least partly driven by its poor relations with much larger neighbors, which left it feeling insecure,” he said.
“China may now be playing the role of the intimidating neighboring power, but these days strong defense spending is more a reflection of the city-state’s need to police the region’s shipping lanes. Singapore depends on seaborne trade for its prosperity, so ensuring the smooth passage of vessels through the Strait of Malacca is vital.”
In the past, Innes-Ker noted, Indonesia and Malaysia tended to underspend on defense, leaving wealthier Singapore to bear much of the burden.
In keeping with its security priorities, Singapore has established very close relations with the U.S.
In fact, Singapore just signed a $435 million deal to sell laser-guided bombs, vehicles and aerial refueling services, among other things, to the U.S.
Indeed, American defense contractors account for 43 percent of Singapore’s arms purchases.
In recent years, Singapore has also signed contracts to purchase 12 F-15 fighter jets from Boeing; 110 Leopard-2 battle tanks from Germany; and six missile frigates from France – all, highly sophisticated, state-of-the-art devices.
Singapore’s military ties with Washington go deeper than just arms transactions. The city-state recently agreed to permit American warships to deploy in its waters for a 10-month engagement, raising fears in China, as Washington shifts its military focus from the Middle East and South Asia to the Far East.
As part of that strategy the U.S. will base four of its Littoral Combat Ships in Singapore.
Singaporean Defense Minister Ng told The Straits Times newspaper: “The U.S., I would say, is our closest security partner, and I don’t see any country displacing the U.S. as that.”
However, Singapore’s single-minded devotion to its military and defense goes all the way back to its chaotic founding in 1965, when it separated from Malaysia in a messy “divorce” partially exacerbated by racial tensions between Malays and ethnic Chinese.
For example, since that time, all males in Singapore have been mandated to military service. According to, Singapore’s military currently has about 72,000 active personnel and about 300,000 active reserves. This means that almost 8 percent of the country’s population is either on active or reserve duty.
In a thesis paper on Singapore’s defense policy, Maj. Lee Yi-Jin of the Singapore Armed Forces wrote: “The magnitude of the country’s defense expenditure has… led to the occasional raised eyebrow. For example, Singapore’s reported defense budget for 2009 was more than that of Malaysia’s and Indonesia’s put together, which some may find surprising given the relative sizes and populations of these three neighboring countries.”
[Indeed, Malaysia and Indonesia boast a combined population of about 270 million, 54 times the manpower of Singapore.]
Lee further declared that military spending in Singapore is not directly proportional to any perceived security threat, but rather is designed to expand the small nation’s role in international affairs.
“The role of Singapore’s defense policy has since evolved alongside changes in the security environment,” he wrote.
“As the threat of inter-state conflict has receded, the significance of Singapore’s defense policy has become increasingly associated with its contributions to Singapore’s non-military instruments of power, and in particular its economic and diplomatic instruments… The primary motivation underlying Singapore’s defense policy has shifted away from a provision of security and toward an increase in the country’s international influence.”
Lee also said he expects to see no change in Singapore’s heavy emphasis on defense and military upgrades.
“Singapore’s leaders would appear to have skillfully removed any debate on Singapore’s defense policy from the realm of economic cost-benefit analysis,” he wrote.
“Instead, the current policy is couched as necessary to maintain the unquantifiable concept of ‘deterrence’, and to provide the stable environment necessary for foreign investment and productive economic activity.”
Moreover, given Singapore’s healthy financial status, the government is highly motivated to maintain exorbitant defense spending.
Innes-Ker of EIU noted that the country has a large trade surplus and its fiscal position is extremely healthy, so there is little pressure for it to reduce military spending on either of these accounts.
“While defense spending may divert some resources away from social priorities, this does not appear to be a major concern for most [Singaporean] citizens,” he said.
Dr. Tim Huxley, executive director at The International Institute for Strategic Studies-Asia, commented that Singapore’s defense policy and strategy provides the city-state with an enviable degree of external security which has, in turn, reassured local and foreign business investors, thereby providing one of the bedrocks of Singapore’s economic success over the last 45 years.
“While Singapore spends a lot on defense, some of this spending has fed back into the wider economy, partly through the development of a local defense-industrial sector, which provides a significant part of the SAF’s material requirements and has also exported defense equipment on a small scale.”
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As a net importer of defence technology, Singapore has little hope of creating it’s own technologies for export, everything it needs to rely on Big Brother with second-hand hand me downs, will it pose even a threat to other nations? Singapore is too small to be even considered with Isreal, maybe it just have to totally rely on Big Brother, to watch it’s own backside.
Throwing money at defence budgets is a very unsecure way to build trust and confidence, capabilities and technologies might be built by a more intelligent way like the defence of Vietnam War. If I have such a budget, I rather buy the technology to build and modify my own capabilities. I will rather expand the capabilities of my police patrol boats rather than the navy, and scale down battleships to missile launching submarines, retire the entire F16s & F5 with subsonic 5th generation trainer fighter jets, and increase my radar and air defence capabilities.
– Contributed by Oogle.

"DRACHMAGEDDON" if Greece leaves the Euro

ATHENS/LONDON – In Athens, the homeless are on the streets in growing numbers, soup kitchens feed twice as many people as a year ago, and the poor are diving into garbage bins in search of scrap they can sell.
Greece is close to breaking point as it struggles with austerity targets set by creditors, but this is just a foretaste of the nightmare of unrest, hunger and even anarchy that could engulf the debt-crippled nation if it is forced out of the euro.
If the exact economic impact of such a move is hard to nail down – newly issued drachmas devalued by up to 70 per cent, runaway inflation, a banking meltdown, a collapse in trade – the implications for ordinary Greeks crushed by the debt crisis are even harder to predict.
Without international bailout cash, salaries and pensions would go unpaid and violence, political extremism and uncontrolled emigration could quickly follow.
After voting inconclusively for parties that opposed foreign-imposed austerity, including the neo-Nazi Golden Dawn, Greeks head to the polls again in a month’s time. This election is being portrayed internationally as a referendum on the single currency, even if Greeks do not yet see it that way.
A Greek exit from the 17-nation euro zone, or “Grexit” as some economists have called the once unthinkable eventuality, risks turning the nation into what would be be close to a failed state on the edge of the European Union, one of the most prosperous societies the world has ever known.
Greece imports 40 per cent of the food it consumes, nearly all of its oil and natural gas and much of its medicine. It has long been clear to some commentators that there could be trouble ahead.
Confronted with post-exit turmoil, foreign suppliers would simply put up the shutters until the situation becomes calmer, leading to acute shortages of basic commodities, which could fuel serious civil unrest, according to Bank of Greece Governor George Provopoulos.
Even if Greece did manage to import limited amounts of food and other basics, they would be cripplingly expensive.
Provopoulos warned as long ago as December that a return to the drachma would be “real hell”, with Greeks forced to resort to barter during the transition period between the two currencies, “trading a kilo of olive oil for three kilos of flour”.
“There will be shortages in basic staples. Without fuel, the army and the police would not be able to move their vehicles.
After a long period, things will return to a better balance. But during the first transitional phase we would be experiencing a nightmare scenario,” Provopoulos said.
A former finance minister, Yiannos Papantoniou, saw trouble ahead nearly a year ago: “Greece would not be able to support 11 million people so there will be huge emigration flows,” he told Reuters Insider television last July. “Disruptions, social disruptions will come. I would say a regime of total anarchy.”
Last year 23,800 Greeks emigrated to Germany alone, 90 per cent more than the previous year, German data show and Greeks are queuing up to learn German.
Most economists agree the austerity measures Greece is labouring under offer it little hope of recovery near term, and some argue that if it leaves the euro, it could export its way back to health on the back of a vastly devalued currency.
But, barring tourism, it does not have businesses or industries that could drive such a recovery.
Even if freed of its debt-cutting targets, the fact the country runs a primary deficit – spending more than it takes in taxes – means it would have to continue austerity measures and, because it would be shut out of international markets, it would have no one to borrow from.
“Even if you strip interest payments, with a primary current account deficit at about 10 billion euros, it would mean economic life would grind to a halt,” said Yannis Stournaras, head of Greek think tank IOBE.
“Greece would have a hard time to import oil, foods, medicines and other primary inputs. Imagine the navy, police, without fuel. Natural gas spigots would close. GDP would be hurt by a battered banking system. Public debt would increase.”
Greece’s recent history gives a taste of the political turmoil that could follow.
After German occupation in World War Two, the country plunged into bitter civil war during the 1940s. Political turbulence in the 1960s was capped by a colonels’ coup d’etat in 1967, with democratic elections not held until seven years later.
Conditions are already hard for business people in Greece, with the country in its fifth year of recession.
“The first shortages have begun to appear,” said Melina Ferousi, a businesswoman who imports paper and stationery items. “French and Spanish suppliers are still selling on credit but German ones are particularly strict and are refusing to do so.”
Some German suppliers have said they could not extend credit to Greece even if they wanted to because their insurers are refusing to cover the merchandise.
Greek importers and exporters alike are finding it difficult to do business with foreigners, said Vassilis Korkidis, chairman of the retailers’ union ESEE.
“It’s not that they’re not trusting their individual Greek business partners anymore, it’s the Greek banks they no longer trust,” Korkidis said.
But business people do not see an exit from the euro as solving anything. Greece imports practically all its machinery, tools and software, so companies would be unable to grow.
“If we return to the drachma, nobody will be able to do business abroad anymore,” said Iraklis Megas, who imports animal food. “I’ll have to shut down my company the next day and so will thousands of others.”
How Greece would manage a transition from euro to drachma is unclear. A possible precedent is the split of Czechoslovakia into two countries with their own currencies in 1993.
All cross-border money transfers between them were halted and border controls were tightened. Stamps printed secretly in Britain were glued on 150 million banknotes, which were trucked around the country with the help of police and the army.

Greece would have to try something similar, with some suggesting euro notes might be stamped with a D for drachma, but there are doubts whether it could introduce a new currency in a short period of time.
“In my assessment, Greece does not have the strength of institutions to pull that one off in an orderly way. Instead, it’s likely to be a slippery slope, which – through chaos and ruin – may then end the same way months or years down the road,”said Erik Nielsen, global chief economist at Unicredit.
In the end, since the International Monetary Fund, the European Central Bank and euro zone governments are now left holding most of Greece’s 250 billion euro debt mountain, they may decide it is best to try and keep things going rather than drop the curtain on Greece’s euro dream and face heavy losses themselves.
That is the calculation being made by the SYRIZA party, which had until recently been surging ahead in opinion polls with its radical anti-austerity platform that European leaders say will lead to certain bankruptcy and an exit from the euro.
But a poll on Thursday showed a return in support for the establishment parties that negotiated the bailout, a sign the nightmare scenario of life outside the euro may be sinking in.
Is there really a problem with the global economy? What does Facebook IPO tells you today? The problem with Greece is self made, contigency plans to prevent the fallout from other EU states with the watchful eyes of World Bank and IMF is in place, EU will not collapse or fall into a recession, cause the crisis is not really a crisis, it is a political fallout from those who are trying to figure an easy way out of reforms and austerity measures but will it work? There is room for discussion but fundamentals still rule at the end of the day, you cannot reject the World Bank/IMF bailout and stay in the EU without getting burnt, and the world will carry on even if the Drachma crashes thru the brick wall.
– Contributed by Oogle.

Necrotizing fasciitis and Stem Cells Treatments

Necrotizing fasciitis (NF), commonly known as flesh-eating disease or flesh-eating bacteria syndrome,[1] is a rare infection of the deeper layers of skin and subcutaneous tissues, easily spreading across the fascial plane within the subcutaneous tissue.
Necrotizing fasciitis is a quickly progressing and severe disease of sudden onset and is usually treated immediately with high doses of intravenous antibiotics.
Type I describes a polymicrobial infection, whereas Type II describes a monomicrobial infection. Many types of bacteria can cause necrotizing fasciitis (e.g., Group A streptococcus (Streptococcus pyogenes), Staphylococcus aureus, Vibrio vulnificus, Clostridium perfringens, Bacteroides fragilis). Such infections are more likely to occur in people with compromised immune systems.[2]
Historically, Group A streptococcus made up most cases of Type II infections. However, since as early as 2001, another serious form of monomicrobial necrotizing fasciitis has been observed with increasing frequency.[3] In these cases, the bacterium causing it is methicillin-resistant Staphylococcus aureus (MRSA), the antibiotic used in the laboratory that determines the bacterium’s sensitivity to flucloxacillin or nafcillin that would be used for treatment clinically.
Some published case reports have implied a possible link between use of non-steroidal anti-inflammatory drugs and NF, though the evidence of the link was said to be weak because of a small number of case patients and it was unclear whether the drugs just masked the symptoms of a secondary infection or were a cause per se.[4]

Stem cell treatments are a type of intervention strategy that introduces new cells into damaged tissue in order to treat disease or injury. Many medical researchers believe that stem cell treatments have the potential to change the face of human disease and alleviate suffering.[1] The ability of stem cells to self-renew and give rise to subsequent generations with variable degrees of differentiation capacities,[2] offers significant potential for generation of tissues that can potentially replace diseased and damaged areas in the body, with minimal risk of rejection and side effects.
See also: Cell therapy
A number of stem cell therapies exist, but most are at experimental stages or costly, with the notable exception of bone marrow transplantation.[citation needed] Medical researchers anticipate that adult and embryonic stem cells will soon be able to treat cancer, Type 1 diabetes mellitus, Parkinson’s disease, Huntington’s disease, Celiac Disease, cardiac failure, muscle damage and neurological disorders, and many others.[3] Nevertheless, before stem cell therapeutics can be applied in the clinical setting, more research is necessary to understand stem cell behavior upon transplantation as well as the mechanisms of stem cell interaction with the diseased/injured microenvironment.[3]

Thursday, May 17, 2012

ATLANTA – A Georgia college student who has already lost a leg to a rare, flesh-eating bacterial infection is now expected to suffer the loss of her fingers too, her father said.
Aimee Copeland, 24, was kayaking and zip-lining along the Little Tallapoosa River near Carrollton, Georgia, on May 1 when the line broke and she sustained a cut to her calf.
Emergency room doctors closed the wound with 22 staples and released the woman, a graduate student at West Georgia University, her father wrote in a post on Facebook.
The next day, Copeland complained of severe pain and returned to the emergency room where she was given a prescription pain killer. The pain continued and the following day she went to a doctor who gave her a prescription for antibiotics. The doctor also ordered a magnetic resonance imaging test which was negative, her father said.
On May 4, Copeland was pale and weak and went to a hospital where doctors diagnosed her with necrotizing fasciitis, a rare flesh-eating bacterial infection.
Copeland, who already suffered the amputation of a leg at the hip, was still listed in critical condition on Sunday, said Barclay Bishop, spokeswoman for Doctor’s Hospital in Augusta.
She would not provide any other details, but Aimee’s father, Andy Copeland, said in a web posting over the weekend that her fingers were also likely to be lost to the infection ravaging her body.
He said she may retain the use of her palms after surgery, however, something that would potentially leave her with enough muscle control to use prosthetics.
Doctors are “awaiting a safe time” before conducting further surgery, the father wrote.
Necrotizing fasciitis is often initially overlooked by doctors because it invades tissue deep inside the wound while the outer wound appears to be healing normally, Dr. William Schaffner of the Vanderbilt University Medical School said.
“This often is a very subtle infection initially,” Schaffner said. “These bacteria lodge in the deeper layers of the wound. The organism is deep in the tissues and that’s where it’s causing its mischief.”
I have started more than 10 years back by stripping a black box and hitting it with inputs to study the outputs to learn everything about the black box, improvising it to software with closed codes to uncover it’s secrets, learning all the links, associations and groupings in the process, even finding out about the missing pieces, now I can even use my technologies to fill in the gaps, or find out the missing pieces of the jigsaw, incorporating it into my 3D search engine to help mankind find all the solutions and answers, as I have demonstrated many a times on my website, where I have found all the answers to research on diseases with the closest links that is available on the internet, with just a basic understanding on the topic without being a mad scientist, and I will freely give to mankind according to God’s wishes, you can continue to test my knowledge, but there are others I need to monetised, to help UN raise money to fight Hunger and Poverty, which I am sorry I am not able to help, because I have an obligation to God, for all the poor and the hungry of the world.
– Contributed by Oogle. 

There should be a Creative Commons Patent Licences

There should be Non Assertion Pledges and Assertion Pledges – For Standard Research work for Non-commercialisation and Commercialisation of Patent Licenses – if there is, I would be the first to sign up, cause it will simplify the process and legal costs of the minefields of patents. I would not mind to pay some costs for registration, but due to it’s simplicity, it will definitely be cheaper than registering an IP Patent which is so complicated.  – Contributed by Oogle.

Drafter’s Comments


Some commentators suggested that the estoppel theory that we rely upon for this pledge has uncertain enforceability. Particularly, in some countries, estoppel requires for there to be some pre-existing relationship between the parties. Due to this uncertainty, it was recommended that the Research Non-Assertion Pledge be implemented in a form that requires some form of execution or signature process (or registration). While this is a possible implementation of the Non-Assertion Pledge, I do not think it is necessary to implement a signature process. In particular, it follows the model established by the IBM Non-Assertion Against Open Software, the Eco-Patent Commons, and the Microsoft Open Specification Promise, all of which rely on estoppel.

Definition of Non-Profit Institution

An earlier draft included government agencies as a qualified non-profit institution, but this was removed due to the failure among our commentators to agree on the appropriateness of including government entities, other than educational institutions (educational institutions are already included as one of the categories).
It was pointed out that the definition of a Non-Profit Institution under sub-clause (ii) is a U.S.-centric definition, and alternative definitions of other countries, or under other countries’ laws were suggested. However, because an exhaustive list of such statutes is impracticable, sub-clause (iii) should be interpreted as being a catch all provision for non-profit entities in other jurisdictions.

Exclusive Licenses and Conflicting Transfers

It was pointed out by some commentators that a conflict could exist between an exclusive licensee and the beneficiary of the non-assertion. In some jurisdictions, for example, an exclusive licensee has the right to bring an infringement suit independently of the patent owner. Therefore, if the patent owner has already granted an exclusive license, then a beneficiary of the non-assertion may nevertheless face the possibility of suit from an exclusive licensee. It was recommended that we add a warranty that the patent owner has granted no exclusive licenses to the pledge patents. This, I decided not to do, due to the risks to the licensor in making that warranty. However, I strongly urge patent owners who are making the pledge to identify and specifically remove any patents that have been licensed exclusively from the non-assertion pledge to prevent such a conflict.

Subsequent Ownership Transfers

Some commentators pointed out that the Pledge may not be binding upon a subsequent assignee of the patent rights (such as a company that acquires the patent owner’s assets), because it is not well-established whether the unilateral promise on which the Pledge is based would be binding upon the assignee. This could depend on the details of the transaction (e.g., whether it’s an asset purchase or merger), whether the assignee has promised to honor the commitments of the assignor, and the legal doctrine applicable in a specific jurisdiction. It was suggested that I add a clause to the Non-Assertion Pledge that would either (a) require the patent owner to condition any sale or assignment of the patent rights on the continuing validity of the Pledge, or (b) recite within the Pledge itself that it is binding upon future purchasers of the patent rights. I declined to do this due to the risk pointed out by some commentators that such a clause might complicate or jeopardize future mergers & acquisitions involving the grantor. However, whenever possible, grantors are strongly encouraged to ensure that any future transfers of the patent rights are done subject to the Pledge.

Moody’s action will really start a crisis for EU

Updated 04:49 PM May 18, 2012
NEW YORK – Moody’s Investor Service carried out a sweeping downgrade of 16 Spanish banks on Thursday, including Banco Santander, the euro zone’s largest bank, citing a weak economy and the government’s reduced ability to support troubled lenders.
All the banks’ long-term debt ratings were downgraded by at least one notch, and some suffered three-notch cuts.
Spain’s banks, awash in bad loans after a real estate boom went bust, are at the heart of the euro zone debt crisis because markets fear a state bailout would put a severe strain on the country’s already stretched public finances.
Spain relapsed into an economic recession in the first quarter and likely faces a prolonged slump as the government tries to shrink its budget deficit by slashing spending.
“Amidst the ongoing euro area debt crisis, the Spanish government’s rising budget deficit and the renewed recession, sovereign creditworthiness has declined,” the ratings agency said. “This decline is a driver of today’s bank rating actions.”
Moody’s had cut Spain’s sovereign rating by two notches to A3 in February, placing it in the middle of its investment grade rating scale. It maintains a negative outlook on the credit.
Thursday’s move came after Moody’s downgraded 26 Italian banks on Monday and followed a press report about a run at troubled lender Bankia, Spain’s fourth largest bank. The Spanish government, which took over Bankia last week, denied the report.
Santander suffered a three-notch cut to its long-term rating to A3 from Aa3.
Moody’s also cut BBVA’s long-term rating by three notches to A3 from Aa3 and put the credit on a negative outlook. BBVA is Spain’s second largest lender. REUTERS

A “ring of defense” has to be built around eastern European neighbors Romania, Bulgaria and Serbia to help them cope with the fallout from a possible Greek exit from the euro zone, the European Bank for Reconstruction and Development (EBRD)’s chief economist Erik Berglof said on Friday.

The biggest of the three countries, Romania, will be able to withstand the crisis even though Greek banks have quite a significant presence in the country’s financial sector, officials from the central bank and commercial banks told on the sidelines of the EBRD’s annual meeting in London.
There are fears that Greek banks present in the region will not be able to finance their subsidiaries and some analysts have even expressed worries about withdrawals of funds from Greek banks.
“There are already measures in place [to deal with the effects of potential deleveraging by banks],” Berglof said. “We don’t speak about it much but… in these times of crisis one has to understand the importance of financial stability.”
“We still think there is a lot of willingness in Europe and some hope that there will be a solution in Greece,” he added.
When the first leg of the crisis hit Central and Eastern Europe in 2009, Western banks present in the region and the authorities in the respective countries met in the capital of Austria and created the Vienna Initiative – an agreement meant to deal with the effects of the Lehman Brothers collapse on the CEE region.
Under the Vienna Initiative, Western banks pledged to maintain funds in their Eastern subsidiaries despite the need for capital in the parent banks, to prevent a disorderly outflow of funds from the region.
The Vienna Initiative was successful in ensuring that there was no significant flight of capital from Eastern European countries but, because of the debt crisis in the euro zone, the region has still not recovered and a new initiative, called Vienna 2.0, was launched.
Under Vienna 2.0, Western banks pledged to maintain lending levels in the countries that receive aid from the International Monetary Fund in the region, including Romania.
Prudential Measures
“Solvency rate. Prudential measures,” Romanian central bank governor Mugur Isarescu told when asked about the measures the country takes to protect against a possible spillover effect from the crisis in Greece.
The solvency ratio in Romania’s banking system is above 14 percent and local regulators have said the local subsidiaries of Greek banks are well capitalized.
Romania has not seen significant outflows of foreign portfolio capital and no sign of withdrawal of deposits from banks, deputy central bank governor Cristian Popa said.
“I haven’t seen any sign of deposit withdrawals. Our concern is to prevent a possible disorderly deleveraging [of foreign banks’ subsidiaries in Romania] from taking place in the future, although parent bank exposure to subsidiaries in Romania has so far remained broadly stable.”
“What’s important is that the deleveraging doesn’t become disorderly, excessive or overly rapid.”
“Neither the international financial institutions nor the host countries wish to see a situation in which a credit crunch is created [because of deleveraging],” Popa said.
“Loans from foreign banks to their subsidiaries in Romania have not decreased so far. We are concerned about what could happen from now on,” he added.
Popa said the country was working with the International Monetary Fund on continuously improving stress test methodologies for the local banks, with Romania now being one of the most advanced EU member states in terms of banking sector stress testing.
The Romanian central bank deputy governor believes that Greece will be able to overcome its crisis and remain in the single currency.
“I still think it is more probable that Greece will stay in the euro zone, but it is important that it meets all its commitments,” Popa said.
Steven van Groningen, the President of Romania’s third-largest bank, Raiffeisen Bank Romania, said he was not worried about a direct impact of the Greek crisis, as Greek banks in Romania are well capitalized.
“The only thing that I see is a bit of an overall reaction in the region… currencies under pressure,” van Groningen told
Romania’s currency has hit multiple record lows against the euro recently, as investors pulled out of assets perceived as risky.
“We have to see if this continues and we are monitoring the impact on consumers with loans in euro,” he added. “We’re not excluding it… but I don’t expect anything shocking.”
Van Groningen added that consumer confidence in Romania was low, affected not only by the crisis in the euro zone and Greece but also by the recent political changes – with two governments collapsing in three months – and the prospect of upcoming elections.
However, he said he was convinced the situation was “manageable” despite the gloom in the markets.
“It’s like taking an unpleasant medicine but you know you will live and come out of it stronger,” van Groningen said.
© 2012

The fallout from Greece can be contained, but now it seems it is spreading to Spain, with Italy next in the line which will taxed the EU firewall beyond what it could bear. I hope the G8 meeting has better find a solution fast to recapitalise and increase the EU firewall, or it will definitely spread to US, Britain and Asia. It is not the global economy falling back into recession, but a crash in confidence, and markets are pulling out money too fast to ensure growth and the creation of jobs, even though the global economic recovery is on track.
Now it seems that everyone in the world is playing games of fire with the global economy with my secrets, why would Moody’s of the US would want to crash the worst of the EU? Do you expect me to pump in money to save the world when I have no money? Or you want me to go to UN and print money?
– Contributed by Oogle.