Friday, December 21, 2012

SHADOW WARS: Escalating Towards World War III - Russian Warship Docks in Iran!

December 21, 2012 - PERSIAN GULF - Russian destroyer docked at the Bandar Abbas Port in southern Iran, Press TV reported Wednesday.

“Marshal Shaposhnikov, a Russian Udaloy-class destroyer, has docked at this port with the aim of strengthening military ties between Iran and Russia,” Vice-Admiral Hossein Azad said.

The Russian Federation Navy Udaloy class destroyer Marshal Shaposhnikov transiting the channel
into Pearl Harbor in October 2003 (photo credit: US Navy).

The report did not specify the exact purpose of the visit, or the length of time the ship was expected to remain in port.

The Bandar Abbas Port is the suspected launching point for Iranian weapons shipments to Sudan, Syria and the Gaza Strip.

Russia, unlike the US, does not maintain a regular naval presence in the Persian Gulf. - Times of Israel.

MASS BIRD DIE-OFF: Thousands of Chickens Suddenly Die in Muarojambi District, Indonesia?!

December 21, 2012 - INDONESIA - In recent weeks, thousands of chickens in four villages in Muarojambi district, Jambi Province, had suddenly died, suspected of bird flu. Two other districts, Sekernan and Sengeti, were also attacked, but the deaths were in the several of hundreds only.

Muarojambi Head of Livestock Office, Parahuman Lubis, reported on Dec. 20 that losses were estimated at hundreds of millions of rupiahs.

Lubis has deployed officers to the locations to, among others, spray disinfectants. "We spray the chickens and their cages to prevent the bird flu virus from spreading," he said.

Although the number of chickens that died suddenly was high, Lubis did not think that the bird flu in Muarojambi had become endemic. ''It cannot be said to be endemic for bird flu can appear just because of the weather,'' he explained. - Tempo Interactive.

DISASTER IMPACT: Deadly and Massive Snowstorm Heads East After Pummeling Midwest - Kills Eight, Mass Car Pileups and Thousands of Flight Cancellations!

December 21, 2012 - UNITED STATES - The first major winter storm of the season continued to pound its way through the Midwest across the Great Lakes on Friday, creating travel chaos just in time for the holiday travel weekend.  More than 1,000 airline flights have been canceled in the past days and roads have been made hazardous by snow, ice and winds. At least eight people have died because of storm-related conditions. 

Lisa Schultz shovels her sidewalk during a winter storm in Wisconsin.
The storm, working its way eastward, first made an impact in the Rockies and then plowed through the nation, dropping more than a foot of snow on Iowa, Wisconsin and Michigan.  “Blizzard and winter storm warnings remain in effect through Friday night or Saturday for the Great Lakes and central Appalachians, where heavy snow will combine with strong winds to produce dangerous travel conditions. Meanwhile, low temperatures Friday night will drop into the single digits or slightly below zero for the north central U.S.,” the National Oceanic and Atmospheric Administration said.  The National Weather Service, part of NOAA, issued a high wind warning for New York and Long Island, forecasting gusts of up to 60 miles per hour --- similar to the type of conditions that have marked the storm through its progress across the nation.

Winter storm warnings and advisories were issued for Pennsylvania, where snow was forecast to fall throughout the day.  Major airports in the metropolitan New York area were reporting delays of  up to three hours at Newark Liberty International Airport in New Jersey and La Guardia Airport in New York. Shorter delays were reported in Philadelphia and elsewhere in New York, according to the Federal Aviation Administration.  More than 500 flights were canceled on Thursday at Chicago’s O’Hare International Airport and at Midway International Airport. The pace of cancellations eased on Friday, but dozens of flights were dropped. Southwest Airlines, which canceled all of its flights out of its Midway hub after 4:30 p.m. Thursday, was running its full schedule Friday. United Airlines also planned to operate a full schedule.  The death toll continued to climb in the Midwest. At least two deaths were reported in a 25-vehicle pileup in Iowa when drivers were blinded by the driving snow, state police reported. The storm was blamed for traffic deaths in four other states: two each in Nebraska and Wisconsin, and one each in Kansas and Indiana. - Los Angeles Times.

MASS FISH DIE-OFF: Thousands of Fish Have Died in Bulloo River in Queensland, Australia!

December 21, 2012 - AUSTRALIA - The south-west Queensland natural resource management group says there will be some ecological benefits from an event that has killed thousands of fish.

The group says 'black water' is a natural phenomenon that occurs from time to time in inland river systems, when vegetation in dry waterholes breaks down and releases tannin, causing discolouration when the river runs again.

A natural resources expert says the fish kill means smaller fish will now thrive. ABC ©.
Fish have been killed in recent weeks in the Bulloo River in the Quilpie Shire.

The group's Craig Alison says larger fish have died due to a lack of oxygen.

"It's very difficult to quantify how many fish have been killed," he said.

"If you were at the front of the black water head as it is moving past Toompine at the moment, you would actually see a lot of dead fish in the water but at Quilpie, where the water has flowed down in the past month, we're not seeing any at all.

"On the flipside of that, the predatory birds have been gorging themselves, such as inland kites, herons and things like that.

"It is a significant fish kill, given it hasn't happened for five or six years but seeing the bigger fish have died, the river is still full of all the smaller varieties of yellow belly and bony bream.

"The river ecology has been charged with carbon and there'll be a lot of nutrients. "Those smaller fish now will just boom forward in great numbers as soon as we get a good flow event in the river." - Yahoo Australia.

GLOBAL VOLCANISM: The Volcano Discovery Report For December 21 - Tungurahua, Tobachik, Paluweh, Popocatépetl, Fuego, and Heard!

December 21, 2012 - WORLDWIDE VOLCANOES - The following constitutes the new activity, unrest and ongoing report from the Volcano Discovery Group.

Image of Plosky Tolbachik's recent eruption.
No major changes have been occurring at volcanoes around the world. The eruption of Plosky Tolbachik volcano in Kamchatka continues at full force. Lava flows continue to be erupted from the southern fissure at Tolbachinsky Dol and very fluid lava is moving to the western side of Tolbachinsky Dol. A 5th cinder cone is growing on the southern fissure above of Krasny cone. Gas and steam plumes are rising to 3-4 km altitude.

Tungurahua volcano in Ecuador has been a bit "calmer" today, but the volcano continues to produce a constant ash column and intermittent explosions of small to moderate size, some of which are accompanied by loud cannon-shot bangs and roars.

Popocatépetl volcano in Mexico remained with about 3 emissions per hour. A stronger one this morning produced a small ash plume rising 2 km.

Mild strombolian activity remains visible at Fuego volcano with with ash plumes rising up to 400 m and incandescent bombs thrown to about 100 m above the crater. The lava flow towards the Taniluya drainage can remains active and was about 300 m long this morning.

Paluweh volcano, Indonesia: The activity at the lava dome continues. An ash plume at approx. 6,000 ft (1.8 km) altitude could be seen on satellite images today. It was produced either by strong ash venting, explosions, new pyroclastic flows, or a combination of all.

MODIS satellite data revealed again a hot spot at Australia's Heard Island volcano. This suggests that some sort of activity continues at one of the world's most remote volcanoes.

PLANETARY TREMORS: Powerful 6.8 Magnitude Quake Strikes Southwest of Sola, Vanuatu!

December 21, 2012 – VANUATU – US Geological Survey has just reported that the Vanuatu Islands was just hit with a violent 6.8 magnitude earthquake moments ago. The quakes epicenter lies 55km SSW of Sola, Vanuatu and occurred at 2012-12-21 22:28:08 UTC.

Presently, the situation is active and thus reports of damage are still unclear.

A magnitude-6.5 earthquake rattled the Pacific island nation of Vanuatu back in April of this year as reported by the U.S. Geological Survey.

That quake struck at 9:05 a.m. some 8.7 kilometres (5.4 miles) below the surface.

The USGS said the quake hit some 148 kilometres (91 miles) southeast Port-Vila, Vanuatu and about 1,864 kilometres (1,158 miles) northeast Brisbane, Australia.

This most recent quake has not triggered tsunami warnings. We will bring you updates as soon as they are available. - Guardian Express.

Tectonic Summary - Seismotectonics of the Eastern Margin of the Australia Plate
The eastern margin of the Australia plate is one of the most sesimically active areas of the world due to high rates of convergence between the Australia and Pacific plates. In the region of New Zealand, the 3000 km long Australia-Pacific plate boundary extends from south of Macquarie Island to the southern Kermadec Island chain. It includes an oceanic transform (the Macquarie Ridge), two oppositely verging subduction zones (Puysegur and Hikurangi), and a transpressive continental transform, the Alpine Fault through South Island, New Zealand.   Across the North Fiji Basin and to the west of the Vanuatu Islands, the Australia plate again subducts eastwards beneath the Pacific, at the North New Hebrides trench. At the southern end of this trench, east of the Loyalty Islands, the plate boundary curves east into an oceanic transform-like structure analogous to the one north of Tonga.  Australia-Pacific convergence rates increase northward from 80 to 90 mm/yr along the North New Hebrides trench, but the Australia plate consumption rate is increased by extension in the back arc and in the North Fiji Basin.

Back arc spreading occurs at a rate of 50 mm/yr along most of the subduction zone, except near ~15°S, where the D'Entrecasteaux ridge intersects the trench and causes localized compression of 50 mm/yr in the back arc. Therefore, the Australia plate subduction velocity ranges from 120 mm/yr at the southern end of the North New Hebrides trench, to 40 mm/yr at the D'Entrecasteaux ridge-trench intersection, to 170 mm/yr at the northern end of the trench.  Large earthquakes are common along the North New Hebrides trench and have mechanisms associated with subduction tectonics, though occasional strike slip earthquakes occur near the subduction of the D'Entrecasteaux ridge. Within the subduction zone 34 M7.5+ earthquakes have been recorded since 1900. On October 7, 2009, a large interplate thrust fault earthquake (M7.6) in the northern North New Hebrides subduction zone was followed 15 minutes later by an even larger interplate event (M7.8) 60 km to the north. It is likely that the first event triggered the second of the so-called earthquake "doublet".  - USGS.

DELUGE: Forecasters Predict Savage Weekend For Britain With Further Rainfall Set to Hit Saturated Towns and Villages Causing More Flooding - Mass Evacuations, Over 50 Flood Warnings!

December 21, 2012 - UNITED KINGDOM - Britain was bracing itself for more flooding tonight after up to three inches of rain fell over the past two days - with more forecast for the weekend.  More than 80 households were ordered to be evacuated after cracks were discovered in flood defences protecting the Hampshire village of Wallington, where a severe flood warning was issued earlier today.  Over 50 flood warnings and more than 200 flood alerts are currently in place across England and Wales, with large areas of southern and south-western England, south-east Wales, the Midlands and the north-east all under threat.

Making waves: Vehicles drive through floodwater this morning on a road in Southampton, Hampshire.
 Cornwall, Devon, Somerset, Dorset, Hampshire, the Isle of Wight, West and East Sussex, south east Wales, Northamptonshire and North Yorkshire were particularly at risk, the Environment Agency said.  River levels on the River Cober in Helston, Cornwall, are high after persistent rain yesterday, while the Dolphins River Park in Charmouth, west Dorset, is under threat from the River Char.  The River Wey in Weymouth, Dorset, was also rising, and the Somerset Levels face risk of flooding due to heavy rainfall of up to 20mm over last night on already saturated ground.  Flood defences were put up today in the riverside town of Bewdley in Worcestershire, on the banks of the Severn, and at Upton-upon-Severn existing flood barriers were being monitored as the river rose steadily.  Further defences were set to go up in Shrewsbury, Shropshire.  In Wallington coaches were at the ready to evacuate residents while a severe flood warning remained in place, but only three villagers decided to leave, Fareham Borough Council said.  The Environment Agency said the flood warning was scaled back after a consignment of massive sandbags was used to shore up the cracked river wall, and added that the highest tide had passed without incident.  Around 50 houses in the village have deployed flood defences, given to the houses most at risk as part of a government grant 18 months ago.  Claire Nash, 40, who has lived in one of those houses for four years, said: ‘Our rear defence is not working properly and some water is coming in.'  ‘It is very scary - we have moved the Christmas tree and presents upstairs. Our garden is so long that we never thought the water would get so high - we thought we would be safe.’  Scott Mills, a coastal engineer, was monitoring the effectiveness of the defences which they helped install.  He said: ‘The main concern is that the flow is very high in comparison to normal and we still have a relatively low tide - we’ll need to keep monitoring it closely.’  Two cars became submerged in floodwater towards the north end of the village. 

Jon King, 26, a Wallington resident, said: ‘It hasn’t stopped raining since yesterday, it has never been this bad. It is not the first time this has happened but it’s definitely the worst I’ve ever seen.’  Wallington last experienced floods to this extent in 2000 - a footbridge caused flooding to housing when it became caught up with debris. It has since been raised and water was passing 1ft below.  Preparations were put in place for scores of homes to be evacuated, but only three people - including one vulnerable person - actually left, Fareham Borough Council said.  Structural engineers from the council and the Environment Agency have inspected the flood wall that has three cracks in it.  But EA operations manager David Robinson explained that the main concern was the high tide meeting the rain water after more than 20mm fell in the area overnight.  The atmosphere was relaxed in Wallington earlier today despite the threat with the local pub, the Cob & Pen doing a roaring trade. Residents in the village were taking the warnings in their stride.  Alan Humphrey, who has lived in his house for 26 years, said he had been flooded only once - in 2000.  Speaking from behind a flood barrier protecting his doorway, Mr Humphrey said: ‘We are in control. We have a bit of water in the back garden but we're not worried about that.  ‘It's just a question of whether the wall holds. If it gives there will be quite a few feet of water coming down the street. In 2000 we were flooded and now we have these flood defences and they are effective. I'm not panicking - it's only water.’  The showers are expected to ease off today, with dry spells across much of the country.  But the rain will return from tomorrow, and with the ground already saturated, the risk of flooding remains high. Another inch of rain is forecast for tonight. By 5pm yesterday, after successive bands of heavy rain had drenched the nation, 21 properties had been flooded across the South. There was also some surface flooding in the South West, which bore the brunt of yesterday’s downpours.  In Emsworth, Hampshire, three bungalows were swamped by 9ft of water after a river burst its banks. Two, including the one belonging to Gordon and Margaret Coleman, were left uninhabitable.  Mr Coleman, 70, said: ‘It has ruined Christmas for us – we have no power, electric, phone or heating.’  By last night, the The Environment Agency said that its flood defences had helped protect more than 10,000 homes so far.  A spokesman said: ‘Our teams are out around the clock to minimise the risks and prepare for flooding, clearing drainage channels and ensuring that flood defences are working properly.’  Motorists were warned not to use flooded roads and an AA spokesman said it had attended 327 breakdowns after cars drove through or got stuck in floodwater.  Met Office forecaster Helen Chivers said up to three inches of rain had fallen in the South West in the past 48 hours, while the rest of the country had had up to two inches. - Daily Mail.

WATCH: Flooding causes havoc in Hampshire.

HIGH STRANGENESS: Mysterious Creature Attacking Animals in Shelby County, Kentucky?!

December 21, 2012 - KENTUCKY, UNITED STATES - A community of farmers in Shelby County have been terrorized over the past few weeks by a mystery animal.

The creature has been attacking, but not eating, livestock such as goats and calves.

Kevin Cox, a farmer in the area, had already had one animal fall victim to an attack and he said his dogs alerted him of a second, "I heard the goat the dogs going off and I ran out there and I looked and saw the goat laying on the ground."

His goat, Polka-dot, is now missing all of one ear and almost lost both of them.

Polka-dot is now missing an ear from an attack.
Cox explained, "I noticed my whole steer bull looking a little different. It was covered in blood. Then my other two bulls come up and they had their ears all chewed up."

Cox is one of a handful of farmers along Ditto Road in Waddy whose animals have been mysteriously attacked. Another farmer had to put down five goats because the injuries were so severe.

Most of the attacks have come at night.

One woman told County officials she and her daughter were briefly followed by an animal that made a sound she called "indescribable."

County officials are investigating and they have recruited the help of the Kentucky Fish and Wildlife Department. Thursday, crews searched the woods and set traps in hopes of finding  the cause of the attacks.

Meanwhile, Cox said he's doing all he can to protect his animals, "We're trying to find out what it is. I don't know if we ever will."

Shelby County officials are hosting a meeting at the Waddy Ruritan Club this upcoming Monday.

They are looking to make the public aware of the problem and discuss solutions. - WAVE3.

WATCH: Mysterious animal attacks leave residents concerned.

GLOBAL VOLCANISM: Scientists Warn of Risk of an Underwater Volcano Eruption in Turkey!

December 21, 2012 - TURKEY - There is a risk of volcanic eruption in Turkish province of Mugla close to ​​Marmaris, CNN Turk TV channel said on Thursday.

This was stated by scientists of Maltepe University. Some 12 scientists, carrying out research in the coastal Mediterranean area for several months found that there is a risk of an underwater volcano eruption as a result of numerous earthquakes in the area.

A crater was also found at a depth of 25 metres under water.

Turkey is located in a seismically active zone. The most powerful vibrations of the earth's crust in this country occurred in the Marmara Sea in 1999. The magnitude of the tremors was 7.4. About 18,000 people were killed in the earthquake. - Trend.

GEOLOGICAL UPHEAVAL: The Noggin Block - Enormous and Unstable Sea Slab Near Barrier Reef Could Cause Monster Tsunami in North Queensland, Australia!

December 21, 2012 - AUSTRALIA - An enormous slab of sea floor is in the early stages of collapse off north Queensland, and could generate a tsunami when it finally breaks off, researchers warn. The one cubic kilometre slab - dubbed the Noggin Block - is the remains of an ancient underwater landslide, and sits perched on the edge of the continental shelf.
A westerly view of the Great Barrier Reef margin offshore Cairns, North Queensland, showing submarine canyons
 and landslide scarps. Inset shows the approx. 1 cubic km perched block in 340 to 470 metres water depth.
Image: Dr Robin Beaman, James Cook University Source: News Limited.
Researchers discovered it while mapping the sea floor around the Great Barrier Reef. James Cook University marine biologist Robin Beaman says the slab will eventually break away from the Great Barrier Reef and when that happens it could generate a huge tsunami. "It's actually up on the top of the continental slope in about 350 metres of water,'' Dr Beaman told ABC radio. "It's a pretty big chunk of sea floor (and) is in the very slow, early stages of starting to break away from the edge of the Great Barrier Reef.

"If it were to break away catastrophically, that is break away really quickly ... it would actually cause a tsunami. "That tsunami would travel across the Great Barrier Reef, it's about 70 kilometres offshore, and it would impact the local area, the North Queensland area.'' It's estimated it would take about an hour for any tsunami to hit coastal areas such as Mourilyan Harbour and Clump Point, south of Cairns. But Dr Beaman says it's still very stable, and something like a very large earthquake near the site would be needed to trigger a catastrophic collapse any time soon. "That is very unlikely. But we should be aware that these things exist. We don't really know when such a block might collapse. All I can say is sometime it eventually will.'' - News Australia.

FIRE IN THE SKY: The Latest Reports of Spectacular Multi-Colored Fireballs in the Skies Over the Earth!

December 21, 2012 - SKY - Here are several of the latest online reports of spectacular multi-colored fireballs from across the globe.

Fireball Streaks Across Warwick, Rhode Island - 13th of December, 2012.
There's a lively discussion on the Web about this video of a burning object streaking across the Warwick sky. A reader says a co-worker shot the video just before 5 p.m. on Thursday, Dec. 13.  One commenter on YouTube declared it a fake. Others had various explanations.  Ian Dell Antonio, a Brown physics professor contacted by, had two theories:  " A plane. At 4:40, the sun would have set, but the plane would still be in sunlight -- as a result, the exhaust trail would be lit much brighter than the sky, and look like a fireball (the shape of the trail also would match -- you see two exhausts and that is typical of planes with wing engines, whereas a hunk of rock would not give you two trails).  "A much smaller object much closer ... that's on fire. I'm more skeptical of this, although it looks like the trail passes in front of the telephone wires, because the angular speed is too slow for something falling, so it would have to be floating or actively flying (model airplane?) as I said, I think it's not as likely as the plane explanation..." - Providence Journal.

WATCH: fiery object streaks across Warwick skies.

Shooting Star Over Local Farm in Philadelphia  - 15th of December, 2012.
What the heck landed in Christ Beiler's cornfield nearly two weeks ago? A number of people in East Lampeter and Upper Leacock townships reported hearing a loud explosion Sunday, Dec. 2, about 5 a.m.  That noise coincided with what Beiler reportedly saw while he was milking cows on his farm along Hobson Road near Smoketown.  According to a friend, Sam Stoltzfus, of Gordonville, Beiler saw a light streak into his field before he heard a "boom.''  "He did find the spot in his field and you can still see it,'' Stoltzfus reports. "There was also a strong acrid smell. That's why they called the fire company.''  Christian Kauffman, assistant fire chief of the Witmer Fire Co. and Stoltzfus' son-in-law, says a number of people dialed 911 and the county's 9-1-1 Center alerted the fire company. Among the concerned were East Lampeter Township Police officers. They heard the explosion inside their station along Route 340, Kauffman says.  The fire company investigated and found nothing, according to Kauffman. Heavy fog that morning hindered the investigation, he adds.  "We said, officially, that the report was unfounded,'' Kauffman notes. "But now I'm beginning to believe it probably was a shooting star.''  Stoltzfus says he and others have walked all over Beiler's field looking for possible fragments of a meteor, also known as a shooting star. They have not found anything. But Stoltzfus has no doubt a shooting star landed in that field.  "It wasn't the Star of Bethlehem,'' he concludes. "It was the Star of Bird-in-Hand.'' - Fire Engineering.

NASA Cameras Capture 2012 Geminid Meteor Shower - 16th of December, 2012.
Flaring brighter than the full moon, this spectacular Geminid meteor lit up the sky above Cartersville, Ga., at 2:29 a.m. EST on the morning of December 14, 2012. NASA says that this is one of the brightest fireballs observed by the NASA network of meteor cameras in over four years of operation. The 2012 Geminid Meteor Shower, which peaked on December 13th and 14th, is the most intense meteor shower of the year and can still be seen this week. It lasts for days and can be seen from almost any point on Earth.  The 2012 Geminid meteor shower can be seen around 8 p.m. every evening at the viewer's respective local time. The meteor shower will be the most intense and directly overhead during the hours of 1 a.m. to 3 a.m. The meteor shower sets in the western sky just before sunrise. A new moon coincides with the 2012 Geminid meteor shower peak. So the dark night sky will make the display even more spectacular.  Geminid meteors stream from a point called "the radiant" in the constellation Gemini. - Brevard Times.

WATCH: 2012 Geminid Meteor Showers.

Huge Fireballs Light Up Evening Sky Over Punjab, India - 17th of December, 2012.
Eyewitness - Kamalpreet Singh, Jalandhar, Punjab, India at  7.36pm.
5 seconds duration - Travelling from left to right. Bright yellow colour. Same brightness as the moon, like a huge ball from the sky.
Eyewitness - Rahul Sharma, Jalandhar, Punjab, India at 6.50pm.
5 seconds duration - N-E direction, heading east and downward diagonally. Firstly it was bright green / blueish, then it changed into orange around midway. No sound. It was as bright as the full moon, like a huge burning ball. I have seen many meteors in my life, but this one was huge. It lit up the sky like a firework. - Lunar Meteorite Hunters.
Calgarian Left Scratching Head Over Odd Light In The Night Sky - 18th of December, 2012.
She admits it sounds nutty.  But Janine Coburn swears she spotted a fiery green orb streaking across a clear night sky on the weekend. It was moving faster than an airplane, Coburn insists, and it was bigger than a falling star.  "It's as if it were flung by a giant," she said. "It was vivid."  The Somerset resident was out for some fresh air shortly before midnight on Sunday when she watched the mysterious object soaring north for at least five seconds before vanishing.  It's left Coburn scratching her head to explain the apparent cosmic show. Combing through online communities has been fruitless, so she's asking Calgarians for answers.  "I've done research since then and it hasn't made me feel any more comfortable with what I saw," she said Tuesday.  Phil Langill, director of the University of Calgary's observatory, is also unsure what Coburn witnessed. Photos pulled from a sky camera reveal Sunday was actually a cloudy evening, which leads Langill to believe it was a low-flying object - possibly fireworks.  "If it were below the clouds it would've been man-made," he said. "If it were above the clouds it could've been a meteor."  Experts predicted rural skywatchers could have seen as many as 100 shooting stars per hour during the Geminid meteor showers, which peaked last Friday.  Devon Hamilton, a PhD in astrophysics, suggested the local sighting was a highly visible meteor known as a fireball, based on Coburn's loose account.  A highly charged meteor often emits distinct colours as it passes through Earth's atmosphere, according to Hamilton, a vice-president with the Telus Spark science centre.  "In the case of green meteors, the composition can be connected to nickel," he said. "Although other factors can contribute to the coloration, including tricks our eyes and brains play on us." - Calgary Herald.

GLOBAL ECONOMIC CONTAGION: The Euro-Zone Crisis - 'Much Worse than Greece,' IMF Demands Partial Default for Cyprus!

December 21, 2012 - CYPRUS - Euro-zone member state Cyprus badly needs a bailout, but the International Monetary Fund is demanding a debt haircut first, according to media reports. The resulting standoff with Europe has delayed the country's badly needed aid package. To ward off insolvency, Nicosia has raided the pension funds of state-owned companies. Cyprus did its part on Wednesday night. The country's parliament approved a 2013 budget which included far-reaching austerity measures so as to satisfy the conditions for the impending bailout of the debt-stricken country. While aimed at significantly reducing the country's budget deficit, the spending cuts and tax hikes are likely to result in a 3.5 percent shrinkage of the economy in 2013 along with an uptick in unemployment.

Anti-austerity demonstrators clash with security personnel in Cyprus in December. DPA.
Yet despite the measures, Nicosia's would-be creditors remain at odds over the emergency aid deal, even as the country teeters on the brink of insolvency. According to a report in the Thursday issue of the influential German daily Süddeutsche Zeitung, the International Monetary Fund is demanding a partial Cypriot default involving private creditors before it joins the bailout deal.  Citing anonymous sources familiar with the negotiations, the Süddeutsche writes that the IMF is concerned that, despite the austerity measures the country has now adopted, it still wouldn't be able to shoulder the interest payments due on its debt. Several European countries agree with the IMF. Others, however, believe that such a default could be dangerous. After all, when private creditors were pressured to write down a portion of their Greek debt holdings, the euro zone went to great lengths to present the move as one that would not be repeated. Should such a default now be applied to Cyprus, it could severely undermine investor trust in the euro zone.  "The situation in Cyprus is much worse than it is in Greece," one high-ranking EU official told the paper.  Days Away from Insolvency  It is hard to argue. This week, the country was forced to borrow €250 million ($330 million) from the pension funds of state-owned companies just to be able to pay the holiday salaries of civil servants. The move came on the heels of a high-level Finance Ministry official saying that Nicosia was just days away from insolvency. 

More to the point, however, the country is massively exposed to Greek debt and its banking sector is struggling mightily as a result. Furthermore, the size of the banking sector dwarfs the size of the Cypriot gross domestic product. Whereas the country's banks have assets of some €150 billion, the GDP was just under €18 billion in 2011.  The troika of international lenders, made up of the European Central Bank, the European Commission and the IMF, are looking at an aid package of €17 billion for the country. As a percentage of GDP, it would be the largest bailout yet of a euro-zone member state. Fully €10 billion of that would go towards propping up the country's wobbly banking sector.  Not Entirely Aboveboard  According to the Süddeutsche, one possible model in circulation for keeping the IMF on board envisions Russia sending €5 billion to the IMF which would then send the money on to Nicosia. Not only would such a solution guarantee the formal involvement of the IMF, as German Chancellor Angela Merkel has insisted, but it would also benefit Russia. After all, a large chunk of the money invested in Cypriot banks comes from wealthy Russians. Indeed, it is a situation that has many in the EU wary of the coming Cypriot bailout. Many have accused Cyprus of not doing enough to combat money laundering and fear that some of the money coming from Russia is not entirely aboveboard.  What's more, many are also skeptical of the IMF partial default plan for economic reasons as well. Whereas many foreign banks held Greek debt when the debt haircut was engineered in March of this year, most Cypriot bonds are held by Cypriot banks. Should they be forced to write down part of that debt, their situation will only worsen, requiring more bailout help and driving up Cypriot debt. The net result would be largely neutral.  A final decision on the deal is set to be made in the coming weeks with the goal of sending the initial tranche of emergency aid in February. Until then, the pension funds of state-owned firms will have to do. - Spiegel.