Three new crew arrive at space station with fish

CAPE CANAVERAL, Florida | Thu Oct 25, 2012 7:15pm EDT

CAPE CANAVERAL, Florida

(Reuters) - A pair of rookie Russian cosmonauts and a veteran U.S. astronaut arrived at the International Space Station on Thursday, boosting the crew back to full strength and bringing along 32 Japanese medaka fish.

Soyuz spacecraft commander Oleg Novitskiy, flight engineer Evgeny Tarelkin and NASA's Kevin Ford ended a two-day journey with an 8:29 a.m. EDT (1229 GMT) docking at the orbital outpost as the ships sailed 254 miles above the planet.

After making sure seals between the two spacecraft were airtight, the men joined space station commander Sunita Williams, Japanese astronaut Akihiko Hoshide and cosmonaut Yuri Malenchenko to return the station to its full, six-member crew.

The $100 billion station, a project of 15 nations, had had a crew of three onboard since September 16 because of normal rotation schedules.

"It is so great to see all six of you on orbit and to see your smiling faces," William Gerstenmaier, NASA associate administrator for spaceflight, radioed to the crew from the Russian mission control near Moscow.

The 33rd space station crew blasted off on Tuesday aboard a Russian Soyuz rocket from the Baikonur Cosmodrome in Kazakhstan.

Ford, who flew as the pilot on a 2009 space shuttle mission, said he noticed different noises and vibrations riding on the Soyuz, but he found the trip just as enjoyable.

"The two days went really quickly," Ford told family and friends gathered at the Russian mission control during a televised welcoming ceremony. "It was an incredible ride."

Ford's Russian colleagues, both of whom are flying for the first time, had a bit of struggle adjusting to the weightless environment of space.

"I have to admit it was a little bit difficult the first day, but then it got better and easier," one of the cosmonauts said through a translator.

"It got tolerable," the other added. "Today, we're feeling great."

One of the first orders of business was transferring 32 Japanese medaka fish from special containers aboard the Soyuz into Japan's Kibo laboratory, where aquariums have been set up for a variety of experiments.

"The fish are still alive. Aki already has checked on them. He was very worried that they make it here," one of the cosmonauts said, referring to Hoshide.

The crew will have a busy schedule in the coming days. On Sunday, the privately owned Dragon cargo ship, which arrived at the station on October 10, is due to depart.

The Space Exploration Technologies' freighter, making the first of 12 supply runs under a $1.6 billion NASA contract, will be returning with more than one ton (907 kg) of science experiments and gear from the orbital outpost, the first big load of cargo to come back to Earth since the space shuttles stopped flying more than a year ago.

The astronauts also are preparing for the arrival of a Russian cargo ship on Wednesday and a spacewalk the following day by Williams and Hoshide to try to repair a leak in a station cooling system.

Williams, Hoshide and Malenchenko are scheduled to return to Earth on November 12, leaving the three newcomers on their own until replacements arrive on December 21.

(Editing by Kevin Gray and Mohammad Zargham)

Source: http://feeds.reuters.com/~r/reuters/scienceNews/~3/fD3pvmdK5_Q/us-space-station-idUSBRE89O1M220121025

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94% Side by Side

I am a HUGE, HUGE fan of movies. I will watch all type of movies, I just love movies. "Side By Side" is a documentary about how filmmakers have changed the way they make movies by going from making a movie with film, to making a movie digital. It's very technical, but it has some very insightful views from James Cameron, Martin Scorsese, David Fincher, Robert Rodriguez, among many other people who help create movies. It's produced and hosted by Keanu Reeves. Weird, I know right?! But he does a good job interviewing the people, and he seems genuinely interesting in the entire process. Parts of the documentary are a bit tedious if you don't know much of the process(I don't), and other parts are fascinating if your a true fan of films(I am). I think this is an important movie to watch because filmmakers are the ones who tell the stories we all love, and this is a chance to hear from them about their side of the camera. I watched this very late at night and was glued to the screen. It's neat to see how things have changed in the 100 years movies have been made, and hear where some of these people think it's going to evolve to. A must watch documentary of people who genuinely love technology, movies, or hearing from people who make the all the magic happen.

October 21, 2012

Source: http://www.rottentomatoes.com/m/side_by_side_2012/

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Outsourcing Success Secrets 10/24 by Scott Fox | Blog Talk Radio

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    We have Grammy award winning record producer Mr bangladesh for a special 2 hour special promoting his new artist and music career

  • Marx & Julie chat with British filmmaker Chris Stone, the writer & director of the Victorian vampire web series turned feature film called Blood and Bone China. As if that wasn't enough, we also speak to our featured indie music artist of the week, Birthrite.

  • Native American Movement founder Russell Means was laid to rest yesterday at his home on Pine Ridge Reservation, South Dakota. He is remembered with comments, stories, and prayers.

  • Lori Saitz is a nationally recognized expert in using gratitude to boost client retention and increase referral business. She is the founder of Zen Rabbit, which is a concierge type company specializing in helping business professionals ?multiply profits

  • Gus Speth, author of AMERICA THE POSSIBLE,shares his vision of comprehensive and deep change rooted in a political economy that sustains people, communities and nature. Long time Washington insider, he now is part of the protest movement.

  • One of Radio One?s top DJs, DJ Kayotik will be on with us to talk about career, current mixtape KAYOTIK KHRONIKLES VOL. 1, and youth organization.

  • Queen Afua, has been an expert in Wholisitc Health, a lecturer/author for 40 years. She'll discuss the 21 Detoxification Process & the work she's doing in Detroit for the next year. Kilindi Iyi, world renowned lecturer and Master of The African Martial Art

  • Mothyna James-Brightful-Global freedoms and empowerment campaign for domestic violence awareness-Heal a Woman to Heal a Nation. Dawn-Marie Hanrahan is a #1 Bestselling Author, TranSpirational Speaker and Spiritual Leader, who travels the world educating others

  • Health & Fitness is on tap when International Fitness Model Charles Flanagan and IFBB Pro Fitness competitor Donna Jones from Australia tackle everything from nutrition & exercise to the psychology of living well, Speaking to callers LIVE

  • Stacey Monroe welcomes Rico and J-Rod from the group Recognition to E! GEMZ! Radio to speak about their music career and life. How did they two become Recognition? What did they both give up in order to pursue there music career? Tune in to see what they have

  • Big Blend Radio talks with outdoorsman and naturalist Jay Erskine Leutze about his acclaimed book STAND UP THAT MOUNTAIN: The Battle to Save One Small Community in the Wilderness Along the Appalachian Trail.

  • Teen Hosts McMillen, Janae, Jackie, Jessica, and Salwa discuss common sex myths. Our guests, Crystal Collette and Caitlin Mcardle from Planned Parenthood, are here to give us the facts.

  • This week on the BIG show, host Tim Gordon will talk with writer/director Matthew Cherry about his upcoming drama, The Last Fall. The semi-autobiographical tale tell the story of an NFL journeyman who struggles to deal with life's after the game.

  • Super Role Model, Valerie Jeannis, heralded as ?the Catalyst?, joins the Feminine Soul Radio show and talks about her new book I Am Beautiful: Changing the Way You See Yourself. Valerie will inspire you to say yes to your life and take action on your dreams.

  • In the dark, driving tasks like looking at other vehicles ahead and reading road signs are more difficult for some drivers. With the end of daylight savings only eight days away, tune into Healthy Vision? with Dr. Val Jones to learn how to take better care of your eyes ? and your car ? to improve your nighttime driving.

  • Legendary singer, Tony Bennett kicks off our new Storytellers series with a special live interview. Join hosts Eric Olsen (@amhaunted) of America?s Most Haunted and Chitra Agrawal, BlogTalkRadio?s own Director of Marketing, for the premiere.

  • The Phantom Zone Radio Show welcomes actor, screenwriter, and film editor, Camden Toy. He is best known as a character actor in the series, Buffy The Vampire Slayer and it's spinoff series, Angel.

  • Join Weigh In Sports as they talk to the CEO of BCS.net Magazine Robin Bayless as they go over the new BCS standings, the founding of the magazine in such a competitive market, the writers and much more.

  • Source: http://www.blogtalkradio.com/scottfox/2012/10/24/outsourcing-success-secrets

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    German military sponsors V Corps castle tour

    • German military sponsors V Corps castle tour

      Lt. Col. Helmut Scharfenberg (left), Landeskommando Hessen commander, and members of V Corps listen as Gerhard Adam talks about the history of Braunfels during a tour of the town Oct. 15.

    WIESBADEN, Germany - While giving a tour of the Castle Braunfels, Gerhard Adam paused for a moment amidst the antiques and portraits and became nostalgic.
    ?
    Adam was not pining for the days of knights and royalty, however. Instead, surrounded by a group of V Corps service members and volunteers, the Braunfels native was missing Texas.
    ?
    "If I did not return once a year to New Braunfels (Texas) and see my friends there, I think I would feel as though something was not right," Adam said, punctuating his statement with his hands. "I would miss it."
    ?
    Adam's statement was an expression not only of how deep and far back German and American friendships go, but how they continue today. In fact, it was one main reason behind the tour.
    ?
    Lt. Col. Helmut Scharfenberg, commander of the Landeskommando Hessen, said his organization sponsored the tour because he wanted to improve on already excellent German and American relations and recognize V Corps family readiness volunteers.
    ?
    New Braunfels, Texas, is a sister city to Braunfels, Germany, which is near Giessen and about an hour's drive north of Wiesbaden. New Braunfels is located near San Antonio, Texas. In fact, Prince Carl of Solms-Braunfels founded New Braunfels in 1845, and he was a member of the family that still owns the castle today.
    ?
    Scharfenberg said he knew of Braunfels because he grew up in the area and went to school there when he was younger. When he was thinking of places Americans might want to visit, Braunfels came to mind because of the castle and its historic town center. Some of the homes date back to the 1500s. The town itself is 800 years old.
    ?
    By all accounts, Scharfenberg was correct. Not only that, but he succeeded in his mission of taking German and American relations to the next level.
    ?
    Ruth Tobin, a V Corps family readiness group adviser, said she really enjoyed the company and the camaraderie of the day. Several German Soldiers, V Corps Soldiers and volunteers participated in the tour - about 20 in all.
    ?
    "I liked discovering a little village that most Americans didn't even know was here," Tobin said. "Not only that, but it has a sister city in Texas."
    ?
    Melissa Spiszer, a V Corps family readiness leader, said she also enjoyed the company, as well as Adam's charming personality.
    ?
    Throughout the tour, Adam, a former English teacher, made jokes and explained not only the history of Braunfels, but some cultural items that are found throughout Gemrany. For example, Adam said that the "X" marks on the country's timber-framed homes are a symbol that the builder wanted to bless the home with many children.
    ?
    After walking through the historic town, and explaining the town's stocks with Capt. William Noyes standing in them, Adam gave his visitors a private tour of the castle. Only half of it is open to visitors because members of the family that have owned it for 21 generations live in the other half.
    ?
    The first room contained several suits of armor, swords and horns from successfully hunted animals. One set was a moose rack from Alaska.
    ?
    Adam had Capt. Darrand Williams try on a suit of chain mail and knighted him with a sword. Adams also passed around the chain mail so people could feel its heavy weight.
    ?
    From there, the tour began to walk through several other rooms in the castle, all of which were full of portraits of family members who had lived in the castle. The rooms also included a chapel.
    ?
    After the tour, the Germany military members hosted a barbecue for the Americans at a nearby lodge. The meal featured bratwurst, salads and German cakes and breads.
    ?
    Lt. Col Theresa Straus, acting commander of the V Corps rear detachment, thanked Scharfenberg heartily for the tour and the lunch. "It was very educational," she said, adding that this was the first time Williams and rear detatchment Command Sgt. Maj. Rodney Hobbs had visited a German castle.
    ?
    The tour and lunch were a great sign of German and American camaraderie, Straus said, and everyone mixed and had a number of great discussions during lunch.
    ?
    Hobbs said he also appreciated the fact that the German-American friendship was not extended only to Soldiers, but to their family members as well.
    ?
    He also thoroughly enjoyed the castle tour, Hobbs said. "This is my third tour in Germany, and I hadn't been to a castle yet," he said, shaking his head in dismay.
    ?
    "We could have done this on our own, but to have another military do this for us shows a lot of goodwill," Hobbs said. "It shows how far German and American relations have come."
    ?
    Scharfenberg expressly thanked the V Corps family readiness volunteers for their hard work and said he hoped everyone's friends and relatives who were deployed would get home safely.
    ?
    Germans and Americans should hold more events together, Scharfenberg said.
    ?
    Tours of the castle are available to the public in October everyday from 11 a.m. to 6 p.m. on the hour, and from November to March on weekends and public holidays from 11 a.m. to 5 p.m. On weekdays during these months, tours are still available, but people should call in advance. See www.schlossbraunfels.de for more information about the castle.

    Source: http://www.army.mil/article/89765/German_military_sponsors_V_Corps_castle_tour/

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    Filmmakers Document Creation of Bay Area Parks, Open Space ...

    A lot has changed since people came together in the 1950?s and 1980?s to create the Point Reyes National Seashore and the Golden Gate National Recreation Area, but the general attitude remains the same when it comes to protecting open space.

    ?You have to work for free, and you have to be crazy,? Filmmaker Kenji Yamamoto joked Monday night after the screening of his and Nancy Kelly?s documentary, Rebels With a Cause, at the Patch/AOL office in Palo Alto as part of the UNAFF 2012 International Documentary Film Festival.

    The film, eight years in the making, was co-presented by the Mill Valley Film Festival where it was also shown. It highlights the lengths volunteers went to to preserve the miles of natural land that stretch along the California coast in Marin and San Francisco. Facing the federal government, private developers, corporations and county supervisors, it takes us from Congressman Clem Miller?s Point Reyes Bill in 1962, rising land prices through the Kennedy and Nixon years, and a national campaign to save not only Point Reyes, but 13 other parks across the country.

    ?There were a tremendous amount of people involved,? Yamamoto said after the screening. ?Ordinary people who really treasured what was around them, and we are so damn lucky they fought so hard.?

    The film commemorates Point Reyes? 50th anniversary, but during a panel discussion local environmentalists brought us back to the present by reminding Marin County voters they will have a chance to help support the preservation of those same lands in the upcoming election.

    In addition to Yamamoto and Kelly, the panel included Lennie Roberts a legislative advocate for the Committee for Green Foothills; Audrey Rust, retired president, C.E.O. and executive director of the Peninsula Open Space Trust; and filmmaker Gwenaelle Gobe, whose documentary This Space Available, an examination of billboards and other commercial images prevalent in our outdoor spaces, was shown later that evening.

    The panelists talked about preservation efforts today, and Kelly said she believes our relationship with the natural environment has changed over the years ? from her own camping trip with successful executives who were afraid to sleep overnight in a tent, to children in East San Jose who have never seen the ocean.

    ?Just as our income levels are separating more and more, I think our experience with nature is separating more and more,? she said.

    Eventually, Kelley and Yamamoto hope to produce a DVD of the documentary that will be shown in California public schools.

    ?To get young people,? Yamamoto said, ?excited about the outdoors.?

    The film festival will be showing screenings throughout the Bay Area and runs through Oct. 28.

    Source: http://paloalto.patch.com/articles/rebelswithacause

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    PREP FOOTBALL: Five local teams in hunt for home-field advantage

    PREP FOOTBALL: Five local teams in hunt for home-field advantage
    Cullman Times Online
    Related Photos. Hanceville's Tyler Tankersley tips a pass from Caleb Hurst up just far enough where he can pull it down during the Bulldogs' comeback win over Danville last Friday. Hanceville, Vinemont, Addison, Cullman and Fairview are all still in ...

    Source: http://hartselle.waff.com/news/schools/84211-prep-football-five-local-teams-hunt-home-field-advantage

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    Associated Press Issues Misleading Defense of ... - Immigration Impact

    Unlike lawyers and policymakers, journalists have an obligation to use language that ordinary people understand. Although the practice is generally helpful, it can sometimes result in oversimplification, or sacrificing accuracy for the sake of clarity. A perfect example is the memo issued by the Associated Press last week endorsing use of the term ?illegal immigrant.?

    Calling an immigrant ?illegal? before the conclusion of immigration proceedings is like calling a criminal defendant ?guilty? before a jury has rendered a verdict.

    At first glance, the memo?authored by Tom Kent, a high-ranking AP editor?appears driven by a dispassionate analysis of immigration law. To Kent, terms like ?unauthorized? and ?undocumented? obscure what he calls a ?legal reality,? i.e., that certain immigrants are present in the United States in violation of law. Without ?the fundamental right to be in the United States,? the memo says, ?their presence is illegal.?

    In truth, immigration law is much more complicated than Kent suggests. Just as suspected criminals are presumed innocent until proven guilty (and thus referred to as ?alleged? or ?accused?), noncitizens charged with violating the immigration laws have a right to remain in the country until they receive a final order of removal. Last year, judges terminated more than 25,000 removal proceedings for lack of sufficient evidence, and granted relief from removal?such as asylum?in more than 30,000 cases. Thus, calling an immigrant ?illegal? before the conclusion of ?immigration proceedings is like calling a criminal defendant ?guilty? before a jury has rendered a verdict.

    As importantly, many immigrants are authorized to remain and work in the United States?and are not considered ?unlawfully present? under the Immigration and Nationality Act (INA)?despite being in violation of the immigration laws. For example, immigrants with pending applications for asylum and permanent residence are eligible for employment authorization, as are those granted deferred action or a stay of removal. Indeed, if determining unlawful presence was as simple as Kent suggests, it?s doubtful that federal officials would have felt compelled to issue such extensive guidance on the subject.

    (Side note: the memo also misleadingly instructs reporters to describe beneficiaries of the Deferred Action for Childhood Arrivals program as having ?temporary resident status,? a phrase the INA ?uses in reference to farmworkers who qualified under a 1986 legalization program, and which implies that deferred action is akin to legal immigration status.)

    To the AP?s credit, its stylebook instructs reporters not to refer to ?illegals? or ?illegal aliens,? and permits them to use more neutral descriptors, such as ?living in the country without legal permission.? Kent?s memo also says certain noncitizens should not be described as ?illegal immigrants??such as youths brought to the country by their parents (because they did not consciously immigrate themselves) and those whose status is in current legal dispute?and encourages reporters to explain individual immigrants? stories rather than rely on labels.

    In making these (sensible) concessions, however, the memo undermines its very defense of the term in question. If a reporter?s job is to report facts objectively, it is hard to see why one should rely on a term that is often legally inaccurate, may encourage readers to make sweeping generalizations, and can offend the dignity of those they describe.

    Source: http://immigrationimpact.com/2012/10/24/associated-press-issues-misleading-defense-of-term-illegal-immigrant/

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    ELDOA and myofascial stretching - a new way to heal back pain

    Years ago, I had a trainer come working for me who introduced me to ELDOA (Longitudinal Osteoarticular Decoaptation Stretches, is taken from the French Etirements Longitudinaux avec Decoaptation Osteo-Articulaire). He offered an ELDOA workshop at Urbanfitt years ago. Since then, I've been including myofascial stretching in my training and added to my knowledge of myofascial stretching in the Fascial Stretch Therapy I became certified in.

    Then the next time I heard about ELDOA again was last week when a trainer I share space with had learned some stretches from his Osteopath. Then I also heard about an ELDOA class a friend signed up for at Sphinx Pilates on College Street offered by a very skilled instructor, Petra. I thought it was time to write a bit about it since it seems to be taking off as a new more mainstream trend in back health.

    ELDOA was developed by a french Osteopath named Guy Voyer. Although Guy Voyer is known internationally for his osteopathic expertise, he considers himself first and foremost a trainer who wants to pass on his skills to the next generation.

    Guy developed an ELDOA exercise for every articulation in the spine starting at the base of the skull and ending with the sacro-illiac joint. Disc compression existing at any level of the spine can be addressed through a specific ELDOA exercise.

    The goal of each ELDOA exercise is to create fascial tension above and below the joint or disc that one is trying to "open up" or decompress.

    The benefits include:

    Reduced vertebral compression
    Improved circulation
    Spinal disc re-hydration
    Increased muscle tone and awareness

    Disc hydration is an important and misunderstood factor in spinal health. Our discs are like sponges; when the area is properly hydrated and the discs are not compressed they draw water in. This hydration is necessary to maintain the suppleness that is present in a healthy disc. If the disc is dehydrated and compressed it will dry out and become brittle. It is in this state that nerve compression and inflammation are more likely to occur.
    http://koupstrength.com/ELDOA.htm

    Why should you consider it? If you're finding that your back problems aren't going away despite concerted efforts to heal, then maybe ELDOA will be your answer. Most osteopaths are focused on fascia in their healing process. Don't resign yourself to back pain and instead, maybe try seeking out alternative care you haven't yet tried.

    Source: http://ihearttosweat.blogspot.com/2012/10/eldoa-and-myofascial-stretching-new-way.html

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    Elder Care Glencoe IL | (847) 698-1400, Home Care Chicago ...

    Do you provide elder care in Glencoe, IL for someone with Parkinson?s?

    For those involved in elder care, either as an occupation or out of respect for the needs of a loved one, the subject of Parkinson?s Disease may become part of their daily vernacular. As the second most common neuro-degenerative disorder in the United States, Parkinson?s Disease is most common among the 50 years of age and older population. With that said, it is also important to note that this debilitating disease process can begin in people as young as 30 years of age.

    Early Signs and Symptoms

    Early signs of the disease process include loss of coordination, muscle stiffness, weakened voice, tremors and loss of sexual function (in men). For many patients, the neuro-degeneration caused by Parkinson?s Disease can proceed slowly for the rest of their lifespan, meaning that, while these symptoms may not improve, they will not grow noticeably worse in a rapid time-frame. Fortunately, this means that a large percentage of Parkinson?s Disease patients will require limited elder care services beyond basic in-home care or the assistance of a private caregiver to successfully live at home with the disease.

    Elder Care and Parkinson?s Disease

    As caregivers, there are a few things that can be done to assist patients suffering from Parkinson?s Disease. Physical therapy, especially during the early and middle stages of the degenerative process, may be extremely helpful in maintaining the patient?s range of motion and flexibility, thus prolonging the painful stiffening of the joints and other debilitating effects of the disease. Some patients also respond well to vitamin supplement and drug therapies to reduce or slow the progress of pain, inflammation and other symptoms of the disease process. In the later stages of the process, a patient may become more reliant upon the assistance of others to accomplish basic tasks, such as shaving, brushing of teeth or bathing. Unfortunately, due to degeneration of cognitive and sensory functions, the patient may not recognize the need for added assistance so it falls to the caregiver to decide when the extra help is appropriate.

    While the physical effects of Parkinson?s Disease can be devastating, the non-motor function effects of the degeneration process are often the most troubling for patients, family members and the elder care team that is trying to provide needed support. As a neuro-degenerative process, Parkinson?s disease can cause patients to suffer from depression and anxiety. The disease can also cause normally fluent speakers to lose their train of thought or develop a twitch during conversations, which makes communication difficult. Caregivers can assist the patient by displaying patience and empathy in these situations, as well as redirecting the patient when lessened cognitive function is causing them to make dangerous decisions.

    By providing for the patients physical and mental needs, caregivers can ensure that those suffering from Parkinson?s Disease can continue to live a full and well-adapted life at home or in assisted living.

    For questions about?elder care?for your aging loved one, please contact the caregivers at?A Abiding CARE. We provide everything from respite care for the primary caregiver to full time?elder care in Glencoe IL, and the surrounding communities. Call us at?847-698-1400?for more information.

    Source: http://aabidingcare.com/2012/10/elder-care-glencoe-il/

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    What Does European Banking Union Mean?

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

    Effecting a European banking union was never going to be easy. We saw some signs of the political difficulties at last week's European summit. Disagreements between the French and German leaders, as well as Germany's refusal to use the multi-nation ESM fund to pay directly for bank recapitalizations, have grabbed the headlines. See here and here for examples. The meetings did come to some agreements, as embodied in a typically opaque communique, but they did not, in my view, resolve the fundamental issues.

    Regarding banking union, the communiqu? focused on the establishment of a bank supervisory arm within the ECB and the timetable for establishing that. Regarding the issues of deposit insurance, a bank resolution law, and bank recapitalization mechanisms, the communiqu? was anything but clear. Regarding deposit insurance it said:

    "The European Council calls for the rapid adoption of the provisions relating to the harmonisation of national resolution and deposit guarantee frameworks based on the Commission's legislative proposals on bank recovery and resolution and on national deposit guarantee schemes. The European Council calls for the rapid conclusion of the single rule book, including agreement on the proposals on bank capital requirements (CRR/CRD IV) by the end of the year."

    "In all these matters, it is important to ensure a fair balance between home and host countries."

    These statements suggest that the nationality of each bank will be maintained for deposit insurance purposes and that a single deposit insurance system is not envisioned, at least as part of the original architecture. Thus, all the banks are to be supervised by one central entity (within the ECB) but the deposit insurance systems will continue to be national. In my opinion, that is not workable because the decision to take over and remediate a bank must be taken centrally; to have different consequences for depositors in different countries would lead to chaotic resolutions.

    On a resolution mechanism, the communiqu? said:

    "The European Council notes the Commission's intention to propose a single resolution mechanism for Member States participating in the SSM once the proposals for a Recovery and Resolution Directive and for a Deposit Guarantee Scheme Directive have been adopted."

    Good. A single resolution mechanism is needed. Without it, banking union is not workable.

    On the recapitalization issue, the communiqu? said:

    "The Eurogroup will draw up the exact operational criteria that will guide direct bank recapitalisations by the European Stability Mechanism (ESM), in full respect of the 29 June 2012 euro area Summit statement. It is imperative to break the vicious circle between banks and sovereigns. When an effective single supervisory mechanism is established, involving the ECB, for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalize banks directly."

    Apparently this means that after the system is up and running and banks have been accepted into it, it is possible that a bank could be recapitalized by the ESM. This clearly is a hot issue for the politicians. And it is advertised as the way to break the link between governments and banks, which is a major goal of all concerned. But I wonder how the ESM recapitalization will fit into the resolution mechanism. Basically, government recapitalization is inconsistent with a sound resolution mechanism that brings in new private sector capital to support the existing deposits. And a good resolution mechanism should break one of the links without intervention of the ESM.

    In reality, however, the links between banks and their home countries cannot be broken by banking union so long as the banks are seen as national in character. So long as they are seen as national in character, the banks will buy the debt of their home countries, which of necessity links the health of the banks and the economic health of the home country.

    I believe that the ESM issue that gets the current headlines is a red herring. The question of Germany and other northern countries allowing their money to be used to bail out currently-insolvent Spanish banks without Spain being on the hook for repayment has nothing to do with banking union. However much Spain and other countries with insolvent banks may wish for it, it is not going to happen, and the issue will not stand in the way of banking union. A workable banking union can be formed only for banks that are healthy at the time that they enter the system. That requirement will apply to small German banks as well as Spanish, Greek and Irish banks. Banks that cannot qualify but are nevertheless subject to ECB supervision would be inconsistent with the unified system of supervision.

    Fundamental Issues

    I believe the uncertainties and inconsistencies that the summit revealed reflect underlying fundamental issues that have been fudged so far.

    The first fundamental issue is the nature and function of a bank. I think all of us who have been involved in bank regulation and supervision on either side of the Atlantic over the last 40 years have asked the question "What is a bank?" Or "What should a bank be?" Or "What is a bank's role in society?" However we have asked the question, we have had in mind the same set of conundrums. Banks, most economic thinkers agree, should be safe places for depositors to put their money, should reliably conduct the payments system, and should be a source of capital for businesses and of financing for individuals.

    To make banks safe and to lower the costs of borrowing, governments have undertaken various types of programs. These programs often include deposit insurance, a national lender of last resort, and other privileges that go with banks' role in the payments system. In some societies, including many European countries, the safety emphasis goes so far as to include in-practice guarantees that banks do not fail.

    The more governmental safety benefits a bank receives, the less the market will impose effective capital requirements on the bank. If the governmental safety benefits are strong enough, the market will permit the bank to operate with practically no capital at all, permitting stockholders to leverage their meager investments 30, 40 and 50 times and managers to claim enormous bonuses for the profits that result when times are good.

    It should be obvious that a bank that has leveraged its equity capital 30, 40 or 50 times over is a very fragile business. Most of a bank's assets are loans to businesses, people and governments in one form or another. And when a loan goes into default, it usually loses quite a sizable part of its value. Therefore it does not take a very large part of a highly leveraged bank's portfolio defaulting for the bank to run out of equity capital. And at that point, either the bank will have to be sold (if anyone will buy it), the government will have to provide new equity capital to the bank, or the bank will fail and its future will depend of the resolution law. Taxpayers, equity owners, bondholders and other creditors and counterparties, and even depositors at the extreme, have to take whatever consequences the form of resolution gives them.

    These consequences are the reason for regulatory capital requirements. That is, regulatory capital requirements are governments' logical response to the moral hazard that they have created by giving banks governmental safety benefits. If rigorously enforced, strong regulatory capital requirements should make banks much safer for all their constituencies, including the governments that have put themselves on the hook to bail them out, equity owners, bondholders, counterparties, depositors, and even borrowers. Substantially all people involved in bank regulation and supervision agree with this formulation.

    Political Realities

    In Europe, however, two political realities prevent this apparent consensus from being carried out logically toward a joint banking union. The first reality is that not all European nations agree with my formulation concerning the need for rigorous enforcement of regulatory capital requirements. They fight a rear-guard action, contending, variously, that high capital requirements will make loans more expensive (possibly true), that weak banks cannot raise the necessary capital (possibly true if they are, in reality, insolvent), and that governments stand and should stand behind their banks, so rigorous capital regulations are unnecessary.

    These rear-guard nations will seek to use the occasion of banking union to force other countries to bail out their weak or insolvent banks, and they will stand in the way of vigorous insolvency laws that permit-or even require-the regulator to take over and sell or liquidate insolvent banks. In effect, a number of European nations do not want to take away the banking punch bowl. Either they believe that banks are not fragile (against all historical precedent) or they hope to have other countries support their folly. This has implications both for medium-term transitional issues and for longer-term issues involved in setting up a deposit insurance system and a remediation regime.

    (As I wrote several months ago, a prudential supervisor without the power to take over and remediate failing institutions would be close to worthless. A Europe-wide bank regulatory system has to begin from the resolution mechanism and work backwards in order to be successful. If it begins with a supervisor that has no resolution powers, it will quickly find itself with a toothless supervisor and an unworkable deposit insurance system.)

    The second major political reality is that almost every European nation sees its banks as a national resource rather than a privately owned company that may have interests all over the world and that, therefore, has, in a sense, no nationality. Within the European Union, it should be seen that this should not pose a long-term problem. If the Union is going to flourish, then its financial institutions have to flourish as part of the union rather than as national champions. But the idea that banks are national champions is far from dead in Europe (or elsewhere), and it will bedevil those trying to form a meaningful banking union.

    The major architects of banking union, including the top executives of the EU and ECB, understand this quite well, I believe. Perhaps the French and German leaders understand and merely have to posture for a few months before they give in to the realities. The realities include that neither France nor Germany is going to be able to maintain its national champions and that Germany will not accept a responsibility to bail out other nations' national champions that have been managed badly and therefore are functionally insolvent before the unified bank regulatory arrangement begins. My fear is that Germany and/or France will not be willing to embrace centralized supervision that abandons their national champions to the mercies of the ECB and that that will lead to a dangerous, unstable fudge. If that happens, then the instability may take time to become apparent, and the Europeans will have built on quicksand, which might sound familiar.

    Aside from this fear, I am optimistic that these two political issues will prove to be transitional issues that can be solved by admitting to the deposit insurance system and the resolution system only those banks that the ECB will determine to meet the final capital requirements of Basel 3. The Spanish-and the Irish, I guess-are going to be unhappy about that. So will other nations with swaths of effectively insolvent banks. But they all will come along if they see Germany and France abandoning their banking champions to the more rigorous standards of the EU and ECB. I am less certain about how things will play out with the ten non-euro members of the EU. But in one way or another, I do not expect them to be able to stand in the way of the seventeen nations coming together on this subject.

    There is going to be a lot of posturing, pushing and shoving along the way. It will not be pretty. But in the end I believe that Mario Draghi and the other architects of the system will prevail because the banking union is one of the necessary steps to preserve the euro and return the Continent to prosperity.

    Optimism Is Warranted

    Obviously, this is a very optimistic assessment that I am making. But I have been making optimistic assessments about the ECB ever since Mario Draghi took over last November, and so far I have been more right than wrong. I do not deny that there are many issues that will have to be decided along the way or that it is likely that some of them will be decided in unworkable ways. But I do not see that the leaders of Europe have any way of going backward on this set of issues.

    For investors, this probably means that the euro will not weaken greatly in the near future based on fears of union or zone breakup. And that means that securities that trade in euros probably have fairly modest currency risk for American investors. I am not certain how any individual investor should utilize that. But if one agrees with my assessment, then at least the currency risk becomes a risk that is assessed as moderate when considering European investments.

    Italy had a very successful bond auction last Thursday, selling 18 billion euros of 10-year debt at under 5% per annum. If one combines the progress on the banking front with the progress on the debt front in Italy and the prospect of ECB help for Spain, one might even become optimistic that the euro crisis could be over some day-perhaps even as soon as 2014. Greece will remain insolvent and the question of how to accommodate the non-euro nations in EU will come to the fore. But renewed economic growth probably will enable Spain and the others to meet their obligations with the help of the ECB.

    Source: http://seekingalpha.com/article/940651-what-does-european-banking-union-mean?source=feed

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