Gerard Kavanagh was shot dead in a bar on the Costa del Sol Notorious gangster Gerard “Hatchet” Kavanagh was gunned down by two masked assassins yesterday as he relaxed in a Spanish pub.

The 44-year-old was riddled with up to nine bullets by the hitmen, who burst into the Costa del Sol bar in Elviria, near Marbella, just before 4pm Irish time on Saturday. A source said: “The shooting had all the hallmarks of a professional hit.” Terrified gangster Kavanagh tried to flee after spotting the assassins coming through the door of Harmons Irish Bar in Elviria, a 20-minute drive east of Marbella. But it was too late for the doomed crime boss, who fell to the ground in a hail of bullets surrounded by a pool of his own blood. A burnt-out BMW X3 was discovered nearby shortly after the shooting, which happened in broad daylight around 4pm Irish time. Spanish police were last night carrying out a forensic search of the vehicle to see if it was used as the getaway car. A source said: “The gunmen were wearing balaclavas and were dressed from head to toe in black. “The shooting had all the hallmarks of a professional hit. It looks like they picked a time when they knew the bar wasn’t going to be busy. “It is believed the victim was trying to flee when he was shot because many of the nine bullets he took hit him in the back.”

Notorious Irish gangster Gerard 'Hatchet' Kavanagh shot dead in Costa del Sol bar  A police spokesman said: “A fatal shooting has occurred near to Marbella. We are investigating.” Witnesses to the shooting told last night how the gunmen shot their victim in the back as he talked with a mystery woman – and finished the job off as he tried to run for his life. One said: “He was sat on a chair in a pair of green swimshorts talking to a woman I’d never seen before. “The men rushed up to him from behind and shot him two or three times in the back and, as he tried to run for the safety of the bar, finished the job off with a shot to the back of the head. “They turned him over to see if he was dead before fleeing. It was absolutely horrific. “The police took the dead man’s black Audi away and undertakers removed his body around 8pm.” Another said: “The killers left the engine on their getaway car running. “I’ve been told it was found burnt out at a supermarket just down the road.” A pal, who asked not to be named, said: “The dead man was lying face down just inside the door of the bar when I saw him. “He was dressed in just a pair of shorts and there was a lot of blood.” Harmons bar is sandwiched between two restaurants in a pretty, tree-lined square just off the N340 dual carriageway running along the Costa del Sol, which was once dubbed the Road of Death because of the number of accidents along it. The bar was closed last night after the horror shooting. A woman who answered a side door said: “Sorry we’ve got nothing to say. We’re not going to speak.” The owner of a neighbouring bar said: “I don’t want to say anything. This is very bad for business.” Kavanagh’s body was taken to the Costa del Sol State Hospital for X-rays last night to determine exactly how many bullets were in his body. Kavanagh, from Ben Bulben Road in Drimnagh, West Dublin, was a senior member of the notorious Kinahan gang, controlled by godfather Christy Kinahan, who is based on the Costa del Sol.

The gang is involved in drug debt collection, drug dealing on an international scale and is suspected of ordering several executions in Crumlin-Drimnagh feud. Kavanagh was jailed for four years in 1996 when he was just 25 for dealing heroin in the Crumlin area. Back then his defence had argued that Kavanagh was only before the court as he had developed a drugs habit forcing him to work as a courier for gangs. The Dublin Circuit Criminal Court was told that he was involved in a chain of drug distribution headed by drug barons. Following his sentence, Kavanagh paired up with Tallaght gangster Paul Rice, who was jailed for 10 years in July 1995 after pleading guilty to the robbery of a bank in which shots were fired. Together they rose to the top of the drug ladder before Kavanagh packed up and moved to Spain where he was reported to be supplying most of Tallaght and a large area of Drimnagh with illegal drugs. He has been living in Benalmadena for almost a decade with his wife and two children where his daughter is a star of the show-jumping circuit and his son is a professional boxer. Security sources say that the shooting has now raised fears for the safety of the Kinahans.

The scene of the shooting is near to the luxury Don Carlos Hotel, which this weekend is hosting the 19th US-Spain forum. The Spanish ambassador to the USA and the American ambassador to Spain were among guests who opened the three-day event and security had been stepped up significantly in the area. Kavanagh was jailed for four years in March 1996 after he was caught with €3,500 worth of heroin and cannabis. In court, Detective Eamonn Maloney said that Kavanagh was “a major figure in drug supplies in the Crumlin, Drimnagh and Dolphin’s Barn areas of Dublin for some time”. He was forced to flee Ireland after he was targeted by anti-drug vigilantes and the Crininal Assets Bureau.

A man identified as Amsterdam crime boss Samir B. was murdered in Benahavis, Marbella in Spain on Wednesday. image: inmo-andalucia.com The 36-year-old, also known as “Scarface,” was killed in the Spanish town near Marbella on Wednesday afternoon, Het Parool reports.

 

News reports speak of a gangland execution. Samir B. was in the Monte Halcones mall in the picturesque mountain village around 2.00pm when he was shot multiple times in his back and head by two assailants. He was apparently shot on his way out of a storefront in the shopping center. Witnesses called the authorities, but the emergency services could do nothing to resuscitate him.

The Dutch-Moroccan victim from near Sloterdijk in Amsterdam West has been named in connection with sizeable drug deals. Crimesite.nl writes that he was the largest drug dealer in the city, and he actually marked his cocaine blocks with his own stamp. B. had relocated to Spain a few years back, but apparently his hold on the Amsterdam underground remained. Het Parool writes that B. had a long career in the underworld of Amsterdam West. He grew to be one of the biggest crime bosses in the city.   In June 2010 he was arrested there and extradited to the Netherlands, in connection with the death of 12-year-old Danny Gubbels in Breda; the boy died when someone opened fire on his parent’s trailer and B. was named. He was released after only a few days in prison here, for lack of evidence.   His execution in Benahavis is being investigated by the local police, as well as the Spanish military police force, Guardia Civil, and national police agents. Earlier this month, another of Amsterdam’s criminal leaders, Derkiaoui van der Meijden, was also killed in Amsterdam Oost.

240 kilos of cocaine have been found in the hull of a yacht in Huelva Agents from the National Police, in collaboration with the United States DEA, have arrested six people; four in the province of Huelva and two in Madrid in the three searches carried out as part of the same operation. The investigation started at the beginning of April, when large amounts of cocaine has been arriving in Europe by sea, carried out by an international organisation. Further investigations revealed the head of the organisation is a Spaniard, who lives in Colombia, and who had returned to Spain recently, presumably, to coordinate a consignment of the drug. The rest of the organisation are all Colombian, and had the job of providing logistic support on land for the reception and extraction of the drug.

MATTHEW MACKLIN, the Marbella based boxer, whose proposed fight against Argentine fighter, Jorge Sebastien Heiland in a WBC eliminator on August 30 was postponed after his trainer, Jamie Moore, was shot in Marbella, is set for a swift ring return. His opponent is as yet unnamed, however, Macklin is expected to undertake his 36th professional bout next month on September 27, on the Felix Sturm - Paul Smith WBA middleweight ‘Super’ title fight undercard in Kiel, Germany. If as expected Macklin wins, the three-time world title challenger expects to be returning to Dublin for the Heiland fight on November 15. Macklin, hopes the Heiland fight will bring him a fourth shot at a world title, as promoter Eddie Hearn looks to guide him to the big title that has eluded him so far.

An Irish teenager is in custody on an attempted murder charge after a violent street fight on the Costa del Sol. The 17-year-old was part of a group of four Irish holidaymakers who got into a row over a girl during a night out in the upmarket resort of Puerto Banus near Marbella. His brother allegedly punched a friend unconscious before the teenager kicked him in the head as he lay on the ground. The victim was rushed to the nearby Costa del Sol Hospital before being transferred to a specialist centre in Malaga so he could be treated for “life-threatening” head injuries.

Doctors have told police he cheated death because of the rapid medical attention he received. The altercation happened around 3am on August 14 in a street a short walk from Puerto Banus port named after singer Julio Iglesias, who owns a house in mountains a short drive away. Investigators say they believe the four men, who had been out drinking together, rowed over a girl. Local police made the arrests at the scene after witnessing the assault from a distance. The injured man, who like the other three Irish holidaymakers involved has not been named, is now being treated in a normal ward after spending several days in an induced coma in intensive care. Police from a specialist anti-violence unit based in Malaga have led the investigation.

A youth court judge remanded the teenager to a young offenders’ institution after quizzing him in a closed court session. His brother, whose age is not known, has been released on bail but is thought to have had his passport taken away from him so he cannot leave Spain. A trial date has yet to be set. The Irish teenager is expected to be held for custody for several months before he is released ahead of trial. A source close to the case said: “The judge quizzed him on an attempted murder charge because medical experts who examined his alleged victim concluded the consequences of the assault could have been much more serious if he hadn’t received rapid medical attention.”

Spain’s changing climate and economy fuels wildfire risks.Climate change is gradually turning Spain into a fire zone – and a change in the economic climate is inflaming the situation.

The combined forces of climate, economic and social change are leaving Spain increasingly exposed to the damaging and costly effects of wildfires.

A research group reports that a mix of factors is behind the rise in both the numbers of forest fires and the areas of land scorched over the last 40 years.

Vanesa Moreno, a researcher in the geography department at the University of Alcalá in Madrid, and colleagues studied the pattern of fires in Spain from 1968 to 2010.

Although Spain, like much of southern Europe, is expected to become more arid with global warming, and although some Mediterranean vegetation is adapted to − and even benefits from − natural fire outbreaks, the picture is not a simple one.

In the moister Atlantic north-west of the country, there are two fire seasons − at the end of winter, and in the summer. In the Mediterranean region, fires are more frequent in the long, hot summer.

 

A fire has broken out in Benahavis, near Marbella. This photo was taken on the road between Estepona and San Pedro. The cause of the fire is still not yet known, but follows in the wake of a serious fire in Los Montes de Malaga exactly a week ago. The fire in Los Montes devestated 260 hectares of natural park. So far this year there have been 20 such fires in Malaga Province, which experts say is within the average range of annual fires.

Heavily armed men have attacked a convoy of cars belonging to a Saudi prince, stealing 250,000 euros (£200,000; $330,000), police say. The convoy was heading through northern Paris on its way to Le Bourget airport late on Sunday evening when it was raided, reports say. The gunmen seized a vehicle carrying the money and documents, later releasing the driver and two others. The convoy was said to have come from the Saudi embassy. No-one was hurt. The gunmen, reportedly armed with Kalashnikov rifles, targeted a Mercedes mini-van at 21:15 (19:15 GMT) on the northern ring road, or peripherique, at Porte de la Chapelle, on the edge of Paris.

The motorcade, belonging to a Saudi prince, was targeted by eight people in two separate vehicles who pointed their guns at the driver of the Mercedes, forcing him to stop, French media reported.

The men then drove the vehicle away with the driver and the two other Saudis inside. No shots were fired but the Saudis were later freed and the vehicle eventually found burned out.

"In the vehicle there was roughly 250,000 euros in cash and official documents from the embassy," police union spokesman Rocco Contento told BFM TV news.

Immigrants who are waiting in Tangiers to cross into Spain have been attacked and their homes ambushed. The NGO’s at the scene fear the aggression against the Sub-Saharans will force them to try to cross the Strait to escape whatever the weather conditions.

The problem started on Friday near the Tangiers airport. The Sub-Saharan’s were told a bus was going to Spain and some 20 women and their children took up the offer. But the bus took them to a local dance festival of African culture called Twiza which was being held in Tangiers for some days. When they realised they had been fooled they returned home, and met a group of Moroccan men armed with machetes and sticks who started to hit them.

Five of the women suffered stab wounds and others suffered abuse. Spanish volunteer, Helena Maleno, was among them and believes the violence is being organised by criminal groups. She was sexually molested by one of the men. She said the Moroccans speech was always the same, ‘We want to clear up here, go to Spain’. Last year an immigrant died when he fell off a wall during a police raid, bringing charges of murderers against the police amid violent scenes as you can seen in the video below.

An ebola alert has been activated in Alicante, Spain, after a young Nigerian man was admitted to hospital with fever and vomiting. Spanish health authorities activated alert protocols after the man showed "several symptoms" of the disease.

The alert comes a week after a Spanish priest who contracted ebola while working in Liberia died in hospital in Madrid. The man was taken ill in the eastern city of Alicante Father Miguel Pajares was the first European infected by a strain of the virus that has killed more than 1,000 people in West Africa.

He was airlifted from Liberia to Spain on August 7 after becoming infected while working for a non-governmental organisation there. The 75-year-old was flown to Europe for treatment with his co-worker Juliana Bohi, a nun who has since tested negative for the disease. Elsewhere, 17 ebola sufferers have fled a Liberian clinic raided by looters who stole blood-stained sheets - sparking fears the virus will spread.

MOROCCAN anti-terror services working in collaboration with Spanish police officers have broken up a jihadist terror cell in Morocco. In total nine members of the cell, reported to be linked to the Islamic State of Iraq and Syria (ISIS), were detained on Thursday in the three Moroccan cities of Fes, Tetouan and Fnideq. The terrorists were working to recruit new members to the cell with the objective of sending them off to fight in the conflicts currently underway in Syria and Iraq.

It is believed that some of the group made frequent visits to the Spanish city of Ceuta, located on the north coast of Morocco, with the intention of converting people to their cause and raising financial aid. The Spanish Interior Minister has linked those arrested with ISIS, and confirmed that they had received training in the use of weapons and the manufacture of explosives with the goal of participating in suicide attacks or travelling to conflict zones in the Middle-East.

It has also come to light that there were plans to carry out a terror attack on Moroccan soil. Computers and other data-storage devices used by the jihadists are currently being examined for evidence of concrete plans. The investigation remains open within the three cities, with police from both nationalities continuing to work together. Government sources commented that the operation reflects on the excellent relationship that exists between Spain and Morocco when combating terror in the region.

THE Guardia Civil have arrested two people under suspicion of stealing suitcases from distracted airport passengers. Within the Guardia Civil brief of the Safer Tourism Plan which has been put in place to prevent theft from tourists visiting Malaga, the officers at the airport have caught two people who were taking national flights with only hand baggage and then taking advantage of distracted tourists arriving at the baggage carousels to steal their luggage while they were looking away. On several occasions they also, allegedly, pick-pocketed passengers as well as taking their hand baggage while they were retrieving their check in luggage. Investigating officers calculate that they have stolen around €21,000 worth of luggage and wallets.

The death toll from the world's worst outbreak of Ebola stood on Wednesday at 1,069 from 1,975 confirmed, probable and suspected cases, the agency said. The majority were in Guinea, Sierra Leone and Liberia, while four people have died in Nigeria. The agency's apparent acknowledgement the situation is worse than previously thought could spur governments and aid organisations to take stronger measures against the virus. "Staff at the outbreak sites see evidence that the numbers of reported cases and deaths vastly underestimate the magnitude of the outbreak," the organisation said. "WHO is coordinating a massive scaling up of the international response, marshalling support from individual countries, disease control agencies, agencies within the United Nations system, and others." International agencies are looking into emergency food drops and truck convoys to reach hungry people in Liberia and Sierra Leone cordoned off from the outside world to halt the spread of the virus, a top World Bank official said. In the latest sign of action by West African governments, Guinea has declared a public health emergency and is sending health workers to all affected border points, an official said. An estimated 377 people have died in Guinea since the outbreak began in March in remote parts of a border region near Sierra Leone and Liberia. Guinea says its outbreak is under control with the numbers of new cases falling, but the measures are needed to prevent new infections from neighbouring countries.

"Trucks full of health materials and carrying health personnel are going to all the border points with Liberia and Sierra Leone," Aboubacar Sidiki Diakit president of Guinea's Ebola commission, said late on Wednesday. As many as 3,000 people are waiting at 17 border points for a green light to enter the country, he said. "Any people who are sick will be immediately isolated. People will be followed up on. We can't take the risk of letting everyone through without checks."

Poice have established that a 39-year-old Irish man who was arrested in Spain after allegedly throwing two suitcases of cocaine out of a hotel window is a criminal who was previously targeted here in a proceeds-of-crime case. The suspect, who remains in custody in Valencia, has been named as Philip Grendon from Greenfort Drive, Clondalkin, and also with an address at Spiddal Road, Ballyfermot. Grendon's brother, Brian, is a member of a major west Dublin drugs gang who have been constant targets of gardai for 15 years. Already this year, officers based in Ballyfermot have been involved in the seizure of more than €1m worth of drugs from this crew who are considered one of the most organised and longest-established in the country.

The bizarre incident for which Grendon was arrested in Valencia happened last Friday just before 10pm at the four-star Tryp Valencia Oceanic Hotel. Police are said to be working on the theory that the alleged drugs trafficker, who had checked into the hotel a few hours earlier, confused noise from other guests entering and leaving their rooms with a rival gang trying to steal his drugs after suffering a paranoia attack. It is alleged that Grendon also removed ceiling tiles in his room, along with an air vent in an apparent attempt to hide the stash.

The 55kg of cocaine in the cases would have an estimated street value of more than €3.8m in Ireland. Sources who know Grendon say they are "surprised" that he would be trusted by a gang to be in charge of such a huge drugs haul. "Philip was always known to be a paranoid individual, but if what the Spanish police are saying is true, this is taking paranoia to a whole new level," a senior source said. Grendon's younger brother is convicted heroin dealer Brian Grendon (37), who was jailed for six years in December 2002 after he was busted with almost €2m worth of heroin in Palmerstown, west Dublin, the year before. shootings Brian Grendon was previously described in court by a senior detective as being linked to a gang who had in the past "used fatal shootings of anyone who compromised their business".

Philip Grendon appeared in court in Dublin in February 2012 when gardai prosecuted him under proceeds of crime legislation. Some of his associates were targeted by gardai as part of Operation Jumbo in 2002. They included murder victim David McCreevy (23), who was shot dead in Tallaght in 2002.

 

EU's anti-fraud office on Monday urged Gibraltar and Spain to launch legal action after it found signs that organised crime was behind a rise in cigarette smuggling in southern Spain, AFP reports. The European Anti-Fraud Office (OLAF) made the recommendation after completing a probe it launched in August 2013 at the request of Madrid into a sharp rise in cigarette smuggling across the border between Gibraltar and Spain between 2009 and 2013. "The OLAF investigation has raised a number of concerns regarding the link between a significant increase in the size of the Gibraltar market for cigarettes over the past four years and the subsequent increase of cigarette smuggling across the frontier," a spokesman for the anti-fraud office said. "The concerns include indications of the involvement of organised crime," it added. "The OLAF final case report, and recommendations to initiate judicial proceedings related to the findings of the report, have been sent to the Spanish General State Prosecutor and to the Gibraltar Attorney General." Widespread cigarette smuggling between the tiny, low-tax British territory of Gibraltar to Spain is a major irritant in their frayed diplomatic relations. Smugglers buy the cigarettes in large volumes in Gibraltar at a price much lower than is charged in Spain, where the government in 2012 increased the sales tax to help plug a gaping public deficit. Spain in August introduced stringent border checks at its border with Gibraltar, leading to lengthy queues for motorists, in what it said was a move aimed at clamping down on cigarette smuggling.

But Gibraltar argues the stepped-up border controls are in retaliation for the installation of an artificial reef in its waters that has prevented Spanish boats from fishing there. Gibraltar Chief Minister Fabian Picardo welcomed the anti-fraud office report and said the territory wanted to work together with Spain to investigate the cigarette smuggling. "We wish any necessary investigations in this and in all areas to be carried out jointly between the competent Spanish and Gibraltar authorities in a genuine spirit of cooperation," he said. The government of Gibraltar said cigarette smuggling was already being brought under control thanks to the "draconian" measures it introduced in January. These include the introduction of searches of vehicles crossing into Spain and giving customs and police officers greater powers to fight smuggling. The Spanish government meanwhile said the anti-fraud office's report "justified" its "work in the fight against fraud and the underground economy". Spain ceded Gibraltar to Britain in 1713 but has long argued that it should be returned to Spanish sovereignty. London says it will not do so against the wishes of Gibraltarians, who are staunchly pro-British.

confirmed by the Madrid's health department that a 75-year-old Spanish priest, Miguel Pajares has died in Madrid’s Carlos III hospital from Ebola. The Spanish priest who was recently repatriated from Liberia, Africa last Thursday had been in isolation in Saint John of God hospital in the capital of Monrovia. It is known that he contracted the Ebola virus from the Director of the Hospital after a visit. The director is also known to have died. Miguel Pajares was being treated with an experimental drug ZMapp which is designed to fight the deadly virus, but failed to respond to the medication.

The drug ZMapp is a treatment that is made by a private US company and is still in intensely early stages and had previously been only tested on monkeys. In a statement the health ministry said that the drug arrived to the hospital late on Saturday evening to treat the 75-year-old. The drug ZMapp though in very early stages, was only allowed by the Spanish drug safety agency under “exceptional importation” to be used in the use of a non-authorised medication because of an incident where a patient’s life is in danger.

With an invite-only door policy and super secret location, Boiler Room is London's most exclusive music venue. But elitism isn't the premise for its clandestine nature—in fact, anyone with an Internet connection can easily join in the fun. Using a simple webcam, the crew behind Boiler Room livestreams each set for the world to see free of charge, and each month more than a million viewers tune in to see performances by artists like James Blake, The xx, Roots Manuva, Neon Indian, Juan Maclean and more.

We recently chilled out to the smooth sounds of Brooklyn's How To Dress Well before rocking out to revered musician Matthew Dear, who brought down the house with an intense 40-minute DJ set. Keep an eye out for our interview with Dear, but for now you can get a little more insight into the underground music scene's most talked about livestream show by checking out our interview with assistant musical programmer and Boiler Room host Nic Tasker.

How important is it for Boiler Room to remain secret, at least in its location?

That is quite an important aspect of it, purely because it means when you do shows you don't get a lot of groupies, pretty much everyone in the room is either a friend of ours or one of the artist's. It helps to create a more relaxed atmosphere for the artist and I think they feel less pressure. They're also just able to chill out and be themselves more rather than having people being like, "Hi can I get your autograph?" If the artists are relaxed usually you get the best music.

It seems like there is more interaction among the crowd than at a typical venue, is that intentional?

It's definitely a social place. All the people that come down, most of them we know and they're all our friends. So they come down, hang, have a drink and just chill out, basically. From our very set-up, we do it with a webcam, we're not a highly professional organization but I think that's kind of the charm of it. The main thing is people come down with the right attitude.

How much of the show is prescribed?

I guess that depends on the artist. We never say anything. Literally, whatever they want to do—we're kind of the platform for them to do whatever they want, so if Matthew Dear wants to come and play an hour of noise with no beats, he can do that. That's fine with us, and I think that's why artists like coming to play for us. We're not like a club where you have to make people dance, we don't give a shit if people dance. It's nice if they do and it makes it more fun, but some nights you just get people appreciating the music, which is equally fun.

Is there a particular kind of artist you guys look for and ask to come perform?

No, not particularly, it's just whatever we're feeling. Thristian [Boiler Room's co-founder] has the main say on musical direction, but it's a massive team effort. In London there's five of us, New York there's two, LA there's one and Berlin there's two.

Tonight you had different set-ups for each artist, do you tailor their positioning in the room to their style?

It definitely depends on the act and what kind of music they do. With live bands we found what works nicely is having them opposite each other because it's like they're in rehearsal, like they're just jamming. Which is again trying to give them that chilled out feel that they're just at home jamming and there happens to be a camera there. For some of our shows we've had over 100,000 viewers. When you think of those numbers it's quite scary, but when you're in the room and it's all friends it creates that vibe that people don't mind. You can imagine if you had all those people in front of you it would be a very different situation.

Have you ever thought of Boiler Room as an East London version of Soul Train?

It's never crossed my mind like that, but I can see why you think that. I like to think of us as the new music broadcaster, kind of the new MTV, but obviously we operate in the underground scene mainly. But I like to think that what we do is as revolutionary as what they were doing. We're always growing into something new.

What's up next for Boiler Room?

We have had visual people in doing 3D mapping, and that's something we're looking forward to progressing—doing more with the visuals. We've got the upstairs as well, we're starting to do breakfast shows with some high profile DJs, we're going to be doing that regularly. Each will have an individual format. The next step is progressing the US shows, we're alternating weekly between New York and LA, so the next step is to take Boiler Room to America

Breaking Free of the Co-dependency Trap presents a groundbreaking developmental road map to guide readers away from their co-dependent behaviors and toward a life of wholeness and fulfillment.UK Citizens

This is the book that offers a different perspective on codependency and is strongly recommended by Dream Warrior Recovery as part of a solution based recovery. This bestselling book, now in a revised edition, radically challenges the prevailing medical definition of co-dependency as a permanent, progressive, and incurable addiction. Rather, the authors identify it as the result of developmental traumas that interfered with the infant-parent bonding relationship during the first year of life.US Citizens

Drawing on decades of clinical experience, Barry and Janae Weinhold correlate the developmental causes of co-dependency with relationship problems later in life, such as establishing and maintaining boundaries, clinging and dependent behaviors, people pleasing, and difficulty achieving success in the world. Then they focus on healing co-dependency, providing compelling case histories and practical activities to help readers heal early trauma and transform themselves and their primary relationships.

 

All of the following ads are real and unaltered, so don't blame us. We weren't there when they were made, and in some cases the entire insane thought process that went into creating them has been lost to history. Maybe they made perfect sense at the time?

Maybe. But it's really hard to see how even our parents and grandparents didn't get nightmares from ...

#13. Three-Legged Dingo Boots

vintageadbrowser.com

The Message:

Here are some boots that you should buy, because famous people wear them. Three of them.

The Horror:

Wait, what?

Yes, amazingly, the fact that this ad stars a pre-murder O.J. Simpson is the second-creepiest thing about it. And you can squint and try to read the text all you want -- it makes no reference whatsoever to the fact that their spokesperson has three legs. There's no cute slogan like "Boots so comfortable, you'll wish you had another foot!" Nope. It's like some guy in the art department just said, "Eh, I don't like how you can't really see the chair, let's just add another leg to fill that space."

We know what you're thinking: "Cracked, this is obviously a subtle 'big dick' joke. 'Third leg?' Get it?" But, no, it turns out this was a whole campaign they did with various celebrities, some of whom are women:

eBay
Like, uh ... this famous lady right here.

But O.J. seems to be the most frequent star of the "Third Leg" campaign, which apparently lasted for years. Note how his afro shrinks as he gets more comfortable with his new appendage:

The picture in that third ad would have been perfect for the cover of his book.

Please don't blame us for the inevitable nightmare in which O.J. is running after you, in the dark, those three boots pounding down the pavement after you with a noise like a wounded horse.

#12. Lord West Suits Will Impress Your 7-Year-Old Date

vintageadbrowser.com
"I like my women like I like my code names: 007."

The Message:

Women of all ages dig men in tuxedos!

The Horror:

According to the text, this dinner suit is for "sophisticated traditionalists," a euphemism we weren't previously aware of for "child molesters." Because there's no other way to interpret this picture. That's not tenderness on their faces. That's hunger. If you told us that they're a father and daughter, that would only make it creepier.

And it turns out that this is only the worst example in a whole series of ads associating little girls with selling tuxedos.

eBay
The style is best described as Godfather meets Lolita.

Can you imagine the pitch meeting that led to this campaign? Picture Don Draper from Mad Men standing before his clients, selling them on this idea:

"Class. Elegance. Making out with little girls. These are the values your company represents."

"Did ... did you say 'making out with little girls,' Don?"

"Yes," replied Don with perfect confidence.

"OK, just making sure."

Sitting at the end of the table, Peggy looks at Don and smiles. He did it again.

#11. Man in Tuxedo Carefully Considers Naked Child

library.duke.edu
"Told you it was bigger. Now pay up."

The Message:

Regular soap sinks in the bathtub, causing children to take longer in washing themselves and their fathers to get angry and spank them. Prevent child abuse by buying Ivory Soap -- it floats.

The Horror:

OK, they're clearly just fucking with us at this point. Remove the text and the message becomes clear: "In the old days, child predators used to dress way better than they do now." But let's put the pedophilia overtones aside for the moment and examine the text.

Was the elaborate scenario described under the picture (involving childhoods ruined by non-floating soap) really such a common problem in the '20s, or was this based on the painful personal experiences of whoever commissioned this ad? We're betting on the latter option. Note that the father's body language doesn't say "I'm going to spank you" -- he's clearly pondering which part of the kid's body to break first.

"Maybe the 28th trimester isn't too late for an abortion."

#10. "Are You Sure I'll Still Be a Virgin?"

thesocietypages.org
"If you didn't think band camp counted, I don't see why you'd think this would."

The Message:

Don't worry, teens, you can use Tampax tampons without losing your virginity.

The Horror:

Be honest: How many of you looked at this picture and immediately recognized it as a Tampax ad? And how many looked at it and thought it depicted a teenage girl being sexually propositioned? It's not just us, is it?

This ad would have looked 90 percent less sordid if both people involved were clearly visible. Instead, the second teenager is for some reason sitting on the floor of the porch with her back to us, so we can't see how young, or scared, she is. But, of course, all of that is purely from our own depraved imagination. The real ad is simply about two teenagers debating whether or not inserting a tampon counts as sex.

#9. Escaped Convicts Love Revell Authentic Model Kits

vintageadbrowser.com
"Is this the new plan, boss?"
"I've spent all day plotting against Superman; this is 'Lex Time'."

The Message:

Hey kids! Check out these sweet model kits!

The Horror:

There's only one possible scenario in which this picture could have come to exist: The photographers were getting ready to shoot this ad when they realized that the boy who was supposed to be holding up the models in the picture never showed up for work. Panicking, the man from the ad agency looked around the studio.

"Dmitri, can you come here for a second?" he said to the guy who fixes the lighting. "Stand here and hold this model. Yes, that's great. You'll play the boy in this ad."

"But sir," said the photographer, "Dmitri was just released from jail. In fact, he's still wearing the prison jumpsuit."

"No, no, he's perfect. Look at him. Look at that childlike innocence in his face."

"Could you open the top button maybe, show a little chest hair?"

"Perfect."

#8. Our Competitors = Surgical Ass Torture

vintageadbrowser.com
"Don't worry, sir, the gloves are just to establish atmosphere."

The Message:

Using cheap toilet paper can lead to medical complications.

The Horror:

... which in turn can lead to rubber-gloved hands inserting clamps in your anus. Better play it safe and go with Scott Tissues.

This attempt to traumatize customers into buying their product with threats of anal torture was part of a whole marketing campaign created during the Great Depression in which Scott Tissues' slogan went from "Wipe your butt with us" to "Wipe your butt with us, or die in a world of asshole pain."

Of course, it was all bullshit: There's no such thing as "toilet tissue illness," it was just a thing they made up to convince people to keep buying tissues at a time when they were lucky enough if they had a toilet.

#7. "Before You Scold Me, Mom ... Maybe You'd Better Light Up a Marlboro"

deceptology.com

The Message:

Before you beat your baby for stealing your favorite hat, have a cigarette and relax yourself. Then beat the baby.

The Horror:

How many times did this months-old child have to be punched before it learned to pick up the Marlboros and offer them to mommy to calm her down? If that's not the saddest thing you've imagined all week, you're dead inside. This is actually one in a series of ads from the '50s, back when Marlboro was targeting mommies instead of rugged cowboys. Sometimes the babies actually seem to be guilting their moms into smoking more.

tobacco.stanford.edu
"You turned me into an addict when I was a fetus, now deal with it."

Oddly enough, the version of this ad aimed at fathers doesn't involve scolding, but a pompous baby in a basket defending daddy's rather feminine cigarette tastes (note the reference to "beauty tips" at the bottom).

tobacco.stanford.edu
This is the kind of debate babies have all the time.

Shares in Standard Chartered PLC dropped sharply today as investors reacted to US charges that the bank was involved in laundering money for Iran. The charges against Standard Chartered were a shock for a bank which proudly described itself recently as “boring.” Shares were down nearly 20 percent at 1,187 pence at one point in early trading Tuesday on the London Stock Exchange. In Hong Kong, they were down 16.6 percent near the end of the session. New York State Department of Financial Services alleged on Monday that Standard Chartered schemed with the Iranian government to launder $250 billion from 2001 to 2007, leaving the United States' financial system “vulnerable to terrorists.” Standard Chartered said it “strongly rejects” the allegations. In a statement, the bank said “well over 99.9 percent” of the questioned transactions with Iran complied with all regulations, and the exceptions amounted to $14 million. The New York regulator ordered Standard Chartered representatives to appear in New York City on Aug. 15 “to explain these apparent violations of law” and to demonstrate why its license to operate in the State of New York “should not be revoked.” Gary Greenwood, analyst at Shore Capital in London, said the possible revocation of the New York license was of far greater concern than any potential fine, which could run into hundreds of millions of dollars. Standard Chartered's US operation facilitates trade for customers that have operations in both the United States and emerging markets. “Indeed, this is an area of the business that has been highlighted by management for growth,” Greenwood said. “A loss of its US banking license would not only jeopardize part of this profit stream, but the associated reputational damage could also have a severely damaging impact to its operations within emerging markets.” The New York agency alleged that Standard Chartered conspired with Iranian clients to route nearly 60,000 different US dollar payments through Standard Chartered's New York branch “after first stripping information from wire transfer messages used to identify sanctioned countries, individuals and entities.” The New York regulators called the bank a rogue institution and quoted one of its executives as saying: “You (expletive) Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians.” The order also identifies an October 2006 “panicked message” from a London group executive director who worried the transactions could lead to “very serious or even catastrophic reputational damage to the group.” If proven, the scheme would violate state money-laundering laws. The order also accuses the bank of falsifying business records, obstructing governmental administration, failing to report misconduct to the state quickly, evading federal sanctions and other illegal acts. Between 2004 and 2007, about half the period covered by the order, the department claims Standard Chartered hid from and lied about its Iranian transactions to the Federal Reserve Bank of New York. Before 2008, banks were allowed to transact some business with Iran, but only with full reporting and disclosure, the order states. In 2008, the US Treasury Department stopped those transactions because it suspected they helped pay for Iran to develop nuclear weapons and finance terrorist groups including Hamas and Hezbollah. The order states the bank has to provide information and answer questions to determine if any of the funding aided the groups or Iran's nuclear program. Last week, Standard Chartered' chief executive, Peter Sands, boasted that the bank has racked up a 10-year string of record first-half profits “amidst all the turbulence in the global economy and the apparently never-ending turmoil in the world of banking.” “It may seem boring in contrast to what is going on elsewhere, but we see some virtue in being boring,” Sands added.

Not too long ago, as I was putting the final touches on a client presentation, I stumbled across a surprising observation. The best insights in my report didn’t emerge in my office, during conference calls, or at meetings. They somehow appeared in the bathroom.

Research on the nature of creativity suggests my experience isn’t all that unique. Often, the most effective way of solving a difficult problem is simply walking away. The moment we allow ourselves to disengage from the individual pieces of a puzzle is the moment a solution appears. It’s why Albert Einstein regularly went sailing and why Charles Darwin planned his day around a countryside stroll. Thomas Edison simply napped.

In many ways, problem solvers are like artists. Taking a few steps back provides painters with a fresh perspective on their subject, lending them a new angle for approaching their work. Problem solving follows a similar recipe, but it’s not always the physical distance that we need. It’s psychological distance; mental space for new insights to bloom.

In a world where finding solutions makes up the crux of a typical workday, we are all artists. Cognitive artists. And to deliver our best work, we need revitalizing breaks. Distancing ourselves from our work grants us a broader view, activating a global perspective that precedes breakthrough.

So, why the bathroom?

If you’re like most office employees, access to sailboats, the countryside and a relaxing couch is in short supply. A walk to the bathroom is one of the few opportunities you have for disengaging, letting go of trivial details and refocusing on the bigger picture--even Steve Jobs recognized the bathroom's potential, insisting that Pixar only build two in its studios, to provide employees with maximum enforced mixing. Neurologically, it is during these moments away from your desk the right hemisphere of your brain comes to life, making you more appreciative of the forest and less sensitive to the trees.

While most of us give little thought to our workplace bathroom, there’s good reason to believe it can have an impact on the quality of the work we produce -- especially in organizations that rely on creativity and problem solving to stand out. Over the past decade, studies have shown that both our thoughts and behaviors are heavily influenced by our surroundings, in ways we often fail to recognize.

A few examples:

• The sound of classical music makes consumers spend more money
• The smell of cookies makes shoppers more likely to help a stranger
• The sight of red hurts intellectual performance but improves physical performance

Psychological findings like these are now commonplace, pointing to one irrefutable fact: Our environment shapes our thinking in powerful ways.

Which brings up some intriguing questions: How can we make the most of our time away from our desks? Is there a way of designing bathrooms to make them more inspiring? And what can organizations do to maximize the insights its employees get out of each bathroom visit?

Recent research on the science of creativity provides some helpful suggestions.

Rethink Muzak

One of the ways we become more creative is by exposing our minds to a broad variety of stimuli. The wider the selection of information you mentally digest--whether it be foreign movies, experimental novels or exotic travel--the more remote associations you’ll have in your arsenal. Or, in laymen’s terms, the more creative you’ll be.

Hearing unusual music primes us to think different--inspiring ideas, emotions and experiences that increase the associations active in our brain.

Surprise The Senses

 Another creativity nugget: We tend to find more insightful solutions to a problem when we're in a good mood. One method experimentally proven for improving people’s moods is enjoyable scents. Positive scents don’t just make us feel better--they lead us to set higher goals for ourselves and experience a greater sense of self-efficacy.

Now, if you’re like most people, the restroom isn’t the first place that comes to mind when you think of positive scents, and partly that’s because of how hard custodians work to mask negative smells, leaving most bathrooms feeling like an assault on the senses. But in our case, that’s a good thing. It means the bar for surprising people with positive scents is that much more accessible. A few opportunities for enhancing the scent of a workplace bathroom: unusual soaps, exotic candles, and the hallway outside a bathroom, boosting people’s mood before and after a visit.

Encourage Mental Stimulation

Part of what makes bathroom visits a boon to creativity is that they represent one of the few times during the workday when our physiological attention is directed inward, mimicking the psychological experience of insight. But it’s not just inward attention that’s needed--it’s inward attention in the context of fresh ideas.

Think about the last time you saw graffiti in the bathroom. Chances are, not only did you read it, you probably thought about the person who wrote it, perhaps wondering what (the hell) was going through their mind. We can’t help but think about the things we see, but we can choose what we look at. Providing a diet of mentally stimulating material in workplace bathrooms can be done in a number of ways: posting unusual artwork, leaving out thought provoking magazines or using digital picture frames to keep the imagery fresh. The key is for the material to be stimulating and indirectly related to work you do.

Once upon a time, going to the bathroom was a distraction. Something that kept us from work; an unfortunate bodily shortcoming that compromised efficiency. But that world doesn’t exist anymore. Today, our economy is powered by an engine of insight. Creativity in the workplace isn’t a “nice to have”—it’s what keeps companies in business. Which is why it’s ironic that most office bathrooms offer a bleak and unwelcoming environment. One that discourages insight and implicitly chides us to get back to our desks.

There’s just one problem. Creativity doesn’t work that way.

And if the science has taught us anything about the creative process it’s this: Finding unexpected solutions often requires an unexpected approach. Why not start in the bathroom? 

The O2 mobile phone network crashed tonight leaving thousands of customers across the country cut off. Users were left stranded, unable to make or receive calls or send texts, as the firm - which has 23 million customers in the UK - said it did not know when the problem would be fixed. Some customers also had no internet access. O2, Britain's second-largest mobile phone operator, admitted it was unclear exactly how many people had been affected. It said ‘thousands’ may be experiencing problems. The problems began this afternoon for some mobile users, the network said. O2 are urging customers to check their Twitter and Facebook feeds for updates - but the company’s webpage which displays live information about network coverage crashed. A spokeswoman said the problem was not 'location-specific'. ‘The problem is an issue within part of our core network that is preventing some mobile phones from successfully connecting,' she said. ‘The problem is not location-specific. All possible resources across our and our suppliers’ engineering teams are being deployed to restore service as soon as possible.’ Thousands of angry customers took to Twitter to complain. BBC television presenter Huw Edwards (@huwbbc), tweeted: ‘6 hours of non-service and counting, simply not good enough, O2.’ One Twitter user, Kelly Jones (@kelly-92), tweeted: ‘Having a phone that hardly works usually is annoying, but this whole no signal on o2 all afternoon is beyond irritating.’

It's a relatively unknown Australian mining magnate. So who exactly is Gina Rinehart?

Asked once to sum up her concept of beauty, Gina Rinehart did not point to the pearls that so often adorn her neck.

Nor did she rhapsodise about the ochre landscape of her beloved Pilbara, a beautiful, if unforgiving, expanse of land in the northwest corner of Australia.

Instead, she spoke of the unlovely commodity that has made her family rich, and the giant holes in the ground from where it came. "Beauty is an iron mine," she famously remarked.

When her father, Lang Hancock, discovered one of the world's biggest reserves in the early 1950s, the export of iron ore was banned in Australia because it was deemed such a scarce and finite resource.

Continue reading the main story

Gina Rinehart

• Georgina Hancock born in Perth in 1954, studied in Sydney
• Father Lang Hancock made huge iron ore discovery in Western Australia before her birth
• Married lawyer Frank Rinehart in 1983
• After father's death in 1992, Gina became executive of the company
• Widowed with four children

• Rinehart 'world's richest woman'

Tens of thousands of iron ore shipments later, royalty payments from that Pilbara mining field in Western Australia continue to swell her coffers.

The Hancocks were not the sole beneficiaries. The multi-billionaire fervently believes that her father's discovery also made Australia prosperous, which partly drives her recent quest for influence, gratitude and respect.

It is partly borne of a lifelong sense of grievance - that Australia's traditional east coast elites have not recognised her family's contribution to the country's development, nor the local media.

With an estimated net personal wealth of $A29 billion ($US29.3bn, £18.79bn), Rinehart has in recent years gone from being Australia's richest woman to Asia's richest woman to arguably the world's.

Australian business magazine BRW has named her the world's wealthiest woman, and Citigroup has also predicted that the 58-year-old businesswoman will soon top the global rich list, with more than $100bn (£64.8bn) of assets to her name.

Gina Rinehart is said to make nearly A$600 (£393) a second

The royalty stream from that initial discovery - the "rivers of the gold," as it has been called - still contributes to her wealth, but it pales alongside the value attached to her mining interests in Western Australia and Queensland.

Continue reading the main story

“Start Quote

Whatever I do, the house of Hancock comes first”

She hates being called a mining heiress because she considers herself a self-made businesswoman who turned her company around after her father's death in 1992.

From a worldwide perspective, her spiralling wealth illustrates the shift in economic activity from the west to the east. From an Australian one, she embodies the shift from the east to the west. Once it was media moguls like the late Kerry Packer who topped the Australian rich lists. Now it is minerals magnates who are profiting from the country's China-fuelled resources boom.

Rinehart has set out to become both a magnate and a mogul, which is why she is the subject of so much attention and controversy.

Along with her mining interests, she now owns a share of Channel Ten, one of the three major commercial television networks, and has also become the single biggest shareholder in Australia's second largest newspaper group, Fairfax Media, although she reduced the size of that stake last week.

The group publishes three of the country's most venerable mastheads - the Sydney Morning Herald, the Melbourne Age and the Australian Financial Review, and the suspicion among many Fairfax journalists is that she will attempt to turn them into mouthpieces for her right-wing views.

The dark joke is that the Sydney Morning Herald might become the Sydney Mining Herald. However, she has not been able to gain seats on the board because of a dispute about her refusal so far to accept the group's declaration of editorial independence.

Her father Lang Hancock was a huge influence on her

Her mining company, Hancock Prospecting, is essentially her life. She has few outside interests. She does not go in for the normal blandishments of wealth, like art, racehorses or a private plane.

She is renowned for her 24/7 work regime, and a tunnel-visioned determination. Her personal feuds are the stuff of legend and her long list of adversaries has included her father, his business partner, her first husband, her Filipino mother-in-law, Rose Porteous, and now three of her children.

Rinehart spoke at an anti-tax rally in Perth in 2010

Famously litigious, many of her battles have ended up in court. "Whatever I do, the house of Hancock comes first," she once told a reporter. "Nothing will stand in the way of that."

Like her rambunctious father Lang, who railed against the scourge of "Canberra-ism," and "eco-nuts" in the environmental movement, her political views are a blend of conservatism and libertarianism.

An early heroine was Britain's Iron Lady, Margaret Thatcher, whom she met over lunch in 1977. Afterwards, the young Gina took much more care to dress in a business-like fashion, got a new hairdresser and started to wear more make-up.

Another intellectual hero was the free-market economist Milton Friedman. One of the reasons she cited for raising her children in the US, aside from her marriage to the Harvard-educated Frank Rinehart, was the hope that they might be taught by Friedman.

She is also a climate change sceptic, and close to the British Viscount, Christopher Monckton. On a visit to Perth last July, during which he delivered the Lang Hancock Memorial Lecture, Monckton spoke of Australia's need for an equivalent of Fox News, which could be funded by the "super-rich".

Continue reading the main story

Other rich women

• Christy Walton - widow of John, son of the founder of Wal-Mart, Sam Walton
• Liliane Bettencourt - daughter of L'Oreal founder Eugene Scheueller
• Johanna Quandt - third wife of German executive who rescued BMW
• Oprah Winfrey - television host and media mogul, one of the world's richest self-made women
• Birgit Rausing - art historian from Sweden inherited packaging firm Tetra Laval after death of husband
• Rosalia Mera - after dropping out of school to make dresses before her teens, the Spaniard co-founded retail company Inditex, which owns Zara

Rinehart was not present at the private meeting, but few doubted the identity of the "super-rich" person whom Monckton had in mind. When a video of his remarks was posted online, it heightened speculation that she was pursuing some kind of Foxification strategy in Australia.

I have also been told by one of her associates that she met Rupert Murdoch earlier this year, partly to discuss Fox News.

Given that the newspapers published by Rupert Murdoch's Australian arm, News Ltd, boast a 70% share of Australian readership, and that Fairfax has the remaining 30%, the widespread fear is of a conservative duopoly, and an end to editorial pluralism.

Rinehart's $A165m (£107m) stake in Channel Ten has already lost more than half its value and Fairfax, which last week announced 1900 job cuts, is not seen as a particularly attractive investment. Like her father, who started two newspapers, the profit motive is not a major consideration. Her investment, it is thought, is about political influence.

Besides, the amount of money involved is for her comparatively small. As an associate recently explained to me, she is adopting the same approach that the super-rich use when purchasing luxury yachts or private planes, which is not to invest more than 10% of their wealth.

In her ongoing drive for influence, the debate two years ago over the Labor government's plans to hit the mining sector with a super profits tax was a major milestone.

Unusually for a woman who has preferred to exert a behind-the-scenes influence, Rinehart led the chant of "axe the tax" at a protest rally in 2010 aimed at the then Prime Minister Kevin Rudd.

Her billionaire activism lent itself to easy caricature. A reporter from the Fairfax-owned WA Today joked that it was possible to hear her gold bracelet jangling "a note-perfect version of 'Money, Money, Money' as she pumped her fist". Within weeks, however, Rudd had been ousted, and his successor, Julia Gillard, immediately announced a climbdown over the mining tax.

Rinehart met the Queen when the British monarch visited Perth

Just as Rinehart wants influence and gratitude, she is also determined to maintain rigid control of her company. Presently, she is locked in a highly-publicised legal battle with three of her four children over a family trust set up by Lang Hancock for his grandchildren.

The trust, which owns a share of her company, was due to settle its assets last September, when Lang's youngest grandchild, Ginia, turned 25. But Rinehart allegedly tried to push back the date that her children could become trustees until 2068.

Determined to retain sole control, she warned her children they faced ruin if they refused to bend to her will. "Sign up or be bankrupt tomorrow," she threatened in an email. "The clock is ticking. There is one hour to bankruptcy and financial ruin."

Her three eldest children described the manoeuvre as "deceptive, manipulative, hopelessly conflicted and disgraceful". It is not so much about greed. Rinehart offered her three estranged children big payments to go along with her plan. It is more about control.

Commentators expect the same aggressive approach with her media strategy. After all, Australia's richest ever person is used to getting her own way.

Hearing: Former chief executive Bob Diamond left Barclays over the matter, before appearing before MPs this week

A criminal investigation has been launched into alleged rigging of the Libor rate within the banking industry, the Serious Fraud Office (SFO) confirmed today.

SFO director David Green QC formally accepted the Libor issue for investigation after Barclays was fined by the Financial Services Authority (FSA) last week for manipulating the key interbank lending rate which affects mortgages and loans.

The claims ultimately led to the resignation of Barclays boss Bob Diamond and have become the focal point of a fierce political debate over ethics in the banking sector.

The investigation could ultimately lead to criminal prosecutions and bankers facing charges in court.

The SFO's update came after it revealed earlier this week that it had been working closely with the FSA during its investigation and would consider the potential for criminal prosecutions.

The Government department, which is responsible for investigating and prosecuting serious and complex fraud, said on Monday the issues surrounding Libor were "complex" and that assessing the evidence would take time.

Under fire: Barclays former chairman Marcus Agius (right) with former CEO Bob Diamond (centre), and former chief executive John Varley (left)

As the SFO prepares its investigation, Labour leader Ed Miliband continued to push for an independent inquiry into the banking scandal despite MPs rejecting the demands.

The Labour leader said that while the party would cooperate with a parliamentary investigation, its remit was too "narrow" and a judge-led probe was still needed.

Mr Miliband also defended the conduct of Ed Balls after the shadow chancellor engaged in a bitter war of words with his opposite number George Osborne in the Commons.

 

 

Justin Sullivan/Getty Images/AFP

The US Federal Deposit Insurance and Federal Reserve released public summaries of plans for quick liquidation of nine of the world’s largest banks in the case of an emergency, without government bailouts.

Complex financial firms with more than $250 billion in nonbank assets including J.P. Morgan Chase, Bank of America, Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley, Barclays PLC, Deutsche Bank, Credit Suisse and UBS were the first to prepare the worst case scenarios by July 1. In total, about 125 banks are expected to submit plans to the regulators by the end of 2013.

Public summaries reveal that Morgan Stanley and Goldman Sachs plan to sell assets or stand-alone businesses to other financial firms, private-equity investors or insurance companies in the event of a collapse. Citigroup said its banking business could be split off from the parent company and recapitalized as a smaller bank. Credit Suisse plans to sell its businesses to hedge funds, banks and securities firms.

Meanwhile Barclay’s paper is already out of date after the resignation Tuesday of CEO Bob Diamond and COO Jerry Del Missier.

Banks are required to give the government the tools to wind them down in a case of failure under provisions of the Dodd-Frank financial reform law designed to end the practice of bailing out “too big to fail” banks by the state. The act aims to secure the financial system from turmoil such as followed the collapse of Lehman Brothers or Bear Stearns in 2008.

RBS has had to issue another apology for last month's costly technical glitch after confirming duplicate mortgage payments were mistakenly taken from customers at the height of the disruption. A "relatively small" number of accounts across the country were affected, the company said, in response to complaints. It is understood RBS and NatWest account holders are involved and RBS said it had increased call centre staff by 50% to handle a potential rise in call volumes. The bank is urging customers to get in touch if they are experiencing problems and it has promised that no one will be left permanently out of pocket. A spokeswoman said: "We apologise to any customers experiencing problems today. "We said last week that we expected to see a few bumps in the road for customers as we get things fully back on track." "Any customers experiencing problems should contact our call centre or visit their local branch and we will put things right." On Monday - almost two weeks since the RBS Group first encountered difficulties updating customer balances after the IT failure - it admitted it had taken longer than first anticipated to clear the backlog at Ulster Bank and efforts would continue during the week.

RBS has had to issue another apology for last month's costly technical glitch after confirming duplicate mortgage payments were mistakenly taken from customers at the height of the disruption. A "relatively small" number of accounts across the country were affected, the company said, in response to complaints. It is understood RBS and NatWest account holders are involved and RBS said it had increased call centre staff by 50% to handle a potential rise in call volumes. The bank is urging customers to get in touch if they are experiencing problems and it has promised that no one will be left permanently out of pocket. A spokeswoman said: "We apologise to any customers experiencing problems today. "We said last week that we expected to see a few bumps in the road for customers as we get things fully back on track." "Any customers experiencing problems should contact our call centre or visit their local branch and we will put things right." On Monday - almost two weeks since the RBS Group first encountered difficulties updating customer balances after the IT failure - it admitted it had taken longer than first anticipated to clear the backlog at Ulster Bank and efforts would continue during the week.

Barclays chief executive Bob Diamond has resigned with immediate effect. The move comes less than a week after the bank was fined a record amount for trying to manipulate inter-bank lending rates. Mr Diamond said he was stepping down because the external pressure on the bank risked "damaging the franchise". Chairman Marcus Agius, who said on Monday he was stepping down, will take over the running of Barclays until a replacement is found. "I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth," Mr Diamond said in a statement. He will still appear before MPs on the Treasury Committee to answer questions about the Libor affair on Wednesday. "I look forward to fulfilling my obligation to contribute to the Treasury Committee's enquiries related to the settlements that Barclays announced last week without my leadership in question," Mr Diamond said. Last week, regulators in the US and UK fined Barclays £290m ($450m) for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions. Staff did this over a number of years, trying to raise them for profit and then, during the financial crisis, lowering them to hide the level to which Barclays was under financial stress. Prime Minister David Cameron has described the rigging of Libor rates as "a scandal". The Serious Fraud Office is also considering whether to bring criminal charges.

Bank of England policymakers meet today to decide whether to change interest rates or to pump in more money into the ailing economy, with leading economist saying they may opt to inject a further £50bn of stimulus.

Global capital markets, now the most powerful force on earth, are rapidly losing confidence in the financial coherence of the 17-nation euro zone. A market implosion there, like that triggered by Lehman Brothers collapse in 2008, may not be far off. Not only would that dismantle the euro zone, but it could also usher in another global economic slump: in effect, a second leg of the Great Recession, analogous to that of 1937. This risk is evident in the structure of global interest rates. At one level, U.S. Treasury bonds are now carrying the lowest yields in history, as gigantic sums of money seek a safe haven from this crisis. At another level, the weaker euro-zone countries, such as Spain and Italy, are paying stratospheric rates because investors are increasingly questioning their solvency. And there’s Greece, whose even higher rates signify its bankrupt condition. In addition, larger businesses and wealthy individuals are moving all of their cash and securities out of banks in these weakening countries. This undermines their financial systems. 423 Comments Weigh InCorrections? Personal Post The reason markets are battering the euro zone is that its hesitant leaders have not developed the tools for countering such pressures. The U.S. response to the 2008 credit market collapse is instructive. The Federal Reserve and Treasury took a series of huge and swift steps to avert a systemic meltdown. The Fed provided an astonishing $13 trillion of support for the credit system, including special facilities for money market funds, consumer finance, commercial paper and other sectors. Treasury implemented the $700 billion Troubled Assets Relief Program, which infused equity into countless banks to stabilize them. The euro-zone leaders have discussed implementing comparable rescue capabilities. But, as yet, they have not fully designed or structured them. Why they haven’t done this is mystifying. They’d better go on with it right now. Europe has entered this danger zone because monetary union — covering 17 very different nations with a single currency — works only if fiscal union, banking union and economic policy union accompany it. Otherwise, differences among the member-states in competitiveness, budget deficits, national debt and banking soundness can cause severe financial imbalances. This was widely discussed when the monetary treaty was forged in 1992, but such further integration has not occurred. How can Europe pull back from this brink? It needs to immediately install a series of emergency financial tools to prevent an implosion; and put forward a detailed, public plan to achieve full integration within six to 12 months. The required crisis tools are three: ●First, a larger and instantly available sovereign rescue fund that could temporarily finance Spain, Italy or others if those nations lose access to financing markets. Right now, the proposed European Stability Mechanism is too small and not ready for deployment. ●Second, a central mechanism to insure all deposits in euro-zone banks. National governments should provide such insurance to their own depositors first. But backup insurance is necessary to prevent a disastrous bank run, which is a serious risk today. ●Third, a unit like TARP, capable of injecting equity into shaky banks and forcing them to recapitalize. These are the equivalent of bridge financing to buy time for reform. Permanent stability will come only from full union across the board. And markets will support the simple currency structure only if they see a true plan for promptly achieving this. The 17 member-states must jointly put one forward. Both the rescue tools and the full integration plan require Germany, Europe’s strongest country, to put its balance sheet squarely behind the euro zone. That is an unpopular idea in Germany today, which is why Chancellor Angela Merkel has been dragging her feet. But Germany will suffer a severe economic blow if this single-currency experiment fails. A restored German mark would soar in value, like the Swiss franc, and damage German exports and employment. The time for Germany and all euro-zone members to get the emergency measures in place and commit to full integration is now. Global capital markets may not give them another month. The world needs these leaders to step up.

US benchmark borrowing costs plunged to levels last seen in 1946 and those for Germany and the UK hit all-time lows as investors took fright at what they see as a disjointed policy response to the debt crisis in Spain and Italy. In a striking sign of the flight to haven assets, German two-year bond yields fell to zero for the first time, below the equivalent rate for Japan, meaning investors are willing to lend to Berlin for no return. US 10-year yields fell as low as 1.62 per cent, a level last reached in March 1946, according to Global Financial Data. German benchmark yields reached 1.26 per cent while Denmark's came close to breaching the 1 per cent level, hitting 1.09 per cent. UK rates fell to 1.64 per cent, the lowest since records for benchmark borrowing costs began in 1703. "They are extreme levels because we are in an extremely perilous situation. People just want to put their money somewhere where they think they will get it back. People may soon be paying Germany or the US to look after their money," said Gary Jenkins, head of Swordfish Research, an independent credit analysis company. The flight to safety came as the situation in Italy and Spain, the eurozone's third- and fourth-largest economies, deteriorated further. Italy held a disappointing debt auction and saw its benchmark borrowing costs rise above 6 per cent for the first time since January. The euro fell 0.8 per cent against the dollar to under $1.24 for the first time in two years. Confusion over how the Spanish government's rescue of Bankia, the stricken lender, will be structured led the premium Madrid pays over Berlin to borrow to hit fresh highs for the euro era at 540 basis points. Analysts said the elevated level meant that clearing houses could soon raise the amount of margin, or collateral, that traders need to post against Spanish debt, a move that led to the escalation of crises in Portugal and Ireland. The European Central Bank has made clear to Spain that it cannot use the bank's liquidity operations as part of a recapitalision of Bankia. However, the central bank said on Wednesday it had not been officially consulted on the plans. Equity markets globally fell on the eurozone fears with bourses in Paris, Frankfurt and London all dropping 2 per cent. But Nick Gartside, international chief investment officer for JPMorgan Asset Management, noted that while US bond yields had halved since April last year the S&P 500 equity market was at the same level. "One of those two markets is mispriced. Core government bonds are an efficient market and they are ahead," he added. Investors said borrowing costs for the US, UK and Germany were likely to continue to fall amid a worsening economic backdrop and the threat of more central bank intervention. Wealth managers have been moving client assets into currency havens in recent weeks, with the Swiss franc and the US dollar among the biggest beneficiaries "Risk aversion, a rapidly slowing global economy and unusually low policy rates will pin these short and intermediate maturity bonds at unprecedented low levels for quite a while," said Mohamed El-Erian, chief executive of Pimco, one of the world's largest bond investors. Mr Gartside said he could easily see German rates going below 1 per cent, following a path that only Japan and Switzerland have taken among major economies, while the US and UK could dip under 1.5 per cent. Markets are increasingly resigned to more turmoil until policy makers take more radical action. The two most popular plans of action for investors are for the ECB to buy Spanish and Italian bonds in unlimited size or for eurozone countries to agree on a fiscal union involving the pooling of debt. "You have to throw everything at it. Spain is just too big for half measures. The next intervention has to be not just massive in size but it has to show a total commitment," said Mr Jenkins. He recommends that the ECB set targets either for the premium Spain and Italy pay to borrow over Germany or for their yields.

Property prices in the capital’s most sought-after postcodes have been driven up by investors moving funds out of assets held in euros to buy into what is seen as a “safe haven” alternative. Foreign money seeking a refuge from the wider economic turmoil accounted for 60pc of acquisitions of prime central London property between 2007 and 2011, according to a report by Fathom Consulting for Development Securities. If the shared currency broke up completely, London property would initially be boosted by the continued flight towards a safe haven, the report predicts. But, once the break-up had taken place, demand for these assets as an insurance against this event would start to ebb. “Although fears about a messy end to the euro debt crisis may account for much of the gain in prime central London (PCL) prices that has taken place over the past two years, we find that a break-up of the single currency area is also the single greatest threat to PCL,” said researchers.

National deposit-insurance programs, strengthened by the European Union in 2009 to guarantee at least 100,000 euros ($125,000), leave savers at risk of losses if a country leaves the euro and its currency is redenominated. The funds in some nations also have been depleted after they were used to help bail out struggling lenders, leading policy makers to consider implementing an EU-wide protection plan.

An advertisement featuring Greek euro currency notes are seen through a metro train window in Athens. Photographer: Kostas Tsironis/Bloomberg

May 30 (Bloomberg) -- David Forrester, a currency strategist at Macquarie Bank Ltd., talks about the impact of Europe's debt crisis on the euro and the outlook for the Australian dollar. Forrester speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

“These schemes were not designed to deal with a complete meltdown of a banking system,” said Andrew Campbell, professor of international banking and finance law at the University of Leeds in the U.K. and an adviser to theInternational Association of Deposit Insurers. “If there’s a systemic failure, there needs to be some form of intervention.”

With European officials openly discussing a Greek exit from the euro for the first time, savers in Spain, Italy and Portugalmay start to withdraw cash on concern that those countries will follow Greece and their funds will be devalued with a switch to a successor currency. None of those nations has the firepower to handle simultaneous runs on multiple banks.

Pulling Deposits

Households and businesses pulled 34 billion euros from Greek banks in the 12 months ended in March, 17 percent of the country’s total, according to the ECB.

Deposits at banks in Greece, Ireland, Italy, Portugal and Spain fell by 80.6 billion euros, or 3.2 percent from the end of 2010 through the end of March, ECB data show. German and French banks increased deposits by 217.4 billion euros, or 6.3 percent, in the same period. Bank-deposit data for April will be released starting this week.

“Contagion fears might compel individuals in Portugal, Ireland, Italy and Spain to withdraw bank deposits due to concerns over solvency, redenomination, or otherwise,” UBS AG (UBSN) Chief Investment Officer Alexander Friedman said in a May letter to client advisers. “This could spark a major banking collapse, requiring truly unprecedented action from the ECB.”

Even after boosting capital and building up liquidity buffers of more than 1 trillion euros over the past two years, lenders may be unable to survive a system-wide bank run without political intervention, either in the form of a pan-European deposit guarantee or an expanded bank-bailout facility, Jernej Omahen, an analyst at Goldman Sachs Group Inc. (GS) in London, said in a May 22 report to clients.

“An EU-wide deposit-guarantee fund may prove to be the most important tool to preserve financial-market stability if Greece were to leave the euro area,” said Tobias Blattner, an economist at Daiwa Capital Markets in London.

Hollande, Monti

European leaders discussed regionalizing deposit guarantees as part of talks on reigniting growth in the euro area, EU President Herman Van Rompuy said after a summit in Brussels on May 24. French President Francois Hollande said after the meeting that he and Italian Prime Minister Mario Monti backed the plan. European Central Bank Executive Board member Peter Praet called for a similar scheme on May 25 as part of a financial union with one authority responsible for supervision and resolution of cross-border banks.

Policy makers also may consider cutting interest rates, buying more bonds through the EU’s Securities Market Program and starting a third longer-term financing operation to stem concerns that the currency may break up, Stefan Nedialkov, a London-based analyst at Citigroup Inc. wrote in a May 17 note.

Argentine Crisis

Savers pulled 27 percent of deposits from Argentina’s banks between 2000 and 2003 during a currency crisis, Nedialkov wrote. If Ireland, Italy, Portugal and Spain follow a similar pattern, about 340 billion euros could be withdrawn, he estimated.

Companies have already started to remove cash from southern Europe as soon as they earn it. Many already are sweeping funds daily out of banks in those countries and depositing it overnight with firms in the U.K. and northern Europe, according to David Manson, head of liquidity management at Barclays Plc in London, who advises company treasurers.

“There is a spectrum of perceived risk, which starts with Greece on one end and Germany and the U.K. on the other,” Manson said. “Portugal, Italy and Spain are all somewhere in the middle of that spectrum. This trend of sweeping deposits north has been exacerbated by the current crisis.”

Redenomination Risk

EU policy makers last overhauled rules on deposit-guarantee plans in 2009 after a global banking crisis exposed discrepancies in the level of protection offered in different countries. They raised the minimum amount insured to 100,000 euros a person from 20,000 euros. National governments were also told to ensure that their programs were pre-funded with contributions from lenders rather than topped up after a bank collapses. The way lenders are charged for the funds and how much they have to pay varies from nation to nation.

No provision was made for the possibility that a country would leave the euro, said two people involved in establishing the rules who declined to be identified because the talks were private. That provides little assurance to depositors concerned that their savings in euros may be redenominated as well as that banks may fail.

“For a pan-euro deposit-guarantee scheme to ‘firewall’ deposits in Italy, Ireland, Portugal and Spain following a potential Greek exit, it needs to explicitly cover redenomination risk as well,” Ronit Ghose, a Citigroup analyst based in London, wrote in a May 25 report. That would cost more than 150 billion euros, he estimated.

‘Longer-Term Project’

The European Commission said in a July 2010 report that a pan-European deposit guarantee would be cheaper and more effective than individual national facilities, though legal issues made it a “longer-term project” to be reviewed by 2014.

The EU currently is weighing plans to force national governments to ensure that a minimum amount of money is immediately available to stabilize a bank in the event of a run. Under the proposals, to be published by the commission June 6, funds would be raised through annual contributions by banks. Lenders could be tapped for further financing in an emergency, then national central banks, before governments would be obliged to lend to each other as a last resort.

Member states could merge these requirements with existing national arrangements to guarantee bank deposits, and would also be required to pool financial resources when a cross-border bank is on the point of failure, according to a draft of the plans obtained by Bloomberg News on May 25.

Depleted Funds

In the meantime, concern is rising that existing national funds may struggle to honor their guarantees should the crisis worsen and sovereign borrowing costs remain elevated. Yields on 10-year Italian government bonds have jumped 1.09 percentage points to 5.77 percent from a March 9 low for the year. Their Spanish equivalents have increased 1.45 percentage points to 6.45 percent over the same period.

“Guarantees are still provided locally, by governments and agencies that have credit risk, reducing the value of the insurance,” Jonathan Glionna, a London-based analyst at Barclays, wrote in a May 22 note to clients.

Spain has dipped into its guarantee fund, which stood at 6.6 billion euros in October, to cover loan losses for buyers of failed banks. It used the facility to inject 5.25 billion euros into Caja de Ahorros del Mediterraneo when it agreed to sell it to Banco Sabadell SA in December. The deposit-guarantee program will also reimburse the bank-rescue fund for the 953 million euros it paid for a stake in Unnim Banc, which was sold to Banco Bilbao Vizcaya Argentaria SA. (BBVA) The country had 931.2 billion euros of deposits at the end of March, according to ECB data.

Politically Difficult

Italy’s deposit-insurance program is still unfunded, with banks pledging to contribute if and when necessary. Silvia Lazzarino De Lorenzo, a spokeswoman for Roberto Moretti, chairman of the Interbank Deposit Protection Fund, declined to comment. The country had 1.1 trillion euros of deposits at the end of March, ECB data show.

Portugal has a deposit fund of 1.4 billion euros collected from banks through annual contributions, according to Barclays. The country’s total deposits stood at 164.7 billion euros at the end of March, according to the central bank.

One option for an EU-wide insurance plan would involve Europe’s largest banks contributing 107 billion euros, or 1.5 percent of eligible deposits, to a fund over 10 years, according to proposals by Dirk Schoenmaker and Daniel Gros of the Centre for European Policy Studies, a Brussels-based research group.

Implementing such a program wouldn’t be difficult technically because it would be only a matter of harmonizing existing standards, said Simon Gleeson, a financial-services lawyer at Clifford Chance LLP in London.

“The real difficulty is that domestic consumers in countries like Germany will be forced to pony up for the failures of foreign banks,” Gleeson said. “That makes it politically very difficult.”