Global financial market conditions have continued to deteriorate.

The US Federal Reserve slashed its benchmark interest rate by three-quarters of a percentage point to 3.5 percent on January 22.
The decision came at an unscheduled policy
meeting--the next planned one was due on January 29th and 30th, when it was widely expected to reduce rates by half a percentage point, reported Businessweek.com.
With global stock markets in freefall, the Fed instead decided that a bigger cut was needed--and sooner. A week may be a long time in politics, but waiting eight days to cut rates would, it seems, have been an intolerable stretch for financial markets.
The deepening gloom about the economy may well warrant such an aggressive response. But the timing is puzzling. There is more than a whiff of panic about slashing rates little more than week before a scheduled meeting.
The Fed statement issued with the decision rationalizes the cut as a response to “downside risks to growth“--the phrase is repeated twice in six short paragraphs--and cites recent gloomy data on housing and jobs. Yet the economic news has not grown any worse in the past few days and, given the time needed before monetary policy affects spending, the added urgency seems odd.
What has shifted for the worse is financial-market sentiment. It is hard not to conclude that the Fed has acted to shore up markets, which have switched to panic mode alarmingly quickly over the past week. The Fed notedÑit could hardly fail to do so--that “financial market conditions have continued to deteriorate“.
But if concerns of further stock market damage was its main motivation the cut did little to prevent a big sell-off on Wall Street.
The Dow Jones Industrial Average fell over 400 points when it opened shortly after the Fed’s announcement: not much less than the fall that was priced in before the Fed acted.
If the markets failed to view looser monetary policy as a nice surprise, that was understandable. In his short tenure the Fed’s chairman, Ben Bernanke, has only used scheduled meetings to make changes to the Fed’s main policy rate.
That he was moved to act just a week before one will raise the suspicion that the Fed knows something that markets don’t. Nor is it only the timing that is troubling. The size of the cut also brings more fear than comfort. Even the Fed under Alan Greenspan, which cut rates from 6.5 percent to 1 percent in the early years of the decade, was never moved to cut by more than half a percentage point in a single go.
Only one voice dissented on the Fed’s rate-setting committee. William Poole voted against the cut, arguing that things were not sufficiently bad to warrant action so close to a regular meeting. That no one else was swayed by that argument suggests that the bulk of the committee is now either very worried about the economic outlook or that there was a serious risk of financial market meltdown.

Norway is planning to capture carbon as it is released and store it under the seabed.

If there’s a country that’s really made the most of its fossil fuel resources, Norway is a good candidate for the prize.
Proceeds from its energy industry fund world-leading healthcare and welfare systems. They have also created the second-biggest sovereign wealth fund in the world. But there is a snag.
As reported by Ipsnews.net, rising emissions from oil and gas rigs, and from onshore power plants, sit uncomfortably with Norway’s sense of itself as a country with a green conscience. Its ambition is to be a carbon neutral nation in just 22 years’ time.
Hard to be green and rich, you might think. But Norway’s leaders insist they can achieve it; largely because they are planning to capture carbon as it is released, then store it under the seabed.
Carbon capture and storage, alongside carbon trading schemes, should be a major weapon in the European Commission’s arsenal as it sets out to ensure emissions are cut by 20 percent by 2020 from what they were in 1990.
Norway, outside the European Union but nevertheless covered by all its climate change mechanism, has been doing it for more than a decade at the Sleipner rig in the North Sea.
Now an international race is on to do the same for onshore power plants.
This is more difficult, although finding a way to capture the emissions created by burning oil, coal and gas for energy could offer a huge prize, in the form of billion-dollar contracts worldwide.
Until recently, Norway seemed to be in pole position. The plan had been to open a test facility in 2010 at a proposed gas plant on the west coast and a full-scale version would follow four years later.
It would be built alongside Norway’s dirtiest oil refinery at Mongstad--amazingly tucked in between a
sapphire-blue fjord and the white snow-covered
mountains.
But the site remains just a pile of rubber at present. The energy companies backing the project prompted a one-year delay when they recently failed to commit the required funds.
And they are not the only ones not quite sold on the technology. Environmental campaigners Greenpeace also have doubts.
“We have concerns about leakage--either slow leakage or catastrophic abrupt releases of carbon dioxide,“ explains Greenpeace’s EU policy director for climate and energy, Mahi Sideridou.
“There are the uncertainties, too, about availability and about cost. But there’s also the political risk being posed, that if you give financial and political priority to carbon capture and storage, you’re not giving as much emphasis to the real solutions on the table like energy efficiency and renewable energy.“
There are skeptics and procrastinators, but there are also former doubting Thomases who are now discovering the faith. For many years, the UK government was not that sold on carbon capture.
However, in the last few weeks, it has announced that it will fund the total set-up costs of a UK-based project to capture and store emissions from a coal plant.
“It’s not just another technology,“ says UK energy minister Malcolm Wickes. “This is absolutely vital. The world will be burning fossil fuels - oil, gas, coal - for 100 or more years. Unless we can find ways of capturing that carbon dioxide, all is lost.“
The UK government will not say how much money it is offering to the winner. As with Norway, money is turning out to be a bit of a dirty word in the world of carbon capture.
Signals that governments could give more state aid to these projects will help more of them get off the ground. If those guarantees do not come, then a full-scale facility at a fossil fuel power plant in Europe will remain the stuff of Norwegian fairy tales.

As a commodity that intimately affects the lives of common people, real estate is a key concern for the Chinese authorities.

Chuanghui Estate Broker Company, the Shenzhen-based real estate company that leads China in terms of branch offices, closed branches in seven cities in the Pearl River Delta area early this month.
According to Chinaview.cn, this is only one of a series of signs suggesting the city is starting to get the chills from its sluggish real estate market. Real estate developers in Shenzhen are offering all kinds of incentives to attract customers, ranging from price discounts to waivers for property management fees. But these incentives do not seem to be inspiring many deals.
Wang Shi, chairman of the Vanke Group, the country’s top property developer, even spoke out during a CCTV program, urging potential buyers not to buy houses in the next three to four years because the market was nearing a turning point.
It is a law of the market that the price of a commodity cannot keep going up forever. The price of property in Shenzhen has just proven the validity of this law.
In the first six months of last year, the price of property in Shenzhen climbed at a rate of more than 10 percent every month. It eventually became impossible to buy an apartment for less than 18,000 yuan ($2,400) per square meter in the city.
Shenzhen, the first city in China assigned to embrace the policy of opening up its economy in the late 1970s, has been in the national spotlight because of the dramatic upward momentum of prices in its real estate market.
However, prices in Shenzhen were also the first to drop after the authorities launched special policies aimed at reining in real estate fever. The number of real estate deals shrank quickly starting in July last year, declining along a steep curve. The current price is at about the same level as it was in late 2006, 40 percent off from its peak.
Therefore, it is little wonder that real estate brokers and developers find themselves stuck in deep mud even as common people applaud the gradual return to price sanity.
As it happens, Chuanghui is not the only real estate brokerage scratching its head over irregular cash flows. Several other agencies have also closed down branches in major cities since December.
To a certain extent, the closure of the less competent real estate brokerages at this moment is solid proof that the bubbles in the market could break as quickly as they were created.
The fever in the real estate market was cooled down largely because the macro control policies succeeded in curbing speculation. At the Central Economic Work Conference in 2007, the authorities decided to shift the monetary policy from “prudent“ to “tight“ after nearly a decade of the former.
The central bank raised interest rates six times and lifted the rate of deposit reserves 10 times last year. The cumulative effect of these polices was reflected in remarkably diminished profit margins for real estate speculators and a significantly cooler market.
Another important signal for further policy moves is that Qi Ji, vice-minister of construction, openly condemned developers who had hoarded land and apartments or spread false information to create public fears of a housing shortage so they could drive up prices.
“The ministry is studying policy options to prevent developers from colluding in jacking up prices and to stabilize housing prices,“ he said during a symposium last week.
As a commodity that intimately affects the lives of common people, real estate is a key concern for the authorities.
If real estate prices extend beyond the reach of a large part of the population, people will have to save more of their incomes and reduce spending on other items if they want to have an apartment of their own. Confronted with high property prices and the need to set aside savings from their disposable income, many people find they have little left for their daily lives.
Had it not been for the many years of high housing prices, the recent increases in the cost of food would not have been so serious in the eyes of common people. So it is natural for the decision-makers to issue tough policies to regulate the real estate market and curb the price rise of housing.
From the perspective of Chinese policymakers, it is necessary to work out countermeasures to cushion the negative effects of such a shock.