Tag Archives: Baltic states

Bloomberg See Latvian Sex Industry As Economic Indicator

Signs pointing to an end to the global recession are few. if any, as the latest US labor market figures is yet another slap in the face for the Obama-administration,while the real estate market and the consumers hardly show signs of life. The stock market, who is supposed to reflect the health of the economy seems to be totally lost in space, without any connection to the fundamentals. For the last couple of years, I’ve suggested that maybe  traditional economic theories and methods are outdated, and should be replaced. Well, the news agency Bloomberg have found a unique index which is said to be a much better barometer – the sex industry.

“It can change by the hour, by the day. It tells you very, very quickly what the state of demand is.”

Matthew Lynn

Matthew Lynn from the Bloomberg news agency believes that in hard times, traditional indicators are useless, (and I agree on that one). However,  he suggests alternative benchmarks such as the price of prostitutes. The economist claims the Latvian sex market is the most precise indicator of the health of global trade.

So far it’s been a wild ride for Latvia, once the fastest growing economy in the EU, sliding to the bottom of the list in. just six months.

It has the second highest unemployment rate in Europe (after Spain), and its GDP have dropped almost 20%, comparable to that of America during the Great Depression.

While the country is battling with recession, observers outside Latvia are scanning its shattered economy for some hint of when the global crisis will end.

Matthew Lynn from the Bloomberg agency believes that in hard times, traditional indicators are useless. He suggests alternative benchmarks such as the price of prostitutes.

The economist claims the Latvian sex market is the most precise indicator of the health of global trade.

“It’s very flexible. There’s no barrier for people coming here and the price is very flexible. It can change by the hour, by the day. It tells you very, very quickly what the state of demand is. There’s not much money flowing around the system. There’s not much cash there. And that means the economy is getting into trouble,” Matthew Lynn says.

Matthew Lynn’s main argument is that since the price for sex services has collapsed by about two-thirds since the start of the crisis, the global economy is still in big trouble.

Once the cost of illicit comforts goes up, the world will start recovering, according to Lynn’s theory.

That may be true, and I suppose Bloomberg and Matthew Lynn has done the necessary research to support it.

But some are still skeptical.

“I wouldn’t say that for any economy that will suit, simply because there’re many countries in the world where prostitutes are not legal and businesses are not transparent at all and then you will never get a valid indicator monitoring their prices even if you manage to,” financial analyst Evgeny Nadorshin says.

Russia Today reports that many Latvians are not too keen on their country being portrayed as “the red light district of Europe.”

More on the subject:

Night club closed because of sex party and fire extinguishers

“We are looking forward to recovery” – Latvian president

Desert sex amidst financial storm

Sexual discrimination victim receives compensation – in coins

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Filed under International Econnomic Politics, Philosophy

Cyber Wars Enter Center Stage At NATO Summit

The increasing threats from hackers and cyber-criminals has finally been put on the top of the NATO agenda, as the 10 years old strategic concept is about to be replaced with a new transatlantic command structure at the NATO summit in Lisbon on 19th and 20th of November.

“Active cyber-defense is a very sensitive topic. Many experts have brought it up, that in order to have defense, you need some offense as well.”

Baltic diplomat

The new document is to replace a 10-year-old strategy paper written before the internet age and before France joined the transatlantic alliance’s command structure. The office of NATO secretary general, Anders Fogh Rasmussen, drafted the new Strategic Concept and distributed it to the 28 member countries last week.

Developing a Nato cyber-war capability will be the main issue at the NATO summit in Lisbon on November 19th and 2oth, the EUobserver.com reports.

In addition, the 28 allied counties have to deal with the French opposition to a joint nuclear strategy.

The new NATO “Strategic Concept,” has to be adopted by the representatives in consensus.

Pentagon’s push for an “active cyber-defense” is the most controversial issue so far, according to the EUobserver.com.

“Active cyber-defense is a very sensitive topic. Many experts have brought it up, that in order to have defense, you need some offense as well. I would be very surprised if NATO will find consensus to include it,” a diplomat from one of the Baltic states says.

Cyber-attacks is outlined as a growing threat, and NATO will have to be “adaptable and flexible” in its capacity to react is a likely compromise, the draft paper says.


William J. Lynn


Following attacks in 2008 on its classified military network, the Pentagon established a new cyber-command, making “active cyber-defense” one of its policy pillars, according to US deputy secretary of defense, Mr. William J. Lynn.

The US cyber-command goes beyond the passive “Maginot Line” mentality of the past, he explains.

Passive defense systems are sufficient to meet 80 percent of attacks, but the other 20 percent need active systems, such as sensors that operate at network speed to detect and block intrusions.

At the heart of the Pentagon’s new cyber-policy lies the recognition that military networks cannot be safe unless other critical infrastructures, such as power grids and financial networks, are protected.

Stuxnet; Made In USA?

The US is itself suspected of having created Stuxnet, a computer worm that cane be introduced via USB sticks into industrial plants and used to sabotage operations, including in nuclear facilities.

Over 60 percent of reported Stuxnet cases are in Iran.

Against this background, Mr. Lynn in September called for collective defense– the core principle of the alliance – to be applied to computer networks:

“The Cold War concepts of shared warning apply in the 21st century to cyber-security. Just as our air defenses, our missile-defenses have been linked so too do our cyber-defenses need to be linked as well,” he said.

European allies are keen to protect themselves against Estonia-type cyber-strikes (which saw bank and government websites paralyzed in 2007).

But they are showing little appetite for US-model, “pre-emptive cyber-strikes,” on hostile countries or organizations.


Madeleine Albright


A group of experts, chaired by former US secretary of state Madeleine Albright and tasked by Mr. Fogh Rasmussen, recently did a report on the new NATO strategy, but was rather cautious on the subject.

“Over time, NATO should plan to mount a fully adequate array of cyber-defense capabilities, including passive and active elements,” the report, published in May, says.

It underlined the need for NATO to co-operate better with the EU, as this could be “helpful in addressing unconventional threats such as terrorism, cyber-attacks, and energy vulnerabilities.”

A bolder move in the report is suggesting to give Mr. Fogh Rasmussen, or NATO generals a “pre-delegated authority” to respond in emergencies “such as a missile or cyber attack.”

But the idea is unlikely to fly, diplomatic sources says.

French Resistance

Another contentious area is that of common nuclear planning.


Nicolas Sarcozy


This has turned into a balancing act between the Washington-led drive for nuclear disarmament, and at the same time keeping nuclear warheads in Europe as a deterrent to hostile countries.

France, which re-joined NATO’s military structures in 2009 after staying out for over 40 years, is legally bound by its constitution have exclusive sovereign power over its nuclear arsenal. And the French has opted out of a Rasmussen-chaired nuclear planning group, in which the alliance is looking at ways to reduce NATO’s reliance on atomic weapons.

“Anything on nuclear policy will have to be agreed with France. There is no consensus over this at the moment,” one NATO source told the EUobserver.com.

Russian Freeze

Meanwhile, the NATO-Russia relations – normally a hot topic between the alliance’s older and newer members – seems to have slipped into the background of the strategic concept discussions.


NATO-Russian Relations


NATO froze relations with Moscow for six months after the Georgia war in 2008 only to restart them again – even though Russian troops are still stationed in Georgia’s separatist regions in violation of a ceasefire agreement.

Tbilisi has filed for NATO membership, but the prospect, confirmed at a NATO summit in 2008, remains distant.

“There is a sense that nothing will move in the foreseeable future on Georgia,” the NATO source says.



The Albright report on strategic concept

NATO Security and Defense Agenda

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Filed under International Econnomic Politics, National Economic Politics

DnB NOR acquire 100% of Baltic Subsidiary DnB NORD

The Norwegian main bank DnB NOR is to acquire 100% of its Baltic Subsidiary DnB NORD, the Norwegian bank says in a short statement.

Since 2005, DnB NOR Bank ASA (DnB NOR) and Norddeutsche Landesbank Girozentrale (NORD/LB) have owned 51 per cent and 49 per cent, respectively, of Bank DnB NORD A/S. Bank DnB NORD A/S has subsidiary banks in Latvia, Lithuania and Poland. Today DnB NOR have decided to take over the whole Baltic bank.

“In a statement to Oslo Børs on 14 July 2010, it was announced that DnB NOR, pursuant to the shareholder agreement, had notified NORD/LB that the bank reserved the right to exercise its option to acquire NORD/LB’s 49 per cent ownership interest in Bank DnB NORD A/S,” DnB NOR says in a short market statement.

“In a statement to NORD/LB today, DnB NOR has exercised its option to acquire NORD/LB’s ownership interest in Bank DnB NORD A/S.”

“If the parties do not reach agreement on price, this must be determined in accordance with an agreed arbitration mechanism.”

“DnB NOR considers DnB NORD’s geographic area of operation to be a region with a good future earnings potential, and that this is a good time to strengthen its position in the Baltic region.”

DnB NOR share price up more than 50% over the last 12 months:

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Swedbank To Merge Baltic Subsidiaries Into The Group

Estonia: Banks Lost USD 23 million in Q1

Morgan Stanley To Buy Bad Baltic Loans?

Latvia To Split And Sell Nations Leading Bank

DnB NOR Net Profit Reduced By 33%

The Nordic Superbank Dream

DnB NOR’s Latest Fuck-Up

DnB NOR: “Comprehensive System Failure”

How To Make A Rat Look Like A Puppy


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