First there was BRICs. Then came CIVETS. Then we were presented with BASIC, CRIM, BRICK, CEMENT, BEM, N11 and the 7% Club. Now barely a week goes by before someone tries to float another ‘useful’ investment acronym.

Behind the dense forest of exotic acronyms is a simple fact: the catch-all classification ‘emerging markets’ has lost much of its usefulness. It was invented in the 1980s, by World Bank economist Antoine van Agtmael, to replace the now-defunct acronym LEDCs (or ‘less economically developed countries’) by which the West had until then blithely referred to the rest of the world. The term ‘emerging markets’ served as a useful way to refer to fast-growing although crisis-prone markets like Russia, China and Mexico.

Within the term ‘emerging markets’ was quite a 1980s-assumption: these markets would follow the development route laid down by ‘developed’ economies, until they arrived in the neo-liberal end point reached by the US, the UK and other western countries. And the phrase also came to have strong associations with the currency and debt crises of the 1980s and 1990s.

But things have changed. The bigger emerging market countries have now overtaken the weaker developed markets, not just in total GDP, but also in the pricing they pay on their sovereign debt. Emerging market countries like China and Russia have accumulated trillions of dollars in foreign exchange reserves, and are now the main creditors of western sovereigns. In the 1980s, emerging markets depended on the west for capital inflows. Now the situation is reversed, and the US and EU depend on China to buy their sovereign debt.

It was partly to recognize this shift in economic power to emerging markets that Goldman Sachs economist Jim O’Neill introduced the now-famous acronym BRICs (Brazil, Russia, India and China) in 2001. It was a runaway success. A decade on, and MSCI has launched a BRIC index, there are several BRIC-focused funds, BRIC-focused blogs, BRIC conferences, and the leaders of the BRIC countries even held their own BRIC summit in 2009. 

However, the success of the acronym, and the increase in capital flows to BRIC markets that followed, quickly led to questions and criticisms of the BRIC tag. In 2008, for example, when Russia’s economy slid into recession following the war with Georgia and the Credit Crunch, some analysts suggested Russia should be dropped from the grouping. This suggestion was sufficiently alarming to Russia that it organized not one but two BRIC summits in Russia in 2009. . (more…)

Turkish voters approved a new constitution this weekend, greeted in Brussels – if not Paris and Berlin – as a key step on the road to EU membership.

But recent commentary and headlines – particularly in the US – have claimed Turkey is turning its back on the West as the rift between Turkey and Israel deepened following the killing of 9 Turkish citizens by Israeli forces when they raided a Turkish ship trying to run the blockade of Gaza in May.

Turkey is an ally of the US and a staunch member of NATO, it has also been trying to get into the EU for more than twenty years, so why are some commentators saying Ankara is turning away from the West? (more…)

Two years ago, Georgian forces shelled the capital of the breakaway region of South Ossetia hitting the base of Russian peacekeepers as well as civilian housing. Russia responded immediately with a massive ground and air assault and in five days inflicted a heavy defeat on its tiny neighbour, occupying a band of Georgian territory into the bargain.

The conflict had several immediate results.

Already fraught relations between Moscow and Tbilisi plunged to new depths and diplomatic relations were severed.

Russia and three other countries recognised the independence of the breakaway Georgian regions of South Ossetia and Abkhazia.

And relations between Russia and the West – the US and the EU – deteriorated to their worst level since the collapse of the USSR – there was even talk of a new Cold War from western politicians.

The Cold War analogies led some commentators to argue Russian foreign policy had taken a decisive anti-western turn and things could and/or should never be the same again

Two years later, the one thing that seems unlikely to ever be the same again is the shape and size of Georgia. If recognition from Russia was not enough, the recent International Court of Justice opinion that Kosovo’s unilateral declaration of independence was not against international law, makes it even less probable Tibilsi could regain control of its lost regions. (more…)

- This week’s Economist sees Lexington bemoan those advancing the discourse of American exceptionalism, suggesting that “[t]he last thing the country needs is to be distracted from its practical problems by the quest for an elusive greatness”. Elsewhere, The Spectator’s Coffee House blog remembers Jimmy Carter’s fabled 1979 speech in which he spoke of a US “crisis of confidence”.

Delivering the annual lecture at The Ditchley Foundation last week, Strobe Talbott suggested that the “promise” of the Obama Presidency – both in the domestic and the international arenas – is now “at risk”. “[W]hatever fate is in store for the current president of the United States”, Talbott argued,

“one thing is for sure.  His success in tackling the major issues of our time will depend on his establishing a degree of common purpose with his partners in national governance at the other end of Pennsylvania Avenue and with his partners in global governance around the world.”

- Elsewhere, over at The Cable, Josh Rogin reports on the slow progress of reviews into US development policy – the Presidential Study Directive on Global Development and the Quadrennial Diplomacy and Development Review.  The Economist, meanwhile, highlights Brazil’s growing identity as a significant aid donor.

- Finally, the head of the UK Financial Services Authority, Adair Turner, cautions against the default acceptance of prevailing economic ideology, suggesting that policymakers would do well to draw on a diversity of economic opinion. Joseph Stiglitz, meanwhile, explores the Keynesian prescription for the global economy.

It’s commonplace to describe the financial crisis as a once-in-a-century event, but I question whether that is the case. Perhaps we’re not in the midst of a short-lived financial shock, but a long crisis that stretches back into the 1990s.

Here’s Paul Blustein on Alan Greenspan:

The Fed chief told the G-7 that in almost fifty years of watching the U.S. economy, he had never witnessed anything like the drying up of markets in the previous days and weeks.

Greenspan wasn’t speaking in Autumn 2008 when Lehman’s collapsed, however, but ten years’ earlier in the wake of the spectacular blow-up of Long-Term Capital Management, which lost $4.5 billion almost overnight in what the fund’s principals post-rationalised as a 100-year flood.

Long-Term (with its superbly hubristic name) was brought low by derivatives, just as Lehman’s would be a decade later.

(Robert Rubin, Clinton’s Treasury Secretary, was one of those left picking up the pieces – part of ‘the committee to save the world’, with Greenspan and Larry Summers. Rubin went on to preside over Citigroup as it needed a succession of massively expensive bailouts, when its derivatives tanked in the subprime crisis.)

The proximate cause of Long-Term’s failure was Russia’s Rouble crisis, when the country defaulted on its debt after the IMF refused to mount a second bailout.

The Russian crisis itself came in the midst of a long series of dramatic economic failures that hits the world between 1997 and 1999, mostly in East Asia (Thailand, South Korea, Indonesia etc), but which also battered Brazil and would devastate Argentina in 2002. Blustein again:

Time and again, panics in financial markets proved impervious to the ministrations of the people responsible for global economic policymaking.

IMF bailouts fell flat in one crisis-stricken country after another, with the announcements of enormous international loan packages followed by crashes in currencies and sever economic setbacks that the rescues were supposed to avert.

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One of the most significant developments at Copenhagen was the emergence of the BASIC coalition – Brazil, South Africa, India and China – which negotiated the final details of the Copenhagen Accord with the United States.

My understanding is that BASIC was formed at China’s instigation. China agreed a Memorandum of Understanding with India in October 2009, committing the two countries to working closely together at Copenhagen. It then invited Brazil and South Africa to join the party, at a meeting in Beijing a week before Copenhagen started. Sudan was also invited to represent the G77.

According to Jairam Ramesh, India’s environment minister, the four countries decided that they’d walk out of Copenhagen together if necessary:

We will not exit in isolation. We will co-ordinate our exit if any of our non-negotiable terms is violated. Our entry and exit will be collective.

During Copenhagen, China worked extremely closely with India, with the two delegations meeting up to six times a day. It also engaged intensively with the other members of BASIC. In the final meeting with the Americans, China agreed to accept a limited international monitoring of its targets (India claims to have pushed China on this point).

The decision was also taken to drop language, setting a deadline for turning the Copenhagen Accord into a legally binding agreement. South Africa and Brazil both appear to have been unhappy with this decision.

Since Copenhagen, the BASIC countries have met once and have agreed to continue to get together on a regular basis. They want the Copenhagen Accord to set the stage for a ‘twin track’ agreement – with tough and binding targets for developed countries through Kyoto #2 and voluntary commitments for themselves under a new agreement.

No-one really knows how the US would fit into this picture. It is also increasingly clear that they and the US left Copenhagen with quite different impressions of what will happen next. The US believes that large emerging economies now have “very explicit activities and obligations”. I don’t think they believe they are committed to anything significant, beyond what they agreed at Bali or put on the table on a voluntary basis before Copenhagen started. (more…)

As David just noted, this morning’s Lex column in the FT is relatively upbeat about the dangers of protectionism, arguing that “the disaggregation of global supply chains, the source of the huge efficiencies that companies pass on to consumers, will not be easily undone.”

Whether or not that’s right (and like Willem Buiter, Martin Wolf is also a good deal more downcast than the Lex team), it’s interesting to compare today’s Lex column with what they had to say about capital flows to emerging markets just a couple of days ago.  Here’s the bit that made me sit up:

Take Brazil and India, the globe’s ninth and 12th biggest economies, according to the International Monetary Fund’s latest estimates. While the developed world is expected to shrink by 2 per cent this year, the IMF reckons Brazil will grow by 2 per cent, and India by 5 per cent. Why? One answer is that they have stable banks, relatively closed economies, and large internal markets. This has insulated them from much of the global turmoil.

The contrast with East Asia is stark. Singapore’s economy shrank at an annualised 17 per cent rate at the end of last year, South Korea by some 20 per cent. Yet this is not for lack of capital. Asian economies, after all, are global creditors. Their economies have shrunk instead because they are heavily oriented towards collapsing international trade. Meanwhile, their local markets are undeveloped and weak. Asia’s challenge is how to best deploy its accumulated surpluses to boost domestic demand.

(more…)

Image Author: mike_is_scrumptious

Assume a robust global deal on climate and the world’s cities will have to transform their infrastructure, economies and societies in little more than a generation.

Assume uncontrolled emissions growth and they face growing impact from a less hospitable and more volatile climate.

Either way – big changes are on the way. Few cities’ leaders grasp the scale of the challenge, especially in developing countries, where towns and cities will have an additional 1.5bn residents to cope with by 2030.

This new think piece has been prepared as part of the British Council’s Climate and Cities programme. Download the pdf (which has full references) or read the full text below the jump.

(more…)

Courtesy Flickr user massdistraction

The IMF today predicted a grim economic outlook for 2009, with some green shoots in 2010.

The news is especially grim for the UK and Eurozone countries, with a 2.8% and 2% fall in output in 2009 and barely any growth in 2010. The US is predicted to do quite a lot better – a 1.6% fall this year, but 1.6% of growth next. That should cue a pleasant new wave of American triumphalism.

China floats through the crisis more or less unscathed. Growth slips to 6.7% in 2009, but bounces back to 8% in 2010. India does a little worse, Brazil suffers pretty badly, while the Mexican economy really tanks.

But I really don’t know why I even bothered to read the stats. Nine months ago at the Progressive Governance Summit, Dominique Strauss-Kahn told everyone that Europe and the US would experience a slowdown, but not a loss of growth (with the European economy expected to outperform the American one).

Even since it last ran its models in November (just three months ago!), the IMF has knocked 1.7 percentage points off world growth, and a staggering 6 points from its prediction for what were once known as the Asian tigers.

The IMF itself is forced to admit that “the uncertainty surrounding the outlook is unusually large.” Doesn’t that translate as “our models weren’t built for these crazy conditions, but we’ll run them anyway and PR them heavily to the 1000 or so media outlets that’ll reprint our speculation as fact”?

Or am I missing something here?

Nick Stern isn’t going to like this, but there’s a new Stern on the climate block: Todd Stern , who is set to be announced as the US’s new climate envoy.

(Todd) Stern has set out a fairly clear road map for US engagement in the climate process (nb. these are his personal pre-appointment views, not those of Obama or Clinton). He thinks the US should:

• Start with domestic policy - get the National Academcy of Sciences to recommend (and review on regular basis) a stablization target; legislate cap and trade, not a carbon tax; supplement with regulation on energy efficiency and tex incentives for R&D.
• Use domestic policy as a lever in the international arena – negotiating first with a core group of countries (the ‘E8′ – Brazil, China, EU, India, Japan, Russia, South Africa and the US); then building a post-Kyoto framework on the back of their agreement, with binding long-term targets for all developed and ‘as many advanced developing countries as possible,’ and a built-in mechanism to ratchet those targets up over time (and as scientific findings dictate).

Stern is fairly tough on China. The country needs to accept targets (calculated on what basis is a question he does not address), but he makes lots of positive noises. Joint action on a climate can form the basis of a new strategic partnership between the 800-pound gorillas, but only if it is elevated from “traditional place in the second tier of mutual concerns.”

Throughout, of course, he has an eye on the US Senate and ratification. Bottom up targets and sectoral agreements should be deployed if they can suck more countries into a climate deal, as this will shut up antsy Senators. Access to carbon markets should be used as another tool that creates an incentive for developing country participation.

But there needs to be a stick too, Stern believes – and that stick is trade. Unilateral tarrifs on carbon-intensive goods would be ‘profoundly alienating’ and ‘a prescription for mutual recrimination, not progress’, especially after the US has spent so many years in the climate wilderness. But:

Considered in a mutilateral context…the idea…is more interesting. Today, the carbon content of goods is not captured in their price…If the premise of a climate regime were that countries must capture those social costs by putting a price on carbon, whether by means of a cap-and-trade program, a carbon tax, or equivalent policies to cut emissions, tarrifs could then be imposed on the exported products of any country that lacked such policies.

The Europeans will welcome Stern’s appointment with open arms – the Brits in particular.  John Ashton, the UK’s climate envoy, gets name checked by his new US counterpart – and it wouldn’t surprise me to see the two working hand in hand…

David Cameron yesterday warned that the UK could be forced to go cap in hand to the IMF, as it did in 1976 under chancellor Denis Healey. (This, by the way, at the launch of a new programme at Demos about ‘progressive conservatism’. Et tu, Demos?)

The question is, would the IMF have the cash. Click on more to read a story I recently wrote for my mag, www.emeafinance.com, which looks at the risk of the IMF running out of money in the next 18 months, and asks what the chances are of it receiving more funds from cash-rich G20 governments (answer: slim).

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I’ve been in Japan today, speaking at ‘Reforming International Institutions – Meeting the Challenges of the 21st Century’,  a seminar organized by the United Nations University and the British Embassy in Japan.

You can download my talk here (with pictures, references etc) – or the text only is available below the jump. There’s a webcast too.

Headlines:

• It’s going to be a tough year. The financial meltdown has a long way to go, and the downturn is risking turning into a global depression.
• Trade is a bell wether. Protectionist pressures are already on the rise. If they gain traction, take that as a warning of a wider loss of confidence in global institutions.
• The unravelling of global economic imbalances could prove corrosive to the international order. If countries start to devalue to protect exports, expect a tit-for-tat dynamic to kick in.
• Scarcity issues (energy, water, land, food, atmospheric space for emissions) remain the key medium term driver of global change. Commodity prices will spike again as soon as there’s recovery.
• The downturn has stemmed the uncontrolled growth of emissions, but also lessened the chance of a robust global deal on climate.
• Economic bad times could well drive increased conflict. A major new security threat might be the fabled black swan – hitting just when the global immune system is already overloaded.
• If we experience a long crisis (or a chain of interlinked crises), we are likely to see either a significant loss of trust in the system (globalization retreats), or a significant increase in trust (interdependence increases). 
• You need to stretch time horizons to get the latter – shared awareness (joint analysis of risks and challenges), as a basis for shared platforms (loose coalitions of leaders), which can lobby for a shared operating system (a new international institutional architecture).
• 2009 sets a challenging agenda for the G20 (financial reform and economic recovery – but framed by a broader vision on climate, resources, security etc.)…
• …the G8 (caucus of rich countries able to tee up Copenhagen and kick start development assistance if developing countries begin to teeter)…
• …the UN (especially Ban Ki-Moon’s proposed high level ‘friend’s group’ on climate, but also as a fora for getting to grips with scarcity issues)…
• and the Bretton Woods institutions and the WTO (first of all ensuring they keep their heads above water, then looking to ‘save globalization from itself’).
• Oh and be ready for the backlash – people are angry and rightfully so, but that may well lead us down some populist blind alleys.

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As oil continues its crazy gyrations (yesterday’s price – $48), news is proliferating that investment in new exploration and production is falling off a cliff.  Monday’s NYT, for example, had this:

From the plains of North Dakota to the deep waters of Brazil, dozens of major oil and gas projects have been suspended or canceled in recent weeks as companies scramble to adjust to the collapse in energy markets.

Oil markets have had their sharpest-ever spikes and their steepest drops this year, all within a few months. Now, with a global recession at hand and oil consumption falling, the market’s extreme volatility is making it harder for energy executives to plan ahead. As a result, exploration spending, which had risen to a record this year, is being slashed.

The precipitous drop in oil prices since the summer, coming on the heels of a dizzying seven-year rise, was a reminder that the oil business, like those of most commodities, is cyclical. When demand drops and prices fall, companies curb their investments, leading to lower supplies. When demand recovers, prices rise again and companies start to invest in new production, starting another cycle.

Now for Dan Drezner, all this poses a question:

So, let me see if I have this right:

If oil prices are sky-high, the energy sector explains that it will be slow to develop new fields, because exploration requires massive fixed investments and no one knows what the price of energy will be 5-10 years from now;

If oil prices are low, the energy sector explains that it is unprofitable to develop new fields because… energy prices are low.

Well, actually that is more or less the long and the short of it; as I argued back in July, the oil price is set to continue its recent yo-yoing for as long as we continue without a clear ‘signal from the future’ about the long term demand outlook for oil. After all, if you were an investor considering ploughing money into oil fields that were only profitable above $60 or $70 a barrel, and which would take many years to recoup the capital cost, wouldn’t you apply a pretty big risk premium if you saw prices collapsing to below $50 from a high of $147 less than six months earlier, with the potential in the background for future climate policy to cause demand to plummet?

Problem is, though, that without that new investment, we’re on track for a serious price crunch at some stage, as both the IEA and Chatham House have argued.  So how to square the circle?  Well, Nick Butler – who was John Browne’s chief of staff at BP and now heads the chairman of the Centre for Energy Studies at Cambridge’s Judge Business School -has a proposal in the FT yesterday. He writes:

If the energy ministers want to stabilise the market they should begin by commissioning a detailed, independent analysis of what went wrong. They should then develop the stabilising mechanisms that would limit the possibility of any repetition of 2008.

The most effective mechanism would be agreement on a broad target range for prices – say, between $50 and $75 a barrel – backed by a strategic stock holding to be augmented or deployed when prices diverged from the range. To support such an agreement trading would be limited to those with a direct physical interest in the market.

From a new base of relative stability ministers could consider the longer-term issues that will shape the energy market: the huge need for infrastructure investment ($350bn a year according to the International Energy Agency) and climate change.

This idea of a price band is clearly starting to gain ground in the energy think tank world – I heard a very similar idea mooted by an attendee at a Shell / Economist energy breakfast in London last month. But I’m not so sure.  While Nick Butler’s clearly right to refer to the need to integrate energy security with climate change, why not go one step further – and use a comprehensive climate framework to provide the long term oil price stability that’s needed to bring the right amount of new investment on stream?

Think about it.  Imagine a climate regime in which the emission targets are sufficiently long term (i.e. multi-decade rather than in 5-yearly increments as under Kyoto), and which is based on a quantified stabilisation target, which therefore means that all major emitters have binding caps. (You can argue about political feasibility in the current political climate, but the fact remains that a global deal on climate that actually solves the problem will have to satisfy these conditions anyway – and sooner rather than later if we’re to limit warming to two degrees C.)

What such a regime would also achieve, with no extra work needed, is to provide long term predictability on how much fossil fuel will be being consumed – for decades ahead.  True, it wouldn’t tell you exactly which fossil fuels – coal versus oil, for instance – but since they’re used in different markets (oil mainly for transport, coal and gas mainly for power generation and heat), you could make a pretty good guess.

And now imagine again that you’re the potential energy investor we met earlier.  All of a sudden, you can invest with much more confidence – and what’s more, knowing the level of demand will enable you to watch what other investors are doing too, so that more or less the right amount of new oil is brought on stream to meet projected demand, within the context of a global deal for climate.

Oh, and there’s one other advantage: given that a global deal on emissions is primarily an agreement between energy consumers, you can worry just a little bit less about OPEC’s congenital inability to stop itself from cheating…

Update: meanwhile, “OPEC oil ministers meet on Wednesday to remove a record 2 million barrels per day from oil markets as they race to balance supply with the world’s collapsing demand for fuel … Saudi Arabia, the world’s biggest oil exporter, has led by example — reducing supplies to customers even before a cut has been agreed to help push prices back toward the $75 level Saudi King Abdullah has identified as “fair.”"

Relatively little media coverage so far on the UN climate talks currently underway in Poznan – but that’s not to say that nothing interesting is happening there.

Item 1 is that China and India have come out arguing that Obama’s proposed 2020 emissions reduction (namely, to get US emissions back to 1990 levels by that date – more details here) is insufficient.  He Jiankun, a Chinese delegate, was quoted in Reuters as saying that “It’s more ambitious than President Bush but it is not enough to achieve the urgent, long-term goal of greenhouse gas reductions”.

Given that the IPCC says that stabilising at 450 parts per million of CO2 equivalent (the maximum level on which we still have a better than even chance of limiting warming to 2 degrees C) probably requires developed countries to reduce their emissions by 25-40% below 1990 levels by 2020, you can see where the Chinese and the Indians are coming from.

But as David pointed out when he and I were debating this a couple of weeks ago, the US’s emissions have gone through the roof under Bush: even the very modest target proposed by Obama is going to be a massive stretch for them.  Expect this one to run and run.

Item 2: Brazil is reportedly sidling up to per capita convergence as the formula for sharing out a global emissions budget, at least if you believe this report in Business Green yesterday, which says:

Brazil reportedly put the finishing touches to proposals apparently based on the contraction and convergence principle that would see countries agree to per-capita emission reduction targets. Under the proposals, emission targets would be set on a per-head-of population basis, meaning that developing economies with low-carbon emissions per capita such as China would face less-demanding targets, while those countries with the highest level of emissions per person would have to deliver the deepest cuts.

Fascinating if true, but they don’t cite their source, so I’m regarding as tentative until I hear it from another source or two. 

Item 3, meanwhile, is that in a workshop on “shared visions”  for the future on Tuesday, China made some tentative steps towards setting out its stall on how it would want an emissions budget to be shared out.  This is very interesting, as China’s the most important of the handful of developing countries for whom straight per capita convergence wouldn’t be advantageous – as its per capita emissions have (just in the last few months) gone over the global average per capita level, meaning that even immediate convergence at equal per capita shares to the atmosphere would leave them with no surplus permits to sell. What then is China proposing?  The Worldwatch Institute wrote it up like this:

China, citing the equity language of Article 3, mentioned the need for eventual “global per-capita emissions convergence” – the idea that, at some point in the future, all countries in the world should have similar per-capita emissions as a matter of climate equity. But this concept did not pick up momentum, at least not in the workshop.

That had me sitting bolt upright in my chair and reaching for the phone to ask people in Poznan if it was really true.  The answer back: not quite.  In fact, what China seems to have been proposing is a system of per capita convergence in cumulative emissions – i.e. taking into account historical responsibility for past emissions, as well as current emissions – which would clearly be much more advantageous to it, given how much later China industrialised than (say) Britain (for whom historical responsibility based allocations of emissions permits would be rather, ahem, challenging).

But the real significance here is less the specific formula that China proposed (more details needed – if you were in the workshop, please drop me an email), and more the fact that China may now be starting to engage in a conversation about the formula that might be used to share out a global emissions budget.  Up to now, discussion of stabilisation targets for greenhouse gas levels in the air has been off the table - in large part due to Chinese unwillingness to talk about how the emission budget implied would then be shared out.  If that’s changing, then the future just got a little more hopeful.

If you need emergency information, try the Mumbai Help blog – it has a consolidated list of contact numbers. British nationals in Mumbai should call +91 11 2419 2288.  In the UK, call +44 207 008 0000.

Mumbai has been rocked by a series of shootings and explosions. The violence has the hallmarks of a coordinated attack. For the breaking news go to Twitter, then go to the BBC or CNN.

Below is an example of the feed from Twitter user @BreakingNewsOn, as news of the crisis initially emerged.

Update – Alex adds: See this Wikipedia page on the bombings, which is being updated in real time. (Same happened on 7/7 – see Charlie’s post on this a few months back.) Also a Google Map of locations under attack here, and a Flickr photostream here. But the #Mumbai feed on Twitter remains the key place to look for news (plus @mumbaiattack for a more filtered version).

Update, 7:43 am (David): The news keeps getting worse. Indian TV reports a fresh explosion at the Trident just a few minutes ago. It was deeply shocking this morning to hear the BBC interview a man who was barricaded inside the hotel. A few minutes later the presenters had moved onto a joke item about Christmas carols. Pathetic.

Update, 8:28 am (Alex): Summary of how mobile and social networking channels are covering the crisis – together with discussion of some of the dilemmas this throws up – here. The biggest dilemma of all: widespread concern that the attackers themselves are making use of media and social network coverage in order to anticipate what the authorities are up to.  In such circumstances, much can hang on individual users’ sense of personal responsibility on what to report – and what not to.  No such thing as a DA Notice on Twitter…

Update, 8:44 am (Alex): Coverage is starting to converge on agreement that the attackers came to Mumbai by sea, leading to much speculation and rumour about where they may have come from.  Plenty of people on Twitter, the blogosphere and (more gradually) the mainstream media (e.g. Indian Express here) are speculating that the attackers came from Karachi (in Pakistan).  This is not confirmed, though; other reports suggest that they came from Gujurat (in India). As Gideon Rachman notes, the answer to this question will be highly significant:

The development of a terror campaign with truly domestic roots would be a really ominous development. On the other hand, if the terror attacks originated on Pakistani soil, then regional tensions would spiral. How unpleasantly ironic that all this should happen, just days after the Pakistani prime minister, issued a bold appeal for peace between his country and India. One might almost believe that these attacks were designed to scupper the Zardari peace initiative – were it not for the fact that it must take longer than a couple of days to put something like this into action.

Update, 11:32 am (David): The siege of Mumbai is now into its twentieth hour. Terrorists are reported to be being interviewed live on Indian TV. IBN is claiming we’re into the endgame. Let’s hope so before night falls. The live IBN stream is here…

Update, 11:54 am (Alex): The BBC is reporting that the Indian government has asked for all live Twitter updates from the scene to cease immediately.  A tweet reading as follows is proliferating on Twitter as users re-post it on their feeds: “ALL LIVE UPDATES – PLEASE STOP TWEETING about #Mumbai police and military operations”. Various twitterers reply indignantly that if they’re to stop posting the details, the broadcast media should do the same.  As I write, the IBN video stream that David links to above is issuing real-time updates on which floors of the Oberoi Hotel have been cleared by security forces.

Update, 14:38, (David): Switch from the Twitter feed to Al Jazeera’s comments thread and you’ll find that sympathy for those caught up in the attacks is not universal, while some suspect that the culprit will not turn out to be an Islamist group:

Maria Costa, Governador Valadares, Brazil: “While few enjoy the sight of “innocent” victims being caught up in the struggle against the imperialists and their collaborators, nobody should ever forget that these desperate acts of martyrdom are the direct result of the actions of the imperialists and their lackeys. If India wants to avoid future tragic incidents, they need to re-think their actions in Occupied Kashmir and their nuclear alliance with the Yankees.

mewrite, Banglore, India: the killing of Hemant Karkare(chief of Mumbai’s anti-terrorism squad) gives a clue who might be behind this heinous crime. Karkare was spearheading the investigations into Malegaon blasts and was instrumental in unveiling the Hindu terror network. Initially, as usual, Muslims were blamed for those blasts, & many were punished on false charges. But the recent investigations done by Mr Karkare revealed that it was actually the handiwork of Hindu terrorists belonging to Shiv Sena who with the help of some army persons conducted blasts in many Indian cities during the last few years.

proudpathan, Batley, United Kingdom: The US, Uk, Israel and laterally the Indians all lie in the same bed. These countries are upto something. What it is I don’t know. I hope the Indians don’t associate themselves too closely with these countries, otherwise the rest of the world will see them as they see the US, the UK, and Israel as being imperialistic, oppressors and occupiers and the murderers of innocent Muslims.