Rush for safe havens as euro fears rise

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.

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Three killed in northern Italy earthquake

Three people have been killed in a 5.9-magnitude earthquake that struck northern Italy near Bologna, according to reports. The quake that struck at just after 4am local time was centred 21.75 miles north-northwest of Bologna at a relatively shallow depth of six miles, the US Geological Survey said. Italian news agency Ansa, citing emergency services, said two people were killed in Sant'Agostino di Ferrara when a ceramics factory collapsed. Another person was killed in Ponte Rodoni do Bondeno. In late January, A 5.4-magnitude quake shook northern Italy. Some office buildings in Milan were evacuated as a precaution and there were scattered reports of falling masonry and cracks in buildings. The tremor was one of the strongest to shake the region, seismologists said. Initial television footage indicated that older buildings had suffered damage. Roofs collapsed, church towers showed cracks and the bricks of some stone walls tumbled into the street during the quake. As dawn broke over the region, residents milled about the streets inspecting the damage. Italy's Sky TG24 showed images of the collapsed ceramics factory in Sant'Agostino di Ferrara where the two workers were reportedly killed. The structure, which appeared to be a hangar of sorts, had twisted metal supports jutting out at odd angles amid the mangled collapsed roof. The quake “was a strong one, and it lasted quite a long time”, said Emilio Bianco, receptionist at Modena's Canalgrande hotel, housed in an ornate 18th century palazzo. The hotel suffered no damage and Modena itself was spared, but guests spilled into the streets as soon as the quake hit, he said. Many people were still awake in the town since it was a “white night”, with shops and restaurants open all night. Museums were supposed to have remained open as well but closed following the bombing of a school in southern Italy that killed one person. The quake epicentre was between the towns of Finale Emilia, San Felice sul Panaro and Sermide, but was felt as far away as Tuscany and northern Alto Adige. The initial quake was followed about an hour later by a 5.1-magnitude aftershock, USGS said. And it was preceded by a 4.1-magnitude tremor. In late January, a 5.4-magnitude quake shook northern Italy. Some office buildings in Milan were evacuated as a precaution and there were scattered reports of falling masonry and cracks in buildings. In 2009, a devastating tremor killed more than 300 people in the central city of L'Aquila.

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‘Save euro’ plea to Germans as Spain slumps

BRITAIN yesterday piled pressure on German Chancellor Angela Merkel to save the euro. 6 comments Related Stories PM: Make or break for euro HE to issue plea to Merkel to fork out as only way to stave off meltdown New French Pres gets a soakingFrench warning for CameronSarky poll malarky will leave PM narky David Cameron and Chancellor George Osborne said she must use her financial clout to stop the single currency collapsing. The PM hammered the message home in emergency talks via video-link with Mrs Merkel and French president Francois Hollande. It came as the chaos in Greece spread to Spain — with fears of a run on banks in both countries. Greeks have taken £560million from local banks in the past week. And yesterday Spain’s Bankia bank was forced to deny reports customers had taken £800million out of its coffers in the past seven days. Last night the fears hit Santander UK as credit rating agency Moody’s downgraded the bank along with its Spanish owner and 15 other Spanish banks. And credit agency Fitch downgraded Greece on fears it will be booted out of the Eurozone. Earlier, Mr Osborne said the Treasury had drawn up emergency plans to cope with Greece quitting the euro. He told MPs: “Britain will be prepared for whatever comes.” Mr Cameron had warned countries such as Greece and Spain can only survive if richer countries did more to “share the burden of adjustment”. He also backed Eurobonds to raise billions to prop up crisis-hit countries — a proposal that would have to be bankrolled by Berlin. After the video chat, a Downing Street spokesman said the PM urged the eurozone to take “decisive action to ensure financial stability and prevent contagion”.

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Spain’s banking crisis reached Britain’s high streets last night when the credit rating of Santander UK was cut.

In a sweeping reassessment, ratings agency Moody’s announced in Madrid that it is downgrading 16 Spanish banks because it could not be sure of the ability of the country’s government to provide the necessary support.

Santander UK was among the banks highlighted after the ratings agency took aim at its parent Banco Santander, based in Spain. 

The Spanish banking crisis has hit the British high street, with the news that Santander has had its credit rating cut

Santander is one of the biggest players in UK retail banking, having taken over the former Abbey National, Alliance & Leicester, Bradford & Bingley and most recently the English branches of the Royal Bank of Scotland.

The new lower A2 credit rating is certain to be a cause of anxiety to Santander UK’s millions of British customers. 

Nevertheless, they can be confident that their deposits up to £85,000 are guaranteed by the British government should there be a loss of confidence.

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Greek crisis batters European shares

European shares have slid into the red as the continuing political uncertainty in Greece undermines investor confidence. There are concerns about the prospect of Greece leaving the eurozone, with European central bankers now talking more openly about what the future could hold for the euro currency region. Santander - the biggest eurozone bank by market value - slumped almost 4%, and London's 100 share index fell 1.7%. Meanwhile, Yahoo has announced its Chief Executive Scott Thompson is stepping down after a controversy over a fake computer science college degree on his CV. The BBC's Aaron Heslehurst discusses the key financial stories of the day.

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Greek crisis batters European shares

European shares have slid into the red as the continuing political uncertainty in Greece undermines investor confidence. There are concerns about the prospect of Greece leaving the eurozone, with European central bankers now talking more openly about what the future could hold for the euro currency region. Santander - the biggest eurozone bank by market value - slumped almost 4%, and London's 100 share index fell 1.7%. Meanwhile, Yahoo has announced its Chief Executive Scott Thompson is stepping down after a controversy over a fake computer science college degree on his CV. The BBC's Aaron Heslehurst discusses the key financial stories of the day.

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Germany can't ignore the austerity backlash

A consensus is starting to emerge that something needs to budge in terms of the current orthodoxy on the economics of austerity. In short, Europe, starting with Germany, needs to review the terms of the fiscal compact, loosen monetary policy and accept that cuts alone are not leading us towards recovery. If we continue where we are, the danger is that political instability of the kind that we are already seeing in Greece will spread, in some cases propelling extremists to the fore. The message from Europe's electorates in recent weeks has been consistent. Voters are saying they have had enough of bitter medicine that holds no prospect of recovery and no longer trust parties committed to Berlin-mandated austerity. In France this sentiment swept away Nicolas Sarkozy and brought in François Hollande. In Greece, frustration at the prospect of relentless decline is encouraging more disturbing political options, from the fascists of the Golden Dawn to the left-wing fantasists of Alexis Tsipras's Syriza party. If Greece goes to the polls again, which looks likely following the failure of coalition talks, Syriza's hard-left, anti-austerity coalition is on course to win about 27 per cent of the vote, becoming the main political force in the country. Spain's economic outlook is almost as desperate. Madrid has no hope of meeting its budget deficit targets and must impose more cuts or be fined by the EU – a bewildering set of choices for a country where 23 per cent of people are out of work already. Meanwhile, Ireland's referendum on 31 May on the EU fiscal treaty will be another test of whether Europe's voters are ready to take more pain on the back of vague promises of gain in the very distant future. Until now the messages from Brussels and Berlin have been the familiar ones: there is no alternative and the lady is not for turning, the lady being Chancellor Angela Merkel. But this may be changing. In the commission there is growing acceptance that the existing policy cannot be sustained if every government that adheres to it is rejected at the ballot box. That leaves Germany as the great bulwark of fiscal orthodoxy, but even German voters are questioning Ms Merkel's rigidly debt-phobic economics. Fresh after losing the state of Schleswig-Holstein, she last night lost North-Rhine Westphalia, Germany's most populous state, which went to the polls yesterday. No one in their right mind is arguing for the voodoo economics that Syriaz is proposing for Greece. Perhaps nothing can stop Greece from sliding into prolonged chaos, which will increase the likelihood of its exit from the euro. If that happens, Europe will have to deal with the shock. But in the meantime, what needs to emerge, especially after voters deliver another verdict in the French parliamentary elections in June, is recognition that things cannot go on as they are indefinitely. The adjustment to lower public spending needs to be slowed while Germany must be persuaded to sign up to a growth compact, which means Germans living a little more extravagantly than they are used to, buying more from their European partners and taking the risk that this will lead to higher inflation. Anathema to many Germans, starting with Finance Minister Wolfgang Schäuble, who will ask why hard-working Germans should pay for others' mistakes. The answer must be that it is not in Germany's interest for large parts of the rest of Europe to go under. Germany's enviable prosperity is built on exports and on the euro but if its neighbours stagnate indefinitely, German companies and German living standards will suffer. Not a welcome message for Ms Merkel – but if her own voters turn against her, she may have to do a little turning of her own, in the end.

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Despite Germany, euro zone sinks towards recession

Strong production in Germany could not make up for a slump across the rest of the euro zone in March with declining output at factories falling and signaling an oncoming recession may not be as mild as policymakers hope. Industrial production in the 17 countries sharing the euro fell 0.3 percent in March from February, the EU's statistics office Eurostat said on Monday. Economists polled by Reuters had expected a 0.4 percent increase overall. The figures stood in contrast with German data showing output in the euro zone's largest economy up 1.3 percent for the month, according to Eurostat, 2.8 percent when energy and construction are included. "With the debt crisis, rising unemployment and inflation above 2 percent, household demand is weak and globally economic conditions are sluggish, so that is making people very reluctant to spend and invest," said Joost Beaumont, a senior economist at ABN Amro in Amsterdam. Eurostat says output fell 1.8 percent in Spain and in France, the euro zone's second largest economy after Germany, output was down 0.9 percent for the month. The Netherlands saw a decline of 9 percent, but that was after a huge jump in the previous month. Many economists expect Eurostat to show on Tuesday that the euro zone entered its second recession in just three years at the end of March, with households suffering the effects of austerity programs aimed at cutting debt and deficits. "Industrial production is a timely reminder that first-quarter GDP will likely show a contraction," said Martin van Vliet, an economist at ING. "With the fiscal squeeze unlikely to ease soon and the debt crisis flaring up again, any upturn in industrial activity later this year will likely be modest." European officials have repeatedly said the slump will be mild, with a recovery in the second half of this year. But the strong economic data seen in January has unexpectedly faded and business surveys point to a deeper downturn, with the drag coming from a debt-laden south, epitomized by Greece, Spain and Italy. "HIGH ALERT" Economists polled by Reuters last week estimated the euro zone economy shrank 0.2 percent in the first quarter, after shrinking 0.3 percent in the fourth quarter of last year. "We suspect that a further slowdown in the service sector meant that the wider economy contracted by around 0.2 percent last quarter," said Ben May, an economist at Capital Economics in London. "What's more, April's disappointing survey data for both the industrial and service sectors suggest that the recession may continue beyond the first quarter." EU leaders will meet in Brussels on May 23 to try to map out ways the euro zone and the wider European Union can return to growth while still cutting debts and deficits, but economists and investors say there is little room to maneuver. "In addition to 'high alert and forceful' crisis management, Europe still needs to articulate more clearly its longer-term game plan," Erik Nielsen, Unicredit's global chief economist, wrote in a note to clients on Sunday. In terms of the March output data, economists said the performance underlines the weak demand for goods such as machinery and consumer products, as the currency area suffers from the impact of a two-year debt crisis that has driven unemployment to a record high. On an annual basis, factory output sank 2.2 percent in March, the fourth consecutive monthly slide, Eurostat said, and only Germany, Slovenia and Slovakia were able to post growth.

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Germany's Pirate Party has gone from a tiny group of hackers to a significant force in an astoundingly short amount of time.

Now she knows what it's like. Now she knows what politics feels like. It can hurt, and it can be extremely draining. On Thursday evening, Marina Weisband decided she had had enough. She cancelled a television appearance and checked herself in to Berlin's Charité Hospital feeling faint and dizzy. By then Weisband, party manager of the Pirate Party, was already familiar with the new rigors of politics and the challenges presented by her own party. She had been in the eye of a shitstorm and had been rudely berated online, all because she had written things that others didn't like. Last Thursday evening Weisband, 24, became acquainted with the rigors of the old system. She was a guest on a talk show hosted by Michel Friedman, a member of the center-right Christian Democratic Union (CDU), who accused the Pirates of providing a political home to "Nazis, racists and anti-Semites" -- about the worst possible insult in German politics. The accusations stemmed from the fact that some in the Pirate Party had once been members of the right-wing extremist National Democratic Party of Germany (NPD), or had allowed themselves extremely controversial statements about the Third Reich. Weisband didn't seek to defend any of this. On the contrary. But it wasn't enough for Friedman. He continued to rage after the broadcast, says Weisband. "You should be ashamed of yourself," he allegedly shouted at her. "The Pirates shouldn't even exist." After withstanding this attack, Weisband was scheduled to appear on a talk show hosted by journalist Maybrit Illner. But shortly before the program was to begin, she realized that something was wrong, that she couldn't handle it all anymore, and she had someone take her to the hospital. Weisband had experienced how difficult it can be to come to grips with this rigid system, with all its rules and taboos. Too Good to Be True The Pirates' goal is to change this. They want to establish new rules and a new way of engaging in politics. But now they are running into problems. The system is fighting back, and it's thankful that the Pirates are having a problem with a few members with radical right-wing views. The situation is such that party leaders, on the eve of their national convention this weekend in Neumünster, are unable to savor their outstanding survey numbers at the moment. Opinion polls show the Pirates would capture up to 13 percent of votes were elections held this Sunday, which would place them neck and neck with the Green Party and well ahead of the Left Party and the business-friendly Free Democratic Party (FDP). Almost one in three Germans can imagine voting for the Pirates. They are skimming off support from all parties. More importantly, however, they are attracting new potential voters. It sounds almost too good to be true, a party of computer nerds and freaks, a party of political neophytes, electrifying a large share of German citizens. Avanti Dilettanti -- they wish these amateurs all the best. The Pirates give them renewed hope that politics could be better than it is. The same hope existed once before, not too long ago. Only a year-and-a-half ago, many Germans believed that a man named Karl-Theodor zu Guttenberg could reinvigorate politics. Extremely popular, the young, dashing Guttenberg had quickly become a powerful fixture in Chancellor Angela Merkel's cabinet and many had thought he had the stuff to become chancellor himself one day. He was as close to a star as it gets in German politics. But those hopes were dashed when it was revealed that Guttenberg had plagiarized large parts of his doctoral thesis, and he was forced to resign as minister of defense. This says nothing about the Pirates and their prospects of success. It only says that the German people are both deeply disappointed with politics-as-usual and have a great longing for something different. Many people no longer trust conventional politicians. They are tired of the rituals, and they want to be consulted. They want to know what is happening and why, and they want to participate and have their say. Why the Pirates Are Successful This is precisely the Pirates' biggest attraction: transparency and participation, as well as a healthy dose of freshness and otherness. This sometimes makes the Pirates seem childishly naïve and chaotic, and yet they seek to make do without backroom backslapping and conventional political smoothness. The hotly debated childcare subsidy issue is a perfect example of why the Pirates are successful. The idea, which would provide stay-at-home parents state money for their troubles, is a controversial one. Many say it reinforces an antiquated view of the family, others say it would provide an incentive for poor, immigrant families to keep their children at home, thus delaying their acquisition of the German language until their first years in school. But because Horst Seehofer, the chairman of the conservative Christian Social Union (CSU) -- the influential sister party to Merkel's CDU -- wants it to happen, Chancellor Angela Merkel says that it has to happen. And that's that. Conservatives in parliament are expected to toe the line and vote for the legislation, even though many oppose it. This is traditional politics in its worst form: wheeling and dealing, and the expectation that the rank and file will accept a decision handed down from above. One can only hope that this system will be revamped. The Pirates want to give it a try. In other words, it isn't just a matter of whether yet another party has acquired seats in the German parliament. Instead, it's about the bigger picture, about the question of whether politics will remain as it is or will improve. Pirate Communication Yet, it isn't so easy to revitalize a 63-year-old system, especially one that has also proven to be successful in many respects. It defends itself, but more than anything it absorbs challengers. Adversaries will be subsumed and changed, not the other way around. And that is precisely where we are today. Will the Pirates succeed in changing the system, or is the system changing the Pirates? Their tools are the Internet and the computer, which they use to develop their policies. To understand the Pirates, it's important to understand how they communicate with one another. Their system, such as it is, can be illustrated by the case of Christopher Lauer, a 27-year-old member of the legislature in the city-state of Berlin. Recently, he came up with the idea of extending the terms of party leaders from one year to two, arguing that the party needs continuity in its leadership. The proposal will be put up for a vote at the party convention this weekend. Lauer, though, wants to know what the Pirates think about his proposal before that, and he wants a recommendation from the grassroots to take to the convention. To that end, he uses the Liquid Feedback voting software to introduce his motion. Party members who have registered are entitled to vote. The discussion takes place simultaneously on a Pirate Pad, an online document to which everyone can contribute. Lauer also promotes his proposal on Twitter, where he currently has 14,000 followers. Marina Weisband immediately retweets his idea to her own followers, of which she has 25,000. In this way, all it takes are a few clicks before Lauer's idea reaches the majority of the party base.

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Greek far-right parties could end up with as much as 20 percent of the vote in Sunday's elections. The neo-Nazi Golden Dawn party has intensified the xenophobic atmosphere in the country.

At night, the streets leading to Omonoia Square are empty. That wasn't always the case. The area was the premier multicultural neighborhood of Athens and one of the first quarters to be gentrified. Jazz bars and Indian restaurants lined the streets, separated by the occasional rooms-by-the-hour hotel. It was a quarter full of immigrants, drug addicts and African prostitutes, but also of journalists, ambitious young artists and teenagers from private schools. Today, the immigrants stay home once night falls. They are afraid of groups belonging to the "angry citizens," a kind of militia that beats up foreigners and claims to help the elderly withdraw money from cash machines without being robbed. Such groups are the product of an initiative started by the neo-Nazi Chrysi Avgi -- Golden Dawn -- the party which has perpetrated pogroms in Agios Panteleimon, another Athens neighborhood with a large immigrant population. There are now three outwardly xenophobic parties in Greece. According to recent surveys, together they could garner up to 20 percent of the vote in elections on Sunday: the anti-Semitic party LAOS stands to win 4 percent; the nationalist party Independent Greeks -- a splinter group of the conservative Nea Dimokratia party -- is forecast to win 11 percent; and the right extremists of Golden Dawn could end up with between 5 and 7 percent. My name is Xenia, the hospitable. Greece itself should really be called Xenia: Tourism, emigration and immigration are important elements of our history. But hospitality is no longer a priority in our country, a fact which the ugly presence of Golden Dawn makes clear. A Personal Attack Shaved heads, military uniforms, Nazi chants, Hitler greetings: How should a Greek journalist deal with such people? Should one just ignore them and leave them unmentioned? Should one denounce them and demand that they be banned? One shouldn't forget that they are violent and have perpetrated several attacks against foreigners and leftists. I thought long and hard about how to write about Golden Dawn so that my article was in no way beneficial to the party. On April 12, the daily Kathimerini ran my story under the headline "Banality of Evil." In the piece, I carefully explained why it was impossible to carry on a dialogue with such people and why I thought the neo-Nazi party should disappear from media coverage and be banned. Five days later, an anonymous reply to my article appeared on the Golden Dawn website. It was a 2,500-word-long personal attack in which the fascists recounted my entire career, mocked my alleged foreign roots (I was born in Hamburg) and even, for no apparent reason, mentioned my 13-year-old daughter. The unnamed authors indirectly threatened me as well: "To put it in the mother tongue of foreign Xenia: 'Kommt Zeit, kommt Rat, kommt Attentat!'" In other words, watch your back. Most Greeks believe that Golden Dawn has connections to both the police and to the country's secret service. Nevertheless, I went to the authorities to ask what I should do. I was told that I should be careful. They told me that party thugs could harass me, beat me or terrorize me over the phone. It would be better, they said, if I stopped writing about them. If I wished to react to the threats, they suggested I file a complaint against Golden Dawn's service provider. That, however, would be difficult given that the domain is based somewhere in the United States. Like Weimar Germany A friend told me that I should avoid wearing headphones on the street so that I can hear what is going on around me. My daughter now has nightmares about being confronted by members of Golden Dawn. Three of her classmates belong to the party. The three boys have posted pictures of party events on their Facebook pages. For their profile image, they have chosen the ancient Greek Meandros symbol, which, in the red-on-black manifestation used by Golden Dawn, resembles a swastika. The group's slogans include "Foreigners Out!" and "The Garbage Should Leave the Country!" The fact that immigration has become such an issue in the worst year of the ongoing economic crisis in the country can be blamed on the two parties in government. The Socialist PASOK and the conservative Nea Dimokratia (New Democracy, or ND) are running xenophobic campaigns. ND has said it intends to repeal a law which grants Greek citizenship to children born in Greece to immigrant parents. And cabinet member Michalis Chrysochoidis, of PASOK, has announced "clean up operations" whereby illegal immigrants are to be rounded up in encampments and then deported. When he recently took a stroll through the center of Athens to collect accolades for his commitment to the cause, some called out to him: "Golden Dawn has cleaned up Athens!" Yet, Chrysochoidis is the best loved PASOK politician in his Athens district, in part because of his xenophobic sentiments. His party comrade, Health Minister Andreas Loverdos, is just as popular. Loverdos has warned Greek men not to sleep with foreign prostitutes for fear of contracting HIV and thus endangering the Greek family. High unemployment of roughly 22 percent, a lack of hope, a tendency toward violence and the search for scapegoats: Analyses in the Greek press compare today's Greece with Germany at the end of the Weimar Republic. "We didn't know," said many Germans when confronted with the truth of the Holocaust after Nazi rule came to an end. After elections on May 6, no Greeks should be able to make the same claim.

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Locked Up Abroad is different.

Reality TV is, at its core, about letting viewers revel in the bad decision-making of others: those who speak without thinking, who backstab, who have sex without condoms, who cheat. Frustratingly, though, reality shows—to which I am unapologetically addicted—tend to reward bad behavior, by giving its villains notoriety, spinoffs, opportunities to endorse weight-loss products, a nice sideline in paid interviews with supermarket tabloids, and other D-list rewards.

Locked Up Abroad is different. The National Geographic show, the sixth season of which premiered last week, gives its stars something they wouldn’t get on other reality shows: their comeuppance.

Having debuted in the U.K. (under the title Banged Up Abroad), Locked Up Abroad showcases one person (sometimes a couple) who ends up in prison overseas. Participants fit into one of two categories. The first group are the (largely) innocent: the married missionary couple who were kidnapped in the Philippines by the Islamist group Abu Sayyaf, for instance, or the seemingly goodhearted duo who wanted to help children in Chechnya, but ended up held hostage. These tales of the altruistic and naive can be difficult to watch.

But then there are those who rather deserve what happens to them. Typically these are drug smugglers, and their episodes follow a familiar arc. A young person—they’re almost always young—is bored or in need of cash (usually both). She is desperate or feels invincible (usually both). Someone approaches her and offers a seemingly great deal: an all-expenses-paid, luxurious overseas trip in exchange for a small favor. Sometimes the would-be employer is upfront and admits he needs a drug mule, but downplays the risk; other times, he hints at harmless-sounding illegalities, like bringing back legal goods to beat the export tax. In a few cases, the cover story is painfully thin: Come with me to check out this cool new nail polish technology only available in Thailand, for example. (That woman was in a vulnerable place: She had just been released on bail after killing her partner’s former husband—in self-defense, she claimed.)

The drug smugglers are caught, of course, usually at the airport, and brought to prison. And while a few episodes have taken place in developed countries—Spain, Japan, South Korea—the majority of our anti-heroes end up incarcerated in places with some of the dirtiest and most dangerous penitentiaries in the world.

Take last week’s episode, “From Hollywood to Hell.” (And pardon my spoilers, but this installment is too good not to describe in detail.) In 2001, actor Erik Aude was living the marginal Hollywood dream. An ür-bro, he had played bit parts in Dude, Where’s My Car?(credited as “Musclehead”) and 7^th Heaven (“Boyfriend”) when a gym buddy asked him to go to Turkey to bring back “leather goods.” Aude makes the trip, and though a drug-sniffing dog alerts authorities at the Turkish airport, they find nothing—so Aude feels sure the whole thing is legit. He even recommends that one of his brothers start couriering for his friend. Then, when his brother backs out of a planned trip to Pakistan in 2002, Aude steps in, and shit gets real.

It is difficult to feel sorry for Aude. After his escort dumps him in an Islamabad hotel and warns him not to leave because the area is unsafe for Americans, he doesn’t head to the embassy or the airport. Instead, he goes jogging—and even tries to flirt with girls in headscarves on the street (with disastrous results). And when he is taken to the airport with just one suitcase, he is (he claims) not the least bit suspicious that he might be a drug mule. When a customs official asks him whether his trip was for business or pleasure, he cheeses, “Pleasure is my business.”

Aude’s episode is mind-bogglingly watchable, not least because he—of course!—plays himself in the re-enactment. In his telling, he was a virtual action star: On at least three occasions, he single-handedly fights back dozens of Pakistanis. After he takes out a prison bully, he is hailed a hero. He rejects a reduced sentence because it would require him to plead guilty—and his pride is more valuable than his freedom, he says.

Aside from those truly in the wrong place at the wrong time, the most sympathetic characters of Locked Up Abroad may be the embassy employees called in to assist the suspected smugglers. Inevitably, Locked Up Abroad participants are horrified that the embassies of their homelands—usually English-speaking countries like the U.S., the U.K., or Australia—can’t do more for them. I can just imagine U.S. Embassy workers calling “not it” every time they get word from local authorities about some young American knucklehead who thought he could sneak past security with a bag full of cocaine.

Tonight’s episode is called “The Juggler Smuggler,” and its “hero” is Mark Greening, a “party-loving” drug-runner who knows his latest trip is “doomed” when he doesn’t get his fortune told by “his favorite Gypsy woman.” I can’t wait.

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Low fare airline bmibaby to close

Low fare carrier bmibaby is set to close later this year, threatening the loss of hundreds of jobs and the ending of its flights. The carrier transferred to International Airlines Group, the owners of British Airways, last month, but consultations have now started with unions about its closure in September. The GMB union said it was "devastating" news, especially for the East Midlands, where hundreds of jobs are now threatened with the axe. With bmi Regional, bmibaby transferred to International Airlines Group ownership on completion of the purchase from Lufthansa. IAG has consistently said that bmibaby and bmi Regional are not part of its long-term plans. A statement said: "Progress has been made with a potential buyer for bmi Regional, but so far this has not been possible for bmibaby, despite attempts over many months by both Lufthansa and IAG. Bmibaby has therefore started consultation to look at future options including, subject to that consultation, a proposal to close in September this year." Peter Simpson, bmi interim managing director, said: "We recognise that these are unsettling times for bmibaby employees, who have worked tirelessly during a long period of uncertainty. Bmibaby has delivered high levels of operational performance and customer service, but has continued to struggle financially, losing more than £100 million in the last four years. In the consultation process, we will need to be realistic about our options. "To help stem losses as quickly as possible and as a preliminary measure, we will be making reductions to bmibaby's flying programme from June. We sincerely apologise to all customers affected and will be providing full refunds and doing all we can with other airlines to mitigate the impact of these changes." Jim McAuslan, general secretary of the pilots' union Balpa, said: "This is bad news for jobs. Bmibaby pilots are disappointed and frustrated that, even though there appears to be potential buyers, we are prevented from speaking with them to explore how we can contribute to developing a successful business plan. "The frustration has now turned to anger following the news that Flybe (which is part owned by BA) has moved onto many of these bmibaby routes without any opportunity for staff to look at options and alternatives. Balpa's priority is to protect jobs; and we will use whatever means we can to do so." The changes mean that all bmibaby flights to and from Belfast will cease from June 11, although this will not affect bmi mainline's services to London Heathrow. Bmibaby services from East Midlands to Amsterdam, Paris, Geneva, Nice, Edinburgh, Glasgow and Newquay, and from Birmingham to Knock and Amsterdam, will end on the same date.

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