Global Economy - Printable Version

Global Economy - Printable Version

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Global Economy - Guest - 11-18-2008

Volkswagen Sees `Difficult' Chinese Car Market Next Year as Economy Slows
Volkswagen AG, the biggest overseas carmaker in China, expects a ``difficult'' period in the country in 2009 as a slowing economy and rising job concerns damp demand in the world's second-largest auto market.

Global Economy - Guest - 11-20-2008

Lead Smelters Shut in China on Slumping World Battery Demand,
Xinling Says Chinese lead smelters are idling plants as the effects of slower global economic growth trickle down to battery makers, said Xinling Refining Co., one of the nationâs largest lead makers.

China Plans First Fuel-Price Cut in Two Years to Help Stimulate Economy s China, the world's second-largest energy user after the U.S., is accelerating plans to cut fuel prices for the first time in two years as the nation's economy slows and oil costs fall, the country's top planner said.

linkChina Pledges Faster Labor Mediation as Employment Situation Turns `Grim' China is fast tracking a system to mediate labor disputes and stepping up efforts to hasten court rulings to help minimize unrest as unemployment rises because of the global financial crisis.

All indicators are on dot. China is sliding very fast.

Global Economy - Guest - 11-26-2008

China slashes interest rates as panic spreadsQUOTEThe People's Bank of China cut interest rates by more than 1pc point as the economy crumbles and millions of jobs are predicted to go ahead of Christmas.
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Today, around 500 protesters rioted at the Kai Da toy factory in Dongguan in the Pearl River delta, flipping over a police car and trashing computers in a dispute over payoffs to 80 fired workers. Tens of thousands of factories across the region have already shut their gates. 

Yin Weimin, China's Social Security minister, has revealed that employment is the Communist Party's number one concern in the downturn and said the "situation is critical". Unemployment is expected to rise from 4pc to 4.5pc by the end of the year and anecdotal reports have suggested that 3m people have already been fired in the industrial province of Zhejiang alone.

Two major provinces, Shandong and Hubei, have already responded by banning companies from firing staff without permission from the government

As expected. Here goes China. <!--emo& Big Grin

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<img src='http://www.telegraph.co.uk/telegraph/multimedia/archive/01121/china1_1121284c.jpg' border='0' alt='user posted image' />

Global Economy - Guest - 12-01-2008

Chinaâs November Manufacturing Contracts by RecordQUOTEChinaâs economy is deteriorating more quickly than expected by the nationâs top planning agency, its chairman, Zhang Ping, said last week.

...
Export orders, output and new orders all contracted by the most since the survey began in 2005.
...

Chinaâs export orders declined to 29 in November from 41.4 in October, the survey showed. A reading above 50 reflects an expansion, below 50 a contraction.

The output index fell to 35.5 from 44.3, while the index of new orders dropped to 32.3 from 41.7.

Global Economy - Guest - 12-05-2008

Dubai Speculators Quit as Lending Drought Bursts Desert Bubble QUOTEThe sheikhdom may need help from Abu Dhabi and the U.A.E. to service its debt, according to Moodyâs Investors Service. Dubai borrowed $80 billion to finance its transformation and make up for a lack of natural resources. It has just 4 billion barrels of oil reserves, compared with Abu Dhabiâs 92.2 billion barrels.
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Dubai will meet its debt obligations, he said.

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âThe speculative buyers were more than 50 percent of the market,â said Eckart Woertz, chief economist at the Dubai- based Gulf Research Center. âThey have disappeared.â 

Money for terror will also disappear, only IMF gave breathing space to Pakistan and its terror syndicate.

Global Economy - ramana - 12-05-2008

If PVNR were there he would buy Dubai up and turn it into India west.

Global Economy - ramana - 12-06-2008

x-posted..

QUOTE("ss_roy")I am not sure that most of you comprehend the full extent of this self-inflicted disaster. If you do, I am sorry for repeating it.

The facts-

1] The entire western banking system is insolvent- not illiquid, just plain insolvent. Extensive governement intervention is the only reason banks are still operating in the western world.

2] The mechanisms of self-regulation and credit rating has been shown to be fraudulent. Many financial sectors like IBs, Hedge Funds and even plain insurance companies are f**ked. Inter-institution trust has collapsed. Banks are hoarding money and the effects of credit contraction on non-financial businesses are starting to get ugly.

3] The financial system in the west will never be the same again. To date they have lost 4 times the amount of inflation adjusted money they have made since 1400 AD . The 600 year old business model of western banks is therefore essentially dead.Â Lots of reasons. The reincarnated version of western banks will look a lot like nationalized banks in India.

4] This collapse has destroyed trillions of notional wealth and will destroy trillions more. Pensions in the western world are DOA. Many professions like doctors, lawyers are starting to realize that they will never make the same amount of money again.

5] The financial shell games and ponzi schemes of the last 30 years have come back to haunt them- all at once!The demographic profile of the west is not good. They have too many baby boomers who had hoped to retire but now find themselves unable to retire.

6] Don't believe westerners who say "it will come back". That is PR and wishful thinking. Read more about the real causes of this crisis and why it will essentially end the dominance of the west.

7] The west has not yet officially capitulated, but it will have to..

What it means for India.

1] China is toast! Unless they pull a rabbit out their behinds, their progress will start to unwind. They built an economy that was too dependent on exports, and they discouraged their citizens from consuming their own stuff. The debt based export market has collapsed, and local consumption has not yet caught up with production. Expect massive job losses and widespread civil unrest.

2] Pakistan is DOA. Hopefully they (fundies) will pull of aÂ stupid stunt with loose nukes in the west. It would be very desirable if the US nuked them in retaliation.

3] The main leverage of the west over 'colored' countries like India is gone! They need you much more than you need them. But you guys have to realize that and take advantage of this calamity. Expect them to line up and sell you high tech stuff- nuclear reactors, missiles, avionics, aircrafts, technology- anything you desire. Their socioeconomic system requires new consumers, they are old and tapped out- you are not.

3] If India plays it's cards right, it could position itself as the biggest growth market in the world. We still have well run and transparent banks and people who do not save too much like the chinese or too little like the americans.

4] I hope that any new government in India (2009?) will not be full of geriatrics. Hopefully, they will also stop being obstructionist, petty and let people become rich. I have always believed that politicians and bureaucrats in India conspire to hinder progress andÂ keep people poor.

I could write in much greater detail, but it might make it harder to grasp the big picture.

If could post links to blogs that have been following this story for the last 3 years, if you want..

Global Economy - dhu - 12-06-2008

QUOTE("ss_roy")3] The financial system in the west will never be the same again. To date they have lost 4 times the amount of inflation adjusted money they have made since 1400 AD . The 600 year old business model of western banks is therefore essentially dead.Â Lots of reasons.
...

I could write in much greater detail, but it might make it harder to grasp the big picture.

If could post links to blogs that have been following this story for the last 3 years, if you want..

So the entire financial gains from colonialism have been wiped away and only the brazen land grabs are more permanent . Is that right. Please ask him to provide full details.

Global Economy - Guest - 12-06-2008

QUOTESo the entire financial gains from colonialism have been wiped away and only the brazen land grabs are more permanent . Is that right. Please ask him to provide full details. 
No, this is commie view point who are thinking end of capitalism.
Major losers are Arab, China and EU who had heavily invested in US after 1997 boom and bust and again after 9/11.. They had invested in houses, buildings, consumer stores etc. Building, goods are still in US but only old owners have declared bankruptcy, so investors lost their money but US banks can resell them. And they will with cheaper rate. Every Jack and Harry in poor neighborhood watch NFL on 56" plasma TV which he bought paying Zero down payment and sit on sofa which he bought paying zero down payment, his actual payment just started and he had already declared bankruptcy, now house where he is sitting and watching NFL is up for foreclosure so he is removing every single copper and fitting and even toilets for his bar visit.

Gas price is down, which it self will kick start economy from small low paying jobs to higher up. Salaries will be realistic. But I don't see major change. Those who are taking bailout have to follow restrictions that they can't outsource job, and they should create job in US. Automobile Industries who were planning to open factories in China or India have to wait, because bail out money is not for China or Indian workers. Unions are already renegotiating new terms but I have little hope there because they elected Obama, with democrats control Congress and President but Senate is still open for boxing match.

US is replacing its population, they are in no danger. They are still attracting best and brightest of world. This is just a correction of over heated which became corrupt.
In my area, people are still buying 10-15 million dollar houses and prices had gone up 4% in last 2 month. Yes, rich guys stock money is back in house and in place of keeping money in bank, how about having expensive house not one but two in same town. I still hope price in my area should slide back, but this place makes millionaires in much higher rate then any place on earth. <!--emo& Sad

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Global Economy - Guest - 12-09-2008

Chinaâs Exports Shrink, Output Cools, Adviser SaysQUOTEDec. 9 (Bloomberg) -- Chinaâs exports shrank last month and industrial-production growth cooled, Fan Gang, an adviser to the Peopleâs Bank of China, said today.

âThings are not so good,â Fan said at a forum in Beijing. âNovember figures will come out soon, and industrial growth will be something around 5 percent and export growth will be negative.â 

A collapse from Octoberâs 19.2 percent export growth would add pressure on policy makers meeting in Beijing this week to do more to sustain the expansion of the worldâs fourth-biggest economy. The government has already unveiled a 4 trillion yuan ($582 billion) stimulus package and cut interest rates by the most in 11 years as a global recession cuts demand for the nationâs toys, textiles and electronics.

âIt doesnât really matter what China does to try to revive exports, they are going to be bad for the foreseeable future,â said Paul Cavey, an economist with Macquarie Securities in Hong Kong. âThe key now is what can be done to boost domestic demand.â

Chinaâs exports last fell in June 2001.
............

Global Economy - Guest - 12-09-2008

Merrill Sells 5% Stake in India's Religare: Economic Times Link

Global Economy - Guest - 12-11-2008

Russians Buy Jewelry, Hoard Dollars as Ruble Plunges QUOTEWith the specter of the 1998 debt default and devaluation in mind, Russians withdrew 355 billion rubles ($13 billion), or 6 percent of all savings, from their accounts in October, the most since the central bank started posting the data two years ago. Foreign-currency deposits rose 11 percent. 

Grim trend in Russia. Oil price at $20 can destroy lot of oil based economy.

Global Economy - Guest - 12-16-2008

Madoff Arrest Forces Nonprofitâs Closing, Stirs Worry at Others 
When Jews rip off other Jews. This disease is still far away among common Indian origin American except FOSA, FOIL, NRI_SAI, Poddar family, Vashnav center who tries to rip off gullible Indians.

European investors lose billions in Madoff's Ponzi schemeQUOTESantander, the eurozone's largest bank by market value, said its clients had an exposure of 2.33 billion euros ($3.1 billion) to Madoff's investment funds, mainly through its Optimal Strategic US Equity fund.
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The Journal reported that BNP, France's largest bank by market value, said it could lose as much as 350 million euros as a result of the alleged fraud.
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In a letter posted on its website, the Swiss private bank Reichmuth and Co said its clients had an exposure of some 385 million Swiss francs to Madoff funds.

The bank said Reichmuth Matterhorn, a fund that invests in other hedge funds, faced a potential loss of about 8.6 per cent on its exposure to Madoff. That amount represented about 3.5 per cent of the 11 billion Swiss francs Reichmuth & Co. has under management, the bank said, the Journal reported.

Global Economy - Guest - 12-23-2008

Madoff Fund Operator De La Villehuchet Found Dead in New YorkQUOTEThe death appeared to be a suicide, he said.

De la Villehuchet, 65, was a founding partner and chief executive officer of Access International Advisors, according to a marketing document. Access invested $1.4 billion with Madoff, who was arrested on Dec. 11 for allegedly running a $50 billion Ponzi scheme.

Global Economy - Guest - 12-30-2008

Even though various governments have infused around $10 trillion by way of bailout packages and lowered interest rates to near zero levels,
the world economy has failed to emerge from the clutches of recession. In fact, the situation is turning worse.

History shows that war always follows slowdown or recession. And given the somber geo-political situation across the globe, some economists and analysts feels that the world may well be headed in this direction.

After the 1797's economic deflation, there was war between US and France from 1798 to 1800. The war between US and Great Britain in 1812 followed the depression in 1807-1808. The long depression of 1873-1879 paved the way for war between US and Spain and the First World War which lasted till 1918.
The Second World War was followed by the Great Depression of 1929-1939. The early 1990's recession again put US on the war front against the Iraq. History shows that most of the wars have followed the economic crisis-- there are very few occasions when world faced slowdown or recession after the wars. Economy faced a recession after the First World War which lasted for 3 years from 1918-1921.

In the Great Depression, Herbert Hoover--then US president--attempted to maintain labor rates at 1929 levels, causing massive unemployment. The economy stagnated, with labor rates failing to adjust to levels where production could be refurbished.

The world was only rescued by the advent of World War II, with increased war production and mobilization-- solving the unemployment problem. The prevailing conditions are no different from that in 1920-1930's. The credit crunch after the sub-prime problem has literally put the global economy on the verge of depression which is on the lines of 1930's.

Kevin Peter, an economist at Real World Advisory, says that âpsychologists such as E.F.M. Durban and John Bowlby have argued that human beings are inherently violent. While this violence is repressed in normal society, it needs the occasional outlet provided by war. This mixes with other notions such as displacement, where a person transfers their grievances into bias and hatred against other ethnic groups, racial groups, religions, nations or ideologies.â However, a paradigm shift in global political scenario could be a barrier to war-like situation. According to Saugata Bhattacharya, vice president â business and economic research, Axis Bank, âAlthough war as a solution to economic revival is an interesting hypothesis under the present context, but there is no likelihood of war. Armed struggle is no solution of economic crisis in the current time.â

Bhattacharya says there could be export restrictions by individual countries to stimulate domestic economy.

Shanto Ghosh, director â principal economist, Deloitte and Haskins, concurred, saying, âtrade restrictions are very much possible. Even China (an export oriented economy), has felt the urge of pumping up domestic demand and hence changing focus of their economy.â

Meanwhile, rising tensions between India and Pakistan have created a war-like situation between the neighbouring countries, and attracted world attention.
However, defence analyst Zubin Pandit believes that âalthough tension between India and Pakistan over the Mumbai attack is intensifying, it is unlikely that these countries will go for war as both are well equipped with advanced armaments such as nuclear weapons. But embargo on exports and other trades might create havoc in near time.â

This is already being seen, as the government of Pakistan on Thursday sanctioned embargo on Indian exports and is also planning to ban India's goods going to Afghanistan via their territory.

âAn export ban by Pakistan on commodities like oil and gas hardly leaves any impact on our economy. The country, which is on brink of economic collapse, assumes no importance,â feels Deloitteâs Ghosh.

Source - economic times

Global Economy - Guest - 01-03-2009

The Next World Order
QUOTEâWith all this, how did you become the second-fastest growing economy in the world? Chinaâs leaders fear the day when Indiaâs government will get its act together.â

The answer to his question may lie in a common saying among Indians that âour economy grows at night when the government is asleep.â As if to illustrate this, the Mumbai stock market rose in the period after the terrorist attacks. Two weeks later, in several state elections, incumbents were ousted over economic issues, not security.

All this baffled my Chinese friend, and undoubtedly many of his countrymen, whose own success story has been scripted by an efficient state. They are uneasy because their chief ally, Pakistan, is consistently linked to terrorism while across the border Indiaâs economy keeps rising disdainfully. It puzzles them that the anger in India over the Mumbai attacks is directed against Indian politicians rather than Muslims or Pakistan. 


QUOTEThe global financial crisis has definitely affected Indiaâs growth, and it will be down to perhaps 7 percent this year from 8.7 percent in 2007. According to my friend, China is hurting even more. What really perplexes the Chinese, he said, is that scores of nations have engaged in the same sorts of economic reforms as India, so why is it that itâs the Indian economy that has become the developing worldâs second best? The speed with which India is creating world-class companies is also a shock to the Chinese, whose corporate structure is based on state-owned and foreign companies.

I have no satisfactory explanation for all this, but I think it may have something to do with Indiaâs much-reviled caste system. Vaishyas, members of the merchant caste, who have learned over generations how to accumulate capital, give the nation a competitive advantage. Classical liberals may be right in thinking that commerce is a natural trait, but it helps if there is a devoted group of risk-taking entrepreneurs around to take advantage of the opportunity. Not surprisingly, Vaishyas still dominate the Forbes list of Indian billionaires.

Global Economy - Guest - 01-04-2009

Chinese Manufacturing Contracts as Exports DeclineQUOTEChinaâs growth may have slipped to 5.5 percent last quarter, the weakest pace in at least 15 years, as recessions in the U.S., Europe and Japan cut demand for exports, according to Shanghai- based Industrial Bank Co. The government has drawn up policies to support the steel and automobile industries through the slowdown, Premier Wen Jiabao said on Jan. 2.

âThe December index shows Chinaâs economy continues to decline, but there are some signs of bottoming out,â said Zhang Liqun, an economist at the State Council Development and Research Center. âAs macroeconomic policies start to take effect, the pace of the slowdown will stabilize.â 

A measure of export orders rose to 30.7 from 29 in November. The output index jumped to 39.4 from 35.5. The new-order index rose to 37.3 from 32.3. Novemberâs levels were the lowest for each of those indexes since the survey began in 2005.

Global Economy - Guest - 01-08-2009

U.S. âIrresponsibleâ to Blame Savings for Crisis, Xinhua Says QUOTEJan. 8 (Bloomberg) -- The view expressed by some U.S. officials that high savings rates in China and oil exporting nations helped trigger the global financial crisis is âirresponsible and untenable,â Chinaâs official Xinhua News Agency said in a commentary late yesterday.

Advocates say high savings rates have pushed down investment yields in recent years, prompting investors in developed economies to make riskier investments, Xinhua said.

This is âillogicalâ because high savings rates in emerging markets were not a âreason for developed countries to loosen financial regulation and look on arms folded as financial institutions develop new derivatives and let financial bubbles balloon,â the commentary said.

Chinaâs savings rate is part of a cultural tradition that values the âvirtues of diligence and thrift,â Xinhua said. Previous world and regional financial crises have shown that the nationâs savings rate has âno causal relationship with the crisis,â Xinhua added.
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This is very true. Indian and Chinese are very good in saving. Western societies are just reverse.

Global Economy - Guest - 01-08-2009

Guangdong Province's 2008 Economic Growth Slowed Almost a Third to 10.1% QUOTElink
Guangdong province, Chinaâs biggest export base, saw its economic expansion cool to 10.1 percent last year, 4.6 percentage points slower than in 2007, the provincial Vice Governor Huang Longyun said today.

Some of the provinceâs economic indicators âdeclined seriouslyâ last year, Huang told a press briefing in Beijing. Export growth slowed to 5.6 percent from 22.3 percent in 2007, and industrial output climbed 12.8 percent, down 5.2 percentage points.

The Pearl River Delta manufacturing hub, which straddles the province, is facing its worst time since the Asian Financial Crisis a decade ago, he said.

The number of businesses that shut down or de-registered in 2008 rose to 62,400, 4,739 more than the previous year, concentrated among small companies and traditional industries, Huang said. Still, the province added a net 32,800 companies last year because more businesses opened, he said.

International Visitor Arrivals to China Drop for First Time in Five Years 
The number of international visitors to China, the worldâs third-largest tourist destination, fell for the first time in five years in 2008, because of the global economic slump and government limits during the Olympic Games.

Global Economy - Guest - 01-08-2009

QUOTEChina Will Encourage Foreign-Currency Debt, May Allow Issue of Junk Bonds 
China will encourage sales of foreign currency debt and may allow small- and medium-sized companies to sell junk bonds in an effort to develop domestic capital markets. 
Stay away from anything from China for now.