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Global Economy - Guest - 02-10-2009
<b>link</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Congressman Kanjorski is the Chairman of the Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. This is the original C-SPAN broadcast that took place on Thursday, January 27, 2009. The entire video is 32 minutes.
Congressman Kanjorski explains how 550 billion dollars were drained from money market accounts in the United States during September 2008 in<span style='color:red'> one hour</span>.<!--QuoteEnd--><!--QuoteEEnd-->
Transcript - link
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->âOn Thursday Sept 15, 2008 at roughly 11 AM The Federal Reserve noticed a tremendous draw down of money market accounts in the USA to the tune of<span style='color:red'> $550 Billion dollars in a matter of an hour or two.</span>
<b>Money was being removed electronically.</b>
<b>The treasury tried to help with $150 Billion.</b>
But could not stem the tide.
It was an electronic run on the banks
The treasury intervened but had they not closed down the accounts they estimated that by 2 PM that afternoon. Within 3 hours. $5.5 Trillion would have been withdrawn and collapsed and within 24 hours the world economy.â
<!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - Guest - 02-11-2009
<b>Chinaâs January Exports Fall 17.5%, Most in Almost 13 Years</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Chinaâs economic slide has already cost the jobs of 20 million migrant workers, adding pressure on the government to boost consumption and expand a 4 trillion yuan ($585 billion) stimulus package.<!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - Guest - 02-13-2009
<b>Indian Rupee to Drop 10% to Record Low, HSBC Predicts</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Feb. 13 (Bloomberg) -- Indiaâs rupee will weaken almost 10 percent to a record low of 54 to the dollar by the end of the year as the worldwide credit crisis curbs foreign direct investment, HSBC Holdings Plc said.
......<!--QuoteEnd--><!--QuoteEEnd-->
Indian Govt is blindly pumping money in banks and public sector and will cut defense budget just to win election, which will create fake/unsustanible growth.
Global Economy - Guest - 02-16-2009
By next year, US debt will be equivalent to rest of world GDP excluding China.
What will happen if US comes near to debt default?
Are they going to repeat FDR strict policy including The Gold Confiscation Of April 5, 1933, Presidential Executive Order 6102 ?
Current situation will reduce US power to twist muscles or buy people to get work done.
Who will come out stronger in next two years?
Global Economy - Guest - 02-16-2009
<b>Crisis raises risk of social unrest in Asia</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->In China, where the government grapples with thousands of violent protests annually, focus is on instability that could arise after millions of migrant workers who have lost their jobs in the cities return to their rural hometowns. Beijing, always fearful of social unrest, said at least 20 million migrant workers had been left jobless so far, indicating the figure could be even higher. The Communist Party's mouthpiece, the People's Daily, said a top national public security committee had identified jobless migrants as a key area of concern. "The flood of unemployed migrants poses big challenges to social stability in the countryside," said Professor Ren Yuan, a labour, migration and population studies expert at Shanghai's Fudan University. "If they cannot find work in rural areas the situation in the countryside will further deteriorate." Of particular concern are large numbers of younger migrants whose connection to rural lifestyles has been severed, Ren said. "If the second generation loses jobs in the city and can't find work in rural areas, and can't or don't want to become farmers, then they are left idle, which certainly increases social instability in rural areas." In Bangladesh, analysts differed on whether the global economic crisis is a security threat<!--QuoteEnd--><!--QuoteEEnd-->
They have no idea how Indians will react ?
Global Economy - Guest - 02-16-2009
<b>Failure to save East Europe will lead to worldwide meltdown</b>
The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point.
Global Economy - Guest - 02-17-2009
<b>Banks Face Downgrades on Eastern European Losses, Moodyâs Says</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Feb. 17 (Bloomberg) -- Austrian, Swedish and other banks with subsidiaries in eastern European may face rating downgrades as economies in the region deteriorate, according to Moodyâs Investors Service. <!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - Guest - 02-17-2009
<b>China Loans Diverted to Stocks, Fueling Rally, Shenyin Says</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Chinese companies may be using record bank lending to invest in stocks, fueling a rally thatâs made the benchmark Shanghai Composite Index the worldâs best performer this year, according to Shenyin & Wanguo Securities Co.
....
Part of the liquidity flowing into the stock market could be from companies using borrowed funds to invest in the stock market instead of working requirements,â<!--QuoteEnd--><!--QuoteEEnd-->
Should I call this <b>Suicide </b>. Well, when someone will pull rug as happened in US and India, we will hear mass suicide in China.
Global Economy - Guest - 02-18-2009
China's Charter 08
Published December 10, 2008
Over 2000 Chinese citizens, including government officials and prominent intellectuals, signed this statement calling for political and human rights reforms and an end to one-party rule. The statement was released on December 10, 2008, the anniversary of the Universal Declaration of Human Rights. It was translated by Perry Link and published in the New York Review of Books.
I. FOREWORD
A hundred years have passed since the writing of China's first constitution. 2008 also marks the sixtieth anniversary of the promulgation of the Universal Declaration of Human Rights, the thirtieth anniversary of the appearance of the Democracy Wall in Beijing, and the tenth of China's signing of the International Covenant on Civil and Political Rights. We are approaching the twentieth anniversary of the 1989 Tiananmen massacre of pro-democracy student protesters. The Chinese people, who have endured human rights disasters and uncountable struggles across these same years, now include many who see clearly that freedom, equality, and human rights are universal values of humankind and that democracy and constitutional government are the fundamental framework for protecting these values.
By departing from these values, the Chinese government's approach to "modernization" has proven disastrous. It has stripped people of their rights, destroyed their dignity, and corrupted normal human intercourse. So we ask: Where is China headed in the twenty-first century? Will it continue with "modernization" under authoritarian rule, or will it embrace universal human values, join the mainstream of civilized nations, and build a democratic system? There can be no avoiding these questions.
The shock of the Western impact upon China in the nineteenth century laid bare a decadent authoritarian system and marked the beginning of what is often called "the greatest changes in thousands of years" for China. A "self-strengthening movement" followed, but this aimed simply at appropriating the technology to build gunboats and other Western material objects. China's humiliating naval defeat at the hands of Japan in 1895 only confirmed the obsolescence of China's system of government. The first attempts at modern political change came with the ill-fated summer of reforms in 1898, but these were cruelly crushed by ultraconservatives at China's imperial court. With the revolution of 1911, which inaugurated Asia's first republic, the authoritarian imperial system that had lasted for centuries was finally supposed to have been laid to rest. But social conflict inside our country and external pressures were to prevent it; China fell into a patchwork of warlord fiefdoms and the new republic became a fleeting dream.
The failure of both "self- strengthening" and political renovation caused many of our forebears to reflect deeply on whether a "cultural illness" was afflicting our country. This mood gave rise, during the May Fourth Movement of the late 1910s, to the championing of "science and democracy." Yet that effort, too, foundered as warlord chaos persisted and the Japanese invasion [beginning in Manchuria in 1931] brought national crisis.
Victory over Japan in 1945 offered one more chance for China to move toward modern government, but the Communist defeat of the Nationalists in the civil war thrust the nation into the abyss of totalitarianism. The "new China" that emerged in 1949 proclaimed that "the people are sovereign" but in fact set up a system in which "the Party is all-powerful." The Communist Party of China seized control of all organs of the state and all political, economic, and social resources, and, using these, has produced a long trail of human rights disasters, including, among many others, the Anti-Rightist Campaign (1957), the Great Leap Forward (1958â1960), the Cultural Revolution (1966â1969), the June Fourth [Tiananmen Square] Massacre (1989), and the current repression of all unauthorized religions and the suppression of the weiquan rights movement [a movement that aims to defend citizens' rights promulgated in the Chinese Constitution and to fight for human rights recognized by international conventions that the Chinese government has signed]. During all this, the Chinese people have paid a gargantuan price. Tens of millions have lost their lives, and several generations have seen their freedom, their happiness, and their human dignity cruelly trampled.
During the last two decades of the twentieth century the government policy of "Reform and Opening" gave the Chinese people relief from the pervasive poverty and totalitarianism of the Mao Zedong era, and brought substantial increases in the wealth and living standards of many Chinese as well as a partial restoration of economic freedom and economic rights. Civil society began to grow, and popular calls for more rights and more political freedom have grown apace. As the ruling elite itself moved toward private ownership and the market economy, it began to shift from an outright rejection of "rights" to a partial acknowledgment of them.
In 1998 the Chinese government signed two important international human rights conventions; in 2004 it amended its constitution to include the phrase "respect and protect human rights"; and this year, 2008, it has promised to promote a "national human rights action plan." Unfortunately most of this political progress has extended no further than the paper on which it is written. The political reality, which is plain for anyone to see, is that China has many laws but no rule of law; it has a constitution but no constitutional government. The ruling elite continues to cling to its authoritarian power and fights off any move toward political change.
The stultifying results are endemic official corruption, an undermining of the rule of law, weak human rights, decay in public ethics, crony capitalism, growing inequality between the wealthy and the poor, pillage of the natural environment as well as of the human and historical environments, and the exacerbation of a long list of social conflicts, especially, in recent times, a sharpening animosity between officials and ordinary people.
As these conflicts and crises grow ever more intense, and as the ruling elite continues with impunity to crush and to strip away the rights of citizens to freedom, to property, and to the pursuit of happiness, we see the powerless in our societyâthe vulnerable groups, the people who have been suppressed and monitored, who have suffered cruelty and even torture, and who have had no adequate avenues for their protests, no courts to hear their pleasâbecoming more militant and raising the possibility of a violent conflict of disastrous proportions. The decline of the current system has reached the point where change is no longer optional.
II. OUR FUNDAMENTAL PRINCIPLES
This is a historic moment for China, and our future hangs in the balance. In reviewing the political modernization process of the past hundred years or more, we reiterate and endorse basic universal values as follows:
Freedom. Freedom is at the core of universal human values. Freedom of speech, freedom of the press, freedom of assembly, freedom of association, freedom in where to live, and the freedoms to strike, to demonstrate, and to protest, among others, are the forms that freedom takes. Without freedom, China will always remain far from civilized ideals.
Human rights. Human rights are not bestowed by a state. Every person is born with inherent rights to dignity and freedom. The government exists for the protection of the human rights of its citizens. The exercise of state power must be authorized by the people. The succession of political disasters in China's recent history is a direct consequence of the ruling regime's disregard for human rights.
Equality. The integrity, dignity, and freedom of every personâregardless of social station, occupation, sex, economic condition, ethnicity, skin color, religion, or political beliefâare the same as those of any other. Principles of equality before the law and equality of social, economic, cultural, civil, and political rights must be upheld.
Republicanism. Republicanism, which holds that power should be balanced among different branches of government and competing interests should be served, resembles the traditional Chinese political ideal of "fairness in all under heaven." It allows different interest groups and social assemblies, and people with a variety of cultures and beliefs, to exercise democratic self-government and to deliberate in order to reach peaceful resolution of public questions on a basis of equal access to government and free and fair competition.
Democracy. The most fundamental principles of democracy are that the people are sovereign and the people select their government. Democracy has these characteristics: (1) Political power begins with the people and the legitimacy of a regime derives from the people. (2) Political power is exercised through choices that the people make. (3) The holders of major official posts in government at all levels are determined through periodic competitive elections. (4) While honoring the will of the majority, the fundamental dignity, freedom, and human rights of minorities are protected. In short, democracy is a modern means for achieving government truly "of the people, by the people, and for the people."
Constitutional rule. Constitutional rule is rule through a legal system and legal regulations to implement principles that are spelled out in a constitution. It means protecting the freedom and the rights of citizens, limiting and defining the scope of legitimate government power, and providing the administrative apparatus necessary to serve these ends.
III. WHAT WE ADVOCATE
Authoritarianism is in general decline throughout the world; in China, too, the era of emperors and overlords is on the way out. The time is arriving everywhere for citizens to be masters of states. For China the path that leads out of our current predicament is to divest ourselves of the authoritarian notion of reliance on an "enlightened overlord" or an "honest official" and to turn instead toward a system of liberties, democracy, and the rule of law, and toward fostering the consciousness of modern citizens who see rights as fundamental and participation as a duty. Accordingly, and in a spirit of this duty as responsible and constructive citizens, we offer the following recommendations on national governance, citizens' rights, and social development:
1. A New Constitution. We should recast our present constitution, rescinding its provisions that contradict the principle that sovereignty resides with the people and turning it into a document that genuinely guarantees human rights, authorizes the exercise of public power, and serves as the legal underpinning of China's democratization. The constitution must be the highest law in the land, beyond violation by any individual, group, or political party.
2. Separation of Powers. We should construct a modern government in which the separation of legislative, judicial, and executive power is guaranteed. We need an Administrative Law that defines the scope of government responsibility and prevents abuse of administrative power. Government should be responsible to taxpayers. Division of power between provincial governments and the central government should adhere to the principle that central powers are only those specifically granted by the constitution and all other powers belong to the local governments.
3. Legislative Democracy. Members of legislative bodies at all levels should be chosen by direct election, and legislative democracy should observe just and impartial principles.
4. An Independent Judiciary. The rule of law must be above the interests of any particular political party and judges must be independent. We need to establish a constitutional supreme court and institute procedures for constitutional review. As soon as possible, we should abolish all of the Committees on Political and Legal Affairs that now allow Communist Party officials at every level to decide politically sensitive cases in advance and out of court. We should strictly forbid the use of public offices for private purposes.
5. Public Control of Public Servants. The military should be made answerable to the national government, not to a political party, and should be made more professional. Military personnel should swear allegiance to the constitution and remain nonpartisan. Political party organizations must be prohibited in the military. All public officials including police should serve as nonpartisans, and the current practice of favoring one political party in the hiring of public servants must end.
6. Guarantee of Human Rights. There must be strict guarantees of human rights and respect for human dignity. There should be a Human Rights Committee, responsible to the highest legislative body, that will prevent the government from abusing public power in violation of human rights. A democratic and constitutional China especially must guarantee the personal freedom of citizens. No one should suffer illegal arrest, detention, arraignment, interrogation, or punishment. The system of "Reeducation through Labor" must be abolished.
7. Election of Public Officials. There should be a comprehensive system of democratic elections based on "one person, one vote." The direct election of administrative heads at the levels of county, city, province, and nation should be systematically implemented. The rights to hold periodic free elections and to participate in them as a citizen are inalienable.
8. RuralâUrban Equality. The two-tier household registry system must be abolished. This system favors urban residents and harms rural residents. We should establish instead a system that gives every citizen the same constitutional rights and the same freedom to choose where to live.
9. Freedom to Form Groups. The right of citizens to form groups must be guaranteed. The current system for registering nongovernment groups, which requires a group to be "approved," should be replaced by a system in which a group simply registers itself. The formation of political parties should be governed by the constitution and the laws, which means that we must abolish the special privilege of one party to monopolize power and must guarantee principles of free and fair competition among political parties.
10. Freedom to Assemble. The constitution provides that peaceful assembly, demonstration, protest, and freedom of expression are fundamental rights of a citizen. The ruling party and the government must not be permitted to subject these to illegal interference or unconstitutional obstruction.
11. Freedom of Expression. We should make freedom of speech, freedom of the press, and academic freedom universal, thereby guaranteeing that citizens can be informed and can exercise their right of political supervision. These freedoms should be upheld by a Press Law that abolishes political restrictions on the press. The provision in the current Criminal Law that refers to "the crime of incitement to subvert state power" must be abolished. We should end the practice of viewing words as crimes.
12. Freedom of Religion. We must guarantee freedom of religion and belief, and institute a separation of religion and state. There must be no governmental interference in peaceful religious activities. We should abolish any laws, regulations, or local rules that limit or suppress the religious freedom of citizens. We should abolish the current system that requires religious groups (and their places of worship) to get official approval in advance and substitute for it a system in which registry is optional and, for those who choose to register, automatic.
13. Civic Education. In our schools we should abolish political curriculums and examinations that are designed to indoctrinate students in state ideology and to instill support for the rule of one party. We should replace them with civic education that advances universal values and citizens' rights, fosters civic consciousness, and promotes civic virtues that serve society.
14. Protection of Private Property. We should establish and protect the right to private property and promote an economic system of free and fair markets. We should do away with government monopolies in commerce and industry and guarantee the freedom to start new enterprises. We should establish a Committee on State-Owned Property, reporting to the national legislature, that will monitor the transfer of state-owned enterprises to private ownership in a fair, competitive, and orderly manner. We should institute a land reform that promotes private ownership of land, guarantees the right to buy and sell land, and allows the true value of private property to be adequately reflected in the market.
15. Financial and Tax Reform. We should establish a democratically regulated and accountable system of public finance that ensures the protection of taxpayer rights and that operates through legal procedures. We need a system by which public revenues that belong to a certain level of governmentâcentral, provincial, county or localâare controlled at that level. We need major tax reform that will abolish any unfair taxes, simplify the tax system, and spread the tax burden fairly. Government officials should not be able to raise taxes, or institute new ones, without public deliberation and the approval of a democratic assembly. We should reform the ownership system in order to encourage competition among a wider variety of market participants.
16. Social Security. We should establish a fair and adequate social security system that covers all citizens and ensures basic access to education, health care, retirement security, and employment.
17. Protection of the Environment. We need to protect the natural environment and to promote development in a way that is sustainable and responsible to our descendants and to the rest of humanity. This means insisting that the state and its officials at all levels not only do what they must do to achieve these goals, but also accept the supervision and participation of nongovernmental organizations.
18. A Federated Republic. A democratic China should seek to act as a responsible major power contributing toward peace and development in the Asian Pacific region by approaching others in a spirit of equality and fairness. In Hong Kong and Macao, we should support the freedoms that already exist. With respect to Taiwan, we should declare our commitment to the principles of freedom and democracy and then, negotiating as equals and ready to compromise, seek a formula for peaceful unification. We should approach disputes in the national-minority areas of China with an open mind, seeking ways to find a workable framework within which all ethnic and religious groups can flourish. We should aim ultimately at a federation of democratic communities of China.
19. Truth in Reconciliation. We should restore the reputations of all people, including their family members, who suffered political stigma in the political campaigns of the past or who have been labeled as criminals because of their thought, speech, or faith. The state should pay reparations to these people. All political prisoners and prisoners of conscience must be released. There should be a Truth Investigation Commission charged with finding the facts about past injustices and atrocities, determining responsibility for them, upholding justice, and, on these bases, seeking social reconciliation.
China, as a major nation of the world, as one of five permanent members of the United Nations Security Council, and as a member of the UN Council on Human Rights, should be contributing to peace for humankind and progress toward human rights. Unfortunately, we stand today as the only country among the major nations that remains mired in authoritarian politics. Our political system continues to produce human rights disasters and social crises, thereby not only constricting China's own development but also limiting the progress of all of human civilization. This must change, truly it must. The democratization of Chinese politics can be put off no longer.
Accordingly, we dare to put civic spirit into practice by announcing Charter 08. We hope that our fellow citizens who feel a similar sense of crisis, responsibility, and mission, whether they are inside the government or not, and regardless of their social status, will set aside small differences to embrace the broad goals of this citizens' movement. Together we can work for major changes in Chinese society and for the rapid establishment of a free, democratic, and constitutional country. We can bring to reality the goals and ideals that our people have incessantly been seeking for more than a hundred years, and can bring a brilliant new chapter to Chinese civilization.
http://www.cfr.org/publication/18073/chinas_charter_08.html
Global Economy - Capt M Kumar - 02-19-2009
âChina and India also have a lot of trade between themselves â it is more important for India than it is for China, relatively speaking. The Chinese are already the second largest trading partner of India, will probably overtake the United States within two or three years. So, the Chinese and the Indian economic picture is, relatively speaking, less negative news [for the world]. But, I wouldnât draw from that a conclusion that China and India will drive the world economy.â
http://www.hindu.com/2009/02/19/stories/2009021955072100.htm
Global Economy - Guest - 02-27-2009
<b>Indiaâs Economy Expands 5.3%; Slowest Pace Since 2003 </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Standard & Poorâs said Feb. 24 that the nationâs credit rating may be cut to junk as government debt is reaching a level thatâs ânot sustainable.â S&P reduced Indiaâs rating outlook to negative from stable.
Mukherjee said the rating companyâs move was ânot unexpected,â adding that the global downturn ârequires extraordinary steps from the government.â
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Global Economy - Guest - 02-27-2009
<b>Euro Area Risks Breakup on Bank Woes, Subprime Bear Hayman Says</b>
Global Economy - dhu - 02-28-2009
<b>Next Wave of Banking Crisis to come from Eastern Europe </b>
by F. William Engdahl
Global Economy - Guest - 03-02-2009
<!--QuoteBegin-dhu+Feb 28 2009, 07:39 AM-->QUOTE(dhu @ Feb 28 2009, 07:39 AM)<!--QuoteEBegin--><b>Next Wave of Banking Crisis to come from Eastern Europe </b>
by F. William Engdahl
[right][snapback]95028[/snapback][/right]<!--QuoteEnd--><!--QuoteEEnd-->
As I am predicting, existance of EU will be big ?
German Destuche Bank will seek major bailout. Germany and France need money to keep their own crowd quiet and happy.
<b>Now watch for US Bond market to collapse.</b>
For India, its a good news that election will start next month, that will be best stimlus for India, all black money hidden in Swiss bank and Caymen Inland will be back in India.
Global Economy - Guest - 03-02-2009
<b>Buffett on his mistakes & likely successor Ajit Jain</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The Oracle, as Buffett is known, noted that a major mistake was buying <b>ConocoPhillips shares when oil and gas prices were near their peak</b>.
"I, in no way anticipated, the dramatic fall in energy prices that occurred in the last half of the year. . . Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars," he said.<!--QuoteEnd--><!--QuoteEEnd-->
I just can't believe how these people can even think that any economy can survive gas price above $60, it is not sustainable. Above $100 is a killer of world. $146 had started Global depression.
Buffet 's another suggestion tax rich , another dumb idea.
Even now OPEC is trying to be jackass and looking for price hike and Obama had decided not to drill or build Nuclear Plants or refineries in US. Even slight sign of economy recovery will be countered by increase oil price and that will stall recovery engine. Pumping money and towing environmentalist will prolong this recession which is now entering into depression.
Global Economy - Guest - 03-03-2009
<b>Economic crisis threatens the idea of one Europe</b>
<b>EU Rejects a Rescue of Faltering East Europe</b>
<b>New 'Iron Curtain' will split EU's rich and poor</b>
Global Economy - Guest - 03-04-2009
The back story ...by James Lieber...an article every one should read.
http://www.villagevoice.com/content/printVersion/850296
<b>What Cooked the World's Economy?</b>
It wasn't your overdue mortgage.
Sorry, but that's drivel. In fact, what we are living through is the worst financial scandal in history. It dwarfs 1929, Ponzi's scheme, Teapot Dome, the South Sea Bubble, tulip bulbs, you name it. Bernie Madoff? He's peanuts.
Credit derivativesâthose securities that few have ever seenâare one reason why this crisis is so different from 1929.
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"About $2 trillion in credit derivatives in 1989 jumped to $8 trillion in 1994 and skyrocketed to $100 trillion in 2002. Last year, the Bank for International Settlements, a consortium of the world's central banks based in Basel (the Fed chair, Ben Bernanke, sits on its board), reported the gross value of these commitments at $596 trillion. Some are due, and some will mature soon. Typically, they involve contracts of five years or less.
"Credit derivatives are breaking and will continue to break the world's financial system and cause an unending crisis of liquidity and gummed-up credit. Warren Buffett branded derivatives the "financial weapons of mass destruction." Felix Rohatyn, the investment banker who organized the bailout of New York a generation ago, called them "financial hydrogen bombs."
"The heart of darkness was the AIG Financial Products (AIGFP) office in London, where a large proportion of the derivatives were written. AIG had placed this unit outside American borders, which meant that it would not have to abide by American insurance reserve requirements."
"This scheme that smacks of securities fraud facilitated the dreams of buyers called "counterparties" willing to ante up. Hedge fund offices sprouted in Kensington and Mayfair like mushrooms after a summer shower. Revenue from premiums for derivatives at AIGFP rose from $737 million in 1999 to $3.26 billion in 2005. Cassano reportedly hectored ever-willing counterparties to "play the power game"âin other words, gobble up all the credit derivatives backing CDOs that they could grab. As the bundled adjustable-rate mortgages ballooned, stretched home buyers defaulted, and the exciting power game became about as risky as blasting sitting ducks with a Glock." <!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - ramana - 03-05-2009
Nightwatch's comments 3/3/09
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Globalization Special Comment:Â During travel two weeks ago, NightWatch discussed the implications of the global economic meltdown with some brilliant, well-informed and perceptive Readers. <b>The consensus was that globalization has reached its high water mark in this life time. The first signs of four major consequences are emerging in Latin American and Russia.</b>
<b>Decline in world trade. </b>A new article in the Economist details the drop in trade among global markets. <b>Specialization in a global market place is being replaced by generalization in local markets</b>. Thanks to a brilliant and perceptive Reader for the reference to the Economist.
<b>The second consequence is the rise in self-sufficiency movements and various forms of isolationism.</b>Â The decline in profits from specialization to compete in global market places will encourage a growth in the domestic production of goods to meet the demand for items that can no longer be obtained from the global market place. Prices for locally produced goods will increase, but localization of production will produce more and different jobs than globalization did. NightWatch expects regional markets to replace the integrated global market.
<b>More nationalizations.</b> The Bolivarian countries, led by Venezuela, have been ahead of the times in spearheading a revival of nationalization, but for socialist reasons. <b>Ecuador, Argentina, Bolivia as well as Venezuela have been in the lead in expropriating the assets of multi-national corporations and in rewriting the terms of business. Other nations will follow as the economic consequences bite deeper. No government can withstand the allegation that it has allowed foreign companies to prosper at the expense of the well-being of its own populace. Expropriation of multi-nationals is good politics and maybe good business, in the short term, irrespective of neo-socialism.</b>
<b>The fourth consequence is the rise of authoritarian governments promising reform and better times.</b> Strong willed leaders who promise reform, an end to corruption and a free lunch will sweep elections and sweep out pluralistic democracy. <b>The leading edge of this trend is Russia, Venezuela and Bolivia. Consultative, elected, deliberative government is too slow, too expensive, and too stodgy to respond effectively to emergency needs in poor countries. Demagoguery will have a new day.</b>
The high water mark of globalization and the high water mark of elected, pluralistic government both have been reached for now.
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Global Economy - Guest - 03-05-2009
Till they don't fix derivates, nothing will change.
It will get worse.
Todays
Oil 45.15 +3.50
Gold 901.00 -12.60
Today stock went up and Oil also went up, which will take back to reverse gear.
Venezuela is heading for default and complete bank failure, last week Hugo was stopped by his doctor to stop speaking after 5 hours non-stop speech to public. They can't social engineer anymore with words.
Global Economy - Guest - 03-05-2009
<b>Venezuela's Hugo Chavez tightens state control of food amid rocketing inflation and food shortages </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Venezuela's public finances are unravelling, with oil prices at $40 a barrel, while the national budget is calculated at $60 a barrel. Inflation is running at over 30 per cent,</b> yet with the new measures Mr Chavez is seeking to ensure that his core support, the poor, can still fill their shopping baskets with food.
"If any industry wants to ride roughshod over the consumers, with a view to getting better dividends, we are going to act," said Carlos Osorio, the national superintendent of silos and storage. "For the government, access to food is a matter of national security."
<b>Production quotas and prices have now been set for cooking oil, white rice, sugar, coffee, flour, margarine, pasta, cheeses and tomato sauce.</b>
White rice, the staple for many Venezuelans, can now only be sold at a price of 2.15 bolivares (71p) per kilo. Private companies insist that production of that kilo costs 4.41 bolivares (£1.46) and that government regulations are impossible to fulfil and companies will quickly go broke. Companies that are dedicated to rice production must ensure that 80 per cent of their efforts are dedicated to white rice. The new regulations set production percentages, as companies were rebranding their products to avoid the government controls, like flavouring the rice, as the price restrictions apply only to white rice.
..............<!--QuoteEnd--><!--QuoteEEnd-->