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Global Economy - Guest - 11-18-2006
<!--emo&:cool--><img src='style_emoticons/<#EMO_DIR#>/specool.gif' border='0' style='vertical-align:middle' alt='specool.gif' /><!--endemo--> Indians are the start-up kings of US
CHIDANAND RAJGHATTA
TIMES NEWS NETWORK[ THURSDAY, NOVEMBER 16, 2006 08:40:48 AM]
WASHINGTON: Indian immigrants to the US account for 28% of all foreign-founded private start-up companies in a climate dominated by immigrant entrepreneurs, according to a new study on the hot-button issue.
The study found that over the last 15 years, immigrants have started one in four (25%) US public companies that were venture-backed, representing a market capitalisation of more than $500 billion.
Topping that, a survey of private, venture-backed start-up companies in the US estimated that a staggering 47% have immigrant founders.
In that group, âIndia was the most prevalent country of origin with 28%, followed by the United Kingdom (11%), China (5%), Iran (4%.) and France (4%.),ââ the study says. No numbers were given for public venture-backed firms, but even in that category, âthe most common countries of origin are India, Israel and Taiwanââ.
The findings back the long-held view, based on more limited surveys in Silicon Valley, that Indian immigrants are a significant force in Americansâ start-up culture. Indians have been founding companies in the US outside the Bay area for decades, going back to Amar Boseâs Bose Corp in Massachusetts and the Suhas Patil-founded Cirrus Logic in Utah.
The study also found that immigrant founders are responsible for building a high percentage of the most innovative American companies, with 87% operating in sectors such as high-tech manufacturing, infotech and life sciences.
Global Indian Takeover
⢠In the last 15 years, one in four US public cos, with a market cap of $500 bn, has been started by immigrants, led by Indians, Israelis and Taiwanese.
⢠Study found 47% of venture-backed start-up firms had immigrant founders. India (28%) was followed by UK (11%), China (5%), Iran (4%) and France (4%).
⢠Nearly half of the immigrant entrepreneurs arrived in the US as students and more than half of them started their businesses within 12 years.
⢠87% of immigrant founders operate in high-tech manufacturing, IT and life sciences.
⢠They hold an average of 14.5 patents. 69% of these individuals have become American citizens.
Global Economy - Guest - 01-05-2007
<b>Koreans invade DU Hindi class</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->South Koreans it seems are the foreigners most eager to pick up Hindi â and they want to do it fast. The majority of students enrolled for the short-term Hindi courses at Delhi University are South Koreans. Reason? Great job prospects in India with Korean majors Samsung, LG and Hyundai.
MJ Park, director, Korea Trade Investment Promotion Agency, says that with 200 Korean companies already here and many more showing interest, India has emerged as the land of opportunity. âEarlier, Koreaâs attention was on China. But now the scope for growth is greater in India,â says Park.
Over 3,000 South Koreans are working and studying in India. Of the 28 foreign students enrolled in the certificate, diploma and advanced courses in Hindi, 14 are from South Korea.
..............<!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - Guest - 03-15-2007
<!--emo&
--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo--> Then:VisionaryManmohan (Original Message) Sent: 12/24/2003 11:38 AM
Bhutan is the only nation on face of this earth which takes pride in above average:
GROSS NATIONAL HAPPINESS
as the yardstick to measure it's achievement rather than blurting out figures like GDP etc.This time around they have enhanced GNH of India also by flushing out the terrorists who were basking in Bhutan's GNH and presuming it as safe heaven.May God bless Bhutan and it's King Jigme Wang Chuk Suk.
India Khush Hua
Now:
BP readings show how happy a country really is
[ 15 Mar, 2007 0026hrs ISTAGENCIES ]
RSS Feeds| SMS NEWS to 8888 for latest updates
LONDON: Researchers at the University of Warwick have found a direct connection between a nation's overall happiness and its citizens' blood pressure problems.
Sweden, Denmark and the United Kingdom come top of this blood pressure based happiness league while Germany, Portugal and Finland come bottom.
The research by economists Andrew Oswald of the Department of Economics at the University of Warwick and David Blanchflower of Dartmouth College USA is about to be published by the National Bureau of Economic Research in Massachusetts. Doctors have known for a long time that blood pressure is one measure of an individual's health.
This research is the first to demonstrate that there a connection between nations' happiness and blood-pressure levels.
The researchers believe that it could offer a way for policy makers to move away from simply focusing on maximising the amount of money produced by a countryâits Gross Domestic Product.
University of Warwick Economist Professor Andrew Oswald said: "We found that a measure of a nation's rate of hypertension is a good predictor of its overall happiness. That surprised us."
"Although it sounds strange to suggest it in 2007, perhaps blood-pressure readings will one day replace or augment GDP as a measure of the success of a country. Maybe economists and doctors are going to have to work together in the design of future economic policies."
The researchers drew a random sample of 15,000 people from across the European countries.
These people were interviewed about all aspects of their lives, including their levels of satisfaction with life, their mental health, and whether they had had problems of hypertension (high blood pressure).
Reported hypertension is known to be a good indicator of actual blood-pressure problems. Countries like Ireland, Denmark and the Netherlands topped the European league table of happiness, with nations like Germany and Portugal at the bottom.
What the study's authors then go on to show is that exactly the equivalent pattern is found in reported hypertension in these populations. Happy countries have fewer blood-pressure problems.
Mental health in each country, they show, is also inversely correlated with its rate of hypertension.
Global Economy - dhu - 07-20-2007
<b>The coming collapse of the US dollar</b>
The skew in the global financial system -- commonly called 'global imbalance' -- seems to be fast spiralling out of control.
For some time now economists have been engaged in the mother of all debates: whether the US dollar would collapse by as much as 40% when compared to other currencies (some are even betting on the US dollar going belly-up) or whether there would be an orderly devaluation -- that is, a gradual revaluation of other currencies vis-�-vis the US dollar.
In effect, the question that is confronting us is not 'whether' but 'when' and by 'how much.'
This global imbalance can be understood in economic terms by simply examining the massive size of America's twin deficits -- trade and budgetary. Put modestly, Americans have been living way beyond their means, consuming much more than what they could possibly afford and, in the process, borrowing far beyond their capacity for too long.
This was facilitated by a policy of maintaining weak currencies across the world, notably in Asia. This policy of maintaining a competitive exchange rate for their currency to boost exports has resulted in a race to the bottom amongst various countries.
Nevertheless, this arrangement suited countries, both Asian (with a huge unemployed population) and American, (as it provided cheap imports for its huge consumption binge).
While the going was good, everyone profited and expected the arrangement to continue indefinitely. Unfortunately, linearity as a concept has limited appeal in real life, much less is global macroeconomics.
No wonder, of late, countries are discovering that this arrangement has its limitations. The current account deficit of the United States translates into current account surplus of exporting countries. To cover this deficit, US borrows: this corresponds to the forex reserves of exporting countries. The crux of the issue is that no other country, barring the US, has such a huge consumption pattern and an ability to absorb this huge export surplus.
In substance, countries are producing their goods, exporting it mostly to the US, and parking the resulting export surpluses with the US to facilitate US to finance its imports!
Clearly, the global imbalance is a by-product of this mindless competition by various countries to devalue their own currencies and the reckless consumption in US. Naturally, it is indeed tempting to blame US consumption for this crisis. However, one must hasten to add that the emerging economies -- notably Asian countries, especially after the1998 currency crisis -- with their fixation for weak currencies, are equally to be blamed.
The net result? Well, consider these facts:
By mid-May 2007, the US National Debt stood at approximately at mind-boggling $8.85 trillion -- i.e. approximately $28,000 for every American.
The basic structure of the American economy is that the deficit of the US government is 4% of the GDP and the household sector 6%, which are offset by a domestic savings of 3%, largely from corporates, leaving a substantial national deficit of 7% to be covered by the capital flows from the rest of the world.
The current account deficit of the United States for 2006 is estimated to be in excess of $850 billion. This approximates to 7% of its GDP. Surely, even for the US, this is unsustainable.
In order to ensure that this money is routed into America and to sustain its gargantuan borrowing programme, the US has repeatedly raised its interest rate to its current levels of 5.5%. While the very size of the US debt makes any further increase in interest rates virtually impossible (as it would make borrowings uneconomical), any cut in interest rates to stimulate its economy and make it competitive would mean that the US may not get the money it requires to sustain itself.
On March 28, 2006, the Asian Development Bank [Get Quote] is reported to have issued a memo, advising members to be ready for a collapse of the US dollar.
Since end March 2006, the US Federal Reserve has stopped publishing the quantum of broad money (that is the aggregate of US dollars circulating in the entire world -- technically called 'M3') in the US economy. This is the worst possible signal that the US Federal Reserve could have sent to the world.
Suspended sense of disbelief
Obviously, what aids and sustains the US dollar is a 'suspended sense of disbelief' amongst countries about the value of US dollar. Yet, common sense tells us that the excess supply will obviously result in a fall in the value of any product. The US dollar is no exception.
Late Iraqi leader Saddam Hussein was fully aware of this paradigm. Seeking to exploit the inherent weakness of the US dollar, Saddam wanted to trade his crude in Euros, which would have lead to a lower demand for the US Dollar and thereby triggered a dollar collapse. And those were his 'weapons of mass destruction -- WMD.'
And if some analysts are to be believed, Venezuela and Iran too possess the very same WMD. Naturally, it requires some specious arguments and military intervention to protect the US dollar. Never in the history of mankind has a national army protected the national currency so vigorously as the US Army has done is the past decade or so.
What is bizarre to note here is that despite the fact that crude is produced mainly in the Middle East; officially it can be purchased in dollar terms from one of the two oil exchanges situated in New York and London. Obviously, should Iran carry out the threat to commence oil trade in Euros or better still an oil exchange, the US dollar would come under tremendous pressure.
The US dollar is akin to the promissory note of a defunct finance company. It is common knowledge that a currency, when not backed by anything precious is just a piece of paper. When US abandoned the Gold Standard in early 70s, countries habituated by then to the US dollar under the Bretton Woods arrangement continued to accept the US dollar as an international currency without demur as the world was not prepared for any other alternative. Else, the global economy would have collapsed by 1971.
But the diplomatic silence did not solve the problem. It merely postponed it and it has come back to haunt us.
Post gold standard, by a tacit approval of the Organisation of Petroleum Exporting Countries (OPEC) and strategic manoeuvring, the US had ensured that its currency is implicitly backed by crude, instead of gold. This explains the American 'geo-political and strategic interests' in the Middle East.
But over time even this was found to be insufficient and consequently the oil standard of the 70s gave way to an implicit multiple commodity standard of today. Naturally, commodity prices -- including crude prices -- have soared in the past few years. Unfortunately, this arrangement too is failing the US. No wonder, the US dollar increasingly resembles a promisory note of a defunct finance company.
It is no coincidence that global trade in most commodities, including oil, is denominated in US dollars as the respective international exchanges are located in the US. To what extent are the prices of these commodities manipulated to protect the US dollar is anybody's guess.
However, it may not be out of place to mention that a barrel of oil which cost less than $10 to produce is sold approximately at $70 in the international market.
But as commodity prices go up it has lead to inflation across the globe. No wonder, countries are forced to increase their interest rates to fight inflation.
This has triggered an interest rate hike across continents and the US is finding it extremely difficult to sustain its current borrowing programme: it hardly has any elbow room to manoeuvre.
Doomed if it does, damned if it doesn't
Meanwhile, countries are increasingly realizing that the value of the US dollar that they are holding is fast eroding, whatever be the 'officially managed exchange rate.' And if fewer people want the US dollar -- as for instance when oil is traded in Euro the demand for the US dollar will fall -- it would trigger an avalanche.
No wonder, the US Fed is unwilling to make public the M3 figures, as it does not want the holding position of the US dollar to be publicised.
Interestingly, in such a doomsday scenario, some economists are still betting on central banks of other countries to defend the US dollar. It would seem that the US has 'outsourced' even this sovereign function to the central banks of other countries. After all, should the US dollar collapse, the biggest losers will not be the US but those who have US dollar-denominated forex reserves.
Naturally, countries holding US dollar reserves are caught on the horns of a serious dilemma -- should they seek to correct the global imbalance, it could result in the imminent collapse of the US dollar, and should they continue to defend the US dollar, they would be a long-term loser as the current arrangement has seeds of self-destruction.
While every central banker is conscious of this fact and thereby seeks to postpone the inevitable while nervously looking for his counterpart in any other country to break ranks and thereby trigger the collapse.
Surely, the emperor is without any clothes. There are only two possibilities from here on: Either we are witness a global meltdown of the US dollar, or allow controlled US dollar devaluation (read, revaluation of other currencies). If it is a global meltdown the global economy is doomed, if is an orderly devaluation, it is damned.
The author is a Chennai-based Chartered Accountant. He can be contacted at mrv1000@rediffmail.com.
Global Economy - Guest - 07-24-2007
Intellectual power of India takes hold in UK
Global Economy - Guest - 01-22-2008
<b>Chinese Bank Shares Fall Sharply</b>
<i>Chinese Bank Shares Fall Sharply on Reports Lenders Facing Possible Subprime Writedowns </i><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Also Monday, China's banking regulator warned that lenders might face risks from fluctuations in fast-rising real estate prices.
Bank of China is expected to announce a "significant writedown" on its $7.95 billion in U.S. subprime mortgage securities, Hong Kong's South China Morning Post newspaper reported, citing unidentified sources.
Bank of China spokesman Wang Jianping declined to comment. He said the bank would release details of its assets in late March when it announces annual earnings
<!--QuoteEnd--><!--QuoteEEnd-->
Americans are buying houses and enjoying expensive homes for two years which they can't afford and China is going to pay price. <!--emo&
--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo--> First time they came out with write off and this is first bank, watch more. Actual fun will start after Olympics.Plus if you add recall effect and 2008 x-mas orders will drop.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->. Although part of todayâs volatility could be attributed to the fear of a US recession and the lack of liquidity, the move began in Asia and was sparked by speculation that the Bank of China could be forced to write-off a fourth of its $8 billion subprime exposure. The announcement by the Chinese Bank would indicate that the mortgage mess has spread from the US to Europe and now into Asia. The world may be able to deal with a slowdown in the US economy, <b>but the combination of a material slowdown in both US and China would be too much for everyone to handle</b>. <!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - Guest - 01-22-2008
<b>Nikkei down 5.65 pct, biggest 1-day loss since 9/11</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The Nikkei has lost more than 1,000 points and 9 percent this week.
Investors dumped stocks across the board, battering financials and exporters especially hard. Mizuho Financial Group tumbled more than 8 percent. The Nikkei closed at 12,573.05, a loss of 752.89 points. The broader TOPIX was down 5.7 percent, also its biggest one-day percentage fall since the 9/11 attacks.
<!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - acharya - 01-24-2008
Merrill Lynch says U.S. nationwide home prices may fall 30%
By Chris Oliver
Last update: 10:12 p.m. EST Jan. 22, 2008
HONG KONG (MarketWatch) -- Merrill Lynch forecasts nationwide U.S. home prices could decline 25% to 30% over the next three years, as new supply and weak demand weigh on the market. "This sounds dire... but would only reverse part of the unprecedented 130% price surge from 2000 to 2006," wrote economist David Rosenberg in a research note released Wednesday. Rosenberg added the S&P 500 may decline an additional 20% to 25% to breach the 1,100-point level if the market follows historical precedents at times when the U.S. economy is in recession. End of Story
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Salaries and income are not high enough in the US to support home prices in places like California and too a lesser degree New York. Simply put, people earning on average 60-70,000 per year cannot afford homes costing on average of 550,000 (down from 600,000 last summer).
Salaries wont rise because the US is not competative with the emerging markets and our taxes put us at more of a disadvantage. The latter explains why Germany exports more machine tools than the USA. We spend money fighting wars instead of building and maintaining our infrastructure.
Consider the average wage in Florida and compare it to average home price! The average person cannot afford a home in Florida at all. It is retirees etc from the northeast where salaries are two and three times those in Florida that are driving real estate, not the economy of Florida!
I would bet homes in California still have about 30 - 35% to go before a bottom is hit! Average home has to got to about 350,000 to get in line with incomes. Especially with current prices for food, fuel and taxes out here.? How is 8.5% sales tax and 15% state income tax helping housing? Or cops and firemen being paid close to 100,000 a year sound? Is it no wonder taxes are ridiculous?
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by REFORMEDEXWHOLESALER 5 hours ago
I priced my townhome in Charlotte NC 20% below the lowest list price and sold it while the others on the block have sat there for 180 days now. Most people should come to terms with their real estate, particularly the kind that has appreciated as quickly as mine. I was smart and still sold for a 25% profit.
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Some of the condos in Ventura CA have already fallen 60% from their 2005 purchase prices. I saw a condo with a 150k asking price that was purchased for 335k in 2005. It really was an awful place....not sure if it has sold :-)
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by MarkShepherdstown 4 hours ago
Some very good comments here, thanks. I'm a real estate appraiser in the far out suburbs of Washington, DC/Baltimore and have long anticipated a major correction. Currently we are in a slow motion train wreck; where it lands us, I don't see yet, but real estate values will have to decrease substantially for property to become affordable again. Stricter underwriting standards are a sure bet. If there is a silver lining anwhere here, it is that Ben Bernanke has made studying the Great Depression his life work and is the well prepared to handle the problem on the government end. American consumers need to clean house financially. There will be losers. Incidentally, did you see the cartoon in yesterday's Journal? Two women commenting on how you know things are really bad when even the ads for new credit cards aren't coming in the mail anymore? A little gallows humor!
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Yes. Housing prices in the areas with the highest appreciation over the last 5 years will have to TANK if this market is ever going to get healthy again. It's about HOUSING AFFORDABILITY STUPID!!
All the 1% teaser rates and no doc fianancing is GONE people. Those "programs" were the only reason the pool of buyers got as large as it did....the only thing keeping house prices artificially propped up. Now that it is all gone, houses are (at best) worth 2000 prices.
Obviously, all of those people that had no skin in the game, and put no money down are going to WALK, but what Paulsen and Company aren't considering is that a vast number of responsible people who can afford to make their mortgage payments, and didn't get over their heads, are going to WALK TOO!! They are going to see their neighbors houses selling for 200K below what they think their house is worth, and realize that they are just sinking their hard-earned money into a rapidly depreciating asset.
God, this is going to get UGLY...... Flooding the system with money is not going to help....it is irretrievably broken thanks to ZERO regulation and rampant systemic fraud on a unheard of scale.
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Look real estate in US is all local. Not national. I mean in certain parts of US real estate has been doing great and doing great. I give you my own example: I just sold a flat in San Francisco which I bought in 1999 for $250K this last month for $1.3Mill, a again of $1.05Mill. And my flat was on the market for less than 2 weeks. I also had a house in Charleston SC area which I bought in 2002 for $750K and just sold it in less than 30 days on the market for about $1.5Mill. That is a total gain of about $1.7Mill. How many assets in the world will give you gains like that?
And I lived in these assets, raised children in them, through parties in them, made love in them, etc.<!--emo&
--><img src='style_emoticons/<#EMO_DIR#>/smile.gif' border='0' style='vertical-align:middle' alt='smile.gif' /><!--endemo-->How many assets can give you gains like this while you live in them? Nothing but well placed real estate.
So if you want to make money in real estate in US ignore the national statistics, it means nothing. And specially IGNORE the morons on Wall Street which told you to buy Internet stocks when you shouldn't, and tell you don't buy real estate when you should.
To be frank, I would say if you want the best real estate price appreciations buy in Europe, since it is a much
better economy than US, because they invest their peoples Taxes in their societies unlike US, but if you have to live in US, and 300Mill+ do, then stick to the right locations and YOU Will always make the best money of any other assets, because they don't make any more land, to be exact in fully built places like San Francisco, Washington DC, coastal areas in general (avoid FL). And building materials, all sort of raw materials, are going higher and higher in price, from Oil up 300% over last 5 years, to Cement up 400% over last 5 years, etc. Hek even real estate in Eastern Europe is now at $250 per Sqft and rising, that is higher than average prices in US!
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The December labour market report showed that the unemployment rate rose 0.3 percentage points to 5%. The softening in the labour market combined with the hit to net worth coming from weak real estate and equity markets will likely see U.S. household spending slow sharply in early 2008. At the same time, wider credit spreads and tighter lending standards are likely to dampen business spending, which in conjunction with the contraction in residential investment sets up for a much slower growth profile for most of 2008.
---
We've tumbled 10% in my neighborhood, 25% in hotter markets in Fla and Ca. But, if the NEXT 30% tumble can take place over three years instead of three months, the average of 7% growth in home prices these past forty years can flatten the decline substantially. If the price decline happens in a short time, the resurgance of acquisition and flipping will bouy the market after a six month spree of bargain creation, and bottom fishing in real estate. The home auction business is booming.
The secret will be if banks don't lend no matter how enticing the yield, which has increased 3/4% due to the o'night rate decrease. And, nobody knows what the $750 TRILLION dollars in derivative paper is worth worldwide and how much liar loans has poisoned that heretofore solid investment. It is more cost beneficial to rent rather than own, in many neighborhoods, and when that equals out is about 15-20% away discounted home value.
Banks teaser rates will continue, but the pool will be a much smaller group. New housing will continue to languish, a plus for the previously owned market. Standards will be tougher.
Housing is a place to live. That won't change, so, who cares unless you're mortgaging your house away and treating it like a credit card. That last habit, is drying up and what is hurting the economy.
It's going to take the US 2-3 years to dig its way out of this mess.
--
ML David Rosenberg was on record 2 years ago saying there would be a housing recession, so was Ian Shepardson of High Frequency economics, and last but not least Stephen Roach of MS.
What we heard from Alan 'Greenspam' was 'no problems' no housing bubble' and that was duplicated by the NAR and Marketwatch as well as many other not so honest economists.
Housing prices here in Connecticut have fallen about 7% thus far- and will most likely fall at least that much this year- and we where not overbuilt or suffer from massive speculation and 'funky' financing. I remember in the period from 1989-1995 prices here fell about 40% for condos and about 25% for single family homes- it took till 2002 for prices to regain the highs reached in 1988.
--
ML dares to be the first to say it, but we all at least feel a 30% housing decline is looming. Loan programs that have sustained our lofty home values for the past several years are no longer available and may never again be made available after such a harsh lesson has been learned.
Bottom line, people need money to pay for homes. Banks have gone back to lending only what can be truly verified on paper, which for most Americans is not much. Home values will need to tumble down to the real levels people can truly afford to pay, which IMO is even less than 30% of present values.
Global Economy - acharya - 01-24-2008
Crude falls for second day on recession fears
By Moming Zhou
Last update: 2:44 p.m. EST Jan. 23, 2008
SAN FRANCISCO (MarketWatch) -- Crude-oil futures fell for a second day on Wednesday, tumbling more than $2 to below $87 a barrel, as continuing fears that an economic recession will slash demand for oil prompted traders to sell energy futures. Crude oil for March delivery closed down $2.22, or 2.5%, at $86.99 a barrel on the New York Mercantile Exchange. Earlier it fell to an intraday low of $86.65. Crude is now 13% below its highest level of $100.09 hit earlier this year. End of Story
Global Economy - acharya - 01-24-2008
http://www.marketwatch.com/news/story/cont...dist=TNMostRead
Global Economy - acharya - 01-24-2008
Bad news on many fronts
Rates have plunged this month as news kept coming in that the economy is going stale:
* The unemployment rate for December jumped to 5 percent from the previous month's 4.7 percent.
* A panel of economists convened by The Wall Street Journal put the chance of a recession at 42 percent, up from 38 percent in December.
* Ben Bernanke, chairman of the Federal Reserve, said in a speech that "the baseline outlook for real activity in 2008 has worsened and the downside risks to growth have become more pronounced. Notably, the demand for housing seems to have weakened further, in part reflecting the ongoing problems in mortgage markets." He strongly hinted that the Fed will cut short-term rates again.
* The Fed's Beige Book, a summary of economic activity in the central bank's 12 regions, said economic activity increased modestly in the last six weeks of 2007, but at a slower pace than the six weeks before that. "Residential real estate conditions continued to be quite weak in all districts," the report said.
* Economists for the PMI Group, a mortgage insurance company, noted that home values have fallen an average of about 4.5 percent nationwide in the last year. "Are we nearing the end of the current housing downturn?" PMI economists David Berson and LaVaughn Henry wrote. "We don't think so, given the magnitude of the run-up in housing (with no significant housing downturn since the recession of 1991-92)."
Depreciation by metro region
PMI Group ranks the 50 biggest metro areas by the likelihood that house prices will be lower two years from now. In 12 of those metro areas, the odds are 65 percent or greater. Southern California's Riverside-San Bernardino metro area leads, with a 94 percent chance of lower prices two years from now. Following that are Las Vegas (89 percent chance) and Phoenix (83 percent). The rest of the depreciating dozen are in California and Florida.
North Texas fared best of the 50 biggest metro areas, with less than a 1 percent chance of a price drop in the Dallas-Plano-Irving area and in Fort Worth-Arlington. The rest of the Lone Star State is expected to escape falling house prices, too.
Global Economy - acharya - 01-24-2008
<img src='http://bp3.blogger.com/_8m7jYiLM_DI/RszNv0w6XgI/AAAAAAAAAUA/DDFfaT-0wqc/s1600/chartforeclosures.jpg' border='0' alt='user posted image' />
http://www.doctorhousingbubble.com/3-reaso...ence-on-credit/
<img src='http://bp2.blogger.com/_8m7jYiLM_DI/RszN_kw6XhI/AAAAAAAAAUI/GWIgjshIGRs/s1600/mortgagedebt.jpg' border='0' alt='user posted image' />
Global Economy - Guest - 01-31-2008
<b>India struggling to cope with Internet outages</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->In all, users in India, Pakistan, Egypt, Qatar, Saudi Arabia, the United Arab Emirates, Kuwait and Bahrain were affected. Engineers in several countries were scrambling to reroute traffic to satellites and to other cables.
The biggest impact to the rest of the world could come from the outages across India, where many U.S. companies outsource customer-service call centers and other back-office operations.
............
"The companies that serve the (U.S.) East coast and (Britain) are worst affected. The delay is very bad in some cases," he said. "They have to arrange backup plans or they have to accept the poor quality for the time being until the fiber is restored."
...
Israel was unaffected by the outages because its Internet traffic is connected to Europe through a different undersea cable. Lebanon and Iraq were also operating normally, and most governments in the Middle East seemed to be unaffected, apparently because they had switched to backup satellite systems.<!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - Guest - 04-24-2008
Life after the Oil Crash
Global Economy - Capt M Kumar - 05-20-2008
http://nri.in.msn.com/article.aspx?cp-documentid=1408444
âWe simply attempt to be fearful when others are greedy and to be greedy only when others are fearful,â is what Warren Buffet has said and always believed in. After all, it is a well known secret that stock markets around the world have only two sentiments â fear and greed. Today, fear is ruling because there is probably little room for greed. After all, investors cannot hope to sustain the Midas touch forever, can they?
Global Economy - acharya - 06-11-2008
http://www.marketwatch.com/news/story/lazy...dist=TNMostRead
PAUL B. FARRELL
'Lazy Portfolios' for stagflation 2008-2018!
What'll you do if this market trades sideways ... for 10 years?!
By Paul B. Farrell, MarketWatch
Last update: 10:06 p.m. EDT June 9, 2008
Comments: 118
ARROYO GRANDE, Calif. (MarketWatch) -- Stagflation till 2018? I can hear you screaming: "Ten years of no growth? Plus inflation? Plus high volatility in a narrow trading range?" You're crazy!
Well, I was at Morgan Stanley during the 1970s, looked at billions of dollars of depressed real estate for clients. Stagflation lasted into the '80s, over 10 years. Painful stuff. On top of all this, in several recent columns we've reported on a bigger bubble blowing and a meltdown coming by 2011. Folks, the era of happy-days and happy-talk is over! See previous Paul B. Farrell.
Even if we don't get 10 years of bad news we know 2008 is already bad and getting worse. In his latest Insight Newsletter long-time economist and Forbes columnist Gary Shilling reminds us the U.S. recession is unfolding in four phases: "Two Underway, Two Just Starting." First two: The housing disaster and the Wall Street meltdown will continue at least through 2010. "Phase 3, a massive consumer retrenchment, the worst since the 1930s" is just kicking in. "By year's end, Phase 4 should start as falling U.S. consumer spending cuts the imports that fuel foreign growth."
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So what's your best strategy? In 2008? Till 2018? Judging from the emails, confusion is rampant. The angry send hate-mail. Many put their heads in the sand. Others even think I'm too soft, expect the next meltdown is coming sooner. The latest news about Wall Street banks isn't helping. Gurus are clueless about the long term, praying they can stay alive trading short-term in a volatile narrow-band market.
How to invest in a 'bad' market?
"Our forecast is a lousy one for stocks and commodities, but a great for the dollar and Treasury bonds," says Shilling. But will you sell all you have and stick your nest egg in cash and gold? Or become an active trader. Probably not. If you're a passive investor like the vast majority, and you have a well-diversified portfolio, your best strategy may be to do nothing. Yep, sit tight rather than listen to endless bad advice from confused Street gurus. Most of us aren't good at market timing; the pros are worse.
Even a pro like Ted Aronson: Here are the reasons he'd "hold tight. The good include my faith in capitalism and its ability to weather a storm, even one of biblical proportions. The bad reason is, I have no faith in my ability to time this sort of thing. Even if I got out in time, I probably wouldn't be able to correctly time getting back in!" Aronson manages about $25 billion in institutional money but keeps his family money in his passive "Lazy Portfolio," and averaging an annual 16.37% return the past five years.
If you don't have a Lazy Portfolio now is the time to build your own using the eight models below. And remember, back in the bad old days of the 2000-2002 bear-recession, one of them, the Coffeehouse, was killing the S&P 500 by 15 percentage points each of the three years -- more proof passive investing beats action.
You also don't need a lot of funds with this strategy. That's important if you're young, new at the game or just don't have a lot of money to invest and can't afford to plunk down the $33,000 for the initial investments in an 11-fund portfolio.
Global Economy - acharya - 06-11-2008
ASIA MARKETS<b>
China, Hong Kong drop in reaction to new bank rule
Markets hammered as investors focus on inflation fight and higher fuel costs</b>
By Chris Oliver, MarketWatch
Last update: 6:47 a.m. EDT June 10, 2008
Comments: 71
HONG KONG (MarketWatch) -- Asian markets suffered major losses Tuesday, led down by Shanghai and Hong Kong, where banking and property shares fronted declines.
Investors fretted about the impact of the latest round of anti-inflation measures announced over the weekend.
Shanghai's Composite Index plunged 7.7% to 3,072.33, its lowest closing level since March 22. Tuesday's trading was the first since the People's Bank of China announced it would lift the ratio of reserves banks must set aside as deposits by 1 percentage point. The adjustment comes ahead of consumer-price index data for May due out Thursday. See full story
The benchmark index for the Shenzhen stock market was down 8% at 928.20.
Hong Kong's Hang Seng Index slipped 4.2% at 23,375.52 and the Hang Seng China Enterprises Index gave up 5.4% to 12,789.87.
Chinese banking and property shares were among leading decliners amid concerns about the outlook for corporate earnings, given higher oil prices and the impact of the macroeconomic controls.
Shanghai-listed shares of China Merchants Bank and Shanghai Pudong Development Bank both fell by their daily 10% limit. Shenzhen-listed shares of property developer China Vanke was also limit down 10% before trading was halted.
"People are having a bit of a rethink on China; they are reckoning the growth rate is going to slow with these earthquake problems and high energy prices," said Howard Gorges, vice chairman of South China Brokerage in Hong Kong. "It's a revision downwards of growth expectations and profit growth in China."
China's stock markets, along with those in Hong Kong, Australia and the Philippines were closed for holidays Monday.
Hong Kong-listed shares of Sinopec (HK:386: news, chart, profile)
SNP 98.13, -2.36, -2.3%) led declines among Chinese refiners, falling 5.9% in the first day of trading since oil prices rocketed near $140 a barrel Friday.
Global Economy - Guest - 06-24-2008
Gold falls nearly 3 pct on dollar gains
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Meanwhile the euro fell sharply against the U.S. currency after soft European economic data earlier on Monday which showed a contraction in manufacturing and services activity in the euro zone.
<b>A stronger dollar typically weighs on gold, as it is bought as a hedge against weakness in the U.S. currency. A stronger greenback also makes dollar-priced gold more expensive for holders of other currencies. However, traders said interest in gold from physical buyers, who have been discouraged by high and volatile prices in recent months, has supported the market</b><!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - Guest - 06-24-2008
<b>How oil speculators may be driving up prices</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->WASHINGTON â Almost all the economists who are studying today's high oil prices think that financial speculators are helping to drive up those prices, but hard data are lacking as to whether they're a major factor, and if so, how big a factor.
<b>Michael Greenberger thinks that speculation is a major factor, and he knows a lot about the complex global oil market. He directed the division of trading and markets for the Commodity Futures Trading Commission from 1997 to 1999. </b>That body regulates the trading of contracts for future deliveries of commodities, including crude oil, called futures, which drive oil prices. Now a law professor at the University of Maryland, Greenberger told McClatchy why he thinks that financial speculation is driving up oil prices.
Q. How do speculators drive up oil prices?
A. <b>Speculators are able to drive up crude oil prices today because they're allowed to trade in the U.S. in futures markets not overseen by U.S. regulators. Therefore, they are free to dominate these markets by taking huge positions within them to dominate them; and there is an additional fear that, because of a lack of oversight, they may be engaging in manipulative practices â i.e. wash sales and false reporting that would be barred in a regulated environment.</b>
Q. What is a "wash sale" and how does it work?
A. That's a prearranged trade between two or more parties in which there is no economic risk and the sole purpose of which is to give the appearance that the price of a commodity is going higher or lower in a way that does not reflect supply-and-demand fundamentals.
Q. Who are these speculators? Do they have names and addresses?
A. I really cannot answer that with certainty because these unregulated markets are so opaque. Many say that Goldman Sachs & Co. and Morgan Stanley are primary traders on the principal market outside of direct U.S. supervision, the Intercontinental Exchange, otherwise known as ICE.
The whole point here is that we need transparency through a thorough investigation to determine precisely what is happening on the Intercontinental Exchange, including who key traders are and the positions they are taking in these markets. That transparency is provided regularly for those exchanges regulated directly by the CFTC.
Q. How much of today's record oil price is attributable to speculation?
A. There are many estimates being made by observers of these markets, economists and industrial energy consumers suggesting that the price of a barrel of crude oil could be anywhere from 25 percent to 100 percent in excess of what supply-demand market fundamentals would dictate. For example, OPEC has recently said that a barrel of crude should not be in excess of $70, and it has opened its own investigation into excessive speculation in these markets to find out what interests are causing the price to be almost double that.
Q. What about supply and demand fundamentals? Aren't they behind oil's rising price to some degree?
A. There can be no doubt that there is a supply-and-demand problem at work here. But many believe, including me, that there's a speculative premium that goes beyond what supply and demand factors dictate. And that's what could be drained with aggressive United States regulation.
Q. Can the Commodity Futures Trading Commission do something, and if so why hasn't it?
................<!--QuoteEnd--><!--QuoteEEnd-->
Global Economy - acharya - 07-06-2008
<b>G-8 leaders face rising expectations at summit</b>
Sunday July 6, 11:26 am ET
By Joseph Coleman, Associated Press Writer
Under tight security, G-8 leaders face expectations on climate, oil and Zimbabwe