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Global Economy - Guest - 05-04-2009

<b>China has 'canceled US credit card': lawmaker </b>

Global Economy - acharya - 05-09-2009

Die Zeit, Germany
<b>Obama: Trapped By the Taliban </b>

Global Economy - acharya - 05-09-2009

<b>Rothschild Difference With Madoff Becomes Geneva’s Obsession</b>

Global Economy - acharya - 05-11-2009

American capitalism has died a sudden death in 2008. Just God knows what kind of economic system we have today in the United States.

Today the US government controls 90 percent of the mortgage market in the US. The US government also controls a large chunk of the banking system in the US. The US government was forced to nationalize the largest insurance company in the United States.

The estimated U.S. GDP for 2009 is estimated to be around $ 13.5 trillion dollars.

In April 2008 I started a thread at the Elite Trader Economic Forum - The US economy and the real GDP – And in that thread I explain why my friend and I believe that after you adjust the US government fairy tale figure the real GDP of the US economy might be on the range of US$ 9 to US$ 10 trillion – the difference between these figures are all the meaningless adjustments that they make to inflate the GDP figures calculated by the US government to show a better performance and a larger economy than the reality.

Let’s be conservative and after we estimate the real GDP of the US economy for 2009 after the number is adjusted for the meaningless information that they add to the GDP figures on a regular basis, and on top of that we take in consideration the economic and financial implosion that we had in the US economy because of a deep recession plus massive deleveraging with record high foreclosures, exploding unemployment, massive financial losses of all kinds – we are lucky if the US GDP still in the range of $ 9 to $ 10 trillion dollars in 2009.

As I mentioned above the US government controls a very large portion of the financial area of the US economy. And the US government budget for 2010 is estimated to be around $ 3.5 trillion dollars – That’s a very large percentage of the United States GDP.

It is just a matter of time for Zombie banks such as Citigroup, and Bank of America, plus the US auto industry to be fully nationalized.

Without massive US government intervention the rest of the US economy would have spanned completely out of control in a downward spiral.

For all practical purposes today we have an artificial economy and financial system in the United States that can’t survive without massive US government intervention in the financial and other markets to keep the US economy from sinking into the abyss.

The mainstream media in the United States can’t connect the dots even to save their lives and Americans make the same old mistakes over and over again, it seems to me that they are immune from learning anything from past experiences and they make the same mistakes over and over again.

Americans learnt nothing from the prior experiences with companies such as Enron, and WorldCom to just mention a few catastrophes.

The US government is trying to do everything they can by artificial means to keep the US financial markets from falling into the Abyss.

1) They are pumping trillions of US dollars (real money and US government guarantees) to keep assets in the US artificially higher than they would be under normal free market circumstances.

2) They are changing accounting rules (mark to market) to keep massive losses from being booked into the P&L – and to keep investors who invested in banks and other financial institutions in the dark.

In December 2007 I posted the following on the Elite Trader economics forum regarding the US pension funds system:

A few years ago the Bush administration came up with a great idea about how to fix the pension system in the United States. Now talking about a complete lack of common sense that eventually it will cost trillions of US dollars and it will have a major impact in the future of retirement in the United States – some moronic people changed the rules regarding pension funds a few years ago and they started letting the pension funds invest US government insured money in hedge funds as a quick fixer up to the pension funds that were underfunded to start with.

These fools let the pension funds invest in hedge funds in the illusion that these hedge funds above average returns would save the day for the pension funds. (The people involved in that kind of rescue plan for the pension plans are a bunch of morons who will cause the pension funds to lose even more money and be even in worse shape than before.)

I will not be surprised to find out that the hedge funds lost a fortune in new pension money that were gambled in the current sub prime mess – I am saying new pension money because the pension plans lost 2 trillion dollars during the last telecom and meltdown.

I wonder how much government insured pension money has been lost by the hedge funds in the current sub prime scandal?

I used to believe that the free market and Wall Street were the best vehicles for allocating scarce resources – but today I know that all that it was just a bunch of bullshit - and all I have to do is look around and remember a few fiascos that have cost trillions of US dollars of mostly pension money that disappeared forever here in the US such as: the savings and loans debacle of the 1980’s, the telecom and meltdown of the year 2000 and the complete lack of common sense related to the latest sub prime scandal.

There is one thing I know for sure these trillions of US dollar that have melted away are moneys that millions of Americans who still are working today are counting on that money in the future as part of the pension money to survive and they think that their money have been invested in a safe place.

Millions of Americans are going to have a nasty surprise regarding their pension money in the coming years.

Wall Street lost trillions in the fiasco, then they moved on and they raided the pension system of Americans. Then they took people from around the world for a ride with the sub prime scandal. Then they moved on and took the Foreign Sovereign Investment Funds for a ride. Then Wall Street started running out of suckers to take them for a ride and in the last year Wall Street finally started setting up its next victim to milk it to the bone – the US government.

Instead of nationalizing the Zombie banks immediately and cleaning up the balance sheet of these institutions of the toxic assets over a period of time at a considerable expense for the US taxpayer the Geithner plan is going to cost the taxpayer many times over the current losses since the hedge funds, private equity firms and other bottom feeders are going to take the US government for a ride and they are going to leverage the losses many times over and the US taxpayer is going to be left holding the bag for these scoundrels.

The Geithner toxic assets plan is a plan to screw the US taxpayer to the tune of trillions of US dollars and the hedge funds, private equity firms and other bottom feeders are going to laugh all the way to the bank and they will make a ton of money at the expense of these fools who are running these US government money give way programs.

The swindlers in Wall Street set their eyes on their next victim – the US taxpayer – and in the process they managed to get the US government to give more casino chips for them to continue their game through trillions of US dollars in new US government guarantees of all kinds, massive bailouts, and a transfer of trillions of dollars of toxic assets to the balance sheet of the Federal Reserve.


Global Economy - acharya - 05-13-2009, China
<b>American Absence In World Expo </b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Whether the United States attends the exposition or not has little to do with China saving face or Sino-U.S. relations, but is related to its commercial interests. As the Atlantic Monthly put it, in 1964, the New York World Expo showed off the American technological advantage, and because of China's economic boom, China will undoubtedly play a leading role in the 2010 Shanghai World Expo.</b> If America is absent, how will people view America’s current international status? The Shanghai expo is more important than the expos in other countries, because it will be hosted in the biggest city in the country with the third largest economy. If America is absent, it will damage American interests in China.<!--QuoteEnd--><!--QuoteEEnd-->

Global Economy - acharya - 05-24-2009

<b>Recession suddenly humbles high-tech sector</b>

Global Economy - acharya - 05-25-2009

Le Monde , France
<b>The End of the Reign of the Dollar is Inevitable </b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The marriage of two factors - the weight of tradition and that of American debt - ensures that the reign of the dollar is not approaching its end, even if the Sino-Brazilian partnership flies.

It must be emphasized that this initiative expresses the annoyance engendered in China by the privileged role of the dollar, a sentiment already manifested on numerous occasions and through more or less official channels. The idea of a world liberated from the hold of the dollar is gaining momentum. Moscow and New Delhi could join the movement and permit the currencies of the BRIC countries (Brazil-Russia-India-China) to form the "4 R" bloc - (Real-Ruble-Rupee-Renminbi). The end of the dollar's reign will perhaps be slow, but it is nonetheless inevitable.<!--QuoteEnd--><!--QuoteEEnd-->

Global Economy - acharya - 05-29-2009

<b>Roubini says U.S. economy may dip again next year</b>
Thu May 28, 2009 9:12am EDT
By Marie-France Han
SEOUL (Reuters) - Nouriel Roubini, the famously glum economist who predicted the financial crisis, said that while the recession in the United States may well be over at the end of the year, another dip was still possible next year.

"I still expect that economic growth in the U.S. is going to be negative through Q4, and that we'll see positive growth in Q1," Roubini told Reuters in an interview on the sidelines of the Seoul Digital Forum.

"The U.S. recession is going to be U-shaped, lasting roughly 24 months," he added. "Compared to the current consensus that says we are practically at the end of the recession ... my view is: no, it's going to last another six to nine months before it's over."

Roubini, who teaches at New York University and heads research firm RGE Monitor, had said on Wednesday that the end of the global recession was likely to occur at the end of the year. This spurred speculation that his outlook had grown more optimistic, a suggestion denied by him in the interview.

"Because I said the recession is going to be over by year-end, people say I am an optimist, but I've been saying the same thing for a while."

"I would say compared to current consensus, I am much more bearish," he said. "Compared to other people that say it's going to be a doomsday, I could be considered an optimist."

Roubini stood by a recent article in which he mentioned the possibility of a "perfect storm" in 2010.

"There is even a risk of a double dip, a W-shaped recession at the end of next year," he said, a combination of rising oil prices, rising public debt and increases in real interest rates, rising concerns about inflation and the expiration of a number of tax cuts in the United States.
(Editing by Jan Dahinten)

Global Economy - Guest - 05-29-2009

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Roubini stood by a recent article in which he mentioned the possibility of a "perfect storm" in 2010.

"There is even a risk of a double dip, a W-shaped recession at the end of next year," he said, a combination of rising oil prices, rising public debt and increases in real interest rates, rising concerns about inflation and the expiration of a number of tax cuts in the United States<!--QuoteEnd--><!--QuoteEEnd-->
Roubini assessment is right. Currently, US is printing money and treasury is buying its own bond with printed money. This will cause inflation and possible very hard inflation.
Next is oil price, it is already up and it will effect everything and growth engine will just go in reverse direction.
Government is overspending. Socialist policies will kill growth.
Foreclosure are going up, even higher income group is affected.

Global Economy - acharya - 05-29-2009

<b>From Golden State to 19th-century backwater</b>
    Imigrants today, sing our national anthem in Spanish.
Immigrants, singing in Spanish, in San Diego, Los Angeles, San Antonio, Las Vegas and San Francisco ?

California, may have less than able politicians, but most of the Spiritual teachers in USA seem to reside within driving distance of San Francisco, or Mill Valley.
Tune in to Sounds True or Hay House , and the endless wisdom offered by Deepak Chopra, Byron kate, Gangaji, Dr Phil, Adya Shanti?? and dozens of others, will, if followed, lead to happiness, prosperity and success.
With so many realised beings in one place, harnessing their wisdom, and taxing pot, ought to set the Golden State on a sustainable budget</b>.<!--QuoteEnd--><!--QuoteEEnd-->

Global Economy - Guest - 05-30-2009

<b>Leap in U.S. debt hits taxpayers with 12% more red ink </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Key federal obligations:

• Social Security. It will grow by 1 million to 2 million beneficiaries a year from 2008 through 2032, up from 500,000 a year in the 1990s, its actuaries say. Average benefit: $12,089 in 2008.

• Medicare. More than 1 million a year will enroll starting in 2011 when the first Baby Boomer turns 65. Average 2008 benefit: $11,018.

•Retirement programs. Congress has not set aside money to pay military and civil servant pensions or health care for retirees. These unfunded obligations have increased an average of $300 billion a year since 2003 and now stand at $5.3 trillion<!--QuoteEnd--><!--QuoteEEnd-->

<b>Bond Vigilantes Confront Obama as Housing Falters </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->For the first time since another Democrat occupied the White House, investors from Beijing to Zurich are challenging a president’s attempts to revive the economy with record deficit spending. Fifteen years after forcing Bill Clinton to abandon his own stimulus plans, the so-called bond vigilantes are punishing Barack Obama for quadrupling the budget shortfall to $1.85 trillion. B<b>y driving up yields on U.S. debt, they are also threatening to derail Federal Reserve Chairman Ben S. Bernanke’s efforts to cut borrowing costs for businesses and consumers</b>.<!--QuoteEnd--><!--QuoteEEnd-->

Global Economy - Guest - 05-31-2009

<b>Zoellick Warns Stimulus ‘Sugar High’ Won’t Stem Unemployment </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->May 30 (Bloomberg) -- World Bank President Robert Zoellick warned policy makers that <b>fiscal-stimulus plans are insufficient to turn around the “real economy” and rising joblessness threatens to set off political unrest across the globe</b>.

“While the stimulus has given an impulse, it’s like a sugar high unless you eventually get the credit system working,” Zoellick said in an interview yesterday with Bloomberg Television’s “Political Capital with Al Hunt.” “<b>When unemployment increases, that’s probably the most political combustible issue.” </b>

<b>Zoellick’s caution is a contrast with private economists, who are raising their outlooks for growth from India to China as stimulus measures take effect.</b> The biggest developed and emerging nations have committed spending increases and tax cuts totaling 2 percent of their combined economies, a level the International Monetary Fund recommended to end the recession.

The <b>World Bank is monitoring private companies’ abilities to roll over “a lot” of debt in the developing world</b>, Zoellick said. At the same time, he played down risks to the global recovery posed by rising U.S. Treasury yields, saying that “in terms of absolute levels, rates are still pretty low for most players.”
India will hit very hard.

Global Economy - Capt M Kumar - 05-31-2009

This is reflected in price-earnings ratios, which reflect long-term prospects. Bloomberg estimates the ratio for the coming years is only 11.4 and 11.5 respectively for Accenture and IBM, but 17.2 and 22.0 for Infosys and Wipro. So, the market is implying that the Indian companies are inherently more competitive. Their higher ratios suggest that, in the long run, the Indian companies should find it easier to take over their US rivals than the other way round.

Global Economy - Guest - 05-31-2009

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->but 17.2 and 22.0 for Infosys and Wipro<!--QuoteEnd--><!--QuoteEEnd-->
Capt M Kumar,
Cooking books and actual employee count should be taken into account.

Global Economy - Guest - 06-01-2009

<b>Federal Reserve puzzled by yield curve steepening</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Do rising U.S. Treasury yields and a steepening yield curve suggest an economic recovery is more certain, meaning less need for safe haven government bonds and a healthy demand for credit? If so, there might be less need for the Fed to expand the money supply by buying more U.S. Treasuries.

Or does the steepening yield curve mean investors are worried about the deterioration in the U.S. fiscal outlook, or the potential for a collapse in the U.S. dollar as the Fed floods the world with newly minted currency as part of its quantitative easing program. This might be an argument to augment to step up asset purchases.

Another possibility is that China, the largest foreign holder of U.S. Treasury debt, has decided to refocus its portfolio by leaning more heavily on shorter-term maturities.

With officials still grappling to divine the factors steepening the yield curve, a speedy decision on whether to ramp up the Treasury debt purchase program or the related plan to snap up mortgage-related debt seems unlikely.

"I'm in wait-and-see mode," said one Fed official who spoke on the condition of anonymity. "We laid out the asset purchase plan and we're following it. That is going to have some affect on various interest rates, but together with a hundred other things. So I don't think we should be chasing a long-term interest rate," the official said.

Global Economy - Guest - 06-07-2009

<b>Worst economic collapse ever</b>

Global Economy - Guest - 06-22-2009

<b>World Bank cuts 2009 global growth forecast</b>
<b>World Bank cuts 2009 global growth forecast, says world economy to shrink by 2.9 percent</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->"The global recession has deepened," the Washington-based multilateral lender said in a report.

<b>Global trade is expected to plunge by 9.7 percent this year, while total gross domestic product for high-income countries contracts by 4.2 percent</b>, the bank said. It said economic growth in developing countries should slow to 1.2 percent -- but excluding relatively strong China and India, developing economies will contract by 1.6 percent.

The bank's latest forecast is a sharp reduction from its March prediction of a 1.7 percent global contraction, which it said then would be the worst on record.

Economic damage to developing countries "has been much deeper and broader than previous crises," warned the report, issued Sunday in Washington.

<b>"Unemployment is on the rise, and poverty is set to increase in developing economies," </b>it said.

The global economy should start to grow again in late 2009, but "the expected recovery is projected to be much less vigorous than normal," the report said. It said banks' ability to finance investment and consumer spending would be hampered by the overhang of unpaid loans and devalued assets.

"To break the cycle and revive lending and growth, bold policy measures, along with substantial international coordination, are needed," the World Bank said.

Investment and other financial flows to developing countries plunged by an estimated 39 percent in 2008 to $707 billion, the World Bank said. It said foreign direct investment in developing countries is projected to drop by 30 percent this year to $385 billion.

<b>Eastern Europe and Central Asia have been hit hardest and the region's gross domestic product is expected to plunge by 4.7 percent this year,</b> the bank said. It said growth should recover next year to 1.6 percent.

<b>GDP in Latin America and the Caribbean should shrink by 2.3 percent this year </b>before rebounding to expand by 2 percent in 2010, the report said.

In the <b>Middle East and North Africa, growth is expected to fall by half this year to 3.1 percent, while that of sub-Saharan Africa will drop to 1 percent from an annual average of 5.7 percent over the past three years</b>, the bank said.

<b>East Asia should post a 5 percent expansion</b>, supported in part by China's stimulus-fueled growth, the bank said.<!--QuoteEnd--><!--QuoteEEnd-->

Global Economy - Capt M Kumar - 06-26-2009

<!--emo&:cool--><img src='style_emoticons/<#EMO_DIR#>/specool.gif' border='0' style='vertical-align:middle' alt='specool.gif' /><!--endemo--> "The CEOs in Indian companies grow up to work with constraints and are able to optimise their operations more than their counterparts in US and UK. They can make the dollar run many more miles than CEOs in the West," Cleveland-based Umesh Ramakrishnan, vice chairman of global executive search firm CTPartners, told IANS in a telephone interview.

Global Economy - Guest - 06-26-2009

<!--QuoteBegin-Capt M Kumar+Jun 26 2009, 05:47 PM-->QUOTE(Capt M Kumar @ Jun 26 2009, 05:47 PM)<!--QuoteEBegin--><!--emo&:cool--><img src='style_emoticons/<#EMO_DIR#>/specool.gif' border='0' style='vertical-align:middle' alt='specool.gif' /><!--endemo--> "The CEOs in Indian companies grow up to work with constraints and are able to optimise their operations more than their counterparts in US and UK. They can make the dollar run many more miles than CEOs in the West,"<b> Cleveland-based Umesh Ramakrishnan, vice chairman of global executive search firm CTPartners</b>, told IANS in a telephone interview.
Yes, pay low salary, dangle Green Card carrot and provide louzy health and life insurance.

Global Economy - Guest - 07-04-2009

<b>India Joins Russia, China in Questioning U.S. Dollar Dominance </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->July 4 (Bloomberg) -- Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.

“The major part of Indian reserves is in dollars -- that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview yesterday in Aix-en-Provence, France, where he was attending an economic conference.

Singh is preparing to join leaders from the Group of Eight industrialized nations -- the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia -- at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representative to the summit.

As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.

“There should be a system to maintain the stability of the major reserve currencies,” Former Chinese Vice Premier Zeng Peiyan said in a speech in Beijing yesterday, highlighting China’s concerns about a global financial system dominated by the dollar.

Fiscal and current-account deficits must be supervised as “your currency is likely to become my problem,” said Zeng, who is now the head of a research center under the government’s top economic planning agency. The People’s Bank of China said June 26 that the International Monetary Fund should manage more of members’ reserves.
Too early, They should remember US consume 25% of world resources and services.