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WHO WILL FINANCE AMERICA’S DEFICIT?

Posted by Gilmour Poincaree on November 17, 2008

 

Nov 13, 2008

by David P Goldman

The United States government needs to borrow US$1 trillion a year, before a new stimulus package, or handouts for the auto industry, or healthcare reform, or a dozen other spending programs promised by the incoming administration of president-elect Barack Obama. Where will the Treasury find the money?

A bizarre jump in the US Treasury’s real cost of borrowing points to severe market disruption if the Treasury deficit continues to rise. It appears that the Treasury market is also a victim of global de-leveraging. The new administration has far less budgetary flexibility that it seems to think. In 1981, under comparable circumstances, Ronald Reagan had far greater room to maneuver. I conclude that the new administration is virtually powerless to prevent marked deterioration of the US economy.

A comparison of Obamanonomics and Reaganomics is instructive. Even in the unlikely event that the Obama administration were to adopt Reagan-style incentives to risk-taking and investment, the effect of such incentives would be weaker and slower to take effect than in 1981-1984.

Exhibit 1: Inflation-indexed 10-year Treasury (TIPS) yield vs 10-year breakeven inflation. Inflation-indexed 10-year Treasury (TIPS) yield vs 10-year breakeven inflation.

As shown in Exhibit 1, the yield of the 10-year inflation-indexed Treasury (TIPS) tripled from 1% to 3% between June and October 2008. Nominal Treasury yields fell slightly, because the inflation-expectations component of Treasury yields (the difference between ordinary 10-year Treasury notes and inflation-indexed TIPS) collapsed, from 250 basis points to less than 100 basis points.

The jump in TIPS yields should ring alarm bells. It is not only that inflation-indexed Treasury yields never have risen so fast and so far since their introduction in 1997. What is most bizarre is that the movement in “real” Treasury yields is not only massive, but in the wrong direction. Both economic theory and all past experience tell us that when economic activity falls, “real” yields also should fall.

Exhibit 2 below shows that 10-year TIPS, or “real” Treasury yields have moved in the same direction as equity market returns. The inflation-adjusted Treasury bond yield is a rough proxy for real long-term interest rates (it is only a proxy because the consumer price index – or CPI – is not necessarily a good measure of inflation). Real rates are supposed to reflect growth expectations; higher growth means higher returns to financial assets, including bonds. TIPS yields are plotted against 12-month returns to the S&P 500. The two lines move together except during the past few weeks, when they take sharply opposed directions.

Exhibit 2: TIPS yields triple while S&P 500 crashes. TIPS yields triple while S&P 500 crashes.

How weird the behavior of TIPS yields has been during the past few months is made even clearer by Exhibit 3, below. We observe that TIPS yields and S&P 500 returns lined up neatly between 2004 and 2008, and suddenly moved in the opposite direction.

 

 

 

 

 

 

Exhibit 3: Scatter plot of TIPS Yields vs 12-month S&P 500 returns, January 2004 through October Scatter plot of TIPS Yields vs 12-month S&P 500 returns, January 2004 through October 20082008.

Just when we should have expected “real” Treasury yields to collapse along with equity market returns, they spiked upwards, and by the largest margin on record. Evidently something has changed, and changed drastically. One component of Treasury yields, expected inflation, has collapsed, and the “real” component has jumped.

There is no question as to why the expected-inflation component has fallen, for it has done so along with the S&P 500 and the main commodity price index (the Constant Maturity Commodities Index published by UBS and Bloomberg). This relationship is shown in Exhibit 4 below.

Exhibit 4: 10-year breakeven inflation, Constant Maturity Commodity Price Index and S&P 500, 10-year breakeven inflation, Constant Maturity Commodity Price Index and S&P 500, February 1, 2008 to November 6, 2008 (normalized).February 1, 2008 to November 6, 2008 (normalized).

Equity, commodity and Treasury bond markets all are registering a deflationary crash in precisely the same way. That seems clear enough. The dog that barked, but shouldn’t have, is the “real” component of Treasury yields.

The answer to the mystery of tripled real Treasury yields is to be found in the collapse of leverage in the global financial system. Indirectly, the rapid expansion of leverage in the global banking system contributed to demand for Treasuries. When de-leveraging commenced in August, an important component of demand for Treasuries declined sharply. That is bad news for Washington, but even worse news is that it will continue to decline sharply, just when Washington most requires global support for the US government debt market.

Global leverage indirectly increased demand for Treasuries in three principal ways:

1. It fed the boom in raw materials prices, increasing demand for Treasuries on the part of central banks as well as financial institutions in commodity-producing countries.

2. It pushed up the value of emerging market currencies, prompting emerging market central banks to intervene in foreign exchange markets by purchasing dollars which then were invested in Treasuries.

3. It contributed to the rise in global equity prices, which prompted investors to diversify their portfolios and purchase safer assets including Treasuries.

The carry trade, in which investors borrow low-interest currencies (dollars or yen) and buy high-interest emerging market currencies, created demand for Treasuries by funneling money into emerging markets that ended up as dollar reserves in their central banks.

Exhibit 5: Net foreign purchases of US Treasury securities, 12-month rolling total. Net foreign purchases of US Treasury securities, 12-month rolling total.

At the peak of demand for US government securities, net foreign purchases of Treasuries came to $400 billion per year, according to the Treasury’s TIC data base (Exhibit 5). Who were the buyers? The Treasury data offers some answers.

 

 

 

 

Exhibit 6: Foreign holdings of US Treasury securities as of August 2008 (US$ billions): total holdings, year-on-year % change, and year-on-year absolute change.

total holdings, year-on-year % change, and year-on-year absolute change.

We observe that the biggest increase came from offshore banking centers (the UK, Switzerland, Luxembourg, and Caribbean banking centers). This tells us little because anyone may transact through such centers. “Other emerging markets”, notably Brazil and other commodity producers, were the second-largest contributor, followed by Japan and the oil exporters.

Private purchases of Treasuries are larger than official flows in recent years, as shown in Exhibit 7:

Exhibit 7: Private vs official net purchases of US Treasury securities. Private vs official net purchases of US Treasury securities.

As noted, private purchases of US Treasuries seem to scale to global wealth. We observe a fairly close relationship between global equity market capitalization (as measured by the MSCI World Index) and private purchases of US Treasuries, as in Exhibit 8.

 

 

 

 

 

Exhibit 8: Private net purchases of US Treasuries scale to MSCI World Index, 1988-2008. Private net purchases of US Treasuries scale to MSCI World Index, 1988-2008.

An exception occurred during the peak of the US equity boom of the late 1990s, when Treasury purchases fell off at the peak of the boom. Evidently this exception reflected the general euphoria of the time and investor preference for riskier assets. We do not have Treasury data past August, and it well may be the case that a similar exception will emerge during the second half of 2008, as foreign investors increase their net purchases of Treasuries while stock markets crash, and for a symmetrically opposite reason. Investors may prefer safer assets.

We cannot directly estimate the impact of de-leveraging on the Treasury market, but it seems clear that the explosion of leverage during the past five years had a profound, if temporary, impact on the world market’s demand for US government securities. As a rough gauge of the growth of global leverage, we observe that between 2003 and 2008, US banks’ claims on foreigners nearly tripled from $1.2 trillion to $3 trillion.

Exhibit 9: American banks’ claims on foreigners. American banks' claims on foreigners.

We can observe in the movement of market prices, though, a close relationship between the breakdown of the carry trade and the rise in real Treasury yields. Withdrawal of leverage from the system forced market participants to liquidate carry trade positions, that is, to unwind short positions in Japanese yen, and to liquidate long positions in carry trade currencies such as the Brazilian real, Turkish lira, South African rand, Australian dollar and so forth. I use the parity of the Brazilian real to Japanese yen as a rough proxy of demand for carry trade. As Exhibit 10 below makes clear, the collapse of the carry trade (the fall of the Brazilian real against the yen) closely tracks the rise in 10-year TIPS yields. The visual relationship is confirmed by econometric analysis.

Exhibit 10: Inflation-indexed (TIPS) Treasury yield vs Brazilian real/yen parity. Inflation-indexed (TIPS) Treasury yield vs Brazilian real/yen parity.

The Treasury market benefited from the explosion of bank leverage during the past 10 years, as emerging market central banks became the most important new buyers of US government securities. De-leveraging and the collapse of commodity markets combine to destroy global demand for Treasuries, limiting the US government’s capacity to borrow from overseas sources.

Other major holders of US Treasury securities are likely to wish to reduce their holdings rather than to increase them. China’s accumulation of foreign reserves represented “rainy day” savings for the nation, and the severity of the present crisis shows how well-advised China was to accumulate a large volume of reserves. China has announced plans to spend the equivalent of 20% of gross domestic product in a stimulus program which is likely to increase the country’s demand for foreign capital goods.

China’s trade surplus is likely to diminish sharply, both due to falling export demand and import growth arising from the stimulus package. Chinese reserves are likely to cease growing and may even decline as a result. Oil-producing countries, moreover, may have to spend reserves in order to maintain import levels as a result of the collapse of oil prices.

Foreign net purchases of US Treasury securities peaked at a $400 billion annual rate, and will fall sharply from this level. Domestic resources to purchase Treasury securities, moreover, are thin. When Ronald Reagan took office, America’s personal savings rate was 10%; today it is around 0%, although it has spiked up in recent months. Disposable income in the US now stands at slightly under $11 trillion. If the US returned to the personal saving rate of 1981, individuals would save $1 trillion a year, enough to fund the Treasury deficit, assuming that all net new portfolio investment flowed into Treasury securities. Nothing, though, would be left over for investment in anything else.

One way to gauge how onerous the Treasury’s borrowing requirements appear compared with available savings is to take the ratio of government borrowing to gross private savings, as in Exhibit 11 below.

Exhibit 11: Federal budget deficit as a % of gross private savings. Federal budget deficit as a % of gross private savings.

We observe that in 1981, the deficit stood at around 15% of gross private savings, and reached 30% at the worst. The deficit already has reached 50% of gross private savings, before the new administration has had the opportunity to increase spending.

In 1981, moreover, the United States was in current account surplus, and foreign purchases of Treasury securities were a very small factor in the financing of the government deficit. Today, the current account deficit (and the corresponding capital account surplus) is almost 6% of GDP.

It is far from clear from whom, and on what terms, the US Treasury will obtain $1 trillion a year, or even more, to finance its deficit. The overseas well has run dry, and domestic financing of the deficit would require a drastic increase in the savings rate at the expense of spending, or outright monetization of the debt by the Federal Reserve.

One way to increase the government savings rate, of course, is to increase taxes, but that is an unlikely course of action during a severe recession.

Monetization of debt remains a possibility, and to some extent would only continue the current trend. Total Federal Reserve Bank credit outstanding has more than doubled in the year to November 6, 2008, rising by $1.2 trillion to $2.06 trillion. This reflects loans, securities purchases, and related actions by the Fed to bail out the financial system. If the deflation persists, the Federal Reserve may be compelled to purchase US government debt.

Another possibility is that risk appetite among investors at home and abroad will continue to fall, inducing a portfolio shift towards Treasury securities. In this case “crowding out” will occur through risk-preference. It will not be so much that competing borrowers are crowded out of the lending market, but that investors will stampede away from risk. In this scenario, even a very low federal funds rate will not help to restore economic activity.

The point of lowering the risk-free rate is to push investors towards riskier assets. In a normal business cycle, falling output leads to lower yields on low-risk bonds, which in turn encourages investors to add risk to their portfolios by investing in businesses. If the safest of all investments, namely US Treasuries, suddenly offer much higher real yields, comparable to the boom years of the late 1990s, why should investors take risk?

In any of these scenarios, the result of global de-leveraging is dire: the more the US government tries to bail out businesses and households, the more bailing out the economy will need. The Bush administration’s response to the financial crisis, and the likely content of the Obama administration’s economic program, will deepen and prolong the economic downturn.

It is not generally remembered that the premise of the Reagan administration’s tax cuts was Robert Mundell’s work on the optimal level of government debt. Mundell, who won the Nobel Prize in 1991 for his work on international economics, observed that an increase in government debt might represent an improvement in market efficiency, if it corresponded to an increase in incomes. That might occur if a reduction in taxes caused an increase in the deficit, while stimulating economic growth. In that case, Mundell argued, a tax cut would increase efficiency if the additional revenues arising from the growth effect were larger than the interest on the bonds issued to cover the ensuing deficit.

In 1981, Ronald Reagan had a very different starting point:

1. The personal savings rate stood at 10%.

2. The current account was in surplus.

3. The top marginal tax rate was 70%.

The capacity of the US and the world to finance an increase in the federal deficit was much greater, and the incentives arising from reducing the top marginal tax rate from 70% to 40% were much greater than any incentives that might be envisioned from tax cuts from the present level.

Even the best-designed economic policy would be hard-put to provide growth incentives without a substantial increase in the savings rate and a corresponding reduction of consumption, implying a very sharp economic contraction. If the Treasury tries to spend its way out of recession, the results are likely to be very disappointing.

David P Goldman was global head of fixed-income research for Banc of America Securities and global head of credit strategy at Credit Suisse.

(Copyright 2008 Asia Times Online (Holdings) Ltd. All rights reserved.

 

CLICK HERE FOR THE ORIGINAL ARTICLE

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PAULSON’S LILLIPUTIAN MOMENT

Posted by Gilmour Poincaree on November 17, 2008

Nov 14, 2008

by Julian Delasantellis (*)

In Jonathan’s Swift’s 1726 novel Gulliver’s Travels, explorer Lemuel Gulliver is shipwrecked off an unknown island; he swims ashore, falls asleep, then awakens, most surprisingly, to find himself tied up by the residents of the Kingdom of Lilliput.

“When I awakened, it was just Day-light. I attempted to rise, but was not able to stir: For as I happen’d to lye on my Back, I found my Arms and Legs were strongly fastened on each Side to the Ground; and my Hair, which was long and thick, tied down in the same Manner. I likewise felt several slender Ligatures across my Body, from my Armpits to my Thighs.”

Who were his captors, the Lilliputians? Not much individually, but acting in unison they had managed to temporarily detain poor Gulliver.

“In a little time I felt something alive moving on my left Leg, which advancing gently forward over my Breast, came almost up to my Chin; when bending my Eyes downwards as much as I could, I perceived it to be a human Creature not six Inches [15 cm] high, with a Bow and Arrow in his hands, and a Quiver at his Back. In the meantime, I felt at least Forty more of the same Kind (as I conjectured) following the first. I was in the utmost Astonishment, and roared so loud, that they all ran back in a Fright; and some of them, as I was afterwards told, were hurt with the Falls they got by leaping from my Sides upon the Ground.”

Beware, Barack Obama. Upon your arrival in Washington on January 20, beings of essentially similar stature (little people in intellectual if not physical stature) will most likely attempt to bind the new president to the inanities of the past. The success, or lack of success, of Obama’s presidency will depend on his ability to cast off the ropes and make his own way in a very strange land.

As Obama promises his daughters a new puppy, and, as a result, luxuriates in the absolute adoration of the American masses, the search on the rightward side of the political spectrum for scapegoats for last week’s electoral catastrophe gathers pace. As usual, the beginning of the search is marked by the formation of a circular firing squad.

Many in the quickly forming “Palin in 2012” avalanche contend that the US Republican Party’s recent dire fortunes were the result of the party, both under George W Bush and John McCain, being insufficiently conservative; an argument similar to that put forward by those who believe Britain lost the Revolutionary War with America because taxes on tea were too low.

Of course, the counter-argument states that the electoral defeats were inevitable once the United States stumbled and fell into the yawning chasm that was the world financial train wreck which followed upon the failure of the Lehman Brothers’ investment banking house on September 15 (see Silences say it all, Asia Times Online, September 16, 2008)

Only now do we recognize what we did not see in the immediate hours following Lehman’s downfall – that the unknown quantity and ownership of the credit default swaps (CDSs) that were activated upon Lehman’s bankruptcy filing cast such a dark pall of default risk over the entirety of private world finance that everybody with a financial stake in the system greater than just a few coins in their pockets started looking for the exits, and the exits just weren’t big enough to handle the stampeding horde.

In the 19 trading days between Lehman’s fall and the lows on October 10, the US Dow Jones Industrial Average lost more than 3,000 points, almost 32% of its value. Foreign stock markets, for those Americans who fell victim to the brokerage houses’ siren song that overseas diversification equaled safety, fared even worse, with Japan’s Nikkei 225 average down 42% from Lehman’s filing to its lows on October 28. Not Joe the Plumber, had he been in possession of an actual plumber’s license, could have snaked out the pipes that the McCain campaign then fell into and remained in right through to election day.

In a long article in the Washington Post the day after the election, reporter Anne Kornbluth provided an inside look on how those two weeks irrevocably transformed both the campaign, and John McCain’s prospects.

Sen Barack Obama, so steady in public, did not hide his vexation when he summoned his top advisers to meet with him in Chicago on September 14.

His general-election campaign had gone stale. For weeks, he had watched Sen John McCain suction up the oxygen in the race, driving the news coverage after the boisterous Republican convention in St Paul, Minnesota, and suddenly drawing huge crowds with his new running mate, Alaska Governor Sarah Palin. … And then, the next morning, a global earthquake hit: Lehman Brothers, the giant investment firm, filed for bankruptcy, triggering the biggest corporate collapse in US history and an international financial meltdown, and transforming the presidential race. It was a moment neither the senator from Illinois nor his advisers had anticipated, but one for which they were uniquely prepared.

In the days that followed, the newly chastised Obama team became more aggressive, with a message they had refined over the summer. The candidate himself, criticized as too cool, too cerebral and too detached, suddenly had the opportunity to show those qualities to be reassuring and presidential. For McCain, already struggling with the economic issue, the Wall Street meltdown became part of a much different narrative. By the time the senator from Arizona made the surprise announcement on September 24 that he would suspend his campaign, a powerful image had been framed: of an ‘erratic’, older Republican who could not be trusted to handle a crisis, economic or otherwise. In a race that had been thought to be even, the polls showed Obama to be pulling ahead, a lead that he would not relinquish through three debates and the election’s closing weeks.

The question then becomes, if it was then Lehman chief executive Richard Fuld’s destiny to essentially don a suicide bomber’s vest and go blow up Republican chances in the election, why wasn’t Lehman saved? After all, US Treasury Secretary Henry Paulson had already engineered the rescue of Bear Stearns in March (see A risk-free revolution, Asia Times Online, April 2, 2008) and set the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac down the road towards an inevitable de facto full government ownership in mid-summer. Why wasn’t the rescue of Lehman the third-time charm?

Paulson couldn’t rescue Lehman. He had been tied up by the Lilliputians.

What a sad destiny it must be to be a teacher of history in America, a place that despises the very concept of history, a land where it is well believed that the history of the past can and should be regularly altered in order to serve the necessities of the present.

To a certain extent, being a teacher, or even someone who respects and cherishes history in this circumstance is like being the proprietor of an ice-cream fountain in a city wholly populated by the lactose intolerant, for it seems that Americans have the same reaction to accepting the lessons of history, even recent history, as the bodies of the people who can’t metabolize the key ingredient of a milkshake.

Those who say that Lehman should have been saved have already forgotten the history of the late summer. Beginning with the rescue of Bear Stearns in March, but especially gaining force with the pre-rescue (when the government’s commitment to their solvency was made just a bit more explicit than previously, leading up to the receiving an pledge of full government backing in early September) of the GSEs in mid-July, a bellowing bedlam, caterwauling cacophony was heard from America’s well-cosseted chattering classes that there was something wrong with all these interventions.

It was all supposedly so un-American, they bleated on their blogs, and on cable news shows. Where was the great tradition of rugged American individualism, of the nation where the failures of some cleared away the underbrush for the glorious successes promised by God for the entrepreneurial class of the chosen people on John Winthrop’s Shining City on a Hill-blah-blah-blah?

In what was still the bitterly polarized America of the pre-Obama age (that obviously no longer exists – this is now apparently a country of 300 million souls all in mad, squealing, passionate love with each other), the government rescues inevitably got sucked into the mire.

A movement developed around Tennessee Republican Senator Jim Bunning, then spread to the editorial pages of the Wall Street Journal and beyond, trumpeting the supposedly pure, unfettered capitalism of a fantasy bygone age. This movement saw the ideological combat that would attend the autumn’s election contest, searched desperately for a weapon to hold on to in the trenches, even if it was just imaginary. For the Democrats and liberals, this was all just schadenfreude, the joy they got from the right’s misfortune.

If Paulson had had any sense, or if Bush had still been able to summon up but one last measure of the steely-eyed/brook-no-dissent determination that led America into its catastrophic Iraq quagmire, all this palaver would have meant little. Neither was the case. Whoever was in charge of the US executive branch in late summer, they attended to the dopey din and rather explicitly let the message slip that the cupboard was bare for all future rescues.

I noted this determination to let the free markets do their damnest without the prospect of government assistance in late August (see Tough love’s fatal attraction, Asia Times Online, August 27, 2008); by the time the GSE’s were brought fully under the Federal Reserve’s wing on the weekend of September 6-7, the resolve was even stronger.

Thus, when the great captains of American finance capital were summoned to the fortress-like redoubt of the New York Federal Reserve Bank the following weekend, the private-sector bankers were stunned to learn that it was the government’s plan, very unlike the case of Bear Stearns in March, to have them, not the public sector, rescue Lehman. This they were not willing to do;
government and the bankers bickered all weekend; when it became clear that neither side was going to turn away from their positions at the last minute, this adolescent-like game of chicken ended with Lehman filing for bankruptcy and the whole world crashing.

What cautionary tale does this provide Obama?

Living on America’s west coast gives one a unique perspective to the current concept of what political consultants call the “24-hour news cycle” – throwing up for grabs each day a new, separate, discreet contest for the political actors to win or lose. Thus, as the radio political talk shows here are signing off at midnight, on the east coast it’s 3am, and the newspapers that will define the next day’s contests are starting to roll off the presses; 5am east coast time sees the cable news networks open their sleepy eyes; at 7am comes the national morning broadcast network chat shows, and with that the battle for that day is fully joined.

Who are the contestants which take the field of battle? Well, now America essentially has six network news operations, with CNN, FOX and MSNBC supplanting the three traditional networks (MSNBC and NBC News operate independently, well at least sometimes they do) and many fewer newspapers and newspaper journalists than previously.

What is new is the whole new population of Internet-generated and delivered content, whose material goes a long way towards determining who will win or lose the day’s debate. You have news sites operated by the traditional networks, which regularly produce content that never makes it onto the air; news blogs, opinion blogs, combinations of the two; many times all are cross-pollinating their existence by their perpetrators appearing on the afternoon shows on the cable news networks.

Whatever the qualifications are to be included in this brood, it is obvious that to hew to the zeitgeist of the time by being an honest-to-God breathing, bleating pundit, knowing anything about what you are talking about in a specialized subject is not one of them. It is far more important to be able to fill up the dead air until the next commercial break with derogatory and incendiary rhetoric about your ideological opponent.

When this group, having no knowledge of the dire situation that the financial markets were in, and caring not a whit about that state of ignorance, made it a cause celebre to oppose all new “bailouts” as a betrayal of the people’s will, and when Paulson, seeing that he was losing these daily media engagements, listened to them, the die was cast for Lehman and the markets.

Paulson soon did a quick volte face and saved AIG, then just about everybody else in the markets who could get their fingers onto a federal check, but by then the dam had burst, and the world had flooded. (Paulson did another about-face on Wednesday, when, in response to the massive unpopularity of his Troubled Asset Relief Program, or TARP, he scrapped the program’s original focus on buying distressed mortgage securities from the banks in favor of the much more questionably effective action, but one in line with current thinking, of taking equity shares in banks.)

It might be a surprising argument for a pundit like me to argue that pundits should be ignored. Of course, with my finely honed pundit skills (don’t try this at home), I could cut the Gordian knot by arguing that only Asia Times Online pundits are worth taking seriously.

After the February 1, 2003 Columbia Space Shuttle tragedy, when the vehicle disintegrated during re-entry, killing all seven crew members, one pundit actually opined that this had made the obviously upcoming Iraq invasion by the US less likely, as it dimmed Americans’ faith in the promises of technology and, by extension, techno-war. Nothing was further from the truth; we now know (to me, it was pretty obvious then) that it was only blood that would quench the raging Oedipal fire consuming President George W Bush’s soul.

Still, the Bush that ignored the pundit class in 2003, and in doing so drove America off a cliff in Iraq in 2003, followed the same class to the letter in not rescuing Lehman in September, and, in doing so, proceeded to once again drive both the world economy and his party right off a precipice.

When, president-elect Obama must wonder, should the pundits be listened to, and when they should be ignored?

The answer lies in the mostly ignored issue of how the public at large views the punditry’s histrionics. Some react like fans of the exhibition that is American professional wrestling, fervently wishing that the pundit on their side break an aluminum folding chair over the head of their hated opponent. However, for most, these ideological spectacles are roughly equivalent to the roar of a huge bear when the circus trainer has him up on one leg on a stool and is taunting him with a whip and chair – it is for them pure escapist, mindless entertainment.

So the modern version of Machiavelli’s Prince should adhere to the people’s, as opposed to the pundits’, views? How? Through reading polls? That’s the last thing one should do. A public policy wholly designed around poll results would resemble that of a manic depressive simultaneously taking a full regimen of both tranquilizers and stimulants. Americans regularly report to pollsters wildly inconsistent and unreal beliefs, such as wanting both higher government spending and lower taxes, or that all of the country’s fiscal difficulties could be solved if only the foreign-aid budget that only benefits “all those foreigners” was slashed (at around US$30 billion, the foreign-aid budget is less than 1% of the Federal budget, as opposed to the current modest estimate of a nearly $500 billion deficit for fiscal year 2009).

No, what a great leader must do is to fire the pollsters and polemicists and find out where the people really want to be led. Conservatives think that a candidate advocating higher taxes is automatically taking a deep drink from a hemlock-filled chalice, but what the people really won’t accept is higher taxes disappearing into the miasma of the bureaucracy without seeing any benefit.

Currently, the punditocracy is working itself into its usual frothy lather over the pending rescue of General Motors that will soon emerge from the upcoming lame-duck session of the US Congress, claiming it as another bailout betraying free-market principles. The people, on the other hand, would see the possible million or more prompt job losses that would ripple through the auto industry and its suppliers in the event of total GM shutdown, and wonder why the politicians are waiting so long to act.

As the players enter Center Court at the All England Lawn Tennis and Croquet Club, more commonly known as Wimbledon, they are given advice in the form of a sign containing excerpts from If, the Rudyard Kipling poem written in 1895:

,blockquote>If you can meet with triumph and disaster

And treat these two imposters just the same …

Yours is the earth and everything that’s in it

And – which is more – you’ll be a man, my son.

And if Obama can meet and overcome the challenge of the legions of fatuous haranguing imposters, of both the right and left, who all day and night pollute the public square with their unending, ultimately pointless bloviations, he’ll be a great president.

(*) – Julian Delasantellis is a management consultant, private investor and educator in international business in the US state of Washington.

(Copyright 2008 Asia Times Online (Holdings) Ltd. All rights reserved.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘ASIA TIMES’ (Hong Kong – China)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, ECONOMIC CONJUNCTURE, ECONOMY, ELECTIONS 2008 - USA, FINANCIAL CRISIS - USA - 2008/2009, FOREIGN POLICIES - USA, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, TRADE DEFICIT - USA | Leave a Comment »

BLIND LEADING THE ONE-EYED

Posted by Gilmour Poincaree on November 17, 2008

Nov 18, 2008

by Chan Akya

My worst fears about the weekend gathering in Washington of world leaders to discuss the financial THE PARABLE OF THE BLIND - painting by Bruegelcrisis were realized overnight when the statement after their meeting was released. It contained a host of generic fluff and very little mention of the specific actions required to tackle the gargantuan economic problems of today.

The statement accompanying the meeting, held under the Group of 20 (G-20) banner, could have been put together by a bunch of first-year economics students. It probably was, but that’s not what worries me about the initiative. In the opening part of the statement, the following section seemed positive: “Our work will be guided by a shared belief that market principles, open trade and investment regimes, and effectively regulated financial markets foster the dynamism, innovation, and entrepreneurship that are essential for economic growth, employment, and poverty reduction.”

After paying lip service to the idea of free market principles in the introduction, every aspect of the statement from then on relates to market, fiscal and monetary intervention on an epic scale by the assembled bureaucrats. In the next section on “root causes of the current crisis” is the following gem:

Major underlying factors to the current situation were, among others, inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms, which led to unsustainable global macroeconomic outcomes. These developments, together, contributed to excesses and ultimately resulted in severe market disruption.

Right there you have the prevailing notion that government intervention is what will help the global THE PARABLE OF THE BLIND - by the Greenwich Workshopeconomic system recover; indeed it was the absence of dialogue between these super-smart folks that led us to the current swamp. In related news, pigs were seen flying over Washington all day, but I digress.

Discussing “Actions taken and to be taken”, the statement goes on to say the following, laying the grounds for justifying pretty much any action by any government anywhere in the world but more importantly also bringing in the widely discredited multilateral agencies such as the International Monetary Fund (IMF) back into the global picture: “As immediate steps to achieve these objectives, as well as to address longer-term challenges, we will:

– Continue our vigorous efforts and take whatever further actions are necessary to stabilize the financial system.

– Recognize the importance of monetary policy support, as deemed appropriate to domestic conditions.

– Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability.

– Help emerging and developing economies gain access to finance in current difficult financial conditions, including through liquidity facilities and program support. We stress the International Monetary Fund’s important role in crisis response, welcome its new short-term liquidity facility, and urge the ongoing review of its instruments and facilities to ensure flexibility.

– Encourage the World Bank and other multilateral development banks (MDBs) to use their full capacity THE PARABLE OF THE BLIND - A Belgian stampin support of their development agenda, and we welcome the recent introduction of new facilities by the World Bank in the areas of infrastructure and trade finance.

– Ensure that the IMF, World Bank and other MDBs have sufficient resources to continue playing their role in overcoming the crisis.”

Right here we have the makings of a return to the world economic order of yore, namely for the governments of the Group of Seven (G-7) leading industrialized nations to continue their spendthrift ways banking on the savings of emerging countries, while the latter remain happy in their role as supplicants to the global economy rather than assuming a leading role as is warranted by current fundamentals.

The return of international finance’s Terrible Twins is further proof of a hankering for the orthodoxy of export-oriented emerging economies securing access to financing as arranged by these shoddy bankers. It is amazing to me that countries like South Korea, Brazil and India signed up to this nonsense despite the very real structural problems created by these very programs in the recent past for these countries by the IMF.

Against these ideas there is an alternative of emerging countries floating their currencies and relying on internal consumption, which would predicate increased capital inflows for emerging countries at the cost of increasing capital costs for G-7 members. This option was apparently never even brought up in the meeting.

Secondly, the idea that emerging countries face multiple tariff barriers that keep millions in poverty was also not sufficiently discussed in the Washington meeting. To wit, Europe’s Common Agricultural Policy (CAP) is singularly responsible for the poverty, starvation and malnutrition of millions of people in Africa and Latin America, yet there was not a mention of this unfair trade barrier in the Washington meeting. Instead, the idea of circling back to the status quo in one form or another appears to have taken precedence.

Reforming financial markets

Something must have gone wrong in Washington because the next section of the statement relating THE PARABLE OF THE BLIND - by Shannon Larrattto financial system reforms actually makes sense in places. I am guessing this was simply an oversight by the assembled officials; actual implementation will probably fail to follow any of the principles laid down. Paragraph 9, which details the common principles of reform, has the following five guiding headlines:

1. Strengthening transparency and accountability.

2. Enhancing sound regulation.

3. Promoting integrity in financial markets.

4. Reinforcing international cooperation.

5. Reforming international financial institutions.

I am really happy to note in this section that European attempts to reduce disclosure on financial assets by banks have come to naught. The 2009 leadership of Brazil, the United Kingdom and Korea to implement a series of recommendations will coordinate the G-20 Finance Ministers Group. Personally, I found that trio an odd choice, with only Brazil having a functioning financial system not overwhelmed by near-term liabilities. Then again, finding countries with relatively unstressed financial systems is a fairly difficult matter and perhaps the assembled leaders wanted to have people with sufficient experience of pain – for example the UK – participating in the recovery plans. That seems fine overall. The specific areas of recommendations being laid out are as under:

“Mitigating against pro-cyclicality in regulatory policy.

Reviewing and aligning global accounting standards, particularly for complex securities in times of stress.

Strengthening the resilience and transparency of credit derivatives markets and reducing their systemic risks, including by improving the infrastructure of over-the-counter markets.

Reviewing compensation practices as they relate to incentives for risk taking and innovation.

Reviewing the mandates, governance, and resource requirements of the IFIs [international financial institutions].

Defining the scope of systemically important institutions and determining their appropriate regulation or oversight.”

The next section on Open Global Economy isn’t worth reading, containing as it does platitudes about the World Trade Organization, the Doha round and so on without any substantive discussion on handling current conflicts on tariff barriers and capital flows.

The rest of the document deals with specific recommendations relating to the implementation of the five principles of reform as laid out previously. Of these, the move towards accounting standardization will help resolve a number of capital flow constraints, regulatory arbitrage and other egregious misuses of fiduciary principles in the financial markets.

Another welcome initiative in the financial market section is the reform of the over-the-counter market for credit default swaps (CDS), which will almost surely move to an exchange-traded or electronic trading format in the next few months. The need for this market is paramount more now than ever before, and I am happy that the G-20 has understood the rationale for a continued broadening of this market, rather than a reversal or even a shutdown as was suggested by a number of government officials in the US and Europe of late.

Missed opportunity

Overall, the G-20 meeting strikes me a missed opportunity for discussing a broadening of the world’s economic engine by inculcating stronger measures towards consumption in emerging countries and moving them away from the IMF-orthodoxy of remaining suppliers of cheap goods to developed countries.

Failures in the financial system need to be addressed, but the root cause of a misallocation of capital ONE-EYED ILLYfrom high-growth areas to lower-growth areas, that is from savers in countries like China, Brazil and India to the overextended consumers and pensioners of the US and Europe, was not discussed let alone addressed.

The coming wave of Keynesian spending across the world will only intensify this misallocation of capital as emerging countries continue to hold nearly worthless pieces of government debt issued by G-7 countries in return for vacuous promises of continued economic growth.

Then again, perhaps it is not the G-7 countries that are to blame for suggesting ways of keeping themselves economically relevant; such moves after all reflect their self-preservation instinct. What galls me is that leaders of countries such as Brazil, China and India bought into this malarkey.

(Copyright 2008 Asia Times Online (Holdings) Ltd. All rights reserved.

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PUBLISHED BY ‘ASIA TIMES’ (Hong Kong – China)

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BRASIL, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, G20, IMF, INDIA, INTERNATIONAL, INTERNATIONAL RELATIONS, NORTH AMERICA, SOUTH KOREA, THE FLOW OF INVESTMENTS, USA, WORLD BANK | Leave a Comment »

SENATE TO PROBE ‘SLOW’ DROP IN FUEL PRICES (Philippines)

Posted by Gilmour Poincaree on November 17, 2008

Thursday, November 13, 2008

by Efren L. Danao

The Senate committees on energy and on trade and industry will investigate why big oil companies did not make any significant cut in their prices of fuel commensurate to the drop in global oil price reductions.

The move came after Sen. Juan Ponce Enrile delivered a privileged speech questioning why local pump prices did not go down fast enough and low enough to reflect their international prices.

“There is basis to suspect that they are manipulating their prices and inventories,” he said.

He noted that oil companies are now buying a barrel of oil at $55.01, compared to $140 in July. He also cited the drop in the prices of diesel and regular fuel oil by 56 percent and 63 percent, respectively, at the Mean of Platts Singapore, which serves as the basis of prices of imported refined petroleum products.

“However, our domestic products dropped by a mere P18 or 31 percent for diesel and by P12 or 26 percent for regular fuel oil,” he charged.

He also cited the drop in the price of liquefied petroleum gas (LPG) from $804 per metric ton last month to between $314 and $490.

“According to reports, the price of LPG could still be cut by as much as P191 for an 11-kilo tank,” he said.

Enrile also wanted the joint inquiry to look into the reasons for the “distortion” or discrepancy in the reduction of fuel prices between diesel and regular fuel oil.

“The price gap has narrowed down to only 22 percent while this used to be 40 [percent] to 50 percent in previous years. This discrepancy has resulted in an uneven playing field within the transportation sector,” he said.

He called for the Senate to find the best way to maintain stability in the prices of fuel.

Sen. Richard Gordon blamed the slow and small drop in local oil prices to “price gouging” by oil firms.”

“They are fast in increasing their oil prices but very slow in price cuts,” he said.

Senate Minority Leader Aquilino Pimentel Jr. said that an oil-rich country, Abu Dhabi, is now going into nuclear power, which he called a bad sign for the future of oil.

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PUBLISHED BY ‘THE MANILA’ (Philippines)

Posted in COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, GASOLINE, INDUSTRIES, INTERNATIONAL, PHILIPPINES, REGULATIONS AND BUSINESS TRANSPARENCY | Leave a Comment »

FILIPINOS’ PESSIMISM UP — MASTERCARD POLL

Posted by Gilmour Poincaree on November 17, 2008

11/13/2008

Filipino consumers have grown more despondent and are among the most pessimistic in Asia with a BREATH/VOLUME MOMENTUM OSCILLATORconfidence index of 40 against a 47.4 average in the region during the first half and from a far higher 67.7 a year ago, results from the latest MasterCard Worldwide Index of Consumer Confidence released yesterday showed.

Most Asian consumers are pessimistic on the six month period ahead, the survey showed.

While consumers in Vietnam, China, India and Singapore relatively remained optimistic; Hong Kong and Taiwan consumers registered steep declines in consumer confidence levels.

Consumer confidence across the region has dropped seven points from six months ago, as a result of current economic volatility and the prospect of a global economic recession.

The current regional consumer confidence score of 47.4 is significantly below the score six months ago of 55 and a year ago of 67.3, according to Mastercard.

The level, however, remained higher than the 1997-1998 Asian economic crisis average of 32.3.

Overall consumer outlook has also fallen across the five indicators that make up the index compared to six months ago: employment (41.2 vs 54.2 six months ago), economy (42.1 vs 51.8), quality of life (44.0 vs 48.2) and the stock market (45.5 vs 53.4) and regular income (64.3 vs 72.2).

The index is based on a survey which measures consumer confidence on prevailing expectation in the market for the next six months. It is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.

Only four out of the 14 markets surveyed — Vietnam, China, India and Singapore — were optimistic SHOPPERSabout the first half of next year. Vietnam tops the index with a score of 88.1 and the only market that has increased its score from six months ago.

China (76.6), India (63.9) and Singapore (62.3) remain optimistic about the first half of 2009 but they are less optimistic than they were six months ago (China: 82.7; India: 82.1; Singapore: 87.3).

Thai consumers continue to be pessimistic, though confidence levels have risen slightly from six months ago (23.7). The current score is, however, much lower than a year ago (44.2).

At the other end of the spectrum, nine markets are pessimistic about the first half of 2009, with Hong Kong (41.8 vs. 83.1 six months ago) and Taiwan (32.1 vs. 71.3 six months ago) recording the biggest declines.

“Consumers across AsiaPacific are clearly feeling the effects of the global credit crisis. While Asian financial institutions may be less affected by the global credit crunch and the financial sector melt down, Asian markets have been just as severely suffered the impact; and the regional powerhouses like China and India are equally affected. While the consumer confidence scores in China and India are still optimistic, confidence levels are still much lower than they were before,” Dr Yuwa Hedrick-Wong, economic advisor to MasterCard in Asia-Pacific said.

The latest survey was conducted from Sept. 1 to 29 2008 and involved 6,019 consumers across 14 key Asia-Pacific markets.

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PUBLISHED BY ‘THE DAILY TRIBUNE’ (Philippines)

Posted in CHINA, COMMERCE, COMMODITIES MARKET, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, FORMOSA - TAIWAN, INDIA, INTERNATIONAL, PHILIPPINES, SINGAPORE, THAILAND, VIETNAM | Leave a Comment »

SINGAPORE WELCOMES THOSE AFFECTED BY ECONOMIC DOWNTURN – One of Asia’s Largest Business & Financial Hubs Presents Diverse Educational and Work Opportunities for Americans Hit by Financial Crisis

Posted by Gilmour Poincaree on November 17, 2008

11-13-2008

Copyright: PR Newswire

Source: PR Newswire

Wordcount: 739

NEW YORK, Nov. 13 /PRNewswire/ – As discussions continue over the future of America’s financial and SINGAPOREeconomic stability, Singapore is stepping up efforts to provide education and work options, especially for those affected by retrenchments in the banking sector.

As the Gateway to Asia, Singapore thrives as a business and financial hub, housing more than 7,000 multinational corporations with some 60% basing their Asia Pacific regional headquarters there. The country has been ranked three times by the World Bank as the “Easiest place to do business in the world”. Hong Kong-based Political & Economic Risk Consultancy recently ranked Singapore as having the least political and social risk, well-positioning the country to weather the economic slowdown. Its economic growth in 2007 was an impressive 7.7% (as compared to USA’s 3.1%) and is projected to grow by approximately 3% despite the downturn.

Leveraging on these advantages and supporting Singapore’s talent attraction efforts is its Global Schoolhouse, comprising of renowned local and foreign universities that have set up campuses such as University of Chicago Booth School of Business, University of Nevada Las Vegas (UNLV) and New York University Tisch School of the Arts. In 2007, Singapore welcomed 86,000 international students.

New courses have been specifically created to cater to working professionals at crossroads in their career and keen to explore international options. The Asia campus of UNLV has created a 3-week course titled “Gateways to Cultures of Asia” specifically designed for professionals seeking business or employment opportunities in the hospitality industry in Asia. The National University of Singapore offers a 6-week program titled “Asian Perspective: Learn Mandarin and Uncover Southeast Asia” allowing students to study Mandarin and gain valuable insight into Southeast Asia.

In today’s globalized marketplace, foreign languages, overseas study and international work have proven to be highly sought-after experiences, giving job-seekers an edge in the competitive job market. Cameron Frazier of San Francisco, an executive who attained an Executive MBA in Singapore with The University of Chicago Booth School of Business, built a global career foundation by pursuing international study. “Studying in Singapore was a great experience — it gave me a new perspective of the world, made several friends, and I enjoyed the food and neighborhoods there very much. I was offered a job in the USA whilst studying in Singapore and the overseas experience did help in the job-selection process as it’s something fairly unique for Americans,” said Mr. Frazier.

For those keen on pursuing long-term work opportunities in Singapore, Contact Singapore is an agency that provides a one-stop online portal to connect global talent with employers in Singapore. Career @ Singapore offers a range of career opportunities in several sectors including the financial industry. For further information, visit http://contactsingapore.jobscentral.com.sg/.

It is also easy to study, live and work in Singapore. Singapore has an open visa policy for North Americans — visit http://www.ecitizen.gov.sg/nonresidents/ for more information. The Work Holiday Program allows approved applicants to live and work in Singapore for up to 6 months — visit http://www.contactsingapore.sg/whpsingapore/. Education programs in Singapore are also cost-effective with favorable exchange rates to the U.S. dollar.

About Singapore Education

Singapore Education is a multi-government agency initiative launched by the Singapore Government in 2003 to establish and promote Singapore as a premier education hub and help international students make an informed decision on studying in Singapore. This initiative is led by the Singapore Economic Development Board and supported by the Singapore Tourism Board, SPRING Singapore, International Enterprise Singapore and the Ministry of Education. For more information, visit www.singaporeedu.gov.sg or email STB_Education_Services@stb.gov.sg.

About Contact Singapore

Contact Singapore is an alliance of the Singapore Economic Development Board and Ministry of Manpower. It aims to attract global talent to work, invest and live in Singapore. With offices in the Asia Pacific, Europe and North America, Contact Singapore is the one-stop centre for those who wish to pursue a rewarding career in Singapore, as well as individuals and entrepreneurs who are keen to invest in or initiate new business activities here. Contact Singapore actively links Singapore-based employers with global talent and provides updates on career opportunities and industry developments in Singapore. For more information, visit www.contactsingapore.sg.

SOURCE Singapore Tourism Board

CONTACT: H&S Public Relations, Aik Wye Ng, or Maria Castro, both for Singapore Tourism Board, +1-212-754-6500; or Singapore Tourism Board, Wen Ee Lim, +1-212-302-4861.

This is a news service of Thomson Business Intelligence Service ©2006.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘INSURANCE NEWS NET’ (Malaysia)

Posted in BANKING SYSTEMS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, INTERNATIONAL, SINGAPORE, THE FLOW OF INVESTMENTS | Leave a Comment »

SINGAPORE WELCOMES THOSE AFFECTED BY ECONOMIC DOWNTURN – One of Asia’s Largest Business & Financial Hubs Presents Diverse Educational and Work Opportunities for Americans Hit by Financial Crisis

Posted by Gilmour Poincaree on November 17, 2008

11-13-2008

Copyright: PR Newswire

Source: PR Newswire

Wordcount: 739

NEW YORK, Nov. 13 /PRNewswire/ – As discussions continue over the future of America’s financial and SINGAPOREeconomic stability, Singapore is stepping up efforts to provide education and work options, especially for those affected by retrenchments in the banking sector.

As the Gateway to Asia, Singapore thrives as a business and financial hub, housing more than 7,000 multinational corporations with some 60% basing their Asia Pacific regional headquarters there. The country has been ranked three times by the World Bank as the “Easiest place to do business in the world”. Hong Kong-based Political & Economic Risk Consultancy recently ranked Singapore as having the least political and social risk, well-positioning the country to weather the economic slowdown. Its economic growth in 2007 was an impressive 7.7% (as compared to USA’s 3.1%) and is projected to grow by approximately 3% despite the downturn.

Leveraging on these advantages and supporting Singapore’s talent attraction efforts is its Global Schoolhouse, comprising of renowned local and foreign universities that have set up campuses such as University of Chicago Booth School of Business, University of Nevada Las Vegas (UNLV) and New York University Tisch School of the Arts. In 2007, Singapore welcomed 86,000 international students.

New courses have been specifically created to cater to working professionals at crossroads in their career and keen to explore international options. The Asia campus of UNLV has created a 3-week course titled “Gateways to Cultures of Asia” specifically designed for professionals seeking business or employment opportunities in the hospitality industry in Asia. The National University of Singapore offers a 6-week program titled “Asian Perspective: Learn Mandarin and Uncover Southeast Asia” allowing students to study Mandarin and gain valuable insight into Southeast Asia.

In today’s globalized marketplace, foreign languages, overseas study and international work have proven to be highly sought-after experiences, giving job-seekers an edge in the competitive job market. Cameron Frazier of San Francisco, an executive who attained an Executive MBA in Singapore with The University of Chicago Booth School of Business, built a global career foundation by pursuing international study. “Studying in Singapore was a great experience — it gave me a new perspective of the world, made several friends, and I enjoyed the food and neighborhoods there very much. I was offered a job in the USA whilst studying in Singapore and the overseas experience did help in the job-selection process as it’s something fairly unique for Americans,” said Mr. Frazier.

For those keen on pursuing long-term work opportunities in Singapore, Contact Singapore is an agency that provides a one-stop online portal to connect global talent with employers in Singapore. Career @ Singapore offers a range of career opportunities in several sectors including the financial industry. For further information, visit http://contactsingapore.jobscentral.com.sg/.

It is also easy to study, live and work in Singapore. Singapore has an open visa policy for North Americans — visit http://www.ecitizen.gov.sg/nonresidents/ for more information. The Work Holiday Program allows approved applicants to live and work in Singapore for up to 6 months — visit http://www.contactsingapore.sg/whpsingapore/. Education programs in Singapore are also cost-effective with favorable exchange rates to the U.S. dollar.

About Singapore Education

Singapore Education is a multi-government agency initiative launched by the Singapore Government in 2003 to establish and promote Singapore as a premier education hub and help international students make an informed decision on studying in Singapore. This initiative is led by the Singapore Economic Development Board and supported by the Singapore Tourism Board, SPRING Singapore, International Enterprise Singapore and the Ministry of Education. For more information, visit www.singaporeedu.gov.sg or email STB_Education_Services@stb.gov.sg.

About Contact Singapore

Contact Singapore is an alliance of the Singapore Economic Development Board and Ministry of Manpower. It aims to attract global talent to work, invest and live in Singapore. With offices in the Asia Pacific, Europe and North America, Contact Singapore is the one-stop centre for those who wish to pursue a rewarding career in Singapore, as well as individuals and entrepreneurs who are keen to invest in or initiate new business activities here. Contact Singapore actively links Singapore-based employers with global talent and provides updates on career opportunities and industry developments in Singapore. For more information, visit www.contactsingapore.sg.

SOURCE Singapore Tourism Board

CONTACT: H&S Public Relations, Aik Wye Ng, or Maria Castro, both for Singapore Tourism Board, +1-212-754-6500; or Singapore Tourism Board, Wen Ee Lim, +1-212-302-4861.

This is a news service of Thomson Business Intelligence Service ©2006.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘INSURANCE NEWS NET’ (Malaysia)

Posted in BANKING SYSTEMS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, INTERNATIONAL, SINGAPORE, THE FLOW OF INVESTMENTS | Leave a Comment »

SEN. CLINTON’S VIEWS ON U.S. FOREIGN POLICY ISSUES

Posted by Gilmour Poincaree on November 17, 2008

Saturday November 15, 2008

WASHINGTON (Reuters) – Sen. Hillary Clinton has emerged as a candidate for U.S. secretary of state – SENATOR HILLARY CLINTONthe top diplomat in the administration of President-elect Barack Obama, who defeated her for the Democratic presidential nomination.

Here are some views on foreign policy issues expressed by Clinton, wife of former President Bill Clinton.

IRAQ

“Ending the war in Iraq is the first step toward restoring the United States’ global leadership,” Clinton wrote a year ago in an article in Foreign Affairs magazine. U.S. troops had to be brought home safely and stability restored to the region, she said.

But on the campaign trail, Clinton was more reluctant than Obama to commit to a firm timetable for withdrawing U.S. troops from Iraq. She refused to apologize for her 2002 Senate vote authorizing the war, but did say she would like to have that vote back to do over.

AFGHANISTAN, PAKISTAN AND AL QAEDA

During the campaign for the Democratic presidential nomination, Clinton, a member of the Senate Armed Services Committee, said the United States should focus more on improving security in Afghanistan. She has called for greater U.S. troop deployments there. She also has suggested a U.S. envoy who could shuttle between the leaders of Afghanistan and Pakistan to help them in their efforts against a resurgent Taliban and al Qaeda presence in their countries.

IRAN

A big question for Obama’s secretary of state will be how to approach Iran. The Bush administration, which accuses Iran of seeking to build a nuclear bomb and helping militant groups in Iraq, has generally HILLARY RODHAM CLINTONshunned contacts with Tehran.

During the Democratic presidential primary campaign, Clinton charged that Obama’s willingness to meet leaders of Iran, Syria and North Korea was evidence of his naivete about foreign policy. She has threatened to “obliterate” Iran if it uses nuclear weapons against Israel.

But Clinton also has argued for engaging Iran, Syria and other countries of the region in talks about the future of Iraq. And one of her top foreign policy advisors, Richard Holbrooke, a former assistant secretary of state, suggested recently that U.S. contacts with Iran should start through private and confidential channels to determine if there is a basis for continuing.

MIDDLE EAST

Clinton stresses the need for Arab-Israeli peace, but is considered a favorite of the pro-Israel lobby in the United States. She says the fundamentals are a Palestinian state in Gaza and the West Bank in return for a declaration that the conflict is over, recognition of Israel’s right to exist, guarantees of Israeli security, diplomatic recognition of Israel and normalization of its relations with Arab states.

“U.S. diplomacy is critical in helping to resolve this conflict,” she said in her article in Foreign Affairs in November-December 2007. She said the United States should help get Arab support for a Palestinian leadership that is willing to engage in a dialogue with the Israelis.

RUSSIA AND ARMS CONTROL

“I think she would probably be tough-minded toward Russia,” said Kim Holmes, vice president of foreign and defense policy studies at the Heritage Foundation. “She has a reputation of being tough-minded generally, she is known and respected for that.”

Clinton has however criticized the Bush administration’s “obsessive” focus on “expensive and unproven missile defense technology” — one of the major points of contention recently in the U.S. relationship with Russia.

She favors further reducing U.S. and Russian nuclear arsenals, and also favors U.S. Senate approval of the Comprehensive Test Ban Treaty.

CHINA AND NORTH KOREA

Clinton has said the U.S. relationship with China will be the most important bilateral relationship in the world this century. Noting China’s support was important in reaching a multilateral deal to disable North Korea’s nuclear facilities, she says “we should build on this framework to establish a northeast Asian security regime.”

TRADE

Like Obama, Clinton has said the United States should either renegotiate or “opt out” of the North American Free Trade Agreement that was reached with Canada and Mexico during her husband’s administration. She also has called for a “timeout” from new trade agreements and a top-to-bottom review of trade policy.

Copyright © 2008 Reuters

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PUBLISHED BY ‘THE STAR’ (Malaysia)

Posted in AFGHANISTAN, AL QAEDA, CHINA, COMMONWEALTH OF INDEPENDENT STATES, FOREIGN POLICIES - USA, HUMAN RIGHTS, INTERNATIONAL RELATIONS, IRAN, IRAQ, ISRAEL, LEBANON, MIDDLE EAST, NORTH KOREA, PAKISTAN, PALESTINE, RUSSIA, SYRIA, THE ISRAELI-PALESTINIAN STRUGGLE, THE OCCUPATION WAR IN IRAQ, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

GHANEM: OPEC MAY MEET NOV 29 TO DISCUSS OIL MARKET

Posted by Gilmour Poincaree on November 17, 2008

15/11/2008 – 14:44:00

The Chairman of National Oil Corp. (NOC) said Thursday that the Organization of Petroleum Exporting Organization of Petroleum Exporting CountriesCountries, or OPEC, indeed could hold a meeting in Cairo at the end of November.

“We may have a meeting in Cairo,” Shukri Ghanem said.

The meeting could take place on the sidelines of a meeting of the Organization of Arab Petroleum Exporting Countries, known as OAPEC, which is taking place in the Egyptian capital on Nov. 29, he said.

“Since we are about 10 or nine…who are members of OAPEC, who are also members of OPEC, that happen to be in Cairo, so why not consult also on the market situation?” he said.

After Ghanem’s statement oil prices rose earlier in the day after another OPEC source mentioned the likely emergency output meeting later this month.

Before that prices had slumped to a three-and-a-half-year low point close to $ 50 a barrel in London trading, owing to weaker energy demand caused by a global economic slowdown.

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PUBLISHED BY ‘THE TRIPOLI POST’ (Libya)

Posted in COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, EGYPT, FINANCIAL CRISIS 2008/2009, OPEC, RECESSION | Leave a Comment »

WTO WARNS TRADE FINANCE DETERIORATION

Posted by Gilmour Poincaree on November 17, 2008

15/11/2008 14:50:00

The World Trade Organization warned Wednesday that the financing of global commerce WTO Director-General Pascal Lamyis “deteriorating” amid the financial crisis and the situation is likely to worsen over the coming months.

“The market for trade finance has severely deteriorated over the last six months, and particularly since September,” WTO Director-General Pascal Lamy told ambassadors of the organisation’s 153 members following a meeting with trade experts and bankers.

“The view expressed this morning by the trade finance practitioners is that the situation is likely to deteriorate further in the months to come,” Lamy said.

He was speaking after a meeting at the WTO’s headquarters here with experts and representatives from top banks involved in trade finance – but without the presence of key invitees such as the heads of the World Bank, Robert Zoellick, and the International Monetary Fund, Dominique Strauss-Kahn.

Even at the time the meeting was announced in October, trade sources indicated that Zoellick and Strauss-Kahn might not attend in person but could send specialists well-versed in trade finance matters.

Representatives from key banks active in the field of trade finance such as HSBC, JP Morgan, Citigroup, Royal Bank of Scotland and Commerzbank did attend the meeting, WTO sources said.

Armando Mariante Carvalho of the Brazilian national development bank (BNDES) said the meeting touched on all aspects of the financial crisis and its impact on trade.

“A summary of the situation of the crisis was made, with an emphasis on the trade finance problems, which are quite severe,” Carvalho told journalists.

“Nobody knows how deep and how long this crisis will be, and how 2009 will be affected and how the trade flow will be affected,” he warned.

Brazil has so far not suffered too badly even though some international credit lines have dried up, as the BNDES and the central bank have been able to provide necessary funding, he said.

In October, credit volumes dropped around 20 percent compared to the annual average, equivalent to around 16 billion dollars, Carvalho said.

Another banker from Citibank, who did not give his name, said merely that trade financing “has not dried up, but it can always be better.”

Lamy said last month that the WTO could act as a model of how to regulate anew the global financial system in the wake of the crisis that has seen Wall Street titans humbled and unprecedented levels of state intervention in the banking sector.

“At a time when there are renewed calls for a better regulation in the financial area, the WTO system provides an example of how the lessons of history and experience have led to the construction of a system of international governance,” Lamy said.

On Wednesday, Lamy reiterated once more his call for the WTO’s members to finally conclude the Doha Round of trade liberalisation talks which have made scant progress since they were launched in the Qatari capital seven years ago.

“My sense is that we are not that far away from our objective of concluding the round, even if a number of tough nuts remain to be cracked,” particularly on agriculture and industrial goods, Lamy said.

“My sense is that we can achieve modalities in these two areas by the year-end. I remain of the view that it is doable,” he added.

AFP

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Posted in AGRICULTURE, BRASIL, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INTERNATIONAL, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, USA, WORLD TRADE ORGANIZATION | Leave a Comment »

ISRAEL STOPS UN FOOD DISTRIBUTION TO STARVING PALESTINIANS IN GAZA

Posted by Gilmour Poincaree on November 17, 2008

15/11/2008 15:31:00

The United Nations announced it was suspending food distribution to half of Gaza’s 1.5 million people Photo - Palestinians hold candles during a protest against power cuts in Gaza November 13, 2008.on Thursday after Israel failed to allow emergency supplies into the Palestinian territory.

“They have told us the crossings are closed today.

At the end of today we will suspend our food distribution,” said UN Relief and Works Agency spokesman Chris Gunness.

“Our warehouses are effectively empty,” he told AFP.

Meanwhile, the Israeli military killed four Palestinians along the Gaza border on Wednesday after a nearly five-month during which Hamas respect a declared seize fire.

A Hamas spokesman called the killing of the gunmen “an enormous Israeli crime which constitutes a grave violation of the truce.”

UNRWA usually distributes emergency food rations to about 750,000 people in the Impoverished, overcrowded sliver of land whose economy has been crippled by a tight blockade Israel says is aimed at forcing militants to stop firing rockets and mortar rounds at the Jewish state.

The International Committee for the Red Cross (ICRC) said a truck it sent to the Kerem Shalom crossing was turned back by the Israelis.

Israel usually allows some humanitarian supplies into Gaza, but even this has stopped over the past week, leading to harsh criticism from aid agencies.

“Pushing people to the brink of desperation every few months and forcing UNRWA into yet another cycle of crisis management is not in the interest of anyone who believes in peace, moderation and stability,” said Gunness.

Israel also cut off European Union-funded fuel supplies to Gaza’s sole power plant on Thursday, prompting it to close down for want of diesel.

“It is completely shut down,” Palestinian Energy Authority official Qanaan Obeid told AFP.

ICRC mission chief Katharina Ritz said that “every day the situation is getting more and more precarious for Gazans,” adding that there was a desperate need for medical supplies.

The Israeli military confirmed the closure of Gaza continued.

(agencies)

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Posted in HUMAN RIGHTS, INTERNATIONAL RELATIONS, ISRAEL, PALESTINE, THE ISRAELI-PALESTINIAN STRUGGLE, THE UNITED NATIONS, WARS AND ARMED CONFLICTS | Leave a Comment »

OPINION: KEEPING GOOD COMPANY (Libya)

Posted by Gilmour Poincaree on November 17, 2008

15/11/2008 14:37:00

by Zainab Al-Arabi

The bad news is that although certain events in a country might make people depressed because they KEEP GOOD COMPANYhave no control over them in the Third World, of which we are a part, the good news is that this doesn’t just occur in Third World countries who are always lectured at by First World countries about their economy, society, health, food, religion, etc. If anything the past couple of years have shown us that we are in good company.

Thanks to the oh-so-free press in the West – which is increasingly becoming more of a voice for certain corporations- we learnt belatedly of secret prisons in Europe, Pakistan, and Afghanistan where innocent Muslims were kept and tortured. We were informed –better late than never- of the complicity of human-rights-respecting Western governments in these dastardly events.

In Third World countries these wouldn’t have been so secret; everyone would know because of the idle time citizens have on their hands spent in fruitless conversation. And having relatives and neighbours in secret security services (again in Third World countries) helps to keep information flowing – who needs newspapers? A proud mother will tell her entire neighbourhood that her son is in ‘security’, and he can be observed sometimes showing his ‘secret’ I.D. at the bank to people so he can jump the queue.

Mismanagement of government files and losing classified information? Yes that too is presented as evidence of Third World incompetence, but should we complain about this accusation when a leading First World country has shown us that this is an everyday occurrence? I mean if British ministers and state officials leave classified information on bus seats and in car parks, then where is the problem?

Worse than that, they have also lost 20,000 cows. Present on computers, but nowhere to be found in real life, a BBC report states that the persons in charge are completely baffled by this problem. Well at least we know what happens to our cows: they die of neglect.

Over 200 head of cattle died in the Taourgha Project this year in between a change of management phase, according to television reports.

To be fair to the British, they’re seriously thinking of changing the government. In Third World countries, people aren’t so cruel. Give the poor guys another chance, we say. We still believe in that age old slogan of one for all and all for one.

Economic progress and free markets have forever been touted as signs and signals that the First World is truly a democratic dream that the Third World is unable to conceive. But the present global financial nightmare that has left many Americans homeless and/or bankrupt is also a by-product of the Bush freedom-loving-era.

Allowing giant banks and giant companies to accept ‘bail-outs’ in hundreds, I mean “hundreds”, of billions of dollars without any legal repercussions or punishment, and without allowing citizens to seek legal redress, sounds, not just like the Third World to me, but worse.

Where else is thievery and crime rewarded by governments? Everywhere in the world it now seems. We shouldn’t feel too bad about ourselves, being Third World citizens. We have plenty of company.

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Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, CATTLE, ECONOMIC CONJUNCTURE, ECONOMY, ENGLAND, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, HUMAN RIGHTS, INTERNATIONAL, INTERNATIONAL RELATIONS, LYBIA, USA | Leave a Comment »

BUSH SE VA REGALANDO CENTENARES DE MILLONES

Posted by Gilmour Poincaree on November 17, 2008

Camagüey, Cuba, Lunes, 17 de Noviembre del 2008 , 1:24 pm – Año 50 de la Revolución

por Santiago Brugal Almanza (AIN)

En hechos sin precedentes en la historia del capitalismo, la administración de George W. Bush, después DUBYA AND HIS JAR OF COOKIES - by Rich Normandinde sumir al país, a sus socios desarrollados y al resto del mundo en la peor de las crisis económica y financiera, se despide regalando dinero “a las dos manos”.

El Departamento del Tesoro de EE.UU acaba de emitir una notificación –por disposición del presidente-, estableciendo un cambio en la política impositiva por el que se le hace una rebaja a los bancos de 140 mil millones de dólares, según informó el diario The Washington Post.

A fines de septiembre pasado y mientras los mercados financieros amenazaban con derrumbarse, el Congreso aprobó y Bush promulgó, un paquete de estímulo económico de 700 mil millones de dólares, pero sin un plan claro sobre cómo se realizaría esa intervención estatal en el sistema financiero del país.

Posteriormente, se han sucedido uno tras otros los planes de salvamento combinados del Tesoro y la Reserva Federal (FED), Banco Central de EE.UU., de bancos, aseguradoras, aumento de garantías a hipotecarias y ampliaciones de los paquetes.

Por ejemplo, figura el préstamo del Tesoro de una suma récord de 550 mil millones en deuda negociable durante el trimestre de octubre a diciembre, con el fin de pagar por una serie de programas de emergencia de gobiernos estatales y locales.

Se agrega que ambos organismos suministraron una nueva asistencia por 40 mil millones de dólares para sacar de apuros financieros a la mayor aseguradora estadounidense y mundial, la American International Group (AIG), a cambio de que aceptara la “nacionalización” de una parte de la empresa.

La nueva aportación elevará a 150 mil millones de dólares la ayuda total a la compañía. Este “presente” de 140 mil millones de dólares a los bancos, pasó desapercibido a los bien informados e informadores medios de prensa occidentales.

De acuerdo con el Washington Post, los primeros que apreciaron “la enorme magnitud ” del cambio ordenado por el Departamento del Tesoro fueron los abogados de empresas que se especializan en los impuestos.

“Cuando algunos legisladores se dieron cuenta del asunto, se enfurecieron”, añadió el artículo. “Algunos expertos en el Congreso han llegado a la conclusión de que la medida es ilegal, pero les preocupó que si lo decían en público podrían perjudicar varias recientes fusiones bancarias, facilitadas por esa resolución”.

Estos legisladores se hicieron de “la vista gorda”, después de haber aceptado su parte del pastel, como es habitual en las labores del Congreso, sin oponerse a ello como hicieron con el anterior plan de 700,000, que aprobaron después de que se incluyeran sus “intereses especiales”.

Los bancos ya están recibiendo 250 mil millones de dólares del gobierno para que reanuden los créditos al público y a las empresas, pero estos siguen usando el dinero para aumentar sus reservas, mejorar sus balances deficitarios, pagar dividendos a sus accionistas y bonos (regalías) multimillonarios a sus ejecutivos.

Además de derrochar en gastos militares y dejar sin trabajo y en la calle, con sus viviendas ejecutadas y en ruinas a millones de ciudadanos norteamericanos, el presidente saliente se despide saqueando las arcas del Estado y regalando dólares a todos los responsables de la crisis y… además, nadie lo denuncia.

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Posted in BANKING SYSTEM - USA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, RECESSION, USA | Leave a Comment »

EL PARTO DE LOS MONTES – La reunión de Washington

Posted by Gilmour Poincaree on November 17, 2008

Noviembre 16 de 2008 – 4 y 12 p.m.

Fidel Castro Ruz

Bush se mostraba feliz con tener a Lula a su diestra en la cena del viernes. A Hu Jintao, al que respeta por el enorme mercado de su país, la capacidad de producir bienes de consumo a bajo precio y el caudal de sus reservas en dólares y bonos de Estados Unidos, lo sentó a su izquierda.

Medvédev, a quien ofende con la amenaza de ubicar los radares y la cohetería estratégica nuclear no lejos de Moscú, fue ubicado en un asiento distante del anfitrión de la Casa Blanca.

El rey de Arabia Saudita, un país que producirá en un futuro próximo 15 millones de toneladas de petróleo ligero a precios altamente competitivos, quedó también a su izquierda, al lado de Hu.

Su más fiel aliado en Europa, Gordon Brown, Primer Ministro del Reino Unido, no aparecía cerca de él en las imágenes.

Nicolás Sarkozy, descontento con la arquitectura actual del orden financiero, quedó distante de él, con el rostro amargado.

Al Presidente del Gobierno español, José Luis Rodríguez Zapatero, víctima del resentimiento personal de Bush y asistente al cónclave de Washington, ni siquiera lo vi en las imágenes televisadas de la cena.

De esa forma fueron ubicados los asistentes al banquete.

Cualquiera hubiera pensado que al día siguiente se produciría el debate de fondo sobre el peliagudo tema.

Temprano en la mañana del sábado, las agencias informaban sobre el programa que tendría lugar en el National Building Museum de Washington. Cada segundo estaba programado. Se analizarían la actual crisis y las medidas a tomar. Se iniciaría a las 11 y 30 hora local. Primero, sesión gráfica: “fotos de familia”, como las llamó Bush; veinte minutos después, la primera plenaria, seguida de una segunda a la mitad del día. Todo rigurosamente programado, hasta los nobles servicios sanitarios.

Los discursos y análisis durarían aproximadamente tres horas y 30 minutos. A las 3 y 25, hora local, almuerzo. De inmediato, a las 5 y 5, declaración final. Una hora después, a las 6 y 5, Bush marcharía a descansar, cenar y dormir plácidamente en Camp David.

El día transcurría, para los que seguían el evento, con la impaciencia por conocer cómo en tan breve tiempo se abordarían los problemas del planeta y de la especie humana. Estaba anunciada una declaración final.

El hecho real es que la declaración final de la Cumbre se elaboró por asesores económicos preseleccionados, bastante afines al pensamiento neoliberal, mientras Bush en sus pronunciamientos pre y pos cumbre reclamaba más poder y más dinero para el Fondo Monetario Internacional, el Banco Mundial y otras instituciones mundiales que están bajo riguroso control de Estados Unidos y sus más cercanos aliados. Ese país había decidido inyectar 700 mil millones de dólares para salvar a sus bancos y empresas transnacionales. Europa ofrecía una cifra igual o mayor. Japón, su más firme pilar en Asia, ha prometido una contribución de 100 mil millones de dólares. Esperan de la República Popular China, que desarrolla crecientes y convenientes vínculos comerciales con los países de América Latina, otra contribución de 100 mil millones procedentes de sus reservas.

¿De dónde saldrían tantos dólares, euros y libras esterlinas como no fuera endeudando seriamente a las nuevas generaciones? ¿Cómo se puede construir el edificio de la economía mundial sobre billetes de papel, que es en lo inmediato lo que realmente se pone en circulación, cuando el país que los emite sufre un enorme déficit fiscal? ¿Valdría la pena tanto viaje por aire hacia un punto del planeta llamado Washington para reunirse con un Presidente al que le quedan sólo 60 días de gobierno, y suscribir un documento que ya estaba diseñado de antemano para ser aprobado en el Washington Museum? ¿Tendría razón la prensa radial, televisiva y escrita de Estados Unidos al no concederle atención especial a ese viejo rejuego imperialista en la cacareada reunión?

Lo increíble es la propia declaración final, aprobada por consenso de los participantes en el cónclave. Es obvio que constituye una aceptación plena de las exigencias de Bush, antes y durante la cumbre. A varios de los países participantes no les quedaba otra alternativa que aprobarla; en su lucha desesperada por el desarrollo, no deseaban aislarse de los más ricos y poderosos, así como de sus instituciones financieras, que constituyen mayoría en el seno del Grupo G-20.

Bush habló con verdadera euforia, usando palabras demagógicas, leyó frases que retratan la declaración final:

“La primera decisión que tuve que tomar —dijo— fue quiénes venían a la reunión. Decidí que teníamos que tener a las naciones del Grupo de los 20, en lugar de solamente el Grupo de los Ocho o el Grupo de los Trece.

“Pero una vez que se toma la decisión de tener al Grupo de los 20, la pregunta fundamental es con cuántas naciones de seis diferentes continentes, que representan a diferentes etapas de desarrollo económico, es posible alcanzar acuerdos que sean sustanciales, y me complace informarles que la respuesta a esa pregunta es que lo logramos.”

“Estados Unidos ha tomado algunas medidas extraordinarias. Ustedes, que han seguido mi carrera, saben, yo soy un partidario del libre mercado, y si uno no toma medidas decisivas, es posible que nuestro país se suma en una depresión más terrible que la Gran Depresión.”

“Recién empezamos a trabajar con el fondo de 700 mil millones de dólares que está comenzando a liberar dinero a los bancos.”

“De manera que todos entendemos la necesidad de promover políticas económicas a favor del crecimiento.”

“La transparencia es muy importante para que los inversionistas y los reguladores puedan saber exactamente qué está pasando.”

El texto del resto de lo que dijo Bush es por el estilo.

La declaración final de la Cumbre, que requiere por su extensión media hora para leerlo en público, se define a sí misma en un grupo de párrafos seleccionados:

“Nosotros, los líderes del Grupo de los 20, hemos celebrado una reunión inicial en Washington el 15 de noviembre entre serios desafíos para la economía y los mercados financieros mundiales¼ ”

“¼ debemos poner las bases para una reforma que nos ayude a asegurarnos de que una crisis global como esta no volverá a ocurrir. Nuestro trabajo debe estar guiado por los principios del mercado, el régimen de libre comercio e inversión¼ ”

“¼ los actores del mercado buscaron rentabilidades más altas sin una evaluación adecuada de los riesgos y fracasaron¼ ”

“Las autoridades, reguladores y supervisores de algunos países desarrollados no apreciaron ni advirtieron adecuadamente de los riesgos que se creaban en los mercados financieros¼ ”

“¼ las políticas macroeconómicas insuficientes e inconsistentemente coordinadas, e inadecuadas reformas estructurales, condujeron a un insostenible resultado macroeconómico global.”

“Muchas economías emergentes, que han ayudado a sostener la economía mundial, cada vez más sufren el impacto del frenazo mundial.”

“Subrayamos el importante papel del FMI en la respuesta a la crisis, saludamos el nuevo mecanismo de liquidez a corto plazo y urgimos a la continua revisión de sus instrumentos para asegurar la flexibilidad.

“Animaremos al Banco Mundial y a otros bancos multilaterales de desarrollo a usar su plena capacidad en apoyo de su agenda de ayuda¼ ”

“Nos aseguraremos de que el FMI, el Banco Mundial y los otros bancos multilaterales de desarrollo tengan los recursos suficientes para continuar desempeñando su papel en la resolución de la crisis.”

“Ejercitaremos una fuerte vigilancia sobre las agencias de crédito, con el desarrollo de un código de conducta internacional.”

“Nos comprometemos a proteger la integridad de los mercados financieros del mundo, reforzando la protección del inversor y el consumidor.”

“Estamos comprometidos a avanzar en la reforma de las instituciones de Bretton Woods, de forma que puedan reflejar los cambios en la economía mundial para incrementar su legitimidad y efectividad.”

“Nos reuniremos de nuevo el 30 de abril de 2009 para revisar la puesta en marcha de los principios y decisiones tomadas hoy.”

“Admitimos que estas reformas sólo tendrán éxito si se basan en un compromiso con los principios del libre mercado, incluyendo el imperio de la ley, respeto a la propiedad privada, inversión y comercio libre, mercados competitivos y eficientes y sistemas financieros regulados efectivamente.”

“Nos abstendremos de imponer barreras a la inversión y al comercio de bienes y servicios.”

“Somos conscientes del impacto de la actual crisis en los países en desarrollo, particularmente en los más vulnerables.

“Mientras avanzamos, estamos seguros de que mediante la colaboración, la cooperación y el multilateralismo superaremos los desafíos que tenemos ante nosotros y lograremos restablecer la estabilidad y la prosperidad en la economía mundial.”

Lenguaje tecnocrático, inaccesible para las masas.

Pleitesía al imperio, que no recibe crítica alguna a sus métodos abusivos.

Loas al FMI, Banco Mundial y las organizaciones multilaterales de créditos, engendradores de deudas, gastos burocráticos fabulosos e inversiones encaminadas al suministro de materias primas a las grandes transnacionales, que son además responsables de la crisis.

Así por el estilo, hasta el último párrafo. Es aburrida, plagada de lugares comunes. No dice absolutamente nada. Fue suscrita por Bush, campeón del neoliberalismo, responsable de matanzas y guerras genocidas, que ha invertido en sus aventuras sangrientas todo el dinero que habría sido suficiente para cambiar la faz económica del mundo.

En el documento no se dice una palabra de lo absurdo de la política de convertir los alimentos en combustible que propugna Estados Unidos, del intercambio desigual de que somos víctimas los pueblos del Tercer Mundo, ni sobre la estéril carrera armamentista, la producción y comercio de armas, la ruptura del equilibrio ecológico, y las gravísimas amenazas a la paz que ponen al mundo al borde del exterminio.

Sólo una frasecita perdida en el largo documento menciona la necesidad de “afrontar el cambio climático”, cuatro palabras.

Por la declaración se verá cómo los países presentes en el cónclave demandan reunirse de nuevo en abril de 2009, en el Reino Unido, Japón o cualquier otro país que cuente con los requisitos adecuados —nadie sabe cuál—, para analizar la situación de las finanzas mundiales, con el sueño de que las crisis cíclicas nunca vuelvan a repetirse con sus dramáticas consecuencias.

Ahora les corresponderá a los teóricos de izquierda y de derecha opinar fría o acaloradamente sobre el documento.

Desde mi punto de vista, no fueron rozados ni con el pétalo de una flor los privilegios del imperio. Si se dispone de la paciencia necesaria para leerlo desde el principio hasta el final, podrá apreciarse cómo se trata simplemente de una apelación piadosa a la ética del país más poderoso del planeta, tecnológica y militarmente, en la época de la globalización de la economía, como quienes ruegan al lobo que no se devore a la Caperucita Roja.

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Posted in AGRICULTURE, BANKING SYSTEM - USA, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, CUBA, ECONOMIC CONJUNCTURE, ECONOMY, EUROPEAN CENTRAL BANK, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, G20, IMF, INDUSTRIAL PRODUCTION - USA, INTERNATIONAL, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, TRADE DEFICIT - USA, USA, WORLD BANK | Leave a Comment »

BUSH: LONG CLIMB TOWARD REDEMPTION

Posted by Gilmour Poincaree on November 17, 2008

Article published Sunday, November 16, 2008

by David M. Shribman

NOW that we know what the near future might look like, it may be worthwhile to ponder how the past BE AFRAID !!! BECAUSE PARANOIA IS PATRIOTICwill appear.

All eyes now are on President-elect Barack Obama as he prepares for power. But the more instructive exercise may be to examine what President Bush will look like a generation or more after he leaves power in January.

The fact that the President was all but invisible at Republican congressional and senatorial rallies and barely appeared at John McCain’s side this fall is a potent measure of the disrepute in which Mr. Bush is held – and of the steep hill he has to climb if he is ever to claim historical redemption. But all chief executives leave office knowing that their reputations in history often have little to do with contemporary views of their presidencies.

John Adams was the only early president to fail to win a second term until his son also achieved that distinction; today he is regarded among some historians as a pillar of probity and judgment. Dwight Eisenhower left office with people saying that if Americans wanted a golfer in the White House they should have elected Ben Hogan; now the 34th president is regarded as a shrewd wielder of power and people, the master of the “hidden-hand presidency.”

On Election Day 2008, even as Americans were going to the polls in record numbers to repudiate the eight years of Mr. Bush, the Wall Street Journal ran not one but two pieces that referred to the revisionist view of Herbert Hoover, long regarded as the founding father of the Great Depression and as the high priest of stubborn American individualism. The Herbert Hoover birthplace in West Branch, Iowa, is a lonely place, especially on a windy plains afternoon, and Hoover remains one of the great punching bags in American civic life and on the cabaret comedy circuit. But in recent years, some historians have acknowledged that some of Hoover’s efforts to fight the economic crisis were precursors to the New Deal, not impediments to Franklin Roosevelt’s battle plan.

In all of American history, no man may be a more successful rehabilitator of presidential reputations than David McCullough, who first rescued Harry S Truman and then, in perhaps an even more difficult accomplishment, pulled John Adams from the recycling box of history.

“I was very interested in the individual man, the personality, the character, the quality of mind, and the quality of resilience, keeping a clear eye on the mission,” says Mr. McCullough. “The best presidents have all had a strong sense of history and saw themselves as not being just judged by tomorrow’s headlines and polls.”

So is there hope for George W. Bush, whose approval ratings on Election Day were around 20 percent, the lowest ever for a president, according to the CBS News tracking poll?

The answer: Maybe. The ironic reason why: Mr. Bush’s place in history may depend on how well President Obama performs.

Mr. Obama has no brief for Mr. Bush, as we saw in a year of brutal campaigning against the Bush record, the Bush persona, the Bush philosophy. But if Mr. Obama withdraws American troops from a more tranquil, if not exactly serene, Iraq, then historians may say he was able to do so because of the success of the Bush Surge. If Mr. Obama stabilizes the Middle East, historians may say the ground was prepared by Mr. Bush’s resolve in eliminating Saddam Hussein from power. If Mr. Obama brings some order to the financial markets and some confidence to American consumers, historians may credit the dramatic action undertaken by Mr. Bush and Treasury Secretary Henry Paulson.

There is no question that Mr. Bush faces an arduous climb toward presidential rehabilitation. The model may be Truman, who was reviled at the end of his term. Today he is a folk hero and a byword for presidential character.

In his own time, Truman was regarded as a failed president, surrounded by corruption, ineffective in the Cold War, and utterly unable to measure up to his predecessor, Franklin Roosevelt. He also had Korea, a disastrous, inconclusive war, on his record.

But Truman now is regarded as having been the first president to take major steps toward civil rights, including the desegregation of the armed forces, and is credited with the Marshall Plan, the Truman Doctrine, the Berlin airlift, and the creation of NATO. “It’s a formidable record and it came to look more formidable over time,” William E. Leuchtenburg, the distinguished University of North Carolina historian, said in a recent conversation.

Mr. Bush has professed little interest in how history regards him, just as he professed little interest in his public-approval ratings. But he is from a family with a history – his grandfather was a Republican senator from Connecticut, his father a member of the House, a diplomat in Beijing, the director of Central Intelligence, the chairman of the Republican National Committee, chief American delegate to the United Nations, a two-term vice president and a one-term president.

“The main factor is time,” Mr. McCullough says. “Some 50 years have to pass. You have to wait for the dust to settle. You have to see what follows them. You need information to come to the fore that isn’t available in contemporary times. It’s very hard to judge how presidents will be evaluated.”

Mr. Bush plainly knows this. No man lives in a house redolent with history and makes decisions that will live in history without recognizing the caprice and ultimate justice of history. And remember, at Yale, Mr. Bush majored in … history.

(*) – David M. Shribman is executive editor of the Pittsburgh Post-Gazette.

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Posted in BANKRUPTCIES - USA, ECONOMIC CONJUNCTURE, FINANCIAL CRISIS - USA - 2008/2009, HOUSING CRISIS - USA, RECESSION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE PRESIDENCY - USA, TRADE DEFICIT - USA, USA | Leave a Comment »

‘SHORT-TERM DEFICIT’ POSSIBLE – Prime minister says Canada will do its part as Group of 20 leaders agree to ambitious reform plan

Posted by Gilmour Poincaree on November 17, 2008

Published: Sunday, November 16, 2008

by Sheldon Alberts, Canwest News Service

WASHINGTON – Prime Minister Stephen Harper says he’s eyeing the possibility of “short-term deficit Harper of Canada, left, as he arrives at the North Portico of the White House in Washington , Friday, Nov. 14, 2008. President Bush invited leaders of the G-20 community to Washington for a weekend summit to discuss the world economy and the current condition of the financial marketsspending” to boost Canada’s economy as part of broader, co-ordinated international efforts to halt a global plunge into economic recession.

At the close of the Group of 20 leaders’ summit yesterday afternoon, Mr. Harper said Canada still hopes to preserve its balanced budget, but is prepared to use fiscal stimulus, if necessary, to do its part on the world stage.

“Look, if there is a worldwide agreement, then we will engage in sufficient stimulus to do our part in carrying global economic demand. We will fulfil our part of that agreement,” he said at a news conference at the Canadian Embassy.

“What we’ve got to be sure is that if we do short-term deficit spending as a deliberate policy – if we do that, we haven’t settled on doing that, but if we do that – we will have to be able to demonstrate to Canadians that those deficits will genuinely be short-term and cyclical, and we will come out of them quickly.”

His comments came as G20 leaders agreed to an ambitious – if still ill-defined – plan to reform international financial institutions, tighten global regulations, and inject life into their individual economies.

In a five-page declaration that mapped out planned actions in broad strokes, the world leaders vowed to bolster international oversight of large financial institutions, better monitor executive salaries at top firms, and increase transparency of complex financial products.

They also vowed to reshape international financial institutions, such as the International Monetary Fund and World Bank, and to give more influence to rapidly growing economic powers such as China, India and Brazil.

“We will implement reforms that will strengthen financial markets and regulatory regimes so as to avoid further crises,” the leaders said in the summit’s final statement.

If undertaken, the reforms could be the most sweeping overhaul of the international financial system since the Second World War.

The two-day summit itself made history, bringing together for the first time leaders from Canada, the United States, Great Britain, France, Japan, Italy, Australia, Brazil, China, Germany, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, Spain and the European Union.

The leaders set a March 31, 2009, deadline for the creation of “supervisory colleges for all major cross-border financial institutions” to enhance surveillance of their activities.

The final statement said governments would “use fiscal measures to stimulate domestic demand to rapid effect, as appropriate” in the upcoming months – though there was no promise of a comprehensive or joint plan.

“All the leaders in the room understand the extreme dangers of the situation and the necessity of acting quickly and in concert,” Mr. Harper told reporters.

“There is a view coming out of this meeting I can tell you very strongly … that monetary policy alone will not be sufficient to take the global economy through this crisis.”

He singled out China for praise, which last week pledged almost $600 billion U.S. in new spending for major infrastructure projects.

What form a future fiscal stimulus might take in Canada, however, remains somewhat of an unknown.

Mr. Harper, who plans to deliver a mini-budget at the end of November, said he had directed Finance Minister Jim Flaherty to “try to preserve Canada’s balanced budget position.”

But he quickly added, “We will do what we have to, to contribute to boosting global demand.”

The prime minister left open the possibility of providing future government assistance to Canada’s ailing auto industry, with or without similar action being taken by the U.S. government.

“We don’t yet know what the American approach will be. We’re obviously watching that very carefully and we’re talking to our American counterparts,” he said. “We cannot ignore what the Americans do. On the other hand, we as the government of Canada have to ultimately undertake our own actions.”

While Mr. Harper said the group’s joint declaration should give Canadians “hope” that world leaders recognize the scope of the international crisis, he acknowledged there’s likely no way to avoid some substantial economic pain.

“Does (the G20) plan mean Canada or any country will be spared effects, or that this problem is not going to be with us for some time? No, it does not mean that,” he said.

“The world economy has difficult times ahead. Canada has so far been sheltered from most of those. But we will not be sheltered entirely from those problems.”

The most difficult questions leaders addressed at the meeting – the scope of regulatory reform and international oversight — has been put off until after U.S. President George W. Bush leaves office.

The leaders agreed to meet again at the end of April, months after incoming president Barack Obama will be installed in the White House.

“We’re adapting our financial systems to the realities of the 21st century. A lot of the regulatory structures that are in place were 20th-century regulatory structures,” Mr. Bush said in a statement after the summit’s conclusion. “The question is, How do we establish good regulatory structure without destroying the incentive to innovate, without destroying the marketplace?”

In a thinly-veiled critique of the U.S., the final summit statement blamed “policy-makers, regulators and supervisors in some advanced countries” for failing to properly police financial institutions in the lead-up to the crisis.

The leaders criticized the U.S. for allowing “weak underwriting standards, unsound risk-management practices, increasingly complex and opaque financial products, and consequent excessive leverage.”

© Canwest News Service 2008

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PUBLISHED BY ‘OTTAWA CITIZEN’ (Canada)

Posted in BANKING SYSTEMS, CANADA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, RECESSION, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

YOU MUST UNDERSTAND, I REALLY CAN’T PROMISE YOU ANYTHING …

Posted by Gilmour Poincaree on November 17, 2008

11-10-2008

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PUBLISHED BY ‘THE BOSTON GLOBE’ (USA)

Posted in COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, RECESSION, USA, USA HUMOR | Leave a Comment »

CREDIT CRISIS: NEED TO REINVENT THE WHEEL (India)

Posted by Gilmour Poincaree on November 17, 2008

16 Nov 2008, 0221 hrs IST, Nidhi Nath Srinivas, ET Bureau

In these days of tight credit, did you know one of modern retailing’s best-kept secrets? The real game The hubless wheel was from an idea by avant-garde entrepreneur and motor car enthusiast Dominique Mottas, which he developed more than a decade ago.  The idea was to reduce the rotating part of the wheel to its bare minimum.  The new wheel is basically made up of two components.is how you keep the money moving. More than anything, cheap trade credit has bankrolled the retailing explosion.

Trade credit is simple. In everyday buying and selling, there isn’t enough ready cash for every bill. People understand this. So when Company A buys from Company B, it routinely asks for some time to pay. This ranges from a week, fortnight, three weeks, to one month or more.

How much time Company B gives depends on what volume A is buying, whether it’s comfortable with A, how badly B needs money, and the chances of A going bust. Sometimes B lets A take longer than usual to reel it in as a regular customer. The only caveat is A must clear its bill by due date. Otherwise, once-bitten-twice-shy B will stop being generous. It’s all pretty straightforward.

In retailing, how it pans out depends on your name. If you are a large branded company, the normal RE-INVENT THE WHEEL? NO, FOLD IT - The problem with folding bicycles is that no matter how clever the design, the wheels tend to muck it up. Freelance industrial designer and avid bicyclist Duncan Fitzsimmons may have solved the problem, by designing a wheel that can itself foldrules of business among equals apply. If you are small unknown company contracted for private label, welcome to the undergrowth. It’s a different and dark world.

Take food retailing. Adani’s Fortune is India’s top-selling veg oil brand and consumers walk in looking for it. In retailing jargon, Fortune can generate footfalls, which is the biggest thing for a shop. Other giant brands with a similar ability to bring in the paying public include Amul, Britannia, and ITC Aashirvaad.

If the grocery section doesn’t display giant brands prominently, a retailer can kiss customers goodbye. So the last thing he wants to do is annoy these big boys in any way. Adani knows this.

That is why it can afford to be extremely strict about trade credit. It rarely gives even the biggest chains more than 21 days to pay. And it is equally rare for them to default on Adani. Even after all hell broke loose in October, and everyone began feeling the credit squeeze, Adani saw no reason to substantially change its credit terms.

“When you command 25% market share in a category, there is usually no problem. We have also just installed an advanced SAP system to monitor our creditors more closely in every market,’’ says an Adani official. When you are this big, there is no need to chase retailers. They are lined up outside.

Cut to the Russian roulette that small non-branded suppliers are forced to play. Take an average dal mill – call him Mr X – that sells a fixed quantity on the first of every month to chain Y. Mr X is just one of many pulses supplier to Y. Y decides to forcibly extract credit by offering contract with payment after two months. Being small, Mr X can’t afford to wait 60 days.

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PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

Posted in BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDIA, INTERNATIONAL | Leave a Comment »

OILS, OILSEEDS SLIP FURTHER ON NEGATIVE OVERSEAS ADVICES – Grains and non-ferrous metals presented mixed signals (India)

Posted by Gilmour Poincaree on November 17, 2008

16 Nov 2008, 0143 hrs IST, AGENCIES

NEW DELHI: The Delhi oil and oilseeds market remained depressive past week following discouraging VEGETABLE OILS - Indiaoverseas advices coupled with increased arrivals from producing centres. With the CPO (crude palm oil) in Malaysia down by $ 25 to $ 450 per tonne and Chicago soya oil futures tumbling to around 250 cent this led to nervous selling by stockists easing prices of all major edible oil on the Delhi wholesale market.

According to marketmen, increased arrivals of soya seed at crushing units also had a deep impact on edible oil prices. Soya seed which was quoting at Rs 1550/1600 per quintal in producing centres fell to Rs 1480/1500 per quintal.

Prices in Ratlam and Neemuch were seen quoting even lower at Rs 1375/1400 per quintal leading to sharp fall in soya oil prices. With soya oil in Indore down by Rs 350 to Rs 4000 per quintal its prices in Delhi also declined from Rs 4800 to Rs 4500 per quintal following heavy selling by stockists.

Cottonseed oil slumped to a low of Rs 4050, losing Rs 250 per quintal tracking the weak trend prevailing in Punjab where cottonseed oil prices came crashing down to Rs 3900 per quintal.

Sesame oil was also hit by selling pressure with prices easing by Rs 100 to Rs 4250 per quintal even as sesame seed held strong. Mustard seed slipped by Rs 25/50 to Rs 2900/3100 per quintal on weak demand.

GRAINS & PULSES

The Delhi wholesale grains and pulses market ruled mixed past week on the back of mixed signals from upcountry market centres. Tight inventory in roller flour mills appreciated mill-quality wheat Rs 56/58 to Rs 1150/1156 per quintal following spurt in demand.

Atta (wheat flour) was also quoting upward by Rs 30/35 at Rs 620/625 per 50 kg on heavy buying by local stockists and retailers. Wheat bran firmed by Rs 20 at Rs 430/450 per 50 kg on increased offtake by upcontry centres.

Fine rice 1121 average quality held steady at Rs 5900/6000 per quintal, while rice steam was quoting at Rs 6500/7000 per quintal end week. According to marketmen, sustained arrivals of fine paddy at mills in Haryana eased Paddy grade 1121 from Rs 3000/3100 to Rs 2800/2900 per quintal.

NON-FERROUS METALS

The Delhi non-ferrous metals market observed mixed trends past week. While Nickel and Tin closed firm in tune with the LME (London Metal Exchange) trend copper, brass and aluminium incurred losses. Nickel Russian Plate spurted by Rs 20 to Rs 765/775 per kg on hectic buying by stockists and speculators as nickel on LME rose from $ 11550 to $ 11578 per tonne.

Inco nickel was also quoting upward by Rs 10 at Rs 865 per kg. Lead desi soft and hard edged up by Re 1 to Rs 86.50 and Rs 85/89 per kg following firm LME lead which moved up by $ 40 to $ 1332 per tonne. Brass parts, huny scrap and sheet tumbled by Rs 7/8 to Rs 183, 186 and Rs 184 per kg respectively amid increased arrivals from Pune and Hyderabad.

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PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

Posted in AGRICULTURE, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, GRAINS, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MALAYSIA, METALS, RICE, WHEAT | Leave a Comment »

MOROCCO SET FOR TALKS ON PROTECTING BLUEFIN TUNA – AND FISHERY BUSINESS

Posted by Gilmour Poincaree on November 17, 2008

Monday, November 17, 2008

by Marlowe Hood – Agence France Presse (AFP)

PARIS: The survival of the Atlantic and Mediterranean bluefin tuna population, exploited to the brink of THE BLUEFIN TUNA collapse, could depend on international negotiations starting Monday in Marrakesh, Morocco. The International Commission for the Conservation of Atlantic Tunas (ICCAT) will try to hammer out a new plan that protects the over-fished species without threatening the multi-million dollar industry that has been built around it.

Measures on the table range from tighter quotas and enforcement to an outright moratorium.

The stakes are high not just for bluefin and large-scale fisheries in a dozen countries but for ICCAT itself, according to the organization’s chairman.

“Our fate will be sealed ultimately by the decisions we make in Marrakesh,” Fabio Hazin wrote in a letter to the commission’s 40-odd member states two weeks ahead of the special meeting.

“Let’s not fool ourselves: There will be no future for ICCAT if we do not fully respect and abide by the scientific advice,” he warned.

Driven by skyrocketing prices – especially in Japan, which consumes over 80 percent of tuna caught in the Mediterranean Sea – bluefin tuna populations have crashed over the last decade.

Quotas put in place to stem the decline are not nearly stringent enough, according to many experts.

Others say current fishing limits would be adequate if they were respected: Last year the total catch in the Mediterranean was 61,000 tons, over twice the authorized limit of 29,500 tons, according to ICCAT statistics.

The body’s own scientific committee has recommended an annual limit of 15,000 tons.

At the end of October, European ministers said they were in favor of “more rigorous management of this fragile species,” including the possibility of lower quotas and a shorter fishing season, but stopped short of calling for a moratorium.

Six European nations have a direct stake in the negotiations: France, Spain, Italy, Greece, Malta and Cyprus.

But industry groups have remained adamant that current quotas should not be cut.

A summary report on tuna fishing by the Community Fisheries Control Agency, a European body set up in 2005 to monitor compliance with European Union fisheries rules, documented dozens of breaches in 2008.

The 10-page review, provided last week to the European Parliament’s fisheries committee, concluded: “It has not been a priority of most operators in the fishery to comply with the ICCAT legal requirements.”

The complete report – which cost 20 million euros ($25.197 million) – has yet to be released.

Environmental groups have sharply criticized European authorities for not making the report’s preliminary findings available to ICCAT’s scientific committee well ahead of the Marrakesh meeting, which runs until November 24.

“Shockingly, this valuable information has been kept hidden from scientists, thus undermining the quality of fisheries management advice,” said Sergi Tudela, head of fisheries for World Wildlife Fund (WWF) Mediterranean.

The WWF and other environmental groups have called for an a moratorium of bluefin fishing until stocks recover.

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PUBLISHED BY ‘THE DAILY STAR’ (Lebanon)

Posted in COMMERCE, COMMODITIES MARKET, ECONOMY, ENVIRONMENT, FISHERIES, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, MEAT, MOROCCO | 1 Comment »

SECURITY BANK NET INCOME FALLS (Phillipines)

Posted by Gilmour Poincaree on November 17, 2008

Monday, November 17, 2008

by Maricel E. Burgonio

SECURITY Bank Corp. said its nine-month net income dropped amid the turbulence in the global SECURITY BANKfinancial markets.

In a statement, the lender said end-September earnings came in 6-percent lower at P1.72 billion year-on-year.

“This has certainly been a very challenging period for businesses across the board. We are nevertheless pleased that the efforts we exerted in building core revenues and other income streams have helped in softening the adverse impact on securities markets brought about the global financial turmoil that began in the US and Europe,” Alberto Villarosa, Security Bank president and chief executive officer, said.

The bank’s loan portfolio grew by 18 percent amounting to P61.6 billion, accounting for 43 percent of its assets. Of its loan portfolio, the corporate market accounted for 60 percent, the middle-income market at 32 percent and consumer market, mainly in credit card business, at 18 percent.

Its total resources stood at P144.1 billion, 12-percent higher than the P 128.6-billion recorded at end-December 2007.

“Our balance sheet growth was largely driven by a noteworthy 18-percent growth in our loan portfolio to close the period at P61.6 billion despite of the current economic environment,” Carlos Borromeo, Security Bank chief financial officer, said.

The bank also improved its asset quality as its non-performing loans ratio eased to 1.3 percent from the end-December level of 2.6 percent.

Its non-performing loan cover likewise improved to 266 percent as against the 181 percent reflected at the end of last year.

The bank said it also has adequate capital at 13.7 percent of risk-weighted assets, providing a healthy cushion over the regulatory minimum of 10 percent.

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PUBLISHED BY ‘THE MANILA TIMES’ (Phillipines)

Posted in BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, PHILIPPINES, THE FLOW OF INVESTMENTS | Leave a Comment »

ECONOMY WILL REBOUND IN 6 TO 9 MONTHS: FM (India)

Posted by Gilmour Poincaree on November 17, 2008

16 Nov 2008, 2132 hrs IST, PTI

WASHINGTON: The financial meltdown will not spare any sector of the economy, but on the brighter India's Finance Minister, P. Chidambaram side recovery could be just six to nine months away, Finance Minister P Chidambaram has said.

“There will be some slowdown in every sector… but monetary measures, counter-cyclical measures and enlightened measures by the companies themselves can get over this painful period of adjustments and in about 6-9 months we should be back to the growth rate,” he told a news channel in an interview.

India has been growing by 9 per cent and above for four straight years, but various estimates suggest that the impact of the economic crisis could shave off anywhere between 1 to 2 percentage points.

“We are not revising it (GDP forecast) upwards or downwards. It could be anywhere between 7-8 per cent… The only other large country recording such growth will be China,” Chidambaram said.

Commenting on the decline in inflation to single digit — 8.98 per cent — after five months, he said, “I don’t think we should get too excited about the single digit inflation as it is still close to 9 per cent, much above our tolerance level…

“We would like the inflation to come down. We hope it will happen in the next few weeks, so I think we are jumping the gun when we are talking about a rate cut.”

As regards the impact of slowdown on India Inc, he said, “Bottom lines in the profit and loss account will indeed be affected but it doesn’t mean that something dramatic has happened in the Indian economy.”

Stressing that India is still an attractive destination for foreign investors, he said the country’s policy stance has attracted significant foreign direct investment as well as portfolio investment in the last four years.

On the robustness of the Indian economy, Chidambaram said, “When I say that the fundamentals of our economy are strong, I mean that companies like Tata Steel is basically a strong steel producing company and Infosys and Wipro are basically very strong player in the software market.”

Our agriculture is producing enough to feed 1.1 billion people of the country. They are not affected by what is happening in rest of the world.”

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PUBLISHED BY ‘THE TIMES OF INDIA’

Posted in ECONOMIC CONJUNCTURE, ECONOMY, INDIA, INTERNATIONAL, THE FLOW OF INVESTMENTS | Leave a Comment »

A NEW STORY ON BAILOUT (USA)

Posted by Gilmour Poincaree on November 17, 2008

Posted on Fri, Nov. 14, 2008

IMAGINE THIS scenario: Congress, concerned about rising energy prices, holds a heated debate on a THE BAILOUT PLAN$700 billion bill to finance mass transit and development of alternative-fuels vehicles.

The measure passes, and a month later, the secretary of transportation reports that he took most of the funds and spent them on highway infrastructure instead, without informing Congress of the policy change until after the fact.

Pretty outrageous, right? But something along those lines, albeit more complicated, basically just happened with that $700 billion financial bailout that most folks weren’t so happy about in the first place. The program is called TARP, for Troubled Assets Relief Program, except . . . they decided not to buy any Troubled Assets after all.

Treasury Secretary Henry Paulson has annnounced the $700 billion will not buy up troubled mortgage-related securities, as the rescue effort was originally conceived, but instead be used to bolster the financial markets and make loans more accessible for those seeking car, student and other kinds of loans.

Many high-finance experts say that Paulson’s about-face is exactly the right thing to do, that the original TARP plan was not only hasty but ill-conceived and that this approach will do more to help the economy, and faster, than TARP. So why didn’t Paulson reveal his decision to anyone sooner?

The reason the $700 billion bailout didn’t pass right away was that Congress wanted more accountability, and more of an oversight role.

But it’s become increasingly clear these last few days that there is no transparency or any good public information about how the federal government is conducting one of the biggest nonmilitary uses of our taxes dollars, ever.

Meanwhile, despite all this bailing out, virtually no useful help has gone to everyday Americans with toxic mortgages or foreclosed homes, and thousands of workers in the auto industry are seeing their livelihood collapse without any government aid, even as billions flow to some banks that are relatively sound. Paulson’s new policy might be an improvement, but only if there’s also openness and honesty with the American public. Without that, we all should be outraged. *

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PUBLISHED BY ‘THE PHILADELPHIA DAILY TIMES’ (USA)

Posted in BANKING SYSTEM - USA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

TRADE GROUP: US AG EXPORTS TO CUBA HIT RECORD – A U.S.-Cuba trade group says the island has spent a record $536 million for American agriculture goods through the third quarter, already surpassing all annual amounts since 2001.

Posted by Gilmour Poincaree on November 17, 2008

Originally published Saturday, November 15, 2008 at 11:35 AM

HAVANA — A U.S.-Cuba trade group says the island has spent a record $536 million for American US AG EXPORTS TO CUBA HIT RECORDagriculture goods through the third quarter, already surpassing all annual amounts since 2001.

The U.S. Trade and Economic Council says that most of the growth is because of price increases, and not quantities. The council released the figures Friday.

Washington’s nearly 50-year-old trade embargo prohibits nearly all trade between both countries, but Cuba has been allowed to buy U.S. food and agricultural products with cash payments since 2000. Cuba began taking advantage of the loophole in the American trade sanctions after a hurricane ravaged parts of the island in November 2001.

Copyright © 2008 The Seattle Times Company

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PUBLISHED BY ‘THE SEATTLE TIMES’ (USA)

Posted in AGRICULTURE, COMMERCE, CUBA, ECONOMY, INTERNATIONAL, INTERNATIONAL RELATIONS, USA | Leave a Comment »

THE SHAME OF GITMO – In allowing prisoner abuse in the name of national security, the U.S. sinks to the level of the world’s most barbarous regimes

Posted by Gilmour Poincaree on November 17, 2008

November 14, 2008

Neil Steinberg - Sun-Times Columnist by Neil Steinberg – Sun-Times Columnist

THE COMPANY WE KEEP

It is 8,386 miles, as the crow flies, from a filthy solitary confinement cell at Burma’s infamous Insein Prison to the Grand Ballroom of the Ritz-Carlton Hotel on East Pearson Street in Chicago.

The moral distance is even further, from a freedomless police state whose official name — Myanmar — decent people hesitate to utter because of the illegitimacy of the government, to the United States of America, where the police don’t put a hood over your head and drag you off to years in solitary confinement for asking inconvenient questions, as happened to Burmese dissident Bo Kyi.

Yet Bo Kyi calmly bridged this enormous gap Tuesday, when he quietly addressed the Human Rights Watch dinner honoring him for his role in founding the Assistance Association of Political Prisoners.

The room gasped as he told of learning that some of his friends in Burma had just received 65-year prison sentences for activities that any college sophomore in the United States does out of habit — attending protests, distributing leaflets.

I was gratified to see this news the next day in the New York Times. One of the most vital roles the United States plays is to keep tabs on the wrongs of the world. While appeals to justice and decency usually mean nothing to tyrants, they can be embarrassed, eventually.

Our own government has proved hard to shame. Several Human Rights Watch speakers mentioned Guantanamo Bay, and how they look forward to Barack Obama closing this blot on America’s reputation.

Too many Americans don’t see the stain. They view reluctance to allow our nation to run a quasi-torture confinement center for foreign nationals as some kind of squishy “reading rights to terrorists” bleeding-heart liberalism.

They don’t understand the company we’re keeping, don’t realize just how frequently torture is used around the world. Nor do they grasp that their excuse — national security —is the exact same rationale offered up by every barbarous regime for the confinement and abuse of heroic champions of justice such as Bo Kyi.

They don’t grasp the specialness of the United States in historically avoiding this kind of behavior, nor the endangerment not only to our own rights — because what the military does today to foreign detainees in Cuba, the police could do to you tomorrow in Chicago — but also Guantanamo’s undermining of our moral authority to push back against regimes in places such as Burma. Guantanamo Bay made it easier for every tin-pot dictator who hangs his enemies on basement meat hooks to claim moral equivalency.

And for what? For the TV fantasy of the smirking terrorist who tells us where the bomb is hidden after Jack Bauer does what he has to do? That might work in “24.” But in the real world, we get hapless goat herders turned into hardened enemies after being subjected to years of abuse.

The truth is, in times of peril, our nation’s overreactions — from Lincoln suspending habeas corpus to the internment of Japanese citizens during World War II to Guantanamo Bay — never make us safer, never improve the situations they were meant to confront.

Never.

The United States is not strong because it crushes all who challenge it. We are strong because our laws and our principles are strong, and to the degree that we adhere to them — even when that is difficult, even when we are afraid — we will remain a beacon to the world, the whispered hope for every political prisoner in every cell around the globe.

Give us the good cookies!

“Did you know that Oreo cookies aren’t as sweet in China as they are here?” I told my wife.

She asked me how I came to this news, and I told her that the Wall Street Journal selected my pal Irene Rosenfeld, chairman and CEO of Kraft, as one of its “50 Women to Watch.” (A tad condescending, isn’t it? Is the head of a $34 billion company, a woman Forbes magazine listed as being more powerful than Oprah Winfrey or Queen Elizabeth II, really just “poised to have an impact on the world of business”? I’d say she’s there.)

The article uses the Chinese Oreo as example of Rosenfeld’s nimble leadership.

“Marketers there learned the cookie was too sweet for Chinese tastes, so they reformulated it.”

My wife’s reaction mirrored my own.

“Why do they get the good ones?” she asked. Indeed. Sweetness is far overrated. I prefer my chocolate like my life — bittersweet.

And since Kraft is already wildly experimenting with Oreo — double-stuffed, mint filling, you name it — I think they owe us over-sugared Americans the Oreo: Special Refined Chinese Version. At least have an executive bring back a package from Beijing, and we’ll open up a branch of the Chicago Sun-Times Test Kitchen at Kraft, pour the cold milk and see what the Chinese know that we don’t.

Today’s chuckle . . .

My brother Sam is a sharp guy. I don’t write about him much — he oils the gears of the Cook County government money machine — because I don’t want to sully him by association.

But we share that rarest of fraternal qualities, mutual affection, and have lunch as often as we can.

We had just finished polishing off two big platters of raw fish at Sushi Sai and stepped out into the surprisingly sunny November afternoon. Talk had been of the accelerating economic doom, and I was prattling on about how scary and incomprehensible it all is.

“I don’t WANT to go through five years of recession!” I whined, tot-like.

We were nearing the County Building.

“My only solace is that all the financial experts predict a long and protracted recession,” my brother said.

I took me half a second to grasp his meaning; his humor can be very dry. Then I got it.

“Ahhh . . . ” I said, grinning, and holding up a finger

“Ahhh . . . ” he answered, holding up one in reply. We shook hands, and I toddled up the street, my heart swelled with love and joy.

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PUBLISHED BY ‘THE CHICAGO SUN-TIMES’

Posted in HUMAN RIGHTS, INTERNATIONAL RELATIONS, THE OCCUPATION WAR IN IRAQ, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS | Leave a Comment »

FIDEL CASTRO LOOKS THIN BUT ALERT IN LATEST PHOTO (Cuba)

Posted by Gilmour Poincaree on November 17, 2008

14 Nov 2008, 0844 hrs IST, AP

Thursday.

The ailing 82-year-old former president is seen standing and peering at the camera with a hint of Fidel Castro - AFP Photosurprise on his face. His gray hair is combed back and his wispy gray beard is neatly trimmed. As if for support, he is holding onto the arm of Metropolitan Kirill, the church’s top foreign relations official.

The church said the picture was taken Oct. 20, when Kirill was in Havana for the consecration of a new Orthodox cathedral.

Cuban state media covered that meeting but did not release any images. It was the first image of Castro published since June 17, when government-controlled broadcasts showed him chatting in a garden during a visit by his close friend, Venezuelan President Hugo Chavez.

The latest image shows Castro wearing a black and white exercise suit, a variation on the red and blue Fidel Castro looks thin and frail but alert in a photograph from last month posted on the website of the Russian Orthodox Church on Cuban leader Fidel Castro in Havana - AFP Photo tracksuit that has become his standard uniform since he underwent emergency intestinal surgery and disappeared from public view in July 2006.

He is suffering from an unknown illness and has been holed up in a secret location. As with most other images, the Orthodox church’s photo shows him indoors, providing few clues to the exact location.

Raul Castro, Fidel’s hand-picked successor for nearly five decades, formally succeeded his brother as president this year.

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PUBLISHED BY ‘THE TIMES OF INDIA’

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WELCOME TO WALL STREET

Posted by Gilmour Poincaree on November 17, 2008

04/11/2008

Once upon a time in a village in America , a man announced to the villagers that he would buy Cheer up for more monkey businessmonkeys for $10.The villagers seeing there were many monkeys around, went out to the forest and started catching them.

The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts.

The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf In the absence of the man, the assistant told the villagers: ‘Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50.’

The villagers squeezed together their savings and bought all the monkeys.

Then they never saw the man or his assistant again, only monkeys everywhere!

Welcome to WALL STREET.

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BOURSES AND CRUDE OIL DECLINING IN TANDEM

Posted by Gilmour Poincaree on November 17, 2008

Published: November 15, 2008, 23:41

by Dalton Garis (*) – Special to Gulf News

Abu Dhabi: On Friday afternoon, the Dow Jones Industrial Average went from modest gains to another broad sell-off, falling 337.94 points. Related markets also sold off. The Chicago Board of Options Exchange is now seeing business in $30.00 a barrel (Dh110.22), or options to sell oil at $30.00.

That price has not attracted traders for almost two years. And Brent, against which 60 per cent of the world’s crude is priced, is now $53.85, with the Dubai Mercantile Exchange’s Oman futures contract, which the previous week stood at $56.17 for the OSP, now sits at $48.30, anticipating a Far East economic slowdown from reductions in exports to Western consuming nations. Just five months after hitting the all-time high of $141.20 for DME Oman, local crude prices have shed 66 per cent of their value.

The next technical support price in crude oil hardly matters now, as we are in uncharted territory with respect to price behaviour, either on technical grounds or based on the fundamentals.

The crude oil risk premium that existed when surplus production was in short supply was taken out of market prices weeks ago.

What is pulling prices down now are the realities of diminishing demand and increasing surplus supply.

The US in particular, the world’s largest oil consumer, has reduced consumption by about two million barrels per day. With price-inelastic supply and demand, even this modest demand decrease exerts large downward pressure on prices.

The world is experiencing the largest change in consumer behaviour in three decades: Up to now, world demand has been driven by consumption, utilising large amounts of revolving and rolled-over credit in the developed economies and export-driven growth in developing economies such as China, Brazil and India. Now, that assured source of growth will diminish significantly.

With the change from spending to savings, all sectors dependent on consumer activity are shrinking.

The CBOE’s OVX volatility index for crude oil remains in historically high territory, indicating continued anxiety by traders as to what crude markets are likely to do in the near future. But now, the back contracts, those for delivery in months and years into the future, are also shedding value as more certainty exists for longer-term recessionary forces to exert downward pressure on prices.

(*) – The writer is an associate professor of Economics and Petroleum Market Research at the Petroleum Institute, Abu Dhabi.

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CHINA NORTH EAST PETROLEUM BOOSTS 3Q PROFITS BY 241%

Posted by Gilmour Poincaree on November 17, 2008

Friday, November 14, 2008

China North East Petroleum Holdings Ltd.

China North East Petroleum has announced consolidated financial results for the third quarter ended September 30, 2008.

Third Quarter 2008 Results

Total sales for the third quarter were $19.1 million, a 227% increase compared to $5.8 million over the same period last year. This increase was due to an increase in crude oil production and the average price received for crude oil. Crude oil production for the third quarter doubled to 172,730 barrels from 86,222 barrels for the comparable quarter in the prior year. The increase in production was attributable to refracturing improvements and the implementation of water injection technology which improved efficiency of existing oil wells as well as from the addition of 30 new wells drilled during the third quarter of 2008.

The cost of sales in the third quarter increased by 214% to $9.2 million from $2.9 million for the three months ended September 30, 2007. The increase in cost of sales resulted primarily from the increase in production, depreciation of oil and gas properties, and an increase in the absolute amount of oil surcharges as a result of increased production.

Gross profit in the third quarter increased 241% to $9.9 million from $2.9 million in the same period last year. Third quarter gross margin increased to 52.0% compared to 49.9% in the year ago period.

Operating expenses increased to $978 thousand, or 5.1% of sales, from $291 thousand, or 5.0% of sales, in the third quarter 2007. This is primarily a result of an increase in selling, general and administrative costs. Operating income increased 241% to $8.9 million, or 46.8% of total sales, compared to $2.6 million, or 44.9% of total sales, in the prior year period.

Net income for the third quarter increased 229% to $4.9 million, or $0.24 per diluted share, versus $1.5 million, or $0.08 per diluted share, in the third quarter of 2007.

Hongjun Wang, President of China North East Petroleum commented, “We were pleased to report another strong quarter of revenue and profit growth and are on plan to report record production increases in 2008. We added 30 new wells during the third quarter bringing our total oil well count to 218 wells through September.

“Most of these wells have been installed in the Qian’an 112 oilfield where the majority of our wells are located.

During the quarter, we were particularly satisfied to see significant improvements to our financial liquidity. We grew our cash position by 220% sequentially to nearly $8 million and our operating cash flow improved notably as well. Based on the reserves within our four existing oilfields (Qian’an 112, Hetingbao 301, Daan 34, Gudian 31), we believe we have the capability of drilling approximately 675 wells in the coming years and believe the cash flows derived from oil we yield from our existing wells can support much of our well expansion activities in these areas.

“Heading into the fourth quarter, we expect to be impacted by lower per- barrel oil prices which will likely impact revenue growth but believe we can sustain our full year net profit projection of $14.5-$15 million and diluted EPS of $0.62-$0.65 due to our strong production rates in the second half of the year as well as from a lower government oil surcharge rate.

“As oil prices decline, the amount of oil surcharge we are required to pay to the Chinese government declines. During this difficult market environment, we are keeping our operating costs low and continue to implement strict cost controls in all key areas of operation. We are encouraged with our opportunity in the market and continue to focus on expanding our position in China’s oil market by adding more wells to our production capacity and seeking additional oil fields to lease and operate. We continue to expect very healthy quarterly revenue, EBITDA and profit growth, even at current oil price levels, and believe the growth plan we have in place will yield strong financial results ahead,” concluded Wang.

Nine Month 2008 Results

Sales for the nine month period ended September 30, 2008 increased 273% to $44.1 million compared to $11.8 million for the nine month prior year period. Crude oil production through the first nine months of 2008 increased 143% to 422,788 barrels from 174,280 barrels for the comparable period in the prior year.

Gross profit for the first nine months was $23.6 million, a 292% increase over $6.0 million in the same period last year. Gross margin increased 260 basis points to 53.6% compared to 51.0% in the year ago period.

Operating expenses through the first nine months of 2008 were $2.0 million, or 4.4% of sales, compared to $939 thousand, or 8.0% of sales, in the prior year period. Operating income increased 326% to $21.7 million, or 49.2% of sales, compared to $5.1 million, or 43.1% of sales, in the prior year nine month period.

Net income increased by 223% to $9.8 million, or $0.54 per diluted share, from $3.0 million, or $0.12 per diluted share, for the nine months ended September 30, 2007.

2008 Financial Outlook

The Company expects 2008 crude oil production to total approximately 623,000 barrels and the anticipated number of oil producing wells is expected to total approximately 240 wells by year-end 2008. This is a 133% increase from 267,516 barrels produced in 2007, when the company finished the year with 157 wells.

Based on the Company’s results through the first nine months of 2008, its drilling schedule for the remainder of 2008, and the current per-barrel price of oil received from PTR, the Company reiterates comfort with 2008 net income growth of 190%-200% to $14.5-$15.0 million, and fully diluted earnings per share growth of 195%-200% to $0.62-$0.65, compared to the 2007 fiscal year. The fully diluted EPS estimate range is based on a share count of approximately 24.0 million shares and assumes the exercise of all outstanding Company warrants.

Oil Pricing

Please note that CNEH’s sole customer, PTR pays the Company a price per barrel which is calculated on a monthly basis, and is based upon a lagged, daily price per barrel average for a relatively heavy, sour grade of crude oil that trades in Singapore. This daily price index is one of a large number of crude oil price indices maintained by Platts, an international commodity and trading company. The grade of oil for which the company is paid typically trades at a discount to West Texas or London Brent crude.

Government Oil Surcharge

Under a regulation introduced in June 2006 by the Chinese government, a surcharge of 20% has been imposed on Chinese oil producers on the portion of the selling price of crude oil which exceeds $40 per barrel and a surcharge of 40% is imposed on the portion of the selling price of crude oil which exceeds $60 per barrel.

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THE 401k …

Posted by Gilmour Poincaree on November 17, 2008

Originally published on Thursday, November 13, 2008

CHARGE BY DAVID HORSEY/a>

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PUBLISHED BY ‘THE SEATTLE POST-INTELLIGENCER’ (USA)

Posted in BANKING SYSTEM - USA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, RECESSION, USA, USA HUMOR | Leave a Comment »

CHINA ON RIGHT ECONOMIC PATH DURING WORLD RECESSION

Posted by Gilmour Poincaree on November 17, 2008

Last updated November 14, 2008 3:02 p.m. PT

The Economist

Asked what China will do to rescue the world from financial turmoil, its officials these days have a boilerplate answer: its “greatest contribution” will be to keep its own economy running smoothly.

It is tempting to dismiss this trite formulation as a meaningless excuse for inaction. For two reasons, that would be a mistake.

First it is broadly speaking true. Continued rapid growth in China can do much to mitigate the rich world’s recession. Second, the announcement last week of a massive fiscal-stimulus package suggests the government does intend to do what it can to keep its own economic engine purring.

The stimulus may turn out to be much smaller than the headline figure of 4 trillion yuan ($586 billion) over two years, which at some 14 percent of annual GDP would perhaps be the biggest peacetime stimulus ever.

The vague announcement may include large sums already earmarked in the budget. Its 10-item list of priorities covers everything from grain-procurement prices (up) to the corporate-tax burden imposed by VAT (down), taking in infrastructure, post-earthquake reconstruction, health care, education and environmental protection.

Yet even if this list reads like a national letter to Santa Claus, the package is still a giant step in the right direction. It shows that China’s leaders have grasped the dangers, that they have the fiscal and borrowing scope to tackle them, and perhaps most important that they are sending a political signal of their readiness to do so.

An economic slowdown is already under way in China and could worsen next year. After years of double-digit expansion, even 6 percent annual growth feels like a hard landing and will exacerbate social tensions.

China’s own leaders believe they need growth of at least 8 percent a year to avoid painful unemployment — even this year, thousands of smaller firms have gone bust. They are right that spending on infrastructure and on measures to encourage domestic spending is among the best ways to sustain growth.

China is not Japan in the 1990s, littered with bridges to nowhere. It is still a poor country where rail and road networks have much room for improvement — if that is indeed how the money is spent, rather than on lavish town halls and other “monuments” to corrupt local officials.

Moreover, in directing money to the poor and into the health and education systems, the package may help unwind the grotesque global distortion that has seen poor Chinese farmers’ savings in effect help finance the debt-fueled excesses of Western consumers.

If the 800 million in China’s countryside are persuaded to spend their money rather than save it, stronger domestic consumption could give a big boost to an economy still skewed towards exports.

But the government seems half-hearted in this structural shift: it has also announced a raft of measures to subsidize exports. And it is doing too little to ease the worries that make China’s people cling on to their cash: how to meet unexpected medical bills; how to pay for a good education for their children; how to provide for their old age.

Government health spending especially, at less than 1 percent of GDP, is woefully low — and not tackled meaningfully in this package.

Nor is there anything to bring forward the other reform that would do most to raise rural incomes: giving farmers stronger rights over their most valuable asset, the land they farm. Short, usually 30-year, leases give them little security, and they cannot mortgage them to raise money.

The Communist Party last month unveiled a “new” policy on landholdings. It was a damp squib. Global financial turmoil should encourage it to produce some fireworks.

From The Economist magazine. Copyright 2008 Economist Newspaper Ltd.

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G20 CLOSES IN ON DEAL TO DETECT RISKY INVESTING AND WEAK SPOTS

Posted by Gilmour Poincaree on November 17, 2008

Published: November 15, 2008, 23:41

AP

Washington: European officials at the extraordinary Group of 20 summit in the US capital yesterday World leaders Saturday, Nov. 15, 2008, for the family photo at the Summit on Financial Markets and the World Economy at the National Museum Building in Washington, D.C.said a draft agreement among the world leaders likely would call for intensified government efforts at bolstering national economies, cooperation on international regulation of the financial system and reform of global structures to aide needy developing countries.

Signalling a shift away from the traditional global economic dominance of the United States, the European Union and Japan, developing economic powerhouses from China to Brazil took a seat at the meetings.

The International Monetary Fund has reported expectations that worldwide growth next year would be fuelled by such countries even as US, EU and Jap-anese economies shrink.

In comments to reporters on Saturday, German Chancellor Angela Merkel noted the shift.

“It is the first time that emerging and developed countries are meeting together in this way and are really in with both feet. In this respect it is a new beginning in a very, very difficult situation. It gives hope that policies can operate jointly,” she said. “The world financial summit will adopt an action plan here today and thus demonstrate the international community’s ability to act.”

British Prime Minister Gordon Brown said early yesterday that world leaders were making progress in what he termed difficult talks, but that final agreement on the particulars of global regulation and reform were not likely to come out of the Washington meeting. He added, however, the assembled leaders would be able to agree on “quick action results,” on fiscal policy, like tax cuts or public spending increases.

President George W. Bush agreed that there was progress at the summit, with world leaders moving closer to a deal to better detect risky investing and regulatory weak spots.

But, he said, the crisis has not ended and much work needs to be done.

Before the leaders began their talks yesterday, Bush said he was pleased that they are discussing a way to move forward.

Coordinated response

European officials, speaking on condition of anonymity because the draft agreement was still under negotiation, said a follow-up meeting was likely in April in London, Paris or Tokyo, after President-elect Barack Obama takes over in the White House.

In a radio address Obama said he was pleased Bush brought world leaders to Washington to discuss turmoil in the financial markets, “because our global economic crisis requires a coordinated global response.” In an effort to avoid surprise calamities like the one now sweeping the globe, the assembled leaders were expected to focus on a commitment to tougher accounting rules and greater transparency. They formally opened the session with an sumptuous White House dinner before getting down to business yesterday in closed-door talks.

The leaders were on track to approve measures to make the world financial system more accountable to investors and more transparent to regulators, officials said.

That would included more effective accounting rules governing how companies value their assets, a weakness seen as partly responsible for the current financial crisis.

A new early warning system would look for signs of problems like those in the US housing market and related overuse of mortgage-backed securities.

On Friday, the heads of the International Monetary Fund, the world’s financial firefighter, and the Financial Stability Forum, a group that includes central banks and major financial regulators, said they would cooperate on “early warning exercises” to detect vulnerabilities.

Also, a new “college of supervisors” would gather global regulators to scrutinise the world’s largest financial institutions together to compare notes as they seek to spot excessive risk-taking.

The president-elect stayed away from the meeting, but designated former Secretary of State Madeleine Albright and former Rep. Jim Leach to represent him in meetings with leaders on the sidelines.

In addition to Brown, leaders from France, Germany, Russia, China and India were among those in Washington.

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ASO WANTS BANKS TO COME CLEAN ON NON-PERFORMING LOANS (Japan)

Posted by Gilmour Poincaree on November 17, 2008

Published: November 15, 2008, 23:41

AP

Washington: Japanese Prime Minister Taro Aso believes world leaders gathering this weekend to Newly elected Liberal Democratic Party President Taro Aso speaks during a press conference at the party headquarters in Tokyo, Japanconfront global economic turmoil can learn valuable lessons from Japan’s efforts to recover from its own financial crisis in the 1990s, a spokesman said.

During that decade, the world’s second-largest economy was strongly criticised for doing too little to improve its banking sector’s health after a stock and real estate bubble burst.

Aso’s message at the summit is that banks must quickly and fully disclose their non-performing loans and remove them from their balancesheets, spokesman Kazuo Kodama told reporters on Friday.

Soul-searching

Leaders have “no luxury to engage in blame games”, Kodama said, but they should engage in “candid soul-searching on why this happened”. Aso, who planned meetings with the leaders of Brazil, Britain, Indonesia, Australia and the European Union, came to this weekend’s gathering of 20 of the world’s biggest developed and developing economies after announcing that Japan was ready to lend up to $100 billion (Dh367.8 billion) to the International Monetary Fund (IMF) to support nations reeling from the global financial crisis.

Kodama said Aso hopes China and countries in the Middle East also will contribute.

He said the IMF and World Bank’s governance structures should be reviewed to reflect better the world economic structure’s changing nature.

Japan has almost $1 trillion in foreign currency reserves, and officials in Tokyo have repeatedly said Japan was ready to provide the IMF with money for rescue packages. The Washington-based IMF has dipped into its reserves to provide emergency loans to Iceland, Hungary and Ukraine worth more than $30 billion.

Financial recovery efforts in Japan have contributed to an environment of more profitable lending; many banks have merged to face global competition, after years of writing off mountains of non-performing loans that piled up after the bubble burst in the early 1990s.

Kodama, in outlining Aso’s position on the economic crisis, said that providing public funds for banks also would help resolve the problem of non-performing loans. He said: “The world should also be making efforts to support the dollar-based currency system, on which the current international economic and financial systems rely.”

Meanwhile, the finance ministers of China, South Korea and Japan also met on Friday evening and agreed that their countries “should play a pivotal role in maintaining economic and financial stability in the region,” according to a joint statement.

They recognised the need to boost financial cooperation and agreed to explore an “increase in the size of bilateral currency swap arrangements” among the countries.

Top finance officials from the countries will hold a financial stability workshop in Tokyo on November 26.

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BNB AMPLIA INCENTIVOS A EXPORTAÇÃO – São R$ 500 milhões em recursos disponíveis para empresas localizadas nas regiões Nordeste e Norte (Brasil)

Posted by Gilmour Poincaree on November 17, 2008

14/11/2008 – 10h55

por Carlos Rocha – Jornal Meio Norte

O Banco do Nordeste acaba de ampliar o volume do Cresce Nordeste Exportação, linha de crédito de incentivo às empresas exportadoras situadas em sua área de atuação. Com a medida, o Banco disponibilizará R$ 500 milhões para empreendimentos localizados na região Nordeste e norte dos estados de Minas Gerais e Espírito Santo. O valor é dez vezes superior ao montante anteriormente fixado e deverá ser utilizado na compra de matérias-primas e insumos. Os recursos são provenientes do Fundo Constitucional de Financiamento do Nordeste (FNE).

Graças ao novo aporte de recursos ao Cresce Nordeste Exportação, as empresas de grande porte localizadas em áreas do semi-árido ou municípios de baixa renda terão limite máximo de financiamento aumentado para R$ 20 milhões (antes era R$ 5 milhões). No caso de empreendimentos também de grande porte, mas localizados em outras partes do território nordestino, o limite será expandido de R$ 3,75 milhões para R$ 15 milhões. Os demais tipos de financiamentos variarão de R$ 135 mil para R$ 7,5 milhões (ver tabela).

“O montante será destinado a empresas exportadoras justamente no momento em que vários bancos estão retraindo a oferta de recursos, quer por dificuldade de acesso a linhas de crédito, quer por certa aversão ao risco”, afirmou o presidente do Banco do Nordeste, Roberto Smith. Para ele, o cenário econômico atual pode servir de oportunidade para o BNB consolidar sua imagem como principal agente de desenvolvimento da Região.

Segundo o gerente do Ambiente de Operações de Câmbio, Ernesto Leite, a expectativa é de que todo o volume de crédito seja aplicado. “O efeito esperado é auxiliar as empresas exportadoras a enfrentar a crise, agindo de maneira complementar”, afirmou. Desde que foi lançado, em abril de 2008, o Cresce Nordeste Exportação já destinou R$ 60 milhões a empresas nordestinas.

Cresce Nordeste Exportação

Lançado com disponibilidade inicial de R$ 50 milhões, o Cresce Nordeste Exportação visa incrementar a participação de empresas instaladas na Região Nordeste ou norte de Minas Gerais e do Espírito Santo no índice de exportação nacional. Com taxa de juros atrativa e operacionalização desburocratizada, a linha de crédito prioriza empreendimentos localizados no semi-árido nordestino e em municípios de baixa renda.

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PIB DO PIAUÍ DOBRA NO FINAL DO GOVERNO DE WELLINGTON DIAS

Posted by Gilmour Poincaree on November 17, 2008

14/11/2008 – 08h:29

O governador Wellington Dias (PT) participa hoje da divulgação do Produto Interno Bruto (PIB) do Piauí O Governador Wellington Dias (PT) relativo ao ano de 2006, às 8h30, na Escola Fazendária, feita pelo Instituto Brasileiro de Geografia e Estatística (IBGE) e Fundação Cepro (Centro de Pesquisas Econômicas e Sociais do Piauí). Sua participação tem jeito de festa porque o PIB do Piauí dobrou de 2002 quando foi eleito, para 2006 quando ele tinha prometido dobrar até o final de sua ad ministração em 2010.

“O governador Wellington Dias prometeu dobrar o PIB do Piauí até o final da administração. Não posso dizer o valor atingido em 2006 que vai ser divulgado amanhã (hoje) pelo IBGE, mas posso garantir que Wellington vai cumprir com folga sua promessa de dobrar o PIB do Piauí”, falou o presidente da Fundação Cepro, Oscar de Barros.

O último PIB do Piauí divulgado pelo IBGE foi o de 2005, que ficou em R$ 11,129 bilhões, um crescimento de 4,5% em relação ao anterior.

Foi um salto considerável porque quando Wellington Dias assumiu o Governo do Estado o último ano anterior ao início de sua gestão, 2002, registrou um PIB de R$ 7,425 bilhões.

Para dobrar o PIB que receber, Wellington Dias teria que atingir os R$ 14,8 bilhões. Oscar de Barros lembra que o PIB do Piauí vem em uma fase de crescimento a cada ano. Em 2003, primeiro ano da administração de Dias, o Produto Interno Bruto do Piauí ficou em R$ 8,777 bilhões, com um crescimento de R$ 5,5%.

Em 2004, o PIB piauiense ficou em R$ 9,817 bilhões, com crescimento de 6,2%, o maior dos últimos anos.

“O PIB que será divulgado amanhã (hoje) mostra a boa fase do Piauí por conta da ação da iniciativa privada e também porque o governo age com planejamento e metas de trabalho”, declarou Oscar de Barros.

O PIB, segundo Oscar de Barros, mostra o comportamento dos setores primário (agricultura), secundário (indústria) e terciário (serviços). “Nós conseguimos no Piauí com conjunção da iniciativa privada e do Governo, cada um fazendo o seu papel.

Isso ajuda no crescimento da economia e, em consequência, do PIB”, afirmou Oscar de Barros, informando que o Estado continua com um dos mais baixos PIBs do país, com uma participação de 0,51% a 0,52% do Produto Interno Bruto nacional.

“Nós temos conseguido médias de aumento igual ou superior à do Nordeste e do país”, falou Oscar de Barros. O governador Wellington Dias diz que o Piauí ainda não conseguiu avançar muito no aumento do PIB “per capita”, que representa a renda por habitante.

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