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Archive for December 10th, 2008

RESOURCE COUNTERS HELP SEND STOCKS TO FIVE-WEEK HIGH (South Africa)

Posted by Gilmour Poincaree on December 10, 2008

December 10, 2008

Reuters and Bloomberg

PUBLISHED BY ‘BUSINESS REPORT’ (South Africa)

Johannesburg – Stocks climbed to a five-week high yesterday buoyed by firmer mining shares.

The Top40 index rose 5.28 percent to 19 986.66 points on Wednesday, while the broader all share index climbed 4.67 percent to 21 930.94 points, levels last seen on November 5.

Gideon Muller, a trader at Thebe Securities said: “Commodity prices are picking up our market [such as] your mining houses and platinum shares.”

BHP Billiton rose 11.48 percent to R188.95 and rival Anglo American gained 7.71 percent to R230.50.

AngloGold Ashanti rose 11.08 percent to R271.

Anglo Platinum increased 8.92 percent to R455 and Impala Platinum advanced 2.5 percent to R121 after platinum prices firmed.

Pallinghurst Resources fell 2.25 percent to R4.35. The company and the Bakgatla Ba Kgafela tribe would invest $175 million (R1.8 billion) in Platmin to allow the company to fund the construction of its Pilanesberg platinum mine in the North West.

Sasol climbed 7.01 percent to close at R299.63.

Kumba Iron Ore slipped 3.7 percent to R157, the biggest decline since November 28. The iron ore producer plans to proceed with an R8.5 billion expansion as its competitors slash output.

Banking stocks, which are sensitive to interest rate moves started to march higher after a report showed retail sales slumped for a sixth month, raising speculation the central bank will cut rates today.

African Bank Investments Limited rose 6.11 percent to R28.12 and Standard Bank ticked up 1.09 percent to R83.49.

Garth Mackenzie, the head of derivatives trading at BoE Stockbrokers, said:

“The stimulus packages continue to boost growth expectations. “We are also seeing quite big gains in the local retailers ahead of the interest rate announcement.”

MTN surged 7.7 percent to R102.99. JD Group increased 8.7 percent to R33.95.

Tiger Brands rallied 3.5 percent, to R147.

Simeka Business Solutions added 7.7 percent to 42c, rising for the first time in six days. The information technology company said first-half earnings a share advanced as much as 40 percent.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘BUSINESS REPORT’ (South Africa)

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Posted in BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, COPPER, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GOLD, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, IRON ORE, METALS, MINING INDUSTRIES, PLATINUM, PRECIOUS METALS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SOUTH AFRICA, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

THE AFDB TO MOBILIZE U.S. $450 MILLION FINANCING FOR GUINEA ALUMINA PROJECT

Posted by Gilmour Poincaree on December 10, 2008

10 December 2008

Sponsor Wire – African Development Bank (Tunis)

PUBLISHED BY ‘ALL AFRICA’ (Botswana)

The Board of Directors of the African Development Bank (AfDB) authorized a financing package for the USD 6.3 billion Guinea bauxite mine and alumina refinery project in Guinea. Given the size of the project and to assure its firm support for Guinea’s development during the current global financial crisis, the AfDB not only approved a non-sovereign loan of USD 200 million, but also undertook to syndicate on best efforts basis, a B-loan of USD 100 million to be funded by participating commercial banks. In addition, the Bank will mobilize through the African Financing Partnership (AFP) up to USD 150 million in parallel co-financing by participating Development Finance Institutions.

The Guinea Alumina Project is transformational and timely for Guinea as it enables the country to add value to domestic resources by refining non-exportable grade bauxite into exportable alumina and increases the proportion of bauxite processed in-country from the current level of about 12% to more than 45%. In addition, the project includes significant ancillary infrastructure improvements and expansions, and spurs SME development. As the first large-scale private sector investment in the country, representing nearly twice its GDP, the project is also expected to catalyze future investments in the country’s extractive industry.

This project is consistent with the Bank’s Private Sector Operations (PSO) strategy to support large industrial projects, particularly those that aim at increasing local value added and creating employment. The Guinea Alumina Project will generate attractive economic benefits and significant fiscal revenues for the Government.

The project is expected to create about 12,000 direct and indirect jobs during construction and 2,000 direct full-time jobs during operation. Moreover, given the project’s associated SME Linkages Program, it also fits well with the Bank’s strategy for promoting SMEs and additional jobs. The project fulfills the Bank’s objective of increasing its private sector investment in Africa’s low-income countries to 40% of total approvals.

Mandla Gantsho, Vice-President in charge of infrastructure and private sector operations observed that, “this project is groundbreaking and hence will change the whole economic and social landscape of Guinea for a better future for the population”. Tim Turner, Director of the Private Sector Department noted with pleasure that “the Guinea Alumina Project will launch the African Financing Partnership (AFP), the collaboration platform that brings together a number of DFIs operating in Africa, into its first concrete transaction.

The Bank will work with the Government of Guinea as well as the project sponsors to ensure harnessing of the benefits of the project for Guinea’s development through technical assistance, and financing for targeted government projects, particularly in the power and transport sectors.

Contact: Media: O. Nicol-Houra, Tel: +216 7110 3227

Technical: H. Iman, Tel : +216 7110 3003

Copyright © 2008 African Development Bank. All rights reserved.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘ALL AFRICA’ (Botswana)

Posted in ALUMINUM, BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENVIRONMENT, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, GUINEA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, MINING INDUSTRIES, RECESSION, THE FLOW OF INVESTMENTS, TUNIS | Leave a Comment »

U.S. ARMS SALES UNDERMINE HUMAN RIGHTS, GROUP SAYS

Posted by Gilmour Poincaree on December 10, 2008

Dec. 10, 2008, 1:31PM

by Barry Schweid – Associated Press

PUBLISHED BY ‘THE HOUSTON CHRONICLE’ (USA)

WASHINGTON — The U.S. arms trade is booming — sales reached $32 billion last year — and more than half of the purchasers in the developing world are either undemocratic governments or regimes that engaged in human rights abuses, a private think tank reported today.

Timed to the 60th anniversary of the U.N.’s Universal Declaration of Human Rights, the report by the New America Foundation, a nonpartisan policy institute, named 13 of the top 25 arms purchasers in the developing world as either undemocratic or engaged in major human rights abuses.

The 13 listed in the report were Pakistan, Saudi Arabia, Iraq, United Arab Emirates, Kuwait, Egypt, Colombia, Jordan, Bahrain, Oman, Morocco, Yemen and Tunisia.

Sales to these countries totaled more than $16.2 billion over 2006 and 2007.

The total “contrasts sharply with the Bush administration’s pro-democracy rhetoric,” the report said.

Also, the report said that 20 of the 27 nations engaged in major armed conflicts were receiving weapons and training from the United States.

“U.S. arms transfers are undermining human rights, weakening democracy and fueling conflict around the world,” the report said.

William D. Hartung, the lead author of the report, said, “The United States cannot demand respect for human rights and arm human rights abusers at the same time.”

U.S. arms sales grew to $32 billion in 2007, more than three times the level when President Bush took office in 2001, the report said.

The United States is the world’s largest arms supplier. U.S. exports range from combat aircraft to Pakistan, Morocco, Greece, Romania and Chile to small arms and light weapons to the Philippines, Egypt and Georgia.

In 2006 and 2007, the United States sold weapons to more than 174 states and territories.At the beginning of the Bush administration there were 123 arms clients, the report said.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE HOUSTON CHRONICLE’ (USA)

Posted in BAHRAIN, BANKING SYSTEMS, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, CHILE, COLOMBIA, COMMERCE, COMMODITIES MARKET, DEFENCE TREATIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EGYPT, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, FOREIGN POLICIES - USA, FORMOSA - TAIWAN, GEORGIA, GREECE, HUMAN RIGHTS, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAQ, ISLAMIC BANKS, ISRAEL, JORDAN, KUWAIT, MILITARY CONTRACTS, MOROCCO, OMAN, PAKISTAN, PHILIPPINES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, ROMANIA, SAUDI ARABIA, THE ARMS INDUSTRY, THE FLOW OF INVESTMENTS, THE ISRAELI-PALESTINIAN STRUGGLE, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE LEBANESE CIVIL STRUGGLE, THE OCCUPATION WAR IN IRAQ, THE UNITED NATIONS, UNITED ARAB EMIRATES, USA, WAR IN AFGHANISTAN, WARS AND ARMED CONFLICTS, YEMEN | Leave a Comment »

BUY NOW, SUFFER LATER: HOW BANKS CASH IN ON CREDIT-CARD BATTLERS (Australia)

Posted by Gilmour Poincaree on December 10, 2008

December 10, 2008

by Kelly Burke – Consumer Affairs Reporter

PUBLISHED BY ‘THE SIDNEY MORNING HERALD’ (Australia)

Consumers are racking up more than $1 billion in cash advances on their credit cards in a single month, marking a 14 per cent increase on the same time last year.

With the exception of dubious pay day lenders, cash advances on credit cards are one of the most costly ways of borrowing money, with daily interest calculated at as much as 21 per cent with no interest-free period.

Yet according to the latest figures from the Reserve Bank, credit card holders withdrew $1092 million in cash from their credit card accounts in September, an increase of $134 million compared to last September.

The number of credit cards held by Australians has also increased by 10 per cent over the past year, prompting the NSW Opposition yesterday to accuse the State Government of defaulting on its responsibility to ensure ethical lending practices for credit cards.

In May last year, the then Minister for Fair Trading, Linda Burney, announced that the NSW Government was “leading the push to rein in credit card debt”, promising to crack down on providers offering easy access to credit cards without any rigorous assessment of the card holder’s ability to repay, and offers of large increases in credit limits on existing cards.

Since then, a discussion paper on the issue, promised in December last year but delivered eight months late, concluded that the introduction of any new credit laws in NSW would take between three and five years.

At a subsequent Council of Australian Governments meeting in October, it was agreed the responsibility for the regulation of credit card lending practices be gradually transferred to the Commonwealth from next year.

Ms Burney’s successor, Virginia Judge, said the NSW Government was now assessing the submissions received on the discussion paper and would report back to the Commonwealth early next year. But the Opposition’s spokeswoman for Fair Trading, Catherine Cusack, said the Government appeared to have lost interest in credit card reform and no longer considered the issue important.

The RBA’s latest $1092 million figure for monthly credit card cash advances is not a record. The figure first tipped the $1 billion mark in December 2004 and since then has fluctuated between $869 million and $1114 million.

The co-ordinator of the Consumer Credit Legal Centre, Karen Cox, said with the exception of people using the cash advance service for topped-up credit cards while holidaying overseas, consumers resorting to cash advances did so because of extreme financial stress, rather than through choice.

Christopher Zinn, a spokesman for the consumer advocate group Choice, said many people were not aware of the hidden costs associated with cash advances, including the practice by some billers of counting payments made through Bpay using a credit card as a cash advance.

Moreover, low interest rate cards can sometimes charge the most for cash advances. An ANZ Balance Visa card, for example, charges an interest rate of just 13.41 per cent, but its cash advance rate is 20.41 per cent.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE SIDNEY MORNING HERALD’ (Australia)

Posted in BANKING SYSTEMS, COMMERCE, CONSUMERS AND PSYCHOLOGICAL FACTORS, E-COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, RECESSION | 1 Comment »

CHINA REAFFIRMS YUAN POLICY, WILL CUT TAXES

Posted by Gilmour Poincaree on December 10, 2008

December 10, 2008 at 6:42 AM EST

Reuters

PUBLISHED BY ‘THE GLOBE & MAIL’ (Canada)

BEIJING — China’s top leadership wrapped up a three-day strategy meeting on Wednesday with a pledge to ramp up public spending and cut taxes to promote domestic demand in the world’s fourth-largest economy.

The Central Economic Work Conference, judging that the economy was heading into rougher waters as the global financial crisis spread, set the pursuit of steady growth as the top priority for 2009, state radio reported.

“The general requirements for next year’s economic work are maintaining stable but rapid economic growth by boosting domestic demand,” the radio summarized the meeting as concluding.

It said the leadership reaffirmed China’s long-standing policy of maintaining the yuan’s exchange rate basically steady at a reasonable, balanced level.

However, the meeting agreed on the need to take measures, which were not spelled out, to stabilize external demand.

China earlier on Wednesday reported unexpected declines in both exports and imports in November from year-earlier levels as the economy suddenly slumped.

“At present, China’s economic operation is facing greater difficulties,” the radio said. “Downward pressure on the economy is increasing.”

The report made no mention of a numerical target for growth in 2009, but state media have said the authorities would do all they could to “protect eight” – a reference to the 8 per cent growth rate widely thought to be necessary to create enough jobs for the millions of people entering the work force every year.

The economy expanded 11.9 per cent in 2007, its fifth straight year of double-digit growth. But the pace has slowed sharply in recent months and the World Bank is forecasting just 7.5 per cent growth in 2009.

To prop up growth, the government launched a 4-trillion yuan ($586-billion U.S.) stimulus plan on Nov. 9 and the central bank followed up on Nov. 26 by slashing interest rates by 1.08 percentage points – four times its usual margin.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE GLOBE & MAIL’ (Canada)

Posted in BANKING SYSTEMS, CENTRAL BANKS, CHINA, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, NATIONAL WORK FORCES, RECESSION, THE FLOW OF INVESTMENTS, THE WORK MARKET, WORLD BANK, YUAM RENMIMBI (China) | Leave a Comment »

BIG FOUR POISED TO TAKE OVER COMMERCIAL LENDING – The major Australian banks will be forced to shoulder a greater share of commercial lending, as international banks retreat from the domestic financing market (Australia)

Posted by Gilmour Poincaree on December 10, 2008

December 11, 2008

by Scott Murdoch – The Australian

PUBLISHED BY ‘THE AUSTRALIAN’

A report from Deutsche Bank has found that $84 billion worth of corporate debt is to be refinanced over the next two years, forcing company directors to examine their equity options.

The investment bank said in the first half of this year, the top four banks were responsible for half the new syndicated loan allocations.

The portion taken by the domestic banks was up from 34 per cent in 2007, after a marked contraction in activity by US and European banks.

So far this year, the European share has retreated from 34 per cent to 28 per cent, and US bank participation has more than halved from 14 per cent 6 per cent.

The report said since 2006, $280 billion worth of syndicated debt was raised in Australia, of which 60 per cent is held by offshore banks.

Deutsche Bank’s head of leveraged finance Marla Heller said the increase in corporate activity over the past two years had led to the significant amount of debt raisings.

“There has been growth from 2005 to 2007. A big driver of that is the private equity and the leveraged buyouts,” Ms Heller said.

“Also, from 2006 and 2007 there were a significant number of corporate refinancings.

“I think in the first half of 2008, we saw the retreat of foreign banks. The Australian banks will be more like the cornerstones.”

It has been estimated the most debt due to mature is held among real-estate investment trusts, utilities and infrastructure.

Deutsche predicts international banks will depart since the introduction of regulations requiring companies to have better financial coverage of their assets.

“It is hard to see the Australian banks having all of the capacity to fill the void,” Ms Heller said in reference to the retreat of foreign banks.

“We will see opportunities for other entrants coming in and that won’t be just the banks but private equity.

“I think corporates are going to have to look at how they support themselves from a capital point of view.”

Deutsche Bank’s managing director of global banking in Australia, David Backler, said there would be a growing role from private equity firms which, globally, are holding almost $1 trillion worth of cash.

He said: “There are going to be large effects with $84 billion worth of debt maturing. Where is that going to come from?

“We think that the Australian banks have a big job to do because of the foreign banks retreating.

“The offshore debt markets are challenged. That is going to lead people down the path of equity raisings and more private equity.”

Deutsche has forecast lending and refinancing deals will be structured differently in 2009, with fewer banks in large scale syndicates.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE AUSTRALIAN’

Posted in AUSTRALIA, BANKING SYSTEM - USA, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, EUROPE, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, GERMANY, INTERNATIONAL, INTERNATIONAL RELATIONS, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

DOW JONES INTRODUCES FIRST GLOBAL ANTI-CORRUPTION DATABASE TO VERIFY EMPLOYEE ACTIONS – Dow Jones Anti-Corruption is First to Confirm Effectiveness of Workforce Training, Ethics Policies; Helps Institutions Limit Exposure to Corruption, Manage Risk

Posted by Gilmour Poincaree on December 10, 2008

December 09, 2008

Copyright: PR Newswire – Source: PR Newswire

PUBLISHED BY ‘INSURANCE NEWS NET’

SAN FRANCISCO and LONDON, Dec. 9 /PRNewswire/ – To assist corporations and financial institutions working to meet anti-corruption regulations worldwide, today Dow Jones Risk & Compliance announced the release of its groundbreaking Dow Jones Anti-Corruption global database. The solution enables organizations to guard against exposure to risk by identifying entities requiring more oversight and control due to global anti-corruption regulation.

With Dow Jones Anti-Corruption, senior management can effectively address risk by verifying information from their workforce and third party agents, screening employees and business partners, and auditing the accuracy of existing records.

“Knowing the true background of your business partners, clients and contractors is becoming especially important as authorities begin to investigate if the anti-corruption ‘Tone at the Top’ of an organization is actually being implemented in practice,” said Rupert de Ruig, Managing Director of Dow Jones Risk & Compliance. “Dow Jones Anti-Corruption is a powerful new tool that enables firms to implement efficient and effective audit processes and, therefore, trust but verify the behavior and business practices of their staff and business associates. This verification represents the next step in anti-corruption compliance because organizations can now confirm if traditional measures, such as ethics policies and workforce training, are properly employed by staff and third party agents, and proactively address trouble areas that are identified.”

The database’s release also coincides with the global recession which is causing many organizations to seek business opportunities in new markets with new customers and unfamiliar intermediaries, all of whom pose a potential corruption risk.

“The result of these tougher times, means businesses cannot afford to ignore opportunities outside of the regions and customer base they are familiar and comfortable with,” said Mr. de Ruig. “Dow Jones Anti-Corruption enables organizations to assess new markets and business relationships so they can confidently expand their business while staying within their risk tolerance.”

Dow Jones Anti-Corruption was developed following the request of a consortium of U.S. financial institutions which approached Dow Jones in 2007 to build a solution for managing exposure from the Foreign Corrupt Practices Act and other anti-corruption regulations. The institutions were subscribers of the Dow Jones Watchlist service (formerly Factiva Public Figures & Associates) and believed Dow Jones had the experience, resources and capability to develop a truly global anti-corruption solution.

Dow Jones Anti-Corruption covers politically exposed entities, current and former public officials, and other individuals or entities of potentially heightened-risk. Information is compiled by highly-skilled researchers who continuously monitor credible, open source information, using their unique linguistic and country expertise to ensure the most accurate and up-to-date information available.

The global database is the first of Dow Jones’s dedicated anti-corruption solutions. On February 4-5 in New York City, Dow Jones will host the Global Ethics Summit (www.globalethicssummit.com) with Ethisphere. The two-day conference features corporate and legal executives discussing strategies for and trends in developing and implementing global anti-corruption initiatives.

To learn more about Dow Jones Risk & Compliance, visit www.fis.dowjones.com/products/risk.html or contact Kim Gagliardi at (603) 864-8873

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

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘INSURANCE NEWS NET’

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CORRUPTION, CRIMINAL ACTIVITIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA | Leave a Comment »

REPUBLIC WINDOWS OWNER LINKED TO IOWA PLANT PURCHASE (USA)

Posted by Gilmour Poincaree on December 10, 2008

December 08, 2008 – 7:18 PM

by Peter Sachs

PUBLISHED BY ‘CHIGAGO TRIBUNE’ (USA)

A company managed by the wife of Republic Windows and Doors owner Richard Gillman recently purchased an Iowa plant that manufactures similar products, according to public records.

Gillman has come under fire in recent days for abruptly closing Republic’s Goose Island plant and refusing to provide workers there with the 60 days notice and pay required by federal labor law.

Echo Windows and Doors was created two weeks ago and lists Sharon Gillman as its manager, according copies of records obtained by the Daily News from the Iowa Secretary of the State. According to Cook County property tax records, Sharon Gillman is Richard Gillman’s wife.

The couple purchased a $2.6 million Oak Street condo together in 2007, according to property records.

The Gillimans could not be reached for comment today. But this afternoon, Richard Gillman released a statement confirming the creation of the new company.

Also, Amy Zimmerman, who has served as Republic’s marketing director, is now listed as the contact on the newly registered echowindows.com domain name. She refused comment today.

Republic officials have blamed the shutdown on Bank of America’s refusal to provide continued financing.

Republic employees have staged a sit-in at the company’s plant since Friday, and have enlisted numerous politicians in their cause.

Earlier today, Gov. Rod Blagojevich said the state would stop doing business with the bank until it gives Republic the money it needs to stay afloat. Local elected officials, as well as the Rev. Jesse Jackson and President-elect Barack Obama, have urged the company to give the workers their 60 days of pay.

The Iowa plant was formerly operated by TRACO, a window company headquartered in Pennsylvania. Traco confirmed the sale to Echo in a news release last week.

Workers at the plant say Echo officials visited the plant on Thursday, informing them of the sale and shutting down production briefly to do a full inventory of the factory.

“Everybody seemed like they were just kind of confused the day that I was there,” says Herald Wiltshire, an employee there.

Two weeks ago, Traco switched from running two production shifts per day to just one, citing slowing orders for their windows, Wiltshire said. About that same time, the company announced layoffs at another one of its factories, in Bainbridge, Ga., the Post-Searchlight newspaper reported.

But on Friday, the Red Oak plant started up its second shift again, following the announcement from Echo, Wiltshire says.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘CHIGAGO TRIBUNE’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CENTRAL BANKS, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY INDUSTRIES, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN WORK FORCE - LEGAL, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

REPUBLIC WINDOWS & DOORS PLANT SIT-IN STILL A STALEMATE – FIRM’S TALKS WITH BANK OF AMERICA, UNION CONTINUE

Posted by Gilmour Poincaree on December 10, 2008

December 10, 2008

by Robert Mitchum – Tribune reporter – Tribune reporters Hal Dardick and Dan Mihalopoulos contributed to this report

PUBLISHED BY ‘CHIGAGO TRIBUNE’ (USA)

An offer by Bank of America to extend more credit to Republic Windows & Doors on Goose Island failed by late Tuesday to develop into an agreement to dislodge workers who have been occupying the closed plant for five days in protest of losing pay and benefits.

Representatives of the bank, the company and the workers’ union met for more than seven hours Tuesday, the second straight day of talks aimed at resolving the standoff. The media frenzy surrounding the situation ebbed as attention was focused on the arrest of Gov. Rod Blagojevich on corruption charges. But community support remained strong, with several unions and religious leaders leading spirited demonstrations outside the building and lending support to the 200 workers and their families inside.

Restless but optimistic, Ricardo Caceres, 39, a 15-year Republic worker, said as the talks dragged on, “I’m waiting for whatever, the good news and the bad news. Everybody’s prepared,” he said.

Meanwhile, city officials, including Mayor Richard Daley, continued to lament the showdown. He said workers “should be paid” the vacation and severance pay they say they’re owed, and that the city is looking into whether the company should refund development funds used to construct its plant.

Republic received more than $10.4 million by the end of 2007, according to a city report. Alderman and administration officials said they were reviewing agreements with Republic which specified that the company maintain certain employment levels through 2019.

“Is there a provision in the agreement that would give the city the legal ability to recover the money?” asked Ald. Joe Moore (48th), who has backed the workers. “If not, shame on the administration and us, the City Council, for not making it part of the agreement and any other agreement.”

Early Tuesday, Bank of America sent a letter to Republic offering to provide limited loans so the company could pay employee claims. Though that sparked hope of a resolution, Bank of America spokeswoman Diane Wagner said agreement on the terms of those payments was still to be reached between management and union representatives.

“We’ll worry about ourselves later; right now we want to do what’s right for those employees,” Wagner said.

She also responded to a timeline released by Republic Monday, which stated that the company had proposed plans in October for an “orderly wind down” of the factory that the bank rejected. The bank had been concerned about Republic’s finances since February and had discussions with owners about closing the plant as early as July.

“Republic had plenty of time to give their employees 60 days’ notice under the WARN act,” Wagner said. “But instead they kept employees in the dark about the company’s dire financial circumstances.”

Workers and their supporters say the company may have violated that federal law by not telling them of the closing until just days before the plant was shuttered.

Wagner also clarified that Bank of America did not cut credit to Republic last week. Rather, she said, Republic maxed out its line of credit from the bank.

Outside the factory Tuesday morning, more than 100 members of religious group Interfaith Worker Justice held a prayer service, sang spirituals and gave fiery speeches in support of the workers.

“I don’t believe that the American people would have $25 billion go to a bank while workers who need the support for that money are standing outside on the street with nothing in their pockets,” said Rev. Nelson Johnson, a pastor from Greensboro, N.C.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘CHIGAGO TRIBUNE’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FOREIGN WORK FORCE - LEGAL, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, NATIONAL WORK FORCES, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

VICTORY FOR THE UNITED ELECTRICAL WORKERS PLANT TAKEOVER IN CHICAGO! (USA)

Posted by Gilmour Poincaree on December 10, 2008

Published: Tuesday, December 09, 2008

Author: Workers Action

PUBLISHED BY ‘PORTLAND INDYMEDIA’ (USA)

On December 5, in Chicago, the owners of Republic Windows and Doors were set to close their doors after declaring financial ruin and abruptly laid off its 260 mostly Latino workers. Rather than passively accepting this kick in the teeth, the United Electrical Workers Union (UE) members decided to fight back, using a tactic not seen in this country since the 1930’s. They occupied the factory and have continued to do so in shifts since Friday.

This struggle is of exceptional importance because of its boldness in responding to the economic crisis and how it is affecting working people. This boldness could set an example for future confrontations and therefore deserves the attention and support of all workers.

The chain of events leading to this crisis started when Republic Window’s creditor, Bank of America, refused to extend credit to the company. According to Crain’s Chicago Business, Republic Window’s sales had fallen from $4 million to $2.9 million in the last month. However, Bank of America is flush with $25 billion from the bi-partisan bail out. At a solidarity demonstration outside the plant on Saturday, protesters expressed the situation concisely with stickers and signs reading, “You got bailed out, we got sold out.”

Workers are demanding $1.5 million in severance and vacation pay owed them by management. Federal law mandates that workers get paid for unused vacation time and are either given 60 days notice of a mass layoff or pay for that time. The UE workers were only given three days notice of the closing. Republic Window and Door’s officials are claiming that Bank of America is not allowing them to make these required payments and benefit adjustments. Bank of America has responded by stating that they have no “…right to control whether a company complies with applicable laws or honors its commitment to its employees.” While this bickering between thieves continues, the workers’ intolerable situation and justified anger remains. “We aren’t animals,” Apolinar Cabrera, a 17-year Republic Windows employee, told Chicago Town Daily News. “We’re human beings and deserve to be treated like human beings.”

Workers have also expressed their suspicion that Republic Windows and Doors intends to move out of state and restructure their finances, leaving debt and misery in the wake. Some have reported that as early as two weeks ago the company started moving equipment out of the plant.

In this economic crisis, given what the capitalists are trying to get away with by making working people pay for the recession, the stakes are high. A 14-year machine operator at the company, Ron Bender, observed, “We’re doing this for the other working people in the country. What’s happened to us can happen to anyone — they could just close up and put you out and give you no severance pay.”

The AFL-CIO and Change to Win, as well as all other organizations concerned with the rights of working people should line up in solidarity with these UE members by educating and mobilizing their ranks in support. A victory could embolden workers across the country to resist the results of Wall Street’s greed and the bailout, which will be all the more needed as times grow harder. It could serve as a stepping stone for greater victories in the future where workers will not simply demand vacation and severance pay from a bankrupt company, but demand that such a company be nationalized under workers’ control. Furthermore, such a working class movement could go beyond addressing the problems at a given company and win victories for all workers in the areas of health care, ending the current wars, ensuring adequate funding for education, creating jobs for all, and so on.

The news has been brutal and frightening for workers over the last few months. A worldwide recession of unknown depth and duration is unfolding. In this country, the number of home foreclosures is expected to hit seven million by the end of the year. Last month alone 533,000 workers lost their jobs, contributing to the highest unemployment rate in 15 years. And while this decline accelerates, workers have been stung with a Democratic Party-led bi-partisan bailout of the financial institutions whose reckless greed is responsible for this mess. The New York Times estimates that this rescue package for the wealthy will cost seven trillion American taxpayer dollars (see “The Bail Out Intensifies” on this site). While this arrangement helps to ease the capitalists’ anxiety, they place a dark cloud over working people’s future. Rather than promoting economic growth, the bailout measures are more likely to result in hoarding on the part of the bailout’s beneficiaries as well as produce inflation. Meanwhile, unemployment will continue to climb, and there will be further slicing of our already cut-to-the-bone social safety net by the capitalists’ politicians.

The inevitable consequence of such developments is that people are left with no choice but to fight against the conditions they are forced to endure. They begin to see that there are opposed interests at play between those who control the economy and political system, and those who are expected to do all the sacrificing. Workers will be compelled to act and, as a result, begin to become aware of themselves as a class where, if they are to defend themselves and their rights, must unite against those who are accustomed to ruling them without question. Under such circumstances, the workers’ demands are always modest and partial to begin with, but, to the degree that their actions rely on their independent strength as a class, they plot a course towards growing confrontation with the capitalist status quo and thereby raise the question of who shall control society, working people or the rich minority. Nationwide, such a course initially starts with an accumulation of small skirmishes, unavoidably leading to a social explosion that can place the working class’ interests on the historical stage in a way that would have been seen as impossible just a short time ago. The worker’s occupation of Republic Windows and Doors could prove to be a skirmish that sets the example for a working class upsurge that will bring more change and hope into our lives than any capitalist politician ever could.

There is no telling how long this occupation and the struggle behind it will continue. Workers, Republic Windows and Doors, and Bank of America are supposed to meet at 4:00pm on Monday. Nevertheless, these workers’ actions have already made a mark in labor history. Food has been coming for them from all over in solidarity. You can donate by going to http://www.ueunion.org and clicking on “anger in Chicago,” or by writing a check payable to the “UE Local 110 Solidarity Fund” and sending it to UE Local 1110 Solidarity Fund, 37 S. Ashland, Chicago, IL 60607. Messages of support can be sent to organizer Leah Fried. At the Jobs with Justice Web site, you can send a message of protest to Bank of America. http://nyc.indymedia.org/en/2008/12/101949.html. You can also call UE at 312-829-8300.

Even President-elect, Barak Obama, because of massive public support for the UE workers, has felt compelled to offer support to the workers at Republic Windows and Doors in the form of lip service, without promising any specific action.

Organized labor should call on the government to take over Republic Windows and Doors and let the workers run the plant themselves. This demand could be part of a government emergency public works project that would make all public buildings, beginning with public housing, more energy efficient by installing new windows and doors. Such a program could then be the first step in establishing a broad-based coalition that would advocate a public works program that would put people back to work while maintaining their standard of living. This program could instill confidence among working people and their allies and inspire them to proceed onwards to fundamentally change the economic system so that it would serve the needs of people, not the pursuit of profits for the rich.

In these hard times, now more than ever, an injury to one is an injury to all. A victory for UE Local 1110 at Republic Windows is a victory for all workers!

HOMEPAGE: WORKERS ACTION

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘PORTLAND INDYMEDIA’ (USA)

Posted in BANKING SYSTEM - USA, BANKRUPTCIES - USA, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), COMMERCE, COMMODITIES MARKET, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENERGY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN WORK FORCE - LEGAL, FREEDOM OF SPEECH AND CONSCIENCE, HOUSING CRISIS - USA, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, MACROECONOMY, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

LOBSTER FISHERS GROW DESPERATE – PRICES PLUNGE (Canada)

Posted by Gilmour Poincaree on December 10, 2008

Published: Tuesday, December 09, 2008

by Janet Whitman – Financial Post

PUBLISHED BY ‘THE FINANCIAL POST’ (Canada)

NEW YORK – Add the lobster industry to the list of those bashed and battered by the global economic meltdown.

The price fishermen are fetching for a fresh catch has tanked to a nearly two-decade low as consumers lose their appetite for extravagance.

Wholesalers here have knocked about US$3 a pound off their prices, but fancy restaurants and high-end hotels around the city aren’t biting.

“There’s something about the psyche of consumers that says it’s a luxury item,” said Ian MacGregor, a New York wholesaler who typically sells a million pounds of lobster a year to New York’s top restaurants and hotels. “We’re selling one-claw lobster for as little as US$4.50-a-pound.

“We haven’t seen prices that low forever,” said Mr. MacGregor. “But the restaurant industry doesn’t seem to be reacting.”

The situation is becoming desperate for Maine and Nova Scotia fishermen, who are barely breaking even after paying for diesel and bait.

At the season’s open last week on Nova Scotia’s South Shore, fishermen staged a spontaneous two-day strike, putting up a road blockade and refusing to pull traps, to protest the weak prices. They soon voted to go back to work, however, after agreeing that a little money was better than none at all.

With the global economy crumbling, the “shore” price fishermen are getting for a pound of lobster has fallen to $3.25, down from $5 a year ago and $7 before Christmas last year. Fisherman are worried the price might dip below $3 a pound, nearing the low of $2 in 1990 that led to strikes.

“I would say this is the most difficult situation I’ve seen, no question about it,” said Ashton Spinney, a fisherman in Argyle, N. S., who bought his first licence to fish lobster in 1957. “The lobster fishery is the economic engine that drives the economy here in south western Nova Scotia. None of these difficulties are of its own doing. It’s going to need serious help.”

One big reason fishermen are finding themselves in much deeper water this time around is because the business is a lot more expensive than it was a couple of decades ago.

As lobster prices soared over the past decade, many fishermen in Maine and Nova Scotia upgraded their boats, with some spending $450,000 or more on new vessels.

With the price of acquiring a lobster licence costing around as much in recent years, some fishermen could be in danger of bankruptcy.

To cope with the downturn, Nova Scotia fishermen are pushing for politicians to extend employment insurance benefits and to force banks to come up with longer payback periods for boat loans.

“No bank is interested in owning a bunch of lobster boats,” said Denny Morrow, executive director of the Nova Scotia Fish Packers Association on Yarmouth, N. S.

“Everybody in the industry is hunkering down. It’s going to be a tough time for a year or two. [But] we’ve gone through business cycles before and there’s always a brighter day ahead.”

As the economy is struggling, demand — and prices -are likely to remain weak, he added.

“Lobster is a special-occasion food. It’s not something people eat on Wednesdays or twice a week.”

One positive to come out of the lower prices is that some consumers who might not have thought of purchasing lobster in the past are considering it now.

Dan Zawacki, who started a mail-order lobster business 21 years ago in Chicago, believes his sales are holding up because customers who might be reluctant to spend hundreds on an expensive meal out with wine feel they can afford the luxury of a less expensive lobster dinner delivered direct.

He introduced a half-price “Lobster Bailout” promotion to stimulate demand last month after the U. S. government approved a US$700-billion bailout for Wall Street.

“I had a customer call me the other day and say it’s one of those affordable luxuries,” said Mr. Zawacki.

“He told me he might not go out and spend $3,000 on a flat-screen TV, but he does like to have a nice dinner around the holidays.”

In New York, Mr. MacGregor has seen a similar jump in consumer demand from customers at his retail location, the Lobster Place, in Manhattan’s Chelsea Market, as prices come down. “But the vast majority of lobster we sell is still to restaurants and hotels,” he added.

That means that until the economy starts to turn around and customers at restaurants, hotels and cruise ships start demanding lobster again, the price is likely to remain cheap.

BY THE NUMBERS

The sinking tale of a marine crustacean’s prices:

– $3.25 per pound, the current price of off-the-boat lobster in Nova Scotia.

– $5 per pound, the price this time last year.

– $7 per pound, the price by last Christmas.

– $4-$5 the price many Nova Scotia lobstermen need to break even.

– $2 per pound, the price 18 years ago, which led to a strike by Nova Scotia lobstermen.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE FINANCIAL POST’ (Canada)

Posted in CANADA, COMMERCE, COMMODITIES MARKET, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, ENVIRONMENT, FINANCIAL CRISIS 2008/2009, FISHERIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, NATIONAL WORK FORCES, RECESSION, THE WORK MARKET, THE WORKERS | 1 Comment »

FOR FOOD AND JUSTICE PLANS – RP to borrow $500M from ADB (Philippines)

Posted by Gilmour Poincaree on December 10, 2008

First Posted 20:54:00 12/09/2008

by Joel Guinto – INQUIRER.net

PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’

MANILA, Philippines – The National Economic Development Authority (NEDA) has approved two loan packages worth $500 million for a food crisis response plan and government’s justice reform program.

The projects were presented to President Gloria Macapagal-Arroyo during a full Cabinet meeting in Malacañang Tuesday, Press Secretary Jesus Dureza told reporters.

“These are meant to provide interventional assistance to the poor and the vulnerable,” he said.

The government will borrow $300 million from the Asian Development Bank (ADB) for the Governance in Justice Reform Program (GJRP), which aims to increase the resources of the justice sector to enable efficient delivery of its services, especially to the poor, according to a Palace statement.

The loan has a maturity period of 15 years, inclusive of a three-year grace period, it said.

Manila will also borrow $200 million from the International bank of Reconstruction and Development for Food Crisis Response, which will be used to lower and stabilize food prices in the short term, mitigate the impact of high food prices on poor households, and improve the delivery of social services, especially to poor households, it said.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’

Posted in AGRICULTURE, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FARMING SUBSIDIES, FINANCIAL CRISIS 2008/2009, FOOD INDUSTRIES, FOOD PRODUCTION (human), INTERNATIONAL, NATIONAL WORK FORCES, PHILIPPINES, RECESSION, THE WORKERS | Leave a Comment »

RELIANCE AWARDS AKER 2ND PHASE OF SUBSEA DEVELOPMENT FOR $235MM (India)

Posted by Gilmour Poincaree on December 10, 2008

Tuesday, December 09, 2008

Aker Solutions

PUBLISHED BY ‘THE RIGZONE’

Aker Solutions has signed a change order to an existing contract with Reliance Industries Ltd, India, for the second phase of development on the MA-D6 subsea field. Valued at US $235 million, the contract includes the transportation, installation and commissioning of the second phase of the MA-D6 subsea development, including a gas export system and production wells.

Last year, Aker Solutions signed a contract for the first phase of development, including the delivery of a complete subsea production system, including umbilicals, to Reliance Industry’s fast-track MA-D6 development. Aker Solutions managed the first phase subsea installation of the field.

The MA-D6 field, located in the Bay of Bengal, produced first oil in record-breaking time from discovery to production on Sept. 17, 2008.

“Reliance Industries is one of the world’s fastest growing oil companies and will be a significant player in the Bay of Bengal’s deepwater developments. Aker Solutions is proud to be selected as their partner once again,” said Egil Boyum, SVP Subsea Systems, Aker Solutions.

The 2nd phase installation is scheduled for completion by the second quarter of 2009. The contract party is Aker Solutions subsidiary, Aker Installation FP AS.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE RIGZONE’

Posted in ASIA, BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MACROECONOMY, PETROL, RECESSION, REFINERIES - PETROL/BIOFUELS, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

SAUDI ARABIA’S OIL EQUATION – OPEC has a math problem

Posted by Gilmour Poincaree on December 10, 2008

Monday, December 08, 2008

by Liam Denning – THE WALL STREET JOURNAL via Dow Jones Newswires

PUBLISHED BY ‘THE RIGZONE’

When demand for oil is rising, members of the Organization of Petroleum Exporting Countries take extra portions from the expanding output quota pie. But when it falls, as now, they are supposed to share the pain of lower production even as oil prices are declining, a double blow to cash flows.

As the organization’s biggest member, much of the burden of managing all this rests on Saudi Arabia.

Yet it also must consider its customers and long-term demand.

This largely explains OPEC’s recent decision to put off further output cuts, even as crude prices continued sliding. It also is why oil bulls can expect little relief from Riyadh next year.

Saudi Arabia’s current output quota is 8.5 million barrels a day. After domestic use, that leaves seven million barrels for daily export. Ahmad Abdallah, commodity analyst at financial-services firm GaveKal, points out that Saudi Arabia’s 2008 budget was set at $109 billion. With oil exports accounting for just under 90% of public revenues, that equates to an oil price of $38 a barrel to balance the budget. The OPEC basket price has averaged $98.50 a barrel this year.

Nymex crude-oil futures, having dropped 17% in the past week alone, now command just $42. The OPEC basket price typically trades at a discount of $5 to $10. Were Nymex crude to average $40 next year, and OPEC crude $35, Saudi Arabia’s 2009 oil-export earnings could drop to $89 billion.

The problem is, that price forecast may require OPEC to cut perhaps another 2 million barrels a day. If Saudi Arabia contributed half of this, its implied export earnings drop to $77 billion, opening up a big deficit.

Fortunately for Saudi Arabia, it has stashed a cushion of petrodollars to manage this. It also has other factors to consider.

Beijing’s decision announced Friday to link domestic fuel prices more closely to international markets is particularly alarming. Subsidies have boosted Chinese demand. Reforming them suggests China, the fastest-growing oil consumer, is getting serious on energy efficiency just as America, the biggest oil consumer, has elected a president pushing the same agenda.

Saudi Arabia needs to keep the world addicted to oil as long as possible, so giving it a breather with lower oil prices isn’t a bad thing. As a bonus, this also will challenge Iran and Russia, both of which need much higher oil prices to balance swollen budgets.

So Saudi Arabia has a near term chance to squeeze its biggest regional rival and its main non-OPEC competitor.

Other OPEC members won’t take this lying down. Many will likely prefer to bust quotas, pressuring prices further.

For oil bulls, 2009 promises to be as easy as Chinese algebra.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE RIGZONE’

Posted in CHINA, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MACROECONOMY, PETROL, RECESSION, SAUDI ARABIA, THE FLOW OF INVESTMENTS | Leave a Comment »

CUBAN TOURISM SURGES AS REST OF CARIBBEAN STALLS – Tourism In Cuba Up Nearly 11 Percent Despite 3 Hurricanes

Posted by Gilmour Poincaree on December 10, 2008

HAVANA, Dec. 8, 2008

The Associated Press

PUBLISHED BY ‘CBS NEWS’ (USA)

(AP) Cuba’s vacation industry has remained as hot as the tropical sun here, even as the world economic crisis sparks cancellations and layoffs elsewhere in the Caribbean.

The communist country says it’s booked solid through December and expects a record 2.34 million visitors this year _ largely because global financial woes have so far been softer on Canada, its top source of visitors.

Luck also played a role: While the island suffered three devastating hurricanes, its key tourist sites were largely spared. And where beachfront resorts did get hit, the tourist-hungry government has made sure to repair hotels _ in some cases even before damaged homes and infrastructure. Tourism is Cuba’s second-largest source of foreign income, behind nickel production.

So while other islands in the region are laying off hotel workers and suspending construction of new property, Cuban resorts are gearing up for a strong season.

“We’ve had a few cancellations, but overall our numbers are still strong,” said David Gregori of WowCuba, a travel agency in Charlottetown, Canada, that specializes in bicycle trips and other Cuba tours. “People still like to get away. They might try to save some money while doing it, but they’re still traveling.”

The number of foreign visitors has swelled nearly 11 percent this year, making up for 4 and 3 percent declines in 2006 and 2007, government figures show.

Officials offer no explanation for those slower years. But tour operators blame the island’s low returning-visitor rates: Some tourists complain of poor service, crumbling infrastructure and lousy food, indicative of a communist system where shortages are common and state employees are unaccustomed to putting customer service first.

Still, the island is often cheaper than its subtropical neighbors, because many foreigners buy all-inclusive packages offering dozens of direct flights from Europe and Canada to airports all over Cuba, as well deep discounts on hotels, food and booze.

Others are enticed by the prospect of seeing one of only five communist countries left on the planet.

“A lot of people who are going for simple fly-and-flop holiday, and there are others who are going for history and culture, dancing, music,” said Julia Hendry, marketing director for Europe and the United Kingdom of the Bahamas-based Caribbean Trade Organization. Cuba has both, she said, “whether it’s swimming and beach or the excitement of Old Havana and Cuban history.”

About 35 percent of this year’s tourists have been Canadian, with 635,000 visiting through September, one-fifth more than in the same period last year. Canada’s economy has not suffered the same losses now sapping the savings of homeowners in the U.S.

Russian tourists rose 40 percent to top 28,000 thru September, and Cuban Tourism Minister Manuel Marrero traveled to Moscow last month to further promote his country.

Visitors from Britain, Italy, Spain and Germany, the top suppliers of tourists after Canada, declined between 3 and 5 percent respectively, however.

Washington’s trade embargo prohibits Americans from visiting, though island immigration records show about 41,000 came last year, many presumably without permission. But not relying on U.S. tourists may now be a blessing.

“Canadians are going to keep coming, especially with snow at home,” said Helen Lueke of Sherwood Park, Canada, who has vacationed in Havana about once a year for decades.

Alexis Trujillo, Cuba’s deputy secretary of tourism, predicted full bookings at least through next summer.

“There’s no doubt tourism is always sensitive to everything,” he said of global economic turmoil. “But we don’t think that for Cuba that will mean an important decrease.”

Tourism generated $2.2 billion for Cuba in 2007. The government has announced no plans to delay a $185 million plan to upgrade more than 200 resorts and build 50 boutique hotels by 2010 _ nt even after Hurricanes Gustav, Ike and Paloma hit within two months, causing more than $10 billion in damages and crippling farms and infrastructure across the countryside.

Construction crews assigned to vacation properties in Havana and elsewhere have largely continued working as normal since the storms.

In the eastern province of Holguin, the island’s No. 3 tourist destination after Havana and the beach resort of Varadero, officials prioritized hotel repairs, trucking in workers to rebuild beachfront resorts. Holguin expects about 270,000 foreigners this year, about the same as 2007, despite scores of hurricane-related cancellations.

Havana’s decaying yet picturesque historic district saw little damage, as did Varadero, 90 miles (140 kilometers) to the east, where white sand and warm, see-through surf has enticed everyone from Fidel Castro to Al Capone. A record million visitors are expected to stay in the town’s 7,000 hotel rooms, which range in price from about $120 to $350 per night, with meals and open bar included.

Though European tour operators say sales have slowed since the financial crisis deepened in October, they expect trips to Cuba and some other Caribbean destinations to stay strong through the winter. Europeans are putting off short, side trips closer to home, but many families are still willing to splurge on once-a-year trips to the tropics, Hendry said.

“We have noticed that all-inclusive markets, where travelers can budget in advance, seem to be doing relative well. Cuba is quite well-populated with that sort of property,” she said.

The industry could get another boast if President-elect Barack Obama keeps campaign promises to ease restrictions on Cuban Americans who want to visit their relatives on the island. Currently, those with family here can only come once every three years.

Nelson Gonzalez, a 56-year-old physical therapist, said his mechanic brother in Miami last came to visit in 2007. But his brother called the morning after the U.S. election to say he was reserving a seat on one of the many special charters that fly from the U.S. to Havana for the last week in January _ confident Obama will ease family travel rules immediately after his Jan. 20 inauguration.

“When your family members reach a certain age, you don’t know if in three more years everyone will still be here,” said Gonzalez, who lives with his 80-year-old parents.

Though visiting family members spend less than tourists, Gregori said many Cuban Americans use his company to book rental cars in advance of visiting relatives.

But “if you want to rent a car in Havana in December, I don’t have any,” he said. “They’ve been sold out for months, and every year they get sold out earlier and earlier.”

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘CBS NEWS’ (USA)

Posted in BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CANADA, COMMERCE, CUBA, ECONOMIC CONJUNCTURE, ECONOMY, EUROPE, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, FOREIGN POLICIES - USA, GERMANY, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, ITALY, NATIONAL WORK FORCES, RECESSION, RUSSIA, SPAIN, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, TOURISM INDUSTRIES, UNITED KINGDOM, USA | Leave a Comment »

ECONOMIC WOES: ISLAM’S ANSWER (Saudi Arabia)

Posted by Gilmour Poincaree on December 10, 2008

9 December 2008 Editorial

PUBLISHED BY ‘ARAB NEWS’ (Saudi Arabia)

Major new ideas or radical change tend not to happen in normal times when systems are running smoothly and people are generally content. It is in times of crisis that great change is usually triggered. We are in a time of crisis. Hardly a day passes without new tidings of financial disaster. The latest grim news is from the German insurance industry that predicts that 200,000 businesses will go bust in Europe and 62,000 in the US next year — which suggests that 2009 will not see the start of an economic recovery. Perhaps, given that we live in such “interesting” economic times, it is not so surprising then that on the same day the German report was published came the suggestion, from Saudi Arabia’s Grand Mufti Abdul Aziz Al-Asheikh, that Muslim countries form an economic bloc.

The grand mufti’s comments, made in his address to the nearly three million pilgrims assembled at Mount Arafat for what is the spiritual climax of the annual Haj, has been picked up by the media across the world as if his sermon was political and economic. It was not. The main theme was a call to Muslims to show the world “the bright face of Islam”, to demonstrate forgiveness, love and peace and to shun extremism which can lead to terrorism.

It is far from the first time that the grand mufti has made such calls. What was new, however — and it clearly explains the sudden global interest — is his accompanying comments on the world’s present economic woes, the charge being that they have been brought about by human greed. Specifically it is the use of interest as the foundation of international finance that is to blame. From there has come the proposition that Muslim countries should reject interest, adopt Shariah-compliant economics and unite to form what could become, as he put it, a “formidable economic power”.

The grand mufti is not alone in taking a moral approach to the crisis; other religious leaders around the world have also blamed it on human greed. Nor is the idea of an Islamic economic union new. Calls for one regularly surface. Former Pakistani Prime Minister Shaukat Aziz is a keen supporter of the idea. But the ideas are timely. The remarkable growth in Islamic banking in recent years was because an increasing number of concerned Muslims with financial muscle could see that many aspects of international banking and finance were inimical to Islamic law. They demanded an alternative. But, growing though they are, Shariah-compliant economics has remained the minority system. The Western economic order dominates — across the Muslim world too. The big difference now, however, is that that old order is seen to have demonstrably failed. In these uncertain times, governments and states are looking for ways to stimulate fresh economic growth. In Muslim countries, it is bound to result in renewed interest in Islamic finance and in an economic union. Given the present circumstances, perhaps such a bloc is an idea whose time has come. Certainly it deserves serious consideration. Of course, it would not be a good thing for the world to be divided into potentially competing blocs. That would be dangerous. Large, collaborating blocs, however, are a different matter. Not that an Islamic economic union could happen overnight. It would have to begin small and grow — the European Union’s path to its present existence. How it might come about is one thing; enthusiasm for it is another. In the present climate, it would indeed be remarkable if support for the notion does not grow.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘ARAB NEWS’ (Saudi Arabia)

Posted in BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, INTERNATIONAL, INTERNATIONAL RELATIONS, ISLAM, ISLAMIC BANKS, ISLAMIC DEVELOPMENT BANK, MACROECONOMY, PAKISTAN, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SAUDI ARABIA, THE FLOW OF INVESTMENTS | Leave a Comment »

NO POLITICAL CONDITIONS ON RUSSIAN ARMS SUPPLIES FOR LEBANON – Officials: ‘There are no obstacles in terms of equipping the army’

Posted by Gilmour Poincaree on December 10, 2008

Monday, December 08, 2008

by Andrew Wander – Daily Star staff

PUBLISHED BY ‘THE DAILY STAR’ (Lebanon)

BEIRUT: Russia will not attach political conditions to any future supplies of military hardware to the Lebanese Armed Forces (LAF), senior defense officials said over the weekend. Speaking after a meeting on Saturday with Mikhail Dimitriev, Russia’s military co-operation chief, Defense Minister Elias Murr said: “There are no obstacles in terms of equipping the army. We prepared for my visit to Russia next week.”

Murr said the path was clear for discussing with his Russian counterpart in Moscow “what could be provided to the LAF.”

A senior Defense Ministry source told The Daily Star the types of weapons that could be supplied have not yet been discussed, but insisted there would be “no political conditions” attached to any arms deals between Russia and Lebanon.

The source said LAF commanders are currently deciding what weapons they would like to obtain from Russia, and said they will meet with Murr before his trip to Moscow, scheduled for December 15, to make him aware of their requests.

Speaking on Saturday, Dimitriev said Russia is keen to encourage regional stability and considers “it very important to see a strong LAF.”

He said that Moscow wishes to “provide a new pulse to our bilateral relations in the military and technical field.”

Dimitriev also met with parliamentary majority leader Saad Hariri, whose own visit to Russia in mid-November sparked controversy. Hariri was reported by Russian media to have offered Lebanese recognition for the Russian-backed breakaway Georgian provinces of South Ossetia and Abkhazia.

Russia’s Interfax news agency quoted Hariri as saying that US support to the LAF was limited to light weapons and that Lebanon needed a supplier of more powerful military hardware, including “tanks and artillery.”

The US says it is seeking to bolster Lebanese state forces so that they can establish their authority throughout Lebanon’s territory. Washington considers Hizbullah, which has a strong presence in parts of the country, a “terrorist organization” and believes the best way to undermine it is to build up the power of central state authority.

The Pentagon insists that policy is designed to strengthen the LAF within the country, not to create a “juggernaut” that could challenge regional stability. In particular, Washington does not supply weapons that would challenge Israel’s “qualitative edge” in military hardware, a Pentagon official said last week.

Lebanon is courting several potential arms suppliers apart from the US. Last week, President Michel Sleiman asked the German defense minister, Franz Josef Jung, for alternative tanks but German officials have said the request is unlikely to be granted because of a national law preventing the sales of arms to conflict zones.

On a trip to Iran at the end of November, Sleiman was reported to have struck a deal with defense officials in Tehran that could involve the supply of medium-range rockets and other heavy weapons to the LAF.

Murr is expected to visit Syria soon to discuss defense issues. His trip will come after Jean Kahwaji, the commander of the LAF, met with Syrian President Bashar Assad in Damascus to discuss military co-operation, but unlike Kahwaji’s trip, Murr said an agenda would be agreed on in advance and submitted to the Cabinet for approval.

Analysts say that the current round of LAF rearmament is the most substantial since the 1980s, and that the range of potential suppliers demonstrates the fine balance of power in the region.

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PUBLISHED BY ‘THE DAILY STAR’ (Lebanon)

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IRAN OIL OUTPUT OVER 4 MLN BPD

Posted by Gilmour Poincaree on December 10, 2008

Monday, December 6th, 2008

by Michel Rocard

PUBLISHED BY ‘THE ARAB TIMES’ (Kuwait)

TEHRAN, Dec 6, (RTRS): Iran is producing over 4 million barrels of crude per day (bpd), the head of the state oil firm was quoted as saying on Saturday, roughly 250,000 bpd more than an estimate provided by the country’s Opec governor. Iran’s representative to the Organisation of the Petroleum Exporting Countries, Mohammad Ali Khatibi, said on Thursday the Islamic Republic was pumping at around 3.8 million bpd and was complying fully with its share of the cartel’s oil supply cuts. But Seifollah Jashnsaz, managing director of the National Iranian Oil Company (NIOC), said in comments carried by the official IRNA news agency on Saturday: “In view of Opec’s production cut that went into effect at the beginning of November, Iran’s current crude oil production stands between 4,050,000-4,080,000 barrels per day.”

A Reuters survey earlier this week put Iran’s output in November at 3.9 million bpd, a higher figure than the one given by Khatibi but lower than the output cited by Jashnsaz. The reason for the different figures for the crude output of Iran, Opec’s second-largest producer, was not clear and officials were not immediately available for comment. In his Dec. 4 comments to Reuters, Khatibi said Iran had cut 199,000 bpd as required under Opec’s October agreement to reduce supply by 1.5 million bpd. He said Iran was pumping at around 4 million bpd before the October cut.

Khatibi’s comments on compliance were at odds with industry estimates that Iran has met little of its pledge to reduce supply. Opec, source of more than a third of the world’s oil, meets in Algeria later this month to discuss how to halt oil’s fall of more than $100 from its July peak of over $147 a barrel as a global financial crisis hit energy demand in consumer nations. Iran’s Oil Minister Gholamhossein Nozari said last Sunday that the oil market was oversupplied by around 2 million bpd. Opec ministers meeting in Cairo on Nov. 29 deferred a decision on a new oil supply cut amid signs that Saudi Arabia and its Gulf allies were demanding tighter adherence with previous restraints.

Flagged

Delegates in Cairo flagged Iran and Venezuela, who have both urged deeper Opec cuts, as sources of concern on quota compliance.

In Saturday’s IRNA report, Jashnsaz did not mention any figures about Iranian output cuts, but said Iran’s oil production capacity had reached 4.23 million bpd and expressed hope it would rise to 4.3 million by March next year.

Iran’s crude oil export revenue so far in the 2008-09 Iranian year stood at $61 billion, he said, adding its average exports during the year amounted to 2.35 million bpd.

He said output from the Darkhovin oil field, in Iran’s south-west, would increase by 60,000 bpd to 160,000 bpd by the end of the Iranian year that runs to March.

Echoing comments by another NIOC official this week, Jashnsaz said Iran would need around $160 billion for development projects within its oil and gas sector, saying it would have to rely on both domestic and foreign investment.

NIOC’s director of planning, Abdolmohammad Delparish, told a seminar on Thursday that Iran needs investment of that magnitude in the next five years in its oil and gas industry.

Iran is the world’s fourth largest oil producer, but despite sitting on the world’s second biggest gas reserves has yet to become a major gas exporter. Jashnsaz said gas output had risen this year by around 70 million cubic metres to 580 million.

Also:

KUALA LUMPUR: Malaysia’s state-owned oil company Petronas is not a partner in multi-billion dollar gas deals signed this week between a Malaysian company and the Iranian government, a top company official said on Wednesday.

“We are not aware of what it is all about; all I know is what I read in the media. I can confirm that it has nothing to do with Petronas,” Petronas chief executive officer Hassan Marican told reporters.

Iran’s state television reported on Tuesday that the country had signed gas deals worth $14 billion with Malaysia.

The deals involved a project to produce liquefied natural gas (LNG) and the development of two gas fields, state television said.

The ISNA news agency said the deals were signed on Monday with Malaysia’s SKS group, a private entity linked to Malaysian billionaire Syed Mokhtar Al-Bukhary.

It was not clear if the deals were related to an agreement signed in 2007, the news agency said.

SKS in December last year struck a $16 billion gas development contract with Iran, which boasts the world’s second largest gas reserves after Russia.

Under the 2007 deal, SKS will team up with the National Iranian Oil Company (NIOC) to develop the southern Golshan and Ferdows gas fields and build plants to produce LNG.

Separately, Hassan said Petronas has not yet finalised its investment in a LNG project in Iran.

“We have not finalised that, there is no further update on the LNG project,” said Hassan.

In July, Petronas said it could not come to a final decision on its investment in Iran’s Pars LNG project due to rising costs and because it had not finalised its discussion with the Iranians.

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Posted in COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, IRAN, MALAYSIA, NUCLEAR ENERGY, OPEC, PETROL, RECESSION, RUSSIA, THE FLOW OF INVESTMENTS | Leave a Comment »

KUWAIT TAKES SWIPE AT ISRAELI RIGHTS VIOLATIONS IN PALESTINE

Posted by Gilmour Poincaree on December 10, 2008

Monday, December 6th, 2008

PUBLISHED BY ‘THE ARAB TIMES’ (Kuwait)

GENEVA, Dec 6, (KUNA): Kuwait condemned late Friday Israel’s human rights violations in Palestinian territories and its failure to include these violations in the reports submitted to the international community. This came during an interjection by Kuwait’s permanent mission to the UN in Geneva, made by Councellor Najib Al-Bader, during a work-team session of the Universal Periodic Review stemming from the Human Rights Council, tasked with reviewing a report submitted by Israel. Al-Bader said the report was void of any indication at the legal rights of the Palestinian people and overlooked all resolutions of the Human Rights Council and other international agencies.

He added that Israelis denied the Palestinians the right to determine their fate despite the fact that this right had been acknowledged by the UN’s Security Council and General Assembly, as well as the International Court of Justice and Israel itself. The Kuwaiti diplomat emphasized that enabling the Palestinians to determine their fate and establish an independent state on territories occupied since 1967 would provide basic guarantees for boosting human rights and consolidating global peace and security. He called for including a recommendation pertaining to this issue in the report.

Moreover, Al-Bader noted the suffering of Arab prisoners in Israeli jails, whom he said were held under harsh circumstances, while also speaking of the deteriorating health conditions of those hailing from the occupied Syrian Golan Heights held in Israeli prisons. He called for issuing a recommendation in the report over the importance of implementing all resolutions of the Human Rights Council related to the release of Syrian prisoners held in Israeli jails and ending occupation of the Golan Heights. The Universal Period Review (UPR) is a unique process which involves a review of the human rights records of all 192 UN member states once every four years. The UPR is a state-driven process, under the auspices of the Human Rights Council, which provides the opportunity for each state to declare what actions they have taken to improve the human rights situations in their countries and to fulfill their human rights obligations. As one of the main features of the council, the UPR is designed to ensure equal treatment for every country when their human rights situations are assessed.

Meanwhile, Kuwait deplored late Friday all acts of piracy and armed robberies against the ships off the Somali coast and urged the international community to join forces to eradicate the scourge. Addressing the General Assembly as it met to discuss the “Oceans and the Law of the Sea,” Kuwaiti diplomat Mohammed Al-Zo’bi emphasized the importance Kuwait attaches to the subject of oceans and the law of the sea. He said he was concerned at the increase in piracy and armed robberies against ships, specifically the recent hijacking of the Saudi tanker off the coast of Somalia, and stated that such activity threatened trade and maritime navigation, and jeopardized the lives of the crews on board.

In that regard, he commended the Security Council for its adoption of resolution 1864 earlier this month, which focused on strengthening global efforts to combat piracy off Somalia’s coast and expanding the mandate of state and regional organizations working with Somali officials towards that goal. He said that protecting the marine environment and its natural resources was also of utmost importance to Kuwait and called for a more integrative approach to expanded research and measures aimed at preserving the biodiversity of oceans and seas from the impact of manmade and natural climate change.

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Posted in CARGO PIRACY, ENVIRONMENT, FOREIGN POLICIES, FOREIGN POLICIES - USA, HUMAN RIGHTS, INTERNATIONAL RELATIONS, ISRAEL, KUWAIT, PALESTINE, THE ISRAELI-PALESTINIAN STRUGGLE, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA, WATER | Leave a Comment »

REDESIGNING CAPITALISM

Posted by Gilmour Poincaree on December 10, 2008

Monday, December 8th, 2008, 10:21 am ET

by Michel Rocard

PUBLISHED BY ‘THE JORDAN TIMES’

When the heads of state of the world’s 20 largest economies come together on short notice, as they just did in Washington, D.C., it is clear how serious the current global crisis is. They did not decide much, except to call for improved monitoring and regulation of financial flows. More importantly, they committed themselves to launching a lasting process to reform the world’s financial system.

Of course, those who dreamed of a Bretton Woods II were disappointed. But the original Bretton Woods framework was not built in a day; indeed, the 1944 conference was preceded by two and-a-half years of preparatory negotiations, which is probably the minimum needed to decide such weighty issues. The recent G-20 summit occurred with virtually no real preliminary work.

Three tasks must now be addressed. First, a floor must be put under the international financial system in order to stop its collapse. Second, new regulations are needed once the system revives, because if it remains the same way, it will only produce new crises. Finding the right mix will not be easy. For 25 years, the world has experienced a huge financial crisis every five years, each seemingly with its own cause.

The third task is to focus on real economic activity, end the recession, sustain growth, and, above all, reform the capitalist system to make it be less dependent on finance. Long-term investments, not short-term profits, and productive work, rather than paper gains, need to be supported.

The first task is already being tackled. But, although the United States and some European countries have gone a long way toward restoring the lending capacity of banks, that may not be enough. After all, if the economy is to grow again, banks need borrowers, but the recession has led entrepreneurs to cut their investments.

The second task remains open. Disagreements about how to re-regulate the financial markets are deep, owing to countless taboos and the huge interests at stake. Moreover, there can be no comprehensive agreement that does not take into account the relationship between finance and the real economy.

The essential problem in addressing the third task is to find out precisely what is going on in the real economy. Some states (Iceland and Hungary) are clearly bankrupt. Some merely face a hazardous financial situation (Denmark, Spain, and others). Their financial crisis is the main reason for their weakness.

All of these problems are so difficult to resolve because they have been festering for so long. It is now increasingly evident that today’s crisis has its roots in February 1971, when US president Richard Nixon decided to break the link between the dollar and gold. Until that point, America’s pledge to maintain the gold standard was the basis for the global fixed-exchange-rate system, which was the heart of the Bretton Woods framework.

During the 27 years that it lasted, huge growth in international trade, supported by non-volatile pricing, was the norm, and large financial crises were absent.

Since then, the international financial system has been highly volatile. The era of floating exchange rates that followed the end of the gold standard required the development of products that could protect international trade from price volatility. This opened the way to options, selling and buying on credit, and derivatives of all kinds.

These innovations were considered technical successes. Prices were (mostly) stabilised, but with a slow, if continuous, rising trend. The market for these financial products grew over 30 years to the point that they delivered huge opportunities for immediate gain, which provided a strong incentive for market participants to play with them more and more.

During this time, capitalism – smooth and successful between 1945-1975 (sustained high growth, low unemployment, and no financial crises) – weakened. Through pension funds, investment funds, and arbitrage (or hedge) funds, shareholders became well organised and seized power in developed countries’ firms. Under their pressure, more and more processes were “outsourced”.

In real terms, wages no longer rose (indeed, the average real wage has been stagnant for 25 years in the US), and a growing share of manpower (currently around 15 per cent) was without steady employment.

Everywhere, the share of wages and incomes began to fall as a proportion of GDP. As a result, consumption weakened, unsteady employment grew, and unemployment stopped declining.

Under such circumstances, the upper middle classes in developed countries increasingly came to look for capital gains instead of improving their living standards through productive work. This promoted inequality, and led to the under-regulated financial system’s seizure of power over the entire economy, destabilising the real economy by fatally weakening its capacity to react to external shocks.

Today’s crisis marks the end of economic growth fuelled only by credit. But untying the knot that an overweening financial sector has drawn around the economy will take time. Indeed, there is still no consensus that this needs to be done. Yet the G-20 has opened the way to discussion of these fundamental issues.

Today’s recession will be a long one, but it will compel everybody to consider its root causes.

(*) – The writer, former prime minister of France and leader of the Socialist Party, is a member of the European Parliament.

©Project Syndicate, 2008. www.project-syndicate.org

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THE TRIUMPHANT RETURN OF JOHN MAYNARD KEYNES

Posted by Gilmour Poincaree on December 10, 2008

Monday, December 8th, 2008, 9:47 am ET

by Joseph E. Stiglitz

PUBLISHED BY ‘THE JORDAN TIMES’

We are all Keynesians now. Even the right in the United States has joined the Keynesian camp with unbridled enthusiasm and on a scale that at one time would have been truly unimaginable.

For those of us who claimed some connection to the Keynesian tradition, this is a moment of triumph, after having been left in the wilderness, almost shunned, for more than three decades. At one level, what is happening now is a triumph of reason and evidence over ideology and interests.

Economic theory had long explained why unfettered markets were not self-correcting, why regulation was needed, why there was an important role for government to play in the economy. But many, especially people working in the financial markets, pushed a type of “market fundamentalism”. The misguided policies that resulted – pushed by, among others, some members of US President-elect Barack Obama’s economic team – had earlier inflicted enormous costs on developing countries. The moment of enlightenment came only when those policies also began inflicting costs on the US and other advanced industrial countries.

Keynes argued not only that markets are not self-correcting, but that in a severe downturn, monetary policy was likely to be ineffective. Fiscal policy was required. But not all fiscal policies are equivalent. In America today, with an overhang of household debt and high uncertainty, tax cuts are likely to be ineffective (as they were in Japan in the 1990s). Much, if not most, of last February’s US tax cut went into savings.

With the huge debt left behind by the Bush administration, the US should be especially motivated to get the largest possible stimulation from each dollar spent. The legacy of underinvestment in technology and infrastructure, especially of the green kind, and the growing divide between the rich and the poor, requires congruence between short-run spending and a long-term vision.

That necessitates restructuring both tax and expenditure programmes. Lowering taxes on the poor and raising unemployment benefits while simultaneously increasing taxes on the rich can stimulate the economy, reduce the deficit, and reduce inequality. Cutting expenditures on the Iraq war and increasing expenditures on education can simultaneously increase output in the short and long run and reduce the deficit.

Keynes was worried about a liquidity trap – the inability of monetary authorities to induce an increase in the supply of credit in order to raise the level of economic activity. US Federal Reserve Chairman Ben Bernanke has tried hard to avoid having the blame fall on the Fed for deepening this downturn in the way that it is blamed for the Great Depression, famously associated with a contraction of the money supply and the collapse of banks.

And yet one should read history and theory carefully: preserving financial institutions is not an end in itself, but a means to an end. It is the flow of credit that is important, and the reason that the failure of banks during the Great Depression was important is that they were involved in determining creditworthiness; they were the repositories of information necessary for the maintenance of the flow of credit.

But America’s financial system has changed dramatically since the 1930s. Many of America’s big banks moved out of the “lending” business and into the “moving business”. They focused on buying assets, repackaging them, and selling them, while establishing a record of incompetence in assessing risk and screening for creditworthiness. Hundreds of billions have been spent to preserve these dysfunctional institutions. Nothing has been done even to address their perverse incentive structures, which encourage shortsighted behaviour and excessive risk taking. With private rewards so markedly different from social returns, it is no surprise that the pursuit of self-interest (greed) led to such socially destructive consequences. Not even the interests of their own shareholders have been served well.

Meanwhile, too little is being done to help banks that actually do what banks are supposed to do – lend money and assess creditworthiness.

The Federal government has assumed trillions of dollars of liabilities and risks. In rescuing the financial system, no less than in fiscal policy, we need to worry about the “bang for the buck.” Otherwise, the deficit – which has doubled in eight years – will soar even more.

In September, there was talk that the government would get back its money, with interest. As the bailout has ballooned, it is increasingly clear that this was merely another example of financial markets misappraising risk – just as they have done consistently in recent years. The terms of the Bernanke-Paulson bailouts were disadvantageous to taxpayers, and yet remarkably, despite their size, have done little to rekindle lending.

The neo-liberal push for deregulation served some interests well. Financial markets did well through capital market liberalisation. Enabling America to sell its risky financial products and engage in speculation all over the world may have served its firms well, even if they imposed large costs on others.

Today, the risk is that the new Keynesian doctrines will be used and abused to serve some of the same interests. Have those who pushed deregulation ten years ago learned their lesson? Or will they simply push for cosmetic reforms – the minimum required to justify the mega-trillion dollar bailouts? Has there been a change of heart, or only a change in strategy? After all, in today’s context, the pursuit of Keynesian policies looks even more profitable than the pursuit of market fundamentalism!

Ten years ago, at the time of the Asian financial crisis, there was much discussion of the need to reform the global financial architecture. Little was done. It is imperative that we not just respond adequately to the current crisis, but that we undertake the long-run reforms that will be necessary if we are to create a more stable, more prosperous, and equitable global economy.

(*) – The writer, professor of economics at Columbia University and recipient of the 2001 Nobel Prize in Economics, is co-author, with Linda Bilmes, of “The Three Trillion Dollar War: The True Cost of the Iraq Conflict”. ©Project Syndicate, 2008. www.project-syndicate.org

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Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA | Leave a Comment »

AFRICOM CHINA AND CONGO RESOURCE WARS

Posted by Gilmour Poincaree on December 10, 2008

Tuesday, Dec 09, 2008

by F. William Engdahl – Online Journal

PUBLISHED BY ‘INFOWARS’

Just weeks after President George W. Bush signed the order creating a new US military command dedicated to Africa, AFRICOM, events on the mineral-rich continent have erupted which suggest a major agenda of the incoming Obama Presidency will be for the son of a black Kenyan to focus US resources, military and other, on dealing with the Republic of Congo, the oil-rich Gulf of Guinea, the oil-rich Darfur region of southern Sudan and increasingly the Somali ‘pirate threat’ to sea lanes in the Red Sea and Indian Ocean. The legitimate question is whether it is mere coincidence that Africa appears just at this time to become a new geopolitical ‘hot spot’ or whether it has a direct link to the formal creation of AFRICOM.

What is striking is the timing. No sooner had AFRICOM become operational than major new crises broke out in both the Indian Ocean-Gulf of Aden regarding spectacular incidents of alleged Somali piracy, as well as eruption of bloody new wars in Kivu Province in the Republic of Congo. The common thread connecting both is their importance, as with Darfur in southern Sudan, for China’s future strategic raw materials flow.

The latest fighting in the eastern part of the Congo (DRC) broke out in late August when Tutsi militiamen belonging to the Congrès National pour la Défense du Peuple (CNDP, National Congress for the Defense of the People) of General Laurent Nkunda forced loyalist troops of the Forces armées de la République démocratique du Congo (FARDC, Armed Forces of the Democratic Republic of Congo) to retreat from their positions near Lake Kivu, sending hundreds of thousands of displaced civilians fleeing in the process and prompting the French foreign minister, Dr. Bernard Kouchner, to warn of the imminent risk of ‘huge massacres.’

Nkunda, like his mentor, Rwanda’s Washington-backed dictator, Paul Kagame, is an ethnic Tutsi who alleges that he is protecting the minority Tutsi ethnic group against remnants of the Rwandan Hutu army that fled to Congo after the Rwandan genocide in 1994. MONUC UN peacekeepers reported no such atrocities against the minority Tutsi in the northeast, mineral rich Kivu region. Congolese sources report that attacks against Congolese of all ethnic groups are a daily occurrence in the region. Laurent Nkunda’s troops are responsible for most of these attacks, they claim.

Strange resignations

The stage for political chaos in Congo was further set in September when the Democratic Republic of Congo’s 83-year-old prime minister, Antoine Gizenga, resigned after two years. Then at end of October, with suspicious timing, the commander of the United Nations peacekeeping operation, the Mission de l’Organisation des Nations-Unies au Congo (MONUC, Mission of the United Nations Organization in the Congo), Spanish Lieutenant General Vicente Diaz de Villegas, resigned after fewer than two months on the job, citing, ‘lack of confidence’ in the leadership of DRC President Joseph Kabila. Kabila, the Congo’s first democratically elected president, has also been involved in negotiating a major $9 billion trade agreement between the DRC and China, something which Washington is clearly not happy about.

Nkunda is a long-standing henchman of Rwandan President, US-trained, Kagame. All signs point to a heavy, if covert, USA role in the latest Congo killings by Nkunda’s men. Nkunda himself is a former Congolese Army officer, teacher and Seventh Day Adventist pastor. But killing seems to be what he is best at.

Much of Nkunda’s well-equipped and relatively disciplined forces are from the bordering country of Rwanda and the rest have been recruited from the minority Tutsi population of the Congolese province of North Kivu. Supplies, finance and political support for this Congolese rebel army come from Rwanda. According to the American Spectator magazine, ‘President Paul Kagame of Rwanda has long been a supporter of Nkunda, who originally was an intelligence officer in the Rwanda leader’s overthrow of the Hutu despotic rule in his country.’

As the Congo News Agency reported on October 30, ‘Some have bought into the pretext of an endangered Tutsi minority in Congo. They never fail to mention that Laurent Nkunda is supposedly fighting to protect “his people.” They have failed to question his true motives which are to occupy the mineral-rich North-Kivu province, pillage its resources, and act as a proxy army in eastern Congo for the Tutsi-led Rwandan government in Kigali. Kagame wants a foothold in eastern Congo so his country can continue to benefit from the pillaging and exporting of minerals such as columbite-tantalite (coltan). Many experts on the region agree today that resources are the true reason why Laurent Nkunda continues to create chaos in the region with the help of Paul Kagame.’

The USA role and AFRICOM

Evidence which was presented in a French court in a ruling made public in 2006 claimed that Kagame was responsible for organizing the shooting down of the plane carrying Hutu President of Rwanda Juvénal Habyarimana, in April 1994, the event that set off the indiscriminate killing of hundreds of thousands of people, both Hutu and Tutsi.

The end result of the killings in which perhaps as many as a million Africans perished was that US and UK backed Paul Kagame — a ruthless military dictator trained at the US Army Command-General Staff College at Fort Leavenworth Kansas — was firmly in control as dictator of Rwanda. Since then he has covertly backed repeated military incursions by General Nkunda into the mineral-rich Kivu region on the pretext it was to defend a small Tutsi minority there. Kagame had repeatedly rejected attempts to repatriate those Tutsi refugees back to Rwanda, evidently fearing he might lose his pretext to occupy the mineral riches of Kivu.

Since at least 2001, according to reports from Congo sources, the US military has also had a base at Cyangugu in Rwanda, built of course by Dick Cheney’s old firm, Halliburton, conveniently enough near the border to Congo’s mineral-rich Kivu region.

The 1994 massacre of civilians between Tutsi and Hutu was, as Canadian researcher Michel Chossudovsky described it, ‘an undeclared war between France and America. By supporting the build up of Ugandan and Rwandan forces and by directly intervening in the Congolese civil war, Washington also bears a direct responsibility for the ethnic massacres committed in the Eastern Congo, including several hundred thousand people who died in refugee camps.’ He adds, ‘Major General Paul Kagame was an instrument of Washington. The loss of African lives did not matter. The civil war in Rwanda and the ethnic massacres were an integral part of US foreign policy, carefully staged in accordance with precise strategic and economic objectives.’

Now Kagame’s former intelligence officer, Nkunda, leads his well-equipped forces to take Goma in the eastern Congo as part of an apparent scheme to break the richest minerals region away from Kinshasha. With the US military beefing up its presence across Africa under AFRICOM since 2007, the stage was apparently set for the current resources grab by the US-backed Kagame and his former officer, Nkunda.

Today the target is China

If France was the covert target of US ‘surrogate warfare’ in 1994, today it is clearly China, which is the real threat to US control of Central Africa’s vast mineral riches. The Democratic Republic of Congo was renamed from the Republic of Zaire in 1997 when the forces of Laurent Désiré Kabila brought Mobutu’s 32-year reign to an end. Locals call the country Congo-Kinshasa.

The Kivu region of the Congo is the geological repository of some of the world’s greatest strategic minerals. The eastern border straddling Rwanda and Uganda, runs on the eastern edge of the Great African Rift Valley, believed by geologists to be one of the richest repositories of minerals on the face of the earth.

The Democratic Republic of the Congo contains more than half the world’s cobalt. It holds one-third of its diamonds, and, extremely significantly, fully three-quarters of the world resources of columbite-tantalite or “coltan” — a primary component of computer microchips and printed circuit boards, essential for mobile telephones, laptops and other modern electronic devices.

America Mineral Fields, Inc., a company heavily involved in promoting the 1996 accession to power of Laurent Kabila, was, at the time of its involvement in the Congo’s civil war, headquartered in Hope, Arkansas. Major stockholders included long-time associates of former President Clinton going back to his days as governor of Arkansas. Several months before the downfall of Zaire’s French-backed dictator, Mobutu, Laurent Desire Kabila based in Goma, Eastern Zaire, had renegotiated the mining contracts with several US and British mining companies including American Mineral Fields. Mobutu’s corrupt rule was brought to a bloody end with the help of the US-directed International Monetary Fund.

Washington was not entirely comfortable with Laurent Kabila, who was finally assassinated in 2001. In a study released in April 1997 barely a month before President Mobutu Sese Seko fled the country, the IMF had recommended “halting currency issue completely and abruptly” as part of an economic recovery programme. A few months later upon assuming power in Kinshasa, the new government of Laurent Kabila Desire was ordered by the IMF to freeze civil service wages with a view to “restoring macro-economic stability.” Eroded by hyperinflation, the average public sector wage had fallen to 30,000 new Zaires (NZ) a month, the equivalent of one US dollar.

According to Chossudovsky, the IMF’s demands were tantamount to maintaining the entire population in abysmal poverty. They precluded from the outset a meaningful post-war economic reconstruction, thereby contributing to fuelling the continuation of the Congolese civil war in which close to 2 million people have died.

Laurent Kabila was succeeded by his son, Joseph Kabila who went on to become the Congo’s first democratically elected President, and appears to have held a closer eye to the welfare of his countrymen than did his father.

Now, in comes the new US AFRICOM. Speaking to the International Peace Operations Association in Washington, D.C., on Oct. 27, General Kip Ward, commander of AFRICOM defined the command’s mission as ‘in concert with other US government agencies and international partners, [to conduct] sustained security engagements through military-to-military programs, military-sponsored activities, and other military operations as directed to promote a stable and secure African environment in support of US foreign policy.’

The ‘military operations as directed to promote a stable and secure African environment in support of US foreign policy,’ today, are clearly aimed squarely at blocking China’s growing economic presence in the region.

In fact, as various Washington sources state openly, AFRICOM was created to counter the growing presence of China in Africa, including the Democratic Republic of Congo, to secure long-term economic agreements for raw materials from Africa in exchange for Chinese aid and production sharing agreements and royalties. By informed accounts, the Chinese have been far shrewder. Instead of offering only savage IMF-dictated austerity and economic chaos, China is offering large credits, soft loans to build roads and schools in order to create good will.

Dr. J. Peter Pham, a leading Washington insider who is an advisor of the US State and Defense Departments, states openly that among the aims of the new AFRICOM is the objective of ‘protecting access to hydrocarbons and other strategic resources which Africa has in abundance . . . a task which includes ensuring against the vulnerability of those natural riches and ensuring that no other interested third parties, such as China, India, Japan, or Russia, obtain monopolies or preferential treatment.’

In testimony before the US Congress supporting creation of AFRICOM in 2007, Pham, who is closely associated with the neoconservative Foundation for Defense of Democracies, stated, ‘This natural wealth makes Africa an inviting target for the attentions of the People’s Republic of China, whose dynamic economy, averaging 9 percent growth per annum over the last two decades, has an almost insatiable thirst for oil as well as a need for other natural resources to sustain it. China is currently importing approximately 2.6 million barrels of crude per day, about half of its consumption; more than 765,000 of those barrels — roughly a third of its imports — come from African sources, especially Sudan, Angola, and Congo (Brazzaville). Is it any wonder, then, that . . . perhaps no other foreign region rivals Africa as the object of Beijing’s sustained strategic interest in recent years. Last year the Chinese regime published the first ever official white paper elaborating the basis of its policy toward Africa.

‘This year, ahead of his 12-day, eight-nation tour of Africa — the third such journey since he took office in 2003 — Chinese President Hu Jintao announced a three-year, $3 billion program in preferential loans and expanded aid for Africa. These funds come on top of the $3 billion in loans and $2 billion in export credits that Hu announced in October 2006 at the opening of the historic Beijing summit of the Forum on China-Africa Cooperation (FOCAC), which brought nearly 50 African heads of state and ministers to the Chinese capital.

‘Intentionally or not, many analysts expect that Africa — especially the states along its oil-rich western coastline — will increasingly becoming a theatre for strategic competition between the United States and its only real near-peer competitor on the global stage, China, as both countries seek to expand their influence and secure access to resources.’

Notably, in late October Nkunda’s well-armed troops surrounded Goma in North Kivu and demanded that Congo President Joseph Kabila negotiate with him. Among Nkunda’s demands was that Kabila cancel a $9 billion joint Congo-China venture in which China gets rights to the vast copper and cobalt resources of the region in exchange for providing $6 billion worth of road construction, two hydroelectric dams, hospitals, schools and railway links to southern Africa, to Katanga and to the Congo Atlantic port at Matadi. The other $3 billion is to be invested by China in development of new mining areas.

Curiously, US and most European media neglect to report that small detail. It seems AFRICOM is off to a strong start as the opposition to China in Africa. The litmus will be who President Obama selects as his Africa person and whether he tries to weaken Congo President Joseph Kabila in favor of backing Nkunda’s death squads, naturally in the name of ‘restoring democracy.’

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PUBLISHED BY ‘INFOWARS’

Posted in BANKING SYSTEM - USA, BANKING SYSTEMS, BARACK HUSSEIN OBAMA -(DEC. 2008/JAN. 2009), CHINA, CIVIL WAR - CONGO, COMMODITIES MARKET, CONGO, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES - USA, IMF, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, INTERNATIONAL RELATIONS, MACROECONOMY, METALS, METALS INDUSTRY, MINING INDUSTRIES, PETROL, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE MEDIA (US AND FOREIGN), THE UNITED NATIONS, USA | 1 Comment »

CORUS SEEKS UK’S FINANCIAL AID

Posted by Gilmour Poincaree on December 10, 2008

10 Dec 2008, 01:29 hrs IST

AGENCIES

PUBLISHED BY ‘THE TIMES OF INDIA’

NEW DELHI: Tata Group-owned steel maker Corus on Tuesday said it is in talks with the British government to part-fund a scheme to compensate workers affected by the reduction of working hours at its UK premises.

“Barring the UK, across Europe, governments have programmes which take care of employment costs related to people affected by work-reduction schemes. We are in talks with the British government to extend a similar benefit,” Corus spokesperson Bob Jones said.

Most European countries have schemes under which governments pay up to 70% of the basic salary of affected employees. Pointing out that the financial aid cannot be estimated now, Jones maintained that the company is yet to make a formal proposal in this regard.

Last week, Corus, a wholly-owned subsidiary of Tata Steel, had applied to the Netherlands government to part-fund a similar scheme envisaging reduction by 4,600 working hours (equivalent of 1,100 fulltime jobs).

The Tatas had recently sought massive financial aid from the UK government for its iconic brands Jaguar and Land Rover. Steel makers worldwide are trimming production and undertaking cost-cutting in the wake of slackening demand.

In November, Corus said it would slash 400 jobs apart from announcing a 30% cut in output. The European steel maker had also said that it would cut 146 jobs at a tube division. In Europe, the company has total 42,000 employees.

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PUBLISHED BY ‘THE TIMES OF INDIA’ (UK)

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEMS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, METALS INDUSTRY, MINING INDUSTRIES, NATIONAL WORK FORCES, RECESSION, STEEL, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS, UNITED KINGDOM | Leave a Comment »